Hayden Wood, CEO & Co-founder of bulb, one of the UK's fastest growing renewable energy suppliers, talks about the business of renewable energy and what's to come in the transformation towards sustainable energy.
Listen to this episode now:
Read the transcription:
[0:22] Maiko: In today's episode, I'm joined by Hayden Woods, co-founder and CEO of Bulb, a company that, a startup that became one of the fastest growing energy startups in the UK by providing a really good customer experience, and also renewable energy to its customers. And you managed to attract over half a million customers so far, really focusing on customer experience, focusing on unconventional marketing methods and on sustainable energy. It's really good to have you here, Hayden, and thanks very much for joining.
[0:53] Hayden: Thanks very much for having me.
[0:55] Maiko: Thank you, I want to start with the first few days of Bulb, or before the company even existed, what triggered you to start Bulb? Was it the frustration with existing energy suppliers? Or was it the need to promote sustainable energy? Or both? What was it that made you start this?
[1:14] Hayden: I guess it was a mix of all of those things. I was working, I used to be a management consultant and I love that job, I did that for about 10 years and I was working with one of my clients who is one of the big energy companies. And I'd never worked in the energy industry before and I was just really shocked, and I guess, upset about what I saw from sort of working with those companies. Things like renewable energy being treated as a premium product, and companies making higher profit margins on that than on conventional energy and bad customer service being given to people, bad jobs being created for people, jobs that weren't rewarding or helping people learn. And so, yeah, my co-founder, Amit, and I just was just so intrigued by that problem, and how we can make it better and, and we began to realize how important energy is in people's lives and how important a contributor is to climate change. And that was just, yeah, we just couldn't, couldn't not work on it, it was irresistible.
[2:22] Maiko: All right, very interesting. So, it came through opportunity you discovered in your job way back then and said, okay, I want to pursue this?
[2:30] Hayden: Yeah, exactly.
[02:32] Maiko: How does somebody start, like somebody that comes out of a job, how do you start an energy company? I think, maybe, can you explain to people that maybe are not in the business, don't you have to build a bunch of windmills and put solar panels somewhere? Or ow does the business actually work, how do you start out?
[2:47] Hayden: Well, it's tricky. So, well, if you, you know, you get electricity and gas supplied to your home and there's a few stages in the value chain that you have to go through in order for, as a consumer for you to receive that service. So, someone's generating the electricity or processing the gas and, there are companies that do that. So, there are generator companies that are, they own wind turbines or gas power stations or solar panels that are producing that power, then there's the second step is that there's a network that's needed to bring that power from the place where it's generated to your home. And then the third step is that there's a, I guess, you call it like a retail relationship, so there's a supplier that the consumer has a contract with, and that supplier is responsible for supplying them with energy and measuring how much energy the customers are using, and then sending bills and providing customer service to those customers so they can pay for their energy and manage their accounts.
[03:54] Hayden: And the traditional view on utilities is that, you know, you'd have these vertically integrate companies that would do the first thing and the third thing, so they would own the generation, and they would do retail. But now there's lots of companies that just do the third thing, that's what Bulb does. So, Bulb is an energy supplier, we purchase energy from independent renewable generators, and our, sort of, wholesale procurement function does that. And then just like all energy companies, we use National Grid to transport that energy from the generators to our members’ homes. And then what Bulb does is, yeah, we sort of support our customers, so we provide service to them, and we give them a self-service tool and manage that building relationship. And that's what an energy supplier is and that's what we do.
[4:43] Maiko: What do you actually see, I think many customers actually switching to you from their current energy providers, what is their motivation to switch? Is it the customer experience? Is it the sustainability aspect? Do you get a lot of customers that just switch for price and then discover, oh, it's also a green energy? What is the motivation that get customers to switch?
