Arvin Ganesan (00:00:00):
We're trying to make the cost of storage so cheap that when paired with renewables,
Arvin Ganesan (00:00:05):
solar plus storage is going to be cheaper than gas.
Arvin Ganesan (00:00:10):
Time is your worst enemy.
Arvin Ganesan (00:00:11):
You need to understand the trade-offs between spending money and losing time.
Arvin Ganesan (00:00:17):
Underinvesting is going to cause big problems down the roads.
Arvin Ganesan (00:00:22):
Utilities are allowed to earn a rate of return on the capital cost of things they build.
Arvin Ganesan (00:00:27):
They're not allowed to earn a rate of return on the operating of those assets.
Silas Mähner (00:00:36):
Welcome back to Clean Techies, the number one podcast for climate tech entrepreneurs.
Silas Mähner (00:00:39):
Today we are speaking with Arvind Ganesan, the current CEO of 4th Power.
Silas Mähner (00:00:44):
There's a good chance you've heard of 4th Power as they hit the market with a big
Silas Mähner (00:00:47):
splash when they announced their Series A funding round of $19 million.
Silas Mähner (00:00:51):
Investors include Breakthrough Energy Ventures, DCVC, and Black Venture Capital Consortium.
Silas Mähner (00:00:57):
they are solving the problem of storing all the renewable energy by heating up
Silas Mähner (00:01:00):
rocks which are able to store the energy for a very long time and they only lose a
Silas Mähner (00:01:05):
minimal amount of energy while sitting still or while just kind of keeping that
Silas Mähner (00:01:09):
energy there then when the time is right they hit the switch and the energy is
Silas Mähner (00:01:13):
deployed what's really interesting is this discharge is actually faster than the
Silas Mähner (00:01:18):
time it takes to start a peaker plant which is a small gas power plant that is
Silas Mähner (00:01:22):
usually used
Silas Mähner (00:01:24):
and turned on to meet peak energy demand during the day, at least conventionally speaking.
Silas Mähner (00:01:29):
On top of this tech being just absolutely incredible, Arvid also brings an amazing background.
Silas Mähner (00:01:34):
He started out in investment research,
Silas Mähner (00:01:36):
then landed in the policy world where he eventually worked in the EPA during the
Silas Mähner (00:01:40):
Obama era.
Silas Mähner (00:01:41):
From there, he ended up doing global energy policy with Apple to help them purchase renewables.
Silas Mähner (00:01:46):
Fast forward a bit, and he gets tapped to come in as CEO of 4th Power.
Silas Mähner (00:01:50):
Today, we've got a great show for you, so enjoy.
Silas Mähner (00:01:53):
But before you do, we do have an ask.
Silas Mähner (00:01:55):
I know we ask this every episode, but there is a reason.
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Silas Mähner (00:02:01):
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Silas Mähner (00:02:03):
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Okay, enjoy the episode.
Silas Mähner (00:02:21):
All right, welcome to the show, Aaron.
Silas Mähner (00:02:22):
How's it going today?
Silas Mähner (00:02:23):
It's going great.
Silas Mähner (00:02:24):
How are you doing?
Silas Mähner (00:02:25):
I'm loving life.
Silas Mähner (00:02:27):
It's a sunny day in Wisconsin,
Silas Mähner (00:02:29):
and I can't ask for anything more,
Silas Mähner (00:02:30):
and I'm well caffeinated too,
Silas Mähner (00:02:31):
so everything's good.
Silas Mähner (00:02:32):
There you go.
Silas Mähner (00:02:33):
There you go.
Silas Mähner (00:02:34):
On all cylinders here.
Silas Mähner (00:02:35):
Yeah, absolutely.
Silas Mähner (00:02:37):
So I guess let's just start off.
Silas Mähner (00:02:39):
Give us a quick background.
Silas Mähner (00:02:40):
Who are you, and what are you doing today?
Arvin Ganesan (00:02:42):
Yeah.
Arvin Ganesan (00:02:43):
Hey, thanks.
Arvin Ganesan (00:02:43):
Thanks for having me on.
Arvin Ganesan (00:02:45):
I'm Arvind Ganesan.
Arvin Ganesan (00:02:46):
I'm the CEO of 4th Power.
Arvin Ganesan (00:02:49):
We are a clean energy startup that is looking to solve the problem of how do you
Arvin Ganesan (00:02:56):
store solar and wind power for when the grid needs it?
Arvin Ganesan (00:03:00):
And we're kind of coming at this from the basic viewpoint of the world has a huge
Arvin Ganesan (00:03:06):
challenge in play of powering the grid with renewable generation.
Arvin Ganesan (00:03:10):
The amount of storage you need is massive.
Arvin Ganesan (00:03:12):
So if we're going to make this transition, storage needs to be dead cheap and really easy to procure.
Arvin Ganesan (00:03:17):
And that's what our technology does.
Silas Mähner (00:03:21):
And so I guess before we go, I do want to talk about your kind of journey to this point.
Silas Mähner (00:03:26):
But on a macro level, you talk about the need for there to be really cheap storage.
Silas Mähner (00:03:30):
Can you just give us the landscape of what's there now?
Silas Mähner (00:03:33):
How are we storing it now?
Silas Mähner (00:03:35):
And what do we need the price to get to to make it economical?
Arvin Ganesan (00:03:38):
Yeah, that's a great question.
Arvin Ganesan (00:03:40):
I'm glad you brought up price because ultimately the way that we choose to dispatch
Arvin Ganesan (00:03:44):
electrons is largely around price and reliability.
Arvin Ganesan (00:03:47):
Right now,
Arvin Ganesan (00:03:48):
the way we store electricity is either largely through hydro projects or through
Arvin Ganesan (00:03:53):
lithium ion batteries.
Arvin Ganesan (00:03:55):
Both are not really going to be the backbone of how we scale to a fully renewable
Arvin Ganesan (00:03:58):
grid because with hydro,
Arvin Ganesan (00:04:00):
it needs to be in a place where you have a dam.
Arvin Ganesan (00:04:03):
And with lithium ion batteries,
Arvin Ganesan (00:04:05):
unfortunately,
Arvin Ganesan (00:04:07):
procuring the lithium and the other rare earth minerals that go into it is
Arvin Ganesan (00:04:11):
difficult and expensive.
Arvin Ganesan (00:04:12):
So without raising rates on people, you can't rely on mining our way out of this to get lithium.
Arvin Ganesan (00:04:20):
So that's kind of the technology as it is right now.
Arvin Ganesan (00:04:24):
But the world will move on without storage.
Arvin Ganesan (00:04:26):
It'll just build more fossil.
Arvin Ganesan (00:04:28):
And that's the future that we're looking to avoid.
Arvin Ganesan (00:04:30):
We're trying to make the cost of storage so cheap that when paired with renewables,
Arvin Ganesan (00:04:36):
solar plus storage is going to be cheaper than building new gas plus the fuel of
Arvin Ganesan (00:04:41):
that gas.
Silas Mähner (00:04:43):
Okay, got it.
Silas Mähner (00:04:44):
Yeah, that's kind of interesting.
Silas Mähner (00:04:45):
I'm always curious because I started my recruitment background,
Silas Mähner (00:04:48):
my recruitment experience in the renewable space.
Silas Mähner (00:04:50):
And it was always interesting to see how the utilities are trying to deal with this
Silas Mähner (00:04:53):
because they kind of have the pressure to move,
Silas Mähner (00:04:56):
but they also it's like super expensive for them to do it.
Silas Mähner (00:04:58):
So it'll be interesting.
Silas Mähner (00:04:59):
We'll get into that in a bit.
Silas Mähner (00:05:01):
And I appreciate the high level summary.
Silas Mähner (00:05:02):
So tell us then, tell us about your career.
Silas Mähner (00:05:06):
How did you end up in this role?
Silas Mähner (00:05:07):
Because you have a pretty interesting background to end up being the CEO of this company.
Silas Mähner (00:05:11):
And I'd love to understand what made you make that leap,
Silas Mähner (00:05:14):
because I'm assuming you had other options that you could have taken.
Arvin Ganesan (00:05:18):
Yeah, so I've had a career that has spanned a lot of different elements.
Arvin Ganesan (00:05:23):
I started off right out of college as a bond trader.
Arvin Ganesan (00:05:28):
And this is basically the furthest possible job you could have from what I had.
Arvin Ganesan (00:05:32):
But it wasn't what I wanted.
Arvin Ganesan (00:05:34):
It wasn't kind of focused on mission,
Arvin Ganesan (00:05:38):
though it really did help me quite a bit with understanding financial markets.
Arvin Ganesan (00:05:43):
I then went on to grad school, became an advisor to a U.S.
Arvin Ganesan (00:05:46):
senator, and eventually was appointed by President Obama to lead policy efforts at the U.S.
Arvin Ganesan (00:05:54):
EPA during his first term,
Arvin Ganesan (00:05:57):
which was actually very consequential for the energy markets we're operating in now.
Arvin Ganesan (00:06:01):
At that point,
Arvin Ganesan (00:06:03):
coal pollution didn't have the stringent requirements of pollution control that it
Arvin Ganesan (00:06:07):
does now,
Arvin Ganesan (00:06:08):
which really has changed the way that the whole electricity market functions.
Arvin Ganesan (00:06:13):
I then went on to lead policy for a group of clean energy companies at a trade
Arvin Ganesan (00:06:19):
association and then led global energy work for Apple.
Arvin Ganesan (00:06:23):
And in that role at Apple, I was helping the company as well as its suppliers manage
Arvin Ganesan (00:06:29):
procure renewables from utilities around the world.
Arvin Ganesan (00:06:31):
So the common thread throughout all of this is that the electricity markets are
Arvin Ganesan (00:06:37):
ultimately regulated markets.
Arvin Ganesan (00:06:39):
They're governed by regulators and by governments.
Arvin Ganesan (00:06:42):
And that's true whether you're in Asia or Alabama.
Arvin Ganesan (00:06:46):
So what I've learned super deeply is getting a product deployed is not only about
Arvin Ganesan (00:06:52):
building really cool technology.
Arvin Ganesan (00:06:54):
That's a big and important point.
Arvin Ganesan (00:06:56):
But you need to make sure that it works within the system that we've created.
Arvin Ganesan (00:06:59):
And that's how I kind of work on this day-to-day problem of fourth power.
Arvin Ganesan (00:07:03):
I wanted to go,
Arvin Ganesan (00:07:04):
I wanted to leave and take a leap to a technology that mattered for really two
Arvin Ganesan (00:07:10):
reasons in my life.
