The Inside Story of Synthesis: Lessons of a Pioneering Legal Psilocybin Retreat

Podcast Highlights

• The closure of Synthesis: an overview
• Synthesis’ growth period and pivoting during COVID
• Transition to a stewardship model
• Challenges with the company’s training and retreat programs
• The impacts of financial markets
• Introduction to Confluence Retreats

Show Links

1. Confluence Retreats Website - Full Program Details & More
2. Confluence Retreats & Third Wave - Ambassador Program
3. Confluence Retreats on Facebook
4. Confluence on Third Wave’s Directory
5. ACER Integration
6. Episode 223, “Healing the Earth, Healing the Self: Psychedelics as Catalysts for Planetary Wellbeing” with Rosalind Watts, Ph.D.

These show links may contain affiliate links. Third Wave receives a small percentage of the product price if you purchase through the above affiliate links.

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Podcast Transcript

0:00:00.2 Paul F. Austin: Hey listeners and welcome back to The Psychedelic Podcast by Third Wave, connecting you to the leaders and pioneers of the psychedelic renaissance. This is your host, Paul F. Austin, and today I'm speaking with Myles Katz, the founder and executive director of Confluence Retreats.

0:00:16.0 Myles Katz: We still meet people all the time that talk about how Synthesis was a bit of an inspiration to come out of the closet, to see how this work could be done legally and publicly. Also, I think there's some good lessons and insights that we had that are valuable to other entrepreneurs. If we can help people shape their journey to be a little bit more directive and intentional, that's a big win for me.

0:00:41.9 Paul F. Austin: Welcome to the Psychedelic Podcast by Third Wave. Audio mycelium, connecting you to the luminaries and thought leaders of the psychedelic renaissance. We bring you illuminating conversations with scientists, therapists, entrepreneurs, coaches, doctors, and shamanic practitioners, exploring how we can best use psychedelic medicine to accelerate personal healing, peak performance, and collective transformation.

0:01:12.9 Paul F. Austin: Hey listeners, this is Paul F. Austin, founder and CEO at Third Wave, and welcome back to The Psychedelic Podcast. Today we have a special episode that delves into the ebbs and flows, and partly what's going on behind the scenes of the psychedelic ecosystem. Joining me is Myles Katz, a former co-founder of Synthesis alongside myself and Martijn, and is the current founder and executive director of Confluence. And we're gonna dive deep into the rise and fall of Synthesis. The gold standard psilocybin retreat center that I helped to co-found in 2018. Now, Myles' professional journey has spanned three continents over the last decade. During this time, he has launched and led five VC or impact funded startups dedicated to technological innovation, social responsibility, and environmental sustainability. Specializing in early stage business strategy, Myles has successfully raised nearly $20 million for various cutting edge business models. As a co-founder and the director of biz dev at the Synthesis Institute, Myles spearheaded the development of one of the world's first legal psychedelic service models.

0:02:20.5 Paul F. Austin: This groundbreaking initiative supported over 1000 individuals until its closure in 2023. Its contributions in Oregon have also included roles in the state's landmark psilocybin legalization efforts, serving with the Oregon Psilocybin Training Alliance, and on various rural advisory committees for the Oregon Health Authority. Currently, Myles is leading the development of Confluence Retreats, a project under the Hi-U Foundation. This initiative seeks to integrate nature-based multi-day psilocybin retreat experiences into Oregon's innovative legal framework, collaborating with indigenous communities to restore ancient healing practices to the Cascade-Siskiyou National Monument. So, Myles and I first met in, I believe September, 2017. I was living in Bed-Stuy at the time in New York, and we met at this trendy little cafe. I still remember the meeting. It was sort of in a back greenhouse area at the end of a long table. Myles had reached out over email because he was on our email list for Third Wave at that point in time.

0:03:20.0 Paul F. Austin: We had a good chat, and then soon after that, I attended a conference in Germany, South by Southwest, where I met up with the other co-founder Martijn. And by early 2018, us three were beginning to start Synthesis. So in this conversation, Myles shares the challenges and lessons learned from the growth and then eventual bankruptcy of Synthesis from investment decisions, to navigating the turbulent waters At the psychedelic ecosystem. We'll explore how external factors like specifically the COVID-19 pandemic influenced the Synthesis journey and how it eventually and why it eventually filed for bankruptcy just over a year ago in February, 2023. But it's not all about setbacks. We'll also discuss the importance of conscious capitalism and how Synthesis aimed to create a regenerative and impact-focused business model in the psychedelic space. And then finally, we'll hear about Myles's new project.

0:04:17.0 Paul F. Austin: Confluence Retreats, a nonprofit psychedelic retreat center in the forests of Oregon. I think this is an interesting conversation. Obviously, Synthesis was a important project of mine for a full year I dedicated, or even a year and a half. There's a lot of time and energy and effort that went into it. It was amazing to see how successful it became, and equally so quite heart wrenching to see its demise and bankruptcy. Some important lessons learned. We go deep into that. I think you all will really enjoy this conversation. But before we get into it, just a quick reminder to follow The Psychedelic Podcast wherever you're listening, or subscribe to our channel on YouTube. And you can also connect on our free community platform at community.thethirdwave.co. That's community.thethirdwave.co. Alright, without further ado, let's get into it with Myles Katz. So Myles, welcome to the show. It's good to have you.

0:05:09.3 Myles Katz: Yeah, thanks Paul. It's good to be here. It felt right to come to you to do some of the first, yeah, coming out about Synthesis after a very chaotic closure about a year ago.

0:05:23.4 Paul F. Austin: Right. So let's start there. Like just kind give us your version of what happened, what went down. I think just starting with that understanding would be useful. Like what were some of the events about a year ago that started to transpire and manifest? And then I'd love to get a little bit into like the origin of Synthesis and what its intention was and the lessons you learned along the way. So, just for context for our listeners, what's been going on the last year, two years?

0:05:57.4 Myles Katz: Yeah, so I mean, Synthesis was a very well known fully legal psilocybin retreat based out of Amsterdam. And with the help of like really great timing, and venture capital, we were able to grow, navigate through COVID and even get to a point of trying to reopen our doors. So I'm sure there's a lot of that that we'll get into. And the simplest of what happened is the company ran out of money at the, about a year ago, the beginning of 2023. And I think it was very sudden for everyone who wasn't intimately involved in the inside, even for a lot of our team members. And that really speaks to the tension of the influence of capital and pressure to grow and navigating a incredibly wild west new market like that of legal psychedelics. And yeah, so I felt like there is, there's some things I'd love to chat more about and share about that journey both good and bad.

0:07:10.3 Myles Katz: We still meet people all the time that talk about how Synthesis was a bit of an inspiration to come out of the closet to see how this work could be done legally and publicly. And also, I think there's some good lessons and insights that we had that are valuable to other entrepreneurs. I mean, I've been living here in Oregon for the last couple of years. It's the first regulated access model for psilocybin anywhere in the world. And just seeing everyone starting from ground zero with all the passion and energy and excitement and personal experience, but a lot less of the kind of business experience. And if we can help people shape their journey to be a little bit more directive and intentional, that's a big win for me.

0:08:00.3 Paul F. Austin: Okay. So, we started Synthesis 2017 is when I met Martijn. Martijn and I were going to a bunch of tech and business conferences. We went to one in particular with a German friend of mine, Nico, I don't know if you ever met Nico, but Nico was the one who came up with the Third Wave. I was doing acid with Nico in Budapest and him and I, so him, Martijn and I are at the South by Southwest conference in Frankfurt, talking to Mercedes-Benz people in Daimler and it was just after Stealing Fire came out, so there was some hubbub about stealing fire and flow and all that. And I remember Martijn and I were like, it would be great to do a retreat for these types of folks, people who would attend a South by Southwest both corp, kind of a corporate, but also creative background and perspective and focus on wellness and focus on total legal and focus on high end.

0:08:53.6 Paul F. Austin: And soon after that, him and I ended up in Zurich and we started to enroll people. And by this point in time, we had been exchanging emails. You had been looped in, we had been working on it for two months or so in the background. I remember there was one point right before we launched where I had just done like a crazy flight to Singapore and I think I slept in or I missed the call and it was this like, we were like just on the verge of getting it out. I remember feeling awful about that. There was some tension there, but we got it out and we sold out the first, basically the first eight cohorts were completely sold out. I think that continued after I left at the end of 2018. But like you said, we caught a great wave of momentum and it was right after Michael Pollan's book came out, and we didn't get into over our, I think what we did the best job of initially was just assessment and weaning out and keeping the price point high and finding really beautiful venues and then we found the lighthouse. And let's talk a little bit about 2019. What went down in 2019? How did Synthesis grow in 2019? What was happening at that point in time?

