Ben: All right. Very excited to be here with Mike Grubbs from Safire. This is a special moment for us at FedTech that this is our first in person podcast recording. Mike is literally sitting across the table from me. I can see his smiling face. This is nice. We always love our virtual world, but in person is awfully good too. So, hey Mike. Where are you coming in from today?
Mike: Yeah. Fairfax. Thanks for having me and glad to be here in person.
Ben: Yeah. I was just mentioning even before we got going that heard a lot of good things about Safire. I heard a lot of good things about you personally. Maybe tell us Mike’s story. Like what's been your journey going through one of our programs to start a company?
Mike: I have a unique journey. Unique as in- there's probably not another person on the planet that has my journey. I started out in engineering school, and then went to work on Capitol Hill and ended up going to law school after that and coming back to DC working as a full-time attorney.
Ben: Okay, so we're hitting where we got engineering. We got policy. We got law.
Mike: Yeah, just wait. Then it gets a little more unique after that. After law, I went into full-time ministry for a decade both here in Northern Virginia and down in central Virginia. And then in 2016, made the shift back out into the marketplace becoming an entrepreneur. I ended up running a Technology Accelerator in Cincinnati. They moved back to DC and started coaching.
Ben: What was the accelerator?
Mike: It's called Ocean Accelerator. High-tech accelerator connected with people who want to run businesses using biblical principles. It’s what kind of their thing is and that really connected with my story. And then came back to DC after that, did some coaching, mentoring, advising with startups here in the DC area. And then in February 2020, I came across...
Ben: Okay. Well, we're happy we found you on the as part of a long and interesting journey. And are you an Ohio person originally?
Mike: No, I'm originally from Mississippi.
Ben: Okay, I'm a Clevelander so this Cincinnati connection is interesting. Well, give us an overview. So obviously, the company has had some really cool things happen recently. Maybe just start a little bit. Like what's the what's the product? I know this is a timely and important product based on a lot of the devices that we are plugged into. I'll leave it to you. Yeah, just tell us a little bit about it.
Mike: Yeah, thanks. As a company, Safire Technology Group, we are developing better lithium-ion batteries. Our core product, which is called Safire is an acronym. It stands for Safe Impact Resistant Electrolyte. Our core product Safire has three main benefits.
Number one is it prevents fire an explosion of the battery during a crash or impact situations such as an EV crash. Number two is Safire imparts ballistic protection at the cell level. For example, it will impart some structural fortification to the battery at the cell level.
Ben: And what does that mean?
Mike: Yeah, happy to get into that. For example, ballistic protection. It'll stop a bullet at the cell level. And then there's some interesting applications which we can get into to incorporate the battery as part of a structural element or structural fortified element of an electric vehicle, for example.
And then the third main benefit of the Safire technology is that it improves the thermal performance of the battery in extreme hot and extreme cold environments. Our value proposition out into the marketplace is threefold. One- improved performance, number two- lower cost of the system, and number three- improved safety.
Ben: I recall hearing stories about lithium and when they do have problems. For folks that are unaware of the battery market, what's the risk around lithium-ion batteries? They could hypothetically exist without your product.
Mike: Yeah. Well, they exist out in the marketplace, and I've seen new stories of exploding vehicles when they're involved in a crash. Our advisor has some personal experience with some of these events happening. It's out there in the news that these EVs, specifically the batteries that were involved in a crash or an impact, have a likelihood of going through what scientists call thermal runaway, which is exactly what it sounds. That the battery heats up and then it keeps heating up faster and faster and faster before it catches fire or can explode in certain situations.
Ben: This is obviously on lithium batteries. They're everywhere, right? They’re not just in our cars. They are in a lot of our devices, I imagine?
Mike: Yeah, they are in a lot of the devices. They're in the phones and all sorts of stuff. Electric vehicles. There are things called EV tolls, which stands for electric vertical takeoff and landing, which is a type of aircraft. They're in consumer devices. They’ re e-bikes, e-motorcycles, and all kinds of e-mobility. And really going to be the future of electric mobility and the power behind them.
