In this episode of the McKinsey on Start-ups podcast, McKinsey senior editor Daniel Eisenberg speaks with Ryan Morris, the chairman and CEO of Turntide Technologies, a company determined to increase the cost-efficiency and energy-efficiency of electric motors. An edited transcript of their conversation follows.
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Driving motors into a digital, sustainable future
Daniel Eisenberg: Hello and welcome to McKinsey on Start-ups, I’m Daniel Eisenberg.
For a technology that powers so much of today’s global economy, the electric motor hasn’t really advanced all that much since it was invented more than a century ago. That may explain why today fully a quarter of global electricity consumption is wasted by inefficient, legacy electric motors. Ryan Morris believes his company, Turntide Technologies, is poised to solve the sustainability challenge by revolutionizing the electric motor. As chairman and CEO, Morris leads a start-up that has developed and is commercializing what it calls a Smart Motor System, which is more energy-efficient and cost-effective than traditional motors.
Combined with automation, intelligence and features such as remote monitoring, Turntide’s technology is already starting to be installed in building HVAC systems, agricultural smart barns, and commercial and industrial vehicles. Morris launched his first venture right after getting his master’s degree in engineering at Cornell University. By the age of 27, he was executive chairman of a publicly-traded company. And he started building Turntide Technologies in 2017.
Ryan, thanks for joining us today.
Ryan Morris: Thanks for having me.
Daniel Eisenberg: Tell us a little bit about Turntide. What is the problem you’re trying to solve?
Ryan Morris: Turntide’s mission is ultimately to make every watt worthwhile for humanity. And the way that we’re going about that is we recognize that half the electricity in the entire world is consumed by electric motors. I worked on electric vehicle powertrains prior to Turntide. And this was something that even with my engineering background didn’t occur to me. I didn’t think of all the HVAC, all the refrigeration. There’s actually an electric motor behind pretty much everything that moves in civilization.
The dominant architecture of motors was invented by Nikola Tesla in 1888. And there’s been basically very little improvement since then. The core innovation that we created was this new architecture that doesn’t use any permanent magnets, so it’s much more efficient.
We live in this era of exponential technologies, exponential improvements. And we really harnessed that so that we can drive energy waste out of all these systems. Whether in buildings or electrification with transport, it’s really making all these systems intelligent and efficient.
Daniel Eisenberg: You talk about how your smart motor technology does not need any rare earth metals or materials, and that this is a big part of the benefit.
Ryan Morris: Right. The architecture that we are the leaders in is called a switched reluctance architecture. It’s actually a very old idea. You could think of it as the limit function of the simplest mechanical electric motor that can be built. No special materials, just steel and copper—so electromagnetic, but no permanent magnets.
If you look historically, motors are these very mechanical things. There hasn’t been a lot of change in that field for a long time. It’s really been based around the materials, or the mechanical aspects of it. And with the architecture we have, it’s really very hard to control.
It wasn’t until you had all these breakthroughs in computing power where you could get billions of compute cycles a second for dollars that this became feasible. And rare earths, as you highlight, is a big geopolitical issue. They’re extremely environmentally-destructive to mine. The vast, vast majority of electric vehicles today that are taking advantage of the most advanced electric motor technology need these very scarce, very expensive, environmentally-destructive materials in order to achieve those high efficiencies. So we’re looking to be the next generation that’s even better and doesn’t need those exotic materials.
Daniel Eisenberg: Your initial focus is heavily on building operations and HVAC systems?
Ryan Morris: We’re about 50/50 between things that move and things that don’t move. So we have built environment, where you’re plugged into the electricity grid. And then there’s transport, which we’re really focused on—commercial, industrial, and specialty. Not so much the passenger car segment, although perhaps five years from now we’ll be focused on that. But we’re really focused on markets that have been underserved. You read a lot of headlines about electric cars in the passenger car space. But basically everything today that moves with fossil fuels is going to electrify.
Daniel Eisenberg: When you think about motor technology, it seems kind of amazing how little has changed compared to other kinds of technology. Do you have any sense of why that has been the case?
