#158 Product-Led ClimateTech, Exiting to Big Tech TWICE, Being a Climate Papa, & More w/ Ben Eidelson (Stepchange, Climate Papa)

In this episode, I chat with Ben Eidelson, Co-founder & GP of Stepchange, an early-stage venture fund that invests in product-led companies that will make a “step change”, pun intended, I’m guessing?, impact on climate. 

When editing the episode, Alex, our executive producer, told us he could already tell one of our best episodes yet. I very much agree. This turned out to be the VC meets product meets content special I was hoping it would be. We discuss all things product in climate, Ben being a 2 time exited founder to big tech, starting a climate fund in this environment, and why his kids changed his life. 

A huge shoutout to Ben for coming on the episode. This started out as me fan-boying to one of his episodes and here we are. 

As always, thanks so much for listening and enjoy the episode!

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Topics: 
**3:10 What is a Product-Led Company?
**8:49 Why PMs are not Thinking about Climate
**14:45 The Importance of Active Listening
**16:03 Identifying Founder Potential
**18:29 The Role of Vulnerability in Relationships
**20:35 The Origin and Impact of Climate Papa
**25:41 The Product-Focused Thesis of Step Change
**27:41 Product Meets Hardware and Deep Tech
**34:35 Bullish Industries in Climate
**42:45 Lessons from Being a Founder
**44:59 Building Deep Co-Founder Relationships
**47:32 Tips for Product-Market Fit in Climate

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Links:
**Ben Eidelson | Stepchange | Climate Papa
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**@Silas & @Somil_Agg on X 

Transcript

Somil Aggarwal (00:01)
Alright, welcome to the show Ben, how are you?

Ben (00:03)
I'm very good. How are you doing?

Somil Aggarwal (00:05)
I'm doing all right. I feel like I might be out podcasted today. Ben has his own podcast. So this is super, super fun to have. Ben, you on top of being very much sort of the product journey that I'd like to have, I think you also very much have a climate journey that everyone should be listening to. So for the audience, who are you?

Ben (00:25)
Yeah. Um, my name is Ben Adelson. I'm a investor based in Seattle. Um, and I'm also a dad. I have two kids, um, a almost six year old and a three year old. Um, and that's led me to, uh, that's been a big motivation of working on climate. So I have a podcast, um, called climate Papa, where I explore topics at the intersection of climate change, parenthood and technology. Um, and I recently launched a new venture fund called step change. Um, so between those two things and my.

Actual kids, I feel very busy these days.

Somil Aggarwal (00:57)
So between your main role of being a parent and your side role of running a venture fund, lots to talk about. Why don't we start heavy? What exactly is a product led company?

Ben (01:08)
Yeah. Um, you know, this is a little bit reductive, but it's where the product really matters. Like lots of other things matter for a company, right? There might be regulatory tailwinds. There might be technical breakthroughs. There might be markets. Um, but I really look for companies where product is in the core DNA of the company. Um, it's not just a case where it's about that, you know, they have a better product out of the gate, but it's a case that they actually kind of have built a machine around.

building the best product possible. Oftentimes this is, this is kind of more about process than outcome. It's actually about like how you relate to your users, how curious you are and how in the weeds you are in your market, um, how much taste like you have as a product person, um, and not in the formal product person sense, this could be someone who's, you know, technical or, you know, coming from a sales or marketing background, but just how much taste you have and like, what makes your product a great product. Um, and so product led companies are those where.

You can see the company just like oozes concern for product quality. Um, they sweat those details. They come at product design from like really first principles and they're constantly releasing product improvements. So to me, it's, you know, it's a little bit, not one thing, but product led companies are ones where those are kind of the qualities that I, that I see. And I kind of smell it off of the founders often.

Somil Aggarwal (02:26)
Starting early with a quote from a influential yet potentially controversial figure, one thing that I reminisce on a lot is Elon's quote about a product and a technology needs to sell itself. You should really not be devoting time and energy into your sales, specifically your sales. The product should essentially be so good that you market it itself. Do you think that's more or less what you look for? I mean, you talked about the process. Are you looking for something slightly different?

Ben (02:53)
I think that's somewhat correct in that, um, you know, The product, especially in climate where often what we're trying to do is motivate people to upgrade to a new product that is so much better that they just want the better product. And so, you know, I think that again, controversy aside, I think Tesla has really achieved that and that's been really consequential for the entire EV market, and now we need to do that with, you know, many, many other consumer categories and business categories.

I think sales explicitly is like a little bit, um, it's a little bit overly reductive, right? If you're, if you're, you know, a utility company and you're trying to figure out, you know, your plan for the next decade and you need software for that, like you're not going to not do that via sales team, but the, but the truth is still that the product needs to be, you know, multiple times better than what it's replacing, even if it's enabled, even if sales is a distribution mechanism for that.

Somil Aggarwal (03:49)
What do you think product means in climate? Is it the same as you come from a background selling and building companies focused on great products, you sold your first company to Google, became a PM there, sold your second company to Stripe, became a PM there. Again, not much you've done in your life clearly, but I think it's really cool to see that you went from this transition from product in a general software sense to a general climate sense.



What do you think is the main difference between product in general software and product in climate, if at all?

