Startup Series: Flux Marine
Today's guest is Ben Sorkin, the Founder and CEO of Flux Marine, a company that offers 100% electric outboard motors.
Flux Marine is seeking to accelerate the electrification of the marine industry. We have a great discussion in this episode about the origin story of the company, Flux Marine's product and offering, and their decision to offer the motors as a standalone versus building the boat end to end. We also talk about their go to market strategy and approach, Ben's thoughts on electrification in general and where consumer sentiment fits in, where quality fits in, where cost fits in, where scalability fits in, and of course, where sustainability fits in.
We talk about the best ways to finance a company like this and the decisions that Flux Marine has made to date, including their recent $15 million equity round. And we also talk about their key goals for the company, how they stage those goals, what stage they're in now, what's coming next, and their long vision. We also talk about how the ecosystem will play out in general and what the role is of the big incumbents, what the role is of the upstarts, what the role is of the a la carte providers like the motors and what the role is of more of the Tesla or the Apple end-to-end approach.
It's an episode that will really make you think, and hopefully you'll learn something as well. And if you're a boater, you'll probably also be eager to get your hands on one of their products when they ship sometime soon.
Enjoy the show!
You can find me on Twitter at @jjacobs22, @mcjpod, and @mcjcollective, and via email at info@mcjcollective.com, where I encourage you to share your feedback on episodes and suggestions for future topics or guests.
Episode recorded May 4, 2022.
In today's episode, we cover:
An overview of Flux Marine’s electric outboard motor
Ben’s background in boating and environmental interests
Emissions and environmental problems with the boating industry
Ben’s theory of change as it relates to electrification
Why Flux Marine approached the industry via an electric outboard motor versus reimagining the entire boat as electric
The charging infrastructure available for electric boats
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Hello everyone. This is Jason Jacobs. And welcome to My Climate Journey. This show follows my journey to interview a wide range of guests to better understand and make sense of the formidable problem of climate change and try to figure out how people like you and I can help. Today's guest is Ben Sorkin. Founder and CEO of Flux Marine, a company that offers 100% electric outboard motors. They are seeking to accelerate the electrification of the marine industry. We have a great discussion in this episode about the origin story of the company. And of course, we talk about Flux Marine's product and offering. Their decision to offer the motors as a standalone versus building the boat end to end. We talk about their go to market strategy and approach. We talk about Ben's thoughts on electrification in general and where consumer sentiment fits in, where quality fits in, where cost fits in, where scalability fits in. And of course, where sustainability fits in.
We talk about the best ways to finance a company like this and the decisions that Flux Marine has made to date, including their recent $15 million equity round. And we also talk about their key goals for the company, how they stage those goals, what stage they're in now, what's coming next and their long vision. We also talk about how the ecosystem will play out in general and what the role is of the big incumbents, what the role is of the upstarts, what the role is of the a la carte providers like the motors and what the role is of more of the Tesla or the apple approach end to end. It's an episode that will really make you think and hopefully you'll learn something as well. And if you're a boater, you'll probably also be eager to get your hands on one of their products when they ship sometime soon. Ben, welcome to the show.
Ben: Thank you so much for having me today, Jason.
Jason Jacobs: Thanks for coming. I didn't ask before we started recording, but are you in Rhode Island?
Ben: Yes, we are in east Greenwich, Rhode Island. And we'll shortly be hopping across the bay to Bristol, Rhode Island, where we just signed on a brand new office facility.
Jason Jacobs: Amazing. Do you have, uh, roots there or what, what brought you to Rhode Island?
Ben: It was a little bit of a twist of fate. Um, I grew up in Long Island, New York. I went to school in New Jersey. I then worked for a company out in Hawaii. Uh, I then came back to work for that same company in Rhode Island to start to get closer to the startup scene in Boston, started really growing Flux Marine in Boston. And then I actually quit my corporate job two weeks before COVID with the plans to move to Boston, but with COVID everything really shut down. We, kind of, found ourselves sitting in Rhode Island. Rhode Island ended up being super supportive. And so we're now fortunate to call the ocean state the home of Flux Marine.
Jason Jacobs: That must have been super stressful.
