Base Power Company: Chapter 2

2025-04-15 20:54:08

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Hi friends 👋 ,

Happy Tuesday!

There aren’t many generational companies. There can’t be.

So I set a goal for myself that instead of writing about as many companies as I have in the past, I want to find the ones that I think have the best shot at becoming one of the special ones and write about them year after year, to learn and share how they operate in real-time, before history has a chance to gloss over their stories. Hopefully, by the time some of these companies have IPO’d, I’ll have basically written the book on them.

Base Power Company, I believe, will be one of the special ones. I had a hunch when I wrote about them last year. The strategy was sound and the team was killer. I have a stronger feeling now. They have executed violently over the past year, built an increasingly talented team, and raised $200 million from excellent investors. Most importantly, as they’ve tackled the inevitable challenges of building a vertical integrator in the massive, critically important power market, their ambition has only grown.

So this is Chapter 2 in what I hope will become the Book of Base. It’s a long one, so if you want to read the whole thing online or save it for a cup of coffee, click here.

Let’s get to it.

Base Power Company: Chapter Two

When I talk to LPs about investing in Not Boring Capital, one of the most common questions I get is something like, “What’s the biggest mistake you’ve made?”

I have made a lot of mistakes, so there are a lot of ways I could answer it. They might want to hear that I shouldn’t have invested in a certain company that failed, or that I was too willing to overpay for certain companies. But the truthful answer, the one I give, is this:

I didn’t invest in Base Power Company last year when I had the chance.

In May 2024, as part of the company’s public unveiling, I worked with Zach Dell, Justin Lopas, and the team to write a Deep Dive on what they were up to.

Before I started writing, Zach said that there was a $60 million round closing led by Valor Equity Partners at a $300 million post-money valuation. He asked if I wanted to invest.

“That’s a much higher price than I’m investing in out of this fund,” I said, like a dumb robot. Plus, I thought, the company hadn’t launched. It hadn’t generated any revenue. It hadn’t even installed a battery on a real customer’s home! “I appreciate it but I can’t unfortunately.”

Then I wrote the Deep Dive:

And the day after I hit send, I texted Zach something like “I get it now. Please let me invest. PLEASE, for the love of God.” And he said, rightly, something like “I’m sorry, the round is closed and we’re already getting a lot of interest for the next one at a much higher price. I wish you had come in when the round was open but I’ll let you know the next time we’re raising.”

That, I thought, was that. I could only imagine how high the price on the next round was going to be. I’d laid out the argument myself! This might be one of the most valuable startups of this generation, one of those “n-of-1” companies you hear about. Those don’t come cheap.

After the Deep Dive, Cole, who runs growth at Base, sent me a Base poster as a thank you. It’s a really nice poster. I didn’t have the heart to hang it up.

For the next 7 months, when Zach forwarded me an investor update, or when I saw a tweet about Base doing something good, it was with the mixed emotion of watching an ex who you still care for be happy with someone else. I wanted Base to do well - I like the team, I like the mission, the country desperately needs what they’re selling, and I’d look a little smarter if a company I wrote about at launch became the next SpaceX - and I was happy for them. But I was also sad to not be a part of it, and a little mad at myself for letting a rule around price get in the way of what I thought had a chance to become a generational company.

Then in early January, I was texting with Zach when he mentioned that they were raising again and asked if I’d want to participate. We hopped on the phone that night, and he told me that Antonio Gracias, the Valor Equity Partners Founder and Chief Executive Officer and Base’s one outside board member, preempted the Series B with a term sheet after the company’s December board meeting.

Although the price was a good deal higher than I should have paid less than a year earlier, I asked Zach to send me the data room.

What I saw in there was that in the seven months since I’d written about the company, and since it launched, Base had become a real business. It had installed over 1,000 batteries on Texans’ homes, signed a partnership with the homebuilder Lennar, and perhaps most importantly, continued to build out one of the most impressive teams in tech.

When I wrote the Deep Dive, the story was the company’s strategy and the team it built around it. But they hadn’t done it yet. Demand was still a question. Operations were still a question. The ability to build software to help balance load and make money from the batteries was still a question. Like any young startup, Base was a series of questions.

Now, Base had started to answer those questions and the answers looked good. In a conversation with Molly O’Shea on Sourcery, I laid out the Base thesis I’d already written, but added something new that they’d proven: “They are executing violently.”

So I invested. I couldn’t not.

Definitionally, you don’t get many chances to invest in generational companies.

The Generational American Electric Company Thesis

While intelligence gets all of the attention, I’m increasingly convinced that what we’re entering is the Electric Era. Cars, robots, flying cars, drones, appliances, boats – anything that can go electric is going electric, because electric performs better. Even intelligence is reliant on access to electricity.

At the same time, the grid charged with delivering that Invisible Gold is failing to keep up. America is not adding new transmission lines at anywhere near the target rate the Department of Energy (DOE) set for the country.

But that’s OK, actually. So much of the existing transmission sits underutilized the vast majority of the time. We can do much more with what we have. It is clear that batteries are the answer.

Batteries, installed right where demand happens, can soak up electrons when they’re cheap and when the grid is open, and discharge them when they’re expensive and when the grid is congested.

That’s better for consumers, who get cheaper, more reliable electricity. And it’s better for the grid, because it spreads out electron traffic throughout the day. “The grid is a highway you only drive on at rush hour and no cars the rest of the day,” Trust Ventures’ Sal Churi, an early Base investor, told me. Batteries control the flow of traffic.

All of this, and more, was the basis for the strategy that Zach and Justin shared with me for the last piece – the “Diagnosis,” in Richard Rumelt’s Strategy Kernel.

At the time, I realized that batteries were important, and that they would become more important as America electrified everything and added more variable renewable energy to the mix.

What I’ve come to believe since then is that batteries are the most important piece of the American electricity puzzle, and the layer positioned to capture the most value in the transition.

Software-enabled batteries, like the one Base makes and installs, are Electricity’s Operating System. They provide the abstraction layer between generation and consumption. An electron produced at any time flows to a battery, where it can be used at any time. I will expand on this in a bit.

As I wrote last time, I think Base’s is a brilliant strategy. Not just what they’re doing, but how. When I wrote my series on Vertical Integrators, Base was the first example I used. They don’t manufacture battery cells – the commoditized and hypercompetitive piece dominated by China – but do pack assembly, so that they can take advantage of the competition-progress in cells. It does a lot of hard but achievable things, and integrates them. The integration is the innovation:

To deploy batteries and fix the grid, Base can’t just build a battery; it needs to build a vertically integrated power company around batteries.

The power company needs to excel at a whole lot of things: manufacturing, finance, distributed systems, power trading, customer acquisition, consumer software, regulatory, and installation, to start. It needs to become a Retail Electric Provider (REP) itself.

All of this remains true.

What has changed, why I am more confident now that Base will build the Generational American Electric Company, and why I was happy to pay a higher price to invest is that all of this is really, really hard, and over the past year, Base has proven that it can execute ahead of schedule against a really, really hard problem.

“Everyone,” says Mike Tyson, “has a plan until they get punched in the mouth.”

Iron Mike’s implication is that, once punched, weaker fighters abandon the plan. Great fighters stick to it. But there’s another class of fighter not contemplated, one that feels the force and angle of the punch, learns something of their foe through it, and uses that information to improve the plan in real-time.

Base Power Company has willingly taken mouth punches and what they’ve learned in the process is that the opportunity is both harder and bigger than they initially realized.

When I asked him what’s impressed him most working with Base as their Board member over the past year, Antonio at Valor told me that, “They listen and grow fast. When you deal with young founders, you separate them quickly into people who listen and don’t, people who are open and curious, who really want to understand, who are very focused on getting better every day. They have that mindset – it’s the right mindset to win – small changes over time, whatever the challenge.”

That is what you want. A dramatically challenging endeavor that, by nature of its difficulty, means that the market is wide open to those small few who can pull it off, tackled by a team that is hungry to learn and improve. That Base is operating in the largest market there is, one dominated by sclerotic centenarian utility incumbents, at the OS layer, from which it can earn the right to expand up or down, is all the more reason to be excited about what this looks like if they execute.

I’m not alone in my excitement. There’s a reason that so many talented people are moving to Austin to build America’s Power Company. Plus, Valor’s term sheet set off a bit of a frenzy. A $100 million round turned into a $200 million round as Lightspeed, Addition, and a16z invested alongside existing investors including Valor, Thrive Capital, and Trust Ventures. Addition’s Lee Fixel is joining Valor’s Antonio Gracias on the Board. If you want to build something really meaningful, it’s hard to ask for better capital partners.

Backers like that are a moat, too. It’s hard to imagine who would even fund a competitor to Base at this point. As I wrote in Vertical Integrators: Part IV:

Among startups, I expect we’ll see much less competition. The companies that show an early ability to execute against a big and credible enough vision will attract the top talent and the limited pool of investors willing to back such hard-to-underwrite companies, sucking the air out of the room for would-be challengers.

This, of course, does not mean that this will be easy. Each Base team member and investor I spoke to was quick to point out the million things that might go wrong. It’s easy for me to write a smooth story; it’s harder for Dana Paz, Base’s Head of Deployments, to recruit, train, schedule, and manage the dozens of electricians who will install thousands of batteries across the great state of Texas this year alone, and then tens of thousands more all across this great nation in the many years to come, as just one of many examples.

What it does mean is that Base is better positioned than any other company to fix America’s grid and usher in the Electric Era. It’s competing against itself, and against a system so mind-numbingly complex and resistant to change that it will take the best efforts of the best talent in the country to win.

So today, after hours of conversations with Base’s leaders and investors, and after getting to feel the energy in Austin for myself, I’ll share a snapshot of where Base is today, how it’s gotten here, where it might go in the future, and the size of the prize up for grabs. If all goes well, I plan to write a Deep Dive on Base Power company every year for the next decade. There are very few companies that have the chance to be generational, and I think there’s a lot to learn from studying the ones who do in the middle of all of the real-time messiness.

For this piece, now that I’m an investor, I have a main goal: I want to convince you, smart, curious, hard-working reader, to consider packing your bags and heading to Texas to build the American Electric Company. There is an ever-expanding set of problems to solve and opportunities to conquer, and the consequences of getting it right are massive. Go work at Base.

Don’t make the same mistake I did. Don’t pass on Base. In this Deep Dive, I’ll make the case.

The House

If you spend even 30 minutes in the Base Power Company HQ in Austin, Texas, you’ll hear about The House.

As in, “Back when we were at The House…” or “So when I started here, it was just a bunch of us in The House.” Having worked at The House is a badge. It says, “I’ve been here since the scrappy early days.”

The House was Sal Churi’s. The Trust Ventures Managing Partner and Seed-round Base investor, alongside Thrive Capital, had been meeting with Justin and Zach weekly for four months before they started the company. At one of those meetings, they told Sal that they were looking for an office. He joked that he’d just moved into a new house and hadn’t yet sold the old one, so maybe they could just use that. They told him that sounded perfect, because they wanted the house vibe.

“Honestly, I think they did it because they knew I’d let them do whatever the fuck they wanted,” Sal told me. “They bolted a DeWalt kit on the living room walls. They took the laundry room out and replaced it with giant inverters. They thought, ‘We can burn this house down and he’ll be OK.’”

The House was intentional. It set the tone. The tone was Thumos, the Greek term that Sal said represents “camaraderie and fighting spirit” and Google’s AI summary describes as “the spirited or passionate part of the soul, often associated with courage, anger, and the desire for recognition, and is a driving force behind action and striving for honor.” Which sounds mostly right.

Driven by that spirit, Zach, Justin, and the early Base team members didn’t burn the house down, but they did burn the midnight oil. “I’d get texts from my buddies across the street,” Sal said. “These guys never leave. They’re animals.”

That was intentional, too. A company is a reflection of its founders. “Apple,” David Senra says, “is just Steve Jobs’ 10,000 lives.”

When Zach and Justin met while Justin, then head of manufacturing at Anduril, toured Zach, then an investor at Thrive, around the defense vigintioctocorn’s facilities, they recognized that they had opposite and complementary skill sets but almost exactly the same work ethic.

One thing you’ll hear from everyone close to the company, and that you’ll certainly hear from me today, is that the Base Power Company team is stacked. Ex-Tesla, SpaceX, Anduril, you name it, and not just people who’d worked there for a year, but people who ran large pieces of those businesses.

What is harder to appreciate from the outside is just how hard those people – many of whom, on paper, probably don’t even need to work – work. How deeply the culture of The House is infused in the culture of Base. The Thumos. The fact that even big things start small, by hand.

Grand plans that seem inevitable on paper feel inconceivable in the moment-to-moment details. Dana explained:

When I started there were zero batteries in the ground... I was doing the site survey with Cole [Jones, Head of Growth] in person, driving house to house. I was hand making the permitting package... I remember Zach being like, ‘We just have to get to one a day. That's such a cool goal.’ I remember being like, ‘It's impossible.’”

It turned out, though, that it wasn’t impossible. Dana and Cole did it, one at a time.

Then Dana moved on to a bigger challenge: scaling from one to many daily installs, and from herself to a team.

“We used to have to go to every install,” she said, “and now it's like actually we only have to talk to the installer if they have a problem.”

Even if she wanted to, it would be physically impossible for Dana to make it to every install. Base is now in three markets: Austin, Dallas, and Houston. In the company’s March investor update, Zach wrote that the Base team did more than 300 installs in March, more than 15 per working day on average. On the best day, they installed over 20.

That seems like a very big number today. In a year, it will seem very small. At some point in the future, 22 installs will be a really bad hour.

Taking a snapshot of Base every year necessarily paints a too-smooth picture, because things are going well.

From practically no batteries installed last year to over 1,000 now, including hundreds installed via a partnership with Lennar, one of the country’s largest homebuilders. In March, the team grew the installed MWh by a third MoM for something that is much harder to grow by a third than software. From a small enough team to fit in The House to a team of 78 plus 20 field crew team members driving around the state installing more and more batteries every day.

