Ep 018 - The Southwest of Solar with John Berger

Transcript

Transcripts are generated by machine learning, so typos may be present.

Chris Hanslik: In today’s episode, you will hear from John Berger. John is the CEO of Sunova Energy, a residential solar company based here in Houston. In this episode, you’ll learn why John likens his company to a wireless power company, as well as being the Southwest Airlines of solar. John also shares some key fundamentals that any business owner or entrepreneur will benefit from. Good evening. For those of you that I have not met, my name is Chris Hanslik. I’m the chairman of BoyarMiller. I want to welcome you tonight. We thought it would be fun. We started this podcast on June 30th and we thought it would be fun to try to gather and do one recorded live. And it was actually the original plan was to never have a podcast and just do an event like this and interview entrepreneurs and business owners like John. COVID derailed that. And so we decided, Hey, why not do a podcast? And you may be wondering, why would a law firm do a podcast? Our philosophy is we’re entrepreneurs. Our widget just happens to be legal services, but we identify as entrepreneurs. So the idea was every entrepreneur that I’ve ever represented has a unique and inspiring story. And why not provide a platform for them to tell that? And so that’s what we’ve done. I think we’ve released 16 episodes since June 30th. And so we decided let’s try one live and see what happens. So what could go wrong, right? I do want to recognize a few of the former podcast guests that we have with us. Bethany Andel is here somewhere right there. Goran Hogg. and Rob Whitman. Rob still here? There he is in the back. Thank y’all for being here. Thank y’all for being guinea pigs early on and we didn’t fall on our face. We’re still here at least so far. So for those of you after this, I think this one will, this will be recorded tonight and be released next week. So you’ll probably receive an email and it will always be on our social media channels as well. Hope you not just listen, but like, review, and share it with friends. We appreciate that. And I want to give a special thanks to my team that helps put all this on, Josie Morgan. Josie, raise your hand. Andrew Carpenter. and our friends at Savage, Heather, Maynes, and Cher, somewhere, Cher Garland. She’s around here somewhere. She’s probably still working on something behind the scenes, so thank y’all. All right, well then, let’s keep going. Have a seat. All right. I may say it later, but a little background. John and I grew up together in Bryan, Texas, so we’ve known each other a long time. I just happened to say, you know, here we are in Houston together. And did Matt Beach come? So one of our partners is from Brian. So Brian Vikings, we’re taking everything over. All right. So John, thanks for being here. I want to welcome you to Building Texas Business and I appreciate you taking the time to come tonight.

John Berger: Thanks for having me.

Chris Hanslik: So as I mentioned, we’re doing this live. So if you misspeak or say something you regret, we’re not going to stop and go back over. So be careful. All right. And yeah, and for those of you that are listening from the recording, if you hear clanging of glasses or something, that’s why, because we’re recording live for the first time. We’re excited about that. John, start by just telling us, I know you’re the CEO of Sunova Energy. What is Sunova known for?

John Berger: Well, Sonova started out as a, really just as a solar company. And the way to think about us is a wireless power company. So we, through contractors or our dealers, would go up and sign customers, homeowners, to long-term solar contracts. And we’d finance the solar panels, the inverters, and so forth that would be installed in the homes. And we would finance those under a lease, a power purchase agreement, which is paying per kilowatt hour like you’re used to doing. with the utility, retail electric providers here in this market, or alone. And what’s happened since then, and we were at the breakfast a couple years ago, Steve and I were talking about this earlier, about what we talked about, the future happening. The future has happened. And right now we’re selling along with the solar and signing folks up. We’re also installing batteries. So many of you also know about the Tesla Powerwall Nobody buys more power walls in the world than Sunova. And we’re now adding EV charging. We’re looking to add generators with Generax and other partner bars and then load managers. And there’s a lot of other things. If it’s energy in the home, we will incorporate it into our service and then sell that to the customer. So now, I announced on our earnings call about a week ago, we’re going to have within 24-hour response. So we’re moving towards like we are a wireless utility. And we have a very big service territory. We span from near Japan, Guam and Saipan, If any of y’all know where that is, in the middle of the Pacific, and then all the way through Hawaii, California, Texas, Puerto Rico, and the Caribbean, and as far north as Massachusetts. So we’re in about 33 states and U.S. territories right now, we think would be in roughly about 53 by the end of next year. So pretty much cover the entire United States. So again, more like a wireless power company. That’s great.

