How to Scale a Battery Energy Storage Company Without Failing | Ep. 91 [Mark Hagedorn]

What separates a successful battery company from one that runs out of money before reaching scale? In this episode, Mark Hagedorn shares the operational playbook behind building and growing battery energy storage businesses, including lessons learned from startups, manufacturing facilities, supply chains, and large-scale energy projects. He explains why great technology alone isn't enough and how strong operations, financial planning, and customer focus ultimately determine long-term success.

From domestic content requirements and battery controls to ERP systems, quality management, and scaling manufacturing capacity, this discussion offers a behind-the-scenes look at the realities of the energy storage industry. If you're interested in clean energy, battery technology, entrepreneurship, or industrial leadership, this episode provides practical strategies and real-world experience from someone who has spent decades turning complex challenges into scalable solutions.

𝐈𝐧𝐝𝐮𝐬𝐭𝐫𝐲 𝐈𝐠𝐧𝐢𝐭𝐞𝐝 https://industryignited.com/
𝐈𝐧𝐬𝐭𝐚𝐠𝐫𝐚𝐦 https://www.instagram.com/industryignited/
𝐅𝐚𝐜𝐞𝐛𝐨𝐨𝐤 https://www.facebook.com/industryignited/
𝐋𝐢𝐧𝐤𝐞𝐝𝐈𝐧 https://www.linkedin.com/company/industry-ignited
𝐒𝐩𝐨𝐭𝐢𝐟𝐲 https://open.spotify.com/show/3TX1L5LPr4lt1UtcSpSvlN?si=7037433a58c54162
𝐀𝐩𝐩𝐥𝐞 𝐏𝐨𝐝𝐜𝐚𝐬𝐭 https://podcasts.apple.com/us/podcast/industry-ignited-podcast/id1824619671

𝐌𝐚𝐫𝐤 𝐇𝐚𝐠𝐞𝐝𝐨𝐫𝐧
https://www.linkedin.com/in/markhagedorn/
https://www.linkedin.com/company/us-bess-corp/
https://www.linkedin.com/company/viridi-inc/

#podcasts #podcasts #podcastshorts #podcastinterview #podcastlife #businessgrowth #industryignited #drleeanneaguilar #markhagedorn #innovation #energy #CleanEnergy

Transcript

Copy Transcript Copied

Dr. Leeanne Aguilar 0:06

What does it really take to build a battery energy storage company fast without breaking quality, blowing margins, or losing control of the systems that make it scale possible? Welcome to Industry Ignited. I'm Dr. Leanne Aguilar, and today I'm joined by Mark Hagedorn, former CEO of US Best Corporation and now head of commercial operations for Verdi and US Best Corp. Mark is an operations, supply chain, and field service leader with deep expertise in quality and engineering, known for building gigafactories, scaling multi-site operations, and turning technical complexity into execution that delivers. Mark, welcome to the show. Thank you for having me. Now you started in racing and vehicle engine development, then moved into heavy-duty trucking, advanced instrumentation, and eventually energy storage. What through line connects all those chapters and what pulled you into clean energy in the first place?

SPEAKER_00 1:03

So there's a c a couple pieces that are that are through lines there. So one is that when I even started with my bachelor's degree at the Western Washington University Vehicle Research Institute, there were batteries involved in a lot of the projects that we worked on that, you know, were technology demonstration projects for uh folks like NHTSA sort of thing. But you know, they were always either hybrid or natural gas hybrid or pure electric vehicles uh that we were working on. I mean, all the way back in, you know, so you know, my freshman year was in '99, uh, to give you some scale. So there was there was there was always the batteries involved. And then the other the other part of it is if you kind of look at what the end product that we I was always working on at various companies, it was it's all considered capital equipment, pretty much, right? So, you know, you think about the engines, the engines for a race car, a semi-truck to trucking company, uh, an electron microscope to somebody like Intel or Samsung. And then when you actually get to, you know, battery energy storage at ESS or Core Power or or uh US Bess, um those are those are all considered pieces of capital equipment to someone. So the business environment, the main manufacturing process, um, you know, all kind of winds up uh being adaptable through through through all of that, ultimately making batteries.

Dr. Leeanne Aguilar 2:22

Yeah, making batteries right at the heart of it all. You've described your career as getting lucky while wonder wandering around lost at the right moment. Looking back, what intentional choices actually created that luck, skills you built, risks you took, or patterns you followed?

