Green To Profit

I have just come back from a mentoring session. One business presents itself, outlining a major issue they have. 12 mentors ask questions of fact, then give their viewpoint.

It is so amazing to see how blind some entrepreneurs can become from being stuck in the day to day operations. Every suggestion from the mentors was answered by the entrepreneur with an explanation of why that was not possible or that they are doing that already.

That brings me back to my frustration with inventors. They do not seem to listen.

And I guess we probably all have a bit of that. I certainly have blinders on where my own business is concerned. It is so easy to see new opportunities for someone else and point to the weaknesses. But learning to do that for yourself (or asking for that external viewpoint and being able to listen to it) seems to be key to move forward.

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Alexander

2001: $714 million

2002: $899 million

2003: $1.7 billion

2004: $1.8 billion

2005: $2.5 billion

2006: $3.6 billion

2007: $5.18 billion

No, this is not how much money Bill Gates has made. It is the investment in Green-tech over the last few years (in North America and Europe).

Sounds promising at first glance. But one detail Cnet News Green-tech Blog added struck me:

“Energy generation was the most active sector with 172 deals, totaling $2.75 billion.”

It struck me, because of another post in there:

“Do environmentalists contribute to global warming?”

It is about how clean nuclear energy is. So I am wondering how much of those $2.75 billion went into nuclear power. Is it clean? Maybe when you look at greenhouse gases, even though I have read that the sourcing of the uranium produces quite a lot (but I do not really know).

My main objection to nuclear power comes from the fact that the decisions we make today, affect our children’s children for thousands of years. It is proof of the short-sightedness of humans. If we are not directly affected, there is no problem.

Maybe I am biased by the decision made in Germany to phase out nuclear power (after it was in operation over 40 years).

I spoke to an entrepreneur today. He is currently seeking funding to bring a new product to market.

The product sounds fantastic in what it does and how it does it. I do not want to share any details, but it is a cosmetic product.

We spoke about the gaps in his business plan. I had pointed them out while preparing an information memorandum for him. One gap was: proof.

What is proof?

Had they done any clinical studies? No. OK, the costs are several $100,000

Had they done any studies with friends and acquaintances? No. He did not want to get anyone’s attention before the product was ready for launch.

So the proof rests on the words of the inventor and his knowledge of how it works - in theory.

He is a great person and convincing in how he speaks about his product, but does he really expect investors to go for it on that basis?

Necessary Trait?

I think he does.

And it made me think about the traits of inventors and entrepreneurs.

It is probably one of the most important traits to have: absolute faith in yourself, your product and in what you are doing. There is no other way to keep up the stamina to move through the obstacles of getting something up and going.

But then you need to let go

However when the team grows, the inventor has to change.

Maybe that is not possible. After pushing for so many years, it seems to be ingrained:

• not listening to criticism (even if constructive)
• not opening up to different approaches
• believing in the value of your product as an obsession

I wonder how inventors who got over the initial start-up were able to morph into team players.

Or should I title this : “Inventors frustration with the world”?

I am currently working on some information memorandums to raise money for 3 companies. Reading their business plans, looking at their inventions, I cannot stop to think what a waste is going on in business development.

They have all developed their ideas to an advanced stage, spend many hours and Dollars, are ready to produce.

Testing the Market

But no one has tested the market. Apart from one, they do not really have a marketing strategy.

It would be so fantastic if there was an easy way to test the market without spending lots of money in research.

Actually there is a way, Tim Ferris calls it microtesting in his book “The 4-hour Workweek“.

Microtesting

What he proposes is to set up a sales site on the Internet, bring some targeted traffic via Google AdWords and see how many are ready to buy.

This tests the demand for the product in general, but more importantly it tests whether the marketing works:

• Are we using the right words?
• Is the price right?
• Is the warranty sufficient?

To really test all of these things, a split test is necessary of course. But all this can be done for under $1,000, probably under $500. Far more efficient than sending sales people around the country to introduce the products into retail shops.

Efficient and thus sustainable.

The Controversy

A lot of inventors will tell me that their clients are not on the Internet. That might be true, even though I think that there are always ways to test the interest of potential clients, even though they might not purchase online.

I just booked my tickets to visit the Sustainable Living Festival in Melbourne next month. It is very exciting to get back to the roots of where my passion came from.

Flying Green

While I booked the plane ticket, they gave me the option to offset my carbon emissions. Pretty exciting on one hand that it has come into such a mainstream process.

On the other hand, I wonder how much difference that really makes. If it becomes so easy to pay (It was only $2.87 or something), there is no need to venture further and find the real sustainable solutions.

