Zach Dell's Base Power Builds In-House Batteries to Bypass Grid Queues

Zach Dell 旗下 Base Power 自研电池以绕过电网排队 Base Power 并非销售零售硬件，而是将分布式家用电池作为活跃的批发储能机组运营，以此绕过长达数年的输电排队，并以更低费率冲击受管制的公用事业公司。 在本次对话中，Zach Dell 解释了 Base Power 如何通过售电而非销售昂贵的闲置电池，与传统家用备用电源竞争对手形成差异化竞争：公司通过运营分布式住宅电池机组在电力批发市场套利，同时为家庭提供全屋电力保障。Dell 详细介绍了公司的运营策略——该策略深受 SpaceX 资深员工及其父亲 Michael Dell 的影响——强调本地协同制造、书面备忘录以及不懈消除瓶颈。面对人工智能推动下激增的电力需求和受限的公用事业基础设施，Base 借助 Base Core 纵向整合定制硬件以降低落地成本。Dell 摈弃了典型的科技风投周期思维，将 Base Power 定位为其横跨发电、输电、储能与电力零售交付的 50 年终身事业。 Base Power 通过安装并保留所有权的分布式家用电池，绕过了长达数年的输电和并网瓶颈；公司将这些电池作为统一机组运营以参与批发电力交易，同时为居民提供备用电力。 (14:11) 受人工智能驱动，美国电力需求预计将从过去二十年约 2% 的历史复合年增长率跃升至约 10%，给本已受限的电网带来巨大压力。 (2:39) Base 采取双重商业模式：在解除管制的 ERCOT 市场中直接作为零售电力提供商竞争，同时与受监管的电力合作社签订为期 10 年的“兆瓦即服务”（megawatts-as-a-service）合同协议。 (24:22) 为摆脱导致公司连续数月断货的第三方 OEM 供应瓶颈，Base 结合本地工程与制造，通过自研的 Base Core 设备对电池硬件进行了纵向整合。 (66:26)

Base Power founder Zach Dell argues that meeting an unprecedented surge in power demand driven by artificial intelligence requires bypassing rate-regulated utility bottlenecks through vertically integrated, distributed battery networks. Grid Constraints and the AI Demand Inflection (1:27) According to Dell, modern electrical grids are not structurally broken but simply too small to absorb incoming demand shocks. For the past fifty years, electricity demand in the United States grew at a modest compound annual growth rate of roughly 2%, tracking inflation and gradual electrification. However, Dell projects that power consumption for artificial intelligence data centers will accelerate grid demand toward approximately 10% annual growth, presenting a 5x acceleration against a massive infrastructure base. Traditional investor-owned utilities struggle to adapt because their regulated business models reward capital deployment rather than innovation. Under state rate-of-return regimes, utilities generate revenue primarily by earning an unlevered return (typically around 9%) on approved capital expenditures (CapEx) added to their rate base. Dell explains that because utilities are not compensated for research and development or operational efficiency, the sector invests among the lowest shares of revenue into R&D of any major industry, leaving the grid vulnerable to structural transmission constraints. Distributed Fleets Versus Centralized Battery Storage (14:11) While institutional private equity investors deploy massive capital into centralized, utility-scale battery installations, Dell points out two physical constraints that hinder those platforms: multi-year administrative interconnection queues and physical transmission congestion between remote renewable fields and urban load pockets. Because high-voltage lines cannot transport surplus power into cities during regional demand spikes, centralized storage cannot reliably suppress price volatility where electricity is actually consumed. To circumvent transmission congestion, Base Power deploys batteries directly at residential end-points while rejecting the traditional retail backup business model. Conventional vendors sell residential batteries directly to homeowners for approximately $20,000, leaving the equipment idle 99% of the time. Base retains ownership of the hardware—such as its proprietary Base Core unit—and operates the aggregate distributed fleet on wholesale electricity markets during regular grid operations, charging during midday renewable surplus and discharging at peak hours to lower delivered energy costs while offering customers guaranteed backup power. Navigating Deregulated and Regulated Power Markets (22:25) Base adapts its deployment strategy depending on the regulatory frameworks of the territories it serves. In Texas's deregulated ERCOT market—which covers roughly 80% of the state—the company functions directly as an independent Retail Electric Provider (REP). It competes against integrated incumbents such as Vistra, NRG, and Constellation by selling power directly to households and monetizing distributed battery capacity on the wholesale market. In fully regulated service areas, such as electric cooperatives and municipal utilities where direct retail competition is prohibited by law, Base operates as an outsourced infrastructure and technology vendor. In partnerships with entities such as CoServ Electric and Farmers Electric, Base installs and manages thousands of distributed residential battery units across the service area under multi-year contracts, effectively delivering turnkey "Megawatts as a Service" that utilities can dispatch through software without having to overbuild physical substations. Vertical Integration and Operational Cadence (33:57) Dell emphasizes that because electricity is a pure commodity, long-term market dominance depends entirely on achieving the lowest delivered cost per kilowatt-hour. Rather than buying hardware from third-party manufacturers, Base vertically integrated by developing the Base Core battery and establishing its primary assembly plant directly across the street from engineering headquarters. Physical collocation allows engineers to rapidly observe assembly failures, iterate CAD models, and bypass supply chain markups. Borrowing operational methodologies from SpaceX, where co-founder Justin Briggs and early engineering hires trained, Base manages project execution through rigid bottleneck tracking. The company utilizes high-visibility TV dashboards and passes a physical turtle figurine to the desk of whoever owns the active critical-path constraint, which triggers cross-functional daily standups to clear the roadblock before resources are redeployed. Base Power plans to expand from storing and selling power into power generation and transmission over a fifty-year horizon. However, the company faces the open challenge of navigating differing regulatory frameworks across states, managing volatile wholesale commodity pricing, and timing when capital-intensive upstream integration—such as raw mineral refining or cell fabrication—becomes economically justifiable at scale.

[1:27] Zach Dell: It's not that it's broken, it's that it's too small [6:15] Zach Dell: poles and wires move energy through space, and batteries move energy through time. [10:04] Zach Dell: the problem with the sun is that it goes away unless you're in space. [10:04] David Senra: You take the kid out of Blackstone, but not the Blackstone out of the kid [16:14] Zach Dell: I don't sell batteries. I sell electricity. [29:20] Zach Dell: The Bloomberg terminal is obviously this like incredible technology that people in the finance industry use to ask questions and get information and think and analyze opportunities. And the 'Dad Terminal' is my version of that, where I call up Dad and we have conversations about business topics and strategic objectives and challenges that I'm facing. [35:15] Zach Dell: Private offices are lame. Like I want to be in the thick of it. I want to be with everyone. I want to overhear stuff. I want people to overhear me. I want people to feel like they can come to my desk and ask me questions... And also I don't deserve special treatment. I'm on the team just like the interns are on the team... We eat the same food. We have the same desk. We use the same tools. [49:33] Zach Dell: When the game's on the line and the team needs a bucket, they can give me the ball and I can go score, right? And I can also guard the best player on the opposing team. And I also know if I'm double teamed who to pass it to, right? And it's like you got to be able to draw up the play and help, you know, motivate your teammate when he misses a big shot. And also, if your team needs a bucket, like you got to go get a bucket. [52:38] Zach Dell: The companies I want to invest in are the ones run by entrepreneurs that I want to emulate and I want to learn from. Charlie Munger and Warren Buffett: Tell me the bad news because the good news takes care of itself. [64:31] David Senra: Zach doesn't know what love is until he holds his first child in his hands. [71:02] Zach Dell: the honor of a lifetime

[0:02] So, out of every single guest on the [0:04] show so far, yours is the business that [0:06] I understand the least. So, let's use [0:08] this conversation as an opportunity to [0:10] fix that. Explain what you're working on [0:12] and like what your mission and how [0:13] you're doing it. [0:14] >> Yeah. So, the grid is is something in [0:16] the power system and and electricity [0:18] broadly is a topic that a lot of people [0:19] don't understand and it's it's pretty [0:20] common. I think that's because there's a [0:22] ton of nuance to it. It's a very old [0:24] system. It's highly regulated and so [0:26] it's not something that is in kind of [0:28] natural common zeitgeist. The truth is [0:31] our business is is very simple. We're in [0:32] the business of making and delivering [0:34] megawws and our megawatts are the most [0:37] affordable and reliable megawatts in the [0:38] world on the planet. At least that's our [0:40] ambition. And our mission is to power [0:44] human prosperity by driving energy [0:46] abundance. And we look to a very simple [0:50] correlation between consumption of [0:52] energy per capita and GDP per capita. [0:55] And the takeaway is that the more energy [0:58] a population is able to consume, the [1:00] better their life gets. And so if you [1:02] can make megawws, gigawatts, terowatts, [1:06] uh more affordable and reliable, it's [1:08] the best way to make people's lives [1:10] better. And that's a mission that we [1:12] have all rallied around and gotten super [1:14] passionate about. We think about things [1:16] in terms of a mission, a vision, and a [1:18] strategy. Right? So, the mission is why [1:20] are we all here? We're all here to fix [1:22] the grid and deliver affordable, [1:23] reliable power and promote human [1:25] prosperity by driving energy abundance. [1:27] >> Before we go further, why explain why [1:29] the grid needs fixing? What's the [1:30] problem with it now? [1:31] >> It's not that it's broken, it's that [1:33] it's too small. How could something as [1:35] important as electricity and power not [1:38] be something that we can scale? Like, [1:39] how do we get into the situation to [1:40] begin with? I think because um [1:43] capitalism hasn't been hasn't been able [1:45] to work its magic on the industry [1:46] because it's it's highly regulated and [1:48] the companies around it that have built [1:50] it don't have an incentive to innovate. [1:53] They're not uh the rate regulated and [1:55] they get paid on on capex, not on R&D, [1:58] right? And so the amount of money that [2:00] they spend on R&D as a percent a [2:01] percentage of their revenue is like as [2:03] low as any industry you'll ever find, [2:05] right? They're not engineering [2:06] organizations. They're cap they're kind [2:08] of project management and and capex [2:11] oriented organizations and so there has [2:13] not been a bunch of innovation and how [2:14] can we scale our capacity to consume [2:17] electricity. It's just like how do we go [2:18] build as fast as we can and earn a [2:20] return on on that building. We exist to [2:22] change that, right? We are an energy [2:23] technology company that is R&D driven, [2:25] engineering led and technology focused [2:27] and we are going to build technology [2:29] that allows us to scale our consumption [2:31] of electricity, deliver more megawatts [2:34] that are reliable and affordable and [2:36] help help meet the moment of the [2:38] inflection in electricity demand. [2:39] >> Okay. So that that's why you were [2:41] talking that's what I was thinking. I [2:42] was like, okay, so there's this huge [2:43] surge and that will continue. We need [2:46] more uh power and electricity because of [2:48] everything going on with AI. Before [2:50] that, was there any other inflection [2:52] point or did the the demand for [2:54] electricity in the United States just [2:56] kind of grow like linearly? [2:57] >> Over the last 50 years, demand for [3:00] electricity in the US has grown at [3:02] basically the rate of inflation. So, it [3:04] has not really grown much. Um, [3:06] >> okay. So, this is the first this is a [3:07] like once time in one time in history uh [3:10] problem it's having right now. I think [3:12] that there was underlying growth kind of [3:15] coming or or at least starting to come [3:17] from the electrification of [3:18] transportation uh and electric vehicles. [3:21] Uh but that's played out less quickly [3:23] than some might have thought. I think [3:24] that will continue to play out as the [3:26] cost goes down and things like you know [3:28] electric heat pumps and electrification [3:29] of of heavy industry will will drive [3:31] electricity demand but the the AI [3:32] infrastructure build out has massively [3:34] accelerated it. [3:34] >> Can you explain like how big the demand [3:36] is for electricity for AI? [3:38] >> I mean we I don't even know. I hear [3:39] about it but I don't know. I mean the [3:40] way to think about it is like over the [3:41] last 20 years electricity demand has [3:43] grown at roughly a 2% compounded annual [3:45] growth rate and you we think it'll go to [3:47] you know somewhere on the order of 10%. [3:48] Which is obviously a 5x which on a base [3:50] as large as energy is is really really [3:51] really big. [3:52] >> Okay. So then go back to your the [3:54] mission. [3:55] >> So we we think about it in terms of you [3:56] know the mission the vision and the [3:57] strategy right the mission is why you're [3:59] here. We're here to promote human [4:00] prosperity by driving energy abundance [4:02] which basically just means deliver [4:03] affordable and reliable power. The [4:05] vision is what does that even mean? Like [4:06] what does that actually look like? And [4:08] what that looks like is the modern power [4:10] company of the electric era, right? We [4:12] think that there's a generational kind [4:14] of paradigm shift happening in the [4:15] energy industry where the last five [4:17] decades of energy were defined by coal [4:19] and then natural gas as the marginal [4:21] megawatt and the next five decades will [4:23] be defined by solar, batteries and [4:24] software. And we are going to build that [4:27] company that is oriented around that new [4:29] paradigm. And then the strategy is how [4:32] how do we win like what is our [4:34] competitive approach? uh what is our [4:36] formula for success and I would describe [4:39] that as developing a compounding cost [4:41] advantage through vertical integration [4:42] and technology and the reason why that [4:46] is a strategy is because energy [4:48] electricity is a commodity and the best [4:50] commodity is the least expensive most [4:53] reliable commodity right and so we've [4:55] oriented the entire business around the [4:56] fundamentals of the industry which is to [4:58] develop a cost advantage use technology [5:00] use vertical integration oriented all [5:02] around the mission of human prosperity [5:03] and energy abundance And then you know [5:06] in the last 3 years something [5:07] interesting has happened