Podcast 097: Donnel Baird – His boyhood Brooklyn apartment was heated with an oven. Now he is pursuing a bold, gutsy vision of how entire cities can retrofit buildings and save on energy costs.

Join us as host Bill Nussey talks with the CEO and founder of Brooklyn-based BlocPower, Donnel Baird. Listen in as this visionary leader gives us a peek into a journey of why he started BlocPower, what drove his evolving vision, and how he is scaling his business to retrofit old, fossil-fuel-powered heating with smart new heat pumps and solar panels. Learn about how digital twins, structured finance, and an inspired leadership team is changing the cost of energy for lower-income urban communities all across America. 

Here are some of the highlights from their discussion…

“If we can save this church and this community center 70% on their energy costs, I’ve created enough value to where we can build a business. There’s a huge disconnect and dislocation there. If we can reduce people’s energy bills by 70%, that’s enough money for us to get paid back, for the solar panels to get paid off, and to share some savings with the customer. That was the fundamental light bulb going off that we could in fact build a business.”


“…buildings represent 30% of emissions for the United States and so there is no path to confronting climate change without figuring out how to green these buildings. If we can’t figure out how to green the buildings in America, then we can’t help and support other countries around the world in reducing emissions from their building sector. If we can’t figure this out in America, it’s just not going to happen.”


“…greening buildings doesn’t require a whole bunch of moon shots. It doesn’t require a whole bunch of R&D… We can do it with off-the-shelf hardware…If we start now, by 2030, we can make a massive, massive impact on it and inspire other cities around the world and other countries around the world to do the same.”

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Full Transcript

Bill Nussey:

Well, hello and welcome to everybody in the Freeing Energy world. We are so glad to have you listen in today. I’m Bill Nussey, the host of the Freeing Energy Podcast. As always, it is my deep privilege and for all of us who work on Freeing Energy, we so deeply appreciate the time that you spend with us to share your minutes of your day and hopefully be inspired and motivated by these amazing guests we have today.

On a recent episode of the Freeing Energy Podcast, we actually talked with Michelle Moore, the CEO of Groundswell, about her new book, pretty awesome book, Rural Renaissance, and the work that she’s doing to help rural communities make the transition to clean energy real and affordable. One of the pathways to take in that transition is energy efficiency.

You can put all the solar and batteries in a house, but if the windows are leaking and the HVAC and the heater are incredibly inefficient, it’s for naught. So efficiency as Amory Lovins told me when I first interviewed him from my book, he said, “You got to focus on efficiency. That is the fastest, best place to start, one of the most important parts of the clean energy transition.” I mentioned Michelle before I introduce our guest for a couple of reasons.

They both have strong connections to the White House and did work with the former president, Barack Obama. They also have deep Georgia connections, which is where I’m based, and my producer, Sam, are based. While they have a few of these things in common, they also do some very different work. Michelle focuses on rural communities, but our guest today is using sophisticated software and structured finance to partner with utilities and governments to identify finance and upgrade building energy systems in America’s urban core.

Now, especially in lower-income neighborhoods where aging buildings are drafty and tenants often don’t have heat because aging fossil fuel boilers just don’t work. It’s a problem that not only has a huge impact on the everyday lives of people, their wallets and their communities, but also on the climate as well. There’s another difference here too. Our guest chose to go the for-profit route.

He’s raised over a $100 million since founding the company in 2014 and has scaled his company in a very, very tough industry, construction and renovation of older buildings. It’s an industry on the surface that might cause a lot of investors to look the other way. Fortunately, a lot of them have leaned in heavily on this.

Almost after a decade and several thousand building renovations later, here we are, and just this year our guest, his company was named the fourth most innovative company in the world by Fast Company. TIME Magazine included the company in its 100 Most Innovative Companies List and the National Venture Capital Association honored them with a startup innovator award.

I am thrilled and honored to introduce our guests today, the CEO and founder of Brooklyn, New York-based BlocPower, Donnel Baird. The story is all about local energy one block at a time. Donnel, welcome to the Freeing Energy Podcast.

Donnel Baird:

Thanks so much for having me. I’m glad to be here. We definitely want to go one block at a time.

Bill Nussey:

Well, you have such an inspiring story, and we’d like to start by sharing with our listeners the background of our guest to make sure to remind our guests, you are human. What shaped your journey? What makes you tick? We’ve done some background research and found that your parents immigrated from Guyana to start fresh in the United States when you were little. Your family moved to Brooklyn, New York neighborhood of Bed-Stuy, you learned firsthand what it’s like living in a building with an outdated energy system. How did your family deal with the cold winters up there in New York?

