#91 David Slutzky Founder and CEO, Fermata Energy
David Slutzky Founder and CEO, Fermata Energy Prof. Slutzky is a recognized thought leader in the field of vehicle-to-grid technology. Slutzky founded Fermata Energy with the specific intention of developing and commercializing vehicle-to-grid technology in order to make electric vehicles more cost effective and the electric power grid more stable, as well as to provide large-scale energy storage to make the transition to renewable energy happen more quickly.
He has earned the reputation of being a policy wonk and serial entrepreneur committed to preservation of sensitive ecological systems, protecting the long-term integrity of our biosphere, and working to solve the challenges of global warming. In addition to more than 30 years of experience as an entrepreneur, David served as a Senior Policy Advisor at the White House and EPA during the Clinton Administration. At the White House, he coordinated the International Task Force of the President’s Council on Sustainable Development, where he focused his efforts on the environmental and labor implications of international trade agreements such as the Multilateral Agreement on Investments.
Prior to Fermata Energy, David co-founded Skeo Solutions, an environmental policy consulting firm and worked as a Senior Policy Advisor at the White House and U.S. EPA. He is also on the faculty of the University of Virginia as a Research Associate Professor in the Science, Technology and Society Program at the University of Virginia School of Engineering and Applied Science. Slutzky earned his BA and pursued graduate studies in Political Philosophy at the University of Chicago, and received his law degree from the Program on Energy and the Environment at Chicago-Kent College of Law.
David is also known for founding ERC, where he developed the process tool commonly known as the Phase 1 Environmental Site Assessment, and for co-founding ERIIS, the nation’s first environmental data.
An Interview With David Slutzky, Founder and CEO of Fermata Energy
Host Raj Daniels 02:49
Absolutely. So David, I like to open my show by asking my guests the following question. If you were asked to share something interesting about yourself, what would it be?
David Slutzky 02:58
That’s an always an interesting question. Well, I guess I have an odd background is probably fair game. I’ve been teaching for the last 20 years at the University of Virginia. I’ve taught in the commerce school, the architecture school for 11 years, and now the engineering school for nine years. But I’m actually the only trained philosopher on any of those faculties, I believe. So my background as a philosopher, I think has been very germane to my professional career. But it is something people don’t usually expect, particularly since I’m in a high tech industry. And and I do now teach in the engineering school.
Host Raj Daniels 03:36
Well, I’m a liberal arts guy myself, so I’m a big fan of that specific area. But how does that translate into those three particular schools?
David Slutzky 03:45
Well, in the first two, I basically taught some war stories from earlier stages in my career, each of which illuminated relevant topics to business students, and then again to urban planning students. My role in the engineering school is very different. UVA, somewhat uniquely has embedded in the engineering curriculum, a requirement that students take non traditional courses specifically designed to help them understand the relevance of public policy and economics on their professional careers as engineers. And given my background, I’m well suited to kind of embed those themes into an engineering curriculum.
Host Raj Daniels 04:29
You know, that sounds really forward looking at UVA. I’m familiar with some of the programs here locally. And I don’t know if any program that really does that intentionally. Can you perhaps shed some light on to why UVA decided to do that?
David Slutzky 04:43
I wasn’t here at the time, they developed this particular component of the curriculum, but back in the 70s, and even more so in the 80s. engineering schools recognize that their students were going out into the world knowing a great deal about the technical dimensions of engineering but They didn’t necessarily do well as practitioners. And there was a conclusion reached across the country in engineering schools that they needed to spread the subject band around a little bit. So they let students typically start taking a few electives in the humanities or in more liberal arts disciplines, you’ve even took out a little bit more seriously and decided to bring this alternative faculty inside the engineering school.
And so they brought entrepreneurs and public policy practitioners, both of which describe me into the faculty to teach the relevance of entrepreneurship, the relevance of economic reality to developing engineering and technology. And they also wanted to have people who understood the relevance of public policy to help engineers understand that they’re subject to regulations, and they need to understand that regulatory ecosystem, particularly if they’re going to be entrepreneurs, developing new technologies, they need to understand what they’re up against.
Host Raj Daniels 06:04
So it reminds me, I’ve been in the technology industry for about 10, 12 years now, I had my own software company for a while. And right reminds me if I think Steve Blank says, you know, get out of the building and get amongst your users, kind of, you know, it kind of reminds me of that a little bit.
