The following interview is a conversation we had with Kai-Philipp Kairies, CEO of Accure, on our podcast Category Visionaries. You can view the full episode here: $18.5M Raised to Build the Future of Battery Intelligence
Kai-Philipp Kairies
Hey, Brett, great to be here.
Brett
Super excited to have you. And I’d love to just talk a little bit more about what you’re building today. Let’s jump right into it. Take us back to the founding of the company. What were those early days like?
Kai-Philipp Kairies
Yeah, so my background is I’m an engineer in Germany, a german engineer that really focused on batteries at a very early age. So I’ve been doing batteries for about 15 years now. And before starting Ikure, I was leading one of the largest research groups on grid connected battery systems in the world and just saw firsthand the challenges of the industry and especially the challenges that were coming because the battery space is growing exponentially. And at the time, there weren’t really good tools around to manage this growth. And so being a researcher in one of the largest groups in the world, I just had the intimate insights into what was going on in the world and thought, hey, there’s an opportunity here to build a data platform that can manage all these batteries in a safe and efficient way.
Brett
And you did it at an interesting time, it looks like. So June 2020, a lot of crazy stuff was happening in the world. Did that really feel like the best time to start a company?
Kai-Philipp Kairies
Actually, yes. It gave us something to do during the lockdown. So the entire team was hyper committed because there just wasn’t anything else to do. And COVID, for me, for a lot of people, especially with kids, COVID was a really traumatic time where for me, it was an open invitation to dedicate all my time on something that I love.
Brett
Makes a lot of sense. So where do you even begin? What do you start with? We talk with a lot of founders who have cybersecurity tools or e commerce, Linux platforms, things like that. But with the technology you’re talking about, this is serious. Stuff. Where do you even begin? What did the first, like, six months look like? What were you working on then?
Kai-Philipp Kairies
Yeah. So perhaps, to start with, what does a cure do? And then the first six months, obviously, were just a small part of that. But ultimately, what we do is we analyze data that is produced by batteries during their operation. Voltage, current, temperature. We have some quite sophisticated physics based and machine learning models in the cloud that can ingest that data and then tell owners and operators of these systems if a battery is safe or if it will blow up in a week or two, if it’s performing to the specifications as intended and to optimize the lifetime.
Kai-Philipp Kairies
And in the first six months of the company, were very privileged to start the company with signing a two year deal with one of the leading storage companies in Germany at the time, because they were really interested in the solution that we brought to the table. And then, of course, we had to develop and deliver. We were quite open about the timelines that it would take a few months. But you can imagine just starting a company where, like, five people, we’ve got this massive contract, and now we’ve got a deadline that we’re running against. So COVID really was helpful, because that way we could dedicate, like, 18 hours a day to developing a product.
Brett
Robert, how did you get that contract in the first place? As a startup, as an early stage company, how do you get an organization to give you a two year contract?
Kai-Philipp Kairies
Yeah, I mean, the great thing is, at the time, I already had almost a decade of experience working in the industry in different roles as an engineer, as a researcher. And so the first contracts that we got, the first one, and then also the next three or four ones, they all came from my network. So it was people that I had a relationship with that trusted me, and that most of them had worked in other situations with me or my team before. So they knew that were solid, they knew that we could deliver. And the solution that we offered them was just really attractive because we knew so intimately what their pain points were right, from working with them over years and years.
Kai-Philipp Kairies
We said, hey, with all the information that we got to know you in the last time, this is something we believe could be really good for you. And they said, hell, yes. And then, of course, you need to be a little bit lucky to catch the budget. And it took us some time to get that running, but once we did, things kind of build up from there.
Brett
I was spending some time on your website yesterday, and as I was going through it, I was very impressed with how simple and clear the language is. Sometimes when I interview founders, I walk away just wondering like, what the hell does that company do? You know, none of this made, but just looking at that headline that you guys had, it was like, turn battery data into business intelligence or something along those lines that stuck in my head that resonated and that made sense. Did you start off with like crisp, clear messaging? Like, was that your day one message or what did it take to this clear of a message?
