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Reducing carbon footprints through behavioral targeting at Opower

While TechCrunch waxes about the inability of the technology scene of Washington, DC to "define itself as more than just AOL", let's look at a real DC startup success story: Opower. Opower offers a patent-pending targeting methodology to energy customers to convince them to reduce their consumption. By comparing consumers to their neighbors, Opower has discovered an effective way to get people to move beyond talking about their carbon footprint to actually taking small steps to reduce their energy usage (and utility bills).

The comparison approach, leveraging new behavioral science, is proving to be a startling effective way to convince people to take small steps to be more like their efficient neighbors.

To effect energy savings, Opower targets 2 areas:

  • Small changes with immediate impact:  Modification to daily habits, such as turning off the lights when leaving the room or adjusting the thermostat.
  • Big changes with long-term impact:  Structural, one-time activities, such as insulating the home or installing EnergyStar appliances.

But by knowing you and your energy habits, it makes targeted recommendations that you are more likely to follow. For example, it won't recommend a large structural change such as insulating your home if you are a renter. This targeting leads partner utilities to broad customer engagement; Opower claims that 85% of customers exposed to the platform take some type of direct action.

I love this type of behavioral approach because unlike efficiency regulations forced by the government, change with Opower is effected by citizens armed with greater knowledge about their own consumption patterns and habits who consciously choose to adjust their behavior. The collective impact is meaningful and it is organic, positive, and self-sustaining.

So, @sarahcuda and the TechCrunch team, next time you talk about DC and its tech scene, let's not look to 1990's AOL but 2010's Opower, a leader in innovative energy efficiency, on track to post $35 million in profits this year.

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