Chris Hanslik: So I noticed on your LinkedIn today, the company’s LinkedIn, you have a pretty major announcement. You want to share that with everybody?

John Berger: Oh, on the 50,000 new homes? Yes. So we bought a business earlier this year from Lenar Corporation, which Lenar out of Miami is the nation’s largest home builder, very innovative company. Stuart Miller is the executive chairman there, very aggressive on new technologies for homes and so forth. And we bought that business from them and they’d become a really important partner of ours and looking at new technology. So you’re going to see a lot of really cool things all the way to possibly not having master plan communities even connected into a centralized grid or maybe just on a fail safe type of manner. But certainly more and more you’re going to see solar standard as a standard package of new homes, batteries and all EV charging equipment, everything that I’ve talked about. in these new homes, and we see that spreading quite rapidly. So we had 50,000 homes. That was part of the business, and then we’ve gone ahead and grown the business even further, and it’s accelerating. And part of that reason for Lunar to sell that business was that it was difficult to get home builders, other home builders, to sign up with them because Lunar is a competitor. So once they separated that business and sold it to us, Then a lot of other builders came in and said, okay, now we love this business. You built it for builders because it was a builder that built it. But now we don’t have to worry about sharing our competitive information and all that other stuff. So it’s gone pretty well.

Chris Hanslik: Basically open the market up.

John Berger: We opened the market up for us for sure.

Chris Hanslik: Very good. That’s for sure. So that’s where you are now. Tell us, just to go back, tell us what inspired you to get into solar in the beginning? Because I know you started at Enron.

John Berger: Yes. Right? Yeah. So we can talk about… Anybody remember who Enron was? Okay. Yeah. So first of all, I didn’t work in finance, just to say that. And I didn’t work on the west power desk, I worked on the east power desk. But as Chris said earlier, I grew up in Bryan. And when I graduated from A&M with a civil engineering degree, I basically wanted to go into energy. thought energy was cool. I thought there was going to be, nobody wanted to go into it at that point. It was 1996. And so I thought, you know, that’s what I’m going to do. And I thought, of course, energy is oil and gas. And I was going to basically go get a master’s in petroleum engineering. And then one of the profs said, no, you shouldn’t do that. You should take a job with this company called Enron. I was like, I don’t even know what that is. So I got interviewed, they gave me an offer, and by the way, the woman that recruited me now works and is the lead recruiter of Sunova, which is kind of interesting. Really fascinating. That’s really cool. So I got a job there and I packed all my stuff in the car and came to Houston, got an apartment at West Creek Apartments, for those who remember that, right down the road. And I thought I was getting shipped off to an oil platform. I got stuck on the hourly trade desk and I worked in nights and weekends, which is what I thought I was trying to avoid by going to college. And then, you know, the rest is kind of history. But one of the things that I was able to do is in 1996, it essentially was running a utility. We were. And I was five weeks off the stage and I said, I want to go do that. And they said, well, you want to go to Atlanta? And I said, Atlanta Olympic Games, you’re paying for everything? I was like, yeah, I want to go do that. So, I went there and did that.

Chris Hanslik: And you weren’t thinking about work. You were just going to go to Atlanta for the Olympics.

John Berger: I was going to go for Atlanta, the Olympics, run the utility. Exactly. And I figured the dating scene, I was single at that point, was pretty good too. So, it was all a good amount of fun. And what ended up happening is it got a good appreciation for the physical system and how archaic it was. And it still is, obviously. And I’ve said this, and we’ll talk about it, I’m sure, later, but I really believe the energy business is the last major industry to undergo and enter the digital age. And that’s exactly what’s happening with solid-state disruption, with solar, with batteries and other technologies, software, et cetera, that we’re part of and leading and doing. And I saw the physical limitations of the system, and I said, you know what? Something else is going to come. So I left Enron, went to business school, came back, sort of doing some venture capital, and really stumbled in my first business was energy efficiency. I was a contractor, which is now equivalent for a dealer for me, and I stumbled into solar, and I realized, and it was actually another Houston entrepreneur that built a chip business, very successful in the logistics area, and he said, you know what’s gonna happen to solar modules is, and this is like 2005, They’re going to go down in price a lot because it’s just chips. That’s all it is, just memory chips. That was a radical statement. Most people would say that was crazy, actually nuts. And I thought, you know what? That’s actually not nuts. That’s exactly what’s going to happen. So I started getting more and more into solar, founded the second business after I sold the first. And then from there, knowing my power background, I knew batteries had to be the next thing as well. So that’s when we got into batteries. And that’s another story with Puerto Rico, Maria, and all that other stuff.

