March 11, 2025 • 34 mins
Welcome to the very first episode of Cool Air, Hot Takes, the podcast that keeps HVAC pros ahead of the curve with the latest industry insights, trends, and of course a hot take or two.
Hosts Charlie Jelen and Dan Gentry - HVAC experts with over 30 years of experience between them and a friendship dating back to middle school - kick things off with their hottest takes on where the industry is heading. Geothermal? Getting big. CO₂ refrigerants? Gaining traction. Residential cold climate heat pumps? A game-changer.
In this episode, we cover:
- HVAC industry headlines – A startup tackling building electrification, and the most (and least) lucrative states for HVAC techs.
- Venture Capital in HVAC – We sit down with Jon Horne, Managing Director at Idea Fund, to break down how venture capital money is shaping the industry. Where do the best HVAC startup ideas come from? How do investors decide what’s worth betting on? And why is now the most disruptive time HVAC has seen in decades?
- Hot or Cold? – AHR Expo Innovation Awards edition! Are stainless steel boilers really that innovative? Is CO₂ the refrigerant of the future? And what’s the deal with LG’s cold climate heat pump?
Got a hot take? A funny job site story? A new tool saving you time and money? We want to hear it! Email us at CoolAir.HotTakes@Trane.com for a chance to be featured. To learn more about the show, check us out here.
If you liked the show, hit follow, rate, and review wherever you get your podcasts. Until next time, stay cool, and keep those takes hot.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Charlie (00:02):
You're listening to Cool Air Hot Takes. Welcome.
Welcome. Welcome to the firstepisode of Cool Air Hot Takes, a
brand new podcast that we'regonna do this every two weeks.
Dan (00:19):
We're gonna talk about anything and everything from the
world of buildings, HVAC, andenergy.
Charlie (00:25):
We're your hosts. I'm Charlie Jelen. And I'm Dan
Gentry. And between us, we'vegot over thirty years of
industry experience. So Istarted at Ferris State
University and honestly fell inlove with HVAC at a
Dan (00:37):
modular equipment manufacturer. After that, moved
over to train in productsupport, and now I help design
some of the most complex systemsas an applications engineer.
Charlie (00:46):
And my background is in engineering with Stinson Energy
Modeling, product management,application engineering. I spent
a few years on the contractingside of our business, and now
I'm a sales leader for some ofour next generation
technologies.
Dan (00:57):
And, amazingly, we've been friends for even longer.
Charlie (00:59):
A friendship that started at Longfellow Middle
School. Dan, do
Dan (01:03):
you remember the mascot? Those were the Longfellow
Trojans.
Charlie (01:07):
The Trojans. The Trojans.
Dan (01:09):
Green and white.
Charlie (01:10):
And we somehow both found our way back into this
exciting and sexy world of HVAC,and we're starting a podcast to
bring you along for the ride.
Dan (01:18):
We've got everything. We're covering stuff from industry
insights, cool new tools, bigtrends. Think about
decarbonization. We're gonnatalk about energy efficiency, of
course, and really cool newupcoming things like artificial
intelligence and how thataffects you, your operations,
your buildings. So whetheryou're listening in your van,
(01:38):
rolling between jobs, sitting atyour desk, catching lunch, or
you just wanna catch up onwhat's going on in the industry,
we are excited to have you guyshere.
Charlie (01:52):
My hot take for the week is definitely going to be,
I think, geothermal systems.From the amount of geothermal
system projects we do today, weare going to triple the amount
of geothermal projects. Maybenot this year, maybe not in one
year, but by 2030, we are gonnado way more geothermal systems.
We're gonna have to do a a wholeepisode on geothermal.
Dan (02:10):
I was just gonna say, I mean, geo's getting hot.
Charlie (02:13):
It it's getting hot. It works.
Dan (02:15):
It is there's a lot of geo going on and new advancements.
It's exciting.
Charlie (02:20):
So anyway, that's my hot take. There you go. That's
my hot take. What what do yougot? What's your hot take for
the episode?
Dan (02:24):
No. That that that's that's pretty hot. I tell you what,
what I really like I wanna gofor my hot take. I just think
this episode and this podcast ishot.
Charlie (02:37):
I am even talking about this. Can we do that?
Dan (02:41):
I'll have to think about my hot take.
Charlie (02:43):
That's a self serving hot take right there.
Dan (02:45):
Well, I'm gonna tie to your geothermal. Like, there's I
think there's been a lot ofthere's a lot of new prod
there's there's been a lot ofgeothermal products out there,
but there's more and moregeothermal products out there.
Like, I'm gonna I could even saygeothermal could be hot. I think
it's very exciting because it'sa very efficient system, can be
very sustainable. I like that.
Charlie (03:04):
Well, just like seventh grade math with missus Motter
Dan (03:08):
Just copying right off. Right over the shoulder. Right
over the shoulder.
Charlie (03:12):
Alright. So here here's the lineup for today, listener.
We are gonna go through someHVAC headlines. We're gonna get
you up to speed on on some ofthe things that we saw in
headlines that that lookedinteresting, and we wanna get
out there. We're gonna talk withone of our good friends, John
Horn.
He's the managing director of aventure capital company called
the Idea Fund. We're gonna talkabout where VC funds are at,
(03:32):
what they're into today, andwhat that looks like over time.
And then we're gonna go into, Italked about this earlier, the
innovation awards for the HRExpo in a little feature that we
like to call cool or hot. Or hotor cold. Hot or cool.
Either one. HVAC headlines. Yournews today. Alright, Alright,
(03:57):
listener. It's 05:00 inShanghai.
That means it's time for yourheadlines. First one, startup
aims to decarbonize bigbuildings without hassling
tenants. This one is from CanaryMedia. The startup name on this
one is Hydronic ShellTechnologies. What caught my eye
on this one is a lot of largecities are looking to reduce
their emissions and andprimarily electrify.
(04:18):
And large multifamily high riseresidential buildings are going
to struggle with this withelectrification, primarily
moving to heat pumps. Kind ofthe core of this is the current
heating technology is a lot ofhigh temperature heat or steam
heat probably, a lot of steamheat for for older cities. And
so when we look to electrifythese systems, we wanna try to
(04:39):
use heat pumps. One of thethings that we need to do there
is we need to move to lower hotwater temperatures. With that
transition, we need to start toreplace the terminal units.
We need to move to more rows,bigger pipes. And so for those
who don't understand what I'msaying here, the terminal
equipment is that thing in theroom that actually makes the
space hot or cold. Alright. Sowhat this company is looking to
(05:01):
do, what the startup is lookingto do, is actually create a new
facade on the building in orderto make it easier to replace the
terminal equipment and run thepipes. And so if you're you can
imagine if you own a largebuilding in one of these big
cities and you want to electrifywith heat pumps and you have to
replace all the terminalequipment that means you have to
(05:21):
get into every space, right,which means you're going to have
to displace renters or you'regonna have to significantly
hamper their day to dayschedule.
Sounds expensive. It sounds veryexpensive. And so what this
startup is looking to do is onthe outside of the building,
it's like Lego blocks or likeTetris, is build up this new
(05:41):
facade that runs the pipes andnew terminal equipment on the
outside of the building so thatyou can put air to water heat
pumps on the ceiling, water towater heat pumps in the
basement, and you can run allthat pipe work on the outside of
the building. On top of that,you increase insulation. You
have better infiltration.
It's a really interesting way totry to get at that problem.
Dan (06:02):
That is very cool. It's a really innovative idea. I I like
it.
Charlie (06:07):
Yeah. I like it too.
Dan (06:09):
I mean, if it's I think if it's cost effective, it looks
very cool. It's a very neatidea.
Charlie (06:13):
Yeah. The cost effective.
Dan (06:14):
The cost is reasonable. I think this could be a I could
see that.
Charlie (06:17):
Yeah. We'll see where the cost goes. The first demo
project is in Syracuse, NewYork. It looks like it's
scheduled for completion midtwenty twenty six. So it's a
ways out, but very cool concept.
Can't wait to to follow-up onthe case study there. Alright.
Next headline. I think this thisone caught my eye and and
instantly knew we were gonna putit on here. Headline, most
(06:38):
lucrative states to be an HVACtechnician.
Oh, yeah. This one's from ACHRNews.
Dan (06:43):
Here we go.
Charlie (06:44):
Alright, Danny boy. Top five most lucrative states. Take
a guess. What do you got?
Dan (06:51):
I mean, I'm gonna guess something like, I don't know,
like one of those big state outEast, Massachusetts, New York.
Charlie (06:59):
Massachusetts, not on the list. They are number 36.
Dan (07:03):
Oh, wow. So, we gotta go somewhere else. We go to we go
South. We go Midwest. What aboutthe Dakotas?
Charlie (07:13):
Good guess. So the way that they did these rankings,
they looked at the averageannual technician salary, and
then they also looked at thecost of living ratio. So they
they put the cost of livingratio at a hundred for the
average across The US. If you'reunder a hundred, that means your
dollar goes further. If you'reover a hundred, it does not go
as far.
So at number five, very goodguess, North Dakota, average
(07:34):
annual salary for a technician,sixty four thousand dollars a
year. The cost of living ratioat 95.
