In the quest for a sustainable future, climate tech start-ups lead the way with innovative solutions to address the world’s most pressing environmental challenges. Yet, despite their noble aspirations, many start-ups face significant challenges in their early stages, where the risk of failure is high. From financial constraints to market access challenges, navigating the complex start-up landscape requires resilience, ingenuity, and support.
One of the key hurdles start-ups face is securing adequate funding to develop and scale their innovative solutions. Traditional financing channels tend to overlook these ventures due to perceived risks or unfamiliarity with relatively new business models. As a result, many promising start-ups find it hard to access the capital needed for research and development, technology infrastructure, and market expansion.
Despite the growing demand for sustainable products and services, start-ups often face challenges in accessing mainstream markets, which are crucial for validating their products in the initial stages. Established supply chains and consumer preferences may favour conventional products, making it difficult for these start-ups to gain traction and compete effectively. Additionally, forging meaningful collaborations with established corporations, industry players, and supply chain partners can be a significant hurdle due to their early-stage and commercially unproven business models. This limited market reach and growth potential highlights the need for early-stage market access.
This is where pilots emerge as an effective solution, allowing start-ups to demonstrate their solutions in real-world scenarios, validate their products, and build credibility. They serve as a crucial element in navigating the challenges mentioned above by providing a controlled environment to test products and services before a full-scale launch. Moreover, pilots can pave the way for broader collaborations and partnerships across industries, essential for scaling up innovative, sustainable solutions.
Here’s how pilots can help new companies attract capital, access markets, and prove their mettle:
1. Gaining Capital Support
Pilots allow start-ups to set up the necessary infrastructure needed to prove the viability of their products, which is often resource-intensive & capex-heavy. By getting access to paid pilots, start-ups can identify potential issues and troubleshoot ideas early without breaking the bank. This iterative process of failing, ideating, and restarting helps refine the product or service, making it more robust and market-ready.
2. Establishing Product-Market-Fit
The go-to-market (GTM) strategy is critical for any start-up’s success and is often determined at the early stages of product development. Pilots give the opportunity to take the GTM strategy from paper to implementation, in turn providing real-world feedback on the product-market fit. This third-party feedback is invaluable as it guides start-ups in fine-tuning their product to better meet market demands, which can, in turn, increase their chance of success when the product enters the market.
3. Reducing the Risk of Failures
By testing products and services on a smaller scale, pilots reduce the risk associated with full-scale launches. They provide a test bed to refine innovations and ensure that the final product meets quality standards and customer expectations. This staged approach mitigates the risk of large-scale failures, saving time and resources.
4. Driving Social Inclusion & Innovation
Pilots can drive social inclusion by addressing community-specific challenges and demonstrating how the product/solution benefits the larger society. Integrating marginalised communities, such as waste pickers, migrant workers, or manual scavengers, into the company’s operations also helps generate livelihoods for people from communities who need them the most.
Our Program Structure
Social Alpha, in partnership with H&M Foundation and Saamuhika Shakti, ran a program to support circular economy start-ups wherein 9 selected start-ups successfully implemented pilots in Bengaluru and other cities in India. They collectively hired 41 waste pickers and trained and upskilled them on the job. The 9 start-ups collectively diverted 39,39,695 kgs of waste from landfills and avoided 24,10,526 kgs of CO2e emissions while providing a 121% weighted average income increase for the hired waste pickers.
The program was designed to provide multiple offerings to start-ups, including financial support, knowledge services, mentorship and business advisory, go-to-market strategy development, and, most importantly, opportunities to pilot on the ground. Here are some examples of how a few affiliated start-ups leveraged the offerings to scale up their R&D efforts and enter new geographies, all while improving the livelihoods of waste pickers:
Ashaya Private Limited
Without™ (by Ashaya) is an advanced chemical recycling company that processes post-consumer multi-layered plastic (MLP) into recycled material to replace virgin plastic in conventional packaging applications. As part of its pilot, Ashaya increased the capacity of its research and development (R&D) lab from processing 20 kgs of MLP to 100 kgs of MLP per month. They also hired 8 informal waste pickers and enabled a 100% increase in their average monthly income.
Padcare Labs Private Limited
PadCare are is a waste-management and circular economy start-up that uses a proprietary chemo-mechanical process to recycle used sanitary pads to produce plastic and cellulose. Through this pilot, Padcare created steady and seamless menstrual waste management processes at 2 housing societies. It also conducted thorough training for the housekeeping staff and carried out awareness campaigns for residents through posters and pamphlets to encourage proper segregation and handing over of menstrual waste. Padcare employed 2 informal waste pickers to supervise pilot operations at the housing societies, enabling an 11% increase in their average income.
Reti Ecotech LLP
Reti Ecotech converts pre and post-consumer textile waste into sustainable construction materials for indoor applications such as acoustic panels. As part of the pilot, Reti incorporated fire resistance into their acoustic panels and completed testing for the compressive strength of textile bricks and the acoustic absorption coefficient of panels. Reti also worked with a hydraulics expert to design a customised hydraulic press and performed extensive user research to gauge the requirements and pain points of their potential customers. Reti employed 2 informal waste pickers to support pilot operations and enabled a 12% increase in their average income.
The winning start-ups successfully entered new markets, advanced their research, obtained third-party validation, and created livelihoods for informal waste pickers. Identifying the right initial customers for piloting solutions and securing supportive partners is crucial. The program facilitated this process, allowing start-ups the necessary space to iterate and establish their presence in the market.
With this context, Social Alpha, in partnership with H&M Foundation and Saamuhika Shakti, is back with Techtonic: Innovations for a Circular Economy, where we will provide 8 start-ups access to pilot opportunities, grant funding, GTM strategy and mentorship support. The focus area of these innovations spans sustainable consumption & production, waste collection & segregation efficiency and innovative recycling and resource recovery solutions. Selected start-ups will have a chance to refine their offerings, test their products, gather valuable feedback, and demonstrate their value proposition to potential investors and customers.
Click here to learn more about the program: https://www.socialalpha.org/techtonic-innovations-for-a-circular-economy/
Apply now!
– Written by Sukanya Dutta Gupta, Climate and Sustainability, Social Alpha