Post Category → Startups

Why be transparent about money?

I’ve been super transparent lately about a lot of things — perhaps to a fault. In particular I’ve been sharing a lot of specific numbers around money. The live financials for my business are available on a public dashboard. I wrote pretty openly about how I paid my bills over the last few years. I walked through the painful details of raising money for my solar startup and then shutting it down. All of this lead a few people — including at times myself — to ask, um, why am I doing this?

A few people have asked me why I do it. I’ve also had a few people talk about others who publish their financials — not know that I did too — and criticize it. Calling it bragging. I can see how some people might find it off-putting. Particularly when you have some entrepreneurs who do it solely to give themselves a public high-five on how much money they’re making. But I think the best answer to this is a commitment to transparency through both the ups and downs. It is annoying if you’re selectively transparent, only publishing the details about the things that work and sweeping the trials and tribulations under the rug. It’s the same problem we have with Facebook and Instagram giving us a false impression that everybody is living a happier and more interesting life than we are. Our social streams are filled with carefully curated snippets of the best parts of people lives. People rarely share when they’re bored, or lonely, or snap a selfie of themselves wallowing in self doubt. I hope that I’m doing a decent job so far of sharing both the good and the bad, but it’s something to constantly pay attention to.

This wasn’t an original idea from me. I was inspired by the folks at Buffer, Keen.io, Baremetrics and several others.

But here are few of my reasons for transparency:

Everything is more interesting in the context of real numbers

Language is imprecise. When people or companies blog about strategies or tactics that worked or didn’t work, it’s very hard to know what that means and if it’s relevant to you. In the context of real, live numbers these topics become concrete. This action added X in monthly recurring revenue, this strategy saved this many cancellations. It’s honestly just a better story.

Transparency is a marketing edge

Most people are very private about their finances and real financial numbers are a little bit taboo. Blog posts with that kind of data are just juicier than the same content without it. The first post, where I laid out the origins of my micro-SaaS business and introduced the live dashboard, received about 1,000x more traffic than any other post I’ve ever written.

Transparency gives you just the right amount of credibility

Neither too little nor too much. If I say something, and someone thinks that it’s BS and would never work, they look at the real numbers and think, well maybe this guy knows a thing or two and isn’t a total moron. On the other hand if I say something and someone reads it and thinks it’s the most brilliant strategy they’ve ever heard and they should abandon everything and prioritize it. Well, they can look my numbers and say, well this guys isn’t exactly making millions so maybe we should take this advice with that appropriate sized grain of salt.

I think this is easily the most important benefit of transparency. The world is full of people who eke out a bit of money selling scammy schemes claiming to make you millions. Transparency is the solution to credibility in an increasingly opaque and anonymous world.

The moment people think you know something there is a temptation to try to start educating and to sell that education. There’s always endless demand for it. It’s easy to fall into it. I’ve caught myself several times thinking I should start selling ebooks, courses and consulting and how it easy it would be to fake it til you make it. Publishing my numbers keeps me honest.

As internet platforms make it ever easier to publish and sell ebooks, webinars, online courses, it becomes more and more difficult to filter out the real stuff from the scams. Without transparency there is some risk, or at least some small nagging doubt that you’re being had.

When I think about even true thought leader superheroes writing about entrepreneurship there’s always this nagging question in the back of my mind. Did they ever actually build real businesses that actually made profits?

Yea maybe they have obviously become very successful. But what if it’s built on bullshit? It’s not hard construct that scenario. I don’t know from first-hand experience, but I think if you can bullshit your way to a best-selling book and start collecting big speaking fees it’s probably not that difficult to translate that momentum into further success. You get invited to advise and invest in some of the best startups and voila, now you’re a validated success story and people eat up your advice.

And it’s so easy to fake it. I know because when I was really struggling with SolarList — incinerating my savings and racking up credit card debt — people were always confusing me and the business for a big success and assuming I was crushing it. An Angelist page, a shiny website, a well-produced video and some software that works is all you need to convince the vast majority of people that you’re an inspiring and successful software entrepreneur. Throw in a solid beard for good measure you’ve got all the credibility you need.

