Zero to One_ Notes on Startups, or How to Build the Future ( PDFDrive )

THE DURABILITY QUESTION
Every entrepreneur should plan to be the last mover in her particular market.
That starts with asking yourself: what will the world look like 10 and 20 years
from now, and how will my business fit in?
Few cleantech companies had a good answer. As a result, all their obituaries
resemble each other. A few months before it filed for bankruptcy in 2011,
Evergreen Solar explained its decision to close one of its U.S. factories:
Solar manufacturers in China have received considerable government and
financial support.… Although [our] production costs … are now below
originally planned levels and lower than most western manufacturers, they
are still much higher than those of our low cost competitors in China.
But it wasn’t until 2012 that the “blame China” chorus really exploded.
Discussing its bankruptcy filing, U.S. Department of Energy–backed Abound
Solar blamed “aggressive pricing actions from Chinese solar panel companies”
that “made it very difficult for an early stage startup company … to scale in
current market conditions.” When solar panel maker Energy Conversion Devices
failed in February 2012, it went beyond blaming China in a press release and
filed a $950 million lawsuit against three prominent Chinese solar manufacturers
—the same companies that Solyndra’s trustees in bankruptcy sued later that year
on the grounds of attempted monopolization, conspiracy, and predatory pricing.
But was competition from Chinese manufacturers really impossible to predict?
Cleantech entrepreneurs would have done well to rephrase the durability
question and ask: what will stop China from wiping out my business? Without
an answer, the result shouldn’t have come as a surprise.
Beyond the failure to anticipate competition in manufacturing the same green
products, cleantech embraced misguided assumptions about the energy market as
a whole. An industry premised on the supposed twilight of fossil fuels was
blindsided by the rise of fracking. In 2000, just 1.7% of America’s natural gas
came from fracked shale. Five years later, that figure had climbed to 4.1%.
Nevertheless, nobody in cleantech took this trend seriously: renewables were the
only way forward; fossil fuels couldn’t possibly get cheaper or cleaner in the
future. But they did. By 2013, shale gas accounted for 34% of America’s natural