Building Effective Alliances for Cleantech start ups

Have been working with a wide range of start ups recently (CSR, water treatment, asset management, AEC design services); developing and validating 'go to market' strategies'. In the initial or early phases of maturation (both for the company and most times, the market segment itself), direct sales by the founders and other 'visionary' staff (both internal as well as advisors / directors) is critical to get early successes: pilot projects, demonstrations, regulatory review & approval (if appropriate) and brand awareness.

But as the start up begins to grow, the markets for the technology solution (that is: the product, team expertise, company vision, and solution roadmap) will require that the solution most likely be integrated into a larger business solution (think of a new roadway; wastewater treatment & distribution system, environmental remediation, etc). This is particularly the case for those cleantech start ups that are targeting industrial clients as well as governmental clients. At this stage, start ups need to build partner 'ecosystems" consisting of complimentary technology and services firms; which requires the development of an alliance & partnership strategy.

Some insights are provided here:

Position yourself to allow your partner to lower the cost of their customer acquisition efforts & identify 'up-selling' opportunities
For the larger and global AECs, the real opportunity for growth is to continue to develop their existing accounts and user bases; providing more value to them (such as incorporating energy modeling solutions, or facility management services). Case in point: can your solution allow the AEC firm tap into other technology or operating budgets in the clients' organizations, that the AEC would typically would not be able to access?

Don't be the obnoxious sales guy when representing your company
CEOs of start ups need to focus on the partner's business model; how can they assist in driving more value and solutions of the partner through the partner's channels? (so: don't go in to a discussion with executives at an AEC firm saying: " I would love to get access to your clients so I could sell my stuff to them".......not a good idea)

If you have something special, they will find you...although it may take some time
Most of the global AECs have executives whose roles include responsibilities to constantly survey the cleantech / green landscape: interview companies, and make recommendations on strategic alliances and acquisitions. Chances are, if you are making headway in your market sector and are building brand awareness and a sustainable client base, that the AEC firm already knows about you. Your alliance strategy should take into account how you can leverage these sales channels to build relationships with the AEC practice leaders as well as with the alliance executives at larger complimentary technology companies. In many cases, a great way to begin the development of an alliance is to focus on specific key end - user accounts where both your company and the AEC may provide a joint solution.

If thinking of being acquired, it's better to develop a strong alliance first
Much of the acquisition activity during the IT growth period of the last 10 years has been a result of demonstrated joint customer success, alignment with product strategies, and some synergy between corporate cultures and goals of the start up and acquiring company. I think this trend is quite applicable to cleantech start up growth and maturation. There is no question that building strong relationships within an AEC firm (or larger technology company) allow for increased awareness of the start up company, and allows for constructive M&A dialog at the appropriate time.

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Article on Greenbiz.com: "How BIM and Green Tech Will Change the Construction Industry"

Just published an article for Greenbiz.com titled How BIM and Green Tech Will Change the Construction Industry. This article is reprised in three earlier posts here on my blog; covering the basics of BIM, benefits of BIM and greentech, role of the federal government & owners, and strategies for greentech companies in leveraging BIM for growth.And here is the rest of it. Read more!

Strategies to grow Greentech via BIM adoption

BIM (Building Information Modeling) is not just the adoption of new technology, but also incorporates new collaborative workflow. There is more emphasis on collaborative design and planning in the beginning phases of a project, so that costs and risks in later stages like construction and operations (where most of the costs are incurred) may be managed and contained. Green tech vendors should be involved in these early planning stages, so that a realistic assessment of cost savings and improved environmental performance are identified. Also, they can add value to the optimization process (conducting ‘what if’ scenarios), which may lead to additional savings and benefits that may not have been readily apparent.

International markets are proving to be quite viable for BIM deployments and green tech as well. Increasing awareness of global warming, green house gas emissions, and sustainability have driven significant market opportunities in international markets of Europe and Asia Pacific as well. John Kennedy of Green Building Studio concurs, and provides advice to green tech start ups: “Look outside the US to both the EU (European Union) countries as well as to Australia”.

Buddy Cleveland of Bentley Systems mentioned that the UK facilities market is farther advanced than the US market, in terms of green certification tools. “New regulations for improving building performance require quantitative assessment of carbon emissions; not just a qualitative assessment”. In this market, it is conceivable that green technologies may assist to “pull” the growth and adoption of BIM, given the regulatory climate.

‘Go to Market’ strategies should also reflect the importance of leveraging established companies in the AEC space for sales, branding, and deployment channels. A key component to this strategy: identify a technology partner who may bring brand awareness, marketing, and channels access. “Plan to partner in order to scale your business”, said Kennedy, who has partnered with a number of leading AEC software companies.

It should also be noted that the ‘exit strategy’ for successful green tech start ups could be acquisition by a larger established software provider in the space. Kennedy’s Green Building Studio was recently acquired by Autodesk, and Bentley Systems acquired a smaller software firm last year that it had partnered with called Hevacomp, which provides MEP (Mechanical, Electrical & Plumbing) and energy analysis modeling. Both Autodesk and Bentley are advocates of BIM adoption, and one would assume that these new acquisitions will allow them to integrate green technologies into BIM software platforms.
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Building Information Modeling & Green Technology Opportunities

I have been working on BIM (Building Information Modeling) strategy for the past month, and have also had the chance to interview a number of leading professionals in the green building technology area, as to how BIM might be leveraged to drive growth of green building technologies. A summary of this overview is provided here, with follow up posts on specific market opportunities.(A column covering these topics will be published in early March on a leading green technology web site).

