Venture Everywhere Podcast: Mishal "Mish" Thadani with Vir Kashyap
Vir Kashyap, LP in Everywhere Ventures and The Fund India, catches up with Mishal Thadani, Co-Founder and CEO of Rhizome, on Episode 21: Off the Grid.
Listen on Apple, Spotify, Pandora!
In episode 21 of Venture Everywhere, Vir Kashyap, GP of The Fund India as part of Everywhere VC, chats with Mishal “Mish” Thadani, co-founder and CEO of Rhizome. Rhizome offers advanced climate risk mitigation for communities and businesses against extreme weather events. From his transition from wind and solar projects to leading his own company, Mishal discussed the challenges and opportunities within the clean energy sector. He elaborates on the complexities that utility companies encounter in justifying investments to stakeholders and how Rhizome’s innovations are paving the way to a sustainable future.
In this episode, you will hear:
Mishal’s longstanding interest in the environment and passion for changing the energy sector toward a more resilient future.
The need for utility companies to invest in infrastructure and technologies that will mitigate the effects of extreme weather events, particularly power outages.
Rhizome’s use of decision intelligence and AI to quantify resilience and help utilities justify investments.
The role that regulatory bodies play in shaping grid resilience, and the collaborative nature of natural monopolies in distinct regions.
Fear of missing out (FOMO) as a driving force in seizing opportunities and building strong relationships with potential customers.
If you liked this episode, please give us a rating wherever you found us. To learn more about our work, visit Everywhere.vc and subscribe to our Founders Everywhere Substack. You can also follow us on LinkedIn and Twitter for regular updates and news.
FULL TRANSCRIPT
00:00:00 Jenny: Hi and welcome to the Everywhere Podcast. We're a global community of founders and operators who've come together to support the next generation of builders, so the premise of the podcast is just that: founders interviewing other founders about the trials and tribulations of building a company. Hope you enjoy the episode.
00:00:20 Vir: This is my second Everywhere Venture podcast, and I'm the GP of The Fund India, part of Everywhere Ventures, where we invest mostly in companies that have a link to India in some shape or form. We are now on our ninth investment from this fund. And so we've had the fortune of working with some amazing entrepreneurs.
00:00:41 Vir: And prior to The Fund, I co-founded a company in India, which became the largest blue collar job hiring platform in India at the time called Babajob. And then worked at Indeed and Recruit Holdings for several years after that, and now broken off to focus on investing full-time.
00:00:56 Vir: And so, in that context is where I met Mishal and learned about the company he's starting, Rhizome Data, and we're very excited to join him on the journey. And so, I let Mishal give a little background on himself to start things off.
00:01:09 Mishal: Sure thing. Thanks, Vir. It's great to be here to have an extension of our last conversation. I'm excited about it. My name is Mishal Thadani. I go by Mish and I'm the CEO of Rhizome, where we're helping electric utilities navigate their futures by helping them understand the impacts of extreme weather events on their systems and how to best plan their investments to help mitigate those future extreme weather conditions.
00:01:34 Mishal: In some cases that are going to be increasing in frequency and severity, in other cases, brand new climate hazards that certain utilities in their geographies haven't seen before. I've spent my entire career in the clean energy sector developing utility scale wind and solar projects, also developing solar projects at the residential, commercial, and community scale, and realized that there's really a major challenge, not only in carbon mitigation, but in climate adaptation within the energy sector.
00:02:02 Mishal: And given a shift in focus on digital tools, found a huge applicability of decision intelligence backed by statistical models and artificial intelligence that can be applied to help adapt the energy systems to make sure that they're more future-proof.
00:02:18 Vir: Great. I'd love to just take one step further and just learn about how you even got yourself into this space in the first place. It would be great for the listeners to learn about that journey.
00:02:30 Mishal: Yeah, like many entrepreneurs, it tends to be a curvy path that takes us to starting a company in a space where you start to develop a deep expertise. But I've always -- really since college -- have been deeply involved in the energy sector, going to school at Rice University in Houston, Texas, where it’s known as the energy capital of the world, still very nascent at the time that I was graduating in the area of clean energy.
