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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

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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

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.

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.

Great to chat with Desmond Wheatley, CEO at Beam Global. Beam is provides products for electric vehicle (EV) charging, energy storage, energy security and outdoor media! We discussed the electrification of transportation, how self-contained EV solar charging works, the issues with the energy grid, pros and cons of running a public company and more! 

https://carbotnic.com/beam

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

Great to chat with Sebastian Manchester, Co-Founder and CTO at Jaza Energy. Jaza Energy is empowering the 1.3 billion people living without electricity, one solar energy hub at a time! We discussed the electrification of rural areas, the experience of working in Tanzania, the use of portable batteries instead of kerosene, the importance of building a good relationship with the community and more! 

https://carbotnic.com/jaza

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

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

James

The unedited podcast transcript is below

James McWalter

Hello today. We’re speaking with Sebastian Manchester cofounder and CTO at Jaza Energy. Welcome to podcast! Could you tell us a little bit about Jaza energy.

Sebastian Manchester

Thank you for having me.

Sebastian Manchester

Sure so Jaza was founded in 2015 we started in Canada after spending a few years working on rural energy projects around Tanzania. And the idea was to scale up some of the early projects we had built in Tanzania and build a company around it. So originally, it was ah a project that was part of a charity called community forest international. I was a grad student who was kind of looking for interesting projects to work on and my friend and co-founder Jeff who’s now the Ceo of Jazza was running a charity called community forest international in Tanzania and together. We kind of started thinking about. Really simple ways to provide access to electricity in some of the communities. He was already working in running his organization and the the basic idea that we came up with which is still kind of the fundamental. Business model that we operate on today is charging portable battery packs that customers can take home and use to power their electronics so we built one energy system that serves an entire community and customers can charge battery packs. That energy system and then walk home with the batteries. That’s what we built for the first time in 13 and that’s basically what we build today. The technology has come a long way how we run the business at scale has changed a lot but that’s the basic idea portable battery packs. Charged from solar energy at retail shops that customers can use to power their homes.

James McWalter

That’s so fascinating and I guess you know I think believe you and your cofounder are both from Canada. Um, and so I guess you know what? what led led to Jeff you know, focusing on Tanzania and its charity work there initially.

Sebastian Manchester

Um, so after Jeff and I grew up together. We’re both from a small town in Canada called Sackville New Brunswick and after high school Jeff took ah a nontraditional route and just started traveling the world. I went to engineering school and then we kind of met up later on in the summers and we would work together planting trees. It’s a typical job for Canadian students to make enough money to live through the school year. Um.

James McWalter

I Actually a good friend of mine used to do that and it was it was He was an academic and it was his most lucrative job. He I think he’s ever had.

Sebastian Manchester

Yeah, it can be very lucrative very painful but lucrative but fun anyway. So so as tree planners we’d meet up in the summer and then Jeff would continue traveling I’d go back to school.

James McWalter

And right.

Sebastian Manchester

Jeff ended up on a small island off the coast of Tanzania called pemba and while he was there some of his local friends were very interested in. You know this career he has as a canadian tree planter that affords him the ability to travel the world and spend time in their communities. And so they started pondering how can they do tree planning in in pemba which is which was like facing a lot of issues around deforestation and and obviously like there was ah there was a lot of good reasons to plant more trees. So Jeff with. Some local friends started an organization called community forests international and you know initially I think in the first year they planted a few hundred thousand trees just by collecting seeds building little nurseries around in different communities. Um, you know working a lot of working with a lot of. Local communities to understand what trees grow where how they grow really really leveraging the local expertise and then using his resources kind of in connections back in Canada to raise money to fund the organization and over the course of you know about a decade he scaled that organization. To plant. You know I think over 4000000 trees. They’re now operating across several countries in East Africa it’s very cool organization and that’s how we ended up in Tanzania was basically like the first projects we built that I described we. Built a small energy system on a small island off the coast of pemba so an island off the coast of an island. Um, that’s where we tested the model and initially it was just a 1 ne-off project. But after I finished grad school and. Had spent a few years kind of working in the energy industry Jeff and I kept thinking about these systems we built and like what could we do to make them better. We we found that there was definitely some potential there because people were still using the product years later. It was very cheap to install and very easy to maintain so we thought we should. We should see what else we can do with this and it made sense to to launch in Tanzania because we already had a network there. We Jeff had already scaled an organization there and it’s just like. Also. Incredibly beautiful place to work and live so like it’s good excuse to go spend time onto tropical island in the indian ocean.