Ben: It definitely was. [laughs] The whole world was stressed. There were so many moving parts. And for us, you know, we really said, how do we turn this into an opportunity to make the most of what's going on and keep moving faster while other people may slow down.
Jason Jacobs: Awesome. Well, what is Flux Marine?
Ben: That's a great question. [laughs] Flux Marine is, you know, is this company and we are really dedicated to electrifying the marine industry, specifically things about smaller recreational and commercial boats. We develop all electric outboard propulsion systems ranging from about 15 to a little over a 100 horsepower right now. The reason we went with outboard motors is because we truly want to have the biggest impact as possible on the marine industry. And if you look at the layout of the world of boating, there are several thousand companies that build boat holes and only a handful of companies that build propulsion systems. So by designing a brand new ground up propulsion system around the technologies with electrification, it really puts us in a position to enable the thousands of boat manufacturers to offer electric solutions to their customers.
Jason Jacobs: What led you down the path of doing this in the first place?
Ben: So it's exactly that I was led down the path. Uh, I like to say this was never even a choice for me.
Jason Jacobs: Led to slaughter almost.
Ben: [laughs] Pretty much. I grew up every summer in upstate New York on Lake George in Bolton Landing. And from an extremely young age, you know, a couple years old, I was tinkering with boat engines, fixing boat engines, had my boating license when I was 10. And so grew up in this world where I loved boating. It was, you know, a huge passion of mine. At the same time I spent a lot of time volunteering at an environmental education center and I always had a deep appreciation for the environment and the world in nature. And it's a little bit of a dichotomy when you care so much about the environment. And then you're looking at boats that, you know, might not be the best thing for the environment. And so I, kind of, grew up with this lens of how can we make boats better, faster, safer, more efficient, and overall, really reinvent and recreate the boating experience in a sustainable way, and that's what really led me down the path of electrification.
Jason Jacobs: And when you first took a look at the boating industry, you identified a problem. Were there different potential solutions that you explored before landing on the one that you did and how did those twists and turns play out over what period of time and how many twists and turns were there before you, kind of, locked in on this approach?
Ben: Yeah. And so I, kind of, to start with the, with the approach in a backwards way here is the, the Flux Marine approach is a truly ground up design that's not based on any legacy combustion system. It doesn't take electric components from cars and put them in boats. It really is, kind of, like a blank slate design. And this approach was curated back when... 2015 is when we really started looking around at what was happening in the automotive industry with electrification and then seeing what existed in the marine industry. And in 2015, there really, really was not much there were trolling motors, of course, which, you know, maybe one horsepower really not used for anything past fishing and trolling around. Um, there were a couple companies that were doing retrofit designs, essentially taking a gas engine shell and putting an electric motor inside of it, which works, but it's not, you know, truly ground up and innovative. So I started thinking there and you started to see other companies pop up with some innovative designs, some sticking with the traditional, let's just take a gas engine and electrify it. Um, but nothing struck me as suitable for mass market and being able to be adopted by the millions of boaters that are out there now.
Jason Jacobs: And just to, to stop you there for, for one sec, what are some of the biggest differences between the retrofit and being truly innovative and, and maybe some examples would be a illustrative just to, kind of, put me and listeners in the same head space as you about what's possible.
Ben: Absolutely. And so if you look at, uh, gas outboard from right now, and then you look at a gas outboard from about 50 years ago, they share a lot of the same designs and features. It's surprising how few changes you've seen in a lot of the structural aspects of it. People joke, boat stands for bust out another thousand, 'cause something's always going wrong. You're always spending money to fix it, to maintain it. And we looked at all these things, you know, what causes maintenance requirements, what causes reliability issues and how do we design around those things? And it starts with something like the cooling system. In a gas engine you have an impeller that spins on the same shaft as the propeller, this is, you know, a rubber piece that essentially sucks seawater in circulates it through your engine and spits it back out. So you're... you need to replace the impeller every so many hours. It needs to be inspected every so many hours. And then you're also introducing seawater into your system. So it's like generally a good idea to flush that out.
