93. City Budget PlanLearn about city approval Process City Values Planning Commission Technical Evaluation and Recommendation Back to the envelop metrics IDEA Request for Quote City Council Approval City Council “Pet-Project” Finance Approval
94. What we learned Cities interest in financial options Long purchase cycles Utilities decoupled
95. Barriers Who is installing? Who owns the product? Need pilot cities Cant Initially offer PPA or Leasing Do we have the budget? Who is liable if it fails? Is it windy enough here? DC Veritas Cities
142. What we learned Pilot project integral to prove product concept Reduce perceived risk Certification take a long time
143. Pilot interest Mariposa, Tx Eco-school Demo site for sustainability Want to pilot Sundance, Ut Ski resort is interested Large energy budget Green minded
145. Learnings - Customers Problem not product Don’t marry product Active customer Real experience counts Hypothesis often wrong High customer acquisition costs
146. Learnings Startups are roller coaster Pass/Fail Criteria Interviews are hard Team value
147. What’s next Structural wind loads Liability and prior IP issues Understand small wind developer City interest in finance option Build it!
What we offer is convenient cheap wind for every American household.The product is a sleek, affordable VAWT design that will generate free electricity for the American household.Our vision is that this wind turbine could be a new category of home appliance, much like the refrigerator or dishwasher. It would be hassle free, plug-and-play system.And have the unique advantage of being highly visible, cool, green status symbol for the homeowner.And to spearhead this project, these are our team members.
Background – academic department and educationExpertise - experienceRole for teamAll have technical backgroundDurell – mechanical engineering and sustainability design, product development, lead discussionAndrew – lead customer development processDiana – environmental engineering; lead permitting and regulatory environment, city purchasing processPedro – civil engineering; lead understanding of energy market, financials
(gray out non bolded items)Talk about highlightsSingle Family Homeowners: Target customer are single family homeownerPayback period: We offer a renewable electricity generation device that has a much faster payback period than competitors. Manufacturing: We can offer this because our product is cheaper than competitors, due to our unique manufacturing process, without compromising performance and aesthetics. Direct Sales: We will sell our product directly to the customer to maximize savings to the customer. Partners: In order simplify the installation of our product, we will need to partner with local permitting officials to facilitate the permitting process. The idea is once the planning department is comfortable with our product, then there no longer needs to be a lengthy review for each installation.
Customer validation/discovery: We talked to potential customers to get their feedback on our product. Would they be excited about our product?Homeowner InterviewsFarmer’s Market – handout we were passing outOnline SurveyHandoutof our Value proposition: for the low cost of $500, we would reduce their energy bill by 10% every month. Payback period 2.5 yearsHassle free installation and grid hookupClean renewable wind energy
Bigger turbine: Customers wanted larger energy offset than 10% – which required a bigger turbine. No longer something you could place on your roof -> pole mounting required.Neighbors: People were very concerned about what their neighbors would think.?? (specifics) Market education: This is because wind turbines have not penetrated the general residential market, and there is a lot of market education that is required. Customer archetype: A very specific customer archetype emerged to because of these barriers. The ppl who were really interested in installing our product were typically a well-off father whose kids were out of the house, handy, and was active with other home improvement projects. They were actively seeking new technologies, instead of doing what everyone else was doing. Was more practically oriented, and did not care as much about neighbor approval
Solar and wind proxies: SolarCity, Sungevity, Aerotecture, Helixwind, Industry experts:Mick Sagrillo – wind turbine installation consultant, N.Carolina Solar and renewable research center researcher, SD Land Use/Environmental PlannerWhat we learned from talking to industry experts (solar and wind turbine companies, consultants, city officials)- Residential solar customers have very high customer acquisition costs - $2500/customer!Wind industry – difficult to tap into residential markets b/c there are large land requirements (especially with larger products, and larger wind turbines tend to be more cost effective), home owner’s association, Market is very fragmentedSolarCity is able to have outreach because of in-house finance option, unique – other solar and wind companies do notSolar market has many players, manufacturers, lead generation, installers, sales, maintenance. No one does everything. SolarCity is closest to doing everything inhouse, but purchases product from manufacturer
** updateWhat we learned from talking to industry experts (solar and wind turbine companies, consultants, city officials)Residential solar customers have very high customer acquisition costs - $2500/customer! Home Owner’s association – difficult to work with, because any one person can be stubbornChallenges with wind predictabilitySolar competition very strong, acceptance and finance options deeply engrained, fighting for same roof. A. Even though we were offering cheaper option, because everyone had heard about solar panels, this was more acceptable option for most homeownersSolarCity is able to have outreach because of in-house finance option, unique – other solar and wind companies don’t B. Many market players play different role in market, installations, lead gen, maintenance, ownership, finance
Due to many limitations with residential market for wind turbine applications – decided not right market
We decided residential not right market, What other alternatives?Lamp Posts – here’s why.Not making lamp posts, but retrofitting wind turbines on them.Move this to general lessons
