An interview with Jun Shimada, Co-founder of ThinkEco
ThinkEco is a Manhattan based company that’s tackling cleantech from a different angle. ThinkEco’s goal is to get consumers to use less electricity from the start. How do you do that? Make everyday household appliances smarter.
Can you briefly describe what ThinkEco does?
We sell energy efficiency services to utilities, and what’s unique about our services is they focus on IOT^ technologies, so they are connectable and controllable through the Internet. Our niche is consumer appliances--not the thermostats on the wall, which is a more established business. Our business focuses on things just getting connected to the Internet. A few examples of what that includes are window air conditioner and dehumidifiers. What’s different about these loads is that they are purchased through consumer channels. We’ve pioneered a program in NYC that is very large from the point of view of number of people enrolled as well as the megawatts we control from these types of loads.
Are your programs in other places beyond New York City?
Yes, we’ve run programs across the country, and our main channel of distribution is through the utility. So we are primarily a B2B2C^ company. So we don’t really directly sell to consumers; we run programs across the country with utilities that interact with consumers. There are certain parts of the country that are more favorable to what we do. For example, if you live in areas where energy is vey cheap and abundant, then there isn’t as much of a need for energy efficiency, and therefore we don’t go after those markets as much. Markets dominated by single-family homes, which are typically controlled through central thermostats, are typically not our best markets either. Our bread and butter markets are usually in built environments, meaning urban environments. New York happens to be our biggest market, which is also our beachhead.
I live in an apartment in Manhattan. If I wanted to get a ThinkEco product, how could I go about that?
You can purchase it directly from us or though Amazon, but you wouldn’t get the full benefits. If you got it from the Con Edison website, you would be able to get it for free. In addition, you’d be enrolled in a rewards program called Cool Points, where you’ll be rewarded for taking action that benefits the grid, such as turning off your air conditioner during a time of very high demand. Basically, it benefits you more to obtain the product through your utility.
Can you unpack why utilities are willing to pay for efficiency products such as ThinkEco’s smartAC?
Utilities are starting to see that the demand for electricity is approaching and in terrible cases exceeding the grid’s capacity. When demand exceeds capacity, then the utility either has to spend enormous amounts of money to import power from other utilities or you might see failures on the grid, which could be brownouts for instance. If those things were to happen, the costs to the utility are enormous. Infrastructure improvements such as substations that help solve these issues can easily cost hundreds of millions. Increasing capacity in these stressed areas is expensive and also requires great amounts of political capital. So utilities would prefer to promote energy efficiency in order to reduce the demand, and do it in a collaborative way with their customers so they don’t have to incur these big costs. For utilities, avoiding those large costs is worth spending the money on energy efficiency programs and products.
Which ThinkEco product is your favorite?
I’d say the smartAC product, which is a retrofit of old air conditioners. We’re talking about air conditioners that don’t have a remote control or Internet connectivity. They are literally boxes with a knob. Those old units are terrible energy hogs. What our product does is allow that unit to be controlled through your phone. So it provides Internet connectivity and a handheld remote. Because it provides full control of the unit to the utility, we’re able to get real savings out of the unit in grid emergencies without inconveniencing the customer.
How are utilities helping our transition to a clean energy economy? Are they hindering it in any way?
There are a lot of motivated smart people inside the utilities, and they want to make the transition happen. Unfortunately, there are utilities that are regulated, so in order for the change to take place at a widespread level, the changes have to go through tariffs, regulations, and laws. All of those require a political process that takes many years. I think what you’re seeing is a gradual transition of the utility to a more sustainable model. Not only from the point of view of reducing carbon emissions, but also from the point of view of making the customer a real stakeholder in our collective energy future. This is an important change in mindset, because even if you just go back 10 years, everybody’s point of view was that it’s just the utility’s job. They thought “anything to do with electricity and power is the utility’s job. I just hit the switch, and there’s power.” Now we’re moving to a point where everybody wants the customer to be part of the solution in order to make New York and the country as a whole more efficient. You’ll see this even more when vehicles become electrified. There will be a lot of interesting policies that will be developed around charging stations. Now with gas stations, you have them everywhere, but who really regulates them? We don’t really know. But I think now you’ll have a collective ownership of charging stations. What you’ll see is that the consumer is an important stakeholder.