which is a new [5:10] consumer of electricity has showed up [5:13] and it's now the fastest growing and [5:15] soon going to be the largest consumer of [5:16] electricity in the world and it name is [5:18] AI and so we're going to orient the [5:20] company around that to serve that demand [5:23] and and meet that moment so that we can [5:25] continue to expand our AI infrastructure [5:28] and accelerate all the incredible [5:30] advances that will come as a result of [5:32] this technology which I think is the [5:33] greatest technological breakthrough our [5:35] lifetime. [5:35] >> So, explain how you're reorienting the [5:37] company around that. [5:38] >> Well, it's less of a reorientation and [5:40] more of a using all the technology that [5:42] we're already building and planning to [5:44] build to accelerate the build out of AI [5:46] infrastructure by bringing the the power [5:49] to the compute. uh and bringing the [5:51] compute to the power. Uh and and what [5:54] this means is accelerating the build out [5:56] of these centralized data centers by [5:58] deploying our megawatts around those [5:59] data centers and offsetting that load so [6:01] we can add headroom to the system so we [6:03] can build more of it and then taking [6:06] that compute hardware and actually [6:08] bringing it to this massive fleet of of [6:11] energy that we've developed uh to [6:13] accelerate the deployment of it. [6:15] >> Okay. So how do you generate more power [6:17] then? So there are really two distinct [6:23] things to think about here. There's [6:25] generation and then there's transmission [6:26] and distribution, right? So generation [6:28] is is where the new electrons come from, [6:31] right? Solar, wind, gas, coal, [6:33] geothermal, hydroelectric. There's tons [6:35] of different ways to fusion, fision. [6:37] There's a bunch of different ways to [6:38] generate energy. And then you have to [6:41] move it, right? And poles and wires move [6:43] energy through space. And batteries move [6:45] energy through time. The grid is a [6:47] system by which the transmission [6:49] distribution happens and it's built for [6:51] the peak. So it's massively oversized [6:53] which means that you have a bunch of [6:56] inefficiency and that it's not being [6:58] used all the time. It's not being highly [6:59] utilized. And when you have a system [7:00] that runs at low utilization, it makes [7:02] the system very expensive. Batteries [7:05] allow you to increase the utilization of [7:06] that system because you can charge them [7:08] when demand is really low and you can [7:10] discharge them when demand is really [7:11] high. And so you can take, you know, the [7:13] curve of demand and you can flatten it. [7:15] and therefore you can lower the total [7:17] delivered cost because the capacity [7:19] factor as it's called in the industry or [7:20] the utilization has gone up. So with our [7:23] current product today focused on battery [7:25] storage, we're not making more [7:27] electricity, we're just using it more [7:29] efficiently to drive the cost down. [7:30] >> So if I understand, we're like the [7:32] optimization here is not you're not [7:34] adding more uh lines and wires, you're [7:37] actually just optimizing the existing [7:39] system better through batteries. [7:41] >> Exactly. We're taking there's a m like [7:43] think about in the middle of the day in [7:44] Texas like right now it's hot as hell [7:47] outside. [7:47] >> It's hot as hell outside. [laughter] [7:48] The sun is high in the sky and if you go [7:50] to ot.com and you go look at the prices [7:52] I bet you wholesale prices are really [7:54] low and that's because we have a ton of [7:56] solar in the state. It's amazing, right? [7:57] And so we're charging our batteries [7:58] right now. Not I can't tell you that for [8:00] sure, but like we we are most likely [8:01] charging, you know, during the solar [8:02] ramp today, right? when like the prices [8:04] go down and then when the sun goes down [8:06] tonight and everyone goes home and they [8:07] turn on their AC from work, prices are [8:10] going to go up because demand is going [8:11] up and supply is going down, right? So [8:13] the sun is down, the solar is no longer [8:15] producing, prices go up, we discharge [8:17] the batteries. So we didn't create new [8:19] electricity, but we timeshifted it. What [8:21] was happening before we were [8:23] >> power companies were doing nothing. [8:25] >> Well, we are we were just using the [8:27] system less efficiently. So we were, you [8:29] know, curtailing solar. or we still are [8:31] curtailing solar and there's a bunch of [8:33] uh excess generation that's happening in [8:35] the middle of the day where that's why [8:37] prices go so low is because we're we're [8:38] we're generating more solar than we can [8:40] use but we can't time shift that to be [8:43] used when the sun goes down uh in in the [8:46] evenings. So that's why you're obsessed [8:47] with batteries and I I've been obsessed [8:49] with batteries since college and [8:51] batteries have been around you know for [8:54] decades and actually you know John be [8:56] good enough the original uh PhD [8:58] scientist who who worked on the LP [9:00] battery chemistry [9:01] >> hold on his name was good enough [9:02] >> good enough good enough uh may he rest [9:05] in peace uh he was a professor at the [9:07] University of Texas just down the street [9:09] >> okay so what how does a kid get obsessed [9:11] with batteries though [9:13] >> I mean it's kind of a long story but [9:15] guess we have time Uh, look, I mean, as [9:17] you know, and we talked about a bunch. I [9:19] mean, growing up, I was always obsessed [9:20] with big hard problems and just trying [9:23] to and [snorts] that was always what I [9:24] my my understanding of capitalism and [9:26] company building was just organizing [9:28] people around the hardest problems. And [9:30] the bigger the problem, the larger the [9:31] economic outcome downstream of the [9:33] solution. And I watched my dad do it and [9:35] I watched him, you know, [snorts] [9:36] totally inflect the the PC industry and [9:39] now what he's doing with with the AI [9:41] infrastructure buildout and the server [9:43] business. And that was always my [9:45] strongest motivation. I mean, he was my [9:46] hero and he's still my hero and I always [9:48] wanted to be like him. And there's, you [9:49] know, uh there's just no no two ways [9:52] about it. Like I wanted to be an [9:53] entrepreneur. I mean, I started my first [9:54] company in 8th grade. Uh and I started [9:56] my second company my sophomore year of [9:57] high school. And I started my third [9:58] company my sophomore year of college. [10:00] And basically none of them worked, but I [10:01] was just learning stuff and just trying [10:02] to get out there and solve problems. And [10:04] in college, I was working on a business [10:06] to and you know, business in air quotes [10:08] is more of a science project. It was not [10:10] really a good commercial idea. um to [10:12] convert human waste into compressed [10:14] methane or bio gas that could be used as [10:15] a source of lowc cost electricity in the [10:17] real world because I was obsessed with [10:19] this idea of um providing people with [10:22] access to lowcost power that didn't have [10:24] it because it was this obvious way to [10:25] make their life better. And around that [10:28] time I was just I was really kind of you [10:30] know nerd sniped for lack of a better [10:32] phrase by solar. I thought solar was the [10:34] coolest thing ever. And solar was great, [10:37] but the problem with the sun is that it [10:39] goes away unless you're in space. And [10:41] so, you need a mechanism by which you [10:43] can use that energy that's produced when [10:45] the sol the sun is out at times when the [10:47] sun is not there. And batteries are the [10:49] are the answer. and battery technology. [10:51] You know, most of the batteries in the [10:52] early days, you know, you had a lot of [10:54] different chemistries out there and you [10:56] had iron air and you had solid state and [10:58] then you had this kind of NMC high [11:00] nickel uh lithium ion chemistry catch a [11:03] lot of steam and most of the EVs in the [11:05] early EV build out with this high nickel [11:07] NMC chemistry and only in the last 5 [11:09] years or so this low nickel LFP [11:11] chemistry which um is really better for [11:15] stationary storage. It's safer. It's [11:17] longer duration. It's hard to emerge. [11:19] When I was in college, I was really [11:20] excited about solar, really excited [11:21] about batteries. In fact, I tried to put [11:23] together a deal as a, you know, [11:25] 21-year-old college kid to go lease a [11:27] piece of land on uh the big island of [11:29] Hawaii, which has really low cost land [11:31] and really high cost electricity. Build [11:33] a solar array. Actually, it was going to [11:34] be EPC at the time by Solar City, who [11:36] was doing a lot of utility scale EPC. [11:38] This is before they sold to Tesla. [11:40] >> Yes. Okay. and sign a power purchase [11:43] agreement with Hawaii Electric which is [11:44] a 20-year PPA and then go finance the [11:47] whole project and you know 90% loan to [11:50] value and you know earn a 20% lower IR [11:53] and I you know in college so you know [11:56] after I'm working on this project in [11:57] India I end up going into to finance at [12:00] you know down the internet basically I [12:01] was like okay this business isn't going [12:02] to work before I start another company I [12:04] need to go learn about good businesses [12:06] and so I'm going to go to the place [12:07] where I can find the smartest people [12:08] that work the hardest and I'm just going [12:09] to sit next to them and just work my [12:11] butt and try to get smarter basically [12:13] and build tools for my tool. [12:14] >> But you knew no matter what you were [12:15] going to be an entrepreneur [12:16] >> for sure. There's no question. I never [12:17] there's no I was never like I'm going to [12:19] be a private equity partner at [12:20] Blackstone. [12:20] >> No, but you are one of the one you know [12:22] cuz we talk a bunch also but you are one [12:24] of the uh all my founder friends that [12:26] talk the most like a PE guy. [laughter] [12:30] >> You take the kid out of Blackstone but [12:31] not the Blackstone out of the kid. I [12:32] guess I I I do love I'm very [12:34] quantitative and I'm competitive and I [12:35] love I love markets and companies and I [12:37] think that's because I grew up studying [12:38] companies and markets and [12:39] >> Yeah. uh like any good, you know, young [12:42] Jewish boy, I took my bars of money and [12:43] put in the stock market and, you know, [12:44] track companies and it's like, you know, [12:46] still manage a PA that I have a lot of [12:48] fun, you know, following companies. I I [12:50] just love studying businesses, what [12:51] makes good businesses and like you, you [12:53] know, big fan of, you know, the [12:54] Bergkshire letters and, you know, the [12:55] Amazon shareholder letters and, you [12:57] know, the constellation letters and [12:58] would devour those things and and so it [13:00] was more of I I'm so interested in [13:03] finance and accounting and investing and [13:04] capital allocation [13:06] >> because it is a necessary skill to be a [13:08] great CEO of a capital intensive [13:09] business, right? And that was always why [13:11] I I've been interested in in those [13:13] things. And so, long story short, I'm in [13:15] college and I go, you know, intern at [13:17] Blackstone. I get the return offer. I'm [13:19] back in college before going back to [13:20] Blackstone and I'm like, "Oh, I know how [13:22] to use spreadsheets now, whatever." And [13:23] so I build a model, a memo, slides for [13:27] this like solar project. And I go to New [13:28] York and I go get in touch with a bunch [13:30] of like project finance teams at these [13:32] big banks and I go pitch them on my, you [13:34] know, $30 million loan that I want to go [13:36] build the solar array in Hawaii. And [13:37] they're all like, and you know, I I get [13:40] some meetings and it's nice people take [13:41] the meeting with this college kid and I [13:43] present my model and my memo and they're [13:44] like, "Who is going to run this project? [13:47] like like where's your team? I was like [13:50] I am like I'm going to what are you [13:51] talking about? I'm going to just do it [13:52] and I have everything figured out and [13:53] here's the the memo and they're like [13:55] you're going to go be an analyst at [13:56] Blackstone like this is and I got [13:58] basically laughed out of the room by [13:59] everybody but I was dead serious. I was [14:01] like dude this is the math pencils and I [14:03] think that would have been a great [14:03] investment. It would have worked. Uh but [14:05] like was very bullish on solar economics [14:09] back then and I show up at Blackstone [14:11] and there's a bunch of people who are [14:13] kind of poking around the battery [14:14] industry the supply chain. you know, we [14:16] we we looked at carving out a lithium [14:18] mine, which I spent a bunch of time on. [14:19] Uh the firm ended up buying a business [14:21] that's now one of the largest utility [14:22] scale battery developers in the country. [14:24] And I got really excited about what was [14:26] happening in the battery space. But [14:28] there was this obvious issue with [14:30] utility scale batteries. And when I say [14:32] utility scale batteries, I mean big [14:33] shipping containers in a farm field [14:34] somewhere. And you can probably think [14:35] about what that looks like and you've [14:36] seen pictures of that. And that's been a [14:38] really good asset class over the last [14:39] decade or two. And there's, you know, [14:41] basically every big private equity firm [14:43] has a utility scale battery platform. [14:44] Apollo and KKR and Blackstone and Oak [14:46] Tree and all these guys, Aries and [14:47] Brookfield, they all own these assets [14:49] and they, you know, they're highly [14:50] levered and they're they're a nice [14:52] return, but they're fundamentally [14:53] constrained really by by two things. One [14:55] is interconnection capacity. So there's [14:57] not enough places on the grid to go put [14:58] these big shipping containers. And the [14:59] second is transmission congestion. These [15:01] big load pockets like downtown Austin, [15:03] downtown Dallas, downtown Houston, where [15:05] you need the power, that's not where you [15:06] can put the shipping container battery, [15:07] right? And so you have transmission [15:08] congestion which shows up in pricing and [15:12] you're unable to get the power where you [15:13] need it at the right time. And so that [15:16] really showed me or kind of brought to [15:18] light the insight around a distributed [15:20] architecture deploying batteries [15:22] deploying [15:22] >> the actual house [15:24] >> where