Alan Chang says Tesseract Energy will build and own renewable generation, then sell customers virtual renewable power, aiming to undercut energy suppliers that just resell bought power.
Alan Chang, an early Revolut employee, says the only way to beat bigger rivals is hiring better people and working harder, a lesson he is applying to a team of about 26.
Tesseract has raised $78m, mostly for asset purchases, and plans to move generation off its balance sheet into a decentralized network over time.
Ex-Revolut founders want to own the power they sell
Tesseract Energy is betting that a renewable supplier should own its generation rather than resell power, which leaves tariffs tied to gas prices. It starts with assets on its own balance sheet, then aims to open ownership to anyone through a decentralized network. The founders, both early Revolut staff, apply that company's habits of hiding complexity, hiring hard and working relentlessly.
Takeaways
Tesseract owns generation instead of reselling power. Most suppliers buy power and resell it, so tariffs still climb when gas prices rise. Tesseract builds and owns generation such as solar and sells virtual renewable generation, which suits renters. No more than 10 companies control most renewable generation.
Ownership starts on the balance sheet, then decentralizes. Owning generation first avoids reliance on the wholesale market. The long-term plan moves assets off the balance sheet into a decentralized network anyone can join, as Revolut and Robinhood opened up stocks. Most of the $78m round buys assets.
Hiring and effort are the only edge. Alan, employee number three at Revolut, saw it was the only team among several hundred in its co-working space regularly staying past 7pm and working weekends. Against bigger rivals, he says, better people and harder work win.
Hide energy's complexity behind one button. Generation and the grid are physical, permitting runs through local government and financial markets are inefficient. Alan takes Revolut's philosophy of abstracting complexity away, so the customer just presses one button.
Hires span grid physics to financial markets. Tesseract hired about four industry people, among them two from Tesla Energy. One ran trading at EDF Trading for twenty-something years. The team works from grid physics up to financial markets, which Alan says avoids expertise being split across people.
Energy has no customer-centric company yet. Alan says large energy companies build products in spreadsheets, and he has not seen one customer-centric player. Virtual generation came from his frustration as a renter. Pringle suggests Bulb's difficult period may reflect lacking control of the whole chain.
A small team of 26 stays lean. Alan does not expect headcount to grow much next year, since a small brilliant team beats a large less effective one. Revolut's never settle value carries over, with everyone working six or seven days. Private external beta is targeted for early next year.
What comes next for Tesseract
Tesseract will first target people who want to own generation, then a mass market that wants to forget about energy.
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On this episode 3
Show 1
A super app would help customers electrify their homes and both save and earn money.
An EV charger marketplace would replace a local electrician's survey and quote, then a site visit two to three weeks later. A customer uploads a photo, gets a quote within ten minutes and schedules installation.
EVs themselves could earn money through grid services.