RaphaÃ«l: Hey folks and welcome to this latest episode of
the Sustainable Tech Podcast.
I'm your host Raph and today we are talking to Dr.
Marshall Cox, founder of Kelvin.
We'll talk about the challenges of energy consumption in urban areas
And the role of smart technologies in building an energy efficient future.
I learned a ton from Marshall about the science behind this stuff, the
technology, and about entrepreneurship.
I hope you enjoyed the discussion as much as I did.
Hey, how's it going?
Marshall: Good, how are you?
RaphaÃ«l: Good.
So I'm just going to dive right into this and I would love
to know about your journey.
what led you to start Kelvin?
What led you to hop into entrepreneurship?
How did this all come about?
Marshall: Yeah God, it's kind of like a, it's not a long story,
but it kind of seems like it is.
So I got, my research and experience , in undergrad and grad
school is in material science.
With a focus on organic electronics.
So you've heard of OLEDs,
I assume.
So a lot of materials, a lot of research in organic light emitting
diodes and organic solar cells.
My first entrepreneurial experience was at a company called QD Vision.
So QD Vision stands for Quantum Dot Vision.
And if you're familiar with the Samsung QLED TVs,
RaphaÃ«l: Yeah.
Yeah.
Marshall: acquired QD Vision and that is the basis for that technology.
I made no money in that transaction, but my expertise is in low
dimensional materials, quantum dots for display applications.
So
very ridiculous, and niche.
The person who hired me at that company, went to become a professor at Columbia
and I loved him, and so I just followed him and I went to get my PhD with him.
And in that lab, which is called the Columbia Laboratory for
Unconventional Electronics, which
is an awesome name there was a heavy emphasis on entrepreneurship.
And so we do a lot of cool stuff.
There was a lot of different projects and there was a lot of patent applications.
One of the things I stumbled onto was my own heating in my apartment.
So I live in this kind of shithole.
It was a nice apartment, but it was like a studio.
It was really overheated.
It was a steam heated, radiated, heated building.
The real reason why I began looking into this is because my twin brother,
who's a professional ballet dancer.
Got a job on Broadway, like a really good job Broadway, and he didn't know, it was
a new show and he didn't know how long this was going to last, and so he slept
on my floor and complained incessantly about the hot, cold, hot, cold, hot, cold,
like he just wouldn't stop, and so, I built the first version of what
is now called the Cozy as a means of controlling temperature in the apartment.
And it worked really well.
And that was the origin of that.
But I'd say my entrepreneurial journey started earlier, just being exposed to
it early as a non founding employee.
And then kind of liking that being interested in doing that again and
looking for opportunities to do it.
RaphaÃ«l: Cool.
How does the stuff that you learned about in the display space,
translate into heating and cooling,
Marshall: It doesn't except that.
when people learn you have a PhD, they're like, oh, you must be smart.
It's like, no, there are a lot of dumb people who have PhDs.
and people, I think, I'm not going to say naively, but often it's considered
that what you learn in your PhD or in school, you apply in the real world.
And that's obviously not true, right?
almost nothing of what you learn in school, PhD included, is
used in your day to day life.
in that context, what I learned at QDVision doesn't need to be applied,
What I was doing at QDVision was trying to figure out a product something
that worked and establishing a process for testing that hypothesizing and
building stuff that functioned.
I think that is what has been applied universally in what I do.
RaphaÃ«l: Cool.
And when you decided to start a company around this, so you go from like building
a prototype because your brother is complaining about the heating what then
turns that into an actual company for you?
Marshall: that's the step that I think most people take because they
don't have experience doing it.
But it was very easy for me in my position in that lab to apply for a patent.
my perspective then was I could apply for this on my own because the school
didn't really contribute to that.
I applied through the school because I wanted to use the school
as a testbed for the technology.
so I basically gave them a large ownership of the IP.
I licensed it back and then I was like, hey, Columbia, you want to
test this out in your facilities?
And they were like, yeah, let's do that.
And then from that small step, I'd say the big step after that
was we competed in a bunch of clean tech, business competitions,
and we won a few of them and one very big one.
And that really launched the company in this most, official sense.
RaphaÃ«l: what was the most surprising thing to you leaning
into this entrepreneurial stuff you have support, but there's always
stuff that you just don't expect.
Right.
So what was the,
Marshall: Yeah, totally.
I could sum it up.
It's something that one of my first big investors refers to as schlep blindness,
which is that first time founders
RaphaÃ«l: Yeah.
Marshall: entirely blind to the schlep that they're embarking on.
I had no idea what I was getting myself into.
to go into more detail on what that was, was essentially, you
know, I had this radiator cover.
