Climb By VSC: Episode 13

Rick Liebling: Gagan is the CEO and co founder of Synop, creators of an end to end fleet and energy management platform that automates EV operations by helping businesses handle tracking, billing, reporting and cost management under one unified data centric platform. Compatible with all EV types and charging stations, their AI powered platform is designed specifically for commercial fleets and OEMs to modernize performance and meet sustainability commitments. Prior to co founding Synop, Gagan witnessed firsthand the challenges businesses transitioning to commercial electronic vehicles face previously at REIN and insure tech startup, he worked with major commercial OEMs and global insurance carriers on solutions for the commercial auto space. During that time, he got a first hand look at the challenges of the commercial EV space and was inspired to develop the software needed to support the industry's transition to using electric power commercial vehicles. I'm proud to welcome to the podcast today. Gogan, CEO and co founder of Synop, how're you doing today?

Gagan Dhillon: Hey, everyone, I'm doing great. Thanks for having me on. I really really appreciate it.

RL: Yeah, absolutely excited to have a conversation with you today. And I thought we'd kick it off just by asking you to share a bit about your background. And what led you to the clean tech space.

GD: Yeah, absolutely. So I'm from Indiana. I was split my childhood between California and Indiana which are two completely different places to grow up in but learned from a very, very early age the importance and impact that we as humans are having on our planet, whether that be through the commissions that we send out to the ozone layer whether that be through our own personal impact of the way that we each personally have a carbon footprint. And you know as always passionate about wanting to build something that would have an impact beyond Myself. Myself and my partner Andrew, who is my co founder here at Synop had spent probably five years before we started this company just tinkering with ideas on how we could, you know, make an impact in the world whether it be trying to build a wildfire sensor for the fires in California. You know, we tried to build tools to help farmers out in California with you know, early detection of fires and, and ultimately we realized that through my experiences that you know, in the world of commercial auto and my previous job, that there was this huge shift to electrification happening before our eyes and we felt like we had the network and we had the opportunity to go build something to accelerate that transition. And that's that's kind of how Snop came to be. Our goal as a company is to minimize the impact the transportation space has on on the carbon in the world. In fact, if everything goes the way we want it to go we would help eliminate co2 emissions entirely from the Commercial Auto space. But that's a that's more of a 10 to 15 year roadmap.

RL: You mentioned you had tried some other things I think like a lot of founders and people in startups, you try one thing, try another thing, you know, successes and failures lead you down certain paths. But what was the fundamental insight that led you into founding Synop as opposed to maybe going in some of those other directions you had tried early on?

GD: Yeah, yeah. I mean, I think, you know, I think I think like it's always funny, you're always put in situations that you don't realize at the time the the impact they can have for you later on. Just before the pandemic. I was working very closely with Volvo group and Volvo trucks in the US helping them roll out this insurance product which was connected vehicle insurance. And so I was going to all these fleet, you know, fleets that operated Volvo vehicles, and I was going to all these dealerships of Volvo. And I realized that everyone at all these places had some sort of like electrification plan. And, you know, just being a car enthusiast myself and knowing the impact Tesla had on the world. I was started to think that if if there's a similar shift in Commercial Auto as there has been in personal to electric, there's, there's a massive opportunity not only for somebody to build a business, but also for somebody to make an impact in this world because I think 23% of all co2 emissions come from the transportation sector, right, to being able to make an impact on that can really change the world for a better and so it was just those conversations and in looking into this industry and realizing that nobody had really nailed that piece yet. I felt like I had a unique advantage and insight into a market. Myself and Andrew were really passionate about wanting to build something. And, you know, the pandemic was was creating an environment in a really weird way, but it was creating an environment for startups to really take off because of the world of remoteness. That was being embraced and you know, the amount of capital that was available. So right time, right place, you know, we feel like we really hit the market at the right time.

RL: Let's let's dig into that a little bit. So explain for us if you can, the fleet landscape and why the electrification of fleet based transport will change many of the dynamics that are ingrained in the transportation sector today. I think you've touched on a little bit, but if we can maybe just kind of dig in a little bit on and be great.

