Gene Berdichevsky is the CEO of Sila Nanotechnologies Inc. which is a chemicals and materials company making next-generation Li-ion battery materials. The company has raised $295 million from investors such as Bessemer Venture Partners, Matrix Partners, Sutter Hill Ventures, Next47, and 8VC. Prior to Sila, Gene was also employee number 7 at Tesla.
In this episode you will learn:
- The essential ingredients for raising money
- Gene’s top piece of advice for his younger self and new founders
- How to grow as a leader when your team is growing at 92% in two years
- His approach to solving strategic problems
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
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Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Gene Berdichevsky:
Gene Berdichevsky is the Co-Founder & CEO of Sila Nanotechnologies. Prior to co-founding Sila, Gene was the seventh employee at Tesla Motors where he served as Principal Engineer on the Roadster battery, leading the development of the world’s first, safe, mass-produced, automotive lithium-ion battery system.
Gene holds two degrees from Stanford University; an MS in Engineering with a focus on energy and materials, and a BS in Mechanical Engineering. He has co-authored 42 patents and 4 academic publications. Gene has been named to the Forbes 30 under 30 list, the MIT Technology Review 35 Under 35, and was a recipient of the Paul and Daisy Soros Fellowship for New Americans.
Connect with Gene Berdichevsky:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone and welcome to the DealMakers show. Today on the show, we’re going to have someone that I think we’re going to be learning quite a bit about batteries. He was one of the early employees at Tesla, and now he’s building a unicorn startup. Without further ado, I’d like to welcome him on the show. Gene Berdichevsky, welcome today.
Gene Berdichevsky: Yeah. Thanks for having me, Alejandro.
Alejandro: So, Gene, originally from the Ukraine. You were born in the Ukraine, and then you were raised in Russia. How were those years growing up?
Gene Berdichevsky: Yeah. They were great. I bounced around a little bit. Ukraine, on the Black Sea, and then spent actually five years of my life north of the Arctic Circle in Murmansk, and a few more years in St. Petersburg. Then when I was nine, my family came to the States. It was a great time when I was a kid there.
Alejandro: Where in the states did you guys relocate?
Gene Berdichevsky: We landed in Richmond, Virginia. I lived there through high school. Then I came out to Stanford for my undergrad studies.
Alejandro: Got it. Richmond is quite beautiful. Was this like your parents were teaching, or what would you say drove the move?
Gene Berdichevsky: Yeah. My dad’s also an entrepreneur. He had some small businesses that he built there. They both became software engineers. Back in Russia, they were nuclear submarine engineers. Then when they came here, they both became software engineers. He had a beautiful place in Richmond, and I grew up in a little suburb there, much like many suburbs around the country.
Alejandro: So, engineering. At what point did you start developing this love for solving problems?
Gene Berdichevsky: It’s funny. When I went to Stanford, I think the one thing my parents really wanted me to do was be a software engineer. So, the one thing I knew I definitely wasn’t going to do was be a software engineer. But I did enjoy math and science a lot. I really looked around and thought, “What is the broadest kind of engineering I could do, and mechanical engineering seemed to be it. I didn’t know exactly what I wanted to do afterward. Also, within my first year there, I stumbled on this solar car project where students would build a solar-powered car and race it across the country. I joined that team. In my freshman and sophomore years, we built a car, and we raced 2,300 miles from Chicago to LA powered by the same power that a toaster would have, about 1500 watts. We ran it on freeways. I fell in love with energy and problem-solving and building. We built a carbon-fiber body. We built the chassis from scratch. One of our friends was the driver, so we really built something from the ground up that we were willing to put one of our friends in to drive.
Alejandro: Okay. Wow. That seems quite a risk. Let me ask you this, Gene. I see that you did mechanical and energy engineering. What is the difference between one and the other?
Gene Berdichevsky: For my undergrad, I did mechanical engineering. When I went back to do my Master’s, at that point, I knew what topics I wanted to work on, which were all-around energy. Stanford lets you get a Master’s in engineering without necessarily a specific type of engineering. I put together my own curriculum to look at materials, and semiconductor physics, and quantum mechanics, and solar, and all the aspects that are related to the broader energy technologies and studied that. I made up my own curriculum.