Transparency — particularly the third-party verified variety like my dashboard, which is connected directly to my payment processor — eliminates all those questions. If some day I become a big success, everybody will have real data on my (is humble right word?) origins. And if I turn out to be a big failure, everybody will know what is was that I squandered.

Struggling

I’ve been struggling lately with what to do next in 2015. In 2014 I had mostly to choose from a limited selection of hard choices. We had to make the decision to shut down SolarList. I then had to find a way to get back some of the enormous amount of money I lost on the project. I spent a good chunk of the year turning my side project into a full time income and building an ecommerce/startup consulting practice. In 2015 I’m very slightly moving up Maslow’s hierarchy of needs. My safety and (largely financial) security are in a decent place. My attention is shifting (back) to things that maximize my ability to do something that matters in the world. Systematizing the things that make money is increasingly freeing up more and more of my time, leaving me to figure out what exactly to do with it.

At the same time I’m in Chiang Mai. A digital nomad nexus filled with people doing unconventional things with their lives. Everyone you meet just slightly amplifies the feeling that literally everything you can do with your life is on the table or at least worth considering.

I found myself pretty scatter-brained. I’ve been generating ideas faster than I can evaluate them, but I have also been evaluating them — testing them out, throwing me out to smart people for a valued opinion. Thanks folks for bearing with me. As I tried evaluate ideas, some of them seemed to be not totally stupid. So the next question is, well I can’t do ALL of these, so I should start trying to compare them.

And this is where things just get weird. Every time I compared ideas, either in conversation or in my own head, I found the line of thinking started as a neat little two-column list of pros and cons, and rapidly devolved to a very existential discussion of what did I truly value in life.

Literally, I start off talking about two types of web apps and end up in a deep discussion of human fear of our own mortality. I’m talking about converting travel guides from PDF to HTML and end up debating, intensely, whether giving 1,000 people a moment of joy they will remember their whole life is ethically more worthwhile than materially improving 1,000 people’s standard of living in some useful but ultimately boring way. What the hell! How can I possibly make a simple decision when everything devolves to an insoluble philosophical question.

So I sat down today and I started writing, and talking to myself, and talking to my computer and listening to it back. Trying to dig deeply into the different distilled conflicts all these options kept circling back to. And all of the sudden I was like:

Oh.

There’s absolutely nothing unique here at all.

All of these conflicts distilled to some very fundamental dilemmas that probably every human faces on some level. You only have so many units of time and energy in your life and you constantly have to distribute how much you dedicate toward trying to fulfill each of these categories. All of these are hard too. They’re all a gamble. You can put all your time and energy into one and still not get the desired effect, on top of having neglected the others. Life is hard that way.

So what am I thinking about and what are these categories, you might ask. You might already think I’m full of crap and have closed this tab. But for those of you still with me, read on.

Making more money

Why would I want to make more money? I guess some people might find this question silly but I think it’s an important question to ask. I hate thinking about money. I get a visceral reaction in the pit of my stomach to thinking about budgets and accounting and taxes. In my personal life I only want to make money for the purpose of thinking less about money. And I think there is hopefully an achievable crossover point where I have enough money that I don’t really have to think about money at all.

But moreover it seems like it really does take money to do something interesting with one’s life. Money is influence. Money is optionality. Money can give you back 100% of your time and energy to focus on things other than paying the rent.

One of the biggest mistakes I made with SolarList was increasing my expenses too quickly without the ability to cover them. As a result we couldn’t take a long view on the business, we didn’t have time to experiment and basically it was a total crisis just to pay the rent. I never want to go through that again, so building up financial security has a lot of value for me.

So I’m looking at some options. One avenue is to take the lessons learned from SolarList: digging deep into the customer education and sales process of solar energy, building software and doing dozens of user interface experiments. To take that and do enterprise consulting with big companies. Another is to continue to build out my ecommerce and consulting business. And another is to build another product like Storemapper. With so much experience in building a micro-SaaS product I feel confident I could churn out another few simple products and catch a small winner pretty shortly. Two profitable micro-SaaS business would almost certainly throw off enough cash that I could basically spend 100% of my time not making any money for the foreseeable future, at least until/unless I needed to support a family.

