Jon Powers: Welcome to Experts Only podcast sponsored by CleanCapital. You can earn more at cleancapital.com. I’m your host John powers. Each week we explore the intersection of energy, innovation and finance with leaders across the industry. Thank you so much for joining us. Jon Powers: Welcome back to Experts Only podcast. This is John Powers. First of all, we’ve got a phenomenal conversation today with a fellow Iraq veteran, Ryan Popple, who is the CEO of Proterra Bus. Ryan’s had an incredible career going from the military to Harvard Business School, working at leading companies like Tesla and at Kleiner Perkins when he lived through the growth of the clean energy space, and is the CEO of Proterra. Jon Powers: For folks that don’t know Proterra Bus, they are a dominant player in the North America mobility space. They are making an electric bus that is really having phenomenal impact on climate change in our urban environment. Jon Powers: So, we’re going to talk about the market. We’re going to talk about Ryan’s experiences in a place like Iraq and how it got him interested in clean energy. I hope you enjoy the conversation. Ryan, thanks so much for joining us at Experts Only. Ryan Popple: Oh, happy to be here. Jon Powers: You’ve had quite an amazing career before leading Proterra and I want to step back to when you were at William & Mary. You were doing ROTC. You and I have similar paths there, led you in the army, serving time in Iraq. How did you decide to do ROTC? Ryan Popple: I would say service in some form has always been a big part of my extended family’s life. I obviously had a lot of relatives, like other people, other Americans, who had served in the military. So, I was very familiar with that. And a fair number of them had served in the army. I had done the Scout program coming up through high school and was an Eagle scout. Ryan Popple: And so, maybe I was a little bit more outdoor-oriented, or a little bit more patriotic, you could say, than your average kid. I was always into the activities, I guess you’d describe as high adventure stuff. I like to rock climb, I like to be in the outdoors. So, on some level, I was in my late teens and thinking about something like ROTC and I thought it would be a good way to start my career. I’d spend a lot of time outdoors, get tested in a lot of tough situations and learn to lead in what’s arguably one of the most demanding laboratories for producing young leaders. Jon Powers: Interesting. And then, you graduated from William & Mary, went into the armor, so you were fourth ID, and we were talking a little bit about it offline, so I’m going to talk a little about your time in Iraq. You deployed around the same time I did, 2003 and 2004. Talk a little bit about that experience. How for you, personally, did that change the way you viewed the world coming out of your time over there? Ryan Popple: Well yeah, you learn a lot really fast when you’re deployed into a real world operation like Iraq or Afghanistan, or any of the other campaigns. On the one hand I learned how much focus and attention it requires just to do a good job and take care of your people on a day-to-day basis when all of your basic assumptions around safety and security are gone. Ryan Popple: It certainly gives you a front row seat to what conflict actually looks like and I think very few people in our society, in American society, have much perspective on what war and conflict really looks like it. The percent of people who serve in the military or in any capacity where they would see that type of operation is very, very low. So, we have a very, very low level of participation, in terms of paying the price for things like war and conflict. Ryan Popple: It’s also spending time in that part of the Middle East and especially in that part of the Middle East during a time of an intense political turmoil. I certainly got the impression that this probably was a bad bet, in terms of thinking that most of the world’s transportation fuel should be dependent upon coming out of that region. Ryan Popple: And I didn’t necessarily put two and two together while I was over there, but making the assumption that the Middle East is just a place where tens of millions of barrels of oil per day will efficiently flow into the global market and if that doesn’t happen, basically, everything that moves stops, once you’ve seen that place and you’ve seen how on a razor’s edge some of these situations can be, and conflicts can be, it definitely made me much more skeptical about the overall status quo in energy. Jon Powers: That’s interesting. I feel like there has been a really interesting dynamic right now of veterans who’ve had that similar experience coming home and getting into solar, getting into energy efficiency. Obviously, getting into mobility and really beginning to understand the national security implications of our energy policy. Jon Powers: I mean, you studied business administration at William & Mary. I actually, we talked talk about this offline, I was an elementary education major. Energy was not my thing, but when I came home, I began to focus on it academically as well as professionally. You ended up coming home and