Predicting Energy Markets – E99

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

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James

The unedited podcast transcript is below

James McWalter

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

Lauren Kuntz

Thanks so much for having me.

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

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

James McWalter

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

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

Right.

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

So bit botch right.

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

Wreck.

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

Business.

James McWalter

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

Lauren Kuntz

Yeah, yeah forger.

James McWalter

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

Lauren Kuntz

Congratulations. Um.

James McWalter

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

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

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

Lauren Kuntz

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

James McWalter

Did not.

Lauren Kuntz

at founders at http://geyoscope.com

James McWalter

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

Lauren Kuntz

Yeah, thank you so much.

Offsetting with Better Design – E98

Great to chat with Andreas Homer, Co-Founder & CEO at Aerial! Aerial is the app with the easiest, most accurate way to manage your carbon footprint and sustainable lifestyle! We discussed tracking your carbon emission with an app, offsetting options, NFTs, starting a company during the pandemic and more!

https://carbotnic.com/aerial

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 string good Andreas Homer cofounder and CEO at Aerial welcome to podcast Andreas. Great to start. Could you tell us a little bit about Aerial.

Andreas Homer

Thank you so much for having me.

Andreas Homer

Yeah, absolutely so we founded Aerial based on the concept around quantifying carbon emissions across different sources and making it really easy for people to see those numbers and take action on them. So my team my founding team we have. Background building products at companies like Instagram Microsoft Casper um and many others and we decided that we could probably have a unique take on the way we build a brand in a product in this space. And build something that feels familiar lovable relatable and like a lot of your favorite products and so we saw that the space was really lacking that. Um and so we first built an ios app that quantifies your entire carbon footprint for the last. 3 years based on a travel rideshare train confirmations. So you sign up with like your Google or your Microsoft account and we show you usually within 30 seconds depending on how many confirmations you have what your carbon footprint looks like across those different categories. Um. And we’ve since launched on Android and we also built a whole suite of tools for web 3 so um, a lot of creators wanted to learn more about their energy consumption on Ethereum and we built a couple prototypes and ended up launching them with. First with Calviniris for one of his big projects that he was working on and then since then we’ve further developed the tools and methodologies and um, worked with a lot of different brands like Pepsi and Levi and budvisor to other celebrities like Shakira and then other web 3 collections like some that you might have heard of like moonbird and deadfeass etc. So yeah, we’ve really started out with the idea that you know how can we take the skills that we had at these other you know companies that we help build and build those delightful experiences in the climate space for people and brands and really everybody to use.

James McWalter

Yeah, so I actually downloaded the app. Um before the call and had had it. You know, go through my emails and yeah, so I’m in the 23% worst emissions anyone on on the platform which for somebody working on climate is obviously not not ideal. Um. And it’s very slick. It is absolutely as you mentioned it’s it’s a very you know, kind of delightful experience. But I’m sure it wasn’t like that like out the gate. So you know how any kind of difficulties as you’re kind of building out your Mvp or you know what were the kind of interim steps to get it to something as smooth as this.

Andreas Homer

Yeah, well I think one of the first things that we started to think about was how could we wow people when they signed up for the product. So we’d seen like a lot of different. Ah. Websites and tools that had existed where you would answer a series of questions or check some boxes and then just get information that was more or less like a one-time. Screenshot. So our first thought was what are some of the signals that we can use to make that. Ah, much more rich experience that shows you much more. You know customized information based on your own behavior and um, really make it something that you can live with so you know every time you get an uber receipt or a ride chair or a trainer seat. You get? ah. Notification and a new activity in the product that shows you the distance the kilograms or pounds of co 2 depending on your setting and then an overall view like a pie chart. So initially you know looking at different signals like there are a lot that exists there. There are motion. Signals there are signals from your inbox or signals from your your credit cards and we ended up settling on email because it gives you so much information and around your carbon footprint. So your uber receipts your lyft receipts your train your any flight right? Delta united etc. Um will show up. So um, that was initially probably the biggest challenge was building that out just because there is a lot of complexity around parsing that information. So. Um, yeah I’d say I’d say initially it was a big, pretty big hurdle to get over. Um, but once we started you know, onboarding early users. They had this sort of aha moment where you know this pile of what would normally just be useless information turned into. Ah, new rich data set that that not just gave them that view into the past but also that view going forward with those new activities. So I’d say that was probably initially the first big challengers like what signals exist that. Can give you real insight here and created engaging experience that not only gives you that 1 time snapshot into the past but also an accurate view going forward.

James McWalter

Yeah, that that that makes a ton of sense I Guess you know as you’ were of trying to think through whether credit cards or email know receipts and like the different kind of sources of information. Um, how did that I guess kind of translate into what the total total typical potential users emissions look like. So again for me who does not own a car and does way more flying than they should ideally like it’s probably a pretty accurate total because basically everything outside of that I’m just cycling So it’s like it’s It’s pretty low, but um I guess for people like like my exact profile. Um you know Suburban heights would. But a car. It might not show up in the same way and so how do you think about? you know, balancing different type of users to get like a accurate representation of their emissions and.

Andreas Homer

Yeah, we’ve we’ve looked at other sources like for example, credit card charges and the problem is is. It’s not a great signal for emissions because you actually don’t know. What dollar amount correlates to an emisssion type or a distance for example, so if you book a last minute flight from Los Angeles to San Francisco that’s a pretty short flight but it could cost $400 so booking a flight to europe sometimes you know you can get. To London from San Francisco for for just about that much one way. Um, so how do you differentiate between those 2 those 2 charges same goes for grocery shopping like you have no insight into what’s being purchased so we’ve thought that it was kind of a weak signal and you are asking. Yeah, of course asking you’re asking someone to sign up with their Google or Microsoft account that does have friction but so does ah credit card. But at least we’re giving people like accurate information. Um, so I think that was the tradeoff there was like you know by going that route. You couldn’t possibly capture more activities if you’re using like 1 credit card for example, but how accurate is that information. Um, so I think I think that’s one big thought there that we had um and neither one is perfect of course. But when it comes to other activities. I’d say the biggest the biggest 3 categories for an individual are travel transportation and home energy. Especially since we’re all doing a lot more working from home these days. So in addition to that there are things like diet that account for. Ah, you know a percentage of your overall footprint. But if you’re driving you’re flying and you’re you know, working from home doing all one 2 or 3 of those things chances are that that’ll consist of the vast majority of your bureau footprint. Um, so yeah, we’ve been looking at other sources we have ah a prototype for home energy that we’ve been playing with which is pretty interesting, especially as I said people are working from home more permanently now. It’s not just a pandemicic phenomenon and then things around motion as well. So capturing. You’re driving capturing ah positive activities that you do like biking you mentioned or taking an electric scooter or any form of transportation that’s cleaner than the alternative which is you know, maybe a suv for example, so we’re constantly looking at these different sources of emissions.

Andreas Homer

But at the core we’ve wanted to create the most seamless experience for the most people and not require like manual tracking of information or you know giving false positives which is a common theme around motion Sentencing. So. Yeah, it’s a tough problem. But I think you know if you can cover travel transportation and home energy. That’s like the vast majority of the footprint.

James McWalter

And yeah, it’s it’s so interesting. You know I’m again, maybe in some areas are typical reason typical I’m talking about myself just because ah you know you’re getting user test out of this as well. I guess um, but I’m very much a quantified self kind of person and even for me who tries to track an incredible amount of things. Those elements that use things like Gps to identify where I’ve been and the time I spend in certain places and you know you like my office is is connected and it automatically tells me how much time I’m spending at a work site versus an nonwork site those always get are just. Have way longer history and more effective history than the ones where I have to actually imagine it open up a spreadsheet once a month and like try to remember what I did so absolutely think starting from the lowest friction data collection point and then that’s your wedge like makes absolutely a ton of sense. Another thing I know slow in the app was this? Ah. Community has saved 22000 trees and so kind of trying to connect the um, the spent emissions with something that is you know mitigating can you speak to that process in in more detail.

Andreas Homer

Yeah, absolutely so when it comes to the community aspect I think it’s really important to obviously you know have mechanisms within the product that make people feel like they’re part of something bigger. And that’s one of the goals with you know that community feature is just to show people that there is a broader you know broader community there’s broader action that’s happening outside of just yourself. Um, so yeah, that’s ah, that’s the idea there. Um. When it comes to those types of statistics. What we’ve been trying to do is make the the numbers as relatable as possible to people. So for example, not a lot of people know what a carbon credit is or how much carbon it equates to but 1 carbon credit is equivalent to one metric ton of c o two and so you can you can make estimates on for example, like tons of co 2 equivalents to number of trees or cars taken off the road or you know there are some statistics that can be used in order to show why these numbers are relevant and what they mean because I’m sure you’ve noticed like at that main screen view of your footprint. Knowing what a ton of co 2 is is pretty difficult so trying to build that relationship between the the individual and tons of cotwo is really the goal there um build that that intuition and awareness. Um, because if I ask you. How many kilograms of flight from San Francisco to New York emitted it might be a tough question answer you might know I don’t know but ah well yeah, yeah, so it’s it’s one of those things where if you can relate those.

James McWalter

Sure I wouldn’t and again I live in this world and I actually do not.

Andreas Homer

Numbers to other statistics that make sense to people I think it becomes a lot easier to communicate and that’s one of the challenges in this space is you know the activity tracking space had this problem ten twelve years ago where products like Fitbit and Strava would show you. Calories burn for activities. But for the longest time like the average person just didn’t understand like what that metric meant because we had been used to like pedometers and numbers of steps and over time like there. There is sort of this connection that you build with the metric. So. You know now I know if I do a three mile run I’ll Burn Eight hundred calories depending on the pace of works. But you know you have you build that relationship with the metrics and I so I think a similar thing is needs to happen on on the sustainability side where people actually start to understand what what these libers. Actually mean and what they equate to.

James McWalter

I absolutely agree. Um I actually did some whiteboarding a year or two ago with a couple folks who are trying to come up with a better than a ton ah concept and then you know things like trees are like probably the most sensible one and the way you’ve done it um in terms of the offsets themselves though. You know it says in your website you know verified environmental projects you what would it like a typical ah you know carbon ah offset from a specific or a typical type of project look like.

Andreas Homer

Yeah, so there are quite a few different partners that we work with. We have a few listed on our website which are ah forestry projects as well as advanced carbon removal through a partner called charm industrial. Um, so for the most part you know every project type has pros and cons. So generally we like to do a blend of different projects. So um, you know forestry like ah land-based projects as well as blue carbon projects and advanced carbon removal. Projects. Um, so we’ve been doing a lot more blue carbon which we’re going to be communicating more on our website. We’ve done some we did a cool partnership with an entity called sea trees based in Southern California they have some really cool ocean-based projects and.

Andreas Homer

Plant mangrove trees and restore kelp forests. So we did a partnership with an nf platform called bitsky over Earthweek and we also did one with maker place. Another Nft platform that included some of these blue carbon projects so more to more to come there on our website. To update that. But um, yeah, generally speaking the land-based projects anything that we work with it has to be verified by by one or more third parties so the most popular ones are ah american carbon registry climate action reserve and. Vera. Um, so yeah, and in short any practice that we work with have to be verified. Um, and in addition to that we’re doing a lot more with blue carbon projects as well as our existing work with advanced carbon removal.

James McWalter

I Yeah I’m I’m very familiar with charm I know some of the folks over there pretty well very cool company doing some really cool. Ah you know offsetting and it’s It’s great to hear that we’re starting to see more blue carbon offsets I Know a lot of people go through the you know Kelp and mangrove obsession when they start for sort of reading about offsets. But. Scalability elements become an issue and you saw you know running tides and few other kind of companies who are early to it and you know it’s great to see that sea trees um are starting to kind of get offsets on the market as well because it’s It’s very cool. The the kind of power of your blue carbon relative to the landbased stuff.

Andreas Homer

Exactly? Yeah, Oh no I was going to say um, it’s It’s also it’s interesting because you know every project type like I was saying has pros and cons and so um, you know there are issues around scalability for like the direct air capture. Technologies There are issues around additionality with a lot of land-based projects and um, you know I think questions around like erosion arise when you discuss like mangroves and ocean-based Projects. So I think Overall it’s just best to have a more. Um. Balance approach when you’re looking at credits because none of them are perfect. But I think when combined they can be be pretty strong. Um, yeah, so that’s just ah, a.

James McWalter

Yeah’s portfoli. Especially if you’re starting to have a lot on the demand Side. You have the ah ability to kind of create a portfolio of credits who you know have various kind of flavors. You know some more permanence but maybe more expensive some that are hitting specific ah kind conservation elements like. Mangroves and so on um and you can start to build something that you know I think yeah, any the consumers using your product will actually find compelling at least someone across all those different options like some people get very excited by dac and some people are like you know, show me some trees. Um I Also noticed I Guess the kind of final section of of of the app. Um, and I like that various. Um these kind 3 steps. It’s like what what are your activity Your overall um overview The last one is discover and seems to have you know some specific kind of action items that. Yeah I Presume is kind of custom to the individual. Um that they can take to have a more kind of sustainable kind of Lifestyle. Can you speak to that process. So.

