Great to chat with Tom Matzzie Founder, President & CEO of CleanChoice Energy, a cleantech company that empowers people and businesses to easily access clean energy! We discussed how to optimize the commercialization of clean energy solutions, how to make it easy for people to adopt new behaviors, politics, customer service and more!
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Thanks so much!
James
The unedited podcast transcript is below
James McWalter
Hello today we’re speaking with Tom Matzzie founder president and CEO of Clean Choice Energy welcome to podcast Tom. Brilliant I suppose to start could you tell us a little bit about clean choice energy.
Tom Matzzie
Thanks happy to be here.
Tom Matzzie
Yeah, clean choice. Energy makes renewable energy easy for consumers that’s at at our core what we do so that a consumer can support clean energy sign up for clean energy with the click of a button ah making a call you know phone call setting a piece of mail. Ah, just where we meet the consumer where they are and then we do the kind of ah, a messy part of the energy Industry. You know to match their consumption with renewable energy. We. We are a licensed provider of energy in the states where we operate. And the places we operate So when a consumer signs up with us. We actually have to provide their utility with the clean energy for ah you know, um, their consumption.
James McWalter
And I believe you’ve been around nearly kind of 10 years now or or just around that amount of time you know what drove did an initial decision kind of back. Yeah, ten years ago to start clean choice energy.
Tom Matzzie
Yeah I mean our spark to start story as a company really starts with my own experience as a consumer and as ah, some of your listeners ah know and you they will now find all find out. It’s actually my second career I had a first career in democratic politics. I had a great, very successful run in that world and um I was putting solar on my own home in Washington Dc I think I roughly 2010 or so and I decided that that experience of having to have a construction project on my home was too difficult. Even though I loved having solar on my home I encourage everyone to try to do it I knew that some people would not be able to do it. They would not be able to do it because they didn’t own their home. They were renters. They would not be able to do it because there was some problem with their roof or it was shaded. They would not be doing it be able to do it because potentially they were. Ah, you know, limited in their credit to be able to borrow or take a lease on for solar and so there are a lot of reasons that people would be excluded from being able to support clean energy on their roof and from that insight it was how do I make this a service and not a home improvement project. And start looking around for business models which we’re operating to right now renewable retail electricity as well as community solar that both allow consumers to support clean energy when they pay their power bill.
James McWalter
And then those kind of first 6 to twelve months when you’re like okay this is a problem I want to solve. You know you’re feeling this problem very acutely in ah in a personal way. Um or those kind of initial attempts and were there any pivots along the way. So.
Tom Matzzie
Well I mean the first thing to think about is like I didn’t know anything about energy I I just had the braga dot show to think I could figure it out and but what I did know from my.
Tom Matzzie
Time on the kind of internet data technology side of politics I could probably figure out how to find customers and ah the first thing I had to do then was to find people who could help me figure out the energy side of being an energy company. Um, that. And that meant finding you know people who’d been worked in the industry for 203040 years who could help me figure out everything from credit support to um, buying energy. You know so having a trading desk that can purchase energy swaps and you know things like that. Um. And ah yeah, that those are real steep learning curves I think you know at this point um, you know our first revenue dollar was April Thirteen the company was formed in 2011, but there’s like a year and a half two years of just getting set up and licensed and things like that. It’s not as easy as I ah, you know, um. 0 to you can’t go from 0 to 100 is easy in an industry that you have to be licensed to operate in and um, ah you know I think the ups and downs are really driven by just the nature of being an energy company so we had we’ve had a couple near-death experiences as a business.
Tom Matzzie
You know one of my former execs told me every startup has to avoid dying at least 3 times before they’ll they’ll finally make it. Um, you know our first one was probably 2014 there was an event in the northeast called the polar vortex which.
James McWalter
Right? right.
04:32.17
James McWalter
I remembered. Well yes.
Tom Matzzie
Yeah, now they’re kind of regular events. But um, then it we became a significant energy market crisis where um, you know prices were unsustainably high and we had just raised our this happened in early January we just raised our series a and December thirty first so
Tom Matzzie
We we were thinly capitalized. Um and we had just put our credit facility in place thirty days prior to that so we just had the balance sheet from the equity and the credit support like thirty days prior but we missed putting the swaps in place but by a couple days.
