Do Green Start Up Tips Parallel General Start Up Tips?

Start ups bring something to the market that usually has never been successfully done before.  With such uncertainty, start ups bear higher risk than a tried and true company.  But what of green start ups?  The risk factor is still there, perhaps even greater.As green start ups come to market, one must ask, what differentiates a green or sustainable start up from any other start up (beside the green or sustainability factor)?  Are the tips to run a green start up the same as running a general start up?

The Los Angeles based Sustainable Business Council held a panel on this past Tuesday, Tools & Tips for Building a Sustainable Business. Panelists came from different parts of the business eco-system: venture capital, debt capital, law, marketing, government, and even education.

Regardless of what area the panelists represented, a common theme emerged: a successful green business needs to be a successful business, period.  The tools, tips, and tricks of the trade are similar, if not one and the same as any other business.

The old business adage of “who you know and who knows you,” rings true for green start ups.  Doug Roberts  of Thompson Hine LLP suggests to surround yourself with good people,  and people who have already “been there done that.”  It’s all about the network.

For instance, when you need funding your green business, venture capitalists and angels are inundated with requests from entrepreneurs across the board.  They have little bandwidth to examine every single executive summary or business plan that crosses there path.  A warm intro from someone in your network stands a better chance than a cold call.  You may have the next great green thing, but if you don’t have an “in,” you may be out of luck.

When you seek debt financing for a green business, Natalie Orta of the Small Business Administration urges that it is the same process as a traditional business. 1)  How much money do you need, 2) What will it be used for, 3) How will you pay it back.

Money is money.  Borrowing is borrowing.  Risk is risk.  Green or not.

Susan Emmer of Farmacy Agency points out the being green is not enough, that “green is secondary.”  Customers want something because there is a benefit to them.  A new green product has to be just as good or better than a current non-green product, at a competitive price.  X out “green” and “non-green” in the last sentence, and you are left with traditional start up business advice.  Being green does not necessarily give you an advantage.

What gives you the advantage is thinking of your green business as a business, exclamation mark! Yes, it is important to keep the green or sustainable aspect in your start up.  Goodness knows this world needs to move towards sustainable business models.  Thinking in terms of being a bona fide business may be a way to sustain your business beyond a start up.

Jonathan Mariano is an MBA candidate with the Presidio Graduate School in San Francisco, CA. His interests include the convergence between lean & green and pursuing free-market based sustainable solutions.

One response

  1. This is great advice for would be and current start ups in the greentech/cleantech space. One thing I would like to expand on is that it is also important to provide a method for measuring benefits. For instance, “our product/service can reduce your energy costs by an extra 10%” or “reduce your carbon emissions by 20%”. Then, track those numbers as well, if possible. You will clearly be able to illustrate ROI to potential customers/investors and it is a much easier sell. The added “green” benefits are icing on the cake.

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