Brian Hayduk has been in the deregulated electricity industry since the late 1990s. Prior to launching 5, Brian served as president of First Choice Power (FCP), where he was responsible for all of the company’s operations, and led the business to record growth. His background includes corporate strategy, business development, marketing, M&A, portfolio management and development of deregulated energy businesses throughout North America.
Prior to FCP, Brian served as co-founder and president of Juice Energy, a retail electric provider in multiple states, including Texas. He also served as a senior vice president at Constellation NewEnergy, where his responsibilities encompassed half of the company’s revenue, and he grew the North American businesses fourfold, while serving a majority of the Fortune 100. Brian is on the board of the Children’s Advocacy Center for Denton County and is a member of the Young Presidents’ Organization (YPO). He encourages sustainable practices at 5, and he’s the only partner at 5 who can claim pizza-making and fishing boatmate on his resume. He has a M.S. in Environmental Science from SUNY College of Environmental Science and Forestry and a B.A. in Economics from Lehigh University.
Tell me about your early career.
Coming out of Lehigh University with a degree in economics, I thought I wanted to be a Wall Street banker. Being Bud Fox or Gordon Gekko would’ve been fine. Well, I didn’t get a job on Wall Street, but I did get a position at a bank. I spent my first day listening to my colleagues making collection calls to people who were sold severely-overpriced debt consolidation loans. I quit on the commute home.
In my next job, I found myself performing energy audits for homes and multifamily housing complexes in and around New York City. Despite having to creep around sleeping bodies in crack houses in the Bronx and hacking through hundreds of spiders in a basement that had been unopened for years, I found my passion. Energy and the environment turned out to be my calling.
Fast forward through multiple internships, a M.S. in Environmental Science, and a few years doing environmental consulting in DC, in 1997, the first states began deregulating their electricity utilities. This was a multi-billion dollar industry that interested me and seemed much more hands-on than consulting. I quit my job in D.C. and moved back to New York, as New York was one of the states testing the deregulation waters. I applied for a trading job at one of the electricity suppliers (i.e. the company you can switch your electricity to in deregulated markets) start-ups, but was offered a sales job, instead.
I stayed nine years with that company, today’s Constellation Energy, and its subsequent owners. We went into every deregulated state, and even a few countries, as they opened up. We made every mistake possible, but survived and l learned an enormous amount along the way about how energy markets work, commodity risk management, and business in general. We grew that business into the largest deregulated energy company in North America, with revenues reaching $5 billion. The owners were foolish enough to give me responsibility for about half of that business.
One lesson during those early years that has stuck with me was delivered by the large multinational corporation, AES. AES was one of the owners of today’s Constellation Energy, back in the late 1990s and early 2000s. AES was not what I expected from a large corporation with thousands of employees across the globe. They were nimble and empowered employees, more than I have ever seen before. AES spawned multiple books and business articles about their culture. I was barely thirty and they gave me incredible responsibility and a multi-million dollar budget that I had not yet earned. They believed, at their core, that if you trusted in people and truly gave them decision-making authority, those same people would surprise you with their capacity for growth and success. It’s a lesson that sticks with me today, and a gift I hope 5 continues to pass along to young professionals.
I spent five additional years on the electricity supplier side of the industry, two of those years being with a renewable-focused start-up in which I was a co-founder. That company, Juice Energy, was financially tied at the hip with Lehman Brothers. When Lehman went under, we had to wind the business down within a short period of time. The other three years, those prior to starting 5, were spent leading a large electricity supplier in Texas called First Choice Power. We were owned by a public utility holding company out of New Mexico. It was my first effort at a turn-around situation and a cultural shift by moving from the northeast to Texas. The team at First Choice was able to turn the business around, pay off all of its debts, and push record profits back to the parent company. At the end of 2011, we had a very successful sale of the subsidiary. I not only learned a lot, but was also able to meet a couple of my future partners at 5.
How did the concept for 5 come about?
After we sold First Choice Power, a few of my current partners and I were sitting together trying to determine what to do next. Eric Plateis, a long-time friend, colleague, and partner in 5, was the first to point to the huge value gap in the broker/consulting side of the deregulated energy industry. We experienced it firsthand during our long run as suppliers, since the vast majority of commercial energy contracts written today run through a broker or consultant.
Because there’s virtually no regulation of the energy broker/consultant industry, there was a tremendous range of ethics, analytics, experience and ultimately advice. We thought people deserved much better, so we started 5.
How was the first year in business?
In a way, this was really my third time in a start-up environment and it was by far the easiest. This was probably due to a combination of incredible partners and initial employees, as well as a better business plan and more experience. We generally hit our first year goals and had a great time doing it.
What was your marketing strategy?
Our marketing strategy was less about targeting end-user clients, but rather targeting the salespeople who had those relationships. Like most salespeople, those in our industry want to deliver the best service to their clients and make a good amount of money along the way. We offered to bring to their clients a suite of services and solutions from some of the brightest and most experienced minds in the industry.
How fast did the company grow during the first few years?
We grew sales at a compounded, annual growth rate of around 60% over those first few years. In 2016, we were #1180 on the Inc. 5000 list of America’s fastest-growing companies.
How do you define success?
Impact on employees and customers, and value of the company you’re building, in that order.
What is the key to success?
Grit or determination. Over the last twenty years, I have interviewed and worked with hundreds of people, from Harvard MBAs to those self-taught through experience alone. Everyone who has a measure of success must have the foundation building blocks of moderate, intellectual capacity and communication skills. However, people who clearly rise above seem to have a drive, determination or grit that drives them to fulfill tasks and goals. That determination pushes them through obstacles and objections that causes others to quit.
What is the greatest lesson you’ve ever learned?
Hard work. Reinforced multiple times by multiple people. I grew up in a household without a lot of money. My mother always held multiple jobs. When I was very small, my mother cleaned hotel rooms in the resort community where I grew up. She would bring me from room to room as she cleaned. That was one of three jobs she had at any given time. Every one of my siblings and I were expected to work at an early age, and to do it well. My dad always said he didn’t care if I was “digging ditches,” but if I did, I better be the best ditch digger there was.
That lesson of hard work was reinforced by some early bosses. When I was thirteen or fourteen, I started working at a restaurant as a dishwasher. I spent some of the best summers of my life working in that restaurant and watched my bosses work 15 hours a day, 7 days a week. No complaints and never forgot about the team, and always recognized others’ hard work.
Tell me about one of the toughest days you’ve had as an entrepreneur.
One Sunday in the fall of 2008, I watched as CNN reported that Lehman Brothers had declared bankruptcy. About six months prior to that day, we had essentially tied our company’s fortunes to theirs through a complex credit and banking facility. I instantly knew we couldn’t survive and would have to tell our 40 employees that our run as a start-up was over. Those 40 people were some of the most passionate and talented people I ever worked with, who believed in the vision the founders had laid out. That was a painful day.
When faced with adversity, what pushes you to keep moving forward?
Confidence. I have always had confidence in myself and my decisions. I think this was another gift from my mother who always reinforced her belief in us. Because I am confident and believe in my decisions, I see adversity as simply a hurdle on the road to success, not some dead end or sign that I chose the wrong path.
What advice would you give to young entrepreneurs?
Your communication skills are not as good as they need to be. Learn how to put yourself in the other person’s shoes and practice selfless communication where it’s not about you. Learn how to tell better stories. Embrace hard work. Trust your people.
This interview was conducted for research purposes by author Jason Navallo for his upcoming book, Underdog.
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