Entrepreneurs for Impact (EFI) Podcast: Transcripts
#108:
Green Hydrogen Project Development by Cleantech Veteran — Jake Susman, CEO of Ambient Fuels
Chris Wedding:
Jake Susman, welcome to the podcast. Finally, we made it happen.
Jake Susman:
It took a minute, Chris, but here we are.
Chris Wedding:
The listeners by now have heard in the intro your many titles and accolades, helping to lead a lot of wind energy investing at Goldman or your ability to see the future, slight wink-wink, in starting a green hydrogen company before the IRA made it extra sweet to do so. So, it'd be easy to start with one of those super obvious spots. However, I'm going to take us back to a very tiny cafe in Manhattan about two months ago, where two grown men were sharing a pink, bubbly beverage, probably with flowers infused somewhere, hibiscus, rose petals, something super manly on top of our coffee beverages. So, tell us about that, Jake.
04:49
Jake Susman:
Yeah, there was definitely some hibiscus going on. I'm certain of that. We were actually in one of my favorite parts of the city. So, I live in Brooklyn, us Brooklynites take pride in only going to New York City when we have to, but whenever I get down into Manhattan, that area, Lower East Side is where I love to be. Right down the block from where we were is one of my favorite reggae record shops and you can get all kinds of amazing foods from all over the world right up and down that one area where we were sitting. But look, this was just a sunny fall afternoon and I think you were in town doing business. I had the great pleasure of not only sharing a coffee, but sharing that pink bubbly with you. I felt quite manly as part of the effort.
Chris Wedding:
Nice. If only I had the kind of manly facial hair that you have. Mine's all on the head. Anyway, it balances out.
Jake Susman:
Yes. Well, I'm aiming to keep as much on the head as long as I possibly can.
Chris Wedding:
Yeah, I hear that. This is a fun little personal note. When I sleep, all this hair goes on top of my head and when I was in Japan, the kids would all call that something like chonmage. I'm sure I'm pronouncing it incorrectly, but basically, it's the style of hairdo that samurais would have, the bun on top of your head. Anyway, I'm not as young of a spring chicken these days and so my 14-year-old was like, “Oh, daddy, I see more of your hair up there when you pull your hair up.” I was like, “Yeah, son, thanks. Let's talk when you're 47.”
Jake Susman:
Exactly.
Chris Wedding:
Anyway, good times.
Jake Susman:
Nice.
Chris Wedding:
All right, so Jake, we're going to spend most of our time talking about Ambient Fuels, which you founded, again, well ahead of knowing the IRA, Inflation Reduction Act, would help make green hydrogen project development so much more attractive. But before we do that, this is not your first rodeo. So, tell us about, I think it's Own Energy, which as I recall, you took it to the full venture cycle and had a delightful exit to a global energy conglomerate. That was, I'm sure not all sunshine and rainbows. Tell us that story, Jack.
Jake Susman:
Yeah, and if you'll permit me, Chris, I'll even take you further back to when I started my entrepreneurial journey. So, from Philadelphia, after college, I was working in what was the biggest Philly regional bank called CoreStates in an extremely boring job, underwriting standby letters of credit for insurance companies that would never be used. But fortunately, met my wife Jodi, who is now the CMO of Budderfly, an energy efficiency company. We both had an interest in Spain and so we moved over there to Madrid in 1999 and met the most entrepreneurial person who, not only is still in my life, but I happened to get a cocktail with him last night, Gerrit Nicholas, almost by chance.
07:46
Gerrit at the time was running AES's business in Spain and I pitched him like, “Hey, wouldn't you like an extra set of hands that speaks decent Spanish and knows how to model?” Anyway, make the long story short, we were building this big old gas plant, but Gerrit turned to me and said, this is 1999, “Hey, Jake, renewables, wind energy, seems to be getting serious over here. Why don't you check it out? Why don't you see if we can make something happen there?” And other people inside AES literally laughed at us for spending time on wind. Solar was not even really on our radar.
Chris Wedding:
More of a joke. Yeah.
Jake Susman:
Right? And thankfully I got that entrepreneurial push from the person who I refer to as jefe and just never put it down ever since. So, went to business school, focused my studies on entrepreneurship at Wharton, went to Goldman, which doesn't sound entrepreneurial, but was in a group called the Special Situations Group that really had a lot of acts and a lot of leeway to do interesting and unique things.