GD: Yeah, I think I think that one of the most fundamental things that happen in the world of fleets, just the very basic definition of a fleet right a fleet is a collection of vehicles that are operated by a single entity, right. So it can be a fleet of buses, it can be a fleet of trucks, it can be a fleet of even mopeds, right, but a fleet is basically a single, it's a batch of vehicles or modes of transportation operated by an entity right and the entire world is run by fleets, right? Like we can think about our own personal fleet to the cars that we own, but you know, everything that we touch as consumers is delivered by a fleet of some kind, and those fleets are operating on four wheels on two wheels by rail, whatever the case may be, and typically fleets operate pretty defined routes, right? You know, where they're operating, they know where they're delivering, where their routes are. And that information can start to help you understand that there's an entire ecosystem built around the world of fleets right fuel cards, diesel gas stations, all these things. Serve to you know, basically power the world of fleet today. And if electrification is going to happen in this space, there has to be another set of tools that are created specifically for the electric vehicles in those fleets right. The most important pieces of that are charging infrastructure and energy and so we felt like there was an opportunity for somebody to build software that tied those two together and made it extremely easy for fleets to use. So that's that was sort of the, you know, the initial initial hypothesis.

RL: Great. So that's a perfect segue. Can you give us an example of how an existing customer of Synop is using the Synop platform and maybe talk to us a little bit about the Snop platform itself, and how that works and how how your customers interface with them?

GD: Sure, absolutely. So so not business software, software based tool that enables fleets to manage charging, connect with the grid and manage their vehicles in one place. Right. Those are the three fundamental basics that all of our customers use us for. The example of that is one of the nation's largest electric school bus fleets uses not to monitor their vehicles or our at any time monitor their state of charge, battery health, and then also any alerts that need to be sent out to drivers. And then they also use an app to manage the chargers that they have installed at their sites, right. So a customer typically is going to have a handful of chargers. It can range anywhere from five to 50, which is our largest deployment that a single site. They're using us to schedule the charging sessions for those chargers. They're using us to manage the cost of energy through using synoptic manage, you know the optimization of which vehicles need to charge first which vehicles need to be dispatched first, up quickly. I want to charge vehicles when the most optimal time from a clean energy perspective is for me to charge. So all of that is sort of being taken into account in the background. And then we're bubbling that information up via a dashboard that our customers have access to, and then giving them the insights to run their commercial fleet. And I think the biggest pain point that these fleet operators are going to have is more and more than becoming electrified is they're going to fleet operators not going to want to learn about the grid, they're not gonna want to learn about they're not going to have time to learn about all the different aspects of charging functionality. They want software to optimize that and run that aspect for them just like a software does that for them on the fuelling side, right.

RL: You mentioned, you know, fleets size bear in terms of Highland, somewhere in the 5 to 50 vehicle range. What is a typical size for our fleet? Is it in that or you know, I'm thinking of like, rental car fleets. Are there hundreds? What does an average customer potentially look like? And what is the overall market size for fleet electrification?

GD: Yes, I mean, the overall market size, to be totally honest with you is you know, there's so many reports out there, there's reports that McKenzie does, there's reports that other entities do that go out and estimate the the total charging management for fleets market size, I think the latest number I saw was, you know, it's expected to grow to $120 billion market by 2028 or 2030. So somewhere in one of those two years, but the typical makeup of fleets, right is if you look at look at where the market is from just a diesel perspective or a fuel traditional fuel perspective. Majority of fleets are large fleets, they're 1000 Plus vehicles, right? You're so you typically have three segments, you're going from one to 200, which is considered small to 2000 into that midsize fleet 1000 plus. That's a large enterprise fleet, right? The way that electrification is happening, it's happening in small increments, the fleets that are committing to electrifying they're usually getting 5 to 10 vehicles delivered. They're going through a testing period, and then they're setting up for scale, right. And we're starting to see that scale across some of our customers who started with two vehicles or five vehicles and have reached 100 vehicles. That's that's the way we think that this market is going to grow for two reasons. Number one, the infrastructure. The upfront costs to get into electrification are still pretty high that even though the US government has gone out, and created incentive programs, the upfront cost is still a little bit high. The supply chain has just been so messed up over the last two years and will continue to be in a little bit of a pain for 23. They just can't get enough assets on the road.

