Michael Crabb [00:01:00] Welcome to another episode of the Energy Impact Podcast. Our guest today is NealDikeman. Frankly, he does so much... I'm not even sure, Neal, what title I should use for you. But welcome to the show.

Neal Dikeman [00:01:12] Thanks.

Michael Crabb [00:01:12] Before we dig into some of your work now, maybe tell us a bit about you. Where are you from?

Neal Dikeman [00:01:20] Sure. I live in Houston. I grew up kind of in the energy corridor area on the west side of town. I started off in oil and gas investment banking after going up to A&M and getting a degree in history. And then, kind of stumbled a couple of years into that and worked for Bankers Trust, which was one of the premier shops at the time, a very innovative shop. I worked with some really awesome folks. I did not realize how impressive they were back then.

Neal Dikeman [00:01:46] I got my taste of energy. I wasn't quite sure I wanted to be pigeonholed into energy yet, so I wanted to do something exotic. I moved out to California. That sounded pretty exotic for a Texas kid. And and I went to work for a private equity fund doing manufacturing turnarounds at the height of the Dot-com boom, which was not very bright because, well, look, I'm literally sitting in a plant bending tubes in Hayward and doing finance stuff for them in one of our portfolio companies, while everybody else that I knew and met at the apartment complex or at the coffee shop, wherever, was doing some Dot-com.

Neal Dikeman [00:02:18] So, I did not stay there that long, but I did have an opportunity to work on one of our cool little deals, Ocean Pacific. If you remember OP, I was actually the corporate secretary there for a brief period of time. Really cool company, a fantastic turnaround. And so then, jumped off and managed to land myself at the venture fund behind Yellowpages.com and a few others. Showed up the day Nasdaq fell the first time. And so, my timing was just absolutely impeccable in everything. But that's what got me into venture. I learned venture capital and startups for some some really, really, neat people. And ended up leaving that firm when my boss there and I spun out, took the team with us, and set up a firm called Jane Capital.

Neal Dikeman [00:03:03] It was 2001. The tech wreck was happening, software was dead. We didn't know what we wanted to do, so we figured we'll go do energy. And we stumbled into clean tech at the very beginning. Literally, the first writings on the word clean tech were coming out in like April or so of 2001. Some of those folks were in our office chitchatting. And all I knew was energy and I was young, so I did not know very much. I was 25. My partner had been in the environmental sector, but we were going back to our roots in energy, environmental, and tech in the Bay area in 2001.

Neal Dikeman [00:03:36] But we got a hold of one little company. We did some incubation for and seed investment in and managed to float that one and partnered up with Macquarie Bank to help advise their fund which was mainly IT and biotech. Not much clean tech at the time, though they've eventually become a powerhouse in the clean tech and renewable space since then. And that got us off to the races.

Neal Dikeman [00:03:59] We thought we were smart, so we kept doing it again. After we hit that one and ended up with, probably spinning... We'd do seed deals and spin them out of our shop and probably ended up with seven coming out of that shop over the next few years and IPOed three of them. So, it was a good time. We had a lot of fun.

Neal Dikeman [00:04:17] And then, finally moved back to Houston and got caught up at a weak moment to come help Royal Dutch Shell launch their venture arm in 2013. Stayed there for a few years. Helped get that up and running. Amazing company. Really, really deep, deep technical expertise. My last job there was running the spinout fund. And we created a company called Salamander Solutions out of that company doing downhole electrical heaters to go build a refinery underground and production enhancement and all sorts of neat stuff.

Neal Dikeman [00:04:47] By the time I was done with that, I'd probably done six, seven, eight startups that I had founded or spun out on something or other. I held every executive job in the startup battery, and was on generation three of learning how to be a good investor. And in about 2019, a guy that I was trying to get and hook up and get into bed with us and in the 2008 timeframe... A guy by the name of Craig Lawrence. He'd been at Excel Partners. I was trying to get him to come join my team. We could never get a deal done. He calls up and says, "Hey, I want to launch a fund. I've got this big partner out of Korea that's super interested in getting into the market."

Neal Dikeman [00:05:29] Turns out that's the GS Group. Among other things, they are Chevron's downstream partner in Korea. They run the 800,000 barrel a day, GS Caltex behemoth. Gigawatts of power, a construction company, and they were going to use venture capital and innovation to help turn that towards internationalization, get off fossil, digital, etc. And the gentleman who was about to take over as chairman had successfully turned around the retail business using innovation, and he was about to go do the same thing here. And my partner had been in a consulting firm for a while. We sat down with him and said, "Hey, we don't really want to join a CDC, but we'll help you get yours up and running. I've done that four or five times before. And then you anchor our fund."

Neal Dikeman [00:06:16] So, that was the launch of Energy Transition Ventures. And we managed to get into the market... Or started right about the time the pandemic hit. Again, still very impeccable. Amazingly enough, GS and the Chairman's... They refer to him as Chairman... In his very first board meeting as Chairman at the holding company he had the whole of Seoul shut down, his company shut down. Our colleagues over there are fairly convinced everything's just going to be delayed a year. He goes to that board meeting and basically tells them all, "Doesn't really matter. We're here for the long haul. We're going to do corporate venture. We're going to do innovation. We're going to vote for it now. We're going to approve it now, and we're moving forward."

Neal Dikeman [00:06:57] And so in the middle of the pandemic, his company's shut down and he's already looking 50 years down the road. So, those are the types of people we've managed to get a chance to partner with on our ETV deal. They're a big LP of ours, and we work pretty closely with them on a lot of deals together and that sort of thing.

Neal Dikeman [00:07:11] And that got us our third partner. We managed to get the guy who'd been running all the international investments for them, Q Song, to move over from Korea to Houston to join us. That's the three of us. Craig, Q, and I run this particular company.

Michael Crabb [00:07:25] Wow. I'm breathless just listening to all of that.

Neal Dikeman [00:07:29] But one thing, there's a small stint in there where I took two years off. And one year of that was running for U.S. Senate against Ted Cruz and Beto O'Rourke. I got beat very, very, very badly. I was the Libertarian nominee. I won the nomination in Texas that year. And then, took it on the chin in a three-way general election race. So, I am 1-1 in my political career.

Michael Crabb [00:07:53] Man, I don't know where to start. I definitely want to dig into that experience because it's certainly unique and I'm sure there were a lot of lessons learned. But I want to go back all the way to the beginning and something that you glossed over very quickly. As coming out of the energy hotbed of Texas and going to Texas A&M but I think you said you studied history.

