Editor’s Note: CNY Executive Q&A is a feature appearing regularly in The Central New York Business Journal, authored by guest writer Jeff Knauss, who is president of his own digital-marketing firm. In each edition, Jeff chats with a different executive at a Central New York business or nonprofit, with the interview transcript appearing in a conversational Q&A format.
In this issue, I speak with Phil Van Horne, founder, chairman, and CEO of BlueRock Energy, Inc.
BlueRock Energy is a Syracuse–based energy company that provides electricity, natural gas, and renewable-energy products to small and medium-sized businesses, and consumers.
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Van Horne is set to receive the 41st Crystal Ball Award from the Central New York Sales & Marketing Executives (CNYSME) this April. CNYSME annually bestows the “prestigious” Crystal Ball Award to a local businessperson or group of business people for contributions to the sales and marketing profession and for their community work.
KNAUSS: Tell me a little bit about your background and how you ended up founding Blue Rock Energy.
Van Horne: I grew up in Northern New York, in Canton. I went to high school there and then went to college at Clarkson University. Right after graduating, I began working for General Electric in Schenectady, and then transitioned to working for Niagara Mohawk, where I stayed for 22 years. I left Niagara Mohawk right at the time when National Grid bought the company. My last job at NiMo was running its unregulated marketing subsidiary — I was responsible for writing that business plan, billing the company, and then selling it. (The sale was part of the National Grid acquisition, and part of that deal was to sell the marketing company and sell all the power plants.) After that, I realized I truly had the entrepreneurial experience to match an entire startup lifecycle — from creating the business plan to making the sale and everything in between. From there, I decided to start what has since become Blue Rock. That was in 2003, and here we are over 13 years later.
KNAUSS: So you sold the company, had a little capital, which you invested in starting Blue Rock?
Van Horne: Actually, the sale proceeds of the Niagara Mohawk subsidiary went to Niagara Mohawk, since they owned the company. I did have some money saved up and I was also offered a severance package from Niagara Mohawk. I teamed up with other investors who shared my goals and together, we started Blue Rock in 2003.
KNAUSS: What was your motivation for starting your own business?
Van Horne: There were a couple of things. For one, I had spent my entire life working for big companies and I didn’t want to do that anymore. I really wanted to do my own thing. I had several job offers on the table, and very well could have stayed with large Fortune-500-type companies, working in executive roles. At that time, I had two kids in college and one in high school, and people thought I had lost my mind, especially in my decision to base the company here in Syracuse. The hub of the energy world is Houston and many of our competitors are based there. So, a lot of people told me, “Well, if you’re going to do this, you’ve got to do it in Houston. Taxes are lower, the labor pool is bigger — go to Houston.” But, at the end of the day, I didn’t want to go to Houston — I wanted to stay here, and it has proven to be the right decision for us. The talent in the Syracuse job market is great. There are a lot of really great people who love this city and wouldn’t ever want to live anywhere else. Our company’s ability to provide strong, professional jobs that lead to lasting careers — alongside our focus on providing a great work environment — make the difference. When we closed the books in 2003, we had four employees, and today, we have 76. We’ve been able to grow very consistently over the years.
KNAUSS: Tell me what you attribute that growth to and how Blue Rock is different than some of your larger competitors.
Van Horne: Well, I think there are a couple of things that set us apart. When we started, our target market was small- to mid-sized businesses primarily in upstate New York. BlueRock has a big advantage in our ability to go talk to each business owner or franchisee and work directly with that person rather than some purchasing agent or through a third-party. We’ve built strong relationships by being honest with people about what we can and cannot not do, and by always delivering on our promises. We’ve worked hard to earn our reputation as a highly ethical company — it’s very important to us and is in our DNA. And we realize people like doing business locally. To stay true to our roots, even though we’ve expanded to cover five states, we have hired sales people in each market — Syracuse, Buffalo, Albany, New York City, Philadelphia, and Springfield, Massachusetts — so when we’re dealing with business owners, it’s not over the phone or through emails. It’s a real person sitting across the table from the customer, figuring out the problems we can solve and creating a plan of action together. This emphasis on creating lasting personal relationships with our customers has worked really well for us — we’ve stuck to that model for 13 years and we’re going to keep doing it forever.
KNAUSS: Is Blue Rock’s primary target audience business owners or homeowners?
Van Horne: It’s both. We started out being strictly B2B with small-to mid-sized businesses and then we started getting a lot of questions from the business owners who were like, “Hey, can I do this at my house?” At that time, we weren’t registered to do business with consumers but we had so much demand for it, we decided it was time to expand our services. Today, the residential side has actually grown quite substantially for us. It wasn’t our original target market, but it definitely is a huge part of what we do now.
KNAUSS: Tell me a little bit about the biggest risk that you’ve ever taken and how you did it.
Van Horne: Just starting the company and going all in. I didn’t try to do it part-time and take on five or six projects in hopes one thing would stick. I focused on BlueRock Energy and doing everything I could to make it the best company possible, and that itself is a risk.