RL: So that's a great look at some of maybe the challenges that those people on that side are facing. What are some of the unique challenges you're facing at this stage of growth with Sonoff? Yeah,

GD: I think every every startup has its own journey where it's never a straight line. We're on month 18 here as a company. I think for us the the big challenge is you want to be you want to be in a position of strength when that scale in this industry happens, right? And for us, it's you don't want to invest too quickly down a path because that market might take a little bit longer to mature but you also don't want to invest too slow, and you know, lose presence in the market. So for us it's a balance of being really really focused on what our customers need. And you know, I spent most of my time is spent talking to our customers or potential customers about where we are, where they are, where we need to get to to help them scale their efforts and what pain points we need to solve for them in I think, you know, the other part of it is, you know, how do we build the best team possible to to enable that to happen, right so you know, those those are where like, some of our challenges are, I think, operationally, we're doing good. I think the industry is still fragmented. And so there's just, you know, there's not a lot of interoperability across the industries for example, there's such a there's such a great workflow of vehicle maintenance that that exists in the feeling world. And there's just no infrastructure for charge or maintenance. Yeah, right. And so there's all these different pieces of, of infrastructure that you have to build and support in order to keep these these fleets up and running every day that you probably wouldn't have to in a space that's more established. I see. You know, one of the things we talked about what Synop is the interoperability and you touch on that a little bit. Can you talk a bit more about that and, and maybe how that is a challenge or how interoperability might be solving some challenges within this space? You know, one of the big value propositions that we want to bring to customers is you can bring any vehicle and any charger on our platform, and we can get it up and running for you in a matter of minutes. Right. And so the the core of that is interoperability, it's being able to support all these different types of charging manufacturers that are being, you know, developed and funded and selling into this market. No one fleet is gonna go, you know, full stack with just a single charging manufacturer, they're gonna have different types of charges for the different use cases that they're operating. And, you know, interoperability and supporting all of that in a single platform is extremely important for these customers. And, and, you know, I think that that until the industry gets there, the scale is going to be hard, right? There's charging manufacturers that sort of want to build a walled garden, they want to control everything, which is a business strategy that they're implementing, but we feel like being able to have interoperability ultimately is the key to unlocking scale for commercial fleets to really take take off.

RL: Right, and talk a little bit about the next wave of EV climate startups and where do you see them coming from or what area you see them moving into what's what's kind of something that you're maybe keeping your eye on as you're looking at the next thing that's going to come along and help this industry?

GD: Yeah, it's a good question and a hard question. I think this industry is still very early. This industry is still at a point where getting the basics right is still a challenge, right? Being able to do charging management, being able to do energy management, being able to manage vehicles that are electric, it's still a very real challenge. And you know, we're working every day to do our part and resolve it. So I think that there's still a lot of room in this space that you're going to see potentially look at, you know, startups that want to get into the grid planning side, right, because there's so much strain that's going to be on the grid from the vehicles that are like being electrified. Fingers, big opportunities in the grid planning side, being able to help facilitate us utilities, you know, manage the load that's going to be on the grid, being able to look at alternative power resources that can be used to supply electricity. I think those are all big opportunities, and things that we're keeping an eye on because you know, it's it's one thing for a fleet to commit to an electrification, plan and get assets but if their local utility can't support that, from a power standpoint, you're sort of behind the eight ball on how quickly you can electrify.

RL: Let's let's dig in on that a little bit. I know V to G, vehicle to grid is something that you read a lot about when you're looking at media in a sector. Can you explain that a little bit and can you talk to how Sanok looks at vehicle to grid and where there might be some opportunities?