Chris Hanslik: But that’s how we got into it. Great. That’s great stuff. So you built a couple of companies, Sanova being the most recent. What are some of the fundamental or foundational elements that you have tried to establish in those and maybe they’ve been different at different times but to really set the company up for success from your view like I’ve got to have these things in place in order to have the foundation for success. What is that for you?

John Berger: Well I think first and foremost You know, you’ve got to have good people. And every CEO is going to say that. But I think it really also goes down to is that if you try to go cheap on people, you’ll end up with nothing and sometimes worse than that. So I really am a big proponent of that. I will also say There’s a book that’s written out there, The Hard Thing About Hard Things, I would recommend for those of you an entrepreneur. And it really goes into detail about how you need different types of people at different stages of the company. And that’s really hard for entrepreneurs. You want to know where one of the biggest parts or reasons for failure, it’s that. And it’s difficult. It’s difficult to send somebody along their way that’s done so well for you, but they simply cannot grow with the business. And candidly, oftentimes, the top of that list is the entrepreneur. And this is what happens with private equity. Venture capital comes in. They tap you on the shoulder. How would you like to be on the board instead? And really appreciate you going to this level. We got to have somebody take it to the next level and all that kind of stuff. And so I’ve surrounded myself with mentors, with folks that basically told me what maybe I didn’t want to hear and kept pushing me to grow over a period of time. So I think the first one is people, including yourself. And the second is focus. And I’ve seen that, you know, I had that problem my first business, I learned the lessons. And it really, it sounds like, oh yeah, okay, I’ll do that. But when you get into it, you’d be amazed at how many respected entrepreneurs, investors and so forth don’t really apply that. And they start doing a lot of different things. And then what ends up happening is the third one is don’t run out of money. Great advice, right? And if you lose focus, I use it at home. Yes, I absolutely. And I would say that when you start losing focus and you put money in a lot of things, you never make money, then that’s a big reason why you’re going to fail too. So I would say those three.

Chris Hanslik: And when you talk about focus, I assume you’re talking about focus on kind of your core business, you know, and not getting into tangents or being careful about what tangents you may get into.

John Berger: And be careful about what you may even see as something that you can add later on, but maybe you shouldn’t be doing now because you hadn’t really gotten enough or perfected enough or got it built up big enough to scale your costs or whatever. So I always said snow is kind of like the southwest airlines of solar. We’re going to run back and forth between Dallas and Houston, then we’re going to add San Antonio. Someday, years down the road, it will be international. Now, we hope to compress some of that timeline, but that’s basically a lot of what we’ve done. We’ve said no, it’s a lot of exciting things. And a lot of our competitors who are no longer with us, mostly California firms and so forth, they tried to go big right away and didn’t make it.

Chris Hanslik: Easy to talk about successes, right? And you certainly had your share. Let’s talk about setbacks. I know you’ve certainly encountered those as well. What are some of the maybe one or two big setbacks that you’ve encountered along the way? And how has that shaped you maybe as a leader? And if it related to Sunova or maybe before Sunova, how did it shape what you’re doing today at Sunova?

John Berger: Yeah, I think, you know, first is the collapse of Enron did have an impact on me. You know, you can imagine going from I was on the East Power Trade Desk, it was the best company out there that many thought, certainly one of the best in the economy, you know, certainly most thought was the best in Houston. And I did pretty well there, ran, you know, an entire desk and so forth at a very young age. And then to have that collapse, and not just collapse, but collapse into a point where something on your resume went from really good to really bad. Right.

Chris Hanslik: And- Did you ever take it off your resume?

