The following interview is a conversation we had with Dan Forman, CEO of Copper Labs, on our podcast Category Visionaries. You can view the full episode here: $13 Million Raised to Enable the Data-Driven Utility of the Future
Dan Forman
Hey, Bret, thanks for having me. Excited to have the conversation. Not a problem.
Brett
I’m really excited about this one. And I’d like to begin with a quick question about your background. So when I was doing some research, I saw that you started an AI company all the way back in 2001. So I’d love to start there. Take us back to 2001. And what were you doing then?
Dan Forman
Yeah, were certainly ahead of our time. I had moved out to Boulder in 2000 to get an MBA at CU. And partway through that, my focus was entrepreneurship. Through the program and through that, I was doing some consulting, and I met a guy who was working on building adaptive desktop agents. And as with most of the best companies and certainly the ones that I like to latch onto, he was doing this by necessity. And so it was an individual who had a degenerative health issue that was affecting his ability to type. And he was a software programmer. And so over a long period of time, he had been developing these little. It was all desktop at that time.
Dan Forman
I mean, cloud and all that fun stuff didn’t exist, but he was trying to build something that could eventually take over as an adaptive desktop agent to help him do his work, communicate with people. And he ultimately got to the point where it was doing generative code development, where he was letting it work on some of the code that he was writing. And so, really cool tech. And so we spent some time, we tried to raise some money, tried to get some really big corporates to help fund it, but certainly way out of our time. And if you look back from the lens of today, with one of the primary issues being the cost to train these large models, you can imagine it would have been prohibitively expensive for us to build that thing up to get to a scalable point.
Dan Forman
But it was a great first experience for me to be able to start my first company coming out of grad school working with a great guy on trying to solve a real problem for him.
Brett
And this is probably a dumb question, but were you calling it AI back then? And was it called AI back then?
Dan Forman
We did. And the funny thing is, and I was obviously new to entrepreneurship and all that, and I thought we had to be so secretive. Like if people heard me talk about artificial intelligence, somebody’s going to come raid my house and seize our computers and all that. But we definitely talked about it in that way. And some of the earliest potential enterprise software prospects we had were generally organizations that had large knowledge management problems where you’ve got a huge, with all this embedded information, think about a military or a big multinational and having something that you could use to go and rifle through that. A lot of what chat, GPT and others are bringing to promise a quick 20 years later, that’s really what were after. And we did actually call it artificial intelligence at the time.
Brett
That’s awesome. When it comes to founders, who inspire you, who’s the most inspiring Founder you.
Dan Forman
Can think know, aside from, you know, probably more practical? I call out my local buddy, Ryan Martins, who was Founder CTO at Raleigh Software, which was one of the first and few, honestly companies to go public here in Boulder. And it stands out to me for a few reasons. I hope he doesn’t listen to this because I don’t want to fan his confidence so much. He’s a good friend of mine. We spent some time this weekend, but I think there’s three reasons why I look at what he did as inspiring, and one is solving a really practical problem. So Raleigh was all about building some of the first tooling to help software developers implement agile software development practices. And so most of the people listening to this probably take that as granted.
Dan Forman
But 1520 years ago, when that company was started, a lot of people would still do waterfall development where you’d say, hey, I want to go build this product and you draw out a really detailed plan, work on it for 18 months, 24 months, and then see what comes out the other side, agile. Flips that and says, let’s build the fastest, most valuable functional increment first. But it wasn’t as widely understood at the time. And so it took just like our business, which we’ll get around to, it takes some cultural transformation in the market to help people understand that there is a better way to do these things. And it certainly wasn’t an easy time.
Dan Forman
We were some of the first really cutting trail on getting large corporates to agree to SaaS applications, cloud apps, back in the day when everybody still wanted you to send them on prem software. And so that was the biggest part. The second thing was, you know, rally stood out. Especially here in Boulder is really a place that built something special that people wanted to be a part of. And even all these years later, I’ll go to a rally, happy hour. And a lot of those people are still seeking to get back to a company that has that kind of a culture. Obviously, I’m trying to build an organization here at Copper that feels that way. And then finally is just the work on self development. I mean, this is a guy who’s climbed the mountain.
