Category Archives: Entrepreneurship

How Apple’s Watch Could Save Energy

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On September 9, Tim Cook unveiled the Apple Watch, “the most personal product” Apple has ever made, says the company, “because it’s the first one designed to be worn.” The watch joins other products like bracelets from Fitbit and Jawbone in a category called “wearable technologies,” or wearables.

Beyond decorating your wrist, these products are primarily worn to send, receive, and process information, through cellular networks, WiFi, Bluetooth, or—unique to Apple’s Watch—near-field communications (NFC). The Apple Watch can monitor your heart rate, track your location (through an accelerometer, gyroscope, and GPS), and recognize your voice.

THE WEARABLE DIFFERENCE

Smartphones and their apps have already been doing great things for users managing their energy (and much more, including fitness), for example through connected thermostats, electric vehicle charging, solar panel output monitoring, sharing-economy services, and much more. So why would you wear Apple’s Watch when you have an iPhone? What extra value do wearables unlock that already isn’t accessible through other technologies?

First, wearable technologies can collect biological data, such as your heart rate and body temperature—that a phone in your pocket cannot. These data sources can tell a more complete story about your physical state than data from your phone. Second, wearable technologies are less likely to be separated from the user. Unlike phones, most users will wear their Apple Watch in the shower or in bed. In other words, it’s always with you.

This connectedness between wearable tech and the wearer opens up at least three categories of energy management opportunities: at home, at the office, and personal.

ENERGY USE IN YOUR HOME

Wearable tech can help better match our homes’ energy use—especially heating and cooling—to our needs. For example, Nest’s Learning Thermostat has a built-in motion sensor. It’ll put your home’s HVAC system into an energy-saving “away” mode after a period of inactivity. But imagine how much energy could be saved if a device on your wrist signals your thermostat to go into “away” mode the moment you leave your home or neighborhood.

Similarly, programmable thermostats can be set to pre-condition your house so that it’s a comfortable temperature when you wake up and roll out of bed in the morning. Some smart thermostats even detect when you typically wake up during the week and create a fixed start-up time for your thermostat based on that. But wearing a device on your wrist—which is either connected to an alarm to wake you up, or which detects your sleep cycles and learns when you’re likely to wake—can more accurately tailor your home’s pre-conditioning to match your actual wake-up time, rather than a weekday thermostat program set to the same time, on average, you’re likely to get up.

ENERGY USE IN YOUR OFFICE

Have you experienced working in a ridiculously frigid office in summer, because the building control system does not know how people feel? Or an overly hot office in the winter? Even an office that’s conditioned well to a target temperature could feel too hot and/or too cold (even at the same time!) given one person’s preferences vs. another.

Wearable technology can provide information like body temperature, heart rate, and respiration, giving a more complete picture of physical comfort. Voice recognition software could even detect when people are complaining about feeling too hot or cold.

Even more, wearable tech and other more personalized devices can help to condition the person, rather than the entire space—in fact, that’s the very principle behind heated seats and a heated steering wheel in the Nissan LEAF; it’s more efficient to make the person feel comfortable, rather than heat or cool the entire cabin. In an office setting, think of office chairs with heating elements, wristbands that cool your wrist like that from Wristify, or vents that determine personal air flow like those from Ecovent.

Beyond the office, wearable tech can have other applications when out and about, too. At the product launch, Cook described how the Apple Watch can replace a hotel keycard to unlock your room as you approach the door. Similarly, your watch can connect to your hotel room’s thermostat, to delay room cooling until you have checked in. No energy is wasted cooling an empty room, while ensuring a guest’s room is comfortable as they enter.

A COMING ERA OF PERSONAL ENERGY PROFILES?

