Interview with Jigar Shah, Co-Founder & President of Generate Capital

Catherine: I’m Catherine McLean, Founder and CEO of Dylan Green. Today I have with me Jigar Shah. Jigar’s the Co-Founder and President of Generate Capital. Thanks so much for joining us Jigar.

Jigar: My pleasure.

Catherine: So tell us a little bit about yourself, for those couple of people who may not know.

Jigar: I think a lot of people don’t know me. I have been in the energy space for a long time. Probably most known for starting SunEdison back in 2003, and most recently co-founding Generate Capital in 2014 with my colleagues, Scott Jacobs and Matan Friedman. 

Catherine: Great. So last week, there was quite a soiree for the Clean Energy for Biden Inaugural Ball. I didn’t realize until I went to the event that it was your brainchild. So I’m dying to know A) What made you think of it? and B) How you thought you’d pull it off virtually?

Jigar: Well, I really enjoy a party. For those people who don’t know, I really believe that after working super hard, people need to celebrate. So I thought about it because I had a role in planning the 2008 and 2012 balls for Obama. We really had to push people to consider it because people said, “We’re so busy. We’re so tired. We really just want to relax.” And I was like, I think people are really going to want to party. So thank goodness they gave us permission to do it. And I was able to get Lynn Abramson at Clean Energy Business Network to help and Andrea Luecke and it went great. But it was a lot of hard work.

Catherine: It was a great event. I want to talk a little bit about entrepreneurship. Did you always know that you wanted to be an entrepreneur? Or was there a certain age where “working for people, not for me. I want to do my own thing.”

 Jigar: It’s a good question, and not necessarily an easy answer. My dad was an entrepreneur. He’s a physician but he started his own practice. Opened three offices and did all that stuff. So I watched him growing up. How much hard work it was, and how he came late from the office and all those things. And the sacrifices you have to make. And in terms of like HR. Some of the things in entrepreneurship, you don’t really understand that you have to pay for people’s healthcare. Right? You have to actually manage their benefits. All that stuff, also, is part of it. The one thing I would say is that the whole “not wanting to work or other people thing,” I find to be an old trope. It is absolutely true that some people don’t like bosses. It also is true that that doesn’t make them an entrepreneur. To me, entrepreneurship is about actually having an idea. And wanting to make it a reality. And believing that you and your idea and your vision are worth pursuing. I think there’s a lot of people, who I meet, who just want to be an entrepreneur. And they all have bad ideas. And when people tell them they have bad ideas, they are like, ok fine, just give me another idea. That’s not how it works! You have to actually find an idea that speaks to you that is truly a good idea. And then you have to go out and do it.

Catherine: What did you learn from SunEdison, that you carried with you to Generate?

Jigar: My life has been a pretty straight through line at this point. I figured out that people didn’t want to just take the money that was sitting in their 401k account, or their checking account or whatever, and use it for clean energy. They just didn’t. There was always something that was super important to them, whether it was sending their kid to summer camp or buy a new car, that they needed to do with that money. And you needed to be able to finance clean energy, otherwise it just wasn’t going to be their first priority even though people cared. And that has stayed true to my belief since the beginning of my journey in the clean energy sector. Sun Edison was clearly a manifestation of that around the power purchasing agreement. Generate Capital is the same, we basically believe that infrastructure has to be sold as a service. And that now, the technologies are so cost effective that sustainability wins. Right, it’s cheaper, it’s better for you, better for the planet, and a better product. But it’s not going to be the #1 priority for the CFO of a company, they would rather buy a competitor, or they would rather buy a new building, they would rather expand their geography than make their existing systems more efficient, by buying LED lights or whatever it is. They need financing. So I do believe that business model innovation and moving infrastructure to ‘Infrastructure as a Service’ has been my through line that I was able to prove at SunEdison. 

Catherine: Mentorship. So there’s a lot of talk about mentorship, the importance of mentorship. I’m sure you’ve mentored lots of people in your career. I was thinking the other day, I wonder if Jigar has a mentor. Do you ever get too old or too wise to have a mentor?

Jigar: No. I think, frankly, it is a huge sign of weakness that people don’t have a mentor. I don’t have a mentor, I have many mentors. I would say that they are not necessarily always older than me, there are a lot of people who just have a certain set of insights and a certain set of experiences that I can learn from. Whether it’s Richard Kauffman who is the current chair of our board at Generate Capital, a former energy czar of New York, or whether it’s Richard Harkrader who was an investor who decided not to invest in SunEdison when I first pitched him but has been a good friend ever since. Or Mike Miller who was a long time CFO in the auto-leasing industry and who just taught me so much about how that whole system works. Or, there are a lot of former politicians who have been mentors of mine. In general, I would say that I have been very deferential in understanding that I have a very narrow niche set of strengths, and that work fits into a greater whole which then completes projects. Whether I have to get political support, government assistance, like you need to set up the rules of the game, you need to be able to navigate Wall St., you need to be able to deal with community relations. There are a lot of people with expertise in all of those areas and I have just been floored at how many of them have been willing to share their expertise with me. 

