Devrim Celal – Kraken

David Hunt (00:01.832)
Hello, Devon. Welcome back to the Leads in Clean Tech podcast.

Devrim Celal (00:05.667)
Good morning David, it’s good to be back and good to see you.

David Hunt (00:08.87)
Yeah, I was just saying before that it was January 2019 pre-COVID in an office in Manchester. We first sat down when you were an investor and CEO of Upside Energy. Feels like… Yeah, absolutely. And in some ways it clearly was, or certainly in business context it was. So there’s a lot that we want to get through. So maybe slightly unusually, I’ve made a few questions or themes to run through because, yeah, we have…

Devrim Celal (00:19.34)
Yep. Feels like it feels like a lifetime ago.

David Hunt (00:36.798)
40 minutes ish when it could take four weeks and still be a good conversation. So perhaps let’s start with a little bit, because most of our audience will be familiar with Kraken, but maybe just as a bit of context, you can tell us a little bit of what Kraken has become and is. And obviously then we can perhaps go back into how we got to this place. So perhaps just then a helicopter view of the company that you’re now involved with and continue hopefully into the next decade with.

Devrim Celal (00:40.363)
Hahaha

Devrim Celal (01:03.84)
Absolutely. So look, we are, describe ourselves as a operating system for the, for utilities. And the, the analogy is very similar to the one that you transcribe to Android or iOS or Windows or Mac, Mac operating system, where under the hood, there’s a set of capabilities that’s really targeted for software developers to write software more efficiently. But

Above the lid, we’ve got two families of products. One family addresses the utilities relationship with the customer. So in more traditional terms, it’s a customer relationship management system. It is a billing system. It’s a system for managing meter data for settlements and all forms of channels of interacting with the user from web app messaging.

Family of products addresses a number of segments. It’s residential, which is where we started. It is now commercial and industrial customers as well. We’ve recently in Australia with Essential Energy started network billing. That’s the capability for network operators to bill retailers and generators who use their network to transport electricity. And we’re entering adjacent industries of water and telco. So the principle is customer management.

70, 80 % the same code based, slightly configured and adapted for each use case within that. And then the second family of products are optimization products. And it’s what we talked about five years ago. It’s optimizing consumer devices, whether these are electric vehicles, heat pumps, batteries, to give consumers what they want, which is cheap range, if you’re on an EV without the complexity of when is it cheap to charge, just managing it for them, or

David Hunt (02:37.064)
Mm-hmm.

Devrim Celal (02:59.594)
if it’s a heat pump, making sure the home is comfortable when they get home, but at good value. The other part of optimization is very large scale assets. So big batteries, solar, wind, to make sure the owners of those assets make the best possible return on their investment. And the final one, which sits sort of aside is optimizing workforce.

And that’s field technical workforce. So let’s say you reach out to your utility and say, I would like to have a heat pump to make sure we find the right engineer technician who’s closest, has the right certifications to do the job. Link you two together so you know that the person is on the way and is coming towards you like you would with Amazon. And then when they get to your home, give the person all the tools they need to do the job well.

but also recorded in such a way that the next person could pick it up as if they had done the job in the first place. So two families of products, one for managing consumer relationships and billing, the other for optimizing devices. Now, what has happened changed in the last five years? We are now on the customer management side, serving, contracted to serve over 70 million homes in over 10 countries around the world.

On the optimization side, we are monitoring over 600,000 devices, collectively just shy of six gigawatts of power. Now, power is an interesting unit. It’s a lot. I think these days, base load is about 30 gigawatts, so 20 % of UK’s power needs is being optimized through Kraken. But one metric that really strikes for me is the consumer flexibility part of that.

it’s about three to four gigawatt hours of managed charging. So that’s the equivalent of a daily use of a city the size of Manchester. And if you take that kind of load and shift it around, you can always find the greenest hours, the hours when the network is not congested, which means you maximize renewable generation instead of curtailing it.

Devrim Celal (05:19.174)
and you increase the investment, sorry, you avoid unnecessary investment in grids because you’re not just building grids for a peak time, you’re spreading it all around. So that’s a sort of a long or maybe short introduction to what’s happened in the last five years.

David Hunt (05:33.438)
It certainly evolved significantly and obviously I enjoy the benefits of charging on the octopus platform as well. So let’s perhaps take a bit. What prompted me to reach back out to you Devrim was you made a post, I think about a month ago, sort of saying a 10-year journey, which obviously was early into upside and then through the acquisition and the evolution since then. So clearly we haven’t got time to go through every aspect of that, but maybe you can just share.

some of the highlights really of that decade. I think you phrased it as not one journey but several distinct phases. Perhaps looking back which phases were perhaps the most hardest emotionally as well as strategically for you.