Ben (04:22)
Yeah, I think there's more similarities than differences, especially the way that I look at it. I think that, you know, working on, at Google, for example, I worked on consumer products, right? This sort of things like Google's messaging strategy and Google Photos. The difference between that and Stripe API design for moving bank transfers around is not much different from that Delta to the financing products we need for consumer decarbonization of their homes and whether or not they're gonna get heat pumps. And so,

The fundamental thing is, do you understand your users and what they need? And are you delivering something so much better that, as you said, kind of, maybe you don't even need to market it. And are you actually hyper aware of how people adopt those things and kind of where they get their value from? Um, you know, in some cases, again, part of the product is the pricing, like an API.

company, but in some cases it's just, no, like it needs to be the best way to message your family. And, and despite the differences of those things, I actually think like I use the same part of my brain to figure those things out when I was a PM at those respective companies. Um, and I think the same When it comes to climate, like People don't go shopping for a climate product. They go shopping for a car. Right. They go shopping for electricity or energy to, to charge that car. They go shopping for a comfortable room in their house.

They go shopping for, you know, a thermostat, right? They, they're not like here to buy a climate product. They're here for the thing that they need in their life. And, and fundamentally that's, you know, not, not a distinct category.

Somil Aggarwal (06:04)
Are NFPMs thinking about climate? Do you think?

Ben (06:06)
Absolutely not.

Somil Aggarwal (06:08)
What do you think is the main reason that, you know, PMs, at least in your experience, I mean, you've probably talked to dozens and know even more. What is the main reason, do you think, that's holding them back?

Ben (06:18)
I actually think that we've made the activation energy to jump into climate too high. We've, uh, you know, kind of we collectively who may have made the jump into climate kind of, I think, repeat this playbook of, Hey, the first thing you need to do is understand all the emissions that you have to understand the globe before you can take a trip and like, I think we should kind of flip it and say, you know what, there's a lot here and a lot of it's interesting. Let's like kind of find, let's meet both PMs and designers and engineers where they are.

And help them on ramp just anywhere into the space, because from there they can, they can kind of hop, hop through and hop around. Um, I think that we've, we've probably done ourselves a disservice actually kind of saying like, Hey, climate is this massive thing you have to, you have to unpack it all, you have to understand it all to be able to kind of take your first job in it instead. Like these companies, you know, again, fundamentally, many of them are software companies or product companies or energy companies, like you should feel, I mean, maybe Tesla is another example here. I think a lot of people.

Say, no, I work on Tesla. Like they don't, they're not like, Oh, I went and got a job in climate. And I like did the analysis. Like, no, I'm working on the cool car company and I'm helping like make their, you know, UX better. Great. Right. And it more like, I think the next 10 years or even five years of climate jobs should look more and more like that over time. And that's a sign of success and kind of maturity of, of the, of the market of companies.

Somil Aggarwal (07:39)
I think one of the things that most PMs, especially junior PMs who don't come from a lot of industry experience and probably exposure to different sustainability arms within companies and things like that, when you're going through that journey of looking at product from an outsider, you see a dearth of materials on what climate means to product management, what sustainability means to product management, compared to generic product management practices. And I think that comes also from this being a new field, but PM being such a knowledge intrinsic role.

that maybe there hasn't been enough regurgitation. I'm curious, how have you learned about different product management practices that benefit climate? And maybe this is more related to how you evaluate investments, but just taking a step back, how do you think you learned more and more about product?

Ben (08:28)
Yeah, I think kind of two ways, I guess there's kind of the, the raw information gathering, and then there's some, sometimes some useful shortcuts, right? Um, and so, you know, you look for other synthesizers of information, which has been useful, whether that's, you know, get the great podcasts to listen to or books to read, or, um, or, you know, articles to read, um, those can be helpful shortcuts. I also think talking to, you know, founders who've been in the space and other investors can be again, helpful shortcuts to kind of.

try on different mental models that folks have developed. But that is all to me, kind of in the service of trying to kind of construct some of my own mental models and then the real work gets done when you start really interfacing with potential users, right, and potential customers. I think that's the real work for both investors, but also for any product person. Like that's where, that's what matters, right? Are you solving their problem? And so-

You know, if you're investing in a developer tool company and climate, um, I've been spending a lot of time on this company, buy you energy as an example. They do utility data as an API. Um, and there it's about understanding their downstream users and talking to those users and we hosted a hackathon to bring together a bunch of potential users and see what they would build. And I had some ideas going to the hackathon, but what people built was like a whole different set of things and that opens you up. So that gets to, I think, a broader point of just like getting out into the world.

and colliding with people and learning. My brother was, oh, you go ahead.

Somil Aggarwal (09:57)
So sort of like grassroots brainstorming.

Ben (10:02)
Yeah. And actually in some of those cases of getting out away from the whiteboard and, and into the places, I mean, part of the amazing thing about climate is it yanks you into the real world, right? Going from working on just kind of, you know, Prada mobile software products or even funny I products where it's all, it's all behind the screen. Climate is oftentimes it's oftentimes bits in the service of deploying atoms. Right. And.

And so in those cases, going to where the atoms are to understand where the bits that need to be is really important. Um, my brother was deeply interested in, uh, ag problems for, for a period of time. Um, and I wrote this guide with him, uh, a guide to the role of software and climate tech. And one of the things that he did, he spent a lot of time thinking about ag reading about it, all of these things. And then he went to Iowa for two weeks to like talk to corn farmers. And he's like, those two weeks were more valuable than three months of reading books.

Because you actually understand like, Oh, this scale of farming is this type of business. These are the economics. This is what they actually ask for. This is how they make these decisions. These are things that are not necessarily in a book or even in a podcast. Right.

