Calgary, An Ideal Launch Pad For Energy Startups

Calgary is a global leader in the energy industry. It has the highest concentration of head offices per capita in Canada, and significant access to financial and human capital. This sounds like the ideal launch pad for energy startups. Right? Well there are definitely advantages, but success is not guaranteed and you need to know how to make the most of those opportunities. Here are what two Calgary energy startup CEOs had to say about making the most of operating in one of the leading energy capitals in the world.

Enter David Edmonds and Steven Koles.

Edmonds is an experienced entrepreneur and Industry Chair for A100. He is also an Executive-in-Residence with Innovate Calgary and the current CEO of nFluids Inc.; a Calgary-based startup developing a cutting edge fluid additive for the oil and gas industry.

Koles is an experienced executive who has been involved in helping grow several startups, including Group Telecom where he was the fifth employee hired. He is also the former President and CEO of Hemisphere GPS and a former VP at AOL Canada. He was recently involved with Steeper Energy and is currently the CEO of HiFi Engineering: a company with patented fibre optic technology for monitoring pipelines for preventative leak detection.

With this list of credentials these guys are no strangers to knowing what it takes to grow early-stage companies.

So what makes Calgary a great place to launch an energy startup? Edmonds states the number one benefit as Calgary’s entrepreneurial spirit: “Calgary’s culture is based on getting things done. It doesn’t matter what industry you are in or what job you do, Calgarians have a drive to succeed, and don’t take no for an answer,” he says. “Plus Calgary has all the right ingredients in one place; customers, capital, and industry. Calgary is for oil and gas startups what Silicon Valley is for tech companies. “

Another key advantage for energy startups is the level of personal comprehension that investors and customers have regarding industry challenges. “Most of them already know the challenges you are trying to solve first hand,” says Edmonds. “This means you don’t need to invest valuable time educating your stakeholders.” Edmonds also notes that this is one of the key advantages often overlooked is Calgary’s world class post-secondary institutions, including the University of Calgary, SAIT Polytechnic, and Mount Royal University.

According to Koles, Calgary’s high rankings on various indexes, including its number one ranking of the top 10 large cities to live in Canada (MoneySense Magazine, Conference Board of Canada) and its fifth place ranking of the most liveable cities in the world in 2014 (Economist Intelligence Unit), make Calgary a great place for attracting highly qualified talent.

With all these advantages, are there any challenges to launching an energy startup in Calgary? Koles points to the slow adoption of innovation in the energy sector. “The time to market can be very long compared to other industries,” he says. “Take for example the telecommunications industry which is extremely competitive. Even the smallest incremental innovation can provide a key competitive advantage. This is not the case with the energy sector. Although a new innovation could have the potential to reduce cost, increase production, or provide environmental benefits, it can  also impact other well established operational processes and this can hinder adoption. Understanding how your innovation will impact the entire organization from a strategic, operational, and safety aspect is key to influencing organizations to adopt new innovative technologies.”

Both Edmonds and Koles also highlight the capital intensive nature of energy innovations. Most investors want to invest after the product has been proven, but capital is also needed to get the idea tested. There is still a gap for seed capital to move an innovation from concept to lab to field. Although this gap is narrowing, more is needed.

When asked what advice they would provide to others entering the energy startup arena, both clearly stated that having champions within the industry that believe in your innovation, understand its value proposition, and are willing to help you identify the hurdles and navigate the environment is key to success. “People in the industry are very open to sharing their knowledge. This is a tremendous resource that you need to make the most of,” says Edmonds. “Also taking the time to really understand your customer’s challenges and validate the need for your innovation is key. Fundamentally, business is business. Do you have a product that people need?”

Koles adds that getting focused is key. “It’s easy to start thinking about other areas of application for your technology than the one you originally started with,” he says. “Set tangible goals and stay focused!”