Predicting Energy Markets – E99

Great to chat with Lauren Kuntz, CEO and Co-Founder at Gaiascope, Gaiascope is dedicated to maintaining planetary balance and combating climate change! We discussed forecasts on the electric grid, energy trading market, how energy efficiency is correlated with lower carbon, ways energy usage is shifting and more! 

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James

The unedited podcast transcript is below

James McWalter

Hello today we’re speaking with Lauren Kuntz Ceo and co-founder at Gaiascope welcome to podcast Lauren Kuntz brilliant to start. Could you tell us a little bit about Gaiascope.

Lauren Kuntz

Thanks so much for having me.

Lauren Kuntz

Yeah, So we’re really focused on trying to help the assets that we need for a carbon free grid so things like storage renewables demand response maximize their returns so that those projects that are more. Financeable in the future moving forward and we can help accelerate our transition to a carbon free grid.

James McWalter

And what drove and what drove that initial decision to start Gaiascope. Yeah.

Lauren Kuntz

Um, yeah, So my cofounder and I came from totally different backgrounds. But I think had really seen similar Trends Happening. So I.

And very much an academic by nature and training I did my undergrad and physics mechanical engineering my ph d in climate science and had the wonderful opportunity during my education to both take a class around decarbonization and teach classes around decarbonization. And I think in that process I learned a ton about how important the grid was and how we actually had no idea how to operate a grid without Dispatchable Fossil Fuel plants on it and that we like need to fundamentally answer that question so I was. Leaving grad school with this in mind of like this is a question I really want to work on and engage with and I met up with my co-founder Jess Stiles who is a rockstar badass in energy finance and she had been basically 10 years in energy finance everything from hedge fund to. Development deals and I’d realized that like we’re seeing this interest and shift towards renewables and decarbonized assets but nobody understood the economics of them so we kind of just really synced together on those 2 learnings and we’re like hey the way that we can help figure out how to make this grid operate is to make the economics. More transparent across different timescales. So we really focused on short term to begin with.

James McWalter

And so what does that look like in terms of like a product and I guess what the you know the early product look like and where do any pivots along the way I.

Lauren Kuntz

Yeah, so the early product we were just like hey we’re going to be a saas company and we’re going to sell price forecasts on the electric grid. The idea being if you know what price expectations are you immediately know how to make decisions right? like that’s the clearest signal you kind of can have when you’re thinking about revenue and returns. Um, really early on. We learned we had to pivot away from that because almost everybody we spoke to was like if you’re amazing at forecasting prices. Why don’t you go trade and there was a huge skepticism so we’re like okay I mean we’re like great idea. We’re gonna go trade and we’re gonna prove this works and we’re gonna like understand your pain deeply. So we pivoted kind of within that first three months of formation just from trying to be a software platform to actually running a very small trading platform. Um so we spent about two and a half years then trading ourselves building up our models having an amazing feedback loop between. Is the model working and seeing that in returns and now are really launching a product that’s focused on giving bid decisions and optimization optimization around dispatch to decarbonize assets on the grid. Um, so kind of taking that price forecasting a step further for them as well and being like look this is how you should trade. This is how you should dispatch your asset to maximize your returns.

James McWalter

And could you speak a little bit then to exactly how it works today in terms of energy trading and you know I guess where there are ah you know you you mentioned the kind of the old world of like the peaker plant-driven model and this new world. We’re kind of going in through. And how I guess the kind of current trading regime or the current trading model that most organizations who are trading. Um what they’re missing big big topic.

Lauren Kuntz

Yeah, so I mean to date a lot of them. Yeah, not a small question but we’ll start with just renewables I think to date so many renewables have been under ppas for so long that they haven’t had to worry about trading in Wholesale markets. Right? They’ve basically had 0 exposure to this and so they haven’t had to build build out trading teams in house like they’re just like we just need to make sure we produce as amazing Megawatts as Possible. We don’t care about the price because we already have somebody that guaranteed a price for us. Um, and now you’re seeing the ppa value start to Fall. Um, so it’s not quite as valuable to do as it was before you’re starting to see assets that were on ppas now that contract has ended and they’re now exposed to this wholesale market risk and they’re like we don’t know necessarily How do we manage that risk we don’t know how to trade in the day ahead versus. Real time. How much our volumes that we should be sort of Guaranteeing. We’re going to deliver versus leaving open to whatever real time prices are so we really are trying to come in and help with that specific problem.

James McWalter

And it’s so interesting. You also mentioned this kind of ah you know, starting with a saas product and then the the kind of idea of building your own kind of prop trading desk about a year ago to put my kind of cards on the table I actually had a friend of mine who was a machine learning engineer and he had a very similar idea to to. Gaiascope was like okay, let’s take some you know day ahead predictions use some weather data use some fancy different kind of models specifically targeting battery storage and then use the ash somehow to kind of decarbonize the grid and when we were like chatting about it was like okay well. We could probably make a ton of money on this right? We could just trade it like if if our model you know if his predictions are better and than the average predictions that are out there and you have enough capital to deploy. You actually make serious but amount kind of money but I think the thing that we were a little bit struggling at and we we kind of immediately moved away from that and I ended up kind of going in different direction as a he. Um, with a different company but the bit we were always kind of struggling with was the kind of connection to directly nudging the industry into kind of more clean directions and so it sounds like you went through you know way more successful and like more thoughtful kind of way of kind of thinking through those problems. But yeah I guess how did that kind of process go for you.

Lauren Kuntz

Yeah I mean I think I entered with a similar mindset of probably coming from academia was like how does trading help anything like you’re just sort of scraping money away from other people and the more that I’ve been involved in it the more that I see it actually is it is value. Add to the grid. Um, and it is helping decarbonize the grid in the short term long term we need physical assets on the grid that are decarbonized right? like that’s going to be the limiting factor more than whatever you can do with just purely financial trades but part of the reason that even financial traders. Like the work we’ve been doing is allowed in these markets is because we’re basically taking on risks that other people won’t take on and are helping the market in advance get a better understanding of what will happen tomorrow in reality. So if you have no idea what tomorrow is going to look like. You have to make decisions around what plants are going to be turning on at what time. Um and will I have enough generation from those plants and there’s some plants that have a very long time. It takes some to spin up and be ready to produce power and you probably if you have no idea what’s going to happen are just going to be like hey guys. Be ready all the time to produce power be running and then if it gets really windy all of a sudden you’re just like sorry wind we have to curtail you because we can’t ramp that coal plant down. But the more insight you have in advance through the day ahead market through the type of trading that we do the more understanding you can have of like hey there’s actually really a high chance. There’s going to be a lot of wind so we should 3 hours in advance turn that coal plan off so that we don’t have to curtail the wind we can take advantage of all of this really cheap power. Um, and. Because we have different return expectations than say the wind farm or the coal plant were able to bid more aggressively and get the market to look more accurate than they otherwise would they probably are going to be more conservative and they’re like well we don’t want to take on the chance. It’s not windy. Um, so we’re able to really help the market operate more efficiently through our trading and efficiency also is really strongly correlated with lower carbon.

James McWalter

Yeah I definitely take both those points I think the peaker plant point is one that I think is not really noticed in the way that it should be right? And so for the audience you have these typically coal-fired or very dirty sources of energy they tried to to get fired up on a pretty quick basis to kind of fill. Ah, peak issues within in the grid itself so that nobody loses energy and it’s just like an incredibly dirty way of doing those things and so if you can avoid it as as Lauren Kuntz was saying um, you can have this kind of huge benefit and then we’re also moving to this world where we’re starting to have thepach dispatchable, clean energy like things from so storage and batteries. And so how are you thinking about how I guess you know how different models can work across different types of energy sources and how you kind of you know judge that or are your kind of model takes in lots of less inputs and then it’s like we will predict the good price and that price is consistently beating the market itself.

Lauren Kuntz

Yeah, so we really focus on having good inputs that help us get a really good understanding of not just like what is a point price forecast but like what’s the confidence in that which is the other really big piece of what we do that I think is different from how other people look at these markets. But transmitting that into decisions for assets is actually very asset specific because for something like a peaker plant. They can kind of respond to prices as they wish unlike. Storage which can only respond to a price signal if it has power stored up already right? So There’s this time component in storage that makes forecasting there even more important and makes how you utilize those forecasts as well. Even more important because it’s like if you have a $9000 price by coming.

James McWalter

Right.

Lauren Kuntz

And you have an awareness of this even if prices right now were two hundred or three hundred dollars it’s worth it for you to charge so that you can discharge in that even higher price time. Um, and that’s a consideration. You don’t necessarily see in fossil type dispatchable plants. Um I think demand response similarly has that sort of time varying tradeoffs that you have to realize and it just makes everything we do about the christ forecasting and translating it into decisions even more impactful.

James McWalter

And I guess who are today are your customers and what is a process if I was let’s say one of those customer profiles of signing me up as a customer. Okay.

Lauren Kuntz

Yeah, so we are really focusing on storage assets and renewable assets that have basis risks that they would like help managing that’s kind of our initial use cases right now and specifically within the Texas market that’s kind of the grid that we’ve really focused on to date. And the way that we tend to interact with potential clients is we start with just a free trial process. So we engage with you. We kind of show you hey this is a simple strategy that is just for purist illustrative purposes, no bells and whistles on it. You can get an understanding in a back test of how it would have performed um and every day then for the next month we’re going to send you how that strategy would recommend trading so you can kind of see this is exactly the information I’m getting if you’re already trading yourself. You can see how is it different and we do kind of a weekly retro of like. How would our simple strategy have done really get you familiar with kind of how it’s working why it’s working the way it is assuming the trial is of interest and both parties want to keep moving forward. We then move into a pilot phase where we do kind of a 2 to four week period of. Really customizing the strategy to that client specific needs. So everybody has a different risk reward profile. Everybody has different concerns that they’re worried about so we want to actually spend the time upfront really making sure that we’re building the strategy. That’s right for them around our price forecasts. Um, doing a lot of back testing so we establish baselines how much better. Do we think it’s going to do than what they’re currently doing and from there we move into kind of phase two a pilot which is just incubation so similar to the trial. We’re sending them the trades every day the strategy would recommend. We’re not live trading them It’s just kind of but make sure all the processes are working get everybody comfortable and then final phase of the pilot would be an actual deployment so you would be trading around the recommendations of our software.

James McWalter

And what is a kind of typical you know, um excess return um standard that and and Ram charge is a very large range but you know what would you say a good pilot would look like if you know would you make a customer very happy using your your product.

Lauren Kuntz

Yeah,, That’s a great question I mean I think it’s very much asset dependent and it also really depends on kind of what their baseline is like I think there’s some players where they have no idea how to manage basis risk and anything that is helping that is a win in their book. Um, and then you have other players where they already have a decently sophisticated strategy and they want to see like hey it’s only worth it if you’re making 20% plus more I think some back testing that we’ve played with have shown like the capability of five X Ah Roi on some assets. Um, but again it really depends like what are they currently doing how comfortable are they with trading everybody kind of has a different set point.

James McWalter

Um, if I x sounds good though. Um I’m sure I’m sure people are happy when they see those kind of numbers. Um, and 1 thing that again the can canadian might not kind of be familiar with is trading in the wholesale energy markets. Is a has pretty large barriers to entry so my understanding to trade in Texas which is one of the kind of you know the energy regions where this kind of trading takes place is at maybe it’s about but 7 figures about $1000000 to kind of get up and running and similar for other regions and so. As we’ve seen different kind of policy changes happen to allow more distributed energy resources allow a lot fewer or a lot more you know organizations. Yeah, even going down at community solar and like kind of approaching things like mom and-pop dispatchable energy this kind of thing. Um, one of the big barriers to entry is still the access to those wholesside markets. How how do you think about that barrier to entry. Obviously you’re filling out like some of that gap as well. But um, is it where it should be like is does it protects people from like maybe you know the the right and toot and claw nature of markets that are that are like the energy markets or. Should it be what opened up some more. So.

Lauren Kuntz

Yeah that’s a really good question I mean I think we definitely struggled with this super early on as a company and even 3 years into it still can where we ended up in Texas made the strategic choice to start there largely because the. Credit requirement that you have to post is substantially lower in the Texas market than elsewhere so was one where it’s like as a family and friends round and ycy funded company like we had enough barely enough collateral that we could start doing what we’re doing um and as we’re growing. We’re starting to reach those thresholds but even now it’s still hard to kind of show that you have the required collateral to trade. Um I definitely have an understanding as to why you don’t want to just sort of have a free for all be like yeah as long as you have $10 come under these markets like at the end of the day. This isn’t just like stock market where oh it’s going up and down. It’s like if you really mess up electricity markets like you could cause blackouts like there’s severe consequences that can happen and that’s not just like an uncomfortable thing but it’s like. Losing power to hospitals like these can be really extreme consequences if the grid goes down so I understand the need to keep it somewhat protected and somewhat a barrier because you don’t just want anybody playing but at the same time you’re completely right? that these limits are somewhat arbitrary. They’re also somewhat set kind of like there’s the ability of the markets to be like well you’re a small player that we don’t like so we’ll just set a higher credit limit for you in a bigger hurdle that you have to jump over it than somebody else and to really let all of these distributed resources take advantage and give the benefit to the grid that they can provide. I do think we have to be a lot more thoughtful about how do they engage? How do we engage them safely. How do we engage them without really risking the stability of the system I think it’s a question that Ferc is constantly struggling with to be honest.

James McWalter

Yeah, absolutely so for 22 22 which was this new rule that passed a couple of years ago that kind of allows just more types of energy to be allowed onto the grid and in various ways and and I actually spoke to one of the people who wrote the the ra law one of the lawyers at Ferc. About this and I was like hey it is just like a cold message I was like I’m curious of fork 22 22 um, what’s and it was like my my email was like what are the entrepreneurial opportunities caused by Fork twenty two 22 and I a great chat to him and he was like very blut. He was like. Not for like 3 years it was like it’s going to take years just for people to really understand because again he’s like we we’ll write these rules to be more permissive of different behavior but you know as as you’re saying like you’re having all these other layers right? and all these other areas of kind of risk version because it is dealing with something that’s so fundamental like you know. The backbone of our entire civilization is electricity. Basically so um, you know for yourself and I coming from like the startup world. We’re like let’s move faster. Let’s let’s open it up. Um, but I also could understand the yeah the need to move slower in certain areas.

Lauren Kuntz

Yeah, for sure I Guess the one area though that still really frustrates me and like if I could wave a magic wand and get furk to change is around demand response I feel like the way right now Demand response markets are set up. Is you get rewarded for peak Shaving. So. Times when there is a lot of load on the grid if you are able to reduce your load. You can get paid for this but you can’t get paid for filling Troughs. So if you have too much renewable generation and prices are Negative. Most demand rockets are set up where you can’t take advantage of that. And so like you’re really limiting how that resource can interact and what benefit they can provide from the grid because you haven’t incentivized them properly and it’s stuff like that where like every time I see it I’m like oh come on move faster be a little more like a startup don’t be like an old school energy system. But. We’ll get there and just never I think as fast as entrepreneurs like us want.

James McWalter

Exactly but 1 of more gray hairs. But we’ll we’ll get there in the end and I guess you you could have mentioned risk a couple times and especially because you are kind of focused on Texas we you know had this kind of very famous event last year pretty much just over a year ago where and a lot of people outside of Texas heard about this as well. Where. Because of extreme weather. You had very large shutdowns in the grid. You also related to that had these incredible spikes in price which from a kind of pure economic point of view is basically what you want to see right? You want to see these large spikes in price to adjust behavior. But in the same way that everybody somewhat misunderstands surge pricing on ubers and lyfts when there was a disaster and are like oh my god this is like terrible. It’s like well you get any drivers out unless you actually pay them. You know a higher rate. Um, you know there is the I guess the economic reasoning for why an event happens. And then how you know we kind of socialize that and also how we kind of socialize the risk of associated events. How do you think about those elements because you could build a barbell strategy where it’s like we’re going to make it lose money every day until there’s a disaster and we’ll make a ton of money. But you know you you’ll be yeah, like in trouble with the public. We’ll say that.

Lauren Kuntz

Yeah I mean you’ll be in trouble with trouble with the public I think you’ll also struggle to find any investors that are like truly truly okay with you losing money for 10 years straight until there’s like a 1 in 10 year winter storm event that happens. Um I think most investors aren’t okay with that ah level of risk reward. Um I think it’s it’s a challenging question because especially in Texas where you don’t have capacity markets. You don’t have kind of baseline payments that you’re making to generators that are just sitting idle most of the year but are like what’s keeping the lights on on that hottest day. Really operating. Um you end up in Texas with like needing those price spikes to incentivize enough capacity to exist there for like the biggest days that you need it and like the winterstorm is one of those right? where it’s like seeing high prices helps incentivize more people to come build. Um, but at the same time you don’t want to pass that on to consumers right? like you were hearing about some consumers getting $20000 bills where it’s like to an extent like electricity but in basic need like electricity and heat like you need it. We can’t really survive without it.

James McWalter

So bit botch right.

Lauren Kuntz

Um, so we do have various protections in place for most of the country like most people do not sign utility agreements where they’re playing the wholesale price for their electricity like you normally have a fixed rate. Maybe it varies a little bit over the day but it’s kind of a locked in you’re set up in this Contract. So I think it’s partly. Kind of making sure the right people bear the risk and being very cognizant of sort of Okay, if you are going to benefit from the risk. How are you then paying the system back at other times. How are we making sure that like the reward you’re reaping is truly in line with the benefit that you did provide.

James McWalter

That that makes absolute ton of sense and I guess it kind of brings to mind again. How the energy usage itself is shifting right? and so you obviously have this kind of massive increase in the variability of the supply right? as we’ve talked about with you know, renewables and not being the step batchable. But. Now starting to see battery storage which is somewhat but still needs. Yeah to be charged at certain points then on the demand side. You’re also having a huge amount of variability as we start to go from. You know one percent evs and so certain markets to 5 10 15 twenty thirty percent and so on and that is I think in general people are not. Outside of people directly working on this like not really prepared for how wild the change is going to be to the grid and how we kind of cope with that. How are you thinking about that in terms of like you know the opportunities or challenges for gyoscope.

Lauren Kuntz

Yeah I mean I tend to view it all as an opportunity right? I think as an entrepreneur change in any form is generally an opportunity. Um, so for me I look at that I’m like this is huge potential. Um. Part of it does depend on like how do does ferk decide that these types of new loads and new assets that can be dispatchable on the load side. How are they allowed to partake in the markets. Um, but at the end of the day I’m like well that’s hundreds of thousands of batteries. On the grid that all could benefit from price forecasting and understanding their optimization around charging and discharging potentially so I view that as like a massive potential stream of clients for us the timing of it again depends on the markets and what’s set up there but it’s. It’s going to get there eventually because it has to for the grid to work for the grid to be balanced. We have to start treating these loads as dispatchable like they are um I also just in general for the grid view it as a win like storage standalone is incredibly expensive to build still. We’re starting to build more of it and that is fantastic. That is wonderful. We need it but the amount that we need right now is not going to get there so I’m like hey look people are naturally buying evs like I just purchased a Prius prime. That’s a plugin and has a battery like. Why are we not letting these partake in the market they already could help stabilize our grid they could provide more benefit to it. This is a wonderful potentially lower cost way to get a lot more storage faster to the grid.

James McWalter

And by definition are already just going dramatically affected on the demand Side. It’s just reverse reverse the flow right? like um and and the tech is all there to certain extent. You have companies like stem and so on who allow you know what they call Ev Degrade just from a pure like technical ability. Um, but it’s funny I like when I was again kind of investigating a Geiscope esque approach I was like talking to people who are doing Um, yeah software to kind of control battery when it should operate in different markets and so those services market and so on and like ah talk to multiple folks who were just like using a timer like they weren’t even like trying to predict anything they’re like. Oh you know, usually like load is like this in the day. Yeah know at the end of the day versus that. Um and I was like oh well, why? why? Why don’t you try to like actually optimize it like ass a lot that’s a lot that’s complicated. Um, and so but but like all I guess all the but buildinging blocks for this, you know, very streamlined. You know, ebbing of flowing of supply and Demand. Like are all technically in place. But as you said you know the opportunity for entrepreneurs is to actually piece them together into something that actually you know is a new stable hole.

Lauren Kuntz

Yeah, exactly and I think I think they’re right and I understand why they’re like this is a lot like having now spent 3 years building up our models of this system I’m like yeah, it’s hard like why I get why using just kind of a timer is a lot simpler of a first step but I do think we’re gonna see be it one company that kind of. Pulls all the pieces together are many that ultimately come together with all the pieces into a giant collaborative effort I think I think we’re going to get there I think I’m just always questioning when is the timing of it is it the next five years is the next ten is the the next twenty.

James McWalter

You absolutely and then thinking about the timing. So what’s next for geoscope over. Let’s say the next kind of 12 to 18 months. What are some milestones you’re hoping to hit.

Lauren Kuntz

Yeah, so we’re really excited to be onboarding our first pilots fully so that’s kind of going to be the really big focus of this next couple months is success with pilots in Texas’ ‘ market and then from air. They’re really looking to do a series a raise. So we’ve done a seed and seed prime round to date and are really excited that a series a is going to open up us for us the ability to really expand beyond Texas I think that’s kind of the big one that we’re really excited about is like there’s a lot of players beyond that one small market that we could reach so. Unlocking those other markets I think also expanding beyond kind of just sort of the storage basis risk focus that we have right now for storage and renewables. Um and starting to think more broadly about how can we help other players in this space.

James McWalter

That that makes that makes sense and you know very kind of exciting next next next year two and yeah I’d imagine you’re taking lots of data and I’m sure you don’t have to tell me the data are taken in I’m sure most ah that it’s very proprietary but are data sets that you wish were available but you’re just struggling to find. Um, yeah, this is some of the world that. But I live in my own startup. But I also like talk to tons of folks who are trying to think of new ideas and such like an opportunity with collecting data in new ways. But yeah, is it anything that comes to mind or you’re like I wish somebody would actually start collecting some of that data.

Lauren Kuntz

So There’s a good amount of data on the grid collected that we have access to as a market participant which has been phenomenal I Think honestly, my biggest pain is less like oh I wish I had this data. It’s. Generally been around like oh my God I Wish this data was cleaner and less of a pain to work with like name matching between data sets is just so Hard. There’s no consistency. It’ll even sporadically change over time and you’re like why? Why do you do this to me. Um.

James McWalter

Wreck.

Lauren Kuntz

The other thing that would help I understand why they don’t do it but would make our lives a lot easier is we get information on kind of like what generators were producing and various people’s bid information but it’s all delayed by two months so having a closer to real time understanding for some of those numbers would be really beneficial. Um, it obviously is collected. It’s delayed because you don’t want any sort of unfair competitive advantage that you can take from that and like if you are the only natural gas. Or there’s 2 natural gas plants. Let’s say in Houston and one of them is down for maintenance and you’re the other one and you know this you can suddenly ramp up the price that you’re bidding into the market and like really screw everybody over like that’s the reason that you don’t allow this data to be published as soon as it’s available. But it’s also one where it’s like it would just make it so much easier to model like we would do such a better job forecasting if we had this sooner.

James McWalter

Yeah, it’s it’s so interesting. You know, ah Isis sell datasets to quantitative hedge funds in New York and some of them were high-f frequencyquency folks and like the timing was like all all important for certain types of data. It’s like Ken you know and and those these tales at the time of like people just like building things physically closer to. Parts of Chicago where data will be announced and because you’re working with like the speed of light basically to get the data from but you know from 1 place to another and like if you can yeah you can trade a lot in the time it takes for light to move from Chicago to New York supposedly and so yeah, that it’s obviously a more extreme version. But um, once you get kind of getting into a thing that touches a market. You know. Frequency timing. Um like depth cleanliness of data like all those things are interesting and yeah I would love so I would also love somebody to build a pipe of all the different location marginal prices for the country into like a nice downloadable format or you know etl would be amazing.

Lauren Kuntz

Yeah, yeah I mean there’s some players out there that are trying to do that and bless their souls. Um, it is a hard job because everybody uses a slightly different format and especially with the Grid. So many of these data sources are coming from like software that was built in the eighty s. And the 90 s and has like weird conventions to how you can name things so you just see kind of like residualness in it. But yeah I mean I think easier ability to play with data is going to be a massive game changer when it comes to innovation in this space.

James McWalter

Yeah, and I guess connected. You know your background like has a kind of very strong kind of scientific basis. Um, you know you have a ph d you know you’re interested in in kind of climate one of the things that I’ve noticed as I sort of can investigate like ideas would it anything that touches a grid is that we just have not a lot of you know, traditional. Software and tech folk from yeah, the the coasts in that space and you still see a ton of you know, not even Microsoft 95 things being like shared around. Ah you know, not just the utilities but even often private companies as well. What are things that could be you know done to kind of attract more of a you know. Diversity of background and experience into people who are kind of working on the problems that affect the grid and and energy more generally, right.

Lauren Kuntz

I mean I think we are starting to see that to be honest, like I think with all the startups and interest in climate tech There’s so many young people young people in tech who don’t just want to be software programmers but want to be software programmers and something that they really feel like matters in the world and I do think. Grid and energy is a deeply interesting one and especially with all the startups that are popping up I do think there is a bigger and growing diversity of the just talent pool that’s getting drawn here. Um I do think the other one that was representation matters like. Almost all the conversations that I have are with people that don’t look like me in this space right? So decision makers in the space. Do not look like like I look um and I think that can be something that’s hard for a young person just entering this space but I do think over time that’s going to change. Um I think. Seen it start to change even in the three years that I’ve been doing this with geyascope and I’m hopeful that it’s going to continue to just progress in that direction. Um, the one last thing that I’d kind of add though is like this framing really helped me understand. Why so much of energy in the grid specifically is rooted in this like old tech mindset and utilities tend to think like hey I want to buy something and then I own it right? like I pay you to build a solar project and now it’s my project and they tend to think about software the same way they’re like build me software. Now I own it and they don’t understand like software gets updated like there’s license fees for software. So I think a little bit of just like is that mentality of how you engage and think about your expenses as a company can be very different in energy than it is in other aspects of.

James McWalter

Yeah, for those ah you know software folk who are interested in working the space but never took an accounting course like just learn Capex Op X and why utilities love Capex they as as you’re saying hate off X and software is always op X It’s just like you know and we’re just all coming you know and who.

Lauren Kuntz

Business.

James McWalter

Build software from an opx world and it’s just like no yeah, just build it and we literally have $20000000000 for capex and we have 0 like ah $12000000 for op x for the next ten years it’s it’s crazy like the disconnect. Yeah.

Lauren Kuntz

Yeah, yeah forger.

James McWalter

Um, and also you mentioned earlier that um you were yc company number years ago. Actually my governor and I were far our own startup. We were actually just accepted into y see early entry for for the summer batch. Um, it will be thank thank you very much. It will be public information by the time this podcast comes out. Um how how did you find that? um.

Lauren Kuntz

Congratulations. Um.

James McWalter

You know the experience and I guess like any any tips for those who are kind of going through not just YC but you know incubators and accelerators in general.

Lauren Kuntz

Yeah I think we were really blown away by how much value we got out of y c um I think a huge part of it honestly was like that was the first time my co-founder and I and our first employee were all in person working 100 % of our time on this startup. Um. Jess and I we founded the company when we were living on opposite coasts. So I was in Seattle she was in New York and like we met each other like 3 times in person and then why see happen and we’re like we’re moving in together into this house in a place that neither of us live and like all we’re gonna do is like code and make this work and. Having that time together was just so important like we learned so much about each other learned so much about building a company made so much progress on the product and really got pushed by the mentors at yc to like strive for more than we thought was even like possible within a summer so I think that was like very wonderful in that regard the advice that I would give is reach out to all of the partners there and have office hours and take the initiative to get the help I think these programs have started to like really grow in size where. Scheduled touch points of a meeting every two weeks with a group. Super awesome. Super helpful. But you can get so much more if you’re just willing to kind of take that first step and be like hey I really want to talk with you. Let me book some time in your office hours and like just share with you what I’m struggling with get tons of different. Former founders views on what you should do like that’s incredibly powerful and helpful.

James McWalter

That yeah, that’s that’s very helpful. Yeah know I think I think taking that initiative in general whether you’re a part of those programs or not like I always say to people like you know if you’re interested in moving into a new industry just like cold message like 50 people like that’s that’s how I met everybody. That’s I meet everybody at the podcast. You know it’s just. Put yourself out there like I don’t want to trivialize it when you’re new to it it. It? Yeah, there is it like an emotional weight to like putting yourself out there I’ like that. But yeah, you eventually get very use of rejection and I think that’s that’s very helpful than a lot of different initiatives. Ah Forfins Shav was actually looking at your background and I notice ah something called Green Vision. Um. That you’ve you know, kind of working on and and this very kind of cool website um could tell us a little bit about Green vision.

Lauren Kuntz

Yeah, so green vision was like some of the very first modeling I did around the electric grid before gyoscope happened. Um I mentioned earlier on in the podcast but I spent time in grad school helping teach a class. For undergrads that was really focused on what does it take to get to a carbon-free energy system for the us so they had to think about like what do you do in transportation. What do you do in industry and how do your households use like like energy and what I kind of noticed when I was teaching this is all my students would make the choice of electrify as much as you can. And then power that electricity with a carbon-free grid and they came and would start asking me questions of like well how many solar panels do I have to build for that. How many wind farms like what does this actually take so I just started doing for fun during my ph d some really simple and modeling trying to look at like what are the levers that matter. So not looking at the economics of it but really saying if you wanted 100 % solar in the us what would it take like how much do you have to build and just started to kind of do various benchmarking around that and I kind of realized hey I built this really interesting model. My students love playing with it. Let’s try to put it out there for the rest of the world to play with as well because I think a lot of people have these issues and questions and want to know like what does the future energy system look like so the idea was to create something that’s really purely for educational purposes but just a tool that you can go play around with and fiddle with and ask okay. I think that wind and solar are the only technologies we can use and you can look at what this looks like and be like wow that’s going to be really expensive. Maybe I should include some nuclear and like start to kind of just figure out. How do you balance all of those different needs and components of our future grid. Um and kind of. Decide for yourself like what is that right? mix? How do we actually get there.

James McWalter

I yeah I love it I’ve played around a fair amount with this and I also end up put a lot of nuclear I will say it’s like like like twenty fifty numbers I was like it’s like 80% nuclear um which which I say no problem was but it might be a difficult thing to take thing to achieve um Lauren Kuntz has been great. Ah, really enjoyed it is there anything I should have asked you but.

Lauren Kuntz

Um, so we are actively looking for clients and people that are excited about being one of the first pilots with our software in Texas so anybody that is excited about that opportunity wants to learn more should absolutely reach out to us.

James McWalter

Did not.

Lauren Kuntz

at founders at http://geyoscope.com

James McWalter

So brilliant. Well and we’ll include that email in the show notes. Actually I have a couple of people in mind in arcot for you. So I’ll make those interests as well. Thank you Lauren Kuntz.

Lauren Kuntz

Yeah, thank you so much.

EV Charging Infrastructure for Fleets – E97

Great to chat with Jules Brenner, Founder of Zeus Power, Zeus Power is changing the way facilities add EV charging! We discussed optimizing building installations for EV fleets, the sales cycle in the public sector compared to the private, retrofits, EV infrastructure development policy and more!

https://carbotnic.com/zeuspower

Download Podcast Here: https://plinkhq.com/i/1518148418

Remember, If you want to support the podcast please rate and review 5 stars on  Apple, Thanks so much! 

James

The unedited podcast transcript is below

James McWalter

Hello today we’re speaking with Jules Brenner co-founder at Zeus Power Welcome with podcast, great to start. Could you tell us a little bit about a Zeus Power?

Jules Brenner

Ah, show you how many James. Yeah, absolutely so Zeus Power creates energy solutions for the modern industrial real estate facility. We focus on first creating electric vehicle charging products for the trucks and the fleets that house. Their vehicles in those facilities and really focusing on that next wave of energy where the predominant load of the building is the electric vehicle charging systems.

James McWalter

And so you’re saying those kind of industrial type type buildings. Are we talking about? you know like an Amazon warehouse. Are we talking about? you know a supermarket that might have trucks kind of going in the back something else.

Jules Brenner

Yeah, yeah, it’s definitely more of the Amazon warehouse think ah, it could be a private fleet. It could be a government fleet where they house like city vehicles street sweepers and different vehicles and spec lighting poles all the way to a you know. Ah, kind of a smaller enterprise fleet that has Chevy bolts for their employees. Um, anywhere where you’d have like a fleet and lots of older vehicles as well.

James McWalter

So that makes sense and what drove the initial decision to start Zeus.

Jules Brenner

Yeah, um, it was kind of interesting I was in the industry I was working at a company called exos trucks that was working on the the sales side and we looked a lot at you know installations and deployments of multiple chargers and trucks. And I started just looking at how complex it was to spec out charging systems for a lot of the buildings. You not only had to find excess power in 1 of the buildings but you also had to then go and make sure that the you know the building is really speced and ready for. Lots of chargers at scale and started to think that you know not only are most buildings going to tap out maybe at 5 chargers maximum. But the way that and a lot of the trucking industry procures vehicles is very exponential versus say in like the public charging space. Um, they typically will sit on the sidelines with any new technology whether it’s hydrogen and biofuels et cetera for maybe an extended period of time and then once they like something they tend to ramp pretty quickly with some pretty big orders so really wanted to be able to think about when some of that stuff happens for the. What currently is nascent electric truck industry. How are we going to be able to keep up and you know from there we started doing more research looking into charging systems and came up with the idea of produce.

James McWalter

And you said we there? Um I believe you have a cofounder and would love to hear you know the kind of how you 2 met.

Jules Brenner

Yeah, yeah, absolutely yeah, my co-founder Austin Hunt we actually grew up like 10 minutes down the road from each other in Brooklyn New York we went to high school together went to college together in college we created a school’s first baha racing team basically building. A team to put together a du buggy for school competition from scratch raise money from the school and built the team over course about six months of a team still has stood stay but Austin and I really like working with each other and after you know college we. Separated for a bit. He stayed in the northeast you worked at a few different companies some startups all the way from doing kind of powerpoint product to commercialization. You worked at some aerospace companies and had internships at Spacex and a variety of other. Prominent aerospace firms and um, you know he kind of is the more technical side of everything even though we both have mechanical engineering degrees and his focus is very much on electro mechanical solutions.

James McWalter

And and so you know you had obviously this amazing kind of basis of a long-term relationship with each other but you know we we all have people we grew up with but we don’t always necessarily want to start companies with them in my own case I Even at one point started a company. My brother I wouldn’t say that was the the most successful thing but you know definitely the person I know best in the world and so these things have you know pros and cons how how were you kind of communicating with each other to say Okay, actually we want to start something together.

Jules Brenner

Yeah, it was interesting. Um I think Austin was um, getting to a point of his life where he wanted to get in really early into something he was working at a company that was more like series b stage but he was there through some of the early fundraising rounds and. Think we just kept in touch and when I started to you know census kind of desires to to branch out almost on his own I was kind of thinking about you know, a lot of the growth in the electric truck industry and was managed to to kind of convince him over a course of a few months to come join on. So. I think it worked that well he certainly has a lot of skills that are complementary to mine and I think we create a a very moral round the team.

James McWalter

And absolutely I I think like the you know the the founder fish for this space is like super strong which you two as as a founding team and I guess then so you know you had this idea coming out of your experience at exos trucks. You know you have cofounder with ah. Technical abilities that you have this kind of long-term relationship building things together. Um, and so I know you’re kind of currently working on. You know, designing and and kind of going through some iteration on the Mvp could you speak to what that process is like today.

Jules Brenner

Yeah, absolutely so you know we really wanted to focus first and foremost on a strong kind of customer fit before even getting too far along with the Mvp you know this is probably the fourth or fifth hardware startup that I’ve personally.

Jules Brenner

Either either joined early or in this case co-founded and we’ve seen this mistake over and over again. Austin certainly seen it in his engineering experience. So when we started doing that we first figured out like who could be our initial first customers and started taking a very. Kind of collaborative team approach with them like we have some government fleet managers that will very likely be that first early deployments and we try to speak to them every you know for few weeks as we do this and literally show them everything we have and get inputs as we go through and think of it as we’re custom making them a solution. And setting Kpis for it as we go as well. So that’s been really important and helpful in our in our general goal and you know putting together the Mvp. We really wanted to focus on what’s the you know literally the minimal viable product for um. You know this? So we we focused on a more toned down version of the commercialized solution in terms of both cost and functionality with the thought that the key features that kind of alleviate the largest pain points would be focused on first. And um, you know Austin’s built a team on his side of various professionals in the charging sector power electronics, mechanical design etc. Um to make sure that this is a robust product that is really geared towards the um commercial mission critical flut applications.

James McWalter

And so those design partners that sounds like are kind of running or have ownership of governmental fleets. How did you find those and and get them to agree to chash. You know every few weeks.

Jules Brenner

Yeah, yes, so those? um, those government ah customers like um was actually fairly easy. We really didn’t spend too much time frankly, most of the relationships that I had from my time in industry were with private f athletes and we called the ones on you pretty early on and you know learned a lot. But. Government fleets have been very progressive with um electrification and just clean energy on their yards. Um, you know we pretty much went found a ah list on some of the local agencies of the fleet managers reached out and and started conversations. A lot of the government mandates are really really soon versus private fleets and they’re ordering like you know we were literally ons site with ah a government fleet yesterday and you know it’s pretty bad I mean they were telling us how there is ah 1 of their fleet yards is actually housed in an old. It was a horse barn and the it’s It’s so old that you can see two truth marks on some of the walls from the old horses. But the infrastructure is very weak and I think that’s why they’re most receptive to this kind of stuff.

James McWalter

Yeah, and whenever I kind of talk to people who are starting founding startups and they’re like oh you know I really struggle to find people to help you know, give feedback on the product and it’s like if you can’t find design partners to even talk to you now like you might not be painful enough a problem and so I think it’s like so. You know it’s it’s great to hear that how easy it is because if you find people who are just like loving jumping on a phone call with you to talk about the scale of the problem then there’s definitely something to be solved here. There’s definitely you know a potential solution that you know that smart startup folks can kind of work on and so okay, so the. You have these you know design partners you’re talking to on a regular basis. Amazing. You’re getting you know, physically on site seeing seeing horse barns and and other kind of issues. Um I guess from here like what’s the kind of next mostones in terms of getting you know some sort of Mvp to service those type of customers right.

Jules Brenner

Yeah, absolutely so we are currently in the pretty much supply chain kind of ordering phase of our Mvp. So. It’s designed. We’re focused on ordering parts as the parts come in. We’ll begin to assemble. And then you know at that point start to firm up the exact details of where we want this thing to go first and you know and this kind of stuff should happen pretty quickly next maybe 3 to six months or so and you know to whatever extent possible. We’re also focused on. Really, you know we refining in a lot of the um you know products core like software features so we have ah a sauce kind of very basic software layer that we initially and have for the fleets and dialing that in and then you know we take the data from that pilot or the course of. Subsequent 3 to the six months and feed that back so that we can have a better pilot number 2 as more of a kind of focus on the key features that we need to succeed and then over time as we build the. And these case studies if you will. We can then start to take it to larger and larger customers even like the landlords of some of the private fleets themselves that have you know been more proactive and want to install chargers maybe earlier when the vehicles are on site.

James McWalter

And just so I can fully understand like the use case. Let’s say I’m like 1 of your target customers and everything goes well the the kind of current direction. You know as you’re kind of going through these pilots and the development of the technology all goes well for me, let’s say I want to be onboarded as your customer you know in 6 to 18 months. Um, what would that experience be like and both through the onboarding and then once everything is set up like how would I guess my life change and for the positive.

Jules Brenner

Yeah, absolutely yeah, so you know a few things so I’ll maybe talk to you about the experience. We heard about yesterday with ah that government fleet manager now. Um you know this gentleman he is very you know aware of some of the challenges of just. You know, installing more than even 1 charger in his facility. That’s pretty much where he taps out and you know for their experience if you know they didn’t use ah a Zeus unit. They would literally have to redo their whole electrical room as he was telling us yesterday and and modernize everything and then also pretty much tear up a bunch of concrete on their yard to to get. You know some solutions in that you know they might not eventually scale. You know they’ll install 5 chargers. But then once the the building taps out and they need more later down the line they have to redo it so it’s kind of a messy experience but you know with Zeus it’s very much like just the typical installation of a charger. You know we help you with like. Permitting process to you know start the the application you know once all of it’s approved. You know we’re working through the surveying where this thing is going to sit how it’s function once the unit arrives the site. It’s installed by certified electrician and then after that we help tune in the. Le management software to the vehicles that you have which is just a simple onboarding process and I would definitely say that you know it’s a um, it’s it’s a much kind of cleaner installation because you’re going to save on and only the cost. But most importantly, the time and headache.

Jules Brenner

Of all the other electrical system upgrades which tend to take the whole charging installation process from being maybe six months to you know a year plus

James McWalter

And that that makes sense and the and I guess why? Why do these things take so long. Um, you know is it you mentioned permitting is that like a large component that’s kind of outside the control of both your customers and yourselves is it. Getting the components is it something else like what? what are the reasons for why this is such a kind of long process relative to you know? um, like ah for example, if if you wanted to ah like yeah build ah build a you know an outbuilding as part of an industrial park. You know you could probably do that in a few months right relative to this which which takes ah quite a.

Jules Brenner

Yeah, so so there’s a few things to consider so you know the first thing is that the amount of power that chargers in general are pulling is multiples more than what a building is rated for you know one statistic I can give you about 50

James McWalter

But longer.

Jules Brenner

Tesla supercharr type stations that would basically be for kind of semi truck level draw as much power as a whole empire state building peak load and it’s it’s quite a bit of ask for a yeah old 1920 s you know horse barw.

James McWalter

Right.

Jules Brenner

Right? So You know if you think about kind of what you need to do just from the electrical equipment perspective. That’s not only a big kind of logistical mess. But it’s also a huge capital capital planning allocation that a utility needs to take on plus. Actually all you know applying and installing all the different components transformer substation upgrades et Cetera Um, those things really add a lot of time permitting isn’t too bad I mean it depends on the State. Some are more backloggged than others but it’s kind of you know everyone really has to go through it. It just doesn’t. Um, I just get elongated.. It’s pretty substantially once other equipment gets in often. The thing that happens is that you you tend to really run into what we used to see at Exos which is that you would go down the kind of sales chain. You would get a happy fleet. Everyone would. You know, be working towards the goal of an installation of a certain amount of units and then you know once they start talking with their landlords about you know whether or not who pays for what that turns into like a whole lengthy negotiation and further ads time. So It’s It’s a really big hassle versus if you just install the unit that had. What you need built into it and that thing was as movable as a charger unit will get and just needed to do permanent. Not everything else.

James McWalter

And that definitely makes sense and so I guess then you know know this is obviously very kind of early days but 1 of the kind of challenges that some hardware startups have is you know is this something that I’m selling the hardware and you know it’s not offgraded very often. And I just have a single point of sale with a customer versus things where you have hardware kind of connected to other solutions services software and so on or there something more like a kind of long-term relationship with the customer. It is a long-term revenue stream. How are you thinking in these early days about kind of. The potential monetization of zoos.

Jules Brenner

Yeah, good question I think that’s ah in general, it’s a tough issue for a lot of hardware companies hardware tends to be a much lower margin you know sale and then adding that into you needing a lot of sales time to get it done a more highly technical sale and usually rank day sale. Doesn’t tend to a very cash flow and positive business and you know we’ve thought about that a lot we really didn’t want to end up in this situation where it was tough to scale and then also we didn’t like what we saw in the industry about having this kind of you versus mean type attitude towards a customer. You know we’ve talked to. Ah, variety of different fleets and in general just like talked huge hotel chains that have installed will take thousands of charge points and they would kind of complain that you know the more units that they put out the higher their saas fees grow but the you know their value isn’t increasing anyway, it’s just similar kind of cost tacking on and on for. Essentially charger and energy dashboards. So you know, kind of thinking about that. We really wanted to be able to create a set of products and kind of revenue streams that better align interests. So we have you know our typical revenue from the oem charger sale. So the margins on there are pretty in line. What what? a typical oe yeah would sell their unit for that 40 to 50% gross and then from there you know once we are installed in the building we use this kind of hardware aspect as essentially a moat right? to not have our software. Um, you know, switched out like what might end up happening to some of the other charter oems and you know we encourage the stickiness that the customer there and then we work on the 2 software layers so we have a kind of software layer that’s focused directly on our customer which is in most cases, the Landlord. Sometimes the fleets on their building so they are technically the servers that customer as well. But essentially that software package just focuses on using the batteries that are in the Zeus unit as a literally an energy storage unit for the time that the vehicles are not charging. If you think about a lot of fleets vehicles are actually not using them throughout the day that often is much more so that the battery is sitting around and you can use it all the different benefits that already exist in energy storage today including peak shaving to help you save on utility bills um resiliency to give you. Ah, peace of mind knowing that there is power on sight at all times in some bit capacity especially when you go all electric and then also create random streams to things like wholesal where how sound markets where you’re essentially by low sell high with some of the energy and you know we create our kind of higher.

Jules Brenner

Grow A margin revenue stream from that package. Um and really just try to focus on being more of like a partner with our landlord where we yes we charge for that software. But we also make sure that that creates value to them so that it isn’t just the of and our money. Kind sort Sas fees are growing and I don’t know what extra I’m getting every time it happens kind of thing and then towards the fleets themselves. It’s just the standard fleet management software so they have all your data and you know again know the software side. It’s typically higher gross margins as well.

James McWalter

Yeah, on the kind of bouncing the pricing incentive piece I think is really key. Um, you know you generated their bulk discounts for a reason right? at the enterprise level unless you’re getting some big value ads right? And so. Maybe there’s elements of compliance. Maybe you know there are these other kind of buckets that people can add to an enterprise plan but you definitely if you’re just kind of linearly going up in cost. You’re eventually going to have pushback from enterprises where it’s like why am I getting charged you know per unit. You know 10000? Yeah and I’m buying 10000 units and a smaller company is basically getting a better deal for because they have fewer units and and but our period of price is the same. So I think definitely kind of taking into that concern into account um is is going to be quite powerful as you were kind of looking to kind of differentiate down the road the other piece as you’re took on chatting there. So. Think I’ve mentioned the podcast before that one of the ideas that I explored in the past for startup for myself was some sort of pure software solution that enabled yeah the better. Um, kind of monetization of distributed energy assets specifically batteries but others as well. You know how could you kind of aggregate batteries. That are already connected to grid and somehow in a way that kind of plays with wholesale energy markets and I was talking to a few folks about this at the time the thing we kept coming back to was how how can we make sure that we continue to have access to those physical assets because what would stop you know the owners and. Of the batteries themselves are not the owners of batteries. But the manufacturers of the batteries themselves from having their own software layer sitting on top of those and because they own the physical asset in the value chain. They seem to have yeah the ability to block out other software that’s trying to reach down into the physical asset and so I guess. You have a kind of similar kind of thought process around why the but owning the physical asset and the development of physical asset is so important.

Jules Brenner

Yeah,, that’s that’s ah, that’s a very good point. Yeah I think owning the um you know, physical asset allows you to be better protected. Um you know or or other from the from the oems lens like from Missou lens allows you to be better protected. In a world where there are just a lot of different software platforms that help manage charging systems. Potentially even battery systems. There’s a variety of laws coming out with compliance at Ocp for charging Systems. So I Really see that if you are just a pure like software play In. Kind of control Hardware. You might have a really tough time growing. Um I’ve been in that space before and I’ve just seen it. It’s ah it’s a pretty like tough equation sometimes to manage in terms of customer acquisition cost versus you know what people are willing to pay and to that point earlier about like the the both pricing on Enterprise. The funny thing is the way that the incentives are aligned in the industry right now like we had so many customers that are really just telling us I wish I was paying 0 and you know they honestly mean it like they are to a point where they are just about to ask the charger oems to just shut off their software. Let them use it as what they call a dumb charger.

Jules Brenner

Um, so if something doesn’t change there I mean I don’t know that they’ll get around it but they are certainly feeling like they’re being forced. So um, you know, thinking about like you know how do we ourselves like you know, bring in a battery on site that is you know essentially. Ah, smaller version of what you might get like from an energy storage application and something that we purchase direct so we have full control over how that is used but we are you know, not being very like closed off about this kind of like very Aes or instead trying to be open with the customer and saying. You know now that you have this asset on site. Let’s work together to get the maximum monetization the ah roi on it and roi is a big word. It can mean just the insurance resiliency which doesn’t have an immediate cash number but you know helps out if there is a problem.

James McWalter

Yeah, so.

Jules Brenner

Um, but I think that’s really important you have to look at this industry much more through the lens of property technology than you do automotive technology if you’re going to stand out in you know 2022 and frankly, be profitable.

James McWalter

Um, and you mentioned the the kind of customer segments at the beginning that you’re mostly targeted on is more of the public sector and they seem to be the those who are you know have the greatest need are moving the fastest and I guess like my intuition would be that That’s generally. Not really the Case. So If you’re trying to sell to public entities. The sales cycles can be quite long often. It could be hard to get to the right decision maker and so on whereas you know more typical corporate clients tend to move faster. But obviously if they’re very big corporates. Those can also move quite slowly. Um. I Guess how how are you thinking about that kind of sales cycle aspect and why is this industry or this particular segment so different compared to the typical you know public sector moves very slowly model.

Jules Brenner

Yeah, yeah, good good questions. So you know a few things you know when we think about like who is the ideal customer that buys today I mean the ideal customer is going to be someone that is either the landlord or the feet of an industrial facility that is older and has less capacity. Right? And that could you know that could vary the older the building the more likely they are going to tap out. Maybe even at that first charter and if that’s the case as soon as they go to do some sort of utility study could even be with ah another charger company. They’re going to find out pretty quickly that. Need to do something and when they start pricing out what it costs to do you know all the station upgrades and the building upgrades then they get turned off to the idea sometimes so those those um parties tend to move a bit faster in general but when it comes to government agencies. It’s actually interesting because with. Fleets. They’re not that hard to find um you know they’re mostly the the information’s online and very minimal effort. Um I used to sell to private fleets and I’ll just tell you it’s frankly, been harder um with private fleets than with ah government fleets. Um, government fleets. Also they look at it a lot more through an esg lens than a like fleet manager at a private fleet. Usually the board of a company of a private fleet maybe has some esu mandates. But by the time it hits the fleet managers deaths. They really don’t care that much. So. Um, that’s a big part of it government agencies also usually find themselves with a lot more cash towards this stuff. So while maybe the sales cycles can be slower. They actually have more spending power and they actually have to spend it so you know there’s always some politician that comes out with some new. Idea for how they can clean up the roads and usually gets implemented. You know in fairly short order. Um, but sometimes you’re right, you know it can take a little bit of time the approach that we have always recommended to people is to say you know think about your yard. Not in the lens of you electrified 3 out of 50 vehicles think about it in more the lens of what would happen if you electrified whatever your goal is let’s say 30 out of 50 and maybe the other ones are bioiesel or hydrogen or something or cng. Um, what would the. You know, equipment needed look like what would the cost of your utility bill. Be call your utility try to figure it out and look at it from that lens and then ask them the other important question which is what’s the timing on all this and we would talk to a lot of utilities and you know they would tell us this kind of jokingly where fleets would call them and say I need.

Jules Brenner

All the existing power in this location and I need it in a few months and a lot of them would you know they just kind of say no we get give a few years so when you know some of that stuff you tend to move much faster and and I do think that a lot of the government agencies are a bit closer to their utilities and. Thereby it moves a little more smoothly but um, a lot of them do have you know lots of vehicles on order I mean we were with one yesterday and you know they have like I think they said 15 ford e lightnings and you know so street sweepers and all sorts of stuff coming in at the end of this year going into the end of next year we slow that down a little bit in terms of supply chain. But those vehicles are coming and with the permitting process and even you start to think all that through you’re about right there in terms of when you want to start procuring these things.

James McWalter

Mostly we’ve been kind of talking about retrofits you know the the horse barns of the world and and that kind of thing. Um, but how do you think about like new builds you know would real estate developers generally be. You know, potentially interesting segment to focus on in the future as they’re thinking about New New Bill commercial and industrial um to make sure that they have the right charging infrastructure from the beginning. Um, and before thinking about where you know the heavy automotive industry is going.

Jules Brenner

Yeah, yeah, absolutely yeah, the um, you know we definitely recommend with early builds that you you know you plan twice and you try to also you know, future proof to whatever extent possible. Um I can’t tell you how many different companies I used to talk to that would basically take advantage of every single rebate and grant at a point in time, especially those like really big franchise hotel chains and find themselves in the situation where they. You know install chargers of different brands some that are wi-fi connected. Some are not and then at some point they start to realize we should probably start to really standardize the asset and figure out 1 central place to track them and find themselves then in a position where. You know it gets kind of messy. So I think it’s really important to think about a standardized process for your facilities somewhat early I understand that most will probably not go to 1 technology in total. But definitely you know, keep the batch to a very small limited amount. And you know to whatever extent, you do have the ability to install early from fresh concrete. Um, you’re going to keep your total cost down. Um, but more importantly, you’ll be able to plan for things like footprint right? You don’t want to stick chargers in the front of parking spots and have vehicles have to park. You know three feet from the curb. You also want to be thinking about to whatever step possible how you can use the um, the battery systems to better. You know manage the building. It’s it’s kind of interesting like if you think about the way a lot of like the let’s say office park charges are installed. They’ll be closer to the building and they’ll also be thinner profile chargers just because closer the building means less electrical cost thinner profile because you don’t want to cover up the whole building to a point where you can’t see chargers if you start thinking about like batteries as part of that. Um, you know if you don’t plan electrical lines early. You don’t want to find yourself in a position where batteries start to take up a big part of your front facade as well too. So early planning is really really important and it’s also cheaper.

James McWalter

And then you know thinking kind of on about broader spectrum. The changes at the policy level and so we had the federal infrastructure bill that passed last year. There were multiple billions of dollars set aside for ev infrastructure development. Um, it’s still I guess a little bit unclear to me about the exact kind of deployment structure of that money. But how do you think about either the existing incentives like what was passed last year or things that could potentially kind of emerge in the future and about how that affects how you’re approaching. You know the deployment of your early product.

Jules Brenner

Yeah, yeah, good question I think the um you know it’s It’s very exciting to see that amount of dollars flow in from the federal level I think you know most even you know. Cities now are are adopting their own programs and spending their own money but the federal level should create a lot of opportunities for us to you know, not only find just on government website opportunities for bid. But most importantly, I think what it’s doing is it’s bringing into the light um a lot of grid issues. This kind of chooses electrical infrastructure. Um, and as you start to think more about that you start to really start to weigh whether you want equipment upgrades that maybe give you more capacity but still force the utility to work hard to produce lotss of energy or whether you want the um you know battery systems. Part of the equation that should make it easier for the utilities to generate energy and store them in the batteries prior to use. But I do think that the you know Overall the federal will has been a um, a strong sign for acceleration in the industry and it’s certainly kind of woken up a lot of the fleets to. Um, the opportunity of taking advantage of incentives now a lot of them. You know they maybe were thinking of going electric but they were going to stall closer until the um you know date mandates and now with the money coming out over a limited time here. They.

Jules Brenner

Um, accelerated a lot of their plans.

James McWalter

And then thinking about the team and and kind of as you were kind of building out the team and the company culture over the next few years you know one of the things I found in myself is every kind of new venture thing you know company that I start. The culture is often a either. Ah, reflection in some way of kind of my my past experiences at other organizations or other companies that I’ve involved in so either I’m embracing certain aspects of those other companies and trying to you know, incorporate those in what I’m working on now or I’m kind of reacting against them and saying okay you know that that company was great, but. Had this particular part of their culture or part of what it was to work there that I just absolutely do not want to have at my new company. Um, you know for yourself having you know, worked at a few companies worked at companies that have you know also been part of the kind of ev and electrification space. What are the kind of elements that you’re like okay. These are the things that I really want to bring in and and then still is the culture of ah you know of Zeus versus other areas where it’s like I absolutely do not want to bring those into this new company.

Jules Brenner

So yeah, that’s um, good. Good question. Well I think ah you know a few things some of my past roles and companies I think we’ve worked on some you know products that were kind of similar like some proptex some electroomechanical hardware and I think with those you typically. You know you’ll need your engineering team of course. Um, but most importantly, a lot of those companies they had strong like mission driven values and I think you know with trucking it’s a um, you know in general fleets and all that they they are a small portion of a total transportation. Pi but they are disproportionate part of the actual emissions side. So I think having a culture of people focused on you know, alignment on decarbonization is something that’s important to us. Um, but also a culture focused on strong engineering and. You know, active conversations with customers early is is key as well too. Um I’ve been in companies where you know we’ve cut corners and early stage engineer and design and I think that has certainly come to haunt us later and I think when you’re making a you know a missioncritical product. Like a charging system or energy system for a charge for a vehicle application. You want to do it right? You don’t want a call from a fleet you know someday telling you that they can’t um, operate that day because the chargers are out or something like that which is unfortunately becoming an all too common issue. And the um public charging sector these days. So I think you know those are really important I think really also focusing on you know, a very kind of systematic approach to the growth is is vital to we don’t want to make a product just for. Sake of it so we’ve really focused on identifying customers of pain points today instead of just adding out and looking at the broader market of who will certainly feel this pain in a year or 2 and we want to make sure you know that also really ends up being a kind of. Ah, right? recipe of culture and Zeus.

James McWalter

I yeah I love that um and I think it’s great that you’re already kind of being so kind of thoughtful about those elements as you kind of build out the company. Um Jules Brenner  I’ve really enjoyed the conversation. Um, before we finish off is there anything I should have asked you about but did not.

Jules Brenner

First yeah I think um, you know 1 question that we get a lot is you know, kind of why or maybe 2 questions. Why are we not using kind of those like public charging systems at truck yards and fleet yards and we get this a lot and I think.

Jules Brenner

Few things, the fleet trucking industry is probably about Five To Ten Years delayed behind public charging. Um, you know if you just look at a lot of the even most progressive fleets out there I mean you know like the government agencies they got about you know until the maybe end of this year or so until they start seeing. First batch of vehicles and um and that’s the most progressive on private fleets or some or maybe have you know, been testing a few and this is you know fleets that own hundreds and thousands so you know we’re still early days but it accelerates quickly just based on those purchasing habits I mentioned earlier. Um, but the other thing that we get asked a lot is like you know once the industry catches up. Why are people not just going to use you know a typical non-battery powered public charging station in your application and you know we always encourage people to think about that a the amount of power draw from. A power draww need from a truck or a piece of any heavy machinery is often much larger than what a public charger is typically built for but the just the software and the form factor are very different right? 1 ne’s going permissional critical application. 1 ne’s going to a. You know, kind of more discretionary retail type play and then really important to you also make sure you know you’re kind of thinking about how the landlords of these facilities are going to care about this because that’s a very different um relationship. Typically you’re going to put the charger in and the fleet side. Um, when time of use is low to not existent and you want to make sure that the direct customer the landlord is happy. So I think a lot of you know, just understanding a bit more. The market landscape is is really important to understanding us from a timing perspective. Um, but then to the second and final point we get asked a lot like you know. What is exactly your kind of differentiation. We try to segment ourselves and you know there’s charging. We think of it as like permanent charging and a non-permanent charging non permanent being those chargers built for like construction sites. Um, and then we’re in the permanent charging side and then when you segment.

Jules Brenner

You know who does industrial focus charging units. There are not that many players out there. But when you start digging in further as to who actually puts batteries in a lot of the ones who use batteries they’re just sticking in in a big iso container. Which is not a form factor that a lot of fleets have told us they like it usually takes a whole parking spot and does not look like a charger so you know we are the only industrial focused battery supported charging system out there that we’ve seen that actually looks like a charger and comes with all the typical software tools that you’d expect. The fleets and the landlords and I think it’s a um, it’s really important that we you know consider that in the lens of the industry because things like batteries will likely be mandated at some point if not highly encouraged by Utilities. So We definitely you know want to help. Continue to help find customers that you know like this stuff and if anyone is you know curious to talk to us further about it. We are always happy to chat.

James McWalter

So brilliant and we’ll include those contact details in the show notes. Thank you Jules Brenner  has great.

Jules Brenner

Yeah, absolutely appreciate you having me James take care now.

Title: EV Charging Infrastructure for Fleets – E97

Great to chat with Jules Brenner, Founder of Zeus Power, Zeus Power is changing the way facilities add EV charging! We discussed optimizing building installations for EV fleets, the sales cycle in the public sector compared to the private, retrofits, EV infrastructure development policy and more!

https://carbotnic.com/zeuspower

Download Podcast Here: https://plinkhq.com/i/1518148418

Remember, If you want to support the podcast please rate and review 5 stars on  Apple, Thanks so much! 

James

The unedited podcast transcript is below

James McWalter

Hello today we’re speaking with Jules Brenner co-founder at Zeus Power Welcome with podcast, great to start. Could you tell us a little bit about a Zeus Power?

Jules Brenner

Ah, show you how many James. Yeah, absolutely so Zeus Power creates energy solutions for the modern industrial real estate facility. We focus on first creating electric vehicle charging products for the trucks and the fleets that house. Their vehicles in those facilities and really focusing on that next wave of energy where the predominant load of the building is the electric vehicle charging systems.

James McWalter

And so you’re saying those kind of industrial type type buildings. Are we talking about? you know like an Amazon warehouse. Are we talking about? you know a supermarket that might have trucks kind of going in the back something else.

Jules Brenner

Yeah, yeah, it’s definitely more of the Amazon warehouse think ah, it could be a private fleet. It could be a government fleet where they house like city vehicles street sweepers and different vehicles and spec lighting poles all the way to a you know. Ah, kind of a smaller enterprise fleet that has Chevy bolts for their employees. Um, anywhere where you’d have like a fleet and lots of older vehicles as well.

James McWalter

So that makes sense and what drove the initial decision to start Zeus.

Jules Brenner

Yeah, um, it was kind of interesting I was in the industry I was working at a company called exos trucks that was working on the the sales side and we looked a lot at you know installations and deployments of multiple chargers and trucks. And I started just looking at how complex it was to spec out charging systems for a lot of the buildings. You not only had to find excess power in 1 of the buildings but you also had to then go and make sure that the you know the building is really speced and ready for. Lots of chargers at scale and started to think that you know not only are most buildings going to tap out maybe at 5 chargers maximum. But the way that and a lot of the trucking industry procures vehicles is very exponential versus say in like the public charging space. Um, they typically will sit on the sidelines with any new technology whether it’s hydrogen and biofuels et cetera for maybe an extended period of time and then once they like something they tend to ramp pretty quickly with some pretty big orders so really wanted to be able to think about when some of that stuff happens for the. What currently is nascent electric truck industry. How are we going to be able to keep up and you know from there we started doing more research looking into charging systems and came up with the idea of produce.

James McWalter

And you said we there? Um I believe you have a cofounder and would love to hear you know the kind of how you 2 met.

Jules Brenner

Yeah, yeah, absolutely yeah, my co-founder Austin Hunt we actually grew up like 10 minutes down the road from each other in Brooklyn New York we went to high school together went to college together in college we created a school’s first baha racing team basically building. A team to put together a du buggy for school competition from scratch raise money from the school and built the team over course about six months of a team still has stood stay but Austin and I really like working with each other and after you know college we. Separated for a bit. He stayed in the northeast you worked at a few different companies some startups all the way from doing kind of powerpoint product to commercialization. You worked at some aerospace companies and had internships at Spacex and a variety of other. Prominent aerospace firms and um, you know he kind of is the more technical side of everything even though we both have mechanical engineering degrees and his focus is very much on electro mechanical solutions.

James McWalter

And and so you know you had obviously this amazing kind of basis of a long-term relationship with each other but you know we we all have people we grew up with but we don’t always necessarily want to start companies with them in my own case I Even at one point started a company. My brother I wouldn’t say that was the the most successful thing but you know definitely the person I know best in the world and so these things have you know pros and cons how how were you kind of communicating with each other to say Okay, actually we want to start something together.

Jules Brenner

Yeah, it was interesting. Um I think Austin was um, getting to a point of his life where he wanted to get in really early into something he was working at a company that was more like series b stage but he was there through some of the early fundraising rounds and. Think we just kept in touch and when I started to you know census kind of desires to to branch out almost on his own I was kind of thinking about you know, a lot of the growth in the electric truck industry and was managed to to kind of convince him over a course of a few months to come join on. So. I think it worked that well he certainly has a lot of skills that are complementary to mine and I think we create a a very moral round the team.

James McWalter

And absolutely I I think like the you know the the founder fish for this space is like super strong which you two as as a founding team and I guess then so you know you had this idea coming out of your experience at exos trucks. You know you have cofounder with ah. Technical abilities that you have this kind of long-term relationship building things together. Um, and so I know you’re kind of currently working on. You know, designing and and kind of going through some iteration on the Mvp could you speak to what that process is like today.

Jules Brenner

Yeah, absolutely so you know we really wanted to focus first and foremost on a strong kind of customer fit before even getting too far along with the Mvp you know this is probably the fourth or fifth hardware startup that I’ve personally.

Jules Brenner

Either either joined early or in this case co-founded and we’ve seen this mistake over and over again. Austin certainly seen it in his engineering experience. So when we started doing that we first figured out like who could be our initial first customers and started taking a very. Kind of collaborative team approach with them like we have some government fleet managers that will very likely be that first early deployments and we try to speak to them every you know for few weeks as we do this and literally show them everything we have and get inputs as we go through and think of it as we’re custom making them a solution. And setting Kpis for it as we go as well. So that’s been really important and helpful in our in our general goal and you know putting together the Mvp. We really wanted to focus on what’s the you know literally the minimal viable product for um. You know this? So we we focused on a more toned down version of the commercialized solution in terms of both cost and functionality with the thought that the key features that kind of alleviate the largest pain points would be focused on first. And um, you know Austin’s built a team on his side of various professionals in the charging sector power electronics, mechanical design etc. Um to make sure that this is a robust product that is really geared towards the um commercial mission critical flut applications.

James McWalter

And so those design partners that sounds like are kind of running or have ownership of governmental fleets. How did you find those and and get them to agree to chash. You know every few weeks.

Jules Brenner

Yeah, yes, so those? um, those government ah customers like um was actually fairly easy. We really didn’t spend too much time frankly, most of the relationships that I had from my time in industry were with private f athletes and we called the ones on you pretty early on and you know learned a lot. But. Government fleets have been very progressive with um electrification and just clean energy on their yards. Um, you know we pretty much went found a ah list on some of the local agencies of the fleet managers reached out and and started conversations. A lot of the government mandates are really really soon versus private fleets and they’re ordering like you know we were literally ons site with ah a government fleet yesterday and you know it’s pretty bad I mean they were telling us how there is ah 1 of their fleet yards is actually housed in an old. It was a horse barn and the it’s It’s so old that you can see two truth marks on some of the walls from the old horses. But the infrastructure is very weak and I think that’s why they’re most receptive to this kind of stuff.

James McWalter

Yeah, and whenever I kind of talk to people who are starting founding startups and they’re like oh you know I really struggle to find people to help you know, give feedback on the product and it’s like if you can’t find design partners to even talk to you now like you might not be painful enough a problem and so I think it’s like so. You know it’s it’s great to hear that how easy it is because if you find people who are just like loving jumping on a phone call with you to talk about the scale of the problem then there’s definitely something to be solved here. There’s definitely you know a potential solution that you know that smart startup folks can kind of work on and so okay, so the. You have these you know design partners you’re talking to on a regular basis. Amazing. You’re getting you know, physically on site seeing seeing horse barns and and other kind of issues. Um I guess from here like what’s the kind of next mostones in terms of getting you know some sort of Mvp to service those type of customers right.

Jules Brenner

Yeah, absolutely so we are currently in the pretty much supply chain kind of ordering phase of our Mvp. So. It’s designed. We’re focused on ordering parts as the parts come in. We’ll begin to assemble. And then you know at that point start to firm up the exact details of where we want this thing to go first and you know and this kind of stuff should happen pretty quickly next maybe 3 to six months or so and you know to whatever extent possible. We’re also focused on. Really, you know we refining in a lot of the um you know products core like software features so we have ah a sauce kind of very basic software layer that we initially and have for the fleets and dialing that in and then you know we take the data from that pilot or the course of. Subsequent 3 to the six months and feed that back so that we can have a better pilot number 2 as more of a kind of focus on the key features that we need to succeed and then over time as we build the. And these case studies if you will. We can then start to take it to larger and larger customers even like the landlords of some of the private fleets themselves that have you know been more proactive and want to install chargers maybe earlier when the vehicles are on site.

James McWalter

And just so I can fully understand like the use case. Let’s say I’m like 1 of your target customers and everything goes well the the kind of current direction. You know as you’re kind of going through these pilots and the development of the technology all goes well for me, let’s say I want to be onboarded as your customer you know in 6 to 18 months. Um, what would that experience be like and both through the onboarding and then once everything is set up like how would I guess my life change and for the positive.

Jules Brenner

Yeah, absolutely yeah, so you know a few things so I’ll maybe talk to you about the experience. We heard about yesterday with ah that government fleet manager now. Um you know this gentleman he is very you know aware of some of the challenges of just. You know, installing more than even 1 charger in his facility. That’s pretty much where he taps out and you know for their experience if you know they didn’t use ah a Zeus unit. They would literally have to redo their whole electrical room as he was telling us yesterday and and modernize everything and then also pretty much tear up a bunch of concrete on their yard to to get. You know some solutions in that you know they might not eventually scale. You know they’ll install 5 chargers. But then once the the building taps out and they need more later down the line they have to redo it so it’s kind of a messy experience but you know with Zeus it’s very much like just the typical installation of a charger. You know we help you with like. Permitting process to you know start the the application you know once all of it’s approved. You know we’re working through the surveying where this thing is going to sit how it’s function once the unit arrives the site. It’s installed by certified electrician and then after that we help tune in the. Le management software to the vehicles that you have which is just a simple onboarding process and I would definitely say that you know it’s a um, it’s it’s a much kind of cleaner installation because you’re going to save on and only the cost. But most importantly, the time and headache.

Jules Brenner

Of all the other electrical system upgrades which tend to take the whole charging installation process from being maybe six months to you know a year plus

James McWalter

And that that makes sense and the and I guess why? Why do these things take so long. Um, you know is it you mentioned permitting is that like a large component that’s kind of outside the control of both your customers and yourselves is it. Getting the components is it something else like what? what are the reasons for why this is such a kind of long process relative to you know? um, like ah for example, if if you wanted to ah like yeah build ah build a you know an outbuilding as part of an industrial park. You know you could probably do that in a few months right relative to this which which takes ah quite a.

Jules Brenner

Yeah, so so there’s a few things to consider so you know the first thing is that the amount of power that chargers in general are pulling is multiples more than what a building is rated for you know one statistic I can give you about 50

James McWalter

But longer.

Jules Brenner

Tesla supercharr type stations that would basically be for kind of semi truck level draw as much power as a whole empire state building peak load and it’s it’s quite a bit of ask for a yeah old 1920 s you know horse barw.

James McWalter

Right.

Jules Brenner

Right? So You know if you think about kind of what you need to do just from the electrical equipment perspective. That’s not only a big kind of logistical mess. But it’s also a huge capital capital planning allocation that a utility needs to take on plus. Actually all you know applying and installing all the different components transformer substation upgrades et Cetera Um, those things really add a lot of time permitting isn’t too bad I mean it depends on the State. Some are more backloggged than others but it’s kind of you know everyone really has to go through it. It just doesn’t. Um, I just get elongated.. It’s pretty substantially once other equipment gets in often. The thing that happens is that you you tend to really run into what we used to see at Exos which is that you would go down the kind of sales chain. You would get a happy fleet. Everyone would. You know, be working towards the goal of an installation of a certain amount of units and then you know once they start talking with their landlords about you know whether or not who pays for what that turns into like a whole lengthy negotiation and further ads time. So It’s It’s a really big hassle versus if you just install the unit that had. What you need built into it and that thing was as movable as a charger unit will get and just needed to do permanent. Not everything else.

James McWalter

And that definitely makes sense and so I guess then you know know this is obviously very kind of early days but 1 of the kind of challenges that some hardware startups have is you know is this something that I’m selling the hardware and you know it’s not offgraded very often. And I just have a single point of sale with a customer versus things where you have hardware kind of connected to other solutions services software and so on or there something more like a kind of long-term relationship with the customer. It is a long-term revenue stream. How are you thinking in these early days about kind of. The potential monetization of zoos.

Jules Brenner

Yeah, good question I think that’s ah in general, it’s a tough issue for a lot of hardware companies hardware tends to be a much lower margin you know sale and then adding that into you needing a lot of sales time to get it done a more highly technical sale and usually rank day sale. Doesn’t tend to a very cash flow and positive business and you know we’ve thought about that a lot we really didn’t want to end up in this situation where it was tough to scale and then also we didn’t like what we saw in the industry about having this kind of you versus mean type attitude towards a customer. You know we’ve talked to. Ah, variety of different fleets and in general just like talked huge hotel chains that have installed will take thousands of charge points and they would kind of complain that you know the more units that they put out the higher their saas fees grow but the you know their value isn’t increasing anyway, it’s just similar kind of cost tacking on and on for. Essentially charger and energy dashboards. So you know, kind of thinking about that. We really wanted to be able to create a set of products and kind of revenue streams that better align interests. So we have you know our typical revenue from the oem charger sale. So the margins on there are pretty in line. What what? a typical oe yeah would sell their unit for that 40 to 50% gross and then from there you know once we are installed in the building we use this kind of hardware aspect as essentially a moat right? to not have our software. Um, you know, switched out like what might end up happening to some of the other charter oems and you know we encourage the stickiness that the customer there and then we work on the 2 software layers so we have a kind of software layer that’s focused directly on our customer which is in most cases, the Landlord. Sometimes the fleets on their building so they are technically the servers that customer as well. But essentially that software package just focuses on using the batteries that are in the Zeus unit as a literally an energy storage unit for the time that the vehicles are not charging. If you think about a lot of fleets vehicles are actually not using them throughout the day that often is much more so that the battery is sitting around and you can use it all the different benefits that already exist in energy storage today including peak shaving to help you save on utility bills um resiliency to give you. Ah, peace of mind knowing that there is power on sight at all times in some bit capacity especially when you go all electric and then also create random streams to things like wholesal where how sound markets where you’re essentially by low sell high with some of the energy and you know we create our kind of higher.

Jules Brenner

Grow A margin revenue stream from that package. Um and really just try to focus on being more of like a partner with our landlord where we yes we charge for that software. But we also make sure that that creates value to them so that it isn’t just the of and our money. Kind sort Sas fees are growing and I don’t know what extra I’m getting every time it happens kind of thing and then towards the fleets themselves. It’s just the standard fleet management software so they have all your data and you know again know the software side. It’s typically higher gross margins as well.

James McWalter

Yeah, on the kind of bouncing the pricing incentive piece I think is really key. Um, you know you generated their bulk discounts for a reason right? at the enterprise level unless you’re getting some big value ads right? And so. Maybe there’s elements of compliance. Maybe you know there are these other kind of buckets that people can add to an enterprise plan but you definitely if you’re just kind of linearly going up in cost. You’re eventually going to have pushback from enterprises where it’s like why am I getting charged you know per unit. You know 10000? Yeah and I’m buying 10000 units and a smaller company is basically getting a better deal for because they have fewer units and and but our period of price is the same. So I think definitely kind of taking into that concern into account um is is going to be quite powerful as you were kind of looking to kind of differentiate down the road the other piece as you’re took on chatting there. So. Think I’ve mentioned the podcast before that one of the ideas that I explored in the past for startup for myself was some sort of pure software solution that enabled yeah the better. Um, kind of monetization of distributed energy assets specifically batteries but others as well. You know how could you kind of aggregate batteries. That are already connected to grid and somehow in a way that kind of plays with wholesale energy markets and I was talking to a few folks about this at the time the thing we kept coming back to was how how can we make sure that we continue to have access to those physical assets because what would stop you know the owners and. Of the batteries themselves are not the owners of batteries. But the manufacturers of the batteries themselves from having their own software layer sitting on top of those and because they own the physical asset in the value chain. They seem to have yeah the ability to block out other software that’s trying to reach down into the physical asset and so I guess. You have a kind of similar kind of thought process around why the but owning the physical asset and the development of physical asset is so important.

Jules Brenner

Yeah,, that’s that’s ah, that’s a very good point. Yeah I think owning the um you know, physical asset allows you to be better protected. Um you know or or other from the from the oems lens like from Missou lens allows you to be better protected. In a world where there are just a lot of different software platforms that help manage charging systems. Potentially even battery systems. There’s a variety of laws coming out with compliance at Ocp for charging Systems. So I Really see that if you are just a pure like software play In. Kind of control Hardware. You might have a really tough time growing. Um I’ve been in that space before and I’ve just seen it. It’s ah it’s a pretty like tough equation sometimes to manage in terms of customer acquisition cost versus you know what people are willing to pay and to that point earlier about like the the both pricing on Enterprise. The funny thing is the way that the incentives are aligned in the industry right now like we had so many customers that are really just telling us I wish I was paying 0 and you know they honestly mean it like they are to a point where they are just about to ask the charger oems to just shut off their software. Let them use it as what they call a dumb charger.

Jules Brenner

Um, so if something doesn’t change there I mean I don’t know that they’ll get around it but they are certainly feeling like they’re being forced. So um, you know, thinking about like you know how do we ourselves like you know, bring in a battery on site that is you know essentially. Ah, smaller version of what you might get like from an energy storage application and something that we purchase direct so we have full control over how that is used but we are you know, not being very like closed off about this kind of like very Aes or instead trying to be open with the customer and saying. You know now that you have this asset on site. Let’s work together to get the maximum monetization the ah roi on it and roi is a big word. It can mean just the insurance resiliency which doesn’t have an immediate cash number but you know helps out if there is a problem.

James McWalter

Yeah, so.

Jules Brenner

Um, but I think that’s really important you have to look at this industry much more through the lens of property technology than you do automotive technology if you’re going to stand out in you know 2022 and frankly, be profitable.

James McWalter

Um, and you mentioned the the kind of customer segments at the beginning that you’re mostly targeted on is more of the public sector and they seem to be the those who are you know have the greatest need are moving the fastest and I guess like my intuition would be that That’s generally. Not really the Case. So If you’re trying to sell to public entities. The sales cycles can be quite long often. It could be hard to get to the right decision maker and so on whereas you know more typical corporate clients tend to move faster. But obviously if they’re very big corporates. Those can also move quite slowly. Um. I Guess how how are you thinking about that kind of sales cycle aspect and why is this industry or this particular segment so different compared to the typical you know public sector moves very slowly model.

Jules Brenner

Yeah, yeah, good good questions. So you know a few things you know when we think about like who is the ideal customer that buys today I mean the ideal customer is going to be someone that is either the landlord or the feet of an industrial facility that is older and has less capacity. Right? And that could you know that could vary the older the building the more likely they are going to tap out. Maybe even at that first charter and if that’s the case as soon as they go to do some sort of utility study could even be with ah another charger company. They’re going to find out pretty quickly that. Need to do something and when they start pricing out what it costs to do you know all the station upgrades and the building upgrades then they get turned off to the idea sometimes so those those um parties tend to move a bit faster in general but when it comes to government agencies. It’s actually interesting because with. Fleets. They’re not that hard to find um you know they’re mostly the the information’s online and very minimal effort. Um I used to sell to private fleets and I’ll just tell you it’s frankly, been harder um with private fleets than with ah government fleets. Um, government fleets. Also they look at it a lot more through an esg lens than a like fleet manager at a private fleet. Usually the board of a company of a private fleet maybe has some esu mandates. But by the time it hits the fleet managers deaths. They really don’t care that much. So. Um, that’s a big part of it government agencies also usually find themselves with a lot more cash towards this stuff. So while maybe the sales cycles can be slower. They actually have more spending power and they actually have to spend it so you know there’s always some politician that comes out with some new. Idea for how they can clean up the roads and usually gets implemented. You know in fairly short order. Um, but sometimes you’re right, you know it can take a little bit of time the approach that we have always recommended to people is to say you know think about your yard. Not in the lens of you electrified 3 out of 50 vehicles think about it in more the lens of what would happen if you electrified whatever your goal is let’s say 30 out of 50 and maybe the other ones are bioiesel or hydrogen or something or cng. Um, what would the. You know, equipment needed look like what would the cost of your utility bill. Be call your utility try to figure it out and look at it from that lens and then ask them the other important question which is what’s the timing on all this and we would talk to a lot of utilities and you know they would tell us this kind of jokingly where fleets would call them and say I need.

Jules Brenner

All the existing power in this location and I need it in a few months and a lot of them would you know they just kind of say no we get give a few years so when you know some of that stuff you tend to move much faster and and I do think that a lot of the government agencies are a bit closer to their utilities and. Thereby it moves a little more smoothly but um, a lot of them do have you know lots of vehicles on order I mean we were with one yesterday and you know they have like I think they said 15 ford e lightnings and you know so street sweepers and all sorts of stuff coming in at the end of this year going into the end of next year we slow that down a little bit in terms of supply chain. But those vehicles are coming and with the permitting process and even you start to think all that through you’re about right there in terms of when you want to start procuring these things.

James McWalter

Mostly we’ve been kind of talking about retrofits you know the the horse barns of the world and and that kind of thing. Um, but how do you think about like new builds you know would real estate developers generally be. You know, potentially interesting segment to focus on in the future as they’re thinking about New New Bill commercial and industrial um to make sure that they have the right charging infrastructure from the beginning. Um, and before thinking about where you know the heavy automotive industry is going.

