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Michael Crabb

Senior Vice President, Commercial

Last Energy

October 18, 2023
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Ep 100: Michael Crabb - Senior Vice President, Commercial, Last Energy
00:00 / 01:04

Bret Kugelmass [00:00:58] We are here today on the Energy Impact Podcast. A very special episode, Episode #100, three digits, with Michael Crabb, the VP of Finance at Last Energy. Michael, thanks for joining us.

Michael Crabb [00:01:14] Great to be here and be on the other side of the mic.

Bret Kugelmass [00:01:17] This is a very special podcast because every 50, 100, whatever it is, we interview one of our own to give people a little look into what our organization is and how it runs, but also to showcase the incredible talent that brought onboard, and this is no exception. Michael, you've been an invaluable team member since the moment you came on. Leading our finance, now running commercial sales for us as well. And so, this episode is really going to be a testament to the work that you've done. But before we get to that, we'd love to learn a little bit about you first. So tell us, where did you grow up?

Michael Crabb [00:01:55] The infamous question. So, I was actually born in upstate New York, in Rochester, which seems to have this bizarre three degrees of separation from everyone. And we moved around quite a bit as a kid. But I grew up, effectively, in Omaha, Nebraska, since I was five. I never thought I would be there. I didn't think I would stay there for school; I ended up staying there for school. I didn't think I would stay there for work; I ended up staying there for work for a decade. And I moved here to Washington, DC about two years ago.

Bret Kugelmass [00:02:26] Well, you just "yadda, yadda, yaddaded" over your whole career.

Michael Crabb [00:02:28] All the way through, all the way through.

Bret Kugelmass [00:02:29] What did you study?

Michael Crabb [00:02:30] So, I studied architectural engineering. I was always interested in math and always interested in music.

Bret Kugelmass [00:02:39] You have a special musical talent, don't you?

Michael Crabb [00:02:41] I started playing violin when I was five and played all the way through the second, third year of high school. Yeah, when you're young, you pick it up quickly and you get pretty good at it. My parents forced us to practice a lot, so that was good. Yeah, it's just a theme in my life and I can certainly talk about how valuable I think music and music lessons are.

Bret Kugelmass [00:03:03] We'd love to hear it.

Michael Crabb [00:03:04] Oh, let's get right into it.

Bret Kugelmass [00:03:07] Did you hear that little pun, "hear it?"

Michael Crabb [00:03:09] Yeah, well, I can't give you credit for that. That's too painful. If I encourage one, I'll encourage many. No, I think that for me, the perspective of individual music instruction is all the benefits of any other extracurricular you can imagine. So, you have individual instruction from another adult. You have the requirement to evaluate yourself objectively against a broader universe. You have the requirement to play with other people. You have the requirement to memorize, understand patterns and intervals and different... Music is effectively a base eight log of math, right? You have thirds and fifths and octaves.

Bret Kugelmass [00:03:49] Which followed through your education as well.

Michael Crabb [00:03:49] Which followed through education as well, right? Memorization, training, practice; all of these things are parallels as far as in my life. That was the origin of leading me into architectural engineering, really as a sort of naive, hopeful teen to design concert halls.

Bret Kugelmass [00:04:13] Oh, I didn't know that part.

Michael Crabb [00:04:14] Yeah. So, that was senior year of high school. We were expected to do the senior project. And a little bit of a cruel irony, my mom... She really hated the senior project. Because it was meant to keep seniors engaged in school, but she was like, "No, I'm making my kids do all these extracurriculars. They're doing all this work. They don't need to do some B.S. Senior project." And here I found this super cool senior project to design, sort of model mathematically a concert hall, locally, with one of the Ph.D. students at the local university.

Michael Crabb [00:04:49] A lot of people did like... If you were a basketball player, you did like a "How to Play Basketball" instruction video, kind of a B.S. Thing, but here I was going to the local university and downloading... I don't even remember the program at this point, but you have a point source of sound and you can model that in three dimensional space. So, that was super cool.

Michael Crabb [00:05:12] And I was like, "Okay, well, this is the first thing that I've seen that is a real life application of something that I like doing. So, I'm going to go explore this." Not thinking at the time, "Oh, this is a very narrow field." We can get to that later. But yeah, so I stayed there. University of Nebraska has one of the best acoustics professors in the nation. And so, I got to study with her in the Architectural Engineering program.

Bret Kugelmass [00:05:39] And just before we move on from your childhood... I have the privilege of having a little extra knowledge about your upbringing. Can you comment on the role that your other family members played on your development as a person?

Michael Crabb [00:05:55] Oh, boy. Yeah, I didn't realize it was a public psychology session.

Bret Kugelmass [00:05:59] You don't have to.

Michael Crabb [00:06:00] No, no. Yeah, I mean, you've met my parents.

Bret Kugelmass [00:06:04] Who are awesome.