Ryan Morris: If you think about what an electric motor is doing, for example, it’s fundamentally a very electromechanical problem. You can’t just get a bunch of software engineers to go make some amazing code and move all the atoms and high energy things around.
Historically, these were very different domains. You lived in in the world of pure software or the world of pure mechanical. The convergence between the two that is happening now is a very, very recent phenomenon.
Advances in batteries are thanks to material science, which is very computationally-driven, for example. And so we’re trying to harness what I call the freight train of Moore’s Law, this idea that you have an exponential price performance improvement in information processing.
But if you’re in just the mechanical domain, you sort of don’t have an opportunity to harness these kinds of trends. So you really have to kind of reinvent the DNA of what you’re doing from software first. That is basically what Tesla did. They took the car and created it as, like, a software system integration problem first, versus hardware first, like a lot of the incumbents.
Daniel Eisenberg: Turntide’s technology was originally started back in the early 2000s, if I understand correctly. Can you tell us briefly about how your past experiences led you to founding Turntide?
Ryan Morris: Yeah. I have a pretty unusual background. I sort of joke that I have a Benjamin Button inverted career. I was a pro road cyclist and national champion rower during college days. As it turns out, that was probably a far better education than my engineering degree, just in terms of the pain tolerance required to go and change some of these industries. I was really fascinated with Warren Buffett early in my life, and I actually personally learned about nuclear fusion from a documentary when I was 11. Then as I got deeper into that, it was like, “Well, okay, if you want to solve these really hard physics problems, you need a lot of capital and resources.” And that led me down this pathway into business.
After college, I started investing in other small public companies, and recognized that a lot of them were not being run very well. So I ended up actually being kind of a shareholder activist to go turn around really underperforming companies. I went into decades-old companies that I thought were positioned well to take advantage of an inflection point in technology. The first public company was a health care service business that basically was still using fax machines for everything.
In that case, I recognized that technology doesn’t move necessarily in straight lines. There are times when you have this sort of discontiguous change—for instance, you won’t incrementally go from an internal combustion engine to an electric vehicle. There’s a big step change and inflection required to go from one paradigm to another.
I was chairman of three public companies that were kind of stuck in these very old markets. On the one hand, there was a lot of negative baggage that came along with that. But on the other hand, a lot of these were very high reliability industries, where you can’t just show up with a new product, as you can sometimes do in the consumer space. It takes you five or ten years to build the trust of the people in those spaces.
For me, the pathway to Turntide began when I was working on electric vehicle powertrains and learned about this switched reluctance motor technology. And it was, like, a two-minute realization of, “Wow, this is obviously an architecture that’s an information-bounded problem. You should be able to throw a lot of compute at that and basically solve the problem.”
Daniel Eisenberg: And that’s when you really began investigating the state and feasibility of the technology?
Ryan Morris: I started looking around the whole world of who was working on it. It was mostly in academia, where there had been a previous attempt, as you alluded to earlier. I say it’s analogous to General Magic and Tony Fadell, the founder of Nest and iPod creator, who is one of our investors. He was part of this group that was spun out of Apple, and they had exactly the correct idea for [what would eventually become] the iPhone. But at the time, it was a total failure, like a $400 million bonfire. And it’s because they were 15 years too early. If you think of $100 worth of semiconductors can buy you one minute worth of music storage, that’s cool to an engineer, but it’s not very compelling as a product. But you add 15 years of Moore’s Law doublings, and, that’s a thousand hours of music, and multi-billion dollar product.
There was an attempt in the 1990s to make switched reluctance work. You could kind of make it work, but it wasn’t really efficient and it had a bunch of other issues. It was similar to how General Magic made the iPhone “work.” But it wasn’t quite there from a mass-market perspective.
So we knew it was possible, and it was really just a question of how to get all the pieces together. Could you have the underlying enabling technologies to actually solve this problem with switched reluctance, which people in geeky academic motor circles have been touting as a panacea for many decades. But nobody had actually put in the effort to take it over the finish line. Nor could you really conceivably have done so until maybe five years ago, just in terms of the availability of the underlying compute components.