Within SSG, it had started investing in wind energy about a year or so before I went into that group, and that eventually became the alternative energy investing group. We owned Horizon Wind Energy, which is now the guts of EDP Renewables here in the US and we also owned the largest share of SunEdison, which is how I know my friend, Jigar Shah, really well from going back a long time.
I got to learn the wind industry after seeing it in Spain, I got to learn the US version from the inside out and from a really nice perch where working with the amazing senior leadership team, Michael Skelly, et cetera, from Horizon. But then also meeting all their contexts and learning all their best practices, that positioned me to go out and start Own Energy.
So, I had to bring you up to speed there, Chris, but flipping over to Own Energy, we had a real nice exit when we sold Horizon to EDP. I think it was the first billion or more exit of a renewables company in the US. Check me on that, but I'm pretty sure and that teed me up nicely to go out and start my own entrepreneurial journey.
Now, quick note of history, there had not been many, if any, venture capital backed renewables developers as of that time. I think we may have been the first and so that early on set us on a little bit of a different path than I think most people are accustomed to thinking about around renewable generation and building big infrastructure. And being the only venture backed wind developer really gave us an entrepreneurial bend that gave us a leg up around the industry. Not least of which, Chris, because when the trend towards corporate purchasing of renewables started around 2010, 2011, we felt like we had similar DNA to companies like Google and other big successful tech companies that were starting to buy wind and solar back then.
So, some of our larger scale brethren were like, “We'll see if this turns into a real thing,” we were like, “Hell yeah, give us more of that.” We just started chasing these corporates all over until we finally landed our first couple of contracts.
11:30
Chris Wedding:
Just going back a note or two, your friend in Spain at AES, who gave you that helpful nudge, you call him el jefe, this is like chief, yeah?
Jake Susman:
That's right.
Chris Wedding:
Nice and you mentioned the Special Situations Group at Goldman. I think for folks who haven't heard of special situations groups, I always think like they do cool, weird shit.
Maybe it's distress, maybe it's not, but it's a little bit like skunk work perhaps, will the following work, right? So, if listeners are entrepreneurial, but they want to maybe start in a larger financial institution, the special situations groups can be interesting.
Jake Susman:
There's no doubt. You definitely have to fact check this one, Chris, but I remember there was at least one quarter where we represented certainly less than 5% of the firm's personnel, maybe like one or 2% and then we generated like 20% of its profits. I think that was because the flexibility you had in that group to do up and down the cap stack, any region in the world, you could own platforms, you could trade public equities, you could do just about everything in between, provided you could make the case for the investment option.
It's like a structured investing way to look for arbitrage around different markets when you're like, holy smokes, wind energy is definitely going to happen in the US, how can we get an angle into this? A lot of that was what led to the argument to go buy and build Horizon.
Chris Wedding:
The numbers you just mentioned there, let's call it, you-all’s group was maybe 2% of the total headcount, but 20% of the top line, let's say, it sounds like a super extreme example of this thing called Price's Law, which I just learned about when reading this book, 12 Rules of Life. Maybe you've heard it, I see you shaking your head, but maybe for listeners, I think it's the square root of the headcount, those people. So, if there's 25 people, five of the people produce 50% of the fill in the blank, growth, benefit, impact, et cetera. So, that was an extreme example, I think, of Price's Law in action, huh?
Jake Susman:
It certainly was. I haven't read the book, I will now. You could extend that logic to say that unfortunately, a lot of times that square root group ends up going somewhere else. It's hard to keep them in their seats for a long period of time because they are so effective, and it's sometimes hard to keep them motivated inside the same shop.
Chris Wedding:
Yeah, I hear that. Before we pressed record, I like to ask guests, what would make this a good outcome, a good podcast? Part of your answer was, I think indicative of the community building, generosity show online, I mean, certainly in person, but online. Part of your thinking was, well, let's also describe the true path of entrepreneurship. It is not the slick bios full of accolades, right? So, being super early, being maybe one of the first venture-backed renewable energy development shops going through the full venture cycle, tell us some war stories, some scares perhaps of it all ending, Jake.