Kai-Philipp Kairies
Oh, absolutely not quite the opposite, to be honest. Just imagine it’s just a cure is we’ve got a number of founders, but like three full time main founders, and we all got a PhD in some really nerdy topics. So our CTO, George, has a PhD on aging behavior of batteries, our COO, Hano has a PhD in thermodynamics, and I have a PhD on battery usage in the grid. The three of these people will not come up with crisp language when describing what they do at day one. So we needed help, and I think were smart enough to engage people that would compliment us early on and learn from with them, because otherwise it would probably still be impossible to fully understand what we do, or only people from the in group could tell.
Kai-Philipp Kairies
But as we want to grow, you know, we want to grow as a company. And that means also selling to people who don’t have a PhD on the topic. And it’s so important to communicate the value and not the details in the back end.
Brett
Who helped lead the charge or who helped simplify that? Did you hire like an amazing vp of marketing or CMO? Did you contract with an agency? How did you refine that? Go from three phds talking batteries into like this? Chris, clear language.
Kai-Philipp Kairies
Honestly, the first and most relevant input we got was from our early stage investors. And this is a fun story. We always knew that in order to catch this market opportunity, we needed to raise venture capital and move fast. And went out to raise the seed round, trying to explain to venture capitalists the market opportunity. Okay, they got it. Our technology, they absolutely didn’t get it the end. Because in our view, there’s the market opportunity, there’s the amazing technology, the rest will follow. Come on, that’s a no brainer. And just as academics, for us, that was all we needed, right? And no one understood it, and no one wanted to give us money. So it took months until just from the feedback we got improved slightly.
Kai-Philipp Kairies
And then one of those venture capitalists actually took me aside and said, hey, I really think that theres something there, but youre so bad at telling the story. Can we please sit down for 2 hours to fine tune your pitch? And then I can bring it to my investment committee, but as it is right now, they would love me out. So I really want to make this happen. Can we sit down? And that guy really took the time to sit down with these nerdy young founders, fine tune the pitch deck. And after we had the fine tune pitch deck, we also send it out to a few other vc’s, and we got positive responses five out of five times, and we got term sheets. And some of these offers were actually better than the one we finally went with.
Kai-Philipp Kairies
Because if this guy can make our company so much better in 2 hours, this is worth any valuation that other ones could throw at me. And this guy’s still our chairman of the board. Until today, actually.
Brett
What did he do exactly? Or maybe like something like the specifics, how did he frame the narrative and how did he kind of define that story or refine that story, I should say. So it could get to that point that you’re able to get a higher valuation, more term sheets, all that.
Kai-Philipp Kairies
I think what was really amazing about his approach is he understood where were coming from. We were engineers. An engineer needs data points. And so the first thing he did was explain in simple terms how venture capital works, what are the expectations of VC, how are they being evaluated, and if you just establish this, fundamentals. So this is how their business model works. This is the power law, and this is what everyone’s betting on. So if you can prove to be inside that group of exponential cases, don’t even try really just the fundamentals. But once you get that and you have a little bit of common sense, which I think we did, it all turns around.
Kai-Philipp Kairies
And then you can come up with much better suggestions where that person will say, well, a good deal better, but we’re going to fine tune it a little more. And this took less than two weeks. Like the entire process of turning from, hey, we’ve got a really cool technology, please give us money. Here’s how we’re going to grow three x year over year for the next three years. This is the customer groups we’re going to approach. I had that all in my head, but I just didn’t think it was necessary to lay it out in detail at first because I thought it was so obvious.
Brett
Preston, when you go to companies now, do they get it right away? When you say, we’re a battery analytics company or we’re a battery intelligence company, are they like, oh, yes, I’ve been looking for one of those. I’m in market right now for one of those, or are they more like, what the hell is that and why do I need it?
Kai-Philipp Kairies
So right now, most of the relevant companies, most potential customers know about battery analytics. Three or four years ago they didn’t. And I believe that were a part of this education of the market. This is one. On the other hand, as companies like automotive companies or grid operators that also have batteries in their systems, now as they get more mature, more and more run into the problems that we’re solving. Three or four years ago, a lot of these companies had electrification plans and perhaps they had a few pilot projects or a few early rollouts of electric cars, but they didn’t depend on these vehicles or batteries to be successful. Now, as these batteries become a vital part of their business, all of a sudden performance safety lifetime really matters.
