Here’s a riddle for you.
How do you combat climate change AND help dramatically decrease energy costs for 1 in 3 American households that struggle to pay their energy bills?
Good Unicorn Uplight’s ingenious answer:
Acquire 7 of the most innovative companies in the energy space and combine everyone’s products together into a $1.5B Good Unicorn. Combined, these products have the potential to decrease American households’ carbon footprint by 100 metric tons of CO2, the equivalent of retiring 15% of America’s coal plants.
Then, to accelerate impact, partner with utility companies to distribute your solution to hundreds of millions of Americans (helping households save a projected $10 billion in energy bills), while helping utility companies meet their decarbonization goals.
To date, Uplight has abated 1.2 metric tons of CO2, saved customers $390 million on energy bills, and served 85 of 200 of the US’ largest utility companies.
Let’s dive into the story of how an unstoppable and brilliant high-school graduate and British Army Veteran, Adrian Tuck, CEO & Founder of Uplight, built this incredible Good Unicorn.
Diana Tsai: Adrian, I love your backstory as having no experience in energy, and no degree beyond a high school education. You’re very inspiring to anyone who is thinking, “Can I build a Good Unicorn?” So, what drew you to creating Uplight?
Adrian Tuck: So my background is I was in high school, then I went to the British Army for seven years. And then, from there, I’ve been in startups, none of which have been in the energy space! What drew me into energy was reading Al Gore’s book, An Inconvenient Truth. I immediately was struck by the enormity of the problem, and started looking for ways to take action. I asked, where does my energy come from? What’s using energy in my home? How can I save energy? And there was no information anywhere. That was the basis of this idea for Uplight: if I could provide information to people about their energy, and where it came from, and the decisions that they could make personally in order to use less or greener forms of energy, then that will become a huge part of the future of the transition of energy. And so that’s the sort of start so that’s what we do. We just put, we’d help people with that process.
The way we do that is by working with the largest utility companies in the United States to help them meet their decarbonization goals with a whole suite of highly innovative energy-efficient products for their customers. Here’s the reality: we have 98 months left to solve this problem of climate change. We can’t do it alone. Today, 85 of 200 of the US’ largest utility companies use Uplight’s technology to help millions of Americans have cleaner energy and save money. Our technology is a suite of 15 energy efficiency products that we supply to utility companies.
Tsai: It’s so interesting that you don’t go direct-to-consumer with your tech and instead your customers are utility companies. Can you share your reasoning there?
Tuck: We’ve always thought that if you’re going to solve a problem, like climate change, you need to go to the people who already have scale, who already talk to millions of customers and help those millions of customers get better at what they do, as opposed to signing up one customer at a time that there isn’t enough time left to do that. And utilities are highly motivated to innovate because they have decarbonization goals that they have to meet according to government regulation. There are 3000 utilities in the US, and we’re proud to have built trusted relationships and work with 85 of the largest already.
Tsai: Incredible. And you’ve had an unconventional path to building a Good Unicorn, in that you’ve accelerated the journey by acquiring something like half a dozen companies into the portfolio of energy efficient products you supply to utility companies. Can you speak more about becoming a Unicorn via acquisition, how and why you did this?
Tuck: It took 10 years to make this business worth $100 million. And then it took two years to go from $100 million to almost $2 billion. That key to that accelerated growth in the last 2 years? Collaboration. Acquisitions.
So the way this started was like this. I get together with our 15 smartest utility customers twice a year to talk strategy together. A few years ago, I met with them and we talked about the need to decarbonize. Over the last five years or so, there’s been a rapid awakening of the need to do this. And our customers courageously stepped up and said, we’re going to decarbonize by 2030, 2040, and so on. They really set themselves ambitious targets. I was excited about that, and was talking to these guys about it, and they and they basically said, “Here’s our problem, we’re stuck between buying from little guys like you (at the time we were a $40 million business), and these big billion dollar companies over here. Now, you guys are really good at innovation, but your balance sheets are scary to us; we have to make bets on the future of this market. We’ve got these big companies, they’re going to be around for decades, but they don’t give us the innovation we need.”
