Episode Transcript

Cortney Piper: Welcome to Energizing Tennessee, powered by the Tennessee Advanced Energy Business Council and FirstBank. We’re your number-one podcast for news about Tennessee’s advanced energy sector. I’m your host, Cortney Piper.

Today, I had the chance to catch up with an Energy Network graduate located in East Tennessee. In 2017, two Cornell University Ph.D.’s Levon Atoyan and Mitch Ishmael co-founded Shift Thermal, a startup commercializing advanced ice thermal energy storage for heating, ventilation, and air conditioning.

They are shifting the cooling process to be more sustainable, cost effective, and resilient. I first met Levon and Mitch when they moved to Tennessee to join the inaugural cohort of Innovation Crossroads. a DOE funded entrepreneurship program at Oak Ridge National Laboratory. Fast forward several years and Shift Thermal has received several SBIR awards and matching grants and completed a successful seed investment round.

Now they are expanding their product offering and calling on all of our manufacturing listeners or TAEBC members. They are actively looking for partners for field demonstrations. Keep listening to hear my conversation with Mitch about the company and his thoughts on how best to support cleantech entrepreneurs.

As always, if you like what you hear, subscribe to our channel and leave a rating or review. It helps us reach a wider audience and champions Tennessee’s advanced energy sector.

Energizing Tennessee would not be possible without the support of TAEBC members and our sponsor, FirstBank. To learn more about FirstBank and how they can support you or your business, visit FirstBankonline.com.

Today on the show, I’m speaking with Mitch Ishmael, Co-Founder and Chief Technology Officer at Shift Thermal. Mitch, welcome to the show. Hi, Cortney. Thanks so much for having me. Of course. First, tell our listeners a little bit about yourself before Shift Thermal.

Mitch Ishmael: I’m originally from Knoxville, East Tennessee.

When I wanted to go to college, I had two criteria. One was not to go to college in Tennessee, and the other was to play soccer in college. So, I ended up going to Rose-Hulman in Indiana had a great time there. And at the end of my time, I felt like I wasn’t quite done with school yet.

I was already started to be interested in entrepreneurship, but I just felt like I needed to go to school a little bit more. So, I went to pursue my PhD studies at Cornell up in upstate New York. And I really came to appreciate the sun much more. I just took it for granted down in Tennessee.

It’s very gray up there. I like the milder winters.

Cortney Piper: I’m originally from Michigan. I do, too. I hear you.

Mitch Ishmael: At Cornell, I did my graduate work and frankly, the output of it was not very exciting. I don’t know if, at the end of engineering books, there’s all those tables of like properties of water, of air, of steam, whatever.

I was the guy generating the data for those tables.

Cortney Piper: Oh, wow.

Mitch Ishmael: I don’t know if I’d known that going in if I would’ve done it, but coming out. It was great. I got to build all my own equipment. I got to become a fairly good machinist. I got to teach myself how to code a little bit.

So, I really got to, get deep in the innerworkings of a lot of things. And that really appealed to me personally. I met my wife up there, which is great. And I met my co-founder up there and that’s an order of importance. I want to make sure I don’t get that switched up toward the end of my study.

The stars really just felt like they aligned. There was a program at Cornell that allowed me to take a semester off to just pursue an entrepreneurial idea that I had. So, I got to basically snowball that into a pitch because Innovation Crossroads also spun up right at that time.

And I, just feel really lucky that things aligned up like that. And yeah, we moved then the company down here to Oak Ridge that’s now Shift Thermal.

Cortney Piper: All right. And Innovation Crossroads is the Lab Embedded Entrepreneurship Program at Oak Ridge National Lab, Innovation Crossroads. And Mitch, you were in the first cohort, right?

Mitch Ishmael: That’s right. I was one of the guinea pigs. A lot of learning for them and a lot of learning for us, too. Everybody was learning all at the same time.

Cortney Piper: I would say it worked out well. Now let’s talk a little bit more about Shift.

Tell us why you started the company and what problem you are solving.

Mitch Ishmael: So, Shift Thermal is helping building owners and operators lower their HVAC costs with advanced thermal energy storage. So, we’re doing that via advanced thermal storage. And one of the reasons I’m so happy to be on Energizing Tennessee is because we’re to the stage where we need to get out of the lab, into the field, and start to pilot.

We’re actively looking for pilot opportunities, and that’s why I’m so glad to be here talking to you right now.

Cortney Piper: Explain to our listeners, like we are in sixth grade, what is thermal storage? Let’s start there. And then why? Yeah.

Mitch Ishmael:Thermal storage is, as simple as a hot water tank everybody interfaces with this every day, and they don’t really realize it unless you have a tankless water heater but set that aside.

If you have a water heater tank in your home, you use thermal energy storage every single day. It’s just the act of. Heating it up and saving it for later use. I like to think about it a little bit like, if you’re going to have a party, and you want to have ice for everyone’s drinks, one way you could do it is you could have a really big ice maker that can make the ice right in time, on demand, as your guests arrive to fill up the drinks.