Didn’t have many customers So The exposure wasn’t very big but you know you have the the nature being an energy company you you have these sorts of events that happen. Um, where you’re market facing for your customers and the market can um you know be unforgiving. Um, the good news is what we decided is a great time to go find new customers was when ah during the great migration when people are moving and changing their relationships at that point and so we grew tremendously through that so trying to find opportunity in that kind of crisis.
James McWalter
And I guess you’re in that kind of you know this squeaky bum times and in that month right? when you’re trying to like keep the business alive like what I guess like you know what was that like process like how did you kind of power yourself through that.
Tom Matzzie
Sure? Well I mean the first and most important thing and I think this is important advice for a founder is you have to be absolutely perfectly. Honest with your stakeholders and transparent with them because their trust in you. Is something that is earned in drips and lost in buckets that if you yeah break the trust with your board or with your investors or stakeholders. You will be very difficult to ever get it back so we were constantly transparent with our stakeholders during that period. Regularly in touch with you know our board of directors on an almost daily basis and we had a plan we put together very quickly for how we were going to get through it and we executed on that plan. Um, you know very quickly. So I think the other thing I’d say is. An an important thing for a startup founder to think about is when you see the iceberg you act quickly to avoid the iceberg right? You don’t act slow. You don’t wait for that you be until you’re close to the iceberg you have to act quickly. So I think those are 2 really important lessons that. Um, that experience taught me was one to be impeccably honest with your stakeholders and second to act quickly when action was needed.
James McWalter
Yeah, and on the latter point I think that you know there’s a kind of phrase that a friend of mine says that like all startup has a speed in in some ways right? because you’re going up against these massive forces massive incumbents and they’re.
Tom Matzzie
Yeah.
James McWalter
And ability to move fast. Um, and for good reason right? There’s a lot you know when you’re a big company that has our big organization that has a lot of impact you don’t want to move too fast because the risks are too high, but when a startup you know maybe of a dozen people maybe a bit more.. Maybe you’ve couple people’s money. Um, these are obviously things we want to respect. But. The ability to move fast and try to like avoid issues but then also see those opportunities is sometimes really the the main thing you have at all.
Tom Matzzie
Absolutely is. It’s one of the things and I think you’re also um, you know closer to the customers and you know as well at that stage in the business. Um, yeah, but those are those are very important. You know.
Tom Matzzie
Factors of like your ability to move Fast is is one of your um, it’s a feature you know of being a startup for sure.
James McWalter
And you mentioned those customers you know who are the kind of customers today. What’s a difficult profile of those people.
Tom Matzzie
Yeah mean our customers I think it’s important to understand because our largest product is actually sold at a premium price to the utility service and so our customers are really environmentalists who are looking to make the biggest impact with their purchasing dollar. They are They are purchasing for impact not for our community solar product is a savings product but that’s a different type of customer almost every consumer wants a a savings. But um, there’s a group of customers who they will do backlips to get the most environmentally impactful.
Tom Matzzie
Um, energy choice. Um that they can with their purchasing dollar and that’s our consumer and it’s one of the things that differentiates us in the market is the kind of care and attention the curation that we do with front with our energy procurements to try to maximize the impact for the consumer.
James McWalter
And and on that kind of pure curement side. Um, what are the kind of projects. What are the kind of developments that you kind of try to focus on.
Tom Matzzie
Yeah, sure. So the first is technology choices. You’re almost exclusively purchasing from wind and solar projects. Ah you know you’re not going to find biogas. There’s probably you know there’s a role for that stuff. But it’s not for our customers. Don’t want things that burn would be the right way to describe it. We’re not going to um you know, buy from 80 year old hydro plants unless there’s like nothing else left in the in the region to buy um and you know the reason being the hydro plant’s already built. It doesn’t need our purchasing decided. Yeah, our person dollar wasn’t in the first fifteen year forecast or pro performa for that project and um, the other thing I would say is we try to put a regional screen on it. So if you’re in New York we’re not buying Texas wind wrecks for your for your service.
Tom Matzzie
We’re trying to buy in New York we’re trying to buy if not New York Pennsylvania or pgm um, and you know keep it as local as possible.
James McWalter
And as you kind of look for those you know the availability of those yeah electrons that are out there in those different regions. Are you kind of communicating with the developers are you trying to you know encourage and like hey yeah, we actually have a big lack in New York state why aren’t we getting more development there.
Tom Matzzie
Right? We work directly. First thing I say is we are also a project Developer. We have a development team that goes and does acquisition of land rights from landowners and develops solar projects from you know, ah dirt Up. Um. The second thing I’d say is yeah we are constantly in contact not with product developers but with asset owners people who own the power plants after they have their operating um to make procurements from them and I think yeah, the people that do that inside of our business have relationships with.