SPEAKER_00 2:37

Big part of it was I just happened to be working with some of the best people in the given industry that I that I was in. And I got to learn a lot about how to do things and how not not to do things along the way. You know, when talk about you know the clean energy business and you know stationary batteries kind of being a newer thing, there are lots of aspects of them that you can take bits bits and pieces from other more established industries. I mean, you have the automotive industry that's been around for 140 years or so, um and you know they they know how to make things. And uh and and so when you you you know can translate some things from an industry like that to uh what what we're doing with uh uh stationary BES tends to be a way to find out the best way to manufacture BES systems. I mean they're they're while BESS has some of its own new nuances, um you know, being able to apply some of that experience that that have gained to the new thing, air quotes, uh is is kind of one of those deals. Now, what when when I say you know, I got lucky wandering around lost was the clean energy space is you know a great great great example of you know best like plans don't necessarily all all always translate into massive positive results. I mean if you look at ESS thing, at some point in time they've run it or at least a maybe multiple times, have essentially run out of money, and then in which case operation slows down. But same same thing, same thing happened with core power a little bit. Yeah, and uh, you know, and and so when I was saying lost, you know, those weren't necessarily plant planned choices. Always the point uh for opportunity. When that opportunity arrived, I knew the right people and was at the right place in the right time with the right skill set to you know basically go on to the next big thing. So yeah, that but what when I say that, that's that's sort of sort of what I'm getting at.

Dr. Leeanne Aguilar 4:28

So basically, like you've been early at in multiple companies and it's a roller coaster industry and technology's evolving. So, what did those experiences teach you about the difference between great technology and a company that can survive at scale?

SPEAKER_00 4:42

ESS is a great example of that because it I mean, if you would have talked to me in you know the 2015-2016 time frame, I would have thought that you know long duration energy storage was the right thing at the right time and everybody was ready for it, and it was going to give you a traditional power generation experience when paired with renewables, and and you know, here we go. This was this was the big big thing. And then, you know, we look at where we're at now here in 2026, and now it's just now that the long duration energy storage stuff is really kind of getting gaining traction and moving moving forward. And so it felt like we were at the right time and the right place, and it was an amazing opportunity all the way back then. But you know, with hindsight being where it is, we were actually quite quite early. Um, and you know, and so early for the industry, but also you know, early for the tech technology and maturity of that as well.

Dr. Leeanne Aguilar 5:30

Yeah, and I suppose that gives you an advantage though, as well. I mean, being early to the game. And while it's maybe not time where it it actually blossoms and you know, there's still a long road ahead, you're still gaining that insight and knowledge, and you're there for the evolution of the products.

SPEAKER_00 5:46

Yeah, and if you've picked the right technology or right company to be with, all the stars align with you know the pivoting that needs to happen and the commercial success that needs to happen along the way, you know, maybe you'll eventually get there. However, sort of the common thing that happens in the clean energy industry is somebody has a great idea, gets it to a certain point, runs out of money, yeah, and then that's sort of where it fizzles. A lot of the operations, planning, budgeting, that's the thing that really backs up the fundraising to sort of you know keep that on track. Um, and you kind of kind of got to marry marry all of that stuff together.

Dr. Leeanne Aguilar 6:19

Yeah. Well, and I think that's common in pretty much any innovative industry. You know, it's like you run out of money at some point. So, right, it's keeping funding going and it's finding new rounds of funding and uh to keep that innovation alive and going.

SPEAKER_00 6:33

And you know, for an early technology company, before you actually put your product out in the field and manufacture onesies and twosies of it, you need to make sure the technology works. Because that's that's sort of one of the big trapdoors is you get get get your thing done, you know, and what whatever you've decided the minimum viable product that that's you know commercially viable is, you get it out there and then it doesn't work. Or you now have signed yourself up for this never-ending circle of repair and modification and improvement and whatever, and you spend a lot a lot of money and time doing that, all the while you're not really advancing your reputation or you know, kind of your reference project portfolio in the actually out in the market.

Dr. Leeanne Aguilar 7:18

Right. Well, and not only that the technology works, but that you have buyers, that you have technology that's actually, you know, commercial viable.

SPEAKER_00 7:29

You know, whatever that is, if it's energy storage or power generation or what you know, whatever it is, it has to do what it says it's supposed to do.

Dr. Leeanne Aguilar 7:37

Yeah. Now you've repeatedly built operations functions from near zero manufacturing quality, supply chain service systems. What's the first operational foundation block you put down when you walk into a new build?

SPEAKER_00 7:50

The first thing that we we try to do is we try to seek to understand what's going on, right? So if this this is an early technology company that's just getting ready to make its first commercial commercial product, you need to understand the product, you need to understand where it comes from, you need to understand some of the nuances of it. And then you can kind of start planning your roadmap for scaling to whatever your scale is going to be. I mean, if we're talking about some of these things where maybe, you know, talking about 100 units a year, maybe. If we're talking about, you know, sell gigafactory, you're potentially talking about millions of battery cells a year. And so you you kind of need to understand what that is, and then focus on figuring out what that minimum commercially viable product is and get it out there and do a good job with it. So then and then what flows along in that in that is with your your ops guy, your CFO, and your engineering, you need to be working the financial model. Like it has to be a a living, a living model, you your source of truth for where you're at now and where you're good where you're gonna be. And you need to plan for real things, right? So it's not just the cost of a building, for example, it's the cost of making that building do what you want it to. Essentially, when you especially a young company, double your budget for that more than you think it's gonna be. And and and again, continue to evolve that roadmap, right? Is that where you think you start with your minimum viable product now is on day one of trying to be commercially viable, might not be the thing that you ultimately wind up producing in volume, right? You either may make technical changes, the market may tell you that you know, this thing needs to be bigger, needs to be smaller, you know, what what whatever that is, and and continue to plan for that and and blend that into whatever your research and development roadmap is too, right? So when are you gonna have new products? What's gonna be involved with them? Budget for that because new equipment, new facility, cha-cha-cha.

