David Senra - Zach Dell on Base Power, Energy Abundance & Building a Company for Life

Episode Date: September 6, 2026

Zach Dell is the co-founder of Base Power, an energy company on a mission to make electricity more affordable and reliable. His starting insight was that home batteries had the wrong business model. Companies sold expensive backup systems that sat idle most of the time. Base installs batteries at homes, retains ownership and operates them as a fleet: charging when electricity is cheap, discharging when it is expensive and providing backup when the grid goes down. The homeowner gets lower electricity bills and backup power. Base gets an asset it can put to work every day. Dell explains why batteries can make the existing grid more efficient, why installing them where people consume electricity helps overcome infrastructure bottlenecks and how Base serves both homeowners and utilities. His strategy is to build a compounding cost advantage through vertical integration and technology. That now includes Base Core, a battery designed and manufactured by the company, and a longer-term ambition to help meet the growing power demands of AI. Dell grew up watching his father, Michael Dell, build a company and knew from childhood that he wanted to become an entrepreneur. After several early ventures failed, he went into investing to study what makes a great business. He describes the “Dad Terminal”—ongoing conversations with his father about strategy, operations and the problems in front of them—and the lessons Base has adopted from former SpaceX employees. Engineers and manufacturing teams work close together, and the entire company organizes around a few clearly defined goals. He also explains the operating habits behind Base: monthly written updates, visible performance dashboards and a physical turtle placed on the desk of the person responsible for resolving a critical bottleneck. He keeps separate notebooks for working in the business and working on it, setting aside time each night to think on paper without distractions. He discusses building a beloved brand in energy, why his co-founder conversations focus on what is going wrong and why Base is his last company. His ambition is a lifelong effort to make, move, store and sell electricity more affordably and reliably. Show notes: https://www.davidsenra.com/zach-dell Made possible by Ramp: https://ramp.com AppLovin: https://applovin.com/senra Deel: https://deel.com/senra Chapters (00:00:00) Energy Abundance & the Power Demands of AI (00:06:15) How Batteries Make the Grid More Efficient (00:09:09) Early Ventures & the Insight Behind Base (00:15:34) We Don't Sell Batteries. We Sell Electricity. (00:22:25) How Base Works With Utilities & Competes for Customers (00:30:44) Learning From Michael Dell: The "Dad Terminal" (00:32:22) Vertical Integration & Lessons From SpaceX (00:39:34) Writing Clearly & Making Time to Think (00:44:53) North Stars, Turtles & Relentless Execution (00:53:55) Learning From Great Founders & Building a Beloved Brand (00:56:27) What's Your Constraint? (01:06:26) Base Core & Taking Control of Manufacturing (01:11:02) A Lifelong Mission & the Last Company He'll Build Learn more about your ad choices. Visit megaphone.fm/adchoices

So out of every single guest on the show so far, yours is the business that I understand the least. So let's use this conversation as an opportunity to fix that. Explain what you're working on and what your mission and how you're doing it. Yeah. So the grid is something in the power system and electricity broadly is a topic that a lot of people don't understand. It's pretty common. I think that's because there's a ton of nuance to it. It's a very old system.

It's highly regulated. And so it's not something that is in kind of natural common sight guys. The truth is our business is very simple. We're in the business of making and delivering megawatts. And our megawatts are the most affordable and reliable megawatts in the world on the planet. At least that's our ambition. And our mission is to power human prosperity by driving energy abundance. And we look to a very simple correlation between consumption of energy per capita and GDP per capita.

And the takeaway is that the more energy population is able to consume, the better their life gets. And so if you can make megawatts, gigawatts, terawatts, more affordable and reliable, it's the best way to make people's lives better. And that's a mission that we have all rallied around and gotten super passionate about. We think about things in terms of a mission, a vision, and a strategy. So the mission is why are we all here?

We're all here to fix the grid and deliver affordable, reliable power and promote human prosperity by driving energy abundance. Before we go further, explain why the grid needs fixing. What's the problem with that? it now? It's not that it's broken, it's that it's too small. How could something as important as electricity and power not be something that we can scale? Like, how do we get into the situation to begin with? I think because capitalism hasn't been able to work its magic on the industry because it's highly regulated. And the companies around it that have built it don't have an

incentive to innovate. They're not, they're rate regulated and they get paid on CAPEX, not on R&D. Right. And so the amount of money that they spend on R&D as a percentage of their revenue is like as low as any industry you'll ever find. Right. They're not engineering led organizations. They're kind of project management and CAPEX oriented organizations. And so there has not been a bunch of innovation and how can we scale our capacity to consume electricity? It's just like how do we go build as fast as we can and earn a return on that building? We just change that, right? We are an energy technology company that is R&D driven engineering led and technology focused. And we are going to build technology that allows us to scale our consumption of electricity, deliver more megawatts that are reliable and affordable, and help meet the moment of the inflection in electricity demand. Okay, so that's while you were talking, that's what I was thinking. It's like, okay, so there's this huge surge that will continue. We need more power in electricity because everything going on with AI.

Before that, was there any other inflection point, or did the demand for electricity in the United States just kind of grow linearly? Over the last 50 years, demand for electricity, the U.S. has grown at basically the rate of inflation. So it has not really grown much. Okay. So this is a first, this is a like one time in history problem that's having right now? I think that there was underlying growth kind of coming or at least starting to come from the electrification of transportation and electric vehicles. But that's played out less quickly than some might have thought. I think that will continue to play out as the cost goes down.

and things like electric heat pumps and electrification of heavy industry will drive electricity demand but the AI infrastructure build out has massively accelerated it. Can you explain like how big the demand is for electricity for AI? I don't even know.

I hear about it, but I don't know. The way to think about it is like over the last 20 years, electricity demand is going at roughly at 2% of competitive annual growth grade and we think it'll go to somewhere on the order of 10%, which is obviously a 5X

which on a base as large as energy is really, really big. Okay, so then go back to the mission vision. So we think about it in terms the mission, the vision, and the strategy, right? The mission is why you're here. We're here to promote human prosperity by driving energy abundance,

which basically just means deliver affordable and reliable power. The vision is, what does that even mean? What does that actually look like? And what that looks like is the modern power company of the electric era, right? We think that there's a generational kind of paradigm shift happening in the energy industry,

where the last five decades of energy were defined by coal and then natural gas as the marginal megawad. And the next five decades will be defined by solar batteries and software. And we are going to build that company that is oriented around that new paradigm. And then the strategy is how do we win?

Like what is our competitive approach? What is our formula for success? And I would describe that as developing a compounding cost advantage through vertical integration and technology. And the reason why that is a strategy is because energy, electricity is a commodity. And the best commodity is the least expensive,

most reliable commodity, right? And so we've oriented the entire entire business around the fundamentals of the industry, which is to develop a cost advantage, use technology, use vertical integration, oriented all around the mission of seeming prosperity and energy abundance. And then, you know, in the last three years,

something interesting has happened, which is a new consumer of electricity has showed up, and it's now the fastest growing and soon going to be the largest consumer of electricity in the world. And its name is AI. And so we're going to orient the company around that to serve that demand and meet that moment, so that we can

continue to expand our AI infrastructure and accelerate all the incredible advances that will come as a result of this technology, which I think is the greatest technological breakthrough of our lifetime. So explain how you're reorienting the company around that? Well, it's less of a reorientation and more of a using all the technology that we're already building and planning to build to accelerate the build out of AI infrastructure by bringing the power to the compute and bringing the compute to the power. And what this means is,

accelerating the build out of these centralized data centers by deploying our megawatts around those data centers and offsetting that load so we can add head room to the system so we can build more of it. And then taking that compute hardware and actually bringing it to this massive fleet of energy that we've developed to accelerate the deployment of it. Okay, so how do you generate more power then?

So there are really two distinct things to think about here. There's generation, and then there's transmission and distribution, right? So generation is where the new electrons come from, right? Solar, wind, gas, coal, geothermal, hydroelectric. There's tons of different ways to get fusion, fission. There's a bunch of different ways to generate energy. And then you have to move it, right?

And poles and wires move energy through space, and batteries move energy through time. The grid is a system by which the transmission and distribution happens, and it's built for the peak. So it's massively oversized, which means that you have a bunch of inefficiency and that it's not being used all the time. It's not being highly utilized. When you have a system that runs up low utilization,

it makes the system very expensive. Batteries allow you to increase the utilization of that system because you can charge them when demand is really low and you can discharge them when demand is really high. And so you can take the curve of demand and you can flatten it. And therefore, you can lower the total delivered cost because the capacity factor, as it's called in the industry or the utilization has gone up.

