With Great Power

Why utilities are consumer product companies now

Episode Summary

Chris Black of GridX thinks great user experiences start with great design.

Episode Notes

Chris Black had always planned on being an architect. But during his freshman year in college, he pivoted to computer science. On the surface, it looked like a strange change of course. But Chris saw parallels in the importance of form and function in both fields. 

Computer science eventually led Chris to the energy sector, where he brought his passion for making great digital products to the world of utility rates and programs. In 2022, Chris became the CEO of GridX.

This week on With Great Power, Chris Black talks about why he’s so focused on product design and creating great user experiences. He also discusses GridX’s recent acquisition of energy data analytics company InnoWatts, and explains why and how GridX will continue to grow through mergers and acquisitions. Chris also shares his views on the ways that utilities are evolving and why he considers them to be product companies.

Credits: Hosted by Brad Langley. Produced by Mary Catherine O’Connor. Edited by Anne Bailey. Original music and engineering by Sean Marquand. Stephen Lacey is executive editor. The GridX production team includes Jenni Barber, Samantha McCabe, and Brad Langley.

Episode Transcription

Brad Langley: 1995 was a big year for tech nerds. Sun Microsystems introduced JavaScript. Larry Page and Sergey Brin started building what would become the Google search engine, and the cult classic movie Hackers hit the big screen.

Hackers clip:  "Look, even if you had the password, it'll take you 10 minutes to get in and you still got to find the files, man. I mean, the cops will have you in five minutes." 

Computer science was rapidly changing from subculture to pop culture. That same year, Chris Black graduated from the University of Arkansas with a computer science degree.

Chris Black: It was impossible to talk to two people back then without at least one of 'em saying, "You should definitely go into computer science. It's the way of the future."

Brad Langley: But as a kid, Chris thought he'd end up in architecture, not computer science.

Chris Black: I was super passionate about it. I was the nerd that would go to the public library and check out books on Japanese architecture, and I totally nerded out about all of that.

Brad Langley: It wasn't just that buildings were fascinating in their functionality for Chris, they were inspiring too.

Chris Black: Architecture for me is the perfect blend of form and function, right? You can make something beautiful that collapses, or you can make something that is, like, brutalist, but super solid.

Brad Langley: But Chris had another obsession, one that would land him at the University of Arkansas on an athletic scholarship.

Chris Black: My entire identity was the swimmer. I think five years old is when I started swimming competitively.

Brad Langley: Chris was one of the best swimmers in the country at the time, so he had his pick of swimming scholarships, but he went with Arkansas for its esteemed architecture program. It seemed like a perfect plan until it didn't.

Chris Black: I had an interview with the dean of the architecture school and he was like, "Oh, you can't swim and do architecture."

Brad Langley: Swimming and architecture would just be too demanding. He'd have to declare a different major. Chris had taken some coding classes in high school and he liked them, so he fell back on that.

Chris Black: It's funny, you'd think that would've been more of an earth-shattering moment for me, but in my memory at least, it almost felt like, "Okay, I guess computer science then."

Brad Langley: So Chris let go of his dreams of becoming an architect, but he held onto his love of form and function.

Chris Black: You can make good software that's super functional, but ugly as sin, and that's just not fun to use. Or you can make software that is a great blend of accomplishing the job at hand, but also doing it in a way that's really enjoyable to use.

Brad Langley: After college, Chris had a few different software engineering jobs. Then he landed a leadership role at Local Matters, an early internet startup that made local information searchable and relevant. There, he crafted products with consumers in mind. One of his projects was essentially digitizing the Yellow Pages, which were still being printed well into the 2010s.

Chris Black: Back then, Yellow Pages were still showing up on everyone's door, like this giant book. And if you think about what the Yellow Pages was, it was just a giant book of ads, and those ads had everything you'd want to know about the business. And so we realized that if you could just digitize all that information and then overlay that with geospatial algorithms, you could do all this clever searching and routing around that information.

Brad Langley: Chris had found his calling, and in 2011, as the rise of smart meters and renewables ushered in today's connected grid, he joined Tendril, where I would also join them a couple years later. Tendril made consumer-facing products for home energy efficiency and demand response programs. Eight years later, Tendril would acquire a series of companies and form Uplight. Then in 2022, Chris became the CEO here at GridX, where he brought his passion for making great digital products to the world of utility rates and programs.

Chris Black: Utilities offer lots of rates. No one knows what rate is right for them or what the impact would be if they were on one rate or another. We are the company that provides the tools to utilities to design all those rates, to analyze the impacts of those rates, to manage customers on those rates, to bill customers on those rates, and that's becoming a really important tool for consumers and for utilities.