But the path isn’t smooth or inevitable. It’s made up of thousands of little decisions and actions taken over the course of 12 hour days, day after day.

Justin was blunt, “In the day-to-day it does not feel like things are going well, honestly.”

Valor’s Antonio Gracias, who has spent more time in the guts of the country’s most successful Vertical Integrators – he served on the Board of Directors at Tesla until 2021, still serves on the SpaceX Board, and is a Board Observer at Anduril – told me that’s the nature of an operationally complex business like this.

“At any given moment, if you ask them about the biggest challenges,” he explained, “They’d point out three to four micro problems in addition to the larger macro problems – design for use, drive cost down, get distribution. How do you manage all of that to get better over time? If you do, though, that’s the flywheel.”

At this stage in the company’s life, now that the company is out of The House and into the field, that is the yin and yang story of Base. Given that it’s picked the right strategy in the right market:

• What makes it hard is what makes it defensible.

• The more challenges it identifies, the bigger the opportunity becomes.

While it might feel like things aren’t going well in the day-to-day, each pain point uncovers more potential. “The deeper we get into it, the more opportunity I think there is,” Justin told me. “And the opportunity does not stop at sending someone their electricity bill each month.”

To some extent, this is true of every company. Dealing with customers and partners exposes you to more problems to be solved than you can come up with off the top of your head. But given where Base operates in the electricity stack, it is uniquely positioned to eat very big problems.

Heads up: this essay might cut off in your email in a few paragraphs. To keep reading:

Click Here to Read the Full Essay Online

The Operating System for Electricity

I recently interviewed Julian Lehr for Hyperlegible, and when I asked him which essay of his people should read, he recommended The power of defaults. Good rec. In the piece, he provides a very useful way to look at tech ecosystems:

If you want to understand the power dynamics between different platforms, aggregators and other players in a tech ecosystem, it’s better to look at them as a vertical stack with different layers.

On each layer of the stack, companies are trying to create value and to capture value. The lowest layers of the stack are typically the most powerful. If you are able to take control of a layer, you can dictate the terms of most of the value creation and value capture that is happening in the layers above you.

As a result, you see companies trying to

A: create layers on top of their business (everyone wants to be a platform)

B: move down the stack to get closer to the base layer (to increase defensibility)

What is the base layer?

The base layer is the final interface between the stack and the end user – which is typically an operating system tied to a piece of hardware. This is why atom-based network effects are so powerful: They help companies gain control of the most powerful layer of the stack.

I swear I didn’t make the connection between “Base” and “base layer” before copying that in just now. What I did realize immediately upon re-reading that essay is that it’s a perfect way to describe what Base is trying to do.

“The base layer is the final interface between the stack and the end user – which is typically an operating system tied to a piece of hardware.”

That sounds like Base, right?

In the first Deep Dive, we covered the dizzying complexity of America’s power grid and Base’s plan to serve as an interface between that complexity and users who just want to make sure their power is always there when they need it. If you want a refresher, you should pause and read it.

Base does this by installing a battery, writing software to charge and discharge the battery as needed, and serving as the Retail Electric Provider (REP) that customers interact with to pay their bill every month.

This storage + software combination is the base layer of the grid.

Julian’s whole essay could be re-interpreted as an argument for Base. He talks about why industries that end up winner-take-all or winner-take-most historically have been atoms-based, for example.

And about “why defensibility is just about real estate.” Base would agree. A big part of the reason they are moving so fast and why they raised so much is that once you own the battery real estate on a customer’s home, you are very hard to replace.

But the part I want to focus on is this:

“If you are able to take control of a layer, you can dictate the terms of most of the value creation and value capture that is happening in the layers above you.”

Because that is Base’s strategy: own the base layer, expand down into generation and up into consumption. That is why, the more they dig in, the bigger the opportunity becomes.

Some of the things Base is discovering are things that they kind of expected coming in. Jared Greene, the Head of Software at Base, told me for the last piece that “the heavy-hitter question is: will you be able to get telemetry data faster than every 5 minutes? The answer is definitely yes. We’ll have sub-second data, minutes aren’t in our vocabulary.”

Now, they do. When I spoke to Jared in Austin, he showed me how Base has delivered on the real-time monitoring capabilities he described in our previous conversations. The system now processes data from their battery network much faster than the industry-standard 5-minute intervals, giving Base visibility into grid conditions as they happen. This capability, which Jared had emphasized would be crucial to their strategy, is now operational and supporting their power trading operations. It’s also exposing areas where the existing infrastructure is decades behind what it would be in terms of monitoring and verification.

Which is to say, there’s one opportunity to expand from the Base layer to provide utilities with hardware and software they need to actually do real-time monitoring and verification. The grid is a haystack full of shiny needles for those willing and able to dive in.

Erin Price-Wright, the General Partner on a16z’s American Dynamism team who led the firm’s investment in Base, told me that this is what got them really excited.

“We didn’t invest because we’re interested in investing in a consumer battery company,” she said. “What gets interesting is when you start to think about the way a decentralized battery storage system is a step to modernizing the grid, as a step to building software to handle grid load that I don’t see any other angle to attacking.”

There are many ways to monetize that modernization. Do you charge utilities for software that you can uniquely build because of your distributed fleet of batteries? Do you partner with them to bring batteries to their millions of customers? Do you build your own utility, backward integrating into generation and even pieces of transmission?

This is not easy, and it’s not possible to do with Base’s current assets. We talked about backward integrating into generation in the last piece, and that might be a part of this, but it might also mean moving to the pieces between the plant and the home, like transformers and substations. That adds complexity to an already complex business.

Which to do in which order is a question of timing and team and capital and strategy, but the beautiful thing about operating at the base layer, about running the Operating System of Electricity, is that you have the choice. Much as I love generation technologies like nuclear and solar, and as much as electric products like Teslas and drones just perform better, it’s hard to imagine them integrating further downstream and upstream in the grid, respectively.

It is easier for Apple to make its own chips and apps than it is for chips and app makers to own the phone’s OS.

At the risk of stretching the analogy, the equivalent graphic for Base might look like this:

Except, again, we are talking about electricity, a trillion dollar market that is going to grow even faster than many people expect as humanity pushes all work that can be done by electron-powered things to those things.

And over the past year, I’ve become convinced that the battery layer is not just complementary to the drivers of that growth – renewable generation on one side, electrified products on the other – but that it is the single best layer from which to both create and capture value in the Electric Era.

Antonio at Valor explained why Base’s position is so strong relative to the other layers. “The sun is the largest nuclear reactor we can conceive of, and it’s free,” he said. “Photons are free. What will matter is storage.”

To quote another recent Hyperlegible guest, Alex Danco, from his classic Positional Scarcity, “In conditions of abundance, relative position matters a great deal.” When photons are free, the ability to control their use over time becomes the scarce resource. It is the bottleneck, and Base is working to control it.

“If you think about the entire energy system, the battery is the limiter,” Antonio explained. “If you build the thing that’s most valuable in the system, you can integrate in either direction.”

But Yin. Yang. The more valuable the spot, the harder it is to win it.

Base has to excel at so many things at such a granular level, and then fit those pieces together, in order to gain and hold that spot. And then it needs to do more really hard things – some technical, some regulatory, some human – to expand in the way that only the base layer even has the option to expand.

The 2025 Base story is about doing thousands of tiny things consistently well – and learning when some things inevitably don’t go well – in order to win one of the biggest prizes there is.

So let’s zoom back into the little things.

How to Build the Base Layer

Here is where Base Power Company is today.

It has installed over 1,000 of its Gen 1 batteries in homes across Texas. It has hired and partnered with dozens of electricians and installers in the field to install them. It signed and has been executing against its partnership with Lennar. It also signed and is executing against its first partnership with a regulated utility, Bandera Electric Cooperative. By optimizing its trading algorithms, it’s increased the amount of revenue it can generate from each battery. It’s also discovered that utilities are willing to pay even more than the free market, because Base can save them from making expensive transmission upgrades. As it has gotten more certainty on its unit economics, it’s changed its pricing model - from ~$3,000 (the full cost of install) upfront, to $595 upfront and a monthly fee of $19 – which led to a 30% MoM increase in signed customers.

It is now working on its Gen 2 battery, which it’s currently testing in its Austin HQ, where, among other tests, Base puts the battery in a rain simulator for seven days to ensure reliability. It’s finding the right mix of in-house and subcontractor installers, between customer experience and flexibility. From Cole knocking door-to-door, Base’s growth strategy has become a three-legged stool: direct-to-consumer, channel partnerships, and utility partnerships. Through trial and error, its messaging has shifted from “the most affordable way to backup your home,” to “the only energy provider that delivers reliable and affordable power.” If it delivers on that, it will earn the right to position as “America’s Power Company.” On the software side, Base is now collecting and acting on real-time information from its network of batteries. The company can see outages as they happen, and respond immediately to help balance the grid. It uses the unique information it collects to trade power in both the real-time and day-ahead markets. As it expands from purely deregulated markets to regulated utility partnerships, it’s building software to help visualize and manage its distributed fleet of batteries as one resource. It is now competing with centralized storage solutions - large battery farms - to win utility contracts, in Texas, and now, beyond. On the financing side, its $200 million raise and early unit economics position the company to raise the non-dilutive capital it will require to grow efficiently.

If that seems like a lot to throw at you in a couple of paragraphs, imagine doing all of it, and working to make sure it all fits together seamlessly, even as each individual piece grows in scope and complexity.

But I told you we would zoom in. That’s still zoomed out. That zoomed out painting is pointillist, made up of thousands of little dots. To make the painting, nail the dots.

What Base is building is a vertically integrated system, not a single product, which makes it hard to write about. “Move one thing here, and something else changes there. Move that and something else shifts.” But there is a rough order: sell a battery to customers, make the battery, then install it, grow the customer base, then connect all of the batteries with software, then do new things that you can only do once you’ve done all of the others, like partner with regulated utilities.

To understand how all of that happens, I flew down to Austin to spend time with the people responsible for each step in that journey and see the magic for myself. This is what I learned.

Growth

The counterintuitive thing about a company like Base – a company that has to do so many hard things right, in concert – is that the biggest chunk of uncertainty might actually come down to a question every business faces: how do we get customers to buy our product?

Most of the Vertical Integrators we talk about – including SpaceX and Anduril – sell to a handful of very large customers, often government customers. They can sell on specs to customers who need certain capabilities. Tesla is different; it has to sell to individual customers. But even those customers were going to buy a car; Tesla’s job is making it sexy to buy their electric car. Starlink is different; but Starlink gets to sell as a SpaceX product now that SpaceX is SpaceX.

Base, on the other hand, is selling energy storage to customers who probably weren’t in the market for energy storage, who might have a generator but almost certainly don’t have a battery, who pay bills to a power company but at the very least don’t love it, and who’ve never heard of Base Power Company.

“This is a harder one; it requires consumer behavior change. It’s net new tech to an average homeowner,” Terrain Capital’s Willem Van Lancker, who worked with Zach at Thrive and whose firm has invested each round since Base started, explained. “Consumers don’t think about power, which is a blessing, but Base wants to say, ‘Hey, that’s something you should consider a little bit more.’”

As with almost everything Base does, on the other side of the challenge lies an opportunity.

“There are few categories as large as energy that lack a definitive consumer brand,” Willem said. “It’s a wide open space.”

And as with almost everything that Base does, turning the opportunity that the team and its investors see to one that it actually captures, takes hard, day-in-day-out execution.

In the last Deep Dive, the Strategy Deep Dive, we talked a little bit about the potential for Base to build a brand consumers love, and mentioned that Cole Jones, who worked as a Senior Product Growth Manager for Starlink at SpaceX, was on the job. Starlink did $7.8 billion in revenue selling hardware with a service to 4.6 million customers last year. That’s exactly the experience you want to bring to bear on this problem. As big and sexy as Starlink is though, building an entirely new category from the ground up takes an entirely new set of tricks. It takes hitting the actual ground.

“My first year goal,” Cole told me when we spoke in Texas, “was to find product market fit. Zach wrote the initial memo, he’s like, ‘Hardware + software, we’re going to disrupt this large, undisrupted industry,’ very Zach-level, strategic thinking. So I had to figure out, ‘Okay, hardware plus software. What does that mean to a customer? How do we translate that into something?”

That meant turning a complex technical system into something that made sense to customers, like he’d worked on at Starlink: “Internet, anywhere.” For a pure software company, maybe you’d A/B test a bunch of copy and see what worked. For something that was going to go onto peoples’ homes, though, Cole needed to go to peoples’ homes.

“My first week, Zach and I door-knocked,” he remembered.

“Get out into the field, go to customers – the Stripe model – and a lot of what I learned doing that I use today. You have ten to fifteen seconds to make an impression, often less. Most people don’t answer the door for you. Some people answer with a gun and they’re a little frightened by you.” This is Texas, remember, but Cole assured me that no one had ever pulled a gun on him, even if they weren’t shy about having one holstered. The point is, though, that “you have to make a trusting impression immediately.”

Specifically, in case you’re planning to door knock in Texas, after you knock, you need to step back, put your hands in front of you, put a slight smile (not too big) on your face, and look not directly at the door but off slightly to the side. Then you have to get two nods.

“Are you aware of the rising volatility on the grid?”

Nod.

“Have you seen your energy costs rise?”

Nod.

“Well, we have a solution to fix both of those things. I’m Cole. I’m a local entrepreneur…”

And then you have a conversation, where you learn what resonates and what doesn’t.

“I’d start talking about this cool new technology that’s going to be cooler than Tesla and cooler than Starlink, engineering-led,” Cole makes fun of himself, now, “and no one gives a fuck! They don’t trust you! They’re like, ‘What do you mean a free battery with your neon text? None of that makes sense to me.’”

What’s cool is that you can see the results of Cole’s door-knocking right on Base’s homepage.

Here’s the website a year ago, pre-launch, courtesy of The Wayback Machine:

And here’s the website on launch day last year:

Do you see the neon? Look at that customer quote: “Finally, an energy company that actually innovates.”