Arvin Ganesan (00:07:11):
First,
Arvin Ganesan (00:07:12):
I wanted to be on the ground around deployment and around building something that
Arvin Ganesan (00:07:16):
can absolutely change the world.
Arvin Ganesan (00:07:18):
But second is kind of the human point.
Arvin Ganesan (00:07:20):
I wasn't really looking for this job,
Arvin Ganesan (00:07:22):
but I found a real connection with my CTO,
Arvin Ganesan (00:07:25):
who's the founder of the company,
Arvin Ganesan (00:07:26):
a professor out of MIT.
Arvin Ganesan (00:07:28):
I was pretty reluctant to take a CEO job because I have two small kids and I didn't
Arvin Ganesan (00:07:34):
know how I could pull it off.
Arvin Ganesan (00:07:35):
And I was talking to a bunch of other folks as well.
Arvin Ganesan (00:07:38):
And when a mutual friend was like, hey, you should go meet this guy.
Arvin Ganesan (00:07:41):
I flew up to Boston and he's like, all right, meet me at the Cheesecake Factory at 8.
Arvin Ganesan (00:07:45):
I'm like, Cheesecake Factory?
Arvin Ganesan (00:07:47):
I haven't been here since I was like 18 years old.
Arvin Ganesan (00:07:51):
So I show up and he brings his kids.
Arvin Ganesan (00:07:53):
And the fact that the first time that we met was his whole family,
Arvin Ganesan (00:07:57):
because he didn't have childcare,
Arvin Ganesan (00:07:59):
at a restaurant that obviously his kids liked,
Arvin Ganesan (00:08:02):
it actually meant a lot.
Arvin Ganesan (00:08:04):
And it formed a personal connection that made the leap to this company kind of a no brainer.
Silas Mähner (00:08:11):
Yeah, this is quite interesting.
Silas Mähner (00:08:12):
I've heard recently a candidate I worked with who said one of his core criteria is
Silas Mähner (00:08:16):
that you need to know that the founders have kids.
Silas Mähner (00:08:19):
It's a really big deal.
Silas Mähner (00:08:20):
I'm not quite in that situation, but it's interesting to hear this theme pop up.
Silas Mähner (00:08:25):
I am very curious what you learned through your time at Apple,
Silas Mähner (00:08:28):
because going from kind of working in the EPA and then a little bit of stint
Silas Mähner (00:08:33):
elsewhere and then going to Apple,
Silas Mähner (00:08:34):
I'm really curious what you learned that you didn't think was going to be the case,
Silas Mähner (00:08:38):
but kind of really changed the way you look at things working with Apple.
Arvin Ganesan (00:08:42):
Yeah, so the electricity market is a series of pushes and pulls, right?
Arvin Ganesan (00:08:47):
So there's the utility that's kind of in the center,
Arvin Ganesan (00:08:50):
but they're facing immense pressure,
Arvin Ganesan (00:08:53):
not only from customers,
Arvin Ganesan (00:08:55):
right?
Arvin Ganesan (00:08:55):
Customers like Apple and other suppliers are pushing them to offer them fully renewable products.
Arvin Ganesan (00:09:01):
And that's challenging, right?
Arvin Ganesan (00:09:04):
Because it is very important for a utility to service all their customers.
Arvin Ganesan (00:09:08):
If you're in a place like Georgia,
Arvin Ganesan (00:09:11):
you're gonna have a tech company as your single largest purchaser of electricity.
Arvin Ganesan (00:09:15):
So what they want is really going to matter as a utility for Southern Company.
Arvin Ganesan (00:09:20):
On the other hand, utilities are really judged by their regulators for two things.
Arvin Ganesan (00:09:26):
They're judged for the reliability,
Arvin Ganesan (00:09:28):
like how are the lights turning on when you want it to come on,
Arvin Ganesan (00:09:31):
and the cost of electricity.
Arvin Ganesan (00:09:33):
So utilities,
Arvin Ganesan (00:09:34):
I think what I've learned is that utilities are first not monolithic,
Arvin Ganesan (00:09:38):
and I probably made it out to be in that little story,
Arvin Ganesan (00:09:41):
but also have like two very different pushes and pulls that govern how they work.
Arvin Ganesan (00:09:47):
And in order to get deployed, you really need to understand how the whole system works.
Silas Mähner (00:09:52):
Hey guys, sorry for the interruption.
Silas Mähner (00:09:54):
I just need a few seconds because Soma and I have two quick favors to ask.
Silas Mähner (00:09:58):
Putting out the show each week takes about 15 to 20 hours between us, so it's a lot of effort.
Silas Mähner (00:10:02):
And it would mean the world to us if you would leave a review and mention your favorite episode.
Silas Mähner (00:10:06):
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Silas Mähner (00:10:10):
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Silas Mähner (00:10:11):
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Silas Mähner (00:10:13):
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Silas Mähner (00:10:17):
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Silas Mähner (00:10:22):
Thank you for tuning in consistently and helping us to share our guests' stories.
Silas Mähner (00:10:26):
Now back to the show.
Silas Mähner (00:10:27):
Yeah, I think it's helpful to frame it that way.
Silas Mähner (00:10:31):
I guess I hadn't thought about it from that perspective.
Silas Mähner (00:10:34):
Obviously, you don't want to raise rates for all the people who are paying for their home energy.
Silas Mähner (00:10:38):
But at the same time, you have to deal with the demands of these corporates.
Silas Mähner (00:10:42):
It's actually quite interesting.
Silas Mähner (00:10:43):
I never really thought about it in that way.
Silas Mähner (00:10:45):
Well, it gets really complicated, right?
Arvin Ganesan (00:10:49):
The energy utilization of a chat GPT query is 10 times more than asking Google the same thing.
Arvin Ganesan (00:10:56):
So you're putting enormous stress on wherever the data centers are serving that
Arvin Ganesan (00:11:02):
information need and who's paying for it.
Arvin Ganesan (00:11:04):
And how do you have a communal grid that's designed to service everybody and manage
Arvin Ganesan (00:11:09):
that amount of peak load that one or two customers utilize?
Silas Mähner (00:11:15):
During the time as an energy buyer with Apple,
Silas Mähner (00:11:18):
were there any major shifts in kind of the way – I'm assuming you worked with
Silas Mähner (00:11:22):
multiple utilities,
Silas Mähner (00:11:23):
right?
Silas Mähner (00:11:23):
So were there any major shifts in how they kind of started to deal with people like Apple?
Silas Mähner (00:11:28):
I mean,
Silas Mähner (00:11:28):
was this the time when you joined that the big corporates really started pushing
Silas Mähner (00:11:32):
for that renewables stuff?
Silas Mähner (00:11:34):
Yeah.
Silas Mähner (00:11:34):
So,
Silas Mähner (00:11:35):
I mean,
Arvin Ganesan (00:11:35):
I would say probably around 25,
Arvin Ganesan (00:11:37):
right around when I joined,
Arvin Ganesan (00:11:38):
maybe a little bit earlier,
Arvin Ganesan (00:11:39):
is when corporate started setting,
Arvin Ganesan (00:11:41):
at that time it was called 100% renewable.
Arvin Ganesan (00:11:44):
They were looking to purchase 100% renewable.
Arvin Ganesan (00:11:46):
Now,
Arvin Ganesan (00:11:47):
what that means has evolved over time,
Arvin Ganesan (00:11:48):
but at the time it meant like they wanted to own certificates showing that they've
Arvin Ganesan (00:11:53):
purchased the amount of renewable generation that they've consumed over the entire year.
Arvin Ganesan (00:11:59):
And that's good.
Arvin Ganesan (00:12:00):
There were also a couple of
Arvin Ganesan (00:12:02):
moments that really governed that.
Arvin Ganesan (00:12:05):
For example,
Arvin Ganesan (00:12:06):
in Nevada,
Arvin Ganesan (00:12:07):
I think in 2018,
Arvin Ganesan (00:12:09):
some of the largest consumers of electricity threatened to leave the utility over
Arvin Ganesan (00:12:13):
the ability to service a renewable load.
Arvin Ganesan (00:12:16):
This was a voter referendum on retail choice.
Arvin Ganesan (00:12:20):
Basically, can you get rid of the utilities monopoly in Nevada?
Arvin Ganesan (00:12:26):
This was either a warning shot or the shot well after the markets had been thinking
Arvin Ganesan (00:12:32):
about this that really changed utilities from thinking,
Arvin Ganesan (00:12:36):
hey,
Arvin Ganesan (00:12:36):
we service one load for everybody to it's really important we keep our customers happy.
Arvin Ganesan (00:12:42):
That really changed the landscape with respect to consumers.
Silas Mähner (00:12:47):
That is fascinating.
Silas Mähner (00:12:49):
Do you have an understanding as to why
Silas Mähner (00:12:53):
Was there another pressure that was leading the corporates or that has kind of
Silas Mähner (00:12:56):
pushed the corporates to be wanting to do this?
Silas Mähner (00:12:58):
Is it just public sentiment?
Silas Mähner (00:13:00):
Is it investor sentiment?
Silas Mähner (00:13:02):
What is the push from them?
Silas Mähner (00:13:03):
Because they seem pretty bought into this at that time.
Arvin Ganesan (00:13:07):
Yeah.
Arvin Ganesan (00:13:07):
So it's a little bit different at the time then than it was now.
Arvin Ganesan (00:13:10):
I think then it was about doing the right thing primarily with respect to how you consume energy.
Arvin Ganesan (00:13:16):
But it was also about,
Arvin Ganesan (00:13:17):
you know,
Arvin Ganesan (00:13:18):
signing long-term PPAs so your cost of energy is fixed over the long term.
Arvin Ganesan (00:13:23):
That's also something storage can do.
Arvin Ganesan (00:13:25):
But with retail rates,
Arvin Ganesan (00:13:27):
with natural gas,
Arvin Ganesan (00:13:28):
the price,
Arvin Ganesan (00:13:29):
kind of the price for electricity had been fluctuating quite a bit.
Arvin Ganesan (00:13:33):
And with renewables, you could lock in a fixed price for a long time.
Arvin Ganesan (00:13:37):
And some of the deals are really, really good.
Arvin Ganesan (00:13:40):
Those are the two big motivators out the gate.
Arvin Ganesan (00:13:43):
Now,
Arvin Ganesan (00:13:44):
if you're a big user of electricity,
Arvin Ganesan (00:13:46):
like Microsoft,
Arvin Ganesan (00:13:47):
Amazon,
Arvin Ganesan (00:13:48):
Meta,
Arvin Ganesan (00:13:48):
with these data centers,
Arvin Ganesan (00:13:50):
it's almost a social contract because you are using so much power on the grid that without...