[5:01] Hayden: Yeah, I mean, there's lots of different types of customers. Before Bulb started, there were some renewable energy suppliers around so there were two companies in the UK, Good Energy and Ecotricity, well, sort of very inspiring companies, but they'd been around for about 10 years and had signed up less than 1% of homes in the UK. And, yeah, I mean, that's not many people are choosing to support to get renewable energy if you've had these two renewable companies around for 10 years and doing that. So, clearly, there's a mix of factors. Price is a very important thing, price comparison websites are an important tool that consumers use when they're thinking about switching and as a supplier, and they talk mainly about price. And then I think there's a third thing as well, which is important to people, which is the quality of customer service. When we've, you know, we listen to our members and talk to them and one of the things they say is really important is, when there's a problem with their energy supply, they want to be able to get it sorted out quickly and easily. And no one likes getting stuck on hold and waiting for 15 minutes, listening to terrible hold music.
[06:15] Hayden: So, those three things are the, what we think are the most important factors for why people are switching. And to be honest, it's a mix of those three things. So, for some people, price is much more important for other people, renewable is important, for other people, they really want to feel like they can trust their energy supplier, and they get good service. And, I think we've just always tried to deliver all three of those things and the tagline on our website is, Simpler, Cheaper, Greener, which is kind of addressing those three things.
[6:47] Maiko: All as needs. A lot of startups are tackling behavior change or need their customers to change their behavior somehow and I think you'll fall in the category as well. I mean, right now, if I have another supplier, it's much more comfortable for me to just stay with them, unless I have a big issue of the price or any big issue of them. And the energy I get, the product I get, basically, it's the same or it looks the same, at least, I get electricity, my home, it's not much of a difference. So, how do you market such a product that I can't really differentiate between, besides what you tell me about where it comes from and the price?
[7:25] Hayden: How do we market it? I didn't, well, we just talked about what it is and the fact that, I think consumers are quite aware of the implications from their choices. So, people becoming much more aware of plastic pollution and the effect that the, you know, food consumption has on the environment and things like that. And I think that, it's quite, whilst everyone probably doesn't have a detailed understanding of how the electrons move across the grid, and how switching to renewable energy means that they're affecting the way energy is generated in the whole country. But people, I think, are quite excited about the fact that they could save money on their bills, they're not going to get ripped off any more on an expensive, so called standard tariff from their suppliers, and at the same time, so you know, protect the environment, by buying renewable energy. I think that's something that people find quite empowering and quite exciting.
[08:23] Hayden: And they our members often talk about, in a sense, it's great to realize that you have agency in this area, whereas, before people sort of didn't feel like that. And I think when you get that opportunity, and you reduce the friction for people in switching, then yeah, then they do take action. I guess one other thing to mention on this, is the importance of word of mouth and networks of people and people speaking about things. You know, there's a lot of people voicing concerns about different issues on social media and with their friends. And this is one of those areas where, you know, it takes a few minutes, and you can have a positive individual impact. And I think people kind of enjoy doing that as well.
[9:05] Maiko: What's your vision, right now you fit in quite into the actual energy supply system at the moment, right? But I think there's a lot of changes happening to that system as well. What's your vision of the energy supply system looking like in 10 years or something like that? Will it become hyper local, where people produce their own energy, and maybe Bulb is not even needed anymore? Because I have all my power like on top of my flat, or what's the vision, what's the kind of world that you're also looking to fit in or looking to be part of?
[9:38] Hayden: Yeah, we think energy is going to be completely different, which is really exciting. So, you're going to get much more energy generated closer to your home, closer to where you live, that might be actually in your home with things like solar panels, or your gas boiler, that's powering your heating, might have a unit inside of that produces electricity, then, because of the cost of battery storage is coming down so quickly, it's going to be much more economical for people to have batteries in their home. People will be driving electric vehicles around, those might be like electric cars, they might be electric bikes, but there'll be a big battery that they need for that, and that will be charged in their home. And it can be you know, they'll be discretionary when it's charged.