Somil Aggarwal (11:13)
And I think a lot of industries within climate that you might be trying to disrupt, especially require a certain level of understanding on the ground, rather than something you can approximate from afar because of how intricate and how nascent their sustainable supply chain models might be, for example, materials.

Ben (11:29)
That's right. And for me, it's kind of the founders that I like to partner with are ones that, you know, again, I, I'm generally one step removed now from, you know, starting my own thing, but it's about partnering with founders that want to be on the ground in that way, right? It's founders that, you know, Hey, if you're serving each fact contractors potentially.

Like it's the founder who talks to 200 in a month that I'm like, okay, like that, that founder is going to figure it out. They might be wrong the first or second time, but they're going to figure out the third time because they are fundamentally curious about the way the world is and what needs to change.

Somil Aggarwal (12:04)
And if you're in like a round table setting, I was at one of Peter's son's climate teas this past week. I don't know if you've seen him around LinkedIn, but he's part of a early stage climate fund called Climactic. And I was part of one of their sort of small round tables. And I think once you are in this space long enough, you learn to listen to the person that's saying, oh, I'm in the ideation stage. I just spoke, I'm speaking to like, you know, 50 HVAC contractors. And you're like, oh, like, why don't we all shut up and listen to what they have to say? Right? Because they'll say something unique and new.

Ben (12:30)
That's right.

Yeah. Yep. It's like get as close to ground truth. And if that's not talking to contractors yourself, it's at least listening to the person who is right now. I like that.

Somil Aggarwal (12:40)
Yeah. The prep for this episode was especially fun for me because you have a podcast and, uh, you know, shamelessly I'll say, I think it's of great quality, really, really good flow, I think, between the content. In one of your episodes, the one introing step change to the world, one of your LPs commented on your ability to see how a founder would evolve within their role. Uh, especially from looking at the product perspective and product evolution, but even otherwise. And.

This really stood out to me because I haven't heard this as the strength of everyone, much less the majority. So do you think that comes from your product expertise or is it from something else that you've gained over time?

Ben (13:21)
Yeah, that's a really good question. Um, it's a little hard to pin that one down. Like I think it, you know, it's a little bit of kind of a personality trait, a little bit more than a career trait. Um, I just really like people and I really like trying to understand people. I just think people are kind of one of the most fascinating things in the world and trying to figure out what drives an individual forward, like

And by doing that, I typically kind of get a sense of what their potential is. Right. Um, it's a bit more of an art than a science or something that you put like a product framework around. Um, but I've found that I have an ability, perhaps in part, because I founded companies before, so I've been through some things and I can, I lean pretty open and vulnerable about some of those challenges that I've been through to kind of get people to open up about where they're at and what's, what they're struggling with, even sometimes in a first conversation, um,

And if I'm talking to, you know, a company that needs some exceptionally strong enterprise go to market, I I'm looking for, okay, is that founder kind of showing some of those early skills or, you know, or does this seem like an insurmountable gap if it's a self-serve product that they're building. I'm watching to see how they like learn and iterate over a couple of conversations. How do they take feedback? Um, and it, you know, it just comes up kind of even in the flow of a first 45 minute or hour conversation off and then kind of forming that relationship. Um, yeah.

I, my, my wife is a therapist by training and I, um, learned a lot kind of watching her and her and her classmates go through all of that and like a lot of it is the skill of active listening and actively paying attention to how people react to things and their tone and their body language and all these things that kind of start to signal to you, um, Really just what's behind a person, right? And, and again, I'm not running that through some like,

maniacal model spreadsheet, it's more about building an intuition around how someone might show up when things get tough because they will always get tough even in the best cases.

Somil Aggarwal (15:28)
This might not be viable at a large scale, but maybe that's an advocating for therapy as a part of a diligence process, right? Like seeing what happens in certain situations and the reasons behind it. Not actually, but I think that's really fascinating.

Ben (15:40)
Yeah, I mean, I do think it brings...

I'll put it this way. Like, I think that vulnerability is actually really important to me. Um, I have met some interesting founders who are working on some interesting problems and maybe even have some great potential product, but we just couldn't get to a vulnerable place in our first conversation at all. Like I knew that they were kind of, I could tell that their fundraisers a little bit of a struggle, but they couldn't say it and they couldn't open up. And I just felt like we can't, I can't be helpful if you don't, if I can't kind of, if you're not comfortable.

letting me in and it's fine if you're not, but like that I'm not a fit to help you. Um, whereas the opposite is often true. We're all connect with the founder. Maybe we've talked about, you know, losses we've both had in our life and how that relates to starting a company or what's going on in our, with our kids right now or whatever it might be. And like that starts to build this bridge of, okay, like might we work together over the next decade on this problem? Might I be able to support you? Um, which is really what I'm trying to, to suss out and then what, what might you be able to accomplish in part with a little bit of my support?

Somil Aggarwal (16:43)
Definitely. And I think one of the biggest takeaways I had from my time in early stage investing within general technology and SaaS is the relationship between the founder, the investor. And I think it's interesting for people who focus solely on it and people who kind of let it kind of grow organically. But I definitely think from my experience, I lead on the side of you want to be very diligent about that relationship. So it's great to hear that you have that focus as well.

I really want to get into probably the more climate-oriented, climate-facing work that you do, especially I know we kind of made this more of a PM show for the beginning first part, but Climate Papa really represented what seemed like a focus and now turning point of your career into climate, and recently you finalized that inception with Step Change. So I want to start with the origin of Climate Papa.



