Have a Great Solution in a Huge Market? Consider Making It Too Cheap to Steal
As I’ve noted previously, the eminent venture capitalist Vinod Khosla advises “Since one fails often, address markets that make it worthwhile when one does succeed.”
This, of course, is solid advice. But unfortunately, not everyone is a position to swing for the fences; some technologies, while not really transformational, are nonetheless worthwhile and need to be brought to market. Examples would include marginal improvements in the efficiency of solar panels. I suppose one could also say that plug-in hybrids fit that description. When battery energy densities and cost curves advance pass a certain point, fewer and fewer electric vehicle customers will be concerned about extending their range by lugging around big, heavy, and expensive internal combustion engines. 20 years from now, I predict that we’ll regard plug-in hybrids the way we do eight-track tapes or floppy discs today.
But what a joy it is to promote a technology that really changes the way billions of people live and work. I happen to be talking to some people who are sitting on what appears to me to be a real game-changer in renewable energy: relatively inexpensive, unobtrusive, and benign to its local environment.
Maybe what I like about bringing a technology like this to market is that it’s so easy; there are far fewer errors that can be made along the way. Thus my advice to them:
It seems to me that there are only two basic mistakes we can make here:
a) Losing control of the technology; in particular, letting it fall into the hands of someone who suppresses it. I don’t think I’m being at all paranoid in making this point; the energy industry is rife with examples of this.
and
b) Waiting for a certain preferred business model to take form, while excellent opportunities for perfectly valid but different business models come and go before us.
The beauty of the energy market is its enormous size — measured in trillions of dollars. In this case, I recommend entering it by “making (this solution) too cheap to steal.” One-tenth of one percent of the market is still billions of dollars. That will make everyone quite happy, won’t it? Let’s just go get it.
