#181 Hot Rocks, From EPA to Apple, Paths to Commercialization, The CapEx > OpEx Model, & More w/ Arvin Ganesan (Fourth Power)

Today, we speak with Arvin Ganesan, an ex-Obama-Admin EPA and ex-Apple Energy Procurement executive. His career is fascinating, from finance to Policy to Energy Tech CEO.

He offers us a lot of insight into their technology, how it works, and specifically how it plays well with utility models of making money.

Towards the end, he mentioned the unknown of the commercialization path. He pointed out that it's not important to pick a model of commercialization with a tech like this because so many variables can dictate the best path to commercialization when the tech is proven past the pilot scale.

Lots of good stuff is in today's episode!

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Topics:
**2:37 Why Cheap and Accessible Energy Storage Matters
**2:37 Why Cheap and Accessible Energy Storage Matters
**17:30 Fourth Power's Utility-Scale Thermal Battery
**21:58 Fast and Efficient Energy Storage and Discharge
**27:10 Building Fourth Power
**32:04 The Power of People
**37:24 Maintaining Culture with Growth
**42:21 Opportunities in the Utility Market
**47:04 Startup Opportunities in Agriculture Decarbonization
**49:01 The Importance of Mentorship
**52:19 Takeaways

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Links:
**Arvin Ganesan | Fourth Power
**Follow CleanTechies on LinkedIn
**@Silas & @Somil_Agg on X 

Transcript

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):
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Silas Mähner (00:01:58):
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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):
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Silas Mähner (00:10:02):
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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.