Jules Brenner

Yeah, yeah, absolutely yeah, the um, you know we definitely recommend with early builds that you you know you plan twice and you try to also you know, future proof to whatever extent possible. Um I can’t tell you how many different companies I used to talk to that would basically take advantage of every single rebate and grant at a point in time, especially those like really big franchise hotel chains and find themselves in the situation where they. You know install chargers of different brands some that are wi-fi connected. Some are not and then at some point they start to realize we should probably start to really standardize the asset and figure out 1 central place to track them and find themselves then in a position where. You know it gets kind of messy. So I think it’s really important to think about a standardized process for your facilities somewhat early I understand that most will probably not go to 1 technology in total. But definitely you know, keep the batch to a very small limited amount. And you know to whatever extent, you do have the ability to install early from fresh concrete. Um, you’re going to keep your total cost down. Um, but more importantly, you’ll be able to plan for things like footprint right? You don’t want to stick chargers in the front of parking spots and have vehicles have to park. You know three feet from the curb. You also want to be thinking about to whatever step possible how you can use the um, the battery systems to better. You know manage the building. It’s it’s kind of interesting like if you think about the way a lot of like the let’s say office park charges are installed. They’ll be closer to the building and they’ll also be thinner profile chargers just because closer the building means less electrical cost thinner profile because you don’t want to cover up the whole building to a point where you can’t see chargers if you start thinking about like batteries as part of that. Um, you know if you don’t plan electrical lines early. You don’t want to find yourself in a position where batteries start to take up a big part of your front facade as well too. So early planning is really really important and it’s also cheaper.

James McWalter

And then you know thinking kind of on about broader spectrum. The changes at the policy level and so we had the federal infrastructure bill that passed last year. There were multiple billions of dollars set aside for ev infrastructure development. Um, it’s still I guess a little bit unclear to me about the exact kind of deployment structure of that money. But how do you think about either the existing incentives like what was passed last year or things that could potentially kind of emerge in the future and about how that affects how you’re approaching. You know the deployment of your early product.

Jules Brenner

Yeah, yeah, good question I think the um you know it’s It’s very exciting to see that amount of dollars flow in from the federal level I think you know most even you know. Cities now are are adopting their own programs and spending their own money but the federal level should create a lot of opportunities for us to you know, not only find just on government website opportunities for bid. But most importantly, I think what it’s doing is it’s bringing into the light um a lot of grid issues. This kind of chooses electrical infrastructure. Um, and as you start to think more about that you start to really start to weigh whether you want equipment upgrades that maybe give you more capacity but still force the utility to work hard to produce lotss of energy or whether you want the um you know battery systems. Part of the equation that should make it easier for the utilities to generate energy and store them in the batteries prior to use. But I do think that the you know Overall the federal will has been a um, a strong sign for acceleration in the industry and it’s certainly kind of woken up a lot of the fleets to. Um, the opportunity of taking advantage of incentives now a lot of them. You know they maybe were thinking of going electric but they were going to stall closer until the um you know date mandates and now with the money coming out over a limited time here. They.

Jules Brenner

Um, accelerated a lot of their plans.

James McWalter

And then thinking about the team and and kind of as you were kind of building out the team and the company culture over the next few years you know one of the things I found in myself is every kind of new venture thing you know company that I start. The culture is often a either. Ah, reflection in some way of kind of my my past experiences at other organizations or other companies that I’ve involved in so either I’m embracing certain aspects of those other companies and trying to you know, incorporate those in what I’m working on now or I’m kind of reacting against them and saying okay you know that that company was great, but. Had this particular part of their culture or part of what it was to work there that I just absolutely do not want to have at my new company. Um, you know for yourself having you know, worked at a few companies worked at companies that have you know also been part of the kind of ev and electrification space. What are the kind of elements that you’re like okay. These are the things that I really want to bring in and and then still is the culture of ah you know of Zeus versus other areas where it’s like I absolutely do not want to bring those into this new company.

Jules Brenner

So yeah, that’s um, good. Good question. Well I think ah you know a few things some of my past roles and companies I think we’ve worked on some you know products that were kind of similar like some proptex some electroomechanical hardware and I think with those you typically. You know you’ll need your engineering team of course. Um, but most importantly, a lot of those companies they had strong like mission driven values and I think you know with trucking it’s a um, you know in general fleets and all that they they are a small portion of a total transportation. Pi but they are disproportionate part of the actual emissions side. So I think having a culture of people focused on you know, alignment on decarbonization is something that’s important to us. Um, but also a culture focused on strong engineering and. You know, active conversations with customers early is is key as well too. Um I’ve been in companies where you know we’ve cut corners and early stage engineer and design and I think that has certainly come to haunt us later and I think when you’re making a you know a missioncritical product. Like a charging system or energy system for a charge for a vehicle application. You want to do it right? You don’t want a call from a fleet you know someday telling you that they can’t um, operate that day because the chargers are out or something like that which is unfortunately becoming an all too common issue. And the um public charging sector these days. So I think you know those are really important I think really also focusing on you know, a very kind of systematic approach to the growth is is vital to we don’t want to make a product just for. Sake of it so we’ve really focused on identifying customers of pain points today instead of just adding out and looking at the broader market of who will certainly feel this pain in a year or 2 and we want to make sure you know that also really ends up being a kind of. Ah, right? recipe of culture and Zeus.

James McWalter

I yeah I love that um and I think it’s great that you’re already kind of being so kind of thoughtful about those elements as you kind of build out the company. Um Jules Brenner  I’ve really enjoyed the conversation.

Thank you Jules Brenner  has great.

Jules Brenner

Yeah, absolutely appreciate you having me James take care now.

Hydrogen Mass Transit – E96

Great to chat with Rainer Küngas, CTO at Stargate Hydrogen. Stargate Hydrogen delivers turn-key solutions for electrolysis plants and hydrogen trains! We discussed retrofitting freight locomotives, zero-emission hydrogen, hydrogen production by electrolysis, Estonia as the European Silicon Valley and more!

https://carbotnic.com/stargatehydrogen

Download Podcast Here: https://plinkhq.com/i/1518148418

Remember, If you want to support the podcast please rate and review 5 stars on  Apple, Thanks so much! 

James

The unedited podcast transcript is below

James McWalter

Hello today we’re speaking with Rainer Küngas CTO at Stargate Hydrogen Welcome to podcast Rainer. Great to start. Could you tell us a little bit about stargate hydrogen.

Rainer Küngas

Thank you so much for having me.

Rainer Küngas

Yes, we’re a company about 1 year old and we are focusing on 2 main aspects of hydrogen technology on 1 hand we are developing 0 emission hydrogen-based locomotives. Um, and at the same time we’re also developing and and establishing hydrogen production systems based on electrolysis. So how to make green hydrogen with the help of electricity and and water.

James McWalter

And what drove the initial decision. You know a year. Maybe a little bit further ah long ago to start Stargate.

Rainer Küngas

Um, yeah, so I um, kind of have been working in the hydrogen space for about half my life. So what’s that 1520 years and and you can really see that there is momentum in this field at the moment. There’s a lot of you know things happening the countries are coming up with their plans for how to get to net zero how to establish more and more electrical electrolysis capacity and so on so it was really this momentum that. That drove us to establish stargate hydrogen and um particularly we we saw these 2 areas where there was where where we so where we saw that we have something unique to offer so in the case of locomotives. Ah, we could see that this that this market of of you know, true zero emission locomotives was about to pick up and and there was a clear demand from the from the market side. Or more solutions like that and and on the electrolysis part we were. We had this idea to develop a new class of electroizers. Um, which is where we what we’re now doing and. And getting closer to commercialization.

James McWalter

That’s super interesting. It’s just on that first use case so locomotives what is the kind of current status quo of locomotives trains in terms of the type of energy use and I guess water are the kind of advantages of Hydrogen versus the status quo.

Rainer Küngas

Yes, so the um, the majority of of locomotives today run on diesel essentially you have 2 technologies competing at the moment. It’s either. You know, um, electric locomotive is powered by catonary lines. So the overhead lines. Or you have diesel locomotives and in the us it’s actually almost exclusively diesel locomotives. There’s almost no electrified rail in in the us at all. Um, and it’s ah it’s a it’s a. Huge market in the in the us alone. There are 25000 class one locomotives operating and most of them are quite old. The average age is about 30 years in Europe it’s actually forty years that the average age of a locomotive is so you can imagine how much they emit not just co 2 But also you know, partic emissions Nos and so on um, and and and. To to kind of but in the future you know, like ah as countries have this target to go towards net zero then all areas of the economy need to decarbonize including the really hard to decarbonize sectors like like rail transport or heavy heavy transport. In general. So um, and and rail is you know the typical lifetime of a locomotive is perhaps you know if average age is 3040 years then it’s maybe 50 years so um so it’s if we want to get to net zero byte. Ah, twenty fifty then we need to do something without locomotives already today. Um.

James McWalter

Yeah, that’s that’s that’s interesting. So I guess and to take those kind of 2 competing ah kind of technologies as they exist today. So you mentioned you know basically electrify locomotives electrify trains and you have these overhead wires again much more common in Europe.

James McWalter

And and Asia then you see in the United States and then you know for the audience if you you know picture the old west you picture these steam locomotives with steam you know with with smoke coming out the top from the coal. Um, you know we’ve obviously moved on from that but we’re still using diesel which is very kind of dirty and polluting fuel I guess why? why. You know because my understanding is that the electrification is like you know that kind of next evolution of the diesel locomotive historically um, before you know the reasoning around hydrogen became kind of more compelling I guess why? not you know, try to push to you know to decarbonize locomotives into. Ah, electrification rather than through something like hydrogen. You know what are the other kind of pros and cons of hydrogen relative to electrification.

Rainer Küngas

That’s a really good question because um, many countries in Europe for example, are actually pushing electrification really hard this just means a really huge investments like capital investments. In in the rail tracks. So we’re talking about an average I think between 2 and $3000000 per per kiloometer of of track electrified. So you know if you want to do. Even in in a small country like Estonia. You know we have a thousand kilometers of of railways that needs to be electrified and it it all boils down to how how often do you use or how heavily these rail roads are being used if it’s used. Really intensively the electrification using overheadlines makes a lot of sense but you know even in countries like Germany then which you know we have really extensive railway networks and both you know. Also a lot of them electrified then the level of electrification is only 50% of the overall um you know overall track kilometers so you have these always. We’ll have these railroad track sections which are used less than the main lines. And it’s on those lines where where hydrogen is the most logical option because because you can kind of envision it as doing wireless electric electrification. You replace the the diesel engine on the locomotive. With ah with ah a fuel cell and then that will provide electricity that you use to run your your diesel locomotive traction engines. Okay.

James McWalter

And yeah I guess when I think about electrification of Rail One of the big you know blockers for it is basically local opposition to having the overhead wires and so you’re seeing.

James McWalter

You know and I’ve used the word nimbia in the past on the podcast but people ah you know ordinary people generally you know I’m I’m not not saying that these are bad people or anything but people who don’t want to see certain types of infrastructure in their backyard near near their homes. All those kind of things but things have to be built somewhere right? and so you you constantly have this kind of. Clash between um, building certain types of infrastructure versus local opposition and I guess one of the interesting things about going with hydrogen is the the tracks have already been built. You don’t have to change that rather you’re changing the vehicle on the tracks I think that is definitely compelling in a lot of cases. Um, I definitely would also like see us send up more than nimbyism and and then then push back on ah the the you know the kind of the push well pushback on the pushback of the objections to some of this kind of infrastructure build out. Um, but I definitely see that as an argument where you have particularly strong and trenched interests that will. Basically just not allow. Um you to build the electrification that might be needed in particular you know Geographic area.

Rainer Küngas

Yeah, so maybe it’s to comment on this then one of the applications of hydrogen locomotives that we see as like maybe the you know some one of the first applications is the use of um. Locomotives in railyards these are these um locomotives are typically referred to as shunting locomotives in Europe or switcher locomotives in in the us so these are the locomotives that kind of assemble and disassemble. Ah, the. Wagons or cargo or the you know the um the the large trains and then it’s another type of locomotive called mainliners. Then that that then transport these long trains over a long distance. But um, those switch are locomotives they’re typically you know. Oldest and most polluting ones that you have in your locomotive fleet because maybe you don’t can’t rely on them anymore to to operate on ah you know and on a um, long distance track? Um, but you want to have them in the railard where. Easier to maintain them or service them and and you know at the same time these rail yards are often located in urban areas where air pollution is you know a big problem so to replace those switcher locomotives. Is a really a low hanging fruit in terms of you know you you both get your benefits of cleaner air in urban areas and you also take some of them. You know the most oldest and the most unreliable locomotives off the rails.

James McWalter

That that makes a ton of sense and then I guess this other kind of use case the electrolysis itself. What is that kind of current process today and I guess what are the kind of innovations. You’re kind of working on bringing to market in that space. Yeah.

Rainer Küngas

Yes, um, so there are in general um 3 different kinds of electrolysis technologies. There’s the one called alkaline electrolysis. There’s the one called. Um, pem or polymer electrolyte membrane electrolysis and then there’s high temperature electrolysis. Um, we at stargate are focusing on the very first one. The one called alkaline and and if you zoom in through that type of electrolysis more then you’ll see that this. And again kind of has 2 different kinds of technologies in there 1 is based on precious metals. We’re talking about you know, not even silver or or gold but more like platinum iridium ruthenium really the rarest elements that you can find on earth. Um, the the kind of interesting thing is that this these elements give you unfortunately the the best activity and the you know the highest current densities and the the best performance but but sourcing. And availability is really an issue I I made this back of then will calculation that if you took the entire global production of iridium for 1 year and only used it for electronizers then you could install one Gigawatt ahualizers per year I mean this is a lot compared to how much we produce today but to put it in the in a perspective then the european union alone wants to install between. 40 and sixty Gigawatts of electizers by the year twenty thirty so even if we used all of the world’s iridium and only used that to make electronizers then there simply wouldn’t be enough of those rare metals available. So so we need an alternatives and there is an alternative and this is typically nickel based electronizers. You know you have much less of an issue with raw material availability. But unfortunately also these electizers have much lower performance. Lower current densities lower efficiencies and what we then want to do at stargate is to develop a third class of alkaline electroizers 1 ne’s based on ceramic active materials and um, ah it has been.

Rainer Küngas

Shown in the lab that that these ah electroizers are just as active as the precious metals ones. But at the same time you don’t have these raw material availability issues. So it kind of combines The best of both Worlds and this is the technology that we want to scale up and commercialize.

James McWalter

That makes sense and and just for the audience who I know we come in deeply talking about electricalizers but electroalizers are basically just a technology to separate water into the 2 component elements of water which is hydrogen and oxygen and so that’s why it’s you know so so important to the hydrogen industry and. Guess then in that kind of third that third piece so you know looking at your background. You know you’ve worked on different types of you know ceramics and have you know have a very strong kind of academic career as well as commercial career career working on these kind of technologies. Um I guess what? what is the you know. What is the state of play with that technology today. Um, you know? are you some the lab are there kind of initial pilots happening of the the technology around electrolysis. Yeah.

Rainer Küngas

Yeah, so um, so yeah as you rightly pointed out. Electrolysis is really like a key technology if you want to be able to kind of decouple the production of fuels like hydrogen and but also later on some synthetic fuels. From co 2 emissions. So if you use green electricity for producing hydrogen then and and you use electricity electrolysis for that then then then this is a way to produce fuels without co 2 emissions. So this is why we’re doing this and why why. Green hydrogen is so high on the agenda um with coming coming to your question then we are at the moment busy working in the lab developing the first materials and the first electrodes that we will that we will test and then. Gradually increased the the size of the systems so that we can get to commercially relevant sizes quickly. But at the same time. Um, so we don’t want to be be like ah you know a 2 academic of ah of a company. So if you. If a customer comes to us and wants to buy an allegizer already today then we offer that as well. It’s just that if you then at some point want to upgrade the existing electroizer stack with with the with the new one that we’re developing then then. That is certainly an option.

James McWalter

Understood and in in terms of like electro like electroalizers you have you have the underlying kind of chemistry that enables you know that that conversion right? like whatever that kind of internal catalyst is whether there’s rare or metals as you discussed. Um.

James McWalter

You know, Nickla or ah ceramic kind of approach. You’re taking but the other kind of major input is electricity itself so you need some energy to to cause that ah that reaction to occur and you know historically ah that energy has come from dirty sources and and you mentioned the importance of using green sources for this.

Rainer Küngas

Yes.

James McWalter

I Guess how much of a bottleneck is ubiquitous green energy to the scaling up of hydrone electrolysis for the types of use cases. We’re talking about you know where would we need to see you know? Ah, do we basically do we have enough solar and wind and and Hydra right now or a nuclear as well to actually? ah. You know meet the demand of potential Hydrogen applications or do we have to build ton more.

Rainer Küngas

Here again I would just want to start from a bit further and then get to your Aor E So like ah to put things in perspective then if you if you today if you take natural gas and convert that into hydrogen.

Rainer Küngas

Using the normal process of steam methane reforming and then you know you have some emissions actually about ten Kilos of co 2 per every kilo of of hydrogen that you produce so we’re talking about really sizable. AhCO 2 emissions if you then just you know either burn that hydrogen or if you use that hydrogen in ah in a fuel cell for example to power a fuel cell locomotive. Then if you kind of Zoom out and look at the overall emissions then you have produced actually more co 2 emissions in this process then if you just had burned this natural gas in the in a gas engine instead. Um, and so you know this is this kind of hydrogen produced from natural gas is called grey hydrogen. Then you have the ah hydrogen produced from electrolysis and if you use a really dirty electricity to power your electronizer then again you you may actually be much worse than if you just you know burn the fossil fuel. Be it. The. Oil or or coal or whatever in them in an engine somehow itself. So. It’s really only if you have green electricity available that that electrolysis starts to make sense and. Green hydrogen starts to make sense so it is it is like really really important that that there is enough of green electricity available and it’s certainly not trivial actually. Ah. In to fulfill these these goals that the the european union for example, has taken. It requires really massive installation of new renewable energy capacity. So you know gigawatts and gigawats of. Of of solar and wind. It’s it’s certainly an issue and I truly hope that the that the rate at which solar and wind get installed in really all across the world and like. Takes up in the in the in the next years

James McWalter

Absolutely as we all do have I think for the people who can listen to this podcast and then if if I think about like the other potentially use cases for hydrogen. Um, you know some of the ones that either we’ve talked to people in the past on the podcast or I’ve come across recently with my own company. So 1 is long duration storage right? So we one of these issues with the grid where the um, yeah, the renewables that we’re adding more and more of they’re intermittent. You know the sun does not shine and nice as is is very commonly so spoke about and the wind obviously doesn’t always blow.

James McWalter

And also certain times a year yeah the sun shines more right in Summer. So can you capture more of that energy at the moment and deploy it on the bridge when it’s more needed in the evenings and so on the big problem right now is that most of our storage technologies are either dirty or battery based which have a 4 to 8 hour max kind of timeframe for their use case. From a kind of economic point of view hydrogen is seen as this kind of more more akin to something like natural gas because you can basically you know produce it in the summer let’s say store it in tanks and then burn it off as a form of energy in the winter as an example, um, so that’s kind of 1 1 example, another example is around. Other types of vehicle locomotion not not locomotives but things like heavy heavy trucks. Even we’re starting to see some startups kind of explore things like aviation with hydrogen and then and shipping as well as another big one. Did you kind of think through these other use cases and I guess.

James McWalter

Why were locomotives and like I guess like the electrovisor itself is like more of a kind of enabling technology but in terms of like end use case Technologies I Guess why were locomotives more interesting relative is some of these other options.

Rainer Küngas

Ah, yeah, just to comment first on the the first part of your question. So um, hydrogen storage I think makes sense but you need to have some really like good conditions for it. So for example, storing hydrogen is just. In in high pressure tanks I think is unless there’s a real breakthrough in hydrogen storage technologies. It’s quite challenging I would rather like typically you would like you would do that like seasonal storage if you have some like. Geographic geologically favorable area where you can pump hydrogen and under the ground like in a salt cavern several hundred meters underneath the the ground ah where you can be sure that the hydrogen doesn’t get get out doesn’t leak. Um. And and and where you have these you know the volumes available where where long-term storage makes sense but to to store hydrogen on like in um, on the ground hydrogen tanks. That would be large enough for seasonal storage this I’m I’m not seeing at the moment these kind of projects materializing I think that the the cost of storing hydrogen is simply too high. Ah, on the other hand if you do something with hydrogen like green hydrogen is the first step in the production of you know all sorts of green chemicals. Be it methanol you know, synthetic natural gas also synthetic. You know. Liquid fuels like synthetic diesel and so on. So if you combine green hydrogen production with ah with some synthesis like that also ammonia forgot to mention so these kind of fuels are much much more easy to to store over. Long time and as a matter of fact, you can use the existing infrastructure right? You know synthetic natural gas you can pump it into an existing natural gas pipeline synthetic diesel you can blend that with ah with ah you know regular diesel. so that ah so that you yeah it might much more easier to store and at at lower pressures as well. Um, so this is this is where I see the world going I think that.

Rainer Küngas

If you need to store things over a long time or even transport hydrogen over a longer distance then you would convert it first to something hydrogen derivatives like they’re called um and then perhaps even convert it back to hydrogen when you need to use it. But.

James McWalter

So then I guess so I understand the kind of look the locomotive kind of case would then the production of Hydrogen be ah co-located with the the train yard in order to have remove some of that storage issue that you mentioned.

Rainer Küngas

Ah, yes, ideally you would have hydrogen production and and like ah hydrogen refueling station in the railway Hubs so that so that. The the locomotives and and Passenger trains can come there for for refueing and the like it. You don’t really need to have you know huge solar parks or or wind the farms. At these locations. So It’s ah it’s actually quite quite doable.

James McWalter

And and so and then those other kind of use cases. Um in the transportation. Space. So You know have a machinery aviation shipping and so on. Um I Guess how do they compare in the in the kind of framework that you kind of mentioned in terms of like. What when a good use cases and as I’m really kind of enjoying getting into the details of this because I think whenever we see Emergent Hot New Technologies right? Obviously Hydrogen production’s been around a very long time. But.

26:44.82

James McWalter

Um, you know it’s definitely something that ah is is top of mind for a lot of policymakers. A lot of industry people industry and across the sort of Landscape. It’s like okay maybe it’s a silver bullet bullet for every use case right? whereas we have to be I think you know, really clearly look at the technology and say okay, this really makes sense in certain use cases and and maybe less than others. And so yeah, So how do you think? and then when you apply that framework to these other forms of transportation. Why Hydrogen may be a good or less good choice for those and.

Rainer Küngas

Yes, um I think it’s It’s a like a good way to look at it. This would be perhaps to like try try to think of it like as ah as a spectrum of Applications. So we’re on 1 Ah, edge of the spectrum you have these really like low energy applications. Like for example, you know electric bikes Scooters Passenger cars. Um in in that kind of corner of the spectrum I think that battery technology is doing really well. And um I I Don’t think that we are going to see like ah hydrogen powered bicycles taking over the world in the future. But um.

James McWalter

Right.

Rainer Küngas

And then then then you have kind of this ah middle part of the spectrum where you have you know you have locomotives you have ah coaches that. Operate between cities. You know that essentially need to be driving all the time and you cannot afford to have it plugged in you know after you, you take the bus from New York to to Philly where I also lived and. And then they they plug in the the bus after after that trip for for several hours before you can make the return trip. So I mean this just simply doesn’t work so in these applications hydrogen has a clear edge over battery um technology. Um. And then in the far end of the spectrum you then have you know oil tankers real big cargo ships. Ah passenger long haul aircraft and so on where where even the energy density of hydrogen.

Rainer Küngas

Not enough and there you’re going to need green synthetic fuels like synthetic jet fuel synthetic diesel perhaps green ammonia for the shipping industry but but there also you have green highrogen is the first kind of step. In in making those those fields so this is at least how I see the world.

James McWalter

Sure, yeah, no absolutely that that all makes sense and I guess then kind of returning to kind ofs star gate. What are the kind of goals over the next. Let’s say 6 to twelve months some milestones that you’re hoping to reach. Yeah.

Rainer Küngas

So we are really busy designing our first locomotive prototype and so I would very much like to to present the you know the the first. Working prototype of our hydrogen locomotive in in that timef frameme on the um on the electricalizer and development. Um, we want to get to First. Ah. Lab scale results that that we can share with the world and also that we that we can start testing our our technology together with some partners. So. Really talking about proof of concept in in kind of both business lines at the moment but and maybe as a third point kind of that unifies those 2 things is which simply want to grow as a company. We. Moment were about twelve fifteen people I think that by the end of the year will will probably be around um double that or maybe even more than that.

James McWalter

And and I guess the in terms of like the the early team. Um, who who who’s kind of involved in that. Um, how did you meet those people like you know how do you kind of build out the relationships with the you know the early founders early team mates and and oh. How you kind of all got to know each other and decide like this is the thing that you want to work on together.

Rainer Küngas

Um, so Estonia is like this at least we consider ourselves like this the world of or like ah in in a way the Silicon Valley of Europe I know some.

Rainer Küngas

Like at least this is how we think of ourselves. There’s quite a lot of ah nice companies that have come out of Estonia to maybe to name a few then like an early success of Estonia was Skype. That’s maybe not so ah, you know relevant anymore. But at the moment.

Rainer Küngas

Um they’re also some really nice companies and and so it’s it’s this kind of startup scene that has also been active in in in helping to establish stargate. So one of our founders for example is. Is a real pioneer in the field of super capacitors and and another one of our initial investors is the main investor in a. And the largest renewable energy producer in Estonia so it it just was a really good combination kind of combining the knowledge from the renewable energy field and and this understanding of how to scale up new technology. So. Really kept slicing on on this.

James McWalter

Why is Estonia ah better at startups than a lot of Europe and you know I’ve mentioned the podcast before in Ireland we do not do a good job at startups you know and a lot of that is on cultural elements right? You know we we live a good time. We are very you know, friendly people. But we’re also. So more critical of the success of others I think it’s fair to say and so that definitely um, you know, basically the idea of bragging about like your startup and say I just started this something I mean there’s no quicker way to get made fun of in Ireland than than saying something like that. So I guess how do you think about? yeah, are there cultural elements or even you know policy elements that have made Estonia that kind of. Center of so much startup activity and.

Rainer Küngas

I think it’s maybe difficult to pinpoint like 1 specific thing but there has been really a lot of support from the government side on the on like Estonian ii sector. So. Have done some I think nice things there like for example, this initiative of e residency that you can be a resident of Estonia without you know, physically having to be here and kind of getting the perks of being an european union citizen and ah, um. And this I think kind of helps to spur the Estoian startup kind of scene but by now it has really moved into you know the scope is much broader than just I see so you know green tech also um. Like medicine and health technologies. But yeah, I’m not so easy to say exactly what is the reason.

James McWalter

And and you mentioned the and that that kind of innovation that’s happening in Sonia and not just in etonia but kind of around the world like where are the areass though that we’re not seeing enough innovation. You know if somebody was like oh I might want to start a company that’s tackling some big problem. Um, particularly in the climate space where are there areas that like. More smart people should be focused on in your opinion. Um that we just don’t have enough you know startups being formed ideas being you know, attempted to turn into business that kind of thing.

Rainer Küngas

Um, there are some areas which may sound boring and I mean so ah, for example.

James McWalter

No such thing in startup world. Ah.

Rainer Küngas

It’s like 1 really important topic for for renewable energy and also like green hydrogen in general is everything that relates to standards and guarantees of origin and you know things like that. How do you make sure that if you actually produce green hydrogen that you know. That you can also sell the green hydrogen that is considered as green hydrogen and that the same time that you cannot sell it somehow twice that you sell it to 1 person and then you also sell it to another person or under company and how do you make sure. For example that the that the. If you use and if you buy a green electricity that it is also actually green. Not just you know, ah that 1 at 1 moment in time somebody produced green electricity. But what you’re getting ah through the lines is actually electricity from coal. It’s um, to me at least it’s an incredibly incredibly boring topic but it but it and and and really ah you know heavy on on on the like legal aspects and ah.

James McWalter

Business.

Rainer Küngas

But it’s extremely necessary without this then actually there will be no massive scale adoption of of Green Hydrogen technologies.

James McWalter

Yeah there’s ah this guy saw griffiz you might have come across him. He wrote a book about kind of electrifying. Ah yeah, the economy in the Us. But you know he’s got this line that yeah even lawyers have a role in in the kind of green future right? like navigating these these kind of different waters. Um. We’re absolutely you know essential and a company kind of agree with that. You know I think wherever there is a yeah I guess I have a think about like how to like the kind of modern technology that started in the late 90 s you know was very much driven by software sliding in to ah. Kind of new use cases right? You know the emergence of things that had never existed before like social network and so on Google etc and over the last like decade we’ve really seen you know software just starting to eat more and more into very old industries like change how they work how they operate all those kind of things and. That is basically just started right? like I come across. Um, you know my own startup like everyday like industries that are using. Um, basically you know pre-exel models from like 1988 to run things like the electricity grid and so on and nobody.

James McWalter

Like literally at the company knows how to how to fix it if it breaks like it just doesn’t even exist anymore and and we just have these things all the way down the way and so I think like you know my message is always just start talking to people in these industries and they will just start describing the status quo and I think people who are coming from a technology mindset will be so much shocked in a positive way that like oh these are massive opportunities.

James McWalter

To try to improve on great. Um, so ranar it was. It was great chat and before we finish off is there anything I should have asked you about but did not.

Rainer Küngas

I Completely agree with this.

Rainer Küngas

Um, yeah, maybe when would the you know 1 be able to see a first stargate locomotive running. And yeah, the us. Yeah because ah.

James McWalter

So yes, yeah, I’m very excited. What’s the timeline for this? yeah.

Rainer Küngas

The the interesting thing with our prototype locomotive is that we’re actually converting an american origin locomotive like ah through some well kind of an interesting story then in a Stonia. We. Almost exclusively use american general electric locomotives. Um whereas all the countries around us are using either. You know european or or russian technology and but and this is kind of. Going to be our entry ticket into the and into the us market. So our idea is that once we have have built the prototype. Um, then we will also get it certified on the us market and and and bring it bring it there. So so because there’s actually you know hundreds. If not thousands of of similar locomotives in the us just waiting to be retrofitted with with our technology.

James McWalter

Yeah, it’s that’s super exciting and I’m looking forward to that to that news. Ah Reiner. Thank you so much.

Rainer Küngas

Thank you.

Monitoring Electrical Assets – E95

Great to chat with Priya Vijayakumar  Co-founder and CEO at WattIQ! WattIQ connects thousands of unconnected electrical assets, enabling better utilization and energy usage of any electrical device! We discussed silent energy consumption assets, the ups and downs when starting a company, how to build customer trust, the issues with manufactured obsolescence and more! 

If interested in speaking to WattIQ, please email info@wattiq.io

https://carbotnic.com/wattiq

Download Podcast Here: https://plinkhq.com/i/1518148418

Remember, If you want to support the podcast please rate and review 5 stars on  Apple, Thanks so much! 

James

The unedited podcast transcript is below

James McWalter

Hello today speaking with Priya Vijayakumar cofounder and Ceo at WattIQ, welcome to the podcast Priya great to start. Could you tell us a little bit about what iqueue.

Priya Vijayakumar

Thank you James lovely to be here.

Priya Vijayakumar

Sure So You know we formed what Iq with this mission to enable enterprises to be to become more um asset efficient and energy Efficient. We live in a world that were very resource intensive. Many industries are very resource intensive. And we believe it’s sort of the lack of data into understanding how your existing assets are utilized. Their condition. Their energy Consumption. You know, sort of their overall management throughou throughout the entire life cycle those inefficiencies. Obviously combined with sort of an over-consumption model that’s driven many industries right? I think that’s created tremendous inefficiencies in businesses as well as just the burden on our resources right? and we think by closing those data gaps I think we can. Transition to a far more efficient industry.

James McWalter

And I guess when did you first kind of start encountering those data gaps and thinking that oh this might be something. That’s so a potential startup right.

Priya Vijayakumar

Yeah, well actually you know I started my career in traditional manufacturing like aerospace right? So which is you know there are so many data Silos or lack of data even in very traditional industries which is really was. Big driver behind this industrial internet of things right? that was supposed to be sort of this next industrial revolution that was really intended to happen fell a little bit short of expect far short of expectations in many cases. So I think I’ve always seen the inefficiencies that have existed in traditional industries.

James McWalter

Right.

Priya Vijayakumar

Um, but how do you kind of close that chasm that’s existed between Silicon Valley and the industrial world right? So overcoming some technology barriers and I think years ago when I was when I started out in this internet of things space. We did things like asset tracking. You know everyone needed to know.

Priya Vijayakumar

Where their assets were and there was a lot of value behind that. But really the bigger problem that Cisco themselves had valued at two point one trillion dollars of economic value was understanding asset utilization. We couldn’t solve it.

Priya Vijayakumar

And so it was always these elusive use case and I think a few years ago sort of you have this aha moments right? You come across a technology that’s being applied for a different purpose in this case, the technology was being applied for energy monitoring I mean you see smart plugs in the home people were just trying to power off shut up. Shut down equipment when they were not in use but you always have to find the balance between great technology solving a problem and delivering value right? You need that combat you know that perfect storm to happen in order for something to take off and so sorry, go ahead.

Priya Vijayakumar

No, and that’s sort of what brought this along is I think there was this use case at the back of my head that I had not been able to solve in my early days in Iot and it just sort of nagged at me all along and then I came across this technology that that’s what kind of spawned this whole thing. Um, and to take that original technology application and form a new business that could you know go solve these problems that had been elusive.

James McWalter

And so once you kind of were like okay this is a interesting technology to to focus on this particular problem set. What did that kind of first you know step look like was it starting to build an Mvp was it talking to users something else and.

Priya Vijayakumar

Yeah, you know I think I come from a product background right? So My pet peeve has always been building a product without understanding the problem you’re solving and understanding the end user so you can either go down this extreme path of not being able to make a product. Vision until you know every little thing about the end user but it’s usually a good balance right? You have to understand the problem you’re solving find an end early adopter who’s willing and we were fortunate to have one of the leading Pharma companies be an early adopter. They were planning to do a lot of things manually and we’re like.

James McWalter

Fifth. Wreck.

Priya Vijayakumar

I Don’t think you can do this manually I think we need a product for this. So that’s how we began our journey right? So um, and and the way we worked is I think we focus on delivering value to the customer. What is then you know what we people say minimum viable product. But.

James McWalter

Right.

Priya Vijayakumar

How much confidence can you have in solving that problem. You know you want to try and solve it at least 70% of the way because your product is evolving so it gives users the confidence. Yep, you’re 70 % of the way here to solve my problem and you’re going to keep building the rest of it right? because if you aim. I think um as our cto likes to say perfection is the enemy of good right? So if you aim for perfection on your and Mvp. You will never get to mature your product and our product matured tremendously because we’re able to get it to a point we could deliver value to the customer and.

Priya Vijayakumar

You know you don’t want to do a half -baked product either. That’s really important because you’ll frustrate the customer. But then we worked very rapidly to continue to evolve the product and even expand our solution offerings just within like the first eighteen months of want you and so that I think. Being obsessed with delivering value to the customer is what helped us evolve our product really quickly along with like an amazing team behind it that makes the magic happen.

James McWalter

Yeah, no absolutely and and in in that kind of iterative. You know as you were kind of iterating on the product were there any you know, kind of I guess pivots along the way as you’re kind of working through those different product iterations.

Priya Vijayakumar

Yeah I can tell you I mean we started the company by acquiring sort of the technology from a company called Ibis Networks right who were using this technology to monitor and shut off equipment. The first evolution was how do we do this remotely. And fortunately that happened just before the beginning of the pandemic because a lot of hardware solutions especially in the enterprise you end up having to go on site to do deployments is a complexity around that and we knew we knew we had to create a consumer like simplicity still meet all the enterprise.

Priya Vijayakumar

You know, security reliability requirements but still I mean the end user experience has to be very consumer like our first It’s not a pivot. The first evolution I would say is we had to go and make this incredibly simple for the end user. The second was we actually had to go build. Software to now build out all these algorithms because all we had was power data before I mean collecting data is a first important point so having a stable system that can collect the data to enable you to do machine learning. That’s a second piece right? The first piece was to make sure that we could collect the data. Um, with completeness. Yeah that’s how we began and then we rapidly expanded our solutions. You know we started out just trying to give insights into how equipment is used then we started expanding to additional sensors and now we could tell you the health of your freezer. You know this freezer looks like it’s going to fail. Um, so kind of starting to get into equipment condition monitoring and that came because we worked closely with customers. We tested concepts and they would tell us why are you guys not offering this in the marketplace even in a very crowded marketplace right? So I think that was really important you focus on delivering value to the customer.

.

Priya Vijayakumar

And keep up with evolving your product then it just kind of takes a natural path from there right? as opposed to building a product and throwing it over the wall and selling a widget.

James McWalter

Yeah, absolutely there’s there’s a framework that I can’t remember who came up with it. But basically if you describe the current method of solving a problem and have that user rank it. Yeah between 1 and 10 and they may say something like this is like a 3 out of 10 you don’t need a 10 out of 10 to actually solve that you. Basically you need to be 3 subjective units better and the classic one is you know getting a cab a taxicabb is like a 3 out of 10 experience and an uber is like a 6 or 7 out of 10. It’s not a perfect experience by any means but still that was enough to kind of have this kind of booming company.

Priya Vijayakumar

Yeah, oh who right? right.

James McWalter

And I think like that that’s a lesson that it sounds like you guys kind of ingrained as part of that process.

Priya Vijayakumar

It It is and you know the product development is a very imperfect process right? I think the mistake a lot of early stage startups do make is they get too far removed from the customer too early because they’re selling through a channel. For example. So They lose visibility to how the end user is actually using the product particularly when you have a hardware component and that can make or break how you grow your business right? Um, and so we find that to be really important for us to stay close to the customers. And make sure we understand how they’re using the product how we can continue I mean some of this is very intuitive when you live in a purely software world right? Everyone’s like oh I know how many times somebody has used a feature. It’s not so obvious in an Enterprise world where there’s also a hardware component involved. Ah because there are a whole set of new challenges.

James McWalter

Absolutely and you mentioned this like data collection piece and I think it’s something a lot of startups who focus on the enterprise struggle with is the data collection right? And in previous companies I’ve involved in you know you go the the company’s very excited like oh this is a great product and then it’s like we’ll spend six months trying to.

Priya Vijayakumar

Yeah.

James McWalter

Navigate the company’s yeah, internal you know rules to be able to get some sort of data that we can actually do something with um I Guess how how do you kind of have that approach you know and and any kind of insights along the way.

Priya Vijayakumar

What who who? yep. All right, you’re gonna let me share my secret source now. Okay, so so the first thing is like I said I’ll take a simple example, you know when people talk about predictive monitoring and you know I worked in aircraft engines where you could put.

James McWalter

Ah, ask nicely? yeah.

Priya Vijayakumar

Every sensor you can imagine on an aircraft engine right? and people collected tons of information. They missed the most basic point if you don’t build that engine straight and round it’s going to fail pretty quickly in the field right? So what is the data that you can get with minimal friction for the customers. So we started by making sure that we didn’t touch any proprietary data. We solved this problem by staying off customers wi-fi networks not touching proprietary data to enable us to deliver that first level of value once you do that. Then it gets easier to now say can I go have all your historical data on this right? because if I can’t demonstrate value until I’ve collected six months of data. That’s the fastest way to stop a sales cycle. So and when we started this we didn’t um, start out because we knew. Sea level and all these big enterprise companies who were just going to give us a free pass right? It didn’t happen. We had to do this purely on delivering value to the end customer. So. It’s a much bigger challenge when you don’t have somebody just opening a door for you. You know whether it’s a channel partner or whether it’s you know. Somebody higher up in the organization and that forces you to be innovative right? because you go how can I deliver value to the customer with minimal friction and once you do that then they get I mean customers now ask us to get propriety data from the equipment and so it’s a different conversation right? once once you’ve. Established value and built trust then you can expand into more complex solutions that classically would be much harder to sell as an initial solution.

James McWalter

Yeah I love that you know one of the things having had that experience if we’re trying to get data out of different enterprises. Um, yeah to very much focus on what are other sources get creative as you say there might be public sources. There might be ah you know various Apis that you can kind of plug into.

Priya Vijayakumar

Um, will.

James McWalter

And honestly, what a lot of problems. You know, especially large enterprises when people are reliant on you know 30 year old Erp systems and excel like ah the ability to just pull some stuff together often will solve a problem. Not again for the whole organization like eventually you need these very complicated deployments.

Priya Vijayakumar

Over.

James McWalter

But in the early days as you said you know you can actually find that little that little kind of wedge really solve it well and then and then you’re basically just building trust in the organization as you kind of kind of move through it. Um I guess like you look at. But.

Priya Vijayakumar

And we made it very I was gonna say make but made it very simple for customers to experience the technology we would use cellular Modems to send data to the cloud right? So we don’t even need to get on your network and that way customers got to experience their data and and I know it’s not always possible with.

Priya Vijayakumar

Every type of solution. But these are things that we did differently instead of saying and we would do it as a free pilot for some of our larger customers right? because we felt confident in the value that we were going to deliver and that also makes it easier for the businesses to justify making these deep. Investments in it security reviews and so on because you know that is an investment The company’s making and so it’s It’s a you know it’s a partnership right? anytime you are a startup working with large enterprises. It’s a partnership you have to be committed to. Delivering on what you say you’re going to deliver right? And you’re you’re building a long term Relationship. You’re not making a transactional sale.

James McWalter

And no absolutely um, and yeah, right and like any large relationship has to be built on trust right? and and and kind of go set that kind of core element I guess in terms of like where what iqueue is today. Let’s say I you know listen to this podcast I be like oh this is something that would be great for my for my organization.

