For entrepreneur Simon Phelan, making a real difference to the way Britain consumes energy, by making the energy industry more transparent and environmentally friendly, was just as important as commercial success and rivalling the likes of British Gas.
Together with co-founder Andreu Tobella, he launched HomeTree in 2015. The online platform aims to take the hassle of buying boilers and other energy saving home appliances away from consumers, ensuring home owners don’t blindly choose British Gas services, and the market for boiler installation remains competitive.
A labour of love for Phelan, HomeTree was created to offer a cheaper, environment-friendly way for consumers to reduce their energy bills.
With degrees in maths and engineering, and a professional background in private equity, the entrepreneur recognised an opportunity in energy – arguably the sector most in line for technological disruption and innovation in the next few decades.
But, as Phelan explained to Business Advice, his plan to launch his startup took years to formulate, let alone put into action. “I spent two years just looking for an entry point into the energy market,” he said.
“I always knew I would launch a venture capital-backed business, and for a while thought it would be in solar power, or cleantech, but then I became aware of the heavily broken consumer experience when it comes to buying and installing boilers, and the idea for creating an energy company in the home improvement space was born.”
By signing up to HomeTree online, customers can assess the status of their boiler and get an accurate quote for a replacement, without needing an expensive technician on hand.
By sending in photos of the boiler via their mobile, and answering a series of questions about the state of their appliance, users will receive a quote immediately, based on HomeTree’s price comparison of a wide local network of trusted boiler technicians and installers.
At the moment, that trusted network of technicians spreads as far as the North West of England region, but Phelan plans to turn HomeTree into a nationwide energy service provider in the years to come.
Despite being less than a year old, the platform has already amassed a team of ten dedicated staff, in both London and Manchester. The startup is backed by a group of venture capitalists and angel investors, including three former British Gas chairmen and Better Capital founder Jon Molton, and has an initial equity funding round planned for 2017.
For Phelan, obtaining the backing of distinguished investors gave him the confidence to pursue with his idea for HomeTree all the more whole-heartedly. He reminded fellow entrepreneurs of the value of having a wide network of contacts, particularly when looking for that initial seed investment.
“Receiving the backing of people like Jon Molton and expertise from British Gas validates what we’re doing” he said. “If these guys believe in this service, it makes me think we can really make a difference to people’s lives.”
The first signs are that Phelan is right to feel confident. He told Business Advice that 70 per cent of people that have signed up to HomeTree so far haven’t needed to call out a British Gas technician to obtain a quote they’re happy with.
Where previously consumers would have had to wait in all day and pay through the nose for British Gas, they’re now able to get a competitive quote quickly.
“This is a process that has been inefficient for too long,” added Phelan. “Nobody knows how to find a good boiler technician, or how much they should be paying for a new boiler. HomeTree uses ecommerce methods to digitise and streamline the whole process, making it far more efficient.
“We’re completely digitising what essentially is a craft industry,” he went on to say. “In a sense, we’re no different from British Gas, except we’ve digitised the process. We’ve even integrated finance into the HomeTree experience, offering consumers competitive price plans via a secure platform.”
Phelan sees no limit to the scope of where HomeTree can go in the next few years. Both in terms of its potential to reach more consumers and widen its product offering, the entrepreneur has big plans for his young company.
“We want HomeTree to be one of Europe’s leading energy service providers,” he explained. “At the moment, we have very little competition – no one, apart from one exciting German firm – is disrupting the market in this way.
“Boilers are a starting point for offering a range of energy solutions to home owners, like solar panelling or double-glazing, for instance. Ultimately, there’s nothing to prevent HomeTree from becoming a complete end-to-end energy provider.”
For now, Phelan is content with sustainable, regional growth, while developing a deeper network of contacts. “Contacts mean almost everything when you’re starting out,” he said. “Entrepreneurship is a far easier process with a good network to draw on and talk to.
“It’s tough on your own. The most sensible startup founders build a network over s couple of years.”
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