Donnel Baird:

Well, New York, it’s certainly below freezing normally in the winters and sometimes gets below zeros, rarely. So it would be really cold, and we didn’t have a functioning heating system in our building in Brooklyn in Bed-Stuy and so we would heat our apartment with the oven. We and all of our neighbors would turn on the oven and open up the oven door in the kitchen. Sometimes you’d put a fan in the kitchen to blow the hot air from the oven, from the kitchen into the rest of the apartment.

Then we would open up a window to release a carbon monoxide that was coming out of the oven. That’s how we and all of our neighbors in the building and lots of friends and family members who lived throughout Brooklyn, that’s how we stayed warm in the winter.

Bill Nussey:

It’s amazing. It worked, and I can’t imagine how ineffective it is and how much that kind of situation is set to be improved. Well, I mentioned several connections with Michelle Moore, our previous guest, and one of them is Georgia. Your family moved from Bed-Stuy to Atlanta, Georgia when you were young, and Michelle also spent a lot of time in Georgia when she was younger and you attended a school here in Atlanta and you earned a scholarship to Duke University, where you studied history, literature, and Black studies.

I’m thinking about you’re moving from New York down to Atlanta. What was that like and why did you end up at Duke of all places?

Donnel Baird:

I studied history, literature and Black studies. Man, I would go get a mechanical engineering degree at Duke if I had to do it all over again. My dad’s a mechanical engineer and he really wanted me to get one and like any rebellious 18-year-old, I was like, “Dad, I got to learn history.” Of course in my field, mechanical engineering is what we do. It was a transition from New York to Atlanta. Atlanta, when I moved down there, it was like 1990 pre-Olympics.

You guys remember, Atlanta was a very different city. It was more provincial. It was less international. New York is an immigrant city. People rub elbows on the subway every day. I think the joke that the rich private school kids I went to school with in Atlanta used to say about the subway system, it’s called MARTA, as you guys know and they would say it stands for Moving Africans Rapidly Through Atlanta, which is racist and ridiculous, but also, everybody in New York rides the subway.

It’s not for one group or class of people. Whereas in Atlanta, at the time, that was the case. Now of course, a few years after I moved to Atlanta, the city changed rapidly. I think the Olympics really kicked off Atlanta as a global city, global business community, expansion of Hartsfield airport. Atlanta’s just a really different city today than it was when I was there. Far more international and worldly and cosmopolitan, so it’s always fun to go back and visit.

But it was quite a transition for me. Then at Duke, I was a huge athlete in high school. I ran varsity track, did varsity basketball and was just a huge fan of college basketball generally. Love college basketball, did not particularly care for Duke as an individual basketball team, but was a huge fan of the sport. The combination of an incredible campus, powerhouse sports, and great, great academics and a helpful scholarship was persuasive for me to go to Duke instead of other places.

I was looking at Howard University in D.C. and Princeton and a few other places, but Duke was the right place for me. It really ended up being a super transformational experience for me. I’m not sure that if I’d gone to another college that I’d be the specific person that I am today. The specific students and professors and classes I took really had a huge impact on me at Duke, and I think really altered my trajectory.

Bill Nussey:

Well, it has to have shaped who you are. I mean, you spent your time there, community organizing, around that time you became a senior staffer to the Obama campaign, and I hear you even met your bride-to-be there as well. Is this all part of that window of time in your life?

Donnel Baird:

Yeah, I had the chance to-

Bill Nussey:

That’s a lot for college, man.

Donnel Baird:

I had the chance to have dinner with President Obama last year at our investors’ house, Mitch and Freada Kapor Klein. You know Mitch Kapor, who did Lotus, old school.

Bill Nussey:

I ran into him back in the old software days. Yes. Back in the old days when software was sold on floppy disks. I had the-

Donnel Baird:

He’s still quite an active venture capital investor and is the lead investor in our companies, invested a couple times. He had President Obama over for dinner to celebrate Freada, his partner and spouse, her birthday, in my introduction I said, “Hey, President Obama, I worked for you on your first and second campaigns, and by the way, I met my wife on your campaign.” Without missing a beat, he goes, “You’re welcome.” The college years and the community organizing years and the Obama years were incredibly formative for me.

