#Cleanwebcity Interviews: ThinkEco

On November 12-13, Cleantech Group and The Cleanweb Initiative are co-hosting “Cleanweb and the City” the first executive summit on cleanweb. In the lead up to the summit, Cleantech Group is catching up with leaders in NYC cleanweb to learn more about what the rise of cleanweb means for start-ups, corporates, investors, and the overall innovation landscape. Click here to learn more about Cleanweb and the City and request an invite.

Jun Shimada, CEO, ThinkEco

What’s the challenge you’re working to solve?
We’re addressing energy efficiency from the consumer side. Utilities have issues with peak demand because supply is difficult to increase, and we aggregate demand savings.

Looking at the cleanweb landscape, ThinkEco is somewhat unique both because of its relative maturity and because you have a hardware component to the business. How has ThinkEco thrived as other energy products, such as in-home displays, fell away?
Fundamentally, we always believed that the consumer gets engaged through software. People who are trying to create another display will always fail, because consumers don’t want another thing. However, in order for us to provide a service to utilities, we need hardware. Utilities are hardware companies and need to have the ability to shut off loads.

What was really important for us was that we realized this was a slowly emerging market. There wasn’t a consumer demand for energy efficiency products, so we went to utilities and built a custom solution. In 2010, we created a hardware solution that was tailored to address the window A/C market, which was a major pain point for [New York-based utility] ConEd. There was a guaranteed customer at the end of the R&D process. We’re doing that now in Europe and Asia. Because the market isn’t mature enough, we leverage our technology skills to build a tailored solution.

What has it been like working with utilities as a start-up?
It’s both an opportunity and a challenge. Utilities are an incredible distribution channel.  However, the utility would invariably like energy efficiency products to be funded out of the regulated side of business, and that’s a long process – at least a two year process to get a pilot, and three years to move beyond that. It’s important for start-ups to realize this is a marathon, not a sprint. You have to tighten up your capital expenditures, focus on anchor customers, and win the multi-year contract in the third year. If you spread yourself too thin, you’ll use up your money.

A few weeks ago, Adrian Tuck [CEO of Tendril] was at our Global Cleantech 100 event discussing a similar tradeoff of focusing on core customers vs. growing the customer base.
It’s a tough choice to make. When you have big investors, they like to see a big pipeline, but that can be an illusion.

Cleanweb applications often focus on enabling or promoting behavior change. What’s surprised you about how your devices enable behavior change? Do you think that behavior change in one area spills over into another?
I fundamentally don’t believe that saving money is a motivation for people to use your device. People could save money a million different ways. But once a product is distributed, consumers use it in their own way. People can see what their air conditioner is using money-wise or energy-wise. It comes down to understanding the data. We prompt people by sending them emails about both energy savings and how they improve the grid in New York City. We help them understand the wave that they’re part of and applaud them for it. Once that reinforcement process happens, we see them doing the next step by encouraging others to save energy, signing up for programs, and so on.

Many of the utilities we’ve worked with have struggled with how to communicate benefits like reliability.
People don’t understand what gird reliability means, but if you make it a message that’s like: “hey you all helped New York,” that’s good. Everyone loves to be a team player and help out neighbors. That’s the message: it’s something tangible and special that customers were a part of.

What’s been good about being a cleanweb company based in NYC? What’s been challenging?
New York is a great city that has a lot of very savvy business people, but a lot of the funding that comes out of New York is focused on software and digital media – not so much support for hardware. Most of that funding comes out of California, but it’s of a different nature, for example, focusing on thermostats. Thermostats are basically less important for the NYC market.

Do you think companies and investors are looking at cleanweb hardware in a new light, given successes like you and Nest?
Yes, possibly. Hardware in 2008 or 2009 was hugely expensive: EVs, battery storage, and so on. It required hundreds of millions of dollars to take to market. Today’s hardware investments are of an different nature. Companies like us and Nest make small pieces of hardware that we can take to market quickly and test quickly. That mitigates the inventory risk. The pendulum had swung too far in the other direction a few years ago when everyone in energy was only doing software. Utilities ultimately have to deliver electrons, and they’re looking for innovation in hardware.