Andreas Homer

Yeah, so we actually almost all of those content pieces are are written all and were written by our science writer and ah there are a few that we’ve reposted under the the rules. That apply for example from Mit and a few others. But for the most part they’re written and curated by our science Writer. Um, and the the process there is just to keep them as short and concise as possible and make them. Ah as as. Um, friendly and not intimidating as possible because obviously I think what we’ve seen a lot of is sort of like guilt or shame-based tactics to get people to reduce their consumption of like you know. Troum based goods or fast fashion but the reality is is like people are still going to travel. They’re still going to drive. They’re still going to buy things online. So Why not show them maybe better ways to do those things without telling them that they shouldn’t do them or making them feel. Bad about doing them. So if you notice like the themes in most of those pieces of content are mostly like how to do things more efficiently as opposed to you know don’t fly or um, don’t use energy at home during these hours like we’re not. Know That’s not realistic for a lot of people. So yeah, just generally we try to be informative give people information that they can act on and as best as possible, not alienate people because I think it can be a bit intimidating if you. So reading content about these topics and feel like you’re helpless or feel bad about yourself. So It’s a goal there.

James McWalter

Yeah, that that that makes sense and yeah I think there’s always like a balanceunce between the carrot and the stick as well with with these different things like if you’ve too much stick people have that sense of learned helplessness or you know give up like why bother. It’s too big. A problem. Um. Termly if it’s like oh it’s so easy like that don’t have to do anything at all like that’s not that not true at all and so I think as you said it’s it’s kind of trying to strike that balance the other piece that that you mentioned at the beginning was around this idea of offsetting you know and Nftts from various kind of creators and anything to do with Blockchain has ah. Like definitely had a lot had a lot of articles written about the you know the relative dirtiness from a energy point of view an energy consumption point of view of things that have are kind of based in the blockchain and so I guess we’re the genesis of kind of focusing on. Nfts and crypto come from and what’s the kind of overall approach there in terms of you know what? Aerial ‘s trying to achieve.

Andreas Homer

Yeah, so early on a couple years about two and a half years ago we we’d been playing with and nftts and me and my cofounders had you know, been aware of a lot of the projects in the ecosystem just because. Do follow a lot of you know, different areas of the the software the technology industry. So my cofounders had minted a few as creators like photography and design and nfts and we we realized that there there was. Lot of potential there. Um, and it wasn’t until really the beginning of 2021 the end of Twenty Twenty that mainstream artists started to take on and nfd projects. Um, and so around that same time. This discussion around the environmental impact of of crypto and nfts started to come to the fore forefront. Um, and so and happening was this immense popularity of Nfts rapidly increased like public awareness you know around. What the ethereum network was and also you know in in conjunction with just more volume in trading and mining increased the consumption across the network. So that’s when we started to see that people were you know looking into the energy consumption. Ah, ethereum and Nfts and by chance we had actually been prototyping adding your crypto wallet emissions to our app believe or not so we had been looking at ways to show you your your wallet alongside your your flying your train travel your rideshare. But we tabled it because we thought it maybe didn’t really make sense for that audience but we had a really unique opportunity come along someone that we were close to knew that we we had worked on that wallet analysis and said hey we’re working on some. Really interesting nfd projects. Um, you know, maybe we can help you know help people understand their the footprint of their Nfts and so we built a pretty rudimentary first prototype and then did a couple. Big partnerships out of the gate with like Calvin Harris and Mr Brainwash and some other really really well-known creators and then from there. We just had a lot of inbound interests and started I started reachant to a lot of my.

Andreas Homer

Like my contacts as well who were working on projects and um, you know the idea really was like how can we try to move the space forward and provide like a temporary rage for people who are maybe a little bit more reluctant to enter the space. So from the first day that we started to work on this stuff like we’ve always known that technology would solve these problems with Blockchain Blockchain energy consumption. But we thought you know how can we help your exact app. Give people some numbers and the same in the same spirit as what we do in our app right? where we show you the numbers around your travel and transportation. Can we put an estimate on these nft emissions and your ethereum transactions and so what’s happened you know what’s interesting is I don’t know if you follow. This world at all, but the merge to testnet was successful for ethereum to move over to a proof of stake network and so what was once just a talk of you know, talk of the town around um the sustainability of ethereum. Has actually now moved materially in the right direction and so still unsure when it’ll move from testing that to production. But um, you know it’s a pretty dramatic shift from the power hungry proof of work mechanism that currently power. Powers Ethereum um, and I think a lot of that is due to obviously efficiency issues across like number of transactions per second but also just like the immense demand for a more sustainable ethereum immense demand from artists from creators from. Platforms. Um, and really anyone with a voice in this space because if you’re a minor you’re not going to care one way or another um you know about making noise about this because it’s not in your interest. But if you’re ah a well-known creator who has a platform. Like a famous artist or a brand. Um, it’s in your best interest to talk about it and um, do something in the short term but also like discuss how this can be solved from a technological standpoint. Um.

James McWalter

So it idea then you know let’s say I’m yeah famous djfamous musician I’ve minted you know a thousand nfts of a certain type and that’s produced a certain amount of carbon just because of the energy. Mix used in the production. So some of it was green but let’s say a lot of it was from traditional dirtier sources and would I then offtset the thousand or would anyone a purchasing have the option to offset like how does that kind of dynamic work I guess where it’s responsibility for. You know, greening the Nft lie.

Andreas Homer

Yeah, exactly yeah so it really depends on who the creators but it’s generally whoever is minting and selling the nfts that will take that action and part of it is because they’ll have the most visibility into. Overall number of transactions and really the responsibility for that and they’ll also be able to talk about it and you know at their launch at their Twitter spaces or their discord. It can be a ah talking point that that that they discuss um. So I think you know obviously you don’t get that if you’re an individual buyer and you’re just offsetting your crypto wallet. For example, your ethereum wallet. Um, so yeah I think it gives um you know the creator the opportunity to take that action to talk about it with their fans. Um. And hopefully like I said before keep pushing the space in the right direction which I really I’m very bullish on space from a sustainability standpoint I mean there are several blockchains that are alternatives to ethereum that exist that are very energy efficient like salana. Flow tesos polygon and you can min nfts on those blockchains and it’s ah very very low energy consumption like even to the smaller energy consumption on some of these watchins than doing a Google search. Um.

James McWalter

Emailing a Jpeg which is not too disabler.

Andreas Homer

And yeah, yeah, so these these these alternatives exist and once ethereum you know moves over to the consensus layer. It used to be called ethereum two point zero. But now it’s called the consensus layer I think you know it’ll it’ll Mark a pretty big shift in. Um, the way the network works and the way that all networks going forward ah will work. So I mean if you’re building anything now in blockchain sustainability and energy efficiency is a core pillar and that wasn’t necessarily true. A couple years so things are moving in the right direction.

James McWalter

How do you think about that from I guess a business point of view at Aerial  because I guess the cleaner the blockchain gets the the less of your opportunity I mean obviously better for the planet which is in the end. What we all want but ah yeah I guess you know you’re building for that use case and that use case is getting. Yeah, dramatically cleaner. There might just be less to be offseted in that space.

Andreas Homer

Yeah, so it’s interesting since we we did our first release which was the beginning of last year um we explicitly mentioned ethereum 2.0 and our position has always been that. What we’ve built is a temporary bridge for people who are probably a little skeptical or less likely to want to build particularly on ethereum but that as I said before this problem will be solved by technology. It’s not going to be solved by. Carbon offsets or carbon removal like it has to come from the top down. So I think we’ve been like pretty clear about that. Um, and for us like we’re actually really excited for ethereum to become a a proof of stake network because it. Opens up the door for us to do a lot more on chain which we we plan to do so we actually think like it opens up the door for us to do a lot more in the space and so we’re we’re actually pretty excited about it. Um, and we never viewed it as ah, you know, maybe the longest term part of our business. Um, and we we want. We want it to move in a cleaner direction. It’s better for us. Actually.

James McWalter

That’s that’s that’s great to hear and so then kind of thinking ahead. You know what are those kind of next 12 to 18 month goals for Aerial .

Andreas Homer

Yeah, we have we have a couple big bets that we’re making right now. Um across on the mobile side and on the the web 3 side as well. Um, and I’ll have you know, hopefully more to share there soon. Um, but yeah, we’ve we’ve definitely been pretty good about seeing where people are using our products where there’s traction. Why people like the brand why they feel compelled to share it or talk about it and so we’ve been looking at a lot of those signals across our products. And thinking big like how can we you know have the most impact. How can we scale? Um, and so yeah, we’ve we’ve got a couple things we’re cooking up that um, can’t talk about Jesse yet. But I think will be. Pretty exciting.

James McWalter

Yeah, excellent, no, but I’m sure I’m looking forward to kind of keeping an eye out for that I guess thinking about you know how the company has evolved over the last couple of years I believe you know you raised some capital last year. Um, you know and and and kind of building that team from those that that core. Early group any kind of I guess surprises along the way things that know I believe is the first company you’ve been Ceo of ah you know even mistakes that you were like oh that that was not what I expected as I kind of try to build the company.

Andreas Homer

Yeah, so it’s actually this goes back to Microsoft so I actually I helped build a couple different software startups 1 was a private social network called path that was founded by an early Facebook or. And the cofounder of Napster. Um, the company did all right? You know, ended up selling it to cacao talk which is like a korean equivalent of Whatsapp and I did another company that was a mobile email calendar startup a really small team. We ended up selling the company to Microsoft so I was. Ah, director at Microsoft for four and a half years and I left near the end of 2019 and I raised this little small tiny round to just get things going with with my co-founder and lo and behold dun and. The pandemic hits just a few months later um in March of 2020. So yeah I think when I look at you know challenges along the way. Definitely leaving one of the most stable companies in the world to build something new. Um, you know, particularly in ah, an a nascent space um presented present a lot of challenges. Um. You know, obviously like we were all working together in our office in San Francisco and then overnight our office just closed down and we had to work you know from our apartments and so so yeah I I think you know for from our standpoint like. You know and my cofounder was at Instagram before and um, you know having that sense of stability and then you know leaving and starting something new and pushing through to get a product out. But yeah I’d say you know it’s not a. A direct answer to your question around. You know some of the things that we could have done differently but I it just goes to I guess the point I’m making is like it’s good to learn from your past mistakes and.

James McWalter

So sure.

Andreas Homer

Also at the same time realize that there’s no perfect timing to do anything like starting a company. Yeah, um so I think like you know going back to your question like Hidesight’s 2020 but it’s like oh would I have chosen how to start a company.

James McWalter

Right? Always start.

Andreas Homer

In the worst pandemic in 100 years probably not right? so.

James McWalter

Yeah I mean it’s it so interesting to say that. So I think a lot of it is kind of kind of where you’re situated so as you mentioned you know you’re in the Bay Area you know you’re working at Microsoft and so on and so interpersonal. All physical connections were obviously so important. That time I was actually living in Mexico waiting on my green card and I just had so little access to a certain type of yeah investor and and people who wanted to work on things and then everybody was on a Zoom screen and so nobody cared that I was in Mexico or wherever you were as long as you could you know make a meeting a specific time. Um, you had that access and so. I think depends on the kind of company and the access. So for me, it’s like it probably made it more difficult in the traditional areas where startups flourish but it definitely leveled the playing field for a lot more areas the world as long as they’re they’re willing to kind of work with a time zone difference on ah on a Zoom call.

Andreas Homer

Of course, yeah, no I completely agree. It was just it’s you know you get used to just you know being elbow to elbow early on and just turning to each other and discussing ideas and you kind of lose that you know with not being near each other. Um, so It’s a pretty big challenge and I do agree the the fundraising like you could take 20 meetings in two days if you wanted to all over Zoom which wasn’t a case in the past where you had to do a lot of things in person and meet people for coffee or for lunch or whatnot. So. I do think the velocity of meeting people for fundraising also wasn’t necessarily a bad thing. You could do a lot more in a shorter period of time. There are some good things that came out of it but definitely difficult to adjust to particularly you know. So early on in the company building process to have to just you know disband from our office and our routine and you know have to go on Google meets and hope for the best.

James McWalter

Right? that those super early days. There’s they’re so fragile as well. Right? like you’re trying to summon something out of nothing. Um, and so yeah, not like that that level of disruption. Ah you know is is is absolutely super high. Um. Andreas This is this’s been great for really enjoyed the conversation before we finish up is there anything I should have asked you about but did not.

Andreas Homer

Um, I think we covered a ah lot of cool topics I I guess 1 thing that we didn’t talk about which I um, you know wouldn’t mind touching on is pertains. Ah, you know the idea of individual responsibility with. Regard to climate change and it’s a question that I get asked a lot and you know by friends and like people in the space like you know why should an individual care when the biggest polluters in the world are. You know oil and gas companies and big corporations and I think what’s interesting there is especially in light of you know the last couple years which has shown that. Big companies and governments alone can’t solve our most pressstling problems. So right? Like if you look at the last couple years like keeping distance from people and getting revaccinated and you know, avoiding crowded places. Um, those are like the only ways to actually. You know temper the aggressive spread of a really big global problem. So you know we as individuals had to decide collectively that that was something we were going to do to limit the severity of this problem and so I think that climate is actually. Quite similar because you have this problem that affects everybody regardless of where you are in the world in different ways of course. But um, you know it’s pretty convenient to just point to governments and big companies as the culprits and the enemies here which I’m not arguing with right. Oil and gas is by far the biggest fluter on the planet. But at the same time. Why do these oil and gas companies keep drilling and keep producing fossil fuels because there’s the demand for it. There is a man for it across. Ah. Lot of different sectors transportation is 1 whether it’s flying or the cars that we decide to buy. Ah if you look at fast fashion right? like that’s ah, a lot of those materials that are used in fast fashion or petroleum-based materials. There’s a lot of plastic nylons polyesters right. Are derived from fossil fuels. So I think and our ah you know societal obsession with plastic in general. Um, but yeah, if you look at just across the the spectrum of consumption. You know we are driving.

