The following interview is a conversation we had with Arvin Ganesan, CEO of Fourth Power, on our podcast Category Visionaries. You can view the full episode here: $20 Million Raised to Build the Future of Energy Storage.
Arvin Ganesan
Hey, I’m doing good. You?
Brett
I’m doing pretty well and I’m super excited for this conversation. So I see that you’ve dedicated your career to climate change mitigation. I see you worked at a lot of different companies. I don’t want to try to do this bio and butcher it. So go ahead and tell us a little bit about yourself, a little bit about your career, and tell us about the work that you’ve done before. Work hour.
Arvin Ganesan
Yeah, thanks again. Im really excited to be on. Yeah, ive worked on climate change for my entire career and its kind of a different background from a lot of founders and CEO’s. I started really working in government as an advisor to a senator in the two thousands, went into the Obama administration, became a regulator at EPA, went on to Apple where I led their global energy work and now here I am as CEO of fourth power. The way that I think about it, so were a long duration battery company and that means working a lot with utilities and this is one of the most highly regulated spaces in the world. So the way that I think about all this is that getting technology to market in this space is more complicated than just building something big. It’s about understanding your customer.
Arvin Ganesan
It’s about understanding how regulations and regulators work. So that’s my career and that’s how I think about things. Here. At fourth power, when you were working.
Brett
In government, was there this master plan that someday I’m going to jump to a big corporate or someday I’m going to jump to a startup. Like was that in your mind or where did that begin for you?
Arvin Ganesan
Man, I really admire people who have a grand plan in their life. To me it was always like I knew these are issues that I cared about and I worked in these jobs and I started pulling on different strings and I realized that everything is connected, of course, and realized by experiencing things where it is. I wanted to make a difference. So, no, I wish I could say this is the part of the grand plan, but that’s not really how I approach life.
Brett
I think most people don’t really. I don’t know. I think everyone has maybe high level plans. But when you really dig into it seems like most of the paths tend to vary a little bit from that master plan.
Arvin Ganesan
See, I think that people look at their life and look at their career and they try to draw patterns out of it. So they look at things they’ve done and they say, oh, yeah, this is part of this arc that I’ve thought about for quite some time, when really every decision they made along the way is like, do I want to live in this city? Kind of decisions that are not necessarily strategic, but we make it think like we have some sort of strategy around those things.
Brett
Yeah, makes us feel a little bit better. At least talk to us about making that leap from the EPA to apple. What was that like?
Arvin Ganesan
So it was great to go way back in the energy markets into the mid to late two thousands, actually. I guess this would be 2013, 2014. At that point in time, there were still new coal plants being built in the market. They were still economical, they were still getting dispatched. And a lot of the pollution impacts from coal plants were not being internalized in the costs of building of these plants. That was the time period where a bunch of different pressures, including regulatory pressures from the EPA, started to really shift the power markets, the electricity markets on their head. Those are the first years where coal stopped being built and started getting replaced by renewables and natural gas. So I was at EPA working on a regulation at that point that really changed the arc of how power is dispatched in the United States.
Arvin Ganesan
So going from a regulatory perspective to then a job at Apple, where I oversaw a team around the world helping Apple, as well as its suppliers, work with utilities around the world to get renewable generation. So he was kind of looking at the same problem from a different vantage point. We were trying to, at Apple, use our purchasing power, and the commercial demand of renewables as a customer could change things from the outside. So it was the same problem working from a completely different perspective. And I think what I learned to appreciate was if you’re a utility in Thailand or a utility in Kansas, you’re really driven by the same exact thing, which is you got to keep the lights on and you got to keep costs as low as possible. There’s different drivers outside of those things.
Arvin Ganesan
But that is what it means to be a power provider anywhere in the world. Once you can kind of figure out how to work within the constraints that a customer has, you can start to get really great things done, perhaps.
Brett
Not publicly, but in private. A lot of founders aren’t fans of regulators. I think they view regulators as the group that sometimes stifles innovation. And then you probably have a long list of other things that they could say to criticize regulators. What do you think people get wrong about what it’s like to be in a regulator’s shoes?
Arvin Ganesan
I mean, it’s knowing your customer. Look, at the end of the day, nobody likes to be told what to do, but that’s the world we live in. I think one of the biggest reasons were saying we’re going to be a successful company is we understand the nature of what it means to be an energy company, which means there are utilities that are governed by regulations, that are overseen by public utility commissioners, that are overseen by the federal government. Is it the design that everybody in the world wants? No, not necessarily. But is the design we have? Yeah. And the sooner you understand how the system works, the sooner you can make your products be palatable for those different interests. And look, I think everybody has a really important job to do.
