Pete Armstrong – CEO/CTO of Mixergy

David Hunt (00:01.546)
Hello and welcome back to the Leaders in Clean Tech podcast. I’m David Hunt and today I’m delighted to have a repeat guest. It’s not something we’ve done often, but Pete Armstrong, Dr. Pete Armstrong from Mixergy is a former guest from 2018 it was Pete, which is, feels like a million years ago. And of course everyone knows whether you’re an employee, an investor or a founder, the road to grow a startup is another linear one.

Pete (00:16.43)
Yeah.

David Hunt (00:30.016)
And there have been a lot of changes in all companies and really fascinated here how Mixergy has evolved in that period of time since we first spoke, Pete. perhaps we can start just as a refresh of a really quick genesis of your sort of creating and founding Mixergy and where we were when we first spoke in sort of 2018, what the company looked like then. And we can obviously then talk about the evolution.

Pete (00:53.166)
Yeah, great. Now, great to be back on. A lot of water has passed the bridge since 2018. so it’s great. The podcast is still going. Good to check in. I wonder if we’ll check in again and around when will it be 2030 something next time. Yeah. So Genesis and Mixxi was really not long before we spoke in 2018. 2016 was when we officially spun out of the university and

David Hunt (01:07.648)
Hopefully you’ll be on the yacht somewhere.

Pete (01:21.198)
It all came about because Ren and I were looking at ways of delivering low-cost scalable energy storage to the grid and we kind of stumbled across hot water as a means of doing that and in 2018 we were just on the cusp of launching the Mixergy tank. I think we’d just got onto Robert Llewellyn’s Fully Charged show and we then entered a period of

interesting times involving some growth pains, some highs, some lows, and we could unpack that over the rest of the show.

David Hunt (01:59.678)
Yeah, so essentially, as I spin out from Oxford, you say, that interesting that when we’re looking at and we’ll talk much more about sort of flexibility and the technology in a moment, but you were actually looking at a broader context didn’t necessarily start by looking at, you know, hot water tank, which is to some degree what you know, the backbone, I guess, of the mix of G product.

Pete (02:19.542)
No, that’s right. As a matter of fact, when I started my research, the intention was to go to the Maldives who were at that time looking to fully decarbonize their energy system. Unfortunately, there was a coup. And so I didn’t get I had all my vaccines ready to go. My travel itinerary and then it all fell fell through. So I was interested from their perspective because they were looking at solar.

Principally around how can you accommodate a variable solar energy onto their system? then it became more of a desk project and was looking at all sorts of different technologies whether it was different electro chemistry’s and batteries flywheels supercapacitors superconductors there’s some really interesting esoteric stuff around material science and what you could do with a supercapacitor for instance I got quite excited about

Alas, I don’t think that’s going to have a scalable manufacturing pathway on the horizon, or at least it didn’t then. And at that time, my girlfriend and I, we had bought a flat with an economy seven hot water tank, which was costing quite a lot to run because it was consuming power during peak times. And as I started looking into it, started to understand that, we we’d actually come up with a pretty decent solution back in the 70s with

fuse boards that would switch on storage heaters and tanks to use up base load generation that was surplus at that time. They had a different problem with surplus generation. was surplus nuclear and coal. And so in a weird way, it came full circle again around hot water storage. that was the point where I realized, well, hot water tanks, there is a huge amount of potential there.

David Hunt (03:54.836)
Yay.

Pete (04:12.194)
But you have no idea their state of charge. It’s quite a dumb approach. You’re heating all or nothing. And so that began the exploration around the hot water tanks and how we could try and make them better. And that was the genesis of Mixergy.

David Hunt (04:27.048)
interesting journey. Again, for our listeners overseas, Economy 7 was a certainly in the UK was essentially a radiator full of bricks that was charged and heated during the day and obviously discharged at night essentially. It’s a way of heating the room.

Pete (04:41.068)
Yeah, your French listeners might know as Economy Blue. So they have a very similar thing in France, it’s Economy Blue, same scheme. And in Spain, Portugal, they also have, I think it’s by Horaris in Portugal. So there are other markets where they took this approach to have these fixed periods of time. And the UK did it on quite a big scale back in the 70s.