James McWalter

Yeah, not not bad at all and I guess you know at that point you know you’re talking to Jeff you have done this you know this small kind of pilot project in essence but maybe hadn’t realizeed. It might be a pilot project to something larger. Um. You what was your kind of mindset at that point you’re like oh I want to start something and like this is a good opportunity or you’re like oh um, there is this existing kind of framework that gets me very excited and I’d love to continue working on that and.

Sebastian Manchester

Well, it was it was kind of a combination of both like on 1 hand. The problem was very interesting to me being 600000000 people living in Sub-saharan africa without access to electricity. This is sort of what got me interested. In in you know what eventually became jazz initially it was just as a grad student I was studying energy storage thinking about how to integrate you know, big commercial wind farms. Um, onto the grid using energy storage as a buffer and then at the same time I was you know. Doing some independent research and reading about how you know some of the some of the technologies available that were being proposed to electrify rural communities a lot of like micro-grids a lot of kind of solar diesel hybrid grids and it was pretty clear that. Ah, cost of energy storage was coming down the cost of solar panels was coming down the availability of kind of like that the the cost of personal electronics was coming down people were people were starting to. You know, use smartphones in a lot of rural communities but still have nowhere to charge them and so it just seemed like a very obvious big problem that could be solved with existing technology that just wasn’t really being solved I wanted to figure out why and so that’s when we started. Working on it just to to try and explore the problem and understand what what was preventing 600000000 people from having reliable access to electricity.

James McWalter

And I guess you know as you kind of dug into it like what were those reasons right? like you know it seems like jazz. It seems so obvious like in hindsight but you know why? why? Why were they’re not like 500 competitors already sitting there kind of doing something similar.

Sebastian Manchester

Well there there were a lot there still are quite a few I mean a lot of people have tried to build a reliable affordable you know, energy access technology for for sub-saharan Africa it’s been done. Um, I think I mean one one big reason why it was you know I think the time was right for us was because we’re kind of just coming in as the cost of of batteries is coming way down and the cost of solar had already been dropping quite a bit.

James McWalter

So.

Sebastian Manchester

Um, and you know it’s a difficult. It’s a difficult market to operate in. Um, you know our customers earn less than $2 a day. So it’s ah it’s a hard customer to sell to understanding the customer how they spend how they prioritize their spending and what they’re going to actually use energy for is is not an easy thing to figure out something we’re still learning. Think a lot of companies. Never really solved that problem and it’s very expensive to to learn those type of lessons. Especially if if you know you’re you’re building infrastructure. Like a micro-grid. Um, and the the reality is like our customers don’t have a lot of money to spend on energy the demand for energy is also quite low. So it’s a market that may be um. I think a lot of people will just ignore because they assume people don’t have money people don’t need electricity like why would we try and sell sell there and that’s just something we think is false. Um, yeah, it’s but but still like to this day like ah I’m not. I’m not sure why this problem hasn’t been solved because like we’re working on it and it seems like we’re getting there and I do think that you know Jazza will solve energy access and I hope that other companies can help because there’s a lot of work to do.

James McWalter

I.

James McWalter

No absolutely and I guess when you’re you know, implementing, you know a new project. Um, your product in a particular community who’s the I guess buyer for that like who are you trying to contact first.

Sebastian Manchester

So We sell directly to customers um customers Our customers are people who live in the community. So We Electrify. So Basically the way it works is when we select a site to build a hub. We recruit local women to kind of. Run and manage the hub that we call them jazz stars and then you know through the process of kind of onboarding them training them and equipping them with all of the technology know-how and and infrastructure to then like start serving customers. They’ve already ah got a. Relationship with a lot of the people that ultimately start using the service and so the the hubs themselves are like pretty interesting looking. It’s ah it’s like ah a small shop but it’s a kind of prefab building that you know we worked With. An architect friend to to help design and it looks really Cool. So people are interested in what what it Is. We get a lot of organic sales just from people coming up to the hub and seeing what you know what are we doing and once people start using the service. There’s a lot of word of mouth because it’s like. Very easy product to use. It doesn’t require any special setup like we don’t need to send a technician or anything to set your home Up. You can just walk home with the battery and a lighting kit that you get from us and on day one within you know a few seconds have electric light in your home.

