Joe McDonald – tem.

David Hunt (00:01)
Hello and welcome back to the Leaders in Clean Tech podcast where I’m delighted this week to be joined by Joe McDonald from TEM. Joe, good to have you with us.

Joe (00:09)
pleasure.

David Hunt (00:11)
I was just thinking before we were recording actually, if we first bumped into one another when you’re at LimeJump, which feels like a million years ago, but actually was not that long ago when we were in the process of replacing Eric as he stepped down after the acquisition. But yeah, time has flown. So perhaps you can start with a little bit because it leads nicely into the genesis of Tem and how and why you came to co-found the business and yeah, what brought you to the point you’re at at the moment.

Joe (00:40)
Yeah, my goodness, I was so lucky that Eric took a shot at ⁓ someone who was quitting effectively their law career and jumping into a build a startup with him. So yeah, I actually was probably 20, I was 29 years old when we sold to Shell in the end with Lime Jump.

I had an actually amazing year and a half, two years integrating LimeJump into Shell and taking a really strong product role. ⁓ think into that point, I’d done everything. I’d run the trading team, the business development team, the customer service team, the marketing. ⁓ But I hadn’t really touched, I think enough on the product side of things. So that was fascinating to lead a kind of cultural change as you adapted an engineering and product team into Shell and just understanding the kind of beast from within.

in.

What an amazing time. think that was for me in the learnings. ultimately it did two things for me. One, it made me kind of finally see the end to end electricity transaction, like properly. So see within the big energy companies themselves and how they’re dealing with systems and their processes and customer focus, et cetera. And then it also gave me pretty itchy feet to go, right, I’ve got to jump back in and build something again. ⁓ Much to the dismay of my friends and family around me who were like, great.

David Hunt (02:00)
You

Joe (02:01)
You got a nice easy life now. I was like, I’ve got to go again and take those learnings. And I think we could 10X it. And I think the opportunity is even bigger. And the mission wasn’t fully complete. But yeah, it was a great leaping off point for 10, which is something super excited to talk through today. And it’s been a wild first three years of the new startup as well.

David Hunt (02:22)
Yeah, we’ll certainly look straight into that. It’s interesting you say that actually, because again, lot of founders after an exit or early employees founders when they come to exit jump reasonably quickly. Sometimes they’re pushed, but that interaction thing I think is interesting, the time that you spent at Shell. And know one or two others like Benjamin Schott who stayed on at Shell after they acquired Zonon, which was another client of ours.

learn so much and like you say to some degree those those big behemoths are the antithesis of entrepreneurialism in in some ways but there’s a lot of learnings and a lot of things I’m sure that you’ve just alluded to that are really helping you now having been through that process.

Joe (02:59)
Yeah, I mean, we saw the pain of what it’s like to go from, you know, 10 people to 110 people, and that felt nearly impossible to solve the cultural challenges. So I think maybe sometimes people will be a bit dismissive of the big companies and the old way of doing things, but sitting inside a company that has tens of thousands of people and actually is an incredibly profitable company and very successful ⁓ across the world.

I couldn’t help but think there’s got to be opportunities to learn about what scale looks like and what systems look like. And look, you do see the broken parts and you see the parts that give you the confidence in starting a potential challenger to the status quo and that give me confidence and learnings. But equally, I took a lot around what it takes on that organizational structure and operational structure. ⁓

And yeah, I probably stayed longer than I thought because there was just so much learning and even the international opportunity got me to look at companies in the energy chain in Texas as well as in Germany, not just kind of in our own kind of siloed UK focus up until that point. So yeah, no, it was fantastic.

I don’t suit a big bureaucratic company. And so ultimately that’s when once I felt like those learnings had sort of come, ⁓ I need a far more meritocratic kind of fast pace, ⁓ kind of all in environment. ⁓ And to me, there was nothing else that I could do other than frankly start another company to try and replicate that.

David Hunt (04:31)
Cool, cool. We’ll jump into all links. I think that was one of the values I saw that you talked about recently for the companies. We’ll dig into that. talk a little bit about TEM then, because again, there’s a lot of, obviously, in the last few years, the importance as we’ve gone into a more renewable focused energy system that there’s lots of changes in terms of how we buy and purchase and obtain that energy. There’s obviously growth in the PPA market and all. But what TEM are doing is a little bit different. So perhaps you can tell us a little bit about

Joe (04:36)
Yes.

David Hunt (05:00)
what exactly is the offering of Tehman, how that came about.

