At Correlate, our team is our biggest asset and we’re proud to have an incredible group of individuals who bring a wide range of backgrounds and expertise to the table. At the helm of it all is our President and CEO, Todd Michaels. We recently sat down with Todd to get to know him better and hear more about what drove him to start Correlate and what he’s most excited for as he looks ahead.
How did you first find yourself working in the clean energy space? What motivated that direction?
From hiking and camping to fishing, I’ve always enjoyed the outdoors and my love of nature led me to getting into sustainability at an early age.
I’m also a bit of a geek and have always been interested in technology and the utopian versions of the future portrayed in Star Trek. Technology makes the basics – food, energy, housing – easier to come by. And when people’s basic needs are met they’re overall happier and have more bandwidth to focus on things beyond daily survival, like sustainability.
The start of my career was in emerging technology in telecommunications when I worked for BBN Planet, one of the first internet backbone providers. The idea of changing the world through information access was an exciting concept to me and I paid my way through college working for them.
I ultimately spent seven years based in Silicon Valley and working around the country building out infrastructure for major carriers and clients. My background in telecom, an industry where mobile phones and the internet disrupted the phone monopolies, made it clear to me that onsite solar could serve a similar purpose when Silicon Valley started looking at the early solar market in the early 2000’s. With no fuel inputs from a third party, energy independence could be lucrative in addition to being clean. It sounded like the future to me, and I was ready to jump in.
What’s your 10-second elevator pitch for Correlate?
Correlate is a portfolio scale real estate platform that's focused on eliminating barriers for large scale property owners who are looking to improve their net operating income (NOI) and meet their sustainability goals.
When did you first come up with the idea for Correlate?
I was recruited by the President of North America for SunEdison to start a product innovation team to work on two key issues the solar industry was facing at the time: 1) scale 2) differentiation (as in, how could solar not be a commodity).
Over the course of my first year, we ran a lot of trials and tests that gave us insight into the challenges and missed opportunities at the time. One of the main things I recognized was that the Commercial segment of solar was plagued by very low conversion rates. Despite attractive value propositions like cheaper electricity and no out-of-pocket costs, customers still didn’t move forward – something we referred to as “no decision”.
After multiple customer interviews the reason for this became clear: they didn’t have the tools to properly analyze offers, nor the time (or appetite) to engage multiple vendors or painful sales pitches. This proved to be a tough problem for a company like SunEdison to solve as it demanded an entirely new business model. It required a company that could focus solely on customer-first project development with transparency and low price point to facilitate mass market adoption. It also required a suite of technologies that could be assembled to do the work quickly, cost effectively, and in a manner that created order to a fragmented supply chain. This was the idea and ultimate goal for Correlate: to make it easy for the customer and industry to reach their financial goals.
What problem were you solving for when you decided to start Correlate?
It's no secret a lot of corporations and companies, including the government, have massive goals to reduce their carbon footprint. You can do this two ways. 1) Better technology, including new infrastructure for lighting, heating, and cooling or 2) you can generate clean energy on site through clean energy like solar, but it's complicated for most businesses to figure this out.
Ultimately, we developed a business model that unlocks new rent opportunities by identifying cash flow positive upgrades and then designing and managing those upgrades. We do this for commercial and industrial properties across North America, primarily in the US, and we use technology to conduct these assessments efficiently across hundreds of buildings at a time. Once we identify the right mix of energy upgrades for a given property or portfolio, we then provide all the capital to deploy those technologies and maintain them over time including monitoring these facilities on a 24/7 basis.
Not only do we improve buildings up front, we also make sure they are maintained over time. Ongoing maintenance is very complex and even some of the most sophisticated facility management companies don't have the resources to effectively manage it. That is a key part of how we simplify energy upgrades: we remove the need to understand complicated technologies and the financial barriers to making them happen.
Tell us about your team.
We are a group of serial entrepreneurs in the clean energy space. Most of us started in the industry around 2006-2007 when we helped build some of the first companies to really scale in areas like solar, including some first-to-market companies that were leading providers for many years. Correlate team members have also helped grow some of the largest clean energy businesses that are publicly traded companies.
Collectively and individually, we’ve always had a trailblazing mindset. The Correlate team is composed of some of the first people to look at the upfront cost of these innovative technologies and develop financial systems that made them feasible. A decade ago we helped further develop the no-cost up-front business model that allowed people to obtain solar on facilities and this is now the predominant way things are happening. Today, we are really looking at the new frontier of bringing in the right people to work on a new cohort of technologies related to decarbonization, resiliency, and vehicle electrification.
Overall, our team has developed four or five technology companies that are still in business today. We’ve also deployed roughly $1.5 billion in project finance for thousands of mid-sized energy projects. When you look at that pedigree, there are probably less than 10 people who have done that in the US and we’ve got a couple of them on our management team today.
How did you get buy-in from the team you're working with now? What did that process look like?
It was very natural and organic. Put simply, we all acknowledged the same issues and believed in the same solutions. We started by testing the programs in the field with established companies first. We thought that building a program layer and a set of services for large industry peers like Retail Electric, and other providers with thousands of customers, would be the model. We were wrong. There were too many bad habits that needed to be broken, like reducing brown power energy contracts for onsite solar.
