Visit Date: September 29, 2003
Center for Private Equity and Entrepreneurship (CPEE): When did you know you wanted to be an entrepreneur? What attracted you?
Healy: I have always been a bit of an entrepreneur, having started companies prior to EnerNOC. There are a number of reasons why I continue to be been drawn to entrepreneurial organizations. I have always loved the creative process and the flexibility associated with being an entrepreneur. In addition to the creativity and flexibility associated with entrepreneurial organizations, I also enjoy the fact that everything you do in a startup starts with a blank slate. From a reward standpoint, the impact any one individual can have on an entrepreneurial organization is significant and measurable. Your actions have a direct effect on the success and direction of the organization. I really cannot envision any career for me other than building companies from scratch. Coming out of college, I tried a number of experiences, including investment banking and private equity, yet none of those fields felt right. To this day, I still feel that nothing is as rewarding as starting a successful small organization.
CPEE: How did you start the company?
Brewster: We began investigating the idea for EnerNOC when we were first-year students at Tuck. Tim and I shared similar interests in wanting to be entrepreneurs and to be involved in the energy space. That summer we both chose internships which would further develop our knowledge of the industry and push along the development of our plan. We felt it was important for us each to work in a separate organization to maximize our opportunities to learn about the industry. We came back from the summer and spent as much time as possible during our second year working to form the company and develop the initial business plan. We also took advantage of all Tuck had to offer. We met with many of our classmates, professors, or visiting executives who could help us better understand the industry or an issue we were facing. We also looked to leverage our relationships with classmates and to make introductions to various members of the alumni community. We relied heavily upon Professor Horvath and the DEN [Dartmouth Entrepreneurial Network]. In fact, we won the DEN Greener Ventures business plan competition, which really helped to establish our credibility. From our perspective, Greener Ventures was a great opportunity for us to vet our business plan in front of real VCs and other potential investors. After graduating from Tuck, we continued our work to execute our initial business plan. Tuck and Dartmouth have been hugely helpful in our development, and continue to be to this day.
CPEE: How did your organization develop the necessary credibility to win customers, attract investors, and hire talented individuals?
Brewster: Building credibility is a huge challenge for any new organization. From the start, it was important to feel like we were making progress everyday and to tell people about our successes. We had both been involved with organizations where momentum was critical to keeping people motivated, both inside and outside of the organization. People generally want to be involved with and help winning organizations. Whether you are talking about employees or advisory board members, they are more enthusiastic if they believe the company is a winner.
Healy: In the end, continuing to execute builds confidence and establishes a track record, and this has a snowball effect-people start to do things [to help the company] on their own, particularly advisors to the company. Building a group of smart advisors is critical, since you are constantly starting things from a blank slate. It's very helpful to be able to take advantage of an advisor's experiences. As you have more success, these advisors will feel more comfortable acting on your behalf. In addition, providing advisors with meaningful tasks further ties them to the organization.
CPEE: What is the most important lesson you have learned so far to pass on to future entrepreneurs?
Brewster: First, don't let anyone tell you that you cannot accomplish what you've set out to do, or that your idea is not worth pursuing. Throughout the entrepreneurial process experts will tell you that you will not be able to succeed. It takes stubborn dedication to succeed as an entrepreneur, perhaps even more than we had anticipated when we first started.
Healy: David's first point is spot on. We are both very passionate about our company. We truly feel like we are changing the world. Without passion and enthusiasm we would never make it through the challenges that entrepreneurship brings.
Brewster: The second lesson we have learned is that you must pick the right partners. As an entrepreneur you need someone else to rely on from a skills point of view and also emotionally. The lows can be absolutely crushing and the highs very rewarding. A good partner will help you stay balanced throughout the process. Picking a good partner is a real challenge. Often, the best partners are not necessarily best friends, but rather counter balances to each other. A blend of skills and views is always helpful. However, both partners must share the same passion and dedication to the organization. Finally, each partner must have tremendous respect for the other-partners will not always agree, but they need to be confident that both parties share the same commitment to the end product.
CPEE: What has been the biggest difference or surprise?
Healy: Operationally speaking, the biggest surprise so far was that it took us over five months to go from a signed term sheet to closing our venture financing round. We did not anticipate that the process would take that long.
Brewster: From a management perspective, we both are surprised by how challenging it can be to strike the right balance between building infrastructure and selling to clients. Right now, we are personally involved in any major customer win, yet there are a number of things we need to work on internally to build the necessary infrastructure to help us as our business grows. We always knew that adding what we call "company-ness" was inevitable. We did not have a full appreciation of the impact on our efficiency that instituting new processes, integrating new people, and adding other company structures to what formerly was an autonomous and efficient operation would have. Finally, we're surprised that with an organization of our size we can see a distinct corporate culture emerging. Culture is critical to the success of any organization-we just didn't expect to see such a distinct culture this early in our development.