[Editor's Note: Marc Gunther also conducted a podcast interview with Daniel Yates, the co-founder and CEO of OPower. You can listen to their conversation, and read a transcript, on GreenBiz.com: "How a Kindergarten Mentality Can Drive Widespread Energy Efficiency."]
We can solve the climate crisis with the right tools -- solar panels, wind turbines, electric car batteries, No. 10 envelopes and smiley faces.
Envelopes? Smiley faces?
Yep. A startup called OPower has learned that by mailing utility customers personalized reports on their energy consumption -- and then by comparing them with their neighbors -- people can be persuaded to save energy, reduce emissions and help fight global warming.
Energy hogs learn that they are most wasteful than the Joneses. Energy misers get smiley faces in the mail, and they want more.
Turns out we never escaped high school–we’re always influenced by what other people are doing.
“If I tell you that you’ve spent $1200 on heating this year, you don’t know what that means,” says Dan Yates, the company’s co-founder and CEO. “But if we tell you that you spent $500 more than your neighbor, that tells you something.”
I recently met Dan Yates at OPower’s offices in Arlington, Va., just outside of Washington. Yates is just 32, but OPower is his second startup. He sold his first, an educational software firm called Edusoft, to Houghton Mifflin for $20 million in 2004. He made enough money to spend a year traveling with his then-girlfriend, now wife, from the Artic Circle in Alaska to the southernmost tip of South Africa.
That trip turned him into an environmentalist, he says. Yates then started OPower with Alex Laskey, a friend from Harvard, who had worked in advertising and politics. Dr. Robert Cialdini, a renowned social psychologist who has spent his life studying ways to shape human behavior, is an investor in OPower and the company’s chief scientist, albeit not on a full-time basis. The company’s biggest investor is New Enterprise Associates, a venture capital firm.
How’s the company doing? So far, so good. Customers who get the peer-to-peer companies cut their energy consumption by 1.2 percent to 2.8 percent, on average, studies have found.
“Peer comparison reports can create significant net costs and carbon savings, benefiting both individual households and the environment,” said a report by Yale Law professor Ian Ayres and two students.
A couple of percentage points may not sound like much but it’s enough to interest utility companies, who are