John Berger: No, you know, that’s a lot of us that work there. I saw somebody the other day, a good friend, and I noticed he had all the work experience and that was left off. Interesting. And, you know, I don’t fault anybody for that. It’s still an issue, but I think that’s much more about a lot of us have been successful. And I think it’s very unfortunate, set back the entire energy industry from change because change became a dirty word in the energy business. It’s synonymous with corruption, failure, etc. And I think some of that was overblown. I don’t know. I really never got into as far as I think the company just simply overlevered and came into a really bad time. And so a lot of that over leverage is I was convinced that the management team didn’t really understand how overlevered the company was. And so a couple of things I pull from that. One, I don’t like financial engineering. And I’ve always looked at, even when you do non-GAAP metrics, what’s intellectually honest? Don’t try to craft it to make it to where something with the analysts will like it or the public. You know, Sunova is a public company. The last one took public a little under two and a half years ago. But what’s intellectually honest? You’d be surprised. I was shocked after taking coming public. How many CEOs and management teams don’t do that? I mean, go the other way. And then leverage. And so you’ll see, you know, me focused on cash flow, long-term cash flows. We have right now as of last quarter, we obviously have more now because we’re well into the fourth quarter, but we have near $7.5 billion of contracted cash flow and $330 million a year for the next 22.4 years. And that is properly levered. and we always look at how do we de-lever the company. So that’s been a big lesson for me. The other one is that I failed, my biggest failure in my career was I tried to build a biodiesel plant in Galveston. And it failed miserably. It eventually went into bankruptcy. I wasn’t there at that time it went, but it was definitely my fault. And a lot of hubris as far as you think you can do something like that, like how hard could this be? By the way, if you hear this in the board, two sayings in a board meeting, they’d run for the hills. First is, how hard could this be? And the second is that we can just put some money out, we can make this happen, right? It’s underestimating and really not being humble as far as there’s a lot that could go wrong. And I didn’t understand that, never built a refinery before and so forth. And I failed in that. And it was really predicated on government incentives, too, that went away at the same time. So it really exacerbated the situation. So I always wanted something that it was going to become economic by itself.

Chris Hanslik: Now, those are good points, especially when you talk about the comments of the board, I think, about any time someone says, oh, it’s a layup. You’re like, no, no, no, no. There’s no layups. It’s a no-brainer. I guess the Enron situation though, you were able to learn some things that you weren’t at the top, so it didn’t burn you, but you were able to observe, and probably some of the best learning you could have gotten.

John Berger: Yeah, I think so. I mean, I learned a lot there, and this may sound weird, but I wouldn’t change it. I wouldn’t change it at all. I learned quite a lot. I met a lot of good people. They’re still friends to this day. And a lot of those friends have been very successful. And I think that, again, I think it was one of the most unfortunate events, really, that I think this city has had. And I think that there are some things to learn. I just spelled those out on the finance side and so forth. But the business itself could have done really well. I think it was on the right path. you know, some people and events got in the way.

Chris Hanslik: Right. So kind of turning back to Sunova, you know, if you can, maybe I have to believe there are a number of things you could share with us, but I want to talk about innovation. What is it that you believe that you’re doing there or have done that’s innovative? Because probably the company in and of itself could be described as innovative, right? So how do you answer that question?