Tom Matzzie
Yeah, the people own all of the wind farms and the people who own. Yeah, most of the solar projects and the regions we operate.
James McWalter
That makes sense and and in terms of like connecting to those you know, very environmentally interested customers. You know you mentioned this past as ah, you know, being involved in the democratic party I believe you’ve been involved in things like get out to vote and you know trying to connect to a ton of. You know individuals who have ah lots of different views but are like kind of joined together on maybe 1 specific viewpoint how I guess how have you brought that to the kind of go-to markete and to the kind of customer development phase for clean choice. Energy.
Tom Matzzie
Yeah, a big part of what we work on is to try to make sure we’re speaking to the customers who will be most interested in the service or offer that we have for them and so we own large data sets for the whole country for every consumer that we have. You know, cultivated over many years and built appended it with other datasets and then built our own um ah models or ah ml you know, um classifications to a score you know people on the consumer file there for. Interest in enrollment. Um, you know how much electricity they use what utility to territory and there’s like a dozen other things that we model um in order to help us run our business in a way that is sustainable and profitable. Ah, because that’s part of our mission is to be successful as a business also not not for the purpose of like enrichment but because we want other people to see that you can be a successful renewable energy company. So that other people will follow and pursue similar business models.
James McWalter
And yeah, especially I guess for like yourself and even myself as a look at this space is like potential space for me to develop a company and you know as people energy outsiders like looking at examples like yourselves where you actually have come in and tried to figure it out. Tried to figure out all these kind of complex licensing elements. Um. Connect that to a business model and then also have that impact you know on positive impact on the climate because there’s so many layers to go through. You know at the moment is just there are a lot of barriers friendry for you know, new tetra founders entrepreneurs people interested in in joining early companies and so yes I think having those kind of examples of people who’ve kind of done it come from. Ah you know. Yeah, came in asked all the dumb questions for a year and then figured it out from there I think is very powerful. Yeah.
Tom Matzzie
Yeah, no I think it’s totally It’s absolutely possible for other people to do similar transitions. Um from other industries into energy climate tech. Yeah, electric transportation. You know, clean Ag, whatever it is climate solutions writ large um you know I think about the kind of areas of renewable energy power plant project development right? Solar development wind development are now storage development. It’s not very different than real estate development. It’s not very different than people who were building gas pipelines or were doing oil and gas projects in terms of the business skills you need right? it’s.
Tom Matzzie
The ability to understand how to develop a piece of land and what the regulations are associated with developing a piece of Land. Ah, the ability to understand what what the cash flow will be attached to the piece of infrastructure that then helps you go finance that um you know project. Ah so there are many transferable skills we’re in. Areas like data science and technology. There are problems still to be solved that in um, other industries are commonly solved with technology software data solutions that the energy industry For example, has been ossified for decades and has not.
Tom Matzzie
You know had to ah get consumers to really adopt different behaviors or manage themselves differently ah that you know people who have figured out those solutions in other areas have a lot to offer.
James McWalter
And what are some of those kind of problems then that you know there could be this potential cross-pollination of what industries from.
Tom Matzzie
Yeah, sure. Well I mean I think 1 thing we have to figure out is how to get consumers to adopt some new behaviors in areas of electrification and electric transportation transportation food and Ag etc. Over time and there are you know industries who are really good at figuring out how to get consumers to adopt New Technologies and really good at helping consumers figure out how to do something new and often they’re doing it through rethinking the solution entirely. So like the. Yeah, the answer we have today for how to do electrification is probably going to be very different from what someone cooks up in the next ten years um and ah yeah but the problems are kind of noble right? We need to. We have different sectors that contribute to emissions. Whether it’s energy generation transportation. You know, industry industry and buildings heating agriculture. Um, and there are you know noble ways to address those problems. Um and often what we’re working towards is figuring out. How to get how to kind of jump the gap towards commercialization of solutions. So that finance is able to you know at a very low cost to capital you know make it easy for people to adopt these behaviors whether it it means you can get a cheaper loan. For a new furnace or new heat pump because the heat pump can also talk to the grid and turn itself on and off as needed and so there’s a second additional source of revenue for you know the heat pump owner. Yeah, that’s like an example, right? there’s. That’s a solution that only an electrification option can ah can access that sort of revenue source by being available as a resource to the grid operator and that can potentially make the upgrade cheaper for the consumer.