0:10:12.3 Myles Katz: Yeah, so coming out of those pilots in 2018, mid-2018 right around the time Michael Pollan's book came out, I don't know if you remember my memory, Paul, is that we actually had planned to start the business full-time about six months in the future. But because of all the interest, which I credit mostly to people reading Michael Pollan's book and coming on the internet and finding us, we accelerated that quite a bit. So by the end of 2018, we had a full-time lease on a venue, which was truly one of a kind polished concrete, converted church could host 16 clients plus staff. And raised our first investment, and we were really starting to solidify this as a full-time business. And I think, pretty pretty soon after that into 2019, we were hitting a lot of the tensions of the difference of not just the operations of doing this as a project based approach where we have a set of dates in the future, we do those dates, then we plan the next dates.

0:11:18.6 Myles Katz: But really the kind of mechanics of a full-time operation with different layers of team members in different roles full time, having to pay for salaries. And moving from like, yeah, as much as we were getting a lot more interest, we started to move down in fill rate quite a bit pretty soon, but the wheels had already started turning. So by I think at the end of first quarter 2019, we were already about a half million dollars of capital raise for the business. And so that point, you have a full-time lease, you have capital raise, like you are just working full out full-time to fill those retreat programs. And we really, I'd say like that was for me as like part of the leadership and operations of 2019. It was about getting from like a 50 to 60% fill rate about one to two weeks before the retreat up until where we ended up before COVID, which was fully booked three months in advance for every retreat.

0:12:27.4 Myles Katz: And that was where I think Synthesis really resolved. Yeah, we had a lot of great help from outside support. And we, I think that's where we like really started to see this as a bigger picture vision of, multiple centers around the world. Like, we had a model that had been iterated on through about 50 group retreats. We had a great staff of lead facilitators holding the integrity accountability for client experience even when the administrative parts were rocky and new startup and chaotic and yeah, and it was intoxicating to be honest. I mean, for all of us who were there for that journey, probably like a core 15 to 20, like it really cemented in some really magical moments of how it felt to be delivering these experiences and getting great feedback and getting paid full-time to do that. And then COVID came like all of a sudden, and that's like the end of the very first phase of Synthesis, I would say. Like, well, we had the founding project and then like the first phase of the full-time operation and abruptly coming to a close with with COVID.

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0:15:39.0 Paul F. Austin: So we've hit an intermission, everyone. You can go get a snack. At this intermission there were a lot of surprises. We had been having some conversations, you, myself and Martijn, some conversations leading up to that point. The business was going quite well. There was very healthy investor appetite in what was occurring. Your fill rate as you mentioned, you were booked out three months in advance. The brand was known as the gold standard. I would hear about it all the time. It was fantastic. And then COVID hit and basically everything was canceled for two years.

0:16:21.6 Myles Katz: Yeah, it was probably a bit more than two years till we could really reopen. I think like a really big part of the untold story of Synthesis, which is just like the nature of being a small private company, not everything gets known is, it is to me, like one of the biggest strokes of luck on that journey is that we closed an investment round in February of 2020 and without the money from that investment round, literally closing weeks before COVID, I would assume we would've shut down. Like there was no amount of skillful... Now, I think we did all the right things, like we navigated customer expectations, holding deposits, refunding when we had to yada yada. Like, and just, you guys, maybe not like in the memory of COVID was like maybe different than how it actually was, which was like I had to reread some of my journal entries to be present with this, but like every three to six months it was like, what's the next thing?

0:17:25.2 Myles Katz: When is it gonna be allowed? And even as we got through '21 into '22, we started to hit bumps with European rules for COVID versus American rules for COVID and travel and vaccination rules. And so, yeah, so two things that really, the untold story of how Synthesis survived COVID was that investment round closed. So we had some capital in the bank to navigate that and the Dutch government had a very generous COVID relief policy where as long as you did not fire your employees, they would pay 90% of your full-time employees wage so you can keep them. So this is like a Dutch social program for all companies. I used to joke that we were probably the only psychedelic company in the world that got COVID relief funding, but we were able.

0:18:22.5 Paul F. Austin: Interesting.

0:18:23.3 Myles Katz: Yeah, we were able to maintain our team, keep them on payroll. We did a lot of skillful navigating of that relief is not available for contractors. So we had the team all consent to splitting the benefits between contractors and employees 'cause for a lot of that it was just kind of semantics of like who was a contractor, who was full-time at that stage of the company's growth. So we really bonded together as a team to do that. And we were led by our CEO Rachel to lean into the training opportunity and really leveraging our experience as one of the first legal above ground centers to build a very comprehensive training program. And that was how we took advantage of the opportunity we had to create a business that didn't just sit around and wait for two years till we could have retreats again.

