This Week in Startups - Molly’s first 6 months as an investor (VC School), + EV battery recycling | E1504

Episode Date: July 10, 2022

For today's VC Sunday School, Jason asks Molly what she's learned in her first six months as a venture capitalist (1:59). Then, on This Week in Climate Startups, Molly speaks with siblings Steven and Zora Chung of ReJoule about EV battery recycling (18:52). (0:00) Jason and Molly intro the show (1:59) VCSS: Molly’s first 6 months as an investor recap (14:06) Bubbles - Get your point across with unlimited screen and video recordings for free at https://usebubbles.com/twist (15:24) Toss to TWiCS (18:52) TWiCS: Zora and Steven Chung, co-founders of ReJoule (22:51) Brave - Download Brave today at http://brave.com/twist to browse faster, search privately and so much more (24:08) Explaining the ReJoule technology like we’re 10 (30:03) iTrust Capital - Visit https://itrust.capital/twist to create your Crypto IRA today (31:06) What’s ReJoule’s business model? (44:18) Outro + Plugs

Hey, everybody, hey everybody. It's a big Sunday show for you today. It is. We do not take the weekends off. No way. No days off. Yep. Except Saturday.

We're doing, you know, we're doing what we do. We're doing VC Sunday school. We got this weekend climate startups. We're doing it all. Yeah. And this is your six month anniversary here. Congratulations on making it to six months at this weekend startups. And as an investor at the syndicate.com slash climate,

we're going to go over everything you learned in the last six months and everything we talked about. And then look at your next six months. going forward what you hope to achieve as a year one VC. And the audience gets to learn with you. If you've ever thought about becoming a VC, Molly's first year is your roadmap. Absolutely. And then we have another awesome edition of this week in climate startups. I sat down with Zora Chung and Stephen Chung from Rejewel, a startup that has developed technology

to evaluate battery health and help create a used car market for EVs. It's going to be a great show. Stick with us. This week in startups is brought to you by Bubbles. Guess what? You don't have to be in back-to-back calls all day or get continually pulled into quick sinks. By using Bubbles async collaboration tool, you can remove a minimum of two meetings a week from your schedule. Get your point across with unlimited screen and video recordings for free at usebubbles.com slash twist.

Brave Brave is an internet privacy company on a mission to protect your personal information. online. Download Brave today at brave.com slash twist to browse faster, search privately, and so much more, all in a single click. And, I trust capital. Did you know that you can invest in crypto through your retirement account and still get the same tax advantages as a traditional IRA? Visititrust.competal slash twist to start investing today. It's time for VC Sunday school. We are going to recap Molly's first six months as an investor.

All the things that Molly learned and anything stand out for you, Molly, that have been like the highlights of these discussions. I mean, you know, I've said this on the show before, but I've just basically opened up my brain and a fire hose of information is coming in. And it's such a, I think for me, what has been so noticeable is the way that like some of the skills are really similar, right? It's interrogation. It's pushing for understanding.

It's being like, wait, okay, can you back up and say that in a way that my mom would understand as if I were going to write a story about it? But, you know, so that I can actually understand it as an investor. But thinking about things in a pure math way is not only more sort of like specific of a skill than I ever would have expected, but also kind of awesome. It's like super freeing and interesting to be like, well, actually, math says this. Well, you know, it's interesting too because I think you and I both came from journalism and we have to, we understand storytelling. We have to deconstruct those stories and then say, hey, does this story check out? Will this actually work when it hits the real world? Customers, competitors, et cetera.

And so I think that's the part that journalists have to add to their skill set. I certainly had to add it. And a lot of times it's even this morning, we were, you know, seven, eight in the morning going back and forth on our Slack, debating a specific company saying, hey, what's the capx on this? and what will the margins look like? What does a competitive set look like? And it's been just wonderful to watch you learn. And it's like watching somebody learn a complex skill like skiing, golfing, or poker. And so watching you learn, and I think the audience has gotten to benefit from this.

I think it's really inspiring for people that it's a hard skill to learn. But if you just do it consistently every day for six months, all of a sudden you're good at it. And just watching the conversations and the questions you ask and then your responses to the questions I ask or other people on the team ask. Like, I think you're 85% of the way there. I literally think you got to 85% proficiency in six months. Now, I think you came in with 40% proficiency because of your background. At best, yes.

No, I mean, understanding storytelling and being able to ask questions, that started you on second base. But I think you're on third base now. And I think, like, the next six months is going to be you really dialing in, hey, I built this mental framework. I did the math. I made my own little model here on the back of the envelope. Here's where I think this is going to face challenges, but here's why I think it could work, right?

