The Cleantech Bear Trap

Positioning is one of the most important things a startup can do. Getting this right can mean the difference between success and failure, especially in new markets where the lines between segments are not always clear. Cleantech - specifically the energy and sustainability verticals - is certainly one of these markets, and I consistently see companies in this sector falling into what I call the Cleantech Bear Trap: focusing more about their cause rather than what value they are bringing to their customers. The result is a universe of solutions that are indistinguishable from one another. 

It's an easy trap to fall into. Like startups in other sectors, cleantech companies are founded by entrepreneurial visionaries who want to make a significant impact on the world. Social media and Data Startups certainly have their share of visionaries, but what's different about sectors like sustainability or energy is that the stakes are so much higher. In cleantech, we're not talking about a new advertising model or a new way to engage millions (or now, billions) of people on the minutia of their daily lives. We're talking about the global impact of complex climate systems, energy dependency and availability, and other issues that will have impacts for billions of people for centuries to come. A tall order for any startup. So I would argue that cleantech has a certain flavor of entrepreneurial vision that is unique, and startups in this sector have to work harder than other sectors to avoid the Bear Trap because without laser-focused positioning, you will look no different than anyone else in the market, regardless of your solutions. But as I've talked about before, entrepreneurial vision does not make a business. 

Take the "Energy Management" vertical for example. I once had a company that repositioned from Carbon Monitoring and Reporting into this nebulous sector, and it was a very difficult exercise.  I recall several board conversations around this singular problem of moving out of our pond of small fish and  wading into a deep, wide ocean full of much, much larger fish. It's not that you can't survive and succeed in that ocean, it's just that you need to choose your ecosystem very carefully.   That's because the term "Energy Management" isn't really a market segment at all - it's a generic term for everything from business intelligence software to social applications to smart grid hardware and controls. If you sell "energy management software", you might as well say you sell "technology" because look like every other software vendor in this vast market, until you can convince potential customers to take a closer look. Coming up with three different words for "Measure, Manage, Reduce" doesn't make you different. So many companies in this space fall into the Bear Trap: building a higher soapbox on which to talk about their cause, rather than repositioning to show how the company's solutions will solve a real problem for their customers. 

Now, there's nothing wrong with thought leadership, especially in the cleantech sector. It's an essential part of developing credibility for your startup. But don't mistake thought leadership for corporate PR, or your company's positioning in the market. They are separate disciplines. I've had this conversation with almost every PR firm and marketing group I've worked with in over a decade of running cleantech companies: focus on what your selling, how you solve a real problem. Avoid any semblance of hyperbole, and leave changing the world to the company's thought leaders and focus the company on specific, solvable problems.

Keys to avoiding the Cleantech Bear Trap are the same as in any market, so treat your cleantech startup like any other startup business. From a startup standpoint, you're not special; you're in the same race as everyone else.  Start with the "Why" (why this problem exists, and ensure it identifies with your customer), then the "What" (what the problem actually is), then the "How" (how your solutions will solve this one problem). Nowhere is there any mention of the vision/BHAG/world-changing goal of the company. Keep your feelings out of it. Don't mention "changing the world", "our energy future", etc because you're preaching to the choir. Your customers are probably going to have the same opinion on pressing global issues as you do. Focus on business problems that your customers know and feel, then offer them a way out of those problems with your product. Put your focus in the right place and you'll be able to stand out from the the competitive landscape because you're offering real solutions to real problems.