If you’re on a mission and don’t need context, scroll right to bottom and look for subhead Innovation Hack #2. But you will miss the story of Jigar Shah and how he helped unlock the climate economy through innovation.
If the name Jigar Shah isn’t familiar to you, I hope it will be as you learn more about how his entrepreneurial spirit helped him drive a new way of looking at financing and alternative energy.
I met him in September of 2010 at the annual Business Innovation Factory Summit. 4 years later, his story still resonates with me. 7 years earlier, he founded SunEdison, a solar power and renewable energy company with an $ 113,000— a $ 93,000 line of credit on my home and $ 20,000 in personal savings.
As Shah writes in his new book, Creating Climate Wealth, “In case after case, when we worked on the deals with prospective clients who were mostly farmers, they balked when they came to understand what the upfront cost would be. They were interested in having the energy but did not want to part with the $ 80,000 to $ 100,000 the installation would cost. Return on investment (ROI) did not matter. And they really did not want to be in the energy business. A different model was needed that would cover the cost of the equipment over time.
So, his innovation had less to do with solar power and more to do with a financing solution -- the Power Purchase Model (PPA). Basically, they provided companies with the option of getting power at 10% lower than their current provider without investing in capital expense of a grid. The lynchpin was developing a long-term (20 year) contract that included service and repair.
Ultimately Shah’s insight is summed up in his new book, “While many philosophize about the perfect solution or technology for clean energy solutions and climate change, this book focuses on the practical deployment of the best technologies that exist.
His lesson is one that Larry Keeley and Doblin have been teaching for years – that innovation isn’t simply about a focus on new product or performance innovation but is a fuller spectrum of value-creating areas.
Innovation Hack #2
Think of Innovation as a Periodic Table. It is not a single element, but a series that often combine to create more complex elements.
As Larry Keeley and his colleagues at Doblin say in Ten Types of Innovation, “Part of the innovation revolution is rooted in superior tradecraft.”
The idea is not to have a myopic view of innovation as new product development, but to view it through the lens as multiple types of innovation that work singularly or in concert to create more powerful innovations.
According to Doblin, there are three categories innovation in their framework and 10 types of innovation. See photo above.
Configurations are focused on the innermost workings of an organization and its business systems. Offerings are focused on an organization’s core product(s) or service(s) And Experiences are focused on more customer-facing elements.
The hack here is to see innovation in a more holistic and complementary way – so that you are able to see more opportunities and to combine innovation types to create even more valuable and sustainable innovations.
Jigar Shaw could have been focused on improving solar energy systems. But he focused on a business model that made solar power more affordable to consumers. Today, he is still working on innovative financing solutions to help solve even a wider range of global challenges.
Ten Types of Innovation http://amzn.to/TYYgsj
Creating Climate Economy http://amzn.to/1lCMVIN
Also, check the wonderful BIF10 Summit coming in September: