What’s different this time…
According to the World Economic Forum global Investment in the CleanTech sector has soared to $282.2 billion in 2019.
However, we have been here before. The CleanTech bubble at the start of the 21st century burst in style. Over 50% of the $25 billion invested in Cleantech startups from 2006-2011 was lost and when the economy returned the CleanTech sector got left behind.
This time round it feels different though and there seems to be more bite in the Cleantech movement. However, the need for CleanTech innovation hasn’t really changed … it was still a major issue in 2010.
So, what can we do this time round to get it right?
Serial Entrepeneur and investor Peter Thiel was co-founder of PayPal and the first outside investor in Facebook. In his book “Zero to One” he sets out a framework as to why the CleanTech sector failed and it wasn’t due to a lack of demand or need for green innovation.
Thiel believes most CleanTech’s crashed because they neglected one or more of the 7 questions every business must answer:
1) The Engineering Question
Can you create breakthrough technology instead of incremental improvements?
2) The Timing Question
Is now the right time to start your particular business?
3) The Monopoly Question
Are you starting with a big share of a small market?
4) The People Question
Do you have the right team?
5) The Distribution Question
Do you have a way not to just create but deliver your product
6) The Durability Question
Will the market position be defensible 10 and 20 years into the future?
7) The Secret Question
Have you identified a unique opportunity that others don’t see?
Thiel Goes on to highlight there is one company that got 7 out of 7 of these questions right. There are no prizes for guessing who he is talking about….
TESLA is the overwhelming success story and one of the few to really excel out of the CleanTech bubble, so maybe Thiel has a point. The global Energy market is often measured in the trillions of Dollars showing an incredible market opportunity. However, Theil refers back to the ability to achieve number 3. The Monopoly Question.
He leaves this subject with the following statement for future CleanTech leaders…
“Paradoxically, the challenge for the entrepreneurs who will create energy 2.0 is to think small”
When the economy returns it’s highly likely it will look very different to what we know today. There are some business in the UK and globally doing some incredible things in the CleanTech space and are likely to become the brands of the future.
Our “Ones To Watch” in the UK would be: