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What We Value

Today, we're launching a campaign that's been in the works for some time. I'm super proud of it because it speaks precisely to what we, at Molecule, do. We're calling it "What we Value Runs the World."

Here's what we mean by that:

  • Molecule (our software) values, like, everything. It's handles commodities you've never even heard of, like terephthalic acid – and instruments that are hard to grok, like an option on a cal strip of off-peak power monthlies. We've valued power plants and wind farms, and we are evaluating NGL and battery storage models.
  • What our customers trade represents (and sometimes literally is) the infrastructure of the world. It's how we get electricity to our homes. It's how our automobiles run. It's the least-understood, most important set of assets in our civilization.
  • Our customers mean a lot to us – obviously, we use their input to shape our product. But we also value them and their opinions and needs. They, in turn, run the infrastructure that runs the world. More importantly, we value our customers' time. We want them to go home early, so they don't always have to run the world. (I know this sounds trite, but it's what we believe – and from my perspective, not every company in our industry feels the same way.)
  • We're really proud of our employees, contractors, and the values we share. Our people and our software embody those values – and they help the people, who run the infrastructure, that...you get the idea.

So WWVRTW, as we've taken to calling it, is a quadruple entendre! Our new campaign features real people we know – and highlights all the weird and wonderful things Molecule (our software, our team, and our company) values. We hope you love it as much as we do.

Welcome, Richard, Luke, & Syed

Molecule is growing! So far this year, we have added to our dev, customer success, and sales teams. We've done a quick Q&A with our additions to the sales team so you can get to know Richard Reedstrom, Luke 'Hawaiian-shirt' Kremer, and Syed Sohaib better. Stay tuned to meet the other new faces that have joined Molecule.

Richard Reedstrom

1.  Let’s start at the beginning. Where did you grow up? What led you to a career in sales?

I grew up here in Houston. I'm passionate about improving people's lives, and I've found that this bonds incredibly well with sales. Every day I help people end frustrating battles with old systems and methods by providing real solutions. I get to give people back hours of their lives. For me, it comes down to figuring out how we can make our customers' lives better.

2.  Why did you decide to join Molecule?

When I first heard about Molecule, it looked like an interesting company with a ton of potential. I had always wanted to work with a genuinely innovative/disruptive technology, and the more I found out about Molecule, the more I fell in love. The underlying technology, the company values, and the team culture resonated with me one hundred percent. I'm thrilled to be a part of such an awesome group of people doing incredible things.

3.  What is something that you’ve already learned about the industry or company that has surprised you?

Not every solution that claims to be cloud-based actually is a true cloud-based (multi-tenant) solution.

4.  For fun, what are your top three favorite apps?

1 Second Everyday, Tidal, and Audible.

5.  Since you’re in a sales position, let’s ask the obvious: what’s the most compelling reason why someone should want to buy Molecule?

Everything just works. We believe you shouldn’t have to fight with your software. Instead, Molecule works in harmony with you and your process.

Luke Kremer

1. Let’s start at the beginning. Where did you grow up? What led you to a career in sales?

I grew up in Papillion, a suburb of Omaha, Nebraska. I enjoy the relationship building and challenges that a sales person faces.

2. What is something that you’ve already learned about the industry or company that has surprised you?

I've been fascinated by renewable energy credit trading.

3. One of the things Molecule prides itself on is the time savings our software gives customers. More than one person has said that we’ve saved them two hours each day. If you were given two extra hours each day, how would you choose to spend them?

I’d have a tee time set two hours earlier each day; I could probably get a full 18 in before 7 pm.

4. For fun, what are your top three favorite apps?

Snapchat, Yelp, and Instagram.

5. Since you’re in a sales position, let’s ask the obvious: what’s the most compelling reason why someone should want to buy Molecule?

Molecule is future-proof software that looks and performs like it was made in 2019. We provide world-class service, free upgrades, and no extra implementation fees.

Syed Sohaib

1.  Let’s start at the beginning. Where did you grow up? What led you to a career in sales?

I grew up in Karachi, Pakistan. We moved to Stamford, Connecticut when I was in the middle of high school, which kickstarted my American dream. I graduated from the University of Connecticut (UConn) with an International Business Management degree and a focus in Finance. I took a marketing course titled ‘Professional Selling,’ and the final was to pitch a mock product and replace the incumbent provider. After the presentation my professor asked why I was not a marketing/sales major. According to him, I had a natural ability to be successful in a professional sales role. Long story short, I had an opportunity to join the sales team at ThomsonReuters, selling data solutions. I truly enjoyed the experience and challenge of bringing the right solutions to our clients/prospects. Ever since then I have been in sales and business development, and I enjoy every bit of it. Well, perhaps not CRMs!

