The Power of Partnering

Tony Wanless

| November 3, 2010

New business ideas in a tough market? Enlist the help of customers.

Innovation has many faces, the most common of which is applying current trends to an existing product or service to make it better and more able to capture market share. Less common is the creation of a new product that the market doesn't realize it needs. In that case, a company has to walk a hard road of educating its potential customers.

The Problem 

In 2007 Pulse Energy launched a product aimed at helping big buildings better manage their energy usage. While new buildings were being built to "greener" standards, retrofitting existing buildings was too expensive for most facility managers. The market was ready for a solution, but building managers had no idea what it would look like. Pulse CEO David Helliwell had to find a way to convince them he had an affordable option for energy efficiency. 

The Solution 

Helliwell and his silent partner Greg Kerfoot, the legendary founder of software giant Crystal Decisions (now SAP Canada), eschewed expensive hardware and decided to create software that could monitor and analyze energy use, thus reducing energy consumption and waste. The two sketched out a framework for the software and spent the next year recruiting developers and engineers to build a prototype. 

They knew that while the market was large, it wasn't easy to break into. So they settled on a strategy where they would sell software to customers by forming partnerships with others involved in the energy-management field.  

But first Pulse had to demonstrate the software's capability with a series of one-off sales. In 2008 it helped UBC improve its energy use in one large building on campus. Next, the North Coast First Nations village of Hartley Bay, which doesn't have access to BC Hydro, asked Pulse to help it reduce its dependence on expensive diesel to generate electricity, which Pulse did. The company also contracted to help Vancouver Film Studios and the B.C. government.  

Partnerships followed as Pulse established a network in the energy-management field. The company was, for instance, recognized and referred by the University of California at Berkeley National Labs, the energy-use sector's academic touchstone. This led to more partnerships, such as with Ontario's Brookfield LePage Johnson Controls' facility management services, which provides workplace management services for real estate portfolios. These partnerships validated Pulse's approach, and today it has a clutch of partners that not only use its software but refer it to other companies.  

For example, it installed one of North America's first smart grids in Hartley Bay and has partnered with the village to market the system to rural communities globally. Pulse is also now rolling out its software across the UBC campus. Last year Pulse formed its largest partnership yet, with Cisco, the technology giant that is moving into providing energy- management hardware.  

After several years of slow growth, Pulse Energy is now on an upward curve, with its energy-management software in use in close to eight million square feet of buildings and its sales increasing steadily from quarter to quarter as more partnerships kick in. 

Lessons 

• Patience pays off. You have to let the market catch up to your thinking. 

• Firm belief pays off. Pulse had offers to bend its software to other uses but stuck to its original vision.

• Partnering pays off. Pulse was targeting customers with deep knowledge. Rather than trying to sell to them directly, it partnered with respected companies to refine and demonstrate its software.

Check out Tony's blog at: bcbusinessonline.ca/insider