Arcady Sosinov_E6: From Fallout to Breakout [5/25/2020]
Arcady Sosinov, CEO at Freewire in the Bay Area
Note: References with links are listed at the end of the show notes.
INTRO:
Freewire is “Building and electrified and connected future.”
1:00 Shares excitement for April Series B round close.
1:30 Problem with ultrafast charging and fast charging solutions — using low power grid connections, to buffer demand spikes. Can deploy in may more situations, using their tech. Unpacks the marginal constraints and opportunities.
3:00 Slow Charging took 6hrs originally, and Fast is charging at 1hr presently. Ultrafast takes around 20 min, used primarily with (e.g., Audi, Jaguar, Porsche) in luxury segment of market. Highlights how luxury market may be driving the breakout of faster charge opportunities at 20min or less.
4:00 Expands on his story as immigrant moving from Russia, experience living new the fallout of Chernobyl, and love for automotive. His father (a taxi driver) helped him develop an understanding and appreciation for cars. He saw the ‘cult of Elon Musk’ as a transformational opportunity when he first moved to the Bay Area.
6:00 Talks about a strong belief, that there will be a renewed focus on climate, after the pandemic passes. Also sees a renewed focus in MedTech, Viral Detection, and ClimateTech/CleanTech.
SECTION1: Cleantech and Measuring Impact
8:57 Discusses “Charge Rage” as an initial issue (mentioned in CNBC interview). In the beginning of charging station developments, people would get frustrated, and employees would get into fist fights when others would block the chargers.
10:00 Discusses needs for additional charging stations across a much wider geography. Scale of power is massive, where a WallMart Store Tesla charge, can use as much power as the same WallMart Store draws itself. Grid base level capacity, is the challenge they are solving.
12:45 Talks about the similarity of flattening the energy demand curve, to flattening the pandemic curve, as a call to action with EV integrations. Also highlights peaking plant (many coal) demands with unstable demand for car charging, and believes his company is creating a positive impact here in avoided coal emissions.
13:00 Discusses Net Zero Energy (Emissions) initiatives for large corporations, and how fast mobile supports this initiative. Oil and Gas majors have made this pledge recently (see below) for both BP and Shell by 2050. Charging is a big part of this, with proof that miles driven and source of electrons, can be counted toward positive impacts from offsetting combustion vehicles.
15:00 BP Ventures with acquisition of Lightsource solar (links below), in BatteryTech, EV Charging Networks, and Shell with similar initiatives. Next year BP will hold a shareholder meeting to vote on Net Zero Energy pledge, and will act as a corporate amendment. Arcady points to maximizing shareholder value is driving these pledges.
16:45 Highlights his background working with one of the first Environmental / Social / Governance (ESG) hedge funds for years. Unique views on using ESG data to analyze against existing financial models. Findings showed mixed positive and negative correlations.
18:45 How can Founders and funds measure ESG components? Data changes, product changes, and executives are preventing literal and figurative fires. Measuring ESG is a tough ask in venture, in his view. The introduction of investors asking for ESG metrics (e.g., gigatons can be measured and tracked), has led for him to update on quarterly basis for these institutional funds. Talks about ESG in private placements as ‘table stakes’, but is difficult to parse causality from ‘patient capital’ demands.
22:50 Talks about top-tier taking a closer look at Cleantech again.
SECTION2: Trough of Disillusionment
23:50 Overview of Gartner’s Hype Cycle, and how Freewire has met the challenge through Product Market Fit. Talks about scale and tradeoffs of building for opportunity in entering new verticals. Talks about sky high expectations, and how to balance growth in the trough. Talks about personal beliefs communicated, and passion to push past the trough. Shares doubts he had about opportunity costs and stick with the difficulty.
26:00 Talks about idealized product, and delivering based on expectations. Shares insight about managing expectations, and how to keep values aligned. Shares that it’s tough for Entrepreneurs to push past the trough, and the family component.
28:00 Shares how passion is important to get through trough, and the needs to balance expectations through trusted Advisors. How Advisors can help buffer exuberance, and get through both peaks and valleys.
