Hypergrowth & Disruption: Lessons from Revolut and Fuse Energy
Explore the intense strategies and market insights from Fuse Energy CEO Alan Chang, covering hypergrowth, leadership, the energy crisis, and investment. Uncover actionable takeaways.
Key Insights
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Insight
Building a 'generational company' requires a 'very, very strong work ethic' and intense urgency, with leaders taking full responsibility for outcomes.
Impact
This philosophy can drive exceptional growth and innovation in startups like Fuse Energy, but may also necessitate a highly demanding work environment that challenges traditional work-life balance norms.
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Insight
Product diversification is crucial for revenue resilience against market shocks, as demonstrated by Revolut's ability to offset lost interchange revenue during COVID with trading and crypto.
Impact
Businesses adopting diversified product strategies can better withstand economic downturns or sector-specific challenges, offering increased stability and investment appeal.
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Insight
The UK's energy crisis stems from extreme over-regulation and inefficient, non-tech-driven incumbent energy companies, hindering new infrastructure development.
Impact
This highlights a significant market opportunity for tech-centric energy disruptors and underscores the urgent need for regulatory reform to unlock capital and lower energy costs in the UK.
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Insight
Claims of '100% renewable' energy are misleading due to intermittency challenges and the current cost-prohibitive nature of large-scale battery storage.
Impact
Investors and policymakers must approach renewable energy targets with a realistic understanding of infrastructure limitations and the need for a diversified, reliable energy mix beyond just renewables.
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Insight
China's energy policy, characterized by deregulation, no subsidies, and massive infrastructure build-out across all energy types, serves as an exemplary model for achieving low-cost, abundant power.
Impact
Western economies, particularly the UK, could learn from China's pragmatic, growth-oriented approach to energy policy to combat rising costs and improve energy security, despite geopolitical differences.
Key Quotes
"If you have a gun pointed to your head today, would you have done more? If the answer is yes, that means you're not doing a good job."
"Excuses don't matter. If you're a leader of an area in the company, excuses don't matter. If you succeed, you get all the praise. If you fail, you get all the blame. And it does not matter why you failed."
"There's no such thing as harmstone renewable. ... Any energy company that's claiming that Harmsen renewable is a is is a complete lie."
Summary
The Relentless Pursuit of Generational Companies: Insights from Alan Chang
In an era where many businesses prioritize work-life balance, the co-founder and CEO of Fuse Energy, Alan Chang, offers a starkly different philosophy for building a "generational company." Having played a pivotal role in scaling Revolut to a $75 billion valuation, Chang now leads Fuse Energy, which has achieved a remarkable 10x revenue growth year-on-year since its inception. His insights provide a compelling look into the mindset required for extreme velocity and market disruption.
The Imperative of Intense Work Ethic and Speed
Chang champions an "amp it up" culture, driven by urgency and an unwavering focus on results. This ethos, honed during his early days at Revolut, means constantly pushing teams and emphasizing that "we're not moving fast enough." For leaders, excuses are irrelevant; only outcomes matter. This creates an environment of extreme accountability, where success garners praise and failure brings blame, irrespective of the reasons.
Chang contrasts this with traditional notions of work-life balance, asserting that such intensity is the singular path to building truly transformative, generational companies. He advises those not aligned with this demanding environment to seek opportunities elsewhere.
Strategic Diversification and Execution
A key lesson from Revolut's success, which Chang has applied to Fuse Energy, is the critical importance of product diversification. During the COVID-19 lockdowns, Revolut's interchange revenue plummeted, but its diversified offerings in trading and crypto soared, buffering the company's financial health. This strategy underlines the need for resilience against unforeseen market shocks, advocating for an "expansionist mindset" that seeks to pursue multiple opportunities by building more leadership capacity, rather than limiting focus.
Navigating the Energy Crisis: UK Challenges and Global Models
Chang firmly states that the UK is already in a deep energy crisis, primarily due to over-regulation and the inefficiency of outdated, non-technology-driven incumbent energy companies. He highlights the absurdities of the planning process for new infrastructure and debunks common myths around "100% renewable" energy, explaining its practical limitations due to intermittency and storage costs. Power, he notes, is not fungible across time and space, leading to waste even when renewable sources are abundant.
In stark contrast, Chang points to China as an exemplary model for energy policy. China's approach of deregulating building, eschewing subsidies, and building "everything" – from solar and wind to coal and grid infrastructure – has resulted in significantly lower energy costs and massive per capita consumption growth, driving an overall higher quality of life. This pragmatic, results-driven approach stands as a stark challenge to Western policies.
A Vision for Abundant Energy and Disruptive Investment
Fuse Energy's ambition is to make power so cheap and abundant that builders, including AI, no longer need to consider its cost. This vision underpins the company's rapid growth and its aim to surpass giants like Shell. Chang also shares insights on funding, advising founders to accurately value their company and wait for optimal terms, acknowledging that he underestimated Fuse's early worth. He foresees a future where companies like Revolut could become trillion-dollar entities, particularly if they crack the US market.
In a world increasingly reliant on technology and energy, Chang's blend of intense leadership, strategic foresight, and clear-eyed market analysis offers invaluable lessons for investors, leaders, and entrepreneurs alike.
Action Items
Adopt an outcome-focused leadership culture where 'excuses don't matter' for failures, promoting extreme accountability among leaders.
Impact: This can accelerate project execution and foster a high-performance environment, directly influencing a company's ability to achieve aggressive growth targets.
Proactively pursue product diversification across multiple revenue streams to build resilience against market volatility.
Impact: By not relying on a single product or service, companies can create more robust business models, safeguarding revenue and investor confidence during industry shifts.
Lobby for significant deregulation and simplified planning processes to facilitate faster infrastructure development in critical sectors like energy.
Impact: Reducing regulatory hurdles can unlock substantial private capital for infrastructure projects, leading to lower operating costs and enhanced competitiveness for businesses.
Rethink hiring strategies to prioritize candidates who 'deeply care' about the company's mission and demonstrate strong work ethic, beyond just IQ or specific technical language knowledge.
Impact: Hiring for intrinsic motivation and commitment can lead to more dedicated and adaptable teams, which are crucial for rapid scaling and tackling complex challenges in fast-paced environments.
Evaluate and adjust KPIs to prevent unintended second-order consequences, ensuring metrics truly align with long-term strategic goals rather than incentivizing counterproductive behaviors.
Impact: This ensures that performance measurement drives genuine value creation and avoids gaming of the system, optimizing resource allocation and strategic focus.