[MUSIC] >> Welcome to Category Visionaries, the show dedicated to exploring exciting visions for the future from the founders or in the front lines building it. In each episode, we'll speak with a visionary founder who's building a new category or reimagining an existing one. We'll learn about the problem they solve, how their technology works, and unpack their vision for the future. I'm your host, Brett Stapper, CEO of Frontlines Media. Now, let's dive right into today's episode. [MUSIC] >> Hey everyone, and welcome back to Category Visionaries. Today, we're speaking with Jocelyn Ly, CEO and co-founder of Bedrock Energy, a distributed geothermal energy company that's raised over 9 million in funding. Jocelyn, how's it going? >> Doing so well, Brett, thank you so much for having me on. >> Yeah, no problem. I'm super excited for our conversation, and I would love to just begin with a quick summary of who you are and a bit more about your background. >> Sure, so as mentioned, I'm one of the co-founders and the CEO of Bedrock. I am a sustainability lover, hence building a company that is now related to clean energy, and I have been in startups for the last almost 10 years prior to that, was in management consulting, but since I was a teenager, have loved recycling and sustainability and all things environmental, and so a lot of my past decade have been touching topics of sustainability, whether it's sustainable agriculture or transportation, or now heating and cooling for the built environment. >> Take us back to 2022 when you founded the company. What was it about this idea that made you say, "Yep, that's it, let's build?" >> I met my now co-founder, Sylvia Levesquieu, who was a former long-time executive in the oil and gas field, specifically technology for upstream oil and gas extraction and all things oil field. He had this idea that a lot of the technology that he had developed for oil and gas extraction could be re-engineered and repurposed for specifically the use case of low temperature, direct use, distributed geothermal where you actually drill and construct heat exchangers in the ground for getting heating and cooling, really, really clean, really, really efficient, renewable for building space and water conditioning. When I heard this, what made me go, "Aha, I want to do this," was that, first of all, the category of geothermal, heating, and cooling is really small. It's really nascent, but it's actually very long established. We know it works. It's feasible. That really got my attention because I'm here to build technology, but that gives us scalability. That helps us move into market soon and fast and help tackle the climate crisis in the very near term, and that was really one of the biggest things that got me excited about this concept. The other reasons that I got so excited about this concept were that this is a form of decarbonization where we can actually put money into the pockets of real estate decision-makers. That means that folks who have decision-making power over the mechanical equipment inside buildings, inside campuses can actually have a profit from making the right decision. That's really important because nothing good or positive for society can scale unless it also has a financial value proposition and geothermal delivers that. Just to unpack some of the things that you said there, let's talk about the category. Why is this category so small today? These are all direct use in a distributed energy fashion. It's small because drilling today is pretty expensive. Drilling is a very solved problem if you're doing really large centralized drilling projects for oil and gas. But if you're talking about drilling in urban areas, if you're talking about drilling hundreds and hundreds, maybe even thousands of feet for a property in the real estate sector, it's just not financially viable for the vast majority of properties. When we think about opening up distributed geothermal as an energy category, we're here to make it much more cost effective. Under five times the cost of what it would be today in some of these urban drilling projects, and in addition, we are making it much more scalable in terms of is it de-risked? Is it accessible to a property that might be in a really dense location with small amounts of space? Is it bankable? Can you bring financing in to make it a much lower capital burden for the customer? These are all qualities that we believe make geothermal something that can be adopted all over the world, and that's the difference between what it is today, which is kind of a cool novelty, and what we see it as in the future, which is a really scalable category. Well, let's imagine that you're sitting there at Thanksgiving dinner, and your grandma asks you, "Okay, how does it work?" In simple terms, how would you explain how the technology works? Geothermal heating and cooling itself is a super simple thing. It works by putting borehole in the ground, and then putting a closed loop plastic pipe into that borehole that you can run water down and up, and as that water travels down and travels back up, it moves heat in and out of the ground. So if you're trying to air condition and cool your building, you're moving heat from your building into the ground, and the ground holds that heat. And if you're trying to heat your building, you bring heat up from the ground, and that water goes down and up and moves heat from 1,000 feet deep into the ground up into the building. That's the simplest description of how the geothermal heating and cooling itself works, and what our technology does is that we drill those holes and construct those heat exchangers in the ground, much more cost-effectively, space efficiently, and with lower risk. Now, probably a dumb question, but can this happen in any city and any location? Absolutely. The temperature gradient that geothermal heating and cooling taps into is the average global temperature gradient that exists everywhere in the world, which is 55 to 80 degrees Fahrenheit. Now, there are places in the world where you might have a volcano or hot springs. In those places, it is much warmer, and you can do other interesting things with hot temperatures. But broadly everywhere in the world, in your typical city that we all live in, it is 55 to 80, which is great for rejecting heat if you're doing air conditioning, and it's great for drying heat if you're doing it for heating. And