Dan Forman
He took a company public, he’s had all the successes, and yet most of our conversations, such as it was when were on a run this weekend, is, what am I doing to get better? How am I learning to communicate better? Just be a better person? And I think the further I go on the journey that we’re on here, that’s really what it comes down to know if you want to talk about leadership organizational development. It starts with self mastery, and it’s hard to find the discipline to focus on that early on, much less after you’ve experienced significant success.
Brett
What about books that inspire you and the way we like to frame this? We got this from an author named Ryan Holiday. He calls him quake books. So Quake book is a book that rocks you to your core, really influenced how you think about the world and how you approach life. Do any quickbooks come to mind?
Dan Forman
Yeah, it’s funny. Is he the one that the obstacles the way. Was that one of his books?
Brett
Yes, it is.
Dan Forman
Yeah, I read that. And it has to do with a lot of this stuff I’ve been working on. I mean, I heard a good quip the other day. I mean, you start with things like management books, then you get into leadership. Eventually you end up in therapy books and trying to understand how you act the way you. You know. In that vein, one of my leadership coaches that I’ve had the good fortune to work with is a guy named Bill Isaacs, who used to be affiliated with MIT’s leadership development and dialogue center. And he wrote a book called Dialogue and the Art of Thinking together and spent a lot of time reading that book a couple of times over the last years. And his opening chapter, I think, says it well. He says it’s a conversation with a center, not with two sides.
Dan Forman
And if you think about dialogue, it’s so simple to just think, this is how we talk to each other. That’s how it is. But it’s at the core of what makes relationships, businesses, and ultimately geopolitics successful, is how do we communicate with each other? How do we find ways to bring out the conversation that isn’t being had or invite the type of engagement from individuals that might not be participating. And so if you look at what I’m in the middle of, which is building a culture, building a company, and you can unlock some of these patterns and start to see, oh, this is what’s playing out. These are the dynamics at work. You can sort of move up a level and help cultivate the type of conversation that leads to better cultures, leads to better outcomes for companies.
Brett
How did you go about finding a leadership coach? I know a lot of founders have a desire to do that, but it’s very hard to find someone who’s good.
Dan Forman
Yeah, you know, it is. And you also know founders and type a’s like myself. You generally think, I don’t need all that help. And so, admittedly, I didn’t really seek it out. It was only when, during our series a financing last year, that was led by Clean Energy Ventures, with which this coaching organization is affiliated deeply. As one of the final diligence steps, they put our management team through not really a personality assessment, but really a professional grade leadership dialogue and propensity assessment to understand where your strengths, where you’re not so strong. And that was a core filter to get through this financing. And it wasn’t like the low level Myers Briggs stuff that a lot of people would talk about.
Dan Forman
I mean, it was real deal stuff that looked at how people act, what makes them tick, what makes them successful or not successful in an organization. And so, as were, of course, going through a financing, I was like, sure, let me know whatever we need to do, and we’ll do it. And then as I looked at the results, I realized it was more robust than some of the other things I’d seen on this front before. And coming out of that, of course, they’re, you know, if you’re interested to keep it going, you can go and team up with these guys. It’s a great firm. It’s called dialogos and generative capital out of Boston. And even then, I was like, I’m good. I’m just going to get back to building my business. But lo and behold, now I have bi weekly dedicated coaching.
Dan Forman
I’ve been participating in a year long development process. And so I think the best answer to how you find it is find it through someone you know. The longer I’ve been in this role, the more I’ve had inbound on that. But frankly, to have a robust leadership development conversation and a leadership coach, you need to be really transparent, have a lot of trust. And so finding way to source that through a known network is a pretty good way to think about it.
Brett
When you got those results back, what was the most surprising thing that you saw?
