Riding Unicorns: Venture Capital | Entrepreneurship | Technology
00:13:48 · James Pringle
[00:13:48] S0: Yeah. It's amazing that you sort of plotted it all out like that to to really understand it. And we've obviously covered... It's complex, and companies like Bulb have obviously had a good period and then a difficult period because maybe they didn't have full control, like, the the full chain and everything. You touched on it briefly at the start of the podcast, but what would you say is sort of Tesseract's secret sauce that's gonna help you dominate the category? Like, is it this sort of virtual generation investment that people can make? Or, like, what what is that little bit that you think is really gonna differentiate you in the longer term?
00:14:26 · Alan Chang
[00:14:26] S1: And then it's being customer centric. Right? Like, basically, we start with the customer. What would I wanna see as a customer? Right? Because a lot of big energy companies, and I I think their approach is similar to the big banks. Right? They just don't think about the customer. They build products in spreadsheets. They think about how much money I'm going to make, rather than, oh, how can I build a great product, right, and provide great customer experience for my customers? So, I think starting from a customer will work backwards, right? I think it's customer first, business second, right? So that kind of approach, right? And honestly, like, I think there is a standard formula, right, for building a consumer business. I think Amazon is probably the pioneer for just customer centricity, And a lot of tech companies have follow suites, I think including Revolut. But I haven't seen a single customer centric energy company, right? Let alone Europe, but, you know, in the world. I haven't seen a single one. So, think starting with the customer, which is... And the reason why we came up the next generation is, okay, I personally want to buy some... I live in an apartment. I don't have a roof, right? And I used to rent, and I want to contribute to going to net zero. But apart from recycling, which is not arguably not that effective, right, which is a separate problem, I don't know what to do. I feel powerless, right? And again, I also want to save money on my energy bill. Right now, there's no solution for me to do anything, right? So, if you have money to put to use and you want to help contribute to net zero and you want to make a, you know, you want to save money on that energy bill, like there's no good solution for a lot of people, right? And not everyone is fortunate to have a roof, let alone own that roof. Right? So, yeah, that that that this virtual generation concept was really just born from personal frustration than, you know, like, just designing a product where customers want. Right. And so is the customer.
00:16:25 · Hector Mason, Alan Chang
[00:16:25] S2: Yeah. And and I guess there's, an interesting debate around how how much control consumers want, like, what... Or how involved consumers want to be in their, you know, in in their energy consumption. So I guess, you know, there... There's a whole cohort of consumers who just would love not to think at all about their energy. It's just done whatever. They'll pay the bill, hopefully come straight out of their account without them to look at it kind of thing. [00:16:52] S1: And then there's a group [00:16:53] S2: of people probably like me who would like, you know, some functionality. Like, it's fun to play around with new tools, new features, but maybe maybe there's some functionality that you can build for for consumers. So I wonder what's your thoughts around how you can build that consumer proposition for the different types of consumers and what what what what are those different propositions?
00:17:14 · Alan Chang
[00:17:14] S1: Yeah, that's a good question. So, initially, focus will be people who want to own graduate generation. That's really just our focus. And that is, you're right, not everyone wants that, and that's fair enough. But longer term, right, we do want to make it like mass market, and we do want to cater to, for example, cohort where they just want to forget about it, right? So, example, some of the products we are thinking about building, right, in the future, right, is, For example, if you want to help... You want to electrify your home, save money or energy, etcetera, etcetera. For example, let's say EV charger. If you want to get an EV, right, you'll probably need an EV charger at home. So right now, the buying experience is pretty broken, right? You have to call a local electrician. They will come in to do a physical engineering survey. Then they will able to give you a more accurate quote. And then maybe two, three weeks later, you schedule another site visit where they actually do installation. The whole experience is pretty broken, right? So there's no Airbnb equivalent for EV charging installation. So we want to be able to facilitate that where everything is you select it, you take a photo, you say you want to e recharge at home, you take a photo also at your house, an engineer in the background does the digital engineering survey, give you AccruCode almost instantly, right, let's say ten minutes later. And then you schedule a time where you want an engine to come into your house and instantly recharge it. Then done. Right? You pay and then done. You forget about it. Or for example, your EV can actually earn money providing grid services to help stabilize the grid. We can actually help you completely automate that. So, basically, you just plug in your EV. Right? We'll do all the hard work for you, and then there's some money magically appearing in your account. So, basically, we're not just building utility, a renewable utility company. We're actually selling the utility as a a core, the backbone, but then that's the building a super app, right, for... To help you electrify, to help you save money, and in the future, help you earn money as well. So it's about, yeah, going green, saving you money, and helping you make money. Right? That's really our thoughts.
00:19:22 · James Pringle, Alan Chang, Hector Mason
[00:19:22] S0: It's unbelievably awesome. Apart from track record, why do you think you raised so much money? But, obviously, that explanation goes a bit of a way to explaining why. Did you aim to raise as much as you did, or did you just keep getting offers and that just helped shape the round eventually? [00:19:41] S1: Yeah. That's a good question. To be we didn't think too much in in terms of how much we wanna raise. Yeah. I I think it kinda just happened. [00:19:48] S0: Did it surprise you how much momentum the round gathered? [00:19:53] S1: Yeah. I would say maybe a little bit. No bit. I was I was... I guess, I had a range. Right? And I guess it it it happens within range. [00:20:04] S2: You spoke about at the beginning, like, this is... This can be asset heavy. Like, is some of the round for asset purchase?
00:20:12 · Alan Chang
[00:20:12] S1: Yes. Some of the round is... Majority of round is actually for asset purchase. Effectively, what we want to do, right, is we want to take it off. So, initially, to kick to kick off, we have to take it on balance sheet. Because what we don't want to do is basically build another energy supplier that relies on the wholesale market, right? That can really get fucked if the wholesale market goes up, right? And they can't sell it for as much as what you're buying it for. That's really just what happened to a lot of energy suppliers that went bust, right? So, that's why we are all in generation. The long term, we want to take off balance sheet, right? So, effectively, we want to... I mean, this is another... We're simultaneously creating another decentralized renewable energy network, right? So, imagine, right, if you look at the Bitcoin network, right? Bitcoin network is effectively the fastest growing financial services network that everyone's ever seen. And they manage to convince... Basically what it is, it's just automated incentive system to convince people to buy GPUs to solve useless math. And actually, it through the thing, right? It grew super fast. Now, what if, right, and what I really appreciate about Bitcoin now is just this incentive system is so beautiful. What I do not appreciate is, you know, it's, I'll argue, it's not that useful, right? But what if you can design a similar incentive system, but convince people to do something more useful? So, rather than convincing people to buy GPUs, what if convince people to buy renewables? Mine, this, you know, Bitcoin for energy, Bitcoin for renewable energy, right? Where they can earn a lot more than, you know, early Bitcoin miners can make millions. Magic can make millions from, you know, mining renewable energy. And that will convince a lot of people to do it and really accelerate their renewable transition. And that's how we think about, you know, effective design incentives. Right? So eventually, we do wanna take a generation of balance sheet, right, and basically create an effective decentralized, new energy network where anyone can participate. Anyone can earn. Anyone can participate. Anyone can become a renewable energy mind.