A cleantech company active mainly in Sweden but also in Europe, as well as in the USA, Australia and the Middle East.
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Story of Climacheck Sweden
Climacheck is a cleantech company active mainly in Sweden but also in Europe, as well as in the USA, Australia and the Middle East. Climacheck offers a method for analysis of cooling and heating processes, with the objective of optimising the functionality and daily operations of heat pumps, refrigeration and air conditioning equipment and systems. The market for fault detection and diagnostic systems is moderately new in Sweden and growing though some firms have been working in this area since the 1980s. The value proposition for measuring actual performance of equipment and systems is complex, and not well established even in Sweden. Some large owners like IKEA include monitoring and diagnostic systems in system procurement, but most do not. ClimaCheck would welcome new competitors to help grow the value proposition and entire market for fault detection and diagnostics. There are only a few “real” competitors, although several large firms claim that their services do what Climacheck’s does.
Like so many of the companies we analysed, Climacheck was founded by an engineer who experienced a technical need. In this case the entrepreneur worked with heat pumps and found that there was no tool available to measure the actual performance of the heat pump. He developed this tool, patented it and in 2004 he build a company around this tool. ClimaCheck is in a way a “hybrid” business. They sell or rent their energy monitoring products and systems to OEMs or other industrial/business customers. They also work as consultants to analyse refrigeration systems and identify faults (problems). And, they sell an ongoing monitoring service as well. ClimaCheck purchases all hardware from thirdparty suppliers, which they then assemble and test internally before selling. The hardware is customised, standard products. It allows ClimaCheck to cost-effectively provide PC-based and cloud-based monitoring services to customers.
ClimaCheck’s clients include owners, contractors, consultants and manufacturers of all types of air conditioning and cooling systems in industries like the food industry and the retail sector, properties and buildings, and manufacturing. The company is growing slowly with 600+ systems installed in over 20 countries.
Climacheck is a micro company consisting of 5 employees, but explicitly aims at developing strong partnerships with partners that can act as resellers or referral partners and act as channels as well. Therefore Climacheck aimed to partner with local distributors and installers, consultants and hardware suppliers. Initially the company believed that the consultants or entrepreneurs selling/installing the refrigeration or HVAC systems would partner with ClimaCheck to increase the quality of their services, or enhance their services with energy efficiency and monitoring services. However, this has not been the case. These firms do not want to install a monitoring system because it can expose flaws in the products or installation services (their livelihood). In addition, it would cost them time to revise/re-write previous bids (i.e., to include specifications for monitoring) for which they are not compensated.
In a parallel movement, given the contextual problem that performance checks are not mandatory, Climacheck aims to motivate potential large end-users such as large real estate companies) to think about how to include performance monitoring in their procurement. The value proposition revolves around the technical functionalities and outputs of the tool such as increase, and sustain, efficiency, reliability and lifetime of refrigeration, air-conditioning and heat pump systems through optimization of performance. ClimaCheck’s solutions are said to increase energy efficiency considerably, and often lead to energy savings of 10-40%. The World Wildlife Fund checked Climacheck and estimated that the tool, when used as a maintenance tool in the air-conditioning market would achieve substantial emission reduction.
The activities of Climacheck revolve around on the one hand product development, but lately Climacheck also aims at developing its partners explicitly as resource, and trains them in the use of its performance monitoring tools. The resources reflect this dual strategy, and resources include engineering, communication skills and software developers on the one hand, and on the other it includes the local distributors and installers. The cost structure of the business is very traditional, with almost 50% going to materials and the remaining half to personnel, marketing and product development. The revenue structure demonstrate a slight shift toward services, with consulting and constantly ongoing optimisation services accounting for 20% of the revenues. The owner does not feel the need to make a lot of profit but the company does need to make sufficient profit to cover the costs. The owners is in it for the technology and its development.
ClimaCheck is clearly very technically competent and good at sensing technical options but capabilities necessary to develop the sensing of user needs lack. Sales and marketing prowess and capacity is lacking. They have tried twice and not been able to attract a capable person to take on this position.The owner has a lot of engineering and technical expertise, but is not sales or marketing focused or interested. Climacheck is not innovating its product radically or developing completely new products, as such the conceptualising capability is limited as well. Climacheck does explicitly aim at orchestrating with its attempt at aligning the resellers and referral partners to act as middle actors between the tool and the clients who do not see the value of the tool. Scaling is not very strong, and stretching in the sense of building the company around services, including for example a focus on setting up a slaes and marketing division have so far not been successful. Climacheck does try to be user “mindful” or oriented in the sense that they hold trainings and webinars to build competence among the users of their software and products. They also try to work and educate larger customers about why diagnostics are important. So from that standpoint they are user centered, but it is a one-way ‘educating’ of the user approach, instead of collecting user needs and developing the product and or service in response to these needs.