Arvin Ganesan (00:13:58):
without new load,
Arvin Ganesan (00:13:59):
without figuring out ways that that the data center load doesn't affect the rest of
Arvin Ganesan (00:14:05):
the rate base and the rest of the grid,
Arvin Ganesan (00:14:08):
it becomes kind of a part of doing business.
Silas Mähner (00:14:11):
Mm hmm.
Silas Mähner (00:14:12):
I'm kind of curious why,
Silas Mähner (00:14:13):
maybe we're getting a little bit off topic to macro,
Silas Mähner (00:14:16):
but I am really curious about this as we talk.
Silas Mähner (00:14:18):
Can't it be so common that this has to run through the grid?
Silas Mähner (00:14:20):
Because if these are huge loads,
Silas Mähner (00:14:22):
wouldn't it almost behoove them to just pay a private developer to kind of do some
Silas Mähner (00:14:26):
behind the meter stuff for these large data centers and manufacturing?
Arvin Ganesan (00:14:30):
I mean, nobody has done that to date, right?
Arvin Ganesan (00:14:33):
I mean, I think that the idea is utilities.
Arvin Ganesan (00:14:36):
First,
Arvin Ganesan (00:14:37):
if you are a data center owner,
Arvin Ganesan (00:14:38):
that's a huge amount of capital expenditure that they'll be building.
Arvin Ganesan (00:14:42):
So they need 24-7 load and they need lots of it.
Arvin Ganesan (00:14:46):
So that's a lot of solar, a lot of storage.
Arvin Ganesan (00:14:49):
All of which is great,
Arvin Ganesan (00:14:50):
but it's a capital intensive industry that I don't think the tech folks want to
Silas Mähner (00:14:55):
necessarily take on themselves.
Silas Mähner (00:14:57):
But would there not be private developers backed by like private equity who would
Silas Mähner (00:15:01):
be willing to finance it based off of the PPA agreements instead of kind of
Silas Mähner (00:15:05):
funneling it through the...
Silas Mähner (00:15:06):
to the utility or this may be out of your scope?
Arvin Ganesan (00:15:10):
There's also like very legal requirements, right?
Arvin Ganesan (00:15:13):
The utility has the right to service load to all customers in their service territory.
Arvin Ganesan (00:15:19):
This is also where kind of net metering fights pop up.
Arvin Ganesan (00:15:25):
What rate does the utility get reimbursed by generation on a rooftop?
Arvin Ganesan (00:15:31):
It's not as simple as a huge data center can just like
Arvin Ganesan (00:15:36):
peace i'm out uh yeah yeah there there are laws that govern this and also interest
Arvin Ganesan (00:15:41):
from the utilities who have a lot of experience in doing this yeah it is
Silas Mähner (00:15:46):
interesting i just kind of curious obviously it is difficult to manage through
Silas Mähner (00:15:50):
through those pieces but it's it feels from an outsider uh relatively inefficient
Silas Mähner (00:15:55):
right like if if this is causing so much strain on the utilities because of the
Silas Mähner (00:15:59):
interconnection agreements and all this thing and
Silas Mähner (00:16:01):
so many complications.
Silas Mähner (00:16:03):
Why not just say, hey, a couple of you, go ahead and do this yourself.
Silas Mähner (00:16:06):
But I understand the landslide that that brings.
Silas Mähner (00:16:10):
If one person does it,
Silas Mähner (00:16:11):
then okay,
Silas Mähner (00:16:12):
maybe everybody else is going to do it and then it causes an issue for them.
Silas Mähner (00:16:14):
So I appreciate that.
Silas Mähner (00:16:16):
Let's move on to the tech a bit.
Silas Mähner (00:16:18):
So I want to understand, you're going to have to explain this to me like I'm five, right?
Silas Mähner (00:16:22):
How does this technology work?
Silas Mähner (00:16:24):
And let's just kind of go through it piece by piece.
Arvin Ganesan (00:16:26):
Yeah, that sounds good.
Arvin Ganesan (00:16:27):
So the core idea is to make renewables as dispatchable as fossil at a lower cost.
Arvin Ganesan (00:16:34):
So that's the North Star of our technology.
Arvin Ganesan (00:16:37):
We go into it with a couple of fundamental principles.
Arvin Ganesan (00:16:42):
The first is in order to build a grid on renewable generation.
Arvin Ganesan (00:16:46):
So first,
Arvin Ganesan (00:16:47):
I should pause by saying we are at a generational moment where electricity demand
Arvin Ganesan (00:16:53):
is about to go up for the first time in my lifetime.
Arvin Ganesan (00:16:56):
right?
Arvin Ganesan (00:16:56):
So it's been flat for the last 30, 40 years.
Arvin Ganesan (00:16:59):
It's about to go way up because of things like data centers, electrification vehicles, all that stuff.
Arvin Ganesan (00:17:05):
So there's a moment here.
Arvin Ganesan (00:17:07):
And in order to get deployed, you need to be cheaper and more reliable than fossil.
Arvin Ganesan (00:17:11):
The operating principles, the amount of storage you need is so significant that you need to have the
Arvin Ganesan (00:17:20):
the cost low as well as the supply chain for the battery to be really simple.
Arvin Ganesan (00:17:25):
So those are, those are basic principles.
Arvin Ganesan (00:17:28):
Okay.
Arvin Ganesan (00:17:28):
So with that, what are we, we are a utility scale thermal battery.
Arvin Ganesan (00:17:33):
What that means is,
Arvin Ganesan (00:17:34):
so first we're at the utility scale,
Arvin Ganesan (00:17:36):
which means a one gigawatt hour battery,
Arvin Ganesan (00:17:38):
which is the equivalent of powering a hundred thousand homes continuously for two
Arvin Ganesan (00:17:42):
or three days.
Arvin Ganesan (00:17:43):
Yeah, so it's a large battery.
Arvin Ganesan (00:17:46):
The basic idea is the battery uses electricity either from the grid or directly
Arvin Ganesan (00:17:51):
from solar or wind projects to power large resistive heaters.
Arvin Ganesan (00:17:57):
Those resistive heaters heat up metal, so liquid tin in this case, to 25, 2600 degrees Celsius.
Arvin Ganesan (00:18:04):
And that's approaching the top of the heat that they can take without turning into a gas.
Arvin Ganesan (00:18:11):
So it's a very, very hot liquid.
Arvin Ganesan (00:18:13):
That fluid is then moved through graphite pipes deep into carbon storage blocks.
Arvin Ganesan (00:18:19):
The type of carbon we use is graphite.
Arvin Ganesan (00:18:22):
That heat is then transferred essentially from the liquid tin medium into the
Arvin Ganesan (00:18:26):
middle of these graphite blocks through radiation,
Arvin Ganesan (00:18:29):
through light,
Arvin Ganesan (00:18:31):
essentially.
Arvin Ganesan (00:18:33):
These carbon blocks become ultra-heated to 2,400 degrees Celsius,
Arvin Ganesan (00:18:37):
where they remain that way with about a percent heat loss every single day.
Arvin Ganesan (00:18:42):
When you want to go back to electricity,
Arvin Ganesan (00:18:43):
again,
Arvin Ganesan (00:18:44):
that liquid,
Arvin Ganesan (00:18:45):
that fluid medium takes the heat from the carbon storage blocks and puts it into
Arvin Ganesan (00:18:50):
what we're calling a thermophotovoltaic block.
Arvin Ganesan (00:18:54):
It's essentially an area where the light from the heat is used to convert back into
Arvin Ganesan (00:19:01):
electricity using thermophotovoltaic panels,
Arvin Ganesan (00:19:04):
which we've specially designed to have the highest round-trip efficiency in the world.
Silas Mähner (00:19:12):
So this is awesome, first of all.
Silas Mähner (00:19:15):
I mean, this is mind-blowing.
Silas Mähner (00:19:16):
I think I do want to reference for other people if they want to go even further into the tech.
Silas Mähner (00:19:21):
There was an episode you guys did on Volt's podcast that was really,
Silas Mähner (00:19:25):
really deep into the tech,
Silas Mähner (00:19:26):
at least in the first half.
Silas Mähner (00:19:27):
So I recommend if people want, check that out.
Silas Mähner (00:19:29):
Shout out to Volt.
Silas Mähner (00:19:31):
One thing I want to clarify is to try to summarize this.
Silas Mähner (00:19:34):
Basically, you take energy, in this case, obviously, ideally, renewable energy.
Silas Mähner (00:19:39):
You heat up this tin, which gets so hot, it's almost a liquid, but it's not quite.
Silas Mähner (00:19:44):
It goes into these pipes.
Silas Mähner (00:19:45):
That goes into a block, which only loses a little bit of heat as it just kind of sits around.
Silas Mähner (00:19:50):
And then you can basically reverse this and turn it into – you take the light and
Silas Mähner (00:19:56):
you reflect it off kind of like the sun,
Silas Mähner (00:19:58):
but it's not the sun,
Silas Mähner (00:19:59):
right,
Silas Mähner (00:19:59):
into your own energy.
Silas Mähner (00:20:02):
Is that right, first of all?
Silas Mähner (00:20:03):
Yeah, yeah, more or less.
Silas Mähner (00:20:05):
How do you – like my question is how do you reverse the transfer from the tin to
Silas Mähner (00:20:11):
the blocks and then vice versa?
Silas Mähner (00:20:12):
How do you do that work scientifically?
Silas Mähner (00:20:14):
Okay.
Arvin Ganesan (00:20:14):
Yeah, so these are the basic laws of heat transfer, right?
Arvin Ganesan (00:20:18):
It's gonna go from hot to cold.
Arvin Ganesan (00:20:21):
Anytime you are bringing heat into a block,
Arvin Ganesan (00:20:25):
that heat is gonna radiate,
Arvin Ganesan (00:20:26):
or into something of lower temperature,
Arvin Ganesan (00:20:28):
that heat is gonna go into that lower temperature thing and raise the temperature.
Arvin Ganesan (00:20:32):
And the reason we're called fourth power is that has to do with the relationship
Arvin Ganesan (00:20:37):
between the delta,
Arvin Ganesan (00:20:38):
the increase in temperature with the increase of light.
Arvin Ganesan (00:20:42):
So it's not one to one.
Arvin Ganesan (00:20:44):
An increase of X isn't an increase of X in light.
Arvin Ganesan (00:20:47):
It's X to the fourth.
Arvin Ganesan (00:20:49):
So the hotter you get,
Arvin Ganesan (00:20:50):
the more light you emit,
Arvin Ganesan (00:20:53):
which means more electricity you can convert back into electricity.
Arvin Ganesan (00:20:56):
Yeah.
Silas Mähner (00:20:57):
Okay, got it.