00:02:53 Mishal: And I knew, given an interest in environment, I studied atmospheric science in college, moving into this new – at the time it was called alternative energy, but today it's mainstream energy, where new net zero energy sources would be important for the future of the grid, as well as now that we're seeing the decarbonization of our transportation as well.
00:03:16 Mishal: But I wanted to be right in the middle of that entire economic shift. So I started my career, as I mentioned, developing wind farms. And then I moved because I thought utility scale development was a little bit too slow. It takes four or five years to develop those large scale projects. I joined the startup world where I stayed since then.
00:03:36 Mishal: I worked for a small company called Astrum Solar, developing residential projects growing really rapidly at the time, and then started to see the applicability of new business models that really helped accelerate more of the distributed generation market.
00:03:51 Mishal: So, changing policy and regulatory that governs the utility landscape, and these are rules that have been governing the utility industry for about 100 years, is where I realized that you can open up new business models and markets for new energy technologies that previously wouldn't have access to those markets. And that's really how solar has proliferated today.
00:04:14 Mishal: I recognize the ability to leverage these rules and policies for other types of technologies in the electric utility sector. So after starting my first company, which was a community solar company, which we built some projects, but didn't hit a whole lot of scale as the market even back seven, eight years ago, wasn't that big for community solar, wasn't growing rapidly.
00:04:34 Mishal: But one of the things that I knew where I could apply a skill set in shifting markets was by learning very deeply the utility business model and how it's governed at the state regulatory level and working with technology companies to shift the rules that would cause those technology companies to flourish.
00:04:52 Mishal: Having an interest in the digital space, I joined a company called Urbint. They were post-series A and we were working at the nexus of infrastructure and external risks on that infrastructure. Gained a ton of exposure into the digital space and AI because I have an engineering background, I think I picked it up relatively quickly, but it's still a massive space that I had to do a lot of learning about.
00:05:13 Mishal: We found some success in scaling the market and influencing some of the rules that regulate those markets to make sure that AI was adequately considered when utilities were going through various transformations. And then finally recognizing that extreme weather events have gotten to a place where it's existential for electric utilities. Probably next year, we may see the second bankruptcy in the electric utility sector in five years.
00:05:36 Mishal: And so just to cap this off is, saw a major need as utilities are spending billions of additional dollars in capital of investments that really are just a bunch of traditional, old, boring stuff that makes the grid perform better, especially during extreme weather events.
00:05:52 Mishal: So it's things like doing vegetation management, which is essentially tree trimming along utility line corridors, or reinforcing poles and wires, or replacing the aging poles, the old transformers or reconductoring a line. So putting in new cables that are less likely to fail, even if they do have some contact with vegetation or suffer some sort of external weather condition.
00:06:16 Mishal: And what I recognize that there's a major ability to do is to provide a platform that helps precisely identify where these investments are needed the most. And that's kind of where Rhizome was born.
00:06:26 Vir: Great. It seems like the utility bankruptcy, I think when we started chatting, I think the Maui incident was unraveling right then. And it was really so apparent the need too, it was like the need of the moment. And I think bringing together a lot of the relevant technologies, you know, AI, climate, a lot of stuff that's needed to solve this problem. And so touching on your point about the market being big enough, how do you know when's the right time the market is ready for something disruptive?
00:06:58 Mishal: As a market analyst, you have to look at various indicators and try to predict the future. And for me, because I was already in the space where I was working with utilities on a day-to-day basis, and then probably more important to understanding the future trends of the market, I was interacting with regulators on a day-to-day basis.
00:07:17 Mishal: So these regulators, they exist at a state level and they regulate the utilities within each state. And I would go to regional conferences, in some cases, national conferences, where all of these regulators would get together and talk about the hot button issues at the time.
00:07:31 Mishal: And what occurred to me is that no matter which region I was going to, whether it was the New England, mid-Atlantic, mid-American was the Central US, and then lastly is the Western region where the conference is where I decided to eventually start Rhizome is where we started talking about the need for grid resilience.
