#184 John Belizaire, CEO of Soluna Computing
John Belizaire is the CEO of Soluna Computing, the world’s first utility-scale company developing power plants and combining them with high-performance computing facilities. As a serial entrepreneur, John has successfully founded and scaled multiple industry-leading technology startups that have achieved market leadership and double-digit growth, including FirstBest, an insurance software company acquired by Guidewire, and The Theory Center, a software company acquired by BEA Systems. Before becoming an entrepreneur, John was the lead architect for Intel’s Digital Enterprise Group.
Soluna Computing builds modular, batchable computing centers for intensive applications like cryptocurrency mining, AI and machine learning. Soluna’s scalable data centers provide a cost-effective alternative to battery storage or transmission lines. Soluna Holdings, Inc. (Nasdaq: SLNH) is the leading developer of green data centers that convert excess renewable energy into global computing resources. Soluna Holdings was formed when Mechanical Technology, Inc. (MTI) acquired Soluna Computing in 2021.
Bigger Than Us #184
This transcript has been lightly edited.
Host Raj Daniels 00:45
John, how are you doing today?
John Belizaire 01:12
I’m doing great Raj. Happy to be here. So thankful that you’re giving me this opportunity to chat with you today.
Host Raj Daniels 01:19
Well, John, I’m very excited to have you here. Before we dig into Soluna Computing, I want to ask you about being an eternal optimist. How does one become an eternal optimist?
John Belizaire 01:31
I think — first of all, I would self described myself as an eternal optimist — I always look at the bright side, even in challenging times, times of pain. And one thing I’ve learned over the last 20 years or so is that the way to think about it is when things are really tough, that’s where your happiness is going to come from. Because that’s where the learning happens. That’s where you sort of realize what your bare metal is, if you will, where your ingenuity lies, you build new relationships in the process.
And so what you typically will find, in hindsight, is that really challenging experience was the thing that sort of drove you to the next level of growth, personally and professionally. And that’s the philosophy that I use, pretty much every day, being an operator. These days we are inundated with all sorts of challenging things. And those challenges are the very catalyzer, if you will, to our happiness because otherwise, it would be boring. I have this concept, easy is boring. It is. Most people want to see some challenges and get through them. And by getting through them, you get this huge surge of energy and joy that comes from it. And so as long as you can believe that you’re going to get through the pain, and you’re going to learn a lot, you can be an optimist all the time.
Host Raj Daniels 03:11
So two points regarding that. First of all, I’ve been writing a personal blog since 2016. And my blog post for this past Monday, which was the 10th, I believe, of January, was titled “Failures: learning from failures or success.” And essentially, the point of it was, and you said it perfectly, is that while you can learn from success, you learn so much more from failures.
John Belizaire 03:36
Absolutely. Yeah, I have a similar one. I wrote it about four years ago, Raj. It’s called “Pain is where the learning happens.” I also write a blog as well. That’s where I sort of keep all of my learnings as a CEO. And hopefully I can share it with other young entrepreneurs who can reduce the amount of learning that they have to do as they’re building their companies. And that’s one that I reread myself, just to remind myself very often. So thanks for sharing that.
Host Raj Daniels 04:05
Of course; I appreciate you sharing that. Another term I’ve heard you use in the past: I know you mentioned in an interview, you’re an eternal optimist. But the idea of beautiful chaos — can you expand on that?
John Belizaire 04:18
The reason I use that term is because I seem to be attracted to running very complex businesses. The business I’m running right now you need to understand energy markets, data center technology, project finance. In all of that complexity is an opportunity for innovation. I have found that — in my prior life I was in the insurance space and there was just a lot of new learning and complexity with that industry that we had to get our arms around.
And in all of that chaos, if you will, which is little snippets of challenging, things and learning items, if you really take a step back all those little tiny dots, if you will sort of form a perfect Cezanne painting that shows you the big picture. And the big picture is basically opportunities for innovation, white spaces, things that can drive all the value in the business that you’re creating. And once you begin to embrace that, you find true opportunities for differentiation in the market. A lot of times my team and I will sit and we’ll say, “Well, why is it so hard?” And I say, actually, the fact that it is hard is our opportunity. If we can crack the code, then we’re creating value. And that’s how you create value, actually. It’s solving hard problems in a consistent way over a long period of time.
Host Raj Daniels 05:54
Thank you for sharing that. And you mentioned data centers, renewable energy, project finance, I mentioned Soluna Computing, at the top of the show. Can you give an overview of Soluna Computing and your role at the organization?