So with our current product said today, focused on battery storage, we're not making more electricity, we're just using it more efficiently to drive the cost down. So if I have an understanding, like, the optimization here is not, you're not adding more lines and wires. You're actually just optimizing the existing system better through batteries. Exactly. We're taking, there's a math, like, think about in the middle of the day in Texas,

like right now, it's hot as hell outside. It's hot as hell outside. The sun is high in the sky, and if you go to urquod.com and you go look at the prices, I bet you wholesale prices are really low. And that's because we have a ton of solar in the state. It's amazing, right? And so we're charging our batteries right now. I can't tell you that for sure, but we are most likely charging during the solar grant today, right?

When the prices go down. And then when the sun goes down tonight and everyone goes home and they turn on their AC from work, prices are going to go up because demand is going up and supply is going down, right? So the sun is down. The solar is no longer producing. Prices go up. We discharged the batteries. So we didn't create new electricity, but we time shift today.

What was happening before? Our companies were doing nothing? Well, we were just using the system less efficiently. So we were curtailing solar, we still are curtailing solar. And there's a bunch of excess generation that's happening in the middle of the day where that's why prices go so low. It's because we're generating more solar than we can use, but we can't time shift that to be used when the sun goes down in the evenings.

So that's why you're obsessive batteries. And I've been obsessed with batteries in college. And batteries have been around for decades. And actually, you know, John would be good enough, the original PhD scientist who worked on the LP battery chemistry. Hold on. His name was Good enough? Good enough. Good enough.

And he rests in peace. He was a professor at the University of Texas just down the street. Okay. So how does a kid get obsessed of battery cell? I mean, it's kind of a long story. We have time. Look, I mean, as you know, we talked about a bunch. Growing up, I was always obsessed with big, hard problems.

And just trying to... And that was always what I, my understanding of capitalism and company building was just organizing people around the hardest problems. And the bigger the problem, the larger the economic outcome downstream with the solution. And I watched my dad do it. And I watched him, you know, totally inflect the PC industry. And now what he's doing with the AI infrastructure buildout and a server business. And that was always my strongest motivation. I mean, he was my hero and he's still my hero.

And I always wanted to be like him. And there's, you know, there's just no two ways about it. Like I wanted to be an entrepreneur. I mean, I started my first company in the eighth grade, and I started my second company, my sophomore year of high school, and I started my third company, my sophomore year of college. And basically none of them worked, but I was just learning stuff and just trying to get out there and solve problems. And in college, I was working on a business to, and, you know, business and air quotes is more of a science project. It was not really a good commercial idea to convert human waste into compressed methane or biogas. It could be used as a sort of low-cost electricity in the rural world because I was obsessed with this idea of providing people with access to low-cost power.

that didn't happen because it was this obvious way to make your life better. And around that time, I was really kind of nerd-snifed, for lack of a better phrase, by solar. I thought solar was the coolest thing ever. And solar was great, but the problem with the sun is that it goes away, unless you're in space. And so you need a mechanism by which you can use that energy that's produced when the sun is out at times when the sun is not there. And batteries are the answer. And battery technology, you know, most of the batteries in the early days, you know, you had a lot of different chemistries out there, and you had iron air, and you had solid state, and then you have this kind of NMC high nickel lithium ion chemistry, catch a lot of steam, and most of

the EVs and the early EV build out were this high nickel NMC chemistry, and only in the last five years or so, this low nickel LFP chemistry, which is really better for stationary storage. It's safer, longer duration, it started to emerge. When I was in college, I was really excited about solar, really excited about batteries. In fact, I tried to put together a deal as a 21-year-old college kid to go lease a piece of land on the big island of Hawaii, which has really low-cost land and really high-cost electricity. Build a solar array. Actually, it was going to be EPC at the time by Solar City, who was doing a lot of utility-scale EPC.

This is before they sold to Tesla? Yes. Okay. And sign a power purchase agreement with Hawaii Electric, which is a 20-year PPA, and then go finance the whole project at, you know, 90% lend to value, and, you know, earn a 20% percent. percent lower down at our. And I, you know, in college, so, you know, after I'm working on this project in India, I end up going into finance, you know, down the internet. Basically, I was like, okay, this business isn't going to work. Before I start another company, I need to go learn about

good businesses. And so I'm going to go to the place where I can find the smartest people that work the hardest. And I'm just going to sit next to them and just work my butt off and try to get smarter, basically, and build tools from my toolkit. But you knew no matter what you were going to be an entrepreneur. For sure. There's no question. I never, I was never like, oh, I'm going to be a private equity partner at Blackstone. No, but you are one of the, one of the, you are one of the, because we talk a bunch also, but you are one of the, all my founder friends that talk the most, like,

a P.E. guy. You can take the kid out of Blackstone, but not the black son out of the kid, I guess. I do love, I'm very quantitative and I'm competitive, and I love markets, and I think that's because I grew up studying companies and markets, and like any good, you know, young Jewish boy, I took my bar much of money and put it in the stock market and, you know,

track companies, and it's like, you know, still manage a PA that I have a lot of fun, you know, falling companies. I just love studying businesses. makes good businesses. Like you, he was a big fan of, you know, the Berkshire letters and, you know, the Amazon share hurdle letters and, you know, the constellation letters and would devour those things. And so it was more of, I'm so interested in finance and accounting and investing in capital allocation because it is a necessary skill to be a great CEO of a capital-intensive business, right? And that was always why I've been interested in those things. And so long story short,

I'm in college and I go, you know, intern at Blackstone. I get the return offer. I'm back in college before going back to Blackstone. And I'm like, oh, I know how to use spreadsheets now, whatever. And so I build a model, a memo slides for this, like, solar project. And I go to New York, and I go get in touch with a bunch of, like, project finance teams at these big banks. And I go pitch them on my, you know, $30 million loan that I want to go build the solar ray in Hawaii. And they're all like, and, you know, I get some meetings. And it's nice people take the meeting with this college kid.

And I present my model and my memo. And they're like, who's going to run this project? Like, where's your team? I was like, I am. Like, I'm going to, what are you talking about? I'm going to just do it, and I have everything figured out, and here's the memo. And they're like, you're going to go be an analyst at Blackstone. Like this is, and I got basically laughed out of the room by everybody.

But I was dead serious. I was like, this is the math pencils. And I think that would have been a great investment. It would have worked. But like, it was very bullish on solar economics back then. And I show up at Blackstone. And there's a bunch of people who are kind of poking around the battery industry. The supply chain, you know, we looked at carving out of lithium mine, which I spent a

bunch of time on the firm ended up buying a business that's now one of the largest utility-scale battery developers in the country. And I got really excited about what was happening in the battery space. But there was this obvious issue with utility-scale batteries. When I say utility-scale batteries, I mean big shipping containers in a farm field somewhere. And you can probably think about what that looks like, and you've seen pictures of that. And that's been a really good asset class over the last decade or two. And there's basically every big private equity firm has a utility-scale battery platform, Apollo and KKR and Blackstone, Oak Tree, and all these guys areas in Brookfield. So they all own these assets and they, you know, they're highly levered and they're a nice return,

but they're fundamentally constrained really by two things. One is interconnection capacity. So there's not enough places on the grid to go put these big shipping containers. And the second is transmission congestion. These big load pockets like downtown Austin, downtown Dallas, downtown Houston, where you need the power, that's not where you can put the shipping container battery, right? And so you have transmission congestion, which shows up in pricing, and you're unable to get the power where you need it at the right time. And so that really showed me or kind of brought to light the insight around a distributed architecture.

Deploying batteries, deploying... It's not the actual house. Where the interconnection exists, where the load is. Got it. Right? So you don't have to worry about the transmission problem. You don't have to worry about the interconnection. That's really fucking interesting.

