GridDuck: An Interview with Our Founder
“Companies kind of know they are being wasteful, but it feels like too much effort to change things.”
Every company has a story. Our founder Gregor Hoefter didn’t have the traditional entrepreneurial journey but he has always wanted to contribute something to the world. He isn’t afraid to fail, having once launched a tropical yoghurt drink that he doesn’t mind admitting was wildly unsuccessful. He toyed with importing coffee, macadamia nuts and Tequila before eventually landing on something completely different - tech.
GridDuck helps companies reduce their energy waste by using an intelligent monitoring system. We use the Internet of Things to hook up devices to appliances and machines, giving our customers data to make better decisions that benefit their business. It’s energy management for the 21st century, easily retrofitted into buildings from any century.
Here, Gregor explains how he got started and why he wants to improve on GridDuck’s design, to offer customers a solution that is increasingly sophisticated.
Beginnings are endings…
Many years ago, I tried to launch a yoghurt drink. Let’s just say it wasn’t wildly successful. We did get it into just over 100 cafés around London, but then the producer stopped making it. I then spent some years working for some big corporates in tech and telecoms. I helped develop some apps, got really good at creating slides and learnt a lot about product development, sales and marketing. But I came up against the same two obstacles again and again - hierarchies and politics. I was at T-Mobile when I was offered a generous redundancy. This is my chance, I thought.
So, the story of GridDuck begins where another story ends. When my corporate life finished, I continued the entrepreneurial journey I’d begun as a younger man. I had some experience in marketing, a bit in PR and some in finance. I had different experiences, too, unrelated to the office.
When I was much younger I worked as a social worker in Mexico. I loved it, and I went back a few times to travel the country. I even had an idea to import Tequila to England. But I’d remember seeing some drunk people and it made me think, ‘I don’t want to be the guy who gets them drunk.’ I realised that I didn’t want to work in sugar, oil, tobacco or alcohol. It confirmed that I wanted to try to do something with a societal benefit. I am by no means a green apostle, but my kids will tell you how much I hate food waste.
In one of my last projects for T-Mobile I was asked to create a smart home proposition for Eastern European countries. I developed a relationship with a Portuguese software company that had all the hardware lined up for installation. I could see that hardware prices were coming down every year but that cost-saving had not filtered down to businesses. Businesses would be paying a premium for the same type of solution homeowners got for less. My insight was that smart home technology would be ideal for business. I thought, here is something I could do and it has wider benefits for the planet. I remember speaking with many companies in the field, including OpenEnergi and Kiwi Power, who helped us define the vision: a system for companies to manage their appliances in line with electricity supply and energy prices.
Looking for problems we could solve
As more renewables come on stream, there is also more intermittency. The sun shines when it shines, the wind blows when it blows. Buildings have a lot of inertia, so nobody notices when heating or cooling appliances are briefly switched off. That’s the cheapest way to manage this renewable intermittency - no need for expensive batteries or polluting diesel aggregates.
Hence our name - the California Duck represents the energy transition. So we started building a prototype for demand response, a market mechanism to pay energy users to temporarily reduce their energy consumption. As we were nearing completion the National Grid pricing for these schemes dropped dramatically. So we had to look for other problems we could solve.
(early demand response prototype - reacting to changes in grid frequency in under a second)
An energy consultant saw us pitch at an event and told us lots of companies don’t switch off their appliances and machinery overnight. We couldn’t believe it. We assumed that had been done. As it turns out, companies waste huge amounts of energy, but can’t find cost-effective ways to cut it.
(early trial kit for reducing energy waste)
GridDuck: a cleantech company targeting businesses
GridDuck’s entrypoint into the market has been to use high-volume consumer hardware developed by third parties for businesses. This is cheaper than using bespoke, low-volume B2B hardware. When your profit margins as a business are low, high-price bespoke hardware often makes it too expensive to invest in. If your savings are likely to be 10% in energy costs, it’s natural that you’d question whether it’s worth spending £1000 on a piece of hardware and another £500 for an electrician to put it in. But when it’s going to only cost a few hundred pounds, people are more likely to give it a go.
Our manufacturer partners provide hardware to our customers for less. What we offer, though, is the software that enables you to see how you are using energy. It’s an interface with all your data in one place and it gives you many ways to analyse it. Ultimately, we’re a software company that offers our customers a mix - the lower-cost, third-party hardware and our interface developed in-house. We use technology enabled by the advent of the internet. Many meters still need to be read manually. It’s like comparing the smartphone to the old Nokia.