Neal Dikeman [00:08:13] History and economics. I started as a history major. I figured I'd go to law school. I liked history. I finished that degree very quickly and needed something else to do. And so, I added an econ degree and finished that. Because econ was kind of, sort of history. And then, I realized that I didn't really know anything. And so, I ended up in accounting and finance and that got me a job. So, I got hired by an investment bank basically because they were desperate and I had enough accounting and finance to pass all the interviews.

Michael Crabb [00:08:40] And frankly, you can put logos on slides and they'll teach you Excel anyway. They just need someone with enough horsepower, right?

Neal Dikeman [00:08:49] Fascinatingly enough, I go up to the training program. I've been there a couple months. I worked with really cool people so I learned a lot. They were like three or four CFOs and CEOs who came out of the group that I worked for; I had no idea. And so, I'm up in the training program in New York. Actually, in Bankers Trust Plaza, which was directly across from World Trade. I'm meeting with all these like 60 analysts there, right? The only people in from state schools in that program were in the LA, Chicago, and Houston offices because the New Yorkers couldn't get anybody from the northeast to move to the satellite offices. So, media in LA, basic Industries in Chicago, and energy in Houston, they would slum it with some state school kids.

Neal Dikeman [00:09:34] I remember I'm sitting there in one meeting and chitchatting with them and one of my friends. And she'd gone to Penn. And she looks at me and she's like, "Man, I spent four years in school. I've got a mountain of debt. I am struggling here. I never learned a basic thing about accounting. We don't do that there. And you're sitting here glossing through this program, breezing through it. You had ten times as much accounting and finance as I had. You got out with no debt and you finished in three years and had fun. Look what I did wrong." And I'm like, "Huh. I guess this Ivy League education isn't just a panacea after all." That made me feel a bit better. But it was actually quite interesting, just a really fun experience.

Neal Dikeman [00:10:14] And what I didn't realize, Bankers Trust is the place that invented the RAROC. The risk-adjusted return on capital. It was one of the most innovative companies. Then after Deutsche Bank bought it, they kind of killed the franchise. All my bosses were very quickly going to leave. You could see the change coming. And I wasn't sure what I wanted to do, so I managed to get lucky and get to a buy-side shop that happened to have a former Alex. Brown partner there who I know from his old network. And so, that's what got me into the buy side. A lot of serendipity.

Michael Crabb [00:10:54] Yeah, well, it sort of always is, right? But I'm a firm believer that you make your own luck and I feel like you probably believe that as well with the libertarian streak. You also made the comment that you didn't necessarily want to be an energy, but I keep seeing energy. Obviously now you're in energy, but I keep hearing energy in that lengthy history.

Neal Dikeman [00:11:20] All I do now is eat, sleep, and breathe energy. There's some other stuff I've done. I've done some IT investing. I helped launch a company 15 years ago that was one of the very first handhelds for restaurants. Taking orders on your handheld. We were running it on PalmPilot. Really cool technology and I was the business development guy for that. I drove the revenues up quite a bit. I've done my share of non-energy stuff. But you kind of have to be a specialist in life to be really good at something or you've got to be a generalist at a really big platform.

Neal Dikeman [00:11:59] When I went to the Bay Area, I wasn't sure I wanted to do energy. It didn't mean I didn't like it, it's just I wasn't... I'm young. By the time we got our feet under us in clean tech. Look, this is a cool area. The phrase we use at the firm is "Energy is life, the rest is just details." Energy is everything. It's a huge chunk of GDP, and the rest of GDP runs on it. If you're going to play in a neat, big sector, it's one of the neatest, biggest sectors to play in.

Neal Dikeman [00:12:30] And over my life, I'm investing in a lot of the same things that we were doing 20 years ago, but the world's changed. Renewables are now dramatically cheaper than gas or coal or nuke. Like, five factors. They're tremendously cheaper. This is insane. Back in 2005 or '10, we called it alternative energy because it was more expensive than conventional. Nobody uses the term alternative energy anymore because it's from the past. It has nothing to do with carbon or climate or any of the rest. That may have been the reason to get started and go work on it.

Neal Dikeman [00:13:03] So, technologies that I were working on in 2003 were cool but couldn't win. Electrolyzers are one great example of that. If renewable power prices and power prices are in the double digits, there is no point of having electrolysis. It doesn't matter when they're down in a few cents a kilowatt hour. Yet, it makes no sense not to do electrolysis. Just kind of a neat little example of how the world has changed, not because of a bunch of policy stuff, but because of economics.

Neal Dikeman [00:13:37] In 2005 to '10, our theory on investing boiled down to "if there's not a big, strong policy change protecting it, don't invest because everything's more expensive." Today, we do not invest for a green premium because we think it's all economics driven. We don't care what happens in Washington or anywhere else. You know, the IRA managed to drop after we had invested into our green hydrogen company, Ohmium, and I'm sitting there going through that document trying to find the catch. It's like, "They cannot have been stupid enough to put this much money into this sector at this cost level without capable catch." Well, there's no catch.

Neal Dikeman [00:14:18] Now, we're all arguing about these green hydrogen rules and what counts and what doesn't. Look, we already made that bet. The technology we were betting on and the cost structures were already natively there. We did not need the government to do this. It's very nice of them to go make venture capitalists money. That's really sweet, I appreciate it. But that wasn't what we invested for. 15 years ago, we would not have invested until after the policy hit, or because we thought the policies were coming in and tightening. So the world is definitely different, but underneath it's still just kilowatt hours and BTUs.

Michael Crabb [00:14:57] Yeah, underneath. So, I'm a state school kid with engineering and econ, not history and econ. But yeah, the core thesis here is just energy conversion, right? Unit conversions. BTUs to kilowatt hours to whatever work that kilowatt hour is doing for society, fuel or food.

Neal Dikeman [00:15:17] We do believe in the electrification of everything in today's world. Obviously, electricity is a somewhat medium to smallish portion of the overall primary energy use. Because we throw a lot of fuel into cars and power plants and refineries and other stuff. But electricity is the ultimate flex fuel. It does not care what you do with it. Steam cares. Heat cares. BTUs and gas care. Combustion cares. Well, electricity doesn't. Look, it's just wonderful.

