Lessons learned after 5 years of climate tech entrepreneurship
I started Tomorrow in 2016 with a desire to find scalable digital solutions to climate change. During the 5 years that followed, Tomorrow created a B2B enterprise data service (electricityMap), a B2C carbon accounting app (North) and a B2B carbon accounting SaaS (Bloom). This article attempts to reflect back on meaningful lessons learned by building these data products.
Is the climate problem also the customer’s problem?
Every pitch deck starts with a slide about the problem you’re solving. In our case, each product was designed to solve a problem that was rooted in information availability being a barrier to climate action:
- Most people don’t realise that the footprint of electricity varies from one hour to the other (electricityMap)
- Most people don’t see the large impact differences of actions they undertake in they everyday life (North)
- Most organisations do not have a detailed overview of their climate impact (Bloom)
These are things that are wrong with the world, but they are not necessarily pains that are experienced by customers or users, and this is what led to North and Bloom being discontinued.
In opposition, these are pains experienced by some of our customers:
- They wish to differentiate their products from the competition: can they increase revenue by embedding sustainability information in their product?
- They wish to strengthen their brand image by showing they care about the environment: can they tell a story about a reduction initiative they undertook while avoiding a greenwashing scandal?
- They need to fulfill ever-growing ESG compliance needs: can they reduce associated costs and decrease the time needed to report their compliance?
Inevitably, entrepreneurs with the ambition of building a successful business that solves a global environmental issue will have to deal with two sets of pains: the environmental problem, and the customer’s problem.
Failure to pick problems that are relevant for both will result in increased decision making complexity at all levels of the organisation: do we optimise for impact (the environmental problem) or for revenue (the customer’s problem)? I therefore found it helpful to think separately about the climate problem we’re solving versus the customer problem we’re solving. Do they both end up aligning?
If there is no customer problem that is large enough (i.e. worth paying for) that overlaps with the environmental problem, then a non-profit, where the focus on the customer’s problem is reduced, might be a better suited option.
Precision and automation are not always valued
One climate problem particularly deserves to be cited here: the need for precision and automation. It’s quite appealing to see increased precision and automation as one of the ways to reduce barriers to adoption. For example, electricityMap increased the precision of global electricity data from an annual to hourly resolution and North provided an alternative to carbon accounting questionnaires by providing a fully automated activity-level carbon accounting. However, what is the business value of increased precision and automation? To which extent does it solve a customer’s problem?
As regulation is currently not mandating a high precision of carbon measurements and because companies inevitably seek to take the shortest route, we end up in a world where precision is overrated. For carbon accounting specifically, I’ve been surprised to discover that a survey asking general questions is sufficient for a large number of businesses who won’t need to know the exact attributes of all flights taken by its employees.
Similarly, we discovered that having real-time automated carbon accounting was overkill. As our customers were used to yearly accounting, we discovered monthly accounting wasn’t that high on their list of pains. Furthermore, the manual labour involved wasn’t so large that automation was worth it, especially given the precision required. In a nutshell, we were competing with the alternative of using a footprint calculator or performing a carbon accounting workshop once a year, and these alternatives already solved most needs.
However, in some contexts, precision can lead to increased value. For example, electricityMap’s real-time data increases user engagement in our customer’s apps (such as electric vehicle charging) as they look for insights about their electricity usage and information about how to reduce their footprint. Furthermore, the latest launch of Google Cloud Carbon Footprint is a perfect example of how precise carbon data can help a product to differentiate and thus attract more customers. Precision seems valuable if it can lead to differentiating the products of our customers, ultimately leading to increased user engagement and reduced churn.
Climate tech startups are at a higher risk of burnout
People don’t join a climate tech startup to become rich: they join because they want to have an impact and be part of the solution. More often than not, they are passionate about the issue, and are driven by a desire to change the world for the better. This was especially true at Tomorrow, and this led to a culture of high-achievers, constantly challenging and pushing one another to become the best version of ourselves.
Coupled with the urgency of the climate issue, this led us to work on three very different products at the same time (electricityMap, North and Bloom) even though we were a team of less than 10 people. We simply couldn’t resist the urge to work on bringing to market all these products which fixed a very real climate problem.
The risk of trying to do everything is accomplishing nothing.
In hindsight, we were simply trying to fix too many things. Saying no was not an option, although we should have realised that by dispersing our attention, we were preventing each product from having a real chance at becoming successful. I sometimes wonder how each product would have fared if we had not worked on the other ones.
Even though working on these different products enabled us to gain market and user insights at a very rapid rate, the burnout risk was real. Furthermore, as anyone working in the climate space knows, we are constantly surrounded with negative news. The world is burning, our future is in jeopardy, we’ve known about it for a long-time, no-one is doing anything about it, and on top of that we see daily greenwashing statements that make us cringe. These pressures are very real and affect morale by pushing you to work harder to fix a systemic problem that unfortunately won’t be fixed overnight.
Realising the magnitude of the climate emergency takes its toll. Staying optimistic remains difficult, and I personally coped by working more and trying to be part of the solution. Realising the reality of my own footprint caused me to restrict my life by travelling less. It had consequences on my social life. I’ve learned to be more compromising and to treat carbon-intensive activities as a luxury instead of always feeling ashamed. In the end, you can’t fix the world if you’re not in a positive mindset.
As a startup, these are very real pressures on the mental health of the team. People will go out of their way to fix the problem, and will feel a real urgency with their work. This can lead to burnouts. I’ve learned to be more intentional about mental health, and as a team, we’ve created spaces to replenish. We’ve introduced “deep-work” days twice a week where people can work from anywhere while meetings are banned. We’ve introduced a regular “slack week” where we step back from product development and let go of the urgency. Personally, I’ve allocated a regular schedule in my calendar to meditate about how I work in order to prevent any burnout. After all, it’s about enjoying the journey, while attempting to fix the most meaningful problems that humanity has.
There’s a balance to strike between not caring about the issue and burning out because one wants to fix it overnight. This is a marathon — not a sprint.