Brad Langley: This is With Great Power, a show about the people building the future grid. Today, I'm Brad Langley. Some people say utilities are slow to change, that they don't innovate fast enough, and while it might not always seem like the most cutting-edge industry, there are lots of really smart people working really hard to make the grid cleaner, more reliable, and customer-centric. This week, as a capstone to our fifth season, I'm talking to my boss, Chris Black, the CEO of GridX. We discussed the ways that utilities are evolving, why he views them as product companies, and we also talk about our recent acquisition of InnoWatts. But first, I asked Chris about his focus on good design and how that plays out here at GridX.

Chris Black: My board early on when I joined the company said, "I don't understand why we're investing so much in experience." My answer to that is these are still human beings using the software. I think it's especially true in the back office software. You could take this view of like, "Hey, it doesn't really matter. It's not end-consumer facing. So does the experience really matter as long as it's functional?" But these are still human beings using it that you want to have a delightful experience because, frankly, most back office software is terrible. Maybe it doesn't even have a UI. Maybe it's a green screen. If it has a UI, it's probably a pretty terrible UI, but it does the thing that they need to do by and large. I think that that's such a missed opportunity, right? Because all these users still have a job to do. They still want to enjoy the job that they're doing. You either cause them pain or you can cause them delight. And so I think if you really focus on the overall experience, not just the skin, not just the lipstick, but the overall experience and make that delightful for them, it can be a real differentiator.

Brad Langley: I know you feel strongly that energy companies are becoming product companies and your role is to help them realize that vision. So maybe first, start off by what you mean by that when you say energy companies are becoming product companies?

Chris Black: Historically, I think utilities have thought about themselves as generating and supplying electrons and then billing on those electrons. And because of all the macro changes that have occurred pretty recently, utilities have realized that programs are the way that they really should be organizing and operating. You have a demand response program, you have an EV program, you have a community solar program. It's not that the utility necessarily cares about the program in and of itself. What they care about is that those programs are paired with rates. And so they're trying to get the right people on the right rates in these programs because then they can use those programs as a load modifier. They can manipulate load around to get people using when they need it and not when they don't. So it's aligning consumers' needs with the grid's needs. Those programs, though, are effectively consumer products that they're offering.

They have to design these products—programs. They have to market those programs to the right people. They have to understand their consumers. They have to segment them. They have to understand who's good for program A versus who's good for program B. And when I say programs, that's synonymous with products. You could interchange these things. They have to market those then to those consumers. They have to say, "Hey, Mr. Langley, we think you should be in this EV program. It looks like you have an EV." And then they have to be able to bill those consumers on those products. And so utilities are consumer product companies. They have large consumer bases, millions of consumers. They have many, many products, and they have to market those products effectively to those consumers and match them effectively with those consumers. So I think utilities thinking about themselves as product companies is the next logical evolution and encourages all the goodness that you'd want to come out of that, right? More focus on messaging and marketing and measurement and all the goodness that comes with traditional consumer product companies.

Brad Langley: And knowing you talk to a lot of utility executives in this space, are you starting to see them adopt that mindset and work towards that? And if not, maybe what's holding them back from really embracing that approach?

Chris Black: If you asked me that five years ago, I would've said no. Today I feel totally differently. It feels like every day there is a big reorganization inside some innovative utility bringing in executives from outside the utility space, for maybe the first time in their history, top leaders that have more of a focus on consumer experience than on energy itself. And so I'm seeing tons of evidence of this change happening. They may not be using the same words. They may not be saying, "We are a consumer product-focused company," but the evidence says that's where they're going.

Brad Langley: In addition to being product companies, I've also heard you talk about the utility as a data company. They're just sitting on massive amounts of data and they're starting to really figure out how to use that to engage better with the customers, flex demand, all the things. But I'm curious—not to put words in your mouth—but when you say utilities are a data company, what do you mean by that?

Chris Black: Yeah, I mean, just think about the troves of data that utilities have, and it's really unique data that no one else has. We have now, I think we're up to something in the high 80% range of smart meters attached to homes in the United States. There are a hundred million or more smart meters. These things are sampling every 15 minutes or more. The next wave of AMI meters coming out are sampling thousands of times a second. And so those data packets that they're reading, along with every interaction that you have with utilities—every time you call the call center—all of this data that they have is super valuable data that could be used for informing future consumer products, to inform everything they do in the planning cycle. And there are fairly few companies that I think have the volume of data that utilities have.

Historically, we just haven't done a lot with that data. We haven't extracted a lot of insights out of that data and allowed utilities to really turn that into actual insights. So I think it's exciting to me that this is coming together. You have this big lagging industry that is waking up to the fact that they really are consumer product companies, and at the same time they have long histories of huge amounts of data. If you combine those things, just think about what you could do with that. So that I think is the opportunity.