It's not, Rocket science.
it's pretty simple to build.
It's simple to sell ish.
But the process to get it certified as an energy efficiency technology
was outrageous.
we got funding from NYSERDA, which is the New York State Energy Research
Development Authority, It took eight years to get the technology into what's
called the technical resource manual, where you have to be to get incentives.
And that is an outrageous amount of
time.
Like that's longer than most startups
RaphaÃ«l: Last.
Marshall: or even sell.
That was the biggest surprise, and it continued to be a very big
surprise for a very long time.
And to add insult to injury, we were entered into the New York State Technical
Resource Manual in December of 2019.
So we were like, all right, we finally
RaphaÃ«l: Ready to go.
Marshall: guess what wasn't happening anymore?
Any access to any apartments.
It took a while for us to get beyond that.
RaphaÃ«l: I've heard a couple interesting stories about
navigating lockdowns recently.
I'm curious, what happened for you?
Did you just have to put everything on hold?
Did you have the resources to just carry on
Marshall: we weren't allowed to do any in unit work.
We did what we could.
We spent a lot of time thinking about what we were doing.
We actually developed a new product during that time.
the PPP loans are what got us through we had one big
contract that was Put on pause.
once things relaxed and we developed a personal protective equipment
strategy, start making revenue again.
that was really painful.
RaphaÃ«l: I'm curious, do you think there's anything, I mean, there's something
unique to, your situation in terms of the background, you had the context in
the lab do you think there's anything to the sort of ecosystem in New York
that in particular is helpful to the kind of thing that you were doing or.
Marshall: People consider us like the OG hardware company
because we've been around for so long.
much fewer resources for startups than there are today.
there's all kinds of accelerators today and it's great.
we benefited from that somewhat, but we were like the first ones.
they were still building the programs, et cetera.
our market's New York.
it's every bigger, older city, but,
New York City is the steam capital of the world.
So, all the customers we could ever need are here.
And it's just a great place for us to be in a location where most of
your early customers are, so you can
RaphaÃ«l: Of
course.
Marshall: Yeah, I mean, outside of that, the finance industry
here is really helpful because,
That's been one of the biggest unlocks for us, honestly, in terms
of sales is financing the product.
New York City is a great place to have a startup except that
the labor is really expensive
and the space is really expensive.
So if the pros can outweigh the cons, then it's great.
RaphaÃ«l: Are you currently working in other markets
Marshall: we have deployments all over the Eastern seaboard, but I'd say 98
percent of them are in New York City.
We're raising another round, and that round is predicated on, you
know, we've established our growth in New York City, and now we want
to replicate that in other regions.
there are many that make really good sense for us right now, and we want
to hire teams that focus on them.
RaphaÃ«l: I'm curious, in the sort of hardware and sustainability, like
the intersection of hardware and sustainability, I think there's a lot
of interesting stuff happening there.
Marshall: argue it's
where everything is happening,
RaphaÃ«l: Yeah.
Marshall: Well, you know, people have very different takes on
this, but sorry to hijack your
RaphaÃ«l: no, go for it.
Marshall: the era where a piece of software is going to make a huge
difference in efficiency is kind of over, the things that need to
be harnessed and reined in are not controllable via software.
And so I think that to really make the next step in sustainability for a
number of different things, you really have to have the hardware to do it.
RaphaÃ«l: Yeah.
That makes a lot of sense.
I feel like I've seen over the past, five plus years, a lot more emphasis
being put in hardware, both at the.
consumer ish level.
I say consumer, like you're not consumer, you're selling to buildings, right?
If I understand correctly.
But it's still dealing with people's lives.
I'm seeing now a lot more stuff in mining and industrial sectors.
Marshall: yeah, there's a lot of cool stuff going on these days
really interesting ways to tackle problems, and it's all, you know, I
guess, I'm going to step, walk back a little bit on the hardware thing.
I think that you have to have physical stuff to do things physically,
right?
there's a lot of cool stuff on, like, using you know, like growing
plants in a field and then burning it to extract metals that the, that
the plants are designed to extract.
just cool stuff like that.
there's a lot of awesome things going on in the industrial world, effluent
management a lot of cool stuff on mining.
Agreed.
RaphaÃ«l: Yeah.
So with that context, I'm kind of curious, you mentioned
you're raising another round.
what does that ecosystem look like for you right now?
we've had some ups and downs lately, generally in like venture capital and
in the tech and startup ecosystems uh, generally, like more broadly.
I feel like I'm seeing here in British Columbia and in Canada.
A lot more emphasis being put on cleantech investments.
