Picking a Cleantech Winner
The Cleantech Open 2012 Global Forum, the spectacular “Academy Awards of Cleantech,” is one of the industry’s premier cleantech entrepreneurship events, drawing entrepreneurs, business leaders, government officials, and media from all over the world as both attendees and exhibitors.
I have been attending this event for the last few years and this year I was one of eight judges (from the investment, industry and academia communities) for the final round of the Air, Water, Waste category award. Eight startups presented and answered our questions in front of a live spectator audience. However, after the last company pitch, the audience and companies were shuffled out of the room while we deliberated on ranking the startups and choosing the winner. What happens in a judging room stays in the judging room. Seriously though, I have several key takeaways that will be useful for entrepreneurs in any industry.
Know your limitations
Specifically, knowing your offerings’ limits is as important as knowing what it can and could do. While a short presentation should focus on benefits, be ready to address trade-offs. Everyone knows there is no ‘holy grail’ technology. So, I was surprised when one company essentially stated they could take in any input to get the same desired output. As a result, a few of us wondered whether the company had a real understanding of their technology and hence whether they would ever be able to scale it and take it to production.
Make fair cost comparisons
Emerging technology cost comparisons are typically best estimates, dependent on a slew of assumptions. Investors and industry experts understand the challenges of determining accurate costs. However, they also know costs should be compared with costs – apples to apples, so to speak. We saw one company comparing their cost to produce against the price of the competition. Another company compared their offering only to the more expensive competitive offering, but omitted comparison to low-cost competitors who were cited in a third-party report they provided. From this, we speculated whether these companies truly had the claimed cost advantages and whether they could survive if they did not.
How it works matters
While presenting the opportunity and conclusions of market analysis is important, so is spending enough time describing the offering. I observed that the most common questions from our panel, across all the presentations, were of the flavor ‘how does it work?’ It is very rare for a company to spot a meaningful white space opportunity and be the only one solving a specific problem. Hence, understanding the specific workings of an offering is critical in assessing feasibility, scalability, sustainable unique competitive advantages, and potential for intellectual property protection.
Overall, inconsistencies, omissions, or unclear issues will eventually be flagged before a deal is closed by potential investors (e.g. venture capital, angels), partners (e.g. PARC), and customers (e.g. industry experts). Entrepreneurs should be ready to address, or better yet, already have addressed them.
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