Brad Langley: So you recently completed the acquisition of InnoWatts. Congratulations. I know we at GridX are all super excited to have the InnoWatts team on board and their products and grid technology. First of all, tell us what is InnoWatts or who is InnoWatts, and what does their acquisition by GridX mean for our company strategy?

Chris Black: Sure. So InnoWatts is a platform that sells software solutions to utilities that's focused on forecasting—short- and long-term forecasting. Forecasting is one of those really valuable things that has to be done in the planning cycle of utilities. So when they're figuring out what their capacity planning is going to be, what their cost of service planning is going to be, how to make sure that generation is meeting the need in both short-term and long-term, that all fundamentally comes down to forecasting. So that's what InnoWatts is—one of the best companies in the space that does that. And so it was really important for us, especially when you think about combining all of what that planning does to rate design. The rate design really is just the output of the planning cycle. The plans form the inputs and the rate is the output of that, which informs how they can execute on those plans. And so to be earlier in that cycle and be part of that planning cycle with the InnoWatts acquisition is really important and I think a natural extension to the GridX platform.

Brad Langley: And you've mentioned that M&A will continue to be a part of GridX's growth strategy. Why, and what are you building towards?

Chris Black: Yeah, going back to the Uplight story, for me that was a really kind of aha moment of—you can build the best business possible organically and move the needle in an incremental fashion, but M&A really allows you to take big jumps, add additional … The hardest thing in our space, and anybody who sells to utilities, the hardest thing to do is to win a new customer. It's a long sales cycle. So M&A allows you to aggregate more customers on the platform and then have more things to sell those customers and solve more problems for those customers. Utilities are more so than ever under stress from every direction. The ability of keeping up with the load growth is dramatic right now. The expectations of consumers are growing every day. The challenges are growing. And so if you have more capabilities that you can bring to the customers that you already have and that you've been engaged with for a long time, you can solve more of the really critical problems. And so for me, that's what we were trying to build at Uplight was bringing more capabilities together to have more consumers, more utilities on the platform and more capabilities to bring to them. And so I'm really focused on the same thing at GridX, right? We've built a really great organic business. We have happy customers. But I think adding capabilities through M&A can really be this accelerant of quickly bringing additional capabilities for solving things that utilities are struggling with right now.

Brad Langley: Having been through a successful rollup strategy that formed Uplight, which is still succeeding in the market today, any lessons learned that you'll apply to this next effort here at GridX?

Chris Black: Probably two main ones. Culture—focus on people first. And I think we just had this experience with InnoWatts now that we're kind of three weeks into it. Certainly I wouldn't call it done or a success yet, but I think we're doing it right, which is really focusing on the people and the culture, making sure that people feel welcome. They feel like they understand what the broader company is doing and what the industrial logic is of the fit and why they matter to us. Making sure that they have big voices and they're able to celebrate their own success. Giving them the space to mourn a little bit the loss of their own culture that they are a little bit leaving behind as they join the culture of a new company. I think if you get that right, then you get the grace of time. They'll give you the time you need to figure out all the rest of it—what the integrated product strategy is and how the technology is going to come together and those kinds of things.

So I think job number one and lesson number one for me is really focusing on the people and the culture and being really deliberate about that, not thinking that it's going to evolve organically over time, but being really deliberate about the culture that you have and that you want, where you're going and how people come into that. And then the second one is on the technology integration. I want to be really careful about how quickly we're going to integrate the backends of these things because as long as you integrate at the front ends, as long as the data and the capabilities can talk to each other and you can have a blended experience where you're taking maybe capabilities that you've inherited through M&A and expressing them through the UI of the applications that our consumers are using, that's really all that matters.

Whether they have different backends or not really doesn't matter. There are cost implications of keeping 'em separate and therefore you have to plan for that. But I think far more importantly, if you try to shove these things from a true technical integration together too quickly, you can really throw the emergency brake on the business. And that's really hard when you have real customers that have real problems that you're helping solve. They have products that they need from you. They have features that they're waiting on, and if you have to throw the emergency brake on the business while you try and aggregate all the technical backends together, then it puts you in a really difficult place with your customers. And so we underwrote this deal and we'll underwrite the next deals in a way that we know that we're going to have a little bit higher costs, but we're going to do it in a way that allows us to not throw an emergency brake on the business, not have to say no to customers that are wanting things from us and do it much more deliberately and slowly as necessary. So I think those are the two big ones.

Brad Langley: So one of the reasons I really enjoy working with you—and this is our second tour of duty together—is you really understand the power of brand marketing and you fund it, perhaps more importantly. This podcast is an example of that in action. Another one is we actually recently launched a print magazine called PowerShift as a way of telling compelling stories about the innovators and the innovations driving the clean energy transition. Why did you support the seemingly crazy idea to launch a print magazine from GridX?

