A Clean Tech Entrepreneurship Project
Pitaya is a smart battery that helps household gain control of energy usage, and helps electric companies reduce costs and wastes.
What I did: UIUX & Product Design (Figma & InVision) and branding (Adobe Photoshop & Illustrator)
Team Members: Abdullah AlSharhan, Konstantinos Kondylis, Ziru Ling, Bryce Marion, Fleur-Amelie Fayard, Supawit Mahaguna
It was generated from ENGR145 Technology Entrepreneurship at Stanford University.
Pitaya's vision is to solve one of world's largest problems - energy crisis.
Most people don't know that our current electric energy system is rather inefficient, both on the side of producers (power companies) and receivers (households). On the side of power companies, the demand for electricity is usually unbalanced - there is way more demand during peak-hours than that of non-peak hours. But since almost all electricity is used instantly as it's generated, there is always a surplus of electricity at night that nobody uses, and it goes into waste. According to research, power plants operate at only 33 percent fuel efficiency, meaning that for every 1 unit of electric power generated, 2 units of waste heat were thrown away in cooling towers, rivers and streams, and that’s 2 x 3,806,611 GWh of wasted heat, or 26.4 quads up in smoke. Besides that, due to this unbalance, power companies have to pay $110 - $210 more of carbon tax over three years, which equals to roughly 3-4 tons of CO2.
On the other side of households, they usually pay 40% more for electricity during on-peak hours than off-peak hours, which a lot of them wish to save. Besides that, they don't even know what exactly what they are paying for. The monthly bills they receive are just the total price without a detailed division. They have no knowledge and control over both energy usage and cost.
Therefore, we proposed a solution, which is the Pitaya electricity capturer. Here's our positioning statement:
For economical & environmentally conscious homeowners who wish to lower electricity bills & maximize clean energy usage, the Pitaya electricity capturer is a battery + app that provides both energy usage information & energy-saving tips that captures cleaner, cheaper energy from eco-friendly sources. Unlike Orizon, Solarcity and other pricey battery solutions that require self-installation, our product is cheaper, installed/maintained by your local power company, has an app, and brings greener energy into your home.
After Pitaya Battery reaches majority adoption among most of households, the ultimate problem of demand gaps and energy inefficiency can also be solved, which will help power companies save huge amount of money in terms of both operation costs and carbon tax, while saving more energy to making the world a better and greener place.
Our whole journey involved ups and downs.
Here is a diagram that illustrates our emotions:
The idea of Pitaya was generated from a simple piece of electricity bill. We noticed that off-peak electricity price is often cheaper than on-peak price. We realized that if we can quantify the amount of money saved, this would be a most direct incentive for people.
Also, one other problem is that normally when people receive their electricity bill, they don't know what exactly they are paying for. People also don't have a standard to measure the exact amount of energy consumption, and to evaluate whether it is wasteful or not.
To summarize, problem 1.0 was based on the household's side:
Need to gain knowledge and control over consumption evolution
Need to save money on electricity bills
To solve the above problem, we proposed the Pitaya Electricity Capturer, or in other words, a smart battery. Complementary to that, we also proposed the Pitaya App which comes together with the battery as a combination.
The battery captures electricity during off-peak hours
The electricity captured diverts power into battery
Power from battery is used to charge other housing appliances during peak hours
App provides information on energy usage, battery charging condition, and user tips
Here is a graph that explains how it works more clearly:
The Need to Pivot
However, when we tried to do research in order to ground the consumer need and validate our value proposition, we felt the need to pivot.
For problem 1, there are tons of competitors doing this already and we could not seem to find our competitive edge. Here is a list of the current competitors we found, and we believed that it is just a tip of an iceberg.
The bigger issue came with problem 2 (the need to save money on electricity bills). According to research, "most consumers pay prices based on the seasonal average cost of providing electricity, so they do not experience these daily price fluctuations" (US Energy Information Administration). This means that a lot of people are not even aware of the fact of the difference in on-peak and off-peak pricing.
Further more, a lot of power companies such as PG&E offers Time-of-Use plan encouraging people save electricity already. This means that even if there's no difference between on-peak and off-peak energy prices, the average amount of money consumers will save is as little as 5%, which equals to $5 every month.
However, the R&D and installation cost of our product must be expensive during the early stages of our startup. Therefore, there's high possibility that we would charge a slightly higher price. This really does not create incentives for consumers, because it seems that nobody will pay a high price to buy our product only for helping them save $5 every month.
