2 truisms about climate tech and startups
Truism #1
“Climate is a macro hair on fire problem (HOFP), but it’s hard to find micro HOFPs.”
h/t to my friend Ben, who first put it this way. This perfectly encapsulates my thoughts from a few substack posts ago, but in a more elegant and catchy manner.
I had noted that any macro statements from prospective customers are worth zero, perhaps even negative value due to the false confidence they instill in you. Things like “interconnection is the #1 bottleneck for renewable energy development in the US” are tantalizing, but ultimately say nothing about whether specific customers are willing to pay for a solution. Same idea here.
Truism #2
There’s a well-known saying that goes “if you wake up in the morning and come across an asshole, they’re an asshole. If you come across assholes all day, you’re the asshole.”
I have a fun parallel for startups: if you explore one market and decide it’s not suitable for startup formation, you found a bad market. If you explore many markets and decide they’re all not suitable for startup formation, you’ve got a problem and need to launch more willingly.
This thought occurred to me last night, when I was mulling over what I’d learned about the utility-scale storage industry. I’ve been having doubts about the attractiveness of the market, when I realized that if I can’t come up with any startup ideas in this market, then I either suffer from a serious lack of creativity, or don’t have the risk profile needed for this line of work.
After all, we’re talking about batteries here! I can lay out half a dozen theses and tailwinds for why it’s a promising area. If you disqualify one market, you found a bad market. If you disqualify many markets, you may need to look in the mirror.