Bill Gross on The Future of Energy
and Entrepreneurship, Perseverance, Ideation and Leadership
This post is an interview with Bill Gross on the future of energy covering his companies Heliogen, Energy Vault, Carbon Capture, and Stirling Cycles — each of which we are honored to be an investor and partner in. Bill has built and exited seven billion dollar companies, making him the most successful unicorn founder of all time.
In addition to discussing his work in the energy world in this interview, Bill shares extraordinarily valuable lessons spanning ideation, iteration, perseverance, novel insights, passion, building complementary teams, interviewing, CEO selection, flexibility, and choosing investors. Below is a video of the interview along with lightly edited highlights from the transcript. Given how many pearls of wisdom Bill shared, even with many cuts, the text of this post is significantly longer than our typical one.
Future of Energy
Breakthroughs in Energy Technology
What’s incredible about the energy world, is it really powers all of civilization. We have an $86 trillion global economy. And fully 10% of it is energy and energy accounts for all of our comfort and convenience and everything that we experience in life. Obviously all our devices, all of the power for our transportation, air conditioning, lighting everything. And driving the price of that down really really matters as the price of that has come down over history. The world has gotten safer, healthier. Everything is improved as we drive down that price. If we can drive down the price of that renewably, we can have a sustainable civilization. Well, a real breakthrough has occurred. Literally just two years ago, it happened. We’re finally at the point where renewable electricity from wind and from the sun are cheaper than fossil fuels for the first time ever. So we need to deploy that at a big scale.
Heliogen: Industrial Solar Heat
Electricity is just a part of our energy mix. We burn a lot of fuel in transportation. We burn a lot of fuel for heat for our environment and we burn a lot of fuel to make materials. Concrete, cement, steel, wood all use huge amounts of energy requiring thermochemical reactions to make those materials. And those burn a huge amount of fossil fuels releasing a huge amount of CO2 and previously you couldn’t make that from the sun. Well, one of the companies we are partnering together on, Heliogen, is solving that problem.
We’ve come up with a way to use computer controlled mirrors using Moore’s law in computer vision. To create high concentration sunshine is very, very cheap so cheap. So now, not only can we beat the price of fossil fuels for electricity which happened from the huge ramp up of solar mostly in China, but all around the world, Germany, US, China built up huge factories to make solar panels and drove down the price. Now, what we’re doing is driving down the price of solar heat. That is actually 75% of the global demand, 25% is electricity and of our energies 75% is heat in some form. We’re talking to our first customers about rollouts right now.
Carbon Capture: CO2 Direct Air Capture
A new company we’re working on called Carbon Capture is working to commercialize a cost effective way to take the CO2 back out of the atmosphere. It’s trivial to take CO2 in the atmosphere expensively, but it’s hard to take it out inexpensively. We use renewable energy to do it. Our unique angle is to take CO2 out of the atmosphere and at the same time we take water out of the atmosphere and water is very valuable because water is so scarce. So we believe we can use the water we take out of the atmosphere at the same time as CO2 to help make it economical to take CO2 out. It’s not gonna happen voluntarily. You can’t go to call factories and other power plants and say, hey, just do this, they’re gonna say, we need to make money. You can sell the way to make money and people will do it.
Stirling Cycles
We’re working on making a Stirling engine that can use waste heat that could be another way we can reduce fossil fuel use by using waste heat in many industrial processes to reduce burning fossil fuels. Also for electricity or to use that Stirling cycle as a refrigerator as a cooler. It’s much more efficient than traditional cooling, so we can save a lot of energy there for lots of people in the developing world coming online with the resources and richness that we have and they’ll want air conditioning to and that will add a huge amount of greenhouse gases. We can do it efficiently. So I’m hoping that that company can make a big impact there.
The Stirling engine is an engine that was invented by Robert Stirling in 1816. Back then it was eventually overtaken by the internal combustion engine because the internal combustion engine had such good volumetric efficiency and so much power. The Stirling engine has this great property that it runs on heat, not on combustion. It’s what’s called an external combustion engine or just a heat engine as opposed to an internal combustion engine. Well that makes it much cleaner, much greener and it has many, many other applications you can do with it. It’s also reversible, which means if you run it by spinning it, it makes hot and cold like the heat pump. So the Stirling engine has all this great promise, but it has challenges.
