CleanTechies Podcast

#165 Iterating Hardware, Productizing Solar Procurement, Efficiency Mindset, & More w/ Mike Hall (Anza)

March 19, 2024 Silas Mähner (CT Headhunter) & Somil Aggarwal (CT PM & Investor) Season 1 Episode 165
#165 Iterating Hardware, Productizing Solar Procurement, Efficiency Mindset, & More w/ Mike Hall (Anza)
CleanTechies Podcast
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CleanTechies Podcast
#165 Iterating Hardware, Productizing Solar Procurement, Efficiency Mindset, & More w/ Mike Hall (Anza)
Mar 19, 2024 Season 1 Episode 165
Silas Mähner (CT Headhunter) & Somil Aggarwal (CT PM & Investor)

What happens when successful CleanTech 1.0 founders step up to the plate again? Anza happens and it's magical.

Today, Somil & Silas are interviewing Mike Hall, a Co-Founder of Anza, a company they spun out of Borrego, his and his brother's first venture.

At Borrego, they developed software to streamline and improve the way they chose which solar panels to use for projects. Realizing this was a problem for everyone, they spun it out in 2023 and were off to the races.

Enjoy this episode with a legendary entrepreneur 🌱🌎

🌎 Want the full PodLetter? Go to our substack to see the written content that supplements the audio interview.  

📺 👀 Prefer to watch: subscribe on YouTube 
🗣️ Take the Listeners Survey 
📫 Get Written Summaries of Each Episode in Your Inbox |
🌐 Join the CleanTechies Slack Channel |

**2:20 The Problem with Solar Module Procurement
**7:11 Value Beyond Price in Procurement
**9:23 Working with Sellers
**12:06 Trends in Solar Product Sales
**15:38 The Journey of Starting ANZA
**22:25 Transitioning from Borrego to ANZA
**31:45 The Impact of Climate Legislation
**37:24Underutilizing Technology and Data in the Industry
**41:11 Advice for Founders in the Renewable Energy Space
**43:02 The Benefits of Being a Second-Time Founder
**44:46 The Journey to Becoming an Entrepreneur
**47:39 Takeaways

**Mike Hall | Anza
**Follow CleanTechies on LinkedIn
**@Silas & @Somil_Agg on X 

Support the Show.

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Show Notes Transcript Chapter Markers

What happens when successful CleanTech 1.0 founders step up to the plate again? Anza happens and it's magical.

Today, Somil & Silas are interviewing Mike Hall, a Co-Founder of Anza, a company they spun out of Borrego, his and his brother's first venture.

At Borrego, they developed software to streamline and improve the way they chose which solar panels to use for projects. Realizing this was a problem for everyone, they spun it out in 2023 and were off to the races.

Enjoy this episode with a legendary entrepreneur 🌱🌎

🌎 Want the full PodLetter? Go to our substack to see the written content that supplements the audio interview.  

📺 👀 Prefer to watch: subscribe on YouTube 
🗣️ Take the Listeners Survey 
📫 Get Written Summaries of Each Episode in Your Inbox |
🌐 Join the CleanTechies Slack Channel |

**2:20 The Problem with Solar Module Procurement
**7:11 Value Beyond Price in Procurement
**9:23 Working with Sellers
**12:06 Trends in Solar Product Sales
**15:38 The Journey of Starting ANZA
**22:25 Transitioning from Borrego to ANZA
**31:45 The Impact of Climate Legislation
**37:24Underutilizing Technology and Data in the Industry
**41:11 Advice for Founders in the Renewable Energy Space
**43:02 The Benefits of Being a Second-Time Founder
**44:46 The Journey to Becoming an Entrepreneur
**47:39 Takeaways

**Mike Hall | Anza
**Follow CleanTechies on LinkedIn
**@Silas & @Somil_Agg on X 

Support the Show.

Silas Mähner (00:00)
All right, welcome to the podcast. Mike, how's it going?

Mike Hall (00:04)
Going good. Thanks for having me.

Silas Mähner (00:06)
Yeah, absolutely. Super, super excited for this one. Obviously, it's really nice to get somebody who's an OG. I don't know if you like being called an OG in climate, but getting an OG on the pod. Yeah, I think a lot of people would probably call you that because you've been doing it for a while. So I guess, tell us, we'll get to how you ended up here and kind of your background, but tell us to start, what are you doing today with Anza?

Mike Hall (00:14)
I think I called it before.

Yep. So yeah, I'm the CEO of a company, CEO, co-founder of a company called ANSA. And we're focused on bringing data and technology to the renewable energy industry, and in particular, focused on solar module and energy storage procurement. So we're a data technology and services provider to help large scale buyers make better decisions and save massive amounts of time and generate extra project profit.

Silas Mähner (00:58)
So for a lot of people, I think a lot of people listening probably are familiar with the idea of procurement and things like that, but could you just kind of give a high level summary for some people who may not be highly familiar, maybe they're more on the software side, like explain what that is and the problem exactly, how it works for the solar companies and the renewable companies that you're helping.