Dan Forman
How clear it was, the sense I had of the various styles on our team, of just how clearly it instrumented that. And there’s basically three levels and three different models and the assessments that they have, and whether it was me and highlighting all the good and the bad that makes me or the people on the team, you could visually see on a plot what their characteristics were and immediately draw correlations to the good and the bad dynamics in how we work together as a management team. And so once you have that, then it’s easy to say, okay, well, how do we optimize these strengths and or address some of these potential gaps?
Brett
Super interesting. Let’s switch gears now. Let’s dive a bit deeper into the company. So how we like to begin this part of the interview is really focusing on the problem. So what problem are you solving?
Dan Forman
Yeah, we’re helping energy and water utilities take control of demand by engaging consumers with real time meter data. And so really boring problem for people that aren’t in our space has the added benefit of creating a really deep niche with a technical moat, because a lot of people can’t chase what we’re after. But if you think about the grid, there’s a couple of states of the art for gas and water utilities, and for the most part, they understand what’s happening on their grid or at the consumer’s level, either. Best case is what happened yesterday, and typically it’s what happened last month. And so if you think about the mandate to decarbonize grids, the mandate here in the west, to not run out of water, if you don’t have visibility into that, it makes it very challenging to manage it.
Dan Forman
And even the newest state of the art smart grid, which we think is pretty dumb, is not solving the problem. And so we’ve come into a really old legacy market, solved into a tough utility customer, but solving a substantive problem of modernizing these grids in the most efficient way.
Brett
Is there anyone who disagrees with your approach?
Dan Forman
Oh yes. Most of the big prevailing meter vendors. In fact, in this market, everyone disagrees because we’re in one of those ecosystems where you probably don’t know who sells the meters on the side of your house. But it’s dominated by a couple of major vendors that have been telling the market what to do for so long that people just accept that as canon, whether it be the utilities or their regulators. And so when we step up with a completely different idea, it’s challenging to get attention. And that’s one of the key challenges that I’m focused on over the next twelve months, is we’ve got the right product at the right time. And how do you make people pay attention?
Brett
What are you doing to make people pay attention and rise above the noise that’s out there?
Dan Forman
Yeah, we’ve done a couple of things. Earlier this year we doubled our marketing budget and so we just finished the year. We’ve had a presence at 26 conferences this year, meaning myself. The sales marketing team have been real road warriors, just showing up everywhere. And the anecdote coming back has been coppers everywhere. We’re seeing you everywhere. But the next thing to crack is we need to shift the narrative in the market. And so without getting into the nuances of our tech and all the acronyms around it, because most people won’t care, theme is more interesting. That’s basically what we’re trying to say to the market, is that we’ve all been marching in the same direction for a long time. It hasn’t worked. We’ve got new problems to solve at a time when you wouldn’t think about this.
Dan Forman
But if you think about the electric grid here in the US, we have more outages than any developed country in the world. On the water side, we’re wasting something like 900 billion gallons a year just through easily addressable residential water leaks. And so what we’re trying to do is shine a light on the problem and shift the narrative from here’s the technology that we’ve always used, here’s their next version. And that’s what we should do to just try to flip it on its head and say, what’s the problem to be solved and what’s the best way to get there? And so we’ve got a marketing campaign we’re teeing up to launch here in a couple of months to try to do that.
Dan Forman
I don’t know if we’ll be successful, but the approach is to completely change the narrative, encourage people to ask new and better questions.
Brett
How did you uncover this problem?
Dan Forman
Yeah, just like circling back to the AI startup coming out of graduate school, I found a technical person who was passionate about solving a problem. So our technical Co-Founder has a lot of expertise around solving hard wireless problems in the energy space over the last 20 years. And so after he’d sold his last company, he was trying to figure out how to understand his electric usage and went so far as to call the utility. And they said, we’ll go outside and look at that little wheel spin on your meter. And so he got to work, developed a little wireless rig, and ultimately listened to what was already being broadcast by meters. That’s our secret, is that meters are already broadcasting usage data almost all the time. It’s just that in some cases, a truck will drive by to get it once a month.
