Greenstart’s Second Batch of Startups Has “Digital Cleantech” Focus
Startups with ideas for improving energy efficiency in the transportation, construction, and utility industries got their first big chance to promote their businesses at last week’s semi-annual demo day at Greenstart, San Francisco’s cleantech startup accelerator.
It was the second such event at Greenstart, which was established last summer and hatched its first batch of companies in December. For the most part, Greenstart’s 2011 graduates were working on big challenges ranging from construction materials to biofuels to smart electrical sockets; only one, an online game called Wa.tt, was a pure software play. But Greenstart founder Mitch Lowe kicked off last week’s proceedings by offering a redefined focus for the accelerator, one that hews much closer to the kind of software- and Internet-related problems that can be solved on startup time. “Our mission is to accelerate digital cleantech,” Lowe said.
It’s a change Lowe foreshadowed in a February interview, back when the current class of startups had just entered the program. Startups have a better chance of making a dent in the energy business if they focus on distribution and efficiency— areas where software innovation can make a difference—rather than energy generation, Lowe said. “There are some business models where you can iterate and learn more quickly,” he said.
Greenstart’s three-month program is all about that iteration, with guidance from a network of mentors experienced in the energy, investing, and product design. A new addition this time around: David Merkoski, the former executive creative director at Frog Design, who was brought onto advise companies about branding and user-interface questions. In remarks before Wednesday’s startup pitches, Merkoski said “design tools” and “design thinking” can help startups solve not just product problems, but business and strategy problems. “This is where Greenstart separates from other accelerators,” he said.
The five companies chosen for the spring term were drawn from a pool from 150 applicants, according to Lowe. “It is harder to get into Greenstart than it is to get into MIT,” he said. “This is the cream of the crop.”
Here are thumbnail introductions to the five companies, based both on their presentations and one-to-one interviews with founders (except in the case of Scoot Networks, whose CEO, Michael Keating, said he didn’t have time to speak with me).
GELI—the name is an acronym for Growing Energy Labs Incorporate—hopes to become the leading software provider in a market that doesn’t quite exist yet: software for grid-scale batteries. Founder and CEO Ryan Wartena, who earned a PhD in electrochemical engineering at Georgia Tech, points out that companies have invested $10 billion over the past eight years building new types of energy storage devices for the grid, and that they’re expected to spend another $30 billion over the next decade. Yet the renewable energy business is plagued by a daily imbalance between supply and demand. “Imagine you have solar on your house but you want to make a margarita at night,” Wartena says by way of explanation. If battery makers and utilities could manage energy storage devices using a common stack of open-source software for communications and power conversion, such imbalances could be smoothed out more efficiently and profitably.
GELI’s operating system can talk to various appliances and power conversion systems and lets utilities and facility owners monitor demand and sell energy back into the grid at optimal times. The main customers for the software, Wartena, thinks, will be battery manufacturers. “What we are delivering is software that will allow them to monetize multiple value streams for their batteries,” he says. “It’s great that everyone is trying to make a cheaper battery, but they’re missing a piece. If we do this open source project, we can get developers building applications so that [battery makers and owners] can participate in the market for load management.”
KWhOURS founder and CEO Colin Davis says his passion is for “making it easier for people to do the right thing.” In the construction business, there are lots of ways today to do the right thing when it comes to making buildings more energy-efficient. But the first step is always an “energy audit,” and Davis noticed while working as a consultant for an energy operations company that the process is by no means easy. “You wander around a building with a notepad for two weeks writing a few hundred pages of notes, and then you transfer that manually into an Excel spreadsheet and run different scenarios, and then the data dies and the next person to come long has to start from scratch.”
The big idea at kWhOURS s is to supply engineering service companies with tablet-based software for conducting commercial building assessments. The software, called Field, is already being used to run audits of everything from 7-Elevens to military bases. “We guide people through the process,” Davis says. “We standardize it, and you get it in reusable, digital form.” He claims big engineering firms will be able to save millions of dollars a year using the software.
