Latest / Climate Cowboys / #296 Some Companies Will Print Money When Climate Disasters Happen | Darren Clifford | Adapt[us]

Transcript

#296 Some Companies Will Print Money When Climate Disasters Happen | Darren Clifford | Adapt[us] · Climate Cowboys

0:00
SPEAKER_01: And I think people fail to appreciate that the most common way it comes
0:03
SPEAKER_01: and affects their lives is through inflation.
0:05
SPEAKER_01: As you go to the grocery store and you go, wow, the vegetables are a lot more expensive.
0:08
SPEAKER_01: What's causing it to be more expensive?
0:10
SPEAKER_01: Well, they can't get water,
0:11
SPEAKER_01: their strokes,
0:12
SPEAKER_01: they're not having enough,
0:13
SPEAKER_01: like the crops aren't growing the same way that they used to.
0:15
SPEAKER_01: What brought me into this space is this idea that My personal purpose in
0:19
SPEAKER_01: the world is being positively impactful with people.
0:21
SPEAKER_01: I want to make sure we can live a good quality of life regardless of what the outcome is.
0:25
SPEAKER_01: How do we go and make money doing it?
0:26
SPEAKER_01: How do we go and actually have a little bit of that swagger you're talking about
0:31
SPEAKER_01: to go and break a few things because we all know it's not going to work.
0:41
SPEAKER_00: Will more climate disasters lead to more climate tech unicorns?
0:48
SPEAKER_00: Just come out swinging.
0:49
SPEAKER_01: I mean, the simple answer is yes.
0:53
SPEAKER_01: It's unfortunate, but the answer is yes.
0:56
SPEAKER_00: Tell us why.
0:57
SPEAKER_00: Explain more.
0:59
SPEAKER_01: It's pretty simple.
1:01
SPEAKER_01: The world's changing.
1:03
SPEAKER_01: And it's not something where, oh, I'm not sure if I want to be along for the journey or not.
1:08
SPEAKER_01: I'm not sure if I want to change or not.
1:11
SPEAKER_00: No, it's about to be slapped in the face kind
1:13
SPEAKER_01: of change.
1:15
SPEAKER_01: And that's going to force you to do things differently.
1:17
SPEAKER_01: It's going to force you to buy different things.
1:19
SPEAKER_01: You're going to want to buy different things.
1:22
SPEAKER_01: And that's going to make a complete shift in our economy,
1:25
SPEAKER_01: what we actually demand, where we spend our money.
1:27
SPEAKER_01: That's going to make these new tech unicorns the ones who actually think forward
1:30
SPEAKER_01: and can actually meet that demand.
1:33
SPEAKER_01: They're going to be the ones who win.
1:37
SPEAKER_00: Where are you seeing this the most right now?
1:38
SPEAKER_00: Because I know it's not evenly distributed,
1:41
SPEAKER_00: so I'm kind of curious if you see the beginnings or the tip of the spear
1:44
SPEAKER_00: with this stuff.
1:46
SPEAKER_01: The places where we see it the most is where it's very easy for an economic buyer
1:53
SPEAKER_01: to make a decision for their own benefit.
1:56
SPEAKER_01: So it really does come down to the very basics of business.
2:02
SPEAKER_01: When you have a product that is better, faster,
2:05
SPEAKER_01: cheaper,
2:06
SPEAKER_01: and the demand for that is going up because the weather is getting hotter,
2:09
SPEAKER_01: more volatile, A person who's spending their money gets the benefit from doing this.
2:14
SPEAKER_01: So this is in places like in heating, right?
2:18
SPEAKER_01: In different building materials where you actually get the benefit
2:21
SPEAKER_01: from what you're putting in the building materials.
2:24
SPEAKER_01: We're seeing it in places like backup battery systems and grid resiliency
2:29
SPEAKER_01: and some things like this, where the people, the money get the benefit.
2:34
SPEAKER_01: That's the place where we're seeing the real strong shift in demand.
2:39
SPEAKER_01: All this stuff around,
2:40
SPEAKER_01: hey, this is what society should be doing to help build resiliency for everyone.
2:46
SPEAKER_01: The WRI reports that say it's a 10 to 1 social benefit for every dollar spent.
2:55
SPEAKER_01: Unfortunately, that's not the place.
2:57
SPEAKER_01: That's a place that is really still struggling because just because it's good
3:03
SPEAKER_01: for society doesn't mean it's good for the person who's opening their wallet
3:06
SPEAKER_01: and actually putting the cash on the table.
3:08
SPEAKER_01: Mm-hmm.
3:09
SPEAKER_00: Yeah, I think this is really interesting.
3:10
SPEAKER_00: So obviously this whole shift in the narrative or like what you got to talk about as
3:16
SPEAKER_00: a builder to win has really made this come to light
3:20
SPEAKER_00: that people just don't do things.
3:22
SPEAKER_00: What is that?
3:22
SPEAKER_00: What is always that the phrase that it's like,
3:25
SPEAKER_00: you know, The people and buyers are not always acting intelligently necessarily.
3:31
SPEAKER_00: Otherwise,
3:32
SPEAKER_00: they would never pay more for something when you keep raising the price
3:34
SPEAKER_00: with luxury goods.
3:36
SPEAKER_00: This is just not a logical conclusion to that example.
3:39
SPEAKER_00: So you have to do what the consumers and the people are actually buying.
3:45
SPEAKER_00: So I think this is fascinating.
3:46
SPEAKER_00: That idea that there will be some particular opportunities though where
3:50
SPEAKER_00: when you have better,
3:52
SPEAKER_00: cheaper,
3:52
SPEAKER_00: faster – It will actually increase because of the demand for
3:56
SPEAKER_00: the product will be increasing because of these negative effects.
3:59
SPEAKER_00: And I think that's something that people do as the,
4:02
SPEAKER_00: let's say, the focus of climate has gone away.
4:05
SPEAKER_00: I think some people forget about the fact
4:07
SPEAKER_00: that there are still these negative things happening and that will increase demand
4:10
SPEAKER_00: for certain products.
4:12
SPEAKER_00: And it's almost like they kind of throw the baby with the bathwater.
4:14
SPEAKER_00: It's like, hey, we're not going to talk about this anymore.
4:16
SPEAKER_00: As a result, we're not going to think about the future demand for these things.
4:20
SPEAKER_01: So mitigation.
4:23
SPEAKER_01: Is a bunch of ideas about what people should do for the betterment of society.
4:30
SPEAKER_01: Adaptation simply is what people will do as the weather gets hotter and more volatile.
4:39
SPEAKER_01: And that's the fundamental difference.
4:40
SPEAKER_01: Like we're all painted in the same brushstroke.
4:43
SPEAKER_01: We need more money in mitigation.
4:46
SPEAKER_01: We need more money in adaptation.
4:49
SPEAKER_01: But adaptation is going to happen.
4:52
SPEAKER_01: The question is just how fast was what pain along the way?
4:57
SPEAKER_01: When will people start doing it out of their own benefit?
5:00
SPEAKER_01: How will we,
5:01
SPEAKER_01: you know,
5:02
SPEAKER_01: those of us who are more on the front foot and actually trying to take a look at it
5:05
SPEAKER_01: as an opportunity,
5:07
SPEAKER_01: are we able to quickly bring products to the market that people will buy around it?
5:12
SPEAKER_00: Now, I'm curious to go into initially here,
5:15
SPEAKER_00: what are some of the So that is our markets that are actually have been in place for
5:19
SPEAKER_00: a while just are growing abnormally large.
5:20
SPEAKER_00: You think about air conditioning as a prime example of this,
5:24
SPEAKER_00: where it is a market that exists already today.
5:26
SPEAKER_00: It's probably growing around three times GDP per year.
5:46
SPEAKER_01: So that way you're seeing this nice tailwind that's there and it already comes.
5:51
SPEAKER_01: And so we like this market because if you can come and bring disruptive technologies
5:55
SPEAKER_01: into cooling,
5:57
SPEAKER_01: then all of a sudden, you know that people are already there lining up to buy it.
6:01
SPEAKER_01: But even within that, so,
6:03
SPEAKER_01: you know,
6:03
SPEAKER_01: I think about inside of there,
6:05
SPEAKER_01: we've invested in a company called Temperate out of the UK,
6:08
SPEAKER_01: which has a revolutionary way of doing air conditioning,
6:11
SPEAKER_01: using passive radiative cooling and trying to bring that into the home or into
6:14
SPEAKER_01: that compressed unit.
6:16
SPEAKER_01: That's a place where it all makes sense.
6:18
SPEAKER_01: But then there's some places there where we're still waiting to see demand form
6:23
SPEAKER_01: a little bit stronger.
6:24
SPEAKER_01: Here, look at things like personal wearable cooling devices.
6:29
SPEAKER_01: I see a number of different solutions out there.
6:31
SPEAKER_01: Eventually, we will pick one and we will end up investing in one.
6:34
SPEAKER_01: Haven't figured out which one it is yet because we do think that market will form.
6:39
SPEAKER_01: But we're also wondering if cooling is such a big thing and you think about People
6:45
SPEAKER_01: in manufacturing,
6:46
SPEAKER_01: people who are still in high-value jobs where heat does have an impact
6:51
SPEAKER_01: in their ability to be productive.
6:54
SPEAKER_01: Why hasn't this market formed stronger yet?
6:58
SPEAKER_01: But this is why we think this is an opportunity.
7:02
SPEAKER_01: One of the most fundamental reasons is we haven't brought a solution to
7:06
SPEAKER_01: the marketplace that is just good enough to get people to really start buying this.
7:13
SPEAKER_00: Mm-hmm.