the interconnection exists where [15:26] the load is. Got it. Right. So you don't [15:27] have to to to worry about the the [15:29] transmission problem and you don't have [15:30] to worry about the inter. [15:31] >> That's really interesting. I [15:32] don't think I understood that before you [15:33] just said that. So then I started [15:36] studying the distributed battery world [15:38] and the residential battery world and I [15:40] looked at every company in the space and [15:41] you know read the 10ks and uh the S1's [15:44] and you know talked to the analysts and [15:46] you learn that you know the publicly [15:47] traded companies and and and and all the [15:49] companies in the space they're all [15:51] selling a high margin premium product. [15:54] It's a $20,000 home battery or $20,000 [15:56] home generator that they sell you [15:58] outright. They make a gross margin on [15:59] and and they're done. They're not [16:01] they're not actually building it like [16:02] infrastructure. but they're not [16:03] utilizing it like infrastructure. And so [16:05] it was this aha moment of like, oh, the [16:07] distributed architecture is the answer. [16:09] And all the companies that are around [16:10] that problem, they're focused on the [16:12] wrong business model. They're focused on [16:14] high margin upfront sales. And then I [16:17] start getting really excited because I'm [16:18] like, oh my god, if you're going to take [16:19] on an incumbent, my view is the best way [16:21] to do it is to have a counterposition [16:23] business model. Because if I showed up [16:24] and said, I have, you know, the best [16:28] home battery on the market, the best [16:29] home generator on the market, and I'm [16:31] going to sell it to you for 10% below [16:32] the big guys. Your margin is my [16:35] opportunity, right? Like these these big [16:38] guys are going to compete on price. [16:40] They're going to first they're going to [16:41] copy my product if it's better, then [16:42] they're going to drop their price and [16:43] they're going to run me out of business. [16:44] But if I show up and say, "I don't sell [16:45] batteries. I sell electricity." And [16:47] we're going to install this battery on [16:48] your home. When the grid's up and [16:49] running, we use it. As a result, you get [16:51] cheap electricity. When the grid goes [16:52] down, you use it. And because of our [16:54] different business model, you pay 120th [16:57] or even 140th of what you'd pay to own [16:59] it outright, then I can win. And if you [17:02] want to compete with me and you're one [17:03] of the incumbents, you've got to [17:04] completely change your business model, [17:06] which as you know for a public company [17:08] is very hard, right? Because you go to [17:10] Wall Street, you go to Wall Street and [17:11] you say, "We've been making money this [17:12] way for the last decade and now we're [17:14] going to make money in an entirely new [17:15] way." Typically, Wall Street doesn't [17:17] like that very much. So I got really [17:19] excited about the setup of this [17:20] distributed architecture, this [17:22] counterprodition business model and then [17:24] the opportunity to really put it in the [17:26] universe and and go after an opportunity [17:27] that not only was large in scale but in [17:30] importance and impact on the world. Uh [17:32] back to the point around human [17:33] prosperity, energy abundance, energy [17:35] consumption per capita, GDP per capita [17:37] and that correlation. I want to tell you [17:39] about the presenting sponsor of this [17:40] podcast, RAMP. I have been reading a lot [17:43] about SpaceX lately. SpaceX is one of [17:45] the most valuable businesses in the [17:46] world and one of the main themes in the [17:48] history of SpaceX is constantly [17:49] attacking and questioning your cost. [17:52] Ramp helps many of the most innovative [17:53] businesses in the world do exactly that. 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[18:42] I found one of my all-time favorite [18:44] quotes when I was reading the book 0 [18:45] to1. The quote says, "The single most [18:47] powerful pattern I have noticed is that [18:49] successful people find value in [18:51] unexpected [music] places and they do [18:53] this by thinking about business from [18:55] first principles instead of formulas." [18:57] That is exactly what Apploven has done [19:00] with their advertising platform. [19:01] Apploven connects you with over a [19:03] billion potential new customers inside [19:06] mobile games. Apploven allows you to [19:08] capture undivided attention. Apploving [19:10] ads are full screen video ads that are [19:13] watched for an average of 35 seconds. [19:15] That is retention that blows other ad [19:17] platforms out of the water. And you can [19:20] launch on Apploven in minutes. You set [19:22] the goal and Apploven achieves it. [19:24] There's no complex setup, no expertise [19:27] needed. And Apploven scales quickly. [19:30] They can put your ads in front of over a [19:32] billion potential customers. Other [19:35] businesses have seen immediate results, [19:37] have scaled to hundreds of thousands of [19:39] dollars of spend per day, and increased [19:41] [music] their revenue by millions. So, [19:43] you want to get started quickly before [19:45] all of your competitors are on Apploven. [19:47] And you can do that by going to [19:49] apploven.com. [19:50] That's apploven.com. [music] [19:54] Back to like the idea that you're not [19:55] selling batteries, almost like leasing [19:57] it, right? Like they cannot buy it from [19:58] you even if they wanted to. I was [20:00] telling the the crew before you got [20:02] here, I was like, "There's just some [20:03] kind of weird parallel." And I don't [20:04] even know if this makes sense to Zach, [20:06] but like everybody's like, "Oh, you [20:07] should do more episodes of Founders on [20:08] Howard Hughes." And I was like, "I've [20:09] done like one or two." And he's actually [20:11] interesting, but like if you read about [20:12] like I find his dad more interesting [20:14] than Howard Hughes, right? Because his [20:16] dad was selling a really advanced drill [20:18] bit, right, in the second oil boom that [20:22] was taking place largely in Texas and [20:23] Oklahoma and everything else. Howard [20:25] Hughes, I think senior, was one of the [20:27] richest people alive. And he what his [20:30] one innov his his business model [20:31] innovation was that you couldn't buy it [20:33] from him. You had to lease it. So he [20:34] would service it like it would break. [20:35] He'd have to sharpen everything else. [20:37] But like you literally were essentially [20:38] he just had this reoccurring revenue [20:40] coming in because you can't buy it from [20:42] me. You can't just buy and take off and [20:44] I never see you again. Like you have to [20:45] pay me every month. And then that [20:46] compound and you just wind up, you know, [20:48] printing cash. And there's the cash from [20:49] his dad's business that However he used [20:51] to do, you know, the movies and the [20:52] planes and everything else. There's like [20:54] a interesting parallel to I think what [20:55] you're doing. The way that I thought [20:57] about the business model and Justin and [20:59] I, the way we we thought about it from [21:00] the beginning is it just starts with the [21:02] customer and what they want, right? If I [21:04] ask you, David, what would you like out [21:06] of your power company? My guess is you [21:08] said something like, I want my bill to [21:09] go down and I want to never lose [21:10] electricity. Is there anything else you [21:12] want out of your power company? [21:14] >> No. [21:14] >> No. Right. And so, how do we deliver [21:17] that outcome for you? Well, if I sell [21:19] you the battery, you're not a wholesale [21:21] power market participant. You're not a [21:23] qualified scheduling entity or a load [21:25] scheduling entity. and you don't have a [21:26] hedging team and a trading desk and [21:28] you're not thinking about commodity [21:30] prices, right? And so you can't actually [21:32] use that battery 99% of the time when [21:34] the good is up and running to your [21:35] benefit. You can't use it to lower your [21:37] power prices, right? It just sits there [21:38] on your home and then when an outage [21:39] happens, awesome. You have backup that [21:41] you paid 20 grand for and you probably [21:43] feel like you overpaid a little bit, but [21:44] like you're happy. By us owning the [21:47] battery, we can use it the 99% of the [21:50] time that the grid is up and running as [21:51] a wholesale power market asset. And then [21:54] we can leverage the value of that to [21:56] lower your bill, to drop your price [21:58] because we're creating value. It's like [21:59] we have a box on your house that is [22:01] going to generate money and we're going [22:02] to share the money with you in the form [22:03] of a lower electricity bill. It's really [22:06] that simple. So the asset ownership [22:08] model is not because, you know, we're [22:10] greedy or we we really just like want to [22:12] own things. It's because it's a way to [22:14] deliver the best product to the [22:15] customer. That's all that matters. [22:17] >> Yeah. In an industry where they don't [22:18] really give a about the customer [22:19] because they're monopoly in most cases. [22:22] >> Yes. [22:23] It's complicated. [22:25] So, first of all, there's, you know, [22:27] regulated and deregulated states. [22:29] >> We were talking about this before we [22:30] started recording. This is really [22:31] interesting. Can you explain [22:32] >> regulated and deregulated states in the [22:33] US? If you look, it's kind of a history [22:34] lesson here, but if you you look back, [22:36] you know, over 50 years, electricity is [22:39] one of the few industries in the US that [22:40] did not get entirely deregulated. [22:42] shipping, uh, airlines, telecom, [22:45] trucking, uh, you know, electricity in [22:47] the in the late 90s, early 2000s. [22:50] Actually, in California, deregulation, [22:53] uh, started there and basically Enron [22:56] manipulated the market and kind of [22:58] busted the power market in California [23:00] and deregulated deregulation like [23:01] totally stopped and Rick Perry and [23:03] George Bush in Texas like carried the [23:05] torch of deregulation and the public [23:07] stealing commission in Texas pushed this [23:09] kind of competitive competitive market [23:10] construct. Now, it's going to get even [23:12] more complicated. In Texas, 80% of the [23:14] market is deregulated. 20% of the market [23:16] is still regulated. So, Austin Energy is [23:18] a municipal utility. So, we sit here in [23:20] Austin in our office that is served by [23:22] Austin Energy. We cannot be the [23:24] electricity provider to Austin Energy. [23:26] Same thing in San Antonio. CPS is a [23:28] municipal utility there. Same thing in [23:29] Georgetown. Georgetown Electric is a [23:31] municipal utility there. There's another [23:33] category of utility called a co-op or [23:35] cooperative. [23:36] This is more in the rural areas. Uh but [23:39] now there's there's really big [23:40] cooperators like co-serve who's a [23:41] customer of ours or petalis electric [23:43] co-op that's the largest co-op in the [23:44] country also in Texas and these are [23:47] think of them as kind of nonprofits that [23:49] operate for the benefit of the members [23:51] all the members like a cooperative are [23:53] owners of the of the of the cooperative [23:55] and their job is to lower rates and so [23:57] in Texas you have 80% of the market [23:59] Houston north Austin encore centerpoint [24:01] a territory that is deregulated [24:04] competitive you can sign up to be an [24:05] energy retailer you can sell power to [24:06] anybody you have the generators who [24:08] operate the gas plants, the coal plants [24:10] and the nuclear plants, and they sell [24:11] power through a retail provider uh like [24:14] like us directly to the consumer. And [24:16] then you have the municipal utilities in [24:18] Austin, San Antonio, and Georgetown. You [24:19] have the co-ops uh Co-Ser, Guadalupe [24:22] Valley Electric Co-op, Farmers Electric. [24:23] These are all customers of ours. What do [24:25] you mean by customers of yours? [24:27] >> So, we build battery fleets for the [24:30] utilities that they use in the same way [24:32] that we do. So for Co-Ser Electric for [24:35] example, we have built them or in the [24:37] process of building them 100 megawatt [24:38] and soon to be expanded fleet of [24:40] batteries that they use in the same way [24:43] that we do in the deregulated markets. [24:44] They charge the batteries when the price [24:45] of power is low. They dis discharge the [24:47] batteries when the price of power is [24:48] high. They make money on the spread. [24:49] They share that spread with their [24:50] members in the form of lower prices [24:52] >> and they're the ones installing your [24:53] batteries or you still do the install. [24:55] We install the fleet for them. So we [24:56] build them this fleet. So it's much like [24:58] them going and saying I need 100 [24:59] megawatts of utility scale battery [25:01] instead of the big shipping container [25:02] battery. We go put thousands of [25:04] batteries on their service territory and [25:05] we give them a piece of software [25:07] baseepower company.com/coserve. [25:09] They can go in, they see their whole [25:10] fleet, they can charge, discharge, they [25:11] can schedule behavior off the fleet and [25:13] it's a wholesale power asset that they [25:15] can use to lower prices and then they [25:16] get the reliability benefit for their [25:18] homeowners. [25:19] >> Okay. And so that that was going to be [25:20] my next question there. You're only [25:22] installing right now batteries on [25:23] individual homes, correct? [25:25] >> That's right. [25:25] >> Are you doing any anything else besides [25:27] that at the moment? [25:28] >> Today or only focused on residential [25:29] homes? Yeah. [25:30] >> Okay. So, so back to the to to the [25:32] market setup. You know, in the in the [25:33] early 2000s, you had this deregulation [25:35] push. Texas really carried the torch. A [25:37] couple other states in in the Midwest, [25:38] Ohio and and Illinois and the Northeast, [25:40] Pennsylvania, uh New Jersey, [25:41] Connecticut, Massachusetts, parts of New [25:43] York, but it's it's kind of complicated. [25:45] All deregulated to an extent. Not all of [25:47] them uh and and none of them really as [25:49] far as as Texas. Texas is kind of the [25:51] most competitive and deregulated. That's [25:53] why we decided to start here. in [25:54] relative to the to the deregulated [25:56] markets, we compete with the retail [25:57] energy providers, uh the Gentailers, [25:59] Vistra, Constellation, NRG. Uh and then [26:02] in the regulated markets, we are a [26:04] vendor to the utilities and we're a [26:05] partner