Arvin Ganesan
It’s really interesting, the history, the whole reason why the electricity system is regulated is you go way back to the early 19 hundreds, and Thomas Edison has his Pearl street station in New York, a first power plant. And the way that those power plants worked is you had a wire going directly from the generation directly to a house. Now theres different people who are doing generation. So the kind of streetscape in New York was just like wire after wire. Im an Edison customer. Im a customer of this generator. And it was a completely deregulated system. What ended up happening over time, particularly with tbas expansion and the new deal in the forties, was that there’s a trade made, which is utilities got monopoly rights to specific areas. In exchange for that monopoly right, they were guaranteed.
Arvin Ganesan
And in addition to that monopoly right, I should say they were guaranteed a rate of return. But that rate of return had to be approved by regulators. The rates were fair and just and the investments were right. So this whole system that we’ve created has existed for a century and a half, and that’s what led to electricity being available to every american. So there’s a long history and one that I respect, and the very long answer to your very short question is you need to understand how to work within the boundaries and understand that regulators have a very important job to do.
Brett
Clay, have you watched the show the men who built America? It’s probably like ten or 15 years old now.
Arvin Ganesan
No, I’m googling it right now. What is it?
Brett
Oh, it’s so good. It’s kind of like the Rockefeller days, Carnegie days, all of that stuff. But they do have another episode on JP Morgan. Yeah, Morgan is the first one to ever have an electric home in America. And it really kind of tells that story of those early days of the electricity market. You know, a lot of the fights that were happening. It’s just an awesome documentary. I think it’s like a six part series.
Arvin Ganesan
Oh, I love it. I mean, look, the electricity markets have changed a lot and also not changed a lot over the last 150 years. But I, in order to be successful with getting your product to market, you really need to understand the why and understand how to make the two objectives of more reliable and more affordable power possible for regulators and utilities.
Brett
Trey. Yeah. Makes complete sense. I have to imagine for many people in the world, working at Apple as head of global, anything would be a peak moment for them. They’d be very excited to be there for you. You left that. What was it like in the days leading up to that decision for you to leave Apple and join for power?
Arvin Ganesan
I guess I have a philosophy which is that the law change is good and it’s important. Every job I’ve had, I’ve learned that what I thought was immutable fact is actually just like reflective of the vantage points that I’ve had and every new job I have, I understand a little bit more about how to really make a difference. So it’s really important to me to switch things up every five, six, seven years, something like that. So that is just a core belief that I have. So I was at Apple for about five and a half years and also we’re at such an inflection point when it comes to climate technology in the markets. This is kind of a generational moment to get clean energy onto the market.
Arvin Ganesan
I’m sure we’re going to talk about this in a second, but electricity demand in the United States has been flat for basically my adult lifetime for the last 25 years. Thats about to change in a big way. One chat GPT query takes up ten times the energy as the same Google query. The markets are about to shift and the amount of energy we need is huge. So were in a moment in time where I felt theres a huge difference that I could try to make and try to contribute towards. So I didnt really pause and think about it a lot because I tend to look forward instead of looking back.
Brett
You said there change is good, I completely agree, but change is also hard. How do you force yourself into these positions to make change happen?
Arvin Ganesan
From my perspective, it’s about being able to be in a position where you can take risks. All risks don’t work, by the way. There’s plenty of risks I’ve taken that don’t work. And I think we in general don’t really like talking about how risks can yield bad things as well, but they do. It’s about taking risks to put yourself in a position where you can accomplish something great, that doesn’t mean you always will, but puts you in a position where you could. So yeah, I hope that answers that question.
Brett
It does. Obviously joining any startup is a risk. Like you said, maybe in the media it looks so cool and easy. That startup sells for a billion dollars. But the reality is that most startups fail or they don’t work out. What was it about the fourth power opportunity that made you say, yep, that’s it. That’s a risk I’m willing to take. That’s a problem that I want to tackle and I want to be part of this mission.