It’s hard to make cost effective. It’s hard to make compact and a whole bunch of manufacturing aspects of it haven’t been made to the billion unit scale that the internal combustion has. So the Stirling engine doesn’t have the price reduction over time the learning curve like the internal combustion has made billions and billions of engines have been made over the last hundred years of that engine design. Maybe hundreds of thousands of Stirling engines have been made. I kept making them and I kept looking at what are the fundamental problems with it and I finally realized some of the very critical problems with the engine: the pistons, the lubrication, the mechanisms, all of the things to make the engine work, not the fundamental cycle idea, but all the mechanics around it to get the engine instantiated.
By really realizing that that was the fundamental issue we started thinking, how can we avoid those things. What would be ways we could simplify the mechanism, what would be ways we can make the pistons easier to make? What would be ways we can address each of the issues as opposed to thinking from the ground up? How do I make a Stirling engine of which there’s a limited way and people have tried all different kinds? What are the key problem points that we need to solve and how can we address just those? We came up with an angle that uses a liquid piston, not metal as a piston and that allows us to make an engine without any machining and has low tolerances. So it solves the cost problem. It doesn’t require a lot of machining. We don’t have to make it a billion scale like the internal combustion engine. I wanted to come up with a way to make an engine that we can make efficiently at 1000 scale and 10,000 scale. Now, we still have to prove it.
Physics Era of Energy
We had a multimillion year era that was the biology era of energy and that was basically using our muscles. Or the muscles of animals to give us all of our energy. In fact, before we harnessed animals we only had our own muscles as our way of getting all of our energy. Harnessing fire eventually was the beginning of the chemical era, the chemical era was burning stuff. So that gave us fossil fuels. Fossils left behind stuff that we could burn. And that dramatically magnified the amount of energy we had and it led to the situation we’re in right now. Now the chemical era lead from the first fire, all the way up to basically discovering coal and oil last hundred 50 years and we burn that stuff like crazy, you know, Gigatons of that stuff to give us Terawatts of energy and that has given us civilization, the way we know it right now.
The final era is the physics era. So biology first, then chemistry. Most recently, the physics era is wind, sun, nuclear; all the things that don’t burn anything. You can move beyond chemistry. Physics can provide all of what mankind needs; all of our civilization needs without harm or degradation. It’s perpetual. You can do it over and over again because you’re not using up something you’re using the continuing. Well, actually, you’re using up the sun. But I mean, we’ve got billions and billions of years of the sun. We already successfully moved from biology to the chemistry era. Making the final transition from chemistry. After that, the physics era will really set mankind and civilization free. It really gives us energy too cheap to meter and energy that’s sustainable, so we can have a sustainable civilization.
Lessons on Entrepreneurship
Ideation and Iteration
It’s been one of the most rewarding and exciting journeys definitely it speaks to the motto: don’t give up. Our first idea is not the one that worked. Probably the 100th idea is what we are doing. But what we did is we kept on refining and refining and learning from each trial. And amazingly, it wasn’t a linear path, either. We would go and reach a dead end and then backtrack and then go reach a different dead end and then backtrack and then we say oh my god this path over here. Using a little bit from that first path over here, those two things together. It was amazing. What a puzzle piece of sleuthing it was to put little tidbits together from different trials to come up with the final answer. And it was because we so firmly believed it was possible. But it was so elusive what method it was going to take, but only by reaching a lot of different dead ends and cataloging all the things we learned along the way gave us the ammunition, or the tool chest to be able to put together the final solution.
But my experience in entrepreneurship in general has been that you always start out with a vision of what the change in the world you want to see is. That vision can never change. But the tactics and path and method that you’re going to use to solve that to get there have all kinds of change. There should be a Cambrian explosion of evolutionary paths and a lot of different trials and a willingness to make many iterations and a willingness to stick with it. Now it’s hard, like, a lot of times you feel like you’ve reached a dead end. A classic thesis on this is the whole Lean Startup methodology where you try and make a hypothesis you perform the minimum test necessary to prove or disprove that hypothesis. And then you learn from that. And if you go forward and you try to do that on a low budget in the shortest amount of time.