[10:31] Hayden: Not to mention all of the sort of, smart connected home things where your heating will only really turn on when you're there and the same for lighting. And so, that energy, sort of, ecosystem in the future, we think is a really exciting thing, because it will be better for consumers, it'll mean that people use less energy and it's less polluting. But it's going to be much more complicated and so we think that someone, in order to get that behavior, change that you just mentioned, we think that someone is going to have to make it simple and easy for consumers to make some quite complicated choices and decisions about how they use energy in their lives. And it's our hope that by giving people the right information, and making these choices, easy for people that a lot of people will choose to use energy in a more efficient way or in a more renewable way. And that's the role that we want to play.
[11:30] Hayden: So, we want to be supplying people with energy, but we also want to be helping our members make choices that could help them reduce their overall energy usage and reduce their carbon emissions.
[11:41] Maiko: Do you already see a trend to smaller and more local producers? Like also, maybe if you talk a bit about who you buy your energy from, is it just a huge company producing, having like thousands of windmills, for example? Or is it also the family down the road that has like 10 solar panels and the selling their energy to you? What's the mix there? And do you see any trend that's developing?
[12:04] Hayden: I think, so that, as we do buy from a mix of generators, whether those be homes that have, they're selling their energy through feed-in tariff or feed-in tariff administrator, whether that be, say, small companies or farms that have a bit of renewable generation on site, and they want to sell it into the grid. But then, you know, we've grown so quickly that there are also in order to find that volume of renewable energy, we're also supporting some very large offshore wind projects where we're just agreeing for Bulb to purchase all or part of the output of those fields. So, it's a bit of a crap answer, I'm sorry, but it is a mix of those things.
[12:48] Maiko: Mix of everything, yeah. What's your opinion on energy certificates or like the e-certificates? I remember working with the university and trying to convince them to switch to green energy and they said, it's much cheaper for us to buy certificates and keep up the current energy like, what's your opinion on that? Do you have anything that you can share?
[13:07] Hayden: Yeah. So, I think the certificates that prove the origin of where the energy comes from, are really helpful. And they're an important way that consumers can tell whether or not they're buying a renewable tariff or not. There's an interesting, so the way certificates work is that when a generator produces a unit of renewable energy, they, if they're authorized to do that, they create a certificate at the same time. And then those certificates can be bought by suppliers, like good energy, you can trust the Bulb, or whoever the suppliers are. And then when those suppliers sell electricity to a consumer, they have to retire those certificates. So, it's a way of putting a price on the renewableness of that energy, and we found the certificates to be a very helpful tool, it allows us to make choices around what types of renewable energy we purchase.
[14:11] Hayden: So, we have a lot of hydro generation in our mix and, you know, a lot of our members were writing in our community that they were concerned about the environmental impact of hydro, and we said, you know, don't worry, it all comes from what's classified as low impact hydro. So, these aren't large dams that are being built that disrupt fish and, you know, aquatic wildlife, they just run a river, of hydro plants, which have a much lower impact on environment. But it was, we could only prove that using this using these certificates. And so, we think that's a really positive important thing.
[14:44] Hayden: There's a second really, I think, really interesting thing about certificates is that the way they're used at the moment is for them to be totaled up over an entire year. So, this university that you were talking about might have used certificates, they purchase certificate for their total usage of energy through the year. But, you know, maybe they're purchasing certificates from solar plants that are only producing power in the summer months. So, at Bulb, it is really important for us that we match month to month, the amount of energy that our customers are using, and the number of certificates that we're purchasing, so there is a closer link between the energy that our customers are using and the generation that we're supporting.
[15:29] Maiko: All right, of course, Bulb is a for profit company, you're looking to make a profit with this and return money to your shareholders at the same time, you really have an impact for mission as well and you're really driven by that, that mission. Do you ever feel you need to, there's a trade off or a potential trade off that you're trying to avoid between like being a profitable company, or and making an impact on focusing really staying true to your mission?