All decent. I’m lucky to even have them as viable options.

But they also don’t feel very meaningful. At the end of it I’ll just have the money and have spent the time. Who really gives a shit about money. Right now I’m in Thailand where it costs about $1,000/month to live really really well. I’ve just spent the last year thinking, involuntarily, a lot about money and I fucking hate thinking about money.

Do meaningful things, make a dent, etc

This is the big one. Basically I just want to be in perfect health, full of energy, have all my finances taken care of and spend all of my time trying to solve important problems that will matter 200 years from now.

Elderly heiresses take note: If any wealthy aristocrats would like to sponsor me in that endeavor, I’m certainly open to arrangements.

When I quit my job I had a vision for my startup. There was this massive energy transition that needed (needs) to happen to save the freaking world. In my job I had learned that I was particularly good at buildings tools that accurately described big parts of this transition and could make them concrete and quantifiable. I learned that I could be at times particularly compelling at dispelling inaccurate beliefs about this energy transition, using that data and those models. So I wanted to scale up what I felt I could do on a person to person basis. Massively scalable, personalized education that would change the minds of millions of people and meaningfully accelerate an energy transformation that could save the world!

Fuck that’s meaningful, right!?

So why do I spend my days working on an ecommerce widget!?

Well, see above, it creates a degree of financial freedom for me. I work on it because it has high leverage of time, it can pay the bills and give me more time in return to work on big projects.

So, I should be working on big meaningful projects right?

Yes, I should.

But, honestly I’m hesitant and yea, a little bit afraid. I have only just barely scraped my way to avoiding personal bankruptcy. My first startup basically failed, had to have shitty conversations with investors — friends, mind you, who put their hard earned money behind me, and lost it. I invested three years of my 20s with very little meaning to show for it. I’m still psyching myself up to get back in the ring.

But this is crap and excuses. What big things am I thinking about:

1) I’m still not over the original vision behind SolarList. I think about giving it another go in solar. I think about trying the same angle — software superpowered personalized education — in different markets like LED lighting. I’m still aggressively poking around looking for an idea that really punches me in the gut and forces me to commit.

2) On some level I worry that I’ve missed the opportunity a little bit. That big companies and marketing budgets are ultimately going to solve #1 in the developed world because the major technologies have reached a threshold where they make sense for a very large number of consumers. I’m super curious about what’s going at the edge of the grid with distributed renewable technologies. In mobile much of the innovation happened at the edges, like mobile money, and percolated back through to the broader network. I think the next big phase of this energy transition may look like that, where innovations happen at the edge in unexpected ways. I would love to start exploring that and documenting that. And exploring it, at least at first, in a totally non-commercial way. Just learning and showing other people what’s going on. This intersects with something else that I think about the next phase of the energy transition is that business models become less important for moving things forward and something that looks more like “art” becomes radically more important. Things that serve no purpose other than to make the observer feel something. And that feeling starts to change the way they perceive the world and that seeps into their decision making so that they simply decide they want to participate in taking better care of the climate, whatever the return on investment may be.

3) Outside of few individual people, nothing has had a larger and more positive impact on my life than travel. I don’t remember where I read this, but someone suggested a thought experiment: What job would you be doing if you woke up every morning and thought to yourself, “Wow, I can’t fucking believe I get to do this for work!”? For me I think that would be running company where the product helped more people travel for their first time, helped more people afford to travel more often and helped people have spontaneous adventures that they treasured their whole lives. That would be awesome. Also, I’m a traveler so I can just scratch my own itch and build products I like. But as I dig deeper I’m discovering that, well, a lot people think the same way and it’s a super complicated, super crowded market with a ton of very smart people who know a lot more than me already working in it.

Take care of self and do fun things

In 2013 I took very bad care of myself. I raced my mind at full-throttle. I drank too much coffee and booze. Stressed myself out severely and got in pretty bad shape. Since early 2014 I reverse that to some extent, mainly emergency maintenance. But I haven’t really invested in rejuvenating myself.