John Berger: Well, I think first it’s how we’re going to market with dealers. Now, one of the other things that you never want to hear in a board meeting is it’s different this time. And it’s different technology, but it’s not different this time as far as business models and everything else. And so when you look at what we’ve done in terms of going through local contractors or our dealers, that was radical. I mean, I got the battle scars to prove it where there was a lot of folks on Wall Street, Solar City, which became part of Tesla, you know, my competitor today, Sun Run, publicly traded company, that no, this is the way you need to have those contractors on balance sheet. And I think for this crowd, my belief in the dealer model was forged by two things. One, the dealer model is dominant. in the U.S. cellular market. So, in fact, one of my board members is the largest AT&T dealer in the country. And so a lot of those stores are not AT&T-owned, because they’re not AT&T employees. By the way, that Amazon truck driver, chances are he doesn’t work for Amazon. The FedEx guy does not work for FedEx. There’s a lot of ways that you think that you’re dealing with the company, but you’re really dealing with an entrepreneur. or somebody who works directly for an entrepreneur in a small organization. The reason for that is the same reason why restaurants use franchise models and so forth is you want to harness that power of the entrepreneur. And true entrepreneurs, you can never hire them. Never. And that man or woman is who you want. And so what I figured out was being one, I was like, that’s what I want to do. And you can’t put it on a spreadsheet, and it drives the finance guys and women crazy. Because it’s like, well, we could make this money. And I’m like, no, it’s not really there. And they’re like, what are you talking about? I said, because when you get down in there and you start trying to run, 10,000, 2,000 people, like we have in our network right now, dealer network, probably 20,000 people. I can’t run 20,000 people efficiently from Houston. That’s arrogant to think that. But yet, a lot of folks out there in Coon to this day still believe they can do it. You can’t. That local entrepreneur in that area is something that really gives you a lot of competitive edge to it, even though you’re giving out a margin for it. And so that was the first innovation and now the dealer model dominates the residential solar industry. The second is, and we’re always by the way looking at how do we have software to basically make that more efficient for the dealer and then for the customer. The second one was really how do you take finance and enable it to make it easier for consumers to sign up. And what we did was, on top of that, we commoditized our own financing. So a lot of people would fail companies that say, I think leases are the way to go and loans are for idiots. And the loan guys would come in and say, loans are really the way to go and leases are the devil’s product. They’re evil. And I said, well, why do you care? It’s just a contract. You don’t understand contract. It’s just a contract. And why don’t you just put service in there that we’re supposed to serve the customer, fix the problems, deal with the billing issues. When you sell the home, transfer the contract. And whether it’s a loan or lease, it doesn’t matter. Make your make it agnostic that was a big deal. And i didn’t really appreciate it to recently what we always did we see that we also did was we put grid services which is basically the right to aggregate all these customers. And then be able to sell capacity back in the utility system like her cot and so forth that’s i think everybody knows are caught now grab your. What is the password yeah i’m sure we’ll get to that but. It, we did that in loans and nobody else has done that even since. And so it was an innovated way of going about market, looking at the world in a completely different fashion. And then now what we’re doing is we’re saying, no, we’re a wireless power company. This is a service sale, just like the utility, just like Centerpoint. and not a product sale, basically not an appliance. You go down to Best Buy or wherever it is you’re going to buy an appliance Costco, put it on your roof, doesn’t ever break and everything else. That’s not reality, but yet that’s a lot of ways that the business in terms of solar was sold and in some cases still is sold. So we looked at it as a service and said, we’re going to wrap that with service. And then we’re going to take it to the next level by giving service within 24 hours or less to customers. So we want to keep the power flowing. That’s a major step, functional change. It’s very innovative and we’ve been working down this path for a while and very basically no one else is following us at this point in time.

Chris Hanslik: So I hope that to be the case and we’ll just widen the goal for them. There you go. Well, maybe after your competitors hear this podcast, they might start following. I don’t know.

John Berger: I did give it in the earnings. Yeah, but they probably get more out of the podcast.

Chris Hanslik: The earnings report, right? Okay, so that’s, you know, fascinating stuff. The other thing that I’ve noticed obviously over the last several months, maybe a year, is your company has received award after award for the type of company it is internally. Best places to work, best places to work for women. Think you got best CEO for women or something like that. I’m not sure what that’s about. We won’t go into it here. But tell us, I mean, all that to me, you know, falls under the category of culture. You’ve been leading companies for a while, so tell us about the culture of Sunova. You know, what did you do to kind of get it going? Because it starts at the top, as we know, and it has to then go top down and be, you know, lived consistently every day. So how would you describe that culture? What did you do to get it going? And what do you do to sustain it?

