There’s a long list of start-ups who have birthed and bloomed at the original Second Home Spitalfields. Perhaps the bloomiest among them is the renewable energy company Bulb. Founded by Hayden Wood and Amit Gudka just four years ago, it is now the fastest growing start-up in the UK, powers up 1.3m customers – or ‘members’ as it calls them – generating £1.3bn in revenues and has just moved its 450 staff up the road to shiny new offices at the old Barings Bank offices.
Bulb’s electrifying growth doesn’t seem that surprising given its essential promise. It can save you money on your energy bill, quite a lot of money, and provide that energy from renewable sources. “About £300 of your energy bill is usually made up of the operating costs of that energy company,” says Wood. “And that cost is made up of customer service and getting your bill right and taking payments and things like that. And because of the way we set up the company and the way we use technology, we’re able to do that for about £50 pounds, which means that we can then massively reduce people’s energy bills and make sure that they’re buying renewable energy and offset their carbon emissions and give them good service.” What’s not to love?
Surprisingly, given its current growth spurt, that love did not come quickly. Wood walked Sifted’s Amy Lewin through Bulb’s shaky start as part of Second Home Clerkenwell’s series of Breakthrough talks. “We got the product out quickly,” says Wood. “We had the website, the back-office operations working. And thought great. We knew people cared about how much they paid for their bills, we knew they cared about renewables. It’s going to be fine. And then no one switched.
“We had promised our investors we would get to 20,000 customers by the end of the year and we were at 300 after the first few months and then 3000 a few months after that. And I really started to panic because we were going to run out of money. And the problem was that people thought it was too good to be true. They’d never heard of us and didn’t think we were legit.”
Wood was in charge of growth for Bulb. He hung around the offices of KPMG with a clipboard trying to sign up customers and even put a plea to switch to Bulb on his wedding invitations. As tactics they weren’t very scalable Wood admits. Eventually though the operation built traction: positive press started to appear and they added Trust Pilot to the website. The key ‘unlocks’ though were getting onto price comparison websites, “they control half the people who switch,” says Wood; enlisting professional help with search-engine advertising, ensuring their CPAs and PPCs were in good order; and the network logic of Bulb’s referral scheme. Bulb gives a referrer and their new recruit £50 each. They even have ‘super-referrers’. ‘One of them is a quite well-known comedian who I won’t name but they refer hundreds and hundreds of people each” says Wood. Bulb is now adding 20,000 customers a month and growth is now another kind of problem. It has to expand its team massively over the last year.
“We were only 100 people a year so the last 12 months have been pretty extreme,” admits Woods. As is the level of deep and angry discontent amongst some Bulb employees fighting on the customer service front lines. The Glassdoor website has a string of complaints insisting that the company’s extreme growth sport has created unreasonable demands, high stress levels and a toxic culture. Woods admits lessons have been learned.
“Knowing what I know now, I would definitely have hired ahead of where we needed to be. When you’re constantly surprised at how fast you’re growing, you don’t hire for the company that you’re going to be in two years time. We’ve just constantly been behind on hiring and that creates a lot of stress for everyone because there’s always more to do. And we only hired a chief people officer three weeks ago.” Wood does not deny that he has made mistakes and lots of them. “It’s really hard to learn at the rate that role requires.”
Getting through exciting and testing growth means looking for support Wood says. “Peer-to-peer support is really important. Tech Nation is a really cool thing and has great programmes like Upscale and Future Fifty and you get introduced to companies who are at a similar stage to you. I joined two years ago and I still meet up with the other heads of companies I’ve met. We share a lot with each other. Then you just meet people who are extremely generous with their time that can give you advice. And I think that’s a really important thing.”
And Wood is going to need support. Bulb is now expanding into three new territories; France, Spain and Texas, spotting a gap for a challenger operation. “There are lots of other countries where they don’t have an alternative to the to the incumbent company that was created when the industry was privatized. And we use the same technology that we built in the UK in those other countries and help members reduce their bills and their carbon emissions.”
But the future of the company is not just about international expansion. Wood insists that the way we consume and generate energy is going to become more complex and de-centralised. In this new world, Bulb will be less your energy supplier and more your energy manager. “Solar panels, lithium ion batteries, the electrification of transport; all of those things are going to change the way we relate to energy. And the home will, at times, be feeding energy into the grid and other times you’ll be drawing it down from the grid. We thought that we could catalyse that change and make what seems complicated and confusing easy to understand. And actually contribute to bringing that about sooner. We will just continue to innovate, continue to improve what we’re doing.”
Written by Nick Compton
Hayden Wood was speaking at Second Home Clerkenwell Green as part of our Breakthrough Fortnight, where together with Index Ventures and Sifted we brought the entrepreneurs and innovators behind now famous companies like Deliveroo, Farfetch, Mumsnet and Bulb together to reveal the stories behind their world-changing businesses.