In a coming era when energy use becomes not just highly personalized, but attached in fact to individual people, it’s not hard to imagine developing personal energy profiles of our individual demand and consumption. And that could open the door to personal energy bills. Usually we bill our energy use to our energy-consuming assets—electricity and natural gas billed monthly for our home, for example. But imagine if instead of assigning energy consumption to our assets we re-assigned that energy consumption to ourselves? Gone could be the arguments between roommates about how to equitably split the utility bill (one of the top sources of friction among roommates in places such as New York City).

Or what if wearable tech, in addition to sending personal information out to the systems around us, could also receive signals back to us, such as from your utility. Could wearable tech further open the door to a personal version of demand response? For example, similar to how utilities use demand response to cycle off air conditioners during times of exceptionally high peak demand in summer, could they instead signal a Wristify bracelet to cool a person instead of an AC unit cooling a whole house, or could your Apple Watch receive a signal from the utility asking you to have an ice-cold tea instead of turning up the AC at 4:00 p.m.?

PRIVACY VERSUS PERSONAL COMFORT

Many of the comfort-improving, energy-saving features above are enabled by more information about you being shared with computers. This of course opens up another set of issues around Big Brother watching and the privacy of potentially very personal information, who can “see” that information, and how will they be allowed to use that info. Whether having the option to turn such data sharing on or off, or another solution such as anonymizing the data, the face remains that wearable tech could be another front line in the grid’s evolution toward more distributed energy resources. Those DERs could now include not just things like rooftop solar panels and batteries in your garage, but also wearable technologies and the people who wear them.

This blog was originally posted on RMI’s blog. 

Life Scenarios: a group exercise to envision your professional future

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 “It isn’t where you came from; it’s where you’re going that counts.”

― Ella Fitzgerald

It is said that Bill Clinton had set his eyes on becoming president of the United States before he finished high school. More often, our dreams and aspirations change based on individual development and changing reality. If you want to help a friend find her next professional step, or if your own future deserves some creative thought, try this short exercise. (I call it Life Scenarios.)

Inspired by improv-comedy, Life Scenarios taps into the creativity of someone else to describe paths for your future. Not limited by previous thinking or value judgment, your partner(s) in this exercise can spark new ideas and uncover what makes you tick.

This exercise is best done in trios, but can be done in pairs. (I’ll use Person 1, Person 2, and Person 3 to name the different participants.)

Estimated duration: 15–20 minutes per participant.

Tools: Pen and paper, voice recorder, stopwatch.

 

Step 1: your long-term vision

Duration: 60 seconds

Person 1 describes what his life will look like 15–20 years from now.

The goal of this step is to provide Person 2 (and Person 3) with a long-term basis to build their scenarios on.

Example: “In twenty years I will have started and grown multiple organizations providing education to people who have insufficient access today. In twenty years, I will be an adviser to different young entrepreneurs and I’ll be involved in government. I will have traveled much, and be happily married to my husband, caring for our two children.”

 

Step 2: rapid fire life scenario

Duration: 60 seconds

Based on Person 1’s long-term vision, Person 2 imagines and pitches a scenario for the next 3–5 years. Example: “A newly-started accelerator focused on technology start-ups that focus on education, recruits you to lead scouting (i.e., finding companies to join the accelerator) and fundraising for the inaugural year. You travel around the United States to tell start-ups about your program, mostly traveling to college campuses, and to raise money from investors and sponsors to finance the accelerator program. After the inaugural program, you decide to stay on for a few more years as part of the 4-person leadership team, fulfilling the same role.”

 

Step 3: scenario evaluation

Duration: 60 seconds

Person 1 provides feedback on the scenario sketched by Person 2, using the following framework:

  • Pro’s (What do I like about the future described?)
  • Con’s (What do I dislike about the future described?)
  • Grade on scale of 1–10

Example: “I like traveling, and I like to speak to audiences when I’m campaigning for a cause. I love the focus on education. But I’d rather start my own initiative; and I don’t like fundraising. I’d give this a 6 out of 10.”

