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 »





A new model for technology innovation: “Search and Development”

7 02 2010

Source: today.ucf.edu

Cleantech is on its way to potentially become the next transformative wave of innovation. As often, anticipating what the future will hold is about understanding how the past unraveled. Indeed, there is much to learn both in terms of investors’ mental models and potential analogies from past waves like the Internet and Biotech.

The emergence of Information technologies marked the triumph of the VC-backed model. The business and mainstream media helped build the myth of the geeky tech entrepreneur and the all-powerful venture capitalist. The lesson we all learned was that an idea could quickly move from concept to a reality – potentially unleashing millions of dollars while doing so. Of course in the process, numerous shaky business plans were funded; people saw value where there was just wind. Yet, tech entrepreneur/VC tandem survived the bubble and still embodies in our subconscious the perfect combination to generate technology innovation.

As a consequence, people still believe that this is the model to go for the next technology innovation. That is why, you see cleantech entrepreneurs and VC striving to walk the cleantech “revolution” along the same path i.e. funding, IPO, etc. However, savvy investors and business pundits raise some valid concerns as to the validity of the analogy. The beauty of the IT revolution was, and still is, that the development costs to reach scale are very limited. On the contrary, most of the cleantech requires longer development lead time and thus funding up to 10 times what was necessary for the proof of concept in the IT world. How many firms can realistically raise 100 million of dollars through the VC world to develop a conclusive prototype? The analogy falls short and begs for another point of reference. Read the rest of this entry »