to them. And you're totally [26:07] right, they don't have an incentive to [26:08] innovate and go build a factory and come [26:10] up with new kinds of batteries and [26:11] technology cuz that's not how they're [26:14] set up to earn. They're rate regulated. [26:16] >> Explain why they don't have the [26:18] incentive to do so. [26:19] >> Yeah. So if you had a utility that had a [26:22] monopoly ownership over a service [26:24] territory, for example, let's say, you [26:25] know, P Gen has all of California, which [26:28] is not exactly true. There's LWP and in [26:30] and Southern California, there's SoCal [26:31] Edison as well, but let's say P Gen for [26:33] the for the illustrative example has a [26:37] monopoly over all of California. They [26:39] can just raise rates indefinitely and [26:41] just like jack profits and, you know, [26:43] that would be bad for consumers. And so [26:45] instead you have this concept of the [26:46] rate base where there's a public utility [26:48] commission that kind of governs the [26:50] utility, tells them what they can build [26:51] and what they can't build and then they [26:53] earn a return that's regulated and it's [26:55] typically you know 9% unlevered on the [26:57] capback they deploy. So they go to the [27:00] to the regulator and they file what's [27:02] called a rate case which is like we need [27:04] to build all this stuff to meet demand [27:06] and to upgrade the system and the [27:08] regulator says yes you can build that [27:09] and then they go build it and they earn [27:10] a return on it. And so there's no [27:13] financial incentive for them to come up [27:14] with new technology. Their only [27:16] financial incentive is to go increase [27:18] the size of the rate base and go build [27:20] more assets. And so we show up and say [27:23] we are your technology partner. We are [27:24] your outsourced R&D engine. We're going [27:26] to bring to you better solutions so that [27:29] you can scale your infrastructure [27:31] without increasing rates for your rate [27:33] pairs. And that's how we serve the [27:35] regular utility. Today our business is [27:37] really one technology stack which we can [27:39] talk in depth about [27:42] that [27:43] is brought to market behind two business [27:45] models regulated and deregulated. The [27:47] deregulated model we directly sell power [27:50] to the homeowner. We install a battery [27:51] on their home. We own and operate it. We [27:52] bid into the wholesale power markets [27:54] when the grid's up and running. When the [27:55] grid is down, the homeowner gets that [27:56] battery. [27:56] >> That would be your preferred. You would [27:58] if you could snap your fingers the [27:59] entire country would be like that. [28:00] Correct. Would that be better for your [28:02] business or no? Not necessarily. I mean [28:03] we we we love the utility partnership [28:05] model too because [28:07] >> it has really uh large reach and there [28:09] are benefits to you know working with [28:11] one counterparty to address a large [28:12] service territory and there are some [28:14] synergies for example like you wouldn't [28:15] want you know 10 different wires going [28:18] to a home right that would be redundant [28:20] right so it makes sense to have the [28:21] poles and wires be be regulated and look [28:23] I think there's a lot of nuance in [28:24] energy markets and so it's hard to say [28:26] the whole grid should be regulated the [28:27] whole grid should be deregulated it's a [28:29] very geographically defined problem but [28:31] the the drag business is direct to [28:33] consumer retail power and wholesale [28:35] market participation of our technology. [28:37] The reggg business is we are a vendor to [28:39] the utilities. We build them these [28:40] battery fleets and then we sign 10ear [28:42] contracts with them and they pay us for [28:44] that fleet over time. It's megawatts as [28:46] a service. That's what that business is. [28:47] Megawatts as a service. We build 100 [28:49] megawatts, 500 megawatts, thousand [28:50] megawatts or gigawatt and they pay us [28:52] for that. They use those megawatts and [28:56] we make money on them basically buying [28:58] those megawatts from us over time. [29:00] >> Okay. Wait and say something more about [29:01] that. You said these are 10ear [29:02] contracts. [29:03] >> Yeah, they're they're typically long [29:04] duration contracts where we build them a [29:05] fleet of batteries and they operate them [29:07] for for 10 years. [29:08] >> Why is the long duration important? [29:10] >> Well, they're highly capital intense and [29:12] for you or for them [29:13] >> for us because we're building them and [29:14] so the long duration contract gives us [29:16] certainty of cash flows which we can use [29:18] to finance. [29:18] >> I think I have a better understanding of [29:20] your business now. Uh definitely for the [29:22] the non-regulated than the regulated. I [29:24] want to talk about like how you think [29:26] about company building. You've been [29:27] obsessed with entrepreneurship since you [29:28] were a kid. You started your first [29:29] company, you said in eighth grade, [29:30] seventh grade, something like that. [29:31] >> Eighth grade. Yeah. [29:32] >> Okay. Talk about [29:33] >> my cousins who were in high school. They [29:34] had, you know, they had a little more [29:36] experience than me, but but not much. I [29:37] mean, I've been studying this since I [29:39] mean I mean I was a little kid. I mean, [29:42] I I had a front row seat to one of the [29:44] bias, but one of the greatest [29:45] entrepreneurs of all time, still [29:46] operating as one of the greatest [29:47] entrepreneurs of all time. Um, and the [29:49] the rate of learn I mean I just get to [29:51] learn from him every day and and we're [29:52] incredibly close as you know and you [29:54] know we compare notes about and we talk [29:56] about his business and we talk about our [29:57] business and uh we provide each other [30:00] with feedback and we disagree and we [30:01] argue and it's it's a ton of fun. Uh and [30:03] so I've been studying the art of company [30:04] building for as long as I can remember [30:07] um both in that context and then also [30:08] you know the investing roles. I mean [30:10] investing is really just trying to [30:11] predict the future in the context of [30:13] understanding what makes a great company [30:14] and which ones are going to win that [30:15] version of the future. Uh, and so it [30:17] feels like, you know, to it felt like to [30:19] me the perfect training ground to to [30:20] become an entrepreneur. [30:21] >> So, you said earlier that your dad, [30:23] Michael Dell, is your hero. He's one of [30:25] my heroes, too. I actually talked to him [30:27] yesterday. And, um, the funny thing [30:29] about that is, I mean, he's got this [30:31] such a like a friendly UI, but he's so [30:33] competitive and so like determined to [30:36] win that there's such a I I don't even [30:38] know how to like just position between [30:40] like how friendly he is and just how [30:41] fiercely competitive he is. Uh since you [30:44] mentioned him, uh I want to bring up [30:46] something you told me one time that you [30:48] called the dad terminal. Can you say [30:50] what the dad terminal is? [30:51] >> Yeah. So you you you you joked that I'm, [30:53] you know, kind of a financially minded [30:55] person and and uh uh the Bloomberg [30:58] terminal is obviously this like [31:00] incredible technology that, you know, [31:02] people in the finance industry use to [31:04] ask questions and get information and [31:06] think and analyze opportunities. And the [31:08] dad terminal is is my version of that [31:10] where I call up dad and we have [31:12] conversations about business topics and [31:15] strategic objectives and challenges that [31:17] I'm facing. And uh and it's the most fun [31:20] it's the most fun thing ever because uh [31:23] you know he has more context than anyone [31:25] but my mom probably on on me and what's [31:27] going on in my brain and he's got a lot [31:29] of context on the business cuz we talk [31:30] all the time and he's scaled a [31:32] vertically integrated capital intense [31:34] hardware company consumerf facing. Uh [31:36] there's a lot of similarities between [31:37] our two businesses and so I use it as an [31:40] opportunity to learn from him and and I [31:41] like to think that every once in a [31:42] while, you know, he gets a new [31:43] perspective or I ask an interesting [31:44] question, he learns a thing from me. [31:45] >> I was going to ask like when's the last [31:47] time you presented him a situation that [31:49] was new to him. [31:51] >> I like to think it happens pretty often. [31:52] You have to ask him. Uh yeah. Um but [31:56] it's fun. We challenge each other and [31:57] push each other and um [snorts] and it's [32:00] we spend basically no time like [32:02] celebrating, you know, and and basically [32:03] all the time trying to solve problems. [32:05] And you're right, he's totally [32:06] competitive and incredibly focused, but [32:08] he does it with a smile. And I and I try [32:10] to do the same thing. And I think you [32:11] talk to the team here, like they would [32:13] tell you that I'm pretty intense and [32:14] pretty competitive and quite focused, [32:16] but I do with a smile and I try to have [32:17] fun and I take, you know, the job really [32:19] seriously, but I don't take myself that [32:21] seriously. [32:22] >> Uh, you mentioned vertical integration a [32:23] couple times. Why is that so important? [32:25] >> It's only important if you're playing a [32:27] cost focused game, right? Like it's not [32:30] vertical integration because it's fun or [32:32] because it's cool. It's because we're [32:34] trying to compete on cost. The vertical [32:35] integration is a great strategy to win [32:37] on cost, right? Electricity is a [32:38] commodity. The best form of commodity is [32:39] the cheapest one. And if you're going to [32:42] deliver that, you got to vertically [32:43] integrate. So that's why we vertically [32:45] integrate. [32:45] >> When you first started the company [32:46] though, like how do you go from this [32:48] company doesn't exist to I'm going to [32:50] create a like a new essentially power [32:52] company is vertically integrated? a lot [32:55] of reading, writing, thinking, and you [32:57] know, deliberation with my co-founder [32:59] Justin and and you know, Jared, who's [33:00] our first hire, and and Dana and Cole [33:02] and the early people that that joined [33:04] the company. And I I think we still do [33:05] this to this day. Like, we we do a lot [33:08] of, you know, crawl, walk, run, a lot of [33:10] iterating, a lot of testing and [33:12] learning. And look, I think we started [33:14] Justin and I with a belief that the [33:15] energy industry was going through a [33:17] paradigm shift. That battery storage was [33:19] a really valuable technology in that [33:20] paradigm shift. And that building a [33:24] battery pack, you know, highly uh [33:27] optimized battery pack assembly business [33:28] in the US was going to be a really [33:30] strong position to be in and that's [33:32] >> why why on that point [33:34] >> because batteries had a lot of value and [33:36] there was a lot of margin being captured [33:38] uh by the OEMs basically. So why is it [33:41] important to manufacture it here though [33:42] >> to control the supply chain? It's less [33:44] about like physically where it is being [33:47] in this country or another country and [33:48] the fact that coupling engineering and [33:50] manufacturing and actually like making [33:52] the thing where you design the thing and [33:54] having the engineers that make the thing [33:55] and the editors that design the thing. [33:57] >> We talk you have a lot of like uh I did [33:58] this episode on Elon how Elon works. I [34:00] think it's the most downloaded episode [34:01] of founders ever. you have there's a lot [34:03] of like SpaceX [34:05] culture [34:06] >> or ideas that I hear from you [34:08] >> and obviously Justin was there. Yeah. [34:10] Like [34:10] >> Yeah. I mean Justin Justin was there for [34:12] kind of the formative years of his [34:14] career. Obviously Andrew as well. Jared [34:16] our first hire was there for the [34:17] formative years of his career. Same with [34:18] Cole Cole Jones who was hire number [34:20] four. We got a lot of SpaceX people [34:22] here. It's a company that I deeply [34:24] admire. I've gotten to know Brett [34:25] Johnson the CFO there. Really admire him [34:27] and Gwen and of course Elon is you know [34:29] the greatest technologist of all of all [34:30] time. And I think the culture inside of [34:33] SpaceX and the operational cadence and [34:37] the way their their kind of ability to [34:41] uh focus on the critical path and un [34:42] unblock things in their path to get to [34:44] their goals that are all oriented around [34:47] their mission is super inspiring and [34:49] something we've tried to replicate. [34:50] >> And they're really hard to compete [34:51] against office space. I think it was [34:53] here last year or like maybe 6 months [34:55] ago and you were like, "Yeah, that [34:57] building over there." We almost had a [34:58] lease and then Elon came in and swooped [35:00] it up. [35:01] >> They did. Yeah. It was a bummer, but uh [35:04] you can only look forward, not [35:05] backwards. So, we we found a new spot. [35:07] It's going to be better actually. We're [35:08] going to build a a campus with [35:10] manufacturing, engineering, everything. [35:12] And and [35:12] >> is this the one out by the airport? [35:13] Yeah. [35:14] >> So, talk more about this. [35:15] >> Yeah. So, the business is growing and [35:16] we've got to expand our manufacturing [35:17] footprint. And of course, like the the [35:19] the headcount, too. I mean, last time [35:20] you were here, I think we were just on [35:21] the first floor. or now we're on all [35:22] three floors. You know, we'll soon fill [35:24] up the whole thing. [35:25] >> Dude, the growth is crazy. So, I was [35:26] reading through all of your company [35:29] uh like monthly reports. It's just like, [35:31] okay, we're going to we're doing like [35:32] 1.3 a day or six a day and then I [35:34] skipped like I went to the end and it's [35:36] like now we have tens of thousands of [35:37] these things everywhere. It's pretty [35:38] impressive. [35:39] >> It's just like, you know, [35:41] >> maniacal focus, relentless execution, uh [35:43] and try to get, you know, a little bit [35:45] better every day, every week, every [35:46] month, and and you can get a lot done. [35:47] But but um yeah, business is growing a [35:49] ton and we've got to expand our our [35:50] manufacturing footprint. Our headcount's [35:52] growing and we feel really strongly [35:54] about inerson work, having everyone in [35:56] the same place, you know, one team, one [35:57] dream, one culture. It's not like, oh, [35:58] the factory people