Marshall: Yeah, It's been up and down.
You know, there's like the big cleantech crunch was that
2010 ish or whatever it was.
And we founded on the back end of that.
It wasn't a great time to be raising money in cleantech.
And that was another weird time.
I think, the golden days of cleantech investing were like 2022, 2021.
And now it's getting a little weird.
In the states, at least, because there's political question marks which
mean maybe incentives question marks,
I mean, there's still a deficit.
on one hand, can you make a lot of money?
some of the multiples in cleantech are not that great.
And on the other hand, can we afford not to make these
improvements, even if they're not the biggest money makers on earth.
I think both those things are kind of fighting each other.
We're in a position where our numbers are really good.
we're in pretty good shape for funding.
But that's not true of a lot of companies out there right now.
it's a tough environment because everyone's trying to raise money
Interest rates still aren't great
and a lot of companies rely on that.
I think more and more people are seeing cleantech as not only a place where you
can make money, but where philanthropic dollars could be uniquely enabling too.
It's just the people who work in cleantech are not necessarily
working in cleantech because they want to make a lot of money, right?
Like, a lot of people are, it's crazy how many people are moving
into cleantech because they feel this, you know, maybe they've just
had kids or something like that.
Like, they have an existential dread
of what could happen if these problems aren't solved, and
that's certainly why I'm here.
Yeah, it is interesting.
And the fundraising market is always a up down question mark thing.
I don't know what it's like in Canada.
In the United States, it's a little rough right now.
RaphaÃ«l: Yeah.
I feel like, given that we're a small ecosystem placed next to a
behemoth we kind of get dragged along, is what it feels like.
Marshall: there's a lot of good companies in Canada,
RaphaÃ«l: that in mind, I'm curious, you mentioned the motivations
of people going into cleantech.
how does that affect setting a vision, mission for your company, how do you
hire, all of these operational things tie into, why people approach this sector.
Marshall: Yeah as a startup, we have funding limitations.
we're not going to be able to pay as much as Peloton, the pull of
climate tech allows you to get better people than you otherwise would.
RaphaÃ«l: yeah,
Marshall: especially in New York City, where we're competing against, ad tech,
where you're getting paid way more than we could ever pay you I think that's the
biggest implication, of working in this, you get people who are really passionate
about it don't necessarily need to make, a million dollars a year and are still
going to put a lot of effort into it,
people are driven in this market because it is so important.
RaphaÃ«l: I think something like do well by doing
Marshall: Yeah.
RaphaÃ«l: yeah, I totally get it.
Marshall: Usually co opted by industries that are just
greenwashing what they're doing
RaphaÃ«l: can you speak to that, because you're probably competing with a lot of
people who are doing greenwashing, who are saying that they'll provide some solution
that competes with you, but isn't actually
Marshall: I mean, Yeah, there are a few peppies that I have.
I'll share
one without saying anything bad about the carbon credit market,
right?
That's made a lot of companies.
And it's a, valuable market.
We don't do anything in it because If you entomb carbon for, a thousand years
or 10,000 years, whatever it is you get paid $50 for that ton of carbon entombed.
If you avoid the burning and creation of a ton of carbon, you get $7.
So like the market is like.
Is really bizarre.
And, and the thing I want to point out in the market, which is ridiculous
is how not cutting down a forest has kind of overtaken the entire market.
And if you tell them you're not going to cut down your backyard,
you can get a lot of money for it.
there's been a lot of research recently showing that is, Horrible.
it doesn't work at all.
And there's enormous amounts of fraud.
that whole market is, is kind of messed up because of an
aspect of greenwashing, right?
Like, Oh, I'm not going to cut down this thousand acres.
And you're going to pay me money and then it's going to suddenly create this huge
benefit on a climate sense and it doesn't.
RaphaÃ«l: I'm kind of curious, actually I realize we haven't really
talked much about the product, tell me more about the actual product.
you mentioned the story that started it all, so I think we have a sense of it.
I've looked around your website and checked it all out, but yeah,
tell
Marshall: Yeah.
So we have one product that is the basis of all our growth And then
a third that's kind of feature
and try to figure out the best way to introduce it.
So we started out with this cozy,
It's an efficiency product for rare buildings.
Let's get control of these systems because they're horribly wasteful.
It's one of the most inefficient building stocks in the world.
it works by, stopping heat from transferring into a room when it
has enough heat, since the system is, pressurized steam if you're not
condensing in one area, That steam remains pressurized to flow to a low pressure
area, where steam is condensing, where heat is being transferred to a room.
we're able to balance out the heat transfer in a building,
which stays between 25 and 40%.