John Belizaire 06:06
Sure, I am the CEO of Soluna Computing. And we are focused on increasing the penetration of renewable energy in the world by using computing as a catalyst. By now everyone knows that we’re all sort of, you know, I’d say checked in. We’re all sort of geared forward to try to do the best we can to fight the climate change challenge. ESG is a big focus; just about every public company now is talking about the importance of focusing on sustainability. And we’ve seen lots of new investment coming into the space — I think last year, there was over $750 billion spent on clean tech and clean energy and sustainability-focused initiatives. And so we’re all absolutely in sitting in the back of a Tesla car self driving itself into the future at high speeds. What most people don’t know is that with all of this momentum, there are challenges or new problems that exist within the renewable energy space. Most people don’t know that renewable energy power plants are companies, they’re project companies, they take in lots of capital to build the power plant. And the goal is to get all of the power from the power plant to the grid. But because the grid was designed for power plants that were dispatchable, the grid could control them, there was a beautiful synchronization between the use of power and the generation of power. Once you start to replace these legacy fuel-based power plants, and replace them with beautiful sustainable power plants, then the schedule for turning those power plants on is no longer controlled by the grid operator. It’s actually now controlled by mother nature. And as a result, sometimes you have more power than you need, sometimes you have less power than you need, or not enough power. And so the problem that results from that is up to a third of the power generated by these new, exciting, gleaming, beautiful wind turbines and solar plants and hydro plants all around the world, up to a third of their power never actually makes it to the grid, it’s completely spilled. And so what we do is we bring these scalable, purpose-built data centers that sit behind the meter, so right with that power plant, that absorbs that excess energy, and we convert it to a globally transportable form. And that’s clean, low-cost computing. We use that computing for compute intensive applications like cryptocurrencies, AI and machine learning. And these groups of applications, what we like to call batchable applications, things you can pause if the power is isn’t available to serve them. This is probably one of the fastest growing portions of computing in the world. And most of us take it for granted. But just about every application that you’re running or system or — we’re scrolling through our phones — are powered by applications that have these data-centric or computing-centric elements to them. So what we’re doing is we’re bringing those two worlds together. We’re bringing computing that is growing really fast, can be done anywhere in the world, is part of the fastest growing phase of the of the computing space. And we’re using it to solve a problem in the renewable energy space, which is a deterrent to renewable energy becoming the dominant form of power in the world.
Host Raj Daniels 09:49
So I’d like to double click on two terms you used. One is batchable, second is scalable. Can you give an example of batchable compute?
John Belizaire 09:58
Yes, so an example of batchable compute is today when you watch Netflix. You’re watching the movie, and it streams over whatever electronic device you’re using to watch the film. That’s called real-time computing. Because the movie can’t be jittery. It has to be smooth and you experience it as you interact with it.
When you go online and do a transaction, that’s a real-time application. And lots of companies are posting their financial systems that generate every month, that’s real-time. So it has to run and run to completion for it to do its task. There are other types of applications that are more batchable, or non-real-time. And those are ones that sort of wake up and start performing their processes. And then they go to sleep when they’re done. By way of example, the system that shows you the recommendation for Netflix, it’s saying, “Hey, Raj, you just watched,” I don’t know what you’re watching these days, Squid Game or something. And it says, “You just watched that, you might be interested in these other movies.” Well, to show you those movies, they processed all the movies you’ve ever watched.
And then they looked at all of the movies that people who have similar backgrounds as you or have watched similar to you have done, and then they give it to this modeling system, an AI system, that basically runs some analysis and says, “I think Raj might like these next four movies.” That system right there, it could run today, it could run tomorrow, but at some point it has to run so that the movies that it’s showing you are ever more relevant to you. That’s an example of a batch process. It doesn’t have to run in real time while you’re watching the movie, it could run in the background.
Netflix has entire systems, mostly running on Amazon, as I understand it, that are focused on running those models. And by the way, just about every streaming service has that. And I ride a Peloton every morning, that’s my morning ritual, if you will. I know that thing is collecting information about me. My heart rate, my speed, what trainers I like to engage with. And then the next time it’s going to show me similar classes to help me get a better experience. Those are batchable processes.
One that people don’t realize is the global Bitcoin network, which is approaching hundreds of millions of dollars in value these days and, and touching hundreds of millions of people around the world. That is secured by a process that’s similar to what I just described — highly, highly compute-intensive applications that are dealing with lots of information and calculations. If you’re one of those participants, you could be doing that work right now, take a pause, come back up tomorrow and do it and participate in a very large network that’s doing it. So that’s batchable, the fact that it can be put to sleep, moved. It’s a job that doesn’t have to run in a fixed real-time basis, if you will.
Host Raj Daniels 13:01
And why is it important that your system be scalable?
John Belizaire 13:05
Scalability is important because the amount of renewable energy that we’re absorbing that spilled is big. We estimate that about 225 terawatt-hours of this energy has spilled every year. That’s bigger than all of the solar installs in certain parts of the world. It’s probably equivalent to — I think the number I use is 80 million barrels of oil or something like that. I may have that wrong, but it’s a very big number. And if you look at it from a revenue perspective, about $7 billion of renewable energy revenue that powers the industry to get more power plants online, is burned or lost from this issue.
So when we go to a power plant, and they say, “Hey, John, we’re losing, you know, one to 2%, or 3%, or we’ve had some power plants that have seen three to 400% increase in the amount of energy that they have to spill,” also known as curtailment, “we need to be able to put a datacenter that’s big enough to absorb enough of the spilled power to bring them back in the green,” if you will, where the power plant is not suffering significantly financially to do that.
So what we do is we place these, as I said earlier, purpose-built data centers that are modular in nature. They each consume about 1.2 megawatts of energy per building. And then we combine those buildings, almost like Lego blocks, actually, using this sophisticated electricity design and thermal design where we move air very quickly. We have a a monitoring system and so forth. And through that platform, we’re able to combine these buildings. So 44 buildings get you around 50 megawatts, 88 buildings gets you about 100 megawatts. That’s the idea is that we can quickly build them out and scale them into large footprints, allowing us to absorb a lot of that green energy and turn it into powerful global computing.
Host Raj Daniels 15:17
I know computing generates a lot of heat, are you doing anything to capture the heat?
John Belizaire 15:20
Good question. We don’t recycle the heat generation at this point. We have this approach that we use that essentially concentrates it into sort of one centralized place in between the buildings and then pushes it up into the atmosphere, if you will. We do have some designs that we’re giving some thought to about how to recycle that heat, and also use it as part of the part of the whole design so it’s very self contained. We haven’t gotten that there yet. We take a very stepwise approach to our whole technological approach.