Arvin Ganesan
Well, we’re not going to fail, so I should start with that point. Yeah, so it’s a couple of things, I mean very personally. So as were talking about earlier, I have two kids and being parent is super important. I’m an engaged parent, as is my wife. And this company has founded by a professor doctor Ashe Gunn Henry. When I first met him, one of our investors tried to connect, tried to recruit me into a CEO job for a while. But when I met Ashe I remember hes like, hey, can we meet at a cheesecake factory? And I was like, okay, cheesecake factory, that sounds good. I haven’t done that in a minute.
Arvin Ganesan
And he brought his three kids and it was actually then when I realized from a personal perspective, this is somebody who I could work with because we have some of these very shared values around family. So thats kind of personal side. On the technology side, in the next 20 years therell be two terawatts of storage thatll get built if things go right. The market opportunity associated with storage is enormous and anybody whos watching this space even peripherally knows how big the market for storage is. The thing that really drew me to fourth power was the scale, right? Were talking about 1 batteries convert that a little bit further that can power hundreds of thousands of homes continuously for two or three days. It’s not only the scale, but it’s the materials that are used. Right.
Arvin Ganesan
Like things like lithium carry with it the baggage of really difficult supply chains, trade issues, human rights issues associated with mining. And the approach that fourth power can take is it uses a form of carbon called graphite. And carbon is the 10th most abundant element in the world. So if you can start to build a clean energy revolution based on a theory of abundance, it can really unlock the market thats going to be unleashed in the next 20 years. So thats why this didnt feel like a risk. This felt like an informed leap of faith.
Brett
Trey, maybe lets zoom out a little bit and just talk about at a very high level, what do you guys do exactly. So whats like the, I hate to say this word, like the elevator pitch or this phrase, whats the elevator pitch behind the company?
Arvin Ganesan
Yeah. So the other pitch is very simple. So we store energy for a long period of time, electricity for a long period of time, and can use it whenever the grid needs it. So the more renewables that are being built, unless you can consume it, the moment that the generation is being produced, they’re curtailed or thrown away. What we can do is store that thrown away electricity in the form of heat for months at a time and then convert it back to electricity whenever the grid needs it. And this is absolutely crucial because there’s already places in the United States, like California, Nebraska, Kansas, that are experiencing significant amounts of curtailment. This makes the electricity grid cheaper and cleaner.
Brett
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Brett
Now back today’s episode. Now, there’s a lot of startups that have raised funding in the last couple of years trying to really tackle this energy storage problem just to help our listeners. You kind of understand what this market looks like. Maybe we can break them into buckets. What are the different buckets of startups that are trying to solve this?
Arvin Ganesan
Yeah, so there are companies that are trying to use energy storage for industrial heat. So they’re taking this curcule electricity, storing as heat and using that for industrial applications. There are others that are using different types of mediums to store that electricity as heat and convert it back to electricity. Like ours. We use carbon, we use graphite blocks and we use tin. There are others that are doing long duration storage. So company called form does 100 hours plus storage using iron ore oxidization. And theres a bunch of different novel approaches to solve different issues. The way that were thinking about it is its not about any duration of storage, but its how do you make it as easy as possible for the customer.
Arvin Ganesan
So for us the power output and the storage are completely decoupled so you can build a power output to say I dont know, 10 mw or something like that. And you can kind of add on how long you want to store energy super easily. So you can kind of add on over time. But the idea is every grid is going to be unique, every utility is unique. So we build products that are very bespoke to what any individual utility or customer wants.
Brett
I see you’re backed by Bill Gates. What’s that like?
Arvin Ganesan
The breakthrough energy Ventures is a fantastic investor that have absolutely deep technical expertise in a range of issues. They are motivated by climate, but very informed by making their investment sound. They don’t think about this as climate first. They think about this as climate aligned with kind of smart capitalism, I’d say so. They’re very involved not only on the technical side with respect to climate tech, but also on how these products get monetized. They’re patient and careful investors.
Brett
Going back to what I mentioned there at the men who built America, I may get some of these details wrong, but I believe it was Nikolai Tesla who was really trying to evangelize this idea of AC. And I think it was Edison who was really evangelizing AC. Obviously one of those losses, one of those won for you. What are you doing to evangelize your point of view on energy storage and make sure that your solution, your approach, is the one that gets adopted by the market and used by the market.
Arvin Ganesan
Jordan? Yeah. Again, this is about understanding the customer. Theres two things that are going to determine what solution gets purchased, dispatched or procured by utilities. The number one is going to be cost.
Brett
Right?