And that's the, should I call this hand or should I raise or should I fold? That decision making at the final instance, that's the piece that you're going to nail on the second half, I think, of this year. And it's just amazing to me, just getting to mentor you in this small way has been, it's wonderful for me because it clarifies my thinking. Well, I'm glad because it's wonderful for me because it's such a hands-on education. And it's so specific. and what I think I really like about this. And, you know, I knew that there were mechanics of calculating valuation and understanding Tam. And of course, like, there are textbooks about it and I read the books and I understand that there are mechanics.

What I think I didn't understand is that you can build such a specific mental model and put so many things. And I love a filter and you can put through it so many things. And then I will say the other learning and the thing I didn't expect is how much I would love founders. as a class of human. Say more. Say more. What do you love about founders? Because that is what I tell people,

the non-financial reason I do this is because I get to hang out with the most awesome group of people in the world, founders. What is it that you've learned to love and appreciate it? The sheer hopefulness and work ethic and kind of like, you know, I've been saying for, I don't know, a decade or two

that every child is hope. I have this sort of like offhanded phrase. Like people are like, I don't know if I want to, you know, bring a kid into this or whatever. Oh, yeah. I had that conversation yesterday with a couple. Oh, you bring a kid into the world. It's so f*** up. And I'm like, you know what?

Every child is hope. You never know which of them is going. So I've been saying this in this really offhanded way. Like every child is hope and you never know which one of them is going to be the one to find a solution or make the change. Every freaking founder is hope. Yes. Yes. And then getting to interact with them is completely inspiring because you see how much they are willing to put on the line.

for an idea, for a concept, for their team. It might just be like so tiny. They've got their friends and family literally invested in their success. Like they want to succeed more than anything. That is so inspiring and incredible to watch. And then also to find myself in a position to occasionally be of any use, like to be helpful to them, is an actual honor. Yeah. It's absolutely fantastic.

I think you summarized it great. You know, if you think about our previous careers as journalism, we do that in the first half of the day here, random acts of journalism and commentary. you know, you have to come out everything with a certain level of cynicism and questioning, right? That's kind of built into the job. Okay, I'm probably getting snowed. I'm trying to find the truth here. So I love that about the job, the detective work of being a journalist. But let's face it, a lot of it has maybe gotten a little too cynical and, you know, the nature of journalism in terms of having to get clicks.

And it's been a little perverted, I think everybody would agree, especially people who are in journalism would agree. And then you and I as lifers would understand this implicitly. Who got the best jobs, who moved up the ranks. It was the people who got the most clicks, who got the most views, including the two of us, right? So we understand there's a limitation there. But then all of a sudden you're on the other side of table and you're like, okay, I could criticize these founders. And certainly, you know, there are some who are just outright criminals, frauds, charlatans, insane people, of course. Or who don't want to do the work, right?

Or do you see the ones who don't want to lazy and entitled. comes across to. And so it's super interesting to like be getting, be able to start to pick those out. Oh, yes. Yeah. The Lazy and Title group is underreported on. You know, and so then you start thinking about it. It's like we get to spend our day if you look at the best of founders, you know, the top third or whatever it is, top half, top 25%. I'm not, I don't know what percentage it is as human beings. But they really want to build something in the world. And just the act of building, as opposed to critiquing, which is what critics do, right?

I always think about that Anton Ego speech from Ratatouille. It's one of the most important moments, you know, or speeches in my entire life that I ever heard. And, you know, I'll pull it up here and I'll read it to you. So if somebody can just pull it up, one of the producers, I'll read it. This is one of the most important things,

I think people who are in a position of power to critique people, people who have the audience, people who have the pen, need to remember that the life of a critic, You know, they get to lord over people. They get to have this position of authority. Okay. Criticism is valid.

We all like to read some criticism here and there. It's helpful to the world. It's entertaining, all that. But the world needs more people to try to solve problems. And what a critic can do in their best instance, I think, is to make a little space for these imperfect, young, you know, even just the ideas being young, the products being young. It's so important. And so that's, I think, part of our jobs.

And I'll just read it to you. In many ways, the work of a critic is easy. We risk very little, yet enjoy a position over those who offer up their work and their selves to our judgment. We thrive on negative criticism, which is fun to write and to read. But the bitter truth is we critics must face. The bitter truth we critics must face is that in the grand scheme of things, the average piece of junk, it's probably more meaningful than our criticism designating it so.

