Crusoe CEO Chase Lochmiller: Turning Stranded Energy Into Intelligence

to succeed in today's business age.

Yeah, your business is such that you have to go fast. Like, you can't take your time. Most CEOs complain that as they get bigger, they slow down. Have you figured out ways to keep the pace up or have you slowed down? I mean, it feels faster and crazier than it's ever been. like at Caruso, there's a lot of big things happening, uh, on a daily basis. So I, I, I would say we are, we are continuing to move with incredible urgency. You know, I, I think Elon's probably like the best in the world at this, but like, you know, just trying to eliminate any sense of like entitlement or, uh, you know, eliminate any sense of like, Hey, just, you should be comfortable, like we made it, like we're here, now we just have to coast.

Elon has this superpower of, you know, simultaneously enabling people to believe that if they're successful, they're going to change the world and there will be this incredible financial outcome and this incredible outcome that's driving massive impact, uh, while also holding people accountable through the high pressure of like, we're going to go out of business tomorrow. And if you don't act within, you know, the, the greatest degree of urgency that you're physically capable of, we're going to, we're going to die. And you know, that, like holding that tension is, is, is quite a, quite a superpower. Um, I would say that I'm not quite as extreme as Elon in driving this tension of, we're going to go out of business tomorrow versus, hey, the opportunity we have to change the world should inspire you to work hard.

But I do think that threading the needle of that is an incredibly important thing to be able to drive a large organization to move quickly and with a high degree of urgency. Okay. It was the first time running a company like this. Do you study other CEOs and try to borrow pieces of their playbook? And is Elon your guy? You're trying to borrow big pieces? Who do you look up to? It's kind of funny. Crusoe is now the largest company I've ever worked for. And, you know, we recently surpassed 2000 employees. And, you know, I used to read a ton of books across fiction, nonfiction, you know, kind of whatever I was interested in sort of a wide ranging things from, you know, science fiction and, you know, technical books to, you know, novels and, you know, whatever the latest and greatest, you know, economist book was.

but uh i shifted when i started crusoe there was like a period where i just binged on like every you know every good business book recommendation anybody would give me i would like you know binge those things and i got to you know i had the fortune of having a number of great mentors i had a great coach um that that really helped me grow into becoming a leader of of people because i'd never really been a leader of a big organization before starting crusoe either and so So it definitely took work. It took effort to get to where I'm at in terms of what does it take to be a good manager. And it took making mistakes and failing and learning on the job and just going on my own personal journey and my own personal path to embed a lot of scar tissue that I could then leverage in the future.

I do think that there are certainly mentors and people that I look up to that I have closer relationships with. I do very much look up to guys like Elon that, you know, I think is just one of the greatest entrepreneurs and greatest business builders and, you know, greatest visionaries that, you know, humanity's ever, ever had. If you don't mind, like what were some of

weird to you? Yeah, please. In addition to my Sequoia work, I started an ocean fund called propeller and i heard a pitch yesterday from a company and i'm

not sure about this company, but, or about this industry, is mining, you know, rare earth metals from the ocean. And same analogy, like we're going to do it end to end, we're going to build an Exxon was the exact same company that they talked about as a super vertically integrated version. Speaking of that, we invested in Blue Energy. And I know, you know, Jake from Blue Energy, building nuclear in the ocean uh you talk about that like you're you've had a kind of a journey with the energy office it seems like you started in just like there's there's wasted energy out there and we're going to put it to work and you're still doing it but it sounds like the abilene facility is a lot of just natural gas like where are you at this point you know crusoe is very focused on activating megawatts for intelligence. And that requires all sorts of energy resources and all sorts of different use cases. At times, it's natural gas. We're focused on trying to find and catalyze innovative new energy solutions that can be things like Blue Energy. They're trying out new nuclear energy production technologies. We have another partnership with Ollo that we announced recently, where we're trying to bring to life the first

SMR-powered AI factory at the Idaho National Lab. We've done stuff with behind-the-meter wind, with behind-the-meter gas, with behind-the-meter solar, with batteries. We've tried many different things. We've gone to Iceland, where Iceland's this geological phenomenon that it exists, but it's this land of fire and ice where you have very abundant, low-cost geothermal energy, very low-cost hydropower and not a lot of people and very cheap, efficient cooling. And bringing the demand for power there via compute has been our philosophy. And that's really what we mean when we say take an energy-first approach to building compute infrastructure.

Norway is another great market for us where they have a lot of low-cost hydropower that's you know, being underutilized and can be built bigger than it is today. And so we don't think it's a silver bullet. We think compute infrastructure will be ubiquitous to serve the infrastructure layer of intelligence that's ultimately going to power global economic development. And so you need to use different energy solutions in different cases. And so we're really excited about a lot of the innovation taking place in the industry. And Blue Energy is another great example of can we leverage the same steam turbine technology that is needed for gas generation to basically – that's needed for both gas generation and nuclear energy to be a sort of bridge between gas and baseload firm nuclear power.

You know, all of these things we think are great. We think a lot of the development in new battery technology is really exciting. Everything from like, you know, what's happening with companies like Redwood Materials that are repurposing used electric vehicle batteries and used lithium ion batteries to long duration storage solutions like Form Energy and Intora that we think will be cost effective 100 hour batteries. And so there's like a spectrum of whole different things and we kind of view it as like we sort of need them all. The demand from intelligence for energy is voracious and it's really going to accelerate the human progress as it has more access to energy.

one of the things i find fascinating about you and your company is you started essentially in the bitcoin mining industry with stranded uh energy putting that to work and it was a really good business you were cranking with it and it sounds like from the beginning you sort of foresaw there's going to be a need for ai infrastructure and you started building it out and it rhymed at some point you decided we're going to sell off this most of our business is this bitcoin mining business when did you make that decision how did you tell your board take us behind the scenes on when that became a good idea in your head i was that was a bold move

personally a huge bitcoin supporter and holder and you know i think it's an important thing to exist for the world as a you know non-state controlled decentralized digitally native open monetary ecosystem but it was the right thing for crusoe to go all in on ai infrastructure

of my recent interviews i interviewed ali gozi from uh databricks love him great guy and he's basically had the same management team for 10 years with the separately turned over one person And then Devit Tacharya is a friend of mine and coming on the pod. On average, he turned over two per year on the exec team for lots of reasons. I find that odd. They're in kind of similar businesses and it's just so, and they're both really good and they're so different. Totally. Actually, my current COOs and CFO worked alongside Dave at MongoDB for about a decade. So he wasn't one of the people that was, you know, churned.

By churn, I mean, some of them leave. No, I totally understand. But look, I don't think there's any right answer. And, you know, I've seen different things work. I think what I've found most effective for me is that if you have someone that's really struggling, the team recognizes it. And, you know, we view it as, you know, the team is ultimately there to win. And, you know, I mean, I saw this, I grew up playing competitive sports and, you know, if you, if you run a team, you always loved your teammates, you know, you had. It's a strong and special bond that like came from, you know, the locker room down the field.

And, you know, if you had a teammate that was just like struggling or, you know, a weak link and, you know, led to, you know, the team's downfall, you know, it was like you, you knew that the right thing to do was to replace that person with someone. It sounds like you're in the middle of those two. I'm in the middle of the two for sure. Fine. Yeah. Speaking of teams and people, one thing that is fascinating about your business, and I just think about the culture we built at HubSpot, people rhymed at HubSpot. But in your organization, you have AI researchers and you have welders. How do you create a culture across all of them?

Are they different cultures? How do you comp people across all of it? How does all that work? It's a great question. We've always felt like we've had an incredibly diverse culture just from the people that are coming to help build this. And one of our core values is tapping into the collective genius, right? It's like no one person has all the domain expertise to deliver the full solution that we're trying to bring to bear. And we all can learn from one another. And all of us working together towards a cohesive solution is going to result in an amplified result that none of us could have done individually. And there have been critical innovations that people have gotten from people like electricians that are working on wiring things up to the researchers are then benefiting from those specific use cases. And how we think about the whole building management system, how we think about the operating system from the electron to the token, I think is something that really sets us apart. I read an article in the journal about VCs and people in your industry when they're presenting at conferences, like people are

given there's, there's, you know, crazy people out there that, uh, want to, want to, want to create a big statement. So, uh, yeah. Yeah. Um, and so I assume some of these rooms you're walking into, there's some hysterical people. What is that like the first room you walk into and people are screaming and yelling at you? Like, there's no training for that. Again, I think honestly, like appealing to, you know, their humanity and like understanding why someone may be, you know saying what they're saying i think listening to the facts i think like you know i often have very strong opinions but i can always change them in light of new information and new facts so like that's like uh i think it's important to have that like intellectual flexibility to say like hey i had high conviction that we're doing things the right way upon learning this new thing we should probably be doing this differently and we could probably be doing this better and i think like that is like an inherent growth mindset that we have here as a company. And, you know, I've tried to channel as a leader, like to, you know, have, uh, you know, the, the ability to listen to, you know, these, these, these, these criticisms and, and, and, uh, you know, try to

try to filter out like what is crazed hysteria that's, you know, unfounded in truth and what's like legitimate critical feedback that we should, you know, be using to become a better steward of,

problems and, you know, go try to, you know, help, help resolve them. Okay. This question's for me. And I would imagine other people are interested. I've never met someone that climbed Mount Everest and I'm really impressed. What is it like? What is the training like? What does it feel like when you get to the top of that mountain?

You know, in a lot of ways, like a company culture is sort of a reflection of, you know, the CEO or the founder's culture. And, you know, that's really what's happening at Crusoe. Like we actually have a core company value to think like a mountaineer, which is like this sense of cultural resilience and preparation and planning and willingness to endure the expedition, a lot of that value and the practices that we've written about for that value describe a lot of what it's like to climb Mount Everest. And so there's actually this whole internal presentation I have around the various Everest trips that I had, because I actually tried to climb Mount Everest once in 2014, and there was a big avalanche that occurred, and it ended up killing 15 Sherpas in the Khumbu Icefall. And I made sort of this conscious decision like you know i came back and my wife was like oh thank god like that chapter is done and like you don't have to do this anymore and i was like look this thing like haunts me and like it's all i think about and like i like have to go back she's like you're insane um but like if you're gonna do that please do it before we have kids um So, uh, but when I thought about that, it was like very much like when you think about

Mount Everest, you know, and, and I climbed on the South side, which is, you know, the Nepal side, uh, through the Kumbu Valley, there's this, you know, you, you basically start at base camp and then, or you trek up to base camp and then you go from base camp to camp one. And then there's camp two, camp three, camp four. And then you, you have this push to the summit. Well, the two most dangerous areas on the mountain are basically from camp four to the summit, which is, which is frequently referred to as the death zone. This is where you're above 8,000 meters. So, you know, very intuitive why that's dangerous. You're at very, very high altitude where humans really shouldn't be living. Um, but the other most dangerous area is this area between base camp and camp one, which is called the Khumbu Icefall. So this was the area where, uh, you know, this disaster occurred when I was there in 2014. And, uh, the thing about the Khumbu Icefall is that, you know, it's, it's a glacier that's sort of falling, right? So it's this beautiful, like really cool ice jungle gym, but there's a lot of things that are just like stochastic risk, right? It's like these things that are totally outside of your control where

it's like a Ciroc falls or an avalanche occurs and, you know, oops, you die. And that was the type of risk where I was like, look, I know there are ways I can consciously train and prepare for the high elevation and, you know, I can manage my risk up there like more effectively. And I know consciously I'm taking that risk. The risk I felt less comfortable with was this stochastic risk and a traditional Everest expedition involves going from base camp to camp one. And you're, you actually acclimatize on the mountains. You go base camp, camp one, back to base camp, base camp, camp one, camp two, back to base camp, up to camp three, back to base camp.

and you actually end up doing eight trips through the Khumbu Icefall. So like four round trips on a typical commercially guided expedition. In order to de-risk that, me and my climbing partner actually designed a different approach to climbing Everest, which was we ended up going and climbing a bunch of mountains nearby and spending a lot of time at the summits of those mountains so that we would acclimatize without taking this stochastic risk in the Khumbu Icefall. And we actually only did one big acclimatization trip up Mount Everest and then back to base camp. So we ended up doing basically four passes through the Khumbu Icefall instead of eight. I was conscious of the risks that I wanted to take. Um, you know, the planning.

preparation, all that, we had to think through a ton of stuff, a lot of training, a lot of long distance trail running and a couple of different high altitude training trips. But the point I want to get across is conscious risk-taking and intense planning and preparation that really went into a very successful Everest summit in 2018. You worked so hard at it and you wanted it so badly. What was the feeling inside of you when you got to the top? It was like, because I almost turned around at this, uh, this area called the balcony, it's about 8,600 meters. Um, so the summit's 8848. Um, and, and so, you know, not too far from the summit in terms of elevation, but like it felt impossibly far and it was still dark out. Right. So we left camp four at like 11 PM. It was dark out when we got to the balcony. My, you know, you feel terrible. Like, you know, I hadn't eaten much in the last 48 hours. Like I was dehydrated. I felt awful. My legs were cramping like, and it was dark. Right. And you know, my partner was really the person who inspired me to continue. I, I, like I felt fine apart from those things. So it wasn't like, felt like I was putting myself at risk. And once, once the sun came up and you start seeing the sunrise and you're,

you're sort of high up in this mountain, you're like, you're just inspired by, you know, your surroundings. You're, you know, it was this elevation of your spirits and, uh, gave you the adrenaline to kind of like make the push through that final, uh, you know, 250 meters. And, uh, you know, when I got to the summit, I think, you know, my feeling was, was really one of just sheer awe, just like, you know, just a, a sense of awe for the universe and, you know, an offer, you know, this, you know, being on the summit and sort of experiencing, you know, the whole, the whole world around me, um, you know, I think, I think was just a really special one and it makes you feel small. Right. And, uh, you know, I think, I think there's something, uh, very interesting about like, you know, having that sense of like, I'm small and I'm inspired by the world around me and just like the magnificence of existence. And, uh, you know, that was kind of my, my experience on the summit. We, it was beautiful. We had about, we had a very sunny day. So we spent about an hour, uh, up at the summit and, you know, just took a bunch of pictures.

just really enjoyed this heroic moment of achievement. Congratulations on all your success. I'm rooting for you. You're a fantastic CEO. Thanks for coming on. Brian, thanks for having me. This was really fun. Okay, hope you liked that episode with Chase. He is a very legit CEO scaling that business really well. I'll give you a couple of my takeaways. My first takeaway is kind of on him as a homo sapien. And he's a person who really likes hard challenges. And like when I recruit and I fund CEOs, that's definitely a quality that I look for. I liked how he talked about just how much the CEO job changed.

He had never done anything like that before. He's eight years into the journey. And man, he's a learning machine. He read a lot about it. He hired a coach. It sounds like his coach was really useful. And I coach a bunch of Sequoia CEOs. and you know some of it is giving them advice but a lot of it is gaining context and listening to the problems and empathizing and really kind of being like a therapist so he benefited a lot from that the other thing he worked hard on it sounds like his public speaking he's very smooth like really articulate and smooth and sounds like that wasn't his default setting he's had to really work at that and i think that's important like if you're up in front of your company you're up in front of investors. I don't think it hurts to be articulate and smooth. I like the way he talked about competition. He said something we used to say at HubSpot all the time, you're much more likely to die of suicide than murder. It was very much our case. It sounds to me he's really into competition. And I think a lot of founders frown on that. We had major competition over many, many years with Salesforce.com. So I wouldn't shy away from that. The other thing I always did is I

always got to know our competitors, just because you never know. And so don't don't be afraid to reach out to your competitors and have coffee. The last thing I took that I really liked is as the organization gets bigger, and I felt this at HubSpot, everyone wants to give you good news, you're the CEO, and they expect you want to hear good news. And you really want the opposite, you want to hear the bad news. And you want to train the organization to give you that bad news. So almost encouraging people when they push back at you and when they give you bad news inside of a. You know, a pretty good size setting. I think that's a really important quality in CEOs.

The other thing that I think is an important CEO quality that I think he does, and you might too, but he has very strong opinions, as you've heard. But if the facts change, he's willing to change his mind. And being stubborn is a really tough quality in a CEO. It makes you quite hard to follow. Anyway, those are some of my takeaways. I thought he was great. It's an amazing business. he's an amazing CEO I hope you liked it and I'll see you next time on a strange trip