We describe this show as a podcast for clean economy CEOs, investors and the people who advise them. As both an investor and an advisor, Graham has a foot in two of those categories. But he’s also one of the few people in cleantech who have served in elected office. Mayor Graham Richard served the city of Ft. Wayne, Indiana from 2000-2007 before taking the reins at Advanced Energy Economy to advocate for pro-sustainability policies.
Graham is now a senior advisor at the San Francisco-based investment fund, Finite, a perch that gives him a window into a number of leadership teams. But he was involved in clean energy long before it was cool. Graham is a cleantech “OC,” (“Original Cleantecher”) who installed the floorboards on which many of us now stand.
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Mike Casey: This is Scaling Clean, the podcast for clean economy CEOs, investors, and the people who advise them. I'm your host, Mike Casey. I run Tigercomm firm that counsels companies that are helping move the US economy onto a more sustainable footing. On each show, we bring you usable insights on how to scale and run clean economy companies to the people who are succeeding at building, funding, or advising the most successful firms in your sectors.
We describe this show as a podcast for clean economy CEOs, investors, and the people who advise them. And as both an investor and advisor, Graham Richard has a foot in two of those categories, but he's also one of the few people in Cleantech who've served in elected office. He served in two of them. He was the mayor of Fort Wayne, Indiana, the second biggest city in that state from 2000 to 2007. And before that, he was a state senator in Indiana and he did all that before taking the reins of the advanced energy economy to advocate for pro-sustainability policies. Graham is now a senior advisor at the Los Angeles-based Finite, a sustainable investment platform, and he's also an advisor to AmeriCrew and BrightAction. I think his position gives him a special window into several CEOs and executive teams, and that's why I thought he'd be an ideal guest for the show. Graham, thanks for joining us.
Graham Richard: I'm delighted to be with you.
Mike Casey: How would you describe the arc of your career to date, and what drew you to renewables?
Graham Richard: I started early on renewable energy because I was running for the statewide office of the lieutenant governor after I served as a state senator, and was responsible for energy policy. So I spent a lot of time early on in my career. And then after moving on from politics at that point, I started Midwest Hydro after the Public Utility Regulatory Policy Act was passed, and that then led to co-generation systems. So, from a business point of view and a policy point of view, the arc of my career has been to look ahead at clean energy and clean economy systems that could scale and would have an impact. And then that happened as mayor as well because we were one of the first cities in the country to reach out with other mayors.
And in 2005, for example, I was a founding member with other mayors around the country of the mayors’ climate action initiative. Started with the Sunday Summit in 2005 with Rocky Anderson, the mayor of Salt Lake City, Robert Redford, Mayor Daley, and others. So there's been a continuum of activity that then led to my selection after I was mayor of Fort Wayne by Tom Steyer and Hemant Taneja, and other board members like Bill Ritter to help stand up the advanced energy economy. Now I'm delighted to be an investor and an advisor in early-stage companies. All of those companies have a mission and a vision for a secure, clean, affordable energy future.
Mike Casey: In your work as an advisor and an investor, you've observed and met a lot of CEOs, what qualities do the top CEOs in this sector possess in your experience?
Graham Richard: I use that as a criterion for where I make my investments and where I'm being an advisor. I start with a talented leader or leadership team, and they've got to have a real passion and a purpose-driven solution that includes a digital platform with the capability to scale. In the end, what's important is that we reduce massive amounts of carbon pollution, reduce the energy burden, and transition to this incredible clean economy by creating jobs. And so it always starts with passion and purpose and the ability to tell that story effectively to investors, team members, and recruits. Those are the things that I focus on. In addition, you need to have leaders with experience or capability to build a trusting environment. Trust is so critical in early-stage companies in particular, but any stage company as well.
Mike Casey: Expand on that last part, if you would please because the next question is how would you describe the role of the effective Cleantech CEOs? Let's say tomorrow, we're going to go down to Stanford and be a guest lecturer at an MBA class, and you got a question, what is the job of a Cleantech CEO? How would you answer that question?
Graham Richard: Passionate, relentless pursuit of customers with a solution that delights them, number one. Number two, you got to have a strategy for presenting that solution to the customers. It’s not good if you have the wrong strategy and great execution, you don't have a winning company. And then third is the capable talent to either build the team or execute on performance. If you can't perform, it doesn't matter how good your product or strategy is. So all of those are the leadership characteristics that are critical for particularly early-stage companies.
Mike Casey: When you were the mayor of Fort Wayne, Indiana's second-largest city, what did you learn from it that helps when advising clean economy CEOs? It's not the background that one typically thinks of for an advisor to early-stage companies. You think someone who's run early-stage companies or was a VC at one time, you have a very different background and I'm interested in knowing how you feel that's equipped you to provide valuable perspective to CEOs.
