As passionate advocates of solar technology, Max Aram and Chris Blevins want to help residential consumers make smart choices about installing solar energy systems. Their company, PickMySolar.com, is an online marketplace where solar providers bid against each other on residential installations, lowering the cost to homeowners by between 25 and 30 percent.
The chaotic state of the solar market hampers widespread adoption of the technology. Residential customers don’t know what factors to consider when deciding to go solar. What Aram calls installers’ “used-car-salesman” marketing strategies make matters worse, ultimately dissuading many homeowners from installing solar power. “I had the idea to create an online platform to help consumers search for the best deal on solar installation,” Aram says. “But it was just an idea—I didn’t know how to execute.” Knowing the SBDC could help, in early 2013, Aram took a course held by the Small Business Development Center at Pacific Coast Regional Corp.
SBDC Business Advisors Martha G. Castro and Harold C. Hart-Nibbrig helped Aram figure out how to monetize his idea, conduct market research, develop a business plan and financial projections, incorporate the business and develop a partnership agreement once Blevins came on board.
Be Open to Change
Castro showed Aram how to do extensive market research to make sure there was a demand for his idea. “After doing more research in-depth and looking into competitors in the space, we [modified] the business a little bit,” says Aram. Doing research inspired Aram to add more features to the service, such as the ability for homeowners to upload bids they already have from solar installers not in the PickMySolar system. PickMySolar then provides up to two hours of free consultation to assess whether the bids are fair. “At this point, our service is unique—no one else is doing what we’re doing,” Aram says proudly.
Do Your Homework
The solar industry is still young, and prices for installation can be all over the map. “People don’t know how much it should cost,” explains Aram, who faced similar uncertainty when creating financial projections. Typically, startups can develop financial projections using similar companies as a benchmark, but there was no exact model for Aram to draw from.
“That was a challenge, [because] when you’re doing projections, it’s important to be realistic,” Aram says. “SBDC helped me do more indepth analysis on the closest business model, look into the growth potential of the solar industry, and [estimate] what market share we could realistically expect to gain in the near future.”
Speak to an Attorney
Aram was concerned about protecting his business idea and, once Blevins came on board, the partners needed advice on creating operational agreements. Attorney Hart-Nibbrig helped the partners with all the legal issues they were facing, including crafting the LLC agreement.
Blevins and Aram were debating between an LLC and an S corporation. “We were kind of lost with where to go,” Blevins admits. “There are a lot of free ways to [incorporate] online, but if you pull the trigger too quickly and do it the wrong way, it can really mess you up down the road. Harold gave us some great pointers so that we had a good foundation to start on, and that really helped us to grow.”
It Takes Time
Aram says one of the best lessons the pair learned from the SBDC was to have a realistic vision of the industry, be patient and not try to scale the business too quickly. That advice came in handy when developing their website and getting solar installers on board took longer than planned. “It was hard to get there, but all the pieces of the puzzle [ultimately] came together,” says Aram. “We set milestones, and we achieved them.”
After investing an initial $40,000 of their own capital in their startup, Aram and Blevins raised an additional $100,000 in convertible debt financing from friends and family. Advisors from the Los Angeles Regional SBDC helped Pick My Solar earn a coveted space in the Los Angeles CleanTech Incubator as well as referred the company to a new innovation fund competition in partnership with the Kauffman Foundation, hosted by Long Beach City College called Innovation Fund SoCal where the pair won a $100,000 award from the fund in May 2014. Currently, the team is undertaking another round of fund raising, totaling almost $500,000 in funding from investors.
Since their launch, Aram and Blevins have added eight new employees. The startup has an average of fifty quality registrants per month and the business has tripled their monthly revenue each month. The business partners are creating reputable partnerships throughout Los Angeles and have started their own series of solar power workshops to educate customers throughout the region titled, “Solar Knowledge, is Solar Power.”
“When you’re doing projections, it’s important to be realistic. The SBDC helped me do more in-depth analysis on the closest business model, look into the growth potential of the solar industry, and [estimate] what market share we could realistically expect to gain in the near future.”-Mazyar (Max) Aram, Co-Founder, PickMySolar