Alliance for Energy Acceleration

In 2010, I believed that the entire energy industry was ripe for innovation and would be led by technology-adept, information age-minded entrepreneurs. Our grand experiment on SURGE was to prove (and accelerate) this theory by making bets on great people, great teams, and great ideas.

Early on it occurred to me that there will only be a few winners in the accelerator space based upon having a true and sustainable value proposition [something that you do very well and are passionate about that solves a customer problem that they are willing to pay for in the quantity necessary to make money that is unique to everyone else].

As Ash Maurya writes, “Once a startup achieves some level of initial success, it is inevitable that competitors and copy-cats will enter the market. If you don’t have a defense against them, you stand a real risk of being made extinct by these fast-followers.” And by the time you read this note, at least two accelerators, incubators, co-working spaces, insert new term here, will open up around the corner from you.

In the case of Y-Combinator, they own Silicon Valley. If you want to fast track your team, idea, company, get accepted into Y-Combinator. In the case of Techstars, they have breadth and reach. Instead of competing for Silicon Valley, they decided to own the rest of the world and form large and lasting corporate partnerships and investor relationships. Being in the Techstars network as an entrepreneur is bar none.

Where does that leave the rest of us? There are a few others on the Seed Accelerator Rankings list that have innovative business models and impressive traction. What makes the chart difficult is that it is measuring all of us using the same metrics; however, not all of us have the same purpose, profit motive, nor business model. 

SURGE entered Houston in 2010 as a for-profit seed accelerator that focused exclusively on energy. We had local competition that lacked a strong unique value proposition…but wait…this was our great debate and something to discuss and consider. Who was our customer? SURGE was built upon and guided by being “entrepreneurs 1st.” While SURGE built a true value proposition to energy entrepreneur’s around the world (we offered access to the customers, the experts, and energy-knowledgable investors), we were unable to compete against our local competitors when it came to sustaining our revenue model.

The SURGE Lean Canvas

While our long-term model was to generate returns from exits, we are still only 5-6 years into the cycle, and exits were never forecasted to come for another few years. And with the current state of one of our focus industries, oil & gas,  and the lack of innovation of our Texas-based utilities, the exit timeline has only extended. This forced stress upon our short-term model: generate sponsorships to pay for the lean cost structure.

Who is our customer? I still believe it is the entrepreneur, but our revenue model (at least until we birth a unicorn (save this conversation and read one of my last posts) is dependent upon our partners to pay for our annual budget, not our focused customer.

SURGE 2.0

While I am now a professional surfer, my mind, heart, and soul is still deeply connected to SURGE’s awesome entrepreneurs and multiple industries within energy that need to be improved, dramatically. Energy needs entrepreneurs brave enough and big enough to take on the largest players head-to-head. A few of these ideas will not be birthed inside of an accelerator; however, they could be and may still happen.

When we started SURGE, world domination was always on our mind. We believed that while Houston is the best HQ for an energy accelerator (largest number of customers, experts, and investors across the entire energy value chain from upstream oil & gas, to midstream, to downstream, to power generation, and even cleantech), there are other places around the world that excel in key technological and customer specific areas and having a “global footprint” was important for a few reasons. First, while Silicon Valley continues to lead in generating electron entrepreneurs across all industries…energy is special and requires deep domain expertise. Second, in order to sustain our short-term business model (covering our overhead), we needed to capture the financial support of the energy industry. Houston alone is untenable (strong local competition, need to have larger footprint, closer presence to check writers).

We started down the road to build an alliance of the top energy focused programs around the world. We lacked the resources to pull this off…but I believe it must be done and the result will have a global impact.

Proposal

I propose that the key leading programs around the world should unite and work together to accelerate the best energy startups from around the world. I believe a global alliance will be large enough and close enough to open up the checkbooks of the largest energy customers to support (sponsor) to program. An alliance will grab the attention and support of key institutional and angel investors to write larger checks for capital necessary to create true momentum. An alliance will attract the best entrepreneurs in the world that can leverage the global mentors, partners, investors, and customers.