Ben: This summer when we were doing our family vacation, I got to ride my first ever e-bike. I'm late to the game, but to see the performance of a battery on any bike for how long you can ride was enlightening to me and exciting. This technology came from a very interesting, very unique historical place. Oak Ridge National Lab, which is one of my all-time favorite places to visit. For those of you that haven't been there, it's this little pocket up on a Tennessee mountainside with some of the most brilliant researchers in the world. Big connectivity to the Manhattan Project. They still have a walk around museum for one of the first functional nuclear reactors.
Did you get to go in? Do you ever do the tour?
Mike: They don't really do tours. It's a working laboratory but we are honored to be partnered.
Ben: Yeah, definitely. They have their secret stuff going on.
Looking back at the process, 2020 was when you entered our cohort. What did you notice about the tech? For us, obviously, FedTech scouts that tech. We bring it to entrepreneurs like yourself. What made you attracted to this? And what was that experience like going through and building a business model around something at the time was just an invention?
Mike: Yeah, great question. I was almost an accidental FedTech founder. I was here in DC. I was coaching, mentoring, advising startups in the area, and I really wanted to dig in with a company. I was on LinkedIn looking for roles and I saw a member of your team posted about FedTech. And it was an Easy Apply button.
Ben: We'd love the Easy Apply here. One click. Yeah.
Mike: I thought it was an actual paying job. And then I had a call with one of your team members, and they explained the startup studio. It was actually not a paying job, but I thought it was a really interesting opportunity. I did it anyway, and I'm very glad that I did and got into the program.
You get an Excel spreadsheet of all the technologies that you guys have curated that labs and agencies have submitted to you. And the battery one stood out far and away. It stood out to me for two reasons. One, I thought it was the closest technology to commercialization that I saw on that list. Not just in terms of time, but also in terms of technology readiness. Number two, it just ignited a passion in me that this technology needed to be out in the marketplace. It held out the promise and it still does today of being able to save lives and prevent people from being injured in EV crashes.
I just felt a real passion. One of my personal passions has always been people. This really connected to one of my core passions. Saving lives, improving the lives of people, has always been a big deal. I got really excited.
Ben: Have you had any experience with batteries up to (this point)?
Mike: Just using them. None, at all. I had no experience, but that was part of the program. One of the benefits that you guys provided was access to the inventor. It was in that Startup Studio in 2020. It was myself, a mentor, two other team members and the inventor were on that initial team. I still remember the first Zoom meeting. It was all in Zoom because we all know what happened in February/March of 2020.
Ben: Which we have spoken to Mike. That was our first virtual fully cohort. Not by choice but by necessity. Obviously, it worked out okay, at least for one of our companies.
Mike: You and your team did just a fantastic job of putting that program on the fly. But I still remember the first Zoom call we had with the inventor. He said, “What do you know about batteries?” And all of a sudden - nothing. We spent two hours with him, and he was generous enough with his time just to give us a Battery 101. Just teaching us about batteries. That’s where it all started.
Ben: What makes me most proud to come in and get to do this work every day. It's that process. We're bringing together groups of folks. That inventor is going to be equally as excited to meet entrepreneurs that might be able to make his invention real. That learning process is really why we do what we do.
What was the journey in the program like? I know, we're going back a few years. What did you learn? How did the interactions with the inventor and the team evolved during the program itself?
Mike: The primary focus of the program was customer discovery. I forget the exact number, but it's somewhere in the order of 120 to 150 people out in the industry over six to eight weeks. Just asking the question: what are the problems with lithium-ion batteries? Once we got through that part of the conversation, we introduced our technology and said, “Hey, do you think this might have some legs? Might this be of benefit?” The answer was resoundingly “Yes, absolutely.”
After the FedTech program was over, we all, as a team, had a had a meeting and said, “We should start a company.” So, we started a company, and our mentor, the inventor, is still with us. Two of the other team members stepped aside for personal reasons early in the process. For the next two and a half years, it was me, the inventor, and our mentor, just trying to figure out a path to commercialize this technology.
Ben: Your current co-founder. When did he come into the picture?
Mike: My current co-founder, John Lee came in… we started having conversations January of 2022. That was a real key event for us as a company- the conversations with John, he decided to join as a co-founder.
