November 11th, 2010

From ‘Green’ Dreamers to a Profitable, Respected Supply House

BOSTON -

Cambridge Alternative Power Company was founded in 1978 at the corner of Concord and Walden by a dentist, a Harvard Business School MBA, and the editor of the Christian Science Monitor.  The first employee hired by the three principals was Tim Malarkey, a recent college graduate.  The company sold solar panels, wind turbines, and a variety of other alternative energy products.  Jimmy Carter was president and the second oil embargo launched this start-up business into the spotlight of the national media.  They were the ‘Talk of the Town’ in the May 1980 issue of the New Yorker Magazine, and as sales skyrocketed they all started to believe their own media hype.

None of the principals had a business background, so Cambridge Alternative Power Company operated unprofitably for years, running on cash from investors and a growing top line.  Sales peaked in 1985 when a 60% federal tax credit for solar hot water systems made the investment a no-brainer for most homeowners.  They were selling truckloads of solar panels through a well-coordinated direct sales channel.

Then the tax credits went away and Capco’s sales of solar modules went from $2M to zero overnight.  The loss of revenue forced the owners to confront the harsh reality that they had been losing money all along.  It took the insight from a key mentor and some real courage for the principals to face the facts, and it was this humbling process that ultimately led the company to a better place.

Today Capco Energy Supply is a profitable, well respected plumbing supply house in Woburn, MA.  Their customers are some of the most trusted contractors in the plumbing and heating industry.  They work with manufacturers who sell cutting edge, high-efficiency products that the right customers can get excited about.  That success might not have been possible without learning those early lessons.

I loved this interview with Tim, and think it’s a timely message for a few reasons:

  1. The upcoming elections have huge implications for energy policy and this story sounds eerily familiar.  Lots of investors have taken stakes in clean energy companies and ‘green jobs’ and ‘new energy economy’ are phrases that get thrown around a lot.  Tim’s sober message seems obvious when you listen to it, but I think it’s a good reminder for us all to get back to basics.
  2. It’s ultimately a message of hope.  I think a lot of business owners can relate to the hard times, but it’s good to remember that you can rebound from failure.  Tim did that with Capco, and I hope his story inspires others who face significant challenges to do the same.
  3. There are great business lessons embedded in the story.  If all business owners can learn these fundamentals and apply them, our industry is going to thrive.

Thanks again to Tim Malarkey for sharing his story.  I hope a few people find it as interesting as I do.

This story was originally posted on HeatSpring’s Blog

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Brian Hayden

About Brian Hayden

Brian Hayden founded HeatSpring Learning Institute in 2007. He's an accredited geothermal installer and creates technical training programs on geothermal and solar systems. HeatSpring has been featured in Business Week's "America's Top 25 Promising Social Entrepreneurs"