Unlocking the Future of Energy: A Conversation with Basis
Solving energy problems never just solves energy problems.
Good morning startup land and Happy Friday!
We made it through another week. In lieu of a throw forward to what’s coming up on Caffeine next week, help yourself to a beefy interview with Basis co-founder Danny Purcell. You guys know I love geeking out about energy and was great to have a chat with someone who not only knows a lot more than me about the energy market but is making moves to solve some of its key issues.
As always, keep your stories, subs and updates coming. Got a press release, startup story, resource or founder you’d love to connect with the Caffeine audience? Drop me a line to finn@caffeinedaily.co
Finn and the Caffeine team
Unlocking the Future of Energy: A Conversation with Basis co-founder Danny Purcell
The great electrification of everything is underway and with energy being upstream of almost every other area in our economy, solving energy problems never just solves energy problems. Or put another way, energy problems are everything problems.
From deeptech nuclear fusion to the frontier of A.I - efficient access to power is both the key to unlocking a new future or the barrier keeping us from reaching it. And solving issues which seem small in the grand sweep of tech history are actually what could scale to address the great problems of our time.
That’s why I was so excited to sit down with Danny Purcell, co-founder of Basis, a company aiming to revolutionize the electrical panel, to discuss their innovative approach, the founding story, and their ambitious vision for a more efficient and affordable energy future.
Answers have been edited for length and clarity
Could you share a bit about Basis's founding story? If there was a "light bulb moment", if you’ll excuse the energy pun, what was it?
My background in investments, working for ACC and their investments team. I was investing in regulated utilities and technology companies and was involved in some of the IPOs of retailers in New South. So I had a really good understanding of that world, but also the challenges faced through electrification. We looked at investing in metering companies, solar businesses, and so the world is awash with opportunity there, and that changing landscape. When you rewrite an entire industry, besides the energy industry, it creates tremendous amounts of opportunity and problems and new solutions that require addressing.
One of those really important challenges and problems to address is the volatility on the demand side and how to actually manage the demand side. Because if you can't manage the proliferation of energy use and the changing profiles, you have to build a lot more generation and a lot more infrastructure than you probably need to. And those will cost trillions of dollars for humanity. So the only way that you can do that is if you have the data and the control to manage those networks properly. So I had all of that contextual understanding.
My co-founder, he's an electrician, and our light bulb moment was talking about this theme. He had a different problem from the same electrification challenges: the panels that go in our house are becoming more complex to design and install, and they're becoming more expensive for customers. And it's driven by electrification, and it's also driven by changes in safety standards that just become more rigorous over time. So he had that problem. There's also new build construction where everything's prefabricated, and electrical panels are going backward. So he was a bit frustrated about that.
He showed me a picture of a panel that's installed today, and I saw smart meters and how they're integrated into an enclosure. And that was the light bulb moment where I went, "Holy, if you can solve the electrician's problems, can you integrate the technologies that everyone else needs?" And then I would say it took us probably about a year to figure out if we could do that or not, technically. And the technical challenges aren't so much about "is it possible to do?" It's possible to do. It's "can you do it cost-effectively?" So that's where a lot of innovation and the time to get it right come from, because you need to be able to make a product that's cheap to sell. And if you can't achieve something that's going to be cheap at levels of production, you just don't really have a business.
So that was the challenge that we worked through: how do you make the system affordable? How do you make it easy to install? How do you make electricians love it? And I think as we've gone through time, the product has become far more valuable for customers than we originally envisioned. And I think that's been one of the most positive learnings. We aimed to solve an industry problem by leveraging electricians. But in order to deliver a seamless system for electricians, you have to build all these features that are valuable for customers. They reduce your risk of fire. They improve your risk of execution. They help lower your electricity costs. And it's that bit in the middle—the customer being really important in the outcomes here—that's where the real kind of explosion in how cool this product and how impactful it can be has become pronounced.
It sounds like a product that beautifully integrates solutions vertically—solving problems for customers, then for trades and the industry, and ultimately, if widely adopted, impacting energy issues at a broader societal level. Is that an accurate understanding?
You're absolutely right. Energy is the lifeblood of everything, right? It moves through all the devices we use. And we have been in discussions with a really random range of people that want to access this information to improve their own products for customers. I won't name names, but they're very big organizations. A big appliance manufacturer wants to improve or learn about the diagnostic information of devices from the field. We're measuring every circuit or appliance 80,000 times a second. So the level of insight we have is unmatched. We have one of the largest insurance companies in New Zealand looking at how they can use the features around safety prevention to lower premiums, but also how they can use the data to help support claims and actually better serve their customers in that world.
Without going into real detail there, the signals that we create in our own homes have a profound ability to help us lower our costs, not just energy, but insurance more broadly. And that kind of will be the next phase. It's just to figure out how we can keep exposing these things and provide them up the stack to industry so that they can create better products and services that ultimately are cheaper for customers.
The core product offering is currently focused on the individual consumer in the home. To what extent can this solution apply across other sectors outside the home? For example, could I track and measure the same level of detail around consumption in a warehouse or a larger structure? How far out of the home is this technology applicable?
Yes, it scales completely into any building in the world. That's our ambition: to have a product for every building in the world. The challenge is resources. Every building in the world consumes different levels of power. So most homes are on 60 to 100 amp feeds, which is what our current product is designed for. But the underlying technologies that detect faults and provide insights, they can be scaled up to hundreds, if not thousands of amps. So it's more about how much resource you have in order to build the portfolio of products so that you can serve all the different buildings.
Maybe a really good example is if you're selling to a shopping mall, the primary feed into their shopping mall might be like 800 amps or maybe even higher, like it could be really, really large. It might be thousands of amps. But the individual shops would have exactly the same panel that a residential home would have in terms of size. And so its application could be used in commercial buildings immediately. It just wouldn't be able to be used for the whole building's energy needs yet. We just need to build that product out. But that's the long-term goal: to have a version of this that'll work in any building. I would say the narrative that we push is there should be an option to have a smart panel for every single building in the world.
It seems like something like this for a data center could be quite transformative. Could that technology intersect with emerging tech?
100%. Yeah. The ability to control the flow of electricity within data centers is really important. But actually, what's more important in those environments is not so much about energy savings and energy use. It's more about having a remote connection to the panel to do service and maintenance. So the value of the features actually shifts when you move into different building types. And so if you have a commercial building, they will be much more caring about what is the current temperature that's feeding through the circuit. Like, "I don't want to have to pay a diagnostic person to come and do that for me every year. I can just see that in real time." Or, "My machinery is leaking current, and I need to pull that out, or its waveforms are becoming distorted, and it’s going to break down, like, I can see that. But those value propositions are far less… like, customers don't care as much about that. They probably care more about, like, "I don't want my child to suffer as much from the dangers of electric shock," or "I'm sick of my kid leaving their lights on; I want to know how much I should charge them." Yes, or, you know, your relationship with energy and electricity, every single person from every walk of life will have some kind of value proposition from improving that relationship.
And the weird one, I think, is something that we don't understand and take for granted because it's not exposed: it's the safety one. And you have core, hardcore safety benefits, like electrocution, electrical fire. These are big, scary things. They very infrequently happen, but if they do, they're disastrous, loss of life, loss of property. But there's actually other safety elements, like just the peace of mind of knowing that you didn't leave the oven on once you've left the home. That's really important, but it's a and that peace of mind and that use case is built off the same signals that you would use to learn how much you consume on your oven generally to save money.
Or your hot water cylinder might be another example where you use a controller to turn it on and off. So it's just replicating that feature directly from an app and central to the panel. And then as we evolve that digital offering, full integration with inverters and battery systems and maybe charging to start automating them, simplifies that experience for customers, so you really just have to engage with one app. And then finally, pulling all of the electrical health profiles through so you have a one-stop shop to understand the electrical health of your home. And then electricians also have access to that same set of profiles so that they can start being an energy consultant for you and help make your own safer and help save money more.
How do you see the integration or the utility of emerging AI models with your product, leveraging the data everyone is already producing? And what are some of the maybe second-order effects or use cases that come from having a system which can process all that data?
First of all, you need really good proprietary datasets to deliver value beyond what the market can provide. And at its core, that's what the smart panel does. It collects and pulls and passes through high-frequency streams of data across current, voltage, temperature, residual current. Then once those signals are ingested, cleaned, then you can start layering models on top of them. I'll give you an example of use cases. You might have a general power circuit in your house. There might be a TV, a PlayStation, a fridge, all sorts of stuff on that. Each one of those appliances will turn on and off at different times. When you're measuring at 20,000 times a second, it delivers a unique energy profile; it's a signature.
And so you can use AI, machine learning – it's more of a machine learning job, to be honest – to rip those signatures apart and then tell you with extreme accuracy how much your PlayStation costs you to idle. And so, "turn it off at the wall if you want to save $83 a year." So I would say probably a lot of these signal processing challenges can be done with machine learning. But once you've pulled them up, then you can use LLMs and AI, like conceptual AI frameworks, to engage with that information. And it's the ability to leverage that in the user experience in a way that no one else can because they don't have the data, and they don't have the models that understand how it all comes together. So that's how AI will be used here: pushing it really hard into user experience so that customers get the answers they need really, really fast. And I think, a goal of ours should be that nearly everything goes back on autopilot. I like the fact that you just have to flick a light switch and electricity works. I like that, and I would like the next stage of that to be that everything is taken care of for me, and I know that I've got these machines and these models optimizing for cost, or goal-seeking towards something to make things cheaper, or whatever the goal is that they're setting out to do.
So, as this digital offering ramps up, there will be an "electric AI concierge" looking after things, taking the mental load off the consumer. Will this also scale up through the system, leading to a vastly improved electrical infrastructure grid across the country?
You have honestly hit the nail on the head here. This is something I firmly believe. I don't think you can solve the challenges of electrification at the network level down, because there are challenges on individual streets and that type of thing that you can only address by being in the streets. And if the nodes all work together effectively, you can scale that up really, really well. And, yeah, you can see a really harmonized electricity system that's balancing supply and demand perfectly. I mean, it's a bit of a utopia, but if it exists, and you can balance supply and demand, then you can flatten prices. And that's when all customers, whether they've got a smart panel or not, that's when everyone – marginal cost equals average cost in economic theory – it just becomes cheaper, and everyone wins. And that would be us definitely fulfilling our mission. But that's a long way away.
What is the North Star for Basis and how do you measure your progress towards that goal?
Our mission is to make energy less expensive and affordable for everyone. That's the mission, and we measure that by the cents per kilowatt hour that customers pay.