As investment pours into climate tech, it’s true that a rising tide lifts all boats. But in markets -- especially fast-changing markets, like batteries, hydrogen, carbon capture, just to name a few -- those boats don't all get the same lift.
Certain parts of the value chain, from upstream mining or manufacturing to downstream deployment models, are far better places to build a business than others. These profitable niches can be thought of as profit pools.
And to make it more complicated, those profit pools shift over time. So it might be a great time to be in the manufacturing business. But just a few years later, it may be the worst place to be.
This week, Shayle and Nat Bullard, Chief Content Officer at Bloomberg New Energy Finance, try to predict where those profit pools might show up.
They examine historical examples, namely wind and solar, where profit pools have shifted from manufacturing to servicing. Along the way, they note some of the winners and losers of those shifts.
Then they turn to the less-mature technologies, focusing on batteries, hydrogen, direct air capture, and carbon accounting. They discuss what lessons can (and cannot) be applied from the earlier generations of climate technologies.
Within these spaces they cover entrepreneurs in this space may be wondering: When should I specialize vs. vertically integrate? Why do investors keep telling me to get out of the commodity business?
Get your swim suits on. It’s time to dive into profit pools.
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