0:19:18.7 Paul F. Austin: Yeah. So the pivot was reasonably quick. You launched a new practitioner training program. I think you sold it out pretty well.

0:19:23.8 Myles Katz: By the end of 2020.

0:19:25.6 Paul F. Austin: By the end of 2020.

0:19:27.2 Myles Katz: Yeah. We launched our first cohort of 60 by the end of 2020 and that was kind of our proof of concept. It went well, and we started working on, as we ran that cohort, we started working on future plans. And then in the middle of 2021, we're servicing the cohort, still waiting for COVID, anything to open up again. It really felt like every three to six months, we were restarting the retreat's wheels again. And then in the middle of 2021, we raised a $5 million Series A round. And this was, I think this is also something that goes underappreciated in the journey of not just us, but everybody in the psychedelic movement is, this is during the time where all those Canadian companies were going public on the Canadian exchanges. This is really like the time during COVID when the stock market was booming.

0:20:30.1 Myles Katz: Everybody and their mothers was getting into psychedelics and starting psychedelic companies. And we were also beneficiaries of that momentum in the market, where a company who's primarily doing in-person group retreats was able to raise a $5 million Series A investment round in the middle of COVID, based on the enthusiasm and the excitement about what would happen in the future in psychedelics.

0:20:58.3 Paul F. Austin: So let's go deeper then into that aspect and element, because over the years of Synthesis, there was a lot of discussion and conversation about stewardship models, about the sort of ethos of conscious capital. These are early conversations we had. I remember many of them, and I was myself quite keen on in 2016, 2017, looking at teal organizations. Exploring how integral theory might apply, how spiral dynamics might apply, there's just a whole bunch of shit you can go into philosophical which will save people the hassle of. But there was a sense of how do we build this stewarding regenerative model for psilocybin retreats where everyone gets a share in the win and we're about healing, we're about wellness, we raise some money, we have to definitely have the capital necessary, but the goal isn't necessarily just the biggest multiple and shareholder value that we can get.

0:22:04.2 Paul F. Austin: The goal might be something that's much less financially abstract in that way. So what, yeah, tell me about your perspective on what led us, what led, sorry, what led Synthesis specifically down that journey and that path and how did the theory of it differ from the reality of it? That's what I'm most interested in.

0:22:25.4 Myles Katz: Yeah. That's a good frame.

0:22:25.5 Paul F. Austin: 'Cause I can speak as well from my experience in psychedelics. The theory is the map's different than the territory, you know?

0:22:33.5 Myles Katz: Yeah. And just not to go too deep into it, but I also came into the project with a very similar ethos. I had been living in East Africa working for six or seven years on a for-profit business whose primary objective... It was funded by philanthropists, even though it was a for-profit business, and it was primarily creating income for some of the poorest farmers in the world. So I was very much coming in like, for-profit business with social agenda, like, let's do this. And I think also just people doing their own work with psychedelics, it's pretty easy to relate to those concepts and feelings. And I'd say in the beginning, as much as we talked about it, and I'd say just to be clear, all our investors for the entire journey of Synthesis had some version of this in their intention in investing in Synthesis. So nothing bad to say.

0:23:31.3 Myles Katz: I feel grateful in my career, including Synthesis, I've probably worked with the most generous investors there are. But there's also, at the same time, a nature of how our society and our system of capitalism operates that's very hard to go against the grain. So despite having that intention starting Synthesis that this is an impact-focused business, that's the terminology I use just to oversimplify, we hadn't really done anything to cement that. And there has been these growing movements in different industries and fields of what are some legal structure approaches that you can kind of cement some of these values and principles in. And it was during COVID that we started, we saw like the juxtaposition of like what we were trying to do, which was have a high integrity, values-driven, for-profit organization in psychedelics.

0:24:28.8 Myles Katz: And then we saw, what we largely from the outside observed as like this gold rush or shroom boom, where I think it was close to 20 companies in a one-year period went public on the Canadian stock exchanges on the premise that they would have a business model one day. That's really how I understood it. It's a little judgmental, but just to oversimplify for the discussion. And so that really was showing us a mirror of what could we do to really be different than that, besides just feeling and wanting to be different. And so we were introduced by a close colleague named Bennet Zelner, who is a psychedelic economist. He talks about pollinator models and regeneration and ecosystems to a principle called steward ownership, where there's two main driving principles of steward ownership.