The terms ‘cleantech’ or ‘green technologies’ have been applied to a wide array of processes, technologies, and services. Within this overall market space, there exist a number of specific target market segments such as transportation, energy development, and manufacturing, as examples. The buildings & facilities segment is a large target market segment for green technologies, given the size and projected growth around the world and opportunity to leverage a disruptive new technology for adoption of green technologies.

The building & facility industry is undergoing radical change today, as owners are demanding more project visibility; lower costs, better risk management (scheduling & costs), and increased use of technologies that will allow for less waste, more efficient energy consumption, and ultimately lower costs over the lifecycle of the facility (from design and construction to operations).

What is Building Information Modeling (“BIM”)

The rapid (but uneven) adoption of BIM in the buildings industry has changed the way facilities are designed, constructed, and even operated. The National Institute of Building Sciences (NBIS) defines BIM as “a digital representation of physical and functional characteristics of a facility, serving as a shared knowledge resource of information”. This knowledge or database contains the ‘intelligent objects” of a structure; not just lines and arcs typically associated with traditional CAD or drawing tools. As such, BIM can represent multiple, dynamic, and collaborative views of information such as spatial data (3D), un-structured data (text), and structured data (databases, spreadsheets), as well as new views including scheduling and cost information (termed ‘4D’ and ‘5D’, respectively).

This type of technology, with its associated benefits of visualization, built – in intelligence, and simulation is a dramatic step forward from the current technology used for design and construction: 2D CAD (computer assisted drawings). Patrick Suermann is a Testing Team Leader for NBIMS (National Building Information Modeling Standards Committee, a part of NBIS), and has led a number of BIM deployments for the US Army Corp of Engineers (USACE). “BIM is the next evolution of CAD maps, and allows for the design of a virtual model” states Suermann.

Why is the BIM adoption trend important for green technology companies to understand and incorporate into their market strategies? The use of BIM (both the technology and changes in increased collaboration) allows for significant exchange of data & information by all stakeholders involved over the lifecycle of the facility: owners, architects, engineers, contractors, and operators. This information includes that associated with green technology adoption: efficiencies in energy use; increased emphasis on environmental health; and the drive to generate less waste.

BIM and GreenTech Benefits to Owners & Operators

BIM allows provides the following benefits to stakeholders, with opportunities for green technology to add value:

Risk Management: BIM may provide more visibility into projects, and allow owners to manage risk through a collaborative and inclusive process. The inclusion of green technologies allows stakeholders to collaborate as well in this process.

Materials Management: Developing bid quantities and verifying them in a BIM process allows for more efficient material use, as well as opening opportunities to use more energy efficient and environmentally friendly materials. BIM may align scheduling and material quantities for better cash flow analysis as well.

Marketing & Branding: BIM provides a visual representation of a facility, and encourages collaborative review and discussion by stakeholders and public alike. Inclusion of greentech furthers the visual representation, by illustrating energy saving concepts and adherence to key green certifications, such as LEED. Green branding is thus improved as well

Portfolio Management: For owners of multiple facilities or enterprise level owners, BIM allows for the re-use and purposing of models to standardize design and construction; thus driving down material use & costs, as well as technology applications across a portfolio.

Optimization of Building Performance: BIM allows for integrated facility management, so that energy use, occupant health & comfort, and space planning may be monitored and improved upon.


“Not only can BIM optimize building performance via less waste generation during construction, and improved energy management during operation, it can accelerate certification for LEED status”, said Buddy Cleveland, SVP of Applied Research at Bentley Systems (www.bentley.com) , a leading technology provider in the architecture, engineering & construction (AEC) market. LEED (‘Leadership in Environmental and Engineering Design’) is a highly accepted rating system for the design and construction of green buildings.

According the 2007 Green Index Study (conducted by Autodesk and the American Institute of Architects), 44% of architects surveyed are using BIM currently. The report went on to state that architects adopting BIM are more likely to adopt green building design software practices such as HVAC energy analysis, energy modeling, and also the evaluation of more environmentally - friendly building materials.

But across the AEC industry, the general interpretation, use, and even terminology of BIM are still in an early phase. “People are defining BIM as whatever they want it to be” commented Buddy Cleveland. BIM training, cultural acceptance (in the AEC sector), and business process modifications are all unique challenges that must be overcome for continued adoption in the marketplace.