going to Harvard. How did you decide to follow that path and what was it at Harvard that began to pick up your interest into clean energy? Ryan Popple: Well I knew I wanted to go to business school and dust off a lot of the things I’d learned in undergrad but hadn’t necessarily had the ability to utilize as a tank commander or cruising around in Humvees in Iraq. Jon Powers: Can I ask you a question? How did you know you wanted to go to business school? Because I feel like there’s a lot of folks that are transitioning of their first four year stint as officers and there’s a big void on where to go and what to do, right? There’s groups that are pulling you into managing logistics chains, or whatever. But the idea that you wanted to go back to Harvard is a pretty sophisticated decision. Ryan Popple: Well, the other officers in my unit, I was fortunate that it was a really talented group of individuals. It was a division cavalry squadron for the fourth ID. So, of the armored guys, you had to want to be there. I remember coming out of training, I actually had to write a letter to the S1 and the squadron commander, and so, we generally, we just had a pretty sharp, motivated group of NCOs and officers, and I benefited from several mentors that really pushed me. Ryan Popple: And when I would set my sights on a target that was maybe a little bit more reasonable or a little bit less risky, like I’ll work for a couple of years or I’ll give myself more time to study for graduate school exams. There were a couple of people I worked for, like my XO, and then, a company commander at the time, who just said like, “Look, if you know you can do it, you don’t need the extra time. You could go home, out-process, take the test, do the essays, and apply to the best schools that you can think of, and don’t talk to me about safety schools and don’t talk to me about hedging your bets.” Ryan Popple: So, I applied to Columbia, Northwestern, and Harvard and that was it. I would say a pretty risky move, but I didn’t have time. I was applying third round, so I didn’t have time to crank out 12 applications, and I didn’t have time to take a sit-down study course, or whatever. But I friends and family who pushed me to say like, “Look, I think you’ll really enjoy that type of environment.” Ryan Popple: I had enjoyed what I’d studied in undergrad and so, a little bit of luck goes a long way. But my main motivation is I just wanted to put myself in the most challenging academic environment I could. That had tended to work for me in the past. I would be much less likely to get bored or lose motivation if there was almost more than I could handle. Ryan Popple: And that worked in the army and that worked in undergrad as well, and that worked in business school. So, I had very little time to apply, and then, the next thing I knew I had to figure out how to show up on campus in the fall of 2004, so not a whole lot of transition time, but it ended up working really well. Jon Powers: Interesting. And Harvard’s got a great reputation for veterans who’ve gone in under the MBA program. Know a lot of folks in both the clean energy industry and others that have gone through that and they really have a great way of integrating folks into the broader community there. Jon Powers: So, while at Harvard, how did you begin get interested in Silicon Valley and clean energy because they led you down a path to Tesla and Kleiner Perkins? Ryan Popple: Yeah. So, like everyone in grad school who’s using grad school as a career transition point, you try to expose yourself to everything that you possibly can, in terms of industry and function and location. And, funny enough, I actually think it was one book that I read that had more influence on me than anything else during that first semester in business school. And it was a study called, Winning the Oil End Game, it was published by the Rocky Mountain Institute. Ryan Popple: So, or people who write and blog and publish thought leadership about clean energy, it’s an example of how much unanticipated impact something like that can have, because I remember I flipped open that book and one of the first pages, first or second pages of it, there was a photo of a platoon of soldiers in Iraq in 2003 who are doing their best to secure a checkpoint with an oil well burning behind them. Ryan Popple: It was an almost a picture that didn’t need a caption. And I sort of thought, “This is interesting. This is someone who’s approaching the security situation over there with an energy and economic paradigm.” And the book described a longterm path for how the US could become energy-independent and not have to make national security decisions as a backstop or an insurance policy for energy supply. Ryan Popple: And after reading that, I just started diving into, at the time what was called alternative energy, and I think those early strategies were things like hydrogen, and biofuels, and wind, and things like that. But that really set me off on knowing that I wanted to work on something that had specific impact in transitioning to a safer form of energy. Ryan Popple: That also led though to learning a lot more about the environmental impact of what we currently