21st Century Regenerative Technology

1. How Will Better Place's Business Model Hold Up in the Downturn?
2. 12 Tips to Turn Tech Execs Into Green Experts

How Will Better Place's Business Model Hold Up in the Downturn?

2009-03-06 08:00

Josie Garthwaite - Startups

Better Place Founder and CEO Shai Agassi’s vision of building out charging infrastructure and battery-swapping stations for electric vehicles was never going to be easy to implement. But turmoil in the world’s financial markets and mounting deficits in government budgets have raised new hurdles for the Palo Alto, Calif.-based startup. While Better Place has packed its project pipeline at a brisk pace (networks or pilot projects are now being considered in Denmark, Israel, Australia, Japan, Ontario, Hawaii and the San Francisco Bay Area), they won’t get off the ground without financing — a whole lot of it.

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Better Place’s new Chief Financial Officer, Charles Stonehill, took some time out of his second day on the job to speak with me this morning about some of the company’s challenges — and why he thinks the current business model will carry Better Place through the downturn.

Stonehill insists that being at a relatively early stage of development — a couple years away from having any swap stations or charge points in full swing — means Better Place faces less trouble in this kind of economy than it might in later stages. He says the company, which has already raised more than $200 million, does not need immediate access to credit and can lay groundwork for infrastructure deployment until markets stabilize — building relationships with battery and automakers, and wooing investors for capital and policymakers for tax credits and other incentives to push electric vehicles mainstream.

When it’s time to start shoveling dirt and building the physical infrastructure, Better Place is banking on private equity markets, which are not as “dysfunctional” as credit markets, according to Stonehill. By the time Better Place might need credit to run the day-to-day business — stocking up on batteries, for example — he expects credit to be flowing again. That’s at least two years out: Israel and Denmark’s networks, at the front of the line, aren’t slated to launch until 2011.

Stonehill explained that the first phase for each network is the buildout. This includes investment in things like charge points, switch stations, and a visitor center for dealing with potential customers, and it’s the part that Better Place wants to finance with private equity. In Australia, for example, the company enlisted Macquarie Capital Group last fall to raise AUD$1 billion (about $642 million) for this phase.

Phase two is the rollout — everything from acquiring contracts with customers to purchasing batteries and installing them in cars. For this, Better Place plans to hand the reins to operating companies, which will raise funds in local markets. By keeping it local, Stonehill said, “it will not reduce our ability to raise financing in another market, and it may help.”

Problem is, all of this seems to leave the company having to raise hundreds of millions of dollars for just about every new project for at least the next several years. Here’s the best-case scenario: lithium-ion battery and electric vehicle supplies neatly align with consumer demand for a subscription battery exchange service (a huge gamble), and Better Place starts generating revenue so it doesn’t have to keep raising all that capital. (Stonehill said the company can work on at least two networks and probably several more at any given time.) But for the startup to rake in enough to build a few billion-dollar networks each year? Might be a stretch.

Those markets that Better Place expects to have its back through the downturn aren’t exactly in ship shape. As the WSJ’s Deal Journal blog put it earlier this week, “the private equity business had a bit of its old swagger as late as early 2008″ — but “that strut now looks more like a limp.”

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12 Tips to Turn Tech Execs Into Green Experts

2009-03-06 05:00

Celeste LeCompte - Big Green

As the recession forces companies to slash jobs right and left, one of the more secure positions is turning out to be that of Chief Sustainability Officer. Increasingly, companies across the board are including the job of marrying business performance to environmental performance among their C-level positions, the latest example being enterprise software maker SAP.

But these so-called CSOs aren’t being hired just to buy green power, set up recycling programs, and offer employees the option to telecommute — they’re being tasked with evaluating and improving the (environmental) performance of a company’s core business. That means taking into account everything from what their product are and what they’re made of to how they’re made, used and disposed of — and how that impacts the long-term financial viability of the business and the long-term health of employees, host communities and customers.

Sustainability initiatives (done right) have a good return on investment, and research shows that “greener” companies outperform their peers financially. But for many tech entrepreneurs in these lean times, hiring another executive simply isn’t an option. So here are some tips to help any tech exec — from the founder to the CTO to the VP of marketing — become a sustainability leader:

Build The Business Case

Need some help understanding how sustainability applies to your business? Check out The Natural Step. Its web site includes information about the framework and case studies, and it offers training and consulting as well.
“Backcasting” asks companies to envision their ideal future and set short-, mid-, and long-term goals toward getting there. The City of Portland has a downloadable worksheet that can be modified for businesses.
Peter Senge’s book “The Fifth Discipline” (partially available online) is often cited as a source of inspiration for leaders working to build sustainability into their organization.
While initial strategies may be obvious, moving on to higher-level issues may mean getting creative. Get involved with industry trade groups. The IEEE has a President’s Initiative on Sustainability, for example. WiserEarth can help you find other existing groups. And if there’s not a group in your niche, start one!
Consider tapping into your employee’s good ideas as well — offer employees incentives for good ideas that have both financial and environmental returns.
Still stuck? Hire a consultant. They can bring scientific and technical experience, as well as all the usual business chops. Small companies may want to turn to boutique firms that focus on sustainability, although many of the major consulting firms now offer sustainability practices. Many of the new sustainability-focused MBA programs may have student consultants that can help, as well.

Tackle Technology Issues

If data centers make up a substantial part of your capital and operating expenditures, a comprehensive sustainability plan can have immediate bottom line benefits. The Uptime Institute, The Green Grid, and Sun Microsystem’s OpenEco.org offer resources, tools, workshops and more.
Make your code greener. More efficient code can save CPU usage, cutting energy and carbon footprint; it can also mean programs that run faster, more reliably, and are easier to update. Microsoft’s general manager of data center services, Michael Manos, has spoken about this issue in the past.
If you design hardware products, environmental policies like EPEAT, RoHS, and EnergyStar are probably on your radar. But go deeper: Consider how users interact with your products. Behavioral design, which looks at how design influences user behavior, is a fast-growing topic. The Design and Behavior Group offers resources and discussion forums.
Conduct a life-cycle assessment for your products.

Measure and Market Your Progress

“What gets measured gets managed” may be a cliche, but it’s true. Track your progress toward environment goals using a web-based system from companies like Clear Standards, Planet Metrics and Carbonetworks. IBM, SAP and Microsoft all recently announced new software offerings that layer environmental data into existing supply chain and inventory management programs, as well.
Put together a sustainability report. The Carbon Disclosure Project helps companies track and report risk and opportunities associated with carbon regulation. The Global Reporting Initiative, founded by CERES, has clear guidelines for CSR reporting, hosts reports that use the framework, and offers verification services.