[15:58] Hayden: Not really. So, we have, we're a B Corp, which is an important sort of certification, it means we've met strict rigorous standards for social environmental responsibility. And, but before we became a B Corp, it was very important for us that we make decisions that are right for our four stakeholders, really, the first one is our customers, the second one is our employees., third one is the environment and the fourth one is the company or the I guess, the shareholders. And I can't think of many times where we've made a decision that is bad for anyone, or that I can't think of anytime that we made a decision that's bad for any one of those four groups. And I think that, more often than not, the right decision is right, is that the right thing for all four. And so, we've actually, yet we haven't found it to be, that for there to be much conflict there.
[17:01] Hayden: We think that, you know, the more successful we are as a business means, the more we can invest in our mission, and better we are at progressing in our mission that is very, I was going to say, inexorably linked to the success that we have as a company. Now, there might be some other companies where it's much more of a conflict. I can imagine if you're selling, if you're making products that have a have, you know, they create waste or something, then you have it like, that they're in the direct conflict. But for us, we're moving energy, we're an energy company that's providing homes with green energy. That's just a very, we're very lucky, I think that they're so intertwined.
[17:46] Maiko: Do you ever feel there is something you could be doing right now to grow much faster, maybe acquire even more customers by not using sustainable energy, for example, or by not staying true to your mission? Is there any anything that you think that other companies that maybe, are not a B Corp are not driven by that mission would be doing? Or do you really think it fits in very seamlessly, all together?
[18:10] Hayden: I mean, so what, yeah, like, what would happen if we would to do that, if we were to not sell renewable energy, or if we were to deliver bad customer service, that you're just making, you know, short, you're sacrificing long-term value for short term gains, that's not, we make long-term decisions at Bulb, so we wouldn't do that.
[18:32] Maiko: So, I guess, maintaining that long-term focus, and also staying true to that within the team and building a culture that focuses on that long term.
[18:40] Hayden: Exactly. When you think about those four audiences, and you think, okay, what's important for the team, then you're not going to make these bad decisions that mean that all of the incredible people that have joined the team, have, you know, now are going to leave and your members would think the same thing. So, you know, why on earth would you do that? And it wouldn't, you know, as a founder, why would you do that, you would, life becomes a lot less fun then.
[19:05] Maiko: I'm talking to that, because obviously, you have some competitors that are really driven by short-term results, as well, some of them publicly traded that need to deliver quarterly results, and you know, might really be struggling to match their quarterly objectives. And I can imagine that in your culture, you're really focused much more on the long-term, right. But at the same time, obviously, there's always the question, you know, you might have short term objectives as well, right? Like, how do you really balance that against each other?
[19:33] Hayden: But I think that's a question about innovation, isn't it? And how much value do you place on making things better and coming up with new ways of doing things, better ways of doing things. And I think if you can take a long a longer-term view, rather than quarterly or annual results, then it means you can invest in new technology, you can invest in things that are going to maybe give you a return over a longer period of time. And I think if you have a track record of doing that, of delivering innovation, then shareholders or investors might begin to see that as well and value that. There are a lot of tech companies that haven't made any profit where they still have very high valuation. So, there are clearly investors out there and who do place value on that.
[20:22] Maiko: Yeah. Back to one of the topics we mentioned in the beginning, how you started out, was there any, you identified a problem that there was a really gap for a company like, Bulb, but what sort of testing did you do to be confident like, okay, this is actually something people need, or they do care about it? Did you do any testing? Or did you jump straight in and build a company?
[20:44] Hayden: Do you know, this is probably one of like, the biggest mistakes that we made, but we kind of got away with it, because we were lucky. But we didn't really test it at all, we just really believed that this was a thing that could be made better. And we just believe that if we made something that was simpler, cheaper and greener, that people would also be like, would be interested in it and switch to it. So, we didn't do any of the kind of like, fake, invent a product, but that isn't really a product and then get people to switch to it. Because you can't really do that, if you're an energy supplier. If your energy supply, you have to go through this really complicated, regulatory approval process and you have to build these really quite, sophisticated system, IT systems in order to communicate with other energy suppliers and other industry parties. And yeah, so we basically just went for it without doing any testing, which is, yeah, in retrospect, not the smart thing to do.
