Cooperation interview: Energie Steiermark / next incubator

Fresh wind in the energy industry through startup cooperation – Interview with next incubator

In cooperation interviews, we regularly present collaborations between companies and startups as well as their new solutions to existing challenges and problems. Today we talk to Mathias Schaffer from Energie Steiermark and the next incubator.  He reports on successful startup cooperations and gives helpful tips and tricks for collaboration. You can find the video recording here.

Christoph: Welcome to a new cooperation interview! Today we have Mathias Schaffer from next incubator, or Energie Steiermark, as our guest. I am glad that you are here today. Maybe you can start by briefly introducing what you do and what you do?

Mathias: Hello Christoph, thank you for the introduction! The next incubator is more or less the innovation unit of Energie Steiermark. We are one of the largest energy utilities in Austria and in 2017 we took the conscious step of locating innovation somewhat removed from our core business. To this end, a separate subsidiary has been founded that has neither “energy” nor “Styria” in its name. This is Next GmbH. The next incubator is a classic business incubator with which we handle our startup programs. We screen and scout startups globally according to the defined need that we have. Already with the need that the solutions that we discover and develop diffuse into the core business. That is the one issue what is very strong with us and is the core business of the innovation department of the incubator. We also continue to develop in one to two year steps. Be it thematic orientations or new tools.

What we also do, which is more or less our second innovation hub in addition to the next incubator, is the Green Energy Lab. This is similar to a business incubator for things that are far removed from the market. The Green Energy Lab is about organizing research projects. As a kind of preliminary stage to innovation, when technical solutions are one or two years ahead of the market, we turn them into research projects and have set up our own structure in the form of an association. Together with other EFOS, by the way, which is super exciting. So much for the introduction.

Christoph: Perfect! That sounds super exciting. Specifically, can you tell us about an example of cooperation? With whom, or with which startup have you collaborated and what have been your added values from it?

Mathias: Just to put the dimensions in perspective of what size units we are in, we are a very small innovation unit with the next incubator, but still proud of the volume we are moving. We typically do one to two calls per year and then get about 400-500 startup applications in. That’s already an issue for us, that you then of course get them from the longlist to a shortlist with the necessary care and quality. Of these 400-500 applications, we then have about 30 larger cooperation projects where we really enter into closer cooperation with the selected startups on individual topics. If you look at our homepage, we are actually very open and transparent about which startups we have ongoing projects with. It’s very much about energy, but also mobility, which is a related business area for us. And increasingly, of course, in the area of digitization. We have also presented our cooperation examples very well.

What I have a bit of a pastiche for today, which can perhaps be a prime example in the area of digitalization, was the project with Powerledger. Powerledger is an Australian startup with whom we cooperated in the way that we were looking for a cooperation partner and a solution for P2P energy exchange. This is something very special in our business. It’s about trading energy directly, between end customers. When we started back then, it was not possible by law and by our market mechanisms. In the meantime, this is being prepared, and should soon be possible from the EU side, but also in national legislation. That was a perfect example for me now. How we found that was very unique, and also how the PoC and the pilot project was handled. We really learned how to work with startups that are on other continents. The coordination, and how we then prepared the use case as well, that was already unique. Just logistically, of course, how can you handle something like that with a partner that’s based in Australia? You were actually in Europe at one point and we happened to meet in Berlin because a blockchain conference was taking place there. That is of course also a point, this solution that Powerledger offers is not only purely functionally applicable for P2P energy exchange. But this also goes on top of the blockchain technology, which was already over the hype at that time and is now really established. These are diffusing very radically into different markets, you can see that coming more and more in the energy sector in addition to the financial sector. What we do in the innovation department and at the next incubator is to track down, pilot, and develop a business case and business logic. That worked well for Powerledger, as well as testing it out and determining feasibility.

But what’s also very important for companies, and what I’m particularly pleased about when it works, is that it continues after that. So it’s not like this was a cooperation with Powerledger, where you say to the startup “Okay, that’s it” or “Thank you, we’ll stay in touch”, and then never hear from each other again, but it continues. They are now also in contact with our business units. It’s really purely about business after that. That’s one example I would like to give. But please all have a look at our homepage. There are an extremely large number of examples there, and each example is different in itself. Actually, I could tell a story about every startup. For example, we have very regional startups that are very hardware-heavy. There, the collaboration is really completely different than now with Powerledger, which is a digital platform. That’s a different league again.

Christoph: Those are good insights. Maybe you could tell us what Powerledger does in terms of collaboration? What is the added value for you, why did you decide to work with Powerledger and not do it yourself?

Mathias: That is generally a bit of our issue at Energie Steiermark, we are not a technology company. We are purely a service provider, planning, building and operating energy network infrastructure. And it’s not just about power plants and, of course, the core areas are digitalized to the highest degree. The entire value chain from generation and distribution to trading. If you have the insights, you not only have the hardware, but also the IT systems, the logic and the processes, which are highly automated and highly complex. When we really say that we want to innovate in this sector, the trigger was the point where we said that we actually have to start with the core business itself. In a company, it is quite a challenge to get the okay for this. And I’m really very happy that we’re getting a long leash from our corporate board. I don’t find it so understandable that we are allowed to cannibalize ourselves a bit. Also through pilot tests, together with partners who offer us the solution. I believe that if you want to remain an innovative group or an innovative company, it is a key success factor that you dare to do something. And to anticipate these things that are coming your way anyway, and to use them and take them with you and try them out.