James McWalter
Yeah,, there’s There’s definitely all these kind of competing ah you know sources or you know fighting for attention right? You know we’ve never had more things being thrown in our way and I think collectively people working on these big problems need to do some are doing a great job. But. Ah, collectively we need to do a better job. But I think of describing that like better future right? You know that that that electrified home like I tell people It’s like if you kids It’s a better home like that induction stove your your kids are not going to burn their their fingers right? You know and there’s all these other elements and I think a lot of people just kind of picture of the future as you know, maybe evs plus.
Tom Matzzie
Um, yes, better home. Right.
James McWalter
Solar panels on the roof and like that’s that’s it. But I think there’s like this much better potential. That’s cleaner fast or cleaner quieter. Um, and all these other elements that go in and I think you know a lot of the work to be done to kind of bring that next 10000000 of consumers that next ten millions of of people like along the journey. Is like do a better description of that potential future right.
Tom Matzzie
I agree completely and marketing. The future is what the great product. Ah innovators have done for you know, hundreds of years whether it’s Thomas Edison or you know Steve Jobs you know they they painted a picture of people’s head for you know what? the future could potentially be. And yeah, the the difference that’s I think a little challenging with some of our solutions in the climate tech space. Um is that these solutions aren’t really um, community building or social right? It’s infrastructure right? The the most successful and fastest adopted innovations.
James McWalter
Right.
Tom Matzzie
Have had a social or community component to them because people want to interact with other people so they adopt a new technology to be able to interact with other people. Our stuff doesn’t do that. So so that’s the that’s the harder piece is like ah you know it’s like trying to get people to um.
James McWalter
So right? yeah.
Tom Matzzie
You know adopt a new type of car. Well the the new type of car does the same thing the old card mostly did gets you from point a to point B Yeah I Love my Tesla because I never have to go to a gas station again and until you have that experience though of never having to go to a gas station again which.
James McWalter
Okay, okay.
Tom Matzzie
I Always describe going to a gas phase as perhaps the worst customer experience you could ever put into a product. Um, then um, you don’t understand how great you know having an electric vehicle. That’s always charged when you leave your home Although I don’t think we should be thinking of evs as the climate solution. They’re a way to decarbonize.
Tom Matzzie
You know vehicle transportation but we also have to be thinking about transit and development in different ways as well.
James McWalter
Yeah, no absolutely and but it is funny about the refeeling at the ah the gas station. You know it’s so ingrained and it it is like a terrible experience and you know, especially in the United States like some states you’re not even allowed to fill your own gas like there’s all these kind of random things depending on where you are so like road trips become you know, very interesting. Just.
Tom Matzzie
Um, yeah.
James McWalter
Just even just on that basis. Um, but because it’s so ingrained that that expectation is there and’s again until people experience their family and friends who’ve had that new type of experience. You know it’s it’s quite hard to get them to be like oh this is just a genuinely better way like I’ll I’ll save yeah 50 hours a year that were just completely wasted.
Tom Matzzie
Right? Yeah and also safety issues I mean ah you have a non-zero chance of being like murdered go to a gas station right? I mean there’s plenty of crimes that you’re committed against people who are pumping their own gas. So um.
James McWalter
At the gas station going forward.
James McWalter
Right.
Tom Matzzie
I Think Ah, yeah, certainly that’s better in that way as Well. It’s also electric fuel will be a lot cheaper Once It’s ubiquitous because you don’t have the heat waste of an internal Combustion. You know where the energy the btus are lost to heat rather than. Going into power for you know propulsion.
James McWalter
Absolutely and and on that pricing piece. You mentioned you know you are looking and you work with customers who you know wants to pay those premium prices to kind of drive the change. How do you think about how that will develop over time because we are trying to build a ton of solar and wind. Sometimes they’re not being built in like ideal places. But. You know some parts of the country will potentially get to you know a penny a kilowatt hour you know within the next decade maybe yeah sooner than that depending on where you are um I guess how do you think about that interaction of like energy prices um getting very very low as we kind of build a lot of these projects. And how that affects the interaction between the market and the consumer.
