Mangrove

Helping homeowners improve energy efficiency and resiliency against natural disasters

The idea

Mangrove helps homeowners do a self-assessment on their home’s energy use, water efficiency and resiliency against natural disasters. Our broader mission was to offer tools that improved home efficiency and resiliency while addressing financial and insurance needs, creating a more holistic approach for homeowners. Our broader vision was to build the largest database of home-by-home energy, water, and resiliency assets - we would be able to tell you exactly what was running and protecting a home at every address.

Homeowners upload photos of their home’s assets (e.g., appliances, backyards) onto our mobile app or web interface and answer a series of questions. Our tool assesses the asset through computer vision and connects to databases on appliance energy use and local water / energy costs to provide an estimate of what they would save if they made improvements.

Our main differentiating factor from other home assessment tools was our sales channel. We sold the product to real estate agents as a marketing tool, since agents want to provide value to their clients to stay top of mind. The agent pays us a monthly fee of ~$20 / month to share our product with homeowners. Additional revenue sources we planned to grow into included affiliate fees from retailers of the appliances we suggested, and selling warranties / insurance tailored to energy-efficient and resilient homes, but we didn’t get to that point. A second factor was the combination of energy use, water use, and resiliency into one platform.

Competitors / Substitutes

There were a number of startups with a similar mindset, all riding the Inflation Reduction Act wave. For example, Elephant Energy in Denver, QuitCarbon out in the Bay area and Sealed out of New York. Many approached homeowners directly versus our choice to go after real estate agents.

After we shut down, we saw a few startups that attacked the problem by targeting contractors. They hypothesized that homeowners might not be motivated to make changes on their own, but a contractor could influence them. Since the contractor is already in their home renovating or remodeling, you could empower the contractor to brand themselves as someone who saves homeowners money by finding higher-performance appliances that come with rebates. 

Amount raised

I was able to bootstrap Mangrove. I had sold my last startup (an Agtech company).

Duration

Mid 2022 to end of 2023

Team size

5

What went well

We moved fast and iterated quickly. As a serial founder, I wasn’t afraid to say that a certain decision or team structure was not working, For example, we were building this product for real estate agents, and they asked for modifications to our initial dashboard interface since they wanted more of a marketing tool. We made those changes swiftly. 

This project aligned with my North Star. I’ve been in climate tech for a decade and my goals for my next project were: 1) changes the world for good, 2) combines the physical and digital world and 3) is personally meaningful. After I became a homeowner, I realized I didn’t know much about my home and there was no good self-assessment tool out there. So I got my home energy efficiency certification and took training alongside construction workers. Even though Mangrove didn’t make for a great startup, I enjoyed working on something that met all my personal drivers. And although we didn’t fully develop the insurance aspect, the exploration of financial products opened my eyes to the unmet needs in the homeownership market, particularly around tools that help homeowners reduce long-term costs while mitigating risks.

Challenges and what you'd do differently

Channel

As a serial founder, I knew that how we sell the product would be the biggest challenge. We made a big bet on distributing through real estate agents that did not pan out. We had bad timing because in 2022 / 2023 home prices were high and few houses were selling. Real estate agents were not making money, so they didn’t want to spend on marketing. 

Also, building new agent relationships is really hard. Agents want to see you in person to build trust. Most agencies disseminate information during a monthly meeting that falls on the same Monday, which limited the number of in-person pitch opportunities. In B2B, you have to be out there physically in front of people to win.

As we looked at expanding locations, we were constrained by areas where we had sufficiently strong agent relationships (on top of there being an environmentally-conscious demographic). We targeted LA to Santa Barbara since we had relationships there, and there are high energy and water costs and a relatively “hippie” population. Some other areas we considered would not have had the same profit profile as LA. 

Product Market Fit

Our hypothesis was that homeowners were increasingly driven by financial reasons (vs. sustainability) to improve home efficiency. However, we found that their level of financial motivation was still not strong enough to drive action. Saving ~$150/yr in electricity bills wasn’t worth it for most homeowners to put in the effort. And water use is often underpriced, so water efficiency wasn’t going to save even less. While homeowners weren’t as financially motivated to make efficiency upgrades, we saw a significant opportunity in bundling these insights with financial solutions like warranties or insurance discounts for making their homes more resilient.

Home sellers also didn’t have much incentive to upgrade appliances to increase the attractiveness of their home, because retail prices were so high at the time. And homebuyers typically fall in love with the house and neighborhood, and don’t care as much about the efficiency of its appliances - plus they were already eager to put down an offer quickly since there was short supply.

Real estate agents were intrigued by the idea of using Mangrove to position homes as financially smart investments. This planted the seed for how tools like ours could complement home insurance policies or warranties to create a more comprehensive homeowner package.

We also struggled with focusing on one subject for the MVP. Homeowners say they want a tool that addresses the house holistically: energy, water and resiliency. Ideally we could have focused on just rolling out one vertical, but homeowners who cared about one issue typically wanted to solve the rest at the same time.  Plus, energy and water efficiency are intertwined - if your water heater is inefficient for example, you waste water waiting for it to heat up for your shower.  In retrospect, it is possible we could have focused on only the electricity vertical, and not been as concerned about (some) customers cutting us off. 

Remote team

Though this wasn’t my first fully remote team, it was the first one that started fully remote. It’s harder to build camaraderie and learn about fellow teammates without those organic interactions that come from sitting together day to day. Bootstrapping also made it harder to host in-person retreats. I do love working remote though, it allows you to access the best possible talent. I just also see the downside much more since I’ve seen how well things can click in person. 

Interview above with Mangrove Founder / CEO Liron Brish. Liron is currently COO of Crop Guard, an AI company that simplifies crop insurance decisions for growers and insurance agents.