Kathy Hannun: Founder & President of Dandelion Energy – Ep. 138

About Kathy Hannun & Dandelion Energy:

Kathy Hannun is the co-founder and president of Dandelion Energy, offering affordable home geothermal energy solutions.

We spend so much money heating and cooling our homes, and in a time of uncertainty surrounding natural gas and oil availability, getting off of fossil fuels in our homes has never been more important. 

Kathy left her job working at Alphabet’s prestigious X Lab to start her company, and they’ve raised over $130 million to date for the project. By homes switching to residential geothermal—heating and cooling their home using the earth below them—they can reduce their CO2 output by as much as 80% while cutting their energy costs in half. It’s a huge win-win.

Kathy’s been named to MIT Technology Review’s 35 Under 35, she’s a TED fellow, and the recipient of the C3E Award from the US Department of energy. In short, it’s an honor to have Kathy Hannun with us today.

Full Unedited Audio Conversation:

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4:17 – “I would say working at an Alphabet is maybe the opposite of working at a startup, and so in some ways I was completely unprepared by that experience. But the things that I took from it, I mean, certainly just like learning about frameworks for evaluating ideas, hopefully rapidly though untimed, and becoming more comfortable, just getting to know a new technology or a new problem space fairly quickly. Understanding the pitfalls, right? I had a first-row seat to why some of those ideas didn’t end up working, which was good training. So I think all of those things are very helpful and it just put me in the mindset of somebody who could evaluate new business opportunities.”

The Next Big Thing: Drop Box For Hotdogs

*6:12 – (Kathy): “There are some ideas where you like learn about it for one hour and you understand why it’s never going to happen. There are some ideas–”

(Ross): “–Like my Dropbox for Hot Dogs idea.” 

(Kathy): “Yeah! Or just something that violates some fundamental law of physics or just it’s clear you just could never make money doing it. Maybe it’s an idea that could be good, but the policy landscape just won’t allow for it. Like nuclear power. I mean, not to say, I hope nuclear power succeeds brilliantly. I’m a big fan of it, but that’s an example of an idea where your technology path could be incredibly well thought out, and it still will just be hard because of policy constraints. And that style of idea was less attractive to Alphabet.”

10:03 – “And then the decision to leave and found the company was a very difficult decision because I had no idea how to do that at all. And the counter option of just like ‘come up with another idea,’ wasn’t terrible, right? Like X is a pretty nice place to work. I liked my job. It was very comfortable for me. It was way less likely to end in disaster, right? But yeah, ultimately, of course, what happened was I did make the decision to leave and did get X’s support and I feel like it was the right thing for me and for X, so it ended up working out.” 


Dandelion Harvests Renewable Thermal Energy From The Ground To Heat Your Home! 

*16:56 – “Dandelion is a home, geothermal heating and cooling startup. And what we do is we replace homeowners furnaces and boilers, which are often fueled by natural gas, propane or fuel oil. We can take them out entirely and install a geothermal heat pump, which is an electrically powered device that harvests renewable thermal energy from the ground to heat the home and cool the home. So it’s actually not a new technology; it’s been around for a long time. But no one in the U.S. has really figured out how to package it and sell it to just typical homeowners in such a way that makes it affordable and simple for them. And that’s really the premise of Dandelion – we are making it less expensive for homeowners to heat with geothermal and cool with geothermal than using fossil fuels.” 

Can Everyone Access Geothermal Energy? 

*17:48 – (Ross): “Well, that’s you know, if I may, that’s very easy to say. I mean, of course, in the Bay Area and the liberal leftist elite area, you can use things like geothermal energy to heat your home. But what about the people in the rest of America or the rest of the world who don’t have access to geothermal energy?” 

(Kathy): “I’m glad you asked, because that is a misconception about geothermal energy. It’s confusing because the word ‘geothermal’ is overloaded. It’s just used to describe electricity that you make from like hot underground Pacific Rim, like magma, essentially. That’s not what we’re doing.” 

(Ross): “Magma. Molten lava. Tapping straight into a volcano.”

(Kathy): “Right? Not our type. So our type of geothermal just uses the ground anywhere. So actually, Dandelion doesn’t even serve the Bay Area. We are based on the East Coast and we serve the Northeast today. And you don’t need any special geological features to do it. You can just like put a pipe, a simple plastic pipe down into your yard and you’re just using sort of the thermal inertia of the ground. The fact that, like the ground is always the same temperature to heat and cool your home. So very different.” 

(Ross): “I was being facetious. I’m sorry…”

(Kathy): “Well, it’s something that a lot of people–.” 

(Ross): “–What if you don’t have access to the ground! You know, that’s – we’ve got to think about those people.”

22:07 – “Because the system is so efficient, you only need 20–25% of the total energy used for heating and cooling to come from electricity. 75–80% is coming just from the ground. It’s renewable thermal energy. So it’s just very cost effective and efficient because of that.” 

Sourcing Strategies From Sweden

*22:29 – (Ross): “Do you think that a good business strategy in general is just to look at what Sweden is doing now and just make that, just generally? I feel like they’re always 50 years ahead of whatever we’re doing in this country. Always Sweden.”

(Kathy): “You know, I have to say that has worked really well for me so far. That strategy.”

(Ross): “Just, you know, maybe we should install some trains or free high-speed Internet. Maybe the cities should be clean, maybe the drinking water, maybe the lakes should all be potable.” 

(Kathy): “Sounds good to me!”

(Ross): “These are some ideas that we could learn from Stockholm. Yeah, I know. It’s like a paradise there. They are so far ahead. I love Sweden so much. It’s such a great place to be.” 