I had a really special relationship with a college professor named Lawrence Goodwyn, who was one of the foremost historians of the populist uprising in the American 1870s and 1880s and 1890s, where all of the farmers in America rose up and tried to bypass American banks to create their own cooperative bulk purchasing institution and laid the groundwork for what eventually became the Federal Reserve System of the United States. Anyway, he happened to be like-

Bill Nussey:

Wow.

Donnel Baird:

… America’s greatest scholar of this really boring thing, but really taught me about the Black civil rights movement, which he felt shared a lot of parallels and similarities to this farmers’ uprising in 1890. He felt like the African American civil rights movement in the 1960s shared some overlap and some similarities. That education that he gave to me about those two social movements was really transformative to me.

He and I were very close, almost like a surrogate grandfather, and he taught me about community organizing and sent me into the community organizing world, where I was mentored and supervised by the same dudes who happened to have trained Barack Obama 25 years before me. Obviously, they produced an incredible student there. When Obama decided he was running for president, they gave me a heads-up and I said, “You know what? I’m going to quit my job in Brooklyn.” Where I’d been working for a few years after college and moved down to rural South Carolina to join the early days of the Obama campaign.

This was back when he was still 30 points behind in the polls to Hillary Clinton and didn’t look like he could figure out how to survive a presidential debate with his dignity intact and that kind of stuff. It was pretty early on, but was a really transformative set of experiences for me. I met my wife, but also learned about American politics, but also got to travel the country and see that whether it was Charlotte, North Carolina or Cleveland, Ohio or Jackson, Mississippi, the issue of neglected buildings, antiquated energy systems, unhealthy housings, that those were issues in every city and region that I visited.

I ended up in eight or nine places for Obama and then Pennsylvania for the general election. Certainly in Philadelphia, where you have the highest level of home ownership of low-income families of any major metropolitan area in New York. Philly used to have all these factories and the families worked in the factories, made enough money to buy their homes, they left those homes to kids and grandkids, the factories have left, and now there’s not enough money to maintain those houses.

So the homes are owned by low-income families, but are super neglected and so Philly has the highest percentage of low-income home ownership in the country. Anyway, buildings super neglected, need a lot of help. I saw these patterns and that was a real education for me, not only about politics, but the eventual green buildings market that I would try to disrupt through BlocPower.

Bill Nussey:

One of the things that I think was a pivotal point for you was the choice between law school and business school. You earned an MBA from Columbia and it was there, I understand, that you spotted an opportunity to raise seed funding for an idea you had had via a Department of Energy grant. We love to talk about the DOE here because there’s so much money available for so many good ideas and people that come through the venture capital world just don’t realize what a great resource this is here in America.

There’s a funny story about, you had a classic calendar conflict. Let’s see. You were working on your MBA, there was a final exam and you had to go visit the White House, a bit of a schedule conflict there. How did you resolve that? Which one did you choose, the final exam or the chance to go to the White House? I’m really curious.

Donnel Baird:

Oh, man, I went down to the White House and the professor who was so mad at me. I emailed him and said, “Hey, I got to go down to the White House.” Provisionally, I won this contract to launch my company, which is the goal of Columbia Business School, to produce entrepreneurs, and they do a great job of that. This professor in particular was like a stick in the mud. It was one of my favorite classes.

It was about the patterns of economic development in emerging markets. As economies develop, you’ll have flour and flatbreads, and then how does the energy system work? Then you look at Brazil versus sub-Saharan Africa, versus India, versus China, versus Japan and how different countries in the Global South develop. Fascinating class. Anyway, I emailed him and said, “Hey, I’m going to have to miss the final exam to go down to the White House and negotiate this contract. Can I take a make-up?”

He said, “No, if you don’t come to class, I’m going to fail you because I feel like you’ve missed a bunch of classes.” I said, “Yeah. Well, I’m trying to get my startup off the ground and maybe I’ve missed a class or two, but it’s my favorite class. Surely that’s going to count for something.” He’s like, “No, if you don’t show up to the final, I’m going to fail you.”

I bought my Amtrak ticket and went down to D.C., was able to successfully negotiate with folks from the White House and the Department of Energy who basically were like, “We hear you’re some kid, you haven’t finished your MBA, you don’t have a lick of business experience. Are we actually going to give you a $4 million contract just to…” Yeah. Yeah.

They were putting in 2 million in cash and we had to match it with 2 million, but we were contracted to deliver $4.2 million worth of services and we had no employees. I called LegalZoom and paid $300 to form an LLC to get it started.

Bill Nussey:

Yes. I love it.

