Woodinville-based hydrogen heating company Modern Hydrogen is walking before it runs.
The company, which makes devices to decarbonize natural gas, has shipped two devices to clients so far, with another slated for this year and another slated for the year after that. Modern Hydrogen co-founder and CEO Tony Pan wants to get the manufacturing right during this phase of its growth.
“I’ve seen many other companies drink the hype cycle. They raise a bunch of money, and they promise the market crazy things, and they don’t iterate,” Pan said. “They say, ‘Give me the ability to build 200 units next year when I’ve only built two this year.’ An issue with that is all that money is invested in your manufacturing line without the iteration cycle to get it right. Oftentimes those companies say, ‘Oh shoot, turns out that was a stupid way to do manufacturing.’”
About Tony
- Age: 38
- Residence: Bothell
- Education: Bachelor’s from Stanford University, doctorate in physics from Harvard University
- Interests outside of work: “Do I have time outside of work? I love nature. … I enjoy hiking. I enjoy scuba diving. I enjoy crabbing. I enjoy fishing. I enjoy seeing wildlife. I enjoy even gardening in my yard.”
- How long have you been diving? “I’ve only been diving for about a decade.”
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Modern Hydrogen’s devices, which look like industrial-sized, rectangular boxes, work on-site and don’t require clients to replace existing pipes. The company is targeting gas utilities, heavy equipment and fleet operators and industrial heat users, among others.
Modern Hydrogen’s two devices to decarbonize natural gas are in Miami and Portland, and the company is planning one in Washington this year. Pan said Modern Hydrogen is targeting a client in a different state next year, but he didn’t specify what state.
In March, the 9-year-old company moved from Bothell, where it had about 17,000 square feet, to its new Woodinville headquarters, where the company has 27,219 square feet. Pan said Modern Hydrogen is subleasing the Bothell space. The company plans to slowly increase its production, for example, jumping up to three units one year, and then six, and then 30 and so on. Pan said Modern Hydrogen wants to be producing hundreds of units a year in five years.
Getting there, however, will require even more space. Pan said the new Woodinville space could handle about 15 to 20 units per year. Doing 100 a year would require something along the lines of a 100,000-square-foot space. If the company gets to that point, Pan said it would be “a Champagne problem.”
Including contractors overseas who are hired through a third party for compliance reasons, Pan said Modern Hydrogen has a team of about 80 employees, including about 65 people in the Seattle area. Because the company makes a physical product, many of its roles need to be based out of the Woodinville headquarters. For roles that don’t require touching the actual product, the company allows remote work to attract a wider talent pool, but Pan says Modern Hydrogen still prefers to hire locally.
As for obstacles in getting more of its boxes in the hands of clients, Pan said the biggest bottleneck is Modern Hydrogen’s ability to mass manufacture its products, as the company has had to turn down orders while it continues to develop its manufacturing processes. He added that the adoption of this green technology depends on companies or states pushing for lower carbon emissions.
“I’m optimistic because I think this is a megatrend that’s not going away, but ultimately our adoption will be set by the decarbonization pace,” Pan said.
Modern Hydrogen in May of 2023 rebranded from its original name, Modern Electron. In March of 2023, the company disclosed a $32.8 million round. It spun out of Bellevue-based research and patent firm Intellectual Ventures, which has also spun out the Bellevue-based nuclear power company TerraPower and the Redmond-based antenna company Kymeta.
Modern Hydrogen’s investors include NextEra Energy, Miura, National Grid Partners, Gates Frontier, Irongrey, Starlight Ventures, Valo Ventures and Metaplanet.
According to the U.S. Energy Information Administration, there are about 3 million miles of pipeline connecting natural gas to consumers in the continental U.S. The U.S. Department of Energy, meanwhile, notes there are only about 1,600 miles of hydrogen pipelines operating in the U.S.
For Pan and Modern Hydrogen, this discrepancy represents an opportunity.
“Pretty much every business in the country already has natural gas, so we could just produce clean hydrogen directly on site from the gas pipeline, literally. We don’t need society to invest another $1 trillion and another century of time into a new grid for hydrogen,” Pan said.
Tony Pan's advice on how to grow a company
Listen way more to the customer “I think we’re good at this now, but we weren’t good at this years ago. … We were technologists. We would listen to the customer, read the report and think, ‘Ok, this is what we need to build.’ I would so totally go even crazier on that ratio of the amount of time we spent listening to the customer and understanding their true pain points.”
