Better Place: The Very Model of a 21st Century Enterprise


Photo: With colleague Jennifer Biringer, test-driving the Th!nk EV at Better Place’s Palo Alto headquarters back in June.

Many of us at SustainAbility have a big sustaina-crush on Better Place, the start-up working to build the infrastructure for electric vehicles—charging stations and battery packs—in cities around the world, and its founder Shai Agassi. (Our biggest Better Place fan, Gary Kendall, has contributed to their blog here and here, and the urgent need to transition our systems away from oil is a recurring theme for our team—see most recently Jeff Erikson’s blog on the BP Deepwater Horizon spill.)

But what’s a crush without a little analysis? Here are seven reasons why we think Better Place is one of the best examples of a 21st century enterprise out there.

1. Better Place started with an urgent social need, is moving rapidly to bring a solution to market, and is doing so by prototyping around the world. First, Agassi started with a Big Hairy Audacious Goal for his country: no less than independence from oil.

Says Better Place Australia CEO Evan Thornley in an interview on CNET’s CarTech blog: “[When Shai Agassi was coming up with his initial white paper] he went through the stages of ‘how can we run a country without being dependent on oil?’… We’re a mission-driven organization; we want to get the world off oil. There’s nothing good about it: fighting over it, paying for it, running out of it, or polluting the atmosphere with it.”

And Better Place is not wasting any time, as Cisco strategy EVP Inder Sidhu writes in a nice excerpt from his strategy book Doing Both, which argues that pursuing two seemingly disparate paths at once is often mutually reinforcing:

Agassi hopes to move quickly—before the next wave of first-time car buyers choose gas- or diesel- powered vehicles… Over the next five years, Chinese and Indian consumers are projected to buy as many as 70 million vehicles—more than all of the cars that exist in the UK and Germany today.

Most technology startups set out to build advanced products for sophisticated customers in established countries… Afterwards, they typically water down their innovations for sale to customers in emerging countries. Agassi has dispensed with this model and is instead focused on building simple solutions that can be deployed anywhere around the world simultaneously.

2. Better Place is thinking service, not product. Why are service-based business models often a better bet from a sustainability perspective?

Service-based models incentivize manufacturers to make assets that last and to take end-of-life responsibility (think Xerox copiers). They allow many more people to get use out of the same amount of physical assets (think laundromats, or car sharing services like Zipcar, and see Rachel Botsman and Roo Rogers’s Collaborative Consumption website and book for more examples). And they start with the human need and ask, “How can we best meet this?”

Agassi understands that people fundamentally seek the service of convenient mobility. This insight means that his business model is designed around meeting that need for mobility as effectively as possible, rather than making the current model (liquid-fuelled cars) somewhat better.

For transportation, says Agassi in an interview, what matters is miles:

Oil companies sell miles…at the end of the day [not gasoline]. [Better Place is like] an oil company that has a guaranteed supply of oil at a cost of zero dollars a barrel… I don’t sell the energy—the battery makers do that. I sell the convenience. (Interview by Martin LaMonica, CNET)

And access to a service is often a much better model for the customer than owning the asset itself, say Better Place’s Evan Thornley and Guy Pross in another interview:

Separating the battery from the car is a key to our business. It not only takes that battery [technology] risk from you, but also saves you from purchasing the battery up front, which is a huge part of the cost of hybrid and electric vehicles. (Interview by Derek Fung, CNET)

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Think locally, act globally

“I’m getting bored of global governance,” said my friend Vikrom to me today over late afternoon tea and mangoes.

We were catching up on the last seven years, and he was telling me about his doctoral research on perceptions of climate science and risk at Oxford’s Institute for Science, Innovation and Society (how much do I love their tagline “Wicked problems, clumsy solutions, uncomfortable knowledge”). 

“Global governance is fine for things like security and human rights. But I think meaningful environmental action is increasingly going to be taking place at the local level and not at the transnational level.”

This wasn’t a normative statement. He wasn’t saying that meaningful action on climate change or water or biodiversity shouldn’t be taking place at the transnational level. Only that he didn’t think it was going to happen.

This reminded me of a blog I read last week by Shoko Takemoto, an MIT grad student working on a project to understand how communities perceive climate risk. She writes fascinatingly about her work this summer with Laotian rice farmers (via David Hodgson):

Before coming to Khammouane, I was a little nervous to ask the villagers about climate change. For me, I have understood that climate change adaptation is about estimating the impacts of climate change using the best science, scenarios, and models available… I was worried about how to communicate such complex ideas to farmers and villagers who perhaps had very little knowledge of science or future projections.