Donnel Baird:

Somebody caught wind of this and they said, “Before we hand out this contract, get this guy in here to see if he’s the real deal or not.” Yeah, I told the professor that I was going to miss the class. I emailed the dean of students and she said, “Don’t worry about it, Donnel, we’ll find a way to let you graduate and have your business degree. The professor did fail me.

Bill Nussey:

Oh my goodness.

Donnel Baird:

But we were able to get the contract and that’s how we got BlocPower rolling.

Bill Nussey:

Wow. $2 million, passing grade. I think for the future of the planet you chose well, but what a silly trade-off that you had to make.

Donnel Baird:

Thank you, Bill. I thought it was silly at the time-

Bill Nussey:

Again, Donnel, I love these-

Donnel Baird:

… Bill, thank you.

Bill Nussey:

I think a lot of people want to be an entrepreneur and a lot of people can do it, but this is the gritty story. I mean, I was trying to start a company when I was graduating a few years earlier than you, but I had the same meeting with my professor and I said, “Listen, I’m going to miss this exam. I’ve barely been in your classes because I’m starting a company.”This was decades ago, and fortunately he had the opposite thing. He said, “Man, if you’re going to start a company,” he says, “Go get on the plane, go close that customer and we’ll figure it out.”

Donnel Baird:

That’s awesome.

Bill Nussey:

When I’m asked about those pivotal moments in my life that turned me into an entrepreneur, I tell the story of Tom Miller. He said, “Listen, you’ve failed this thing entirely.” It was another project. He says, “I’m going to give you a B anyway because the bigger thing you’re doing is worth it.”

Donnel Baird:

Oh, that’s amazing.

Bill Nussey:

That changed the course of my life, that one comment. College is a phenomenal place to figure out what your direction is, even if the college doesn’t basically get it.

Donnel Baird:

Well, they love me now.

Bill Nussey:

That they do.

Donnel Baird:

I was Columbia entrepreneur of the year last year, and I think I’m a distinguished young alum this year, so it all worked out for everybody.

Bill Nussey:

Talking about BlocPower and the creation of it, all these experiences you’re having, what was the aha moment when you said, “This is what I got to go do?”

Donnel Baird:

Well, the moment where I knew it would work was I was sitting on the steps of Columbia Business School, obviously not doing any of my homework or assignments, but working on the business. I got a call from a solar company who I had sent to visit a project in Staten Island Community Center and a church. The solar company guy called me and said, “Look, I think we can save this church and this community center 70% on their energy costs.” I said, “Holy shit, 70.”

Bill Nussey:

70%.

Donnel Baird:

If we can save this church and this community center 70% on their energy costs, I’ve created enough value to where we can build a business. There’s a huge disconnect and dislocation there. If we can reduce people’s energy bills by 70%, that’s enough money for us to get paid back, for the solar panels to get paid off and to share some savings with the customer. That was the fundamental light bulb going off that we could in fact build the business.

I think getting the DOE contract was the second that it seemed that customers and certainly the federal government were interested in the problems we were trying to solve and the particular solutions that we were bringing to the table were valuable. So then the question was, can we operationalize this and scale it? Which is a question I’m still trying to answer.

Bill Nussey:

I love the fact that the DOE grant was formative to the creation of BlocPower. In the time we have left, let’s talk about what it is that you guys do. I think everyone’s heard of BlocPower, but just I think start with the, so what’s the problem? How big is the problem? Then take us into what you guys are doing to address it.

Donnel Baird:

Well, there’s 125 million buildings across the United States. About 5 million of those are medium-sized buildings, churches, synagogues, mosques, schools, small businesses, restaurants. There’s about 300,000 skyscrapers. The rest of the buildings are mostly single-family homes, big ones, small ones, but single-family homes. You got the middle of the pack, you got single-family homes, and then you have the giant skyscrapers and there’s far fewer sky scrapers than most people realize.

These buildings represent 30% of emissions for the United States and so there is no path to confronting climate change without figuring out how to green these buildings. If we can’t figure out how to green the buildings in America, then we can’t help and support other countries around the world in reducing emissions from their building sector. If we can’t figure this out in America, it’s just not going to happen.

We really feel a strong mission and sense of urgency around figuring out how to green the buildings. The other reason, Bill, is greening buildings doesn’t require a whole bunch of moon shots. It doesn’t require a whole bunch of R&D to… Carbon capture, incredibly important. What Form Energy is doing is amazing with the iron batteries, but those are R&D-heavy… If the R&D stuff doesn’t work out, then you don’t have a business.