7:15
SPEAKER_00: Outside of cooling, then what are the other ones?
7:17
SPEAKER_00: I would imagine that flooding and wildfires are definitely high up in that list,
7:20
SPEAKER_00: but I'm kind of curious what else you're seeing.
7:25
SPEAKER_01: Flooding with hydroclimatic risk
7:27
SPEAKER_01: and hydroclimatic risk action much more broadly is well up there.
7:31
SPEAKER_01: One of the interesting things is it's not just about not having enough water.
7:36
SPEAKER_01: So you think that they were shutting down power plants in parts of Europe
7:40
SPEAKER_01: because they didn't have enough water to cool the power plant that's there.
7:44
SPEAKER_01: So it can be a wide range within
7:46
SPEAKER_01: the hydrochromatic risk space around having too much water,
7:51
SPEAKER_01: too little water, water is not being up to code.
7:54
SPEAKER_01: So that way, you know, it's something that people can actually, it is safe for people.
8:00
SPEAKER_01: There's a number of things there.
8:02
SPEAKER_01: Wildfire is actually a really interesting one as a private investor where It's going
8:08
SPEAKER_01: to capture a lot of heart share.
8:12
SPEAKER_01: The pictures of it are just dramatic.
8:15
SPEAKER_01: What it does to people's lives is dramatic and unfortunate.
8:19
SPEAKER_01: Unfortunately, we don't really think it's that investable with space though.
8:24
SPEAKER_00: Why is that?
8:25
SPEAKER_01: Wildfires burning up in Northern Canada,
8:28
SPEAKER_01: when no one's around,
8:30
SPEAKER_01: no one's going to pay to stop the wildfires in the middle of nowhere.
8:35
SPEAKER_01: It really is like a select market around cities,
8:39
SPEAKER_01: around infrastructure where people will pay to actually suppress the wildfires.
8:44
SPEAKER_01: It's hard to figure out who's going to be the buyer.
8:46
SPEAKER_01: A lot of it's government related.
8:47
SPEAKER_01: You have one winner that will appear in the space and do really well.
8:51
SPEAKER_01: Like there will be some money made.
8:54
SPEAKER_01: It's just the space,
8:55
SPEAKER_01: if you look at all the research reports,
8:59
SPEAKER_01: how big the markets are going to be,
9:00
SPEAKER_01: wildfires oftentimes are a lot smaller market than people expect.
9:05
SPEAKER_01: And so therefore,
9:05
SPEAKER_01: it's going to be when you follow the money,
9:08
SPEAKER_01: it's going to be a harder place for at least for profit capital to be going
9:12
SPEAKER_01: and being spent there.
9:13
SPEAKER_01: There should be a whole wide range of impact based capital that should be looking
9:18
SPEAKER_01: at this as a great place to have a lot of returns.
9:21
SPEAKER_01: It's just not the place where a private investor like we will spend a lot of our time.
9:26
SPEAKER_00: Yeah, that makes sense.
9:27
SPEAKER_00: You know,
9:27
SPEAKER_00: along these lines,
9:28
SPEAKER_00: I'm kind of curious your perspective on, let's take the example of Rainmaker, right?
9:34
SPEAKER_00: You know,
9:35
SPEAKER_00: they're an interesting company because they're kind of
9:36
SPEAKER_00: in this re-industrialized America vibe.
9:39
SPEAKER_00: And that they're also like,
9:39
SPEAKER_00: depending on who's in office, they can talk about climate change, right?
9:42
SPEAKER_00: Because they're making it rain.
9:43
SPEAKER_00: And some people really get up in arms about cloud seeding, right?
9:47
SPEAKER_00: This is a spicy topic on the internet.
9:49
SPEAKER_00: Let's put it that way.
9:50
SPEAKER_00: But I'm friends with these guys.
9:52
SPEAKER_00: I think they're awesome.
9:53
SPEAKER_00: I love what they're doing.
9:53
SPEAKER_00: Just so if you guys want to be mad at me, be mad at me, blow up the comments, make us go viral.
9:57
SPEAKER_00: I don't care.
9:57
SPEAKER_00: But I'm curious, how do you categorize what they're doing?
10:02
SPEAKER_00: So cloud seeding as a technology, is that a mitigation or adaptation technology?
10:09
SPEAKER_01: First off,
10:09
SPEAKER_01: I I have zero patience for this conversation around what category does
10:16
SPEAKER_01: a technology sit in.
10:17
SPEAKER_01: Like, who cares?
10:21
SPEAKER_01: The market doesn't go, ooh, are you an adaptation or mitigation technology?
10:25
SPEAKER_01: And therefore, I only care about one thing.
10:29
SPEAKER_01: Does the demand for the product increase as the weather gets hotter and more volatiles?
10:36
SPEAKER_01: That's it.
10:37
SPEAKER_01: People and where they spend their money,
10:39
SPEAKER_01: that tells me whether it's an adaptation technology or not.
10:43
SPEAKER_01: I am trying to invest in a way that makes sure that humanity can live
10:47
SPEAKER_01: a good quality life regardless of the outcome.
10:50
SPEAKER_01: And so therefore,
10:51
SPEAKER_01: I only invest in companies where the demand will increase as the weather changes.
10:55
SPEAKER_01: But it's how people spend their money that tells me whether this fits in my bucket
10:59
SPEAKER_01: or not, because that's what matters.
11:01
SPEAKER_01: That's what allows me to bring solutions to that scale.
11:05
SPEAKER_01: So then...
11:06
SPEAKER_01: Rainmaker, absolutely it's an adaptation technology.
11:09
SPEAKER_01: Some people call it a mitigation technology too.
11:11
SPEAKER_01: I don't care.
11:11
SPEAKER_01: Will the demand for this product increase as the weather keeps changing?
11:15
SPEAKER_01: Yes, it will.
11:16
SPEAKER_01: The other one, is this a climate crisis?
11:24
SPEAKER_01: People are on the view that it's like, well, you know, it's a hard time in the climate.
11:29
SPEAKER_01: It's not a crisis.
11:31
SPEAKER_01: Truly, it's fine.
11:32
SPEAKER_01: Then you're going to sit here and go like, oh, Rainmaker, I'm not quite too sure.
11:35
SPEAKER_01: If it is a climate crisis,
11:38
SPEAKER_01: all solutions should be on the table,
11:41
SPEAKER_01: including geoengineering some of these bigger things.
11:44
SPEAKER_01: Now, just do it.
11:47
SPEAKER_01: Maladaptation and what are the consequences and we have to do this smartly.
11:51
SPEAKER_01: But I don't say no to nuclear because we need the energy.
11:57
SPEAKER_01: I'm not going to say no to Rainmaker and geoengineering because we may need some
12:02
SPEAKER_01: of these solutions.
12:03
SPEAKER_01: I'm going to say go do it smartly, but I think it's a climate crisis.
12:36
SPEAKER_00: Make sure that your next opportunity actually creates value for you and your team.
12:40
SPEAKER_00: Learn more at ltmediatraining.com.
12:43
SPEAKER_00: That's ltmediatraining.com.
12:46
SPEAKER_00: I would say that even if you're not looking at it from a climate crisis perspective,
12:50
SPEAKER_00: the way Raymer,
12:51
SPEAKER_00: at least they're currently positioning things,
12:54
SPEAKER_00: they can always change that,
12:55
SPEAKER_00: but is largely like, hey, listen, farmers, we have a food issue.
13:00
SPEAKER_00: Whether or not you believe the core issue is climate necessarily,
13:03
SPEAKER_00: you can say, hey, We don't have water.
13:05
SPEAKER_00: We need crops.
13:06
SPEAKER_00: We need food.
13:07
SPEAKER_00: So we're going to make it rain more.
13:09
SPEAKER_00: We're going to make it snow more so that we have more water in the springs.
13:12
SPEAKER_00: And I think that this is to me what's fascinating.
13:14
SPEAKER_00: There's multiple ways to play across these because you may not get people to believe
13:20
SPEAKER_00: that it's genuinely a climate crisis because there's various reasons.
13:24
SPEAKER_00: It could be political.
13:25
SPEAKER_00: It could be the fact that they're just not motivated by fear.
13:28
SPEAKER_00: They're more like, oh, I'm really focused on anything that's optimistic.
13:31
SPEAKER_00: And they only want to hear optimistic things, right?
13:33
SPEAKER_00: And as a result, you have to play into multiple categories.
13:36
SPEAKER_00: So I'm kind of curious if you've seen any of that happening with any of
13:39
SPEAKER_00: the companies you've been looking at yet,
13:40
SPEAKER_00: or if you want to talk about portfolio companies as well, feel free to do so.
13:44
SPEAKER_00: But I'm kind of curious what you're seeing with that landscape
13:46
SPEAKER_00: and how they pitch what they're doing,
13:47
SPEAKER_00: because it's obvious that you as an investor need to find particular people
13:51
SPEAKER_00: and pitch the way so that people know how to come to you, but for the companies.
13:55
SPEAKER_01: So I always love talking about our companies,
13:59
SPEAKER_01: but before we get there,
14:02
SPEAKER_01: If you're an average person across America, I hope,
14:09
SPEAKER_01: I hope for you that the way that you run into climate change is not going to be
14:14
SPEAKER_01: because some massive flooding,
14:16
SPEAKER_01: tornadoes,
14:17
SPEAKER_01: wildfire come and destroy your house,
14:19
SPEAKER_01: destroy your home, maybe even you, unfortunately.
14:23
SPEAKER_01: Those, the catastrophes are just harsh.
14:26
SPEAKER_01: And fingers crossed that that isn't what happened to you.