Dr. Leeanne Aguilar 9:40

I mean, yeah, you make some really good points there. The road never ends up looking like you think it will, right? There's lots of twists and turns along the way. And so you need to like over budget, like you said, probably even double or triple what you expect it to be because you don't know what's gonna come up along the way. Things are gonna take longer than expected. And so you have to have a a good amount of agility as well in order to pivot if you need to, if something doesn't work out, or if you learn something new, or if somebody else comes up with something similar, and then you have to, you know, change up your technology.

SPEAKER_00 10:13

Or something geopolitical happens and all of a sudden your supply chain and the market changes, or something like that. I mean, it there's there's there's a there's a there's a bunch of ways to kind of get in a get in a space that you haven't planned for. That's sort of the the root of all of this is that you want to have gamed out the many different things that could happen to you before they happen to you.

Dr. Leeanne Aguilar 10:34

Right. Or a pandemic can hit you. Exactly. Right. So US Best was formed to address growing demand for domestic content and cybersecurity in the North America best market. What forces made that demand explode and what are buyers really asking for beneath the buzzwords?

SPEAKER_00 10:52

So you kind of have to look at that from uh two two lenses, because we we, you know, as you know, we kind of talked about as US Best was just acquired uh in December by by Veriti, who is uh you know a much, much larger, much more established company. But we had significantly different product lines, and there are some features and benefits of of both of those that address different aspects of the market. And so for US Best, for example, it's it's larger battery storage systems that are you know the Honda Cord or you know Toyota Camry of LFP stationary storage. You know, the the our largest building block is five megawatt hours and a 20-foot container. Um it's Bloomberg Tier 1 UL listed product. It is not Fiat compliant at the moment, although you know, potentially in the future it it will be. However, it meets up meets a price point with the large-scale energy storage people, whether it be you know utilities or large, you know, commercial and industrial users, and for the time people that are kind of in the time to power space, meaning that they need us a solution now, it needs to make meet the cost stack, and it has to work. It's not necessarily about incentives or tax credits or any of those things, then that that that that tends to make sense. Now, if you look at the Verdi line, they're super safe batteries that are all made in the US, so that that's a big deal. So 100% fiat compliant plus domestic content compliant, little smaller build building block, but because of the safety aspect of the batteries, they can actually be installed in buildings. And so one of Verdi's claims to fame and probably difficult to actually prove, they have the world's largest battery in a building um in New York, um, in basically the basement of a uh a multifamily apartment building. Um it's using being used for peak shaving, arbitrage, that that that sort of thing. But it you know, it can actually be in the building. It's that safe. Whereas you look at you know the larger US best systems, you know, they got to be 150 feet away from a building, and it's just a little different product. Now, Variti does make some larger systems, but then those wind up being more attractive to the people that need the uh build American, buy American compliant systems, they need to absorb tax credits and incentives, um, those those sort of things. And and and so those systems still make make sense for those people. But when you start talking about uh, you know, hey, I need to you know put 105 megawatt hour containers on a site somewhere, um, that's where you US best sort of kind of takes over there a little bit. And so as far as you know what forces make the demand explode, so for Riddie, it's the safe and USA made thing that you know really makes them stand out, you know, kind of kind of on a thing on their own to a certain extent. When you start talking about who can actually make fiat compliant, domestic, content compliant battery systems in in North America, there aren't that many other people. Um and then from the US best standpoint, it well well-priced systems delivered by a US company and by a a team of uh significant industry veterans, you know, it as far as far as you know, again, the Honda Court of Energy Storage System, it lands on your site, it works, um and uh and you know it's it's price competitive with everybody else. So that's that's sort of what brings the brings the demand for for US best.

Dr. Leeanne Aguilar 14:01

Two different value propositions, so it really depends on the right the values or what the priorities of the Yeah, and and when you think about like energy, the energy storage or clean energy industry overall, right?

SPEAKER_00 14:12

It's one solution isn't the only solution, right? Depending on what you're doing, whether it be a storage plus solar site being paired with wind, I mean ultimately the batteries don't care where the electrons were generated, right? They they could come from a nuclear plant, it could come from falling water, you could look at it from a distributed energy storage and generation sort of model. There's lots of different applications for the batteries for you know different storage lengths, different chemistries, that sort of thing. And while lithium ion phosphorus has got to been one been one of the things that the industry settled on from a chemistry standard, that doesn't necessarily work for every single application that somebody's come up with, right? It's that you know, if somebody's trying to do a traditional power generation experience with say solar long duration storage product, may it may also be the thing that fits in there somewhere. And that may be paired with some lithium-ion as well. There's lots of ways to get to where where we need where we need to get to. Between Verdi and US best, we cover a big part of the catalog, as it were.

