Wärtsilä and Augment

0:11Hello and welcome to The Entrepreneurs on Monocle Radio, the show all about inspiring people, innovative companies and fresh ideas in global business. On this week's programme, we're heading to Finland and to France. First, we'll meet the CEO of a Finnish company working to help move entire industries towards a 100 % renewable future. We have a saying, green is not black or white. So we're going to need a number of different solutions and the solutions will vary depending on where we are in the world and also which applications we are operating. And later, we'll be in Paris to hear from an entrepreneur who's changing the face of business education.

0:50We're past this time where we're teaching outdated frameworks, theories, reading textbooks. I believe now it's all based on case studies, real companies, because things are just moving too fast. This is The Entrepreneurs, with me, Tom Edwards.

1:12you're listening to the entrepreneurs when we think about tackling climate change the focus often lands on personal choices perhaps flying less or recycling more but some of the most significant changes are happening far from the public eye what's that is a Finnish company working behind the scenes to transform the global energy and shipping sectors Monocle's Helsinki correspondent Petri Bertsov brings us this report. The global transition to clean energy is one of the defining challenges of our time. And behind the scenes, a company you may not have heard of, Wärtsilä, is helping move entire industries toward a 100 % renewable future.

1:55We sat down with Wärtsilä's CEO Håkan Agneval to learn how this ambition is becoming reality. Wärtsilä serves two of the most difficult sectors to decarbonize, maritime shipping and energy generation. So how do they actually put their climate goals into action? So Håkan Agnevall, I'm the CEO of Wärtsilä. We provide power for marine and energy. And if we look at marine, what is going on is that the regulatory space is moving, with IMO introducing new regulations to really drive the industry's journey to net zero by or around 2050. And that gives us opportunities to support our customers on that journey.

2:40And you could say some of the major avenues is new type of fuels. So we are ready for the fossil fuels. They will be with us for decades to come. but we are investing there to drive down the emission, the energy consumption, reduce methane slip. Then we are also ready for what many call the carbon neutral fuels. So in that bucket we have all the biofuels but we also have methanol and we are already selling engines for those type of fuels. And finally we have the zero carbon fuels and in that bucket we put ammonia and hydrogen And we have just sold our first ammonia engine, and next year we will launch our first power plant for 100 % hydrogen.

3:24It's not just about cleaner fuels. Wärtsilä is investing in flexible hybrid systems that combine engines and batteries, and they've even launched onboard carbon capture systems, capturing up to 70 % of CO2 emissions from ships. New fuels is certainly one major topic, but it's not only about new fuels. It's also about hybrid solutions or combining combustion engines with batteries, like we all know on the car side. That is now happening also on the marine. Contrary to the car side, on major vessels, you will not see full electric drivelines because basically the batteries take too much space. We will see them suddenly at smaller vessels or ferries, etc.

4:05Bigger vessels, it will be a combination. And the third technical avenue, third avenue on the marine side is carbon capture. So we are just launching, as we speak, our commercial available now carbon capture equipment that you can mount on the vessel to capture the carbon there with a 70 % capture rate. If we go over to the energy side, it's really the transition from coal to gas. Gas is needed. It's natural gas. It's suddenly a transition fuel and then a transition to more and more renewables. Nuclear in some countries, but nuclear is expensive. A big shift over the coming decades to renewables.

4:45Renewables are great, but the sun doesn't always shine, the wind doesn't always blow, and then you need balancing power, and this is where our solutions come in. We provide some of the major technologies for balancing to make sure that the system stays stable, and we have both our thermal balancing, which is our engines, we use them, and battery storage. These are some of the major technical trends. Global shipping moves nearly 90 % of world trade But also produces up to 3 % of global CO2 So what is changing and what still needs to? Basically the marine sector accounts for about 2-3 % of the global CO2 emissions And accounts for 80-90 % of all the transport around the world So one should not forget that moving goods and people with vessels or, you know, with ships and boats.

5:37It is very energy efficient. But it's fully clear that this is a hard-to-bate sector. Why is it hard-to-bate? Because especially the big vessels, they operate remote, clearly, and they operate over long distances, and they need the energy. They need quite a lot of energy to move, so to say. So that's why the marine sector has its particular challenges. Now, if we look at the innovations that is driving, I would say, creating opportunities, it is the new green fuels, but it's also not only the green fuels, because fossil fuels will be here for many years. And there, it's very much about increasing energy efficiency, bringing down emissions.

6:19And there are quite a few steps that have been taken and will be taken. I mean, if you look at methane slip, when you use gas, natural gas, we have reduced the methane sleep with over 90 % during the last year. So there is a real transition journey. Much of Wärtsil's work happens behind the scenes. Infrastructure, rain engines, power systems. How does the company communicate its environmental impact in a world obsessed with consumer brands? So we are a business-to-business company and we are acting into regulated industries. I mean, IMO for the shipping, but on the energy side, Each country has its specific regulations.