David Hunt (05:09.44)
Okay, let’s jump back to that conversation. Companies is in its infancy. You’ve done a lot of research and come to this realization that perhaps hot water was a solution to the problem. How do you go about then looking at scaling the business in terms of the business model and the product evolution? So perhaps we can just sort of focus a little bit on that Mixer G1 and then we can dive very much into how things have evolved.

Pete (05:36.417)
Yeah. So, at the outset, firstly, we needed to get some kind of recognition of the technology and proof. And that came about by launching a direct sales channel in the UK, which targeted the early adopters and came with a bunch of challenges, but also interesting insights at the same time. think we, so, know, some of quite funny, you we,

We got onto this show, this clean tech show, which had a really good reach with a kind of evangelical early adopter market. And as we went on that show, we got a lot of interest, but quite quickly discovered that the customer journey associated with heating products in general, not just hot water tanks is very much driven by the installer, their relationship with the merchant, what they’re familiar with, what’s available.

And we were then, and we still continue to today, operate via contract manufacturing. But what we needed to learn was a lot more around how products get specified over the counter as compared with how they get specified when you have a project like a new build development. so that early start, we learned a lot. We learned a lot about the challenges of logistics distribution.

contract manufacturing, customer relationships where early adopters are a unique breed where you can spend a lot of time talking about elaborate projects, but then converting that to a sale comes with quite a high cost compared with an installer who is an evangelical about your product, hopefully, and that’s repeat business. So you quickly realize where your focus needs to go.

David Hunt (07:07.114)
Many.

David Hunt (07:21.557)
Yeah.

Pete (07:33.536)
in that segment, but even then managing, we had a network of installers, which we did for a while, that comes with its own attendant challenges. so laterally, we’ve moved more into the specification realm where it’s about achieving, yeah, which we’ll come to, yeah.

David Hunt (07:42.581)
Yay.

David Hunt (07:48.096)
We’re touching that. Yeah, because that’s really interesting. When I started our solar business back in 2007, we had the same thing. The early adopters would love to talk about PV for hours on end. But there was never going to be a sale or unlikely to be a sale at the end of it. The other thing, I’m going to match your point of control, is that when you are going through, as you say, the more typical installer network of a customer, my way, come with the idea, I want to…

Pete (07:59.151)
Thanks

David Hunt (08:17.024)
one of these heat tanks or even today you put the analogy I want an EV but you turn up at the dealer and the dealer says oh you don’t want that you want one of these.

Pete (08:23.736)
That it was exactly what happened to us. I mean, almost verbatim, you had people who had seen the show phone us up, agreed to get a Mixi tank and then we were all of a sudden left with the quandary of what do we do next? let’s phone an installer, which we did in their area and try and list them to help install this tank only for them to turn up and go, what’s this mate? You want a combi? You want a new combi? And so, yeah. Yeah.

David Hunt (08:49.152)
Yeah, do that, do that, do that for for you.

Pete (08:53.58)
Yeah, so we accumulated a bit of scar tissue on that path.

David Hunt (08:59.454)
That’s a really good learning curve. A, firstly, because you survive it. And obviously, lot of startups don’t make it beyond the first couple of years. So you have all of these challenges in terms of evolving the product, which, of course, would have evolved over time. But then this route to market, which I guess is one of the other big challenges that has changed. Perhaps let’s talk a little bit about Mixergy 2 then, so the version that is today. So let’s perhaps give a little bit more for the audience of an overview of the technology and then talk about that journey.

Pete (09:25.294)
Sure, so the technology really centers around stratified hot water tanks which are installed in the hundreds of thousands annually across the UK. What we decided to do was to try and use the existing manufacturing supply chains as much as possible. So our product to a regular installer for the most part looks like a conventional hot water tank and a mains pressurized hot water cylinder.