Alejandro: You know what? One thing that is very interesting about Stanford and about education as a whole is that now you can find any content. If you want to learn, you can just go online and learn it, but there is one reason why you go to one of those places is because of the network, and what you’re able to see, and get contagious perhaps with it. I’ve seen that some of the best entrepreneurs are actually coming from Stanford. So, what makes Stanford so magical?
Gene Berdichevsky: Yeah. I think you bump into people while you’re there. That’s really powerful. Many of those people work with me here at Sila today, so those relationships are incredibly powerful. You also just get to learn from one another. You’re not just learning from the educators. Well, you’re right. You can get a lot of coursework online, but you’re also learning from one another. For me, I worked at another startup while I was in school. So, I was in school fulltime, working fulltime. You can do quite a lot, and that network is very, very powerful for sure. Some people also learn differently. I enjoyed the more structured environment. It was helpful, but I think a lot of it is definitely learning from your peers.
Alejandro: Yeah, I agree with that. So, between the mechanical engineering and your Master’s in energy engineering, as you were pointing to, you were one of the first employees in this little company at the time called Tesla. You were the seventh employee. Is that right?
Gene Berdichevsky: Yeah. As I mentioned, I built solar cars as an undergrad, and I fell in love with energy. I worked on the batteries and that. At the end of my junior year, the end of my third year at Stanford, one of the alums from the solar car project was looking for some engineers to join a little electric car company that no one had ever heard of at the time. I basically went and begged my way into a job there. Dropped out of some of my undergrad, and was able to join saying, “Look. I know what an electric car looks like. I built one as an undergrad. I’ve done some battery work before. I can help you guys figure this out.” I did that for about four years. I ended up leading the battery system architectural development in the early days; I was the tech lead for that system. It was an incredible experience seeing the birth of this car company.
Alejandro: Very cool. I believe that you were critical for solving one of the early challenges. What was that challenge?
Gene Berdichevsky: We had a lot of early challenges. We started with literally supergluing laptop batteries together to make the battery pack. There was a lot to be built between that and what is the most sophisticated battery system today. But one of the really big issues was, you needed to make sure that the cells were safe. Safety was, of course, the biggest concern. We had to develop a system where even if a random failure of a battery caused it to spontaneously go into run-away, that it would not propagate to any neighboring cells or the rest of the pack. That was one of the biggest technical challenges. You can have manufacturing defects that happen in batteries quite randomly. It can be 1/billion, but you can’t have that catch the whole pack on fire. That was a big challenge we solved. We also solved big challenges around how to interconnect. We were using almost 10,000 batteries for the pack, so how do you interconnect all of that reliably and robustly. There were plenty of challenges. It was a lot of fun.
Alejandro: What kind of growth did you see the company experience for those four years that you were there from being employee seven to when you were leaving four years after?
Gene Berdichevsky: Yeah. There were a couple of people that started the same day I did. We went from about 10 folks when I showed up to about 300 folks when I left. So, about a 30x growth. There was an incredible amount of positive lessons to learn there that we have applied here at Sila building a company that has a culture of self-reliance and the willingness to design and build whatever it takes to get the job done and solve the problem yourselves.
Alejandro: Got it. Was Elon Musk there at the time. I know he was one of the early investors there, and then he became the actual leader of the company. Were you able to see him around?
Gene Berdichevsky: He was around a little bit. At that time, like you said, he was an investor. He backed almost the entire Series A. From an investment standpoint, he was really the only person that believed this wasn’t a terrible idea. All of Sand Hill rejected the company. He was a board member at the time that I was there. He was becoming more present right around when I was leaving. So, we interacted a little bit. Primarily, the company and that first 100 people were recruited, and that company structure and culture was built out by Martin Eberhard and other folks like J. B. Straubel who is still there. The leadership at the management level were other folks at that time.
