Should Arcadia Power prioritize expanding its community solar program to new states or focus on improving the user experience for existing customers in current markets?

Introduction

The trade-off we're examining today is whether Arcadia Power should prioritize expanding its community solar program to new states or focus on improving the user experience for existing customers in current markets. This decision involves balancing growth and customer satisfaction, two critical aspects of Arcadia's business model. I'll analyze this trade-off by considering various factors, including market expansion, customer retention, and long-term sustainability.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking about Arcadia's current market position. Could you share how many states we're currently operating in and what percentage of our total addressable market that represents?

Why it matters: Helps gauge the potential impact of expansion vs. improvement Expected answer: Operating in 5-10 states, representing 30-40% of TAM Impact on approach: Higher current market share might favor UX improvements

• Business Context: Based on our business model, I assume community solar is a key revenue driver. What percentage of our revenue comes from this program compared to other offerings?

Why it matters: Determines the strategic importance of community solar expansion Expected answer: 60-70% of revenue from community solar Impact on approach: Higher percentage would justify expansion focus

• User Impact: Considering our user segments, are we seeing any significant differences in satisfaction or churn rates between newer and more established markets?

Why it matters: Indicates whether UX improvements are more critical in certain areas Expected answer: Higher churn in newer markets due to onboarding challenges Impact on approach: Might suggest focusing on UX improvements for retention

• Technical: Regarding our platform scalability, how much additional load can our current infrastructure handle if we expand to new states?

Why it matters: Assesses technical feasibility of rapid expansion Expected answer: Current infrastructure can handle 2-3x current load Impact on approach: Lower capacity might necessitate UX focus to optimize existing operations

• Resource: In terms of team capacity, how are our product and engineering resources currently allocated between expansion and UX improvements?

Why it matters: Determines feasibility of shifting focus without major restructuring Expected answer: 70% on expansion, 30% on UX improvements Impact on approach: Significant reallocation might be needed for UX focus