James McWalter

What are the kind of steps to kind of get get somebody set up with your product.

14:01.67

Priya Vijayakumar

It’s actually very simple right? typically somebody would reach out to us and we would look at sort of the types of equipment. We focus on the use cases I should backtrack a little bit. We have multiple use cases that we support with the data everything from optimizing throughput. Ah, you know analytical labs to driving procurement decisions or service contract decisions and all the way to space planning right? when you have lots of electrical equipment. So we always start with what’s the use case. That’s most pressing for the customer our european customers space is a big deal. Energy is a big deal. Right? So the priorities can shift depending on who the customer is and we start with that then figure out the right assets that we should put on an initial pilot or an initial program for them to get the data because we might support 9 different use cases. But for that customer. There might be 2 on that list. That’s most. You know, critical today.

James McWalter

You know when would a you know customer start seeing that kind of early value get and get very kind of excited about. That kind of yeah the problem being solved in that particular way.

Priya Vijayakumar

I jokingly and affectionately tell our customers in thirty days if we can’t show you value. Dinner is on me I haven’t paid for dinner yet. So and that’s because I think here’s another important thing. Um, you know we do use machine learning. But.

James McWalter

Yeah, sure. Yeah.

Priya Vijayakumar

Um, without disclosing too much. We use machine learning models that let us give us insight within seeing equipment kind of being active within a couple of weeks right which is another important piece. We’re not telling customers wait six months before you can start seeing inside. So while nobody’s necessarily going to make a business. Vision based on thirty days of data they start seeing the trends of oh somebody’s actually not using this or I can see that this piece of equipment is demonstrating a lot of anomalies. You know that we thought there was something happening here and with every single customer within the. 30 irty days we have shown them something that goes I had no idea this was happening um and that is important right in technology adoption. There’s no consumer product today that we buy that we don’t have a reaction within the first fifteen minutes of using that product even less. But in enterprises, it’s sort of taken for granted like oh you just have to live with a crappy product for six months and just power through it and I think that and that can change I think we can have take philosophies from consumer product development and apply it to the enterprise world to create a whole different experience.

James McWalter

Yeah, absolutely that the kind of consumerization of ah of I t right? like that that phrase around our consumerization of the enterprise. It’s something. Yeah, younger listeners might think everything you you know, looks like slack or something similar, but these are all very new, very emergent and um, you know.

Priya Vijayakumar

Um, urges none.

Priya Vijayakumar

What.

James McWalter

Using some of these ah very old school windows 95 things at the beginning of my career those are still being used and many many companies like kind of across the world and you know as I kind of looked at at your website you know and there’s this mentioned of the you know the key element of the smart plug and how that kind of interacts as you know.

Priya Vijayakumar

Who.

James McWalter

Basically the the conduits to this information and and all those kind of things as you’re kind of deploying those and and starting to pull in that data and you’re seeing that thirty days data and then eventually the six months data. What are the I guess have it the customers been very surprised by some of the insights is there. You know, particular insights that. You know you don’t maybe find that as surprising right now but the customers typically do yeah.

Priya Vijayakumar

So obviously the first one is they might have theories about how frequently equipment is used and they tend to be sort of blown away when they realize it’s not even in the 10% range. You know there are weeks that something is not used. We’ve sometimes done deployments where that equipment that we’re monitoring is not even turned on during that entire period right? So that’s you know that’s from a utilization perspective I think people have been shocked from an energy perspective when you take things like minus eighty freezers right? which everyone heard about for storing vaccines.

James McWalter

Yeah.

Priya Vijayakumar

Some of these freezers consume more upwards of 30% of excess energy as they age because they’re not always maintained properly right? and they’re just sort of blown away by the energy consumption. You know a new freezer with certain equipment oems. There’s also a big difference between equipment. And oems that data was not always visible people. Sold you on a datasheet not actual field data right? Very few people sell you on field data and so what they would see is some equipment oems models were consuming two and a half x what the datasheet was claiming to do.

Priya Vijayakumar

In other cases you could have a minus eighty freezer that’s only consuming Eight Kilowatts Kilowatt hours per day and another one that’s consuming you know upwards of 20 even though comparable models. So. I think having that data you know because there are certain pieces of equipment. You can’t turn off like a freezer you can’t turn it off but knowing that you’re using those assets efficiently or maintaining it properly has huge energy implications right? and space utilization implications. So I think usually those and we always.

Priya Vijayakumar

You know when you put some of the aging freezeers. It always makes her an interesting story in terms of how recovery to set point temperatures are happening and so that’s sort of how the some of the initial astonishment comes because they’ve had a hunch about some of these things but they’re still amazed at how much opportunity there is to. Share equipment right? The kind of the shared asset economy and and and and know a lot of our customers are in in Pharma Life Sciences Biotech so they’re very data driven and so to be able to see the data behind this makes for a much easier conversation than What I would call like an emotional procurement decision I have budget I don’t want to lose it. But I really don’t understand the implications of buying a product that now has to be housed in an area with very demanding hvac requirements people are going to be coming on site to maintain that piece of equipment.

Priya Vijayakumar

Need reagents or consumables to maintain that equipment. So there’s a whole cascading carbon impact throughout its lifecycle that most people don’t even think about right? We as consumers. Don’t even think about it because we just we consume.

James McWalter

Right? Absolutely and even thinking of about the example of the piece of equipment that wasn’t turned on in thirty days and I’m sure some you know some facilities operations managers like do we need a second one you know and and that that could potentially be bought as as well.

Priya Vijayakumar

Please.

Priya Vijayakumar

Right? Oh the ability to go ahead now I’s in the ability to sell a lot of this equipment right? So you would never buy a car that you didn’t know the mileage on the car imagine trying to resell equipment saying well trust us this was used by a big pharma that doesn’t mean anything.

James McWalter

Ah I think it got good none of no.

Priya Vijayakumar

Right? So you can actually extend the life of a lot of these products by providing what I call like a lab fax inside right? This is how it was maintained. This is a mileage on it and that could really go a long way for somebody buying it as ah, um as an after market or you know.

2

James McWalter

Yeah, and absolutely and as you’re talking there i’ kind of thinking through like what does a company see today when they don’t have what likeq and basically the only signal I get is the energy bill or some related something where there’s no granularity and it’s like oh energy bill seems to be going up or.

Priya Vijayakumar

Product.

James McWalter

Energy bill is like fluctuating in a weird way but there is thousands potentially millions of inputs into energy bill. Especially if you large facility that that’s manufacturing you know vaccines or or various pharmaceuticals and so on and being able to actually get to the ground your level of like oh.

James McWalter

Most of the increase is accounted for by these 3 freezers in the corner. Um, because we just didn’t maintain them or whatever it may be um I think that is ah yeah I think a lot of the problems around inefficiency are often. You have a fairly opaque process. And transparreency is often brought in as a way to kind of just for sake of doing it but it nearly always just makes our dramatically increases efficiency because like oh actually we were just like kind of stumbling Along. We didn’t really know what we’re doing and then all of a sudden. It’s like okay now we have some very very clear action items that we have if we want to. You know hit the bottom line in a positive way.

Priya Vijayakumar

And and it’s sort of shocking right? because in the manufacturing world data has been so critical to improving processes in manufacturing right? It’s it’s just inherent in good manufacturing. It’s not the case outside of manufacturing right? We people do capital expenditures. They buy. How do you justify today. Let’s even take an office space somebody comes and says I need a new printer. How do you justify you? You don’t know it’s just you’re relying on the person saying yep we need it and we’re going to believe you that you need it now multiply that. By hundreds of millions to billions of dollars that these industries are spending and these industries are growing very rapidly so they also need new space. So yeah, if you if I mean our data shows us we could probably take 20 to 30% of equipment.

Priya Vijayakumar

Away and nobody is going to cry. You know this is not a scarcity mode. This is this is what cracks us up because we’re trained to have this scarcity mode if you take things away but there’s just so much waste in our system right? Whether it’s food whether it’s fast fashion. There’s just tremendous waste in the overall system.

Priya Vijayakumar

And so when you take a lot of this away. You don’t really as long as you have the data to get to what you need. There is no scarcity right? and I think some companies are better than others are doing it. But as you know when lots of money floods into a certain industry.. There is no consideration I think there’s a lot of emphasis. Now being placed because of the lots of conversations happening around climate change and definitely some of the companies are leading the space in not just buying their way out through carbon credits. You know, actually taking meaningful action. Um.

James McWalter

You you like you’re you’re still admitting guys. You actually have to do something.

Priya Vijayakumar

Yeah, and and so I I think the changes are starting to happen and but part of it is. We’re also fueling industries whose business models are built on overconsumption right? So I’m a big believer in a product as a service model. Our job is not to sell more plugs. Right? So if we want to increase value. We better figure out another big problem to solve for the customer if our model was just to sell more hardware. We would figure out how to obsolete the hardware that we’ve sold to you in eighteen months which is what happens in a lot of industries right? Whether it’s infusion pumps.

Priya Vijayakumar

It’s not like infusion pump technology in Hospitals has like gone through some dramatic you know curve like the chip industry but they’re replaced every year you know.

James McWalter

And all the Nobel prize winning infusion cur you know awards we’re giving out right.

Priya Vijayakumar

Right? But yet they’re replaced every twelve months oh because of a software upgrade. What is such a travesty right? So this is where I think you know you need regulation to happen. But you also need industry leaders to change that behavior because yes it doesn’t mean that we don’t we stop. But we can consume more responsibly shift the value proposition from you know, vendors and I always come back to the aircraft engine model in the early days they would give away an aircraft engine and make all their money on off to market right? So they were happy to have.

Priya Vijayakumar

So a ferrari like engine that constantly needed repairs when ge came in with this model of power by the hour well guess what? you don’t want to build ah an engine that needs repairs all the time you want it to stay on wing as long as possible. So it changed design philosophies right. So I think that’s also an industry shift that has to happen but that happens by the end users changing their buying behavior as long as we keep buying whether it’s plastics or whether it’s electronics people keep selling because that’s. What the business model is they’re counting on us to upgrade our product every year

James McWalter

Yeah it’s so interesting. You know we have this manufactured obsolescence. Yeah model across across the board right? and you know people upgrade their phones every you know every couple of years Um, because you know I’ve definitely gone through periods where my phone is like 3 years old and it just yes, it just stops it just. Just can handle things in the same way and like I haven’t changed my use like I’m I’m just doing you know the same 10 boring things on on my phone as I did for last few years. Um, but it does eventually stop. You know we do we definitely on on the positive side are seeing more subscription models kind of coming in. But even just this is slightly different. But even ah, there’s some utilities in the United States who are working toward subscription pricing for their energy bills right? and figuring out through getting lots of data that like okay, let’s just charge somebody $50 a month or $100 a month or whatever it is and they will absorb. Yeah, the spikes and so on that that occur and as we’re seeing with you know. And dramatically ah variant energy bills today you know that model right now I think would be like something that that people would actually love right because it’s kind of like an inflation hedge and so I think as you said like as we are if we can shift business models. You actually start to have these kind of positive feedback loops around. The the wastefulness of the industries that were kind of switching around in the first place.

Priya Vijayakumar

And ultimately you’re going to deliver more value to your end customer right? because you have to understand how your end customers using your product. What’s the difference between a tesla and the early days of the car manufacturers right? remember when you get a. Ah, a warranty notice months after it was issued right? and they have no clue how people were actually using their cars. It was just there was this huge separation between the end user and the people who actually manufactured the cars Tesla knows far more than you want to about how you drive your car right. But you see but then they built a whole different business and industry because of it right? because of that Data. So I think we have it on the flip side. We have a responsibility for using data Correctly, right responsibly. But I think it helps you deliver more value to the customer when you do focus on delivering a. Service as opposed to selling a widget I think it’s a very it’s um, fundamentally a mind shift change within a lot of these big corporations that have historically sold a widget and I think you’ve you’ve probably heard for years right? Everyone’s trying to move up the value stacks. We Want to stop being a. Selling a screwdriver and we want to sell you a smart screwdriver to do what right? So it’s It’s just you have to change your mindset.. It’s not just you make something smart and all of the sudden you’re delivering a service. Um.

James McWalter

Yes.

James McWalter

it yeah, it yeah it has to go back to again being our conversation like you have to solve an actual an actual problem and I guess like in terms of where what iq is today you know where where things and what are the kind of you know next 1 or 2 year goals for for what iq.

Priya Vijayakumar

Problem.

Priya Vijayakumar

I think you know we’ve we started initially kind of heavily focused in research labs right? We are now expanding in Europe I think the insights that we can get obviously the first part is get your foundation right? right? No, he wants to build on top of a crummy foundation. So we.

Priya Vijayakumar

Hunkered down got a foundation right? and we’re now expanding the solution capabilities in the coming and we’ll be announcing some of that in the coming months but right now a lot of growth happening in Europe primarily driven by energy. But I think for the biggest thing for us really at the end of the day is for. Consumers within the enterprise or you know consumers at home to be better educated about what is the carbon lifecycle impact of a procurement choice I’m making so we’re hoping for more transparency from the industry on what the carbon footprint of products they’re making. And feed that into the whole life cycle right? and to really start seeing the needle move in a significant way and that’s really the big thing for us and we’re starting to see that we obviously want to see that at scale. But I and I think there’s lots of opportunity for collaboration in the industry. It’s a huge problem right? I don’t think we need to be the only ones. Working in this space to solve it. So I think it’s a huge problem and it’ll be great to see more emphasis on you know, optimizing our resources. We. We talk about a lot of futuristic things which are also important but we just cannot continue to. Be as wasteful as we’ve historically been It’s just not viable. It doesn’t matter if you have the greatest renewable technology down the road.

James McWalter

Yeah I think what’s one of the really fascinating aspects is how the portfolio of sustainability is shifting in the enterprise especially over the last couple of years right? It used to be the sustainability department was like this little kind of corner. The 3 people.

Priya Vijayakumar

6 walking line.

James McWalter

And when I first started of getting into this space a couple years ago I was talking to some sustainability people actually in the fashion industry and they’re also so lonely they’re just like sitting in corners and I was like there should be like ah kind of like an a group of sustainability fashion folks now. It’s amazing right now there’s like all these organizations and then there’s a lot of collaboration and community happening.

Priya Vijayakumar

Of when.

James McWalter

Um, but even just a couple short years ago. It was like oh just I’m the only 1 working you know, working working at the firm to try to improve things. But now we are definitely shifting into you know, basically right now I think it’s now on the side of the Cfo right? The Cfo now cares about these things in this kind of interesting way and.

Priya Vijayakumar

Name.

James McWalter

You know the Ceo does at larger enterprises in some degree because if Cfo cares the Ceo does to a certain degree but it’s still not like the primary like focus of the Ceo and I think that is the shift over the next decade we’re going to continue to see you know as both the risk and reward are risk and return elements of. These various kind of sustainability and climate impacts happen across these enterprises. It’s just become more and more central to how things are run.

Priya Vijayakumar

And then I I also think sustainability was always There’s always been this approach like oh we’re going to save the planet There’s really no benefit to the business right? And so I think it’s a combination of reframing what your responsibility as a business is. It’s not just to be profitable but also have a societal impact right? So I think that’s 1 thing and and the and the younger generation that’s important to them when they join a company right? that you will have something more meaningful and it’s not just the younger generation to be fair I think there’s a mind shift. Change. That’s happened through ah through multiple generations right? where it’s not purely profit driven as the only metric for a company but I don’t think they have to be mutually exclusive right? So we have great sustainability benefits from delivering our solution but even bigger benefits from an operational efficiency perspective right. So I think there is lots of solutions out there that is a win-win for the business and also meeting your sustainability goals.

James McWalter

Yeah, no absolutely and couldn’t agree more and I guess in in terms of you know for yourself. Um, you know building a company taking a technology that existed and and divert. Yeah moving it into this new direction over the last few years I guess anything that surprised you about you know trying you know, becoming a Ceo leading a company. Ah you know any discoveries you made along the way.

Priya Vijayakumar

Um, you’ll have lots of days where you what we’ll probably be the only the co-founders that the once really only once convinced because you know you’re taking technologies that have existed and to demonstrate that you can deliver value. Sometimes it feels pretty lonely right? until you start getting that momentum which we’re seeing um, but I I think it’s exciting because what makes me get up every day is solving a problem hearing like amazing feedback from customers right? that we’ve solved a problem for them.

James McWalter

Is it.

Priya Vijayakumar

Um, seeing us evolve as a company. We’re a pretty small company. You know, solving some really big problems and so that’s what makes me get up every day is just that conviction that we can do this and and I think as you know for most founders will tell you in the early days ah if unless you’re part of a main bandwagon right? You’re like on the crypto bandwagon. It’s going to be a pretty lonely journey until you start demonstrating that products market fit and traction and so I think that’s probably been the most exciting part for us is that we have the conviction that we could solve these problems and now that’s.

Priya Vijayakumar

Being validated by all some of the large customers adopting large customers who are typically very conservative with tech New Technologies adopting our solution right? and so that’s that’s the most exciting part.

James McWalter

Yeah there’s there’s a big mindset shift from me personally and I’ve heard it from a lot of other kind of entrepreneurs through the podcast about moving from a feeling a know as rejection to curiosity right? where it’s like okay you. Every day as a founder you just especially in the early days just like a no no after no no from customers. No from investors no from potential hires. Just no, no, no, no, no and exactly it’s like I’m just going to hear a lot of dose today and then you know in previous kind of things I’ve worked on I but like oh I’d feel like a little bit I’d put my bit defensive.

Priya Vijayakumar

Yeah, yeah.

Priya Vijayakumar

Ah, it’s like your middle name.

Priya Vijayakumar

Ah, yeah, with.

James McWalter

Have my backup a little bit and be like okay that no is a reflection on me or it’s sort you know and then now it’s much more like oh like I I Absolutely thought that this would be a perfect yeah product for this particular customer and they said no, it’s like why and it’s like it’s so exciting to find out and it’s like.

Priya Vijayakumar

Um, why exactly.

James McWalter

And sometimes it’s it’s ah it’s a really good reason. Sometimes it’s like we just we dont need you know byproducts in January right? that or whatever it may be. You know.

Priya Vijayakumar

Yeah, um I think I always take every no as an opportunity to evolve either your narrative right? or it’s your product and and it’s because at the end. Day when you when you begin this journey as a founder you are the one who believes in what you’re doing right and people mistake investor investment as validation that you have a viable idea that’s complete Crap. There’s lots of like garbage startups that I Wealthf funded like.

James McWalter

Yeah, it’s like youre you you raise a sort of money. It’s like now I have actually have to build a company I.

Priya Vijayakumar

Yeah, exactly So. No I mean I just said to somebody last time I said we wanted to build a viable business. Not just a venture backed business right? That’s different because you have to deliver value in order to build a viable business and have cost structures that can scale. It. Easy to create the illusion of one day I’ll figure out what this business model could be right? So um, and and so it it is a journey.. It’s not and it’s as everyone knows being a founder is a bit of a rollercoaster right? There are these amazing days and then there are Days. You’re like why am I doing this again, but. I Think overall for us. It’s just we have amazing customers. They have been I mean we’re very fortunate. They’re amazing collaborators. They they’re very encouraging. They let us experiment right? and expand our portfolio. So. And that’s very enriching right? because they don’t treat us like a vendor. It really is a collaboration and so I think that’s been a big part of culturally who we are as a business right? We obsess about delivering value to the customer and I think that just naturally comes out in our interactions with customers. And I think the customers have reciprocated even though they’re really big. They’ve been very supportive of us so and that for me is very fulfilling right? and I see the team growing in their capability and I would have moments I’d come back to the team and go I didn’t know we could do that. So ah.

James McWalter

You Yeah that that the pleasant surprise is I like that’s always that I saw you come in here like Wow like I was at home and this happened without me. You know.

Priya Vijayakumar

And they’re like you can’t sell it yet.

Priya Vijayakumar

It is pretty cool. We have an amazing team and I have an amazing co-founder I’m very blessed.

James McWalter

Absolutely well Priya this has been such a great conversation really enjoyed the chat before we finish up is there anything I should have asked you but but do not.

Priya Vijayakumar

I think you’ve been very good about covering sort of the broad spectrum. You know we’re probably excited maybe to highlight that we’re going to be. We’re growing significantly in Europe and so we’re definitely looking for some great channel partners to work with who who. Finally have share similar values in terms of solving the customer’s problems. That’s really important to us. So I think that’s kind of the next exciting phase of our journey and this has been a great conversation as well. So thank you.

James McWalter

Thank Priya and we’ll include some contact information in the show notes have a great yesterday.

Priya Vijayakumar

Thank you you 2

The Future of Energy Delivery – E94

Great to chat with Jason Huang, Founder and TS Conductor, TS Conductor has developed a conductor that outperforms all current transmission & distribution conductors on the market! We discussed improving a 100 years old technology, bottlenecks in the power grid, building a strong company culture and more!

If you would like to contact TS Conductor please email ​info@tsconductor.com

Remember, If you want to support the podcast please rate and review 5 stars on  Apple, Thanks so much! 

James

The unedited podcast transcript is below

James McWalter

Hello today we’re speaking with Jason Huang founder of TSconductor welcome to the podcast Jason! great to start. Could you tell us a little bit about TSconductor?

Jason Huang

James thank you very much for the opportunity.

Jason Huang

TSconductor I would argue it is the best conductor that has been developed in history. It reflects the ultimate combination of best materials that is available today. To be able to conductor in the technology we use the most conductive aluminum type and we also feature a carbon fiber composite that has all the attributes. The industry has been looking for extremely high strengths lowest way possible. And it does not have a so more expansion problem which creates sag when you are able to combine the 2 mature together. You basically have that ultimate combination. What material science offers on top of that. We have a design that is enabling I would call that a breakthrough design we leverage aluminum to protect the carbon composite and we leverage the carbon composite to provide all the strength technical characteristics that protection from the aluminum. That is unique to us that provides guarantee for safety reliability longevity that has been missing in the industry for the past century.

James McWalter

And why and this might be a basic question but why are and conductors so important and.

Jason Huang

Yes, when you think about you know electricity. It’s about electrons we generate electrons from Generation site nowadays. It’s ah um, it’s all about renewboard generation and these are normally in the remote places. Our consumption side which is called Load Center These are the cities you have to move the Electron and that is where you need the pipeline for the Electron that is the conductor that we have power grid the power grid. Ah basically. You have towers you have conductors that are supported by the towers or poles and it’s the Conductor. That’s the ah pipeline for Electrons. You know when you talk about other forms of energy oil and gas you have pipelines when you talk about. Transporting humans and goods you talk about automobiles roads and it’s the same thing you have to move it. That’s why conductor is important and it’s a critical piece of power Grid Power Grid is also the critical piece for our. Energy infrastructure and you could also argue Electricity is the blood or energy is the blood of our economy without that you cannot run.

James McWalter

I go farther I’d say civilization right? We don’t have a lot if without electricity and the way we’ve completely constructed. Um the economy and civilization and in general and I guess like thinking back to the beginning of of Ts conductor. You know what drove the initial decision.

Jason Huang

Um, yeah.

James McWalter

Ah, to kind of go on this path and start this company and.

Jason Huang

Yeah I left my prior employer in 2017 and I had the um I would say the opportunity to acquire this technology. This was invented by someone else who is not. Affiliated with the industry because the technology’s uniqueness actually calls for outsider to be the innovator. It kind of looks to be a little bit impractic or stiff. But when you actually do it. They’ve learned that you could actually make it even more amenable to. What the industry need. So I had the fortune to acquire the technology and I I would say part of the reason is due to my um, my understanding of the industry my understanding of the prior technology which I had the fortune to lead as the. Ceo of the other company and so I know what is missing and I know you know when you see a great solution. You just get excited about it that you jump on it with all your heart and soul and your resources.

James McWalter

Yeah, and absolutely and so was it. You were looking for something better and you kind of came across this this research and development that this other person worked on or did it just kind of.

Jason Huang

That’s what what I have done.

James McWalter

You know you came across their research and were like oh this is like an amazing application of their technology.

Jason Huang

Yeah, yeah, that’s a good question I was aware of it but I was not involved in it and when I had the opportunity to act I basically seized the moment and made a decision to commit myself rest of my. My career and put all of what what I have on the line to to help take that technology forward and with everybody’s help. We can make this technology mainstream and we can make a tremendous difference in climate change or just give you a simple example, the efficiency this technology brings We can potentially cut about half of the greenhouse Gas emission associated with.

James McWalter

Please.

Jason Huang

Composory generation. What is a compository generation. You might ask today based on doe numbers. There is about 8.3% of the electricity that is lost due to resistance heating we call that line loss.

Jason Huang

Because whenever you have a conductor you have resistance and you pass current through it. There is a simple high school physics I square times r which is a resistance heing and that is always there when you have a conductor that has lower resistance which is basically more efficient. You’re gonna be able to cut. On that loss so globally 8.3% of the electricity. That’s generated is lost to line loss and it is about two Thousand Terawatt hours of electricity wasted every year to make up for that loss. You do composatory generation basically means. You generate far more than you need just to make up for that compository generation using today’s ah the power generation mix 30% renewable 70% traditional. We are creating about 1000000000 Ton of greenhouse gas every year every year and if you can improve efficiency by half you are basically cutting out 500000000 ton of greenhouse gas every year

James McWalter

It Yeah,, that’s that’s phenomenal I mean I think there’s this ah phrase within the kind of climate tech community of the your products that have Gigaton impact something that actually can go to that level of scale and then have that level of ah you know effect. On the carbon emissions and so when you’re talking about that level of numbers and because electricity is ubiquitous around the world and we’re just building more right? like the world population is Larger. We’re electrifying more and more of the world and so that Compenseratory energy loss is actually just going to increase on Net unless we have technologies like this to.

Jason Huang

Yeah, and to other data points I think it is not well known out there in the community one is the renewables we have today a lot of these projects whether it’s solar or wind.

James McWalter

You know mitigators.

Jason Huang

90% of them in our country here are not able to be integrated to the power grid because we have bottlenecks in the power grid. The average weight is about 3.5 years and in some other countries. It’s actually even longer. So.

James McWalter

This is.

Jason Huang

If You are able to deep Autoneck The power grid for example with our technology using existing right away in existing structures like the towers and the poles we can bring the capacity to 20250 even 300% of the Baseline capacity. And that’s going to transform how the renewables can be Integrated. You know we’d love to have more support from the community in terms of you know, asking utilities and asking our regulators to give advanced technology like ours. You know a closer look. In terms of faster Adoption. We do work in the industry that is slow and this is why all the support from all the aspects of the society would be very beneficial. Um.

James McWalter

Yeah, no absolutely and I would love to kind of dive into some of those kind of elements of the bottleneck in a moment but I guess coming a little bit back to that. Ah, earlier part of the story. So You yeah you recognize this technology and you’re like okay this this is going to solve this massive problem of. You know energy loss that is occurring on the grid today. What was the process of going from there to basically making it something that is a product that could be actually be deployed and utilized and I guess what were the kind of steps and were there any pivots along the way that.

Jason Huang

Yeah I think there are quite a few one of them is manufacturing one um, manufacturing the industry slow for a reason they expect reliability at any cost we actually put safety in the reliability as.

James McWalter

And.

Jason Huang

1 of the 6 core principles at Ts and in our manufacturing process. We’ve developed x-ray machines that allows you to ensure integrity of the composite material inside the conductor you can argue that every single inch of our conductor get inspected. Ah, nondestructively and we also deploy smart manufacturing in our system you have lot of video monitoring smart monitoring technologies today. The cloud storage is very cheap. We we basically. Ah, create a environment like a restaurant you have open kitchen that people can see through the glass we can provide that to our customers to to give that level of certainty to our customer base. So the safety reliability longevity. Not only you have to design it in. Which is what we have done but also in the manufacturing phase making sure they’re made properly then you can provide that safety reliability longevity performance that is expected by our ah utility customer in the other part I think it’s equally important. It’s often ignored. We have new technology getting adopted that is the user experience. For example, if you have a new product in the field when they’re being put to use like it deployed you have lineman and these people they put their lives on the line. You know they work with your product. Um.

James McWalter

And.

Jason Huang

How readily can they work with your product does it require new tools. new equipment new trainings we purposefully design the product to be compatible with standard way of working for the past century by the way though. The the conductor that is dominating in today’s power grid was invented in 198 so people were in the industry who are used to do things the way it has been for the past entry and if you suddenly change their practice. Require new tools new equipment that’s going to make it little bit more challenging for them to consider and adopt your technology. So we also took care of that part and you don’t get it right? The first time so in the manufacturing process. Um, we being. Doing the manufacturing actually the mentor was evolved since 2016 so this is not like you’re building it from scratch the noctar technology has already been deployed in both distribution circuit as well as in transmission circuit.

Jason Huang

So it’s a proven technology ready to be deployed at all the voltage levels.

James McWalter

And when I hear things like ah you know the the existing conductors that are in the overhead wires that you know the audience walks by every day. Um, probably have a copper basis or something similar and they’ve been basically were invented in the early twentieth century and have not been. You know majorly improved for 100 years what were the main barriers to the innovation in this space because I can definitely see understand how some industries are pretty slow to move. You may have a generation you know a few decades even of ah, kind of stagnation in innovation. But when I hear something like something did not change for 100 years is that because we just didn’t have the material science. Ah you know innovation itself to make changes or was it mostly down to some of these barriers to adoption when you have a very kind of risk versus organization like a local utility. Okay.

Jason Huang

I would say already above and and plus some other factors. Let me see if I can summarize it in a way that your audience can’t understand one is related to the the overriding need for reliability safety.

Jason Huang

You need a product that can provide the assurance of reliability safety longevity and that has not come along I would argue until Ots is is is available and there’s also that element of mature science. Um. What we feature in the ts technology. We have the a Neo aluminum which has the best connectivity that was actually featured in in the 1970 s technology called acss it has the steel technology combined with a need aluminum and steel by the way it is. Ah, you know higher Grace Theore with greater strengths compared to what was used in the nineteen what was developing 198 and that’s a niche product. It is only used for high temperature use typically because they’re little more expensive and then the composite piece. Ah. That you could also argue. It’s becoming a mature technology carbon fiber composite has been around since the 1970 s so it’s also about 50 years so it did take mature science evolution to make what we use in terms of the foundation or technology available today. And a proven technology by the way. Um, and I think the third element had to do with regulations the environment. The utilities are operating for example in today’s regulation um, you know, utilities. We have many you know there’s the western only utilities there are munies and the co-ops. You know there are thousands of them. They’re all regulated either by especially the io the emestinol utility by Ferc or by the state energy commissioners. And there is no mechanism today to Motivate Grid Power grid to improve on efficiency for example and um, you know the utilities are encouraged to make investment.

Jason Huang

And then they’re allowed a coupon rate to basically collect the return on their investment. There is no mechanism to to motivate them to let’s say use a more advanced conductor more efficient cut the loss which will ultimately benefit the ratepayers benefit the environment as well.

Jason Huang

Because you are generating less waste and yet there’s no mechanism for them to retain some of that benefit. Um, and sometimes when you use the more advanced conductor. It’s going to cost you a little bit more in the in the first cost.

But we we actually are able to reduce the overall capex cost but some people don’t look at that way and if you look at the life cycle or cost benefit. It is a total absolute. No-brainer that you should look at a more advanced conductor because they’re more efficient.

Jason Huang

In addition to providing you far more capacity than that you need in today’s environment

James McWalter

Yeah, on the on that capex point I’ve talked to a few folks at yeah various utilities from connnadison pg ah Pg and e and and and so on and um and as part of conversations I was having with potential startups that I might start myself and you know talking about like. What what would it take to sell to utilities and like what are the various elements and 1 person was like no matter what you do try to focus on capex because there’s often not the money for the opex. You know if you want to go in and pitch some sort of nice cool software solution right? because that’s the kind of world I’m more coming from ah rather than the hardware side. It’s like can you make it a capex expenditure on the software in some way because otherwise you might often struggle to actually get funded um by these kind of customers and so I think it’s something that’s quite opaque to to people on the outside just how things like how they spend money how they kind of deal with vendors. Has such a kind of ah artificially constraining um aspect of you know the kind of environment of people trying to sell into these organizations the utilities and so on and so it’s it’s absolutely something that that needs to be revised and and worked on I guess one other element is the regulatory state and so. When we’re dealing with ah things that affect critical infrastructure like the the grid often you have various kind of regulations that govern what can be done in in that case is the regulatory state ready for innovations like what ts has um and how can we improve the speed of regulation when we do have these new step change technologies like. The ts conductors and.

Jason Huang

that’s ah that’s a great question. Um on the regulation side I think even Ferc and the state commissioners. They recognize the massive challenge we face in terms of climate change. Ah, in terms of the need to integrate to facilitate the integration of all the renewable generations in our power grid is how do I put it. It’s it’s old on average in the us the power grid is about transmission grid is about thirty years old you know it’s it’s. It’s into the second half of its design life um to to address that regulation can play I would say enabling role and 1 aspect For example I just talked about. Is the efficiency. You know you you think about automobile department energy has guidelines set in the place may not be mandatory in the beginning that that you you have a kind of ah improved target for fuel economy and that has I would say made a huge difference in terms of How efficient the motors are the cars are I think the same thing can be done related to grid efficiency. We spend far more time and effort to improve only efficiency in our refrigerators microwaves dishwashers and you get insamitized for it but yet. The power grid system itself. We don’t pay attention to the efficiency aspect. Um I would also ask that the utility themselves in the past has always been conservative risk averse you have employees who are really you know. Got a job for life. Um, they don’t necessarily get rewarded for being innovative step out in the box and if you if you do let’s say do things the old way nobody will challenge you or ask you right? And that’s that that.

Jason Huang

That creates an environment to to be risk of worse as well and granted you know power grid need to be reliable need to provide that electricity. You know whenever you need however much you need, but we’re in the twenty first century we need to use twenty first century solutions for our problems instead of relying on ah early twentieth century technology to solve our pressing problems today. So I would really urge our regulatory um agencies. And also I would say environmentalal activist can also play a role and bring awareness to them people by by nature wanting to do good. You know for the community for society for humanity for our environment. Ah, many of the. I think even the regulators and commissioners give them a lot of credit because they face a monumental challenge. Um I think with time they will see it. But it’s going to benefit by creating more awareness of technologies like Ts that is available to deploy. You don’t need breakthrough innovations to make a difference. We can make a difference a huge difference today by having a environment that allows utilities to be a little bit more bold in also to think outside the box in them.

Jason Huang

To kind of force a mechanism that advanced technology are also looked at at least as a option and I could argue that we can reduce capex we can certainly reduce operating expense. Ah let me just give you a specific number when you think about building a new transmission line. Sometimes in in this country. It takes about 8 to 10 years from the planning phase only five percent of the project is spent on conductors 25% is on the structures when you use the right technology like ours. We can hugely impact the structural cost like fewer towers shorter towers. The foundation will be a lot cheaper as well. You have less encroachment of the of the environment and that 5% expenditure in the entire project by the way dictates the throughput.

Jason Huang

Dictates the agency of the line and we should certainly do far more and you know when you talk about leverage that is where the leverage is. That’s where you can spend a little bit more money so that you are impacting the overall project expense and you also have 50 years of line loss saving benefit that is available to you so that’s the kind of thinking process. We should have we should encourage our regulators to consider should encourage our utility operators to consider as well.

James McWalter

Yeah I think there’s a lot of like really fascinating kind of thoughts in there I mean one way I think about risk and risk aversion I guess is that I think we’d want you know people who are running critical infrastructure to be risk averse. But it’s down to the timeline that they’re risk averse on right. If you are if we’re kind of barreling into a you know future of electrifying everything where the grid itself just needs to massively you know, increase in size like moving into a world of just regular brownouts and blackouts is something that we should be very risk averse about right? like and not enabling that. Versus I guess the risk aversion of an individual and an organization like utility or a regulator who might be risk averse about you know, doing everything doing anything new at all, right? and it’s like if you we can lengthen the timeline for that risk aversion where it’s like okay, let’s not have the grid collapse in 4 years or 8 years or 12 years I think then there’s more of an appetite to explore these new technologies because I think what’s definitely I think is now accepted is that the status quo will not work right? like that that I think has that message has been definitely delivered as we’ve seen things like what happened in Texas you know last year as we see you know, um, and and those events are going to. Occur more more often and so it’s like can we get out ahead of those things by um, you know, improving process like that’s number 1 right? improving like the nature of things you mentioned the the interconnection queue taking three and a half years right now. Um I think pgm which for the audience covers Pennsylvania and a few states kind of close to Pennsylvania. Ah, they just announced a change their queue but it’ll take 2 years to like make the change that will actually slightly speed it up and that means you basically just have all this clean energy which is basically funded like the moneys there just sitting on the sidelines just waiting to be deployed and that combination of factors means that we’re just moving way slower. And for once it’s not money. That’s the issue. It’s all these other structural elements that are in place.

Jason Huang

Yeah, um, James I wanted to add 2 points like ah it’s it’s like a myth one is new technology will add more risk. It’s actually the opposite when you look at a technology like ts. We actually help to improve resiliency while you are modernizing your power grid or just give you an example I was in Florida meeting with Fpo and nexttera and they have challenges with hurricane wind becoming more intense and their power grid. Ah, need to be prepared to handle that type of load at the same time you needed more capacity. It’s a paradigm you know you you need more capacity. You’re going to need bigger conductors, a bigger conductor with a stronger way is going to put your towers and infrastructure at greater risk with ts technology. We don’t have to go bigger in size to give you more capacity. We can use the same size conductor give you 2 x capacity and our conductor is compact that minimizes the wind load and our conductor is a low sag so that you can also reduce tension to the you know to the towers to the poles. Ah, when you when you when you install it so that you have less tension to the top so you can actually have have them all without having a compromise the other part I would argue is the myth about okay when you go green there is a green premium you know in some cases that’s true. Ah, with ts you could actually go green and get green. What do I mean by that when you are able to leverage the massive line loss saving benefit and make that available to the rate pairs. Because by and large the rapier are financing the um you know the the power grid expansions or modernizations because they optimally pay for the electricity if the line loss is included in the analysis. They are actually getting a. Better deal out of the investment or they could actually start with a lower capex if they use ts technology in far lower operating expense because you don’t have much of a loss to speak of so you can go green and get green as well. And but you do that with ts technology. You’re also helping the environment and so we you know these? ah myths they need to be demystified. You know for for the for the truth to be known for everyone.

James McWalter

No absolutely and and I think yeah, somewhat whatever what we’re trying to do on on the podcast. But I think in general the anything that touches the electrical grid has been so just the water we swim in as a society for so long that we just don’t really think about it. You know I click a switch the light turns on. You know I had a button my microwave works those things are just such a fundamental element that all the kind of elements that allow that to happen because they’re all being changed because of the nature of moving to intermittent supply and demand as we move to renewables as we electrify more and more of the common world. I think demystifying those elements I think brings about the kind of more rapid change. It brings about you know consumer change it brings around regulatory change brings about utility change and and also the companies that changed and adopt and kind of develop new innovative kind of approaches in order to kind of solve for those different problems. Um, and I guess. You know, thinking about you know Ts and and kind of next steps I was reading about. You know you recently had this kind of very very large rates of capital to start building out your first kind of manufacturing facility in the us but some big you know, quite famous investors like breakthrough energy and so on. Where where’s kind of that today you know what? what are the kind of process to kind of get that that first factory and up and running so.

Jason Huang

Yeah, thanks for actually asking that question. First off, we are very blessed with our investor group breakthrough is a visionary investor and um, they know the global challenges they have patience. They invest in hard tech like ours they have to build factory to make a difference and we really appreciate them for their leadership. We’re also very grateful for utilities like national grid nextera fpl. These are thought leaders. These are early adopters of technology in the industry. You know I do remember you made a comment about how you get new technologies adopted in ah in a conservative industry. Um, you know, even even in the conservative industry. You have some players that are. Progressive that our thought leaders early adopters you wanted to focus your energy with them. We’ve been very fortunate to have a national grid and also next era to invest in us and they also have shown us a tremendous interest. In taking our technology forward as well. Um, and I also think that they speak volumes on behalf of the rest of the industry and the others are just not used to do things the way they do national grid and next era. So what. National grid nextter is is working with us is going to help the entire industry as well. In terms of the facilities we have. We’re building our first facility in California and there’s a massive need for fire remediation effort and you mentioned about p and e I just needed to bring a point. We our technology have been selected by Pg and e in its open space challenge sometimes you look at a massive utility p and e you know they’re not very progressive but when you are faced with challenges. You know they being very creative. Ah, soliciting solutions worldwide. So we’ve been very fortunate. We do have ah enabling technology for them and we’re working with some of our partners in industry like prismian to bring technology solutions for them and um so you know these are. These are things that will help the overall industry. Um, we are we should be in production phase in our facility here by about midsummer um I would say before August we will be making products.

James McWalter

So very exciting.

32:41.20

Jason Huang

Out of our facility in California and that is very exciting. That’s a milestone event and our team has worked really hard by the way we have a great team culture in case I didn’t mention it. We have a great team. Um, our vision. For our company is probably a little bit different than most of the other companies we care about our employees and partners. We care about their happiness fulfillment in not just material sense but also spiritual aspect. We believe that is important.