James McWalter

Oh.

Sebastian Manchester

A lot of the times for the first time. So so it’s typically like our typical customers are I mean it varies a lot by region but customers who you know are frustrated with spending their hard earned money on you know Kerosene for a lantern. Um, you know we we recently launched in Nigeria and a lot of our customers. There are used to so to burning a diesel generator and that’s just not like a pleasant thing to have running in your home when you’re you know, just trying to relax like.

James McWalter

And raise a family kids inhaling that and everything.

Sebastian Manchester

So ah exit and it’s not good. It’s not good. Yeah.

James McWalter

And so the the hubs themselves So how how do you choose the specific community like you know there’s a lot of communities you I’m sure you could service us. But how do you kind of create that priority list. So.

Sebastian Manchester

It’s based on number of households within a specific radius from a location that we think would be good. So I mean we kind of take geospatial data sets about population. Um, we kind of overlay that with electrification data and find communities where there’s a lot of houses within a close proximity that do not have good or reliable access to electricity. And then typically that will generate like ah a prioritized list of sites. We look for regions where there’s a cluster of sites so we could serve from a single kind of anchor community and then we will do like. Field visits. Our team will go and kind of survey some customers try and understand what the situation is there if we could look look for suitable sites that we could lease to build a hub on and then based on a bunch of site selection criteria we can then kind of approve or move on find it. Better ah alternative for the community. Um, and that’s a process that we’re still refining and you know learning from hubs that we’ve already built what makes a good site what doesn’t because we’ve now got several years worth of operating data from. About a hundred sites in Tanzania so pretty good. Pretty good data set to learn from.

James McWalter

No, it’s amazing congratulations to get 200 sites that’s that’s that’s 3 it’s really exciting I guess when I think about the energy space in most of the develop world. It’s incredibly well regulated. Um, and you know basically the business that you’re building in Tanzania is probably not.

Sebastian Manchester

Thank you.

James McWalter

Legal in certain parts of develop world. Um, and in that particular way um, are there kind of local regulations. You have to deal with and and what’s a kind of general approach and I guess how are local agencies, governments etc. You know, responding to the work you’re doing.

Sebastian Manchester

Yeah, it’s a very good question. There are regulations typically regulations start to impact energy so providers at around in Tanzania’s ten Kilowatt threshold. If you run a micro-grid over 10 kilowatts. There’s a bunch of regulations you have to follow. We are quite a bit under that a typical hub. Um, it’s about three and a half Kilowatts of solar pv so it’s pretty small system but it can still serve ah that system can serve. And anywhere between 20300 customers depending on how they use energy. So we fall under the regulations for Tanzania um, that said it it is also like a purely dc energy system. So it’s all low voltage.

James McWalter

So.

Sebastian Manchester

So anything under 50 volts is kind of considered inherently safe. So that also helps in terms of government engagement like we do spend a lot of time engaging local government as part of the site selection process when we move into a new region. Yeah there’s a lot of you know steps to go through to make to you know, engage local authorities make sure you know we are following all of the the right steps and it’s it’s it’s. Important to like ensure that you know we are focusing on not only like communities where they I mean they they can help us identify communities where they think there’s a need and doing that gives them sort of ownership over the outcomes of the project. Builds kind of some social capital to be able to say like we brought jaza to the community got power and in terms of the like utilities. There are the electrical grid is pretty widespread in Tanzania and in Nigeria. But a lot of customers still haven’t connected because they can’t afford whether it’s like the connection fee sub places that’s subsidized but it’s also expensive to wire your home and then buy the appliances to plug in. So a lot of a lot of customers just aren’t connecting are choosing not to connect to the grid and so Jasa provides an alternative that where customers can get electricity. We do start to fulfill the electrification mandates of the the national utility. But without them having to spend money on expanding their infrastructure to to reach every single home because that’s you know at current electric electricity consumption rates for a lot of rural households. It’s just not economically feasible to build out that grid. Just because the amount of money people spend on electricity is so small that the capital costs are just will never be recovered and and most of the electrical utilities in sub-saharan Africa operate at a loss so anything we can do to increase electrification in rural communities seems to help.