00:07:52 Mishal: But I was hearing this from every single utility commissioner in every single region of the country. “We need to have a better understanding of how extreme weather events are going to cause catastrophic incidents, multi-day blackouts where people who are on life support, hospitals or even critical infrastructure that fail and cause actual human life consequences because we're so dependent on electric utility infrastructure.”
00:08:18 Mishal: And the fact that it's probably a top two or three hot button issue for regulators that are concerned about how are utilities going to really adapt to those increasing conditions. So the fact that I kept on hearing that over and over again in every single part of the country, and the fact that there aren't a lot of technology companies that are really tackling this from a platform perspective.
00:08:43 Mishal: And when I say platform perspective, it is bringing to bear a comprehensive solution that helps you evaluate a set of problems and moves a utility to create a new chain of actions that results in a better future. So there are other types of platform technology companies out there.
00:09:00 Mishal: I'll give a shout out to my good friend, Apoorv at WeaveGrid, where they're helping utilities manage electric vehicle load on distribution systems. So that during those peak load events, you can actually use electric vehicles as a resource by shifting load or by doing vehicle to grid type of engagements. Those types of platforms are how we're gonna get to getting to a decarbonized and resilient electric future.
00:09:23 Mishal: And that's one of the things that I recognize was the potential for a platform to really target this macro level issue of climate resilience and extreme weather resilience, the utility grid, because I was hearing it in every part of the country at the very top of the food chain which is the utility regulators.
00:09:40 Vir: Right. It's interesting. I mean, it sounds like when you hear the word regulator, you think -- you don't often think of people necessarily on the cutting edge, ahead of the curve. Often they're backward looking. But it sounds like in this case, they were instrumental in coming up with this idea and seeing these touch points. It sounds like in this industry, maybe differently than others. They seem to be very, let's say, on top of it to an extent.
00:10:06 Mishal: That's exactly right. And oftentimes, not only are they setting policy that the utilities have to go execute, I mean, at the end of the day, utilities are natural monopolies that act in their own interests because oftentimes they're investor-owned utilities that are looking out for their bottom line, but they act with accordance to regulatory orders.
00:10:24 Mishal: If there is some policy outcome, such as better reliability or better safety or lower emissions that legislators and then regulators have to implement, the utility is the final implementer. They actually put the investments in the infrastructure in place in order to make that happen. So in this case, yes, very much so. Regulators are directing utilities on how to achieve public policy goals.
00:10:46 Vir: Right. That's great to hear. Was there a particular conversation you remember? A particular moment at that conference? You said, "I got to go do this."
00:10:56 Mishal: Yeah. So it's funny, that conference is focused on the Western U.S. It was actually in Hawaii. So there are a lot of things distracting me at that moment, including my subsequent scuba diving trip that I was about to take after the conference.
00:11:06 Mishal: But the thing that kept resonating over and over again is: in order to get to a more resilient system, in order to get the utility to make investments that create that sort of system, you have to actually quantify the value of resilience of any sort of utility investment.
00:11:23 Mishal: Again, this isn't a normal business model. A utility will come up with multi-hundred million dollar, multi-billion dollar plans. The regulator will have to approve those plans and then the utility can go make their investments.
00:11:34 Mishal: However, in order for the regulator to approve utility plans, they need to fully understand the justification behind the investments that utility is making. So in many cases, it's gonna be, "Hey, we're seeing increased electric vehicle load growth or many more residential customers are installing heat pumps, electric load is anticipated to skyrocket, we need to increase the capacity of the system."
00:11:57 Mishal: In many other cases, it's, "Hey, we've got really old equipment in the ground," right? And it's resulting in day-to-day outages because equipment towards the end of their lifetime just end up failing, right? It's physical equipment at the end of the day.
00:12:10 Mishal: But there are standard ways to calculate the cost benefit of the investments for those categories. There's no standard way to quantify the value of resilience. That is, how much risk are you avoiding from extreme weather or physical type risks through an investment that you're making today?