Graham Richard: The key characteristic for a mayor and many other public officials is you must set the direction and passionately lead in a way that others will follow and be motivated. So there's the external job of a CEO of a mayor, and then there's the internal job. When you have nine unions and you have almost 2,500 employees, you've got a huge challenge internally to align your internal team with what the vision and mission is. So we wanted to be the safest city of our size. We wanted to be a city that had the highest level of performance. And so learning those skills of communication - externally to your customers, your vendors, being able to tell your story compellingly is a critical characteristic of a clean economy leader. And then next is trust. Building trust, whether it's, you know, in a city government or within a community, is a critical leadership characteristic. And I think every clean economy CEO that is out there today has to be able to tell that story and motivate customers, stakeholders, investors, and employees, to stay focused on executing on the strategy.
Mike Casey: Graham, you've talked about passion, you've talked about a compelling solution, but beyond those, are there other things you're looking for when you consider investing in a company?
Graham Richard: Yes, I think performance is very important and that is a mindset and it's also an experience space. So for example, in one of the companies that I've been excited about, which is led by Kevin Conroy and he was the founder with the great idea for Finite, he's paired up now with David Kretschmer, who is significantly older than Kevin and led as a chief investment officer for Anthem Insurance Company. The investment decisions were for over 30 billion, a lot of which were fixed-income assets. So the willingness of a founder like Kevin to engage and think about the execution and knowing that he would be complemented by the talents of David. And so building a team is critical leadership, particularly when in each of the companies I'm advising, they have to have a rich and deep platform.
I learned about platforms when I moved to San Francisco and Hemant Taneja was one of the co-founders of the Advanced Energy Economy, and he was a venture capital investor. His first book ‘Unscaled’ is about the power of platforms. And at the advanced energy economy, we developed Power Suite, a technology platform that helps search every piece of legislation, every state legislature as a member benefit, and also everything at FERC and the US Congress and every public utility commission. In that process, you had to have the mentality that I don't have to understand everything about how to build that platform. I have to understand the significance and importance to my customer. So when I look at the founder or CEO, I want to make sure that the person understands the power of the platform in addition to being able to work with people.
Mike Casey: And when you're considering investing, is there a way you found to get a window into how solid the CEO's team is? You can more appropriately assess the CEO's strengths and weaknesses through interaction with him or her. What about their teams?
Graham Richard: In some cases, my investments and advice were so early that there was a very small team, but in that case, you want to know that the capability for each team member, their performance capability has some basis in experience and results. So I look to what you did before that will lend your capabilities. So the technology team at Finite previously built platforms not applied to sustainable investing. And what makes Finite unique is that it's the first platform we're aware of with SEC approval where the technology in a sense creates a FinTech innovation for investing in solar assets. So the technology has to be rich and deep, and we have to have gotten the SEC approval and all of the pipes have to work.
So when an investor comes on and wants to invest $500, the first platform that we're aware of for a fixed-income asset investment strategy, all that has to work has to be easy, has to be done in less than three minutes. And we have to be able to meet all the criteria of the SEC when we have people's money invested. So there was regulatory compliance, and there was technology platform development. So, the issue is can the leadership team choose the right vendors and hire a small team of people to build out that technology platform? So I assess by looking at the experience and the blend. You want some people who got that youthful zeal and brilliance, but you also want some folks that have seen 10, 15, or 20 platforms built. And so that's how you assess and decide whether or not you're going to in a sense bank on, you're gonna, in a sense, invest, trust your investment money and a lot of time with a new company.
Mike Casey: In your experience watching companies perform in public policy spheres and commercial execution, is what they do more important, or is what they choose not to do more important?
Graham Richard: I think you lead with what it is that is most important. You lead with your assets, you lead with your strengths, and you put on the parking lot. I'm talking to one individual, and this is a person who's used to saying yes, and I'm saying delegate, dump, delay, and do, which comes from a good book on how to manage your time, but sometimes it's the reminder value to stay focused. So, I would always emphasize leading with what it is you do well, and the most important question, who is my customer? How can I delight my customer? How can I get my customer? And I can't give the details of the names, but in one case, AmeriCrew and Kelly Dunn, who I met when I was the mayor of Fort Wayne, and he had sold a company to Ivan Seidenberg at Verizon, and we were trying to build out the Fios system in Fort Wayne.
We were one of the first communities to do that. Then Kelly went on to find other companies and at AmeriCrew, he has a good track record of recruiting veterans - over 3000 veterans to be trained in the wireless industry. And what I helped Kelly see was EV charging infrastructure is very much like what you've already been doing in building towers, putting in broadband, the civil engineering, a lot of that work. So for a customer, they wanted to find locations for EV charging in two major, well-recognized cities. And he put together a team and they went in, in no time at all using veterans, surveyed all the different sites, found the sites, and led this particular large brand-name corporation. And so when they wanted to go to another location, they said to the prime contractor, “we want AmeriCrew in this again,” because of how they delighted this customer in trying to find EV charging infrastructure sites. So execution and focus on the customer's need are critical. And so you have to separate things that are not on the immediate need list to meet that customer's need. Once you've got that customer need and you're getting repeat customers, then you can focus on other things.
