Cleantech software startups are in an enviable position in today’s economy.
The new administration, combined with the recession, places an emphasis on efficiency for businesses. Efficiency, in its simplest terms, means eliminating waste. Waste could be overuse of water or electricity. It could also be CO2 emissions, which are about to become costly.
This opens the door for software companies to enter the market and more efficiently manage waste for large corporations. While it’s considerably less interesting than creating a new wind turbine, it’s a business that has much more opportunity.
There’s two examples in the news today. First, Hara, a web-based software company called every press outlet to talk about their solution for helping cut back on waste. IBM spoke with Greentech Media about the fact that corporations aren’t collecting enough data on their operations. If they gathered more data, then they’d be able to eliminate more waste. IBM, obviously, thinks it should be gathering that data.
In May we spoke with two execs in efficiency management companies. The conversations were enlightening but boring. PowerIT President Robert Zak told us his company figures out where there is waste, then tells a company how to eliminate that waste. It saves millions of dollars, while reducing pollution and energy use.
At first we thought, geez, where’s the sizzle? The more we think about it, the more it’s exciting.
Green technology is a notoriously capital intensive investment. Building a new solar panel, electric car or wind turbine isn’t like building Twitter.
It takes a lot of brain power and incredible resources to produce a revolutionary idea in green technology. Even more than those things, it takes lots of time. First Solar took years to develop. There aren’t going to be a bunch of over night sucesses in green tech.
And even then, the revolutionary ideas are tiny in a global context. Renewable energy is supposed to be 20% of our energy mix by 2020. Most pundits think that’s a stretch.
In that perspective, software that cuts back on energy use is much more exciting. By eliminating electricty use, it’s just as effective as building a killer new solar panel.
Most important in this environment, it’s cheap. Hara raised $6 million from Kleiner. Fisker Automotive raised $85 million from Kleiner. Hara’s going after a market it thinks could balloon to $25 billion. Fisker is going after a dying market. In that light, which of those companies has a better chance of success?
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