James McWalter

Ah.

Sebastian Manchester

To be received well because it’s helping fulfill that electrification mandate.

James McWalter

Yeah there’s this kind of fascinating history around the electrification of rural areas. Um I know Ireland Best but also a bit of the us and the Ireland you know has a lot of kind of scattered small islands. You know you’re canadian there’s a lot of scattered small islands as well. And getting electrification across those islands you know was something the national government decided to do but still took multi-decades of of effort and at a incredible expense and I guess but there was also like the the kind of economic um ability to to spend that money. Um and and see that kind of return and investment right? because when you electrify a place. It starts being more productive nearly by definition and so yeah, it makes kind of complete sense that you can basically you know hand maybe not hand in hand be partners with utility but you know you’re you’re kickstarting the economic development of these areas in a way that would potentially be beneficial to the utility down the road when as these you know? um. Clusters of of communities become more economically viable for something more like a full build out off the grid.

Sebastian Manchester

Yeah, definitely I don’t I don’t think jazz is going to be like the the current model of energy distribution from portable batteries. It’s like it’s the fastest cheapest way to get electricity in homes right now. But I don’t think it’s necessarily. Future. This is just step one so we want to be you know helping get as many households on electricity as possible now and then we want to be part of that transition into the next the next phase of electrification of rural communities. Whether that’s building out micro-grids or connecting to a larger. Larger grids. 1 other thing that we’re doing is you know collecting a lot of data on household energy consumption that could help inform where and when it would make sense to build out some more more infrastructure.

James McWalter

That That’s Interesting. So in Essence you could down the road be um, you know like a kind of larger scale product developer and basically the energy company because you already own the that relationship right? with all these all these communities. Um in a way that you know they probably love you right? You know your jazz of stars running around. Um, you know, kind of building that like strong relationship.

Sebastian Manchester

Totally yeah, we so we own the hubs we own the batteries we own the customer relationship and besides just being and a network for energy distribution. We also see our network as a distribution layer for other types of services.

James McWalter

I.

Sebastian Manchester

Because we’ve built the retail footprint we’ve we’ve trained you know customer facing employees who know the community know their customer and so there’s all kinds of interesting add-on services. We could think about layering into our network beyond just energy. So. First step though is giving people power and the next step is is the is you know where where things get really interesting, but right now we’re still still just trying to electrify houses.

James McWalter

Not absolutely and in terms of that kind of growth trajectory trajectory over the next couple of years um yeah I guess what are the you know what? what are the kind of constraints from the speed of your growth is it people capital. Ah. Suitable community something else.

Sebastian Manchester

So we’ve been pretty been pretty deliberate recently about you know growth in that we want to make sure that we’re building business that’s worth growing. So we’ve been very focused on hub. Unit economics making sure. Yeah, every every hope we build is profitable every customer we serve. You know that there’s positive yeah unit economics because we have to not only build the hub. We also have to manufacture design and manufacture the battery ship it around the world. Um, deployed into remote communities. It’s like there’s a lot of it’s a it’s a complicated and expensive capitally intensive business to run so we want to make sure before we scale up, we’re doing it really? well so so currently we’re we have but hundred locations between Tanzania. And Nigeria we just launched the the we’re actually going to be raising our series a over the next couple months and so that’s going that’s one constraint that will unlock growth because we do feel very good about this that.

James McWalter

Exciting.

Sebastian Manchester

State of the business. We’re ready to grow. Um, people is obviously a constraint you know we need to recruit um a lot of jazz stars to run our hubs and so there’s a lot of you know, a lot of. Work to do there to to build the process to kind of onboard the next Thousand Jazza stars supply chain has been a constraint especially over the past year as kind of semiconductor shortages have impacted us the kind of global shipping container shortage and shipping network congestion. Slow things down and also kind of finding a factory that we can scale up manufacturing with but a lot of those challenges we’re working through were we’re comfortable with where we’re currently operating I don’t see that as the constraint right now. Um. And site selection. There’s you know about 2000 sites in Tanzania we think would would make good good communities to build the hub in and many more in Nigeria those are our 2 operating markets. But um.