Andreas Homer

Demand for Fossil Fuels for for petroleum-based products and so at what point do we yes hold corporations responsible. But also you know, read the room and realize that we’re contributing to a lot of this demand. Um. And I think Consumers Underestimate sometimes like how powerful we can be um because you know sometimes I think it’s easy to think that you know obviously ah you know your your your voices and counter action actions don’t Count. Um, but. Thinking change pretty quickly and I think you know there is a lot of greenwashing going on. But I think a lot of companies are realizing that consumers are caring more about sustainability and reducing reliance on on Fossil Fuels and um. Dirty Materials petroleum based materials and so hopefully you know Collectively we can ah apply more pressure on that on that system and reduce some demand for for for Fossil Fuels. So anyway, that’s just a.

James McWalter

Yeah, yeah, I’ve ah but yeah, have a couple couple thoughts on that. Um, and generally I actually do agree with you I mean the way I think about how how do you kind of enact dramatic climate you know change mitigation so we have these large levers and so government is a lever. Um.

Andreas Homer

High level.

James McWalter

You know, corporate action is a lever you know activism is a lever and I would say those are the 3 big levers today with consumer behavior this like distant for it and 1 of the I guess the dirty truths of environmentalism today is that climate change mitigation is very much an elite driven like phenomenon right now like it is. Generally in the and the fine elites. Yeah, however, want to wish but educational profile economic profile those kind of things. The people who are working most actively and making the most kind of active change to climate are generally people who fall into that kind of elite level booke. Um, on the other hand. 1 of the things I think from a yeah, just a human psychology point of view if you take ownership and action. You will feel better about the problem and that is just regardless of nearly any kind of phenomenon out there right? Um, you know there’s a but pothole on your on your local road right? um. You know you can take ownership fill the pothole and then you can take action. You know bug your local like counselor or whoever the government official response for that until like they commit to never doing that again or making sure that those proper upkeep and that’s a lotsh more powerful than kind of just like complaining to your you know spouse or friend. Oh they never fill up the potholes right. And so and even if it’s unaffective and effective. It’s like oh I keep complaining about this pottle not being filled and nobody’s filling it at least if you’re complaining and and doing activism and and working on the actual right levers you are actually making some progress you are probably starting to connect with people who have common you know, common cause on those cotopics and so I think. But on the individual level even if it doesn’t necessarily have a massive effect and even if it is true that the largest polluters you know one person’s change is not going to necessarily affect the largest. Yeah relative to the larger producers changing it still gives you ownership in a way that like. Not just the despairing are on climate right? like the only people I who are like incredibly hopeful of climate are the people who are actively working on climate like mitigation right? All those people are like super optimistic even when they’re pessimistic, they’re like for. We’re going to figure something out you know and that’s mainly because they take an ownership and action and even if it’s in some areas like a kind of. Yeah, maybe borderline and pointless endeavor. There’s still such kind of psychological power in taking those steps yourself.

Andreas Homer

Yeah, definitely yeah and it’s it’s also interesting to see like you’re right regarding the that sort of top 1 you know to 2% who globally right? who or who who care about these topics. Um, those people also omit more exponentially more emissions per year than someone who sorry, there’s a fighter jet flying right over my house right now. Ah yeah, is it.

Andreas Homer

Very loud. Um, but yeah, wealthier people in developed countries tend to emit exponentially more than people in in developing countries. So it’s it’s ah it’s shitty because a lot of. Developing countries will be hit a lot harder than developed countries. Um, and even though they’re not emitting as much carbon per per individual typically um, but but yeah, it’s it’s I have to look up the the statistics again, but there are some some. Pretty good studies on emissions per capita of you know, wealthier societies and wealthier upper tranches of countries and it’s not great. Um, so yeah I guess it’s good that those individuals you know. Care a lot because they are emitting a lot more per capita. Um, but yeah I do agree. It’s also tough because 1 of the symbols of economic development is the ability to harness energy like if you can that’s. But it’s led to so much of our progress and development is our ability to harness energy and you know if you look at a lot of developing parts of the world. Not all but some of them are just trying to harness energy. They’re trying to progress they’re trying to. You know, catch up. Um, and you know they might not have the cleanest sources of energy to to use. Um, so that that’s another you know topic it makes it tricky. Because obviously the hierarchy of needs in some of those places is very very different than ours right.

James McWalter

I no absolutely um and this it was was good chatting. Um, best liquid Aerial  and thanks for your time.

Andreas Homer

Yeah, thank you so much. And yeah, let me know if you ever get out to the Bay area yet. Okay, thanks.

James McWalter

Absolutely um I’ll be there next month

EV Charging Infrastructure for Fleets – E97

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

https://carbotnic.com/zeuspower

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

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

James

The unedited podcast transcript is below

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

But longer.

Jules Brenner

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

James McWalter

Right.

Jules Brenner

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

James McWalter

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

Jules Brenner

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

Jules Brenner

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

James McWalter

Yeah, so.

Jules Brenner

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

James McWalter

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

Jules Brenner

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

Jules Brenner

Um, accelerated a lot of their plans.

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

Jules Brenner

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

Title: EV Charging Infrastructure for Fleets – E97

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

https://carbotnic.com/zeuspower

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

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

James

The unedited podcast transcript is below

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

But longer.

Jules Brenner

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

James McWalter

Right.

Jules Brenner

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

James McWalter

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

Jules Brenner

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

Jules Brenner

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

James McWalter

Yeah, so.

Jules Brenner

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

James McWalter

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

Jules Brenner

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

James McWalter

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

Jules Brenner

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

Jules Brenner

Um, accelerated a lot of their plans.

James McWalter

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

Jules Brenner

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

James McWalter

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

Thank you Jules Brenner  has great.

Jules Brenner

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

Hydrogen Mass Transit – E96

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

https://carbotnic.com/stargatehydrogen

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

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

James

The unedited podcast transcript is below

James McWalter

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

Rainer Küngas

Thank you so much for having me.

Rainer Küngas

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

James McWalter

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

Rainer Küngas

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

James McWalter

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

Rainer Küngas

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

James McWalter

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

James McWalter

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

Rainer Küngas

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

James McWalter

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

James McWalter

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

Rainer Küngas

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

James McWalter

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

Rainer Küngas

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

Rainer Küngas

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

James McWalter

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

Rainer Küngas

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

James McWalter

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

James McWalter

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

Rainer Küngas

Yes.

James McWalter

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

Rainer Küngas

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

Rainer Küngas

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

James McWalter

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

James McWalter

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

James McWalter

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

Rainer Küngas

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

Rainer Küngas

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

James McWalter

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

Rainer Küngas

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

James McWalter

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

26:44.82

James McWalter

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

Rainer Küngas

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

James McWalter

Right.

Rainer Küngas

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

Rainer Küngas

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

James McWalter

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

Rainer Küngas

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

James McWalter

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

Rainer Küngas

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

Rainer Küngas

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

Rainer Küngas

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

James McWalter

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

Rainer Küngas

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

James McWalter

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

Rainer Küngas

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

James McWalter

No such thing in startup world. Ah.

Rainer Küngas

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

James McWalter

Business.

Rainer Küngas

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

James McWalter

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

James McWalter

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

James McWalter

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

Rainer Küngas

I Completely agree with this.

Rainer Küngas

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

James McWalter

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

Rainer Küngas

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

James McWalter

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

Rainer Küngas

Thank you.

Monitoring Electrical Assets – E95

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

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

https://carbotnic.com/wattiq

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

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

James

The unedited podcast transcript is below

James McWalter

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

Priya Vijayakumar

Thank you James lovely to be here.

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

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

James McWalter

Right.

Priya Vijayakumar

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

Priya Vijayakumar

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

Priya Vijayakumar

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

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

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

James McWalter

Fifth. Wreck.

Priya Vijayakumar

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

James McWalter

Right.

Priya Vijayakumar

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

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

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

Priya Vijayakumar

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

.

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

Yeah, oh who right? right.

James McWalter

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

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

Yeah.

James McWalter

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

Priya Vijayakumar

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

James McWalter

Ah, ask nicely? yeah.

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

Um, will.

James McWalter

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

Priya Vijayakumar

Over.

James McWalter

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

Priya Vijayakumar

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

Priya Vijayakumar

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

James McWalter

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

James McWalter

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

14:01.67

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

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

James McWalter

Yeah, sure. Yeah.

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

Um, urges none.

Priya Vijayakumar

What.

James McWalter

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

Priya Vijayakumar

Who.

James McWalter

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

Priya Vijayakumar

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

James McWalter

Yeah.

Priya Vijayakumar

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

Priya Vijayakumar

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

Priya Vijayakumar

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

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

Please.

Priya Vijayakumar

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

James McWalter

Ah I think it got good none of no.

Priya Vijayakumar

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

2

James McWalter

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

Priya Vijayakumar

Product.

James McWalter

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

James McWalter

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

Priya Vijayakumar

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

Priya Vijayakumar

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

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

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

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

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

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

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

James McWalter

Yes.

James McWalter

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

Priya Vijayakumar

Problem.

Priya Vijayakumar

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

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

6 walking line.

James McWalter

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

Priya Vijayakumar

Of when.

James McWalter

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

Priya Vijayakumar

Name.

James McWalter

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

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

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

James McWalter

Is it.

Priya Vijayakumar

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

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

Yeah, yeah.

Priya Vijayakumar

Ah, it’s like your middle name.

Priya Vijayakumar

Ah, yeah, with.

James McWalter

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

Priya Vijayakumar

Um, why exactly.

James McWalter

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

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

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

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

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

James McWalter

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

Priya Vijayakumar

Thank you you 2

The Future of Energy Delivery – E94

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

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

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

James

The unedited podcast transcript is below

James McWalter

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

Jason Huang

James thank you very much for the opportunity.

Jason Huang

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

James McWalter

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

Jason Huang

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

James McWalter

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

Jason Huang

Um, yeah.

James McWalter

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

Jason Huang

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

James McWalter

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

Jason Huang

That’s what what I have done.

James McWalter

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

Jason Huang

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

James McWalter

Please.

Jason Huang

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

Jason Huang

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

James McWalter

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

Jason Huang

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

James McWalter

You know mitigators.

Jason Huang

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

James McWalter

This is.

Jason Huang

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

James McWalter

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

Jason Huang

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

James McWalter

And.

Jason Huang

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

James McWalter

And.

Jason Huang

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

Jason Huang

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

James McWalter

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

Jason Huang

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

Jason Huang

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

Jason Huang

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

Jason Huang

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

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

Jason Huang

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

James McWalter

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

Jason Huang

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

Jason Huang

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

Jason Huang

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

Jason Huang

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

James McWalter

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

Jason Huang

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

James McWalter

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

Jason Huang

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

James McWalter

So very exciting.

32:41.20

Jason Huang

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

Jason Huang

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

James McWalter

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

Jason Huang

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

Jason Huang

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

Jason Huang

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

Jason Huang

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

Jason Huang

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

James McWalter

Absolutely yeah.

Jason Huang

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

Jason Huang

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

James McWalter

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

Jason Huang

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

James McWalter

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

Jason Huang

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

James McWalter

Like thank you Jason.

High Power Storage for EV Fast Charging – E93

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

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

https://carbotnic.com/electricera

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

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

James

The unedited podcast transcript is below

James McWalter

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

Quincy Edmund Lee

Thanks James good to be here how you doing today.

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

James McWalter

So.

Quincy Edmund Lee

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

James McWalter

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

James McWalter

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

Quincy Edmund Lee

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

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

James McWalter

Right.

Quincy Edmund Lee

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

1

James McWalter

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

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

25:31.26

James McWalter

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

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

James McWalter

Amazing.

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

Quincy Edmund Lee

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

Quincy Edmund Lee

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

James McWalter

And the Apple way.

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

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

James McWalter

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

Quincy Edmund Lee

Take care James nice to talk.

Drawing Down Refrigerant Emissions – E92

Great to chat with Louis Potok, Founder and CEO of Recoolit! Recoolit mitigates climate change by preventing refrigerant emissions! We discussed why refrigerants are the worst greenhouse gases, why southeast asia is the epicenter for refrigerant emissions, carbon offsets and more!

https://carbotnic.com/recoolit

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 edited podcast transcript is below

James McWalter: Hello, today we’re speaking with Louis Potok, CEO and founder at Recoolit,
welcome to the podcast Louis.

Louis Potok: Thanks James. It’s nice to be here.

James McWalter: Great. To start with, tell us a little bit about Recoolit.

Louis Potok: Recoolit is empowering sustainable cooling around the world. Cooling, which is air
conditioning and refrigeration, are two of the most important inventions of the last 100 years.
It completely changed every aspect of society like how we live, where we live, what we eat and
more. But there’s this huge climate impact that comes from the chemicals inside those devices
called refrigerants. And what Recoolit is doing is partnering with AC technicians around the
world to collect those harmful refrigerants, preventing them from being leaked into the
atmosphere and then destroying them and selling carbon offsets for the avoided emissions. So,
we are the software layer in that process that goes from the source device that’s being
decommissioned into the hands of the AC technician, into a cylinder, into a big oven to burn it
up and then the data that then goes to the offset buyer.

James McWalter: What drove the initial decision to start Recoolit?

Louis Potok: I was happily working as a head of data science in San Francisco at a health tech
startup and felt this, you know, crisis of meaning is a little strong. But looking for something a
little bit more and started reading about climate change, came upon this book called project
drawdown which was a ranking of 100 different climate solutions in order from most
important, biggest impact, to least, and refrigerant management was number one, I had never
heard of it. And so that’s what sort of got me going in this direction originally.

James McWalter: Yeah. It’s interesting you mentioned project drawdown. It actually had quite
a big impact on my own thinking when looking through different startup ideas of various types.

2
And I’ve actually been surprised that more founders haven’t mentioned it on the podcast
because I think it definitely has gone into a lot of people’s kind of thought process. But for you, I
guess, why were you drawn specifically to refrigerants?

