City-Wide Connectivity through Private Networks: Did It Work Episode 2

Summary:

In this episode, Dominic speaks with Glenn Schatz, Chief Revenue Officer at BlocPower. As longtime colleagues and real-life friends, Dominic and Glenn have a lot to share when it comes to how IoT connectivity can be harnessed for good and the different market segments that have potential to be impacted by advancements in wireless technology. In this conversation, Glenn shares about BlocPower’s current work to connect New York City, decarbonize Ithaca, NY, and how the company partners with Kajeet to make Internet accessible to all residents – paving the way to a more equitable and connected future.

About Glenn:

Glenn Schatz is the Chief Revenue Officer at BlocPower, a smart buildings platform that markets, engineers, and finances energy efficiency, renewable energy, IoT, and other technologies to buildings and communities in underserved market segments. BlocPower partners with governments, utilities, building owners, philanthropies, and community members to generate energy bill savings and reduced carbon emissions, and generates financial returns and improved public health.
Prior to joining BlocPower, Glenn was Vice President of Strategic Partnerships at Link Labs, a leading provider of an end-to-end IoT platform for locating and monitoring equipment, supplies and assets anywhere at any time. As one of Link Labs’ first employees, Glenn held various senior-level positions in the company across operations, strategy, sales, and business development. In his tenure at Link Labs, he was responsible for building the company’s initial go-to-market plan and sales strategy, building up key channel and distributor relationships, and forging lasting relationships with mobile network operators around the globe.

About Dominic:

Dominic Marcellino is the director of strategy and business development at Kajeet. In this role, Dominic is responsible for expanding and strengthening Kajeet’s partnerships with system integrators, device manufacturers and solution providers, leading strategy for product and sales teams and refining customer experience. An expert in product, business development and sales with extensive expertise in bringing low-power IoT applications to market, Dominic’s strategic guidance strengthens Kajeet’s market position as a premier mobile virtual network operator for global enterprises.

Transcript:

0:00:00.1 Glenn Schatz: You can’t truly be technology agnostic unless you test.

0:00:02.5 Dominic Marcellino: Right, right.

0:00:03.5 GS: And so if someone came up with some brand new wireless thing and on paper it looked like it would make the numbers work, we would try a new market, even if… WiFi mesh or private LTE are both successful because… you know, the way that companies get stale is they stop doing those things.

0:00:34.5 DM: Welcome to “But Did It Work: Stories of IoT Creativity and Success.” I’m your host, Dominic Marcellino. I’m the Director of Enterprise Strategy at Kajeet, Incorporated. We’re a leading provider of managed IoT Solutions, and “But Did It Work” was created by Kajeet. I’m delighted to be joined today by Glenn Schatz, the Chief Revenue Officer at BlocPower, and a personal friend. Glenn, thanks for joining us today.

0:01:00.5 GS: Thanks for having me, Dominic. I’m glad to be here.

0:01:03.3 DM: Yeah. Good. Hey, man, we met a decade ago, probably a little bit longer, and you were just getting out of the Navy, and were starting to think about creating your own company, and our paths crossed a bunch of times since then, including working together for years at Link Labs where we were both before our current jobs, but walk us through a little bit of the journey of Glenn from the Navy through to BlocPower, because I think it’s a really interesting story.

0:01:30.2 GS: Sure. I will compress the Navy period.

0:01:34.1 GS: I was in the Navy active duty for about seven-and-a-half years. I was a nuclear submarine officer, so on submarines, I deployed a few times, you know, usually it’s three-month deployments. As I was getting out of the Navy, I had the opportunity to teach at the Naval Academy, which was super exciting. So I moved back to Annapolis. I taught in the political science department, but in addition to the Introduction to American Government class that all freshmen are required to take, I also developed and taught a course on energy policy and energy security.

0:02:07.2 GS: I’ve always had an interest in energy, really, I think since my sophomore or junior year of college, where I learned about energy resources in the Caspian and Central Asia, and sort of how that drove a lot of different conflict and how it overlapped with some of the ancient trade patterns and these sort of things. So I was intrigued by energy, and it was clear to me in the mid-2000s that the climate change was very real. [chuckle]

0:02:38.5 DM: Yeah.

