Green Innovation and Green businesses - What are the odds of success?

Green Innovation

Someone posted this question to me on Quora. Usually, every week I answer one of the most interesting questions posed to me. And the topics range from green entrepreneurship to holistic business strategy. You can visit my page on Quora for more exciting reads on these topics. 

When it comes to green business and innovation in this field, it is a very dynamic area to operate in. However, similar to any other innovation, there is a risk of failure. 

So before getting into the odds of success in green innovation, we should explore more on why innovations fail. 

Primarily, ‘innovation’ is all about creating solutions to certain problems. The need for innovating something arises because there is a problem with the status quo. 

So the first question to ask is whether the problem really exists or is it a figment of my imagination? Am I the only one seeing/feeling the problem? Are others also feeling the same pain as I am feeling? 

Now many times, people are not even aware of their pain. They are so used to it. In the 1980s and the 1990s we used a wired phone. But not everyone had a problem with it. People lived with it. Someone thought of it as a pain point and invented the cordless phone.

Same happened in the mobile phone transition from feature phones to smartphones. 

So it is important to identify a pain area that may or may not be ‘felt’ as pain in the beginning by the masses. But the pain must surely exist and it should get accentuated once people know that there is a solution to the pain. That is the 1st rule for going for an innovative business idea.

The second question to ask is whether people will pay for the solution. If the incremental benefit of solving the problem is less than the cost of solving it, people will choose to stay with the problem. 

So you need to price your solution just right. Of course, there are strategies around skimming to take the first-mover advantage. But that is a separate discussion.

And the third question is how widespread is the problem. Is it felt by a very narrow niche? A fuel efficiency solution for a Lamborghini is perhaps a great innovation. But there may not be many takers for it. Versus the same thing for a Maruti or a Hyundai car may have a very large market. 

If the answers for all these 3 problems are positive, innovations can make business sense and the success probability is pretty high.

The same applies to green innovation. 

Within green innovation, there are many aspects. 

You may develop a new green business idea.

You may develop green variants of existing products.

You may consider greenifying your operational processes.

You may deploy waste reduction techniques in your production.

You may design software or an app-based system for increasing the efficiency of green ventures. 

You may launch a tech platform for creating an ecosystem of green solution providers.

All of these and many more can be classified as green innovations.

The technical success of these initiatives may be ensured. However, commercial success will depend on the answers to the above questions. 

Even in the case of internal process innovation, the same logic will apply. Are your internal customers, i.e. the workers, the CFO, the compliance officer etc seeing this as a problem area. 

Will there be any tangible benefits? Will there be any intangible benefits? Can you put a price to the benefits - both tangible and intangible? Will this price be more than the cost incurred?

Chances are good that green initiatives will turn out winners if you look at the gains from a holistic perspective and capitalize on the same. I would safely say that a well crafted, holistic greenification strategy will have at least a 66% chance of long term success. That is a significant upside.

My take is clear. "Green" is the way to go in the future.