David Slutzky 06:20
I think that’s a fair assessment. And I think it’s served UVA. Well, they’re solid in the disciplines of engineering. But I think they generally are respected as somewhat unique and certainly excellent in teaching this other dimension to engineering, and I think their engineers are very effective entrepreneurs as a result of it.
Host Raj Daniels 06:40
But I appreciate you sharing that background. Switching gears a little bit, can you give me an overview of Fermata energy?
David Slutzky 06:48
Sure. I started the company about 10 years ago. And being the philosopher that I am, I started with two specific intentions in mind. I would number one, it’s a modest goal, I wanted to disrupt the auto industry by accelerating the transition to electric vehicles. And I also wanted to tackle the electric power industry by enabling a more rapid transition to renewable energy for grid power generation. And what’s interesting about those two intentions, is that they intersect at a technology that’s come to be known as vehicle to grid, or I like to call it V to X, because it’s not just the grid that engages with it. So Fermate Energy is a vehicle to grid surfaces provider.
And you might ask, how does that affect the number of ease out on the roads or the number of wind turbines that are being built. And I think the biggest obstacle to scaling adoption of ETS has historically been that there’s a perceived range problem. I don’t think that’s true anymore. I think most owners of electric vehicles are very comfortable with the amount of range the vehicles have, there’s plenty of fast-charging infrastructure for when it’s needed. I’ve been driving purity V’s myself, since before the Tesla Roadster existed, and I have never charged anywhere but at home. So I think most Eevee owners start to figure that out quickly, that the reason that the ATVs are somewhat slow in emerging on the scene is that you pay a premium a little bit to have an electric vehicle.
But what people do when they buy an electric vehicle or any vehicle is they think they buy it to drive but in fact, they buy it to park because that’s what people do with their vehicles on average 95% of the time. So if an electric vehicle could earn money while it was parked, now that starts to disrupt the total cost of the ownership value proposition of an Eevee such that they theoretically should fly off the shelves. And I think you’ll see that happening in dramatic fashion in the very near future. On the grid side. The biggest obstacle to scaling renewables is not the cost of generation of wind and solar, they make electrons more cheaply than nuclear power, or coal. The challenge to scaling renewables is they’re intermittent in their generation.
So you need to have massive energy storage designed into the grid. And we didn’t design our grid that way because it wasn’t needed if with the traditional generation. So places like California are really pushing through through mandates through subsidies through everything they can throw at the problem trying to expand the storage capacity in the grid. But what’s interesting is that there’s way more than is needed in vehicles if they were electric, and illustrative example if you took just the last six years of Nissan leafs sold in the United States. It’s not a widely selling car. It’s a popular Evie but they may be Sell 15,000 units a year, as compared to the reverse or the open one of their other big selling cars might be 200,000 units a year. And if you just take the last six years of Nissan leafs, and some of those older ones, they’re 24 kilowatt hour battery packs, compared to the current models, which are 62.
But that blend of vehicles, not very many of them out there. Those vehicles are equal in energy storage capacity to two times the entire stationary energy storage industry in the United States. And that’s just a small amount of electric vehicles. As we scale deployment of electric vehicles, I think you’re going to see that is the energy storage solution. And what else is interesting about it is that most of that stationary storage industry is built around batteries that had to be purchased for this single purpose of providing storage to the grid. But electric vehicles are paid for by the electric, by the driving duty cycle, the logistics duty cycle.