Jake Susman:
Oh yeah. I've got plenty going all the way back to that experience in SSG where when there's that much profit being made by that small group of people, everyone's inner Machiavelli tends to come out and that was certainly the case there. So, that led to some pretty challenging situations.
15:27
We closed our Series A at Own Energy in 2008, a week after Lehman went down and I give big kudos to Tucker Twitmyer, who led the investment for sticking with us. We basically built the whole business during the Great Recession. So, the intent had been to be in the venture capital funding world for a round or two, and then pretty quickly get a balance sheet of our own and try to get to that 100 million backer early on. Well, that became extremely challenging in the midst of the Great Recession. Not to mention the wind industry was still on the come up in the US, policy was unclear and uncertain and a lot of investors were like, “No, I don't think so. You stay over there in venture capital land.”
So, we had to pivot and instead of owning our assets, we ended up being a flipper, as they say, for all except one of our projects. Shout-out to David Giordano and team at BlackRock who took a chance on us to be the owner operator of one of them along the way. But no, like everything was a trade-off during the Great Recession.
We did one financing round. I won't name the entity here that I would not do again and it was because at the time we really needed the dough and we were willing to trade most things, just about anything in order to get through at a time when the production tax credit for wind had not been extended. So, not only were we getting low on cash, but we didn't have a lot of certainty about the future of the industry yet. We did this trade where we pledged a big chunk of our future to this investment firm, this investor, and it really came back to bite us later. Because everyone was convinced that there was alignment when it turned out that in certain really important situations, didn't actually have the alignment we thought we had.
I'll go into a little more detail, Chris, that later on, when we had an opportunity to truly become a balance sheet player and have our own capital to own our assets on our platform, which was the best thing for the company, this investor said no. That really precipitated the sale to EDF. By the way, Tristan Grimbert's doing a fabulous job there and I love the team that I got to work with at EDF, but that frankly wasn't our first option or what we really hoped for in a final outcome.
So, anyway, I guess maybe the broader, and I can regale you with probably five more of these sort of things that didn't go the way they were supposed to go, but I would just generally make the comment, we're getting close to finishing a capital round now. It has been a markedly smoother process than I remember my first couple of financing rounds all those years ago.
I bet a lot of entrepreneurs who are doing this for the first time in this market are having a similar experience where there's just a ton of interest, a lot of investment firms all want to be active in our sectors, I just would caution you that -- Somebody said this to me yesterday, a lot of those folks haven't lived through winter yet, or had to be a wartime investor or a wartime CXO. Pat yourself on the back, be proud of what you've accomplished, be excited about the future, but then keep your head down and be grounded in the realities of a lot of times things do not go the way you expect it or hope.
Chris Wedding:
Well, I like a lot of that. I just took a few notes here. Just going back to the start where your Series A still closed even though a week before Lehman had gone bankrupt. It reminds me of the importance of timing. There's another story where the Hustle, this newsletter-based company sold to HubSpot 18 months ago or something. I may be getting the story slightly wrong, but it's something like the CEO of HubSpot, maybe it's a month or something after the deal closed, was in a very bad accident skiing. By the way, be careful over Christmas.
20:03
He recovered, but the CEO of the Hustle was like, “Damn, what if that accident were a month before or a week before our deal closing, would our deal still have closed?” I just think the things we can’t control, timing of what happens broader markets like right now, or the team buying or investing in our companies, can't predict, it's a wild card, right?
Jake Susman:
Yeah, I love this theme. I'll go a level deeper. There's a gap sometimes between passion, belief, future vision versus things that go bump in the night that you didn't think broadly enough about different circumstances that could come up. You were blinded so much by your passion and your vision and your belief in the future that you didn't think about some of the practicalities.
Wasn't just Lehman because we already saw some of those storm clouds on the horizon when we went out to raise our Series A in 2008. And thankfully we had the vision piece right, that wind energy was going to really become a big deal in the US and it certainly has since then. The piece we got wrong was the commodity markets, and gas was at nine, 10, 11 bucks, so wind energy really looked economically like it was comparatively better in certain places, at least the energy portion of it. Then by the time Lehman tanked and then Bracken came about, all of a sudden gas went to two. And so, now your comparative unit economics stink and they stunk for quite some time.
So, I say all that because again, as a caution to some of the entrepreneurs who are out there right now maybe doing it for the first time or may be in their first couple of rounds that they're raising, there's something out there that you're not thinking about that's going to really affect your business.
