(B) Being able to recover quickly from mistakes is key to survival for a start-up. A great vision is just the beginning of the story. And if the luck is not on the side of the entrepreneur, failure is never unfortunately far away. Entrepreneurs need always to balance their execution with the cash that they have and the time that they have.
Better Place, the Israeli start-up that raised $850 M to revolutionize the electric car industry filed for bankruptcy at the end of last month. Sad story for a company which should have succeeded!
Better Place pioneered the concept of battery-swapping stations. Electric batteries are expensive, and charging them takes time. But Better Place proposed instead to own the car batteries, and so the drivers could simply swap out their batteries in just a few minutes at a Better Place station. Two robots, underneath the car at a Better Place station, will swap the battery: one of them taking the old battery, and the other one putting the new battery. Nice engineering work!
The company had many obstacles: perfecting the technology, convincing the car manufacturers to OEM its product, and getting the required approvals to build its stations nationwide. Carlos Ghosn, the CEO of Renault and Nissan, was a strong evangelist of Better Place’s technology, and Renault was the only car manufacturer to equip one of its vehicles the Renault Fluence with Better Place’s battery. But that was obviously not enough to sustain the large capital investments required to build such a new ecosystem…Founding and visionary CEO Shai Agassi left in October last year, and the company had a number of recent challenging events, including a new CEO who left also major layoffs, and the shut-down of its operations in the US. In the last step, the company decided to refocus on its two initial markets: Israel and Denmark this year.
To better understand what went wrong at Better Place, three good articles that I found interesting:
• “Why a highly promising electric car start-up is failing” from Contributing Fortune Editor Marc Gunther
• “Don’t Draw the Wrong Lessons from Better Place’s Bust” from Professor Dartmouth College’s Tuck School of Business Ron Adner
• “Better Place’s Failure is Blow to Renault” from the Wall Street Journal.
Note 1: Since the writing of this article, Telsa has announced on June 20th a battery swap service for its Model S.
Note 2: The picture above is a Better Place station, and the one below is the Better Place robot in charge of swapping the battery.
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