The Exchanges

Q I would love to know if you guys had ever expected to start an energy company. Um, but starting with Zach, so Your career is on the investing side. You worked at Blackstone, and then you were also an investor at Thrive Capital. Um, so how did, how did that navigate you to starting this company? What did you see while you were investing that this was a massive opportunity?

A Yeah, I'll go even further back than that. I'd say growing up, it, it never occurred to me there was anything interesting to do in the world other than start companies. It was always what I wanted to do. I always wanted to be an entrepreneur. I started my first company in high school. I actually started two companies in high school and I started another company in college and, uh, college was really the time where I got excited about opportunities in industry and in, in, in energy, excuse me. I spent a lot of time in college trying to figure out how to develop anaerobic digestion systems in parts of the rural world to Uh, convert human waste into compressed methane, uh, for people to use for, uh, stoves and lights and fans and that kind of thing. Uh, it turned out it wasn't a very good business idea, but, uh, it was a really interesting learning experience. And I actually went into investing because A, I needed a real job and the business wasn't working and B, uh, I wanted to learn what, what good looks like. And I wanted to see how the most sophisticated investors in the world, uh, underwrote businesses, how they talked about businesses, how they thought about businesses. Um, and I think Early in one's career, it's really important to learn what excellence is, and what it looks like, and kind of consistently redefine what excellence is, and so I ended up at Blackstone because …

AI assessment note: “While I was there, I got to spend time on, on energy investing”

Q And you guys are in Austin, Dallas, Houston, with this two hundred million dollars in fresh capital. You're gonna, I'm assuming, expand further into Texas, and then hopefully across the United States. So, like, at what scale are you deploying New units each day. Like, what, what exactly are you looking to hit? Like, what would be the goal for deployments a day?

A I think we, I think we did 19 installations today. Uh, so we're, you know, on the order of, of 15 to 20 installations a day. That number's going up, obviously, you know, by the week. Um, we want to be the, the fastest battery developer in the country, and we're kind of already on a megawatt per month basis Right in line with the fastest battery developers in the country. By the summer we'll be deploying at twice the rate. So we'll be the fastest battery developer in the country, uh, in, in, in the next, you know, three months. Um, and, you know, we, we want to grow exponentially. So, um, you know, we'll go from 20 a day to 50 a day to a hundred a day, and eventually hopefully we'll be doing, uh, you know, thousands of installations a day in the coming years as we go, uh, from Texas, you know, to, to the rest of the country.

AI assessment note: “we're, you know, on the order of, of 15 to 20 installations a day.”

Q In terms of the go-to-market strategy, you mentioned a couple partnerships. Um, I'm really curious, does seasonality affect that as well? Like, I would love to just break down the go-to-market strategy. Like, is it A, like partnerships, and then B, like also seasonality, or are there other components maybe that you're riding off of?

A I would say it certainly does, right? When, when, when it gets really hot in Texas, people are super focused on the power grid. When it gets super cold in Texas, people are super focused on the power grid. Uh, when there are outages, obviously people are really focused on backup power, but, uh, really in any month people want to save money, right? So we offer two things. We offer outage protection and we offer lower monthly electricity bills. And so we find that there are definitely spikes in demand around outages and extreme weather events, but we see pretty consistent demand from customers who are looking to save money on electricity. We have, we think about customer acquisition In really two ways, there's a direct channel and the indirect channel. The direct channel is mostly referrals, direct mail, paid advertising, you know, word of mouth, uh, field marketing, brand marketing, um, those kinds of things. And then the indirect, sorry, yeah, the indirect channel is partnerships like what we've announced with Lennar, uh, one of the largest home builders in the country. If you're buying a Lennar home in, in select communities in Texas now, I think it's 25 communities across the state. When you go to buy a Lennar home, you have the option to sign up for base At kind of effectively checkout so that when you move in and deal in our home, your home is base powered and you have a ba…

AI assessment note: “I would say it certainly does, right? When, when, when it gets really hot in Texas”

Q And how did you pick Texas to start the company?

A Well, uh, Texas is the energy capital of the country and, and really should be the energy capital of the world. It's, it's in the middle of the sunbelt. It's in the middle of the wind corridor. So you have tons of, uh, wind and solar resources, but it's also a competitive market. It's a, a, a, a really great place to develop energy technology. You have price signals and kind of, um, Pro competition regulatory structures that allow companies to come in and innovate and take market share. Um, that said, we think that Texas in a lot of ways is the canary in the coal mine for the rest of the country. And as a lot of the rest of the country moves into, uh, a load profile that looks a lot more like Texas, the demand for batteries in those states will go up and we look forward to bringing our technology to the rest of the country over time as that happens.

AI assessment note: “Texas is the energy capital of the country and, and really should be”

Q well. I will say, uh, I will say that. I, I think you'll attract some very highly qualified people and talented people, especially if they made it this far in the pod. So. The, the meals do help though, I will say. Totally. Well, um, so just to close out, I'm really curious on your take. If you had unlimited resources, what would base power look like in five years?

A I, I'll give you where I think we will be in five years, and not because we have unlimited resources, but I think we, look, we, we have a group of investors behind the company that have a lot of resources, and also see the long-term vision, and see that this is not a company that, you know, is designed to be around five years, and then get bought, and, you know, go do, like, we want to build a company that endures. We want to, we want to be part of the S&P, we want to be around for 50 years, we want to, Uh, build critical infrastructure for the country, and what that looks like is being in all 50 states, uh, going up the stack into, into utility infrastructure, going down the stack into the, into the home, uh, and building more products and services to lower costs and increase reliability for energy consumers, whether that's homeowners or business owners, um, and you'll see us do all that over the next couple years, and, you know, we're, we're honored and, and proud To partner up with firms like Addition and Adresa and Lightspeed and Valor and Thrive and Altimeter and Trust and folks who see the long-term vision have the resources to support us as we go from, um, you know, an 80 person company in one state, uh, to, you know, hundreds of, you know, eventually thousands of people in all 50 states and hopefully, um, you know, touching a, a material percentage of the country's powe…

AI assessment note: “what that looks like is being in all 50 states, uh, going up the stack”

Q I want to go into the vertical integration piece of that. So could you just walk through the process from the very base of base to the customer? So can you just walk through how you're manufacturing to getting this out the door?

A Yeah, first let's talk about why vertical integration. Um, the way that we describe this is we are working to develop a compounding cost advantage through vertical integration, and what that means is by doing everything, by designing the batteries, making the batteries, installing them, doing all the logistics and warehousing, the deployment operations, uh, selling power directly to the customer, doing the support, the maintenance, everything, It allows us to take costs out of each step of the equation and ultimately drive down the price for our customer. At the end of the day, electricity is a commodity, right? There are no sexy electrons, as we say. Um, people want their lights to stay on and their bills to be low. No one wants to pay more for power. And so we take the view that we have to develop the technology and the operations to eventually be able to sell power to our customers cheaper than anyone on the planet. And the only way to do that is to take cost out through vertical integration. There's no magic sauce that we can, you know, drop on the business that, you know, gives us this like cost structure advantage other than Um, vertical integration and building technology across each part of the stack, whether it's the way that we design the batteries, the way that we manage our logistics and warehousing, the way that we manage the operations, and by doing all these thin…

AI assessment note: “by designing the batteries, making the batteries, installing them, doing all the logistics and warehousing”