Sachin and Adam
00:40:10 · Zach Dell
[00:40:10] S0: Well, if every home in America had base, which that sounds like an amazing future and I hope we get there, you would increase our capacity for power consumption. And so the amount of load that would come online would be massive. Yeah. Right? Because you would basically increase the the utilization, the capacity factor of those lines and you would create availability or headroom on the substations, on the circuits, on the transmission infrastructure to add more load. Yeah. Right? So what people kind of forget is these are markets, right? Supply and demand. And when you add more capacity to a system, your capacity to consume on that system goes up and you can you can generate more or you can you can consume more. Right? And so we can do, you know, said differently, we deploy a bunch of capacity, capacity prices go down, a bunch of demand shows up, we start using more power, that's super awesome for humanity, like all the data points to that leads to amazing outcomes for humanity. More demand comes, we need more supply. Yeah. Right? So I think there's a world where we deploy batteries to a massive amount of the households in America And, for some amount of time, capacity prices go down because a bunch of capacity comes online and then it's... Like I said, it's a market, it's supply demand. Right? So once the the supply comes, the demand catches back up and and vice versa. And I think, you know, it'll be very hard for us at the limit to catch up with the demand. As we drive price, it's kind of this Jevons paradox, that people like to talk about in AI where it's like, we add a shit ton of supply, prices go down, like demand's coming. Right? Demand comes like crazy, prices go back up, supply comes back online, prices go back down.
00:41:47 · Adam Miller, Sachin
[00:41:47] S2: And if you look at the businesses of any of these market makers with, you know, basically perfectly priced things, there's a lot of... They're they're amazing cash printing businesses. So there's, an analogy there in, like, traditional business. [00:41:59] S1: Exactly. Mhmm. Said before that you can make money through demand and supply imbalances. So what risks are you actually exposed to? Is there something else here about energy prices where if they spike dramatically that you could be losing money? From the way it sounded, it sounds like you just print cash either way.
00:42:18 · Zach Dell
[00:42:18] S0: I'll say this. I think that the way that we think about capitalizing the company and positioning the company is not how can we squeeze out x amount of profit this quarter or this year And how can we build a business that is strong for decades and is strong through busts and, and booms? Right? And, energy is highly cyclical. Right? It's a commodity market and there are, you know, boom years and bust years. And you really want to be in a strong position to capitalize, to play offense when when, you know, others are playing defense, play defense when others are playing offense and, you know, be able to have the op option and opportunity to, you know, be aggressive and pull back and play the game. Right? And so if you look at a lot of the players in the space, certainly the undercapitalized players, they have to take these kind of bets. So like, we're gonna load up over here and hope this happens and if it does, then we'll go here and if it doesn't, you know, we all go home. Right? Not how we run the company. Right? We we capitalize and plan the company to be in a position of strength no matter what the market cycle is. And we can talk about the nitty gritty of our long position and our short position and how we hedge those things out and how we think about that. But the broader point is we believe that, we need to be around for decades, and we need to have a balance sheet that can set us up to be around for decades, and we really want to be able to be, you know, fearful when others are greedy and greedy when others are fearful. Right? And that's kinda... I I apologize for the, like, high level y answer, but that that really is the truth is like we wanna be positioned around all kinds of market cycles, and, know, be winning in the boom and, you know, be... You know, everyone will lose in the in the best years, right, in some in some ways, but we're gonna lose less than others and be in a position to go, you know, snap up some of the competition and, do some creative things when when when that time comes.
00:44:10 · Adam Miller, Sachin
[00:44:10] S2: What does the world look like in ten years if you kind [00:44:12] S1: of achieve your vision?
00:44:14 · Zach Dell
[00:44:14] S0: I mean, certainly, there will be millions of homeowners, hopefully business owners and renters across the country that enjoy more affordable and more reliable electricity as a result of base power. And a number of scaled regulated utilities across the country that run a more efficient system with better technology, lower prices, and higher reliability as a result of the technology that we develop. And maybe most importantly, we have built a team, a machine of engineers and operators and creatives that is hopefully thousands of people strong that is set up to solve the next decade of problems in energy technology. And this is part of what's so exciting about this company and why when Justin and I started this company, we did it from this perspective of this is gonna be our last company, like this is gonna be the thing we do forever is because the problem set never gets boring, never goes away. Energy is endlessly interesting. There are different, there are different, you know, regulatory regimes, different countries, different grids, different, there's all kinds of problems across all different parts of technology that that we can go after from this vantage point of energy. One thing I like to think about is we are a technology company that has decided to to to operate in the category of energy. But if you take a step back, we're just a technology. Like, we are a a group of people that have come together to build great technology for the next hopefully fifty to a hundred years, And energy is the part of the economy we're gonna focus on. Why? It's the biggest and most interesting in my opinion. Right? But broadly, we're a technology company and that I think, is what the people here are really excited about is building all kinds of technology across energy. So hopefully in ten years, we are doing more really interesting things in energy technology, but specifically homeowners, all across the country and and perhaps the world are enjoying more affordable and reliable electricity as a result of the technology that
00:46:14 · Adam Miller
[00:46:14] S2: we have. Let's bridge that gap for a second because we've been talking a lot about energy and how that's important for America, but energy is this building block where a lot of interesting industries can sit on top of. For you personally, what are the most interesting applications of America having more cheaper energy and what it means for America geopolitically?