Startup Sessions: How Jeroen Burks, CEO of Blockheating, deals with uncertainty and failure
Building a startup is not simply about coming up with a great business model. There is much more to it. Today: Jeroen Burks, co-founder and CEO of the early-stage startup Blockheating, stresses the importance of always being flexible when searching for your product market fit.
On his bedside table is the bestseller management book Ondernemen is een ABC’tje by Michiel Muller, the unstoppable entrepreneur who made national headlines with Tango, Route Mobiel and Picnic. “I love that book, because it is about daring to leave the safe harbor (A) to try something new. What that is, and how to get there, is precisely the fun of doing business. Even if your trip (B) is inconclusive, it will often open your eyes to new goals and new business opportunities(C).”
It is not surprising that it is precisely this book that appeals to Jeroen Burks in this way. His idea to heat greenhouses all year round by using flexible residual heat from computer servers is also all about hopping from one point to another, with ever-changing questions that arise. For example: how can the heat from the servers quickly and easily reach 60 degrees Celsius? How can this be done in a cost-effective way? But also: do local land-use plans allow horticulturalists to place servers in mobile containers on their land?
The latter, in particular, is an important issue for the physicist. “Because growers do not want a data center in their greenhouses, we aim at creating mobile containers. But if horticulturists cannot store them because of local land-use plans, the process of using these containers will be very time-consuming as it requires changing local zoning plans.”
One municipality already indicated that it did not know whether it was actually allowed. And even though this is not a definitive rejection, it still is an uncertain factor for developing his business model. How does he deal with this?
“For some reason, I am not worried yet. Alternative energy sources carry positive vibes. Certainly now that it has been decided that the government will stop producing natural gas by 2030, I notice people are actively looking for alternatives, and are taking our option more and more seriously.”
“What also helps is that we already have proven our method in some way: we currently heat a small commercial building of about 400 to 500 square meters, not with water, but with warm air from a data center. This is a kind of interim solution, but it does prove that the re-use of heat from a data center makes sense, that there could be a market for it.”
How did you actually come up with the idea for Blockheating?
“The idea for deploying residual heat arose about three years ago. I supplied hardware for data centers and noticed that more than 90% of the energy required to generate crypto-currencies is discharged to the outside air as quickly as possible. By returning the heat to buildings, it is still meaningfully used. We successfully applied this idea to a house, but the fact is that there are few buildings with a large need for heat in summer. Luckily greenhouse horticulture offered a solution. They need heat almost all year round. We will soon be testing a version with 80 servers and by the beginning of winter a container with 800 servers should be available.”
You are entering an uncertain market like many other startups. What tip do you have for other founders to deal with uncertainty?
“My main advice would be: Enjoy the search for product market fit and don’t get demotivated if you don’t find it right away or experience resistance. Anyone who defies the status quo will encounter headwinds. A lot of headwind. For example: When I told a horticulturist last January about our other solution using data centers that would blow the warm air into his greenhouse, he almost got angry. He really didn’t want that. It seemed too drastic for him. Although his reaction was an outright rejection, for me it is precisely these conversations with stakeholders that are part of the journey of solving questions that no one has answered yet: Why are we doing this? Could we do it better because our customer wants it different? I like to look at a problem from all angles. Even if that means we have to go back to the drawing board or start all over again.”
What experience have you had with failure, what lessons have you learned and what can other startups learn from this?
“Before Blockheating, I ran another startup in the printing business. Our mission was to make the printing world more transparent. To achieve this, we provided a software solution that enabled printers to cope with temporary ups and downs. In exchange for these efficiency benefits, the customer received a better price and insight into the cost structure of his assignment. On paper, it looked like a promising solution, but we couldn’t get it off the ground. After two years we pulled the plug. This experience really taught me that you should analyze a market thoroughly before you enter it. When trading in the printing market, we discovered too late that this particular type of market was running on large volumes and low margins and that only the large companies could be successful. With Blockheating we have looked more thoroughly at feasible markets. That’s why we don’t focus on heating houses, for example; that’s far too complex. We deliberately start small, with a defined target group: horticulturists who we know need a lot of warmth in their business operations and who we know are innovative by heart.”
So is that what keeps you motivated with Blockheating? What do you think will make you wake up one day and decide that it’s time to move on?
“When we fail to reach our targets. Our biggest challenge for the next years will be: How can we cool the servers, and make sure the waste heat is still useful? How can this be done in a cost-effective way? The heat from the servers can be used to supply water of 60 degrees Celsius. This is considerably lower than residual heat supplied by the industry, but more than sufficient to heat a greenhouse. But even if we manage to achieve this, our idea is only viable if the horticulturalists actually buy it. If we do not find a paying customer and a working solution within two years, we have to start asking ourselves if it makes sense to continue. You have to be businesslike. No matter how hard and annoying the outcome may be…”
Finally, do you think it’s true that anyone can be an entrepreneur?
“Well, firstly, not everyone is cut out to be an entrepreneur. If you want a secure live and immerse yourself in simple trade, don’t take that as a push towards entrepreneurship. But if you’re willing to accept that you are constantly working with uncertainties and half-hearted assumptions that you hope are correct- just because your whole heart and hard-earned pennies are in it, then maybe it is a good and interesting way of living…at least for me it is.”
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