Apr 10, 2018

Sabin Stories: PowerHouse

Katrina Barlow (SOM ’17) came to Yale interested in starting a company. “There’s no better time to start a company than while you’re at school,” she says. “What do you have to lose?”

The first thing she needed was the right idea, and she found it when she learned about the potential for households to benefit from a sort of “energy arbitrage.” Due to the low marginal cost of renewable energy, electricity from renewable sources is cheaper than from conventional sources, but it is not available all the time. If consumers can shift the bulk of their energy use to the times when the grid is powered by renewables, they can both save money and help the planet. In this situation, Katrina saw the opportunity for a viable and environmentally sustainable business model. Over the next year and a half, she developed this idea into Powerhouse, which won the Sabin Sustainable Venture Prize in 2017.

Katrina knew that she lacked the capacity to build the venture on her own, so she assembled a team with complementary skills and expertise. For instance, Ben Serrurier (FES ’17), brought extensive knowledge on the energy industry and utilities. The team also included a designer from Spotify, a project manager from Vox media, and two web engineers. All the team members were individuals whom Katrina knew and had previously worked with. She understood that a strong, well-rounded team would be fundamental to a strong business. “You need three things no matter what,” she says. “You need your idea, you need a viable business model, and you need a good team.”

Early on, she received vital support through a grant from the Venture Creation Program, which has since evolved into the CITY Accelerator. “I probably would not have done PowerHouse if I didn’t get the first thousand-dollar grant to guide me through the first steps,” she says. That small amount of funding was essential for lowering the bar to becoming an entrepreneur. She appreciated having an opportunity “where you can literally walk in, without a business plan and just an idea and say ‘I have three months and a thousand dollars to see whether this is worth anything.’”

With that initial guidance and financial support, Katrina and her team fleshed out the business model for Powerhouse. They decided to create an app where consumers could track the cost and environmental impact of their energy use, in real time. With the app, consumers could find the cleanest and cheapest time to charge home batteries, from which they could draw power when electricity was dirtier and more expensive. The PowerHouse model combined a software component (the app) and with a hardware component (the battery) to achieve energy savings and environmental benefits.

The team started on the software side, and they partnered with a team of student consultants to look ahead to the hardware side.  The consulting team worked on the project through a class called Social and Environmental Consultancy (SEC), now known as Sustainable Entrepreneurship Consultancy. As Katrina’s team prototyped an app, the SEC team modeled out the size of the battery that would be necessary to support the desired impacts.

Katrina Barlow (SOM ’17)

By this point, in April 2017, Katrina was familiar with the Sabin Prize. She had already taken advantage of several other entrepreneurial resources at Yale, and she led the Entrepreneurship Club at the School of Management. She saw PowerHouse’s solution as completely in line with the mission of the prize, and it was an easy decision for her to apply. After working hard on her application, she was selected as a finalist, and she received further support and training as she prepared for the final round, a live pitch at Start-Up Yale.

For Katrina, the day of the pitch was the culmination of almost two years of effort, and it was a clear high point of her time at Yale.  “So many people had touched PowerHouse at that time that it was so cool to bring it all home,” she says.

PowerHouse won the Sabin Prize, receiving $25,000 and a spot in the YEI Summer Fellowship (now known as the CITY Summer Fellowship). Those resources allowed Katrina and her team to focus more deeply on building out the business and exploring its viability. Working full-time on the venture, Katrina discovered some problems with the PowerHouse business model that were not apparent before. To receive the benefits of energy arbitrage, consumers would need a large, expensive battery, and it would take a very long time for their savings to compensate for this cost. Additionally, user interviews showed that consumers wanted the system to be automated, which would have required home assistants and an internet of things that may be more common in the future but is not widespread now. Based on these findings, Katrina reached an insight that is common for entrepreneurs, though disappointing: her idea was not going to work. ­­­­­­As a viable, for-profit business, it would require either a lower cost for batteries or a greater savings from switching to renewable future, as well as a wider internet of things. She also realized that the idea might be better suited for a large tech company like Google, Amazon, or Tesla, which could much more easily roll out the technology at scale and connect it to existing systems.

By the end of the summer, Katrina knew that she would need to put PowerHouse on hold and begin looking for a full-time job. She used her skills and connections from her prior work as a journalist to land a role in business development at Vox Media. She calls herself a “re-emerged journalist” but has not abandoned her more recent identity as an entrepreneur. Because Vox is a fast-growing, venture-backed media company with strong ties to the tech world, Katrina says, “everything that was entrepreneurial about my business school education is now being applied in real-life.”

Katrina still owns the name and license for PowerHouse and continues to envision how the idea can live on. Though she thinks about PowerHouse every day, she has no regrets about ending her full-time pursuit of the venture when she did. She sees herself as living proof that failing fast is a key part of entrepreneurship. “It’s important to recognize that entrepreneurs who are running profitable companies are often on their third or fourth company,” she says, “and it’s a perfectly reasonable outcome for the first one not to work out.” When asked if she has any new start-up ideas brewing, she emphasizes that she’s currently focused on her job at Vox but also adds coyly, “I’m always scheming.”

Looking back, Katrina feels she learned more from starting PowerHouse than any other experience she had at Yale, and even though her venture has not worked out (yet), she enthusiastically encourages other students to follow in her footsteps. “I learned so much that my classes wouldn’t have touched on,” she says, “I wish everyone started a company!”