14:30
SPEAKER_01: If that's not the thing,
14:31
SPEAKER_01: that's not the way that you experience climate change, how do you experience it?
14:36
SPEAKER_01: How does it come and affect your life, my life, everybody's life?
14:40
SPEAKER_01: And I think people fail to appreciate that the most common way it comes
14:43
SPEAKER_01: and affects their lives is through inflation.
14:47
SPEAKER_01: You don't sit here and think about climate change.
14:50
SPEAKER_01: What you do is you go to the grocery store and you go,
14:51
SPEAKER_01: wow, the vegetables are a lot more expensive.
14:54
SPEAKER_01: The fruit's a lot more expensive.
14:56
SPEAKER_01: What's causing it to be more expensive?
14:58
SPEAKER_01: Well, they can't get water,
14:59
SPEAKER_01: there's droughts,
15:00
SPEAKER_01: they're not having enough,
15:01
SPEAKER_01: like the crops aren't growing the same way that they used to.
15:03
SPEAKER_01: Now there's scarcity and prices are going up.
15:06
SPEAKER_01: Economics 101.
15:08
SPEAKER_01: So I think for most people, this is part of the challenge that we face is there's a disconnect.
15:13
SPEAKER_01: As they go to the grocery store, they experience inflation, they complain about that.
15:18
SPEAKER_01: They...
15:19
SPEAKER_01: There's a lot of things that do cause the inflation,
15:21
SPEAKER_01: it's not just the climate,
15:22
SPEAKER_01: but one of the big things is,
15:24
SPEAKER_01: and that is what people haven't started linking together yet.
15:30
SPEAKER_01: For a lot of the companies that we look at then,
15:33
SPEAKER_01: the expectation is not that you're going to see people say,
15:38
SPEAKER_01: I need to invest in adaptation.
15:41
SPEAKER_01: No one buys adaptation.
15:45
SPEAKER_01: That's ridiculous.
15:46
SPEAKER_01: What they do is they go, Hey, wait a second.
15:49
SPEAKER_01: There's parts of the country right now that have been out of power for two weeks
15:53
SPEAKER_01: because of flooding.
15:56
SPEAKER_01: And then people think, oh, I need a backup power system.
15:58
SPEAKER_01: But then they start realizing like, wait, I only have so much gasoline.
16:01
SPEAKER_01: I can only store so much gasoline.
16:03
SPEAKER_01: What happens when that goes out?
16:04
SPEAKER_01: Or they think I'm going to do solar and I'm going to do solar in a battery.
16:08
SPEAKER_01: But then oftentimes in like a tornado,
16:11
SPEAKER_01: you may see 20 to 25% of the solar panels damaged and destroyed.
16:15
SPEAKER_01: How does that provide a backup battery system?
16:17
SPEAKER_01: But you are going to see people just say, I need more resilient, reliable power.
16:23
SPEAKER_01: That's what they're actually wanting to go and buy.
16:26
SPEAKER_01: And then we've invested in a company called Bactree.
16:29
SPEAKER_01: Bactree actually has a small reactor that you bury in the soil
16:32
SPEAKER_01: and it produces power out of soil.
16:35
SPEAKER_01: And the greatest thing about this thing is that you can flood it.
16:38
SPEAKER_01: You can have a lot of fire go over top of it.
16:40
SPEAKER_01: You can sit here and have like,
16:42
SPEAKER_01: yeah, it is the world's most resilient, reliable outdoor power system.
16:49
SPEAKER_01: And the whole point there is that the event can happen,
16:52
SPEAKER_01: you can go for the weeks
16:54
SPEAKER_00: where you're generating power
16:56
SPEAKER_01: right away,
16:57
SPEAKER_01: and you don't have to worry about the fact of the tornado or whatever happened
17:00
SPEAKER_01: with it, and you're going to be, at least for your basic needs, covered.
17:05
SPEAKER_00: Yeah, you know,
17:06
SPEAKER_00: one thing that's worth commenting on,
17:08
SPEAKER_00: I think,
17:08
SPEAKER_00: is it's fascinating to me how the challenges and necessity, like,
17:13
SPEAKER_00: In a grand scheme of things,
17:14
SPEAKER_00: obviously there's a lot of suffering and everything that comes along with it.
17:16
SPEAKER_00: But when you have big challenges you're facing,
17:18
SPEAKER_00: that's typically when so much innovation comes because people are required
17:22
SPEAKER_00: to figure out ways to solve it.
17:24
SPEAKER_00: If you look at America right now and the big push for –
17:29
SPEAKER_00: I wish I could.
17:58
SPEAKER_01: I love this concept of the Buddhist middle path.
18:01
SPEAKER_01: I see some people who swing on one side of the spectrum and they're like, oh,
18:06
SPEAKER_01: we should be doing everything for society and everyone should be looked after
18:09
SPEAKER_01: and we need the social safety net for everyone.
18:11
SPEAKER_01: And I'm just sitting here and I'm like, we know that this doesn't work at that scale.
18:17
SPEAKER_01: Sorry, but we can't just give it away.
18:20
SPEAKER_01: You need a little bit of the hard times to get us to innovate.
18:25
SPEAKER_01: On the flip side,
18:27
SPEAKER_01: If on the complete opposite spectrum,
18:28
SPEAKER_01: you don't even acknowledge it, there's a problem.
18:31
SPEAKER_01: You can't solve it.
18:34
SPEAKER_01: This middle path that we sit here and we go like, I'm not here to debate what caused it.
18:39
SPEAKER_01: Sure, I have opinions about what causes the climate crisis.
18:42
SPEAKER_01: But can we all at least look at the data and say,
18:45
SPEAKER_01: statistically speaking, with a high degree of confidence, the weather is changing.
18:51
SPEAKER_01: What are we going to do about it?
18:53
SPEAKER_01: And be pragmatic and use human innovation to go and drive the change.
18:59
SPEAKER_01: This is the thing I am not willing to bet against.
19:01
SPEAKER_01: I am not willing to bet against human innovation.
19:04
SPEAKER_00: Quick break from the show.
19:05
SPEAKER_00: Because you're listening to Climate Cowboys, you're probably trying to build something massive.
19:10
SPEAKER_00: A company that will create impact that lasts for generations.
19:13
SPEAKER_00: But there's a box We aren't your traditional slow moving recruitment agency.
19:16
SPEAKER_00: We are uniquely positioned
19:28
SPEAKER_00: Yeah, I love that, man.
19:29
SPEAKER_00: I think that's so true.
19:30
SPEAKER_00: I think it's, um...
19:57
SPEAKER_00: It's the reason,
19:58
SPEAKER_00: truthfully speaking,
19:59
SPEAKER_00: why I got so interested in climate tech was that I just saw so much innovation in
20:03
SPEAKER_00: the space.
20:03
SPEAKER_00: And I was like, this is to me way, I mean, this is before ChatGPT and like the AI era.
20:08
SPEAKER_00: So to me, it was definitely by far the most innovative thing at the time.
20:12
SPEAKER_00: And even with the advent of the AI age,
20:16
SPEAKER_00: I still personally think it's way more fascinating to see all of
20:19
SPEAKER_00: the cool technologies that are coming in kind of in the Just finding ways
20:23
SPEAKER_00: to make things cheaper,
20:24
SPEAKER_00: to waste less, to take things and put it back into the supply chain, whatever.
20:28
SPEAKER_00: So many interesting ways to solve problems.
20:30
SPEAKER_00: And all because we just want cheap electricity or whatever.
20:34
SPEAKER_00: There's a lot of interesting things there.
20:36
SPEAKER_00: And obviously the AI thing kind of helps that problem,
20:38
SPEAKER_00: but we won't talk too much about that right now.
20:41
SPEAKER_00: I want to back up a tad bit because we jumped straight into it.
20:43
SPEAKER_00: I want to know how did you end up kind of deciding to get into this?
20:46
SPEAKER_00: Give us a little bit of your backstory in starting this fund.
20:51
SPEAKER_01: I am...
20:53
SPEAKER_01: Or at least I find myself a lot in rooms these days where I'm evil.
20:58
SPEAKER_01: I am the evil venture capitalist talking about profits and that I'm here looking at the money.
21:05
SPEAKER_01: It's all about the business case.
21:06
SPEAKER_01: It's better, faster, cheaper.
21:09
SPEAKER_01: At least that is how I go and approach the world.
21:13
SPEAKER_01: Now, I'd actually say I'm basically a sheep in wolf's clothing.
21:19
SPEAKER_01: What brought me into this space is this idea that My personal purpose in
21:22
SPEAKER_01: the world is being positively impactful with people.
21:25
SPEAKER_01: I want to make sure we can live a good quality of life regardless of what the outcome is.
21:31
SPEAKER_01: I just fundamentally believe that the way that I do this is I make the technologies
21:38
SPEAKER_01: that improve our life more accessible to people.
21:44
SPEAKER_01: And the best way that I know how, I mean, there's other models that you can do this.
21:48
SPEAKER_01: It's not the only way, but...
21:50
SPEAKER_01: The most consistent best way I know how is scaled companies and your right to scale is profits.
21:58
SPEAKER_01: So it's pretty simple.
21:59
SPEAKER_01: I want to make the world a better place.
22:01
SPEAKER_01: Yes.
22:01
SPEAKER_01: The best thing I can do to do this is use capitalism for good
22:05
SPEAKER_01: by choosing technologies like cooling and backup battery systems.
22:11
SPEAKER_01: And if I can make them more accessible to people because I scale businesses
22:14
SPEAKER_01: that bring these to the market at a cheaper rate.
22:18
SPEAKER_01: I think everyone wins in this case.
22:21
SPEAKER_01: And so I got into this from a view of how do I be impactful.
