Employee Spotlight Series: Ross Malme
February 27th, 2023
1. Tell us about yourself!
I grew up on a farm in extreme northwest Minnesota, about 40 miles north of Fargo Moorhead. Growing up in that environment, you do not have all the amenities of the big city and all the options of a large school. In fact, I was Valedictorian of my graduating class of only 31 students. Therefore, if you wanted something, you pretty much had to do it yourself, and I became very self-reliant. Being a farm kid, you learn work ethics pretty darn quickly.
One thing that happens in that environment is you get a lot of diverse experiences. For example, if you’re a class of 31, if there is a football team, guess what? All the guys are playing football. If you are going to have a choir, everybody is in the choir. If you are going to have a band, everybody gets an instrument. But I knew I wanted to do something in engineering. I picked Chemical Engineering as my major, which was perhaps the most challenging major you could pick at the equally tough University of Minnesota. I probably was not smart enough to get through the grueling curriculum but in the end, I was just too stubborn to quit.
I got my first experience as an entrepreneur about 10 years into my working career. I was running industry marketing for a process control subsidiary of Emerson Electric where I had gotten a reputation as sort of being a Pied Piper of new product development. One day the Chairman of the holding company of the local gas utility called me up and said, “Ross, we hear you are a bright young guy, and we own this sleepy gas utility with a P/E ratio of six and we want you to come and run a new technology business for us.” Well, this sounded intriguing, so I accepted.
Sixty days after I was hired, I trot into the Executive Committee of this sleepy old gas utility with a business plan to put little radios on residential gas meters and drive a truck down the street 30 miles an hour. Rather than trying to read 300 meters a day with pedestrian telemetry and getting half of them, we are going to read all of them. You can imagine the reaction I got from the executive committee: Who is this lunatic who let this crazy person in the door?
But the chairman backed me, gave me a little minuscule budget, and said, “go figure it out.” I took the business plan to Motorola and Honeywell separately for a joint venture, and they laughed me out the door. But I found the technology in the wireless alarm security industry, and we got a prototype working. I told the chairman we could completely transform the utility industry, but I needed an engineering team and factory. I convinced him to do a hostile takeover of an electronics manufacturing company, and he said, “Ross, you better be right.” There were so many obstacles because this wasn’t just engineering; We were inventing science and should have failed. We were a bunch of kids inventing things that had not ever been done before, breaking every product development rule in the book. but with so much pressure from Wall Street on our CEO to go deliver this. We promised to do this, and in the end we succeeded. In about 18 months, we rolled this product out, and everybody thought that this was smoke and mirrors, but it worked. We sold the first one to the gas company in Minneapolis, and we sold the second one to the gas company in Atlanta.
We eventually sold the the business to Itron where this technology became the standard automatic meter reading technology of the gas and electricity industry for over 25 years.
After the Enron retail electricity market failure in California in 2000, I did another start up trying to create a way for the retail electricity customer to compete against supply in the wholesale market. I raised about $8M of venture capital and built one of the first electricity demand response companies in North America. We ended up putting the IT infrastructure for the wholesale markets in the Northeast to buy capacity and energy from retail customer when the grid was in trouble or prices were crazy high. I ran that for about eight years and sold the company to Schneider Electric in 2008 where we created Schneider’s first global smart grid business plan.
After leaving Schneider I have been running a couple of Smart Grid consulting practices focused on early-stage energy tech companies, like Kitu and combining that with a growth capital investment banking practice.
Outside of work, I still manage about 1000 acres of farmland in Minnesota for the family and have a passion for music. I used to sing in a performance concert group singing everything from American and European folk to classical to Authentic African American Spirituals. I organized events like singing the national anthem for the Braves at Turner Field and holding Christmas charity concerts. Lately I have been singing and playing the conga drum with a Praised Band at a Lutheran Church. It is a blast, and it is incredible leading a congregation in worship. None of this was a grand plan, life is what happens, and it’s all about how you adapt.