Silas Mähner (00:20:58):
And then broadly speaking for other people who may not be familiar with this,
Silas Mähner (00:21:02):
the principle would be when there's abundant extra solar or wind energy,
Silas Mähner (00:21:06):
you can take that at a very cheap rate because you have too much of it,
Silas Mähner (00:21:09):
right?
Silas Mähner (00:21:09):
And you can purchase at that price and then discharge at a
Silas Mähner (00:21:13):
at a price that's also convenient.
Arvin Ganesan (00:21:15):
And you can pull massive amounts of electricity in like five minute intervals.
Arvin Ganesan (00:21:20):
It doesn't have to be a dip for an hour.
Arvin Ganesan (00:21:23):
You can kind of grab the electricity as supply exceeds demand for five, 10, 20, 30 minutes.
Silas Mähner (00:21:30):
And it's as fast as you can just turn it on basically straight away to bring the power back.
Silas Mähner (00:21:35):
So that's interesting because a lot of people,
Silas Mähner (00:21:37):
if you're not familiar,
Silas Mähner (00:21:38):
if I'm not mistaken,
Silas Mähner (00:21:41):
combined cycle gas usually was like peaker plants,
Silas Mähner (00:21:43):
right?
Silas Mähner (00:21:43):
People would spin these things up,
Silas Mähner (00:21:44):
but they still take,
Silas Mähner (00:21:45):
I think,
Silas Mähner (00:21:45):
15 minutes or something to get running,
Silas Mähner (00:21:47):
if I'm not mistaken.
Silas Mähner (00:21:49):
So that's really like crazy efficient.
Silas Mähner (00:21:51):
That's helpful.
Silas Mähner (00:21:52):
I think that's a good summary.
Silas Mähner (00:21:52):
Again, if people want more into the tech, go check out that other episode of another podcast.
Silas Mähner (00:21:58):
I want to talk about fundraising.
Silas Mähner (00:21:59):
I mean, you guys came out of stealth basically announcing, I think it's a $19 million seed round, right?
Silas Mähner (00:22:04):
Huge.
Silas Mähner (00:22:05):
I think you had Breakthrough Energy Ventures and a couple other big names.
Silas Mähner (00:22:08):
How did you do that?
Silas Mähner (00:22:09):
How do you go from this?
Silas Mähner (00:22:11):
What stage of technology proof did you have to go and raise this large of a seed round?
Arvin Ganesan (00:22:16):
Yeah, so first, credit goes to Ashego and Henry.
Arvin Ganesan (00:22:19):
He's been working on this for the last 10 years, right?
Arvin Ganesan (00:22:22):
So he finished his PhD at MIT.
Arvin Ganesan (00:22:25):
He had a professorship at Georgia Tech.
Arvin Ganesan (00:22:27):
He'd been working on the basis of this technology for the last 10 years.
Arvin Ganesan (00:22:31):
And now we have all the IP rights for it, I should be very clear.
Arvin Ganesan (00:22:35):
But it's not like I came into this job,
Arvin Ganesan (00:22:40):
thought of this,
Arvin Ganesan (00:22:40):
and then just went to the market and got it,
Arvin Ganesan (00:22:42):
right?
Arvin Ganesan (00:22:42):
There's a lot of work
Arvin Ganesan (00:22:44):
that happened in the background over the last 10 years.
Arvin Ganesan (00:22:47):
The reason we were very successful with this is a couple of things.
Arvin Ganesan (00:22:52):
First,
Arvin Ganesan (00:22:52):
me as the CEO and Dr.
Arvin Ganesan (00:22:55):
Henry as the CTO,
Arvin Ganesan (00:22:58):
it was a really good combination of markets and management.
Arvin Ganesan (00:23:03):
which I had and scientific background, which he had.
Arvin Ganesan (00:23:07):
I think a lot of companies coming out of Stealth have one or the other,
Arvin Ganesan (00:23:10):
and we were able to translate the power of what this product does into a deep
Arvin Ganesan (00:23:16):
understanding of who our customer is.
Arvin Ganesan (00:23:18):
So that package really helped and people really matter.
Arvin Ganesan (00:23:21):
The dynamic that we had,
Arvin Ganesan (00:23:23):
the friendship that we had was helpful in conveying the seriousness of this team
Arvin Ganesan (00:23:30):
and the functionality of the team.
Arvin Ganesan (00:23:32):
The second is we made a decision very early on.
Arvin Ganesan (00:23:37):
This battery could be used for heat, right?
Arvin Ganesan (00:23:39):
We could take all this heat and use it for industrial processes like cement or steel.
Arvin Ganesan (00:23:46):
But I made a decision very early on that we want to be very narrowly focused on electricity,
Arvin Ganesan (00:23:52):
even though that meant leaving us another market untouched.
Arvin Ganesan (00:23:57):
And the reason that was helpful is when you're a startup coming out of stealth and
Arvin Ganesan (00:24:00):
doing your first raise,
Arvin Ganesan (00:24:02):
having that myopic focus,
Arvin Ganesan (00:24:04):
it's not only really good for resource allocation for the limited team that you have,
Arvin Ganesan (00:24:09):
but it also conveys a sense of clarity to your fundraisers.
Arvin Ganesan (00:24:14):
The third and final reason I think we're successful is we don't exaggerate.
Arvin Ganesan (00:24:20):
I think that there is a sense that in order to fundraise, you need to
Arvin Ganesan (00:24:26):
sell the world on your dreams, but the reality is kind of hidden.
Arvin Ganesan (00:24:30):
I think we were fairly honest and straightforward about the possibilities of what
Arvin Ganesan (00:24:34):
this could mean for the world.
Arvin Ganesan (00:24:36):
But also, Dan, this is the first of these types of things to ever be built.
Arvin Ganesan (00:24:40):
When you're building something new, it's hard.
Arvin Ganesan (00:24:42):
So I think that there was some hubris that we didn't have going into this process,
Arvin Ganesan (00:24:47):
which was,
Arvin Ganesan (00:24:48):
I think,
Arvin Ganesan (00:24:48):
helpful for us.
Silas Mähner (00:24:51):
I like that a lot.
Silas Mähner (00:24:51):
There's a lot of interesting things I'd maybe like to unpack further.
Silas Mähner (00:24:55):
First, I want to understand, to clarify, did you have a pilot project done early on?
Silas Mähner (00:25:00):
This was kind of just like, hey, we've got this in lab.
Arvin Ganesan (00:25:04):
We had lab scale demonstrations, but they're really very, very small.
Arvin Ganesan (00:25:09):
Right now we're building a large demo.
Arvin Ganesan (00:25:11):
Yeah.
Silas Mähner (00:25:12):
Okay.
Silas Mähner (00:25:13):
And I guess just out of curiosity,
Silas Mähner (00:25:15):
maybe you can't speak to – maybe this is not applicable to other companies,
Silas Mähner (00:25:19):
but if you're building in hardware –
Silas Mähner (00:25:21):
something like this,
Silas Mähner (00:25:23):
is that $19 million round,
Silas Mähner (00:25:25):
is that going to be more than sufficient to handle the pilot project?
Silas Mähner (00:25:29):
Do you need to bring in other types of financing, other ways that you get this built to really prove it?
Silas Mähner (00:25:34):
Because if this pilot doesn't work, then you're up a creek without a paddle.
Silas Mähner (00:25:39):
But this obviously gives you the opportunity to prove it,
Silas Mähner (00:25:42):
and then you can go raise a substantial round because now it's de-risked,
Silas Mähner (00:25:45):
right?
Arvin Ganesan (00:25:45):
Yeah, right.
Arvin Ganesan (00:25:46):
I think that I don't know if there's a one size fits all answer to that.
Arvin Ganesan (00:25:50):
I think that how you fundraise has to do with different technical milestones that
Arvin Ganesan (00:25:55):
you want to achieve,
Arvin Ganesan (00:25:56):
different value inflection points that you can create for your investors.
Arvin Ganesan (00:26:00):
And when you do the next round,
Arvin Ganesan (00:26:02):
and it has to do with kind of understanding where the risk stands from a technology
Arvin Ganesan (00:26:06):
stack perspective.
Arvin Ganesan (00:26:07):
Look, in an ideal world, everybody would get as much money as the world had to do their technology.
Arvin Ganesan (00:26:13):
But it becomes being strategic about your decisions on when and how much to raise.
Arvin Ganesan (00:26:20):
I think that raising too much money right away is not always good.
Arvin Ganesan (00:26:25):
because that comes at a certain cost if you need to raise another round,
Arvin Ganesan (00:26:31):
if you don't hit your milestones.
Arvin Ganesan (00:26:32):
I think in general,
Arvin Ganesan (00:26:33):
going slower,
Arvin Ganesan (00:26:35):
more conservatively with respect to your burn rate and your technical ambitions is
Arvin Ganesan (00:26:41):
a really wise place to go,
Arvin Ganesan (00:26:43):
even though the markets might be pushing you to like,
Arvin Ganesan (00:26:45):
Raise as much as you can and hire as many people as you want.
Arvin Ganesan (00:26:49):
It becomes really difficult because growing too fast becomes a people problem.
Arvin Ganesan (00:26:57):
The biggest opportunity and risk a small startup has is the people it hires and its
Arvin Ganesan (00:27:02):
ability to retain really good people.
Silas Mähner (00:27:05):
Yeah, we'll get to that in a second.
Silas Mähner (00:27:07):
That's my favorite topic, obviously.
Silas Mähner (00:27:08):
But one thing I always think about when I see larger rounds like this,
Silas Mähner (00:27:13):
obviously,
Silas Mähner (00:27:14):
it's not like you're a software company raising a $19 million C round.
Silas Mähner (00:27:17):
That'd be absurd.
Silas Mähner (00:27:18):
But when you've raised this much money at the beginning,
Silas Mähner (00:27:22):
what are the mindset pieces that you try to maintain to make sure that you don't
Silas Mähner (00:27:27):
just blow through?
Silas Mähner (00:27:27):
Because it could probably be easy to say,
Silas Mähner (00:27:29):
okay,
Silas Mähner (00:27:29):
it looks like we're good and you maybe get a little sloppy.
Silas Mähner (00:27:32):
What are the mindset pieces that you maintain as you go?
Arvin Ganesan (00:27:36):
well it's i mean first i think that uh some of this stuff really needs to be top
Arvin Ganesan (00:27:41):
down so for instance a um i live in washington dc um but i'm i've spent a fair bit
Arvin Ganesan (00:27:47):
of time in boston where our demo is i stay with my parents i stay in the the same
Arvin Ganesan (00:27:52):
childhood the same childhood bedroom that i had growing up with like a star trek
Arvin Ganesan (00:27:57):
the next generation poster above my twin size bed so like
Arvin Ganesan (00:28:01):
There's no ritz here.
