5 tips to power up energy startups
MANILA, Philippines - Energy. Passion. Innovation.
The recently concluded 2nd Shell Powering Progress Together Forum held in Singapore brought back Shell Technology Ventures (STV) managing director Geert van de Wouw to his time when he was in engineering school.
“It gives me good vibrations. It starts with educating young people and inspiring them for Science and Engineering, and hopefully a couple of them would grow up as great entrepreneurs. So invest in them,” said van de Wouw, who studied Molecular Sciences in Wageningen University, The Netherlands.
The PPT forum, attended by young innovators and leading thinkers from business, government, and society, sparked conversations on how Asian cities will evolve with energy systems that produce more power with less carbon dioxide by around the middle of this century. STV, an organization within Shell which invests in startups, is looking for ideas and solutions that address this energy challenge.(READ: Imagining the future of energy)
Since 2013, STV has supported more than 16 ventures. At present, the group has presence in 6 different locations in the world. It supports ventures in San Francisco, Boston, and Houston in the United States, in London, and the Netherlands in Europe. It is also setting up a small office in Shanghai in China, where startup activity is flourishing.
On the sidelines of the Powering Progress Together Forum, Van de Wouw shared insights on how innovations can be commercialized and how early-stage and small-medium enterprises in Asia can be powered up.
Geert van de Wouw, Shell Technology Ventures (STV) managing director
1) Invest in education
Van de Wouw stressed that startups often emerge from technical and engineering schools “where the entrepreneurs of the future are created.”
Investing in education and stimulating entrepreneurship are roles that the government can play, according to Van de Wouw. However, when public funds are not available to support startups, the challenge for innovators is to make their pitches attractive to investors, venture capital firms, private equity firms, and corporations.
For instance, at the Shell Eco-marathon that took place alongside the Powering Progress Together Forum in Singapore Changi Exhibition in March, Van de Wouw was impressed at how students got together “to develop the most fuel-efficient car, and are really passionate and inspired by technology.”
2) Be mindful of disruptive trends
There are 3 major trends currently changing the energy system that startups should take into account when turning ideas into solutions: digitalization, electrification, and distribution.
The energy sector is shifting into renewables, and that means electrical energy. The energy industry is also being digitized, whether it is in oil and gas operations or in new energies. There is also a lot of data driven digital solutions that are being developed and rolled out by startups that Shell is interested in.
Finally, rather than relying on large coal-fired power stations, the energy system is moving towards a future where there are smaller distributed sources of energy and sources of storage of energy.
“We look at startups specifically in those fields that are addressing these disrupting trends,” van de Wouw said.
3) Develop new business models
Aside from considering disruptions in the energy system, startups should also develop and test a viable business model around an innovative energy product or service.
STV taps into technology companies and companies that are developing new business models in oil and gas, in retail, in the lubrication business, and in new energies. In new energies, STV focuses around solar and wind, but it also interested in smart mobility-type companies.
Startups that focus more on systems and software that empower customers and that introduce fresh business models around distributed energy and storage are increasingly attracting investors like STV.
“We invest typically as a minority investor to get access to these technologies and these new business models and to really try to commercialize them in Shell,” according to van de Wouw.
Van de Wouw, however, noted that the intellectual property stays with the startup. STV merely serves as a launching customer to the startup and the entrepreneur who really creates value.
4) Hire your chief business development officer
There is no silver bullet that will ensure success for businesses, but van de Wouw sees one mistake that entrepreneurs commit: they focus a lot on product development in the beginning, but they wait for too long to to hire commercial people.
“The one thing I can tell any startup is don't wait too long in hiring your chief business development officer because those people are important and it's often being ignored and they come on board too late,” van de Wouw said.
Startups should not only focus on technology and innovation. It should also tap talent that will get their products into the market.
5) Get customer traction
The energy industry is large and complex, and getting customer traction can be quite difficult and challenging for many startups. STV has implementation managers who help entrepreneurs to get their technologies implemented in Shell, van de Wouw stressed.
These managers assist startups to reach out to the right influencers and stakeholders in the company - people in the assets, project organization, and engineering departments.
These experts, according to van de Wouw, “really try and break a connection point where the startup can try and win business in Shell.” – Rappler.com