But there are times when a critic truly risk something, and that is in the discovery and the defense of the new. The world is often unkind to new talent, new creations. The new needs friends. Last night, I experienced something new, an extraordinary meal from a singularly unexpected source. To say that both the meal and its maker have challenged my preconceptions about fine cooking is a gross understatement.

They have rocked me to my core. In the past, I have made no secret of my disdain for chef Gusto's famous mom. motto anyone can cook. But I realize only now do I truly understand what he meant. Not everyone can be a great artist, but a great artist can come from anywhere. It is difficult to imagine more humble origins than those of the genius now cooking at Gustose, who is in this critic's opinion, nothing less than the finest chef in France. I will be returning to Gusto's soon, hungry for more. This speech is so important for people to realize. Don't get, are you getting? I'm literally tearing up. Like this, I'm a child.

I'm just like a little hot mess. It's designed to do that to everybody. So if you got choked up during that, it's because that's what the world needs. You need to have hope. You need to have people building stuff. And so let's just, I understand it's easy to dunk on people.

It's easier to criticize people. People make mistakes. They fall down. But let's just create a little space for people to succeed. Just a little. Just a little lane. And that's what venture capital is. It is.

Yes. Like the discovery and defense of the new is something I'm going to tape on my monitor. Because it really is that and the idea of being in a position to be a positive provocateur to say, I see these problems, but instead of just writing them down and hitting publish, I can work with you on how to solve them. And then you will build a better business that will have an impact in the world. You will create jobs in this economy.

My dad is like so excited that I might be like creating jobs in this economy. I mean, talk about a boomer. you to see. He's like, you're making jobs. I literally had a young person say this to be like, oh my God, like, you know, what do you do for charity? I'm like, every company I invest in creates dozens to thousands of jobs. The greatest form of charity is a great job. You know, like if everybody had a really great job, not everybody has a great job, right? I think we all realize that the bottom third of jobs kind of suck and you're grinding it out. I'm talking about great jobs, careers, passions. Like, if we can create more of those in the world,

that also is a mitzvah. That's super important. So anyway, it's been an honor to do this. I absolutely love it. I can see where I can see where the math would start to get hard.

And you have to probably keep your sense of discovery and defense of the new, which is why I want to put it on the monitor. But I love it. And I think I'm finding cool companies and I'm proud that I have like actually some companies in our portfolio already, which I didn't expect to be happening

at six months. So thanks for that. Like, it's all happening. It's all happening. You found them. And if you want to join us on this adventure, if you want to support the new, this wasn't intended to be an ad. But if you're a rich person or anybody of affluence, if you're an accredited investor, which means you're the top 6% of the country, you could give to charity. I encourage you to do so.

But also, maybe thing, I could invest 5K or 10K instead of my, you know, $15,000 in first class tickets or business class tickets to Italy this summer or in addition to it. maybe I'll place a bet on a startup on something new. And you can go to the syndicate.com slash climate. And the companies we share there are going to be super, super speculative and risk taking by definition. I mean, it's one of the most risk-taking categories, climate and sustainability. So come in with eyes wide open. This is going to be hard work.

And the chance is, the majority chance is you lose your money. But if you keep investing and you get to a diversity, you know, of diversification in your portfolio, hey, there's a chance you could have outsize returns as well. That's why I wrote a book. Angel. That's why we do angel. That's why we do angel. Dot University. And have given $200,000 to charity just by rich people coming to angel.

dot university and learning how to get richer. So I love, that's like my, my, like, Robin Hood Squared. I'm, not the sock trading app. No, I get it. But my robber squared of like, I'm not robbing from the rich. I'm getting the rich, richer, and then getting them to donate to charity and to do good things in the world. Virtuous cycle.

It's a good virtual cycle. Anyway. The promise of remote work was more flexibility, more time back, and more freedom, but in reality, many of us are more bogged down than ever. Why? Because of the nonstop messages, emails, and video calls. So let me tell you about Bubbles. Bubbles is an asynchronous collaboration pool that enables teamwork on your time. It's a 3D environment of screen, audio, and video recordings. It combines the best parts of Zoom meetings and Google Docs. It's great for giving designers feedback, product walkthroughs, code reviews and so much more.