Mike Hall (01:16)
Right. So what we see is that there are, so today there are a whole bunch of providers who are trying to sell product into this market. So just taking like one particular product, solar modules, Bloomberg recently changed the way they did their list, but up until recently there were over 40 different modular providers and they're all trying to sell product into this market. And they all products that are similar, but different enough that, um,

It matters. Those differences matter. And in the U S just the U S alone, there's over 400 buyers. And so what we're trying to do is help those buyers navigate this really large number of different products. And we're taking all the data around those products, but also not just their technical specification, specifications and pricing availability.

but also counterparty and contract risk issues. And we're taking that data that today is like opaque and unstructured and we're putting into a structured database and then building technology on top so that our customers can use that to quickly see the entire landscape of products available and then use the technology to compare them in a really holistic way, looking at differences in price but also lifetime financial value. And then...

total risk and they can make a much better, a much more informed decision. And they can do that in a fraction of the time because we've like served all this data to them. So that's really what we're doing is taking this data and making it transparent, structuring it, and then building technology on top so that you could really use it.

Silas Mähner (03:04)
And when you say there's data everywhere, it's kind of hard to find. What does that really look like? Is somebody having to call and just have a list that they know? Because in the past, if I remember correctly, I've done some procurement searches and they always wanted somebody who knew the suppliers already and had an idea of the pricing. So could you talk more about that?

Mike Hall (03:23)
Yep. Yeah. I like to, it's a great question. And I like to use an analogy. So, um, one of my favorite analogies is I think that today without ANSA doing solar procurement is kind of like how my parents, um, and I'm a little older than you, so maybe not your parents, but my parents bought airline tickets in the eighties. So back then it might be hard to imagine, but no kayak and really weren't even travel agents. And so my parents wanted to fly from San Diego to New York.

They had to call one airline at a time with a piece of paper and a pencil and say like, okay, what flights do you have from San Diego to New York? When does it leave? When does it arrive? How much does it cost? And you can imagine, you know, that's pretty time consuming and inefficient. And by the time you circle through or the cycle through, you know, half the airlines, everything's changed. Those seats might not available. So.

Believe it or not, that's actually how Solar works today, except we have email, so it's a little better than calling, but it's basically the same thing. One vendor at a time, you call, you say, I got this project, I need X number of megawatts. They go, okay, let me get back to you. Then they get back with a bunch more questions. And so they go back and forth with one vendor and it takes days to even get a single price point and they only have a limited amount, only part of the data they actually need to make a decision. So it really is this like.

these one-on-one calls and interactions, trying to get data from the salesperson at the seller. And it's really time consuming. And in the end, it's impossible for a buyer to actually get a complete picture. Our experience is more like Kayak. You go in, you see basically we have 95% of US module supplies. You basically see every option and you not only see who has what flight at what price, but the details about it.

So in kayak, it's like duration and you can filter it by when you want to leave and when you arrive. And we have similar functionality except it's solar modules and batteries we're doing.

Silas Mähner (05:23)

And I guess, you know, I think when we first talked, the initial reaction was always like, oh, okay, well, so basically this is going to help reduce the price. But could you talk about, there's other kind of components that are more important than just simply, like, getting the cheapest price, because you might have a different use case. Could you talk more about that as well?

Mike Hall (05:45)
Yeah, exactly. So our philosophy is that the best procurement decision needs to consider price, but also total cost to install, so total capex, and total revenue. And then those are just the financials. And then lastly, you also need to consider risk because the products, counterparties, and contracts come with different risk elements.

And so that was the philosophy through which we launched ANSA is that you should look at these things holistically. And so on the total lifetime value side, what we've done that we think is really useful to the industry is we've created this metric that we can use using our technology called effective dollar per watt. And what that does is it takes the cost of these different products, but it also looks at differences in efficiency.

and it calculates the lifetime differences in energy production and what that means in revenue for any particular project. And then we also, because we came from a world of actually building these projects, we have an engine that allows you to look at differences in installation costs. So, for example, a module that has more watts, you might need fewer of them to get to the same total system size, which means you might have less labor hours.

Silas Mähner (06:44)

Mike Hall (07:05)
less connectors, less conductoring. Um, one module might sit on the tracker, uh, differently than another. It might require less expensive clamps. And so we try and capture as much of those nuanced differences in our calculator as possible. And, um, when you take them all together, they really add up and those differences in value right now are kind of impossible for buyers to see because they don't have the technology to do it.

Silas Mähner (07:32)

Yeah, I mean, this is pretty clear how valuable this is to the buyers, right? But I think the biggest thing that the question that comes to my mind initially is like, how do the sellers take this? Were they pretty open about partnering with you to give you this information? Obviously, you had some of it because you were buying it yourself. We'll get into that in a bit. But how are they kind of taking to this ability to maybe in some ways, it's out of their hands to some extent, the actual sales process and negotiations that are...