Devrim Celal (06:23.742)
think about what was hard early years, it was the responsibility of making sure there was enough money in the bank to make payroll. Now we were fortunate enough we weren’t, apart from maybe during COVID, we weren’t at the phase where managing that sensitive balance was

the biggest problem. were always able to raise money far ahead or have clear sight of money coming in far ahead that we didn’t stress over that. But that was something that kept me up at night because when you’re in a startup, you’re raising money every two years. Every two years, you’re raising about two years of money. So there’s always that what if risk, what if the next one doesn’t come through. When we did the acquisition,

The biggest thing on my mind was that of the 26 people who came across, how do we make sure that they settle in and be happy and productive and stay with the business? And I think I mentioned that in the post as well, all 26 are still with Kraken today, which is unheard of five years down the line. Nobody’s here for the vesting period or earn out. It is just what we love doing. And interesting, there was one person who

David Hunt (07:30.142)
Yeah, it’s incredible.

Devrim Celal (07:41.742)
head left just before the acquisition who’s come back as well. So I could almost say 27 are still here. And now it’s really about how do we make sure that we make the right decisions with the product? Now we have not changed. We’re still a very agile institution. We try ideas quickly and if they fail, we change them, we drop them and move on to the next thing. But sometimes you start making bigger decisions like going into a new country.

And then so similar problems, are we doing it right? And if we’re not, how quickly can we realize that it’s strong and change direction? But sometimes the steps you take are increasingly bigger just by the function of the scale that we’re in and the things that we’re trying to achieve next.

David Hunt (08:29.222)
Yeah. It’s an incredible journey. That 26 people coming across is unheard of. it was something I refer back to because Coach, we talked about quite a lot on the first podcast. And by the way, people, I’ll put a link in this so you can listen to the first one. was, I seldom listened back, but it was a really good one. if you have the time, that. Looking again back to that journey, your role has obviously evolved significantly from this founder with a small team, wearing a payroll.

been there, done that, it’s not easy to do. And clearly now in a global entity with gigawatts of responsibility as you talked about, perhaps you can share a little bit of how you’ve changed as a leader during that period of time and what is important to you now that perhaps has always been so, or perhaps things that have changed in that period of time.

Devrim Celal (09:19.756)
I’ll say two angles, one slightly whimsical. And actually true. One of my ambitions in life had always been to have a job that I can describe to my grandmother. starting with computers wasn’t easy for her. That was my first job as a software engineer of programming. Then I became a management consultant and that was…

I’m not sure if I got the perfect description for that. And now I am chief flexibility and marketing officer. Unfortunately, I lost my grandmother a couple of years ago. She tried till 97 and I failed her. And she would have seen the humor in that. the biggest, two big changes for me. One, I took on the responsibility of…

helping lead the marketing functions for Kraken. And there was a bit of a challenge. I hadn’t done marketing in over a decade. I was positioned to do it because I was one of the few spokesperson for the business. So evangelizing the product, the business and helping spread the vision. And it was also partly because Kraken,

had benefited massively from the Octopus marketing branding machine. And it was how do we take what we learned from that and build our own and our persona and keep pushing that. So that was completely new and it took a little bit, it’s been a year, I’m still settling in, but we’ll come back to that. The second part, both across marketing and flexibility, which is the residential and large scale asset optimization, it was about

either promoting or bringing in new leaders to actually do the job. So in marketing now we have two brilliant people managing both the general marketing, so strategic comms brand field and product marketing and customer lifecycle. And that’s settling in quite nicely. the flexibility side, it’s Charlotte Johnson.

Devrim Celal (11:40.844)
many of the listeners may know, who manages the generation scale assets. And Wren White, who had a history at Octopus and Tesla before, who naturally fit into doing the residential flexibility. And the biggest change in my role is learning to stay out of it. And actually giving license to those four individuals to say, just kick me out.

tell me where I need to be to support you to do the best job that you possibly can and even better if I could help you with. So that requires me to be more patient, allows me to think longer term and has had to develop more of a reflex to coach and guide as opposed to step in and do. And that’s a really hard one. Cause when you come from a ground up entrepreneurial style,

The key value is roll your sleeves up and get involved. Whereas now it’s actually not anymore. It’s watch, have good telemetry to understand what’s happening, what may be happening, and guide and train as much as I can. Be a friend, sometimes be a critical friend, but a friend nonetheless to those four individuals.

David Hunt (12:58.044)
Yeah, that’s such a hard thing to do. should say when you’ve, when you’ve been on that, where you by definition have had to wear all of the hats and do all of the things. I think it’s one of the many great quotes from Steve Jobs was don’t hire great people and tell them what to do. It’s easier said than done as you’ve just alluded to.

Devrim Celal (13:15.256)
I agree with that. I didn’t know that before I may use it once in a while.

David Hunt (13:20.03)
So looking back again to those early days, one of the key things you said at the end of the podcast was a reflection that, and I made a note here, don’t be afraid to doubt your strategy. And one of the things when we were talking, obviously, Upside Energy was started out as an aggregation business and obviously evolved into a software business, which then was obviously acquired. So perhaps again, some learnings in terms of both for then and also now, I’m sure the same applies, not being afraid to doubt.

