NieuweStroom: successful product of 'learning money'
We started NieuweStroom with the five of us. And that was certainly not too much. The idea, as an 'energy fighter', to allow any SME to pay the actual public exchange price for energy, was a huge operation together with IT people, who were very much needed, since we had to build the software ourselves. With structure and organization, to keep us going as a newcomer in the energy market. With finance…, sales… A huge job!
But the great thing about it was that in one year we may have learned fifty things. That's an approach with a high cost of learning, but it also gives the people who work on it an enormous amount of valuable experience."
Remko ten Barge, co-founder and current managing director of NieuweStroom, is an “experience expert” as a student entrepreneur. He is pleasantly surprised when he hears that Tilburg University has made entrepreneurship the spearhead of its policy and is developing numerous activities to stimulate startups and entrepreneurship in the region. "When we wanted to start a business in 2003, we needed a mailbox, because that was not allowed in our student house. When we knocked on the door of the university, it turned out not to be so easy. There were hardly any student entrepreneurs."
Academic Business Club
"In that year, the Academic Business Club was founded, by Professor Vianen and by us", Ten Barge continues. "Then came Starterslift (the Tilburg University startup program), then the Incubator. And now, 17 years later, entrepreneurship as a spearhead... Well, that's really good. Something has been set in motion 17 years ago. At the time we wanted to start a business, there was no support. A lot has changed since then. And the Academic Business Club still exists. That's great!"
BelteGeld
Remko ten Barge is a born and raised Achterhoeker. After high school, he could choose to study in Groningen, Maastricht, Rotterdam, or Tilburg. "That was all a long way from home. And Tilburg appealed to me the most. That's where I met Geert van Lümig in my second year. Geert had studied in Eindhoven for a year and had come to Tilburg. We followed the same Financial Economic Management course together. But we discussed more than that! A lot of entrepreneurial ideas. This resulted in us setting up a telecom company together: 'BelteGeld'. That was great. A real student company. Lots of searching, and sorting things out.”
Making companies ... of good things
At that time, the Academic Business Club also became active: "On Monday evenings. A group of entrepreneurs came together. One or two went up to present and they received sincere feedback. If you had a bad idea, you'd know that right away after such an evening. And if it was a good idea, you got a lot of tips. For example, with this club, we saved a lot of students from bankruptcy at an early stage. And that's what you've been seeing more and more since then: coaching. We were there early. And Professor Vianen, as I said, initiated that."
Ten Barge believes that Vianen's vision was to encourage and facilitate entrepreneurship at the university. "In this, he also had an ally in the person of Hein van Oirschot, at the time President of the university. I've heard them say: 'Everything that's on the shelf here, you can make companies out of that... But only out of the good things.”
"And maybe that is not his vision, but mine," laughs Ten Barge, "when you start a business at university, you have nothing to lose. You will gain so much knowledge. Of course, that wasn't the reason to do it, but I sometimes say, even if you go totally bankrupt, it all pays off. But you have to start."
Brainstorm
In August 2006, Ten Barge and Van Lümig both graduated: "Just in time to be doctoral students. That was the deadline and we both met it. And we said: 'We'll see each other again...'. Geert ended up in Africa, for example via Starterslift, as a telecom consultant and I started working at ABN-Amro.
In Africa, Geert met Willem van Eck, a technical engineer who had worked for KPN and France Telecom, among others. He was sixty years old and very experienced. When their project was nationalized there, they came back to the Netherlands."
Ten Barge and Van Lümig then met again in Eindhoven: "We lived in one house and there we had many brainstorming sessions. We set up a whiteboard full of new ideas and at one point the contours of what would later become NieuweStroom were outlined."
Smart Meter
The basic idea of that “brainchild” was the fact that at that time the smart meter was being rolled out on a large scale in the Netherlands. "We knew: it measures every hour how much energy you've used and the stock market indicates every hour: 'this is how much it costs'. There are all kinds of derivatives of this in the market, such as peak and off-peak tariffs, fixed prices, and so on. All kinds of premiums are included (because the real price is the stock market price) and that's what we jumped at. We said: 'We supply SMEs on the basis of the real price'. That saves them money. Namely, the risk premiums—which are considerable—between the real price and the fixed prices. And we also said (and say): "The customers can always leave us whenever they want."