Dan (07:40):
Look at that, there
Charlie (07:41):
you go, North Dakota. All right, next on the list
number four, New Jersey, dollars70 eight thousand that is I
believe the second highestaverage for technicians. Cost of
living ratio a little higher114, but right up there way to
go New Jersey. Third, numberthree, Missouri, 60 two thousand
dollars a year, 89 ratio forcost of living. Number two,
(08:02):
Minnesota, 70 one thousanddollars, 90 four ratio.
Number one, the Fighting Illini,Illinois, 70 7 Thousand Dollars
for the average HVAC technicianand a cost of living ratio of
92.
Dan (08:16):
Well, because we're here, what about the Badger State?
Just because, you know, it'sself interested.
Charlie (08:21):
There you go. Wisconsin came in at number six. Okay.
Okay. 54,000.
Dan (08:25):
It's respectable.
Charlie (08:26):
All right. Let's look at the other side of this. The
five worst, the lowest payingaverage annual HVAC technician.
What do you got for a guess?
Dan (08:35):
Doctor. Oh, I'm going to guess Louisiana. Doctor.
Charlie (08:41):
No. I mean, I don't know why you're calling out
Louisiana. I'm just I don't Idon't know. I got to pick a
state.
Dan (08:47):
I only got 52 places.
Charlie (08:48):
They're not on the top five lowest. Number five, in
terms of worst, is Maine,dollars fifty six thousand a
year for an average
Dan (08:56):
see that coming.
Charlie (08:57):
I know. Me yeah. I agree. $1.10 for cost of living
up in in Maine. Florida, numberfour, $51,000 a year for an
average annual technician.
That is the third my mind. Yeah.Don't you have a ton
Dan (09:12):
of cooling? I did too.
Charlie (09:13):
That's exactly where my head went to. It's like tons of
chilled water plants, big stuff.Wow. Yeah. 51,000 is the third
lowest in terms of averageannual HVAC technician.
Yeah. Number three, Vermont, 70thousand dollars a year, which
is actually pretty high forVermont, but their cost of
living is $1.47. Wow. Yeah.$1.47.
(09:34):
That means they basically pay50% more for for everyday life.
There you go. Number two,Washington, DC, also $70,000 a
year. Not a surprise there.Number one, though.
Number one, the worst place Ishouldn't say the worst. In
terms of being lucrative for aVerne HVC technician, Hawaii.
Okay. And now, this is quiteinteresting. They have the
(09:56):
highest annual average salary at$80,000 a year, but the cost of
living ratio is one eighty, 80percent more than the average
annual state.
Dan (10:06):
I I guess I'm surprised by the list, but it's the cost of
living.
Charlie (10:10):
It's cost yeah?
Dan (10:11):
Cost of living.
Charlie (10:12):
Yeah. Managed family, I guess. Well you know what they
say in, in the real estatebusiness?
Dan (10:17):
Buy low, sell high.
Charlie (10:20):
I think that's the stock market. Location,
location, location. That's whatI
Dan (10:24):
was getting at. Interesting.
Charlie (10:26):
There you go. And to be fair, across the board, I think
all of these are going to go upsignificantly in the space
because we are looking for moreand more HVAC technicians every
day. We have a shortfall there.So, hey, if you're looking to be
an HVAC technician, now's a goodtime to get in.
Dan (10:40):
They deserve it. Pay them more. We need more.
Charlie (10:42):
I love it. Here we go. There we go. Alright. So that's
it for the headlines today.
Next up, we are going tointerview John Horn. He's the
managing director at a venturecapital fund called the Idea
Fund. Stay tuned. Alright. Firstepisode, first interview.
(11:03):
Welcome, John Horn, to Cool AirHot Takes. Before we get into
the the actual part of this, Igotta give you a little
background on John. John is akey member of the downhill ski
team, Vildsoe. He was the ace onthe Central High School pitching
staff. He is an avidsnowmobiler.
He scored a 36 on his highschool ACT. He is probably the
(11:25):
smartest person I know. Ifyou're wondering how I know all
this, no, it is not on hisWikipedia page. Myself, Dan, and
John, we go way back. We all areproud alumni of Central High
School.
So, John, thank you for coming.
Jon (11:38):
Charles, thank you for the invite. I'm honored to be on the
first and what hopefully is notthe last episode of
Charlie (11:44):
your new podcast. Oh, thank thank you for the
confidence. Very, very muchappreciated. Alright. You know
the title.
Cool Air Hot Takes is wherewe're gonna start. What's your
hot take? You can go anywherewith this one. You can go in
venture capital. You can gooutside it.
Our industry personal. What doyou got?
Jon (12:01):
Okay. Well, first thing that popped in my mind when you
guys thought I should do thisand told me what a hot take was
was that this podcast is eithergoing to end or massively
accelerate the career of one orboth of you at, train company.
But I guess and that's not meantto be a dig. I kinda thought
about it as, like, you guys arethe ones who are like, hey.
(12:22):
Here's what we're gonna say andtake it down to the corporate
communication department and getthe approval and everything.
So that was my honest firsttake. But I guess for purposes
of you could edit this out, Iassume.
Charlie (12:34):
Yeah. Yeah.
Jon (12:36):
We can
Charlie (12:36):
we can take that. Okay. Yeah.
Jon (12:38):
Yeah. My my actual thought was if you look at the next five
to ten years in, you know, theHVAC market taken broadly, I
think you're gonna see morechange in the next five to ten
years than you have seen in thelast fifty to a hundred years.
Charlie (12:52):
Oh, interesting. What do you think drives it?
Jon (12:54):
Well, so you look at just all industries, and they've been
impacted by technology anddisruption at different rates.
And so some of the first to bedisrupted were things like
retail, travel, media. You know,like, what's CBS? Right? You
know, streaming turned thatupside down.
Amazon turned retail upside downin a lot of ways. You have not
seen that fundamental sort ofreshuffling of the deck in a
(13:14):
number of other industries, andHVAC building management is one
of them. You guys maybe willtell me I'm wrong on that. But,
you know, the fundamentalproducts are the same, and more
importantly, the market leadershave essentially been the same.
Mhmm.
Mhmm. You know, when you lookat, like, the auto industry with
fifteen years ago, Tesla is nota public company. Today, Tesla
(13:36):
has more value than the nextnine auto companies combined.
Right? Like, you have not seenthat unseating of incumbents in
this industry that you have inothers.
And so I think it's very timelythat that you guys are
initiating this podcast because,you know, innovation is really
starting to strike in thisindustry where it really in ways
it hasn't over the last anynumber of years.
Charlie (13:58):
I mean, I gotta tell you, I had a high bar for you
coming on the show, and and youjust you just went past it. That
was that was great. I could nothave been for a good start.
Alright. Well, let's get to you.
Tell us about the Idea Fund.What's the background? What are
you guys into?
Jon (14:14):
Sure. So Idea Fund's a venture capital fund. So that
means we manage money on behalfof third party investors, and we
invested in very early stagetechnology companies. And our
strategy is technology companiesbased sort of generally in our
part of the country, which isthe Upper Midwest. And, you
know, when you look at venturecapital, it's highly
concentrated in a fewgeographies.
Right? About 80% of venturecapital goes into California,
(14:38):
New York, Boston, you know, thetop three to four states. The
other 20% is distributed acrossthe other 46 states. We're
specifically focused onWisconsin, Minnesota, and Iowa
because we believe the kind ofinnovation that's coming is the
kind of innovation that thispart of the country is strongest
at. This kinda ties into theoriginal point where a lot of
the stuff that's really beenchanging, you know, over the
(14:59):
last twenty years of ventureinnovation is kinda consumer
driven and mass market stuff.
You know, it's not a lot of thenitty gritty b to b industries.
So, like, you know, you stillwant your Stanford dorm room kid
or whatever on the team. But tofound a new company in the HVAC
industry, you know, in supplychain and, you know, in in the
(15:21):
traditional b to b industries,you know, you really need
industry expertise. So that'sthe kind of companies and
founders that we really tend toinvest in. There's people coming
in with deep industry expertiseand areas that our part of the
country is strong in.
Charlie (15:33):
Yeah. We're gonna get into a little bit of that, where
those ideas are coming from andand who should be on the lookout
for them. But in general, you'retalking about, like, the trend
of venture capital. Is isventure capital growing, or is
it more of like a zero sum gamewhere the the money's relatively
similar and it's just gettingshuffled around between what's
hot and what areas of thebusiness are are are going? Or
(15:54):
is venture capital growing likecrazy?
Jon (15:56):
Well, there's a couple ways you can look at it. You know,
venture capitalists and venturecapital funds in general, it's
it's really California centric,and it's they're really kinda
herd animals where you see thesebig sort of cyclical swings. You
You know, we saw the .com boomand then the .com bust.
Charlie (16:12):
Mhmm.
Jon (16:12):
And then we are on sort of the bust side of another cycle
right now where, you know, 2021,'20 '2, we saw massive amounts
of money flowing into venturecapital. Now we saw a just as
massive pullback, where 2024,there was this was the lowest
year for venture capitalfundraising out of the last ten
years, twenty twenty four was.Wow. Okay. So there's, like,
been this massive pullback inventure capital.
(16:34):
And now, of course, we're onsort of into the next cycle of
AI and, you know, this massiveinvestment in AI and
infrastructure and all thisthat's going on right now. So, I
mean, you see huge swings. It'sa really cyclical industry. But
in general, that's venturecapital. When you think about,
like, taking a step back at,like, the innovation economy
Mhmm.