Dan Forman
In other cases, a utility will bring it back over a latent mesh network. We were able to unlock that in real time, bring it back over. Existing broadband networks do interesting things in the cloud. And so really boring problem that no one was looking at that was solved again to address a personal interest.
Brett
What are they actually getting then? Is it a totally different meter? Does it go on top of existing meters? What is that indeliverable that they’re paying for?
Dan Forman
Yeah, it’s the great question. That’s what everybody asks. Because full circle to your question of does the market agree? The whole market thinks you either have to replace the meter or strap on some really expensive hardware with AI chips, is even what a lot of people are chasing now. It’s really expensive to do that. And the legacy meters in which we’re able to unlock what they’re already broadcasting, is really where our intellectual property is. So we’ve got machine learning algorithms that figure out how to read the targeted meters down to near real time overnight using really low cost hardware. Existing broadband networks in the cloud, the state of the art and the broader industry would say, well, that meter is not serving your need.
Dan Forman
Let’s go ahead and get on a five to seven year rip and replace cycle in that, let’s go deploy our own redundant mesh network to get the data back when broadband is already ubiquitous. And because of the limitations of these networks that we’re deploying, let’s put really expensive edge compute into millions of endpoints. And so not only is it not solving the problem, which I could get into if we get bored enough to talk about that, but it’s doing it in a really expensive way and stretching out the timeline so much that even if you buy into the story of what typical grid modernization might look like, you got to wait about seven years to see if that proves out. We flip that. We do the hard work of wirelessly unlocking what’s already there, bringing back over a network that’s already there.
Dan Forman
And doing analytics in a cloud that gets better, faster, cheaper every day.
Brett
What else are you planning on doing to really evangelize this narrative and try to bring change to an industry that’s been slow to adopt new ideas?
Dan Forman
Yeah. The biggest secret I learned about a year ago, one of the great benefits of our round of financing that I mentioned, where we got hooked up with these leadership development folks, was a new board member, joined my board, who was a former regulator. And that’s really, if you think about the regulated utility industry in the US, most of the large investor utilities, they go to a regulator, ask to deploy capital, so called rate based, whether it be to modernize a grid, deploy new generation infrastructure, transmission infrastructure. And so what I’ve started to do over the last year, along with my team, is engage directly with those regulators.
Dan Forman
And what we have is a magic trick relative to what they’ve been told by all these other meter vendors, that if you’re a meter vendor, you like planned obsolescence, you want to make sure you get to keep deploying those things. We’re saying you don’t need to do that. And so at a time when we’re facing an inflationary rate environment here in Colorado, you’ve got little old ladies on the news saying, I can’t pay my bill. Why does Excel keep getting to increase it? And Excel is a great partner of ours, so I don’t want to throw a rock at them. But that has regulators asking utilities, how can you do more with less? How can you make an efficient decision around all of these other things that you need to be doing instead of just looking at the way it’s already been done.
Dan Forman
And so by engaging directly with regulators, we’ve seen significant forward movement in reaching out, wanting to understand, because they ultimately are responsible for helping to provide cost effective, secure and reliable energy and water services to residents in this country. And so if there’s a better way to go about that at a time when we’re struggling with climate change, inflation, all these other things, they’re actually interested to hear that story. So our timing is pretty good in that regard.
Brett
Have you watched that Bill Gurley talk called like 2800 miles or something like that on regulation?
Dan Forman
Yes, I did. And it’s very reminiscent of the regulatory environment in which we operate, because these big entrenched industries that have always done things the way they’ve always done them, a lot of them are looking for change. And I don’t want to say that it’s as deeply corrupt as some of the things that he pointed out trying to lobby and influence Congress. But you definitely have to find the right people who are willing to have the conversation. And we found that there’s a lot of practical players out there who want that because unlike some of the political issues that Bill called out in that conversation, our regulators on the utility side, they’re not really like that.
