Getting easier to be green

Third-quarter 2005 investments in North American cleantech start-ups hit $425 million, according to data from industry analyst Cleantech Venture Network. That was a 37% increase on the same quarter in 2004 and the largest quarterly investment in the sectors history. 

Erik Straser, of Mohr Davidow Ventures said he expected investments to grow as more mainline firms take an interest and the established cleantech investors start to invest funds raised in 2005.

Bottom Line: start to look at mainline VC investors as a potential investing source. But be prepared to educate if you are outside solar.

VC investment in non-traditional sectors

Here is another quote from a 5 Dec 05 article in HBS Working Knowledge entitled "VCs Survey Post-Bubble Opportunities" by Julie Hanna.   I encourage you to read the whole article for the context:

What about future trends, asked Sahlman. Many venture capitalists made money in enterprise software, until the space was saturated. Will venture capitalists have an impact in fields relating to healthcare, education, and the environment—all areas that show a great demand for new solutions?

"Clean energy is big on the West Coast," said Reiss. "Venture capitalists haven't traditionally invested in those areas that you mentioned . . . but given the amount of money that's in the business, somebody is going to try, and somebody will be right."

"Those spaces that you mentioned don't fit the venture profile for time frame and liquidity," said Kapoor. "They require a ten-year, $100 million investment. With that said, the profile around energy, particularly solar, is starting to look more standardized."

Bottom Line: Having pitched clean energy on the West Coast, I know it is a hard sale. As they note, there is some traction in solar. Target the investors with a track record in the area. But be prepared for the long haul as VCs learn the technology and the business models.

VCs Survey Post-Bubble Opportunities I

Here are some snippets from a 5 Dec 05 article in HBS Working Knowledge entitled "VCs Survey Post-Bubble Opportunities" by Julie Hanna.   I encourage you to read the whole article for the context:

"We're in the lottery business—but we know we're in the lottery business."

"It's an extremely hit-driven business that's becoming more and more like the movie industry in that sense."

" . . . it's easy for an entrepreneur to make a few phone calls and find out what value you added to your last venture and how you behaved when things didn't go well."

"A lot of opportunities in the tech sector are about execution, not technical expertise, said Kapoor. A sense of timing and a good marketing instinct are two qualities at a premium in today's market."

"You can't run against the wind, You have to have the market with you."

Bottom Line: Read the article for some frank comments. Draw your own conclusions. Know your investors' point of view. See a separate post for comments on sectors other than software.

Design your Customer Experience

In the last few years there has been a lot of discussion around selling an experience rather than a product.  BusinessWeek included the in their "Best of 2005".

Frequently cited examples are Starbucks, Apple, or even Southwest (who manage to do "inexpensive" as well as "experience").

These are all consumer companies.  Do the same principals apply to the rest of us?

How of often have you heard:  "They are really good at what they do, but they are really hard to work with."  Have you ever switched vendors because the overhead to manage the contract was too high?

In these days of global innovation and outsourcing, everyone can have good quality, a lean supply chain, and low cost. In fact, they can probably steal your IP after a few months too.

So continuous innovation and an excellent customer experience matter to all of us.  We all know that it is easier to retain an existing customer than win a new one.  Good service pays. 

Good service is defined by the sum of your customer's perception of their interactions with your people, processes and systems.  Perception is reality.  Their experience is your business reality.

Bottom Line: Design your customer experience (or at least spend 15 minutes thinking about it). Look for ways to add value. Survive. (More to follow in future posts).

Choosing a way to manage product data

Why bother with PDM? Essentially because it can help you get your product to market faster and with less risk of costly errors. PDM can improve collaboration when working with a dispersed team, outsourced partners, or a demanding customer. You can spend less time trying to manage the data, and more time doing value added work. Ever heard this: "Sorry dude, I was working with the wrong version of the file."? For larger companies and larger volumes the drivers become more diverse and more complex.

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