[21:47] Hayden: But we were lucky, and people were into it. And when people started switching to us, we kind of got away with it. But we still, but now we're much better at that. So, now we're much more thoughtful about when we introduce changes to our product or service, or begin serving these segments, we're very careful about testing, you know, going through user research testing and testing it with people and building a sort of simple MVP product, and then seeing if it gets traction, and then investing more in it later. But right at the start, we just, yeah, just went all in there.
[22:22] Maiko: Perfect. There’re quite some people listening, also looking to get into careers of impact and identify with your mission to spread sustainable energy. Can you speak a bit more about what the culture at Bulb is like? What kind of people you're seeking to attract and what kind of people you're looking to work with here in Bulb to work on a mission?
[22:46] Hayden: Well, what we like? So, there's a blog post that we wrote on this actually about what it's like to work with Bulb. And I guess there's three things, I would say, the first thing is that everyone at Bulb is, we really want to have a positive impact. So, that's one of the most important parts of our culture, is that everybody here is spending time and energy working on stuff in order for it to have a positive effect on our members and on the world. The second thing, that we, is really important to us, is clear communication, clear, straightforward, plain communication. And we see that as being the foundation of effective collaboration between people, and also empowering our members in order to make choices. So, if you kind of explain, to remember exactly what their choices are, and they make an informed choice, then you believe then, yeah, I'm making a good one. So, that's the second thing around communication and collaboration.
[23:51] Hayden: And then the third thing that we look for in our colleagues at Bulb is a desire to make things better and to improve things continuously. So, we don't really do big sort of, transformation projects at Bulb where we sort of spend ages doing something and then hope it has a result after a few months. We have this approach where we just every single week, we work on something and sort of improve it incrementally. And then we, you know, after three months, you can look back on the last 13 weeks and you can see that, God, we've gone such a long way just by making these small, incremental improvements every week. So, that focus on always trying to make things better at Bulb is really important. And that also applies, by the way, to ourselves and learning and helping other people learn. That's another really important part of what we like, but we kind of put that in the, make it better bucket as well.
[24:52] Maiko: All right. Yeah, you've definitely come a long way, also of that culture, you got more than half a million customers, those are not app downloads, but actually people paying every month for the energy. And as the last question, I'd like to ask you really about, what does the world look like in 10 years that you're trying to help create? What does the big impact, the global impact look like that you're trying to make happen here?
[25:20] Hayden: Boy, big question. Well, I think it goes back to a little bit about the, you know, the question that you asked earlier about the role of Bulb. So, I guess in 10 years’ time, we would imagine that, you know, individual carbon emissions for people are substantially lower than what they are today, because people are powering their homes with renewable energy, they are using methods of transport that no longer dependent on fossil fuel, so, that's, you know, also electric. People would have, I think people will have a much more tuned sense of the impact that they're having on the environment, with their actions in a non-oppressive way. But I think the people will just be a bit more aware of that.
[26:05] Hayden: And, you know, I really believe that Bulb is going to be one of the companies that helps people along that journey and makes it possible for people to change their behavior and have an individual sort of contribution to helping protect the planet. And for us, we have quite, I think, an optimistic view on this future. So, it's not like we're expecting everyone to be wearing a shirt sitting in a cold room, just in order to keep their energy usage down. We believe that technology will mean that we can get, you know more from less. And I think that's the really exciting role of an energy supply. Because you're there, we can not only have a direct impact, but we can also have an impact to sort of catalyze the sector. So, there's going to be lots of companies that I hope can benefit from Bulb's growth as well as, as well as our members.
[27:00] Maiko: I wish you all the best on that journey. And you've kind of come a long way and I hope you still go along the way and keep pushing for that mission. And thanks very much for joining us today.
[27:10] Hayden: Yeah, thanks very much for having me.
[27:11] Maiko: Thank you very much.