Mike Hall (08:01)
Yeah, that's been one of the, I think, most pleasant surprises that we've had over the last couple of years since we launched this thing is I think we were a little bit concerned about just not knowing how the sellers were going to react to this change in paradigm. But what we found is that actually, the sellers have some of the same problems that the buyers have, which is that the market is opaque to them. So they don't like sellers today like...

especially in today's market, because it's a rough market for sellers, we're structurally oversupplied. So, they're putting out and spending a ton of time putting out a lot of bids and their close rates are, you know, they're not closing half of these and I don't think any of them is closing a third. So, most of the paper they're putting on the street, you know, is actually going to deals that they don't end up signing. So, it's kind of like wasted effort.

but they're not getting great feedback from the market on why it is they're not winning. So the sellers we found are equally hungry for data and intelligence about what's happening in the market. And so that's the way we work with sellers. Like the exchange of value is, look, give us your product data. You're going to be giving this to the market anyway. You can give it to us once, and we can sort it up 1,000 times so it's more efficient for you.

But also when you give us that data, we'll give you information intelligence back on what's happening in the market and where your product stacks up. So we won't ever give one vendor information about another, but we can tell a vendor, like, look, you're in the top quartile in these particular areas. Like you have the best price or you have issues on installation costs or you're less efficient than your competitors. And so these might be... We can also...

because we also collect more advanced data on risk, we can tell them, hey, you're getting flagged as high risk in these areas, you might wanna do these things. And that's information that they really can't get anywhere else, or it's so hard for them to get it. So that's been the trade-off, and we've had really good buy-in. We've got 95% of the supply.

Somil Aggarwal (10:10)
Definitely. I mean, if I'm a buyer and I'm probably commissioning an analyst or maybe a couple of people to do my market analysis, and you as a platform are able to tell me that straight up, I think that is a very clear value add. I am curious though for these brands that are interacting with you, do you see any trends in terms of where people are often lacking? I mean, you have a comparative view of so many different things, so you're obviously probably able to tell the macro trends of technology. So can you just speak to some

trends especially as of recent that you've seen within products that are being sold.

Mike Hall (10:45)
Yeah, yeah, so there's a lot. I mean, one good one is we're in the middle of this step change in the technology where the solar cells are going from what was the dominant technology and is still dominant today.

but it's changing, which is a monoperk technology, to kind of the next generation cell, which is the top con cell. And what we've found is that I think sellers underestimated how much of that technology is gonna be available. And also, especially in a buyer-friendly market, how strong the preference for that technology would be and what the financial value of that more efficient technology is.

So that's, I think, one example of where we've been able to kind of drive some of these sellers to say, look, you need to, I know this is a big capex investment on your end, but this is what you're missing out on by not having it. So that's a big thing also for the buyers too, is understanding, okay, how much more should I pay for this new technology? So that's one area. We're often educating sellers on specific...

contract terms or risk issues where they're at a market, you know, like it might be like, hey, certainty of future price or allocation of risk around trade issues. You know, there'll be a seller who thinks their position is very reasonable and we'll be able to tell them actually of the 36 suppliers that we have data coverage on, there's only three of you are out here and it's really hard for buyers to get over that.

Somil Aggarwal (12:29)
That's really interesting. I mean, one thing I want to go back to is the first point you said, going from monoprc to topcon solar cells. So just from sort of an outside observer, not necessarily an expert here, in simple terms, what is the difference there? Like what is the order of magnitude improvement?

Mike Hall (12:48)
Right. Yeah. So what we find is that on a value basis, and it depends, this is why it's actually important to have the technology because the difference in value actually depends on the specific characteristics of your project. So for a utility scale project, those projects might have revenue streams that are like three, four, five...

prices are going up six cents a kilowatt hour. But there are some community solar or distributed generation projects that might have double that. And so if you're in one of those higher revenue projects, you're actually willing to pay a whole lot more for more efficient technology because every unit of energy you generate is worth twice as much. So in those cases, we do see that like 15, 20% additional value by using this technology.

For utility scales, it's significantly lower, but it's really meaningful.

Somil Aggarwal (13:50)
I think we could probably go on this topic for quite a while. I know some companies, when they're really mature, end up spinning off their own venture arms based on the things we're learning. I feel like this is a place where you can start really investing and deploying some side capital, aligning credit into different innovations that you're seeing that are hitting the market. But before we make a whole other episode off of that, I want to get into the journey of how you actually started the company.

You've been able to get off the ground and get access to both buyers and suppliers to create a marketplace of procurement in very short time. So how did Anza start and where did the idea for the technology really come from?

Mike Hall (14:29)
Yeah, so ANZ actually started as a business line within the company that I was previously CEO of and co-founded with my brother and friend more than 20 years ago called Borrego.