Every day, a key part of our business is managing our financial risk and then managing that energy commodity risk for our customers. And it’s something we truly pride ourselves on. We’re in the energy markets day in and day out, doing nothing but risk management. Our energy advisers meet with customers and explain to them what the risks of different products are; it’s one of the core skills here, and we’re very good at it. For example, if you go back to the winter of 2014 (the “polar vortex,”) our customers that were on fixed prices made out very well, and we were able to maintain those fixed prices all the way through, just as we had promised. One of the reasons we were successful was that we had identified those risks and were therefore prepared to manage them well all through that difficult time period.
And there are multiple kinds of risks. Another example is when we moved into this office, we had six employees here, about 3,500 square feet, and people looked around and said, “What are you doing with all this office space?” I said, “Don’t worry. We’re going to need it,” and now here we are a decade later and we’ve outgrown it completely and are now doubling our space and moving into a new building. Now, moving into this new building is a risk. It’s a big commitment, both to the employees and to the overall Syracuse area, but we will ultimately deliver on that commitment.
Essentially, every day owning a company, and working in the energy sector, is a risk.
KNAUSS: Explain your hiring practices and how you find employees that are great fits for Blue Rock?
Van Horne: We look for people who have the skillsets we need for the particular job at hand, but we also seek employees who have the right work ethic and work attitude. We have a pretty flexible environment here — we know people have their own rhythm of life and while employees don’t come and go as they please, we always treat them as people first. For example, if someone has a doctor’s appointment and they need to leave, they just go. It really pays off because when things get extremely busy, people are more than happy to pitch in and do things that aren’t in their job description or work more overtime / on weekends. We’ve been very successful in hiring the right kind of people who have the right attitude, and that has really been a defining feature for us. Our employees are always willing to do whatever it takes to get things done.
A lot of our new hires come from existing employees’ recommendations. We really encourage that, because let’s face it, you’re not going to stand behind somebody that you know is going to fail. When people suggest a friend or former colleague, it works out well.
KNAUSS: How would your employees describe your leadership style?
Van Horne: Well, it’s funny. One of the comments that I know has been made about me is new people saying, “Hey, what’s up with Phil? How do you figure out what he’s thinking?” The common response I’ve heard, throughout my career actually, is: “If you want to know what Phil is thinking, ask him. He’ll tell you.”
Anyone can say, “Hey, what are we doing? What about this move to this new office?” or “How come we’re expanding into Connecticut?” I’ll always share whatever I can, even if the subject is not part of their direct job. If they’re interested in it, or want to be involved, I’m here to give them as much info as I can. I’ve always been very open with all the employees regardless of whether they happen to have an executive title or some other job function within the company. I try to treat everybody with an equal level of respect, and in return, I’ve found they do the same for me.
The one thing with being a business owner is I’ve basically done every job here at one time or another. Whether it’s been standing in as our office’s maintenance guy to personally purchasing power to making a sale to offering help in closing the financial records, I’ve done it all. Maybe I haven’t done it as well as the people that are doing it right now and specialize in it, but at least I know what they are doing and the challenges they’re facing. I think that really helps when people run into difficulties or challenges. I have direct insight into what they’re dealing with and I can help offer solutions.
KNAUSS: So it helps to understand every facet of the business?
Van Horne: It really helps. I’ve stuffed envelopes, cleaned the bathrooms, set up cubicles, set up computers, all these kinds of things. I’ve answered phone calls from customers so I know what the customer-service team is talking about. I think it makes it fun for me, but I think it also helps people do their jobs, too. They know I get it and I’m here as a resource for each employee, regardless of his/her job title or specialty.
KNAUSS: What do you feel is your largest challenge moving into 2017 and how will you tackle that challenge?
Van Horne: Our biggest challenge will be managing our recent expansions. We’ve just moved into two new states during 2016 — New Jersey and Massachusetts. Before that, we expanded into Connecticut and Pennsylvania. Now, we’re moving into a larger office space in Syracuse to accommodate more internal growth. All those expansions are big changes for the company and managing change is always a challenge. We’ll take it as it comes. Each one of those states has their own regulatory environment; each state has their own market dynamics in regards to what customers are looking for, and on the purchasing-side (buying natural gas and electricity for our customers), the state markets are completely different. Therefore, we have to make sure we’ve got the right skillsets in each of these states. I think just growing into the base we’ve built in the last two years is the biggest challenge we’ve got.
KNAUSS: That sounds like it’s also a huge opportunity.
Van Horne: It’s a great opportunity. We sell electricity and natural gas. Everybody uses electricity and certainly in the metropolitan areas, everybody has a natural-gas pipe coming into their home or business. The market opportunity is huge, especially on the electricity side. There’s nobody that’s off-limits from the sales perspective when we hire a new salesperson. They can go anywhere and know that person uses our product. Every business uses what we’ve got to sell. It just creates huge opportunities for the right people.
About the author: Jeff Knauss is managing partner and president of a digital-marketing firm, The Digital Hyve, and has always been interested in hearing successful executives’ stories. He lives in Camillus with his wife Heta and son Max. For more, check out his blog at www.CnyCeo.org