Dr. Leeanne Aguilar 15:10

Yeah. So in your first year, you built corporate infrastructure, recruited teams, implemented systems, launched multi state facilities, and deployed customer systems ahead of benchmarks. What were the two to three decisions that created momentum fastest?

SPEAKER_00 15:24

So on the on the US best side of things, one of the one of the biggest things that created the momentum was working with a tech partner that already had the UListed Bloomberg Tier 1 product and that was in many manufacturing that we were uh essentially going to be able to you know domesticate the assembly of. And so getting that an agreement arranged with that tech partner for the technology transfer and that sort of thing was a key deal. Because there aren't there aren't very many shortcuts in in doing this, unf unfortunately. Having done this a few times, I'd like to say that there's a couple of secrets that like all of a sudden unlocks all of this stuff, but ultimately it's you know some some pretty basic stuff, which is get a product out in the field that you can point at that works at a credible site as soon as you can. And and if you're not inventing the technology yourself, doing that with somebody that's current that's credible and can you know speed things up is is really a valuable thing. And then back to you know, we were talking about getting the operation side of the house figured out sooner than later, get your plans in place, get your roadmap in place, get all the all of that stuff done. That that's that's another decision that you know you take up take on at the formation of the company is the one you're gonna do that. Um and you know, again, do do that earlier, and then uh spend eighty eighty percent of your time working in the business, 20% of your time working on the business. And so that's business systems, that's procedures, sort of thing. And that that kind of prevents you from going too far into technical debt when you get down the road and are successful, and now all of a sudden have to be start beh really behaving like a professional manufacturing organization. You're not starting from scratch when the volume was already happening.

Dr. Leeanne Aguilar 17:01

Sure. Yeah, that makes sense. Now you've negotiated strategic agreements with cell partners shifting toward domestic gigafactories. What should leaders understand about the real constraints and best supply chains right now? Cells, controls, certification, integration, or something else?

SPEAKER_00 17:17

That's a that's a fairly big topic. So there's probably probably a little history to be discussed here in that you know, if you you transit back to the 2019-2020 time frame and you were trying to be a stationary best manufacturer, everybody who was already making battery cells was making them for the EV industry for the most part. And so you had a hard time securing the proper cells and basically putting your whole system together without without them. And so back then, if you were doing that, you were sort of forced to come up with your own gigafactory for the cells. Now, with geopolitics changed and the industry having evolved with you know capacity and whatnot, it's a little easier to come up with cells, whether they be fiat compliant or not, there's some more more options there. And so given that you know the real the real real barrier for entry these days for a cell gigafactory is billions of dollars that you have to put together. The secret sauce behind them isn't as complicated as it used to be. And so now being a company you know like we are, we have the point of evaluating does it make sense for us to make our own cells right now, or are there you know fiat compliant cells available from another source that's you know highly reputable and everything that we can enter into a long-term agreement with that will you know carry us three to five years in the into the future with cells that will work for us from a domestic content fiat standpoint, and then we maybe we don't have to make that multi-billion dollar capital investment in a cell factoring app. Now, I'm not saying we won't do that in the future, but you might not have to do it now as part of your your immediate operations roadmap, which that opens up some more possibilities for you know comp companies in this space. I mean, certainly time time in the market and experience sort of win win the race here a little bit, but you don't have to basically start from scratch with saying, hey, I'm gonna make best systems. Oh, when boat, by the way, I gotta have the second facility over here that's multi-billion dollars and you know 3,500 people you know making sales for me.

Dr. Leeanne Aguilar 19:25

Yeah, so it makes more sense a lot of times just a partner instead of making that capital investment and yeah creating.

SPEAKER_00 19:31

And you have to be careful with the partner too, because they're those are those are definitely not all created equal. I mean, we have a fantastic one in a cut in a couple different areas uh of the business, but at the same time, you can wind up with someone who's disconnected and doesn't deliver on time and has quality issues and all of those things, and then that really really affects your product too. So yeah, there there's a uh partner beware uh aspect to some of that. And and again, you can look at the clean energy space and see all these like partnerships uh you know between solar, battery, whatever that just haven't worked out. Yeah, watch out.

Dr. Leeanne Aguilar 20:07

Good good tip there. Yeah, definitely watch out and make sure that you're partnering with the credible and reliable source because that will impact everything. Now, Mark, you led development of the first US designed and manufactured best controls. Why are controls so critical, not just for performance, but for trust, risk, and long-term serviceability?

