green business today

GREEN BUSINESS TODAY

Oriol Pascual oriol@enviu.org

AGENDA

• What do we mean by green business? • State-of-art of green business • Opportunities in the digitalisation of green • Green business ecosystems: how-to? Photo: Amir Kockovic

GREEN BUSINESS

Refers to business activities that create environmental, social, and economic value.

Economy

Environment

Society

GREEN BUSINESS

Not all green businesses are equal: • Micro business: artisan craft, tourist guide • Small business: service providers, retail • Scalable business: distribution, cleantech Photo: LifeInMegapixels

MICRO BUSINESS

SMALL BUSINESS

SCALABLE BUSINESS

Goal Sustain lifestyle Sustain family Go big

Geography! Local Local-Regional Regional-Global

Entry barrier Low Low-medium High

Job creation Self (+1) 2-50 +50

Time to market Days Weeks Months

Business support Basic accounting Value-chain management Tech. dev.

Financial support Savings Personal loan

Subsidies + participations Capital risk

Role of technology Low - marketing -

Low-Medium - inventory -

High - core -

1%1%7%

91%

Micro business (1)Small business (10-49)Mid-Size (50-250)Large business (+250)

BUSINESS IN EUROPE

Source: EU Eurofund

COMPOSITION

Source: World Factbook

72%

6%

23%

IndustryAgricultureServices

Europe

77%

3%

20%

IndustryAgricultureServices

Jordan

CLEANTECH

Cleantech refers to the development and application of technology with the aim to improve resource efficiency. It includes, amongst others:

• Renewable energy • Mobility • Water-related technologies Photo: USACE

CHARACTERISTICS

• Technology-based: mainly hardware • Capital intensive • Long development periods • Highly dependent on gov. decisions Photo: Brookhaven Nat. lab.

CLEANTECH CHALLENGES

Current challenges are not about fundamental science. Are about:

• Complex financing & incentives • Failure to communicate to consumers • Poor sales channels

Many opportunities await in the digitalisation of green

INTERNET OF

THINGS

CLEANTECH

COLLABORATIVE CONSUMPTION

Cleanweb

CLEANWEB

Data & networks

Market re-structuring

Efficiency

ELEMENTS

• Network-based technology is core • Resource-focus • Defined business model • Scalability Photo: ogimogi

VALUE CREATION

• Helping consume resources more efficiently • Making environmental data meaningful • Disrupting cleantech financing models Photo:MetroMile

ADVANTAGES

• Agile development • Capital light • Low-risk • Scalability Photo: Desarrollando America Latina

6 BUSINESS MODELS

1. Customer engagement platforms 2. Collaborative financing models 3. Decision-making tools 4. Loyalty programs 5. P2P lending resources 6. Data monitoring & management Photo: szwerink

1. CUSTOMER ENGAGEMENT PLATFORMS

• Use data from utilities and public service providers (energy, water, transport) to create customer value though visualisation of data in ways that is meaningful and actionable

• Who? Opower, Tendrill, Dropcountr, Watersmart

2. COLLABORATIVE FINANCING MODELS

• Debt-based crowdfunding of renewable energy projects with a defined return of investment

• Who? Solar Mosaic, Milk the Sun, Tangerine Power

3. DECISION-MAKING TOOLS

• Saas to evaluate the potential of commercial and private (PV) projects. Simulations include: how much power can be generated, costs of an installation, ROI, efficiency

• Who? QuickSolar, Solarist

4. LOYALTY PROGRAMS

• Get rewards for your sustainable/green actions: saving water, energy, produce your own energy, using public transport

• Who? Changers, Ecostastic, PlaytoRide

5. PEER-TO-PEER LENDING RESOURCES

• Lending and/or renting between individuals of hight costs goods, like housing and cars. Access to functionality, instead of ownership

• Who? Airbnb, SocialCar, Relay Rides

6. DATA MONITORING & MANAGEMENT

• Combination of hardware & software to monitor energy, temperature, or smart homes

• Who? Nest, Valta, Envirocar, Metromille

HOW TO DO IT?

• Learning by doing approach • Hackathon: bring developers and entrepreneurs

together for a weekend • Jordan & middle east has the ingredients: i.e.

Jordan Open Source Association, Oasis500 foto by BA Data

GREEN BUSINESS ECOSYSTEMS

COMMUNITY PLAYERS

• Leaders: entrepreneurs • Feeders: government, universities,

incubators, investors, mentors, service providers, large companies Photo:madlynlovewithlife

FRAMEWORK TO BUILD A STARTUP COMMUNITY

1. Entrepreneurs must lead the startup community 2. Leaders must have a long-term commitment 3. Community must be inclusive of anyone that

wants to participate in it 4. Community must have continual that engage

the entire entrepreneurial stack Based on The Boulder Thesis Photo: Rocky Mountain Joe

Entrepreneurs Lead the community

Government! Support vs “create” Provide a “risk-free” environment

Universities Provide students, professors, research labs, entrepr. programs, tech transfer offi., space

Investors Long-term support to the community, connect, perspective

Mentors Experience & know-how: for free

Service proviers Lawyers, accountants, recruiters, consultants

Large companies Space & resources Encourage startups to enhance the co. ecosystem

ROLES

INCUBATION PROGRAMS

• Designed to support entrepreneurs and reduce startup risks

• Structured program, typically offering space, mentoring, access to network, & capital

• Also known as “accelerators” • Public & private Photo:rundedbygravity

INCUBATION PROGRAMSTRADITIONAL

MODELNEW

MODEL

Funding Public Private

Goal Increase # local business Investment-ready

Format Lectures Mentor intensive

Costs!for entrepreneur Subsidised Equity

Entry barrier Low High

US has MORE support programs to early-stage

entrepreneurs than the EU

MYTH!

