Quentin ‘Q’ Scrimshire – Modo Energy

Speaker 1 (00:05): 

Hello and welcome to the Leaders in Cleantech podcast. Each week our host David Hunt, speaks to a leading startup CEO executive or thought leader in the Cleantech sector focused on the clean energy and clean mobility transitions. Each guest shares the highs and lows of their Cleantech journey, their industry insights, and their vision and hopes for the future. 

Speaker 2 (00:29): 

Hello, I’m David Hunt, C and founder of Hyperion Executive Search and your host for the Leads and Cleantech podcast. Welcome back to the new season after a summer, hopefully you had a good summer. We’re already sort of rapidly and growing into Autumn Guest today is a great podcaster also, but is the CEO and Co-founder of an energy storage business called Moto Energy. Quentin Scrimshire, great to have you with us. 

Speaker 3 (00:51): 

Hey, thanks having me on. Big fan of what you guys are doing and it’s nice to be in the hot seat. 

Speaker 2 (00:56): 

It is odd when you’re on the opposite side of the equation, isn’t it? So we’ll talk about your podcast shortly, but mostly we’ll talk about obviously the world of energy storage and Modo energy. But before we take a deep dive, perhaps you can just give us the quick elevator pitch of what and who Modo are. 

Speaker 3 (01:10): 

Yeah, it would be a real pleasure. So Moto Energy is a company that’s been going for five and a half years, and in short, we are obsessed with how grid scale energy storage makes money. Okay. So the big picture thing here is that the world is going to build a hundred trillion dollars of new energy assets and that’s wind and solar and a big chunk of that is going to be energy storage and that’s going to sit on the global balance sheet on private company’s balance sheets. And in order to sit on those balance sheets, you need to figure out how much money they’ve made in the past. You need to benchmark how well these assets are doing and you also need to value them at least on a quarterly basis, sometimes on a monthly basis. And in order to value anything in this world, you need to figure out how much money’s going to make in the future and do a discounted cashflow. And so we help with both sides of that. If you own or operate or invest in energy storage assets, we help you figure out what’s going on in the market, how well those assets are doing and how well they might do in the future so you can make the right decisions around the business. 

Speaker 2 (02:08): 

Great, okay. I mean that’s always end still with and will probably forever be the issue or not the issue, but the opportunity that comes with energy storage is the various different ways to stack revenues in different sort of territories and countries. And we’ll obviously come onto that because at the moment you’re heavily focused on the UK and the ER up market. You’re actually calling obviously in from Washington and Texas, is that right? 

Speaker 3 (02:28): 

So I live in Austin, Texas. That’s right. Although we’re about to launch in California, we’ve just opened our New York office and our first hires have been made in Berlin office. So yeah, we really are going now for global scale. Our products are live in Great Britain and Ercot, but we’ll have coast to coast coverage in the US and a few European countries by next year. And our first landing party is on the way to Australia as well. It’s all happening. 

Speaker 2 (02:56): 

It sounds dig into that, but obviously I always like to start with a little bit of the, because this, we were talking recently obviously had the pleasure to meet you in the London office and we were talking about the number of people in the talent pool obviously in terms of with experience and looking for people with 10 years of energy storage or flexibility experience. And you’re one of the rare people that has exactly that. So perhaps you can share a little bit of your journey before co-founding Modo. 

Speaker 3 (03:19): 

Well look, I mean on that, so yeah, I’ve been doing battery stuff for about 10 years, but I mean the whole world of energy storage is changing so fast that it feels like you need to relearn it every two years anyway, I’m a big fan of hiring on skills and potential rather than experience generally, and we do that as a company. But yeah, my background is I was an engineer, I was a power systems engineer, so everything high voltage and big spinning stuff went to work for Centrica PLC when they, they used to have this four year graduates programme for engineers and they’d fly you around the world and put you in all sorts of cool things. So I worked in offshore wind for a year. I worked off in an offshore gas, I was in oil and gas and then big gas fired power stations. 

(04:01): 

And then I got into battery injury storage and I got hooked on it. I absolutely loved it. And at the time we were building a Centrica, what was the biggest battery injury storage site in Europe. It was a 50 megawatt site still exists. It’s called roof coat. It is a beautiful thing. Rather than being in 40 foot shipping containers, it’s in a building. It’s built incredibly well. And I worked on that project and then I left to join a company called Kiwi Power, which was one of the first big aggregators and there was a venture capital backed business. I really loved the growth being in a growth company and all the things that come with that, the pressures and it feels like a pressure cooker and you’ve got people coming and going and new markets, new terms. I loved that. And so when the company sold to Engie, it was around time that I moved on. I’m more of a small company guy than a big company guy and started Mod Energy with Tim, my co-founder, and Tim and I have known each other for 20 years. We actually went to the same school together in Birmingham and we know each other inside out. So that’s a good bloke to start a company with the one you sat next to in year seven. 

Speaker 2 (05:13): 

Yeah, yeah, there’s an interesting story around that and we’re often challenged by and as a conversation I have with VCs around the benefits of a solo founder versus a co-founder. I touched with some recent guests and it’d be great perhaps again to elaborate on that. It’s not often that it’s a school friend that you do these things with, but like you say, you certainly know each other’s good and bad sides from that period of time. 

Speaker 3 (05:36): 

So yeah, I mean I couldn’t imagine doing it on my own. I mean the founding story, it’s always more than just one or two of you, right? You’ve got early employees who’ve got some other employees who’ve been around since pretty much day one. So there’s a whole founding team and mindset, but being two people on the board and sharing ideas and sharing the stress of it, I couldn’t doing it any other way. So Tim and I are equal partners in this business and we both do very different things. He’s very product focused. I’m very commercial and revenue focused actually. We’re both product geeks. We both love product, but it works really, really well. 

Speaker 2 (06:16): 

Who doesn’t love batteries, right? 

Speaker 3 (06:18): 

Well yeah, it does help you if you work in an industry that’s changing as fast as ours. I love software businesses and I love the energy sector and I love anything with a technology s curve like wind and solar or mobile phones or whatever. And there’s no other technology scur going on right now than battery cells. I think it’s the most underestimated thing that’s happening to our whole economy is what batteries are going to do. 

Speaker 2 (06:47): 

Yeah, absolutely. And we’re blessed to have many clients at the cutting edge of that, which is good fund just to see what the future ideally is going to look like if some of these obviously technologies breakthrough. But going back to your point before, I remember avidly looking forward to the first 50 megawatt storage sites coming online as we were obviously previously primarily in and around solar and renewables. But yeah, it feels like a long time ago. And yet in the great scheme of things, it wasn’t actually that long ago that we were still talking about fifties. 

Speaker 3 (07:14): 

Yeah, I mean it’s remarkable If you see just from some of the conferences like Inter Solar recently, you can see that in a 40 foot shipping container, these are the long thin ones that you often see in pictures of battery new storage. Only five or six years ago you could fit one to 1.5 megawatt hours of energy capacity in one of those things and you might have to have some other containers around it for other parts of kit in inverters and stuff, I’m not going to go into too much detail, but now we’ve got, you can now go and buy a 40 foot shipping contain with five megawatt hours in it and there is work being done to fit seven or eight in. And what that does is it totally changes all of the economics around projects because you can fit more on a smaller footprint, but then you have to have less foundations and you have to do the cost. The cost impact is nonlinear because every inch of space you save has impacts everywhere else. I just think about that comparing to a 50 megawatt asset 10 years ago or even seven or eight years ago, which was massive and the whole thing is going to change. Again, 

Speaker 2 (08:22): 

That should go back to your point about how dynamic a market is, which is great, but it’s a challenge on every front from the technological point of view from our side in terms from a talent perspective. But all of these things are changing so rapidly. Perhaps share a little bit again, again, you chose after the Kiwi power experience, which again was sort of broadly around flexibility to found a company there. Founding a company is always a challenge and obviously a leap of faith, but why in particular did you choose the benchmarking and platform that Modo lives in now? 

Speaker 3 (08:54): 

Well, forgive me for sounding really corny, but we didn’t really choose it. It chose us. So I knew I wanted to start a business pretty much straight after university. I’ve always known that and Tim, my co-founder, we’ve always wanted to start a business together. Our first ideas in our twenties were all about importing pumps for power stations or other Chinese goods or some sort of arbitrage on Chinese imports and we never sort of worked it out. But the company that we started at Moto Energy was a very different idea, which was that we think that the world’s going to build loads of battery energy storage and that the optimization of it is going to be a key part of the value chain. And so we were going to build an optimizer, but a low cost optimizer, it would be the Ryanair of battery optimization. So really small team and really, really lean and cost focused. 

