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Podcast S16E01

In conversation with… Philipp Pausder, Thermondo

philipp pausder

In this episode, Jon Slowe is joined by Philipp Pausder, founder and CEO of Thermondo, Germany’s largest installer of heating systems. They discuss the current energy crisis, what Thermondo are seeing from customers, and how they’re responding. They also discuss whether energy as a service can accelerate the uptake of high-efficiency products in customers’ homes as the energy transition gathers pace.

Episode transcript

[00:00:03.310] - Jon

Hello and welcome to the episode. Today I'm talking with Philipp Pausder, founder and CEO of the Thermondo, which is Germany's largest fully vertically integrated heating solutions company. Philipp first appeared on Talking New Energy over three years ago, back in season two, talking about how Thermondo had developed an end to end heating installation business, which ranges from an online go to market strategy through to a network of heating engineers across the country. And I'm really looking forward to exploring how Thermondo has grown over the last few years. Philipp’s reflections on that and Philipp’s thoughts on the future, particularly around the energy crisis that we're currently in at the moment. So. Hello, Philipp. Welcome back.


[00:00:50.450] - Philipp

It's great to be back. Thank you very much.


[00:00:53.870] - Jon

So, Philipp, three things I'd like to talk about today. First thing, I think we have to talk about the energy crisis and from your business in Germany, what you're seeing from customers and how you're responding as a company to that. Secondly, I think it's about ten years since you founded Thermondo. Is that right?


[00:01:16.850] - Philipp

Yeah, we started working on it ten years ago. We launched nine years ago.


[00:01:20.190] - Jon

Yeah. So 9/10 years. Looking back, what are the top three lessons you've learnt over that time? And hopefully that will be interesting for our listeners, whatever part of the energy sector to they're working in. And then thirdly, I'm interested to talk about energy as a service from you, the idea of financing high cost, high efficiency products in customers homes, and whether this is really a key to the energy transition, at least the downstream part of the transition. So let's start with the energy crisis, then your top three lessons, and then energy as a service. So, on the energy crisis, can you give our lessons a feel for what it's like working in the German heating sector at the moment? What are you hearing from customers? How are you adapting and taking your business forward?


[00:02:14.270] - Philipp

Well, first of all, with that tragic and sad event of a war coming in the middle of Europe, having started on February 24, there's obviously so much negative and dramatic about it. For our market, though, it really means that it accelerated. As you know, Germany is heavily dependent on Russian gas imports and it was heavily dependent on Russian gas imports. Unfortunately, in spring 2021, we decided to launch the heat pump and we started working on that project pretty much right at that point of time. We were in the midst of piloting. We ran lots of pilot installations, obviously working on our software processes, the end of last year, this year, and then the war started. And then we very quickly took a decision, revisited, if you wanted, and said, well, we stick to our launch date. That was June. We wanted to launch in June 2022, but we'll be launching more regions faster. We are organised in ten regions in Germany. The first idea was to keep it to like three to four regions in the beginning.


[00:03:21.260] - Jon

What's that? So you could learn?


[00:03:25.430] - Philipp

Absolutely. And of course, it is a little bit of a risk, right. If you come with a new product that we might be talking about that later, that has a range of different activities involved from all angles, but then we kind of felt very strongly about contributing. Also, price for gas went up. There was an increasing number of people in Germany that also want to contribute by reducing the gas dependency of Germany. And that's why we then launched really all ten regions on that same day in June. And the demand we're experiencing since then is just at a very different level of anything we've ever experienced through nine years. Just to give you one number, it's an easy one. Google traffic. So all the keywords around the heat pump in the German internet are up by three to seven x. There were certain weeks it was up by ten x versus the previous year. So I think it shows you that there's just a huge number of people that are looking for answers, lots of media attention in Germany, because it's an increasing number of people that understand that this is a very important building block for both the decarbonization of also reducing energy dependence.


[00:04:40.650] - Jon

I can understand households desire to reduce their running costs to minimise dependence on imported gas. Is that interest translating into sales? Because I think it's quite easy to be interested, but then to take the step of actually signing up for something is quite something else. So how are you finding that translation of interest to orders?