0:02:38.7 GS: And the only way to address it was by either reducing consumption or by generating energy from non-fossil sources. So you know, obviously I was a nuclear engineer, so I had to learn all about nuclear energy, but I was really drawn to this idea of energy efficiency. On a submarine you have to make all of your own stuff, right? So you make your own oxygen, you make your own water, it’s a very self-contained thing, and the nuclear reactor is great to produce a lot of energy, but Naval Reactors also doesn’t want you to use a lot of it if you can help it, because they’re really expensive, and they want them to last them a long time.

0:03:19.7 GS: So you have to be efficient in everything you do, you know, you take very short showers, you don’t use a lot of hot water, these sort of things all matter. And so what I thought about what I wanted to do after I got out of the Navy, I really thought about how can I take some of these things that I learned and some of these lessons that I learned in the Navy and apply them to the real world. And to me, it’s always been this intersection of tech and policy. I don’t think you can actually separate the two as much as a lot of technologists want to.

0:03:51.4 GS: Technology exists in the real world amongst people, and so it’s not just… it’s not just policy, but it’s sociology, it’s how people use technology, it’s how communities use technology, and I’ve always been drawn to the built environment. I love cities, I love architecture, I love everything about how people come together, and so for me, when I got out the Navy I started a company that did energy efficiency consulting and some project development in the DC area. That’s when I met Dominic.

0:04:20.0 GS: And really the idea was, there’s all these labels, there’s LEED and Passive House, but for us it was, how do we reduce the cost of operating buildings as much as possible, and we didn’t really care that much about the labels, we cared about the building performance. And back then, that was pretty novel. Over time that has become less novel, and is… A lot of it’s built into building energy codes now, which a lot of states have adopted. So I did that for a couple of years. I went to work at the Department of Energy where I managed the small commercial buildings, R&D and commercialization portfolio, and actually there is where I met Donnel Baird, the founder of BlocPower. He was one of the projects we selected to fund.

0:05:04.7 GS: It was a really interesting idea at the time. Basically, crowdfunding had just emerged as a thing. He wanted to crowdfund energy efficiency and renewable energy projects in houses of worship in low income Black and Brown communities, sort of what the target was, and so that’s how the company started. Over time, the company’s morphed, from 2014 through 2018, a lot of work was done in what was called a Community Retrofit Program in New York, where we did over 1200 energy efficiency projects in buildings that were mostly funded by the State of New York.

0:05:48.6 GS: And then more recently, we were lucky enough to raise a decent amount of capital in a Series A investment from some big name investors like Andreessen Horowitz and Kapor Capital, Goldman Sachs to be able to expand this model to do full electrification projects and decarbonization projects in these same communities, and so it’s almost come full circle to the original vision. We actually now are doing crowdfunding again to provide the equity component for a lot of these projects, so we can do them with no down payment, which is really important for some of these building owners.

0:06:22.8 GS: And now that we have some track record, we actually have pretty low-cost debt, and so what that does is it enables us to underwrite our own projects, to be able to say yes to a customer quickly and start doing the work and not having to go out and get a loan for each individual project, which is kind of what it looked like at the beginning. And so obviously, we’re at the very beginning of this journey, in addition to the 1200 buildings we’ve done in DC, we have work in the DC, Baltimore, Philly area, the Mid-Atlantic, we have work in the Bay Area, in Oakland. Really big news last week Ithaca announced us as the program director…

0:06:56.0 DM: That’s right, we’ll talk about that later.

0:06:57.3 GS: …To electrify the entire city of Ithaca, so that’s about 6000 buildings. So yeah, the future is bright, I think we have finally have some tailwinds in the energy efficiency industry, hoping that the administration can get the build back better legislation through, because that really can be transformative for low-income communities in electrification, there are pretty big rebates for heat pumps there. So that’s exciting.

0:07:22.3 DM: Right. Yeah.

0:07:24.0 GS: That’s my story.

0:07:25.0 DM: Yeah. Except that you skipped over one core thing… Which was…

0:07:29.4 GS: I skipped over the Link Labs part of it, because…

0:07:30.3 DM: Because, exactly…

0:07:30.9 GS: I thought you would bring us back to that it… So I just know you, I know you so well.

0:07:33.8 DM: That’s right.

0:07:35.1 GS: So I was at Link Labs, it was an IoT company, is an IoT company, that does industrial asset tracking and monitoring and these sort of things, for six-and-a-half years, most of the time Dominic was there, I think what, you were there for five of those years, five-and-a-half almost…

0:07:49.5 DM: Something like that, yeah.