7:00So for us as a business-to-business company in the decarbonization transition, the key thing is thought leadership. And you could say our customers, they want to go green in tandem with the regulation. But we have a saying, green is not black or white. There are no single simple solutions. So we're going to need a number of different solutions. And the solutions will vary depending on where we are in the world and also which applications we are operating. So the thought leadership is very much to show and discuss with our key stakeholders, which is, of course, the customers that buys our equipment and services like ship operators or power companies.

7:49But it's not only those. It's also regulators. It's also politicians. So the thought leadership for us is very much about engaging in a credible dialogue with these type of stakeholders on, you know, what technology is available, what are the pros and cons with the different technologies. And, I mean, the overall theme is, of course, we want solutions that are environmentally sustainable, but also economically viable. So this is how we interact with our key stakeholders. I would say in a forward-leaning way in these days, I think these are ecosystems that need to evolve. We often provide our solutions, and they are cutting edge, but we cannot do this alone.

8:37The new fuel needs to be available, new vessels need to be built in shipyards, and the regulation needs to come together. So we recognize that it's not enough just to bring our piece of the puzzle. We need to communicate to the other players in the value chain and also to the regulators and politicians. And that's why we work with thought leadership. While Wärtsilä is helping to make shipping and energy production greener, can Trump and his anti-green agenda derail the company's progress? I mean, the shorthand is no. If you take a step back, I always encourage us to take a step back and zoom out a little bit time-wise.

9:16I mean, if you look over 5, 10 years, if you look over the decades, one can certainly argue that the world is moving too slow when it comes to, I mean, for instance, reaching the Paris Agreement, Target 1.5, I think everybody agrees now, we are way beyond that. So now everybody's talking about the overshoot and how much, etc. But if you look on the marine industry, for instance, in 2023, IMO, which is a UN entity, and it's basically the regulator, the global regulator of the marine industry. So it's quite impactful and influential. They came out in 2023 with the new set of regulation. And we clearly see how that is impacting the strategic thinking of the big operators of vessels, because they are thinking, how am I going to decarbonize the fleets over this transition period to 2050?

10:09And you and I, you know, in our private lives, we think from now to 2050 is a very, very long time. But if you own a vessel, you know, it's in the lifetime of a vessel. So you can just say over the lifetime of your car, you need to decarbonize it. So, you know, 25 years in an industry like a marine is pretty quick, actually. So that was a very important starting point. And there are transitions happening. Now, on top of this, the IMO has regular committees where they evolve the regulation. And they have their MEPC every year, every second year. And they recently had a very, you could say, a milestone in the history of the whole organization.

10:50Because there was a vote. There was a vote for a proposal that will come for a final decision in October this year. but this vote if this now is decided upon it will actually mean that there will be in global shipping there will be introduced a carbon fee if you don't meet certain requirements so you need to reduce your carbon emission if you don't manage to do it you will pay a carbon fee and also if you're on the good side that you have really you know close to zero net zero technology you can actually have a financial benefit. And this is a pretty important step. I mean, I think marine is one of the few industries by now that is now taking a big step forward, actually driving an agenda to decarbonize the whole industry.

11:36Now, of course, US stepped out of this MAPC 83 discussions, but there were other important countries or regions that voted for Europe, China, India, Brazil, etc. I think the chances that this will be taken as a decision in October are pretty high. So that is a major milestone if you look at the big scheme of things. Put simply, the energy transition is bigger than any one politician. Global policy, economics and market forces are all pushing towards renewables. Now, jumping over to energy, we talked about that the big transition is the transition from coal over gases, transition fuel, and then to renewables in some areas, nuclear.

12:21Now, the shift to renewables is based on a foundation of, you could say in many circumstances, it's the cheapest source of energy. It's the most affordable energy we have. And the challenge with nuclear is there, or you can make it work, but it's rather expensive. So, for instance, in the U.S., we still see a lot of investments in renewables driven by the need for affordable energy. As you know, even the new administration have put energy on top of the kind of strategic agenda for national sovereignty and competitiveness. And I can give you one example. Texas, which I think we normally associate with oil and gas, if you look at the energy system, ERCOT, which is the energy system of Texas, 40 % of the installed power generation in the Texas energy system these days are renewables.

13:13Texas is already bigger in California in wind power and are predicted to surpass California in a couple of years on solar power. And what is driving that agenda is affordable power. And then when you, we talked about it, when you increase the share of renewables, you need the balancing power. And this is where we have a role to play to support our customer to make sure that the power system stays stable. Now, the current administration has clearly a negative agenda on offshore wind and and i think that will slow down clearly but onshore wind and solar will still continue you could say that there are certain technologies that haven't reached you could say financial viability on their own feet hydrogen is one of those areas and and and here with the current u.s administration and their you know approach this will clearly slow down but renewables in our view will continue.

