It’s been three years since the Green Launching Pad initiative was started at the University of New Hampshire with $1.5 million in federal stimulus money. The goal of the project was to fund and support the state’s most promising, eco-friendly start-ups, and enhance New Hampshire’s green economy in the long term. Under federal rules, the GLP was required to use all of the money by last spring. While the program is raising money to privatize, it’s been a year since it has handed out any grants. Last week, we checked-in with the Green Launching Pad itself, and one of its biggest success stories, Portsmouth-based Revolution Energy.
Revolution Energy has the feel of a new start-up–young environmentalists-turned-businessmen wearing the jeans, t-shirts, and hoodies that have become visual short-hand for 21st century innovation culture. But an hour’s drive southwest takes you to a very different, but no less successful, Green Launching Pad company. EnerTrac in Hudson has seen dramatic growth since winning a $20,000 GLP grant in the first round of funding. With more than 20 years of experience with start-ups, and wearing a dark sport coat, EnerTrac founder and CEO Steve Owens fits more into the classic mold of of an entrepreneur. A few months ago, he moved his company into permanent office space at a nondescript business park. Inside, the business looks ready to expand, with its white walls, open floor space, and rack of promotional t-shirts hanging up behind the reception desk.
StateImpact caught up with Owens to discuss the Green Launching Pad, energy-based entrepreneurship, and the psychology of successful entrepreneurs.
Q: What does your company do?
“We are an M2M company. That stands for ‘Machine To Machine.’ So we make devices that tell the status of different things that are out in the field back to another machine, which is really a computer system. It then uses that information to create efficiencies about how to deliver, when to go, how to route things, etc. A:
An example of that would be if you have a propane tank, we sell a monitor that goes on the propane tank, so the dealer gets that information, instead of delivering based on a guess of when you need propane, he delivers exactly when you need propane. That saves him a lot of money, because he’s going to your house less often, saves the environment because he’s driving the truck a lot less often.”
Q: When did you start this company?
A: “It was officially started in 2006, when a guy who owned a fuel oil company came to me and said, ‘I need to know how much is in all my fuel tanks.’ And I said, essentially, ‘That sounds pretty easy, we’ll do this, we’ll do that, we’ll do the other thing.’ And he says, ‘Well how much will each one cost?’ And I said, ‘Well, you know, maybe a hundred bucks, maybe $150.’ He said, ‘No, you don’t understand. I need this to cost $25 apiece.’ And that was the genesis, if you will, of the whole company.”
Q: How did you get into this field?
A: “I do have an engineering background. I’m sort of what they call a serial entrepreneur. The first company was called PES. It is now called WellDynamics, and they renamed it after we sold it [to Halliburton]. And a second company was called Welltronics, which we sold to National Oilwell Varco.
[PES] used what’s called a remote control, or “smart well,” which is a way to reconfigure a sub-sea well. They change over time and they need certain well intervention measures. In sub-sea wells, the well is on the sea floor. So it’s not a matter of pulling up there with a truck and just getting in the well. It’s extremely expensive. In fact, basically, it’s impossible. So by having a remote control well system, we were able to do this well intervention remotely, not having to reenter the well with tools, but by pushing buttons on a computer. Wells before were not candidates for production, because they were too deep, and you couldn’t use sub-sea technology because would require well intervention too often, and that would be too costly. So suddenly all these fields opened up as a result of that smart well technology.”
Q: What was so exciting to you about breaking into the M2M world with EnerTrac?
A: “To me, technology is exciting, period, for its own sake. But you know, maybe a better question is, is why did I decide to get into this versus everything else? And it’s because I personally look for inflection points, which is points in the technology where costs are radically falling. Because what we’re doing–i.e. using wireless technology to measure things–that’s not new. People have been doing that for 50 years, at least. But whereas 10 years ago, that might cost several hundred dollars per site, today we can do that for a few dollars per site.
Q: Can you describe the growth of EnerTrac since you started?
A: “Two years ago we had less than 500 units. Now we have 40,000 of them, and will probably go over 100,000 this year. So yeah, it’s growing very, very rapidly, which is more a comment about the overall M2M market than it is about EnerTrac. Because this is an exploding market.
We’re focusing on the low-cost, low-bandwidth M2M field. So getting it at a point where it’s affordable is really where we shine. We can do this for fractions of the cost, you know, 10 times less, 100 times less than a lot of other M2M providers. They may have some fancy sensor or something like that that’s very valuable in a certain niche market, but if you simply need a few data points per day, and the sensors are very simple, then that’s sort of our sweet spot, if you will.”
Q: So when the Green Launching Pad comes along, where were you in the development of your company at that point?
A: “We were pretty far along. We were still self-funded, and had a few angel investors in the company. But we hadn’t gotten VC [venture capital] money. We had a product, it worked, we had deployed a few of them, we had done a lot of test marketing, and we were at the point where we concluded that, hey, we could make money with this! That was when we first heard about Green Launching Pad.”
Q: In terms of your development, what was the GLP’s role?
A: “I think there were several roles. They did offer a lot of support from the University of New Hampshire. So we got a lot of students helping us to build the business, everything from doing analysis to building websites, etc.
