Top Five Impediments to Business Success

Readers here generally know that 2GreenEnergy acts as an advocate for companies in renewables, electric transportation, and sustainability more generally – and that our associates help clients through the business issues that may be impeding success: raising investment capital, PR, etc. I’ve spoken with so many people on these subjects during this past year that I thought I’d summarize the top five impediments that I see companies facing. In other words, here are the five most common issues that prevent companies in this space from going forward in a meaningful way.

Impediment #1: Expecting Seed Capital for New, Unproven Ideas and Teams from People Who Don’t Know You. There are exceptions to this rule, but the rule itself is worth stating: take a second mortgage on your house, or hit up family and friends for the capital necessary to develop a working model of new technology. And do not expect the fact that you have a patent to convince investors that your idea is workable. I do not claim to know exactly how the patent process works, but I know enough to see that it is completely dysfunctional; I’ve seen patents for things that couldn’t possibly work in the real world.

Impediment #2: A Business Concept that Screams, “Me Too!” An investment banking firm that I work with locally here in California decided against one of the deals I brought them the other day, purely on the basis of “barrier to entry.” They liked the team, the business concept, the projected growth of the sector, the power-purchase agreement methodically signed into place – and several other things. But they refused to go forward when they realized that there was nothing proprietary or unique about the company’s approach to the market – and that my client could face competition from many different sources.

Impediment #3: A Business Plan that Is Too Short, Too Long, Confusing, Amateurish, or Just Not Compelling. The document that represents your idea needs to be fully professional, and tell your story in a concise yet complete way.

Impediment #4: Lack of Marketing Focus. I leafed through a 70-page business plan for an electric boat manufacturing company the other day. I thought they did a reasonably good job at educating the reader on the market, the imperative to replace noisy, smelly gasoline engines, etc. But I was amazed to find essentially zero discussion of what I consider to be the single most important aspect of any plan: sales and marketing. Who’s going to buy this? Why? How will they learn of the product and pursue that interest to completion? Business plans based on the mistaken notion that “if I build it they will come,” are non-starters.

Impediment #5. Ignoring the Power of Online Marketing. Unless you’re operating in a stealth mode for some reason, it is vital that you explore social media, blogging, and other ways of developing and promoting content that positions you as a thought-leader in your industry. I hesitate to say this, as it could be construed as bragging, but the average number weekly visitors at 2GreenEnergy doubled over the past three months – and that figure represented a doubling of the figure three months earlier. Do you know how much we’ve spent doing this? Virtually nothing. It happens automatically, as a natural consequence of a good SEO strategy and taking an advocacy position for something important, offering content that people find useful.

As always, I welcome comments and questions.