The Clean Tech Hardware Oxymoron – Accelerating for Slower-Growth
- Newsletters
- March 4, 2020
Brian Tell
Expert-in-Residence
Clean Tech Hardware Program
Centrepolis Accelerator
Patience Padawan!
The mission and goal of an accelerator, to state the obvious, is to help entrepreneurs and small businesses accelerate the launch or growth of their business. For hardware or product-oriented accelerators such as Centrepolis which support entrepreneurs like you who are bringing complex physical, manufactured products to market, the pathway to growth is often much longer than it is for companies in software, services, retail, and food, for example.
What’s more, if you are trying to bring clean tech manufactured products to market, the pathway and timeline can stretch out even longer. Why is that?
Frequently, the challenge is not the product or technology (although sometimes it is). It is now easier and quicker than ever to get a prototype designed, engineered and built. I’ve seen entrepreneurs quickly build, test and field-validate awesome clean technology prototypes – sometimes with an early adopter customer eagerly on board – only to hit a wall and see forward progress slow or stop altogether.
No, the biggest challenge is the speed, or lack thereof, of market and customer adoption and scalability. To borrow from Geoffrey Moore1, clean tech hardware innovations have a much harder time than other innovations of “crossing the chasm” from early adopters to early majority or mainstream customers. The challenges are considerable; here are just a handful:
Designing a minimal viable product and building and testing functioning prototypes – which you pray you can get right the first time (um, spoiler alert, you won’t);
Finding and vetting the right supply-chain and setting up and tweaking manufacturing processes – which you pray comes in at a cost and price point that customers will pay;
Third-party certifications and small customer pilots that can last 12-24 months before you get any verifiable performance data – which you pray confirms the value proposition you’ve been pitching to the world; and
The inertia of the status quo with regard to new technologies – this is especially true in the built environment and energy sectors and can result in small pilot projects that suck up a lot of manpower but result in inconsequential revenues and/or incredibly long multi-year sales cycles.
Don’t get me wrong – there are enormous financial growth opportunities in clean tech, and some of them can be realized in the near-term. But because clean tech hardware innovations have a harder time crossing the chasm compared with other business sectors, the opportunities are likely going to be slower in ramping-up, and you need to be prepared for that reality.
Two examples from the Centrepolis client base illustrate this:
We have several clients developing large format automotive lithium-ion batteries or EV charging stations. Even with all of the recent investment and growth that EVs have experienced, the forecast for when the EV industry as a whole will cross the chasm is 2028. Whether that point comes a few years earlier or a few years later, it means our battery and EV charging clients may experience some early market success but are still going to hit large “potholes” that are deeper and wider than what their counterparts selling non-EV automotive parts and components will face. They need patience.
Another client has an HVAC system air cooler cleaning process that yields immediate efficiency gains of up to 80% plus measurable improvements in building air quality. They’ve proven a customer ROI of just a few months, not years, and the real-time data monitoring device they are developing will enable customers to save even more money down the road. But their target customers – large industrial, institutional and retail property owners – participate in industry-wide legacy practices of outsourcing facility management to firms who make a lot more money selling new replacement equipment instead of educating the customer on how easy and less expensive it is to maintain and extend the life of existing equipment. It’s going to take a while before the industry as a whole changes its way of doing things. Again, they need patience.
The point here is not to cause you to throw in the towel. As the sub-title of this blog says, you just need to have patience (my young padawan) and build it into your business planning scenarios along with that scrappy persistence and optimism that all entrepreneurs possess.
And you don’t have to do it alone. The Centrepolis Clean Tech Hardware Accelerator program is designed to help you move the needle in ways that we believe will position you to achieve your business goals in as short a path as possible. Get in touch with us to find out how we can support you and your team with:
Developing prototypes and validating the engineering and commercial readiness of the product;
Verifying your target markets and customers;
Developing a quality supply-chain and manufacturing plan for the product; and
Helping to find and facilitate connections with potential customers, partners, funders or investors.
And if nothing else, helping you to find the right balance between persistence and patience.
Connect with Brian!
1 Moore, Geoffrey A. Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers. HarperCollins. 3rd Edition-2014.