Kai-Philipp Kairies
So the market is now more and more experiencing the pain that we as a company are solving, and they’re much more open to solutions. And the beautiful thing about software solutions, of course, is they’re very scalable and easy to implement. There’s also hardware solutions, how we can fix some of these problems. But if there’s a software solution that offers similar outcome at a much better scalability, lower complexity and lower cost, it’s going to be the software solution, 95 out of 100 times.
Brett
What does the competitive landscape look like with kind of these trends all pointing towards there being a massive market here? I’m sure you’re not the first Founder to say, okay, I’m going to build technology to solve this and capture this market and win this market. How do you think about competitive landscape and how are you positioned within that landscape?
Kai-Philipp Kairies
Yeah, so especially in the last twelve to 18 months, there’s been almost like an explosion of companies trying to break into the field. Either it’s companies that have been doing data science, artificial intelligence that discovered the field of battery data for them, or it’s completely new startups that come from the battery space and are basically on a very similar journey like were four or five years ago. I mean, number one, I think thats great because it just proves the point that there is a market. Or five years ago a lot of people said, well, the battery manufacturers, theyre going to do it themselves, or the fleet operators, they will have their own solutions. Why do we need a third party? I think that right now its pretty clear that there is room in the market for dedicated third party battery analytics providers.
Kai-Philipp Kairies
Now, how are we positioning ourselves? We have a very strategic approach to the market in terms of being the best solution for a relatively small group of customers and winning that market. And the group of customers that we’re mostly working with right now are grid connected batteries. So batteries that store solar or wind energy in the grids and operate those batteries for ten or 15 years. And the beauty about this class of battery owners is they are making money with batteries every day. So if the battery is a tiny bit better, they will make more money tomorrow. So it’s super easy to approach these companies and say, look, this is the revenue you would make without us. This is the revenue you would make with us.
Kai-Philipp Kairies
Give us a three or six month trial period to prove that, and then you’ve got a positive return on investment on whatever you pay us. That’s a great pitch. If you go to an automotive company, on the other hand, it’s more of a strategic project. They have their internal teams, they have their internal capabilities. Do they really want to work with a startup instead of taking that money and increasing their own internal teams? So it’s more of a challenging strategic situation with some of these equipment manufacturers. But we’re also engaging in these projects, and we’re really hoping that over the next four or five years, some of them will open up to fully roll out to a fleet.
Brett
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Brett
Something I also noticed in the website is you have a strong presence there. You’re in that intro video and you’re really out there. And I saw you’ve done a lot of podcasts. Obviously, you’re chatting with me today on a podcast. What role does Founder led marketing and Founder led sales play in this? Yeah, it looks like you’re really putting yourself out there. Is that on purpose? Is that part of a strategy?
Kai-Philipp Kairies
In a way, yes. I mean, my background is really like this nerdy battery expert that has lived and breathed the industry for 15 years now. And I think in a way that I’m a good representation of what a cure stands for. At a cure, we have some of the most talented, dedicated battery people in the world together. And that makes such a difference. Companies that work with us are guaranteed to work with people that are the best on the planet. And so by going out there as the battery expert and not as the serial Founder, or not as the salesperson, but really as the expert that knows the industry fairly well, this is what we want to communicate with our audience. At the same time, of course, we also need to diversify and I’m not involved in sales at the moment.
Kai-Philipp Kairies
So of course if there’s a big deal, I will say hi now and then or perhaps participate in a contract negotiation. But in order to be scalable, it’s so important to let go of a lot of the tasks that are fun, including sales and including product development. But its so much better if you have a robust process and scalable process and the team. So my job is really to represent the company and show what we stand for. But then theres a fantastic team of experts to actually execute on this mission.
Brett
Clay, what was that journey like transitioning out of Founder led sales? Thats something that ive seen just a lot of founders struggle with. And yeah, I think its just very hard to get. Right. What was that like for you and what did you learn?
Kai-Philipp Kairies
Oh, its so hard because obviously the first 1015 deals that you do as a Founder, they kind of built the company, right. If a venture capitalist invests in a seat round, what they want to see is some initial traction. So getting one more deal can really make or break an a round, right. So the commercial impact on the company might not be as huge, but because you have this multiplier of venture capital, there’s this massive focus on being able to hit sales targets. And as CEO Founder, your responsibility is to make the company successful. So there’s this very big incentive to involve yourself in sales, right. Because you need to get that deal and you’re probably the most qualified person, you’ve been with the company for the longest and you have the most experience and all these things.
