MODsolar is a solar software and service company providing design, proposal, contract and transaction software to the industry on a SaaS basis. In its service operations, MODsolar provides proposal creation, PV system design and lead generation. “MODsolar thrives at the intersection of sales technology and solar energy to push the U.S. solar industry forward,” said Mike Dershowitz, founder and managing director of the Philadelphia-based company. Dershowitz recently shared more about MODsolar, the solar software market and how companies can integrate software into its business with Solar Power World in the following Q&A:
The solar industry has changed a lot in the five years since you founded MODsolar. In terms of the solar business software market, what have been the most impressive or important changes over those five years?
There is no doubt that the single biggest innovation MODsolar and its competitors have brought to the industry is to eliminate the need to complete a site visit just to deliver a proposal. Though industry standard now, the use of satellite imagery and measuring technology, and then, by extension, automated system design, has completely changed the sales delivery models that are now possible in the solar industry.
The next biggest change was the creation of so many captive platforms custom to an individual solar developer. SolarCity, SunRun, SunEdison, CPF, Sunnova, Vivint—they all have their own platforms, and so that’s making the finance they’ve brought to the market captive. If you’re not on their platform, you can’t get their funding. I think that will ultimately slow down the rate of growth in the U.S. solar market. (Disclosure: MODsolar has built a version of its Platform for SunEdison.)
The second biggest change, in my estimation, is how funding providers and software providers are now starting to work together to provide integrated solutions; this is the opposite of my last point, and a good one for the industry, I think. Many markets dependent on financing have one platform that helps run the industry, so that all actors can transact together. For example, the mortgage market has Ellie Mae. I think we as an industry need to get there. Given the power of sales-only solar companies these days, I think they’ll correctly force us to get there at some point in the future.
Thousands of installation companies are looking to take advantage of the ITC extension and grow over the next five years. At what point in a solar installation company’s growth should managers think about using solar sales software? (A blog you wrote in 2014 states it becomes wise at 20 projects per month.)
In 2016, I would definitely revise my answer to include a consideration of your sales model in your software decision, as well as your monthly projects. I think at 20 projects a month (considering you may have quoted 200 systems to get to that 20), you still need software to keep it all straight—the premise of my 2014 post. But I think there have now emerged many sales models that require many more proposals per close than we saw in 2014—like the door-to-door guys, or the folks trying to originate in retail channels. They just see many more homeowners and have to give them something, so I think more folks are in need at a smaller project volume than before.
When a company does make the leap from Excel documents to a comprehensive sales tool, typically how long does it take for employees to become comfortable with the software, and do you have any tips for successfully integrating major changes like a new sales tool into everyday business?
We see that it generally takes one to two hours of training and about 10 real-world proposals before they’re comfortable. At 10 proposals, they’ll have seen a few rarer prospect needs, and these “edge cases” (in software parlance) really flex the employee’s knowledge of their sales tools. It’s one thing to use a tool in examples, it’s completely another to accomplish what you need to accomplish through the sales tool—that’s where mastery comes from.
The biggest suggestion I have for incorporating a new tool is to take old proposals that you’ve done in excel, or what have you, and re-do them in the new tool, and then compare the results. That’s a powerful exercise for the average employee because they will really see the differences in where certain numbers are. We see it every day on our support desk. Tons of questions will come up when they do this (which is a good thing—questions are how people learn), and this type of exercise will go a long way toward helping them achieve mastery in their new tool.
What does it mean when someone says “software as a service,” and how is that different from regular-old software?
“Software as a Service,” or “SaaS,” is software you don’t own. Instead, you license it and generally pay for it monthly or yearly. It doesn’t have to be web-browser based software, but mostly it is. The software is updated regularly (we update ours at least every other week, sometimes more), and those updates are included in your license subscription. “Regular-old software” is software that you download and run locally on your computer, generally pay for once, and have to pay something extra for updates (though not always).
The ModSolar homepage points to several services, which are all based in software. These include help with transactions, project design, customer acquisition and proposals. Are these all add-ons, purchased independently, or parts of a whole solution?
Many of our service offerings are based out of our software, but add the human element to produce something of true value to our customers in their solar sales process. The difference between our software offerings and our service offerings is the difference between “DIY” (“DO it Yourself”) and “WDIFM” (“We Do It For You”). Okay, maybe I’m pushing the acronym thing too far, but inherently some customers want to focus on what they’re good at and leave the rest to us or other service providers. Some want to do it all themselves, and others want a mix. Generally all of our services are “add-on,” but a SaaS license is not required to purchase them, as they can be purchased separately. This adds a lot of flexibility for our customers, in offering them a menu, essentially, to help them choose what works for how they are successful in their sales process.
ModSolar is said to deliver a new sales proposal every 30 seconds, which is quite an accomplishment. But what’s next for your company?
So I think you’ll see that number continue to shrink as the industry grows and it becomes even easier to produce a proposal. We’ll all be producing a lot more proposals. You’ll see us integrate many more funders directly in the platform to allow our customers to quote funders directly, and finally you’ll see us continue to expand and scale our service offerings.