Bubbles is free and it includes unlimited recordings, one click sharing, and it works in browser. There are no downloads necessary. I was going through the new job board we launched at Inside. So I told my product manager, Alex, walk through the product for me and then I went through and I gave him video messages back and I put notes on different moments in his video and I did this all. I kid you not in under a minute and there were no meetings necessary and also no more

mistakes. Send me your product tour. And if you add Jason me with your bubble, I will guarantee you I will watch it. Use bubbles.com slash twist. Go ahead and just send me the bubble to at Jason on Twitter. U.S.B-B-B-B-B-L-E-S dot com slash twist. I want you to use bubbles. It's an awesome product. Great job on that. And then next up is your climate interview, correct? Yeah. Yeah. Next up, this weekend climate startups, again, more and more hopeful, incredible, every founder is hope. In this case, actually, it's a brother and sister. Zora Chung and Stephen Chung have created this company called Rejewel, and it's developed technology.

This is so interesting because we're now getting to the place in EB sales. We're not only are they all over the road, some of them are starting to come out of service and be resold as used cars. And right now, there's not really any way at scale to test the health of a high-capacity battery. You can test your iPhone battery and see how much like lifetime is left in it. You can't sort of safely do that for EV batteries or like grid scale batteries. And so they have developed this technology to do this for EBs, particularly with the purpose of identifying and then encouraging a second life for them, figuring out either can it be resold to somebody and they still have, you know, battery life left or does it need to be recycled? It's such an important.

It's just an important moment in time, right? Like, we now have enough of these on the road that thinking about their end of life and reusability in retirement or reuse or resale, refurbishing, whatever it happens to be, that you need the tools there. And confidence, like consumer confidence. If you want to buy an inexpensive EV because it's cheaper than a new one, you need that confidence to know that the battery is not dead, that it's not going to hold a charge. And so you could be, you know, this gives dealers the ability to say, yeah, this car is seven years old, but it's fine. still got, you know, however long. And this is a hardware and algorithm, if I understand correctly, because I did a little research on this company when I heard you were interviewing them. I'm going to listen along with the audience right now to get educated.

This is what I do on Sundays, by the way. I just in the morning, I pop open this thing and I go do my workout or whatever, and I listen to Molly's interview. Just so I learn more because I'm a neophyte in this category. This is an algorithm and a hardware solution. And it can tell, from what I understand, in just minutes, how good the battery condition is. Yeah, exactly.

And it's like a little cart. You sell it to a dealership. They roll it around, dirt, dirt, plug it into the cars, boop, boop, bo. It's just absolutely fantastic. And then the software gives them a dashboard. It's so simple. These are the solutions that I think are so incredible.

Like every layer helps, right? With the climate crisis. Like, these are the nuts and bolts, the shovels and the pickaxes of this entire economy. Well, I mean, you don't get picked up. And you're not seeing your Uber Eats driver or your DoorDash driver or your Lyft or Uber ride picking you up in a use Tesla yet. Yet.

or a used TV yet. But that will happen because as Tesla has ramped up production, now they're able to actually start to meet the demand. I think they still have a ways to go, obviously. But as they start to meet demand, people will then stop by, rich people, Avalu people will stop buying Teslas as their, use Teslas as their private cars.

I know a lot of people who are rich, who are waiting for a Tesla, and they're just like, I got a used model, literally my friend who's worth lots of money, bought a used Model S, just to hold them over until his plaid was ready or whatever. And this would let those cars then,

if they're available, get tested. And then, hey, you might have your door dish driver or your lift driver pick you up in a Model S. Right. It'd be fantastic. And they could buy it with confidence, right? Yeah, exactly. Fantastic.

I mean, I love, love this company. Yep. All right. Zora and Stephen, brother and sister. Aw. I like that. Siblings. Let's support the new.

Brother and sister, Stephen and Zora Chung are co-founders of Reefiard. Joel, welcome to this week in climate startups. Thanks for having us. Thanks, Molly. Okay, first of all, what is it like being brother and sister working on a startup? Do you hate each other yet? Are you cool? Do you have your days? Well, I think the most important thing is that we have different specialties. So I think across the board with any type of partnership, you know, you don't want to have two engineers or two cooks in the kitchen. So my background has been in business. And so when Stephen called me, it wasn't because he thought I was a brilliant engineer because I barely took any science courses in college. She's not.

Yeah. I'm an honorary engineer. But basically he needed someone to like counter his vision, you know, with a pragmatic, practical business vision. And like I've also previously worked at Walmart and Clorox where I manage a lot of their business units and even help them start new businesses. So I had a point of view that he knew that he was lacking. And so I think that's been really eye-opening for both of us because we've actually learned a lot from each other. And then, Stephen, tell us about what Regul does and the technology, because that's your wheelhouse. You invented this sucker.

What did you build? Yeah. So we've developed a faster way to measure how healthy a battery is. So when you're thinking about millions of electric vehicles on the road, there's going to be a big need to understand how healthy those batteries are and how valuable those batteries are. So if you're thinking about your Tesla Model 3 after so many years, a big question everyone has, how much has this battery degraded?