Joe (05:03)
Yeah, so look, I I got this unique perspective when we built a renewable energy trading company at LimeJump, a utility effectively, and then sold it into the big energy company that sits right in the center of all energy transactions, right, which is Shell. ⁓ And ultimately, Thames vision is to think about with the new system and system pressures that are coming.

that four-heartedly more decentralized independent generation, more prosumers, more intensity around data, pricing, all the rest of it. We realized there was an opportunity to build the kind of new trusted engine powering the world’s energy transactions. Very much our Stripe must have looked at MasterCard and Visa when they set up and…

a lot of lessons actually from the FinTech space that we’ve taken into TEP, but we ultimately take it from the principle of an energy transaction is completely the most broken layer in the system. It’s the kind of wholesale market and black box in the middle requires stacks of middlemen, additional fees, fragmented data.

all doing sort of sequential processes, all very human driven. And so we’ve now built the first transaction layer that removes all of that complexity inefficiently entirely using machine learning and artificial intelligence. And it effectively just delivers a smarter, cheaper, and actually more transparent traceable energy transaction for the modern energy market that’s sort of turning up at our doors in the UK and hopefully across the world over the next few years.

David Hunt (06:38)
Who are you in particular disrupting in terms of, you’ve talked about Shell, obviously, and other sort of big energy companies, but who are you most disrupting in your business model?

Joe (06:48)
Yeah, so look, we’ve ⁓ effectively, it’s quite interesting how we’re perceived in the market. Ultimately, what we’re doing is we’re replacing the wholesale market in every territory we work in. So that’s our ultimate target is the energy and electricity wholesale market ⁓ is replaced through our transaction infrastructure that we call our platform, which is called Rosso. From there, you are…

displacing the need for ⁓ typical big energy companies, so your big trading companies, who sit without customer ownership, just manage that supply and demand elements and the final transaction. And we are the moment also displacing your traditional utilities as well, because we can do customer ownership layers through the Neo utility we built, which is our product called Red.

So ultimately the transaction infrastructure is what we replace for now customer ownership. We can also earn the customer. ⁓ and that means now basically you don’t need a utility. You don’t need a trading desk. You don’t need a big energy company. You don’t need the wholesale market. And that’s just on one side of the transaction. So when a business turns up, say by energy on the other side, now you don’t need a trading company. You don’t need a trading desk. You don’t need a utility all the way down to the.

dependent generators. So all in all, kind of displace six or seven middlemen.

And then we return all of those fees back as now we have done a single complete transaction. That disintermediated fee structure is sent back to the users of the system. So our businesses now effectively pay 15, 20 % less for their energy. And they know every single pound they’ve spent where it’s gone to. And our generators get five, 10, 15 % more for the energy that they sell. ⁓ So that’s kind of the model, but we actually work with loads of procurement.

partners, brokers, consultants, and we very much see in the future working with the traditional utility base as well because right now all of those feed into the wholesale market and we’re now starting to provide the alternative.

David Hunt (08:57)
That’s interesting you said, because obviously on one hand you’ve got the businesses who are purchasing energy and obviously at some point you’ve got someone generating this power, hopefully through another gas turbine or through obviously a solar panel or a solar field. So what’s the journey from that? On one hand you’ve got the customer purchasing energy and what sort of transactions are these? Again, you can go on to various different PPA markets and get sort of various hardwired bits of solar so you can

you can sort of say where this part of your energy came from. But this looks like more of your entire energy, I guess, requirement being very solid and acquiring it more cheaply, but also knowing exactly where it’s coming from.

Joe (09:36)
Yeah, so I mean we’ve even called our product red because we are the antithesis of green and greenwashing. So the way we think of it is this is that ⁓ actually when it comes to electricity specifically, we’re now talking about data and data reconciliation.

It’s kind of like how you move money from one bank account to another. No one is physically going and picking up the cash and moving it from your bank account to your mate’s bank account. It’s like a data ledger. That’s very similar with electricity. Different to things like oil and gas, where you’re actually moving the physical commodity around the world. So actually what you’re looking at is reconciliation of that data. So for us, we have independent generators who are currently selling at a price that is being set by the wholesale market, but the price that they’re

selling at, the actual business is paying about 20 to 30 % higher than that price it’s being generated at. So all we do is through completing the first single complete transaction between those buyers and sellers on a kind of many to many basis, so replicating what the wholesale market does without the middlemen, it just means that now a business for every pound they spend, they know where that has gone to, to which generator.

Now that’s not that the physical electrons have come from them. It’s not that they’re buying certificates that validate that. It’s payment transparency. And it’s really to try and combat the idea of greenwashing, which has been allowed to exist because the wholesale market.

doesn’t allow for that traceability. So you’re forced to have to buy certificates outside of that to validate where your energy has come from. An origin of energy is important to many businesses, albeit our view is there’s potentially better ways of actually giving back.

putting more money into the pockets of the generators through this direct transaction that we’ve come up with. ⁓ So the journey is quite simple. We offer very similar to any utility product. It was really important to us to have no behavioral change. We can create new, innovative new transaction, use the most innovative new technology. But if I ask a business to spend another 10 days, one month, however long it is to understand the product and take a different approach to where they transact.

they’re not going to sign up, right? We work with small businesses who are desperately just trying to survive right now in today’s market, let alone want to spend more time dealing with their energy. And it’s the same with the independent generators. These are farmers, all the way through to maybe big private equity funds, but for them to change the way they procure.