0:07:50.5 GS: So that was actually a great opportunity for me to… You know, my first business was relatively small, I was the founder, it was a little bit different, it was a little bit hand-to-mouth, we sold work, we did the work, we paid our people, and we grew a little bit organically, and Link Labs was an investor-backed startup, we went through a pretty tremendous growth, I don’t know, four-and-a-half years in, when we closed a big contract with AT&T and Marriott or “Mariette”…

0:08:25.6 DM: That’s right.

0:08:26.1 GS: As we learned to say it. And it really gave me the opportunity to see how companies grow quickly and to be part of that as one of the first employees there, to be through every stage up through that first jump…

0:08:42.4 DM: Big growth.

0:08:43.0 GS: In growth was really interesting. To see scaling problems, to see how we handled those. In fact, a lot of the lessons at Link Labs that we learned are really applicable to my job today, even though it’s a very different industry. So it’s funny, like we’re negotiating supply chain agreements now with our HVAC vendors. And an air conditioner is a lot different than a microchip, but the supply chain agreements and considerations are the exact same. And you know, what’s the difference between a forecast and PO and what you can be guaranteed and what happens when a container box gets stuck off the coast of Long Beach and all of these things and how they trickle into your business.

0:09:25.6 GS: That’s all stuff we learned the hard way. And then the other thing too that I learned a lot about at Link Labs was this concept of product market fit, and making sure that, you know, investments were made around certain points of product market fit. Now, you can’t always have the exact right fit for the market or for the customer. It’s an iterative process, as all product people will tell you, but also knowing when to step on the gas, and when to pull back and when to promise things and when not to, these are all things that can cross industries.

0:09:58.7 GS: And so the time at Link Labs was very valuable, to be very hands-on with some of those decisions, to have made some of those mistakes, have some successes, and to hopefully translate some of that into what I’m doing today, even though my job is a little bit orthogonal to that part of the company, which is also a word I didn’t know before I went to Link Labs.

0:10:19.0 DM: That’s right. Neither did I. We’ll definitely wanna dig into a lot of that and I appreciate… I appreciate the background, but certainly as BlocPower is realizing the vision of implementing what we probably a decade ago would have called smart buildings or energy efficiency, they all are beginning to merge also with connectivity needs, not just for the elements that are being put into the buildings as you electrify Ithaca, which is just such a cool thing, which I wanna talk more about more in a bit, both in anticipated and unanticipated ways, where have connectivity, where has connectivity come into play as a key component of what BlocPower is doing?

0:11:00.7 GS: Sure. So before Link Labs, I don’t know that I’d ever heard the word IoT. I think mostly ’cause someone invented the word while we were at Link Labs.

0:11:13.2 DM: Exactly.

0:11:14.1 GS: However, I think most everyone knows at least the word IoT. They may not know what it means, but they’ve heard it now. So like now when we install a heat pump or a heating system, we say, “Well, we’re gonna put IoT in with this.” Which, as someone from the IoT industry, I think it’s kind of funny, but I kinda just roll with it. But in reality, all it means we’re putting in, you know, a building control system or a smart thermostat or something that gives us two-way control over the device in the building. It’s really important to BlocPower that we do that, for two reasons. One is for preventive maintenance reasons and to make sure that our systems are operating like we design them, because the communities we’re working in, you know, if something is going wrong and they have an electricity bill that’s like two times expected, you know… In some places… They…

0:12:04.2 DM: They don’t just cut a check.

0:12:06.0 GS: They don’t just cut a check. That’s meals they can’t have. That’s the potential to default on a loan. You know, this is not a big deal to some people, but it is to the people that we work with. And the other reason is because we actually… Our product is a lease product, where we own the equipment even though it’s operating in someone else’s building, and so we need to be responsible for it throughout the course of the lease, and it’s a 15-year lease, and it’s impossible to do that without having some insight into what it’s doing.

0:12:37.2 GS: And then the two-way control provides a little bit of a third element, which we don’t do that much now, but it is gonna be a really big part of what we do in the future, which is the ability to respond to demand response events that utilities send to reduce consumption of specific appliances. And so if you’re familiar with… If you have a Nest thermostat, or a Honeywell that you opt into your utilities program and they say, “Well, we’re gonna turn your hot water heater off for a few hours on Friday.” And that doesn’t impact most people, but that’s also a very coarse way of doing demand response.

