Silicon Valley Comes to Colorado – Tom Bollich CEO of Surna

Tom Bollich CEO of Surna

Tom Bollich was the co-founder of Zynga which created some of the most famous Facebook games to date, including Farmville which had ten million daily users at its peak. After leaving Zynga, Tom saw the opportunity in cannnabis and founded Surna in Boulder Colorado. Surna is solving the biggest technical and engineering problems in cannabis cultivation. Surna’s chillers and air handlers are arguably the most efficient at removing heat from grow rooms, they do this by removing heat via water instead of air. Listen in as Tom describes how he is bringing Silicon Valley’s best technology to the cannabis industry.

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Matthew Kind: What is it like to be one of the creators of Silicon Valley's most successful online games and then peeved to the cannabis industry and take on its biggest technical challenges. We are going to find out the answer to that question today in our interview with Tom Bollich, CEO of Surna in Boulder, Colorado. Welcome, Tom.

Tom Bollich: Thanks, Matt.

Matthew Kind: Tom, for people that aren't familiar with you and your background, can you give us a little background of yourself in Silicon Valley and then how you transition to the Cannabis industry in Colorado?

Tom Bollich: Sure. Well, I guess in the beginning, I use to work on AI for robotics. I actually did work in some online casino stuff for a while -- I was one of the co-founders of Zynga -- and then decided to jump into cannabis not too long after that. I guess I really don't like to sleep very much.

Mathew Kind: Yeah, Zynga is, I mean for many people out there, most have heard of Zynga but almost all people out there got a invite for Farmville one time or another or some of the other games, but I remember distinctly Zynga so that's well done, congratulations.

Tom Bollich: Thank you.

Matthew Kind: And you're totally done with Zynga now and have moved on to Cannabis industry.

Tom Bollich: All hands on this one, that's for sure.

Matthew Kind: And how about a little background on what Surna does in the space?

Tom Bollich: Well, I mean Surna, the way we positioned it is that it is an engineering and manufacturing firm. I mean there is a lot of stuff that is missing on this industry right now; a lot it has been in the underground for so long. There is not a lot of science. There is almost no real engineering so were focused on that. I'm pretty positive we spend more of engineering hours on this industry than anyone else has. We're about to see the fruits of that labor soon.

Matthew Kind: For the growers that are listening to the show, what can you tell them about the chillers and air handlers so they can understand what Surna does for technical specs standpoint.

Tom Bollich: Yeah, because one of our key stones right now is climate control so we deal with the thermodynamics inside of a grow, and our first product was kind of a small scale, very affordable water chillers. Water Chillers tend to be very expensive and as a system, there are two or three times a cost of H pack. We've brought the price down considerably. In fact, we're probably in line with regular H pack. Because at the end of the day, if you remember, is that a grow has to be treated more like a server farm than like a comfort cooling which is what H pack is good at. So we are able to provide a lot of cooling for a lot less energy.

Matthew Kind: I like the way you frame that there. It is . . . I can see that the Silicon Valley coming into at it. It is like a server farm. That's a very great point.

Tom Bollich: You have to remember like every thousand watt bulb, it's kind of a weird term but it's about half a ton of heat. And then for instance, if you have 1,000 lights, that's 500 tons of heat you have to deal with. We're normally, let's say you're in the middle of Nevada, the heat from being in the desert is about 20 tons so you can kind of get mentally the scale of things when you're dealing with this much heat. So the most efficient way to process this is with water. It's not with like a swamp cooler. What we have is like a closed loop chilled water system.

Matthew Kind: Very interesting. Now people . . . The chiller technology is just something that not everybody has their head 100% around. Can you just give us a brief overview of how chillers actually operate?

Tom Bollich: Sure, so what we will do is we are going to take like a thousand light system and what we'll do is we'll install the chillers system outside of the building. It has a loop that goes through all the chillers. It's usually built in redundancy. We're very careful about power usage and what we'll do is we will pipe that cooling system across the entire building. And then we can tap into this loop wherever we want control the temperature and humidity. So that's why it's very efficient. The thermal conductivity of water is 20 times that of air so you can just do so much more with it and that's why we are growing so quickly right now.

Matthew Kind; Yes, I learned that lesson when I got my scuba diving certification. They said that water takes away your body heat so much faster than air. It's really even hard to comprehend so keep that in mind that . . .

Tom Bollich: You can die in 65-degree water. You cannot die in 65-degree air.

Matthew Kind: Yes, yes, it just pulls it out. That's a great way of looking at it, just pulls it out so much more efficiently and faster. Now, I understand you have a new product that will be available soon. Can you give us a little background on that, an idea of how it's going to help growers?

Tom Bollich: Sure. What we've done is kind of evolve all of this into something more cohesive. It's almost essentially like a water cool platform that we have an entire system running on. One part of this, one of the keystone parts of it is we actually have a water cool reflector so that we actually do the heat exchange within the reflector as opposed to the way you're currently designing a grow is you have a light that puts half a ton of heat into air and then you have a cooling system that puts half a ton of cooling into the air.