In electric, cooling is still critically important because it helps differentiate between continuous and peak power levels, but we didn't want to bring seawater in. So we actually designed a completely closed loop cooling system that actually uses the structure of the outboard motor, like a submerged fin heat exchanger, and therefore eliminates any sort of seawater ingestion. And it's a lot of these small innovations along the way that it wasn't one specific thing, it was a group of things that resulted in not having to deal with any maintenance, no winterization. And then it also brought the weight down significantly. No matter how you spin it, batteries are much less energy dense than gasoline. And so we either need to make our system lighter or we need to make things more efficient and realistically you need to do both. And so we were able to get the weight down of the outboard to less than half the weight of a traditional gas outboard, which allowed us more boat... more weight to put batteries in the boat.
Jason Jacobs: And maybe, uh, taking a detour from, uh, Flux Marine specific questions. I'm just curious from a philosophical standpoint, when you think about electrifying everything, do you have a theory of change or core principles as it relates to what it will take on a category by category basis and how consistent are those things across categories versus being custom in specific categories? And I guess same question as it relates to geographies and same question as it relates to any, any number of vector. In other words, like, is there a way that's the right way or, or is that way too general?
Ben: I think there are certainly guiding principles that are appropriate across all forms of electrification. You know, a lot of these for me revolve around safety and use case, I think are two of the really big things that I like to look at. Clearly safety is paramount in any electric system. It's not a secret that a lot of people aren't necessarily ready to adopt electric and everything. And there's a safety concern there, you know. If they see a fire, you know, what causes that? And so it's super important for those of us who are doing the innovation to make sure we're doing it in a safe way. You know, one fire on one boat from one manufacturer hurt, hurts them all. Same thing with, you know, a ride on lawnmower. If that was electric and caught fire, you know, someone who's running a landscaping company might be more hesitant to buy an electric land... lawnmower 'cause they saw one catch fire. And that could just be, you know, the fault of one small manufacturer. So safety across the board is critical.
And then use case across the board is critical even if it's a single product, there are a lot of different ways to use it, whether that's a blender... a portable blender or an electric outboard motor. And understanding those use cases and conveying those use cases to the consumer is critical to ensure that, you know, when a consumer is actually looking to switch to something electric or battery electric, they're buying into something that will work for them. The worst thing that we can do is convince someone that electric works for their use case when it doesn't actually work. And then that becomes a big turnoff.
Jason Jacobs: I guess, same question in terms of who's best equipped to bring these electrified offerings to bear. What is your view on incumbents and wha- does that also shift from industry to industry and product line to product line or do you have a specific view on incumbents versus upstarts? Obviously that's a loaded question given where you sit, but uh, but, but curious your view.
Ben: I think it's not going to just be done by startups and it's not going to just be done by incumbents. You know, I think a lot of times the initial disruption is going to come from startups companies like us, companies like Tesla and the automotive industry and that lights a fire under, you know, the big incumbent saying, maybe, maybe this is possible. We should start looking into this. And as these startups, kind of, continue to proliferate and create new technologies, it really raises the bar for innovation from the incumbents. And I think that creates a lot of opportunities for the incumbents to work with startups, to fund startups, to acquire them. Startups do have the ability to move more quickly than a large company. There's less red tape. Uh, they're more agile, but at the same time they often don't have the same resources as the large incumbents. So I think for us really to get electrification on everything, to electrify everything, there will be a lot of collaboration between the incumbents and the startups.
Jason Jacobs: And when you look at who the incumbents serve versus who you're setting out to serve as an upstart, are you trying to persuade people to convert from the traditional way of doing things to this new electrified way? Or are you getting people into boating that wouldn't have otherwise done? So how do you think about target market? Both, both in the near term and, and directionally.
Ben: It's a mixture of both. And so we've talked to a lot of customers who basically the best way to own a boat is to have a friend who has a boat. And, you know, with the advance of electric and the capabilities and features and benefits that we bring. They're now saying maybe it makes sense for me to own a boat. And so we're seeing a lot of new people come into boating, especially those folks on electric only lakes, where before they could only have the small boat with the trolling motor and now all this and they can have something that does a lot more.