0:13:13.2 GS: You basically… It’s the utilities forecasting what demand’s gonna be, and then they’re trying to plan a day in advance what they could do, and then they’re gonna turn some people’s equipment off during that time. And you can always override it, in a lot of cases, but… And then they’ll cut you a $50 check or something at the beginning of the season as an opt-in. Where the future is going is that those demand response signals will be dynamic, they’ll be as they’re needed. They’ll be more sophisticated, and they’ll treat different pieces of equipment differently. So as you have a smart refrigerator, and a smart hot water heater, and a smart coffee maker, or whatever, you might get an announcement saying don’t make coffee now, otherwise your electricity bill is gonna go up.

[chuckle]

0:14:00.1 GS: Or it may change your refrigerator, or compressor cycle to do it at 8:00 PM instead of 7:00 PM, or something like that. Right now, it’s still pretty coarse, but we’re part of a project that we’re working on with the Department of Energy to do hundreds of buildings and turn them into what we call a virtual power plant. And so you can… With hundreds of buildings, you can actually negate the need for building a new gas-fired plant, or a new coal plant, or even new solar panels, right? As much as we love solar, it’s better to not have to build them.

0:14:37.9 DM: Yeah, exactly. Of course.

0:14:39.8 GS: And so IoT enables that.

0:14:41.1 DM: Yeah.

0:14:42.3 GS: In a roundabout way, though, the way we discovered the wireless part of our business is that the communities that we’re in have a lot of trouble getting on the internet. As many people are becoming really aware of, especially with COVID, the digital divide in this country is enormous.

0:15:00.6 DM: That’s right.

0:15:02.4 GS: It’s enormous for people that live in low-income urban areas, it’s enormous for people that live in rural areas. We take for granted… I think in a lot of places, if you work out of an office, you’re pretty much guaranteed to have a 1 gig connection into the building, and you get 100 megabits per second and you’re good, right?

0:15:26.5 DM: Yeah.

0:15:27.1 GS: Most of the country doesn’t have that, and if they do, they may be paying way too much money for that. So an example I like to use is my mom, who doesn’t really need much internet. I was recently shopping around for the lowest plan I can get from Comcast, and it was, I think, 40 bucks a month, or 50 bucks a month, or something like that. Which is not cheap, but it’s not $150 for a cable bundle, right?

0:15:51.5 DM: Sure.

0:15:52.3 GS: Or $200, whatever. They’re pretty expensive. And then I got it. So if you put a card down and you pre-pay it’s $35 a month or something, so… But I looked at the guaranteed service levels there and it was… While she can get faster internet, and which she really does, I think it was something like 20 megabits per second, something like that, which if that’s what she was actually getting, she probably wouldn’t be able to do Zoom and stream a TV at the same time. It’s not enough. But she’s paying 30, 40, 50 bucks a month for that. I’m paying maybe double that, and my service level commitment or expectation is like 100 megabits per second, maybe 150, or 200. So for double I’m getting way more…

0:16:42.4 DM: Like quadruple… Exactly, or yeah, multiples. [chuckle]

0:16:43.7 GS: Yeah, yeah, yeah. Yeah. And that’s how it sort of works. And so it’s not just that lower income people don’t have access to internet, it’s that when they do decide to pay for it they’re getting ripped off.

0:16:54.9 DM: That’s right.

0:16:57.0 GS: So what we did was we actually installed internet in the neighborhoods that we had high densities of projects to be able to connect our devices, and then people saw us on the internet, and they’re like, “Can we use this?” And we said, “Sure, why not?” And we take 50 megabytes a month for heat pumps, so…

0:17:12.3 DM: Yeah. Exactly.

0:17:13.3 GS: There’s plenty of extra capacity. And so we started doing this throughout Brooklyn. We expanded that to the South Bronx. We cover, now, a few thousand people, but have recently expanded to about 50 New York City Public Housing buildings, and so we’ll probably have maybe 20,000 people covered. We can actually cover, if you look at just the geographic range, about half a million people, based on where we have our antennas, but obviously, we don’t… We’re not an ISP necessarily, so we build it where we need it. And so if we have a building owner who wants to give us access to their building, we’ll install an antenna there, we’ll connect the people up.

