Jonathan Guerster: On the Green Path
No one's laughing now. Groom's sales doubled in 2008, hitting $8.7 million, and they should be up an additional 15% this year. "They have expertise across so many areas, whether it is renewable energy, lighting, or how to tap into incentive programs to finance these investments," says Scott Self, director of global energy management at Groom client Thermo Fisher Scientific.
While Guerster is quick to point out that the 20-person Groom Energy is, like most service businesses, ill suited to venture capital investment, his VC training in spotting big opportunities was critical to Groom's creation. Guerster joined Charles River in 1997, after being part of the group that built Internet software company Open Market. "He was a natural," helping new entrepreneurs bring on the right team, says Izhar Armony, a general partner at the firm. In 2002, after the Internet bubble burst, Charles River let a number of partners go, including Guerster. By 2005, after a few years consulting, Guerster was looking to get into either clean energy or life sciences. So when Dave Groom, a friend who ran a con- struction business, asked if Guerster might help him whiteboard an energy services startup, he jumped in. After lackluster interviews with CEO candidates, Guerster hired himself. "This was a much bigger opportunity than I'd imagined," says Guerster, who thinks Groom can be a $100 million business.
Breaking in, however, hasn't been easy. Groom would cold-call potential clients, asking for a meeting at which they'd provide their ideas for free. The key was getting Groom partner Bob Kirby, an industrial engineer with 17 years in plant operations, in front of clients. "It helped that the guy who came in to talk to them was a guy who had done their job," says Guerster. And he admits he had a lot to learn about the world of hard hats and construction. In July 2006, he was meeting a large client on what had been a money-losing deal. Guerster wanted to end the contract. The plant manager looked at him and said: "You want to do this job." The message: Take a loss on this job, but if you prove yourself you'll win other, profitable contracts. "My instinct from software deals was if something doesn't make sense you walk away from it," Guerster says. "I didn't realize the way you establish credibility inside a facility is by doing whatever it takes. You need to show the client you are on their side." That's a job for a CEO—not a venture capitalist.
For a special report on going green, go to businessweek.com/go/sb/green
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