The following interview is a conversation we had with Josh Snowhorn, CEO of Quantum Loophole, on our podcast Category Visionaries. You can view the full episode here: $200 Million Raised to Build the Backbone Infrastructure of a World Built on Data
Josh Snowhorn
Sure. I’m Josh Snowhorn. I’m the Founder and CEO of Quantum Loop Bowl. I’ve been in this industry for, good lord, like 24 years now. Started my career retrofitting telecom hotels in the very late ninety s. Then I joined Teramark. I was employee number six there. Designed and helped draw the first lines for Napa the Americas and helped fill that up. I was with Teramark for eleven years, then a year under the Verizon umbrella after they bought US for 19 times EBITDA. And then I was recruited into Cincinnati Bell to run their interconnection and telecom portfolio and helped IPO that company. Got to ring the bell on the Nasdaq with the team and was there for about six and a half years and did some other smattering of things in between that, some edge stuff and decided to take a break and then found a Quantum Loophole.
Brett
Nice. Super excited to dive into that. Deeper. But two questions we’d like to ask just to better understand what makes you tick as a CEO. What CEO do you admire the most and what do you admire about them?
Josh Snowhorn
That’s a tough one. There’s an amalgamation of CEOs. I’ve worked for two great CEOs, manny Medina at Teramark and Gary Whiteazic at Cyrus One. And they’re both people I stay in touch with here and there. And Gary happens to be on my board. Now. When I admire those CEOs, they had a financial acumen that I lack, so I look up to them in a lot of ways. In their skill sets, they really came out as CFOs originally or things like that, or worked in the financial industry before they came CEOs. I’m much more of an evangelist and a sales and technology focused CEO, but I admire them for their skills.
Brett
Interesting. And what about books? Is there a specific book that’s had a major impact on you as a Founder?
Josh Snowhorn
Boy, I can’t say there is anything. I think the book of the industry and the people I know is what’s helped me out, really working with some great people in history, but I’m not a great reader of novels guiding me into my path forward.
Brett
Interesting. All right, well, let’s dive deeper then into what you’re building today. So can we just start with the origin story?
Josh Snowhorn
Sure. Quantum Loophole was founded prior to the Pandemic around October of 2019. Would have had no idea Pandemic was coming. Fortunately, were founded on the basis of remote work and zoom and everything else right from the beginning. So it made the segue very easy as things kind of locked down. We were founded on thesis that the industry was really missing something at scale, and that was master plan data center communities. We don’t actually buildings. Our company is the land, energy, water, and fiber optic systems. So what we do is we go out and find those elements and entitle land and get the power ready and the water ready and the giant fiber conduits ready. And then companies either multitenants or hyperscalers or enterprise or government clients can build their data centers, but do it in a master plan fashion where they can really have all the accoutrements they need to execute their business quickly.
Brett
Wow. Super interesting. And are there any numbers that you can share that highlight some of that growth that you’re seeing right now?
Josh Snowhorn
It’s well known that we acquired our property for $100 million, and we’re seeing transactions that are many multiples of what we paid for the property already because we’ve done all that work. The only transaction that’s closed that’s public is aligned data centers taking 75 acres with us. But I can’t disclose the price or anything like that. It’s a matter of public record. You’d have to go look that one up.
Brett
Got it. Okay, that’s fair enough. And maybe you can talk through the market category. So I had introduced you as a mass skilled data center developer, but how do you identify what category are you in, and how do you think about market categories?
Josh Snowhorn
It’s interesting. We’re unique. We actually have no competitors at the moment with 2164 acres and almost 2.4 gigawatts of power available on our campus and a fiber ring that can accommodate up to 235,000 strains of fiber, linking us to ashburn. We’re just 20 miles away from Equinix Ashburn. We’re a unique category in the effect that we’re a master plan developer, but we’re not like your usual industrial warehouse developer because we all come from the industry. So we’re intimate with what an enterprise or a multitenant hyperscaler or government entity might need. And because of that, we’re sort of trusted advisors. There are lots of folks out there developing data center centric industrial properties, but they really, when they look at it, they’re like, yeah, I’ve got some power nearby. I got a big piece of dirt, and there’s a couple of fiber providers around me. But they don’t really have a comprehensive understanding of how networks work, how the scale that’s going to be needed, future technologies, micro grids for energy and all kinds of different things.
Josh Snowhorn
So we’re kind of unique. It’s difficult to classify us because we have no competitors.