RaphaÃ«l: Okay.
Marshall: too many details about the physics the second product.
And so that's what we should do with all our radiator heated buildings, right?
There's two things you can do in a building with radiators,
You can make it more efficient
or you can electrify it.
And
it turns out that electrifying these buildings is outrageously hard.
If you had to estimate how many buildings in New York City of the type we work
with, like larger multifamily have electrified, what would you guess?
RaphaÃ«l: I have no idea.
Marshall: Two complexes.
There's a few smaller buildings, on the order of 10 or 15
apartments that I've electrified,
but of the larger buildings, there's two,
RaphaÃ«l: two.
Marshall: And one is an NYU dorm
RaphaÃ«l: Okay.
Marshall: one was a NYCHA, New York City Housing Authority conversion.
they're doing these conversions to make them privately owned by
a corporation for like 99 years.
in exchange the corporation has to put a lot of money into
the building and upgrade it.
both complexes started their work three years ago.
They're both vacant.
RaphaÃ«l: Yeah.
Marshall: Still, because the work's still
being done.
So it's three years of vacancy and tens of millions of dollars to do it.
the amount of work required and the cost to do it is just crazy.
And no one's ever going to do it if they're not required.
And why you can do it?
Cause they have more money than anybody.
And NYSHA no longer requires it for their contracts because it was so onerous.
The barriers are vast.
RaphaÃ«l: Yeah.
Marshall: Finances is one part.
And that's a big one, but procedurally, it's a bigger one.
buildings have heating plants.
let's talk about America.
Buildings have heating plants.
You paid for your heating system.
Are you gonna replace it before it dies?
The answer is almost always no,
because nobody does that.
So you wait until it dies.
When do you think heating systems typically die?
They break when used.
RaphaÃ«l: Okay.
Marshall: they break in
RaphaÃ«l: When you need them.
Marshall: it's an utter emergency, and 96 percent of all heating plant
failures in the US are replaced with the exact same system.
So you lock in another 20 or 30 years of natural gas consumption.
And this is what happens everywhere.
if you think, like, that's the US number.
Multifamily, like you have 100 families now that are not heated in February?
there's no way they're going to consider a sustainable upgrade.
RaphaÃ«l: Yeah.
Marshall: Our pathway is let's get control of our systems.
I mentioned
product number two is called hybrid electrification.
what we're doing with this product is deploying a commodity heat pump
that works above freezing and you use the radiator system below freezing.
So you can install it.
Now we attached to this heat pump.
A thermal battery system, so you can do demand response and in all the
regions where you find these big steel and steam buildings, demand response
and grid services are valuable because you have a stressed electricity grid.
And so we can monetize the demand response for these systems and generate
enough revenue to pay for the entire implementation of the technology.
So we literally install it for free in buildings.
Every day that's not peak air conditioning, we use that battery
to do what's called peak shading.
And so in these, this is getting really technical.
I apologize.
But in these big buildings, they're on a commercial rate typically and half
their electricity charge more or less is how much is called the demand charge.
what's their maximum draw during the month or day or whatever their rate is.
we reduce that a ton because we shave all the, the conditioning consumption
to an off peak time the end result is we monetize demand response to
pay for implementation, and then we reduce their peak demand charge
so much that heating costs less than natural gas heating.
RaphaÃ«l: Okay.
Marshall: And so it's free and it lowers their operating costs.
And it turns out that 75 percent of heating is done
above freezing temperatures.
So we can decarbonize for 75 percent for free.
So that's pretty much it.
That's step two.
And step two lines you up for step three, which is when the boiler dies,
we're in the building with a plan to fully electrify, and we've already installed
all these heat pumps and units designed to integrate into a full electrification
solution, so the final step costs less than the boiler replacement.
everything we're trying to do at Kelvin is to create a pathway
towards full electrification that is driven financially.
There's no emotion
RaphaÃ«l: Yeah.
Marshall: to be in this equation for it to move forward, because there is no emotion.
I mean, there's people who run these buildings, but they're businesses.
They're fiduciarily responsible to make money.
And we just need to align that with decarbonization.
RaphaÃ«l: That makes a lot of sense.
If there's no reason for them not to do it.
Why wouldn't they?
Cool.
No, that was really cool actually.
And so long term, what's the pathway to getting all of this in
every building around the world?
Marshall: Yeah, I mean, we're deploying a lot of units this year.
We're 10x ing our deployments.
And that's the Cozy.
We're releasing hyper electrification late next year, commercially, and
that'll be a free upgrade to all existing, Cosy deployments, more or
less, and then we'll start selling in multiple cities next year, and
eventually we'll start, doing these free upgrades to hyper electrification,
I think the market's gonna like a free thing that removes, liability.
our job is literally to make it free and make buildings
money as a course of business.