And so I said, “Okay, well, if I go and get the best of all the small innovators, and I put them together into this big billion dollar business, will you buy from us?” And the answer from our customers was a resounding YES. So I realized there was a billion dollar gap in the market, and I put together this carefully thought out plan of buying different companies in the space over a few years. Then I found a private equity partner called Rubicon to back me on this. Not only did they agree, they said, “Why don’t we do all these acquisitions at the same time. Otherwise, you’ll perpetually in integration phase. It’ll feel like chaos in the beginning but you’ll get the benefits more quickly.”
So that’s what we did. We did five acquisitions in seven months. Then we paused for a couple years to sort it all out. Now we’ve started doing more acquisitions to support our growth.
The number one question I ask when I look at a company I want to buy is: can we both achieve our mission faster together than we can separately? And if the answer is yes, then frankly, I make the case to my investors because the planet is not waiting! We have 98 months left to solve this problem of decarbonization. And every month we delay is one less month to solve the problem.
Tsai: This is brilliant. Accelerating impact through acquisition. Can you share more about the acquisitions and how each was a piece to the puzzle of your ultimate vision of impact? I’m especially curious because I think your approach might help other Good Unicorns in other industries like food or healthcare also accelerate their impact.
Tuck: Yes! We have two types of acquisitions, depth and breadth. Depth acquisitions are about core pieces of technology…for example, our first acquisition had only two people in the company but they had this beautiful algorithm that helped us figure out what items in your home were using energy in excess, for example, is it the hot water heater in your home or the air conditioning to blame? It was a really neat piece of technology.
The second type, breadth acquisitions, are to acquire more customers, and to deliver more energy-efficient innovations to our existing customers. So now we have 15 products and 85 utility customers to cross-sell into.
Tsai: That’s really, really inspiring. How did you fund the early stages of the company?
Tuck: Amazingly courageous early stage venture capitalist. And sacrifices from all of us, the team. I had to sell a car at some point to help pay for it.
We ended up buying out the venture folks a few years later. It’s been 12 years with Uplight, you know, and it was taking a bit long for the venture folks, so we found a private equity firm and bought out the VCs.
It was somewhere around 3 to 4 years ago, there was a lot of inbound interest in the business to acquire us. But I was worried, this problem we’re trying to solve is so big. What if we sell it and our company gets buried in the basement of a company that buys us? So we decided to double down and found this private equity firm. We bought out the venture folks, and then started down this acquisition path.
Tsai: It’s really fascinating to me how you seem to just invent your own path to growth.
Tuck: Yes. I don’t read a lot of business books. Instead I spend quite a lot of time talking to people and learning. What I do is get super clear on what I want. I’ll think through: What would have to be true for this to be the absolute best thing I could be doing for the next 5 years?
We just did this huge investment deal that values us at $1.5 billion, where we invited Schneider Electric to invest into us. And you know why we did that? Because Schneider is the number one green firm on the planet and they’re everywhere. And in order for us to hit our big goals, we need big partnerships like this.
Ultimately we want to prove it’s possible for business to be a force for good.
That’s why cooperation is so important. Because it accelerates the doing good.
I believe that capitalism done right can have an amazing impact on the planet. Capitalism done badly can create wars and all sorts of harmful things. There’s a case for good capitalism and bad capitalism, which is why your message about Good Unicorns and Bad Unicorns resonated with me when you reached out.
So for us, we think about our business as being a leader on this Good Capitalism journey, and we want to leave mile markers behind so others can follow.
Tsai: What’s an example of a mile marker or lesson for those who want to follow in your footsteps?
Tuck: Start with values and principles. Get very clear on those. It’s fashionable these days to talk about pivots. We’ve pivoted in tactics, but never in our values and principles. If you care about your values, your mission enough, then you’ll have the grit to persist.
Tsai: Any leadership lessons learned building this Good Unicorn you’d like to share?
Tuck: One of the most important things I think is to be able to guide the company through 3 major growth phases. Most CEOs can only do one phase, and that’s why you see the switching out of CEOs. The key is the ability to know when your company is ready for the next phase, and transition between. I call them the 3 Ps.
The first phase is what I call the Pizza phase, when you have 20 people in a room and the more pizza and RedBull you put in, the more product you get out. You can build a $2M business like that.