I listened to the inception of the episode, like I mentioned, and you identified as this person who is a dad in climate, and that is a major driving factor. What has the reaction been to that attitude now 16 episodes later?

Ben (17:53)
Yeah. Um, I think it's well exceeded my expectations. You know, I, I'd say I decided, and we'll can get more back into the origin story of this, but I decided maybe 2020 that I'd like be really working on climate for at least a decade plus I didn't at that time, or even right when I left Stripe thought, you know, climate poppa would be like a thing would be the vehicle or one of the vehicles. Um, but I think the reality is, you know, in very rough sense, I've seen climate get kind of climate work almost get forked in half.

I see this kind of act, activism world of climate, which really does a lot to focus on, you know, vulnerability and climate and climate anxiety and relationship to the ecosystem. And then you have this climate tech kind of techno-optimistic climate world of which we probably spend most of our time. And. Hi, I just like to look at people more holistically, as I said, and I like honestly to try and show up more holistically and my turning point.

for working on climate was connected to my turning point from really being self-focused to, you know, my child focused on my children and to not bring that into my work in retrospect, kind of what I've been crazy, but it's actually kind of what you see, like how often do you come across folks who have dedicated themselves to this in a great way, put that front and center and bring that even just in conversations, even in podcasts I listened to, like I think the

people decided this in connection to, you know, the, the moment of parenthood, but they don't necessarily want to bring that forward. Cause maybe they think that that's going to like remove the analytical, you know, economic story in clarity, but let's be honest. Like I'm working on this because I'm concerned as a human about the fate of myself and my fellow humans, and especially my family and like that has resonated. I guess to answer your question.

people, I've been shocked how many other investors and founders and potential LPs have reached out and said, Hey, I'm a climate Papa too. I'm a climate mama. I'm a climate grandpa. I'm a climate grandma. And they're like, okay, great. Like let's go, you know, like let's, let's give you some identity to work on this problem because that's motivating, right. And it's motivating to wrap yourself into it. And now in that way.

Somil Aggarwal (20:09)
So Climate Papa really built up this sense of community, was a sense of responsibility for you in a way, manifesting this vision that you really need to be focused on not only your children and providing for them, but their future, right? And shaping that generation, their generations for them. How has your view of Climate Papa changed specifically since launching the fund? Are you still looking at it as a source of community, or are you excited about a different component of it that might be related to you raising and operating a fund?

Ben (20:41)
Yeah, when I got these things kind of both started, I thought they were kind of more separate, right? I thought like, Hey, this fund is going to feel more kind of like my core W you know, capital W work product. And I'm excited about that. And it's kind of like founding a new company, but founding a fund. And I thought climate pop was going to be this like hobby, like this podcast hobby. And it just shows how bad I am at hobbies that my hobby is like talking to people sometimes in tech about climate, which is like

also the job that I constructed for myself. So, you know, the reality is I just want to find ways to work on this and use whatever skills I have to work on it. Um, and I do think, I do think it's important to me that they're a little bit separate because I, you know, someone did ask, Hey, like, why is the fun, not just like climate pop a venture? And, and I, I think I want to be clear that like, that's me as an identity working on the problem and kind of understanding it and bringing people along for the learning ride.

The fund is, you know, pretty seriously a venture fund trying to drive extreme returns and invest in the best climate companies. I'm like, yes, those things can overlap, but I also want the fun to be able to grow and employ people potentially. And it's kind of weird to be like, Hey, who do you work for? I'm a, you know, I'm an operating partner at climate Papa. Like, I don't know, maybe that could work, but, um, it didn't, it didn't quite feel right. So.

Somil Aggarwal (21:58)
Yeah.

I mean, there's different ways to own your brand. And I think it's whatever you feel comfortable with. I think that's something that Harry Stebbings from 20VC talks about at Nausam, which is, you know, he enters the room as a realistic investor now. He's of course the founder of 20VC and one of the earliest VC podcasts. And now people still recognize him as a podcaster. They don't look at him as a genuine investor. So I think, I don't know if that was at all part of your thinking for that process, but I think that it's a pretty mature perspective from how media meets venture.

One thing I wanted to ask specifically now that you've made it easy for me to transition to the venture side, you obviously come from a great product background, but you're just an accomplished founder and investor. How did you decide on a product focused thesis and was there anything else you were debating?

Ben (22:51)
Yeah. I mean, I think the main bounds of our debate have been. So kind of size and strategy of the fund, right? Kind of how, how many companies to really go and then how deep to go. Um, and also, you know, the bounds of, of kind of hardware and deep tech and, um, cause I have this, you know, from a knowledge and learning perspective, I have a desire to learn about all of it. I want to know about ammonia and steel and cement and

carbon removal and batteries, but to have the biggest impact over the next five to 10 years on climate, which is what I'm trying to do from like a real kind of core focus, I think that's probably not the best way to deploy me. I think the best way is to deploy me is to pair up with the founders that are really using really high leverage software and fintech to get the technology that we already have that's not in the lab right now, but is actually ready to go right now out faster. Um,

And I'm just going to pause for a second. You didn't a lot of noise or no.

Somil Aggarwal (23:54)
No, I think it's fine. I mean, I hear a little bit. Alex, note this time stamp. We have a producer on the call. Alex, note this time stamp. We'll cut it out. I think it's fine. I mean, I hear it a little bit. Do you think it'll continue? What's your general sense?

Ben (24:08)
there's construction and there's now six year olds upstairs running around. So there's two issues going on, um, on brand. Um, okay.