Neal Dikeman [00:15:51] Now, it's a little bit trickier because this electricity stuff is no solid-state. We're doing batteries and solar and we're not putting inertia on the grids anymore. So, you've got to run things differently. We're finally moving to a world where we're not going to need just a rotating equipment inertial energy grid. And there are really interesting economic and other crossover points when you take a renewables or a solid-state or battery based world. You're not paying for fuel anymore, but you're paying more for capital and then borrowing money or having cost of capital to get that capital.

Neal Dikeman [00:16:31] So, there are some interesting changes that are happening, but we don't believe in betting against electrons. That's a bad bet these days. Doesn't mean gas and oil going away tomorrow. There's still a lot of money to be made in those industries. You can go see it in the multiples and the cashflows and all that. But if I'm looking for the future, I'm betting on electrons.

Michael Crabb [00:16:56] Maybe tell us more on how those themes have influenced how you think about your investible space at Energy Transition Ventures or Old Growth ventures, or are they one in the same?

Neal Dikeman [00:17:10] Old Growth is my little family office. We do some historical stuff in there. The fund is Energy Transition Ventures. And we obviously picked that name, it's a term of art. It's the new name for clean tech. I launched cleantech.org back in the day. I was one of the biggest clean tech bloggers. It's the same stuff, just every few years people want to change the name so they can be the cool kids. And the new cool kid name is "energy transition." Well, actually that was in 2020. Now, the cool kids want to call it "climate tech." It's the same stuff.

Neal Dikeman [00:17:38] So, we've got a couple of theses we really like. The consumerization of energy. I.e., we're moving from a supply-driven world to a demand-driven one. The transition in mobility, broadly defined. Not just electric vehicles but mass transit. Just all sorts of stuff. Really neat stuff is changing. The impact of Uber, for example, didn't actually change the car. It just changed some of the ways we engage with the car. So, when you combine that with EVs and autonomous driving and all this really neat stuff that's coming out, we're seeing complete long-term shifts in the way we consume and use transport, not just consuming use broader energy.

Neal Dikeman [00:18:27] Then, electrification of everything. And as I said, it's driven in our view by this flex fuel capability of electrons. But more importantly, as where are you going to get your primary source from? Energy is a resource play, predominantly. It's a geopolitical risky resource play. And the cheapest resource on the planet for energy today is a solar panel in Texas or Middle East or Australia or Morocco. Nothing can compete with it. In ten years, it'll still be that way. The cheapest way to peak shave these days is probably not a gas peaker, it's probably a stack of lithium-ion batteries. That was not true ten years ago. Ten years ago, it was insanely expensive. So, we don't think there's even a real headroom to where those technologies can go. And one of the firm's rules is "never bet against lithium or crystal."

Michael Crabb [00:19:22] Interesting. I haven't actually seen the math that shows lithium-Ion batteries as truly a better standalone peak shaver than gas, but I could be convinced. I don't feel strongly the other way. And certainly if you're in Europe, that's true. If you're at $8 gas.

Neal Dikeman [00:19:44] If you're competing with LNG, anything is cheaper than gas. The Europeans have got to pay up and the Japanese and Koreans have got to pay up for energy in ways that we don't have to here in Texas. But even in Texas, there is a place in Hearne, Texas, a little town where my family's ranch is. It is a ranch that my father owned in the '80s and sold because it wasn't worth very much. The land, what do you need another ranch for? So, we got our family ranch down the road. There's this piece of property.

Neal Dikeman [00:20:12] So, I'm in Hearne and I'm talking to the city manager. And he's like, "Hey, do you want to see our battery thing?" I'm like, "What battery thing?" He's showing me all the good stuff that's going on in the market and all. He drives me over. I'm like, "I've been on this road." Drives me over the substation on the airport that the city owns on the edge of town. And Key Capture, whose ERCOT team was run by a friend of mine when I was working with ConocoPhillips doing their storage strategy a decade ago was building a 50 megawatt energy storage system, one of the very first large-scale ones to come online in ERCOT, on a corner of the ranch they bought from the dude that bought it from my dad. And this is Hearne. This is a 14 megawatt load on that town, 5,000 people. It's an oil and rail hub in the middle of nowhere in Texas. It's a good little town, but if this is working in person, it is working everywhere. That's what's happening.

Neal Dikeman [00:21:13] Now, can each technology compete 100% across the board in every geography? No. Energy is generally pretty regional. Density of costs matter, resource economics matter, policy matters. Solar is still twice as much to put in here as it is in Australia or Germany on your rooftop. Why? Because of miserably bad local municipal policy and code. They decided to double the cost of the solar over on my roof relative to Sydney, Australia. Sydney's expensive as hell, but it's still cheaper to put solar on.

Neal Dikeman [00:21:46] So, all this stuff is regional. If you look at the rollout history of EVs, it's all regional. Look at LNG, it all regional, big bilateral. There's no LNG market when it started. There are a couple of projects and some bilateral deals to supply gas from Point A to Point B for someone who needed it. Did that generalize to the whole world? No. Even a couple of decades in, it's still a very much "projecty" market. So, it's okay that the world is regional. It's okay that we consume and supply energy differently here in Texas than you do in Korea or in Germany or the UK or Russia or Saudi or anywhere else.

Neal Dikeman [00:22:25] Now, one of the neat things that has been happening... We used to have oil, the crude you can ship in tankers across the ocean and refine wherever and ship refined product and all of that. But you know, it used to be you couldn't do that without violating some laws out of the US. And it used to be the only commodity you could do that with. Well now, we've got corn ethanol grown in the Midwest feeding into the supply chain there. We've got electrons and we've got gas to liquids like the whole Shell Pearl Plant. We've got LNG, we have EVs. We have mixing of new supply sources and new demand source. And some of them function like supply, some of them function like demand destruction. But it's a much more interesting, exciting market. A much richer environment to play in.

Michael Crabb [00:23:13] Yeah, no question. Man, we could spend like an hour on each of those topics. But how does that regional nature... You started that all off talking about regional policy. So, there's a regional resource component, there's a regional market component, and then there's a regional policy component. It's not quite true that you can just make decisions on the fundamentals, right? I mean, you still have to consider market design and policy evolution as you think about your bets.

Neal Dikeman [00:23:44] I'll give you a great example. I founded a company a dozen years ago called Smart Wires. It is the category creator of the GET grid-enhancing technology sector. You've heard of GETs? They didn't exist before us. And what Smart Wires is is a control valve for the transmission grid. And we found it on the paper of a scientist from Georgia Tech named Frank Kreikebaum. He's still over at the company. He basically realized if you can do power control through a transmission grid, you can get around congestion. If there's a problem, you just route around congestion? And what you figured out is, "Well, what if you could do a valve that allows you to redirect power from Line A to Line B, and then when that one is bottlenecked from Line B to Line C to Line E to Line F and back and forth, what if you valved the whole grid? What would happen?"