The conundrum is always that maybe you’re just too burnt out to do the ambitious stuff you want to do. Maybe I’ll do better at all of these other things if I take a few months to focus on traveling, re-investing in my education, learn a language, do more rock climbing, yoga and skiing. Maybe I’ll come out of that with 10x the energy and everything else will be better for it.

But wow is it hard to turn off that ambition. I probably would need someone to force me to do this as I can’t imagine convincing myself to do anything more than the minimum. But Southeast Asia is a lovely place to just relax and have fun for a little while. It’s cheap, the weather is nice and the food is good.

Probably not going to happen.

Giving to family and loved ones

This is a short one because there’s not a lot of nuance to it. Pretty straightforward. I don’t give nearly enough of my time and energy to my family and loved ones. I’ve lived a lot of my life on the opposite end of that spectrum. Mostly because I saw too many of my friends and peers sacrifice too much of their lives and opportunities for rote familial obligations. I always thought people spent too much of their time and money flying home for every holiday and doing stuff just because it’s what you do. They missed out on too many opportunities and experiences for it. I love my family, but I always felt a little comfortable passing certain obligations that society and tradition place on the eldest son.

But the fact remains that my family, extended family and loved ones could do with more from me. There’s help for the older folks and mentorship for the younger ones that I could and should give. As I get older, and more importantly as they all do, this gnaws at me more and more. Gotta do better.

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So that’s what is on my mind. I’m going to, perhaps too rashly, post this unedited and then go for a digital detox for a few days. Maybe I’ll come back with a clearer head. Thanks for reading.

Closing SolarList: a cleantech post-mortem

The punchline first: SolarList is basically closing. We haven’t been actively operating the core business since the end of 2013. The founders are currently working on other projects. We spent most of 2014 trying to find a suitable partner

for the business and software, but we currently do not see a way forward. We would still love to find someone to work with to help more people go solar. As you’ll see from the rest of the post, we still fundamentally think it’s a great idea. But the fact for now is we’re closing up shop.

What’s next

We have built a ton of cool software and learned a lot about finding, educating and turning homeowners into happy solar customers. If you are interested to work with us, license our technology or have a compelling non-profit use case. Please give us a shout.

The story

SolarList encompasses a three year saga of failures and hard-won triumphs. There’s another blog post coming attempting to glean some generalized lessons from the story, but I wanted to put the full gory narrative out there for the cleantech community and for aspiring entrepreneurs. Hope you find it more useful than tedious.

Origins

Before SolarList, I worked at a cleantech consulting startup called New Energy Finance, since acquired by Bloomberg LP. One of my main roles was producing the Levelised Cost of Energy Quarterly Outlook. The goal of this paper was to examine the apples-to-apples to cost of all renewable and non-renewable forms of electricity generation across every market and every geography. Since the nascence of renewable energy in the 1970s the single dominant problem for the entire industry was that the cost of the equipment (solar panels, wind turbines, electric batteries) needed to come down. As I tracked these numbers quarter by quarter, it became clear in 2008 that many technologies in many markets were approaching an inflection point where they would be become broadly cost-competitive with traditional electricity. All the industry’s brainpower, all the venture capital and all the entrepreneurs were still investing time and energy in incremental improvements to the capital cost of equipment, meanwhile manufacturers of the dominant variants of solar panels and wind turbines reached critical mass.

There was a bloodbath of startups and investors who bet on new technologies to reduce the cost of equipment. At the same time almost nobody was looking at how the industry would scale up. How would it develop 10x or 100x more projects, how would it market and acquire 1,000x new retail customers. The best project developers still didn’t have basic CRMs or any process automation. Marketers of solar panels and other retail products had not innovated beyond plowing huge sums of money on Adwords, driving up cost per click to soaring heights, or paper door hangers. Meanwhile, nobody, almost literally zero people, in the entire industry had any competency in web scale software development. As the cost of equipment fell, soft costs like sales and marketing and customer acquisition composed a greater share of final consumer cost. I saw the opportunity and quit my job with the vague aim of building software to attack these soft costs with automation, simplicity and education.