0:17:57.4 GS: Typically, they’re on federal benefits, so we can get the Emergency Broadband Benefit, or lifeline, and then it’s free internet for them, we get money for doing it, and we help the community, we build trust, and then when we go back to them and wanna sell them heat pumps, they’ll be more likely to open the door and answer us.

0:18:14.5 DM: Yeah, that’s interesting. So, you know, that reminds me of… You probably have listened to the same podcast, but Reid Hoffman likes to talk about there being businesses behind the business that are important to master in order to be successful. Not only is connectivity something that was clearly vital for providing smart buildings, and the distributed generation concept that we were just talking about, but, yeah, I guess realizing that you had an asset that wasn’t going to be fully utilized, and matching that up against the community need dovetails with two things.

0:18:49.9 DM: One, the original mission of the company, which was to provide services in one way or another for groups of people in the city and now beyond. But the other is, it’s sort of opening up new technical possibilities for BlocPower as you think about, about what you’re doing. And maybe even how you go about implementing the vision that sometimes, I assume, you’re thinking about maybe leading with connectivity to then bring in the elements of the connected efficient building to certain places. Where does that come in? 

0:19:23.5 GS: Just to piggyback on that, it’s much easier to lead with connectivity. It’s harder to educate people on the benefits of a heat pump, and then it’s much harder to get them, even if we have a great lease product, and we have subsidies in a lot of cases for these things, it’s harder to get them to commit to a $20,000, $40,000, $60,000 capital expense even amortized over 15 years, whereas for the same amount of money we can probably connect 500 people to the internet. And so, it’s a much lighter lift, it’s giving some things… It’s giving something to people that they already know they want and need. So, it’s not like latent demand, it’s actual demand.

0:20:16.1 GS: And then it’s, it’s again, it’s being part of the community, it’s… A lot of the communities we work in have distrust of other institutions that have not traditionally served them well, and so they’re very distrustful of outsiders. So Donnel, our founder, he came up in community organizing, so it’s a model he understands well. And you have to be useful to people before they’re gonna trust you.

0:20:41.2 DM: Right. Yeah, you earn trust, you don’t come in with trust, that’s right.

0:20:45.0 GS: Yeah, exactly. And then a lot of that is working with the people on the ground, making sure that you’re not trying to solve their problems, but you’re helping them solve problems for themselves. And so which is why it’s really important with our model, we’re doing workforce development, we’re doing training, we’re employing people from the neighborhoods. We are not always choosing the building to do first that maybe on paper would be the best for business, but that gives us the most trust in the community.

0:21:19.7 GS: So, we might do a church that has a private school and a daycare attached to it, and make no money on it. And that may be the first project we do even if there’s an office building next door that potentially we’d end up taking 20% margin or something out of it. And you know, we do what makes sense for the community, and sometimes those are not financial decisions, those are things that we have to wrestle with as a management team, ’cause we still are a for-profit business.

0:21:44.2 DM: Sure.

0:21:45.2 GS: We actually started a non-profit to deal with some of the workforce development things as well, but at the end of the day we’re a for-profit business. And so, we have to balance some of the business decisions with how we just view the world philosophically, ’cause we don’t really want to change the corporate values which are really important to us.

0:22:05.5 DM: Yeah, absolutely. Well, let’s talk a little bit about a project that we are working on together, Kajeet in Oakland, or it’s Kajeet in BlocPower that’s in Oakland. That is actually one of the examples of what you just talked about where the entree of BlocPower into the community is going to be providing connectivity services. And sort of, how does that look from BlocPower’s point of view as that gets rolling and beyond, what’s the story that we’re gonna see?

0:22:33.7 GS: Yeah, so, we were looking outside of New York. In New York we have a WiFi Mesh network, it’s a pretty standard architecture. I’m not gonna sell any vendor’s equipment on the podcast, but the main equipment provider for WiFi for commercial uses, we have those sort of dotting the rooftops and we’re bouncing signal from building to building. And it’s all kinda standard running, for the larger buildings, we’re running Cap 6 inside the building and connecting people to routers that way.