and the office [35:59] people, it's like one company and we eat [36:01] lunch together, we spend time together. [36:03] Um and so having everyone colllocated is [36:05] really important. [36:05] >> Yeah. Your desk is right here. [36:07] >> Yeah. Yeah. [36:08] >> Like in [36:09] >> just the same as anybody else's. [36:10] >> Yeah. Of course, [36:11] >> there's a lot of again like I I am [36:13] fascinated by the way Elon runs his [36:14] companies and he has what I feel is like [36:16] a very simple ideas but they all work [36:18] together. Obviously, he's doing complex [36:19] >> but it's not like rocket science. [36:21] >> Private offices are lame. Like I want to [36:23] be in the thick of it. I want to be with [36:24] everyone. I want to overhear stuff. I [36:25] want people to overhear me. I want [36:27] people to feel like they can come to my [36:28] desk and ask me questions. [36:29] >> And it's just it's just better. It's [36:30] more fun. I like I love the team. I like [36:32] being with them. Um and there's no [36:33] reason to like hide away in a in a [36:35] private office. And also I don't deserve [36:37] special treatment. I'm on the team just [36:39] like the interns are on the team just [36:41] like you know the the the person who [36:43] started a week ago is on the team just [36:44] like the third hire is on the team and [36:45] we're all on the same team together. We [36:46] eat the same food. We have the same [36:48] desk. We use the same tools. Um and I [36:51] just think that's the right way to [36:52] operate. Uh and so yeah, this new [36:53] facility is going to be amazing. We're [36:54] going to have everything colllocated and [36:56] look I mean go to go to Round Rock and I [36:58] think you've been you see that the the [36:59] Dell facility. I mean for a long time [37:01] everyone was there and of course now the [37:03] company is at global scale and they've [37:04] got offices all over the place. But I've [37:06] seen I've seen that work really well for [37:07] other companies and um I think it'll [37:09] work well for us. [37:10] >> Okay. So talk about more of the [37:11] structure. You don't separate design, [37:13] engineering, and manufacturing. It's all [37:15] in one location, [37:16] >> right? [37:16] >> Okay. And that's taking place right now [37:18] across the street. [37:19] >> Yeah. So I mean you could walk for 2 [37:20] minutes that way and you'll hit base [37:22] factory 1 and you'll see there's like a [37:24] little driveway here and you'll see [37:26] engineers walking back and forth all day [37:27] long and most of them have scooters and [37:28] golf carts and you know things like that [37:31] and [37:32] that's where the product is made. this [37:34] is where the project is designed. And so [37:35] it's a walk or a golf cart or a scoot to [37:37] get back and forth and just having the [37:40] ability to go design a part, walk over [37:44] to the factory, see how the part is [37:46] being assembled, figure out the failure [37:48] mode and fix it and iterate quickly with [37:51] people that you see every single day. [37:52] It's just a massive accelerant in and [37:54] pace of execution. It's it's funny to me [37:56] because like I've read you know a ton [37:57] about the Robert Baronss the industrial [37:59] revolution and I feel like there was a [38:01] good I don't know 50 70 year chunk in [38:04] American history we kind of forgot these [38:05] these things but the way you're [38:07] describing exactly what like Ford used [38:08] to do. It's what Cardi did. It's like [38:10] what all of industry in the United [38:12] States before it was moved out used to [38:13] do and it's like we had we kind of like [38:14] lost that knowledge and now it's like [38:16] coming back. It's like yeah guys this is [38:17] exactly what they used to do. Why don't [38:18] we just do it that way too? [38:19] >> Totally. and and we have a lot of the [38:22] Elon companies, Tesla and SpaceX, uh but [38:25] also you know and we have these [38:27] companies to thank for training a whole [38:29] cohort of engineers on how to build [38:31] hardware products, how to scale [38:33] manufacturing, how to ramp a supply [38:35] chain. And we didn't like I I'm glad you [38:38] brought that up. I was thinking the [38:38] other day I was like could you imagine [38:41] the deficit that America would have if [38:43] Elon didn't exist in this domain? [38:46] software we crushing, but this like this [38:49] one guy, it's the most incredible [38:51] contribution I think anyone has ever [38:53] made to humanity is is not just the [38:54] companies that he's built, but the [38:56] engineers that he's trained that have [38:57] gone on to build other great companies. [38:59] It's um like I said, he's the greatest [39:01] technologist of all time in my opinion. [39:02] It's been a massive advantage being able [39:05] to hire people that he's trained that [39:07] have, you know, worked with him, that [39:08] have learned from him. They bring their [39:10] best practices here and then to be fair, [39:12] we adapt them, right? Like we do things [39:14] in a very base way. We have all kinds of [39:15] things like base pace and you know the [39:17] turtles and the dashboards and you know [39:20] our north stars and all these things [39:22] that are that are core to our culture [39:24] that just kind of bubbled up out of the [39:26] way that our team operates and the way [39:28] that we solve problems and many of them [39:30] are inspired by companies like SpaceX [39:32] and Tesla. Uh but a lot of them are are [39:33] kind of organic to us. [39:34] >> Okay. So explain some of these things to [39:36] me. [39:36] >> So look I I think we from the earliest [39:39] days and you you can go back and look at [39:42] some of the artifacts in writing of [39:44] this. have been very focused on a small [39:47] number of important goals that are very [39:49] clear and understandable by the whole [39:50] company. We've been accountable to those [39:52] goals like we write updates every month [39:54] on like what do we do, what do we not [39:55] do, what are we going to do next month [39:57] and we do that, you know, I've written [39:58] one of these monthly updates now for the [40:00] last, you know, three and a half years [40:01] every single month. Never miss a month. [40:02] Don't plan to. It's a huge feel [40:04] cathartic for me to sit down and kind of [40:06] write the whole thing. And I think it's [40:07] an asset for the company to have this [40:10] kind of account of okay, what happened? [40:12] What's going to happen next month? [40:13] They're a great recruiting tool. They're [40:14] a great fundraising tool. So, from the [40:16] beginning, we, you know, we started the [40:17] company with this with a memo, right? I [40:19] think you've read it. It's 10 pages top [40:21] to bottom. Like, what is base power? Why [40:23] does it exist? What is the problem that [40:24] we're solving? How are we going to do [40:25] it? [40:25] >> Where did you get the idea to to write [40:27] the that initial memo? [40:29] >> I'm just the kind of person that has to [40:30] write clearly to think clearly. I've [40:32] always been a writer. I loved writing. I [40:33] love reading, much like you. and and um [40:35] I think maybe some of the memo culture [40:37] stuff comes from finance and investing [40:38] and and getting your ideas out on paper, [40:40] but I just can't think clearly if I [40:42] don't write clearly. And so I needed the [40:43] memo for myself and you come in here, [40:46] you like carry this like little notebook [40:47] with you, too. [40:48] >> Yeah. I've always done my notebooks. I [40:49] have like two notebooks. I have the red [40:51] notebook which is like you know in the [40:52] business and I have my black notebook [40:54] which is like on the business and the [40:55] red notebook I'm carrying around in the [40:56] office and meetings and the black [40:57] notebook is you know for at home and I'm [40:59] trying to strategize and [41:00] >> wait in and on. So I think there's a [41:03] concept of working in the business, [41:04] working on the business, right? And [41:05] working in the business is I'm blocking [41:07] and tackling and solving problems that [41:08] are blocking us today and I'm you know [41:09] trying to figure out personnel problems [41:11] and product problems and you know acute [41:14] issues that are near-term and then [41:16] working on the business is thinking 6 [41:18] months out 12 months out and kind of [41:19] strategic wargaming and you know chess [41:21] playing. [41:21] >> I would love to read that notebook by [41:23] the way. [laughter] It might be private [41:24] if you don't want to do [41:25] >> there's some good stuff in there. [41:27] There's also all kinds of bad stuff in [41:28] there. [41:29] I know that's great. It's I try to [41:31] segment out my day with very specific [41:34] like, okay, when I'm in the office, I'm [41:35] largely almost always exclusively [41:37] working in the business. And then, you [41:39] know, I leave the office basically at [41:40] 9:00 p.m. every night. If it were up to [41:42] me, I I'd say longer, but I have a wife [41:43] who I love and I want to spend time with [41:45] before she goes to bed. So, I'd leave at [41:46] 9:00. I go hang out with her till she [41:47] goes to bed. And then, you know, 10 to [41:49] 11 or, you know, you know, 9 to 10, I'm [41:51] with her roughly and she goes to bed. [41:52] And then I I open up the the black [41:53] notebook and I sit and my phone's in [41:55] another room, my computer's in another [41:56] room and I just focus on strategy and [41:59] what's most important and you know what [42:01] are we not thinking about and you know [42:03] sometimes there's very specific things I [42:04] need to do which is like I need to go [42:06] write you know an outline of a memo or [42:08] of a of a you know a big thing that's [42:12] happening in the next couple weeks that [42:13] I have to figure out like a big problem [42:15] and sometimes I just sit and I have no [42:16] idea what I'm gonna write about and I [42:17] just stare at a page until something [42:19] pops into my head and that process has [42:22] yielded some of the best ideas that have [42:24] that have come and I think by like [42:26] deliberately allocating time in the day [42:28] towards working on the business versus [42:29] in the business. It helps you and like [42:31] actually physically having a different [42:33] notebook that is like a different color [42:34] and I open the black notebook and I'm [42:36] like it's time to get creative like that [42:38] and I'm not in the office. I'm like at [42:40] home it's after hours and uh that just [42:43] has really really helped me that [42:44] segmentation of you know when to work in [42:45] the business and when to work on the [42:46] business. Do you think there's something [42:47] special about it being analog that [42:49] you're actually writing with pen to [42:50] paper? [42:51] >> For sure. I've tried to move to to [42:52] computer and all the good ideas go away. [42:54] I mean, not entirely, right? And like [42:56] what happens is I wake up pretty early [42:58] in the mornings and you know, 6:00 to [42:59] 8:00 a.m. is kind of my most productive [43:01] time, but that I'm in the morning. I'm [43:04] I'm kind of like doing the work that I [43:05] assigned myself the night before. So, [43:07] I'm like, "Okay, I got to go solve this, [43:08] I solve that, and then I open the [43:09] computer and that's all on the [43:10] computer." And then I'm like actually [43:11] executing. But there's like this [43:13] special, you know, 30 to 60 minutes in [43:15] the evening with a pen and a paper and [43:18] no distractions. I can't get a [43:20] notification. I can't get a call. Like [43:22] I'm just focused. And I really enjoy [43:25] that. And I'm sure some people have the [43:26] have the capacity to focus, you know, [43:28] using digital tools. But like the analog [43:31] is really uh clarifying and focusing for [43:33] me. Deal is how the best founders turn [43:36] the world into their talent pool. I've [43:38] been studying how history's greatest [43:39] founders operate for a decade. 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[45:07] The land the fastest growing battery [45:09] fleet in the world. Land the batteries [45:11] at a at the lowest landed cost because [45:13] it costes everything in a commodity [45:14] business. And [45:15] >> what does land mean? [45:17] the batteries on the grid [45:19] >> on a per kilowatt hour basis cheaper [45:21] than anyone [45:22] >> and how do you affect the price of that [45:25] >> the materials of the hardware the [45:27] installation cost the customer [45:28] acquisition cost all the overhead and [45:30] and the operations to get the battery [45:31] there [45:31] >> okay [45:32] >> so it's fastest growing battery fleet [45:35] >> lowest cost megawatt basically and then [45:37] financial sustainability [45:39] >> which is basically profitability of unit [45:41] economics right those are the three [45:43] things and those are the three north [45:44] stars and if you walk in the office in [45:46] the the office by the stairs there's a [45:47] poster beautiful it's welldesigned by [45:50] our design team on purpose but it only [45:52] has the three north stars and that same [45:54] poster is in the middle of the factory [45:55] and everyone walks by every single day [45:57] and at the beginning of the year I sent [45:58] an email to the team and I said look [46:00] these are our three north stars if we [46:01] get these three things done these these [46:03] three things done uh this year we're [46:06] going to be on track towards our mission [46:08] and so people know okay if we want to [46:09] achieve this mission these are the three [46:11] things we have to get done and then [46:12] there are goals that come downstream of [46:13] the north stars that are kind of [46:15] specific things that we have [46:16] accomplished to hit the northstar. And [46:18] so everything we're doing internally is [46:19] focused on those north stars. So we have [46:21] these very specific north stars. We have [46:23] these monthly updates to organize the [46:24] team and then we're just manically [46:26] focused on on unblocking whatever is on [46:30] critical path towards achieving those [46:31] north stars which keep us in track for [46:33] that mission. So I mentioned the turtle. [46:34] So the turtle is this this device that [46:36] we use and there's devices right? [46:37] There's like tools. Turtle is a tool. [46:39] The metrics and dashboards are a tool. [46:40] We'll talk about both of them and the [46:42] updates are a tool. The writing and the [46:44] kind of organizing of thoughts. So the [46:46] turtle is a literal physical turtle. Now [46:48] there's actually a couple of them that [46:49] goes on the desk of the person that is [46:51] on critical path. [46:54] That turtle can only be moved when [46:56] critical path is resolved. So with [46:58] turtle comes a thing called a hot [47:00] potato. And a hot potato is like a squad [47:02] basically that spins up around a [47:04] problem. So we have a problem in the [47:05] business. There's a part of the supply [47:07] chain that you know there's a there's a [47:09] part that we can't get at volume. And so [47:11] there's a turtle on the desk of the the [47:13] head of the supply chain and there's a [47:14] team of people that are all working on [47:16] solving that problem. And there's a [47:17] meeting every single day and there's an [47:19] email that goes out every week to the [47:20] entire company to updates base power [47:22] company.com that is a hot potato update. [47:24] And it's like, hey, this is the [47:25] constraint in the business right now. [47:26] This is what we're doing to resolve the [47:27] constraint. These are the next steps to [47:29] get the thing resolved. And then when [47:30] the when the hot potato is resolved, [47:31] there's an email that goes out and says [47:32] hot potato resolved. It's done. And then [47:34] those people go back to their normal [47:35] course of business. And it's not like [47:36] they're in a meeting every single day [47:37] forever. They're in a meeting until the [47:38] job gets done, right? and the turtle [47:40] physically and it's like a funny silly [47:42] thing. It's like we have now there's [47:43] like a plush turtle, there's a ceramic [47:44] turtle, there's like all kinds of [47:46] turtles around the office and there's [47:47] like a little version of this where we [47:49] like need to unblock and it's it's this [47:50] concept of like take your work really [47:52] seriously but don't get yourself that [47:53] seriously. Like we have freaking turtle [47:54] stuffed animals all over the place and [47:56] you know little inside jokes like this [47:57] but they're really motivating for people [47:59] and people take pride in having the [48:00] turtle because like it's my job now to [48:02] unblock the business and to move the [48:03] business forward. So we talk about, you [48:05] know, that's a tool, right? You know, [48:07] every company uses metrics and [48:08] dashboards, but I think we do it in a [48:10] really thoughtful way. So if you walk [48:11] around the office, what do you have? It [48:12] looks like a Best Buy. There's TVs [48:14] popping out everywhere. And every TV has [48:17] metrics that matter to the company on [48:20] those TVs, good ones in green, bad ones [48:22] in red. And we joke that every team at [48:25] the company, as you as you noted, we all [48:26] sit in kind of bullpen seating, open [48:28] floor plan. Every team of the company [48:30] has TVs that literally hang over their [48:32] head with the metrics that matter to [48:34] that team. Good ones in greed, bad ones [48:36] in red. And so you show up every day and [48:38] you know things are good or things are [48:39] bad, right? Because the TVs are telling [48:41] you so, right? And those metrics are [48:43] really focused and specific. And if [48:46] they're not high signal, the leaders of [48:49] the company, their job and everyone at [48:51] the company, their job is to point that [48:52] out and be like, "Hey, that's a bad [48:53] dashboard." Like that dashboard isn't [48:54] telling us something useful. That's [48:55] guiding us towards the wrong thing. [48:56] Right? And so if you measure something [48:57] that's not useful, you're going to end [48:59] up going off in directions that are not [49:00] actually moving you forward. And so the [49:02] metrics have to be super specific. They [49:04] have to be oriented towards the north [49:05] stars and they have to be very visible [49:07] and readable. And that's been a powerful [49:09] tool to get everyone focused on the [49:11] right things and then onboarded quickly [49:13] because if you just joined the company [49:14] and you don't know about the north stars [49:15] and you're just learning about them for [49:16] the first time and you're not you're [49:17] like still kind of wrapping your head [49:19] around you know our mission vision and [49:20] strategy these metrics that point you to [49:22] very specific things for your team [49:24] really help you get focused quickly and [49:26] then over the time of the over your time [49:29] at the company you get steeped in our [49:31] mission our vision our strategy and I've [49:33] told you about you know there's a [49:34] presentation I give every quarter called [49:36] engine of success which I'm actually [49:37] giving tomorrow I'm excited for it which [49:39] explains our formula for winning right [49:41] it's like how do we win it's our super [49:43] top secret you know like this is our [49:45] formula for success this is how we beat [49:47] the competition and it's a lecture [49:49] effectively that I give to the whole [49:50] company and it's really designed for the [49:51] new cohort of people that that joined in [49:53] that quarter because I want everyone [49:55] from the interns to the most senior [49:57] people to understand like how are we [49:59] going to do this thing what's the plan [50:00] right I think a lot of companies when [50:02] you join them at our scale 500 people [50:04] and growing really fast they're like hey [50:06] here's your desk here's your Peter, [50:07] you're working on this very small part [50:09] of the thing. Like, good luck and do a [50:11] good job. I really care. Justin and I [50:14] really care that the leadership team [50:15] here, we all really care about everyone [50:16] understanding why we're here, what we're [50:18] after, and how we're going to do it [50:20] because we want people to come up with [50:22] all kinds of good ideas on things that [50:24] are not necessarily directly in their [50:26] scope because we want to hear them. Good [50:27] ideas can come from everywhere. And so, [50:28] and then you have more context on the [50:30] specific thing that you're working on [50:31] and how it impacts the broader business. [50:33] And so we teach these things and it's [50:34] really my job and I'm I'm kind of like a [50:36] coach and a teacher to the company in a [50:38] lot of ways is a big part of my job. [50:40] It's like writing these monthly updates, [50:41] giving these quarterly presentations, [50:43] really clearly explaining these [50:44] northstars, making them the right north [50:46] stars, putting them on a poster, making [50:47] sure all the metrics are right, guiding [50:49] us in the in the right direction that [50:52] working on the business so that people [50:53] working in the business, which I also [50:54] work in the business every day and I [50:56] love doing that, can make sure they're [50:58] working on the right things. [50:59] >> Yeah. I've heard you describe your role, [51:00] you view your role as like a player [51:01] coach. Can you say more about that? [51:03] >> Yeah. So I think the code side is the [51:05] working on the business and you know [51:07] also there's a there's a personal [51:08] element to running a company which is [51:11] man we are grinding like it is hard like [51:13] this this group hustles. I think you've [51:15] seen that working with the team and [51:16] meeting the team and I mean it is busy [51:17] here at 9:00 p.m. is busy here on [51:19] Saturdays and it's stressful and so [51:22] there's a lot of you know helping the [51:26] team and the people the humans do the [51:28] best work of their career and that's a [51:30] lot of the coach side and working with [51:32] them and trying to you know I studied [51:33] psychology in college which definitely [51:34] doesn't make me an expert but like you [51:36] know I've read all kinds of behavioral [51:38] psychology books and and it's a topic [51:39] that I really enjoy learning about and I [51:41] I love helping people become the best [51:43] version of themselves and then of course [51:45] guiding the company towards the right [51:46] north stars the right metrics the [51:48] quarterly goals, focusing on the right [51:50] things. That's really the coach side. [51:51] And then the player side is I also want [51:54] to be a world-class IC. And there are [51:56] things that that I can do daytoday in [52:00] the business to unblock the company to [52:02] help go put points on the board. You [52:04] know, to use a sports analogy, I'm a big [52:06] basketball player. Like when the game's [52:08] on the line and the team needs a bucket, [52:10] they can give me the ball and I can go [52:12] score, right? And I can also guard the [52:13] best player on the opposing team. And I [52:16] also know if I'm double teamed who to [52:17] pass it to, right? And it's like you got [52:20] to be able to drop the play and help, [52:23] you know, motivate your teammate when he [52:25] misses a big shot. And also, if your [52:27] team needs a bucket, like you got to go [52:28] get a bucket. I interrupted you earlier. [52:31] You were saying some insights you drew [52:32] about uh entrepreneurship from um from [52:35] starting out investing. What were you [52:37] going to say about that? [52:38] >> I mean, I think investing, maybe this [52:41] was just my perspective of it, is the [52:42] art of studying good businesses. is what [52:44] makes a good business and what makes a [52:45] bad business and how do you predict [52:46] which ones are going to be good and [52:47] which ones are going to be bad. I'm [52:48] quite competitive and and quantitative [52:50] and I I'm like interested in things like [52:52] accounting and capital allocation and [52:54] capital market. [52:55] >> Shocked how many of the robber barons [52:56] like started out accounting, you know, [52:58] like it's the language of business. [53:00] Exactly. It's it's you have to be [53:02] steeped in it to understand uh what [53:04] makes a business tick and what makes a [53:06] healthy business and an unhealthy [53:07] business. And so um and there's there's [53:09] a lot of also the study of people too. [53:11] back to the psychology point and you [53:12] know I think this is one of the things [53:14] that makes Josh our mutual friend and [53:15] and who I used to work for at Thrive [53:17] world class at his job is he's just an [53:19] incredible identifier of talent and he's [53:20] really good at understanding like who's [53:22] going to be a good CEO and not and you [53:24] know what what's a good leadership team [53:25] and not and so my interest in and and [53:28] and and passion for investing was [53:30] largely driven by this is a place where [53:32] I can pick up a lot of skills to become [53:33] a great entrepreneur I can learn the I [53:34] can learn accounting I can learn capital [53:35] allocation I can learn what makes great [53:38] leadership teams um and I I still love [53:41] thinking about businesses and thinking [53:43] about investing primarily as a means to [53:47] the end of learning how to be a great [53:48] great entrepreneur. Like the companies I [53:50] want to invest in are the ones run by [53:52] entrepreneurs that I want to emulate and [53:54] I want to learn from. [53:55] >> Tell me some of the entrepreneurs you [53:56] want to emulate. That's interesting. [53:57] >> I mean my dad's at the top of the list. [53:59] Uh but I I really admire uh Patrick [54:02] Collison and and John as well, but the [54:03] Colson brothers, I think the way that [54:04] they've run that business is is really [54:06] impressive. the culture that they've [54:07] built, the pace of execution, and the [54:09] way that they've continued to kind of [54:11] evolve the company over time as it's [54:12] gotten bigger. Obviously, they started [54:14] serving startups, now they're serving [54:15] enterprises. They're doing a lot of [54:16] interesting things with kind of emerging [54:18] technologies like stable coins. I really [54:20] admire Eric and Kareem at RAMP, who [54:22] obviously are close friends of yours as [54:23] well. And the way that they have built a [54:27] in an incredible talent magnet in a [54:29] category that on the surface is maybe [54:31] not all that sexy, and then they've [54:33] turned that category into something [54:34] really sexy. and they've built an [54:36] incredible uh suite of products and [54:38] tools for companies that are incredibly [54:40] useful in an area where you wouldn't [54:42] have otherwise thought that that was [54:43] possible or at least I I wouldn't have. [54:45] And they're just great operators. [54:46] They're incredibly customer obsessed. Uh [54:48] they're really focused on the product [54:50] and they want to drive outcomes for [54:51] their customers. Kind of back to the [54:52] point of like you care about [54:53] affordability, reliability. They care [54:55] about saving you time and money. That's [54:56] all they care about, right? And and you [54:58] know that's why they're able to [54:59] differentiate in that space. And so [55:00] those are are two different companies. A [55:03] company like ramp could build a great [55:05] brand in you know what many people [55:06] consider like an unsexy category. I feel [55:09] you base is actually it's the only brand [55:13] like in power that I can even think of. [55:15] We we talk about building the first [55:17] beloved brand in energy all the time and [55:19] you know you think about just consumer [55:21] products like [55:22] >> I I think there's another thing like [55:24] studying businesses being an investor [55:26] and the value of that and the path to [55:28] being an entrepreneur. I think that [55:29] brands are one of the most underrated [55:31] moes in business, right? Coca-Cola and [55:33] Nike. Um, you know, these brands are so [55:36] it's hard to put a dollar amount on how [55:37] how valuable they are. [55:38] >> You've read 0ero to1, I assume. [55:40] >> Of course. I think I just read it for [55:41] the fourth time. I just did another [55:42] episode of Founders on it. And you know, [55:44] he was talking about all the ways to [55:45] build a creative monopoly. And in that [55:47] book, the funny thing he's like, well, [55:48] brands won. He goes, I just don't [55:50] understand it. to your point, [55:52] >> it's so valuable and [55:55] there really aren't any beloved brands [55:58] and energy which makes the opportunity [55:59] even bigger because it's [56:00] counterpositioned. It's unique, right? [56:02] And so if you're able to do a thing that [56:03] no one has ever done in your space, you [56:05] stand out, right? And so being able to [56:07] build a beloved brand in this category [56:09] has become a huge advantage for us. [56:11] >> Are there any other entrepreneurs that [56:12] you like emulate or you study? I mean, [56:14] obviously you mentioned Elon a few [56:15] times. [56:16] >> Yeah, I mean Elon is obviously one of [56:18] the greatest of all time. Um, and I [56:20] think I' I've more so learned from the [56:22] people that I've worked with that have [56:23] come from his companies and the way that [56:24] they operate than than Elon himself. [56:27] >> What have you like what have you learned [56:28] from the people that worked for him? [56:29] >> Mostly this maniacal focus on