Q: A major theme I’ve heard in the course of interviewing entrepreneurs is you can have the best idea in the world, be passionate, and work 20 hours a day, and sometimes, it just doesn’t come to anything. Why do you think that is?
A: “If those are smart hours, great. You have to work both hard and smart. What is the best idea? In fact, if you look at most ‘Great Ideas,’ many, many people had that idea long before. By the time the iPod came around, I’d already had ten different versions of digital music players. They didn’t call it an iPod. But the functions were all there. It recorded a message on the little hard drive, and it had a little menu and it played songs and stored songs and some of them even had photos and everything else. But today, people think an iPod as if that’s the only product that’s even available. It’s a generic name.
And why was Apple so successful in that and other people weren’t? It’s because they out-executed everybody. There are lots of great ideas out there. But unless you can turn them into a product that people will buy, and the product that people will buy in preference to every other product that’s likely to be on the market, you’re not going to be successful. There are many geniuses that nobody will ever fund, because they simply can’t run a business. If you can’t run a business, you can’t turn an idea, you can’t monetize an idea.”
Q: In terms of funding and execution where are you right now?
A: “Funding is not really a problem right now. You used to never even [hear] of the idea of M2M, and now everybody’s talking about it in the VC world.
I don’t tell anybody, but I’m always disappointed in our execution. I always think it could be done so much quicker and so much faster than it is being done. So if you ask me, ‘How are we executing?’ My real answer is we could do a hell of a lot better. But if we look at all our competitors, at the moment, knock on wood, we appear to be out-executing everybody. So I guess I should be happy with that, but that’s one of the problems with being an entrepreneur! You’re never satisfied!
If you open a restaurant, you’re happy when the restaurant’s filled every day. But when you open something like this, it’s like you’ve got to build another restaurant every day. And you’re not happy, ever. Because every day, you’ve got to build more restaurants. The demand for M2M is outstripping the supply. And it’s as if nobody has anything to eat, and you’re the only one who has a restaurant. And that requires continuous scaling and scaling and scaling. I guess it’s also why I’m very typical of a lot of entrepreneurs. When a business reaches sort of a point of maturity, it’s no longer fun for me, and I have to quit and start over again! Which sounds a little masochistic, but that is very typical entrepreneurial behavior.”
Q: And in the case of a company like EnerTrac, how long do you see that taking?
A: “Three to five years, and it’ll be beyond the point where…I may make a little bit of an exaggeration, because, I do love technology, so I won’t say that I would be bored. But it’s not as exciting as working in a company that is growing very, very fast. There’s driving down a normal road, and there’s driving in a race car on a track. It’s infinitely more exciting. You may enjoy driving. You may even enjoy a country drive. But when the car is just going 50 miles an hour down a regular road, and you stop at every stoplight, and every stop sign, and yield for the pedestrians, it’s not the same kind of excitement as going door-to-door with somebody else, trying to beat them to the finish line. And so it sort of loses that luster, and like many entrepreneurs, they like to go back to that original point. Back to the racetrack.”
Q: The Green Launching Pad is privatizing. As an entrepreneur with a GLP company, what are your thoughts on that transition?
A: “Let’s face it, most economists say that all new jobs come from new businesses. They come from small businesses, especially entrepreneurial businesses. And so anything the government can do to promote that is, assuming they do it correctly, is going to make our economy more competitive. And you know, we’re not the only people that can invent things. The world is very global now. So it is extremely important that from an economic point of view, that we foster entrepreneurship, because that’s where the jobs are going to come from, that’s where the growth in the economy is going to come from.
Now what is the proper role of government versus the private enterprise? My personal opinion is the government shouldn’t pick winners and losers. I don’t think it’s very good at that. I don’t think it’s very good at taking public money and saying, ‘Well, you should invest it in this thing or that thing.’ But I also don’t think that that means that they have no role in the process at all. I don’t know that I would favor completely privatizing the Green Launching Pad, although there are certainly aspects of what the Green Launching Pad is doing that probably should be privatized. But I think there’s still a role for the state government in promoting entrepreneurship and green energy and technology in the state of New Hampshire. I’d be disappointed if I saw the state government sort of moving away from trying to foster early-stage companies from being in New Hampshire.”
Q: And what parts wouldn’t be beneficial, as far as privatizing the Green Launching Pad goes?
A: “The later stage venture capital community works really well. If you need $200 million, that works. There are plenty of companies out there that are really good at figuring out who should get that $200 million. Where the system tends to lag is figuring out who should get $250,000. That’s where we have a lag in our economy. And every company starts at that level. And that sort of very beginning seed capital, it’s not even as much capital as it is guidance.
I was very, very fortunate in my experience. If I hadn’t met certain people, I would never have known how to do it. Most business schools are teaching how to run GM, which is already an established company. They don’t have to start out raising $250,000 and figuring out how they pay people and how to get resources and how they promote themselves and how they develop products.. And I think that’s really where government can play a part is because it’s not a role that’s very attractive for making money.
The reality is there’s a long shot whether that company’s going to be successful or not. But if we don’t at least provide them some assistance, you’re not going to get any of them. And it may be no more than just connecting people to business leaders who have been through that process so they can mentor and coach the people who are coming up through the ranks.”