[00:05:04.890] - Philipp

Well, that's exactly our job, by the way. Right. So to gather that interest and then walk people, guide them through our funnel, some of that funnel is online. That has not changed. We are receiving getting data points from our customers and that helps us to understand whether the home is technically eligible for a heat pump. And then we always have a presales call where we go a little bit deeper and then we filter out some more people for a range of reasons, often because it doesn't work for them. And also, of course, touching on price for the first time. And then thirdly, we have our sales visit of our sales agents to the homes because we need to collect quite a bit of data. As you know, an offset air source heat pump is an outer unit, so there's regulation around distances to the neighbours for noise emission reasons. So there's a range of new activities that we have to learn and go through with our customers and prospects. But I can tell you that we have sold 1200 heat pumps in the first ten weeks or nine weeks after the launch, and that is a lot more than what we had forecasted and budgeted.


[00:06:13.890] - Jon

And how does that compare? Are you able to say how that compares to the boilers that you're selling? Do you think you'd be selling more heat pumps and boilers at some time?


[00:06:22.480] - Philipp

No. Right now at a speed of selling like 900 to 1000 units a month. And so if over ten weeks. And keep in mind there's a certain appointment to order lead time people consider, and that is usually four to six weeks on average. So that gives you an idea of how quickly that bit of our business has ramped up in terms of share for us.


[00:06:51.110] - Jon

Yeah. And you talked a bit about what you've learned through your pilots, the idea that you're going to launch in a few regions, but then you've launched in all regions. How hard has that learning been for you? What are the key things you've had to change or understand or get used to and adapt to on the way?


[00:07:14.190] - Philipp

Well, there are activities that just make a heat pump installation more complex than a boiler installation. Namely that is you have to set or lay a foundation for the outer unit. There are certain technical specs attached to that, certain requirements. And that literally means you have to dig holes in people's front yards or backyards.


[00:07:34.540] - Jon

And you've not done that. You don't do that with boilers.


[00:07:37.240] - Philipp

Absolutely not. So that was entirely new to us and we're still learning. And secondly, you have to involve a second certified trade and that is the electrician, only electricians can work with the power grid, similar to SHP specialists tradesmen that are the only guys being able to allow to work with these gas grids. So you have not two certified trades involved and that needs to be orchestrated. Right. Especially if you want to do thousands and thousands of installations per month. So there's a lot of stuff we are learning and optimising and of course, in the beginning the operational excellence or efficiency is not the same as what it would be will be in a couple of months time. But at the same time there's also some reduced complexity. We don't have to deal with the chimney sweeper anymore. That's all partly regulated. In Germany, the chimney sweepers over the past years have not necessarily been our best friends. Right. And they're certainly not the best friends of the heat pump because over time that means that their work is not needed anymore. And issues with the chimney have been on the top or near the top of our post installation issue list.


[00:08:46.970] - Philipp

So that's, for instance, going away.


[00:08:48.550] - Jon

Okay. Yeah. Okay. So some challenges and things to learn, but some things that are simpler. What about in the heating industry? If you talk to someone who lives and breathes boilers there will say, oh, these homes aren't suitable for a heat pump. And if you talk to heat pump people, they'll say heat pumps can work in most zones. So how are you finding that, you're neutral, you just care about the customer and getting them the right solution. What are you learning about in terms of the range of homes that you are installing, what kind of heat pumps in?


[00:09:21.990] - Philipp

Well, we are not entirely neutral, but keep in mind we have a purpose that is together for climate neutral living and we haven't been really been able to live up to that entirely just because the market wasn't there. But we launched a company that was, from day one, what we wanted to do for many years. It was more about efficiency. So reducing probably CO2 emissions by 30, 40, maybe 55%. When we talk solar thermal, we're not entirely neutral because we're all very excited and passionate about the fact that we cannot fully live up to that purpose. But I think that's almost the most important question that you're asking here. This means that a huge industry is going through tremendous change and it's not very different to combustion engines, to e-vehicles, that kind of change. It touches on all aspects of the value chain, from obviously, manufacturing to installation, subsidy provision, to everything. Fortunately, in our market for us, many of the incumbents are simply of greater age, right? So they are maybe at the end of the entrepreneurial career and they are very careful about whether they are going to invest time to the change management.