It’s like a big shift. So your traditional options of corporate PPAs and peer-to-peer and the things that Google and Amazon and Patagonia do, that can’t be brought down to 99%. It’s impossible. So our product requires very little behavioral change. It’s 12, 24, 36 month contracts, nice, simple, fixed price, no peer-to-peer arrangement, no need to negotiate directly, no specific contracts or credit change requirements. It’s pretty much on the surface exactly the same.

It just delivers a cheaper and more insightful, transparent transaction underneath. Now, the problem with that is we often get, sounds too good to be true, which is one of our biggest battles and people trying to work out how we’re doing it what we’re doing. But it really comes back to the heart of, we are the ones who have just decided to fix the most broken part, the most complex part.

and probably the oldest part of the market, which is the wholesale market. Once you’ve done that, you unlock this. If you don’t do that, you’re just innovating around the peripherals. And even like LimeJump, that’s what we did. We innovated on peripherals. Ultimately, that leads to one route only, which is probably get bought by the big energy companies. And we really wanted to take a different kind of bigger stab at a huge transitional and sort of generational shift to a new model, ⁓ which hopefully we’re well on the way of achieving now.

David Hunt (13:22)
doing that. Okay, it’s interesting. again, there are many factors in what makes a successful startup and we’ll touch on a few of them. But one of them happens to be timing. Obviously, three years into the company, we had a time where energy became ever more of interest both on a consumer and obviously, very much in the business lab, as you’ve touched on, as the obviously war in Ukraine had an impact on energy prices and everything went crazy for a period of time and obviously still is to a degree.

Joe (13:28)
Hmm.

David Hunt (13:50)
How much I guess of that has helped the growth that you’ve had so far in the business? The fact that timing was on your side.

Joe (13:57)
Massive.

Massively. So we always sit down as a group of founders and just remind ourselves we are not some sort of geniuses We’re not thinking of things in a way that someone else couldn’t but we’re fortunate combination of like thinkers come together and just being very fortunate with timing we decided to launch our product, right so

without the energy crisis, you wouldn’t have had the awareness on the customer base to see how broken the space was and ⁓ either finally give up and therefore be willing to try something new with a new sort brand and opportunity like us, or just more motivated to seek out alternatives to the experience they’ve had. And even starting, Tem comes back to, my friend had to shut down her business after seven years because her energy price went up by 400%.

And that same week on a Thursday, I sat down for dinner with my other friend who’s an energy trader. He’d just been paid about 700,000 pound bonus. That experience is enough to highlight how unfair it is. And it’s enough to galvanize change and sentiment in our customer base. That’s great. Also, the venture capital space finally woke up to NTech specifically, right? We’ve been focused on FinTech for 10, 15 years, even in the lime germ days, it’s so difficult to raise funding. Why?

It’s too incumbent driven, too complex, too much market risk. But I think when people understand that the opportunity and size of opportunity and how broken it was, was made clear in the energy crisis across Europe, especially so much more interest has come into this space. ⁓ And that actually meant our funding journey was entirely different this time around in terms of the pull from the market. ⁓

Without that, think it would have been very difficult. You then combine that we’ve been able to build our company literally perfectly incepted with the ⁓ machine learning and AI technology improvements. What we run today would have been impossible to have built four years ago. So we were again, super fortunate that the technology solution that allows for what we’re trying to do has also perfectly come along at the same time. And we’ve been able to build not retrofit, but literally build bottom up.

an AI native AI first transaction infrastructure as well. So incredibly lucky, genuinely on the timing.

David Hunt (16:18)
Yeah, mean, you can say that, and obviously there is that element of things beyond your control, but there’s also the ability to recognise and make sure it happens when those opportunities arise. was interesting listening to Steve Jobs talking about the iPhone. The iPhone only happened because there four or five different technologies from the glass manufacture through to the chip and energy and battery evolutions. They all happened at the same time to enable something that wouldn’t have been possible even two or three years before.

And it’s interesting you touch on obviously the AI side of things, again, so it’s timing is an element, but there’s also a lot of moving parts there that you’ve captured or taken advantage of the timing of to get to where you are. Sorry, a bit of a waffle on the round, on.

Joe (17:02)
No,

no, I really like this. I find it interesting. I like this idea of understanding what it is to be an entrepreneur, because I think there’s so many barriers put up to people. And ⁓ there is an element where, you know, I don’t know if you’ve seen there’s a lot of, there was an American research. I’m not sure if it was like Harvest Business Review, but they did research into how much luck actually comes back in and factors as a differentiator when you’re at the top, top level of performance. Right. So I know the kind of whole Gary player, the more I practice, the luckier I get.

