Ron Adner’s response to my “Better Place” question
As promised, I asked Ron what he thought about A Better Place, a company that I'm very struck with that has the potential to transform our relationship with energy. Turns out he'd given them a lot of thought already – here's what he said:
To date, the electric car has been a poster child for ecosystem mismanagement. We’ve seen a lot of great innovation in the individual pieces: improved batteries, cars, charge spot deployments, etc. But what has been desperately lacking is a strategy for pulling them together on terms that make sense to mainstream buyers.
Better Place breaks the mold in this regard. They are doing something so interesting that I dedicated an entire chapter (chapter 7) of my book, The Wide Lens (www.TheWideLensBook.com) to exploring their strategy.
The power of the Better Place model is that that they are not trying to innovate the electric car, but rather to innovate the ecosystem around the car.
Two broad elements stand out. First is the way in which they have completely reconfigured the e-car ecosystem to overcome the six key problems that undermine the traditional approach to the electric car in the mass market. (see http://articles.businessinsider.com/2012-03-23/news/31227987_1_electric-cars-blind-spot-nissan-leaf) By applying what is essentially a mobile telephone operator model to the context of automobiles, selling multi year contracts based on Note, however, that this entails controlling the urge to grow – first achieving commercial success in the early markets, and only then moving forward to pursue the bigger fish. That takes a lot of discipline.
In the language of ecosystems, Israel and Denmark offer Better Place the opportunity to establish their minimum viable footprint. And from this position, they can leverage ecosystem carryover to accelerate their success in adjacent markets.
Their success is not guaranteed. But they have a better shot than any other player on the field.