Or how do you sort of look at the future in our market, which is still evolving at a crazy pace and, and, always meant many challenges, whether that’s geopolitical or technical, just, yeah, maybe just a repeat or a revision of that reflection of don’t be afraid as a founder or a leader to doubt your strategy or to doubt yourself.

Devrim Celal (14:10.286)
And David, you’re a brave person to go back and listen to your podcast recordings. I never do. Yeah, I often refer to that as don’t fall in love with your strategy and get lost in the details of it. I think it’s about being vulnerable at times and giving people around you the license to criticize, have the right to speak out.

David Hunt (14:14.65)
It’s not easy, no. I seldom do.

Devrim Celal (14:39.596)
I think we’ve done that quite well. The upside journey was filled with pivoting, looking, saying this didn’t work, but what have we learned? What can we do differently? Today, it’s still the same. We’ve done, about a year ago, we had Amir Orat come in as the CEO of Kraken.

Amir had a number of mandates, one of which was set up Kraken to become a completely independent business and exist on its own, which required questioning a lot of the things that we were doing at the time and reforming businesses, reforming ideas for independence and massive growth. So scalability. Along that journey, we questioned quite a few things. Back in the

early days of crack and flex, so within the octopus energy group, we were looking quite broadly at what other parts of the energy system do we want to be active in? And we had done sort of acquisition, we, or more accurately, we had bought assets of a Swiss business out of administration. It was called Depsys. They had this incredible technology for…

monitoring the secondary substations, plug and play, so nothing had to be ever shut down, that gave them the intel to estimate medium, what’s happening in the medium voltage, fault detection, fault management, and all the things you would want to do if you want to get a lot more out of your distribution network. It was a hardware play. And when we were rethinking the strategy, we made a big change. said the hardware…

probably isn’t where a enterprise software as a service business needs to be in the long term. And we had a lot of reliance on hardware for monitoring generation assets, monitoring the low voltage network. So that forced us to rethink of how could we continue being as impactful for those domains, yet do that without designing, manufacturing, installing and managing our own hardware tech.

David Hunt (16:35.518)
Mm-hmm.

Devrim Celal (16:58.026)
And I think we’ve come through. We’ve managed to build a model now where we still design the hardware on the generation flexibility side, but we don’t assemble it, we don’t install it, we don’t manage it. And we’ve been able to build softwares of tooling and third-party partnerships to manage them. it’s a massively scalable business, allows us to go into new countries a lot faster because we don’t need to build that.

David Hunt (17:09.96)
Mm-hmm.

Devrim Celal (17:26.882)
technical capability in this geography. On the grid side, we’ve actually come up with something quite unique. And I don’t think we would have ever done that if we had not challenged the previous strategy. So we stepped back from the hardware design manufacturer installation business. But what we realized is it’s a little bit like the model of Google Maps. I’m going to take you on a tangent here. If you think of Google Maps, what they’ve done is they’ve took

the public information of transportation. So where are the roads? Where’s the public transport lines? And overlaid onto that, the user generated content, which was effectively looking for my phone. There it is saying, if you install Google Maps on your phone, in exchange, I need to have, or I would like to have your location data. And they gave something back to us. They said, well, if I know where you are, I can tell you where the best coffee shop is or.

where you need to get to. But what they really got out of us is our motion data and our collective motion data. So that as we move, they see how much the people are moving on the same road at what speed. And they ingested other sources of data as well to complement that. And that gave them congestion mapping, which allowed them to do incredible logistic data. You can go from A to B, it’ll take you half an hour on the tube.

Taxi will take 40 minutes and one has different carbon to the other. And through this practically free user generated content, they can build the best congestion maps of transportation. And when we said, if we don’t own a hardware that we can actually configure to give us the data we want from the distribution network, how do we replicate that? And we went back to a similar model and said, look, we’ve got 600,000 plus devices.

sitting at the edge of the network, pinging us from 20 times a second to once a minute data. And we know where they are, or if they’re cars, they tell us where they are. We know how much power they’re importing or exporting. Some of them tell us about reactive power they’re observing, frequency, temperature, and that accounts for about 12 billion packets of data a day. That’s 140,000 every second.

Devrim Celal (19:54.284)
And we start saying, if we’ve got that rich data, of course, it’s not every meter on the system, it’s not every substation, but it’s enough to start interpolating, extrapolating the as-is state of the distribution network, which tells us how loaded it is, allows us to forecast how loaded it may be in the future. And if you can forecast congestion, then you can put a value to it. And if you have a value to it, you can optimize away from it. And suddenly,

David Hunt (20:07.443)
Yeah.

Devrim Celal (20:20.558)
increase the usage capacity of the distribution network. So I took that as an opportunity to give you another snippet of what’s happened recently, but we would not have gotten there unless we seriously questioned a big investment we had done and look for alternative ways of delivering the same impact without having the hardware infrastructure in place.