But what we do is we add a few ingredients to make it a smart tank. So one, we add a flexible piece of electronics on an adhesive tape as a sensor. It records the thermal energy throughout the tank. And with that, you now know when to heat based on the usage that you can learn from the sensor. The other element to it is that we stratify during the heating process. So rather than heating

everything from one shot like you do with a kettle with heating element at bottom. We heat from the top and then we have a little variable speed pump to push cold water from the bottom tank into the top and then it diffuses and as it goes through that circuit it pushes the hot water down. So we could be much more responsive with the heating and heat what’s needed to reduce the heat losses but then also heat when energy is

more abundant on the grid when the carbon intensity and the price is lower and so those those two tweaks Choreographed by the third ingredient, which is our software platform. So we decided to build a full stack IOT infrastructure in-house To to coordinate that what is now, you know a fleet numbering many thousands of tanks across the UK So we can coordinate them in response to the price of electricity

David Hunt (11:25.088)
So that’s the interesting thing for most consumers, kind of think of your own, obviously your own house, so to speak, you know, want hot water for your shower and you try and charge it accordingly. But what you don’t necessarily think of is firstly, an aggregation of what, you know, as you said, a collection or that fleet of tanks is capable of. And the bigger picture of how that can support the broader energy transition and the challenges that we have as we move towards a more renewable dominated energy network.

Pete (11:53.261)
Yeah, absolutely. I mean, to put it into context, the UK, your listeners will probably be familiar with, but you know, we have a balancing mechanism where each settlement period, half hour block in the day, you may be in or out of balance. And in the case of the UK recently, we’ve seen surpluses of energy to the tune of five gigawatts of wind, which has had to be curtailed often. Now,

If you had 2 million smart hot water tanks, you could soak up those those surpluses, the biggest surpluses that rise rather than so you can. In other words, you could be paying people to produce free hot water and 2 million. mean, that that’d be one in four of the tanks installed throughout the UK. If we could make them smart tanks, then we could deal with some of these enormous surpluses. And that’s been our vision since 2016.

really since we launched. But the challenge is, whilst pursuing that lofty ambition, how do you have a tractable customer proposition that can get to the customer at scale? And who is the customer? Because it’s actually not really the householder. It’s more often an installer or a specifier or a RMI maintenance engineer who

procures equipment for a social housing landlord. it’s getting through that naughty supply chain, which has been as big a challenge as the technical ones, to be honest.

David Hunt (13:34.709)
Yeah, well, let’s not have that a bit inside, because again, it’s not intuitive necessarily. think now that a similar concept is there’s too much wind at night, you can get paid to charge a car. Electrons make a little bit more sense to people, but obviously, achieving exactly the same, potentially better results through hot water isn’t necessarily intuitive to a householder, but hopefully it is from what you’re saying to people who have a more professional understanding of the systems.

Pete (14:00.025)
You’re right. think it’s not intuitive to people the extent to which a hot water tank allows you to decouple when you use hot water versus when you need to heat the tank. They can preserve heat for a long time with a modern well-insulated tank. It can store heat at a usable temperature for days. So that means you can be quite opportunistic about when you turn the heat pump or the heating element on.

So that once you’ve got over that intuitive step, you can see quite readily how it can take advantage of flexible time of use tariffs and the surpluses that arise.

David Hunt (14:42.922)
Yeah, How have you dealt with that, Because again, there’s a lot of challenges there. You have both the technology to develop and though you also wear the CTO hat as well. So you have the technology to develop and then you have what you think is a route to market. Interesting from the earlier Dr. Cruz and then realizing that actually you need to make quite a substantial change in how you communicate, I guess, the solution to whom you’re communicating. So.

How have you dealt with that as coming from a PhD student to a degree to become an entrepreneur to then navigate these choppy waters?

Pete (15:19.746)
Well, so yeah, I mean, think it helps having experience around you. I have sometimes I’ve gone through moments where in the early days, having a board of investors, you kind of fantasize about what would it be like if I had full autonomy? could do whatever I want. And I think I frequently concluded when I’m honest with myself that it would have gone off the rails quite, you know, we would have gone head first into

trying to do more manufacturing, trying to do more distribution ourselves, we would have made a ton of mistakes. And so I think the the realization that we needed to get in external people with different perspectives was very helpful for us. think and the journey, you know, we started with the early adopters that served its purpose. It got us onto the radar of Centrica, who through British Gas got us into distribution.

But then we needed to evolve again. And that’s when we embarked on Mixi 2.0, which involved us getting David Toohey on board as chair, Andrew Keating as our new chief commercial officer, and with Barclays leading our last investment round. That was really what catalyzed the next phase of our growth.