I don't think I understood that before you just said that. So then I started studying the distributed battery world in the residential battery world. And I looked at every company in the space and, you know, read the 10Ks and the S-1s and talk to the analysts, and you learn that the public trade companies and all the companies in the space, they're all selling a high margin premium product. It's a $20,000 home battery or $20,000 home generator that they sell you outright, they make a gross margin on, and they're done. They're not actually building it like infrastructure. They're not utilizing it like infrastructure. And so it was this aha moment of like, oh, the distributed architecture is the answer. And all the

companies that are around that problem, they're focused on the wrong business model. They're focused on high margin upfront sales. And then I started getting really excited because I'm like, oh my God, if you're going to take on an incumbent, my view is the best way to do it is to have a counter-positioned business model because if I showed up and said, I have, you know, the best home battery on the market, the best home generator on the market, and I'm going to sell it to you for 10% below the big guys. Your margin is my opportunity, right? Like these these big guys are going to compete on price. they're going to, first they're going to copy my product, it was better, then they're going to drop their price,

and they're going to run me out of business. But if I show up and say, I don't sell batteries, I sell electricity, and we're going to install this battery on your home. When the grid's up and running, we use it. As a result, you get cheap electricity. When the grid goes down, you use it. And because of our different business model, you pay one 20th or even one 40th of what you pay to own it outright, then I can win. And if you want to compete with me and you're one of the incumbents, you've got to completely change your business model, which, as you know, for a public company, is very hard, right? Because you go to Wall Street, you go to Wall Street,

and you say, we've been making money this way for the last decade, and now we're going to make money an entirely new way. Typically, Wall Street doesn't like that very much. So I got really excited about the setup of this distributed architecture, this counterposition business model, and then the opportunity to really put it in the universe

and go after an opportunity that not only was large in scale, but in importance and impact on the world, back to the point around human prosperity, energy abundance, energy consumption per capita, GDP per capita, and that correlation. I want to tell you about the presenting sponsor of this podcast, Ramp. I have been reading a lot about SpaceX lately. SpaceX is one of the most valuable businesses in the world,

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And you can do that by going to apploven.com. That's apploven.com. Back to the idea that you're not selling batteries, almost like leasing it, right? Like they cannot buy it from you even if they wanted to. I was telling the crew before you got here, I was like, there's just some kind of weird parallel. And I don't even know if this makes sense to Zach.

but like everybody's like, oh, you should do more episodes of founders on Howard Hughes. And I was like, I've done like one or two. And he's like actually interesting. But like if you read about like, I find his dad more interesting than Howard Hughes, right? Because his dad was selling a really advanced drill bit, right? In the second oil boom that was taking place largely in Texas and Oklahoma and everything else, Howard Hughes, I think, senior was one of the richest people alive. And he, what his one in his business model innovation was that you couldn't buy it from him.

You had to lease it. So he would service it like it would break. He'd have to sharpen everything else. But you literally were, essentially, you just had this reoccurring revenue coming in because you can't buy it for me. You can't just buy it and take off and I never see you again.

You'd like, you have to pay me every month. And then that compound and he just wind up, you know, printing cash. And there was the cash from his dad's business that how he was used to do, you know, the movies and the planes and everything else. There's like an interesting parallel to I think what you're doing. The way that I thought about the business model

and Justin and I, the way we thought about it from the beginning, is it just starts with the customer and what they want, right? If I ask you, David, what would you like out of your power company? My guess is you'd say something like, I want my bill to go down, and I want to never lose electricity. Is there anything else you want out of your power company?

No. No, right? And so how do we deliver that outcome for you? Well, if I sell you the battery, you're not a wholesale power market participant. You're not a qualified scheduling entity or a load scheduling entity, and you don't have a hedging team

and a trading desk, and you're not thinking about commodity prices, right? And so you can't actually use that battery 99% of the time when they're going to something running, to your benefit. You can't use it to lower your power prices, right? It just sits there on your home, and then when an outage happens, awesome, you have backup that you pay 20 grand for, and you probably feel like you're overpaid a little bit, but like you're happy. By us owning the battery, we can use it the 99% of the time that the grid has been running as a wholesale power market

asset. And then we can leverage the value of that to lower your bill, to drop your price, because we're creating value. It's like, we have a box on your house that is going to generate money, and we're going to share the money with you in the form of a lower electricity bill. really that simple. So the asset ownership model is not because, you know, we're greedy or we really just like want to own things. It's because it's a way to deliver the best product to the customer. That's all the matter. Yeah, in an industry where they don't really give a shit about the customer because they're monopoly in most cases. Yes, it's complicated. So, first of all, there's, you know, regulated and deregulated states. We were talking about this before we started

recording. This is really interesting. Can you explain this? So it's regulated and deregulated states in the U.S. It's kind of a history lesson here, If you look back over 50 years, electricity is one of the few industries in the U.S. that did not get entirely deregulated. Shipping, airlines, telecom, trucking, you know, electricity in the late 90s or the 2000s. Actually, in California, deregulation started there and basically Enron manipulated the market and kind of busted the power market in California and deregulation like totally stopped. And Rick Perry and George Bush in Texas like carried the torch.

of deregulation, and the Public Jailty Commission, Texas, pushed this kind of competitive market construct. Now, it's going to get even more complicated. In Texas, 80% of the market is deregulated. 20% of the market is still regulated. So Austin Energy is a municipal utility. So we sit here in Austin in our office that is served by Austin Energy.

We cannot be the electricity provider to Austin Energy. Same thing in San Antonio. CPS is the municipal utility there. Same thing in Georgetown. Georgetown Electric is a municipal utility there. There's another category of utility called a co-op or a choir. This is more in the rural areas, but now there's really big cooperators

like CoServe, who's a customer of ours, or a Peternilis Electric Co-op, that's the largest co-op in the country, also in Texas. And these are, think of them as kind of non-profits that operate for the benefit of the members. All the members, like the cooperative, are owners of the cooperative,

and their job is to lower rates. And so in Texas, you have 80% of the market, Houston, Dallas, North Austin, OnCourse Centerpoint, AEP territory that is deregulated, competitive. You can sign up to be an interesting, you can sell power to anybody. You have the generators who operate the gas plants, the coal plants, and the nuclear plants, and they sell power to a retail provider like us, directly to the consumer.

And then you have the municipal utilities in Austin, San Antonio and Georgetown. You have the co-ops, co-serve, Guadalupe Valley Electric Co-op, Farmers Electric, these are all customers of ours. What do you mean by customers of yours? So we build battery fleets for the utilities that they use in the same way that we do. So for co-serve electric, for example, we have built them, or in the process of building them 100 megawatt and seem to be expanded, fleet of batteries that they use in the same way that we do in the deregulated markets. They charge the batteries and the price of power is low.

They discharge the batteries and the price of power is high. They make money in the spread. They share that spread with their members in the form of lower prices. And they're the ones installing your batteries, or you still did the installations? We install them. We install the fleet for them.

So it's much like them going and saying, I need 100 megawatts of utility scale battery. Instead of the big shipping container battery, we go put thousands of batteries on their service territory and we give them a piece of software, basepowercom, backslash co-serve. They can go in. They see their whole fleet. They can charge, discharge. They can schedule behavior off the fleet. And it's a wholesale power asset that they can use to lower prices. And then they get the reliability benefit for their homeowners.

Okay. And so that was going to be my next question. You're only installing right now batteries on individual homes, correct? That's right. Are you doing anything else besides that at the moment? Today, or only focused on residential homes. Yeah. Okay. So back to the, to the market setup. You know, in the early 2000s, you had this deregulation push, Texas really carried the torch, a couple other states in the Midwest, Ohio, and in Illinois, and the northeast, Pennsylvania, New Jersey, Connecticut, Massachusetts, parts of New York, but it's kind of complicated, all deregulated to an extent. Not all of them, and none of them really as far as Texas.

Texas is kind of the most competitive in deregulated. That's why we decided to start here. In relative to the deregulated markets, we compete with the retail energy providers, the Jen Taylor's Distra Constellation, NRG, and then in the regulated markets, we are a vendor to utilities and we're a partner to them. And you're totally right. They don't have an incentive to innovate and go build a factory and come up with new kinds of batteries and technology, because that's not how they're set up to earn. They're rate regulated. Explain why they don't have the incentive to do so. Yeah. So if you had a utility that had a monopoly ownership over a service territory, for example, let's say, you know, PG&E has all of

California, which is not exactly true. There's LADWP and in Southern California. There's Soka Edison as well, but let's say PG&E, for the illustrative example, has a monopoly over all of California. They can just raise rates indefinitely and just like jack profits. And, you know, that would be bad for consumers. And so instead, you have this concept of the rate base where there's a public utility commission that kind of governs the utility, tells them what they can build and what they can't build, and then they earn a return that's regulated, and it's typically, you know, 9% unlevered on the capEx they deploy. So they go to the regulator and they file what's called a rate case,

which is like, we need to build all this stuff to meet demand and to upgrade the system. And the regulator says, yes, you can build that. And then they go build it and they earn a return on it. And so there's no financial incentive for them to come with new technology. Their only financial incentive is to go increase the size of the rate base and go build more assets. And so we show up and say, we are your technology partner. We are your outsourced R&D engine. we're going to bring to you better solutions

so that you can scale your infrastructure without increasing rates for your rate pairs. And that's how we serve the regulated utility utility. So today our business is really one technology stack which we can talk in depth about that is brought to market behind two business models, regulated and deregulated. The deregulated model,

we directly sell power to the homeowner, we install a battery around their home, we own and operate it, we bid into the wholesale power market from the grids up and running, when the grid is down, the homeowner gets that better. That would be your preferred. You could snap your fingers, the entire country would be like that, correct?

Would that be better for your business or no? Not necessarily. I mean, we love the utility partnership model too because it has really large reach. And there are benefits to working with one counterparty to address a large service territory. And there are some synergies. For example, you wouldn't want 10 different wires going to a home. That would be redundant. So it makes sense to have the poles and wires be regulated.

