Another Take At Zero-Energy Buildings: Optimum Energy’s Nathan Rothman (Part 6)

SM: Let’s look at this from a strategic business perspective. You have 110,000 buildings in the United States to which your technology applies. If the average selling price is $100,000, then you have a very big market opportunity.

NR: It is enormous.

SM: It is an $11 billion market with your first product. Why are you not focused on executing on the first business opportunity until you become a $200 million company? The go-to market and channels will be different for other products.

NR: You are very right. We are very process oriented. We have various steps that we walk through in our sales process. We have account executives in each of our critical markets as well as channel partners in each of our critical markets. That team will continue to execute. It will keep building and building.

Our other efforts are separated. Our R&D group has a specific budget and a specific list of products to develop in an exact order. How that product will go to market will be another story. We have a rooftop product that will be applicable to buildings like Costco and Best Buy. We will manufacture that versus just selling the chip inside.

We are a software company. We are not a hardware company. Right now we are just selling knowledge and intelligence. In the $11 billion market that you already identified is our software market.

SM: The point I am driving at is that you have to work with your channel partners and sales. Even if you worked exclusively through direct sales, you still have to manage that channel. There is a long road between the 60 installations you have now and the 110,000 you can see down the road.

NR: Absolutely. We intend to keep 90% of our energies focused exactly on what you are saying. They are developed products, and we are out there right now selling them to the 110,000 building that exist. However, as a software company we have to face the reality that the barrier to entry is low. This year Cisco bought a building automation company. IBM has said that this year they are going to have an energy dashboard in the market. We see the convergence of IT and automation.

SM: Are companies like IBM and Cisco looking at your space? Is that on their radar?

NR: We are doing buildings for IBM. I don’t know exactly what VPs know about us, but I prefer to stay a bit below the radar for now.

SM: I think that is exactly right. There is no need to flip this business quickly.

NR: We have to execute and get to a reasonable size first. It is not easy. We have sent a man to the moon, so anything can be done. A company like Cisco or IBM can ultimately develop what we have as well. These large companies prefer to let a smaller company do all the development work, build it to a certain size like a $50 million to $200 million company, and then come in and buy it. It is much cheaper for them to do it that way.

This segment is part 6 in the series : Another Take At Zero-Energy Buildings: Optimum Energy’s Nathan Rothman
1 2 3 4 5 6 7