that means that whether you're in San Francisco, or New York, or Houston, there is this potential to draw into this shallow geothermal gradient for direct use. And the amazing thing is, in all of those cities, in every state in the continental United States, there already is geothermal heating and cooling. When you look at other technologies, like nuclear energy comes to mind, it seems like it's very much a polarizing technology. There are some people who really believe strongly in it, and there's some people who are really against it. Does that dynamic also exist here with geothermal? Are there groups that oppose it, groups that are for it? What does that look like? Great question. One of the amazing things about geothermal is that it has kind of stayed under the radar in some of our culture and political wars. And as a result, pretty much everybody across the aisle loves geothermal. There's no one who dislikes geothermal. And in particular, our category of geothermal, which is this low temperature, shallower distributed geothermal, is incredibly inoffensive to everybody. You are not injecting anything into the ground, you are not extracting anything from the ground, and you are not stimulating or fracturing the ground, which means that you don't have any risks related to induced seismicity. All of that is a fancy way of saying that this kind of geothermal just doesn't really change anything about the ground. You drill a hole, but it's a very narrow hole. You put a closed loop pipe in, and then you fill it right back up. So there's just essentially no safety risk with the system once it is in the ground. And that makes it just super palatable to the most environmental conservation-oriented person. And it is also really exciting to people who believe in building more infrastructure and building more energy resilience and independence into our society. So that just really applies to everybody across all political spectrums. It seems like a no-brainer. As you're speaking in my mind, it's obvious that, of course, this just makes so much sense. What would be the negative case, or maybe not even the negative case, like, what's preventing this technology from being adopted by everyone? What has historically been the barrier to adoption over the last, say, 50 to 70 years? Historically, it's been too expensive to drill. And most drillers who do it are what you would call like blind when it comes to, you know, what's going on down a hole and where is your drill bit going. And so it's just a matter of like costs and intelligence, just people feeling like uncertain or people feeling like it's too expensive. As a result, our technology is here to say, hey, yep, geothermal, super well-established. It's an amazing thing. Everybody loves it, whoever loves it, as long as it's constructed right loves it for many, many decades. And it saves them a lot of money for many decades. We are here to say, great, let's make it affordable. What we're here to say is let's make it much more affordable and let's lower the uncertainty and the risks around it so that many more people can now benefit from something that so many people have already appreciated over the many past decades. When it comes to commercializing technology like this, where do you even begin? Who do you sell to, who do you partner with to run pilots? What does that whole process look like? We sell to real estate owners and developers, whether they be real estate-specific companies or corporations that also own real estate. And what we solve for them is that so many companies increasingly have emissions reduction targets or net zero goals. And in order to build more properties or get old properties in compliance with efficiency or carbon targets, they often need to solve their heating and cooling. And that's what geothermal allows them to do. It gives them a non-gas burning solution for heating and cooling their buildings and improves their energy efficiency so much that they can actually make money and have a return on doing the all-electric sustainable option. If a real estate owner wants to do this, do they have to have certain regulatory approval in order to do so? Not really. This is not like other forms of big clean energy infrastructure projects where you have to get federal permitting and it gets really, really intense and long timeline in the process. Instead, geothermal heating and cooling for buildings air conditioning is usually regulated at the local or state level. And it's often regulated like a water well. It's very straightforward because of the fact that these closed loop geothermal systems are so non-intrusive. You don't inject. You don't extract. It's very safe. Usually, it's like a very minimal permitting process. And I understand you just recently started to commercialize this with a pilot partner. Can you tell us more about that? Yeah, we just unveiled a completed geothermal insulation in Austin, Texas, with a large real estate firm called CIM Group. They're an amazing firm that is nationwide in its real estate and infrastructure footprint, and they have emissions reductions target. So, we worked with them to showcase geothermal in one of their urban properties. And because of bedrock technology, we are able to shrink the footprint of the geothermal system so that it fit into their real estate property lines. And we're also able to demonstrate that we can drill faster, that we can drill more quietly. All of these qualities that help a real estate customer feel more comfortable about having drilling happening on their property footprint. And then we completed the drilling and the construction of that geothermal system. And we connected you to the HVAC of that building. And now it's running. What did you learn from that project? Oh, man, we learned so much. We learned about the process of setting up a construction site right outside the windows of a occupied office building where people were working. We learned just about all the steps in the construction process ranging from getting that city permit and the state permit. We learned about just the integration between the geothermal system that we're here to innovate on and connecting that to the HVAC system inside the building. We learned a lot about that process of working with HVAC contractors to kind of get the system into the building, to connect that with the electrical, the plumbing and whatnot. Just a lot of