And look, I think there's a lot of nuance. energy markets. And so it's hard to say the whole grid should be regulated. The whole grid should be deregulated. It's a very geographically defined problem. But the derog business is direct to consumer retail power and wholesale market participation of our technology. The reg business is we are a vendor to the utilities. We build in these battery fleets and then we sign 10-year contracts with them. And they pay us for that fleet over time. It's megawatts as a service. That's the business. It's megawatts as a service. We build 100 megawatts, 500 megawatts, 1,000 megawatts or a gigawad. and they pay us for that.

They use those megawatts, and we make money on them basically buying those megawatts from us over time. Okay, wait, and say something more about that you said they're your 10-year contracts? Yeah, they're typically long-duration contracts where we build them a fleet of batteries, and they operate them for 10 years. Why is the long-duration important? Well, they're highly capital-intents. For you or for them?

For us, because we're building them. And so the long-duration contract gives a certainty of cash flows, which we can use to finance. I think I have a better understanding of your business now. Definitely for the non-regulated than the regulated. I want to talk about how you think about company building. You've been obsessed with entrepreneurship since you were a kid. You started your first company.

You said in eighth grade, something like that? Eighth grade, yeah. Okay. Talk about like... My cousins who were in high school, they had a little more experience than me, but not much. Okay. I mean, I've been studying this since, I mean, I mean, I was a little kid. I mean, I had a front row seat to one of the bias,

but one of the greatest entrepreneurs of all time still operating is one of the greatest entrepreneurs of all time. And the rate of learn... I mean, I just get to learn from him every day and we're incredibly close, as you know, and we compare notes about, and we talked about his business, and we talked about our business, and we provide each other's feedback, and we disagree, and we argue, and it's a ton of fun. And so I've been studying the art of company building for as long as I can remember, both in that context and then also the investing roles.

I mean, investing is really just trying to predict the future in the context of understanding what makes a great company and which ones are going to win that version of the future. And so it feels like, you know, it felt like to me the perfect training ground to become an entrepreneur. So you said earlier that your dad, Michael Dell, is your hero. He's one of my heroes, too. I actually talked to him yesterday. And the funny thing about that is, I mean, he's got to such a, like, a friendly

UI, but he's so competitive and so, like, determined to win that there's just a, I don't even know how to, like, just as a position between, like, how friendly he is and just how fiercely competitive he is. Since you mentioned him, I want to bring up something you told me one time that you called the dad terminal. Can you say what the dad terminal is? Yeah. So you joke that I'm, you know, kind of a financially minded person.

And the Bloomberg terminal is obviously this, like, incredible technology that, you know, people in the finance industry use to ask questions and get information and think and analyze opportunities. And the dad terminal is my version of that where I call up dad. And we have conversations about business topics and strategic objectives and challenges that I'm facing. and it's the most fun, it's the most fun thing ever, because, you know, he has more context than anyone but my mom probably on me and what's going on in my brain. And he's got a lot of context on the business

because we talk all the time. And he's scaled a vertically integrated capital-intense hardware company, consumer-facing. There's a lot of similarities between nine or two businesses. And so I use it as an opportunity to learn from him. And I like to think that every once in a while, you know, he gets a new perspective or I ask an interesting question. He learns a thing for me.

I was going to ask, like, when's the last time? you presented him a situation that was new to him. I like to think it happens pretty often. You have to ask him. Yeah. But it's fun. We challenge each other and push each other. We spend basically no time celebrating, you know,

and basically all the time trying to solve problems. And you're right, he's totally competitive and incredibly focused. But he does it with a smile. And I try to do the same thing. And I think you talk to the team here, like they would tell you that I'm pretty intense and pretty competitive and quite focused. But I do with a smile,

and I try to have fun. and I take the job really seriously, but I don't take myself that seriously. You mentioned vertical integration a couple of times. Why is that so important? It's only important if you're playing a cost-focused game, right? Like, it's not vertical integration because it's fun or because it's cool, it's because we're trying to compete on cost.

If vertical integration is a great strategy to win on cost, right? Electricity is a commodity, the best form of commodity is the cheapest one, and if you're going to deliver that, you've got to vertically integrate. So that's why we vertically integrate. When you first started the company, though, like how do you first start the company, though, though. Like, how do you go from this company doesn't exist to I'm going to create a, like a new essentially power company that's vertically integrated? A lot of reading, writing, thinking, and, you know, deliberation with my co-founder Justin and, and, you know, Jared, who's our first hire and Dana and

Cole and the early people that joined the company. I think we still do this to this day. Like, we do a lot of, you know, crawl, walk, run, a lot of iterating, a lot of testing and learning. And, look, I think we started Justin and I with a belief that the energy industry, was going through a paradigm shift, that battery storage was a really valuable technology in that paradigm shift, and that building a battery pack, you know, highly optimized battery pack assembly business

in the U.S. was going to be a really strong position to be in. And that's about it. Why on that point? Because batteries had a lot of value, and there was a lot of margin being captured by the OEMs, basically. So why is it important to manufacture it here, though?

To control the supply chain. It's less about, like, physically where it is being in this country or another country and the fact that coupling, engineering, and manufacturing and actually, like, making the thing where you design a thing, and having the engineers that make the thing and the engineers that design a thing, you have a lot of, like, I did this episode on Elon,

how Elon works. I think it's the most downloaded episode of Founders ever. You have, there's a lot of, like, SpaceX culture or ideas that I hear from you. Yeah. And obviously, Justin was there. Yeah. Like, yeah, I mean, Justin was there for kind of the formative years of his career,

obviously Andrews as well. Jared, our first hire was there for the formative years of his career. Same with Cole Jones. It was hire number four. We've got a lot of SpaceX people here. It's a company that I deeply admire. I've gotten to know Brett Johnson, the CFO there, really admire him and Gwen. And of course, Elon is the greatest technologist of all time.

And I think the culture inside of SpaceX and the operational cadence and the way their kind of ability to focus on the critical path and unblock things in their path to get to their goals that are all oriented around their mission. It's super inspiring. It's something we've tried to replicate. And they're really hard to compete against office space. I think it was here last year or like maybe six months ago. And you're like, yeah, that building over there, we almost had a lease and then Elon came in and swooped it up. They did. Yeah. It was a bummer, but you can only look forward, not backward. So we found a new spot. It's going to be better, actually. We're going to build a campus with manufacturing, engineering, everything in one place. Is this the one out by

the airport? Yeah. So talk more about this. Yeah, so business is growing and we've got to expand our manufacturing footprint. And of course, the headcount too, and last time you were here, I think we were just on the first floor. Now we're on all three floors. We'll soon fill up the whole thing. Dude, the growth is crazy. So I was reading through all of your company like monthly reports.

Yeah, monthly efforts. Yeah. Just like, we're doing like 1.3 a day or 6 a day. And then I skipped, like, I went to the end and just like, and we have tens of thousands of these things everywhere. It's pretty impressive. It's just like, you know, maniacal focus, relentless execution, and try to get a little bit better every day

every week every month, and you can get a lot done. But yeah, business is growing a ton, and we've got to expand our manufacturing footprint, our headcount's growing, and we feel really strongly about in-person work, having everyone in the same place, one team, one dream, one culture.

It's not like, oh, the factory people and the office people, it's like one company, and we eat lunch together, we spend time together, and so having everyone co-located is really important. Your desk is right here. Yeah, yeah. Like in just the same as anybody else's.

Yeah, of course. There's a lot of, again, And like I am fascinated by the way Elon runs his companies and he has a, what I feel is like very simple ideas, but they all work together. Obviously, he's doing complex shit. But it's not like rocket science. Private offices are lame. Like, I want to be, and think of it.

I want to be with everyone. I want to overhear stuff. I want people to overhear stuff. I want people to feel like they can come to my desk and ask me questions. And it's just, it's just better. It's more fun. I like, I love the team. I like being with them.

And there's no reason to like hide away in a private office. And also I don't deserve special treatment. I'm on the team, just like the interns are on the team. just like the person who started a week goes on the team, just like the third hire is on the team, and we're all on the same team together. We eat the same food. We have the same desk.

We use the same tools. And I just think that's the right way to operate. And so, yeah, this new facility is going to be amazing. We're going to have everything co-located. And look, I mean, go to Renrock, and I think you've been. You see the Dell facility. I mean, for a long time, everyone was there. And of course, now the company is at global scale,

and they've got offices all over the place. But I've seen that work really well for other companies. And I think it'll work all for us. Okay, so talk about my business. more of the structure, you don't separate design, engineering, and manufacturing. It's all in one of the location? Right. Okay. And that's taking place right now across the street. Yeah. So, I mean, you could walk for two minutes that way and you'll hit Base Factory One and you'll see, there's like a little driveway here and you'll see engineers walking back and forth all day long.