Look at the website now:

It’s subtle. If I hadn’t talked to Cole, I wouldn’t have noticed the differences. But I did talk to Cole, and he shared that, “Our marketing tries to make an impression in five to ten seconds, and to convey something that Texans can agree with in a way that can be trusted and is community and local feeling.” Do you see the 4.9 out of 5-star rating on Google? Did you notice that the house looks more like something a normal person would live in? That instead of putting the battery front and center, Base puts it in the shadows? That it puts the focus on the people in a well-lit house instead of on the battery, and has people in the house at all, as compared to the empty pool house in the old version? In place of the innovation quote, Base highlights five media organizations that Texans recognize, some national, some local. Even the messaging is different. “Cut your costs, not your power” focuses on what Base does for the customer, instead of trumpeting Base’s spot as “the reliable & affordable power company.”

This goes beyond the website and into the field. Cole directed me to a recent Houston Chronicle piece that featured a Base installer, Chris Link, front and center, wearing a Carhartt jacket and a dark green Base hat. As we’ll discuss in a bit, the brand experience can extend to the home as Base vertically integrates its deployment team.

“A lot of companies say they value brand and design, because it sounds good, but when the time comes, they fail to follow through,” Willem noted. “Base has gone the opposite direction: leaned in harder and has made it core to their customer experience.”

The same thing that Antonio said makes Zach and Justin special – that they’re willing, hungry, to listen and learn – is characteristic of the entire Base team. That means listening to and learning from investors like Willem, and it also means listening to and learning from customers. Door-knocking is one example, but now that the Growth team is bigger than Cole, there are many.

“The two things I preach to the team,” Cole said, “are speed to first, which means how quickly can you try something, and then depth and speed of iteration, so how quickly can you take lessons from what you tried and then try something different enough that’s not just a local optimum.”

I asked for an example, and he gave me a big one.

When Base launched a year ago, part of the value prop was that while companies like Tesla made customers buy the battery at a healthy margin, which meant costs of $15-20,000, Base would only charge the install cost of around $3,000. At that point, Base had a waitlist and a good idea that customers would buy, but not the dollars in the bank and batteries on homes that would serve as proof. Within weeks of launching, they did.

Over the past year, Base has grown very fast for an early-stage, vertically integrated company. “This is an extremely operationally intensive business with a lot of room for error,” Erin at a16z explained when I asked why she invested in Base. “This is a very Elon Musk problem, an operational problem you use tech to solve. And the reason you can tell they’re doing that well is that they’re meeting and exceeding every goal that seemed crazy when they set them.”

Base’s growth numbers were good, Cole agrees, “but we wanted them to be great. And the most obvious thing to do is to spread the cost of the battery over a period of time.”

So they tried it, quickly. Speed to first. “But we originally tried it in a way that was just like, ‘Get a 10-year payment plan on our cheapest battery backup.’”

With the offering in-market, Cole and the team realized, “No, we’ve got to step back and really rethink this.” So they did, quickly. Here’s Cole:

So we got together on a Sunday for eight hours, with ten people being like: here are all of the decisions we have to make across product, pricing, positioning. We decided all of these more macro things, and then we rewrote our entire backend, rewrote our entire frontend website in three days and shipped it that Wednesday.

We got the first thing out, then we got feedback that it was kind of shaky, so then we got the correct thing out just in time for Houston to launch and for us to build a long waitlist without having to launch ads, which Justin’s happy about, because he doesn’t love spending marketing money.

Now we have a long waitlist of people in Houston, and I think it can largely be attributed to getting the first thing out, and then deeply, deeply getting the next thing out as quickly as possible.

This membership-based pricing model is even more attractive to customers: they pay just $595 upfront, and then $19/month for the 10-15 year life of their battery. By soaking up energy when it’s cheap and discharging it when it’s expensive, Base may even be able to save customers that $19 each month on their bill.

And the numbers back up Cole’s notes on the membership-based pricing model’s success. In a recent update, Base wrote that 90% of customers opt for the membership-based pricing model, and that it contributed to 30% MoM growth in signed customers ready for installation from February to March.

There are more fun experiments, too.

One day in early February, Cole was having lunch, trying to take a break from work, and complaining about the thing that a lot of Texans, and every Mavs fan like him, were complaining about in early February: the Luka Doncic trade.

JP Reilly, the growth engineer on his team, realized there might be something there. “We’re in Dallas, we’re in DFW,” he said. “We should pull off a Luka billboard that goes viral.”

The Lakers were coming to town to play the Mavs in three days, so they had to move fast. At lunch, they came up with the concept, then they went back to JP’s desk, started a Slack thread where “the best copy won,” handed off to Victoria, Base’s one-and-only designer, to whip up a design, then over to Gabe, who leads marketing, to call the out-of-home advertising company and secure a billboard at the border of Dallas and Fort Worth, right in their target area. They got the billboard up the day of the game, asked their field service team to reschedule a fix to go take a picture of it, and got it online.

Some people on the team (Justin) weren’t happy about it. Justin, remember, doesn’t love spending money on marketing, even though, at the time, Base was in the middle of doubling the size of its inbound fundraise to $200 million, and even though the whole thing only cost $6,000.

But sometimes, you gotta hire talented people and let them cook. They cooked. Online, the image got millions of views.

And then one week later, 400,000 people in DFW lost their power. “Many of them are now a little more brand aware,” Cole said, “Which is the exact motion you want: shine a light on the fact that Base = backup, and then a bunch of people in Dallas lose power and our numbers are exploding.” Plus, they hired an electrician who saw the ad.

It’s just one billboard, but I think it says a lot about Base. Cole was able to convince Justin that it was a worthwhile use of resources. They moved fast and had fun with it. And while it was fun, it did exactly what Cole said Base’s marketing should do: get Texans nodding their heads along with a local brand that they trust.

In a year, Cole has gone from door-knocking to using billboards to get customers banging down Base’s door. There are currently over 1,000 on the waitlist awaiting installation. An even bigger change, though, is that the direct channel, which was the only leg of the stool last year, is now one of three legs, or one of three heads in what Cole calls Base’s “three-headed go-to-market monster.”

Leg two is homebuilders. In December, Base announced a partnership with Lennar, one of the nation’s leading homebuilders, through which Base installs its batteries in new homes within Lennar communities as part of the homebuilding process. Already, Base has installed hundreds of batteries to back up Lennar homes in Austin and DFW, with thousands more expected this year.

Leg three, one we’ll talk about more later, is regulated utilities, starting in Texas. Last month, Base announced a partnership with Bandera Electric Cooperative (BEC), a member-owned Texas cooperative, to offer batteries to BEC’s customers at no upfront cost for a low monthly fee. It’s the first of what Base hopes to be many partnerships with regulated utilities in Texas and beyond. From BEC’s perspective, they get to bring storage online quickly, “enabling it to aggregate and operate the batteries to enhance grid and market operations through Apolloware, its real time, energy management platform.” Importantly, better managing the existing grid means BEC will be able to save on expensive grid upgrades and additions.

I asked Cole when he knew that Base was working from the go-to-market side, and he answered that it was when they added those two legs. “When one of the legs is more seasonal or isn’t working,” Cole said, “you always have the other two. And suddenly our whole motion becomes stronger.”

That said, he doesn’t think they’d be able to serve homebuilders and utilities as well if they hadn’t started small and direct: “Go direct-to-consumer, figure out what makes the product work for one. Make sure it's providing value to them, and then see if they talk about it. And then develop every motion around it: deployments, support, all of that stuff. All of that gets you the credibility to develop the second and third legs of the stool, the channel partnerships.”

Of course, the more legs the growth team sets running, the more batteries the rest of the team has to make and install.

Manufacturing

Dino Sasaridis had just signed up to join Base when I wrote my Deep Dive last year. I wrote, “Dino Sasaridis spent 13 years at Tesla, where he worked on the original Roadster and most recently led mechanical engineering on Tesla’s Powerwall 3. He will lead engineering on Base’s battery.” Just a couple sentences that mask the challenge of even getting someone like Dino to join the team.

Sal at Trust Ventures said that people like Dino, leaders at companies like Tesla, represent “scaled hardware’s crown jewels,” and that he spent four hours trying to close him.

The thing was, Dino didn’t want to do batteries again. He’d done batteries. Instead, after more than a decade working for someone else at Tesla, Dino wanted to do his own thing in solar.

First, he planned to disrupt Enphase by making better micro-inverters for solar panels. As he dug in on solar – climbing up on his own roof to install panels, “turn every nut and bolt and feel the pain to get to know the problem” – he realized two things. One: mico-inverters are dumb. He didn’t want to eat Enphase’s lunch, because he thought Enphase was eating the wrong lunch. Two: the process of installing solar panels is still built on the premise that solar panels cost more than gold, which they don’t anymore. So second, he planned to build a better solar company by eliminating the mounting, racking, and wiring in order to speed up installs.

Then he realized what Antonio helped us realize earlier: photons are basically free anyway. “Already at [America’s] pricing, solar is the lowest marginal cost way to make a watt right now,” he learned. “So if I go make the cheapest thing cheaper, I have not moved the needle.”

That’s when he met Zach, Justin, and Jared, and started to talk to them about batteries, which again, he did not want to work on again. But…

“What I implicitly knew but had not put the numbers to paper to think about,” he admitted to me, after admitting it to himself, “was that the thing that will really throttle the energy transition, which is my motivator, is the availability of batteries, not the availability of cheap solar.”

I’m not sure that there’s a better way to make the case for Base than that. The investors I spoke with are all incredibly excited about Base’s potential, but they need to invest in companies, and they invest in multiple companies. Same for me. Dino had plenty of options to do his part to make the energy transition happen, and he certainly didn’t want to work on batteries, for someone else. And yet… Dino now works on batteries at Base.

The guys here were like, ‘So you want to come design another residential battery?’ and I was like ‘Absolutely not. I just did that.’ But ultimately I changed my mind because I decided that whatever I did there I can do it again and I can do it better here and then Base Power Company can have the absolute best residential battery in the world. And I think we’re going to easily achieve that, honestly.

That best residential battery is Base’s Gen 3, which it’s planning for now. Gen 2 is up next, later this year. Gen 1 is in market today.

Vertical integration is a process. No one starts fully vertically integrated from day one. You use what you need to use to prove what you need to prove, and earn the right to vertically integrate as you scale. Vertical integration comes with upfront costs and risks and complexity which, at scale, are offset by better margins and better product quality.

Each level of vertical integration is harder, and each, if successful, means deeper moats.

Gen 1 is partially integrated. Gen 2 will be more integrated. Gen 3 will be more integrated than that. Moats compound. When you’re 10% integrated, it’s easier to compete with you. When you’re at 30%, it’s incrementally harder. Then when you’re 100% integrated, it’s virtually impossible for someone to come in and replicate what you’ve built.

But first, you just need to prove that people actually want to buy good residential batteries before you can spend the time and money building “the absolute best residential battery in the world.”

When Dino joined, Base was already rolling out its Gen 1 battery, which is essentially an off-the-shelf, white-labeled battery from Growatt, and beginning to work on its Gen 2 with a manufacturing partner. The early Base team had agreed that the partner would make them a battery, and told them how big and how powerful to make it, but hadn’t told them enough detail to make exactly what the company needed.

So Dino and team got to work writing specific requirements and getting them approved by the partner. The requirements, he believes, are the difference between the Tesla Powerwall and what Base is building.

Because Tesla sells Powerwalls directly to customers – for $15,000 - $20,000 a pop – its requirement is making a good, luxury battery that it can sell for a high price at high margins, which it does. But it’s not used to stabilize the grid or buffer solar or do any of the great things that it could do.

At Base, however, the requirements are clear. “We’re purpose building a battery to trade energy, time shift solar, and back up peoples’ homes,” Dino said, sharing his product design secret. “Honestly, it is just that, just knowing exactly what the goal is that enables making the product extremely low cost and high reliability. It’s just like, care about the things you should care about. This is the only trick in product design as far as I’m concerned.”

The Gen 2 battery is being built to handle the things that Base cares about.

Dino’s team is testing Gen 2 at Base HQ, which is something you can do when you no longer work out of someone’s house. There are thermal tests and rain tests and all sorts of tests to make sure that when the conditions get extreme, which they’re more and more wont to do, Base will deliver, safely.

Of all the things you should care about, safety is at the top of the list. “Safety is the number 1, 2, and 3 thing a business thinks about dealing with these mission-critical systems,” Antonio told me.

Right after safety, in Base’s case, come power and speed. In addition to the more power, Dino highlights that Gen 2 “installs super fast.” Because as we discussed at length in the first Deep Dive, Base is designing a system more than it’s designing batteries.

Because to get to the kind of scale Base needs to get to to fix the grid, he explains, “We will basically have to be a very large, very parallel operation that is just cranking out the batteries in a factory and sending them immediately on a truck to someone’s house,” where installers can just put in a base, slide the battery onto the pins, connect, and move on to the next.

Part of the trick – as is the case with Cuby, small modular reactors, and so many modern hard tech companies – is moving as much of the work as possible away from on-site and into the relative order of the factory floor.

“Electrician time is very expensive; it’s more expensive in dollars, but it’s also expensive in rate,” Dino shared. “Like if we could pay an install crew double to do two installs in a day, we would do that. Because soon we will be rate limited by how many people we can have driving around batteries and putting them on houses.”

Which is why Dana has the Turtle.

A Note on the Turtle

When Cole worked at SpaceX, he worked his way up the assembly line to manage the second stage. Because the second stage was not reusable, “we had to build a shit ton of second stages to launch this global constellation of Starlinks,” he remembers.

And my job was to find the critical path, at the assembly level. Take the like 3,000 parts that go into the second stage and find the thing that's moving the slowest.

We're doing the same thing. Like we gotta get 100 megawatt hours on the grid by summertime frame and we know precisely where the constraint is and why.

To make it abundantly clear to everyone in the company where the critical path lies, Base uses a toy turtle (a few now, actually) that sits on the desk of the person responsible until the constraint moves somewhere else.