22:28
SPEAKER_01: Now,
22:28
SPEAKER_01: I'm fortunate I have a bit of a unique background and having been everything from
22:33
SPEAKER_01: a founder myself.
22:34
SPEAKER_01: To operating companies,
22:36
SPEAKER_01: to running an accelerator program before,
22:38
SPEAKER_01: to working in consulting for,
22:41
SPEAKER_01: I guess,
22:42
SPEAKER_01: about 11 years,
22:43
SPEAKER_01: especially doing the green business building side of consulting,
22:46
SPEAKER_01: investing consulting.
22:48
SPEAKER_01: So just seeing a really wide range of industries and also having an angel investing background.
22:53
SPEAKER_01: So being an allocator.
22:55
SPEAKER_01: So part of,
22:57
SPEAKER_01: I would sit here and say,
22:58
SPEAKER_01: I'm not an industry expert in any one thing,
23:01
SPEAKER_01: but the idea of how do we go and scale a business?
23:05
SPEAKER_01: I've seen so many different countries,
23:07
SPEAKER_01: everything from alternative protein to green steel to offshore floating wind,
23:10
SPEAKER_01: the thermal batteries,
23:11
SPEAKER_01: the heat pumps at scale, to backup battery systems and air conditioning now.
23:17
SPEAKER_01: How do I bring all these tools together to partner with founders to be able to make this happen?
23:23
SPEAKER_00: Mm-hmm.
23:24
SPEAKER_00: So when did you start on this journey of then going out to like,
23:27
SPEAKER_00: tell me the situation of like, when did you start raising the fund?
23:30
SPEAKER_00: Whatever you can say about it.
23:32
SPEAKER_00: I want to know, do you invest globally?
23:34
SPEAKER_00: Where do you invest?
23:35
SPEAKER_00: Give me kind of the basics.
23:37
SPEAKER_01: Yep.
23:37
SPEAKER_01: We've been basically on the journey for just over a year now that we've been doing the fund.
23:42
SPEAKER_01: We've done our first close at this point.
23:44
SPEAKER_01: We're still in the process of doing a $30 million fund to show
23:48
SPEAKER_01: that there are actually opportunities inside of adaptation.
23:51
SPEAKER_01: We invest across Europe and North America primarily,
23:54
SPEAKER_01: but we're open to anywhere in the globe just because
23:58
SPEAKER_01: the best technologies are not going to be in our backyard.
24:01
SPEAKER_01: And we can use AI to be so much more efficient at sourcing today that it allows us
24:06
SPEAKER_01: to go broader and pick better winners.
24:10
SPEAKER_01: I think our fund is pretty unique because there's just a handful of things
24:13
SPEAKER_01: that we really do as well.
24:16
SPEAKER_01: One is this thesis around, hey, what's happening?
24:22
SPEAKER_01: But the main part inside of that is actually understanding these cash flows and
24:27
SPEAKER_01: where the money's going to shift to create the investable opportunities.
24:30
SPEAKER_01: And that's something that we've been thinking about,
24:33
SPEAKER_01: talking about, figuring out for a lot longer than a lot of other people.
24:36
SPEAKER_01: And then the other one is post-investment really helping these companies scale.
24:42
SPEAKER_01: That understanding how to commercialize a loss avoidance business case
24:46
SPEAKER_01: and sell resiliency as a value proposition.
24:49
SPEAKER_01: We've just been seeing this more and spending more time thinking about this.
24:53
SPEAKER_01: I like the line from the movie Jerry Maguire, help me help you.
24:58
SPEAKER_01: Oftentimes,
24:59
SPEAKER_01: a startup in the resiliency space is coming to the marketplace and trying
25:02
SPEAKER_01: to help their customer do better,
25:05
SPEAKER_01: but the customer doesn't even realize they have a problem at the time.
25:09
SPEAKER_01: And so figuring out how do you actually commercialize resiliency,
25:13
SPEAKER_01: that's where a fund focuses on.
25:16
SPEAKER_01: That's ultimately why we get paid as a GP and to manage the fund.
25:25
SPEAKER_01: And then go and help these companies succeed because we actually understand how
25:29
SPEAKER_01: to commercialize resiliency and scale companies faster.
25:33
SPEAKER_00: And sorry, I don't know if I missed it.
25:35
SPEAKER_00: Did you say what typical check size you're trying to aim for or is that kind of like flexible?
25:41
SPEAKER_01: With the first fund, we're going to invest in 15 companies.
25:45
SPEAKER_01: So it generally does put us around a $500,000 first check kind of size.
25:51
SPEAKER_01: Now, we actually invest a little bit differently.
25:54
SPEAKER_01: And this is just in alignment with what I just told you.
25:57
SPEAKER_01: We generally write a small check first about $50,000.
26:00
SPEAKER_01: Work for three to six months with the startup and where we try to help them coach.
26:05
SPEAKER_01: Like, are we actually getting there and scaling a business?
26:08
SPEAKER_01: And then we write the remaining $450,000 check.
26:11
SPEAKER_01: One of the things that we do have to acknowledge as an investor in
26:15
SPEAKER_01: the space is it's not like there's three-time exited founders in adaptation.
26:22
SPEAKER_01: And that's where you just get these exited founders.
26:25
SPEAKER_01: And so we end up having to coach the founders a little bit more.
26:29
SPEAKER_01: But then the upside, like what are we looking for taking on that additional risk?
26:34
SPEAKER_01: I get super predictable shifts in demand.
26:39
SPEAKER_01: Yeah.
26:39
SPEAKER_01: The fact that the weather is going to change is so predictable.
26:43
SPEAKER_01: That creates these strong tailwinds that I can go and put money there and I have
26:46
SPEAKER_01: a better chance of getting companies going.
26:49
SPEAKER_01: I get a risk profile that hedges other things that I'm doing.
26:53
SPEAKER_01: I get this opportunity to scale internationally.
26:56
SPEAKER_01: The demand for adaptation solutions is not a regional demand.
27:00
SPEAKER_01: It is something that's all over the globe.
27:02
SPEAKER_01: So there's a lot of upside benefits you get.
27:06
SPEAKER_01: This episode is brought to you by Climate Finance Solutions,
27:09
SPEAKER_01: the firm helping climate tech companies win the major government grants
27:12
SPEAKER_01: that drive their scale and impact.
27:28
SPEAKER_00: Since 2020,
27:28
SPEAKER_00: they've won over $1.6 billion in public funding for their clients,
27:32
SPEAKER_00: with a 90% success rate on the dollars that they've applied for.
27:35
SPEAKER_00: Their team has also helped win more than 500 million euros in European funding
27:40
SPEAKER_00: and managed over $275 million in grant projects.
27:44
SPEAKER_00: With a global team of 27 experts,
27:47
SPEAKER_00: CFS supports climate innovators through every stage of the funding lifecycle,
27:51
SPEAKER_00: from strategy to proposals to project executions.
27:53
SPEAKER_00: They also have a grant identification platform that enables real-time monitoring
27:58
SPEAKER_00: and custom matching of opportunities with alerts as new grants are released.
28:02
SPEAKER_00: If you're a climate investor,
28:03
SPEAKER_00: accelerator,
28:04
SPEAKER_00: or ecosystem builder,
28:05
SPEAKER_00: you can even join their partnership program to unlock pro bono support
28:08
SPEAKER_00: for your portfolio companies.
28:10
SPEAKER_00: Learn more at climatefinancesolutions.com.
28:13
SPEAKER_00: All right, back to the show.
28:15
SPEAKER_00: What does the co-investment market look like?
28:19
SPEAKER_00: Are there lots of other folks that invest in these?
28:21
SPEAKER_00: Maybe this goes into my next question about what other markets do these technologies sit in?
28:26
SPEAKER_00: Is it defense or is it AI or is it energy?
28:29
SPEAKER_00: Are there a lot of other co-investors?
28:32
SPEAKER_01: Those are two, for me, at least two big different questions.
28:36
SPEAKER_01: Are there a lot of other co-investors?
28:38
SPEAKER_01: There actually are.
28:39
SPEAKER_01: There's a number of co-investors out there right now,
28:41
SPEAKER_01: but part of this is because I never think family offices are really trying to move
28:46
SPEAKER_01: to a direct strategy.
28:49
SPEAKER_01: Finding people who are willing to invest through a fund is actually what is coming down.
28:55
SPEAKER_01: I do get a lot of other family offices who are like, I love your thesis.
28:58
SPEAKER_01: I'd love to come invest with you.
29:00
SPEAKER_01: And I have to sit there and go like, you're basically asking a painter to go and paint for free.
29:08
SPEAKER_01: My job is to go and find the companies and to go and scale them.
29:12
SPEAKER_01: I can't just give away the co-investment opportunities that are there.
29:17
SPEAKER_01: It is something that we always try to secure for rata rights and things like that
29:22
SPEAKER_01: so we can continue to expand our position and provide co-investment opportunities
29:26
SPEAKER_01: for our LPs.
29:28
SPEAKER_01: So there's actually a lot of that we find.
29:31
SPEAKER_01: And that's just because the nature of the,
29:34
SPEAKER_01: especially for smaller funds,
29:36
SPEAKER_01: if you're not,
29:36
SPEAKER_01: you know,
29:37
SPEAKER_01: it's a classic small fund,
29:38
SPEAKER_01: large fund debate, small funds, people are going direct instead.
29:42
SPEAKER_01: But to your other point around industries,
29:45
SPEAKER_01: one of the interesting things about adaptation is,
29:48
SPEAKER_01: as we said, people don't buy adaptation.
29:51
SPEAKER_01: This means that adaptation is a horizontal concept.