Brett
Interesting. And could you just help us help provide some context around how big a gigawatt is? Like, how many households of electricity would.
Josh Snowhorn
That be equal to? I actually don’t know how that relates. Gigawatt is 1000. Can relate this to you in a comparison not by hope, but by scale. All of the energy that’s actually consumed in Loudoun County today for data centers, the metered load is 2000 MW. So we have the capability of even more than that just on our single campus.
Brett
Wow, that’s super impressive. And then can you explain what is the fiber ring? What does that mean? What does that look like? What does it do? Can you explain that in maybe simple terms for us?
Josh Snowhorn
Sure. Think about it. Like big giant straws or tubes linking our campus to the north. We’re actually in Maryland to the Ashburn ecosystem in Northern Virginia. The difficulty in doing that for us was immense. We’ve had to bore under the Potomac River. We’re actually 91ft below the bedrock of the Potomac. So nine stories below the bedrock with a giant Htpe, which is a high density polyethylene sleeve, very thick, that you’d normally use for something like a gas pipeline. And then we fill that with 34 two inch ducts, which are your classic introduct. You might see on the side of the road the orange colored ducts. But the entire system is designed to handle 60 912 fiber count trunks inside of that. So hence you get 34 times 60 912. You get north of 235,000 strands of capability. The ring crosses the Potomac River twice because it is a ring, closes off just north of Highway Seven and then it heads up to our campus.
Josh Snowhorn
The entire ring is 43 miles, so about 21 and a half miles per side. And that gives us a latency into the ashburn mesh of under a millisecond. So we’re well within the metrics for the hyperscale industry to interconnect to the existing ecosystem to the south.
Brett
Wow, that’s super impressive. And where did you learn all this stuff? Your technical background, I’m sure that helps. But where did the idea and really the invention come from for this technology?
Josh Snowhorn
Boy, history of trial by fire and 20 something years in the industry is how you learn these things. The funny thing about the data center business, and really a lot of the telecom industry is a lot of people if you went across the North American Network Operators Group attendees, or if you went to I founded the Global Peering Forum 18 years ago. That’s still ongoing. So that’s all the peering coordinators of the world. If you ask a lot of them, did they even graduate high school? You’d find a lot that didn’t. Or did they finish college? You’d find some. Most never went. They learned it all on the job. It’s a funny thing about our industry now. Professional degrees and things like that are certainly coming about more and more as the industry matures, but in the old days, just wasn’t like that. So you went out and just learned by the guy next to you who might have been just a little bit smarter, and you absorb it, and then you bring the best in class people together and create these amazing things.
Josh Snowhorn
Building Nap of the Americas, that was the biggest data center in the world at the time, at 750,000 downtown Miami. That was a huge learning lesson and years there. And of course, joining Cyrus One and all the innovations that were taking place there. It was really great just being part of some amazing teams and learning hands on the job every single day.
Brett
Wow. Fascinating. And do you have any plans to ever do anything related to bitcoin mining? I know bitcoin mining uses data center infrastructure, if I understand that correctly.
Josh Snowhorn
We want absolutely nothing to do with any kind of coin mining whatsoever. I think blockchain, and my team thinks blockchain is great, amazing technology, but the value of an arbitrary coin because you did a proof of mining is something we don’t believe in. Has some experience with miners in the past who would come in and deploy a lot of hardware, and the moment their gear was old, they just walk away and left you holding a bunch of useless gear. So it’s an industry that I’m just not interested in being involved with, and hence our team. So we focus on industries that aren’t quite so radically affected by arbitrary price fluctuations and things like that and for things that we don’t think holds much value. So we focus on the cloud and government and enterprise and things that we think are more stable and investment grade.
Brett
And because what you’re doing is so different and innovative, do you ever have a hard time convincing customers to go with you because it’s different and maybe not what others are offering in the marketplace?
Josh Snowhorn
No. I think the first thing that happens to us when we actually engage with customers, particularly multitenant data center customers, we had to explain to them that we’re not actually building data centers, that we’re a wholesaler to the wholesalers. Once we’ve crossed that hurdle, then it’s off to the races, and everybody’s really eager to understand how much the land is, how many square feet they can build on it, what are the entitlements that come along with it, how much power can we deliver and win? How much water can they have, traffic counts, everything you could possibly imagine. It’s very complex, actually. And the big thing that really is driving deals with us is the Q loop fiber system we’re building because we’re de risking the scale of connectivity with that immense amount of fiber that’s going in. So once we cross all those hurdles, it’s fairly easy to get folks to sign on.