Hopefully not, but probably it'll be a gut punch and just make sure you're set up so that you're resilient, so you can take it. You can take the punch and find a way to keep trotting forward and it's going to take a while. That'd be my other message. Like when we started Ambient Fuels, I set myself on a 10-year path and said, “This may take 10 years,” because they usually do.
Chris Wedding:
Well, that's a nugget of wisdom right there. Think in long-term, not a few years, but 10 years more likely. Part of what you just described, Jake, as a good exercise I like to do with teams is a premortem analysis. Where you say, look, imagine it's whatever, five years from now, the founders are having a beer somewhere and they're saying, “Boy, it's a bummer that things didn't work out because of dot, dot, dot,” and then fill in the blank. Kind of crowdsourcing risk for failure among the broader team, and then prioritizing and of course, creating mitigation plans. Anyway, I think for folks listening, a premortem analysis may be helpful in your venture.
The example you gave of really needing the capital, taking it and then a problem later humorously reminds me of say, you're super hungry on a road trip, all you can find is fast food. You have it, it tastes good going down, but boy, an hour later, where's that rest stop, right? Anyway, I think all money is not the same. All partners within a firm are not the same. So, knowing both the reputation of the firm and of the partner at the firm who'll be on your board, pretty important stuff.
23:47
Jake Susman:
Yeah, and doing your reference checks and talking to other CXOs who’ve been involved with that investor and asking them for the bad shit. Like, what's happened here that didn't work out the way you wanted it to? Or where did it all fall out of alignment? And sometimes you can hear that stuff and still be fine with moving forward. You're like, okay, that sounds like it's within the realm of stuff I could deal with if that were to come up in this case, but you got to ask the question. You got to go do the diligence and see how things have panned out in other similar investments in the past. I feel like a lot of people just run right into these shotgun marriages without really thinking enough about, who am I getting together with here?
Chris Wedding:
Yeah, right on. Okay, we could riff on these topics for many hours, but let's go to Ambient Fuels.
Jake Susman:
Great.
Chris Wedding:
I know we brainstormed before Ambient was created. All right, well, so what could Jake go do? So many things. How did you settle on hydrogen and how do you see the business opportunity set now versus when you decided to launch?
Jake Susman:
So, I got to give another shout-out to a friend, Cliff Adams at Coady Diemar Partners. Cliff and I started doing stuff together when I was in business school in 2003, where we chased a solar acquisition opportunity that far back and just collaborated on a number of things since then. And so, I had a little bit of a pivot after I came out of EDF where I was involved in a sustainability investing effort that has now ended up back at Goldman, but that was no longer a fit for me. One and done on Wall Street for this guy.
Anyway, in figuring out what was the next step out of that, I was talking to Cliff and he had just sold a company called Giner ELX to Plug and he pulled me aside and he's like, “Jake, this isn't that hard. There are going to be developers who do green hydrogen. It's not quite ready for market here and now today.” This is the end of 2020 or beginning of 2021. “There are going to be some developers, you can run the same playbook you did with Own Energy. Why don't you do some exploration and research around it?”
So, Alex Goldstein and I started researching the sector together, put together the bones of a business plan and came up with what looked a lot like a pure play developer, like the great ones we've seen in wind and solar. But Chris, one of the things I realized along the way is there were going to be some really important differences between what worked in wind and solar early on versus what was going to work here. This is a much more technical discipline.
This reminds me a lot of my early period working in gas-fired power, or friends I know who worked in developing LNG plants, looks and feels a lot more like that, where you have some safety topics you need to think about, you have some water and effluent topics you need to think about. The engineering and technical design of these plants is a lot more intensive than wind or solar. And so, we have since then, Chris, tried to really balance our team with, yes, some amazing people who come out of long experience in wind and solar development. But also, a fair amount of people from midstream and process industries and refining and agricultural chemicals, because those are not only the industries that hydrogen is going to sell into, but process-wise and technically, there's a lot of similarities in how you build plants.