And most of them have scooters and golf carts and, you know, things like that. And that's where the product is made. This is where the product is designed. And so it's a walk or a golf cart or a scoot to get back and forth, and just having the ability to go design a part, walk over to the factory, see how the part is being assembled, figure out the failure mode, and fix it, and iterate quickly the people that you see every single day. It's just a massive accelerate and pace of execution. It's funny to me because I've read, you know, a ton about the Robert Barron's, the Industrial Revolution, and I feel like there was a good, I don't know, 50, 70-year chunk in American history. We kind of forgot these things.

But the way you're describing is exactly what, like, Ford used to do. It's what Carnegie did. It's like what all of industry in the United States before was moved out used to do. And it's like we kind of like lost that knowledge. And now it's like coming back. It's like, yeah, guys, it's exactly what they used to do. Why don't we just do it that way too? Totally.

And we have a lot of the Elon companies, Tesla and SpaceX, but also, you know, and a role. We have these companies to thank for training a whole cohort of engineers on how to build hardware products, how to scale manufacturing, how to ramp a supply chain. and we didn't like... I'm glad you brought that up. I was thinking that there was like, could you imagine the deficit that America would have

if Elon didn't exist in this domain? Software would be crushing with this, like, there's one guy. It's the most incredible contribution I think anyone has ever made to humanity is not just the company that he's built but the engineers that he's trained

that have gone on to build other great companies. It's like I said, he's the greatest technologist of all time, in my opinion. It's been a massive advantage being able to hire people that he's trained that have worked with him, that have learned from him,

they bring their best practices here. And then, to be fair, we adapt them, right? Like, we do things in a very base way. We have all kinds of things like base pace and, you know, the turtles and the dashboards and, you know, our North Stars. Let's go into this. And all these things that are core to our culture

that just kind of bubbled up out of the way that our team operates and the way that we solve problems. And many of them are inspired by companies like SpaceX and Tesla, but a lot of them are kind of organic us. Okay, so explain some of these things to do. So look, I think we, from the earliest days, and you can go back and look at some of the artifacts in writing of this, I've been very focused

on a small number of important goals that are very clear and understandable by the whole company. We've been accountable to those goals. Like, we write updates every month on like, what do we do? What do we not do? What are we going to do next month? And we do that. I've written one of these monthly updates now for the last, you know, three and a half years every single month. Never missed a month. Don't plan to. It's a huge. It's just a cathartic for me to sit down and kind of write the whole thing. And I think it's an asset for the company to have this kind of account of, okay, what happened? What's going to happen next month?

They're a great recruiting tool. They're a great fundraising tool. So from the beginning, we started the company with a memo, right? I think you've read it. It's 10 pages, top to bottom, like, what is base power? Why does it exist? What is the problem that we're solving? How are we going to do it?

Where did you get the idea to write that initial memo? I'm just the kind of person that has to write clearly to think clearly. I've always been a writer. I loved writing. I love reading. much like you. And I think maybe some of the memo culture stuff comes from finance and investing and getting your ideas on paper. But I just can't think clearly if I don't write clearly. And so I needed the memo for myself. And so you come in here, you like carry this like little notebook

with you too. Yeah. I've always got my notebooks. I have like two notebooks. I have the red notebook which is like, you know, in the business. And I have my black notebook, which is like on the business. And the red notebook I'm carrying around in the office of meetings. And the black notebook is, you know, for at home. And I'm trying to strategize and wait, explain the different shade in and on. So I think there's a concept of working in the business. And I'm carrying in the the business, working on the business, right? And working in the business is, I'm blocking and tackling and solving problems that are blocking us today. And I'm, you know, trying to figure out personnel problems and product problems and, you know, acute issues that are near-term.

And then working on the business is thinking six months out, 12 months out, and kind of strategic wargaming and, you know, chess playing. I would love to read that notebook, by the way. It might be private if you don't want to. There's some good stuff in there. There's also all kinds of bad stuff in there. I know. That's great. I try to segment out my day with very specific like, okay, when I'm in the office, I'm largely almost always exclusively working in the business. And then, you know, I leave the office basically at 9 p.m. every night. If we're up to me, I'd say longer, but I have a wife who I love and I want to spend time with before she goes to bed. So I'd leave at 9. I go hang out with her until she goes to bed. And then, you know, 10 to 11 or, you know,

9 to 10, I'm with her roughly and she goes to bed. And then I open up the black notebook and I sit and my phone's in another room, my computer's in another room. And I just focus on strategy and what's most important? And, you know, what are we not thinking about? And, you know, sometimes there's very specific things I need to do, which is like, I need to go write, you know, an outline of a memo or of a, of a, you know, a big thing that's happening in the next a couple weeks that I have to figure out, like, a big problem. And sometimes I just sit and I have no idea what I'm going to write about. And I just stare at a page until something pops into my head. And that process has yielded some of the best ideas that have come. And I think by, like,

deliberately allocating time in the day towards working on the business versus in the business. It helps you. And like actually physically having a different notebook that was like a different color. And I open the black notebook. And I'm like, it's time to get creative. Like that. And I'm not in the office. I'm like at home. It's after hours. And that just has really really helped me that segmentation of when to work in the business and I want to work on the business. Do you think there's something special about it being analog that you're actually writing with pen to paper? For sure. I've tried to move to computer and all the good ideas go away. I mean, not entirely. Right. And like what happens is Now, I wake up pretty early in the mornings, and 6 to 8 a.m. is kind of my most productive time.

But that, I'm in the morning. I'm kind of like doing the work that I assigned myself the night before. So I'm like, okay, I got to solve this, I solve that. And then I open the computer and that's all on the computer. And then I'm like actually executing. But there's like this special, you know, 30 to 60 minutes in the evening with a pen and a paper and no distractions. I can't get a notification. I can't get a call. Like, I'm just focused. And I really enjoy that. And I'm sure some people have the capacity to focus using digital tools, but like the analog is really clarifying and focusing for me. Deal is how the best founders turn the world into their talent pool. I've been studying how history's greatest founders operate for a decade.

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Okay, so go back to this idea of North Star. This is a handful of simple ideas that you're, getting the entire company to focus on? How do you describe this? It's three things that we must accomplish this year to stay on path towards our mission. So it's become the largest distributed battery fleet in the world.

The fastest growing battery fleet in the world, land the batteries at the lowest land at cost because it costs everything in a commodity business. What does land mean? It's all cost. It gets the batteries on the grid on a per kilowatt hour basis, cheaper than anyone.

And how do you affect the price of that? How do you actually do that? The bill of the hardware, the installation cost, the customer acquisition costs, all the overhead and the operations skid the battery there. Okay. So it's fastest growing battery fleet, lowest cost megawatts, basically, and then financial sustainability, which is basically profitability of unit economics, right?

Those are the three things. And those are the three North Stars. And if you walk in the office, in the middle of the office by the stairs, there's a poster, beautiful, it's well designed by our design team on purpose, but it only has the three North stars. is in the middle of the factory. And everyone walked by it every single day. And at the beginning of the year, I stand on email the team,

and I said, look, these are our three North Stars. If we get these three things done, these three things done, this year, we're going to be on track towards our mission. And so people know, okay, if we want to achieve this mission, these are the three things we have to get done. And then there are goals that come downstream of the North Stars that are kind of specific things that we have to accomplish

to hit the North Star. And so everything we're doing internally is focused on those North Star. So we have these very specific North Stars. We have these monthly updates that organize team, and then we're just maniacally focused on on blocking whatever is on critical path towards achieving those North Stars, which keep us in track for that mission. So I mentioned the turtle. So the turtle is this device that we use, and there's devices, right?

There's like tools. Turtles is a tool, the metrics and dashboards are a tool. We'll talk about both of them. And the updates are a tool, the writing and the kind of organizing thoughts. So the turtle is a literal physical turtle. Now there's actually a couple of them that goes on the desk of the person that is on critical path. that turtle can only be moved when critical path is resolved. So with turtle comes a thing called a hot potato.

And a hot potato is like a squad, basically, that spins up around a problem. So we have a problem in the business. There's a part of the supply chain that, you know, there's a part that we can't get at volume. And so there's a turtle on the desk of the head of the supply chain. And there's a team of people that are all working on solving that problem. And there's a meeting every single day. And there's an email that goes out every week to the entire company, to updates at basepowercom. that was a hot potato update.

And it's like, hey, this is the constraint in the business right now. This is what we're doing to resolve the constraint. These are the next steps to get the thing resolved. And then when the hot potato is resolved, there's an email it goes out and says, hot potato resolved, it's done. And then those people go back to their normal course of business.

And it's not like they're in a meeting every single day forever. They're in a meeting until the job gets done, right? And the turtle physically, and it's like a funny, silly thing. It's like, now there's like a plush turtle, there's like all kinds of turtles around the office. And there's like a little version of this

where you like need to unblock. And it's this concept of like, take your work really seriously but don't get yourself that seriously. We have freaking turtle stuffed animals all over the place and little inside jokes like this, but they're really motivating for people. And people take pride in having the turtle because it's like,

it's my job now to unblock the business and to move the business forward. So we talk about, you know, that's the tool, right? You know, every company uses metrics and dashboards, but I think we do it in a really thoughtful way. So if you walk around the office, what you have, it looks like a Best Buy. There's TVs popping out everywhere.

