Startup Spotlight Q&A: Evolve Energy
Michael Lee is the CEO and Co-Founder of Evolve Energy. He’s worked in renewable energy for the past 10 years and earned his MBA from Harvard Business School. In 2018, Michael founded Evolve Energy to help consumers save on energy costs while also laying the groundwork for the energy infrastructure of the future. Evolve recently won Grind Startup of the Year award at Global 2020, an honor well-deserved by Michael and the Evolve team. Check out what Michael had to share about Evolve’s biggest moments, advice for founders, and what’s coming up next for Evolve.
— In a sentence, what does Evolve Energy do?
Evolve helps customers cut their electricity bill by 50% and decarbonize their footprint by unlocking the value of smart home products.
— What makes Evolve different in this market?
Other companies sell “fixed priced power,” which means every hour of the day is the same price. We sell wholesale power — this electricity is very cheap, but changes price every few minutes based on grid conditions. We then pair these signals with IOT-enabled products (EVs, smart thermostats, appliances, smart plugs) and optimize the timing they use electricity to align with the cheapest times.
— How did Evolve came to be? What was the problem you found and the ‘aha’ moment?
I’ve been helping build renewable energy projects for the past 10 years. I’ve seen these projects have a 70% reduction in cost over this period — but electricity prices that we all pay haven’t decreased as much. I realized the reason is that renewables create massive surplus and shortage of electricity on the grid. We could easily fix this if devices could respond to these wholesale prices.
— What milestone are you most proud of so far?
Getting to market and selling electricity is very challenging for startups. It traditionally requires large pools of capital for creditworthiness. We have a unique workaround to bypass this through a partnership with a large energy company. Finding the right type of partnership with established players is important to enable scale for startups. But it requires that one knows the nuance of the industry landscape since some of these partners could be competitors.
— What are people most excited by when it comes to using Evolve?
Customers will call thinking that we made a billing mistake and didn’t charge them enough. Yea, we can save people that much money that they think it’s an error how little they pay. Those are the best conversations.
— Have you pursued funding and if so, what steps did you take?
We raised a pre-seed. We’re loosely related to the “climatetech” investment trend since the lowest electricity times are when renewables are abundant. And so we’re effectively decarbonizing footprints without customers knowing. Raising a seed can be challenging — investors want to pattern match and we don’t fall under any existing patterns. The most important part is to get in front of investors and have a two-way conversation. Capital raising is a full-time process.
— What KPIs are you tracking that you think will lead to revenue generation or growth for Evolve?
We already have customers and so retention/renewal rate is an important KPI. It influences our LTV and decreases our CAC (through referrals) at the same time.
— What is one thing every founder should ask themselves before walking into a meeting with a potential investor?
Founders should ask “Does this investor have any companies in their portfolio that look like our model?” I’m not saying it needs to be the same company in the same industry. But if you’re a B2C company and the investor only has B2B in their portfolio, it’s going to be a short meeting. Create a spreadsheet CRM to track your conversations. It’s added work but helpful in the long-run.
— How do you build and develop talent on your team?
Finding great people is the first step. Look for people who are great at what they do yet open to new ideas. Specialists know their craft well and can limit your headaches down the road because you can trust them to make great decisions independently. Having a product that has positive externalizes (carbon reduction in our case) helps keep employees excited about what we’re all building.
— How do you manage growth vs sustainability?
Burnout is a risk for any startup. But growth while the window is open is also really important too. Having KPIs and goals helps keep the team focused on what they can control. The leader’s role is to push the team to achieve something that may feel just out of reach while also managing relationships of investors and stakeholders.
— What are the biggest challenges for the Evolve team?
By definition, in a startup all resources are scarce. The challenge is always about doing more with just enough resources. This is why rapid lean testing is so important — you don’t want to overspend just to find out it was the wrong path.
— What advice would you give to other founders?
Mental health is important. Eat healthy. Get a workout. Get some sleep. Doing this will enable you to ride through the highs and lows without the extremes.
— Have you been or are you part of a corporate startup program or accelerator? If so, which ones and what have been the benefits?
Urban-X (Brooklyn, NY).
— Anything else you’d like to share?We’re thrilled to win the “Grind Startup of the Year” award. We see a new wave of companies that are using capitalism to unlock benefits for society. Carbon reduction is the next trillion dollar industry and startups have a huge role in this!