Michael Crabb [00:06:05] They are awesome. Now they're grandparents, so they're coming more often. Our family, they always sort of treated us as adults, I guess. If you have physicians as parents, the dinner table isn't, "Oh, I don't like my boss," the dinner table is, "Oh, I had this really challenging surgery." And the magazines around are medical journals, which are kind of gross. But like, your grow up around that.

Michael Crabb [00:06:33] Yeah, my dad's very musical. His dad was very musical. Three of the four grandparents were immigrants. Looking back, everyone I think, has some level of luck. I was lucky to have two great parents and a little sister that challenged me to get better and stay in front her.

Bret Kugelmass [00:06:57] That's the part that I was...

Michael Crabb [00:06:59] You were trying to get out of me.

Bret Kugelmass [00:07:00] Listen, you have a competitive instinct here that I have come to place great value on. I think it's definitely helped you throughout your career and I think it helps you here. It is a quality that we look for employees and you show in spades. So, I thought it'd be good to mention where that competitiveness came from.

Michael Crabb [00:07:20] Yeah, well, if you can imagine, I think my sister is may be more competitive. Or, at least more willing to sacrifice her own well-being for the odd football toss or what have you. But yeah, still pretty competitive to this day, I'd say.

Bret Kugelmass [00:07:36] Let's take you through college. Let's get beyond that. When you joined Tenaska, was that your first job?

Michael Crabb [00:07:42] First job. Yeah, the story's kind of funny. Actually, I had a podcast guest that had a similar sort of experience the other day. Yeah, so the architectural engineering program was a four-plus-one program. So, four years, Bachelor of Science undergrad, and then a fifth year for your Master's. And it was advertised as a real benefit because it was accelerated, right? You sort of started doing some master's stuff your senior year; you got the accredited degree to get your engineering degree and engineering license to practice.

Michael Crabb [00:08:10] I interned for a mechanical engineering firm between my junior and senior year. Great firm, great people, absolutely hated the work. So here I was, three years in and it was finally dawning on me that there are only so many halls built every year. There's only so much additional analysis that you could do that people are willing to pay for. Most of the work is designing ductwork and plumbing and stuff that's really important and makes for comfortable buildings, but oh my gosh, I couldn't do it. I could not do it. And so, here I was going into a senior year which is getting very specialized at this point thinking, "Holy cow, what am I what am I to do?" I haven't even thought about other career trajectories let alone created a plan.

Michael Crabb [00:08:56] And I just sort of hopped around talking to people, and I ended up connecting with a family friend. I had grown up with their kids and they kind of knew what I was about. And he said, "Hey, our private equity firm is thinking about starting an internship program. You should apply." I didn't know what private equity was, I didn't know what energy was. I didn't realize what an opportunity this was. This was just someone that I'd known for most of my life saying, "Hey, you should check it out," casually. So yeah, I ended up applying and I ended up getting the internship.

Bret Kugelmass [00:09:34] You call it private equity, but when I think of private equity, I think of it as like a pure financial entity. But this was like a specialist firm, right? Like, real domain expertise across oil and gas, right?

Michael Crabb [00:09:49] Yeah, private equity is just a financial structure. So, you can have very specialized private equity. You can have private equity that looks at different sized deals. You can have private equity that looks at different industries or sub-industries. I think a lot of private equity advertises some special market niche, otherwise how could you justify the fees that you're being given? So most private equity, they have some value add that they talk about; that's not always true.

Michael Crabb [00:10:17] This firm, Tenaska, or Tenaska Capital Management was the private equity, was a subset of a private energy company called Tenaska. Tenaska was really formed as a power plant developer in the early '90s. So, energy markets were deregulating. A group of folks, we call it two men and a truck... I think it was nine guys and a truck, kind of left their utility jobs or pipeline jobs or whatever they were doing. This is as Enron was becoming a thing, right? Like, private participation in gas and power and power generation was starting to become a thing. And so, they developed gas-fired power plants, brought all the contracts together, long-term revenue contracts, financed them, and generated enormous cash flow and wealth and value over time.

Bret Kugelmass [00:11:12] How much? Like, what was the total assets under management? Is that the right way to think about it?

Michael Crabb [00:11:16] Yeah, that's the right way for the private equity. So, Tenaska as the developer, what I was just saying, assets under management maybe is not quite the right way. I want to say 10 or 11 gigawatts of gas-fired power generation. A pretty large amount. Now, they sold some of that equity off, but they retained a decent portion of it and then were very smart at building additional businesses on top of that cash flow. So, they didn't just sit around and say, "Okay, we did our job and we'll hang out." They built the largest gas marketing and trading business or one of the largest gas trading businesses in the country and now one of the largest power trading businesses in the country.

Michael Crabb [00:11:52] And the group I started around in '05, '04 or '05, maybe a little earlier, they said, "Okay, everyone's now built power plants like we did. There's too many of them. They're overbuilt. So, let's stop building them, and maybe we can buy them." Think about a neighborhood that gets overbuilt. This is kind of your cycle. "Now they're cheap. Let's raise capital to buy them. We have the operating expertise." There's that niche expertise that really sat in that firm. And they were quite successful with their first fund and quite successful with the second fund. I started as we were still operating and optimizing the first one's assets and then investing in the second fund.

