3-minute read by Ryan Kushner
Boil it all down, and the difference between a startup that makes it and one that doesn’t is deployment of technology. Deployment = customers + projects, and that = traction. That might seem obvious, but in the world of energy and water startups, just getting to the build phase is a monumental step, and often marks the turning point for a company. We should know – we have 42 companies in our portfolio and have deployed $12M into 22 customer pilot projects with major utilities, corporations, financial institutions, land and building owners, and military branches.
We often call deployment of new technology “steel in the ground” (though it can be SaaS) and it’s the secret sauce of Energy Excelerator and startups in our space. The story of Stem really typifies this. Before joining Energy Excelerator, they had installed behind-the-meter systems in commercial and industrial facilities but had yet to deploy alongside a utility – their ideal customer.
After Energy Excelerator facilitated an introduction to the right people at Hawaiian Electric, talks ensued and Stem is now deploying a 1 MW pilot project worth $2.1M (companies on our Demonstration Track receive up to $1M of grant funding). Since then, Stem has hit major milestones including:
– Winning the largest behind-the-meter storage project in the world, 85MW with SoCal Edison
– Raising a $100M project finance fund
– Raising an additional $15M to add to its Series C from Peter Thiel’s Mithril Capital (read about it in Fortune Magazine)
So, what makes a great demonstration project?
1. The project is transformational to your company. Does this project prove your core value proposition? Will it help your company scale to the next level in terms of size of project or kind of partner? A great demonstration project will draw a straight line between your future business model and your present state. Our demonstration project with Stem gave them their first utility customer and validation that their solution could add value to the grid.
2. The project solves a real pain point for partners or customers…that they will pay for. Hawaiian Electric needed a solution that would stabilize the grid and Stem was there to provide it. This was not a vanity project for Hawaiian Electric – it addressed a real and present need, and they were willing to co-fund it. We’ve found that giving $1M projects away for free generally leads to one-off projects and doesn’t help companies scale. What do we mean by scale? Beyond Stem’s 85MW deployment with SoCal Edison, they partnered with Hawaiian Electric on a $2.4M follow-on project, under the U.S. Department of Energy, that will lay the platform for solar-plus-storage systems.
Are you facing a chicken-and-the-egg problem? Will customer deployment and results help transform your company and create an impact? Applications are open right now for our 2017 cohort, with funding up to $1M per company and, more importantly, fast-track connections to decision makers in Hawaii and the Asia Pacific. Apply now!