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Entrepreneurs Tackling Climate Change: Try to avoid the “half-pregnant” scenario

With Mark Cann, of Cryo Energy Tech



For governments, try to avoid the “half-pregnant” scenario. For example, in some electricity markets power generation and delivery is no longer vertically integrated, which creates competition on the generation side. However, many of the same markets have government mandates to purchase power from specific sources. You can’t really have a competitive market that is also driven by government mandates. It’s difficult for investment decisions to be made when it’s unclear how quickly the pendulum will swing back the opposite direction. In the longer term governments need to fund their budgets without relying on the extraction of physical materials. This most certainly will not happen overnight. So, the first step that can be accomplished today is to start sunsetting current policies that are subsidizing energy markets. Every single energy source receives direct or indirect subsidies so true price discovery can be rather difficult. Energy solutions always have been and always will be dependent on physics and economics. Politicians won’t be changing physics anytime soon so winding down the subsidies is a good place to start.


I had the pleasure of interviewing Mark Cann, head of System Design and Development for Cryo Energy Tech, a company that condenses the local atmospheric air into liquid for use as energy storage and quick refueling portable power applications.


Thank you so much for doing this with us! Can you tell us a story about what brought you to this specific career path?

I was a “gear head” since before I was able to crawl into the garage. I spent many years working in warehouse and manufacturing environments along with automotive customization. The blending of those experiences has helped to lead to the creation of various mechanical designs that can be used to solve some major problems.

I had zero intentions of being directly involved with the energy industry as the original goal was to be a component supplier. As other companies shifted away from using thermal based designs, we had to fill the gap by designing full cycles in order to implement those components, which meant becoming involved within energy markets themselves. Our modular approach has opened the door for many new and exciting applications that previous many not have been practical or economical, thus here we are.

What is the mission of your company? What problems are you aiming to solve?

We do not have a “mission”, but rather more of a design philosophy based on two distinct principles. First, there’s always a better way. Regardless of the circumstances or the narrative there will always be better ways to accomplish a goal. Second, we strive for our designs to have a multiplier effect, which allows a solution to benefit various groups simultaneously, even if some of the groups might not even be aware of the benefit. The 3 primary areas of our focus center around energy storage, quick refueling portable power, and industrial gases. Each one of these areas has a strong multiplier effect. For energy storage, we convert waste heat into power as well as time shift electricity from when it is produced to when it is needed, thus providing electricity that is both low cost and reliable. Access to electricity has a direct and immediate impact on quality of life along with forming the foundation for clean drinking water, shelter, and medical care. Portable power is not only vital during natural disasters but also has a direct impact on the items we consume everyday. The cost of delivering goods, either to your home or to the local store, is added onto the cost of the goods themselves. By lowering the cost per mile of delivering goods you can increase the affordability of those goods or increase the distance goods can be delivered or both. Again, this is another instance of an immediate impact on quality of life. Finally, we also focus on industrial gases, which many people may not realize just how much of their lives can be impacted by industrial gases. The world’s ability to grow large quantities of food is dependent on fertilizers that include nitrogen. That nitrogen is removed directly from the local air itself to help create the fertilizer. Traditionally, this process has been energy intensive but we are working to supplement the process to lower the energy cost, thus lowering the cost of fertilizers which leads to lowering the cost of food. This is yet another multiplier effect that allows us to raise the quality of life for millions, and hopefully eventually, billions of people around the globe.

Can you tell us about the initiatives that your company is taking to tackle climate change? Can you give an example for each?

Let’s take the areas listed from the previous question into a little more detail. The underlying core of our technology can be utilized for various use cases. In this example we’ll follow the different stages of providing food and how we improve each major step of food production and delivery along the way. After efficiently condensing local atmospheric air into a liquid, nitrogen is separated to be synthesized into fertilizer to help provide large yields of food. In the next stage, our technology can be used for quick refueling portable power so that farming equipment and delivery trucks have a low operating cost as well as an efficient reliable method of motive power. Now, due to low cost energy storage the local grocery store has cheap and reliable electricity to keep the food fresh and affordable.

Looking at the overall process it becomes clear what a major impact you can have on making sure food is readily available and as affordable as possible. We lower the cost of a key ingredient, the nitrogen based fertilizer. Then, we lower the cost of planting and harvesting the food along with lowering the delivery cost. Time shifting of stranded or off peak electricity allows the grocery store to minimize overhead cost. Providing competitive solutions for each major step results in the immediate increase in quality of life for the masses.