“The turtle is an indicator of that, so when the turtle moves…” he laughs, “there’s a zen one and one with little toys to play with during the day to de-stress you while you have the turtle, because it’s stressful to be on it. The turtle indicates who’s the most stressed and who’s slowing the business down, and it forces you to allocate resources that way.”

What is it about Base’s culture, I asked, that makes having the turtle not a terrible experience, not some emerald letter?

“It’s kind of like in a relay race, you get handed the baton,” he analogized, “You’re not not stoked to get the baton. You’re ready to step up. You’re ready to sprint.”

Everyone gets the turtle. Cole’s had it. Justin’s had it. Dino’s had it. Zach’s had it. It means what you’re doing is critical, and it’s your turn to make it happen for the business.

And now, because Base needs to figure out how to scale a bunch of electricians in Houston, Dana has it.

Deployment

One way you can tell scaling electricians is turtle-worthy is that it convinced Justin to get in front of the camera to sell them on working at Base.

While everyone in and around Base is quick to highlight Zach’s virtuoso recruiting skills, electricians aren’t the first key hire Justin brought in.

“I worked for Justin at Anduril,” Dana said. “So when Justin left, I was like, ‘That’s pretty interesting.’”

In the few years the two of them worked together at Anduril, they’d built trust in the trenches. “Justin always had my back and my best interest,” Dana told me. “At Anduril, there were times where he'd be like ‘It would be easiest for me to leave you on this project, but I think it's better for your growth and career to move you to this other project.’ That’s the person I want to be holding my career a little bit in their hands.”

Justin, for his part, wanted to keep working with Dana, too. “When I left Anduril, they said, ‘Don’t poach anyone’ and I was like, ‘Yes sir,’ but I said, ‘Except Dana’ under my breath.”

Like Dino, Dana wasn’t a sure get. She was happy at Anduril, happy living in LA, and risk-averse like a good engineering manager should be. But she asked Justin what he was up to, and…

All of a sudden, we were talking about Base, and at the time it was just Zach, Justin, and Jared. So I’m like, ‘It’s a house. There’s three dudes running a company.’ But I really trusted Justin, and I really liked working for him, and I feel like every engineer is like, ‘I’m gonna join a startup!’ and then no one ever does, so I was like, ‘Man, it would be pretty silly for me to pass up this opportunity given that it’s with someone I know.’

I mean, people do that all the time but I can’t imagine I’d just pick up and move, bring my fiancé with me - luckily his job was trying to get him to come to Austin anyway so it was pretty serendipitous - doing all of that and it’s just three random people I don’t know would be a lot. So I think it was really helpful that it was with someone I trusted and respected.

Everyone always says that A-players hire A-players, but this is what it actually looks like. A-players are often happy where they are, because they’re good at what they do. Convincing them to give up their comfortable and familiar gig to join three dudes in a house in another city requires a great deal of trust, often trust earned over years.

The trust goes both ways. While Dana was used to Anduril’s high-mix, low-volume – “every drone that came off the line we had a nickname for” – manufacturing floor, Justin figured Dana was good enough to figure out how to run a different kind of factory: the Deployment Factory.

“I thought that a manufacturing floor had a ton of variability,” Dana laughed, “But it turns out residential homes have way more variability.”

Every AHJ – that’s the Kafka-name-having “Authority Having Jurisdiction,” for the uninitiated – is a little different. They can supersede the NEC - “National Electric Code” - with their own rules. This piece is largely about the very specific challenges that occur when strategy meets reality, so indulge me some additional detail. Here’s Dana:

We have to put ground rods in if a house isn’t a new build. Some AHJ’s, you’ll pound it all the way flush, and you’ll be like, ‘It’s there. Here it is. But it’s flush, so a lawnmower doesn’t hit it.’ And then they’ll be like, ‘No, it needs to be an inch and a half above the ground.’ Other times, you’ll leave it an inch and a half above the ground, and they’re like ‘You need to put that flush.’ If you do the most conservative thing and implement what every AHJ wants, you’ll still be wrong.

What about the human piece, I asked, the ruthless dictatorship that infects those who rule over the smallest kingdoms? Does it matter if an inspector is just having a bad day?

That can matter, too. Sometimes they'll get us with stuff that's existing on the house before we even get there. Some of them will let you just fix it right there and then you'll be good. And other ones are like, ‘You need to go, but nope. Fail.’ So then you'll get a fail and have to come back, even though if it was a different inspector, you might have passed.

But Justin was right. Dana is good. And part of her job is systematically turning all of the little things that will trip any company up in the beginning into things that the Base team now knows how to handle.

“We track everything in JIRA,” Dana explained. “We’re measuring everything by how many times Base has to intervene per install. It could be a mispacked kit, or the homeowner was fine with where we planned to install the battery yesterday but doesn’t want it there today. Today, we’re involved in 75% of them, often for some small thing, but that number probably needs to get down to 25%.”

The goal is to turn stumbling blocks into moats, even as the number of AHJs grow and the team grows and many of the people doing installs don’t even work for Base.

That’s another big thing Dana is focused on: nailing the mix between in-house, Base-employed installers and contractors.

Like most things in an eventually vertically integrated business, and like most things in this business specifically, Base got up and running by working mainly with partners, and is earning the right to bring more in-house with scale.

In the beginning, Dana said, they worked mostly with subcontractors on installs, and had the in-house team focus on field service. Now, Base has hired and is continuing to hire its own installers in each of its markets. Over time, Dana expects, as Base moves from 20 installs per day to 100 and more, teams will specialize further. Today, though, “everyone knows how to do everything, and the crew leader is on the hook to make sure that the crew they show up with knows how to do everything.”

Building out an in-house team, especially with a fresh $200 million in the bank, is one of those things that seems fairly straightforward until you think deeply about it.

There are clear benefits to building out an in-house team:

• Quality Control: You can train and manage your people to your standards.

• Margin Improvement: You don’t need to support subcontractors’ margins.

• Ease of Scheduling: Your employees don’t have other customers to service.

• Strategic Moat: Building a specialized workforce, especially when there is a shortage of electrician talent, is another few feet of moat against would-be competitors and a resource that can be put to work on an increasing number of products over time.

• Brand Experience: An in-house team can show up in Base trucks wearing Base gear and provide a consistent standard of experience.

That means figuring out how to make a different type of employee tick.

When I was at Breather, we had a team of in-house Operations Associates responsible for cleaning and maintaining our spaces. We spent months figuring out an options plan, so that they could get equity in the company like everyone worked in the office, then we had a big town hall to let them know. They could not have cared less. (Turns out, based on the eventual value of Breather shares, that they were right.) They wanted a good wage, a predictable schedule, to be listened to and respected, and to feel like part of the team.

Dana is figuring out what makes electricians tick, too. “What makes a software engineer tick is very different than what makes a manufacturing engineer tick which is different than what makes an electrician tick,” she recognized. “Ultimately, I want people to genuinely enjoy it. So that way they tell their friends it's a good place to work. They are joyful in front of the customer. They want to show up every day and give it their all.”

If Base is able to grow and train a large team of in-house installers, what is currently a challenge will turn into an advantage. The number of electricians they’ll have to employ to do this at scale is a real long-term moat.

That said, there are benefits to working with subcontractors, too:

• Flexibility: Base can subcontract out install work to match seasonal demand.

• Speed to Market: Base can roll out in new cities without spinning up a team.

• Risk Management: Avoids hiring out a large team in anticipation of forecasts.

• Local Knowledge: Subcontractors already understand local AHJs and requirements.

If Base weren’t planning to grow much – if it were aiming to build a decent-sized battery installation company in Texas – the answer would probably be to just go in-house. But Base wants to build America’s Next Generation Power Company, which means spreading across America. It wants to grow really fast – from one “impossible” installation a day when Dana started to twenty a day today to “fifty a day to a hundred a day to, hopefully, we’ll be doing thousands of installations a day in the coming years,” as Zach told Molly O’Shea on Sourcery.

To grow that fast across that many Authority Having Jurisdictions, each with its own quirks and personalities, “I think we’ll always have a mix of the two,” Dana predicted.

Which means more complexity, which is OK if you think about Base as a machine that eats complexity and turns it into moats.

One of Base’s goals is to be the fastest (and most capital efficient) way to get megawatt-hours of storage hooked up to the grid, faster than centralized battery farms, which don’t have to deal with thousands of individual locations to get to scale, but do have to wait for long permitting timelines. It’s already getting close; in its fundraising announcement, Zach wrote “We’ll continue to ramp install rate in the coming months and by the end of the year we’ll be the fastest (MWh/week) and most capital efficient ($/MWh) battery developer in the country.”

Speed is crucial to Base, and it’s also crucial to the grid. Sebastian Duesterhoeft at Lightspeed said that one of the things that attracted him to Base is that if they get it right, “They will get to a scale that matters to utilities in a timeframe that’s much faster. A similar build-out for grid-scale would take two to three years.”

Which is why, despite the fact that Dana has ramped deployments from zero to twenty per day, she’s often greeted at her desk by a cute little turtle. Because Base is building a Deployment Factory, and the deployment itself is where the rubber hits the road. Each install is a small piece of real estate that Base will, if it delivers for customers, be able to own, monetize, and pull data from for years.

As Julian wrote in The Power of Defaults, “You can’t have eight competing rail road networks because there simply isn’t enough real estate to build them.” Something similar is happening here. You can’t have eight competing batteries on a house because there simply isn’t enough real estate for them (and because you only need one, particularly with the 30 kWh Gen 2).

This dynamic, incidentally, is one of the reasons Zach told me they raised so much money, twice as much as they were planning to, and why they work so hard. Every install is a physical moat against would-be residential battery competitors, and a virtual one against centralized battery farms. As Base proves that it can bring megawatts of storage online more quickly and capital efficiently than centralized players, combined with the better data and ability to balance the grid that a decentralized solution provides, it believes more and more utilities will choose to partner with Base than with centralized competitors. Speed wins.

Cole’s relay metaphor may have been more apt than he meant. You want to get the baton. You’re ready to run. The other benefit of the turtle, they told me, is that it means you get help from all of the other teams. Because to do installs well means doing installs well, but it also means batteries designed for fast installation, and customer-submitted site photos turned into site plans, and software that makes it easier for installers, in-house or contracted, to do their jobs.

Dana gave me a glimpse of the all-hands-on-deck approach to deployment:

Our sales team will ask ‘Can we do this?’ and sometimes, I’ll have to say no, because that would slow the machine down. Our master electrician is helping to build the battery prototypes to make sure they’re easy to install. And doing the deployments, it’s a thing where when you zoom out, you’re like ‘That shouldn’t be that hard,’ but when you get into it, you realize, ‘My gosh, there’s so much involved.’ And I think people get it.

We force most people on the team to go to an install to see what it’s like. That’s how you get buy-in from the team to think, ‘Okay, how can I make this installer’s day better?’ So Jared’s got folks on his team who are working on an Installer App and they have to figure out: the installers are your customer. How do you make their job better so they don’t need to rely on our internal teams as much?

All of those interteam connections are pieces of the moat, too. Any company might be able to hire a great sales team or build great batteries or get great at installations or write great software independently, but can you get your sales and hardware and deployment and software teams to work together as one unit? That, too, is a hard thing that becomes an advantage over time.

And for Base to win, it’s a necessary thing. “You can kind of brute force your way through ten a day, and then you get to fifteen a day, and you’re like ‘Nope, things are starting to drop,’” Dana admits. “And then at twenty, you realize, ‘Absolutely we need a system.’ We’re definitely at the point where you have to have buy-in from other people, because otherwise it won’t work.”

Building a coherent Deployment Factory is everyone’s job at Base. But if there’s one place it all comes together, it’s at the install. And if there’s one team making the glue that binds it all together, it’s the Software team.

Software

Everything that I’ve written thus far – the Operating System, growing across markets, partnering with utilities, purpose building batteries to trade energy, installing them next to peoples’ homes – all of it only makes sense if the distributed network of batteries can talk to each other and take actions based on what they hear in real-time.

That means there is a lot of software to write. Dana mentioned the installer app. Cole mentioned that he needed a growth engineer, which is how JP ended up on his team and how the billboards ended up in DFW. Customers interact with Base to pay their bills and check the status of their batteries through its customer-facing app. Base makes money trading power through its software. The company’s real-time telemetry is, compared to the state of the grid’s current software, a marvel of distributed systems engineering made possible by Jared’s time working on similar problems for Starlink’s laser mesh network. There is a lot of software.

Software is how Base makes money, given that it installs batteries at-cost. The main way it does that today is through trading power. In recent months, in three-year backtest simulations, Base has increased how much it’s able to make trading power by 30% in real-time markets only, and nearly 2x when you include day-ahead markets. A lot of that has come from improvements in the software, in the algorithms Base uses to trade. Last year, Base brought on Chase Dowling, who worked on ML engineering and algorithm development for Tesla’s Autobidder platform to lead behind-the-meter battery aggregation and ERCOT trading. He and his team have been cooking, too.

“We are basically trying new ways of predicting the future,” Jared told me, as we sat outside in the backyard at Base HQ. “We’re trying new optimization functions and coefficient tuning that is allowing us to get better and better at predicting based on fixed inputs. A lot of the things we’re doing are using things like day-ahead pricing for forecasts and getting smart about tuning discharge based on individual home load as opposed to aggregated home load.”

I asked whether Base would eventually have the most sophisticated power trading algorithms in the market, if that was the goal, and surprisingly, he said it wasn’t.

“I expect our trading function will get bigger and bigger because we have a natural edge and better information in the market,” he replied. The key is the vertical integration, like it was for his team at SpaceX:

I come from Starlink, and Starlink is not the best network team, they’re not the best packet routing team in the world, but they are super vertically integrated and so they understand their own hardware in a way that nobody else really could. They can operate in a way that nobody else could. And that’s the same thing for us.

When we go to determine how we should discharge, we’re looking at the thermal derate expectations for the system to understand which hardware is able to push to have some boost mode and have extra power, and which hardware is actually in the sun so we want to curtail its discharge amount.