 

Go through several iterations

Based on the feedback on the first scenario provided by Person 1, steps 2 and 3 are repeated. If you do this exercise with three people, Person 3 is the next to sketch a scenario. If you work in a pair, Person 2 sketches a second scenario. The goal of Person 2 (and Person 3) is to get to a scenario which is graded 8 or above by Person 1. You can stop the exercise once that grade is reached, or continue to explore more opportunities. I typically try to sketch out at least six scenarios.

 

End of exercise

Once you have reached one or more attractive scenarios for Person 1, take a moment to reflect on the exercise.

Ask Person 1: “What insights did you gain? What was surprising?”More often than not, Person 1 will be delighted to see a different future path and/or have gained clarity on what characteristics are important in future work. Person 2 (and Person 3) can share too what was surprising for them in the answers of Person 1.

 

Final remarks

The best way to find what you enjoy doing is by trying things. The fact that you think you will not like an activity does not mean you won’t, or that your preference will stay static in the future. (Do you ever notice how many children complain about hiking to their parents and love walking years later?) If you notice internal excitement listening to one of the scenarios, why not give it a try?

A beautiful vision is not enough; hard (and/or smart) work is required to build your future.  The point of this exercise is to expand your view on your future, it’s no guarantee that you will realize these views. (Although there are plenty of quotes along the lines of “what you can imagine, can be done.”)

One goal of this exercise is to explore what characteristics you value in future work, reasoning through concrete examples. Example: you may think “freedom”is most important to you in your work, but realize that you consistently give the highest rating to scenarios in which you’re speaking on stage. This may mean that being the center of attention is more important to you (now) than freedom is! Once you realize this preference, you can change your decisions.

A side-benefit of this exercise, when you do it with friends, is that you can deepen your friendship because each party is by definition open and vulnerable by sharing their future dreams and how they respond to different scenarios.

Finally, please see this blog as an inspiration to pick parts from and blend with other ideas. Try to change things! Let me know what works.

A special thanks to Franziska Becker and Ted Gonder for going through this exercise and reviewing this post. 

The Future of Manufacturing – a dialogue

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Tesla Factory

The text below is a transcript from a discussion with Marin Licina and Pieter Verhoeven 25-10-2013, continued by email last week. Comments have been edited for brevity and relevance. All errors are the author’s.

Titiaan: The ability to produce is becoming accessible to more and smaller groups of people. I see a future in which I have access to small-scale production technologies that manufacture food, energy or electronic devices. Will markets for produced goods continue to exist if we can make everything ourselves?

Marin: Today’s manufacturers of commodities are in jeopardy when (1) the “production recipe” is public information; (2) the raw inputs are available and (3) the production machines are affordable and accessible. Think of an electricity provider. When intangible value of a product comes in, the prediction becomes more difficult. For example, a 5 dollar quartz watch tells better time than a Rolex. From a purely functional standpoint a Rolex is a very expensive way to learn what time it is. Yet, many people want the Rolex as a status symbol: it’s expensive, hand-made by a craftsman and made of ‘precious’ metals. Status is one reason why people will not produce their own goods in a future where decentralized production is more economical than centralized production.

Pieter: Two other reasons why consumers may not produce their own goods are that consumers have a desire for a social shopping experience; and that making your own goods consumes more time than buying them from a third party.

Titiaan: How will the shift from production by few to production by many play out in industries where products need certification? Think of medicine. Field trials of medicines are conducted to get a permission to sell to the world. If everyone can make their own medicine, will certification be based on the chemical recipe of the medicine?

Pieter: Interesting question. I think some marketplaces will always be monitored by governments, and so certification will always remain a part of these marketplaces. In the example of producing your own medicine, certification will probably be based on the chemical recipe.

Marin: Perhaps what happened in the digital music industry is an interesting analogy for what we can expect with decentralized production. First, there was total anarchy: Napster, Russian download sites, anything goes. From the chaos, standards emerged: look at the iTunes store and Spotify. This is because pure anarchy didn’t yield the best results. Apple invented a better system, with more order, and like a power law, people flocked to this best system. The winner got bigger, thereby attracting even more customers, which created a virtuous cycle.