Alejandro: From the exposure that you had with someone like Elon Musk that people are really labeling him as one of the best entrepreneurs over an era. It’s pretty interesting here. I would love to hear your views, and perhaps if there are any learnings that you got from someone like him.
Gene Berdichevsky: Yeah. I think it’s really embodied in the company, how he thinks about it, but also how Martin thought about it, how JB thought about it is, you want to go after really big problems. I think what I’ve learned is it’s sometimes easier to solve a really big problem. I don’t know if it’s technically easier, but organizationally it’s easier to solve a really big problem than a mediocre problem. You attract incredible talent, so the mission was so audacious and so ambitious that the best people in the world wanted to work on it. You’re able to also stand alone. There aren’t a lot of people that are trying to do the kinds of things that Elon’s trying to do. So, going after big problems is both incredibly rewarding, attracts the best people, and reduces competition. I think that’s a lesson that a lot of entrepreneurs can learn is make sure you’re solving something that’s really, really big and worth solving.
Alejandro: That’s a good one from a leader like Elon and what you guys were doing at Tesla. From your four years of experience, being able to see a company grow so quickly, and you’re probably looking now like, “I can’t believe it is where it is today.” From your experience from these four years, what would be your main takeaway from your experience with Tesla?
Gene Berdichevsky: I think the thing we just talked about, make sure you’re going big. But then the other piece, maybe more tactical piece is when you’re doing things no one else in the world has done or the world doesn’t think are possible or good ideas, which was the case for Tesla at the time, you really need to build a culture that is incredibly self-reliant. What I mean by that is, you’re willing to do a lot of things inhouse, and you’re willing to do a lot of things yourselves. There were other electric car companies at the time that also raised a lot of money, but they relied on outside vendors to innovate for them. They relied on outside vendors for motors, controllers, and battery systems. Ultimately, that failed. I think when you’re doing something new to the world, you have to be willing to do it yourself. If you’re not, it’s not going to work. So, you have to be able to build it yourself. That doesn’t mean you always build it yourself, but you have to be able to, and that’s something that we’ve taken to heart here at Sila as well as probably one of the biggest lessons I took away from my time at Tesla.
Alejandro: Got it, and we’ll talk about Sila in just a minute. Why did you decide to leave Tesla?
Gene Berdichevsky: You know, interestingly, from the day I walked in, my brain was already fixed on “How do I start my own company? How do I build something like this?” Funny story: in my junior year at Stanford, I actually wrote a business plan that was for making electric cars for the U.S. market. I kind of knew the idea behind Tesla even before I had ever heard of it. So, part of me was like, “Huh. How do I get to build something like this myself?” So, I was learning the whole time I was there. The key is to absorb and learn. Four years in, we had launched the Roadster, and after launching the Roadster, we had accomplished a mission that we were after. There was another one on the horizon, the Model S, and I really needed to decide whether I wanted to dedicate the next five years of my life to that next mission or to go try to take what I’d learned and go try to build the next Tesla if you will. So, I opted for the later of going down the path of trying to build my own.
Alejandro: Then you went to Stanford, which is what we were pointing to. Then after that, you joined Sutter Hill Ventures as the Entrepreneur in Residence. What does an Entrepreneur in Residence do?