And over time, that’s something that we’ve looked at. We’ve actually seen other companies that do that: they recycle heat waste from buildings, and then flow it into into the data center itself to drive the energy of the building. So there are some things that we’ve considered, we won’t do it until we know we can do it at scale and it actually gives the facility an advantage in either absorbing more of the power or enhancing our computing, that sort of thing.
Host Raj Daniels 16:29
Understandable. Now, you mentioned, we talked about data center, renewable energy, the third leg of the stool is the project finance piece.
John Belizaire 16:36
Host Raj Daniels 16:36
This is a relatively new idea that you’re working on. What challenges have you faced in getting these projects financed?
John Belizaire 16:45
Very good question. So by way of background, Soluna Computing actually started out as a company called Soluna Technologies, which was actually an energy development company. About four years ago, our parent private equity firm that held the company asked me to come on board to run this new company that was the intersection of renewable energy and blockchain. When that sentence came out, it came out from person I knew for a very long time.
My background is in software. So I’m a software guy. I’ve built primarily software enterprise companies. And so this is a whole new learning experience for me; as I said, that that seems to be what attracts me these days. And so I was intrigued by this concept of bringing those two worlds together.
But obviously, I was skeptical. Number one, what do I know about renewable energy? And number two, blockchain is such a young realm that it was there was likely nothing really there for me, but I did dig in. And four years later, I’m still digging in, I haven’t found a reason not to do it. I think I’ve doubled down. And the problem I was asked to solve was we have this renewable energy project in the southern part of Morocco. If you go to the airport there, you only see two types of people there: you see renewable energy people, and then you see some of the best kite surfers in the world. And the reason is because the wind is so amazing there. In New York, you’re talking about eight meters per second; wind over there, it’s well over mid 20s, if you will, in that area.
So that’s a lot of wind, a lot of fast wind. Lots of energy production potential. And the country wanted to transition from being a primarily importer of energy and user of thermal energy to power the end of the company, or the country, rather. And they wanted to become more self-sufficient. In fact, they wanted to be an energy exporter and be green. And they have lots of resources: wind, solar, hydro. And in this area was primarily wind and solar.
We had a project, there was no grid. What do you do with a project that has nowhere to send its power? And the grid was making its way there and hadn’t arrived yet. And so the solution was, can you build a self-sustained, vertically integrated power plant and computing facility off-grid? We were focused on cryptocurrency and Bitcoin mining because you don’t need customers for that, right. We don’t have to make the case that there’s compute load in Morocco sufficient to power this.
And by the way, this power plant, we’re talking about 900 megawatts. The land area is twice the size of Manhattan. Wow. So you put that picture in your mind. That’s huge area, huge energy potential for the country. And so as we were designing this whole concept — and a lot of the ideas that we have for our current facilities came from designing it to live in that environment: a very dry coastal area, high winds — and we did that, we designed it. And the grid did make its way there.
And so we started to realize that as we prepare to develop a power for sale slash data center concept, the data center’s role shifted from the primary buyer of the power to a imbedded demand response solution. And we started thinking to ourselves, “Wow, we’ve just built a better battery, essentially, for wasted energy. How do we take this elsewhere?” And what we learned through the process of working on that project is that it is incredibly hard to build renewable energy projects, especially outside the US.
Project finance is at the heart of making that work. Financing a project that didn’t have your sort of triple A credit offtaker, and primarily a government buying the power, it was a commercial enterprise. What the renewable energy industry might call merchant is very hard to bring capital in for a project like that, especially when it’s vertically integrated, because you have to take risk on both sides. And so what we thought to ourselves — and this happened right in the middle of 2020, the world is shut down, we can’t travel to Morocco. And we have to find a way to make our business viable and grow over time, and take all the learnings that we found in Morocco to to other markets.
We thought to ourselves, “Well, do we always have to build the power plant? What if we only built the computing part?” Was there a problem to be solved elsewhere by doing that? We took the six months that we couldn’t go anywhere to basically take the team offline and work on this exercise as research exercise. And we spoke to grid operators, powerplant owners, fund managers, GE, who we were working very closely with on the Morocco project.
And the result of that research was that this is a huge problem. It’s probably one of the biggest unspoken problems in the renewable energy space. And your solution, guys, that you’ve come up with, is fantastic. I did bringing flexible load to generation. Who would have thought of that? And so, you know, bringing it full circle, Raj, to the earlier part of the discussion here, which is, “How do you stay an eternal optimist?” We were in a tough situation there in 2020. And that pain led us to rethink our business. And it was the breakthrough pivot that created Soluna Computing.
We’ve now built one of the largest pipeline in this construct in the space. And we were combined with a public entity toward the end of last year, giving us access to multiple sources of capital and preserving the project finance structure. And so it’s allowed us to build a whole new company that has, tremendous growth potential by taking a novel solution to our own problem to the rest of the space.
Host Raj Daniels 23:03
So you’ve brought your learnings onshore? Where are you building some projects right now in the US?
John Belizaire 23:08
Well, in the US, we have existing projects in the Pacific Northwest. We started out with a pilot project there. We have approaching 50 megawatts in the southeast, we have one of our greenfield facilities built there. And we’re building a second of a series in Texas, western part of the state, where we are going after some of these big wind and solar projects that are down there, experiencing lots of curtailment due to how much capital and infrastructure buildout that has happened in that market. We have projects in our pipeline that are outside the US, in Europe as well, that are maturing, and we’re building some interesting relationships with developers and infrastructure funds there.