It’s worth pointing out here that at this point, beyond reading the Rails Tutorial book, I too knew basically nothing about software development. But I had that special blend of overconfidence and ignorance that makes twenty-somethings want to start a company and disrupt an industry.

Failing to launch, then failing again

With a crisp copy of The Lean Startup on my desk I set about interviewing everyone remotely associated with the industry, doing “customer development” in Lean parlance. I had dozens of interviews with project developers, consultants, homeowners, friends, facilities managers and random people surveyed via Mechanical Turk. It became clear that this overall problem, inefficiencies in scaling and soft costs, was most acute in the residential (home) solar industry. What was needed was an easy to use website that let people who were interested in solar educate themselves about the costs and benefits and options. They would self-identify as interested in solar and the app would then connect them with best solar companies. Something vaguely like a Craigslist for solar: hence SolarList. At the time it was not crazy for solar companies to spend $5,000 – $10,000 per customer purely on sales and marketing costs so this matchmaking would be exceptionally valuable.

So the next step was obvious, another friend in the industry, who also knew nothing about software, and I would go hit up some angel investors, raise some money, hire a developer to build the first version of our product, one or two more steps, and we would revolutionize the solar market! I continued to do customer interviews, gather data, create and tweak Powerpoint decks. And we did a lot of pitching. At this point it should be obvious to most that we were not super successful with this strategy. A decade ago it was possible to raise money as two non-technical people with a software idea. But for most people who aren’t incredibly connected within the Silicon Valley scene, this is a fool’s errand. However, through shear brilliance of my then-co-founder we did actually get a term sheet for $100k from one angel investor. Fortunately I had been consuming books — highly recommend this one — and blog posts on venture term sheets non-stop for a month and saw that the document was so riddled with every horrible term sheet trickery that it would be better not to build the company at all than to do so with this as the foundation.

We killed the idea and the strategy of trying to get angel money in pre-product. We then spent several months exploring partnerships with app development shops. The problem with these deals is that you as the entrepreneur bring just the idea to the table and really have no leverage. Several months of work later we scrapped any version of this strategy. It became clear that SolarList needed an individual technical co-founder to move forward. It was also clear that the current team wasn’t a good fit for that strategy. There was a series of awkward conversations, several things left unsaid that should have been. I’m still not happy with myself about how it all went down but SolarList lost one co-founder before there was even a glimmer of forward motion.

Bootstrapping is hard

At this point I am about nine months out of a job and completely back to square one. I was still living in NYC at the time and I began networking furiously in my hunt for a technical co-founder. I went to every Meetup, mini-conference and hackathon I could. From the very beginning I believed that I needed to learn enough to be dangerous about web development and had been studying hard. By this point I was a founder with a good idea, industry expertise, and, critically, some basic coding skills. With this song and dance I was able to attract a decent number of interested developers and eventually found Matt, an insanely talented Ruby developer with experience working in the solar industry. On paper we were the perfect combination. We had a few discussion and quickly agreed on a shared IP agreement to get to work on a prototype. He lived out of town so, about two weeks after meeting, he moved in to my apartment, sleeping on the couch for a week while we coded 16 hours a day.

From a technical standpoint we started with a hugely ambitious goal for the software. We wanted to completely automate the entire customer acquisition process, building a web app that would generate a complete solar quote and financing package for any home in the US without any interaction with sleazy sales guys who we assumed were a big part of the very high cost of customer acquisition (We later leanred a great deal of respect for those sales guys). After a week of non-stop coding we actually had a pretty decent proof of concept and a good idea of what else we needed to build. But we had a big problem. Both us of were pretty much broke. To get our plan off the ground we needed time to finish the product, launch it and ramp up monetization. I sublet my apartment to cut rent from my cash burn, put my laptop in a backpack and flew to Spain (on miles), lived in hostels and Airbnb (charged to credit cards) and worked every day from cafés. We kept pushing the product forward but struggled with remote collaboration. We spent a painful amount of time entering app competitions and applying for grants to no avail. We launched a version of the product but couldn’t afford any marketing to drive traffic to it. We felt we urgently needed a seed investment to get SolarList jumpstarted.