Dan Forman
It’s not as big of a flashy of a job that would cause a congressman, for example, to sort of shift everything toward how does this serve my fundraising needs? This show is brought to you by.
Brett
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Dan Forman
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Brett
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Dan Forman
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Brett
Launching your own podcast, visit frontlines.io podcast. Now back today’s episode. When it comes to your efforts, then, on the regulatory side, is it at the state level? Is it federal? Is it county? What does that look like?
Dan Forman
It’s all of the above. And most big investor owned utilities, ious. And they call them investor owned utilities because they’re publicly traded. You can go and invest in the stock they’re seeking to make profits. Most of them have a state level regulator called the PUC, the Public utility Commission. And so that commission will run them through all kinds of mandates. The utility comes to them and says, here’s the investment I want to make. Here’s the rate of return. The regulator says, well, what about this problem? And how about that rate of return? And so it’s a good friction in that conversation. And every state is different. And so, for example, we do electric gas and water utility work. A lot of what we’re doing right now is helping gas utilities in the northeast.
Dan Forman
And back to anecdote from my budy, who is one of my favorite founders. We try to sell vaccine, not vitamins. And so we can go do evangelical selling to a utility that might have some kind of a problem that we think we can solve. But when regulators are mandating that northeast utilities, for example, engage in behavioral gas demand management during winter peaks, we’re really one of the only people that can help them to do that. And so we’ll focus our regulatory efforts on those particular states. And as a series a startup, you wouldn’t think that we’ve spent money on regulatory and lobbying, but we’ve had to, and we’ve had a regulatory affairs firm that helps us navigate this ecosystem. We’ve just engaged with another lobby firm that is aligned with our interests to simply help us get into the conversation.
Dan Forman
Because getting access to the conversation, it’s not the corrupt like lobby world you would think of. If you’re watching a lot of shows, it’s really a very structured way of having conversations with people. And if you’re not in that game, you’re not going to be heard. And so for a startup of our size to have to invest so heavily in doing things like that is atypical. You wouldn’t do that in most markets, but in a regulated utility market, it’s table stakes. And it took a while for me to learn that.
Brett
Did investors understand that from the start or did you have to go to them and say, hey, we’re going to use some of that cash you invested in a lobbying firm? And what was their response to that, if that was the case?
Dan Forman
Yeah. Interesting, because we’re so niche that at this point, most of the folks around our table are energy sector investors and they know how hard it is to sell to utilities. Utilities are good and bad. They’re bad for what people would call getting stuck in pilot hell. It’s easy to go get pilot deployments. Getting to scale is the trick. And pilots you can do with nondiscretionary budget, if you want to get to scale, you have to go through the utilities rate case, be in the conversation with them and regulators. And so most of the investors around our table didn’t blink because number one, they saw how challenging it is to sell early stage tech to utilities. But they’ve seen this pattern over and over.
Dan Forman
And it’s tough for investors to be patient with the game that a startup like Copper is playing, because again, with these utilities, it’s really hard to get in. But if you can get in, do your job and get to scale, these are very large scale deployments that it’s hard to get it kicked out if you actually deliver on what you say you’re going to do, which is also one of our superpowers and it’s not broadly available in this market. There’s a lot of promises that are made and we’re known for keeping the promises that we make.
Brett
How do you escape pilot?
Dan Forman
Oh, I don’t know. I think the non flippant answer is proof points and success. So for know, we work on electric, gas and water. On the gas side in particular national grid, which is a big UK and northeast us utility. They’re now one of our largest investors and largest customers because we solved a problem for them on gas demand management that no one else gets at. We get them 32nd interval gas data. Instead of waiting for it every 30 days, create a data driven channel for them to go out and engage consumers in these demand management programs when it really matters. Meaning, hey Bret, we’re about to have an outage, or hey Bret, it’s going to be a peak day. Can you do your part to conserve? And we’ve consistently found that people will actually engage in that.