do with fossil fuels. And it put me on a path to wanting to seek out roles that were going to be directly involved in that challenge in one way, shape, or form. So, it set, I’d say, wanting my career to be about finding the next generation of solutions after fossil fuels. That really became the north star of how I made future career decisions. Jon Powers: Amazing. So, when you then went out to the Valley and got engaged at Tesla and Kleiner, when you were at Kleiner, I imagine you were probably seeing the birth of many of the things we’re seeing today. Kleiner was involved in early investments in Tesla, and Bloom, and obviously Proterra, but it’s so many clean energy plays that are on the street today. Were you just seeing a variety of opportunity in investment come across your desk there? Ryan Popple: Yeah. Working a place like Kleiner you’re probably going to see almost everything and the access to potential deals that they have because of their network within the entrepreneurial community, it’s just an incredible platform. On any given day there might be three to five business plans that are coming into the firm in any number of sectors, or three to five teams of entrepreneurs coming in and talking about their plan to do things in a better way. Ryan Popple: Kleiner has a multi-pronged approach, so some of our teams worked on things like environmental sustainability. Other teams worked on life sciences, and other teams worked on consumer or enterprise digital technology. So, you worked with people who covered a variety of different sectors and it was interesting because each of the sectors went up and down over time. Ryan Popple: Sometimes the life sciences group was having the most success in helping to commercialize entrepreneurs. And other times you’d have a situation like Nest where Tony Fadell had decided that after Apple, his life’s work was going to be energy efficiency. So, you got to see the most talented entrepreneurs in the world across a number of sectors. Ryan Popple: And I also got to see a lot of the evolution of investing in environmental sustainability or environmental impact. And I probably arrived at Kleiner at the end of the beginning in that when environmental investing first started at venture capital firms, you had people who had no subject matter or industry expertise transitioning out of their former sectors. Ryan Popple: You had biotech investors becoming biofuel investors. You had semiconductor investors become solar investors. And that model, for the most part, was unsuccessful. And it wasn’t until the next generation of impact investing where there was actually a group of investment professionals that knew their sectors like solar, or LED, or battery, or water, or food, as well as previous generations of investors, new, semis and pharmaceutical, or life sciences businesses, or software businesses. Jon Powers: Interesting. So, I’m going to get to Proterra here in a second and talk about the incredible mission you guys are on, but how did you then decide that you were interested in moving from that side of the ball, where many people would build a career and stay at a firm like that and continue to look at, invest in, and then, advise firms, but jumping from that into an executive role into one of the companies in the overall investment, how did you decide to make that leap? Ryan Popple: You know, for me, it’s generally about impact, in terms of, what am I going to do, or what will be the result of the decision I make? So, when I joined Tesla, I felt like that was a very high impact time to join that company. The three years that I was there, everything you worked on felt absolutely mission critical. And I’m still proud to this day to see cars like the Model S on the road, and even the original Roadsters, given that when I first joined Tesla, Tesla didn’t have any revenue. Ryan Popple: We literally had to figure out the very first production system for the Roadster, and then, figure out the capital strategy for the Model S so, heck, the Model S is probably the last of the Tesla cars that I feel like I know really well. The Model 3 was completely after my time, but for the rest of my life I’ll be proud to have played a part in that initial team, given that Tesla seemed to almost die every six months during the time I was there, which coincided with the great recession. Ryan Popple: And I think the fact that there was a relatively small crew of us that kept the faith and just worked our tails off and help Tesla make it to what it is today, that’s life’s work that we can be really proud of. Ryan Popple: When I went over to Kleiner, it really was, again, a decision on impact. I thought, “Well, I can continue to do what I’m doing at Tesla or I could help the entire clean energy sector and help get some of the next generation Tesla-like companies off the ground and financed.” Ryan Popple: And then, likewise, for Proterra. Proterra was a Kleiner company, still is a Kleiner company. And when they were searching for a CEO to basically take it from the very beginnings of revenue to the first hundred million or more of revenue, it felt very similar to what I had lived through at Tesla, and it also felt very