Sebastian Manchester

Those will should keep us busy for the next year or 2 but we’re definitely looking at expanding into numerations as well. We’ve learned a lot from expanding into Nigeria this all just actually happened in the last three months so a lot of this is still fresh but we’ll take those lessons and they can. Systems. We’ve built to launch into a new market and and be looking at the next the next market market to expand to so with the right systems to to to recruit train Jazza stars a supply chain that can feed enough batteries into. Into hubs and the capital to to build it all I think right now we’re pretty well set up to grow. But again like we’re still learning and surely we we’ll find new constraints as as we. As we do grow because it’s um, yeah, we’re we’re always learning. We have spent time. There have been certain periods of time where we’ve we’ve like grown really fast like added 20 hubs in a month just to see what happened so I feel like we have worked out a lot of those kinks. But. Doing that month after month after month is going to be something new so it will be interesting but I’m confident we we can do it.

James McWalter

and and I would imagine retention is like close to a hundred percent once you once you build out a hub.

Sebastian Manchester

Um, it’s I mean hundred I wish it was 100% I mean a lot of people will try the service and and for 1 reason or another it might not be for them. We do have pretty good retention. Overall it’s about like all time retention. Yeah, after operating in a lot of these communities for. You know up to 3 years is like 60 so there’s a number of reasons why customers will churn but typically customers who start using the service stay with us and the lifetime um the lifetime value of a customers is well worth building. But hub and the battery pack to serve them.

James McWalter

Yeah, yeah I guess as Bor like referencing the hub itself right? like once it’s built it. It continues to be an like an asset that is like a positive producing asset ongoing.

Sebastian Manchester

Yeah, right? exactly? Yeah,. It’s pretty low maintenance solar panels are magic as far as I’m concerned and once that like once the hub’s installed. You know there’s a bit of. Bit of maintenance troubleshooting that needs to happen every now and then but largely the Hubs just keep working.

James McWalter

And you know try to manage. Ah, you know you I believe actually I think here New York right now you’re you’re spending your time I believe between ah Canada and Tanzania as is the rest of some of the rest of the team and then obviously you have a lot of people kind of on on the ground and in Tanzania now Nigeria um. What have you kind of learned about you know trying to manage a team across all these different time zones multiple cultures. Um, and you know things that maybe didn’t go so well. But now you kind of learned from over the last couple of years

Sebastian Manchester

So learned a lot about this I mean 1 thing I feel like we were. We were well prepared for the global pandemic because we had already been working as a pretty remote team for a few years leading up to that so it helped us kind of. Ride through the early bumps but it’s it’s a lot of work to run an international company. You know, especially where we have a hardware team basement Canada that’s designing the product very far away from the end user of that product. We have manufacturing going on in China and we have most of our operations like pretty much all of our operational team in Tanzania is Tanzanian and then it’s mostly just co-founders Jeff and I who who kind of. Bridge the gap between our like engineering finance teams in in North America our operations team in Tanzania and Nigeria and manufacturing in China um, 1 thing that we’ve learned is the importance of building. Good data systems. This is especially useful for the engineering team. It’s like the best way we can learn about our customers how they use the product because we can’t be there. You know it’s not as it’s not as easy for a hardware engineer and in Canada to talk to a. You know farmer in rural Tanzania besides the distance does the cultural gaps and the the language so we do we we built a lot of data systems both in terms of like how customers are using energy how they transact at the hub. And that’s helped us learn a lot about what the product needs to do how it’s helped us evolve the product. You know the product we started with is very different from the product we’re we’re we’re operating today. We started with the. Lead acid battery that was just um I mean it’s basically just flat acid battery hardwired to an led light bulb. Um, now it’s like it’s a custom lithium ion battery pack. That’s got a custom battery management system that does data logging.

James McWalter

And press.

