Business evaluation: Clime

I recently read this great short article about how to evaluate ideas by Jared Friedman, a partner at YC. In it he describes a recurring theme across the thousands and thousands of startup pitches they see. They call it SISP, or “a solution in search of a problem.” It’s an idea that has no practical use in the market. I’ll come back to this.

Me, I’m a GMISI, or a “general manager in search of an idea.” I’d love to start something new in climate tech. To be clear, I’m still happily plugging away at MightySignal, but the shiny object flickering at me in the distance is a B2B climate tech solution that solves an enormous problem. What this is exactly, I simply don’t know. But I’m searching for it.

One of the first ideas that I went down the rabbit hole on is Clime. Clime is, unfortunately, a technology in search of a problem. In this blog post I make a case for how cool this technology is and how challenging it will be to commercialize it.


The Problem

This much I know: residential energy consumption is too damn high. Gates, Doerr, and every actual scientist of academic merit who has looked at the numbers agree. We don’t need to use so much gas at home. In fact, we don’t need to use any. We want to cook at home like we’re Bobby Flay but it’s just not necessary.

(Nobody needs to cook like this)

As I’ve described elsewhere on this blog, I’m no climate saint. After our remodel, we kept three gas appliances: our gas clothes drier (which we’ll swap for a heat pump drier when it poops out), our gas fireplace (which I love but use only in the winter) and our gas grill (which I use for maybe 45 mins a week, tops). We got rid of the major gas guzzlers: the air furnace, the water heater, and the cooktop range. As a result, we use about 100 therms less per month in the winter than before, a reduction of about 2.5 tons of CO2 per year. Just in our little house. (Note: we pay ~$50 per year extra for 100% renewable electricity.)

But enough about me. The problem is not everyone is making this change and we need everyone to do it. People opt not to go gas-free because even though the electric appliances are better (seriously, they are) they are also significantly more expensive. Higher price means lower adoption. So we have to do something about the price.

The Solution

Clime is a product that helps homeowners understand the price of inaction. It does this in two ways:

  • Clime has access to proprietary software that detects the leakiness of the house using only a temperature log. Energy leakage is money wasted. That’s heat leaving the house in the winter and entering the house in the summer. Space heating and cooling is always the highest household expense. Clime tells you if your house is too leaky.
  • Clime takes the data feeds of other Internet-connected appliances and provide suggestions for how to lower their usage cost. For example, noting the price of gas and electricity and how much hot water is consumed, it could demonstrate how swapping out the gas water heater will pay for itself within 18 months. Combining with the leakiness data, it could show how lowering the thermostat by one degree in the winter could save $150 over three months. For many Americans, this is real money.

So Clime attacks the pricing problem by exposing opportunity cost. It shows, counterintuitively, that the price of a new gas-free appliance is actually lower than the price tag because the cost of not upgrading is real. It’s there; most people just don’t see it. Clime exposes it.

The Problem with The Solution

To describe the problem with the solution, I’ll go back to the article that I linked to in the beginning. Jared lays out three ways to evaluate an idea:

  1. Is the problem really big?
  2. Is there founder/market fit?
  3. Is the solution timely?

I’ll tackle these in reverse order because the first point is the hairiest one for Clime.

Is the solution timely?

YES. Emphatic YES. The solution is timely for two main reasons:

  • The proliferation of IoT devices in the market. Everything is Internet-connected and it’s getting easier to connect those devices that are not yet online. Even water meters are coming into the Internet age.
  • Climate solutions entered the zeitgeist. The price of natural gas is higher than it’s been for the last 10 years. Extreme weather events are all over the place. EVs are everywhere too. Everyday people are starting to come around to the cause/effect relationship between greenhouse gases and climate instability.

I’m confident that consumers have a different mindset now than they did before. I see it with my own two eyes. This combined with amazing developments in household appliance technology make this solution possible.

Is there founder/market fit?

YES. I’ll just copy the bios I put for myself and my friend and potential co-founder Howard Chong. We’re complimentary. He’s the Ph.D. and I’m the M.B.A.

Howard Chong, Ph.D.

Howard Chong received a Ph.D. in agricultural and resource economics from the University of California, Berkeley. He taught microeconomics, environmental economics, and sustainability as an assistant professor at Cornell University, where he was a faculty fellow at Cornell’s Atkinson Center for a Sustainable Future. His past research includes studies of energy use in buildings of different ages, the impact of carbon markets on firms, and water markets.

Ryan Buckley, MBA

Ryan Buckley received an MBA from MIT Sloan and an MPP from the Harvard Kennedy School. He has co-founded, run, and sold several sales and marketing technology companies. Most recently, he was hired as CEO of MightySignal, a leading mobile data company, which he sold in 2021. He also teaches business, marketing, and sales at Diablo Valley College.

Is the problem really big?

MAYBE. I wish I could say YES. I really, really do. But I just don’t know.

Although the environmental problem is really big, the consumer problem may not exist. Our solution attacks the problem with information. It doesn’t actually solve anything. Maybe information is enough of a solution, but I doubt it. A lot of people may be happy to pay the extra money to keep their leaky house extra wram. They don’t want the hassle of a remodel, of being out of water while the plumber swaps out their water heater. Putting new insulation in the walls is disruptive. Putting new windows in the house is expensive and loud. There’s nothing fun about going through this.

So to the typical consumer, this may not be a problem at all. Homeowners may not be our target market after all, and I’ve been struggling to find another customer. I’ve considered real estate agents, contractors, inspectors…

I’m searching… for a problem. A solution in search of a problem.

I want a problem so obvious it just smacks me across the face. I should feel the sting for days. Clime doesn’t have that. Unfortunately. But I learned a lot while studying it.

Next steps

I still want to work with Howard on something. It’s possible Clime could evolve into that something. I’ll keep looking into the price problem. I have another idea that attacks price directly, actually lowering it for consumers. I also have information from local contractors showing that about a third of people doing remodels are opting for heat pump space heating and cooling systems. The other two thirds will eventually come around by mandate; it seems inevitable that cities will stop approving new gas meters and may start requiring gas caps during major remodels. This will create new opportunities for heat pump evangelists. Maybe I’ll start looking there too.

Leave a Reply