So that was the origin. We were a business line, eventually became our own P and L. Um, and we started it because we saw that within our existing business, and we were a customer, we were buying this, we were buying solar modules and batteries at scale. Um, we had developed some algorithms around the decision making and we're starting to accumulate a data set. And we saw that the industry at large really can benefit.

means that we were doing some value-based comparisons and employing a philosophy that we thought was better than the status quo. But we did see others doing it and we didn't understand why. And then we started to realize, okay, it's a data and technology problem. And so that was kind of the idea was, hey, we've actually got some know-how here. We've over 20 years.

develop a philosophy and some algorithms. And if we can take this from a mid-tech to a high-tech environment, take it from spreadsheets into the cloud, then we can help the whole industry. So that's where it started. We ultimately spun it out and did probably what you call a management buyout.

Somil Aggarwal (16:05)

Mike Hall (16:05)
with financing some from private equity backers in May of 2023. And we became an independent company and I left Borrego to run ANSA full-time.

Somil Aggarwal (16:19)
Very cool. Yeah, it's a big, also definitely a big transition for you. So basically you saw that you had to do this procurement of different types of materials and things at a large scale. You were developing being some in-house resources to analyze of you. You said, hey, there's a bunch of other companies that'll likely go through this process itself. A, this should be out there in the market, but B, there's an opportunity to capitalize on that. Is that pretty fair?

Mike Hall (16:42)
Exactly right. Yeah, exactly right. Exactly right. Yeah. And, you know, always like, it was fun because Brego was an amazing journey and a great company and I'm really proud of it. But we weren't trying to transform the industry. We were trying to lead but not transform.

Somil Aggarwal (16:45)
Okay, very cool.

Mike Hall (17:06)
spending 20 years in the industry and seeing it go from, when we started, it was one megawatt per year in annual installations, like a $10 million market to 35,000 megawatts. When we saw that, hey, there's an opportunity to change the whole industry and move every project forward faster, we really jumped on it.

Silas Mähner (17:30)
What I want to understand, I think this really kind of just jumps out to me is you guys went and developed, you said internal algorithms to figure these things out, right? You're a project developer, essentially. You're doing these things and nobody, like most people wouldn't do that. So how did you have this mindset to constantly be looking for that improvement? And I'd be curious to attach to that if you have any advice to other people in the space who are maybe in a conventional space of some sort.

maybe kind of thinking with that technology mindset to, is there another solution here? But can you just walk us through that and how you did that? Because that seems very different than most people.

Mike Hall (18:05)
The thing that I think was different about Borrego and that they were from almost every other company, maybe not every other company.

but almost every other company was that within the Borrego and Bra that we had built from scratch an engineering construction business. So we were actually designing and building these systems, a greenfield development business. So we were actually going out, finding land, putting deposits down in our connection, and we did operation and maintenance. And what it did was it gave us this like full life cycle view of project value in a way that I think very few others have.

And so what we had the ability to do, because up until pretty recently, actually, we were doing that full project life cycle all within Borrego is we could see like, hey, if we make this different module decision here, it's going to affect the build costs, it's going to affect the lifetime energy production. And that actually affects our ultimate profitability on the project.

And we had that full view in a way that I think very few others. So I think we had that benefit and that is probably what got us to this philosophy and these algorithms. Whereas most of our competitors and also our customers, um, were in one or two of those lanes. So, um, most of our, um, customers were IPPs who were in the business of owning, but you know, the, the construction, the, um,

used to be the procurement, a lot of that was outsourced. Our competitors, some of them might be design build, but none of them were developing. So we didn't have a lot of peers who were doing all those things. And there weren't problems with doing all those things, actually, I don't wanna say it was like, it was like absolutely the...

Silas Mähner (19:49)

Mike Hall (20:04)
like perfect business model, but there was a learning that came from all those things that really important what Ante is today.

Silas Mähner (20:12)
And so I guess I understand that you had all this different perspective, but the thing I'm so trying to understand is, did you always have this mindset of just seeking to become the best and to kind of optimize everything, or was it stemming from your desire to be the market leader that you were just constantly in search of new ways to improve? Because most people would just be like, all right, get faster at getting the quotes, right? They wouldn't come up with a software to solve it, right?

Mike Hall (20:39)
Yeah, that's a really good question that I'm not sure I thought about, but I think optimization was in our DNA, like all along. I'm actually a process engineer by training. And so, you know, this idea of process optimization, you know, I think that was there from the start and that was really in Borrego's DNA.

Silas Mähner (20:50)
There it is.

Mike Hall (21:00)
And then we got turned on, our then VP of engineering, Ryan Berbidge, turned me on to Lean and Toyota production system in probably 2012, 2013 timeframe. And that's also about optimization, minimization of waste, repeatable processes. And so that became part of our DNA in the last 10 years we operated.

That's probably where it comes from. Um, but yeah, I hadn't thought about that. Yeah.

Silas Mähner (21:33)
I really like that. My observation from having worked as a recruiter in renewable space was that despite being kind of a climate or clean tech companies, there's a lot of times where they're not kind of focused on the circularity aspects or just being more efficient necessarily. It's in some ways just a mirror image of oil and gas. We're project developing and we're making a lot of money doing these things because it's good projects, et cetera.

but then there's just not the mindset of efficiency. So I really appreciate that. I think it's important to note. I guess I'm really curious about how did going from managing Morago to running a solar business, like what was the biggest mindset change that you, or to a software business, what was the biggest mindset change that you had to kind of go through in making that transition?

