Sachin and Adam
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?
00:46:33 · Zach Dell
[00:46:33] S0: Well, unfortunately, I think it less... It's less about what's interesting to me and more about what's critically important to the country. And, you know, I think I'm not smart enough or have, you know, I don't have the foresight enough to think or to to to know what the most critically important energy intense industries are going to be over the next decade, but I can sure as hell tell you that whatever they are, they're going to be highly dependent on the cost of electricity. Yeah. And if we can drive the cost of electricity down, we're going to create the initial conditions by which the country is able to compete at the highest level with China, our main adversary. Like, let's just call it what it is. That is our... They are our our adversary. Right? And if we look at energy production, like, their chart looks like this and our chart looks like this, and that's a big problem, and we need to close that gap. Right? And, you know, for for, you know, for the camera. Right? It's like, they're here, we're here, we need to do this. Right? And so look, is it DSAL? Is it compute? Is it, you know, you know, electrolysis? Like, there's so many different things that we could be doing with abundant cheap energy. We don't actually think that far ahead. Like, it's it's it's not our job to figure that out. It's our job to create the conditions for the country to be in a position, and, you know, we we want to enable the next generation of entrepreneurs to go solve those problems. And there's tons of great entrepreneurs who are around these problems and who are working on these things, and we wanna create the conditions by which they can do that. But we have to inflect, you know, this energy production problem. And, I mean, you guys have covered a lot of this stuff. Right? Like, in quantum, in robotics, like, you know, physical intelligence and, PsiQuantum, the companies that you guys have covered, like, are highly energy intense. And if you ask them, like, in ten years, if electricity... If your blended electricity cost is 10¢ or 20¢, like, does that matter to you? They will, like, say, absolutely. Hell yes. Like, this changes everything. Right? Like, so we want to power that next generation of companies, no pun intended, and just set the initial conditions for them to be successful.
00:48:39 · Zach Dell, Sachin
So I can't tell you exactly what the technology is gonna be, but I'm a competitor and I'm a patriot and I want America to win. And I don't think we can do that without having the most capable and performing energy systems in the world. And I wanna build the company, we want to build the company that makes that happen in America. [00:48:58] S1: A lot of the concepts we've covered today are concepts that you'd hear about in traditional energy companies as well, the manufacturing of batteries, installing, the hedging strategies, but then you also describe yourself as a technology first company. So what's the actual alpha that you're getting from building new tech? Is this in the types of batteries that you're creating? Is there internal software that you're using for maybe better hedging? What is that?
00:49:19 · Zach Dell
[00:49:19] S0: Let's take the battery specifically. So home batteries on the market today, over the last ten years, batteries have been designed to be sold alongside Resi Solar. And these batteries are sold, right? And they're often financed and so when you're selling something, you have to think about like what can the consumer afford, right? So these batteries are sized and priced per kilowatt hour, right? So, you know, the the kind of, dominant home battery on the market today is like a, you know, 12, 13 kilowatt hour battery because if you sell it around, you know, you know, a thousand dollars a kilowatt hour, that's, know, 12,000, $13,000 before installation, add an installation, it's around $15,000, you can finance that and it's still really expensive, but it's like affordable for some people and this is why home batteries are like sub 5% potentially even sub, it was not great data on this, but like sub 1% penetrated across The US because it's like, who has $10,000 rolling around to go buy this thing that sits on the side of the house that they might use a couple of times a year, right? But it doesn't need to be designed or sold in that way. It doesn't need to have this premium product valence, right? The batteries, you know, the dominant home battery on the market today, it's like the Lamborghini batteries, right? It's like made of glass. They charge $20,000 for it and it looks like an iPhone strapped to the wall, but we don't need a Lamborghini batteries. We need like a Corolla, right? And, you know, or a Camry or like something that is affordable, reliable, safe, easy to install, very efficient, and designed for the use case. Right? So the way we've designed our battery, it's first of all, it's way bigger. It's like three times the size because we don't charge per kilowatt hour and we wanna deploy as much storage per home so that we can provide as much value per home as possible. So our incentives are directly aligned with the homeowner. So it's bigger, more energy, more power. It's much easier to install, how much faster to install, installs decoupled. So you don't need an electrician doing the whole thing.
00:51:02 · Zach Dell, Adam Miller
And the whole system top to bottom is re architected because we own the customer acquisition, the installation, the owning and operating, the bidding into the wholesale markets, all of that touches our balance sheet and it touches our operations and so it changes the way that we design the whole system. So the software that we build, the harder... Hardware that we build, the systems that we build around the company are all unique because of this vertical integration and that's really where the technology advantage comes in. [00:51:28] S2: Yeah. Feels more like a Rockefeller style company than like a Salesforce style company after everything you said. But Zach, something that I'm really curious to understand about you is what's inside, what's it like to be you and building this great company? Something we like to ask people is if we were to observe your internal monologue, what would surprise us?