This month we sat down and talked to Erik Underwood – Renewable Energy & Climate Solutions investment professional with extensive experience across diverse markets throughout Americas and globally, and a mentor of the Start-Up Chile accelerator. Read the interview to find out the expert opinion about the sustainable transition, greenwashing, and, of course, Erik’s opinion about Volvero. Scroll down!
5 min read
How did you come to mentoring?
Most of my career I have worked growth stage companies in the renewables and the sustainability space. Also, I have done equity capital raising and M&A investment banking for cleantech companies. So the idea of supporting companies that are going through the same growth process is interesting to me. I enjoy this dynamic process where I can advise and help people work through relevant issues and challenges. And I want to continue that, especially with companies that are entering new markets. In the case of Volvero, the idea of a startup that reduces car usage and takes advantage of unused assets that are already in the world spoke to me, so I was happy to bring my perspective to Start-Up Chile.
Since you mentioned Volvero, what’s your opinion about us?
I think the product is really great. Businesswise, I think the competitive advantage of Volvero are the partnerships and that it was able to lock in markets with local municipalities in Europe. This garners trust, priority over international players, as a local European company, and you can grow fast across the countries.
What about yourself? Do you participate in sharing economy or shared mobility? How do you move around?
I have in the past, but not in Chile yet. There is an option here in Chile called Awto, which is a fleet of vehicles that is owned by a startup, but I haven’t used them because I thought they were too expensive. And so when my car has not been available, I use ride-sharing apps such as Uber and Cabify all the time.
“The startups that I see want to prove that their business is going to work by having customers, but they also want to prove to customers that the product is worth buying. It’s chicken and egg all the time.“
Coming back to mentorship, is there any pattern that you see among the startups? For example, all of them come to you and have the same problem all over again?
Yes, I think the biggest challenge is always getting confidence that you have a good product and then how to bring it to the market. It is like you’re trying to race those two things, and it’s chicken and egg all the time. The startups that I see want to prove that their business is going to work by having customers, but they also want to prove to customers that the product is worth buying. So often the hardest thing is the balance between those two and decisions on where to put priorities and resources.
“For the companies, the best protection against being accused of greenwashing is to just be clear, transparent, and honest. “
And what’s usually your advice in this case?
I’d say get the product to work. You have to have a product because even if you have really, really great customer outreach but you don’t have a product that they can immediately use and see the benefit, you won’t even be able to establish a market, and even more importantly free advertising by word of mouth. You need to make sure that you have something functional, easy, and readily available.
Seeing that you’re an advocate of climate solutions, I was curious, do you see an improvement in the mindset of society, whether it’s in mobility or other industries? Since it seems that because of the companies that were doing a lot of greenwashing, some people don’t take climate actions seriously anymore. And saying “we are sustainable”, has lost its value because of this controversial reputation that it got thanks to companies exploiting the hype term to their advantage.
I don’t see a controversial reputation. What I do see is sustainability is now the norm. I think what is important for the companies is to be really transparent about how and why.
For example, I have a couple of different bank accounts in Chile, and one of them says: “We are doing carbon footprint measurement of all of your purchases.” But what does that add or tell me? Where’s the solution that says: “Look, we calculated that you use X amount of cubic meters of carbon, or tons of carbon and here is how you can offset that easily”. Moreover, this needs to be pushed over and over again. Similar to when you do carbon offsets for flights, where for a affordable price they help you to offset your flight’s footprint. ,In the pandemic, companies in the last two years have struggled with, first of all, just staying alive in the pandemic and keeping their business going. But second, making things easier, going further, and pushing that into the sustainable space. I think everybody that I know is now aware that the world is doing bad, and they care about what are everyday decisions that they can make as consumers to reduce their impact.
And for the companies, the best protection against being accused of greenwashing is to really just be clear, transparent, honest, and following through with your sustainable solutions.
In your opinion, where should the initiative start? Is it a private sector in society or the government should set strict rules on car usage, transportation, waste management etc.
I’m a (sustainable) free market capitalist. So I think it’s the society and the companies. The benefit that we have now is that companies understand that part of the way how they need to approach consumers is by showing how sustainable they are. Companies are already working hard to get those solutions developed now, so that they can beat any of the UN sustainable development goals (SDGs) out of an urgent solution to push sustainability further and save the world, while being competitively advantaged in their own business. The upside is that governments will then be proud with the results and they’ll make new, more aggressive goals. Governments will say: “Okay, we’re push to do more because we’re meeting goals faster than we expected.” But I do believe that that comes from the private market.
What would be your example of a corporation that does good in that sense?
I think another Italian company, Enel has been great at this. In addition to pushing renewables aggressively both in Latin America and globally, they have their whole frontier sustainable technology team called Enel X, which has received got huge contracts to supply electric buses or new EV charging station solutions in cities. Even though they’re a power company, they know that there’s decarbonization that needs to happen system-wide. They’re pushing for it to be a lot faster. And they want to be a market leader in a new transitioning market.
Thank you a lot for your insights, Erik!
Ekaterina Efimova, Marketing & Communications Specialist at Volvero