Business visionary John Hatsopoulos is in hot water, and he loves it. As chief executive officer of American DG Energy Inc., he oversees the company’s cogeneration of electricity and heat.

Business visionary John Hatsopoulos is in hot water, and he loves it.


Hatsopoulos and his brother George are pioneers and leaders in energy production. John says this business is in his family’s DNA.


As chief executive officer of American DG Energy Inc., John oversees the company’s cogeneration of electricity and heat, which it sells to commercial, industrial and institutional facilities. A byproduct of the energy production process is hot water, which hotels, hospitals and schools must have to operate.


 “We had three members of our family who were professors at the Greek Polytechnic, all of them in thermodynamics.


“George came to the United States on a Ph.D. scholarship to study at MIT in the late 1940s. In 1953, I graduated from Athens College and I had in mind a career as a soccer player. I was a goalie. Being a soccer player at that time in Greece was like being a football player in America today. What do young men want? Girls. And girls like soccer players.”


His parents thought otherwise, though. His father, who was the chief executive officer of the private Greek subway system, wanted his second son do something practical.


“I had no interest in coming to the United States. One fine day in 1953, I graduated from Athens College. My brother was in the process of getting his doctorate at MIT, again in the family field of thermodynamics. Our family was dreaming of us going back to Polytechnic, taking over one of the positions that our uncles held. I had no interest in doing that. My mom announced to me that in August of that year that I was coming to the United States to go to college.”


It hit John hard.


“I sat on the edge of my bed for over two hours and cried. Greeks cry. We are not Anglo-Saxons where we hold everything in. But it never crossed my mind to say no to my mother. No matter how horrible it is, when your mother says to do it, you do it,” he said.


Engineering studies


John enrolled in courses at Northeastern University, a private research university in Boston, and soon discovered that he liked history better than engineering.


“I was hopeless. I could not understand many of the topics. I would do all my homework within two hours and then turn my attention to descriptive geometry and would spend the entire night trying to understand it. My brother would say to me, ‘Hey stupid,’ –– we are very close –– ‘Can’t you see it?’ I said no. So, I changed my major from engineering to history with a minor in mathematics.”


John, 76, a resident of Lincoln, Mass., is a lively man with bright eyes and an Olympic sense of irony. He is a born raconteur whose stories end with an unexpected twist. He is a legend in entrepreneurship and finance, and he has taken 24 companies public by himself –– without the help of a broker-dealer. He says his energy and incentive come from his family.


Family history in Greece


“Our family started a village on top of a mountain. So the story goes, but I cannot verify it, because it happened in 1453, when the Turks took over Constantinople. My family started the village, which now is the skiing center of Greece. When I was a kid, my dad used to make me go there and I hated it. In the summer, I wanted to be with my friends. I didn't want to be on the top of a Greek mountain.”


In 1956, his brother had finished his Ph.D. at MIT. George had invented a device called a thermionic energy converter, which was described in his doctoral dissertation. George decided that he and his brother should form a company and sell the device. They called the new company the Thermo Electron Corporation.


At that time, George lived modestly on his small salary as an assistant professor at MIT, but John needed subsistence money. They couldn't get any money from their parents because Greece had imposed currency controls, which would not allow sending money outside the country.


“We borrowed $50,000 from a Greek ship owner to start the company. He was a family friend. His son was, at that time, at the Harvard Business School. The ship owner was a very tough guy who earned more money than God. He said, ‘OK, I will loan you the $50,000 to teach my stupid son that is not a way to start a company.’


“Well, not one of us learned anything from that because right now, Thermo Electron is worth about $25 billion.”


John says he and his brother have benefited from a series of lucky events, twists and turns in the economy and in finance.


“When we started Thermo Electron, energy efficiency was a joke. Nobody cared. It was believed that there was enough oil to last for hundreds of years. Obviously, they were wrong.


“My brother continued to invent energy-efficient products. In the 1970s, Ford Motors gave us $10 million, a colossal amount of money at the time, to give them the rights to use our technology. They also got the right to buy warrants to buy Thermo Electron, and they ended up making a lot of money out of it.


Because there was nobody who had developed an instrument to monitor emissions, George said he could make an instrument in eight weeks. Other bigger companies said it would take two years to produce the device.


The brothers succeeded, and Ford bought it.


“We even used my brother’s living room as a manufacturing facility. He went to the basement. Right now, Thermo Fisher Scientific Inc, which is the core of Thermo Electron, is the largest analytical company in the world.


U.S. energy policy


“We had another instance of an occurrence, which we thought was bad luck but which actually became great luck. My brother advised five U.S. presidents on energy. He wrote President Carter’s energy policy, at the request of President Carter. But Carter almost destroyed Thermo Electron. Our biggest profit center outside the United States was the Soviet Union. One day we woke up and President Carter forbid us to sell to Russia because of the Soviet Union’s invasion of Afghanistan.


“When we lost the Soviet Union, a lot of people started to try to buy our company because of our technology. My brother refused to sell it, but we had to do something to protect ourselves form being raided.


“What protected us in a way was that one of our largest original investors was Laurence Rockefeller, and people did not want to offend the Rockefellers. We had another brilliant member on our board, besides my brother, and that was Edward Teller, the inventor of the hydrogen bomb. So we decided to start a spin out strategy where we would make separate companies, one by one, of all of our ventures. Instead of costing us money, they were adding value to Thermo Electron. Being a public company and having a piece of it controlled by Thermo Electron, the book value of Thermo Electron kept increasing. We invited all of our American shareholders to tell them that we were starting a spin out strategy.


“Lo and behold, all the American institutions sold their stock, every share they owned. The next week, I went to Europe and told the same story. Every share the Americans sold, the Europeans bought. The return to our investors in the next 15 years, from 1982 to 1997, was 32.7 percent a year.”


In fact, it was in the top fifth percentile of American companies in returns to their investors.


Future is in cogeneration company


John and his brother, who is now 85 years old, retired from Thermo Electron in the late 1990s. John is now CEO of the Massachusetts-based American DG Energy Inc., which is an on-site, unregulated utility that provides electricity, heat, hot water and cooling to its commercial customers.


John is also the CEO of TECOGEN Inc., a manufacturer of natural gas-powered, engine-driven, commercial and industrial cooling and cogeneration systems. He predicts a very bright future for this company.


“We have a company with an unbelievable future. It is used by nursing homes, hotels like Doubletree and institutions like Stevens Technology Institute (in New Jersey)… It is an exciting time for us. I’m off to Europe to talk to people there about TECOGEN,” he said. “I like telling our story.”


But before flying overseas, he had to relate one last personal story.


“My first wife died and I have been married for 37 years to my second wife. She retired last year after 40 years as a kindergarten, first- and second-grade teacher here in Lincoln (Mass.). One of her students, a little girl, said to her, ‘Mrs. Hatsopoulos, why did your mother name you Mrs. Hatsopoulos?’” John said as he laughed out loud.


John Hatsopoulos was definitely on a roll and fully ready to wow them in Europe.


Personal data


Education B.S. in history from Northeastern University in Boston, with a minor in mathematics


Family Wife, Patricia; daughter, Nia; son, Alexander John


Hobbies Playing bridge, tennis


Other interests Growing tropical fruit in his two automated greenhouses


Awards Winner of most successful Northeastern University alumnus award; honorary doctorate degrees from Boston College and Northeastern University


 


 


 


 


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