0:23:07.5 GS: That works really well in high-density networks where you may have 500 people in a building, or 1000 people in a building in some cases, and your goal really is to get connectivity into the building, and once it’s in the building you’re wired up, just like anything else. Oakland is a little bit different, so downtown Oakland is a little bit more dense, but people don’t live in those buildings, those are really office towers. But then once you get into West Oakland and East Oakland and Fruitvale, like it’s much more residential, it’s spread out, not as dense. And so the model of putting some rooftop equipment on everyone’s home doesn’t necessarily make sense.

0:23:50.2 GS: And so, we were exploring options, and I was familiar from my time at Link Labs with the private LTE and CBRS model. And I knew Kajeet did work there, so I reached out to Dominic and he put me in touch with the team that does private LTE at Kajeet, and it seemed like a good fit for Oakland. So, the startup cost was a little bit higher than WiFi, but the expansion costs were gonna be a little bit lower. And so, as you may have noticed at the beginning of the podcast, I like to experiment with things sometimes.

[chuckle]

0:24:23.7 GS: And so, this is one of those things where there… So I think it will be wildly successful. But whether it works out or not, it was important to test this type of technology and to test our hypothesis around what technology works best for what types of markets. You can’t truly be technology agnostic unless you test. And so, if someone came up with some brand new wireless thing, and on paper it looked like it would make the numbers work, we would try it in a new market, even if WiFi Mesh and private LTE are both successful. Because the way that companies get stale is they stop doing those things. And as a startup, you can’t really afford to be stale. As a big company you have a lot of economic moats, you can, but as a startup you can’t. And so, we’re actually launching that network tomorrow.

0:25:17.3 DM: That’s right. Exciting.

0:25:18.0 GS: Big day, at a community event, we’re gonna get 50 people indoor, indoor antennas for them to connect to the internet, and we’ll see how that goes, and if it goes well, we’re gonna do a little bit of customer support and making sure that all the instructions we’re giving to people to get on work and those are things… We’ll expand that throughout the city. So we’re excited about that.

0:25:43.4 DM: That’s really, it’s really exciting. And speaking of exciting, it wasn’t even something that you sent or anything like that, it was in… I think it was in the New York Times, I saw that Ithaca had made the decision to electrify the entire… All of their buildings, and you mentioned it earlier, and would love to just hear a little bit more about the project, and where some of the things we’ve been talking about will fit into that work.

0:26:08.9 GS: Yeah, I think the Ithaca project is the result of a visionary mayor and a visionary city planner that don’t listen to people when they say you shouldn’t do something.

[chuckle]

0:26:27.8 GS: The Mayor is a young guy, and so he’s not… He’s “We’re gonna do this,” basically. And so they have by far the most aggressive goal of any city in the world that I’m aware of to decarbonize. They wanna decarbonize their entire city by 2025, not one of these 2040 goals where they’re like, “We’re starting now and we’re going.” But that’s hard, and the city offices there are pretty small, everything is basically a one-person shop. And so they knew they couldn’t do this on their own. They issued an RFP for people to manage this program, but unlike traditional RFPs, they weren’t promising anything. They just said, “This is our goal. We need you to go out and raise money to do it. We need you to go figure out how to finance it. We need you to go figure out the technology needed. We need you to negotiate the contracts. We’re just a couple dudes. We wanna do this, but we don’t know how.”

0:27:29.9 GS: And so we put together a consortium of, I don’t know, between half a dozen and a dozen different organizations. A lot of them were local, but then some international organizations, to try to take on this challenge. It’s probably gonna be a few billion dollars worth of work, sort of on the low end, and we’re lucky enough that we’re at a time where people wanna do this. We have, I think, good partners in our lenders. The Department of Energy is probably gonna step up in this case, and there’s a program that was traditionally used to finance nuclear plants and EV manufacturing facilities. Tesla was one of the original recipients of this loan guarantee. So we’re applying for that for a billion dollars from the Department of Energy. We think that we have a pretty good shot of getting that.

0:28:27.6 GS: And so things like this to reduce the cost of capital are really important because at the end of the day, these are all private individuals, whether they’re companies or citizens that are homeowners, that are making decisions based on the bottom line, and they’re not going to do something just because. There might be a few. You’ll probably have 5% of the population that just do it because they can and they have the money. But that’s the old way of doing things. I think a lot of people listening to this are probably involved in technology. They’ll be familiar with typical technology adoption curves where you have the early adopters, they tend to be wealthier, they tend to have more resources, to be more plugged in, and they’re willing to pay a little bit more for a Tesla, right?