Or you could do it with thermal storage and you just let your refrigerator make ice throughout the afternoon. You store it, and then it’s available when you need it. One of those is a much more cost-effective reasonable solution to that problem. From the Energy Information Agency, about 20 percent of all the electricity used in buildings is used for cooling.

So that’s a big fraction. And then on top of that cooling is the biggest driver of electricity growth in buildings. You can think about, especially with so many developing countries, building buildings, especially in hotter regions of the world. You can understand why it’s such a big driver.

So that kind of motivated me to work on the thermal piece. And then the storage side is in the sustainable world that we’re moving towards, where some of our power is being produced by intermittent sources like wind and solar, you need to be able to obviously provide cooling, during the, when the sun’s not shining and the wind’s not blowing and That’s where it comes back to the do you want to have a really big ice maker powered by a battery or do you want to just have, your regular refrigerator making ice and the thermal storage kind of represents that piece of it.

It’s just a much more cost-effective, simple solution for serving a really big problem: thermal cooling. The thing that we’re doing to help is we’ve developed ice storage, so thermal storage, that can provide much faster discharge or faster ability to cool. And it’s at a rate much higher than traditional ice storage systems.

And again, this is a big deal because as you have intermittency, you need to be able to be more flexible and more responsive how buildings consume power, how they shape their load throughout the day. And just because I’m a technologist, just to briefly mentioned. So, it’s a, the way we do it is through a direct contact heat exchange process.

And it makes, it makes something closer to ice chips than ice cubes. And this is something also we know intuitively, if you put ice chips in your drink, it cools it down much more quickly than ice cubes do. And so that’s how we can operate, much more flexibly and responsively than a traditional system can.

Cortney Piper: Who are some of your intended customers? Who needs this kind of solution?

Mitch Ishmael: Our solution is best suited for larger-scale customers, at least right now. And that’s primarily because larger customers electric rate structures incentivize them. To not have, really peaky loads. It’s definitely bigger buildings.

And, then the subsection of that is we would prefer to work with buildings that have what would be called like a central chiller plant or chiller plants where you distribute chilled water out to your air handling units just because it gives us a central tie in point and it makes things, more economical and easy to tie in with.

But other than that, those are really the two main criteria. You think about it could be schools it could be hospitals. A lot of our biggest engagement so far has come from manufacturers in Tennessee with big manufacturing plants, government buildings and also process loads as well.

So, like I’m thinking of, like mushroom farming, for example, we’ve had some interest there where, when you’re farming mushrooms, you’re generally keeping your temps fairly nice and cool. So anywhere where cooling is a part of your building operation and makes up an important fraction of your electric load consumption.

Cortney Piper: Now, take us through the Shift Thermal journey and talk about some of your milestones. Start us off at Innovation Crossroads and that milestone, and what that experience was like, and walk us through some of the other milestones that the company has achieved to date.

Mitch Ishmael: We actually weren’t working on thermal storage at that time and what Innovation Crossroads allowed us to do was fail on that initial idea. And then. You know, I have had enough time and experience and then also exposure to the ORNL Scientists to be able to say, oh, but there’s this other thing that’s related that we can also, maybe, work on. Oh, hey, this is a good idea. Let’s talk to customers. Okay. Yeah, this like people are interested in this. So yeah, without that kind of Innovation Crossroads, two years of being able to fail and then pivot and then work on, what the actual real problem was, I’m not sure we’d be here today. And we came out of Innovation Crossroads, and we got an SBIR from, so it’s the small business grants from the National Science Foundation, another one from the Department of Energy, and then another one from the New York State Energy Research and Development Authority, NYSERDA.

And so that’s what Innovation Crossroads allowed us to do was to, again, snowball, build that momentum and then exit. And it was really great to get the validation from so many different agencies to continue supporting us. And then I guess I’d also want to mention we had a really big technical shift about 10 months ago as well, and it feels like a big milestone to me just because it was another moment of like we’d scaled the technology, but it wasn’t hitting the metrics we needed it to hit and is just one of those back against the wall.

We have to figure something out. And we put our heads together, tried, With, what we learned over the past five years, a reconfigured system. I remember it so well. This is right, right at the same time my daughter was being born. We finally found out that the, the new idea had legs and over the past 10 months, we scaled it, we’ve done lab pilots, been successful. And now we’re ready to get it into the field.

Cortney Piper: That is fantastic. And congratulations. That’s really great progress. And I think shows the benefits of, at least for us in Tennessee, to have some of these programs and initiatives that support entrepreneurs in all parts Of their journey.

Cause like you said, sometimes you can get into something and realize that you need a pivot, or you need to fail real fast and then rebound and to be able to have the support of Oak Ridge National Lab is just crucial. Are there other entities or organizations that you all have taken advantage of or partnered with after Innovation Crossroads?