(09:42): 

Everything about cost and what we found was about a year into building that company, nobody was going to buy it. So a couple of things. Our balance sheet was too small to really have market access and do what we wanted to do. And secondly, the competition in that optimizer space became really fierce. And doing the maths on the size of the market, we felt we were going to burn too much cash trying to get to scale and trying to compete with lots of other great competitors. There’s some fantastic optimizers out there and we figured this isn’t the market for us, but what else can we do? And in building some optimization software, which was very rudimentary, but it did the job, we had to benchmark against a load of other partners. So we used to benchmark against all of the names you can imagine, and it didn’t come top, but it was alright. 

(10:30): 

It was top quartile. And we showed this some customers and we made this leaderboard thing and ranked everybody and they said, well, we don’t want your optimization software, but we’re really interested in that leaderboard thing. What’s that? And so we started selling a report, honestly a word document, PDF report via email that people used to pay us once a month for and used to get his email sent to them with a report on here’s all the batteries, here’s all the operators, here’s what we think, here’s our opinion on their performance. And anyway, this thing started being forwarded their front centre and we had investors interested in all sorts and we were so frustrated we couldn’t believe people were paying us this product and then they were affording it and everyone was getting it for free. And what we didn’t realise at the time was that it was really, really basic in our little bubble, some element of viral marketing there because we had more and more interest and then we built into a platform and then it became real time and then we added APIs and then we’ve started to look and feel more like a Bloomberg of the energy sector and it just grew and grew and grew. 

(11:30): 

And then our leaderboard turned into a benchmark which turned into an index, which is a fundamental piece of data infrastructure for the industry now in the UK and the US we’re very proud of that and it’s a great privilege to do that. And then our forecasting side of the business, which is the fastest growing part of our business, actually has been two and a half years work, and it’s going from strength to strength too, but we started the company to take an active role in power markets, a bit like a trader, and we found our feet doing the opposite, which is being completely outside the market and providing data on who’s inside, who’s in the lion’s den. 

Speaker 2 (12:08): 

That viral thing I should say is great. When you start to see from a product market fit point of view, there’s definitely that if there are people demanding and obviously forward and on and sharing that kind of stuff. But pivots are always challenging. There’s normally one or two within a most founder stories or startup stories to a degree or so. How did you sort of, I guess, structure the growth plan and the business model? You talked before about having investors knocking on door. I don’t know at what point you may have taken on any manual, have you bootstrapped entirely, but how did that sort of work from, okay, this is now is the direction of travel, how do we build that business rather than the one we started with? 

Speaker 3 (12:45): 

So just to be clear, when I said investors, what I meant, sorry, was investors in batteries, 

Speaker 2 (12:50): 

Okay, 

Speaker 3 (12:52): 

Actually the first couple of years was really challenging for us to raise money. We must have pitched the business a hundred times. Most people said no for all good sensible reasons. In fact, the fundraising process is a incredibly humbling thing and I think it’s good for an entrepreneur to do it because you have to have loads of self-belief to do the thing. But then the fundraising process is one where you really have to be very end up being very vulnerable 

(13:16): 

And you have some of the smartest people in the world questioning you and the business and putting it through the ringer. And that’s a very good thing. It’s a very healthy thing to do that. And I have to do that every 12 to 18 months. I think that’s a good thing doing the pivot, I mean Tim and I have, I’d say we still do this, but less so as we’ve got to scale, we’ve always run the business on gut feeling and that is we are in the detail and we are speaking to customers more than anyone else and we are using gut feeling to guide the business and now we’re building a management team who we’re instilling that kind of gut feeling and those instincts as well. And so in order to do a pivot, the idea of doing a pivot is always a lot more dramatic I think in narratives than it is in real life because by the time you make the decision, you get everyone in the team around the whiteboard and go, guys, this is not working. We’ve got to change something. You’ve already been through this and hopefully you’ve got smart people in the business. These early employees have already done it in their head, they’re waiting for new direction anyway, and you’ve had little test conversations with the customer. So by the time you do the pivots, it’s already sort of happened. It’s already priced in to everybody and it’s actually a sense of relief even though it feels like you’re going risk on with an unknown, 

(14:33): 

There is definitely a sense of relief with, okay, we have a direction, we have a plan, we have tactics, let’s go again. Now that’s my experience of it. I imagine a bigger company as a company gets bigger. It’s more and more challenging to do with communication properly a strategic pivot. But all the ones we’ve done and we’ve done a few little pivots have always been very rapid and gut 

Speaker 2 (14:55): 