To summarize, problem 1.0 failed because of the following:
Some people don't have difference of on-peak and off-peak energy prices on their monthly electricity bill.
The cost to buy and install Pitaya battery exceeds the monthly saving it provides, undermining the initial value proposition.
The Pitaya App has too many competitors as it looses a clear competitive edge.
Because of the reasons above, we felt the need to pivot and find new value propositions.
I have a friend whose dad works at a real power plant in Shanghai, and when I pitched our problem to him, to my surprise, he said that our product had huge undiscovered potential according to his understanding with the power companies. Our product's value proposition towards households was indeed a small sector. The larger sector actually lies in the power companies as beneficiaries.
The thing was, we already understand the concept of on-peak and off-peak price, but did not dig deeper into that. The price difference is actually caused by difference in demand. The demand for electricity is usually unbalanced - there is way more demand during peak-hours than that of non-peak hours.
But since almost all electricity is used instantly as it's generated, there is always a surplus of electricity at night that nobody uses, and it goes into waste. According to research, power plants operate at only 33 percent fuel efficiency, meaning that for every 1 unit of electric power generated, 2 units of waste heat were thrown away in cooling towers, rivers and streams, and that’s 2 x 3,806,611 GWh of wasted heat, or 26.4 quads up in smoke. (Source: here)
Now, the existing solutions towards this problem of energy waste came as two:
Building hydropower pumps and divert excess energy into them, so that they can regenerate energy from water power. (However, the building cost is extremely high as it is shown here, and the energy is still used anyway)
Turn off the power plants when there's not much demand. (However, these plants are often designed for relatively high efficiency and may be combined cycle plants, so it may take several days to start up and shut down. More informations can be found here)
Here's a diagram to illustrate Problem 2.0 and explain why Pitaya Battery can solve it:
Besides that, due to this unbalance, power companies have to pay $110 - $210 more of carbon tax over three years, which equals to roughly 3-4 tons of CO2. (Source: here)
Therefore, we finally decided on the track of our project. We will offer incentives to end users, which are households, but basically our main value proposition cannot be without the benefits towards power companies.
target users and pain
We divided up our user group into three as they most likely will respond to our product.
business model canvas
Assumptions & Validation
The success of our model will be based on the following assumptions
We are a really evidence-driven team. We believed that if our initial assumptions above cannot be validated, none of these has potential to be put forward. Therefore, we conducted various methods to validate those four assumptions. Our entire methodology can be seen as below:
The validation for Assumption 1 is kind of thorough since it is already described by the above discovery process of the problem. Besides that, we also conducted interview with Adrian from Qualcomm.
To validate Assumption 2, we used the method of a survey.
We are a highly research-driven team. We believed that the problem we identified above may not be the same problems for others. In to actually validate the above pain points, we conducted a survey within a pool size of 85 people. Here are some of our results:
The complete results of the survey can be found here.
The results turned out positive. Most people actually have pains saving electricity money as well as gain control and knowledge over consumption.
More positive results turned back when we conducted interviews with potential users in the Silicon Valley area:
Then we turned from the ideation side to the feasibility side, as we wanted to make sure that our product can reach sustainability:
To our surprise, given the clear value propositions, the consumer willingness to pay was higher than expected.
The validation for Assumption 4 involved the creation of financial statement:
The above analysis showed that our product can be sustainable.
Due to the fact that this topic is rather popular and there are multiple players in this field, we thought further to identify our position among our competitors:
As it is shown, our product costs less while providing relatively higher battery capacity.
As a potential startup project, one important decision to make is to decide whether to proceed with this existing model or not, once we made attempts to validate all the assumptions.
Our decision was to proceed, but only if the incentives given can be accepted by early adopters. The detailed plan is as following:
We also did an analysis on prevention and mitigation strategy to respond to multiple possible cases in real life:
The Pitaya App gives users full clarity of house energy usage by connecting with users directly, and here is a prototype of the App to actually show how it works.
First of all, users can create their own account, and once they log in, they can connect with the Pitaya Battery and they will be guided to the main home screen. Here, this cleanly designed UI will show them a full clarity of what’s going on in their house in general.
We also have some side screens where the battery screen shows the battery charging condition, and the consumption screen shows the hourly consumption of energy in terms of every single house appliances.
Due to the time limit, the battery itself is a bit difficult to build, but the basic idea is that it’s gonna be a rectangle, usually installed in the basement, and connecting to both the utilities and house appliances.
Big shout out to my whole Pitaya team and Professor Tom Kosnik for making all of these happen!!