Sebastian Manchester

You know control some business logic so we can we can meter energy on both you know number of you know Watt Hours units of energy discharged. But also we can meter it based on time we can see how much power people are using at different times of day. How much. Um. Much energy people use on on each different on each each swap and so we’ve learned a lot about what the product needs to do and that’s helped us build feedback loops between engineering and our customers and then on the software side too like. We we we rely on a lot of customer feedback that we can collect through the hub so finding building software tools to translate what jazz of stars are hearing and seeing in the communities. Turning that into actionable data that the rest of the team can use. So yeah, a big thing is building feedback loops. It’s also been really important to just give people ownership over their responsibilities because. A lot. Yeah, a lot of times people are working kind of extremely hard in isolation and they just need need to be able to make decisions and and you know follow their intuition on things and ideally were there to support and help them learn and develop. But. Ultimately, we want. We want people to be kind of accountable for their own work and in a remote setting that’s been super important and has worked well for us.

James McWalter

Yeah I think that I would also work remote and I was at a remote company when and Covid hit and you know a lot of the things that you can kind of take for granted when you’re all co-occated. Um, you generally in remote culture have to kind of define and structure very early on and so aspects of culture you know people. Kind of just like take the take the lead from the founders or the early employees on culture If. It’s all person. Um, but like you know, being very specific about like how we communicate asyctly how we kind of own our tasks and our roles like that. That’s just necessary. Otherwise the company itself just wouldn’t be able to kind of progress in a remote fashion and so um, yeah I think of. You know the big power of something like the word culture using startups is just allowing real alignment over how to solve problems and then allowing people to kind of actually solve them themselves Once there’s alignment over that piece of culture.

Sebastian Manchester

Totally totally? Yeah, yeah, it’s the cult. The the cultures is really important in how we build what we build and you know you know our organization. We’ve really put jazz tried to put Jazzs stars at the center of it and like keeping that in mind anything we’re working on should be like directly benefiting jazz. A star is kind of the core the core of the company if a jazzas star is doing well. Customers are doing well if jazz stars getting rich then the company’s doing well so that’s helped a lot and like you know, jazz stars are definitely the most important people in our company and personally inspire me and I know. That’s true across the entire company. It’s pretty It’s it’s amazing to see. Yeah the the confidence and the power that jazz a stars can develop themselves. And you know become leaders in the community with a lot for a lot of time. It’s the it’s their first job. It’s the it’s the first opportunity they’ve had to kind of really show the community what they can do and they always. Blow us away and they both community way.

James McWalter

And what about I guess kind of other types of kind of local development that kind of can occur. Are you seeing any kind of interesting. You know, commercial use cases you know now that you have some sort of electrification. Um, you know people people are are great at like figuring out cool new things. Um. You know with heavy constraints and so have you seen any kind of interesting projects businesses and so on kind of rise up alongside your hubs.

Sebastian Manchester

Um.

Sebastian Manchester

Definitely like some some of the cool use case I’ve seen for a product. It’s ah, a lot of barbers use the jazz pack nothing worse than losing power in the middle of a haircut.

James McWalter

So. Right.

Sebastian Manchester

So the the jazz a pack has become ah a staple in a lot of rural barbers because it can easily power you know set set of Dc clippers all day every day and then at the same time it can do like a boombox. So. You can you can get your hair cut and style the another one is um, people running basically like home theaters. They’ll use the jazz pack to power Tv and Dvd are you know. A Tv that you can plug a Usb stick in and just like charge people admission to watch movies or football game or whatever. That’s pretty popular use case and those customers will typically like be swapping a few times a day because they’re just running running nonstop and doing doing pretty well for themselves. Um, and then a lot of customers will just use who are using it for business. We’ll just use it for light. So for example, if they’re running a market stand while the markets operate at night and having light this having light is helpful I think we we understand that.

Sebastian Manchester

Um, it can also charge phones so people use it to do kind of chart phone charging in their business. But yeah, it’s a lot a lot of our customers are also like shop owners. So. It’s not just a product for the home and I think that’s is this is. Kind of the next challenge from a product perspective is for us to figure out how to kind of build on that Nigeria especially is interesting because a lot of businesses will be using generators to power fridges Tvs there’s there’s a lot more Ac loads in rural communities. Niger then there than there is in Tanzania so our current product focus is kind of building on the evolution of our jazza packs our batteries to build something that can serve customer that that wants to run their business but can’t afford. Both the like financial and you know environmental cost of running a generator nonstop.