Led. The leading Cleantech podcast is brought to you by Hyperion executive Search, Hyperion, a specialist executive search firm working with some of the most innovative Cleantech companies in the world, partnering with leading Cleantech VCs as well as directly with founders and entrepreneurs in the sector with our clients, we are driving and enabling a strong and prosperous C Cleantech economy. Well, clarity, absolutely. I think we touched on this before, clarity is so important when you’re going through these signals, people are on the journey with you and they’ll believe in you, they’ll go well with the journey. Hopefully most of ’em will come on the journey with you. If there’s clarity of mission and there’s open and honesty around that, and I think so many founders don’t engage or dunno how to bring the team with them and sometimes that can cause issues. So it’s great that actually you find that ability to communicate and provide clarity that’s enabled you to get to the point where you are now, which is how many heads are you now roughly 

Speaker 3 (15:48): 

Between 50 and 60. Just to comment on that though, I think it comes down to your, look, I’m in my mid thirties, I’ve never been a CEO before, so I’m working this out as I go along. And lots of the people in our business have never done the kind of seniority that they have within our business before because we hire a lot of young people and people with less experience, lots of wild cards. We can talk about that later on purpose. The point that I’m saying here, this is doing these kind of change management in the business I think is much easier if you are really intentional and you have protocols around ensuring that people have context in the business. There’s a lot of business buzzword of what I just said there. Lemme tell you what I actually mean. I being radically transparent to telling everyone all the information that they need to do that they need to know and something they don’t need to know in order for them to have the context to make decisions for the business. And we do that so everyone can access the business plan and I present the business plan to the team regularly. We’re doing whatever it’s, whether it’s hiring, fundraising, all of the kind of taboo subjects in the business, we’re transparent about that within the company and it makes such, builds so much trust. I’m not saying we always get it right by any means, but it means that when you do need to change direction, people are already with you. 

Speaker 2 (17:07): 

Yeah, no, I think it’s so fundamentally important and I always think, and obviously I see it from the other side of the coin and what makes people stick with companies, why do they stay, why do they go through these trials and tribulations? And obviously there are a number of reasons, but clarity and openness and transparency are one of the key things that talented people will stay with you because they think they can obviously if they buy into and understand what is your mission, they see a path for them to be able to contribute to it. But if there’s any kind of vagueness around the mission or any kind of, I’m not being told the full picture here. They’re the people in as headhunters, we knock on their door, they’re like, oh, interesting. Tell me something about that. But if they’re really bought into the mission and understand exactly what the challenges are, what and all, they’re the ones who say, well actually do you know what? I’m just going to stick out. This is going to be a fun journey. 

Speaker 3 (17:50): 

Well, my proudest point about Modo, I have lots of them because we’ve got such an excellent team who do amazing things every day, but people don’t leave this company, they just don’t leave. So we’ve had one person leave in however many hires, so people sometimes leave, they don’t pass their probation fine. I think all businesses should do that and we’re very proud to have a very high talent bar 

(18:13): 

And expectations of team members, but people do not leave Modo because they get a better offer or they want to go and do something else. And that is we must be doing something right. There must be something about this team and this community and this purpose between people want to stick at it even though it’s really hard and we create an environment which is incredibly challenging, don’t get me wrong, must be the hardest place to work for most of our staff ever. And they’ve all done incredible things, but they don’t want to leave, so we must be doing something right. 

Speaker 2 (18:44): 

No, it’s a good testament for business and again, being on the other side of coin, it’s the business is where people are always open to a conversation that you know there are issues within that business, those who say thanks but go away that there’s a sound business underneath. Let’s look a little bit at something you touched on there and we spoke about before was the journey from yourself personally or for a person in this transition as a CEO. There’s no sort of rule book from a startup CEO point of view because everything changes all the time. How have you adapted to being the CEO with three people to the CEO with 10 people, to the CEO EO with 60 people? That’s a really interesting journey. So any sort of insights or experiences there that you can share with those listening who perhaps are either going through or have been through or perhaps are yet to go through some of those challenges? 

Speaker 3 (19:31): 

This is a whole podcast in itself, but where to start, it’s just a few of you in a room and you call yourself the CEO. You’re not really the CEO, you’re just the person who every now and again has to make a decision when no one else wants to. But I think at this position where we are at the moment with a fully functioning board and 20 million of capital raised and a growth plan to be in four continents next year, it starts to feel like I am actually a CEO. And along the way there’s been a general journey. I’d say the big things are every six months or so it feels like the job’s completely changed, the job description has changed and the way that I fulfil that job has to completely change. So I had to constantly reinvent myself. And I do that with a really great team. 