Neal Dikeman [00:24:34] And his paper shows... This is a 2010 paper, an IEEE paper. And it showed that if you valved everything on a normal looking model grid, you could drive capacity up from, say 60% to like 90%. A 50% increase in virtual capacity on the whole grid just by valving. So, that's what we did. We founded the company. They developed some technology to do that. We founded the company, launched it. Put some product on Southern and TVA power lines with some money from some venture capitalists and some utilities. And the very first RPE bid or contract ever was on that project and proved that it worked.

Neal Dikeman [00:25:13] Because it was utilities, it took a few years and they finally got an amazing project, The National Grid, to not just valve one spot but valve like three or four of them. And National Grid announced it was a 1.5 GW capacity increase, immediately unlocking 500 MW of Scottish wind. For three little valve installations, it cost a few tens of millions of dollars. Orders of magnitude cheaper than building new transmission.

Neal Dikeman [00:25:42] So, why is that not occurring across the U.S.? It's really simple. If you want to go build a transmission line, to do that, you go to your PUC and you basically rate base and say, "All right, I'm going to spend $1 billion. You let me make 10% so I get $100 million." You know, I'm making up these numbers, but they're just for purposes. "So, I get $100 million a year. Fantastic. And you agree that our pricing is good and you always negotiate, etc." The PUC let's you do it and I go spend my $1 billion dollars on it. And then, I give that money to my shareholders and my shareholders give me money. Problem... What if that same $1 billion dollars can be replaced with a technology that cost me $50 million?

Neal Dikeman [00:26:28] And they say, "I'm going to spend $20 million with my lawyers or $50 million with my lawyers to do the right case to spend the $1 billion, but now I only get to spend $50 and they give me $5 million a year, not $100." The utilities are backwards. They can't do it. So, what our guys have figured out... We launched that company in the US. And my co-founder, about a year and a half, two years in, he comes back to me and says, "Hey guys, there's no business here. Southern and TVA were our first customers are really supportive, but no big business. We've got to go international, that's where the business is."

Neal Dikeman [00:26:59] And he hadn't really articulated why yet, but he figured it out. And the board said, "No, we need to we need to stay local. That's what startups do." And about five years later, yep, the whole business is international. Deployed in a dozen, 20 countries. It's Australia, South America, Greece, Bulgaria, UK. And not a single one... We've got, storm and all are grid issues here and not a single GET project done in America. Because the PUC doesn't want to get paid.

Neal Dikeman [00:27:28] So I call up Frank and I say, "I know our stuff is good. I know it works. I know it's cheap. I've watched what you guys are doing; it's amazing." The technology they're deploying now, they quote it as 600 times cheaper per unit of performance than what I had in 2010 when we started. And I'm like, "Frank, why are they not all over the US? How do I frame which projects make sense for a customer in which..."

Neal Dikeman [00:27:55] Well, we figured that out. It took us a while, but basically in the UK there's a shared savings deal. And in some of these markets, an independent who's not a lines operator, the got to propose a project. And if you have one or both of those opportunities, then you get to deal with them. But otherwise they can't get paid. Basically, everything in a rate-based environment that we've got is essentially a subsidized policy, one off units... It's not bad, it just because the utility has to vote against their interest to do the right thing.

Neal Dikeman [00:28:33] Some of these utilities are like, "Look, we know it matters. We're trying to serve the consumer; we're trying to do it." But they can't spend all their capital that way or they'll lose all their money. And so, even when it's an order of magnitude cheaper... Now, if it were 10% cheaper, they could say, "Oh, I'll do this 10% cheaper. Just pay me for taking some extra risk." But if it's an order of magnitude cheaper, they can't do it.

Neal Dikeman [00:28:56] Well, you look at what most startups do. Traditionally, startups are told, "Stay close to home. Sell to customers near you. Focus, focus, focus." It's all right; that's not incorrect to say. Which works, except that if you're selling in the energy and everything is regional and market and resource-driven, sometimes where you enter and what you enter with is very fundamental. And in "SaaS land" they talk about product-market fit and go-to-market, etc. It's all customer focused type stuff. Energy is the same thing. Now, product-market fit is a bit weird because in energy, you can have all the product-market fit you want, but if it costs too much, you're dead.

Michael Crabb [00:29:46] I mean, that's all sort of included in product-market fit, no?

Neal Dikeman [00:29:51] No, no, no, no. There are plenty of times where you have a great technology opportunity but it's just sitting in a cul-de-sac. Or, you can get into pilots. Customers in energy will pilot anything because they can. They're trying to solve problems and they'll spend huge amounts of customer money on R&D, on products, prototypes, pilots, first of a kind. But to scale in energy...

Neal Dikeman [00:30:19] Look, a SaaS company, $1 million dollars in revenue first deal, $10,000,000 million second deal, there's a little metric on what that's supposed to be. You can Google it, look it up. In an energy company, nobody cares about $10 million. It's energy. It's literally not even the ante up to play the game. When we're playing in energy... Well, if it's SaaS you underwrite it as a SaaS deal, but most of our stuff has ended up being hardware, what people call hard deck or deep deck or whatever. It's just products. You're really underwriting to explosiveness. Because if somebody cares in energy, it takes down the whole market. Smart Wires has deployed gigawatts of product. And it's not yet a huge company. It's a good one, just not a huge one yet. And it's gigawatts. $100 million is an ante up on one of these big projects.

Neal Dikeman [00:31:15] And Shell, we can see this all the time. When somebody at Shell cared, when it really moved the needle for our assets and what mattered, we didn't care about a few million dollars let alone $100. It didn't matter. Junior engineers would spend more than that on a well. So, the opportunity here in energy is... We have another rule I used to use. In energy tech investing, there is no capital efficient strategy. It doesn't exist. Everything in energy is about capital in scale. So, you essentially only assume scale.