Jason Jacobs: It's like a bike lane and now you've got these electric bikes going 50 miles an hour. It's like, whoa. Like, we didn't envision that when we set up these bike, bike lanes. [laughs]
Ben: To an extent, but they're still quieter. That's that's, that's the joke about outboards, right? You could shoot someone on a gas outboard from two miles away in the pitch black. So there's, there's a lot of interesting, you know, activity there. But then at the same time, there are a lot of existing boat owners who, you know, use combustion engines that are thrilled by the option of electric and it's for a lot of different reasons. You know, for some people it's sustainability for other people, it's the not having to go to the gas station and fill up when the gas station is open and wait on line. For other people, it's simply because they like the idea of quiet and fast acceleration. So there are a lot of different reasons to switch to an electric system that is properly designed and really carries all these benefits.
Jason Jacobs: And uh, when it comes to sustainability, is it realistic to think that someone would make the switch for sustainability if it wasn't up to par with existing offerings, as it relates to things like cost or safety or performance?
Ben: Um, I think each of those things is a different category. Switching to sustainability, if it's less safe, I think that's a far more unlikely trade off that we've seen and, you know, we never want to put a product in the hands of anyone that's less safe than a gas engine. Um, in terms of cost, we definitely see people willing to pay more for sustainability in terms of performance. You know, a lot of our systems are better performing than equivalent gas engines. So people are willing to pay for that. If it was a set up such that the performance was not as good as the gas engine, there are far fewer, there are far fewer people willing to do that, but there are still some. And what this really tells us is specifically the marine industry, it might be the most segmented industry out there. There's thousands of different boat manufacturers that can build thousands of different combinations of boat types that can be used for thousands of different applications. And so everyone has their own specific use case. And drivers.
Jason Jacobs: Given that you are, are doing this ground up design of this standalone engine, are we, are we calling it an engine? I just want to make sure I'm using the right words.
Ben: We'll, we'll call it an outboard motor.
Jason Jacobs: Okay, motor, right. So an out- outboard motor, my, my question is caveat is that I'm, I'm not much of a boater, so I don't, I don't have that great a handle on the boating industry, but the traditional outboard motors, what percentage of them are purchased standalone versus built into the boat? And how do you think that ratio will change if at all for electric and why?
Ben: Yeah. And so there are different types of ways to power a boat. I think the common ones are outboard, inboard. Inboard's basically like a straight shaft and then IO the inboard outboard, which is essentially you have an engine inside the boat, then you have an outdrive. Those are far less common than they used to be. And I'd say outboard is certainly the predominant, uh, propulsion option right now for boats under 30 feet, even some larger boats. I'd say over 90% of boats are sold with outboard engines. In terms of if you're, kind of, tracing where outboard engines come from and where they're sold to, about two thirds of outboard engines every year, get sold to be paired with new boats and about one third, go through the repower market, which are essentially people replacing the old gas engines on their boats with new gas engines.
Jason Jacobs: And how do you think that ratio will be for electric? Is there any reason why it, it might shift or do you think it'll be the same?
Ben: I think there are a couple reasons why it might go either way. I think early on, we'll see a lot more repower to go to electric. So the really early adopters, and then I believe things will start to catch up in terms of full brand new boat packages being offered with electric outboards.
Jason Jacobs: You mentioned, uh, ground up design, but unlike, uh, Tesla, for example, I mean, Tesla does the whole vehicle, but you're just doing the motor. And it sounds like... so are you, are you partnering with existing boat manufacturers or is this just something that people can buy after market and get installed on the boats that they already have?
Ben: It's exactly a combination of that. So we're partnering with a handful and an increasing number of OEM boat partners. That'll be able to offer complete solutions to their customers. And then we're also setting up our own dealer and service network that will be able to enable people who want to switch to electric to be able to repower with electric.
Jason Jacobs: And I haven't seen anything about Tesla making a boat, but I would imagine if someone came along with a Tesla like model, whether it's Tesla or someone else, they would say, well, I mean, you could cobble together the components and you could, you know, take an electric motor that was done ground up and, and insert it into an, an existing boat design. But if we take on the whole thing ourselves, we can have deeper integration and unique capabilities that couldn't be offered if you don't control the whole experience, it's almost like the apple pitch. Um, how do you think about those trade offs and why did you land where you did?
