The energy industry is changing. Either proactively or reactively, companies that have existed for decades (sometimes centuries), are being forced to adapt. As shareholder and stakeholder demands continue to increase, incumbent, entrenched companies are being forced to change at a speed that hasn’t been seen before. Both organizationally and operationally, many of these businesses are simply not able to adapt fast enough thereby creating huge opportunities for new companies, especially those who prioritize speed and execution.
Tim Mendelssohn is the CEO at Spark.
Yet, industry outsiders often promote technology solutions which look great on paper but fail to recognize some of the unique challenges that only those with relevant experience and expertise can identify. However, by combining a focus on strong execution, the right partnerships and an understanding that comes from working in the industry, there are opportunities to take on some of the world’s biggest companies and drive the change that will be an inevitable part of the future energy industry; an industry that impacts everybody and everything.
Thus, strong technology combined with the right customer centric, iterative approach means that, finally, fast-growing companies can now realistically take on the David vs Goliath battle of competing against energy industry giants. For example, this has already taken place in the commodity markets and startup companies have fundamentally redefined how trades take place in the space of just a few years. This means some of the biggest, most established players in this multi-billion dollar energy industry are being challenged at last.
As illustrated by this example, much of the success of such growing technology companies is based on how their organizations are built and designed. Central to this is one key characteristic: an ability to respond to the energy market in an extremely agile way. This iterative approach means that small players can deliver what their customers need, deploying modern technologies in a more powerful way that adds greater value. However, despite this advantage there is also the major challenge of building, from scratch, trust through strong, continued and sustained delivery and execution. When your competitors are 100+ years old, well funded and have hundreds of employees, there are no second chances.
This focus on execution and delivery is critical. There is no shortage of “disruptive” ideas. The challenge is that there is always a shortage of resources available to execute, especially at startups. Typically, established competitors don’t lack resources but often lack focus on execution and delivery, a function of expanding product offerings, different shareholder demands and the wider inherent challenges larger businesses typically face. Similar to any battle a startup faces during their entrepreneurial journey, you have to choose how to fight. From my experience, one of the most effective ways to succeed is to focus on your niche and deploy all of your limited resources into that niche with the singular goal of offering a much better product than your customers’ next best alternative. This is obviously less exciting than the wider attraction of “disrupting an industry” but it can be a much more sustainable and effective approach.
By focusing on strong delivery in a niche market, your company can build trust, develop a stronger feedback loop with your customers and explore secondary, linked opportunities. This approach can enable you to beat your competitors at their own game and set the foundation for doing much more on the condition that your company continues to execute and deliver strongly.
Recognizing the danger of being “disruptive” is also key, especially within the B2B space. Industry giants are often part of the wider ecosystem, have strong, established customer relationships and they will protect that ecosystem from change. By way of example, the ongoing fintech revolution is undeniable yet the penetration for new technologies within the wider landscape will take a lot longer due to the existing structure of those markets. Incumbents, and not always for the wrong reasons, have a real incentive to limit the speed of adoption unless they are the owners of that change. For that reason, it is important to recognize technology’s ability to provide efficiency and unlock value rather than simply focusing on disruption. This distinction is especially important in more traditional industries.
Ultimately, to be successful, execution and a real understanding of market dynamics are critical. If navigated successfully, any business, no matter how small, has the ability to take on industry giants. As the energy industry shows, startups at the very beginning of their journey can feel like a David surrounded by multiple Goliaths. However, with the right approach, fast-growing companies, focused on execution and their customers, can challenge even the biggest Goliaths.
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