Josh Snowhorn
It’s really about how much power and land is available.
Brett
Fascinating. And as you’ve brought this to market, what would you say has been the greatest challenge you’ve faced so far, and how did you overcome that challenge?
Josh Snowhorn
I’d say the greatest challenge was raising capital. Then the capital that was risked originally when I started the company, was my personal money. And then as we started to get serious and bring people on, then we started raising money from I would call friends and family. I had some very well off investors, folks I either knew from the industry or I happened to race cars with, or all kinds of strange things you wouldn’t believe. But as we raised those first dollars, that wasn’t really the scale. It was millions of dollars, but it wasn’t the scale that we needed to really execute a project that is going to end up having billions and millions of dollars deployed on it. So going out to the marketplace with our bankers, we hired Hula and Loki, and the team worked very hard in creating a confidential information memorandum that we sent out to the financial marketplace.
Josh Snowhorn
And going out and actually educating those financial institutions on what were trying to do, that it’s really going to hold value for the industry. And because of our history, we know what we’re doing. That was very tough. It became a competitive process. Luckily, enough people believed in our story, and we’re able to choose Texas Pacific TPG real estate, which is an arm of TPG, and they were very excited and made a big bet on us. So that was the hardest thing we did.
Brett
Wow. What did that feel like when you successfully pulled that off and you got them to commit? How did that feel for you as the CEO and as the entrepreneur behind this?
Josh Snowhorn
It was like a balloon popped. In a lot of ways, you lead up to a lot of stress as you’re trying to get those things done. And then afterwards, I don’t remember anything, so I drank a lot of tequila. But joking well, maybe not completely joking, but it really felt good. It felt like a theory that I had just all by myself. And then as I started bringing my team members together and collated, something that became something that was executable, was something that the financial markets believed in, that it modeled out, that it proved out. And by already closing transactions, we have many more in the queue to close, hopefully a lot this year. Then really proving that what we did was the right thing to do. And having that belief, it’s so much so that our partners want to continue to invest with us in other projects and other markets.
Josh Snowhorn
So I think that really tells a good story.
Brett
Yeah, absolutely. That’s an ultimate validation. There now two other questions for you. What would you say motivates you and excites you most about the work you get to do every day.
Josh Snowhorn
I get to work with some amazing people and my team is really just best in class. If you meet every single one of them, they’re shining lights, and I’m just really proud to be able to do that and then going with our customers and not being some stodgy vendor to them that they look at. And then once you do the deal, they don’t want to talk to you anymore. They look at us as partners, they look at us as an example. Some of the hyperscalers are letting us a bit under the covers to their long term planning cycles. We’re talking ten to 15 years out. That’s a line of sight that nobody else in the industry that’s supporting them is really looking at. But because of our massive scale, and it’s just as first campus and certainly others will do in the future, it allows us to be a unique partner that way, and that really drives me.
Josh Snowhorn
It’s exciting. We’re innovating beyond what anybody else is doing.
Brett
Nice. That’s amazing. And last question here before we wrap, let’s zoom out into the future. What’s the five year vision? What’s that look like?
Josh Snowhorn
Boy, the five year vision. For us, that’s not long enough, really. More like ten years. Within five years, we’re going to have campuses across the country, at least a couple of other markets, and hopefully at larger scale, we think that there is going to be a big push to microgrades and to liquid cooling and other technologies like that. They all go hand in hand. Liquid cooling is going to bring multiples of density that could be up to ten x what we see today, and we think the existing grid was incapable of supporting that. So we’ll be focused on technologies that will kind of power the data centers of the future and create these unique ecosystems.
Brett
Wow. Super exciting. All right, Josh, that’s all we’re going to have time to cover for today’s interview before we wrap. If people want to follow along as you continue to build, where’s the best place for them to go?
Josh Snowhorn
The funny thing I do is post on LinkedIn a lot. Everybody wants a loophole or just follow me. Josh Snowhorn on LinkedIn and you’ll see everything we’re doing. We’re not too shy about posting the great things, especially when big condos are coming out of the river and from under the river and stuff like that, and occasionally see a news release or two that comes out. You can follow that on quantumloophole.com.
Brett
Awesome. Josh, thanks so much for taking the time to chat, talk about what you’re building and share this vision. This is super exciting and hope to have you back on in a couple of years. Talk about all the progress you’ve made.
Josh Snowhorn
Thank you, Brett, for you having me. We’d love to do it again.
Brett
All right, keep in touch. Bye.
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