David Hunt (16:41.482)
Yeah, let’s talk about that. Because again, you had an interesting cap table to start. I the guys obviously, as you did, the IP group who were one of the early investors, have obviously that involvement with Centrica. But that level of support issue evolved in terms of the, I guess, the wiser heads that come in from a board and advisory point of view, both from the investor side, but also you’ve mentioned obviously, David Pinder and others, and obviously now David Toohey, who were in that chair role. How sort of instrumental is that?

Pete (16:44.034)
you

David Hunt (17:10.688)
been and how have you felt about that? Because often as a CEO, as you say, you want one hand to be the master of everything you control, but it takes a bit of self-awareness to realize that actually you could end up chasing a few rabbits without some outside support.

Pete (17:25.714)
it’s brilliant. mean, when you’re at the co face of trying to deal with manufacturing challenges, custom, you know, pipe sales pipeline, you often stop seeing the wood for the trees. It’s very, and then so when you when you’re forced every month or every quarter to, to recount the pain of the last month or quarter.

David Hunt (17:54.048)
Yes.

Pete (17:54.797)
with people who are seeing different perspectives across different boards, you just get really fresh, fresh perspectives along with the experience. mean, to give you an example, mean, David Pinder, who, you know, now chairs the Green Construction Council and is involved heavily with the MCS and he, from the earliest stages of his chairmanship was made us really focus on the convergence of heat pumps and hot wash storage around

heat pump cylinders and that brought us the IHP to market. was really on, he was a nagging voice because at that time we were focused very much on the day-to-day direct electric gas fired systems of the backup heating element. That was tractable, simple, well understood volume opportunity that was there. But there was this growing specification opportunity around heat pump hot water cylinders. So that perspective.

We really helped us there. And then with Mixi 2.0 getting David Toohey on board, the perspective was about focus. It was about, okay, how can we do something repeatable and scalable? At that point, Mixi 1.0 towards the end of it, we were kind of all over the place. Frankly, we had a direct sales channel, our own installer network. We were also trying to sell through merchants, which

conflicts a bit if you have your own direct installer market. so it makes you two point I was really around focusing on on the specification opportunities within new building social housing, and more recently, big commercial projects, where you’re not you’re not trying to get so heavily involved with the channel itself, you’re trying to leverage the influencers of those channels.

who pull the product through for you and keep your focus more in the background. So that we think is a much more viable path forward.

David Hunt (20:02.154)
So essentially becoming much more like a tech company than a…

Pete (20:06.638)
Yeah, absolutely. mean, we actually talk about two frontiers of the business, spec and tech. So specification where the influencers of spec projects are generally quite technical people. It’s all about what’s my optimum route to compliance through a morass of complex regulation. And so that’s around things like SAP in the UK standard assessment protocol, which are different.

equivalents across across Europe and in the States. And so there’s there’s that technical aspect. But then the other technical aspect commercially for us is licensing. So for us to grow beyond the UK, we took the view with with mix 2.0 that beyond the UK, it was about licensing through incumbent players, we use the UK as a testing, a testing ground. We did dabble in

direct sales across Europe and we got our fingers burnt in a few ways. We had some fantastic experiences, we learned a lot, but it’s really, really difficult. Even performing in your own home market with hardware, let alone trying to branch out overseas, it really makes me take my hats off to the likes of, you know.

Sonnen and others who did manage to set up quite a few sales channels in different markets. But for us, much better for us to focus on our wheelhouse, which is the technology.

David Hunt (21:47.253)
Yeah, yeah. And how’s that evolved? So you’ve got now this route to market through the specification. on one part, there’s the regulatory side of things. There’s obviously the functionality aspects as well. How does that play into the mindset beyond the individual property, be that commercial or residential, to having that? Or does it matter whether they have an understanding of this aggregation and flexibility kind of opportunities that exist through hot water?