14:11And now we're only talking the US. The rest of the world, we also see the investments in renewables continues. And we should not forget, in absolute terms, the biggest investors in renewables is China. But politics do matter, especially when it comes to supply chains, tariffs and global trade. If we start with the direct effects and then let's talk about the indirect effects. So direct effects on marine is rather limited because most of the ships are, a clear majority of the ships are built outside of the US. A lot of the ship owners, they are outside of the US. So limited impact of tariffs. If you look at the energy side and our power plants, yes, we export from Europe to the US and therefore we now have 10 % tariff.

14:55That has certain impact. But many of our customers are going ahead anyway because energy is a very strategic topic on the US agenda in general. And there is a need for expanding energy generation so our customers they are going ahead now where it does have direct impact is an energy storage battery storage business because the the input duties towards asia and several asian countries are rather high and there we see a clear direct impact as we speak now moving to the indirect impact and maybe this is even bigger it is of course the uncertainty that you know the fairly dynamic situation. I mean, because when people don't have certainty and you have a lot of swings back and forth, it's normally the best strategy that people adapt is to wait and see.

15:45And this uncertainty can really slow down the world economy, as we all know. And that could certainly have an impact on us all, including Wärtsal. Despite short term setbacks, Agneval is upbeat about a greener future. I'm optimistic in the sense that, you know, if we take a five to 10 year, you know, outlook, for me, the trend is very, very clear. I think what we struggle with short term and long term is that this transformation, we are looking for solutions that are environmentally sustainable, but also financially viable. And this is not an easy equation. We shouldn't say that. And coming back, green is not black or white.

16:25And there are no single simple solutions. The good thing is that the technologies that we need to do this transition, they are here. It's not that we need to invent some great new technology. We have the technologies that we need. But of course, it's a lot of capital that needs to go into investments. It's regulation that needs to come in place. And one of the big challenges that we need to address is the social dimension of the whole transition. I can give you one example. South Africa. South Africa has a very challenging power situation with a lot of outages. They are depending, you have power generation, a lot of depending on coal these days.

17:06But they have ample resources both for gas and for renewables. But they also have 150 ,000 people working in the coal industry. And, you know, people need jobs. People need social stability. and how do we manage that transition to renewables by maintaining the social stability? I think this is one of our major challenges going forward. From ferries in Norway to power plants in Texas to experiments with ammonia-fueled engines, Wärtsilä's work offers a window into the kinds of behind-the-scenes changes that will ultimately shape our climate future. From Monocle Radio in Helsinki, I'm Petri Burtsov.

17:47Thanks very much to Petri for that report and you can find out more about that business and its journey by heading to vorsila.com. Welcome to the land of wine, cuisine, fashion and the art of joie de vivre. France, the Monocle handbook, is the third installment in our series of hardback guides for the best things to do, see and discover in all corners of l 'Hexagone. Over 220 plus pages, Monocle's latest book showcases the crème de la crème of the country from the Atlantique to the Alps and the windswept Normandy to the sun-kissed Riviera. Plus, top tables in Paris, Nantes not to miss hotels, and where to splash out in Marseille, and plenty more to try from Piste to Plage.

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19:21You're listening to The Entrepreneurs. Now, listeners to the show will know that we meet founders who've taken all sorts of paths to building a business, including the well-worn climb up the MBA ladder. But for people wanting to learn how to start a business, many MBAs aren't really designed to teach entrepreneurship. They're built around management, finance and climbing the corporate hierarchy, not necessarily launching something from scratch. Today, learning how to build a company increasingly comes from those who've actually done it, not just studied it. Ariel Ranu is the co-founder and CEO of Augment, a platform offering business education from entrepreneurs who've built real companies.

19:59He caught up with our Georgina Godwin at Monocle's Paris HQ at 16 Roubaix-Mont. Georgina began by asking Ariel about how the idea first took shape. So we started Augment with my co-founder Roy two and a half years ago, we went to business school here in Paris at what is supposed to be the number one business school in France. And we ended up being quite disappointed with the education. And in particular, the fact that we knew we wanted to become entrepreneurs and the content did not fit what we wanted to do in the sense that it prepares you to become a consultant, to work in finance or in big corporate, but not really to start your own company.

20:42So how does your model work? And so after graduation, we were like, okay, let's try to reinvent the MBA experience for entrepreneurs. And this is Augment. We're building a new type of MBA program that's designed to fit into the lives of people who work. So you complete it approximately in six months. It takes between 15 and 30 minutes a day. And basically, you get a real, super practical business lesson from the world's greatest entrepreneurs. That's a brilliant idea. I mean, is there a problem in that MBA is a kind of currency out there? And if you've gone to a really great university, then that's, you know, that's like you can wave that around, is it?