There is an insulate. It's very inefficient so we've actually designed a reflector that does all that heat exchange locally. It's way more efficient. We've spent so much engineering on this. It's really incredible but it looks like this will be the most efficient system on the planet for cooling lights. So the light will plug into this water-based platform. We're going to have a new trend chiller that plugs into it. We're going to have a system that dehumidifies. We are going to have a system that does the drying process maturing, so all this stuff is just going to run together.

It's going to be way more energy efficient. Some of the buildings we are looking at, putting this into, I believe we saved about 1,000 amperes on their service. So that cost alone saved the company I think almost a million dollars, and we are trying to keep this very price sensitive so it's not going to cost an arm or a leg.

Matthew Kind; Sure, that's incredible. Is there any ROI calculators or anything that customers ask for? How do you frame the cost savings for them so they can get an idea, "Okay, if I put this system in, this is what I am looking at on my ROI?"

Tom Bollich: This platform could . . . Well, I mean at the end of the day, you have to have lighting. You have to have some form of temperature control and you have to run power to the building. The amount of savings we can do on [inaudible 00:09:04] because you have to remember if you have this water cool reflector, then you need far less cooling before you need far less power to the building so you ROI could be as quick as a year, sometimes two.

Matthew Kind: Apart from just the ROI, there is a comfort factor too that's different. I mean, you have a more comfortable room I imagine, as well.

Tom Bollich: Well, the cooling is more evenly distributed so you don't have a centralized system that trying to cool all these lights. Each individual light is cooled by itself. It's highly redundant, it's highly efficient, and the photometrics on our light are incredible because what we did is we mathematically prove what's the best way of getting light to the plain canopy and then we were able to engineer a solution to that.

Matthew Kind: That's incredible. How many customers are using a Surna chiller or air handler right now?

Tom Bollich: Well right now, the chiller we've been selling, I believe we're in over 20 very large grows that stretch all the way from Canada to all across United States but a lot of this chillers we've been selling for home use for like five years. It's a very well proven product and it's very cost effective.

Matthew Kind: That's a very good point you bring up, home use. Do you have some customers that are saying, "Can I use this for my home?"

Tom Bollich: Sure, yeah. There're several people that've been using over the years for their home so typically you'll see people doing 5 to 10 lights at home. It's pretty popular here in Colorado because legally, you can have a home grow. It's proven to be a good update.

Matthew Kind: Does Surna have any competitors right now and everything is so new that I have no idea? Is there anybody on the horizon that looks like they're going to be a challenge?

Tom Bollich: No.

Matthew Kind: Good, that's what you want.

Tom Bollich: Frankly, we're so far ahead of the curve especially when this new platform's rolling. That even when federally legal and train was going after this market very heavily, even they wouldn't have this system. It's very unique. The engineering behind it is pretty incredible. Our head of engineering did the thermodynamics on the Mars rovers so I believe he can do a grow.

Matthew Kind: Let's go to market strategy especially with so much change going on. November 4, we have the potential for Oregon and Alaska to go fully legal at adult use, and then now Florida as well for medical, and possibly for adult use in Washington DC. I mean it's a changing landscape. How do you adapt your marketing strategy as all this different landscape changes?

Tom Bollich: Well, I mean the heart of our strategy is to have the system you have to have. That's the keystone to the whole thing is that if you're using our system and your competitor isn't, there's a good chance you're going to put them completely out of business because the cost of your product would be so much cheaper because we can save your energy, we can save water, we are getting more light more efficiently. It's just having the go-to product is key to it. And then after that, it's mostly some traditional marketing. It's [inaudible 00:13:23]. There's a few other things we have in the works but I think that's the key to it all.

Matthew Kind: And can you tell us a little bit about your recent acquisitions and how they play into your strategy?

Tom Bollich: Where a lot of this product came from was Hydro innovation, which was a small company that made chillers. And then we kind of took that and grew it. We're still kind of looking around, seeing what other technology we can bring into the fold. I love this stuff. We think we are either going to JV with the other companies, train new products to the Cannabis market or just build it ourselves.

Matthew Kind: I read somewhere that Surna's acquiring some intellectual property in the cannabis space apart from the acquisitions, but is that true and what's the strategy there?

Tom Bollich: No, that's mostly with the Hydro innovations, was the IP.

Matthew Kind: And with your background in robotics engineering and working with artificial intelligence, do you see any opportunity to bring the technology to the cannabis industry? You talked a little bit about a server farm. I mean I think a little bit about what VMware is doing in the virtualization space where they're making servers so much efficient. Is there an opportunity to have lighting or different energy resources move around to where it's needed, when it's needed?

