Friday, November 15, 2013
Interview with Christian Okonsky, KLD Energy
For our profile today, we're running an interview we recently conducted with Christian Okonsky, CEO of Austin's KLD Energy (www.kldenergy.com), which is developing electric drive systems for the electric motorcycle, car, and other industries. The company has recently been showing off its first, shipping product, the oneDrive, which the company says provides a big advance on existing electric drivetrains.
What is KLD Energy?
Christian Okonsky: I founded the company in August of 2007, with my own money. In August of 2008, I went and raised our first funding for the company. Interestingly enough, you may or may not know this, but the Emerging Technology Fund put $2.8M into KLD Energy. That's a strong Texas connection. All of our investment, to date, has been primarily through angel investment, with the exception of the ETF. Another of our investors, Daylight Partners, is a group of ex-Dell angel investors.
What we do, is we develop motor system technology, including motors, motor controllers, and batteries. Fifty percent of the world's energy is consumed by electric motors, which is our potential marketplace. We don't make two wheel or four wheel electric vehicles, or elevator systems, but we do build the propulsion systems that drive those applications. Our first product was a two wheeled vehicle--a motorcycle, if you will--and we've just started into four wheel vehicles. In October of this year, we started shipping our product in volume. Our product is the OneDrive, which we finally certified in August of this year. This year will be our first real revenue year.
What's the story behind the company?
Christian Okonsky: I was one of the six engineers who started the notebook divisoin at Dell 24 years ago. I worked for Dave Lunsford, the sixth employee at Dell. To make a long story short, after Dell, I was a consultant for some startup firms, and at the time ran into an inventor named Ray Caamano who was the motor scientist. He'd recently patented some new technology for that motor, but had never built one. I built a lot of stuff in my time, and after many different projects, hundreds, if not thousands of products, and kids, I wanted to do something that made a difference. After I came across this technology of Ray's, a high efficiency, low inductance motor, I realized that if we could actually increase system efficiency by just 10 percent, we could realize $100 billion in energy cost savings. I sat down with Ray, and talked about how we could do something that could make that kind of a difference. So, we started the process. I named the company after my three oldest kids at the time--Kyle, Luke, and Dean. My other son, Mark, came along after the company formed. We sat down to create a product with a very large range of applications, to see what kind of interest there would be in the marketplace.
What's happened, is our system is very efficient because we do a system, which includes motor, controller, and battery. If you imagine pedaling a bicycle in the wrong gear, no energy will come out of the system. You have to know if your controller is too hot, too cold, or if the state of charge of your battery is not ideal for regeneration. We know all of that, because we do the entire system. That turnkey system is a big thing for us. We've seen a tremendous amount of interest around the world because of the turnkey system, from Turkey, Pakistan, Brazil, and Europe. Those customers have told us that efficiency is nice and great, but they really want to be able to come to one company with a turnkey solution, with one warranty, and one technology.
What kind of challenges did you run into getting this technology to market?
Christian Okonsky: That's a really good question.When we started the company in August of 2008, we realized that we were not just going to be a motor company, because we realized the system is much more important than just the motor. We realized that in the first few weeks. We figured out that we had to do system technology. As you go along, as you imagine, you run into areas and things that just don't work. An example is, two years ago, we were looking at battery technology. We were looking at manufacturers like A123, K2, Panasonic, and Samsung. We don't do chemistry. We provide battery management, but we don't make the cell itself. Samsung came to me, and I asked them to use them as the primary battery source. We made a conscious decision to do that. What that meant, is we pushed revenue to redesign our systems based on the chemistry that Samsung have, because of safety. Bar none, they have the safest batteries in the industry, because of their chemistry. That may not have seemed a big deal at the time, but it's a really important that the product in the marketplace is extremely high quality, and safe. Now, you can see what has happened with A123, and with the 787, and you can see that any failure, no matter how big or small, is a big issue. We made that conscious decision to change over our battery management system to Samsung's chemistry. In hindsight, and after the A123 and 787 issues, it makes the decision look brilliant, but we really just made that decision based on common sense as safety. That's important as a young company. That was actually and eighteen month hit on our revenue.
What's your strategy in taking your technology to market, given the wide possible applications for it?
Christian Okonsky: We got a call a month ago from someone in the backyard lawnmower business. But, in reality, we can't go after all of those areas. There's things like grid energy storage, electric vehicles, consumer products. What we decided to do, is focus on one system, for one area or application, starting with two wheeled vehicles. There's lots of reasons we did that. Last year, there were 14 million two wheeled vehicles sold. It's a big market. However, the infrastructure required for two wheel vehicles is substantially less than other applications. If you've got a four wheel, on-road passenger vehicle, there are crash tests and all of the associated hurdles. With two wheel vehicles, there's no crash test, and the infrastructure involves is much smaller. That's why we decided to do that first.
However, right after that, we developed our motor for a four wheel vehicle. It's actually the exact same motor in the four wheel vehicle, just scaled up. You use more batteries in parallel, and use two motors to drive the vehicle. It's the exact same motor with some software differences. It's the exact same motor for elevators. That said, there are some huge markets out there, and we are getting calls all the time. We will get into those as we get deeper into revenue, or have some other event that allows us to go into that area.
What's your next big hurdle?
The next big hurdle for us, is we're expanding into four wheeled vehicles. We're working with a lot of big players that we can't announced, but we'll be announcing many in the next 6-12 months. We don't compete with four wheel manufacturers, our hope is to sell to all of them someday. So our next hurdle and step is to get more four wheel application customers.