Arvin Ganesan (00:28:03):
So it's, I think, really important to demonstrate that through action.
Arvin Ganesan (00:28:09):
But at the same time, there's going to be places where time is your worst enemy.
Arvin Ganesan (00:28:15):
And you need to understand the trade-offs between spending money and losing time.
Arvin Ganesan (00:28:22):
I might be able to get a part that costs 20% more,
Arvin Ganesan (00:28:26):
but it has a two-week lead time as opposed to a six-month lead time.
Arvin Ganesan (00:28:31):
It is really important to be strategic in thinking about the value of money as it relates to time.
Arvin Ganesan (00:28:39):
So I think the basic motto is don't be penny wise, pound foolish.
Arvin Ganesan (00:28:45):
That austerity kind of starts from the top.
Arvin Ganesan (00:28:48):
We're too small to be anything but a fairly austere company when it comes to how we
Arvin Ganesan (00:28:54):
interact with the world.
Silas Mähner (00:28:56):
Yeah.
Silas Mähner (00:28:56):
I mean, I think this part of this just comes with experience, right?
Silas Mähner (00:28:59):
A lot of,
Silas Mähner (00:28:59):
if you're a first time founder,
Silas Mähner (00:29:01):
just out of,
Silas Mähner (00:29:02):
you know,
Silas Mähner (00:29:02):
out of your PhD or something,
Silas Mähner (00:29:03):
it might be a little bit easier to just kind of not understand what,
Silas Mähner (00:29:07):
where to be aware and kind of
Silas Mähner (00:29:09):
the guardrails where you've got to not run into them and you may not have the right advisors.
Silas Mähner (00:29:13):
So I assume that a lot of it comes down to the founding team and the executives.
Silas Mähner (00:29:18):
You understand you've had some experience probably seeing other people, right?
Arvin Ganesan (00:29:21):
And there's areas where under-investing is going to cause big problems down the road.
Arvin Ganesan (00:29:27):
So people, right?
Arvin Ganesan (00:29:30):
Getting the right people, it's really important.
Arvin Ganesan (00:29:33):
How you set up legal contracts and the structure,
Arvin Ganesan (00:29:37):
the kind of bones of your company is really important because you're going to be
Arvin Ganesan (00:29:41):
doing a fundraise in a couple of years.
Arvin Ganesan (00:29:42):
And making sure your company is set up right to succeed is really important.
Arvin Ganesan (00:29:48):
And doing it early is much easier than doing it like when you're 100, 200 person company.
Silas Mähner (00:29:56):
Yeah.
Silas Mähner (00:29:57):
Let's do this now.
Silas Mähner (00:29:58):
I think we've talked about, you've mentioned people several times.
Silas Mähner (00:30:01):
Let's get into it.
Silas Mähner (00:30:02):
I guess I want to try to do this at a high level summary.
Silas Mähner (00:30:07):
Tell me the, let's call it the story of building the company from a people perspective, right?
Silas Mähner (00:30:12):
Early days, and then you get some more people in.
Silas Mähner (00:30:14):
How does that look?
Silas Mähner (00:30:15):
What are the challenges?
Silas Mähner (00:30:16):
And then we'll go further from there.
Arvin Ganesan (00:30:18):
So the story starts before me.
Arvin Ganesan (00:30:20):
I was off at Apple while this happened.
Arvin Ganesan (00:30:26):
It started about four years ago,
Arvin Ganesan (00:30:29):
three years ago,
Arvin Ganesan (00:30:30):
with Ashe essentially deciding he wants to spin this company out of MIT.
Arvin Ganesan (00:30:36):
And then it was called Thermal Battery Corporation.
Arvin Ganesan (00:30:38):
He got a two-year leave of absence.
Arvin Ganesan (00:30:42):
So this is two years ago, two years leave of absence from MIT.
Arvin Ganesan (00:30:46):
He recruited a couple of amazing people.
Arvin Ganesan (00:30:49):
So he brought with him his,
Arvin Ganesan (00:30:53):
one of the students that he was working with at MIT,
Arvin Ganesan (00:30:55):
he brought with him another PhD student
Arvin Ganesan (00:30:58):
who helped stand up some important facilities at Argonne National Lab,
Arvin Ganesan (00:31:02):
and then another PhD from Georgia Tech.
Arvin Ganesan (00:31:05):
So there's a small core team of engineers that he brought on right away.
Silas Mähner (00:31:10):
Did he already know all those people from his time with MIT?
Silas Mähner (00:31:13):
How did he come to know those folks?
Silas Mähner (00:31:14):
Yeah.
Arvin Ganesan (00:31:15):
yeah those are all personal relationships he had people who are willing to take a
Arvin Ganesan (00:31:20):
risk on him and his and his technology which is awesome and they're the core of the
Arvin Ganesan (00:31:25):
company right now so the company kind of grew from six seven uh up to a team of 17
Arvin Ganesan (00:31:33):
people now the vast majority of whom are engineers
Arvin Ganesan (00:31:36):
Really,
Arvin Ganesan (00:31:37):
this was about making sure the team fit was right because the thesis or the idea
Arvin Ganesan (00:31:41):
was when you have a team this small,
Arvin Ganesan (00:31:43):
you really need to have quite functional team and people whose personalities gel
Arvin Ganesan (00:31:48):
well together.
Arvin Ganesan (00:31:49):
So we really over-indexed on the engineering side on personality fits as well as obviously backgrounds.
Arvin Ganesan (00:31:55):
We wanted to make sure that we're not creating chaos when chaos is in the environment around us.
Arvin Ganesan (00:32:01):
We don't need to be creating it.
Silas Mähner (00:32:03):
Yeah.
Silas Mähner (00:32:04):
How many of these people that you recruited on the second, let's call it the second stage here.
Silas Mähner (00:32:11):
How many of them took a lot of convincing to kind of join this or the stage or were
Silas Mähner (00:32:14):
they just like,
Silas Mähner (00:32:15):
Oh man,
Silas Mähner (00:32:15):
this is perfect.
Silas Mähner (00:32:16):
I've been interested.
Silas Mähner (00:32:16):
Like talk to me more about that.
Arvin Ganesan (00:32:19):
You know, I think that there's in you, you, you, you have a lived experience on this.
Arvin Ganesan (00:32:23):
I think there's an appetite for people to do big tech that solves or addresses climate change.
Arvin Ganesan (00:32:32):
So it is, sure, it's hard, right?
Arvin Ganesan (00:32:35):
Convincing people to leave any sort of job where they're modestly happy is difficult.
Arvin Ganesan (00:32:39):
But when you're mission aligned,
Arvin Ganesan (00:32:41):
and it's so,
Arvin Ganesan (00:32:42):
in my view,
Arvin Ganesan (00:32:43):
clear why what we're doing is at the heart of decarbonizing the world,
Arvin Ganesan (00:32:50):
when you find the type of person who that's motivating to,
Arvin Ganesan (00:32:52):
like,
Arvin Ganesan (00:32:53):
what else do you want?
Arvin Ganesan (00:32:54):
So the process is always challenging for identifying those people.
Arvin Ganesan (00:32:59):
But if you have a
Arvin Ganesan (00:33:02):
you know solves a problem very head-on like this types of people who are interested
Silas Mähner (00:33:08):
are going to be really interested or not yeah they either usually are they aren't
Silas Mähner (00:33:13):
i'm always curious because uh depending on where you look sometimes these people
Silas Mähner (00:33:18):
like they are interested but it takes a while for them to warm up to the idea
Silas Mähner (00:33:21):
because they're especially if they're engineers they tend to be very analytical
Silas Mähner (00:33:24):
about what they'll do so
Silas Mähner (00:33:26):
With a lot of this talent, where did they come from?
Silas Mähner (00:33:28):
Did they come from existing larger companies, other startups?
Silas Mähner (00:33:31):
Were they in academia?
Silas Mähner (00:33:32):
Where'd they come from?
Arvin Ganesan (00:33:33):
So let's see, we got one guy out of his... So a lot of these folks are mechanical engineers.
Arvin Ganesan (00:33:38):
And the reason why we have selected so much for that is this is about building things with your hands.
Arvin Ganesan (00:33:44):
And that particular background...
Arvin Ganesan (00:33:48):
really lends itself to building something interesting.
Arvin Ganesan (00:33:51):
So we recruited one fantastic person straight out of his master's program at Wisconsin.
Arvin Ganesan (00:34:00):
Another person straight out of the master's, she came out of MIT.
Arvin Ganesan (00:34:04):
We brought somebody in who'd done huge capital projects for the military,
Arvin Ganesan (00:34:09):
somebody who worked for a large tech company,
Arvin Ganesan (00:34:11):
and so on and so on.
Arvin Ganesan (00:34:13):
I don't want to go through all their backgrounds and bore everybody, but
Arvin Ganesan (00:34:17):
I think the common thread is we're looking for people who like to build things and
Arvin Ganesan (00:34:21):
have experience building things themselves.
Silas Mähner (00:34:24):
So it sounds like there's a relatively wide range of kind of it's called origin
Silas Mähner (00:34:29):
points where they came from and then went to the fourth power.
Silas Mähner (00:34:32):
Out of curiosity, how did you find these people?
Silas Mähner (00:34:34):
Did you do a lot of it on your own?
Silas Mähner (00:34:35):
You engage another firm?
Silas Mähner (00:34:36):
Like what was the kind of biggest thing that you did that was super helpful?
Arvin Ganesan (00:34:40):
So a lot of it was word of mouth,
Arvin Ganesan (00:34:44):
as well as kind of utilizing searches for,
Arvin Ganesan (00:34:48):
not executive searches,
Arvin Ganesan (00:34:49):
but using traditional LinkedIn type things to find certain characteristics.
Arvin Ganesan (00:34:54):
And it's hard.
Arvin Ganesan (00:34:56):
It is a full-time job to find these people, as you know.
Arvin Ganesan (00:35:00):
And,
Arvin Ganesan (00:35:00):
you know,
Arvin Ganesan (00:35:01):
being at the stage we were and we are,
Arvin Ganesan (00:35:04):
we just had to kind of scrap through it and,
Silas Mähner (00:35:06):
you know,
Arvin Ganesan (00:35:07):
put the kids to bed and open up the computer and just...
Silas Mähner (00:35:12):
Yeah, it is a lot of work.
Silas Mähner (00:35:13):
I'm always curious because this stage is usually where people start to get to the
Silas Mähner (00:35:17):
point where they'll seek external support because you just don't have time.