The hardest challenge of the Lean Startup philosophy and the one that we had to live with in every one of these cases every company, but also Heliogen in particular is how do you decide when to give up. How do you decide when you reach the end and there is no answer, or you should keep on persevering. It’s either pivot or persevere, or give up or persevere. Well, here’s the methodology, we’ve applied and how perseverance has worked. As long as we are still learning as long as we see some new thing that we’ve learned that leads to a new hypothesis. If we truly don’t have a new idea anymore, that really is time to give up so it could have been that, you know, we’re in this challenge here, we’re up against physics. So like we’re up against a competitor, we’re up against physics. So the physics could just say it can’t be done.
Perseverance in Tough Moments
We have had a few hopeless moments along the way that have often aligned with what’s happening in the market or the world and not so much with our own progress, meaning over the last 20 years there’s been a cyclical falling in favor and out of favor of clean technology. There was a time when VCs wanted to be in that. And then there were some big companies and big bankruptcies and after the bankruptcies, which had nothing to do with us, then people pulled back all together kind of blindly, so it was almost like it was a herd syndrome that was very depressing, not the actual technology. So we would have to decide, hey, look: we’re going to keep our heads down. We’re going to hope in a year or two years or three years, the tide changes. The need hasn’t changed, but the sentiment of the moment has changed, and I lived through that obviously a few times on Heliogen and on clean tech, in particular, but I lived through that on the.com crash too.
There was a moment when when our company, some of our companies went down in value 90% even 95% from the beginning of 2000 to the end of 2000 and yet the usage at those companies had gone up, meaning that the number of internet minutes kept on going up continuously and during the .com crash the number of online users kept going up continuously right through the crash. The value kept going up. What dropped was valuation meaning that the only thing that happened was the resetting of people’s mental value, but not the actual utility. So when that’s happening, you have to have the confidence that eventually that will come back. I mean if utility had gone down and the usage of dropped off and the minutes have gone down, then maybe we should have abandoned it.
But everybody was getting more value from it, but the valuations had been out of line and were corrected. So I’m always comfortable to keep on going when people’s perception has gone bad. As long as the reality is there, like, you have to try and be realistic and look at true metrics to address that reality. But if I see that is true, then I’m willing to continue and that gives the confidence to persevere. It’s not easy though sometimes when everybody’s saying: “what are you doing that for?”
Novel Insights: Zig Instead of Zag
I try to find this in all of the ideas. I do. I just think, because that’s maybe the way I think, I’m always looking for what novel insight that we have. That’s a little bit zig where everybody else is zag and what’s the thing that’s new. It’s very easy to go orthogonal to everybody else and be wrong but what you need to do is be orthogonal to anybody else and right. I’m always looking for insight that nobody else has seen because they’re stuck in a certain mindset.
With Heliogen, the angle was everybody else is going with bigger and bigger mirrors and bigger and bigger gearboxes because they think that’s the way to get the economics better. They’ve already tried going smaller and that doesn’t work. And I said, what about if we do smaller but with a new twist? What about if we do smaller but with computer controlled acceleration with feedback? Going smaller is harder, but feedback feedback was the angle.
Same thing with the Stirling engine. Everybody’s going in a certain direction. And we said, what about if we make the piston so radically simpler by using liquid? That has a bunch of problems, but maybe it solves the critical issue of the mechanism. And that’s the insight that we have, again, it needs to be proven still in the early stage, but it’s looking very promising.
Well, I love looking for what’s the twist. What’s the thing that we can do that other people sort of explored but gave up because in fact we’re doing the exact same thing in carbon capture. For carbon capture a lot of people are going down a particular path taking CO2 from the atmosphere using a chemical reaction. And we said, that’s hard. Is there some kind of sponge for CO2 that we can use to take CO2 out of the atmosphere? That will be easier to capture the CO2, it’ll be hard to release, there will be a lot of heat, but maybe our angle can handle that. All angles are a twist. And other people had abandoned that path because they thought that was going to be a dead end. And we resuscitated it again.
There’s a danger when you go down a new path, it might not work, but you aggressively test and prove it. Prove that that works to counter that and then you really have something because you’ve actually moved the state of the art forward because you’ve gone down a new path. When other people have not only not tried something, but actually tried and abandoned it, but you revise it with a new twist, that’s a great combination.