[00:10:37.380] - Philipp

Because it does mean, like I said earlier, that you have to train your entire workforce, you have to invest. That means you're not doing revenue those days. And I think that, of course, for us is a tremendous opportunity. We do have the resources and certainly the mindset to change. It is a special time in that sense and one that we're really enjoying with all the hard work that's involved.


[00:11:07.150] - Jon

So are you finding most customers that want a heat pump and are willing to pay for it or rent one from you can actually you can find a way to make that work? Or are you finding large numbers of customers where the home? For whatever reason, it won't be suitable for a heat pump?


[00:11:24.730] - Philipp

Yeah, so if you take Germany, we have 60 million one and two family homes, there's quite a bit of data actually available about energy standards and efficiency rates. Germany and post that oil crisis in the 70s, actually launched an energy efficiency act that really ensured that from that point onwards, buildings were built at a certain quality and for the first time ever with an energy efficiency point of view in mind. Plus, as you know, Germany was heavily destroyed during World War II, so the overall building stock in Germany is rather young compared to the UK, compared to France, compared to some other countries, although that is the case, you would find tonnes of journalists and probably also lobbyists that will argue we can't get to relevant numbers in the heat pump space. And that's simply not true. Right, so 40% to 50% of homes are eligible today for the heat pump when it comes to energy efficiency. And then there's another bracket where you just need some minimal invasive changes. Like you might be able to you might have to change a couple of radiators just to expand the heat load that can be provided to rooms. So our Federal Minister of Economic Affairs and Climate Protection, Robert Habeck, very early on, and that was pre war started, he went to the press and said, I want 6 million heat pumps by 2030.


[00:12:52.710] - Philipp

And that was obviously based on some work some think tanks had done. And that means very quickly, this country needs to get to like 5/6/700,000 units a year. Germany, we installed 154,000 last year. Probably this year we're going to come in at like, close to 200,000. So there's still a lot of room to grow and we kind of have to grow. So we think it's doable. We certainly going to contribute and we certainly have the ambition to be the market leader in that segment.


[00:13:26.190] - Jon

Yeah, great opportunity for Thermondo.


[00:13:28.150] - Philipp



[00:13:28.960] - Jon

To help reach that goal. But let's move on to the second question now. So I was speaking in the last episode to Sandra Trittin from tiko. I remember when I first learned about tiko, started talking to Sandra, looking at what they were doing. And I said to Sandra on the podcast, I thought at that time, wow, this is a vision of what I think the future will look like. Here's a company who is right on the leading edge of creating the type of part of the energy system that we're moving to. And when I first came across you and Thermondo, I thought the same thing. I thought, this is really revolutionising it's bringing the heating industry from an analogue, I'm exaggerating here, 20th century industry to 21st century business. So I was so excited by what you were doing. And you've been going nine years now, ten years since the idea. I'm really interested in what you've learned on that journey. So if you look back, what are the three biggest things you've learned is you've tried to digitalize and bring quite a new, different customer experience to modernising heating systems.


[00:15:01.430] - Philipp

So that's a tough one because three, probably my list of learnings is like 200. And probably most founders would tell you that you learn every day, you learn every year, because you also elaborated on our history. Now, we're nine years old, and I always look at our journey as being split in three parts. So we had the first three and a half years where we really were so new to the market and were the first ones daring what we did, daring to do what we did, and really being the first ones that looked for answers and software. In this part of our economy, what we do is take a super complex service that has its production location, that has a super heterogeneous production location. We don't produce, obviously, in a factory. We produce in people's homes. So there's by nature much more risk involved. Certainly when you think about the fact that we are touching on at times more than 100 year old hydraulic systems, right, without radiators. So it's so important to collect the right data to be sure about that data, to do proper planning, to put that in the algorithm. And we did all that.


[00:16:15.510] - Philipp

Although there's so much complexity involved, we were the first ones to really come up with a fixed price offer. So until today, we don't do cost estimates. It's always fixed prices because from day one said it is our responsibility to collect data and to be correct and in the end assume that risk, whether we are correct or not. The first three years are really those hyper growth, super duper innovation years.