Silas Mähner (00:35:22):
Before,
Silas Mähner (00:35:23):
you kind of have to make it work because there's no money in the bank really to go
Silas Mähner (00:35:26):
do it,
Silas Mähner (00:35:26):
but then you get to a certain point and you can kind of outsource that full-time job,
Silas Mähner (00:35:29):
if you will.
Silas Mähner (00:35:30):
But
Silas Mähner (00:35:31):
I want to know how you, you talked about the importance of the cultures fitting together.
Silas Mähner (00:35:35):
Okay.
Silas Mähner (00:35:36):
This is usually extremely difficult at the beginning, right?
Silas Mähner (00:35:38):
You may be five, six people.
Silas Mähner (00:35:39):
It's relatively easy.
Silas Mähner (00:35:40):
You,
Silas Mähner (00:35:40):
you all interview each other,
Silas Mähner (00:35:42):
make sure everything's good,
Silas Mähner (00:35:43):
but you start to get to,
Silas Mähner (00:35:44):
you know,
Silas Mähner (00:35:45):
10,
Silas Mähner (00:35:45):
15 people beyond that.
Silas Mähner (00:35:46):
It can be challenging.
Silas Mähner (00:35:47):
So how do you make sure that you maintain a culture fit across folks without being
Silas Mähner (00:35:52):
too rigid about,
Silas Mähner (00:35:53):
we only want this type of,
Silas Mähner (00:35:54):
you know,
Silas Mähner (00:35:56):
engineering,
Silas Mähner (00:35:56):
big brain type.
Silas Mähner (00:35:57):
We want, we want a couple of other folks.
Arvin Ganesan (00:35:59):
Yeah, right.
Arvin Ganesan (00:36:00):
This is the trade-off between decision by committee and decision by kind of fiat.
Arvin Ganesan (00:36:06):
So one of the things we do,
Arvin Ganesan (00:36:07):
since we do have such a large team,
Arvin Ganesan (00:36:09):
and I'm going to speak specifically on the engineering side,
Arvin Ganesan (00:36:12):
we do interviews with panels,
Arvin Ganesan (00:36:15):
with the engineering leaders,
Arvin Ganesan (00:36:17):
so all the engineering leaders.
Arvin Ganesan (00:36:18):
And for candidates who we kind of move quite forward with,
Arvin Ganesan (00:36:23):
we ask them to come in and present to the entire team.
Arvin Ganesan (00:36:26):
And what they present about,
Arvin Ganesan (00:36:27):
it doesn't really,
Arvin Ganesan (00:36:29):
it doesn't have to be,
Arvin Ganesan (00:36:31):
in fact,
Arvin Ganesan (00:36:32):
it is not anything related to our product,
Arvin Ganesan (00:36:35):
but it's something interesting that they want to present about that shows their
Arvin Ganesan (00:36:40):
breadth as an engineer.
Arvin Ganesan (00:36:42):
It has nothing to do with the work that we do,
Arvin Ganesan (00:36:44):
but it's about showing us how the person thinks in the thing that they're the most
Arvin Ganesan (00:36:49):
comfortable working on.
Arvin Ganesan (00:36:50):
And the entire team engages,
Arvin Ganesan (00:36:52):
they ask questions,
Arvin Ganesan (00:36:53):
and we get a really good sense of how people think that way.
Silas Mähner (00:36:57):
Yeah, I really like that.
Silas Mähner (00:36:59):
That's pretty fascinating.
Silas Mähner (00:37:00):
I think it's helpful to not have to be put in a bucket,
Silas Mähner (00:37:04):
especially when you're doing an interview process.
Silas Mähner (00:37:05):
Usually they want you to be a very specific person,
Silas Mähner (00:37:08):
but to recognize,
Silas Mähner (00:37:09):
hey,
Silas Mähner (00:37:10):
there's going to be other things beyond that that you are interested in.
Silas Mähner (00:37:12):
Let's talk about those just to kind of get an idea of who you are.
Silas Mähner (00:37:15):
I really like that.
Silas Mähner (00:37:16):
I've never heard that one before.
Silas Mähner (00:37:17):
So
Silas Mähner (00:37:18):
I'm going to maybe mention that to some of my partners.
Arvin Ganesan (00:37:23):
No, it's really important that they have the qualifications to do the job.
Arvin Ganesan (00:37:28):
Of course.
Arvin Ganesan (00:37:29):
Those are table stakes.
Arvin Ganesan (00:37:31):
But letting them talk about engineering challenges and problem solving in however they want to.
Arvin Ganesan (00:37:38):
Yeah, other ways.
Arvin Ganesan (00:37:39):
It also allows people with different communication styles and different ways of
Arvin Ganesan (00:37:44):
processing information to have their best moment.
Silas Mähner (00:37:48):
Yeah, I like this a lot.
Silas Mähner (00:37:49):
I think sometimes it's very difficult because the interview process can be boiled
Silas Mähner (00:37:54):
down to such short moments that you have a very small data set to judge off of.
Silas Mähner (00:38:02):
It's kind of like podcasting.
Silas Mähner (00:38:03):
Podcasting is long form most of the time and you have all these things.
Silas Mähner (00:38:06):
Maybe it's not all relevant to every listener,
Silas Mähner (00:38:08):
but you start to get a really feel of the different texture that the person has
Silas Mähner (00:38:13):
rather than a 20-minute phone call and they say one thing that you don't like and boom,
Silas Mähner (00:38:17):
they're out.
Silas Mähner (00:38:17):
Totally.
Silas Mähner (00:38:19):
Yeah.
Silas Mähner (00:38:19):
So I like that a lot.
Silas Mähner (00:38:20):
Yeah, exactly.
Silas Mähner (00:38:23):
And it's not,
Silas Mähner (00:38:24):
it's not,
Silas Mähner (00:38:24):
it's a lot of pressure and it can also kind of give people nerves,
Silas Mähner (00:38:26):
you know,
Silas Mähner (00:38:27):
depending on the person.
Silas Mähner (00:38:28):
One thing we've talked about before when we were kind of preparing for this was you
Silas Mähner (00:38:32):
have a couple points around utility models.
Silas Mähner (00:38:36):
So I want to talk about how much of fourth power is,
Silas Mähner (00:38:40):
let's call it a good idea because of its fit with existing utility models.
Silas Mähner (00:38:44):
Can you talk more about that?
Silas Mähner (00:38:45):
You have a kind of some thoughts here.
Arvin Ganesan (00:38:46):
Yeah, yeah, yeah.
Arvin Ganesan (00:38:47):
Thanks.
Arvin Ganesan (00:38:48):
So I think that ultimately, something like fourth power, it's great for deployment.
Arvin Ganesan (00:38:56):
In addition to being a great idea, it's great for deployment.
Arvin Ganesan (00:38:59):
And let me kind of unpack why that matters.
Arvin Ganesan (00:39:02):
And this largely comes down to some pretty arcane rules about vertically integrated
Arvin Ganesan (00:39:08):
utilities in the United States.
Arvin Ganesan (00:39:10):
Utilities are allowed to earn revenue on a certain amount of money, on a certain amount of costs.
Arvin Ganesan (00:39:17):
they're able to earn a rate of return on the capital costs of things they build to serve electricity.
Arvin Ganesan (00:39:23):
They're not allowed to earn a rate of return on the operating of those assets.
Arvin Ganesan (00:39:29):
They would like,
Arvin Ganesan (00:39:30):
in an ideal world,
Arvin Ganesan (00:39:31):
as much capital going into projects as possible and as little operating expense or
Arvin Ganesan (00:39:37):
OPEX going into those projects.
Arvin Ganesan (00:39:39):
So if you build a gas plant, for example, you're going to spend X of capital to build that plant.
Arvin Ganesan (00:39:46):
or a vertically integrated utility would.
Arvin Ganesan (00:39:48):
And they're going to earn a rate of return on how much it costs to build a gas plant.
Arvin Ganesan (00:39:52):
But the fuel, they're not going to earn a rate of return on.
Arvin Ganesan (00:39:56):
And the addition of the capex and opex goes into what's called the revenue requirement,
Arvin Ganesan (00:40:01):
which is the total amount of money that they can spend on servicing electricity
Arvin Ganesan (00:40:05):
needs for the state over that year.
Arvin Ganesan (00:40:08):
So in an ideal world, the capital is high and the operating expense is low.
Arvin Ganesan (00:40:13):
But that is anathema that is not congruent with a lot of fossil generation right now, right?
Arvin Ganesan (00:40:19):
You have, sure, the cost of a coal plant is high.
Arvin Ganesan (00:40:23):
Sure, the cost of a gas plant might be high, and that's good.
Arvin Ganesan (00:40:26):
But there's also high operating costs.
Arvin Ganesan (00:40:28):
What we bring in and why 4th Power,
Arvin Ganesan (00:40:31):
I think,
Arvin Ganesan (00:40:31):
really fits into these core models is our what we call CapEx to OpEx ratio is great
Arvin Ganesan (00:40:39):
for the existing business model.
Arvin Ganesan (00:40:41):
The vast majority of the cost of our battery is the construction of it.
Arvin Ganesan (00:40:45):
There's very little cost to maintain.
Arvin Ganesan (00:40:47):
There's very little people time you need to maintain it.
Arvin Ganesan (00:40:51):
And the same is true for the cost of the renewables to power it.
Arvin Ganesan (00:40:55):
So ultimately,
Arvin Ganesan (00:40:56):
we see our battery when paired with renewables,
Arvin Ganesan (00:40:59):
for example,
Arvin Ganesan (00:41:00):
to really fit into how utilities make money right now.
Arvin Ganesan (00:41:04):
It also has this really important ancillary side effect of being cheap for customers.
Arvin Ganesan (00:41:09):
And also serving clean and reliable power.
Arvin Ganesan (00:41:13):
So it fits into all the things that utilities primarily care about.
Arvin Ganesan (00:41:17):
Lights on, electricity cheap, and now clean.
Silas Mähner (00:41:22):
This is fascinating.
Silas Mähner (00:41:23):
So you're saying that just because of the rules,
Silas Mähner (00:41:26):
since it's regulated,
Silas Mähner (00:41:27):
like they can't just make money any way they want.
Silas Mähner (00:41:29):
They have the specific rules.
Silas Mähner (00:41:30):
Yeah.
Silas Mähner (00:41:31):
They are open to spending lots of money up front,
Silas Mähner (00:41:34):
but as long as it doesn't cost a lot to operate because they don't make any margin
Silas Mähner (00:41:37):
on the operation.
Silas Mähner (00:41:39):
So it's really interesting.