operational learnings. But from a technical side, we also learned about the technology that we ourselves built, the drilling and construction machinery and the software that we used to build these systems. Getting all of the experience with this project meant that we got user research that goes back to our hardware engineers as well as subsurface data that goes back to our software engineers. This show is brought to you by Frontline's Media, a podcast production studio that helps P2B founders launch, manage and grow their own podcast. Now, if you're a founder, you may be thinking, "I don't have time to host a podcast. I've got a company to build." Well, that's exactly what we built our service to do. You show up and host and we handle literally everything else. To set up a call to discuss launching your own podcast, visit frontlines.io/podcast. Now, back to today's episode. Because this is the category visionary's podcast, let's talk a little bit more about category. How are you thinking about your category that you're creating? There is nothing this is really interesting. Normally, we're talking with founders in industries like cybersecurity, where they're trying to create a new category of software. You're creating a new category of energy, which is obviously a massive undertaking. Talk to us about your category creation efforts and how you're thinking about category creation. Absolutely. We are here to make geothermal, direct use a distributed energy asset category. The interesting thing is that because geothermal, heating and cooling, whether it be geothermal heat pumps or geothermal district systems have been around for a very long time, we don't have the hubris of saying, "Oh, we're actually inventing geothermal direct use." We're here to say it is not a scalable asset category because costs haven't come down, because adoption barriers haven't come down. Risk hasn't been solved for, and bankability and financibility hasn't been solved for. When we think about creating a category, what we mean is for something to become an industry. In the same way that 20 years ago, solar was not anything more than a novelty, but now it is an industry into which you have so many small businesses, big businesses, you have financial products, you have insurance products. It is a category because so much scale has happened and so many other businesses can be built on top of it. We are here to do the same with distributed geothermal, such that if we can use our technology stack to bring down the adoption barriers for geothermal, it can become something that any real estate owner in the world can happen to connect to their buildings, and they can get financing to do it so that it's not on their balance sheet. They can easily find like a service provider to help maintain it. Their insurance products, financial products layered on top of this. To us, that is what a category will entail when we are able to unlock the flourishing of distributed geothermal. How much education is that going to require, do you think? Is this going to be a massive education play where you have to really educate the world on this? I think that there's definitely a marketing and education play, especially for real estate decision makers. The thing that eases that is that at the end of the day, all real estate developers and owners, they have a large ecosystem of architects and engineers and construction managers who they rely on. That universe, especially architects and engineers, already know about geothermal. It's not something they've been able to get into projects as often as they would like over the past few decades, but they know about it. They know about its benefits. For us, we're bringing down the barriers to adoption, but the education, if you go through folks who are already excited about high efficiency, high sustainability, low carbon footprint options, then the education effort is a lot less onerous because they are people who are already excited about the value proposition. Similarly, there are other key players in the energy ecosystem, such as utilities and policymakers who do already understand what geothermal can do for society at a grid level. Because geothermal is just so efficient, it actually makes your entire grid more stable, and therefore, at the policy and utility level, you can ease the education process by going to the folks who sit at this higher level in society. If they make policy or create rebates or create incentives for geothermal, it also eases the educational load on an individual business or individual consumer level. What about your conversations with investors? As I mentioned there in the intro, you've raised over 9 million to date. Because this is deep tech, I'm guessing the investors that you bring in, they need to be patient. They can't be pushing you to focus on revenue in the short term. What was that process like finding investors that are on board with that idea, they're patient enough to make investments in deep technology like this? So we do work primarily with investors who understand two things. First, they do understand that in hard tech, the timelines for development are a bit longer than in software. But they're also excited about the reality that geothermal of this type is already in market. As a result, we are able to raise money that has a little bit of more patient timeline to allow us to develop hardware for a couple of years and deploy in slightly longer cycles. At the same time, we do work on paid projects that drive revenue, and our investors understand that this is all possible and they're excited for the commercialization pathway. We don't need to wait five, ten years, right? We can commercialize today, we can scale up commercialization in the next two years, and these are investors who kind of like having their cake and eating it too in the sense of deployment and development. As you think forward for these commercialization efforts, what's top of mind, what's maybe keeping you up at night? I think what is top of mind is that we really need to focus on the kinds of customers that have a near-term need for geothermal that makes them an early adopter. So usually these are folks that have an incentive or a mandate to do the more sustainable option in their buildings, or these are real estate developers and owners who really need, they actually require a reduction in their power demand in order to build the new building