And every TV has metrics that matter to the company on those TVs, good ones in green, bad ones in red, and we joke that every team at the company, as you noted, we all sit in kind of bullpen seating, open floor plan. Every team of the company has TVs that literally hang over their head with the metrics that matter to that team. Good ones in greed, bad ones in red, and so you show up every day and you know things are good or things are bad, right? Because the TVs are telling you so, right? And those metrics are really focused and specific. And if they're not high signal, the leaders of the company, their job, and everyone at the company, their job is

point out and be like, hey, that's a bad dashboard. Like, that dashboard isn't telling it something useful. That's guiding us towards the wrong thing. Right? So if you measure something that's not useful, you're going to end up going off in directions that are not actually moving you forward. And so the metrics have to be super specific. They have to be oriented towards the North Stars, and they have to be very visible and readable. And that's been a powerful tool to get everyone focused on the right things and then onboarding quickly. Because if you just join the company and you don't know about the North Stars and you're just learning about them for the first time and you're not, you're like still kind of wrapping your head around, you know, our mission,

and strategy, these metrics that point you to very specific things for your team really help you get focused quickly. And then over the time of the, over your time of the company, you get steeped in our mission, our vision, our strategy. And I've told you about, you know, there's a presentation I give every quarter called Engine of Success, which I'm actually giving tomorrow. I'm really excited for it, which explains our formula for winning, right? It's like, how do we win? It's our super top secret, you know, like, this is our formula for success. This is how we beat the competition. and it's a lecture effectively that I give to the whole company, and it's really designed for the new cohort of people that joined in that quarter

because I want everyone from the interns to the most senior people to understand, like, how are we going to do this thing? What's the plan? Right? I think a lot of companies, when you join them at our scale, 500 people and growing really fast, they're like, hey, here's your desk, here's your computer, you're working on this very small part of the thing, like, good luck and do a good job. I really care, Justin and I really care that the leadership team here,

we all really care about everyone understanding why we're here, what we're after, and how we're going to do it. Because we want people to come up with all kinds of good ideas on things that are not necessarily directly in their scope because we want to hear them. Good ideas can come from everywhere. And then you have more context on the specific thing

that you're working on and how it impacts the broader business. And so we teach these things, and it's really my job. And I'm kind of like a coach and a teacher to the company in a lot of ways. It's a big part of my job. It's like writing these monthly updates,

giving these quarterly presentations, really clearly explaining these North making them the right North Stars, putting them on a poster, making sure all the metrics are right, guiding us in the right direction, that working on the business, so that people working in the business, which I also work in the business every day,

and I love doing that, can make sure they're working on the right things. Yeah, I've heard you describe your role, you view your role as like a player coach. Can you say more about that? Yeah, so I think the coach side is the working on the business, and also there's a personal element to running company, which is, man, we are grinding.

Like, it is hard. Like, this group hustles. I think you've seen that working with the team and meeting the team. And I mean, it is busy here at 9 p.m. It is busy here on Saturdays. And it's stressful. And so there's a lot of, you know, helping the team and the people, the humans, do the best work of their career. And that's a lot of the coach side and working with them and trying to, you know, I studied psychology in college,

which definitely doesn't make me an expert, but, like, you know, I've read all kinds of behavioral psychology books. And it's a topic that I really enjoy learning about. And I love helping people become the best version of themselves. And then, of course, guiding the company towards the right North Stars, the right metrics, the right quarterly goals, focusing on the right things. That's really the coach side. And the player side is, I also want to be a world-class I-see. And there are things that I can do day-to-day in the business to unblock the company to help go put points on the board, you know, to use a sports analogy. I'm a big basketball player.

Like, when the game's on the line and the team needs a bucket, they can give me the ball and I can go score. right? And I can also guard the best player on the opposing team. And I also know if I'm double-teamed, who to pass it to. Right? And it's like, you've got to be able to draw up the play and help, you know, motivate your teammate when he misses a big shot. And also if your team needs a bucket, like, you got to go get a bucket. I interrupted you earlier. You were saying some insights you drew about entrepreneurship from starting out and investing. What were you going to say about that? I mean, I think investing, maybe this was just my perspective of it, is the art of studying good businesses. What makes a good business and what makes a bad business? And how do you predict which ones are going to be good and which ones are going to be bad? I'm quite competitive and quantitative.

And I'm, like, interested in things like accounting and capital allocation and capital markets. You'd be shocked at how many of the robber barons started out of accounting, you know? I mean, it's the language of business, right? You have to be steeped in it to understand what makes a business tick and what makes a healthy business and an unhealthy business.

And so, and there's a lot of, also, the study of people, too, back to the psychology point, And I think this is one of the things that makes Josh our mutual friend and who I used to work for at Thrive world-class at his job is he's just an incredible identifier of talent. And he's really good at understanding who's going to be a good CEO and not, and what's a good leadership team and not. And so my interest in and passion for investing

was largely driven by, this is a place where I can pick up a lot of skills to become a great entrepreneur. I can learn accounting. I can learn capital allocation. I can learn what made great leadership teams. And I still love thinking about businesses. and thinking about investing primarily as a means to the end of learning how to be a great entrepreneur.

Like, the companies I want to invest in are the ones run by entrepreneurs that I want to emulate and I want to learn from. Tell me some of the entrepreneurs you want to emulate. That's interesting. I mean, my dad's at the top of the list. But I really admire Patrick Collison and John as well, but the Collison brothers,

I think the way that they've run that business is really impressive. The culture that they've built, the pace of execution, and the way that they've continued to kind of evolve the company over time has gotten bigger. Obviously, they started serving startups, now they're serving enterprises. They're doing a lot of interesting things with kind of emerging technologies like stable coins.

I really admire Eric and Kareem at Ramp, who obviously are close friends of yours as well. And the way that they have built an incredible talent magnet in a category that on the surface is maybe not all that's sexy. And then they've turned that category into something really sexy. And they've built an incredible suite of products and tools for companies that are incredibly useful in an area where you, wouldn't have otherwise thought that that was possible, or at least I wouldn't have. And they're just great operators. They're incredibly customer obsessed. They're really focused on the product.

And they want to drive outcomes for their customers. Kind of back to the point of like you care about affordability, reliability. They care about saving you time and money. That's all they care about. Right. And that's why they're able to differentiate in that space. And so those are two different companies. You wouldn't think that's a company like Ramp could build a great brand in, you know,

what many people consider like an unsexy category. I feel you base is actually, it's the only brand, in power that I can even think of. We talk about building the first beloved brand and energy all the time. And you know, if you think about just consumer products, like I think there's another thing,

like studying businesses, being an investor, and the value of that and the path to being an entrepreneur, I think that brands are one of the most underrated moats in business, right? Coca-Cola and Nike, you know, these brands are so, it's hard to put a dollar amount on how valuable they are. You've read zero to one, I assume.

Of course. I think I just read it for the fourth time. I just did another episode of founders on it. And he was talking about all the ways to build a creative monopoly. And in that book, it's the funny thing, he's like, well, brands won. He goes, I just don't understand it. To your point. It's so valuable.

And there really aren't any beloved brands and energy, which makes the opportunity even bigger because it's counterpositioned. It's unique, right? And so if you're able to do a thing that no one has ever done in your space, you stand out. Right. And so being able to build a beloved brand in this category has become a huge advantage for us. Are there any other entrepreneurs that you emulate or you study? I mean, obviously you mentioned Elon a few times. Yeah, I mean, Elon is obviously one of the greatest of all time.

And I think I've more so learned from the people that I've worked with that have come from his companies and the way that they operate than Elon himself. What have you learned from the people that worked for them? Mostly this maniacal focus on critical path and resolving constraints. And I've also learned a lot of this from Antonio Gracese, who's on my board and has worked fairly closely with Elon for decades. the first year or two of working with Antonio, basically every conversation I had with him,

it still to the day, this is the main focus of all of our conversations, every conversation was the same. Hey, Antonio, how's it going? Good, how are you? What's up? Zach, what's your constraint? Like, what's the constraint of the business? And I'll just answer the question,

and that's all we can talk about. That's it. What's the constraint? What's the constraint? What's the constraint? Like, if we agree on the mission, the vision, the strategy, okay, we're good there. What's constraining us? to get to that. Let's just focus all over time and energy on that.

