Three Customer Camps ClimateTech Companies Must Corral

There are three camps of customers for ClimateTech startups, similar but not identical to those of CleanTech. Startup and growth company executives, and those who invest in them, would be wise to avoid the trap of focusing on one at the expense of the others. To do so would not only neglect key slices of the total addressable market: it would cripple the ecosystem synergies and network effects essential to scaling up a unicorn.

Tree Huggers and Those Who Don’t Give a Damn

The first camp comprises the true believers who faithfully practice what they preach when it comes to helping the planet. They make sure to eschew plastics, buying wooden spoons and paper straws. They bring their recyclable cloth shopping bags to the super. They minimize their carbon footprints where they can, and pay offsets when they can’t.

Then there’s the camp that just doesn’t give a damn about the environment and even dismisses things like climate change. They may dismiss it out of apathy, ignorance, non-conformism or skepticism. They may be unwilling to spend extra or inconvenience themselves to go green. Or they may be working in an industry where advocacy of net-zero or alternative energies would make them appear to be hypocrites or even jeopardize their jobs or investments. They may even be hostile to the tree-huggers, dismissing them as “woke” or enemies of the working class.

The Biggest Camp is Straddling the Fences

Then there’s what is arguably the largest camp. It comprises people who (in the public or around friends or family) say they really care about the planet. They’ll take pride in their newly purchased home compost station. But when it comes down to it, they are not yet taking these things seriously. They are on the fence, watching which way the wind is blowing.

They may care — for their kids, for the planet — but they have many cares. They might want to make their family more green and do their part. But then that all goes out the window between hectic schedules, job pressure, and budget pressures. Who can blame them for not thinking too deeply about climate change. I can’t. It’s new. It’s abstract. I certainly don’t look down on them for having other pressing priorities.

This camp can be divided into consumers and businesses.

On the consumer side: Consumers have plenty of things on their minds — kids running around, bills to pay, etc. — so finding the time to actually switch to a new green energy company your friends at the pub mentioned is unlikely to be at the top of their to-do lists.

On the business side, busy professionals — owners and managers — just don’t have time or motivation to give a damn. Unless, that is, there’s new legislation or regulations forcing them to act. Do they need to sign up for a new carbon offsetting software, or comply with this new standard or that one? If not, chances are they won’t make it a priority –unless, perhaps, they get free PR for signing up or public kudos for advertising their social conscience. So there needs to be either a carrot or a stick to induce positive behavior change and better business practices.

Something to Brag About

I don’t blame consumers or businesses for straddling the fence or dragging their feet. . It’s difficult to be green. Do we really enjoy dividing our trash into plastic, paper, and organic waste? It’s not especially enjoyable, or glamorous. The truth is that we need easier and smarter solutions. They need to be fun, save businesses and people money, time and, ideally — this is the kicker — are brag-worthy.

What do I mean? Let’s take a look at the cachet of Lexus, for example.

Before moving to London, my neighbor was a proud Trump supporter. He told me he didn’t believe in Global Warming. But then he bought a shiny new Tesla and overnight he became as proud of his EV as he was proud of his MAGA hat. But why? For him it was all about the good ol’ American value of showing up one’s neighbor, boasting about saving money on gas, making a good investment. And, not to be neglected: it was good for America.

My neighbor didn’t care about global warming or reducing carbon emissions. He was just one-upping his peers and making his own life a little cooler. And perhaps even basking in the interplanetary glamor of Elon Musk, an immigrant who has emerged as something of a cross-over media star and a quirky, maverick, and extremely rich cultural hero, the ultimate achiever of the American dream in our generation. Who wouldn’t want to bask in the electric glow of Martian Red, white and blue, hitting the road and making our humble home planet just a tad bit greener?

An Inclusive Approach to Reach All Three Camps

As an environmentalist and entrepreneur, I don’t really care what the reason is for going green, even if there’s some greenwashing going on. The motivation and the methods are less important than the outcome and the impact. Whoever buys in, for any reason, even a hypocritical or egotistical one — they are contributing to solving the problem. Whether the consumer or the businessperson is aware of it or not, or whether they have an agenda or not, doesn’t really make a bit of difference to me.

ClimateTech startups are pitching massive TAMs. Entrepreneurs and their investors must be sure not to neglect any major customer segments. To tap into all three camps, startups need to find the messaging which appeals to each market segment according to its own value system, not someone else’s.

The tree-huggers should get an idealistic feel-good message that gives them due credit as pioneers and thought leaders for their generation. They were, to their credit, the visionaries, early adopters or ideological descendants of those who warned of the Silent Spring, precociously celebrated Earth Day, and feathered the nest that would bring forth future flocks of environmentally conscious consumers, cycling and recycling.

The eco-skeptics, for their part, need practical reasons to go green, despite their doubts. Those common sense reasons must be denominated in dollars and cents, both for consumers and businesses. They must be easy to implement. They must make sense. And sensors.For example, Nest (now owned by Alphabet) turns down your heat when its sensors detect that you’re not home. There’s nothing you need to do. Just keep living as you do, keeping the house warm when you’re there and not wasting heat when you’re not. You and your family effortlessly become more green, save some green, and help the planet. Now that’s cool. And fence-straddlers and greener-grass boasters– maybe your neighbor, maybe you — should be allowed bragging rights. Superior insight and intelligence make them seem cooler and their wallets fatter. Let them get enthused about why their latest toy is good for their country, and the planet. Why begrudge anyone their pride and joy, whatever its motivations. Every bit helps, from any direction.

We don’t have the luxury of waiting. Today we don’t think twice when we switch on lights or turn on an oven powered by conventional energy. The same needs to happen for green energy. We shouldn’t need to think or stress or spend more to do the right thing. Soon “green energy” will just be “energy”. If it’s not, we’ve failed.

A Campfire Recipe for ClimateTech Unicorns

Who cares if the diverse segments don’t sit around the campfire singing kumbaya? They each can sing different tunes. The point is to include them all, excluding no one. Addressing all three camps is the recipe for contributing to a fully-realized TAM. Doing so is what will also catalyze culture change and mass adoption. And it will, with luck, birth the next foal of environmental technology and social impact unicorns.

And, speaking of campfire recipes: some may remember s’mores, the gooey mashup of chocolate, graham crackers and melted marshmallows. They may have been messy, and maybe not so nutritious. But they were easy to make, tasty, and irresistible around a bonfire. When it comes to ClimateTech, the winners will be the ones which mash diverse markets and consume them whole. Like s’mores.

About the Author: Nolan Gray is a Silicon Valley SaaS exec turned ClimateTech entrepreneur and investor. American-born and based in London, Gray was selected in 2020 for Forbes 30 Under 30 in Europe. He is co-founder of Svea Solar, a pan-European digital energy innovator that has eliminated millions of tons of CO2. The company has generated $130 million in revenue, while raising $31 million, with more than 500 employees. Previously, Nolan served as CMO at Jobscience, a San Francisco-based SaaS company sold to Bullhorn, owned by Vista Equity Partners, for $50 million. He has helped raise over $80 million for multiple SaaS and ClimateTech startups in the U.S. and Europe, and has made a series of impact investments.

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