[00:16:42.330] - Jon

Really pushing the boundaries.


[00:16:45.540] - Philipp

Winning All kinds of awards. We were the fastest growing company in Germany. You got award and award for that. Also the Financial Times rankings back then, very near the top in Europe. And then the following three years were the tough years. Right? Like I said, I think we're a little bit too early. We had to reach a certain size in which you just have to also need a different kind of leadership. Right? And there's only two options. You develop yourself as a leader because the company just got so much bigger and you add skill sets to your toolbox, like obviously much stronger cost control. And so those three years, they were the tough ones. And then basically, as of late, 19, we really cracked the code again at that new size and growth came back. And ever since then, early 2020, and then of course, Covid hit and that different challenge. Sure, but it didn't really hurt our goal for a lot. I mean, obviously much higher rate of people being sick and so much leadership being needed in that period, but the demand was there. And basically ever since then we're growing at like 50% to 70% year on year, depending on the quarter you look at.


[00:18:02.970] - Philipp

So just on the journey now, you're asking those three top learnings. I think the first one really is timing, right? And that is probably the element of luck. Or a mixture of luck and judgement. Maybe you're right. It's not only luck. Right. And once the market was there, the game was just so much easier for us. And then those years earlier, we just had to if the market only grows to 3%, it's quite difficult to grow 50, 60, 70%, right?


[00:18:34.880] - Jon



[00:18:36.250] - Philipp

The second one is really twofold. It's both talent related. Start the company with a diverse team. Probably we're not diverse enough as a founding team. And that team should have the stamina to do this for a very long time. Right. Often founders think, it's more of a sprint. But few companies are built in sprints. Most companies are built in probably hundreds of sprints. And that's why it's demanding. Or a very long marathon.


[00:19:08.410] - Jon

Just think of those stages you talked about those first three and a half years, super exciting because you're pushing the boundaries, you're doing new things, but the middle three years are tough years. Maybe a bit less exciting for challenging in a different way. I imagine having the mindset to get through those tough years where it's not about doing really exciting, brand new things, but making processes work. About making a machine work. Yeah.


[00:19:38.600] - Philipp

It's about grinding it out, right? Yes. Really about grinding it out. You might know, I used to play basketball, and basketball is a game where everybody plays offence and everybody plays defence because it's so fast a game. And if you want the first three years, we're all about playing offence. And those middle three years were all about playing defence. And then there's some players that just don't enjoy defence. But if you want to be a great player, you got to play both.


[00:20:01.680] - Jon

Yeah. Okay. Great. Diverse team and stamina in the team.


[00:20:07.010] - Philipp

Diversity and stamina. And then the second bit of that is really recruit. Like your life depends on it, because it does. Until today, I'm pretty deeply involved in recruiting processes. Not only obviously my direct reports, but also other people. And whenever I stop doing that, I feel like we don't always get the right talent and that is very costly. So, obviously, a company that is growing a lot and innovating a lot relies on being able to recruit the best talent. So that's really critical. And then the third one is, I guess, finding the right balance between being stubborn and open. If you are the first one doing something, and certainly in a country that is not necessarily embracing change culturally, then it's just part of your everyday life that people say, this is not going to work, or what's so complex about that? Why it's not like the large utility doing this and what's so special about that? And you will never be successful. So that's a stubborn bit. And at the same time, you've got to be very open because as a founder, if you want to run your business for a very long time, you have to be a very good learner.


[00:21:28.990] - Philipp

And there's humility being involved and obviously a very different skill set. Sticking to our journey needed for the first three years and for the middle three years. And now it is very much also about being a proper CEO that runs a decently sized company and that involves much more. Let's say. Many more organisational matters and quite a bit of more discipline to run that and or building a team that is very good at that. That allows you then to still be more of that visionary kind of guy that it needs for any company.