important. Ryan Popple: These types of companies, the team that you put in place, it’s just absolutely essential that you get that right. Larger companies have a lot of process. They have training wheels, there’s a lot of safety nets, and so, companies will go through good teams and bad teams and that might shave their growth by a few percentage points. But when you’re launching a new technology into the market, if you have anything other than a completely committed, focused, and experienced team, it’s likely not going to work. Ryan Popple: And so, just from an impact perspective, the question I asked myself, where would my career have more impact? I could work on the next Kleiner green fund and help get that fund raised along with a team of people that I knew and loved, or I could move into Proterra and help grow a company through what is typically the most challenging part of a company’s life cycle. And so, the decisions I make, I tend to measure them on leverage and impact. Ryan Popple: And I also like to find things that are just a few millimeters beyond my comfort zone when I first go into them. And that it tends to be a model that’s worked well for me. I haven’t really stood still for that long anywhere. Jon Powers: So, let’s talk about Proterra. So, when most people think about electric vehicles, they do, they think about Tesla, they think about the Leaf and other moving individual customers around. Most people don’t think about buses, but the impact you guys are having at Proterra is incredible. Talk a little bit about the history of Proterra and what you guys are doing today. Ryan Popple: Well, Proterra was founded by a real visionary in the mass transit vehicle industry, Dale Hill. And Dale is still with our company today. So, it’s very much a partnership between me and Dale. Dale still plays the role as founder and I’m the day-to-day Chief Executive Officer. Ryan Popple: So, the original vision though from Dale, he had worked on hybrid bus technology and before anyone else in this sector saw it, he saw the potential for building, essentially, a hybrid that didn’t have to lean on an internal combustion engine. And I think it’s remarkable how prescient he was given that at the time batteries were very heavy and they were very expensive. Ryan Popple: But his view of how this would work is very similar to how we have commercialized it today. It’s purpose-built commercial vehicles where the vehicles are lightweight and capable of carrying the appropriate amount of energy storage, highly efficient drive train, again, that’s purpose-built for heavy duty vehicle, and then, charging systems that are appropriate for fleet vehicles that have high utilization. Ryan Popple: And so, the vision started out with just a few deployments. I think when I started Proterra maybe had a half dozen customers and vehicles on the road in two or three fleets, and only a handful of them. And where we went from there, we were able to determine that the customers really did prefer to move into an environment where the vehicles were zero emission. The vehicles ran on low-cost, predictable electricity, and they were able to get away from, not just the economic insecurity of fossil fuel, but just the hassle of a fossil fuel internal combustion engine vehicle. Ryan Popple: So, the vision was there, the pent up demand was there, but the product was not. The early generations of electric buses, they did not have the capability to do the majority of routes, and they didn’t have a lot of the power needed to climb hills, et cetera. So, that started a journey that we’ve been on for the last couple of years to ensure that the battery electric bus in North America is a completely disruptive product to the internal combustion engine city bus. Jon Powers: So, for folks that aren’t as familiar with some of the mass transit set up, why is a bus fleet so attractive for introducing electric vehicles into? Ryan Popple: Well, on the one hand, if you look at it just from an impact perspective, if you can replace a diesel bus with a electric bus, you look at the number of seats, or the passenger capacity, in a single diesel bus. And in some of these buses they’re configured to carry 50, 60, 70 people. And you’re only using about four times the equivalent of a Tesla Model S, in terms of energy storage. Ryan Popple: And that was really a light bulb moment for me because, at the end of the day, what really matters, in terms of environmental sustainability is, how much energy are you using per person, per mile? Jon Powers: Right. Ryan Popple: So, I think electric cars are incredibly important. Electric cars though, are only going to solve one of the many problems we have in transportation. Electric cars are a good idea or are a good replacement for internal combustion engine automobile, but you still have the problem that you’ve got a four or 5,000 pound set of material. You have 30 to $75,000 of cost and you’re moving one human being on one or two trips per day. Ryan Popple: So, cars only go 10 to 12,000 miles a year and they only carry one or two people. Buses, on the other hand, go 40 to 80,000 miles a year and they’re carrying dozens of people and hundreds of different