But at a certain point, actually, everyone works really hard. Everyone is super smart. Everyone is capable. And I often find that at founder level, sometimes it is just about being lucky with the timing because that is the differentiating factor. But you’re right. It’s then how well you can execute on that. And do you have the right people around you and the right network effect to be able to execute? So that’s actually something we always come back to as founders. We don’t try and think of ourselves. We kind of stay quite humble in the sense of

Our only thing now and our only responsibility is to execute incredibly well. Because if we do that, then you ride the wave and your luck is then compounded into a really successful product. If we fail to execute, we’ve missed the opportunity, right? ⁓

But we don’t try and pretend that it’s like we foresaw the market coming or, you know, we’re the smartest people in the room because I think that again, leads you down to rely on biases, rely on opinion, stop thinking about the customer and stop just almost taking for granted the benefit of just being on an amazing journey together. So it is something we talk about a lot, which is why I don’t think it’s unnecessary waffle. I find it fascinating actually, this balance of timing, luck, hard work, execution and what it actually means to be an entrepreneur.

David Hunt (18:44)
Yeah, again, I think there’s, don’t know how accurate they are now, but they’re typically the one in 10 kind of thing for startups that one in 10 will succeed and obviously the majority will fail or certainly not make any great impact. But it is these combinations of things. And what I see, obviously you need a good product, of course, you need obviously good market conditions. But essentially where I see that the greatest opportunity comes from timing is one that’s beyond your control to a degree. But then it’s around fundraising, money and people. So that you touched on the money there,

Joe (18:58)
Mm-hmm.

David Hunt (19:12)
share a little bit about the fundraising journey of how you came and where you are at the fundraising journey. And then I’d love to move on to the people side, which I know is very important to you as well. So, but to me, if you’ve got the right money and the right people, you’ve got to fight a chance of being successful. So yeah, perhaps a little bit of how you’ve funded and where you are on that journey. And then we can perhaps flip to the culture and then the sort of the mission that you have as individuals and as a team.

Joe (19:37)
Yeah, I would say it’s it’s product, people, and then storytelling. Like if you can communicate your story, if you can get great people who can then build great products.

you point yourself towards the most broken part of any market. And honestly, I think you’ll find success, right? If you really fundamentally like base yourself on those principles. ⁓ Funding wise, again, yeah, we kind of went through a series of like validation points as a founder team. So, you know, when we start the business, you’re not certain, right? You’re not certain on…

whether it’s right, whether it’s right product, whether you’re gonna be able to get funding, et cetera. So we went through a series of stages. First of all, my first job was actually, could I convince the three smartest people I knew to come work with me?

And when they quit their jobs, so Ross Bartek and Jason, all very different thinkers to me, but I knew it was going to be necessary in our space. mean, solo founder journeys is already so difficult, but especially in the intense space of energy, that diversity of thought was really important. Okay, Tick, surprisingly they all were willing to join. It only took one Italian meal with Bartek and he signed up. So I was like, Then it was saying, could I convince people that knew me to give me money? So actually I very much avoided the venture capital route to start with.

because I know once you get on the VC treadmill, you’ve got to be willing to run and sprint. Like it is both necessary, I think, to build a business like us. You can’t assume you can do this by bootstrapping or not raising a lot of money. Like you’re competing against some of the biggest companies on earth. But equally, you’ve got to be perfectly timed to hit that treadmill because it’s already running at a pace so that you’re not going to be in a position where you get thrown off. So we actually went to some angels that knew me, some customers that we first put our proposition in front of.

first investor was Johnny Wake from Courteen Hall Farms who have now been our first customer, our first transaction and still a customer today, right? And they gave us money and you’re like, okay, tick people that know us willing to give us money, our customers willing to give us money. Then it was, can I get FinTech angels, people who I see there’s a huge similarity in the end tech to FinTech. If they believe in a story, will they come in? actually our first FinTech investor was Nick Lentz who had done a lot of work in the FinTech space who has now actually become a big client.

Climate

Tech at Agile Angel. It was only at that point we went, okay, we raised just over a million pounds. That was able to get some momentum, build the first product, get some traction with customers. It’s then I started building probably about six months or so of relationships with a couple of great funds. ⁓ Albion were one of them. I’d known Adam for about six months. He’d focused in the energy space and Henrik from Revend to an impact fund.

And they were amazing, right? And they got the journey, they got the mission, they got the ambition, and then it was actually very quickly we put together our…

our first seed round of about 3 million. And it was kind of just building on that momentum, actually quite iterative fundraising. ⁓ And then from there, it’s kind of snowballed, right? You get good investors at that stage, good angels, good connections. Rivend and Albion introduced me to Atomico. We were able to run a really tight, incredibly fast Series A, speaking to only a few like actual VCs that been targeted. And that kind of gave us our big injection of just under 13 million at Series

and all of this is still relatively small. There’s many companies raising a lot more, but our view is we want to show early on we can make our pounds go further than anyone else. So that now as we go towards our next rounds, we become, I think, a little bit more aggressive on capitalizing, on proving the traction we’ve actually managed to achieve with such a low injection of capital, perhaps comparatively to other companies.

