Elevator Pitch is a regular feature on Lifehacker where we profile startups and new companies and pick their brains for entrepreneurial advice. This week, we're talking with founder Ben Burge from Powershop.
In 128 words or less, explain your business idea.
Powershop is the world's only online store for electricity. Shopping enables customers to choose electricity from multiple suppliers — renewable, community focused or simply the cheapest available — to match their budget and lifestyle. Powershop's platform also lets customers see exactly how much power they are using and how much it will cost them before they are asked to pay for it.
Because electricity can be both complex and dull, we've made it simple and fun. Customers who use our smart phone app can grab "bargains" on the train on the way to work in seconds.
Operating in the cloud gives us a real cost advantage over traditional power companies, so we're the cheapest in 321 suburbs in Victoria, and that's before you take into account the additional savings you get from shopping.
What strategies are you using to grow and finance your idea?
As a start-up with support and funding from the Meridian Energy Group, Powershop is able to leverage about $0.5 billion of investment in renewable energy generation in Australia (wind farms) to provide hedging support for its activities.
What's the biggest challenge facing your business?
By and large, people find electricity boring. Electricity companies also have a reputation issue with consumers after decades of pushy door-knocking, confusing bills, unwarranted price hikes.
This means that customers are (rightly) fed up and fatigued. Our challenge is explaining to consumers that Powershop is about transferring the power from power companies back to them. If we can get a customer's attention, then it's up to us to give them confidence that we have a good deal. The fact that we don't have lock in contracts or exit fees (and we generally pay for the exit fees of their incumbent retailer) helps a lot.
How do your differentiate your business from your competitors?
For too long, electricity purchasing has been something that has been "imposed" on customers. By contrast, we would like our customers to take control of how they purchase, use and pay for their power. Ironically, we're about helping our customers learn how to use less of our product — how's that for differentiation?
We also like to think that we are taking the Pepsi challenge with our competitors every day. We have no lock in contracts or exit fees, which means that we need to compete for our customers' loyalty every day.
What one phone, tablet or PC application could you not live without?
It's cheesy, but I have to say our Powershop application for iPhone and Android. I get push notifications for cheap specials, which means I can snap up bargains in about 12 seconds.
What's the best piece of business advice you've ever received?
Be the best prepared guy in the room.
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