There’s also secondary benefits that increase quality of life as well. As we condense the local air, contaminants and other debris are removed improving the quality of the local air. Another byproduct is the easy capture of CO2 as the air chills into liquid form. Yet another unique aspect of our technology is being able to convert waste heat that is normally thrown away into these different valuable solutions. When waste heat is not available we use solar thermal which opens the door for locating our systems anywhere in the world, regardless of how remote a location may be.

Whenever we design a solution, climate change is not part of our design criteria. The focus is specifically on making sure we are competitive with what is available today as well as having the ability to remain competitive for the next 5–10 years. It’s much better to keep the focus on providing the best mouse trap as possible and you’ll find that other important benefits will appear. We did not intent to replace gasoline, diesel, or batteries but by staying focused on providing the best solutions as possible, that was the result. We did not intend on purifying the local air but that was another byproduct of the design process.

What was the most difficult thing you faced when you first started your company/organization? Can you share how you overcame that. This might give insight to founders who face a similar situation.

 Let me modify that question slightly. After having conversations with people wanting to be entrepreneurs, there’s a common theme that has emerged, with that being a total lack of pragmatism. It’s great that so many people have the desire to start a company but at times it feels a bit like telling an adult to believe in the tooth fairy. Someone recently asked for advice with turning an idea into a company and my response was, “are you willing to sacrifice the next ten years of your life to try and make this happen?” The silence spoke for itself. It’s not doing anyone a favor to highlight the possible positives and ignore the obvious downsides. People need to be aware that in order to build anything from scratch you need to be fully committed for a minimum of 10 years. Also, we should stop overemphasizing on whether someone is a founder or not, as companies require non-founders at various levels just to exist in the first place. 


 
Many people want to start a company to tackle environmental issues, but they face challenges when it comes to raising enough money to actually make it happen. Can you share how were you able to raise the funding necessary to start your organization? Do you have any advice?

Bootstrap for as long as possible and then bootstrap for a little longer. Try to find people that are willing to help you for the sake of helping you. That sounds naïve but you need those around you to be interested in more than monetary gain. If your solution is solving the right problems the right type of capital will find its way to your door step. Remember, with outside investors not only will you have additional chefs in the kitchen, you’ll also have additional financial liabilities on top of your current burdens. Bootstrapping will assist with learning how to handle overhead as well as keeping you captain of the ship.

Do you think entrepreneurs/businesses can do a better job than governments to solve the climate change and global warming issues? Please explain why or why not.

How much hate mail do you want to receive? :-)

Let’s split this response into why it’s difficult for governments to implement the necessary changes and and then will follow up with why it’s better for entrepreneurs to lead instead. First, we should paint a little context for why governments are so intertwined within the energy markets. For the last couple hundred years governments have been relying on taxes and royalties from energy markets to fund their budgets. Now, some people insist that we should simply tax energy sources differently as a way to address various problems, but the end result of this approach is that the status quo is extended even longer. If you want a particular energy source to decrease you need to drive the price of that source down not up. As prices fall for a particular energy source future investments move elsewhere which puts even more pressure on pricing resulting in a downward spiral. When governments prevent prices from falling via taxation, the downward spiral turns into a gradual decline, extending the status quo for a little longer. Having prices fall is counterintuitive to government budgets that depend on a certain level of revenue every year from those vary same sources. Entrepreneurs that build new solutions do not face the same counterintuitive nature of government budgets and instead have an incentive to drive down pricing of existing energy sources. Government budgets historically have been and continue to be one of the biggest beneficiaries of the energy markets.

Let’s talk about the elephant in the room when it comes to government versus entrepreneurs and that is the massive net negative that is produced from the mis-allocation of resources. Once you realize that the mis-allocation of resources is not only a negative, but over the long run a multiple net negative, it becomes a little more clear entrepreneurs should be our path forward. For example, let’s say that X amount of capital is steered towards a certain solution due to a government program. The nature of government programs is that most do not actually end but instead change names or combine with other programs so that the total amount of capital being spent could be 100x or 1000x the original program. When you factor in that other solutions where also available as well but were starved of resources due to the government program pushing a certain direction, the end result is slower progress. Another false notion is that taxpayer money should be used for research and development. Today’s profits will fund tomorrow’s solutions and companies are currently sitting on trillions of excess capital that can easily be deployed to develop and commercialize the necessary solutions. At the same time, government programs backed by taxpayer money create a disincentive for private companies to deploy that excess capital into solutions that might compete with what is being pushed by the government. It’s a self inflicted wound.