Ben: Wonderful. You’ve had some really neat milestones happen since that creation of the company. I know there's some big news on the funding front recently. Tell us how you’ve used different types of funding for different phases of development for the product.
Mike: Yeah, great question. For the first 30 months, from February of 2020 to August of 2022, it was all just self-funded, bootstrapped. There were some very beneficial foundational things that happened during those 30 months. One is we successfully negotiated a license with the government with Oak Ridge National Lab called an R&D license, which gave us permission to do R&D on the on the technology. More importantly, it gave us something to hang our hat on when I started talking to investors,
Ben: In simpler terms, less capital expenditure? There's a lot of flavors of licensing agreements and R&D would be a little faster to get to market.
Mike: Yeah, absolutely. I think it was a couple thousand dollars for that R&D license.
Ben: Cool. Yeah.
Mike: Nonexclusive, of course. At that point, it was just one of those milestones that was important for us, as a company. For the next, I forget how long but it was quite some time talking to investors with the main question being, “What would it take to get this company to be investable?”
Ben: What was the answer that you got most often?
Mike: Answer most often was “You're going to need more than an RD license. You're going to need an exclusive commercial.” I spent many many months, and we successfully negotiated an exclusive commercial license from the lab. That was a major turning point for the company because that meant if all these investors were right, and they were, we're now potentially investable, or at least more investable than we were without it.
In January 2020, we started talking to my co-founder, John. A former naval contracting officer, then went to Palantir. He went to another company called Improbable out of the UK, and then became a VC. John is just so much better at business development, sales, and fundraising. He has better networks in that area and more experience in government contracting than I did. When he signed on, that was another big important step for us here in the development of the company. After he signed up on board, we had the commercial license. We decided to raise our seed round. I wrote the date down, it was August 17, 2022, we got our first check from our anchor investor, which was Mac Venture capital out of Los Angeles, and also for Deployed Venture Capital were our “leads for that round.”
Ben: What was that process? Because I know there’s often what can be a bit of a misperception right? That early-stage VC is not going to be as interested in things like capital intensive battery development or those types of technologies that are early stage. How did you go about finding the right investors and selling them on the vision for the firm?
Mike: It was all relationships. All networking. My co-founder, John already had a good network of relationships with investors- not only through his former work with Palantir, but also through his work as a VC. We found it through those networks. We didn't have a lot of difficulty to get investors. And we just found a great response at Mac Venture capital- just very excited about what we were doing. And, you know, they still are just a phenomenal partner for us in this process. We raised that seed round, which was able to provide bandwidth for us to hire our core team.
Ben: How many folks and what skill sets did you look at? Because those first people are make or break, right? How do you find the right people?
Mike: Yeah, we just been unbelievably fortunate of hiring. I know a lot of people say I have the best team. But we do have the best team. We really do. Everybody that we've hired has been better.
I'll just speak for myself- better than I am. And more talented than I am, which is always a good start. That's the goal. Yeah. It started off with myself and then John came on as a late-stage co-founder. The third hire was a Chief of Staff to keep us organized. Our fourth hire was our Director of Product. And then from there, we started hiring some battery engineers and a Director of Engineering. Right now, we're at six. I just hired a seventh (team member), who's a Battery Scientist, which will get us into our Series A. We're in the late stages of raising our Series A right now. Once we raise our Series A, our hiring plan has us going from seven to about 27 or 30 within a year mostly on building up the science team.
Ben: Where's the engineering happening now?
Mike: We have a main site at Oak Ridge National Lab in Tennessee. We signed an agreement with them called SPP, which allows us to work in partnership with them on R&D and prototyping projects. We were there on site in the lab working with the scientists down there, taking our technology from what we call Gen One to Gen Two, but also delivering on two of our Air Force contracts. February of this year, we won two direct to Phase Two SBIR projects- Air Force projects. We're currently actively delivering those.
Ben: Just to share. The direct-to-phase two SBIR program is such a neat opportunity. For those that haven't heard of this: it's for certain agencies. They'll give you the ability to write one proposal that is occasionally up to a million dollars of funding, sometimes a little more or a little less. But you don't have to go through doing the Phase One proposal or execution of the project, Then you get to the bigger money more quickly, which obviously, for startups is a good thing. Was that your experience?
