DeepTech Startup Active Energy Systems Cools the Competition During COVID

DataDay Design is interviewing CEOs and Founders of start-ups and early-stage companies to talk about entrepreneurship and learn how these businesses are navigating the COVID-19 global health crisis. This interview is with Dr. Levon Atoyan, co-founder of Active Energy Systems, a seed-stage cleantech and deeptech startup developing ice thermal storage systems that will allow corporations to cool buildings more efficiently, at a lower cost. Their innovations provide opportunities for facilities to reduce their HVAC-related greenhouse gas emissions.

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How did Active Energy Systems start?

Levon and Mitchell both earned their PhDs from Cornell. After meeting through Cornell’s technical entrepreneurship club, the pair applied to NEXUS-NY, an accelerator with a focus on customer discovery, hardware development, and cleantech. NEXUS provided Mitchell and Levon an opportunity to explore the cleantech space and put their technical backgrounds to work. NEXUS also provided the initial funding that allowed Active Energy Systems to start on their prototype.

Over the course of the NEXUS accelerator, their team got serious about entrepreneurship. In 2017, they earned funding from ORNL’s Innovation Crossroads. As a result, Active Energy Systems moved its headquarters to Knoxville, TN. They’ve spent the last few years conducting research, testing different iterations of their product, and improving their prototype using government grants. Active Energy Systems will begin to seek seed funding and move beyond the R&D phase in the coming months.

From Left to Right: Mitchell, Lucas, and Levon

The company will also be shifting to commercial product development in 2021. So far, they’ve focused on building an MVP to generate confidence and trust from their end-users and partners – commercial building owners, energy/facility groups, and chiller manufacturers. Their current MVP is scaled down two orders of magnitude from their final product.

How has the global health crisis impacted AES?

Because the company is still in the product development phase, they weren’t exposed to a rapid loss of customers when COVID-19 caused an economic downturn. Active Energy Systems had to shut down their research lab in April, but their team quarantined together to continue working. Their smaller size allowed them to return to the lab in May.

Coronavirus has also impacted Levon and the team by slowing conversations with several funds they had been in contact with. 

What are some of the greatest learning experiences you’ve had since starting your own DeepTech startup?

Many of the product development processes typically employed in a start-up, such as Lean and Agile, didn’t apply to Active Energy Systems’ early-stage operations. The company’s deeptech focus typically means rapid iteration usually takes months. One of the greatest early challenges was figuring out how to adapt those traditional product development processes to their situation. By shifting to a customer discovery strategy that frontloaded concept exploration, the team was able to apply relevant development frameworks.

Another realization of note was the importance of securing non-dilutive government funding for deeptech start-ups. Those funding programs are more willing to accept technology risk than equity investors. As such, these sources of funding are critical to the early stages of developing a hard tech product.

Finally, Levon suggested that any grad or Ph.D. student planning to pursue entrepreneurship in the deeptech space has a lot to gain from exploring government SBIRs, as well as commercialization programs such as Innovation Crossroads.

Commercial Prototype

What is Active Energy Systems’ Digital Strategy?

Active Energy Systems’ growth depends on developing strong customer relationships and nurturing them over time. The company’s digital strategy is different from typical D2C companies and even most B2B companies. That’s because quick conversions based on brand or digital marketing efforts are nearly impossible.

Via direct digital outreach, AES hopes to connect with established companies looking to fulfill corporate social responsibility commitments to reduce their emissions. These corporations provided the initial customer insights that led to Active Energy Systems’ conceptualization, and their team hopes to continue focusing on corporations with a mind towards GHG emissions reduction.

Active Energy Systems is currently seeking seed funding as well as OEM partners to bring their commercial product to market.

You can read more of our interviews with America’s brightest entrepreneurs here

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DataDay Design is interviewing CEOs and Founders of start-ups and early-stage companies to chat about entrepreneurship
DataDay Design is interviewing CEOs and Founders of start-ups and early-stage companies to chat about entrepreneurship
DataDay Design is interviewing CEOs and Founders of pre-seed and recently seed-funded start-ups to talk to