Stepchange

Out now!

We’re a proud presenting sponsor of this episode of @stepchange_vc! 🔌 @ben8128 and @anayshah deliver a must-listen deep dive on the history of the power grid. At 3:16:32: How vertical integration can help solve the AI demand shock. 🎧 Listen: stepchange.show/grid #aiinfrastructure

This is Samuel Insull. He is arguably the most consequential figure in the story of the American grid, and the man behind what we believe is one of the most important business model innovations of the last hundred years. Before Insull, electricity was a luxury product. He didn't invent the transformer or the light bulb, but he invented the business model of the utility industry. He realized that the key to this business was to spread the high infrastructure costs across as many customers as possible and to think of time as a key tool in generating load. When he took over Chicago Edison in 1892, its central plant ran at 5.5% percent of capacity. He went hunting for customers whose demand peaked at different hours and assembled a portfolio that kept the plant working through the day and night: a textile mill on the day shift, a streetcar at the commute, a tenement and a vaudeville theater after dark, a hospital around the clock, an ice plant 24/7. By 1910, his load factor was above 50%, rates had fallen by ninety percent, and the customer base had grown 40x. The same exact flywheel would later be the key Bezos insight for the cloud business and echos to today's AI infra race. Insull died in a Paris Metro station with $.04 in his pocket and a reputation in shambles.

The Grid: The Largest Machine Ever Built - now live in all podcast apps! stepchange.show/grid The grid powers everything around you. And it is in crisis. We cannot build AI, decarbonize our economy, or deliver affordable electricity if we don’t rebuild. And yet, the largest machine humankind has ever made is a miracle. For nearly a century, electricity got cheaper every decade and the grid became so reliable that we stopped thinking about it altogether. This machine was not designed; it accumulated through a century and a half of decisions with unforeseen consequences. And now we are demanding that this aging, fragmented system grow faster than it has in generations. To understand the struggle and opportunity of this moment, we have to understand how the grid came to be. It is an epic story of inventors and electrocutions, of a man who brought power to the masses and then lost everything, of an America that built massive new industries to win wars, of regulatory ambition and regulatory failure, of catastrophic blackouts, and of a trillion-dollar energy transition we are living through right now. Thank you to @CrusoeAI, our presenting sponsor. This is the fourth episode of @stepchange_vc where we explore the technologies and systems that have transformed human civilization. Hosted by me and @anayshah.