Last week I had the opportunity to participate in the Energy Excelerator‘s 2014 Seed Week program. Representatives from nine energy-related startups attended an 8 day immersive experience at the Energy Excelerator offices in downtown Honolulu. This week kicked off a year-long process of mentorship to help the startups become viable businesses that create a more positive energy future in Hawaii and across the world. Along with Justin Carland, I attended as a co-founder of Open Power Quality, a commercial offshoot of an open source research project that began in my laboratory a year ago.
Frankly, as a professor who is accustomed to doling out knowledge in semester length servings, I had my doubts about how much the program could deliver in the time frame of a week. The results so exceeded my expectations that I’ve decided to summarize my take-aways to help others decide whether or not this program would be useful to them.
Take-away #1: You can learn a lot in a week. Seed Week transformed our understanding of what our company could be, what products it could develop, and our company priorities over the next few months. Conversations with other Seed Week participants generated a new product idea, two new markets, and a different approach to our revenue stream. People from other companies related similar encounters with synergistic thinking. The impact was made obvious by the requirement that we present six minute pitches about our company on both the first and last days of the week. I thought the pitches on Day One were excellent (apart from ours). The pitches on Day Eight were uniformly better (including ours).
Why did it work so well in such a short period of time? For me, it helps to relate it to software development. Imagine you’re working on the design of a really complicated software system (say, a new kind of mobile operating system.) You’ve worked on it for quite a while, maybe discussed it with one or two other people, but so far it’s basically been all you. How do you sanity check your design? Well, you could read a book on operating systems and that might help a little. You could enroll in a MOOC on OS development and that might also help a little. You could just plow ahead for the next year or two, implement your design, and then find out if it flies or crashes. But a more efficient and effective experience might be to spend a week around 30 other people, all of whom are also designing OS-level software, and participate with them in various exercises intended to expose and address weaknesses in OS design. And along with the exercises, provide appropriate amounts of unstructured time to let everyone interact and brainstorm in an informal way. It makes perfect sense that such an environment could yield massive progress on your design in an extremely short period of time.
This is what the Energy Excelerator created: an efficient and effective way for us to make progress on the “design” of our companies. Since we are all in the energy space, and since we are all at seed stage, the similarities in knowledge, goals, and challenges made it much easier for us to communicate and cooperate.
Take-away #2: Making it work as well as it did required skill and planning. It’s not as simple as throwing 30 energy entrepreneurs in a room for a week and letting the magic happen. One of the participants said that they made more progress this week than they made during nine months of participation in another incubator program. Looking back on the week, I see a few things that contributed to the success of the experience:
- The cohort companies were chosen carefully. While we all shared a certain amount of similarity, none of us were competing for the same customers. We could freely brainstorm with each other without fear that helping another company be successful could in any way interact negatively with our own company’s success.
- The organized sessions were actually interesting and useful. Yes, I admit, I rolled my eyes when I saw there would be a session about “branding”. Which is why I am now embarrassed to admit that this session turned out to be a highlight of my week. Props to Rachel Barge for helping us to get away from the “what” for a moment and focus on the “why”.
- The unorganized sessions were just as important. Part of the goal of the experience was to forge relationships that would last longer than a week; that we would become a true cohort that would communicate and help each other in the months to come. Creating a community out of strangers in eight days is a challenging task. It turns out that whale watching, karaoke, playing Battle Decks, and group texting were more than fun and games; they helped us to want to help each other.
Take-away #3: Hawaii is a feature, not a bug, when it comes to energy innovation. As a long time participant in Hawaii’s software scene, I am used to hearing unconvincing arguments about Hawaii as the new high tech paradise. When it comes to next generation energy research and innovation, however, I believe strongly that Hawaii has not one but several compelling advantages: (1) the high price of energy makes it cost-effective to explore alternatives here; (2) the high ROI for solar means we must confront and solve the problem of distributed intermittent generation; (3) the small scale nature of our grid makes it easier to understand and analyze; (4) our small community makes it easier to access decision-makers. I wrote more about this here. The Energy Excelerator focuses on a sweet spot for high tech and Hawaii, and this sweet spot means local energy startups have a greater chance to succeed, and mainland energy startups have a reason to work here as well.
Take-away #4: There are natural synergies between the Energy Excelerator and the University of Hawaii. Over the past five years, I have seen a significant increase in teaching and research on sustainability in general and energy in particular at the University of Hawaii. Of course, the Hawaii Natural Energy Institute has been doing research and development in energy for decades, but there are also more recent efforts such as Renewable Energy and Island Sustainability group.
The Energy Excelerator provides an important new pathway into the commercial sector for ideas and inventions from faculty and students at UH. One of my goals over the next year is to meet with UH researchers to help them understand the opportunities provided by the Energy Excelerator program and encourage them to apply.
Take-away #5: How to start up a company the modern way. Starting up a high tech company is not easy, but it’s certainly easier than it has ever been. When I co-founded a startup in 2000, the bootstrapping process was much more time consuming and expensive: buying servers and workstations, creating a local area network, running Cat 5 cable, worrying about bandwidth, backups, and so forth. For Open Power Quality, Google Apps for Business, Basecamp, WordPress, GitHub, and NameCheap give you quite a bit of technical infrastructure for literally a few dollars a day.
The business design side has evolved even further in the past 14 years. The classical business plan has been replaced by the business model canvas and strategyzer.com provides a SaaS implementation that facilitates rapid prototyping. The Startup Owners Manual, Business Model Generation, and The Founder’s Dilemmas all provide useful insight into the process of designing your new business (hint: It’s the customer, stupid.) But if I were marooned on a desert island (or even just Oahu) and could only put one book on my iPad about this topic, it would be Disciplined Entrepreneurship: 24 Steps to a Successful Startup. This book provides a concise and well organized approach to high tech startup company design. After reading it, I am simultaneously daunted by the challenges that face our fledgling company, and cognizant of the problems we need to solve in order to implement a viable business.