Any product that aims to help Mother Nature thrive and help the world function better is a great product. Kyle Ewing, the Founder and President of TerraSlate, talks about the genesis of the idea for TerraSlate paper to product development. The product is environmentally conscious as it minimizes the use of paper. With its efficiency, TerraSlate has become bigger, and the need for manpower also increased. With Kyle’s management efforts, he shares his key learnings from running the business as well as the challenges they had to go through as a team. He highlights his company’s overarching protocol which stands on three pillars of success – quality, speed, and customer service.

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The TerraSlate Advantage with Kyle Ewing

We’re with Kyle Ewing. He’s the Founder and President of TerraSlate. I had the pleasure of meeting him at a horse event. We’re in the signature flight terminal outside of DIA and Kyle’s about to fly to Houston.

We’re headed down to Houston on a jet to see some clients in the oil and gas industry. You will all have to cross your fingers for a good meeting!

Kyle, tell us about your business and who you serve.

My business is called TerraSlate. We make treeless paper that’s 100% waterproof and rip-proof. People often ask me, “Why do you need paper in a digital age?” What I tell them is there are millions and millions of things that not only get printed, but that get laminated and handled heavily on a daily basis. Something like a restaurant menu is always a good go-to example. Restaurant menus get handled by as many as 100 people a day and they get wiped down, spilled on, and people put hot coffee cups on them. They get wine or salsa spilled all over them and what’s cool is you can wipe them clean. For a restaurant, that’s very advantageous.

The other benefits are you can print it through any laser printer and you can write on it with a pen. Instead of printing out a sheet, then taking it over to the laminating machine and feeding the laminating machine one sheet at a time with traditional laminating pouches, you can put a ream of TerraSlate in your printer and click go. When it comes out, it’s done. You can do 500 in two minutes. We do everything from restaurant menus to work with biotech firms for materials in their labs. The paper is non-porous. If they’re working with hazardous chemicals or something like anthrax, the paper can go into the lab. It can get written on or used, usually, it’s a chart or some type that’s being filled out, and then it can go into the chemical bath and go out of the lab. You don’t have to type your notes before leaving the lab anymore.

With grocery stores, we do a lot of price tags, as well as behind the scenes manuals and foodservice guides. The next time you go to Whole Foods, touch the price tags, those are all done on TerraSlate. There are a couple of other cool things as well. We do maps and nautical charts for the military. We work with all four branches of the military as well as the Coast Guard. We’ve been having a good time with it. A customer called me and asked how does TerraSlate react to Plutonium 236 or whatever the isotope was. I said, “I have no idea. I don’t have any way to test that, but I’d be happy to put some samples in the mail. That way you can test it and let me know how it works.” I’m very excited to hear how that works if that works at all.

People hearing about TerraSlate paper, that you developed, and they’re asking, “How in the world did you think of this?” What drove you down this path? You’re a bit of a serial entrepreneur.

This is my third company. The first one I made a successful exit from. I bought myself a sports car and I bought my wife a house. The second one, I failed on. The third one is TerraSlate. We’re hoping that we can win on two out of three.

TerraSlate has been around for how long?

Five years.

Can you go back to the genesis of the idea and how you went from the genesis of the idea to product development? Did you have a market in mind or were you going to develop a product and find a market?

I came at it, opposite of that, but maybe in a traditional sense where I identified a problem and I tried to solve that. That problem was students traveling internationally have a bad habit of losing their passports. My friends that studied abroad in college all lost their passports and then it was a big problem to get to an embassy and prove their identity because they didn’t have any documentation to prove their identity and then get them back home. My thought was I would create a backup version of a passport that would allow you to take it with you when you’re out adventuring or hiking in the jungle or scuba diving and you could leave your real passport at the hotel or in the dorm room safe. In order for it to be useful and better than a sheet of copy paper, the paper itself needed to be waterproof, rip-proof and durable.

It was a good product. One of the coolest things about it was if you lost your real passport, you could take this to the embassy and they could then immediately issue you a new physical passport that you could then get home with or go onto your next country. The great thing about it was I sold at least two or three a week. It didn’t take me long to realize that I had invested a significant amount of money in the research and development to make this paper. By selling two or three a week at $12 a piece would never recoup that investment. That was the head-scratching moment where I thought, “What am I going to do with this?” Funny enough, a guy called out of the blue and he said, “Kyle, I love your product. I’ve bought one for all three of my daughters. I think it’s great, but can I buy a case of this paper?” I said, “Yes, definitely.” As a matter of fact, it’s two-for-one Tuesdays. I’ve got a whole basement full of this stuff that I can’t get rid of.