Jason Huang

And we also believe that as a company. There’s an obligation to society to humanity especially in today’s environment you have this massive climate change and we’re committed to make a difference for the world and lastly we like to. Get our technology to the phase that we can be the choice to rewire the world with our technology and and when we do that we can improve capacity ah capacity throughput in our power grid to accommodate all the renewables and. To improve efficiency that has been ignored in the past century as well as providing that enabling self-monitoring capability which is not possible in today’s wire today’s wire are dumb wires. Um, these are things these are missions of ts. And we’re really excited about what we could do for the for the world.

James McWalter

Yeah, ah, but ah, it’s absolutely fantastic I Guess on the um on that kind of cultural Piece. You know one of the things that we’re seeing right now is a move of the you know the most highly skilled you know workers and in the economy moving to things that have more of an impact right. Um, it’s started. You know when the the great resignation. Although so supposedly looking at the research. The great resignation was not quite as great as large as as if kind of seen initially, but you’re definitely seeing. Ah yeah, people who might be working at ah companies that are large tech companies. Maybe they don’t like the direction of those. They’re looking at climate Tech they’re looking at other areas where they can have more of an impact in their kind of day-to-day. Yeah, and you mentioned that this kind of you know the spiritual flourishing element. How does that I guess ah you know appear within the kind of company culture in a direct way. Um, because I think that it’s something that a lot more teams are trying to cultivate and maybe are struggling to do So yeah.

Jason Huang

Yeah let me expand a little bit about the 6 principle values at ts we at the very top. It’s a pyramid. It’s customer first without customer there’s nothing there. We don’t have to explain that right below it. Have 2 values that are important one is teamwork that is within and also with partners with customers. You know you mentioned about the culture. Um the spiritual aspect teamwork should be simple because we trust each other. And the trust is not easy if you have egos in the middle when you are able to see through the egos and really understand who we are as a being um, you’d be able to have a much greater appreciation for humanity.

Jason Huang

We actually are one. You know that oneness um I was impressed I saw a picture which is comparing the human lawng with the tree. The tree takes in what we breathes out and we take in what the tree breathes out.

Jason Huang

You know that code dependency that harmonious one is. It’s really amazing and we need to think it that way and teamwork is also just like that as well and then we have safety reliability. It is not just thinking about what.

Jason Huang

We locally as a team you know in our in our company but also the extended team that includes alignment that includes the utility workers that they work with our product and and then right below that we have 3 values that are important one is continuous improvement. I’m of the view that even with our technology I would argue It is best in the world. There’s still room to improve and we have a smart conductor in the works that will change the world again in the conductor space. Um. You know with continuous improvement I’m going to share with you. My perspectives about putting the effort having passion by the way The the fifth value is you have to have passion and energy to you know to to come to Work. It’s like um, you got to love what you do and do what you love. And if you’re stuck in a place if you still needed to make a living at least learn to like your work because otherwise life is too short. Why why choose to be miserable. You can make a difference in that selection in the last wise commitment.

Jason Huang

So back to the continuous improvement. Um, it’s a compounding fact I urge my colleagues and and and you know people I’m I meet I observe I’m a mature scientist by training so you can see my passions about Ma material science.

James McWalter

Absolutely yeah.

Jason Huang

Why I am excited about ts technology if we aim for one hundred point one percent what does that mean every day we have about 1000 minutes that we manage you know rest of it. You sleep and you eat and you know just nonproductive hours necessary minutes by the way. If every day we squeeze the 1 extra minute that is the one hundred point one percent effort if you do the compounding because the effort you put in today. You know that effect is compounded by next day’s 101001 ndred one thousand one minute if you do it for a whole year six three hundred and sixty five days that extra minute every day is 1.4 x compared to someone who’s just doing 100 if you do it forty years on a continuous basis that is 2000000 times if you are not successful. Something is wrong. Okay, so you are putting in basically the 1 minute extra effort that’s creating a 2000000 times compounded impact. Why shouldn’t you be successful and then the other point that I wanted to make about the continuous improvement is the 100 % principle the way I look at the 100% is you do need to pursue perfection in products in manufacturing as well. Just imagine you know we make products you make a conductor.

Jason Huang

You start with carbon fiber resins and then you do protrusion and then you do encapsulations and so on so forth if we screw up especially toward the latter stage the manufacturing step. You’re not. You know you are only 99.5 percent there. You might be scrapping the entire lot. Just think about all the wasted material wasted labor and effort wasted resources. We have to pursue the 100% as well and if if nothing else if your audience can take in the one hundred point one percent principle the 100% pursue for perfection I think it’s going to do them well for their for their lives.

James McWalter

Yeah, and I think it also goes to the core of even the technology itself and we talked a little bit about this at the beginning of the conversation. Ah, where technology makes a massive change is where it is a new point of leverage and this word leverage when you’re trying to leverage that extra point one percent or that extra minute a day. But you’re trying to leverage. You know a new type of advanced material in this new way that affects like a very large existing problem that nobody else was solving and all the way down through all the different ways that we kind of interact with the world I think searching for leverage is like something that that. I think more people need to talk about and there’s a mentor of mind. He says you know most people say don’t work harder work smarter but he also has he’s like there’s actually a better one. Ah further which is work braver right work would more seek things that have more leverage. Um, because again, even if you’re working smarter. There’s always maybe some. Other form of leverage whether there’s risk whether it’s kind of identifying areas of even greater productivity and so on that you can kind of capitalize on. Um, but Jason this is this has been a great conversation I I love kind of finishing off on on those kind of elements of culture. It’s’s super exciting before you finish off is there anything I should have asked you about but did not okay.

Jason Huang

Yeah, um, you did ask and I probably didn’t have time to respond we are looking for employees and colleagues and partners in ts on the world stage. We look for agents distributors. Representative of our technology in the product because this technology is not just us technology. We wanted to benefit the grid of the world basically everywhere so we look for partners that way if anybody’s interested in that let us know we also look for. Employees partners with cts that that can help us ah in manufacturing technology development finance business development. We have needs across the board and we do have a precondition you have to. Respect and like the 6 principal values that I mentioned about customer first teamwork safety continuous improvement passion and commitment and we have the commitment for you. Ah, we also like you to have commitment for us that is. You come to work bring your heart and mind with you as well to work and in the process. The company will be able to provide that fulfillment of what you wanted in life in both material as well as spiritual aspect and includes your family as well. So. It would be a great journey if someone were to join ts we. We need more talent and we could use more support more partners in the world.

James McWalter

Thank thank you Jason and we’ll include all those links and contact details in the show notes. This is great. Thank you so much.

Jason Huang

Thank you very much and I really appreciate the opportunity to speak with you and be you know, let more people know about advanced technologies like Ts and the difference they could make for the for the world. So thank you for that.

James McWalter

Like thank you Jason.

High Power Storage for EV Fast Charging – E93

Great to chat with Quincy Edmund Lee, Founder & CEO at Electric Era, Electric Era engineers and manufactures AI-driven high-power storage systems for EV fast charging stations! We discussed the importance of feedback from customers, what is needed to build out EV infrastructure, the need to unblock power constraints and more!

To find out more about Electric Era, contact them here! https://www.electriceratechnologies.com/contact

https://carbotnic.com/electricera

Download Podcast Here: https://plinkhq.com/i/1518148418

Remember, If you want to support the podcast please rate and review 5 stars on  Apple, Thanks so much! 

James

The unedited podcast transcript is below

James McWalter

Today we’re speaking with Quincy Edmund Lee founder and CEO At Electric Era, welcome to Podcast Quincy. I suppose to start could you tell us a little bit about Electric Era.

Quincy Edmund Lee

Thanks James good to be here how you doing today.

Quincy Edmund Lee

Yeah, electric era is a company based out of Seattle Washington we’re about a mile from the space needle our company focuses on building AI driven high power storage solutions for the ev fast charging market. So electric area is it’s an startup in Seattle Washington founded by myself. My co-founder Elliott Owen we are. About a mile from the space needle we focus on building an ai driven high power storage solution for ev fast charging stations. So specifically we sell a behind the meter high power storage system that lowers the load required the load capacity and power capacity for an ev fast charging station. So you think of peaks. Peak shaving. But for e fast charging stations. So we’re really trying to position ourselves in the market to be the energy brain of an ev fast charging station handling all the power flows and energy flows at a fast charging station so that the customer can lower the grid capacity requirements the demand charge costs. And operate the station intelligently. So we’ve we’ve built out a software platform and a hardware component that allows us to go and do those things.

James McWalter

So very good and what drove the initial inspiration to start electric Era. Yeah.

Quincy Edmund Lee

Um, yeah, it was it was about 2018 and I was working at Spacex and I was launching launching or watching a rocket launch and it was a deep space orbital entry mission. Um, and as the kind of rocket took off and and started to go into deep space to deposit the satellite. There was this earth-facing camera and showed the earth and it showed the earth getting smaller and smaller and smaller at that moment you know looking at that beautiful blue and green. Orb I realized I was spending all my time and energy and talents building technologies that were sending things away from earth when the problems on earth. We’re actually growing in magnitude. So you know that was kind of my existential moment. My aha moment hey I need to institute drastic and urgent course corrections for the the climate problem here on earth and there’s no better way to do that than a participant in the private sector as an entrepreneur so really started to focus my attention on. Problems here at home at that point and noodle on ideas ah around how you know I could contribute to the climate crisis in ah in a positive way. You know and stem the issues that are plaguing our planet.

James McWalter

Yeah I think it’s very similar to I think a lot of climate entrepreneurs where there’s kind of this default. Yes I believe in climate change the fact of it all those kind of things but had never really been maybe internalized to degree that the responsibility feels focus on oneself and I think ah you know. Talked to many many entrepreneurs and and also speaking for myself when it comes. It’s like it’s like a train that hits you and you don’t really you know it’s It’s nearly impossible to resist. It’s like oh I actually do need to make dramatic Change. You know career change focus change all those kind of things.

Quincy Edmund Lee

Yeah, yeah I think I think that’s right and I think what’s pretty cool that I see is there’s a huge wealth of talent of really capable motivated people coming from other sectors into the sector I think a lot of people recognize hey there’s this you know existential threat that I need to address. Um, but I think a lot of other people and just generally everyone participating in the process realized that this is a huge shift of Capital markets. So. There’s like a massive undertaking of wealth creation happening so like arguably like a really good industry to go into because we’re reindexing. Um. You know, value creation around solving climate problems and the capital markets are moving accordingly. So You know so selfishly I think all entrepreneurs should have both those things in mind of hey this is a um, a really big problem but hey there’s a huge amount of opportunity here. So like let’s go solve these issues and and create value for humanity and value. Um, for our shareholders at the same time.

James McWalter

Yeah, absolutely I think the best climate companies are ones where they’re very conscious at the beginning that the business model has to be tied to the climate impact in a very like specific and and direct way and I guess like so once you had you know this this you know step change in your kind of outlook you know and the underlying kind of emotions of that the the sentiment of like I’m going to. Yeah, make this change in my career in my overall direction. What was the next step. So.

Quincy Edmund Lee

yeah so yeah I started putting pen to paper I started building business models in the early mornings and late at night and reading about um ultimately the duck curve and and the the issues associated with onboarding bulk amounts of renewable energy onto the grid. So company originally started off with the idea of hey let’s like build load shifting batteries that have like vanishingly small dollar per Kilowatt hour costs and bulk onboard them onto the grid so that we can fill them up during the day and discharge them at night when renewables aren’t around and we realized you know that was that was. Was a big problem. It still is but the business case for it is probably not venture backable. We also realized that you know our expertise is our expertise didn’t really lend itself to making fundamental changes in that technology space. You know that’s like more of a chemical level innovation than it is like a product or. Mechanical engineering level innovation. So we kept looking around. We realized hey um you know there’s renewable onboarding and then there’s also clean vehicle electrification onboarding that needs to happen and what do you know? ev fast charging the big you know. £800 gorilla in the room of the electrification. The vehicle electrification process is not being really looked at or absolved um and and the more we looked into it the more we realized it was a huge impediment for people to adopt evs and I’m ah I’m a Tesla driver and even on the tesla network I find that coverage is actually kind of lacking. You know it’s it’s it’s still kind of hard to fastharge. So there’s there’s a very strong psychological need to have more infrastructure in the ground. Um and when we when we started digging into that we realized wow these stations pulled neighborhoods worth of power on one city block. There’s a clear mismatch there like literally thousands of homes worth of power. On you know, yeah, a single city block. Um, so when you dig into it. There’s a huge amount of cost impediment and time impediment to go and activate fast charging stations. So that was the genesis of the idea. Let’s build a high power behind the meter energy storage system that peak shaves. Load at a fax charging station and this and the software system that operates. It.

James McWalter

And once you hit kind of had that direction What kind of validation like who are the potential users potential customers potential clients who could be to yeah, come down the road as you kind of think in the long term about monetization but in in the short term like how do you kind of think walk through that validation process.

Quincy Edmund Lee

Yeah I think any engineer listening or sorry any actually yeah, any engineer that’s becoming an entrepreneur listening should should definitely just pick up the phone and start talking to customers and you don’t need to go and try to sell them on anything you can simply schedule introduction calls and say hey I’m interested in learning about your industry and this problem. Etc, etc, etc. That’s exactly what we did we we read a few papers to start and we’re like oh yeah, this is like actually fairly wellresearched and there’s a lot of you know publications that have suggested that demand charges is an issue for this industry and that fast charging stations are power intensive. But the very next thing we did was really start calling a lot of people and connecting with them on Linkedin and scheduling intro calls and like validating directly from the customer voice that this was a problem. Um, and that was I mean that was immensely helpful. It validated the thesis that this was a big cost driver for the industry. Also validated the thesis that there was a need for high power storage systems and there was a validated the thesis. There was actually already purchasing behavior for batteries in general for fast charging stations. So we had a lot of good market indicators early on directly from the customer and that was I think the key first step that. In hindsight was the right thing to do.

James McWalter

And we’re running kind of surprising insights from those user research interviews that came out of that period. So.

Quincy Edmund Lee

Yeah, definitely? um I think I think a big one was that you know there’s multiple considerations that dictate the site economics at a fast charging station and power cost is just one of them. Um, we also got a lot of indications that. You know the current battery solutions are just too big and it takes up too much space and it makes problems for citing and that can add land lease cost so you can flip the entire economics on its head by adding a battery but you know given that you solve 1 problem but that you create another so we had a lot of. Strong market signals and customers telling us hey make sure this isn’t a huge big shipping container like it can’t be because we’re trying to put this in urban tightly dense areas and that drove a lot of product decisions around optimizing the footprint of our power node battery product. So the system that we built and designs about. You know four by four feet it’s pretty small and it’s got. It’s got 120 kilowatts of power in it. So you know it’s half the size of a parking stall and you know 120 homes worth of instantaneous are 30 minute power actually so we really want to you know condense the footprint.

James McWalter

So.

Quincy Edmund Lee

I Think the other thing that a lot of customers indicated was um, they were going to try to find other solutions to this problem other than storage and I think that’s actually really important for entrepreneurs to hear you need to not Over-index on your technology and think that it’s a panacea for the Market. Like you should not assume that that is True. You should try to find direct buying behavior from customers for your product and not try to force your solution into their problem because they’re they’re creative people. They’re creative buyers and they have a mandate to not spend money and increase I R for a station. So. Best way to do that is to find other creative solutions. Um, and that was something I think we should have paid a little bit more attention to at the beginning because it probably would have shaped our product earlier on in our approach but you know that was another surprising anecdote that we found.

James McWalter

Yeah, it’s its so interesting. You know the problem solution dynamic and ah you kind of mentioned the you know the and engineering soul of of your founding founding team and how building things is like very close to the the kind of overall ethos for engineers and and the like um whereas.

James McWalter

Think the best entrepreneurs who are engineers who move into becoming startup founders and and early employees. They become very very obsessed with that problem piece and they don’t to your point try to you know Square Peg round holele type solutions because you know what? what? If. Let’s say the solution was more of a um, just trying a random thing but like you know a chat bot didn’t. Tells people about the the closest free ah fast charter right? Like if you’re kind of coming to the space with like just kind of a completely open. You know like an open kind of map of where the possible solutions are I think you end up getting to a place that’s ah, better. But Also you’re also even within that you’re bringing to. Conversation your own context about Solutions. You’ve seen in the past and I think like that balance is where you get like really smart people coming from outside a specific industry coming in and disrupting it in in a kind of new way.

Quincy Edmund Lee

Yeah, yeah, that makes that makes a lot of sense I think um, any like any product solution or problem solution orientated person engineer or not coming into a space will look at a problem and say oh well here’s a solution for it. I came up with solutions but that might not be the right solution and it. Certainly might not be the solution. That’s moizable. So you know like your your singular data point and idea is is one of 1 of many in a constellation of ideas and you’re trying to find the one that’s monetizable. So like lesson learned for me is you know, think through product design in a way that’s within the framework of the customers.

Quincy Edmund Lee

Desired solution space and then push the product envelope all the way out out to the point of monetization. Um, and then ah yeah, validate validate validate get lots of feedback from customers.

James McWalter

And absolutely and and so then you you do start building. You have this validation like what was that first mv he looked like.

Quincy Edmund Lee

Yeah, so we given we developed a brand new product. You know brand new high power battery. We had to do a fair bit of you know r and d to build it and you know brand new engineering to build it. So um, the first and Mvp we had that we were charging cars off was like a lab demonstrator of our battery. Um, it was you know a small I guess like 60 Kilowatt Twenty Kilowatt hour battery it it didn’t even have an inverter attached to it. It was just something to get us operational and prove that prove the thesis that we could make high power batteries that wouldn’t burn up. When you discharge a huge amount of power. There’s a ton of amperage amperage creates heat heat destroys batteries. So we had to solve a lot of thermal fluidic engineering problems to solve it first. Um, and you know we just did an engineering development front runner as an Mvp um, but we slowly developed that and matrod it to what we have now which is. 120 unit. That’s operational and testing cars and charging cars in our lab. That’s our go-tomarket product. That’s our Mvp. We’re deploying that with customers later this year after certification and with another customer that we’re gonna announce soon that is. Buying a pre-certification unit for a demonstration. Um, so you know ultimately we we pushed the envelope. We got the the product operational and um, you know there at this point just thinking about finishing certification and scaling up.

James McWalter

So yeah, not super super exciting time and just on the certification point you know one of the in in the startup world. You know we like we like to move fast ideally not break too many things but you know there’s definitely like a mindset of try to. Ah, trying a lot of things seeing what works but whenever you’re touching atoms especially things that are you know charging multi-thousand pound vehicles down down roads and and and related and you’re using different types of chemistry. You start to have to adjust for the risk of those things and and kind of deal with certification bodies and so on. You found that process and um I guess you know are there ways that government can work better but especially kind of small emergence startups for figuring those kind of things out. So.

Quincy Edmund Lee

Yeah I think um I mean it’s It’s like any sort of adamtom engineering or adamm entrepreneurship versus the world of bits and software is just going to be extremely hard. Our our approach is a hybrid of both. We do a lot of ah engineering and product development in the world of atoms and. You know with our high power battery system and then also in the world of software as it pertains to developing those solutions. It’s just time you need to add to your roadmap as it pertains to certifying those solutions. It’s even more time you need to add to your roadmap I would recommend like any entrepreneur going through certification do like. Early calls with certification bodies and and developed like the framework and the scaffolding of all the specific milestones along the way to completion of certification as early in the process as you can. Um I think ah I honestly pretty I’m pretty like not optimistic I guess around. Possible improvements. It’s just a slow encumbersome process. It’s with you know, fairly bureaucratic companies that are not really incentivized to move fast. The government has done and I guess the certification bodies have done what they need to do at this point which is create standardization processes and standardized certification requirements. Um. Honestly I think you know there’s actually probably a. There’s probably a business play in expedite math process I’m sure you can make a lot of money I know I would have paid more money to to help us go through it faster. But yeah I think you know the certification bodies They basically had done what they need to do I Think now at this point we need to just.

James McWalter

Right.

Quincy Edmund Lee

Push more companies through the process quicker um governments can probably help more broadly with standardizing utility interconnection I think this is this is like important for all distributed energy resources which fast charging is actually a distributed and energy resource. Um. But any time you’re interconnecting with the utility. It’s really Slow. It’s not necessarily clearly laid out um and having like a standardized process for permitting and interconnection. That’s more expeditious is is going to be hugely valuable for the broader energy. Industry because basically that’s what sets our time constant of energy transfer. You know like we’re going from internal combustion type technologies to clean energy technologies the rate of change between those 2 things is dictated by this fundamental interconnection Piece. So It’s It’s super valuable for the broader industry to do that I think.

1

James McWalter

Yeah, and I guess for the listener you it’s pretty much a hodgepodge of systems United States like at the state level at the multi-state. What’s called an iso level these are different types of what are called interconnection queues and and formats depending on how much energy you’re trying to put on or even sometimes take off the grid. And ah to give people one one idea like if you’re trying to build a large-scale project that generates a lot of electricity onto the grid in somewhere like Pennsylvania that’s taking offward of 3 years now to actually get get the process kind of through interconnection queues and so on. Um, so it’s absolutely like a massive problem and. And of a couple startups who are kind of working on like the information around the timing of these things but we absolutely do need you know some of the step in and at the kind of government and policy level and sometimes I do think it’s like you know can we have a whip around of a few million across a lot a cartel of startups and and other kind of companies to try to fund some of the speed and interconnection. But. Having looked into it a little bit. It’s actually less of a money and resource point. Well, it’s definitely a resource point of view but our issue but less of a money issue is just they’ve never had this such pressure to build so much as the last five years and you know has produced and that’s getting you know, increasing ever faster and just the hiring plans at these entities. Just are not ready for this. You know the massive increase in physical assets that are going to hit the grid.

Quincy Edmund Lee

Yeah, yeah, yeah, that’s that’s exactly right? I Think if anybody has a good idea for a interconnection as a service business model with high-gross Margins I would invest in that because honestly, if you’re able to like deeply integrate with utilities around the the nation and help them solve this problem. They’d be Happy. They might even pay you too. You know like there’s there’s definitely a problem there that needs a solution and there’s probably ah, a good clean solution that can make a lot of money doing it.

James McWalter

Ah, see the podcast about my own startup from last week which is such upon some of that for the listener. Um, cool and so in terms of the so you mentioned you were kind of signing contracts with a couple different customers. Um, who’s the kind of ideal customer is it the car manufacturer who’s looking for their own network. Is it. You know I guess these kind of more emergent ev infrastructure focus companies some of which have gone public via spac over the last couple of years is is it a different type of entity right.

Quincy Edmund Lee

Yeah that’s that’s a really interesting question. So um, as you know as we’ve seen it so far the automotive ilims haven’t really doubled down dael that much. They’ve kind of like half doubled down on adding infrastructure for the sale of their cars. Vw obviously being the leader there out of the obligation with the diesel gates scandal they funded electrify America I put like $2000000000 or something like that in that company. Um I think I think automotive oils that do not do that are going to be in a world of hurt and honestly I think tesla’s. Going to continue to kind of run the show until auto automotive williams take the charge the fast charging the public fast charging infrastructure component more seriously. Um, you know and and not to say they’re not thinking about it. But I think they just they need to think about it as part of their rdroadmap and product development roadmap. Um, because it is a clear leader for vehicle sales as tesla demonstrated basically. But now you know we haven’t we haven’t really made a whole lot of headway with automotive volumes. Our ideal customer is you know a grid constrained high value property. That’s trying to add fast charging as an a minute the augmentation so that can take a variety different fan that can be a seat a cpo like some of the charging companies that have sped that can be charging point operators sorry to use acronyms um, that can be a convenience store. That’s you know, trying to add. Charging grief fill to their property to keep driving foot track to buy their snacks um or it can be a utility. That’s you know, putting an infrastructure It can be a fleet that’s you know, charging their vehicles but then opening up the charging station at night. Um, for public usage ah or during the day for public usage for that matter so any of those you know customer archetypes actually are good fits for our technology. Um they they they use the technology to lower demand charge costs. They use it to defer or entirely avoid infrastructure upgrades and interconnection timelines. While at the same time adding premium a premium fast charging experience for their customer base.

James McWalter

Yeah it’s so interesting we’ve we’ve had a few folks who are looking at the kind of ev um, infrastructure space over the last on the podcast over the last few months and I guess the introduction of different types of business models to interact with the charging is one of the kind of really interesting pieces. And you mentioned one of them which is the idea of yeah fast casual dining or restaurants or you know convenience stores where people you know can set the the car and forget it for the fifteen twenty minutes whatever it may may take um and so yeah, so I guess. Speaking to that. Let’s say I did you know you know when your product is kind of deployed in the field later this year and I drive up to it and let’s say it’s at a convenience store for the sake of argument. What’s the kind of experience for me versus the status quo from using your product.

Quincy Edmund Lee

Yeah, so the world that we envision is a world filled with ubiquitous, highly findable. Ah high quality fast charging. You know we we need to as an industry think of this as a critical piece of national infrastructure and we need to drastically increase the availability and the quality of the fast charging experience. And by quality I’m using that as a proxy word to really indicate uptime I come from the aerospace industry and while at Spacex I worked in the telecommunication industry on the space starlink constellation and both those industries have you know success criteria measured in the 99.99 percent levels um and if you think about gas stations I mean it’s fairly rare. You go to a gas station and they’re not operational and like we as an industry need to be pushing the uptime availability quality of fast charging accordingly. Um, so your customer experience would be you. You know, discover electricera enabled station. Um, that’s in your neighborhood or along your route and you go to it and you you plug in and you walk away and you come back 15 to 20 minutes later with you know, 70% state of charge and then you go on your merry way and while you’re there, you spent. Ah, good share of wallet on buying a latte from Starbucks or a Taco From Taco Bell or whatever it is. You know? Um, but yeah you, you know? Honestly, we don’t really aim to be like a in your face. Front in brand we think of ourselves as the stripe of power management services for the industry. We just want to be like underlining technology the energy brand for the industry. We don’t care about branding ourselves or being front and center. So and that’s that’s intentional and that’s like part and parcel of our business model and go-to-mark strategy. But um. So honestly to answer your your question. You wouldn’t even know you were charging in a fast charging station and enabled by electric era if I had my way you know like we you would just be showing up and charging in a great in a great location on a great with a great experience.

James McWalter

And I guess just moving from a world with ubiquitous Well not even ubiquitous, but a lot of slow chargers to ubiquitous. Everything’s a fast charger right is the the kind of said.

Quincy Edmund Lee

Yeah, yeah, you know I think um, it’s definitely going to be a hybrid world. You know I opportunistically charge when I can like of course and I think most people will um so that leaves a lot of room for level one and level 2 charging which are as you mentioned slow charging. For the listener. But yeah I just think we need a lot more fast charging even for the tesla network I’m like man I wish I could charge my tesla at like a lot more locations. It’s like hard to find the stations. They’re all over the place and you actually have to fill up quite a lot because there’s just not a whole lot of mileage and a battery like that’s just the fundamental truth of it even for a 300 Mile ranged car. Um, so yeah I think I think if we really want this industry to take off. We need a lot more fast charging.

25:31.26

James McWalter

No absolutely and and you mentioned a moment ago. This idea that ev infrastructure is if I’m now but becoming a critical piece of national infrastructure and we actually had a fairly large infrastructure bill passed last year through congress is one of the the bill that did pass not the other bill that that. Back badder that that failed um but it had a fairly so large amount of money earmarked for building on ebch charging network I guess what? what are your kind of thoughts on how that will impact you know the grow to evev infrastructure um is the money set up in a way that’s. Yeah, optimal. Um, whether there you know any changes you would want to make and how does it get does it affect electric era.

Quincy Edmund Lee

Yeah, um, well yeah, first off shout out to the joint office the department of energy and department of transportation. They actually I think did a really good job of structuring that bill I think that they were really intelligent to allocate the majority of that capital to the development of alternative fuel. Corridors to establish fast charging on you know, transit routes for on routee. Sorry for corridor charging the bill is yeah you know there’s 5000000000 going to to the development of those alternative fuel corridors the the way that they specified the requirements actually have a lot of really good things in it 1 is that. There. There’s a mandate for fast charging. It’s you know the average station that they propose is for one fifty Kw charging stations which is like a lot actually um, the other thing that they they did well was they actually put language in there that basically. Fires slash recommends that utilities and construction agencies develop standard processes for interconnecting fast charging. So if we can use that as a framework for fast charging. It’s probably applicable to other distributed energy resources which solves that interconnection problem. We talked about earlier. Um I think. You know if I had my way I would say hey 1 recommendation recommendation I would make is you know push for um, monitor monitoring monitorable and measurable metrics of success around station interconnection timelines and station uptime availability. That are pretty good and high and that that didn use that as an economic forcing function to award the revenue or the the funding in that bill to people that are meeting that like high bar of criteria um, those you know like life’s all about of incentives. And I think that is like a really important incentive that we put into the industry and we specifically fund companies that have like high quality stations.

James McWalter

Oh that that that makes a ton of sense and I think it’s I think the best kind of government policy is when you do have those experts that you mentioned from you know department of transport and so on department of energy etc. You know working hand in hand with lawmakers and policymakers right? because the nature of any. Yeah Multibillion Dollar bill is that there’s going to be a lot of opinions in there and if you can get something that’s 75% good like you’ve done an amazing job right? And like if it’s if it’s directionally correct and I agree like in this case they seem to have done a kind of a bang up job and. I think it’s ah it’s a good framework for again. Some of the other bills that are pretty stalled or stopped completely but might potentially get get through over the next few years um and I guess you know thinking about yeah electric era over the next couple of years like what’s the kind of Target. Kind of your two year three from now.

Quincy Edmund Lee

Yeah, two years out we want to be deploying around 10 to 30 in a battery enabled fast charging stations a month we’re really yeah, like we’re really thinking. Okay, how do we scale this up as quickly as we can. How do we design the asset to be mass manufacturable and low cost.

James McWalter

Amazing.

Quincy Edmund Lee

How do we design the interconnection process to be quote Unquote mass manufactureurable and low cost and then how do we attach ourselves to the vast majority of vv fastch charging stations that are being installed over the next 5 to 10 years. So It’s for us. It’s you know the the products. Products here. The product’s working. You know we’re charging cars. The software is working. Um, we’re we’re pushing through certification and then scaling up Quickly. You know like that’s our next mandate. Um, you know we we really feel strongly about but ahholding that customer promise like we need to unblock power constraints so that we can add fast charging. So that people can participate in the fast the energy transition The vehicle electrification Energy transition. Um, so that’s what we’re doing.. That’s what we’re focused on and we’d love to chat with you about your application. It’s It’s very likely we can drastically decrease for anybody listening your interconnection timelines and you know. Deployment timelines toward your fast charging station and lower the cost for you and provide a better experience even during high periods of demand and usage. So yeah, give give us a give us a ring.

James McWalter

Yeah, and absolutely and we’ll we’ll put some contact details in in the show notes as well and I guess then you know in terms of yourself. You know you as you mentioned you you left Spacex looking at your your bio I think Spacex was your you know main company you worked out coming out of university and then you kind of went from. Ah, company. That’s fairly large I think at this stage you know, even though it’s so quote unquote startup ah to to founding something yourself. Um, what I guess have you learned most about or surprised you as part of that transition from you know someone managing a team within Spacex to you know, being the person. Ah the you know the founder the Ceo who has to.

Quincy Edmund Lee

Oh man where to start? Yeah I mean I mean space Spacex really put put me through the ringer. That’s a great company like what a great place to work and and learn. But you know the skills I acquire were really just engineering skills and of course as the Ceo you’re doing a lot more than just engineering. It’s actually rare that I do engineering you know like I get like I get to like boss people around and say hey that products should do this or that or like what about this approach but I’m not really putting pin to paper that that much in preventing canops anymore. So.

Quincy Edmund Lee

You know, growing the Ceo skills understanding the investment cycle process how to acquire funding how to market your company how to develop like a really strong corporate strategy and business model how to market and sell to customers. All those things were like major growth variables for me like very painful growth variables that I had to learn very quickly. Um, but ah yeah I think you know also the the really challenging part about starting a company is you don’t have any sort of embedded like cultural infrastructure.

Quincy Edmund Lee

You have to and you have to build that yourself like if you if you show up and you work for Apple you’re working at a company that has like literally 4 decades or 3 decades worth of like cultural heritage or at Spacex these yeah the Apple way or Spacex. It’s like everybody’s like drinking the coolid and saying hey we’re going to Mars you know and.

James McWalter

And the Apple way.

Quincy Edmund Lee

And literally they will go to Mars that’s definitely going to happen so that cultural infrastructure is not there at at a startup as as you you yourself know James you got build it and as its Ceo you have to manage morale and culture and cultural alignment and like bring in really key hires that facilitate that um and that like kind of. World building process is very challenging and something that um taught me a lot over the last eighteen months since I left Spacex.

James McWalter

Yes, I actually Spen to 8 years at a company a fintech company back in the day before we call ourselves a fintech company. We’re financial services back then but um I think there’s a I think a lot of founders will either. You know have a reactive or you know i. I guess proactive kind of ah adoption of their previous company’s culture in some way now of course as you said like as you add people, you know everyone’s kind of the all that early team even the type of product you’re building these all affect kind of culture over the first you know year or 2 um, but it is absolutely a process which I think the more. Conscious we can be of what we’re building and how we’re building it the better because one of like a mentor of mine was like if you ah you know if you like are in the room and you a piece of paper drops on the ground and you don’t pick that up and somebody sees that like those little elements all build in a way that like kind of affects. You know the actual. Culture out the company because especially in the early days basically culture is often just a mirroring of what the founders and the you know the first 5 employees are doing and you know and I think people sometimes want to shy away from that a little bit because it’s like oh we didn’t write down our culture document I was like no, it’s like your actual actions coupled with that later process of going through a culture document and so on um, is what actually. Makes people do the things that they should do in the right way from the the point of view of culture down the road and.

Quincy Edmund Lee

Yeah, well well said that that makes a lot of sense That’s right on. Um, yeah, and and that’s that’s a big challenge and I think like pretty much no first time T would have experience doing so good luck. Anybody listening.

James McWalter

Yeah, no, Absolutely we and and when you make the mistakes along the way. Um, yeah, and you mentioned you had a few of these kind of growth trajectories that you’re kind of working on for yourself around sales. All those kind of things you need like particular you know heuristics or or structures for. Fast learning in areas that maybe you’re kind of have less background experience in.

Quincy Edmund Lee

Yeah I mean I think ah I’m I’m pretty biased here but I would say try to go down to the axiomatic truths of whatever you’re trying to learn and explain from the bottom up higher order behavior that is emergent and observable. Um. So like don’t try to explain and inform mental models around the higher order behavior start much lower than that and learn like the first principles or the axiomatic truths of whatever you’re trying to learn and then form and then think for yourself and try to actually like develop you know your own mental model with those in mind around. How the system or process or behavior should work. Um, that second party super key because that’s actually like when you put the that’s when you embed the and information in your neuroplasticity of your brain. Um, so it’s it’s really about like. Learning the lowest level things and then trying to use them on a daily basis and then they’re just imbued into you and then it’s like then you can kind of churn it from an active prefrontal cortex type activity to something that’s more passive and more natural.

James McWalter

I Yeah no I Love I Love that I think that’s like a really kind of fascinating way of like adopting new knowledge figuring it Out. Um I think one of the other like somewhat similar to certain extent but just taking a step out and like looking at yourself from the outside not in a kind of judgmental way but just kind of noticing things. You know I think there’s a lot of um. You know intentionality as productivity elements. But there’s definitely something there where it’s like oh if I notice that I’m doing something like that doesn’t mean necessarily will change it but at least like I’ll have a better ah understanding what I’m doing and then I can you know, maybe sometimes even back out the framework for what is what is kind of leading to that behavior. You know, positive or negative. And again, especially when you are trying to build a company and you know initially you know your co-founders early employees then later investors then you know later as you get bigger. The media all these kind of things. Um, you know you have to kind of craft these different ways of navigating how you’re expressing yourself and communicating because if you’re not. Kind of noticing that like definitely other people are and yeah sometimes I think we can get get caught up in I Guess the wrong things as part of that process.

Quincy Edmund Lee

Yeah I think I think a lot of people um would benefit with the realization that everybody has their own unique worldview and if you can understand how they see the world and speak to them through that ocular view in a. And a language you know and a framework and in ah with a world experiences that they understand then communicating ideas whether it’s to the media or a customer or an investor or an employee or a future employee become much easier so you know just acknowledging people want to you know, see things in their own specific way and trying to mirror that and. And give them the information. That’s most digestible to them in a way that’s most digestible is a really big win.

James McWalter

So hunt was I couldn’t agree more Quincy. It’s been great I’ve really enjoyed the conversation. Um, before we finish up is there anything I should have asked you about but did not so.

Quincy Edmund Lee

Um, yeah I think ah you know our companies scaling up at this point we’re were’re adding a lot of customers to our pipeline and we’d love to chat with you about your application and get you in our queue, we’re got a finite finite demand or finite supply of of ah batteries and. You know we’re we’re lining up our our partners for the next you know 6 to twelve months so now’s the now’s the time to to chat with us and and really see how we can um, best help you in your expansion efforts. You know we’re we’re also hiring. We’re always hiring an electric era where we have a super hard. High barrier of entry into the company. We really want excellent people. Um, and you know most likely the listeners out there fit that mold so come to chat with us and you know we love. We love. We’d love to chat with you.

James McWalter

Amazing and we’ll include on those careers page and and other links in the show notes I Thank you Quincy Edmund Lee.

Quincy Edmund Lee

Take care James nice to talk.

Paces – E90

This is a slightly different episode, where I chatted with Charles Bai, CTO and cofounder of my startup Paces! Paces provides actionable data and analytics for green infrastructure developers, operators, and investors to understand what and where to profitably build. We discussed how On Deck was central to us finding a cofounder, why we are passionate about changing the built environment to be more climate positive, advice on startup fundraising and more! 

Do you know any solar, wind, battery storage, hydrogen or EV charging developers? Let us know at team@paces.ai thanks!

https://carbotnic.com/paces

Download Podcast Here: https://plinkhq.com/i/1518148418

The unedited podcast transcript is below

James McWalter

Today I’m speaking with Charles by CTO of paces and my co-founder welcome to podcast Charles.

Charles

Thank you James excited to be here.

James McWalter

Brilliant I Guess to start could you tell us a little bit about yourself where you’re from I Guess your whole story.

Charles

Absolutely so I’m originally from China born raised in Beijing went to Cornell For Undergrad so Dc as and also easyc there worked on a couple of startups and ideas and in the past three years I been on Facebook ai. Um, effort first was mainly around Ai product and then I moved more towards infrastructure where I work on sustainable AiEff efficiency and optimizations and large model inference. Um, and.

James McWalter

And just yeah, so I guess what is sustainable Ai.

Charles

Yeah, so so same but ai is is actually a very interesting space. Basically you know in the past couple years a models has grown exponentially large and you know training a models doing a model inference and are not going to be That’s cheap anymore and it consumes a lot of power uses all of Gpus and a lot of observers at the same time is becoming a lot dirtier so training a model can cause a lot of carbon emissions. So part of the work. We’ve been doing at Facebook is. Sort of meing the power and carbon footprint of ammodals from training to inference and see how we can make them greener.

James McWalter

And is that why you joined um on deck and I guess could you tell us a little bit about um what on deck is and you know it’s obviously very central to how we match. But yeah I’d love to hear the kind of thought process for why you joined on deck. So.

Charles

Ah, hundred percent yeah um I was I I was also on deck was actually introduced by 1 of my friend who I’ve been talking to. He also went to Cornell and we’ve been bouncing ideas around the ai space and. one day I song to him I was like oh man I you know I wish I could meet more people meet more likeminded people and he says he joined on deck after he worked at Facebook and then Google and he said it was a great experience. He met a lot of. Like mine and people there want to start companies and he quit his full-time job after that so he suggested me to apply to it to be honest by the time that I apply to it I didn’t know too much about the program. But um, yeah I just went through the whole process. Also. Talk to some ondack alumnis and found out that whole community is great. So that’s how I joined.

James McWalter

Yeah, brilliant. Yeah um, and actually Charles if you could like you then ask me that the next question so you know so you could be something like oh that was my onduck experience. You see what I mean. So yeah, good.

Charles

Um, ah yeah, that was um, that was my on that experience remind me why you joined on that games.