You know, that is justconsistently up into the right.
(16:54):
Right? As you get sort ofcompounding returns from
technological innovation, Imean, that is just only
accelerating how much technologyis impacting industry.
Dan (17:03):
How do you think the Midwest is different than, you
know, those those states thatyou mentioned are kind of like
boomer bust. Do you think theMidwest is any is gonna be
different?
Jon (17:12):
You know, I think you you gotta look at the it all comes
down to the people. You know,that's really what all all this
boils down to. And when youthink about, you know, the
traditional venture centers,there was a lot of real heavy
technical innovation that cameout of them. You know, Silicon
Valley means the Silicon chips,you know, that were there. I
mean, it was, like, really thefoundational computing elements
and stuff like that that sortof, like, gave birth to to that.
(17:33):
You know? So we don't have,like, as much of a fundamental
computing heritage and deeptechnical heritage, you know, in
this part of the country. Wehave, you know, industrial,
agriculture, supply chain, youknow, those industries that make
up 68% of US GDP. Right? And theindustries that happen to be the
least disrupted by technologytoday.
So, you know, Silicon Valley wasin the right place for
(17:56):
innovation over the last seventyfive years, whatever you wanna
call it. You know, now you'vegot this huge portion of the
economy that has not beenfundamentally transformed yet by
technology. It's been changed bydegree, right, but not
fundamentally. That's where Ithink you're gonna see the rest
of the country sort of come in,and you're gonna see some really
(18:16):
new and innovative and, I think,potentially massively valuable
companies ultimately created outof, you know, the heritage that
we have here.
Charlie (18:24):
We kinda dive down in there a little bit on the
trends. Can you back us out alittle bit? In our industry,
when we talk about technology,you'll hear people talk about,
Wow, this is at, you know, RMI,Rocky Mountain Institute or it's
at a Pacific Northwest National,like it's in a it's at a
university stage or it's inventure capital or it's early
commercial versus commercial.Can you kinda walk us through
that spectrum on how technologygoes kind of from in its infancy
(18:45):
to, like, a company, like, traincompany or or the likes having a
commercial offering?
Jon (18:51):
Yeah. It's it's interesting. And when you think
about sort of innovationgenerally, I mean, you would
think of just Amazon, forexample, as, like, an innovative
company that completely turnedindustry upside down. Mhmm. But
when you think about the valuethat Amazon delivers to its
customers, you know, itscustomers being you and me and
other Amazon subscribers, youknow, the product is identical.
Right? You're still gettingessentially all the same crap
(19:12):
you can get at Walmart oranywhere else through Amazon.
Right? It's it's the deliverymechanism. Mhmm.
So when you think aboutinnovation, like, as it relates
to the HVAC industry, one bigcategory of innovation is
product innovation, like whatyou're talking about, a new new
refrigerant, right, or, youknow, something like that.
That's like a a highly technicalproduct that starts in a lab or
starts in the brain of, youknow, some engineer and somehow
(19:34):
is funded to develop, ultimatelycommercialize, validate it to
the point that a train companycould acquire it. A whole
another category of innovationis everything else that happens
in the value chain. Right? Notjust a new product, but how
about, like, a new way to sellthe product.
Right? So how you how you reachyour customers. You know, hot
fulfillment, right, services,whether that's a live human
(19:55):
service or a software productdelivering service. But at the
end of the day, they're all whatdo you think of all these? I
mean, it comes out of a productinnovation, and somewhere in
somebody's head, there's aproduct innovation.
Right? Whether it's, you know,refrigerant or it's a process,
right, or whatever. And you youneed that. You need the
management talent, and you needcapital. Mhmm.
Right? Those are, like, thethree pieces. Right? And
(20:16):
sometimes That's
Charlie (20:17):
all I said.
Dan (20:17):
Easy peasy.
Jon (20:20):
Right. When you start to categorize it and slice it up.
And so, like, if you've gotthere's I guarantee there's
somebody sitting at every largeindustrial HVAC equipment OEM
with a brilliant productinnovation in their mind. Maybe
they've tried to run it up theflagpole and hasn't gotten
interest from the senior peopleon the team or whatever. I
guarantee there are people outthere right now that have that
idea.
(20:41):
And if they don't do somethingwith it, it's never gonna get
out into the world.
Charlie (20:45):
There you go, listener. There you go, listener. In in
the show notes, we'll we'll givewe'll give you John's, company's
email address, your inbox. We'llflood it up.
Jon (20:53):
Idea Fund VC comes straight to my email.
Charlie (20:57):
There you go. Alright. So let's let's talk about
something that you have investedin that's that's kinda close
that our listeners are probablymore interested in. We talked
about this earlier. Enoration.
Can you give us a littlebackground on on what that is
and what your role is with them?
Jon (21:10):
Yeah. It's it's a really interesting company. At their
core, they provide efficiencyservices to health systems,
building efficiency services.Okay. So what they're doing is
it's a sophisticated servicesoffering where they're making
health care buildings moreefficient.
You know, that's established.Their history is is really
interesting where theyoriginally developed as an
internal initiative at GundersonHealth System, which is, you
(21:30):
know, a large Upper Midwestpredominantly rural health
system. The CEO probably twentyyears ago made a you know, put a
stake in the ground and saidwe're gonna be net zero on
campus and actually went out andgot it done through combinations
of generation, you know,building efficiency, all the
kind of things that you guys areworking on. And they did it.
Then they had hired a number ofpeople from Trane that came in
house to sort of build this out.
(21:52):
Mhmm. At Gunderson, theyaccomplished it. And then they
got all this attentionnationally, and other health
systems started calling us andsaying, hey. Look. We wanna
become more efficient.
We've always put, you know, thepatient first. Right? So we
can't take risks on reliabilityand things like that, but it
sounds like you guys havefigured out a way to do this,
right, without taking risk. Andin fact, maybe making your
system more resilient. So theystarted doing sort of consulting
(22:14):
projects for other healthsystems and turn it into this
little internal business.
And then a few years ago, theymade the decision, hey. This
isn't our core. You know, we'revery good at this. Right? It's
very important, but it's not ourcore job.
Right? Our core job is patientcare. And so they took the
business. They're spinning itout, it's called, where they
actually separated it into itsown entity. The health system
(22:35):
still owns a piece of it, andthen they raise capital from
outside investors.
And we're we're one of theoutside investors, and now
we're, you know, we're workingwith management to try to, you
know, just grow the business andmake it a large stand alone
business.
Charlie (22:46):
So I think that's pretty maybe maybe it's not
obvious, but, like, thedifferentiation that they have
versus just any engineeringcompany walking into a health
care system is the innateknowledge, the internal
knowledge that they'vedeveloped, that they've
incubated over the years. Isthat kinda is it
Jon (23:01):
Well, you know, you get a lot of pitches, and 80% of them
are, hey. Look at this awesomeproduct I've got. Right? Mhmm.
And okay.
That that's great. Right? Like,to be a successful company, you
need a credible, valuableproduct. It's necessary, but not
sufficient. Right?
You also need, you know, a wayto talk to your customer, a way
to sell it efficiently. You needtrust with your customers, all
(23:22):
this kind of stuff. And when youthink about a health system
buyer, yes, they wanna savemoney on that percent of their
budget that is, you know, spenton energy costs. Mhmm. But they
also want a % reliability.
They want their physicians tounderstand this isn't impacting
the humidity in the OperatingRoom or specific considerations
that a health system might havethat other building owners do
(23:43):
not have. And so part of whatEnoration offers is a really
high level energy consultingbusiness, but it's also a way to
reach a certain customerpopulation efficiently and in a
way that builds trust veryquickly because these guys
really know their industry.Right? And the customer
understands that they do rightfrom the start.
Charlie (24:01):
Got it. So from your spot, what is a a successful
turn on a company likeEnoration? What did they get
into, and then where do you getout of that as a successful
venture?
Jon (24:15):
So when you look at our economics so I manage money from
third party investors. Right?And especially when we started,
a lot of the investors areindividuals investing personally
hundred thousand to a milliondollars, something like that.
And, you know, you go to themand say, hey. I'd like you to
commit 500,000 to Idea Fund.
I'm gonna go invest in 20technology companies. They're
all in the Upper Midwest. Whenwe make our initial investment,
(24:37):
they're between 0 and 2 or$300,000 a year maybe in
revenue. Mhmm. You know, they'reso early.
Our plan is at least half ofthem are gonna be complete loss
of capital.
Charlie (24:46):
Wait. What's the what's the what's the percentage?
Jon (24:48):
At least half. At least 50%.
Charlie (24:50):
Okay.
Jon (24:51):
And those are national averages, right, of companies
nationally that raise this typeof capital. Mhmm. At least half
of them % loss of capital. Okay.So, like, let's just say I'm
coming to you guys.
You got $5,000,000 in net worth.I'm looking for a hundred
thousand bucks from you. Whatkind of return do you have to
expect out of the investment inidea fund
Charlie (25:09):
Ten x? To say
Jon (25:11):
yeah. Like, think about an annual return. Right? Like Mhmm.
What's the stock market returnover on average?
Charlie (25:16):
Ten percent? Five percent? Eight?