00:12:26 Mishal: So if you think about replacing poles – I guarantee you, if you drive down a street, and you look at all the wooden poles, you're going to wonder how they stay up and running during a category one hurricane or when sustained wind gusts reach over 80 miles an hour. That's because physically they were installed probably decades ago.
00:12:45 Mishal: They've undergone some degradation and replacing those poles to make sure they don't fall down is really crucial, especially as extreme weather gets worse. So one potential investment a utility could make is replacing those poles or upgrading those poles. But how do you know what the avoided costs are of that investment in the future?
00:13:02 Mishal: There is no standard way for making that calculation. And the fact is, is that we can actually take data from the system itself, the previous history of outages and climate data to understand the future impacts of extreme weather or how frequently those extreme weather events are likely to occur.
00:13:18 Mishal: And project forward a baseline climate risk model that you can start to infer how an investment is gonna reduce that risk and then actually quantify that value of resilience. So it all goes back to that value of resilience metric.
00:13:31 Mishal: And it's so important because not only does it help prioritize which investments need to go where, but also helps get all of the other stakeholders, like regulators and other folks invested in the electric utility sector on board with a utility's plans so that they can actually go execute.
00:13:48 Vir: Right. So that's the big goal. If you're successful, we should see less outages over time. 20 years ago, it was much more rare to have, in the United States I think, outages than you are today, as I guess you allow utilities to quantify and make that argument and then invest those dollars to make these improvements. That's the net impact of the company at the end of the day, right? Is that we should have a much more stable system coming out of this if you kind of achieve what you're trying to achieve.
00:14:18 Mishal: Yeah, that's exactly right. We're aiming for no surprises. So if an extreme weather hits, we want to make sure that we don't have widespread blackouts and the security of what to expect. If you, number one, invest billions of dollars into a system, you expect results.
00:14:33 Mishal: So we should be able to expect, given a certain threshold of extreme weather events, say you have a hurricane coming through, you have a freeze coming through, what's likely to happen in terms of impact to the system? And then if you invest more in it, how can that mitigate those future outages and failures?
00:14:50 Mishal: So getting to that common understanding has been really tough and just a rampant issue in just about every state in this country. For some reason, weirdly enough, Arizona has extreme temperature issues, but they don't really have very many other climate threats.
00:15:04 Mishal: So Arizona is one state where I'm just like, "Hey, can we evaluate what are all the hazards here?" Turns out the physical climate threats tend to be a little bit lower, but extreme temperatures that cause peak load tend to be higher. But I would call out that exception in Arizona.
00:15:18 Mishal: The polar freeze that happened in Texas in 2021 caused a whole lot of evaluation on what it means to be a resilient system, especially in regards to extreme temperatures. In Texas, there are a lot of other climate hazards that take root as well. You have hurricanes that are all the way along the coast, my hometown in McAllen, Texas.
00:15:38 Mishal: Pretty sure we had about five or six hurricanes when I was growing up in about 18 years. And those have been getting more frequent and of course more severe. But you have all sorts of extreme weather threats and floods, for instance, that occur in Texas.
00:15:50 Mishal: And so when it comes to, yes, macro scale bulk power system, is this going to be reliable and resilient in the face of extreme weather? That's a bit of a different problem that we're looking at exploring at a future iteration of our platform. The current iteration of our platform is aiming to understand all of those physical extreme weather risks.
00:16:07 Mishal: When you think of sustained wind gusts, precipitation intensity, flood patterns and floodplains, we need to get a handle of those 50% of costs that are represented on the utility system from those climate threats in order to better help the utilities part in the system against it.
00:16:25 Vir: Right. I can imagine what keeps your customers up at night. These outages when they're having customers affected and then take it up to your level, like what keeps you up at night as an entrepreneur building this business?
00:16:37 Mishal: Building any business is you are 95% convicted at all times and then the remaining 5% of the times you're like, "Is this the dumbest idea in the world?" And that's exactly how it feels: you hope that the majority of players out there are going to align with their vision of a resilience system, similar to how your vision looks and how to go about creating that sort of framework. And this isn't just us working in a silo and pushing something down an infrastructure operator's throat. It's not going to work that way.