27:40
So anyway, saw a lot of the same tea leaves around green hydrogen that we had seen in wind going back to the early arts. You had technology that was coming down the cost curve, but was not all the way there yet. You had some jurisdictions that had at least some incentive in place for green hydrogen or green fuels maybe more broadly, but there wasn't a huge unifying legislation, but you can envision it coming down the pike at some point. Certainly, not this soon, by the way, so we were very pleased when IRA came through.
You had the pool from the target sectors in that there's about a third of the carbon emissions reductions that we need that will not come about through electricity. They need a molecule and this was the most cost competitive green molecule that we could see on the horizon. So, those were the tea leaves that we were seeing. Put together this team, raised some capital from SJ Ventures who’ve been terrific and amazing angel and seed investors to name a couple, Jane Woodward, who sits on our board, Taylor [inaudible – 00:28:56], who chairs our advisory board and I should give a shout-out at SJF to Dave Kirkpatrick who I know you know.
In partnership with this terrific crew of investors, this awesome team, we were just out there learning the market ourselves to some degree and talking to refiners, talking to chemical companies, talking to fertilizer producers and asking them, “Hey, what kind of premium might you be willing to pay for the greenness? We know green hydrogen is a little more expensive than the gray kind you use currently,” and up until IRA got announced, Chris, they weren't biting. Then there were these other future industries like steel and cement, other heavy industrials that use a lot of heat that seemed like they were further out the curve from adoption and then the furthest out the curve of adoption were those industries that require a whole new infrastructure to be built.
So, that could be long haul trucking, that could be aviation, maritime. We weren't even really talking to those folks because it seemed like the cost curve wouldn't really meet their needs until the back half or the end of the decade. Then the IRA came through and now we are in a new world, sir.
Chris Wedding:
Right. So, what if the IRA hadn't come through?
Jake Susman:
It's a great question. Certainly, our investors, the team, and a number of leading pioneering companies out there were all committed to this vision, whether IRA had happened this early or not. I would say that a basic tenet of our assumptions in building Ambient Fuels from the start has been this style of legislation will come through someday in these markets.
If I may, I would modify your question a little bit to say, what if it hadn't come through this early? The short answer is, I think we would be doing smaller plants, we would be doing all kinds of pilot scale stuff for people trying out a little bit for some period of time. Frankly, for the first few years, it would be companies that want to get the headline of doing something green or companies that want to show that they're innovative. Companies that have a very hard net zero or other decarbonization target on their back, for a variety of reasons, would at least take tentative steps in this direction because the cost curve was set to come down.
31:28
Electrolyzers were going to get cheaper, and they're going to have higher yields off of lesser amounts of electricity input over time. So, eventually, the cost curve would have gotten us to parity. We were predicting 2026, 2027, but now we are actually cheaper than gray hydrogen in certain markets around the country. It's pretty amazing.
Chris Wedding:
Wow. I mean, I would make this motion here of my head exploding. Folks can't see that, but you're right. I think that is the response. The legislation was going to happen in some form at some point, and your projects were smaller, your growth would be slower, maybe you took a more capital, more dilution to get there, but you would get there. That was the bet, this again, 10-year play was the bet.
Jake Susman:
Yeah, easily.
Chris Wedding:
All right, so give us the profile of a sample project. Like what is your mold?
Jake Susman:
There are generally two broad approaches that we take. The first would look a lot like traditional industrial scale, utility scale, wind or solar to some degree, where you pick a spot on the map where there's enough indications of current or future demand and the different constraints that you need for your project. Low-cost electricity first and foremost, water, the ability to get a permit, the ability to get grid connection, so you combine that vision of future demand along with some of those basic constraints for a project. Then you say, “Okay, it makes sense to develop here on spec.” So, I'll get some land under control and I'll start working on all those other processes.
We do that less than 50% of the time. More than 50% of the time, we are responding to customer interests and as a result of IRA, we continue to call pretty extensively on refining chemicals and fertilizer who are the largest users of gray hydrogen today. We make the pitch that you should convert some amount of your gray hydrogen feedstock into green. But now some of those industries that we thought were further out the curve, auto and utilities and steel and cement as prime examples, a lot of those folks are looking at this a lot sooner than we anticipated. And even some of those future cases where you need new infrastructure to be built, we think some of those folks are going to come into the fold earlier as well.
