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Today you’re going to hear the story of Diffuse Energy and it’s founders Joss Kesby, James Bradley and Sam Evans.

Diffuse Energy is a company that, right now, is building wind turbines that are twice as efficient as their competitors, but the vision that Joss and his team have for the company is, well, the sky is the limit. We will hear all about that, but for now, let’s go back to day one where this story begins…

Transcript

Joss: In every challenge lies and opportunity, and that’s what we recognize.

Adam: Hi, I’m Adam Spencer and welcome to day one, the show that goes back to the very beginning, to share the untold stories of incredible regional startups and entrepreneurs

Today you’re going to hear the story of Diffuse Energy and it’s founders Joss Kesby, James Bradley and Sam Evans.

Joss: My name is Joss Kesby and I have a PhD in mechanical engineering. I am the managing director and co-founder of Diffuse Energy.

Adam: Diffuse Energy is a company that, right now, is building wind turbines that are twice as efficient as their competitors, but the vision that Joss and his team have for the company is, well, the sky is the limit. We will hear all about that, but for now, let’s go back to day one where this story begins…

Joss: I had the option of becoming an academic.I didn’t want to be an academic for the rest of my career. I like the idea of developing my own technology and making that my business. Because I really have a passion for renewable energy, I love renewable energy, and that’s what I wanted to get into. I submitted my thesis last year, and while I was writing my thesis I was thinking well this is really exciting, but what do I do with this?

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Adam: Before we find out what Joss decided to do with his research it’s important that we  learn a bit about what Joss’ research was about and what the technology actually is, you’re going to meet James Bradley properly in a couple of minutes, but James explains what Diffuse Energy’s core technology is very well, here’s James.

James: Most people can understand a normal open-bladed wind turbine. Much like you see in most places. A diffuser augmented wind turbine has essentially a cylinder around the blades, it has an aerodynamic shape. What that diffuser does, or that tube, is it draws more air through the turbine, so it essentially makes the turbine look like a bigger turbine than it really is, that’s the best way of putting it. And so for a smaller size turbine, we can get a bigger output than a similarly sized turbine that doesn’t have that diffuser in it.

The idea isn’t new. It’s been around since, I think, 60s is when it first came about. Typically, what people did was take an existing wind turbine, and then try and make a diffuser and add the two together, and then have a crack. Typically, that trial and error was mainly error. So, what Joss’ PhD was about was coming up with a method that designed the two in collaboration with each other. Because there’s some pretty nasty aerodynamics that go on in that whole relationship between the turbine and the diffuser, and so he cracked it.

Adam: Ok, perfect, now back to Joss who is a few years into his PhD trying to figure out what to do with his research…

Joss: So it’s basically three and a half years into my PhD, writing my thesis, trying to think about how, or what I was going to do with the research that I’ve done. Looking to commercialize my research, but not really knowing where to start.

I found a flyer at a café that I was having breakfast at with my family, and that was for the i2n hub, and that was all startup stories with Heath Raftery. Basically, that’s the start of the whole journey to get to where we are now.

I went to the startup stories. I had really enjoyed his presentation, I was thinking jeez that sounds fantastic, that’s something that I’d like to get involved in, and I was talking to Siobhan and Mickey Pinkerton at the time and they said, “Oh, you’re a researcher, you should really go and check out CSIRO’s OnPrime program.

Adam: I want to hit pause to let Joss to explain exactly what the program is that the team at the University of Newcastle’s Integrated Innovation Network recommended they check out. This is Joss speaking about CSIRO’s ON program.

Joss: OnPrime, they’re groups all across Australia where you are basically forced to go out and talk to who you think your customers are. To listen to them, then see first of all, if they actually are your customers, and secondly, if what your product is and what your research is is actually filling a pain of theirs, is actually improving their way of going about things.

That is the OnPrime part, which is looking at the product market fit. And then from that OnPrime cohort, the lucky ones get to go to OnAccelerate, which is all about, okay, this is your product market fit, go and make a business out of that.