Mike: Yeah. The one thing that the direct to Phase Two, and Phase Two require that the Phase One does not- is a signature from somebody in the government that they're going to be a customer. If you don't have that signature, you apply for the Phase One. And Phase One is to find that customer signature to get you to the next stage.
Ben: The customer discovery really pays right? Because as I mentioned, you find that government partner through that process.
Mike: If you do have the customer signature, you apply for direct to Phase Two. You’re ready at that point. We were very fortunate not to win just one, but to win two of those Air Force contracts. To round out our team, we do have an engineer in Los Angeles, who is integrating the battery cells that are developed in eastern Tennessee and through some of our third-party partners into end uses. Because nobody just buys a battery to buy a battery, they're always putting it in something.
Under those two Air Force contracts, we're delivering four prototypes- two under each contract. In the first one, we are putting our batteries inside of an e-motorcycle. The second prototype is we're putting our batteries inside of a vest that a warfighter would wear. Replacing some of those plates with bulletproof batteries that are formed correctly. The third prototype is to integrate our batteries into a robot dog. And then the fourth prototype is to integrate our batteries inside of a rapidly deployable sensor tower.
Ben: Even just treating me like the battery novice I am. What are the technical challenges? Those are four different factors. What makes that hard?
Mike: Yeah, I've realized we need to talk about the technology for a second.
Ben: Yeah, please
Mike: To explain how Safire works. There's a chemical principle called non-Newtonian fluids. And the one that most people are going to be familiar with, if at all. I was not when I started this startup studio in February of 2020. But the most commonly known non-Newtonian fluid is a mixture of cornstarch and water.
Ben: What makes it a non-Newtonian?
Mike: You can do this in your kitchen. A lot of kids go through this in in school and chemistry class: you mix cornstarch and water in the right proportions. It is a liquid under normal circumstances. But as soon as you go tap it, or hit it with something, it instantaneously becomes a solid.
Ben: Really, okay, off to try. I'll try this tonight. I have a very excited six-year-old that will be excited to try it.
Mike: Yeah, this is a great, great thing to do at home. Actually, our inventor was doing this with his kids and said, “Okay, why can't I use this same chemical principle inside the liquid portion of a lithium-ion battery?” When under normal circumstances it encounters some sort of impact, it instantaneously becomes a solid, and then a couple seconds later reverts back to a liquid. That's called a non-Newtonian fluid that has those characteristics. And the response that happens, that liquid to solid response, is called a shear thickening response.
Ben: Is there a simple way to understand sort of what on a on a particle level is happening?
Mike: On a simple level, what happens is that the particles are oriented in a specific way that they come together at the moment of impact and form a solid barrier because of the way that they're formed and that that the way that they interact. I'm speaking as a non-chemist right now. They go back to the way that they were in the liquid.
Mike: It's a physical reaction that happens among the particles that are in solution. So take in the cell, for example, when the battery encounters an impact that went and it shear thickens, and instantaneously shuts off the battery because the ions cannot flow through solid. When there's no energy going through the battery, there's no opportunity for a crash or explosion. By the way that that solid has ballistic protection and structural characteristics. And a couple seconds later, you remove the impact and go back to a liquid. Obviously, I didn't know any of this stuff when I started the startups.
Ben: Incredibly cool.
Mike: And I just thought it was incredibly cool, too. I'm like, “how did you guys come up with this?” Very smart people.
Ben: Have you guys been able to run it? I love the idea. Wearable sensors built into fabrics. And all this is huge. The idea that those electronics be ballistic protection also. Really, interesting. Have you gotten the chance to test that yet? Or is that kind of going to be done under the Phase Two?
Mike: We’ve done testing on the cells, and so did the lab even before we came along. The technology has been peer-reviewed. It’s been demonstrated in the lab. It’s patented. We’re now taking this demonstrated technology, integrating it into end uses, and then testing those end uses.
Ben: There’s four demonstrations. Interested to hear about all of them. Just from a business perspective where's the biggest market? I could imagine anything related to EVs is going to be huge commercial.