SPEAKER_00 20:26

So battery controls are kind of an interesting thing in that below a certain level of the system, meaning, you know, kind of meeting in the top, like power system and energy management system control, uh, they they can be quite complicated. And so a lot of what's out in the market has been developed iteratively by multiple companies, a lot of them offshore. And with some of the things that we've seen with there's a recent case where there were some rogue devices founded found in inverters or something like that, the cybersecurity aspect winds up being a big part of the conversation. And you start thinking about you know who some of our customers are. Sometimes, certainly, uh, we do have have some defense projects. We also have some utility projects who, you know, these days utilities operate on nearly the same sort of security standards as the defense department does. Um and and then and then you also start looking at large CNI users that have operational security aspects to them as well, whether they be data centers, you know, an Amazon warehouse, you know, and something like that, where they can't have loss of control of their energy systems for a either foreign or just broke actor, you you have to start digging into all right, where did the software code come from? What is what is in there? Who has control of it? Um who has access to the outputs from it? There's lots of ways to skin that cat, but the Belt and Suspenders approach is to have USA made software running on USA made hardware. So, meaning that you've got chipsets coming from you know Texas, you've got circuit circuit boards being assembled and delivered. Delivered to you out of Idaho. Um, and then you got software that's developed in New York or or Oregon for that matter. Um that you what if you have that those things in place, you won't necessarily have to question hundreds of other ways that somebody could be doing something to you or your product somewhere in the future, right? It might not be an immediate thing. It you know, you gotta remember some of these best systems are made to live 25 years on a site somewhere, could be something that you know it is is tucked away and used later. Um, and if you don't have the full control over that, meaning you're buying the software from somebody else or you're having the circuit boards made, you know, somewhere overseas, you don't know. I mean, you could do it, you can do a lot of testing, and there's some after-the-fact information security stuff. The basis is all it is, you know, have the have USA made stuff and and have modern current current stuff. I mean, that's the that's the other thing, is it while you you know still have to do all the testing and due diligence on you know what what you what you're licensing, you don't really have control over the the the engine room there.

Dr. Leeanne Aguilar 23:02

Yeah, true. Very yeah, good points. Now you said operations is often undervalued in early stage companies, strategically and financially. If founders only fix one operations mistake early, what should it be?

SPEAKER_00 23:15

It's usually under budgeting for the manufacturing ramp up process. And one of the things that, you know, it's kind of an indicator that you've not done that correctly is while you're in the manufacturing ramp up process, if engineering and operations is consistently coming to you and going, hey, I need to buy this $40,000 thing we didn't budget for over here, I gotta get the electricians in here to do $20,000 worth of power drop work, I need a new transformer over here. All of a sudden that stuff adds up real quick. And you start looking at, well, maybe I've got a shortfall between now and my next fundraising step. What am I gonna do about that? Am I gonna cut corners in what I'm doing here? Am I gonna slow the slow slow the process down? Like all of those things kind of wind up being self-imposed barricades if you didn't budget correctly in the first place. Yeah. You know, very and sometimes you're not gonna know what some of those things are that you're gonna budget for, but you do need to do, you know, the classic, well, that needs to be 20% more because I don't know what I don't know. Um, I need to set something aside for that.

Dr. Leeanne Aguilar 24:19

Yeah. So adding that cushion in there to make sure that you're covered for those incidentals or yeah, unexpected extra costs.

SPEAKER_00 24:26

Yeah.

Dr. Leeanne Aguilar 24:27

Yeah. So you're a believer in implementing ERP, MES, and operational systems earlier than most teams think they need. What's your Excel expiration date? The signal that the company is accumulating dangerous operational debt?

SPEAKER_00 24:41

That's a great question. The real crude measure that I I use for that is, and you know, again, I've been part of some companies that kept after the uh the Excel do-it-ourself thing way too long. Was once coming up with your manufacturing metrics and data and and maintenance of said things becomes a full-time job for someone, you waited too long to put business systems in place to help with that. It may still wind up being a full-time job for them, but then that position you're in is actually scalable. Whereas if you continue with the Excel sheets, you're just gonna have to add more and more people working on Excel sheets. That it sort of becomes a self-licking ice cream cone somewhere in there. So having the manufacturing execution systems, having the ERP systems forces you to also set up processes and procedures, figure out what your supply chain is and get that off another Excel sheet somewhere, and also allows you to start doing one of my favorite things is future planning and budget forecasting. Um, plus you you're also then able to get better views of what you're actually producing, you're actually able to manage your quality information um that you know you build into the manufacturing process and the supply chain. Um, you can start tracking all of that. If it's in Excel sheets, you know, you wind up with a couple like key people that know where everything is. And you know, if somebody all of a sudden runs in the front door and says, Hey, I got a purchase order for a hundred of whatever we make, all of a sudden somebody's gonna go, Oh, oh my, let me go get my Excel sheets out and see what we can do with that. Whereas if you have the systems that you already have kind of the dashboard or the overview of what's possible.

Dr. Leeanne Aguilar 26:22

Yeah, so there's that inefficiency. So basically, rule of thumb, when one person is spending their entire, you know, 40 hours a week managing and running these Excel sheets, it's probably time to put a system into place that takes that over and it's a crawl walk run thing, right?