Dan Forman
People are in a lot of cases inherently good. They don’t want their neighbors to freeze, which, I mean, these are serious things. If you’re in the middle of a winter storm and you run out of heat, these are big problems to solve. And without getting into a lot of the details, we have a unique way of helping utilities engage consumers to solve those behaviorally. And out of that came a first of its kind case study that we published with national grid last year. And so the shift in pattern for us on the gas side is because we have that reputable proof point, because national grid will do customer reference calls for us and because we effectively have a magic trick that no one else has, we’re now starting to be included in regulatory filings for much more scaled deployments.
Dan Forman
If you flip back to water where our business is much more nascent, we’re still fighting that fight of how do you get through the pilots? And so a lot of what needs to take place in this market in particular is just staying around long enough because these utilities are risk averse. They don’t want to go and pick the flashy new startup that’s come around. They want to work with somebody that’s been around for a while, which, full circle is why. I just want them to be ubiquitous. When a utility sees Copper, they know who we are and what we do.
Brett
How do you convince a company that big to say yes to being featured in a customer success story or a case study? And the reason I ask, I work with a lot of companies and I talk with a lot of founders and a lot of them deal with this problem where they get a big enterprise customer, but they’re not allowed to talk about it at all, and then they aren’t able to leverage that and get all those benefits that you talked about. How’d you get them to say yes?
Dan Forman
Yeah, it’s a good, and, you know, a lot of them certainly specifically preclude you from naming them when you go through contracts. But the interesting dynamic with utilities is they don’t compete with each other for the most part. Certainly in deregulated markets like Texas, where there are hundreds retailers, that’s the case. But most of know people would pejoratively call it a regulated monopoly. If you’re in here, where I am in Boulder, you’re going to get gas and electric from Xcel Energy. And so if Xcel Energy, or in our case national grid, can deploy something that demonstrates them being innovative, solving some problem in a new or efficient way, they really like to raise their hand on that and share it with the market. And that’s one of the dynamics that you’ll see at these utility conferences.
Dan Forman
Whereas typical enterprise SaaS B2B, where I grew up, everybody’s competing with everybody. These people, they’re eager to get together and share best practices and talk about things. And so the more that a utility can be seen by their customers, by their regulators, and by the market as being innovative, the better it is for them.
Brett
When it comes to your marketing philosophy, what is there? How would you summarize your marketing philosophy?
Dan Forman
I’d say respectfully provocative, because I’ve joked with people in the past that I’m a bit of a provocative figure, because I call smart grid dumb, and I’ll be happy to go toe toe with anybody that disagrees with me and talk about that. But it’s challenging because how do you make sure that you’re being heard and getting attention without being annoying? And that’s the balance to be struck. And I’ll give you an example. So the acronym for Smart Grid in this market is AMI. And I won’t get into what that stands for, but it basically means an expensive new smart meter, an expensive new network that you’re going to have to replace all the time. And we published an article on Valentine’s Day this year called falling out of Love with AMI, why we need a smarter approach to smart metering.
Dan Forman
And it turns out that it was the highest performing article on this particular industry site. That is the place that all these utility people pay attention to. It was their highest performing article in like two years. And as much as I was obviously pretty pumped about that, I got my hand slapped on the back channel by multiple people, including some of our utility customers. Because the balance for me is, how do you call BS on something that needs it without making the people that bought into their story seem like they’re part of the problem? Because if that was the only available solution that they had at the time, the best thinking at the time said, choose that. Even if it wasn’t the right decision based on my perspective or new technology that’s come around, it’s not about the person that made it.
Dan Forman
And so that’s a really delicate balance for us, which is full circle to this marketing campaign we’re going to launch in a couple of months. We’re trying to just shift that narrative and completely eliminate the relevance of the acronyms that drive technology thinking and decision making in this market. And so I’ll circle back to report how successful we are in achieving.