David Hunt (20:32.361)
Yeah.

David Hunt (20:39.23)
Yeah, that’s a good analogy. By the way, had Yuri Levine, who is the founder of Waze, was acquired by obviously Google and Yuri is a great guy. I met with him in Prague and we did a podcast. But jumping back to the original point, the balance between not second guessing yourself, because again, as a leader or a founder, you need to have conviction and focus and to plow through things to a degree and to some degree, not listen to noise, your own or external. But on the flip side, you do need to

Devrim Celal (20:44.695)
brilliant.

David Hunt (21:08.434)
I should say to some degree to second guess yourself. Did you have any either personal or practical tools around you to try and get that balance between still having a clarity and a conviction of direction of travel, but still being able to question that along the way.

Devrim Celal (21:21.678)
So all the beautiful traditional tools in analytics, yes. But what I find that works really well is having different groups of people I talk to. So there is my team, immediate team, and with the senior leadership have open debate about questioning, but then people…

who know enough about me and what I’m trying to do and what the business is about, who are not involved in the business, to say, hey, here’s a new set of facts that I’ve learned, but I’m so deep into it, let me tell you about it and you tell me what you think. And even through that process of conversation, I myself often see the flaws.

or incremental new opportunities in the strategy to help me think differently.

David Hunt (22:17.394)
just while calculating the thoughts.

Devrim Celal (22:20.546)
Tots to people who are outside, just devil’s advocate or that white board or sounding board.

David Hunt (22:26.536)
Yeah. Interesting. Cool. Thanks for sharing that. So again, on the podcast at the time, you’re about to do a B round. think we were talking about the VC community. We were talking about strategic investors and those dialogues, which you were literally having at the time. and obviously that evolved into the acquisition from, from, from octopus. So again, perhaps you can, share some, some thoughts between how you went from, yeah, that, that, that process of looking at investment and scaling the business through investment.

Devrim Celal (22:35.032)
Yep.

David Hunt (22:56.574)
to deciding, okay, and I did this myself not long ago, to allow yourself or to choose to be acquired. So yeah, how did you, I guess, mentally deal with that and also share with the team that the direction, at least not so much the direction of travel would change, but the vehicle would change.

Devrim Celal (23:16.238)
Yeah, was. It’s easy to think back and reflect and make sense of everything now. It wasn’t always apparent at the time because shortly after we spoke, it was locked down. March, March 2020. We did have a term sheet. I believe we already had a term sheet at the time or we got it just shortly thereafter.

David Hunt (23:31.688)
Yeah, very soon. Yeah.

Devrim Celal (23:44.642)
that term sheet had one signature. was one of our existing investors leading the round. And we had a party who was very interested and they eventually ended up signing the term sheet. And actually, remember the dates now, that was in February. So was just after we spoke.

It was one of those things you build up towards these events. You meet with investment committee members, you pitch, you pitch to all of them, you answer all the questions, and you’ve got feeling that it’s going well. And there was one person who was a champion within that institution and he felt we were done. I remember sitting at WeWork at our office afterwards and waiting for the result and I got the call and the call said, we’ll sign, but.

you need to have a third and strategic investor to validate the business model for us. And it was one of those points where the runway was a matter of weeks. We were in just around the corner from lockdown and we didn’t know what to do.

So I went back to the board with the news and said we need to do a bridge round from existing investors. Otherwise, there is no way we can go and find a strategic investor and get them across the line. So we did do that. And that’s when I started going back to market and saying to strategics, here’s the term sheet. We got existing investor validation. We got a new investor validation. We just need you guys to cross the line. And Octopus had recently raised

their sort of unicorn round from origin. And we already knew each other quite well, personally. So I engaged them as part of a number of others. And it was interesting doing a deal during lockdown, because the initial part you couldn’t meet. And when you could meet, you could meet with only one other person, not from your household, in a public space, in a park, but you couldn’t be too close to each other.

David Hunt (25:25.886)
Mm-hmm.

Devrim Celal (25:51.438)
So I remember meeting with colleagues from a colleague from octopus energy at St. James’s park across from cabinet war rooms, sitting at a park bench and feeling very clandestine talking about a deal. Each one of us on our laptops trying to figure things out. But that was originally an investment round, but as we got more and more into it, it became quite apparent that even if they did do an investment, they would only do it with a single purpose in mind. And because they were also well funded at the time,

David Hunt (26:08.392)
Mm-hmm.

Devrim Celal (26:21.518)
the decision quickly became, why don’t we just jump to the next three years here and go down the acquisition route? And that required aligning a shareholder register of about 30, 40 individuals and institutions. The individuals were all, they were a pack, so that was slightly easier to navigate, but again, needed to talk to all of them. And it took us a number of weeks, short due diligence period, and it was done. By then, quite a few of the team members knew.

David Hunt (26:28.254)
All right.