GD: I think vehicle to grid at its core is a concept that these these electric vehicles are essentially mobile power plants right there. They're sitting on large battery sizes that can dispatch energy back into the grid that can be used to power a house or any other electric asset right. So taking essentially supplying excess energy into the grid when it might be a time of strain. That's that its core the concept of vehicle to grid now, vehicle to grid is extremely difficult to execute because you need to have the appropriate charging infrastructure vehicles need to have the appropriate firmware that's going to enable them to dispatch energy back into the grid. You also need to be able to have the appropriate signals from a utility to know that they need energy that needs to be dispensed. And on top of all that you've got to keep your own sleeve running to make sure that your vehicles have enough charge, and they don't run out on the road because you're sending energy back to the grid. So all of that creates sort of this really difficult environment to execute and dispense energy back into the grid, you know, from our perspective, and because we have access to charging infrastructure because we have access to vehicles and the way that they're managed, you know, there's opportunities for us to precondition and prepare vehicles for dispatch events through integrations. We have utilities right? This past summer. We were able to do that with Highland and Green Mountain Power out on the northeast. But, you know, for that to really scale. Utilities have to be ready for the infrastructure on their side to be able to take in energy from these mobile power plants, but also that the markets need to be ready for that right there's opportunities for you to be done to potentially monetize the energy sent back to the grid. And you want to make sure that you're playing in the appropriate markets to be able to do that. So that all being said, Is my long way of me saying VTG is still a very early you know, we think that next year, there's going to be a lot more testing in this space. And then for it to reach commercial scale, we're probably looking at the summer of 24 or 25, for big scale to actually start to happen, but the fact that there's testing going on is a very good sign for the industry.

RL: Listen, I was just about to ask you to break out your crystal ball and give me some dates and you beat me to it. So I appreciate that. Thank you. Let's talk a little bit about your relationship with VCs and how that came about and, and are there unique obstacles that founders face when setting out in this climate sector? Are you finding that VCs were more receptive to you or they may not understand the space or do they have reservations about what you were doing in climate tech?

GD: Yeah, look, I think VCs just with anything and everything related to what you do like you have to talk to the right people who have the appropriate context, right. So myself and Andrew didn't have big networks in Silicon Valley. When we started this company, all the climate tech money was sitting in Silicon Valley. And I spent three or four months just cold emailing VCs hoping they would get back to me and you know, like, just hear a pitch of what we were doing. We felt like the idea was really good, but we knew we had to get in front of the right people. And so for us, right it was I stopped emailing like generally funds and started to really target folks that I knew were making investments in climate or had a big climate thesis. And I really showed you know, and really changed the momentum of the round of our initial Pre-Seed round that we did last fall. You know, Wireframe ventures was one of the first ones to respond to me being a cold even out I think it's the only investment they've done via cold email. So that was a cool that was a cool story. But Wireframe had been investing in this space. They understood the impact of the business that we wanted to build. And there was alignment there. And then when it came time for a Seed round, I knew I wasn't gonna go talk to generalist funds. I wanted to talk to investors that had invested in companies in climate or in climate fleet, that I knew what helped me take this business to the next level. Right. And so at the top of that list was obvious ventures, Andrew Beebe and you know, I think sometimes as a founder you just get lucky and timing timing really works out for you. And you know, we were starting to see the right momentum. We were starting to see the right business be built and, you know, Andrew Beebe and the team that obviously supported us with that with a Seed round for that and I'm super, super glad to be able to work with them. And I think that, that that's been the big learning for me right as, as a founder who's just starting out, talk to the people that have a relevant experience in the space that you're trying to build it. I think that's the most impactful thing you can do for your ground because then you're not going through an educational process every time we're not having to, you know, fight uphill to educate an investor on the importance of what you're doing in climate. They already understand it, and they're looking to make bets in it.

RL: You mentioned at the top of our conversation here that you're based in Indiana, and I would imagine that there are people who are thinking about having a startup but they're in Oklahoma, or they're in South Carolina, and they think and they're thinking you know what, how will we ever get funding? Was it difficult Do you feel was more difficult for you? Where you are geographically or was it maybe they saw you as an outsider and that was intriguing. Tell me a little bit about that and how being there in Indiana, you know, makes up part of your your journey?

