By Nick Travis, partner at Smith & Williamson
This article was originally published in Smith & Williamson's Enterprise magazine, a thought leadership publication for entrepreneurs and growth companies.
You can download this issue of Enterprise here.
Peter Bance’s ‘lightbulb’ moment came after he had already set up and advised several energy businesses. He saw that leading investors were keen to back software-based start-ups, but not in the energy sector. At the same time, they were investing billions into renewables.“No-one was investing in the intersection between smart digital technology and the physical world of green energy. I knew that there was an opportunity here to create a really global business where software meets renewable hardware.”
Origami was the result: a powerful technology platform designed to help energy companies link energy markets to anything that uses, stores and generates power. Origami’s real-time technology provides the time-critical visibility, fast decision making and automatic execution necessary to enable its customers to thrive in the rapidly evolving energy sector.
Peter had long been involved in businesses that made the world a better place, but also to make money: “it’s a career bet I’ve made” he says. He believes the world is increasingly coming around to his way of thinking, recognising business goals and ethical or environmental goals are not incompatible.If anything, he argues, they are mutually beneficial.
His first entrepreneurial venture with a clear purpose was as the CEO of a distributed energy company, creating mini power stations inside home boilers. “It was a clever piece of electro-chemistry that helped generate heat as well as electricity. It powered your hot water and central heating, gave you electricity, powered your lights and appliances in a more efficient way. It saved money but also reduced carbon dioxide emissions.” He took the company public through to a stock market listing on AIM in 2004, and the business is now worth over £600 million.
He was hooked: “It was an amazing experience, raising money, pushing the business forward. I made lots of mistakes, but knew it was what I wanted to do.”
When he started at the company, the technology wasn’t just early stage, it was still “in a beaker at a university” – he was employee number five. It was about far more than monetising a product.
He had to create a product from the science, find a market for the product, sell it and then grow the business. “It was a massive rollercoaster with all the ups and downs. The extreme highs and lows are addictive. I loved that entrepreneurial journey, but particularly because it was a business with a purpose.
I knew that if it succeeded and we deployed it at scale round the world, we would cut carbon emissions and help consumers make huge savings on their energy bills.”
That, for Peter, is the magic formula. If a company is commercially successful at scale, it can achieve something great for the world.
After taking a much-needed career break, he saw his next big opportunity during a spell working as a consultant for Octopus Investments. Octopus is an active venture capitalist group and significant investor in renewables: “I saw there was a move to clean energy, but that unless it was powered by smart technology, it wasn’t going to work nearly as well.
The rational businessperson in all of us knows that going green in a smart way is far cheaper than going green in a dumb way, by a factor of ten. So, I decided to build an ambitious company which aimed to sit at the intersection of a disruptive software platform and the physical energy world – that business became Origami”.
Octopus helped bankroll Origami in its early days, leading a seed funding round of £4 million in 2014. Initially, Peter hired a skeleton crew and it bore the hallmarks of a tech start-up - zero salaries, lots of outgoings and borrowing resources they needed to get early customer traction and start doing some development.
In the last five years, he says, it’s been about the ‘fog clearing’ – navigating his way through the uncertainty of a business finding its way in the world, finding the right market:
“If we want to accelerate the green revolution globally, what is going to be the best thing we can do to make it happen?”
This has meant some changes along the way: “The most valuable bit of Ocado, is the fact that it offers its technology platform to other online grocery retailers” he says. “This makes way more money than its own supermarket, and that’s what Origami aimed to do. We quickly realised that the best thing to do to really make a global impact was to offer our technology platform to energy companies across the world.”
Naturally, the business has seen some challenges. Peter says that many of those challenges centre on simply staying afloat as a loss-making company: “the nerve-shredding journey of seeing a company through to profitability”. To do so requires keeping people believing in the story when there’s a sea of red ink on the financial reports: “The numbers don’t tell the story, so you have to convince people that you’re beginning to succeed.”
Building the right team at the right time is also hard and Peter is clear that he’s made some mistakes along the way. The right team at the start isn’t necessarily the right team to take the business forward and he has had to change a significant portion of the leadership team to get Origami ready for the next phase of growth. That has been very painful at times.
He adds: “The world of energy is dominated by gigantic companies. They’ve been around for 100 years and they think they’re going to be around for 100 more doing the same thing. They’re not. But the challenge for a fast-paced technology group is that we’re selling to slow-moving giants. If you’re trying to convince a multi-billion dollar company to ‘bet the farm’ on your clever piece of technology, that’s a massive challenge.”
Five years in and he’s built a leading technology company in the energy sector in the UK. Having secured a foothold in the UK with the subsidiaries of global giants, Origami is now building on those foundations to go global. It will also continue to invest in its technology platform.
For Peter, a blend of scientific and commercial know-how has been invaluable in his entrepreneurship: “Unless you understand how to translate the technology into a living breathing commercial enterprise, you’re not going to succeed as a CEO. You know you’re either going to focus on sales and completely ignore the product or you are going to be fascinated by the science and completely ignore the business imperative to sell stuff.”