Devrim Celal (26:51.032)
that this was coming. And you can imagine that we had to furlough people at the time to make the money last a little bit. So it was hard for everyone. But when the news came and I shared with the whole team, was all overwhelmingly positive.

David Hunt (26:57.523)
Hmm.

David Hunt (27:06.142)
Yeah, yeah. Great. I mean, again, heard Greg on the podcast and the post pass as well. And love, obviously all he’s achieved and octopus have achieved along the way, which is again, a unique story, I think, and one which is still evolving, which perhaps leads us on to the next sort of a phase, if you like, of what is the next chapter for for crack. you’re obviously moving from obviously upside to the acquisition, to the growth, to now becoming you alluded to a standalone business. So

How is the future looking as an independent company? Clearly you’re going to be still part of, I guess, the octopus group, but how is the future and what part are you looking forward to playing in the next evolution of the business?

Devrim Celal (27:48.974)
So the separation, the merger, independence, there’s many names floating out there, but independence is almost done. look, operationally, we have been independent for a long time. Separate legal entities, offices in different floors, tech stack, shared services are all now separate. The only thing that remains is the shareholder register. And we’re fairly advancing that, I expect in the very short term.

that will be finalized as well and we’ll be announcing it to the whole world. The moment that announcement goes out, and it may take a few months because some of our investors are regulated, they’re publicly listed, so there’s some approvals on their side. But once that’s done, Kraken is independent and not part of the Octopus Energy Group anymore. Octopus Energy may still be a shareholder, a small shareholder in that, but completely independent.

And even if they’re shareholder, will be limited information, rice, snowboard, seed, so on and so forth.

Devrim Celal (28:55.788)
I’m going to repeat this last piece to make sure I get it right. I’ll start from your question.

Devrim Celal (29:07.874)
We have always been a separate entity. Legally, we’re separate. Over the last year, we’ve separated all offices around the world. Technology that we shared is separate and all the shared services. So for all practical purposes, Kraken is an independent entity. The last piece of that puzzle that remains is the shareholder register. And that’s fairly active and advanced over the course of the next few months.

we will announce that that’s completed as well. From that day on, it’s all the challenges of being an independent business. We are cash positive and on a given day depending on exchange rates, but that’s sort of almost a strategic decision, but we are growing. So to fuel that growth, we may go to markets to raise money and it will be almost the first time we do that as solely as Kraken. Fortunately, we are in very good financial health.

Back in May, we announced that we had surpassed half a billion in contracted annual recurring revenue, that we were cashflow positive. We have been building up the team by bringing in people like Tim Wan, who was the CFO of Asana prior to us, with a lot of fundraising experience. So I think financially, we are in a solid place and will continue to be.

David Hunt (30:23.55)
Uh-huh.

Devrim Celal (30:33.198)
From a growth perspective, we’ve grown 4x in the last three years, 80 % plus just in the last year. I expect that growth will continue as well. The real questions are around, I mentioned earlier, we’re making some early bets into water and telco. Those are growth industries for us. We’re looking, we’re.

just made our first entry into the US. We announced it in May with National Grid USA with six and a half million meters on the northeast of the country. Now we’re looking to build on that and grow a larger business in the US, which actually is one of the most complex markets because it looks like a single country, but when it comes to electricity, it’s quite fragmented and it’s fragmented with vertically integrated monopoly. So you’re selling

completely new, almost completely new each time. We’re looking to grow in Asia Pacific, particularly Australia and Japan. And Europe, we already have a strong footing with some really important flagship customers. Now it’s the growth phase for our European presence.

David Hunt (31:47.059)
Yeah. Growth is always really challenging for, again, it’s better than your 10s, but it’s no less challenging. So perhaps touching a little bit on that, and also we talked a little bit about culture also is over the 10 years of the journey, what have you seen in terms of what matters? Because you’ve highlighted a few and clearly there are many very talented individuals that you work for and with you.

But in terms of what matters more, that individual brilliance or the team culture.

Devrim Celal (32:20.374)
Culture is important. think octopus and kraken.

Generally people accept that we have a unique culture that has helped this very fast growth and innovation and our growth has been fueled by the innovation that we’ve been able to achieve. When you are Kraken and you’re growing at the pace that we are, suddenly maintaining the culture is also a challenge.

because at any point in time you can look around and say the people around me, more than half of them have been here for maybe less than a year or two. So two things become quite important. One is your hiring process to make sure that when we hire, we hire the right people who believe in our mission, who are willing to live by it and make decisions according to it.

David Hunt (33:06.898)
Yeah.

Devrim Celal (33:25.902)
And if you think about our mission, historically we’ve never had financial targets. We never said we’re gonna be the biggest or the baddest. We usually have societal targets. And today when you look at Kraken’s mission statement, it will be to put a green dent in the universe by accelerating the transition so we can positively impact a billion lives.

And that helps you give a lot of guidance on the way you run your business. But most importantly, I don’t know if you’re familiar with the Obliquity. John.

David Hunt (34:01.65)
No.

Devrim Celal (34:07.202)
We’ll refine this bit. The name escapes me right now, but University of London professor talks about businesses who have set themselves societal goals and how well they perform financially as well. So setting up societal goals doesn’t mean you have to be a not-for-profit. You could still be a sound financial business. And in our case, we do have a societal goal that helps inform our culture and how we live, how we behave, but still…

David Hunt (34:18.376)
Mm-hmm.

Devrim Celal (34:37.196)
has enabled us to build a financially very successful business. So culture is important and as part of that, hiring is key, hiring the right people. another book is Collins and Porras, From Good to Great, talks about having the right bus, the right driver, but the right bumps on seats. So that’s the hiring part of it. The second part is that regular beat of the ceremonies of

How do you communicate that culture and demonstrate the behaviors around that? And we still keep to a family dinner culture, which every other week at 4.15 Friday, leaders of the business and others would stand in front of the whole business and talk about what happened that week, quite openly, with the good and the bad and the ugly. And that open sharing and communication

reinforces the culture that we’re an open place, that’s obsessed with clients, that cherishes autonomy and initiative taking and that drive. If you can balance those two, hire the right people and then enable them and encourage them to do the right things that we value as a business, that’s how you sort of maintain

existing culture and keep transmitting it to the new people who come on board to make sure they are, I say this quite carefully, indoctrinated with reason.

David Hunt (36:13.458)
Yeah, yeah, yeah. Obviously that’s my domain and fascinates me and we could talk for hours just on that topic. But again, it’s just the hiring of the A-Players clearly is critical. the communication, I think, is where a lot of founders sometimes struggle. I think that you articulate the mission and everybody knows that from day one. That’s why they join and there’s a truth to that. But then…

having to on almost on a daily, certainly weekly fortnightly basis, having to remind everybody what is the mission, what is the journey, why are we doing this? And sometimes when there’s a million things going on, particularly for a smaller business, that gets lost sometimes. So think the town halls or however you do it, quarterly retreats, whatever the methodology you use, but that continually reaffirming what is the culture and what is the purpose and what is the mission, I think is something which often falls by the wayside.

Devrim Celal (37:03.308)
Agreed. And just to close the loop, it’s John Kay, the author, and the book is Obliquity. So if anyone is interested in that, strongly recommend it. think you touched on it quite well. It’s not just a family dinner ceremony. It’s the weekly leadership team meeting. It’s the ask me anything, where anyone can ask any question. We don’t curate them. It gets answered by Amir as the CEO, together with one of the executives, quite openly.

David Hunt (37:09.298)
Okay.

Devrim Celal (37:31.598)
It’s also open to questions in real time as well. Retreats for senior leaders, a broader set of leaders, offsights for people in certain disciplines or business areas to continuously reinforce the message.

David Hunt (37:49.407)
Yeah, no, critical to do that. And that’s to say, it’s an investment. Because again, oftentimes, particularly for smaller companies, there’s a cost involved if you’re doing off sites and retreats. But I think you need to that as an investment. Well, all hiring is an investment. All things around people are an investment, right? So it’s having that mindset of not what does it cost, but what’s the knock on investment from doing these things. As we’ve been talking a long time, we could go on a million years. I want to talk to you little bit about, obviously, you’re still

A long way to go, but legacy is a motivation after 10 years can be a challenge if you’ve been doing not the same thing clearly, but been in the space of doing something very similar for this period of time. how do you view and how do you keep motivated on this mission through all of this journey and all of the challenges and of course the upsides and forgive the upsides of everything that’s happened as well. Yeah. How do you see your

next few years, what keeps you motivated and what are you looking forward to in a business context in the next handful of years?

Devrim Celal (38:53.336)
So I don’t know if we spoke about this last time with it, but in a past life, and unfortunately I say in a past life, I wish I could bring it back, but I used to be a ultra-distance runner, running distances of 50, 100, 200, 300 kilometers at a time. And the principle I used to talk about, and many people share this, is you hardly ever look forward.

David Hunt (39:04.264)
Thank you, R.S.

Devrim Celal (39:22.862)
because it’s daunting until you’re fairly close to the end, then you know where the end is and then you get driven by that finish line. But you should often look back and say, look what I’ve already done. Imagine what else can I do? So I think when I wrote that LinkedIn post, the motivation was a little bit like that. I can look back and say, this hasn’t been just one thing. I haven’t been doing the same thing for a decade. That would have been utterly boring.

but I’ve done lots of different things and there were different challenges, different joys along the way that I can, in my mind, put them into each stages of a run that had its own unique ecosystem of joys, people, objectives, achievements, failures. When I look forward, I try to think quite short term, immediate things that I want to achieve, but then have bigger and longer steps to look forward to.