Jon (25:18):
Yeah. 10 yeah. Ten, eight, 10, 12, whatever. So if you're
gonna get eight, ten, 12 out ofthe stock market, right, which
is a % liquid, essentially 0%failure rate, global
diversification. You know, ifyou want your money out, you
call me.
You got it two days later. Whatare you gonna need out of idea
fund?
Dan (25:32):
Do people looking for 25%?
Jon (25:34):
Yeah. Yeah. I mean, twice, large cap equities, you know,
something like that. Then that'sjust to be in the ballgame.
Right?
Like, that's just to sort of beokay. Right? So, like, say I
need net 20% return out of theportfolio. Okay. Then you take
the next step, and you say,alright.
Half of them are out. Half ofthem are zeros, national
average. You know, one or twomaybe get your money back, a
couple returns. And then reallyone or two out of 10 will
(25:57):
typically drive your portfolioreturn. Okay?
So if I'm gonna get 20% net andone out of five of them is gonna
drive the return, I mean, do youguys know math? You're gonna
need, you know, % annual returnon the winners to make up for
all the losers and get you evenat parity with the stock market.
Dan (26:16):
Yep. Right? So is that is that stressful?
Jon (26:19):
Well, you get a lot of chances.
Dan (26:20):
You know?
Jon (26:24):
Yeah. We lose one. I mean, yeah, it's they're just getting
close to really executing aplan. Right?
Charlie (26:28):
Well, a friend of ours once said, I gamble every day of
my life. Oh, that's good.
Jon (26:37):
So back to your question short answer to your question
is, I mean, I've always peoplesay 10 x. Like, you need a big
result out of these companiesfor it to be worth all the risk
you're taking on.
Charlie (26:46):
Well, John, we've held you for probably too long in
your day. But how can people getahold of you? If they think they
have something, what's the bestway to get ahold of you?
Jon (26:53):
Yeah. I'd love to talk to anybody. Idea Fund, v c as in
venture capital dot com. We'vegot a submission form on there.
It goes straight to my email.
So I'd love to talk to anybody.And we're you know, we you don't
need a business. I mean, we'vewe've come in and actually
cofounded businesses. So we canwork with a product inventor and
put something together aroundit. Love to talk to him.
Dan (27:11):
Super cool.
Charlie (27:12):
There you go, listener. Reach out to John.
Dan (27:14):
Next opportunity. Thanks for having me, guys. Thanks for
joining us, John. Veryinteresting. Up next, we're
gonna talk about the AHRInnovation Awards in a feature
we like to call hot or cold.
Don't go anywhere.
Charlie (27:27):
Is it hot or cold?
Dan (27:36):
Alright. We're back. We're gonna talk about, the AHR
innovation awards in our hot andcold segment today. So for those
of you that aren't, say,familiar with the AHR Expo,
really, what I like to compareit to is kinda like the Detroit
Auto Show of HVAC. You're gonnahave some, you know, cars that
are gonna be readily availabletoday or tomorrow.
(27:58):
You're gonna have some newinteresting things, some crazy
concepts just to kinda getpeople thinking about, oh,
that's cool, or, oh, that's kindof a strange idea. So there's a
whole bunch of differentcategories.
Charlie (28:08):
Yeah. There's 10 different categories. It spans a
lot. We're not gonna talk aboutall of them. We're gonna
concentrate on three and we'regoing to go hot or cold.
Hot means you'll like whatthey've got going there. Cold
means you don't like it so much.Alright. So number one, the
category is heating and thewinner of this year's innovation
award is ERCO with their CFRboiler. A little description
(28:30):
here, CFR is the world's firststainless steel condensing
boiler that can be installed ina category one vent making it an
ideal solution for thecommercial retrofit market.
Danny Boy, what what say you?
Dan (28:43):
You know, I'm in a it's a boiler. I'm seeing it. It looks
like a boiler. It is a boiler,so I'm not thinking it's, like,
that crazy and innovative. So itmakes me a little cool.
If category one vent is like agame changer and we can install
these in a a whole new place andit changes everything, it could,
(29:04):
I could get hot on it, but I I II think I'm cold. It's it's a
boiler.
Charlie (29:08):
I'm with you on this one. And, you know, no offense
to ERCO and CFR. I'm sure it's agreat, great product. But when I
was thinking like innovationaward, bleeding edge, like
what's out there for theespecially for the heating
category, which you know, ourindustry is going through a
massive change right now. Yeah,I'm gonna say cold on this one
too.
Okay. Okay. There you go. Allright. Next category is the
(29:29):
refrigeration category.
And the winner of this, thisyear innovation award was
Danfoss Bak CO two transcriticalsix cylinder CO two compressor
that has expanded range toenable larger refrigeration and
heat pump applications with asmaller footprint, strong energy
efficiency performance.
Dan (29:49):
This is an interesting one too where I kinda like, you
know, I'm I'm, I'm not I haven'tseen a lot of good c o two stuff
around here. It's a it seemslike a little more of a
difficult, more specialized,application, if you will. I
know, over in Europe, they'vedone some really cool things
with some large scale stuff. SoI'm I I'm, like, kinda leaning
(30:09):
towards, like, hot. It seemslike kinda
Charlie (30:11):
in in the the fence. Pick one.
Dan (30:13):
In, but,
Jon (30:15):
I'm hot on
Charlie (30:18):
it. Yeah. You were leading cold the whole time when
hot. I am definitely hot onthis. I I think CO2 is gonna be
a refrigerant.
We're going to leverage a bunchmore in the future. Where we're
at right now, going from, youknow, higher GWP refrigerants to
lower GWP refrigerants,incorporating more natural
refrigerants. I think the morewe can use c o two in
applications, it's gonna pushthe industry forward and just
(30:39):
definitely some limitations toit. But I like the innovation. I
think
Dan (30:43):
it's the change going.
Charlie (30:44):
I'm I'm hot. I'm hot on that one.
Dan (30:46):
Where's the hot guy right there?
Charlie (30:48):
Alright. Last category. The last category is
sustainability category. Thewinner here was LG for their
residential cold climate heatpump. I'm not even gonna offer
this one up.
We're both hot on this. Thereare a bunch of different
companies that that entered intothe cold climate challenge, the
DOE that have passed through it.I think LG was part of that.
Trane was part of that. Carrier,I believe, was in there too.
(31:11):
The number of companies that aregoing after this segment, it is
absolutely critical for ourindustry to move forward. We
have to be able to use air towater heat pumps in all the
climates that we're we'reoperating in.
Dan (31:22):
It's kind of a slam dunk. I mean, whoever can get there,
good for you. Good job. Thankyou. Let's do it.
Charlie (31:29):
Alright. Before Dan steals another one of my hot
takes, and we close out theepisode, we are going to do a
stat of the day. For those ofyou who listen to Sports Talk
Radio, this is a absolute 100%rip off from the Dan Patrick
Show. So thank you, Dan and theDanettes. I'm sure you guys are
gonna be listening to the show.
Here we go. Stat of the day.
Dan (31:47):
Here it comes, Joe.
Charlie (31:48):
Stat of the day. Stat of the day.
Dan (31:51):
Stat of the day. Alright, Charlie. What do we got? What's
the stat of the day, bud?
Charlie (31:55):
Alright. This is gonna be applicable mass mass market
here. The stat is the slowestdepreciating cars in America
today, model year 2018 topresent. So which cars have lost
their value the least in thelast five years? Take a guess at
top 10.
I'm gonna run through themquick.
Dan (32:14):
I'm gonna give, like, a Toyota Corolla, a, Honda Civic,
a, Toyota Tacoma,
Charlie (32:23):
a
Dan (32:23):
a minivan of some sort.
Charlie (32:25):
I would have definitely put a minivan on there. You did
really well. That was three ofthe top 10. Okay. So number 10,
Toyota Corolla, 25%depreciation.
Number nine, Subaru Crosstrek.Number eight, Toyota CR V. Okay.
Number seven, Chevy Camaro.
Dan (32:39):
I did not see that coming.
Charlie (32:40):
That one surprised me. Wow. Number six, Subaru BRZ.
Honestly, don't even know whatthat is even. Number five, Honda
Civic.
Jon (32:49):
Hey, there
Charlie (32:49):
you go. To Scott Wenger. Number four, Daniel,
this one should be as close tohome. The Jeep Wrangler. How did
you not get that one?
Number three, Toyota Tacoma.Okay. Rob Jordan, the squire of
the night. 20% depreciation.Goodbye.
Number two, the last two the toptwo are both Porsches, which
okay. I I
Dan (33:09):
wouldn't have guessed that.
Charlie (33:10):
No. But,
Dan (33:11):
there you go.
Charlie (33:11):
So remember, number two, Porsche Cayman, 18%, and
number one, the Porsche nineeleven at only a 9%
depreciation. Maybe go five
Jon (33:19):
years.
Dan (33:20):
Myself up a Porsche after this.
Charlie (33:24):
There you go. Thank you. Thank you for listening to
the first episode of Cool AirHot Takes. Thank you to John
Horn for joining the show. Avery special thank you to our
wonderful producer, ElenaGuthrie.