0:25:29.9 Myles Katz: The first is that the people who are... I'm gonna stop for a second to make sure I get this right. The people who are making the decisions for the business need to be the people who are running the business, the stewards. So in a traditional model, shareholders and investors buy pieces of companies and then they get to vote for their percentage. So an investor invests a million dollars, the companies' worth $10 million, that investor gets the right to vote for 10% of the company's decisions. A gross oversimplification. But that's like generally how it works. And in the stewardship model, what it says is you don't get to control the company just because you gave the company money, the people making the decisions for the company need to be the people actually working in and running the company. So that would be the founders, the employees, the people who actually have a connection to the work. And we still honor the capital.

0:26:37.5 Paul F. Austin: Like a co-op.

0:26:39.5 Myles Katz: Yeah. More like a co-op. Yeah. There's no one exact legal structure for stewardship. There's a bunch of different models, including co-ops where you can implement them. But, yeah. And we still honor the capital and we can make agreements for how that capital can get a return on its investment but the intention is largely to keep the decision making for the work inside the work.

0:27:02.6 Paul F. Austin: Okay. So let's go into that. Like one of the nuts and bolts of how that actually gets set up within an organization 'cause this is what I've thought about a lot too and it's...

0:27:10.3 Myles Katz: Yeah. So what it really looks like is you have, for a startup that's not financially sustainable yet, which it's much harder to do these structures in startups compared to like, you know, the models more commonly used for legacy businesses that are transitioning out of family ownership and they want like their legacy to be indefinite and they transition to a more employee ownership, but they're already profitable. They already know their markets. They're already, you know, it's a lot more complicated in a startup where you're trying to figure out all those things and you wanna have those principles. But what it really looked like for us is, that $5 million investment round in 2021 was raised on these principles of steward ownership and what it means in practice is that investors do not get the preferential right of voting and decision making that they normally get. And they handed over those traditional rights of voting and decision making for the company to the founders and ultimately to the stewards because they were also resonating that these principles felt important for a business in this ecosystem to try to make a statement about doing business well.

0:28:24.3 Paul F. Austin: So you raise... Okay. So Myles let's go through this, let's go through this. You raised $5 million. If anyone at home is listening to this as well by the way Myles just raised his I Love LSD cup. We're on video. Most people listen to this on audio but a few might see the video. Drinking his I Love LSD cup probably microdosing, just kidding. So you raise $5 million as a series A, I hear that number and I'm like fuck man, if I had raised $5 million we'd be, I mean, we'd be coasting, we'd be great. And so people hear that and they go, A, you already explained the context as to how a retreat center that had pivoted into a practitioner training program managed to raise $5 million in COVID, all that sort of context. So we have that context. But beyond that, then what bets are you making with that $5 million and what... Why were those bets maybe not great bets that led to bankruptcy?

0:29:29.4 Myles Katz: Yeah. So there's a lot to share about all this, obviously. I think first, I'd like to name that part of the transition to stewardship was also an intention to get out of the cycle of continuous capital raising, which is easier said than done often. But in a traditional venture capital model, even though we had all these intentions and good feelings, like fundamentally until that point, we were in a conventional venture capital model. And especially when you're so early in a new market, like a normal venture capital return is three to five years. And the psychedelic market still today, five years after Synthesis started, six years, it's probably five to 10 years still. So we were super early in a super nascent market. So just naming all those factors because we really were stuck in this wheel of like, we want to do the work so well with such high integrity.

0:30:38.4 Myles Katz: But that requires money and we need money to do that. And we want people to be paid well. And we don't want facilitators who are go working second jobs to pay their bills, right? You wanna pay people what they deserve. And so building it up this way, ultimately you have a very high cost business with not a lot of revenue opportunities, 'cause everywhere you're trying to generate revenue, you're bouncing up against what's legal and what's not legal. And so the practitioner training was one of the... Was probably the way that we saw the possibility to become financially sustainable. That did not have any restrictions of physical place like the retreats did. It didn't have to worry about legalities like the retreats did. And generally, a training program model has more space for profit, and in our case, profit to feed the company than a high-cost in-person service business does.

0:31:37.0 Myles Katz: So again, online training has more space for that. So we had already at this point started our training program and we took that first training program cohort as it was a live education but the sessions were recorded. We had a lot of really highly skilled people working on professional content development, video editing, online learning platform development. So we were really investing in all that, getting ready for the next cohort. And that's really where we put our eggs in the, you know, I don't use the word bets, 'cause bets implies gambling. So the biggest investment really in that training program, probably a few million dollars over the course of 2021 and 2022 to get that going. You know, some of the investments that didn't pan out, which are also fine and easy to talk about.