Neal Dikeman [00:31:55] Our electrolyzer company, to give you an example, they basically started the company with a plant in India planning to do two gigawatts a year from scratch. From the get go. That was part of reason we bet on them. The former team from Bloom Energy who cracked the Bloom Box and and some executives who had joined hooked up with them out of SunEdison and helped create the solar industry. And they figured out very quick, there is no point in a small-scale hydrogen company. It is completely stupid. So, it's gigawatts or nothing. It's kind of the Gigafactory phenomenon that Tesla helped create. Some things you can't take the cost out of unless you're at a minimum amount of scale. Each thing in energy has its scale thing. And so, you can get all the product-market fit you want in a few megawatts of product or some such. And if that's all you get, if you're in a cul-de-sac or a niche, you're done because you can't take the cost out.

Neal Dikeman [00:32:52] And some things like... What's different between electrolyzers now and then? Two things. 20 years ago, power prices were so high, and electrolysis has 70% of its cost in the power price. No matter what you get the product cost to, if the power price is too high, you're done. So, you can only do it in places where power price and that spark gap makes sense. Two, 20 years ago, I would have told you 5 megawatts was a massive amount of product in an electrolyzer. We'd have been ecstatic with that. Today, that's not even the pilot. So today, what you have is customers and companies just saying, "Look, no, no. This only makes sense if we go big or go home, so let's start assuming big and we'll work out numbers to that."

Neal Dikeman [00:33:36] So, the battery people and solar and a few other industries helped invent these concepts. And that's what broke them up in ways that nobody anticipated. And then the good ones not only did that, but they focused on a region where their product at the cost structure they could deliver at the scale they were able to sell out of the gate could win. Whether that was a subsidy program or whatever was getting them there or just better resource economics.

Neal Dikeman [00:34:03] So, walk the history. Battery. One company creates that industry. AES Energy Storage. A couple of dudes out of DC who came out of that company and set up a little entrepreneurship thingamajig and launched it. And they they figured out that with the existing state of batteries 10 years ago, there were places on their network where they were burning thermal to keep up spending reserve that they didn't need to burn the energy. They just needed power, and a few minutes of batteries on that site could save them a year's worth of energy.

Neal Dikeman [00:34:40] And I would go to these conferences and they'd sit there, they'd be talking about all their projects. This is now Affluence; they created the category. And they'd be talking about their projects and everybody else would basically be whining on how this stuff didn't work or we needed more technology or cost enhancers. Nope. They had figured out there was a scale, certain places in the world and certain applications that made sense right now. And then, they walked on the cost curve.

Neal Dikeman [00:35:06] And we saw that in solar, we've seen it in batteries. We're seeing it now in hydrogen. I've been doing it in power electronics for a bunch of my career. We've got a new little company that we backed called Resilient Power. We've got a plant out of Austin that... Frankly, that little factory can probably do up to $100 million worth of revenue. It's 25,000 to 50,000 square foot. You can do a whole lot of volume because each unit costs $500,000 or some amount of money. Because they're big units; they're multi-megawatt units.

Neal Dikeman [00:35:35] And we're doing a solid-state transformer that we happen to be taking in the EV charging market. Why? Because the EV charging people are desperate and will pay because they've got to get their product out. So, they need power... This whole power problem. And our unit can basically replace a stepped down transformer and the switchgear and all the chargers and converters in one unit which the original founders had originally designed to go save the grid, rewrite the distribution grid the same way that Smart Wires is trying to rewrite the transmission grid. And then they realized, "Well, selling utilities is hard, but hey, there's actually commercial customers that have the other side of that problem and those guys are great customers and will buy. And there's other markets."

Neal Dikeman [00:36:16] So, I invested in part because I want to rewrite the distribution grid and it's really exciting. I'm not really a, "Hey, I've got to have an EV fast charger product play." We weren't looking for that. When we got in we saw what they were doing. The technology is just so much farther than what my companies were doing 10 years ago. It's just amazing. And I'm like, "Well, let's just go take this straight to the transformer market." They're like, "Nope. We started there. We've already decided." This product market fit them. "We're going to go after a slightly simpler application with a customer that is really hurting and needs it. It's EV fast charging because we can do it at a fraction of the cost and bring them a lot of value." Spent some time listening, discussing, arguing. Finally said, "Yep, founders figured it out. They've got the right market. Let's launch them."

Neal Dikeman [00:37:06] Now long term, we're going to obsolete half the power electronics companies in the world. And in a good way. So, these founders had already before I met them figured out, "Ah, our product can do a lot of different things, but where does it win the best, the biggest, and the fastest with a customer that really cares?" And so, they go after a particular market.

Neal Dikeman [00:37:33] My founder there, if you get the tagline in his email... He sends out an email and he has some taglines in there just about the signature. It's embedded in the signature and reads like he just typed it just for you that says basically, "Resilient Power delivers fast chargers at one-tenth the price and the size." He's got focus. But they spent time to figure out where to focus and where their product will win, and then started working to find the scale and the cost number that would allow it to win. And they've spent our money and time to ensure that when product comes out, it comes out at a cost that can one-up the floor and take the whole market.

Neal Dikeman [00:38:14] We're not playing with toys. After unit one sells, I expect them to sell 10 or 100 a week. I expect them to win. Because in energy, you can win explosive out of the gate. This is not true in some other tech sectors. But it is. If you think about Tesla, go look at the first year of revenues, true revenues for First Solar, for Tesla, for AES, for any of these companies that helped create their categories. The first year of revenues was not $600,000. That was just still playing in the garage. The first year revenues were big because it's energy. All that matters is scale.

Michael Crabb [00:38:56] Yeah, I'd maybe tweak that a little bit, because the other theme that came out in both the challenge at Smart Wires and in the success of Affluence and Resilience, some of these others is sort of stakeholder or incentive alignment. Yeah, scale matters from a cost curve perspective, but even if you get the cost curve right, having the right incentives in the market is what really drives adoption. And a lot of what you're talking about, or at least a lot of how I heard you describe this... I guess I can't call it product-market fit, but finding those jurisdictions where you win is driven quite a bit by those stakeholder incentives.

Neal Dikeman [00:39:39] Product-market fit is a new concept. It did not exist when I started. And it's very cool concept. There are a lot of things that did not exist when I started. Lean startup, product-market fit, accelerators... These are all decade inventions. The market's so rich and exciting these days. If you're a founder you've just got to be a kid in a candy store even though it feels hard losing to the other team.

Neal Dikeman [00:40:02] So, energy has a product-market fit need. We don't use that term just like we don't use TRL because it's not quite... You're talking past each other. Because so many investors who have not been through these wars before for several cycles or they understand tech and startups, but they don't understand energy... They see some revenues and traction and they assume product-market fit. And it looks like it, but they're not reading in between the lines of what that really means. They're there in what we refer to as pilot pit. Which is a good thing because you've got a customer trying to pay you to help you, but it doesn't mean you are ready to step on the gas. And sometimes it's as simple as the customer is paying to help you, but they cannot go to scale without a cost number of X. The amount they're paying to help you is literally millions of dollars so you think it's at scale, but it's not.