critical [56:32] path and resolving constraints. And I've [56:34] also learned a lot of this from Antonio [56:35] Graces who's on my board and and has [56:37] worked fairly closely with Elon for [56:38] decades. [56:40] The first year or two of working with [56:41] Antonio, basically every conversation I [56:43] had with him, and still to this day, [56:44] this is, you know, the main focus of all [56:46] of our conversations, every conversation [56:48] was the same. Hey, Antonio, how's it [56:50] going? Good. How are you? What's up? Um, [56:52] you know, Zach, uh, what what's your [56:55] constraint? Like, what's the constraint [56:56] of the business? And I would just answer [56:58] the question and that's all we would [56:59] talk about. That's it. What's the [57:00] constraint? What's the constraint? [57:01] What's the constraint? Like, if we agree [57:03] on the mission, the vision, and the [57:04] strategy, okay, we're good there. what's [57:06] constraining us to get to that. Let's [57:10] just focus all of our time and energy on [57:11] that. And that kind of flows into all [57:16] the little things in process and kind of [57:18] how people operate that show up kind of [57:20] in the day-to-day with the metrics and [57:21] the dashboards and the hot potatoes and [57:24] the turtles. Like all that is is just [57:26] trying to get to what is constraining [57:27] our business and how do we resolve those [57:29] constraints that are on the critical [57:30] path on the way towards our mission. [57:31] >> There's a weird idea here. I've said it [57:33] a few times on the other podcast, but [57:35] I'll just say it here. It's like I'm [57:36] obsessed with things that last for a [57:37] very long time. And so I looked I was [57:39] like, "Okay, what humanmade things last [57:40] longest?" It's just like, "Well, uh, [57:43] countries last longer than companies." [57:44] Like companies can last a long time, but [57:46] countries last longer in countries. What [57:47] last longer in countries? And it's just [57:49] like, well, is there anything humanade [57:50] that lasts longer than religions? And I [57:52] actually think there's like a lot [57:53] companies can learn by studying [57:55] religion. And just a few of these ideas, [57:58] which like, well, first you mentioned [57:59] earlier like whether it's an intern or [58:01] the CEO, I want everybody to have a [58:02] shared base of knowledge. Religions do [58:04] this. Excellent. They usually it's a [58:05] book. We all agree on it. We all own it. [58:07] We don't like we read it one week and we [58:10] we meet together next week. It's like, [58:11] "Oh, no. We're done with that book." No, [58:12] we go back to that book over and over [58:13] and over again. We have the same [58:14] conversation over and over again. Uh we [58:16] find places to gather with with [58:19] like-minded people, just people that [58:20] believe the same things we do in regular [58:22] intervals. Like even if they believe [58:24] different things, religious have like [58:25] these like these uh parallels or these [58:27] um like like similarities that I think [58:30] companies should use. So I love this [58:32] idea. This is what pops to my mind when [58:34] you're talking about, hey, I'm on the [58:35] phone with this guy all the time over [58:37] two years and it's just the same [58:38] conversation over and over again. [58:40] Explain why that's valuable though [58:41] because it's focusing and it just forces [58:43] you. It's kind of the uncomfortable [58:45] thing. It's like we don't want to talk [58:46] about like all these fun strategic [58:48] things and all these bets we can it's [58:49] like what is constraining us towards our [58:51] mission? Let's just focus on that. It's [58:52] incredibly clarifying and it's [58:55] uncomfortable at first, but over time it [58:57] becomes very comfortable. [58:58] >> Wait, why why would it be uncomfortable [58:59] at first? Because the natural tendency [59:03] is to talk about all the different [59:05] things that are going on and all the [59:07] different opportunities available to you [59:08] and the hard thing is to focus and just [59:11] focus on the most important thing that [59:13] is the constraint in the in between you [59:15] and your goal. It's kind of like um uh a [59:18] cope if you will to talk about the other [59:20] stuff because it's like oh yes there's [59:22] this constraint but like there's all [59:23] this other stuff going on. It's like no [59:25] no no focus on the constraint. I think [59:27] my co-founder Justin is very very good [59:29] at this. Like Justin and I every Sunday, [59:31] you know, our one-on- ones are on [59:32] Sundays and we we have these kind of [59:34] strategy conversations on Sundays and we [59:36] don't ever talk about what's going well. [59:38] Like, [59:40] you know, we got a lot of work to do, [59:42] but I think could largely say the last [59:44] three years have gone unreasonably well. [59:46] You would never know it by by tuning in [59:49] to the conversations that Justin and I [59:50] have on Sundays because there's no [59:51] benefit to that. Like that's in the [59:53] past. We're only looking forward. What [59:54] problems can we solve? What things are [59:56] we worried about? What constraints can [59:57] we relieve? That is really the only [60:01] thing that matters. And all the other [60:02] stuff is kind of just noise. [60:03] >> Yeah. Mer and Buffett have a great line [60:05] on this. They're like, "Tell me the bad [60:06] news cuz the good news takes care of [60:07] itself." [60:07] >> Exactly. Is there anything else that you [60:10] think is beneficial to these [60:11] conversations? Like how many times [60:14] whether you're talking to a board [60:15] member, your co-founder, [60:17] how many times are you is it just [60:19] helpful for to organize your thoughts [60:21] with somebody else? Like you know um [60:23] Charlie Mer has this this thing called [60:24] the rangutang theory. Have you ever [60:26] heard of this? [60:26] >> No. [60:27] >> Okay. So he says that an intelligent [60:28] person could sit down and they can have [60:30] a one-sided conversation with a [60:31] rangutang for you know 30 minutes or [60:32] whatever the case is, right? Get up, [60:35] leave. Rangutang obviously says nothing [60:36] and the person that had that onesided [60:38] conversation actually benefits just [60:39] being able to organize your thoughts out [60:41] loud. This is the notebook, right? This [60:44] is this is the notebook, right? This is [60:45] the monthly updates. This is like write [60:47] clearly to think clearly. It's like and [60:49] my team, you know, when I have a good [60:50] idea, like I write it down first and I [60:52] put it in front of them. I'm like, "Hey, [60:52] I wrote this thing. What do you think?" [60:53] And like, "Oh, I disagree with this. I [60:55] disagree with that." Then we debate the [60:56] writing, right? It's like that's why [60:59] every night I sit down with this [61:00] notebook and I I I stare at it and I [61:02] kind of force myself to write stuff. Uh [61:04] because it just allows you to gather [61:05] your thoughts and and then, you know, I [61:07] I I chew things over with Justin. And I [61:09] treat things over with Jared, with Dana, [61:10] with Cole, with Dino, with Zena, with my [61:13] dad, with my with Lee, with Antonio, [61:16] with you know other friends that, you [61:18] know, like Zach and, you know, other [61:22] people who are, you know, around the [61:24] business, have a lot of context, have a [61:26] little bit of context, um, have [61:28] expertise on the topic. And I think [61:30] writing, I mean, how many times have you [61:33] gotten just like a document from me? [61:34] It's like, what do you think about this? [61:35] Right? Like that's just my way of of [61:38] communicating ideas and and that is how [61:40] I get my thoughts out of of my head is [61:42] to write. [61:43] >> I came across this other thing uh the [61:44] other day. It's called like rubber duck [61:46] programming where a programmer would sit [61:48] there. They'd have like kind of like [61:49] your turtle thing. It's like the rubber [61:51] duck is sitting here. It's look and I'm [61:52] explaining the code I wrote and why I [61:55] did it this way to the rubber duck and [61:56] just hearing me put like saying it out [61:59] loud. It's like clarifyful for [62:01] clarifying thoughts. I do this all the [62:02] time because obviously my other podcast [62:03] is a solo podcast and I'll sit down to [62:05] record and I'll be thinking, "Oh, I [62:06] understand why this guy did this or what [62:08] happened here and then I hear myself [62:09] talking like I don't actually understand [62:10] this. I have to sing with it for [62:12] a little bit longer." Like it's a it's [62:13] fascinating how how helpful just having [62:16] like even a a a soundboard that doesn't [62:18] speak back is for your thoughts. And we [62:20] were talking about the cap table and our [62:22] investors and you know you know most of [62:24] if not all of of my my major investors [62:26] and this is I mean I'm constantly [62:29] sending them things that I write and [62:30] calling them in early hours in the [62:32] morning and you know late hours of the [62:33] evening. I'm just trying to brainstorm [62:34] and just kind of chew on things with [62:36] them and and um it's it's incredible. [62:38] >> Who do you think's been the most helpful [62:40] out of any of your investors? [62:42] >> I mean honestly our mutual friend Zach. [62:43] >> We can't say his last name. [62:44] >> We can't say his last name. uh uh who is [62:47] not even one of our major investors but [62:49] is just like a you know very close [62:50] personal friend and and and is a base [62:52] investor is one of the best business [62:54] strategists I've ever met uh I think [62:56] probably the the best investor of our [62:58] generation one of the best company [62:59] builders consider himself an investor uh [63:02] I'm seeing him later on today but I I [63:04] got to tell you a story about this so [63:06] yeah go ahead a friend of mine was [63:08] having uh an an issue he's got two [63:10] companies he couldn't figure out should [63:12] I sell one should I focus on another and [63:14] I had my own opinions on just obviously [63:15] focus on one thing. Um, and I [63:17] just arranged for them to sit down. [63:19] >> Very predictable by you. [63:20] >> Exactly. Exactly. And I arranged to sit [63:22] for them to sit down. 10 minutes later, [63:24] it took all 10 minutes of our mutual [63:26] friend identifying exactly what's wrong. [63:28] And then the guy I connected with text [63:30] me like he got to the heart of his issue [63:31] like right away. I was like, "Yeah, [63:32] that's why he's so good. He [63:34] [laughter] he he just is a brilliant [63:37] business strategist and and operator and [63:39] has seen a lot and he listens really [63:41] well. I think he's very patient and [63:42] thoughtful. Uh, and he's been incredibly [63:44] helpful. My dad is is near the top of [63:45] the list. [63:46] >> Well, we we talked about this when we [63:47] were on the phone yesterday cuz I was [63:48] supposed to see him last night and I was [63:49] like, dude, I got to get some sleep. [63:51] >> None of the conversations with him is [63:52] going to be 5 minutes. If you're his [63:54] friend, it's going to be like 3 hours [63:56] and it's going to be incredible and [63:57] you're not going to be able to sleep. I [63:58] was like, I got to get up at 5 next day. [64:00] I'll see you tomorrow. [64:01] >> Totally. Yeah. And so, uh, I'm very [64:03] lucky to have a lot of people, you know, [64:04] like Josh who I worked with for a couple [64:06] years and is obviously a major base [64:07] investor. Brad Gersner is is a great [64:09] thought partner and is someone I call [64:11] all the time with crazy ideas. Leaf [64:12] Fixel is, you know, his his firm edition [64:14] is our largest investor. Uh Antonio and [64:16] his partner John Schulen are are super [64:18] helpful in this regard. [64:19] >> But if you had to only pick one. [64:22] >> I mean, it's my dad. It's the truth. [64:23] >> There you go. [64:24] >> Yeah. [64:24] >> Okay. Well, [laughter] [64:26] >> he knows me better than anyone. He's [64:27] known me longer than anyone. Uh except [64:29] my twin sister technically. I was [64:31] talking to him yesterday and uh one [64:34] thing that we we said I was just like [64:36] like I I I one thing I respect about you [64:38] is like your just your fusive praise and [64:40] admiration for him. You know, it was [64:42] really cool. But I was like, "Listen, [64:44] Zach thinks that he loves you." I go, [64:46] "Zack doesn't know what love is until he [64:48] has he holds his first child in his [64:50] hands." And your dad laughed. He's like, [64:51] "He's absolutely right. Like the way you [64:53] feel about him, I promise you it's a [64:55] love flows down the generations of [64:57] humanity. like he feels that way a [64:58] thousand times more about you and you'll [65:00] understand. You'll appreciate [65:02] him even more. Hopefully you I maybe [65:04] later on tonight you start working on [65:05] the baby. [laughter] Uh but whenever [65:07] that happens like 9 months and one day [65:09] from now when you're like David was [65:11] right about this. Like and then you're [65:12] going to appreciate your dad even more [65:13] which is going to be which will blow [65:15] your mind. I'm looking forward to that [65:16] for you. [65:16] >> I uh I'm so excited to have kids. I'm [65:18] one of four and um I have an incredibly [65:20] close relationship with both my parents [65:21] and my mom I mean if you think my dad is [65:24] competitive my mom is on a whole another [65:25] level. I mean she is saw the picture in [65:27] your dad's office. Your mom's a beast. [65:30] Like an athlete. Like a [65:31] >> she's an incredible athlete. She's a [65:32] world class endurance athlete. She's on [65:34] the Iron Man. [65:35] >> Crazy for your birthdays where it's [65:36] like every birthday she's like, I'm [65:37] going to ride like 100 miles plus your [65:39] age or something. [65:40] >> She every year would ride 100 miles plus [65:42] plus our age for all four kids. Not [65:44] because we asked her to, but because she [65:46] wanted a challenge and she wanted to [65:48] kind of commemorate the the birth [65:50] giving, if you will. and she's just an [65:52] intense person with an unbelievable [65:55] amount of love and affection and care, [65:57] an amazing mom, uh an amazing wife to [66:00] him and and I think, you know, he he [66:01] constantly talked about how, you know, [66:03] she's the secret weapon and uh it's [66:05] really true and she's the she is the [66:09] engine of the family and the the kind of [66:11] cornerstone. We are definitely a [66:12] matriarchal family uh that kind of [66:15] revolves around her in the best way. I'm [66:17] just so lucky to to call her my mom and [66:19] and to get to learn from her and I [66:21] continue to be inspired