The implications of these trends for 21st-century entrepreneurs are profound. The opportunities exist today and are growing worldwide as people adapt and evolve in response to more complex social, economic, and environmental pressures. Resource constraints
5 http://ec.europa.eu/enterprise/reach/index_en.htm.
Chapter Summary
Some of the most fertile opportunities lie in the areas of greatest tension. If you can see them and act on them, you will differentiate your company and set the industry standard to best suit your venture’s capabilities. The three strategic facets of looking through a sus-
tainability lens are weak ties, systems thinking, and thinking like a molecule.
Employing green chemistry techniques can not only reduce process costs and the risk of production and product liability, but can generate new products and open new markets.
Green chemistry places human and ecological health at the heart of profitable product design and manu- facturing. It uses the creativity of nature’s biological processes to create molecules, materials, and processes that are safe and high-performing. Consistent with the Timmons Model, emphasis on
opportunity, and the resources a visionary entrepre- neurial team brings to bear, today many entrepre- neurial leaders are looking through a sustainability lens and creating new competitive market spaces.
The entrepreneur who reads these trends and gets ahead of them can be ready when the market begins to shift—and indeed can help shift the market just by offering safe alternatives.
Because it is becoming increasingly difficult to manu- facture different qualities of goods for diverse regula- tory regimes, it is best to meet the highest global standard—not only to simplify supply chains but to avoid being caught selling “substandard” or even contaminated products in one country and “clean” products in another.
Although old-school business leaders may be inclined to fight against sustainability measures, entrepre- neurs will instead spend their time coming up with new processes and products ahead of such regula- tions—and by doing so will ultimately lead the market.
Entrepreneurial opportunities exist today and are growing worldwide as creative business leaders adapt and evolve in response to more complex social, economic, and environmental pressures.
and the limits of ecological systems to absorb our waste are not transitory challenges. Sustainablility is not a fad. Clean commerce is a necessity given global population growth, rising economic aspirations in emerging economies, and a growing appreciation of our role in affecting the intricate balance of the earth’s natural systems. A wave of entrepreneurial creativity and innovation is already under way, inspired by the sustainability lens. As Jeff Timmons has stated, “The force of one generation’s entrepre- neurs becomes the next generation’s business para- digm.” This is happening as new businesses and technologies emerge to address environmental and human health concerns. As the entrepreneurs behind NextWorth , Method, and NatureWorks illustrate, by driving change in consumer product design and
materials innovation, entrepreneurship trends in en- vironmental sustainability are the leading indicators of business and social change.
Entrepreneurs have important opportunities to sup- ply mid-sized and larger firms with newly designed products that meet environmental and sustainability cri- teria. Larger firms can move the market, but often they must buy innovations from smaller, more nimble entre- preneurial firms. Given the creative skill set required in this transition, newer entrepreneurial leaders—less lim- ited by dated mind-sets of what is or is not possible— will be the ones to offer new solutions to large firms and consumers. The transition to sustainable and clean com- merce requires fresh perspective on new technology, products, and markets. Providing these has historically been, and remains today, the role of the entrepreneur.
Study Questions
1. In what ways does looking through a sustainability lens change how an entrepreneur approaches a new venture opportunity?
2. Explain how thinking like a molecule is related to the entrepreneurial process.
3. Why has the clean commerce domain become one of the hottest for venture capital investors?
4. How has the communications revolution become a major driver of entrepreneurial thinking and oppor- tunities in sustainable, green business models? 5. How can entrepreneurs use the increasingly stringent
product, raw material, and manufacturing process laws (particularly in Japan and in Europe) to their advantage?
Copyright © The McGraw-Hill Companies, Inc.
