So our brother is getting hitched next year and as we teased his fiancée over Thanksgiving dinner about vegetarianism, Walmart and energy consumption (let’s just say she believes in change), we thought of hope. You know, that crazy belief that if you do something different in the world, something good will follow.
We bring this up because the dour economic news is starting to choke hope in business. Inside marketing and planning circles hope is known as innovation, and the leaders of innovation are starting to falter.
Cutting-edge innovator Tesla, the upstart producer of high-end electric cars, has tapped most of its $150 million of investment and been forced to delay its second sedan model until 2011.
Internet innovator Twitter, the web communication service that proved invaluable during last week’s Mumbai attacks, still attracts $500 million buyout offers but makes some wonder if it can survive the recession while still in a “pre-revenue” stage.
And old-school innovator GE, the largest producer of wind turbines in the U.S. and one of our best hopes that humanity will figure out how to live on alternative energy sources and clean water, has had its stock hammered down to bargain-basement levels.
It’s worrisome because we don’t want to see electric cars, open communications or alternative energy die. Failing to innovate due to a bad economy is a good way to miss future growth. It doesn’t have to cost a lot; PNC Bank is grabbing market share among twentysomethings with a web site that rebrands stodgy banking to a hip “virtual wallet” — complete with a slick interface that forecasts how much money you’ll have next week after your paycheck clears. A little clever code, and PNC is putting on 4,000 new customers a month.
Sure, innovation requires risk. Johann Gutenberg went bankrupt in 1455 after printing 200 bibles … but within 50 years a half-million books and intellectual revolution had followed. Starting something new is like getting married. You don’t know where the road will lead, and you probably can’t afford it, but the act of faith gives birth to the future.
Photo by Rodney Smith via Maximo.
Jeff Immelt deserves heaps o’ praise for dragging General Electric into the environmental age. The CEO’s Ecomagination campaign is timely, stirring, and spins the vast energy and finance systems of GE into a BP-like clean fusion.
Except it’s damned hard for consumers to buy any of it.
Take solar power, perhaps the most glaring market gap in our energy-starved, high-fuel-cost society. You’d think consumers would be lining up at GE in droves to slap solar panels on roofs to slash home utility costs … but search online and you find engineering gibberish. The GE site has links to the latest ads or brochures hinting at tax credits for solar energy. But no costs, no lead forms, no easy answers. It’s good to know that the size solar system you need (in kW) to power your home simply requires you to multiply your average daily electrical demand (in kWh) by 0.25, but if you don’t know your kW from your kWh, well, no solar for you.
There’s a hint that these panels are expensive. GE notes its BrillianceTM solar electrical power system can supply 100 percent of your energy needs, but cutting your electricity by 40 or 50 percent is typically the most cost-effective approach. If we do the math, that means it must cost tens of thousands of dollars if we can’t achieve payback in just a few years. The ad has no phone number, no offer, no tickler to the nearest retail store. Where do you go for this future? The ad points to the web, which has links to a brochure, which on page 5 finally has the listing for a call center.
To be fair, it’s probably unreasonable to expect GE to tout in ads you need to spend more on your roof than a BMW to really get off the grid. The technology isn’t there yet. Elsewhere online, solar panel wholesalers provide scant help, with charts comparing Watts to Amps and Volts. Word is Ikea sniffs the market opportunity and has low-cost solar panels on the horizon.
Eventually someone will pick up the solar potential. There are 89.7 million homes in the U.S. with central heating and 60.1 million with central air; if only 5 million homes converted a year and dropped $3k each on solar panels — about what early adopters spend on flat-screen TVs — you’ve got a $15 billion industry. Until then, enjoy the sight of a rare open market niche beaming down at you from the clear blue sky.