Geeks have done their share; it is now up to you, business leaders, to innovate!

5 03 2010

Cleantech Gap, Source: Clean Horizon Consulting

In their recently published book “Wired for Innovation,” MIT Professor Erik Brynjolfsson and Wharton lecturer Saunders contend that: “even if all technological progress were to stop tomorrow, business could create decades’worth of IT-enabled organizational innovation using only today’s technologies.” As a society, we all expect technology innovations to bring more progress to everybody, and at a faster pace. However, we rarely reflect on whether our business leaders innovate enough to match the high expectations we have for the technology community. How many times have you heard of a revolutionary technology vs. a revolutionary business plan?

Humor me on this one: should a technology be discarded because its benefits under the current business model does not overweight its costs? or should it be discarded because we could not think of any business model in which its benefits overweight its costs? Let’s take the electric vehicle as an example. In a previous post, I have shown some reserves regarding electric vehicles adoption because the technology still does not make economic sense in the current business models. However, I also affirmed that it could become a reality, today, with a company like Better Place which offers a revolutionary business model. Electric vehicles only make economic sense if you look at the total cost of ownership i.e. car’s price tag + fuel cost + maintenance cost. Therefore, Better Place knew they needed to find a business model that would leverage this challenge as a strength instead of a weakness. Instead of selling you a car, Better Place will sell you kilometers to drive, which translates into charged batteries. Like with a cell phone, you will buy the hardware (the car) and you will choose a plan that best fits your driving needs. Better Place owns the batteries and will provide you with a network of charging stations to recharge them – monitoring your consumption while doing so. cye88sebwgzu CYE88SEBWGZU Read the rest of this entry »

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Car Wars: The return of the Electric Vehicle

2 02 2010

Better Place Car (Renault) - Source: socialearth.org

While covering the 2010 EDTA Conference in Washington on electric vehicles for Clean Horizon Consulting, I learned that the first cars were actually electric vehicles. It is only under Thomas Edison’s advice that Ford chose to develop a model around a combustion engine. Edison knew that in terms of energy storage, it is hard to be more efficient than fossil fuels. Then, the technology struck back in the aftermath of the 1973 and 1979 oil crises. This eventually led to some product developments – for those who remember the infamous GM EV1. At that time, electric vehicles with its multiple drawbacks (range constraints, time to charge, lack of infrastructure, etc.) could not threaten the more flexible and established technology that was the combustion engine. Can the story be any different this time?

During the conference, even the most adamant electric vehicle (EV) evangelist knew that mass adoption of EVs will come down to one thing only: customer experience. Early adoption is never an issue especially for a technology that can appeal to both geeks and environmentalists. The real trick though is to secure mass adoption. This is actually where the technology failed in the past. You have to provide the average consumer with at least an on-par experience compared to what she is used to getting with her current car. This is all the more challenging that a seamless customer experience requires the emergence of an ecosystem linking a nebula of actors. If you wake-up at 7AM to get to this important meeting and your car is not  charged up, who should you call? The car manufacturer? the utility? the charging station manufacturer? All of them? For those of you who tried to get a Google Nexus while conserving your current T-Mobile account, you know that seamless interactions between companies’ customer services rarely self-emerge.

While the industry is still fighting to define standards, a self-emerging ecosystem seems like an utopia. As a consequence, EV will struggle through the next decade, slowly grabbing market share but growing slower than some could have expected. However, we should be aware of two important wild cards: Better Place and Smith. Read the rest of this entry »