Bret Kugelmass [00:12:35] And the people who were so smart to diversify the business or, let's say, transition the business at just the right time, were they still active and did they serve as mentors to you as you grew through your career?

Michael Crabb [00:12:48] Yeah, for sure. Both the people that had that foresight... One of my family friends was one of those sort of founders of that part of the business. The nice thing, if you're private you don't have to transition; you can do both. You can keep placing your bets and ride the wave, so to speak. But they brought in, then, additional talent that was used to being in sort of a fiduciary management role. So yeah, there were a couple of mentors there. Some who were there for my whole career at Tenaska, which we can talk more about it, and some who were there for four years, five years.

Michael Crabb [00:13:18] And then even peers of mine, at the time. Remember, I'm coming in as an intern with no finance degree. I had econ and math minors. They didn't think I could do anything but get coffee. And I just sat around asking people questions in whiteboarding sessions. I do joke that I think sometimes having really low expectations helps because I could do nothing but blow them away. And so, I was an intern for really just the three months. But August 1st they said, "Hey, how do you like it?" I said, " This is super fun." And they said, "Well, why don't you come on full-time?"

Bret Kugelmass [00:13:56] Amazing, amazing.

Michael Crabb [00:13:56] I withdrew from class. I still lived on campus for a year.

Bret Kugelmass [00:14:00] So, what was the first thing you started doing where you demonstrated real productivity at that organization?

Michael Crabb [00:14:07] Oh, it was too small of a shop to have literally no productivity out of the gate, right? It took me a few months to kind of get my feet wet, to understand the language, to understand how the financial models were used as part of that underwriting and investment process, but sort of gradually and then all at once you're supporting a deliverable. Then all of a sudden, you're owning that deliverable and then you're owning another deliverable. Yeah, I don't know if I could point to a specific thing.

Bret Kugelmass [00:14:40] Do you remember the first time you felt proud of a work product?

Michael Crabb [00:14:46] One of the first ones I remember was actually for a co-generation facility in New York, Brooklyn Navy Yard. Maybe a 200 megawatt gas-fired asset. And it had an electric and steam contract that was invented and negotiated or drafted in the early '80s. And the way a power agreement tends to evolve is then you have amendments to that over time as things come up that the parties didn't contemplate. And sometimes they amend and restate the entire agreement, and other times they just add stuff. It's like, "It's seven pages and we're adding this clause and that clause."

Michael Crabb [00:15:25] And so, by 2012, maybe, you have this whole history of documents and a 100 page document is now a 1,000 pages, which may or may not still be applicable. And it had this super convoluted... Like, if you're producing steam up to this much and this quality, you have this price. I think it had a 1,000 lines of Excel code in order to map out what this pricing structure would look like. And no one wanted to do that work because it was mind numbing. And the associate that I was working with, he didn't really want to go through and check all that work and do all that work.

Michael Crabb [00:16:02] And so, that was one of the first moments I was like, "Okay, now I really understand contracting. I can translate it into an Excel model and then I can tell you what it means in the PowerPoint for the investment thesis." And that was the earliest one I can remember. It was like, "Okay, oh, it's not that hard. I've got the definitions down, I've got the math down, and then I've got the sales pitch down." Let's just keep doing that.

Bret Kugelmass [00:16:29] Tell us about the culture, the finance culture. I'm sure people from the finance industry know how hard it can be. But I want you in your experiences to compare it to what your average friend's job was at that time as you were in your mid-20s?

Michael Crabb [00:16:50] I will say the nice thing about being buy-side is that it isn't investment banking, which is your traditional 16-hour-days, six days a week, and then maybe it's only 10 on Sundays. Even with some pullback on that expectation, it's still pretty hard-charging work and high-volume work. On the buy-side, maybe it was 70, 80 hour weeks. Sometimes it was less and sometimes we were there until three in the morning prepping for an investment committee the following day.

Bret Kugelmass [00:17:25] Do you have any sense of how that culture gets set, how those expectations get set? Because I feel like if you went to anyone who wasn't in the finance world or maybe some sort of consulting and you asked them to do that, they would just quit. Why is it that young, ambitious finance people think that's just normal and commit to that?

Michael Crabb [00:17:47] Well, it's big stakes, right? You can do the same...

Bret Kugelmass [00:17:50] Not for them personally.

Michael Crabb [00:17:52] Not for the junior folks personally. But it's driven. Culture is going to be set from the environment that you're in, and it's big stakes. And the opportunity for you to be personally involved in big stakes and moving forward is, I think, part of the draw.

Bret Kugelmass [00:18:08] It's motivating.

Michael Crabb [00:18:09] Yeah, for sure, because it is... Look, the markets are the most objective judge of success. Like, you either did it or you didn't. And luck plays a large part in that, but at the end of the day, it's a results-driven business. And so, I think that level of sort of market competition combined with the incentive, combined with just the raw horsepower that gets attracted to those two first pillars, I think creates that competitive driven culture that is still set intentionally from the organizations but is supported by people who are willing and excited to be exposed to that much intelligence, that many deals, that much learning, and that quick environment.