0:29:13.6 DM: Right, and they like to be seen as leading. That’s something that’s really important.

0:29:15.7 GS: Yeah, that’s a small part of the curve. Over time, the people that are a little bit early adopters, a few of their friends might have gotten on the cool thing, so they’re willing to do it. And that curve goes pretty slowly until there’s wide-scale adoption and the cost curves come down, and then other people could then afford to do it. And then at the tail end of the adoption curve it’s when… The stick part of the curve, we call it the laggards, so it’s the people that for whatever reason, whether it’s regulatory reasons, whether they face fines, or whether because they have no choice but to buy a smart phone. So our friend Dave Campbell carried a flip phone around for as long as he possibly could, and then one day it broke and he went to the store and he had no option to get a flip phone anymore, and even he adopted an iPhone at that point. But that’s not necessarily equitable, right?

0:30:07.9 DM: Right, of course not. Yeah.

0:30:10.3 GS: You want people that… ‘Cause benefits accrue to early adopters, right? The people that are able to access technology earliest are the people that are then able to figure out ways to improve it, to make money on follow-on technologies, things that are enabled by those things. In some cases, if it’s just a matter of shifting the payments from short-term to long-term, that opens up a whole new set of people that can pay for it. As we look at this program, we’re trying to figure out how to increase technology adoption of building electrification and air source heat pumps in a way that does not just wait for the early adopters to seed the market and grow. We’re trying to short circuit that and move directly to the people who will benefit the most from it now.

0:30:55.2 GS: And some of that is a combination of government incentives, of utility incentives and state incentives. Some of it is through bulk purchasing agreements and working with manufacturers to bring costs down. Some of that is through workforce training and developing a contractor ecosystem, again, to bring costs down. It all comes down to cost. Where that money comes from is the thing that varies the most, but at the end of the day, these projects mostly only get done if the numbers make sense. And so our job at BlocPower is to be super, super creative at making the numbers make sense for the people that live in Ithaca.

0:31:35.1 DM: Yeah, absolutely, and I’m excited to see how it goes as you roll it out with the partners and how the benefits do accrue to the people who are in the city. Take a couple of final questions, or I’ll have a couple final questions and it’s a little bit of a tangent to what we’ve been chatting about, but there’s overlap, for sure. As you sort of think about where… I mean, these are huge things that you’re taking on as BlocPower expands, but maybe over the next 12 to 18 months beyond the Ithaca project, which I’m sure will take up a lot of time, what do you see as the most exciting things coming down the pike for BlocPower?

0:32:16.4 GS: So the thing that we’re trying to do is interesting, because it’s not in the traditional sense a huge technology advancement. I mean, we do have technology, we have software that helps us target the right buildings and reduce the customer acquisition cost and all of these things that software companies like to do, but at the end of the day, what we’re doing is installing more efficient heating and cooling systems in people’s buildings and maybe making them a little more efficient by doing weatherization or insulation or window films and maybe putting solar on it or a battery. But none of these things are like, we’re not inventing a new battery to do it. What we’re trying to do is do enough of them where the costs come down, so that a big part of it.

0:33:03.3 GS: The other thing that we’re trying to do is in the commercial real estate world, there are plenty of vendors out there that have lots of good data about their class A and B office space. There aren’t a lot of vendors that sell good data to small and medium low-income buildings. And small and medium buildings make up, and when I say small and medium buildings, it’s like less than 50,000 square feet make up 95% of the buildings in the market, and over half of the floor area. So there’s this big swath of buildings that just aren’t being addressed by the market.

0:33:43.4 GS: And the main reason is it’s hard. And so what BlocPower is trying to do is do the hard buildings. We know that, it’s kind of a weird business model to say the reason that people aren’t doing this is because it’s hard. We think we can do it better, and so we’re gonna try. And so what I think is the most exciting thing is, once we prove our model, we’ll actually have competition. We don’t really have competition now. Our competitor is doing nothing like…

0:34:14.8 DM: Right, exactly, like all energy efficiencies, it’s…

0:34:17.5 GS: So if we lose to someone, we lose to… Someone decides not to do anything. But what competition will bring when it comes, is it’ll bring innovation, they’ll force us to innovate, other people might have good ideas that we’re not even thinking about yet, and we’ll have to figure out how to combat those ideas, and it’ll help the entire ecosystem. And then at that point, those 95% of buildings that no one is talking about now, will start to be addressed because of that innovation.