Mike Hall (22:24)
Yeah, it's totally different in a lot of ways. I mean, the first, like just kind of like the most obvious one is Borrego at its peak was almost 500 people and when we spun, Ames Atta was 35 people. So the job of a CEO really changes.

When from a 500 person, it was like almost a mini conglomerate at its peak with all these different P&Ls where I'm kind of a CEO whose job it is to like coach and mentor effectively other, they didn't have CEO titles, but essentially other CEO titles, these general managers of these businesses. So the job gets pretty meta when you get to that size. I had a mentor once tell me like, once you get past 150, 200 people, the entire job is HR. And I think that that's...

there's definitely a truth to that. And then going down to 35 people and you have to get into the work. Like I was like opening our bank account, you know, myself and, um, uh, like, oh, we need a mailing address. Okay. I got to work with somebody to get a mailing address. And so it was actually fun to get back to that startup mode again. But that's one thing. The other thing is just the, the culture of a technology company has to be different. So in, in Borrego's businesses. We.

They're really, we never really had a path to building any kind of long-term competitive moat because we are a services business, right? And so what that means, there's nothing wrong being a services business, but what that means is you're really optimizing for near-term margins and profits. I mean, you want to have good customer relationships, long-term relationships, that's all true, but it's very different than the business we are today where

You know, we're building up this source of data that I think is going to benefit us over the long term and give us an advantage in the market over the long term. And so like, why do software companies sometimes lose money for a long time? Well, because they're building competitive mode, whether they build it through technology or network effects, there's, there's an, that, that those losses are an investment in some future, future profits. And.

There's much less of that you do in the services business structure.

Somil Aggarwal (24:44)

I'm curious, one of the biggest tropes about first time entrepreneurs, early stage entrepreneurs, is that the CEO ends up taking on too much responsibility. And that can be a source of burnout and a source of short-mindedness. I wonder as, like you said, getting to a point where you're just managing people, right? If you've felt as though it's much easier for you to delegate your responsibilities, and how going to a smaller team has kind of changed the way that you lead.

Mike Hall (25:18)
Yeah, I mean, I don't know that it's it had definitely hasn't changed my overall leadership philosophy, I think, or how I show up. There's I will say in a startup environment.

Um, especially a company like ANSA where we're trying to do really big things. I have to be a more, I, I try to be a more vocal cheerleader and evangelist for the changes that we're, we're trying to enact. Um, Borrego was less about you just see transformation. So that's different. Um, but also like I've been doing this for 20 years. And so, and then I, we at ANSA are really lucky. Like.

We got an executive team, we inherited an executive team in that spin out and it was a team that I'd worked with before. And so there's a trust and a common understanding that takes a lot of time to build if you're really doing a startup with somebody, even if it's a friend, but it's somebody you haven't worked with for years. So, so that really helps. Um, but, um, yeah, I mean, I think in a startup, usually you've got, you might have a CEO and a couple of co-founders and everybody's got to take on.

Somil Aggarwal (26:20)

Mike Hall (26:32)
something individually. Some CEOs are like, I'm the chief salesperson. Some are like, I'm the chief technologist. I'm the product person, whatever. There's probably really no avoiding that when you're small. It's just having that right balance of, okay, I may be the closer, but I need to be empowering.

you know, my salespeople that actually do their jobs, you know, and not like, uh, not making it so that you can't sell anything without me, you know?

Somil Aggarwal (27:09)
Yeah. So in your experience then, A, you inherited, I think the biggest part you mentioned was that it's a team that's worked together, right? So you can probably liken this to co-founders that have done things a second time, second time founders to a degree, which frankly you guys are, in the way that you look at it. So I think that's definitely something that's already been looked at as a strength, but at the scale and size and also historical relevance here for where the industry was and what...

what 2002 to where it is now. Like being able to have had a pulse on that is phenomenal. One thing, a macro question that I like to pose to you is obviously government has gotten more involved over time, right, and I think this is something that as an entrepreneur we've had questions going back and forth between how important is it for your team to be oriented around policy early on. Just for the audience who are springing on this on you live, so no worries if this is a question that

it has to have some conversation around it. But I'm honestly really curious, especially from where you started and where you are now, how much is policy considered in terms of your management team and your day-to-day conversations?

