Export Wise

Upstart Energy Saving Technology Maker Sees Near-Term Opportunities South of the Border

Sometimes what you don’t do in pursuing business can be just as important as what you do to be a business success. That’s the philosophy guiding Paul Mertes, President and CEO of the Toronto-based CircuitMeter, as he maps out his company’s pathway into the international market.

“Because we are an early-stage company, we have to take a strategic view of how we expand,” says Mertes, whose company has developed a technology that provides companies and building managers with the information they need to significantly reduce energy use and lower expenses.”We have to establish the technology and we have to manage our costs very carefully while we build awareness and sales volume,” he said, acknowledging the company is working initially with shareholders’ money.

While the temptation is to take CircuitMeter’s proven technology to the world, Mertes is focusing on North America, where his goal is to build the foundations of the company’s success and strength.

To that end, he has been crisscrossing the U.S., visiting potential customers in San Francisco, New York and Boston and Washington, D.C. The states of California, New York and Massachusetts have been in the forefront of energy conservation and climate change initiatives, making them prime targets for CircuitMeter, he said. After that, Illinois, Texas, Florida and Hawaii, which he describes as a good laboratory with its high-energy costs, are likely market possibilities.

“International opportunities are increasingly coming to us – and we’re fine with that. Once we reach a certain stage in the U.S., it will be time to get more aggressive outside of our own continent.”

Mertes believes building business on an international scale starts with discipline. “The first ’do’ is to develop a plan, to stick to it and not be distracted from it,” he says. “For instance, when we are invited to China, Germany or Brazil, generally we are saying ‘no thank you’ – we don’t have enough time, and that is an expensive proposition compared to all of the opportunity immediately to the south.”

Measuring energy use is far from a new business. The first electric meters even pre-date Thomas Edison’s invention of the incandescent light bulb in 1879. The initial goal of metering was to allow utility companies to measure and bill their customers’ electrical consumption. And while the technology of measurement advanced over the next 120 years, that purpose did not.

It took the evolution of “big data” in the early 2000s, combined with advances in telecommunications and wireless technology, to give CircuitMeter the tools to break down electrical consumption to a “circuit-by-circuit” level at a cost that runs as little as one-fiftieth of traditional services.

Mertes says large, cumbersome and expensive meters were replaced by inexpensive router-like devices that could measure watts, volts and amperes on a second-by-second level, establishing a highly accurate baseline for electrical consumption. But more importantly, applications shifted from billing to showing how companies could save money by analyzing energy use.

“It enables an entirely new level of energy measurement – and will enable energy analyses that can lead to reduced energy use and costs,” he says.

Those potential savings are significant. Of the $250-billion that U.S. commerce, industry and high-density residential sectors spend annually on energy, the U.S. Department of Energy estimates about 30 per cent is needlessly wasted. That waste can be attributed to everything from “mistakes” such as rooftop air conditioning units operating throughout the winter, baseboard heaters warming rooms in the hottest months of the year to machines in need of maintenance operating inefficiently in a production cycle.

The challenge has been companies have often looked at energy costs simply as overhead, a gross dollar figure to be paid every month, says Mertes. Now, with CircuitMeter’s ability to monitor consumption on a micro-level, send that data up into the cloud and analyze the data, clients can learn how to target potential savings.

To date, CircuitMeter has focused on proving its technology within Canada, an approach that has led to the company being recognized as part of Canada’s 2016 Clean50, which recognizes individuals and organizations who have done much to fight climate change, and raise awareness of how transition to a low carbon economy is a remarkable opportunity for Canada and Canadians. After that, he notes, “it’s a big world out there.”

QandA with Paul Mertes, President and CEO of CircuitMeter

What was your first export sale?

Our first export sale (over the last two years) was to Walker-Miller, an energy company in Detroit. They, in turn, were dealing with some clients—Techtown (a non –profit “business accelerator”) and Wayne State University.

How did your first export opportunity arise?

Basically we were looking to expand into the United States and this particular organization (Walker-Miller) was introduced to us. There are a lot of different types of organizations—energy retailer companies, energy management companies, energy service companies, facility management companies—that are quite interested in this technology. The timing for this type of technology is perfect, as the world is really looking for cost-effective ways to reduce their energy and carbon footprints, but do it in a cost effective way that provides a good ROI.

When it comes to exports, what do you know now that you wish you knew then?

In our two years of business we’ve only made some initial sales in Europe and Asia. It is simply too early to talk about that. My views are shaped by my experience in previous stages of my career where expansion into the middle East, Asia, Europe or the United States were all “the right option” at that time and for that company.

What is the #1 thing new SME’s need to know about export and trade?

Developing a good export strategy is critical to success in this day and age, he says. CircuitMeter has selected the United States as a key target for sales because it is a sophisticated market with states like California, New York and Massachusetts seeking to be in the forefront of energy conservation and developing ways to promote, regulate and accelerate the adoption of technologies to combat climate change.