Louis Potok: Well refrigerants were number one on the list and honestly, I basically stopped
reading. Everything else in the top ten felt familiar, right? Like, I knew about solar, I knew about
wind, and refrigerants — I’d literally never heard of, it was number one. And so I just thought
like, okay, let’s look at some job postings for refrigerant startups and there weren’t any, there
weren’t any job postings because there weren’t any startups, there weren’t any companies
really dealing with it. And so as I kept looking, I just kind of never went back to drawdown
because it became clear so quickly that there was this huge problem that needed to be solved.

James McWalter: So from that point to deciding that you wanted to start a company in that
direction and I believe you’re a solo founder. What was that decision making process like?

Louis Potok: Yeah. So, I spent about six months ramping up, nights and weekends during my
full-time job. And that was sneaking in conversations with people who knew the space, who
had looked at it, researchers, you know people in the industry. Just kind of getting a basic sanity
check; that I wasn’t crazy, that there wasn’t someone else doing it, that my understanding of
the problem was being developed. And at that point I wasn’t sure that starting a company was
the right approach. I mean the question of whether you can build a business based on solving
this problem or whether it’s policy, advocacy or a non-profit — still really unclear. And so then
that brings us to November of 2019, when I quit my job, decided to go full-time for what I
thought would be, somewhere between a few weeks and a few months. Moved to Cambodia
which I thought was going to be like the epicenter of the refrigerant problem, turned out it
wasn’t. But I got deep on the ground, talking to folks, and the AC technicians on the ground
there. And, that’s really when it just became clear that there was this huge problem and my
understanding was at this point richer than almost anybody else because I had sort of done the
high level work in the conversations in the US and been on the ground in the field. So that’s
really when the pieces started getting put together for me that there was a company in the
space that needed to be created.

James McWalter: Why was there such a large discrepancy between what you expected
Cambodia to be this potential large hub versus what turned out to be reality?

3
Louis Potok: Yeah. I mean Southeast Asia is definitely the epicenter. In the sun, it’s hot and
humid, people are getting richer, AC’s are the first thing they buy, and the regulations to phase
out these refrigerants are pretty slow. But, what I really was optimizing for initially was how
quickly could I get a visa and like be on the ground somewhere and not be bothered and kind of
wander around and not have to deal with immigration. Cambodia was great for that. Definitely
the right choice there but as I started talking to people who had built businesses in emerging
markets, I kept getting this consistent feedback that Cambodia is ridiculous because it’s just
way too small that your first market size matters a lot because going to the second market is a
lot harder than you’ll expect. So, I ended up starting the company in Indonesia which is the
fourth largest country in the world. Definitely big enough!

James McWalter: So, I guess when I think about refrigerants, I think about the US South. How
the development adoption of that technology changed the course of where people chose to
live. You had this kind of huge flourishing of people moving from the north to the United States
to the south United States. And I think I have a sense that we’re seeing that kind of throughout
the world that as AC, as a technology has spread, it’s changing living patterns and so on. But I
guess how has the history of, what chemicals we’re using in AC affected its climate impact. Are
certain chemicals more dangerous to the climate than others?

Louis Potok: Yeah. So, the history of the refrigerants is super interesting. The original
refrigerants that were used in the early 20 th century were a variety of different compounds. So,
they were using isobutane, ammonia, carbon dioxide even. And those devices were just like,
basically terrible, they were always exploding or catching on fire or corroding or leaking and
poisoning people. And then in the 1920s, this chemist at DuPont invented r12 which was a CFC
and that was sort of the standard refrigerant in use for the next 60 years. Mario Molina then
won a Nobel Prize for discovering that that was destroying the ozone layer. And so in the 80s,
the UN signed the Montreal protocol which phased out CFCs very quickly and led to a new
generation of replacement gases known as HCFCs. Those then got baked into the protocol and
were also phased out; they were no longer ozone destroying but still bad for the climate. So,
we’re now at HFCs. And those are also going to be phased out over the next 30 years around
the world but on very different timelines in different countries. So, the US and the UN are
already moving in that direction and in most of the rest of the world, it’s much slower. The
newest generation of refrigerants, actually interestingly some of them are going back to that
first generation of natural refrigerants, now that we know what we’re doing a little bit more, we
can handle some of those downsides but there are also newer chemicals called HFOs which

4
climate impacts allegedly good although there are some questions but in theory should solve
the problem over time as over the next 30 years as these devices are phased out.

James McWalter: So then is the larger issue, the fact that even the developing world is reducing
the overall climate impact of refrigerant; the developing world is counteracting that as it has
growth or as the economic growth of the developing world adds more refrigerant. It’s like
blowing past even the previous baseline provided by the developed world.

Louis Potok: Yeah. So, there’s kind of a race between those two forces. And a lot of it is still to
be determined; part of it depends on how quickly the manufacturers can make cost-effective
versions of these newer gases and devices that can handle them. But what it looks like is going
to happen is, there’s going to be a huge pulse over the next 10 or 15 years of devices produced
with the high global warming potential gases. And we have kind of one chance to capture all
those emissions as they happen. And then hopefully 20 years from now that problem will be
solved and we can all move on to greener pastures.

James McWalter: So, you’re in Cambodia and you realize the market is small. Indonesia is
where it’s at where you have to be. What was the next step?

Louis Potok: Yeah. So, as I was deciding to go, I was back in the US at this point. During the
early days of COVID and trying to raise money to get started sort of had clarified the idea into a
for-profit startup rather than anything else, another vehicle. So, I was looking to raise money,
looking for kind of connections in Indonesia to get started, trying to get my visa in Indonesia
which turned into a much bigger hassle than I had expected and kind of putting all those pieces
together and also starting at the time to work with a potential co-founder who I worked with
for a few months and that didn’t work out in the end.

James McWalter: And so you’re in Indonesia or you’re trying to get into Indonesia and I spent
some a little bit of time there, Jakarta is a chaotic place, super high energy, super great place to
be across a lot of different contexts. But definitely a… maybe a bit of a culture shock. So once
you’re on the ground, what were your steps towards some market validation?

5
Louis Potok: Yeah. So, it was kind of interesting. I had a few months where I was waiting for
them to reopen borders and like sitting in an apartment in New York. And just literally
messaged everyone I had ever met asking, hey, have you ever been to Indonesia? Do you know
anyone there? And I found some really great connections in the Indonesian AC industry that
way, which was kind of a surprise to me. So, starting to talk to the H-VAC contractors, people in
the energy efficiency space there, people who worked on environmental policy there… Just
again really basic, here’s my understanding what’s happening. Do you think this makes sense?
What are going to be the obstacles? And some of those later turned into partners for Recoolit,
and some of them, it didn’t. But that was kind of the way to get the way that we got started. I
actually hired the first two members of our Indonesian team from New York before I ever set
from the country. And then once I was there, it was really just more of the same; looking up AC
firms, calling them up, going door to door for the shops, really exploring every segment of the
market as we refined what we were doing and figured out how to explain our partnership
proposal in a way that was appealing to folks there.

James McWalter: And so, there’s definitely this kind of longer term software data plan as you
mentioned. But I guess today where are you up to, if I wanted, I’m in Indonesia; I want to
recycle some refrigerants. What steps would I take?

Louis Potok: Yeah. So, you would have to get in touch with us somehow either through one of
our sort of partners who sign up freelance technicians, we have a couple of those. Or maybe
you work for an H-VAC contractor that’s partnered with us on a corporate level. You register on
our… I hesitate to call it an app, it’s a little misleading, let’s call it an app for now and agree that
that’s a little bit of a fiction. Register on our app, upload your kind of identity verification and
then if you don’t have the equipment that you need to recover the refrigerant from that device,
you schedule a pickup. So, you come to like a branch office which are basically franchises for us,
we don’t run them ourselves. Come pick up some equipment, take it to your job site, fill up a
cylinder with empty gas, and bring the cylinder back, sign back in that equipment. And then
periodically we will come through as Recoolit for now and pick up those full cylinders, leave
empty ones for the franchise, take those full cylinders to our warehouse, consolidate them into
the bigger tanks. And then eventually batch that gas up for destruction and send it to our
destruction facility.

James McWalter: And so from my understanding CO2 is, with the most of CO2 in the
atmosphere that’s having a large climate effect. But other gases like methane can have

6
multiple, 70, 80 times the effect of CO2 for the equivalent amount of gas in terms of its climate
change effect. How much more damaging are these refrigerated gases?

Louis Potok: Yeah. So, these gases are anywhere from 1300 to 2000 to up to 10,000 for the
older gases, times worse than CO2. And so from carbon offset or carbon accounting perspective
that gives you a huge amount of leeway. I think I once calculated that we could drive one
kilogram at a time – 30 miles and it would still be under five percent of the total emissions.

James McWalter: So that’s the kind of impact. What is the destruction process like?

Louis Potok: Yeah. So destruction, you’re basically burning it up at a high temperature. And you
sort of lower floor of where you want to be is a thousand degrees Celsius and that can go up to
a million degrees Celsius for some of the plasma arc incinerators that are in use around the
world. What’s really cool about, you know, what’s interesting about this? Is that you can do this
in a wide variety of different places. It doesn’t have really stringent technical requirements, and
it just has to be hot enough and negative pressure. So the gas doesn’t escape before it’s burned
up. And the gas has to sit in at that temperature for a certain time. So, one thing, one neat
thing you can do is you can repurpose a cement kiln and you can pump that gas actually into
the cement oven while the cement is baking; they operate at negative pressure anyway. You
don’t need any extra energy because the process… the cement baking is already so energy
efficient. So, the carbon impact of destroying it, it is actually negligible. And the offset
methodologies tell you that they just say like don’t even worry about the energy that’s being
used there because compared to baking, hundreds and hundreds of tons of cement, you’re not
really changing the requirements…

James McWalter: So then I guess in terms of trying to find a ready supply of these refrigerants
that need to be destroyed from a climate point of view. Are we talking office buildings,
hospitals, residential complexes, things like that…?

Louis Potok: Yeah. We’re still early and we’ve put out feelers in all those segments and we’ve
basically seen success in all of them. So, we have freelance technicians that are going to a home
and dealing with a single mini split unit at a time. We also have the chiller for a hotel. We have
the installation of hundreds of devices and a shopping mall complex. We’ve really dealt up and

7
down that spectrum. The question of what’s going to be most efficient for us as we move
forward from a unit economic perspective and tech perspective is to be determined. But, so far
they all look promising.

James McWalter: And so are those installers thinking about this as purely this is like another
revenue line for their business, are they thinking oh actually I do have to destroy this anyways
and this is just a part of my op-ex or they’re also thinking about the climate impact.

Louis Potok: For our partners it’s a mix depending on what segment you’re dealing with. So, the
building owners, especially for things like hotels, shopping malls, office buildings do care about
the sustainability. And we are giving sort of proof of sustainable disposal to the building
owners. For the freelance technicians it really is mostly about the money. Even if they care
about the environment and many do. That alone is not nearly motivating enough to go through
this extra hassle and acquire equipment they don’t have. For the professional H-VAC firms, it’s
somewhere in the middle. They like to be able to tell their clients, who are the building owners
that they’re doing the sustainable thing but they also appreciate the funding that we provide.

James McWalter: So that’s the supply side but on the demand side, I guess, who are the type of
folks who are interested in these types of carbon credits…?

Louis Potok: Yeah. So, carbon credit’s immensely complex. We could spend several hours
digging into that. We are not at this time dealing with compliance market offsets; we’re dealing
only with voluntary markets. And individuals will sometimes buy offsets on the voluntary
market, we’re not really targeting those as buyers, mostly it’s corporations that have made
some kind of carbon neutral or net zero commitment. Historically what they’re looking for is
just stack up as many offsets as they can, regardless of quality. And that’s been a lot of the
criticism of the offset market in the past. Thankfully we’re seeing some early adopters, more
sophisticated companies, especially from the software sector focus really intensely on quality
and be willing to pay more for it. So, we are kind of riding that wave because we believe that
our offsets are as high quality as anything else on the market.

James McWalter: I guess what does quality mean in the context of carbon offsets?

8
Louis Potok: Yeah. The key question with carbon offsets is… something called additionality
which is what would have happened in the counterfactual, what happens if you don’t buy my
offset. And so for some categories it’s a little unclear, right? If you, for a lot of avoided
deforestation offsets, a landowner will say hey, I have this patch of forest; I want to cut it down,
if you buy my offsets I won’t cut it down. And it’s kind of impossible to prove what they would
have done otherwise. So that’s where a lot of the more questionable offsets come from. For us,
it’s very clear. Every AC technician in Indonesia vents refrigerant every day, there’s no facility in
the country that is actively collecting or destroying them. 100 percent, if you don’t buy our
offsets that gas is going into the atmosphere, where it’s going to sit and increase the radiative
forcing of the stratosphere. And with a lot of the new carbon removal stuff, you have a similar
story around additionality. We’re not going to turn on our direct air capture machine unless you
pay us. Fair enough. Another aspect of quality that the carbon removal stuff does not stack up
quite as well or where there’s a little bit more science risk is permanence. So, you suck carbon
out of the atmosphere, you collect a bunch of biomass and turn it into some carbon denser
material. Where are you going to put it? And how do you make sure that carbon doesn’t leak
out especially when you’re dealing with natural systems which are in some ways not as well
understood. For us we have very, very clear permanence because the gases get burned up, the
constituent parts get, you know, in some cases baked into the cement or are just not reactive
and they’re not going to recombine and get dealt with as normal waste would. So, no question
for us, 100 percent additionality, 100 percent permanence as good as anything else out there in
terms of quality.

