Five lessons for smart companies from Better Place’s innovation pothole: Walters

The leaders of Better Place have a big dream, but it is no longer shared by Australian entrepreneur Evan Thornley.

Thornley resigned this week, as reported in our sister publication Crikey, after three months as CEO of the Silicon Valley-based global company, which has created a switchable battery for electric cars and a network of automated “battery switch stations”. Thornley led the Australian operation of Better Place for the five years from its inception here, controversially leaving a career as a Victorian Labor politician to do so.

The best leaders have big dreams – a vision of a better world – but not every dream ends in a successful reality. Creel Price, who founded a business with $5000 at age 25 and sold it 10 years later for $109 million, says timing plays a big part in achieving the scale that brings global success.

“Timing is not everything, but there are a lot of entrepreneurs who get the timing wrong,” Price tells LeadingCompany. “Better Place sounds like a business that is ahead of its time and I think it still is in Australia.”

Thornley’s departure is not the end of Better Place globally – a statement from the company says global expansion will continue but after consolidation in markets such as Israel and Denmark where electric “cars are on the road”. The company has 130 charge points in Hawaii, a battery switch station in Denmark, 21 in Israel and two in Canberra, Australia.

But the company is facing a big strategic challenge to its business model. And as it does so, the local Australian operations are likely to be scaled back or closed, against the wishes of Thornley.

In an email obtained by Crikey, Thornley tells his staff about the leadership dispute and his reasons for stepping aside:

“As our company continues its rapid transformation to commercial operation, it is essential that we are unified at every level on what we are seeking to achieve and how we intend to achieve it. In recent times, strong and honestly-held differences have emerged at the most senior levels of the company about how we best take the company forward. I do not wish to be a barrier to that unity and so will step down and let the company transition to new leadership.”

For leaders, there are many lessons in innovation in the story of Better Place so far.

Be the follower, not the leader

The first-mover advantage is not what it is cracked up to be. With disruptive innovations, companies spend a lot of money educating the market, says Price.

“I’m not a huge believer in being first to market. Companies spend a huge amount of money educating the market and that sends companies broke before there is enough money in the market to make a business profitable.

“The obvious example is Google: it was not the first search engine, so it was easier for them to simply do it better and faster. I’m not the first to say be at the leading edge but not the bleeding edge.”

Focus on the problem and its solution, not the technology

Better Place is about making the electric car viable. The problem is that electric cars are not the only solution to the problem of limited oil supplies and out-of-control greenhouse gas emissions.

Paul Harrison, senior lecturer, Graduate School of Business at Deakin University, says:

“Consumers are only ever looking for a solution to their problem, and the large majority of people don’t see a problem with petrol-fuelled cars. They are becoming more and more efficient. This is a marketing myopia; we teach people to ask: what problems are you solving that aren’t solved elsewhere? Or are you so enamoured with your idea you are missing the problem?”

Price, who has recently returned from Silicon Valley, says electric car use is widespread and charging stations are everywhere – as opposed to battery switch stations.

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