I think puts us in a really strong position. So was all about this kind of motion building iterative fundraise and building really tight relationships with the individuals that were joining, not just the money that they were giving. But yeah, completely, completely different vibe as well because no one was touching energy 10 years ago. you know, it’s just, it’s a very different sort of momentum shift to be part of this time round.

David Hunt (23:50)
Jump, Joe, to your experience or your experiences as a CEO of a founding CEO, because there are so many places, there’s so many challenges, not least of which there’s one thing about always iterative fundraising to make sure you’ve always got enough cash right to get to the next point, not signing out too cheaply. There’s lots of complexity around just the fundraising piece and wanting to make sure you have the resource, financial resources to do the things that you anticipate on the journey.

But again, on the flip side, you’ve got that from a people perspective as well. We think, well, we need to be at this point by this time. So we need this amount money, but we also need these types of people doing these types of things. And so that’s a complex tool. How have you approached the, you touched on the fundraising, how have you approached scaling the team? I don’t know how many you are at the moment, but how have you approached sort of keeping the talent and the people in the right sort of scale and timing to go through the journey you’ve had so far?

Joe (24:46)
Yes, a really good point you make actually. There is a similarity here. Like one of the first principles that we take as a founding team is, which was given to me as just an amazing piece of advice by ⁓ Stan from I think Highland Capital, who was one of my mentors at Lime Drum. When I told him what I was planning to do with Tem, he gave me one piece of advice and he said, don’t be greedy. You don’t have the luxury of being greedy with the kind of mission you’re trying to build. ⁓

And I didn’t really understand what that meant, but actually when I think about it, it applied to fundraising. We never raise by trying to maximize our value or minimize our dilution. We pick the right partners at whatever cost, right? Because that was more important to us. And we were willing to raise more often, potentially dilute more in order to increase the chance of success. And I think it’s the same with people.

There’s four of us as founders. We’ve split the company. We know that actually the journey that we’re to go on about sharing that journey, not trying to be greedy and holding onto all the control is important. Our first hire was ahead of people because we knew actually before the marketing, before finance, before anything else.

if we weren’t willing to invest in the people we had and again, not be greedy and share, share ownership, share transparency of vision and purpose and mission and all the rest of it, which actually I’ll talk about a little bit really flows deeply through into our values and how we actually behave as an internal team. So that equally meant when I met an amazing person, coincidentally Gemma, who’s our CMO, who’s introduced by my investor.

I was willing to do anything to help her join the team, any amount of ownership, any amount of buying that it took, because I could see there’s an incredible person, she will compound the chances of success. We’ve now gone from, we’re going from about 55 to about 75 at the moment.

And so each stage, there’s been a lot of intentional focus on taking these first principles and trying to apply them as rules and values and structures that work for remote first company as well, which is a new experience for me. ⁓ and it’s, really true. Like the same approach is there is like, don’t be greedy, share as much as we can with those people and trust that if we have great people that join us, there’s probably a better chance we’re going to achieve the mission that we’re on, right? Which is a, you know, a long one.

require a lot of effort from a lot of people.

David Hunt (27:17)
Yeah, One of those challenges as I found this show is in scaling from a people perspective is very different when there’s four of you in a room and then there’s 12 of you in room and then there’s 20 in a room and now there’s potentially coming to be 75 in the room or obviously not necessarily in the same room. But that’s a challenge in itself of how to take them all on the journey. You touched on storytelling broadly at the start of the conversation, but I always found that storytelling and really hammering home.

every single day what the mission’s all about to the team as you expand. I’ve spoken to a lot of founders where that perhaps sometimes falls off the radar a little bit. There’s an assumption that everybody joined for this mission and they know what it’s all about. But I found that communication and transparency constantly are what’s required to build teams. It’d good to get your perspective on how you’ve been on that journey, as you say, that number of employees has scaled to what they are now.

Joe (28:15)
Yeah, so again, very fortunate to have had an experience where I would say in our last company going from 40 to 100 was pretty devastating culturally for us. And I was reflecting a lot on why this was an in-person in-office company where everyone was there, everyone was around the table, like why did in its scale, even linear ⁓ in terms of that.

cultural bond, that intention, that efficiency on a per person basis, even the retention of employees, right? And it’s because I think we made assumptions that what it worked then would continue to work and that the DNA would just proliferate organically. And this time around, what we’ve done is we have spent a lot of time, a lot of money, very intentionally at every stage, basically over-indexing on

organizational structure, values, culture, and people. ⁓ And there’s a load of different things we do here, because equally, we also went to be remote first, which actually compounds your problems even more.