The long story short for Turntide is there was this technology spun out of the original IP—it gets a little technical, but it’s sort of inverting the geometry on its head. It’s called a high rotor pulse switched reluctance, the physical optimal geometry for this type of motor. It was spun out of the university, invented in 2006 by Piyush Desai, who’s a co-founder of the company and is still with us as a motor designer. It took ten years, basically, to get the technology to work.
Whenever the inventor has the patent and the stroke of genius, it’s like, “Okay, I’ve got the patent, I’m done.” And in truth, it’s more like, “Well, in ten years, with another hundred million of investment, yeah, then you’re going to have something that works. And then you are at the starting line to building a company.”
So I am certainly not the inventor of the technology, but I recognized that it should have been feasible. When I joined, Turntide was previously called Software Motor Company, and it was basically a research project that had made big breakthroughs. I really assembled the current team here, growing it from a group of nine people to almost 600 people today.
Daniel Eisenberg: It looks as if the last few years have been pivotal to Turntide. You have the different investments. Amazon’s Climate Pledge Fund, and Bill Gates’ Breakthrough Energy Ventures. You’ve won a litany of awards for the product, recently completed a new funding round, and I believe you’ve reached the milestone of more than 5,000 systems installed. Given the long road the company has taken to the current momentum, how have you found going through the different cycles of interest in sustainability, and IoT?
Ryan Morris: The original idea for Turntide was really this intersection of IOT and sustainability. We’re certainly anchored in the fact that we have a hundred-plus patents on this very unique deep tech, deep science electric motor design. But the idea was always to package that as a system. You don’t want it to just be a component, you really want to solve the problem the customers have in the real world.
You know, it’s funny, I guess it’s been four and a half years since I’ve been working on this full-time. And every six months I feel like, “Okay, we’re going to break through this thing and then we’ll have some kind of stability.” And then we keep raising the bar. The goal that we’re going after is just massive. There’s hundreds of billions of dollars of electric motor-driven systems sold every year, and they account for half of electricity consumption in the world. So it really is a 2040 mission.
We’ve got a really amazing team now. But it’s only really been since the middle of last year that sustainability tech, deep tech, has kind of come back in the investment world. The first two to three years, we had to self-fund, in a sense. It was really all the investors who had backed me in in other previous endeavors. Until maybe a year ago, it was virtually impossible to get funded for hardware, for hard tech. There was still a big hangover from clean tech 1.0, biofuel, and other things that were inherently uneconomic.
Daniel Eisenberg: To what degree has regulation around emissions and sustainability played a role, especially in recent years?
Ryan Morris: I would say it’s a mild tailwind. I’m always sort of wary, personally, of getting into businesses that are dependent on things like regulation or government subsidies. You know, I definitely want to have a free market, and one of the issues with clean tech 1.0 was you had all these subsidies for biofuels, for example. Then as soon as they went away, the market collapsed. So I think it’s really important to have a business that just inherently can be cheaper and better, and therefore have the tailwinds from free market forces.
That said, there are a lot of accelerators from regulatory forces. If you look at the electric transport side, states or countries are banning the sale of fossil fuel-driven vehicles starting in 2030 or 2035. That’s definitely a tailwind, because now people are scrambling, looking ahead, saying, “Wow, we really need to do this or we are not in business anymore.”
We’re helping them solve those problems. Though I would argue they were going to do that anyway because these systems keep getting more affordable. And they perform dramatically better, lower maintenance, better fuel efficiency. So I think it’s definitely a tailwind and we try to navigate it, but it’s not something on which I’d ever want to be dependent.
Daniel Eisenberg: If that’s been a bit of a tailwind, what have been the key drivers of your recent momentum?
Ryan Morris: Well, it took ten years to get the technology to kind of work, to go from patent to actually getting the thing to be a functional, commercial product, which was in 2017. And then, I thought it would take maybe two years to do the initial proof of concept with a product that worked at scale. In reality, it took closer to four years. There’s a lot of third-party validation, since virtually everything that we do inherently is in a very high-reliability system. It’s a high bar. It’s great to save energy and be more efficient, but at the end of the day, it has to work. These are systems that need to last for ten or 20 years.