Gene Berdichevsky: It’s a very odd title that means a lot of things at a lot of places, but I’ll give you a description of my experience. Actually, one thing I had done is save every penny I could in order to have a year of free time to think about the right business to start or work on starting the right business. The story of someone thinking about building a company in the nights and weekends while working a fulltime job is a little bit of a myth. It actually takes a lot of work and time to plan to start a business that can be successful. So, somehow, I got the notion that you need a time to do that. So, I saved a lot of money to have a year to start something, and I was very fortunate that I met a venture capitalist to partner with Sutter Hill. I told them my plan. I was going to spend a year, look for ideas, and then get going on an energy-related business. He said, “Why don’t you come here, and we’ll even pay you a nominal amount, and hang out, and learn, and try to start a company. If it’s a company that we’re interested in investing, you’ll give us a chance to invest. So, I signed up for that. That was a pretty good deal as far as I was concerned. I went around the world, and met people from all over who had different technical ideas, and tried to evaluate whether they would make good business sense and whether they would have good impact on this energy space. About a year in, I met one of my co-founders, Professor Gleb Yushin at Georgia Tech. He had technology that made a lot of sense to form a business around. So, we partnered up and recruited our third co-founder and got going. It was really a year of learning how to apply that venture capital lens and what makes for a good VC investment to energy because at that time if you remember, a huge amount of energy-related companies had just failed. There are quite a lot of companies that raised a billion dollars-plus, and ended up in zero, so the investment community was generally pretty scared. I wanted to understand why those were such bad bets because it was clear they were bad bets. I think I got a sense of that and was able to start something that has been very investable by the venture community.
Alejandro: So, you were pointing to the Venture Capital Lens. What does the Venture Capital Lens look like and how is that lens used to identify certain patterns on companies that are a potential success?
Gene Berdichevsky: I think one key thing to recognize is that it’s different for different venture capitalists. What you want to do is understand who the right financiers for your business are because different folks apply different lens. There are multiple, multiple, very successful, very valid lenses. I’ll speak to the one that I understand the best, which is the one that I’d say is practiced at Sutter Hill and companies like Matrix who were also investors from the beginning, and Bessemer. I think that lens looks like you find a great market, and a great market has to be defined by – to make it really simple, it’s if you build a very strong product, then you’ll have good straightforward access to distribution to the product and get paid for the value your product creates. So, you don’t want to be in a position where someone else is capturing the value for something great you’re doing, and you don’t want to be in position where it’s really, really hard to sell your product. Then from there, you find an incredibly talented team, and I was able to do so with my co-founders that are the best equipped to solving some very, very technical problem that unlocks the key to this great product. So, it’s all about finding a product idea that the limitation is some incredible hard technical problem. Again, the next thing about really, really hard technical problems is there are usually very few people in the world that solve it at any one time. So, you get a huge advantage. If you’re in a good market position, you have fast access to the distribution and fast access to sales, or a very good walk-in if you’re the first. So, that’s the lens that I was looking at across energy because you can use that lens on a lot of different things, but I wanted to work on energy, and ultimately, that’s how we came to start this company.
Alejandro: Obviously, during this process while you were Entrepreneur in Residence at Sutter Hill Ventures, as you were pointing to, you knew that you were going to launch your own thing. So, you were already incubating the idea for Sila Nanotechnologies for some time. Eventually, you came across the second co-founder. I want to understand what was that process for the two of you to understand that there was a match? Then, what made you believe that there was a need to recruit a third co-founder, and how did you do this?
Gene Berdichevsky: To be very honest, I wasn’t actually incubating the idea for Sila so much as I knew I wanted to start a business, and I had this lens. So, I was really looking at very different things. Everything from electric power trains for cars to autonomous or semi-autonomous driving and all kinds of really interesting things back in 2011. When I met Gleb, who’s the professor at Georgia Tech that is one of my co-founders and our CTO, first of all, I think the personal interactions really matter a lot, so we just hit it off very easily. He happens to also be a Russian immigrant, so there was some connection just on a human level we’ve gone through some of the same experiences in life. What I saw was a technology that was still pretty raw in an academic setting with good intellectual property and an individual who also really wanted to build a business. So, some professors would much prefer to cast their patents out into the world and go back to a life of academia. What I saw with Gleb is a desire to make an impact with his work and a willingness to really contribute to that. So, he’s still very engaged with the company and has a partial appointment at Georgia Tech. He continues to be a professor there. That was really important for me. Then as we started to look at how we would build this business, there’s a very tactical thing we had to decide of where to put the company. At the time, Gleb was still relatively new to Georgia Tech, so he hadn’t quite gotten his tenure, so he couldn’t spend a lot of time in California. So, we made the decision that I would move to Atlanta, where he was based, and we would start the company there. Then move it back to California when we’d raised our Series B, which is exactly what happened. As far as the decision to recruit a third, I think one of the challenges is, and maybe one of the things I’ve thought about that your listeners might find interesting is, there is a lot of technology that is far and beyond Silicon Valley locked up, which may be too strong a word, but locked up in academia in universities around the country, but there’s not a lot of entrepreneurial talent in those places that just haven’t formed the kind of culture that Silicon Valley has. I really wanted to make sure we brought enough entrepreneurship to Atlanta to be able to attract the kind of engineers we wanted to attract. So, Alex, who I had worked with at Tesla is our third co-founder, is also one of the best engineers I have ever worked with. We called them up and said, “Do you want to do this? Do you want to move to Atlanta?” He went along. Then he and I were able to recruit a bunch of other incredibly talented engineers to do the same.
Alejandro: Got it. What was the process of bringing Sila Nanotechnologies to life? What was that process like?
Gene Berdichevsky: Slow. From the time that we met, and the professors, maybe springtime, and I think we financed the company in September, so maybe four or five months. One of the big things we had to do was license the technology from Georgia Tech. Licensing negotiations can often be long. It was actually a pretty good one. It went fairly fast. Sometimes, those things can take 12 months, but it took maybe three months. Then we also went out and found a co-lead for our Series A, so Sutter Hill was willing to fund half of our Series A. Then Matrix Partners co-led. They’ve been a fantastic partner along the way as well. Both those firms have continued to invest in every round of financing that we’ve done. We went out and did our pitch tour and found great partners. Then we just started with a 1,000 sq. ft. lab in a basement at Georgia Tech and went from there.
Alejandro: So, when you had the idea, you guys actually went out, and you just went at it right away to raise the money? Is that how you did it?
Gene Berdichevsky: Yeah, because for us, Gleb had a half dozen patents already at Georgia Tech owned, and we took a license too. He had four or five years of technical development in his labs. We were able to use that technical data as well as the market story and our team story to raise that 5 million dollars Series A. Essentially, you could think of he had been incubating it for four years by that point, the technology. We knew exactly the kind of business we wanted to build. We knew we wanted to build a materials business with a technology that would be fully compatible with existing with RM battery manufacturing. Our product is a new chemistry that drops into those factories. Because we knew the market, I knew the market quite well from my Tesla days. We knew how these kinds of materials are manufactured. We didn’t know how to make the type of thing we’re making today. We had a technology base, and we went from there.
Alejandro: Being so early, what would you say was the expectation that was met from the investors for them to click and say, “We’re going to make the investment?
Gene Berdichevsky: I think a couple of pieces. One is you need proprietary technology. We had the license from Georgia Tech on six patents and Gleb’s ideas. Those are things that no one else in the world had access to. The business positioning was critical. A lot of people have lost a lot of money investing in batteries. We were very clear from day one, “We are not building a battery company. We’re building a technology company that makes materials for batteries.” That positioning was really important because batteries themselves are fairly low-margin, hard to compete in business, but the materials that go into them actually have a very healthy market and are performance-differentiated. The better your product, the higher the sales price can be. We had technology that allowed our product to become the best in the world. That was proprietary to us, and we had a team that investors looked at and said, “Yeah. These are the right kinds of people to go solve this incredibly hard technical problem of a breakthrough, battery chemistry. I think the specifics of the technology of all this as we went on and on, and I think even early investors understood and knew that was going to happen. So, they were really looking for market and the kind of team you have to attack that market and positioning within that market.
Alejandro: Then what ended up being the business model, so that the listeners get it?
Gene Berdichevsky: Yeah. We’ve never pivoted away from that. The business model is to invent, develop, manufacture, and then sell this material, which is a powder. Our product is a powder that replaces graphite powder in existing lithium-ion batteries. I’ll maybe just spend 30 seconds here to give basics about the lithium-ion battery you have in your phone or that you’re listening to this on or laptop. It has two main components. It has an anode which stores lithium when the battery is charged and a cathode that stores lithium when the battery is discharged. The more efficiently you can store the lithium, meaning the less material you need in the smaller volume it takes to store lithium, the more energy you can store in a given volume in weight. So, what we do is, the anode material in today’s lithium-ion battery is all graphite. Our’s is a silicon-based material that we synthesize using proprietary processes. We take out the graphite anode, and you replace it with ours. Ours takes a lot less volume and a lot less weight; about half the volume, a quarter of the weight of that one component. By doing that, the whole battery is able to store about 20% more energy in the same volume or for the same weight. The other components are sort of holding back our technology a little bit, but the industry has been improving 1-2% per year, and we’re able to make this 20% leap with our material. So, as a business, we are going to be building ever-larger factories to produce this material, this silicon-based anode product. We’ll be shipping it to battery manufacturers. One important thing about our business is we don’t just sell to the battery manufacturers. We actually go beyond the battery manufactures, and we think about who’s the user of that battery. Who’s buying the battery? Our latest round of financing was led by Daimler. Essentially, the idea is that we’re able to form a partnership with the car company or the consumer device company that will use our technology that will have access to our technology first to make their products better. They’ll have access to batteries with our materials before anyone else. So, they’ll have vehicles that can go 20% longer distance than anyone else’s first.
Alejandro: Got it. Obviously, for an operation of this nature, just like you were pointing to, you guys went and raised money early on. It seems, obviously, capital-intensive. How much capital have you guys raised in total?
Gene Berdichevsky: Yeah. It’s a very capital-intensive business. We’ve raised about 295 million so far; 170 of that coming just a few months ago. The interesting thing is it’s a lot less capital-intensive than the battery industry itself. So, it takes us dramatically less capital to build the plant to make our material. That’s really the key. The scale of this technology, every electric vehicle will use about 15 to 20 kilos of this material. If you think forward two decades and every new car is electric, about 100 million cars per year, you’re really talking about 20 kilos per car. You’re talking about 2 billion kilos of this entirely new-to-the-world material that has to be produced. The scale is also very, very large.
Alejandro: Absolutely. I believe the evaluation of the amount that you guys have raised, that has been confirmed as well by the company?
Gene Berdichevsky: Yeah, that’s right. We’ve confirmed it’s over a billion dollars.
Alejandro: Wow. Did you ever know when you decided that you were going to build a company one day that it was going to be a billion-dollar-class company?
Gene Berdichevsky: You know, I think every entrepreneur always carries two diametrically opposed views in their mind. One is that “Of course, I knew. Of course, this was always the plan. I knew this is exactly how it was going to go.” At the same time, every single day, you’re paranoid about all the ways that this is all not going to work. I think I’d be lying if I said I knew this was how it was going to go, but there’s always a part of me that this is still just the beginning. This is still the first step. This is the first inning of the electric vehicle revolution that’s going to happen over the next couple of decades. We’re still a very, very young company in the grand scheme of things. Yet at the same time, you can think of all the ways it could not work.
Alejandro: And great investors, too: Bessemer, Matrix, Sutter Hill Ventures, 8VC. So, great people. One thing that you were pointing to here that I thought was really interesting is, in the journey of being an entrepreneur there is no such thing as a straight line. You were kind of eluding to this. There are a lot of moments where you have to endure the ups and downs of the journey. In this journey, since you guys started the business back in 2011, what would you say perhaps from a professional and personal perspective has been maybe like a breakdown moment that really served to an incredible breakthrough?
Gene Berdichevsky: Hum. When you say breakdown moment, meaning –
Alejandro: Maybe there’s like a moment that was in this journey like a little bit tougher or more challenging that maybe opened up something that was really magical.