We are belief was if from day one, we build remote first, we’re not trying to retrofit. weren’t a pre COVID company. If we build from day one remote first and we build in principles and we know it’s going to be harder in a lot of areas, but ultimately unlocks more talent, more alignment of like ownership, more diversity of thought. That’s a worthwhile sort of sacrifice for us. So a couple of principles that we apply. ⁓ Values really mean something to us. So

We reflect that externally and internally. I talk about traceability transparency as part of our electricity transaction. This is why every single employee knows a fixed cost for every single role we have in the company. And we’re transparent about salaries. Like we flow that all the way through this idea. We’ve got nothing to hide, right? ⁓

other principles, we really respect experts and managers as independent tracks to the top of the company. So there is no hierarchical structure, which allows for again, flow of information, expert ownership, and actually, people who become managers at Tem love coaching people. Because actually, if you don’t, there’s no need to progress that way to get promoted. You can promote yourself all the way to the top as an independent expert, stay reporting into the CEO, right? So that kind of structure was important.

massive investment into centralized sources of truth and data access. So actually sacrificing individual disparate systems that might be best in class for their job and focusing on everything’s got to be run by a notion. Everything’s got to be a notion, right? ⁓ Introducing rule structures. It sounds weird, but at 10 people, we had rules on meetings. What kind of meetings could you book? How would you book them? How would that work? ⁓

And this kind of like flows all the way through to then things like picking a very clear North Star, consistently reminding people on that North Star, linking that to KPIs that can be driven all the way down to an individual basis so they can see 50 % of what they achieve in their promotion is linked to the company’s North Star and 50 % is linked to the KPI that they can actually move the needle on. ⁓ So all of this to say, I mean, I could probably talk about this for hours is it’s been incredibly intentional and a lot of effort.

I’d say even in the last five months, I’ve 50 % of my time thinking about the next level of organizational structure, performance frameworks, hiring on boarding, and 50 % of my time on product strategy and other things. So we spend a lot of time up until this point. I think probably at some point it starts becoming more more scalable as all of those systems and DNA really stay embedded. But yeah, when we’ve gone from 50 to 70, I don’t need to worry too much about those 20 new people.

David Hunt (31:58)
Yeah.

Joe (32:04)
because actually I now already trust the 40, 50 people are true believers of how we do things and can again naturally onboard and bring people up to the kind of pace and philosophies that we have at Tem, rather than being sort of a top down thing that I’m trying to keep spinning all the plates on.

David Hunt (32:24)
Yeah,

yeah. And to come back to some broader market topics, but just to close on that sort of aspect, because again, one thing I think it came about, you’d been to on an offsite venue in the Peak District, which we hopped on and Hyperion have been there a number of times as well now, which is a great venue. So thanks for that. But just that concept of when you are remote first, actually, it’s even harder to make sure every day everybody feels empowered, everybody understands what’s going on, everything’s transparent. You are making it more difficult when you are a remote first company. So just again, how if you

I’ve that actually, the numbers obviously grow because it’s very difficult to suddenly put 70 people in there in one space than it is when there’s 12 of you.

Joe (33:03)
Yeah, look, so yeah, it’s important point to note. said remote first doesn’t mean work from your bedroom. That was like super important to us. The founders always take the mickey out of me, but I talk about collisions a lot. There is the need for collisions. So that is when people are in a room unstructured without a specific need and in person and they can come up with ideas and bounce off each other. That is really important.

So cost money. is not cheap to be remote first just because you’re saving on office costs. Actually, it’s far more expensive. It’s about having ⁓ remote working groups in certain areas. It’s about selecting talent, maybe not everywhere, but like to build little hubs in different territories across the world.

thinking about time zones, thinking about location. And then it’s about the investment in our 10 fests, twice a year, big events, we’re getting 55 people to Morocco ⁓ in a month’s time. I need someone in within the people team, pretty much full time managing that and building that. So that’s another cost. But what we get out of those three, four days will massively kind of compound the working relationship over the next six months. It’s a real great way to bring people in. So what do do? We make sure we prioritize our hiring,

pushes leading up to Temfest. So new hires get to join and then join for a time together. And we get that benefit rather than joining a month afterwards and missing that. it’s again, it’s just a lot of thought and a lot of sort of spend. And I still don’t think we’re quite there. We’re trying to work out how do we allow smaller team groups and squads to come together? Because maybe it’s not best that marketing me every quarter, but how do we get

a squad of product marketing, engineering, commercial, and someone else, that kind of idea creation to meet up. Like, could it be around big project kickoffs? Could we pay for them to come in, organize them to come in and come together? ⁓ So we definitely not got it perfectly. And I’m not sure how it’s going to scale to hundreds and hundreds of people, but I think the underlying philosophy will not change and we’ll find the right solution. So long as we’re willing to still invest a lot of time and money into it. And we see it pay back like tenfold, right? Like.