29:54
SPEAKER_01: It goes across a number of different industries.
29:57
SPEAKER_01: It's not one industry.
29:59
SPEAKER_01: And so you'll see adaptation in infrastructure plays.
30:03
SPEAKER_01: You'll see it in the built environment.
30:04
SPEAKER_01: You'll see it in software.
30:06
SPEAKER_01: You'll see it in a number of different traditional industries that we have.
30:11
SPEAKER_01: You'll see it in healthcare.
30:12
SPEAKER_01: You'll see it in B2B, B2C.
30:14
SPEAKER_01: And it ends up meaning that for me as an investor,
30:18
SPEAKER_01: this is why this broad experience really helps us as we can go forward a lot in
30:22
SPEAKER_01: a lot of these different industries.
30:24
SPEAKER_01: Where the commonalities are on the backside of the companies.
30:29
SPEAKER_01: It's how do you build the business when it is that you are trying
30:32
SPEAKER_01: to commercialize loss avoidance.
30:36
SPEAKER_01: Can you say more about that?
30:38
SPEAKER_01: If it is going back to flooding, right?
30:40
SPEAKER_01: If it's the loss avoidance of flooding and you're basically having to come and say,
30:45
SPEAKER_01: I have a value proposition that is go and invest $50 million today with our company.
30:50
SPEAKER_01: We will save you a projected $500 million of losses over the next 10 years.
30:55
SPEAKER_01: It's a great 10 to 1 return on your money.
30:57
SPEAKER_01: Go do this.
30:59
SPEAKER_01: And the CEO on the far side says, I'm not going to do this this quarter.
31:03
SPEAKER_01: I'm not going to spend the $50 million.
31:05
SPEAKER_01: The answer is no.
31:07
SPEAKER_01: And trying to get through that challenge.
31:10
SPEAKER_01: And that same type of resiliency loss avoidance happens in the heat space.
31:15
SPEAKER_01: You go to a manufacturer and you say, okay, come and use our cooling wearable.
31:20
SPEAKER_01: You're going to have so much more productivity.
31:23
SPEAKER_01: You're not going to have so much worker fatigue or workers being sick.
31:27
SPEAKER_01: You'll avoid this loss.
31:30
SPEAKER_01: It's uncertain exactly how much,
31:32
SPEAKER_01: and it's not in your projections right now, but how much that loss is going to be.
31:35
SPEAKER_01: But this is Why are we actually making more money?
31:39
SPEAKER_01: And that type of commonality about commercialization,
31:42
SPEAKER_01: going to market,
31:43
SPEAKER_01: scaling the solution, that can occur across a number of these industries.
31:48
SPEAKER_01: It's the back end where these companies are very similar and where the expertise is needed.
31:54
SPEAKER_00: Sorry.
31:54
SPEAKER_00: So I don't know if I missed it,
31:56
SPEAKER_00: but are you saying that if you typically go and pitch, hey,
31:59
SPEAKER_00: we'll spend this money up front and we'll prevent this loss,
32:03
SPEAKER_00: how are you getting around that?
32:04
SPEAKER_00: Or is that your secret sauce that you can't share?
32:07
SPEAKER_01: It's part of our secret sauce.
32:10
SPEAKER_01: You know, there's a number of ways that you have to be able to do this.
32:14
SPEAKER_01: First is a question of where are the projected financials of the company
32:20
SPEAKER_01: that you're going to go and talk to?
32:22
SPEAKER_01: Do they even think about the climate crisis or not?
32:25
SPEAKER_01: Or have they given you signals that they actually think about this as a company?
32:29
SPEAKER_01: In some ways, it's not rocket science.
32:32
SPEAKER_01: It's just actually qualifying your market and seeing when you're qualifying a lead,
32:39
SPEAKER_01: do they already acknowledge that they face a lot of risk and uncertainty
32:44
SPEAKER_01: that they need to do something about?
32:45
SPEAKER_01: There's a lot of companies that still haven't really mapped their physical climate risk.
32:51
SPEAKER_01: And all of a sudden,
32:52
SPEAKER_01: you have to go to that company and say,
32:53
SPEAKER_01: hey, by the way, you have a problem and I'm the solution.
32:57
SPEAKER_01: That's a really tough sell.
32:59
SPEAKER_01: Those types of things that you're trying to avoid.
33:02
SPEAKER_01: Where on the flip side,
33:03
SPEAKER_01: another example that may be that you want to go to a company that is owned by,
33:09
SPEAKER_01: maybe it's a family.
33:11
SPEAKER_01: It's a generational legacy kind of business.
33:14
SPEAKER_01: Because that company,
33:16
SPEAKER_01: you go in and you start talking about like,
33:17
SPEAKER_01: yes, you invest a little bit up front, but you gain over the following years.
33:22
SPEAKER_01: That family thinks in that generations anyways,
33:24
SPEAKER_01: and they will be around to capture the benefit of it.
33:29
SPEAKER_01: Maybe much more likely to commercialize and get them to buy.
33:32
SPEAKER_01: And one of the funny parts is you start with these family-owned businesses and have
33:36
SPEAKER_01: a longer-term perspective.
33:38
SPEAKER_01: You get them to start being the early adopters.
33:40
SPEAKER_01: You get them to start showing that this is something that's valuable to do
33:44
SPEAKER_01: and they become winners in the marketplace.
33:47
SPEAKER_01: Eventually,
33:47
SPEAKER_01: when you do go back to that short-term,
33:50
SPEAKER_01: quarterly-driven company,
33:52
SPEAKER_01: you don't go back with a pitch that says, oh, here's the business case.
33:56
SPEAKER_01: You go back with a pitch that says, CEO,
33:58
SPEAKER_01: if you don't do this,
34:00
SPEAKER_01: you're going to fall behind your competitors and you're going to get fired.
34:06
SPEAKER_01: Interesting.
34:07
SPEAKER_00: That's very fascinating.
34:08
SPEAKER_01: Different thing.
34:08
SPEAKER_01: Yeah.
34:09
SPEAKER_01: And this is part of the challenge.
34:10
SPEAKER_01: It is...
34:12
SPEAKER_01: Hey everybody, Silas here.
34:13
SPEAKER_01: If you're going to be headed to New York Climate Week this year,
34:17
SPEAKER_01: you need to be in the room where the most important capital managers
34:21
SPEAKER_01: and founders are.
34:30
SPEAKER_00: This is the Climate Capital Summit by Equal Ventures.
34:33
SPEAKER_00: The room will have over $1 trillion worth of climate capital money management,
34:37
SPEAKER_00: as well as $300 billion in federal funding opportunities.
34:40
SPEAKER_00: This year,
34:40
SPEAKER_00: as always,
34:41
SPEAKER_00: they have an absolute incredible lineup of speakers with people like Sophie Perdomo.
34:45
SPEAKER_00: We'll see you next time.
35:00
SPEAKER_00: I think in the age of AI, so many people have assumed that
35:30
SPEAKER_00: I think that knowledge is super unimportant because like, oh, I have data.
35:34
SPEAKER_00: I have all the data at my fingertips.
35:37
SPEAKER_00: I can just ask Claude.
35:39
SPEAKER_00: But I think that the reality is that people forget that there are so many niche data.
35:43
SPEAKER_00: This is what I noticed in talent, for example.
35:45
SPEAKER_00: There are people who I once in a while will meet and maybe I'm doing a search
35:49
SPEAKER_00: that I've done many,
35:49
SPEAKER_00: many times, but it's like you meet this one person and you're like, oh.
35:53
SPEAKER_00: Wow.
35:54
SPEAKER_00: That person's depth of knowledge goes deeper than I even knew was possible.
35:58
SPEAKER_00: If I thought it was 100%, he's at 500% deep depth.
36:03
SPEAKER_00: This kind of thing exists a lot out there and people have the illusion
36:07
SPEAKER_00: of knowing everything now with AI.
36:09
SPEAKER_00: In reality, there are so many of these nuanced perspectives.
36:12
SPEAKER_00: And this is why I think the idea of go to market
36:14
SPEAKER_00: and choosing your customers is really interesting.
36:17
SPEAKER_00: Not something a lot of people talk about,
36:18
SPEAKER_00: but choosing your customers, but also the sub-segment of your customers.
36:21
SPEAKER_00: Who are you going to go after first, right?
36:23
SPEAKER_00: And in that order of things that you mentioned, that's a pretty good call.
36:27
SPEAKER_00: I appreciate that.
36:28
SPEAKER_00: So an interesting mental model
36:31
SPEAKER_01: for you.
36:32
SPEAKER_01: In this world of AI,
36:33
SPEAKER_01: if you believe it's going to be an outcome of one of the doom scenarios,
36:37
SPEAKER_01: there's pretty much nothing you and I can do about it.
36:39
SPEAKER_01: It's going to happen like Skynet,
36:41
SPEAKER_01: whatever it is,
36:41
SPEAKER_01: whatever doom scenario you choose is going to happen and we're going
36:44
SPEAKER_01: to all be screwed, right?
36:46
SPEAKER_01: On the flip side,
36:47
SPEAKER_01: if it is that you believe in the world of abundance,
36:50
SPEAKER_01: that AI is going to solve all of our problems,
36:53
SPEAKER_01: it really doesn't matter what you and I do anyways either.
36:55
SPEAKER_01: The world's going to be looked after and it's going to be solved.
36:58
SPEAKER_01: The only thing that we should actually be planning for is this middle ground.
37:02
SPEAKER_01: This middle ground is the one where AI is a tool and the tool can be used
37:07
SPEAKER_01: to create value and accelerate what we're doing.
37:10
SPEAKER_01: And this is for us, you know, We don't invest in AI or software as a service.