A big solar company was sponsoring a Cleanweb (cleantech + web software) hackathon in San Francisco. It was so up our alley that we both bought one-way tickets with the intention of winning the hackathon and parlaying that into an angel investment to launch the company. We arrived at the hackathon and pitched our idea to the developers, designers and marketers in the crowd. At that point Matt and I had a clear and compelling understanding of our market, and a foundational product already built. So we easily attracted the all-stars in attendance, including a hackathon legend. We easily won the top prize ($2,000 + a free consultation and incorporation from a top Silicon Valley law firm). So far so good. The next step was an SF road show and an angel investment. We hammered absolutely everyone we knew for intros and pitched everyone who would listen. We spent a month in San Francisco. Crashing everywhere from friends’ couches, hotels in sketchy neighborhoods (booked with miles) to the even sketchier Startup House, a horrible hostel for SF’s legions of broke bootstrapping founders.

Here we learned a hard fact that haunted SolarList from day one. There were, and still are, exactly zero investors interested in early stage cleantech companies. When we first started out, two funds, Sunil Paul’s Spring Ventures and the incubator Greenstart, were making angel investments in cleanweb companies but by they time we got there, both had moved elsewhere. Beyond that, every investor had heard nothing but horror stories from big shot VCs getting hit with $100 million write-offs in the cleantech sector. Never mind that those investments were in massive factories and physical products while we were a lean consumer web company. Funds had been burned or seen their colleagues get crushed in cleantech and they were having none of it. Of course they didn’t come out and say that. We had brief meetings and pitched a ton of investors, because investors like to take meetings and hear pitches. And of course we never got an explicit “No” because investors like to keep their options open and see if anybody will be a first-mover, but none of the conversations ever went anywhere.

Burning through money, not making progress on fundraising, we began to fight about how to code our way out of this corner. I was convinced the only way to make meaningful revenues was to convert our product to a B2B SaaS service and sell it to solar companies. Eventually we stalemated on product development. Making no progress on any fronts our only option was to part ways. I am really sorry that this partnership didn’t work out and tons of lessons were learned, most importantly that startups are freaking hard.

Going it alone

Matt was a much better developer than I was so the code base we had built together was way over my head and I had to scrap it. It’s about 14 months since I quit and I’m back to square one again. A good friend, Sustainable John, offered to let me crash his place in Berkeley while he was out of the country for a month. Despite making lots of technical progress, Matt and I had never launched a fully working product that could truly make money, so I decided it was now or never. I had been sharpening my coding skills for over a year while failing three times to solve the problem of how to really build the app. I thought, what the hell, I’ll try to build it on my own. I gave myself 10 days to build a working product that I could sell to solar companies or I would quit the whole thing. I finished in 8 days, bleary-eyed and jittery from too much coffee and a lack of sunlight and exercise but with a working, sellable product.

I started the slow process of pitching solar companies on my B2B software solution. I put every company in my personal network plus the entire member list of the Solar Energy Industry Association in a lead list and started with A. In short order my time in Berkeley was up and I needed a super low cost place to hang out and continue emailing and cold-calling. South America looked good and cheap and there was a pretty girl I could meet up with there. I hopped a flight to Buenos Aires (I had a lot of frequent flyer miles at the time) and set up shop. It was on this flight that I built Storemapper, the only product I have launched that actually got some traction.

About 400 sales pitches later it was clear I was off track. The very reason I felt there was an opportunity in the market, that the industry didn’t have anybody who understoond the value of web software, meant that none of the companies I was pitching had anybody on staff who could be the internal champion for the product. A few companies, like Clean Power Finance, succeeded in selling software to this market primarily because the software so obviously worked and added value by automating repetitive tasks done on paper, but selling software to solar companies has so far proven to be a tough model. The current iteration of SolarList required that companies make a small bet (the price of SaaS) that the app would lead to more higher quality leads and in turn more revenues. I got the same answer over and over again: “Bring us warm leads and we’ll buy them all day long but we don’t to pay for lead generation tools.” If you’re losing count this is the fourth attempt with more or less nothing to show for it.

