Mike Matson
Birch Geothermal
A new geothermal player. Upgrading the grid with wood veneers. How drones are leveling the military playing field. All that and more in this week’s Prototype. To get it in your inbox, sign up here.
Geothermal energy is hot right now. Energy demand is surging, driven in part by data centers, while power generation lags behind because of delays in gas turbine production and the Trump administration’s push to fight wind power. Geothermal–which uses hot water underground to generate electricity–is a stable source of baseload power that has bipartisan support.
Mike Matson is excited to step into the market. He’s the CEO and cofounder of Birch Geothermal, which launched Friday as a portfolio company of VC firm Montauk Capital.
Matson’s background is in oil and gas systems–he was once a drilling and reservoir engineer at Kinder Morgan. It was during his time there that he had what he described to me as a “climate wake-up” call and decided to move into greentech, serving in executive roles at several startups before becoming the geothermal lead at Boston Consulting Group.
Recent advances in geothermal technology from companies such as Fervo, which IPO’d last month and now has a $10 billion market cap, have helped cut costs, and it’s estimated to provide about 8% of the world’s power by 2050. As CEO of Birch, Matson sees an opportunity to make extensive use of his oil engineering past to accelerate that decline in cost. Birch plans to make use of sensors and autonomous systems to better control how water moves through geothermal wells, ensuring that heat remains steady for reliable electricity generation. The team is also focused on optimizing reservoir design using techniques originally developed for the oil and gas industry.
Birch’s bet is that better flow control and optimized reservoirs can make geothermal more cost-competitive, which is important because it’s currently much more expensive to produce electricity with geothermal than solar or natural gas. Matson also sees a launch advantage over natural gas turbines, orders for which are backlogged by around five years, because his company won’t just be competing on cost but “on time.”
Matson told me that while most geothermal companies in the U.S. are focused on Nevada and Utah, he believes there are opportunities across the Mountain West. That said, he doesn’t really think competition is a factor in the geothermal market because “the demand is so high that there are not enough companies to meet that to begin with.”
Quick housekeeping note: For the next few weeks, I’m delighted to announce that co-writing this newsletter with me will be our summer intern Sydney Goitia-Doran. Sydney is editor-in-chief of The Hilltop, Howard University’s newspaper, and recently completed a fellowship at the Knight Science Journalism Program at MIT.
Discovery of the Week: Wood Could Build A Stronger Power Grid
If you’ve ever heard a loud boom followed by your power going out, then you have experienced the joy of a transformer failure. These devices are crucial parts of the power grid, reducing the voltage of electricity that has traveled over long distances to make it safe for homes, phones, data centers and electric vehicle chargers. That process generates a lot of heat, requiring insulation that can withstand all that heat over the years and prevent short circuits or fires. Surprisingly, the basic technology here has been unchanged for more than a century: paper soaked in insulating oil. It works, but breaks down over time, which is the main cause of transformer failure.
A recent study published in Science Advances suggests a new technology that might finally improve the longevity of the power grid using a surprising material: wood. Researchers examined wood’s natural structure and found that it could replace the traditional paper soaked in oil with a thin sheet of natural wood that has been chemically softened and compressed. This new design conducts heat better and is much stronger mechanically, which means it’s likely more durable and could last longer. If this technology can scale, it could mean fewer transformer failures, which also means fewer blackouts and a reduced chance of overheating under a heavy load. With the increase in AI data centers and EV charging stations, it couldn’t hurt to have a stronger power grid.
– by Sydney Goitia-Doran
Drones–And Fossil Fuels–Are Leveling The Military Playing Field
Twice this week, dozens of Ukrainian drones swarmed Moscow, setting an oil refinery ablaze. Though Russian air defenses tried to strike a few of them down, they were mostly unsuccessful, with one anti-air missile inadvertently striking the refinery instead. Since Russia first invaded the country, drones have become a key part of Ukraine’s strategy, aiming at undermining the Russian army’s logistics operations. Its drone warfare teams are now advising NATO nations (and regularly beating them in war game simulations).
In the Middle East, Iran has used its mass-produced drones (built for around $50,000 apiece) for one-time strikes against the United States, Israel and other Gulf nations since hostilities began in February, keeping its forces in the fight against much more expensive missiles, jets and other armaments. Iran manufactures them across the country in a decentralized fashion, making it hard to hit the problem at the root.
Small wonder, then, that Reuters reported this week on the growing market for anti-drone technology—from signal jammers to anti-drone weapons, which is expected to triple in size to around $15 billion by the end of the decade.
Drones aren’t Ukraine and Iran’s only underdog defense strategies: They’re also weaponizing their enemies’ dependence on fossil fuels. Ukraine’s strikes on Russian oil facilities have led to fuel shortages across the country. Meanwhile, Iran’s use of drones and other asymmetric tactics to close the Strait of Hormuz have led to shortages of oil and natural gas around the world, driving prices up and putting pressure on the Trump administration to end the conflict, which has driven a series of on-again, off-again ceasefires. (As of this writing, we appear to be in a bit of a quantum state where it’s not clear if the ceasefire signed earlier this week is still on.)
