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3 Ways the Utility Industry is Mimicking Startup Mentality

As a reaction stricter regulations, the utility industry is taking lessons from entrepreneurs on how to become more agile.

Opinions expressed by Entrepreneur contributors are their own.

Today’s economic and environmental realities call for the energy efficiency industry and business leaders to engage more than ever before. Entrepreneurs have a deep understanding of changing business models, perhaps a better comprehension than most regulators or policy makers, and the utility industry is looking to these innovators to glean insights on redesigning their business model.


Subject to stricter and stricter regulatory requirements, the utility industry will continue to go through a massive overhaul to become adherent to environmental standards. One facet of this is, of course, residential consumerism.

In California, peak demand is growing at about 2.4 percent per year, roughly the equivalent of three new 500-megawatt power plants. But utilities are under pressure to do more with less, which means finding ways to encourage energy consumers to save power.

1. Utility as a platform

Companies like Google, Facebook, and Apple learned years ago that they would be much more effective if they expanded from providing services to offering platforms. Platforms play host to entire technology ecosystems by inviting developers, partners and users to collaborate and innovate.

Like healthcare or education, a majority of utility companies are working with antiquated infrastructure. By becoming more platform-centric, the utility industry will flourish in the future.

“When utilities engage customers in smart energy practices, customers see the value and impact of their usage while driving positive, measurable outcomes for utilities,” explains Yoav Lurie, founder and CEO of Simple Energy, a web platform that uses social game mechanics to motivate customers to save energy. “By leveraging creative, platform-driven collaboration, utilities can better transform customer and consumption data into digital experiences that inspire people to take action.”

2. Gamification

Human brains are wired to enjoy the challenges, positive feedback and social bonding that games provide. The advent of digital technology has simply amplified the hold that games have always had on us.

Gamification is especially powerful in motivating behavior change. Take the weight loss app Fitocracy as an example. Within the Fitocracy community users keep track of their points allowing them to level up, complete bonus quests and earn badges by reaching their milestones.

Similarly, games are being deployed to motivate consumers to live sustainably, recycle and save energy.

“Many younger generations are so immersed in games that game mechanics -- adventures, avatars, points, badges, virtual currency and so on -- are almost more compelling to them than ordinary life,” Lurie says. “It is no wonder that educators, marketers, enterprise solutions developers and now utilities are turning to games to help achieve their objectives.”

3. Virtual reality

No longer just a pipe dream, VR is being used creatively in many spaces because there is an element of physiological connectivity. In the energy space, some entrepreneurs are trying to educate consumers about energy use in VR formats.

Consider wind turbines. Imagine standing in the rolling hills of Denmark, home to the world’s largest turbines. Sweeping over 200,000 square feet, users can stand on a turbine, enjoy a 360-degree view and engage their whole body in the experience. The stimulation of the experience is because of the immersive VR, but the cognitive relationship will be with wind turbines. Watts Wind Energy put together a VR video showcasing the grandeur of the turbines at Lake Echo.

Due to technological advancements, wind turbines are the largest moving man-made structure ever engineered, and it’s difficult for people to grasp how this structure influences the landscape. VR places the user into the landscape, making it easier to understand what it truly takes to create clean energy.


Entrepreneurs and business owners have a deep comprehension and appreciation for changing business models. Utilities are taking lessons from startups by leveraging technology opportunities where they can and integrating third party liaisons where they lack the expertise or market penetration. Understanding the need for a different business model that provides financial stability for the utility industry will be critical in securing reliable energy sources in the future.

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