And finally, a thanks to ChristyUpton for getting this all
pulled together. Please join usnext time. We have a very
special guest, a friend of theshow and therefore a friend to
(33:45):
you, mister Joe Heger. He's acompressor engineering leader
and he'll be giving us a peekbehind the curtain on some of
the latest compressortechnologies. If you wanna get
in touch with us, please reachout coolair.hottakes@train.com.
We wanna hear what you have forquestions. We wanna hear what
you have for hot takes. Anythingfunny from the jobs you've been
working on, any funny stories,like that one time that you got
(34:07):
called out to fix some ductworkbecause an inmate tried to
escape through it. It? Whateverit is, maybe it's some new tools
you have saving you time, savingyou money, please reach out.
We'd love to feature it on theshow.
Dan (34:17):
If you like the show, please like and subscribe, give
us a rating, and review for thepodcast wherever you listen. So
until next time, stay cool andkeep those takes hot.
You're listening to Cool Air Hot Takes. Welcome.
Welcome. Welcome to the firstepisode of Cool Air Hot Takes, a
brand new podcast that we'regonna do this every two weeks.
Dan (00:19):
We're gonna talk about anything and everything from the
world of buildings, HVAC, andenergy.
Charlie (00:25):
We're your hosts. I'm Charlie Jelen. And I'm Dan
Gentry. And between us, we'vegot over thirty years of
industry experience. So Istarted at Ferris State
University and honestly fell inlove with HVAC at a
Dan (00:37):
modular equipment manufacturer. After that, moved
over to train in productsupport, and now I help design
some of the most complex systemsas an applications engineer.
Charlie (00:46):
And my background is in engineering with Stinson Energy
Modeling, product management,application engineering. I spent
a few years on the contractingside of our business, and now
I'm a sales leader for some ofour next generation
technologies.
Dan (00:57):
And, amazingly, we've been friends for even longer.
Charlie (00:59):
A friendship that started at Longfellow Middle
School. Dan, do
Dan (01:03):
you remember the mascot? Those were the Longfellow
Trojans.
Charlie (01:07):
The Trojans. The Trojans.
Dan (01:09):
Green and white.
Charlie (01:10):
And we somehow both found our way back into this
exciting and sexy world of HVAC,and we're starting a podcast to
bring you along for the ride.
Dan (01:18):
We've got everything. We're covering stuff from industry
insights, cool new tools, bigtrends. Think about
decarbonization. We're gonnatalk about energy efficiency, of
course, and really cool newupcoming things like artificial
intelligence and how thataffects you, your operations,
your buildings. So whetheryou're listening in your van,
(01:38):
rolling between jobs, sitting atyour desk, catching lunch, or
you just wanna catch up onwhat's going on in the industry,
we are excited to have you guyshere.
Charlie (01:52):
My hot take for the week is definitely going to be,
I think, geothermal systems.From the amount of geothermal
system projects we do today, weare going to triple the amount
of geothermal projects. Maybenot this year, maybe not in one
year, but by 2030, we are gonnado way more geothermal systems.
We're gonna have to do a a wholeepisode on geothermal.
Dan (02:10):
I was just gonna say, I mean, geo's getting hot.
Charlie (02:13):
It it's getting hot. It works.
Dan (02:15):
It is there's a lot of geo going on and new advancements.
It's exciting.
Charlie (02:20):
So anyway, that's my hot take. There you go. That's
my hot take. What what do yougot? What's your hot take for
the episode?
Dan (02:24):
No. That that that's that's pretty hot. I tell you what,
what I really like I wanna gofor my hot take. I just think
this episode and this podcast ishot.
Charlie (02:37):
I am even talking about this. Can we do that?
Dan (02:41):
I'll have to think about my hot take.
Charlie (02:43):
That's a self serving hot take right there.
Dan (02:45):
Well, I'm gonna tie to your geothermal. Like, there's I
think there's been a lot ofthere's a lot of new prod
there's there's been a lot ofgeothermal products out there,
but there's more and moregeothermal products out there.
Like, I'm gonna I could even saygeothermal could be hot. I think
it's very exciting because it'sa very efficient system, can be
very sustainable. I like that.
Charlie (03:04):
Well, just like seventh grade math with missus Motter
Dan (03:08):
Just copying right off. Right over the shoulder. Right
over the shoulder.
Charlie (03:12):
Alright. So here here's the lineup for today, listener.
We are gonna go through someHVAC headlines. We're gonna get
you up to speed on on some ofthe things that we saw in
headlines that that lookedinteresting, and we wanna get
out there. We're gonna talk withone of our good friends, John
Horn.
He's the managing director of aventure capital company called
the Idea Fund. We're gonna talkabout where VC funds are at,
(03:32):
what they're into today, andwhat that looks like over time.
And then we're gonna go into, Italked about this earlier, the
innovation awards for the HRExpo in a little feature that we
like to call cool or hot. Or hotor cold. Hot or cool.
Either one. HVAC headlines. Yournews today. Alright, Alright,
(03:57):
listener. It's 05:00 inShanghai.
That means it's time for yourheadlines. First one, startup
aims to decarbonize bigbuildings without hassling
tenants. This one is from CanaryMedia. The startup name on this
one is Hydronic ShellTechnologies. What caught my eye
on this one is a lot of largecities are looking to reduce
their emissions and andprimarily electrify.
(04:18):
And large multifamily high riseresidential buildings are going
to struggle with this withelectrification, primarily
moving to heat pumps. Kind ofthe core of this is the current
heating technology is a lot ofhigh temperature heat or steam
heat probably, a lot of steamheat for for older cities. And
so when we look to electrifythese systems, we wanna try to
(04:39):
use heat pumps. One of thethings that we need to do there
is we need to move to lower hotwater temperatures. With that
transition, we need to start toreplace the terminal units.
We need to move to more rows,bigger pipes. And so for those
who don't understand what I'msaying here, the terminal
equipment is that thing in theroom that actually makes the
space hot or cold. Alright. Sowhat this company is looking to
(05:01):
do, what the startup is lookingto do, is actually create a new
facade on the building in orderto make it easier to replace the
terminal equipment and run thepipes. And so if you're you can
imagine if you own a largebuilding in one of these big
cities and you want to electrifywith heat pumps and you have to
replace all the terminalequipment that means you have to
(05:21):
get into every space, right,which means you're going to have
to displace renters or you'regonna have to significantly
hamper their day to dayschedule.
Sounds expensive. It sounds veryexpensive. And so what this
startup is looking to do is onthe outside of the building,
it's like Lego blocks or likeTetris, is build up this new
(05:41):
facade that runs the pipes andnew terminal equipment on the
outside of the building so thatyou can put air to water heat
pumps on the ceiling, water towater heat pumps in the
basement, and you can run allthat pipe work on the outside of
the building. On top of that,you increase insulation. You
have better infiltration.
It's a really interesting way totry to get at that problem.
Dan (06:02):
That is very cool. It's a really innovative idea. I I like
it.
Charlie (06:07):
Yeah. I like it too.
Dan (06:09):
I mean, if it's I think if it's cost effective, it looks
very cool. It's a very neatidea.
Charlie (06:13):
Yeah. The cost effective.
Dan (06:14):
The cost is reasonable. I think this could be a I could
see that.
Charlie (06:17):
Yeah. We'll see where the cost goes. The first demo
project is in Syracuse, NewYork. It looks like it's
scheduled for completion midtwenty twenty six. So it's a
ways out, but very cool concept.
Can't wait to to follow-up onthe case study there. Alright.
Next headline. I think this thisone caught my eye and and
instantly knew we were gonna putit on here. Headline, most
(06:38):
lucrative states to be an HVACtechnician.
Oh, yeah. This one's from ACHRNews.
Dan (06:43):
Here we go.
Charlie (06:44):
Alright, Danny boy. Top five most lucrative states. Take
a guess. What do you got?
Dan (06:51):
I mean, I'm gonna guess something like, I don't know,
like one of those big state outEast, Massachusetts, New York.
Charlie (06:59):
Massachusetts, not on the list. They are number 36.
Dan (07:03):
Oh, wow. So, we gotta go somewhere else. We go to we go
South. We go Midwest. What aboutthe Dakotas?
Charlie (07:13):
Good guess. So the way that they did these rankings,
they looked at the averageannual technician salary, and
then they also looked at thecost of living ratio. So they
they put the cost of livingratio at a hundred for the
average across The US. If you'reunder a hundred, that means your
dollar goes further. If you'reover a hundred, it does not go
as far.
So at number five, very goodguess, North Dakota, average
(07:34):
annual salary for a technician,sixty four thousand dollars a
year. The cost of living ratioat 95.
Dan (07:40):
Look at that, there
Charlie (07:41):
you go, North Dakota. All right, next on the list
number four, New Jersey, dollars70 eight thousand that is I
believe the second highestaverage for technicians. Cost of
living ratio a little higher114, but right up there way to
go New Jersey. Third, numberthree, Missouri, 60 two thousand
dollars a year, 89 ratio forcost of living. Number two,
(08:02):
Minnesota, 70 one thousanddollars, 90 four ratio.
Number one, the Fighting Illini,Illinois, 70 7 Thousand Dollars
for the average HVAC technicianand a cost of living ratio of
92.
Dan (08:16):
Well, because we're here, what about the Badger State?
Just because, you know, it'sself interested.
Charlie (08:21):
There you go. Wisconsin came in at number six. Okay.
Okay. 54,000.
Dan (08:25):
It's respectable.