When I’m fascinated by, Raj, is in the last year, we’ve had a significant increase in the amount of very large, I’m talking billion dollars, multiple billion dollars of assets under management and huge portfolios of renewable energy assets, big IPPs reaching out to us and seeing the light, if you will, on how these two, maybe three realms come together. Renewable energy, the data center space, a new take on data centers, if you will, because our facilities aren’t these big, monolithic, hyper-cool, super redundant facilities with big diesel engines in the back there. They’re lighter weight, they’re tuned for the application. And then the third piece is the fact that global computing is just becoming more and more global.
It’s becoming more and more data-oriented and the cryptocurrency space is becoming more mature and a larger part of the global economy. That convergence is a very exciting place to be as a company.
Host Raj Daniels 25:08
You mentioned the size of your data centers. From the videos I saw, specifically the one in Kentucky, Project Sophie, I believe.
John Belizaire 25:15
Yes, we name them after women scientists.
Host Raj Daniels 25:18
That’s wonderful. It looks like the size of a 40-foot container, almost.
John Belizaire 25:23
Yes. So ours are bigger. Originally in our Morocco design, they were containers. And we were basing all of our architecture around that concept because we didn’t want to have to be doing a lot of construction and so forth. Because it was so far away, we just wanted to be able to prefab them and send them over there.
But we found that containers have other flaws: they’re not as flexible. When you build something in a container, you start running into these constraints on electrical design that make it more tuned to a specific type of equipment. Our business is built around this concept of phase one, phase two. Phase one is focused on building out these facilities that that are driven around cryptocurrency mining, a business that is very big, has a direct relationship to power consumption.
And you don’t have to have business development, people running around selling to customers, like Netflix or something. Phase two, is where we convert those buildings, the computing inside of them, to more general purpose machines for different types of applications. And so we had to design our facilities such that they could make that flip, really in a flip of a switch, from phase one to phase two.
So we wouldn’t have to start from zero again. And so we build these many buildings. They’re physical buildings; we prefabricate them. So we cut down on the construction costs. And then we have this flexible electrical design and flexible interior space and all of that to help us prepare for where our business ultimately is going, which is a global, diversified set of computing that we’re doing in those facilities. So they look like containers, but they’re not.
Host Raj Daniels 27:08
So the phase two part is essentially the modular and the prefab and scalable part of it. You mentioned the phase two part about being the computing piece that’s non-crypto.
John Belizaire 27:20
Host Raj Daniels 27:20
You don’t have to sell, obviously, for the crypto and the global computing piece of it. But I’m assuming there’s some selling going on for the other part of the compute.
John Belizaire 27:27
Host Raj Daniels 27:28
What does that look like?
John Belizaire 27:29
It’s going to look like my prior life, I think. It’s going to be enterprise sale. We’re going to be going to big pharmaceutical companies, universities, movie houses, startups that have lots of growth potential, lots of capital. And a big portion of the capital they’re deploying is to computing, right, because most startups are AI-focused. And that selling requires us to bring on another muscle: the expertise that is around bringing cloud computing to companies that don’t see the actual computing infrastructure as their core competency, it’s more about the applications that run in them.
And so our strategy is to start to build a series of facilities, or parts of our facilities, converting them to that focused area, and then do what you you do classically, in every enterprise development. Build a small initial pilot set of customers, make sure the requirements and understand those very carefully, and then replicate that, scale it, harden it, and improve it over time. One of the things we’re doing is, we’re not reinventing the cloud space, everyone knows how to do that. And so the way we will give you access to our sites is through a interface that you’re used to.
We’ll probably use Kubernetes, or something like that, to give you the experience that you’re used to when engaging with a cloud platform. And we’ll have a series of proprietary tools to make it very easy for you to deploy your data and application-focused activity. But because we are purposefully building these applications for these batch processes — as I talked about, that batchable application — we will tune it for that purpose. What we envision is you come to our job scheduling site, you schedule a job, or you have this longer-term relationship with us where you can schedule jobs. You place your processes, you pre-forward the data to location, and then our system — surprise, surprise — will use some computing smarts to place your job in the right facility across our entire fleet on a global basis, such that it finishes on time in the price target that you expect. And we’ll make certain promises around what that experience should be, and that will be our driver.
And just like any other enterprise-focus solution, we’ll start out small, we may have limited features, and then over time become very, very robust. And because we’re purpose-built around these types of applications, we’re really talking about a small footprint of an enterprise. So we’re not going in and saying, “We want to move you from Amazon wholesale to Soluna,” we’re gonna say, “Hi, we’re Soluna. If you have an ESG focus on your environment, and sustainability is important to you, we’d like to offer you a platform.” We want to take one to 2% of your compute load, that compute load that is not real-time. And we’d like you to put it on the Soluna global cloud, if you will, a green cloud. And we actually like to call it Z-cloud. We haven’t put that brand out yet. But that’s how we talk about it inside, zero-carbon cloud, Raj.
And, first of all, you say, “Who the hell is Soluna?” Right? You’ll say, “Oh, us? We’re just this green data center company that has built like hundreds of megawatts and you know, gigawatts of this stuff all around the world. And here’s how it works and how it’s good for the planet. And it’s the same experience you’re going to have, but now you’re able to, you know, deploy your applications and feel good about it.” That’s how I envision the sale going, Raj. I’ll probably get a lot of doors slammed in my face, but I’m used to it.
