Thread’s Network Effect Strategy: How They’re Using Industry Relationships to Scale in the Utility Sector

In an industry with only 60 major players and roughly 800 total entities, relationships matter. In a recent Category Visionaries episode, Thread founder Josh Riedy revealed their strategy for leveraging industry dynamics to scale their utility infrastructure platform.

Understanding Industry Dynamics

“Utilities are a very unique market. It is a fast follower, close knit, heavy influence market,” Josh explains. This insight shaped Thread’s go-to-market strategy from day one.

Starting with a Strategic Partner

Thread carefully chose XL Energy as their first major customer. “XL CEO at the time sat on the Bloomberg stage in 2018 and that was the first utility to declare carbon free by 2050,” Josh notes. This forward-thinking stance made them an ideal partner for innovative technology.

Building Deep Relationships

Instead of pursuing quick sales, Thread invested in partnership development. “We had to earn the business. XL Energy did not retain any intellectual property, but they also didn’t give us money to do it,” Josh shares. This co-development approach built trust and credibility.

Leveraging Geographic Reach

XL Energy’s footprint provided natural network effects. Their operations span “five states, ranging from the canadian border to the mexican border,” Josh explains. This broad coverage helped Thread demonstrate their solution across diverse operating environments.

Creating Industry Standards

Thread focused on establishing standards for utility asset management. “We are the Thread that spans an entire organization, or an entire utility… across all their assets,” Josh notes. This comprehensive approach makes their solution more valuable as adoption grows.

Timing Market Transformation

The company aligned with industry-wide transformation. “There is a generational opportunity…utilities making the pivot into renewables and making a pivot away from large opex, which was fossil fuels and uranium, to produce power,” Josh explains. This shift creates urgency for digital solutions.

Building Regional Momentum

Thread’s success is reshaping North Dakota’s tech ecosystem. “North Dakota is a well kept secret that others are learning about,” Josh shares. Their growth demonstrates how regional success can fuel broader industry adoption.

For B2B founders targeting traditional industries, Thread’s experience shows how understanding and leveraging industry relationships can accelerate adoption. Their network effect strategy turns each successful implementation into a catalyst for industry-wide expansion.

The key is patience: build deep relationships with influential early adopters, establish industry standards through those partnerships, and let natural network effects drive growth. In close-knit industries like utilities, reputation and relationships often matter more than aggressive sales tactics.