Catherine: That’s really interesting. Talking a little bit about something that I know that you and I both share a passion for, which is Diversity Equity Inclusion, in general but specifically within our clean energy sector. I had a life-changing moment when I met you, that day at Panera in Bethesda, and I was just setting up Dylan Green. Which was the second recruitment agency I was setting and I said, “If you were me, what kind of recruitment agency, do you remember?” You said, “I would have an agency focused solely on diversity.” And I said, “Really? You think there is enough of a demand?”, this was before, obviously, our world turned upside down with MeToo and BLM and so forth. At that time though, what made you say that to me?

Jigar: Well it’s a great question. And it’s one that I would say relates to the mentorship question, which is, one of my mentors has been Michelle Moore, over at GroundSwell. Michelle has been on this Diversity Inclusion pathway for a long time, including when she was in the Obama White House. I never quite got it, I was like, “I don’t understand. Why do you keep talking about diversity and inclusion?” But I respected her so much that I was going to figure this out. Because she certainly is smarter than I am on a lot of these things. What it really comes down to is that we all operate under a social license. And that social license is given to us by the broader public. The reason why we have 100% clean energy standards around the country is because a sufficient number of people in those states believe that it was a good policy and told their legislators that it was a good policy, and then those governors championed it and they passed a law. And if we basically did all the same things wrong that our predecessors did in the energy sector, and we didn’t try to do it better, well then why would those communities actually be supportive of 100% clean energy? What’s in it for them? And it totally resonated with me, finally, it took a long time. But it finally resonated with me that we actually have to be inclusive. If we are going to go from $200 billion a year of investment to a trillion dollars a year of investment, which is what we need to stave off the worst impacts of climate change, then we need to make sure that women feel included in what we’re doing. We need to make sure that people of color feel included in what we’re doing. We need to make sure that Native Americans feel included. People should be included. I obviously didn’t know that MeToo or Black Lives Matter or other things were going to happen, but it does make sense that those events, and now movements, have led to a reimagining of what the workplace should look like. And there are a lot of CEOs in our space who are saying, “Hey wait a second, we want to be on the vanguard of this and not being the last to the party.” And it’s not easy to find people that are willing to help you recruit people outside of your social circle. And I think it’s so critical for someone to have laid down those markers and created that groundwork so that you can actually get high quality candidates for each position within your company or your board. 

Catherine: How do you think we can encourage companies to hire outside the clean energy industry? How can we convince them to do that? Because as we are growing as an industry and we have more and more jobs and more and more opportunity, we have to let new folks in. So how do we get companies to do that?

Jigar: It’s not an easy thing to do. And I understand it. If you are a small company, 20 people, and you need to hire a person, the fact that you are going to bring in someone from outside and train them and figure out how to get them up to speed on the trends in our industry, and some of the best practices and all that stuff… I mean, half of the people that run these companies with 20 people don’t actually understand all these nuances themselves. So they are like really going to bring in someone from the outside of the industry? Part of the reason we bring in so many people from outside the industry now is because we are starting to get a lot of companies with 200+ employees. With 200+ employees you have professional heads of talent, you have professional onboarding systems, you actually have the ability to take on people from outside the industry. Because you actually take people and training and valuing the people at your company more seriously than just having happy hours every week.  So, I think that’s what it takes. So my sense is that you’ll see a bifurcation for a long time between large companies and small companies. 

Catherine: Do you think that there are certain areas within these companies that lend themselves to taking talent from other places. For example, perhaps HR or marketing or legal or so forth?

Jigar: Well, certainly some of those positions feel less specialized to our industry, and so bringing in that outside perspective of how things have been done well in other sectors is probably useful. Marketing for sure, I don’t know that the clean energy sector has ever been known for good marketing. Or HR, or legal. I mean, with legal there is a lot of technical stuff on tax equity and that sort of stuff. Certainly places like safety, my sense is that there are many industries who do safety way better than we do. Or cybersecurity. Those areas can be a place where you can really find a lot of talent outside of the clean energy sector. But also project management, there are a lot of people who are real experts in project management and the ways in which you use productivity tools to enhance project management.

Catherine: What do you think is missing? So what do you think that we need to do as an industry to encourage more DEI, in general? So let’s look at things like students, and encourage students at a STEM university to come into our space. What do you think is missing to get this shift that we really need to get?
Jigar: Honestly, it’s more enablers, like yourself. That is our biggest problem because, look, it’s not that people don’t want Diversity and Inclusion, but our industry is like every other industry. Eighty percent of the businesses and startups in our industry are going to fail, for lots of reasons. And our industry is worse than other industries, because in our industry the dynamics of industry changes radically every 2 years. And if you can’t keep up with those changes then you are sunk. So I can imagine that Diversity and Inclusion is like #6 on their list. So if they actually want to get it done, what they really want is to be able to outsource it. And be able to say, why don’t we just hire this firm, they have a good reputation of Diversity and Inclusion. And obviously, Diversity and Inclusion doesn’t mean you are going to get bad candidates, but you may have to spend a little bit more time getting to know the candidates because they don’t come from your social circle. So you don’t immediately have four friends in common. But I think that being able to outsource it, to people like yourself, is the key to this whole thing because you gotta make it easy for CEOs, who are frankly under a lot of pressure, to be able to do this.

