Octopus Energy CEO, Greg Jackson, explains how the company has solidified its status as the UK's fastest growing energy company during a period when the wider industry has struggled.

Prime Minister and Chancellor using EV chargers

Prime Minister Boris Johnson and Chancellor of the Exchequer Rishi Sunak visit clean energy providers, Octopus Energy. (Credit: Octopus Energy)

Despite being just six years old, Octopus Energy is one of the world’s leading clean energy providers. It is now valued at over $5bn – a unicorn five times over. Yet it’s just getting started.

Lynette Eyb talks to Greg Jackson, founder and CEO, about how his team blends remarkable business growth with a thoughtful line in sustainability.

When Greg Jackson started designing computer games at the age of 16, he probably never imagined he’d end up leading a tech colossus at the forefront of the green energy revolution.

But the Octopus Energy co-founder has proven adept at applying innovative ideas to an increasingly antiquated electricity market.

The UK’s fastest growing energy company is valued at more than $5bn and is picking up thousands of customers a month. Aligned with brands as diverse as M&S and Arsenal FC, the company has fostered real star power in a sector traditionally regarded as a necessary evil.

Packaging renewable energy and transparent low prices around slick marketing and a savvy social media strategy has proved a massive hit.

With operations and alliances in the US, Germany, Spain, New Zealand, Australia and Japan, it’s an outlier with its sights firmly set on revolutionising the global energy market.

“Technology predated business for me, by a long way,” explains the Octopus CEO, whose early forays into business involved building software platforms for large companies, as well as assorted start-ups (he’s often described as a ‘serial entrepreneur’).

Regardless, the experience served him well as he set about building smart digital platforms to supply affordable energy to the masses. Looking back, Jackson describes those early days as a “front-row seat in the digital revolution”.

Adding that energy was clearly a market in need of transformation. “It was regulated in pretty much every country and had incumbent companies growing bureaucratic and bloated,” he says.

So in 2015 – with the climate crisis looming – he teamed up with co-founders Stuart Jackson and James Eddison to do something about it. Looking back, Jackson concedes that the Octopus success story was about good luck and good management in equal measure.

“We were definitely lucky with timing,” he says. “We weren’t so early that everything landed on a world that wasn’t able to absorb it, and not so late that we had to play catch up.”

Combining old and new

From day one, Octopus was a disruptor, yet Jackson was careful to retain some fundamental business practices. “The inspiration for me was the golden age of retail,” he says.

“When you used to see a retail business get a new CEO, you’d see things turn around. And that’s because the CEO would walk the floor and see how customers were interacting with staff, what products were on the shelves. I spend a few hours a week dealing with individual customers – those few hours are like walking the floor.”

To put it another way, Jackson agrees that he’s nurtured a family business mentality despite Octopus’s sprawling tentacles. I suggest that – one day soon – he and his senior team will no longer have time to ‘walk the floor’.

He says it’s the system – not the ideology – that will adapt. It’s a concept already being applied across his business. “When our customer operations team grew to around 50 people, we found they were taking less personal responsibility for customer issues,” he explains.

“We were about to implement metrics and KPIs – all the things you see in a call centre – but then we realised everything had been incredible when we had just ten or 20 people.”

Instead of creating more top-down control, the customer operations teams were divided into smaller units of about ten people. “As the company grows,” Jackson continues, “we grow more teams.

The most successful teams are split to create new leadership opportunities for the people in the highest performing teams. So what we’ve got is dozens of small businesses.”

Transferring knowledge and promoting individual responsibility in this way is crucial, as is employee
buy-in to the company’s mission to provide cheaper, cleaner energy.

In many ways it’s an easy sell – the environment is a hot topic and people are passionate about working for companies that fight climate crisis. “It may sound easy, but the delivery is unbelievably difficult,” says Jackson.

“Loads of companies are trying to wrap their products around the environment, but it’s only skin deep. The real challenge is to be true to the core – if we’re going to say this stuff, we need to deliver it. We need to make sure that we are relentlessly driving to make green energy cheaper. Authenticity is the thing that actually makes it hard.”

Lead from the front

That’s certainly good PR, but it’s also good for the bottom line. And it’s here that Jackson’s core ethos marries with the strategic decision to actively develop the energy sector – rather than waiting to cash in on the transition away from fossil fuels.

“We’ve chosen to be a leadership business – we’re not going to spend our time dragging our feet until we’re forced to do something,” Jackson explains.

“Thomas Edison created the electricity system; we’ve got to do the same again, but with renewable energy. The current system is built around all the stuff we’ve got to move away from. We’re reinventing the system the way Edison would if he’d done it with renewables. That’s our job.”

That job includes providing teams with the tools to work independently within a decentralised work environment. “We give people a framework, a mission, a culture,” he says.

“What we don’t do is go through a big checklist every Monday and ask, ‘have you done this?’ Trusting people with responsibility is an amazing thing.” Jackson says this way of working has given management the ability to “fight on lots of fronts at once”.

Those fronts are diverse – the company has invested in everything from wind turbines in East Yorkshire and South Wales to a concept that pays solar-powered homes premium rates to feed power back into the grid at busy times.

There’s also a multi-million pound foray into hydrogen. All the while, the company has ploughed resources into developing software that has been licensed by competitors. Jackson says this last strategy in particular has allowed the company to control its own destiny.

“If you’ve outsourced your software, every innovation becomes a negotiation between you and the vendor,” he says. “If you control the technology, you can have an idea on Tuesday afternoon and by Wednesday it can be in place.”

Jackson calls it the equivalent of compound interest and compares Octopus to Tesla, which makes its own electric cables. “They’re not constrained by commercial contracts and I think that’s the same for us.”

There is little doubt this approach derives in part from Jackson’s lifelong understanding of the power of technology. I ask whether the company would be as successful with a finance professional at the helm.

