Octopus chief aims to be ‘Amazon of energy’

Greg Jackson stands by his call for the electricity disrupter he founded to become the “Amazon of energy”.

Octopus believes disrupters are just getting started in energy markets

Greg Jackson stands by his call for the electricity disrupter he founded to become the “Amazon of energy”.

Compared to the logistical challenges that faced the retail tech giant in meeting customer demands around the world, revolutionising the staid world of power utilities should be a cinch.

“Energy companies are not renowned for giving great customer service, which is completely bonkers,” says the boss of Octopus Energy.

“There should be nothing simpler than delivering electrons through wires and gas through pipes. Amazon has to get 300 million different products to your doorstep and you might not be home when they do it. We’ve got to get two products to your doorstep and we literally have a pipe, a wire and a meter to do it.”

Origin Energy’s $500m deal, which included a 20 per cent stake in the fast-growing London-based start-up, handed Octopus “unicorn” status with a valuation topping £1bn ($1.9bn).

Part of the attraction for Origin was getting the Australian rights to roll out the Kraken platform, which blends algorithms, big data and machine learning to smooth customer service and logistics.

Octopus says the opportunities for both companies in Australia and beyond are enormous.

“If you look at the way a modern tech company works — say Uber — they have the same tech stack spanning the globe, which gives them massive efficiency and a massive ability to innovate in dozens of countries all at once,” Mr Jackson said.

“And that’s where energy has to go. And that’s the platform we’ve built and that’s the journey we’re now on with Origin.”

The tie-up between a tech innovator and Australia’s biggest electricity retailer may appear an odd fit.

But Origin did its homework. The Sydney power giant’s retail boss, Jon Briskin, approached Octopus 18 months ago as part of a global tour to look at opportunities in the fast-changing power industry.

Mr Jackson said he was immediately impressed.

“First of all they’d already been to see our rivals and knew more about them than we did. That’s the sort of thing that impresses you. But the other thing was that here in the UK a lot of the incumbents — the old big six — were denying the future was going to be different. And yet here was the Australian market leader touring the world to find the future. That told us they’re not complacent. They’re out there looking for what’s next.”

After starting in 2016, Octopus now holds 5 per cent of the British retail electricity market with 1.5 million customers and is adding 40,000-50,000 accounts a month.

Ovo Energy, one of its main rivals but only a decade old, bought out one of the big incumbents, SSE, and is now the second-largest energy supplier in the country.

“I think the market here is going through the same phase that the airline market went through 10 years ago,” Mr Jackson says. “Low-cost airlines became the new norm and in most markets they’re up there with the old flight carriers who have to consolidate and merge. We look at the big six power companies as being bloated, inefficient and there for the picking in the same way really.”

Surpassing customer expectations has helped build the Octopus brand and Mr Jackson says it started from a low industry base.

“Why are energy companies not giving greater customer service? It’s usually because they’ve got outdated technology. And so really focusing on using tech to sort the basics like billing and ensuring customer queries are handled well is critical,” Mr Jackson said.

“That then gives us the chance to delight customers. So if you phone us up the hold music will be whatever song was no 1 when you were 14. We’re sitting on this enormous database of customers and we should make every time they contact us an enjoyable experience.”

He says 16 per cent of Britain’s “big six” customers say they would be very disappointed if they could no longer be a customer, compared to 56 per cent for Octopus.

“That’s a higher figure than businesses like Slack, because the opportunity in energy is that we get the basics right then we can spend all our time and effort to make your life better.”