Neal Dikeman [00:41:08] SAF is one of those things, Sustainability Aviation Fuel. I'm very familiar with this market. Again, SAF is a very new term listed. I've got to go look and figure out who made this thing up.

Michael Crabb [00:41:22] It's a lot of acronyms, right? You know, I think what you're going to say for SAF applies to direct air capture as well, right?

Neal Dikeman [00:41:27] Correct. DAC did not exist. The concepts existed, but people coined the terms so they could go create a market. The SAF market, why does this thing exist. Number one, Kyoto failed. Copenhagen... They all failed, and we did not get a global carbon market after Kyoto. So, we have no single price of carbon. So, the world is struggling trying to figure out, "How are we going to solve climate change? We don't have a price of carbon." And we failed because China and India would not sign up and Brazil would not sign up to caps. And the developed world would not sign up to commitments and dollar transfers if the emerging markets whose emissions remain to the roof and where their main competitive trading partners wouldn't sign up to cap, so we just struggled to get the trade deal done.

Neal Dikeman [00:42:18] Out of that Copenhagen era, you got this era of bilateral deals and like everybody saying, "Well, I must do my part. Let me go decarbonize me. My city, my state, my country, my regional industry. And we're all going to do it at the same time." Well, this makes no real sense because CO2 does not care where it goes into the world or it comes out. The climate just cares that it does. The economy cares what it costs to put it in and take it out. The GDP really, really cares. And if you want to do it in a least-cost path or within a capital budget, you ought to take it out in the cheapest places first. But we aren't. We're taking it out everywhere.

Neal Dikeman [00:43:02] So, now we've got this concept of the hard to abate sectors. Well, I'm kind of an originalist in this stuff. I founded a carbon company many years ago and spent a lot of time in the area. And I believe we should abate carbon for $20 bucks a ton or less. The cheapest possible path. I believe power should be cheap. Power and energy has been deflationary and cost for 100 years, except for the OPEC spike, and it should continue to be again and will be. And I believe carbon and CO2 should be cheap to capture and get rid of.

Neal Dikeman [00:43:32] So, we invest in things that are... We'll call them morally pure, that allow us to save the world and not go bankrupt doing it. I don't believe the world can afford $500 a ton carbon and 20 cent a kilowatt hour power and let all emerging markets and everybody else not be poor. And we're not going to fix climate change on the back of the poorest among us. We look at like, "Why can't I have my cake and eat it too?" That's the technology optimism.

Neal Dikeman [00:44:04] All right, so these are hard to abate sectors now, but the world's not doing that because we failed to get our trade deal done. So now, we're moving to, "Let's abate our sector and our country." And now the concept of hard to abate comes in. And then, we're 10 years later, we haven't actually reduced emissions. Well, the US has, but the world hasn't because, well, the emerging markets have gone through the roof. And so, now people are stressed and they're like, "Oh, we need to reduce it faster. Now we must reduce the hard to abate sector."No, hard to abate things are things like jet fuel.

Neal Dikeman [00:44:35] Okay, so sustainable aviation fuels are basically biofuels by another name, for many of the pathways. And so, we're looking at this thing like, "This is just really cool." Now, the problem with biofuels is we went through the cellulosic biofuel wave 15 years ago. And about 5 years in, every single company became the "bio-anything-but-fuels" company. Because they figured out that you can't sell fuel unless it's cheap and good. And they couldn't make it, let alone make it cheap, let alone make it good. So, the whole industry just became a chemicals industry. And this isn't bad. It's just companies doing really good stuff and figuring out where where they can go.

Neal Dikeman [00:45:14] So, fast forward. We don't have a low-carbon solution to Jet A. We barely have one for marine bunker fuel. So now, "Oh, how can we electrify it?" Well, a battery's pretty heavy to put in an airplane, basically. "Can we use hydrogen?" Yeah, but hydrogen's pretty energy non-dense to put in there. So, there are pathways. And so, we're pushing for this SAF, and so the term gets created. Told us is there's interest and activity to attack the problem.

Neal Dikeman [00:45:42] Now, I believe in attacking this problem. But to give you an example, one of the big investors and customers in the sector who's invested in a lot of these companies... I won't name them though you can figure them out... Said at the CERAWeek conference a while back and basically announced, "We're investing in everything because we're trying to get this done. We're trying to be there for people. And we're giving customer contracts and everything, whatever else we need to do. But we can't buy at scale if it costs one nickel more than today. Unless the governments all force us to and all our competitors do. We have no margin. And if we do that, we're going to pass all the cost onto the consumer." There is no margin and no benefit to them for more expensive Jet A.

Neal Dikeman [00:46:24] So, you either have a carbon credit price offset, something, a subsidy, you got something. And I take these guys at face value. They're spending a bunch of their money. They care. And like okay, if we want to win, either you wait for the governments all to get together on something that they probably can't get together on, or you better find a pathway that is cost neutral. So, we believe that the green premium is nice, but we want technologies that are advantaged.

Neal Dikeman [00:46:50] So, we've got some stuff we're working on there that hasn't gotten announced yet. We can talk about it. I'll send you over to talk to the company once it's announced. But we are very interested in that sector. I'm just like, "Look, how do I make it so it's at least the same cost." And ideally, it's 10% to 20% better, including in cost of all dimensions or an order of magnitude better in one or two dimensions. Otherwise, it's very hard to get it into the market.

Neal Dikeman [00:47:15] "Hey, my solid-state transformer easy fast charger is a small fraction of the price and a small fraction of the size. And we've got customers who don't even care about the price, it's the size that matters. So, I think you've got to underwrite in these dimensions differently than a lot of other people do. And that includes in stuff like SAF. You will get a customer that will pay you today 500 to 1,000 plus dollars a time to remove carbon from the Earth. At that price, we can all just buy BP, Shell, Aramco and everybody else, shut them down and cap in their wells. That price is worth dramatically more than assets. So, why don't we do that? No, because that's not a scalable price. So, those are tools.