What I’m trying to say is that I expect the same for distribution of future products and recipes to make them. There will be winners, who will become the future standard. The anarchy will re-shuffle the players and create new rules. I believe order and chaos need each other.

Titiaan: I believe that when means of production shift from few to many, the information needed for production will be created rapidly. Our challenge in my view is not to open the production blueprints (digital designs), but to democratize the means of production (machines, materials). Once the means of production are democratized and people are connected, information will start to flow.

Marin: I agree with you that production is becoming increasingly decentralized. 20 years ago, only Louis Vuitton made LV bags. Now, there are a bunch of factories in China that do very good fakes. This is a problem for the likes of Vuitton and Rolex: their business model is based on having a monopoly on the design blueprint for a product. Imagine what’s going to happen when everyone can print an LV bag or Prada shoe.

Book Review: Natural Capitalism

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Natural Capitalism suggests practical methods to improve the performance of your company or the quality of life in your country by accounting for natural capital. If you want to read success stories of better cities, more profitable businesses and more productive factories that reduce flows of energy, materials and waste, this book is for you. Below are some of my most important take-aways:

“What might be called “industrial capitalism” does not fully conform to its own accounting principles. It liquidates its capital and calls it income. It neglects to assign any value to the largest stocks of capital it employs – the natural resources and living systems, as well as the social and cultural systems that are the basis of human capital.”

The book introduces four strategies that enable countries, companies, and communities to operate by behaving as if all forms of capital were valued.

  1. Radical resource productivity. Using resources more effectively has three significant benefits: it slows resource depletion, it lowers pollution, and it provides a basis to increase employment. Companies and designers are developing ways to make natural resources – energy, metals, water, and forests – work five, ten, even one hundred times harder than they do today.
  2. Biomimicry: redesigning industrial systems on biological lines that change the nature of industrial processes and materials, enabling the constant reuse of materials in continuous closed cycles. Spiders make silk, strong as Kevlar but much tougher, from digested crickets and flies, without needing boiling sulfuric acid and high-temperature extruders.
  3. Service and flow economy: a shift to an economy wherein consumers obtain services by leasing or renting goods rather than buying them outright. This will entail a shift from the acquisition of goods as a measure of affluence to an economy where the continuous receipt of quality, utility, and performance promotes well-being.
  4. Investing in natural capital: reinvestments in sustaining, restoring, and expanding stocks of natural capital.

Resource productivity in industry

According to Natural Capitalism, the methods to increase industry’s energy and material productivity can be classified into (1) design; (2) new technologies; (3) controls; (4) corporate culture; (5) new processes; and (6) saving materials. An example of improved productivity through controls is found in distillation columns:

“Distillation columns use 3 percent of total U.S. energy to separate chemical and oil products, but most operators instead of continuously monitoring the purity of product as it emerges, test only occasionally to make sure samples meet specification. Between tests the operators, flying blind, often feed the same material back through the column more times than necessary to be really sure the products will pass the test – using 30-50 percent excess energy. Better controls that measure the purity actually coming out and keep fine-tuning the process for the desired results could cut waste in about half.”

We only need to look at chickens for improved productivity through new processes:

“There are three ways to turn limestone into a structural material. You can cut in into blocks, grind it up and calcine it at about 1500 Celsius into Portland cement, or feed it to a chicken and get it back hours later as even stronger eggshell. If we were as smart as chickens, we might master this elegant near-ambient-temperature technology and expand its scale and speed.”

The next time you design a manufacturing process or building, limit yourself using this framework:

“If a company knew that nothing that came into its factory could be thrown away, and that everything it produced would eventually return, how would it design its components and products?”

Eggs

Elimination of Muda

Muda is Japanese for “waste”, “futility” or “purposelessness”.