SPEAKER_00 26:38

You can get pretty far on QuickBooks, especially if you're baking cookies as opposed to making complex battery systems. Sure. But there's a point at which you need to go to an actual real frontline ERP system. And then soon being if your your manufacturing process has some automation or some complex routing workflow kidding for, you know, say the systems integration, or you know, so the battery's in a container part of the show, that winds up being pretty pretty pretty hard to track. And that's where the manufacturing execution system comes in. And you wind up with kind of efficiencies across the organization once you actually get that implemented. Now, the the other side of it is there's more capital cost, and you actually have to dedicate some of your people to working on the business for implementation and that sort of thing. But that's an investment that's easier to make earlier on than when all of a sudden you're, you know, a thousand people and definitely who knows how many million dollars of capital deployed toward towards your operation, and you're still trying to drape it together with Excel sheets is tough.

Dr. Leeanne Aguilar 27:35

No, absolutely. There's a lot of inefficiency and risk is introduced at you know, if if that's the case. So I agree. The sooner you can get a system into place, the better. So then you have those standard processes and procedures. There's that consistency across the board and it's available to more people, and yeah, so a lot of benefits for that.

SPEAKER_00 27:55

It also helps to remove single points of failure in in the manufacturing process, right? I mean, if you if you have the one ops leader guy that wins the lottery and and does you got two weeks and then he's sexually retired. Yeah. If you don't have that stuff built into systems and you're still working on tribal knowledge and that sort of thing, that can be a very destabilizing event that can happen. Whereas if you have the process procedures and the systems in place, certainly big loss, but not not wheels falling off.

Dr. Leeanne Aguilar 28:23

No, no, right. Somebody else can pick up where they left off and you have all the data and it's it's easy to track and understand and get back on top of. Now, when you're scaling quality and standards across multi-site facilities, what are the non-negotiables that keep you from drifting? Process discipline, supplier qualification, testing validation, training, culture, or all of it.

SPEAKER_00 28:45

Well, uh it it it all it all starts out with with the culture and the employee engagement, right? So especially in a in a in a young small company, you want to have everybody know what the mission is, what the important parts of the aspects of what we're doing are to you know to the customer, to the manufacturing, um, you know, and and to the actual technology that you that you're working with. Um and then and what once you have you know that engagement kind of understanding with the contributing population to quality, which you know ultimately winds up being the whole company in in some aspect or another, you know, so very like sales, everyone's involved in quality in the company as well, even if it's uh you know messaging or controlling documents to customers all the way down through manufacturing, all of that stuff. All of that leads to what your out-of-box quality perception and score actually winds up winds up being. And so with the culture in place, it winds up being much easier to implement quality procedures, testing procedures, because everybody is engaged in making that quality product. Ideally, they care they care about it, and they're willing to expand and adjust what they're doing to meet the next level of quality that's required as you move down your you know road roadmap to commercialization.

Dr. Leeanne Aguilar 30:00

Right. So it's really hiring the right people, bringing the right people on board that align with your your company values.

SPEAKER_00 30:07

And being and being transparent with them, right? Because I mean, if if you're if you're in a younger company, often there's a lot of uncertainty as to you know, when is the next order coming in, and are we gonna be in business six months from now, and you know, all of that stuff, all of that young company stuff, and being able to kind of you know at least be on the same general page with your employee population, as you know, especially like on a quarterly basis, you have all hand meetings and all that. And while you might, you know, you might not talk about the nitty-gritty of the fundraising, you might talk about, you know, here's the orders, here's how we delivered on them, here's the the new orders that are coming in, here's kind of the timeline for that. You know, if there's a new you know, product change or anything that we're talking about that gets included in that conversation. If all of a sudden you know our automation line is gonna come online, you you're able to kind of give a little bit of overview, a preview of what that's gonna look like and how that's gonna change. And then I and ultimately that would you results in a higher quality of work and again bet better engagement upstream and downstream of each employee's job.

Dr. Leeanne Aguilar 31:05

Yeah. So with that level of transparency, how do you uh manage and mitigate flight risk of employees and keep them motivated and not, you know, in fear that their position might go away?

SPEAKER_00 31:16

Uh the hope and confidence in the organization needs to remain there. And then that's where being transparent, where we're saying what we're trying to do, how we're how we're actually doing, and where we're gonna go from there, like that winds up being a thing that you know engages and retains employees. It makes it you feel like you know what's going on at work, but you know what to expect. It's not uh a CFO showing up once a year saying, you know, everything's fine, or you know, gee, we're short some money this year, uh, and and then just kind of moving on. I think as a kind of kind kind of a tenet of some of you know the clean energy industry is there's a lot of that uncertainty and churn that happens, whether it just be geopolitical stuff in the news or whatever, that that can make me think about the you know, blue-collar manufacturing guy, that might make him nervous if he doesn't know really what's what's going on in in the context of his company, the job and the product and that sort of thing. And so, you know, being able to you know talk about that with your employees at a level that you know is appropriate and they understand winds up being a really, really powerful thing. And then when you start talking about, oh, gee, we need to do continuous improvement projects or something like that, you'll have more people on board willing to you know pitch in and look at look at issues, not you know, assign blame or anything like that, but actually you know work to resolve resolve things that are meaningful in the company.