00:17:11 Mishal: What we do and what we have been doing is developing an implementation tool based off of scientific frameworks by partnering up with national labs that are of course, Department of Energy funded, as well as universities to fundamentally understand the science, make sure that it's justifiable and presentable in front of a regulator at the end of the day when a utility is going to eventually present their plans as well as the analysis that's backing up those plans.
00:17:36 Mishal: So that when we do the implementation and when we structure our engagement of pulling in the data and turning around a model that produces results that demonstrate climate risk reliability and resilience at a very high resolution on utility distribution infrastructure, that it's going to be logical in nature and rooted on an extremely strong foundation.
00:17:57 Mishal: And I'll call out one other partner out there that we have, which is the Electric Power Research Institute. Now, this is the R&D arm of the electric utility industry. And they created a program last year called Climate READi, the Climate Resilience and Adaptation Initiative. And so far, 50 utilities have bought in to help develop all the resources, capabilities, and frameworks that utilities need to understand and know when they're going about planning their system for resilience to future extreme weather events.
00:18:28 Mishal: And by staying plugged in as an advisory group member, by sharing a lot of information and staying up to date on the resources that they're developing, we can stay tied at the hip to utilities who are making these decisions operationally on an ongoing basis. That way, we're very much in sync with what their needs are out of a model or a platform.
00:18:48 Mishal: And so again, one thing that I want to iterate is if you are looking to bring in an innovation, especially to an industrial stakeholder that has operated for over a hundred years, you need to make sure you're taking a stakeholder driven approach and that what you're presenting has the buy-in from not only some people, or some folks who are overly enthusiastic about what you're doing, but total buy-in from many stakeholders that utilities or your end-use customers are going to trust.
00:19:13 Vir: Yeah. And it sounds like – actually the industry is fairly collaborative. It's not like people are trying to hold back things that have helped them. So it sounds like there is a lot of collaboration in this industry, which is good to hear.
00:19:27 Mishal: Yeah. And I think a big part of that is because these are natural monopolies that aren't competitive with each other. They operate off of limited service territories that don't overlap. And it is very much in their best interest as an industry to collaborate, share learnings, and implement the latest and greatest tactics, procedures, technologies, so on and so forth.
00:19:45 Mishal: And that's why if you work with one utility and we're working with Seattle City Light, we're working with CenterPoint Energy, and you do well and you perform well, they will vouch for you with a range of other customers. And that's one of the best ways to grow in this industry because they're all in it together, they're not competitive, and it's in everyone's interest to share those best practices and learnings.
00:20:07 Vir: Yeah, that's super helpful as a company doing what you're doing to have that kind of – being able to work with everyone and people share that's kind of ideal. A lot of startups have a very opposite kind of experience because people want to, if there's something innovative and disruptive, people want to not share that. So obviously you can see what's happening in the AI world right now.
00:20:26 Vir: Every day we're seeing stories that unfold and corporates wanting to guard parts of it themselves. So a lot of people want to make this open and that battle is playing out in real time. So it's a very interesting time we're in that space. One thing I want to touch on is like, if someone was to ask, okay, Mish, what's your superpower? What do people know you for? Is there something that jumps to mind?
00:20:54 Mishal: Absolutely. I think every founder certainly has their edge. Mine is that I have a ridiculous fear of missing out. And I know this is a common term in the VC space. I hope to not trample all over that, but my form of fear of missing out is missing out on opportunities by not being at the right place at the right time.
00:21:12 Mishal: Especially in a go-to-market with utilities, where it's an extremely relationship-driven industry, you need to be getting in front of them at every possible moment. Otherwise, you risk on missing out on an opportunity with them, not getting them at the right time, when they're trying to make a decision on what platform are they going to go with next.