Decided on installing product on city lamp post to saving the city electricity money because this is an urgent issue for citiesEven though cities struggle with budget expenses, cities can utilize grants and federal funding programs for capital investments such as wind turbinesMarket ideally suited for VAWT -> better value proposition over solar in this areaPremium placed on local electricity generation and cool aesthetic factor15 million street lights – total market (segment into available market,
Week 6 – ChannelsWhat we learnedNew customer segment -> cities instead of home-ownersRetrofit streetlights with VAWT, with faster payback period than alternatives and competitorsDecrease customer acquisition costChange relationship with City Council – need to get their approvalHOA not as powerful
Interviewed city staff members and utility commissioner to understand if they are interested in product (Assistant Director of Utilities,Purchasing Admin,Project Manager LED-Retrofit,Former City Council Member and Mayor)Came to understand city and its processes to see how to sell to city.City has long review process for project. Large projects need to fit under cities budget plan, which are planned out 2-5 years in advanceSaboteurs can include staff members or city residents who don’t want changeCity’s typically not interested in owning large amount of electrical generation assets, In CA, utilities also typically do not own their own generation units b/c of decoupling industry?Wind developer would own assets, potentially funded through investment bank or nontraditional sourcesDo we want to be manufacturer or wind developer?We will need to initially be the developer for initial pilot projects to prove concept works, before getting large amounts of investments to scale-up businessHigh liability to be developer b/c wind potential difficult to predictBusiness model that relies on cities to own asset is problem They don’t have the budgetConstantly evaluate your value prop
*come backCities would be more interested in financial option so they don’t need to have upfront costs, or carry asset.Lessons learned1. From our findings, in general, cities don’t want high upfront costsCity has long review process for project. Large projects need to fit under cities budget plan, which are planned out 2-5 years in advanceSaboteurs can include staff members or city residents who don’t want changeCity’s typically not interested in owning large amount of electrical generation assets, In CA, utilities also typically do not own their own generation units b/c of decoupling industry?Wind developer would own assets, potentially funded through investment bank or nontraditional sourcesDo we want to be manufacturer or wind developer?We will need to initially be the developer for initial pilot projects to prove concept works, before getting large amounts of investments to scale-up businessHigh liability to be developer b/c wind potential difficult to predictBusiness model that relies on cities to own asset is problem They don’t have the budgetConstantly evaluate your value prop
Lots of barriers to entry:Who will ultimately own product?Liability issuesHypothesis
We want to save the city moneyDeveloper can be us or other developerHowever, through traditional route of supplying electricity, which would involve developer, utilities, and then cities, we would just be supplying renewable electricity -> we’re not saving city money anymore
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1. Pilot projects integral
We have customers!Pleased to find there are customers who really want our product.Search for pilot projects to develop product: Utility Marketing Services ManagerThese customers were very excited about our product and would want to pilot our product
Is not about the product is about the problemDon’t get married to productCustomer needs to be actively seeking solutionRegulations are major road stopper – need to understand, project requires new business modelGeneral stuff should go heree.g. start-ups are rollercoastersif you are not solving a major problem for a customer, it is much hardermust resegment or make things cheaperDon’t get married to a product(Is our current market/ customer segment viable?Don’t forget to brainstormSometimes you need to slow down to find alternativesNeed to take time to reflect on whether you are going in the right directionConsidered attaching wind turbine to existing devices including cell towers, light posts, ski resorts, (consider making icons pop up individually))
Pass/Fail criteria difficult to set, but important to validate businessTeam willingness to work outside comfort zone can make or break projectPpl are easy to talk to, but difficult to ask right questionsproject requires new business modelGeneral stuff should go heree.g. start-ups are rollercoastersif you are not solving a major problem for a customer, it is much hardermust resegment or make things cheaperDon’t get married to a product(Is our current market/ customer segment viable?Don’t forget to brainstormSometimes you need to slow down to find alternativesNeed to take time to reflect on whether you are going in the right directionConsidered attaching wind turbine to existing devices including cell towers, light posts, ski resorts, (consider making icons pop up individually))
** need to address whether viable project and whether we are continuing w/ projectWind loads that Light Poles can endureSafety Regulations for putting turbines upLiability of light pole accidents/turbineTotal availablemarketHow much electricity does the “city side” of a city use? How many turbines does that equal for us in a minimum wind speed of 4.5?How much money will that cost?Would cities be interested in a solar cityesque savings modelWhat allows us to compete with solar using the solar cityesque modelproject requires new business modelGeneral stuff should go heree.g. start-ups are rollercoastersif you are not solving a major problem for a customer, it is much hardermust resegment or make things cheaperDon’t get married to a product(Is our current market/ customer segment viable?)Don’t forget to brainstormSometimes you need to slow down to find alternativesNeed to take time to reflect on whether you are going in the right directionConsidered attaching wind turbine to existing devices including cell towers, light posts, ski resorts, (consider making icons pop up individually))