Dr. Leeanne Aguilar 32:31

Yeah, got it. Now you've managed greenfield and brandfield automation, improved profit margins and scaled operations in volatile markets. What's your playbook for maintaining margin while quality expectations increase and timelines compress?

SPEAKER_00 32:47

Well, the the the the first the first part of that is is you gotta know your numbers, right? So you got you really got to know what stuff's costing you right now, because I mean ultimately the quality part, there's there's a cost to that, right? Is that yeah, you can make something super cheap, but if it doesn't work, then you either can't sell it or you're you know fixing it for 25 years. Finding where your sweet spot for that is a big deal. Again, also being honest with yourself about what your minimum commercially viable product actually is and when it is time to go through various stages of manufacturing. Because a lot of the companies you you you you think of as from from a startup standpoint may go on a bit of a journey. They're starting from you know like a small business accelerator sort of program to their first like commercial building that's you know probably more of like a flex space or something like that, where maybe they make you know product number one, but then when that's successful, then you start talking about, oh gee, I gotta make hundreds of these things. Now that that's another facility, and that may be one that isn't something that already exists that I can move in and repurpose. Maybe I've got to build that one from scratch. And and so kind of having that honest look at those things and being able to model along a roadmap, that that's sort of the secret sauce to all of that. Because I've I've certainly been involved in organizations where we didn't understand our margins very well. And so we we went out and sold sold a bunch of things, but then wound up fairly making reasonable real revenue with net net at the end of all of that. And and so then that that also winds up being a hurdle for you to scale up even more since you can't apply revenue back to the business if you you know didn't make that much of it in the first place.

Dr. Leeanne Aguilar 34:25

So know your margins, and the same thing on the manufacturing operations side of things, right?

SPEAKER_00 34:31

Is is if all of a sudden you you know move to commercial operations and you find out that there's 48 hours of labor in each one of your battery modules and there's 50 of those in each system, all of a sudden your actual cost versus what you know was being modeled for you know the bill of materials items and everything else winds up exploding. And then you gotta figure out what to do with that. And so that also can kind of wind up being a fairly large roadblock for somebody who's trying to scale their manufacturing at the same time.

Dr. Leeanne Aguilar 34:59

Yeah. Yeah. So you called 2026, 2027 huge growth years. What's the next operational milestone you're building towards?

SPEAKER_00 35:07

So uh I mean for us, it's a it's a little bit of a scale with discipline type type scenario, right? So we want we want to uh very very significantly expand our manufacturing capability and volume for the products that we have, but we don't want to do that by averaging money left and right and and basically being able to meet the market required volume that that we have and then be able to build upon that to grow your year year over year. Right now, right now for us, that's a lot of effort on you know the customer care and sales side of things, but then it's also you know, us spending some of our time working on the business. So whether it be you know improving our automated battery manufacturing lines, whether it be improving how we do the systems integration. So again, the batteries in a container thing, those are gonna be key to you know essentially match the uh the the the big the big sales that we're gonna experience here. Yeah.

Dr. Leeanne Aguilar 36:04

And you've worked in organizations where external events reshaped everything, like T line, IRA-driven acceleration, acquisition shifts. How do you build an operating model that can absorb shocks without derailing execution?

SPEAKER_00 36:17

Well, that that's an interesting point that you bring up, is in the in the clean clean energy industry, I guess it's kind of a tongue-in-cheek thing, but we sort of refer to ourselves as a solar coaster. You know, and then and that and that and that goes back even before the 2009 nine time frame. You know, what what that's really talking about is there's you know, boom years and there's busted uh for for all that stuff. And and a lot of it is driven by geopolitical things, which you can kind of throw the IRA uh and O Triple B things things into that. So, you know, for the bat from the battery industry, but we went from not having much outside of some foreign EV capability and whatnot in the US for actual you know battery and cell manufacturing to now incentivizing anybody that had anything viable to come and set up manufacturing in the US. And you know, and that happened with the with solar as as well. Um, and then you know, once we got some of those things started, then all of a sudden the rules changed a little bit. So now you now you couldn't have foreign entities concerns involved and still get tax credit. You had domestic content requirements that you didn't have before. And so, you know, depending on how your company was set up set up, you may have some work to do to either be able to have your product maintain eligibility for tax credits or rearrange your business to you know address you know the non-fiat compliant part of part of the market. And that also kind of involved you know a capital market shift. So you know, not only was it the product that you were selling and what incentives you could get, how easy was it to get your private equity capital that enabled you to do all the things and scale up and do all that thing? So the question then winds up winds up being not not just how do you build a company and how do you build manufacturing, how do you build something resilient and compliant and uh flexible enough that when you guaranteed the next thing's gonna happen, what whatever that winds up being, that you're still able to be be relevant. And so right now, what what a lot of that's been is domesticate, domesticate, do it yourself, do it on this continent, and do it with you know pro proven technology that's another personality in the in this industry. I steal the term from, you're not making a magic box, meaning you're you know, it's not proven out and who knows what's inside it and how it works, so if you build built a business with a foundation like that, you're actually going to be able to deal deal better with with some of that stuff than if you have a business with a foundation that's heavily tied to an offshore something or other, it's heavily tied to a supply chain that isn't necessarily from here or subject to a bunch of you know tax tariffs, forced labor, anti-circumvent dump, plus a few other things. If you don't if you don't have those stones in your foundation, you've got a pretty good shot at weathering whatever, what, what, what, whatever comes down the pipe as far as new geo geopolitical risk and you know just the industry risk in general.