0:34:48.1 GS: And hopefully because we’re on the leading edge of that curve we’ll make billions and billions of dollars, and I can retire in five or 10 years. But if not, the innovation is still really important because, as I mentioned at the beginning, the built environment is hugely important. Buildings make up about 30% of all emissions, and so that’s a pretty big, pretty big deal.

0:35:14.1 DM: It’s a huge portion.

0:35:18.1 GS: It’s exciting. I’m just really excited to be on the journey, and I’m only about six months into my time at BlocPower, but it feels like it’s been longer. And so much has happened in that six months, and I can only imagine what the next 12 months is gonna look like as we take on the Ithaca challenge and expand in Oakland and expand in New York, and if legislation passes, then it’s gonna be a free-for-all for who can get heat pump rebase the fastest, and we’re gonna have our hands raised first, so very excited about the future.

0:35:49.1 DM: Awesome. One last question, just to bring it back to connectivity and IoT, sort of the same question, what do you see maybe as the biggest challenges or areas of focus over the next 18, 24 months, you know, things technical, technological innovation, there’s obviously some major supply chain issues that everybody is dealing with right now, but specifically in the context of BlocPower in the built environment, where are their needs and challenges, and what do you think you might see in terms of addressing them?

0:36:18.6 GS: Yeah, I think the biggest challenge that we see is a proliferation of sort of incompatible things, and there’s this cost benefit to standardization, because standardization can bring costs down, it can make things easier to install, it can bring the level of proficiency from a technician down to be able to do the same work, but it also can stifle innovation. And so what we’re having now is a proliferation of different types of control systems and different types of connectivity, and so again, to these sort of discussions with smart equipment vendors or smart thermostat vendors.

0:36:58.1 GS And I am cursed with knowledge from Link Labs about cellular chips and LPWAN chips and modulations, and the difference between thread and matter and ZigBee, and so I’m in these conversations with vendors and I’m like, I don’t really say anything ’cause it’s not my job, and it’s not the industry I’m in now, but I’m hearing them talking about their product development cycles and them incorporating some chip that I know is gonna be obsolete in 12 months. So by the time it gets to market like it won’t actually be useful. So I’m watching these sort of things, and with 5G, the hardware, the connectivity hardware for 5G is still not cheap enough to put into all these devices.

0:37:48.7 GS: And so you have this hodgepodge with IoT devices of different technologies, different rate plans, and so I think there’ll be convergence there, I think probably over the next two, three years, there’ll be some convergence, although I said that five years ago and…

0:38:03.8 DM: And we’re still not there.

0:38:05.1 GS: Who knows, not a good prognosticator there. To me, that’s the biggest challenge, because what it means is like companies like BlocPower, whose job isn’t to figure out what the best IoT radio to put into a device is, we’re affected by that. And so the question is like, do we build that area of competence in our business, do we find partners who do? And if we do that, there’s overhead associated with that. It’s just additional friction. That’s really the main thing.

0:38:40.2 DM: Yeah, no, that’s perfect, and I couldn’t agree more. Those challenges persist. I think when we started in the IoT world in 2014, I don’t know that I would have at all predicted that we would be maybe at the very beginning of things like private LoRaWAN and LoRaWAN itself being a big deal.

0:39:01.1 GS: And who would have known that Helium would have pivoted to 5G?

0:39:03.8 DM: Right, and all things in between. It’s a fascinating world, but no, standardization is something that can, in some ways, can actually drive different types of innovation. So in connectivity standardization, since it’s in the middle, it’s gonna always be involved. And one of the things that we’re seeing in healthcare is that end device standardization about communication types and packets of data actually allow for a lot of innovation in terms of delivery and connection to electronic health records in hospitals, but I’m sure there’s a long fight and a lot of resistance to do that, because if you can avoid standardization then you could potentially capture an entire market, but something that any kind of place where there isn’t going to be a winner-take-all outcome, standardization can be very effective and very helpful.

0:39:51.3 DM: Glenn, thanks very much for joining us today. I really appreciate your time, and I wish you and BlocPower nothing but success as you build out your projects in Oakland, Ithaca and beyond.

0:40:04.8 GS: Thanks, Dominic, pleasure to be here. Have a great weekend.