James McWalter

Yeah I mean probably not super dissimilar so you know I think I’ve mentioned on the podcast in the past that I was living down in Mexico waiting on a rather protracted green cardd situation to resolve itself eventually that did but what I was down there I was working at a company called respondent. Um. Remote first company doing some cool things. Um, but wasn’t really anything to do with climate or kind of impact that I really wanted to have with my kind of next role so Leftft responded and started just playing around with a lot of ideas in the climate space started this podcast and. The opportunity came to apply for ondeck and so I applied for on deck because I didn’t have a cofounder and I was like you know I’m very very very minorly technical in terms of coding something quite terrible together. But like you know I definitely haven’t somebody technical enough to build real product. So I basically joined on deck to find a cofounder. And um I applied and I was rejected for the first the first time and then um about two months later I got an email saying oh you’ve been accepted into the the next round of the next cohort. So I joined you know as 100 % remote company a remote first cohort it was I think the last on that cohort where. Weren’t any other types of cohorts. Everybody was a founder and I joined working on a idea around Sms Chatbots aimed at farmers to try to make them more climate friendly and to offer them advice at various points in their kind of yeah farming process and so I kind of worked on that for a few months um that’s why and I joined on deck I was talking to lots of people trying to convince them to to that. This is a good idea to work on and yeah in the end I decided that it was a tough space and so you know I guess the immediate appeal of things like regenerative ag from a client point of view is that. For me at least because I come from a farming background I got the space pretty quickly. Um I think the struggle was that things move very very slowly within agriculture. It’s a very very socially driven industry right? So it’s even if there’s better technology. You also have to convince. Lots and lots and lots of farmers to adopt that new technology and that is actually a really tough problem. It’s nearly closer to being a you know b to c type space rather than a b two b space and so you know after working on it I actually built ah a product I had it in market was a very large Ag business was actually trialing it. But I kind of decided that it wasn’t really the direction I wanted to go and so became at that point really really interested in clean energy and clean transportation and a lot of the kind of big issues in that space. Um, and yeah and so I was like okay, let’s just start talking to lots and lots of people who are working on.

James McWalter

The massive deployment of solar and wind and Ev charging stations and hydrogen refuelling stations and all those cool things and seeing you know why aren’t we building that fast enough you know is it a money issue is it a technology issue is it something else and those I guess the genesis for the direction that ended up becoming paces.

Charles

Awesome! Thanks for sharing.

James McWalter

Yeah, and I guess you know I know you were um, you know so you went into on deck and I think you were wanting to do something with the sustainable Ai idea was that the kind of original project. You wanted to work on there.

Charles

Yeah, so I was I was thinking sort of I was sort of brainstorming this idea of making Ai greener as a whole because you know if we see this problem at Facebook you know there. There are also probably some other organizations or entities where’s seeing sort of this. The same problem. Um, and I’ve been talking to some people around it as well. But later I was sort of more drawn to to clean energy and some of the these other verticals or industries that are much stier than technology because. Ah, technology industry as a whole is is pretty clean compared to some of the other ones like rose state or or energy. So so that’s when I decided. Okay, you know it’s it’s better for me to work on something that emits a lot more and that that emits a little bit more. Mission compared to technology Industry. So That’s why I was looking to real estate and and renewable energy and things like that.

James McWalter

So yeah, it’s interesting and I guess at the same time as when you and I started talking to each other last summer I was going through a very similar journey and doing all these different user interviews with solar and wind project developers and there was this kind of remarkable moment I remember quite well where I was talking to a particular solar developer. And they said that only 1 in 5 of the these big hundred million dollar solar projects they work on actually ends up getting built and that the rest fail for various reasons and I was like so shocked by this number that I was like convinced that this particular developer was just bad at their job and I was like oh you know because I didn’t know the space that well and I was like oh.

Like so I need to like talk to other people and I started talking to other people and I know you were talking to other people and we just kept hearing this one in 5 success rate and and at the same time there’s like tens of billions of private money and public money like sitting on the sidelines waiting to be deploy to build these things so it’s not not a financing issue. And that became like I guess a little bit of an obsession for for us. Both this idea that there is all this money to be spent on clean energy, clean transportation green buildings and so on but we’re just not successfully executing on that in the level and the velocity that we need. Um, so yeah, so it became you know something of ah I guess an obsession and you and I were like oh maybe we we should be kind of founders together. Um, and I guess like you know when we were kind of chatting what what was the thing that convinced you that this was the the idea to move forward on. So.

Charles

Yeah, so I guess there are 2 things so one is you know this industry is is very dirty. So I really think that you know a lot of the technology is already there but deployment is is a big issue right now and we’re just simply not. Building fast enough and deploying fast enough and the second is I think this industry right now along with some of these other climate industries or other verticals within the climate industry is very data hungry and a lot of the problems that they’re facing today can really be solved with. Better data and better analytics and they’re not really used to this sort of process of having data and having insights actionable insights to help solve their problem. So I think these two are sort of the main. Ah, reasons why I think that you know this is a a good idea that we should go for and also we after we talk to you know potential customers and we sign an l I and I think by that time we know that you know we’re we’re on the right track.

James McWalter

 so I guess yeah so I guess when you know it was like signing that letter of a tent. Yeah, having those conversations. Um it was kind of amazing how kind of quickly moved you know as a matter of a few months that we kind of went from like deciding to move forward together to you know. Saying okay, this is something that could maybe be fundable. They could maybe have other customers interested in all that kind of thing and so I think I guess my main message is like once you kind of know you really do know and having like a high degree of velocity to your decision making is like super important.

Charles

So ah, hundred percent um yeah so you you spoke to a lot of different peoples. You know, actually looking for cofounders that you’re you’re mentioning when you’re on deck and what’s your process like.

James McWalter

It? yeah, it’s it’s’s super interesting and obviously you know it’s worked out well here but like I would love for people who are listening to this who are kind of going through a summer process and trying to say you know who should I found something with um it I definitely interacted with well over a hundred people maybe close to 150 people in. Yeah, the previous 2 years went to the level of like you know having you know one day work sessions with a couple of people. Um, there’s a list of 50 questions to ask your cofounder that does the rounds comes out of first round capital um went through that process with ah with a few people. And I think like the biggest thing was that I was so structured with the approach and I think I was potentially too structured with the approach because like I you know I was like oh some people it seemed like a good fit. But I think I was so structured I kind of missed the probably what was the most important thing for at least for me and like. In a way that like can kind of get something up and running is like a bias towards building because I was looking for somebody who’s technical I talked to again a ton of technical folk who are just to the person like an incredible you know, engineer or data scientist or whatever you know that technical skill set. But. Not everybody had like a massive bias towards like building right? like a lot of people wanted to talk about things but a lot of people wanted to ah you know, um, like like change idea constantly. You know there’s lots lots of different things. Um and some of those like I learned a ton from like all that process. But I guess charles when when you and I met and like I could see that you were. Kind of looking at these kind of working on these like side hackathons. You know here and there and like just talking to tons of people and just being super active in like the building community. It was not like bias towards action that I was like oh this is the thing I should always have been indexing on in my search and I guess like that’s like the main message I had like you know your process you should have some sort of process. Of course. But like really identifying that the main thing that will work with trying to get something from 0 to one and to me I think like the velocity of building and the bias towards action like those are like the most important things and also of course you need to you know you need to vibe you you know you need to be able to disagree in a kind way. You need to have all those other elements that are kind of interpersonal. Um, but I guess you know what? what are your kind of thoughts on on how your search went well.

Charles

Ah, hundred percent um I think I think for me is is also kind of similar you know, um I I think um, we both let share sort of this. Spies towards action. We really want to build something I really and we also really want to build something that changed the physical world. We think that you know, um, there’s they’re just simply not enough companies who are especially climate companies to sort of doing things that like shape the physical world and we really. Have that bias towards helping other companies rather developers to build faster and we just want to help mitigate the climate issue and the entire sort of situation right now as as fast as possible. Um.

James McWalter

And and to do that we’re we’re working on an Mvp getting getting some sort of product. How is that going you. You’re doing 99% of the building. So what’s that process like been for you.

Charles

Yeah, so it’s it’s been great I mean we so right now we’re we’re building and mep to to have this. Basically it’s a jazz tool to to help right now specifically targeting developers to help them find better size to build their. Gray infrastructure to basically provide them these deep due digons data up in front so that they won’t build something and in couple months they found out that oh you know we can’t build here because of this reason for that reason. Want to surface all these data up in front and tell them basically give them these analytics and allow them to make better decisions and um, yeah, we build a we build a demo. We are currently iterating our and Mvp with. Our ouri signers and also our design partners and things are going great. We are integrating a lot of data and we are also providing analytics on top of the data. And by the end of this month I hope that we can actually let me redo that part. Ah and by the end of next month I hope that we can have the V 0 mvp build so that we can actually start piloting with some of the.

James McWalter

It Yeah, it’s so exciting. You know, like because sometimes especially as we’ve kind of gone through things like fundraising and so on you know and I’ll spend a lot of my time talking to investors and then like a week might go by before I talk to our design partners and the other people who are interested in in the product we’re building.

Charles

Potential customers.

James McWalter

And all of a sudden I talk to them and like it just gets so exciting to see how their eyes light up when we show them. You know a sketch like ah you know a design sketch or we show them the progress you’ve made charles in in the kind of and Mvp construction and they’re like oh that feature is a 5 out of 5 value or that feature. A 4 out of 5 or even that feature is a 2 out of 5 and we know that we shouldn’t be prioritizing that type of feature for a specific user set like all of that kind of constant feedback. You know is has been so valuable and and honestly having you know, tried and failed with different startups in the past I think my biggest lesson having done done this a little bit in the past with with as I said less successful efforts. Is that we built more product than we validated by the market and this time around like having those kind of close relationships and having basically the user drive the process and for us then to bring you know that data awareness that ah you know that that analytics and ml awareness. Software awareness to actually then craft that into like a world-class product like that’s like the really exciting thing that you know that there’s basically we tried to dramatically reduce the chance that we build something that nobody wants like at least these users you talk to every week at least? Ah, they’ll might use. It.

Charles

Hundred percent I really think that you know, especially building a product like this iterating with the customers interacting with them and really making sure that you’re building something that they want is very very important. Um, yeah, and yeah, we have also been fundraising could do. We have done anything better when we seen you know our prec round.

James McWalter

Yeah, so we’re we’re just about done raising our preeed and we we got into kind of just just north of 7 figures. Um, and honestly like having never yeah, really raised directly in the past for myself or I think for both of us. Um, it was definitely learning experience for us. It went. Looking back shockingly quick. Um, looking forward. You know part of me was like it might take two weeks and then it takes a few months or a couple months and even that is very fast for a lot of you know, relative to like a lot of people who I’m sure listening to this and like kind of going through their process I would love to say just like. Give people a sense of numbers like we engaged about 400 investors had 66 first meetings and close 10 investors and so you know it’s definitely like a numbers game. Um, and I think coming from ah a sales background for for myself. Yeah, you. I was kind of going into it like expecting just a lot of Nos and a lot of rejection. Um, but that doesn’t make mean it’s like trivial right? Um, even when we would get the first couple of checks in from some really great angels. Um, yeah, so basically like there was nothing for the first week or two then we got a couple of angel checks in in week three and then like a week went by. Before we got at something else and like a week sounds like nothing but when you’re kind of in it and you’ve just had 2 angel checks. You’re like oh where’s the next one and like you’re also seeing you know, maybe 7 to 8 nos a day every day as you’re kind of going through that and a lot of them are like not direct Nos but like non-responses or you know people who seemed like. They were very excited and they just kind of fall off the Map. Um, so you know if I think about the um things we could have done better so you know one of the things we we definitely didn’t I guess appreciate was that how much better you get the more meetings you have um I think we were just bad for the first like 20 meetings like just just plainly. Didn’t really have good answers for a lot of things and so I think that because we didn’t really realize that you’re just so bad for the first 20 meetings. Um those some of those meetings were like you know you felt worse coming off those meetings than than you might have. And so I think like the big, the big lesson for that is like for any future time. It’s like just get the first 20 meetings done even if they’re not ideal investors because you learn so much from those you know and by the time you’ve hit twenty thirty forty meetings you’ve heard every question you’ve heard every potential issue and you should have good answers for that. And so you know people would ask us about the total addressable market. You know how big a market are we tackling they would ask us things around you know how do we reach our customers. They would ask us things about data collection. The defensibility of our remote. All those things that we had a pretty okay idea of um and.

James McWalter

We could like articulate yeah charles and high talking to each other maybe for you know a if we had like ah just an hour long conversation but in a kind of pitch conversation. You’re trying to get that idea across in like 1 minute per question and you’re just not good at for a while and so I think that’s the biggest thing it’s like just just. Lots of practice and no no practices as good as the actual pitch itself and so put yourselves out there and I wish we’d done that a little bit more. But yeah, overall like I’m I’m pretty pretty damn happy with how it all went to be honest, anything you think we should have approved charles and yourside. Yeah.

Charles

No I think I think overall we we did great. It’s also our first time so we definitely got. We definitely got let me redo this um, let me think of a little bit first. Um. What are the things that.

James McWalter

You You could talk about how we we gave lots of updates to throughout and we continue to make progress on the company like we sign an extra alloy and that kind of thing So you you.

Charles

Yeah I can I can talk about maybe the continuous momentum and everything um, cool. Yeah, so I think this you know this is also my first time as well. So I think both does we. We don’t really have a lot of experiences but. I think one one thing we did pretty well and is to basically show the momentum have continuous sort of updates with with the potential investors who’s interested in investing so we had we initially had 1 our eyes and one li and then we. We basically signed another one a couple weeks later and we are also continuously to build out the and mbap the demo and everything and we also took design partners on board. So showing really showing this momentum of growing and you know. Having more customers more more product build is is pretty critical for us to have a ah good race.

James McWalter

Absolutely and and that momentum I think has continued even like in our personal lives and so on I think we’re boat moving apartment over the next few weeks you are I believe moving country you are moving across the country and so you know like how has been like all those kind of you know, balancing. Those kind of personal things while trying to make progress on you know, a fastoving startup than for you.

Charles

Yeah, so moving moving is always Stressful. You know across country moving is is even worse I would say definitely I would say you know take your time. Don’t stress too much about It. You know there are a lot of moving pieces try to manage all of them and. Um, try to have dedicated time on you know, handling your personal Stuff. Don’t don’t spend your entire time on Building. You know the the startup and save some time for yourself and forget all the operational tasks and Logistic takes These are very important as well. So yeah, So so I would I would say that you know have dedicated time to handle all these moving pieces. So.

James McWalter

And I guess once we’re you’re you’re settled in New York um you know we we’ve just set up ourselves like ah, a little office space in Brooklyn we’ll be starting kind of working in there in a few weeks but I guess. You know how do you think about? what what you want us to achieve over the next couple of months like what are our kind of short-term muscles in your mind.

Charles

Yeah, so I think you know on the on the product side. Definitely we want to build a Mvp v zero and then continue to iterate that with the users that means like connecting a lot of the data we collected deployed the data and then making sure that the users can consume these data. And insights through the web app so that is the main thing I would say as sort of the immediate next step and and also at the same time kind of you know, build out more data sets collect more data that are. And be useful for for for customers.

James McWalter

Yeah, absolutely so like you know I echo that um just on the data point. Yeah, so we’re you know we’re collecting zoning data. We’re collecting permitting data. We’re collecting interconnection into the grid data to re try to you identify like good places to build but you can’t do the whole country. You know in day one so you know there are. Like over 3000 counties and jurisdictions in the United States and so you know you have to kind of prioritize for a certain extent and that you know that is ah like always the balance right? because if you had national coverage that you definitely be of a value. But how do you actually get an mvp like an actual true Mvp. Like can you get like 10 counties or even one county worth of data that is actually valuable to some users and then you kind of build out rather than yeah spending months and months of data collection and then ending up that oh nobody actually cared about that data and then theater bit. You know I can’t wait for the first dollar of revenue that is ah that’s going to be. You know a lovely milestone you know I think been in having been in fundraising now for a few months and you know you hit like your fundraising number and people are obviously very congratulatory. Yeah in your kind of personal circle and that’s obviously like a great moment to hit those numbers because a lot of people don’t and so you know we feel obviously very kind of. Proud of of that and and very kind of fortunate and humble about it. But it’s like okay you know you raise money to build a business and you build a business by growth and revenue and all those kind of elements and the most important metric of all I guess is the actual climate effect and so yeah, so I’m I absolutely like super excited over like the next few months because we can completely focus on the business. You know. Building product getting in front of users hopefully getting them to pay us. You know a few Bob a few dollars and and then kind of continue to iterate from there.

Charles

That’s great. So these are sort of our short term aim you know and what how do you see? what paces that can be over the next few years

James McWalter

Yeah I mean I think this is like 1 of our you know shared views is that um, when you kind of think about the scale of climate change and like all the kind of associated problems. We really have to kind of completely rebuild the built environment over the next few decades right? Like if you look out across the world. You have. You know coal-fired power plants. You have ah gas cuzzling vehicles you have ah you know buildings who aren’t very very well insulated and you know this combination of factors is just very very high in terms of like carbon emissions and so basically we’re going to have to change all of that and we’re already starting to see it. Um, as we mentioned that there is a ton of funding for from it for this kind of transition both from the public and private sector and more is needed but at least for the next couple of years. The money is is available. Um, but really, it’s like the transformational nature of the built environment is going to be I think catch a lot of people by surprise. Um. You know we’ve had a particular type of city and kind of suburban world over the last hundred years um throughout the western kind of western society and also you know large parts of the rest of the world and that’s going to start to shift in various ways and ways that are not really predictable. You know one example is as you kind of have a more distributed energy grid. Um, that changes the types of businesses you can have the types of communities. You can have um as we move into much greener buildings. Um, that also changes the types of ways that people live and then transportation you know I don’t think people realize how much quieter and and kind of more enjoyable. It will be to be in cities when all vehicles are evs or hydrogen powered. It’s just going to be like a profoundly different and you know more kind of positive way to live and so obviously there’s a lot of doo and gloom in the climate world. But we’re super excited by um, yeah, the potential change that’s coming and how it like paces and and what we’re building can kind of speed that up and enable. You know the. Climate optimum use case for like all the world’s land and so yeah I guess like what’s exciting you about ah our future kind of vision and mission charles. Yeah.

Charles

Yeah I think for me is I really want to see all these you know big changes in the physical world I think that’s that’s what drives me to to work on on paces as well. I really want to see you know all these new renewable energy. You know sites getting built and you know one day I really want to visit some of them myself as well. And yeah, and also the transfer. Ah the transformation of the cities that you just mentioned I think it’s also very exciting for me. Um I think. You know, climate to be honest, like climate this this climate people as a whole. Um we don’t really make a very good. Um, you know, um, illustration of the future. Basically all of them. All of us are sort of saying that you know things are going to go bad and if you don’t make changes. We go even worse. But really we believe that there’s and there’s another way out right? and this things can be a lot greener. We can see vertical farms. All these cool new. Um. Cool news sites in the in the city and imagine everyone drivinging ev and were hydrogen you know powered cars instead of gasolineing power cars and things are going to be a lot quieter. So there’s I think there’s this alternative sort of 2 chair that we can build and is is. Ah, lock reer and is a lot nicer. So I’m very excited about that.

James McWalter

Yeah, no, Ah, absolutely. And and I guess like thinking about the kind of wider like scale of Innovation. You know we we both kind of have orbited different type of climate communities on a lot of tech Folk. You know if you were somebody kind of listening to this and and they were kind of inspired by what we’re talking about. They want to kind of start their own thing or work On. You know some cool new Idea. You know what are some areas of Innovation. You wish that more smart people were working On. It’s particularly around climate and.

Charles

Um, I Really believe that another big piece of this is talent. Um, to be honest I Really think that we don’t have enough people um, working in the space right Now. It’s still a relatively small. Space. People are very collaborative but at the same time There’s simply not enough manpower to sort of you know change the world fast enough so I would I would say that you know having some some sort of school or some sort of you know training platform. Um, that can bring more people on board and have more people working in greener industries and together sort of mitigate the climate change Issue. So I think that is another big piece that’s sort of missing right now.

James McWalter

Yeah there’s ah this concept that ah a friend of mine has talked about which is he calls it like the next million where we have about a million ish people working directly on climate today. Um, you know across government and startups and all different kind of things and that’s great, but like who’s the next million. Right? And as we move kind of into more and more people working directly on these problems. They’re going to be less I guess kind of politically or emotionally or ideologically driven and they’re more going to be driven by just like you know the normal parts of life you know driven by their ability to have impact but also is this a good place to work is this a place that. I’m fulfilled in my job I’m working on cool problems and I think that the just because of the scale of yeah yeah, the different elements of climate um like more and more people are going to like look at that as something that they want to spend the next thirty years on and yeah it’s it’s super excited. But I agree like the velocity of people joining and working on these things is just not not fast enough. And I think a lot of that is to your point like there’s just not that many pathways that are very clearly articulated and so I know I know we have Sam Steyier who was talking about greenwork and like you know that’s one particular kind of pathway which I think is really promising and and it’s super exciting. Um, but we absolutely need like tons of those you know like if you are a like ah a great software engineer working at a fang company. You know if you are um, an accountant if you are you know a lawyer if you are whatever the skill set if you are you know, somebody who is an electrician whatever the kind of role that you’re working on today. There was absolutely work to be done directly working on climate and yeah and would love people to kind of yeah feel free to reach out to us. Um. You know email the podcast. Whatever it may be will always help to try to like direct people into working on those projects you know, connecting with the types of communities that have already arisen and definitely way more will also arise kind of working on these projects as well.

Charles

Great. Um, is there anything that I should have asked you but I did not.

James McWalter

Yeah that’s always the question I end with normal guests. But yeah, um I guess if anybody’s listening to this and they are a clean energy transportation or a green building developer operator investor. We’d love to hear from you. Um, as charles mentioned we are working on our Mvp. It should be out pretty soon. And we’re already starting to do kind of demos and setting up early trials for what we’re building and so yeah, if you are unhappy with the efficiency or profitability or success rate of your green infrastructure project development. Um, we want to talk to you and so yeah, feel will add our email address to the show notes of the podcast definitely feel feel.

James McWalter

Free to kind of reach out to us and the podcast is not going anywhere. Um, you know we we love having these kind of conversations I’m sure Charles will stop by from time to time as we have more things to report and we’ll continue to kind of talk to like great people who are working on climate from a climate tech kind of yeah point of view. And so Charles has been absolutely great. Thank you so much for joining us today.

Charles

Thank you James thanks for having me.

James McWalter

Thank you everyone.

Quantum Dots and Climate Change – E89

Great to chat with Hunter McDaniel, founder and CEO of UbiQD! UbiQD is an advanced materials company powering innovations in agriculture and green buildings! We discussed how the properties of quantum dots enable solar powered windows, how retrofitting greenhouses with quantum dots can dramatically increase crop yields, building a technical team and more! 

https://carbotnic.com/ubiqd

Download Podcast Here: https://plinkhq.com/i/1518148418

Remember, If you want to support the podcast please rate and review 5 stars on Apple, Thanks so much! 

James

The unedited podcast transcript is below

James McWalter

Hello today we’re speaking but Hunter McDaniel founder and Ceo of Ubiqd welcome to the podcast hunter. Very good to start. Could you tell us a little bit about ubiquity.

Hunter McDaniel

Thanks James Happy to be here.

Hunter McDaniel

Sure so we’re a deep tech advanced materials company spinoff from Los Amos National Laboratory we’re also licensing some technology exclusively from mit university of Washington and Western Washington and we’ve pulled in some team members from those institutions we kind of argue or spin off from several. Um, but really, our purpose is about leveraging nanomaterials to make lasting positive impacts on society and as a team we’re most passionate about trying to address issues related to climate change and the the core technology is material. That’s effective at manipulating light. You can change one color of light into another. Very high efficiency makes it a platform but primarily we’re focused on deploying that into the facades of buildings essentially to make the building more efficient at leveraging the power that’s coming from the sun.

James McWalter

And I guess whenever you know I talk to people who are working out like real kind of frontier tech and moving that into kind of commercialization. There’s often a kind of a question around you know timing is like you know when when is the good time to take something that’s like this remarkable step change in technology and and bring it to the masses as it were.

Hunter McDaniel

If.

James McWalter

Thinking back to the kind of founding story of ubiquity like how did you kind of think through that process when you’re like okay we have something really exciting here that yeah we could potentially build a company around.

Hunter McDaniel

Yeah I mean that’s a great question. Um, so I was a postdoc at Las Ama National Laboratory if I completed my ph d university of illinois and then had an opportunity to come to Los Alamos in the chemistry division and um. Yeah, there were there were a couple kind of aha moments in the lab where I would recall looking at the data coming from one spectrometer just being shocked by how bright the material was how efficiently it was emitting light in the infrared part of the spectrum near infra part of the spectrum and.

James McWalter

And.

Hunter McDaniel

So that was just kind of from a technical perspective I felt like there was a breakthrough there you know I had I had a foundation in material science engineering and felt like I knew what I was looking at and there was kind of an aha moment there but it wasn’t really ah I didn’t appreciate it. Um, how much work would be required from that point to take that. Um. Material that and invention if you will into commercial products and sort of figured that out the hard way to in the school of hard knocks after starting the company in 2014? Um, just um, yeah, just just kind of like spending a lot of time out there in the marketplace trying to understand what the market needed and. How we could provide solutions and you know so-called customer discovery type activities read a lot of books talked to a lot of smart people. Um, as far as getting at you this directly to your question when is the right time. Um, you know I think Peter Thiel has has said a lot of smart tings over the years and he’s indirectly an investor in our company. And 1 of the things that he told me when I met with him um some years ago was I think this might be in his book 0 to one something along these lines of you don’t want to be the first mover in a space. It’s too much heavy lifting too much sort of plowing the field. Um, which can be just long and arduous and expensive. Really want to be the last great advancement in a field and so I think we we kind of embody that with with respect to quantum dots. Um, there’s been a lot of hard work in terms of validating that that quantum dots can be useful in products and the first startups were all created back in the early 2000 raised a lot of money. And a lot of years trying to figure out what the first product would be. You know, clearly this technology this material is very interesting and useful for something but it took them a long time to get to the point. Maybe you know arguably about 14 years before the first real commercial products came out with the Sony line of televisions and then the amazon kindle fire. Tablet in displays and but those those materials had some fundamental issues that were limiting them from going bigger and beyond the display space and I feel like that’s what we stumbled upon you know in that lab and in Los Alamos was kind of the next. Um, iteration of quantum dots that now enabled them to go big where we could leverage all of the hard work that had been done. Um, the the you know the the methods of manufacturing the analytical techniques processing just understanding. These materials took a long time both in academia and in in the industrial sector. And we had kind of ah come across sort of the the final big advancement that was needed to then take quantum dots. You know, broadly speaking to all these other applications and that was the idea behind the company ubiquity is short for ubiquitous quantum dots with the idea that now quantum dots can become ubiquitous now that we’ve.

Hunter McDaniel

Resolve these toxicity cost and reliability issues kind of with one fell swoop with this new composition.

James McWalter

Yeah I guess just you know I suppose a general question then about quantum doubts and kind of nanomaterials more generally. Um first I’d love to kind of get a bit of more of an understanding around. Ah the how these are created. Um, you know, maybe both at the lab level and then later. You know at the kind of a scalable level and then also when these kind of materials are you know created um, you know they obviously have these kind of phenomenally kind of fascinating properties but were these properties being sought for and this is like 1 mechanism to figure out how to display these separate properties. Or which sounds like in the case of your particular company. It was kind of surprising that there was these properties that were emergent from these types of quantum dots.

Hunter McDaniel

Well in the early days. It was more of a physics experiment. Um, so folks were seeing that there were there were different colors from the same composition of matter and that was kind of novel in the past if you wanted to make a new color of material either absorptive which be like what we call it pigment or fluorescent. Um, you would need to make a new composition. A new dye molecule or a new phosphor composition etc. But with quantum dots. It was kind of discovered that you could tune the color by the size and it’s actually a quantum mechanical effect. Um, you know just to go back to ah the the basics there. Um, when you confine. Um, an electron when you squeeze it you can change the energy states and so when you make a particle small enough. You’re basically confining the electron and you shift those energy levels and so you can control the colors basically that way and so for a long time in you know forty years ago it was more of like a physics thing like. We’re uncovering some quantum mechanic quantum mechanics here some interesting properties and materials and then can we control it and over time it evolved into well yeah, maybe we can actually make these from the ground up and there were some big advancements from Paul Vasada Muji Bewin in those early days. This are you kind of famous professors in the field. Where they were controlling in a liquid reaction the size of these particles from the ground from the bottom up so you you start with precursors that nucleate in solution form clusters of atoms and then those clusters begin to grow and as long as you can control that nucleation moment so that it. It is sort of arrested it happens over a short period of time then all the particles will have roughly the same size because they created. We’re all created at the same moment and then they grew roughly at the same rate and then you can sort of stop it when you get to the size of particles that you want at least that’s the most rudimentary sort of approach to doing it. And it became clear that this could be very useful just to be able to make any arbitrary color with very high precision and this is kind of what I mean about leveraging the past um, many many years thousands and thousands of papers have been published probably more than that maybe 0 papers have been published on.

James McWalter

And.

Hunter McDaniel

To make these particles and different techniques but tuning the reaction kinetics and the precursors and the temperature and all these things to really precisely control the size of the particles and then you know along the way. Um, all sorts of applications were envisioned and you know some patents were filed a lot of papers were published. And different cool Things. You could do with Quantum dots but it took a lot longer than I think everyone expected to actually translate that into commercial success and the success was somewhat limited in terms of there’s really only one maybe a couple tangent markets around you know prior to ubiquity that were. Actually getting traction in the market related to Displays display and lighting I Guess just making a very accurate light source and that that can be used in the back of a display to make a very color accurate Accurate More efficient display. Um, if you just have to use. Basically. Ah, you can only you only need to use a blue led at that point because you can use Quantum dots to convert the blue into very pure red and green and then in lighting those are primarily red Quantum dots but you can sort of dabble in some red Quantum dots into a traditional white led and you can make it a warmer spectrum with relatively high efficiency.

James McWalter

So.

Hunter McDaniel

Um, because you can sort of add in the red without compromising light that you can’t see normally phosphors would be very broad emitting and they’d emit a bunch of light that you can’t actually see by eye and so that’s a loss mechanism Both Quantum dots. You can very precisely dial in those colors. Those are the markets that have been successful. Ah so far I mean there’s.

Hunter McDaniel

There’s There’s quite a bit of a product on the market for in the display space in particular. Um, but people have talked about using Quantum dots for sunscreen and therapeutics and diagnostics and solar and you know, really any application involving light. There’s probably a way you can use Quantum dots to make it more efficient.

Hunter McDaniel

But those just didn’t quite make it and our argument the thesis was it was really the toxicity of those compounds traditionally cadmium-based those early quantumdoalcadmium selenide or cadmium sulide. Um, but then also the cost. It’s very difficult to control that nucleation step so you can’t. You couldn’t for a long time make very large reactors. You’d have to mix together 2 things very fast and so there’s another company that ultimately got bought by Samsung called Qie Vision out of mit that was founded around that time in the early two thousand s and they at far as I know hadn’t. Scaled beyond five liter reactors but they had to run those in parallel and they were supplying quantum dots to Sony for Tvs using five liter it’s pretty small reactors just because of this mixing issue. So with with our technology. We don’t have to mix things together at high temperature rapidly. We just basically heat up.

Hunter McDaniel

And mix and then we don’t have any of those toxic heavy metals present. We get kind of lucky with some of the other properties that were emergent that aha moment was just seeing how bright it was just that that was saturating this detector in the lab and it was kind of like Wow that’s way brighter than anything else that that we’ve ever looked at before by order of magnitude.

Hunter McDaniel

Um, so something special must be going on here and it’s not even fully optimized or anything. It’s just super great.

James McWalter

And then with kind of then trying to bring that to the sustainability lens right? and I would love to kind of get into the couple of applications that but you’re kind of you know, developing right now. So one is around you know windows I believe and and glazing could you speak to that.

Hunter McDaniel

Yeah, this is something that I’ve been working on longer than ah sort of our first market which is in agriculture I can tell you about in a minute. Um, but this material has some some properties that are very well aligned with what’s called a luminescent solar concentrator kind of similar to quantum dots. Technology that’s been around a long time was first envisioned back in the 70 s and the idea was that solar cells were at that time very very expensive maybe what we can do is make a fluorescent panel that’s glowing in the sun and then that glow can can. Harvest light you basically cook a harvest light over a large area like like a window but didn’tly have to be a window be just a way of lowering the cost basically by collecting light over ah energy over a large area with a fluorescent material and then that fluorescent excuse me would get guided to the edges of this wave guide. Where you put solar cells so you could basically use very small amount of actual photovoltaic material to harvest light over a large area so it was originally about just lowering the cost of solar but none of the materials that were fluorescent at the time and even so many subsequent years where people were trying to develop this further were. Adequate for for doing this either. The dyes would degrade in the sun. They wouldn’t hold up long enough or they have this fishy where they would absorb their own luminescence. So. It’s kind of a ah deeper topic but the absorption of the material and the emission of the material overlapped very strongly which didn’t really matter and. Other applications. But if you’re trying to propagate the luminescence through a large distance through the same material. It gets reabsorbed and it’s a loss mechanism so you couldn’t really scale it and then this material um that that that we’re working with’s caught called copper andium di sulfide primarily and there’s in some related compounds. Has this um property where it doesn’t have much if really any overlap between its absorption and emission so you could really propagate the light through a long distance. Um it. It is ah an actual crystal and material. It’s inorganic material. So it’s much more stable in the sun. And then we can tune the color um into kind of this sweet spot which is where it absorbs over the whole most of the visible spectrum and then a midslight and the near infrared and that’s what I was describing on this detector this this light emission. Um, so that makes it very efficient for harvesting sunlight basically and then. Scaling it to a large area and then you check these boxes around the toxicity and the cost which are going to be critical for any energy application and pretty quickly. You’re like oh wow, this is like ah all these sort of critical properties are converging together around this use case in.

Hunter McDaniel

Um, what’s called a luminescent solar concentrator like I said you don’t have to use it as a window but 1 of the most interesting properties of this is that it’s partially transparent you can sort of make it darker if you put more quantum dots there but you can make it lighter just like any other window tent would look and then that really enables you to harvest sunlight.

Hunter McDaniel

From glass from windows and that’s probably the the biggest market that we’re pursuing. It’s a difficult product. It’s a difficult market when your value proposition is primarily around energy. Um, but it has the potential to really you know solve climate change if we can convert all this glass which is ubiquitous.

Hunter McDaniel

Around Austin right now and last everywhere and if we can convert that into energy generators at a low enough cost with a high enough efficiency then we can make these buildings no longer loads on the grid but assets for the grid. You know they could provide their own power but then even maybe power the buildings nearby everything worked out just right.

Hunter McDaniel

And that’s the vision. It’s it’s about reducing our the carbon footprint of buildings.

James McWalter

Yeah, and I I Love that you know I think I talked recently to somebody who works on kind of speculative fiction and solarpunk concepts in in his writing and we were kind of talking about how there’s kind of a bit of a lack of very big Vision. You know storytelling. Within the kind of climate tech space like a lot of it is the the current world with few more windmills or whatever it may be um, but I think one of the fascinating things with like the advances in material science in particular is being able to actually change the built environment in these kind of completely unique ways so that rather than buildings being. Independent structures that aren’t really doing anything to the world around it. Um, but moving it into something that’s more dynamic that you know is generating an energy or is maybe a store of energy for the gri at various times as we kind of have more ubiquitous like battery storage as well and so like ah you know the ability to kind of reimagine. Built environment in these ways where the materials of the environment themselves become this dynamic thing you know, carbon capturing concrete. Another example, um I think is incredibly exciting and so as you’re trying to bring that vision to those you know these massive you know realtors or ah, the construction industry who are. You know, have done things in a certain way probably for quite a long time. Um, how do you kind of I guess translate that vision into something that is like okay this is an investment we may want to make.

Hunter McDaniel

Yeah I mean it’s a great question it. It is tough. The built environment is ah an old industry a Slow-m moving industry very risk averse industry and windows in particular are kind of ah a source subject because they’re one of the biggest loss mechanisms for buildings. Just.

Hunter McDaniel

Compared to the wall in a bed order magnitude less efficient at keeping the the heat in or the heat out. However, you want to think about it. Whatever is needed and you know at the same time we’re naturally outdoor creatures and so we want to. We want to engage with the outside we want to have the view. We want to bring in natural daylight. So we. Obviously value windows and increasingly the window to wall ratio is is large especially in urban areas. Um, so it’s it’s kind of about you know, approaching the industry with you know, a little bit of a level head about what is setting some expectations that this isn’t going to happen overnight. But trying to demonstrate what’s possible and and help the industry rethink about ah rethink what windows are are about. They can be not just the problem but actually part of the solution and the window can be a central point. Um, our first product in this area is is basically a retrofit smart window. That is bringing we we provide the platform for that with a power supply. But then there’s all sorts of smart functionality that you can embed into the window sensors and automated blinds that could be tied to the hvac systems. Um and and actually being able to sort of be engaged with the the guest or the the. Tenant of of the building in a way that that wasn’t really people didn’t think of that before but there’s all sorts of sort of um old technologies there at the window like still most blinds are are you have to go up and manually pull a chain which is crazy. We have the technology to put a little motor in there. It’s very easy like why isn’t that already. It wasn’t weren’t there buttons that open and closed the ball I mean it it exists but very little market penetration of that kind of product. Um, although there are some examples of of hope where double paid windows for example are introduced in the 70 s and became roughly seventy eighty percent market share within 20 years there’s some codings now on the glass low in misssivity coatdings that are useful for energy efficiency that were rapidly adopted in the 80 s and 90 s and now have similar market shares something like 70 to 80% of commercial buildings so it can happen. Um, you know, but you’ve got to have a very simple cost-effective solution. And you’ve got to be engaged with the industry don’t try to disrupt the industry I mean I think disruption is a little bit overrated. Um, you know it it depends on what you mean when you say it. But I think we should be leveraging the existing channels to market manufacturing processes and and work together with the you know the market leaders today.

James McWalter

I Mean if you’re already disrupting like the the very material that the the product is made out of also disrupting supply chain supply lines and all those other things um is is biting off and it actually also even fascinates me startups who are like we’re also going to disrupt. You know the nature of hierarchical organizations at the same time we’re trying to build a company. It’s like.

Hunter McDaniel

And in the built environment.

James McWalter

So so much disruption you can do right? like you have to kind of lean on um the tools you have ah wherever possible. Um, you also mentioned this other application. Um that that sounds like yeah, it’s been going off for a little bit longer within agriculture. Could you tell us a little bit about that. So.

Hunter McDaniel

Yeah, so it was really something that came out of customer discovery that we’re doing for windows this goes back to maybe 2016 2017 where you know the story around windows was powering skyscrapers with boss a big vision but it’s pretty obvious that a small. You know 10 person so startup by person startup with very limited funding in those early days wasn’t going to start installing windows on skyscrapers as the first market and so we embarked on some pretty aggressive customer discovery to find you know beachhead market early adopter market. Um, that we could start on focus on initially and greenhouses came up as a possibility. There’s others you know automotive was another one that that people top and bring up. You know what about solar windows for cars. Um, and we looked at at a number of different markets and talked to people and in the value chain various stakeholders and. With the greenhouse one when we talk to the growers we. There’s definitely interest in a solar glass product I mean obviously greenhouse has a lot of often have have a lot of glass. We didn’t realize at the time that most greenhouses are actually had plastic film roofs. But um, you think of this glass house when you when you. When I say there were greenhouse. You’re probably imagining like something you’d find up in the Netherlands or Canada um, and there’s a lot of glass and energy is one of their biggest expenses and so if you could potentially generate electricity from the glass. Well that could be valuable but they kept coming back to us with the same question. How is this going to impact my crops. Ah, can’t compromise my crop yield at all that drives everything for us and so if you’ve got a solution that will save me on my overhead cost my electricity cost but not hurt my crops then that would be pretty interesting for us and so we said well. Okay, we you know we we have our our bread and butter is being able to tune this stuff. We can make any color we want. Maybe we can make a color of of glass that would be sort of not harmful to the crops. Let the light that they’re effective at at using pass throughugh but then generate electricity and then there was kind of this more of a commercial aha moment back in those days where like maybe we can just actually. Um, provide plants with the better quality of light period and forget about electricity generation and get more crop yield because clearly these guys care a lot about their crop yield and so that might be a more valuable thing to bring to to them than the electricity. So we started doing some very small scales.

Hunter McDaniel

Ah, trials I remember the very first one that we did was like literally a single tomato plant and we were able to make some very rudimentary films that had quantum dots and sort of surround the plant put it in a little research greenhouse and we were shocked. The thing was like twice as big underneath our our films which isn’t necessarily what.

Hunter McDaniel

How it works today at a commercial setting in a very small scale trial. You can see some big things. Especially if it’s not optimized, but anyway that was kind of like ah okay, maybe there’s something here kind of moment and then we started doing some math on like okay, well let’s say we could boost the crop yield by 10% what would that be worth to a grower.

Hunter McDaniel

And how would that compare it to the amount of electricity we can create for them and and actually it’s quite a bit more value that you bring if you can boost the crop yield and so that began kind of this effort in exploring this market more seriously and then at almost every turn we. Ah, we’re reinforcing it was reinforcing this idea that this could be a better first market for us. We’re not going to give up on the windows and we had some nondilluted funding from the National Science Foundation department of energy was helping out. We have have a grant from wells fargo that have been nondilluively funding the windows as it is a pretty heavy lift to get there. But the investors were more excited and and we were seeing more near-term opportunity simpler product stronger value proposition around just making the quality of light in a greenhouse better. So fast forward to today. We have a product line a brand called ubiro. Has its own website can check it out http://ubiro.com and it’s a retrofit film four foot wide any arbitrary length that you hang up in an existing greenhouse and it essentially makes your roof glow down on the plants and we can make different colors but across a range of Trials. We found that this orange color was kind of a catchall.