“It’s a bit like a strategy game on a computer,” he says. “You can choose different characters, some characters have good offensive capabilities, but they can’t move very fast. Others have tremendous defensive capabilities, but they’re weak on offence. You can actually win with any character if you play to its strengths. Our strengths are in creating and deploying technology.”

Those strengths – and the company’s agility – are backed up by any number of investments. These include the recent acquisition of sister company Octopus Renewables and a buyout of French operator Engie’s UK customer base. Perhaps the most audacious early move was a successful 2018 bid to pick up 100,000 customers after rival Iresa went bust.

These momentous decisions, however, don’t keep Jackson awake at night. The company’s extraordinary growth, he says, allows room for error.

“We’ve got a very straightforward decision-making criteria and we apply that very quickly,” he says. “Often, the only way of finding out if something is a good idea or not is to do it. If we make a mistake today, that may be 1% of our business – within a year, it’s going to be 0.1%.

“If we don’t take those risks, we won’t deliver exponential growth. If we do take them, exponential growth means most mistakes won’t look very important down the road. I think that’s critical.”

Even in a market in such a state of flux, Jackson says it’s possible to stay one step ahead of the competition. He cites the electric car market as an example. “It’s fascinating to look at the early forecasts for electric vehicle growth produced by the traditional car and energy companies and by governments – they were all orders of magnitude wrong,” he says.

“If they’d gone out and actually driven electric cars five years ago, they’d have known that they were going to be the biggest thing ever.” Jackson adds that having a finger on the pulse of external environments and ignoring “voices of incumbency” have been key. “Then it’s just a matter of working out what it means for our sector and what we can do about it.”

What Octopus did with electric vehicles was to promote uptake in subtle yet market-shifting ways. There’s an e-car leasing division, as well as dedicated tariffs for electric car users.

“It’s a bit like when mobile phones were first introduced – we needed specialist retailers that understood mobile phones were different to traditional phones,” Jackson explains. “So we created energy tariffs designed to work with electric cars. When other energy companies were saying that electric cars would create too much demand for electricity, we showed it to actually be an opportunity, not a problem.”

Jackson’s team then set about winning customers – and making money. That’s true across Octopus’s other ventures, notably the company’s Electric Juice Network.

It’s designed to enable customers in the UK to use any one of around 90,000 commercial charging points and bill it back to their Octopus accounts.

The customer, for their part, doesn’t need to worry about who owns the charging point. This idea, striking in its simplicity, was derived from the autonomy given to employees under the company’s decentralised system.

“One of our team realised that there was an API and an interface into those charging points that could be connected to our platform,” he Jackson.

“It was prototyped with three days’ worth of development by a freelancer. I don’t think I knew about it until they’d gone quite a long way down the road. We just gave the guy who came up with it more and more time and it got bigger.”

“If we don’t take those risks, we won’t deliver exponential growth. If we do take them, exponential growth means most mistakes won’t look very important down the road. I think that’s critical.”

Power at an affordable price

Octopus is clearly invested in the environment. Yet despite this focus, to say nothing of its wide range of projects, the firm isn’t exclusively concerned with hitting green energy goals.

Pricing is the other crucial factor, again largely influenced by Jackson’s own background. Brought up by a single mother, he remembers what it was like to live on the breadline.

“I know what it’s like to be cut off, to literally have
no power. I know the stress caused when people have to choose between buying a school uniform and paying an energy bill.”

He emphasises the company is therefore designed to appeal to a broad spectrum of customers – from the upwardly mobile who can afford a new electric car to people who just need to keep the lights on.

“We’ve got teams who knock on doors because the only way of reaching some segments of society is to do that. For us, it was never a business choice about where we set a price – the mission was always to drive prices down.”

Technology has made that mission possible – and profitable. Jackson insists green goals and cheap energy can be achieved concurrently. “The underlying physics means that green energy is now cheaper to generate than energy from fossil fuels. The tragedy is that we’ve got an energy system that still doesn’t reflect these cheap renewable costs.”

The company, for its part, will continue to disrupt the playing field. Jackson puts it like this: “The energy system has to learn from other sectors about efficiency. Milk leaves a farmer at 70p for two litres and by the time it gets to Tesco, it’s at 109p. You need to pay for trucks, drivers, refrigerated shelving, bottling. Electricity leaves the farm at about five pence a kilowatt hour and ends up at 17 or 20 – all it’s done is gone down some wires.”

To put it another way, Jackson says he’s determined to drive “energy dinosaurs” out of the market. Although the technology exists to largely rid the sector of fossil fuels within a decade, he says legacy companies – and the people who run them – are holding back progress. His criticism stretches to their government enablers.

One Bloomberg report put direct G20 government support for coal, oil and gas, and fossil fuel-fired power generation at $3.3tn between 2015 to 2019. It’s a situation that Jackson says is entirely unconscionable.

“I hear people saying, ‘Well, how are we going to help fossil fuel companies transition?’ Well, no one helped [retailers] Debenhams or the House of Fraser,” he points out.

“No one should be helping these energy companies – they’re inefficient and they’re destroying our planet. If I could, I’d set up a new grid with a distribution network for green energy only and we’d compete with them until they didn’t exist. That’s what happens in retail.”

Even so, progress is undoubtedly happening across the sector, albeit at a slower pace than Jackson or climate activists would like. EDF, Shell and E.ON are just a few big-hitters investing in renewables, while the market will inevitably spawn more start-ups looking to ride the green wave.

Jackson acknowledges that as the market shifts, the Octopus template will be copied and exploited. “That’s why we have to innovate our innovation – our only defence is to stay ahead. We’ve got to make sure that by the time people get to where we are today, that we’re somewhere else.”

This article originally appeared in CEO winter 2021.