Ben: Ultimately it comes down to overall impact. I don't disagree that, you know, if you're taking full control of a boat you're building the entire boat and the entire propulsion system all integrated together, that could be the most efficient package. Um, it's also going to be a very expensive package and we've seen that with other companies that are doing exactly that. And, you know, I think it makes sense. There's definitely a market for it, but in our opinion, it's not the grand mass market. We could sell tens of thousands of outboard motors, if not over a hundred thousand outboard motors, just based on the boats that are being sold in the US right now. For a new boat manufacturer to scale to thou- hundreds of boats, is a significant... you're a big boat manufacturer if you're building several hundred boats. If you're building several thousand boats, you're a huge boat manufacturer. Then you start thinking about, are there any boat manufacturers that build 10, 20, 30, 50,000 boats a year, there really aren't. At that point, it's all the different types of manufacturers that really add up to the total number of boats sold. It's a great technical approach, I think it has a lot of intrinsic value, I think it has a market, but for us that's not necessarily the mass market approach.
Jason Jacobs: And for the 15 to 100 horsepower, uh, target that you mentioned, how long do these trips tend to be and do they tend to be from point A to point A or are they actually going places? And what I'm trying to get at is how big an issue is, is range, uh, relative to something like an EV.
Ben: And that's where we circle back to use case. So there's some use cases that are not good for a 200 miles off for fishing, not good for electric. But now you think about a boat in upstate New York on lake George, you know, that lake is just over 30 miles long. I grew up there every summer. I think maybe one time I went tip to tip on that lake, but the average boat trip there is three or four miles. You could be on the boat for 12 hours, but you're starting at the dock. You're going over to the Rangers station, you're renting an island. You pop a mile over to the island. You go to the bay, you go to town at the end of the day, you went three or four miles. It was barely anything.
And so there's so many use cases like that, where it's just a very short distance, but you're spending a lot of time on the boat, where range really does not matter that much. Um, you know, we like to be able to meet as many use cases as possible, and there's also an educational component to it where someone might think they travel 40 or 50 miles, um, over a day of boating but then you actually look at the fuel consumed, you look at the path that they took and you realize that wasn't 40 miles. It was actually five. And so I'd say 90 plus percent of inshore boat trips are less than 12 miles.
Jason Jacobs: And what, what does the charging infrastructure look like today relative to the EV infrastructure?
Ben: That's one of the exciting things about the marine industry. Is that a lot of the basic charging infrastructure exists. You know, we really look at it as when you're not using your boat. You leave it plugged into charge. You don't necessarily need to fast charge because a full battery is more than enough for a full day of boating. And you look at a lot of marinas here in east Greenwich every single dock slip has a power pedestal with anywhere from 120 to 220 volt outlets all the way up to a 100 amps. So there's huge power here because a lot of the bigger boats that pull in will plug into these things and run our auxiliary power day in, day out, be running air conditioners. And we found just in our time that we actually pull less total energy from one of these power pedestals than a bigger boat does that's not even mainly electric. And so a lot of the infrastructure exists, which is exciting. It's not everywhere. There are certainly remote areas that would need something. Things like moorings. You know, there's some innovation required there as well to ensure that people can get powered to their boats.
Jason Jacobs: And where do things stand from a cost standpoint versus a, uh, traditional motor?
Ben: It definitely depends on, you know, if you're buying a standalone motor or buying integrated boat package, we often find that when we're selling fully integrated boat packages, it's maybe a 10 to 30% increase in price... in upfront price over, uh, complete gas boat. And then of course, there's an ROI on that, depending on how you use your boat, you know, that can be anywhere from two years to eight years. But one of the things we also think about is what is the ROI for a day that you miss out on the water because something went wrong with your gas boat. And it's really tough to put a price on that, especially 'cause boating is... it's a recreational thing. You do it because you love it. And it's really hard to put the price of a weekend with your family out on your boat and then not being able to do that.
Jason Jacobs: Where are you, uh, in the product development journey and where are you as it relates to going to market?