Bret Kugelmass [00:19:01] Without going into too much detail, just staircase us through your escalation in your career through Tenaska.

Michael Crabb [00:19:09] So, on the private equity side, that was approximately five years. I started as an analyst, moved up to an associate, and then a bit of a senior associate role right at the very end. We made a couple of investments. I really focused on refinancing our existing assets. We ultimately combined each fund's assets into a single portfolio and sold those to respective other private equity funds. So, that was. '15 to '16 timeframe.

Michael Crabb [00:19:37] As we were winding down those funds, the original thesis didn't really hold anymore. It wasn't so much overbuilt; prices were too high. I worked at kind of a skunkworks development organization within Tenaska to do LNG for high horsepower applications.

Bret Kugelmass [00:19:55] Liquefied natural gas.

Michael Crabb [00:19:57] I knew you were going to correct me, but I had to finish the sentence. Yes, so this was like high horsepower barging, trucking, not the big Cheniere and Sabine Pass export facilities, just local use cases to replace dirty fuels. The business case looked great when oil was $110 bucks a barrel. And then sometime in 2016, you had kind of the last major commodity crash. My first; I mean, everyone has had some experience with that in this space. At $35 a barrel, it didn't look very good. And it was probably four or five years too early for the ESG movement.

Michael Crabb [00:20:35] So as that business sort of unraveled, there was an opportunity with someone leaving the company to step into really what my core skillset was at the time, a corporate M&A and strategy function. So, I sort of split my time between operations, broader corporate strategy, supporting one of the SVPs, and then building our origination and investment thesis for for Tenaska.

Bret Kugelmass [00:21:03] Can you get a little bit more granular with... Let's say for the layperson, what were you going after in that last part of the role?

Michael Crabb [00:21:11] Yeah, yeah. So, it evolved quite a bit. There were some real challenges that taught me a lot on how to think about investing. Because it's easy in private equity. You have a thesis, someone gives you a bunch of money to execute on that thesis. Your job is to single-mindedly focus on that thesis. In a corporate space... So, Tenaska as a business had a balance sheet, had cash that it had to hold in the business, and had to have assets on its balance sheet. So, it wanted to reinvest in the business and grow the business. The question is, "Okay, well, what are the best ways to do that? And how do you manage risk and return?" And so now, instead of just looking at North American gas-fired power plants, now I could look at services businesses. Now we could look at gas terminals businesses. We spent some time looking at different financial products.

Michael Crabb [00:22:05] When I started... What's the habit for everyone is you do what you know. We were looking at power assets; that's what I was used to looking at. But it became clear that it was overpriced. We didn't want to spend money there. We did buy that combined cycle in Massachusetts. But it didn't make sense to continue to invest in sort of a sole concentrated asset class. Instead, it was like, "Okay, well, we're really good at trading gas. We're really good at scheduling and trading power. What are the other things we can be good at and/or where do we see gaps in the market?" And so, that's sort of how I grew up as an investor. Or, if I learned all the raw material as an analyst and associate, really having to create this investment thesis and strategy for a business is where I felt like I finally converted that into a real value creation mechanism.

Bret Kugelmass [00:23:01] But let's just make that a little bit more tangible for a second. Like, just rattle off some of the types of businesses that you were looking to acquire or assets that you were looking to acquire. Give us a laundry list.

Michael Crabb [00:23:13] Yeah, yeah. So obviously, we still looked at power assets. We had some development opportunities. We looked at a couple of fuel cell deals. We looked at investing in some other development platforms for various technologies. We organically built out a large portfolio of wind and solar assets. I looked at some liquid storage terminals. You know, when you distribute gas and diesel fuel and what have you throughout the country, you see those big tanks. We looked at investing in some of those. We looked at investing in debt instruments on existing assets. So, buying, financially, minority positions in project debt. So, you just step into the obligation of that lender. What else did we look at?

Bret Kugelmass [00:23:58] As you're evaluating these things, I think what I want to hear from you is... When you finally got the opportunity to broaden your scope and look at so many different types of businesses, were you developing a new type of pattern matching as to like what is a good business? What generates money? What is risky? Do you feel you developed your own intuition around that?

Michael Crabb [00:24:22] Yeah, definitely. I think it's more about... Look, you're not investing your own money. Someday maybe I'll be investing my own money and then it's my risk-reward. I think what I learned is it's really this fiduciary duty thing that gets talked about. It's really your investors. So, my evolution wasn't so much my own risk-reward, it was being able to recognize and adapt to the people's risk-reward who I was being asked to find opportunities for.

Bret Kugelmass [00:24:53] Wow. Okay, that is interesting. That is an interesting perspective.

Michael Crabb [00:24:57] And I would say that's harder because what people tell you is not necessarily what they think.

Bret Kugelmass [00:25:03] That is true, but maybe it's also easier to combat your own biases if you can remind yourself it's someone else's money and it's not my money so you don't accidentally chase after shiny objects that are just personally interesting.

Michael Crabb [00:25:18] The flipside is it can make you more optimistic, right? Because you don't feel the pain the same way you would as if it was your own. So, the flipside is you do still have to think about it as your own sort of investment decision. And ethically, you need to... And really just being professional about it. You have to believe in the product.

Bret Kugelmass [00:25:37] It allows you to step out the situation.

Michael Crabb [00:25:39] Yeah, you have to be objective and you have to be able to... Remember, you're translating everything into that pitch and identifying risks and mitigants for that audience. And that process, that investment committee sort of process, is effectively what creates institutional objective decision making.

Bret Kugelmass [00:25:58] And one other thing I want to ask about, because you've demonstrated an incredible propensity to understand business models and contracting structures and brought that incredible value to this organization as well. Is that because you got to see so many different businesses and read their contracts? Is that where that came from?

Michael Crabb [00:26:16] Oh, for sure. I mean, yeah, we were on all different sides. I mean, that was the nice thing about Tenaska. It probably didn't have the volume in the way you might have in investment banking, but I got more depth in every single one of the deals. And we still read all the... The theorem for all these assets has all of these contracts, has different problems. Your whole job is to identify the problems and then figure out how you would solve them if you own the asset. And then on top of that, not only was I just reading someone else's work, we had a whole workstream where we were doing our own development work where we had to solve our customer problems. We were finding partners and working with operating assets.

Bret Kugelmass [00:26:54] Almost like reading a study book and then taking a test...

Michael Crabb [00:26:58] Doing this cool sort of feedback loop, if you will, on both sides. And smart people. I mean, I was watching how our internal senior team reacted and thought about things and found creative solutions. Like, you're always sort of just tweaking what you've seen before.

Bret Kugelmass [00:27:19] Let's fast forward to the transition when you were... I mean, you put in 10 years there, is that right?

Michael Crabb [00:27:23] Yeah.

Bret Kugelmass [00:27:23] Okay, very impressive. So, we don't need to ask... We don't need to make you articulate why you left. You paid your dues. But what attracted you to our organization? What was it about that time in your life? I mean, listen, you hadn't left Nebraska, and somehow you decided to move across the country. What was that about.

Michael Crabb [00:27:45] So many ways to take this. I think I struggled a little bit really articulating at the time what was pulling me out. Looking back, it was really an opportunity to test... Like, I felt like I had learned a lot from the people at the company and I really wanted an opportunity to test if that was the case. You know what I mean? Because I'd been there so long and I knew they were all smart people. You only put so many smart people in a room before the next smart person like doesn't really add that much value. And I think there's a component of just trying to find opportunities for someone else that is a little bit, over time, maybe less fulfilling at my stage. So, I started just exploring what was happening. And this was still mid-COVID, a little bit.

Bret Kugelmass [00:28:43] Was that right?

Michael Crabb [00:28:46] It was 2021. In Nebraska it was over. We moved to DC and it was like everything was still lockdown. Surprise, it's totally different. I struggled because I had full geographic flexibility even though I'd been in Nebraska forever. People didn't know how to think about that and thought it was bullshitting or whatever it was. And I didn't really want to stay buy-side because I had looked at all of these wind and solar projects and the economic interest was not good. Like, if I wanted to do wind and solar, I would have stayed there and just continued to invest at four or five or six percent, or at least telling myself I was going to make four or five or 6%.

Michael Crabb [00:29:26] And so, I was just sort of exploring what was out there and got connected through a network of mine to you. And like, the SMR thing was like... I don't know, I didn't think about it. I looked at every technology you could think of but nuclear in a decade. And I still remember, I think our first call I just spent an hour peppering you with questions, which I think is why we connected right away.

Bret Kugelmass [00:29:55] I do appreciate your questions.

Michael Crabb [00:30:00] The more I tried to unwrap how you were thinking about it, the more I realized that it was basically the same development platform that I'd seen a 100 times before, but with a product that was a clear premium product.

Bret Kugelmass [00:30:14] And you know it's interesting, I didn't have the vocabulary around development platform at that time. You were the one who brought that idea and institutionalized the best practices of the development platform into our organization. I had a very nascent view as to what just kind of made sense understanding the challenges of the nuclear industry being delivery and not technology.

Michael Crabb [00:30:41] Yeah, and I think that was part of what was attractive to me about it, right? Meeting more of the team, having to do my own research on sort of what nuclear looks like. We can talk about that. I think everyone goes through a similar journey. But I think what really sort of sealed the deal for me, what really made it the right fit is I could see that there was clear value add. I could see there were things that sort of from a venture capital perspective and a business building perspective would be different, right? Going from an established 35-year-old company with $11 billion in revenue to a startup company...

Bret Kugelmass [00:31:17] Don't cite our revenue numbers...

