Q&A with Donnel Baird, Founder of BlocPower

Donnel Baird is the founder of BlocPower, which uses machine learning and structured finance to partner with utilities and governments to identify, finance, and upgrade building energy systems in America's Urban Core. In this Q&A with Launch With GS, Donnel shares the origin story behind the company, lessons from his community organizing background that he applies now as a business leader, and his passion for generating opportunity out of crisis.

How did you get started? What motivated you to start your company?

My family immigrated to the US in 1980, and had to start over from scratch. My dad cleaned boilers, and my mom enrolled in a teachers program at York college. We lived in Brooklyn, in a one-bedroom apartment, shared a bathroom with a neighbor, and didn’t have functioning heat in our building. During winter, we heated our apartment buy turning on the kitchen stove and leaving the oven door open. We would open the apartment windows to release carbon monoxide. So early on for me, there was this link between lack of financial resources, energy consumption and waste in buildings, and health. After I graduated from Duke I spent four years as a community organizer trying to close the gap between the rich kids I went to Duke and prep school with and the poor kids that I grew up with in my neighborhood. I’d become an environmentalist in college, and focused on racial equity. I wanted to start a business that created impact at the intersection of climate, energy waste in buildings, public health, and could create employment opportunities for poor families. That’s BlocPower.

What has been the most exciting moment of building your business? The most challenging?

Being accepted into the Launch With GS Entrepreneur Cohort was incredibly exciting, b/c I knew Goldman would help take BlocPower to the next level. Reviewing the financial returns from our first pilot project (61% IRR!) was also very exciting because it meant we could build a giant profitable business. An early tough call that I had to make happened when I was wrapping up business school at Columbia. I’d applied to win a contract from the US Department of Energy, and they had invited me to the White House to defend my proposal to launch BlocPower. Going to D.C. meant that I would miss a final exam at Columbia. The professor said he would fail me if I missed the exam, which meant I wouldn’t have enough credits to graduate from Columbia with my class. I rolled the dice, went down to the White House, and won the proposal for 2.1mm of seed capital. I don’t have much access to friends and family capital, so that’s how we launched BlocPower. Mitch Kapor and Ben Horowitz leading our first VC financing was also huge for us.

Who are the people in your life that have been critical to your success?

My wife is the single most important driver in my success. She shifted me from politics into entrepreneurship, by encouraging me to go to business school instead of law school (we didn’t think I would make it through law school). She and my son have helped me to develop and grow personally, in terms of patience, and communication, and professionally, in terms of being early to the idea that you could build a giant business that has social and environmental impact. She worked hard for several years to support our family while I was getting the company off of the ground. Mitch Kapor and Freada Kapor Klein have been incredibly important to BlocPower’s success, believing in the business earlier than everyone else, helping us to find staff, and coming up with a plan to help me level up as a CEO.

What are you most excited about over the next 6-12 months?

We are going to demonstrate that America can address the economic crises, public health crises, racial justice crises, and climate crises simultaneously, by training low income people of color to move 500 apartment buildings off of fossil fuels and entirely onto green energy in the Bronx. The new equipment that we install in the buildings will reduce greenhouse gas emissions, reduce asthma rates, reduce the likelihood that the buildings air systems will spread COVID-19, and improve the profitability and value of each building. BlocPower will demonstrate that tech enabled distributed smart green infrastructure investment is the way out of the mess that our country is in.

What is the best piece of advice you ever received?  

Ben Horowitz’s “One Management Concept”: When making a critical decision, you must understand how it will be interpreted from each person’s point of view, and its impact on the union of individual views, i.e. culture. I’ve screwed a lot of things up as CEO, but trying to adhere to this rule helped to save my company when times are tough. In some ways it’s a managerial articulation of the value of empathy in driving great performance and culture in a team.

What has the Launch With GS Entrepreneur Cohort experience been like for you?

The Launch With GS Cohort is amazing—we’ve covered everything from whether boards are the natural predators of CEOs to VC fundraising in the pandemic to how Beyonce’s business strategy is remaking the media landscape. The other founders are amazing. The advisors and investors are amazing. The Goldman team is amazing.

Building a successful company does not happen overnight, walk us through your journey.

We spent two years building an algorithm to collapse engineering costs by 90%, another two years developing a software platform to automate that, which had 200% year over year growth. Then we spent another 18 months slowing down growth, working with the Goldman Sachs Urban Investing team to think through how to develop a new asset class, and how to launch a SaaS tool for clean energy in underserved markets—a $1.2 trillion market with very few competitors. It’s been a slog, particularly with our limited access to capital. But now that the full platform is built, we are ready to reenter rapid growth mode.

What’s the advice you’d give to your younger self that you wish you knew then?

Figure out machine learning!

What’s your leadership philosophy?

One Management Rule! I swear by Ben Horowitz’s two books, The Hard Thing about Hard Things, which I read once a year, and What You Do is Who You Are. He’s been great at helping me to understand some of the deeper implications of leadership opportunities. I also swear by a lot of lessons from the community organizing world via some of the trainings I’ve gotten from Metro IAF, which Barack Obama told me was the most valuable education he’d ever received. Speaking for myself, the community organizing leadership trainings and lessons dwarfed any leadership lessons I picked up in business school. All due respect to CBS.

What is your prediction for what the new normal will look like post-COVID?

Post Crises, I think the question won’t just be “How do you make a billion dollars”, but how do you leverage the social and environmental impact macrotrends happening among consumers, ESG investors, and others to answer the question: How do you make a billion dollars while driving social and environmental impact? Avoiding the climate crises is going to be a huge wealth generation opportunity.