Thursday, August 25, 2011

Why cleantech cannot wait for Washington

By Tom Pincince

Historically, companies that invest in bold new ideas during lean economic times lead the way during a recovery. This is why startup companies typically play an oversized role in growing our economy. Beyond the obvious advantages associated with starting a company during an economic downturn — e.g. lower facility costs; cheaper, more available talent; hungrier suppliers; and potential partners — one of the most important dynamics of success is often overlooked: tight customer budgets.
 
Tight customer budgets force company founders to focus, like a laser beam, on the economics of their business and, as importantly, the customer purchase decision. More than ever, fundamentals matter. That has driven companies like ours and many others to focus on delivering exceptional value with products that meet a critical business need and make good bottom-line sense. The fact that a supplier may be a ‘cleantech’ company is often irrelevant to customers — it is all about the company’s ability to meet their needs.
 
This is no small challenge. But companies across a variety of industries have faced these challenges and have managed to succeed. So, I am confident in cleantech’s ability to do the same, even in the absence of tacit support from Washington. Yes, a national effort to support clean technologies, through carbon taxes or energy price supports, would certainly help. But with Washington digging in its heals over clean technology legislation — even as international competition grows increasingly fierce — waiting for Washington is not a viable strategy.
 
My belief is that cleantech startup companies, like any other technology endeavors, must, first and foremost, figure out how to be good businesses, regardless of a national legislative climate that promises no real support over the short haul. That means leveraging the challenging environment to focus on business fundamentals and getting those right.
 
Does this mean ignoring Washington? Not at all. It just means not waiting for that elusive price on carbon or other legislation.
 
The need for innovation across all industry is simply too pressing and the window of opportunity too short to wait for perfect market conditions. Big, bold ideas cannot wait for better times. They must get a jump start so that when things do change — either economically and or legislatively — that the companies behind them are positioned to leverage those positive developments.

Energy Leaders Forum Responses

Mitch Tyson of Tyson Associates

Tom’s piece is right on target.  If we design our companies and our businesses to depend on good government policies then we are wasting our time.  The right thing to do is design strategies to be resilient and focus on commercial value creation in current market conditions.  Government will come along eventually and as Tom says we should do what we can to encourage good policy.  But in the meantime entrepreneurs must be pragmatic and create real value for customers right now - good discipline for the emerging and growing cleantech industry.