When I graduated from my MBA program in 2016, I created a list of 20 companies I found “super” interesting and wanted to pursue. I’ve re-pasted the original charts below. Nearly 4 years later, I find it even more interesting to revisit some of my ‘picks.’
Looking back, it’s clear I picked some companies did not turn out so great. Some of these companies were rescued (e.g. SolarCity), acquired in a non-spectacular exit (e.g. FirstFuel), or dissolved (e.g. Current), but a majority of them are humming along (without much fanfare).
Some key takeaways:
Success in the energy industry is extremely difficult, especially for venture-backed startups trying to disrupt incumbent players
It’s hard to distinguish winners and losers. Some companies that very appeared well-positioned and with massive funding (e.g. Current), didn’t do so well after all. It’s difficult to distinguish market/investor hype from fundamental business performance (WeWork, anyone?)
If you’re interested in long-term career stability, it’s probably better to go with an established player. With that said, I think the startup path is interesting, and the best time to work at a startup is when the opportunity cost is low and you don’t have too much to lose.
The winners I picked include the below…
NextEra: If you want to pick one successful energy company over the last year, it has to be NextEra. They created a highly successful business model with a solid, regulated arm and a leading development arm. Their stock price has soared over the last few years, and other companies look to replicate their success. I interviewed with them for a corporate development/M&A role at the end of business school, so they are definitely open to MBA grads (note: you’ll have to live in Juno Beach, which could be hard for some).
SunPower: It doesn’t seem like SunPower was a success from its 5-year stock price, but the company did a fantastic job facing challenges in Chinese manufacturing, utility-scale solar margin compression, and increased development competition over the last few years and pivoted away from utility-scale solar. The energy industry changes fast and profitability can quickly change. I think SunPower is well positioned for the next stage of growth.
And some of the losers (though definitely more to this list)
PG&E: Obviously the big change was the wildfires, and today PG&E is undergoing potential restructuring talks and will continue to do so in the foreseeable future. Reading about all their lapses in safety is a bit unsettling. It’s a shame as this was one of the leading utility companies and offered one of the best utility leadership reviews.
Current by GE: There was a ton of hype around GE Current when it first started. In 2016, GE pumped $1bn to create a leading C&I startup, with the goal of connecting their Predix analytics technology with smart lighting, solar, EV charging, storage and providing one-stop solutions to corporate customers. Years later, the company divested piece of the business and ended up in the hands of a private equity firm. Just goes to show how difficult the C&I space – a few companies have tried but few have succeeded.
Spruce Finance: Spruce was the leader in residential solar finance and offered PPAs for residential solar. It was founded when Clean Power Finance merged with Kilowatt Financial. However, the residential solar sector shifted from third-party-owned (“TPO”) systems to direct ownership via loans, and companies such as Mosaic overtook the market. It looks like Spruce has shifted their model to become a solar acquisition firm, backed by one of the bigger energy investors in the market.
For those of you active in energy space several years ago and recall some of these companies, I hope you enjoyed reading this. And for those entering the space today, I encourage you to create your own list and revisit these companies in a few years’ time.