And so our history is there’s no shortcuts. I kind of like problems that don’t have shortcuts, in a way, because it’s hard for everybody. Once you get through it, then you’re usually in a pretty good position to keep accelerating. Obviously we’re by no means at the finish line yet, we’re really just ramping up. We’re at about a $100 million revenue run rate now, working to scale up a lot faster in a few different markets.
But as we keep growing and breaking down these barriers and become a trusted partner in the market, I’d love to figure out how we can help shorten those cycles so that people can get into a more sustainable operation. Whether it’s in their building or in agriculture, or with electrification in transport. The first time took five years of really intense work. But I think for the next customer, the next design, the next model, we need to accelerate that pace. The good news is, once you’ve done something once, doing it the second time is a lot easier.
Daniel Eisenberg: I would assume that once you’ve really proven that and you’ve convinced folks to start to work with your technology, it can take off exponentially from there.
Ryan Morris: I was just reading about some of the early days of Tesla. They’re sort of famous for starting at the high end of the market and then moving down. The roadster, for example, is a second or third car. If it breaks down, it’s sort of a weekend thing. But if your primary car, like the Model S, breaks down on your way to your job, that’s a different bar. It actually took Tesla four years with the Model S to go from something like 30 or 40 percent failure rate on the drive trains needing replacement to industry standards.
And so these are important curves to recognize, how you navigate what markets to go into first. Theoretically, we could go use our ultra fault-tolerant motors at a nuclear power plant. But you don’t want to start there as a start-up. You want to work your way up.
Daniel Eisenberg: Speaking of electric vehicles, you guys recently had an acquisition in that space, Hyperdrive. And you now have a division called Turntide Transport. What is driving the push into that market?
Ryan Morris: It’s a huge focus, I would say it’s basically half the company. We’re working to leverage a common technology platform around the electric motors and power electronics. In transport today, it’s going to take a bit more time to fully utilize the power of the switched reluctance technology. That’s more of a next generation technology. And the demands in transport are quite a lot higher compared to in a building. We are using switched reluctance technology today in some hybrid applications. A lot of people on our team, including me personally, have a history with electric vehicle powertrains.
The acquisitions were companies that me and a number of others on our team had been a part of four or five years before Turntide. It was really nice to be able to accelerate our plans by getting the people and some of the IP back together to have a way to get into the market much faster. So even though we are relatively new to transport, we’re leveraging the team and some of the IP that’s been at this for decades. And then we’re working to merge that with our next generation motor technology.
For transport, I think it’s really a two-phase thing. Phase one is going from even the most efficient fossil fuel-driven engine today to average or moderately efficient electric drive system, which is roughly a 2X efficiency improvement. Then to go to an optimal electrification solution, you get another maybe 20, 30, 40 percent improvement. So there’s a huge push just to electrify and get into the new paradigm, but once you’re there, there’s all kinds of optimization work that we’re going to do over the next three to five years. That includes getting rid of the rare earth magnets.
That includes integrating the sub systems much better to just be lower cost and better performance. In the transport space, in contrast to buildings, you’re going through an even bigger architectural shift, eliminating the need for fossil fuels, versus bringing the intelligence and IOT into the building systems. It’s really more decarbonization-driven versus automation-driven.
Daniel Eisenberg: I think you’ve spoken about how five to ten years down the line you could envision playing a role in consumer electric vehicles as opposed to just commercial, industrial transportation. Is that something that you see in your long-range planning as a real piece of the business?
Ryan Morris: It would be a mistake to focus on that today, because somebody else is going to solve that problem anyway. I want to be focused on things where we’re going to have the biggest impact and actually be able to move the ball down the field years or maybe decades ahead of where it would happen in the absence of Turntide.