But I guess, it is better than nothing. It certainly adds convenience to the process of being green. But it does not help anyone’s profit.

I have not posted in a week, because I was so focused on two others projects:

www.Freelance-Writing-Career.com is a site I am building in partnership with Marshall Krueger. He does the writing, I do the webmastering. In the last week, we have implemented a feed that shows the latest freelance writing jobs that are posted on 19 bidding and job sites.

I have also had quite a bit of action on my massage marketing blog.  I invited my readers to post questions about massage marketing. Now I am answering one a day.

But now I am concentrating on greentoprofit.com again.

Alexander

One of the organisations on my list is ecoBiz, a government run consultancy service that helps businesses implement sustainability in 3 areas: Energy, Waste and Water.

They facilitate a 6 step process:

1. Company applies to join ecoBiz
2. Company develops baseline to compare eco-efficiency improvement against
3. Site survey to identify opportunities for positive ecological impact
4. Development of action plan of how to implement these solutions
5. Implementation (There is also the potential of a rebate of up to 30% of the investment)
6. Reassessment (after one year) to assess the savings.

No overall financial analysis available

I asked Michelle Olivier whether they had statistics on the financial impact on businesses. It would help figure out whether sustainable solutions bring a positive financial return. Due to their workload and staff shortages, she does not have these figures and is not planning to develop them either.

So answer here to my question: Are sustainable solutions more competitive than their “traditional” counterparts.

Sustainability involves Action

What their website did remind me off is that a change in actions is essential to achieve reduced impact on the environment. Reduce, re-use, recycle, switch off lights, etc.

So I am sure how far I get with my goal to improve the convenience. After all, this whole process ties up some internal resources (even though there is the payback of additional motivation).

On their website, they publish their complete toolbox for anyone to use. This includes detailed Excel spreadsheets to work out the financial and ecological impact. It also gives may ideas of what actions can be taken in each of the 3 areas (water, waste, energy).

As I sit here today, reviewing what I have written yesterday, there is one big question in my mind: How do I move forward now?

Paul Lemberg has an answer. Well, he has a few questions in his post: How to engineer a breakthrough (on demand.) that lead to an answer.

(Paul has written the book: Be Unreasonable the unconventional way to extraordinary business results.)

Here are his questions:

What am I trying to accomplish?

I want sustainability to spread through the Australian business world.

What are some of the ways that can happen?

1. Mediawork that educates entrepreneurs on the sustainable benefits
2. Creating demand for sustainable solutions in consumers, so businesses are forced to change their production/services.
3. Influence through local, state and federal politics
4. Sustainable solutions for existing problems that are far more competitive than their “traditional” counterparts

Validate that this is in some way possible.

My interest lies in the fourth possibility. That means market research.

• Which solutions are more competitive?
• What makes them competitive? Price, Convenience, Speed, Quality?
• How are they sustainable?
• What is the bottleneck of them reaching more clients?
• At the same time, I need to find the most pressing problems Australian business are facing. And when I say problems, I mean anything they are spending money on.

What this does not answer yet is how my involvement will support that process.

This is one of the latest books written by an ethical entrepreneur. It is released in the US tomorrow.

Joel Makeower has spoken to Gary Hirshberg and read an advanced copy. He is full of praise, calling this book much more than the usual “success stories of socially-minded entrepreneurs that tend to border on vanity publishing.”

This one is “an easy, enjoyable read, inspiring and informative, integrating his [Hirshberg’s] personal journey with insights and takeaways for others”.

You can order it at Amazon.

I have shown before why I think that business is the solution to making sustainability widely available.

I have also shown that sustainable solutions need to be good for people and planet as well as rendering a profit.

Now I want to find out what the status quo is. Are there existing solutions that achieve that? Are there businesses who have implemented the solutions and see a positive impact on their bottom line?

Does being green to profit work?

I want to start researching the business case from three angles:

1. Businesses that are providing sustainable solutions
2. Businesses that have implemented sustainable solutions
3. Businesses that have decided not to implement sustainable solutions

Sunshine Coast, Australia

My main focus will be on a regional level: the Sunshine Coast in Australia. It includes a few related communities with a total 260,000 inhabitants. Tourism is a big economic factor, but the hinterland also offers a range of food production.

Noosa (which is at the northern end) has just been awarded Biosphere status by the UNESCO. This was not just for the ecologically sensitive area, but also the inclusive management of local council that put a strong emphasis on community involvement.

Worldwide

And I will compare my findings here with other publications. Naturally, the Internet will play an integral part in that.

I’ll start with a review of some major blogs.