Why the Cleantech Bubble Failed

The widespread failure of cleantech companies in the 2000s was not simply due to government interference or bad luck. It was a failure of business fundamentals. Most cleantech startups failed because they could not provide good answers to the critical questions every business must face:

• Engineering: They offered only incremental improvements (e.g., 20% more efficiency) instead of 10x breakthroughs, which wasn't enough to overcome real-world costs and skepticism.

• Timing: They mistook a slow, linear market for an exponential one, wrongly believing their moment had arrived.

• Monopoly: They chased huge, trillion-dollar markets, which meant facing brutal competition, instead of first dominating a small, specific niche.

• People: The companies were often run by salesman-executives in suits, not by the technologists and engineers needed to solve hard energy problems.

• Distribution: They focused on technology and courting investors but had no clear plan to sell and deliver their products to actual customers.

• Durability: They had no long-term plan to defend against predictable competition (e.g., from China) or market shifts (e.g., the rise of fracking).

• Secret: They were built on a conventional, widely-agreed-upon truth ("green energy is important") rather than a unique, secret insight into a specific market opportunity.

• Illustrates the importance of The Seven Questions Every Business Must Answer