After COVID, when the commercial market became more stable, we decided to bring together a few companies and industry veterans who were disenfranchised with their big corporate jobs to launch a company on the public markets that was infused with our collective DNA.
What do you look for in terms of skills – both soft and hard – when it comes to talent?
For one, we’re looking for deep experience in specific fields like EVs and storage, so that we can further round out our team in order to address every single need a property or portfolio owner might have. As EVs in particular become more and more popular, having capabilities and knowledge around them on our team is critical to meet the market opportunity as a whole.
We’re also looking for people who have forward-thinking mentalities and the ability to adapt. This is an exciting field where things change and evolve quickly and if we aren’t looking ahead, we run the risk of falling behind. We need people on our team who are willing to accept new challenges, absorb new information, and learn new technologies. In all, someone who thrives in a constantly-shifting environment would fit in well here. It helps if they like to have fun, too.
What sets Correlate apart?
We have the discipline of a large publicly traded company and the innovative mindset of a start-up. We have a defined plan and the expertise to execute it, yet we are nimble and adaptable. Correlate is an ecosystem of best-in-class companies that are focused on growth and fundamentals to be a long term player with real scale.
Any big hairy audacious long term goals you'd want to share?
We want to be the first profitable, rapidly-growing, publicly-traded clean energy company with more than a billion dollars in market capitalization. And we want to do it in under two years. Suffice to say, this is not for the faint of heart.
Are there any roadblocks you anticipate along the way, or ones you've had to overcome?
The energy space always has crazy unplanned roadblocks, especially with solar. In early 2022, the “Section 201” solar module tariff issue caused prices to spike and there was a complete lack of product available. This happened right as we wanted to start construction on our pipeline of new customers. As a result, we had to delay projects or see our margins diminish. This wasn’t a great place to start, nor was it something I could easily solve as the CEO of a new public company with a board looking closely at my forecast to actuals.
After getting over that hurdle we were happily surprised by the approval of the $369 billion Inflation Reduction Act, with its influx of provisions for clean energy. We went from being investors who were freaked out about the solar market's future to seeing a clear 10 years of stability.
What are you most excited about looking ahead?
Building a profitable, savvy, and nimble billion dollar business that can also innovate – and doing it quickly. I want the best people to want to work here because we are so different and progressive, yet we’re also stable and admired.
What comes next for Correlate?
We plan to make it increasingly simple for people to find Correlate and take advantage of our offerings that instantly enable them to increase NOI and meet their sustainability goals.
There are a lot of great technologies, startups, and teams having a hard time scaling and who are looking for a group of experts like us that knows how to go to market and drive adoption. Our leadership team has experience running product innovation and incubator environments, both for startups and for big companies, and a big focus for us is getting our innovation pipeline developed for the next two years that makes it a little easier for companies to come to us.
That said, we’ve added a lot of new talent and technologies through recent acquisitions, so we have a very aggressive six-month GTM plan focused on getting this new unified business model that will get hundreds of millions of dollars in project finance to projects across the country. We also have two or three more acquisitions in the queue that will expand our footprint (physically from Hawaii to Boston) and our capabilities.
We’re also focused on new product packaging and delivery. We’re looking at markets like Hawaii and how we can help integrate energy efficiencies and storage and solar and thinking through how we can bring them together to offer new product development packages.
What's the best book you've read recently?
The Wide Lens: What Successful Innovators See that Others Miss by Ron Adner
Is there anyone you've considered a mentor on this journey or a source of guidance you have relied on?
From the early days in the industry, through today, I’ve had three important mentors who’ve also become friends.
First, is Glenn Harris, a seasoned executive from FujiFilm who entered the solar space in the early 2000s. Glenn had a very practical and data-driven approach to reading the market. He was one of the first people to mine the industry data to find patterns and then could translate them into practical actions for business opportunities.
Next is Bob Powell, who, ironically, I interviewed and agreed to hire at SPP (our first solar startup) when he decided to leave his role as CFO at PG&E. Bob is an amazing leader who blends finance, engineering, and big thinking and his wisdom from diverse global experience in power and capital markets has always been a lesson in history repeating itself.
Then there’s Soner Kanlier, who I met when I first started Correlate. With his deep understanding of the retail energy markets, and now the associated “Convergence,” Soner has the most interesting insights. In his eyes, there are no limits and he seamlessly merges policy, financing, solutions, and industries, and is able to bring people together. Everything he touches blossoms. I am admittedly an over planner, and Soner pushes me to just go for it.
You seem to be a master of optimizing your time. How do you unwind? What does life look like outside of work?
Travel and stress are hard on the body. After pushing myself way too hard through work in my 30s, my 40s have been more focused on daily exercise, getting better sleep, and prioritizing family and personal time. The same thing that first inspired me to get into this space is now what enables me to be effective in it, and that’s time outside. I moved to Idaho for better access to the things I love like hiking, biking, skiing, camping and overlanding – all of which are within an hour’s drive of me. In fact, the largest wilderness area in the lower 48 is in Idaho and I’ve had some gnarly rafting and backpacking trips, complete with moose, bears, wolves, and some big trout. To top it off, we have some of the best star-gazing in the country with low light pollution. But don’t tell anyone…