Arvin Ganesan
That makes sense. When we say the cost of batteries, that really means how much are ratepayers, how much are you and I paying in our utility bills? And this really matters because one in five people in the United States cant pay their electricity bill. So in order to get purchased, to get dispatched, you need to have the cheapest solution possible. And that’s really what we drive towards. The cost of our battery is one 10th the cost of existing battery technology, existing lithium ion battery technology. It makes a huge difference. It makes the future look much cleaner and more affordable to everyday rate payers in the United States. The second thing is, are you contributing to a more reliable electricity grid? Are you giving utilities and grid operators the same amount of control, precision, and as good control and precision as they have now?
Arvin Ganesan
And that’s why we’ve designed our battery to provide kind of exact same control systems as a natural gas plant, to have instant response time, just like a natural gas plant would. Because unless you’re making the experience of providing reliable power easier, and unless you’re doing it at lower cost, there’s always going to be alternatives. So its actually very straightforward as to how you own this market.
Brett
Trey, what are you doing from a marketing perspective, thats really working right now?
Arvin Ganesan
I think that a couple of things. The scale of how much storage you need is so big that the market is really interested in technologies that have a supply chain that can meet the moment two terawatts of power. Just the basic design of our system allows us to operate from position of abundance. And so our customers and investors are looking for the technologies that scale, and that’s what we are. The second is, again, understanding our customers. When we talk with our customers, we’re not talking about leading with carbon. We’re not talking about all these things that might be very motivating. But we understand our customers so deeply. We talk about how we’re able to make their avoided cost tests when it comes to integrated rate plans easier for storage.
Arvin Ganesan
Were talking about how we can make these renewable assets feel like theyre actually power plants. And that might not be sexy. That might not be a Time magazine article on best climate technologies, but it really resonates with our customers, and thats the approach we take.
Brett
Preston, as you think about bringing this technology deeper into market, whats keeping you up at night?
Arvin Ganesan
Well, a lot is keeping me up at night, but the sheer scale of what we have to do, the fact the market is going through immense transition right now, and really what keeps me up at night is that the projections for how much power we need are much lower that we’re projecting, even though we’re projecting significantly more power consumption that we’re still off. And we’re underestimating that because what we can’t have happen as we electrify everything, is use more fossil fuel in this transition. That keeps me up from a high level perspective, from a company management perspective, we’re building novel technology, which means we’re doing things that nobody has ever done before. And you uncover that things are more complicated than you uncover that things are less complicated. We have a world class team. We’re spun out of MIt and Georgia tech.
Arvin Ganesan
So a lot of the people we have are the built for this. But every day poses a new challenge and an opportunity.
Brett
What’s the top problem you’re trying to solve right now?
Arvin Ganesan
Right now, the way our system works is you pump liquid tin that’s heated up to 2600 degrees celsius to help move the heat from where it’s converted from electricity to heat deep into these carbon blocks. And so we’re pumping liquid tin, its theoretical highest point, before it turns into a gas. We have done this before and we have world records with respect to the highest, actually Guinness world record around the highest temperature pump in the world. But we’re dealing with super hot materials. So what’s keeping me up at night is how do we prove the durability of some of these novel pumps? We’re making really awesome progress on this, and we’ll have some pretty cool results to show later this summer.
Brett
And just so our audience can understand here, at what stage of commercialization are you today?
Arvin Ganesan
Yeah. So this technology has been in the works for the last decade or so. It has been kind of at the university level kind of tabletop work done at MIT in Georgia Tech, and that was the first integrated demonstration of this technology. We are now currently building a 1 demonstration about 30 miles north of Boston. And that will be our first kind of integrated demonstration of that size that’ll be online in 2025 next year. And we are currently negotiating with a handful of utilities for the first pilot, which will be around ten megawatt hours, which will go will commence construction in early 26. And we expect our first gigawatt hour battery to undergo construction in the 2028-2029 time period.
Brett
When you’re selling to your utilities, what’s that buying cycle like? I have to imagine it’s not a quick deal.
Arvin Ganesan
No, no, it’s not. You can’t do it on Amazon prime. It’s a long period. Right. So you asked a question about regulators. Most of these expenditures need to get approved by regulators. So it’s not a one side negotiation. It’s complicated. One that involves utilities. These tests called avoided cost tests, like are they building technology out that services their ratepayers? Utility regulators have to approve that as well. They update their procurement plans every one, two or three years. So it’s a long slog with respect to getting into these procurement calendars and timelines. But that’s the best part about being so focused on our customer, which is when you have a motivated customer you’re working with, you’re able to understand and work within these timelines and the size of these projects.