30:10 – “At Alphabet, which we were not at when we piloted, but if we had been, the money was trivial from their perspective, like the amount that we ended up needing, but like drilling holes in homeowner’s yards and putting heating and cooling systems in, that would be sensitive. Just because there’s risk – brand risk, reputational risk, legal risk, like a lot of those risks that as a startup are okay would be much, much more sensitive at a big company with such global reach as Alphabet. So it’s just like the types of things you’re solving for are totally different. And that was disorienting to me.” 

31:52 – “I think one of the biggest achievements that I’ve had is just, creating a company, going after a problem I care about, and getting such talented people to want to do it. It’s like attracting talented people to actually try to make your concept real. It’s like you couldn’t do anything more helpful to actually making it real. And so that’s been really great. Probably one of the most rewarding parts of the experience. But I would say, even though I’m so happy with how far we’ve gotten in the past five and a half years, I think – yeah, when you look at the size of the problem, just like the greenhouse gas emissions coming from homes and how much heating fuels are still used in this country, we’ve done almost nothing. You know, it’s like both of those things are true. We’ve done so much. And yet, compared to the total problem, it basically rounds down to zero. But that’s like what you get when you try to go after such a big problem.” 

33:17 – (Ross) “That’s one of the main reasons that I do this show, and where my interest lies is that intersection between what we can do and the problems left to solve. And when we look at the scale of these problems, it’s so daunting and so massive. It feels impossible to solve these issues. But yet we know that we can ‘make a dent in the universe,’ to borrow a quote from Steve Jobs.” 

33:51 – “I used to feel, I don’t know, a vague sense of unease about the fact that I wasn’t sure the way I was spending my time, day to day, at least in my career, right? Like, did it matter? Would it actually make any difference to almost anyone? It was very unclear to me. And probably the answer felt more like no than like yes, if I’m going to be honest. And now it’s like the great thing about working on a problem so big that it’s almost impossible, right, for any one person or organization to even come close to solving it within a lifetime – it’s just I know it matters, right? I have no doubt that my work and my contribution is meaningful, even though the scale of the problem is so big.”

34:48 – “One of the things I learned at X actually is I’m not convinced that trying to solve a small problem is necessarily easier than trying to solve a hard problem. Like I think changing anything is typically quite hard. And at least if you’re going after the big problem, it’s easier to attract better resources, right? Like you couldn’t get like as much money or as talented people or as much like, I don’t know, it’s harder to get the momentum, I think, when you’re not going after something big and that that just has made me convinced like why not just choose the big thing? There’s no reason not to.” 


Trying And Failing Is Better Than Not Trying At All

*36:10 – (Ross) “I can’t shake the feeling that as big as these problems are, it’s just more noble, it’s better, to try to solve them. It’s better to have a crack at it and even potentially fail than to not try at all. Certainly, if you see the scale of these problems, I think the only thing that makes sense is to try and solve it. So I just hope that more people take your approach and try to tackle some of these big problems and realize that it’s not just being a hippie and forsaking all material possessions, that there is another path where you can actively try to solve these problems and raise money doing that and get other people to do it. And so it’s not like this ascetic life or going pure capitalism – I’m going to dump as much plastic into the ocean as humanly possible. There is a third way, and I think that way is the one I’m most interested in.” 

37:18 – “Failure can have different qualities. It’s hard to use just one word, right? I do think that, let’s say you’re a scientist trying to understand if a certain method will potentially cure cancer. Just to try to, I don’t know, random example, but like if you’re a really good scientist and you designed an experiment to test this method, and it turns out you prove that the method does not help, well you’ve still elucidated something about the nature of the problem that could be helpful, even though you’ve failed to cure cancer with that one experiment. And I kind of think that this work has some similarities where if you’re taking a thoughtful approach, where you’re spending resources wisely and being strategic, even if it doesn’t work, you’ve learned something and maybe contributed some knowledge against the problem. It’s not like there’s no value in that, right? I think that the bad type of failure is when, if you go about it in a totally unhelpful way. And so everyone’s worse off, right? Of course, you don’t want to do that in any aspect of your life.” 

38:31 – (Ross) “What you’ve already been able to achieve is not insignificant because I think something like 400,000 metric tons of CO2 have been offset from your efforts. People’s home energy bills are reduced by 50%. Homes that implement your system, 80% less carbon emissions. So the reason for doing this is very clear.”

Are we too used to ease?

*43:36 – (Ross) “Well, that ease and meaningfulness, two opposites, that might right there be the reason that more people don’t attempt to tackle these giant problems. If Amazon has taught us anything, it’s that the vast majority of humanity will choose ease every time. Why do something that takes me five more minutes when I can click one button and have something? I mean, Amazon’s entire business model is predicated on the idea that ease is the only thing the customer cares about. How can we make it faster, simpler, less effort? In fact, I don’t even want to get up and go touch my computer to order that thing. I’ll say, ‘Hey, Alexa, order me some more beer,’ and then it’ll show up automatically, right? So the ease, the less friction, the better. But what we’re describing here is a willful choosing of taking friction, of taking difficult things onto one’s shoulders.” 

48:20 – “I knew almost on a like, rational basis that was less emotional, that I wanted to be the type of person that would leave an Alphabet to pursue a dream that I had, given that I had done all this analysis and believed so strongly it was a good idea. It was like this opportunity is exactly the type of opportunity that I want to be the type of person who would pursue. I knew I wanted to be that person even if I emotionally felt terrified to do it. And it was just that I realized, like, if I don’t do it, I’ll just feel regret. I just knew I would feel regret. So I was like, ‘Okay, I guess I’m going to do it.’” 

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