GREENtrepreneurs: The Challenge & the Opportunity

Opinion

“So what is so special about green entrepreneurs?”

This is an excellent question and was a central theme in my recently published book, Green Entrepreneur Handbook. Why is a green entrepreneur any different than any other sort of entrepreneur? Does it take a special entrepreneur with different skills to build a green business? Throughout the writing of this book, I tried to balance the fact that green entrepreneurs really are entrepreneurs just like in traditional sectors such as software, retail, biotech or consumer goods, but at the same time these entrepreneurs are operating in “green” marketplace with some very unique and different challenges. So yes, green entrepreneurs are the same, but different… confused yet?

Unless you are living under a rock, we’ve all seen the “green” movement going on around us. (Care to guess what the phrase of the last decade was according to the Global Language Monitor? If you guessed “Climate Change,” then you’ll be batting 1000%.) And with the growth of this green movement has come a flood of new entrepreneurs looking to tackle unique challenges associated with issues such as global warming, limited natural resources, protecting our ecosystem, and new sources of energy. These individuals are today’s GREENtrepreneurs.

Okay then, back to that original question: just what is so unique, so special and so different about green entrepreneurs? This writing is intended to share a few key findings and lessons about GREENtrepreneurs that I learned while writing the Green Entrepreneur Handbook. Below are a few selected passages and excerpts from the book highlighting some of those key challenges for GREENtrepreneurs – challenges which represent the unique environment (pardon the pun) this new breed of entrepreneurs now face:

Doing “well” by doing “good.” While “green” is obviously a big opportunity ($200 billion plus in some estimates), most green entrepreneurs got into green business because they identified an opportunity that they feel good about that also has the potential to make money. It’s not trivial that many first-time green entrepreneurs have left companies from “dirty” industries such as oil or natural gas, automotive, chemicals or energy generation – there is a sense of duty and responsibility for those starting green businesses. And that responsibility usually brings with it a dual focus: making a profitable business and doing so responsibly. Here’s a relevant passage from the book:

“According to Ira Ehrenpreis, a General Partner at Cleantech VC Technology Partners, a venture capital firm focused on investments in clean technologies, “Green is the New Green (as in Money).” And, that mentality is based on good reasons. An aging power system, transportation industry and general infrastructure system coupled with emerging regulatory trends and public support lead to the perfect opportunity storm. To put things into perspective, energy is an estimated $2.1 trillion dollar sector in the U.S.; transportation is a $1.5 trillion dollar sector in the U.S.; and chemicals represent a $3 trillion sector globally. And these are just a few of the key industries that are currently the focus of the clean technology movement. Overall, the green industry is estimated to be a $200 billion dollar sector today, and expected to experience substantial growth.

Entrepreneurs, investors, and various other business people see those numbers and understand the sizable opportunities they present. Think about it this way – the Internet boom in the late 1990s and even in much of the 2000s was built around a market that didn’t exist (there were no online book retailers before Amazon, no search engines before Yahoo! and Google, no online auction sites before eBay, no webmail platforms before Hotmail, and no online pet supply stores before Pets.com.. yeah, well not all the Internet darlings could be big successes, right?) In the sectors targeted by green businesses, there are already customers writing checks every month for their electricity, filling up their cars with gasoline and buying consumer products from non-renewably sources. The only thing green businesses have to do is offer a cleaner, greener, or more environmentally friendly option (well, as we’ll discuss later, there is more to it than just that.)

But there is more to it than just the “green” (aka the money). Many green entrepreneurs look at opportunities to build green businesses as a way to build a company that does more than just create a profit. Said one entrepreneur who had started a small biofuels business, “I’m willing to do this because my kids deserve a world at least as good as what I had… and sadly my generation hasn’t done much to give them that.” And that attitude is one shared by many in the green movement.”

Not all green is created equal (or alike). It’s easy to paint any entrepreneur building a business related to clean energy, alternative fuels, organic products or energy efficiency with a ‘green’ brush. Today we lump most green entrepreneurs into a broad category of green business or clean technology, but the reality is that a company building software that optimizes server energy consumption to reduce energy costs more readily associates with other software companies than entrepreneurs building solar panels or making biofuel. Over time, we should expect to see more defined green business segments emerge related to areas such as energy generation, alternative transportation, energy efficiency and others. Today the challenge is that green entrepreneurs may not have mentors, seasoned employees or training to help them grow. From the book:

“It is a bit of an oversimplification to label green business or clean technology as a single sector or industry. An entrepreneur in green chemistry or biofuels is very different than an entrepreneur creating wind farms or electric vehicles. Greentrepreneurs are more likely to fit with both a “traditional” business sector and the green business sector. So, the green chemistry entrepreneur would likely associate with entrepreneurs and business owners developing chemicals, and other green business owners, and the wind farm developer will likely associate with other entrepreneurs engaged in project finance and other green business owners.”

[Editor’s Note: the second part of this post, in which Koester talks about government policy and consumer attitudes, will run on Monday.]

Eric Koester is co-founder and COO of Zaarly and an attorney, formerly with Cooley LLP. Follow @

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