From day one of his professional life, Derek Warnick knew his career would be driven by a purpose greater than mere career advancement. As an undergraduate studying finance and international business, he contemplated how his professional life could make a meaningful impact. Upon graduation, he joined the World Bank’s International Finance Corporation, focusing on empowering small businesses in developing countries. “I was excited by the opportunity to help people and have an international focus,” he recalls.
However, Warnick soon realized he wanted to do more to address climate change. “I started to become much more interested in learning about how we could avert the worst effects of climate change,” he says. This passion led him to pursue an MBA at MIT Sloan, concentrating on clean energy finance. “I believe in utilizing a financial focus to further technology and business innovation,” Derek explains. “I don’t think that the role of a CFO or a finance department should be an afterthought.”
Read MoreAfter his MBA, he joined a commodities trading firm but soon took on the role of CFO at a small power development startup. There, he gained hands-on experience in all aspects of finance and operations. “I had to do absolutely every single thing in a finance organization,” he says. “I enjoy walking that tightrope and being an operator.”
His dedication to sustainable energy culminated in co-founding Electric Hydrogen, where he serves as CFO. “At Electric Hydrogen, we are singularly focused on bringing down the cost of industrial-scale decarbonization,” Derek states. He believes that providing cost-effective, scalable solutions is key to making a real impact on climate change. “I can’t imagine doing something where I worked for a company that made widgets,” he reflects. “For me, there has to be that business purpose so that I’m excited about what I do.”
Throughout his career, Derek has consistently chosen roles that align with his commitment to sustainable energy. “I firmly believe that if you have a job you love, you’ll never work a day in your life,” he says.
“To become a CFO, focus on building a strong foundation in finance, accounting, and strategic management. Seek mentorship from your leadership and the CFOs around you to gain insights into their decision-making processes. Embrace challenges and take on diverse roles to expand your skill set. Networking is crucial; connect with professionals in finance across the entire spectrum, including banking, venture capital, and other operating companies. Finally, stay curious and keep learning about industry trends and technologies to stay ahead in your career.” —Derek Warnick, CFO, Electric Hydrogen
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CFOTL: Tell us about your company—what does it do, and what are its offerings today?
Warnick: I’ve been restraining myself throughout this conversation from immediately leading with the wonderful work we’re doing and pitching the business. It’s difficult for me to talk so much about myself and not about the business—I live and breathe this stuff.
At Electric Hydrogen, we are singularly focused on bringing down the cost of industrial-scale decarbonization. We’re reducing the cost of removing emissions from the biggest and dirtiest sectors globally, and we do that by producing the world’s most powerful and efficient hydrogen electrolyzer. These are extremely large machines that take in renewable energy to split water into hydrogen and oxygen. The hydrogen can then be used as a substitute for natural gas in many large industrial processes.
Read MoreOur business is based on making these super-large machines used by heavy industry—industries that most people aren’t even aware of how they operate. This includes the production of base chemicals, fertilizers, and steel—these big factories out in the middle of nowhere that people don’t typically see. Our systems are very large—they’re 100 megawatts in scale and about $80 million per system. They’re complex; it’s a challenging problem.
We’ve built this business from its inception with a focus on the cost of our product to our customer, understanding that everybody in heavy industry is dealing with commodities—either their inputs or outputs are commodities. So cost wins. No matter if we’re providing someone a solution that allows them to, quote-unquote, “do the right thing” and have a greener opportunity, if it’s more expensive, we’re not going to get any scale.
Conversely, these industries often have a ruthless focus on efficiency and profits, which some may view negatively. But if you can do something at a penny a pound cheaper, the world will switch rather quickly. There are no participation trophies in commodities—you either provide the purity and volumes that people want at the price they can afford, or you’re out of business.
So if we can deliver something that provides the same or greater value at the same or lower price, we know that we can be successful. We’ve designed our business from the ground up with this in mind. We’re now over 300 people, and we’ve raised close to $800 million. It’s capital-intensive, but it’s also been fun. I’ve gotten to raise a lot of money here and have certainly enjoyed it.
Electric Hydrogen | Electric Hydrogen | Natick, MA