Stay the course and persevere in spite of the market's initial disbelief or lack of understanding
Kevin Maughan: CEO, Urbanvolt
When we started we set about creating a model that delivered a really simple and value-adding solution for customers. We would retrofit LED lighting into their premises, assume all the financial and operational risk for an initial period of five years, and ask for a share of the electricity savings made during that period. After that initial period, the customer would continue to reap all of the returns for many years to come. It seemed obvious that this would relieve our customers from the burden of the initial investment and would accelerate the world's adoption of energy-efficient technologies.
It seemed like a pretty obvious solution to us at the time. We took over a year to build the business model before it was ready to launch in the market. There were months of negotiations with lighting manufacturers, followed by months of legal negotiations with global reinsurance companies and institutional investors.
However, as difficult as the first six months were, things proved far more difficult when we launched in the market. It took us several months to gain any traction with new customers. We changed our messaging at least a dozen times during that period because we thought we were not explaining our extremely simple business model correctly. What we ultimately found was that there was no real problem with the messaging, the problem was that it appeared 'too good to be true'.
What I wish I had known before starting was how difficult it would be to roll out an entirely new offering to a market that was unused to something new and different, despite the fact that our model asked for no money from the customer. While we understood the time it would take to create the business model, we wholly underestimated the time it actually takes to disrupt a market with a new model and gain traction with your first customers.
Our initial customers could not understand how we had made it so simple for them and they were initially looking for 'the catch'. At this point, we have overcome this initial hurdle, but it was a struggle initially that kept us second guessing ourselves and questioning our belief in the business. We learned to stay the course and persevere in spite of the market's initial disbelief or lack of understanding. If you keep it simple and smart, you will succeed.
Kevin spoke at the Bord Gais Energy Conference on October 5.
Sunday Indo Business