Mike: Yeah, EVs is by far currently the largest market but there are other markets as well. I think of electric mobility in general being a huge market. And then you have subcategories. You have EVs, EV tolls, the electric vertical takeoff and landing vehicles. You have e-bikes. You've even got electric boats as well.
In another category, you've got all those applications that require some sort of ballistic protection component. And there is some overlap because in the ballistic protection component category, where you have some structural fortification as a result of the shear thickening response to the battery. There are some structural benefits over even in electric mobility applications as well. And we're currently exploring some partnerships and some design options regarding structural fortifications within some EVs, EV tolls, e-bikes, e-motorcycles, etc.
Ben: The big EV, like the elephant in the room with this is- would something like Tesla be interested in? Or is that a future buyer potentially?
Mike: Any EV manufacturer is going to be a potential customer. We're in conversations with them but they have a long sales cycle. Nothing wrong with that. We're in a fortunate position right now that the government work is providing revenue for the company in addition to our investors to get to that sales with an automotive OEM, which is we anticipate happening in the next two or three years.
Ben:: You're threading a very interesting needle that a lot of entrepreneurs struggle to thread. I'll describe what I mean. We’re being able to leverage the best of government funding, right? And honestly, direct to Phase Twos from the Air Force is very competitive, but you got it. And that’s some of the best of the non-dilutive funding that exists out there, which is awesome. Doing that in a way that's synergistic with raising sophisticated private capital - not easy to do those two together.
I'm interested in how you think about that. And what have you learned because you're threading the needle, and you got to keep both parties happy simultaneously?
Mike: Yeah. One is choosing your investors wisely. And there are a lot of great investors out there that understand the government commercialization piece. I'm very fortunate to have relationships with a lot of them. On the government side, just understanding that you can do all this customer discovery and people can say “Yeah, this is great. I love this. I would want this.”
But until someone comes and says “Not only do I want this, but I will pay for this," you don’t really have the validation that you need. When we won those two Direct to Phase Two SBIRs in February, I said “Okay, we’ve got a company now because we’ve a customer. A very good customer that not only wants our technology and sees four use cases for it but also is willing to pay us to deliver prototypes.”
Ben: I love that. The way you described that going from startup to we have a company. It’s classic moment, right? Some ways it’s easier to do a startup than it is to have that extra turn into something that there’s a real signal from the market. Bravo.
We sometimes see when a founder is in that first venture, we see great people that will leave large organizations that have lots of structure just starting your own company, right? You have to create that structure of how you operate and how you stay motivated. How do you set goals that move the needle forward? How do you do that? How do you spend your week?
Mike: That is a great question. And the best thing I've got is- it changes almost every day as the company evolves and as the as the needs evolves. For example, early on it was talking to investors and figuring out strategically what do we need to do to make this company investible. If we don't get to being investible, we don't commercialize. If we don't commercialize, this technology does not get into application for where it needs to be.
Once the company became investible, it's, “How do we raise the money that we need to raise? How much do we need to raise? From whom?” And then once you raise the money, “How do you use it just to get it to the very next step?”
The very next step for me is not always very clear unless you accomplish the prior step. Right now most of my job is spent with the team because the most important thing we have right now are the people. That's the next step for us- is to be able to get the team, who is phenomenal.
Ben: Describe that. Early part of the journey, the most important thing would be- the customer or the capital like. When you think about focus shifting to more of an internal, what's driving that?
Mike: Well, that's just me. Part of that is my co-founder John, who is taking the lead on raising the series-A. John's taking the lead on that. That frees me up to develop the team. I am a firm believer that I have hired people that are more talented than me in a lot of different areas. Let’s give them everything that they need in order to do what they are great at. That's a part of my job- to provide them with the resources, the encouragement, the direction that they need to accomplish their goals for the company.
Ben: Yeah. There's this step-functions that at least for FedTech happened to us. That you're in a really fun- 6 people soon to be 7 people. That's an awesome fun time, where you got a small group. Everybody is really invested.
I think for us it was hitting 15. Things change, right? The way you have to communicate changes. Our big change was around 25 people. There's even an article I can send you that was interesting. It's like, it said "Why does everything break at 25 staff members?” And it does. The whole nature of the you communicate, the way you manage changes. The need for strong leaders is more apparent than ever.
