By Ed Heacox, Envect
In a rapidly changing solar market, the only thing predictable is lack of stability. How can someone with a new product or service, a new venture, navigate these changing market conditions, emerging new technologies, evolving regional incentives and overlapping regulatory and operational standards? No venture is risk-free but professional consulting, specifically venture consulting, can help your business gain traction and reduce the chance of stalling or failing all together.
What Is “Venture Consulting”
Venture consulting from professionals can help your technology or services reach success in the market. Professionals help you create a strategy and fine tune your overall value proposition to avoid obstacles and help you generate a profit more quickly. A specialized venture consulting team may also be able to serve as market data researchers, legal advisors, regulatory and engineering specialists and tax and transaction experts. A venture consulting team can do all this while partnering with you for a sustained period and keeping in mind your goals for success.
Venture Consulting vs. Traditional Consulting
Traditional consulting is often focused on a narrower scope of work and for a shorter period than with venture consulting. While, many times traditional consultants will offer ideas without navigating execution, venture consultants ideally are positioned early in the process to contribute advice, evaluate various strategic paths and then remain in place to execute the strategy. A good venture partner will be there for crafting plans and achieving results.
In venture consulting, a team is established to provide collective wisdom and thereby lower risk of failure. Ideally the team will be made up of a few functionally diverse experts in the targeted industry or area (engineer, product manager, business developer etc.). Often a multi-functional team can be assembled in a fraction of the time and cost required to recruit, hire and train a team of employees.
Examples Of Successful Solar Venture Consulting
For example, you might have great idea for a engineering advancement but you lack a business team to bring that idea to market. Venture consultants can create that business team to complement your innovation and help execute it. The team, for instance, may recommend viewing your invention as a possible solution for an overall system, rather than as a component. A good example of this in the solar industry is the micro-inverter. This device would not have been nearly as successful if it was merely launched as a great new power electronics device. Its success was totally dependent on the overall system solution and business model: Why would anyone buy a more expensive, lower efficiency inverter? The answer relies on overall installed costs, elegant and useful data monitoring and well-thought-out market segmentation and channel strategy. Micro-inverter power electronics engineers have had some good ‘venture consulting’ help to make their idea and business so successful. Other examples could include, an international firm with success in one market seeking to enter a new region (e.g. Asia to the USA), or a large firm with new niche technology seeking to create an adjacent line of business.
Sharing The Risk
Another advantage of venture consulting is shared risk and reward. This ensures that the consultant is affordable and that its incentives are well aligned with the client’s. One example model is to set a retainer amount that is roughly 50% of the overall target compensation and 50% a variable compensation for specific milestones and results. For new businesses and product lines, early funding could be for strategies, business plans and partnerships while post launch compensation evolves toward customer contracts, revenue and profits. Early in the process the consultants make the investment for the benefit of longer-term reward. The ideal compensation program makes this resource affordable to engage and drives the consulting team to be vested with ‘skin in the game’ and have solid incentives. Depending on the situation this can be through cash, warrants or company stock. The key is that the client secures affordable high value consulting and both parties profit from their success.
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