Inside the Mind of Utilities: At the Crossroads of the U.S. Tech Industry

By Michael Kanellos

Be honest. Five years ago, would you have believed that the entire future of the tech industry in the United States would depend on your local or regional utility?

Chances are, utilities probably never crossed your mind then. Utilities were viewed as functionaries, institutions that delivered large amounts of power and water. The real work of the world was being done by the graphic designers for social networks.

Now, of course, utilities are some of the biggest customers in the world for solar panels and smart grid technologies and can also provide incentives for things like energy efficient appliances and thin clients that can have a tremendous impact on a company’s bottom line.

So what are they looking for and how should you approach them? Jonathan Livingston, who once ran PG&E’s (PCG) emerging technology group and now heads up Livingston Energy Innovations, says that startups and other companies that want to woo utilities need to be patient. A big part of his job, he says, is serving as a cultural anthropologist.

First, utilities are conservative in part because they live under tight regulation and oversight. “There is a whole set of behaviors that have evolved from being scrutinized,” he said.

Reliability and safety are also paramount concerns. If the power goes out, or an accident occurs, the utility is potentially faced with financial liabilities and a huge black eye.