118 Part II The Opportunity
Internet Resources for Chapter 4
www.sustainablebusiness.com SustainableBusiness.com
provides global news and networking services to help green business grow, covering all sectors: renewable energy, green building, sustainable investing, and
organics .
www.greenbiz.com GreenBiz is a free information
resource on how to align environmental responsibility with business success. It includes news and resources for large and small businesses through a combination of
websites , workshops, daily news feeds, electronic
newsletters, and briefing papers.
www.cleanedge.com Clean Edge is a leading research
and publishing firm helping companies, investors, and
governments understand and profit from clean technologies.
www.cleantech.com The Cleantech Network founded cleantech as a viable investment category in 2002 and has
played an influential role in the development of this fast- growth investment category. The network brings capital and innovation together through Cleantech Forums and membership services.
www.environmentalhealthnews.org Environmental
Health Sciences is a not-for-profit organization founded in 2002 to help increase public understanding of emerging scientific links between environmental exposures and human health.
MIND STRETCHERS
Have You Considered?
1. In the next decade hundreds of millions (if not billions) of dollars of value will be created from opportunities in clean commerce. What is your part to help make that happen?
2. What are some ways to incorporate energy efficiency and clean commerce into your next business? 3. What will be one of the next significant regulatory
initiatives with a product or process that is not yet in the green domain, and how might this represent a sea change opportunity?
4. Which leading clean commerce companies will be the best to work for in your first three to five years out of college?
5. You believe you’ve spotted a massive market opportu- nity involving green chemistry techniques, but you have no background in the complex science needed to explore this concept further. What next?
6. If you are currently writing a business plan or operat- ing a business, name three actions you can take as dictated by the sustainability lens.
Copyright © The McGraw-Hill Companies, Inc.
Case
Preparation Questions
1. Apply the Timmons entrepreneurship framework (entrepreneur–opportunity–resources) to analyze this case. Pay particular attention to the entrepre- neur’s traits and how he gathered resources for his venture.
2. Discuss Jim’s fund-raising strategies. What other options might be considered for raising the funds SPC needs? Is this a good investment?
3. Discuss the growth strategy. What additional market(s) would you recommend pursuing as they move ahead?
On his way through Logan Airport, Jim Poss stopped at a newsstand to flip through the June 2004 National
Geographic cover story that declared, “The End of
Cheap Oil.” Inside was a two-page spread of an Amer- ican family sitting among a vast array of household possessions that were derived, at least in part, from petroleum-based products: laptops, cell phones, clothing, footwear, sports equipment, cookware, and containers of all shapes and sizes. Without oil, the world will be a very different place. Jim shook his head.
Jim’s enterprise, Seahorse Power Company (SPC), was an engineering start-up that encouraged the adop- tion of environmentally friendly methods of power gen- eration by designing products that were cheaper and more efficient than 20th-century technologies. Jim was sure that his first product, a patent-pending solar-powered trash compactor, could make a real difference.
In the United States alone, 180 million garbage trucks consume over a billion gallons of diesel fuel a year. By compacting trash on-site and off-grid, the mail- box-sized “ BigBelly ” could cut pickups by 400 percent. The prototype—designed on the fly at a cost of $10,000—had been sold to Vail Ski Resorts in Colorado for $5,500. The green technology had been working as promised since February, saving the resort lots of time and money on round trips to a remote lodge accessible only by snow machine.
Jim viewed the $4,500 loss on the sale as an ex- tremely worthwhile marketing and proof-of-concept ex- pense. Now that they were taking the business to the next level with a run of 20 machines, Jim and his SPC team had to find a way to reduce component costs and increase production efficiencies.
Jim returned the magazine to the rack and made his way to the New York Shuttle gate. An investor group in the city had called another meeting, and Jim felt that it was time for him to start asking the hard questions about the deal they were proposing. These investors in socially responsible businesses had to be given a choice: Either write him the check they’d been promising—and let him run SPC the way he saw fit—or decline to invest
altogether so he could concentrate on locating other sources of funding to close this $250,000 seed round. So far, all Jim had received from this group were voices of concern and requests for better terms—it was time to do the deal or move on.