At Powerledger, we had a very unorthodox selection process.  So not via challenge, but we looked at which, how you can eliminate intermediaries with blockchain as a disruptive technology. That was the one idea, so you just had to find a Blockchain company that offers a solution in your industry that is now no longer a prototype, but already halfway working. That was the one point. In the second step, we didn’t make a call, we just looked via market observation how the relevant blockchain companies are developing on the crypto exchange. That’s actually a completely different approach for us, completely new to selecting startups. At that time, companies were definitely funding themselves that way. Not the way you know it classically, that you say I have an idea, find two investors and then I build a product. But in this area, it’s radically different. They have raised enormous money by selling on the crypto exchange. That confirmed that again. Normally, I’m not a fan of so-called swarm intelligence, because that can also go in another direction. But in this case, we really made a good choice in selecting our innovation partner. The decisive factor was ultimately the market response and the fact that we tried out the solution ourselves relatively quickly. That was wonderful, because they simply had a solution, very quickly, and within a few weeks we had the cooperation agreements. That was already a challenge, because blockchain was not compatible at that time, with GDBA, purely with the European approach. That was a project in itself, to implement that in general operations. That is always the point that is legally pending with us. That is the reason why they are still with us. I actually think that the demarcation between where our responsibility as an innovation department, as a business incubator, begins and how the handover to internal customers works is a very good example of how this can work. That it continues and is not a flash in the pan in that sense.

Christoph: It’s really exciting how you got to the pilot project so quickly! That there are then completely new evaluation mechanisms, but that you then also dared and had the courage to test and validate such a disruptive model. My thesis would be that the experience and the learning curve that you go through is enormously valuable when the technology is possibly allowed later anyway. Then you would also have to think about how to deal with it. But if you’re already making the learning curve today, and maybe even already have an offer, that’s also a huge competitive advantage. Even if you may cannibalize certain things internally. But otherwise that will be canibalized externally, otherwise the market will take the market in the future. Maybe a follow-up question, what are your top collaboration tips and tricks for enterprises and startups?

Mathias: I think that’s really my personal perspective, that you have to do it very individually. How is the interaction, how is the communication? Of course the processes and everything have to fit, but that’s the craft. If you can’t do that, then you might as well quit. The most important thing is that you can work in a team and play with the competencies, that you are properly organized, that you present yourself competently in the direction of the group, the internal customer, but also in the direction of the startup. I think that’s the must-have, so to speak. If that doesn’t work, that you are perceived as a competent partner, then every startup will jump away. You have to accept that as a basic requirement, and I think you only have one shot at that, or one option. If you really work with startups, and you need so, in terms of the classic barrier, maybe in the legal department seven months until you have an idea and so on, no one ever approaches you again. That is my hypothesis. Conversely, I don’t think we’ve done quite as badly, because there really are a lot of startups approaching us. That’s point one: Please learn the tools before you go out and think you can innovate.

The second thing I would really limit now to when you do an innovation project, the more radical it is, the more it matters. That’s the courage, internally and also that you don’t appear so in need of harmony, that you have the courage to simply try things out. You have to be extremely careful here, because in large organizations it can often be healthier not to risk your job. I think we have a lot of people in our team who are simply passionate about what they do. So, courage and passion, where do you learn that?

Christoph: Good question, but it also sounds very entrepreneurial to me! Even if it’s not your own startup now, maybe it’s similar tasks in the company.

Mathias: You have to be a bit of a hybrid. How thick the corporation is, you can’t explain that to a startup, that would paralyze. Conversely, it’s also not healthy for the corporations if they adopt the startup mentality one-to-one. We’re actually the connector, and that’s also a lot of fun in the team.

Christoph: Sometimes we also see ourselves as bridge builders, creating the connection between the two different ways of working, and also the cultural worlds. Maybe finally, you have just announced a call, can you briefly tell us something about that?

Mathias: That is very important, good that you ask Christoph. This is in the direction, as I indicated before, we always do this cyclically, what is the innovation in the innovation? And we have now just this year opened up a completely exciting topic. At least I haven’t seen an innovation hub or business incubator change so radically towards sustainability. That is our top topic. We have now started to apply sustainability criteria to all processes. From the selection of startups and cooperation partners to the fact that we align our selection of topics with these SDGs (sustainable development goals). Of course, it should also fit for us and in our understanding. The one radical thing we are doing is we are trying to develop the next incubator as an innovation hub for sustainability. If anyone is interested, please have a look at our website. We’ve just started there, and we’re really on our way. But I would also like to extend a warm invitation to everyone to contact us on the subject of sustainability. I am convinced that this is the number one post-Covid topic.

And the second, alongside sustainability, is the issue of digitization. Not only are society and the people themselves increasingly concerned about this, but of course companies are too. We have a challenge going on there, which now compares a bit with the blockchain topic, which is also so hyped in 2017. From my personal perspective, the topic of AI is hyped today. We are currently running a challenge with Techhouse. We are looking for AI systems for the energy future. Of course, this has already been broken down and tried to make it tangible. In a concrete problem, simply to make a match in the expansion of renewable energy. There are a lot of logistics and communication efforts in between. How can I use artificial intelligence to make this more optimal for both sides? For the company, of course, on the expense side, but also on the customer journey side for the customer, which is not to be forgotten. I find that super exciting, a synergy between our two headings of sustainability and digitalization. I don’t see digitalization like many others just as an efficiency mechanism, but really as a way to add value and de-fog certain things. Or even to create new business logics. The call is still running, application deadline is March 7th and “Please apply now” is what I say!

Christoph: Perfect! Then to all startups, take the chance, also here under the video, or under the article we put the link in. Many thanks from my side that you have taken the time! Very exciting empirical data from your cooperation and your tips and tricks. Good luck with the current challenge, that there are many applications. And see you soon!

Here is the application for the current challenge.

You can finde more startup collaboration interviews on our YouTube-channel.