Charlie (08:26):
All right. Let's look at the other side of this. The
five worst, the lowest payingaverage annual HVAC technician.
What do you got for a guess?
Dan (08:35):
Doctor. Oh, I'm going to guess Louisiana. Doctor.
Charlie (08:41):
No. I mean, I don't know why you're calling out
Louisiana. I'm just I don't Idon't know. I got to pick a
state.
Dan (08:47):
I only got 52 places.
Charlie (08:48):
They're not on the top five lowest. Number five, in
terms of worst, is Maine,dollars fifty six thousand a
year for an average
Dan (08:56):
see that coming.
Charlie (08:57):
I know. Me yeah. I agree. $1.10 for cost of living
up in in Maine. Florida, numberfour, $51,000 a year for an
average annual technician.
That is the third my mind. Yeah.Don't you have a ton
Dan (09:12):
of cooling? I did too.
Charlie (09:13):
That's exactly where my head went to. It's like tons of
chilled water plants, big stuff.Wow. Yeah. 51,000 is the third
lowest in terms of averageannual HVAC technician.
Yeah. Number three, Vermont, 70thousand dollars a year, which
is actually pretty high forVermont, but their cost of
living is $1.47. Wow. Yeah.$1.47.
(09:34):
That means they basically pay50% more for for everyday life.
There you go. Number two,Washington, DC, also $70,000 a
year. Not a surprise there.Number one, though.
Number one, the worst place Ishouldn't say the worst. In
terms of being lucrative for aVerne HVC technician, Hawaii.
Okay. And now, this is quiteinteresting. They have the
(09:56):
highest annual average salary at$80,000 a year, but the cost of
living ratio is one eighty, 80percent more than the average
annual state.
Dan (10:06):
I I guess I'm surprised by the list, but it's the cost of
living.
Charlie (10:10):
It's cost yeah?
Dan (10:11):
Cost of living.
Charlie (10:12):
Yeah. Managed family, I guess. Well you know what they
say in, in the real estatebusiness?
Dan (10:17):
Buy low, sell high.
Charlie (10:20):
I think that's the stock market. Location,
location, location. That's whatI
Dan (10:24):
was getting at. Interesting.
Charlie (10:26):
There you go. And to be fair, across the board, I think
all of these are going to go upsignificantly in the space
because we are looking for moreand more HVAC technicians every
day. We have a shortfall there.So, hey, if you're looking to be
an HVAC technician, now's a goodtime to get in.
Dan (10:40):
They deserve it. Pay them more. We need more.
Charlie (10:42):
I love it. Here we go. There we go. Alright. So that's
it for the headlines today.
Next up, we are going tointerview John Horn. He's the
managing director at a venturecapital fund called the Idea
Fund. Stay tuned. Alright. Firstepisode, first interview.
(11:03):
Welcome, John Horn, to Cool AirHot Takes. Before we get into
the the actual part of this, Igotta give you a little
background on John. John is akey member of the downhill ski
team, Vildsoe. He was the ace onthe Central High School pitching
staff. He is an avidsnowmobiler.
He scored a 36 on his highschool ACT. He is probably the
(11:25):
smartest person I know. Ifyou're wondering how I know all
this, no, it is not on hisWikipedia page. Myself, Dan, and
John, we go way back. We all areproud alumni of Central High
School.
So, John, thank you for coming.
Jon (11:38):
Charles, thank you for the invite. I'm honored to be on the
first and what hopefully is notthe last episode of
Charlie (11:44):
your new podcast. Oh, thank thank you for the
confidence. Very, very muchappreciated. Alright. You know
the title.
Cool Air Hot Takes is wherewe're gonna start. What's your
hot take? You can go anywherewith this one. You can go in
venture capital. You can gooutside it.
Our industry personal. What doyou got?
Jon (12:01):
Okay. Well, first thing that popped in my mind when you
guys thought I should do thisand told me what a hot take was
was that this podcast is eithergoing to end or massively
accelerate the career of one orboth of you at, train company.
But I guess and that's not meantto be a dig. I kinda thought
about it as, like, you guys arethe ones who are like, hey.
(12:22):
Here's what we're gonna say andtake it down to the corporate
communication department and getthe approval and everything.
So that was my honest firsttake. But I guess for purposes
of you could edit this out, Iassume.
Charlie (12:34):
Yeah. Yeah.
Jon (12:36):
We can
Charlie (12:36):
we can take that. Okay. Yeah.
Jon (12:38):
Yeah. My my actual thought was if you look at the next five
to ten years in, you know, theHVAC market taken broadly, I
think you're gonna see morechange in the next five to ten
years than you have seen in thelast fifty to a hundred years.
Charlie (12:52):
Oh, interesting. What do you think drives it?
Jon (12:54):
Well, so you look at just all industries, and they've been
impacted by technology anddisruption at different rates.
And so some of the first to bedisrupted were things like
retail, travel, media. You know,like, what's CBS? Right? You
know, streaming turned thatupside down.
Amazon turned retail upside downin a lot of ways. You have not
seen that fundamental sort ofreshuffling of the deck in a
(13:14):
number of other industries, andHVAC building management is one
of them. You guys maybe willtell me I'm wrong on that. But,
you know, the fundamentalproducts are the same, and more
importantly, the market leadershave essentially been the same.
Mhmm.
Mhmm. You know, when you lookat, like, the auto industry with
fifteen years ago, Tesla is nota public company. Today, Tesla
(13:36):
has more value than the nextnine auto companies combined.
Right? Like, you have not seenthat unseating of incumbents in
this industry that you have inothers.
And so I think it's very timelythat that you guys are
initiating this podcast because,you know, innovation is really
starting to strike in thisindustry where it really in ways
it hasn't over the last anynumber of years.
Charlie (13:58):
I mean, I gotta tell you, I had a high bar for you
coming on the show, and and youjust you just went past it. That
was that was great. I could nothave been for a good start.
Alright. Well, let's get to you.
Tell us about the Idea Fund.What's the background? What are
you guys into?
Jon (14:14):
Sure. So Idea Fund's a venture capital fund. So that
means we manage money on behalfof third party investors, and we
invested in very early stagetechnology companies. And our
strategy is technology companiesbased sort of generally in our
part of the country, which isthe Upper Midwest. And, you
know, when you look at venturecapital, it's highly
concentrated in a fewgeographies.
Right? About 80% of venturecapital goes into California,
(14:38):
New York, Boston, you know, thetop three to four states. The
other 20% is distributed acrossthe other 46 states. We're
specifically focused onWisconsin, Minnesota, and Iowa
because we believe the kind ofinnovation that's coming is the
kind of innovation that thispart of the country is strongest
at. This kinda ties into theoriginal point where a lot of
the stuff that's really beenchanging, you know, over the
(14:59):
last twenty years of ventureinnovation is kinda consumer
driven and mass market stuff.
You know, it's not a lot of thenitty gritty b to b industries.
So, like, you know, you stillwant your Stanford dorm room kid
or whatever on the team. But tofound a new company in the HVAC
industry, you know, in supplychain and, you know, in in the
(15:21):
traditional b to b industries,you know, you really need
industry expertise. So that'sthe kind of companies and
founders that we really tend toinvest in. There's people coming
in with deep industry expertiseand areas that our part of the
country is strong in.
Charlie (15:33):
Yeah. We're gonna get into a little bit of that, where
those ideas are coming from andand who should be on the lookout
for them. But in general, you'retalking about, like, the trend
of venture capital. Is isventure capital growing, or is
it more of like a zero sum gamewhere the the money's relatively
similar and it's just gettingshuffled around between what's
hot and what areas of thebusiness are are are going? Or
(15:54):
is venture capital growing likecrazy?
Jon (15:56):
Well, there's a couple ways you can look at it. You know,
venture capitalists and venturecapital funds in general, it's
it's really California centric,and it's they're really kinda
herd animals where you see thesebig sort of cyclical swings. You
You know, we saw the .com boomand then the .com bust.
Charlie (16:12):
Mhmm.
Jon (16:12):
And then we are on sort of the bust side of another cycle
right now where, you know, 2021,'20 '2, we saw massive amounts
of money flowing into venturecapital. Now we saw a just as
massive pullback, where 2024,there was this was the lowest
year for venture capitalfundraising out of the last ten
years, twenty twenty four was.Wow. Okay. So there's, like,
been this massive pullback inventure capital.
(16:34):
And now, of course, we're onsort of into the next cycle of
AI and, you know, this massiveinvestment in AI and
infrastructure and all thisthat's going on right now. So, I
mean, you see huge swings. It'sa really cyclical industry. But
in general, that's venturecapital. When you think about,
like, taking a step back at,like, the innovation economy
Mhmm.
You know, that is justconsistently up into the right.
(16:54):
Right? As you get sort ofcompounding returns from
technological innovation, Imean, that is just only
accelerating how much technologyis impacting industry.
Dan (17:03):
How do you think the Midwest is different than, you
know, those those states thatyou mentioned are kind of like
boomer bust. Do you think theMidwest is any is gonna be
different?
Jon (17:12):
You know, I think you you gotta look at the it all comes
down to the people. You know,that's really what all all this
boils down to. And when youthink about, you know, the
traditional venture centers,there was a lot of real heavy
technical innovation that cameout of them. You know, Silicon
Valley means the Silicon chips,you know, that were there. I
mean, it was, like, really thefoundational computing elements
and stuff like that that sortof, like, gave birth to to that.
