Why Most Energy Projects Don’t Sell (And How to Secure Your Project Will)

 

Sales

If you’re launching a clean energy project, you probably plan to sell it.

Whether you want to sell to consumers, businesses, or government, you will still need to sell your idea to someone.

The problem is that most of us are thinking that the selling part is done last… after development.

The truth is it’s not…

and I’m here to help you plan your clean energy project so that it sells itself.

 

Business is about solving problems

In the world of new business and startups, we look for a unique selling proposition that we can bring to the market, a new or different way of solving problems. With clean energy businesses we go one step closer by solving problems not only for consumers, but also for the environment.

But it’s tough to balance. Environmental problems can often be solved by technological advances and scientific discovery but there are still many barriers preventing this technology from entering the market. Of course these barriers are all unique to each project. There is by no means a magic way to solve them all. They are just challenges that every clean tech company must overcome.

Sorry, no quick fix solution.

But what I would like to share is a fundamental shift in thinking that will help clean energy entrepreneurs in the early stages of their ventures. In short, why you want to be innovator and not only an inventor.

 

Invention vs Innovation

 Invention is focused on creating something radically different and groundbreaking. This sounds great right? I’m sure we have all dreamt of inventing something new. But does it always have a place in the market?

What we are seeing more and more in the science community is that invention doesn’t always have applications that can survive in the market. Think of the last time you read about technology developments from a university lab that seemed to fizzle out after struggling to find a suitable market and paying customers. I see it all too often when money is dumped into research that aims to invent solutions without carefully isolating the core problem and who it affects.

Innovation, on the other hand, has its roots in creating practical value.  The application of something new or existing that creates value for someone. But it can also place an existing product or process in a new context.

“Innovation is the implementation of a new or significantly improved product, service or process that creates value for business, government or society.”

Innovation is a process that occurs if someone improves on an idea. Innovation is also at work when someone makes a significant contribution to an existing product, process or service. The key difference between invention and innovation is that innovation focuses on the context for a solution, and not just on the solution itself. Successful innovators understand that the context is equally as important as the solution. Context is the space for a new idea to become a valuable solution.

Think of the great innovators of our generation. An obvious example is Steve Jobs and James Dyson. Neither created new market places. They did not create radical new ideas. They instead improved existing ideas by understanding context and using design. The iPod was not the first music device, and the Dyson vacuum cleaner was not the first vacuum. But both of these products were innovations that focused on customer needs and solving a problem. They were both existing ideas that the innovators improved and applied in new contexts.

 

Innovation and Cleantech

You might say…  “But… it’s different for clean tech.”

Well, it’s not. Here’s why….

Because many clean-tech entrepreneurs are launching their venture for the first time it’s easy to forget about the importance of context and focus purely on the technology. However, to thrive in business you must focus on both.

Let’s take a look at some of the government backed renewable energy companies in the US…

President Obama has taken much of the blame for investing in companies that have recently declared bankruptcy. Many of these companies failed by not realizing the importance of context. In 2011, Solyndra, the manufacturer of advanced solar panels, declared bankruptcy because of falling prices of solar panels. Then Abound Solar declared bankruptcy in June 2012 because of strong competition which lead to falling prices of solar panels. Can you really blame the market for these bankruptcies?

Both companies followed a similar path. The problem was that they focused purely on technology as their competitive advantage, without much attention to the evolving context of their technology. Solyndra isn’t a typical solar company. In fact, Solyndra did not focus on making regular, flat solar panels. Instead they focused on more advanced, cylinder-shaped device designed to capture the sun’s rays on its entire surface, hence the company’s name. But what Solyndra forgot to consider was that people were not willing to pay their premium for this technology. The problem could be solved for their customers in the same context by traditional, flat solar panels that were being mass produced in China. It was the rapidly declining price of these more traditional panels that the company did foresee.

#rewpage#

Had these companies begun by focusing on both their technology and its context, they may have been able to thrive rather than recede into bankruptcy.

But then how do we start thinking in terms of context as well as technology?

Define your targeted audience at the beginning of any project. This way the technology solutions become far more effective, regardless of whether your audience is another business, a government or society. Let’s discuss a planning procedure that will help you to avoid common problems that a clean energy venture often stumbles upon.

 

Brainstorming and Planning for Success

It all starts by brainstorming the problem and defining it effectively. Yes, I’m saying that clean energy projects should not start in the lab but in the boardroom. When we start by clearly defining the problem, we can then look at engineering solutions.

Why in this order and not the other way around? Labs are expensive. Research is expensive. And time is precious. The more focused we can be when solving environmental problems the better. The more we can determine the context for a solution the more effective it becomes. So the more specific the brief at the beginning of any project, the less time is wasted further down the startup road.

You need to know…



What is the problem exactly?

Who does it really affect?

What are the market and economic constraints?

This can save you a lot of time and money in the long run. By using problem definition questions such as these, we can have an idea ahead of time of whether a project or product will fit someone’s needs in a way that offers value to them. No expensive research needed at this stage.

This is a mistake that many universities are still making. They spend billions a year on research and only a small percentage of these projects ever make it to market. When we look at clean energy projects that do make it, they are often founded by engineers working in the real world, observing problems and innovating new ways of doing things or applying existing solutions in a new context. If innovation is the application of invention to solve problems …then it must start with defining the problem you are trying to solve and who you are trying to solve it for.

“If people had told me what they wanted they would have said a faster horse” – Henry Ford

People don’t know what they want until you show it to them. By defining a problem in detail we can be far more creative about innovating a solution. A solution may seem straight forward or obvious but by digging a bit deeper we can look to solve the underlying problem.

in the clean energy community, we are surrounded by environmental problems to solve. So then the art of innovation comes from solving those problems with the effective application of technology. By focusing on context as well as technology. Because if the technology can’t be applied through the innovation process, it won’t survive in the market and most importantly it won’t be used to reduce our environmental impact.

Markets are honest

Markets are ruthlessly honest. If a project doesn’t offer enough value to someone then no one will pay. Whether it’s a spectacular new invention or old technology, markets only care about value to the user. So if we know exactly who we are solving the problem for, then we can do a more effective job at creating a valuable solution to take to market.

 

Innovation philosophy appliedinnovation

Laboratories and research centres have their purpose. Of course, that’s where technological solutions need to be cultivated. I’m not saying that they don’t produce essential data and  findings. However, we also need to be aware of unproductive experimentation that lacks proper planning.

If we want to create environmental change we must focus. The needs of our environment are so great we must really consider our return on investment when engaging in a clean energy project.

So let’s think innovation and move away from tradition invention mindsets. Identify the core problem, then create the technology solution. Let’s not fall into the trap of creating technology first and then trying to sell it to the world. Instead we must find out the problem and who it affects and then we can create an effective solution that will sell itself.

“I find out what the world needs then I proceed to invent it!” – Thomas Edison

 


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