In the last post, I mentioned CitizenRE, a company that's looking to change the solar panel business model. The idea is that the company will install panels on your home for free, and then you pay the company a monthly fee. In the post, I called it vaporware, since the company doesn't have a product yet; it's really just a business model and (possibly) some investors, though that seems to be in doubt. What's crazy is that the company is growing like crazy (in a sense), because everyone wants in on it. What's more, the company has established an MLM-like scheme for selling the offering whereby people can sign up to be salespeople, and then sign up their friends and so forth. This may sound shady, but it actually doesn't sound too bad, since no money is exchanged until the panels are actually delivered. So it's not as though they're collecting a bunch of cash now with some wink-and-nod promise of delivery two years down the road. The thing is is that due to the appeal of the program and its selling methods, there are tons and tons of potential customers. The problem is that unlike, say, an online video, photovoltaic cells don't scale in a viral manner. There's just no way a single factory can ramp up production of a good like that in a way that will satisfy this kind of steep demand. This may be a problem that some companies would love to have, but it sounds like it's going to be a problem, as it's breeding a lot of frustration among salespeople and potential customers.
For more on CitizenRE, check out here and here.
The lesson, again, is that if you plan to grow in a viral manner, you should be sure to have a product that can actually be properly scaled up.
You make a very good point. Online videos and PV production are not the same. Yet, in creating the demand, Citizenre also creates an investment climate that kick-starts a solar industry previously unable able to move the adoption curve beyond the ultra-green and the ultra-rich.
Once plant #1 goes online, others will rapidly follow (like rabbits breeding). Quickly ramping up the production of PV planetwide will create affordable solar panels for residential, commercial, and government use--creating a bigger game for everyone, and expanding the uses of PV beyond its current installation markets.
The frustration you discuss was very real among a few salespeople who felt that the MLM model should be dropped and that they themselves should be hired directly to steer the company to success. No doubt, it's been a wild ride so far. Some people are watching how it will shake out, while others have vigorously jumped in and are building a massive customer base.
Posted by: Tony Cecala | May 22, 2007 at 12:55 PM
Alternatively, it's a scam backed by coal companies. They won't be able to deliver, the customers will be put off PV for life, Big Coal wins again.
Posted by: doctorpat | May 22, 2007 at 10:55 PM