(17:33):
You know? So we don't have,like, as much of a fundamental
computing heritage and deeptechnical heritage, you know, in
this part of the country. Wehave, you know, industrial,
agriculture, supply chain, youknow, those industries that make
up 68% of US GDP. Right? And theindustries that happen to be the
least disrupted by technologytoday.
So, you know, Silicon Valley wasin the right place for
(17:56):
innovation over the last seventyfive years, whatever you wanna
call it. You know, now you'vegot this huge portion of the
economy that has not beenfundamentally transformed yet by
technology. It's been changed bydegree, right, but not
fundamentally. That's where Ithink you're gonna see the rest
of the country sort of come in,and you're gonna see some really
(18:16):
new and innovative and, I think,potentially massively valuable
companies ultimately created outof, you know, the heritage that
we have here.
Charlie (18:24):
We kinda dive down in there a little bit on the
trends. Can you back us out alittle bit? In our industry,
when we talk about technology,you'll hear people talk about,
Wow, this is at, you know, RMI,Rocky Mountain Institute or it's
at a Pacific Northwest National,like it's in a it's at a
university stage or it's inventure capital or it's early
commercial versus commercial.Can you kinda walk us through
that spectrum on how technologygoes kind of from in its infancy
(18:45):
to, like, a company, like, traincompany or or the likes having a
commercial offering?
Jon (18:51):
Yeah. It's it's interesting. And when you think
about sort of innovationgenerally, I mean, you would
think of just Amazon, forexample, as, like, an innovative
company that completely turnedindustry upside down. Mhmm. But
when you think about the valuethat Amazon delivers to its
customers, you know, itscustomers being you and me and
other Amazon subscribers, youknow, the product is identical.
Right? You're still gettingessentially all the same crap
(19:12):
you can get at Walmart oranywhere else through Amazon.
Right? It's it's the deliverymechanism. Mhmm.
So when you think aboutinnovation, like, as it relates
to the HVAC industry, one bigcategory of innovation is
product innovation, like whatyou're talking about, a new new
refrigerant, right, or, youknow, something like that.
That's like a a highly technicalproduct that starts in a lab or
starts in the brain of, youknow, some engineer and somehow
(19:34):
is funded to develop, ultimatelycommercialize, validate it to
the point that a train companycould acquire it. A whole
another category of innovationis everything else that happens
in the value chain. Right? Notjust a new product, but how
about, like, a new way to sellthe product.
Right? So how you how you reachyour customers. You know, hot
fulfillment, right, services,whether that's a live human
(19:55):
service or a software productdelivering service. But at the
end of the day, they're all whatdo you think of all these? I
mean, it comes out of a productinnovation, and somewhere in
somebody's head, there's aproduct innovation.
Right? Whether it's, you know,refrigerant or it's a process,
right, or whatever. And you youneed that. You need the
management talent, and you needcapital. Mhmm.
Right? Those are, like, thethree pieces. Right? And
(20:16):
sometimes That's
Charlie (20:17):
all I said.
Dan (20:17):
Easy peasy.
Jon (20:20):
Right. When you start to categorize it and slice it up.
And so, like, if you've gotthere's I guarantee there's
somebody sitting at every largeindustrial HVAC equipment OEM
with a brilliant productinnovation in their mind. Maybe
they've tried to run it up theflagpole and hasn't gotten
interest from the senior peopleon the team or whatever. I
guarantee there are people outthere right now that have that
idea.
(20:41):
And if they don't do somethingwith it, it's never gonna get
out into the world.
Charlie (20:45):
There you go, listener. There you go, listener. In in
the show notes, we'll we'll givewe'll give you John's, company's
email address, your inbox. We'llflood it up.
Jon (20:53):
Idea Fund VC comes straight to my email.
Charlie (20:57):
There you go. Alright. So let's let's talk about
something that you have investedin that's that's kinda close
that our listeners are probablymore interested in. We talked
about this earlier. Enoration.
Can you give us a littlebackground on on what that is
and what your role is with them?
Jon (21:10):
Yeah. It's it's a really interesting company. At their
core, they provide efficiencyservices to health systems,
building efficiency services.Okay. So what they're doing is
it's a sophisticated servicesoffering where they're making
health care buildings moreefficient.
You know, that's established.Their history is is really
interesting where theyoriginally developed as an
internal initiative at GundersonHealth System, which is, you
(21:30):
know, a large Upper Midwestpredominantly rural health
system. The CEO probably twentyyears ago made a you know, put a
stake in the ground and saidwe're gonna be net zero on
campus and actually went out andgot it done through combinations
of generation, you know,building efficiency, all the
kind of things that you guys areworking on. And they did it.
Then they had hired a number ofpeople from Trane that came in
house to sort of build this out.
(21:52):
Mhmm. At Gunderson, theyaccomplished it. And then they
got all this attentionnationally, and other health
systems started calling us andsaying, hey. Look. We wanna
become more efficient.
We've always put, you know, thepatient first. Right? So we
can't take risks on reliabilityand things like that, but it
sounds like you guys havefigured out a way to do this,
right, without taking risk. Andin fact, maybe making your
system more resilient. So theystarted doing sort of consulting
(22:14):
projects for other healthsystems and turn it into this
little internal business.
And then a few years ago, theymade the decision, hey. This
isn't our core. You know, we'revery good at this. Right? It's
very important, but it's not ourcore job.
Right? Our core job is patientcare. And so they took the
business. They're spinning itout, it's called, where they
actually separated it into itsown entity. The health system
(22:35):
still owns a piece of it, andthen they raise capital from
outside investors.
And we're we're one of theoutside investors, and now
we're, you know, we're workingwith management to try to, you
know, just grow the business andmake it a large stand alone
business.
Charlie (22:46):
So I think that's pretty maybe maybe it's not
obvious, but, like, thedifferentiation that they have
versus just any engineeringcompany walking into a health
care system is the innateknowledge, the internal
knowledge that they'vedeveloped, that they've
incubated over the years. Isthat kinda is it
Jon (23:01):
Well, you know, you get a lot of pitches, and 80% of them
are, hey. Look at this awesomeproduct I've got. Right? Mhmm.
And okay.
That that's great. Right? Like,to be a successful company, you
need a credible, valuableproduct. It's necessary, but not
sufficient. Right?
You also need, you know, a wayto talk to your customer, a way
to sell it efficiently. You needtrust with your customers, all
(23:22):
this kind of stuff. And when youthink about a health system
buyer, yes, they wanna savemoney on that percent of their
budget that is, you know, spenton energy costs. Mhmm. But they
also want a % reliability.
They want their physicians tounderstand this isn't impacting
the humidity in the OperatingRoom or specific considerations
that a health system might havethat other building owners do
(23:43):
not have. And so part of whatEnoration offers is a really
high level energy consultingbusiness, but it's also a way to
reach a certain customerpopulation efficiently and in a
way that builds trust veryquickly because these guys
really know their industry.Right? And the customer
understands that they do rightfrom the start.
Charlie (24:01):
Got it. So from your spot, what is a a successful
turn on a company likeEnoration? What did they get
into, and then where do you getout of that as a successful
venture?
Jon (24:15):
So when you look at our economics so I manage money from
third party investors. Right?And especially when we started,
a lot of the investors areindividuals investing personally
hundred thousand to a milliondollars, something like that.
And, you know, you go to themand say, hey. I'd like you to
commit 500,000 to Idea Fund.
I'm gonna go invest in 20technology companies. They're
all in the Upper Midwest. Whenwe make our initial investment,
(24:37):
they're between 0 and 2 or$300,000 a year maybe in
revenue. Mhmm. You know, they'reso early.
Our plan is at least half ofthem are gonna be complete loss
of capital.
Charlie (24:46):
Wait. What's the what's the what's the percentage?
Jon (24:48):
At least half. At least 50%.
Charlie (24:50):
Okay.
Jon (24:51):
And those are national averages, right, of companies
nationally that raise this typeof capital. Mhmm. At least half
of them % loss of capital. Okay.So, like, let's just say I'm
coming to you guys.
You got $5,000,000 in net worth.I'm looking for a hundred
thousand bucks from you. Whatkind of return do you have to
expect out of the investment inidea fund
Charlie (25:09):
Ten x? To say
Jon (25:11):
yeah. Like, think about an annual return. Right? Like Mhmm.
What's the stock market returnover on average?
Charlie (25:16):
Ten percent? Five percent? Eight?
Jon (25:18):
Yeah. 10 yeah. Ten, eight, 10, 12, whatever. So if you're
gonna get eight, ten, 12 out ofthe stock market, right, which
is a % liquid, essentially 0%failure rate, global
diversification. You know, ifyou want your money out, you
call me.
You got it two days later. Whatare you gonna need out of idea
fund?
Dan (25:32):
Do people looking for 25%?
Jon (25:34):
Yeah. Yeah. I mean, twice, large cap equities, you know,
something like that. Then that'sjust to be in the ballgame.
Right?
Like, that's just to sort of beokay. Right? So, like, say I
need net 20% return out of theportfolio. Okay. Then you take
the next step, and you say,alright.