Tom Matzzie
Yeah I think um I think we’re often probably overstating how cheap it’s going to be because the cost of electricity delivered to a node like at a unit contingent shape is very different than the cost of energy delivered to a customer at their home. And you have to change the shape to the shape of the customer’s usage. Not just the usage of um that the generator you know is able to generate when it’s windy or sunny and you have um, you know to pay the various ah toll booths for lack of a better term along along the way. So I think the the opportunity is to potentially have cheaper energy but the other components that go into delivered supply to the customer may may become you know a more expensive and I actually think over time what you see is just a wash but what it means is that you’ll you’ll be have able to boot. Build a new clean system inside of the same Costa Envelope as the old system and like that’s a very that’s an upgrade to the current system because it’ll be clean and you know won’t be bad for public health or the climate. And ah, you know has all those additional benefits. Um, do eventually hopefully you can get to twenty four seven supply you know at a lower cost because you don’t have the fuel costs embedded. But um, there’s complexity in bringing. Ah. You know electricity to a customer and their shape of usage compared to the generator’s shape of of ah generation.
James McWalter
That that that makes a ton of sense and I guess like as I’m thinking through you know those customer experiences we talked about for a little bit. You know if I you know came on to clean and choice. Energy’s website like what is that experience for me as consumer as I kind of you know, connect to your product and and start getting value.
Tom Matzzie
Yeah I mean so hopefully you’re in one of the markets that we serve and we serve more than 35 you know markets today and we’ll be a lot in a year from now and be a lot more than that. Um, but ah, you know you can go to an enrollment workflow. You know, go through a couple. Click pages and you provide your name and you choose your plan your account number and then you’re enrolled and you’ll start to get communications from us about the timeline for getting on our service based upon our communications with the back office at the utility. Um. You know and when the utility says that your service may begin. So if you enrolled today it might be 6 8 ten weeks actually before the utility begins. Um the service. Um, there are some states where it’s kind of accelerated switching where it might be like a five day you know conversion um but in other places it could be a lot longer. We’re communicating with you along the way to let you know, um, you know when that service cuts over but an important feature of this product is it’s it’s changing the source of the ah who’s buying the energy for the customer. You know to deliver to their utility and this is I’m using these as metaphors because it’s it’s all done through um ah, kind of a fungible exchange the way that money’s moved around you with you know and different things like that. But um, you know, hopefully in the um, what was I saying I’m sorry um hopefully in the future you know you’ll be able to um you know get that service much more quickly. Ah you know, just through instantaneous enrollment.
James McWalter
That makes sense and so the um and and and then and so then and then ongoing I see you know I Ah I Basically I’m seeing a line of clean energy on my bill and then basically that and you know I have that kind of continued relationship with you know, clean choice energy.
Tom Matzzie
Yeah.
James McWalter
And I know I’ve I’ve done my bitch is that the kind of basic model.
Tom Matzzie
Yeah, we send. Yeah, we send monthly impact reports to our customers where we explain to them the impact of their purchasing dollar. Um, you know how many Kilowatt hours of clean energy it represents we’re telling stories about the projects that we buy from. Um, and um, you know we’re we’re trying to keep the impact part of this story front and center for the customer and you know another part of being a clean choice. Customer is you know Ah who we are as a company. By being ah a b corp but also a company that advocates for climate solutions supports legislation that advances climate solutions we have also you know our our project development team that’s developing new solar projects and. The kind of revenue from our customers supports all these activities of the business. It’s not just the purchasing of the commodity to to for their supply. So I like to think of our customers as also our kind of collaborators on our work to advance. Clean energy.
James McWalter
I And another kind of group of people you have to I guess collaborate with but work with you mentioned a couple times is the utilities themselves. Um, what is it like working with those utilities. How does that vary and you know how could that that work relationship.
Tom Matzzie
Fear of.
James McWalter
Potentially improve over the next you know number of years as ah, pressure comes to bear on on this kind of space. Yeah.
Tom Matzzie
Yeah, in the markets we operate in generally the utilities are regulated in how they’re allowed to interact with our company and they follow the you know rules almost to a t um I would say that the kind of. Challenges are often interacting with utility are more technology-driven where their systems are older compared to you know the technology we might be using and um and that can lead to kind of breakdowns in some of the data communications between the utilities and and and third -party companies but um, generally it’s just a regulated relationship and they just kind of you know because we’re licensed because we have we’re member of the rto or iso where that that utility is which is the regional transmission organization. Um. They have to work with us basically is how it works I would say that in the community solar part of our business those systems and are much more nascent in the utilities and they’re often being done by hand by 1 person. Um to do effect to the billing or effect the credit allocations.