A central thesis of the book is that large-scale centralized production is not more efficient than localized small-scale production. The benefits of decentralized production – lower capital investment, greater flexibility, higher reliability, lower inventory cost and lower shipping costs – often far outweigh the benefit of centralized production – a lower price per pound of material or cubic foot of machinery. In decentralized production, all the different processing steps can be carried out immediately adjacent to one  another with the product kept in continuous flow.

“From a whole-system perspective, the giant cola-canning machine may well cost more per delivered can than a small, slow, unsophisticated machine that produces the cans of cola locally and immediately on receiving an order from the retailer.”

“The whole system comprises classical central sewage-treatment plants and their farflung collection sewers – each piece optimized in isolation – is far costlier than such local or even on-site solutions as biological treatment. That is the case because even if the smaller plants cost more per unit of capacity (which they generally don’t), they’d need far less investment in pipes and pumps – often 90 percent of system investment – to collect sewage from a greater area to serve the larger plant.”

WasteWater

Water treatment centrally or in your garden?

Business models for a service economy

Together resource productivity and elimination of muda (lean thinking) offer the foundation for a powerful new business logic: Instead of selling the customer a product that you hope she’ll be able to use to derive the service she really wants, provide her that service directly at the rate and in the manner in which she desires it, deliver it as efficiently as possible, share as much of the resulting savings as you must to compete, and pocket the rest. 

An example of this “new business logic” are Energy Service Companies (ESCo’s). ESCo’s privately finance and install energy saving measures (insulation, energy-saving LED lighting, solar panels) in a client’s building, and charge a monthly fee to the client that is typically less than the energy saved. In a not-so-distant past, engineering firms would charge for the product (insulation materials, solar panels and labor costs for installation) upfront, because of which many potential clients did not become clients because they could not afford the capital expense.

SpaceX_Dragon

Another not-so-earthly example is Elon Musk’s SpaceX. In stead of selling NASA a rocket, SpaceX charges NASA for the service to bring weight into the stratosphere. Through a different design perspective – building reusable in stead of disposable rockets – SpaceX is able to deliver NASA their service for one-tenth of the cost, winning a $1.6B contract.

Other examples are Schindler, a Swiss elevator-manufacturer that makes 70 percent of its earnings by leasing vertical transportation services, and Amazon Web Services. In stead of selling server-racks, AWS provide the service of storing bits. With this new business logic, Amazon created the industry of cloud storage (for which no server-manufacturing-expertise was needed!).

“At first glance it is tempting to regard a company crazy for striving to sell less of its product. If you sell a service, however, you have the opportunity to develop relationships, not just conduct a one-time transaction. The business logic of offering continuous, customized, decreasing-cost solutions to an individual customer’s problems is compelling because the provider and the customer both make money in the same way – by increasing resource productivity. Service providers would have an incentive to keep their assets productive for as long as possible, rather than prematurely scrapping them in order to sell replacements.”

A “service economy” has important macroeconomic implications. In a “goods economy”, purchasing and thereby orders fluctuate vigorously depending on the economy. In a “solutions economy” this volatility is dampened, because access to a solution does not require large investments, only annual service-fees. This would lead to an enormous reduction in the cycle of jobs being created and destroyed.

The shared economy is one incarnation of the service economy. The shared economy – an economy in which people receive service from the unused capital of other individuals – has started to take shape in recent years because technology has enabled fast and efficient distribution of goods and connection between individuals. With smart door-locks and iPhones with internet access, you can reply to a tenant on airbnb, approve her stay and give her digital, 24-hour access to your front door all in a matter of minutes. Before, this was not possible.

Important questions:

  • Why is the idea of “centralized production leads to maximum efficiency” deeply rooted in our minds if it is incorrect?
  • Why has the “service economy” or “solutions economy” – the concept to sell access to a product in stead of the product itself – been adopted by companies only in the last 20 years?
  • Why do product companies – Apple, Philips, Dyson – choose to sell a product in stead of access to a service, if selling a service allows them to build long-term customer relationships?

