At a time when global warming was an emerging concern, geo tapped into an expanding green energy market, to become a market leader in the field of smart energy technology.
Turning the saying ‘out of sight, out of mind’ on its head, geo (which stands for Green Energy Options) pursued their mission of transforming every household into a ‘smart home’ by making energy visible, with devices that monitor daily energy usage and cost. Today, they offer a portfolio of innovative products that not only help their customers to reduce their carbon footprint but also save money on their energy bills.
Today, with twelve years of business under their belt, geo has developed more than 25 products and sold upwards of five million energy monitoring systems. It hasn’t always been smooth sailing though. CEO and co-founder Patrick Caiger-Smith opened up about some of the challenges that nearly threatened the future of the company in its early days. Read on to find out more.
The risks and rewards of tapping into an untouched market
One of the fundamental stages of starting a business is developing a USP that sets the product apart from the competition and offers a solution where there is demand for one. Sometimes that means tapping into otherwise untouched markets – a resolute approach that geo took when they made the bold decision to develop a brand-new product in a brand-new market.
Explaining the launch of the business and the process they went through to hatch a unique concept, Patrick tells us, “conventional advice for starting a business would be to look for new products in existing markets or sell current products into new markets. Our risk was to do both – to create demand for an innovate product hitherto unknown.”
At this time, the general public was yet to understand the true threat of global warming and the effect that fossil fuels, when used for generating energy, have on the planet. Not only was helping the environment at the heart of their vision for geo, but for the business to be a success it was essential for them to educate their target market on the need for green energy solutions.
“We started the company at a time when global warming was only just beginning to be recognised as a major threat to our life on this planet,” explained Patrick. “Changing people’s attitude to energy conservation and sustainability became a key driver for founding the business.”
Bold decisions can be the make or break of a business
Patrick and co-founder Simon Anderson both left well-paid jobs and worked for free for two years to pursue their business venture, so geo was a gamble they were counting on paying off. The trouble was, amidst the global financial crisis of 2007, funding wasn’t easy to come by. In fact, there were times when it looked doubtful that the business would survive.
Patrick recalled one of the biggest risks that geo took to establish the business and advance it to the next level:
“We took on our first big contract without having the funds to fulfil it. If we hadn’t obtained funding in time then it would probably have been curtains for the business, and it wasn’t easy in the middle of the global financial crisis.”
Despite this hurdle, geo went on to become the first company in the UK to obtain a full-scale, government-backed loan to finance the contract – a contract which pushed the business from pre-revenue to revenue generating. Without making this decision to take on the contract before securing their funding, it’s possible that geo wouldn’t have become the success it is today.
Quick reaction time is crucial in a growing market
What Patrick and Simon have found since entering the world of tech, is that a quick reaction time is critical. The industry is ever-transforming and a delay releasing a new product could result in a competitor pipping you to the post, or even advanced technology rendering it instantly out-dated.
“We’ve punted millions developing products which we believed had a market, and were genuinely innovative and novel,” says Patrick. “The development timescales of 12 to 18 months mean that not taking the risk to produce them could result in you missing the market and there’s a ‘first mover advantage.’”
Business is all about trial and error
Most entrepreneurs start out with a clear path in mind for their business. The reality, on the other hand, is that you’ll probably reroute, take a detour or even change direction all together before reaching the end goal. Plan A isn’t always going to be the one that drives the business to instant success. Sometimes you’ll need a plan B or even a plan C to fall back on – it’s all about trial and error.
Patrick explained that one of the biggest risks of introducing innovations into a new market is having to set up entirely new installation services, production lines and support operations. This is because if the product isn’t a commercial success, it’s a huge loss of investment and time.
In order to avoid failure, Patrick recommends that you must first acquire sufficient interest and demand from the target market. “When I look around at the competitors that failed, it has mostly been because they failed to get commercial traction,” he explained. “Even if it takes your business on a slightly different journey to the one you ideally imagined, being stuck with no revenue (or subscribers to a service in the case that they aren’t paying) is lethal.”
Setting up a new business is full of risks and challenges, so it’s worth having the appropriate cover in place to keep things running as smoothly as possible. Start-up business insurance is specially tailored to protect new businesses from the common risks faced in those early days.
The geo story is a model example of how taking risks can bring rewards for a business, and how taking risks can also put the company in jeopardy. Patrick and Simon knew that entering a new market with a new product and no accurate gauge on the commercial demand was a huge gamble. Much like they knew that taking on their first contract without adequate funding could result in the collapse of the business. Though perilous, these gutsy moves propelled the business into the forefront of their market.
“Five million systems later, we can certainly claim to have made an impact.”