And that kind of flows into all of the little things in process and kind of how people operate that show up kind of in the day-to-day with the metrics and the dashboards and the hot potatoes and the turtles. All that is is just trying to get to what is constraining our business and how do we resolve those constraints that are on the critical path on the way towards our mission? There's a weird idea here. I've said it a few times on the other podcast, but I'll just say it here. It's like I'm obsessed with things that last for a very long time.

And so I looked at it's like, okay, what human-made things last long is. It's just like, well, countries last longer than companies. Like, companies can last a long time, but countries last longer in countries. What lasts longer in countries? And it's just like, well, is there anything human-made that last longer than religions? And I actually think there's like a lot companies can learn by studying religion. And just a few of these ideas, there's like, well, first you mentioned earlier. Like, whether it's an intern or the CEO, I want everybody to have a shared base of knowledge.

Religions do this excellent. They usually, it's a book. We all agree on it. We all own it. We read one week and we meet together next week. It's like, oh, no, we're done with that book. No, we go back to that book over and over and over again. We had the same conversation over and over again.

We find places to gather with like-minded people, just people that believe the same things we do in regular intervals. Even if they believe different things, religions have like these parallels or these similarities that I think companies should use. So I love this idea that this is what pops my mind when you're talking about, hey, I'm on the phone with this guy all the time. over two years and it's just the same conversation over and over again. Explain why that's valuable,

though. Because it's focusing and it just forces you. It's kind of the uncomfortable thing. It's like we don't want to talk about like all these fun strategic things and all these bets we can. it's like what is constraining us towards our mission? Let's just focus on that. It's incredibly clarifying and it's uncomfortable at first. But over time it becomes very comfortable. Wait, why would it be uncomfortable at first? Because the natural tendency is to talk about all the different things that are going on and all the different opportunities. available to you. And the hard thing is to focus and just focus on the most important thing that is the constraint in between you and your goal. It's kind of like a cope, if you will,

to talk about the other stuff because it's like, oh, yes, there's this constraint, but like there's all this other stuff going on. It's like, no, no, no, focus on the constraint. I think my co-founder Justin is very, very good at this. Like, Justin and I, every Sunday, you know, our one-on-ons are on Sundays, and we have these kind of strategy conversations on Sundays. And we don't ever talk what's going well. Like, you know, we've got a lot of work to do, but I think could largely say the last three years have gone like reasonably well, you would never know it by by tuning into the conversations that Justin and I have on Sundays because there's no benefit to that. Like that's in the past. We're only looking forward. What problems can we solve? What things are we worried about? What constraints

can we relieve? That is really the only thing that matters and all the other stuff is kind of just noise. Yeah, Munger and Buffett have a great line on this. They're like, tell me the bad news because the good news takes care of itself. Exactly. Is there anything else that you think is beneficial to these conversations? Like how many times, whether you're talking to a board member, your co-founder, how many times are you, is it just helpful to organize your thoughts to somebody else? Like, do you know, Charlie Munger has this thing called the Rangetang theory? Have you ever heard of this?

No. Okay. So he says that an intelligent person could sit down and they can have a one-sided conversation with the Rangentang for 30 minutes where every case is, right? Get up, leave. Rangentang obviously says nothing. and the person that had that one side of conversation actually benefits. Just being able to

organize your thoughts out loud. This is the notebook, right? This is the notebook, right? This is the monthly updates. This is like, write clearly to think clearly. It's like and my team, you know, when I have a good idea, like I write it down first and I put it in front of it. I'm like, hey, I wrote this thing. What do you think? And it's like, oh, I just screwed this, I just screwed that. And we debate the writing, right? And it's like,

that's why every night I sit down with this notebook and I stare at it and I kind of forced myself to write stuff because it just allows you to gather your thoughts. And then, you know, I chew things over with Justin. I chew things over with Jared, with Dana, with Cole, with Dino, with Zina with my dad, with my, with Lee, with Antonio, with, you know, other friends that, you know, like Zach and, you know, other people who are, you know, around the business have a lot of context, have a little bit of context, have expertise on the topic. And I think writing, I mean, how many times have you gotten just like a document from me? It's like, what do you think about this, right? Like, that's just my way of communicating ideas.

And that is how I get my thoughts out of my head is to write. I came across this other thing the other day. It's called like rubber duck programming, where a programmer would sit there. They'd have like kind of like your turtle thing. It's like the rubber duck is sitting here. And I'm explaining the code I wrote and why I did it this way to the rubber duck and just hearing me put, it's like saying it out loud.

It's like very helpful clarifying thoughts. I do so all the time because obviously my other podcast is a solo podcast. And I'll sit down to record. and I'll be thinking, oh, I understand why this guy did this or what happened here. And then I hear myself talking, like, I don't actually understand this. I have to fucking sit with it for a little bit longer. Like, it's fascinating how helpful just having, like, even a soundboard that doesn't speak back is for your thoughts. And we were talking about the cap table on our investors and, you know, most of, not all of my major investors.

And this is, I mean, I'm constantly sending them things that I write and calling them in early hours and morning and, you know, late hours of the evening. I'm just trying to brainstorm and just kind of change. and just kind of chew on things with them. And it's incredibly... Who do you think it's been the most helpful out of any of your investors? I mean, honestly, our mutual friend, Zach... We can't say his last name.

We can't say his last name. Who is not even one of our major investors, but it's just like a very close personal friend and is a base investor is one of the best business strategists I've ever met. I think probably the best investor of our generation, one of the best company builders of our generation.

But he doesn't consider himself an investor. I'm seeing him later on today, But I got to tell you a story about this. So, yeah, go ahead. A friend of mine was having an issue. He's got two companies. He couldn't figure out, should I sell one? Should I focus on another?

And I had my own opinions on this. Obviously, fucking focus on one thing. And I just arranged for them to sit down. Very predictable case by you. Exactly. And I arranged for them to sit down 10 minutes later. It took all 10 minutes of our mutual friend identifying exactly what's wrong. And then the guy I connected with text me.

He got to the heart of issue right away. I was like, yeah, that's why he's so fucking good. He just is a brilliant business strategist and an operator and has seen a lot. And he listens really well. I think he's very patient and thoughtful. And he's been incredibly helpful. My dad is near the top of the list. Well, we talked about this when we were on the phone yesterday because I was supposed to see him last night.

And I was like, dude, I got to get some sleep. None of the conversations with him is going to be five minutes. If you're his friend, it's going to be like three hours. And it's going to be incredible. And you're not going to be able to sleep. I was like, I got to give a five next day. I'll see you tomorrow. Totally.

Yeah. And so I'm very. I'm very lucky to have a lot of people, you know, like Josh, who I worked with for a couple years and is obviously a major-based investor. Brad Gershner is a great thought partner and is someone I call all the time with crazy ideas. Lee Fixel, his firm addition is our largest investor. Antonio and his partner, John Shulkin, are super helpful in this regard.

But if you had to only pick one. I mean, it's my dad. It's the truth. There you go. Yeah. Okay. Well, he knows me better than anyone. He's known me longer than anyone, except my twin sister, technically.

I was talking to him yesterday. And one thing that we said, it was just like, like, I, one thing I respect about you is like, you're just, your effusive praise and admiration for him. You know, it was really cool. But I was like, listen, Zach thinks that he loves you. And I go, Zach doesn't know what love is until he has this, he holds his first child in his hands. And your dad laugh. He's like, it's absolutely right.

Like, the way you feel about him, I promise you, it's a thing. Love flows down the generations of humanity. Like, he feels that way a thousand times more about you. And you'll understand. you'll fucking appreciate him even more. Hopefully, maybe later on tonight, you start working on the baby. But whenever that happens,

say nine months and one day from now, when you're like, fuck, David was right about this. And then you're going to appreciate your dad even more, which will blow your mind. I'm looking forward to that for you. I'm so excited to have kids. I'm one of four,

and I have an incredibly close relationship with both of my parents. And my mom, I mean, if you think my dad is competitive, my mom is on a whole other level. I saw the picture in your dad's office. Your mom's a beast, like an athlete. She's an incredible athlete.

She's a world-class endurance athlete. She's done the Iron Man World Championships. Didn't she do some crazy shit for your birthdays? Whereas like every birthday, she's like, I'm going to ride like 100 miles plus your age or something? She every year would ride 100 miles plus our age for all four kids. Not because we asked her to, but because she wanted a challenge. And she wanted to kind of commemorate the birth giving, if you will. And she's just an intense person with an unbelievable amount of love and affection and care,

an amazing mom, an amazing wife to him. I think, you know, he constantly talked about how, you know, she used to seek it weapon. And it's really true. And she's the, she is the engine of the family and the kind of cornerstone. We're definitely a matriarchal family that kind of revolves around her in the best way. I'm just so lucky to call her my mom and to get to learn from her. And I continue to be inspired by her every day. I mean, she's a force of nature.