Mike Casey: How will the clean economy be different in five years and what will those differences mean for the evolution of clean economy CEOs?
Graham Richard: I think we will have the clean economy becoming ‘the economy’. I think the nature of discussing alternative energy is fast fading. Alternative energy will be the fossil fuel industry. And so in five years, I suspect we will have great progress on the electrification of transportation, building electrification, and distributed local energy will be booming. And with that, we will have tremendous demands on the workforce. And that's one of the reasons why I'm so supportive of the AmeriCrew and training Americans, and veterans to be able to fill a tremendously important need for trained workers across the spectrum. Just think about all the electricians that we need with the electrification of everything, we are so far behind on what we need to do. So in five years, I hope that Kelly and hundreds of others - he's founding the National Infrastructure Training Academy for veterans and underserved communities, so that we have millions of people in post-high school learning and education and skilling and all the workforce.
So I think that will be something that will be in full throttle. And I think in addition to that is the integration of systems. What we need now are systems thinkers - people who can put together software solutions, platform solutions, and training, in the kind of approach of integration of different solutions and platforms that we haven't even thought about. And so I hope lots of people come from the oil and gas industry, from technology, from big tech, computer, social media, all of those industries. I think we will be attracting millions of people of all ages. And that will be great for the industry.
Mike Casey: And how will that translate into differences for clean economy CEOs’ focus, ideal backgrounds?
Graham Richard: I think we will find many more CEOs in the clean economy. Like Lisa Altieri at BrightAction, for example. She was a data scientist, but she also ran a recycling company and she was a community organizer. We're going to find an attraction, we're going to attract people to climate solutions, to the clean economy who may not know a whole lot about the difference between all of the sort of electrification issues, meaning the big grid, the distribution grid, or grid edge solutions. We're going to find people that come because they have leadership in a given company and they say, I now want to turn that to the clean economy.
Mike Casey: Are you a cleantech optimist or pessimist? And are you a climate progress optimist or pessimist? And why?
Graham Richard: I am hopeful, and I am an optimist. I actually won a contest when I was in high school at the Junior Optimist Club, and the quote that I used - ‘Twixt the optimist and pessimist, the difference is droll, because the optimist sees the donut and the pessimist sees the hole’. Now that's a little diddy, and I had brought that up to my memory for decades, but my point is this - every market indicator, and that's where I focus, is for optimism. We now have the technology and platforms like Finite, more financing. We have the systems integration and we have a public policy. Like even if the Biden administration does not get the final bill back, better reconciliation, even in the infrastructure plan, particularly as it relates to EV charging we've got the resources and commitment and passion. 500,000 charging stations in five years is a massive goal. And so what do I see? I am optimistic on both of those questions, and I think it's market-driven optimism by lowering the costs of solar and wind and all the new innovative technologies and systems thinking, financing, and permitting. It's moving so quickly.
Mike Casey: You get invited to give the keynote to the first-ever joint session of RE+, Intersolar and Clean Power. The entire cleantech industry leadership is assembled before you. You are asked to speak on the one to three things that these sectors need to do above all else. What do you say?
Graham Richard: Continue your pathway to innovation in innovative integration of systems, finance, and public policy
Mike Casey: In that order Priority?
Graham Richard: Yep. Stay doing what you're doing. Public policy is very important. I spent my life as a state senator, as a mayor, and as the leader of a major trade association promoting policy. But you also have to stay focused because the policy is more easily driven when you have solutions that consumers are demanding. When you have a hospital, a college, a university, and a major manufacturer in a given community, regardless of whether it's purple, red, or blue, those are the employers. They can demand attention. And microgrids and electrification and vehicle to grid and all the new technologies, if you make them consumer-driven, whether that's a company, an anchor institution, or whether that's the city government, then the policy is easier to get changed because you have so much clout from the company CEOs, the mayors. So you have to continue that momentum, improving customer services of products and services, reducing the costs of solar, integrating the systems, and getting better finance that drives policy.
Mike Casey: Final question. Are we in an era where commercial execution is more important than policy or not yet?
Graham Richard: I think you have to have both. But some believe that the policy always drives the innovation. I think we're at the stage where the innovation and the customer demand will help drive the policy. So I think you're going to do both at the same time. And obviously, policy's critical. If we hadn't had many policies over the last 20 years, we might not be at the state we are now, from net metering, as it relates to local and distributed energy.
And then at the federal level, that adds benefits and credits, and so forth help to bring down the cost of the financing of those first major projects, in particular large-scale solar and wind. So, it's a circular systems approach and I don't think it's one or the other. We do both. We can do this and the traditional energy interests have been doing that for decades and decades, meaning they've spent a lot of time and money on lobbying, they've figured out how to message and they've continued to protect traditional energy when in fact the clean energy economy is the economy that brings the benefits to, particularly, the people that need it the most, those that have the highest energy burden.