00:28:30 · CJ Gustafson, Kevin Hettrich
[00:28:30] S1: This is so fascinating to me because you have a higher margin business and product per se compared to your partners, but your partners have more margin in absolute dollars, and so it's kind of a trade off between the two. [00:28:45] S0: Yeah. And the way this works is the technology creates the size of the pie. Like, much higher performance batteries make much higher performance vehicles. If if you think about... Just taking the vehicle example, Audis and BMWs and Mercedes, some of the most, like, high end, high performance kinda beautiful luxury cars. I'm not a sophisticated engineer. I know that there are differences between them, but there aren't, like, massive powertrain differences once you're kind of in that tier. And what we're trying to create is a massive powertrain difference where your car goes 20 to 30% more miles range of electric vehicle while you simultaneously cut down charge time by half to two thirds. So my Tesla charges, let's thirty five minutes, 10, 80%. We're trying to cut that down to, like, 12. While you're simultaneously safer, we just did publish a bunch of metrics on safety, and we do equivalent or better on all the different metrics that we tested. And then finally, life, our kind of best performing A sample cells were showing one quarter of the capacity fade that was expected. So it's like that just blows the minds of our engineering counterparts on the automotive side, just envision just like the lift in vehicle performance.
00:29:54 · CJ Gustafson
[00:29:54] S1: I think on the business model point, Kevin, regardless of what business people may be in, I think, like, to take you back to 2024, it sounds like you you had this... I don't know if you'd call it a come to Jesus moment, but you had to decide, like, what business are we in here, and what do we wanna own versus what are we comfortable letting a partner own within this larger ecosystem?
00:30:15 · Kevin Hettrich
[00:30:15] S0: There's two interesting kind of points by your question. So one is we had a data point that Volkswagen was excited to do it, but the question is, are our other partners kind of up for that? And we took some risk in moving to that business model before we had, like, kinda hard proof points from the others. What we since found, other people are also equally excited to do that. So there there was certainly a risk when we moved there. Would would the would the other customers come along? And the second point is, like, what do you keep kinda core, or what... Versus what do you kinda rely on partners? A good question is, what are we uniquely positioned to do combined with some, like, strategic elements? So certainly at the the innovation on the materials as it trans... And with the the modifications of a cell design for anything that's novel that's touching equipment and materials, that's core to us certainly through the pilot line scale. We don't think there's another group or team on the face of the earth that can do that as as well as we can in this chemistry. As soon as you get to a pilot line scale, like, yeah, we have a lot of smart, hardworking kinda scientists, engineers, and technicians, etcetera. But once it's kinda demonstrated on a pipeline scale and it's about doing this at kind of multiple orders of magnitude higher, then you're like, okay. Actually, even though this partner doesn't know the core technology, they're very good the rest of that cost curve. So to use an example here, we started working with the two top ceramics players in the world, being kind of Corning in The United States and Murata in Japan, who expressed interest in doing exactly that. They're like, wow. This technology is fascinating. They're both excited for the end market that kinda gets opened up to them in in participating in making our specialized component. And then how we do the ceramic is different. We believe we do it probably two orders of magnitude faster than conventional ceramics processes. We gave a a name, Cobra. And in fact, one of them didn't believe that it could be done. That's what they get. And what we get is the top ceramic partners who know how to take a technology to scale, to drive down the cost as they move up volume, and who are reliable suppliers to our end customers already. So that's like kind of the best of both worlds.
00:32:21 · Kevin Hettrich, CJ Gustafson
To your question, like, do you put it in that... In kinda one bin or the other? Are we uniquely uniquely positioned to do it, then we should do it, or is there someone else on the planet who's probably better at it? Then it kinda goes goes to to the other side. And there... There's a bit of a strategic overlay, like, around the the protection of intellectual property. We always have to under a licensing business model. We always have to own that core. We wanna keep that for the ability to work across industries and also across the product road map in time. So that's something where we are unflinching. Ad[00:32:53] S1: Remember when pricing was simple? One product, one subscription, one invoice every month. Those days are over. Ad[00:32:59] S0: The
00:32:59 · CJ Gustafson
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00:35:17 · CJ Gustafson, Kevin Hettrich
AdThey've got 5.0 start... Five zero. Wow. Five zero stars on g two. They're backed by a 16 z and Sequoia, heard of them, and CPA led implementations that get you live in forty five days. That is simply unheard of in the ERP space. If your books aren't running as fast as your business, check out Rillet. Book a demo at rillet.com/cj. That is rillet.com/cj. That's me. Is there a point where being asset light becomes we gave away too much? [00:35:42] S0: It can be, and kind of the devil's in the detail. If you think about the first kind of partner or partners who are building those first of a kind type levels of scale, candidly, they should be compensated more. [00:35:56] S1: Yeah. Gotta incentivize them, otherwise they're not gonna get out of bed in the morning. [00:35:59] S0: At any given time, the whole thing has to work. We need to create enough value so that each partner has a very compelling risk adjusted business case, and that can also change over time. I use the example of someone who's early to commercialize. After several years in the marketplace as the differentiation on an individual product node falls, our command of that should fall too. So it's dynamic, and you try to be fair, and ultimately it's tied to what the next person can do. To the extent that it's, like, differentiated and compelling, we're in a strong position to kinda capture value. To the extent that it's proven, all the more so, and then the opposites, of course, are true.