Kai-Philipp Kairies
But it’s a trap, right, because you can only dedicate so many hours in a week to this topic. And as you’re growing exponentially, you’re not going to be able to keep doing it. And if you only start to transfer your responsibilities to a team, when you hit the limit of your own hours in a week, it’ll be too late. They won’t have the time to find their feet, right. And then things start to break. So we very intentionally started this transition earlier than it was needed to figure out. Hey, do we have the right people in place? Do we have the right strategy in place? Sales people will have to have a different process than a Founder. Right. I can come in and say, look, I’ve been doing this for 15 years. This is how we do it. Do you agree?
Kai-Philipp Kairies
I can come in with a kind of swagger as the Founder, as the CEO. People just perceive you differently versus a sales rep. And building that playbook that also works for sales reps, that’s scalable. It takes so much time and in the beginning it’s worse. The results are worse than you just going out and doing it yourself. And the temptation to just go back to do it yourself is so high. But again, it’s a trap. People out there don’t fall into this trap. It’s painful, but it’s worth it. I can go on holiday for two weeks and my company will be fine. And I love that every Founder listening.
Brett
To you say that is probably jealous right now. They’re crying tears of jealousy.
Kai-Philipp Kairies
I’m not going to say it’s easy to get there. And even during holiday I will still answer emails and do stuff, but in a pretty controlled way. And I have a big trust in my team because I can see the results. They’re great and we’re still iterating, of course. But it’s the only reason we got there is because we started early and we kept pushing even through some initial mistakes. You might lose a deal in the process, you might lose five. But it’s the only way that people learn it. It’s the only way that the organization matures and it’s absolutely worth it.
Brett
What about the marketing team? What have you learned from building marketing teams? And what’s the marketing team look like today?
Kai-Philipp Kairies
Our marketing team is relatively small at the moment. We’ve got three people just hiring for a fourth. So if you’re a content creator and interested in working at one of the coolest startups around, accure.net dot check out our job offerings. So we’ve got a vp of marketing based in the US. By the way, the headquarter of Accure is in Germany. We do have an Inc in the US. And expanding as a european company to the US is another story. Very exciting, very challenging, but it worked very well for us. And so yeah, our vp of marketing is based in the US. We’ve got two marketing managers here in Europe and we’re currently hiring for a fourth person.
Brett
Talk to us about that expansion into the US market. Was that an easy decision to make? A lot of the founders that I speak to from Europe. They play around with that idea, but from what I’ve gathered, there is a lot of apprehension. A lot of founders say the US market is a different beast. It’s very expensive to compete in those markets via these Silicon Valley startups that raise fu money and you have to go head to head with them. What was that thought process like you thought through expanding to the US and making that decision to expand to the US?
Kai-Philipp Kairies
Yeah, I can just second all what you just said. It’s true. A good rule of thumb for a european Founder would be calculate the worst case in terms of costs that you believe the US expansion will cost you, and then add 50% to that and that will be a healthy baseline of what to expect. The US is so much more expensive than Europe in terms of salaries, in terms of operations, many other things. We were lucky, really, were lucky on so many levels that I don’t even want to say that we fully deserve the success weve got, but were very happy that we got it. So we raised our seat round in 2020 when the venture capital market was already pretty warm.
Kai-Philipp Kairies
And then in 2021 when it got really hot, a us investor preempted our a round and their pitch to us was very convincing. They basically said, look, we know that you dont need money right now, but we believe that were the perfect investor for you guys and we’re going to make you an offer that you won’t refuse. And they did and we didn’t. So no big shout out to Blueback Capital. They’re a fantastic investor, very smart, very well networked in our space. And not only did they massively support us with finding our feet in the United States, setting up the entity, they also introduced us to the person who would a few months later become our president of North America. So he came directly from the network of our investor.
