Bulb powering 'new industrial revolution' with tech
By any measure, the rise of green energy start-up Bulb has been staggering.
Founded by friends Hayden Wood and Amit Gudka in 2015, the firm has rapidly built a base of 1.2 million customers – 'members' – and grown its team to almost 400.
However its incredible success has not been down to aggressive direct marketing techniques or expensive multi-platform advertising; rather, it is old-fashioned referrals that have done the trick.
Head of brand Clementine Hobson (pictured below) has been at the forefront of its scaling journey for the last two years. "At the time I joined we had 15,000-20,000 members. That is rapid growth by anyone's measurements!" she told BusinessCloud.
"For a long time, the growth team at Bulb was made up of just three people. With such a lean team, we focused on a small number of things and worked hard at them: our presence on price comparison sites, some digital advertising and word-of-mouth marketing, where our members refer each other.
"That referral piece was absolutely instrumental in our growth... we'd rather reward our members than pay advertisers. For Bulb's first three years that was really how we grew the business – and it took us really far."
Online investment platform SyndicateRoom crowned it the UK's fastest-growing company in December 2018. The full story of its startling rise and the challenges it has faced while scaling will be featured in the latest edition of BusinessCloud's magazine, out soon.
In recent months it has finally dipped its toes into TV advertising as it looks to reach two million customers by the end of this year. Going down the traditional advertising route was not a decision it took lightly, despite attracting £60 million in growth funding.
"At some point you need to find new ways to grow," continued Hobson. "Over the past year we've been experimenting: we're in telly at the moment, but behind the scenes we put in a year's worth of work to determine whether that was a channel that could be useful to us in growing the business in a sustainable way."
CEO Wood and COO Gudka were moved to set up the business after they became disillusioned by questionable practices they witnessed inside the traditional energy industry. Wood told SyndicateRoom: "We saw first-hand how the energy market was broken. It was the same story at all the big providers – poor service, high tariffs, inefficiency and little effort being made to champion renewables."
Bulb operates a single tariff for all customers which changes depending on the wholesale price of energy. That tariff rose three times in 2018, but dropped again in March at a time when all the Big Six and some smaller energy suppliers were hiking prices after regulator Ofgem confirmed a rise in the energy price cap for standard variable and prepayment tariffs.
Bulb is not the cheapest supplier on the market, but it claims its tariff is currently £250 cheaper than standard plans at the Big Six, which have cornered three-quarters of both the electricity and gas markets.
"We're about ten per cent cheaper than the Big Six," said Hobson. "The way we price our energy is cost reflective: last year the wholesale cost of energy went up quite a lot and our tariffs went up to match that. It's now been falling for quite a long time, hence the recent price decrease.
"We think it's right and fair that the price you pay for energy reflects the cost to serve it. For some people the variable tariff does introduce a certain sense of insecurity [when it comes to planning finances], but over the long term you will get a better deal on your energy if you are on a variable rate."
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Ten per cent of its gas is green but 100 per cent of it is carbon neutral as a result of supporting projects around the world. "Ten per cent is about 30 times the national average," explained Hobson. "That will grow in a nascent industry, but at the moment Bulb buys about 40 per cent of all green gas available in the market."
Green gas – biomethane – is derived from organic sources such as food or farm waste. Cutting-edge techniques are used to capture the gas which would otherwise naturally be released as methane, a greenhouse gas 20 times more toxic than CO2, into the atmosphere.
One example is Huggin Farm in Doncaster, South Yorkshire, which has built an anaerobic digester plant and supplies green gas to Bulb. "Willie and Lynda MacIntosh grow sugarbeet on their farm, which goes to the factory and gets processed," explained Hobson.
"The waste that comes back from that is put into the anaerobic digester, which operates not dissimilar to a cow's stomach: all of the matter goes into that and it's turned around and agitated at stomach-like temperatures. It gives off a gas as it's doing that which is captured, clean, and pumped into the National Grid.
"It's a closed-loop way of generating gas. The waste from the process also goes back on to farms to fertilise crops. It's quite a magical process: it's like creating energy from, sometimes, poo!"
Such advances will be crucial to the UK's aim of cutting greenhouse gas emissions to nearly zero by 2050. Around 30 to 50 per cent of our individual carbon footprint comes from powering our homes, so using renewable energy is one way to decrease the impact in both the short- and long-term.
A third of the energy currently in the National Grid is renewable, compared to 39 per cent gas, 18 per cent nuclear and just five per cent coal. "That is unbelievable compared to where we were 5-10 years ago," said Hobson.
"Over the Easter weekend, the UK went 90 hours coal-free – four days of running the country without any use of coal. That was because it was so sunny and the solar panels were working so hard! We're in the middle of a really big transition and shift. It's like a new industrial revolution.
"There's a lot of misinformation about renewable energy: the cost has fallen quite substantially over the last few years. Even before those cost savings came along we've been able to offer renewable energy affordably by having a leaner, more efficient business model and by leveraging great technology to keep our own costs low."
Bulb has a large product team developing digital tools, such as its app, which will help its customers manage their energy consumption as smart metering becomes more prevalent in our homes.
"Energy is going to get more complex but more important in our lives," said Hobson. "At the moment, people are passive recipients of electricity and gas at home: the generators are at one end, the grid is in the middle and you're on the other end using energy as a consumer.
"That relationship is going to become a lot more dynamic: you might have solar panels on your roof and be putting back into the grid, you might have an electric vehicle and be putting back into the grid that way. You might have a battery at home to store energy to use at other times.
"We think people are going to want help and guidance to figure out how to approach this. We see Bulb's role shifting from being an energy supplier to an energy manager, where we're helping people to manage the energy ecosystem they have at home. All of that is just around the corner."
Indeed Bulb has launched an 'alpha trial' of 50 customers, where is pays them to have solar panels at home. "Our intention is to roll that out to all Bulb members and support that growing community of generators," said Hobson.
"There are around a million people with solar panels on their roofs at home and we expect that to grow that significantly over the coming years."