Whilst the National Grid Group was being listed, in 1995, Pank Jethwa’s sales team was knocking on doors selling cable TV and telephony. A couple of years later and he had swapped cable telephony for domestic energy. Then he saw the potential in business energy.
‘ON LINE DIRECT’ was swiftly incorporated on 17 July 1998, and operating form the KG Business Centre, Northampton. Pank was set up and selling electricity contracts to small and medium businesses on behalf of Scottish Power.
As Gary Styles remembers,
Gary had joined the team of four in 1999, after seeing Pank’s ad in the newspaper. He wanted to move on from selling residential door-to-door and find a job with greater challenge and potential.
At OnlineDIRECT Gary was able to meet hundreds of business owners. This helped him develop his entrepreneurial edge, refining his pitch and observing business buying behaviours up close.
BizzEnergy entered the business energy market in 2000, looking to disrupt the status quo of the Big Six suppliers, which controlled power generation, transmission, supply and retail.
Gary was intrigued. BizzEnergy had efficient systems, smart wholesale traders and low overheads. They billed customers directly and, to save money, wanted these relationships to start online.
But it was the age of dial-up internet. Many SMEs that Gary visited – like restaurants, manufacturing companies and small hotels – were not online yet.
“Pank and I had a kind of epiphany. If Bizz wanted to keep sales costs down, they should be looking at third party channels. The TPI market had established itself. Brokers covered the UK.
And OnlineDIRECT could handle it. We’d be their exclusive TPI channel partner for electricity. Bizz would only deal with one company, instead of hundreds of TPIs.”
As Pank remembers,
“I spoke to the Sales Director at BizzEnergy and said we can take over the recruitment, training, quality control. Also we’ll act as a middleman, process the contracts that come in, make sure they’re good quality and send them across to you. We became a broker above a broker.”
Paul Adams, Sales Director at BizzEnergy, agreed. In 2003 OnlineDIRECT became the gateway to BizzEnergy for brokers.
Business changed overnight, as OnlineDIRECT pivoted from energy broker to the world’s first aggregator of energy brokers.
“We had to stop selling direct,” Gary explains,
“It conflicted with our new business model.”
The BizzEnergy proposition proved attractive for around 150 brokers and their customers. Electricity contracts, commissions and percentages were flowing through OnlineDIRECT. Yet there was wasted potential. OnlineDIRECT only earned on a broker’s electricity deals because BizzEnergy did not supply gas.
Gary pitched a gas product to Pank. Gas would complement not compete with BizzEnergy, it could be sold through the TPI network OnlineDIRECT had built, and it created value for brokers to sell. This expansion would be a risk for Pank, so Gary pledged five years of his life to make it happen in return for a 50% share in Pank’s business. Gary became a director in October 2005.
By 2005, following several pitches and a pilot run, Elf was on-board. Stuart Westerman had said ‘Yes’ and OnlineDIRECT would help Elf access the TPI market to sell gas to SMEs.
Pank’s business grew and moved office to Scirocco Close in Moulton. OnlineDIRECT also outgrew its exclusivity with Scottish Power. Gary and Pank began reaching out to other major suppliers.
New companies form to enhance the broker network
Earthwhile was founded in 2005 as a separate business from OnlineDIRECT. The online shop gave brokers a way to sell energy efficiency products and training, helping them secure deals by reducing a customer’s energy consumption.
Earthwhile was the business’s first experience of retailer issues. OnlineDIRECT’s Moulton office could be mistaken for a warehouse, former employee
Ben Cartmell remembers, “Upstairs was OnlineDIRECT, downstairs was Earthwhile and the shelving. My desk ended up being literally between the shelves. It was a very jumbled office.”
Ben had just been introduced to OnlineDIRECT by his friend Simon Yeung, an employee of Pank’s since the days at KG Business Centre.
Away from Earthwhile and Business Energy Exchange, OnlineDIRECT had dealt with a significant challenge on the supplier side.