Pete (22:16.974)
So at this stage, from a specification perspective, flexibility still doesn’t really have much of an influence. So where we get our influences around achieving a high score within existing test standards. for example, our integrated heat pump cylinder, IHP, that is one of the leading products in a

in a database called the product characteristic database, which is what then drives you into new build specification. Similarly, our solar mixg tank, that’s about an energy performance score. According to SAP, which draws the boundary around the house, it’s about how much solar can you utilize by using a solar diverter within the tank. Now, it’s not that’s not considering that the wider opportunity around

using surplus energy. That remains our mission and it’s our motivation, but sadly we haven’t seen the kind of regulatory drive that we’d hoped to endorse flexibility. That being said, it is coming in an indirect sense through new regulations like SSCS, which is a huge piece of regulation around something that the government are referred to as the Smart Secure Electricity System.

which is going to mandate that hot water tanks, heat pumps, EV chargers, they will have to have by around 2028 the capability to work with a flexible time of use tariff. Now, so that’s, that’s come coming quite late, but nonetheless, it will, it will start to pool flexible products into the market. To, but,

But that being said, there is a huge opportunity of flexible tariffs just with a retail electricity customer proposition. If you can dovetail in with flexible time of use tariffs like Octopus Cozy or even just a regular economy seven tariff, you can layer in the abilities with flex on top of the compliance boxes that you really need to take to get the products installed in the first place.

David Hunt (24:42.144)
Yeah. Talk about the scale of this peak. That’s one thing that even when we were first speaking that really sort of struck was because everybody just thinks, yeah, hot water tanks. But you obviously think of whatever it is, 27 million homes in the UK and obviously 1.6 million commercial properties. It just spring to my mind from when I was doing the solar business. There’s a huge opportunity or capacity or platform of which we can utilize to so much.

improve the energy system, flexibility is relatively new topic but increasingly important with what’s going on in the world. perhaps just tell us a little bit from your perspective the scale of opportunity for Mixagene for this technology.

Pete (25:25.464)
Well, yeah, I mean, if you look at across the UK, there’s around nine million hot water tanks residing in domestic cupboards. And that’s not to speak of the commercial opportunity you mentioned. There are about 1.6 million commercial premises. Now, as I was saying earlier, we are routinely seeing periods of the day where there’s so much wind on the system that you’re having to curtail roughly five gigawatts. So what’s five gigawatts?

two very big nuclear power plants that have yet to come online. Hopefully they will soon. So if you were to just capture one in four of the tanks installed in the UK over their life cycle, if you could get them converted to a smart hot water tank, you could make use of those huge surpluses that are rising today. But it doesn’t stop there because

you know, with the move to heat pumps, getting intelligent hot water storage and intelligent system design around the heat pump and the hot water tank, you can start using the hot water tank as a heat battery to supplement the space heating, need to be able to defrost the tank, the need to avoid the heat pump short cycling, whilst also providing hot water. You can use surplus solar PV. So

we’ve been talking, when we’ve been talking about these large surpluses that lead to wind being curtailed, that’s one thing. The other massive change that’s happening in the UK with respect to flexibility is you now have regulations around new build, which is going to mandate that 40 % of the ground floor area of a new home has to be repeated on the roof as solar panels. So these are large solar arrays, often exceeding three kilowatts.

with that huge amount of surplus solar energy, distribution networks are going to struggle. And we’re already seeing situations where distribution network engineers are turning up to new build sites and saying, look, sorry, you’re going to have to curtail this PV that you’ve installed. We’re going to put an export limit on every inverter because the grid locally can’t cope with the power network. should say can’t cope. So

Pete (27:51.469)
why not have a smart hot water tank in that context that is able to utilize what would otherwise be curtailed from the roof, whilst also being able to use surplus energy from the wider grid, rather than paying wind farms to turn off when it’s too windy. And that is just writ large in the commercial sector, where you have tanks that can be as large as five, 10,000 liters. And so that’s the new frontier that’s

we’ve embarked upon on our spec journey as well.

David Hunt (28:25.216)
Okay, so essentially has the mission changed since you started the company? Clearly the journey has evolved and the company’s evolved, but has the mission remained the same from your perspective?

Pete (28:36.706)
I would say so, yeah. think the idea of getting that interaction between the home and the grid and focusing on hot water as a pragmatic first step has and remains the fundamental mission. Along the way, we’ve had to adapt commercially to get to scale. We’ve had to also work within an evolving ecosystem of other products.

that are vying for surplus solar energy or cheap electricity and in a world where in some homes that’s morphing into a home energy management system, how do you technically engage in that ecosystem? It’s a really interesting challenge but our place within it still has remained around smart hot water storage.