37:15
SPEAKER_01: We don't think it's an investable space.
37:17
SPEAKER_01: We don't think there's strong defensible modes.
37:19
SPEAKER_01: We do look for companies that are AI enabled and we try to help
37:22
SPEAKER_01: the companies be AI enabled to allow them to use AI as a tool
37:28
SPEAKER_01: to accelerate what they're doing.
37:31
SPEAKER_01: At your point about the expertise still matters,
37:36
SPEAKER_01: now the tool is so much better that in the hands of the expert,
37:41
SPEAKER_01: They get so much more value created.
37:43
SPEAKER_01: And it's actually,
37:44
SPEAKER_01: if anything,
37:45
SPEAKER_01: because the multiplier effect is there,
37:48
SPEAKER_01: that expertise is actually getting multiplied even more and more valuable
37:52
SPEAKER_01: in this middle ground scenario, which is the only one that matters.
37:58
SPEAKER_00: Yeah.
37:59
SPEAKER_00: No, that's...
38:01
SPEAKER_00: I appreciate that framework.
38:02
SPEAKER_00: I'm just trying to kind of soak it in some of these things you said.
38:05
SPEAKER_00: It's a new...
38:07
SPEAKER_00: I shouldn't say it's necessarily entirely new,
38:09
SPEAKER_00: but it's like the way you're framing this is quite new to me.
38:11
SPEAKER_00: And I obviously do this podcasting stuff all the time.
38:13
SPEAKER_00: So I always love when I want to hear new ideas.
38:17
SPEAKER_00: Back to the question I had earlier about co-investors was mainly
38:22
SPEAKER_00: because I was curious,
38:22
SPEAKER_00: you know,
38:23
SPEAKER_00: if there weren't enough co-investors,
38:24
SPEAKER_00: I was wondering, you know, what other types of investors invest.
38:28
SPEAKER_00: So in the case of the companies you invest in now,
38:32
SPEAKER_00: are they oftentimes selling to like the defense space or
38:36
SPEAKER_00: to other like Commercial phishing or anything like this that's different,
38:41
SPEAKER_00: that doesn't appear to be this?
38:42
SPEAKER_00: Or were they always selling to that?
38:44
SPEAKER_00: And then adaptation is just in the background is more like,
38:47
SPEAKER_00: hey, we're actually just providing security for your future revenue.
38:54
SPEAKER_01: I think in all these,
38:56
SPEAKER_01: the trends that you currently see right now are always going to dictate where
39:00
SPEAKER_01: the markets are.
39:02
SPEAKER_01: So some things are just the hotter markets.
39:05
SPEAKER_01: And so will you sell more to them?
39:06
SPEAKER_01: Yes.
39:07
SPEAKER_01: So dual use resiliency applications.
39:09
SPEAKER_01: I go back to this use case of factory, this soil producing power.
39:14
SPEAKER_01: Now look, every unit is not producing a ton of power.
39:17
SPEAKER_01: Like that's the problem with this is it's not like it's going to go and power
39:20
SPEAKER_01: a big old AI data center.
39:22
SPEAKER_01: That's, that's not what it's going to be.
39:24
SPEAKER_01: It's much more about like a sensor out in the middle of nowhere can you go and power that.
39:28
SPEAKER_01: But you can actually put a web of these together and now create a power system
39:34
SPEAKER_01: that is buried under the soil so no one knows where it is.
39:39
SPEAKER_01: It's distributed even within the range that you're in,
39:42
SPEAKER_01: so like within 100 meters around wherever you're looking to provide power.
39:49
SPEAKER_01: And the great part about that is if you go and you destroy one of them,
39:52
SPEAKER_01: the remainder still work.
39:55
SPEAKER_01: So are there defense applications for this?
39:58
SPEAKER_01: Heck yeah.
40:01
SPEAKER_01: Instead of putting a generator someplace that's a target on it
40:04
SPEAKER_01: that some people are going to come and take a drone and smash into in the future,
40:08
SPEAKER_01: you're going to go and say,
40:09
SPEAKER_01: I'm buried,
40:09
SPEAKER_01: I'm distributed,
40:10
SPEAKER_01: you can go and try with your drone, whatever, we're still going to have power.
40:13
SPEAKER_01: And absolutely, this is going to be an accelerant for some of the things that we do.
40:20
SPEAKER_01: The big important thing for us is do we see people actually spending their money on it or not?
40:29
SPEAKER_01: I've heard people come to me about the Northwest Passage is going to open up.
40:34
SPEAKER_01: We need to go and start preparing to do training for the offshore vessels.
40:38
SPEAKER_01: I'm like, you're right, it will, just not today.
40:43
SPEAKER_01: No one's spending their money on that today.
40:45
SPEAKER_01: People are spending the money on defense today.
40:47
SPEAKER_01: So those types of things,
40:49
SPEAKER_01: the cash is there,
40:50
SPEAKER_01: the places that you're going to see more around AI today,
40:54
SPEAKER_01: there's AI infrastructure,
40:56
SPEAKER_01: there's dual uses with that, defense if there's dual uses with that.
41:00
SPEAKER_01: Of course,
41:00
SPEAKER_01: these are places where you really see more demand and more people spending cash
41:05
SPEAKER_01: and it just helps accelerate the solution.
41:08
SPEAKER_00: Yeah, that's helpful.
41:10
SPEAKER_00: Along the lines, are these deals that you find, do they happen to end up being underpriced?
41:21
SPEAKER_01: Markets are efficient, my friend.
41:22
SPEAKER_01: No deal is underpriced.
41:26
SPEAKER_01: I mean, clearly, our whole thesis is yes.
41:31
SPEAKER_01: Right?
41:32
SPEAKER_01: I am completely biased when I answer this question.
41:35
SPEAKER_01: And the...
41:38
SPEAKER_01: But you know what I mean.
41:39
SPEAKER_00: I'm just saying in terms of – they're not extremely like these bubble valuations
41:43
SPEAKER_00: with AI companies and stuff like that, right?
41:45
SPEAKER_01: Heck no.
41:46
SPEAKER_01: We do $5 million to $20 million valuations upon entry.
41:49
SPEAKER_01: We don't do anything above that.
41:50
SPEAKER_01: We don't do hype investments.
41:52
SPEAKER_01: But I think the single biggest place where the difference is,
41:55
SPEAKER_01: remember, the perception of climate risk is actually quite low.
41:59
SPEAKER_01: The quality of climate risk is actually quite high.
42:04
SPEAKER_01: And that gap of people not thinking that it's that big of a deal
42:09
SPEAKER_01: or I have other things I'm focusing on right now
42:11
SPEAKER_01: and there's other more immediate matter,
42:14
SPEAKER_01: that gap is what creates the mispricing and the opportunity.
42:20
SPEAKER_01: Yeah.
42:22
SPEAKER_00: Now, one thing I am curious about, you mentioned this a little earlier.
42:25
SPEAKER_00: You said that sometimes,
42:26
SPEAKER_00: I don't know if you're joking or if it's actually serious,
42:29
SPEAKER_00: that sometimes people kind of view you as like,
42:31
SPEAKER_00: oh, he's the evil capitalist in the room.
42:34
SPEAKER_00: I am curious.
42:34
SPEAKER_00: This makes me wonder the question around what do the founders look like in this space?
42:38
SPEAKER_00: Because for – when I first got into the space,
42:41
SPEAKER_00: it seemed as though a lot of the founders that really were getting a lot
42:44
SPEAKER_00: of attention were the ones who – they didn't necessarily seem to have – I don't want
42:50
SPEAKER_00: to be too rude,
42:51
SPEAKER_00: but they didn't have like the guts or the swagger,
42:55
SPEAKER_00: if you will, to like go build hard companies.
42:57
SPEAKER_00: They kind of like were – they were focused on the problem of climate change,
43:01
SPEAKER_00: and that's like – that was kind of their whole personality.
43:03
SPEAKER_00: Whereas nowadays,
43:04
SPEAKER_00: the companies that are in climate that are winning are kind of like,
43:07
SPEAKER_00: they've got this cowboy vibe, hence why we changed their name.
43:10
SPEAKER_00: And they're like really like kind of swashbucklers going out there
43:13
SPEAKER_00: and like doing things, just conquering.
43:15
SPEAKER_00: And they've got a very different type of energy to them.
43:17
SPEAKER_00: So I'm kind of curious what you're noticing.
43:19
SPEAKER_00: You've worked so many other founders before starting this fund, obviously.
43:22
SPEAKER_00: So I'm just kind of curious of your perception about founders now and
43:25
SPEAKER_00: in this particular niche,
43:26
SPEAKER_00: maybe in comparison to what you've seen in the past or just other industries.
43:30
SPEAKER_00: Okay.
43:33
SPEAKER_01: This is so much about climate.
43:35
SPEAKER_01: In the mitigation world,
43:37
SPEAKER_01: people come into mitigation,
43:39
SPEAKER_01: go back to what I said before, because it's what we should do.
43:42
SPEAKER_01: And then when you approach mitigation from that perspective, it's really hard to break things.
43:47
SPEAKER_01: When we think about what is actually needed to scale,
43:51
SPEAKER_01: they're not willing to sit here and go like,
43:53
SPEAKER_01: this may suck, but this is what is required.
43:57
SPEAKER_01: We're at least in the adaptation space of It's a little bit easier to find founders
44:03
SPEAKER_01: who are sort of like cooling and we want to go and disrupt it.
44:08
SPEAKER_01: We want to go and do something different because this is a specific problem
44:11
SPEAKER_01: that we're here to solve that is not about what we should be doing.
44:15
SPEAKER_01: It's about how do we go and make money doing it?