Mike Hall (28:20)
Yeah, it's a really interesting question. So at Borrego, we had huge investments in not just following and tracking, but actually trying to influence policy. We had a significant, we had a dedicated policy team. I actually personally served on the board of the industry association for many years as an elected board member and then a paid board member.

did all that, did lobbying, we actually helped write bills and would try and get them passed. So that was a big investment for us. I don't think though, and I think in certain businesses, actually, I think if you're a solar developer, you've really got to be plugged in and you probably want to be influencing the policy in the particular niche markets you're most active in. That was when we were a developer. That's

It was a huge part of what we did. Um, now for us though, um, we're just trying to service those developers. And so as long as there's a healthy market for solar, our offering is flexible enough that we'll help them wherever, whenever, and however they need it. So we actually today are not, I mean, we're a member of the industrial civilization, but it's not a big investment for us. So I think it depends on who you are and what you're doing.

how much you need to be involved and whether you need to track, track lightly, track heavily, or try and influence. That's the most expensive is influencing. Just depends on who you are and what you're doing. For us, it's like track lightly, I would say.

Somil Aggarwal (29:56)
Right. So being productized in your new version, you're one step removed, whereas before you weren't or you were sort of in the midst of it and you had a whole policy team oriented around working at that angle. So especially, I would say you left around August of 2023, if I remember correctly. At the time, that was already when a lot of this climate momentum, climate legislation momentum had a hit. So you actually...

Mike Hall (30:05)
Okay. So, let's go ahead and get started. Okay. So, let's go ahead and get started. Okay. So, let's go ahead and get started. Okay. So, let's go ahead and get started. Okay. So, let's go ahead and get started. Okay. So, let's go ahead and get started. Okay. So, let's go ahead and get started. Okay. So, let's go ahead and get started. Okay. So, let's go ahead and get started. Okay. So, let's go ahead and get started. Okay. So, let's go ahead and get started. Okay. So, let's go ahead and get started. Okay. So, let's go ahead and get started. Okay. So, let's go ahead and get started.

Somil Aggarwal (30:24)
likely, and I would love to hear about this, got to see the impact at a corporate level, at a big corporate level, of what all this legislation was doing. We often talk with startups who see the impact and they're benefited by some of the lower level incentives, but I'm curious, what was climate legislation and the IRA and all of those things like that, what did all of that mean to you at Borrego?

Mike Hall (30:47)
So there's, and actually I realized there's one thing I should have said, because you were asking about policy, so I was thinking about legislation. What actually is critically important to us is regulations and trade and some of that.

comes from regs. So like we have a lot of trade issues that we have to track heavily and do some influence on. But like the IRA, for example, we can track that lightly. I mean, the IRA just brought a huge amount of attention and capital and new entrants into the market. That was the first thing it did. And that's like across the supply chain. I mean, there's been hundreds of announcements about domestic manufacturing, but even on the other end.

of the market in the downstream part of the market. There are more companies developing and owning and operating plants than ever before. And I think the promise of the IRA actually, I think the IRA has delivered some, but not as much as we wanted to in terms of actual real results. But the promise of the IRA is so massive that it's brought this new amount of attention, but new players and new capital into the market. So that's...

That's probably the biggest thing we've seen. Yeah, I mean, I'll stop there and see, yeah.

Somil Aggarwal (32:06)
Yeah, I might not belabor the point because again, probably could go on a whole other tangent about this, but I think it's so super interesting to see how it has, at least if not fully realized on the demand side, it definitely influences supply side in terms of what's available, what's out there, how much is being generated and operated. And frankly, it sounds like that probably is a huge benefit to Anza to see so many more players on the market. So that does sound really, really impressive.

Mike Hall (32:33)
It is a big benefit for us. That's a lot of what we're doing is trying to... We do work with companies that have been doing it for 10 plus years, but they're also like...

new companies coming into the market that haven't had time to build a five-person procurement team. And we can empower them to do a lot more with the resources they have. So yeah, I think that's all true. I mean, one thing I just will say about the IRA is it's a lot of potential money, but money and capital, and actually I should back up, not money and capital, the...

the cost of solar and the cost and quickly it's becoming the cost of storage are actually no longer the bottlenecks to adoption. And I think the IRA was designed to say like, hey, if we lower the cost through these incentives, then we'll get more adoption. And that's somewhat true, but now all these other bottlenecks are emerging. Some of them are supply chain, but a lot of them have to do with interconnection, congestion,

and local permitting. And so now these other problems, besides how much does it cost, are emerging as a bottlenecks. And you can throw as much incentive or ITC, investment tax credit, at those problems as you want. And it doesn't help unless you're actually attacking those bottlenecks. Just you can keep making it cheaper, but if you can't interconnect anything, doesn't matter.

Silas Mähner (34:07)
Hmm. That is interesting. It's almost like it almost makes the problem worse. I mean, I used to specifically recruit in interconnection space and those people, I still keep up with a few of them pretty closely. It doesn't seem to be getting much better, right? There's going to have to be some kind of way to untie this knot and restart. But I guess that's probably a topic for another conversation. On the topic of having been in this space

Mike Hall (34:27)

Silas Mähner (34:37)
and seeing a bunch of new people come in. What are the big pieces of advice that you would offer from your exposure and experience to a lot of these new players? Not necessarily on the solar developer side of things or the renewable project developer side of things, but more so on the technology solutions, whether it's hardware or software. Are there any kind of big trends where you see, hey, we're headed in this direction, and I just fundamentally don't think that makes sense. Any cautionary tales you would offer?