John Berger: Yeah, you know, I think first and foremost, Houston is a big reason for our success, and I know the natural response, and believe me, I’ve lived it, and you know that, over the years, is being in Houston and you start a solar company, what’s wrong with you? Right. Well, how did that happen? You got laughed at a lot. You got laughed a lot. You know, one time we were, my wife and I were going to, and she was off talking to friends. And this guy came up to me and he goes, and we’re at a social function. And he goes, you are working solar, right? I said, yes. And he goes, you have four kids, right? I said, yeah. He goes, do you need a job? And I said, no, I’m good. But, you know, Houston, one of the things that really attracted me, not only just being down the road from Bryan, you know, low cost, of course, and still is, really is now, especially even if you just go down to, you know, Austin, right? We talked about that with real estate prices and everything else is going crazy. But it’s the people, again, going back to the people. This is the most diverse city in the United States. And part of our success, and I can point to it, not just talk it wax philosophical, was that this was a diverse workforce. And I remember the day when I was walking past our contact center, which was literally the end of the sides of this stage cut in half. with people sitting on stools that, of course, I got in with a sublease. And she was talking Spanish, and I recognized, I could just feel the conversation was easier. And I said, wait a minute, anybody else talk Spanish in residential solar? No. I said, we’re going to hire more of those. We hired, and then we moved into Puerto Rico and no one else would go into Puerto Rico. Why? didn’t speak Spanish. Puerto Rico is not a state, you know. And I would say that our business took off. We had a Spanish lease contract, Spanish PPA contract, and our business took off. And to this day, it is our biggest area of, one of our biggest areas is Puerto Rico. And then that’s spread across the Southwestern United States and so forth. And then we’ve had folks come in to speak Vietnamese. It’s a bunch of different ethnicities. And I have a fundamental view. And I didn’t really, frankly, I just took it for granted. I just thought everybody was like this. And now it’s become something that we all talk about in terms of diversity and so forth is I just have very much of a view of capitalism is best done when you say, hey, look, If you do a great job, I don’t care what color you are, I don’t care what God you pray to, I don’t care about where you’re from and all this other stuff and what sex you are, orientation or anything else. If you’re doing a great job, that’s awesome. And that’s what we wanted to do. And we set that up deliberately. And over the years, I’ve come to realize that’s probably somewhat unique. And so right now, and to me, it was just the right thing to do. And if you didn’t treat people with respect, you’re out of there. And this is the way we built it from the day one. And now we have only about, I want to say about 26, maybe 28% of our employee base is white. and the rest are, I think naturally now, Hispanics about to be our largest demographic base. And everybody in our contact center is bilingual. Most of the vast majority are bilingual. And so we continue to push diversity. We’ve got now a fairly diverse board. You know, I didn’t get a…you don’t get to choose when private equity comes in. Who sits on your board? I had explained that in a town hall, by the way. You know, why doesn’t the board look like us, you know, boss? And I was like, good point. Let me tell you about the golden rule. It ain’t doing to others. And now, you know, we made great strides in there. We’re making good, you know, great strides in the executive leadership team and promoting women. and minorities. We’ve had a recent addition even in our running HR. So it’s something that’s just a part of us and a part of our DNA and it goes directly, I’m just such a firm believer, diversity is one of the key reasons, it’s not the top reason that we’re successful.

Chris Hanslik: You mentioned something about Houston that I’ve said for years and that is my experience in Houston is if you will Do what you say you’re going to do, work hard, get the job done. People don’t care where you’re from or who you are. They’ll give you an opportunity. They’ll give you a chance. And it sounds like that’s been your experience.

John Berger: Absolutely. It’s a meritocracy.

Chris Hanslik: Yeah. And I will say this, you know, usually pointing one out and we’ve never had a crowd before in the podcast, but Peter Beard from Greg Houston Partnership, just love what you said about Houston, right Peter? So let’s say it’s been a challenging 18 months. I want to talk about that pandemic and I guess two things that may have been significant events for your business, the pandemic being one and then the freeze earlier this year in Houston. How have those impacted or changed things for you in Sonoma?