How much longer can I use it? And then if you expand that to fleets, you know, fleets of electric vehicles, think buses or delivery trucks. It's really an ROI calculation for them. And then something that I care deeply about is, you know, what's going to happen with all these batteries after they're no longer useful in a vehicle. And so we have a diagnostic technology that can help understand the health and the value of those batteries for secondary battery applications as well.

So it's really an easier way to understand battery health that's accurate and cost effective. So what is the way that battery health is understood now? Because it's my understanding that when it comes to high capacity or EV batteries, this is actually really hard to do, which surprised me because I thought I could just take my like phone to Best Buy and they'd be like, oh, you have this many, you know, months left on your battery. Right, right. And it's it's much easier for phones. They're smaller batteries, and they also cost a lot less. And so even if there's a wrong calculation on a phone battery, it's not that expensive to fix. But when you're talking about a car battery, it's much bigger, higher voltage, heavier, dangerous,

then it can be very expensive if a reading is wrong. How it's typically done today is you just literally charge the battery and then you discharge the battery. And so that takes actually several hours. And then if you're talking about a really high capacity EV battery, that also requires some big heavy equipment. And one of these things can cost tens of thousands of dollars just to have that equipment and install it. And so that's not scalable for millions of EV batteries.

So what we've developed is a way that you can kind of just plug into a battery, run a quick test, and in a few minutes, you can tell the same information as that several hours long test. User privacy is one of the biggest topics in tech right now. We talk about it on the show all the time. And if you care about your privacy, you need to check out Brave. Brave shields you from ads, trackers, and other creepy stuff that follows you across the web. Now, they have three core products at Brave, the core browser, the search engine, and its browser native crypto wallet.

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Go download it today and try it. Give me some feedback. Before I move on to the business part a little bit with Zora, tell me a little more about the technology. You're using this electrochemical impedance spectroscopy. Spectroscopy. Spectroscopy, yep. Explain that to me like I'm 10.

And what is valid, you know, have you invented something here? Like, is it, do you own this IP? And how does it work? But like I'm 10. Because no one's good. Okay. Maybe 12. I will go up to 12. Yeah. And first I want to say it. So it's electrochemical impedance. spectroscopy.

Spectroscopy. We can also say EIS. And don't worry, after, you know, five plus years, I still get it wrong sometimes. So EIS is a, it's an electrochemical measurement technique. So we didn't invent that technique.

It's used by electrochemists all around the world for decades now. And it's a fairly well-known technique to characterize and understand batteries. So where our IP is, is in figuring out how to do that for higher voltage and basically larger batteries. To do EIS today, you can buy a machine that can do that on a cell phone battery, a cell, typically three to five volts. And what we've done is develop some technology that can perform this on higher voltage batteries.

So 50 volts we're doing right now. we're looking at 400-volt EV batteries. So that's the first kind of unique part of our technology. The other thing is we've figured out a way to do the testing, collect the data, and develop battery state of health or SOH models. So basically a machine learning algorithm based on that measurement. And we've developed a way to systematically and repeatedly be able to develop these battery models from that EIS measurement.

Gotcha. So it's a hardware on a software solution. You plug this in, see what the battery health is like, and then deliver essentially this health report. Is it also predictive? Does it also sort of say, I mean, I assume the health report must be somewhere predictive. The battery will last this many more years, that kind of thing? Yeah, yeah, exactly.

What we do is, so that one measurement provides kind of a snapshot in time. But if you have multiple snapshots, you can kind of create a pretty good idea of where a battery is going to go in the future. And then if you combine that with other information, all batteries have some sort of battery management system or BMS. So there's a lot of data collection already. So combining our prediction with some other sources of information, then you can get a pretty good idea of how many more years is a battery going to last in a particular application. And it sounds like there are kind of two options. there's how many more years will the battery last or this battery is ready for some other use? What are those other uses?

Zora's nodding. Do you want to jump in here? Oh, yeah. It's very interesting. We get that question a lot. And I think a simple answer would be any application that is less stressful than the original one. So if you think about how stressful it is for an EV battery, it probably goes through extreme temperatures. you're is subject to shock and vibration.

And if you think about trying to accelerate on the freeway, that is an intense amount of energy that it's using as a huge load on the battery. But if you think about a stationary application, that's the most common one that people think of, it might be sitting in the building. Hopefully it's in a more temperature-controlled environment. And if you think about a building load,

maybe the most intense thing you do is pump up the AC or the heat. But that is more consistent. then, you know, accelerating from zero to 60 on the freeway, for instance. There's other applications that people have looked into as well, such as even putting it into, you know, lighter electric vehicles, such as forklifts or golf carts where maybe the top speed is, you know, under 25 miles an hour. And these are maybe also in very controlled environments.