Host Raj Daniels 31:19
So my mind’s racing in several different directions. In previous lives. I was in the healthcare sector, and we had a partnership with Azure because in 2013, I think that was the only HIPAA-compliant cloud. Yeah, we were going to hospitals about going off into the cloud with Azure. Post that life, I actually had my own startup, and working with many co-working centers here locally in the Dallas area, there was a time where AWS reps would come in, and they would work with the co-working spaces. And they would offer $5,000 credit worth of cloud time. And so my startup was actually on AWS from 2014 to 2017.
The third part of what you mentioned, specifically around the green compute. So I came across a company a couple of years ago, that’s doing research in cancer, I believe cancer research and mentioned the batchable computing. Essentially, research like that needs batchable computing, it doesn’t need high priority, real-time computing. Exactly. And so just from a go-to-market strategy, I was thinking about all the — UT Southwestern, here’s a big research hospital. And what would that conversation look like, to offer your zero cloud to, like you said, a small subsect of UT Southwestern? So that’s all the different directions in my mind as you were speaking.
John Belizaire 32:34
Fantastic, I love it, we’ll have to kick some ideas around on go-to-market when we get there. Because that’s exactly the way we’ve been thinking about it right? Start small, very, very surgical applications that are fairly easy to to move or go from inside to outside, if you will. And as long as it’s something that is very compelling from a cost perspective, security perspective, and great for the planet, I think it’s compelling for the humans that are inside of these organizations.
Host Raj Daniels 33:03
I agree. Now, you’re working at the intersection of three of the biggest headlines right now: cloud computing, renewable energy, and crypto. And you’re taking this message to current power producers who might have might be skeptical, let’s say, about maybe not the energy piece, because that’s what they’re doing, but the crypto piece or the cloud piece, how do you convince them? What does that conversation look like?
John Belizaire 33:27
That’s great. We’ve had the opportunity to talk to lots of some of the some of the largest power partners, we call them, infrastructure funds, IPPS, etc, in the world. And they do come to those conversations quite skeptical. You’ve definitely characterized that appropriately. And what we try to do is, we first try to help them understand that we are like them. We are a developer. So we understand the challenge of building a large facility that has taken on lots of capital, and that capital comes from pension funds, and they’re very conservative, and so forth. And you have to find a way to monetize that power.
And so we also impress upon them, the fact that because we were like them, we understand the ensuing challenges with deploying more capital to the space over time. And that at least gets us talking the same language in my past experience as well, you know, speaking people’s languages, even just in general in the world. When you go to a foreign country, and — France is notorious for it, right? They really don’t like when people don’t at least try to speak French, you know, and even if you’re horrible, thats, “Oh my god, please stop. Okay, go back to English, but at least you tried.” So, that’s what we try to do.
We try to speak their language and then what we do is we essentially demonstrate to them two things: Number one, we have developed a novel structure — because remember, we understand project finance. So we’ve developed a novel structure that mitigates a lot of the risk of taking on a new offtaker or buyer of their power that mitigates the things like credit risk, and so forth, regardless of what we’re doing inside the facility. We understand the regulatory dynamics, and we built a framework that fits within those regulatory frameworks.
And then we understand how all the revenue flows, their tax credits, and recs work. And we’ve designed something that basically makes all of that flow nicely, and benefits their equity and debt holders. As you can see, we’re really thinking in their shoes. How would this have to look for me to do that? And then we take them one step further, using a three-step process, by the way, where we introduce them and understand the issue. We do this curtailment assessment, which is the first step, and that’s where we actually take their wind data, we analyze it. And we essentially show them what would happen if a facility was there when they were experiencing all of that curtailment. And then we can show them, based on different sizes of that facility, what would happen from a revenue recovery perspective and a tax credit recovery perspective, and that starts to shed some very interesting light, and we show them the IRR and all that kind of stuff that happens there.
Phase two is we develop a proposal or solution construct for them. And then phase three we design it, we build it, and we operate it. So they don’t have to understand anything about computing as well. So we’ve created basically a full-service product — we call the curtailment assessment and curtailment mitigation solution — using our platform. So that’s helping them to see that not only are we just sort of looking to buy power from them, but we thought through all the things that we need to think through from their lens to solve for the risks and the operational aspects and the financing aspects for a project like this.
And then the last piece we do is what I’ve just done here, is paint the roadmap for them. While they have concerns about cryptocurrency and how young the industry is and the volatility of revenue due to mostly folks misunderstanding of the fact that it’s not just the cryptocurrency price that drives the the success of a business like that. But that this business is going much further than that, to all these other applications. And that business relationship is very interesting to them. Because as they think about their business, they do have challenges with their current assets, and they would love to see us solve those.
But when they go to build new assets, I think we tend to turn a switch on. It’s like a switch that flips that says, “Hmm, you know, there are a few projects that we actually couldn’t do, right, Bob?” “Yeah. Because we could see the the increase in generation and potentially, you know, compression in price. And it would be nice to have this very novel solution as a hedge to that.” “Yeah, you’re right. In fact, I’d want to design my entire project from day one, to incorporate this as an embedded thing.” Now, we always chuckle internally — we try not to say this on the call. But sometimes I can’t contain myself because
I basically say, you’ve basically gone full circle now. We’re back to the vertically integrated solution we started with in Morocco. And that’s what we were trying to prove to the world, that you can actually increase the amount of renewable energy in the world, in parts of the world — by the way, the African continent is a perfect poster child for that, where there’s lots of incredible resources, but very hard to monetize them or get them out of the ground, which would have huge effects on the economic growth of those countries. If you just integrate two things that are incredibly abundant today, computing and renewable energy.