Somil Aggarwal (24:11)
Okay. It's honestly like I feel like your voice was plenty loud above it, so I think it's fine. Yeah.

Ben (24:19)
Okay. Let me know if at any point like it's not, and we can, um, uh, yeah. Um, so, so yeah, really it's been less about the, I mean, the product focuses are all has always made sense because my whole goal with this fund is not like, I don't think of it as, Hey, what bets are we going to make? Or who, who do we pick? It's actually like, who do we partner with? Who do we support? Who do we help? And that requires that we.

are deeply supportive on that dimension. And that's going to be the cases where product is really a big spike for the company, right? That's bringing my skillset and the amazing advisors and venture partners we have who generally lean product, who have founded companies before and built amazing, amazing products before at scale. And that, um, that's just different than, Hey, we know we've scaled up a, you know, uh, lithium mining operation, right? Like, like I just.

I, there's not too much, I mean, I can help them with fundraising and some of the stress of being a founder, but like, that's not going to be nearly as deep as, Hey, you know, we're building a new FinTech product, we need to help with underwriting. Like I have a lot I can say there.

Somil Aggarwal (25:25)
Right, I've been zooming out a little bit. How do you believe product meets hardware and deep tech, if at all?

Ben (25:31)
Yeah. So it certainly meets hardware. Deep tech is a little bit more nuanced. So, um, you know, is nest a software company or hardware company is Tesla for that matter. Is it, is it a Tesla car, a software product or a hardware product? I mean, I think it's almost a false dichotomy. Like it's a product that is, has multiple components. And some of those are new battery innovations in the case of Tesla, but in case of nest, it's primarily off the shelf components packaged in a really special way with a really important software, you know, UX and innovation.

to enable a new product. And so we will and already have invested in primarily hardware companies where software is at the core of the product. So one of these investments is a company, It's Electric, that's an amazing founders that are trying to solve the carbs that you charging problem. I actually think that someone you just had on from generator, I think it was just talking about It's Electric as well. So we're sure investors there.

Somil Aggarwal (26:26)
Yeah?

Ben (26:31)
And, you know, it is a new design of a new type of L2 charger that is, you know, the best possible design for curbside charging and they're enabling that by connecting directly to the utility panels of homeowners or property owners and doing a FinTech rev share. So there we have this FinTech experience. We have this entry and acquisition channel. We've actually built up the team to have some, some perspective on how cities work with companies as well. Um, but it's going to be, you know, there's, there's real hardware that they need to deploy.

Now of the four investments we've made, that's the only one that really is, you know, a capital H hardware company. Um, deep tech is a slightly different issue. Um, and I think is probably where we generally would not lean in because again, we have our ability to both help and kind of diligence the company. Um, the exceptions would be things I think around deep tech, like I'm interested in things that might enable, you know, we're looking at products that might be helping deep tech companies get grants or financing and like that's interesting, right to unlock.

more deep tech companies. Um, but the actual diligence to say, Hey, is this battery technology better? Or is this, you know, CDR method going to be more effective? I think is a slightly different skill set.

Somil Aggarwal (27:39)
Totally. And I think anyone who is sort of in that organization or working with those products would identify with that 100%. Some of the work that I do in my role, I'm a PM recurrently at a hardware company. I think that as well really tells you that there is some parallels here. I mean, it's an engineering team. They at times use JIRA. They, you know, you go through iteration cycles, even if you're working with hardware. So there's definitely some parallels. One thing I wanted to

Double tap on. We didn't talk about this beforehand, but we've actually recorded an episode that isn't out yet with Tia from It's Electric. I've definitely, I've run into her, had some great conversations with her over the past year, year and a half maybe. I think it's really, really exciting to see how software is meeting hardware, and then from that from a product perspective, but I have heard some qualms about the idea that there are hardware companies trying to look like software companies to be more attractive to investors.

Ben (28:13)
Amazing.

Somil Aggarwal (28:34)
So I'm wondering if you come across this and how do you evaluate if a hardware company really has a necessity for a product engine or if it realistically is kind of separate.

Ben (28:50)
Yeah, that's a good question. Um, I think that.

I think we've kind of overly labeled things. I mean, to be, to be frank, like, I think, I think this, like, we've set up this Adams versus bits dichotomy. We've set up this hardware versus software dichotomy. Like let's I, like, this is back to like, I don't think that's how customers or users think about any of this. Like maybe they want to buy a car and they're trying to buy a car and the car either is like really amazing, does these things, okay, then they're trying to charge their car. They don't think about, you know,

They want to know, can they plug this thing in and how much is it going to cost and how does that compare to their gas prices? Right. And like there's, there's a whole stack of interesting value chains to achieve that vision of moving an individual customer from an IC driver that was driving to the gas station to, you know, charging at their home. And then there's a bunch of downstream questions, you know, are they enabling that charging with a vehicle to home, you know, backup resiliency, are they using the battery and some, and some.

You know, demand shift scenario, have they enabled that API? How many, you know, who's, who's orchestrating all of that? And the reality is to solve these problems, we just need to engineer better products, and I almost think we should go back to think of thinking of it a little bit more holistically, um, and realize that in some cases, it is good to specialize as a company, you know, buy you is going to be the way to get your utility data out. That's a really good specialty because that's a deep problem that we need to solve kind of across the software landscape.