So the batteries are kind of free in an electric vehicle. So they’re very cost-effective solution to the energy storage problem that has been holding back the scaling of renewable. So that’s what the gist of what Fermata energy does is it provides vehicle to grid services to the marketplace. Now, you might say, Well, what exactly is that because it’s not widely known and widely used. In order to do vehicle to grid, you need three things you need first, a bi-directionally enabled vehicle. And at the moment in the US, it’s basically the Nissan LEAF, also the Mitsubishi Outlander. But that’s a hybrid. So it’s a smaller battery and not as relevant. There are multiple other car companies that are bringing bidirectional enabled vehicles to the US market in the next couple of years. So they’re going to be everywhere. But for now, there’s the leaf and you know, there are 1000s of them out there. The second thing you need is a bidirectional charger. And for various reasons that charger needs to be off-board the vehicle for now. And it should be DC power. And there are lots of single directional DC chargers that are out there. But until March of this year in the US there was no UL certified bidirectional chargers available. Fermata needed a charger number of years ago, there really weren’t any on the market that we could scale our business with. So we did our research and found a small tech startup that was a spinoff from Virginia Tech called power hub. And we engage with them to develop a charger for us. And then a few months later, we just acquired that company. And they have created the first Ul 9741 certified charger in the world last March. And they’re working on some additional charger options. But we’re also working with several other charger companies around the world who have similar technology are now suddenly interested in bi-directional technology. And we’re working with them to bring those chargers to the US market. So they’re going to be plenty of cars. But there’s enough now, there will be plenty of chargers that are bi-directional, but there’s at least one right now. And then you need software to be able to have the car talk to the charger and have that system talk to different what I like to call grid facing revenue opportunities. So you can use your bidirectional vehicle and charger while it’s parked, for example, to manage your office buildings, electric load and do book do what’s called behind the meter demand charge management. And what that is, is it’s a way to reduce the commercial electric bill by back-feeding energy into the building during times of peak load so that that load doesn’t have to all come from the utility and therefore you can save money on your electric bill. There are utility wide load peak programs in many parts of the country that you can also participate in. There are grid-level commercial opportunities. They’re called wholesale ancillary services. A popular one for the Eevee market is something called frequency regulation. And it’s just a market mechanism that manages the entire grid to keep it at 60 hertz in the US or 50 in parts of Japan and Europe. All of those activities that you can do with a bi-directional vehicle and a bi-directional charger can potentially earn money. In addition to earning money by participating in a market activity like I just described, just the fact that the vehicle can discharge itself into a building gives bi-directional or vehicle to grid technology. A value stream known as resilience A lot of people pay for backup power. And in fact, when Fukushima happened in Japan back around 2012, the folks at TEPCO the largest utility in Japan, and Nissan, got together and developed a vehicle to Home program hoping that customers would be able to deploy their Nissan Leafs as a backup power source. during times of power outages. That same idea is applicable in the US market for sure. Particularly with some of the events that are going on in the pg&e service district in California these days. Plus, with you know, climate change, we’re having more severe hurricane events and therefore more frequent and long-duration power outages. So having resiliency as a value stream from the technology is also important. You can do that with bi-directional vehicle and a bi-directional charger. So in a nutshell, not that I ever do much in a nutshell, Raj, but what Fermata does is it provides vehicle to grid services to customers. And just this year, we started to be commercial and starting to scale up our business.
Host Raj Daniels
Finally, I appreciate you sharing that I’m not going to skip over the fact that you said these were modest goals. So I’ve got that in mind. Fermata, it’s a very unique name. Where does it come from?
Well, my youngest child, my son, Isaac is a classical and jazz-trained musician. And a Fermata is actually a music notation. It’s kind of a half circle, like an eyelid with a single dot under it. And when you’re reading sheet music and you run across a Fermata it means there’s a pause for an undetermined duration subject to the discretion of the artist. So he said Fremont is a perfect name, dad, because it sounds kind of cool, like Ferrari. But he said it also is what you’re doing. You’re taking a pause and kind of rethinking a couple of major industries. And he said I think it’s an app name. And I agreed, and it’s been that’s been our name since I formed the company 10 years ago.
Host Raj Daniels 17:24
Earlier in the conversation, you mentioned the three challenges. You mentioned the bidirectional vehicle. You mentioned the bidirectional charger. And then you mentioned the software piece. Can you tell me specifically, you know, the three challenges here? Which ones are if not all, it Fermata? addressing?
David Slutzky 17:43
It’s a great question. So you need all three of those, as you call some people to call it legs of the stool to do vehicle to grid, we’re not going to make a car. And so what we did is look for a strategic partner who was interested in vehicle to grid.
Turns out Nissan was the natural partner. And they made an announcement about a year and a half ago that they’re partnering with Fermata to develop vehicle to grid in the US. They announced at the LA Auto Show that they were going to do a demonstration of our technology at their us headquarters outside of Nashville. So we’ve kind of got the car taken care of and they are the only bi-directionally enabled fully electric vehicle in the US today.
But ultimately, we’ll work with every OEM as they bring bidirectionally enabled vehicles to the market. We’re agnostic as to vehicle partner, although for right now, Nissan’s the perfect partner because they’re the only one. And they’ve actually frankly been very good to work with they believe in the technology. On the charger side, we acquired a charger company to make a charger for us because no one else would. But we’re now in negotiations with some and have contracts with other charger companies who will be bringing bi-directional chargers to the US.
