Delivering and Capturing Value asa Startup in the TransformingEnergy Sector : – a Single Case Study of a Swedish Innovative Startup in the Hydropower Sector

Sammanfattning

The energy markets have been experiencing a crisis in the past years and the electricitymarkets are one energy market affected. Simultaneously, global targets regarding sustainability are emerging and the electricity markets account for 75 % of the GHG emissionsin the EU. Within the electricity market, renewable energy is becoming more important,hydropower being one of them. One country with a high share of renewable energy isSweden where hydropower accounts for 41 % of the total electricity produced. However,the hydropower sector, even though being renewable, still has challenges regarding environmental impacts and high demands being restricted by physical and legal boundaries.This indicates the need for new solutions, which startups often are drivers for. However,startups need to evaluate their offering and align with customer demands to ensure effective delivery.This study therefore examines what customers in the hydropower sector demand, andwhat startups deliver. Through understanding the demand and supply, an understandingof the market fit can be developed, allowing for implications on how to improve exchangevalue in the relationship. Through an abductive approach, a qualitative study, using acase study the hydropower sector was investigated. The case study was with a startupin the hydropower sector called Seapattern, which acted as the focal firm. The case studyconsists of 7 interviews with the case company, 5 interviews with customers, and 2 focusgroups with the startup and customers respectively.The findings indicate the need hydropower companies have and what the startups deliver. Moreover, the market fit is displayed indicating a partial fit between the customersand the startup. Although, the startup delivers directly in line with what the customeraims to accomplish, which is delivering electricity, the character of electricity as a commodity is not fully appreciated. Additionally, there are potential improvements regardingthe value proposition to better display the startups’ value and to align their offering withwhat the customer demands are. By better understanding customers, which prerequisitecommunication, value exchange can become more efficient. Further on, we find that thecurrent payment structure of a fee per kWh of electricity delivered is difficult to changeeven though potential altering could imply increased revenue for the startup. However,realizing that value exchanges in a dyadic relationship are not only monetary is important,and understanding the trade-off in products and services are important aspect of the valueexchange.Building on our results, we show the importance of designing and understanding thevalue proposition for startups. To do so, startups must understand customer demands and have clear communication with customers, ultimately developing the value proposition together.