Building Organizations for Exponential Growth with OpenExO Founder Salim Ismail

In this episode of the Siemens Energy Podcast we chat with Salim Ismail, founder of OpenExO and ExO Works. Salim speaks about the challenges that large organizations face when dealing with innovation (and shares some strategies to deal with those challenges). Salim’s optimistic and solutions-oriented mindset towards the challenges and problems that many companies are currently facing is inspiring and we know you’ll enjoy hearing his perspectives.


Listen to the full episode now!

One of the ways that the developing world can get better access to electricity for its citizens is in partnership and cooperation with the developed world. One of the ways that those groups have been talking regularly, specifically about energy, is through the United Nations climate change conferences held every year. One that got particular attention was COP (Conference of the Parties) 21 which was held in Paris.

Salim Ismail

One of the ways that the developing world can get better access to electricity for its citizens is in partnership and cooperation with the developed world. One of the ways that those groups have been talking regularly, specifically about energy, is through the United Nations climate change conferences held every year. One that got particular attention was COP (Conference of the Parties) 21 which was held in Paris.


After 9/11, Ismail founded the New York Grant Company (NYGC) to secure financial incentives for many different businesses. He served as Chairman and CEO until 2005. The company continues to the present day and offers consulting on grant and tax incentives, resulting in the distribution of over $1B in financial incentives nationwide.


Ismail’s work in startups got the attention of Yahoo and he was appointed head of Brickhouse, Yahoo’s internal incubator. Brickhouse served as a staging point for teams to work on disruptive ideas. He went on to co-found Angstro, a company that used social networks to find news about clients, colleagues, and friends. This company was acquired by Google in 2010.



In 2008, NASA invited Ismail to the founding conference of Singularity University. Ismail had first worked with NASA during his days at Yahoo. Since then, Singularity University has brought people from more than 85 countries to apply disruptive technologies like AI and neuroscience to more than 100 startups. During this time, Ismail worked closely with Peter Diamandis and Ray Kurzweil to assemble the core team and faculty of the university as well as the curriculum.


Ismail’s experiences would lead to Exponential Organizations, a book he co-authored with Michael S. Malone and Yuri van Geest. In it, he coined the term ExO, an exponential organization that leverages assets like community, big data, algorithms, and other new technologies to achieve performance benchmarks of 10X or higher than its competition. The idea of the ExO has led to his founding of ExO Works, OpenExO, and Rokk3r Fuel ExO, all enterprises that seek to teach and incubate exponential technologies around the world.


One of the ideas that ran throughout the discussion with Ismail was abundance, a theme that has so dominated the mind of his colleague Peter Diamandis, that Diamandis has written a book on the subject called Abundance: The Future is Better Than You Think. The book takes a brief look at major problems the world is facing and shares opportunities in terms of technological solutions for access to clean water, nutritious food, affordable housing, top-tier medical care, and non-polluting ubiquitous energy. 


While that might sound like an impossible wish list to most of us, Diamandis manages to strike a tone of optimism balanced with realism as he examines each problem. Ismail picked up the thread in our conversation, “Technology is delivering abundance.” 


He noted that energy has been moving from scarcity to abundance in the realm of solar power. A silicon photovoltaic cell was first demonstrated to the public in 1954. Solar power has been making great progress in terms of efficiency and has recently become a valid investment alternative to traditional fossil fuel power plants. Ismail noted that Ramez Naam said some years ago that it was cheaper to build a solar power plant than it was to build a traditional fossil fuel plant. But just last year, it became cheaper to build a solar plant than to continue to maintain a fossil fuel plant. With this realignment of capital and operating expenditures as part of long-term planning, stakeholders are looking to solar to be a significant part of their energy portfolio in the years to come.


As the energy industry shifts in thinking from scarcity to abundance, so do other businesses, powered by technology. In his book Zero to One, Peter Thiel identifies a trait of some of these companies: using an “open secret.” 