John Berger: Well, I think, you know, the pandemic, our lives are, all of our lives are different. And, and You know, when it first hit, I was like any other CEO. I was sitting there trying to figure out how I just, you know, keep the company out of bankruptcy and trying to pull everybody together, but you couldn’t physically pull them together. And so I went and we had But at that point in time, we thought it was unique. We were trying to figure out the Zoom thing and all that and the video calls and try to communicate, over-communicate with folks. It’s going to be fine. It’s going to be fine. We’ve got to focus. We’ve got to keep moving forward, whatever that means. And I came into the office with three people and stayed there just so people could see, in my mind, the captain doesn’t leave the ship. And so I stayed there, but everybody else had to be away, right? That was part of it. And that, I think, really helped, you know, was instrumental in us moving forward and getting the business moving again. And it picked up pretty quickly, actually. And part of it, and this is a fundamental change that’s never going to go back, is that people said, you know what, I can work from home. I call it work from anywhere. I think we all do. And you know what, because it’s an electronic medium that I’m now over, in terms of the Zoom call, the team call, whatever you’re using, I can’t have the power go out even for a few seconds. So it fundamentally changed our business. You know, there’s some generax and other equipment partner bars along with Tesla and a couple of others and several others. And the CEO there calls it home as a sanctuary. And that’s right. And it fundamentally shifted our business. and a battery sales took off even faster than it ever had before. So much to the point, we’re just now starting to see the glimpse of the end with all the supply chain problems and everything else that battery supply is even close to meeting our demand. And so it fundamentally shifted our business to much more reliability and so forth. And I would also say that we also Well, let me give you a quick story. So when I was buying the business from Lennar, I was in that first week in January, and we had three office regions, Southern California, Denver, and Miami. We do that today. And I was going in and doing due diligence and meeting with the senior employees and found it interesting. And we talked about this. The question that they asked me wasn’t, do I have a job? They didn’t ask me that. They didn’t ask me, you know, what are you going to pay me? You’re going to pay me the same, less, whatever. They said, do we have to come into the office? Right. And this is the first week of January. And I’m sitting there going, after about the second meeting of that, I said, you know what, something’s going on here. And I don’t care what Jamie Diamond says and Apple and Google, they’re all like, everybody’s, you know, get their ears back into the office. I said, no, we’re not doing that. Now is there a challenge with this? Absolutely. And it’s a challenge for the employees, a challenge for the management. I think it’s a particular challenge for the lower management, middle management of a company like ours. But what we instantly said is, all right, especially a lot of other positions like IT development, software development, you can work from anywhere. And that was a huge shot in the arm for us. And we were literally ahead of recruiting on Google, Apple, and so forth, and some of those other, Amazon, et cetera, and some of those big firms. And so that fundamentally has changed the company as well. The winter storm, I was actually closing that Lennar transaction. I said, we’re going to go ahead and do it. We had a lot of employees that didn’t have power, of course. Of course I had power. You’re on solar, right, at home? I was on solar, batteries, and I had a generator. And so I was not going down.

Chris Hanslik: As a side note, he sent a aerial picture of his house that week.

John Berger: Just to friends. I did not post that. Yeah, yeah. It was glowing, yes. And I will tell you this. The pool was heated, right? Well, it was lit. But what happened there was I lost, we were remodeling the garage apartment and so one of the pipes was exposed and so it burst. And so it was like many of us, I was out without water and I had to make this major announcement in front of the zoom cameras and all that literally a few hours later. I remember this story. And so what I did was I wanted to make sure my hair was combed and everything else. And I took, I went outside and it was I think about 10 degrees and I jumped into the pool and then combed my hair and everything else because I had power but no water. Polar plunge in Houston. Yes, polar plunge in Houston and got that done. I was looking like, as they say, never let them see you sweat. And I thought that was a big, interesting, it’s a funny story, but pushing forward and making certain, you know, making things happen. But what also a lot of us in Texas took away from this is we can’t depend on a centralized system. We need to take matters into our own hands. We need to call, like, hopefully call Sunova. I need a generator. I need a generator plus solar plus storage. And most people don’t realize they need maybe some load management there to help stretch the battery out. And then you’re getting more electric vehicles, you’re adding an EV charger. So it really crystallized our business and said, yeah, this is what we’re talking about. No, by the way, you know, we had Harvey, we had all the storms, I can’t even, tax day and all this other stuff, all the unprecedented storms are never gonna happen again. Guess what? This climate change stuff’s real. And this is going to continue to happen in really weird ways. And this system’s not built for this. And the other side of this, as I was mentioning earlier, our demands for reliability of power and energy have gone tremendously up. And the pandemic accelerated that even further. So all this crystallized into a great, essentially a business case for us and why we exist and our vision for the future of the energy business. So as bad as it was, and we certainly didn’t welcome that, it really helped, I think, really a lot of folks around town to understand what we do and why we do it and this is what the future looks like.