Silas Mähner (00:41:41):
I mean,
Silas Mähner (00:41:42):
I don't know if this applies to other things,
Silas Mähner (00:41:43):
but it's probably worth noting for people listening,
Silas Mähner (00:41:45):
especially if you're building something in the space.
Silas Mähner (00:41:48):
That you maybe have low CapEx,
Silas Mähner (00:41:50):
but if your OpEx is high,
Silas Mähner (00:41:51):
you're probably screwed in the case of this current model.
Arvin Ganesan (00:41:54):
It doesn't work with how utilities make money, right?
Arvin Ganesan (00:41:56):
There's other markets they can work on, right?
Arvin Ganesan (00:41:58):
They can work in non-vertically integrated markets.
Arvin Ganesan (00:42:01):
They can go directly to a wholesale market,
Arvin Ganesan (00:42:03):
in which case that might be a very good,
Arvin Ganesan (00:42:06):
great place for them to be.
Arvin Ganesan (00:42:08):
But for a vertically integrated utility or a state-run utility like you see in Asia,
Arvin Ganesan (00:42:13):
for example,
Arvin Ganesan (00:42:14):
it follows this thing that's called the revenue requirement model.
Silas Mähner (00:42:19):
Okay.
Silas Mähner (00:42:20):
One thing I just want to understand, I think I've got this, but can you explain how you interact?
Silas Mähner (00:42:27):
Let's say, let's kind of fast forward like five, 10 years or whatever.
Silas Mähner (00:42:29):
The technology is all proven.
Silas Mähner (00:42:31):
It's just kind of like everybody's doing this, right?
Silas Mähner (00:42:34):
How does this work?
Silas Mähner (00:42:35):
How do you interact with all the other partners?
Silas Mähner (00:42:37):
Are you just a technology that you offer kind of like Tesla offers their battery packs to developers?
Silas Mähner (00:42:43):
Are you actually going and working directly with utilities to develop the projects on their behalf?
Silas Mähner (00:42:47):
How does the model play out?
Arvin Ganesan (00:42:50):
So I don't know.
Arvin Ganesan (00:42:52):
I don't know.
Arvin Ganesan (00:42:53):
I think that there are like three or four paths that we still have to choose from.
Arvin Ganesan (00:42:58):
We could be an IPP,
Arvin Ganesan (00:43:00):
an independent power producer,
Arvin Ganesan (00:43:01):
where we are generating the electricity and we're just selling it onto the grid
Arvin Ganesan (00:43:06):
when it makes sense.
Arvin Ganesan (00:43:07):
That's one path.
Arvin Ganesan (00:43:08):
We could sell to utilities and utilities could own the asset.
Arvin Ganesan (00:43:14):
We could sell services directly to utilities.
Arvin Ganesan (00:43:18):
And then there's like two or three others.
Arvin Ganesan (00:43:20):
The reason it doesn't make sense for us to choose a path quite yet is that the
Arvin Ganesan (00:43:24):
markets are absolutely changing under our feet right now.
Arvin Ganesan (00:43:28):
And there's no real need to choose a lane in a revenue generation lane at this
Arvin Ganesan (00:43:33):
early stage of being a company.
Arvin Ganesan (00:43:36):
So it's obviously something that I think about quite a bit and I talk to partners
Arvin Ganesan (00:43:41):
about quite a bit,
Arvin Ganesan (00:43:42):
but we're very purposefully not choosing a lane before we have to.
Silas Mähner (00:43:48):
I like that a lot.
Silas Mähner (00:43:49):
That's quite interesting.
Silas Mähner (00:43:50):
I mean,
Silas Mähner (00:43:51):
I can imagine it poses maybe a few challenges when you're debating who you hire
Silas Mähner (00:43:55):
because you're like,
Silas Mähner (00:43:56):
maybe we go this direction,
Silas Mähner (00:43:57):
maybe we don't know.
Silas Mähner (00:43:58):
That might be helpful, but it's probably at the end of the day, like you say, it's not the deal breaker.
Silas Mähner (00:44:02):
It's not the end of the world if you don't because you want to figure out once
Silas Mähner (00:44:06):
we've gone through our pilot,
Silas Mähner (00:44:07):
once we kind of have the next stage,
Silas Mähner (00:44:09):
then we can assess where things stand and then go from there.
Arvin Ganesan (00:44:13):
Yeah, and the models you need to use in this space are not one size fits all, right?
Arvin Ganesan (00:44:19):
So how you sell into the EU,
Arvin Ganesan (00:44:23):
for example,
Arvin Ganesan (00:44:23):
or Australia is totally different than how you'd sell into a vertically integrated utility.
Arvin Ganesan (00:44:29):
So there is a lot of value in having as much flexibility from a business model
Arvin Ganesan (00:44:34):
perspective as you can to be able to tackle multiple markets.
Silas Mähner (00:44:40):
That's probably a point for other founders in any market and climate to focus on is
Silas Mähner (00:44:45):
don't just have one potential business model.
Silas Mähner (00:44:48):
Flex your brain a bit and figure out the different ways you could make money.
Silas Mähner (00:44:51):
I have noticed with actually a number of the companies that Breakthrough has backed
Silas Mähner (00:44:56):
is that this is the case,
Silas Mähner (00:44:57):
right?
Silas Mähner (00:44:57):
There's kind of multiple revenue generation opportunities in the future.
Silas Mähner (00:45:00):
You don't have to pick early on.
Silas Mähner (00:45:01):
So I like that a lot.
Silas Mähner (00:45:02):
Maybe a theme for people to notice.
Silas Mähner (00:45:05):
One thing I do want to touch on briefly,
Silas Mähner (00:45:06):
which you mentioned early on,
Silas Mähner (00:45:08):
was you need low cost and I think you said simple supply chain.
Silas Mähner (00:45:13):
Yeah.
Silas Mähner (00:45:14):
Can you just talk just high level on your technology and the supply chain there?
Arvin Ganesan (00:45:18):
yeah so the the guts of the battery is graphite right so the the energy storage
Arvin Ganesan (00:45:24):
block we use is made out of graphite when we you know when you think of a graphite
Arvin Ganesan (00:45:29):
you think about those number two pencils that you used for standardized tests but
Arvin Ganesan (00:45:33):
trust me it's more complicated than that what graphite is is it's just a derivative
Arvin Ganesan (00:45:37):
of carbon it's a type of processed carbon and carbon is the 10th most abundant
Arvin Ganesan (00:45:43):
element in the world
Arvin Ganesan (00:45:45):
coal is carbon.
Arvin Ganesan (00:45:47):
There are all different kinds of carbon that can be reformulated into the type of
Arvin Ganesan (00:45:52):
storage blocks that we're utilizing.
Arvin Ganesan (00:45:54):
So it's not like we're reliant on graphite or carbon to only be available from
Arvin Ganesan (00:46:00):
China or mine from Chile or wherever.
Arvin Ganesan (00:46:05):
It is an abundant form in every country in the world.
Arvin Ganesan (00:46:08):
So that's what I mean when I say a simple and easily accessible supply chain.
Arvin Ganesan (00:46:13):
We're not constrained by geography or supply.
Silas Mähner (00:46:17):
Yeah, which is a huge issue with other energy storage systems currently.
Silas Mähner (00:46:21):
That's interesting, especially it plays well into the idea
Silas Mähner (00:46:24):
that there's a lot of companies building carbon capture of various sorts,
Silas Mähner (00:46:27):
and perhaps you can play a role as an off-taker in some of those,
Silas Mähner (00:46:31):
right?
Silas Mähner (00:46:31):
Because there is a need in the future, but that's cool.
Silas Mähner (00:46:36):
Last thing,
Silas Mähner (00:46:36):
I guess just broadly speaking,
Silas Mähner (00:46:40):
this might be a big question for the last couple of minutes we have here,
Silas Mähner (00:46:42):
but
Silas Mähner (00:46:43):
Broadly speaking,
Silas Mähner (00:46:44):
do you have any particular areas where you see there to be opportunity kind of
Silas Mähner (00:46:48):
going forward?
Silas Mähner (00:46:48):
You have a pretty broad perspective on the landscape.
Silas Mähner (00:46:51):
It could be opportunities where we need more innovation to achieve the
Silas Mähner (00:46:56):
decarbonization goals,
Silas Mähner (00:46:57):
or maybe it's opportunities for efficiency in some of the markets that you play in.
Silas Mähner (00:47:02):
Where are some big opportunities you see?
Arvin Ganesan (00:47:04):
So you mean outside of what I do day to day?
Arvin Ganesan (00:47:08):
So I just listened to a really interesting podcast about this.
Arvin Ganesan (00:47:11):
I have to cross promote here.
Arvin Ganesan (00:47:13):
But it was a recent podcast on the Ezra Klein show about green growth.
Arvin Ganesan (00:47:17):
I don't know if you listened to that, but it's...
Arvin Ganesan (00:47:21):
It's about the decoupling of economic progress with our carbon goals.
Arvin Ganesan (00:47:27):
Sorry, can you hear that little ding-ding?
Arvin Ganesan (00:47:29):
Yeah, but it's all right.
Arvin Ganesan (00:47:31):
All right, cool.
Arvin Ganesan (00:47:32):
Anyway,
Arvin Ganesan (00:47:32):
so what he gets into in this podcast was really connected with me was electricity,
Arvin Ganesan (00:47:39):
which is obviously what I'm spending my time on.
Arvin Ganesan (00:47:41):
Australia is fairly straightforward because you can give somebody something that is better,
Arvin Ganesan (00:47:47):
cheaper and cleaner.
Arvin Ganesan (00:47:48):
You're not asking them to substitute their life.
Arvin Ganesan (00:47:51):
They can live a energy consuming life.
Arvin Ganesan (00:47:55):
They can have no real change in how their life is affected by clean energy.
Arvin Ganesan (00:47:59):
In fact, it probably makes their life better.
Arvin Ganesan (00:48:01):
But there's 30% of emissions associated with agriculture,
Arvin Ganesan (00:48:06):
which almost by definition requires either major innovation or people to change the
Arvin Ganesan (00:48:12):
way they live their lives.
Arvin Ganesan (00:48:14):
And this podcast made me think that some places in the ag tech space...
Arvin Ganesan (00:48:19):
are going to be crucial for a decarbonization mission.
Arvin Ganesan (00:48:23):
The markets are going to be really difficult to crack,
Arvin Ganesan (00:48:25):
and it might be one of the more difficult wedges to crack from a decarbonization perspective.
Arvin Ganesan (00:48:30):
But this podcast really got me thinking of how do you decarbonize the emissions
Arvin Ganesan (00:48:36):
associated with agriculture?