David Hunt (29:28.768)
Yeah. Yeah. And how then does the, this evolution of Mixergy to continue, what do the next few years look like if things go pretty much to plan, or at least in the same direction of the plan?

Pete (29:42.595)
Yeah, so we’re laying good foundations. We’re in specification with some of the biggest house builders across the UK. So we’re seeing volume repeatedly going into those channels, which is fantastic. And we’ve also got a really exciting pipeline around commercial hot water tanks. And that’s fantastic because we can sell through &E contractors and we can manage that channel in a way that’s much more scalable, we think, than

over-the-counter. That being said, over-the-counter regular replacement of tanks and homes through licensing, if we can get that licensing model right, then that for us would be a great additional frontier. Within the spec world, as mentioned earlier, we’re having to operate with other systems and with some social housing and new build customers,

we’ve been charged with the lead system architect role. And that’s been really interesting because it’s given us insight into the naughty challenges of how you reconcile air quality with surplus PV, with hot water storage and with the need to provide for electric charging in new developments. So that’s giving us a really insight into the role that we play as we continue to evolve. But that’s still

very much in the R &D tech background for us, the mainstay for us today remain smart hot water tanks. so I think hopefully that will still be looking good when we next come to talk to you in 2030, 32 or 33 or whenever it is. I’m struggling to add eight to six this morning. should have having this call a bit early.

David Hunt (31:29.844)
We’ll get that in the pen.

David Hunt (31:38.241)
Yeah, we’re getting the diary. So the other thing you touched on this before, actually, by the way, and there are sort of, guess, at least some similarities in another partner I’ve worked with in the past, which is Naked Energy. And the connection point, apart from the fact it’s water-orientated thermal, was Barclays, which I know have been really supportive to them. And from our conversations of what you touched on before, as a partner rather than purely as a source of cash, they seem to have really helped the business. Perhaps you can share a little bit about

about investors generally but perhaps how Barclays have supported because they’re not necessarily the name that springs to mind when people look to grow a startup.

Pete (32:15.31)
Yeah, no, but Barclays has, I think that, yeah, that idea of them as a partner over and above being an investor is, yeah, it’s very much true. Barclays have really opened up the commercial opportunities for us in large buildings throughout the UK, but also in other jurisdictions. I mean, you mentioned Naked Energy and we really have on our agenda some

conversations to have with them because there’s some fantastic projects they’re involved with. We’ve been specified across some large iconic commercial buildings. I don’t think I’m allowed to talk about them yet because they haven’t officially been announced these projects, but where we’re embedded within stadiums and historic buildings, but we’re seeing naked energy also with very large

solar thermal arrays in big commercial buildings. And Barclays in the middle, I think they’ve got a real long-term view around this space and really embody, I think for us that patient capital, which is very mission oriented and that has genuine strategic value. mean, the space that we’ve operated in

with respect to raising capital has been around the venture side. And there is a lot of clean tech VC funding out there. But when you have a player like Barclays who have deep commercial relationships through their banking arm, which also has a green mandate, which also links climate risk to

David Hunt (34:06.624)
All right.

Pete (34:07.038)
to investment strategies, that opens up a whole bunch of opportunities that we’re really just scraping the surface off. it’s been great to have Barclays on board. They’ve been an excellent partner.

David Hunt (34:20.106)
How have you enjoyed, because clearly at heart you’re a techie nerd or an ad, which is say as a plus and a positive, but obviously you’ve come from and you still wear that CT hat. So you clearly love and you’ve been involved in the evolution of the product from Miss Genesis and through to where it is now. But then we’ve already talked primarily around this commercial journey of learnings over that period of time, which I guess…

challenges and parts of the journey have you enjoyed most and least perhaps?

Pete (34:51.178)
that’s a great question. I I’ve enjoyed learning about the complexity of commercial channels and how, and it’s given me an appreciation, frankly, for just regular businesses. When you look like a regular brand on the high street, like Gregg’s or something, you know, it’s easy to sort of just…

take it for granted, but behind every one of those successful businesses is an exquisite machine that is very sophisticated and very easy to fail to appreciate until you try and build something yourself. I think, and that doesn’t mean I’ve always enjoyed it. It’s been at times painful. mean, for managing a sales team, that comes with its own complexity.

David Hunt (35:35.305)
Yeah.