And so, yeah, that's going to be an API product, but you know, if you look at it's electric or companies trying to solve kind of EV charging distribution problems, like they're probably going to look more like a combination of skill sets and guess what we can hire hardware and software engineers into one company to build those things and that's a good thing. Now, when it comes to messaging to investors, I mean, fundamentally, what are you looking for? You're looking for. Companies. They're going to solve really important problems in big markets and be able to capture, you know,

high value. And obviously when you dive into the details, like it might be harder to get high margins on something that has hardware than software. You look at it's electric and I'll, you know, I'll let Tia share on here what she shares, but you know, electricity distribution is interesting. Like, is that more like software margins, electricity margins, is that hardware margins? Like the business model is more nuanced there than, Hey, we're selling a, you know, an iPhone at the same time. Selling iPhones is a great business. Right. So like,

Somil Aggarwal (31:19)
Right.

Ben (31:20)
The best businesses in the world are, you know, companies like Apple as well. So Apple's a great business and Microsoft's a great business. I would have been happy to be a preceded investor in either of those. Right. And so. Like I think big picture over the next 50 years, we are upgrading nearly every part of human infrastructure. That's going to involve a lot of everything, finance, hardware, software. And I want to find, you know, the, the really great teams engineering the next solution there.

with the best products because I think those will win in an upgrade competition. And really essentially the ones that can help accelerate our upgrade path, because upgrading this decade is going to save us a lot of pain. Then if we wait two or three decades to make that same upgrade.



Somil Aggarwal (32:05)
I think a product manager's ability to be strategic within the organization from a lot of the product mentors that I have also gives them a great macro view of where the industries are going. And generally speaking, you have to think about, you know, how is my product going to succeed? And you can't really insulate yourself from that. So what I notice is a lot of PMs also have great visions and almost like investors on their industry and the growth of it. One thing I'm curious about is as a macro view, I'm wondering if...

when you look at industries, maybe either with a product lens or not, which industries are you bullish on, especially in how you can affect change, but perhaps overall.

Ben (32:46)
Yeah. I think I'm, I'm well, macro, I'm bullish on all of the industries because we have to be, we have to, we have to upgrade all of them. Um, I would say more micro on a timescale perspective and this, for this fund in particular, I'm really unfocused on industries where the next decade we can make a big dent and so that does naturally constrain, um, intentionally constrain the set of industries I'm looking at and I'm looking at cases where we.

You know, on one hand have the technical solution there, but we don't kind of have the systemic solution there. So a good example of this is, you know, buildings, right? We have, we have cities with large buildings and we have. Homes right. It's single family homes and we have everything in between from multifamily residences to duplexes to, you know, different scale of commercial buildings. Okay. For a long time, you know, we have building codes to affect the new supply coming on. And so great. A lot of cities, a lot of states, a lot of.

You know, countries have passed constraints on what new building can go in. There's a problem though, that, you know, just in the U S between now and 2050, you were only going to have 10% to new building stock. So let's say that then let's say right now from now forward, every new house we built was going to be, you know, completely net zero. Great. That means in 2050, 10% of the houses in the U S are net zero.

Did we solve the problem? No, we made like a little dent on it, um, at best. And so I'm deeply interested in, okay. The, all the buildings we need to upgrade the largest ones, we kind of don't necessarily need amazing new tools. It will help at, you know, on the margins, but there could be an ecosystem for financing for law, for, you know, even analyzing that, that consultants play a part there now I'm still excited if someone can make that better and capture some of the value.

But cities have been working with the largest buildings when they pass these new building performance standards to upgrade the buildings, you start going down the stack and you go from that where you can kind of have a regulatory a regulatory stick to homeowners, which have this like smorgasbord of carrots that they can't navigate and don't even know about and have to figure out what to do and you're like, wow, we're going to need a lot of tools all the way through this, right? To get the best things done as quickly as possible.

And so I'm very optimistic again, that 30 years from now, kind of every furnace will be replaced with a heat pump, but I want to see how much we can do in the next 10 years. And I think good tools for helping people through those decisions and helping people finance those decisions could make a tremendous difference.

Somil Aggarwal (35:27)
It's a really great analogy you brought up. I was talking to some people about the incentives behind the subsidies for cars, for example, and they were talking about how, frankly, are EVs even green? Not from a ideological perspective, but from the idea that the amount of carbon it takes to source those materials right now to put together the new technology of an EV, and then to roll out the EV to market for someone to buy it, versus...

you know, just maintaining their gas vehicle for 15 to 20 years, it's a real difference. And it's not something from an embedded carbon perspective, which is a lot of where the difficulty with buildings comes in. Your embedded carbon is the real area where you're not really sure about what your actual carbon difference is. So the quantifying that, making a difference on that, I think this is an area where legislation is making a big impact in both EVs and the built environment. I think you brought up like a fascinating area of climate.

Honestly, this is the worst time to cut it there, but I want to get to a couple things about your personal story as we're almost up on time. So when you started out, and especially as you, of course, took this industry by the reins, started two very fantastic companies, you by trade in all of these, when you passed your acquisitions, became a PM. And to me, product feels like a very amorphous industry. It's an industry I'm currently in.



How did you decide along the way what you wanted to do? You're a PM at Google, how you decide to found another company? You're a PM at Stripe, how do you decide to eventually found a fund? How did you navigate product?

Ben (37:02)
How do I navigate product or navigate kind of the decisions at those moments to kind of shift from product to something a little bit tangential? Both.