It's like the integration between the specific current limit on the bus bar and the current ambient temperature at that home and how we've seen its thermal performance work over the last year is something that is gonna be really hard for anyone else to match.

The work that the rest of the team does gives the software team an advantage, and the work that the software team does gives the rest of the teams an advantage.

Justin told me Base has a number of software tools for everything it does: “We have a bunch of tools for various different things: for generating permits, for submitting permits, for automating customer acceptance, for onboarding gateways, for the computer device inside of the battery.”

There are challenges here, too, of course. Justin and Jared admitted that these tools are more siloed than they’d like, and that they want to turn them into a Base OS. “I think the promise of a vertically integrated company is that there’s – I don’t want to use the word,” Justin cringed, “but there’s this synergy across tools. And that’s something we’re now spending more time on.”

What’s interesting, though, is that while Base’s software touches every part of its internal operations, it’s also the piece of the company that interfaces most with the rest of the grid.

So the thing that keeps happening at Base – that the more they do and the more challenges they overcome, the bigger they realize the opportunity actually is – happens most acutely on Jared’s team. I asked him where they’d been right and wrong about what they thought a year ago, based on what he’s seen from that view.

“Where we’ve been right is in a lot of the ways our system is starting to develop. That’s not surprising,” he said. “Things that were surprisingly difficult, I mean, there were a bunch of them dealing with the electricity market. You kind of just think that people in these industries have made sensible decisions…”

Oftentimes, they haven’t. Not because any one player in the system is dumb, but because the system has been patched together for a century, and it’s full of what people assume to be third rails because everyone’s been afraid to touch them.

“We have repeatedly been scared of our own shadow,” Jared admitted, “because people have told us that something’s scary, and then we realized that actually they just didn’t know what they were doing.”

He gave me an example:

Take billing for the electricity provider, for the REP. People are like, ‘Look, there’s a regulatory barrier here. You have to make sure that you’re a regulated billing entity and it’s a super complicated thing to do.’

Then you would talk to people and they would say ‘There are these four edge cases,’ and they’d all say the same edge cases now that you think back on it, and you’re like ‘OK, wait, you said those, but are there others?’ And then you’d talk to the right person and they’re like, ‘Yeah, there are actually these five.’ And you’re like, ‘OK.’

So we went with a vendor to figure out billing for the REP and they were, like, atrocious. The worst software people that we’d ever worked with. They would send emails that were like, ‘We’re going to have eight hours of downtime.’ We’re like ‘Umm… why?’ And they’re like, ‘Well, we have to deploy software.’ We’re like, ‘OK, this is a problem that people have actually solved. We can send you some blog posts from the ‘90s.’

So Base built their own billing software. It wasn’t so bad. They just handled the five edge cases.

Thanks to repeated experiences like that one, Jared said, “We’re not quite at building everything ourselves, but it’s very important that we understand why we’re not building something if we’re not.”

These examples are everywhere, and Base is still just in Texas. Here’s another:

There’s a networking protocol where we’re connecting to ERCOT (Electric Reliability Council of Texas), and now we’re working on a project to connect it directly to the ERCOT wide area network (WAN). And a lot of people told us, ‘Don’t even try it, people spend a year trying to do this.’

We had one call where someone was like, ‘Yeah, but they write this stuff in C programming language,’ and we’re like, ‘Yeah, that’s totally fine. That’s totally OK. We can write in C.’

All of this, I floated, seems really annoying to have to deal with day-to-day, but from the company perspective, seems like a pretty great situation. Opportunities everywhere.

“It depends who you are, right?” Jared replied. “If you’re building in the space, yes, it’s great. If you’re a human being in the world who likes to believe that the world makes sense, no. It’s great for the prospects of Base; it’s not great for my trust and belief in the institutions. That’s lost. My whole view of the world is actually, we just need to kind of rebuild everything.”

One of the things I’ve come to realize studying Vertical Integrators is that because they necessarily interact with so many pieces of the systems in which they operate, they find more opportunities to expand than a company building a point solution would. And because they necessarily interact with so many players in the system, they understand that what’s currently being done can be done much better by a world-class team.

“The grid is aging,” Erin at a16z observed, “and it’s going to take the positive insidiousness of being everywhere and having software deployed everywhere to manage large pieces of it.”

In the near-term, as Base builds out its fleet of distributed batteries, that means that just as Base’s batteries give it an advantage in trading power, it can give its partners an advantage in managing their grid. Jared pulled up a map to show me.

“Here’s a view of completed installs, and here are some installs are in progress,” he pointed to different spots on the screen, “but here is completed installs by the max voltage at that home over the last 24 hours, and you can see topological groupings based on different parts of the grid that they’re connected to.”

Some of the voltages read 253 at max reading, which isn’t great, because “you’re really not supposed to be over 252.” At 255 volts, you can start to damage electronics. This kind of information is incredibly valuable to grid operators, and Base has it at a level of granularity, in real-time that no one else does. As the network grows, the information will get better.

So how do you create and capture value from that?

“We’re starting to sell into utilities,” Jared responded, “and the idea is that you can sell them a button that charges and discharges, and eventually, we can say, ‘Hey, we made this map. If you want to put in your grid topology it’ll run some algorithms for you, and it’s free.’ And then you start to build a tool where they’re like ‘Woah, I can both see the status of the grid in real-time and I can control what it’s doing. I can make sure that this transformer does not exceed one hundred amps because I want to extend its lifetime.’”

Then, utilities are able to defer costs for infrastructure improvements, which is real savings in terms of dollars, and increasingly, with a transformer shortage and the increasing difficulty of putting in transmission lines, maybe the only shot.

“But you need to demonstrate that you can do that,” Jared said, “and start to look like a trusted alternative. Utilities can decide between: we could build out a distribution system in this area, or we could just litter this community with Base batteries. And for one of them, you need to build from a hundred miles east all the way to the community. For the other, you just need to install.” Installation is easier, and will keep getting relatively easier as Base keeps getting better at it.

Soon, you have “a system that all communicates with each other in real-time and that you can real-time optimize to reduce load on a transmission line that’s twenty miles away.”

That’s how you begin to build the Operating System for Electricity, the Base layer.

From the Base layer, you can expand up or down in the stack. Maybe you start putting more electric appliances in peoples’ homes. Maybe you backward integrate into becoming a modern utility, which is the long-term plan. Certainly, you can provide an immediate competitive advantage to the utilities that partner with you, and to their customers.

When I wrote about Base last year, I mentioned that at some point, Base planned to expand beyond deregulated markets into regulated ones, where it would need to partner with utilities. I wasn’t expecting it would happen so quickly - I’m not sure they were, either - but Base moves fast. While growing the core business, it’s already time to expand.

Expansion

One of the most fun parts of writing this essay has been getting to learn first-hand how some of the best venture investors in the world underwrote one specific investment. I asked each how Base might fail, and they talked about it not in absolutes, but in degrees.

One highlighted a few challenges: vertical integration is a double-edged sword, the capital intensity could be so high that it slows their trajectory. But the first one they brought up was this: “If Base doesn’t work outside of deregulated markets, if it can’t break into utilities, it becomes a less good business. The size of the prize is smaller, and it’s more competitive.”

As I started gearing up for this piece and those conversations, once I’d thought of the Operating System analogy and realized the potential Base had to move up and down the stack, one of the biggest questions I wanted to answer was: how do you decide, among all of those options, what to do next? If you’re going to break the startup rule of thumb to focus, how exactly do you do that? And why, when expanding too far, too quickly might kill a good thing.

I asked Erin at a16z this question, and she agreed it was a risk: “If they push too quickly into larger scale regulated utilities, there's just a lot of complexity there and it won't always be perfectly in control of the company.” But you can’t sit still, she said, and “Starting with slightly smaller, localized but still regulated utilities as a stepping stone and proving ground is exactly the right call.”

Sebastian at Lightspeed noted that, “Texas is a darn big market, and you could build a big business there and get a great outcome. But you want to know sooner or later if that’s the end state. You probably do want to prove out one other regulated market very quickly to show that you can make both of them work. Consumers and utilities are just very different.”

So if Base wants to build a good business, it can keep doing what it’s doing. But if it wants to build a multi-generational company (it does), then it needs to prove that it can work with regulated utilities. Certainly, if it wants to build the Operating System for Electricity, it will need to work with the 80% of the meters in the US that are regulated.

So no pressure, Tim Pianta.

I didn’t get to meet Tim in person, because he was going to be on the road speaking with utilities when I planned to be in town. So we hopped on a call, me from New York and Tim from Houston, where he was preparing to present the regulated utility side of Base’s business for the first time.

Tim’s on the road a lot. When you start at Base, he told me, you get a thoughtful onboarding doc with your goals for the first couple of weeks and months. The one Zach wrote for Tim was well thought out, but essentially boiled down to: “Go build out a regulated business.”

That doesn’t mean that he has to do it alone. He mentioned that he was currently working with Jared on building out a software product for utilities, and that when he landed a meeting with a large Texas utility the week before, Zach was in the car with him road-tripping to San Antonio. But it does mean that it’s his responsibility, which means lots of face time with utilities.

This is exactly what Tim wants to be doing. Like everyone else you’ve met, he had other options. In fact, when Tim decided to leave Bain, where he consulted for large investor-owned utilities, after starting his career as a design engineer at GE Power (which touches 30% of the world’s electricity), he did an extensive search for growth stage power and clean energy.

By the time he met Zach and Justin, in fact, he already had a job lined up. But what Base was doing stood out in a sea of “climate companies that will take 10 years and $1 billion to get to a customer,” so he came down and interviewed. Five days later, he signed. Ten days later, he moved from San Francisco to Austin.

“Zach and Justin came at this from a zero-basis opportunity standpoint,” he said when I asked what made him join. “Coming from the incumbent standpoint, I found what they dreamt up as a solution to be a powerful one.”

But it mattered to the work that Tim needs to do that it’s now more than just a dream. “The way they sequenced this worked well,” he said, referring to Base’s decision to start with the DTC leg of the stool. “You can’t show up to a utility without some level of deployment in the field. Now, though, we can say, ‘We’ve installed over 1,000 batteries. We’re installing storage at a faster rate than any developer in Texas. We can get you 50 MW in a year - faster than anyone else can get you.’”

As you’re intimately familiar with at this point in the story, that is an insanely hard statement to be able to deliver on. But just like Cole realized about consumers when he started door knocking, leading with INNOVATION in bright green letters isn’t the way to win deals with utilities, either. Base has to start by competing on the things that they know and care about, against the front of the meter grid-scale storage solutions they’re used to buying.

Tim said that the go-to-market motion with utilities is to land by delivering value the same way a grid-scale storage plant would – by matching supply and demand across the service territory – and then expand into adjacent areas where Base’s distributed network can provide value that centralized solutions can’t.

To win that first, more basic use case, Base has to sell against front of the meter grid-scale batteries and against multi-device VPPs (Virtual Power Plants), which aggregate and control assets customers already own, like their thermostats, to balance load.

Centralized grid-scale is the bigger competitor. Against them, Base wins because there is load growth happening across the country, and with interconnection queues, getting big battery farms connected takes too long. Base wins on speed to capacity.

VPPs are a capital efficient solution. They can work well under certain conditions, and they’re distributed in the same sense that Base is. But the devices controlled by VPPs weren’t designed for grid usage, and the consumer is in the loop and can decide when to intervene. If it’s hot and someone doesn’t want their AC throttled, they can just override. Plus, the goal isn’t really to use less energy at the expense of human discomfort; it’s energy abundance. Base wins on reliability.

In fact, since utilities have been excited and then let down by VPPs, Base has a bigger hill to climb. It needs to prove that it’s not like all of those other distributed solutions. That it really is more reliable. That vertically integrated is completely different than 3rd party. To that end, Base is nearing qualification for ERCOT’s Aggregated Distributed Energy Resources (ADER) program, which would allow Base to bid into ancillary service markets in Texas, and which Tim says will be an ERCOT “stamp that Base batteries are approved for grid usage.”

The only true way for Base to prove itself, though, is to “chop wood, carry water,” as Zach likes to say. To power hundreds then thousands of homes with high reliability, then partner with smaller regulated utilities, and then larger ones. Base has earned the right to compete, now it needs to earn the right to win and the right to expand.

As mentioned earlier, Base recently signed its first regulated utility partnership, with Bandera Electric Cooperative in Texas. Tim told me they have another one at the finish line.

With these Texas partnerships, Base is starting a Tolling Agreement or Power Purchase Agreement (PPA) under which utilities pay a fixed fee based on the fleet size. With a foot in the door, it can prove that it’s able to deliver value to both the utilities and for their homeowner customers, beginning with familiar use cases.

That, Tim said, “will allow for the adoption of additional use cases that are relatively nascent, so are not priced or valued today.” As Jared shared, they can offer utilities real-time maps and granular control. As Tim puts it, “We can offer utilities localized control of the batteries to support specific regions of the grid where assets are distressed because they’re old or at capacity and can’t handle the EV fleet or hydrogen hub manufacturer standing up down the street.”

Then, more software, more hardware, in more places. “In the next five years,” Tim told me, “using batteries to balance intermittent loads is the right way to create and capture value. In a distributed fashion, we can take capacity utilization from 50% to 80%.”

That’s big value. It means saving millions on transformers and transmission. Recall what Sal said: “The grid is a highway you only drive on at rush hour and no cars the rest of the day.” Base can fix that.

Fixing that in a way that makes utilities happy might be the difference between a few-billion-dollar outcome and the S&P 500, a goal Zach and Justin have for the company. “We want to build a 50-year company,” Zach told me. “We want to be in the S&P 500.”

As it fixes, it earns the right to grow. Willem Van Lancker at Terrain described power businesses as “spiderweb things. Unlike software businesses, power companies actually are this latticework of insanely complex things that all link together.”

Base is in the web now, and as it moves towards the center of the web, towards the Base layer, it puts itself into a position to choose which threads to repair. All it has to do now is get everything right, at the same time, while growing a physical network the speed of software in a system that hasn’t changed all that much in 150 years.