He bought a case and I forgot to ask him, “What are you doing with this? What are you going to use it for?” I didn’t ask any of the questions that I should have. I didn’t even get his phone number because I was so excited. I had to put my own phone number on the FedEx label because I didn’t get his phone number. I had this system of Google voice ring through transfer so I could have a business line that would ring to my cell phone, but the problem was I couldn’t see his phone number when he called in. A couple of weeks later, I got both his email and his phone number. I asked him, “What are you using this for?” He said, “I’m an oil and gas guy. I do the exploration.” He maintains the rigs, the pumps, and what have you out in the field.

What he said was his regular paper gets soaked by the rain, oil gets on it from people’s fingers, it smudges, and it renders itself useless pretty fast. His company had tried laminating but it’s not possible to write on lamination. They’re in this weird space and all of a sudden, he figured out that TerraSlate would work well. He could print it through his own printers. The operators in the field could use a regular ballpoint pen, fill out their maintenance logs and charts, and they could leave the sheet with the rig. It wouldn’t matter if it could get rained on for 100 days in a row. Oil greasy fingers didn’t make any difference. That was the “a-ha” moment that this material is not just for this one purpose, which was the backup passport. There might be a whole array of industries that I can approach with this.

Were you married at the time?

I was not married, but I was dating Ashley, who is my wife now.

What was the dialogue like when she’d come over and you’d have a basement full of paper?

She is one of the most understanding and supportive women in the world. I took over the basement almost immediately. We have an office in the house. I took that over and then I took over the dining room. The second I had one thing moving towards the kitchen and the family room, it was like, “You need to get an office.” The living room was the borderline. I got one box of paper over that line and then got an office.

It’s interesting when you were talking about the various uses. I guess the thing I always try to find is if there’s a pain point that somebody has before they find your product. They find your product and then you get some interaction with them after they use it and it’s solving their problem. Let’s talk about what’s the most exciting market that you’re working in?

The most exciting market is always the military. We get these fun emails and they come from a Captain, a General or what have you and it starts with “unclassified.” It has a very official sounding email body and then a very official signature. Those are the most fun because sometimes they tell us what they’re using it for. Sometimes they ask us a million and one questions and then we don’t get to find out. What’s cool is we’ve got our paper in submarines for the US Navy. It’s in all sorts of ships. We’ve got it in military aircraft. We do a lot of work with the Air Force Academy. Sometimes we do the printing. Sometimes when it’s classified, we shipped them the paper and they do the printing themselves.

We did an implementation where they asked us how to print. The good news was it was about three bullet points long. The guy that I was working with was a nice guy. It was to the effect of you open the box, you put it in the printer and click print. He still teases me that it is the best and easiest implementation he’s ever done because there’s no technology to fail. It doesn’t have anything electronic. It doesn’t matter if it gets wet. You put it in the printer and it works. One of the coolest things we do besides work for the military is we secure documents.

I will give you an example that’s not one of our clients. I’m not allowed to disclose that but I can give you an example that would be a similar use. For instance, Coca-Cola doesn’t keep their recipe on a computer because that can be hacked from anywhere in the world. What they did is print it on an actual piece of paper and it’s kept safe because you cannot hack a piece of paper. It’s the most secure form of communication that there is. It’s not possible to get it from anywhere else. You have to physically come and get it.

That’s like capturing the typewriter ribbon, which used to be the game.

You’re an intelligence guy so you know that exactly and you can handwrite it. People say, “At some point, you have to type it and then you have to print it.” It’s not true at all. You can write on it with a pen. We’re in the midst of developing with a nanotechnology company these micro-particulates. What they are is these little hexagonal pieces that we can make them in any shape. What we do is put your logo on it or we will put somebody’s initials. If I was going to make one for you, I could put BR or WR on these nanoparticles. A human hair is 100 nanoparticles wide. I’m going to butcher the science here but I’m the business guy so hopefully, that’s okay.

These particles are roughly 40 nanometers wide which is less than half the width of a hair. We can mix them in the paper when we make it. Here’s why that’s cool. If you had “WR” nano particles in your paper, you could print anything you want on it and you could give it to somebody else. With a magnifying glass, they could find these little specks here and there on the paper. They would be able to see the shape and they would be able to see that it says WR, the name of your business, your logo or whatever it is. To the regular person, they wouldn’t see it at all. It would look like a speck. It won’t photocopy, you can’t photograph it and you can’t lift it out of the paper. It makes it virtually impossible to counterfeit a document. We’re going to do all kinds of things with deeds, certain types of contracts, banking documents, as well as military applications.

I think about it as you could solve a problem which is what you’re doing. I think back to the part of the original story. You’re two out of three successes and one not so much. On the not so much success story, how much of that played into TerraSlate success?