James McWalter: I guess one of the things we’ve seen recently is that, you know, focus on
quality. There’s been a lot of… different types of offsets purchased and things that are more
nature based. Like a forest, there were some high profile cases of forest burning down and so
on. And we absolutely still need those forests to exist and the carbon credits from thoseforests.
I think are still incredibly valuable and important. But it does show that permanence is a bit of
an issue, especially if we’re trying to sequester carbon or prevent these carbon emissions in a
multi-decade kind of time horizon.

Louis Potok: Right, exactly. And I think it’s really an attitude shift from how cheaply can we
offset all of our emissions to how do we make sure we’re getting the best offsets possible and
then what’s the cheapest way we can do that. And I’m really inspired by some of the work
that’s happened. Especially at Stripe, Shopify, Microsoft, to just name a few. To really, really
focus on quality and go above and beyond and publish everything they’re doing and all their
other proposals they receive and things like that.

9

James McWalter: Would you say the larger problem is the demand or supply side?

Louis Potok: I think it’s definitely supply constrained. I think there are a lot of companies that
would be happy to jump on board with high quality offsets, if they didn’t have to pay 600
dollars a ton to do it. And so we are hoping to… We’re hoping to help solve that problem. We
don’t charge 600 dollar a ton.

James McWalter: And so to give an audience a better sense. So, typically lower permanent —
lower quality offsets are sub 10 dollars a ton. Whereas at the very, very highest end, director
capture offsets are often 600 to up to a thousand dollars plus a ton. So, I guess, you know,
what’s the kind of range you’re aiming for at Recoolit?

Louis Potok: Yeah. Right now we’re in the 50 to 100 dollar range. I think we could go below that
at scale as we prove out everything we’re doing. But it’s sort of a niche where there’s not really
a lot of other offset of that combination of price and quality. So, hopefully our quality conscious
buyers will continue buying.

James McWalter: So what is the competitive landscape like for this? Has anyone else gone into
project drawdown dinosaurs and said okay, Recoolit is what I’m going to focus on.

Louis Potok: Yeah, I definitely. It’s easy to tell the founding story in a way that makes it seem
like I’m a massive trailblazer on the scene. I didn’t invent any of this technology that, you know,
this is in some ways well-trod ground. I remember when I was just starting out, someone I was
trying to network with, sent me an email saying like, just so, you know, this is well trod ground,
advise you against it. But he was looking at a very small piece of the landscape, which was well
trod ground which we’re not doing, which is CFC collection in the US. So, as all those old
generation of gases were being phased out, there was sort of a wave of people going around,
looking for warehouses full of it, and selling offsets. And that’s great, I’m glad it happened.
There are companies that are still doing that, still finding warehouses full of CFCs. In the US,
sometimes around the world, there are some very charismatic projects. In some cases they get
some good press and we’re happy that’s happening. But in terms of the continuous flow of

10
emissions from new devices, targeted at the geographies where we’re looking, really there’s
not much else happening.

James McWalter: And then, because actually I remember there was some podcasts, actually
about a fellow who drives around in the US and picks up and refrigerants. But he doesn’t say
what it’s for because there was like a, you know, he’s picking it up from people who typically
might not be as familiar or appreciative of climate change as a reason from a political point of
view. And so he was like pretending that he was picking up for some other reasons.

Louis Potok: That’s right. That’s right. And I mean there’s no reason to be so secretive. The
company is Tradewater, based out of Chicago, they do a lot of work in the US, they’re great, big
supporters of them, we’re playing in different spaces in some ways. Yeah. So, they definitely
have this, this angle where they’re pretending that they’re not a climate company because the
AC technicians of Southern Illinois do not want to be getting into bed with a climate company.
We don’t have that problem. I mean Jakarta is sinking, Jakarta is flooding, and climate change is
a big topic in Southeast Asia. Our users are really happy to be supporting our mission and happy
that they have a way to get involved. Interestingly the government has sort of put,
governments around the world funded by the UN, have put out kind of training modules on
refrigerant collection and sort of not thought through the next steps of how you actually
incentivize and put the infrastructure in place to make sure that something happens to that
refrigerant where it’s collected. So, in some cases people have showed up to trainings, here’s
how you collect refrigerants, gotten excited about it and then realized that they’re kind of on
their own after that. So, we actually take the next steps and sort of implement the programs
that the UN doesn’t have the capacity or the interest in doing in some ways.

James McWalter: And have you found, I guess then within Indonesia generally, are there policy
elements you have to navigate, are there local governmental regulations you have to navigate
that are somewhat different to maybe what you were used to in previous jurisdictions.

Louis Potok: Yeah. So, I’ve worked in some regulated industries before. So, it’s not my first time
here but regulatory culture in every country is pretty different. I would say that the main kind
of regulatory issues we’ve dealt with are that refrigerants are classed in Indonesia as hazardous
waste. Once they’ve come out of the device which on the face of it does not make a lot of sense
because it’s actually the same gas that was going into the device. So, anyone can go to the store

11
and buy some refrigerant, anyone can put it on the back of their motorbike and drive it home
and fill it up themselves. But once you take it out and you have the same gas in the same
cylinder, you actually can’t, you really aren’t supposed to drive it around because it’s now
classified as a hazardous waste because it’s bad for the environment. So, there are some issues
we’ve been working with the regulators there and we’ve gotten some little sandbox to play in
where they want to see what happens with our pilots which has been really great, removed a
lot of uncertainty for us. But, yeah, that’s been the big one on the regulatory side. There’s also
coming down the line a big question for the world of how carbon offsets will be able to be
treated across borders. The UN has a very, very long way to go to figure out that problem but
that will be kind of another interesting regulation to keep an eye on.

James McWalter: Yeah. Another aspect was… so you’ve also just moved, you know. I believe
you now spent a year living in Jakarta. And so, you don’t, I tend not to hear about a lot of kind
of startups based in Jakarta coming out and we do actually have a fair number of founders who
are working in non-US countries, I do often ask what is the kind of difference in terms of
building a company there versus building a company in the United States. But in this case you
weren’t already living there, you actually moved there to start a company in a very specific way.
What has that experience been like?

Louis Potok: Yeah, it’s really interesting. I don’t have a lot of comparisons of other companies
that have been started in quite the same way. So, we are established legally in the US and then
I moved to Indonesia to set up our operations. There our ambitions are to be a global company
with users in Indonesia, Thailand, Vietnam, Nigeria, India, you know… Any hot emerging
markets you can name basically, but with a distinct headquarters in the US. So, thinking from
the start about how to do that is really a challenge because of course this isn’t just quote
emerging markets, each of these countries has its own very distinct business culture, its own
very distinct sort of facts on the ground that need to be dealt with. Not to mention the
coordination challenges of doing the same thing in multiple places. So, from the start being
really clear about what our company culture is going to be and how it might be different from
normal business culture in the places we’re working, has been important. And I’ve probably,
James and I’ve had some conversations about how maybe I’ve underemphasized that relative
to how much I should, but it’s definitely something I’m keeping an eye on. Yeah, I mean, I think I
spent six years working at tech startups in San Francisco and it always felt really natural to me.
The culture there; really high openness, willingness to disagree, willingness to… hash out
disagreements in public and then everybody just goes with the thing that the person who had
the best idea. And as I’ve been working in other countries, I’ve come to appreciate a little more

12
how rare that is and how hard you might have to work to instantiate that culture which I value
really highly as you are hiring people who don’t have a background in those same kinds of
companies and cultures.

James McWalter: And I guess there’s like two levers you can pull with that, right? So, the first
lever is around the people you actually hire. So, people who tend to have that mindset or as
close to that mindset kind of going in. And the second is like while in the company, as the
company’s developing, you are making sure that there’s alignment on that kind of cultural
piece. I guess I’ve heard the way between the two, right? How do you think about that weight
between those two ways of coming? You know, building a company culture over time, not just
within Indonesia but I guess anywhere.

Louis Potok: Yeah. I think early on it becomes more important to hire people who are already
aligned with that culture that you want to have. Because one you have sort of fewer peers to
influence someone into the culture that you want to build, it’s already, it’s less nascent, there’s
more new process or new kind of habits that you need to develop. Whereas later on once you
have things more established, people can learn the culture and grow into it, if that’s not
something that they share. I will say one more point on culture, that’s been interesting for me is
that of course we are dealing with local partners in Indonesia who, of course, we’re not going to
change the entire AC industry to operate like a silicon valley startup. So, we have a sort of an
impedance mismatch at our company border between how we want to operate and how our
partners are used to operating. And sometimes it’s actually beneficial for us to bring that
border a little bit internal, hire people who are a little bit more comfortable with that normal
way of doing business and accept that friction internally, so that we have something smoother
with our external partners. And so that’s another trade-off that has to be considered.

James McWalter: Yeah, that makes a ton of sense. I actually was playing around with a startup
idea in the past that was focused on US farmers. And I also come from farmer background. And
you have to speak the language to a certain extent, right? Even if you speak the same literal
language, you have to be able to speak to, you know, the hopes the fears and all those kind of
things of those people involved because if people feel that they’re being talked over or talked in
a way that isn’t like connecting with them directly and not just like one-on-one but like
company messaging, marketing, like all those elements. You can rapidly get into a situation
where there’s just like this kind of vague sense of distrust over your organization.

13
Louis Potok: Yeah, for sure. I mean in some ways developers selling to developers is the easiest
game in town because you really like understand your users. And you know what? You know
they value. And in some cases that doesn’t solve the problems, the problems that you care
about.

James McWalter: Absolutely. So, let’s go back a little bit to the carbon marketplace side of
things. And so, I feel a couple years ago when you were kind of just starting out there, just
really wasn’t any carbon, volatile carbon credits, infrastructure at all. And so now you start to
have companies have come along in the last couple years and they’re doing things like trying to
aggregate different levels of supply and demand and all that kind of thing. And it seems
because we’re so supply constrained. You’re seeing some providers of carbon credits, some
companies who are preventing carbon credits try to go their own way versus work with third-
party aggregators of some sort, right? So, you could have a marketplace where your credits are
posted alongside these other, maybe more or less permanent credits. And then they come from
that common pool, they’ll sell to the kind of corporates of the world versus having direct
relationships with the end corporates yourself. How do you think about that balance from like a
long-term business model and defensibility point of view?

Louis Potok: Yeah, it’s a great question. I would first just push back on your sense of the history
here. And I wasn’t involved in this history before 2019 but my understanding of it is that there
was actually a fairly robust carbon offset market in the years leading up to like 2008, 2009 in
the first clean deck bubble. And then sort of this long desert, this crash in the market and a long
desert, until maybe 2016, 2017 things started to pick back up again. And if you look at
transactions of the voluntary carbon market, it’s grown like 70 percent a year on average since
2017 but that’s from a low base compared to where it was 10 years before that. So, I would say,
I think we’re rediscovering a lot of the financialization and business relationships and brokers
that maybe existed 10 years ago. So, hopefully we’re not making all the same mistakes. We can
learn a little bit but we’re also doing some things better.

James McWalter: Sure.

Louis Potok: But then I think you really got to this fundamental tension in the carbon offset
market that is maybe just totally unresolvable which is that everybody wants one ton of carbon
to be the same as another ton of carbon, right? We want them to be commensurable. We want

14
to be able to say I didn’t, you know, I emitted this one ton and the ton that I can get from
Recoolit or from anybody else is the exact same thing. And, it’s kind of challenging to say that
because first of all people care about things like co-benefits. So, there are plenty of good
reasons to save rainforests besides the carbon that’s in them, right? Biodiversity, indigenous
land rights so on and so forth. So, there’s already kind of an issue there. There’s already a sense
from the corporate buyer side that what they want is… in some sense more like a story than a
rigorous accounting of tons and you see different approaches that playing out in the market.
So, there are some, you know, there are people who are like in commodities trading who now,
you’re selling a ton of nickel, you’re selling a ton of zinc, now you just move to the carbon
markets and you do exactly the same approach and it’s purely commodified. You also have
really sort of bespoke approaches where you sell to a specific buyer directly from the project,
you give them tons of information about what that project was and you hope that the buyer
values sort of that package over just the number of tons that you can provide and quality really
gets wrapped up in that second approach. So for us it’s really more about that second one. At
least until there’s a shift in the overall market, where quality is valued, where the things that we
do, and the digital audit trail that our software is capturing about this whole process that
proves beyond a shadow of a doubt how additional our offsets are. We want buyers that
appreciate that, that aren’t just letting it getting commodified away and put in a package with a
bunch of forestry offsets that don’t have any of those same evidences behind them.

James McWalter: And I guess we saw an extreme version of that with the rise and I guess nerdy
fall of Klima Dao and some of the other elements and you mentioned a digital traceability and
so on. Which a lot of people have basically translated that to mean a block chain and not a
postgres database with which you said you did a unique identifier column. So how do you think
about the big block chain push in carbon credits, specifically that’s something you guys want to
engage in or run away kind of like.

Louis Potok: Well, I have to say like I’m going to get called; not going to make it on twitter after
this exchange because I really do not think that there’s much of a value. I mean, I think the
block engine, block chain can solve some problems or improve some things in some ways but I
don’t think it’s touching the really fundamental questions. I was sort of skeptical of the web 3
climate stuff for a while and then I spent a week getting really deep in it trying to see if there
was something that I had missed. And I sort of concluded the benefits that people talk about
with block chain applied to carbon credits is democratizing access to carbon finance for the
masses. Like, basically normal people can make money trading derivatives on carbon offsets.
And if that’s what you care about, great, go ahead and do it. That is not something I care about.