trips per day. So, if we’re trying to be very pragmatic about, how do we get the most people to the most places with the least amount of petroleum, we want to start with the vehicles that are doing the most trips and burning the most fuel right now. Ryan Popple: The same way, if you invented an LED technology and you went to market, you would want to target markets where the lights are big and the lights are always on, and the transit system, the systems are always running and they’re big vehicles using a lot of fuel. Ryan Popple: When you drill into the numbers, I mean, it’s quite remarkable how much fuel these vehicles use and a diesel bus is often getting less than four miles per gallon energy efficiency, and when we transition them to electric buses, they’re getting 16 to sometimes 26 miles per gallon energy equivalent. You take that four mile per gallon driving 40,000 miles a year, you’re burning 10,000 gallons of diesel fuel per year. Ryan Popple: Then the other aspect of it is, these are urban vehicles. So, if you’re looking for vehicles that have both a climate sustainability advantage and a local air quality sustainability advantage, we should really be focusing on urban vehicles. If we’re looking for maximum return on investment and you want to not just reduce greenhouse gas emissions, but also reduce healthcare costs due to asthma and heart disease, you want to go after your most dangerous pollutants in your most urbanized areas. Ryan Popple: And unfortunately, routes for city buses and school buses are designed to be people centric, right? So, those are the vehicles where you are going to see human beings and diesel interacting most directly. Jon Powers: So, to give a sense of scale for folks, recently, BNES got their 2019 electric vehicle outlook that says that the global bus fleet’s already underway to over 400,000 electric buses on the road with the idea that there will be adoption of over 70% of the global bus fleet by 2040, so significant scale. Jon Powers: Where do you see the opportunity most for Proterra? Here, domestically in the US, as you’re putting in a footprint or growing internationally, or both? Ryan Popple: Well, I think our domestic strategy, or I’d say North American strategy, is our most direct path for growth. And that’s what we’ve been focused on. Each of these global vehicle markets tend to have very much local content requirements and local vehicle configuration. So, while a 40 meter, or a 40 foot, bus seems a lot like a European 12 meter bus, we have different DMVs, different DoTs, and these are big products. Ryan Popple: And so, a big product and one that can be damaged in an accident, it tends to require domestic or in-country manufacturing. Jon Powers: Right. Ryan Popple: So, what you tend to see is your big country markets, your big continental markets, are dominated by three to five players. And we’re dominating the North American electric bus market and the focus of our company is to continue to do so. In a lot of ways, we think we are the most important variable in determining the pacing of the transition from fossil fuel to electric, i.e. the quality of the Proterra electric bus, the performance of the Proterra electric bus, is going to be the pacing item in the North American market being able to let go of fossil fuels. We do see a lot of opportunities internationally- Jon Powers: That’s quite a challenge. I love it. Ryan Popple: Well, we make the best electric bus, and so, therefore, if there’s a city that’s not buying electric buses, it’s our fault. It means we haven’t built an electric bus that has their confidence yet. Jon Powers: Well, if I’m in that city manager’s position, or the fleet manager’s role, I don’t have the capital to go buy a whole new bus fleet, right? So, how do you propose ,structure opportunities for them? Some of them might have that opportunity, right? If you look in Colorado, where they’re getting some really interesting uptakes from cannabis money, for instance, but the majority of them don’t have that type of capital outlay. So, how does Proterra approach that fleet manager with a solution that works for them? Ryan Popple: Well, we spend a lot of time on education, and one of the things we help them understand is how much money they’re currently spending on their incumbent technology. So, even a vehicle that they think, or they feel, is fully depreciated, when we walked through the maintenance depot with the customer and we just look around at the number of mechanics, the boxes of engines that are waiting to go into vehicles that have blown engines and transmissions, the cost of having deadlined vehicles that aren’t doing any revenue service. Ryan Popple: We help them identify the O&M waste in the system and start thinking about how O&M savings could help them with new capital assets. It’s a little bit like going into an apartment building or a home and before you start thinking about a solar system for a customer, you help them see how much energy is being wasted, or how much money they’re losing right now today just through things like inefficiency or legacy technology. Ryan Popple: If we find that this technology is a good fit and has a good business