44:17
SPEAKER_01: How do we go and actually have a little bit of that swagger you're talking about?
44:22
SPEAKER_01: Adaptation is the opportunity, not mitigation.
44:49
SPEAKER_00: I had never thought about it in that terms of like that move fast and break things,
44:53
SPEAKER_00: Mark Zuckerberg situation.
44:56
SPEAKER_00: That is antithetical to people who care.
44:59
SPEAKER_00: They're investing because they care and other people should care.
45:02
SPEAKER_00: I never put it in those terms and I think that's a really good framing because…
45:06
SPEAKER_00: It's so weird because by saying that,
45:09
SPEAKER_00: you're almost saying that the founders who are going to win are the people
45:11
SPEAKER_00: who don't care.
45:12
SPEAKER_00: They're just a bunch of assholes and they're not going to do the right thing.
45:16
SPEAKER_00: But in reality,
45:18
SPEAKER_00: two things can be true because there can be people who just are willing
45:20
SPEAKER_00: to break certain rules and break certain things but do things for the right reasons
45:24
SPEAKER_00: in the long term.
45:25
SPEAKER_00: And I think it's a little bit of an uncomfortable situation, but it's just human.
45:29
SPEAKER_00: Humans...
45:32
SPEAKER_00: In ancient times, heroes were not necessarily considered the people who were always good.
45:35
SPEAKER_00: They were the people who did incredible great things,
45:38
SPEAKER_00: some good, some bad, but they were considered heroes.
45:41
SPEAKER_00: Nowadays, the idea of heroes is like, oh, a hero has to be somebody who's all good.
45:44
SPEAKER_00: They'd never do anything bad.
45:46
SPEAKER_00: But in reality, nobody's perfect.
45:48
SPEAKER_00: We're all human.
45:48
SPEAKER_00: And to have this kind of vanilla hero, Superman is what I think about.
45:54
SPEAKER_00: But I think Superman is the worst hero created because he's just too perfect.
45:58
SPEAKER_00: It doesn't matter.
45:59
SPEAKER_00: But like,
46:00
SPEAKER_00: oh yeah,
46:01
SPEAKER_00: you've only got one weakness,
46:03
SPEAKER_00: you know,
46:03
SPEAKER_00: kryptonite, cool bro, just like blow up all the kryptonite and send it in space.
46:07
SPEAKER_00: But I think that having that kind of like the weakness or the,
46:11
SPEAKER_00: you know,
46:12
SPEAKER_00: the Batman and Joker kind of vibe where it's like going back and forth between two,
46:16
SPEAKER_00: I think that's interesting.
46:18
SPEAKER_01: Well, I think the world is going to be saved in the area.
46:24
SPEAKER_01: Think about this for a moment.
46:25
SPEAKER_01: Like if it was just so easy, it's like the black and the white stuff where it's so simple.
46:30
SPEAKER_01: That is the type of stuff that impact investors love.
46:32
SPEAKER_01: There'll be some money in flow into the simple stuff and that'll go get done.
46:36
SPEAKER_01: But that's not going to scale.
46:37
SPEAKER_01: It's going to save the world, right?
46:39
SPEAKER_01: Air conditioning is the prime example.
46:41
SPEAKER_01: Anyone who has a net zero perspective says air conditioning is bad.
46:45
SPEAKER_01: Air conditioning is an evil technology because it puts a load on the grid.
46:48
SPEAKER_01: Our grid isn't net zero, so it's polluting.
46:51
SPEAKER_01: Ah, this is bad.
46:53
SPEAKER_01: And I'm just like, are you freaking kidding me?
46:56
SPEAKER_01: We need this.
46:57
SPEAKER_01: We need this to get another billion people to get access to air conditioning
47:01
SPEAKER_01: and we got the price down to be able to make this happen for the betterment
47:06
SPEAKER_01: of humanity.
47:08
SPEAKER_01: Let's go break some eggs.
47:09
SPEAKER_01: Let's break some existing supply chains and
47:12
SPEAKER_01: the existing AC compressor structure that's there and using so much electricity.
47:16
SPEAKER_01: Let's go find new solutions.
47:18
SPEAKER_00: Mm-hmm.
47:20
SPEAKER_00: What's also interesting is that if you're going to do anything that is disruptive
47:25
SPEAKER_00: to existing kind of companies and things out there,
47:27
SPEAKER_00: you have to be willing to play together.
47:31
SPEAKER_00: I don't know what the word is, coy.
47:33
SPEAKER_00: You have to be willing to be cunning, if you will.
47:35
SPEAKER_00: You have to go around the fences, break some locks.
47:40
SPEAKER_00: Because the existing people,
47:42
SPEAKER_00: if they cared about these things,
47:43
SPEAKER_00: if they were innovating these things, they would already have done it.
47:46
SPEAKER_00: But they're not going to.
47:46
SPEAKER_00: And sometimes you need their money.
47:48
SPEAKER_00: Sometimes you need their purchases.
47:49
SPEAKER_00: But sometimes you also need to eventually usurp them and become
47:55
SPEAKER_00: the international megacorporation of the future.
47:59
SPEAKER_00: That actually does things in a way that's going to work.
48:01
SPEAKER_00: And I think that this is why I find the founder journey so interesting
48:04
SPEAKER_00: because there's just like a bajillion...
48:07
SPEAKER_00: Things you have to worry about, the markets, your team, all these things.
48:10
SPEAKER_00: It's just for my own self.
48:13
SPEAKER_00: My company is super small,
48:14
SPEAKER_00: but I've been doing this now two and a half years for my own actual company.
48:17
SPEAKER_00: It's just so much fun.
48:18
SPEAKER_00: Yes, it sucks sometimes,
48:19
SPEAKER_00: but at the same time,
48:20
SPEAKER_00: when you take a step back and just look at it, it's actually pretty fun.
48:25
SPEAKER_00: Man, I love this job.
48:29
SPEAKER_01: I am actually,
48:30
SPEAKER_01: we said earlier in the podcast about how I'm not betting against human innovation.
48:34
SPEAKER_01: I am an obnoxiously optimistic person.
48:38
SPEAKER_01: I do think that the climate crisis will happen and that we will figure out ways
48:43
SPEAKER_01: to make sure that we can still live a good quality life at scale for the majority
48:47
SPEAKER_01: of humanity.
48:48
SPEAKER_01: Just because necessity is going to force us to do what humankind always does, which is innovate.
48:54
SPEAKER_01: We're going to figure it out.
48:55
SPEAKER_01: Now, my job, if I can accelerate that, I can...
48:58
SPEAKER_01: Make it happen sooner so it doesn't hurt so many people and it makes life
49:02
SPEAKER_01: a little bit better off and I get to make a whole bunch of money.
49:05
SPEAKER_01: It's a great world and boy, do I have fun doing it.
49:09
SPEAKER_00: Yeah.
49:10
SPEAKER_00: One thing I am really curious about is in your mind,
49:13
SPEAKER_00: why has somebody not already built this fund?
49:20
SPEAKER_01: I think because this was really shocking to me when I first went out
49:23
SPEAKER_01: and was looking around that I saw a bunch of adaptation,
49:27
SPEAKER_01: well, first, there aren't many adaptation funds.
49:29
SPEAKER_01: The ones who are there are really focused on the impact side of things.
49:32
SPEAKER_01: And there weren't very many people who are willing to go and live in that gray area
49:37
SPEAKER_01: and say,
49:37
SPEAKER_01: you know what, it's that pragmatic middle of It may not be perfect for society.
49:42
SPEAKER_01: I'm going to have to get beaten up with some of the people who are like,
49:46
SPEAKER_01: you're taking money and making money
49:48
SPEAKER_01: in this really harsh environment that's happening in the world.
49:53
SPEAKER_01: And in catastrophe, everyone else is suffering through a catastrophe and you're making money.
49:56
SPEAKER_01: You have to be able to stand in that and say, I get it.
49:59
SPEAKER_01: But you know what?
50:00
SPEAKER_01: It is still the right thing to do.
50:03
SPEAKER_01: And by the way,
50:04
SPEAKER_01: if you start looking and reframing how you look at the world,
50:07
SPEAKER_01: the fact that everyone is about to be forced to change what they do,
50:11
SPEAKER_01: Is a massive opportunity.
50:14
SPEAKER_01: If I told you,
50:15
SPEAKER_01: you're going to go into an existing market where every single buyer is going
50:19
SPEAKER_01: to reevaluate who their supplier is over the next 10 years.
50:24
SPEAKER_01: You would sit here and say, Ooh,
50:26
SPEAKER_01: like in sales,
50:26
SPEAKER_01: that's an amazing opportunity when a buyer considers who they're going to use.
50:31
SPEAKER_01: That's about the,
50:32
SPEAKER_01: is what is about to happen to all of society because it gets hotter
50:35
SPEAKER_01: and more volatile.
50:37
SPEAKER_01: So I think a lot of people.
50:39
SPEAKER_01: Climate sucked.
50:40
SPEAKER_01: They didn't want to accept the fact that adaptation is going to be needed.
50:44
SPEAKER_01: Now that we're in a world where adaptation is needed
50:46
SPEAKER_01: and more people are coming around to it,
50:48
SPEAKER_01: they need to go and live in the gray areas and actually try to do the work about
50:53
SPEAKER_01: where the opportunities are for private capital and stand in that space
50:59
SPEAKER_01: and be challenged in that space.
51:00
SPEAKER_01: But this is where for us on the flip side,
51:03
SPEAKER_01: this is why the returns are here and the impact is here.
51:08
SPEAKER_01: Right?