So, in all those cases, Chris, what we do is, we have extensive dialogue with the customer. We understand their needs. We figure out what are the pain points and where are the locations where it would make the most sense. Sometimes they'll invite us to build our electrolyzer on their property and other times it'll be adjacent to or nearby, where we'll still be doing product development, but it'll look a little more like C&I Solar, where you really tailor a bespoke project for a specific customer.
Chris Wedding:
If I had to bet, that's what I would have bet on is that it's more the behind the meter, large industrial into just saying, “Yeah, put your electrolyzer, put your plant on our property. You are very important to our future. We don't want to worry about distribution, et cetera.” All right.
34:59
Jake Susman:
Maybe I'll put in a plug for our approach and try not to bash the competition too bad, but when you work with a pure play developer like Ambient Fuels, we are putting the customer's interests first the entire time, and we are a pure play developer of just electrolyzers the entire time. Whereas if you work with a multi-tech renewables IPP, they may be doing things to support their wind business or their solar business or their batteries business. If you work with an industrial gases firm, they may have other existing businesses, existing distribution channels that they're trying to justify with new investment in green hydrogen. We all know that the OEMs want to sell equipment. So, I do think there is some benefit to being with a pure play developer.
Chris Wedding:
Yeah, I mean, you're a hardware agnostic except that it be an electrolyzer, right?
Jake Susman:
Yeah. That's right and that it be at a cost and of a tech spec that works for that particular customer because we have found that a lot of the clients that we're working with, have some really unique aspects to their business that you got to tailor to.
Chris Wedding:
Yeah. All right, so you've seen this movie before, you've been an actor in this movie before with Own Energy. Just this last piece, tell us about what specifically the IRA has done for green hydrogen and then we're going to switch to the last part of our podcast where we go to Jake the individual.
Jake Susman:
Yeah, so some aspects of what the IRA will do are still up for debate or are still in process, I would say. The most significant of which is DOE and IRS are going to weigh in on the language that is in IRA that describes how much of the credit one can receive. So, look, we have a pretty firmly held view on this, which I think is in the middle the landscape of different perspectives. There are some folks who want an extremely tight definition around the calculation of the greenness. I would look a level deeper at some of the folks who are arguing for that and ask, what is their ulterior motive?
And broadly, I would say, if you tighten up too early on in the growth of a new industry, you might kill it in its infancy. Then there are others who we think may be going a little too broad and who want a definition of what is truly green hydrogen that in the end could be called into question and might not end up achieving the decarbonization that really needs to happen.
We're somewhere in the middle where in all of our projects, what we say is we want a direct contract with a wind or a solar plant for as much of the production as we can possibly get out of our electrolyzer. And for any remaining hours, we may in fact buy some grid power, but we're going to green it all up with new RECs, like good quality RECs. Then there's a lot of definitional stuff that goes around that, but in our view, what that means is that some wind farms, some solar plant is going to get a contract and it's either going to get to continue to generate or maybe go to the next level or maybe end up with a new built plant, so we end up building a larger renewable energy industry in the process.
38:32
Anyway, that's a lot of detail, but IRS is still being figured out, but look, the effect is, as I mentioned earlier, Chris, this was not supposed to really happen till later in the decade. So, what it's doing is it's drawing in interest from sectors that didn't think they were going to be involved in green hydrogen for several more years. It may also have knock-on effects to make labor a little tighter.
There are only so many hydrogen experts to go around and so getting them some of the big companies that now know they need to do something in hydrogen, there's going to be a bit of a chase for those folks. I think it also means equipment could get short, so folks need to be thoughtful about whether they should procure in advance and the right amount, et cetera.
Chris Wedding:
Sounds great, but not easy. All right, so let's switch to Jake here. The first question is, give your younger self some advice, Jake, on how to be more effective, happier, et cetera, on this journey.
Jake Susman:
Well, we're very fortunate to have another community in the woods where we get to spend a good amount of our time as a family. And so, earlier Jake was fortunate to get a pretty modest little cabin, but it’s a place to get away. And so, when the pressures really mount and you think the world is caving in on you, nice to have a place to go away with your family and have a reset and just sit on the road with your young kids and play a game and laugh a little. Realize that whatever just happened that day or that week is not the end of the world, it’s all going to work out. So, highly recommend having some kind of something that you can get away to and feel like you're leaving the craziness behind. That was a huge salve in my last business.