0:32:31.2 Myles Katz: Is I'd say there was one project where we were building a therapy program. We kind of got different legal advice at different times from our Dutch council, that the law that was available to use psilocybin-containing truffles in the Netherlands would give us space to do like a therapy, therapeutic program. This was working with Dr. Ros Watts, who's still a friend. She developed a great program. But as we got closer and closer to releasing that program publicly, we started to just get more in the weeds of what legally that might mean. And the tough thing about working in the Netherlands, and one reason why I love Oregon so much is in the Netherlands, there is legal access to truffles, but it's essentially a loophole. It's a food law. There's no regulation on the growing.

0:33:21.7 Myles Katz: We don't know how much psilocybin content's in the truffles. And most people operate in the space of we don't wanna push the boundaries 'cause we don't want the government to get involved. So we're not gonna do anything too risky. And so what's great for some level of experimentation and setting up a fundamental model, you start to hit the walls of how far you can take that 'cause you can't actually say that the truffles are good for depression or addiction because in Dutch law, that classifies medical treatment and then you fall under medical law, which truffles aren't allowed for. So that program investment was a big one that didn't pan out. It was 12 months we ran a cohort of I think it was a dozen people or so.

0:34:07.1 Myles Katz: They went through this program and I'm really glad to see that from what I understand the fundamentals of that program lived on to Ros Watts' current project, ACER Integration, but it didn't pan out commercially for Synthesis to run that program. And it didn't help that we were also still deeply in COVID and bringing people for in-person components of that program, essentially never worked. You know, some other investments that come to mind that didn't pan out. I mean, just a whole world of stuff related to running retreats. You know, when we closed in COVID for 2020, we were primarily running three-day programs with one journey. So they were essentially long weekend programs. And we had started to experiment with five-day programs with two journeys.

0:34:57.8 Myles Katz: By the time we opened up post-COVID, which was like multiple slow openings over 2022, we had a very comprehensive five-day program with two journeys that was double the price of the previous programs that we had run. Again, in that mindset of like, we're gonna be financially sustainable, and this is the price we need to charge to get to that within reason. And it was just a lot harder to find clients for that program and it was... And also we're two years later, so places like Jamaica and Costa Rica and like other, there was more competition too, which I don't know if we ever really got to quantify so much, but no longer did people feel like they had to come all the way across the Atlantic to Amsterdam when people were doing similar types of programs also to high degrees of professionalism in other parts of the world all of a sudden.

0:35:55.2 Paul F. Austin: Yeah, it's been interesting to witness the decentralization of the retreat ecosystem. A lot of people do underground work. A lot of the practitioners we train work in small groups, small retreats. They don't really promote them publicly a lot. It'd be interesting to do research on what's the percentage basis. Again, with Synthesis, the timing was fantastic and the quality of the facilitation was super high and as the market flooded with more and more competitors, this is also happening in practitioner training programs at this point in time. You kind of, at that point it's like you figure out what you really need to stick with and uh what might get discarded, so.

0:36:34.5 Myles Katz: Yeah. Yeah. And so with that capital round in 2021, with all capital rounds, like bigger expectations, bigger goals, like you build the team out to try to reach those goals. Sometimes you reach them, sometimes you don't. And we started to hit that edge probably about a year later. So like somewhere in the middle of '22, we started hitting this edge where like we had doubled the leadership team, brought in some amazing people. But our revenue wasn't coming back the way we had hoped, partially because COVID didn't let us run retreats still at that point in time, partially because the first training program we came to market with was a $20,000 very intensive program that included in-person components.

0:37:27.0 Myles Katz: What really, I'd say, shifted things pretty significantly for the whole organization, was the decision to break that program up into two parts and do a digital-only version of that training, way more accessible to way more people, and then have an add-on component to that training, which would be the in-person component. And it didn't have to be married and paid for all at once. It could be split up. And so quarter three, 2022, we had the most amazing sales quarter, like about $3 million of training program sales happened in that quarter alone. And that was mostly 'cause of that split to make it digital only. And COVID was starting to finally end after two years. So we're starting to see the light.