Every fortnight you go to basically a different capital city, and they do what they call them Level Ups. And each Level Up is a two-day intensive course in a certain aspect of how you start a business. So, it might be team dynamics, the next one might be protecting your IP and getting it out of your home institution, the next one might be how to set up a business model, how to fill out the business canvas, how to show that your product is actually going to help people, essentially.

Adam: So to use Joss’ words, CSIRO’s ON programs are rapid commercialisation programs. Now, Let’s pick up from where we left off…

Joss: So, I went to the information day, and I was all for it, but I asked them, I said “Can you go as a single entry?” They said, “No, you have to have a team.”.

Adam: Joss had been at the University for some time at this point and that’s how Joss met two colleagues who would eventually become his co-founders at Diffuse Energy, James Bradley and Sam Evans.

James: Hello, my name is James Bradley and I’m one of the co-founders of Diffuse Energy.

Adam: Sam couldn’t be with us on the day we sat down to record.

Joss: That’s why Sam isn’t here today. He’s just gone to China for another … basically a pitch event over there.

Joss: I managed to convince them to come on board as part of our team for OnPrime, and we really enjoyed it, had a great time. Found out some pretty good learnings and some pretty good market fits for our turbine, and then we basically applied to OnAccelerate. They sort of checked your hustle to see how good you were at doing that. And then they took 10 teams of that to do the actual OnAccelerate program. And then, that’s what we did, OnAccelerate.

Adam: Getting their start in the ONPrime program from CSIRO thanks to i2n’s recommendation is a great start and has proven to be invaluable, but businesses need money to grow, either from bootstrapping or receiving funding from elsewhere.

Joss: CSIRO has provided us $10000 funding for being a high performing team within the OnAccelerate program. Also as part of the OnAccelerate program, I received the CSIRO Stanford Australia scholarship, so that was $30000 to attend Stanford Graduate School of Business, so I’ll be going there in July, that’s going to be great.

Joss: Prior to that, there was $3,000 from the OnPrime program.

We have a good relationship with Natalie Gillam and Tim Cotter up from AusIndustry, so we went and had a meeting with Natalie, and she stepped us through all the different grants that we may be eligible for.

So, we’ve used that MVP grant to get all of our manufacturing processes in place, so that once we’ve had a successful trial following that grant, we can just press the go button.

Adam: Throughout this whole process the team have built several prototypes for testing. Partly from the funding just mentioned and partly from funds they have injected themselves.

James: We’ve built several prototypes for lab testing, and they’ve all worked pretty well. They worked really closely to what we thought they would. And so, in a lab environment, we’re super confident with what we can develop.

Joss: So basically we’ve proven up my simulation method, my technology, now we’re on the verge of getting a properly manufactured product to our customers. And that’s a whole different ballgame once you’re at that level. It’s a really exciting time, the moment things are progressing really well.

Adam: Speaking about customers, that’s the next step in our story. Joss & the Diffuse Energy team are deep in the OnAccelerate program now, and it’s in the midst of this extensive program that they find their first trial customer in the remote telecommunications industry.

Joss: So we’re still in the middle of the OnAccelerate course, so there’s still all those Level Ups going on. And it was just one of many, to be honest. There was a lot of other opportunities presenting themselves, at the time. Sam did a pitch event with Innovation Bay down in Sydney, who are basically angel investors, high net worth individuals who are interested in innovations, technology space.

James: Sam, at the end, said, “Oh, this guy came up to us, he’s the head of the company, he’s trialing one of our competitor’s turbines at the moment, gave me a card.

Joss: The CEO said, “I need to go now, but you need to come and see me. Here’s my card, get in touch.”

I was excited because you know who wouldn’t be, when someone comes up to you and says we want to trial your product.

But it wasn’t like, hallelujah. It was, okay, how do we get this into a trial, because we’re also talking to four or five other people as well about trials with them. It just happens that this was the one.

So, we talk to the CEO and then he’s handed us off to the engineers to actually make it happen. That’s basically the process that we’ve been going through and now we are tying into their systems and getting a turbine actually on one of their towers now.