That’s the exciting thing that I get out of these conversations. And at this point, we’re having one or two of them a week with very large companies. It’s crazy. I hope that answers your question, Raj. I feel like that was a long tour. But the point was to show you that we’ve been very thoughtful about how we introduce this novel idea to an industry that thinks vertically. They say, “Well, I have excess energy, I just got to think of a battery.” That’s the only solution. Right? There are other novel solutions that exist today that can solve for some of these challenges.
Host Raj Daniels 39:44
You did ask my question. In fact, right before you started answering, I’d taken the note to ask specifically around power obligations and curtailment, so you answered both.
John Belizaire 39:53
Host Raj Daniels 39:53
And one of the things you said, very subtly in there. You mentioned crypto, but I think it’s more blockchain. Crypto is one use of blockchain. And so people that understand what the blockchain is and the potential opportunities around blockchain, whether it’s in finance or real estate, I think those are the individuals that will really see the bigger picture.
John Belizaire 40:16
Indeed, indeed, and those blockchain applications are going to be in that category we’ve been talking about. They will shape the future of a lot of what we know of today. And it’ll be exciting that those processes are — we’re sort of forming the backbone of what this what this whole new grid infrastructure looks like, in the next few years.
Host Raj Daniels 40:37
I agree. Now, you’ve been in this space, you jumped right in, a few years now. What’s the most valuable lesson you’ve learned about yourself on a journey?
John Belizaire 40:48
I would say it’s my patience. I’ve always known that I’ve been a patient person. I mean, hell, I was friends, you know, patiently waiting for the love of my life to convince her that she should date me and not just be my friend. And then ultimately, you know, we dated for six years, and then we got married, and now we have two kids. So that takes a lot of patience, you know, and careful planning.
But the patience required to enter a new industry that you know absolutely nothing about, have the humility to just wear that on your shoulder, like, “I don’t know what I’m doing here, please help me,” and use that to wait for the industry to mature to a point and the opportunity to mature to a point where it’s ready to generously embrace you, embrace the new innovation, and make it into something that basically is no longer exciting, just boring. Like, yeah, of course we build renewable energy centers with data centers in the mind, I don’t understand your point. That’s gonna take a long time to get to a point where I’m at conferences, and people are not just talking about batteries and transmission as the only solution to the renewable energy penetration problem. They’re thinking about other novel solutions, like computing, and they’re actually part of the lexicon.
Now, I was at my first this year in Austin, and I introduced the room, and the large — I am super impressed by the fact that this industry is very big, but very small. Everybody knows each other. And I was there, the newbie, talking about computing. And, you know, I felt like, to some extent, I blew people’s mind. People approached me and said, the next day — so I gave my talk, and then they came to me the next day. And he says, “You know, I’ve been thinking about this all night.” I said, “Wow.” Because it broke the the the mold that everybody’s locked into, that there are only a handful of solutions to this problem. There are many solutions, if you think more laterally, and computing is one of those.
But that takes patience to educate, continuously repeat yourself, get in front of the right people, build proof points, build the brand, success stories, attract challenging, expensive capital, and then ultimately, welcome inexpensive, abundant capital, right. So I’ve learned about the fact that I’m more patient than I thought I was. Have you always been this patient? No. I think I learned to be more patient when I became a dad. One of my colleagues on my team, he’s a younger gentleman. Incredibly bright, super talented, but he’s hopelessly impatient. And I’m always like, “You just give it some time.” He’s like, “I’ll never slow down.” And he just became a dad last year so I said, “Well, you’re about to become a dad. You will learn patience.”
Host Raj Daniels 43:57
Give it time, grasshopper.
John Belizaire 43:59
Exactly. I mean, would you agree? I mean, you have several kids.
Host Raj Daniels 44:02
John Belizaire 44:04
You learn so much to not get ahead of yourself. It takes them time to grapple things and for things to sink in, and you can’t always control everything, right? And so you just have to wait sometimes. Sometimes it’s just a matter of time. And so becoming better at sitting in silence with all the beautiful chaos and just being okay, waiting and focusing on your breath. You’ll get there in the end.
Host Raj Daniels 44:34
Deep breathing is one of my best friends.
John Belizaire 44:36
Absolutely. It’s an underutilized tool, I would say, deep breaths. I also take walks where I’m just walking and focusing on my breath, even though there’s lots of noisy city stuff going on. Just the process of doing that builds that into a cadence where you can quickly draw on it when you need it, when frustrating things are happening, and in the energy space, you need it, you know? Because, yeah, I mean, I don’t blame them, right?
This is one of my key learnings, and I learned this in a different industry. I learned it in the insurance industry, right. And I’m sure you learned it, when you were trying to sell the health care, right? They have built an industry, these are huge industries, that have been built on the platform that is regulatory-driven. There are all these rules that are really designed to protect and reduce risk over time.
And so insurance, I learned was, when I would look at selling to customers, what I realized is that it’s not about selling them on feature function, it’s really selling them on why making this decision doesn’t increase their risk. So I used to say, “Okay, when you go sell to insurance companies, what you got to understand is, they are risk managers, not risk takers. And so everything you’re doing is about showing them how you will mitigate the risk associated with making a decision to go with your solution versus something that they see as zero risk.”
