How Octopus boss Greg Jackson took the struggle to British Gas with some unlikely inspiration

Greg Jackson is a solitary figure in utilities. Beyond his eco credentials and social media presence, people now recognise him on the street.

A couple of weeks ago, it was a couple from Liverpool in a pub, but it has happened more frequently since he launched Octopus Energy in 2016.

He says it stemmed from the energy crisis when, whether reluctantly or not, Jackson became the public face of Octopus and the industry as a whole.

‘Other energy bosses are pretty anonymous. For too long in many industries, CEOs could kind of just hide from the consequences of their actions. In sectors everyone has to use, we should be very accountable.’

It means that, whether fans of Octopus or not, people associate Jackson with a new type of energy company.

That much is obvious when I visit their offices in central London on a rainy Wednesday afternoon. Immediately I’m met with hundreds of plush Octopus toys, foliage and bright neon lights. If you’re remotely familiar with the company, it’s perhaps not surprising. 

While the challenger energy brand has overtaken British Gas as the country’s largest supplier, Jackson is not taking his foot off the gas as he takes inspiration from some unlikely places. 

The Jeff Bezos of energy?

A humble and unsuspecting character, Jackson makes a firm point of not being like other bosses.

Throughout our conversation, he references putting customers first so many times that it’s hard to know whether he’s being sincere. But it seems he is. 

When I press exactly how he prioritises customers, he says he spends about an hour a day speaking with them. Before Octopus reached 1.5million customers, Jackson says he spent two hours a night answering every email a customer sent him.

What is more telling about Jackson’s psyche and approach to business is his frequent references to Amazon and Jeff Bezos – there’s even a quote by the tech boss plastered on an office wall.

It will take some time to reach Amazon’s heights, but it is making quiet progress, having recently overtaken British Gas as the biggest supplier in the country.

Jackson says that while it was ‘fun to beat British Gas’ the real achievement was becoming a Which? recommended provider for the eighth consecutive year.

Can that really be the case? When you join a market as a challenger, the aim is eventually to beat the incumbents. Although, how much Octopus can still be considered a challenger is questionable.

With its current scale, there is a risk that Octopus falls into the trap of becoming a company they initially fought against but Jackson is adamant that won’t be the case.

‘We’re big in the UK… we’re currently building out our business [elsewhere] but we won’t be successful at that if we’re tarnished in the UK.

‘It’s a bit like Amazon. It started in the US and American customers benefited first, but then they took that promise around the world. We’re doing the same in energy. Although we look big, actually we’re only just starting what we need to achieve.’

He also says that its profit margin of 0.3 per cent is still minuscule compared to some generators that make 20 per cent or more.

‘Jeff Bezos said there are companies who’ll work hard to charge customers more and others that will work hard to charge less. We’ll be the latter,’ he says, referencing his hero again.

Another unlikely inspiration comes in the shape of outspoken Wetherspoons boss Tim Martin.

‘Companies like Wetherspoons illustrate you can charge customers less by investing in, and really working hard, on the supply chain and still do well as a company. That’s our strategy.’

Like Martin, Jackson is outspoken, albeit less aggressively and publicly takes the fight to his rivals, telling me his advice for competitors is ‘to look at your customers. 

‘Focus on them. Even in the zonal pricing debate, they’re not coming up with any better solutions for customers they’re just attacking us.’

The ‘secret sauce’ behind Octopus

One way that the energy firm could reach Amazon’s level is Octopus’ less well-known little brother: Kraken.

The software company, which now employs 2,000 people, makes up four per cent of the group’s revenue, although investors value it around the same as Octopus now it is licensed to other energy companies.

Jackson and his team initially built the platform to outsmart other utilities that use systems that are over 50 years old.

‘Kraken was the secret sauce that let us run with lower costs and pass them onto consumers… 

‘It always struck me that bosses of supermarkets can visit the stores and they’ll see how well their team are looking after their customers, how well cared for the stores are, they’ll see whether the customers are happy or not, they’ll be able to see whether they’re putting the right offers in front of customers.

‘I think when we set out to build Octopus, we built the technology Kraken that enabled the bosses here to have the same insight. 

‘I don’t know how many other bosses can open up their customer support systems but I expect all the senior people here to be using our system every day to look at what’s going on for customers. 

‘If a customer complains about an issue, we should dig into what we’ve got wrong.’

‘Broken market’ needs changing

The zonal pricing debate, where prices would be set regionally depending on supply and demand, is Jackson’s new pet project.

He, along with regulator Ofgem, is one of the few industry figures to support a change to the ‘broken market’ and has received backlash from incumbents, trade unions and business groups.

Why has Jackson got such a bee in his bonnet about it? 

He likens the current policy to that of the Common Agricultural Policy when European farmers were paid to produce crops ‘that no one wanted,’ says Jackson. 

He claims the same is happening in the electricity industry, and introducing a system based on supply and demand would bring customers’ bills down.

He has admirable intentions but you suspect there might be more at play. When consumers see Jackson as the only high-profile proponent of it, they will want to know just how much Octopus stands to benefit.

‘The benefit to us is, if we can push down energy costs, we’ll continue to win more customers as an energy supplier. We’ve got customers who’ve got solar panels, I want them to do better.’

He points to Tesco ‘which have worked really hard to push down prices on their side’. The parallel with retail is perhaps more useful than that to Amazon and Bezos.

‘What’s been missing in energy has been the innovation you see in supermarkets,’ admits Jackson. 

‘We thought the supermarket industry was mature and then along comes Aldi and Lidl to put pressure on everyone else. That’s what we’ve been trying to do in energy.’

While Jackson might cling onto that challenger label for as long as possible, Octopus Energy is far more like the established Tesco, with its Kraken tech as essential to the project as the Clubcard is to the retail giant.