The Smart Techie was renamed Siliconindia India Edition starting Feb 2012 to continue the nearly two decade track record of excellence of our US edition.

March - 2010 - issue > Technology

Clean Technology: On Top Down and Bottom Up Assessment of Business Plans

Nitin Joglekar & Jonathan Hibbard
Tuesday, March 2, 2010
Nitin Joglekar & Jonathan Hibbard
Many observers have identified clean technologies as being among the key drivers of market growth in the coming decade. Diffusion of these technologies is expected to affect the global environment and provide innovation opportunities to individuals, communities, businesses, and entire regions. Examples of such technologies engendering business opportunities range from wind turbines being developed by GE, carbon sequestration capability offered by firms such as InnoSepra, eco-friendly air conditioners, and refrigerators developed by LG, to smart metering devices offered by CISCO. Large investments are being made by governments and by firms such as Khosla Ventures to promote entrepreneurial efforts in this sector. Consequently, we are witnessing a rapid rise in the number of business plans being pitched to investors. A major uncertainty during the development of such plans, whether for a capital intensive and project finance based development, or for software plug-ins for Web-based PowerMeter applications, is the size of the relevant market. Investors are interested in examining both the top down, i.e. starting with a macro view of underlying business trends, and a bottom up, i.e. starting with the consumer preference analysis of such projects.

A question that is commonly raised during business plan competitions in which we have been involved is “Are there unique features within the clean technology sector that affect the sizing of markets and the development of business models?” Another important question is “While these markets appear to be so highly attractive ? and there are incentives being offered by many governments ? why do we not see rapid diffusion of clean technologies?” After reviewing a number of such plans, these five common factors emerge that seem to be creating unique pitfalls and opportunities as they relate to market size projections in this sector:

* Co-diffusion
* Data quality
* Financial incentives
* Geographic differences, and
* Consumer behavior

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