Ben: We unveiled our prototypes for the first time last year at the Newport International Boat show. Got some really, really exciting feedback from consumers, press, dealers, whole OEMs investors and, and so on. Um, we're now at the point where we have a bunch of these buzzing around in Rhode Island. We are in the process of some customer deliveries this summer. And then we expect to really go to market production wise, uh, in 2023.
Jason Jacobs: And when you initially go to market, how are you planning to do so?
Ben: It's going to be through a handful of different channels. Um, one of those channels will be directly with some boat home manufacturers. Where we're offering complete packages for one through our website. Uh, we constantly curate packages there and consumers will be able to come to our website and have a selection of boat packages. Two, uh, people are able to essentially reserve standalone outward motors and batteries. And then we have a team that reaches out to understand their specific application and what boat they're trying to repower. And then they can bring their boat in to our facility. We repower it and send them on their way.
Jason Jacobs: And what are the big things that need to happen between now and when you go to market?
Ben: I'd say hiring is, is the biggest thing right now. I'd say the technology is really well proven. It's very robust. You know, we need to focus on commercialization and manufacturing, but getting more people, um, on the team I think is going to be critical to really build out the engineering capabilities, continue to invest in innovation, invest in manufacturing, and then just build out really a support team to ensure that we can get as many of these motors on customer boats as possible.
Jason Jacobs: As more competitors enter the market, given that full charge gets you well more than a day of boating at this use case. How do you see one differentiating from the next in the consumer's eyes? Uh, will it be cost or, you know, is it... I guess what I'm asking is, is there a point of diminishing returns on, on performance and, and how will the consumers ultimately make decisions as more options exist?
Ben: Yeah, that, that, that's a great question because right now there really aren't a lot of options. And so a lot of the consumer choices are driven by what works. 'Cause for example, we have a four meter inflatable rib with a 40 horsepower flux outboard, um, and that does everything it did with the gas engine. And there's no other electric solution that would either make that boat go the same speed, would actually fit inside the boat. And so right now that's a big driving factor. As we move forward, uh, you know, a lot of the differentiating factors will be into technology. So the way we've done that complete ground up design, uh, the way we're able to make the outboard so light and very efficient, that relates to longer range. It's more easily integral with more different types of boat holes.
And so when we talk about efficiency and making it more efficient, that then relates to, you know, the requirement of fewer batteries and ultimately drives cost. So you will see as more players enter the market, there'll be people that are specifically looking for the most cost effective solution. And there'll be the people looking for the best performing solution. And by leveraging economies of scaling growing rapidly, our intention is to be able to offer both.
Jason Jacobs: I'm assuming, and again, this is an assumption because I'm not steeped in the boating industry, but that there are certain publications whose voice really matters. And certain voices in the industry who, uh, people look to as thought leaders, as it relates to new technologies, new products, new brands, where the industry is going. How is electrification perceived today in the mainstream boating industry? And what does adoption look like so far, uh, in general and relative to, I, I mean, I keep coming back to cars just because it's, I mean, it's an obvious comparison point.
Ben: I'd say a lot of it is similar to cars where you certainly have a lot of early adopters who are ready to buy anything electric and try it out. Then you have a lot of folks that are just excited by it. You know, they don't necessarily want to buy the first one, but they know it's coming. They're excited by the potential of it. And then of course they're the people who say, you know, electricity and water don't mix. And, you know, the answer there is it's safety, you know, really safe design makes that okay to have, you know, high voltage electric in aqueous environments. But there will always be a subset of people who don't believe and don't support electric. And a lot of other people, you know, don't want to sacrifice performance for electric. And that's why I often say my job as an innovator is to be able to develop a solution for consumers that does not have any sacrifice, whether it's performance, maintenance, cost, um, but is also sustainable. And that way the consumer doesn't necessarily have to make a sustaina- sustainable decision, they can just make the best decision for them. And it's up to the innovator to make sure that the best option is a sustainable one.
Jason Jacobs: To the extent that there's any, kind of, pattern or track record in the boating industry, do boat manufacturers tend to make their own motors or do they tend to partner with organizations who make dedicated motors like, uh, a Flux Marine. And, and correspondingly from a consumer standpoint, do people tend to swap out their motor over the course of owning their boat or does the existing motor tend to go when the boat changes hands, uh, but before, uh, something goes wrong with it.
