Who is the disruptive firm aiming to be ‘the Amazon of energy’?
Greg Jackson is the CEO of Octopus Energy – a fast-growing electricity and gas supplier that is driving the shift to sustainable energy in the UK and abroad. He spoke to Business Leader Magazine about being a disruptive force, his leadership style and how the energy sector is on the cusp of a green revolution.
Can you give an overview of Octopus Energy?
The company is nearly five years old now – and we set the business up to use technology to drive lower and more transparent energy prices, whilst at the same time increasing the drive for renewable energy. In a way, our job is to make the global renewable energy revolution faster and cheaper through technology.
Can you tell me about your career prior to Octopus? And the lessons you learnt?
I left school at 16 to start writing video games, and even back then, technology was moving so fast. Eventually I went back to school, and I knew the pace of technology was going to keep up, so I did a degree in economics at Cambridge. As an economist who understood technology, I started to see these opportunities where you could use a technology to create a win-win, by driving down prices yet increasing the levels of service – all while bringing in new, innovative and disruptive services.
In 2003, along with a couple of partners, I set up a business that created eCommerce platforms, which gave me an incredibly privileged view of digital disruption across a variety of sectors. One thing we learnt there, was that digital disruption does not come from companies inside the sector. Uber wasn’t built by a taxi company and Deliveroo wasn’t built by restaurants – disruption comes from people who understand technology, who can look at a sector and can work out how to change that sector through innovation. That then gave us the confidence that when we sold the eCommerce platform business, we were able to look at the global energy sector and ask ourselves, ‘how can we use technology to change that?’.
How would you describe the growth of Octopus since it was founded?
Octopus launched in May 2016, and we now have more than 1.7 million household customers here in the UK, with revenues of around £2bn – and growing by about £80m a month. We also have businesses in the USA, New Zealand, Australia and Germany – and we license our technology platform ‘Kraken’ to other energy companies. We’re now contracted to serve more than 17 million customers over the next three years. Octopus has grown incredibly rapidly. It is the fastest-growing private company in the UK, and employs almost over 1,000 people across the country.
I am incredibly proud of what we have achieved so far. We have demonstrated that green energy can be cheap energy, and that outstanding customer experience can be delivered with incredibly good value because of the efficiency that the technology brings – but this is only the beginning. Our job is to now use this as a launchpad to dramatically drive the amount of renewable energy here in the UK and globally.
What does it take to be a disruptive business?
It is about having your own view on what the fundamental problem is within the industry – and how you are going to solve it. Don’t react to short-term pressures – instead look at the fundamental challenges and how you can solve them. For us, we know that in 10-20 years, the world needs to be completely decarbonised.
In the long run, consumers always win – and we know that every sector is being transformed by technology. When you bring these observations together, we can say that we are investing in our future to relentlessly drive for change – we know that those truths around climate change are the same around the world. We have to make a change. So, companies that lead the way are the companies that will win.
Our job is to not look at what others are doing, or just do best practice – it is to define what best practice is for others. That industry leadership approach is something that businesses should think about. This is particularly true for our sector, which is at the crux of the massive disruption – and one that is regulated and heavily supported by governments. Everyone is looking for answers to this global challenge – so if we can innovate and provide some of those answers, then we can take those solutions to those governments and decision-makers so that change can happen..
Has that ideology set you apart from other businesses within your industry?
Yes – absolutely. We do not really look at the competition – other than for pricing – and we are in a great place. However, when it comes to the vision and our view of what needs to be achieved, we have to be absolutely confident in the vision we have set, and then our ability to help deliver that for our customers and clients – and for nations around the world.
How would you describe your leadership style?
My main aim is to decentralise. I am the root of the tree, and each branch needs to reach out for itself to grow. Many leaders run behind their team with a pitchfork to speed them up – however, I see my job at the front of the team with a brush to clear the way, so they can run faster. My job is to create a culture and set a direction to empower my team to deliver. The benefit of that is that I am not stuck in meetings all day – I have four or five hours a day of undiarised time. So, no meetings means that I can directly contact people within the business and help them in any way I can.
As a result, I have more time to engage with customers and leaders within the industry – as well as other innovators. This means I am focused on the overall direction of the business. I don’t spend my time reviewing individuals against KPIs – we created a culture where we have decentralised certain responsibilities so that they can grow.
Was it always the plan to expand internationally?
It was always my plan! But I was very nervous about admitting that to people. When you first set up a business you are nervous about declaring lofty ambitions. I said in front of a government committee that we intended to be ‘the Amazon of energy’ – and some of the MPs sniggered. There are a lot of pressures on you not to declare these ambitions. You create a plan, but then you are pegged back by others for being unrealistic in their eyes – but as a business leader, if I don’t declare the company’s ambitions, then we would have no chance of achieving them.
What are the future plans for Octopus?
The joy of Octopus is that energy is a $2tn (£1.5tn) global market – and it will grow to about $4tn (£3tn) once we decarbonise transport. Today, people look at us as a £2bn revenue company – but in reality that is a very small percentage of the global market.
We have got a long way to go. The fact that we have incredible growth opportunities still to come is so exciting. We are on a mountain looking at how far we have climbed – but then turning round and seeing that there are many more, even higher mountains ahead of us. The decarbonising opportunities that will be available over the next 10-15 years are very exciting. The challenge is that we need to grow exponentially quickly, if we are to deliver on our services and tackle the problem behind the reason we set up the business. The reality is that with our goal we will never be less busy than we are today. There is a long way to go and we are leading the way.
Overall, I am incredibly proud of what we have achieved. We had the Prime Minister and the Chancellor in the office for a serious discussion. It wasn’t just a photo opportunity for them. They spoke at length with myself and our CFO/co-founder about the most important aspects of the energy industry, to drive the change to renewables. We have gone from a start-up less than five years ago, to an incredibly influential force in the industry.
We helped lead the change for an energy price cap. So, on top of the 1.7 million customers that we serve, we have also helped 11 million low income households save, on average, £100 on their energy bills – more than £1bn in total for UK consumers. I am very proud, but in the future we need to do a lot more and have a bigger impact – not just here in the UK, but across the world.
What do businesses in energy have to do to survive the transition to a new energy system?
Companies like ours that can help governments meet the Paris Accord, without asking for handouts, will succeed in the future. They will be helping governments, and driving change within the business world in a direction that the public want. I am optimistic about the energy sector. Green energy is now cheaper than fossil fuels – all we need now are companies to compete, to bring customers green energy at a fair price and to drive the renewable transition.
We are now sitting on the solution within energy – the industry has changed due to the advancements in technology, which now means the renewable generation is here. We just need to market it at scale as quickly as we can.
That is the job for companies like Octopus. Adapting to the change, and embracing renewables is the future – the ones who fight against the tide will go bust. Look at Kodak and Blockbuster – those that resist change can maintain profits for a while, but then spiral into oblivion. Grabbing the opportunity to drive change can create incredible value and now we have the opportunity to start a new industrial revolution.