“BizzEnergy products started going off the boil a little,” Gary explains, “Bizz prices were getting more expensive and not beating everybody in the market. Brokers saw this and were concerned. So Bizz began paying more commission to keep the deals flowing. The pattern continued. It got to a point where we could see Bizz failing.
So we took the decision to meet Paul Adams and his team and say ‘Look, you know we need to start working with another electricity supplier. We think you’re going under and, if we stay with you, we could go under too. Our brokers and partners are looking at us to find another electricity deal.’ And that’s what we did.”
From that point OnlineDIRECT committed to going to the whole of the market. The broker estate was established. OnlineDIRECT was the number one aggregator in the UK market. It was time to speak with every supplier and offer services to them.
“We’d not be exclusive to one or two suppliers again. And so I set about trying to ‘knock over’ all the other suppliers. Some of them just didn’t want to know. It was horrible but it was a start.”
Through sheer persistence and certainty in the business’s value and integrity – OnlineDIRECT never sold direct, always paid commission – Gary made some progress. Yet British Gas, EDF, SSE and E.ON all said no initially.
Gradually, through perseverance, a little luck and change in supply strategy, OnlineDIRECT welcomed British Gas and E.ON onboard. And within two years EDF, Npower and SSE would join too.
The move into corporate
Simon Yeung …We saw an opportunity to create value in the corporate market and created a new brand called business energy exchange
“OnlineDIRECT had hundreds of brokers selling energy to small businesses. But when a broker came across a big business they’d not know what to do and leave. Rather than a restaurant or shop, it might be a large office spending hundreds of thousands of pounds a year on energy. SME brokers had strong relationships with many corporate customers, they just needed help to unlock the potential.”
Business Energy Exchange helped brokers access the skills, techniques and knowledge to deal with corporate clients. The process is more consultative so the broker can forge a longstanding relationship.
I’m sure this reshaped business for some brokers, who began focusing on corporate customers as opposed to avoiding them at all costs.”
The Business Energy Exchange corporate value proposition proved to be very successful in the marketplace
From 2010 onwards, OnlineDIRECT grew rapidly. The team of 30 became 50 by 2014, 70 a year later and around 100 strong today
Our old access database was creaking with the volume and density of energy transactions. The market was moving quickly, becoming more complex and regulation was getting tighter for TPIs. We needed a new system to for OnlineDIRECT, but more importantly a system to help brokers become more efficient, more productive and ultimately more profitable. We knew nothing about technology in the early stages of development, and no software existed that we could adapt or replicate for our own.. We decided to build our own system, and overnight OnlineDIRECT became a fledgling technology business. Peter Marirosans, a technology mastermind agreed to help us build this platform. He later joined the company full time in 2014.
Early stage investment in technology in 2009 led to the launch of energyengine® in 2012, which has evolved from a tariff comparison tool, to contract filing tool, to an end-to-end energy broker management system.
The technology behind energyengine® powered Broker Online Exchange, an exploratory joint venture in the United States in 2015.
Business Energy Exchange was brought into OnlineDIRECT, so that brokers can benefit from a single account manager for their SME and I&C contracts.
OnlineDIRECT launched its water procurement services for brokers in 2017, with the hope the market would open up more fully in 2020. Brokers needed to enter with the new water market but didn’t have the time or resource to manage it, which provided OnlineDIRECT an opportunity to further engage with our current broker portfolio,as well as new brokers.
“They’ve had to show they can adapt themselves – what they started 20 years ago wouldn’t still be working in the market – and think in a different way.”
Duncan Sedgewick, director and mentor
Since 1998, OnlineDIRECT has proven itself as an innovator in the market, with a track record of being able to reinvent and back itself for two decades
“Having great technology is good. Having the right people is critical. Having the two together is the foundation for success.”
Gary Styles, managing director, OnlineDIRECT
Gab Barbaro, Managing Director, British Gas Business