And so in a similar manner to the vehicle. We are charger agnostic, we don’t plan to be in the charger business. But we do have some chargers now because we needed them and no one else would make them. But as they become more and more available, will work with any bidirectionally enabled charger that will work. And where we’ve really probably focused more of our attention is on the software development to enable the interoperability between the vehicle charger and the different grid facing monetization pathways for this technology.
But as a company, in addition to on the long haul. us being a software company if you will or a software-centric company. We’re experts on what you can do with this. We know what monetization pathways are available today which ones will be available in the future. After some regulatory intervention. We are working on the regulatory program to make sure that you know the market catches up with the technology.
So I guess the answer to your question is Fermata. Has relationships to provide the vehicle and the charger. We have our own proprietary software and we’re the operators were the integrators, whereas I think I may have said earlier, where the Android a vehicle to grid technology that’s, I think, where we sit,
Host Raj Daniels 20:09
David, I appreciate the clarification on the three legs of a stool, you said rethinking the industry or, you know, he mentioned rethinking, you started by saying v2 X, can you give some other examples of what x might be?
David Slutzky 20:22
Well, so there’s, I like to think of the technology as unlocking a series of value streams inherent in a bidirectionally enabled electric vehicle, that different customers could be the building owner because as I mentioned, it can provide backup power for them or resilience. But you also can do that service that I described a little bit before there’s behind the meter demand charge management activity that’s applicable right now, mostly commercial sites.
But you can make a lot of money, dispatching your energy into the building at critical times. And that’s where the software comes in. Because it needs to understand the different market applications of an available vehicle with dispatchable power and optimize the revenue-generating capacity of that activity.
So your customer could be yourself because of resilience, it could be your building owner because you’re shaving something off of their electric bill, it could be the utility directly, where the utility is trying to solve one of their many pain points, their pain points can include, they certainly often include load challenges, but it can also include volt, and bar management and congestion management and a number of other services that this technology is capable of providing. In addition to the building, and the utility, there’s the grid itself, which is kind of a layer that sits above the utility.
And the grid operators are some kind of a, an organization comprised of membership from the different utilities, the largest grid operator in the US is called the PJM. And it’s in the Mid Atlantic region, it runs from Chicago to New Jersey, and down to actually a little bit of North Carolina, and formatting as a full member of the PJM or curtailment services provider in the PJM. And we’ve been able to successfully take multiple vehicles in different locations in a city and aggregate those and participate in those aggregated vehicles into a wholesale ancillary services market at the grid level. In this case, it was frequency regulation. So when I say V to x, you know, people talk about v to G, and that is the G stands for the grid.
And one could technically argue that the grid includes everything from your outlet and the wall back up to the grid operators themselves. But it’s a little confusing, and I don’t think the language of this industry is settled. But vehicle to the grid is I think of it is really participating at grid level, market applications vehicle to the utility is another option. And then vehicle to building or VDB is another option. And then there’s a fee to home or to age, so we just call it all v to x. And that’s really what we do is all of that.
Host Raj Daniels 23:16
So let’s stick with the vehicle for a minute here. You know, he spoke about the Nissan LEAF, which I’m familiar with. We’re talking about passenger cars. I’ve heard some conversations about school buses and public transportation too. Are you doing any work in that area?
David Slutzky 23:31
We are. There’s actually a discussion about using everything from golf carts and forklifts to passenger vehicles, transit buses, school buses, and over the road, big haul trucks and all of them will, I believe, and I hope over time electrify in terms of their technologies. Some sound better than they really are. Let’s take the electric school bus. everybody’s excited to see their kids not having to breathe the product of diesel fuel.
But and it’s true that school buses have a duty cycle that does align nicely with some of the load challenges that the utilities are experiencing. So school buses are not very often driven in the summer and in the summer in the US is when it’s hot. And that’s when utilities typically suffer. They’re their biggest load challenges.
There’s also time of day issues and school buses are typically done and back at the school early enough to be able to help shed some of the late afternoon or early evening load. That said, one of the challenges of the school bus application, let’s take a typical school bus. A diesel bus might sell for let’s say $150,000 and an electric version of the same bus is at least another 200,000. So that delta is pretty steep.