How did you come to be a Co-Founder at ThinkEco? Can you talk about your career journey?
I am basically a scientist by training. I was doing a lot of theoretical, physics things, with a focus on biology. My first involvement in start-ups was when I joined a pharmaceutical start-up right after I completed my graduate degree. That’s when I became very interested in taking academic concepts and trying to change society with it. I know that sounds a little corny, but that’s what I started getting interested in. At a start-up where I was employee number two or three, I learned a lot about raising money and working with other team members. When the company raised a lot of money and reached a stable state, I went to work in investment banking, but I didn’t really like that too much. I went back to Academia, and there I started to read literature on global warming. This was back in 2005 or 2006, so these were just early articles about the ice shelf being in trouble, etc. So that made me start to think this is something I really want to do. A few of my buddies when I was a post-doc built the Modlet with me. We built a prototype and filed a patent around it and raised some Angel money. We decided to go all in with it, and went through a major fundraising. What’s tricky about being an entrepreneur in the cleantech sector is that the revenues come very slowly, and also every clean technology is really too early for the market. Even now, I still feel that everything in cleantech is still too early for the market. So what that means is that you have to persevere to find the right customers and investors who believe in what you believe. You need to be conservative about managing cash so that company survives as long as possible. It took us quite a bit of time for us to get the company to where it is now, in a healthy state. That’s how I got to where I am today.
Can you talk about how ThinkEco chose to have its office in Grand Central Tech, an accelerator and co-working space?
We ended up in Grand Central Tech because we had some prior affiliations with ACRE, another cleantech incubator. We were involved with ACRE when it was first starting back in about 2008. They were instrumental in supporting us while we were very young. Through that involvement, we developed a relationship with New York City’s Economic Development Corporation. At that point, we were plugged into NYC’s efforts to develop a tech and cleantech economy. For us it was a great deal, because before that commercial leases were 7-8 years long, which is unfavorable for young companies. The Grand Central Tech community is great and they also offer lower rents.
How big is the ThinkEco team, and how would you describe ThinkEco’s corporate culture?
We have a year-round staff of about 20 people. During the high season in the summer, our staff increases to about 50 people. With that permanent staff, we try to keep it very casual. I think everybody works extremely hard. I think that’s because we all care so much about the problem we are focused on. The social mission is a thing that unites all of us. The problem that we’re trying to solve is difficult—it requires advanced technology and resourcefulness from our employees. Every problem is new. Every challenge can’t be solved with typical solutions. We have a creative bunch, and the problem solving is often a group effort. When you go through one summer where hours can get long, there’s a pretty strong bond that forms between the employees. I’m hopeful that everybody who comes through our company learns what it takes to build a business that is innovative and sees that it takes a lot of determination and hard work.
What would you say to a friend if they asked you “What’s the best way for me to reduce my electric bill?”
If you’re in the market to buy an air conditioner, I’d say buy the most energy efficient ones. You can figure that out by looking at the yellow EnergyGuide^. The other thing is not to use air conditioners when you are not there. Try to find a WiFi enabled air conditioner where you can remotely turn it on or off, so if you want to have a cool home when you return, you can turn it on right before you arrive. Air conditioning is probably the largest energy hog; that’s why I’d focus there. The other thing you can do is replace incandescent light bulbs with LEDs. LEDs are one of the biggest, most important inventions for saving energy. In general, if you have old devices and you have some money to invest, go purchase an energy efficient TV or laptop. Otherwise, it really comes down to managing your cooling and heating. It’s best to open your window to stay cool.
Notes from Watts Up Cleantech:
^IOT: Stands for Internet of Things and refers to the many devices, large and small, that are now connected to the Internet.
^B2B2C: Business to business to consumer. ThinkEco works with utilities (another business) which interact with consumers.
^yellow EnergyGuide: Appliance manufacturers must use standard test procedures developed by the Department of Energy to prove the energy use and efficiency of their products. Test results are printed on the yellow EnergyGuide label, which manufacturers are required to display on many appliances.