Hunter McDaniel

There’s definitely a certain spectra that work better in certain situations certain crops and that’s something that we’re studying pretty heavily. We’ll be launching a second color here in a couple months but this first product has been on the market now a couple of years and we’ve seen. Results as high as maybe 30 or so percent yield improvement for tomatoes. We’ve looked at cucumbers lettuce cannabis strawberries some other crops and or at least our our partners have or we don’t actually do much growing ourselves obviously but um, that has led through this. Product line that seems to be resonating with the market and you know we’ve got a pipeline of different products, different colors and form factors and things that we’re going to bring to the greenhouse industry. And yeah, so first to good that just turned out to be a good first market for us.

That’s so interesting and I’d imagine it demos pretty well if like the farmer can actually see the sparkle right? can actually see that that that improvement. Um you know I ah mentioned on the back before I grew I grew up on a farm in the west coast of Ireland and the um.

James McWalter

I would say that conservative in terms of the adoption of new practices is ah is ah you know is at the minimum you could say um of of how people kind of respond and we convert to organic and I think it was ninety ninety seven um and that was like madness I like the other other farmers in our our area and so as you kind of.

Hunter McDaniel

Head the fifth.

James McWalter

You know going to different growers like you know how? how are they kind of understanding the process I Guess a similar question to when we’re talking about the buildings before um I guess because they are having a more immediate direct you know feedback? um, are they kind of bit more kind of open to it relative to building owners and the like.

Hunter McDaniel

Yeah I mean both markets are are fairly risk averse. There’s a saying don’t bet the farm for a reason you know the farmers understand that they have boom and bust cycles crop prices or you know drought and whatnot can drive things in wild directions and so they’re very.

Hunter McDaniel

Ah, very conservative often in terms of making changes and they all feel like they have sort of the secret sauce secret secret you know, special approach a unique approach and so when you go through a grower particularly the larger ones they often will like want to see the results for themselves. They want to do a test or a trial a pilot. And we don’t necessarily subsidize those but we can sometimes do discounts but the takeaway would be that they will not go fully all in on their entire farm in most cases we have had a couple do that. But it’s more of an exception to the rule and I heard one. Investors say that they’ve seen this in the farming industry as well where they’ll start with 1 % of their acreage testing something out and then they’ll go to 10% if that looks good and then they’ll go to 100% so we’ve definitely seen that and plants unfortunately grow flow. You know I come from the material science space where you. Make a material. You can just go in the lab and take measurement and you get the answer like it worked. It didn’t what the efficiency was but with plants you know there can be pretty fickle. There’s a lot of inputs and things you have to make sure you water them if you don’t water them then you’re not going to get any useful data and if something goes wrong with your irrigation system. Well throughout that dataset and. Ah, and commercial settingnings. It depends on the crop but the cycles can be very long for tomatoes. It basically runs the full year when they will cut chop it down and do a new crop lettuce would be much faster. Um, some number of weeks. You know a month or so to get a cycle on lettuce depending on the variety. Um. But yeah, so they want to they want to see those results for themselves. It certainly helps just simply see the material see it glowing in the sun. You really kind of get it at that point you’re like oh okay, so it’s actually converting light a lot of times people think that this is like a filter and they ask why do I need quantum dots I could just put some sort of. Orange-colored plastic up above my plant. But once you see it. You can really it looks different. There’s like a sheen to it like an orange kind of glow to the product and that that does resonate with the growers and depending on who you’re talking to that. Can you know be communicated different ways. Um, growers typically will see the best yields in the northern hemisphere in the late summer and there’s a lot of reasons for that. But um, the sun sits lower than the skies is kind of a hand wavy argument in the late summer and you get more of a red orange spectrum kind of like the sunset is lasting longer. And that can be a triggering mechanism for the plants. The plants have evolved to respond to that because it’s telling them that hey winter’s coming and you better get your reproduction going and in other words produce fruit so we’re we’re kind of gaming that evolution in the plant. A little bit. Um, so that those growers that that are growing outside are using natural light. It’ll resonate with them to talk about this is.

Hunter McDaniel

Sort of mimicking the late summer Sun year round. Um for growers that were growing indoor before and they’re moving into greenhouses which is becoming common with electricity prices being high and competition especially in the cannabis space. You can sort of talk about the lighting and how this is a way of making a similar spectrum then you would make if you could design it from the ground up lighting. And particular in particular, what’s called high pressure sodium lamps like your street lamps. They have this orange color those are very common in indoor agriculture and that seems sort of color looks very similar to the film this orange glow but you’re getting that without having to use any electricity or buy those lamps.

James McWalter

And.

James McWalter

That that super that’s super interesting and yeah I guess if we kind of look out over the next couple years like what? what are some of the kind of Milestones you’re you’re hoping to reach ah in that kind of timeframe.

Hunter McDaniel

Yeah, so I mean with ubigrow. It’s really pedal to the metal. We’ve got um a sales and marketing team like to see that double or triple in the next year so we’ve got a new website that we just launched and so we’ll be more aggressive with sort of educating the market that this technology exists. And then we’ve got some new products coming in that line. Um I mentioned that we’ve got ah another color. It’s a little bit deeper red um that we’ve developed over the last couple years in collaboration with University Of Arizona and we’ve got some other colors that are and under development but probably won’t be launched until next year um but then maybe the big moment is launching the next generation of the product moving towards actually integrating it into the roof of the greenhouse right now as I mentioned it’s a retrofit you can add it on which is a great place to start because it’s a very low barrier to entry for the grower. They can just sort of go hang it up anywhere. You know in small area or big area of their greenhouse and then for us, it’s very manageable in terms of manufacturing but then the second generation product is actually integrating the quantum dots into the the roofing facade materials starting with a greenhouse film or polyethylene film. It’s made by an extrusion process. So this can actually be up to about sixty foot wide and that actually gets draped over and it’s lots of different kinds of greenhouses. But think of like a hoop house like this semicircle sort of shaped structure. Um. And then you have ah a plastic film that gets draped over the top of that and so we’re aiming to offer an alternative to what’s on the market today that it looks very similar. It feels very similar but just has this orange blow to it so those are the big mileusestones for you to grow expanding the team more aggressive on the marketing and then some product launches. Um. For windows. It’s really about getting our first commercial product into the market. We’ve been doing pilots and installing windows in the buildings now for about a year and getting to the point where folks are really demanding this that they want to buy the product and yeah, we we want to make sure that it’s ready for for that sort of a stage. Um. And it it is ah ah a manufacturing cross that requires a little bit of tweaking not too different than how you make windows. It’s fact that’s one of the big advantages over our competition but we need we need to really need to get our quality control down and the engineering. Um. Steps in place to have that it’s you know it’s electronic product but we’re able to have that launched by the end of this year and it’s going to couple the window with a window unit that can be retrofitted into a building with the use case which is around um, smart functionality. So there’s a printed strickckate board that has sensors and.

Hunter McDaniel

Controls a motorized blind and then could be a platform from there to do all sorts of different things.

James McWalter

Very exciting. Um, you know that’s yeah, having all those kind of different lines kind of going at the same time. Um, yeah, definitely is exciting. But also you know brings us challenges and you mentioned kind of like expanding out the sales and marketing team and you know for I guess a company like yours I would imagine you had a ton of. R and d very technical folk I’m sure there’s a lot of ph d especially in the first few years and maybe not a lot of those other kind of sales of marketing and maybe other functions. What have you kind of learned you know about building like a high performance team that tries to merge like those different elements in ah you know and in a company that is.

James McWalter

Bringing such a kind of advanced degree of science to to market.

Hunter McDaniel

Yeah, well some advice that I’ve had from several folks over the years was to hire. Ah a sales director earlier rather than later even before you have a product that person can help you help guide you or you know towards something that the market would want to buy and start doing some preliminary work in terms of. The seeds in the marketplace where that the technology is coming and maybe it’s frustrating for a season sales guy because there’s not a lot of volume there in terms of selling so you need the right kind of person for that role. But um, and maybe it’s more business development if you’ve got a b two b type of technology. You’re not going to be selling directly to an end user. Is something. That’s a little bit unique in terms of our business model compared to traditional advanced materials companies. We could talk about in a minute but um, yeah I mean I think in our case, you really have to you really have to get out there and engage with the end user because it’s something completely new. We want to understand how it. How it’s being used how it might be used how it would go up and what kind of um, ah, simple things like how do you attach the film to the greenhouse structure. Um, what kind of roofing do they already have if they have something that’s filtering or changing the spectrum. You know, maybe not in the visible but a lot of roofing materials or remove uv for example. And we would harvest the uv so just understanding how the product would be used what the needs are of the grower. How what? the growing techniques are that sort of thing the the sales and marketing team can focus on that part. Um, and I think we’re just like any other kind of ah deep tech sort of company and in the early days we were all ph ds. Think the first 5 employees all had ph ds and I have a ph d as I mentioned and so we’re thinking about things in terms of the performance and the materials and the chemistry and less about the product and how to market it and the unit economics and the go-to-market strategy and who those. Critical stakeholders are in the value chain. Um, so yeah I just yeah, had some smart people around me that were pushing me to maybe get out over and out of my comfort zone a little bit in terms of marketing and sales and business dev in the early days and that really paid dividends.

James McWalter

So yeah, and you mentioned um, you know you try to differentiate a little bit around the business model. What I guess how has your business model compared to other similar companies as yourselves.

Hunter McDaniel

Yeah, so traditional advanced material company is seeking to supply an additive into a supply chain. Um quantum dots are actually a good example of this in the early days and even today quantum dots are being manufactured and supplied into the display space and. So quantum about manufacturer like the leader nanosist doesn’t make the Tvs and I don’t think they have any intention of making Tvs. It would be very challenging to go create a new brand and compete in that space. It’s a difficult market. So what? What do they do? they license their technology to companies like Samsung and supply quantum dots to. Downstream partners not necessarily directly those oems but some of the tier one suppliers to them that supply the the components of the tvs to them. So the business model for them is they manufacture quantum dots and then they supply technology. They license technology and that’s very common for advanced materials. Um, very high margin business because you’ve got that licensing component. Um, but it’s limited in terms of your ability to capture value. The value of all those Tvs being manufactured and sold each year um you know something like 10 to $15000000000 but the revenue. Ah. Of of the companies that are supplying the dots significantly less and the reason is that they’re supplying an additive that goes into you know, supply chain. There’s markups and then ultimately there’s value created in the market. You know they can sell those tvs for some hundred dollars or whatever hundreds of dollars more than they would otherwise but the ability of that. Additive supplier to capture that value is more limited so we recognize that early on um and that was sort of a concern um and some vcs didn’t like it. You know they want to see um more revenue potential and and also the timescale can be longer right? because you’re. Relying on these downstream partners to go do something you know hopefully they will get excited. Hopefully they will go fast. Hopefully they will create the brand with you know, a quantum dot related brand like samhsung has q lid and keystas for quantum um, but you’re just sort of hoping that those things will happen and we didn’t really have the time. Um. Weight and you know and and also we were doing something very different than what was existing in the marketplace with the the greenhouse film and so we decided to have those films initially toll manufactured um, which is where you pay someone to have the product made we we supply the toll manufacturer with dots. But then we buy the films. From them and so that enabled us to go faster and then we were able to go directly to the grower from there. So um, you know, initially just to get some data some trials and understand how it would be used. But then we realized well why not just flip the switch and start selling to these guys and so that that is our model now we manufacture the dots.

Hunter McDaniel

We organize the manufacturer of finished products through contract manufacturing toll manufacturing in some cases that maybe looks more like distribution but we pull it through the supply chain. So we don’t have to wait and then we go directly to the and user and sell them the products we capture one ah hundred percent of that revenue on the final sale and that is much more venture backable type business model because you know your addressable market is essentially the entire um, you know market at that point not just the additive and then we don’t have to wait and we don’t have to raise a ton of money either right? because we are. We’re using existing supply chain. We’re using existing manufacturing capacity to make the product that’s going pretty well for you to grow and the plan is to replicate that with windows. Even though it’s a bit more complicated product and longer supply chain air value chain to get to that finished good but you know so far so good I guess the the initial.

James McWalter

Yeah, yeah, no that that that makes this one of sense and you mentioned a little bit earlier that you know it was a kind of long journey. There was a lot of you know ups and downs along the way I guess when you were kind of hitting into some of those downs those down periods. Yeah, when things may not like.

James McWalter

Might have seemed like the movie. Maybe not going in the right direction. How did you I guess kind of manage yourself in in those moments you know it’s just going to keep that commitment. Keep that inspiration through those tough times.

Hunter McDaniel

Ah, well it it does get very very difficult. Um, you know you just have to kind of um ah keep reminding yourself of the vision and and you know what?? what? The big goal is and in our case, it’s a very big vision right? It’s around helping humanity avoid extinction really. Um, and that keeps you going you know the the vision you have to really be a true believer and sort of quote unquote drink your old kool-aid if you will um for that to work. Um, but you know prioritizing your own family and health I’ve got two young kids that you know are very. Very motivational for me. Um, and help take me away from the daily grind just just you know spending a little bit of time with them is like the best medicine for any kind of ah, a bad day if you will. But it’s tough. You know there’s not really, um, a good answer there you you just kind of have to have some grit developer your sleeves and. Be willing to work hard.

James McWalter

Yeah, not and I mean having those kind of other support and mechanisms as you said you know having a family and and sometimes even they’re not, you’re as much their support mechanism and so ah, like I said you know a friend of mine always says you know happiness is solving problems for other people. And so like if you’re doing that kind of constantly. You know, put in the kind of local within the family unit within friends and all that kind of thing and then like also working on these massive problems I think there’s a balance to be had there and you know a lot of the people I think who are working on climate from a startup point of view or a company point of view are incredibly excited and I think generally like a better life. Work life balance than a lot of other startup founders where it’s a bit more of a grind to to do the 80 hours with something that might not not have as much impact. Very good hunter. It has been amazing I really appreciate the time is there anything I should have asked you about but did not.

Hunter McDaniel

Um, no I think you you hit hit all the the points I mean we we are looking to expand the team aggressively. So folks are are you know wanting to get involved feel free to reach out that can include partners. Um. Ah, you know obviously customers if if you’re interested in the ebigro technology. You can go to the website it is for shale online in small quantities and we can work with you on got kind of ah a larger project or a unique kind of greenhouse. Um, and of course investors were were always looking to connect with like-minded. Um, ah. Source of capital and you know having completed our series a in 2020. We look forward to the series b sometime in the next year or so and so you know any Bcs in the audience would like to get involved feel free to reach out. You can email me huntnter@ubiquity.com or you know, just find us online and if if you just want to be kind of ah um, ah, an armchair. Um enthusiast you can just follow us on social media. We’re pretty active there and see lots of cool pictures of glowing stuff.

James McWalter

Absolutely and we’ll include all those links into the show notes. Thank you hunter.

Hunter McDaniel

Thanks James this one.

EV Charging Infrastructure – E88

Great to chat with Tomi Ristimäki CEO of Kempower! Kempower designs, manufactures and commercializes charging solutions and services for electric vehicles! We discussed the fast-paced evolution of EV charging, electrifying fleets and more!

https://carbotnic.com/kempower

Download Podcast Here: https://plinkhq.com/i/1518148418

Remember, If you want to support the podcast please rate and review 5 stars on Apple, Thanks so much! 

James

The unedited podcast transcript is below

James McWalter

Hello today’re speaking with Tomi Ristimaki Ceo of Kempower welcome to podcast tommy brilliant to start. Could you tell us a little bit about chem power.

Tomi Ristimaki

Thank you Thank you? James. The ke power is ah is a finish and so for the ones who don’t know we are in Europe. So so we are finished fast starting manufacturers so we make for electricive vehicle buses work machines, everything that moves actually. Charting solutions.

James McWalter

That very good and when what drove the initial decision to start working at Kem power and what was the kind of early days of kem power like.

Tomi Ristimaki

Early days of campmpo is not so distant past I think the company in this form is found in 2018 but as ah as a history of the company. We belong to a company group which has been doing more than 70 years application with power electronics to welding industry. And this was skippa was found in as a new company in the group to focus in in in the new market and there’s a lot of synerys even people don’t maybe think that that welding and charting is the same thing but that so engineers view it’s it’s quite close. Application is is is there. So I think that that’s the background why it was founded exactly here to this company group.

James McWalter

And so yeah, we’ve actually talked to a few people who have spun out or been founded by you know, large kind of corporations or or company groups. Um, what do you think are the you know I guess the pros and cons of that way of Starting. Ah. Like a business I mean obviously you you definitely have some support in a way that like a typical startup might not have but you also potentially have to kind of deal with ah you know aspects of large company bureaucracy and so on.

Tomi Ristimaki

Yes, exactly ah that that was the reason it was It was like kind of like a clean start that it was powdered as a completely different company so you get kind of the pros and cons of the world so you can use the resources of the big company and the processes working and and basic the it systems and. You don’t have to do everything in the beginning because we were buying buying like the finance services Hr services from the group in the beginning now and now it’s actually independent but it gets gives a good startup point when the company can keep the keep the bureaucracy out of things.

James McWalter

So.

James McWalter

And absolutely.

Tomi Ristimaki

Can take only the good things from the past and um and concentrate on on on making the important things so looking at if you look at the first years I think it was first hundred percent r and d that it was hot under r and d in sales and now when we are looking at 2022 is all the older function are within the company already.

James McWalter

So.

Tomi Ristimaki

But it it gave a good kickstart for the business.

James McWalter

Absolutely and and in those kind of first year or 2 of just kind of pure r and d focus so were there any kind of pivots in terms of the product you know roadmap or the kind of product vision over those few years you know was Ken power going in a certain direction and and changed later or has it been always very focused on the kind of core offering you have today.

Tomi Ristimaki

Yeah, it’s been coreop offering in charting and actually that history also goes back to the company group. There was a project that we have we’ve done actually the first fat. Ah first chart is already in 2012

James McWalter

Yeah.

Tomi Ristimaki

But then the then the company who its actually the family who owns it they decided that there is not enough evs to focus it in this yet. So so part of the let’s say but portfolio ideas come come way before way before the company was founded.

James McWalter

And you know I think looking in 2022 when pretty much all the large auto manufacturers have said they’re moving fully to evs you know over the next decade you know having ev charging station infrastructure seems like ah like a no brainer. But even four years ago that definitely wasn’t the case and so I guess what was the kind of. Like the court insight that made its make sense in 2018 where it didn’t make sense in 2012 um to be so that you’re ready for this kind of inflection point. That’s just occurred in the last like eighteen months

Tomi Ristimaki

Yeah I think it’s it was the market studies and looking at the numbers which are the growth figures and and nobody actually believed in those figures at that time and and then what actually happened is a lot faster will open in the market in real life. So that. It has ah surprised me I’ve I’ve been working with demobility for the last ten years and the fast pace what has happened in just the last two years has surprised me a lot.

James McWalter

I’m so and so you know when you were kind of considering this like taking on this this particular kind of you know direction from your kind of previous career. What was like I guess the most exciting aspects about this relative to some of the other opportunities like I’m sure that were available to you.

Tomi Ristimaki

Yeah, it was actually I was I was working I’ve been 20 years in electrification in in overall but the first ten years went in an industrial looking at energy saving in industrial space and and things like that. But then I joined the startup world in 2011 working with power trains for heavy vehicles doing hybrid systems electric systems for trucks processses machinery and that was pretty early that you can call really tri dog to excavate the manufacture in 2011 about doing a hybrid or awful electric system that’s completely different than than doing it today.

James McWalter

Right.

Tomi Ristimaki

So I Got really excited on on the Ev business and and let’s say electrification because I didn’t really mind on cars or evs or trucks as a young. But then I became an electric engineer and then finally when everything turned to electric. It turned my head as Well. And um I can be called maybe Ev enthusiastic and now all the machines are really interesting because it’s actually close to your heart and and what you know.

James McWalter

And threaten.

Tomi Ristimaki

So this is this is is definitely the opportunity to join the charging business was kind of relevant move to even more electric because doing the powerrain business was a lot of hybrids and things still working with diesel engines. This is a lot lot more focused on actually making the world better.

James McWalter

So.

Tomi Ristimaki

But you’re working working in the full electric world.

James McWalter

Absolutely and and so today I guess who is like ah like a you know a core user. What and what does that kind of typical kind of customer profile look like.

Tomi Ristimaki

If you if you look at our our customers who buy our solutions I think the biggest group is transport operators today who are serving then the customers with electricity. But for us, it’s also the public transport operators logutistic companies.

James McWalter

Oh.

Tomi Ristimaki

And if we look at the mining or harbor world. We are selling to the vehicle manufacturers mostly because that mother is even let’s say less advanced yet but like public transportation or or private causes today except the mining and harpers which is fast but let’s say construction vehicles agriculture.

James McWalter

Um, and and so what would like a typical deployment then look like um to kind of get it. You guys set up for a customer for a user.

Tomi Ristimaki

They are still couple of years ago

Tomi Ristimaki

So I think that from our selection point of view that our solution is for larger installations larger charting sites and this is how we actually believe that it will happen as well that that is single.

James McWalter

Ah.

Tomi Ristimaki

Charters is not the way how how when the ebs are becoming in the norm that people actually want to charge their vehicles in a siteway have more connections and also the services around it if we talk about the private car industry. And also if we look at public transportation. Never there never is a single vehicle. There is always a fleet and this is the same also when we look at the electric trucks in the future I think our main core is the logistic centers where you charge the vehicles when you’re ah, loading unloading or or where the vehicle spent the night and and then this is kind of how we see the future is that the charting sites are somehow concentrated and our whole solution is in this this world. How we develop.

James McWalter

That’s so that’s so interesting. Yeah I think you know coming out of the kind of Fossil Fuel petroleum you know based ah transportation. There’s a very specific I guess Pattern for where you would refill right? It’s ah so it’s a well-known. Um.

Tomi Ristimaki

The.

James McWalter

Kind of site selection process to get a gas station to get a petrol station Sighted. You know you need within a certain kind of level of Demographic density. It needs to be at certain types of kind of crossroads and so on um, and then and there are there are kind of various factors. How is that different for Ev charging. Um, you know. You also have these kind of elements in in electricity whereas the the cost of electricity can vary the amount of charge time that that it takes can vary a lot relative to kind of you know gas-powered vehicles and so how do you think about how that site selection for evs is different to Fossil powers.

Tomi Ristimaki

Of course when you talk about private costs which is easier to understand for everybody. It’s it’s then you have the main way of charting is of course where you stop for a long time. It’s home or workplace and and there the equipment is is not our main scope.

James McWalter

Vehicles. Okay.

Tomi Ristimaki

Are considering the high power so in that the selection of crossroads and things like that is quite similar to the federal states when you look at the long distance the routes. But then now what we see even more interesting in there is the shopping centers restaurants where the people stop anyway. And we see that this happening in Scandinavia in first pace that actually the retail chains are taking over part of the charting because they own the sites which are already in good locations where the people stop so that you don’t need to go to the so-called gasase and fueling world. This was also the mistake what I had when I got my first tv that I thought that I need to go somewhere to charts.

James McWalter

You right? because you could basically could be sipping throughout the day or throughout you know any sort of time period. You can get it at night or yeah, very very short bursts can help as well because you’re really just trying to get enough range to get through the job to be done that.

Tomi Ristimaki

Yeah, and I think the sites where you charge the cars will be the places where you get other services so you don’t actually spend extra time for charging because you you need to do anything you need to do shopping. You need to do you need to eat somewhere. You need to stop when you’re driving. So.

James McWalter

Particular day.

Tomi Ristimaki

I think it Also it’s changing the concept for the I think the gas station in the wrong term in the future. So I think it’s like a human service stations where you have other services where the people need to stop anyway and and plan the routes this at least what I have noticed when when changing dbs.

Tomi Ristimaki

Because we don’t have at home. We have 2 2 electric vehicles and even the lawnmower is is electric so there.

James McWalter

Oh ah, lawowers are about as as polluting a yes, even it’s a small engine as it could be so having electric lot more. They very cool and and so does that kind of open up the possibility of like new types of business model then for.

Tomi Ristimaki

Um, yes, then.

James McWalter

Those stations right? If you had some sort of human services. Maybe the energy to to recharge is literally free and you can have all these other services kind of stacked on top of it because you’re getting you know potential revenue from the driver in other ways.

Tomi Ristimaki

And this is how how actually why at least I don’t know what what happens in us. But at least in Europe you see a lot of fast food ch and and and grocery stores investing in charting equipment because that’s kind of. They have already the services or when you have a new charting station and then the services are built around it. So this is kind of a different different way way of how how ah the future moves in that because it’s ah but when you look at the let’s say professional e equipmentp then of course that you have.

James McWalter

So absolutely.

Tomi Ristimaki

Another thing is because time is money if you look at for long distance trucking they will be separate size. There will be huge powers in the future because you need to move it and when you’re doing professional things. It’s not the same as as you can have ah let’s a coffee break or a lunch break in every.

James McWalter

Ah.

Tomi Ristimaki

Every every place but you need to have breaks in those businesses as well. So that’s just planning.

James McWalter

Absolutely and how you know would in your kind of experience across Europe have the the utilities kind of responded to this kind of emergent ev charging again I know in different markets. Semichies are very excited by it. Some are quite kind of scared about it because they might be already at capacity and are worried about. Ah, you know in this increased load at the end of the day when everybody gets home and like plugs in their evs all at once and so how how do you think about that kind of relationship with the the utilities. Those who are you know own the wires for the energy itself and.

Tomi Ristimaki

I think the main grid in most of the countries can handle the extra load but it it’s the let’s say the last end which has a problem I mean the living areas or shopping malls that the axle connection from the main grid to that site is limited. And that needs some investments in the world and then you need some smart charting also for for I think living areas or suburban areas where you might have a lot of cost charging so that remains to be solved in ah in a way that you cannot grow the grids to unlimited possibilities. But it’s also controlled by the price of electricity. So in a way when the charting is actually taking into account the the market price of electricity which in the modern contract can change by hourly. The people will concentrate the charting when the other loads are lower. And of course we are. We are in a country where the problem is not that big in Finland or in Scandinavia which are used to electrical heating in the houses and in Finland everybody has a sa at home which is just using electricity. So if you don’t turn the so on you have electric electric cap to charts your car.

James McWalter

But it’s a big.

Tomi Ristimaki

But immediately if you use those 2 at the same time. The fuse will burn. So of course that’s ah obvious thing but we have it easy in here with but not every place in the world is is the same. So.

James McWalter

Ah, that’s fascinating I’ve had a finished friend say to me they would prefer to lose their car to their saa. Um, and so if that if that’s the tradeoff you people might maintain theira.

Tomi Ristimaki

That is quite true even that that’s not the topic of today but the Finn wouldn’t buy a house without so night would be like buying an apartment without shower or something like this. It’s a just the culture.

James McWalter

absolutely that’s absolutely fascinating um and yes, very very very different to where I grew up in Ireland but ah, you know my my wife is definitely a fan of saunas and so someday maybe maybe we’ll have one um and so ok and so the ah yeah when you I guess. Like in terms of that that kind of like the core technology then but you guys have built. How do you think about how your frast charger kind of compares to others in the market. You know what are the kind of advantages of that kind of r and d effort that you know that was put in and in your early days of developing power.

Tomi Ristimaki

Yeah, it is this basically the system thinking and having a solution that can serve more vehicles with a single many of the competitors are still working with this kind of standalone boxes which can maybe service 1 or 2 cars at the time. And we are all the time thinking that when the ebs are really like the main mainstream way of moving then you need more plugs more systems and how to use the limited power connection to serve as many vehicles as possible. What we call in the camp power the dynamic solution that the the power of the charging point changes based on the remain of the vehicle so that basically all the capacity what you have can be re resolve to the next one when the other one has a pattern getting full. So that’s I think the core of the idea that. How you can use the limits what you have today and and and make the best of it and and be able to connect as many but cars as possible because the the time the most ill-spent time is that when you wait in a car to get your car plugged in.

James McWalter

So right.

Tomi Ristimaki

And not the time that you wait a card to be charged because then something is happening.

James McWalter

So so I guess couple thoughts on that So one I guess question is around it sounds like we’re moving into this very very data. Rich environment right? whereas before any individual driver was a somewhat a bit independent node that might hit into a given gas station fill up and so on.

Tomi Ristimaki

When.

James McWalter

Um, its its ability to communicate with other drivers is basically just captured in the price of oil and yeah and the price of petroleum over a certain amount of time you know taking into account things like supply shocks and so on which we’re going through now but the kind of world. It sounds like you’re describing is you have a ton of. Somewhat connected devices that are trying to communicate with each other tend to communicate with the grid in some way to try to optimize so that you know the end user has the best possible experience right? when they plug in. Um, yeah, their their car has the sufficient charge or their vehicle if it’s heavy. Duty vehicle has efficient charge for when they need it.

Tomi Ristimaki

Yeah, yeah.

James McWalter

So do you think about that kind of data data element and how these different devices should best communicate with each other right.

Tomi Ristimaki

That is a data element and it’s also very important to provide the information to the end users when they are charging that what’s happening and and and that’s ah also where we are I think with our data connection know how we are in a good system because we are providing even. Mini accurate estimation of charting behavior and providing that to people who are charting even if their car doesn’t have apps how to follow it up. Our charters have basically they make a website special website on every charting session and you can take it with you with your mobile phone when you’re going out so when you’re doing other things you have. All the knowledge that you need to know if the chart is happening that your battery is full in 10 minutes or 20 minutes or whatever you have so we believe in in this sharing the information and and and sharing also the information to the users if their car is the limiting factor in charting or is it charter or. Is it the fact that there might be several people charting in the site with that shares the power and and it gets the uncertainty ah away and gets the easiness and and sharing information into into into the users and that’s.

Tomi Ristimaki

What we have found out. It’s the majority of the employees What we have is Ieb drivers and we are kind of making the products for ourselves as well. So what? what we would like to see is is what we have developed to the market.

James McWalter

Yeah, it’s It’s so nice when the user testing can be done with actual you know the team itself right? like often you know people are trying to build products even my own startup that I’m working on like I am not the end user I’ve never had that direct problem and so it does mean you have to do a ton of user testing and like.

Tomi Ristimaki

Are.

James McWalter

Talking to the users constantly. But if you do actually have that lived experience of of the problem. It does make a massive difference.

Tomi Ristimaki

It it makes and I noticed myself I worked with the let’s say electric systems and and hybrid system for vehicles for 10 years and I would have only been an evi driver for 3 years and I learned more about experience on how it feels like to be an ev driver in the last 3 and. And it’s really important to have a r and d and sales group who are who are actually if it drivers they understand it a lot better.

James McWalter

Absolutely and I guess on the ev manufacturing side of things. How are the manufacturers I guess performing from your point of view. Um, as we kind of talked about a little bit earlier. There has been this kind of clear step change in the last two years where the large scale developer like manufacturers of automobiles have committed to yeah electrification. Um, but I guess some of the recent announcements around electrifying you know, very heavy duty ah like utility you know trucks like f 1 truck and so on in the United States seems to be. Kind of purely just trying to electrify an existing body like like ah from a gas power body rather than kind of thinking through from first principles like what does having an electric drive chain mean to the kind of redevelopment of automobiles in the first place. Do you expect to see a lot more kind of of evolution from ev manufacturers.

Tomi Ristimaki

Um, in.

James McWalter

Over the next few years or will we basically have ah the you know the current types of vehicles but just with an ev drive drive chain rather than a gas-powered one and.

Tomi Ristimaki

It’s a quite different I’ve been involved ah in in more and more than 150 different kind of vehicle electrifications in the past before the charging career. So Actually ah how you design The vehicle is different. And I think I’ve never been in a private vehicle I’ve been in more heavier vehicle standards and of course how you make the vehicle if you make it from scratch to Electric. You get a better design and it’s kind of like an intermediate if you just change an electric power into something Because. Ah, how the weight points and and transmission and everything is Done. You can do it a lot more clever if you design everything from scratch as electric and then you can see that development Also that if you look look at the like a Chinese market where they are only developing evs now. And and how the design is done. It’s done based on the requirements of the electrical design and not having the burden of of the past behind you and that’s even more heavier ever. You go. But what? what? I’m also saying that many of the industries are already doing that.

James McWalter

Oh.

Tomi Ristimaki

And probably the private cost has have have the biggest burden because you have like systems and car bodies which have been developed for investment on on making millions of cars and you are kind of you cannot throw that aside. But if you look at heavier vehicles. You have more easier done because your investment has planned anymore anyway, for the hundreds of vehicles. So that volume goes away and then you can develop something new if that makes sense cut.

James McWalter

Yeah, no, no, and absolutely um and it is the ah the B Two B Versus B Two C markets right? like in all industries can vary quite a bit because you do have that kind of personal selection element. You know people have been optimizing just the feel of driving for such a long time that. Ah, you kind of you know, need to respect and and honestly evs are much more enjoyable to drive in general um relative to the status quo.

Tomi Ristimaki

It’s it’s about private costs having the feeling of of using this these are like a consumer items which are based on on performance in a little but little bit. But if you look at pre equipment. They are even more based on the behavior because that’s how you earn money. That that’s the whole business. So in in that way the demands in in there might be even more because some sometimes if you look at. For example, sample the the cheapest evs. The only requirement is that it moves forwards and backwards and and brings you from 1 place to another.

James McWalter

Right.

Tomi Ristimaki

And then the performance vehicle market I think one of the big things happening in the evs you can say anything about Elon Musk I drive tesla so I like that development but what he did to the market is to make the electric cars look sexy and you’ll make a good looking car with the high performance. Because I think the early hybrids in the market they were weak and they didn’t look good and they were made main for fuel fuel cost optimization or something like that and not for the performance and it changed the whole thinking when when you made the evs look cool. And now we have seen what happens when you do that.

James McWalter

Um, yeah, yeah, you know I personally stopped reading his Twitter feed just because it’s it’s too stressful, but he yeah absolutely is kind of singlehandedly or tessla. Singlehandedly you know, pulled forward the market you know five to 10 years.

Tomi Ristimaki

And it changed the image. It’s it’s now I think without that I think you wouldn’t have even some heavy truck Manufacturers wouldn’t move into that because yeah, like it. It was a publicity for the whole industry of of moving.

James McWalter

Yeah.

James McWalter

But and absolutely and I think you can do a kind of straight line from that kind of development on Testa side through the kind of emergence of spacs themselves like even as like ah like a concept and a lot of the funding of you know and not every clean energy sp has obviously gone very very well.

Tomi Ristimaki

Um, and goation.

James McWalter

But some definitely have and have’t enabled you know some pretty cool companies to emerge over the last like 2 to 3 years so yeah yeah,

Tomi Ristimaki

And without somebody doing it first. Ah you, you might not have the situation that thediciable move move further because you need examples in the market.

James McWalter

And what really has done also is like drive fear into the heart of the incumbents of like oh you know like we we are now dealing with a company that has a market cap greater than basically the entire industry right? So onces tesla hit a trillion dollar market cap all the other car manufacturers are like well yeah. Like even though their actual amount of units produced is so much lower than this clearly this is the future clearly this is where the markets think the future is and so they then scrambled in. Ah I think a net positive way to actually respond to that and start producing a ton themselves.

Tomi Ristimaki

It has pros and consoles starting from clean table. So so you you might have other challenges then than than the electric thing but I can also understand the difficulty for traditional manufacturers to move the electrification because it’s you have done.

James McWalter

Ah.

Tomi Ristimaki

Hundred years on something and developed all the or your investment efforts are there and we are talking about the peakest change since the invention of internal compost engine to the cars or gasoline engine first and then the other variations.

James McWalter

But not absolutely and on the kind of policy side. Um, do we have all we need in place for the kind of mass adoption of evs and getting the V infrastructure charting infrastructure in place. Ah you know. The the way I kind of think about policies is a couple different elements. So one. There’s direct encouragement of something but then also there’s direct discouragement right? So maybe permitting is too difficult. Environmental fact you know environmental policy might prevent things like ev charging stations actually getting built in certain areas. Um, so how do you think about the kind of current policy picture in Finland and across Europe and potential areas that it could improve.

Tomi Ristimaki

I think the you especially in the eu there is a lot of legislat and go go going on which actually supports the electrification process and actually make it makes it a must actually from the infrastructure side I myself don’t like subsidies on the on the. My own business that much but I say the subsidies actually and and people getting the evs solves the chicken and the egg situation in a way that if you support the getting of Tvs The infrastructure will follow. Except of course for for not so populated areas and there you need government supports and and things like that. But that’s kind of the way it is but somehow somehow the heavily subsidized market also becomes weird. So that that’s from the business point of view. That’s that’s not the favorite place i’ would like to have at least the charting infrastructure. So um, coming from the market demand and it’s the way because we believe that we have the best system and that helps to win with the best system but in subsidized market you get some kind of a consultant making a specification says that the. Charles days might be like this and when you are providing then something better. It doesn’t fit to the spec that some guy wrote and that is giving a a live weird. Let’s say behaviors in in a subsidized market.

James McWalter

Yeah, it’s it’s I think the way I kind of think about it is there’s these kind of 2 kind of curves that kind of cross at some point and so there’s definitely like a role for government and policy to enable certain completely brand new greenfield markets to emerge out of r and d labs and so on um, but then. As the cost curve for that technology comes down which we’ve seen from Lithian I on batteries right in particular like that that incredible kind of decrease in cost curve now. It’s so cheap, relatively speaking and continue to get cheaper. Although of course there are supply and jaing issues and you know nothing is completely easy. But um, the governments then.

Tomi Ristimaki

Um, name.

James McWalter

Really their biggest role is really then to get out of the way. Um and kind of remove like restrictions because the technology itself is not cheap enough that that yeah the market can can respond in a very dynamic way and picking winners and loses it at that point fails and so it is this kind of interesting you know, kind of Conundrum you know I’ve looked at.

Tomi Ristimaki

You.

James McWalter

Different government programs in the United States so this organization organization rpe which does funding of like large scale kind of our you know r and d type type work for anything to do with clean energy or not just clean energy anything to do energy but a lot of clean energy components of it today and some of the ah. Like grants that they’ve made some are completely frontier technology and I’m like yes there should definitely be grants for those but some of them are things like ev charging infrastructure I’m like well I think it’s a well yeah, it’s a reasonably well solved problem right now. It’s all about distribution and business model rather than the underlying r and d and so yeah I guess how do you kind of think about that balance.

Tomi Ristimaki

Yeah I think in know overall overall the I want think Glory a little bit different direction and question I’m I’m thinking about a louder on the charging infrastructure and and and how the evies become become the norm and nor in the industry and basically.

James McWalter

Please.

Tomi Ristimaki

If you look at the government funds going in there. You you help the first stage get the the fear out of people that they can actually buy it and maybe that’s that’s a good way. But after that. Comes to second way with which will be large need for the infrastructure because when the people actually get get the evs and everybody notices that you have too little amount of infrastructure and um, um, it’s it. It’s what what’s happening I think the future lab of evs which is called Norway. And you thought that you made a lot of investment in the recent years but now that people have actually a high number of evs. The investments are growing a lot and also the payback time is getting very short because the amount of charting people are doing is is so high.

James McWalter

Bret.

Tomi Ristimaki

Ah, you might have even less than 2 year payback times for the investment which is normally pretty good if you look at the infrastructure and and and it’s changing the way and I think a lot of the countries who are now thinking that they they are doing a big investment in charting infrastructure. It’s way too little for the real.

James McWalter

5 but.

Tomi Ristimaki

Need in the future years.

James McWalter

Yeah, you know you’re seeing like single digit billions. Um, across like you know large countries like the United States and go 7000000000 in the most recently passed bill for ev charging infrastructure and at 1% of vehicles in the road in the us are ev’s um I believe what. in in Norway it’s it’s kind of approaching 15 to 20% now but particularly well all new vehicles like the numbers of course like way higher. Um, but we do have to kind of move through the existing stock.

Tomi Ristimaki

The the total stock of course is lower. But I think in Norway I think they’re closing up the new cars. It’s it’s more than 60% is is either either plugin hybrid or or electric.

James McWalter

Yeah, yeah. Yeah, and how do you? what? I I Guess with all these you know we’re kind of talking about the kind of broader context you know within that. What are the kind of next you know 1 to 2 year Milestones that Ke power hopes to achieve.

Tomi Ristimaki

I Think it’s It’s so of course we would like to be the prepared solution for easy charting all around the world. That’s not the mild goal but that that that’s a goal. Ah and we are hoping of course to see it is also in the in the background is is is.

James McWalter

Sure.

Tomi Ristimaki

I’ve been working with clean tech all my life and it feels good to come to work and to to working in this kind of solution of course the massuptional evs I Truly believe that it actually helps the environment helps the world.

James McWalter

Up. So.

Tomi Ristimaki

And I think it’s a high value I think we also see now employees that there’s a lot of Ev drivers where I think we have also a high rumper of solar panel owners and things it actually affects the other things What you do when you’re thinking goes goes that way that you are you are starting to think about the environment and talking about. Feeling good about doing things that that improve things.

James McWalter

Yeah, not so and and that the kind of number of people who are starting to work in this space and then who are you know coming up with their own kind of innovative ideas and maybe within the companies are working at or maybe they spin off and start their own things. Ah. That Yeah, absolutely incredibly bit exciting and honestly it’s the basis of the startup of this podcast is like talking to people who are kind of on on those kind of different types of Journeys Where would you let you know if there was a couple of smart people ah kind of listening to this podcast interested in starting something in in this space. Are the kind of big gaps where there’s not enough innovation where some cool companies could be potentially formed to kind of focus and solve some interesting problems.