Gene Berdichevsky: Yeah. You know, actually very early on, the fundamentals of what we’re trying to achieve. We started out to solve a science problem. All the physics and chemistry theory in the world basically says, “This should be possible.” But there’s no guarantee from an engineering perspective that the world has the tools, the ideas, the concepts to make this kind of Silicon material work. So, when we’re getting started, very early on, I went through a realization that this was fundamentally an expensive science project, and it could well have not worked. So, grappling with that, that we can work as hard as we want. Physics and chemistry may be against us. Not the market. Not things that we can control, but just physics and chemistry. That was a tough emotional realization that our success wasn’t entirely in our control. The thing that came out of that, the way I sort of solved that in my head was to say, “What we should do, and the way we should judge our success is how we build the company, the culture we have, the kind of team we have, and whether people come here and believe they’ve done some of the best work of their lives while they’ve been here. If that’s the case, as they say, the score will take care of itself.” I think that led us to instill a very different kind of culture that is driven by being incredibly rigorous and diligent in the process of discovery and achievement, and not so much just on you can’t do science on a schedule all the time. Most of the time, you can’t do science on a schedule, especially at that discovery phase. So, we built a very different kind of culture that I’m very proud of, and it came out of that very dark realization that this could all fail for no reason of our control.
Alejandro: Culture is supercritical. Culture starts with the founders, and then it just takes a life of its own. So, in terms of culture, what has been your biggest takeaways so far with Sila?
Gene Berdichevsky: It is set by the early team. I think I learned a lot of that at my experience at Tesla as well. The early team there is an absolutely incredible collection of people, and you can see what they’ve achieved and overcome. The same thing is true here. So, we were very careful of how we chose the early team, and continue to be very careful. It’s still the very early team. Then what you really have to do is ask not what do I think the culture should be, but who have you hired and what are their values? We went through a process of iterating on that and discovered what our team believed our culture was is going to be your culture, and so what we have is a team that is full of craftsmen, people who just want perfection in their work and incredibly diligent. We have a team of people who just want to keep learning and discovering new things. Then the last bit that is really important for me has been that we have a team that’s intellectually honest. That means facing the facts of your own failures first, coming to grips with it, and fixing it when that’s happened. You don’t control it as much as you think. You only really control it by the kinds of folks you’re able to recruit, and we’ve been very fortunate in that.
Alejandro: Got it. Talking about people and employees, what kind of picture can you give us, especially for the listeners, so that they get an understanding of how big Sila Nanotechnologies is today?
Gene Berdichevsky: We’re about 130 people today. We’re growing and have been growing 40-50% every year for five years and don’t see that slowing down for anytime soon. We are a manufacturing organization, which we built that over the last couple of years. We run operations 24/7. We also are a science discovery company, so we have an incredible variety of technical folks from chemists, physicists, material scientists, chemical engineers, mechanical engineers. Just everything. It’s a very, very broad, very diverse skill set that we have, and we’re just getting started.
Alejandro: Really cool. I was actually taking a look now at LinkedIn, and it says that the two-year growth in terms of employees is like at about 92%. The question that comes mind now is, as a leader yourself, Gene, you also need to grow by 92%. You need to grow in parallel. How have you done that yourself?
Gene Berdichevsky: Probably the key thing that I struggled with when I was an engineer at Tesla, and I struggled with as a CEO here is that you have to give up parts of your job as the organization grows. You narrow the scope of your role, but it becomes so much more important and carries so much more weight. Just to give a very concrete example, when we got to Series A, I would run experiments in the lab. I would run the tools at night sometimes. I would be right in there and had to give that up. As the company continues to grow, you have to give up more and more things that you might love doing and focus on the things that the organization really needs you to be great at. That’s top to bottom, so it’s true. Early engineers that maybe owned an entire system and now have to be part of a team of five people that owns a much bigger system. I think that’s been my biggest challenge and also opportunity for growth. Then you have to get really good at the one or two things that you’re responsible for. For me, that’s a lot around setting the vision and setting the goals that we go after the strategy, and of course, ensuring that we can fundraise and win the trust of the customers.
Alejandro: That’s really interesting. Talking about strategy and to follow-up on that, and then given your background, too, as an engineer, which is all about problem-solving, how do you go about solving strategic problems? What does the process look like?
Gene Berdichevsky: You have to have a combination of enough people to get different perspectives around the table and some level of decisiveness where you’re not going to have perfect information. So, you have to decide and go at the end. For us, we try to take a big tenth approach on getting ideas around, for example, we’re deep in considerations of what size factory we’ll build next, where to build it, how to approach that. There’s a ton of different perspectives on how to get to that decision. As a leader and a leadership team, you need to listen to those perspectives and consider them, but you also need to not expect the answer to just pop out. At some point, you have to be decisive and go a direction. I think you can say you’re going to be moving faster as long as you’re moving forward. At some point, the objective becomes really clear when you’re moving towards it. So, you have to pick an objective at the end of the day and go for it because you’re not going to ever get the perfect information.
Alejandro: Got it. What I want to ask you here is, in a world where the vision of Sila Nanotechnologies has been fully realized, what does that look like?
Gene Berdichevsky: We’re all driving fully electric cars. That’s really the biggest part. At that point, as cars will pull battery technology forward, we can also use that same battery technology, our battery technology to make the grid fully renewable; solar wind and storage fundamentally. The last bit is it turns out the kinds of technologies we work on that make batteries lighter are also really important to making this vision of air taxis viable. So, you might not only be driving on land in an electric car, but you might be flying in an electric plane as well.
Alejandro: Wow. So, do you think we’re very far away from electric planes?
Gene Berdichevsky: So, no, but that’s still a half-decade or so before regularly using them. On the scale of what it is, it’s right around the corner.
Alejandro: Got it. How have you seen, for example, the growth of electric cars? What’s your take on that?
Gene Berdichevsky: Yeah. One could say we had good timing, but I think a lot of it was just the belief that this is how it was going to end up. From 2011 when we started the company, I think there were less than 100,000 electric cars; maybe less than 10,000 electric cars sold. We’ve seen over 50% year-over-year growth globally. Last year over 2 million cars were sold that were plugins. That 50% year-over-year growth hasn’t slowed down. I think as a society we’re now all of the sudden recognizing that electric cars are here because they’re crossing some kind of psychological threshold or we’re noticing them all the time. But the reality is they’ve been growing 50% year-over-year. If we can help it, they’re not going to stop.
Alejandro: Wow. Very cool. One thing that I want to ask you here, Gene, is a question that I typically ask the founders that come on the show. You’ve been at it since 2011. Obviously, a lot of lessons learned along the way. If you had the opportunity to have a sit-down with your younger self, that younger self that was about to jump from Sutter Hill Ventures to start Sila, right before making that move, what would be that one piece of business advice that you would give to yourself knowing what you know now?
Gene Berdichevsky: Hum. I think if it was to that specific younger self, I probably would tell that younger self to lean in a little more. I think we were conservative early on, and that’s been good, but we could have gone a little bit faster in this journey if we’d had more belief that it was all going to work. We were maybe a little bit too conservative in the early days. I think we’ve gotten more aggressive at the pace that we’re holding. Enjoy the ride. I think that’s the other bit. At times, it’s easy to get caught up with the weight of all this paranoia, of all the ways that things aren’t going to work, but I think it’s important to continue to enjoy it because if you’re going to be doing it for – I’ve been at it now – we’re coming up on the company’s eighth birthday. It can’t all be deferred gratification. You have to enjoy the journey.
Alejandro: Yeah, and also acknowledge the milestones because, in many instances, we’re like so in it that it’s tough to look back and acknowledge what you have accomplished.
Gene Berdichevsky: Yeah, that’s right. Also, because as entrepreneurs, we’re always saying, we got here. That’s great, but you’re always looking four or five years out, so you really feel like you’re just getting started all the time.
Alejandro: I hear you, Gene. So, for the folks that are listening, what is the best way for them to reach out and say hi?
Gene Berdichevsky: Probably just LinkedIn. Look me up there.
Alejandro: All right. Fantastic. Well, Gene, thank you so much for being on the Dealmakers show today.
Gene Berdichevsky: Thanks for having me, Alejandro. Great to talk to you.
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