Michael Crabb [00:31:21] It was entirely different. It was and entirely different mindset. But these are all things as an investor you talk about. Like, when we would step back and sit around like how we want to allocate capital... Investors want to be operators and operators always want to be investors. Because you talk about what these things are and they sound so easy, right? "Oh, just set up a process and then watch the sales roll in." But of course, it's not like that. And so, the opportunity to learn some of that business building, but also clear opportunities where I could bring value immediately where it was a pretty attractive blend. Because I don't think you ever want to be one or the other, right? If you really are just like jumping in and you don't know anything, it's like maybe not the right place. If you know everything, then why would you really spend more time doing it? You know what I mean? Like, having that blend, I think, is super important.

Bret Kugelmass [00:32:13] You had just gotten married?

Michael Crabb [00:32:15] We'd just got married. Yeah, yeah. I accepted the job maybe four or five weeks before the wedding. So yeah, we got married with an empty house. And the Wednesday after our wedding, loaded the dog into the car and drove cross-country.

Bret Kugelmass [00:32:33] Can you tell us about the conversation at home? Was it a mutual decision? How'd it all play out?

Michael Crabb [00:32:41] Actually, my wife had ended up getting a remote role earlier that year in March with a global immigration firm. Her partners are based in New York City. So, this was kind a COVID-enabled thing. And they were like, "Hey, this is process oriented legal work. We can find talent everywhere if we open it up. For select partners that want to manage that way, we can do it." And she's had a great experience. But that really created a ton of flexibility.

Michael Crabb [00:33:09] The other thing that was nice is she's not from Omaha. So, we met in Omaha. She was attracted there for her first job out of law school. But it always felt like she was a visitor in my city. Even after whatever, four or five years and she was friends with all of my friends, I had met all her friends, it still kind of felt like... I'd been there 20 years more than she had, right? And it actually worked out to be... She was super excited to go on a new adventure and she didn't have family that she was leaving behind. It wasn't a super hard sell even though we both love Omaha. What ended up being really nice is it created this breakpoint. It created like a... Breakpoint's the wrong word. It created like a step change in the relationship.

Bret Kugelmass [00:33:54] An opportunity to build a life from scratch.

Michael Crabb [00:33:56] Yeah, like a new thing. Like, getting married and instead of just like being in the same house and doing the same things with the same people, it was like, "Yeah, now we're going to go and have our adventure together." So, it was kind of a nice thing of like "now we're going off into the world," which just sounds super corny, but it was really nice.

Bret Kugelmass [00:34:13] Well, I'm glad she let you come out.

Michael Crabb [00:34:14] Yeah, we love it.

Bret Kugelmass [00:34:20] So, you joined. What was the first thing that surprised you once you came on the inside that maybe you had a different thought of or different expectation?

Bret Kugelmass [00:34:35] Hmm.

Bret Kugelmass [00:34:37] How many more time?

Michael Crabb [00:34:39] I was 21, I think. Narrowly beaten out for 20.

Bret Kugelmass [00:34:46] Well, you moved up the rankings. Now we're at 60 for posterity's sake.

Michael Crabb [00:34:55] Yeah, I mean, my team doubled this week, which is fantastic.

Bret Kugelmass [00:34:59] Which is awesome.

Michael Crabb [00:34:59] Yeah, it's really fun. I think I was surprised... This might be too generic for you. There were some things that I was like, "Oh my gosh, we haven't even considered this." I remember the first thing was like, "No, no, like electric interconnections are really hard and this isn't even on anyone's radar."

Bret Kugelmass [00:35:19] You're still going on and on.

Michael Crabb [00:35:21] "Oh, my God, we need to think about this." But then there were things that were like so advanced. Like, some of the systems around government engagement and some of the P&IDs and some of the technical maturity. Like, there were some things that were so much more advanced than I thought, and then some things that like, "Oh my God, guys. Someone needs to focus on this and we need to..." So yeah, there are some things... I don't know, again, from an investor standpoint, business building looks linear, but I know it wasn't. You fundamentally know it isn't, but you don't really appreciate what that sort of organized chaos looks like until you're doing it.

Bret Kugelmass [00:36:08] You can just call it chaos. It's okay, you don't have to...

Michael Crabb [00:36:14] It's like our conversation earlier, right? How much chaos is the right amount of chaos is really the right way to think about it.

Bret Kugelmass [00:36:21] Okay, now I'm going to make you answer an uncomfortable question that we've never spoken about. What was going through your head at the time that you didn't want to tell me because you were like too new. That you were maybe worried about? Now's your chance; true confession time.

Michael Crabb [00:36:40] Oh, man. What was I terrified to say? For me, it's like, how much I'm willing to argue it. Like, I will tell you. I will tell you and you can listen to it or not. And depending on how comfortable I am or like how seriously I feel about it is like how much I'll argue for it.

Bret Kugelmass [00:37:07] Do you remember any of the early debates between us? When was first time you happened to change my mind. That's another good one.

Michael Crabb [00:37:14] Have I?

Bret Kugelmass [00:37:15] Oh, come on.