Like a forklift is not going to be off-roading. And so they're going to be. that are taken care of. So there's a lot of opportunities here. And I think what's really powerful about the technology is that there's not one use case. So being able to understand the specific health and the remaining useful life is incredibly valuable in identifying that ideal use case. Because even in my opinion, the battery only has one year of life left.

That could be the best application for a DIY project where you just need to prove out something. Why would you buy a new battery for that? It's a waste of resources on everybody's part. Right. And do these pathways for reuse exists now, or is this the kind of technology that could enable these pathways for reuse and then keep these batteries that might have a year of life left in them out of, God help us, a landfill? There are pathways, but they're not, like, you know, official pathway. There's a lot of people doing DIY projects, you know, hobbyists, essentially. And there's a few companies who are starting to do this on a larger scale. But it is,

We see our technology really as, like you're saying, as an enabler, something to be able to do this on a massive scale. Because we are expecting millions of these electric vehicle batteries to reach end of life in just a few years. And doing a 10-hour test on each of them just doesn't really pencil out. So having a more systematic way to do this and a certified way to do this, that's really what we're targeting. Right. You take your racehorse and you put it out to faster. Right. If you're listening to this podcast, you probably already have some exposure to crypto. Well, did you know that you can now invest in crypto through your retirement account?

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I'm only saying they accelerate really quickly. Zora, what is the, what's the business model here? Who would be the buyer of this technology? Yeah. Right now, we are talking to a top 10 automaker. and the idea is that this would be deployed actually at the service departments. So while they don't own the dealerships, they would be looking at an enterprise subscription that they would then farm this out.

So the paying customer in this scenario would be the automaker, and then the end users are actually the technicians at the service departments. Over time, we see that changing, but right now with EV penetration, especially in the U.S. being fairly low, and a lot of that control needs to be at the automaker level. Over time, I can also see this going out to like the Jiffy Loobes and AutoZones of the world where if you think about the service offerings that they have now, in an environment where you have 50% of EVs on the road,

they will have to expand their offerings. Right. What's the status of the business now? You said you're at 50-volt batteries. you're kind of in proof of concept and piloting stage, is that right? Yeah, yeah, we're doing some commercial pilots right now, actually on two continents, so that's really exciting. You know, aside from just proving out the technology, we're scaling up for that next,

the higher voltage battery packs, if you will. So Zora mentioned that we're doing a project with a top 10 automaker, and that's, you know, we're essentially doing a bit of technology demonstration for that next generation product. How important do you think it is to have technology like this to sort of, I mean, it just feels like a lot of people would probably choose a used DV over a used ice vehicle, but they don't have that confidence because we've all had the experience with our phone where the battery just won't hold a charge after a while.

Yeah, yeah. This is incredibly important. And one thing, one of the reasons that when Stephen called me about it that was, spoke to me very much is that if you look at the vehicles on the road, the average age of a vehicle is about 12 years. And since COVID, I've read that, that is expected to increase. And so most people are buying their cars used and not new. So if we are to really look at EV adoption, mass EV adoption, we need to make this available to, you know, people that aren't super wealthy and are mainly focused on I use vehicles, but that risk is too great. Right now, there's too much uncertainty.

We actually have a funny story. One of our interns bought a use bolts. And when he asks them to check the car battery, they check the 12-volt starter battery. And yeah, exactly. Got it. So there's a little bit of an education hill that you have to also climb here. How hard is this to do, Stephen? I mean, it feels like one of those things, you know, the first conversation I had was

or I was like, wait, I don't understand why this doesn't exist. But it sounds like it is pretty hard to approach these big batteries with a real diagnostic tool. Is it also dangerous? We're making it less dangerous. So yes. Yes. With any large high capacity, high voltage battery, there is an element of danger in there. But there's things you can do to kind of build a lot of safety in.

to either the process, the equipment that you use, you know, PPE, obviously. So it's definitely dangerous to do. It's not something that every, you know, car technician is trained on. Actually, very few of them actually have any expertise in handling high voltage batteries or, you know, even knowing what to look for. So as you said before, there's a huge education gap. That can be addressed. But with a technology like ours, we're trying to make it plug-in-play as possible so that somebody doesn't even need to be exposed to any high voltage. They just plug something into a port and it's, you know, they just press a button and then this, this test runs.