In the case of passenger vehicles—just call it the high-volume segment generally, sedans, trucks, SUVs, that sort of thing—there’s obviously a huge amount of resources from the big OEMs to go electrify that right now. Virtually all of those are dependent on the use of rare earth magnets. I think over the next three to four years from a supply-demand perspective, you’re going to start bumping up against capacity constraints of rare earth mines production. Even in a geopolitically-friendly scenario, that is going to make the prices go up. And if you start having wobbles on that, it’s going to reach a boiling point. So I think our switched reluctance technology will be very helpful to how the scenario is likely to play out in the high-volume electric vehicle space 3–5 years from now. But in the meantime, the focus is really on building up these specialty markets that, frankly, nobody else is serving today.
Daniel Eisenberg: You were talking earlier about wanting to be able to succeed economically without any need for government subsidies. And it does seem that your technology is actually less expensive to own and operate than the conventional alternative. I’m wondering how the commercial case for your motors interacts with the sustainability case. Which value proposition resonates more with customers?
Ryan Morris: I think sustainability gets you in the door. But ultimately companies are economic animals and they’re trying to use their resources wisely. I think that’s why clean tech 1.0 ultimately was a false start, because the idea that people would voluntarily pay twice as much for sustainability was ultimately not something that would really scale.
The way I think about it, I wouldn’t separate them into two separate domains. It’s just that by having the focus on sustainability within a company you start to realize there’s so many new technologies that are actually just good investments. You know, our motors, if you’re upgrading the HVAC system, typically is about a two-year payback. So you’re sort of up there with LED lighting upgrades, and there’s been tens of billions of dollars of those upgrades sold.
It’s really ultimately about total cost of ownership needing to be better. And that includes the energy, and then the maintenance. Having fewer failure modes, from an electric vehicle or from a motor and an HVAC system, is critical. There’s a carbon footprint of having a technician drive out and go fix something.
Daniel Eisenberg: In the building space, how important is your Riptide acquisition, the building automation software company, to the whole value proposition of what you want to offer going forward?
Ryan Morris: We’ve had this vision, this approach to really doing the whole intelligence for the system. And in particular, as I said, we’re focused on markets that are not well served for lots of reasons by the incumbents. If you look at the smaller building space, there is very low, maybe ten percent, penetration of building automation systems. The big established players, like Honeywell or JCI, are really focused on the larger skyscrapers in the world.
One of the problems with buildings is the massive heterogeneity of all the equipment. You got 20 year-old equipment from all kinds of different manufacturers and in different shapes and sizes. That ability to have an open platform is really key.
And so they had some really great technology that helped us interface and connect with whatever was in the building. It’s one thing to get a new car, but nobody’s going to go tear down all the buildings in the world and rebuild them.
Daniel Eisenberg: How open has the real estate sector been to your new technology? How has it been working with them?
Ryan Morris: I am eternally grateful to our early customers. JLL has been a really strategic partner for us. I think they manage five billion square feet of commercial office space, and they genuinely are working to help all their clients on sustainability.
Certainly we’ve had a lot of grace with early adopters that we’ve worked incredibly hard to help satisfy. We’re really at this inflection point now where we’ve got these initial customers, and we have our infrastructure in place to be able to scale globally. We’re in North America and also in the U.K. already.
There’s definitely several layers that you have to stack together. There’s getting the product to be universal. But then you also need the service network. If you run a business, you run a software company, you run a retailer, you want to focus on your core business, how you serve your customers. You don’t want to be having constant discussions with your electricity provider. You just want it to work. And I think that’s the way that a lot of industries are going, more towards these managed services. Or essentially putting more responsibility back onto the manufacturer. We’re trying to own that responsibility early. Because it ultimately helps you improve your outcome.
Daniel Eisenberg: Along the way, have some of your early customers been part of the design process at all? You know we always hear that hardware is hard. So in the more recent years, were you getting input as you were fine tuning?
Ryan Morris: Oh, absolutely. And that’s where some of the people who were in those early adopter camps were instrumental in helping us work out the details, work out the kinks.
We’re in some ultra high-performance sports cars that are now, for the first time, hybrid, in production. So these guys want to push the limits. And that’s awesome. I’m an engineer, and I want to push the limits of what’s physically possible. And so those experiences really help us know what those limits or boundaries are.