Half of them are out. Half ofthem are zeros, national
average. You know, one or twomaybe get your money back, a
couple returns. And then reallyone or two out of 10 will
(25:57):
typically drive your portfolioreturn. Okay?
So if I'm gonna get 20% net andone out of five of them is gonna
drive the return, I mean, do youguys know math? You're gonna
need, you know, % annual returnon the winners to make up for
all the losers and get you evenat parity with the stock market.
Dan (26:16):
Yep. Right? So is that is that stressful?
Jon (26:19):
Well, you get a lot of chances.
Dan (26:20):
You know?
Jon (26:24):
Yeah. We lose one. I mean, yeah, it's they're just getting
close to really executing aplan. Right?
Charlie (26:28):
Well, a friend of ours once said, I gamble every day of
my life. Oh, that's good.
Jon (26:37):
So back to your question short answer to your question
is, I mean, I've always peoplesay 10 x. Like, you need a big
result out of these companiesfor it to be worth all the risk
you're taking on.
Charlie (26:46):
Well, John, we've held you for probably too long in
your day. But how can people getahold of you? If they think they
have something, what's the bestway to get ahold of you?
Jon (26:53):
Yeah. I'd love to talk to anybody. Idea Fund, v c as in
venture capital dot com. We'vegot a submission form on there.
It goes straight to my email.
So I'd love to talk to anybody.And we're you know, we you don't
need a business. I mean, we'vewe've come in and actually
cofounded businesses. So we canwork with a product inventor and
put something together aroundit. Love to talk to him.
Dan (27:11):
Super cool.
Charlie (27:12):
There you go, listener. Reach out to John.
Dan (27:14):
Next opportunity. Thanks for having me, guys. Thanks for
joining us, John. Veryinteresting. Up next, we're
gonna talk about the AHRInnovation Awards in a feature
we like to call hot or cold.
Don't go anywhere.
Charlie (27:27):
Is it hot or cold?
Dan (27:36):
Alright. We're back. We're gonna talk about, the AHR
innovation awards in our hot andcold segment today. So for those
of you that aren't, say,familiar with the AHR Expo,
really, what I like to compareit to is kinda like the Detroit
Auto Show of HVAC. You're gonnahave some, you know, cars that
are gonna be readily availabletoday or tomorrow.
(27:58):
You're gonna have some newinteresting things, some crazy
concepts just to kinda getpeople thinking about, oh,
that's cool, or, oh, that's kindof a strange idea. So there's a
whole bunch of differentcategories.
Charlie (28:08):
Yeah. There's 10 different categories. It spans a
lot. We're not gonna talk aboutall of them. We're gonna
concentrate on three and we'regoing to go hot or cold.
Hot means you'll like whatthey've got going there. Cold
means you don't like it so much.Alright. So number one, the
category is heating and thewinner of this year's innovation
award is ERCO with their CFRboiler. A little description
(28:30):
here, CFR is the world's firststainless steel condensing
boiler that can be installed ina category one vent making it an
ideal solution for thecommercial retrofit market.
Danny Boy, what what say you?
Dan (28:43):
You know, I'm in a it's a boiler. I'm seeing it. It looks
like a boiler. It is a boiler,so I'm not thinking it's, like,
that crazy and innovative. So itmakes me a little cool.
If category one vent is like agame changer and we can install
these in a a whole new place andit changes everything, it could,
(29:04):
I could get hot on it, but I I II think I'm cold. It's it's a
boiler.
Charlie (29:08):
I'm with you on this one. And, you know, no offense
to ERCO and CFR. I'm sure it's agreat, great product. But when I
was thinking like innovationaward, bleeding edge, like
what's out there for theespecially for the heating
category, which you know, ourindustry is going through a
massive change right now. Yeah,I'm gonna say cold on this one
too.
Okay. Okay. There you go. Allright. Next category is the
(29:29):
refrigeration category.
And the winner of this, thisyear innovation award was
Danfoss Bak CO two transcriticalsix cylinder CO two compressor
that has expanded range toenable larger refrigeration and
heat pump applications with asmaller footprint, strong energy
efficiency performance.
Dan (29:49):
This is an interesting one too where I kinda like, you
know, I'm I'm, I'm not I haven'tseen a lot of good c o two stuff
around here. It's a it seemslike a little more of a
difficult, more specialized,application, if you will. I
know, over in Europe, they'vedone some really cool things
with some large scale stuff. SoI'm I I'm, like, kinda leaning
(30:09):
towards, like, hot. It seemslike kinda
Charlie (30:11):
in in the the fence. Pick one.
Dan (30:13):
In, but,
Jon (30:15):
I'm hot on
Charlie (30:18):
it. Yeah. You were leading cold the whole time when
hot. I am definitely hot onthis. I I think CO2 is gonna be
a refrigerant.
We're going to leverage a bunchmore in the future. Where we're
at right now, going from, youknow, higher GWP refrigerants to
lower GWP refrigerants,incorporating more natural
refrigerants. I think the morewe can use c o two in
applications, it's gonna pushthe industry forward and just
(30:39):
definitely some limitations toit. But I like the innovation. I
think
Dan (30:43):
it's the change going.
Charlie (30:44):
I'm I'm hot. I'm hot on that one.
Dan (30:46):
Where's the hot guy right there?
Charlie (30:48):
Alright. Last category. The last category is
sustainability category. Thewinner here was LG for their
residential cold climate heatpump. I'm not even gonna offer
this one up.
We're both hot on this. Thereare a bunch of different
companies that that entered intothe cold climate challenge, the
DOE that have passed through it.I think LG was part of that.
Trane was part of that. Carrier,I believe, was in there too.
(31:11):
The number of companies that aregoing after this segment, it is
absolutely critical for ourindustry to move forward. We
have to be able to use air towater heat pumps in all the
climates that we're we'reoperating in.
Dan (31:22):
It's kind of a slam dunk. I mean, whoever can get there,
good for you. Good job. Thankyou. Let's do it.
Charlie (31:29):
Alright. Before Dan steals another one of my hot
takes, and we close out theepisode, we are going to do a
stat of the day. For those ofyou who listen to Sports Talk
Radio, this is a absolute 100%rip off from the Dan Patrick
Show. So thank you, Dan and theDanettes. I'm sure you guys are
gonna be listening to the show.
Here we go. Stat of the day.
Dan (31:47):
Here it comes, Joe.
Charlie (31:48):
Stat of the day. Stat of the day.
Dan (31:51):
Stat of the day. Alright, Charlie. What do we got? What's
the stat of the day, bud?
Charlie (31:55):
Alright. This is gonna be applicable mass mass market
here. The stat is the slowestdepreciating cars in America
today, model year 2018 topresent. So which cars have lost
their value the least in thelast five years? Take a guess at
top 10.
I'm gonna run through themquick.
Dan (32:14):
I'm gonna give, like, a Toyota Corolla, a, Honda Civic,
a, Toyota Tacoma,
Charlie (32:23):
a
Dan (32:23):
a minivan of some sort.
Charlie (32:25):
I would have definitely put a minivan on there. You did
really well. That was three ofthe top 10. Okay. So number 10,
Toyota Corolla, 25%depreciation.
Number nine, Subaru Crosstrek.Number eight, Toyota CR V. Okay.
Number seven, Chevy Camaro.
Dan (32:39):
I did not see that coming.
Charlie (32:40):
That one surprised me. Wow. Number six, Subaru BRZ.
Honestly, don't even know whatthat is even. Number five, Honda
Civic.
Jon (32:49):
Hey, there
Charlie (32:49):
you go. To Scott Wenger. Number four, Daniel,
this one should be as close tohome. The Jeep Wrangler. How did
you not get that one?
Number three, Toyota Tacoma.Okay. Rob Jordan, the squire of
the night. 20% depreciation.Goodbye.
Number two, the last two the toptwo are both Porsches, which
okay. I I
Dan (33:09):
wouldn't have guessed that.
Charlie (33:10):
No. But,
Dan (33:11):
there you go.
Charlie (33:11):
So remember, number two, Porsche Cayman, 18%, and
number one, the Porsche nineeleven at only a 9%
depreciation. Maybe go five
Jon (33:19):
years.
Dan (33:20):
Myself up a Porsche after this.
Charlie (33:24):
There you go. Thank you. Thank you for listening to
the first episode of Cool AirHot Takes. Thank you to John
Horn for joining the show. Avery special thank you to our
wonderful producer, ElenaGuthrie.
And finally, a thanks to ChristyUpton for getting this all
pulled together. Please join usnext time. We have a very
special guest, a friend of theshow and therefore a friend to
(33:45):
you, mister Joe Heger. He's acompressor engineering leader
and he'll be giving us a peekbehind the curtain on some of
the latest compressortechnologies. If you wanna get
in touch with us, please reachout coolair.hottakes@train.com.
We wanna hear what you have forquestions. We wanna hear what
you have for hot takes. Anythingfunny from the jobs you've been
working on, any funny stories,like that one time that you got
(34:07):
called out to fix some ductworkbecause an inmate tried to
escape through it. It? Whateverit is, maybe it's some new tools
you have saving you time, savingyou money, please reach out.
We'd love to feature it on theshow.
Dan (34:17):
If you like the show, please like and subscribe, give
us a rating, and review for thepodcast wherever you listen. So
until next time, stay cool andkeep those takes hot.
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