Swedish Startup Space

Applying Lean Startup to High Tech, with Patrik Möller from CorPower Ocean

Written by on February 10

For the past years the lean startup movement has washed over the tech community like a tidal wave. But have the ideas been adopted in all startup communities? We sat down with Patrik Möller, CEO of CorPower Ocean for a chat about his business and the challenges with going lean in a high tech environment.

First, tell me a bit about your entrepreneurial background
I co-founded a company named Replisaurus Technologies back in 2001 when I was studying at UC Berkeley. We developed a novel fabrication process for microelectronic applications. The potential was huge and we developed production tools, processes and consumable products. We raised close to 500 MSEK in public and private funding, and had JDAs with leading customers and major industrial partners, but it took long time and much money to get adoption for the technology throughout the industry, which inevitably led to selling the business in a pre-mature tech-sale.

We raised close to 500 MSEK in public and private funding, and had JDAs with leading customers and major industrial partners, but it took long time and much money to get adoption for the technology throughout the industry[...]

How did you feel about that?
Well, it had been 10 years of startup life with 100% commitment. I remember thinking that the next thing should be either a similar job in a company with huge resources or create something new that was super-easy to validate. A mobile app or something with short time to market.

But you ended up at CorPower Ocean, aiming at revolutionizing the wave power industry…
Ha-ha, that’s correct. But there is a twist on CorPower’s business that makes it very doable.

Wave Power, a recap

You might be thinking wave-power, “come on”? Well, let me tell you a little secret. The Swedish startup CorPower Ocean claims to have the key for unlocking wave power and making the technology make the leap into mainstream electricity production.

The Swedish startup CorPower Ocean claims to have the key for unlocking wave power and making the technology make the leap into mainstream electricity production

The case for wave power is very strong, in theory. We can all appreciate the enormous forces of big waves rumbling towards us on a sunny day at the beach (the energy density, you would say, is much higher than solar and wind). The power output of waves is also fairly stable and has a different timing compared to the wind – after many hours of calm winds, big waves can still be rolling over the ocean.

But while wind power is expanding worldwide the oceans are still untapped. Why is that?

Well, the harsh ocean environment creates numerous challenges that often explain why wave power has yet to find its place is the energy mix. Devices have to be designed to survive storm waves that may have 30 times higher energy than the average waves. The most famous and eye-caching attempt is Pelamis, which looks like a huge water snake (of metal) almost 180 m long and 1300 tons, floating in the waves and absorbing the energy. But critics say that the technology is bulky and overcomplicated, leading to high production costs and maintenance challenges.

In Sweden Uppsala University spin-off Seabased have been going for the same market for some time, with a solution compromised by a buoy wired to a linear generator placed on the sea floor. Just a few days ago they announced the launch of Sweden’s first full size wave power farm, outside Lysekil on the Swedish west coast.

In comes CorPower Ocean

It was the Swedish inventor and serial entrepreneur Stig Lundbäck who founded CorPower Ocean back in 2009. Up until then he had spawned numerous businesses, patents and inventions from his research on the mechanics of the human heart. He was now determined to apply his technology on designing a Wave Energy Converter with unprecedented efficiency.

CorPower Ocean’s intellectual property include a novel mechanical design inspired by the pumping principles of the human heart as well as control technology that address the big challenges of wave power. After verifying their technology with scale tests in wave tanks in Portugal, CorPower are confident enough to make the bold promise of “5 times higher energy density than competing technologies, making wave power competitive with offshore wind”.

5 times higher energy density than competing technologies, making wave power competitive with offshore wind

So what’s the magic in their design?

First of all, its small size compared to the power output. That might not sound so significant, but it translates into higher survivability, easier maintenance and lower device cost. The key for unlocking the high energy density (annual energy output per ton of device) is a smart control technology called “active phase control”.

Think of it this way; every buoy would normally just float on the waves and in that way generate energy as it moves up and down. But with CorPower’s solution the buoys motion is locked in top and bottom position until the energy is as high as possible (compare to drawing back the string on a bow). When being released at just the right moment, the buoy starts oscillating in resonance with the incoming waves. This is especially useful when the waves are small. When waves are too harsh the technology can also be utilized in the opposite fashion, by deliberately going out of phase and in that way decrease the power absorption and thereby decreasing the risk of damages to the system. In extreme cases the buoy can even be fully submerged, a sort of “survivability mode”.

Tell me a bit about your business model
Complete wave farms will be sold to the power industry in collaboration with leading infrastructure companies, who will be responsible for project development, consent processes and installation. In our first pilot project Iberdrola Engineering has this role. This allows CorPower to have a narrow focus on delivering the world’s most efficient wave energy converter. Manufacturing is 100% outsourced, with final assembly and test done by CorPower.

The thing is, even though wave power is new, on the infrastructure side we will be able to piggyback on the offshore wind industry. The big players in the power industry are currently learning how to effectively install offshore wind and route the power to land, and this will be similar.

We will be able to piggyback on the offshore wind industry

You told me earlier you wanted to do something which was easy to validate? Have that “lean insight” affected the way you do things in CorPower?
Yes definitely, it’s a very important concept in capital intense product development, fast iterations and early customer feedback is key. We are building a business, not a science project. I have followed the lean startup movement from a distance for quite some time and I think there is much we can learn from the web/app startup community. In high tech startups, the time and money to proof point is a critical factor for success. By using lean thinking, effective system engineering and much simulation work I’m convinced we can take full advantage of our small and affordable devices and cut the total validation time and money to half compared to a typical ocean energy project.

We are building a business, not a science project

That sounds great, tell us how you will take this to market
First of all we are working on multiple markets for our technology. We have developed some really unique mechanical drive train technology in our power units. But, we realized the same drive train parts can be used to replace hydraulic cylinders in heavy lifting equipment (fork lifts, container stackers) and production equipment, with significant gains in cycle time and efficiency. This means we can start selling products way ahead of having our wave power business flying. We estimate that this course of action will cut the time to money in half. And we have more of these ideas, all spin-off effects of high tech engineering.

Another high tech implementation of the “lean startup method” is to do fast iterations through simulations. We’ve built an awesome simulation environment which enables us to do all kinds of experimenting and tweaking without actually building anything. And even when we do build something, we of course not go full size from the start, rather starting small and scaling up.

It is really all about risk reduction. We are conforming to a “5-stage structured verification program” that has been suggested by the IEA (International Energy Agency) as best practice for ocean energy technology. It’s developed to confront the characteristic risks and challenges with ocean power in the most efficient and rational way.

Still, the time to market is way longer than for app startups. I completely understand why many VCs and angels tend to prefer that industry right now, where validation can be done so much faster. At the same time, I want to highlight that the businesses that come out of advanced research etc. often have a longer lifetime and are more stable once they’re delivering to their owners. A social community may rise and fall, but the need for clean energy and smart components aren’t going away anytime soon.

I think many investors have been burned on cleantech throughout the last 10 years, and when they today hear of “wave power” many instinctively back off. Therefore public funding and projects have been very important for making this possible.

I think many investors have been burned on cleantech throughout the years

And the future?
Well, as I said we have our multi-stage plan for lowering both technological and businesswise risks in a systematic manner. We are currently preparing for ocean testing of a scale 1:2 system that will take place during 2015 at an established European test site, in a consortium with Iberdrola Engineering, WavEc and additional partners. The project will hopefully prove functionality and performance in ocean environment with a system having the highest energy density ever demonstrated. In parallel our drive train technology should be able to improve cycle times and reduce power consumption in heavy lifting and manufacturing equipment.

I wish you all luck!
Thank you, I’m a loyal reader of the Swedish Startup Space!

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