Last evening CSU hosted Andrew Hargadon, Associate Professor of Management at the UC Davis Graduate School of Management, who gave a talk entitled “Starting a Clean Tech Venture.” Speaking to a standing-room-only crowd of over 125 attendees, Professor Hargadon offered an approach developed both through his research as an academic and through his experience as Faculty Director of the UC Davis Center for Entrepreneurship, an organization that has commercialized dozens of technologies from the university’s labs. Hargadon’s message, efficiently supported by a slide deck of historical examples, effectively boiled down to the following: Technology and invention are a necessary, but not sufficient, condition in beginning a promising clean tech business. The greatest predictor of success is actually an entrepreneur’s understanding of complex product systems and the network she develops to overcome the hurdles inherent to inserting oneself into an established value chain.
Hargadon began by juxtaposing the novelty of invention with the entrenched systems the invention was designed to replace. For the ecopreneur, scale is the enemy of adoption, as the majority of clean tech creations are aimed at titanic industrial sectors: power generation, automobile manufacture, and heating and cooling products. For these businesses, massive resources have been expended in designing and refining the current mode of production, and adopting a novel improvement – no matter how ingenious – would likely require Herculean efforts all along the value chain. Hargadon used Edison’s light bulb as an example. The electric light had been around for nearly thirty years before Edison trained his gaze upon the technology, but in three decades it had become little more than a curiosity. The reason, as explained by Hargadon, was the system of gas lighting which the light bulb ran up against. Gas piping had been installed throughout cities and into people’s homes, lamp-lighters had unionized and become a substantial political force, and gas was understood by consumers as a reliable – if at times hazardous – way to light their homes. Electric lighting was, by contrast, unsupported by citywide infrastructure, possessed no political clout, and proved unreliable upon installation. While today the light bulb has become synonymous with ideas and invention, in the 19th century industry was loath to upset the applecart for a revolutionary product.
Hargadon moved next to discuss the importance of networks, stressing that only through network development is it possible to overcome the recalcitrance of complex systems. Networks here refer to both people, or the number and type of contacts a person has, as well as business units within a supply chain. For Hargadon the network is preeminent: “The network shouldn’t support the technology; the technology should support the network.” In returning to the light bulb example, Edison was able to overcome the challenges posed by the gas light monopoly because, in understanding it as a system, he sought to replace it with a different system – a challenge he could accomplish only through partnering with a mix of different service providers. Edison knew the generator companies necessary to provide the juice, the telegraph companies essential to install the wiring, and the financiers required to bankroll the project. And, not incidentally, he also knew the customers and their expectations, and crafted his final product to fit their notions of convenience. In this way, Hargadon believes “the network is the innovation.” For the light bulb, the technology languished for years until its application was pursued through a paradigm of network dynamics.
Hargadon’s final point questioned the value of outright invention -the creation of something entirely original – compared to the easier path offered by integration, defined here as the combination of existing technologies into a new product or service. Creating something original is difficult, but the real challenge begins when the inventor seeks adoption of the technology in an entrenched industry. Integration has an easier road: If different aspects of the technology predate the new configuration, chances are aspects of the product have already been accepted by the system. Hargadon provided the case of hydrogen cars versus the hybrid engine. For the former, an entirely new system would need to take shape to service these vehicles -hydrogen depots, hydrogen stations, as well as massive changes to manufacturing plants- while in the case of the latter, the system was able to easily adopt the hybrid technology because it piggybacked on our existing petroleum-based infrastructure.
At its core, Hargadon’s lecture urged entrepreneurs to ask themselves the following question: Do you know who you need to know in order to be successful? Your success or failure will not be determined by the elegance of your invention, but by the earnestness with which you pursue connecting with every point along a system’s value chain. Development of a network should predate – or at least run in tandem to – any efforts expended on invention.
Professor Hargadon was hosted by Colorado State University as part of the Sustainable Enterprise Speaker Series administered by the College of Business. The speaker series gives students and the campus community an opportunity to learn from sustainability experts from around the globe. Colorado State University’s College of Business offers a unique 18-month master’s degree in Global Social and Sustainable Enterprise. The program focuses on entrepreneurial, sustainable approaches to solve global challenges in energy, agriculture, health, water, environmental management and economic development.