2.  Why did you decide to join Molecule?

After trying my luck in different industries after ThomsonReuters, I wanted to get back into the financial services technology space. Molecule's solution "wow-ed" and made me excited about bringing it to market. For companies that have a need and utilize old technology for calculating P&L, position, and risk, Molecule is a game changer both from the ease of use and time-saving perspective.

3.  What is something that you’ve already learned about the industry or company that has surprised you?

The deep dive into the power market made me realize how challenging it is to learn, trade, and deal in this space.

4.  One of the things Molecule prides itself on is the time savings our software gives customers. More than one person has said that we’ve saved them two hours each day. If you were given two extra hours each day, how would you choose to spend them?

Spend more time with my family, learn a new language, restore and upgrade a Range Rover Defender 110, and go off the grid for a bit.

5.  For fun, what are your top three favorite apps?

I like puzzles, so Progress & Super Sharp. Proshot for some light photography and Flipboard to stay updated on tech, sports, travel, and autos, etc.

We are not finished either. Personally, I'm always recruiting for the sales team. Word on the wire is that we just hired a new developer in Spain! If you like what you have seen of Molecule so far, hit us up. We are always in the market for the best talent.

What will I Save by using Molecule?

We frequently get questions asking how our pricing model works, especially as compared to other vendors in the ETRM/CTRM industry. In answering the question "What will I Save?", we first need to understand the pricing model for legacy (or on-premise) software.

Legacy Systems

Typically, with on-premise (or even single-tenant cloud) software like an ETRM, pricing has three components:

  • Perpetual License Fee
  • Annual Maintenance
  • Services (i.e., installation)

For a mid-size ETRM/CTRM customer, let's say the license fee is $1m on a 4-year contract. This is the most negotiable part of the contract because 1) it's not where the real money is paid and 2) the underlying variable cost (what it costs to send you the software) is essentially $0.

The annual maintenance fee, however, is where the margin gets real. Annual maintenance is often 20% of the standard pre-negotiation license fee. So, $200k/year in this example. This is less negotiable because this money pays for the development team. We've also heard of this as "the money that pays for new features and bug fixes," which makes our sales team go crazy.

Services – now here's where the major cost lies. On a greenfield ETRM/CTRM implementation, services can start at several hundred thousand dollars. However, implementations typically go into the millions, or even tens of millions (not because they're budgeted that way, but because they quietly end up ballooning in scope and time). The cost is unbounded – and from what we've seen, services is typically 75% of the total cost to the customer of an ETRM/CTRM installation. (CTRMCenter has an article on this, here). This is the case for numerous good and bad reasons. But, from our perspective, the most important reason is that because of a time-and-expense billing schedule, vendors are not incentivized to keep billing for services low.

Molecule

Molecule is different. In general, users pay a single package price, plus applicable sales tax. That's it. The price includes implementation, "paying for new features," the license fee, etc.

We have a minor fee schedule for a handful of things like new users, custom reports, and re-configuration of the application – but most of our customers never pay any additional fees.

Package prices are calculated, on purpose, to be roughly equivalent to the 4-year amortized license fee + maintenance fees of another ETRM/CTRM. This takes into account that license fees are often heavily discounted for smaller customers – but the point is, we're not aiming for the lowest license fees in the industry.

What users just don't pay for with Molecule is implementation. We take on the risk of new implementations knowing that the payoff for our customers (and for us) is enormous. We are aggressive about bounding the total cost and time of the implementation – because we are incentivized to do so. We do things like:

  • Assigning an expert project manager on Day 1
  • Avoiding implementation-related travel, if at all possible
  • Figuring out what "success" means for the customer, and keeping laser-focused on that goal
  • Building tooling for our Customer Success (support & implementation) team, so that they can get their job done more quickly

This is how we create the most value. We believe that implementation costs, in Six Sigma terms, are waste (muda, mura, and/or muri). Our customers don't benefit from paying tons of money for implementation, and neither does our enterprise value.

Summary

Basically, our customers pay industry-standard software fees – but end up saving 75% of the total cost of an ETRM/CTRM because we don't charge for implementation.

Ion + Allegro = Clarity

Last week, Ion Trading announced the acquisition of Allegro. This puts nearly all of the $10m+ revenue, all-in-one CTRM/ETRM solutions under one roof. By my estimate, 60% of the market is now served by Ion products: OpenLink Endur, RightAngle, Triple Point CommodityXL, Aspect DSC, and now Allegro Horizon. Of the largest vendors, only Eka, Brady, and possibly FIS are left.