Accumulated number of incubators in top 10 EU countries by GDP

BARCELONA ECOSYSTEM

• The first incubation program launched in 1989 • Currently, Spain hosts 38 startup programs - most

launched after 2010 • Ticket size: between 20-60K • Average equity share across accelerators: 8-14%

Spain

• 7 m. inhabitants - Barcelona: 5.1 m • Catalonia produces 1% of the world’s scientific

output

Catalonia

9 accelerators/incubators in Barcelona Barcelona, leads in clean tech sub-categories:

• Smart City • World Mobile Capital • Large “sharing economy” community

Barcelona

• 1997-2013: Spain became a world leader in PV and wind energy production

• Of all Spanish patents, 43,6% are related to solar • Spain is the 5th country in the world in number of

patents in renewables, after US, Japan, Germany & UK

Rise of the renewables

photo by treedork

• Today, Spain is an unattractive and risky market to invest in renewables

• Of the 50 factories PV silica and related in 2011, only 10% remain open today, with a focus in inverters and exports

Fall of the renewables

The Barcelona entrepreneur

Source: Telefonica

Barcelona Silicon Valley

Age 33.29 34.12

Gender (F/M) 5% / 95% 10% / 90%

Education (dropout vs. master+PhD) 1 : 10 1 : 2.5

Serial entrepreneur 41% 56%

% non-technical founding teams 12% 16%

Customer (B2B vs B2C) 5 : 2 2 : 1

Working hours per day 8.25 9.95

Ecosystem

Incubators

Government programs

Universities Investors

Dedicated Spaces

StartupsClean tech

entrepreneurship BARCELONA

Trade Shows

• KIC InnoEnergy • Fundación Repsol • Eco-Emprenedor XXI

Clean tech Incubators

• Green Economy Plan • TECNIO/ACC10 • Biocat

Government programs

• Transformation of a neighbourhood • Private foundation managed the transition • After 10 year: +1500 (tech) companies

22@

• UPC - Campus Energia • ESADE • IESE - Clean tech Venture Forum

Universities

• Business Angel Networks • Business School forums (ESADE -IESE) • Engineers’ fund • Keiretsu

Investment

• Sant Pau • Regional Centre for Cleaner Production • Barcelona Lab • IAAC + Valldaura

Other Interesting players

• EV Symposium • Smart City Expo • Mobile World Congress

Trade shows

BARCELONA Green Startups

Environmental data monitoring board & community

Smart Citizen

Enerbyte

Using behavioural science to change consumption patterns

Smart City solutions

Urbiotica

Smart water & energy consumption

BNstar

Electric motorbike made in BCN

Volta BCN

• Barcelona attracts international talent, and retains local due to the attractiveness of the city itself

• Barcelona is Mobile World Capital • Proactive local government; “business friendly” • Bottom-up entrepreneurial community • Catalonia produces 1% of all research in the world -

but does’t have a direct translation in valorisation of this science

What works

To improve

• Lack of ambition: local startups think small, a local win is enough rather than conquer the world

• English is not yet common language amongst all society • To fund a limited company is expensive and bureaucratic • Need for more “learning by doing” education, rather than

fact-based education

To improve

• More success stories • Early stage funding clearly insufficient • Many players, but fragile ecosystem due to insufficient

funding resources • Not enough clean tech projects with high growth potential

SILICON VALLEY ECOSYSTEM

RECIPE FOR SUCCESS

• Political will & smart policy • Entrepreneurship & innovation • Money; Ca 40% of global VC in clean • Circumstance • Time!

SAN JOSE GREEN VISION 2015

1. 25.000 new clean-tech jobs 2. 50% energy reduction per capita 3. 100% renewable electricity 4. Green buildings; 50 m. sq. feet 5. Zero waste landfill 6. 100% re-use of waste water 7. Development general plan 8. 100% public fleet using alternative fuels 9. Smart, zero-net street-lighting 10.100 miles interconnected bike trails Photo:tq2cute

INCUBATORS

1. San Jose Environmental Business Centre (public) 2. Plug & Play (private)

INVESTORS

• 740 funds in the Valley • 20+ angel investors groups • 2930 deals = 22 b (2008) Photo: stevendamron

INVESTMENTS TODAY

• Winners:efficiency software, enhancement clean energy

• Losers: capital-intensive, batteries, fuels Photo: stevendamron

SILICON VALLEY Green Startups

SUNPOWER

• The most efficient PVs on the planet • 1985; Stanford spin out • First used by NASA • 400 employees • Vertical approach Photo:Hermisillo & Asociados

TESLA MOTORS

Photo: GiuDAlberti

• High-end electric cars • Innovation; unique engine & battery technology • Partnering with Ford to provide battery technology

• Regulation can be an enabler or barrier for clean tech to create a positive impact

• Clean tech is evolving towards new forms that have IT as central element

• Startup ecosystems start with the entrepreneurs, they lead the way

• It takes time to build an entrepreneurial ecosystem

Final thoughts

Oriol Pascualoriol@enviu.org

Oriolpascual.com @onsustain