So the immediate next step is separation and making sure that we’ve got our own brand. We don’t lose it. We didn’t stray too far from where today because it’s fairly strong. It’s very well known and regarded and understood to make sure that the businesses that I support are achieving the objectives they can.

Then on the very long run, we built a business that can truly impact the lives of a billion people. And maybe in a few years time, we start talking about multiple billion people. And we look at, you know, maybe achieving that requires us to do things very differently to the way we are today. Maybe it’s not just energy and we look at where they are, water and broadband, and maybe there’s other things. So those are the kinds of things that drive me. A little bit of the unknown and what could that be?

David Hunt (40:48.829)
Mm-hmm.

David Hunt (41:14.236)
Yeah. The important things I was reminded by the run in partly because I really listened to the podcast, but also one of my colleagues, Steve did his first ultra recently and the after the fourth, he did his fourth marathon, then did an ultra very soon afterwards. So, it does take that mindset talking to him about just how you bite, know, bite that down or chunk that time down into how to achieving the end, the end result. Looking a little bit then into the future, you touched on a few things. obviously I’ve, I’ve been for some years looking at how adaptation technologies are starting to become.

more acknowledged and important. Water, course, is a major resource which you’ve alluded to. Finally, on the first podcast, we talked quite a bit of ETG and that probably hasn’t evolved in perhaps how we all envisaged in terms of speed, but clearly is evolving. Just a little bit of a look into your crystal ball of how you see what are the key

Either events or technologies that you see coming to the fore on this energy and mobility transition for the next five years perhaps.

Devrim Celal (42:17.004)
years such a long time but let’s let’s see how we do in five years time. I’ll still talk about BTG because it’s it is now coming. I think every car manufacturer whether every car manufacturer has either said they are doing it in this generation or they’ll do it in the next one so that’s three to five years time if it’s the next one.

Different countries are finally setting on the standards of what it takes to do V2G. The debate on AC or DC is ongoing, but it’s starting to become clearer. And once we’ve unlocked that, every home with a charger and an EV will have five, 10 years of backup.

And I think that will become the major vector for balancing electricity because each car has anywhere from 60, 70 to 100 kilowatt hours plus storage in them with a seven or 22 kilowatt charging point.

I think I’m going to repeat things that are quite obvious. Solar, the cost has come down 100 volt or down to single percentage points of where it was a little bit over a decade ago. I don’t know where this was actually coded, but I heard and I believe it that using solar panels in certain parts of the world to build a garden fence is cheaper than using wood. And then, let’s talk real numbers.

David Hunt (43:36.252)
More? Yeah.

Devrim Celal (43:56.414)
In certain parts of the world, the levelized cost of electricity from solar is in single cents, one or two cents. Dubai is building a data center purely on solar and batteries with levelized cost of electricity at six cents per kilowatt hour. So the stories are endless. Second one is batteries. And again, when we started this business, we used to talk about kilowatt hour cost in the thousands.

David Hunt (44:01.055)
Yeah.

David Hunt (44:24.765)
Yeah.

Devrim Celal (44:25.87)
we’re now talking in under a hundred dollars that completely transforms the way you think of it. So I think there’s gonna be more and more of that and those technologies will become more prevalent. And I think the other reason that encourages me around solar, barring the geopolitical challenge at the moment is it’s the fastest route to power. We can talk about gas, but look.

Nobody’s going to get a turbine for a gas CCGT built if it’s ordered today for another decade. So the reality of it is if we need power today, is solar and batteries are the answer. And also, it gives me a little bit comfort. We will not get transformers to upgrade the networks as well. So we have to learn or build systems that can optimize the usage of them better.

David Hunt (44:58.674)
You can’t buy one. Yeah.

Devrim Celal (45:24.106)
One thing that I’m looking forward to, but it’s still, I don’t have exact clarity on how it’s going to come is longer duration storage. Vehicle to grid would solve it to a certain degree, but it won’t solve all the problem. And on longer duration, there is the CO2 batteries that Energy Dome are building now.

David Hunt (45:32.253)
Mm-hmm.

Devrim Celal (45:47.832)
I like the technology because it’s got, I say this with the utmost respect for the team and I think they would agree with me, there’s hardly any new technology in the stack. It’s all existing things. It’s just configured in a way that’s intelligent, that creates a scalable solution. There’s form energy using iron oxide batteries, high view power, cryo air. So there’s quite a few,

David Hunt (45:57.714)
Mm-hmm, yep.

Devrim Celal (46:17.954)
businesses that have been around for a number of years that are maturing their tech stacks. I would love to see them succeed because that’s sort of, would call almost medium duration storage, medium to long is going to be critical, particularly for balancing overnight wind. The one, no, please.