Tom Matzzie
Ah, for community solar credits and that’s a little that’s a little concerning to me I think that needs to be professionalized by the utilities. There are some utilities who have done have professionalized I think couple I would say are very well run in that regard and there’s others who have not at all and then there’s some who haven’t. Able to invest in the systems yet, but they have operations people who are paying really close attention and so that the the challenge is that’s different in many markets right? We don’t have one set of market rules and for data Exchange. We don’t have one set of Market. You know, um.
Tom Matzzie
Requirements for the utilities and so you have to be somewhat expert in all of these different utility Data schema and Utility Arcania for lack of a better term.
James McWalter
So yeah I was talking to somebody who works in the back tech office at at utility in the West Coast a couple months ago and they were telling me about how they’ve just this 1 developer who wrote some code in literally the early 1990 s and will always be there because they’re the only person who knows how to actually run some of the processes that they have internally met even before that might be dos like it’s f to incredible some things that are going on. Um, and I guess one of the kind of other elements is around kind of regulation and and the policy piece and so.
Tom Matzzie
And C sharp or something like that and enough.
James McWalter
You know we’re seeing you know different movements on the state level. We obviously saw some ah big moves and maybe not all the big moves we wanted at the federal level this year how do you think about the kind of role of regulation. What would you like to see change pro or con over the next couple years so
Tom Matzzie
Well I mean our company in ice. Personally, we support the moves towards 100 % clean energy that some states have been pursuing and yeah, we think that there’s a role for providers and in those markets as well. Yeah. Us as a provider either as a wholesaler by someone who develops projects or for consumers who are looking at that point then for a different type of plan with maybe time of use pricing or you know something. That’s a little different than the plain vanilla. They might get for utility. Um. So I think that one we want to see more states push towards 100% clean energy. The second is from the feds we need them to keep the tax and corporate kind of structure structure. You know innovation going. Um that is very important to support. Um, you know, new renewable energy projects. And I think they need to extend it to new technologies and new types of you know consumer behavior whether it be storage or extending it to certain home energy efficiency investments um or other type of investments like that but most energy policy at least climate tech is broad in many areas, but most. Most energy policy set in the United States at the state level and um and you know we have seen some states really move very quickly. New York obviously being one of them illinois being another but do we have other states that are um, you know, dragging their feet and aren’t moving forward at all. We have other states that kind of are start and stop start and stop and you know we need to see more consistency.
James McWalter
And I guess that consistency is brought on by you know the usual kind of levers of you know Activism policy. You know political change that kind of thing. Wow.
Tom Matzzie
Yeah, and I think 1 thing I notice is we increasingly every year have ah legislature legislators in the states who are more and more sophisticated about these policies and how they facilitate. Both climate impact but as well as well as economic development in their states and so when you have ah you know a senator a state senator or state legislator who understands this. It’s a really big step forward. Because they are actually more fluent in understanding how government can support and policy can support these you know virtuous activities. We want to see happen than even the industry can be and and so that one of the things I think has been exciting to see has been to see over ten plus years legislators who now get it and are working um to advance clean energy and climate solutions.
James McWalter
Yeah, know the the picture even just in the last you know six to nine months has dramatically changed since I’ve started kind of following it in depth and it is quite exciting right? It’s you know we are starting to see that flow of you know ideas talent and kind of money coming into the space.
Tom Matzzie
Yeah, and I you know I would say um I’ve been in this space long enough to have seen that once before and then see it Alpha dry up so we have to create we have to figure out how to make the whole virtuous cycle of capitalization work from seed stage through liquidity.
James McWalter
People No no.
Tom Matzzie
So that investors in all of these areas um can can feel comfortable that their money is not going to be wasted that there is a path to return of any level I mean I think it’s just like not having it be philanthropic at that point. Um, and. Yeah, we have had in the last ten years a couple of big companies who either went bankrupt or just you know got stopped operating their assets got gobbled up by somebody else that have then really does have been really big setbacks for the industry. Ah, so I’m thinking about like sun edison or there’s a company in the northeast called nextstep living that was doing home retrofits but been very successful until it wasn’t and um I think ah, you know we have to be careful about.
Tom Matzzie
Losing the momentum we have when when there’s a new wave of failures. Um, yeah.
James McWalter
yeah yeah I mean there’s absolutely you know a ton of ah venture money in particular is like flowing into climate tech kind of generally and which is incredibly exciting I do say to people though is like you know it is venture so 90% of the things they fund will fail like that is that is the model and so.