A new hope

While still in South America (Peru at this point) it became increasingly clear that SolarList version 4 was not going anywhere. I started to spend more of my time on other projects, freelance software development, ecommerce consulting and other side projects. I had this big lesson learned from discussions with solar companies, they wanted sales leads, tons of them, and were willing to pay big bucks for them, but I didn’t have a clear path to generating my own leads and I was losing a little steam to keep pressing forward. Around that time my friend and former co-worker, Michael Conti, pitched me on an idea: Cutco for solar. We would train legions of students to educate homeowners and create warm leads that we would pass on to vetted solar companies for a fee. The idea was a perfect fit. It matched with everything I had learned to date and was a clever way to generate our own leads and quickly generate revenue. Michael was not only very well-connected in the solar industry, but also a master large-scale organizer. The perfect co-founder to recruit, train and motivate hundreds of college students to go bang on doors. We agreed immediately to join forces. Shortly thereafter, Sustainable John joined us an advisor and practically a co-founder, given how much work he put in, giving us a West Coast presence and serious eco-rapping street cred.

Great progress and a big mistake

In January of 2013 I moved back to New York City. Michael and I started work on this new version of SolarList. But I had a huge problem. I had barely been able to scrap together the cash for first month, last month and deposit for a room in an apartment in Brooklyn. I was a good enough developer at this point to charge a decent per hour rate for freelance work but I didn’t have enough clients to earn enough to afford the NYC cost of living. It was a full-time job finding clients and freelancing enough just to do work enough to afford the City, leaving little time and bandwidth left over to do hard startup things. Taking on this extra overhead without savings or passive income was the single biggest mistake I made through this whole process as it meant we either needed to quickly start generating at least $10k/month in profits or we needed to raise money just to cover our cost of living.

Trading off time with paid work, we didn’t finish retooling the product and recruiting students for our first beta test until May 2013. In early Summer we did roll out beta tests on several campuses. Dozens of totally awesome students came out, volunteering for free, to canvas their cities and test our new solar assessment mobile app. The results were fantastic. Students were able to provide accurate solar assessments and educate and qualify potential customers without any real training using our software. Theses warm leads were stored in our app’s database where we could route them via email to solar company customers. We sold some leads and gave some away to companies to get feedback on whether or not they were valuable (they were). The students were excited and felt empowered to actually effect change in their community. And all the numbers worked. We had a detailed understanding of the solar sales funnel by this point and it was clear that this method would generate new customers at a much lower cost than best in the market.

First money in

We felt we had the data we needed to go full-time. After wasting nearly a month of work applying to the Department of Energy’s Sunshot program for a $500k grant (complete waste of time) we finally caught a break. We entered SolarList in the NYC Big Apps competition. The contest had a cleantech category which we won, earning us $20,000 and the help of the city Economic Development Commission with introduction to VCs. For all my previous complaining about the high cost of NYC, it’s worth noting that without this catalyst, SolarList probably would have fizzled again at this point. Looking to capitalize on the momentum we fired up another fundraising process.

We were looking for $500k to make a few hires and fund working capital as our business still had a long sales cycle between when a student would canvas a home and when we collected from the solar companies. We wanted to scale up the students rapidly and still be able to pay them in a timely fashion. If we were aggressive in fundraising the first time around, this time we were ferocious. We pitched hundreds of investors, cold-calling and emailing basically every early stage investor and fund in the country. Michael called in every favor he could, I interrupted a date night to cold intro myself to Dave McClure at the bar in Birreria. We hammered phones and emails and got conversations with almost everyone on our list eventually even getting a final round interview at Y Combinator. But we were still beating our heads against the wall. There was money for mature cleantech companies, but absolutely nobody wanted to put early stage money into the cleantech market. We had a functioning product with operating data, an all-star team and we understood the market better than anyone, but we got basically nowhere. We closed $135k from friends and a family office, to whom we are immensely grateful, but after several months we decided it was best to do what we could with money rather than keep fundraising.

