MSIV Invests in Santa Rosa’s Operant Networks
Q&A with CEO Keith Rose & Founder/CTO Randy King
Thursday, December 1, 2022 from Santa Rosa, CA
In 2021, Marin Sonoma Impact Ventures launched the North Bay’s first regional venture capital fund and began deploying capital into Marin + Sonoma’s most promising startup companies.
Today, we are excited to publicly announce our investment in Santa Rosa’s Operant Networks, a software company that is simplifying networking and cybersecurity for our country’s renewable energy future.
Operant Networks powers machine-to-machine communications using a novel networking technology that provides intelligence and security on data packets. Founded in 2016, Operant has spent years developing their solutions with funding from the U.S. Department of Energy and U.S. Air Force. Their integrated networking and cybersecurity software reduces both complexity and cost for energy industry customers modernizing their operational technology (OT).
We were thrilled to see Operant emerge from stealth in late September at RE+, the largest trade show for the clean energy industry, where they announced their seed-stage financing round in which MSIV participated.
Why We Invested
The need for critical infrastructure and operating technology to communicate in a secure manner is growing, with cyber incidents increasing alongside the proliferation of an updated energy grid. As a country and planet, we will not be able to usher in a renewable energy future if our energy infrastructure is unable to communicate securely and reliably.
Existing solutions to this challenge are overly-complex and cost-prohibitive for most renewable energy projects, and this is what is so exciting about Operant’s approach and technology. Their technology embeds security at the data packet level rather than at the application layer, allowing installations such as industrial-scale solar arrays and nuclear power plants to communicate in a way that is simultaneously streamlined, modern, and secure.
The Inflation Reduction Act is pumping large amounts of dollars into new energy projects, and Operant’s technology is poised to become the de facto networking solution for an energy industry needing reliable, secure, and affordable communications technology.
Members of the Operant Networks team at the RE+ conference in Anaheim, CA in September, 2022
Founder & CTO Randy King
MSIV Founder & Managing Partner Zachary Kushel sat down with Operant Networks CEO Keith Rose & Founder/CTO Randy King to discuss the company’s origins and all that is ahead as Operant works to build the next great North Bay company.
ZK: Randy, what inspired you to found Operant Networks?
RK: Keith and I previously collaborated at Solmetric, a Sebastopol-based startup, and we were acquired by Vivint Solar, which at the time was the second largest residential solar installer in the U.S. In joining Vivint, I came to work on this large technical problem, which was that we had hundreds of thousands of home sites that we were trying to keep connected to the Internet, and we were spending millions of dollars a year trying to solve the problem, and there really was no good solution to it.
I left Vivint so I could focus on finding a solution outside the confines of a large organization. I’ve spent the bulk of my career pulling ideas out of research labs and academic institutions and commercializing solutions that ultimately went into products for Hewlett Packard, Agilent Technologies, and Keysight Technologies, where I worked for many years, all here in Sonoma county. So I used this same approach and eventually found a professor at UCLA who was researching this exact problem, and it took a few years but this investigation ultimately led to the solution that became the core product of Operant Networks.
CEO Keith Rose
ZK: Keith, what problem is Operant solving for today’s energy industry?
KR: Historically, the solution of choice for reliable, secure communications for traditional energy producers was to build proprietary fiber networks where the power plant owner was the only entity on that network - the network was closed and not connected with the outside world. Now that everything is becoming connected via the cloud, and communication is expected to be bidirectional whilst including multiple stakeholders, it’s no longer possible for energy producers to continue with this historic approach.
Operant’s technology enables modern renewable energy projects to adapt legacy infrastructure for these new use cases in a way that makes everyone happy - increased levels of connectivity and communication can be achieved without the IT and cybersecurity teams sacrificing security or reliability, and all at a price point that is much more palatable to finance leaders.
ZK: Randy, you mentioned your roots in the North Bay technology community date back a long way - how have you seen the local entrepreneurial community evolve over the past 30 years?
RK: Coming out of grad school, I had the great idea that I would join Hewlett Packard for a couple of years to learn how good companies were managed, so I joined HP here in Santa Rosa - and 20 years went by before I felt like I learned something! I finally took the startup plunge over a decade ago, alongside Keith and some other extremely talented engineering folks, when joining Solmetric and it was great because we were able to take so many of the skills and experiences from the HP culture and combine them with many of the fun things you can only do with a startup.
Frankly, I never felt like there was the right level of support for startups in Sonoma county, because startups are hard and we didn’t really have access to that many local people who were really willing to live the startup lifestyle. It’s one of the reasons I’m so excited that MSIV and its growing community exists now - that there is a local organization spinning up a startup movement here in the North Bay is a game changer. Telecom Valley certainly helped a bit with that, and brought many talented people to the area, but now I feel there is a real opportunity to build a Sonoma company with an incredibly high level of engineering expertise locally, and that certainly was not true when I started out here.
ZK: Building on that, our community has just marked the five year anniversary of the devastating 2017 fires. Can you share more about what role building Operant has played for you personally during this challenging period?
RK: When the fire came through in 2017, we were one of the families who lost their home. Our kids had just left for college and grad school, so really we were free to move and go somewhere else, and we seriously considered it. We lived in Petaluma for three years and waited for our house to be rebuilt, and ultimately we decided to stay, to recommit to Sonoma county. We’re now back in our home and so happy living here - Sonoma county sort of has a way in keeping you here.
In building Operant, our team is so heavily involved in the renewable energy industry and I’m so proud of the role we are playing in the electrify everything movement that’s happening in the U.S. Our new house is fully electric, and this is one of the reasons I wanted to stay here and help build Operant in Sonoma county, because our community is so friendly to our company’s story. When I tell friends and neighbors what we are building, there is so much support from community members, and that inspires us to continue building a lasting company here in Sonoma county.
ZK: That’s such a powerful story, and I’m so glad that Operant was born in the midst of all of the tumult of these past few years. Keith, paint the dream scenario for me here - what would you like to see Operant become 7-10 years from now?
KR: Our technology was mentioned last year in a report published by the Department of Energy called the Solar Futures Study in the category of potentially game-changing cybersecurity technologies that could enable the electric grid’s transition to renewables, while at the same time protecting national security. Given our backgrounds, personal passions, and networks, we are starting with the renewable energy market for this technology to make a real-world impact. At the same time, we realize that there are lots of other industries facing very similar challenges that are equally important to society.
As we advance Operant’s footprint, I see us moving across market verticals and collaborating with larger partners and integrators - the GEs, Siemens, and Honeywells of the world, for example - where we can serve as a middle layer to connect industrial machines in the real world with analytics-type platforms that live in the cloud. I’d like our future to be one where we are fully integrated and have become the standard for how machines communicate in a secure and reliable way.
Zachary Kushel is Founder & Managing Partner of Marin Sonoma Impact Ventures.
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