15
That is not the problem I want to solve. In block chain world, they talk about the oracle problem
which is that anything that happens on block chain, on a block chain is traceable and verifiable.
But, if you care about some real-world activity, somebody has to put that real-world activity on
the block chain. And how do you do that in a way that makes sure that that real-world activity
happens and is the thing you wanted and that is the core problem of carbon offsets and that is
that problem remains whether you’re trading those carbon offsets in a postgres database or on
the block chain.

James McWalter: Yeah, we’re pretty aligned on that. I do go in my own little cycles of this
where I’ll be like I’m definitely missing something. And I will do a bit of a deep dive. And it’s less
connected to the startup I’m working on day-to-day right now, anyways. But I think that the
financialization, assetization piece is like the key piece. It’s like if you want to slice up some
asset in lots and lots of different ways and trade those or exchanges those in various ways. I
think block chain is quite interesting. And so, I can see if you were trying to create a, you know,
like a mortgage-backed security of carbon where you have different tranches of permanence
and all those kind of things, I think block chain is as good a way of doing that as anything else
but we definitely had MVS like a mortgage back securities, pre-block chain as well. So, like there
are still ways of doing that. But I think the other aspect of the kind of crypto block chain space
and carbon credits. Again, I guess embodied by what could happen with climate and for those
not familiar claim it out is a carbon credits exchange that one point was worth a billion dollars
and it’s lost about 98 percent of value since last August. So, in the last, let’s say seven or eight
months. A lot of that was because they had no supply that wasn’t of high enough quality and so
they had done this incredible job of capturing demand or some sort of demand through… nor
ordinary retail crypto currencies of various types but then we’re figuring out the supply side.
And so I think that aggregation of the demand side on the retail side. I think that is interesting
within the kind of crypto universe – web 3 world but, yeah, to your point the actual underlying
technology doesn’t really solve anything because at the end we do care about what happens in
the real world.

Louis Potok: Yeah. I mean, I can think of ways to apply block chain to climate to carbon offsets
that add a little bit of value. I mean if you think of, you know, going on your mortgage backed
securities analogy, right? If you think about a more structured role for rating agencies to play
and reputation and people being able to buy… yeah, these sort of portfolio of different quality
offsets. Well, in an explicit and legible way. Like, great, that’s fine. But that’s I don’t see that
work happening. And to me that’s fundamentally less important than creating the quality

16
offsets in the first place because it is a supply constrained market. So that’s where I sort of have
landed on that.

James McWalter: And I guess, what’s the next year to two years for Recoolit look like?

Louis Potok: Yeah, so we’ve, you know, where we’ve come so far is we kind of checked off
every box. Once we’ve signed up a bunch of users, we’ve collected a bunch of refrigerant, we’ve
destroyed our first batch or it’s actually scheduled for destruction next week.

James McWalter: Congrats! I know that was a long time coming.

Louis Potok: We can get into that another time… another few hour session. And we’ve sold a
small number of offsets from that first batch as a pre-sale. So, the next year or two are really
about scaling that out within Indonesia. The island of java is a third the size of California and has
four times the population. So, we have a lot of air conditioners to handle, just without going too
far from our office in Jakarta. And hopefully within about 18 months we will be ready to start
looking at that next wave of countries and doing in a way that doesn’t involve me waiting for a
visa for five months but hopefully a little bit more of a scalable approach that uses the software
that we’ve built for Indonesia as a sort of beachhead. And to support all that growth within
Indonesia over the next 18 months, we’re actually fundraising right now.

James McWalter: Very exciting! And I guess because it’s somewhat isolating, I’ve tried to solo
phone for best. You’ve been kind of solo founding now. And again a country where you don’t
have the kind of local language, not only local language but bahasa is just one of like a thousand
languages that you have in java and so on. What have you done to…? I guess stay connected to
startup community other entrepreneurs that kind of thing.

Louis Potok: Yeah. Definitely the most helpful thing has been I have two different kinds of small
group sessions with other climate tech founders obviously. Thank you for the leading question,
James, as one of my comrades in one of those.

17
James McWalter: Yeah, Louis and I know through a climate founder mastermind that we meet
with once a month.

Louis Potok: That’s right. So, yeah, it’s like a great combination of strategic advice coaching
therapy. And I have one for my kind of US climate tech focus and one of Southeast Asia
founders and so that’s been really, really helpful. It’s hard to imagine having really gone
anywhere without those. But a lot of it is just seeking out people who can provide advice. And
you find these people who you look at their LinkedIn and they just seem like anybody else in
the world and then you get on a call with them for some really tactical reason and they are like
fully present, really helpful, give you the emotional support that maybe you need in that
moment. With the sort of emotional aspect I definitely like underrated going into it and has
been a huge component of what it takes to even have come this far.

James McWalter: Yeah. And I think one of the bits that I took from what you just said there is, if
you show some vulnerability, like people are very open to also showing their vulnerability and
you have that kind of shared connection with people. Like, we’re very much in a world where
everybody is, you know, hash tag killing it. But, I think there’s definitely more and more of a…
there are more forums for people to be open about, not just the hard bits but the victories, like
all the little bits. Like, I’m not just saying it’s all a drag because it’s not. Like, there are fantastic
moments every day as well but being kind of that open vulnerability. And more people are
connecting that to just kind of a more positive, some general kind of attitude. And people are
very connected and I think in general the climate is founder space or just kind of… not just
founders but climate startup space in general is incredibly open to helping each other in ways
that is pretty unique to it right now.

Louis Potok: Yeah. I’ve been blown away dozens of times by the immense like generosity and
kindness of people that I’ve only just met, in some of these relationships now stretching out for
years. So, if you are already doing that, great. If you need that in your life, go find it, it’s out
there. It’s a wonderful thing.

James McWalter: Absolutely. Well, Louis, I’ve really enjoyed the conversation. Before we finish,
is there anything I should have asked you about but did not.

18
Louis Potok: Yeah, so right. So, you should have asked me what do I need from your listeners,
how can your listeners support our journey to empower sustainable Recoolit.

James McWalter: Yes.

Louis Potok: There are two ways. One is that we are fundraising now. So, if you are in the
climate tech investing scene, would love to talk to any of you, my email is probably in the show
notes but if it’s not, you can search me on Louis, yeah, great. And the second is that we are
starting to get more serious about selling offsets from that first batch of destruction that I
mentioned. So, if you work at a company that is trying to achieve carbon neutral or net zero
claims and you want some super high quality offsets with a really interesting story and a bunch
of photos of AC technicians in the field on a rooftop in Jakarta, you can also hit me up for that.
And I would love to talk to you about how we can help you.

James McWalter: Absolutely. And we’ll add all that to the show notes. Thank you very much.
Thank you for listening, if you enjoyed the podcast, please rate and review us on apple podcast
or the Google play store. I cannot express how appreciated it is and we’ll be back next week
with another episode.

Sustainable Waste Streams – E91

Great to chat with Joost Kamermans Co-Founder at Seenons, a platform that connects waste chains to new use cases as part of the circular economy! We discussed the ups and downs of startup life, balancing supply and demand within a circular economy, waste policy and incentives, differences between startup cultures and more!

https://carbotnic.com/seenons

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 you’ speaking with Joost Kamermans Co -founder at Seenons, welcome to podcast Joost brilliant to start? could you tell us a little bit about Seenons. Yeah.

Joost Kamermans

Thank you Very much happy to be here. Yes, of course and so senance is a software company that’s helping other companies to reduce their waste and and we do that by yeah, helping them monitor their waste helping them engage with the whole network Of. Ah, different logistical companies and waste processors and and ultimately we also help them with procurements to really lower their yeah their waste.

James McWalter

That very good and what drove the initial decision to start cnons.

Joost Kamermans

Um, very good point and so we started about two and a half years ago yourre and I were working at an office. It was a go working space and where yet we were and got by the amount of. Ah, waste trucks that would pass through a street on a single day. It’s it’s based in Amsterdam and it just made no sense to us that we saw all these garbage trucks passing by all the time and at the end of the day our our own garbage container was always filled. They intrigued us. It was like why is this happening. It makes no sense and and that’s when we started looking into this whole waste problem and and found that there’s way more wrong to it than just these trucks right? that there’s and huge garbage belts that we are creating all over the world. it’s in the ocean ah it’s it’s literally everywhere and and that there’s yeah big competition between waste management companies that all sent their own trucks to collect waste because they want to have that as their their input for their machines mostly incineration plants at the time and and still today. And and that therefore it could happen that if I have a brand of of waste management company and my neighbor has a different one and yeah that we have multiple trucks going through the street on a single day and this is the case in most places at least in the Netherlands. Um, yeah.

James McWalter

And.

Joost Kamermans

This could definitely be from an ecological perspective. This obviously makes no sense but also from an economical perspective. 

James McWalter

No absolutely and and I guess in terms of your relationship with your cofounder your and were you already kind of thinking about starting something was this like an idea as you’re trying to ideate or was it. Oh you already had an existing relationship and you both kind of were like oh this is the thing we both want to work on next right.

Joost Kamermans

Um, yeah, so I guess we both had a separate journey. There. So for me I had a started before in the Us. Um, this was a throughout my studies there and we had a. Course that was called healthcare entrepreneurship and we had to yeah the name already says it we had to start a company and there I really learned on how to not do it so we we somehow got funding. Um. With an idea which is in the us way more common than it is here in the Netherlands and we see we built the product for the Netherlands out of the us to then find out that in the Netherlands. The the system was so different that there was no market for it. So we built something and we were really proud of it. Was really pretty really advanced. But there was no demand so why did we do that and then I started working at the Boston Consulting group to then learn. Okay, how do these markets work. How how does it even work and how do you really research an industry in a very brief amount of time. Um. And after that I decided to give it another go and and especially throughout my work at Bcg I was exposed to some projects in big energy company turnarounds there I found how difficult that is if you have a very big company and turning it around. Especially if you’re you’re sitting on a lot of assets that make the turnaround difficult so to give you an example if you are a big oil company and and you’re trying to become. Ah yeah, green and and rely only on green energy. You still have one hundred billion on your balance sheet of oil fields.

Joost Kamermans

How are you going to do that. Well you don’t because economically it makes no sense and we saw the same happening for for the waste industry. There’s a lot of companies that that have invested in assets such as garbage trucks such as incineration plants other other type of um of yeah processing facilities. And if then the the tides change and then you still have these assets so it’s really difficult for you to move with that and that’s when I realized okay this cannot be changed from within so it has to be done from outside then I met yourn and Jon had already something like 40 starteds. He was very good at. Um, at platforms especially matching. He’s also done that in for dating sites so in a way that’s also matching and so with my sorry. Oh yeah, yeah, finding a good fit is probably more difficult indeed and then with all the.

James McWalter

Even more difficult, even more difficult than waste matching.

Joost Kamermans

And yeah, with his knowledge about ah platforms and the technology side and my strategic and commercial side. We figured. Okay, let’s ah, let’s give this a go together.

James McWalter

Fantastic. And so then you know you have this kind of nugget of an idea around waste. The inefficiencies associated with it. What was the kind of early efforts at you know, an Mvp you know first what that first kind of version of the product looked like and then also were there any kind of pivots along the way. So.

Joost Kamermans

Um, yes, and yes, no absolutely And so when we first started out. Um we had to do everything by experiment as I said I learned from my last endeavor where we built an entire product to then test if there was a market for it. This time we really did it the other way around. So We asked a lot of customers what they wanted So We really did a yeah customer research very and yeah, very much with boots on the ground so we really went shop by shop asking them how they would deal with their waste. But not only to customers. We also went to waste companies and we went to processors and we went to the whole ecosystem to understand why this problem is is the problem and what could be a potential solution and eventually we had an hypothesis on what people would want so we built a website and we said this is what we’re going to do are you in. And to our own surprise We. We actually had a lot of Sign-ups really quickly and then we called these companies we’re like this what we’re building but we don’t have this yet if we actually built this do you then would you become a customer and they would all say yes of course I would and that’s when we knew. Okay.

James McWalter

Right.

Joost Kamermans

Now we have to build this and that’s when we sat down and started really yeah, developing an Mvp which initially yeah, really didn’t mean much because it’s just transporting waste from a to b and over time that he had to e evolve into an an app that would work for you as a.

James McWalter

What I love about that story is you know you mentioned this early startup that you worked on a few years ago where you made something that you’re very proud of and very very beautiful, but there was no users or is this time around you did classic lean startup where you’re like oh it’s just a landing page with some signups. Don’t build anything on the backend and then you just go to the other side of the market.

Joost Kamermans

Um, as a business.

James McWalter

Place and say hey we have signups. Do you want it and you are kind of testing response directly without spending a ton of time you know making a beautiful widget and so on and I think this is something I’ve also you know, learned over the years when I tried to build something for a very beautiful actually also in a marketplace situation and then. You know wasting a lot of time and then later it’s like oh I’m not building anything unless a customer is basically forcing me to to build it and it’s just it could be kind of changed the trajectory of those early days of the company.

Joost Kamermans

It does it does’ and I I think that’s also very important to tell starting entrepreneurs like what what we tell each other a lot is that and there’s somebody in a garage who one day wakes up under the shower with a great idea. Sits down in the garage build something and it’s it’s happily scaling ever after and that’s not true. That’s what they always say put in newspapers. That’s never how it went and I know for example, this is a story that goes about Amazon no.

James McWalter

It. It’s never been true. No.

Joost Kamermans

Very often. It does not state that he was already a millionaire working at Goldman Sachs before and then renting a garage to start this company so and very often that’s something that people don’t don’t hear and I think entrepreneurship is definitely something that’s in you. Being opportunistic and also seeing opportunities. But there’s also tricks to it that just apply and that you can learn and that these are definitely best practices that can prevent a lot of headaches and and also financial hardship because if you invest all your own money into building your product before knowing. That anybody’s interested that can really cause big problems.