Ben: Boat manufacturers and engine manufacturers are pretty much completely decoupled. Everything from operations to, you know, just branding. When you go out and you look at a boat and say... you ask them what kind of boat they have. It's more, generally more easy or easier to recognize what outboard engines it has than what the boat brand is. And so that decoupling of brands is super important to understand. And then these companies that are building, you know, several hundred boats a year, the, the amount of resources, time, effort, energy, capital that goes into developing a production line of propulsion systems is tremendous. And so the boat manufacturers do not build their own propulsion systems. What I can say is there are some larger companies such as Brunswick that owns Mercury, which is one of the biggest propulsion system companies. Um, and then Brunswick also owns a lot of boat brands like Sea Ray and Boston Weller. So there are some conglomerates there, really large companies that own both, but, you know, you're not going to see boat company go out and start producing their own outboard motors.
Jason Jacobs: Do you worry more from a competitive standpoint about upstarts that are electric only, or, uh, incumbents, uh, expanding their portfolio to include, include electric options?
Ben: I think in terms of a lot of it excites me when I start to see other companies doing electric, you know, I think it's great that Brunswick has announced an electrification strategy going forward. I love seeing other startups trying to push the boundaries of innovation because I know they're going to push the incumbents and push the market in the right direction. There's... This market is wide open right now. I'd say the only thing that I get nervous about are startups that might be trying to get to market too quickly and may put out products that don't necessarily represent the best in safety or the best in performance for the potential of electrification. And that may be a turnoff to consumers and slow down the entire transition of... to electrification as a whole.
Jason Jacobs: When you thought about capitalizing your company, and, and I know you've, you've raised a bunch of capital at this point. How did you think about the type of capital, whether it be equity or grants or debt or other sources, and also, how did you think about the types of firms that are providing that capital as it relates to maybe more of a generalist focus versus climate specific or something different?
Ben: Yeah, I was a huge proponent of self-funding as much as possible, uh, getting grants, finding non-dilutive pitch competitions. And this was in the very early days of, you know, obviously no one's getting a salary we're just trying to build the basic prototypes, prove out the technology. You know, it's one thing to pitch to investors with a PowerPoint of a physical thing that you're going to make. And it's another thing to show 'em a PowerPoint and then take them for a ride on a boat. And I'd say the ladder goes a lot further. And so very early on, you know, we leveraged every resource you could possibly imagine to get non-dilutive funding to really build out the, the early stages. Then from there, you know, our first round it was really find really smart, passionate people who saw the vision. Um, and, you know, bring on a lot of, a lot of people who are not just financial capital, but are partners.
You know, it takes so much to build a company from the ground up, especially a hardware company. You cannot do everything by yourself. The founding team is not enough. Early employees are not enough. So being able to leverage the investors to fill gaps, I think is a critical way of going about and building a company. And then, you know, moving past there, we just closed our series A round of about $15.5 million led by Ocean Zero, which is a really cool fund that really focuses on... they've... they care a lot about climate impact specifically in the ocean sector. They're not just about the impact. They also want to invest in businesses that, you know, can yield large financial returns. And I think it's always good to pair climate focused and impact focused funding with funding that might not be specifically climate or impact focused. And so we have a larger ray of investors that range from the climate to range from, I don't even know, kind of, what the climate impact of this is, but from a business perspective, this makes a ton of sense. And that way you have really both ends of the spectrum open for future funding rounds.
Jason Jacobs: And what are the key milestones that you're driving towards with this series A capital. And how are you thinking about series B if at all?
Ben: Yeah, I'd say, you know, the big milestones we are based... we want to get motors in the field. That's the, the biggest thing, electric motors in the hands of customers. That's the biggest thing that we can do. We want to show the world, you know, what we're creating. We want to get more people behind the wheel. That's, kind of, the overarching milestone. As far as series B goes or something later, it takes a lot of capital to build a company that changes an industry. And so there's certainly more funding that's part of the plan.