The battery pack you’ll get with that sort of thing. The case is about 120-kilowatt hour battery pack. Well, two Nissan Leafs are 124 kilowatt-hours. So, and they are not a $200,000 problem. So I think that the school bus application, it looks good on the surface, and it has mirrored no doubt, you can pull a school bus up to a critical location and dispatch power, and that has real value. But I gotta tell you, I think his passenger vehicles become ubiquitous and they are bidirectionally enabled, I think you’re gonna find that that’s the where the real impact, the real scaling of this technology and becoming relevant is going to occur, transit buses have a different problem, they’re supposed to be used as much of the time as possible. And that runs contrary to having them available to be stationary to dispatch power into a different market application.
Similarly, over the road, big haul trucks, you know, while they’re out, delivering their product, or traveling from town to town to do that, and you’re not in a situation where they’re going to be able to provide much value, while they’re sitting around Park is when they can provide most of the service values. And they’re not supposed to be parked. passenger cars, by contrast, are almost always parked, you get up in the morning, and you take your fully charged leaf or whatever vehicle you’ve got, and you drive it to work, maybe you burn through three, four or five-kilowatt hours of your battery storage. And then you park it at work for hopefully not more than eight hours, but typically more than eight hours pre COVID. And you’re then you driving home, or maybe you stop and get a gallon of milk on your way home. And so you’ve burned five kilowatt-hours.
The point is cars are almost all the time part. And when you’re driving them, they’re not usually discharged that much. So their passenger vehicles are really the optimal participant in these different market applications, the challenge is going to be to get scale. And for that to happen, we’re going to need to see some early deployments where money has been made. And so what Fermata energy is doing is our first deployments are with commercial customers, deploying at commercial sites that have very high demand charges. And they’re typically fleet vehicles. Many of them are municipal fleets. Some of them are commercial fleets. But they’re vehicles that are driven around intermittently during the day but parked a lot of the time. And there are generally a couple of vehicles back at the base that is there almost all of the time. And so there is going to be dispatchable capacity throughout the day for us to leverage.
So I think once you get a couple of good case studies out there that talk about how much money you can make with this technology, I think you’ll start to see it really take off. And we’re waiting for a case study to be issued in the next month or so that actually describes one of our first commercial projects, where we, in effect demonstrated that with a Nissan LEAF, we can make $10,000 a year. That’s a pretty remarkable statement. But it’s true. And in fact, in some cases, we can make 1213 $14,000 a year with a Nissan LEAF. You’re talking about a free car and a free charger after a few years. That’s very disruptive technology. And that case studies of one particular use case one particular market application. There are as I mentioned multiple market applications, each with different value streams.
And these, many of them can be stacked upon each other. And with a good software system and a good operator who’s really studied the market applications Well, they can optimize the revenue that the vehicle can enter. So I do believe that scaling will happen. And I think it will happen with passenger vehicles. And there will be more than enough dispatchable capacity from a rapidly expanding electric vehicle fleet to not only help stabilize the power grid as it exists today but very importantly, to also stabilize the impact of all these new electric assets charging off of the grid. You know, people have to keep in mind, it’s great to have everybody switched to electric. But now we’ve got to look at what does that do to the infrastructure, it’s probably going to be the biggest expansion of kilowatt-hour activity in the last 50 years or more of the power grid. And if everybody was on their own, and they came home at five o’clock and plugged in at the same time as everybody else, you’ll get these bizarre spikes in the system load and the utility operators are going to have big challenges.
But alternatively, if all these vehicles were bidirectional, and the charging and the revenue generating were managed by an operator like from an energy, now we can protect the grid, we can protect the batteries and we can generate the optimum amount of income for the participants. And and it’ll also So offset the potential risks associated with scaling, deployment of electric vehicles. So I think it’s a fascinating technology.
And I do think it’s going to take off, but to sort of in a very long winded way answer your question, I think you’re going to see its true scaling happening with the passenger vehicles. And those chargers are not going to be the fast chargers by the side of the highway, or distributed around town. Those are for intercity travel or opportunistic charging, when needed, the vast amount of charging that will take place will be at home, or at work, or to public parking space. And as those chargers end up being lower power bi directional chargers, it’s a pretty good, pretty cost effective infrastructure build out, and it will satisfy this, this market. You know, you
Host Raj Daniels 30:51
You mentioned three things, revenue, duty cycle, and fleet. And early on, you gave a statistic regarding the number of Nissan Leafs out there, lift, the company recently made an announcement that by 2030, they want their entire fleet to be all-electric. And as you were speaking, my mind was kind of walking through the scenario of you know, if that does come to fruition, that’s a phenomenal opportunity for you know, a company like yours like Fermata Energy to get involved in essentially sounds like solve a huge grid problem.
