Silicon Valley has been losing appeal as the “it” place to launch a startup. As large swaths of land in the area are increasingly taken over by mature tech companies like Facebook, which hired the famed Spanish Guggenheim Museum architect Frank Gehry to design its new sprawling office space in Menlo Park, many entrepreneurs are finding themselves priced out of the area.
But less than 45 miles away, and across the bay from San Francisco, sits Oakland, Calif., the most racially diverse city in the country. The city is in the midst of a renaissance: Downtown neighborhoods once deserted and crime-ridden now bustle with hip bars and innovative restaurants.
Helping to feed the city’s rejuvenation efforts – and make Oakland a top choice for California solar startups with a tech bent – is Emily Kirsch. Kirsch is CEO and co-founder of the Oakland-based incubator and accelerator SfunCube (Sfun stands for “solar for universal need”).
SfunCube’s incubator, which currently headquarters 16 companies, is a collaborative co-working space for solar startups. The accelerator is a nine-month program during which SfunCube invests in a startup and provides the company with free office space and access to an array of services, including legal and financial, to help speed the companies to scale. There are four companies presently enrolled in the accelerator program.
All companies within SfunCube’s 14,000-square-foot, industrial-chic office space are working to bring solar’s soft costs down through software and finance solutions.
Kirsch started SfunCube’s incubator in 2013 with co-founder Danny Kennedy, who also co-founded the Oakland-based solar installation giant Sungevity. Kirsch’s previous experience includes being the lead organizer for a green-collar jobs campaign at Oakland’s Ella Baker Center for Human Rights, and serving as a fellow at the Young Climate Leaders Network.
Kirsch and Kennedy brought the first company into SfunCube’s accelerator last year.
Already SfunCube’s companies are gaining traction. Among them are incubator companies like Mosaic, which uses a crowdfunding investment platform to help customers own their own solar system, and the now-acquired Sunible, which provides an online service for homeowners to compare solar installers and get quotes.
And earlier this month, SfunCube accelerator company UtilityAPI, which uses software to grab homeowner electricity usage data from utilities as a way to quickly take care of an early step of the solar process, won $30,000 from a U.S. Department of Energy solar business competition.
SolarEnergy.net spoke with Kirsch about how she is helping fledgling solar companies navigate the turbulent life of a startup, and what SfunCube is doing to bring more gender and ethnic diversity among industry entrepreneurs. This interview has been edited for length and clarity.
What’s different about SfunCube’s incubator and accelerator compared to those dotting Silicon Valley and other tech hubs throughout the country?
A lot of incubators and accelerators try to cover many industries and end up being broad, but not very deep. At SfunCube we are solar-specific. Because we are exclusively focused on solar our investors, mentors and business service partners, like lawyers and accountants, know the solar industry. Being able to share their experience with a new generation of solar entrepreneurs has brought tremendous value in a way that a mentor, or investor, or a lawyer who isn’t in the industry couldn’t do in the same way.
We also run our incubator and accelerator together, which is unique. The companies in the incubator and accelerator benefit from the collaborative ecosystem we have instilled here.
What solar business currently coming out of SfunCube’s accelerator program do you think could have the greatest impact for residential solar?
One startup about to graduate from our nine-month accelerator is UtilityAPI. UtilityAPI has automated the process of getting utility bill data from utilities. As it is now, if I want I to go solar today, and my home has the right conditions for it, the first thing I have to do is send 12 months of my utility bill history to the solar company. If I have paper bills, I have to mail them. Solar companies also spend a lot of operational costs as far as the staff time that’s required to access that data.
UtilityAPI solves this problem. UtilityAPI instantly downloads utility bill and usage data. They built algorithms and scrapers to automatically download bill history as long as the potential solar customer authorizes them to do so. So they take a process that can take hours, days, even weeks or months, and turn it into something that can happen in seconds.
What do you look for when picking a solar company to join SfunCube’s accelerator program?
We call it the three M’s. The first “M” is the management team. The team is first and foremost because we know the business model is going to change. Business plans pivot. That’s normal and to be expected. If the management team is solid, we are confident they can weather those transitions.
The second “M” is market opportunity. You have to be able to make money. You could have an idea that is game-changing, but if you aren’t going to make money, then you don’t have a business and nobody is going to invest.
And the third “M” is the financial model. How is their product or service sold? How quickly is the startup able to scale?
Not everyone can build a successful business. What warning signs do you look for if a solar company is going to fail?
We worry most about breakdowns in the team. We can help, but sometimes it works and sometimes it doesn’t. Also, the market has to be there and the financial model has to be scalable.
I was recently at a venture capital event and talked with a couple of investors who said, “Oh, you’re in solar? Yeah, we invested in that back in 2012. We got burnt. I haven’t looked at it since.” There is a common experience of hardware investments gone bad, given the dramatic price drop that we saw in silicon around 2012. So that turned investors off.
But we are seeing a shift back toward investments in solar, especially because of the opportunities to make a substantial and relatively quick return on software and finance solutions, which inherently have much lower capital expense costs compared to hardware.
Solar is still a male-dominated industry that lacks ethnic diversity. What is SfunCube doing to identify and cultivate more diversity among its solar entrepreneurs?
SfunCube participates in initiatives like C3E, which is a partnership between the U.S. Department of Energy and MIT that supports the leadership of women in clean energy. Through that network I have met a number of female co-founders and CEOs that have started solar businesses.
We recently hosted our annual solar hackathon where more than 100 developers, designers and solar experts from across the Bay Area and around the country hacked solar solutions using data sets from our sponsors, like Enphase, Sunrun and Sungevity, along with NREL. We intentionally target developer boot camps and design schools that are focused on supporting women and people of color from programs like Women Who Code and Black Founders, both organizations dedicated to diversity in tech.
Racial and gender diversity is important to us. We are in Oakland, Calif., the most ethnically diverse city in the country. Our entrepreneurs, and the solar industry as whole, should reflect the communities that we live and work in.