Pete (35:45.933)
managing incentives within a commercial team, formulating a proposition with a particular target market where you’ve really excavated what the size of that opportunity is, the messaging that lands best. Those things I’ve enjoyed learning about. My comfort zone is technology.

And so getting people in who are better at those commercial frontiers has been essential. But I have learned the hard way that there’s much more to, you know, there’s much more to businesses than just common sense plus spreadsheets. I think when I was doing my engineering degree, we had a mandatory business module.

David Hunt (36:42.396)
Okay.

Pete (36:42.466)
It was just this is just a spreadsheet with some basic arithmetic. It’s like no, it’s a balance sheet. right. Okay, and then actually you you start to appreciate that At scale these things are exquisite machines, which are every bit as complex as a as a highly engineered product to be honest if not more so

David Hunt (37:02.772)
Yeah, that’s a good analogy. Obviously along the way you’ve met with a number and you’ve got a great team. We’ve touched on a little bit at the board level, which really supports you, around you also you’ve got co-founders initially and a great team marketing commercial. what’s the culture like? When I first came to visit you, we touched on this when we spoke recently, there was a drum kit in the bathroom. There was a very small little…

really was a cottage industry, and obviously that’s now clearly evolved. But perhaps you can share a bit about the culture on the team.

Pete (37:36.473)
Well, yeah, mean, you say cottage industry, I mean, because literally they were and they remain cottages that were converted. They were actually holiday cottages, which were then turned into commercial units for various reasons. so culturally, I mean, we’re on a farm and we have expanded within the same the same footprint that we originally started with.

I think farming has its own culture, I like to identify with. There’s a sort of slight renegade innovative spirit that you find amongst eccentric farmers. I think that’s kind of underpinned some of our innovative ideals, I think. And so we have various labs, shipping containers that we’ve turned into climate chambers and

You know, we have large PV arrays, which I’m not sure if they’ve been approved by the distribution network operator, but you we’re on a farm. you know, it’s fine. We probably couldn’t do half the stuff that we get away with on an industrial estate with a a a property management business looking over our shoulder. so, but yeah, so culturally, you know, we, we, we try to retain that.

David Hunt (38:44.83)
or starting out on my own.

Pete (39:02.254)
curious agility but at the same time we’ve had to bring in a more commercial mindset. To have the kind of rigor that you need to deliver something at scale you can’t just spend your time toying around with ideas on a farm.

Although that still remains important and part of our DNA.

David Hunt (39:31.474)
That’s true. It’s interesting. We’ve the conversation because we’re almost out of time. But I’ve been reading the book recently, which is Alchemy by Rory Sutherland. So not sure if you’re familiar with it, but Alchemy is around still. Yeah.

Pete (39:45.07)
I am familiar with Rory Sutherland. I think I heard, I think I listened to the audio version of Alchemy. Marketing guy, right? Yeah, he’s great.

David Hunt (39:56.513)
Yeah, exactly. the way to, and psychology, essentially, of how being quirky or different is important to achieving, particularly on a commercial front, but just that mindset of still being a little bit, you refer to this, renegade or…

Pete (40:10.712)
He, I remember there’s a great quote from him where he talked about HS2 and he said that HS2 was an engineer’s solution to a transport problem and he said you should have got marketeers to solve that problem because they would have just, I think he said, would have got supermodels to carry champagne down the carriages of regular trains and then people would pay to slow them down.

and you would have saved hundreds and he came up with all this back of the envelope stuff around how many tens of billions would have been saved by just taking more of a marketing mindset than an engineering one which is really good.

David Hunt (40:51.38)
Yeah, lateral thought. then on that, again, you’ve had quite a journey and you’ve learned from, you’ve touched on there, you know, a great board, some great investors and a great team around you. Sort of referring back to the book side of things we touched on before, have you one or two recommendations or books that have really, I guess, supported or challenged you in the journey?

Pete (41:13.966)
Oh, yeah, tons. mean, I’m a real bookworm. mean, Rory Sutherland related to that theme, Predictably Irrational. I know if you’ve come across that book. That’s more consumer psychology, but it really captures some of the evolutionary baggage we have in our psychology, which leads us to make different decisions. And we think of ourselves as rational economic actors, but actually there are a whole bunch of

David Hunt (41:25.098)
Now I haven’t.