I'm going to switch gears real fast because I saw a factory tour of years. What is this cube? Can you explain? Like, the evolution, I saw the, I went through all your company updates, and I saw the evolution of what you guys were installing, how you were making batteries, the lessons that you were learning. And now this is kind of like the next generation, your latest product. Can you explain, like, all the learnings that went into and why it looks the way it does? Yeah, the core. So it's called the base core. I'm sorry, the core. It's called the base core. That's okay. It looks like a cube. All right. My bad. It looks like a cube. It's called the base core. And it is our custom built battery. And it is the output of the last three years of learning how to install, operate, and manage tens of thousands of distributed home batteries. It's completely designed by us from the ground up.

It's manufactured over there across the street, a supply chain that we entirely control and manage. And it's purpose built for the use case. It's lower landed cost bill of materials. It installs much faster. It switches over much cleaner. It has more power output, more energy duration. and it's really designed to be a grid resource, and it is the kind of embodiment of our strategy.

We talk about mission and vision strategy. Strategy of compounding cost advantage of vertical integration and technology. This is the vertical integration and technology coming to life. And so now our business goes from good economics installing off-the-shelf hardware to incredible economics with his vertically integrated cost structure and a product that we can scale at an order of magnitude greater than the previous product because we were tapping out our existing supplier. We were buying all their stuff, and they couldn't make batteries.

I mean, we're sold out through November, and it's August, right? So we cannot meet the demand with the supply chain that is just today. We have to do it ourselves, right? And so we're building factory one, we're building factory two. We're bringing on module lines and invertebral lines as fast as we can to meet the demand. The only way to do that is with vertical generation, and the base core is the embodiment of that strategy. Explain why, though.

Because when you rely on suppliers, you're kind of at the whim of their execution. And when you do it yourself, you control it. You control your own execution. And you can kind of rise to the occasion to meet the demand. And you can invest the CAPEX to, you have the conviction. If I go to the supplier and I say, we're going to be the fastest growing energy company of all time. Three years ago, if I said, we're going to be faster growing energy company of all time. We're going to install tens of thousands of batteries in the next three years.

And then hundreds of thousands of batteries of the next five years. And we need you to go invest hundreds of millions of CAPX to build a manufacturing capacity to meet our demand. They're not going to do it. They're going to be like, get out of here, kid. Like, what are you talking about? like, send me the PL and then we'll talk. And so we got to do it ourselves. We have to put up the CAPEX.

We have to build the execution capabilities and expertise to actually go do that stuff. And then when you do it, you have a better cost structure because that OEM that you were buying from no longer collects a margin, that's your margin to keep. And you have more control over the scalability.

And you can go make those kinds of forward investments to, you know, bet on future growth. How deep can you take this vertical integration? Like when you were just speaking, again, I had this like, you know this through our conversation. I'm not really thinking about Zach and base. I'm thinking about, like, oh, this reminds me of Henry Ford took

of interregation way further than you could even think that somebody's manufacturing cars. To the point, he bought his own railroad because he was annoyed at he couldn't get his raw materials, like fast enough. He was like, I can actually run a railroad better than you guys, and I will prove it. He wound up running it, optimizing, and then I think he sold it for like a $30 million profit, too.

So how far can you take this? So there's a lot to say here. I mean, we could take it. We could go buy a lithium mine and start refining lithium and, you know, make our own cells. All the way down to mining? Sure, you could, right? Call Travis.

Call Travis. We could do that, but I think it's how far do we want to take in and win, right? And over time, you know, there's kind of like diminishing, but not to zero, maybe plateauing or asymptotting returns to a certain level of vertical integration. And then once you reach a certain scale, it makes sense to vertically integrate further and then further and then further. And based on our current scale, we like the position of final assembly, test, and pack. We design everything. The fabrication is like.

largely done by third parties, our suppliers. We get all the parts, we stick everything together, and we test it, and we pack it, and then we go install it, own it, and operate it. Over time, we could reach a scale where you get economies of scale, and you get benefits, basically, that outweigh the cost of making the cell,

refining lithium, mining lithium, etc. That has to excite you, though. To tell you had excise me, of course. The way you are. Of course, but this is a multi-decade, 50-year journey that we're on, and in year three, it doesn't make sense

for me to spend any of my energy and brain power thinking about making cells. Right? In year 30, it almost certainly will. Okay, do you think

you're going to get to year 30? And I don't mean that the company's not going to be successful. I love your fucking competitive nature. Of course. No, what I mean about this, like, there's something, there's no other word that I have for this

is just fucking perverted in the entrepreneurship ecosystem. I hate to just even an entrepreneur like industrial complex. It's like that's run largely by investors, which I fucking can't stand, which is start, scale, sell.

And I'm like, no. Like, then what are you going to do? Like, your extra strategy should be death. So I've had two founders on recently where we talked about this. Like,

you know Scott Wu. Yeah. Like, he's, they're throwing billions at this kid. Billions. And he's saying no so far. And I hope he holds on.

But his whole thing, and I think he will because he's already rich. And I believe, and he's super, super competitive. And then I just had Torson, real, it was the founder of Helsing, who it has,

It's not out yet, but he's just like, he's, I think, started the conversation because his whole thing is like, Europe needs its own way to defend itself. This is not a fucking business. This is a mission. He goes, we're not selling this for any amount of money. What's your opinion on this? Look, you said it. What are you solving for it? Are you solving for a paycheck? I think you could probably guess based on where I come from that I'm not solving for a paycheck, right? And the way I talk about the business and the way we act and the way the business is run. We're here to achieve a mission. That mission is kind of never ending, right? Human prospect. energy, abundance, affordable, reliable power. Whenever, like, well, we did it. Like, we did the affordable, reliable power thing.

Like, what's next, right? Like, that will, that is a mission that will live on forever. Probably outlive the company, outlive me. Hopefully, the company outlives me, and then the mission will go on forever. And eventually, you know, either, you know, the, something will take out the earth that will kill the company, right?

This company's going to last to the end of the universe. That's the plan, right? And like, and so... Your dad has a great line about this when he was fighting Carl Icon. And like, why don't you just start another company? He's like, I'll care about this company after I'm dead.

Well, you asked me, like, what would it require for your dad to stop working on Dell? And I told you that you'd have to kill it. Yeah. Right? And so it's about the mission. It's about, like, I get to... It's the honor of a lifetime,

of a fucking lifetime, blessing of a lifetime, to get to come, wake up every day and get to work on this mission with this group of people and come into this building. And, you know, when I'm not here, I'm like, wanting to be here, right?

I'm wanting to think about it. And like, I'm, you know, I'm constantly obsessing over moving this mission forward. And that will never change. And your point on a vertical integration, like, year 3, you're 30, year 50, like the problems ahead of us or the opportunities that we can go after that will move us closer to that mission will change, right? They'll look more capital intense. They'll look like, you know, vertical integration or, you know, going deep, going wide. Like, that'll all change, but it's all about the mission and always will be. And the reason why, you know, we're focused on other things right now,

other than making cells and refining lithium and mining lithium, is because there's a bunch of other opportunities across the stack that we want to go chase that are all aligned with the mission. At a very high level, energy is four things. Make, move, store, and sell. Right? You have to make it, generation. You have to move it, transmission and distribution.

So you have to generate electricity. You have to move it to where it's made. Store, battery storage. You have to store it because it's not always, used when it's made, right? You have to move it because it's not used where it's made, because it's a store it's not used when it's made, and then you have to sell it. Make Move, store, and Stell, generation, transmission, distribution, storage, and retail energy, and all the things around, you know, the software and all things around selling energy. We started with

store and sell because we thought that was the best place in terms of scale and return on capital to enter the market. But we have ambitions across make, move, store, and sell. Because if we are oriented around the mission, which is affordable and reliable electricity, and electricity is four things. If you want to have the biggest impact on the mission, you've got to do all four things, right? So rather than deeply vertically integrate in your three on store,

I'd rather go build great solutions to drive down costs and drive up reliability in the industry in make, move, and sell. And then over time, as opportunities present themselves to get better at make, move store, and sell, we'll do that,

whether that means refining and mining lithium or not. And then there's this new kind of interesting angle where we take that stack that we've developed and make the store and sell stack, and we point it at the largest and fastest growing energy consumer in the world, which is AI, which we talk about at the beginning of the conversation. Okay, so this is your last company.

Absolutely. Okay. Since you're going to be doing this for the rest of your life, I'm going to be doing what I'm doing for the rest of my life. I'd love if you come on every, like, six months, whatever you want. We'll have more conversations, and then over time, in the next few decades, we'll have, like, an ongoing live history of base.

I love that. I mean, I love every conversation with you. You always push me to think bigger. push harder, really analyze why I'm doing things, draw comparisons to other entrepreneurs throughout history. And I always learned something in our conversation. So I'd love that. Thanks for making the time, man. Appreciate it. Awesome. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review and make sure you listen to my other podcast founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest

entrepreneurs searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through founders.