Green Energy meets Blockchain: Berlin startup Lition uses decentralized databases to connect power plants and customers.
Lition is for everyone to benefit: Green electricity power plants can sell their energy at better conditions than on the free market. End customers are happy about particularly favourable electricity prices. We learned from Chief Operating Officer Dr. Kyung-Hun Ha why the business model of the Berlin startup still works and what role blockchain technology plays in it.
Kyung, Lition is a blockchain-based energy supplier. Can you briefly tell our readers how the interplay of energy supplier and blockchain technology works?
Very much. We were founded in December 2017. On the one hand, we at Lition are working on a unique blockchain technology that is predestined for use in companies due to its features. On the other hand, with Lition Energie GmbH we act as a licensed energy supplier and in this context offer peer-to-peer energy trading between customers and producers. If required, each energy trade can be traced easily, transparently and in compliance with the highest security standards on our blockchain.
Where does your special focus on energy come from?
This is the industry in which we have been professionally active in recent years. I have worked in various management positions at energy suppliers. At Vattenfall I met my partner Richard Lohwasser. At the time, we discovered that we were both tech-savvy and had an entrepreneurial mentality. The idea of connecting customers directly with energy producers is still relatively new in Germany. We were sure that this was something that could really revolutionize the energy market if implemented properly.
We have built up the companies and established partnerships, e.g. with SAP or GASAG. Lition now has ten permanent employees in Berlin and ten freelance developers in Belarus. As an energy supplier, we have been on the market since the beginning of June 2018. However, our initial focus was on blockchain technology. We have been actively acquiring new customers for our energy supplier since 2019. Nevertheless, we have already won customers from over 100 cities through Word-of-Mouth. We are currently successively connecting further green electricity producers to offer our customers genuine green electricity from their region.
A special feature of Lition is that you can choose almost every day from which cooperating green electricity power plant you get your energy. However, I can imagine that very few customers really want to take the time to do so.
That’s right. On average, every third customer changes their green power plant in the first two weeks. But most customers don’t really want to deal with the topic of energy in a really great way and change their power plant regularly. The priority for customers is to ensure that their electricity is produced sustainably and that they receive it at a fair price. That’s why most Lition customers choose their power plant or simply choose our unbeatable regional standard electricity. Then the conditions remain constant. With Lition, the customer has the choice and there is transparency regarding the energy producers. Our customers receive genuine green electricity at favourable prices. This has never been the case before.
With you the power stations may raise even a small surcharge per kilowatt-hour. On the other hand, your customers still get more favourable conditions than with many classic energy suppliers. What makes this possible?
This is mainly due to the fact that we have very lean processes and with the help of blockchain technology we can avoid middlemen like the regional power exchanges, which normally lie between the energy supplier and the actual power producer. We are virtually this marketplace ourselves and take over the entire administrative settlement, including contract management, customer service, etc. In addition, we are highly digital and have almost no paper-based processes.
In your daily work, you cooperate not only with the power plants, but also with large corporations. What should founders be prepared for who want to enter into such partnerships?
Large companies are often slower. There are many more regulations and structures to observe. Decisions are made by different departments whose interests do not always coincide with their own. And decisions are rarely made at short notice. Corporations want to act quickly. But they often simply can’t do it because they are trapped in their organizational structures that have been built up over the years.
For founders, it is important that the group really fits the start-up. In order for a partnership to be profitable for both sides, the respective objectives must agree. This should be urgently checked in advance.
A decisive factor for the fruitful cooperation at Lition is that we have concrete contacts who have the actual authority to make binding decisions and the competence to answer specific technical questions.
What are the advantages of startups over corporations?
In a start-up, you can react more quickly and make changes at various levels. Start-ups must be familiar with a wide range of topics and master constantly changing challenges. This makes daily work exciting. In a large corporation it can happen that you are just a wheel in a machine. This can have a negative effect on the work mentality. The coolest thing about startups is that you can make a big impact in a relatively short time, which is quickly visible and tangible. This is a very satisfying feeling.
I think corporations learn that the pragmatism that start-ups sometimes bring with them can also be an advantage for themselves. Companies hope that the cooperation will increase the innovativeness of their own employees or give them access to new technologies in order to expand their own business model or complement their product portfolio. Knowledge transfer is an important factor for both corporate groups and start-ups.
On the other hand, start-ups also benefit from a possible gain in reputation and increased awareness through cooperation. In concrete terms, cooperation can mean access to highly competent and usually expensive resources, which leads directly to time and cost advantages for the startup. However, I also see the advantage in the fact that corporations provide stability as reliable partners and help to make conscious decisions instead of rushing to them. The great thing about cooperation is that both worlds can get a glimpse of each other. As I said, everything is in the cloud with us, we are almost completely paperless. I think we can inspire.
As a former manager in a company, you can certainly give us a few tips on how to convince established companies to found themselves.
The most important factors are competence, respectability and vitamin B. The latter makes it so important for founders to network and exchange. The same applies to companies that want to discover good start-ups. Ideally, start-up founders have already gained experience in established companies. Then you are familiar with the structures and ways of thinking, you know the “corporate language” and you understand what established companies pay attention to.
Finally, a personal question: you used to work for Vattenfall, but now you sell green electricity. – Where did you discover your green conscience?
I have two children, Richard also has a son. You simply see the world differently when you become a father and take responsibility for future life. Maybe some people might find this sentimental, but today I really ask myself: “How can you leave a good footprint in the world?
LinkedIn: Dr. Kyung-Hun Ha
Ambivation connects established companies with startups for innovation partnerships. As an innovation consultancy and matchmaker, Ambivation facilitates collaboration between founders and executives for general exchange, concrete customer, supplier or research partnerships. Ambivation supports companies in the identification of needs, startup identification, startup evaluation and initiation of cooperation. Formats such as research of relevant startups, startup monitoring, strategic cooperation consulting or event formats such as startup tours or Design Thinking workshops serve this purpose. The monthly newsletter also informs curious company representatives about current collaboration examples and events related to these cooperations.