James McWalter

Yeah, yeah I mean one one kind of emotion I think is something that is under talked about especially those stages of the entrepreneurship journey is embarrassment. It’s like you have to be really comfortable. Be em parissed to buy poor versions of the product poor versions of your pitch you know and venture here talking to investors. Ah, you know it’s not easy, but you have to like continuously put it out there and as long as you’re refining it along the way you know getting comfortable with that level of of embarrassment or you know I’m not.. It’s not great because in by definition. Whatever you’re going to build is bad to start like that’s just the nature of it and I think that’s the bit that that’s the kind of dirty secret that people don’t talk enough about just like be.

Joost Kamermans

Um, yeah.

James McWalter

Like like lean into embarrassment in order to kind of get through those early days and I guess you know as you’re kind of going through that you know that Mvp P iteration kind of process. Ah you you mentioned this kind of you know you you kind of have these 3 set sides sort of market in essence right? So you have the.

Joost Kamermans

I Couldn’t agree more? No absolutely.

James McWalter

Producer of the waste right? consumers or there might be also kind of enterprises and so on Absolutely and then you have ah the the kind of waste you know processors of various types I’d love to get into both of those sites in a moment but you also have the people transporting the waste.

Joost Kamermans

Um, businesses. Yeah.

Joost Kamermans

Um, again.

James McWalter

How do you kind of engage those people. Um because I believe that’s nearly like a third side to the marketplace and.

Joost Kamermans

Yeah, and I think that that also brings that extra. Um, yeah dimension and difficulty to the business because you have to do quite a lot in order to help a customer I think that was one of the main challenges we faced like if you are going to serve a a business with. With their waste and you’re gonna help them with it. You have to do the whole circle before you truly add value and typically as a startup you want to do as little as possible really well and because that’s just way more manageable. But for us that was super super difficult because if you’re gonna be my customer you expect me to take care of all of your waste because. Otherwise why am help am I helping you so that means I need both logistical solutions and processing solutions for all your waste and yeah that that made it difficult.

James McWalter

Right.

James McWalter

Yeah, and so how how did you again in those kind of early days Initially you know did you ever consider doing the delivery yourself or ah, you know because I guess one of the kind of principles is like you have this excess cap capacityities so already existing on some of these you know transportation and and waste companies and how do you kind of? ah.

Joost Kamermans

Um, yeah.

James McWalter

Identify where there are places that you could actually kind of redirect some that waste and so what was that kind of process like and.

Joost Kamermans

Yeah, so I think that was fairly simple for us. So as we did all that that market research in the beginning we found that there’s a huge access capacity capacity specifically in processing there in the Netherlands we are importing waste because we don’t produce enough. Can you imagine so that.

James McWalter

Wild.

Joost Kamermans

Definitely a big problem so that also made it really clear from the start we are not going to build processing capacity because if we do that we become the problem you always start out with the best intentions when we first created incineration plans and it was a big upgrade from a dumpster.

James McWalter

I but.

Joost Kamermans

So the idea of building that was very was ingenious, right? Why would you not get electricity from waste now we know that we’re running out of these precious materials that we are therefore creating additional c o two at a time when this all started. This wasn’t the problem at that time so it would be naive to think that whatever you build today. That that’s not going to be the problem in the future if we in the future decide that we have to consume less for example, even if you build a plastic processing facility and it could be a problem and maybe in the future plastic is just wrong. Material. There’s a new super material. That’s then the the best solution. We as a platform want to be agnostic. We we want to have no vested interest in the way of processing so we always want to be able to switch and and in terms of um, yeah transportation I think you were spot on we if we were to do that with their own vehicles and the point is that theyre. Is way. There’s in literally every place in the world. There’s enough logistics capacity because everything that comes into the city that we consume has to come into the city somehow by transportation that means that by definition. There’s also capacity for this to go back. We simply don’t do it because we don’t want to because it’s and It’s financially it’s more interesting to drop off packages than to pick up packages and so that’s why we don’t do it but everything that enters the city either leaves the city through a garbage truck or it leaves the city through the seeward because some of the food we can chew. And yeah, it’s going to go out of course and so there’s. There should be enough capacity and it’s always most efficient if we do more with reverse statistics so we were like why would we then introduce additional vehicles. It makes no sense.

James McWalter

and and I guess then if I was a consumer or a business wanting to cut onboard onto sceneons. What’s that experience like today.

Joost Kamermans

Yeah, also you um so how it starts is you? yeah you you get our app and with the app you tell us this is the waste I have please come pick it up and we can pick up your waste with the best form of logistics. If you’re in an inner city of Amsterdam that could be a cargo bike. It can be a boat. It can be many ways and if you are more in an industrial area typically it is a garbage truck it very much depends on the size. The quantity, the volume what we would send and then we match your waste with whoever can best upcycle it.

Joost Kamermans

So that it’s being processed over there and then ideally you buy that product back. That’s made of it. Typically these chains are very complex very much dependent on the Stream. So There are streams that are very that speak to the mind such as orange beals that you pick them up with a gargo bike. You can turn them into Orcello which is a drink which then gets back sent back to the restaurant where the orange peels came from and they sell these to their customers and you have the full circle with so other streams is is way more complex and but this is what it’s looked like and then all the waste that’s left. So the residual waste that we don’t want to that We can’t do anything With. We’re going to help you get rid of that because that’s our Mission. We want to get to a world without waste meaning no more residual waste because that’s really stuff that we burn. Ah, if there’s cardboard going back and forth. There’s no problem with that. If. There’s glass jars going back and Forth. That’s fine as long as we can reuse it at least.

James McWalter

And I guess the one of the kind of major difficulties with anything to do with waste is the sorting component right? So obviously it’s be perfect if the restaurant put all their orange peels in 1 specific container and then you have this beautiful back and forth as you mentioned? Um, but how do you kind of think about that.

Joost Kamermans

Um, yeah, yeah.

James McWalter

The the kind of work to be done around sorting should that lie at the producer of the waste should that lie you know more upstream into the the waste facility. Is it a mix. How do you think about that.

Joost Kamermans

Um, I think the last the last thing you said it should be a mix so the way we look at that is ah ideally you would have some magic machine that would sort everything afterwards because then that’s the least amount of effort for everybody. So why wouldn’t we do that. Definition. That’s never going to work because organic streams they go bad if you have cardboard that goes wet. It’s not the same anymore and so you can’t do that if you then say? Okay, so if we can’t do that then we have to separate everything perfectly. If you tell people you have a hundred bins that they have to put stuff in ah, people are not gonna do it and even if they’re willing to They’re not gonna understand it because it’s way too complex so we’re gonna have a mix and that means that most likely and what you’re gonna have is.

Joost Kamermans

Cardboard class these type of things you always separate most businesses have those then depending on the type of business that you are you might separate something different. So let’s say you’re in the in the netherlandss a restaurant. It’s called the avocado show you have a lot of avocado pits. Ah, for you. It could make sense to do something with those but an average restaurant is not going to separate those because you don’t have enough of those and so very much looking at these streams. What really is worth the effort and and then you’re going to have some categories. So what we see in the Netherlands we call it Pmd which. Basically it’s packaging of food and this is a separate stream that is fairly simple. It’s fairly. It’s still difficult. But it’s it’s doable to separate it afterwards and and there’s also aluminium cans be tea bottles in there. Um, so these are the ones that that the machine can detect. Um, and if we can get it to a level that all the stuff that’s really valuable that you separate those yourselves and that cannot be mixed and the stuff that we can separate afterwards they can all go into one bag and then we sort it afterwards to still get the the value out then we get you to share your waste and that that mix. That’s what we’re trying to work towards. And that will both come from innovation at the at the the back end. So really being able to separate afterwards. We’re not there yet, but it looks promising and also yeah, educating people to do at the front having financial incentives and all like yeah like change in behavior and. And then with all these measures together. We think we can do it and we’ve seen businesses. Do it.

James McWalter

That That’s so interesting. It. It kind of brings to mind whether this is is there I guess more of a pull on the demand side or supply side right? So if a particular you know avocado based restaurant have a ton of avocado pits is that then oh which kind of waste producers are sorry waste Processors. And even you know Upstream consumers of something like an avocado pit is interested in this and then you kind of go seek out those or is it more the other side where you’re actually saying yeah the the waste you know converters the waste managers they’re saying oh we really need some more orange peels. Can you go find some orange peels out there. You know from a supply point of view.

Joost Kamermans

Um, yet are.

Joost Kamermans

Yeah, well what I always say is every waste stream and there’s hundreds has its own unit economics and it’s and it’s its own market and it goes up and down. It’s just like the ah gold or silver or anything else. So.

James McWalter

Or is it a kind of balance between the two and.

Joost Kamermans

There was a time when you would receive a lot of money for cardboard. So then people would go buy the doors little kids asking for your cardboard. Do you still have some old newspapers because it’s something. It’s worth something right? and then over time that price that’s reduced so it became actually expensive again. There was little demand. Then the pandemic hit ah and the the demand went through the roof and the supply really killed so now today and if I have like high quality cardboard or paper people really want it. So it’s very much a pool market will that still be the case next year I don’t know right? It’s always going to go up and down. But long term we expect pool always to increase because every material is decreasing typically at least the supply of it and if you then look at these are fairly old streams if you look at a new stream. So. It’s avocado bit nobody nobody ever did something with that. Ah, before that nobody wanted it right? Why would you want it then now there’s some people who said oh I’d like to have it to um, get to ininerate it. Why not? Then when there were some people who would like to um, um. Yeah, to extract the the gas out of it like for history I forgot the word in english and which is which is less bad than burning it and then there were some people who were like oh I could use it to make paint and mo if they this worked for them and if they actually set up a factory. Goingnna need a lot of avocado bits. So then that the whole economy flips around and we see this happening with all sorts of streams like we believe that in the future more and more things that are wasteted today that we just throw away that we don’t care about in the future people are like I want that stuff. We saw it with old phones but you get to throw it away and nobody won an old phone now we discovered that there’s more gold than the average ah trash pal than there is in a gold mine a per square meter of course. Ah so why are we not taking that goal out of these machines again. Why are we trashing it so all of a sudden There’s a whole market for used devices because there’s so much precious materials in it and we expect over time that every material becomes valuable both because of taxes and because of shortages.

James McWalter

So interesting. You know when I think about your business and when we’re researching sceneons it was like okay, the logistical you know backbone is like the core of this business. It’s like so absolutely important. But as you’re talking there. It makes me think of you know, trying to figure out the hundreds of waste streams. And the unit economics of each and the supply and demand balancing and all those kind of things to try to like you know, just grab efficiencies to make more and more parts of the economy circular. It’s like it’s ah very much a data play right? like you need to be able to understand these things to a degree and to a you know in a database that is updated on a very very high frequency. You know as we’re seeing with the the kind of struggles around supply chains right? now you know raw materials like are through the roof and so things that might make sense for the next like eighteen months might not not make sense from a certain type of waste collection after that and so I guess how do you think about that data component and you know are you. I guess how do you kind of track that how do you build out that kind of competence within the company itself and.

Joost Kamermans

Yeah I think it’s key at the end of the day we are a tech company where we’re a data company and we see that in the future in the netherlands at least and I think in all of europe and circularity is is key for 2050 the European Union has made that. Ah. Ambition that the full economy is circular and the only way to achieve that is if you have a very clear understanding of where all the materials flow and and because we have customers on the 1 hand who submit their waste streams we have logistical companies that are plugged into our system that drive on our app. And we have processors that that use our app to ah to forecast input and ah and quality and that type of stuff we know exactly and where what type of material type of quality. What type of quantity and where it’s flowing and where it’s going and that we can actually optimize for this. And and we can incredibly improve efficiency. So why would you bring if there is a cardboard plant in the south of the country and there’s one in Germany why would it go to Germany we so often see that there’s incineration plants in the Netherlands where. Stuff from the very south goes to Amsterdam and stuff from amsterdam goes goes elsewhere. It makes no sense but because they don’t communicate and they both need their input. They source it both ah without talking to each other having the full overview. The pie is simply smaller and. But if everybody would be able to see where what material is free in what quantity and what quality we could optimize for this and this would make the whole economy flow much better and would make the country much less dependent on um and and the continent much less dependent on. Um. Importing raw materials and we now see how important that is.

James McWalter

Yeah, absolutely and I guess only think about all some of those kind of other macro elements right? So course you know we’re we’re trying to kind of increase the amount of transparency you know reduce the amount of opaque relationships so that we can see where these inefficiencies are and improve on them. Um. And you also as we talked about like have those kind of hit by supply chain pressures and costs and so on in generally a positive way I think for your business One of the things that I wonder is maybe a a bit of a headwind is Covid itself. So I’ve talked to a few companies who had waste management going into Covid and as people became very much. Adapted to single-use you know types of plastics and all this kind of thing. Um it you know it definitely slowed down some developments of certain types of waste streams into things that are more circular or renewable in various ways. How do you think about how you know Covid has affected things in both the kind of short and long term. Trajectory of kind of waste management.

Joost Kamermans

Well I find that an interesting question like we actually started our business only a couple months before covid hit so we’ve only known covid and and in the beginning just like anybody else we were like oh what’s what’s this going to do. But. We grew from 2 to 50 people in two and a half years which has always been covid and at the the last latter 2 years at least and so it did not impact us at all the people I talk to they still care about it. But it’s not I think the transition that we’re making. Covid has much less of an impact I think what’s actually happening in the world. Ah regarding the effects of climate change. Um, that’s something that that keeps on happening and also the the effects that we that we see on how global supply chains get disrupted both because of covid both because of the. And the trouble in Ukraine of course and we see that nobody would want to import materials forever nor from an ecological nor from an economical standpoint so we see a huge push both in terms of economic push as in terms of legislation towards this this change.