Mitch Ishmael: Yeah, I think, I guess I should mention also our funding private funding round milestone. I was at a panel yesterday for Innovation Crossroads. They just brought on their newest cohort. And it’s the question, what should we do? What did you learn over your time and how should we make best use of our time? My answer is basically, the network that we basically formed within Innovation Crossroads was how we were able to raise our seed funding round. Coleman Adams, I met in the very first pitch I ever gave to Innovation Crossroads. He’s in clean energy venture group. He’s on our board now.

John Bruck met also through Innovation Crossroads. He’s within QCA. Also, on our board now the TennesSeed fund provided some really critical capital at the right time for securing intellectual property. And then, we got to know Grady Vanderhoofven and Dennis Corley, and that turned into investment from Three Roots Capital.

So, it really all, unbeknownst to me at the time started really early and, we developed and continue building on those relationships and making them stronger and stronger to get to where we are today.

Cortney Piper: What do you wish more people knew about cleantech entrepreneurship?

Mitch Ishmael: For, I think cleantech entrepreneurship is like sometimes framed as like a tradeoff, you can be clean or cost-effective. But it’s really not that, and Shift is building its business around it being both a win for sustainability and a win for bottom lines. And so, I think with larger companies, especially tracking, you know, tracking their sustainability and reporting it that’s changing, and you can see the double win, which is great.

But then also small companies, maybe I’m biased here seem to be pushing the envelope more than larger companies. And so this is where, we’re really looking for partners who want to push the boundaries with respect to sustainability and HVAC. And there’s, there is that downside of it is riskier when you’re working with a small company.

My sort of thought and counter to that is the partner having the seat at the table and being able to tailor our solution to their needs, especially if they have multiple sites where we have a replicable installation plan, then you can just copy and paste, and it can be beneficial across the country and across the world.

Cortney Piper: And Mitch, you bring up some really good points. We have seen at the Tennessee Advanced Energy Business Council, and this happened years ago, but things like clean tech, advanced energy are now mainstream. It’s not this pie in the sky, rainbows and butterflies. It feels good to do this. These are, these kinds of innovations are important for business growth, development, scaling, etc. And you mentioned that it can be risky to work with a small business. And what I would submit to you and our general listenership is these innovations, and the things that Shift Thermal are pursuing is what is needed to move things forward faster. And when you have companies that go through an incredibly robust Pipeline like, you were at Cornell, Innovation Crossroads, you’ve taken advantage of the SBIR program. You’ve gotten seed funding from local investors. I think you got match funding, too, from Launch Tennessee. Is that right? You all were graduates of the Energy Mentor Network. All of these partners help validate, dare I say de-risk, Shift Thermal. So, it’s not like you’re coming out of the ground and saying, Hey, work with us.

You’ve had the benefit of being validated by all of these larger institutions and entities where they can come behind you and say, we’ve got your back. And I think that is incredibly beneficial not only to the industry at large, but also for Tennessee when we are retaining and growing this sort of clean tech innovation base in our state to benefit companies who are already here.

That is my soapbox.

Mitch Ishmael: Thank you so much. Those are very nice words, and I couldn’t have said them better myself. Thanks.

Cortney Piper: Okay, Mitch, what is next for Shift Thermal?

Mitch Ishmael: Yeah, we’re primarily working on one of three things every day. So, as I mentioned, working on securing a pilot. For this pilot installation, we’re trying to have a building site somewhere between 50,000 and 30,000 square feet, has a chiller plant, works with chillers or heat pumps. And the first step is really just a conversation and modeling a system. And that’s something we love to do. We learn something every time. Often, prospective partners learn something every time.

Yeah, looking for that pilot’s one. The second is we’re pushing the technology every day. Not only on the ice side, trying to, make it more efficiently, store more in less area, but also working on heat pump-based system where you can. store ice in the summertime, use it for cooling applications, and then you can store hot water in the wintertime and use it for heating applications because as we continue to transition away from gas heating to other sources, heat pumps are going to play a bigger role. And we think that we can develop an asset that you can utilize year-round, not just a tank that you can use in the summertime but something you can truly use throughout the year to help you improve your sustainability.

And last, we’re working on a funding raise and that’s primarily for helping us ensure that we can get the pilot projects that we need and the partnerships that we need as well.

Cortney Piper: Excellent. Mitch, tell our listeners where they can learn more about you and Shift Thermal.

Mitch Ishmael: Sure. Yeah. So, you can find Shift Thermal at shiftthermal.com. There’s a little bit more about us and the company and the technology and our product and solution. There’s a contact us button, so just shiftthermal.com contact us and we’d be glad to hear from you.

Cortney Piper: All right, Mitch Ishmael, co-founder and chief technology officer at Shift Thermal.

Thanks for coming on the show.

Mitch Ishmael: Thank you so much, Cortney. It’s been a pleasure.

Cortney Piper: And that’s our show. Thanks for tuning into Energizing Tennessee, powered by the Tennessee Advanced Energy Business Council and FirstBank. We’re glad to be your number-one podcast for news about Tennessee’s advanced energy sector. If you like what you heard, please share it with others. Others, or leave a rating and review to catch the latest episodes.

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