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Business model geothermal, do we need outside inspiration?

Business model geothermal, do we need outside inspiration? Business Model Canvas Presentation, Alexander Osterwalder, Iceland 2013
Alexander Richter 6 May 2013

Does the geothermal industry need a new business model and should we look at different industries for inspiration?

Professionally, we have all looked at other people for inspiration be it for personal development, career moves, how to be more productive etc. We always compare ourselves to others to see where and how we can improve things to become more successful, productive or simply more competitive.

In my work on ThinkGeoEnergy, I have always been driven by my motivation to create things I would have liked to see and have at my disposal, but also in the way on how these things are presented and designed.

As part of this work I have also looked at other industries to see if I can find inspiration on how to improve things or simply do them completely different.

In this constant battle, I have come across a number of great tools and books. Probably the most inspirational has been the book “Business Model Generation“. The book looks not at how to write business plans, but how to look at your business model, essentially your value proposition as a company for the – likely different – customer groups. The business model canvas, described in detail in the book, provides a tool to evaluate your company’s business model, revamp it or possible completely rebuild it.

Last week I attended a presentation with the author of the book, Alexander Osterwalder and had the privilege to meet him the day after. He spoke to a group of 1,000 people at an event made possible by one of Iceland’s banks. While most of the people attending were quite young, there was a wide range of people from all kinds of professions, industries and trades.

A hugely inspirational presentation and event.

As part of the presentation, Alexander also talked about a new book he is writing on that will focus on the value proposition and tools to evaluate this. For some details on the Value Proposition Canvas, see his article on his blog.

So what does this have to do with geothermal and the geothermal industry and your business? Well it is quite easy. For the past few years I have been promoting the fact that we as an industry should re-evaluate our business model. Our industry is a collection of different business models, be it as developers, suppliers, academics, in my case media and service provider, drilling services etc.

All have in common that many elements of our business models are tied in with the general role, perception and value proposition of geothermal energy in general.

I think a good example is Ormat Technologies. Their value proposition is to be a provider of technology (supplier) with customers being developers, but also being a developer with customers being utilities (and in this case also utilizing its own drilling rigs). Both require different sets of activities and resources, but also promotional efforts. In its activities, Ormat understood that in order to be successful it needs to help promote geothermal energy and has therefore been on the forefront of promoting and explaining geothermal energy not only to the general public, but also to governments. The company has created a business model for itself that has been successful to establish itself as among the leading geothermal companies in the world.

Is this a model for other companies? Maybe, but times have changed and for companies trying to establish a similar business model would need some long breath to get that far.

Other companies in geothermal have not been as successful and there are various reasons for that. Maybe the have tried to be more than they could have been, or tried to  do too much at once. In any case it showed that their business model did not work.

With this in mind, I have thought about if our industry should consider a look at its business model(s) to see if we can tweak or even rethink how we do business.

Early on, I considered ThinkGeoEnergy a startup and without examples for a media company in geothermal, I looked elsewhere for inspiration for my business model.

So I joined a group here in Iceland that has established itself as a think tank on creating and fostering an entrepreneurial ecosystem in Iceland. The Startup Iceland team is now holding its second annual conference and there is a set of high profile speakers with venture capitalists, private investors, technology entrepreneurs, and more.

While there is some kind of technology focus to be found among speakers and participants, it has been hugely inspiring to listen to different stories and challenges of entrepreneurs and investors from all kinds of industries.. From my perspective there were many examples that could be quite valuable for looking at how we as an industry can do things differently.

This applies to service companies, suppliers, investors etc … I have been working with some groups on looking at their business model and found it quite interesting to look beyond our industry to see how companies have been able to tweak their business model to deal with challenging times.

I have some rather strong opinions and ideas, but would love to start a discussion to see how we as an industry can move forward and in the process create successful business models for our companies.

I have opened a discussion thread on the LinkedIn group of ThinkGeoEnergy, to join the discussion click here.