With this blog I want to give you some insights into what it is like to be in InnoEnergy’s Highway Programme. The Highway is the accelerator programme of InnoEnergy in which startups are supported during their growth from working prototype towards launching their product for the customer. Upon entry in the Highway, Heat Power had successfully demonstrated its technology at the lab scale and was looking to make the first steps towards market adaptation. In my last blog post I shared with you some details on our journey at The CommUnity Days 2016 and the objectives we are trying to achieve within the InnoEnergy Highway Programme. Today it is time for the second blog post and an update on our journey!
In my last blog post I reported that we secured government funding for a small-scale pilot in a wood milling factory near Eindhoven and I am happy to share with you that we installed this small scale pilot last month and are starting operations soon. As one of the InnoEnergy Highway services, we receive support regarding product certification. The industrial demonstration and certification are of great importance to our progression as they show confidence and reliability towards our potential customers.
Actually, what about these potential customers?! The Rankine Compression Gas turbine / RCG system is a supercharged steam turbine system for electrical peak shaving in heat- and power-intensive SMEs. This means that our system is able to provide on-demand electrical power based on a waste stream or crude biomass. It is not possible to target the entire manufacturing industry, therefore, we spent the last months narrowing down our market of entry.
The process consisted of two parts: a literature study on the industrial boilers that are currently installed in the manufacturing industry and customer validation through interviews (basically trial and error). In the literature study we looked at which manufacturing industries have a technical match with the RCG technology, that is: 750 kW - 6 MW boiler installed, biomass/waste stream-fired, currently paying a high electricity price and in need of a flexible electricity supply. Out of these prerequisites the study showed most promising fits with: wood processing plants, food industry, specialised paper plants and thermal cleaning installations. The study showed that most industrial boilers are installed in Germany and that Germany features a relatively high industrial electricity price.
Following this initial targeting, we proceeded with our trial and error interviews. I am mentioning this process especially here because iterations with potential customers is the most important method to validate your product market fit. With the help of InnoEnergy we contacted 75+ industrial contacts, participated in four networking events and hosted our own workshop. From all contacts generated, we concluded finally with five promising leads that responded mostly positively to our value proposition. Interestingly enough all five leads adhere to either a wood processing or thermal cleaning plant.
I have to say that this process was very time-consuming, although we achieved an important milestone in the past half year. Iterations like these can be frustrating at times when the answer is simply “no”. However with iterations you learn, and when the targeting becomes more accurate and the balance shifts to “yes”, you know you are on the right track.
Lesson learned: don’t take no for an answer - learn from it and improve.
Ups and Downs
In line with this lesson learned I would like to shortly mention another milestone we identified at AlumniUnite 2016: funding. Although we obtained government funding for our small-scale pilot we are still looking for means to finance our first full-scale industrial plant. Because we are a hardware startup in the energy sector, the capital required for such a plant is a big step to overcome. In the past months we have started looking into diverse ways of financing, such as government funding, VC funds and industrial partnerships. Thus far, these efforts have been with little success, however they have yielded feedback from which we improved. We will continue these efforts within and outside InnoEnergy’s network and will come back to you with the progress in the next blog.
Leading towards AlumniUnite 2017 I will keep you posted with regular follow-up blogs on Heat Power and what it is like to work at a startup in the InnoEnergy Highway programme. In the next months we hope to have our industrial pilot up and running and to have secured funding for our first full-scale plant.
Exciting times, stay tuned!
In Collaboration with The CommUnity Post
Tom Huizer - Short Bio
Tom Huizer currently works as a business developer at Heat Power B.V. as part of his work towards his professional doctorate degree in engineering at the Eindhoven University of Technology. After his bachelor studies in mechanical engineering, Tom joined the European Master’s school of EIT InnoEnergy, which focuses on sustainable energy technologies and the entrepreneurial opportunities that arise from that. He completed his first year of study at UPC in Barcelona and graduated at TU/e Eindhoven, during which he was an active member of Team Energy TU/e and researched climate change in Greenland with the University of Denmark.