Arvin Ganesan
The impact on the energy markets are so large that we are planning for this sort of time horizon in the sales cycle.
Brett
As I mentioned there in the intro, you raised over 20 million today. What would you say you’ve learned about fundraising throughout this journey?
Arvin Ganesan
Well, it kind of goes back to how I try to live my life, which is credibility is gained in drops and lost in buckets, and we’re trying to raise funds and working with people is a lot about kind of coming from a place of honesty. And I think that one of the most freeing things that I’ve learned during this period is being able to say what you know is great, but being also able to say what you don’t know, I think is really important in the fundraising process, because my suspicion that is fairly well informed is that overstating things causes pretty significant damage to your credibility when you’re trying to raise funds.
Arvin Ganesan
So kind of the ethos of fourth power, what we’re trying to do is speak very carefully, very deliberatively, use the scientific process, get things peer reviewed, and be very diligent in the claims we make, and try to support things with data where possible.
Brett
With deep tech like this, how do you even begin to share projections and timelines for what could happen? I would have to imagine that’s not easy to do.
Arvin Ganesan
No. And it definitely involves modeling. Right. Like, understanding the price of graphite is complicated. But again, I think what we do is we do have a lot of projections. We make projections. We are very transparent with the assumptions that we make, and we toggle assumptions up and down to show kind of conservative and not conservative cases. But I think that there’s a big recognition that deep tech does have a fair bit of variability with all of these different kind of projections you make out in the future. So we embrace that.
Brett
Let’s imagine that a deep tech, climate tech founder comes to you and they say, hey, I want to build this company. I’m going to be selling in a highly regulated market. Based on everything that you’ve learned, everything that you know, what would be that like? Number one piece of advice that you’d have to give them?
Arvin Ganesan
Number one piece of advice I’d give to a founder who wants to operate in a highly regulated space is don’t try to break it. Don’t have the first thing you try to do for the approach you try to take to say, hey, this doesn’t make sense. We’re going to break it and start something over. What I would do is deeply understand why it is the regulators are involved, understand the legal and regulatory dynamics of the markets you’re trying to get into. Try to figure out where there are wins between the interests of the regulator and the company. And, you know, I’m not saying don’t ever try to change the existing paradigm, but if you’re going to do it, be very informed on what you’re breaking and what you’re changing.
Arvin Ganesan
And understand that it’s a slog because the regulatory system in highly regulated areas have been around for a long time, and it takes commitment to changing that if you approach it that way.
Brett
Final question for you. Let’s zoom out three to five years into the future. What’s the big picture vision look like? What’s the company going to look like and what’s your impact going to look like if you look at that every time scale?
Arvin Ganesan
I love that question. Three to five years from now, well be putting out our first commercial 1 batteries. What thatll look like is we will have innovative engineering solutions. Right. Weve moved from the R and D phase of this deep tech company to an engineering phase where were doing manufacturing on site. We have local manufacturing hubs for graphite. We are producing reliable, low cost batteries and it now becomes not a climate play, but every utility and every regulator wants to build a bunch of solar and our battery because it just makes sense for their customers. And we’re not talking about carbon, we’re not talking about that. Where this just makes economic sense for our customers.
Brett
Amazing. I love it. We are up on time, so we’re going to have to wrap here before we do. If there’s any founders that are listening in that want to follow along with your journey as you build and execute on this ambitious plan, where should they go? Where can they follow along?
Arvin Ganesan
Awesome. Thanks for that. They should follow us on LinkedIn. We’re fourth power and my twitter is Arvin gannison. Arvin Ganesan. My twitter handle. And we try to do a good job of keeping folks updated on our journey and understand that we’re part of a larger constellation of folks trying to do great things. So really appreciative of your time, brett, and I hope this was an interesting listen.
Brett
Definitely interesting. Definitely learned a lot. I know the audience is going to as well. So thank you so much and wish you the best of luck in executing on this vision.
Arvin Ganesan
All right, thanks, guys.
Brett
This episode of category visionaries is brought to you by Front Lines Media, Silicon Valley’s leading podcast production studio. If you’re a B2B founder looking for help launching and growing your own podcast, visit Frontlines.io podcast. And for the latest episode, search for category visionaries on your podcast platform of choice. Thanks for listening, and we’ll catch you.
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