When Jay Bhatty showed up to his first day of work as an energy trader at JPMorgan, his excitement about his new job was quickly overshadowed by another emotion: frustration.
The natural gas industry in North America is made up of a complex web of hundreds of pipelines stretching across the U.S. and Canada. Within this network, there are companies that own the pipelines and shipping companies that are responsible for transporting the fuel. In his role as a representative for a natural gas shipper, Bhatty had to navigate to websites for each of the pipelines, then manually enter nominations, or “noms”—electronic orders to move a commodity from point A to point B on the pipeline—in three separate places: a master spreadsheet, the pipeline’s website, and his company’s internal system. He was required to repeat these manual, repetitive tasks for every pipeline, every day.
FINDING UNEXPECTED INSPIRATION
“I had an epiphany that first day on the job: Why isn’t there one website that connects a shipper to all of these different pipelines?” says Bhatty.
“That idea was inspired by the travel industry and the similarities I saw between an airline and a pipeline. On an airline, you have a ticket with passenger and destination information; on the pipeline, you have a contract with similar data. The passenger is equivalent to the shipper, and the pipeline company to the airline. But when you want to book a hotel room, you go to Hotels.com. When you want to book a flight, you visit Expedia. Why didn’t the same type of website exist in the energy industry?”
In 2020, Bhatty launched NatGasHub.com, a centralized portal designed to fill this need. On the company’s dashboard, shippers can automate and streamline the nomination process, submitting all of their noms at one time and in one place. Pipeline and shipping companies alike have joined the platform en masse, and Deloitte named the company one of the “fastest-growing technology and life sciences companies in North America” on its 2023 Technology Fast 500 list.
“Our platform has become the go-to industry standard in just four years,” says Bhatty. “All of the pipelines have joined, and over two-thirds of the shippers in the market use our software. Over 750 million dollars’ worth of natural gas nominations every month are transacted via our software. The big oil and gas companies didn’t want to spend the money to build and maintain a software like this, and they wouldn’t be able to share the cost with other energy companies that are their competitors. So it really required an entrepreneur to step in and solve the problem.”
OVERCOMING EARLY OBSTACLES
Transforming his vision into reality wasn’t without its challenges, however. Bhatty identifies two major hurdles that he had to overcome in the early stages of building his business, one technological and one human. On the technical side, Bhatty and his team faced the daunting task of building a single standardized platform that would communicate seamlessly with all of the pipelines’ websites.
“We had to build one interface that worked for every pipeline; otherwise, it wouldn’t solve the shippers’ problem,” says Bhatty. “It failed a lot in the beginning. It would work for one pipeline, but it wouldn’t work for the other. And then when we tweaked it, it stopped working for the first one. There was a lot of testing and iteration involved. It reminded me of the quote from Thomas Edison: ‘I have not failed. I’ve just found 10,000 ways that won’t work.’ That’s the kind of experimentation mindset we adopted when we were first building the software.”
The human obstacles proved equally challenging. As the middleman between pipelines and shippers, NatGasHub.com initially faced skepticism from both sides. Pipelines were reluctant to embrace a third-party platform, much like airlines that initially resisted flight aggregator websites.
“We had to explain to them, ‘We’re not replacing you,’” says Bhatty. “Just like Expedia is not replacing the airplane, we are not replacing the pipeline. Your business still exists. We’re just facilitating the shippers to communicate with you more effectively. We convinced the pipelines to join our network by telling them that we are a facilitator, not a competitor.”
Shippers, on the other hand, had concerns about the automation software killing jobs within their companies. Bhatty and his team assuaged these fears by positioning the software as a tool that would augment, not supersede, human capabilities—allowing employees to focus their time on revenue-generating activities, rather than on manual data entry. By persistently addressing stakeholder concerns and demonstrating the platform’s value, they gradually gained traction, reaching “critical mass” once the majority of pipelines joined the network.
LESSONS LEARNED FOR ASPIRING ENTREPRENEURS
Bhatty offers four key pieces of advice for other entrepreneurs embarking on their own journeys.
1. Embrace innovation: “You can’t really resist technology. It’s always advancing, and the companies that don’t advance along with it are the ones that become outdated and extinct.”
2. Launch imperfectly and iterate: “Create a minimum viable product that you get out in front of the market. It’s not going to be perfect. Get feedback, and use a build, fix, and iterate model.”
3. Educate your market: “There’s a lot of communication and training involved in the beginning. Get out in front of your customers, and explain how your product is going to be a paradigm shift in your industry.”
4. Be adaptable: “You may have to pivot at some point. If your software isn’t working, or if one set of stakeholders has a different need than the others, you’ll need to pivot and find common ground. Be relentless. This is a process that requires a lot of experimentation and failure, but eventually, you’ll have a breakthrough.”