Greening the buildings, we can do with off-the-shelf hardware, we need to build a lot of better software, but we can build software quickly. Greening the buildings is something we can do. If we start now, by 2030, we can make a massive, massive impact on it and inspire other cities around the world and other countries around the world to do the same.

The thing that’s so exciting for me about greening the buildings is it’s possible to do it now technologically and there’s more than enough capital from Wall Street to finance that in terms of capital that’s interested in green infrastructure or ESG or renewables. The money’s there, the technology’s there. To us that just leaves will. Political will, interest and appetite from consumers and that actually ties back to some of the stuff that I learned in my history classes from my professor about how do you build a social movement?

I think at BlocPower, part of what we’re trying to do is to take the best learnings from Silicon Valley and Wall Street, but also from the world of community organizing and also from the world of the Obama campaign and mix it all up into a movement to green America’s buildings because that’s something that our current generation of Americans can do and take full responsibility for doing or not doing. That’s what we’re about.

Speaker 1:

Rapid adoption and deployment of renewable energy technologies that tap wind and solar as sources of energy are key to accelerating the transition to a clean, fossil-free energy future. These technologies work and they offer us a ready solution today. Can other solutions play a role in this transition too? What if each of us adopted a few simple and affordable energy efficiency upgrades to our homes and offices?

Being more energy-efficient is an idea that has been around for a long time. In his book, Freeing Energy, our host and author, Bill Nussey, recounts a conversation he had with Amory Lovins who many argue is one of the earliest champions of energy efficiency and a person who has had and continues to have a huge impact on the Freeing Energy project. Lovins told Nussey that, “The cheapest form of energy is the energy you never use.”

You can read more about those conversations in Freeing Energy. The work that Donnel and his teams at BlocPower are doing is a perfect example of the impact that an energy efficiency focus can have on people’s lives, especially in an urban setting, one building at a time. As we are learning, the innovations coming out of BlocPower will allow the company to scale its solutions to more and more communities all across America.

It’s a solution that could not have come at a better time. Why? Because U.S. buildings account for 35% of the U.S. carbon dioxide emissions that drive the climate crisis. Our friends at the U.S. Department of Energy remind us that our homes, offices, schools, hospitals, restaurants, and stores consume a lot of energy and money. We spend over $400 billion each year to power our homes and commercial buildings that consume 75% of all the electricity used in the United States and 40% of the nation’s total energy.

Much of this energy and money is wasted over 30% on average according to the Department of Energy. The DOE also notes that energy efficiency supports nearly 2.4 million jobs across the country. As of 2019, the energy efficiency sector continued to produce more new jobs, about 54,000 than any other energy sector. Around half of the nation’s more than 123 million homes and 5.9 million commercial buildings were built before 1980, prior to the existence of today’s efficient products and most equipment standards and building codes.

These buildings represent a significant opportunity to unlock energy savings through efficiency improvements and this means local jobs. Money saved on energy costs also flows to other sectors of the economy, which can lead to more job creation. Our hats are off to the purpose-driven innovations that Donnel and the BlocPower teams are bringing to our communities, one building at a time.

Now let’s get back to Bill and Donnel to hear even more about this blockbuster clean tech company, BlocPower. Don’t forget to like and subscribe to the Freeing Energy podcast.

Bill Nussey:

One of the core elements behind your ability to scale BlocPower, is this platform you’ve built. It’s a SaaS, software as a service, offering and it addresses a lot of the inefficiencies and the processes for all this work that you guys do and so many others try to do. I am a lifelong software nerd, started out as a programmer, and I’m super interested to learn about this.

We understand that you were able to cut the engineering costs alone by some 90% of your system. I mean, this is like a software dream. Tell us about this platform you guys created and how’d you come up with it and how has it evolved over the years you’ve been using it?

Donnel Baird:

Yeah. I mean, like so many things in construction, which has become more inefficient over time as opposed to all of the other industries in our economy, construction somehow gets less and less efficient year over year. Assessments of green buildings or the potential for greening buildings for energy efficiency is a mechanical engineering problem, an electrical engineering problem but it’s manual. Guys walk in with literal… There’s this thing called a smoke pen, Bill.

I don’t know if you’ve ever seen it. It’s the size of a pen and you push a button and it releases a plume of smoke. The green buildings inspector will walk into your house and do an assessment with their smoke pen. They’ll release a plume of smoke and then they watch which way the smoke blows in order to assess the internal thermodynamic… The draftiness really, but the internal thermodynamic system of your building.