It is a huge potential grid problem. And there are already existing challenges that the grid is experiencing. And this vehicle to grid technology, in my opinion definitely is critical to solving those challenges. But you bring up an interesting point Raj, the lift model, where a vehicle is used by an individual who uses their own vehicle or someone who owns a vehicle and they lease it to a driver to go round and pick up passengers. There are plenty of vehicles being used to pick up passengers from Lyft, and passengers from Uber. And some of them are also in a network where they can do a parcel delivery or last-mile parcel delivery service for another customer. And I think what you’ll see is that with vehicle to grid technologies coming online, we now add a new participant in that ecosystem. And that is the grid as a customer or a series of customers. And I think what gets interesting there is that with all these different use cases, if you think of a vehicle now, instead of a single purpose entity, that is, I think the purposes is parking because that’s what people do with it, but they think they buy the car to drive it. But in fact, now you can think of a vehicle as a reservoir of uses. And there will be multiple customers that will have a high-value interest in utilizing the vehicle for discrete tasks at a particular time. And vehicle to grid operators like Fermata will manage those commercial opportunities and dispatch the available capacity to the different customers that needed at different times. And I think you will find emerging very quickly a new vehicle ownership model in this country. Good example is my aforementioned musician. He moved from New York to Nashville. He and his wife had no cars because they lived in Manhattan. And they moved to Nashville. He said to me, Dad, do you think we should get one car or two? And I said, Well, what if your apartment complex had a small fleet of Leafs just sitting there that as a building amenity that you could take out when you needed it to run to the grocery store, whatever your other use of a vehicle was? Would you get one or two vehicles he said, Well, we’d only get one and I pay more rent halfback, which I thought was really interesting. And I probed further and he said, and he’s in his early 30s. He said, My generation dad doesn’t care about cars, we find them to be a nuisance, their payment, their insurance, their upkeep, we just want to go from place to place. So we’re more of the Uber generation, if you will, my generation of course, I’m an old guy, our vehicles were kind of part of our brand identity in our, in our social circles. It determined who you were up to some extent. But I think that’s going away. And I think you’re going to find shared auto models becoming the wave of the future, I think you’re gonna see companies owning these assets. Interestingly enough, those assets have as their primary value stream, not the logistics duty cycle, but perhaps the different grid facing revenue-generating opportunities. So you might find that utilities end up owning vehicles and chargers, and then they rent out the use of them to different purposes. But all that will be a story yet to be told that my instincts tell me that’s the direction we’re heading to. Again, another long winded response to your observation about Lyft.
Host Raj Daniels
I appreciate that. So I’m gonna switch gears a little bit, going back again, to the modest goals, you know, the why behind what you do, why did you start Fermata? And what keeps you going?
David Slutzky 35:58
That’s a good question. I, I guess I would say it has my motivation derives a little bit uniquely. I was trained, I was at the University of Chicago for four wonderful years, a wonderful intellectual environment, studied philosophy, thought I was in heaven.
While I was there, it was a great experience. But I also developed a pretty deep commitment to some of the ideas that I developed there, didn’t finish my dissertation. I still plan on it when I retire someday. But the topic has a lot to do with, I asked the question, how did we allow ourselves to get into the biospheric crisis that we’re experiencing these days. And I argue that a lot of that has to do with the way in which we particularly in Western societies conceive of the self as an autonomous entity. And so we are willing to discount the adverse impact of human action. Because it’s now a cost being borne by others if we had a different idea of self, where we thought of ourselves as having a common identity with everyone, and a shared problem when there’s a problem, and therefore it would seek a common solution.
I think that’s a much better, much more sustainable approach to the identity of self. And so I spent most of my professional life pursuing opportunities to express that that underlying theme early on, in the business world, I developed a process tool for the real estate industry to help them identify and address hazardous waste problems. I developed this process tool called the phase one environmental site assessment. And I wrote Fannie Mae and Freddie Mac and a number of the major lenders’ first environmental policies.
My goal in doing that my intention was to enable the private sector to now take on this common, commonly owned problem of legacy hazardous waste, look for it, and clean it up by leveraging some powerful environmental laws that had recently then come into existence, that impose liability on the real estate industry, in particular, for hazardous waste. So that whole entrepreneurial experience earlier in my life was was an outgrowth of this, this underpinning of philosophy. Similarly, I served in government, I worked at the EPA. And then later at the White House during the Clinton administration as a senior policy advisor. The work I did there was related, I worked on something called the multilateral agreement on investments, it was a free trade agreement that I worked to squash because it had very disruptive negative impacts on developing countries with respect to their ability to put in place labor and environmental protection.