James McWalter

Yeah, that that that makes a ton of sense and and you mentioned it’s kind of growth to up to 50 people. Um, so you know what’s the kind of goals over the next couple years from buddha kind of growth in terms of team but also company product all that kind of thing.

Joost Kamermans

Yeah, so I’d say our ambition to grow. The team are not so high because we are a tech company and I think you do something wrong if you end up with 10000 people in your tech company because then you’re not working more efficient and you’re also making the system more expensive. We want to create. Efficiencies and we want to make it beneficial for all users and that also means and not asking too much money and because then it’s not going to happen and and in terms of yeah ambitions well our ambition is to to save half a megaton of waste. By 2026 and for your reference that’s about a quarter. We do annually here in the in the netherlands that the country does so that means automatically because it’s not realistic. We have such a large market share in one country. So that by definition means that we would expand into the rest of Europe.

James McWalter

It no, that’s that’s incredibly exciting and I guess you know geographically it’s quite nice being in Amsterdam you are literally kind of in the center of a lot of you know large countries kind of around you. Um, and so what you know What’s the kind of timeline for that you know is this. You’re already starting to think about how do we you know incorporate France how do we incorporate Belgium or is that kind of a couple years from now.

Joost Kamermans

Um, so we’re definitely looking into expanding we are already a little bit in other countries actually and so these things are moving fairly quickly. But I think from a competitive standpoint I don’t think it’s smart for us to announce that before we actually do it.

James McWalter

I Oh absolutely no ors at all and you we talked a little bit about or touch upon you know some of the you know policy pressures in a positive way coming from the Eu in that um, are there more ah other things you would like to see that would help you know the kind of expansion of this industry.

Joost Kamermans

As well. But yes, we will for sure.

James McWalter

Um, either on the incentive side for you know you know waste management that kind of thing or even on this this incentive side. You know more penalties for bad waste management or you saying look the actual policy framework right now is pretty good. It’s purely about execution now for companies like yourself. So.

Joost Kamermans

Um I think even in the curen environment. We can move. We can definitely do a lot and and at the same time I do think that the government can help with that like a lot of the incentives and. People talk a lot about true pricing but in a way for waste. That’s really really true if you design a product and and it cannot be repaired. It can only be trashed you cause and a big debt to future generations and I’m not even talking only about the contamination that it might cause. Ah I’m also talking about some materials. We’re just running out of so if you are using those materials without the ability to repair it reuse it or recycle it then then it’s lost which is total waste and so we think that what you is doing that you. Um, sort of force a producer to think about the end of light stage I think that is amazing. That’s what we need. That’s the 1 thing that we cannot force ourselves what we can do is we can help companies separate their waste. We can help processors and upcycle ah certain streams. But then there’s always some products some. Some streams that nobody can actually do anything with and those have to be redesigned either. They should be forbidden either. They should be ah yeah, they should just not be necessary or that’s something we have to work towards of course that’s way more complex than the way I say it now but that. If we really want to get to a a circular society which I truly believe in that’s the way to go.

James McWalter

And then thinking about getting to that circular. Yeah Society Circular economy. Um, you know there’s a lot of people starting to kind of work on climate tech startups and different ideas and so there’s a ton of innovation going on and in some areas more than others. You know if you could like wave of magic wand then say hey. Want the next kind of group of innovators to come and focus on this particular part of the pie where are you not seeing enough innovation where smart people should be kind of more focused and.

Joost Kamermans

I see smart people but I see that there’s still that they don’t always have to push that they need to succeed and then I’m talking specifically in in terms of processing capacity. So what we see now is that there are certain startups that set up a ah processing. System for for example, coffee residual they are turning this into ink I think that’s amazing and they just got funding 4000000 I think that’s great. Ah, but that’s really a drop if you look at the amount of coffee residual we have annually and in Europe so they’re going to meet money more the same applies for. And these orange peels the same applies for really dedicated type of plastic facilities. So I see people with ambition I see people doing it but I I think that as long as we’re talking millions. Yes, it’s a lot of money for an individual but for an industry of. Of hundreds of billions and it’s not going to do it. We need people. Ah banks we need governments investors. We need people who are bullish and we don’t need those that funding I think we’ll be fine. We’re take company. We grow fast I’m talking specifically about those people who start now in their garage. With their first experiment for ah, processing, upcycling, whatever if they show that it can be done and don’t then I I need investors that are willing to jump in before it’s fully proven. Typically you need scale in order to prove it and that’s yeah, that’s a chicken of the or the egg story and and that can only be solved by by taking the risk.

James McWalter

Yeah, it kind of brings to mind this divide of 2 types of capital that I think generally people who are very kind of venture focused of which I think you and I both are kind of fall into thatca. Um, we generally just think in terms of like our next round of financing from yeah on the venture side. But if you’re trying to build a big processing plant. You basically need 2 lines of capital. You need you know let’s say a couple million dollars to pay salaries and so on. But then you also need project financing to build the thing. Maybe that’s based on dash. Maybe it’s some other kind of form of of capital that isn’t purely kind of equity based and I’ve talked to a ton of people who. You know they’re building factories on the basis of equity financing and it just doesn’t make sense because it’s just like ah you know it’s the wrong tool for the wrong job kind of thing and I actually think there is a big opportunity for you know some innovative. Maybe they’re just even consultants that then necessari be a company but people who can start kind of working with founders and. You know equity investors to be more open to these other forms of financing in addition, not replacing. But in addition to the equity financing piece because as you say like 4000000 is great. You can pay salaries for a few years but you need 40 to 400000000 to actually build your couple processing plans.

Joost Kamermans

I’m fully with you there and I must say that I’m optimistic of what I’m seeing now in the market that there’s for example, here’re in Amsterdam there’s ah af which is the amtradam climate fund ah that actually gives loans to these type of facilities. highly yeah highly risky of course you have a you have an asset underneath it this factory. But if the factory is not going to if it’s not going to work. What is it worth so. They take a lot of risk but I think it’s really good that they do it. Regardless they therefore also have to ask of course significantly. Yeah in my opinion high interest rates but it makes sense because it’s high risk. And I think also from an and a founder perspective. It’s fine because if it works you can pay off the debt and you can still repay those those interests and if it doesn’t you lose your asset but it but it was worthless anyway, so it’s I think it’s win win and if they spread it well if there’s a hundred of these projects I’m sure some will fulfill some will succeed. Ah. As a society. We’re better off and I think financially it also yeah, probably makes sense as long as they do good due diligence. So I’m really positive about that. Yeah development.

James McWalter

And you you know, worked on starting this startup in in the us in the past that obviously you’re building you know a very successful company in the Netherlands as you think about the different kind of work and startup cultures between yeah, working in Amsterdam and working in the us what are the things that you learned in the us that. You know more local dutch you know founders could could learn from and also vice versa like what do american you know founders what could they maybe more appreciate from you know, Dutch and european founders and.

Joost Kamermans

I really like that question and I actually thought about that a lot. So for me personally what inspired me most and I went to Wharton University Of Pennsylvania so ivy league with a lot of super super ambitious people and when i. Before I went there I was really nervous and I thought okay I’m really going to be by far the dumbest guy in the class and I don’t want to say that that might still be true, but it wasn’t I wasn’t flabbergased by how smart people were because they were definitely smart, but there’s also a lot of smart people here in the Netherlands. But what. But stood out to me is that they were bold and then I’m not talking about just just crazy or yelling stupid stuff but they they really dare to dream big and and there were people in my in my class I would say. Yeah I I’m not I don’t think I’m gonna finish a semester because I’m trying to raise 20000000 to to solve this disease or something and some of them would actually drop out and do it and in the beginning I really thought they were yeah hallucinating and some of them didn’t succeed of course. But at least they tried so I think that really trying to. Really daring to dream out loud ah that to me is a big american talent and and the other thing that I noticed and that um when I did that built that startup we did that with the horizon school of technology which was a summer program and that was. In the University Of Pennsylvania it was not from the University Of Pennsylvania but it was in the same building and and the founders of that academy um, they were really really driven ah to the point that. I recall we were gonna learn how to code because that was part of the program they were gonna teach us how to to build our own Mvp and that the program was 9 to sleep and I didn’t understand what to wind and it really meant at 9 you start and you work till you sleep and one of the I’m dutch to us.

James McWalter

Price.

Joost Kamermans

I mean we we’re not like that. That’s really a culture of difference and they would do this six days so only and I think only on Saturday they wouldn’t do this and and one of those guys even ah when we went for lunch he would combine it with going to the toilet to save time for for last walking and. I really thought that’s just outrageous right? and and he always spoke about I just I really want to be successful. Be far in 30 and what what I found most inspiring inspiring is this actually didn’t work out for them super well I think it succeeded but not to the extent that they wanted it to but he started 2 other things into.

James McWalter

Too much. Yeah.

Joost Kamermans

In the years after and 1 of those actually ah was valued over ah ah, $1000000000 within 2 years of starting it. Super yeah, super inspiring but to me if you’re talking about merit based this guy was willing to do whatever it took and really put in the hours and really grind it. Keep on perfecting it and killing all his darlings. He would work on something for months ahead and then just throw in the trash and start again if it didn’t work and that to me like I have never seen anybody in the netherlands do this and it pays off. Um so hard work does pay off and I yeah I was really impressed.

James McWalter

I yeah I absolutely love you know that those kind of past stories and they completely align with myself right? like you know and I started working on on startups in the us I was kind of flabbergasted. You know you go to these founder events and there’s like a 19 year old telling them telling you but they’re a literal billion dollar idea and I’m just like you know 30 something like what? what are you talking about.

James McWalter

Like I wish I had that confidence at that age. Ah, but on the other side. Yes, like the work life balance is so difficult and you know there’s ah somebody who I kind of admire can’t remember their their name but I know I admire them but they have this kind of you know you have this expression of like you know don’t work harder work smarter but they say don’t even work smarter work bolder right. You actually have to take on those risks to have like the massive like upside from you know the leverage of you know because risk return are always you know related in whatever you’re you’re kind of working on and so their thing is like look just just work bolder. Um, you can kind of hit those heights in a way that you might have surprised yourself, especially if you do a couple things. You know over the course of your life and like literally every year when I have my kind of you know, look back in the year I’m like oh I should just take more risks every single year is my consistent message myself and like if people you know, similar it to yourself look at me taking ah taking a lot of risks. Um, and then the other I I suppose just taking that kind of anecdote on my side I track everything about yeah, the work I do. And my productivity at 45 hours a week of actual solid work and 65 hours a week of solid work are identical. So I just like save the extra 20 hours and like spend them with my wife my dog and friends and all those kind of things because I’m actually hitting the same kind of metrics at work and so I think that you know. You you live to work or you work to live like those dynamics between Europe and the us I think absolutely both kind of can teach other a bit more about the balance.

Joost Kamermans

Yeah, no, and and that spot on. So though. As to your question. What would the americans be able to learn from the dutch and I to me ah, a great example is always adjut the payment company in the Netherlands usually um, very successful and I think what they did and is they they did this to the max. So. I don’t think that they worked insane hours. They worked very smart. Very effective also making sure that if you work that you really work and if you don’t work that you really enjoy it. Um, and that leads also to a great atmosphere and that leads to a very large employee engagement and retention. And it has a lot of these benefits. So I I think that and I must I think that also applies to our own company like we are obviously touch based for me this very strongly holds for me if I work very long hours. My productivity doesn’t increase for these american guys I told you they could do both. They were both productive. And they could work 80 hours I I must just acknowledge that they are more talented in that respect than I am I I just can’t do it even if I wanted to ah but a looking staying close to myself and knowing where my talents lay and also knowing where the culture where where I live and where I’m from. Um, what works best I very much believe in this about um, making sure that we work smart making sure that we work very efficiently if we work really work. Don’t just sit there and then also make sure that we have ah downtime we really enjoy it. We’re not going to call each other into weekends or or send late night whatsapp urgent messages because it only causes stress and typically doesn’t solve anything.

James McWalter

I Yeah and I completely echo that um us it’s been fantastic. Already enjoyed the conversation. Um I suppose before we finish off is there anything I should have asked you about but did not.

Joost Kamermans

I Really feel like we Um, we talked about a lot of things already and but I guess um yeah, the last thing that you could ask me is if we’re still looking for some people.

James McWalter

Yes.

Joost Kamermans

Um, I’m actually not sure who’s who’s your audience but I’m assuming that there’s some talented people out there.

James McWalter

Absolutely yes, So yes, so you’re if you’re looking to hire at the moment and we can definitely include your careers page and in the show notes. Thank you just.

Joost Kamermans

Thank you very much bye.

Paces – E90

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

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

https://carbotnic.com/paces

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

The unedited podcast transcript is below

James McWalter

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

Charles

Thank you James excited to be here.

James McWalter

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

Charles

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

James McWalter

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

Charles

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

James McWalter

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

Charles

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

James McWalter

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

Charles

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

James McWalter

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

James McWalter

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

Charles

Awesome! Thanks for sharing.

James McWalter

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

Charles

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

James McWalter

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

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

Charles

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

James McWalter

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

Charles

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

James McWalter

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

Charles

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

James McWalter

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

Charles

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

James McWalter

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

Charles

Potential customers.

James McWalter

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

Charles

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

James McWalter

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

James McWalter

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

Charles

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

James McWalter

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

Charles

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

James McWalter

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

Charles

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

James McWalter

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

Charles

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

James McWalter

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

Charles

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

James McWalter

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

Charles

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

James McWalter

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

Charles

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

James McWalter

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

Charles

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

James McWalter

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

James McWalter

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

Charles

Thank you James thanks for having me.

James McWalter

Thank you everyone.