So hopefully we can get to that point. How intensive is the hardware component? Like, in terms of manufacturing and building it, is it expensive? I know that VCs have a tendency to be nervous about hardware. It is hardware, and because we are dealing with, you know, batteries and high voltage components, there are some expensive components inside these, but it's, you know, somewhere between the cost of making a laptop and making some heavy industrial equipment. It's not the most expensive thing, and one of the really interesting things about our technology is, We found a way to do this with essentially off-the-shelf components.

So there's not a whole lot of customization that needs to be done. We're building the hardware, but it's essentially just electronics. And it's controlled by software. So it's one of the more, I guess, easy things to manufacture when it comes to clean technology. It's electronics. And the way we're approaching it is as much of it can, as much of it that can be controlled by software, the better. And then what does it actually look like?

It sounds like it's sort of like a cart, right? Like you just sort of pull it around a lot full of cars maybe. Or do they drive into a service center? Like what are the actual mechanics of doing the diagnostic? Yeah, yeah. So there's a few different, I guess, looks of the product. The one that we've that we're testing with some commercial partners right now. Those are for 50-volt modules, 50-volt battery modules, and that's kind of the size of a

desktop computer, kind of a box with some cables that come out of it. The product that we're able to plug into the charging part of a vehicle, that is closer to the, like, a cart that you would roll around a parking lot with a box with some wheels with a cable coming out, and then that cable is essentially looks like a charging cable. So you can plug it into the charge port of a vehicle and do the diagnostic that way. I have two questions simultaneously. So I'm going to come back to you with a business question. But Stephen, how did you come to this problem? How did you decide like this was the thing to tackle? Yeah. So in some time towards the end of grad school, I was trying to find different ways to not work on my thesis.

So I came across some articles. Yeah, yeah, that's where all the ideas come out. So I came across this article about, hey, what's going to happen with all these electric vehicle batteries at their end of life? And this was in 2016. So the Model 3 hadn't come out yet. This was a very futuristic thing.

And I just couldn't stop thinking about that problem. And then after grad school was just trying to do different things. It had a bunch of crazy ideas. Zora calls it my mad scientist days. And during that time, while I was tinkering, I came across this electrochemical impedance spectroscopy, EIS. And then I looked more into it and realized, hey, this can be a way to at least address the first problem. of how healthy are these batteries and how valuable are they. And I dug more into how to actually perform this EIS measurement. And I realized it was essentially in an extension of my expertise in power electronics.

I got my master's in specifically power electronics, which is, we're answering the question, how do you move current or get voltage from one voltage to another in an efficient way. And EIS is basically, you know, an interesting power electronics problem. So after, you know, tinkering a little bit more, calling Zora a bunch of times and bothering her nights and weekends, you know, we came on this idea of, well, what if we were able to use this hardware to take a measurement and then understand the health of batteries and use that for use that to understand the health and the value. And then Zora, when you go about calculating TAM and you talk to automakers, like, what is the

incentive for them to buy this? I think there's a tendency to think, well, car makers just want to sell new cars. So why do they care about their used stock? Yeah. Yeah. I think a big part of it will be policy and regulation. So it's not quite in the U.S. yet, but in Europe and China, there is regulations where there's extend producer responsibility. So they are responsible for these batteries at end of life.

And we've estimated that if the proper infrastructure isn't in place, you know, they're seeing lower residual value for their use cars, which is going to hurt their dealerships. There's not really a lot of work that they can do on an electric vehicle right now because the whole battery is being. ignored. So that's revenue that their dealerships are missing out on. And then more importantly, is if they don't have the proper infrastructure to repurpose, you're looking at at least $1,000 per vehicle to ship and recycle. And I say at least because if you have a smaller battery, it's lighter. And if it has a lot of precious metals, then you get some value back. But we're trending towards lithium iron phosphate where it actually costs double. to recycle it because you're not getting any of the precious metals back.

It's better from a mining perspective, right, because you're not going to the DRC. But when you talk about end of life, that's an additional cost that they may not have factored in. And so who's covering that cost? Right now, what we're seeing is a lot of OEMs have warehouses full of these batteries that they're trying to figure out what to do with because they don't have like the million dollars

or so that they might need to recycle these and they know that they're so valuable. So the incentive is, you know, making some money, I would say, and then meeting regulations. And of course, being able to repair, remanufacturing, repurpose would also help meet their ESG goals too. Right. And I could imagine that even the simple, there is all of that and just the sort of simple part where like you want to sell an EV that's a least return and you want to give people confidence. Exactly. Yeah. Yeah. Yeah. Yeah. And I think another, I'm sorry. Another really. Another really interesting part of this is a lot of automakers, they're becoming battery makers as well. And having access to future supply of battery materials is becoming increasingly important.

