In the Ask an Expert series, HeatSpring instructors and industry thought leaders answer a single question on the minds of the HeatSpring community. We are joined by Brian Hayden, Co-Founder of HeatSpring and Co-Instructor of the Solar Entrepreneurship course. Brian talks about launching your own solar company and answers the question – what team should you be assembling? To check out Brian’s response, check out the video or read the transcript below.
Brit: All right. I am here with Brian Hayden. He’s the co-founder of HeatSpring and the co-instructor of our Solar Entrepreneurship course. Brian, my question for you today centers around the idea of starting your own solar company. I hear from folks all the time who want to set up their own solar operation.
And so if someone wants to build their own solar company, what teams should they be assembling?
Brian: I was excited to answer this question. And so I put together a really quick set of slides. I’m just going to pull it up. Because yeah, I get this question a lot too.
All right. I’m going to start by talking you out of it, because even the most successful startup of all time – Amazon – this is what it looked like when Bezos started.
Starting a company is not glamorous. Just because your job isn’t going great, you know, that’s not the reason to do it.
Because starting a business is not glamorous. It’s a ton of hard work. You’ll be very unimpressive to the outside world for a long time. And I just want to be really honest about that.
I think the biggest hazards, when it comes to starting a business, are income uncertainty. I think that’s the number one reason people don’t start.
I think it becomes harder to answer, “what do you do?” You know, it starts to feel a lot more personal. A lot of times what it takes to succeed, doesn’t take you in like a linear path in terms of your career, so sort of like stepping out of the workforce for a while. It’s kind of on par with that when it comes to going to get a job later.
Some employers are going to value that experience. They’re going to think that’s cool. Not all of them will. And I would say maybe one of the biggest ones is this – there’s always something to worry about, so I put – heavy cognitive burden. I know when I’ve started businesses, like you can’t turn it off a lot of times. And if you’re somebody that has a problem with that, it’s worth knowing that that’s an issue upfront.
So now that the people who aren’t really excited about starting are gone… for the people who are left listening, starting a company is the best!
Unlimited upside. The fact that if you can go figure out how to sell and install another PV system, you’re gonna make more money. And if you can figure out a way to do that, more and more of that, nobody can put a cap on that for you. You know, you can become Sunrun or one of these huge companies. And I love the unlimited upside of having a business. Once you get a taste for that, it’s really hard to go back, to be totally honest with you. It starts to make you feel like it’s crazy to have an hourly rate that you stick to and you can’t exceed that.
I think the ability to stay on your edge at all times is amazing. You know, there’s always something to learn. Just because your boss tells you that, you know, that’s not your job. Nobody’s there to stop you from learning and growing.
You have control over your time. How much work you want to take on. How your team evolves. The culture that you build. And I think all those things are really important.
I have this quote at the bottom here. This is a guy – John Abrams – who I really like and respect as a business owner. His quote is, “a sense of ownership is like a sense of dinner.”
And I agree, you know, it’s really hard if you’re not… if you don’t have a stake in the outcome of the business to kind of get excited and stay excited. So I think you should start the business.
When it comes to… what does the team need to look like? This is a spreadsheet that I teach on with a venture capitalist, somebody who’s in venture capital. And so this is his model for how you look at risk in a business. And then when you’re in venture capital, what you’re trying to do is you’re trying to reduce the risk of the business. So you’ve got all these different types of risk – technology risk, funding, risk, market risk, all these things, and talent is always the first and biggest one. And this is the number one thing you can address with a founding team.
If you’re starting a solar installation business, a lot of these other types of risks don’t really apply to you. I mean, we know the technology works. We know the market’s there. There’s all these things that are de-risked for you. The thing that’s on you with the founding team is the talent risk.
And so that’s really important – why your question about what does that founding team need to look like – is so important.
The good news with a solar installation business is it’s a fairly simple business. There’s two sides to it. There’s the business side, selling jobs, tracking paperwork, submitting permitting, accounting, all those things.
And then there’s actually doing the installation and design work.
So these are two sides of the business. And I think that when you start, you basically don’t have the luxury of having a big team. I think the smallest founding team you’d ever want to have is two people – somebody who’s really focused on the business side and somebody who’s really focused on the field side.
I think that almost always companies have a bent in one of these directions. I talked to a lot of people who are engineers or technicians who really understand what it takes to install systems, but they only have a very basic understanding of what it looks like to go out and sell. That’s probably the most common thing that happens in solar, but there’s also the other side. There’s really nice marketing and sales folks who go out, and they don’t really have much on the field side. They can’t really install. Maybe they’ve done a couple of systems. Getting really strong in both of these departments is what you’re trying to do, if you’re going to have a sustainable business.
When it comes to startups, there’s this really popular metaphor, which is like, if you’re going to build a car the way that people traditionally have done, that is like you focus in on the individual components and you build all those components and then you assemble them at the end.
Modern day entrepreneurial thinking completely rejects that concept. And the better approach is you start with a very basic workable product. And I think this is true for companies too. I think it would be wrong to – if your vision is to build a big solar installation business – is to try and start out as a big solar installation business.
I think that the skateboard model is a better idea. It’s less risky. And so starting with two people team or a very small team, picking up some jobs, and then funding the growth with customer revenue… I mean, I think we’ve learned enough and we’ve seen enough to know that that’s a better and less risky model that I would recommend.
I’ve started two companies well, three, but in one case with HeatSpring, I had a co-founder who I’m still incredibly close with. I trust. And in the other cases, I talked myself into starting a business with people that I didn’t have great relationships with. And I kind of considered… I just talked myself into it. I justified a lot of things. I blew past a lot of red flags. And I can tell you that I didn’t understand going into that, how bad it can be when it gets bad. And so I would say, whether it’s a marriage, starting a business, whatever it is, you’re better off not doing it, if you don’t have the right people on board rather than blowing past yellow flags.
So I would just encourage you, if you’re unsure if you have the right team, or if you think the other person may or may not be right – be patient because you can really burn years of your life getting out of a messy situation.
The fact of the matter is lots of businesses don’t succeed. And I think going in, understanding how you guard against downside risk is important. Even the bad situations that I’ve been in, I built great relationships with people. I have interesting fun stories that I can tell, having drinks with friends or helping other people start companies.
And I never made a bet I couldn’t afford to lose. I’m not happy about losing, but when I do, I don’t think of this concept of going all in and betting everything and putting your family on the line.
Some people think that that’s important to do because it forces you to succeed. It’s not really my style. And so I don’t advise for it for that either.
I do teach this Solar Entrepreneurship class that is free for Headspring members. But also I’m just available. There’s my email address [bhayden@HeatSpring.com].
I’m on LinkedIn – really searchable. You don’t have to take the class. I’m always happy to hear what you’re up to and weigh in and those things.
Brit: Awesome. Thank you so much for talking to us a little bit about starting your own solar company. This was really helpful, Brian. Thanks.
Brian: Right on, Brit. Thank you.