Brett
That sounds good. The most popular article I ever published was called why your company needs an enemy. And I essentially made the case for why you need to have an enemy, how to declare warrant an enemy and all of that. And I got a lot of pushback. I had a lot of negative comments and negative emails from people just telling me that it was dumb. You shouldn’t take that approach. It’s focusing on the negative. But I think there’s a lot of examples of companies who’ve been very successful by having an enemy. I think Salesforce is one that comes to mind where they declared war on software. Have you had any pushback from your side or from people on your end, Dan? Like let’s really try tone it down a lot.
Dan Forman
It’s interesting. I would have expected more. And it’s funny, I’m thinking back to what was it behind the cloud, the book that talked about Benioff early on in Salesforce and setting up shop outside of, I don’t know if Siebel or what it was their big conference, but that’s really what were after. And I say to my board, I say to the team, we have to find these asymmetric opportunities to shift the narrative. And I would tend to agree with you on the enemy piece. I need something to compare myself to. And in a lot of markets, a lot of these SaaS players, they’re so thinly differentiated. You can’t really do that. We have the blessing and the curse of a dramatically different model and approach to be able to go.
Dan Forman
And I’ve absolutely identified our enemies and they’re the meter vendors that are telling a story that’s not good for utilities and not good for us as ratepayers.
Brett
What about your market category? How do you think about the market category that you’re in? I was trying to figure that out as I was preparing for this and the best I could do was the very broad category of energy technology companies. So what is the actual category? Because that definitely seems a bit too broad.
Dan Forman
Yeah, and it’s nuanced and it’s evolving. So we started in the broad category of what you would call the utility sector to be DSM or demand side management. So within that you’ve got demand response and energy efficiency, meaning on the demand response. How do you engage people to flatten those peaks when you’re either going to experience an outage on the grid, or how do you find the ways to just bring more efficiency? Because it’s counterintuitive. Everybody would say your business doesn’t make sense. Utilities are in the business of making money by selling energy. Why would they want to save? And the fact is, for regulated utilities, they’ve got a mandate from a regulator to help reduce the cost to serve energy, help drive energy efficiency.
Dan Forman
So your utility would probably offer up to you discounts on appliances, discounts on retrofitting your house with insulation and things like that. And so it’s counterintuitive to think about that, but it’s a mandate for utilities. The other side of that demand side management is load flexibility, meaning as we have evolving grid conditions, meaning more and more intermittent renewables, more and more consumer cited distributed energy resources like people charging evs when it might not be good for the grid, having visibility into that, having a way to manage that without spending billions to build up new grid infrastructure to serve peak demand that might only come up a couple of times a year. That’s really the focus of demand side management and increasing the grid modernization game, which is our early start. We didn’t compete with meter vendors.
Dan Forman
We do now for grid modernization budgets because they deserve it. If you look at the value we can unlock from a legacy meter, we can get way more than the newest so called smart grid. If you see me, I throw air quote saying that because again, we think smart grid is pretty dumb as defined and deployed. And so if we can help these utilities understand that you don’t have to do that really expensive thing that has failed to deliver value over the last 20 years of promises. And oh, by the way, you won’t know if it worked for another five to seven. We’ve got a cost effective, easy to deploy way to modernize legacy grids as they are to help utilities free up budget for new problems.
Dan Forman
And that’s really the thing circling back to our conversation about regulatory, that’s what’s playing to our favor. You can’t just endlessly add on more rate base and add in new utility investments because ultimately that goes down to rate payers and there’s a limit to how much you can spend. And the grid of now and the next 20 years looks very different than the last 20 years. We were not focused on integrating renewables. We were not focused on all these other decentralization strategies that go along with decarbonizing a grid. So our story to the utilities is, hey, you’ve got the same billion dollar grid modernization budget. We’re simply going to help you do more with that retrofit, the meter problem that you might have.
Dan Forman
But instead of spending that whole budget on meters and networks, spend a fraction of it with us and then free up a bunch of budget to go solve new emergent problems on the grid, whether they be related to safety or resiliency.