Chris Black: Yeah, I think especially in our industry, utilities, it's a small world that we operate in. And so I think being part of the fabric of facilitating conversations in our industry is really important, and being able to highlight all the innovative stuff that does happen is really important. And I want to leverage every channel that we have to do that. So a little bit of this is self-serving. I've always said you can build brilliant businesses on the backs of great marketing, right? Because it gets you the eyeballs. Companies with no customers aren't companies. And so marketing gives you the voice. And so I've always believed that being really brilliant at marketing is foundational for the success of the company. And so I want to leverage every channel we have to highlight all these things and be part of the conversation. So it's really just as simple as that.

Some of this helps us being part of the conversation, but really it helps the industry. I want everyone to know just how much cool stuff is happening. It's such a special moment in history right now. Energy has been fairly uninteresting for a hundred years. I mean, it's interesting in all that has to happen to make it happen. It hasn't changed a whole lot in a hundred years. Now everything is happening, everything is changing. Everything on the supply side is changing. Everything on the demand side is changing. It's just a really special moment to be able to facilitate these conversations, and we should do it in every channel we have.

Brad Langley: And despite that change, which is all positive, there's also some disruption in the energy sector right now, particularly around federal policy and renewables. How do you view that landscape and is it keeping you up at night? What's happening?

Chris Black: I don't feel it's good for the world, and therefore I wish it wasn't happening. It does worry me from a societal perspective. It's not keeping me up at night from a business perspective. None of this really affects GridX. In fact, it may create conditions that are good for GridX, right? GridX effectively is the tool that the utilities use to try and solve this demand-supply equation. And so the fewer tools they have on the supply side—where maybe they don't have as many renewables coming on or large wind farms aren't turning on—that puts more pressure on the supply side. And one way of helping solve for the supply side pressure is manipulating the demand side. And so rates are a great balancing mechanism between those two.

Brad Langley: And how about from a utility perspective? How are you seeing these political shifts impact utilities these days?

Chris Black: Utilities have to make 20-year decisions, right? They're a little bit immune to any one administration. That's one major point. Second major point is a lot of what happens in the utility is at the state level, not the federal level. And so I think utilities largely shrug some of this off. I mean, obviously they have to account for things that are happening in their region that are affected by national policy, and you have to account for those into your plans and everything else. But I think utilities are much more resilient than short-term changes like this.

Brad Langley: And looking ahead, if you were to break out your crystal ball, what role do you see customer experience playing in utility transformation?

Chris Black: I've been really encouraged by what we're seeing happen inside the utilities. For a long time, I think utilities looked at their consumers, their customers, as ratepayers, and the only interaction they have is the bill, and that's dead. They realize that they have to be creating experiences for consumers to make all of this more understandable, more education for those consumers, because getting the consumers aligned is good for them and good for the grid and good for the utilities. So I am really, really encouraged by some of the actions we're seeing with a lot of the progressive utilities. We have a lot of examples in our customer base that are ahead of us in some places, and it's really exciting to see.

Brad Langley: So as you know, we call this show With Great Power, which is a nod to the energy industry. It's also a famous Spider-Man quote: "With great power comes great responsibility." So Chris, it's a question I've been wanting to ask you for about five seasons of the show now. What superpower do you bring to the energy transition?

Chris Black: My superpower is finding great people and getting out of the way to let them do great work, right? Look at you, right? I didn't make this podcast. You did. You were the brainchild behind this podcast, and my whole job is to say yes. And so I think that's my superpower, is having the patience of getting out of the way and letting other people do their great work.

Brad Langley: Excellent. Well, thank you, my friend, very much for coming on the show. I really enjoyed our conversation.

Chris Black: Thanks, Brad. Really enjoyed it. Always good to talk to you.

Brad Langley: Chris Black is the Chief Executive Officer at GridX. With Great Power is produced by GridX in partnership with Latitude Studios. Delivering on the clean energy future is complex. GridX exists to simplify the journey. GridX is the enterprise rate platform that modern utilities rely on to usher in our clean energy future. We design and implement emerging rate structures and we increase consumer investment in clean energy, all while managing the complex billing needs of a distributed grid. 

Mary Catherine O'Connor is our producer. Anne Bailey is our senior editor. Stephen Lacey is our executive editor. Sean Marquand composed the original theme song and mixed the show. The GridX production team includes Jenni Barber, Samantha McCabe, and me, Brad Langley. If this show is providing value for you—and we really hope it is—we'd love it if you could help us spread the word. You can rate and review us on Apple and Spotify, or you can share a link with a friend, colleague, or the energy nerd in your life. As always, thank you so much for listening. I'm Brad Langley.