Power Of The Urban Wind: Mariah Power CEO Mike Hess (Part 5)

SM: Who were the VCs that you raised money from?

MH: Noventi Ventures was the main investor. There were two small firms, Greenhouse Capital and Big Sky Partners. We converted the notes and raised $5 million in new cash.

SM: You said you had 75 installations at that point. What were the deal sizes of the units that you sold?

MH: The units cost around $5,000 each. You then have another $3,000 to $4,000 for installation. We got about $130,000 for the systems, and the contractor probably picked up another $100,000 for the installation.

SM: What is your model right now for products versus integration and installation?

MH: We have about 110 dealers in the United States and 8 internationally. The dealers are responsible for the sales and distribution of the product. We do a third of our business as direct business. That is when people come to us and want us to help participate in the design or development for them. We are doing other things where applications are non-traditional. We are showing them how to do the work and how to engineer it.

SM: Where are you in terms of revenue right now?

MH: Last quarter we did $2.3 million in sales. I think we will do about $2 million in sales this quarter. This is really our first full year of operations, and we will do $3 million to $4 million of revenue.

SM: How will your business scale? It appears that you intend for dealers to be your primary sales channel.

MH: That is correct. We will create some additional distribution channels where it makes sense. There is no reason I could not sell through a Home Depot or a Lowes. It is just a matter of time and getting to the right margin structure for it to work.

SM: What is the balance between market pull and your push of the product onto the market?

MH: From my perspective, the larger markets for us are outside of the United States. The cost of electricity outside the United States is two to three times the cost inside it. In the European Union, they pay about 23 cents a kilowatt hour. We average about 13 here. I have a much better economic sales advantage if I sell in the EU than the United States. That is part of where I see the volume coming from.

We built the smallest unit we could to prove the engineering. The next version is larger and will supply 100% of a home’s demand. The design will be easier to accomplish because all we have to do is scale it. We do not have to reinvent or design anything.

SM: How much pull are you experiencing in the United States?

MH: We are doing about 60-65 units a month. That is coming from our early years. It is hard to start a dealer network, and we had to start one from scratch. A lot of our dealers are electricians or contractors who do other things. They wanted to get into the renewable energy marketplace and we helped them do it. We trained them, educated them, and showed them how. We make sure that we support them and give them a product that they can sell and be proud of.

This segment is part 5 in the series : Power Of The Urban Wind: Mariah Power CEO Mike Hess
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