This is a guest post by Simen Fure Jørgensen, co-founder of Otovo.
Solar power is one those technologies that keep getting better and cheaper all the time. Every year the cost of solar power drops, so solar energy becomes competitive in new corners of the world.
Consumers who install panels on their roofs can enjoy clean and reliable energy for decades, while paying less than they would when buying power from the local grid.
This holds true even as far north as the Nordics. Still, solar energy has yet to take off here. Why, you may ask, when it seems like such a good thing?
The first reason is that too much technical insight is required from the customers. They should not have to read up on all things solar to get panels on their roofs.
Then there’s the big up front investment cost. Somewhere between €5000 to €25.000 may go into a project, to be paid back slowly over the next 10 to 15 years.
Solving the problem of solar energy
Otovo is the company that aims to eliminate these obstacles and make solar power mainstream in the cold north.
We are simplifying and reducing the number of decisions needed to be taken by our customers. We are the experts, and our job is to make the purchase easy.
The upfront investment will be replaced with a low, monthly subscription fee. Easy math for the customer and we handle all the financials required to set this up.
So far, just five months after starting up, this plan looks like it might work. Otovo have enjoyed a wave of support, goodwill and customer demand that has ensured a good start for our company.
How to scale from a promising beginning to a durable business?
We know that we need about 5000 installations per year to be a healthy company in the future. 5000 is a very large number when you start from nothing. That is why we made a 10X rollout plan. Going backwards from 5000, we figured that we could probably manage to scale from about 1000 to 5000 installations in a year. Going back another year, we could probably scale from 100 units to 1000 in a year as well. Selling and installing 100 roofs seems possible in the first year.
Thus, our 10X rollout plan: To sell and install the first 100 units in 2016, then scale to 1000 in 2017 and 5000 in 2018.
Keeping the right perspective
A 100-1000-5000 rollout plan might seem simplistic. It may or may not be realistic. It’s very useful none the less. The plan helps us put everything into perspective. It guides us to put in the right level of design and development at the right time.
If we had been thinking only about building for 5000 installations per year, we would have been prone to overengineer our systems, putting in features and capabilities we will not need for years. We would probably delay launch until next year just to get everything right.
On the other hand, thinking only about the short terms goals, would probably bias us into the opposite: Simplifying too much and not planning ahead to the volumes that must come. While premature building risks building too much of the wrong thing, building too late turns into slow service and customer experience nightmares.
Launching and learning early
Thinking in terms of 10X allowed us to launch our service just days after starting the company. A fresh looking landing page with email capture was all we had. Everything else was performed manually, behind the scenes. This kind of manual work is way too expensive at scale. With just a handful of customers, however, the learning we had in those early days was highly valuable.
We got a lot of insight from customer interaction early. We could design our solution to answer their questions. More than that, we were also in a position to sell and deliver to our first customers. This allowed us to learn a lot about our value chain, about the regulatory processes and the ins and outs of solar panel installations.
As we see traffic and sales pick up, we see each bottleneck in the system clearly. It might be that our conversion rate is not good enough, that customer’s are not satisfied with the information and service they get or that installations don’t get planned and ordered in due time.
Otovo just passed 100 sales, but we know we have to keep working hard to improve. Things might seem manageable now. In a year, however, every problem we have not solved will be 10 times worse. Time to get back to work!
This Wednesday we challenge the experts to give their recipe for scaling. What are the secrets to rigging the company for scale from day one? Find out at Startup Extreme Conference