Dr. Leeanne Aguilar 39:08

Yeah, right, good point. Now, outside of energy storage, you run a sports fishing charter business. So you clearly understand risk preparation and conditions you can't control. What leadership lessons from the water show up most in how you run operations?

SPEAKER_00 39:24

We kind of touched on this a little bit before, but it it it's sort of, you know, basically having a game plan for potential outcomes. And so when we start talking about the fishing thing, so we're primarily known as an Alba Core tuna charter, which means that we're charging 50 miles offshore one way every trip to go find to go find the fish. And that that's on the open Pacific Ocean where Mother Nature doesn't really care what your plan is. Um and uh, you know, she's executing hers, right? And so you know, 50 miles offshore takes a couple hours to r run out that far. Weather ocean conditions can change a lot. And if you get stuck out there 50 miles offshore and you know the weather goes bad bad on you, if you've never ever thought of that before and what you're going to do, you're gonna have a bad time. Um and so the same thing with manufacturing batteries is you know, if the OCB regulation changes with re regard to, you know, again, the domestic content and fiat concerns, like if right now is the first time that you've ever thought of needing to figure out how that affects you and what you should do about it, you're about a year too late and uh and you're gonna have a bad time. And one one one of the other things is the the customer service aspect. Ultimately, 50% of what your charter customer walks away with or the experience they had with you. Um, you know, some of it has to do with the boat and how the fishing was or whatever, but whether they had a good time or not really has to do with how well you took care of them and transferred knowledge and what responded to their vibe, right? And and and that's it's the same thing on on the bat battery side of things, too, is that there we have varying kinds of customers with varying levels of experience and technical expertise and all of that. And you know, it's our our job not only to you know make a good working product, but also to make sure that it's the right product for you, it solves your problem, and that you're if anything ever goes wrong with it, you're taken care of by people that are in a relevant time zone that speak your language and are you know actually you know set up and knowledgeable to like work work with the product because again, in both in both in industries, whether it be offshore fishing or the manufacturing and and selling of batteries, a lot of the decision making really comes down to I don't like that guy. Um really, really, really does. And if you don't take care of the customer and make sure that they have an amazing experience all the way through sale and after sale, you're probably not gonna get that customer to come back again. But two, also that that customer is probably gonna tell everybody about what their experience experience was gonna be. And so you gotta you gotta be as close there and tight there as you can be.

Dr. Leeanne Aguilar 41:57

Right, great insight. Uh, it's not just about the products, it's about the people, it's about their experience taking care of them because at the end of the day, you might have a great product, but if you don't do good business, if you don't treat your customers well, they're not gonna want to come back because they don't feel respected and they don't like you. Yeah, that's true. Yeah. Well, Mark, thank you for joining me. It's been a a great conversation and a true masterclass and what it really takes to scale energy storage with discipline. Where could listeners learn more about you and US Best Corp?

SPEAKER_00 42:29

If you're interested in uh Veridia and US Best Corp, both have amazing websites, which is kind of what we try to drive everybody to. And so that's Veridiforente.com and USBSCorp.com. Another way to kind of stay a little bit more live in touch with all the things going on at both companies and the people is uh, you know, to make sure you follow follow both companies on LinkedIn, friend me on LinkedIn, a few of our other principals like Alcorin, who's our head head of development. We're we're you know, we're out in the the industry space, either at events or at customer sites. And if you already do follow me on LinkedIn, you know, I try to at least do something insightful or entertaining, um, at least about once a week. Although uh I think one of the more famous things and maybe a little not a little embarrassing, but sort of interesting, is that I've had this long-running series of posts that basically titled Where in the World is Mark Hagadorn? In previous roles I traveled a lot. Um customer sites or you know it was Giga Factory things, that sort of thing. And so if you look at my LinkedIn metrics, my Where in the World is Mark Hagadorn posts, get way more impressions than even some of the really, really cool articles that I've written.

Dr. Leeanne Aguilar 43:40

All right. Well, to our listeners, check out Mark's LinkedIn so you can find out where in the world he's at and follow along. Thank you again, Mark. And to everyone listening, subscribe and follow Industry Ignited and tune in to our next episode. Until then, stay bold, stay curious, and keep igniting industry.