Follow Your Passion
If you want to make an innovation like this, first of all, there’s gonna be a lot of dark days. The only way to make it through is with your passion. But here’s the other reason why I say find all your passions. The way we’ve come up with any of those twists is by thinking about this all the time. I go to bed and I’m thinking about this. I’m in the shower, thinking about this. I’m driving and I’m thinking about this and I’m drawing sketches. The only way you come up with a new twist is by trying 100 things, maybe more than 100, maybe 1000, so how are you possibly going to try 100 or 1000 things if you’re not passionate about it? That’s the only thing to carry you through it. So if you want to do something impactful and different. I say that you have to really, really care about it a lot, doesn’t matter what it is, but caring about it a lot is the fundamental driver to keep you going through all that and then further, as I said earlier, to keep you going through tough times. There’s gonna be times when your ideas are out of favor. I gotta keep going so that we got to be in love with it. That’s the only thing.
Build Complementary Teams
Some other big lessons of mine would be building a complimentary team and it’s very, very hard to work with other people. If you want to do something that is small enough that you can do alone that will be better. But if you want to do something impactful that’s beyond your reach that can scale beyond what you can do alone, then you have to work with other people. I first started out my career by going and finding more people like me because I liked them. We all agreed on things. But I found that that was great for fun, but it wasn’t as great for achieving the end goal. I needed to have other contradictory views.
I needed to have other complementary skills to be able to really build a company to build something that was actually impactful. Learning that there are other people with other skills that you can build mutual trust, respect for even when you disagree like this, you need to learn how to disagree agreeably. Then you can work to one plus one equals three. If you are disagreeable while you disagree that has one plus one equals point oh one, you know it kills everything. It takes stamina to do that. It takes self awareness to go do that to build that. It just takes a willingness to do that. But it’s a really, really important lesson to get that balance inside of your company.
The Value of Transparent Culture
And I definitely believe in this. Personally, I don’t know if this is required for success because there’s so many different ways to achieve success, but I personally believe in transparency and honesty and openness and integrity with the people I work with. And I’ve always found that by sharing more, it was better than sharing less like today, we had a company meeting. Well, I was with you at a board meeting yesterday. And then today. We had a company meeting where I shared with all 21 people in the company I shared the entire board deck with the company. And finances cash out date, how much money we have in the bank where we’re missing our plan where we’re making our plan everything. Everything I shared the good, the bad, the ugly everything. I want everyone to know where we are.
There were people at the end of that call today where they said things like the following. That is so refreshing to know everything. That makes me feel so much more a part of this. That makes me feel so much more a steward of the success of the company. And then some people said, I’ve never been in a company where they shared that like. Maybe it’s their fifth job but they still will never go to a company where the CEO shares that with them. I was thinking, like, how could I not? How can you make smart decisions in this company without knowing everything? Like why would I want you to not know everything? I want you to be worried about things. The more I transmit some of the things I’m worried about, the more you’re worried about them. As long as you are in the same boat as I am rowing. Rowing together we will do better together and I really feel that that transparency has paid dividends.
I found that to be very, very liberating and motivating and it’s sort of a little bit like, it’s just easier. It’s a little bit like if you want to keep a secret. You have to remember what secret you’re keeping. Well, you don’t have to worry about keeping a secret because everybody’s just in on it. And I think people really appreciate that. Like the feedback I got from that was fantastic.
Tips for Interviewing
What I’m really trying to look for when I’m interviewing people is what really excites you and I use that to figure out what is their real motivator to figure out how they’ll fit in as complementary or not. So, for example, everybody wants success, but it’s which part of that success is the part that drives them.
So for some people it’s winning the deal like they want to be like the salesperson or the developer that finishes that piece of code that wins that deal. For some people it’s the process. They like putting a process in place, like they actually feel good about the process. It’s not so much about the win: it is that it was ordered and structured and all that. And there are more administrative types. For some people, they’re very empathetic and they really count what other people are feeling. They really want to understand how other people feel. They want to make people feel cohesive and all that and they have more of the integration skills. Then there’s some people who just love to sketch and daydream and prototype and there are the more entrepreneurial.
All four of those things are valuable, but the way I try to pull them out, which one they are is if you just ask them, they might not know. They might make it up. But by having them tell stories about things that were great successes of theirs reveals where they get thrilled and that tells me a lot about how they’re going to fit in. Are they going to be bringing the thing that I want?