0:38:20.0 Myles Katz: So we're planning more retreats, we're getting venue leases back in place, and yeah. We were feeling pretty good. Even going towards the end of, I'd say, into the winter we were starting to... We had this moment of celebrating, right? Like, "What a great sales quarter. We see financial viability on the horizon." And then we just hit some harsh realities of how difficult it was to enroll people in those expensive retreat programs in this new world where there's lots of other comparable programs closer to where people were traveling from. And the lack of replicability in that sales cycle for the training programs where we enrolled, I think it was close to 200 people in that cycle. It's not something that was replicable every single launch and what had to go into those launches to do that.

0:39:19.8 Myles Katz: And so it was really the winter of 2022 after a long time of really trying to solve it ourselves but having tensions between the two business models where like having to staff two separate organizations to make Synthesis training and retreats, and having a lot of cooperation between how people work together in the organizations, but ultimately trying to shift back to a retreat company and a training company. I just think that the ability and the bandwidth to make the decisions that had to be made to really drastically cut and reduce expenses and shift programs, we didn't have the alignment from, I'd say, our board and investors and our leadership didn't have the alignment of what needed to be done. Like, "Do we reduce just the training program business? Do we get rid of retreats in the Netherlands?"

0:40:21.1 Myles Katz: We had also acquired this venue in Oregon where I was living and taking care of that. It was supposed to be the first, one of the first, Oregon retreat centers and we were dealing with legislative issues to get the zoning approved for that property. And so, yeah. And I think something that also is less talked about but apparent, and really when you put it in juxtaposition of when we raise the money to when we couldn't raise money to save Synthesis is the health of the financial markets. In 2021 when we raised that money, $5 million, peak stock market post-COVID, the wealthiest people were getting even wealthier, crypto was skyrocketing. And again, 20-something companies went public for psychedelics at that time. Fast forward to the end of 2022, FTX had just collapsed, I think.

0:41:16.5 Myles Katz: And I only say that because I had one... Oh. I was told that one of our investors couldn't consider making investments because of how much money they lost in crypto. And it was less of a... It was... You know what? For me, that was a powerful thing to realize was like, "Oh, the money that's being invested in psychedelics right now is the same pool of capital that's being invested in crypto." So as much as there's a lot of passion and interest and heartfelt, it's play money. We're not yet at a place in the psychedelic ecosystem where these are safe, stable investments to make." And I get that. And so, yeah. So, with expansion comes contraction and we were contracting at the end of 2022. So it wasn't a good time to need money because that's when investors were also contracting of what they were willing to invest and how much. And so, yeah. I think it's just an important reality of something as entrepreneurs, we don't really think about all that much is like, how much does the health of the financial markets generally impact our ability to raise capital for our very cutting-edge innovative projects.

0:42:30.2 Paul F. Austin: Yeah. External circumstances are difficult if you're reliant upon them or there's codependency there. The way I've run things, I've always... I keep most ownership. I have one... We have one main investor now who's quite strong. An angel. And profitability I'm driving for, revenue stabilization. At some point again, I want to wanna raise more investment capital, but even you mentioned that point in time in 2021, I remember I tried to raise, I think psychedelics today as well attempted to raise, neither of us could raise really proper funding. It wasn't until the end of 2022 that I was able to raise funding, which is also coincidental, right? It's opposite a little bit.

0:43:19.5 Myles Katz: Yeah. Totally. I think it's just like... I think another... So I've been telling everyone pretty honestly, I was the jackass that brought the funding into Synthesis. I had this background, I think I was... I think until the company closed, I was the only person on the leadership team that had experience raising money before Synthesis, with the exception of our CFO who came in after our last funding round. So I can... I think as much as for the Synthesis journey, it was very complicated. A lot of moving parts. That feels like the area of the business I can take the most accountability for. And I really... I really did have a belief, which I have a lot of... I've done a lot of integrating around. It was like, more capital is better and money's a really powerful thing, I think there's a huge role it plays, it can be a force for good, but I think it's often a force for shadowy behaviors and avoiding what really needs to happen.

0:44:16.3 Myles Katz: And so I can look back at, yeah. My role in the Synthesis journey and some of the struggles we faced. And I really did have a belief for a long time that with more money, it would get us more time. We could ride it out, we could figure it out. And in hindsight, far from being fully true and maybe not partially true at all, we were building on foundations that weren't stable. And that's... When you add COVID and when you add a market that doesn't really exist and everything you try to do is at the edge of what's legal, yeah. To me, it's no surprise that it didn't work out.