GridDuck is a team effort
I am lucky to have a great team. I got introduced to some really great people early on. Richard, our chief technology officer, joined me in 2016 to create a prototype. He was followed by Alex, our chief product officer. They were looking to do something entrepreneurial, so it was like a meeting of minds. Between them, they have designed the dashboard and the website; they connected all the wireless devices, the database and our automation engine. They were joined by Hugh, who has created our app; Miles who works in sales; and our marketer Leah. As a team we decided that we didn’t want to make something in an ivory tower, and present it to the market and keep our fingers crossed. We always go and get feedback.
(The 2020 Rushlight Energy Reduction Award, received from Prof Sir Ian Boyd, marine and polar pioneer)
Innovative solutions to reduce carbon
Every entrepreneur starts by solving problems and spotting opportunities that others don’t. We believe our proposition is unique. There are many new suppliers working to develop low-carbon technologies - EV chargers or batteries, for example. Their product is normally a piece of hardware that comes with an app. You can use the app to charge the battery, etc., but these are all solutions for the hardware. We look at the bigger picture. I think of it as horizontal. We collect two different pieces of hardware and see how they interact with each other.
When people think of solar panels and E-pumps and even EV chargers, most think of homes; very few people think of businesses. But businesses consume as much electricity as homes do. We are now working with businesses using renewables on site, to see if we can maximise the renewables and save energy used by the grid.
In many ways, our clients and partners are more exciting than we are...
One of our clients is an apple farmer who has a chilled warehouse with solar PV on top. He’s thinking about whether he can use the energy of the sun to overcool the warehouse during the day and then leave it at night, allowing the warehouse to be cooled by 100% renewable energy. He believes there is a massive opportunity for companies or anybody with some roof space to do that and also to eventually trade excess energy with each other. One of our partners already works in peer-to-peer trading, a growing and exciting space. We’ve been working closely with GenGame, a gamification specialist pushing hard to develop our technology further. We are now experts at integrating batteries, EV chargers, solar panels and the like.
Don’t think of energy as a fixed cost
For most people, energy is a line item in their profit and loss statement: similar to telephone costs and photocopying. It goes up and down every year but it’s more or less the same. One day they might get a phone call from a broker to tell them that they can cut their tariff by 10% and they sign up to that and maybe it cuts it by 10% for a year and then it goes back up to what it was before. So they don’t really engage with it. It’s the same with your phone. What we actually do is find customers who we think are more engaged, who have high energy costs motivating them to find a solution.
There needs to be more awareness about how companies could cut energy waste and save money. There are solutions out there that don’t cost the earth. I think there are companies that kind of know they are being wasteful, but it feels like too much effort to change things. A lot of people get a monthly electricity bill as a piece of paper in the post and they don’t understand what’s going on. They see some numbers, measurements in kilowatt hours, and they just pay it and put it away in a folder.
For some businesses, energy is really important - certain types of farms, for example, really watch their energy consumption because it’s their second highest cost after labour. Horticulture farmers’ profits, for example, get squeezed by the supermarkets. Retail is quite energy-intensive, as is hospitality. Manufacturers have some processes that use a lot of energy, so they really need to keep track. There are quite a few sectors that have low margins and use a lot of energy, so we help them make a saving when they thought they couldn’t and this has a big impact. This is satisfying and motivates us to keep going.
We are hoping to help some of our customers shorten the payback of installing renewables, because for it to be mainstream, we need to cut the payback from five to 10 years to more like three to eight. If you multiply that by the number of potential businesses, you can have a big impact and significantly reduce our reliance on fossil fuels. While we are focused on the UK at the moment, the same challenges apply in other countries and we’ll be looking to expand.
On a path of continuous growth
For many years, money was a challenge. Like any startup, we survived on a shoestring. We did get some great government support - both financial and advice. We have some really great investors now; they have helped us to get on a path of revenue and growth. There was a dip after Covid, but we are coming out of that. We’d like to use good case studies in a range of sectors to demonstrate what we already know - that our monitoring and automation system can help businesses cut down on waste, reduce carbon emissions and save money.
We’re also always looking to improve. The first stage is to supply the hardware to manage all the appliances in a building and use that data to make decisions. The next step is to be more sophisticated on how those things are managed. Perhaps you could set a rule for a thermostat to come on and off at certain times. Meanwhile, new technologies are being introduced all the time and we would like to start integrating with these, or give others the opportunity to integrate with us.
Even more ambitious is using AI. When Google Nest launched for the home market, it was trumpeted as a device that could learn your routines. We can build something similar for companies. For example, we might know that pubs refresh their drinks fridges on Fridays and Mondays at 10am, and we would know how long it takes for the drinks fridges to cool down. We can design it so that a drinks fridge instinctively gives people what they want - a cool beverage - but with minimum energy consumption. That’s quite a big innovation.
Gregor Hoefter is the founder and CEO of GridDuck. It’s his mission to help companies reduce their electricity bills and carbon emissions.
To find out more about how GridDuck can help you to save, schedule a quick and friendly chat with Miles today.