[00:22:02.870] - Jon

I remember Philipp, we've both talked about the book Good to Great, which I am. I've read cover to cover and I revisit it regularly. So in the journey of Delta-EE and our growth. It's been not quite on my bedside table, but not that far away from it for that journey. And I know, as you said, it's one of your top three books. And there's one bit in there that talks about not ignoring the truth and the numbers. And it's that balance between having that vision and being able to work through the tough times and having that belief in what you're doing, and yet that balance of not ignoring what the market is telling you and what the numbers are telling you.


[00:22:48.120] - Philipp

Yeah. And it never stops. Right. So today we were discussing the level of detail in our weekly or bi-weekly management meetings. I'm a believer that we should have quite a detailed level of detail and really look at rather more KPIs and less. That does not mean that we should not be talking about culture and the soft factors and vision and togetherness and collaboration. And that just shows how demanding that rapport twice that you need at one point, I think if you want to lead and they really make a difference between a growth company and a corporate, if you want to lead a growth company also as a member of the management team, you got to be a growth executive and growth executives. What's so demanding about being one is quite a high degree of discipline already, quite a high degree of professionalism, while still being able to be tactical at times, while still being able to be creative, while still being willing to take decisions fast and also change your produce rather quickly if needed. Right. And finding that balance between not being too technical but still technical enough and sticking to the plan is what makes the stage demanding.


[00:24:08.930] - Jon

Are you enjoying it as much now as you ever have or more than you ever have?


[00:24:13.100] - Philipp

Yeah. I mean, there are days when I'm asking myself, well, I'm just an ordinary CEO if you take this right. But my everyday life is not too different to, let's say, somebody who maybe would be hired to run this company. And I'm not always getting the chance to really work around my strength. But that's also the part in the end, it's my responsibility. It's my responsibility to build a team that allows me and frees time to go back to some of my strengths. And interestingly, the team needs that too. Right. Because if I don't inspire, it's unlikely than anybody else really inspires. Right. So it is part of the responsibility of the CEO to do that. Right. But it's when you meet other founders, we have dinner. I always call it our therapy classes or therapy meetings. There's another book on my top three is Hard Things about Hard Things. You know the life of a startup CEO.


[00:25:23.780] - Jon

I don't know, I will add that one to my list.


[00:25:25.950] - Philipp

I think it's a brilliant book. It really shows that journey, and it shows how some decisions are difficult and that you have to be good at quite a lot of things and if you aren't, then you have to learn them quite like that.


[00:25:40.100] - Jon

Yeah. One of my favourite books, Philipp, is in my top three is Start With Why by Simon Sinek. What I love about that is you put the vision, the mission, the purpose of what you're doing at the heart of everything.


[00:25:57.250] - Philipp

He's probably one of the most influential impactful guys we have right now. Also there, as a matter of fact, I'm preparing for speech next week. I'm giving it in front of a pretty large audience and, yeah, just using his Why How What. This is a very simple structure and yet one tends not to use it and then you can go back to it.


[00:26:23.110] - Jon

Well, we could talk a lot more about leadership and growing a company in the different stages, but let's get on to the third question I had, which was around the phrase ‘energy as a service’. It's used really widely, but in my mind, in the energy transition, we're going to see a lot more high efficiency but high cost products in customers homes, be that solar PV and battery, be it a heat pump, be it a vehicle to grid, EV charger, whatever. And I don't believe that every customer is going to pay for that or finance it themselves. So the model where a company likes Thermondo, finances, leases, rents, whatever, a heat pump, for example, to customers and customers can get the benefits of that without paying a capital cost up front for me, is going to be a huge part of what we'll need to succeed in the energy transition. I'm interested in your thoughts on that because you've done both. You sell products as a capital item and you sell rent products as a rental model or finance model. So very interested in what you've learned about that and how critical you see that in the German market where you are to this part of the energy transition.


[00:27:45.790] - Philipp

First of all, we are, of course, strong believers in that product, right? So we have just believe this is all about inclusion. We feel that everybody or a lot of people have the right to live a carbon neutral life, disregarding their liquidity. Obviously you need some solvency. But this on the liquidity, we feel that especially now with what's coming up now and looking at the recession that is about to happen, already happening, and I believe it's going to be around for quite some time. And at the same time, this economy, any economy, European economy, has to decarbonize. And this is about the mains of homes too, not only, but too. It is a critical or pivotal product for this transformation. What we see is that there's probably three customer groups. The first one is obviously a cost oriented customer that might not have the cash or look at it rather rationally. And of course, here, community pricing really helps us. There's a very simple rule of three. If power is less than three times more expensive than gas, then very simple terms, it does make sense to economic sense through switch from gas to a heat pump.


