Design in entrepreneurship: essential or a luxury? A report from A Better World By Design.

This blog was originally written for MIT Entrepreneurship Review

What is the role of design in improving the world we live in? This was the central question at the annual “A Better World by Design” (ABWxD) conference, hosted by Brown University and the Rhode Island School of Design (RISD) last weekend. While some may associate design with beautiful buildings or intuitive software interfaces, conversations at ABWxD extended far beyond this realm. The key take-away from two days in Providence, RI: design plays a fundamental role in the success of any project, extending its influence from technology development to product sales.

In technology development, design is too often an after-thought. Noel Wilson shared the process of redesigning a rollable water vessel for developing countries. Previously, a product had been developed to eliminate the need for people to carry heavy water containers on top of their heads. As Wilson and his team were testing a prior version of the product in the field, Wilson observed that people had difficulties using the sealing mechanism. By involving the end-users, and setting up a prototype facility in a local village, Wilson was able to rapidly iterate through design features, and find those design elements that were most appreciated by users.

It is specifically the interface between user and technology that requires careful design. In a personal conversation, Steve Daniels – who founded ABWxD in 2008 – shared his experience working with IBM Research, by most standards an advanced technology company. For IBM’s Smarter Cities initiative, engineers have been avidly developing technologies that can communicate energy and water consumption to residents. Despite excellent engineering functionality, the researchers realized that analytics alone aren’t enough to change consumer behavior. To create such behavioral change, beautification is not enough: design must be grounded in cognitive psychology and sociology to influence behavior.

Image

Besides technology and product-interface development, the importance of design extends into marketing and communication. A well-visited workshop on Saturday focused entirely on persuasive communication. To make a message stick, good design is essential. Design does not only relate to the form and quality of the communication (e.g. a YouTube video), but also on the source of communication.

Giles Holt, architecture student at RISD University, is one of the co-founders of Consignd. In place of brick-and-mortar stores, Consignd allows users to buy from an influential expert, changing the way we find the products we love. Fundamental to the stickiness of the system is the design, and judging by their website, these guys have a lot up their sleeves. Beyond their product, Consignd has brought a design approach to their business development by applying the same sequence of steps employed by Noel Wilson throughout as they go to market.

If design is fundamental to development and diffusion of innovative products and services, how can it be further integrated into university education? A good example is the annual course Product Design and Development. Taught by MIT professor Steven Eppinger in collaboration with RISD professors, this project-based course stimulates small teams of students to develop a physical product. Beth Soucy, an industrial design student and part of this year’s ABWxD organizing team, was positive about her experience taking the class, collaborating with MIT engineers and business students to develop a tangible product.

Beyond MIT, startup accelerators are picking up on the importance of design too. GreenStart, a San Francisco based accelerator, focuses on giving renewable energy companies a redesign of business, branding and communication.

Having highlighted the importance of design in many different stages of a company’s value chain, it must be noted that design is not a cure-all medicine. Beyond excellent design, transformational companies require an element of technological or business model innovation. In the energy space, this is highlighted by the “energy dashboard delusion”: the idea that visualization of energy consumption would automatically engage home owners to hugely reduce their utility bills.

How do you integrate design into your work? Is design a core element of your business, or do you see it as an extra? Please share your thoughts in the comments section below!

 

Advertisements

[MIT Entrepreneurship Review] Building Energy Audits: In The Field Or Virtual?

Original article appeared on MIT Entrepreneurship review [http://miter.mit.edu/article/building-energy-audits-field-or-virtual]

Cleantech investors have high hopes for the nexus of software and energy—sometimes dubbed “cleanweb,” a term coined by Sunil Paul of Spring Ventures—after disappointing returns on many cleantech investments. Although companies in renewable energy generation and storage are critical for our energy industry to change, innovative software combined with smart business models can have significant impact on our energy consumption. Companies like Zipcar, EnerNOC and OPower reach percentage points of energy savings, without ever constructing a new type of energy generation system.

Given the power of software, where can one most effectively reduce energy consumption? As buildings account for 40% of total U.S. energy consumption, the built environment is a good place to start. But not only for environmental reasons. Energy efficiency is a vast economic opportunity for property owners and service providers, worth $1.2 trillion in this decade, as stated by McKinsey’s 2009 report on energy efficiency.

This huge economic opportunity can be tapped only by first analyzing where energy is used inefficiently—a role that has been traditionally fulfilled by energy auditors, who walk through buildings looking for energy saving opportunities. Armed with only pen and paper, the industry is ready for technological innovation. Two types of companies are trying to bring disruption: companies that build software to help auditors input and process building data and companies that eliminate the auditor altogether by producing virtual assessment software.

kWhOURS, a Boston-based company, falls within the first category. kWhOURS builds an iPad application for energy auditors, to enhance the experience of data collection in the field and to store all collected data in the cloud. From there, energy engineers—the people calculating potential energy savings—can access the data directly. The data is used as an input for energy modeling tools, with the goal to calculate the effects of energy conservation measures—so-called ECMs. kWhOURS finds its customers in the countries’ biggest 50 energy service companies (ESCOs) who make up 23% of the total retrofit market.

A slightly different approach is taken by EcoInsight. Like kWhOURS, EcoInsight produces software tools for energy auditors. The key difference between the products is that EcoInsight eliminates the need for engineers to manually compute and model the energy consumption of a building. The obvious advantage is that this saves engineering work, but can be to a disadvantage as many engineers prefer or even demand to use their own modeling tools. Unlike kWhOURS, EcoInsight’s tool is free.

Virtual energy audits take a different approach. Companies like FirstFuel and Retroficiencyoperate on the premise that through smart analysis of energy data, most opportunities for energy savings can be found without ever physically touching a building. Based on 15 minute interval energy data, weather data and geographical information, virtual energy audits estimate the opportunities for energy savings. Virtual audits have an obvious benefit: no longer do auditors need to roam around buildings for days on end, only to suggest energy conservation measures that could have been found through automated analysis.

FirstFuel is a key player. Founded by Swapnil Shah, a veteran-IT-entrepreneur, FirstFuel recently raised $10 million from Rockport Capital, Nth Power and Battery Ventures. Through its algorithms, FirstFuel is able to analyze opportunities for energy savings, and recommend both operational and retrofit opportunities. This is important, as no-cost operational measures, such as automatically switching off lights when employees go home, are often missed by traditional retrofitters.

Retroficiency holds a firm two-legged stand. Not only does the company offer a “Virtual Energy Assessment,” Retroficiency also offers “Automated Energy Audit,” a software tool for in-the-field auditors. Thereby, Retroficiency holds the potential both to scan large portfolios of buildings as well as deliver in-depth analyses.

Who will win the battle? Today, onsite energy audits exist side-by-side virtual assessments as both products have different value propositions. Virtual audits can not yet deliver the same level of granularity—and hence potential energy savings—as an in-field auditors offer. In order for an ESCO to identify all energy savings opportunities, energy auditors must be deployed. And the most effective way to do so is by arming them with software tools.

However, many real estate owners want a rapid and cheap way of scanning large building portfolios for energy saving potential. With rapidly improving data analysis tools and more data becoming publicly available (through programs like Green Button, virtual assessments are becoming a very interesting product to deliver.

The future is exciting. Whether improved data analysis tools and mapping energy consumption of each device through wireless sensors will eliminate the need for real auditors is to be seen. It is clear that all companies entering the space are adding very real value, as their products were being paid for before fully finished. After all, a $1.2 trillion pie is big enough to share.