Somil Aggarwal (37:10)
Honestly as much as you can talk about both

Ben (37:14)
Yeah, I mean, you're absolutely right. Product isn't a more fish role. And I, I struggle with, I think there's some great folks doing great work on trying to kind of teach skills around product management, but I've never really come at it from that perspective, kind of like venture, I never woke up and was like, I'm going to be a VC and here's how, here's my, here's my plan. And some more with product. I wasn't like in college saying, Hey, how do I, how do I do that job? Um, it just is what came together from skills and kind of an interest and

an ability to be technical, which I think is really essential. Be able to work with engineers in a really technical way, work with designers, work with legal work with marketing, right. And you start, you start going like, Hey, how do I, how do I span all of this? What is the role? It's kind of somewhat organic. Um, that is this kind of, you know, Jack or Jill of all trades across, um, pushing the company forward and pushing the product forward and it turns out that's product. Um, I.

I was actually funny. I went, when, when our company was being acquired by Google, um, going to that process, they put me on the engineering interview loop, cause I was writing code for a product and one of the engineering folks like asked me, I was like, the interview is going to okay, but like not Google engineering slam dunk. Well, and he asked, he's like, Hey, what do you do at the company? I described kind of everything. Some designs and this, I made a marketing video. I did this. He's like, maybe you should do the PM loop. And that switch kind of launched my product career because the PM loop.

was a slam dunk. I like, you know, got these broad market questions and kind of how you think about strategy and how you think about prioritization. And I think it's just, um, being able to swirl around in sucking up specific knowledge, but then being able to synthesize kind of a combination of factors into a plan. Right. And I think being able to take some risk on that plan and learn and iterate through that, um, has come really somewhat intuitively to me.

And has not been the result of, you know, reading a book about product management. And then each jump from there has been, um, again, not some master plan and career path, but has been looking and saying, Hey, I, you know, Google, I really wanted to solve the big messaging problem that involves solving it across the company. I had to work with the Gmail team and the Android team and the social team and the chat team and say like, no, let's like, let's build the right product here.

After that, I was kind of ready for something smaller again. So I got to go back into like a focused role on photos. And then after that, I felt like I, my kind of learning curve was starting to come up and I really wanted to go back to try and, you know, build a company from scratch, build a company culture and met someone amazing to pair up with. And we gave that a go. So it's all been kind of like solving. I mean, ultimately I think the common theme is I don't do well if I get bored. And if I can start getting bored in a topic, like I get

pretty, I get an itch to go, to go learn again. And sometimes I can do that in a new role in a company or a new scope. Um, but I, I'm also happy to take a kind of bigger swing or bigger bet on myself to say, you know what? I'm going to kind of launch into this a little head first and see what comes out the other side, which is, which is kind of the journey I'm on. Now is just kind of coming out the other side with, with the fund.



Somil Aggarwal (40:27)
So it was this kind of call and response you felt to answer this problem, solve this solution. And it also, you brought up an interesting point about the size of the company, the scope of the problem you wanna tackle, whether you wanna be working with resources or discovering something new. I think that's a fascinating decision to be able to make given how much you've done and show you're able to succeed in both modalities, which I'm sure will pay dividends in the venture mindset as well. Specific to that, I'm curious from going from your first company to your second.

Was there anything, as I'm sure there was plenty, but what were the things that you learned from being a first-time founder that you applied at the second time that you were founded?

Ben (41:06)
Yeah, there, you know, there were pretty different companies. Um, the second company was much more kind of. Started with an ambition of being a venture scale startup. We'd raised capital from, from great folks out of the gate and start building a team and kind of decide, decide to go after a market that really had that. That headroom. Um, so in that way, there were actually, weren't a lot of similarities on, on kind of the construction of the product, but actually the internal mental game is

there's a lot of overlap and there's a lot of overlap with what I'm going through now, right? Getting something off the ground and teaching you to like put it out there and then ship and iterate and just keep building, I think like is useful in anything, anytime you're kind of building something from scratch. Learning to kind of jump in and kind of do whatever you need to do to get going, I think is something just kind of a scrappiness and a resilience that is useful no matter what you're founding. And each time I've done that, I've kind of gained confidence.

that I could do it again. And I think that gave me a lot of confidence and starting a new fund versus saying, hey, like if I wanna get into venture, the first thing I should do is get a job in venture. It says, no, like you actually can start something. It doesn't mean it's not pain-free at all. It's quite the opposite. But I knew that I could like wake up each morning and play the mental game with myself to say like, no, I can do what I need to do today to make this happen and get the satisfaction from this. The other big thing I learned



Uh, is just how to form and value really deep co-founder relationships. As I said earlier, like I'm just a people centered person and figuring out who my collaborators are and bringing people along. And, um, that's been one of the most amazing things with this fund is just like meeting someone great who wants to get involved and being like, okay, let's do it, like, you know, come spend some hours with us. Okay, great. Come spend next week with us. Like, okay, LP the fund and let's go. And, and like the momentum that comes from building.

kind of a community around that, I think, is really invigorating to me.

Somil Aggarwal (43:07)
What are some tips you can give on how to foster and build a great co-founder relationship?

Ben (43:13)
Yeah, it's, it comes back to the vulnerability point. I mean, it's really about trying to be deeply curious about. Like the person and like starting there because fundamentally, right. If you're going to be on this ride, even just two and a half years or three years, but like, let alone a decade with this person decade plus, like, you know, you're going to have a lot of bumps along the way. Everyone's going to be challenged or even in ways they don't necessarily plan for.