So again, this underlying theme of being committed to, to try to protect the environment and protect people drove my political career, if you will. And then later, I developed an environmental consulting firm, which is still around 20 years ago. And that supports the US EPA largely helping the EPA administer its Superfund law in a way that doesn’t just end up with cleaning up hazardous waste sites but allowing them to be cleaned up and reuse. So again, there was a central theme to that activity in that company, which has to do with protecting the long term integrity, the bias here, probably the most significant undertaking by far is from on and you know, it’s cocky to say, Oh, I’m taking on the two largest industries in the world and we’re going to disrupt them which, you know, I’m not going to do it by myself. There’s a whole ecosystem of participants in this potential market that will emerge from audits is going to be one of them. There are several other players out there right now doing it in their own way.
But I’m certain it will be a huge opportunity and the disruption will occur. And my role in it is to try and move the ball down the court is to try and advance understanding of what could be done here, how this technology can be utilized to enable the transition to renewables on the grid to enable an accelerated transition to electromotive Technologies. And if I can, you know, contribute even a little bit to that dynamic, I will feel that I’ve gotten left something of a legacy behind, that makes me feel that my time on Earth was well spent and deserve. So to answer your question directly, I’m driven by a need to establish purpose, I need to have been relevant. If that’s important to me, maybe that’s narcissistic. But that’s, that’s how I feel. And the manifestation of that, in my case, is a deep commitment to the long term protection of the biosphere, to recognize things that are disruptive and problematic.
And then to seek solutions that will try to mitigate that harm in a way that’s, you know, productive long after I’m gone. So that is, by far the primary objective or motivation rather, for doing Fermata. And I’m an old guy, I’m turning 65. In a week or so. You know, there’s a reason entrepreneurs are usually in their 20s and 30s. There are two reasons. One, they have boundless energy, which old guys like me don’t have, and they have no idea all the things that can go wrong. Sadly, I’ve had most of them go wrong through my different entrepreneurial endeavors. So for me, it’s an awful lot of effort to do what I’m doing. But I keep at it. And I do work the long hours. And I put the effort into it because I’m motivated by the purpose. And I’m hopeful that I will contribute in a positive way to an outcome that I’m looking for.
Host Raj Daniels 41:41
So it sounds like to me during on your background at Chicago, and studying philosophy, you mentioned a connectedness amongst all of us. And I’m going to venture out to play on some words here. It sounds like you’re working on not v to x, but we to x.
David Slutzky 41:58
I love that. May I use that?
Host Raj Daniels 42:01
Absolutely. Because that’s what it sounds like to me some way. You mentioned manifestation. It sounds like you’re trying to manifest a way to x opportunity here.
David Slutzky 42:09
That’s absolutely right. Yes, the vehicle, the vehicle, the V is the conduit through which we express that intention. But you’re absolutely right.
Host Raj Daniels 42:18
Beautiful, beautiful. So David, what are some of the valuable lessons that you’ve learned on all these different journeys? I know, I can’t expect you to sum them all up in you know, a few minutes here, but some that really stand out to you?
David Slutzky 42:48
I think the most stunning discovery from this particular leg of the journey for me, has been to realize how complex things can be, you know, different earlier career efforts were complicated in their own right. But in order to succeed in business, and to disrupt major industries, and to bring new technologies into life, to bring them from an abstract concept into an applied reality is unbelievably complex, not just difficult, there’s a lot of difficulties in life.
But the complexity, to have to, for example, understand the technology itself, when it’s a new technology, there are nuances to it, that abound. And then when you try to superimpose the technology on a market context, that’s as diverse as providing backup power in the form of resilience, all the way to participating in these obscure ancillary services markets in the power grid and everything in between. You have to understand the industries you have to understand the technology, you have to create market applications.
For example, most of the value streams that bidirectionally enabled vehicles will be able to provide don’t exist yet, not because the vehicles aren’t there, the storage is dispatchable. But there isn’t a market mechanism that’s been developed to receive those value streams and apply them where they’re needed. That’s the next step in the emergence of vehicle to x technologies. And that’s to, I got to get used to calling it we to x is to work on that.
