When we speak about innovation, engineering is only 1 piece of the puzzle. A lot of times, it is also needed to innovate fundamental small business models to permit the engineering to get traction.
I figured out this lesson in my “day career,” representing alternative energy developers. Back in 2005, wind electric power was all the rage. Meanwhile photo voltaic remained mired in a Capture-22 conundrum: because the engineering demanded higher-fees upfront, householders were being unwilling to indication on, even with incentives. However with out a lot more prevalent adoption, prices remained higher with out larger sized economies of scale.
What saved photo voltaic was not more affordable engineering, but alternatively an revolutionary small business design credited to Jigar Shah and later on copied by Elon Musk at Photo voltaic Town. Shah’s business Sunlight Edison set up the photo voltaic panels at no price tag, then recovered the fees as a result of electric power purchase agreements with entrepreneurs, who committed to pay back for the photo voltaic-generated at a set charge for 15 or 20 yrs. (Disclosure – I labored on some of the regulatory concerns similar to this new framework to guarantee that it would not issue the events to regulation as a community utility). As soon as householders could install photo voltaic at no price tag, the engineering took off, prices arrived down and the rest is historical past.
In the legal occupation currently, there are heaps of interesting engineering ideas – but it is unclear to me how they can be deployed and truly switch a financial gain. For that purpose, it can make a lot more feeling to detect new small business models and adapt the engineering to in good shape these new models. Click on on the graphic to see some of my ideas for new small business models – and feel free of charge to chime in with your feelings under.