Working Smart: Smartcool
Innovation doesn’t always mean reinventing the wheel.
CLEAN TECHNOLOGY has been touted as B.C.’s great industrial hope, but most B.C. companies involved in it are focused on developing alternatives to existing energy systems. This demands a long vision, much capital for scientific experimentation, long leaps over regulatory hurdles and extensive education of the market.
One B.C. company sidestepped all those problems by forming an alternative strategy. Instead of developing complex technology that would replace current energy systems, Smartcool Systems Inc. distributes simple technology that helps conserve energy in cooling systems and therefore cuts user costs.
THE PROBLEM
In 2003 Smartcool CEO George Burnes, a veteran of other worldwide technology distribution companies, recognized that threats to the planet from energy production meant that clean tech would soon become a dominant world industry. But how could he get a product to market quickly and avoid the long and expensive development times so common to the industry?
THE SOLUTION
Reasoning that an energy conservation system would be the quickest way to create a short-term opportunity, Burnes began examining various target areas such as lighting and heating. Eventually, he discovered a proprietary software technology invented in Australia in 1986 that makes cooling systems far more efficient. It could produce a quick return on investment for customers, and quick revenue streams for Smartcool.
The technology is simple in that it controls how energy-hogging compressors in cooling systems work, but is complex in how it does it. Compressors suck in outside air and cool it. When a system is switched on and “ordered” to cool outside air, it operates at maximum efficiency because it is working harder to cool from a higher temperature. But as conditioned space temperatures lower, that efficiency decreases dramatically because the compressor is working just as hard to cool smaller quantities of air. Smartcool’s system optimizes the amount of warmer air it sucks in during the operating cycle, and this reduces running time, producing energy savings of as much as 30 per cent.
The developer of the technology had no interest in distributing it on a large scale, so Burnes licensed it for North America, launched Smartcool on the TSX to raise capital and eventually bought the inventor company. Meanwhile, Smartcool distributed the product by establishing corporate hubs in Asia, Europe and Africa, and the Middle East – areas where refrigeration is badly needed but power is expensive.
In each hub, Smartcool also found local operations that distribute and maintain cooling systems for large organizations. It worked with these operations to identify technical needs and then allied with them to distribute the technology to their own customers. Simply, it used the existing infrastructure to develop its own distribution system quickly.
This made sense from a cost point of view because it was simply impossible for Smartcool to develop its own distribution chain. It would also have put Smartcool into fierce competition with local suppliers, who were far more familiar with the local markets. Better, Burnes decided, to collaborate with locals so that everyone grew. As a result, Smartcool is now distributing its technology in 35 countries.
LESSONS
• Find your own focus. Conventional thinking can form a trap in which the familiar blocks out everything else.
• Collaborate to grow fast. You’ll get much farther co-operating with existing structures than by trying to do your own infrastructure.
• Feed your partners. They will make or break your growth plan, so help them succeed.
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