Catherine: Now I think diversity begets diversity. Once you start to get some diverse people into your organization, because so much of it is through a network, which is how we got into this situation in the first place. You tend to find it becomes slightly easier as people bring in their more diverse networks.

Jigar: Totally. I totally agree. But I think we have to be practical about this. It’s all well and good to say, “Hey, if they don’t make this a top priority, then they are not being a good CEO,” or whatever but for a lot of these folks it’s their own money, it’s their own network on the line. For most people, the stock that they own in the company that they started is 90% of their net worth. So, it’s not surprising that they make decisions that are super selfish. And even if those decisions are not in their best interest.

Catherine: What lessons have you learned when hiring around skills and attributes versus experience?

Jigar: Yeah, we are very careful about that at Generate. We have tests and things like that that we do because what we find is that if you actually really do make the interviewing process fully blind, you find that there are actually a lot of people with extraordinary skills and attributes that can do the job. And when you actually just go to experience what you find is that the people who had the best connections coming out of college have the best experiences, and those happen to be people of privilege. So, part of this is really doing skills and attributes. But the other thing that we’ve done at Generate, is now that we are close to 100 people, we are actually ok with people not having the full skills and attributes but having a history of being able to learn those skills and attributes. Part of what we’ve had to do is to say, “Look, you have gotten a certain level of expertise in this other field and that makes us believe you can actually achieve that same level of skill and excellence in this field.” And we have had to be better at saying, “Hey, it’s going to be a six month longer ramp up for this candidate,” but it’s important to be giving people a chance and to be more inclusive. Because what we get out of it, is access to a broader network. Right, access to a broader group of people, who frankly don’t even know that Generate exists, but will as we bring this other person’s network in. And that makes all of the things that we do at Generate richer. We get better deal flow. We get better access to communities. All the things that we need to be successful as a firm. 

Catherine: So my final question is around parenting, in a pandemic. So we both have sons. Your son is, I think, 5? My son is 2, and they are both named Dylan. I know from when we spoke that you are very proud that your wife has been very successful, in her own right. And I was thinking, it would be very interesting to hear from you, to have two successful career people in the household, how you divvy up responsibility, how does the average day work during this crazy time that we are in?

Jigar: Yeah, it’s a good question. And one that I don’t know that I have a fantastic answer for. I do think that, invariably, she does more than I do. So let’s just start there. Part of what I did is said, “Hey, let’s just not schedule any calls until 10:30, 11, 11:30,” because I have a lot more flexibility in the morning because we have a west coast power system at Generate, so a lot of meetings don’t really get started until noon. And so that’s a lot of what I did, is to push back my start time in the mornings, so I could do a lot of the morning stuff. And that freed her up to get her focused work time in in the mornings. Then she did a lot more of the stuff in the afternoon. Then I took over bedtime, which can be exhausting, as you know, so a bath and the whole 9 yards, bedtime and all those things, and that freed her up to get some more mental space, you know being alone for a little while so she could actually gather her own thoughts and rejuvenate. But the reality of the situation is that we are probably on the 70/30 track for what she does versus what I do. I think part of that is also acknowledgement of the fact that she’s doing that. Being mindful of the fact that people just need to be a little bit more forgiving, in these times

Catherine: Yeah, I couldn’t agree more. Is your son doing kindergarten on distant learning?

Jigar: He’s an October birthday so he’s pre-k. So it’s been a little better because he’s been in the child care loophole. He’s technically considered child care not school age. So we’ve been able to intermittently keep him in in-person school, which has been great because he’s a social animal and Zoom is impossible for him. But it’s been tough and I think that every parent has to do it their own way. But I hope this experience gives everyone a full understanding of what we’ve been saying as a society for 20 years, which is that we do a terrible job of childcare. And yelling at people around how they should be employed, how they should do all this stuff, and not giving them childcare solutions is really hurting their ability to be their best selves.

Catherine: And it’s hurting the economy. Well, thank you so much for your time. I really appreciate it. 

Jigar: My pleasure, this was great. And thank you so much for your dedication to the great work that you do. Frankly, I think that it was fortuitous that we were able to meet up early, but also the fact that you were able to really pivot your business towards Diversity Inclusion is critical because I just don’t know how our company, and many other companies, would have been able to navigate these water without your great leadership. 

Catherine: Thank you so much, I really appreciate you saying that.