The benefits of an EIR opportunity should be beneficial to both parties, entrepreneur and VC. In Raj’s case, that was certainly the case. He leveraged his past networking experience, as well as his time in the EIR program, to become a key contributor to Silver Spring Networks. Here Raj discusses how he initially “discovered” the opportunity.
SM: How did your work at Foundation translate into Silver Spring Networks? RV: While I was at Foundation, an existing company came by looking for funding. The company was called Silver Spring Networks (SSN), and was building networking products for gas, water and electric utilities. Two of the Foundation partners (Warren Weiss and Adam Grosser) looked at the deal, and while as initially constituted it didn’t look ideal, they felt that the overall utility market was large enough that there may be something there, and that we should investigate further.
SM: Would you discuss in some detail the ideation, customer validation, go-to-market strategies and funding plans? This is a bit unique where you are taking an existing company and using it as a platform to launch. RV: Certainly. We began to validate the market by speaking to a number of executives and operational folks at utilities. We soon discovered the demand for electricity was rapidly outpacing supply.
Utilties are under increasing pressure to better manage their infrastructures; just like all businesses they need to reduce costs, streamline operations, and perhaps most importantly, reduce emissions and pollutants to avoid the massive adverse environmental impact of power plants. We also learned that existing technology in the market was quite limited; for years, utilities had been presented with solutions that were application specific, proprietary, limited in functionality, based on low bandwidth solutions, and were manual which meant they were labor and effort intensive. Existing solutions had largely ignored the previous decade’s advances in IT and networking technology.
There seemed to be a clear need for a networking platform such as those available to most other industries: open standards based (TCP/IP, and related protocols), capable of running multiple applications, and it had to be secure. Such a network would be the core of what the utilities knew they wanted and needed, but weren’t being offered: a “Smart Grid” platform that would unify the disparate elements of their infrastructure, allowing them to enjoy the same kind of network functionality, remote management, automation, and similar benefits enjoyed available elsewhere.