Arvin Ganesan (00:48:38):
Again,
Arvin Ganesan (00:48:38):
it has nothing to do with what I work on or what I know,
Arvin Ganesan (00:48:41):
but it's something I've been thinking about quite a bit.
Silas Mähner (00:48:44):
I like that.
Silas Mähner (00:48:44):
I think there's a lot of other co-benefits too if you can do agriculture right
Silas Mähner (00:48:48):
where it's actually instead of adding to the problem,
Silas Mähner (00:48:52):
you're actually subtracting from the problem of emissions.
Silas Mähner (00:48:54):
I think it is an area of interest to me, especially coming from a farming family.
Silas Mähner (00:48:58):
I should say my parents were farmers growing up.
Silas Mähner (00:49:01):
I've got time for one last thing I think I'm going to ask you is throughout your career,
Silas Mähner (00:49:05):
I'm sure you've got to meet a lot of really interesting people obviously with some
Silas Mähner (00:49:08):
of the roles you've had.
Silas Mähner (00:49:10):
Who are, let's just talk about one specific.
Silas Mähner (00:49:12):
Is there any one person that if you want to name them, feel free to, if you don't want to, it's fine.
Silas Mähner (00:49:17):
But what are any people that have really inspired you in kind of the way you think,
Silas Mähner (00:49:21):
especially when it relates to climate and innovation?
Arvin Ganesan (00:49:25):
This is an easy one.
Arvin Ganesan (00:49:26):
I've worked for her in two regards now.
Arvin Ganesan (00:49:28):
It's a woman named Lisa Jackson, who was the head of EPA during the Obama years.
Arvin Ganesan (00:49:33):
And she's also the head of sustainability at Apple.
Arvin Ganesan (00:49:37):
And she's a really fascinating person.
Arvin Ganesan (00:49:40):
She grew up in New Orleans.
Arvin Ganesan (00:49:43):
Family still lives in Lower Knight there.
Arvin Ganesan (00:49:46):
She was put through school on a petroleum scholarship.
Arvin Ganesan (00:49:50):
So she was a petroleum engineer.
Arvin Ganesan (00:49:54):
And what she really taught me is ultimately deployment is about people, right?
Arvin Ganesan (00:49:58):
Everything we're doing,
Arvin Ganesan (00:50:00):
we talk about emissions,
Arvin Ganesan (00:50:01):
we talk about 1.5 C,
Arvin Ganesan (00:50:02):
we talk about,
Arvin Ganesan (00:50:04):
you know,
Arvin Ganesan (00:50:04):
I could talk about markets and capacity markets and all the things like that.
Arvin Ganesan (00:50:08):
But ultimately this is about people and the reason we need to be
Arvin Ganesan (00:50:12):
engaged in this is to improve the lives of people,
Arvin Ganesan (00:50:14):
particularly people who are having a pretty rough go of it now.
Arvin Ganesan (00:50:18):
And I cannot go a podcast without saying one in five people in the United States
Arvin Ganesan (00:50:25):
have trouble paying their electricity bills.
Arvin Ganesan (00:50:28):
which means that the cost of electricity is too high.
Arvin Ganesan (00:50:31):
And we need to use this opportunity for this kind of generational change moment
Arvin Ganesan (00:50:35):
we're at to address multiple points,
Arvin Ganesan (00:50:38):
including improving the lives of people in the country.
Arvin Ganesan (00:50:43):
She's been a mentor and a friend and a boss for quite some time.
Silas Mähner (00:50:49):
That's great.
Silas Mähner (00:50:49):
I am a big fan of mentorship and just,
Silas Mähner (00:50:52):
I mean,
Silas Mähner (00:50:52):
part of the reason that I gravitate towards these things is I get to learn from
Silas Mähner (00:50:55):
really cool people,
Silas Mähner (00:50:56):
but also all the cool people who have come on these shows,
Silas Mähner (00:50:59):
they get to learn from cool people and we need to pass it down.
Silas Mähner (00:51:01):
And I have this kind of side idea,
Silas Mähner (00:51:05):
or I guess you could say something that's not necessarily related to climate specifically,
Silas Mähner (00:51:08):
is that
Silas Mähner (00:51:09):
mentorship is becoming kind of a dead thing.
Silas Mähner (00:51:12):
Not as many people understand the value of actually looking behind them and helping
Silas Mähner (00:51:16):
out the folks right on their heels.
Silas Mähner (00:51:18):
And it's kind of sad because we're losing a lot of knowledge transfer in many, many respects.
Silas Mähner (00:51:24):
So I appreciate you sharing that.
Silas Mähner (00:51:26):
Any last thoughts or where people should reach you or any calls to action for the audience?
Arvin Ganesan (00:51:31):
Yeah, really glad to be on.
Arvin Ganesan (00:51:32):
Please feel free to check us out.
Arvin Ganesan (00:51:35):
We're at www.goforth.com, F-O-U-R-T-H.
Arvin Ganesan (00:51:40):
This has been awesome.
Arvin Ganesan (00:51:41):
I really appreciate your kind of people-centric approach to these organizations
Arvin Ganesan (00:51:47):
because tech is,
Arvin Ganesan (00:51:49):
I say this all the time,
Arvin Ganesan (00:51:50):
tech is not just built in a garage.
Arvin Ganesan (00:51:52):
Tech is made by people and sold by people and deployed by people.
Arvin Ganesan (00:51:56):
So I really appreciate the kind of way you think about this stuff.
Silas Mähner (00:52:01):
Yeah, thanks, man.
Silas Mähner (00:52:01):
It's always helpful.
Silas Mähner (00:52:02):
It's what I do for a living.
Silas Mähner (00:52:04):
So I don't mind talking about it.
Silas Mähner (00:52:06):
I love it when other people are as passionate about it as I am.
Silas Mähner (00:52:09):
So thanks so much for that.
Silas Mähner (00:52:10):
And looking forward to what you guys continue to do.
Silas Mähner (00:52:13):
And we'll probably have you on again in a couple of years and see how things have gone.
Silas Mähner (00:52:16):
Sounds good.
Silas Mähner (00:52:17):
Thanks.
Silas Mähner (00:52:19):
All right.
Silas Mähner (00:52:19):
Thanks for sticking around to the end, everyone.
Silas Mähner (00:52:22):
Welcome to the takeaway section.
Silas Mähner (00:52:24):
There are a lot of things I'd like about today's conversation with Arvin.
Silas Mähner (00:52:28):
So picking a few is really hard.
Silas Mähner (00:52:30):
But here we go.
Silas Mähner (00:52:31):
First point,
Silas Mähner (00:52:32):
I'm a little biased,
Silas Mähner (00:52:33):
but the number of times he brought up people was probably a record for the show.
Silas Mähner (00:52:38):
And he did it all without me prompting him or pushing him in the direction of talent or people.
Silas Mähner (00:52:43):
So he talked about how the combination of the right people is what helped them
Silas Mähner (00:52:48):
raise their very large seed round to get going.
Silas Mähner (00:52:52):
He talked about how people are what helped him grow his own career in mentioning
Silas Mähner (00:52:56):
some of his mentors at the end there.
Silas Mähner (00:52:58):
He talked about how their employees help them advance and most importantly,
Silas Mähner (00:53:02):
how no technology gets built by itself,
Silas Mähner (00:53:04):
but with people.
Silas Mähner (00:53:06):
And as a recruiter, I really enjoy hearing his enthusiasm about the people aspect.
Silas Mähner (00:53:11):
There's not that many people, no pun intended, who genuinely understand this from what I've gathered.
Silas Mähner (00:53:17):
And the companies who seem to really get it usually have a certain kind of pizzazz
Silas Mähner (00:53:21):
to them and understanding and respect for the people around them.
Silas Mähner (00:53:24):
So I really like that.
Silas Mähner (00:53:26):
The second point is, and this to me is a huge, huge, monumental takeaway.
Silas Mähner (00:53:31):
It's going to be one of the core things I've learned from doing this pod over the years,
Silas Mähner (00:53:35):
is that every founder who's building in hardware should specifically pick multiple
Silas Mähner (00:53:43):
opportunities or business models to make their technology work.
Silas Mähner (00:53:46):
When I asked him specifically what their business model will be and how it's going
Silas Mähner (00:53:50):
to work,
Silas Mähner (00:53:50):
he straight up said,
Silas Mähner (00:53:52):
without any hesitation,
Silas Mähner (00:53:53):
I don't know.
Silas Mähner (00:53:54):
And it wasn't in a negative context.
Silas Mähner (00:53:56):
This was a positive thing, basically pointing out that, hey, we don't have to pick yet.
Silas Mähner (00:54:00):
We still have to prove the technology at a larger scale.
Silas Mähner (00:54:03):
And once we do that, we'll figure out what the markets are like at the time and we'll move forward.
Silas Mähner (00:54:07):
He also referenced the fact that depending on where you sell,
Silas Mähner (00:54:09):
the models might have to be different,
Silas Mähner (00:54:11):
right?
Silas Mähner (00:54:11):
This is not something that's just specific to energy.
Silas Mähner (00:54:15):
It has applications across other things.
Silas Mähner (00:54:16):
So if you are a founder,
Silas Mähner (00:54:18):
I highly recommend as you're building,
Silas Mähner (00:54:20):
as you're getting your idea going,
Silas Mähner (00:54:21):
don't necessarily pick a single business model that you're stuck to over time.
Silas Mähner (00:54:27):
Have the options.
Silas Mähner (00:54:28):
It will help you with your raise because you have more flexibility and you're not
Silas Mähner (00:54:31):
going to be tied to one market sentiment.
Silas Mähner (00:54:35):
And as you grow, you can kind of figure out your way.
Silas Mähner (00:54:38):
I will reference that there's a few other companies that have been on this show
Silas Mähner (00:54:41):
that have been very successful who had a similar thing.
Silas Mähner (00:54:43):
And some of those to mention were Syzygy Plasmonics,
Silas Mähner (00:54:46):
Brimstone,
Silas Mähner (00:54:47):
that's also a Breakthrough Energy Ventures company,
Silas Mähner (00:54:50):
Capture6,
Silas Mähner (00:54:51):
Divert,
Silas Mähner (00:54:52):
EnergyX,
Silas Mähner (00:54:53):
and there's a few others.
Silas Mähner (00:54:54):
But those are the ones that come to mind initially.
Silas Mähner (00:54:56):
So, all right, that's all for today.
Silas Mähner (00:54:57):
If you're already subscribed,
Silas Mähner (00:54:59):
A subscriber, thank you so much.
Silas Mähner (00:55:01):
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Silas Mähner (00:55:03):
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Silas Mähner (00:55:06):
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Silas Mähner (00:55:09):
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Silas Mähner (00:55:10):
Thanks for listening.