You go in to Goldman Sachs, you’re like, “Hey, I need to borrow $50 million.” They’re like, “Okay, how do we underwrite the engineering assessments?” You’re like, “Well, there’s these guys who have smoke signals and they assess the smoke signals and then we’re going to invest your $100 million on what they say.” Goldman Sachs is not going for that.

So what we have done is started to use and build digital twinning technology using some of the open source software we got from the Department of Energy and customizing it and building our own proprietary instance where we are building digital twins of buildings. We have a project with Jeff Bezos where he gave us some money to build digital twins of all 125 million buildings across America through his new climate philanthropy.

When we build a digital twin, what we do is based on the building’s age, size, typology, climate zone, use case, we run a predictive simulation of how that specific building wastes and uses fossil fuel energy and what the return on investment would be if we replaced its current fossil fuel energy sources with green energy equipment and green energy sources. We are building digital twins of every building in America.

Then we have an AWS set of container computers that compute and develop this algorithm that allows us to predict fossil fuel waste and consumption and provide decarbonization plan to millions and millions of buildings across America. Because we’ve spent, at this point, five years building this platform… And God bless Jeff Bezos for accelerate… I like won’t let people talk bad about him because he’s really been incredibly helpful to our firm.

We now have the ability to try and decarbonize whole cities. We’ve won the first three contracts in the world to decarbonize all of the buildings in a city. The first is Ithaca, New York where Cornell is located. The second is Menlo Park where Stanford is, and the third is San Jose, California, which is one of the 10th largest cities in the world and an order of magnitude bigger than Ithaca and Menlo.

But because we have these digital twins, our belief is that we can build an Obama campaign style movement to send people door to door to figure out how to decarbonize buildings in the same way that the Obama campaign sent people door to door to identify new voters to turn out and elect him president. That’s what we’re doing.

Bill Nussey:

The number of threads you’re weaving here together, it’s a bit intimidating, certainly inspiring. 120 million digital twins. There’s an incredible vision here. I love it. I’m very interested in how you’ve been able to thread the needle on a mission that has so much social impact and also building a company that is for-profit. Did you ever think about doing this as a non-profit? How do you trade off the pros and cons of being a profit or non-profit business as you’re scaling this up?

Donnel Baird:

Yeah. Great question. I had initially thought that BlocPower was going to be a non-profit. I’d never worked in a for-profit business in my whole life. I mean, I worked for Old Navy when I was 16, but other than that, I never worked in a for-profit and just had no idea how to run a business. I don’t come from a family of entrepreneurs or anything like that, and so that’s why business school for me was so important to teach me about business.

We thought that initially this was going to be a non-profit. We’d stand it up, and maybe I’d go be a consultant at Bain or McKinsey or something like that. That’s what my wife thought. But look, I mean, this is a $4 trillion market. Greening buildings in America, much less globally, it’s $4 trillion of equipment and labor, so just a massive TAM, total addressable market. It’s just a massive business opportunity.

Again, I think it’s the most important thing that we can address short term, near term, where we can guarantee that if we put dollars in that we’re going to get greenhouse gas reduction out. You can’t address a $4 trillion market opportunity if you have to raise money $50,000 at a time, which is normally how the non-profit sector is financed.

So even though I was quite uncomfortable with it, we determined that if we worked backwards from the problem and the solution we wanted to bring to green low-income buildings, it just had to be a for-profit because of the scale of capital that was needed. So it was deeply uncomfortable for me, and sometimes still is. It’s funny that we got this award from the National Venture Capital Association since I hate venture capitalist so much, present company excluded.

Bill Nussey:

Thank you for that qualification.

Donnel Baird:

Yeah. It took something doing for me to understand that this was going to have to be a for-profit and then to believe that I was the person to lead it. Over the last eight or nine years of working in the business, we think that we made the right call. We’ve raised around $200 million or so to address this problem of private sector capital. Again, that’s just a drop in the bucket to the size of the market opportunity.

So the size and then the speed at which we need to move to not only win the market from a competitive standpoint, but to address the climate crisis, the speed that we need. I mean, we have said publicly and signed legal contracts that have said, “We are going to green all of the buildings in three cities in the next seven years.” So we got to move fast and we got to move fast at scale and we need to look more like an Uber than Habitat for Humanity. Although we love and appreciate Habitat for Humanity’s work a great deal.