Michael Crabb [00:37:24] I don't know the first one. I don't know the first one. I still remember there were like certain things that you wanted to think about. Your tendency to want to push everything onto the project's investors, I think was one that I was like... Which is great.

Bret Kugelmass [00:37:41] You're saying risk?

Michael Crabb [00:37:42] Risk, yeah. Any time there was... And it's like an easy thing. Doing development broadly, it feels better to keep the deal alive than to kill it. And so, you just sort of let this the shit pile up, right? And so, there's a tendency to say, "Oh, we'll price over that." You can do that for some things but you can't do it for everything because all of a sudden those things compound. And so, I think that was some education that I had to do for you on like... It's not venture capital power distribution, right? It's not like you do ten deals and eight fail and two are home runs. You do ten project finance deals, maybe one of them you get your money back and then everyone else is somewhere in three to ten percent. Obviously, there are different pockets of capital, but that way of thinking... I think we sort of worked through what that right balance was.

Bret Kugelmass [00:38:38] Yeah, you had to impress upon me the conservatism of this capital class. But not only the conservatism... Within the capital class, there's always going to be a distribution of risk, but what that shape looked like. And if I just assumed a bell curve distribution like I would assume in any other scenario, how that might put the business at risk given that there might not be enough tail end opportunities for us to get a home run and everything we ever wanted without giving anything up.

Michael Crabb [00:39:08] That's right.

Bret Kugelmass [00:39:09] That's what I remember too, early learnings from you. Interesting. Okay, any key moments? What was the moment at this organization that you felt was your biggest first win? Like, "I did this and I'm proud."

Michael Crabb [00:39:31] I don't know how much I'm actually allowed to talk about that. I think the traction. So yeah, given the context we just talked about on managing risk and that distribution of outcomes. I still think we went out with an appropriate but expecting kind of a narrow universe of folks. And I also thought as we went to market with project capital investors that I would have to do a lot of nuclear education. And it really wasn't the case. I think there was some self-selection, which is again, why you run a broad process. But I was first very pleased by just the level of feedback and support and interest. And then, I've been quite pleased on where certain indications are coming out from a project.

Bret Kugelmass [00:40:19] You're answering a different question than I asked. I asked when were you proud of yourself?

Michael Crabb [00:40:24] Well, I'm trying to... Certain interim results of those processes, I think... I've been incredibly proud of both myself and of the team. I mean, look, we're doing the first in just about everything.

Bret Kugelmass [00:40:40] Except technology.

Michael Crabb [00:40:43] Except technology. It's kind of true. We're doing all the first on like the boring stuff.

Bret Kugelmass [00:40:51] That's our business model.

Michael Crabb [00:40:52] What is the joke? Energy transition is all about where you draw the line. Like, first is all about where you draw the line. So, we're not going to be the first in project financing, but we'll be the first in nuclear project financing.

Bret Kugelmass [00:41:05] Can we pause on that for a second? We will be the first in nuclear project financing. That is rad.

Michael Crabb [00:41:10] It's crazy.

Bret Kugelmass [00:41:10] And that'll be all you too.

Michael Crabb [00:41:14] We were the first nuclear development platform, right? Those things are super cool.

Bret Kugelmass [00:41:20] Okay, and what are you looking forward to over the next six, twelve, twenty-four months?

Michael Crabb [00:41:30] Oh, what am I not looking forward to? I think the pipeline looks super good. Bringing on new team members to execute on that development activity, that momentum is just going to feed right back into the project capital process. I mean, coming back to, again, maybe it's tired, but this development platform idea. The whole business is that flywheel of opportunities. Opportunities, execution, it feeds into the next set of opportunities, it feeds into the next set of execution. And then yeah, having to build the business around that. All of the boring...

Michael Crabb [00:42:04] Like, how does the business actually move capital and move resources. Those are all things that I... I like understanding theory, but we have team members now that have done that for the umpteenth time and sort of getting exposed to that is super exciting as well. There's always got to be something you're learning, something that you're pushing yourself on.

Bret Kugelmass [00:42:26] How do you feel about taking on more management responsibilities? I mean, we keep throwing more and more people under you. That's not going to stop. Any hesitation around that?

Michael Crabb [00:42:36] No hesitation, but that's sort of what I'm alluding to on how to figure out how to manage that, how to onboard more efficiently. How to create growth opportunities for those people, right? In different roles, I've had different sort of training responsibilities, but it's different to really say, "Okay, what does this person want to do now? What do they want to do a year from now? What do they want to do five years from now?" And how do you go and create that pass?

Bret Kugelmass [00:43:00] And how to set a strategy among a diverse set of talents that maybe you haven't been disciplined to maybe having before.

Michael Crabb [00:43:09] I'm actually going to answer a slightly different question because it starts in identifying the talent that you're trying to bring in, the skillset that you're trying to augment, the team. So, it's one thing to sort of take over a leadership role with a team that exists, but the sort of fun and challenge of building it from scratch I think avoids some of that. Like, rightly or wrongly, makes me less worried about that. Because I have been a little more proactive, or tried to be, on like, "These are the types of personalities that we need to like supplement the team with." Not just the core skill sets. I'm kind of sidestepping your question, but that is the part that I'm still figuring out. And I've sort of asked different mentors about how do you identify those gaps? How do you try to predict future gaps, especially with an organization that's growing and evolving and may change so quickly on a month to month basis?