Chris Hanslik: That’s right. Yeah. Well, you know, lots of innovations come out of unfortunate situations. So this may be one of them as well. So try to wrap a few things up. I mean, I guess we believe that most of the listeners are the podcast. And I think a lot of people that are here are business owners, entrepreneurs, what are one or two things and you may have already hit on them before, but just to kind of summarize, if you said, look here, two or three things that if you’re out there and just started a company or thinking about it, you got to do these things. What would those be? What’s your kind of wisdom for that?

John Berger: Well, I mean, you know, we talked about it before, you know, get good people, the focus, don’t run out of money. And those are, you know, those are very, you know, the three main things to do. I think recognizing the business opportunity I don’t know quite how to, you know, I’ve been asked that a lot of times and I see a lot of other folks starting businesses up. Some make it, frankly most don’t, right? And I don’t know how to teach, like just make sure you have a good business opportunity. But you need that. You need to go out there and try to vet it, do maybe a little bit, talk to enough people, really make sure that it is a good opportunity. But the best, most important thing, never give up. persistence. I mean, there’s so many times that I can tell you all that I looked into an abyss and I couldn’t figure out how I was going to make payroll in a few days. I couldn’t figure out a problem. I even had one, you know, a couple of years ago, so forth. I literally had to get to the top of one of the largest companies in the world. And that was the only guy that was going to be able to solve this problem. And I was like, how the heck do I do that? And I actually, I did it. I pulled it off. It was some help. Another guy helped me out and got it done. It’s just keep going, plan ahead, think ahead of what could go wrong and really take action on that. And part of that is building a balance sheet, making sure you have cash in the bank and so forth because something will go wrong. I don’t know what the next bump in the macro environment is. We’ve had quite a few, haven’t we? But I just know it’s out there and it’s coming. And so you be ready for it. So I’m constantly looking at, you know, as Andy Grove said, only the paranoid survive. That’s true. Constantly looking ahead. Who’s going to eat your lunch? It’s, you know, another saying is it’s the bus that you don’t see, not the one you see that kills you. And that’s right. Constantly keep, don’t underestimate your opponents. Look ahead, figure out what’s going on and then plan for it and then push through. Because you’re always, as many of you know, your previous speakers, I can see some heads nodding, you’re always gonna have problems. It’s up to you, don’t ever quit.

Chris Hanslik: That’s great, yes, I love it. Perseverance, persistence, good qualities to have. All right, so as we wrap this up, let’s talk about some lighter stuff. Parking you back to the Brazos Valley in Bryan, Texas. What was your first job?

John Berger: Oh, let’s see, my first job was mowing a yard. Mo in the yard. Me too. That’s right. And then I started selling candy and drinks at school. It was the football team. Evidently, that was illegal.

Chris Hanslik: Coach Green would be proud of us, right? So we’re a Texas-based podcast. You’re a Texas guy. What’s your preference, Tex-Mex or barbecue?

John Berger: Man, that’s tough. I think barbecue is tough to beat, though.

Chris Hanslik: Okay. Alright. Last one. If you could take a sabbatical for a month, where would you go and what would you do?

John Berger: You know, my wife and I love to travel and we’ve taken the kids to a lot of places. We’re fortunate to take them over into Asia and to China and tour and then Europe and many other places. You know, I would say that I probably would go into Europe. And the northern countries, I’m actually headed there on Sunday. I like that area. And I think there’s a lot of promise there as far as building companies in Eastern Europe and so forth. I like there’s a lot of promise there. And I would take some time and just try to figure out that region of the world and what else I could do.

Chris Hanslik: Got it. Well, John, I can’t tell you how much I appreciate you coming on and doing this and all the wisdom you shared. So thanks again. Thanks. Thanks for having me, Chris. Appreciate it. And there we have it, another great episode. Don’t forget to check out the show notes at boyarmiller.com forward slash podcast. And you can find out more about all the ways our firm can help you at boyarmiller.com. That’s it for this episode. Have a great week and we’ll talk to you next time.