[00:29:16.920] - Philipp

And of course we do have that. Right now, gas price is pushing 20, 21,22 cents in Germany while power is at 35,37, 38 cents. So that's customer number one. Customer number two is really that no hassle one stop shop customer. My life is busy. There are so many more important things in life than worrying about my heating system. Just get it. And of course I want it to be carbon neutral or green. But most importantly, I'm a busy person. Make it easy for me. Right. And the third customer, those two we've always had. Right. We have had that also in the boiler segment. And the third customer is really new and that's due to that war that is I want to contribute to reduce German dependency on Russian gas. And probably there that's twofold. It's really on that society layer. I want to contribute to society but also I want to switch off that noise that I have in my mind or my mind. It's constantly in the media and the moment you are connected to you heat your home with a heat pump. You can literally, if you want, at least ignore that bit of the media.


[00:30:35.230] - Jon

They want to feel good about it. Yeah.


[00:30:37.090] - Philipp

And you feel good about it too, right. Germany simply does have to reduce its gas consumption and I think 40% of all gas in Germany is consumed by German households to heat the home.


[00:30:51.330] - Jon

So energy is a service then, fitting into those three customer types. Do you think the market is delivering what the customer types need? Be that Thermondo, be it Sonnen, be it whatever product category, has the market developed the right propositions yet for these customers when it comes to energy as a service?


[00:31:19.170] - Philipp

Well, I think a very important step for us was and keep in mind we were probably the first ones to make boilers bankable. As a matter of fact, when I pitched to a Swiss investor in I believe it was 2014, after like ten minutes or 20 minutes into the pitch, he said, that's interesting. You're basically creating a new bank of the product. So you're creating a new product for the capital markets and you're going to be successful because Germans lease their beloved car. So the leasing rate in German is 70%, right. For cars. What we learned over those years was that of course this was new and of course we probably sold a lot to early adopters or the trendsetters even. But the more logical array of the product gets and the more it just simply makes sense, the easier of course it is to sell. And again, that's where commodity prices kick in. If gas is getting so expensive then it simply does make economic sense to do this right. Certainly. At least going for heat pump. So going back to your question, is that the right proposition? If you're spending €5000 on gas per year versus €2,500 on power for your heat pump, then that's basically €200 a month you're saving if you go.


[00:32:47.400] - Philipp

And then basically that heat pump is going to cost no more than €200 per month. That's pretty much where we are. So it's almost like a no regret product. So the core question really is, is your home eligible? Can you do it for your home? And that goes down to or not just the home, what's the installation levels and so on. But if your home is equipped for this, eligible for this, it's pretty much a no brainer.


[00:33:11.650] - Jon

I talked to a lot of people in the heating industry about this type of product, and you hear a lot of people will come up with objections like, what if the customer stops paying or you need the customer to sign up for a long contract or a portion of risk, for example. I agree with you, it's no regret product in many ways. But have you found ways through all these, or do you think the industry is finding ways quickly enough through these sorts of objections that people might come up with?


[00:33:49.510] - Philipp

Well, the way we look at it is we are assuming full responsibility for the hardware and it is our job to make people understand how much what that means. Right. So by definition, pretty much all of our customers take a concept decision for the next 15 to 20 years. And this, by the way, very different to buying a car or leasing a car. That's usually like a three year decision.


[00:34:11.080] - Jon



[00:34:11.440] - Philipp

So you're taking a concept decision for the next 15 to 20 years and why we don't give guidance on commodity price development for those 15 to 20 years. Most people understand that it's rather likely that gas is going to get more expensive. While there are certain ways to at least control power or even bring power prices down, most people understand that gas is CO2 intense, while power will be rather CO2, let's say, to be declined. Exactly right. And that's exactly where the 15-20 year decision comes in. The German power mix today is rather dirty, but given another five, six, seven years, it might look already very differently. And then you're still only at the half time of the tenure of your heat pump. So I think it really comes down to explaining that product to people. But I don't expect incumbents to be as good as that as we are. Right.