Airbnb, for example, looked at the homeowners of the world and saw an untapped abundance of accommodation. Uber and Lyft looked at unused passenger seats of vehicles and saw them as unused bandwidth. All three of these companies (and many others) built a business model around abundance. Open secrets are everywhere, but you’ll have to do a bit of research and a lot of hard work.


One open secret Ismail shared is the possibility of hemp stalks delivering some of the same properties as graphene. At $.08 a gram, such an alternative would be a game-changer from the current $100/gram that graphene costs.



While it may be simpler for startups to create disruption, it’s quite challenging for established companies to do so. Ismail used his own example at Yahoo for perspective: it took eight months to launch a feature, in part due to various established departments that looked on innovation essentially as a threat and activated an “immune system response.” This has not been the case at Facebook, where since almost its earliest days, developers have been given the ability to launch new code live on the site. That sort of trust and autonomy has made Facebook one of those 10X faster companies that Ismail and his team at OpenExO study. In fact, OpenExO has given scores to the Fortune 100 based on the companies’ agility, flexibility, and adaptability, among other metrics. The top three companies were Google, Amazon, and Apple.


Ismail noted that all three of these companies have some version of “skunk works” to power their innovation. The term came from the World War II era when the then-Lockheed company was tasked with building a high speed, high altitude fighter to compete with German aircraft. Most of the company was building a model that Lockheed already had in place to fulfill a British contract, but a small group of engineers was assigned to create a prototype of what would become the P-38 Lightning. Clarence “Kelly” Johnson, who would later go on to contribute to the U-2 and SR-71 models, put those engineers into a walled-off section of one building, off-limits to all but those involved directly. Many advanced features were incorporated into the aircraft which the military had not asked for but gave the plane less aerodynamic drag and greater strength with lower mass. At some point the team was moved to the 3G Distillery, a smelly former bourbon factory where the first P-38 was built.


Ismail said that this technique works just as well now, if not even faster, than it did in WWII, because of how much technology can accelerate progress. By placing a small team at the edge of an organization (though you don’t necessarily need to put them into a smelly facility!) and telling them to disrupt another industry, you can leverage the institutional knowledge of an organization without activating its “immune system.” Apple’s recent use of this method can be seen in retail, watches, and payments.


The Four Ds

What Apple did to music also serves as a good example of what Ismail calls the “Four Ds”: Digitize, Disrupt, Demonetize, Democratize:

  • Firstly music was digitized and people thought this was just a change of format, like from record to cassette to CD. 
  • Then Apple created the iTunes store, and the record companies participated in the disruption of the status quo. The studio model also got disrupted because digital music could be heard by many people and artists could build an audience without the help (or financial cut) from a traditional studio.
  • The traditional costs of an album went away, in part because CDs no longer had to be manufactured and distributed, and there was demonetization.
  • The final stage, democratization, can be seen in two industry leaders, Apple Music and Spotify, which have built a low-priced subscription model based on abundance: you can listen to all the music you want for one monthly price.

Gutenberg Moments

While he was not the first person in the world to use movable type, in 1439 Johannes Gutenberg became the first European to do so. In 1455 Gutenberg completed a Bible that sold for the equivalent of three years’ wages for an average clerk whose job it was to prepare handwritten versions of the same text. Those handwritten bibles took a year to complete, whereas Gutenberg’s versions could be completed in days. He would also pioneer:

  • Processes for mass-production of movable type
  • The use of oil-based ink for book printing
  • Adjustable molds
  • Mechanical movable type
  • The use of a wooden printing press

Mark Twain would comment centuries after the printing press transformed our society: "What the world is today, good and bad, it owes to Gutenberg. Everything can be traced to this source, but we are bound to bring him homage… for the bad that his colossal invention has brought about is overshadowed a thousand times by the good with which mankind has been favored."


Ismail pointed out that while “Gutenberg moments” might have happened once in a generation or once a century before, they are now happening much more frequently. He said he can count nearly 20 of those moments (in fields like AI or blockchain, to name just two) that are driving major changes to society and are a contributor to why we see so much stress in our world at the moment.