that they want, because maybe the utility won't give them as much power as they want, and so they actually have to figure out a lot of energy efficiency in order to make the building operational at all. So when we focus on those kinds of customers, that is what enables us as a relatively early stage startup to get steel in the ground quite literally and showcase what we are able to bring to these customers. So that's what we focus on. That's what's top of mind when I think about commercialization. What keeps me up at night is that I think there's a reality that real estate decision-making timelines can be long, construction schedules can be long, and it may take over a year from starting a conversation with somebody to really being able to start construction, and sometimes even longer some of the things projects that I'm talking about right now with customers are projects that might break ground in 2025 or 2026, and in order to manage these long-scale cycles, we have to build a pipeline that is really long-term and really kind of just get a lot of excitement across many, many potential customers so that we are building a pipeline that can start to unlock over time and can serve it as we scale up over the next few years. Let's imagine that another founder comes to you and they say, "Hey, we want to build hard tech based on everything you've learned so far of building this company and bringing it to market." What would be your number one piece of advice for them? I think in hard tech, there's two things that I would kind of point to. The first is that because development cycles are long and development costs are high in the hard tech, I think finding a customer that you're able to work with from the very beginning to get user and customer research to really dive into economics of the solution for them and then to deploy as soon as possible in an MVP way is just extra, extra critical because you don't get that many shots on goal compared to in software where you are able to kind of release something and then fix bugs that very night and then really kind of like an updated version the very next day. That's not the case in hard tech. I think like having partners that you can do that deployment and testing with is incredibly important. I think the second thing about hard tech is that hard tech usually just requires a way larger diversity of people that you bring into your team to make it reality. And the craziest thing is that these people in these roles that you need to build your tech stack and to deploy your tech stack don't have obvious cookie cutter job descriptions. It's not like in software where by and large you generally know what to put on a software product manager job description or software engineer job description. In hardware the type of mechanical engineering and the type of electrical engineering that you need done may be incredibly different from the many, many other mechanical electrical engineering job descriptions that are out there and then this goes for your entire stack and your deployment operations as well. And so I think in hardware it is just so critical to find people who are what I would say are like flexible. They have a lot of deep experience on a particular type of engineering or they have a lot of experience in a particular type of implementations or customer success function, but they have to be first principles thinkers and they have to be able to flex and wear many hats in a way that may not be as required in software when you're really just able to say like oh yeah I'm an amazing front end engineer and I know that that skill will take me far. That may not be the case in hardware where you actually have to say oh shoot I have to go learn like totally different subject matter because the role is always evolving in an early stage startup. Final question for you let's zoom out three to five years into the future. What's the big picture vision for bedrock and then what's the big picture vision for distributed geothermal energy as a category? Yeah what we aspire to do with the geothermal category is to enable buildings all over the world even in urban dense environments to tap into geothermal for their heating and cooling needs. So in this future this is one where we actually just like get free thermal energy from the ground under our buildings pretty much in every city in the world and in this future we are able to really moderate peak power demands and keep energy prices and keep energy bills in check and have real estate owners and occupants renters of buildings just save tons and tons of money so that heating and cooling is no longer at this like you know main driver of energy bills for every single building. And so like this is a future where we just kind of see renewable energy and kind of like free thermal energy as like a no-brainer for anybody who is living or working in a building. In that future what that means for bedrock is that we have many many tens of thousands of rigs operating around the world that we're licensing our hardware and our software to other construction players to go do geothermal as kind of the obvious default solution for buildings because every building should be super energy efficient and every building should be carbon free. Amazing love the vision for the company and love the vision for the category. We are up on time here so we're gonna have to wrap before we do if there's any founders that are listening in that want to follow along with your journey where should they go? They can visit our website www.bedrockenergy.com and from there you know we have a way to like follow along subscribe to our newsletter we have a job portal not for the founders out there but if you have any other engineers or folks who are listening to this podcast you know we are always looking to meet great talent in the hardware engineering space and if there are real estate owners or you know building engineers and architects in your audience you also have email address on our site to reach out to talk about geothermal for their projects. Amazing well thank you so much for taking the time this has been a lot of fun and wish you the best of luck in executing on this vision. Thank you so much Brett thanks for sharing our story. This episode of category visionaries is brought to you by Frontlines 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 on the next episode. (upbeat music) (upbeat music)