51:08
SPEAKER_01: But We're going to go and stand in that space and have a bunch
51:12
SPEAKER_01: of people tell me I'm just moving deck chairs around the Titanic.
51:17
SPEAKER_01: What I'm doing is useless.
51:19
SPEAKER_01: Great.
51:20
SPEAKER_01: You can think that.
51:22
SPEAKER_01: I think I'm improving the quality
51:24
SPEAKER_00: of the equipment.
51:24
SPEAKER_00: I think I'm going to keep doing it.
51:27
SPEAKER_00: I don't know if you're able or willing to share this,
51:29
SPEAKER_00: but were there any challenging conversations with LPs along the way that are around
51:36
SPEAKER_00: the idea that, hey, We agree, but the return timeline, we're not sure about that.
51:42
SPEAKER_00: We don't know how quickly these things are going to happen.
51:44
SPEAKER_00: And did that change how you had to raise the fund and the expectations around return timelines?
51:50
SPEAKER_01: Oh, we've had the conversation that The climate crisis isn't even happening.
51:54
SPEAKER_01: It's the biggest hoax ever.
51:56
SPEAKER_01: Then we've had the conversation around adaptation isn't a big enough marketplace
52:01
SPEAKER_01: and it's uninvestable,
52:03
SPEAKER_01: which if you think adaptation is seawalls and big dikes
52:07
SPEAKER_01: and these big massive government infrastructure projects, I get it.
52:10
SPEAKER_01: I get why you're saying you think it's uninvestable.
52:13
SPEAKER_01: And then we try to sit here and say,
52:15
SPEAKER_01: what you have to realize is you want to sell the product into the seawall
52:19
SPEAKER_01: to maintain the seawall.
52:21
SPEAKER_01: That's where there's going to be investable opportunities because of actual cash flows.
52:25
SPEAKER_01: We're lowering costs, raising revenues.
52:27
SPEAKER_01: This is part of where the expertise happens.
52:30
SPEAKER_01: I think there is...
52:32
SPEAKER_01: So there's no doubt I hear all of these different things.
52:34
SPEAKER_01: The other one I can remember hearing is someone basically saying,
52:36
SPEAKER_01: well, it's inevitable that it's going to happen.
52:37
SPEAKER_01: Why do you need to fund around it?
52:39
SPEAKER_01: I'm like, Yeah, but someone's still got to go do it.
52:44
SPEAKER_01: So we hear a lot of these things,
52:46
SPEAKER_01: but this is one of those spaces where we have our view of the world.
52:54
SPEAKER_01: My job is to have a crystal ball, have a view of the world.
52:58
SPEAKER_01: Where is the world going to be five to 10 years time?
53:01
SPEAKER_01: Demand will shift.
53:02
SPEAKER_01: AI companies will not be able to produce cash.
53:05
SPEAKER_01: People are going to go towards more physical products and services.
53:09
SPEAKER_01: This is our view.
53:11
SPEAKER_01: And the LPs who get behind that, great.
53:16
SPEAKER_01: That'll work.
53:19
SPEAKER_01: I can't sit here and shift for every single LP just to try to make the money in the short run.
53:23
SPEAKER_01: It will be hurting me in the long run.
53:26
SPEAKER_00: Yeah.
53:26
SPEAKER_00: I do always find it funny and just an interesting perspective.
53:31
SPEAKER_00: If you were somebody who's raising a fund and you have the most different idea
53:37
SPEAKER_00: or perspective on things, you have the most alpha idea.
53:42
SPEAKER_00: How are you going to really convince other people to do that?
53:43
SPEAKER_00: Because if it is so alpha,
53:45
SPEAKER_00: it's so different,
53:46
SPEAKER_00: then you're going to have to really scour the earth to find the people
53:50
SPEAKER_00: who are willing to write the check unless they just happen to know you
53:52
SPEAKER_00: and trust you, right?
53:53
SPEAKER_00: Like, yeah, sure, whatever.
53:55
SPEAKER_00: That's just like as an aside.
53:57
SPEAKER_00: But what I would like to know is kind
54:00
SPEAKER_00: of wrapping things up here is what is your most controversial opinion about
54:04
SPEAKER_00: the tech world right now?
54:07
SPEAKER_01: I mean, I just said AI is a complete bubble that's going to be completely uninvestable.
54:11
SPEAKER_01: Software as a service is going to be eaten by AI.
54:14
SPEAKER_01: So like, can't touch any of this.
54:16
SPEAKER_01: Yes, there's been some exits recently in the climate space in this area,
54:21
SPEAKER_01: but you actually look at the exits and it's like,
54:23
SPEAKER_01: you know, $80 million of capital went in for a $250 million exit.
54:28
SPEAKER_01: Sure, maybe the first capital in did okay,
54:31
SPEAKER_01: but somewhere in there, the returns were not VC style returns.
54:35
SPEAKER_01: So that's one thing.
54:38
SPEAKER_01: Net zero being the completely wrong KPI.
54:42
SPEAKER_01: Everyone who's sitting here on this view that we have to save the planet at all costs.
54:48
SPEAKER_01: The planet's going to be here well after us.
54:51
SPEAKER_00: What are the things that you're most excited about over the next 12 months?
54:58
SPEAKER_01: I think there's Some of the companies that I'm looking at right now,
55:02
SPEAKER_01: especially around grid resiliency or something that we're exciting about,
55:07
SPEAKER_01: we just have a view that says as much as people think it's going to be like
55:12
SPEAKER_01: a distributed solution at scale, we don't think that.
55:17
SPEAKER_01: The reason being is that you're going to see governments who are spotting a lot
55:22
SPEAKER_01: of these projects for power generation.
55:26
SPEAKER_01: They're still going to start enforcing that you have to buy their power and pay
55:30
SPEAKER_01: for their power, pay for the connection fees and things of that nature.
55:33
SPEAKER_01: And so that means we're going to see still centralized power generation plus grid.
55:37
SPEAKER_01: And then, but the grid's going to need a lot to be able to be able to have resiliency.
55:42
SPEAKER_01: So that's a place we're still very bullish on the cooling side of is a place
55:50
SPEAKER_01: to be bullish on,
55:51
SPEAKER_01: especially things if you can combine like cooling and supply chain,
55:56
SPEAKER_01: finding ways to be able to transport things so that way we don't need so much energy
56:02
SPEAKER_01: to do this.
56:04
SPEAKER_01: I think we're getting into the world of the fat tails being the things
56:09
SPEAKER_01: that really impact things.
56:12
SPEAKER_01: And so continuing to sort of think about it's not just Optimization
56:18
SPEAKER_01: at every single penny,
56:20
SPEAKER_01: but being able to really start strategically winning because of resiliency.
56:25
SPEAKER_01: And then that shift in cash flows.
56:29
SPEAKER_01: You saw it this summer.
56:30
SPEAKER_01: Unfortunately, our thesis is proving right.
56:34
SPEAKER_01: It was a brutal summer.
56:35
SPEAKER_01: Heatwaves, forest fires, droughts, floods.
56:40
SPEAKER_01: It was brutal.
56:40
SPEAKER_01: The amino effect.
56:42
SPEAKER_01: Yeah.
56:45
SPEAKER_01: It'll provide more tailwinds for our companies.
56:48
SPEAKER_01: Yeah.
56:49
SPEAKER_01: And it's also a feed.
56:50
SPEAKER_00: Yeah, absolutely, man.
56:51
SPEAKER_00: Well, I'm really fascinated by what you're doing.
56:53
SPEAKER_00: I think this is really interesting.
56:55
SPEAKER_00: I encourage people to go check out what you're doing.
56:57
SPEAKER_00: What's your website?
56:58
SPEAKER_00: Where can people go learn more?
57:00
SPEAKER_01: Website's aucap.vc.
57:04
SPEAKER_01: And so that's the website there.
57:06
SPEAKER_01: I think the best one is just hook me up on LinkedIn.
57:09
SPEAKER_01: I probably publish three or four times a week there trying to continue to build
57:12
SPEAKER_01: the ecosystem, help people out.
57:15
SPEAKER_01: It really is something there where our view is...
57:19
SPEAKER_01: Our thesis isn't so much of the secret sauce.
57:21
SPEAKER_01: It is the ability to go and execute on it and find the companies
57:24
SPEAKER_01: that are doing things differently and helping them commercialize.
57:27
SPEAKER_01: So we try to readily help people there.
57:31
SPEAKER_01: And I think the big one is for LPs who actually want to come along this journey.
57:37
SPEAKER_01: If you want to come and think about how do you allocate into the space and sit down
57:42
SPEAKER_01: and have conversations about this,
57:44
SPEAKER_01: there's nowhere else that you're going to be able to find this real focus on
57:48
SPEAKER_01: where cash flows are changing because the weather changes and therefore where
57:53
SPEAKER_01: the investable opportunities.
57:56
SPEAKER_01: That ability to use capitalism to drive adaptation,
58:01
SPEAKER_01: that is where we're sitting better than I am.
58:05
SPEAKER_00: Absolutely, man.
58:06
SPEAKER_00: Well, it's been a pleasure having you on.
58:07
SPEAKER_00: I appreciate this.
58:08
SPEAKER_00: I'm excited to see – well,
58:10
SPEAKER_00: I guess it's hard to say I'm excited,
58:11
SPEAKER_00: but I am excited to see some of the innovation that comes out in this space.
58:14
SPEAKER_00: But you get what I mean.
58:15
SPEAKER_00: It's definitely interesting to see what you're doing.
58:18
SPEAKER_00: I'll be definitely following along a journey.
58:20
SPEAKER_00: I encourage everybody else to do so.
58:21
SPEAKER_00: So thanks so much for coming on.
58:23
SPEAKER_00: Thank you.