Carbon Lighthouse is a rare breed of young company – an environmental organization executing nuts and bolts building retrofits, while seeking startup-like growth. Startups seek exponential growth and wide market reach, while most service companies doing physical work (e.g. contractors, restaurants, consultants) have a local focus and scale more or less linearly with the number of staff. Carbon Lighthouse was founded with the audacious goal of solving climate change and we intend to get there through relentlessly pursuing practical solutions, starting with energy efficiency in commercial and industrial buildings.
To meet our mission, we need to be both highly local while also rapidly scalable. Interestingly, this exact challenge faces many socially motivated ventures. The recurring storyline is a huge, seemingly unsurmountable challenge that needs to be tackled quickly – education in inner cities, clean water, malaria – and solving it requires working with people and infrastructure – individually, locally, and personally.
Scaling this type of business model, where there is no substitute for hands-on action, is hard. Teach for America is arguable one of the most successful examples from the non-profit space, yet there are placing only 10 times more teachers in schools per year today than they did at their start 20 years ago. (Teach for America started with 500 teachers in 1990 and placed 5,100 new teachers in 2011.) Zipcar, the most successful car sharing company in the U.S., is another example. When they were acquired in 2012 after 13 years of business they were profitable and had 800,000 users, a business success story, but they have not fundamentally changed the landscape of personal car ownership.
Given the difficulties of rapidly scaling this type of company, why did Carbon Lighthouse choose to pursue such a labor intensive solution (physically managing energy efficiency projects) to a problem that requires immediate, scalable action (climate change)? There are some very good companies that are developing software solution for reducing energy and helping mitigate carbon emissions.
However, actually solving climate change is an infrastructure problem; someone needs to physically enter buildings and do a thorough job or making them run better, so that is what we are doing. This puts us in relatively uncharted waters when it comes to growing our type of company as quickly as we need to and our mission is our only guide. There are three key areas that are critical to scaling, each of which has been strengthened and focused in surprising beneficial ways by our strong and unwavering commitment to mitigating climate change.
Being a good energy efficiency engineer is hard and not terribly glamourous. It requires doing complicated engineering calculations, conducting potentially dangerous field work and interacting with C-suite executives all in the same day. People with these skills are really hard to find, but we have been extremely fortunate in recruiting and have securing our top picks in every hiring round.
Moreover, in the three years since our founding not a single teammate has left the company. There are many reasons for this, but a few are directly related to the strength of our mission. First and foremost, making the mission front and center during the recruitment process attracts people who are passionate about what they (and we) do. Second, once people are one board, our mission unites us as a team against a larger challenge.
This keeps us from getting bogged down in details of small ego-related issues. I have personally watched hundreds of disagreements get resolved by refocusing the discussion on how best to serve the mission.
As a company, making physical changes in the world, Carbon Lighthouse’s ultimate success depends on changing an enormous number of valves, pumps, fans, and other equally exciting assets in buildings. Since valves cannot be changed by an app, our mission necessarily requires us to grow our team and make it possible for each person to be more productive each month than they were the one before.
In recognition of this, we have worked hard to make sure that our company has a culture actionable innovation. Our first priority is to innovate and automate ourselves out of the labor and tasks wherever possible, such as downloading field data. Our second priority is to increase achievable energy savings per building by improving modeling, reducing the cost of installing measures, and accelerating the measurement and verification process.
Our third priority is to develop new ideas for solving climate change. Carbon Lighthouse’s mission motivates a clear understanding of these priorities and focuses every team member’s work in the same direction, resulting in rapid iteration and improvements on the highest impact areas.
Operations and Measuring Progress
Our mission has given us the foresight to invest in long-term company infrastructure and operations early. For example, because we will need thousands of engineers within the next decade to achieve our goals, we invested heavily to create a program that reduced the training time for our most recent hires from six months to six weeks. The value of this asset will grow exponentially as we do. Our operations team also spent hundreds of hours creating a project management tool that reduces project time by dozens of hours per project.
Without the focus on long-term scale provided by our mission, we would not have been able to justify either of these time-investments so early on. Our corporate metrics for progress are also driven entirely by our mission; they are CO2 reduced per person-hour of labor and profit per ton of CO2 eliminated – in that order. Because we see profit as a means to an end, and that end is solving climate change, we repeated defer short term profits to lay the groundwork for a more impactful economy in the long term.
This has made us a much more resilient and scalable company because our investment in research has opened up more savings per building and new market segments, while decrease labor per project.
Carbon Lighthouse’s mission commitment has put us on a challenging path, but it is also acting as the guiding light that will get us there. As we succeed and grow, we hope that the course we are charing will provide direction to the huge range of ambitious companies tackling rapid growth in hands-on industries.