0:44:55.2 Myles Katz: It was never our intention obviously, but it was a very risky endeavor and yeah. And with regard to the capital, Synthesis almost never had... I think in five years we had two months that were cashflow positive and most of them were towards the end. And so it's easy to point the finger of like, "Outside money investors ruined everything." But it also was the foundation of everything we were able to do. And as we said, it did have a really great reputation. It did get a lot of really good media attention for the movement. And so, yeah. I think it's an interesting space to be with that and honor both sides of it where there was a big role it played and also there's a big role it played in how it went about and how it came to an end quite abruptly.

0:45:44.1 Paul F. Austin: So we have five minutes, Myles. So I want to hear more... I want to hear about now what is bringing from Synthesis in Oregon. What your new project is, what you have cooking, let's get into it.

0:45:57.6 Myles Katz: Yeah. Yeah. Thanks. So largely informed by the quality of work that Synthesis did, but also the negative influences of how it felt to run a venture capital company. I started a nonprofit psychedelic retreat called Confluence. The short story of this origin is was I came to Oregon to bring Synthesis to Oregon. And I was involved in the rulemaking process. I helped establish some of the early training program requirements. So after multiple years of being here for that purpose, it was quite interesting to be on the sidelines when legal centers actually started opening because Synthesis was gone. And I slowly got involved with one of our local centers, Omnia Group, and I'm on the advisory board and started really feeling a sense of... Concern is probably a strong word, but a sense of concern about how the majority of the experiences people are having in Oregon is flying in, getting a hotel room, Ubering to their session, Ubering back and flying out the next day and having for many years helped run really high quality, very deep containers that do deep work.

0:47:14.5 Myles Katz: Just really was present with how much of people's experiences they're probably losing when they kind of go for this clinic/fast food model equivalent of psychedelic experiences. And so the rules in Oregon have made it a bit challenging, but there are ways to do multi-day immersive retreats. And so I started a nonprofit to do that. So we work with retreat centers, cabins in the woods. We have indigenous communities we work with to bring in a little bit of spirituality. And just a touch of shamanism, nothing too intense. And same elements we worked with at Synthesis. Breathwork before the journeys, lots of group and individual prep and integration work. And then we work with our partner license service centers where we're legally allowed to do the work here in Oregon to have the experiences and for the client's experience, make it a seamless multi-day, five-day program. And behind the scenes just weave a lot of things together to make it work in this new emerging legal framework.

0:48:20.6 Paul F. Austin: Beautiful. And if folks want to wanna learn more about Confluence, where should they go? You can go to our directory. There's context about Confluence in Third Wave's directory.

0:48:28.4 Myles Katz: Yep. Third Wave directory. We've got some good reviews up there now. We're going to gonna be doing a little bit of a promotion with the Third Wave for some of our summer programs, so I think that'll be in your guys email coming out soon. And then the easiest place is our website, confluenceretreats.org. And yeah. Love to just connect with anyone interested. We're keeping the groups small. Eight people groups, one group a month, all part of the lesson to integrate of how to do this work sustainably and high quality and not get lost in the mix of the psychedelic boom.

0:49:06.7 Paul F. Austin: Excellent. We need more of that. Well, Myles, thank you. Thank you for coming on. I wish we had more time. I'm having a travel day. We bumped this up an hour. I'm thankful for you making the time for that. We got 45 minutes. I imagine there will be a round two at some point in time, but I appreciate you coming on, sharing. Hopefully this didn't just read as a... Like a, I don't know. Like a sappy reminiscing of two excited, curious businesspeople, but this... Yeah. I think the lessons from Synthesis, what you've implemented now through Oregon, the role that it played, the capital that it raised, it was a... It's been a fascinating journey and overall a net positive I would say for most people.

0:49:53.5 Myles Katz: Yeah. Thanks. Yeah. I think we really strived hard to do some good work in the world and it's going to gonna be years till we see all the ways that the different people that were part of it go on to do other awesome projects and contribute to the movement. And I think it's quite a... In some ways it's quite a relief to take the pressure off of any single organization with single brand and let it be a much more natural community-based approach to bring this work to the world.

0:50:23.7 Paul F. Austin: I love that. Alright. Well, thank you Myles. It's been fun. Till next time.

0:50:26.9 Myles Katz: Yeah. Thanks Paul.

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0:50:32.0 Paul F. Austin: Hey, listeners, Paul here. I hope you enjoyed our episode today with Myles Katz. Remember to follow the link in the description to go deeper into this episode with full show notes, transcripts, and all of the links that we mentioned in this conversation. And if you want to continue the conversation with us in Third Wave's community, community.thethirdwave.com. Thank you for tuning into The Psychedelic Podcast. We'll see you next week.