Tomi Ristimaki

I Think it’s also I think ah, all around the space at the moment because I think there is more demand and than Supply. So So there’s a lot of space to to be around. But I think the universal payment solution things and making that easier has has a space. But also also making let’s say a I think the general laziness of of humans in nature is is giving a lot of opportunities people in in a way that if you make things Easy. You have a way to succeed in in the world.

James McWalter

And.

James McWalter

And so when you say the universal pay. Are you talking about like like Cross network for charging infrastructure or kind of more generally.

Tomi Ristimaki

Cross network of starting in from ah structures. But also the the way how the vehicles work today and and how how how generally everything works is is I think the best inventions in the world ah is done because people are lazy and they want to make things easier.

James McWalter

Earth.

Tomi Ristimaki

That’s the first thing what comes to mind when when you if you make things easier then you have a possibility to succeed and our goal is also to make the charting experience easier than refueling so that was the winning idea in the beginning. How how how can you make that easier.

James McWalter

Right? right? Yeah I guess it’s you know and it kind of goes back to deity part of the conversation about you know once you start experiencing driving evs yourself or experiencing a specific new type of way of being you start to see the problems around that and one of the things I say to a lot of people are interested in starting companies is like. Just start jotting down every annoying thing that happens over the next week like every time you see something that’s like you know, delayed you or was slightly annoying or whatever it may be just jot it down and all of a sudden that’s your list of company ideas and because of kind of the nature of the world today. So many of them have a clean tech or climate kind of relationship. Ah, to start something in and.

Tomi Ristimaki

But actually the driving of Tv is already so much more comfortable than using a combustion engine car that there is no way of going back I always say that but it’s not enough to test for one week because you get this annoying things which are not actually annoying after few months of using. So I think the the general test drive is not the good way I think it’s just jumping in and and and going into the into the solution and there is no way back if if you are if you are doing maybe some individual will will go back. But that’s that’s say I think the this justifies the rule.

James McWalter

So no yeah I fully fully agree absolutely and I guess for you you know personally you know you’ve been kind of you’ve been Ceo of the company for for a little you know for a few years now um what’s most surprised you? um.

35:27.74

James McWalter

As you’ve kind of built out the company you know from kind of your position.

Tomi Ristimaki

I think from the point of view is the last two years and the market growth we are still growing 3 digit growth and and we are still talking about last year the revenues for twenty seven million Euros and you are not supposed to do 3 really digit growth at that level anymore.

Tomi Ristimaki

So it is what has surprised me a lot is the adaption of the ev and and and how the market is growing. It’s I would have suggested like I said it shouldn’t surprise me working 10 years in theopulate. But the last two years have really surprised me on on on what’s happening. And even in Finland I think the general but public was so much against on evs and now the now you see normal people buying evs which is a big big change. They not not only your engineer friend who is just enthusiastic about technology I would like to have a new toy. It’s it’s normal people who are who are moving.

James McWalter

Sure or no.

Tomi Ristimaki

And then there’s a lot of things which is of course the increasing fuel prices and things like that is changing changing the attibus.

James McWalter

Yeah, and ah, you know we’re we’re also seeing some of these kind of supply shocks around what’s happening in you know in Eastern Europe and so on and the the kind of large effect that has on energy prices on you know oil the barrel of oil. Um, we’re seeing queues at gas stations at least in the United States that we haven’t seen in a very very long time and all those things like feed into this idea of if I have an electric vehicle that I can plug in in all these different ways I have more general security if I have solar panels on my roof I start to have my own kind of personal ability to have resilience. Not just as a. Private citizen. But also yeah, commercial and industrial applications and and starting to kind of give people a lot more flexibility and resilience around like their own energy needs to transportation.

Tomi Ristimaki

Yeah, and it’s it’s now having options also to choose from if we look at let’s say 7 years back the only option was nicent lee for tesla more or less that there. There’s a lot a lot of between and it’s how how the carif effects are bringing the new models it. It’s it’s there’s something for everyone.

James McWalter

Right.

Tomi Ristimaki

Not yet boy if we want to pull a horse trailer for several hundreds of kilometers so or Caravan or something like that and and that that might be a niche market where you have yeah we have diesel cars and things like that in the future as well because that’s difficult to achieve with the current current.

James McWalter

Sure yes.

James McWalter

Yeah, but to your point a lot of those kind of use cases I think are sometimes they’re kind of overstated um by like you know people generally talking about the market or people just even talking about their own lives like people all often like overd index on the you know 1 in 2 year events rather than like how they actually live every day and I think that’s.

Tomi Ristimaki

Ah, think solosis.

Tomi Ristimaki

Million.

James McWalter

Ah,, there’s I guess some you know that that falls on the people building the solutions right? to better communicate like and better understand you know the the emotional need to have that backup and ability to you know to toe of to toe enough that maybe the person actually has never towed before but they. Feel the need to have that option even if it’s like not super relevant right? yeah.

Tomi Ristimaki

Yeah, and and and in Finland it means going to lapland without toilet break with a trade and and has to try run thousand five hundred kilometers without any charging or that’s kind of like ah abnormal needs or. You wouldn’t do that. We even we weren a gaszzling car but that’s what you want before you can change kind of thinking that’s at least what you can read from ah any newspaper article written positively on the ev is the first comments on the comment section will be like that.

James McWalter

Yeah, how how do we get to lab land. Yes, that’s that’s fascinating.

Tomi Ristimaki

Ah, next comment will be about the children of Congo and then about coal power as so i.

James McWalter

Right? Ah, yeah, it’s always the same 3 and I’ve I’ve seen something very very similar when I’m Fred read those comments as well. Ah.

Tomi Ristimaki

And every Ed driver must know where the electricity is produced and what’s used for that that that’s a general requirement from from the people commenting. So do you really know where your electricity is made. Okay, yeah, would you know where your gasoline is coming from so it’s.

James McWalter

It’s it’s it’s ever coming from somewhere worse by definition push. Ah yes I I think you know a lot of those are to be honest, like I think sometimes fake comments. Um, like I mean again, there there are the way think about it like there are completely legitimate. Reasons for concern around an individual you know, range anxiety like maybe going to La Plan doesn’t make sense but you know if they have ah parents that they want you know grandparents to to see their children and that’s like an extra few hours away. Yeah and those are definitely kind of understandable use cases. Um that that we have to kind of you know, respect. But I agree like there’s a lot of these kind of random statements that are very very consistent and seem to be coming out of you know often kind of Troll farms that that kind of thing. So.

Tomi Ristimaki

And and it’s not always troll farm ja individual with a lot of voice and and lot of opinions. But it’s it’s something is not real. Something is real but it’s also the general. Um, let’s say resistance against change and this is a big change and it’s a change of thinking. Ev behaves in a different way and and you need to think you’re traveling in a different way. it’s it’s it’s actually not so stressful. It’s a way of thinking and looking at range anxiety. It’s a very normal discussion in the areas we don’t have a lot of ebs. You don’t see that anymore happening in Norway.

James McWalter

Right? yeah.

Tomi Ristimaki

But there’s a lot of discussion on charging queues and the problems with charging queues that you have to wait 2 hours to get your car to charged and that’s actually how it changes and that’s also where our our sal solution kind of addresses it that you have to have the places to block the car so that. You are not waiting in the car to get get to the get to the larger. Yeah.

James McWalter

That’s your opportunity. Absolutely tommy. It’s been great. Really enjoy the conversation before we finish off is there anything I should have asked you about but did not.

Tomi Ristimaki

Yeah I don’t think so I think you ask a lot and I could talk forever. So so I think we are not jeopardizing your time time here. Yeah, thank you.

James McWalter

No, where is it all well to I mean thank you so much is is great chatting 

How to find a job in clean energy – E87

Great to chat with Sam Steyer, Co-Founder and CEO at Greenwork, Greenwork is a software company that connects workforce training programs to employers in clean energy, transportation, and the trades! We discussed ways of increasing the industrial workforce, the importance of finding the right co-founder,  trade schools and more!

https://carbotnic.com/greenwork

Download Podcast Here: https://plinkhq.com/i/1518148418

Remember, If you want to support the podcast please rate and review 5 stars on Apple, Thanks so much! 

James

The unedited podcast transcript is below

James McWalter

Hello today. It’s my absolute pleasure to be speaking with Sam Steyer cofounder and Ceo Greenwork welcome podcast Sam Steyer brilliant to start. Could you tell us a little bit about greenwork.

Sam Steyer

Um, thank you James Thanks so much for having me on. Yes, absolutely so ah greenwork is a software company and we are helping ah clean energy companies and generally future looking industrial companies hire skilled trades talent today. We do that by offering. Ah, platform for trade schools and workforce development programs where anyone who is a student or a core member or customer of one of those programs can make a profile and get help on greenwork in building their profile and getting their construction history together. Ah, from the trainers and career counselors. They’re already working with in real life. The schools can organize their job placement and career readiness place process in 1 place and then employers can log in and connect with schools connect with students and hire. Awesome tradespeople who are passionate about their industries and who are getting started in their careers.

James McWalter

So super cool and what drove that initial decision to start greenwork.

Sam Steyer

Ah, my interest in greenwork really grew out of working on the twenty twenty presidential campaign I’d been a software engineer in clean tech and a software founder in clean tech but on the campaign I was. You know, surrounded by the democratic party thinking around the green new deal and build back better and my dad tom steyer was running on a climate message. So I was out you know going to factories and projects related to renewable energy and talking to americans across. The country and especially the early primary states about climate and it just became so clear to me that there’s this amazing opportunity to grow and and rebuild a. Ah, highly paid. Highly trained large industrial workforce in the us and then it was absolutely a necessary step to work on climate and an amazing thing in and of itself and so I wanted to build a company that would play a small role in supporting that broader mission.

James McWalter

So That’s so Interesting. You know I think those of us working in tech were often quite insulated I Guess from you know more kind of blue- colar type work and so as you were kind of starting to have those kind of conversations. What were the initial surprises as you talked to people in the ground that kind of inspired. You do kind of start green work.

Sam Steyer

Yeah, um, the first was I visited the largest wind tower manufacturing facility in the United States in Pueblo Colorado um, it’s actually really cool because it is right by a decommissioned you know Fossil Fuel drivenn steel mill and a decommissioned coal plant and now there’s a massive wind manufacturing facility which I found emblematic. It’s also just in at so brief aside an amazing city puebo Colorado that has 4 congressional medal of honor winners for a relatively small town which is very. Ah, cool and you know statistically unlikely. But um so I was there I got to tour this incredible facility and while I was doing the tour. They let me know that they were sort of hiring for every skilled trades role and couldn’t find enough folks industrial painters, welders, etc and I was shocked by that because I felt like okay this is a highly paid job. Doing really cool future looking work I’m surprised. It’s hard to find people and that sort of set off my interest in learning more about the skilled trades and ah the shortage of people entering construction. Um, so that was one and then I would say the other experience. To me that was sort of was meeting all the staff across the campaigns. You know the nature of the primary is the campaigns are always going to the Sam Steyere place for the Sam Steyere events and I just met so many young people whose plan for their life was work on this campaign. Ah, help the Democrats win and then go get to work implementing climate solutions and I felt like okay, there’s this you know some of those people are going to be policy activists or or white collar business people but to solve climate. We need to move a lot of atoms not just bits. And some of these people are going to go build awesome careers being tradespeople and engineers and technicians.

James McWalter

And in terms of like people. Yeah not being enough people to do all that kind of construction move all those atoms is it more that those people do exist but they’re like in the wrong places geographically or even in career stage or is it. We just. Have a massive gap in the number of people who are just not trained for these kind of Roles. So.

Sam Steyer

Um, so I think it is more the latter though I will say that that we have heard over and over again from you know, contractors and experience construction experienced manufacturing people that someone who has mastered a trade is much. Way far ahead at doing ah, you know, different kind of trades work than someone who’s starting from scratch so there is a big opportunity for people who have been you know doing ah related trade to come be senior theaters in clean energy companies. Ah, but there also just are not enough raw number of people and I think that’s because ah, we didn’t have positive enough messaging about the trades we didn’t share how much money people we can make it can make how with people how much money they can make in the trades and in some cases we’re not paying people enough or offering. You know, good enough benefits of vacation and safety and the things that make it good job up to people in the trade. So I think there is a need in messaging and resources to to reinvest in the industrial workforce in the United States just to bring in more people.

James McWalter

And we also have this yeah this concept the great resignation that’s been happening over the like the last six months yeah and that seems to be happening basically across the entire economy um people are you know are trying to upscall and people who are already I guess upskilled. But maybe in a lower skill job than they initially committed to. Um, they want to kind of move on to something bigger and better often with kind of an impact level. Yeah how you thinking about that I guess that macro piece is that helping to be a bit of a you know tailwind for what you’re trying to build as well.

Sam Steyer

Um, it. It is because companies are really reckoning with hiring problems and so that you know makes them more inclined to talk to us the way that I really think about it is it is. Holding companies accountable to offer good Jobs. You know in ah in a world where there are more jobs than job seekers and where people are sort of taking a step back to look at what’s happening in their lives jobs that were underpaying people or offering a you know, unfriendly or unhealthy environment. Um, but. They cannot cut it anymore and so the the way that you know I think that’s a good thing and the way that we try to reflect it in our platform is we um, won’t let you know any employer post any job. We um, you know want w two full-time Jobs. We want fair. Wages and if we have people through the platform get a job at a company and you know report back you know a number of them. It doesn’t work out and they say it’s not a good work Environment. We would remove that company from the platform. So I think it has meant. You know companies need to think harder and work harder to offer good jobs and I think that’s a good thing.

James McWalter

You absolutely and then in terms of the the kind of company getting up and running right? So You know you saw this kind of massive need. Um and I believe you have kind of a cofounder. You know what were those kind of interim steps to kind of go from this. Yeah,, there’s a big problem to be solved I have this idea. Up to you know I have I have a startup and cofounder and we you know we have a product and all that kind of thing.

Sam Steyer

Yeah, yeah, great. Great question and I’ll tell you what I did and also you know ways in which I would do it differently for for entrepreneurs who are listening because I definitely did do everything right? Um, so I I decided I wanted to do this sort of an August Twenty Twenty I spent

James McWalter

Right.

Sam Steyer

Ah, the rest of 2020 just organizing conversations with people who I thought would have a interesting perspective or who who might you know were sort of a good model of our future users to to ask them and to try to learn more about what we should build through that process I was extremely lucky to meet. My cofounder gotham j a raman he was a good friend of a good friend and he had um, ah recently ah been cto and cofounder and built a business called rickshaw that was bought by Jodache and then he was working at Jordache and after a while at jordash he decided. He wanted to do something focused on climate and so he was when I met him on a sabbatical trying to figure out a next step related to climate and um I after 1 or 2 conversations just had an extremely strong. Intuitive feeling that he was the right co-founder for me that you know why values it was just someone I really liked and wanted to spend time with and and that you know I am a software engineering background but probably not or or certainly not qualified to be a cto um and whereas he’s really really strong. Ah, engineering and product person who’s a great cto and um I think so I I realized I wanted to to be cofounder at First. He just wanted to sort of be an advisor and help explore the idea together and then a few months later he came on as co-founders sort of December January Twenty Twenty one um I actually had my first child was born in January Twenty Twenty one my wife and I welcomed our son and so I took paternity leave and or I guess I didn’t technically have a job but I took so you know a step back and then we.

James McWalter

Button Sure course. So.

Sam Steyer

Incorporated the company and sort of started operating on March thirty first twenty twenty one

James McWalter

And that’s pretty much exactly a year ago from when you know we’re recording this or even actually when I think this might be coming out. Um, and so you know and that’s I think having personally just also just gone through the kind of cofounder search process and finding also an amazing cofounder which for the.

Sam Steyer

Um, yeah.

10:18.84

James McWalter

Audience Sam Steyer also has met to charles my co-founder and charles and I would be doing our own podcast here in the next couple of weeks to talk about what we’re working on. Um but it is it is kind of remarkable like I probably easily talk to well over a hundred people in that co-founder search and then when you find them it just feels very easy and and you know the default the default is yes instead of like.

Sam Steyer

Um, yeah to yes completely agree.

James McWalter

Figure out ways to say no you know Um, so and so and you know in that’s kind of I guess in the last year you’re like okay you know you have this kind of founding team. You’re ready to go. You have a clear you know need within the market. Um. Were the kind of different like product ideas I guess right? because there’s a lot of different ways to potentially kind of solve this problem. You know what? what were your kind of thoughts that as that kind of went along. Yeah.

Sam Steyer

Yeah, we yeah gosh we have been through several. Um, so we actually originally launched as an online cohort based class for people to transition into ah technical solar jobs. So we. Um, we worked with a really awesome experienced solar technician to build a very short online course five total hours of live instruction as well as some sort of quizzes and tests and we would offer it for free and then. Ah, try to help the graduates get jobs and charge the companies that hired them a placement fee. Um I still think there’s definitely room for more online education in the climate space and and there’s some cool companies building it. But in our case for that role. We learn pretty quickly that hands on. In-person training was important both you know to learn how to do stuff that’s at least partially kinesthetic. Um, and second to understand the the challenges of being a solar installer you know fear of heights and physical demands of crouching and lifting heavy stuff and feeling comfortable in a construction site environment. And that we were you know, not even though we were trying to tell people those things that that we weren’t conveying them that well in an online course and um and so it wasn’t a good. It wasn’t enough preparation and it wasn’t a great you know, vetting mechanism to figure out if people it was the job as a fit for them so we did that for a few months and then. Ah, you know, adjusted to what we are currently building. Um, so other ideas we considered are were instead of building the marketplace between people and jobs building the marketplace between you know subcontractors or you know. Contract small construction firms and big companies I think I think there’s lots of things that are needed to approach this problem. We ended up feeling really excited about what we’re focused on because of what we were talking about earlier that we felt like we need just more overall people to have skills and experience. In the trades and that we need a ah more inviting more transparent path for people to get there and so we wanted to build that.

James McWalter

It makes a ton of sense. So just just quick show note: um your Mike just started just just in the last minute just started hitting against maybe the table or whichever but is up to the up to up to about 1 minute ago everything was fine but nowheres at all.

Sam Steyer

Oh sorry about that I’ll step back from the table has this made it a little better. Okay thing.

James McWalter

This is this is perfect. This is perfect I think you just wanted if it hit something that was the only thing um and Q were back in and so once you kind of as you kind of iterated through those I mean it sounds like you were doing actually a little bit of coding you’re getting it actually launched seeing where where the sticking points were. Um, or was this more kind of user kind of qualitative user research based I Guess how was that kind of entire process and then what was the point where you were like oh this is very clearly the the right thing to move forward with.

Sam Steyer

Yeah, so we right or wrong really had a bias to try things by launching them. Um, and so we we actually created our online solar installlar course we actually taught 9 cohorts nine one week cohorts of it.

James McWalter

Oh Wow I.

Sam Steyer

Um, and we sort of lucked into what we are now building because we as one of many recruiting tactics to get people to take the course we approached the California conservation core which is a state. Ah. 1 to one and a half year service program where people go and learn either land conservation firefighting or ah energy efficiency and for the energy efficiency folks they work on state buildings and it’s just an amazingly cool program in my opinion. It’s been around since one 76 it has. Really high. You know review from the people who go through and it’s a mix of sort of like hands-on technical skills learning to work in challenging environments with a team and then also sort of like spiritual conservation like they have a ah reading list of amazing. Poetry and writing’s about working with the land and working outside so but a brief aside but so we’ve got a number of students from the Ccc the California conservation core and we found that in teaching our class our average student who we acquired off an online channel who had little. Construction background was struggling to get a job and if they got placed in a job. Not always finding it to be a fit in both directions but that the folks who took the course from the Ccc who were very close to finishing their service who then worked with us to get a job. We’re getting a job. Job offer in the first interview and then we’re having a good outcome on the job and so it made us think oh like going through a trade school or a workforce you know conservation course some sort of training is a really. Strong signal that someone will get and succeed in one of these jobs and so we decide to just reorient towards working with those kinds of programs.

James McWalter

And so you’re kind of been moving into something with some sort of kind of Marketplace dynamics right? So you have you know the like the the trade schools on one side and then the employers in the other.

Sam Steyer

Very much. Yeah.

James McWalter

And when you in Marketplaces you always have a bit of a cold start problem and always one side is harder than the other. How do you think about those dynamics and.

Sam Steyer

Totally yes, so we we definitely face all of the cold start marketplace dynamics. Ah we we believe that the hard side of our marketplace is talent that. You know if you can find ah great tradespeople and technicians and maybe engineers. There is a huge demand for them from the kinds of companies that we work with um so to solve the cold start problem. We we have. Trying to do are 2 things 1 limit geography. We’ve only launched in the Bay Area Sacramento in Los Angeles and the idea being if we can get to you know, ah honor number of users if they’re dispersed across the country. It’s very unlikely that we’ll have matches between jobs and people. But if we if they’re concentrated. Have a much better shot. Um, and the other thing that we’ve done is try to build helpful tools for the supply side that are helpful even in the absence of looking for a job or having the right job on the platform. So we have been. You know you can use greenwork. To work with your career counselor to build a job search profile and a resume and a cover letter. Um, you can see other folks from your school and what they’re doing their job search and so we’re trying trying to you know, build something that really listened to and solve problems for a trade school ah to. To have a way to sort of build up supply in because they’re awesome and we want to help them.

James McWalter

And then in terms of the trade schools right? So I would imagine they have some ah yo some courses or diplomas or or certifications that are very well fitted right? like explicitly maybe renewable energy related others will be something more akin to construction or generous construction general contracting. You know. Electrician that kind of thing and so how do you think about? you know, pairing things up relative to a very very specific ah type trade schools skill into a specific role and yeah, and yeah, how do you kind of think about that balance.

Sam Steyer

Ah, we focus almost completely on the latter kind of background that ah you know our belief is it is hard both to learn and to sort of have the desire. You know the right desires and attitude to succeed as a. Construction worker or an Electrician but that the um, the a like the new learning that someone needs to do from that skill set to to succeed at a solar company or a battery company or a Ev company is much smaller than the learning to build that. Core skill set. It’s much more like we need good tradespeople and we need them to work on these problems. Not like we need hyper specialized people who are you know, really different than an Electrician um and then also on our experience companies do want to teach on the job. They want to teach. Ah, specific to their product. They want to teach their way of doing things. They they want to and so so it almost does it make sense to bring them someone and say like this is a fully finished person who knows how to do everything you do because each company has little things they do differently. The key is. Connecting with people who have the core skillset and who understand the rigors of these jobs and are are going. You know, excited for them and able to thrive.

James McWalter

And how do you think of it. You know your kind of key metrics. So is it Yeah people placed people who are still there after a certain amount of time that kind of thing.

Sam Steyer

Yeah, so we um, we haven’t I mean are are given that we’re working with a marketplace that has sort of 2 sides sort of three sides we we have a number of metrics. It’s it’s not super simple but basically ah first we think about. Building supply you know number of job seekers number of schools. Then we think about ah connection and placement. So a number of interviews number of placements and then critically you know retention in the job because we want to help people get jobs. They’re really excited about and we want to help companies hire people work out and then our business model is. Greenwork is free for job seekers and for schools and we charge ah employers on a saas basis and so we have sort of standard saas metrics around monthly recurring revenue and growth and churn.

James McWalter

And in terms of the employer side. So I’d imagine it’s a ton of solar especially if you’re in California maybe a couple of wind. Um are you seeing kind of any interest in some of these other you know green infrastructure type elements. Yeah ev charging stations hydrogen those kind of things.

Sam Steyer

Yeah, absolutely so so most of our existing employer base are solar contractors but we have absolutely have seen a big opportunity in ah energy efficiency building automation green construction. Um, we’ve had the. Ah, we’ve definitely seen a big opportunity in building out and maintaining charging infrastructure that we don’t actually have a customer in that space yet. Um, and then the um I would say the biggest surprise to me very pleasant surprise is um I’ve seen a number of awesome advanced manufacturing. Projects in the Bay Area you know companies that are building a factory or a product design facility in the bay area who need assemblies and fabricators and cnc machinists and and other sorts of high skilled hands-on rolls.

James McWalter

It makes sense and yeah, it’s ah super exciting. You know people literally like building out like these kind of future kind of use cases and in terms of the um, the trade schools themselves and you know in in Ireland trade schools are like a very kind of integrated part of the community part of education. Um, yeah I grew up. Yeah in in a kind of farming background and like the default is like your construction every day you know for most your your teenage years and so there’s like a very clear pipeline into getting some somewhat certified and then moving into kind of more professional type type use cases. You know and I know other countries like Germany and so on have also these kind of incredibly like sophisticated ways of of matching people. You know, matching people with skills and interests and and all that wouldn’t trade. How is the Us doing in general like do we have enough trade schools are they to write types of trade schools to kind of hit the numbers that we need to over the next decade

Sam Steyer

Um, so my opinion is without just casting any aspersions at the existing trade schools some of which are fantastic. No I think we need more I think we need them to get more. Attention and have more prestige. You know like if you if you ask the average person to list as many colleges as they could and then as many trade schools as they could um you know most people who lift many borders magnitude more colleges. Um, and ah and so no I think we need more. I would also just say we right now work with schools that we ah you know consider good feeders for us. But that are really different like we have 2 year community college programs we have twelve week nonprofit training programs we have state conservation core. Which are somewhere between a school and a state or national service program so there so there are awesome programs out there. But I think we need more more attention and ah a more sort of organized and standardized system.

James McWalter

And the trade schools themselves. You know I’ve talked to a few people and not through the podcast. But in general who are trying to sell to you know, educational institutions governmental institutions and so on those sales cycles can be you complex and long even when maybe the ticket price isn’t even that high and so. How do you? Yeah, How have you’ve kind of found that. Um you know are are some of the trade schools. Incredibly Excited. Some are more difficult.

Sam Steyer

Yeah, um, so we are in a slightly different boat than a product that is like at core selling to schools because our product is free for the schools. But um, but my general impression has been the administrators and teachers and career counselors at these schools are. Fantastic, fantastic like really committed for the right reasons really smart, really practical. Um and are understaffed and over committed and so the I think the slowness that people see in the sales cycle is they’re selling to someone who has. 18 priorities on their plate and is doing their their best and so what we have tried to do is make sign up and onboarding incredibly easy and fast and impress upon people that we don’t need to start with a schoolwide rollout that like if they have. 1 technical education program and 1 instructor who’s willing to hold the admin account and 20 students who they can email their school greenwork link to that. That’s enough to start and then we try to land and expand.

James McWalter

So super interesting. Do ever any of them. Ask you to come in talk talk to anybody get get on the ground kind of thing.

Sam Steyer

Yes, and we’re trying to you know?? Um, we we obviously started the business during the pandemic and we’re very remote and online at the beginning. But um, we’re trying as much as possible to get in person with schools and companies and it it. Um. They ask us to to do it to sort of onboard and help people set up their accounts but it is actually a gift to us every single time we go. It’s worth It. We always understand more learn more build a deeper relationship by going and meeting people in person.

James McWalter

And yeah I think one of the fascinating things about this whole space is that the perceived risk of getting a job is um, probably higher to the average person than what it actually is because it’s so opaque you know I’m ah I’m currently in and in South Bronx at my mother-in-laws and all the ads around here. Are you know. Basically force trade schools in spanish um, but there’s kind of ah I guess a gap between what’s being advertised and like the actual role that people will be doing right? It’s just kind of like talking about the course itself but not really kind of filling in the gap of like you know this is a twenty thirty year 40 year career

Sam Steyer

Um. This minute.

James McWalter

Ah, this is the actual income you could have this is how you would become you know a respected memory of community All that kind of thing. So how do you think about those kind of community kind of social elements that inspire people to kind of engage in. You know the kind of jobs that we both agree need to be you know, need to have more of.

Sam Steyer

Yeah, that is a really smart question. Um, so I think 2 things 1 is our goal is ultimately to make our software tell that story in a transparent clear way. You know show people who have graduated from this program now work at these companies. They work in roles where people are making this much money here is a video of someone who has a awesome career that started at a trade school talking about their career that sort of thing. So I think that’s one is just trying to make that information much more accessible I think the other is. Um, trying to dispel a sort of Stark distinction between trades and white collar. You know it. It doesn’t make sense to me and it actually is usually not true that the whole senior leadership team of a so of a excuse me solar company would come. From a white collar background when a solar company is you know in most ways, a construction company and a core you know, moving atoms. Um, and and so I think ah making sure that it’s actually true that there are are roles that start as. You know, hands on technical roles and and laid to a career path in a very senior position of leadership making a lot of money and highlighting people who have walked that path.

James McWalter

Its super purchaing and you know there’s also this and I’d love to kind of get your take especially having you know seen the kind of internal kind of political machinations and and um on the kind of policy side over the last couple of years. But what’s been really interesting is this kind of. Set of thoughts around what some people are calling new industrialism others have called the abundance agenda these are coming from people like Ezra Kline and Derek Thompson and so on were you talking about how the United States in particular over the last you know few decades just has not built enough things internally right? and we just need to do a ton of that and so obviously build back better is like this. Very big shiny like effort at a kind of moving policy in that direction I know the the motto of your company is build the future. You know how do you think that policy can interact better with the kind of work that you’re doing day-to-day to kind of accelerate that you know just building more out you know things getting more atoms and you know deployed.

Sam Steyer

Yeah, um, that is a great question I think for one ah the one the way that would sort of most directly impact us and that I really believe in is more public funding for. Ah, trade School Education Community College education having less people take on college debt. You know I think that there’s there is a lot of innovation in Silicon Valley around finding creative ways for people to pay for vocational education. But I think it. Ah. It’s hard because the benefits to vocation to education not to vocational education accrue to the person who’s learning over the rest of their life which is a really long payback time and accrue to you know all of us the the people who work with them. The people who vote in the Sam Steyere elections as them. The people who live with them and so I think there’s. Education so valuable. Ah, but it but it usually or often makes sense either for people to pay for it through tuition or just for society to pay for it. So I think more funding for education and including trades and engineering education. Um. Is is 1 thing and then I think the other thing which I think the byed administration is doing a great job of is using the public sector to model good things to the whole country so you know buying ah 0 carbon advanced. Infrastructure projects with federal government having good labor practices and high wages for the people who work on those projects and it is a little more abstract but like setting an exciting positive example that we can build really cool, big things and so I think. You know most of the the private the public. The private sector is bigger and a lot of the the sort of stuff we need to build is going to end up being private sector. But I think the public sector can set a really strong inspiring example.

James McWalter

And yeah, that that makes some sense and ah you know one of the ways I think about how these things play out is like there are different types of levers right? and so we have you know to tackle climate. We need to have all the levers you know being used in similar ways. But it’s you with activism lever you know you have ah you know. Policy lever. You have you know, kind of large corporate enterprise lever you startup levers you all these different for kind of levers that kind of hit pieces of problem in different ways and 1 of the things I’ve been kind of thinking a lot about is how government and actual startups I could potentially could be interacting better and so you know on 1 side you know should startups. You know.

James McWalter

Ah, as well as you guys are as as well as like the kind of thing I’m working on should be more involved should we be more involved in the political process and on the other side you know should governments be doing more to kind of encourage successful startup formation or is it really just you know it’s like oil than water like those 2 things have such kind of ah you know opposite methods of like thinking about risk and all those kind of things that.

James McWalter

You know it’s better for us to kind of be somewhat siloed and and figure out problems and in kind of unique ways.

Sam Steyer

Um, I’ll answer your questions reverse order. It is not oil and water and we definitely should have relationship with each other it. We almost must you know we’re working on the Sam Steyere huge problems living in the Sam Steyere country. Um I don’t think that startups.

Sam Steyer

I Mean maybe they should but I I would actually not frame it as startups should participate more in the political process I think startups should interact more with the civil service and the apparatus of government and I think that there is a conception among startups that it is more difficult and less efficient than it actually is. You know I think if if you call a workforce development board or a city or you know a part of the department of Energy. You are typically pleasantly surprised by how responsive and helpful and eager to work Together. You will find the person on the other end of the line to be. Um, and and and so I do believe that that sort of startups should be interacting more with government but I don’t think it should be to set policy I think it should be to you know, do projects and um, not always but often. Government is a convener and a funder and a priority setter but not, you know doing the the execution and so I would encourage startups to figure Out. You know what their state and local government is doing and seeing if you could fulfill some of it and I think oftentimes you’ll find if you can. You’re not replacing Government. You’re replacing like an old school software company. That’s good at selling to government and you probably can offer something better.

James McWalter

And then you know I on I guess startup somewhere more generally right? So I believe you went through y combinator and would’d love to kind of hear quick thoughts on the on that experience. But I guess specifically around you know the number of you know climate or you know.

James McWalter

Large global problem focused or impact focused startups in your cohort and I guess how did I guess the very impact focus startups interact with I Guess the less impact focus but maybe still working on you know, large B Two B Saas problems and whatever it may be um, like is there any I guess tension is there a need for you know. People working on on the very impact side are they looking across and me like hey guys you know, maybe maybe you know we should evangelize and onto the impact side and and how do you think about that dynamic.

Sam Steyer

Um, so we we were in the Y Combinator Summer Twenty One batch. Um, it was fully remote. We had a really good experience I think it that um this is not what you asked, but just to give the the context that one of it. We kind.

James McWalter

So please.

Sam Steyer

Incredibly valuable was the partners at Ycombinator have just are very smart people who have seen an incredible amount of startups at our stage and so they were able to guide us direct ah direct us and in some cases sort of push us and hold us accountable to make changes that would have taken us a very long time to figure out on our own. Um. So it. It was really helpful in that regard. There was not a tension at all of trying to be an impact driven startup in ycombinator. In fact, most people I think had a sort of impact lens or you know would be like whoa cool like you’re working on climate or well cool. You’re like.

35:23.44

James McWalter

Right.

Sam Steyer

You know, building something for a blue collar audience that that made it easier to sort of relate and people were supportive of it. Um, ah, there are plenty of climate companies in y combinator. In fact, there was a recent Paul Graham tweet about how there’s a bunch of exciting new climate. Companies why combinator and maybe it foretells a trend in terms of how startups can interact with each other and push one another I think ah at the stage that we were at last summer it is so hard to. Get customers find product market fit. Ah you know, figure out how to do all the things that are expected of a founding team with the time in a day that there’s much more emphasis and sort of shared learning about how to. Get your company off the ground and how to make things work and that is common across you know the companies that are doing b two bs or or climate or whatever and I think that that and so it felt very easy to relate to other companies. It felt like we were mostly sort of strategizing with each other about how to.

James McWalter

You right? right.

Sam Steyer

How to do those things how to make a early stage business work. How to learn from your customers and try to get towards product Market fit. Um, so I think that that conversation about impact lens is super important and I but I could imagine it. Dominating more with companies that are further along in their journey right? right? right? that that’s that is being honest, you know what it what it has felt like and why it’s felt very easy to relate to other early stage startups.

James McWalter

You right? when you’re default dead like everything everything is about just being getting to default alive.

James McWalter

No Absolutely. Um and I guess for you Personally, you know if you were starting out because I know you you had previously cofounded station a and and had these kind of other kind of experiences working at different companies. Um, so. You know some some young person are not not so young, but they wanted to kind of start a company over the like the next little while um, what are something that I guess you learned or you’re like oh I wish I’d known that before I before I get it set out and running.

Sam Steyer

Yeah, so I’m first give advice that is is very common already that I think is cliche but I think is true which is you have to launch and start operating and that is actually a faster way to learn even though it’ll feel you know. Challenging and scary and it’ll be tempting to do more analysis and conversations the things that I’ve found that I think are less commonly known that were more counterintuitive to me. Um, ah oh and the other one which is cliche but it’s definitely true. Is. It’s more fun and easier with a cofounder and and quality of cofounder is so important you know it’s worth time and effort to be the right person. Um, the things that I found that I that were more surprising to me I would say number one when I started I thought of it as like there’s this sort of challenge to get investors challenge to get. Customers challenged to get employees challenged to get you know media whereas now a year in I feel like customers is actually the only challenge and everything else if you can get customers will these you know if you can get sales. You can definitely get investors in media. You know and then employees is hard but it’s sort of a second order problem. You need to hire them to work for a business that exists. So I really if I if I was starting again with think much more about like who are my first 5 customers because that’s what’s really hard. Um, the other thing I would say is there’s a huge amount of writing and talking about. Ah. Product market fit. But I think there’s an increasing amount of writing and talking I think is really smart about founder market fit you know the startups are a very long journey. It is much easier to work that hard for that long if you love and feel authentic about what you’re building and a lot of the early sales will be 50% selling yourselves and if you are a effective you know logical face of the business. It helps a lot. So I think ah, you do need you do need product market fit but also it will be easier to get product market fit and and a lot more fun for the you know 10 years of your life. You’re pursuing it. If you pick something that that stems from a personal mission but also like a personal love for what you’d be doing day to day you know if if you love math and data start a business that has a big you know data science and Ai component if you love marketing and brand. Start a business that’s like an online community that kind of thing.

James McWalter

Right? I guess like so much is so difficult and getting customers as you said is is by far the most difficult all the other bits have to be fun and easy just because that’s your default that’s your default emotion and so if it’s like ah you’re waking up out of bed. Um, you know and I’m sure you’re similar like I’ll like I’ll wake up sometimes at five thirty in the morning and I’m not.

Sam Steyer

Um, yes, yes.

James McWalter

I Don’t feel stressed I’m just like so excited to think about what we’re going to be doing over the next like day I’ll just be like woke up like woke like excited and it’s all stressful of course but like’s it’s also like I can’t wait to you know to get through breakfast to to get going at these things right.

Sam Steyer

Yeah, totally seen.

Sam Steyer

Yeah, and like there’s going to be some parts that are gri like I don’t think Eddie would like cold call it customers or you know figuring out how to set up accounting or and like if you’re the the Ceo you definitely have to do both of those things and um. And so like make sure as you’re saying make sure the parts that are content are something you really love Yeah yeah, the comedy hit of the two and.

James McWalter

Or cold calling quickbooks which is a recent experience I had basically to try to get something up and running um and also no absolutely I also believe you’re a reser ah reservist at San Francisco Fire department um

Sam Steyer

Um, yeah I am.

James McWalter

Which which you would text me but also my my researcher found independent lays I wanted to ask you what that experience is like.

Sam Steyer

Um, it’s awesome. So the the san francisco fire reserve is a a volunteer organization. It started during world war ii in order to have a domestic fire department in case of some sort of attack that caused a fire especially when you know lots of. People were in armed services. It has gotten much smaller since then but carried on you know since I think 1942 it um is a once a week organization where we meet on Thursday nights to practice and then if there is a 3 alarm or greater fire. In San Francisco we’re called to go to the fire and assist the professional fire department. You know we’re doing the sort of support kinds of roles. It is primarily made up of people who um, plan to become professional San Francisco Fire department firefighters and are going through the process and are using it as a way to learn and build their relationship with the department. Um, but there are also some folks like me who are who for whom it is the the end goal. Um, and it’s it’s really fun like we get to go do. Cool physical thing you know spraying hoses and throwing ladders and that kind of stuff and it has a bunch of really nice. You know, sort of community civic oriented people. Um, who who live in San Francisco and it I’ve only been doing it for a year but I love it and it’s been real.

James McWalter

Yeah, and I think having some sort of community engagement is something that I always promote to to friends and and founders and and all that kind of thing. It’s so easy like when you’re you know, servicing a global market and all this kind of thing to forget that so much change and impact can happen.

Sam Steyer

Treat.

James McWalter

On the road and it gives you just a ah bit of perspective on how much just thought the people are living and other people are kind of going about their day that that’s often missing you know when you spend your life on different slack communities. So.

Sam Steyer

Totally totally agree and it yeah it has totally enriched my you know I’m a deep San Francisco lover already. But it has even further and enriched my feeling of community and connection with the place I live which I really really really value.

James McWalter

Sam Steyer It’s been amazing. Um, is there anything I should have asked you about but did not oh.

Sam Steyer

Um, yes, 2 2 things. Ah 1 is both with the the startup and the San Francisco Fire department you know Thursday night volunteer opportunities I’m married and have a 1 year old son both require. A lot of time and put me and the startup puts me in a stressed out mood sometimes and so I want both say a huge thank you to my wife Tessa who’s incredibly supportive and awesome and also just let any ah aspiring founders know that if you are in a long-term relationship you you know your.

James McWalter

So amazing.

Sam Steyer

There is also something your partner is signing up for when you start the company. Um, and ah the other thing I would say wanted to say is I’ve been working in climate tech in 1 way or another since twenty eleven I’ve always loved it and loved the people in it but we are in a moment right now where the amount of. Talent and funding and attention and excitement in climate tech is just so so much higher than it’s ever been before. There’s so many good companies. Um, there’s so much more ah sort of like ah legitimization in the eyes of conventional tech. It’s just awesome and I encourage people to come join and I want to send send love and support to all the climate tech folks out there.

James McWalter

Absolutely I can’t echo either of those enough. Um, thank you Sam Steyer it’s been amazing.

Sam Steyer

Yeah, thank you Really appreciate the opportunity.