And if we can do that, we can deploy it at scale.
RaphaÃ«l: I love it.
That's awesome.
can I ask which markets you're moving into?
Marshall: Where, urban areas have good energy efficiency incentives and
have grid issues that will pay for it.
And that's Chicago, Boston a lot of the Exelon territories
you know, Baltimore, et cetera.
And I think that list will expand because energy efficiency is
going to become more important.
grids are only going to get more stressed electrifying heating in the winter.
And so those demand response revenues will start creeping up.
RaphaÃ«l: out of curiosity you ever thought about Canada?
Marshall: yeah, we're looking at Toronto already.
I think we have a project that's, you know, we're scoping in Toronto.
so that's one of the places we've been speaking to.
RaphaÃ«l: How
about Montreal?
Marshall: Montreal as well.
I spent a summer in Montreal, I went to McGill for summer school.
It was awesome.
RaphaÃ«l: I study at Concordia, and I feel like a lot of
Montreal buildings could use your
Marshall: Yeah.
although I will say like, you know, it's a more aggressive cooling market, right?
Or heating market, right?
So it's, it's much colder there.
And so,
you know, depending on where you are on the earth, you're going
to need more or less cooling.
So you get farther south and we electrify more with this hybrid approach.
further north, you electrify less.
That doesn't mean it doesn't make sense at all.
It's just that you get less decarbonization over the course of
a year, the further north you go.
it all depends on the economics.
it still sets you up for full electrification to a certain extent.
But I see it being valuable everywhere.
And then, if we're in Canada, we can always do a cold climate heat pump.
It's not like a huge delta.
But there is a technological jump and a cost jump when you go to cold climate.
RaphaÃ«l: I'm kind of curious if you have any advice specific people who
want to come work for you, people who want to work in the field, people
who want to get into sustainability,
Marshall: I use recruiters very rarely because I never find
who I want through a recruiter.
It's mostly network.
if you want to get into cleantech, go to the cleantech events, the
business plan competitions, but more so go to the accelerator events go
to climate week and those events.
That's where you meet all the entrepreneurs.
when you.
speak to people and you have a common interest you learn more about it.
it's very hard to get into an industry like that when we've
never worked in a startup.
And there's not clear overlap between what you're doing, what they need.
But you can move in that direction.
You can start doing projects with companies and things like that.
And it really depends on where you are in your life, right?
If you're in university, super easy.
if you want to get into it, after you've had a career for 20 or
30 years, it's a lot harder, but it's still definitely doable.
But I'd say the first step is really to meet those people, talk to them, get
to know them, offer help where you can.
Show that you can bring a lot to the table.
RaphaÃ«l: Awesome.
I love it.
it is that time.
I'm going to ask you for a product that you'd like to shout out.
Marshall: Yeah, I think my favorite thing right now is the computer I'm
using, which is a Framework computer.
I hate buying pre assembled laptops
that then you throw out and buy a new one.
So the framework is awesome because it's not that expensive.
it's as much as a normal laptop.
But you buy you know, The memory, you buy the hard drive, you buy the keyboard,
you buy the mouse, you buy the screen.
And if any of those things break, you can replace it
RaphaÃ«l: Yeah.
Marshall: buying a new laptop.
So I'm a big fan of them, and I met their director of products the other day,
RaphaÃ«l: Oh, cool.
Marshall: totally awesome.
RaphaÃ«l: Do they have people in New York?
Are they New York based?
Marshall: No, I met them at a Yale event,
a Yale entrepreneur, a client,
cleantech event.
RaphaÃ«l: Okay.
Yeah.
So, yeah.
That's awesome.
I love it.
Cool.
Well, thank you so much, Marshall.
I've learned a lot.
it's really interesting to understand your journey and your industry.
I feel like I haven't gotten the opportunity to talk to a lot of
people in this kind of like B2B to C sort of hardware is kind
of unique and interesting to
Marshall: interesting.
Yeah, people are often very surprised about how the sales process goes
just by virtue of who we're actually selling to and who benefits is unique.
RaphaÃ«l: Well, thank you so much for the chat.
Marshall: Thank you for your time.
RaphaÃ«l: All right.
See ya.
Marshall: See ya.
RaphaÃ«l: folks, that was my interview with Dr.
Marshall Cox, founder of Kelvin.
I learned so much in our chat, I really hope you did too, I hope you enjoyed it.
If you like the work that we do, make sure to hit that like and subscribe button
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See ya.