Awful lot of money
"Initially, we called ourselves "energy prize fighters''. And we were declared fools! To do that in this market... and giving the clients the option to always leave. Because, in the energy market, there is fierce competition. All you get is crazy calls. And why is that? Because there's an awful lot of money being made.
But, what does an energy supplier do? As a matter of fact... nothing! They send you a bill. The energy is supplied by the grid operator. And even if there's a malfunction, you have to go there.
The smart meter makes it possible to 'predict' better what customers will consume based on earlier consumption figures. The large industrial end customers have been doing this for years. This has been automated on many fronts. We have also made this possible for SMEs.
We go to the SME owner and explain the different rules of that account, with the energy bill in hand. There are some things we can't change, such as energy taxes and grid operator costs, but we can see if you are paying unnecessarily too much.
Energy is a low-involvement product. Our core customers are farmers, restaurant owners, petrol stations, butchers, bakers, and many catering establishments. And they are all busy. That energy bill? It's over there somewhere. Goes up considerably every year..."
Different concept
According to Remko ten Barge, NieuweStroom tells the entrepreneurs a different story about how the energy market works and where it is heading with more and more solar and wind energy on the grid: “We have something else. And that makes this the last day you need to occupy yourself with energy. From now on, you will be linked to the stock exchange. That way, it’ll be cheaper, you'll never be taken advantage of again and you can always leave.”
Ten Barge emphasizes that it makes you save money on average. "Because at 7:00 in the evening, for example, it's more expensive. That is the result of supply and demand: at 7 o’clock, the sun no longer shines and there is therefore less production. But then the lights go on and we start cooking. That means extra consumption. At that moment, we shouldn’t charge our electric cars as well. At NieuweStroom, that gives the customer an extra reward because he then renounces the—higher—electricity price that applies at that moment. With 'old electricity' that doesn't matter and the supplier makes a loss at 7 o'clock in the evening. Of course, all this has to be paid for in the other hours.”
More profit through flexibility
Remko ten Barge does not include NieuweStroom to be among 'the big boys': we now supply just over 2 billion kilowatt hours a year. But electricity alone is 120 billion kilowatt hours per year in the Netherlands. So there is a lot of demand. Electric transport and electric heating are increasing that demand. And then we are going to generate everything ourselves decentrally, with solar panels and wind turbines. These are all customers for us; they are all parties, with all kinds of smart devices, which you can control and which offer flexibility.
Everyone can take advantage of this flexibility. To put it simply: the electricity becomes cheaper when the sun shines and when there is a strong wind. This has a strong correlation with the price. What that influence is, that's arithmetic. Algorithms determine it. Making things more sustainable and saving/earning money can therefore very well go hand in hand. At least, in the game we play.
And if companies want to change, we can only state, looking to the future, that the advantage of dynamic energy prices is only going to get even bigger. With more sun and more wind. And if, in addition, all possible flexibility is unlocked, that in turn creates value. You can do as many as ten things with it. That all generates money and that's all earnings that don't yet reach the customer".
Keep learning
The position in which NieuweStroom now finds itself was not created without a struggle: "You often see the tip of the iceberg: a company that grows successfully and is profitable. But underneath it is... sweat and tears. And especially sweat. Over the years, we have worked incredibly hard with different team compositions. And also made a lot of mistakes. But making mistakes, in a culture that is open and transparent, is very 'nice' for everyone. Things that go well, yes, you want to build on that and make the most out of it. And things that go bad... cut them off very quickly and learn from them. Mistakes can be made. Nobody likes that, but it shapes you. Like... with trial and error you learn to walk... and that's very important."
Questions, questions, questions
Which brings us back to the beginning and Remko ten Barge still points out the importance of coaching for starting entrepreneurs: "It's good to have contact with people who ask you: 'Why do you want this?’
Questions are always good. Questions, questions, questions! There is much more value in that than opinions. Questions make you think. Having good sparring partners is important. That's what you learn from. A big ego is not useful... Because that stands in your way!"
Furthermore, according to Ten Barge, it is just hard work: "Customers, grow, become profitable. And in the meantime you encounter challenges at every stage. It's never finished. You can see that now because of COVID-19. It creates additional challenges, which no one had considered. With the movement that NieuweStroom has set in motion—with our community, colleagues, and customers—it is possible to hold on to things. Efficient working from home is possible with us: 'simply', work remotely, at 'the kitchen table'. This time is special, but the foundation of NieuweStroom is stronger than ever because the energy bill with our concept is even cheaper now! ”