Kai-Philipp Kairies
And if you’ve got contacts to first customers, if you’ve got a person you can rely on as the leader of the subsidiary, and then some introductions just to the general network. Thats like three out of four most important things that kind of fell into our lap with that investment. And then I think we executed well. And so last year, this is just less than one year after we started to subsidiary, already a quarter of our revenues came from the US business, which is amazing. Most startups fail and were not only not failing, but actually growing very nicely and sustainably over there.
Brett
Three years, five years from now, what do you think that revenue split is going to look like? Is it going to be 50? Or do you think eventually the US market, just because of the size, is going to make up the majority of revenue.
Kai-Philipp Kairies
I believe potentially the US and Europe could be an even split. But I think if we look at three to five years out, we will probably also increase our engagement in Asia. And so I think that we might end up with a, well, lets say 40 20 split, US, Europe and Asia.
Brett
From a go to market perspective, whats been the most important decision that youve made to date?
Kai-Philipp Kairies
Focus. It is so important to focus all the time, but kind of especially for us. We do battery analytics in general. We could improve every battery around, right, from micro mobility scooters toys at home, to high end cars, to batteries and airplanes in ships. And this again is a trap because you will find companies that are interested in trying out something innovative, like the innovators in all these verticals. And as a Founder, it is so tempting to take up every customer that’s interested in you. I mean, in the beginning, most people will tell you’re an idiot, you’re insane, no one’s going to need it. Someone else is going to do it better than you. The first years of a Founder of a young company is basically justifying that you exist.
Kai-Philipp Kairies
Now, if theres a company approaching you that is interested in what you’re doing and perhaps even willing to pay you for it is so tempting to take the money, even though the use case is slightly off what you initially planned. I mean, its not that much of a change. Its just like 20% difference. We can customize this and then another company comes thats not 20% to the left, but 20% to the right. And again you feel like, oh, shit, I need that revenue. I need to show that were here to stay. Again, its not a perfect customer, but well take it. Were going to make it happen. My tech team is great. They’re going to find a solution. And after seven or eight of those customers, you’re basically a consultancy and no longer a product company. And thats really what can kill your company.
Kai-Philipp Kairies
And I want to say were a little bit smarter in the beginning, but we also had some customers that we separated from actually after a year or two where we said, hey, we love working with you, but it’s just not, we don’t want to go where you would need us to be to serve you best. Let’s not extend this contract. We want to focus on something that you’re not that interested in right now. And once you start doing that and you’re really doubling down on the thing you believe is most important. There might be a few months where you don’t get any payback for that, perhaps a year.
Kai-Philipp Kairies
But once you’ve built your vision of the product and it really helps a certain group of customers, that group of customers will come to you, and all of a sudden you’ve got all these economies of scale. You’ve got happy customers that are all equal. So if one comes up with a product idea like a new feature, you can roll it out to everyone else, and then everyone else is more happy and will get more business your way. So focus on something really small and dedicate your time to it and make the difficult decision to say no, even if someone’s willing to give you money.
Brett
Final question for you, since we’re up on time and it’s p.m. Now on a Friday in Germany, it is. I won’t hold you any longer here. Final question. Let’s zoom out three to five years. What is that big picture vision? What’s the company going to look like and what’s the impact going to look like?
Kai-Philipp Kairies
I mean, I’m obviously biased here, but I’m a strong believer that batteries are an essential part of our mobility and energy future. In order to have a fully renewable energy society, we need functioning batteries. And I believe that the software tools that we’re developing and rolling out here at Acure will be a cornerstone of a successful battery economy. Ultimately, I believe we have the potential and the ambition to improve every battery on this planet, whether it’s in a motorcycle, in an electric car, in a ship, or in a stationary storage system. And we’re going to get there vertical by becoming the number one solution, the no brainer that everyone wants to work with. And then we’re going to copy and paste that to the other fields until we’re can improve every battery on this planet.
Brett
I love the vision, and you can definitely consider me a fan and a believer. And I’ll be rooting for your guys’s success. Before we wrap up here, if there’s any founders that are listening in, that want to follow along with your journey, where should they go?
Kai-Philipp Kairies
Oh, so we’re quite active on LinkedIn. So if you go to LinkedIn and then Accure battery intelligence, the website is accure.net, And I think these are the best places to find us.
Brett
Amazing. KP, thanks so much for taking the time. Really appreciate it.
Kai-Philipp Kairies
Hey, Brett, thank you.
Brett
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