The 4 Steps Clean Energy Entrepreneurs Should Take Now To Prepare For The #GreenNewDeal Boom
As we’ve seen through demonstrations like the Youth Climate Strike, the next generation is intent on taking action to fight climate change. Young people are bringing attention to potential solutions, urging government officials to do more, and illuminating what previous generations have neglected: that this effort is massively important.
While this is undoubtedly a good thing for the planet at large, it’s especially good news for clean energy entrepreneurs. The clean energy industry already features cost-effective solutions, but their biggest barrier is laziness. Young people are bringing a new kind of momentum and focus to cost-effective solutions, forcing decision-makers to prioritize action. Soon, clean energy solutions — and folks positioned to produce them — are going to be in even higher demand.
Here’s what entrepreneurs working in the clean energy space should do now to prepare for the increase in demand that will reach them in the coming years.
1) Find your product market fit.
Or, in other words, work to identify who will benefit most from your product.
This is trickier than a lot of entrepreneurs initially think. It’s tempting for manufacturers of electric vehicles, for example, to assume that everyone would benefit from driving — and purchasing — an electric-powered car. But, in reality, someone driving 40,000 miles a year like a rideshare driver or a person with a job that gets reimbursed for mileage (a home healthcare worker, for instance) is going to get far greater economic benefit from driving an electric car.
Many car owners drive less than 8,000 miles per year and therefore hardly ever think about the maintenance and fuel costs associated with it. The rideshare driver, on the other hand, would pay awfully close attention if you told them, “Hey, I can save you 80% on your current maintenance and fuel costs — all while bettering the environment.”
Yes, that last piece is important and influential — most customers do want to play their part in combating climate change — but entrepreneurs shouldn’t forget the importance of targeted marketing here. This will prove essential both in maximizing sales and in making your core product offering attractive to investors.
2) Find a finance provider.
Clean energy entrepreneurs should keep in mind that despite the cost effectiveness of solutions, people still don’t want to pay for 5 years of savings upfront. You’ll need a financial partner similar to one like my company, Generate Capital.
One reason for that is the nature of most clean energy products. These are not items customers pluck from the shelves at the supermarket. Often, what clean energy entrepreneurs sell are big purchases like geothermal heating, solar panels, electric vehicles, battery backup, and other infrastructure solutions. To sell that kind of product at scale — even to customers who really want and need it — you’re going to need a way to let them finance their purchase over time.
If you can’t provide financing for no money down, customers are going to opt for the lowest upfront cost which won’t be the best long-term solution.
This requires a financing partnership. And you need to be planning for that from day one — in the very first version of your business plan. It’s a matter of identifying how, exactly, you’re going to get your product into the hands of customers.
3) Focus on a state where regulations support your product or service.
When it comes to economies conducive to the growth of the clean energy sector, not all states are created equal.
Some states, for example, have mandates that support energy efficient HVAC technology — companies building products designed to enhance heating, ventilation, and cooling systems. Utilities in these states may have rebates specifically for your product. Other state governments, on the opposite side of the spectrum, may actively get in your way.
So it’s incumbent upon you early on to identify which states might help you reach customers — which local governments are courting and incentivizing companies in the clean energy sector — and which won’t. It will make a difference.
4) Start sales.
Finally, once you’ve identified your market fit, potential government partners, and a means of financing your product, it’s time to put together a sales plan.
This includes identifying your value proposition and honing your messaging. Should you lead with a message highlighting the environmental benefits of your product, or with messaging that focuses on the financial savings? This will look different depending on your market and your offering.
Yes, there’s a lot of excitement about clean energy right now — a lot of enthusiasm and momentum behind the movement to go green. And that’s incredible.
But the entrepreneurs who end up truly scaling to billion dollar impact in the fight against climate change — and who end up prospering from the associated market opportunities — will be the ones who start thinking about how to best position themselves and their product now.
Those who wait will be left behind.