Brett
As I mentioned there in the intro, you’ve raised 13 million to date. What have you learned about fundraising throughout this journey?
Dan Forman
Yeah, I’d say choose carefully. And 2023 has been an epically awful year for venture backed startups and raising money. It’s significantly more challenging than it’s ever been. And we have a natural filter in ours in that very few of our major investors operate outside of this sector. So they understand energy startups, they understand how utilities work, and so our business requires some patience from an investor perspective. And that’s challenging when you get to these rough patches. And so when tough times came for us this year, as they did for most people, were very fortunate to have existing investors who understand the dynamics that have affected our business, helped us grow faster or slower in certain ways than we would have expected, but to step up and be helpful at a time when they really didn’t have to.
Dan Forman
And so I’ve certainly experienced conversations with investors that they don’t look like that we’re fortunate enough to have them around our table. But I think especially over the last couple of years, a whole lot of new emerging managers came into the market. A lot of folks that didn’t necessarily have the operating experience to be empathetic to what it’s like to operate an early stage business in that kind of a market. And so I think having people that have either focused deeply on a specific sector of interest demonstrated their own resilience, being an operator or investor in a challenging period. I think seeking out those people who also, the third filter is find good people. You’re going to spend a lot of time with these people, ten years in many cases. And it’s not just board meetings, it’s texts when things get hard.
Dan Forman
And I’m fortunate everybody around my table, they’re people that are out to be helpful and that’s not the case with all investors, especially over the last few years when money was easy. I hear a lot of horror stories of people that aren’t as fortunate as I am.
Brett
Based on everything that you’ve learned so far, what would be the number one piece of go to market advice you’d give to a Founder who’s just starting out?
Dan Forman
Don’t sell to utilities. It’s a challenging path. It’s also rewarding, like I said, I mean, we have the good benefit of working on a substantive mission every day to try to help impact climate change, impact water conservation, real problems. And so I think that would be the biggest thing, is that starting a startup is hard. It’s probably going to take longer than you think it is. You might as well pick a market that you’re passionate about, certainly work with people that you like, but expect it to be longer and harder. And so not chasing derivative products like not going out and building some new AI chat bot because everybody else is. But for me, go to market is driven by what do you know and what are you passionate about and where can you uniquely solve a problem? And it is hard to find.
Dan Forman
It takes time to figure that out and it’s different for everyone. And so I would, circling back to some of the leadership development things, I would do a pretty deep inquiry into what is it that could actually keep you passionate for a long period of time with people throwing rocks at you, because that’s what it will feel like at times.
Brett
Final question for you. Let’s zoom out three to five years into the future. What’s the big picture vision that you’re building?
Dan Forman
I hope that we will have not only shifted this narrative, but shifted the way that grid modernization gets done so that we can free up resources to solve the problems that really matter around decarbonizing our grid. And so looking out three to five years, I hope that Copper is seen as the company that came along, raised its hand at a time that it was desperately needed, and brought a new solution that helped us actually get ahead of problems instead of what a lot of us are doing now in the utility sector, which is just treading water, trying to keep all the same things going that we’ve been doing while staring down the horizon of some really challenging problems coming our way. I want Copper to be the company that helped prepare the utilities and this broader industry for that coming change.
Brett
Amazing. I love the vision and I’ve really loved this conversation. We are up on time, so we’ll have to wrap here before we do. If there’s any founders that are listening in and they just want to follow along with your journey, where should they go?
Dan Forman
Copperlabs.com would love to have people check us out. Like I said, it’s a boring problem that we solve until you really start thinking about what would it be like if I didn’t have reliable electricity? What would it be like if water didn’t flow when I turned on that spout? That’s what all of the work that we’re doing links back to. And so copperlabs.com on the web, and we’d love to hear from you if you’re interested, to dig in.
Brett
Amazing. Dan, thanks so much for taking the time.
Dan Forman
Thank you, Bret. Appreciate the conversation.
Brett
No problem. Keep in touch. 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 on the next episode.
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