I hear regularly that you learn more from mistakes than you do from success. In entrepreneurship, it’s magnified to the ‘nth degree. Your education comes from failing, not from succeeding. When you succeed, you think you have a hot hand. It’s like being on the basketball court in the NBA finals and you make a couple of shots that maybe wouldn’t be high percentage shots. All of a sudden, you feel like you’ve got a hot hand. That basket is about as big as a truck. You can throw it from anywhere and it will go in. The hard part is recognizing that it’s not true. You don’t have a hot hand in entrepreneurship. That’s not a thing. You can be good, but the problem is that success makes you think you’re better than you are. Failure is what will cut your knees out quickly. It will teach you all the things that you would miss if you just thought you were hot and you could touch anything and make it work.

A couple of the key learnings are in the transportation industry. I created a company called Teslyne. We used Tesla SUVs to compete with Uber and Lyft directly. We had an app. It was Colorado-based. You could go from anywhere in Colorado to anywhere in Colorado because that’s where our luxury limousine license had permitted us to be. What I learned is you don’t want to run a business that operates 24 hours a day. I learned a huge amount about hiring and staffing because to keep a small fleet of vehicles on the road 24 hours a day, you need to staff four drivers per car. Every time you buy another car, and Tesla’s are not inexpensive, you’ve got to have four more drivers and then they turn over because it’s an easy job to do, and easy to leave. We had high standards so they went through a training process, but then they would take this experience and move to Cincinnati or whatever.

The single most valuable thing I learned out of starting Teslyne was how to hire good people and how to figure out that they’re not good right away and then you have to move on. Nobody likes to fire people. The emphasis is always on making a good hire. Are you able to say, “I am in crisis, I am going to drive all of these cars myself,” or “I’m going to get some more people?” That’s still not a reason to get a bad hire. A bad hire will do worse things for your company than you staying up all night and driving all the rides or what have you, obviously within the legal limit of a number of hours you can drive and be safe. Still, a good hire is not only good for the business, but he or she becomes a good example for all of the other employees that you have. If you can create that culture of hard work and customer-service facing, it spreads. It works in reverse if you have a bad employee that can spread too. Hiring was something I did more of than I’d ever done in my life and that was the biggest take-away from Teslyne.

Do you have a lot of employees with TerraSlate?

We have fourteen people here in Denver that do the printing and production. In addition to that, we have three manufacturing facilities around the country. One is in Houston where I’m headed to today. One is in New Jersey and then one in Wisconsin. Those are large scale plants. What’s wonderful is that with traditional paper companies, their business is declining at 9% a year. These mills, which have been around for 100 years, have very little business. A few years ago, it was hard for us to get mill time. Now they compete for our business. We help keep the mills open because our business is up into the right as fast as we can go. We ship things directly from there and then we do ship things from Denver if it’s printed materials. We have a pretty big staff that manages and operates those mills, but they work on a contract basis.

From my personal interest, if I have a document that I want to destroy and it’s on TerraSlate paper, what does the destruction process looks like?

TerraSlate can be put in any paper shredder. You can cut it with scissors, you can punch holes in it. It doesn’t burn well, but you can burn it if you hold a flame to it long enough. We don’t recommend that though because we don’t like to put carcinogens in the atmosphere. It goes against our whole sustainability premise and not cutting down trees. Any paper shredder, even a standard office one, will do it. Military grade shredders work as well. They take a piece of paper and they turn it into dust. You can’t glue that back together, you get the diamond cut and it works great.

As I think about the contrast, you were talking about all the people you’re trying to hire for Teslyne and then you look at the rapid growth of your company. What are the chief challenges on a rapidly growing company that you’re facing?

One of the hardest things about growth is being able to create systems that are scalable.

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One of the things that people love to say to me and it makes me cringe every time is, “That’s a good problem to have.” It’s like, “You’re growing so fast, it’s a problem.” What they are dismissing and not realizing is that doesn’t mean it’s not still a problem. One of the hardest things about growth is being able to create systems that are scalable. We’re going to print X amount now, but tomorrow we’re going to print 10x that. How do you get the people trained up to run the equipment? You’ve got to get the equipment delivered and half of it comes from Japan. It’s got to come over on a ship and it’s got to be custom-installed. You’ve got to call the power company because we need yet again to upgrade the power line. Not just inside the building. We have to upgrade the wire that goes all the way down the street from the hub.

It’s phenomenally expensive to do that. Every time we get another piece of equipment, we’ve got to up the power. There are a lot of processes to go through to do that. Whole Foods called us and I had been working with them for three years to put this deal together. The deal would die and then would come back and die again. Finally they said, “Here’s the green light. We need this right now.” We ran 24 hours a day to get the material to them. We did not have the capacity to do that because we were already running at capacity in the process of adding more. All of a sudden, then we had to add 2x capacity overnight. You figure out how to run three shifts a day. A lot of that is me staying at the facility and running the equipment during the shifts.

You learn how to do maintenance, don’t you?

Yeah, and we have maintenance techs at our facility all the time. We have dedicated parking spots for them. What’s