00:21:30 Mishal: And so what has driven me, and so when my co-founder Rahul keeps telling me that I look tired on calls, it's because I can't pass up the opportunity of being in front of a potential customer. We need to learn about them as much as possible. We need to demonstrate what we're doing and how it's gonna help them.
00:21:48 Mishal: And if they don't have this information, we're not gonna scale well as a business, not in this industry. So one of the things we've been doing well from a go-to-market standpoint that I can credit that to is just that I think I need to be everywhere. I probably should travel less, but that's really what it is.
00:22:06 Vir: Right, so that FOMO keeps it going and making sure you're out there with the customers figuring out their challenges in real time. As we wrap up, I just wanted to talk about some more fun stuff. I know you touched upon you were in Hawaii and it sounds like you spent some time there in a sense of impact. Are there any other places in the world that, let's say, not Rhizome specific, but if you could just hang out anywhere for a period of time, any other places that would rise up that list?
00:22:38 Mishal: Yeah. I've been trying to go to Japan for about – I want to say like 20 plus years. And there's always been another trip that has been a priority, right? But Japan is just literally number one on my list. I love Japanese culture and I've appreciated it from a fairly, fairly young age when one of my best friends growing up, John, is Japanese. I spent a lot of time with him and his mom.
00:23:04 Mishal: And while John didn't care an ounce about how to cook food, his mom was showing me how to make sushi at home. And so that's a skill that I developed. I have always been a huge fan of Japanese culture, the general nature of respect and discipline, and I can't wait to go visit. I'm hoping it'll happen next year, but it's still writing it in the books.
00:23:24 Vir: Yeah, with the Yen where it’s right now, it's a great time to visit as well. Well, I think that's about it. I think we've touched on a lot of stuff. Anything else you wanted to mention to the audience?
00:23:35 Mishal: I love talking about this stuff. I've been passionate about this space. That is, clean energy and resilience to climate change, for a really long time. I hope there are other listeners to this podcast who are as passionate about it, maybe thinking about starting a company in this space. Because it's a dense space and there's a lot of stuff going on, I love talking to people about this stuff and there is a lot of innovation that can happen.
00:23:58 Mishal: So the one thing that I love to cover at a future time with any of your listeners is what can you do if you're interested in this space? I'm getting your first step to figuring out. If you want to have an impact or if you even want to start a company in this space. And it's been a journey for me in my 12-year long career of being in this space. But I would love to just chat with anyone about that.
00:24:20 Vir: Yeah. And if there are folks that want to dig in more, learn more, are there any books or podcasts or blogs that you really feel hit on the spot that people should be reading or consuming?
00:24:33 Mishal: Yeah. The Grid is a phenomenal book by Gretchen Bakke. And gives you a really good primer on what are all the challenges to going through our energy transition. It goes through it from a policy perspective all the way down to a technical perspective, really well written.
00:24:48 Mishal: And then in terms of podcasts, some of my favorites are The Catalyst with Shayle Kann. He is a partner at Energy Impact Partners and just dives through a lot of the nitty-gritty details of so many different corners of the climate tech industry.
00:25:04 Mishal: And then lastly is a little bit more utility specific is called With Great Power. That's a great podcast where they'll dive into some of the energy challenges and some of the practitioners that are actually creating new programs and technologies that are making a difference. So those are a couple of recommendations there.
00:25:18 Vir: Okay. Fantastic. This has been super insightful and interesting. I think that everyone will love learning more about what you're building and what drove you to do that. And so thanks for taking the time. And we're super excited to be part of this journey with you. It's looking forward to many more.
00:25:34 Mishal: Thanks so much. Love being part of the Everywhere family and hope to chat soon.
00:25:37 Vir: Thanks.
00:25:39 Scott Hartley: Thanks for joining us and hope you enjoyed today's episode. For those of you listening, you might also be interested to learn more about Everywhere. We're a first-check pre-seed fund that does exactly that, invest everywhere. We're a community of 500 founders and operators and we've invested in over 250 companies around the globe. Find us at our website, everywhere.vc on LinkedIn and through our regular founder spotlights on Substack. Be sure to subscribe and we'll catch you on the next episode.