Countries that have embraced renewable technologies, like Spain, have been protected from the energy shocks–at least as far as electricity goes. In Asia, more power is now obtained from solar than from natural gas, and some natural gas-power projects already underway in the region may be abandoned. Across the globe, “[e]nergy value chain exposure across fuels, minerals, and grid connectivity is being assessed with the same rigour as financial risk,” the World Economic Forum wrote in a report this week. In the short term, that might mean a resurgence of coal (a readily available domestic source of energy in most countries), but in the long-term probably means regional cooperation for the development of energy solutions that aren’t dependent on the chokepoints that their adversaries are learning to target.
The Hot Take: Longevity Is Overhyped
Each week, I ask investors for their take on tech trends within their industries. Today the answers come from William McQuillan, a partner at Frontline Ventures for its early-stage fund in Europe. He focuses on “mission-driven founders, particularly those making healthcare more accessible.
William McQuillan
Frontline Ventures
What tech is being overhyped right now?
Longevity. The science is sometimes interesting, but the investments have run far ahead of it. Most companies in the space are selling expensive diagnostics and supplement stacks to wealthy early adopters. They’re providing luxury wellness businesses rather than revolutionary healthcare. The interventions that might genuinely extend healthy lifespan meaningfully are a decade or more from clinical validation, let alone commercialization.
What should more people be talking about today?
Clinical AI voice tools. Ambient scribing tools have already achieved widespread adoption in the US, but the more interesting and underhyped application is clinical AI that proactively calls patients: checking in on chronic disease management, catching post-operative complications early, flagging deterioration before it becomes a crisis. Healthcare systems face an impossible ratio of clinicians to patients, and this technology is already letting a single care team maintain continuous contact with thousands of patients who would otherwise go unmonitored between appointments.
What are we all going to be talking about in five years?
Digital twins in medicine. The ability to build a computational model of a specific patient’s biology, and simulate how they’ll respond to a drug, a surgical intervention, or a disease progression, will fundamentally change how medicine is practised. Pharma is already using early versions to compress trial timelines. As the models mature, the question stops being “what does this drug do?” and starts being “what does this drug do to you?”
On My Radar
Interest Rate Hikes On The Horizon: This week the Federal Reserve held interest rates steady, but due to higher levels of inflation, at least one hike may be on the way later this year. Higher interest rates tend to lead to more conservative investments and fewer risky bets on innovation, especially in areas like biotech where returns might be a decade or more away.
The Inaugural Prototype John Henry Award: Hats off to the human mathematicians who outperformed AI at a series of complicated math problems, proving the spirit of John Henry is still alive. (And in so doing, showing that one way to beat AI is by giving it problems that have never been published on the internet before…)
The Inaugural Prototype Geordi LaForge-Data Award: In the future, breakthroughs probably aren’t going to come from AI alone, but rather AI being used as a complementary tool to help scientists and engineers move faster. Case in point: A team of scientists working with an OpenAI model led to it producing a novel hypothesis in organic chemistry, for which it then set up validating experiments. But despite the AI’s capability, OpenAI noted that “human judgement remained essential” for the successful result.
Space Stuff: SpaceX’s stock momentum after its IPO fell back to Earth after the company announced it was buying AI coding company Cursor. Meanwhile, Dawn Aerospace raised $25 million to support development of its Aurora spaceplane and in-orbit satellite refueling systems, and AST SpaceMobile successfully launched three more satellites into the constellation for its broadband-to-phone network.
Pro Science Tip: Schedule Your News Consumption
If you sometimes feel exhausted by what feels like an endless onslaught of news, you’re not alone. Outside of my echo chamber of student-journalist peers who are obsessed with current events, I know several family members and friends who are overwhelmed with the influx of negative headlines–which, in some cases, causes them to stop reading or watching the news altogether.
There’s a reason for that. Researchers in developmental psychology argue that this aversion to bad news isn’t because we’re lazy or apathetic, but is rooted in our evolutionary past. Our brains are wired to pay more attention to “threats,” but in the present day, that usually doesn’t mean saber-toothed tigers. Instead we’re consuming a multitude of stories about crime, war and political disputes within the hour. This leads to what researchers call Problematic News Consumption (PNC)–an unhealthy habit of checking the news so much that it starts interfering with daily life. (On the internet, we usually call it “doomscrolling.”) Research shows that people with severe PNC reported significantly higher levels of stress and anxiety than others.
The solution isn’t just to completely tune out–that’s not good for either a healthy democracy or my future career prospects. As in many things, the trick is moderation. Instead of allowing your phone to be bombarded with constant notifications, choose specific times to read the major headlines. (Remember the old days of reading the morning paper?) Aim for quality over quantity; test your attention span by choosing well-reported long-form articles [or amazing newsletters – AK] over a surge of social media posts at once. Lastly, remember that being informed doesn’t always mean you have to act. Focusing on actions within your control can help from being overwhelmed by bad news that’s taking place half a world away.
– by Sydney Goitia-Doran
What’s Entertaining Me This Week
Currently big in my music rotation is everyone for ten minutes, the fifth album from the rock band Bleachers, headlined by ubiquitous pop music producer Jack Antoanoff. The group’s music is a fantastic blend of 1980s-style anthemic rock in the vein of Billy Joel or Bruce Springsteen combined with modern production styles and techniques. Also: lots of saxophone, I can’t emphasize that enough. (Long term readers may recall my love for the instrument.) My favorite tracks: “you and forever” and “i’m not joking.”