Pete (41:43.599)
weird things that marketeers can exploit sometimes nefariously. But another book I really enjoyed was one called the Ideas Factory, which is about Bell Labs. It’s the history of Bell Labs. And so, you we think of the tech giants today like Google and OpenAI and Microsoft, but they were nothing in some respects to Bell back in the 1920s, the 30s when they were

rolling out transatlantic cables, inventing the laser, inventing the transistor. And what I liked about that book was the attention that Bell Labs paid to even the design of their buildings to make sure people would interact sort of serendipitously. So they had these long corridors where people were forced to walk past every department before they got to the canteen. it’s really interesting to think that people thought

like that even back then. But yeah, Predictably Irrational and Ideas Factory I think are two pretty good ones. How long have you got?

David Hunt (42:49.6)
We could do well. So I’ll put links to those in the episode notes for the publication. yeah, the marketing spin one is really interesting. Labs, course, also inventors of PV, or certainly the initial sort of behind PV for telegraph.

Pete (43:07.178)
Yeah, mean, the semiconductor, whole genesis of semiconductors, are quite a formidable power around everything we take for granted today.

David Hunt (43:21.568)
Yeah, another interesting read again, just around innovation, like some things which seem just so counterintuitive to, I there’s a guy called Tony Isaiah who was the founder of, name’s gone now, he did quite well. But he talked about collisions, just creating environments where people would bump into each other. And from those collisions, like water cooler moments, whatever you want to call them, he created environments where…

Pete (43:41.61)
Okay.

Pete (43:45.264)
yeah, yeah.

David Hunt (43:47.467)
people would collide and just have these serendipitous conversations that would be really innovative. yeah, something which isn’t necessarily logical thinking in terms of what’s the best use of space, but actually creating environments where people spark is a creator of opportunity and a creator of ideas.

Pete (43:50.798)
Mm-hmm.

Pete (44:10.582)
Yeah, no, no, it’s yeah, those moments that you can’t and the challenge with that sort of thinking is it’s not easy to, you can’t put that sort of thing on a balance sheet, right? It’s part of your human capital, nebulous, cultural artifacts, which you know, it’s worth investing in, but it’s hard for people to directly measure the output of that sort of thing. But it

it seems at least in case of Bell Labs to genuinely pay dividends.

David Hunt (44:43.072)
to be game-changing. absolutely. So just to close, so Mixergy for the next evolution is going to be at some point in the near future, some nice big announcements of projects that are going to have Mixergy as the core of their being from an energy perspective. Anything else that we’ll look to see in the next year or two that we should be looking out for?

Pete (45:05.036)
Yeah. So mean, within the specification world, we are having to work with other systems. because I mentioned earlier that in order to bring a smart time to market, we had to build an IOT platform. So we built that in-house and we built it in such a way that it would be lower costs to scale. So, and by lower cost, mean lower cost and say using something from Amazon Web Services or Microsoft Azure. With that,

we have opportunities, particularly within likes of social housing, take the opportunity when installing a mixture tank to more optimally control other key energy assets in the home, whether that’s a storage heater or part of the ventilation system linked to air quality measurement, whilst also keeping an eye on the tariff. So we launched a beta trial a few weeks ago of a system called Tariff Engine.

And the objective behind that is to make sure that a MixiTank always works most effectively with the best available tariff for the household. And sometimes it’s not obvious which tariff that should be. It’s very confusing. So really, the opportunity centers around how we can augment the capability of our product with the software behind it to really drive the specification proposition that we have.

particularly for social housing. that’s, know, because we have mixed-use types going in as part of an energy retrofit with a heat pump or with some high retention storage heaters. For just a little bit more thinking, you can get that system with the right tariff integrated with dynamic air quality control. So you’re getting the right

balance between comfort, energy efficiency and compliance risks like mold. those are the kind of germinating themes that in the next couple of years hopefully should be growing into something more material.

David Hunt (47:19.808)
Well, thanks for sharing the journey. For those listening, I will share the original link to the podcast from 2018 and of course the links that we just referred to there. But thanks, Pete, for sharing this update on Mixed version 2 and look forward to some of those big announcements.

Pete (47:34.04)
Thanks for having us back on David and look forward to the next time we can come back.