$155k wasn’t nearly the capital and runway we needed to execute our original plan so we had to make a choice to focus on one part of the sales funnel. We didn’t have the time or bandwidth generate lot of leads, sell them to lots of solar companies and make sure all of them converted to actual solar sales, so we decided to focusing on showing that we could scale up the lead generation. There was tons of good data on how much leads could be sold for at volume and what percentage would convert to new customers. We hoped to get data showing we could generate X leads and raise more money based on the premise that X leads would be worth Y dollars if we had time to do the biz dev and sell them. It should be obvious by now that one of our biggest problems was being fundamentally dependent on the possibility of raising money and assuming “if we get to this next milestone, then we’ll be able to raise money and do things right.” We never focused on actually bringing dollars in the door because we assumed that investors would be able to make the extrapolation from leads to dollars if given copious data on average price per lead. This was an incorrect assumption.

Michael, John and our truly amazing interns devised and executed a plan in three weeks to launch The Solar Bowl with over a dozen college campuses across the country competing to educate the most homeowners about their solar potential. More than a hundred students signed up and used the app to create a solar assessment and hundreds of homeowners were qualified with about 300 solar leads created in less than six weeks. The software worked. Nearly all the students were able to easily give accurate solar assessments to homeowners with no training. Theoretically that would have meant about $15,000 – 30,000 in revenue at that time but the leads came from all over the country and we hadn’t had the bandwidth to vet companies and set up lead generation agreements with enough companies to monetize them effectively. The data however was very compelling. Students were fired up and it was clear we could scale the operation to 1,000s of students without hiring much more staff. On top of that the total cost of customer acquisition was dramatically lower than anything else in an industry very hungry for more customer growth.

Go big or go home

At this point we had a choice. We could more or less could see that this could be a business that would work. If we continued to grind it out we could slowly grow the number of Solarists (as we called our amazing canvassers) generate lead generation revenues and eventually build something big. But we had two problems. First, while I have tremendous respect for folks who have been out there putting solar on people’s roofs for 20 years, the customer service for many of the companies in this space was terrible. After handing off customers to these companies we found it could be nine months or more before they finally got solar on their roof. The processes were slow, inefficient and painful for the customer. We knew that we wanted to own that entire process, fully walking the customer all the way down the road to the end. But that meant hiring sales staff as there was no way the two founders could handle the sales process and manage the rest of the business. Secondly, call it what you will, but Michael didn’t want to build a tiny solar sales company and spend 5 years growing it organically. We wanted to make a big serious impact on the industry, otherwise it wasn’t worth it for us.

We agreed easily that we had to go big or go home. We had years of customer and product development, deep industry insight, demonstrable data that the we had a truly innovative and much more effective way to scale up the industry. We pulled out all the stops for a hail mary fundraising attempt. Eventually we widened our search to other solar companies, strategic partnerships and would-be competitors to try to somewhere acquire the capital to get the business to scale. But one by one we checked every one we could think of off the list and ran out of ideas. We also ran out of money. By March of this year we both had to go back to other work to pay the bills.

We spent the rest of the year looking for ways to partner with big companies in the industry to revitalize the Solarist program but at this point we just haven’t found a good fit. We have a few ideas incubating for re-launching the product but for now it’s on the shelf.

Gratitude

I (Tyler) have told this story as a first person narrative so it comes across as very me-centric. But that’s not how it really played out day to day. I could not have made any of the progress without help from co-founders, friends, investors, supporters and colleagues who helped immeasurably at every step of the way.

Several people took big gambles with their time and careers to join SolarList as co-founders. They worked their butts off and didn’t see a pay-off. Within the cleantech industry we had tons of helpful cheerleaders who made introductions and provided helpful advice. Our friends and colleagues were insanely supportive and helpful in the day to day and several of them took even bigger risks, investing some of their savings in Michael and myself. We are supremely grateful. I’m hopeful that our experience so far is useful for aspiring entrepreneurs and I’m even more optimistic about the future potential for solar and cleantech.

Thanks for the journey and for reading.