The efficiency and the profitability per head that I have at TEM is kind of outrageous compared to the energy industry. And that gives us confidence that we’re going in the right direction in terms of where we’re investing and the success of the product is ⁓ I think a genuine output of that.

David Hunt (35:26)
Yeah, that intentionality is critical. say the challenges might change, but if you’re intentional about all of these things, you’re on top of it. And it’s not just something because so many companies have culture by accident or by default or something they kind of had normally in the background, but was never really a massively important thing, I think, to the detriment as well. But then again, I’m probably biased on those things. Also, the collision thing was quite interesting. just read a book called Culture Code. I’m trying to think of the author. And I was talking quite a lot about that element of collision, just literally people bumping into each other and talking and sparking that’s…

impossible to program or artificially create to some degree. So yeah, I get that. And that’s the biggest challenge when you are remote is to get those activities of collision. So let’s look a little bit broader context. So what’s the, I guess, the future look like for TEM and where do you see any changes in the sort of energy transition, energy markets more broadly in the next?

Joe (36:05)
Yeah.

David Hunt (36:20)
three, four, five years, because again, it’s been quite a riot in the last three or four with things that have gone on, both politically and obviously economically. And who knows what’s around the corner on that front as well. how do you see the evolution of the energy transition and energy markets in the next few years?

Joe (36:36)
Yeah, I mean, for us, know, what we’ve seen is I think we’ve grown from about 100 businesses. I think we’ve now got 1600 plus customers that have joined us even in the last six months. So our journey is very much focused to ⁓ kind of really be successful here in the UK and then look to expand across to other territories.

And truly believe that because we built a technology platform, not an integrated utility, actually that interoperability is going to be actually relatively easy for us because every country in the world will be suffering to some degree like the UK. And actually the UK.

Bit like we had with FinTech has an unfair advantage against the rest of the world in creating startups because we have one of the more advanced energy markets. So what we’re learning now probably puts us four or five years ahead of most countries in the world. So kind of like the banking system that allowed for FinTech to flourish here and expand. And I think we have a very similar case with NTech. Now, what are the kind of core trends in the next few years that driving the problems we see in the opportunity? I think it’s important to understand. ⁓

We have a couple of things that the current system is really not fit for purpose for. That is going to create more more pain and more more opportunity in this space. So first of all, we have just general geopolitical volatility and general global volatility. Volatility affects a global energy system where you might be relying on sovereign electrons versus foreign electrons, right? If you have to import your oil and gas,

Suddenly people have realized, hmm, that could be incredibly painful for us when we have the geopolitical volatility we see today. So the push towards this idea of energy sovereignty and ⁓ creating your own electrons for your supply and demand becomes more important. To compete on a global stage, you want to have a manufacturing base that competes against other territories. It’s going to come down to not just how cheap your labor is, but certainly as we move towards more automation and AI. ⁓

It’s actually how cheap your electron is. So the cost that a country can produce their electron at will probably dictate the global order in the future. So I think there’s going be a lot more obsessedness around how do you create what we call that firm capacity, energy sovereignty in countries. And that is predominantly going to be driven by the tides, the wind, the sun, nuclear fusion. We’re never going to be asked, for example, in the UK compete against China and India about building coal power stations cheaper. So we kind of just need to forget about that.

We’re never going to produce oil or gas cheaper. And if we rely on that coming from the continent, you’ve seen that’s going to create huge exposure to us. So I think that’s one area of this idea of how do we become smarter about local distribution of decentralized assets to create energy sovereignty on our shores. You’ve then got the access point of so many more businesses and homes are becoming more prosumer, more engaged, more interactive in the market. So to give you an example,

Today, probably the wholesale market has 30, 40 participants actively trading. And today, businesses, most businesses are being traded on three or four, maybe five or six different profiles. In the next few years, every single business in the UK is going to go on to what’s known as a time of use tariff.

which means suddenly I’m going to get 2 million bespoke profiles that need to be priced. So it’s like 100Xing the intensity around the bottlenecks already existing in the wholesale markets and the participants. So just going to magnify that. ⁓ So I think that’s the other area where you’re going to see a lot more engagement and requirements. You’re going have to have technology solving that and new models in how you actually transact and manage the customer. ⁓

And then I think generally the kind of other sort of underlying factor is just around what is people’s view on ⁓

renewables and renewable certificates and whether it should be a premium or actually whether ⁓ It should be enough versus them political battle on building renewables We kind of need to move away from that and I hope that’s what we do do and say you just need independent decentralized generation if you just build big wind turbines offshore as a replacement for the big coal power station on shore

Nothing changes really. Yes, you’re now perhaps more renewable, but your actual problems still exist. You have single points of failure. You have likely big energy maximizing and monopolizing all of the output of that and profiteering off that.