2. What is your history with Kitu?
I joined Kitu originally as their investment banker. However, I left the bank at the end of 2021 and now am Kitu’s Senior Advisor. Even though I am not an employee, I am considered a part of the senior management team, and my role tends to change depending on the company's needs. For example, I managed much of the EV charging business before hiring Austin Chambers as our VP of Market Development. What you will find about me is I want to contribute to the Company’s overall success but am happy to step out of the way when needed.
3. What has been the most fascinating or interesting project you have been a part of recently?
When I started working with the Company, we were trying to communicate to the investment community what Kitu was and why it was important. They did not understand it, and that is when we put together this project to do a white paper on the DER Asset Community Ecosystem. We had a market forecast from Woods Mackenzie indicating we will get 380 gigawatts of this stuff by some date certain. We disaggregated that into asset classes, did a forecast by asset class, and then extrapolated the number of transactions that would occur from each asset class, showing this would be as big as the credit card industry.
However, about a year ago, I woke up one day and realized we had built the Kitu business plan around the electricity ecosystem. There is this thing called electrified transportation coming at us, which we had not completely thought about. It’s going to dwarf everything else that’s going on in the DER space, and we had to change how we think about our business because we are the intersection of those two ecosystems and without us, it’s going to be chaos, We have an opportunity here to help try to harmonize those two ecosystems, and the amount of value creation by those two ecosystems will be in the trillions of dollars. Kitu is inside that trillion-dollar ecosystem, and being a part of the epicenter of this industry convergence is the coolest part for me.
4. How would you describe the company culture at Kitu?
Kitu is a mile deep technically and a hugely impressive organization. Organizations tend to mirror their leadership, and because of CEO Rick Kornfeld’s engineering background, Kitu is an engineering-driven company. Kitu is now focusing on the commercial side of the business while we continue excelling on the technical and operational side, all while growing rapidly.
5. Do you have any advice for new professionals looking to enter the industry?
This is a special time to be involved in the energy industry with the transition to decarbonization., decentralization, and digitization.
For anyone with an aptitude for math and the sciences or anything in STEM, I’d encourage them to look at what the energy industry represents over the next 25 years. Historically, the utility industry has been boring. It hasn’t moved very fast. However, it will soon increase exponentially, and there will be winners and losers. This is one of the last true monopolies that are going to no longer exist in the next ten years. Look at companies you think can be leaders and winners going forward.
This is also a complex industry with lots of acronyms and which can quickly get over your head, so make sure to find at least one or more folks that you can rely on as mentors. For example, I have been working with the PLMA formal mentoring program, as well as their women in DER program. I have introduced many of my mentees to industry professionals concerning their short- and long-term goals. These professionals gave them different industry perspectives and allowed them to start building their own community to rely on. I recommend building your network as quickly as you can, finding people willing to work with you, and do not be afraid to ask questions- there are no bad questions.
6. What are your goals for the future of Kitu?
I think the goal is for Kitu to continue to excel at what it does from a technical standpoint while also developing partnerships for it to participate in the overall growth of the DER industry, specifically in transportation.
Ross is a Senior Advisor to Kitu Systems and President and CEO of Malme Energy Consulting,
providing services to utilities and the energy technology community and specializing in consulting and raising growth capital for early to mid-stage energy tech companies. Previously Ross was Senior Advisor at Bowen, Inc. a leading growth capital investment banking advisory firm where he co-managed the firm's Energy Technology practice and has led the Smart Grid practice for Skipping Stone, LLC, an energy consulting firm. He has served on the Advisory Board of DistribuTECH, the largest industry conference in the electric utility industry for over 20 years.
Ross was the inventor of the first utility wireless automatic meter reading system in the industry which became the industry standard for over 25 years and the founder of one of the first successful electricity demand response technology and service companies in North America.
Interested in hearing more from Kitu Systems? Subscribe below!