Mike Hall (35:04)
Oh yeah, that's a good question on the technology. I mean, first of all, I think that the industry...

is really under utilizing technology and data. I mean, we're, I think we're shockingly behind there. And I think there's the opportunity to use it in different ways. I mean, I think what we're doing, we haven't seen anyone else do before, which is trying to structure this data and put technology on top of it in order to enable better decisions in module and storage procurement.

But I think there are other areas too. I'd like to see people using data and technology to attack the interconnection problem. I mean, there's, why does it take two years to do a study? I mean, given what technology can do, it just seems impossibly wrong. So I'd like to see more companies that are attacking.

some of the less obvious but actually more impactful problems we have, some of these bottlenecks that the investment tax credit can't solve. And I don't think I see enough of that. I see it's focused kind of on the problems of yesterday and not necessarily the problems of tomorrow.

Silas Mähner (36:22)
Aside from the interconnection issue, and by the way, if you know any companies working on that, I always be curious. Maybe you want to tell me offline. I've actually not seen companies trying to solve that substantially. But aside from that, what are the other areas where you'd like to see tech adopted?

Mike Hall (36:37)
Yeah, that's a good question. I think that we could do more generally on transactions. We're definitely doing some of this, but I think there are areas to do it in other transactions. I've done some M&A work through Beraga before.

And as an example, like when you're, I will say actually that's still not efficient from a contracting perspective, but when you're doing a contract, all the attorneys have a database of all the other M&A transactions and they can tell you like, okay, this is the standard for escrow. You know, this is the cap and basket, uh, you know, contracts, you know, 33% of similar contracts have these types of terms. And so.

There's a common understanding of what market is. You still might argue about the deal, but these is a common understanding of market. And, uh, there's very little standardization here. And I think technology and data can help that. Um, interconnection is certainly a big one. Um, I am not the world expert on it, but there is going to be, um, there is already, there are already a lot of players doing it, so I think there's going to continue to be more with regards to, um,

revenue optimization, especially on storage, where you're dealing with lots of different revenue streams. That's a hot area. Those are some of the ones that come to mind.

Silas Mähner (38:07)
Okay, very cool. And something, this may be, I don't know, this may sound like a silly question to some extent, but you obviously built a very successful company with Borrego, it's a very highly respected company in this space, and now you're doing kind of the second huge venture, I don't know if you have maybe other ventures that you don't list on your background, but is, there's this idea that building something for the first time is extremely difficult, and the second time you're doing it, obviously it is a spin out, so there may be some kind of things that were set in place, like the executive team, but...

Is it broadly speaking much easier doing it the second time than the first time? Because a lot of people talk about it.

Mike Hall (38:42)
So much easier. It's so much easier. Yeah. I mean, it's easier for a lot of reasons. First of all, it's easier to raise money. It was so hard to raise money at Borrego. And it was a lot easier to raise money to do the Anza spin out. And part of it was probably because we knew how to talk to investors, but also some of it was just the credibility that comes with having done something, had one big success.

And also we did it over a long period of time. So it doesn't look like we were lucky. It looks like we worked on it really hard. So that part's easier, but also just the pattern recognition. I mean when you're starting something for the first time and you know, something's going wrong, but it's the first time you're seeing a problem like that. The second time around,

you know, especially for myself and my brother who I co-founded both Borrego and Anza with, you know, we've been doing this 20 years, almost every problem at Anza looks similar to some problem that we had at Borrego. Even though we're doing technology and data now, we were doing services before, like problems look similar. And so you can like kind of more confident and be like, oh, okay. I understand that one.

These are the plays that we've run in the past to address it. They did or didn't work. So let's do or not do those again. It's so much easier.

Somil Aggarwal (40:21)
I'm curious, you talked about there being pattern recognition. I think pattern recognition is exactly what we are trying to get people to notice about being a second time founder or being an industry veteran. I think that's often why people come into climate is because they've noticed things that they think they can capitalize on. So one thing we'd love to do on this show is get people to talk about things that they could say to other founders and other like basically operators in the space to help them on their journey. I'm curious.

Are there anythings about the way that you've gone about your journey and the things you've learned and seen, especially related to pattern recognition that you could give as advice to other founders?

Mike Hall (41:00)
Sure. I mean, I think some of this is probably, you know, it's all stuff that's out there. But like one of my favorite quotes.

is most companies don't die of starvation, they die of indigestion. And that's a way of saying, don't try and do too much. It's fine if you decide that you're going to make a big pivot, but especially when you're starting, there are so many shiny objects that you can chase after. And you only have to chase after a few of those for it to be far too many.

And for you to start to suffer from indigestion. So like it ends up, for example, we do solar modules and batteries. It is more than once a week where somebody inside the company or outside of the company, our customers is like, can you please do racking? Could you please do inverters? You know, uh, we're having problems with transformers. Can you help us with that? And the answer is yeah, we could do that.

