Donnel Baird made BlocPower to solve a massive problem at the heart of global efforts to tackle climate change. It’s such a big problem that investors have poured over $100 million in debt and equity financing into the company to help it solve it. Nearly a third of CO2 emissions generated in the United States come from the energy needed to heat buildings. Most of that energy comes from oil and gas, leading to the problem of carbon emissions. Donnel finally wondered, “What if we could change the energy source? What if we could electrify buildings instead?”
However, like many innovation stories, Donnel didn’t get to this particular problem overnight. In fact, he spent several years building BlocPower before realizing that this was the exact problem that needed to be addressed. Every great story has a central conflict that the main character must overcome. The bigger the conflict, the better the story. For example, in Suzanne Collins’ best-selling book The Hunger Games, protagonist Katniss Everdeen must overcome impossible odds to win the games and survive. That’s the core story conflict. In the world of startup stories, the conflict in the story is the customer problem that the founder and their team choose to attack. The story of how Donnel came up with the “electrification” problem is informative for any entrepreneur struggling with the same challenge of solving the right problem.
Donnel started BlocPower in 2014 with the general idea of making buildings greener in cities and employing people from the neighbourhood. He grew up in Bed-Stuy in Brooklyn, the child of Guyanese immigrants, in an apartment with a heating system that didn’t work. He recalled that his family heated his apartment by turning on the oven and opening the oven door. Donnel pointed out that they had to open the windows of the apartment so as not to be killed by the carbon monoxide! At the urban level, this was a terribly inefficient method of heating buildings; for the families themselves it was terribly unhealthy. As an adult, Donnel joined the Obama campaign. As he walked the streets in 20-degree weather in places like Cleveland and Bridgeport, he saw condominiums with the windows open everywhere. Not much had changed. Donnel realized that there was real ‘energy neglect’ or ‘energy poverty’ in these communities and he wanted to do something about it.
Donnel worked on this problem within the Obama administration, but without much success. Later, while pursuing an MBA from Columbia, he decided he might be able to raise venture-backed capital to tackle the issue at scale and build a business. His original plan was to try to convert the primary energy source in buildings from oil to gas. Gas was a fossil fuel, but it burned cleaner than oil. That was the first problem he wanted to solve. He recruited a team, built a business plan, found investors, signed utility partners, and was ready to go.
Around that time, he also met Eric and Wendy Schmidt who were interested in investing in initiatives that address climate change. When he met the Schmidts, they were excited about his venture, but refused to invest in a solution that involved gas. Also during this time, Donnel and his wife had a child. With his own child, Donnel delved deep into climate science to make sure he was solving the right problem for the planet’s future. He realized that gas was just a bridge fuel, as the Schmidts suggested. The real goal was to move towards clean electricity generated by renewable sources such as solar, wind and hydropower. He realized that he had to rewrite his innovation story with a different conflict. Rather than solve the problem of simply getting rid of oil, he decided to take on the challenge of finding a way to electrify buildings instead.
A new technology called an air source heat pump was refined at the time. Manufacturers Mitsubishi and Daikin have found ways to convert cold air into warm air even in icy conditions. This updated technology, powered by electricity, would be a key part of the BlocPower solution, which included the hardware, software and installation/service to make it seamless for building owners. The installers would be hired from the neighborhood. It was February 2018 and BlocPower had a new story. Now it was time to get colleagues, partners and investors on board. It wasn’t easy. His business partner was divided over the decision. He had to rewrite contracts with several utility companies. And he had to convince his original investors, Ben Horowitz and Mitch Kapor, that this was a better problem to solve. These major investors were in.
Donnel knew he had picked the right problem to solve a year later when the lights went out in Midtown Manhattan in the summer of 2019. He partially remembers that night because heartbroken Jennifer Lopez had to abort her Madison Square Garden concert and it made headlines. At the time, then-Governor Andrew Cuomo was considering approving a permit to build a natural gas pipeline to supply New York City and Long Island to alleviate power problems like this one. But despite the uproar over the blackout, Cuomo ultimately turned down the request. In the short term, this would have a negative effect on the water quality around the proposed pipeline; and in the long run, further investing in fossil fuels wouldn’t help cut emissions in the state by 85% by mid-century. In fact, Cuomo said New York should now move away from gas and toward cleaner electrical sources. BlocPower had chosen just the right problem to solve. J Lo wasn’t happy, but Donnel knew he was onto something.
Today, BlocPower contracts directly with municipalities to carry out large-scale electrification projects in neighborhoods from Oakland, California to Ithaca, New York. Solving a big problem can lead to big opportunities. BlocPower has a bright future (pun intended), as it seems to have picked the ideal problem to solve.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.