The same thing is true here in the energy space. The energy industry is charged to take capital, and this capital is coming from pension funds. So people’s livelihoods have to be put to work to generate returns over a long period of time, sustainably, smoothly and perfectly. And so risk mitigation is the number one thing you learn to master in this industry, where you make a choice, you invest in a project, and that project will generate returns for 25, sometimes 30 years. And the capital doesn’t come back too quickly; it’s designed to sort of generate that smooth return.
So anything we introduce, the industry has to fit within that mold. And so we have to think of ourselves as long-term sustainable infrastructure that’s being built to partner up in this other infrastructure. And so we have to have capital that will eventually back companies like ours to do that. That’s the learning. And that’s why that requires patience.
Host Raj Daniels 47:17
You know, it’s interesting, you mentioned the pension funds. And that’s one of the reasons that when I’m talking to people about renewable energy, I try to explain that to them why this industry can’t turn on a dime: because of the existing obligations that many of these fossil fuel companies — and other companies that have been entrenched for a long time — have to pension funds and other financial obligations.
John Belizaire 47:38
Exactly. You’re absolutely right about that. I didn’t realize that, until maybe a couple years into the into the industry. I really understood the whole financial ecosystem that makes infrastructure that we take for granted possible. We take it for granted. We plug our devices to charge them in the wall. There’s a lot that has to happen for that to be possible, not withstanding regulatory aspects, but the capital aspect is very complex. And it goes really, really deep. And so people just can’t move very quickly.
Host Raj Daniels 48:12
You know, it’s one of my things I’ve been thinking about recently is that I actually feel like somewhere along the lines between late high school, early college, I think, a class on infrastructure, how the roads got here, how the bridges got here, how the power you use gets to you, I think it should be mandatory learning, I think people would have more appreciation, they were even more concerned when we have the bills that have been held up recently regarding what to spend on infrastructure and what not to. I think a class, just an introduction class, like a required Intro to Psychology class, an intro to infrastructure class, I think should be mandatory.
John Belizaire 48:45
Yeah, I think that’s brilliant. Raj, I wholeheartedly support that idea. I would add another one, I think that we should — we used to have the Peace Corps. We should have like a required Civil Service Corps, something like that, where young people who are bright, go spend a year working on projects and helping to stand up green infrastructure to help get us there faster, help to solve some of those problems, so they can really connect with how hard it is to just do that.
Some of the young folks just assume, “Why aren’t we just greener? Just do it.” It’s not that easy because of all of these challenges we’ve been talking about. So going out there and participating on the world, go be part of the evil empire and understand all the challenges they have to deal with to to get to where we’re all trying to go and that fast-moving Tesla.
Host Raj Daniels 49:39
Now, you brought up the insurance piece a couple of times. One of our listeners on Twitter, asked me to ask you: You’ve changed industries; career, actually was the question. How were you able to change careers? What enabled you to do so?
John Belizaire 49:55
I think it’s my propensity for learning. I’m a lifelong learner, I’m an engineer by training, but I think fundamentally speaking, my brain is just, and my passion is just learning new things. And so what attracts me to these complicated industries and businesses is how much learning opportunity there is to it. People ask me to serve on their boards, often, or help them with their companies. And I’m usually attracted to the ones where, hmm, that’s something interesting, I don’t know anything about that, I can learn something new and exciting there.
So it’s the learning passion that I use to sort of allow me to, to transition and have this flexible, chameleon-like approach to different opportunities. And I didn’t realize it was my, quote, unquote, superpower until I suddenly, I found myself in an industry that I would never have expected myself to be in. I’m a software guy, just assumed I’m just gonna keep doubling down on software. And I’m learning that more of a lateral, — I have this actual philosophy I’ll share here.
When I was growing up, my mom and, and my stepfather, my dad, they really had a more jobs and skills-focused approach to their professional careers. They would go work for eight hours a day, 40 hours a week, for 40 years. It was called 40 for 40, right? Just about every industry was like, “Go get a good job. And keep your job for a long time.” People don’t really go in for that anymore. And truthfully, people can’t really promise that anymore, that you’ll be in a role for that long.
And so what I believe the professional career is really about is more, rather than a one straight line on a wall, it’s more like a mosaic. It’s a series of different color tiles, different experiences, different learnings, different challenges that all come together to define you as an individual. And I believe the more versatile you are, and have seen more different things, the more valuable you will be to teams that that want to bring someone on to really help them deal with like the next big challenge.
Taking it back to the earlier part of our conversation here, how do you stay an optimist? Well, you see a lot of things, a lot of tough things. And if you go to a lot of different places, you’re going to run into a lot of new and interesting challenges you’ve never seen before. And it’s the ones you’ve never seen before are the ones where you have the most learning, the most growth, you can apply tools that you didn’t know you had. And you can actually be the the innovative perspective that gets the room to think about the problems differently.
To my point earlier, when I went to the renewable energy conference. If I wasn’t in the room, they would have talked to each other about the problems and the challenges and the limited solutions set of solutions all day and really never come out with anything that was breakthrough. Whereas just changing the conversation with an individual or team that is not biased by their own experience. Right? They can come up with innovation. And so my experience in insurance, that was true. So far here, it’s true. So that mosaic concept has been really helpful to me. And that’s how I do it.
Host Raj Daniels 53:25
Well, speaking of perspective, let’s move into the future. Yes, 2030. Yes, Fast Company, Fortune, Wall Street Journal, pick a publication, if they were to write a headline about Soluna Computing, what would you like it to read?
