10: Oliver Knight, SmartShift Energy; strangers are keeping your passions a secret

1. In PK03, I mentioned my Dad was going in for surgery. Well, miraculously, it was a success! Thanks to everyone who sent us best wishes.
2. I’m running a Problem Harvest on the challenges of getting psychedelic-assisted therapy to market. If you’re interested in this topic (or just fancy a chat), send me an email!

Today’s kernel is about the extraordinary power of hanging out with strangers, illustrated perfectly ‘In the Wild’ by my friend Oliver Knight, co-founder of SmartShift Energy.

Often, we spend so long in our own heads (and social feeds) that we lose perspective on what makes us different from other people.

This extends to forgetting what we care about more than most people, and thus where we might go hunting for great problems.

The result: echo chambers make us feel undifferentiated and uninteresting.

The fix: Strangers.

Find a place where lots of strangers are talking to each other about what they’re interested in. Stand there long enough to realise, refreshingly, that you don’t care about most of it.

Try:

• Universities
• Accelerators and Venture Builders (like Zinc VC)
• The water cooler
• Reddit.com
• Campsites
• Prison*
• Y-Combinator’s Co-founder Matching service

When you eventually find yourself having a conversation where a stranger has lots of questions about a topic that you enjoy answering, pay attention!

🎯 You’re over the target.

Immediately run home (or back to your cell) and set up a Problem Harvest in that area.

*Don’t get incarcerated. But if you’re already there… why not make hay while the sun shines?

🦧 In the wild

I met Oliver Knight and his co-founder, Natalia Baltazar, on a venture-building programme last year, where they started a fascinating company called SmartShift Energy, backed by Zinc VC.

Don’t get me wrong: Oliver and I get on great. We have a lot in common.

...except that Oliver is obsessed with demand-side energy flexibility, and I’m more into applications of fungi.

It took no less than 67 conversations with other potential co-founders to hone in on this.

Below is a Q&A with Oliver that, in his own words, sheds light on the process of finding a problem that you care about.

Alex: What problem are you solving?

Oliver: Put simply, the problem we are solving is the high cost of energy.

Specifically, electricity, which we will all be using more of as we tackle climate change and decarbonise our economy.

"No, we should be using less!”, I hear you say...

Well, despite years of declining electricity consumption from good, sensible things like LED lightbulbs and A-rated appliances, we are about to start shifting our gas heating and petrol cars over to electricity (think heat pumps and electric vehicles).

This will double the need for electricity over the next two decades, with enormous demand spikes as people charge their cars, boil their kettles and heat their homes all at the same time on cold, still, wintry mornings when solar and wind energy is at its scarcest.

And what do we get when demand is high and supply is low?

The cost goes up. A lot.

Which leads us to the flip side: there are actually huge savings on the table for anyone who can shift their demand outside of those peak hours.

However, flexing your electricity consumption is not easy: the optimal hours change each day, and most of us do not want to become part-time energy managers!

As someone who pays an electricity bill, I want to shift my demand to the cheapest hours, but I don't have time to manage this continuously.

Alex: How did you notice this problem?

Oliver: I became aware of what is called “demand-side flexibility” early on in my career in the energy sector.

This was around 20 years ago, when the mainstream view was that renewable energy would never be able to replace fossil fuels because it was too expensive and too variable (or as many people say, “intermittent”, but I vehemently dislike that term).

I instinctively knew this wasn’t true. Sure enough, solar and wind broke through the cost barrier in the mid-2010s, to the point where they are now the cheapest sources of electricity generation in the UK.

However, variability is still an issue, and while we could solve it entirely by building lots of battery farms and other long-term electricity storage (which we definitely need), this would be expensive.

Demand-side flexibility is inherently “free” since it simply involves shifting consumption to times when there is surplus electricity available and rationing it in peak periods.

Bringing all this to the present, the 'cost of energy crisis' of the last two years, alongside valid concerns over the ability of the electricity grid to meet demand, has led to a big surge of interest in demand-side flexibility.

🏡 But nobody has cracked the residential sector.

You may have noticed “savings events” being offered by their energy supplier, whereby they are given cash or other incentives to reduce demand on a particular hour, on a particular day.

This scheme is actually a very expensive form of flexibility, and it relies on lots of manual consumer action.

I really wanted to make the life of the average person easier.

Alex: Why did you stop and focus on this problem, and not something else?

Oliver: I was previously working at the World Bank (based in Washington DC), and although I had a really great and rewarding job, I couldn’t shake the itch to do something a bit different.

Plus, for the last five years, I’ve been observing the slow shifts in understanding and regulation that would enable a solution in this space to be successful. The energy sector is notoriously conservative!

In October 2023, I left my job to join a venture builder programme run by Zinc VC, a 'pre-idea' venture capital fund based in London.

Despite entering the programme with a different area of interest (retrofitting), I was rapidly drawn to this space by finding common ground with other participants at Zinc. 

I met my co-founder, Natalia Baltazar, during this period – both of us are passionate about solving a problem that provides a win-win for people and the planet, with the potential to scale.

This problem space ticks all the boxes ✅

Alex: What solution are you building?

Oliver: SmartShift Energy saves people money by automatically shifting their electricity demand to off-peak hours.

Our ambition is a whole-home solution that monitors every appliance on every circuit, learns your habits and preferences, and uses this information to optimise your electricity usage in line with a special tariff where the price of electricity changes every half an hour.

Right now, our product is able to do this for electric hot water and space heating, and we estimate a cost reduction of over 60% for the average household, which we're really proud of.

We are currently signing up our initial customers in the London area. If you have electric hot water and heating (e.g. immersion hot water heater and storage heaters on the wall), we’d love to chat! Email me at oliver@smartshiftenergy.co.uk.

🛸 Misc.

I published a short piece earlier this week on the absurd similarities between psychedelic drugs and the surgeon's scalpel: a sharp-edged tool that's routinely wielded for life-saving surgeries.

I'd love to chat with anyone who has an interest in this field: book time here.

Wishing you lots of problems,

Alex

P.S., Interested in getting a coach? I'm coached by Neil Mackinnon