America’s Next-Generation Power Company

The spiderweb analogy is apt. Thinking about Base reminds me of that Tim Urban image:

So much has happened in just 18 months to get to where Base is now. Zach and Justin have built a team that every investor, when I ask “What’s the one thing I can’t miss in this piece?”, brings up. That team, some of whom you’ve met today, working alongside nearly 100 excellent people you haven’t, have knocked on doors, contracted one generation of hardware, designed and are testing another, installed thousands of batteries, first by hand, then with contractors, then with an in-house team, built software to trade power and balance the grid, and software to turn lessons into moats, and have even started working with regulated utilities, all ahead of schedule. They’ve raised over $250 million from some of the best venture investors in the world.

But the sense I’ve gotten spending time with Base is that, by tackling so many challenges in such a short period of time, it has more opportunities ahead of it than it realized even a year ago.

“Most companies, we know we have a pretty good sense for what the business will look like in a crazy success case,” Sebastian at Lightspeed said. “In the case of Base, it really feels like there are 2-3 different paths that could create a huge company.”

In the near-term, there’s real urgency to get enough storage online to fix the grid. As Sal put it, “We are getting massively overcharged on our energy bills, we’re going through blackouts, and few people understand how close we are to a crisis. Few people realize how bad it is or how solvable it is. We know the answer. We just need to execute.”

“Just” doing that, of course, will take a Herculean effort from everyone on Base’s team today, and hopefully, from some of you. The existing roadmap is long.

Dino’s team, for example, as they test and roll out Gen 2, is already working on Base’s fully vertically integrated Gen 3 battery. That battery will move Base’s unit economics from “great” to “eye-popping,” and its install speed from fast to woah. “This thing needs to go on a house not in two hours, but in like 20 minutes,” Dino said. “How do we make that happen?”

Cole and Tim will need to sign up customers big and small all over Texas, and soon, in markets all over the country. Will customers in California respond to the same messaging as customers in Texas? A Luka billboard on the 405 would probably be a little more celebratory, at the very least. Will an investor-owned utility in Florida care about the same things as a cooperative in Texas? Certainly, they’ll want to better match supply and demand and defer infrastructure investments, but there will undoubtedly be nuance.

As Cole, Tim, and their teams grow the demand for Base, Dana and her team will need to figure out how to install thousands and then tens of thousands the batteries that Dino and his team are making across hundreds and then thousands of AHJs, with less and less involvement from the in-office Base team, even as the number of Base team members in the field multiplies.

Jared and his team will have to build software to make all of that internal work smoother, handling a growing but not-impossible list of edge cases as the complexities of the internal business grow. At the same time, they’ll need to build software to trade in different markets, to bill in different markets, and to integrate with, and ultimately replace, the clunky, cobbled-together codebases on which the flow of American electricity depends, no matter which language they’re written in.

Justin, and the people on his team, will need to figure out which products to build next, when there are so many products to potentially build. Zach will need to keep the capital and talent flowing to support the ever-expanding scale of the company’s ambitions.

Which is to say, there is a lot of work to be done, and it will only get harder from here.

But as we’ve learned, every challenge Base encounters births new opportunities. Base seems uniquely well-suited to capitalize on them.

First, because doing all of those things earns Base the right to win the coveted place as the Operating System for Electricity. If I’m right, it’s one of the most valuable positions to occupy in the world, as electrons become abundant and the demand for them balloons.

To Sal’s mind, if things go right, “Base could be a $1 trillion company. Energy is the largest sector of the economy, and this is the best energy company.”

Second, because Base has the people to pull it off, the ability to continue to bring people in, and the confidence to give those people control over their piece of the goal. If most 18-month-old companies told me they were considering doing as much as Base is, I’d throw up. Whenever Zach updates me on the plan, I get more and more fired up.

Third, because Base is showing that it knows how to vertically integrate, by going fast and making mistakes and learning and building the machine with those learnings. Vertical integration is both the biggest risk and the biggest strength: done right, the business gets stronger and stronger over time. Batteries get cheaper. Installs get faster. Software gets smoother. And the capabilities Base is able to bring to bear on any new challenge become more substantial.

Finally, though, and maybe less intuitively, the reason Base is able to capitalize on new opportunities as they present themselves is that they are deeply tied to the mission while remaining flexible on the strategy and tactics.

This was a core theme of the first Deep Dive, when changing strategies meant writing different words in a Google Doc – hard, but not that hard.

What’s impressed me so much is that they’ve maintained that nimbleness as the strategy turned into actions, as people have gone out into the field and seen what works and what doesn’t, what others are doing well and what leaves tons of room for improvement. That things are going so well in deregulated markets in Texas and Base is so willing to say, “OK, let’s look at regulated markets in other states” is a sign of that.

“Very few great companies get built with ‘a priori, this is the thing I’m going to build,’” Antonio Gracias reflected at the end of our call. “Most great companies are built by analogy.”

Being married to one solution – because that’s the thing you’ve always wanted to build ever since you were a little kid, or because that’s what you studied in your PhD, or because you think your idea is more clever than anyone else’s - can be an anchor.

Seeing a problem, though, and doing whatever it takes to fix it, even as the particular solution changes, is how the really big ones happen.

Uber was, “I can’t find a taxi, and I don’t want to wait for a ride—let’s improve transportation with technology.” Airbnb was, “I don’t want to sleep on an uncomfortable couch.” Facebook was, “I want to connect with interesting classmates.”

“The thesis,” Antonio said, “is that disruption almost always happens by analogy as opposed to building a brand new thing.”

In Base’s case, the goal is not to build a new and better battery. As Antonio described it, it’s, “I want to fix a utility market that hasn’t been disrupted for 150 years using batteries, technology, installs, whatever it takes.”

When I first met Justin, he didn’t tell me about a new cell chemistry he’d dreamt up; he showed me a chart of the total cost of electricity, and said his goal was to bring that down.

It turns out, to do that, you need to lower delivery costs. To do that, you need to fix the grid. To do that, you need to install a lot of batteries. And from there, from that position as Electricity’s Operating System, from the Base layer, you need to do a whole lot of other things, too.

It will take a lot to modernize the grid. But it’s doable. And Base is doing it. Executing violently. Chopping wood, carrying water. Focusing on the big prize.

“What we are building is the best bet to bring down the total cost of energy,” Zach told me as we wrapped up our conversation in Austin, before I went to meet the rest of the team and he headed to a recruiting call. “This is how you get energy too cheap to meter.”

This, too, I’m betting, is how you build America’s Power Company. But it’s going to take a lot of work. Join ‘em.

Thanks to all of the Base investors and team members who spoke to me for this piece.

That’s all for today. We’ll be back in your inbox Friday with a Weekly Dose.

Thanks for reading,

Packy

Hyperlegible 006: Forsaking Industrialism

2025-04-13 21:13:53

Hi friends 👋,

Happy Sunday! I don’t normally send on the weekend, but this conversation is timely enough that it’s worth throwing in your ears today to prepare for the week ahead.

Last week, I was delighted to see that Conrad Bastable dropped a new essay:

Forsaking Industrialism: The Most Expensive Thing You Didn’t Buy (Why You Need More Than Tariffs To Win Zero-Sum Games On The Global Stage)

Conrad doesn’t write often. At the end of this one, he writes:

My end of the writer-reader bargain is that I promise not to publish unless I have something interesting & meaningful to say. If I’m upholding it, you may not agree with all of my perspectives, but ideally you come away from each essay with a newer or richer framework to think about what it means to build great things.

I’ve found that to be true. I discovered his writing when I read his last essay, Monetization and Monopolies: How the Internet You Love Died (Or Why Tech Monopolies Are Actually Good for Society). It’s a contrarian take that, through insane levels of research and clear argument, he makes almost obvious.

So when he published Forsaking Industrialism, I was thrilled to see both that he was back at the keyboard, and that he’d written about a topic that I, and millions of other people if my twitter feed is any indication, needed to think more deeply about.

The timing was coincidental, Conrad told me. He’d been planning to write this essay on tariffs and reindustrialization for six months, since Trump started hinting (yelling to deaf ears?) that he was serious about tariffs, and since Conrad himself tried to buy a dirt bike and saw first hand what the West and the East had to offer.

There are no simple answers here — in the essay or in the conversation. I had to force Conrad, at the end of our conversation, to just pretend that he was President with a magic wand who could reindustrialize America with whichever policies he chose. Even that premise - that a dictator could enact a clean set of policies and carry them out over decades - goes against what America is and does, and even with the magic wand, the set of prescriptions is long, complex, and interconnected. Tariffs, he said, are a piece, but tariffs, he writes, are not enough.

Instead, what Conrad does in the essay is to lay out, at both the 30,000 foot theoretical level and in the weeds of the specific incentives of specific people at specific companies, how we got where we are today. China has spent decades building an Industrial Platform that gives them the ability to build all sorts of electric products almost at will. America, because the investments required to build an Electric Platform have had a much lower expected IRR than investing in software companies, has not.

I came away from the essay and the conversation with a healthy sense of: this is really f’ing complex. EU regulations, meant to help, push demand to China. Environmentalism, meant to save the planet, push demand to China. There is no boogeyman responsible for the West’s relative decline in industrial capability; there are millions of well-meaning, rational people and decisions operating inside of a capitalist democracy that have, slowly but surely, added up to where we are today.

Two of the most interesting sets of relationships Conrad and I discuss are those between Labor and Capital, and between Principles and Prosperity.

On Labor and Capital

Main Street versus Wall Street is the wrong framing. Successful industrial policy, he says, is about threading the needle between labor and capital.

If domestic labor is too unhappy, they're going to do really bad things for productivity, but if capital's unhappy too, it just leaves.

On Principles and Prosperity

One response to China is to become more like China. Conrad writes that this is the worst of all worlds:

What I think would be most tragic of all, and this is where the European and British cases are instructive, would be to ultimately forsake the philosophies and values of the West without actually improving the underlying productivity and Wealth of the our people.

If we forsake some of what makes our culture special, but do so in service of things that don’t simultaneously increase domestic productivity and involve a greater share of the domestic population in those new gains…the inevitable ruin that follows will be well deserved.

…I hope to convince at least a few readers that abandoning Principle AND Prosperity is the worst trade of all.

There’s a matrix. Japan focuses on principles over prosperity, and this may be Europe’s best quadrant if it continues to choose not to pursue prosperity. China, on the other hand, is in the Keep Prosperity/Abandon Principles quadrant: discarded communist ideology in favor of pragmatic economic growth while maintaining an authoritarian system. This is a viable strategy too!

The ideal for America, as hard as it may be to achieve, is to Keep Principles and Keep Prosperity. It’s both challenging, and the only path likely to succeed. The messy beauty of free market capitalism and democracy helped get us into this mess, and it might be the only way out.

Really, though, this conversation isn’t about answers. It’s about providing information, asking questions, and helping you ask some questions of your own.

With so much dumb, flip-floppy chatter about what it’s going to take to reindustrialize America, I hope listening to this conversation gives you an appreciation for how hard, and how important, the challenge is, and what it might take to get a good outcome.

At the very least, if you read and listen to Conrad, you’ll sound smarter arguing with people on the internet this week.

As always, you can find the full conversation wherever you like by subscribing to Not Boring Radio:

YouTube:

Spotify:

Apple Podcasts:

You can also find links to all of the essays and conversations at readwise.io/hyperlegible. Thanks to our friends and sponsors at Readwise, you can head there for a free trial and get all Hyperlegible articles automatically added to your account.

While you’re there, you can check out our other Hyperlegible episodes, like the one we published on Monday with Parakeet on Skittle Factory Dementia Monkey Titty Monetization:

Big thanks to Conrad for joining me, and to Jim Portela for editing!

Thanks for listening,

Packy

Weekly Dose of Optimism #139

2025-04-11 20:28:41

Hi friends 👋,

Happy Friday and welcome back to our 139th Weekly Dose of Optimism. Bit of a rollercoaster week, eh? Gotta keep things interesting, I guess? Well, behind all the ups and downs of the stock market and political jousting, it was a surprisingly jam-packed week on the good stuff front. We’re here to cover that stuff.

Let’s get to it.

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(1) The Return of the Dire Wolf

Jeffrey Kluger for Time

Relying on deft genetic engineering and ancient, preserved DNA, Colossal scientists deciphered the dire wolf genome, rewrote the genetic code of the common gray wolf to match it, and, using domestic dogs as surrogate mothers, brought Romulus, Remus, and their sister, 2-month-old Khaleesi, into the world during three separate births last fall and this winter—effectively for the first time de-extincting a line of beasts whose live gene pool long ago vanished.

You hear that howl? That’s the first time any human has heard that howl in 10,000 years. Dire wolves are BACK.

We’ve written a bunch about the company behind the Dire Wolves, Colossal Biosciences, the company with the mission of using genetic engineering to reverse extinction. First, it was about raising a boatload of money at a high valuation for seemingly far-flung science projects. Then it was about breeding woolly mice. And now, the company has straight-up de-extincted the dire wolf. There are literally dire wolves running around on some farm that, had Colossal never intervened, would never have ever existed in all future time.

Colossal sequenced the dire wolf genome from ancient DNA (there are plenty of dire wolf remains in North America) and identified 20 key genetic differences from modern gray wolves. They edited these genes in gray wolf cells, then cloned embryos using those edited cells. The embryos were implanted into large domestic dog surrogates, who gave birth to three healthy pups. These pups Romulus, Remus, and Khaleesi (great names) are now the first living dire wolves in over 10,000 years.

Now, do I think we need man more than three dire wolves roaming around? Personally, I’m good at three. Maybe there’s some case for using dire wolves for population control. But probably other ways to do that other than breeding packs of ancient wolves and releasing them into the wild. However, Colossal’s continued learnings and gene-editing innovations can be applied to other animals and maybe even one day be applied to preserve a certain very intelligent, thoughtful, and good-looking animal from going extinct in the first place. I’m look at you, pal!