case for them, what we also find is it’s a bankable transaction. It’s a finance-able project, in that we can take a situation where a customer’s spending tens of thousands of dollars per month on labor and O&M and spare parts on diesel buses, and that is evidence that they have the cash flows to be able to finance something like a battery electric system. Ryan Popple: And then, we try to do a good job of helping them form partnerships. There are partnerships that they can form with the USFTA at the federal level. There are partnerships at the state level, sometimes at the city level, and sometimes even with local businesses that want more transit service but want it to be clean. Ryan Popple: And at the end of the day, these projects all end up being quite large. Even a small electric bus project is a couple million dollars, in terms of buses and chargers. So, it’s a longer sales cycle than, obviously, doing consumer products, but there’s enough meat on the bone, in terms of project size that we can get capital providers like Mitsui, for example, to come to the table and want to finance charging stations, or finance battery packs. Jon Powers: Interesting. Well, we’ll have a followup conversation about CleanCapital’s role too because we’re very interested in those type of financings and thinks it’s the future of the way these type of services are provided. Jon Powers: So, since we’re running out of time, lead to the last and final question we’ve asked most of our folks. The incredible growth at Proterra has been phenomenal. You guys are really hitting a sweet spot and it’s great to hear about your dominance in North American market and, personally, as someone who’s gone from college at William & Mary, deployed to Iraq, and to business school, into Silicon Valley, you’ve seen the policy implications of clean energy. You’ve seen the way that the market is maturing and growing and the opportunity, I think, we as a whole, the transition to a clean energy future. Jon Powers: But if you could go back to visit yourself at William & Mary before you had your lieutenant bar pinned on and leave for the army, if you could sit down and have a beer, what advice would you give yourself? Ryan Popple: Oh gosh. I’d give myself several pieces of advice that I would not share on this show. Jon Powers: That’s good. Ryan Popple: But, actually, I think that the biggest piece of advice I’d give myself is, surround yourself with the most talented and inspiring people you can find, but also make sure those people are fundamentally glass half full people. You will get so much more done in your career and your personal life, if you build and you maintain a positive outlook. Ryan Popple: There’s this great quote, oh, gosh, it’s, I think it’s Dickens. It might be Twain, but it’s about, “My life’s been full of tragedies, most of which have never happened.” A lot of us have been through some pretty dicey situations and maybe that’s getting your startup through the great recession, or something like that, or a deployment. And when you think back on how you did it, you have to keep a positive outlook. You have to have something that the compass is pointed at, stay focused on it. Ryan Popple: But it’s also critical that your network, your friends and family, the people you give your time to and the people you help, are fundamentally people who are positive by nature. And I think for the clean energy community, we’ve been told over and over and over that there is no future beyond fossil fuels and there’s nothing we can do about climate change, so why even get started on it? Ryan Popple: And there have been successes and failures in clean energy companies, but fundamentally, I guess the advice I would give myself is, you do have to be good at anticipating outcomes and challenges, but you’ve got to fundamentally stay in a positive mindset. Otherwise, if you actually stack up all the challenges you’re going to have to knock down if you really want to have a career that has a big impact on the world, you’ll give up before you even start, you’ll pick the safe route. So- Jon Powers: I love it. Ryan Popple: … I would focus on that. It took me a little while in my career to learn that the best thing I could do was, the crew of people that I went out for beers with, hang out with the people who know that you’re all going to figure it out. Jon Powers: I love it. Well, Ryan, thank you for what you’re doing at Proterra and thanks to your team for helping to coordinate this. We’re really excited to have you on the podcast. Ryan Popple: Well, thanks so much. Really appreciate the opportunity to share some thoughts with you and look forward to catching up soon. Jon Powers: You can find more episodes at cleancapital.com. Please share your thoughts and if you’ve got other folks you’d like to hear on the show, and as always, I look forward to continuing the conversation. Jon Powers: Thanks for listening in today’s conversation. Find more episodes on cleancapital.com, iTunes, or wherever you get your podcasts. If you like what you hear, be sure to subscribe and leave us a five-star review. We look forward to continuing our conversation on energy, innovation, and finance with you.