5 – Where energy is made human

written by BVM December 6, 2018
5 / energyby5 A field of wind turbines with an orange sky behind.

5

Where energy is made human

 

Business View Magazine interviews CEO Brian Hayduk and CCO Jeff Schiefelbein of EnergyBy5 for our focus on the US Energy Distribution Industry.

5 was formed in 2011 with a single mission – to help people. Today, the company sets the standard for energy advisory firms in North America, providing advice to clients on electricity and natural gas procurement, risk management, demand-side management, and distributed generation options. 5’s team of energy market innovators, engineers, commodity traders, technologists, and business development professionals is united by a common purpose to deliver cutting-edge energy solutions for its clients.

Many books on leadership denote the number 5 as the pinnacle of achievement. That’s why the company’s founders named their energy firm “5” – as a simple reminder of what they’re striving for in all aspects of the business. Turns out, it’s also a great conversation starter. And here’s a fun fact –  5 owns the trademark for the number 5 in the energy industry, an expression of their desire to always compete with “what’s possible.”

Among its innovative technological achievements, 5 created a proprietary transactional portal and large data repository called Level5. This system hosts market intel and drives decision-making using millions of data points, while also powering data analytics and visualizations to assist the firm’s clients, team, and the industry at large. Tools within Level5, combined with deep insider-knowledge, enable the team to educate and advise on historical and future pricing trends, technical and fundamental commodity analysis, weather impacts and forecasts, product performance, power factor penalties, and benchmarking, along with other reporting to assist with demand-side management.

Business View Magazine recently asked energyby5 CEO, Brian Hayduk and Chief Culture Officer, Jeff Schiefelbein for insights into their company’s incredible achievements and its role in today’s competitive deregulated energy space. The following is an edited transcript of that conversation.

BVM: How would you describe the evolution of 5 from founding to its current status?

Hayduk: “The company was officially started in Dec. 2011 on paper; operationally, we began in early 2012. The impetus for founding the company was the big value gap in the marketplace. All the founding partners had come from the supplier side of the deregulated energy space. So, we were the company that you could switch to if you were in a deregulated state for electricity or natural gas.

“The way that market had evolved was very much like the insurance industry, where almost all commercial insurance transactions today are done through an intermediary – a broker or aggregator of some sort. The energy industry developed the same way. So, over time, what that meant was that most of our transactions, the contracts we entered into with commercial and industrial entities, were done through intermediaries. We dealt with almost every broker and consultant in the country and we felt, generally speaking, that customers deserved much better than they were getting, both from an analytical standpoint and the scope of services.

“Most of the folks in our space will help customers with procurement, essentially the buying of electricity or natural gas from these markets. We saw a much broader need. Once you become the outsourced energy professional for these firms, they were asking all kinds of questions; whether it’s issues on their delivery bill, onsite generation, solar, lighting, you name it. We saw a need for somebody who can not only do a better job on the procurement side, typically a top-three item on somebody’s budget, but also be that outsource energy team people were looking for.”

BVM: Who are your customers and what geographic region do you cover?

Hayduk: “We service commercial and industrial and government entities in deregulated markets. Depending on whether it’s natural gas or electricity, it could be up to 18 different states. The customers are very wide ranging. We have some Fortune 500, but we tend to target people who might spend from $200,000 to $30 million a year – from quick-serve restaurant chains to someone like Xerox, very large national manufacturers, commercial real estate, schools, towns, cities; it doesn’t matter the type of customer, it just matters if they have a need we can fill.

“We have roughly 30 full-time employees, but through strategic partnerships and referring partners there’s closer to 60 people on this team, serving as almost a distribution channel so we can deliver our services. We’re headquartered in Irving, Texas and have remote employees working from Manhattan to Mexico City and scattered in between, predominately in the northeast, New Jersey, New York, D.C., and all through Texas; plus, full-time employees in Mexico City helping us run that operation, as we have customers across the entire country of Mexico. We’re ready and willing to go into Canada, but do not currently have any clients there.”

BVM: How do you reach out to potential customers?

