I couldn't help but notice the recent unveiling of the "Bloom Box," and the claims from its financial backers that it represents a "disruptive" play in the energy space. I asked the member of our team who knows the most about cleantech — manager Josh Suskewicz — to give his view on Bloom. Over to Josh...
Bloom Energy finally revealed its Bloom Box to the public last week to great fanfare. The much-hyped product is a fuel cell that produces electricity from any fuel source and can also store it like a battery. None other than Internet investor extraordinaire John Doerr, a Bloom board member, said the company was the next Google — and he would know, since he was behind the first Google. John Donahoe, the CEO of eBay, called it "disruptive."
Detractors, on the other hand, are quick to point out that the Bloom Box is just the latest fuel cell to get the public all excited. Fuel cells have been around for a long time but have yet to find mainstream applications (as the stock performances of former tech darlings Fuel Cell Energy and Ballard Power attest.) What makes Bloom different? Is it truly disruptive?
First of all, whether or not Bloom, or any company, is disruptive is more than just semantics; it matters because disruptive strategies unfold in particular ways: they start at the low end of an existing market or in an entirely new one; they find a way to make money that existing companies can't or choose not to match; and from that perch proceed to upend suddenly obsolete incumbents. Entrants who find themselves in conditions ripe for disruption and stick to the disruptive path have a great chance of success.
A disruptive approach contrasts to what we call a sustaining strategy, which is essentially trying to leapfrog existing competitors with an improved offering. The best hope for an entrant embarking on this path is to "build to flip" — to create a business that looks like an attractive acquisition target to market leaders.
Of course, as Scott Anthony noted a few posts back in this space, the question of whether or not something is disruptive most often masks the real question, which is, Are we dealing with a game-changing opportunity? That question aside, understanding the implications of disruptive innovation helps companies map out how to achieve game-changing success — and helps us assess the potential of an innovation like the Bloom Box.
So, back to the question: is Bloom truly disruptive? It might be too early to tell, though Bloom certainly has disruptive potential. Let's examine some of its claims.
Read the rest at Scott's Havard Management blog, Innovation Insights.