Tom Matzzie
Um, yeah, right.
James McWalter
Um, you know we have to have that discipline collectively over that time that you know even as things fail. Um, we can maintain it and I think it comes back to one of your earlier points that you know I think but lot of the technology we need not not in everything but a lot of technology we need is generally in place or on a path to commercialization. It’s the business model innovation that I think needs this.
Tom Matzzie
Yes.
James McWalter
You know, a lot of smart people thinking about trying to figure out How do you make these things get to scale Very very rapidly. Um, you know in this social way and you and you mentioned like there’s a lack of social elements to infrastructure. Um, it’s actually funny I was talking to somebody recently who’s actually looking at having basically a digital co-op using some of this web 3 technology to try to build some. Ah, clean, our 0 carbon apartment buildings in their neighborhood and like that those type of things are just starting to emerge and you know a lot of that a lot of that stuff is more smoked in you know, smoke and mirrors. But it is interesting. There is some innovation happening on that side as well.
Tom Matzzie
Here? Yeah no I’ve I’ve seen that those I’ve seen examples like that and it just it hasn’t had the like pop from um, what I’ve seen in my prior life experiencing. How. Cultural moments can really drive an upswelling of kind of action by millions of people. Um, and I think that’s okay because um, we also have products and services that people have to buy they need electricity. They need transportation. They need food. Um, they don’t need Facebook or Twitter. It’s just that that social component has like helped Facebook and Twitter or whatever. The social form is to get really big, really fast and so um, all of our our all of our solutions will have enduring long-term. Ah, usability and usefulness utility. Um, even as ah, things become the next compuserve or the next Icq chat or whatever you know it might be that becomes a little more dated. Um, you know the web 3 and deep in the dao or Dao whatever. However, you want to pronounce it? Um I think it’s still very nascent like the the user community for that is very small and um. I think people will be able to get things like digital co-op like that’s a that’s a term people might be able to understand um, but we’re a ways way. Yeah I think from the ah from what’s next although I think the idea of web 3 is interesting.
James McWalter
Yeah, yeah, absolutely. It’s um, it will definitely have its big crash in the next few months and then ah then people start building like real stuff on it. Hopefully after that you know, um.
Tom Matzzie
Right? Well we’ll have it’s 1999 and then everything else gets built from 99 to 2005 right it’s like that’s what happened twenty years ago
James McWalter
No Absolutely. We’re in that other cycle I think definitely um, you know this kind of background you have in politics I mean I think it’s this when I talk to different you know, ceos and founders who are bringing to bear interesting kind of backgrounds that aren’t maybe atypical. You know, move through a couple different corporations and end up kind of founding something um often they will have some sort of kind of insight that you know surprises them when they kind of start focusing on a a startup fast movinging startup trying to get to a certain level of scale. Um, what. But I guess like most surprised you as you’re trying to build out a company relative to I suppose your expectations going into it. Yeah.
Tom Matzzie
Um, I mean I would say um I’m trying to think you know I think that I actually wrote a business plan for my company at the time that I started it because I was the first investor with my savings right.
Tom Matzzie
And I wrote like a 65 page single-spaced like narrative document on the business plan and all the risks we would have to address and as I’ve looked back at that overtime a couple things that were really never accounted for was 1 kind of black swan events.
Tom Matzzie
And the second was I think we probably overestimated the consumer demand. Um, you know earlier and I think that you see this actually reflected through ah the customer acquisition cost for rooftop solar. For example, being very high. Our product is an ingredient. It is not a solution entirely right? We’re a solution for a different problem. But if for our customer it’s a solution for their identity or maybe there’s a cost savings component but the product works the same. You know, generally before and after the customer makes the transaction and so um, you know that’s a different thing to try to figure out how to get people to adopt than something like carrying 5000 songs in your pocket with an ipod um, and it’s a.
James McWalter
Right.
James McWalter
Okay. Right.
Tom Matzzie
You know I think I underestimated at different times. How much demand there was for the ingredient and um, and really yeah, having to take spend time to understand the consumer better and what they were looking for which is really just to be can get find the easiest onramp possible.
James McWalter
That makes absolute sense and Tom this’ been great I really enjoyed the conversation I suppose before we finish off is there anything I should have asked you about but did not brave. Um, thank you so much Tom this has been great.
Tom Matzzie
No lot fun all right take care.