The gearing up for a longer time, I think is critically important. I didn't tell myself 10 years last time. I was more hell bent on an exit and a relatively soon exit and I think some of that has to do with proving up one's own credibility. You're not a legit entrepreneur, some might say, until you have at least one success under your belt. And at times I think I was in too much of a hurry to get that one success.
Now, I'm very fortunate to be in a position where one of these got done and I like to think got done pretty well. And so, now the team and I can focus on building a lasting business that's really going to be one for the ages. So, give yourself some time I think would be my second piece of advice.
Surround yourself with great advisors and be real with them. Tell them the hard, dark stuff that's going on either in your head or in the business, and you'll find that people have had similar experiences and they'll help guide you through those more challenging moments. But enough on the negative side, also be bold. A lot of my early training was in first credit and then as an investor and that's very structured stuff that's supposed to be done a certain way and subject to looking at everything through a downside case lens. I’d tell my younger self more often to just go for it and not expect something bad to happen necessarily, but really go for the gold.
Chris Wedding:
Yeah, I think it's easy for folks thinking about what's next to get stuck in analysis paralysis. I've been there, but love me some spreadsheets, but learning by doing is probably the better path.
42:46
Jake Susman:
My team probably hates this, every once in a while, I go deep into the model, I secretly love it.
Chris Wedding:
Oh yeah.
Jake Susman:
But you know what's another one too, Chris, and again, this is the luxury of having done one of these before, the more you focus on the impact and the culture and a team that you enjoy working with and the non-monetary stuff about the business, the more you can roll with the punches and settle in for a long ride and really believe in what you're working on every day that you get to work. If you get all that stuff right, the money's going to come.
Chris Wedding:
Yeah, on the first part there, finding ways to get probably into the woods, I mean, one cool way to do that now is through things like Airbnb beyond the obvious camping or cabins at the State Park. So many cool spots on Airbnb to get out in the woods.
Jake Susman:
I can remember one of those early escapes that we needed before we had our cabin, what was one of my first times using Airbnb, probably in 2009. Might have been Vrbo. Anyway, I can picture my older daughter who’s now 16, as a little baby squirming around in that cabin. Yeah, those were the kinds of moments that thank goodness we got out and did that or else we wouldn't have made it as a company.
Chris Wedding:
Yeah. So, Jake, how about the next one here, give us some habits or routines beyond getting into the woods, maybe this is daily, weekly that keep you healthy, sane and focused?
Jake Susman:
I got great advice from Chris Brown, who I haven't kept up with in recent years, but at the time he was CEO of Vestas North America. Chris, I hope he'll forgive me for saying this, he’s a few years older and—
Chris Wedding:
Wiser.
Jake Susman:
Wiser, but really big and hard charting CEO. I pulled him aside one time and asked, “How do you do it?” And he advised me, he's like, “Quit trying to do the world's greatest workout, just make sure you do something every day. Get on a bike, go for a walk, get in a pool. Whatever is the thing you like to do, use something physical every day just to sweat it out.” And so, I highly recommend that.
We all want to be these sculpted adonises. Sadly, it's probably not an option for this guy, but I did get in the habit of doing something physical pretty much every day, and that's been a huge help.
Chris Wedding:
Yeah, I like that. As I look over the camera behind in this room here, this is the office in the woods at our house and it's soon to become my 17-year-old's bedroom as we shift things around. But it now includes a squat rack to do bench press and squats and dumbbells and all the rest. So, now I have extra, not quite peer pressure, teenage pressure to maintain fitness or they become stronger, which is bound to happen.
45:44
Jake Susman:
For sure.
Chris Wedding:
Good pressure.
Jake Susman:
That’s an important one. Look, I had a therapist who I worked with a lot during that period. I think mental health is not something we talk about enough, but there's some serious pressures of being in that position and being able to have an outlet where you could talk about it helped me a ton. I guess going back to our manliness discussion earlier, maybe it's considered unmanly to need that outlet, but it sure helped me a ton and encourage other people to have something like that as well. She in turn turned me on to meditation. I would say I'm still pretty average meditator at best, but now I'm pretty consistent, probably four or five days a week of a minimum of about a 10-minute meditation every day, which just serves as a reset. So, that's been really important.