But it’s really going to boil down to overtime, these big industries and these big complicated industries are going to be changed. And they’re going to be changed by a very complicated cutting edge set of technologies embedded in vehicle to grid as a phrase. And so just the sheer complexity of what you have to do to make an impact. I had no appreciation of that either. from earlier entrepreneurial endeavors, I did not fully grasp how difficult something as disruptive and potentially impactful as the vehicle to grid technology is.
I just didn’t have a clue how difficult out how complicated was going to be. But you know, I see it now. And I’m overwhelmed by it. And I embrace that. I gotta tell you, I’ve not been bored for a minute in the last 10 years. I think that’s my answer, though, I think the biggest surprise was the degree of complexity, and how much of a challenge it is to overcome that.
Host Raj Daniels 45:36
So moving on from overcoming previous challenges or complexities. What’s next? What does the future hold for Fermata Energy in 2025. What does formata energy look like to you there?
David Slutzky 45:49
Well, I think it’ll transition beyond my skill set very quickly. As an experienced entrepreneur, one of the lessons I learned along the way is that the personality type that is capable, that has the requisite skill set to be able to create, particularly in a new industry setting an idea and transform that idea into a commercial reality, it’s a certain kind of person, you know, that they have to be able to connect dots that other people maybe miss, they need to be confident enough to be able to take risks and make mistakes along an uncertain path to a clear destination point. And even that destination point, might need to pivot from time to time based on circumstances you encounter.
So, you know, is having that flow unfold is, is a challenge. But I see Fermata emerging from that with a different layer of leadership, as it’s now becoming commercial. You know, typically entrepreneurs don’t know when to get out of the way. They’re the, you know, they’re the chief cook and bottle washer from the start, that’s their ego, it’s there, you know, their, their intelligence, their relationships, there, whatever characteristics they brought to the fray, that dominate the business, but then like, business evolves to being bigger than them, and it has to go to paying a fee. Again, it has to be the aggregate of everybody in the company, and, and the ecosystem, the market in which that company exists.
That’s all part of what defines the successful trajectory of a business. And I know as an entrepreneur, when to get out of the way, I’ve done it with each of my earlier businesses. And so I think over the next couple of years, what we’ll see happen to Fermata is it will become a significant instrument of change. As I said, there are several companies out there aspiring to do similar things to formatting or going about it in different ways.
We’ll figure out among us who’s got it right, we’ll all pivot and adapt accordingly. But I think Fermata or, or any vehicle to grid services provider, five years out, will be kind of like the Android of this emergent technology, we’re going to be operating the various elements in the technology, we’re not going to, you know, design and make cars, and we’re not going to be you know, we’re going to use charges, we’re going to use cars, but we’re gonna and we’re not going to be the utilities, we’re just going to be the nexus between this available dispatchable electric power, and the customers that need that power for their different needs.
And so we’ll be the facilitators will be the aggregators, and we will be the operators. And I think that the scalability of this business is kind of unprecedented. There are very few emergent industries that have such huge upside potential. But I think for me, it is in just such a space, and it’ll be fascinating to watch it grow. But I’ll be watching it gently, as the years go by, partly just because I’m timing out with my age, but mostly because I’m going to step back at the right time because my skill set will be transcended by the organism, the corporate organism that I’d created. But I’ll still be around to kind of gently guided, you know, from that visionary perspective that the entrepreneur brings to the table.
Host Raj Daniels 49:19
Well, that leads nicely to my next question. My last question, speaking of evolving and change, if you could share some advice, or words of wisdom with the audience, what would it be?
David Slutzky 49:31
I don’t know about wisdom, but I’ll take it to give it my best shot Raj. I would say maybe it’s a little selfish, but I would advise people if you’re going to take on an entrepreneurial endeavor, for example, I think you want to make sure you surround yourself with very, very bright people. And they have to be people of high integrity. I think those are the two features that make success happen versus failure. If you have people with high integrity, and they’re really smart. They’ll figure out what to do and it will be the right thing.
And I think that good outcomes happen when you have a nice successful melding of intent with the process, but you don’t get that actualized outcome. Unless the participants are noble. They’re good people with good intentions, honorable intentions. And they’ve got to be really smart to deal with the complexities, particularly in these modern times where the world is expanding and its complexity with every passing day. So that would be my, you know, my nugget of counsel for what it’s worth is just if you’re going to be an entrepreneur, surround yourself with brilliant, like-minded people with high integrity and character.