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Inder Sidhu

Inder Sidhu

Posted: August 11, 2010 08:04 PM

Would you pay $41,000 for an electric car that has a range of just 40 miles per charge?

That's what a lot of car pundits are wondering now that GM has put a price on its much anticipated Chevrolet Volt. But instead of focusing on the hefty price, critics are wondering if "range anxiety" will prompt consumers to buy something more traditional.

If only there were a solution to this 21st century condition.

Actually, there is: recharging stations where electric car owners can plug in their cars or swap out their batteries for replacements. The company behind these stations is Better Place, the brainchild of multimillionaire software entrepreneur Shai Agassi.

Unlike most companies working to provide environmentally friendly transportation, Better Place has focused its energies not on the electric vehicles themselves but on the oft-overlooked infrastructure they require. By addressing this part of the market, Agassi may wind up a hero to environmentalists and investors alike. Business leaders, too, may one day sing his praises, albeit for a different reason.

In addition to what he is doing, Agassi is worth studying for how he does things. Take the way his company leverages global resources to fast-forward its agenda. It's a very different approach than the norm.

Most technology startups set out to build advanced products for sophisticated customers in established countries. More often than not, these companies rely on a tightly knit team of engineers who focus on building the most refined solutions they can. Afterwards, they typically water down their innovations for sale to customers in emerging countries.

Agassi has dispensed with this model and is instead focused on building simple solutions that can be deployed anywhere around the world simultaneously. That's a daunting challenge that requires a high level of engineering horsepower and significant amount of local market knowledge. To achieve its goals, thus, Better Place is leveraging multiple inputs from around the world. That includes ideas from both established and emerging economies. Though just three years old, Better Place has already developed partnerships in places as diverse as the U.S., Japan, Denmark and China.

That's right: China.

While some view China primarily as a market in which to seek out new customers or source cheap labor, Better Place believes it is an ideal source of new inspiration. In April, Better Place signed an agreement with the Chery Automobile Co. of China to co-develop prototype vehicles and charging stations that could advance the work the company is doing in established nations.

To collect even more ideas on markets and innovations, Better Place has helped spur the creation of electric car enthusiasts groups in Eastern Europe, South America, India and Africa, too. As interest and momentum for electric vehicles builds in one part of the world, Better Place believes it will multiply in another--many times over.

By leveraging the best ideas from both the established and the emerging world, Agassi hopes to move quickly -- before the next wave of first-time car buyers choose gas- or diesel- powered vehicles. This is especially true in emerging countries such as China and India, where car ownership is below 5 percent but growing quickly.

Over the next five years, Chinese and Indian consumers are projected to buy as many as 70 million vehicles -- more than all of the cars that exist in the UK and Germany today. If Better Place and electric car makers can persuade just 25 percent of these consumers to choose an emission-free vehicle, they would effectively reduce carbon emissions by an amount equal to what all the cars in Canada produce annually.

This explains why Agassi and others are so passionate about overcoming "range anxiety." To truly make the world a better place, they believe you can't waste time debating about pursing ideas from this established market or engaging customers in that emerging one -- you have to commit to doing both.

Nothing less than the fate of the environment depends on it.

Inder Sidhu is the Senior Vice President of Strategy & Planning for Worldwide Operations at Cisco, and the author of Doing Both: How Cisco Captures Today's Profits and Drives Tomorrow's Growth. Follow Inder on Twitter at @indersidhu.

 
 
 

Follow Inder Sidhu on Twitter: www.twitter.com/indersidhu