In terms of the business itself, one thing that I'm trying to do differently in this time, Chris, I think the first time we got too systematic and too process oriented too early, and we got so wrapped up in some pretty rigid structures. I wanted everything to look like it looked inside Goldman Sachs, which is crazy. A startup with 10 people can't subject itself to the same systems and processes. Especially when the company is in its early years, you got to allow for a little messiness even if you're a pretty structured person.
Now, I also think you need to over time tack away from that, and when it's time to become more process oriented and systematic, you got to have a nose for that or see it coming, and then create those systems and processes. But find a place where you can be a little loosey-goosey for a while, because I think that's where a lot of the entrepreneurial goodness comes out.
Chris Wedding:
Yeah, that makes sense. At the right time.
Jake Susman:
Yeah.
Chris Wedding:
Let's go two more. The next one is, recommend a few books, tools, podcasts, quotes, something the readers could pick up to keep digging in here.
Jake Susman:
Well, I'm the worst person to ask this question because I stand by my credentials as someone who doesn't really read a lot of business books. Every once in a while, I'll pick one up. Often, I'll get halfway through. I do listen to the occasional business book on audio. My advice around books I would say read fun books. I read a lot of spy novels. I like historical fiction. So, my book advice would be to lose yourself in a book still, whatever kind you like and for me, it's more of the fun stuff.
48:27
The one that I would recommend, I insist actually anyone who will talk to me about it read is The Hard Thing About Hard Things, which is Ben Horowitz and Andreessen Horowitz. Highly, highly recommend it. It probably fits with a lot of these themes of—
Chris Wedding:
It does.
Jake Susman:
…most of the times things do not go exactly as you wanted or as you planned. So, how are you going to live within that framework?
Chris Wedding:
Well, regular listeners to the podcast will know that whenever I hear that book recommended, I can't help but pull out a quote which was shocking until I understood it, which was, if you're going to eat shit, don't nibble.
Jake Susman:
That's great.
Chris Wedding:
Just get it over with. Yeah.
Jake Susman:
I like the hip hop quotes in there especially, but totally agree. The other thing I'm a religious follower of is The Economist. I think I've been reading The Economist now probably 25 years and I don't get through the whole thing every week and I occasionally allow myself to throw a whole unread Economist into the recycling bin. Yeah, that hill is too hard to climb for me, but I get through a good quarter to a third of The Economist.
Chris Wedding:
I think if graded on a curve, that will be a hundred percent complete.
Jake Susman:
Thank you. I appreciate that. Appreciate it.
Chris Wedding:
All right. Let's wrap up here. Any final call to action or who do you want to hear from perhaps?
Jake Susman:
So, Jigar and I founded an organization called Cleantech Leaders Roundtable. We're proud to have you as a member, Chris, and hopefully a lot of your listenership. So, that is an echo chamber, this is an echo chamber. We're active members at ACP, the American Clean Power Association, that's an echo chamber. CEBA is an echo chamber, et cetera, and so forth.
We sit inside all these echo chambers and we tell other like-minded people, we need to do more things that are clean and green and break out of our echo chambers. I'm finding that a ton in Ambient Fuels because we want to talk to heavy industry. We want to talk to hard, new, abate sectors. We want to talk to a refinery and chemicals and fertilizer and steel and cement and heavy transport and all these industries that don't use wind, that don't use solar, that are not in our echo chamber. That would be my advice to this community is push yourself to really go get the decarbonization that we need to really help the climate in the ways we need to help it by talking to people who are outside of our sphere of influence, not the ones who are already convinced.
51:10
Chris Wedding:
Challenging, but true. All right. Well said. Hey, man, we're rooting for the success of Ambient Fuels and we'll keep track of your Jake. Good stuff, man.
Jake Susman:
All right, man.
Chris Wedding:
Peace.
Jake Susman:
Thanks a lot, Chris.
Chris Wedding:
Hey, there, it's Chris again. If you want more intel on climate tech, startups and investors, please join the thousands of other founders, investors and world changers who have subscribed to our Substack newsletter at entrepreneursforimpact.com. Also, I'd really appreciate it if you took 90 seconds to leave a review on Apple Podcasts or give us a five-star rating on Spotify. This feedback is the number one way to draw more attention to the inspiring climate CEOs and investors I get to interview here. All right, until next time, keep on fighting the good fights.