Bret Kugelmass [00:44:11] Well listen, it's a tough job. I know I'm not that easy to deal with either. What motivates you? What part of the vision, the future, is the thing that you visualize when you want to motivate yourself to get through the most challenging aspects of the role?

Michael Crabb [00:44:42] I think the opportunity for scale. I mean, look, we are solving such key problems, right? And the opportunity to do that at an almost mindboggling scale... Scale of organization, scale of megawatts, of volume of transaction activity, right? Like, that universe is just such a cool place. It's such a great place for society. It's a great place to live, but it is such a cool company to be a part of and optimize. Because it's probably every day we're like, "Oh man, this would be really cool, but let's just... That's a 12 months from now thing or that's a 24 months now from now thing." I think those are the opportunities that really get you through some of the grind. And that's sort of development in a nutshell, right? It is a grind.

Bret Kugelmass [00:45:35] Development is a grind.

Michael Crabb [00:45:36] And business building is a grind. We're doing both.

Bret Kugelmass [00:45:42] Before I ask you the last question, any just high-level thoughts you want to share while you've got this platform?

Michael Crabb [00:45:48] Again, I should be prepared for these questions now since I've been on the other side. No, I don't think so. I don't think so. I'm trying to think if I...

Bret Kugelmass [00:45:56] Any key takeaways that you've learned from podcasting since you just mentioned it? If you've noticed, we try to make everyone be a podcast host at this company. Anything that you learned? Maybe that's a whole other episode unto itself.

Michael Crabb [00:46:09] That's probably a whole other episode. That is one of the... What would you call it? Dessert, fun things. You can't have too much of it, but it is... Yeah, maybe once a week, twice a week, I get to jump on the phone with a subject matter expert from some aspect of energy or financial markets and get to pick their brain for an hour. Like, how cool is that? Every episode, there are like a couple of nuggets. I had an episode this morning that will air probably in three or four weeks; I don't know what our backlog looks like. But he had a really interesting observation. He was like...

Michael Crabb [00:46:48] Everyone talks about power generation when it comes to decarbonization, and he's like, "There's a little bit, but really not much around sustainable fuels, renewable fuels, biomass. The chemicals sector is still so hydrocarbon driven." I want to like actually peel back some of the layers and understand... I mean, that's such a wide universe in and of itself. But like, I never really stepped back, right? I've been in power generation for so long. I've never really stepped back and thought about that. And we have some sustainable fuels customer serve in the pipeline. But yeah, thinking about that as an equally large market but without the same level of activity or sort of attention, well, that's where opportunities come, right? Big market, people not paying attention. Big market or big problem and people not paying attention. So yeah, those are just cool tidbits that come out of those conversations.

Bret Kugelmass [00:47:43] Another question, then last question.

Michael Crabb [00:47:44] What's the rule? Never say it's your last question?

Bret Kugelmass [00:47:51] Any heterodox opinions you hold? And they don't have to be about nuclear energy. Sorry I didn't prep you for this one?

Michael Crabb [00:48:00] Yeah, you should have prepped me for that one. That one feels like I need to think about it some. I actually don't know if this is heterodox. I think pragmatism is far too undervalued in our society. I consider myself... And understanding some of my personality, there's a reason for that. But I consider myself pretty pragmatic to sometimes an uncomfortable degree for some people because I will change my mind very quickly if presented with alternative evidence. And then, you see it in political discourse and social discourse like how that is thrown around as such a negative thing. Like, if we can't have pragmatism, there's really no use of having science. Like, if you're not going to change your mind when confronted with additional evidence, why seek additional evidence to begin with? I don't know if that's really a heterodox opinion. Maybe it's a heterodox observation, if such thing exists?

Bret Kugelmass [00:48:59] Yeah, your willingness to see it and articulate it is quite interesting because while most people might say they'd agree with that, their actions probably belie that reality.

Michael Crabb [00:49:10] Well, it's hard. You don't want to say like, "Oh, I was wrong." But yeah, you never know everything. Like, you're never, ever, ever going to know everything.

Bret Kugelmass [00:49:20] Well, listen, that's just another way that you embody the core DNA of this company because that's what we encourage here. Okay, final question now. If you could choose Lilly's first word, what would it be?

Michael Crabb [00:49:31] Well, we are... Audrey is claiming... Audrey is my wife. Audrey is claiming that Lilly has said "Dad-da." She has said "Dad-da," but she has no idea. She's just like making random words. But "Dad-da" would probably be top of the list.

Bret Kugelmass [00:49:47] Nothing like atom or nuclear or uranium?

Michael Crabb [00:49:47] No, no, no. She has a book "Atomic Science for Babies." She has read it. She will continue to read it. Episode #1,000, here we come.

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