David Hunt (46:35.761)
Yeah, that’s been interesting. So I was going to say it’s interesting that we had how sometimes you’re too early maybe, but we had the CEO of HyVee Power on the podcast in the very early days, maybe five or six years ago. And also Malta, not sure if you’re familiar with Malta, which is again, a long duration storage funded by Breakthrough Energy Ventures. We the CEO, I think was the second or third member of

guest on the podcast. again, long duration industry has been one of those things that have been talked about a long time. Flow batteries have really had that struggle and continue to do so. But it’s good now to see some of these things which are, like you say, not dependent on any revolutionary or innovative breakthrough in technology per se, but just in how you can utilize established off the shelf products in a new way to achieve that aim. that’s definitely interesting to see how that evolves out.

Devrim Celal (47:06.67)
Yep. Yep.

Devrim Celal (47:28.366)
The one thing that I’m a big fan of, and it comes with an environmental cost, especially if not done right, is pumped hydro, where quite naturally you can store gigawatt hours of electricity and reasonably efficient. mean, most pumped hydro you’ll get 80 % route efficiency.

and very long tenure of that investment. And there are certain nations in Europe or with proximity to Europe like Turkey that has incredible resources where they could naturally deploy PAMP-LiPRO providing interconnectors into the continent. And then we can’t finish this without talking AI. So let’s talk about AI a little bit. I think there is a small bubble around that.

I lived through a few bubbles in my life career. I lived through the internet bubble. I was in the midst of it. Obviously there were very strong fundamentals. No one will disagree with that today. But during the time we just got a little bit ahead of ourselves and created a bubble that was unreal. I think there’s a little bit of that happening with data centers or AI today. It’s not subprime scale.

bubble. Subprime was fiction. We just created financial papers and lost in the detail of what was real or not. This is real, but there is a significant over-counting duplication of what’s out there. There was a Financial Times article a few weeks ago about ghost data centers where I think they got it spot on talking about the same project being shopped around with multiple utilities and each one counting it as one.

David Hunt (48:50.191)
Yeah.

Devrim Celal (49:16.078)
But that doesn’t mean there’s not going to be growth. think the IEA statistic, and I believe Goldman Sachs has a very similar forecast that data center loads will double by the end of this decade. They will not go by 5.6x. But there’s one change there that excites me. I’ve spent the last decade, the one of the things I did try to do was get data centers be flexible. I am convinced that they will not be flexible.

David Hunt (49:40.51)
Mm-hmm.

Devrim Celal (49:47.198)
I was excited that with crypto mining or AI training or inferring, we had more vectors of flexibility within the data center because latency was less of an issue, timing was less critical. However, having dabbled a little bit from afar at a high level into the economics of it, is one of those scenarios that was similar to hydrogen electrolysers.

David Hunt (50:15.4)
Mm-hmm.

Devrim Celal (50:15.86)
Once you build it, there’s such a big investment sitting there, you almost have to run it like base load to realize your returns. So the economics, the price elasticity is quite low. So if you want to get a data center to flex, you either should be willing to pay them a lot of money for turning loads down, or here’s one area where it may work, you need to give them access to connections significantly faster.

David Hunt (50:20.124)
You to utilize it. Yeah.

Devrim Celal (50:43.286)
And I Google recently signed a deal where they are agreeing to flex for a faster connection. So there’s a business case around it. But what data centers will pay for is the ability to connect early if they can go and buy flexibility from others. And that could be consumer flexibility. Don’t charge EVs when I need to run certain processes. And that could be close to real time. Could be there ahead.

David Hunt (50:50.238)
Okay, yeah.

Devrim Celal (51:12.802)
but then refined throughout the day. It could be from commercial industrial sites. Is your price elasticity different to a data center that you’re willing to switch off your industrial process to allow the data center to go through? And then if there’s a bigger case, independent power producers may be willing to build a battery nearby or even behind the data center’s meter. And I think once we’ve done that,

three layers of flexibility, residential CNI and generation, there may be need for a small sliver of flexibility that you may need once a year for an hour or two at a time. And there is where I think the data centers may be willing to flex a little bit, because if you’re shutting down or deferring your processing by half an hour, an hour, once or twice a year, then the cost is low enough for you to do that. So I think there will be…

flexibility wrapped around the data center, but 99.9 % of it would come from outside of the processing, then processing having to defer or to be deferred.

David Hunt (52:23.122)
Yeah, yeah, that’s definitely the key play for the coming decade, as everybody says, despite the froth. We are talking to a number of IPPs who are looking at solar and battery behind-meter developments for data centers, and I’m sure that will continue to evolve and watch this space. listen, we’ve talked a long time, and it’s been fascinating, and I appreciate your time, Devran, too.

Recycle a little bit of the last 10 years and some of your learnings from that, but also obviously a look to the future, maybe six years time, we’ll see what the world looks like. But for now, obviously good to catch up and really intrigued to see how the final transition to independence with Kraken goes and how you enjoy the next phase of the journey.

Devrim Celal (53:06.04)
Yeah. Thank you very much, David. It’s been fun talking to you and looking forward to the next one.

David Hunt (53:11.944)
Thanks everyone.

Cool, let’s stop there.