00:27:25 · Zach Dell
[00:27:25] S0: Right. Most people don't. And and there's a lot of people that think their electricity provider is Oncor. And Oncor is the transmission and distribution service provider, the TDSP. They run the poles and the wires. They do not sell you electricity. They cannot. They're they're legally not allowed to. Right? So, you know, people just don't understand this because why would they? Today or to date, this has been a commodity market. Right? It's like someone just sells me the thing and, know, they don't... Because there's not a lot of margin there and not a lot of opportunity, it hasn't attracted great talent, they haven't been able to differentiate, but we show up with a new model and we say, hey, we're actually gonna develop technology to change our cost structure. And because our cost structure is lower, we can actually give you a discount on this commodity. We can sell it less for less and we can make it more reliable. And we can make it more reliable through this technology that we're gonna put on your home. And so that allows us to bring to market what we call an IQ test product, where if you don't sign up, you fail the IQ test. Right? Because it's such a no brainer. It's like, of course I wanna save money and of course I also wanna back up my home from from from power outages. Like this is a total IQ test. Right? And that's kind of where we are in the product today is because of this cost advantage that we've been able to develop through the vertical integration and, know, the factory and the manufacturing and the fact that we do the installs ourselves and we have our own consumer brand and we don't need to go buy leads from someone and, we can generate those leads really effectively because we have a great brand and we have great reviews and we have five stars on, you know, all of the the platforms and we have, you know, almost half of our customers are coming from word-of-mouth and referrals. Like these are things that other companies in the space don't have, which allow us to just flow through that cost advantage to a better price for the customer. And that's a huge huge advantage. And then when you take a step back, like what does that actually mean system wide? You know, when it comes to to to power, there's really only four things. Right?
00:29:19 · Zach Dell
You have to make it, you have to move it because it's not used where it's made, you have to store it because it's not used when it's made, and you have to sell it. That's it. Those are the four things. Right? And so we said, okay, well let's start with store and sell, right? Let's start with batteries and retail electricity, but we wanna make and we wanna move. And when you do all four of those things, you can take the technology that you build across those four things and you can bring them to market in different ways. So we'll start by bringing them to market in the competitive retail markets where we can just show up and we can be an energy retailer. So we kind of subtly announced on X recently that we got our retail license or it's it's actually called an Ares not a retailer, in Illinois. So that'll be our next market. And we'll bring batteries there too. And so, you know, make, move, store and sell, right? You can take the technology across all four and you can bring them to market in the competitive markets in The US. You can go to The UK, you can go to Australia, you go to Germany, you know, Japan is starting to de re... Regulate. Brazil is starting to de regulate. Right? So you can take, you know, that stack to all of these deregulated markets. But this stack is incredibly valued to regulated utilities. Right? The vertically integrated investor owned regulated utilities. And you're seeing this already. We have announced, I think five publicly deals with regulated utilities where we're building them power plants. We're taking this technology stack. And right now we're taking, you know, parts of, you know, we're taking mostly store and parts of cell, software parts, and we're providing that to the utility in the form of a power plant. We build the utility distributed power plant. Well, soon we'll be able to add parts of move and make to that offering that we can sell utilities and to the things that we can sell to counterparties in the, deregulated markets. So, or the competitive markets I should say. So really we think about it as this kind of like two headed monster on business model that sits on top of one cohesive technology roadmap. And then, you know, and I think about things very much in this kind of like top down way where the company is actually structured functionally, not in terms of products, right?
00:31:17 · Zach Dell
So it's not like we have a Texas retail energy team and an Illinois, you know, you know, team and a utility specific, you know, ERCOT team. It's like we have a growth team and a software team and a hardware team and a biz ops team. And those teams are functionally organized to be able to execute across all of these different business models and product types as one cohesive group, allows you to track better talent, allows you to just have more efficiency of of operations. You don't have duplicative functions and it's a way more, we think efficient way to build a company. So to summarize, it's like make, move, store and sell, monetize or deploy those technologies across these two business models depending on the regulatory structure. If the market's competitive, great, we sell directly to the homeowner. If the market's regulated, great, we sell it to the utility and use this technology to decrease costs, increase reliability for the customer, whether that be the homeowner or the utility.
00:32:08 · Sachin, Zach Dell
[00:32:08] S1: Zach said something in the interview that stuck with me is that their product is an IQ test. If you don't sign up, you fail that test because essentially base is just cheaper power. Who the hell doesn't want cheaper power? It's a no brainer. I think every founder should be able to apply that IQ test to their own product. And Green Oaks Capital has another great heuristic, which is that of having a jaw dropping customer experience. If you don't have a JDCE, then get back to work. And I can confidently say that one of our major sponsors, Vanta, has this experience. They help you protect your customers' data and onboard them. That's just an IQ test. All customers need security and Vanta gives you that security in an easy way. Vanta automates SOC two, ISO 27,001, all the other major frameworks and connects to your existing tools and gets you audit ready in weeks instead of months. So when you're closing major enterprise deals or raising capital, Vanta is the thing that stops compliance from being the major bottleneck when you can least afford that. Check the link in the descriptions and you'll find a special offer from Vanta. When I hear about the distributed battery play, as well as the business model, talking to you, some of your employees doing the research, it all made a lot of sense. And I was just sort of left there thinking, why haven't energy providers already been doing this? Why haven't they been supplying batteries like this? Why haven't they? [00:33:26] S0: Have you been to their offices? Have [00:33:28] S1: you gone They
00:33:30 · Zach Dell
[00:33:30] S0: don't feel like this. If you go to the offices of the major energy companies, and I have a lot of respect for them. They've done a lot of really hard things and and solve our problems and been around for a long time and they're in a tough business. They feel like the offices of JPMorgan and Goldman Sachs. Right? They are not technology companies. They don't have factories. Right? They don't have the engineering talent that we have. They're not r and d driven. They're not engineering led. They're largely finance led. Right? And this is... I'm a recovering finance guy, you know, so I've... Yeah. Know nothing against that. Right? Like, think there's a lot of value there. But that's why, you know, my co founder is like a hardcore engineer, and the entire rest of our leadership team are hardcore engineers, and I would call myself engineering curious. So as a finance guy, so, look, I I think that these companies are capable and, clearly, I mean, are not like crappy businesses. Right? Like NRG Vistra Constellation, they trade at, you know, 30, 40 times earnings. So like these are nice, really nice businesses. You know, Vistra is a monster business, right? Like, and there's companies all over, you know, GE Vernova is more of an OEM, like that's a monster business, right? I mean, has an energy business that's crushing it and and super attractive business. So all kinds of great businesses in the category, but there is no energy technology platform company that is actually building an infrastructure like services platform with an engineering led approach. And I think we're really unique in that way.
00:34:56 · Adam Miller
[00:34:56] S2: So you told the story about how you met Justin, you started exploring energy markets. But when was that moment when you realized that the grid could be decentralized and this could be a really important business?