Bill Nussey:

Let’s talk about the basic unit economics of what you guys are doing. You mentioned very early in our conversation about cutting electricity bills by 70%, but some of your early pilots, you had some just crazy good IRRs on the investments. I think this was one of the biggest surprises to me when we were preparing to talk to you, is just how compelling you’ve been able to make the economics of this. What does that look like on a unit or a city basis, however you think about it?

Donnel Baird:

Yeah. I mean, in the first couple projects that we worked on, we had a 61% IRR. Yeah. Greening low-income buildings, and that was-

Bill Nussey:

61% IRR?

Donnel Baird:

This particular church was like 150 years old, Catholic building in Brooklyn, so super old. They were spending $120,000 a year on energy, $10,000 a month. We could invest $25,000/30,000 or so, not a huge amount of money, especially relative to their energy cost to put in a boiler management system that would reduce their energy consumption by 30%.

We knew that we could invest a little bit of money and generate $36,000 a year in savings to the church on their energy costs and that if we generated $36,000 a year in savings, we could take a portion of that savings to repay our $25,000 loan. That make sense? We put 25K in, we generate $36,000 of savings in year one, but that’s $36,000 of savings for 15 years over the life of that equipment. That’s how you get to some of these crazy IRSs.

Then normally you’d say, “Well, that’s a great investment. Why wouldn’t a bank show up and make that investment and get that IRR?” Well, the bank doesn’t view that church in a low-income community as a financeable project. So we’ve worked for five years with Goldman to develop an unsecured structured financial product that allows us to go in a ‘subprime’ communities and investment opportunities and invest in deploying clean energy. So it took some doing, but that’s what we do.

It is a market opportunity for those who are willing to do the legwork to see it. Then you got to run around and persuade a lot of low-income pastors and rabbis and imams that they should move to green energy equipment, which is a whole other problem. Can you do that with a CAC, with a customer acquisition cost that makes sense and how do you do that at scale? Because we built our digital twining technology, then it actually becomes more like an e-commerce play.

Because we have a predictive model, without visiting the church, we can say like, “Hey, we think this church is a great investment opportunity with a good IRR. We’re going to email that pastor and do digital advertising until he or she responds. Then we’re going to try to organize the investment opportunity.”

The digital twinning, the mapping of the physical world and moving the world of atoms and moving it to a world of bits, generating some efficiencies operationally before we go back into the world of atoms, that’s what we’ve been learning from Mitch Kapor and Ben Horowitz and all of our VCs in Silicon Valley about how to do, and that’s what the fundamental market opportunity that BlocPower trying to exploit is about.

Bill Nussey:

Well, hey man, listen, if you deliver on a 10th of this vision you’re casting, you’ll have no shortage of honorary PhDs.

Donnel Baird:

Great.

Bill Nussey:

Your dad would certainly, I would imagine, be pretty proud of where you’re going. Anyhow, one of the things that I’m fascinated by your conversation today is the journey of becoming a business person. Maybe you didn’t quite say it, but being a very visible leader wasn’t necessarily your goal. Yeah, I see you’re shaking your head. If you could go back to younger Donnel when you were thinking about what you wanted to do, choosing the things, the big decisions that have shaped the journey that you’ve had, what would you tell yourself? What do you wish you knew then?

Donnel Baird:

Interesting. I feel like it took me… I mean, I was 30 before I really entered the world of business and so I would’ve loved to learn more about business in my 20s. I got to listen to Evan Spiegel, the founder of Snapchat at a conference a couple weeks ago in LA, and he’s still pretty young. He’s got this publicly traded company.

I want young people… and I would tell myself the Silicon Valley archetype of a 19-year-old skinny white dude that drops out of Harvard or Stanford who’s a computer savant and has been building computers and writing codes since they were 11 years old, Bill Gates, Steve Jobs, Mark Zuckerberg, Drew Houston, Aaron Levy, all those guys, God bless them, but that archetypal founder, I wish that I’d understood earlier how to find the pieces of that archetype that I relate to in myself so that I understood that there was room in the Silicon Valley model for me and more people like me.

Particularly people who were like a Zuckerberg or a Gates or a Job, ambitious, high energy, focus, run through walls, in those ways I do meet that model, in other ways I totally don’t. No matter who you are, if you are ambitious, relentless, focused, committed to winning, focused on leveraging new technology to solve problems, I would say who gives a shit if you’re solving problems that aren’t the climate crisis? But that’s just me.

