Cleantech growth journey: third annual CEO retreat

Time to grow mature business

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Now in its third year, the retreat convened a group of more than 100 cleantech entrepreneurs, corporate executives, government leaders and business advisors to discuss the most important growth challenges in cleantech today — securing financing, establishing partnerships, selling to large corporations and reaching new markets.

A summary of these perspectives follows.

The capital agenda

Institutional venture capital (VC) continues to be difficult for cleantech companies to secure. One approach to compensate for the lack of VC availability is to establish joint ventures and partnerships with strategic partners.

There is also a cleantech funding gap that needs to be bridged through the cleantech community doing a better job of standardizing, rating and communicating cleantech risk.

Action points

  • Innovate in structured finance. Pension funds, insurance companies and infrastructure funds have plenty of capital, but they need to reduce their transaction costs related to the renewable energy asset class.
  • Tighten your belt. Successful cleantech firms are responding to the dearth of capital by seeking faster paths to revenue and shorter decision cycles, reducing costs and doing more with less while remaining nimble enough to pivot to more profitable markets.
  • Maintain alignment and focus. CEOs must work hard to maintain alignment with their board members and customers.

Competing for growth in a global environment

The old notion that developed countries are safe and well-organized while emerging markets are risky is no longer valid – emerging markets may actually offer more opportunity for business.

Action points

  • Be prepared. Have a strategy to protect your IP, and know which parts of your operation you want to develop in each country. Have a plan to recruit and retain local talent and key business partners.
  • Don’t be too paranoid. Disruptive technology and entrepreneurship are unavoidable. Don’t be afraid of letting your technology out into the global business world.
  • Look for public-private partnerships. They can give you better access to talent, capital, facilities, land and protection against IP theft.

Government as market

Government is a tempting market because government agencies often have huge purchasing power and, in some cases, are able to offer various incentives. But doing business with government can often be a cumbersome, slow process with long lead times, extensive screening and large but sporadic purchases.

Action points

  • Don’t go it alone. Business with the US Government is best done through partnership with an established prime contractor who has already been approved.
  • Consider grants instead of contracts. Grants are often easier to get and a better way to access capital at both the state and federal government level.
  • Federal business is not for start-ups. Doing business with the federal government is not something for smaller enterprises to tackle alone.

Working with large corporations as your customers

To court a large corporate customer, it’s imperative to show that you have done your research and understand exactly where you fit into the company’s supply chain. Showing that you have thought carefully about your value proposition will distinguish you from your competitors in the eyes of the buyer.

Action points

  • Do your research. Know your corporate buyers almost better than they know themselves. Be able to talk to them in their own language and communicate clearly how much money you can save or earn for them.
  • Show maturity. You must have demonstrable revenue and a good customer track record and be able to show that you can execute.
  • Find internal champions. You need the right person within your corporate buyer or partner to champion your product, as well as decision-makers in product, strategy, finance, purchasing, etc. Understand the agenda of each of your champions, know how you can help fulfill it, and customize your message for each one.