Schiefelbein: “It’s a mixture of everything you’d expect when it comes to creating a trusting relationship. This is not a world where traditional advertising turns into a meaningful connection to prospective clients. So, we hire business development reps – energy advisors – who are making cold calls, asking for referrals, servicing a client in one state or region and proving our worth so we can grow with that client into all the different areas they operate.

“We use a series of referral partners, but we also end up in some really neat operations where there are strategic relationships. For example: JLL (the renowned global commercial real estate and investment group) uses 5 as a preferred vendor. So, most clients JLL is serving on an enterprise level get into a conversation about how we can bring our services to those clients. And there are folks in a similar role as us, maybe other energy brokers who lack the expertise to handle the large, more sophisticated clients. Maybe they’re strong in a place like Manhattan, but when it comes to really deep analytics for their clients, they don’t have the bandwidth or the knowledge. So, they partner up with 5 to deliver that to the people they’re serving. There’s also a decent word-of-mouth component to our business development.”

BVM: What gives 5 a competitive advantage?

Hayduk: “We feel the depth of our analytical capabilities is far greater than most, but analysis, itself, doesn’t translate into superior advice. It’s the combination of analytics, synthesized and absorbed by people on our team who have incredible experience – from an engineer who ran energy management at Texas Instruments, to traders, to people who built the largest utility-scale solar farm in Maryland. At the end of the day, we’re an intellectual capital company, we provide advice. Our combination of analytics and experience is extremely hard to find in this space.”

Schiefelbein: “We’re also well known for our culture where everybody is aligned around the same mission of helping others through great energy advice. Rather than competing internally, it’s almost like turning the business into a team sport, so we can figure out the best way to actually have an impact on this industry – aligning all those pieces with proper mechanisms in communication and mindset to deliver that value to clients.

“The nature of our business is helping to match clients with a supplier that can deliver their needs over time. We do future-start contracts that run for multiple years and some that don’t even start for several years. We’ve vetted and worked successfully with several retail energy providers that we’re now jointly participating with in fairly long-term agreements with clients. We’re bringing large national clients to the table and could have contracts on the books well into the late 2020s.”

BVM: What are the company’s growth objectives for the next “5” years?

Hayduk: “Our expansion into Mexico has been a pretty big deal for our company in the last 18 months. We are also active from an acquisition standpoint – we have not transacted, but we’re looking very seriously throughout the U.S. in terms of bolting on another team like us somewhere in the country. It’s a huge market and our market share is still relatively small. To have the impact we want, and to deliver the superior service, we absolutely have to grow. We’d like to be in the top three players in this space. And we don’t think that’s a difficult goal in the next five years.

“The other important thing is making sure we stay in front of changes in the marketplace. This is an incredibly dynamic market. What makes it so fun and easy to get out of bed and attracts really good people is that something is changing every day, such as the explosion of renewables in places like Texas. We’re anticipating some really interesting things coming out of battery storage, and behind-the-meter happenings in energy efficiency; the use of IoT to help people manage energy costs. There will be a ton of changes in the next three to five years, and our job as the outsourced energy professional for our clients is to stay ahead of that and bring the best solutions to the table.”

Schiefelbein: “We’re noted as a fast-growing company that’s also a great place to work. When you have both of those things, there isn’t a single stakeholder who doesn’t receive a positive impact as a result.”

 

Check out this handpicked feature on Bright Power, Inc. – Intelligence-driven energy management.

AT A GLANCE

Who: 5

What: Energy advisory firm

Where: Irving, Texas

Website: Visit Website

5 is a fast-growing company with an award-winning culture that includes the following accolades:

– #5 Best Company to Work for in Texas, Texas Monthly 2018

– #20 Best Small Workplace in America, Fortune, 2017

– #30 Best Entrepreneurial Company in America, Entrepreneur 2018

– Top 50 Best Workplace in America, Inc. Magazine, 2017, 2018

– Inc. 5000 Fastest Growing Company List, Inc. Magazine, 2016, 2017, 2018

– #40 on the Aggie 100 Fastest Growing Aggie-Owned Companies, 2017

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