And you see the interesting step functions. The cool thing is you can always catch up, right? You have some pain each time you get to one of the hilltops and then it starts to slide down a little bit. Then you go right back up when you figure it out.
Mike: One advantage that I bring to the table regarding the step functions is I have experienced those step functions in the life of church, where I used to work. There's a similar phenomenon in church- related to how many attend your church. I forget the exact numbers. I'm going to make them up. There’s a difference in a church between 50, 200, 500, 1000, and 10000. There's a different leadership structure that has to be in place.
Ben: What's an example- something that would be different between the two levels?
Mike: Let’s take the extremes for a second. At 50, your pastor knows every single person in the church by name. You get to 10000- that's absolutely impossible.
How do you bridge that gap in a way that people feel cared for and connected to somebody who cares for them in such a way that it's impossible for one person to do that. Very similar to step functions. My experience doing that really plays well into thinking strategically about the next phase of growth for our company and doing what we can to do today to make sure we're set up as well as we can for that next phase.
Ben: Gotta rack my memory here. You're the first pastor turned founder that I've met. Are there other things that you notice coming to your approach as a manager and as a leader that you find are kind of coming from that previous work that you did as a pastor?
Mike: Yes absolutely. Thanks for asking. By far, the most important is just my interest in helping people grow. As a pastor,Accelerator that's what I wanted to do. I wanted to make sure people were getting in a sweet spot. They really felt alive. They felt passionate and excited contributing something meaningful to society on a day-to-day basis. And also, in, a sustainable way.
I bring that into the commercial world, but I still have the same the same values. I want to make sure our team is happy, excited, passionate in the right seat of the bus- feeling like they are contributing to something good, helping society. That's definitely one thing I have brought over from the ministry world into the business world. It’s my own personal belief that those two necessarily don't have to be separated by a giant brick wall. They can act symbiotically. And I'm trying to demonstrate that they can be the exact same thing if done the right way from the right motivation.
Ben: I like that a lot. Last thing I wanted to ask you was if you mentally go back to that moment where you are about to meet your inventor for the first time. That obviously changed the direction of your life, your colleagues, which is what we'd love to see.
What advice would you like to give to FedTech participants in Startup's Studio that is about to start that journey. First inventor meeting and obviously all that happens after. What would you tell that person?
Mike: Yeah- that's a great question, Ben. Three things. There's the typical stuff about focusing on customer discovery. Make sure you have product market fit. People can get that elsewhere.
Three things that may not be as typically heard. One, it's probably going to take a lot longer than you think it's going to take. I would advise founders have some financial margins. Don't quit your day job. It's probably going to take longer than you think. So that would be number one.
Number two, as part of the process you better be resilient, or you better discover some resilience. I think resilience is tied to passion and something you really care about. Because being a startup founder, you just get beat up every single day. Day after day by problems and challenges. And if you're not passionate, you're going to give up. But if you are, aka you're resilient, you're going to push through. So, question your resilience and focus on that. And then the third thing I'd say is commit to a process of gratitude each and every day. And the reason I say that is it's much more natural as a founder to worry about the things that you don't have. When you're doing that, you fail to be thankful for the things that you do have. And it's one of my beliefs out there. Call it spiritual or natural. It's that- we have everything that we want in unlimited supply right now to accomplish what we need to do right now. And it's easy to lose sight of that fact if you're worried about what you don't have. It's easy to fall into that trap of lack as a startup founder.
Number one, it's going to take a longer than it's going to take. Number two, be resilient, which is tied to passion. And number three- commit to a practice of gratitude each and every day- whether you feel like it or not. That's what practice is. Whether you feel like it or not. “I'm going to choose to be grateful for the things I do have today.” That's kind of the non-typical advice I would give founders that are starting out.
Ben: It's advice that could work out for life also, right?
Mike: It probably does.
Ben: As well as business. You guys, sounds like, have a lot of good stuff to focus on. We're proud of you. Grateful for your time. This was a lot of fun, Mike. Very special also to be in person for this. Thank you for coming to the FedTech headquarters.
Mike: Thanks for inviting me, Ben.
Ben: Absolutely. Look up Safire and we will talk to you soon.