And you have not empowered your local communities to build their own small, decentralized, smarter deployed independent generation, wind, solar, hydro, et cetera. So that’s kind of the other sort of big trend I think is going to be trying to battle the culture war versus the kind of status quo of do we own big assets owned by the current dominating parties in the market?

Or do we allow for a transfer of power and a redistribution or re-engagement of the actual users of the system, homes, businesses, and independent generators? And I think that’s going to be a fascinating battle to see how it unfolds. ⁓ We have our own view and are betting on the fact that empowering the users of the market for the first time is probably a good thing. ⁓ And hopefully regulation will follow.

David Hunt (41:59)
Yeah.

Yeah, no, it’s interesting. I don’t know if you saw it the weekend there was an article in the FT about China becoming the first electro state as opposed to a petro state, which touched on your first point about, yeah, sovereign energy and sovereign electrons, which was an interesting read if you haven’t. The other one, again, I don’t know you recall, I actually founded a solar business back in 2007. And it was one of the things I loved about it was this democratization of energy. didn’t have to be dependent on a utility. You could stick someone on your roof.

Joe (42:09)
Yeah.

David Hunt (42:30)
The whole world has moved on a lot since 2007, but there was always a big resistance at that sort of democratization because it is, you know, it’s more difficult in some ways to tax, it’s more difficult to control. And we still have this very much decentralized command and control and big incumbents dictating things. And of course, I think we still do to a large degree. So it’d be interesting to see how that does play out with, like I said, the more the rollout of time we’ve used tariffs and businesses and individual consumers becoming more prosumer in terms of how they

Joe (42:59)
Yeah.

David Hunt (43:00)
Do things.

Joe (43:01)
It, look, it’s kind of that timing point again. In my opinion, the fundamental transition is now happening because of necessity and of an inertia that can’t be stopped, right? It’s kind of like you’ve seen with electric vehicles to a degree, the products are becoming better, the users are starting to realize that and therefore we’re sort of driving towards that change. ⁓ I think the

Other sort of interesting part of that is that, you know, sorry, actually, my dog is just drinking a load of water. Might have to edit that. Yeah, exactly. The interesting thing is like, we can’t be naive. The dynamics around energy has not changed in Standard Oil in 1890. It’s always been a few people owning a centralized commodity that they can control, move, deploy and set the price of.

David Hunt (43:33)
It’s hot weather, good luck to him!

Joe (43:56)
Just because we move towards renewables doesn’t mean suddenly that’s going to change. In fact, it requires people willing to fight, people willing to build product, people willing to use the technology and the inertia to try in this small window of time we have, probably 10 years as part of the transition, to also redistribute those power dynamics. We talk about power from the people to the people. We talk about empowering the 99%. I think regulation, think governments realize that is going be incredibly important in winning votes.

And so perhaps even there you have a momentum that supports the kind of direction we want to go in. ⁓ And I’m very hopeful for that. I have no doubt we will solve our climate issues as a species. I have some doubt about how much suffering is necessary to get there and how quickly we could do it, right? I do have doubts about whether we will rebalance the distribution of wealth and power that relates to energy. And it has such an opportunity to do what

David Hunt (44:41)
Yeah.

Joe (44:52)
computed from the 1970s, right? The availability and cost of compute coming down has unlocked an entire new, I mean, could you imagine where we’d be even in 2020, right? With, you know, the AI is one of the final outputs of a lower cost of compute. If you can get a lower, wider access to the cost of an electron, which is an input to compute, I think you have the same opportunity to change the trajectory of humanity at a rate that…

I really just hope won’t be missed on because we continue to do the things that we’ve already been doing and just replicating it with say some big renewable assets. So yeah, I agree with you. Like can’t be naive about it, but I do also feel the inertia and the momentum is now happening that it is almost inevitable, whether it be 10 or someone else, there’s enough awareness, enough understanding, enough technology to distribution. And the incumbents cannot do this. I’ve seen that they are not going to be able to rebuild their new platform. They’re not going to cannibalize their own market.

We’ve seen this time and time again. So now it’s kind of now or never. And that’s a very exciting opportunity to be right in the center of it today.

David Hunt (45:56)
Yeah, no, it is. And it’s going to be a fascinating next 10 or 15 years for sure. And I think we’re out of time, but it’s been fascinating and great to talk to Joe. And thanks very much for showing insights both into what you’re doing and of course your thoughts on growing teams. And yeah, all power to you and the team. And hopefully we’ll catch up with you again in the future and see how you’re growing.

Joe (46:15)
Yeah, no, honestly, it’s a pleasure. We’ve shared, actually, like you say, our journey since probably 10 years almost now. So yeah, be happy to check back in and give you an update on where we are in a couple of years’ Thanks. Take care.

David Hunt (46:26)
Thanks, Joe.