To create these Gutenberg moments (and deal with them when they arrive), Ismail advocates a corresponding exponential capacity. In a sense, we have to let our minds try to at least keep up with, if not try to forecast, where Moore’s Law is taking us. Moore’s Law isn’t a law in the legal sense or even a theory in the scientific sense: it was simply an observation by Gordon Moore in 1965 that the number of transistors on a microchip doubled every year. He went on to co-found Intel and drive a lot of the innovation that he realized could be possible due to this increase in the computing capacities of a chip.


We asked Ismail about Elon Musk as an example of someone who thinks exponentially. Ismail said that thinkers like Musk identify a technology and ask where it is going to be in ten years, and then try to build a company to intercept that ten-year path. Observing that the younger generation has watched leaders like Elon build businesses that think exponentially, Ismail cited two young founders he’s particularly excited about:

  • Vitalik Buterin, who ignored his professors and at 18 co-founded Ethereum, which is now home to an estimated $450B ecosystem of businesses and growing ideas.

  • Melanie Perkins, who at 19 saw a problem with how high school yearbooks were put together and created a business with her then-boyfriend (now-fiance) called Canva. The company is now worth just under $3B.

Ismail said that thinkers like Musk identify a technology and ask where it is going to be in ten years, and then try to build a company to intercept that ten-year path.

Ismail has also advocated for that thinking in his work on the X-Prize, where he sits on the board. What’s particularly on his mind is the question of energy storage. We’ve discussed some of those solutions before:

  • Pumped hydro - this is a gravity-based concept that moves water from a low to a high reservoir. The water is allowed to descend when electricity is needed. 

  • Stacked blocks - what if you used robotic cranes to stack thousands of blocks into a tower structure, then used the power of gravity to then release that stored energy when needed? That’s the principle behind the stacked blocks storage solution.

  • Liquid air - surplus electricity is used to cool down air so that it can be stored in pressurized above-ground tanks.

  • Underground compressed air - compressed air goes into an underground storage tank and is then released when needed to generate electricity.

  • Flow batteries - this involves circulating liquid electrolytes to charge or discharge electrons via a redox reaction (changing the oxidation state of an atom).

Turtle Eggs

Ismail knows that there are lots of companies at the moment that are looking to solve the energy storage problem via these different solutions. He likens the problem to turtles hatching from eggs:

  “If a turtle lays 200 eggs, maybe only 150 make it down to the beach amidst various predators going for them. Of those 150, only five will end up making it, and how would you know which five it would be at the very beginning?”

Given that only one out of every 1,000 turtles survives to maturity, in the long run, Ismail’s analogy is particularly apt.


Ismail also sees that the startup cost, both financially and mentally, is so much lower than it was 20 years ago. A software startup might have cost $10M then, and might have entirely depended on “who you know.” These days one can cost $10,000 or less and once VCs see an opportunity to scale, funding can be had.


As entrepreneurship has become more popular, the realities of failure have also become more understood and fewer new entrepreneurs expect to “make it” on their first, second, or even third venture. The learning that can be had by participating in building, scaling, and growing businesses cannot be replicated in any other environment, at any price.


On the Horizon

One of those turtle eggs that might make it to maturity is being tested on President Street in Brooklyn, New York. Solar panels on the roofs of houses soak up sun and computers connected to the panels make calculations. They first count how many electrons are being generated, then they write that number to a blockchain, specifically ETH, which we discussed above.


Ismail cited this project, run by a company called Transactive Grid, as an example of how smaller energy companies can take on the latest technologies to harness the power of exponential thinking to leapfrog the incumbents.


The company aims for neighbors to buy and sell renewable energy to each other. Normally you would need to be one of the large energy grid operators or one of the resellers. This gets bypassed by Ethereum. Decentralized technology like the blockchain is not only more resilient because there’s no single point of failure (remember the blackouts that have happened in the US in recent years), but it also transforms society, as it cuts out the energy companies by disintermediation.


Transactive Grid is just one example of many companies using exponential thinking to build abundance-based businesses, and that’s the sort of disruption that we can all be excited about.


For more conversations and ideas around topics like this, visit