Tom Bollich: Yes, it's a very long and complicated process but yeah, I plan on bringing what I know. I know software in a level that no one in this industry does so I plan on bringing that to bare very soon.

Matthew Kind: Now Zynga, I don't know how much overlap there is here but I would love to hear your opinion. I mean one of the key things about the games with Zynga is that they are more fun to play when your friend's with you and there's incentives to get your friends involve and there is kind of viral growth aspect to it. I mean is there . . . We're not dealing in the world of bits here but matter now. Is there a way or anything you learned from Zynga you can carry over into Surna as far as, you know, getting more people on board faster or is just that impossible on the world of matter?

Tom Bollich: I mean that's more of a B2C play. We're more of a B2B. I mean there are a few ideas we're working on. I mean one of the things we definitely learned at Zynga is how to make something that's usable and that's why C is we're bringing to Surna.

Matthew Kind: And where do you see Surna in five years? What's your vision?

Tom Bollich: Hell, there's no way of telling that. I mean no one can tell you where this industry is going to be in five years. I mean it almost feels like the entire industry changes every six months.

Matthew Kind: It does.

Tom Bollich: Yeah, because it is a very similar feel to when I was at Zynga. It was kind of a wild, wild west. No one really knows what's going on but everyone knows something going on but they don't know what.

Matthew Kind: Right. That feels like there's a huge opportunity though.

Tom Bollich: Yeah, I mean there is huge opportunity but you've got to be careful because this industry is . . . You can think of this as being a bubble. If anything it's like a hobble bubble because you can have a product like if it's Cannabis-based, you actually can't have a product cross the state border so each day is its own private little bubble and it's going to do its own thing.

Matthew Kind: Yeah, that's why it's smart to be in the ancillary part of the business. I see your strategy there, that's great. I see grower's kind of fall into two buckets; maybe you disagree but let me know. There's the growers that are just totally onbored with technological change, "This is what I am doing." And then there is another bucket where there is a total resistance and I don't seem to see like a middle bucket where there is, "You know, I'm open to some change." Are those the group that's in the bucket where they're not adopting change? Are they going to be left behind? And if so, how quick?

Tom Bollich: For sure. Honestly, if you can't get your head wrap around the new stuff that's coming out, you're going to get left behind almost immediately now. I mean the scale of things first seen happening at Colorado is pretty massive. I mean there are growers online here, there're 1.2 million square feet. So if the way you are thinking of things is small little rooms with 10 lights or so, then you're just going to be left behind.

Matthew Kind: How do you feel like LEDs come into the picture versus traditional grow light? How do you feel about those?

Tom Bollich: They're tough. I mean it's . . . The problem with LEDs' they've had a very mixed history in this industry. You have to remember is that they came out probably 8, 10 years ago. It's the new way to grow. People spend several million dollars on them and then they didn't do anything so there is still that kind of a bad taste in everyone's mouth that got those. But there are product coming online, they're LED-based. They seem to be working and we are looking to incorporate those into our system.

Matthew Kind: Okay. As you look into the future, what aspect of the technology is the most exciting to you?

Tom Bollich: Well, I mean at some point you know, this is going to be a big data play. At some point, you're going to have one grower able to manipulate massive grows without a bunch of hands-on.

Matthew Kind: So robotics?

Tom Bollich: Robotics, I mean there is a lot of thing you can do with algorithms based on just what's happening on the grow and analyzing that . . . I mean there's a lot to bring into play.

Matthew Kind: So you are seeing something where all the variables of a grow room and plant are parsed by some software and you get a sense of the health of the operations from that and then optimize from there?

Tom Bollich: Yup, I mean that's kind of it in that show. The problem is if you have an investor who is putting a ton of money in a grow, he may or may not know how to grow, most likely not; hires a consultant group or brings on his own growers and he has really no visibility in to how well this thing is doing because the grow can look fine for a long of time and then suddenly it's not.

Matthew Kind: Right, good point. Some people say that we're entering period of exponential technological change that may be difficult for the human brain to fully grasp what's happening and I think with you background with AI and robotics, you might be able to understand this little better and learn some insight. Do you see technology in an exponential growth curve anywhere that might not be obvious to other people?

Tom Bollich: Yes, there is a lot of stuff happening on periphery especially in Silicon Valley that really needs to get, brought into this industry more.

Matthew Kind: I agree. That'll be exciting. As that happens, it sounds like you're on the bi-way of making that happen so best of luck. As we close, what's the best way for people to follow Surna and learn more about Surna?

Tom Bollich: We have a new website out and that's probably the best way to know what's going on. We always have Surna Inc. on twitter so . . .

Matthew Kind: And just for everybody listening, Surna is S-U-R-N-A.com. Okay. Well, thanks so much to Tom Bollich. I really appreciate it. If you have any questions or comments, just please put them in the show notes in the comment section. We'll try to address those. Thanks so much, Tom.

Tom Bollich: Great. Thanks, Matt.

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