GD: Sure. I don't think anybody if anybody thought of me as like a quirky outsider, they never said it to me. So I don't know if that was, you know, if that was part of their bet. I look, I grew up in the Bay Area, right, another Bay Area. Obviously, you know, the Bay Area has been great for capital. It's my goal at some point to potentially be back in California, just you know, for personal reasons. It's a great place to live. But I also think you can build a business anywhere these days. Right. And when we first got started, it wasn't it wasn't that big of a barrier. Like I did think that it was going to be a barrier. But I was surprised to see it wasn't a big barrier. You know, we've raised north of $10 million, and then I'm sitting in Indiana did my first round without ever leaving Indiana, but I think I don't think geography should be a barrier for anybody. You know, you can the world is so large now because of the internet because of the way you can travel. You can get anywhere you want to get to whether it be a customer and investor within a day, right or within a few hours. I would not let being anywhere that's outside of a major startup area, you know, discourage you from starting a business. Now, I do think you need to be somewhere where you can recruit talent. You know, we have our company is technically headquartered in New York. We've got a team of nine people there. We've got a team in Raleigh that we're starting to build. I will eventually end up in one of those places as well because as more and more of the world opens up out of the pandemic, we all want to be more and more closely tied in together. But the original geography should not matter.

RL: Interesting. You gave some good advice a little while ago about you know, for perhaps another young startup founder in terms of how to find VCs and be thinking about that. If you could go back or if you could look back now and give yourself advice. You know, maybe the you from five years ago, what advice would you give that guy again?

GD: So I got I mean, I think the biggest thing I would give any founder or even myself five years ago advice on is the markets that you want to go build stuff in, even if they look like they are just dominated by players or there's no room for somebody to build in. There's always room for you to build something in if you pay attention very closely to what customers want, right? I think that that's something that I never, I wish I realized that sooner. There might have been opportunities I could have done a lot sooner. I mean, I can tell you, for example, like an EV charging we didn't go build something that reinvented the wheel. Yes, we've built a better version of what was out there and we built a better version of how customers can use it. But there were companies doing EV charging there's companies that are public multibillion dollar corporations doing EV charging right. But we got very close to a small subset of customers, realized that the pain points they had can be scaled across the industry and realized that the incumbents were too slow to move and focus on those pain points as more and more of this fleet world became electrified. So I think that's the big thing, no industry, no matter how large an incumbent seems to be or no matter how much you think competition exists in there. If you're passionate about something and you feel like you have a pain point, you can solve for customers. Go do it. You can build a business doing it.

RL: That's great. That's super inspiring. I'm getting close to wrapping it up here. I want to end and ask you, you know as we head into 2023, what are you most optimistic about when it comes to climate tech and innovation happening in the space maybe in general or even specifically to the EV area that your market that you're in?

GD: Yeah, I mean, I think I'm very optimistic about what has happened in climate tech. And the narrative around climate Tech has changed over the last three or four years. I think. I think that there's a big shift of traditional engineering or, you know, sort of business minded folks who were at a failing business, for example in the past and want to get into climate tech. They want to be able to solve these problems. We see that from a recruiting standpoint. You know, we were starting to see real investments being made in this space, not only from private, but also public entities, right. Obviously, the inflationary Reduction Act had such an impact on what electrification is going to be in the US and for the years to come. And I think that's something we should all be optimistic about, as we all recognize, that this is a real problem. There are real problems to be solved. And you can build real businesses solving those problems. I don't think that that narrative was there five years ago, right? I think that that that's something that we can all really, really be excited about.

RL: Great, well listen, this is a really interesting conversation. I think, you know, we talked aboutb the size of the potential market in evey charging, when you look at things like interoperability, which is really something you're focusing on and and when you talk about that idea of of and this is something you hear across, almost as an epiphany across all sorts of founders. We started listening to our customers, right? When you do that, that seems to be you know, the key that unlocks something really great. So I appreciate you sharing these insights with us and having this conversation. Gagan, CEO and Co founder of Synop, thanks very much for your time today.

GD: Yeah, thank you again for having me. And thank you, everybody listening, appreciate it.