by her every [66:23] day. I mean, she's she's a force of [66:24] nature. [66:25] >> I'm gonna switch gears uh real fast cuz [66:28] I saw a factory tour of yours. What is [66:31] this cube? Can you explain like the [66:33] evolution? I saw the I went through all [66:34] your company updates. I saw the [66:36] evolution of what you guys were [66:37] installing, how you were making [66:38] batteries, the lessons that you were [66:39] learning, and now this is kind of like [66:41] the next generation, your latest [66:42] product. Can you explain like all the [66:44] learnings that went into it and why it's [66:46] looks the way it does? [66:46] >> Yeah, the the core. So, it's called the [66:48] base core. [66:48] >> Sorry, the core. [66:48] >> It's called the base core. [66:49] >> They call it the cube. [66:50] >> It's okay. It looks like cube. [66:51] >> All right, my bad. [66:52] >> Looks like it's called the base core and [66:54] it is our customuilt battery. And it is [66:58] the output of the last 3 years of [67:01] learning how to install, [67:03] operate, and manage tens of thousands of [67:07] distributed home batteries. It's [67:08] completely designed by us from the [67:10] ground up. It's manufactured over there [67:12] across the street, a supply chain that [67:13] we entirely control and manage. And it's [67:16] purpose-built for the use case. It's [67:18] lower landed cost bill of materials. It [67:20] installs much faster. It switches over [67:23] much cleaner. It has more power output, [67:25] more energy duration. And it's really [67:28] designed to be a grid resource. And it [67:30] is the kind of embodiment of our [67:33] strategy. We talked about mission vision [67:34] strategy strategy of compounding cost [67:36] advantage through vertical integration [67:37] and technology. This is the vertical [67:38] integration and technology coming to [67:39] life. And so now our business goes from, [67:43] you know, good economics installing [67:44] offtheshelf hardware to incredible [67:46] economics with this vertically [67:47] integrated cost structure and a product [67:50] that we can scale at an order of [67:51] magnitude greater than the previous [67:53] product because we were tapping out our [67:55] existing supplier. Like we were buying [67:56] all their stuff and they couldn't make [67:57] batteries. I mean we're sold out through [67:59] November and it's August, right? So we [68:03] cannot meet the demand with the supply [68:04] chain that exists today. we have to do [68:06] it ourselves, right? And so we're [68:07] building factory 1, we're building [68:08] factory 2, we're bringing on modular [68:10] lines and invert lines as fast as we can [68:12] to meet the demand. The only way to do [68:13] that is with vertical generation and the [68:15] base core is is the embodiment of that [68:17] strategy. Explain why though. Because [68:21] when you rely on suppliers, you're kind [68:23] of at the whim of their execution. And [68:25] when you do it yourself, you control it. [68:28] You control your own execution and you [68:30] can kind of rise to the occasion to meet [68:31] the demand. And you can invest the capex [68:34] to, you know, you have the conviction. [68:37] If I go to the supplier and I say, [68:38] "We're going to be the fastest growing [68:39] energy company of all time." Three years [68:40] ago, if I say, "We're going to be the [68:41] fastest growing energy company of all [68:42] time. We're going to install tens of [68:43] thousands of batteries in the next 3 [68:45] years and then hundreds of thousands of [68:46] batteries in the next 5 years, and we [68:48] need you to go invest hundreds of [68:49] millions of capex to build the [68:50] manufacturing capacity to meet our [68:51] demand." [68:52] >> They're not going to do it. [68:52] >> They're going to be like, "Get out of [68:53] here, kid." Like, what are you talking [68:54] about? Like, send me the PO and then [68:56] we'll talk. And so, we got to do it [68:58] ourselves. We have to put up the capex. [69:00] we have to build the the execution [69:02] capabilities and expertise to actually [69:04] go do that stuff. And then when you do [69:06] it, you have a better cost structure [69:08] because that OEM that you were buying [69:09] from no longer collects a margin. That's [69:10] your margin to keep and you have more [69:12] control over the scalability and you can [69:15] go make those kinds of forward [69:16] investments to, you know, bet on future [69:19] growth. How deep can you take this [69:20] vertical integration? Like when I when [69:21] you were just speaking was again I had [69:23] this like you know this through our [69:25] conversations like I don't I'm not [69:26] really thinking about Zach and Bass. I'm [69:28] thinking about like, oh, this reminds me [69:29] of Henry Ford took vertical integration [69:31] way further than you could even think [69:33] that somebody's manufacturing cars to [69:34] the point he bought his own railroad [69:35] because he was annoyed at he couldn't [69:37] get his raw materials like fast enough. [69:40] He's like, I can actually run a railroad [69:42] better than you guys and I will prove [69:43] it. He wind up running it, optimizing, [69:44] and then I think he sold it for like a [69:45] $30 million profit, too. Like, so how [69:47] far can you take this? [69:48] >> So, there's a lot to say here. I mean, [69:49] we could take it. I mean, we could go [69:51] buy a lithium mine and start refining [69:53] lithium and, you know, make our own [69:54] cells and [69:55] >> all the way down to mining. [69:56] >> Sure, you could, right? Right. I mean, [69:57] >> call Travis. [69:58] >> Call Travis. [laughter] Uh, we could do [70:01] that, but I think it's how far do we [70:03] want to take it and win, right? And over [70:05] time, you know, there's kind of like [70:07] diminishing but not to zero, maybe [70:08] plateauing or asmmptoting returns to a [70:10] certain level of vertical integration. [70:11] And then you once you reach a certain [70:12] scale, it makes sense to vertically [70:14] integrate further and then further and [70:16] then further. And based on our current [70:18] scale, we like the position of final [70:20] assembly, test, and pack. We design [70:21] everything. The fabrication is largely [70:23] done by third parties, our suppliers. We [70:25] get all the parts. We stick everything [70:26] together and we we we we test it and we [70:29] pack it and then we go install it, own [70:30] it and operate it. Over time, we could [70:32] reach a scale where you get economies of [70:34] scale and you get benefits basically [70:37] that outweigh the cost of making the [70:40] cell, refining lithium, mining lithium. [70:42] >> That has to excite you though. [70:44] >> I was going to say the way you are [70:46] >> of course but but but but this is a this [70:48] is a multi-deade 50-year journey that [70:51] we're on. And in year three, it doesn't [70:53] make sense for me to spend any of my [70:55] energy and brain power thinking about [70:58] making sales, [70:59] >> right? In year 30, it almost certainly [71:01] will. [71:02] >> Okay. Do you think you're going to get [71:03] to year 30? And I don't mean that the [71:05] company's not going to be successful. [71:06] Oh, I I love your I love your [71:07] competitive. [laughter] [71:10] >> Of course. [71:11] >> Um, no. What I mean about this, like [71:14] there's something there's no other word [71:17] that I have for this is just [71:18] perverted in the entrepreneurship [71:19] ecosystem. I hate that there's even an [71:21] entrepreneurship like industrial [71:22] complex. This is like that's run largely [71:24] by investors which I can't stand [71:26] which is start scale sell. And I'm like [71:29] no like well then what are you going to [71:30] do? Like your exercise strategy should [71:32] be death. So I've had two founders on [71:35] recently where we talked about this like [71:36] you know Scott Woo. Yeah. Like uh he's [71:38] they're throwing billions at this kid. [71:40] Billions and he's saying no so far and I [71:42] hope he holds on but his whole thing and [71:44] I think he will cuz he's already rich. [71:46] Um and I believe and he's super super [71:48] competitive. And then I just had Torson [71:49] Real who's the founder of Helzing who it [71:51] has it's not out yet but he's just like [71:52] he I think started the conversation cuz [71:54] his whole thing is like Europe needs its [71:56] own way to defend itself. This is not a [71:58] business. This is a mission. He [71:59] goes we're not selling this for any [72:01] amount of money. What's your opinion on [72:02] this? Look, you said it. It's what are [72:04] you solving for? Are you solving for the [72:06] mission? Are you solving for a paycheck? [72:08] >> I think you could probably guess based [72:09] on where I come from that I'm not [72:11] solving for a paycheck. Right? And the [72:13] way I talk about the business and the [72:14] way we act and the way the business is [72:15] run, we're here to achieve a mission. [72:18] That mission is kind of never ending, [72:20] right? Human prosperity, energy, [72:22] abundance, affordable, reliable power. [72:23] We're never like, well, we did it. Like [72:25] we we did the affordable reliable power [72:26] thing. Like what's what's next, right? [72:28] Like that will that is a mission that [72:31] will live on forever. Probably out [72:33] outlive the company. Outlive me. [72:34] Hopefully the company outlives me and [72:35] then and then the mission will will go [72:37] on forever. And eventually, you know, [72:38] either either, you know, the the um [72:42] something will take out the earth that [72:43] will kill the company, right? [72:44] >> [laughter] [72:46] >> this company's going to last to the end [72:48] of the universe. [72:48] >> That's the plan, right? And like um and [72:51] so [72:51] >> your dad has a great line about this [72:52] when he was fighting Carl icon like why [72:54] don't you just start another company? [72:55] He's like I'll care about this company [72:56] after I'm dead. [72:57] >> Well, you asked me like what would it [72:59] require for your dad to stop working on [73:01] Dell and I told you that you'd have to [73:02] kill it. Yeah. [73:02] >> Right. And so the it's about the [73:04] mission. It's about like I get to it is [73:06] the honor of a lifetime of a [73:08] lifetime. blessing of a lifetime to get [73:10] to come wake up every day and get to [73:12] work on this mission with this group of [73:14] people and come into this building and [73:16] you know when I'm not here I'm like [73:18] wanting to be here right and I'm I'm [73:19] wanting to think about it and like I'm [73:21] you know I'm constantly obsessing over [73:25] moving this mission forward and that'll [73:27] never change and your point on vertical [73:30] integration like year three year 30 year [73:33] 50 like the problems ahead of us or the [73:36] opportunities that we can go after that [73:40] will move us closer to that mission will [73:42] change, right? They'll look more capital [73:43] intense. They'll look like, you know, [73:45] vertical integration or, you know, going [73:47] going going uh deep, going wide, like [73:49] that'll all change, but it's all about [73:51] the mission. It always will be. And the [73:54] reason why, you know, we're focused on [73:56] other things right now other than making [73:57] cells and refining lithium and and [73:59] mining lithium is because there's a [74:00] bunch of other opportunities across the [74:01] stack that we want to go chase that are [74:03] all aligned with the mission. At a very [74:05] high level, energy is four things. make, [74:07] move, store and sell, right? You have to [74:09] make it. Generation, you have to move [74:11] it. Transmission, distribution. So, you [74:12] have to generate electricity. You have [74:14] to move it to where it's made. Store [74:17] battery storage. You have to store it [74:18] because it's not always used when it's [74:20] made, right? You have to move it because [74:21] it's not used where it's made. You have [74:22] to store it because it's not used when [74:23] it's made. And then you have to sell it. [74:25] Make, move, store, and sell. Generation, [74:26] transmission, distribution, storage, and [74:29] retail energy. And all the things [74:30] around, you know, the software and all [74:31] the things around selling energy. We [74:33] started with store and sell because we [74:35] thought that was the best place in terms [74:37] of scale and return on capital to enter [74:39] the market. But we have ambitions across [74:41] make, move, store and sell because if we [74:44] are oriented around the mission which is [74:45] affordable and reliable electricity and [74:47] electricity is four things, if you want [74:50] to have the biggest impact on the [74:51] mission, you got to do all four things, [74:53] right? So rather than deeply vertically [74:55] integrate in year three on store, I'd [74:58] rather go build great solutions to drive [75:00] down cost and drive up reliability in [75:02] the industry in make, move, and sell. [75:06] And then over time, as opportunities [75:08] present themselves to get better at [75:10] make, move, store, and sell, we'll do [75:11] that. Whether that means refining and [75:13] mining lithium or not. And then there's [75:15] this new kind of interesting angle where [75:17] we take that stack that we've developed [75:18] and make move store and sell stack and [75:20] we point it at the largest and fastest [75:22] growing energy consumer in the world [75:24] which is AI which we we we talked about [75:25] at the beginning of the conversation. [75:26] >> Okay. So this is your last company. [75:28] >> Absolutely. [75:29] >> Okay. Since you're going to be doing [75:30] this for the rest of your life, I'm [75:31] going to be doing what I'm doing for the [75:32] rest of my life. I'd love if you come on [75:34] every like 6 months whenever you want. [75:36] We'll have more conversations and then [75:37] over time over the next few decades [75:39] we'll have like an ongoing live history [75:41] of bass. [75:42] >> I love that. I mean, I love every [75:44] conversation with you. You always push [75:45] me to think bigger, push harder, really [75:48] analyze why I'm doing things, draw [75:49] comparisons to other uh entrepreneurs [75:52] throughout history, and I I always learn [75:53] something in our conversation. So, I'd [75:54] love that. [75:54] >> Thanks for making the time, man. [75:55] Appreciate it. [75:56] >> Awesome. [75:56] >> I hope you enjoyed this episode. Please [75:58] remember to subscribe wherever you're [75:59] listening and leave a review. And make [76:01] sure you listen to my other podcast, [76:03] Founders. For almost a decade, I've [76:05] obsessively read over 400 biographies of [76:07] history's greatest entrepreneurs, [76:08] searching for ideas that you can use in [76:10] your work. Most of the guests you hear [76:12] on this show first found me through [76:15] Founders.