Opower’s growth: an interview w/ SVP @roderickmorris

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On May 21-22, Opower and Cleantech Group are co-hosting the New Utility Business Model Summit. It’s no question that the utility industry is increasingly shaped by higher customer expectations, expanding deployment of distributed energy generation, and ambitious energy efficiency goals. In the lead up to this summit, we’re interviewing key policy makers, regulators, and influencers on the topic of what the evolving utility industry will look like, and the opportunities that this evolution will create for utilities to develop deeper and more profitable relationships with their customers.

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Congratulations on a successful IPO! What does this mean for the future of Opower and your utility customers?

Friday [April 4th, 2014] was definitely an exciting day: it was great to celebrate it with so many other early Opower employees who have worked so hard together to grow this business over the past several years. With that shared experience, we could all appreciate how this new funding validates the work we’ve been doing, and there’s real excitement knowing that we’ll now have even more opportunity to make investments that help people use less energy. We’ll do this through the four core business lines served by our platform, which are energy efficiency for residential & SMBs, demand response, thermostat management, and customer engagement.

 

Speaking of demand response, Dan Yates (CEO, Opower), discussed in his keynote presentation at our Forum the evolution of Opower’s technology platform. He shared details of five DR events that Opower orchestrated for 1/5th of Baltimore Gas & Electric’s customers in the summer of 2013.

That’s right. Our peak reduction approach with BGE last summer produced great results – we saw an 82% participation rate and the average consumer saved around $9 per peak event – and we have a number of additional demand response projects underway. We’re excited about the approach because we see an incredible opportunity to replace or supplement hardware-based approaches with our software-based approaches. And what’s really cool about the way Opower is addressing demand response is that ours is an approach that utilities can use across their entire customer base, not just homes where people are willing to install devices.

 

Those familiar with Opower’s roots in paper-based bill reports might be surprised to hear in Dan’s keynote presentation that the Opower platform delivered 300,000 messages (including emails, texts, and automated calls) over the course of a 90 minute window in a BGE DR event. Can you share more about the evolution of Opower’s technology?

You’ll continue to see our products get more multi-channel and increasingly scalable. Our customer engagement offering now enables both regulated and deregulated utilities to engage with customers through the web and digital channels. Our new thermostat management capabilities give utilities a cloud-based platform to connect temperature control with smart meter data intelligence. And, overall, we’re continuing to improve the value of the Opower platform by bringing closer together the computer science, behavioral science, and data science upon which it’s all based.

 

Opower has won the North American Company of the Year award and, for the fourth year in a row, was listed on the 2013 Global Cleantech 100. What other highlights (in addition to these and a successful IPO) stand out to you?

This is a good, but funny, question: I don’t pause much to reflect back on awards because we’re so intensely focused on the opportunities that lie ahead. But I would say that one big highlight so far this year was hosting our largest customer conference ever. In February, we brought our utility partners together to interact with external-to-the industry experts, our own product and market development folks, and, most importantly, each other. At this point there are more than 93 utilities working with Opower, and the platform is touching more than 32 million homes and businesses. It all supports an awesome network effect.  Of course another notable highlight has been the opening of our Tokyo office. There is a tremendous opportunity to help people save energy and for utilities in Japan to engage with their customers. Our agreement with TEPCO is a part of that, and we’re proud of it.

 

It seems global expansion is top-of-mind for your team. Opower is co-hosting the New Utility Business Model Summit in Stockholm, Sweden. What is your global presence today, and what shapes the markets you enter?

Absolutely, our ambitions are global. We’re now operating in more than 8 different countries across the Americas, Europe, and Asia. We believe that the more actively we can engage in conversations with utilities, thought leaders, policy makers, and regulators in each of our markets, the better we can understand what kinds of solutions and approaches will be effective in those markets. Our annual customer conference, which I mentioned earlier, is one component of our efforts to have these conversations. The New Utility Business Model Summit in Stockholm is another part of that effort. The content of what’s discussed is always super interesting, and the people in this industry are good people, so these meetings tend to be fun.

 

What are the kinds of policy questions and regulatory issues that people are wrestling with and that Opower is looking to talk through at the New Utility Business Model Summit?

Energy efficiency policy is certainly a hot area right now, both in the US and internationally. At the New Utility Business Model Summit, there will be a lot of discussion about the European Union’s Energy Efficiency Directive, which calls for a 20% reduction in energy use by 2020. The big question there is how utilities can best help achieve that goal in a cost-effective way, and we have some ideas.

Aside from energy savings targets (it’s not just Europe, of course; more than half of the US states now have them), another policy development to watch closely is how energy efficiency is tying into federal efforts to reduce carbon pollution. The EPA is currently scoping ways to cut emissions from existing power plants, and many stakeholders are pushing for efficiency to be included as an affordable strategy to do that. It’s an interesting conversation that’s going to affect the economics of emissions reduction.

 

Recognizing what’s past is prologue, we found it quite interesting to hear you tell your own personal Opower story in an Experience>Tech presentation in late 2013. What are some projects you’re looking forward to now?  

The things that I get really excited about are new insights into people’s behavior, and the ways in which we can help our customers reach their goals by changing behavior on a massive scale. Deena Rosen, our Senior Director of User Experience, is speaking about this topic at TEDxUtrecht later this month. We develop behavioral science insights from hundreds of billions of observations that are gathered off of thousands of months of utility program experience, and we’re applying those insights to improve every interaction that a utility has with its customers. We’re getting to a point now where we’re constantly surprising ourselves with new insights about human behavior and ways in which we can help utilities be more effective through their different communication channels. While paper is an effective channel for communication (after all, it’s where we got our start), digital communications – when done right – can offer a more cost-effective, real time solution. In fact, over the past few years now, digital channels have accounted for the majority of Opower’s communications.

 

And what are some of the goals you and your team have over the coming year or so?

We are focused on three things: growing globally, expanding our current business with existing utility customers, and getting more people involved with our new products. So along those lines, I am travelling to Europe & Asia to build up new teams in those markets throughout 2014, and we’re dedicating more resources and time to figuring out how to make our current customers more successful. Our Opower Five Flex software release was designed with this goal specifically in mind. And when it comes to new products, we see tremendous upside to DR, thermostat management, and SMB energy efficiency.

 

Given your role, Rod, in Talent Acquisition for Opower, please tell us what kind of people you will be looking for as you staff up in Europe & Asia?

Good question. Like any high-performing software company, we’re looking for folks who are the most talented in their respective fields. That’s equally true whether we’re recruiting computer scientists, behavioral scientists, data scientists, or account management folks. There are other elements too that define the kind of person who thrives at Opower. Successful hires at Opower are mission driven, really excited about the opportunity to make an impact on the planet through software and to grow a double-bottom line business. Of course, if they’re going to be a part of a company that is growing fast and operating globally, they have got to be agile so that they can change quickly, and they have got to be nice so that they can work collaboratively. I discussed this briefly in my Experience>Tech presentation last year. As I said then, the best choices come down to choosing to work with the people you want to, and that’s most likely to happen when you’re working on something you care about. I think this next chapter in our growth is going to be inspiring, and a lot of fun.