Creating what the market was missing

After selling his electronic controls business which employed some eighty staff, Terry Flavell retired to Spain where he has a number of rental properties. Stunned by the energy bills he was receiving, he realised they’d been whipped up by air conditioning units which holiday makers were keeping on round the clock even though they were out on the beach all day. Now, thirteen years later, he can think of it as an investment. Because solving the problem resulted in him going into business with his daughter. Though at the time, he found himself facing a real conundrum. “If you’re at home and paying the energy bill, you’re careful about what you turn on and off,” says Samantha Flavell (daughter and managing director of Climateq). “When you’re staying somewhere on holiday, then you probably aren’t thinking about how much energy is being used.”

Insisting guests turned everything off if they weren't using it might have been considered a bit Basil Fawlty, so Terry looked on the internet for a control which meant the system wouldn’t work if people weren’t in the building. After getting over the shock of not finding anything which would do the job, he decided to design one. “I immediately saw the commercial potential for what Dad was immature to join his original business. I wanted to be out in the big wide world. I loved the smell of a proper engineering workshop, but it wasn’t glamorous enough for me and eventually I had a career working with companies selling products into Formula One. “When we started thirteen years ago, who had heard of net zero? At the time we were just thinking from an energy-saving equals cost saving perspective.” Of course, launching a new product that should have buyers forming a queue doesn’t mean that is what will happen. “I remember trying to find out who I should get in touch with at companies to give them an elevator pitch on the phone because back in 2010, they didn’t have energy managers,” says Sam.

“People I spoke to thought it was a good idea, but nobody really had it as part of their remit.” She reasoned that existing equipment, still with years of life, needed the Climateq retrofit devices to make them as energy efficient as possible. “Now it isn’t so much about return on investment, because that can be measured in a matter of weeks. It’s totally about reducing carbon footprint and the aim of achieving net zero,” she explains. “It is a reason why our products are manufactured in this country. If we are to reduce carbon footprint, how can we justify having them made in China? Today the repertoire has been extended beyond air conditioning units to cover server rooms, data centres, commercial walk-in fridges, optimising the operation of the condenser to reduce running costs by 30% without affecting the temperature delivered into the room.

“Our niche is low cost, high impact controls which are simple but effective,” Sam explains. Despite the growing intensity of focus on protecting the environment, Sam has found the wheels of change are still turning slowly. “It was three years from the time we put in a proposal just to keep things moving, and of course we had to continually adjust because the specification kept changing. “I don’t think in business we sufficiently value other people’s time as we do our own. The communication element is frustrating, because all we need to be told is that we won’t be able to move forward for however many months.” But she recognises that in another sense, moving forward is exactly what an innovation-based company which has ‘disrupted’ the market with a new concept has to keep doing.

“We are developing a new generation of product with touch screen control, aesthetically pleasing as the unit has to look right to fit into a boutique hotel room, which will enable a company to manage its global estate of equipment by being able to alter settings remotely,” explains Sam. “The system monitors occupancy of a room to ensure efficient lighting, heating, and cooling energy use. As it is internet of things enabled, the system will alert the company when it needs to dispatch an engineer to service a particular piece of equipment.

“There are more competitors coming into the market, but we have a thirteen-year head start on them and we have always kept innovating.” Apart from help with research and development from the European Union regional development fund (which honoured all pledges made before the UK’s departure), Climateq has been self-financed. “Where there is a weakness is that we have been supply only, and we’ve had to rely on a customer’s air conditioning contractors or engineers for the installation,” Sam says candidly. “Our intention is to find a national contractor who knows our technology and is also able to provide the continuing technical support if it is required.

“Our aim? To grow as a company, because I don’t want to have to work till I drop! Eventually, Dad will retire, and maybe that’s the time investors would come in to buy the business.” For now, Climateq are demonstrating that they aren’t the commercial equivalent of a one trick pony. “We also make available products from other niche manufacturers which relate to our specific area of work and which we can sell to our existing customers, rather than seeing them as something which can take us into other markets,” Sam says. “I think being specialist makes us more valuable than being a Jack of all trades attempting to provide smorgasbord of energy saving devices.”

The Decision Magazine's article is also available here.