Neal Dikeman [00:48:07] There's a multibillion dollar CDO market that is literally just a camp to figure out how to scale solutions. That whole market doesn't have product-market fit today. The whole DAC market, there is zero... They think they do, but in the strictest terms at a price that'll clear for a scale that'll matter to the customer, which in climate tech is us, you and I, the world... We are not at product-market fit. Because the best available estimates are literally just "buy BP and shut it down instead." So, we've got to get technology to bring the costs into the floor.

Neal Dikeman [00:48:46] And then, you also have to find a beachhead that is willing and able to pay for it now. But you don't want to assume that subsidy is like renewables or solar. Back in the day, you could get paid tens of cents a kilowatt-hour for your solar in Germany, in Japan, etc. If we did not get the cost down an order of magnitude, if the industry did not... You need to get scale to take costs out to succeed. That was a complete waste. It would be like biofuels in the '80s in California where we had 150 plants. And the moment the subsidy went away, they all shut down. The solar subsidies are gone. The big ones are gone. They don't have any more. Subsidized or not, today, the only thing holding back solar and protecting gas is the government regulators that make it expensive to get solar hooked up.

Michael Crabb [00:49:49] Interesting. Is that your view on utility scale or just distributed scale?

Neal Dikeman [00:49:56] Absolutely. There is not a transmission project on the globe posited by anyone that would not pencil out if it were built. They don't get built because transmission and distribution is a regulatory nightmare. And you can argue there are good reasons why it's supposed to be regulatory nightmare. Fine, it is. And it has been for 12 or 15 years. It has been holding back renewables. But today, renewables are fundamentally cheaper than gas at every level from your house to the field. Getting that power...

Neal Dikeman [00:50:35] The energy is almost free. The marginal cost is definitely free. Getting that power to your house, to the load, transformed, converted, stepped up, stepped down, stored, whatever... The power delivery can be very expensive. And who controls that today? Well, it's largely government regulators from municipal... If we really cared... If you and I care about solving climate change, we'd just greenlight everything. The government does. We'd tell them, "You greenlight it all. No more slowing anything down. If we got rid of every government official in the world, solar wins as fast as they can manufacture it.

Michael Crabb [00:51:23] Interesting. I don't know if I'm that bullish. I think there are regions where that's definitely true. I think there are regions where that's definitely not true. But I do definitely agree that the upgrade backlog and the suite of rights of way, consenting processes, have run completely amok. And there's like 10,000 pages that basically say nothing for these applications, right?

Neal Dikeman [00:51:55] It's not that you would have a perfectly efficient market if you removed all of that. And there are some arguments that utilities are natural monopolies. But in today's world, if a battery pack... You just run the basic math. If a battery pack costs $125 a kilowatt-hour and a solar module costs like 10 freaking cents, it's nothing. These numbers are so low. The old daily targets have been blown away. And that's nominal terms times. That's not even counting inflation. If you take the original DOE targets for what solar and batteries needed to reach a couple decades ago and run inflation against them and then compare them to today, we're not even in the same lead. It's been so blown away it's not even funny.

Neal Dikeman [00:52:51] Back in the day, the solar module was one-half the cost of the install. Today it's like, 5% to 10 %. It's nothing. It will cost you more to get the permit pulled than the modules cost on. That's how amazingly far we've come. Now, does that mean there aren't other soft costs, etc.? Yeah, the industry's attacking these. The Ford F-150... You're not paying for a truck. The truck's free. It's the battery cost. I I go put a utility scale battery system out there, basically it's a Ford F-150 without wheels. The batteries are all of it. So, at the moment you do vehicle to grid and drop solar on the roof...

Neal Dikeman [00:53:42] I'm sitting there one day and I've got a house we're building. It's a little house and I'm sitting there and I'm scaling. I've got roofers on the roof. My electrician is there. They wired a whole house for me for $5,000. The HVAC guy's there, the roofers are there. And I'm like, "Huh. If I had power modules and an inverter and a couple of pieces of gear and a few pieces of wire, the incremental cost for them to put solar and batteries on my house right now if I was just buying wholesale is hundreds of dollars." I wouldn't even notice it in my budget it's so low.

Neal Dikeman [00:54:25] The truck roll to get them there... You see this in building construction all the time. The "it'll take five trucks to do the electrical job" that the crew could usually do with three or four people in a day. They've got to come back five times to go through all the inspections and regulatory hurdles. Yeah, that's quality control etc. Fine. It's quadrupling the costs because every time they run a truck they now charge you.

Neal Dikeman [00:54:58] In utility scale, it's a little bit different. Utility scale, we know how to get the cost down. The cost is steel. But right now, these solar people are offering lease deals on the land that is about 10 times the lease deal that you get for running cattle on that same land. It is like, stupid. I mean, they should just buy the land.

Neal Dikeman [00:55:19] One of my cousins, my sister, my dad, some friends... I've been talking to them about this. Like, well, I'm not sure I want to do that. I don't want to have all that solar stuff on my land. I'm like, "Just sign the deal and buy another ranch. It would pay for three of them." And so, you're looking at this asymmetry where even the cheap costs on utility scale, they are paying the landowners like 20% ROA. Your grass lease on that land would be like 1% ROA. It's nothing.

Michael Crabb [00:55:49] Sort of. But again, I think that sort of boils down some to incentives, right?

Neal Dikeman [00:55:56] Because policy. Because they need the land with a transmission line on it that's underutilized or they cannot play. If you relax the transmission constraint by putting grid enhancing technologies or devices, etc. Our new solid-state transformer... The SST system we've got designed picks up like four points in efficiency. On a solar system or in solar batteries... When you when you add up all the other stuff around it, I mean, it's just free money. So, everywhere I look in this sector, there is free money to go get in the future as we grow and improve as an industry.

Neal Dikeman [00:56:34] It makes no sense if there are any headwinds. The only thing protecting conventional energy today is government protection. 10 years ago, the only thing allowing alternatives to even try was government subsidy. This is a different world. The only reason we haven't solved climate change is because we failed to agree a simple price on carbon, and now we've got thousands of embedded prices on carbon from every different policy around the world. So, we're doing it the hard, expensive way so we can make venture capitalists a lot of money.

Michael Crabb [00:57:12] That I totally agree with. And what an articulate way to describe it too. It's just sort of silly when you step back and see all the different bells and whistles around this stuff, right?