James McWalter

So makes a to of sense and I guess you know thinking about ah people who are trying to you know, maybe be inspired by our conversation and like oh that’s that’s a pretty cool Startup. You know it’s It’s the kind of company that um, not enough people are building and we should have more of these you know if if somebody’s kind of you know. At the stage of their career where they’re interested in starting a company is there anything that you you know you’d like to advise them ways that they could kind of maximize their success starting a company some to yours.

Sebastian Manchester

Um. Um, my suggestion or advice I mean our company is a little bit unique because we operate in a part of the world that not a lot of people who I assume are listening to this podcast will have experience with like. You just kind of have to go there and like you have to be there to really understand how to um, you know, understand the customer that you’re trying to serve I think that’s the most important thing is like what what is the problem you’re solving um, who are you solving it for. And so for us like we spent Jeff and I both spent several years living and working in Rural Tanzania before we started to feel like we had a a good understanding and it’s still something that I’m that I struggle with so um, understanding the problem and then if you’re. Moving to a new country to solve someone else’s problem like make sure you have very good local partnerships to help bridge the gap. Um, but that’s the main thing like make sure that you’re solving an actual problem and ideally a big one that a lot of people have. But not necessarily if there’s like a small problem. You care a lot about that’s also probably worth solving if you care about it chances are someone else cares about it. Um, and also just like don’t. Don’t be afraid to just start like I didn’t have any experience in hardware I didn’t have any experience in software I didn’t have any experience in building a supply chain everything I do today is like skills I’ve had to learn on the job and so don’t let don’t let that be a barrier to just starting. The most important thing is to just start once you know there’s a problem just start working on how to solve it don’t like go to don’t go to grad school to learn how to solve a problem to start a company just like try and so try and start the company and try and solve it.

James McWalter

Yeah, yeah.

Sebastian Manchester

Maybe you need to go to grad school but chances are if it’s a big enough problem. You can hire someone who already has those skills or you can learn the bare minimum until then.

James McWalter

Yeah, especially because you know a lot of people who start something. It’s often their second or third thing that actually like you know they’ve learned the skills needed and so just get get the first one get this first one done I mean in in your case, the first one’s been very successful of course. Um, it’s not true for all of us. Not not true for me. Um, you know.

Sebastian Manchester

Yeah.

James McWalter

But I think it is very very you know valuable to to put yourself out there and you know I was talking to somebody else recently about the especially if you have the ability to take risks right? Not everybody does of course and so um, you know it’s obviously a great privilege to have the ability to take you know risky career moves and and so on and and for those people who don’t. Have that ability to take risks like I think there’s nearlyrdy. Ah maybe not quite as strong as a responsibility but something similar that if you have the opportunity to take the risk to solve the big problem and you are interested in that problem well go for it. You know, get on a flight you know take take the chance. Yes.

Sebastian Manchester

Yeah, or go like go find someone else who cares about that problem and help them do it because chances are someone else is trying to solve it too starting a startup is is not for everyone and like um. Think more people should should try it but don’t feel like you need to start a company to work on these types of problems. You can also find cool companies like Jasson and you know we’re we’re looking for people who are hungry to solve problems who might not know know where to start. Can just join us join us on ambition.

James McWalter

Absolutely well Sebastian Manchester has been great, really enjoyed the conversation. Is there anything I should have asked you about but did not.

Sebastian Manchester

Um, well I’ll just echo myself what I just said like jazz is growing. We need help. It’s a big Problem. We’re looking for people to to help us solve energy access and if you love big challenges you love Learning. You have an open mind come join Us. We will help you help you learn who you really are by working on very hard problems with people who are similarly passionate about solving big problems and. I Do think we have a very very impressive team I Love working with with ever in a jazz. Ah some some of the smartest people I know are working on this problem with me at Jazzos So if it sounds interesting. Please reach out.

James McWalter

Absolutely and we’ll add your career of page link to the show notes Sebastian Manchester. Thanks so much.

Sebastian Manchester

Cool. Thank you.