Green Technologies in the Buildings & Facilities Industry

General categories of green technologies that apply to the buildings and facility market have been documented in many periodicals; for the building & facility industry, the key technologies of interest are:

Energy & Resource Efficiency (HVAC systems, day-lighting, water management & re-use)

Alternative Energy Development (self - contained solar, wind, and other power sources)

Advance Material Use (for insulation, walls, windows, structural)

Information Management (energy modeling, sensors, life cycle assessment)

Environmental / Health (occupant health & comfort, waste reduction, carbon emissions management)


Next up: the role of federal owners in driving BIM & Greentech growth, and some recommended strategies for greentech start ups.
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Column on Cleantech.com: "Driving Cleantech Growth via Engineering & Environmental Channels"

I authored a column on Cleantech.com this week, link is here; column is below.

Don't reinvent the wheel — cleantech startups should engage E&Cs.

The cleantech sector and its subsectors is now reaching a critical mass, in terms of investment momentum, public awareness and numbers of viable prospects. A number of segments, such as solar, are already in a land grab mode, where participants believe rapid client acquisition is the primary activity to ensure company success.

The current market dynamics are similar to those from the early growth & maturation phases of Information Technology a few short years ago. There are a number of lessons we can take away from the growth demands and strategies experienced in that sector, including the value of the Environmental Consulting and Engineering & Construction (E&C) channel in accelerating the adoption of technologies.

Similarities to the software/tech start up market?

There are a number of similarities between the cleantech industry and the software/tech start up industry. They include:

- Founders: Like many software start ups, cleantech start ups are usually founded by strong engineering and academic individuals, who are not necessarily strong in market strategy and sales.

- Investor experience: While there are a handful of investors with deep domain expertise in specific technologies, many new investors do not have that same level of expertise. We have seen evidence of this with the rapid influx of capital into this nascent sector.

- Need for reference accounts: Creating demand in the market requires the identification of strategic accounts where successful referenceable pilot projects can be deployed.

- Go to market strategy: Demand fulfillment may be met via a direct sales force, or via indirect sales & deployment channels, dependant upon a number of factors, including the complexity of solution, the role of the technology in a business solution, and degree of access to markets & decision makers.

- Alliances and partnerships: when the technology and team are an integral part of a larger solution (such as engineering design & construction of a desalination plant, for example), the development of a partnership ecosystem is required, in order to integrate and deploy solutions across key sectors.

The environmental consulting and engineering & construction channel

Cleantech start ups may build their own sales forces to sell solutions, but most of the time their technology is just one part of an overall infrastructure or building/facility solution. Another sales approach is to build indirect sales & deployment channels.

I suggest the key to success for many cleantech start up companies is to effectively leverage the environmental consulting and engineering & construction channel (that is, the services firms that provide consulting, design, construction management and facility operations) to sell and deploy solutions, thereby accelerating cleantech adoption.

Here’s why:

- Solution requires a range of engineering expertise: Clean technologies in most cases will require specialized engineering that can be provided by the services team in the cleantech company, but will also require traditional engineering design & construction management expertise.

- Target customers already work with E&Cs: Target verticals that may adopt cleantech include process and discrete manufacturing, transportation, telecom, government, real estate and infrastructure. Companies in these verticals rely upon global E&C firms to build business cases, develop conceptual and detailed designs, manage construction operations, and in many cases, actually operate facilities as well; E&Cs are 'trusted advisors' for capital expenditure projects.

- E&Cs are already engaged with cleantech: E&Cs have vetted a number of clean technologies, especially in waste-to-energy, green building and wind and solar power. But projects, training, and alliances with cleantech vendors are scattered at this point, creating opportunities for new vendors to step in. Cleantech execs should familiarize themselves with key strategic initiatives at global E&Cs today in order to build an ecosystem of focused and trusted partners.

- E&Cs are actively seeking new technologies to leverage: Why? The desire to capture higher margin consulting projects (which could include cleantech due diligence consulting, for example) in what is traditionally a low margin business, as one reason. Driving more growth and market share in core markets of water, building design (including building information modeling, or "BIM'), IT (for ‘green’ supply chain management, for example) and energy development, is another reason. Their question is: can cleantech serve as a ‘catalyst’ for more E&C growth?

Sales strategies

What are some key takeaways for sales and growth strategies for cleantech companies?

- Business development and strategy should focus on building a partner ecosystem and driving sales from these channels, especially with larger engineering & construction firms. The business development team should have strong domain experience in core tech areas, but should also possess a very good background in developing a go to market strategy with a significant alliance/channel component, possess a good rolodex or set of relationships with a broad array of E&C business unit executives and certainly have a consultative sales approach.

- The alliance & partner development process will involve roadmap & technology discussions with key E&C practice leaders. Within most global engineering & environmental firms there are thought leaders (individuals and groups) that take the lead in developing and disseminating technology for new business opportunities within the company.

- Target key executives within E&Cs. The corporate strategy executive (in itself a relatively new role for the E&C industry) is chartered to leverage internal expertise and nurture emerging growth opportunities across the enterprise, and as such, is a natural ‘executive sponsor’ for a cleantech partner.

- Develop a network of investors and key advisors that have relationships both within E&Cs as well as at their target client accounts

Leveraging the E&C channel should facilitate more rapid growth and quicker profitability for cleantech companies. Keep in mind that the E&C industry can be conservative at times and is focused on the total engineering solution, of which cleantech plays a part. Your objective should be to communicate the value your technology (and expertise) provides to both the E&Cs and their target accounts.

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