And I also, I really try to do this all the time. Once I see someone that I really like and I like people in general. You know, always when I meet people, I find something to like about them. I don’t want to sell them. I try hard not to sell them. I try hard to get them to sell me a little bit like I can probably convince anybody to come work for me. But I don’t want to convince them. I want to make sure that the fit is really there. So I really want to. I really want to hear from them, like I really want to go over and over what this job really entails and make sure you’re really going to be excited by that. And I almost try to sell them off of it and make sure they really are saying, No, no, no. I love doing that, as opposed to glamorizing and just telling him about the good parts.
I really want to make sure and even when I’m recruiting CEOs, I want to work with, I don’t want to oversell. I really want to say they’re going to be these bad times there’s going to be this, you’re gonna have to go with this. I’m going to help you with this, but you’re gonna have to do this. I don’t want to over promise that. I don’t want anyone to ever feel like my enthusiasm is what won you over the reality was behind that, because my enthusiasm is infectious. So I’m almost overcompensating for that to make sure that people really really are in love with what they’re gonna have to do.
Selecting CEOs
Of course, right off the top integrity and work ethic immediately. That’s not enough. But that’s a necessary condition. It’s really hard to assess. We do it by references with people we know not. We usually do it often by working with people again. So we work with someone as a VP. Then we work with them as an SVP, and we work with them as a C-level and then we say, you really have grown and we really want you to be a CEO. So we’ve had experience with them over many years.
But what we do when we can’t do that is we really try very hard to work with someone for three to six months. First, we’ll pay someone to just join us for three to six months, almost like as an ER or just as a consultant to work on the idea with us at our expense. They’ll even get equity at the end of it, even if they’re not the CEO, they’ll get some equity in the company, even if they move on. But they’ll help us determine if the idea is appropriate to go forward and along the way we’ll see how they work and how they think and and learn how they approach things. We try to do that to help us.
But the quality I would look for the most after that is probably adaptability and flexibility because, look, I was telling you how very often you have to pivot like things don’t work out. And we’ve had some companies where the CEO was a great person, but they weren’t willing to change and respond to what the market was telling them. And they sort of wanted to go down with the ship on the thing that they started with and we would be sitting there saying, we love that idea. We don’t want to give up on the mission of the company. If we had to do that, we would say no. But there’s a way to achieve the mission of the company by changing the direction this much. And that’s really what customers are looking for, or at least we know that we have to be testing that because this kind of thing isn’t working.
I think in the world today, the way you win is with that flexibility, the way a startup can win is by the flexibility. Being more nimble than the big lumbering competitor, because the big thing, the big competitor has more money has more brand has more people has more customers has more revenue has everything. So how are you going to win? Well, either better product market fit or out nimble, them.
Balancing Perseverance and Flexibility
It’s a delicate balance. One way I think of it is a CEO or an entrepreneur or startup needs to be a lot like a heat seeking missile. It needs to be going fast, going forward, not turning around not going sideways, but he’s seeking, you know, adjusting his path like really really paying attention to where the, where the, where the target is and adjusting. I think that’s a good analogy for what it takes to have success. And I think that’s what we try really hard to select for it’s not trivial, but I do think that’s a very important trait after integrity work ethic, you know, honesty and good leadership skills.
Choosing Investors
Probably the biggest thing is someone who understands and believes in what we’re doing. If you have an investor who has only a financial outcome in mind or who has a different view of how to get there. Then you’re just going to be clashing all the time.
We love working with you so much because you have the same vision and a dream for us. And you have the technical ability to understand what we’re trying to do. So you can both support us, be helpful to us, root for us and add value to us. And that’s just been fantastic. So we’re so grateful. There are very, very few investors that we’ve met across the years that have the scientific background and the do good for mankind background that your firm does. We’re really, really grateful.
Final Advice
Think of the world, you would like to live in and whatever dimension that is and then use entrepreneurship and capitalism to make it happen. Because they’re two of the greatest ways you can make a change in life and you can make the world that you would like to live in happen. And that’s very, very rewarding to me, very exciting to me, and I think it’s the greatest leverage of human capability. Entrepreneurship is the greatest way to take human potential and organize it to make the world a better place. So I love doing that and I’d love to see more of that happen and if I can participate in that in any way, I would love to. Thank you for helping me do that.
Prime Movers Lab invests in breakthrough scientific startups founded by Prime Movers, the inventors who transform billions of lives. We invest in seed-stage companies reinventing energy, transportation, infrastructure, manufacturing, human augmentation and computing.
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