We're now on our 4th Ion acquisition (or dozenth, or more, if we look outside ETRM) -- and we have the playbook data to guess at the company's direction.

What does this mean for a customer getting into the market? A few things:

  • If you need an all-in-one, on-premise or hosted solution, and you absolutely must check all the boxes on an RFP, buy the solution that Ion prescribes.
  • If you only have one specific, focused need (for example, behind-the-citygate gas scheduling), one of the other 90+ legacy vendors will work.
  • However, if total cost of ownership, modern tech, and an innovative delivery model are more important than a huge feature list, look at the handful of larger new entrants (including us). We can fulfill the important parts of an ETRM/CTRM (like forward/option valuation, connections to exchanges, and VaR) and connect with other systems that specialize where we don’t (such as invoicing, GL, or another ETRM).

We’re thrilled to see all of the large, legacy vendors pulled under one roof. It makes the “us vs. them” story we’ve been telling since 2012 so much clearer. Molecule was founded because we believed ETRMs were way harder than they needed to be - from setup, to retirement, and every way in between. At every implementation we witnessed, customer employees were running around, busy and angry, every day, for months -- or even years.

We designed Molecule not to be that way. From the beginning, our goals have been: 1) easy-to-use, modern technology, 2) unparalleled service, and 3) no implementation fees.

So, over the next few weeks, to celebrate the consolidation of the ETRM/CTRM software products with which we've seen customers struggle, we’re running a new campaign called “Don't Fight.” It celebrates the new vs. the old, legacy software models vs. 21st-century ones, and, most importantly, the way enterprise software should be: frictionless.

Keep your eyes peeled for some "Don't Fight" fun from the Molecule marketing team!

Tackling ISOs and FTRs

From a development roadmap point of view, Molecule's decision to connect with ISOs and value FTRs was a bit of an outlier. We tend to have a solid understanding of what our customers want, and we use this insight to build features with wild-eyed speed and focused precision. ISO connectivity and valuing FTRs came about in a different fashion, however.

As Sameer, our CEO, and I sat in a room (OR at the table with eight execs representing one of the largest European utilities), the conversation unfolded in an unpredictable way. Deal capture and risk is our bread and butter, so we demonstrated how Molecule automates as much as possible. We believed we had nailed everything around what they could possibly need from a risk management platform, and we felt we had won the room. Our free implementation and implementation time frame (typically 90 days or less) was the icing on the cake. It was a great meeting.

Then someone asked about ISOs and FTRs. At the time, we did not have this feature. The challenge was laid out. Could we add that in the 90 day implementation for a deal to happen? As Sameer considered the industry's need for features around congestion, I held my breath. As you can surely guess, the answer came swiftly: yes.

Our in-house Development Team started banging out code before the ink could dry on the deal. Starting with SPP and PJM, we dived deep into valuing FTRs.

During the implementation process, Molecule aimed to provide support for FTRs, Virtuals, & day ahead power. The challenge landed on the lap of our SVP of Engineering, Paul Kaisharis. Speaking with Paul, he was quick to discuss the challenges around delivering our new solution: "understanding the domain terms and normalizing those terms as well as the implementation across the various ISOs." He was equally quick to discuss what he was most proud of: "creating a standard implementation that allows us to add support for a new ISO in just a few days."

Kyle McRoberts, a key member of our Customer Success team, chimed in as well, "I’d say the most challenging and rewarding part of the FTR implementation was simply the volume. Right now we have close to 7,000 paths available in Molecule, each with a peak and off peak product. The other challenge is that we simply don’t know when new paths are needed until the auction results are posted. We’ve got a process in place now to create new paths when needed (for example, over 500 today) mostly without the customer knowing they needed to be created."

Joe, our VP of Customer Success, was another integral piece in the FTR puzzle. He said, "the challenge: the large number of moving parts involved in this implementation and putting them all together working with multiple vendors as well as divisions within the client organization. What we are most proud of: implementing FTRs with a large number of paths with multiple ISOs for a big multinational company in a short period of time."

We are by no means a custom shop. Molecule builds modern deal capture and risk for everyone. Every customer benefits from our two-week release cycle with free updates and support. Paying for 'future code' is absurd to us. We love our customers. And we listen to them. We take their suggestions and look at the industry with the future of commodity trading in mind. Then we build kickass tech.

What's next? Physical scheduling. Stay tuned.