More than an investor: Five things to look for in a clean energy partner
Business Chief hears from Elena Bou, Innovation Director, InnoEnergy, who shares the five key components of an excellent clean energy partner.
Every start-up founder or CEO of a young company is in a hurry to succeed. The company is their life’s work; their hopes and ambitions all tied up in it alongside their capital. When that business is a clean energy business, there is added urgency: climate change doesn’t wait, and if this innovation can make a difference, there is a moral pressure to get it to market yesterday, if not sooner.
So, when the first VC makes an offer, the temptation to take the money is strong. Money in the bank this morning means investing in the business this afternoon, which means profit and environmental impact tomorrow.
But picking the right investor can be a case of “more haste, less speed.” In fact, it may be that clean energy entrepreneurs eager to scale-up and make a difference are better served looking for something other than a pure investor -- something bigger. They may be better served picking a partner. Here’s what to look for.
Access to a network of partners
Cash is only one of the ingredients for a successful start-up or scale-up. That recipe calls for any number of other things such as the right employees, first customers, researchers and marketing support. In the highly regulated world of energy, it can also require legal advice or even -- when the business is doing something especially new and innovative -- influence at the policy level.
A good investor may be able to help with a handful of these aspects in addition to investment, but is unlikely to tick all the boxes. By contrast, a partner which takes commercialisation and scale-up support as its raison d'être is more likely to offer multifaceted support to a company looking to grow.
For example, if a company’s founder is an inspirational engineer but not a natural CEO, a partner with a deep and broad network can help find the right person or team to supplement the leadership. After all -- smart people should be building things.
Or maybe a battery storage start-up has everything it takes to thrive but suffers from an unclear regulatory status as a generator or consumer of energy -- a partner plugged into Brussels’ corridors of power may be a vital component of success. For example, our network at InnoEnergy encompasses more than 400 partners and creates 45,000 connections per year between companies and start-ups.
What to look for: an extensive network throughout Europe that can connect a young company to all sorts of support they will need for success, including but not limited to capital.
A sustainable investing model for sustainable businesses
Clean energy start-ups often face higher hurdles than counterparts in other industries. Energy is a highly regulated market with typically high capital costs and a longer average time to market than most. It is not the market to enter for entrepreneurs looking to make a quick buck.
Clean energy entrepreneurs tend to understand this (without losing any sense of urgency), but it’s important to find a partner that does so too. Some investors are more patient than others, and the best fit partners will approach sustainable energy businesses with an equally sustainable long-term investment strategy. A strategy based on a relationship, not a transaction.
What to look for: a partner with a track-record of long-term support -- both financial and otherwise -- rather than a quick-sale approach.
There are some businesses, like Google or Facebook, that naturally transcend borders. There are others which are more grounded in their place. Energy companies can often fall in the latter category, with products or business models built according to the idiosyncrasies of their home market. In Europe, this can be especially challenging, as despite an impressively unified regulatory and policy framework, differences remain, compounded by language and cultural barriers.
But that doesn’t mean the innovations themselves can’t address pan-European or global needs. Far from it. Portuguese Pro-Drone for example, which helps windfarm operators cut inspection costs, has as much to offer asset owners in Scotland or Estonia as it does those in Portugal. Or take London and Valencia based Solaris Offgrid, which has provided clean electricity to more than 15,000 people in six countries since 2014.
A partner with in-country expertise internationally can spot a concept originating in one market with a lot of potential in another. And it can provide the expertise and network to make that international move happen. At InnoEnergy, our ecosystem spans 26 countries and provides access to 150 markets.
What to look for: an international partner, which can both provide support itself internationally and supplement its own capacities with a broader network.
Of course, though money isn’t everything, it does count for a lot. The right partner will also be a route to the vital funding that a young company needs to grow and succeed.
However, it would be a mistake to assume that means the entire investment must come from the partner itself. Look at the example of Northvolt -- the Swedish battery Gigafactory opened by former Tesla VP Peter Carlsson. When Northvolt was looking for investment a few years ago, InnoEnergy invested its own capital, but more importantly facilitated an eight-figure deal with the European Investment Bank that made the difference. Though InnoEnergy did not make the full investment itself, it combined its capital and network to provide the most efficient route to funding.
What to look for: a partner that can both take a stake in the company itself while also opening up relationships with a broader set of investors.
Low mortality and a track record of success
The most innovative entrepreneurs often go all-in on their businesses and stand to lose everything if they fail. The stakes are high. James Dyson famously took 5,127 prototypes and 15 years to arrive at the design that ended up changing the vacuum cleaner. By design 2,627 money was tight, and by 3,727 his wife was giving art lessons to make ends meet.
Dyson obviously survived -- securing a Japan-only license deal for his technology that generated just enough cash for him to set out on his own -- but start-up mortality is a real concern. InnoEnergy start-ups enjoy a 97 percent survival rate, comparing favourably to MIT alumni start-ups at 80 percent. Perhaps, more than anything else, this is the number that tells an innovator whether a partner can help them fulfil their potential.
What to look for: a partner with low mortality and a demonstrable track record of success.
Picking a future
Investment is important, but success depends on so much more. For entrepreneurs and innovators in a sector as difficult, complex and important as clean energy, success often means looking beyond the number of zeros on a check to what else a partner can invest.
EIT InnoEnergy, has issued its first ever global call for start-ups across the entire sustainability value chain. The call is open to start-ups worldwide in areas including but not limited to: renewable energy, energy efficiency, heat and transport, to solve the decarbonization challenge. To find out more and apply visit here. Applications close on December 19 2019.
Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.