Jason Jacobs: Do you think that that's primarily equity capital or are there other sources that you might consider?
Ben: There are couple different paths. I think we're considering all of them. I think obviously equity's a really good candidate, um, but also chase down every big opportunity we can, whether that be grant or other.
Jason Jacobs: And at this early stage, uh, how active are discussions with, uh, strategics and what's your advice to other people that are pre-launch in a very product focused phase, like you, in terms of how much time to spend with strategics, if any.
Ben: It depends on the strategic, I would say a lot. If the strategic is a customer, then spend a lot of time. Customer discovery is one of the most important things. Um, one of our early investors, Steve Blank, you know, couldn't say more about the importance of customer discovery and that's gone such a long way for us in terms of everything from forming strategic partnerships, to finding actual customers, to finding investors. So the advice there would be treat all these strategics, like they could be customers and learn as much as you can from them. And they might, you know, really help you define key milestones that you need to hit to grow your business.
Jason Jacobs: How much do you expect that policy and government incentives slash regulation will play a role here and correspondingly is that something that you have or plan a resource to as you grow?
Ben: I think my high level hope is that we won't need that and that the technology itself will be enough to help with the transition that being said. I think the government has the ability to play a huge role here. You know, once again, what we're doing is not easy. It's not inexpensive on our end. It's not super inexpensive early on, on a consumer end. And so for the government and NGOs, to be able to start to play a part, everything from, you know, funding, pilot test to beta test to paving a way as a customer, I think there's going to be a lot of value there. I know there are some groups that are working on it now. And so we're trying to ensure that we stay plugged in there and, you know, be able to have a voice in why the government should help with these things, the environmental impact, um, the noise impact, and then the potential upside for just government and society. If we start to see more electric propulsion systems on boats.
Jason Jacobs: If you could change one outside of your control to most accelerate your progress and your mission, what would you change and how would you change it?
Ben: The world is in a little bit of a fragile place right now, just as far as hardware innovation. You know, software innovation I'd say is not so much been stifled in the last couple of years, but on the hardware side, just seeing things like chip shortages, uh, supply chain issues, increased cost of shipping that's reverberates around all of hardware and all of product development, um, everything from R and D locations and academia to the boat manufacturers. And I think if there's a way to really push on this and solve that problem, I think that'll overall help expedite innovation as a whole and ultimately, uh, transition to clean energy.
Jason Jacobs: And any ideas of how we might do that?
Ben: I don't have the best answers for that one. You know, I think it's really enable people in positions that can make a difference, the ability to move forward and make, make those differences. A lot of it is communication on global scales of understanding timelines, constraints, the entire flow chain from raw materials and to end users. Not a great answer there for how to fix that and that's the million dollar question right now.
Jason Jacobs: And for anyone listening, that's inspired by your work, uh, how can we be helpful to you and or what, kind of, people might you want to hear from?
Ben: Spread the word of what we're doing. I'd say the two biggest things we're, we're always looking for are customers to buy in and people to come work and support the cause. We're hiring rapidly right now, we've got 20 odd positions on our website right now. We promote a super high work, high reward environment, access to company boats. Um, and so we're looking for people who want to truly make a difference, uh, dive in head first. So the one thing I'd ask is spread the word that Flux Marine is hiring.
Jason Jacobs: Great and Ben, anything I didn't ask that I should have, or any parting words for listeners?
Ben: I think you, you asked a lot of the really great questions. At the end of the day passion drives a lot of what we do, and if you, kind of, stick to your core passion and then find resources, you're going to put yourself in a really great position to succeed.
Jason Jacobs: Awesome. Well, great point to end on. Thanks so much for coming on the show and can't wait to see your products out in the wild.
Ben: Thank you so much for having me, Jason. I really appreciate it.
Jason Jacobs: Hey everyone, Jason here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us at myclimatejourney.co. Note that is .co not .com. Someday we'll get the .com, but right now .co. You can also find me on Twitter @JJacobs22, where I would encourage you to share your feedback on the episode or suggestions for future guests you'd like to hear. And before I let you go, if you enjoyed the show, please share an episode with a friend or consider leaving a review on iTunes. The lawyers made me say that. Thank you.