(Packy note: There’s been some controversy over whether these are actual dire wolves. From Grok:

Colossal argues these pups represent a successful revival of the dire wolf, a species extinct for over 10,000 years, because they exhibit physical characteristics like larger skulls, white fur, and stronger jaws, which they associate with dire wolves.

Critics, however, argue these animals are not dire wolves but gray wolves with superficial modifications. Dire wolves (Aenocyon dirus) and gray wolves (Canis lupus) are distinct species, with some estimates suggesting they diverged evolutionarily 2.5 to 6 million years ago. Colossal’s process involved editing 20 sites across 14 genes in gray wolf cells, based on ancient dire wolf DNA from fossils, to mimic certain traits. Skeptics point out that this is far from reconstructing a full dire wolf genome, which would be nearly impossible due to the degraded state of ancient DNA. They argue the resulting pups are hybrids at best, with a genome still overwhelmingly gray wolf—sharing about 99.5% of their DNA with modern gray wolves.

You can watch Colossal’s Chief Science Officer, Dr. Beth Shapiro, address it here.

Not Boring take: if it howls like a dire wolf and bites like a dire wolf… it’s dire wolf enough for us.)

(2) Building America's Next-Generation Power Company

From Base

Today, we’re announcing our $200 million Series B funding round, led by Addition, a16z, Lightspeed, and Valor, with support from existing investors Thrive, Altimeter, Trust Ventures, and Terrain. Lee Fixel of Addition will join Antonio Gracias of Valor on our board. Our mission at Base is to fix the power grid and enable affordable & reliable electricity for all. To do that, we are building America’s Next-Generation Power Company; the first engineering-led, technology-focused, R&D-driven electricity company.

With the bases loaded, Base just hit a $200M grand slam Series B.

The company, which Packy Deep Dived here and plans to provide an update on next week, continues to violently execute against its mission of fixing the electric grid by building the Modern Power Company of the Electric Era. And now it has the capital and about as stacked of investor base as a 3 year old company could wish for to continue on with its mission.

Packy is going to go into much more depth early next week (be on the lookout), but I’ll try my best to summarize what Base does and why its important. The company manufactures, installs, and operates a distributed network of residential batteries, and taps its network to trade power and stabilize the grid. Batteries are super important; they transport electrons, which typically need to be use as produced, through time, and are necessary to balance the grid as we bring on more renewable energy and more electric products like cars, stoves, heat pumps, boats, and robots. Base currently operates in Texas, but the goal is to build America’s Next-Generation Power Company.

Short story: the more batteries Base installs, the faster and more effectively we can electrify America.

(3) ZERO-BASED REGULATORY BUDGETING TO UNLEASH AMERICAN ENERGY

From The White House

This regime of governance-by-regulator has imposed particularly severe costs on energy production, where innovation is critical. The net result is an energy landscape perpetually trapped in the 1970s. By rescinding outdated regulations that serve as a drag on progress, we can stimulate innovation and deliver prosperity to everyday Americans.

This order directs certain agencies to incorporate a sunset provision into their regulations governing energy production to the extent permitted by law, thus compelling those agencies to reexamine their regulations periodically to ensure that those rules serve the public good.

Speaking of American energy, the White House announced an executive order that essentially puts in place zero-based budgeting on federal energy regulation. The EO argues (and rightfully so) that excessive and outdated rules hurt innovation and productivity, especially in energy. To fix this, the EO forces agencies to add "sunset clauses" to their rules, which means the rules will expire unless they’re reviewed and re-approved.

We think this is a good thing. The EPA, DOE, FERC, and NRC are ripe for some zero-based budgeting. The “regulatory ratchet” has bogged these agencies, and the companies they regulate, down by decades of rules and regulations that together prevent the very outcomes they’re hoping to achieve. Let’s wipe the slate somewhat clean and build out a new rules framework that will both protect our environment and safety, while also allowing us to build and grow.

We don’t need to like everything Donald Trump does. The tariff rollouts were a disaster, and the negative impacts keep on coming even after the pause. If this were the Weekly Dose of Pessimism, the President would be the Star of the Week.

But this is actually an interesting and even … thoughtful? … application of his “burn-it-all-down” approach to policy making. A controlled burn. A healthy request to justify the rules that prevent us from building things. If we’re going to have to build everything in America, we need to at least make it possible to build.

(4) Zipline Drone Delivery Takes Flight in Texas With Walmart—For Free

Jack Daleo of Flying Magazine

The world's largest drone delivery provider announced Tuesday that residents located within 2 miles of a Walmart Supercenter in the suburb of Mesquite are eligible for delivery of more than 65,000 items in 30 minutes or less.

Speaking of cutting regulatory red tape in order to grow, if ANYONE gets in the way of these Zipline drones from delivering me my snacks we’re going to have a problem.

The drone logistics company announced a big step forward: it’s now providing its drone delivery services for Walmart customers in the Dallas, Texas area. Dallas is the company’s first major metro and will hopefully serve as a model for its delivery service rollout to other major metros in the U.S. To make this happen, Zipline is partnering with Walmart to provide 30 minute or less delivery of over 650,000 of the retailers items. About 80% of things sold in Walmart can be shipped via Zipline.

What Zipline is trying to pull off isn’t exactly new for them. They’ve done it before. The company has already executed millions of drone deliveries outside the U.S. in a number of West African countries and even Japan. The question is not whether drone delivery works, but whether drone delivery will work, economically, in the U.S. And this rollout into Dallas will go a long way in terms of answering that question.

We bet yes. Expect to see a lot of little guys zipping across the skies with your treats, necessities, and even medications in the years to come. Zip-a-dee-doo-dah.

For a little bonus Dose, check out Zipline co-founder Ryan Oksenhorn’s thread sharing the story of a Ghanaian girl bit by a snake and saved by Zipline here.

(5) Advanced Manufacturing Company of America

From Advanced Manufacturing Company of America

Today, we launched Amca with $76.5 million in funding and a vision to renew the spirit of the aerospace and defense industry’s golden age. Our launch funding was led by Caffeinated Capital with major participation from Founders Fund, Lux Capital, Andreessen Horowitz, and other world-class investors.

If your job at the new American sock factory or iPhone assembly plant doesn’t pan out, rest assured there’s an existing American manufacturing industry that could use an extra hand. I am talking about the aerospace and defense aerospace supplier industry. The supplier base is aging, underfunded, and increasingly overlooked, despite being absolutely essential to the performance of mission-critical systems. And just as these suppliers are becoming more and more essential, they’re faced with succession planning and technology gaps that make their future uncertain. This is the exact environment that attracted Not Boring portfolio company Hadrian to rethink and vertically integrate industry.

This week, another company entered the industry with similar ambitions to use capital, modern technology, agility in order to rethink the aerospace supplier industry. The Advanced Manufacturing Company of America (Amca) launched with news of raising $76.5M in initial capital and a strategy of combining a private equity roll-up strategy with a tech-forward operating model to revitalize the American aerospace supplier industry. They’re backed by some of the best in the biz and we’re rooting for them!

Bonus: California Forever is Bringing Shipbuilding Back to Solano County

Packy here. California Forever, which is building a new city in Solano County, California, announced plans this week to build the Solano Shipyard on some of the land that it’s acquired.

The need for American shipbuilding is urgent. As CF founder Jan Sramek highlighted in a thread, “Last year, one Chinese shipyard built more ships than every American shipyard – combined – since WW2.”

Understandably, then, the organization wrote in its blog post, “The Bi-Partisan SHIPS for America Act and the President’s formation of the White House Office of Shipbuilding have clearly made restoring America’s naval and commercial shipbuilding a national security imperative.”

I am a huge fan of the movement to build new cities. Build Esmerelda. Build Proto Town. Build NEOM. I’m also a proponent of building shipyards here, as any red-blooded Freedom’s Forge reader would be.

This one is particularly timely, though, because this week, I interviewed Conrad Bastable for Hyperlegible about his recent essay, Forsaking Industrialism. (Look out for that conversation this weekend.) He didn’t want to make prescriptions in the piece - the best industrial policy, he wrote, is to “Do all the things that matter and none of the things that don’t.” But I forced him to play President, and his answer looked something like what CF is proposing. To start, he proposed building regional industrial hubs with full industrial platforms — “Building the Solano Shipyard is a generational endeavor that would bring tens of thousands of jobs to not just the waterfront, but to co-located supply chain manufacturing facilities that would likely spring up across Solano’s cities and in the broader region,” CF writes — and putting a lot of new housing next to them.

After a long week and a half, we now know what reindustrialization shouldn’t look like. The Solano Shipyard is one version of what it should.

Have a great weekend y’all.

Thanks to HoneyBook for sponsoring. We’ll be back in your inbox next week.

Thanks for reading,

Packy + Dan

Hyperlegible 005: Parakeet

2025-04-08 20:33:04

Hi friends 👋,

Happy Tuesday! I have been excited to send this episode to you since the pseudonymous writer, Parakeet, responded to the message I sent her immediately after reading her weird and wonderful essay, Skittle Factory Dementia Monkey Titty Monetization.

I first heard about Parakeet a couple weeks ago when I saw half of my Twitter feed and half of my Substack Notes feed sharing her essay, including a bunch of people I wouldn't expect to share an essay with "Monkey Titty" in the title. Graham Duncan via Nabeel Qureshi is about as well-recommended as something can come in my book.

I read it immediately, and understood why. Parakeet describes universally applicable ideas with the color turned up to 11.

I’m biased, but I think our conversation was even more fun than the essay. Here’s one tidbit that I think captures the vibe well:

Good writing comes to life when I think like you just describe the truth as simply and as clearly as possible. And I think like the truth is always beautiful, the truth is always like the most alive thing that you can put in like an artistic work. Okay, the Monkey Titties guy.

This Parakeet contains multitudes.

Because Parakeet is pseudonymous, we animated her portion of the video with an illustrated version of the Hellenistic Mosaic of the Alexandrine Parakeet from Pergamon using GPT images and Hedra. HUGE thanks to our editor, Jim Portela, for making it happen.

In our DMs, Parakeet explained why she asked for this particular bird:

I love the Alexandrine Parakeet because Alexander the Great saw it on a campaign in India and was fascinated by its ability to mimic speech, so he brought it to Greece as a beautiful exotic pet. It is one of the earliest known instances of bringing an exotic Asian species to Europe so it kind of an emblem of cross cultural exchange.

As for the conversation itself, well… we went wide.

We explore the "dementia personality" - how our core thought loops shape who we are and might one day define us, whether we choose for them to or not. She shares what she learned working at a dementia facility and explains her Skittle Factory metaphor for personality (and researching Skittle Factories). From the essay:

A person is like a skittle factory. Your personality is the Rube Goldberg machine clicking and whirring on the assembly floor. The core loop is the fuel powering the factory— your dementia personality. The gas nobody sees but everyone smells. Everyday, reality delivers raw ingredients to your loading dock— conversations, meetings, weather, weird eye contact with strangers— and your factory processes this arbitrary shit into something predictable: your particular flavor of reality. Your skittles.

We talk about her writing process, gifs, why more people should read George Orwell's Politics and the English Language, and what she learned from her once-half-paralyzed dance teacher. You’ll hear the bizarre true story behind the "Monkey Titty" portion of the essay title and why Parakeet believes everyone should re-read Atlas Shrugged as an adult.

Plus, Parakeet reveals her one-simple-trick to publish more often.

The whole thing was the right mix of thought-provoking, weird, and fun.

As always, you can find her essay and all of the essays we cover on Hyperlegible at readwise.io/hyperlegible. Thanks to Readwise for supporting the pod.

If you like watching and listening somewhere other than Substack, you can find the conversation wherever you watch and listen:

YouTube

Spotify

Apple Podcasts

If you could spare 15 seconds, like and subscribe while you’re there. The show is starting to grow, and keeping the momentum going is a huge help.

I hope you enjoy our conversation as much as I did. When you’re done listening, go subscribe to Parakeet here.

That’s all for today. We’ll be back in your inbox later this week.

Thanks for listening,

Packy

Us Against Spacetime

2025-04-07 20:46:34

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Hi friends 👋,

Happy Monday! I wasn’t planning on writing an essay for today. I have a Deep Dive on one of my long-time favorite companies and new Not Boring Capital portfolio company coming later this week. But this is an idea I’ve been playing with for a little bit, and it felt like the right time to hit send.

When things feel short-term rocky, zoom out.

Let’s get to it.

Us Against Spacetime

I, against my brothers. I and my brothers against my cousins. I and my brothers and my cousins against the world.

-Old Arab Bedouin Saying

On Valentine’s Day 1990, at the suggestion of astronomer Carl Sagan, from four billion miles away, Voyager 1 took a snapshot of Earth. You can see it in the image above, if you look closely. It’s in the sunbeam in the top quarter, a little right of center. That’s it. Our Pale Blue Dot.

“The earth is a very small stage in a vast cosmic arena,” Sagan wrote four years later, the same year he was diagnosed with the myelodysplastic syndrome (MDS) that would kill him two years later, in his book, Pale Blue Dot:

Think of the rivers of blood spilled by all those generals and emperors so that, in glory and triumph, they could become the momentary masters of a fraction of a dot. Think of the endless cruelties visited by the inhabitants of one corner of this pixel on the scarcely distinguishable inhabitants of some other corner, how frequent their misunderstandings, how eager they are to kill one another, how fervent their hatreds.

We are very good at carving the Dot’s inhabitants up into tribes. Last week, the United States imposed tariffs on practically every country that is “not us.” On Saturday night, I sat in a bar and rooted for one group of 18-year-olds I’ve never met to score more points than another group of 18-year-olds I’ve never met (their 18-year-olds, sadly, scored more than ours).

We have conjured up every which way to divide the roughly 8.215 billion people alive on planet Earth in the year 2025. You can always divide further, until you get down to I, against my brother. Jung might argue you can divide further than that.

There’s one division, though, that I haven’t seen made explicitly:

Everyone Alive Right Now vs. Everyone Who Has Lived in the Past or Will Live in the Future.