[00:35:09.990] - Jon

Yeah. It's a marketing and communication challenge as much as anything.


[00:35:14.680] - Philipp

And also keep in mind, we are transforming our business from the product categories we use conventional so that's our fossil boilers and hybrid, so that's gas plus solar thermal from that mix until late May to probably close 100% heat pump within nine months.


[00:35:39.110] - Jon

That's quite some transition.


[00:35:42.110] - Philipp

Exactly. And that requires strong set of values, requires beliefs, it requires being gutsy and.


[00:35:53.250] - Jon

Links back to that leadership.


[00:35:56.670] - Philipp

And incumbents at times take different decisions, right. Because they have a different legacy.


[00:36:05.410] - Jon

Philipp times getting the better of us. So let's move on to the last thing for the podcast, which is talking new energy crystal ball, and I want to ask you where you think Thermondo will be in putting the crystal ball setting to 2030. In a nutshell, winding forward to 2030. Give me an elevator pitch for Thermondo in eight years time.


[00:36:34.630] - Philipp

Well, we're much closer to 2030 than the last time we talked, so this is getting a bit easier. But in 2030 will be a multinational player. We will for sure go international at one point in time and we'll be a one stop shop for climate neutral living, offering heat pumps, PV, battery, possibly power tariffs. Kind of have different views on that. We're still about to understand that, of course, we want to own the data gateway to the customer and own the relationship. And the idea is, of course, to put all of that into one contract of, let's just say, €400 a month. Right. We feel very strong about that. It's very much about simplifying for customers, about reducing complexity, and we also feel strong about the vertical integration that we've always been having and have been executing. And now it's all about being able to do that for the other products, too. We feel so confident about the fact that we go from hard to easy. We argue, and probably most people would agree on that in our industry, that the heat space, from a planning and construction point of view, is quite a bit more complex and demanding than PV and battery, just because you touch on so much more legacy equipment.


[00:38:01.130] - Philipp

So we have quite a bit of confidence that we'll be able to put all that together.


[00:38:05.700] - Jon

And now I'm going to ask you for your biggest single challenge to achieving that, which I know is an unfair question, but if there's one thing that you think you have to of all our challenges, this is the thing we'll have to nail or get right? Yeah.


[00:38:19.300] - Philipp

I mean, the biggest challenge is, of course, to manage all of that growth. And our markets are large, right. So 150,000 heat pumps last year in Germany, that's probably on an end consumer layer. It's probably like €4 billion. And if the market is really going to get up to 5-600,000 in just two years time, we're talking about a 20 billion euro market. Right. So growing from €4 to €20 billion in 3 years time, that's extreme growth. We are well positioned to obviously outperform that market. We've always done. And so that technique is going to go from large to humongous.


[00:38:59.870] - Jon

And you've got to scale, we got scaling and the growth.


[00:39:02.990] - Philipp

Yeah, it's sad. We have a very operational mindset at Thermondo. It keeps us humble and keeps us on our toes. But that is and will always be our number one challenge.


[00:39:16.530] - Jon

Well, you've shown your tenacity, you've shown your leadership through the three phases. You talked about Philipp and, well, I wish you all the luck. I don't know if you need luck. And success too.


[00:39:31.110] - Philipp

Always need it, I don't mind.


[00:39:35.840] - Jon

To achieve that by 2030. We'll wrap it up there. So thank you so much for your time, your openness, really enjoyed the conversation.


[00:39:47.790] - Philipp

It was great being here again. Jon, thank you very much.


[00:39:50.660] - Jon

And thanks, as always, to everyone listening. We hope you enjoyed hearing about Philipp's experiences Thermondo’s growth, the discussion we had and it's given you ideas and inspiration to take back to your role, whatever is in the energy transition. So thanks for listening and look forward to welcoming you back to next week's episode. Thanks and goodbye.


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