Neal Dikeman [00:57:28] Exactly. We do think there is a cake and eat it too. Now to be fair, I don't have a lot of companies in my portfolio because we're awfully picky. We've got four deals on portfolio. We're working on closing a fifth and we're open to have 10 in this pool. We've probably reviewed, I don't know, 3,000 of them or something. 2,500 since we've set up the fund. So our selection rate is not quite 1 out of 1,000, but it's a hell of a lot higher than 1 out of 100. So, maybe I'm not aggressive enough, but my portfolio's doing better than other people's because we are backing not only just amazing founders and technology that we like.

Neal Dikeman [00:58:12] One of the things we look for is, "Have I seen this before? What's actually new here?" And we've seen a lot of things through 20 years. So, we look at when we see something that's new, "Oh my God. We could not crack that nut." That is the piece that broke everybody else.

Neal Dikeman [00:58:28] And then, you ask the next question, "So what's it actually cost?" Not right now. At scale. We refer to it as the prize. Tell me what scale you need to win to be world scale. Tell me what your costs are there. Work backwards. Don't worry about what it cost to get there. Then you can discuss with me, "Okay, is this going to take $5 million in capital to get there," which it never does. "Or $500 million or $5 billion?" It is a number; a quantum?

Neal Dikeman [00:58:55] And then, we've got to figure out how to form the capital for you to get there. But if the prize, once you reach scale, is not like solar, like batteries, not cheaper than conventional by enough to save the world and make a fortune and pay the cost of capital and all the rest at scale, not today, when you win... Assume you're going to win. If that is not true, do not invest. In the meantime, we may need that green premium. They may need a subsidy. They may need some help. Everybody needs help. But roll forward and make sure the prize is worth it and that you're running down... You can either go slow or full speed or massively parallel down the street. And you better make sure there's not a cul-de-sac at the end.

Neal Dikeman [00:59:44] Investors these days invest in culs-de-sac. They misprice risk. They think things are later stage than they are. We look at D-rounds that we think are less technically mature than pre-seeds we've done. The world's a messy place because a lot of folks have not been through it before. One of the benefits of being old and crotchety.

Michael Crabb [01:00:12] Well, there's a lot to have been through. No, that's fascinating. And like, the quintessential working right to left, right? But yeah, very different from your traditional sort of SaaS-based metrics, so I can see how you've carved out a bit of a competitive advantage in what is generally a commoditized space.

Michael Crabb [01:00:34] I think those last two points are the key themes to perhaps end on here. Is there anything else that we didn't talk about that you really wanted to?

Neal Dikeman [01:00:41] Well, look, I think if you step back to the wrap-up, we all have a choice in life to what we're going to do. I've been an energy specialist for most of my career. I've been in climate since before it was cool and got taught by some amazing people. And I think we do have choices in life to go do fun, big, interesting things that happen to be very, very profitable and do things that can change the world.

Neal Dikeman [01:01:05] And there's an amazing amount of technology out there. I'm what you would call a technology optimist. There's a bunch of people doing a little podcast about that stuff. I definitely am in that camp. I believe we solve climate change and I believe we solve it faster than people think with a lot less pain. And I believe we're working on doing it the hard way just because everybody's trying too hard and isn't coordinating, but it is still a technology problem and opportunity.

Neal Dikeman [01:01:31] And I do this job because it's fun. There are a lot of things you can do in life, and some of them more profitable than running a venture fund, although I guess not a whole lot many if you're good at it. And we have the opportunity every day to get up and listen to pitches from a bunch of entrepreneurs, many of whom we don't think are very on the right track, shall we say, but they do. And we have an opportunity to work daily with some amazingly smart scientists and technologists and coach and help and do whatever needs to be done. We adjust to our founders. Both all of us have had operating roles. I've been a founder half-a-dozen times. I know how brutally ugly and painful it can be.

Neal Dikeman [01:02:11] But when you look down underneath, it's like, "Man, this is really neat stuff." The things that people were investing in or doing... I mean, I've been in the industry for a couple of decades and the reason I invest in them is because they're doing things that we didn't know how to do. They've solve problems that are like, "Oh my God, this is so cool."

Neal Dikeman [01:02:32] A couple of my companies are literally completely disrupting products that were core to businesses I was involved in a decade ago. It is so awesome. And I think the one hope that you like for the world is we need new founders. Our sector needs more founders badly. I don't think we need more capital; there's more money than God in this sector. But we need more founders. We don't need more parasite venture capitalists, but we definitely need more founders. And it's okay just to take some shots on goal. This sector is so big and so important. It can handle all the shots that you could afford to take.

Michael Crabb [01:03:08] What a note too, right? It's massive. A shot on goal today may not work. A shot on goal tomorrow may not work. But the shot on goal the day after that probably will, right? And you just need one to hit.

Michael Crabb [01:03:22] And it's like I said about transmission. It is probably true that every single transmission project imagined would make money in the way the world is going to be in 10 years. Will it? Devil's in the details, but that's how big this stuff is. I mean, the numbers that people quote today in clean tech and climate, in energy, are so much larger and so much better than anything the most optimistic of us were imagining in 2005. The only people talking numbers this big when I started about the stuff we're doing today were the crazy greenies, the nutjobs, the tinfoil hat people. But even I didn't have the guts to assume the level of success that we saw last year. It is so awesome. And so, that has opened up a whole new world of opportunity that we're all getting to benefit from.

Michael Crabb [01:04:21] That's incredible. I'm glad there are folks with your level of industry expertise driving this as opposed to some of the generalists, as you alluded to. But very cool. Well, yeah, really fascinating discussion and thanks for sharing so much of your views. I can't wait to hear about this deal that you've got in the pipeline.

Michael Crabb [01:04:44] That was a fun one. Another one of these really exciting founders. They're doing really neat stuff. Needed some helping hands and needed to get the right stuff around them. I told them, "I'm going to bet a couple million dollars on you and some science projects you've done, basically." Much more mature than that. But it's like, "Look, what you've done... Nobody's given you the shot you need, and it's definitely worth a couple million bucks."

Neal Dikeman [01:05:10] And that's why we win the deals, because you're betting on people. They're going to have problems. This is hard tech. Even in the software, it's tough. In hard tech it's really tough. So, you've just got to bet on people. And sometimes they just need enough quantum to try. And if you lose, okay, I'm losing my money, I'm not deep. I only need one to hit to make the fund so we can afford to take some risk. As long as we're taking it with really good people and an idea that makes sense.

Michael Crabb [01:05:44] Yeah, that's the model. That's the model. Very cool.

Neal Dikeman [01:05:50] Really appreciate the time to talk to you.

Michael Crabb [01:05:52] Yeah. Thanks so much for coming on. Can't wait for it to air.