It's too much, you know? Like there's so much for us to do within the existing products we have. And so that discipline of being like, yeah, that is a great idea. But unless I'm willing to actually pivot the business to that, because it's a better idea than what I'm doing, it should wait until we really do have the organizational bandwidth to take it on. So that's one of the pieces of advice I give to entrepreneurs all the time, and that we have that conversation we have internally.

I actually had it with my board yesterday. You know, like that's a recurring topic. Yeah.

Somil Aggarwal (42:35)

Yeah, and I feel like one thing I do notice, especially in my own journey as I evaluate opportunities on the venture side, it's sort of like this understanding of the overall market. Like, sometimes it's easier once you've been in an industry for so long to be like, okay, like, yes, I should say yes to this and no to this because I actually kind of have a good sense of what that industry is, right? Do you think is that where it comes from or is it something else?

Mike Hall (43:01)
Oh, absolutely. Starting a second business in the solar industry is much easier than if we tried to start in wind or geothermal or something outside of power. It's so much easier. There is this knowledge of how things work, who does what, and you kind of forget you have it until...

we're hiring people from outside the industry and I'm like, oh, okay, wait, no, I got to get on the whiteboard and explain how the, you know, the, the power industry works. Like it's complicated, you know? So yeah, it's totally there. I guess that's, that's something I, you said that I think is right on. You're starting a business. Like I wouldn't come out from outside of the solar industry and start a solar startup without having, I'd want to work in it first.

you know, or really spend years studying it. I don't even know if you can study it. I think you got to work in it. I don't know that I would invest in a solar entrepreneur who came from outside of the industry, or I'd be really careful. Be really careful, I guess I would say, yeah.

Silas Mähner (44:05)
It's super, super underrated, but the people who understand the market and where they're going usually have a higher tendency to win, but also the companies who don't have an understanding of the market, they usually want to hire, at least very early on, somebody who does, right? Especially in the sales side. So I think it's super interesting. One of the last big questions I really want to get to, and I've been kind of fighting my time to get to this, but it seems as though you just kind of have this in your DNA, this entrepreneur kind of, it's how you are, it's how you work. Like how did

Mike Hall (44:20)

Silas Mähner (44:35)
this originally come to be? What was the early influences that you wanted to be, build your own company, and can you just talk about that a little bit? We'd love to kind of rewind time a little bit.

Mike Hall (44:45)
Yeah, it's funny. The truth is, I did not think I was going to be an entrepreneur and I did not think of myself as an entrepreneur. My brother is an entrepreneur from the time he was six. He liked to tell about how he would gather pine cones and sell them to the neighbors. He was just always in business. He always had these little businesses and it was just obvious he was always going to be an entrepreneur. He actually was the original founder of Borrego.

six months a year before Chris and I joined. But I always thought of him as the entrepreneur, I was going to be an engineer. And then the truth is, I got the bug and realized that this is what I wanted to do when I had a break from my engineering job and I just started kind of volunteering, working with him. And I was like, no, this is it. Instead of building capital equipment for the semiconductor industry, which is what I do, I want to build a business.

Like this is super fun. Um, and, uh, yeah, I mean, I, I just got the bug and I can't imagine doing anything else, but really it was only after joining up with him, this thing that he had started and just seeing like how much more fun it is to have, you know, all this creative flexibility, um,

that I really got the bug. Yeah, I won't lie and say I had it as a young age because I didn't. You know, I got it later. Yeah.

Silas Mähner (46:07)

Yeah. Well, that's okay. I appreciate the honesty. I think it's just also the thing I take away from that is that there are probably a lot of people who could be incredible entrepreneurs, but they also need to have some exposure to it, right? I'm pretty passionate about that having come from the middle of nowhere where it's not startup land out here in Northern Wisconsin. But anyways, I really appreciate you coming on. This has been, I think, a really, really great episode. So many great insights. Any final thoughts you want to leave us with and where people can reach you?

Mike Hall (46:41)
Yeah, so you can find us at anza You can reach out to me on LinkedIn. I'm not that hard to find, but yeah, happy to talk to people. We're hiring, so if you're interested in the company, we've got a lot of open racks, so we're definitely recruiting. And yeah, if you're interested either because you're in the market on the buy side or the sell side, please reach out to us.

Silas Mähner (47:08)
Awesome. This has been great. Yeah. Let's probably do this again at some point. We need to go through the background of how Borrego started, but that's another time. So thanks so much, Mike.

Somil Aggarwal (47:08)
It's a good thing to shout out.

Mike Hall (47:19)
Fun story. Yeah, absolutely. Thank you.

The Problem with Solar Module Procurement
Value Beyond Price in Procurement
Working with Sellers
Trends in Solar Product Sales
The Journey of Starting ANZA
Transitioning from Borrego to ANZA
The Impact of Climate Legislation
Underutilizing Technology and Data in the Industry
Advice for Founders in the Renewable Energy Space
The Benefits of Being a Second-Time Founder
The Journey to Becoming an Entrepreneur