We do want the smartest, brightest, most relentless young people in the country who are going to come from all zip codes, all genders, all races, all backgrounds, all schools. Some of them may go to college, some of them won’t, but we need their brains and we need their talent focused on the climate crisis. Somehow or another, we got to tell them that there’s room for them in solving what has to be solved as we battle this crisis.

One of the things I hope BlocPower can do is serve as a bridge for those young people into this work. One of the things we’re doing is we’re trying to do a partnership with President Clinton and a bunch of universities where in their intro computer science classes in the universities that choose to partner with us, they’re going to learn how to build software for the open data platform and open source community that Jeff Bezos is helping us to build containing digital twins of all 125 million buildings.

We’re on the phone with the president of Vanderbilt University. It’s like, “All right, so every kid that takes a computer science 101 class, as part of Vanderbilt’s commitment to sustainability, can they start to analyze and interrogate data on all of the buildings on Vanderbilt’s campus?” That’s easy. What about all the buildings in Nashville? All right. That’s all right. What about all the buildings in Memphis or the whole state of Tennessee, in rural Tennessee as well?

How do you get this next generation of young people to continue to protest and push all of us to invest in climate, but also to take that pathway of the brash young, disruptive Silicon Valley archetype where we’re going to overturn the old order? In this case, it’s overturning fossil fuel dominance of our economy through the use of software and smart services.

That’s one of the things that I wish I’d understood earlier, but I think over the next six to 12 months, I’m going to be very focused on trying to communicate around that space and that openness for more and more diverse young people to enter into a Silicon Valley framework of disruptive technological innovation in the climate space.

Bill Nussey:

That’s a phenomenal vision, my friend. Thank you. As we like to do, we want to wrap up this amazing conversation with the four quick lightning round questions. Donnel, are you ready?

Donnel Baird:

Yes. Hit me.

Bill Nussey:

All right. What excites you most about being in the clean energy business?

Donnel Baird:

Being able to look my seven-year-old and six-month-old kids in the eye and say, “Look, dada is doing everything he can to make sure you guys are going to have a livable planet.” I don’t know if that’s exciting, but it’s the most important reward from this work.

Bill Nussey:

If you could wave a magic wand and change a single thing today, what would that be?

Donnel Baird:

I would just shift all the buildings over to electric heating and cooling, and then I’d just retire and hang out with my wife and kids.

Bill Nussey:

What do you think the single most important change in how we generate, store and distribute electricity in the next five years say?

Donnel Baird:

Helping everyone understand that gas and cooking with gas in our homes and heating our homes and heating hot water for showering by burning fossil fuels in our home, that’s super unhealthy. Consumer Reports just came out with an article yesterday that there’s methane, there’s nitrogen dioxide, there’s carbon monoxide, all the stuff that I was afraid of breathing in from my oven as a kid, well, it turns out everybody’s breathing it in.

It’s going to be like lead paint where five years from now we’re going to look back, we’re going to say, “What the hell were we thinking burning dead dinosaurs in our kitchen and breathing it in? That’s crazy. Of course it’s bad for our health.” But now there’s studies out of Stanford and Cambridge that are outlining that, and we think that’s really important, and we want every American to know that story.

Bill Nussey:

Final question, and I think I know the answer, we get asked a lot, I’m sure you get asked all the time, I’m excited about this transition away from fossil fuels into a clean energy future. What can I do? Donnel, what do you tell people that are outside the industry and how do they make a difference? How can they join in?

Donnel Baird:

We want people to set a goal for helping to green five to 10 buildings in their community. We’ll provide you with all the software and all the money that you need and all the hardware that you need but we want people to not only think about their personal carbon footprint, but think of the carbon footprint of their community, whether it’s their parents’ homes, their niece and nephew’s schools, their synagogue, their church, their mosque.

Take responsibility for figuring out how to green five or 10 buildings. We’re going to give you all the software and money that you need to actually do it, but we need people to pick up the baton and take responsibility for that.

Bill Nussey:

Well, Donnel Baird, this has been an honor, and I am inspired. The work that you and your team are doing is changing the world, and I have a feeling that you’re just getting started. Thank you so much for your time today. I’m super flattered you’ve carved a few minutes to talk to the Freeing Energy community. Really appreciate it.

Donnel Baird:

We’re super excited to connect here. I was really pushed and encouraged by the clarity and precision of your questions. I hope that people find a sense of hope because we got climate legislation and now it’s on us to go out and really start to decarbonize at scale, so let’s do it. It’s great to connect.

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