And so there's all kinds of investments in not just the cell manufacturing, but also recycling now, so that a lot of these companies can reclaim the materials. Well, how do you recycle a battery if you sold it to somebody? And they technically own the vehicle. They're thinking about ways to be able to reclaim these batteries and just finding new technologies and, you know, different, in a way, redefining what their business models look like to be able to adapt to a new electrified future. Right. I mean, that's what I think is so fundamentally fascinating about technologies like this,

is that it opens up economic pathways that don't currently exist within, whether it's offering an incentive program for somebody to turn in a vehicle that they bought or creating the pathway to golf carts so that that's a revenue stream for carmakers. It just all gets so interesting when you think about what you could do

if you just have this one, I mean, you're like the bolt. Not the car, the actual. Unintentional EV pun. Well, Stephen and Zora, this is so interesting. Please keep us posted. I love hearing about it.

Yeah, definitely. Thank you for having us and giving us opportunity to share some of our experience and insights. Thanks for coming on. Okay, everybody, thanks for listening. We're going to be back tomorrow with the full slate of news. It's going to be Monday. So buckle up. I can't tell you how many crypto startups are going to go belly up or lawsuits that will be filed.

But you can be sure we'll have two or three of those stories this week and everything else that happened over this weekend and going into the week. It's not going to be a slow summer. It's a big new summer. It's a big new summer. I've been stockpiling stories since Friday for the Monday docket. It could be a two-hour show. Just like get ready. Unbelievable. Okay. And hey, just special thanks to all the amazing sponsors. I want to give extra sponsor love and I want you to do it too. If you're a super fan of the show and you made it to this point in the show, it is your gear. It is your duty. It is your honor. It is your privilege to go on Twitter and just say thank you to whichever one of these sponsors you love the most. And then just at mention us.

I want you to say thank you at Notion for supporting at TWA startups, right? That's a perfect example. If Notion or Squarespace are your jam, I love both of those. I use both those products. Hey, maybe Masterclass. I love that product. I got the yearly subscription. Maybe you use in broker for insurance like me and a lot of my startups. Maybe you're getting healthy with Thorne. Right? Get healthy with Thorne. Or maybe you got a nice tight suit from Indochino. You go ahead and thank Thorne Indochino in broker or masterclass on your Twitter. And then that sends love to them and to us. And we keep this whole operation growing. Maybe we go to seven days a week, right? How great would that be? And thanks to Microsoft, they really support founders. So great. Masterworks. I'm buying my second painting on Masterworks.

Can't wait. I got a basquiat. I'm trying to pick my next one. I may go for a warhol. I don't know. Lemon.com. They do a great job at landing developers for a lot of our startups. Policy genius. You need to have insurance, life insurance for your family, and they're going to help you get the best price. Vanta for your SOC2 compliance intercom so that you can understand your customers and not churn customers. What a great product. Bubbles, huh? We've been getting a lot of pitches on bubbles recently. Brave, great browser does a lot of interesting things in terms of saving you from a lot of tracking. Maybe if you want to get rid of some of the ads that are annoying you and have some cryptocurrency hooks that are kind of neat. And of course, I trust if you want to put crypto in your IRA, which I am going to do, by the way.

I have some crypto holdings, but I want to put a little bit in my IRA and get that tax benefit like Mr. Peter Thiel did famously with his Facebook stock. So thanks again to all those sponsors. Who knows? Maybe it works out. You never know? You never know. Maybe it works out. Hit it out of the park.

All right, everybody. Sorry, I should have given you a trigger warning on that one. Anytime I mentioned Peter Thiel. I know, Mom. Did I trigger the lips? Okay, sorry, sorry. I love Peter Thiel. He's such an interesting, weird dude.

I had him on the show. I interviewed him. Would you interview Peter Thiel? Fun character. Would that be triggering for you? I mean, I got to like, you got to face your fears. You got to face your demons. That would be like you.

going to Dagaba and Yoda's like, listen, your weapons, you will not need them. And then you go into the cave and you have to face off against. That would be me. That would 100% be me. I'm going to have Peter Till back on the program. I would do it. I would do it for the clicks. Oh, okay.

Wow. Very good. I like it. I would do it for the learning. I think it's important to understand people. Yeah, absolutely. All right. We'll see you all tomorrow.

See you, my day. Thanks, thanks, partners.