Hydrostor’s Playbook: How to Win $2.5B in Contracts When Your Product Takes Years to Build

Most startup advice assumes you can quickly build an MVP and iterate. But what if your product requires digging massive caverns 2,000 feet underground? In a recent episode of Category Visionaries, Curtis VanWallenghem, CEO of Hydrostor, revealed how they secured billions in contracts for their revolutionary energy storage technology before building their first full-scale facility.

Step 1: Reframe What “Product” Means

When Hydrostor began, they didn’t just have a patent for air-based energy storage – they had a solution to a burning problem. As Curtis explains, “We had to start turning it [the nuclear plant] up and down depending on how windy it was… and the maintenance team came and said, our budgets are going up, the reactor is not meant to operate this way.”

Instead of selling technology, they sold the solution to this pain point. Their “product” wasn’t just the physical infrastructure – it was the entire package of risk mitigation, cost savings, and operational improvements.

Step 2: Build Trust Through Component Familiarity

Rather than emphasizing their innovation, Hydrostor deliberately positioned themselves as integrators of proven technology. “There are no new widgets in what we’re doing. It’s more integration of proven components,” Curtis notes. This approach transformed the conversation from “Will it work?” to “How well will it work?”

Step 3: De-Risk Through Strategic Pilots

Before attempting full-scale deployment, Hydrostor built smaller pilot plants to demonstrate feasibility. But they didn’t stop there. Curtis explains they had to “get the ability to wrap it, guarantee and warranty that it would work when it was built, convince the construction companies that build caverns and mines as well as the oil and gas equipment suppliers to sell us their equipment and stand behind it.”

Step 4: Invert the Traditional Risk Model

Here’s where Hydrostor truly innovated in their go-to-market strategy. Instead of asking utilities to fund billion-dollar first installations, Curtis shares, “We kind of took a different approach, saying we’re going to develop and win the contracts and they don’t pay you a dime if you don’t perform.”

This pay-for-performance model transformed a seemingly impossible sale into a manageable risk for utilities. The challenge shifted from convincing utilities to trust new technology to finding capital partners willing to back proven contracts.

Step 5: Build the Right Infrastructure

Long before their first major contract, Hydrostor invested in critical business infrastructure. They “started to develop projects, get interconnection rights to the grid, lock up land,” Curtis explains. This groundwork made their later proposals more credible and executable.

Step 6: Create Your Own Market Category

Rather than waiting for the market to emerge, Hydrostor actively shaped it. “Getting the first our pilot system in Ontario was done through a storage pilot program that us, and we created an association of other storage companies, lobbied and got this program launched,” Curtis reveals.

The Results: From Zero to $2.5B

The strategy worked. Curtis notes they’ve now “got about two and a half billion dollars worth of contract signs for two facilities with more contracts to come.” But it wasn’t easy. When COVID hit, they had “only six or seven weeks of cash left” and had to mortgage homes to survive.

Lessons for Deep Tech Founders

Hydrostor’s journey offers crucial lessons for founders building products with long development cycles:

1. Your “product” isn’t just your technology – it’s the entire solution to your customer’s problem.
2. Build trust through familiar components and strategic pilots.
3. Find creative ways to realign risk and reward.
4. Invest in infrastructure and market development before you have customers.

The key is patience combined with strategic action. As Curtis reflects, “It has been a lot harder than what I was expecting. It took a lot longer.” But by systematically addressing each barrier to adoption, Hydrostor transformed an impossible sale into $2.5 billion in contracts – all before building their first full-scale facility.