Adam: It has not been smooth sailing though, originally the target customers were Yacht owners and well the team never really set sail with that idea.

James: Oh, we got belted by a VC.

He politely gave us a really hard time.

Because his thing was well you’re aiming this at yachts and I’m not interested whatsoever and investing in a business that’s going to sell wind turbines to yachts.

If you’re going to talk to a VC, they want you to solve some kind of global problem or at least a problem globally, either or either.

Joss: They want the potential for your company to be a hundred X what they even put in.

James: That’s never going to happen if the entire market is $52 million, and you’re not going to take all of it. As good as we may think we are, we’re never going to get every last cent of that.

And so he was right, having a whole, sole focus on yachts was the wrong thing to do. I think it was probably at about a similar time that the telecoms thing came about. Okay, so, here’s another prong, and then we’re lucky enough, I went to Southeast Asia. It was the end of last year, and got talking to a pile of people, and other opportunities arose. All of a sudden you can start seeing a whole pile of niche markets that are big that we can tap into, way beyond yacht owners.

Adam: The journey is never a straight path and that’s why it’s really important to have the reason why you are doing whatever you are doing firmly in mind to get you through all the twists and turns. As the managing director, Joss has his why.

Joss: I was working as a project engineer and project manager for a local construction company, and I was building a lot of infrastructure for coal mines, so dealing with storage facilities and things. While I loved working with the Company, I didn’t like what I was building for them. Infrastructure for the coal mines I wasn’t that comfortable with doing. And I always wanted to get into renewable energy.

There is definitely a better way that we can be doing things, and I think that energy can be life-changing, and if you can no longer be living in poverty, or if you are living in Australia, you’re probably not living in poverty, but you can become a part of the solution. You can make a positive impact on your life and the environment around you.

I’d love to become a part of that. I’d love to pull Diffuse Energy up to allow that to happen.

Adam: As I mentioned at the beginning, Diffuse Energy currently builds wind turbines, but the vision for the future is much larger than just one product.

Joss: What we are now, we have a wind turbine that is twice as efficient as our competitors, and it’s quieter and safer, and we’re going to get them into the market, but ultimately, we want to become a renewable energy company that provides systems to people to allow them to become entirely energy independent. Not only that, but to feed energy back into the grid, to allow Australia and the world to power the future renewably, essentially.

James: In the short term, we’ve got some big goals to kick in the next twelve months, I’ll say. If we kick those appropriately, at least here in Australia, we stand to do quite well. That will set us into a position where, probably, we’ll next head into southeast Asia, and we’ll have to set up, because of taxes etc, we’ll have to set up manufacture elsewhere. That’s a pretty, both, exciting and scary proposition. I think that’s where it’s heading, right.

Longer term, further than that, we have other opportunities for our core IP to make an impact in other areas. In those cases, we’ll likely design those out and then license them to another person and let them go for it.

Joss: And it’s not just wind turbines. Wind turbines are our initial product, but we’ve realized that our initial technology is not just applicable to wind turbines, it’s applicable to any system that is essentially using fluid, whether it be air or water, to rotate another system or vice versa for the system to rotate the air or fluid.

Joss: Industrial ventilation, HVAC systems for large building such as we have here at the Uni. We can improve the efficiency of the air or fluid movement systems within those. And they are much larger markets than wind turbines. Ultimately, we see wind turbines as our beachhead product, we want to tie them in with other renewable systems to allow people to basically go off grid completely or produce their own energy to become part of the energy network. We’ve seen solar panels, batteries, what other renewable generation may be out there, we love all that and we want to become a part of that.

Adam: Do you see a world in the future where it is all renewable?

James: 100%.

Joss: Absolutely.

It’s going to have to be. And we’re going to be part of that, and we’re going to allow people to become a part of that future.

Adam: What’s the biggest challenge in overcoming that?

Joss: People’s perceptions, I think.

James: Yeah. I think the perception of it-

There’s a bunch of challenges still.

Adam:   Speaking about people perceptions of renewable energy, this is a great insight by James about changing those perceptions.