The Cambridge, MA-born startup is already two years old, and has been selling a Windows-based version of Field for more than a year. But with Merkoski’s help, Davis used his time in Greenstart to recreate the software for the iPad, which he says is the preferred mobile platform for 70 percent of the company’s customers. Merkoski “worked with us to rip our Windows app down to the ground and redesign it,” Davis says. “He alone would have been worth doing Greenstart.”
If you live in San Francisco or the peninsula, you’ve seen the giant WiFi-equipped private buses that prowl the local streets and highways. They’re full of employees from big companies like Google and Genentech, who see providing transportation to and from work as an important perq that helps employees minimize the stress, cost, and carbon emissions from commuting. Nathalie Criou is a former Google employee who used to enjoy riding one of those buses herself. “Then I left Google [and had to start driving to work] and my life collapsed,” she says. Now that she’s CEO of her own startup, she wants to bring the same luxury bus experience to other workers.
In Silicon Valley “recruiting is the number one thing that gets in the way of growth, and commuting is the number one thing that gets in the way of recruiting,” Criou observes. Her startup RidePal pairs companies that want to ease their employees’ commuting pain with existing transportation companies and their fleets of private buses. “We connect butts with seats,” Criou says. “But we do more. We handle route planning, billing, and scheduling. We are an end-to-end commuting management company.” Using RidePal, she says, “companies can stand out and attract the best talent for a fraction of the cost of running their own [commuting] program.”
RidePal is already used by 15 Bay Area companies and it wants to deploy up to 200 buses across the region, then expand to 20 other cities with concentrated pockets of professional activity and residences. “We will be the Virgin America of commuting,” Criou says. “Now is the time to reserve your seat.”
You’ve probably heard about the successful bike sharing programs in cities like Montréal, Copenhagen, and Paris that are now being tested in U.S. cities such as Boston. For a few dollars, you can rent a bike for a one-way trip between one docking station and another. Scoot Networks wants to try the same thing, but with smartphone-activated electric scooters.
If you’re a Scoot Networks member and you need a scooter for a shopping trip or other expedition, you bring up the Scoot smartphone app, locate a nearby station with an available scooter, and reserve. When you get to the station, you snap your phone into the vehicle’s custom smartphone dock, which turns the scooter on, and away you go.
The startup will pilot its system in San Francisco. If just 1 percent of the 1.5 million trips that occur within San Francisco were completed via Scoot, says founder and CEO Michael Keating, the startup would become “a very profitable little business, with $33 million in revenue, $20 million in costs, and $13 million in earnings.” The business could then expand to other cities, “bounded only by urbanites’ frustration with their current mobility options.”
Companies like EnerNOC and Comverge do a big business in “demand response,” that is, aggregating big commercial industrial customers who agree to cut back their electrical usage during times of peak demand—thus saving utilities from having to build more generating plants. Companies get paid just for joining demand response pools, but it’s a bonus that’s never been available to the little guy. Smart Grid Billing is developing Internet-connected electrical plugs that will open the demand-response business to small and medium-sized businesses—starting with golf courses.
“There are a lot of golf carts in the United States,” says founder and CEO Henrik Westergaard. “And they all come in off the course at 4 or 5 o’clock and get plugged in to recharge at 6 o’clock, which is right in the middle of peak demand.” If recharging operations could be intelligently shifted to a time when wholesale electricity prices are lower—say, the middle of the night—country clubs could save a bundle.
Smart Grid Billing’s special outlets communicate with the company’s servers in real time over the Internet. “We know exactly when a device is trying to draw power and can look at grid conditions and decide whether that load should be delayed,” Westergaard says. Thanks to recent ruling by the Federal Energy Regulatory Commission, small companies like his can collect money from utility system operators for shifting demand, and pass most of the savings directly to customers. “Customers don’t have to do a thing,” he says. “We provide the hardware and software at no cost and share the revenue generated. It’s a very simple sales process.” The startup plans to take its system live across 10 golf courses over the next three months.