Editor’ note: This feature from Business North Carolina magazine is part of today’s WRAL TechWire’s Startup Monday package. It was written by Dan Barkin.
CHARLOTTE – Startups have to raise money to grow and that typically requires a pitch to potential investors. You may only get one shot per investor, and not a lot of time, often as little as 10 minutes. It may happen in a conference room or an elevator.
So entrepreneurs have to know how to quickly but clearly describe their companies, their product or service, the problem they’re solving, and how they plan to make money. Recently, I watched a couple of entrepreneurs, Noel Myers and Corey Berrier, practicing their pitch at First Flight Venture Center in Research Triangle Park. They are targeting the booming solar sector with an AI-driven model to help technicians in the field.
First Flight is one of the state’s oldest technology incubators. Every month, it holds a pitch practice session for startups, one of a suite of services it provides. Entrepreneurs get feedback and advice from First Flight’s “navigators,” veterans of science and technology companies in the Triangle, including angel investors. People like Howard Glicksman, a retired DuPont research fellow; Chris Rogers, who was a Juniper Networks executive; Tage Honore, with a wide-ranging career as an executive and research scientist with regional pharma and biotech companies; and Mary Musacchia, First Flight’s chair and a veteran strategic adviser and legal executive for companies such as SAS. These were some of the folks in the room, and some of the 46 navigators who donated 500 hours of their time last year to various First Flight programs.
Myers, who grew up in Chapel Hill, has worked mainly in the solar industry since graduating from Oberlin in 2014. His early career has come during a boom in the construction of solar farms in North Carolina, which is fourth in the nation in installed solar capacity, according to the Solar Energy Industries Association. Drive out of the cities and you will see a lot of large-scale solar installations in rural farmland, more than 700 installations of 1 MW or greater. Some of these are owned by large, vertically integrated companies that develop, build, operate and maintain them. A lot of them are owned by investors.
The problem is that these installations have to be maintained and repaired. Stuff breaks. And when a solar farm isn’t turning sunlight into power, it can’t sell it to the local utility, and the owner isn’t making money. So it is important for technicians in the field to quickly diagnose and solve a problem at an installation. As Myers told me: “There’s definitely someone somewhere yelling at someone to get that thing fixed.”
That’s what gave Myers the idea for the new company, Sunereum. Here were the elements of his pitch to the navigators:
Technicians in the field need help trouble-shooting problems faster, so downtime can be reduced. What he and his team are building is a software tool with artificial intelligence that can guide technicians toward a solution faster. The tool will be trained with manuals from original equipment manufacturers, as well as standard operating and safety procedures. In addition, it will be trained using actual service tickets from companies containing data on the problems and what resolved the problems.
So, for example, he could customize a solution for a specific site or group of installations under one ownership that would be trained on its data.
A typical problem, he said, would be an inverter that stopped working. An inverter converts direct current from the solar panels into alternating current that can be sold to the power company. It can do a lot more, but that’s the main purpose.
“The tech arriving, looking at the inverter, [says] OK, I’ve got fault code 3456,” said Myers. “The tool says, ‘OK, based on previous instances, recommend going over to this widget. Check continuity. OK, that looks good. Based on that information, go now here, this thing. Test again, OK, that looks good.” And so on, until the problem is identified and fixed. The tool will be basically a chatbot interacting with the technician. The model also could be used by call centers to determine which personnel to dispatch, what equipment to take on a call and what protective gear to wear.
A navigator asked the key question: How does an investor make money here? Solar farm owners, Myers said, are losing $1 billion a year in missed revenue because of downtime. He believes they will pay for a solution that will reduce that downtime with faster recovery in the field. He expects the company will operate on a subscription basis with clients.
He talked about his track record, most recently with Carolina Solar Services in Durham. He talked about data scientists who were helping. Berrier discussed his experience with the home services industries – electrical, HVAC and similar companies that deal with lots of service tickets and problem-generated data.
“It’s monetizing data which otherwise is just sitting in someone’s folder,” said Myers. “We want to give purpose to this data.”
One navigator suggested tightening up the explanation of the problem they proposed to solve. Another asked if Myers could put numbers on downtime. Quantify and clarify that. (“A 100 MW asset that’s offline a day costs $30,000,” he replied).
What are you looking for right now, another asked. Legal help, intellectual property advice, and strategic partnerships, said Myers.
“Our MVP (minimum viable product) is built,” said Myers. “We’re working hard to begin to train the model. We’re talking to solar companies about giving us solar ticket data.”
Startups don’t have all the answers on Day One. Mostly, what you get from practice like this is a lot of the right questions that need answering for a real investor.
I checked in with Myers a couple of days later.
“They’re training me to build a business. I left feeling, dang, scraped my shins a bit, but I felt empowered. These people are engaging. They’re asking questions. I just need to continue to refine.”
The pitch practice is the first Tuesday of the month, and companies can sign up on the First Flight website. I’d recommend getting up with Emil Runge, First Flight’s programs director. He has a good checklist of things to cover in a pitch, but mostly entrepreneurs need to understand the mindset of investors.
“They frequently want to see a product that’s going to change the world for good,” says Runge. “But they need to make money.”
“This isn’t a philanthropic endeavor,” he said. Channeling an investor, Runge said: “I’m investing in your ability to actually create value. There are some key things that I’m going to need to understand from a product, from a market, and from a financial perspective to ensure that there is enough there, there. Because these are tremendously risky investments.”
(C) Business North Carolina