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At the end of 2012, energy software company Tendril cut its number of projects from 50 to 20, cut its number of employees from 200 to 70 and closed its offices in San Francisco and Boston. Although this might sound like the story of a company’s downfall, for Tendril it is a story of rebirth: “that was absolutely the right thing to do,” COO Chris Black said.
These tough decisions, along with the help of a $15 million growth funding round, put Tendril on a new path towards success and profitability; the company has now been profitable for over a full year.
“I think we are finally starting to figure it out,” Black said. “We had a really healthy growth last year.”
The team is looking to continue that growth by hiring about 20 more in Boulder within the next year, which will help Tendril to keep up with their international expansion into Europe and Asia this year.
"As far as a client base, the world needs what we do,” Black said.
Tendril’s customers, which include energy providers all over the world, are increasingly looking to get into the smart device and energy auditing space. These companies are shifting “away from just being commodity energy providers to being energy service providers,” which is where Tendril comes in.
Tendril’s cloud-based platform helps improve consumers’ energy efficiency rates, allows them to control multiple devices in the home and lower energy bills. By helping energy companies in the home energy management product and service space, Tendril is helping them to stay competitive with renewable energy providers, whose products are increasingly economic options for everyday consumers.
The software world hasn’t always been Tendril’s arena: when the company was founded in 2004, they were making smart devices. But within a few years, the team realized that giving intelligence around energy was the way they could really change the world’s energy problem.
“The energy crisis is not going to get better, it’s going to get worse as the population continues to grow,” Black said. “We need to figure out new energy sources like renewable, but we also need to figure out how to use better what we already have; that’s our area of focus.”
After the team decided to focus strictly on energy software, they then realized they had to zero in even more to find their true customer base: utility companies that truly value energy efficiency and services, instead of companies investing in small “experimental” projects.
“What we realized was that all the stimulus dollars the government was pumping into the utility market created this artificial bubble,” Black said. “Lots of utilities were taking free cash to play in energy efficiency programs, as part of R&D projects, but no real intent to take those large-scale.”
This realization led to Tendril’s momentous restructuring (cutting its number of concurrent projects in more than half and its employee base to match), which saved the company from having to raise $20 to $50 million just to keep afloat, Black said. Now, with the right product and the right customers identified, Tendril is prepared for sustainable growth by taking on more international clients and local employees in 2014.
“Through the actions that we took of restructuring the business last year, we now have 100 percent customer satisfaction, we have high quality products, we have new customers picking up, the culture is better,” Black said. “Even though it was a hard thing to do, now we just run a really healthy company that grows in a smart way.”