A quest for learning – summer 2013

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This summer, I embark on an epic quest. With 8 students from MIT and UC Berkeley, I’m cycling 4,000 miles from San Francisco to Washington. Along our journey, we will teach hands-on science classes to a total of 1,000 high-school students on topics we deeply care about, organized as “Learning Festivals”.

Classes range from “How to build a heliostat solar panel?” to “How does the brain work?”. Each Learning Festival will end with a session in which we invite students to work on their own ideas. The goal of our journey is to let children experience the joy of learning and the power of turning ideas into reality.

Updates

For email updates of the highlights of our journey (2x per month), please leave your information here. I keep another blog during the summer, please find it here. 

A demo class in Amsterdam

A demo class in Amsterdam

How can you help? 

Thank you for taking the effort of reading this page! There are several ways in which you can help:

(1) We are looking for teaching locations across the country (see the map below). Are you in touch with school teachers, librarians or summer camp leaders along our route? Please introduce us, spokes [at] mit [dot] edu!

(2) We will be camping all the way. Do you have friends who live along the path, who are happy to host 8 students for a meal or a night? Please introduce us, spokes [at] mit [dot] edu!

(3) This journey will lead into a structural organization to support children in developing their own ideas beyond summer. Do you want to work on or fund the future of hands-on learning? Definitely reach out, spokes [at] mit [dot] edu!

Team

Along our journey, we are supported by a large team of web designers, educators and funders. During our trip, we will be 8: 6 MIT students, 1 UC Berkeley student and myself .

Our team of 8

Our team of 8

Curriculum

1. COMPUTERS, ART:  The algorithmic beauty of plants

Do you like computers, plants, or art? How about the intersection of all three? In this course, we explore the recursive structure of plants and learn how to make pretty pictures of trees, flowers, and abstract fractal-like patterns using a clever technique called L-systems. Everyone will have a chance to create their own computer-generated works of art inspired by life.

2. NEUROSCIENCE, GAMES:  EyeWire: a game to map the brain

EyeWire is a puzzle-meets-coloring book online game that enables its players to contribute to the brain mapping initiative, which was announced by President Obama in March. Developed in part by one of the Spokes teachers in the Seung Lab at MIT, the game teaches its players how to trace the “branches” of neurons through 3D reconstructions of brain tissue. To do this task, players “spot check” computer algorithms, with the ultimate goal of obtaining a connectivity map with synaptic-scale resolution of the “connectome.”

3. ENERGY, CONTROL SYSTEMS:  Build your own solar panel heliostat

Through assembling their own solar panel heliostat, students will gain insight into the fundamental working or energy from renewables. This class combines knowledge in mechanical engineering (designing a technical system), computer science (programming an arduino) and electrical engineering (soldering the board).

4. FOOD, GARDENING:  How to grow your own vegetables: inside, for free!

Don’t you wish you know how to make your own delicious food? With a few old plastic gutters, a handful of plant seeds and a bit of daily care, you will grow your own veggies in no-time! Add in a few quick and easy recipes, and you will be the most popular chef in your high school – period.

5. MUSIC, PHYSICS:  The Science of Music

Music has been called the universal language. In some sense its building blocks of rhythm, harmony, and melody arise from the nature of the human mind. But there are still a lot of unanswered questions! Come learn about the math, physics, and psychology behind the music we love and how to take a scientific approach to solving its mysteries.

Journey

Our route from San Francisco to DC

Our route from San Francisco to DC

Partners

Spokes_Partners_1

My class

The class I will teach is called: “Grow your own vegetables – the joy of making what you’re eating”. I have created an entire outline of my class (using pictures, very few words) here.

See you in DC!

See you in DC!

Why do solutions cluster around a handful of problem areas?