James: Yeah, so if you think currently … and I say this often, twenty years ago when I recall seeing the first bit of sun solar panels on someone’s roof, and the general consensus was who would put such an ugly pile of shiny glass on their roof, that’s disgusting. It totally ruins the street appeal of the house, oh my god. That’s a disaster. Now, no one gives a second look. And it’s similar for the hot water systems, right? People stuck these big silver things on the roof, and we’re all wow who would do that.

All that’s totally normal now, so if you live in a sunny location in the world, it’s quite normal to put solar panels on your roof. It should also be if you live in a windy location in the world, it’s quite normal to put some kind of wind power of your roof, be it our turbine or any other, right? That normalization might take 5, 10, 15, 20 years, but wouldn’t be great to be the people that made that normal?

Adam: There are a lot of challenges still, but with teams like Diffuse Energy working towards it, it makes me feel very confident that we are on the right path.

I want to wrap up the Diffuse Energy story with advice for anyone looking to get started from 2 of Diffuse Energy’s founders.

James: I think the biggest thing is just resilience. I think in nearly  every case now where we’ve thought oh yeah this will happen pretty easily, it hasn’t. You’ve just got to muscle  down and deal with those things. And that’s fine, that’s not the end of the world.

I think the other thing is to enjoy it. We’ve actually had an absolute ball in the last … yes, we’ve been super busy, we’ve worked really hard, but we have had a rockstar time doing it.

I’ll just make one point. I think the biggest risk that I’ve felt so far is that we don’t make the most of the opportunity in front of us. Right, there hasn’t been a … if this goes pear-shaped, I stand to lose, it’s a … man, I’ve got to make that this doesn’t go pear-shaped because I to stand to win.

Adam: And, now for some advice from the creator of the technology that Diffuse Energy is built on, Joss Kesby.

Joss: My advice would just to have a go at it because a lot of times, myself included, you think about doing things, but you think it’s too hard, or my technology isn’t good enough, or whatever reasons you think you’re not capable of doing it. It’s not true, everything can be learned, everything is possible, anything is possible, so give it a go because if you don’t then there’s 100%  chance you’ll fail, it won’t succeed. But if you do, there’s a good chance it will … sorry.

Adam: Thank you for listening to the story of Diffuse Energy. I hope you enjoyed it. Everything that was mentioned in the episode today is on the show notes page on welcometodayone.com.

Adam: Next time on welcome to day one, Christina Gerakiteys from UtopiaX.

Christina: I think I’m just a big kid at heart. I keep waiting for the day that I grow up, Adam, and I hope it never comes really.

Adam: Ratings & reviews help to keep us going and they help more people discover our stories. You can rate the show on most podcast platforms by going to ratedayone.com. That’s ratedayone.com to leave a rating on the podcast.

And, Thank you for giving this episode of Welcome to Day One your attention. This episode was created by me, Adam Spencer.

Interviews conducted by me, Adam Spencer.

A big thank you to Joss Kesby and James Bradley from Diffuse Energy for taking the time to be involved and a thank you to Newcastle University’s Integrated Innovation Network for partnering with Welcome to Day One to bring you this story. Without partners like these, our team wouldn’t be able to continue creating these episodes.

The script was written by me, Adam Spencer.

Music by Lee Rosevere, full attribution on our website welcometodayone.com

This episode was produced by me, Adam Spencer and edited by Natalie Holland.

Thank you and see you next time!

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Credits

A big thank you to Joss Kesby and James Bradley from Diffuse Energy for taking the time to be involved and a thank you to Newcastle University’s Integrated Innovation Network for partnering with Welcome to Day One to bring you this story. Without partners like these, our team wouldn’t be able to continue creating these episodes.

Music Credits

Music by Lee Rosevere.

Title: Let’s Start at the Beginning

Source: Let’s Start at the Beginning

Licence: CC BY 4.0

Thanks for listening! Catch you next time.

Adam

Adam is the host of Welcome to Day One covering the Hunter-Central Coast region.