Raj continues to discuss Silver Spring Networks. Here he offers insight into the analysis of the market and the product capabilities which they would offer, and his initial formulation of a plan of action.
SM: You were able to identify a very solid opportunity which would be long-lasting and in high demand, that sounds perfect! RV: I believe so. Based on our many conversations with utilities over the course of 3 or so months, it became very clear that if someone could deliver something like this, utilities would be eager to have it. But what SSN was at the time building was, while a solid product, more akin to existing solutions than to the richer product the market was clearly demanding.
SM: After you verified the market, what was your next step? RV: Our next step was to determine whether or not the product we envisioned was technically feasible. After some work on this, we knew that it was, but that it would require some re-thinking and re-working of the current SSN product. This could be best achieved by expanding and augmenting the current team. After speaking with the current SSN management team about the adjusted vision, and backed by several months of analysis and evidence, we found that they were eager to address this broader problem.
SM: Was this essentially your project within Foundation? RV: At this point I had been working on the project largely as a 3rd party, the normal “help out with analyzing deal X”. But over the course of several months, I increasingly felt inspired to work on the problem myself. I really liked that the problem was intellectually interesting. I’d built some large networks before, but the ones we are talking about here are REALLY large networks.
As a data point, my local utility Pacific Gas and Electric has over 4.5 million customers. When one adds up the devices in such a network, electric meters, gas meters, distribution infrastructure, smart devices in the home such as thermostats, you soon realize you are dealing with networks containing tens of millions of devices. Building a network that supported that scale of data volume, operational automation, etc., was a great challenge.
I also felt the problem was financially interesting. The utility industry is one of the largest on earth and spends billions of dollars a year in infrastructure; getting just a small part of that budget could be a very profitable.
Finally, the problem was socially interesting. We have a worldwide problem with energy consumption. Our normal reaction to this is simply build more generation, which has had a huge detrimental impact on the environment. While much work and money is being poured into alternative, less harmful sources of supply (e.g., wind, solar), these alternatives are still some years from wide scale production and deployment.
What SSN’s technology would allow is better management of the distribution and consumption of energy, helping address the problem from the demand side. It would help reduce the need for more generation, allowing time for alternatives to develop. When those alternatives do come to fruition, utilities will have a powerful and high-function network in place that will allow them to continue to reap operational benefits.