You know, my, with both of my co-founders, we went through a lot of life changing things together, even though both companies were not that long, you know, with my second co-founder, um, you know, both of us had kids during the time that company existed, I lost my father during that time. Um, we had the whole company journey. We, you know, went through the acquisition, we hired people, we fired people. Like there's a lot, right? A lot of life experience. And so you want it to be someone you can start to trust deeply and who trusts you deeply and.

Also, you're explicitly working on the relationship, right? Like, so we'd find carve out times that, Hey, we kind of have some debt here. Like, you know, you have tech debt. Sure. You have product debt. Sure. You have design debt. Sure. But we actually might have some co-founder relationship that here, like let's every couple of months, we usually kind of like write up our feedback for each other and sit down and process it together and like, make sure we did that work again, back to the therapy point. Like I do think, um, there's a lot to learn from, you know, couples counseling and co-founders and, and just how to build.

those rhythms and muscles and be vulnerable. I think without that, any relationship is hard, but especially one where there's so much kind of feeling at stake.

Somil Aggarwal (44:54)
It's amazing that you've been able to create the space for that within your dynamic, because I think, of course, you understand this as a founder, as anyone trying to start something, there's so many things you're doing, it's hard to find the time. And sometimes, honestly, culturally, it's hard to feel like the time to talk about things is worth it. But it's great to see that it's paid such dividends in your example, and hopefully inspires others to do the same within their, you know, either co-founder, perhaps even actual relationships, right? So...

The last thing that I'd love to talk about is probably the topic that I wish I'd left an entire episode for, which is any advice and tips you have on product market fit in climate. And that's a ginormous question. Climate is not an industry, it is affecting every industry. But perhaps different tips and tricks related to product market fit when it comes to different climate incentives. I'm wondering if there's any stories or tips or anecdotes that I have.

Ben (45:52)
Yeah, I, I don't, again, don't think it's climate specific. I think it's really kind of business model, maybe specific. Um, I think a couple of things, first of all, like when trying to understand a market and a customer, like if you have not already as a founder, like read the mom test and that should be what you do. Um, I think that that's like, should be, it's, it's more and more people are talking about this book, but I think it's like a foundational book here.

Um, which is basically making sure you learn how to be an actual kind of anthropologist and an anthropologist versus, you know, a preacher on, on your idea. So it's really about how do you learn what your customers are doing today and get really clear-eyed about that. And then increasingly get clear-eyed about what they would pay for, you know, any solution, let alone your own solution. So you really have to put aside your kind of validation seeking muscle, which is hard for founders generally, but actually especially hard, I think for product founders.

Who are used to maybe internally saying, Hey, if I pitch the best vision here, it's going to win. Um, because a lot of times it's kind of like, how well can I pitch internally? The market doesn't care. Like customers don't care about if that worked internally with your VP of product. Right? What matters is are you solving their problem and are they, is it a burning problem? And so you have to be honest about doing the problem discovery in a really, really honest way. Um, the second kind of thing to be really honest about

is the distribution model of your business. And I learned this, I think the hard way building a B2B SaaS company where we kind of couldn't quite decide or where we, I guess what's now called product led growth or where we enterprise sales. And I think we, we straddle that line and what you quickly find yourself doing is doing like enterprise sales level work with customers, but with contract sizes more like product growth, which doesn't work, right. And you kind of can fool yourself for a while that you're just doing like discovery and piloting.

But you, you have to get pretty clear on what your actual product distribution model is there because you build a company and a product ultimately around that distribution much more than many people think. And so like, yes, the product matters, but part of the product is distribution, especially for a startup that needs to like kind of break out of the gate quickly. Um, so I think those are the two big ones that I

It's not that I tend to look for, but I tend to like, just spend a lot of time with founders on and making sure that we're kind of really honest about that. Um, and that could lead to, you know, a pivot sooner rather than later if, if it's not going to work or a clarity, are you enterprise or are you product led growth and like, let's be clear about what the investments that are different. Like if you're product led, like let's be upfront about pricing and let's show people the product quickly and let them get into it if you're enterprise, like you should kind of be doing nothing, but

You know, sales, and if you don't have the right founder, like maybe you need a third co-founder who's really good at that. So, so just being really, really truly vulnerable and open about what what's needed.

Somil Aggarwal (48:47)
Wow, I feel like I probably just got a small sampling of what your portfolio companies get and I would definitely, definitely want you on my cap table. So again, I really appreciate the time you've invested into this episode, no pun intended, and for coming on, I mean, again, your journey and the things you're doing is a huge inspiration to me. So really, really appreciate you coming on and sharing your perspective. Before we wrap up, where can the audience find you?

Ben (48:57)
Thank you.

Yeah. Well, if they want to see me as a, as a dad working on climate, climate popup.com, if they're curious about the fund, um, step change.vc. Um, I guess, uh, from a network perspective, I'm probably most active these days on this front on LinkedIn. Um, so feel free to follow me there and I'll, I'll kind of share regular updates. Um, I guess the last thing I'll call out is, um, we're small and early fund and, uh, depending on when this goes live, but.

Somil Aggarwal (49:16)
Hahaha.

Ben (49:39)
We're going to do our last close in early March. So folks are excited about what we're doing and the types of companies we're talking about. Um, I welcome, uh, folks pinging me directly to see if they want to get involved in the fund. So that's, uh, yeah. Excited for everyone. We can kind of bring along for the ride.

Somil Aggarwal (49:56)
Amazing. Thanks so much.