What Is Cleantech?

Business / By / September 24, 2022

Cleantech is an umbrella term for any process, product, or service that harnesses a renewable energy source to eliminate or reduce emissions and/or waste.

Understanding cleantech

While there is no precise definition of cleantech, the Clean Technology Trade Alliance defines it as “a broad base of processes, practices and tools, in any industry that supports a sustainable business approach, including but not limited to: pollution control, resource reduction and management, end of life strategy, waste reduction, energy efficiency, carbon mitigation, and profitability.”

The word itself is believed to be a derivative of the term “clean tech” which was popularized by authors Clint Wilder and Ron Pernick in their 2007 book The Clean Revolution: The Next Big Growth and Investment Opportunity. Wilder and Pernick posited that the rise of cleantech – at the time in its relative infancy – was driven by:

  • The rising cost of conventional tech.
  • Increasing investment by large corporations into cleantech research and development.
  • Competition in the global marketplace.
  • Shifting consumer attitudes and increasing prevalence of mainstream environmental issues, and 
  • The emerging Chinese middle-class who forced their government to devote more resources to sustainable forms of energy.

Cleantech applications

Wilder and Pernick believed that when the cost of cleantech became more competitive with conventional alternatives, advances in solar and wind power, water quality, and transportation would benefit broad swathes of society.

Fifteen years after the authors wrote their book, the point at which cleantech is more viable than conventional options is rapidly approaching. In some countries, this point may have already been reached.

Here are some of the applications of cleantech today:

  1. Built environment – this encompasses tech that saves power in the home or workplace and tends to include automated or smart IoT devices. Cleantech is also a critical part of reducing emissions from the design and planning of new homes, with the UN reporting that 38% of all CO2 emissions come from the construction industry.
  2. Energy distribution and storage – any cleantech product that provides domestic, commercial, and industrial consumers with more control over the way their electricity is supplied, stored, and used.
  3. Energy efficiency – any product that facilitates the saving of energy in domestic and industrial processes. Examples of this cleantech that reduce GHG emissions include LED illumination, waste heat recovery, smart plugs, and energy analytics platforms.
  4. Transportation – at 27% of total emissions in the United States, transportation is the largest polluter by sector. Cleantech here is focused on start-up companies that are working on new methods of transport in addition to initiatives that reduce the industry’s environmental impact. Examples include biofuels, advanced telemetry fleet management software, and drivetrain conversion systems.
  5. Water, waste, and agriculture – cleantech is used to improve the quality and quantity of potable water and in terms of waste, involves novel business models and strategies to reuse materials. Cleantech is also used in the agricultural industry to improve food security and production.

Key takeaways:

  • Cleantech is an umbrella term for any process, product, or service that harnesses a renewable energy source to either eliminate or reduce emissions and waste.
  • Cleantech is a derivative of the term “clean tech” which was popularized by authors Clint Wilder and Ron Pernick in their 2007 book The Clean Revolution: The Next Big Growth and Investment Opportunity.
  • The applications of cleantech today are wide-reaching and have enormous benefits for society. Cleantech products tend to be concentrated in waste, water, agriculture, transportation, the built environment, and energy distribution, storage, and efficiency. 

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Tech Business Model Template

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A tech business model is made of four main components: value model (value propositions, mission, vision), technological model (R&D management), distribution model (sales and marketing organizational structure), and financial model (revenue modeling, cost structure, profitability and cash generation/management). Those elements coming together can serve as the basis to build a solid tech business model.

Web3 Business Model Template

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A Blockchain Business Model according to the FourWeekMBA framework is made of four main components: Value Model (Core Philosophy, Core Values and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics/incentives through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.

Asymmetric Business Models

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In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.

Business Competition

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In a business world driven by technology and digitalization, competition is much more fluid, as innovation becomes a bottom-up approach that can come from anywhere. Thus, making it much harder to define the boundaries of existing markets. Therefore, a proper business competition analysis looks at customer, technology, distribution, and financial model overlaps. While at the same time looking at future potential intersections among industries that in the short-term seem unrelated.

Technological Modeling

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Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.

Transitional Business Models

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A transitional business model is used by companies to enter a market (usually a niche) to gain initial traction and prove the idea is sound. The transitional business model helps the company secure the needed capital while having a reality check. It helps shape the long-term vision and a scalable business model.

Minimum Viable Audience

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The minimum viable audience (MVA) represents the smallest possible audience that can sustain your business as you get it started from a microniche (the smallest subset of a market). The main aspect of the MVA is to zoom into existing markets to find those people which needs are unmet by existing players.

Business Scaling

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Business scaling is the process of transformation of a business as the product is validated by wider and wider market segments. Business scaling is about creating traction for a product that fits a small market segment. As the product is validated it becomes critical to build a viable business model. And as the product is offered at wider and wider market segments, it’s important to align product, business model, and organizational design, to enable wider and wider scale.

Market Expansion Theory

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The market expansion consists in providing a product or service to a broader portion of an existing market or perhaps expanding that market. Or yet, market expansions can be about creating a whole new market. At each step, as a result, a company scales together with the market covered.

Speed-Reversibility

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Asymmetric Betting

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Growth Matrix

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In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).

Revenue Streams Matrix

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In the FourWeekMBA Revenue Streams Matrix, revenue streams are classified according to the kind of interactions the business has with its key customers. The first dimension is the “Frequency” of interaction with the key customer. As the second dimension, there is the “Ownership” of the interaction with the key customer.

Revenue Modeling

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Revenue model patterns are a way for companies to monetize their business models. A revenue model pattern is a crucial building block of a business model because it informs how the company will generate short-term financial resources to invest back into the business. Thus, the way a company makes money will also influence its overall business model.

Pricing Strategies

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A pricing strategy or model helps companies find the pricing formula in fit with their business models. Thus aligning the customer needs with the product type while trying to enable profitability for the company. A good pricing strategy aligns the customer with the company’s long term financial sustainability to build a solid business model.

About The Author

Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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