(20:17): 

I’ve helped. So I have a coach for example, an executive coach who’s terrific. I have a really supportive board who have been incredibly, they’ve been behind me all the way. That’s a great foundation. And then other mentors around who I go and ask lots of questions about. I think the key thing to, I’m saying this now at 50 people, when I get to a hundred I’ll say something completely different, but at this particular stage with all this change and lots of high stakes decisions being made, a lot around international expansion and people getting promoted and lots of other things, customer conversations, all that stuff, I think the trust element is more important than anything else. And I think what 

(21:01): 

I’m very lucky, I say lucky, fortunate is that because we’re transparent, there’s been a lot of times where over the last five, six years of running this business, people have seen Tim and I, but also the management team do the right thing even when nobody’s looking. And this is not an optics thing, this is what’s an ethical way to run a business for the best interest of the whole team, not just the founders or the management team or the board, right? Because everyone in our business has got equity in the business, everybody’s a share option holder and they take it very, very seriously and as they should. And so I think now that we have enough touch points where even when things get really tricky, we’ve taken the hard routes which might be more expensive and more painful because it’s the right thing to do. I do believe that the trust is there and once the trust is there, people will support you even though you’re going to make mistakes. And I make loads of mistakes all the time and I’m given a lot of leeway because the trust is there, but the job changes all the time. Definitely not perfect talent. I’ve got some incredible people who guide me and wouldn’t be here without them. 

Speaker 2 (22:07): 

Cool, thanks for sharing that. So there’s a couple of things there then one of which, just picking up briefly because a conversation that comes up with some of the great founders I’ve had on the podcast so far is around that long-term view. And that’s the decisions that are made for the long-term and the longevity of the business and those in it versus those which are the shortcuts or the shorter the term or the more self-interested things. And that can be really tough when you fly in the plane by the seat of your pants sometimes, and it can be easy to be tempted to perhaps take an easier option or a shorter term. But when you have the concentration on the long-term view, it sounds like you agree with, perhaps you could just touch on that as well, that the decision making with that long-term view is actually what gets you to the long term ultimately. 

Speaker 3 (22:54): 

Well, to start with this, I actually would say the opposite. So there’s a big vision. We know that the market is a rapidly growing market, lots of investment, lots of capital moving into the sector. It’s very complex problems to solve and I can talk about the vision till the cows come home, but really I think the secret source and magic of a company that moves with the kind of speed that we move with, which is doubling on pretty much all metrics or sometimes higher, more than doubling every year. So we’re a hundred percent year on year growth company and that deck covers pretty much all of our metrics and that’s a very inorganic way to grow a business. You have to do that with force. You can’t just do it by letting things happen. And I think the way to achieve that is, well actually I believe execution is way more challenging than strategy and actually executing with urgency on everything you do and an extremely high intolerance for mediocre is a much bigger advantage to a business that’s moving quickly than these strategy. I know that if you go to business school, you learn about Southwest Airlines and Hub and spoke and all these Coke versus Pepsi and all these case studies, I don’t believe it. I think the magic, having worked in a few companies before this, the magic is an execution and that comes with leading with urgency and really the stain for average. 

Speaker 2 (24:25): 

Yeah, well perhaps we sort of missed it. When I talk about long view, it’s the long-term looking after your customers and your staff and your knowledge that yes, it’s going to be rocky execution fast for sure. I don’t mean slow down things that in all of these industries that we are involved with are exceptionally quick, but it’s not taking the shortcuts. I think you would put it as doing the right thing even when no one’s watching. That’s the kind of thing I was referring to. The other thing, go back to the challenge of your role or the role of A CEO growing or changing fundamentally very significantly over the course of, I should say from the three to the 50 to the a hundred people is reinventing yourself. And going back to that sort of communication, how have you personally dealt with that? You say obviously you’ve got to reinvent yourself every 18 months or so and you’ve got some good people around you and boards, that always helps of course, but what are some of the challenges or perhaps more the tougher times you personally have had to go through in this journey so far? 

Speaker 3 (25:24): 

I guess the thing I should come clean on is I have a bit of a cheat code, which is that my mom is a speech and language therapist and a communications expert. So I’ve always grown up in a household where communication has been drilled into me, all elements of communication. And then when I was growing up, I was really into drama, so I’ve always enjoyed performing. So those two things together means I’m actually quite comfortable up on stage. I really enjoy working with anywhere where there’s an audience, I’m probably a bit of an attention seeker, but it does mean that I’m comfortable in articulating generally ideas. But the things I really struggle with are, when it comes to communicating very tricky stuff to the team that may not make everyone happy, but I believe is the right call. But it certainly isn’t a call to be likeable, right? 

(26:22):