John Belizaire 53:39
Ah, that’s a great question. And I would say that the headline would be, “Is Computing the Future of Renewable Energy?” And the story would be about the fact that computing, we take for granted. But there’s a new form of computing, a new form of data center that could be the catalytic, if you will, or has proven to be the catalytic thing that has driven renewable energy to become the world’s global superpower.
Host Raj Daniels 54:13
I love that headline. John, I look forward to seeing it come to fruition. Last question, and you’ve given so much advice if anyone’s paying attention, listen to it. Patience, learning, mosaic, but a specific question for you, and this could be professional or personal. But if you could share some advice or words of wisdom with the audience recommendations, what would it be?
John Belizaire 54:33
Read a lot. I didn’t become a really big reader. If you were reading a book is what I’m talking about. I used to read magazines, I watch brainy shows, but reading books, and I’m talking about old books, dusty, crusty, most of them are digitized these days. There’s so much learning in reading about history, so much learning and reading about the failures of entrepreneurs that have come before me. So much learning about books that have nothing to do with my profession, but they’re just books about interesting concepts, like, how does the brain work? What is intelligence, for example?
There’s one I read recently on intelligence. And one thing I’ve learned in doing that is that it really helps me to process my current world. When I’m reading about the past, it processes my current world a lot better, it gives me new perspectives that I didn’t know were sort of hidden down deep in my subconscious, they kind of pop out, and I learned new frameworks. I learned that failure is something that repeats itself.
And incidentally, the reason I didn’t read as much before was, I’m a slow reader. And so I am one of those people who, as I read the words on the paper, I’m hearing myself say them in my head, right. So that slows your reading rate down. And about four years ago, when I sold my last company, I was taking a break. My mission that summers was to sort of just read, you know, break away from stuff. And I found that combining the visual read with the audio read where I can speed up the audio actually increased my reading speed and comprehension, because I ran a company, a distributed company for many years. And I had to listen to large volumes of information over conference calls all the time, and then make really important decisions.
And so I realized that I built this really strong muscle of processing lots of information via audio. And so I combined this visual audio thing, and now my read rate is, is is like 10x. I can process a reading at a much faster rate. And so I get through a lot of the books that I read, and it helps me to create all sorts of insights. And as I get those insights, I write them down on that blog I talked about. And it’s exciting. It’s probably one of the best things I’ve ever done in the last, you know, several years of my life. So read more is the advice that I would give to my younger self. And so I give that advice to just about everybody. And don’t read the books that came out, like, last year, read the books that came out 20 years ago, 30 years ago. That’s where the real nuggets are. Read about the stuff that doesn’t change, not the stuff that’s changing.
Host Raj Daniels 57:22
So I’m gonna cheat. I said, last question, but I have to ask now. Yeah, what was the book on the brain or intelligence? And what was the best book you read last year?
John Belizaire 57:31
Great question. The book I’m reading is called On Intelligence, it’s written by the founder of spring, the spring handheld device. And he actually has a second book that just came out called 1000 Brains or something like that. And I think Bill Gates just had that on his list. I would start with the On Intelligence book; it’s fascinating. It really basically tells you that the cortex, the cortex part of the brain, is the brain. The cortex is listening to my voice right now. And he explains in a beautifully succinct and simple way, that intelligence is essentially the brain taking patterns, and then turning them into memory, and then that memory, essentially, powers everything.
So, let me give an example. If you reach, if you look down and you see your pen or something, you’re going to write a note right now,your brain basically predicted all of the motor movements that it will need to make in order to pick up that pen and write something on the piece of paper. And it’s a very fast pattern that just sort of fires in your cortex. And the very prediction is actually what creates the movement. It’s not the other way around.
That blew my mind. And so what that says is that you can actually predict just about anything through any means. So if you hear a sound, your brain can make a prediction about that. And by understanding how that brain works, we can build better computing systems to replicate it and so forth. And then he shows you how, because of that, you don’t have this ominous potential from AI that everyone is concerned about once you really understand how the brain works. He shows you that AI systems don’t actually work the same way the brain does. It’s fascinating book; I highly recommend it. That was one of my favorites last year. The other favorite book that was surprising to me, was Green Lights.
Host Raj Daniels 59:43
John Belizaire 59:44
Indeed, it was a great book because, look, he’s unlike very many people as a human. But he just so happened to have put together and journaled for 30 plus years, he had this habit and persisted with it for 30 plus years. And so he had a beautiful picture of the changes in his life and the moments in his life that sort of drove those changes. And it teaches you that sometimes life gives you red lights, and sometimes they give you green lights. And they both have a role. They both have a role, and I won’t spoil it, but it’s a fascinating journey. Hilarious.
You know, he’s really good. I would get the audio version by the way. Get the audio version because he reads it, and he’s just a fantastic actor, right. So he’s doing the voices of all the characters and people in his life. And he’s, he’s going through these incredible changes in his life. And it just is easy to mirror that onto your own. And when you look back, as you’re reading the book, on your own life, you will find those red lights and green lights too. And you’ll start to recognize them better going forward. And that was my takeaway from the book. It was just a fascinating, surprisingly insightful book that was essentially just a famous actor’s memoir. But it’s got a lot of tools in there, a lot of really nugget advice.
Host Raj Daniels 1:01:22
Well, John, I appreciate the recommendations. I really appreciate your time today, and your success with cylinder computing. And look forward to catching up to you again soon.
John Belizaire 1:01:30
Thanks, Raj. It was a pleasure. Thank you so much for having me.
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