21:24And it's still true, in my opinion, it's still true and it's still quite valuable. The thing is that there are less than 1 % of the population who can access these schools, pay those high fees, take two years off, etc. And so how can you reimagine the business education system for the 99.9 % of the population who cannot access it? I wonder if we could just unpick the evolution of your company, the process of going from business school to building it to the point you are now. How did you get here? So the first thing we did after graduating, so it was in the midst of COVID, so it was a weird period of time.

21:59The first thing we did, and this is quite unconventional, we directly managed to raise a$2 million seed round. We had this very, very big vision. We were going to build the MBA program for the rest of the population, the 99%. And so we've been super lucky to be backed by some of the greatest funds in both Europe and the US. And basically, we raised$2 million. Then I remember exactly where with Rye over summer, we didn't know where to start. We felt completely lost. And we sent a lot of cold emails to a lot of people in Silicon Valley. Of course, we have no network there. One day we woke up, one email from Chris Barton, the founder of Shazam, who agreed to be the first Augment faculty member and to teach a first class on Augment.

22:44He was like, guys, this is interesting. Let's have dinner. And so we flew to San Francisco. We had dinner with him. He agreed to be part of the program. And from there, it all started. Well, and you've got a number of high profile partners. Who are they and what's their role? So our courses are taught by some of the greatest entrepreneurs and executives on the planet. and we're talking about Steve Chen, the founder of YouTube. We've got Jimmy Wells, the founder of Wikipedia. I was just mentioning the founder of Shazam. We've got the founder of Waze, the founder of Lime, the founder of Evan Bright.

23:13And also some top executives. We have the Google chief of staff, Anne. We've got Jeff Bezos, right-hand at Amazon, who were filming last week in Paris with a former Open Eye director. The course is going to come up soon. So basically, the idea is quite simple. Learn business from the best. And so how do people access that? they go on an app exactly so there is an augmented platform you can access on your phone on your ipad and basically similar to an mba program there are two big parts of the augmented experience the first part is content and the other one is community and so in addition to the courses that you can access anytime anywhere on any device we also host live events with top founders authors executives but also in-person meetups so we had one in new york last week for the augment community Next week is in Los Angeles.

24:04The one after is San Diego. The one after is in London. So basically, we're trying to replicate the MBA experience for most people. What is the take up? Are people jumping on this? Are they doing it? And what kind of people are they? So it's quite interesting. The people who take the program, they are actually very successful professionals in their late 30s, 40s, 50s, who have very strong careers, but don't necessarily have a business education. And just this morning, I was chatting with one augment student. He's an airplane pilot. So very smart guy, obviously very technical, but no business education whatsoever.

24:40We have a lot of doctors, a lot of architects, a lot of dentists, a lot of technical people, designers, software engineers, who basically are excellent at what they do, but lack basically the fundamental business knowledge. And we're talking about finance, accounting, leadership, management, sales, entrepreneurship, innovation. And so basically these people will not take two years off to go back to school. Most of them have families, they have very, very strong positions, but they still need to get some business skills to reach the next step in their career. Fascinating. Really great idea. So what do you think is the future then of business education?

25:16So it's quite interesting. I believe that the top schools are here to stay. We're not going to replace Harvard or Stanford. But what's for sure is that we need to build a business education that fits into the life of people who work and basically the majority of the population. And something even more important, that's practical, especially in a world where things are moving so fast. Basically, we try to update the curriculum every time. This is why we're filming the AI module last week, because the business world is evolving so fast. And so, yeah, I believe the future is to more practicality, closer to reality.

25:54We are past this time where we're teaching outdated frameworks, theories, reading textbooks. I believe now it's all based on case studies, real companies, because things are just moving too fast. What do your lecturers from your MBA think about it? They love it. And this is why they take part in this program. You know, if you teach at Augment, you're probably beyond the money, beyond the fame. And you do what you do because you resonate with the mission, because you want to help people, because you want to transmit your knowledge. And so they, of course, love that. That was Ariel Renu, the co-founder of Augment, in conversation with Monocle's Georgina Godwin at our Paris HQ.

26:37And since they spoke, Augment has launched part one of their AI in business course. It's now live on their website. Check it out for yourself at augment.org. More courses will be announced soon.

26:59And that is all for this episode of The Entrepreneurs. We'll be back at the same time next week. The programme was produced by Laura Kramer with audio editing by Jack Dewars. Head to monocle.com to listen again, delve the archive and find out more about the show. And if you want to get in touch with us, do email Laura on lrk at monocle.com. I'm Tom Edwards. Goodbye. And thanks for listening to The Entrepreneurs.