What are some practical things that both people and governments can do to help address the climate change and global warming problem?

For governments, try to avoid the “half-pregnant” scenario. For example, in some electricity markets power generation and delivery is no longer vertically integrated, which creates competition on the generation side. However, many of the same markets have government mandates to purchase power from specific sources. You can’t really have a competitive market that is also driven by government mandates. It’s difficult for investment decisions to be made when it’s unclear how quickly the pendulum will swing back the opposite direction. In the longer term governments need to fund their budgets without relying on the extraction of physical materials. This most certainly will not happen overnight. So, the first step that can be accomplished today is to start sunsetting current policies that are subsidizing energy markets. Every single energy source receives direct or indirect subsidies so true price discovery can be rather difficult. Energy solutions always have been and always will be dependent on physics and economics. Politicians won’t be changing physics anytime soon so winding down the subsidies is a good place to start.

For people that want to offer solutions, stick with the fundamentals. Any emotional connection should be a bonus feature for the solution, never the primary reason, In other words, every solution needs to stand on its own two feet and not only be competitive today but still be competitive tomorrow. If that’s not the case get back to work and keep on refining your solution a little more. Emotion can serve as a crutch to try and justify inferior designs and business models, so avoid that crutch! Also, avoid the hype cycle whenever possible. It’s called a “cycle” for a reason, because the hype always fades away and reality always wins. If your solution is fundamentally sound, you’ll be just fine.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

Every single day someone has helped in one way or another. Pinpointing a single person would be somewhat disrespectful so with that in mind I will simply say those that have helped and continue to help are most certainly appreciated. A very sincere thank you!

What are your “5 Things I Wish Someone Told Me Before I Started” and why. (Please share a story or example for each.)

How about we do “5 things that are under appreciated or under discussed regarding entrepreneurship in general.” That should be more helpful to most people. In no particular order:

1. The “next big thing” is usually something other than what the general consensus or current narrative suggest it might be. A couple examples, Yahoo was considered the next big thing until it turned out to be Google. MySpace was also considered to be the next big thing until it turned out to be Facebook. Cherry picked examples? Of course, but there is a long history in various industries where something that was overlooked goes on to become the majority of the market. Being contrarian for the sake of contrarian is not really helpful, but keeping an eye open for other possibilities is well worth the effort.

2. Know basic accounting. No, I’m not trying to be funny. If more people understood basic accounting practices than some business failures could be prevented. The number one reason that businesses fail is because they run out of cash. How can you properly manage cash flow without understanding what cash flow is?

3. The single most important investment you will ever make is investing in yourself. Not talking about self-help guru investing in your self here, but actual spend time and money to improve your personal skill set type of investment. Match the skills that go along with your personal interest and hire out the ones that don’t. Skills last a lifetime so pay yourself first by building a knowledge base that carries over to multiple industries or businesses.

4. Instead of “failing fast” use calculated risk. What’s the difference? Failing fast is too random and chaotic where as calculated risk is learning as much as possible while avoiding fatal mistakes. No single one decision should make or break a company but rather multiple decisions that can fail/succeed independently of each other can be productive. Learn and move on but failing on purpose is a waste of precious resources.

5. This is the most under appreciated and under discussed topic: Opportunity lies at the intersection of contradictions. The reason technology can be so powerful is because many solutions require a different perspective or point of view rather than a brand new invention. Many companies or individuals that are capable of providing new solutions will discard them if a contradiction happens to appear. What solutions have other companies passed on or outright dismissed? There is your opportunity. This sounds a lot like the topic listed under number one and that’s because the two are inherently related.

Bonus round: Get use to hearing and saying the word “no” quite often. Always be courteous about it when it happens.

You are a person of great influence and doing some great things for the world! If you could inspire a movement that would bring a great amount of good to the world, what would that be? You never know what your idea can trigger. :-)

Ideas by themselves are worthless. However, ideas that are combined with proper business models which are then executed efficiently cease to be worthless ideas and thus grow into solutions. Instead of trying to start a movement, help to solve someone’s problems and then do it all over again. Problem solving is what makes progress, not movements. Also, trust your gut rather than what people like me have to say!

What is the best way for people to follow you on social media?

Not a participant in the Matrix, but people can learn about our technology at www.CryoEnergy.Tech

This was so inspiring. Thank you so much for joining us!

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