30:00 Be very careful of who you pick, to be around you. Pick the right people to get through the trough.
SECTION3: Freewire’s Incubation Experience
30:00 Takeaways from LACI and Elemental. Highlights differences of accelerator versus incubators. Talks about how incubators lead Founders to pitch, and speak the language, and understand the market. Accelerators can be a safety net in deal blockers, and help them move faster. Gives Founders advice of knowing strengths and weaknesses when picking an accelerator versus incubators — they are different.
33:00 Don’t expect incubators to do all the work for you. Ask for help on finance model, and Business Model Canvas’ to find PMF, and do quarterly reviews. Moch pitch meetings, and putting yourself out there will get you closer — it’s just hard work!
34:30 What has surprised you most about yourself, about becoming a Founder. With 40 employees, his sense of responsibility and empathy has been the biggest shocker — unlike what one learns in business school. Talks about how employees have committed beyond compare, and how that ties the team together. Draws a distinction between understanding, and empathy.
36:00 Shares future target markets, and the types of talent. He’s open to conversation! Email is an easteregg…
SOURCES:
-Arcady (LinkedIn): www.linkedin.com/in/arcady
-Arcady (Twitter): www.twitter.com/arcady_s
-Freewire Splash Video: https://www.youtube.com/watch?v=LlyGJro-frw&feature=youtu.be
-Freewire (Site): https://freewiretech.com/
-Freewire (Twitter): www.twitter.com/FreeWireTech
-Freewire (Elemental Exchange): https://elementalexcelerator.com/companies/freewire-technologies/
-LA Clean Tech Incubator (LACI): https://laincubator.org/
-Stanley Ventures: https://www.stanleyventures.com/
-Volvo Ventures: https://www.linkedin.com/company/volvo-group-venture-capital/
-BP Ventures: https://www.bp.com/en/global/bp-ventures.html
-Strawberry Creek Ventures: https://www.avgfunds.com/strawberry-creek-ventures/
-Chernobyl Disaster: https://en.wikipedia.org/wiki/Chernobyl_disaster
-Chernobyl HBO: https://www.youtube.com/watch?v=s9APLXM9Ei8
-Charge Rage: Charge Rage https://www.mercurynews.com/2014/01/19/charge-rage-too-many-electric-cars-not-enough-workplace-chargers/
-Peaking Plant https://en.wikipedia.org/wiki/Peaking_power_plant
-Net Zero Emissions https://www.wri.org/blog/2019/09/what-does-net-zero-emissions-mean-6-common-questions-answered
-BP Net Zero Pledge (2050): https://www.bp.com/en/global/corporate/news-and-insights/press-releases/bernard-looney-announces-new-ambition-for-bp.html
-Shell Net Zero Pledge (2050):: https://www.shell.com/energy-and-innovation/the-energy-future/shells-ambition-to-be-a-net-zero-emissions-energy-business.html
-BP Acquisition of Lightsource: https://www.bp.com/en/global/corporate/news-and-insights/press-releases/lightsource-bp-to-accelerate-global-solar-growth-with-further-investment-from-bp.html
-EV Charging Networks backgrounder: https://www.plugshare.com/EV-Charging-Networks-North-America.html
-BP upcoming shareholder vote: https://www.wsj.com/articles/bp-agrees-to-draft-climate-change-shareholder-resolution-11585339089
-Chevron Emissions Shareholder 2018 announcement: https://www.asyousow.org/press-releases/chevron-resolutions-climate-change
-ESG MSCI descriptions: https://www.msci.com/esg-investing
-Patient Capital: https://en.wikipedia.org/wiki/Patient_capital
-Hype Cycle (Trough of Dissolusionment): https://www.gartner.com/en/research/methodologies/gartner-hype-cycle
-Taj Eldridge (EPISODE1): https://twitter.com/posi2ive/status/1240057182726414337
-Business Model Canvas: https://www.strategyzer.com/canvas/business-model-canvas
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Song Credit: The Croft — By Joakim Karud
[ No Copyright on Music and Creative Commons — Attribution-ShareAlike 3.0 Unported — CC BY-SA 3.0 ]