Then there’s other cases where you just need a lot of little practical considerations. You go into a dairy barn or into a retail store that’s right next to the ocean with salt spray in the air. These are things that are very hard to simulate in the test lab. By being super focused on feedback and listening to the customer, it just helps us build a much more scalable future.
Daniel Eisenberg: What do you think you’ve learned about what it takes to grow as an entrepreneur in the sustainability space in particular?
Ryan Morris: Well, when I hear sustainability space, I think, “Okay, how do we make things that haven’t changed for a century now sustainable?” So that means you need to have really intense persistence.
And that’s where I really feel lucky that I had that early experience in life with some of the most painful sports, rowing and cycling. Those are the ones where people are working hard and nobody’s watching.
Look, it takes a long time. You have to build that bridge between understanding how things have been done, because there’s a reason why things are the way they are. I have no animosity towards the fossil fuel world. That was a big step up from horse manure. You just have to understand what you’re up against, and have the necessary persistence.
I think we’ve really developed quite a unique culture within Turntide where we are ready to face surprises and big challenges head on. Maybe this is somewhat of an extension of my personality. If there’s some chaos or tension, I’ll sort of become calmer and more level-headed, as opposed to more stressed or neurotic.
When you’ve got really deep technical systems like with electric motors, there’s not a lot of room for error. You just have to be really disciplined.
Daniel Eisenberg: I’m wondering where you see Turntide 20 years from now, and what would constitute success for you?
Ryan Morris: Yeah, I really genuinely think that the current mission that we have is focused around an ambitious but achievable goal. The Paris Accord is all about getting to carbon neutral by 2050. The Amazon Climate Pledge, which we are a part of, is 2040. And I do think when you account for the nonlinear, exponential effects of adopting new technology, that is actually doable.
So I would say by 2040, I’d like to think that we could have a really significant contribution towards making all these motor-driven systems much more efficient, eliminating the need for fossil fuels in virtually every single thing that moves or being on a very clear, near-term pathway to doing so.
That would be a 20-year goal. You know, there’s obviously interim steps along the way. I think five years from now, having switched reluctance be a kind of ubiquitous electric vehicle traction motor, that’s a huge milestone. If we can do that, then you basically know the rare earth problem isn’t going to derail sustainability. And then it’s just a matter of scaling up production and getting into new markets. Between years 2025 and 2040, it’s just chewing away at one fossil fuel thing at a time and leaving all the dinosaur bones in the ground where they belong.
Daniel Eisenberg: Lastly, are there any kind of innovations in your focus area, technical or otherwise, that you think will have a big impact down the road?
Ryan Morris: Well, we’re in the early stages of this digital twin revolution. Today, you see it used in other kinds of very high-value applications. And we’re working on it for the motor.
But I think the key thread of innovation is this shift to the merging of atoms and bits essentially, software-driven hardware that’s truly defined by the software. You’re going to see the ability to crank out new hardware shift to the speed of how quickly we can we can create software.
You know, the CTO of Ansys, the big simulation software company, has been on our board for a couple years. So we have some pretty unique capabilities that we’ve been co-developing with Ansys. And that whole idea of simulation-based design, of turning the hardware into a software-driven product, all that is just going to help massively accelerate the pace that you can come out with new hardware design.
So I think the lessons from the software industry trickling into the world of atoms, and hardware, and high-energy systems, that’s kind of the key thread that’s going to make this possible by 2040 and not, like, by 2100.
Daniel Eisenberg: But hardware will still remain hard to a certain degree, right?
Ryan Morris: Yes definitely, you have to respect it. I mean, 150 kilowatts will definitely knock you on your butt faster than, like, a bug in your software code.
Daniel Eisenberg: Well, that’s our podcast. I want to thank Ryan Morris, chairman and CEO of Turntide Technologies, for joining us. Thanks also to our great McKinsey on Startups production team—Molly Karlan, Polly Noah, Sid Ramtri, Myron Shurgan, and Katie Znameroski.
And finally, thank you, as always, for listening. We hope you’ll return for future episodes.