(cross posted from http://blog.cleantech.com)

It is becoming a common refrain across many cleantech sectors to lament the slow speed of technology adoption by large, enterprise customers.  Companies developing new hardware and software for the smart grid must contend with the buying cycles of large, regulated utilities.  Those targeting innovation in the water sector face an uphill battle to get installed in facilities owned by municipalities.  Even those building next generation energy efficiency products for buildings or industrial facilities must tackle traditional, commercial procurement processes.  Sales cycles are long, pilots can last for months if not years, and decision-making can be by multiple committees.

Having experience as an operating experience in both the telecom equipment and enterprise software world, I can readily sympathize with the pain.  I try to discuss the nature of this slow adoption cycle as much as I can with cleantech entrepreneurs and look for parallels from other industries.  Ben Horowitz, a successful entrepreneur and now an active venture capitalist in the software and internet services world, had an insightful piece last week, via TechCrunch, on the nature of enterprise sales that is directly applicable to the cleantech sector as well.  Ben writes of three major hurdles:

• Big Companies Don’t Have Credit Cards – To paraphrase, there are rationale reasons why employees of large, public entities are not given much purchasing authority.
• Large Enterprises Like Their Old Products – Big companies fall in love with their widely deployed systems no matter how convoluted.  Integration becomes the only path to success for new vendors.
• People in Big Companies Work to Live – Big company execs, by and large, are not looking to rock the boat.  The efficiency gains from a new technology are not worth the risk of simple, satisfactory performance.

Perhaps most presciently Ben writes, “the order of adoption now follows decision-making speed rather than deep pockets.”

All of these lessons are valuable for cleantech firms looking to break into large utilities, enterprise customers, and municipalities.  There are reasons – both good and bad, rationale and irrational – for the slow speed of technology adoption by large customers.  The art of achieving momentum may not be about cracking the code of the industry’s top 5 accounts, but rather finding the path of least resistance.

One of my favorite case studies of succeeding by eliminating sales friction is OPower.  If measured by real adoption, the company is arguably been the most successful startup in the home energy management space and has become so by heeding many of Ben’s lessons from above.  They developed a billing analytics product that (a) integrated well with existing utility models and (b) involved little to no risk on the part of utility decision makers – no one was going to lose his/her job for installing the service.  They proceeded to successfully sell into a variety of mid-size utilities following the speed of decision making rather than the deepest pockets.  With significant momentum, they are now finding themselves well positioned to win business from the largest utilities in the world and are rumored to be PG&E’s recent selection for a large, home energy management deployment.

The very nature of the sectors that most clean technology hopes to transform - energy, water, waste, transportation, etc. – makes selling to large, enterprise customers inescapable.  With limited capital and runway, early stage companies would be wise to heed Ben’s advice, study OPower, and learn quickly how to find the cracks in the enterprise walls.