Everyone Alive Right Now vs. An Incomprehensibly Large and Long Universe.

Us Against Spacetime.

There’s a 0.0000000000000000000000000000000001% (that’s 10^-35!) chance that we exist here together right now – Earth is just one of 10²⁴ planets in the observable universe and 2025 is just one in roughly the 100 billion years the universe may survive – and yet, here we are.

That makes us, for all our differences, part of a shockingly rare cohort. A miracle tribe.

I have more in common with someone living in Beijing today than I do with the person who lived on the same plot of land I live on now in 1900. Certainly, the Beijinger and I have much more in common with each other than with alien beings on a remote planet a billion years in the future.

Since I’ve started thinking about this topic, I’ll look at people I pass on the street – people of different races, ages, stations in life, whatever - and think about how mathematically impossible it is that we’re sharing the same sidewalk square at the same moment. What are the odds?!

This is not how we think about things in the present, maybe because there are more acute differences to consider. That asshole at work against whom I compete for the promotion is a much bigger concern than how our generation will be remembered, in the same way that the Moon looks so much bigger than Mars in the night sky: it is closer.

But that is how, given the passage of enough time, we will be remembered, if we’re lucky. We remember the Bronze Age as the time when humans - can you name which human? – learned to smelt bronze. More people know the Industrial Revolution than the name James Watt.

To the extent that we do talk about ourselves as a collective temporal thing, it’s typically in terms of the bad things we’re doing to future generations because we don’t think of ourselves as part of a longer timeline: saddling them with debt, destroying the planet they will inherit.

Usually, when we talk about what we can do for future generations, the best we can muster is: don’t fuck things up.

A more interesting framing would be: how sharply can we, those of us alive now, bend humanity’s trajectory upwards? How much more can we contribute to the universe than anyone before or after?

Where this line of thinking leads is to something like no tariffs, full comparative advantage, no wars. If China has built an excellent Electric Industrial Platform and America remains the best at creating original IP, we team up and accelerate. Everyone wins. Real Globalism has never been tried.

This is obviously impractical. Global supply chains were not resilient to COVID, let alone to malice. In the real world, while tension or the potential for tension exists between the US and China, we don’t want all of our big, autonomous electronics to come with a CCP backdoor (and there’s always the potential for tension). When the Next War comes, you want your country to be able to produce drones at scale. A good guy with IP cannot stop a bad guy with a drone swarm.

There exists a Pareto Frontier so far out you can barely see it from here that, because humans are tribal creatures and because Moloch is real, we will not reach in our lifetimes.

To be clear, there have historically been good reasons for our tribalism. When resources are scarce, you gotta get yours. When the barbarians are at the gate, you gotta protect your own.

Further countering my argument is the fact that, in the process of protecting our own, humans birth technologies that benefit us all. I’ve written at length about the military-industrial complex’s positive externalities (see: solar panels, chips, nuclear power, etc…), and I keep discovering new ones. The other day, I was reading The Box, a book about the history and impact of the shipping container, and I learned that the US’ logistical challenges prosecuting the Vietnam War cemented the 8’x8.5’x40’ shipping container’s place as the global standard.

Competition breeds innovation. Kumbaya breeds peaceful complacency.

This essay contains no policy or economic advice. This shit is hard.

But I guess what I would suggest is that we already spend so much time thinking about the divisions within our miracle tribe that it might be useful to spend a little more thinking about the much larger competition: our miracle tribe against all who have come before us and all those who will come in the future, against entropy and irrelevance and a big, cold universe of which we have experienced just 10^-35.

Among all of the miracle tribes that have ever lived – those groups of people who happen to share the planet at any given time – ours is the most miraculous time. We are seriously discussing what we might do with ourselves in conditions of material abundance so plentiful that none of us needs to work. Instead of looking backwards and small, we must look forward and big.

Ours might be the miracle tribe that delivers energy too cheap to meter. Ours might be the one that cures cancer and extends healthspans by decades. Ours might be the one that makes transportation autonomous and supersonic. Ours might be the one to birth intelligences and robots to do our grunt work for us. Ours might be the one that seeds a second branch of the tribe on another world. The first to leave this Pale Blue Dot.

That pale blue dot contains something remarkable: the only known beings in the universe who can contemplate their place within it.

We are the first clumps that are able to change their own trajectory.

We are the clumps of stardust that have evolved the furthest, that we know of.

We have evolved to the point – genetically, culturally, economically, and technologically – that we are the first clumps that have the potential to break free from zero sum competition, to coordinate and cooperate and, yes, compete in a way that benefits our miracle tribe.

Globalism has become a dirty word, because the way globalization has been implemented has left many behind even as it’s lifted many more up. But given the sheer improbability of our being here, given the fact that the 8.215 billion of us are the only teammates we have in this grand cosmic game, a return to a more tribal, divided world is an admission that we care more about beating each other than we do about winning.

I worry that “Globalism,” for its faults, has become a catch-all boogeyman for anything that has gone wrong as a natural consequence of a progress that has in actuality made the world much richer, an excuse to paint “us” versus “them” for personal gain, an enemy jersey to put on the inevitable. I fear that efforts to stem its tide in economically unnatural ways are fingers in dikes.

Maybe “Earthism” works better. Earthlings against space, time, and the elemental foe.

When a man in one part of the world can lift himself out of poverty by making something that someone on the other side of the world could never have afforded before, that is a win-win. When a drug developed in China saves an American patient’s life, that is a win-win. When the reverse happens, that is a win-win, too.

Again, impractical, but if I could implant an idea deeply into everyone’s brain, it would be this: we, these dramatically improbable clumps of stardust sharing a cosmic eyeblink, have the chance to leave gifts for future generations that force them to remember our tribe. What a waste it would be to throw that away. We can continue to throw our energy sideways, or use it for thrust.

I, against my brothers. I and my brothers against my cousins. I and my brothers and my cousins against the world. I and the world against spacetime.

There is an order to the old Bedouin saying. Brother first. For all this talk of Earthism, I am American. I want to see America thrive. I invest in and write about companies building real things in the physical world in America who want to compete fairly and win. We need to be able to construct and manufacture big, important things in America, for our safety and for our soul. If we’re talking America versus the CCP, I’m Team America eight days a week.

I’d just rather we all zoom out a little bit and think about whether we want to spend more of our one-in-10³⁵ chance to scrap with each other over a smaller prize or win so bigly that our winning reverberates through spacetime.

Thanks to Claude and Dan for editing, and to our friends at Ramp for sponsoring.

That’s all for today. We’ll be back in your inbox this week with a new (and wildest yet) Hyperlegible and a Deep Dive.

Thanks for reading,

Packy

Weekly Dose of Optimism #138

2025-04-04 20:31:58

Hi friends 👋,

Happy Friday and welcome back to our 138th Weekly Dose of Optimism. We hope that your week was tarrific and not too tarrifying. Instead of staring at your portfolio all weekend, may we recommend you indulge in some slightly more optimistic news to help ease the pain?

Let’s get to it.

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(1) Alphabet’s AI Drug Unit Raises $600 Million From OpenAI Backer

Dana Wollman for Bloomberg

Isomorphic Labs, the Alphabet Inc.-owned company that uses artificial intelligence to discover drugs, has raised $600 million, the first time it’s taken in external funding.

AI is making money moves into pharma. Alphabet’s drug discovery startup, Isomorphic Labs, just raised $600M in its first-ever external funding round—led by Thrive Capital, a major backer of OpenAI. The smart money sees AI not just as a chatbot engine, but as a future drugmaker.

Founded by DeepMind CEO Demis Hassabis, Isomorphic aims to accelerate how we discover and develop new medicines. Backed by groundbreaking work in protein folding and now partnered with Novartis and Eli Lilly, the company is laying deep foundations. It hasn’t produced a blockbuster yet, but it's quietly building the infrastructure to do so.

AI is moving upstream into biology, and the companies with the deepest models and pockets may soon shape the future of medicine.

(2) New funding to build towards AGI

From OpenAI

Today we’re announcing new funding—$40 billion at a $300 billion post-money valuation, which enables us to push the frontiers of AI research even further, scale our compute infrastructure, and deliver increasingly powerful tools for the 500 million people who use ChatGPT every week.

I have a hot take. Or at least, in the context of our current economic policies, it's a hot take. Competition is good for consumers. Competition drives down prices and drives up quality and spurs innovation. Which is why I love what’s happening in AI right now. It’s competition on steroids, and for the most part, it’s all happening right here in the US.

When OpenAI raises $40B, that’s good for consumers. It’s also good for OpenAI, to be clear. But my perspective is that it’s ultimately even better for the consumer. It increases competition. Its larger competitors, like Google or Amazon or Microsoft, may look at OpenAI now and say, “hmm they seem like an even bigger threat, let’s make all of our really good products completely free for consumers and try to slow their growth.” Its smaller competitors, like Anthropic or more verticalized AI players, are probably like “ohh shit, no way we can’t compete on capital with them, we just really to need increase our product quality and innovation.”

It’s unclear where the value will ultimately accrue amongst these companies. But what is certainly clear is that consumers are going to get cheaper, faster, better AI products thanks to this period of AI company knife-fighting.

(3) A streaming brain-to-voice neuroprosthesis to restore naturalistic communication

Littlejohn et al, h/t Vittorio

Our findings introduce a speech-neuroprosthetic paradigm to restore naturalistic spoken communication to people with paralysis.

We can now stream thoughts to voice.

A breakthrough in neural speech prosthesis enabled people with paralysis to speak silently and fluently just by thinking. A new deep learning model decodes brain activity into real-time speech at up to 90 words per minute (WPM), which is triple the previous record. It then synthesizes the user's own voice and works continuously, without prompts or delays. Even more impressively, it decoded words never seen in training.

Unlike past systems, it decodes pure motor intent instead of it relying on sound or audio feedback, which is a big leap toward thought-to-speech communication. No need to vocalize, no keyboards, just pure thoughts → language. How this technology will evolve is anyone’s guess: wearables, use cases outside of the disabled community, no one ever actually speaking again…who knows? But this is the type of SciFi-y, Telepathy Tapes-esque breakthrough we absolutely love to cover in the Weekly Dose.

(4) A natural experiment on the effect of herpes zoster vaccination on dementia

Eyting et al in Nature

Through the use of a unique natural experiment, this study provides evidence of a dementia-preventing or dementia-delaying effect from zoster vaccination that is less vulnerable to confounding and bias than the existing associational evidence.

The shingles vaccine may delay dementia. That’s according to new, clever research coming out of the UK which found that people just barely eligible for the herpes zoster (shingles) vaccine were 20% less likely to be diagnosed with dementia over the next seven years.

The researchers took advantage of a strict age cutoff — those born just one week apart had vastly different vaccine rates but were otherwise identical, allowing for unusually strong causal evidence. Back when the Welsh government rolled out the zoster vaccine in 2013, it made people who turned 80 before September 2, 2013 permanently ineligible, while those who turned 80 on or after that date were eligible for one year. This arbitrary line created a natural “randomization”: people born just days apart had a 47% difference in vaccination rates, enabling researchers to isolate the vaccine’s effect without typical biases.

The study’s findings support the theory that either herpesviruses themselves contribute to dementia or that the immune activation from live vaccines like Zostavax provides off-target neuroprotection. Women and people with autoimmune conditions benefited more, hinting at immune system mechanisms. Importantly, this effect wasn’t seen with other diseases, vaccines, or behaviors, ruling out confounding.

(5) Lepodisiran — A Long-Duration Small Interfering RNA Targeting Lipoprotein(a)

Nissen et all in the New England Journal of Medicine

Lepodisiran reduced mean serum concentrations of lipoprotein(a) from 60 to 180 days after administration.

You may have never heard of lipoprotein(a), but it can kill you. It’s linked to a 2x higher risk of heart attacks and strokes for 1 in 5 people. The genetically determined particle is made of cholesterol, fats, and a sticky protein called apolipoprotein(a). High levels can clog arteries and dramatically increase the risk of heart attacks and strokes, especially in people with no other clear risk factors and, frustratingly, it’s unaffected by diet, exercise, or most existing drugs. Doctors don’t even screen for it because there’s not much they can do about it.

Or at least we thought so!

Lepodisiran, a new injectable from Eli Lilly, reduced lipoprotein(a) by up to 94% with a single dose, and the effect lasted six months. The early trial showed dramatic biomarker reduction and no serious side effects. Yet, it’s ability to prevent heart events is still unproven. Large outcome trials are ongoing, with Eli Lilly's wrapping in 2029 and Novartis leading a faster path with results in 2026. If outcomes match biomarkers, this could be the statin moment for genetically-driven heart disease.

We like telling cancer to go fuck itself in the Dose, but it feels good to say it to heart disease, an even bigger American killer, too. So get fucked, heart disease.

Bonus: Hyperlegible 005: Alex Danco, Scarcity and Abundance in 2025

Packy here. I’ve been having a ton of fun interviewing the people behind my favorite essays for Hyperlegible over the past two weeks. Tina He, Utsav Mamoria, and Julian Lehr have all exceeded my already-high expectations.

Now comes Alex Danco. Alex has been one of my favorite internet writers since before I became an internet writer. I wrote about his essay, Positional Scarcity, way back in April 2020s Wackos and ZoomGlüts. He’s appointment reading for me.

So I had high hopes for our conversation on his new piece, Scarcity and Abundance in 2025, and he… completely demolished them. He’s just so good. One of those guests that you could throw three random words out there and he’d figure out what you were going for and give a much better answer than you could have ever anticipated.

The essay, and therefore the conversation, is about the dynamic between scarcity and abundance, where value accrues when new abundance (and therefore new scarcity) is created, how companies like Apple, Cursor, NVIDIA, and YC might fare, and how Agents + Crypto might actually become a thing.

Very few people have shaped how I think about tech companies as much as Alex. Listen to our conversation to understand why, and then go devour his back-catalog.

Have a great weekend y’all.

Thanks to Vanta for sponsoring. We’ll be back in your inbox next week.

Thanks for reading,

Packy + Dan