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Education is a popular problem-area for start-up founders these days. I see friends build companies that assist you in learning a language; help you with your dyslexia or allow you to train for your final exams online. Is the problematic state of education today the explanation for the surge in ideas? I don’t think so. I think education is a popular area for start-ups now because types of solutions are becoming possible that can address the problems in education. It is not a bigger problem that leads to new ideas; it is a more appropriate set of solution building blocks.

I believe education is popular today because of the adjacent possibilities. A jump in computer penetration in classrooms; the possibility to stream videos from one brilliant teacher to every schoolgirl with access to internet; and advances in video games and visualization have enabled solutions for problems that existed for years or decennia.

To come up with brilliant solutions, you don’t dream up future scenarios out of thin air – you use building blocks that are (becoming) available.

A model for rapid (uncomfortable) learning

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Picture yourself sitting at a conference. One of the speakers asks the people in the audience to raise their hand if they prefer electricity from solar over electricity from coal, oil or natural gas. Chances are, you would raise your hand – of course, “greening” our energy system is important. The question is: does this rational decision lead to a change in your behavior?

Last weekend, I participated in Lean Startup Machine Rotterdam. The goal of the weekend was for participants to rapidly test possible business ideas, by relentlessly interviewing potential (i.e. hypothetical) customers. Many gifted programmers or engineers have spent months, if not years, to build beautiful, detailed websites or airplanes, only to find out that nobody wanted to buy their “solution” once it was completed. To reduce time wasted on undesired products, the “Lean Startup” methodology was created by Eric Ries, as a process to test what people want to pay for, before you start building. Following the “Lean Startup” methodology, my goal for the weekend was to identify groups of people who were willing to invest in renewable energy. I was joined in my quest by Jaap Ruoff, Raffi Balder and Daniël Muller.

Looking at your monthly expenses, how do your purchases reflect the things you say you care about? The first thing I learned this weekend was that although many people say renewable energy is important, few care enough about the topic to allocate money to it. We asked 8 parents whether they cared about the societal impact of the money they were saving for their children. Unanimously, the parents shared horror stories about their investments the past years, and that the only thing they cared about was to have a secure, very-low-risk place to store their money.

Retrieving our confidence, we went out again into a wealthy neighbourhood to ask people whether they felt engaged to invest in solar panels on a school. Only 3 out of 19 people answered positively – all three had interpreted the question as if it were the school of their children, unlike many of the other respondents.

This response provided us with a hint: the desire to contribute to sustainable energy projects may be related to a direct social connection to the location. Based on the fact that only 22% to 27% of US citizens have a roof suitable for solar, we decided to develop a solution for a new (hypothetical) customer and pain: one of the lucky quarter of Dutchies that have a solar panel-fit roof, but can’t finance a solar panel system alone. We tested our customer and problem hypothesis in two ways: we built a landing page for an early adopter (someone with his own roof and 3,000 twitter followers) and we started calling friends around a proposal to invest in a local school.

Sure enough, data started pouring in. The landing page we built attracted 255 unique visitors. None of the visitors left their information to buy a “solar share” – our name for the €50 investments visitors could make in the early adopter’s rooftop solar system. From our calls, we learned that our friends were willing to invest a small amount of money (e.g €50) in a private solar panel system, but a larger amount of money (e.g. €200) if the solar panels were installed on a school.

Most importantly, I was reminded how great it is to work with smart people on a challenging project, utilizing an unfamiliar process whilst operating far out of your comfort zone! Approaching people on the street, asking them about their needs will always instill fear initially, but it is such a rewarding experience! Thinking back of similar environments (specifically 3DayStartup in Amsterdam & Social Good Hackathon in Cambridge), these are the kind of environments that foster very rapid learning.

I noted earlier the learning that a societal need is not always equal to an individual pain or desire. If educational institutions can transform their high-level need for innovation to a burning desire, the Learn Startup Machine model can be a medicine to their pain.

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

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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.