However, as soon as I started talking with the farmers and community members, I was stunned by their wealth of knowledge, experience, and insights regarding how seasonal weather patterns, extreme events, and frequency and scale of disasters are changing, how that is impacting their lives, and what needs to be done to solve these issues.

Ninety-five percent of the people in Nonbok are rice farmers… they must survive through damages from flood and drought almost every year. [Adaptation] to climate change and reducing the risk of disaster is not a matter of science or predicting what might happen in the future; instead it is an issue that impacts their well-being and their everyday lives, and needs to be dealt with today.

…I began to understand that at the community level, the terms disaster risk reduction and climate change adaptation may be too limited to capture and address the villagers’ concerns.  In vulnerable communities… it is difficult to isolate and identify whether a disaster is due to climate change, [poverty] or natural hazards.  From the perspective of the communities, such differentiation seems irrelevant, if not confusing.

There’s something here fascinating here about language. One of the things that we continually bump up against is making the complex, long-term, global nature of sustainability challenges meaningful to each of us in our daily lives as individual citizens, consumers and professionals. Ironically, the language of sustainability – as increasingly abstract and sanitized as it has become  (think “overnutrition” or “350 ppm” or “stakeholder” or, indeed, “climate change adaptation and mitigation”) – serves to distance us from a gut understanding – and therefore, from acting.

There’s something, too, about an over-reliance on modeling at a global or corporate or non-individual level without attention to what this means on the ground today – whether that’s in a village or a corporate meeting room. Of course, it often seems like there isn’t anything to care about on the ground today (that’s why it’s a sustainability challenge) but I’m increasingly thinking that we have to try harder to find those connections, rather than railing against the cognitive limitations of all of us humans to grasp what’s happening in the long-term or the broader sphere and asking “why they don’t just look at the data.” Perception is not to be dismissed. We need to meet people where they are.

Hence – again – why stories and the one-to-one model (as Tom’s Shoes says) are so important. And just yesterday, my colleague Kyle forwarded me a project he’d come across to tell stories that personalize the Millennium Development Goals.

Need to keep thinking about this a bit more.

Oil makes my world go round

Fortune’s Stanley Bing lays out a world of $1000-a-barrel crude. He’s (as usual) being facetious. Only not. It solidified my uneasy realization these past couple weeks how much the lifestyle I’m lucky to have depends on cheap flights that let me move easily between London, Thailand, the US. Sure, my grocery bill is higher (but as I still think in dollars it already seemed way high anyway) – but because I don’t own a car and rarely drive here in London, I haven’t taken a directly noticeable wallet hit — yet.

The Climate Group: a network of reducers

[Originally posted on the Fletcher INTERNet]

Now in the middle of four weeks with The Climate Group. Lots of Fletcher presence here – I’m working with Shelagh Whitley F’03, whose idea it was to have Fletcher interns, Shotaro Sasaki, who is now in the Philippines with UNDP/GEF, interned here for six weeks right before me, and Prof. Bill Moomaw is on their advisory board.

Started just last December and based near London, The Climate Group‘s mission is to build an international leadership coalition of companies and governments committed to reducing their greenhouse gas (GHG) emissions. “By pooling the knowledge of leading reducers of CO2 emissions, and creating an arena for a formal exchange for ideas and practical experience, The Climate Group hopes to become ‘a catalyst for accelerating progress,’ say its organizers.” []

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E+Co: "Energy Through Enterprise"

[Originally posted on the Fletcher INTERNet]

Currently playing on my imaginary life soundtrack: “Hot in Here” by Nelly. Walking down Bangkok’s Sukhumvit Road at lunchtime today, the equator felt very close as the midday sun beat straight down on my tender Medford skin.

For the next few weeks in Bangkok I am working for E+Co, a U.S.-based not-for-profit that provides business development services and seed capital to clean energy entrepreneurs in Latin America, Africa, and Asia. Originally a program of the Rockefeller Foundation, E+Co’s mission is “bringing together technology, people and funding to create viable local enterprises that deliver affordable and clean energy to those in need.”

E+Co’s current investments in Asia vary widely. There’s biogas, biomass, run-of-river hydro, solar photovoltaic, wind, and transmission and distribution, in Nepal, Thailand, the Philippines, Vietnam, India, Bangladesh, and China. Generating capacities range in size from 1 kilowatt miniature wind turbines to 20 megawatt rice husk-fired thermal power plants.

My task will be to produce the semi-annual monitoring and evaluation (M&E) reports for E+Co’s active investments in Asia. The idea is to assess the financial, social and environmental (“triple bottom line”) performance of each enterprise, in order to evaluate investment impact, increase future access to capital and improve the knowledge base for developers and investors alike.

Julia is in Bangkok for a couple of days on her way to Bhutan. I think we’ll be spending some time on two key Thai activities: eating and market shopping.