The next phase is what I call the Personality phase. You can grow to $20M, there are maybe 150 people in the company. 20 of the people have everything in their heads, so everyone else goes to talk to those 20 to learn how to do stuff.
The final phase, then, is the Performance phase, where you have to write everything down. And it’s got to be repeatable and scalable.
Companies fail when they fail to jump between phases. You can be excellent in a phase, and still not make the jump, and sometimes the more excellent you are in the phase, the less able you are to make the jump. The CEO’s job is to see that and help make the jump. That’s how I think about how you build billion-dollar businesses.
Tsai: What’s made you uniquely equipped to be able to jump between those phases?
Tuck: I think curiosity. Openness to learning.
This was something I learned when I was in the British Army going to war in my early 20s. I was making decisions about people’s lives. As a consequence, every other decision I’ve made I’m pretty calm about. I have this confidence in myself to say, “let’s try this new thing.” Wow, I’m worried this is a bit too much about me. You know I’m surrounded by a huge team of brilliant people. I don’t want this to be too much about me.
Tsai: No, no it’s such a great and beautiful peek into your mind. Thanks for opening up. What do you think is currently the weakest link in the business?
Tuck: We’re jumping into the Performance phase (phase 3) right now, so we’re like an awkward teenager. I’m the parent of two teenagers. You give a teenager too many rules and structures too soon, they rebel or their antibodies reject them. But not enough structure, and you have a permanent teenager on your hands. So it’s all about harnessing the creative potential in the business, in a structured way.
Also we’re growing at an incredible rate, so execution is the hard thing. Sometimes people think the idea, the raising money is hard, but I think the absolute hardest part is executing at scale. That’s the thing that keeps me up at night, the pace at which we need to move to support our customers on this journey is very high. And we’re running at a speed that is right at the edge of where you trip up.
Tsai: I love that teenager analogy so much. You know, the last thing I want to circle back to is something that struck me. Not only are you saving the planet, and saving tons of money for customers, you have basically a third social impact mission – serving low-income communities. Can you speak more to that?
Tuck: So we serve end customers through utilities, and we’ve had utilities tell us 7% of our customers don’t even have a bank account. So we have to build energy efficient solutions that can serve everyone. And we love that part of the mission, that it’s about not just providing solutions for rich white guys. This is about serving at risk groups.
When George Floyd was murdered, there was a lot of conversation inside our company about what actions we could take.
We broke our actions down into three components.
First, were we creating a safe, diverse, inclusive environment, inside our own company, with our own employees? By and large, the answer was, yes, but there were ways we could improve.
Second, and this comes to your question, we asked, what about our product? Our product touches hundreds of millions of people. Is it inclusive? Is it equitable? And we decided it wasn’t doing enough, and that specifically, climate change was going to adversely impact at-risk groups far more than it was going to impact wealthy people. So we ran a hackathon for several days to dive into how we could make our products more accessible, and we went to our utility partners with products specifically designed to help drive the adoption of clean energy tech for low and moderate income families. We’ve been very successful at running those programs with subsidies.
Third, how do we feel about social justice writ large? And, you know, what are we going to do as a company? And in my opinion there are two ends to the spectrum here, Facebook, the negative, and Salesforce, who is a fantastic leader who leans in on social issues. And so we created a kind of mild, medium, spicy version of what it takes to lean in. And we’re very intentional about how we move as a company from mild to medium, and being encouraging when our employees are leaning into spicy.
Tsai: Last question. If you had a whole room of young teenagers that want to build Good Unicorns, what would your advice be to them?
Tuck: Start big. Think of a big problem. In my case, it was climate change, right? Then go examine it and find a place in that problem that is small enough to get started and big enough that you can make an impact.
The next thing is, become a B-Corp, because there’s a huge community of people who are trying to do good in the world with business, and you can learn from them and be supported by them. We haven’t found a better thing than being a B-Corp. We’re going to go public at some point and our plan is to be one of the biggest B-corporations out there. We look up to Patagonia and all these other folks leading the way here. There’s a great community there that can help you as an entrepreneur. This is the balance, you know. You’ve got to make money as a force for good.
And then just don’t give up. I’ve had nights where I’ve literally cried myself to sleep. But never did I think about giving up.
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