Software defectors: Which climate tech sectors need you?

I worked in enterprise software for the majority of my career before shifting into climate tech. Nowadays, a lot of my software peeps are thinking about moving into climate tech and are asking about the specific sectors where their software skills will be most valuable. (In this blog, I am using “software” as a catch-all term that includes SaaS and other applications, PaaS, marketplaces, IoT platforms, data/analytics, AI and machine learning. )

First, I recommend checking out this pithy climate tech taxonomy published by David Rusenko. The taxonomy helps to clarify where software is a major component. 

The basic thing to keep in mind is that some climate sectors are focused on hardware/equipment (aka “hard tech”); deep science (aka “deep tech”) where the basic science is still being either discovered or proven out; or regulatory/policy frameworks. If you are trying to cost-effectively manufacture lithium-ion batteries for EVs or plant-based meat, software knowledge is not very useful. Software is also not relevant if you are trying to create an algae-based fuel, a thermal battery that stores energy in molten salt, or a new type of cement that requires much less energy to produce. Or if you are working to create regulatory frameworks and incentives to keep Brazilian farmers and ranchers from burning the Amazon forest to graze cattle or plant soybeans.

But there are many sectors and solutions where software is crucial. Based on what I have seen in the market and Rusenko’s taxonomy, here’s my take on where software people should go.

For engineers, solution architects, UX and product people where your technical expertise is important, these are the sectors where software experience is most sought. But keep in mind that the stage of company matters– engineers will generally be the earliest hires. Product managers, UX designers and solution architects come at a later stage. 

• Energy management: Software and systems used to deploy, measure, manage and optimize underlying renewable/green energy hardware technologies which are relatively mature themselves (e.g. solar, wind, batteries, EV chargers, heat pumps, smart thermostats, etc.) These hardware solutions have been proven out, but the key is to take them from the early adopter to the mass market stage. Deploying and managing them efficiently, at scale are still big challenges where software has a big role to play.

• Energy efficiency: Software for identifying and taking advantage of energy efficiency opportunities (e.g. controlling temperature in an office building to keep it comfortable while minimizing “dirty” energy usage; helping building managers decide which energy upgrades will save the most money, and connecting them with financing and contractors.)

• Carbon accounting and offset markets: Software for measuring and reporting carbon impact and emissions; and platforms and marketplaces for purchasing or trading carbon credits and offsets. 

• Climate intelligence: Software and sensor networks used to measure, forecast and model climate risks, such as extreme weather events, wildfires, etc.

• Green fintech: Fintech software focused on financing green/climate projects, companies and organizations.

For sales/business development and marketing folks, you can look at the above software-intensive sectors but you can cast a wider net.

• The climate sector needs people who know how to sell and market complex technical products in general, particularly those with enterprise go-to-market expertise (most of the climate tech opportunities are B2B, not B2C.) If you’re willing to do your homework and ramp up quickly on a new sector, you can bring your selling and marketing talents to hard tech as well as software companies.

• The more relevant factor to determine fit for you is the stage of the company. 

• Early stage startups whose product is still in ideation or proof-of-concept aren’t ready for full time sales, business development (BD) or marketing personnel yet. The founders are doing the selling themselves. 

• Once the company has a MVP (minimally viable product) and has sold a handful of customers, then they usually need a BD person to chase down more customers, and hopefully nail down a repeatable go-to-market play. This is definitely a role for a hunter/hustler. At this stage, they probably are relying on an agency or a couple contractors for marketing, and are unlikely to hire a marketer full-time. 

• Companies that are more mature and have sold their solution multiple times in a somewhat repeatable fashion are ready to hire more sales reps, account relationship managers and full-time marketers.

For finance, legal, HR and IT professionals, your skills are relatively applicable across sectors. I’d say find a sector you're passionate about and go for it, irrespective of whether it is software-focused or not. 

• The most relevant factor will be the stage of the company. Naturally, early stage companies are unlikely to hire full-time people for these roles. You can provide your services on a fractional basis to multiple startups, or find later stage startups or large companies who need full-time professionals in your functional area.

• Everyone should be prepared to do some homework to quickly get up to speed on the industry. (I’m a firm believer that every employee in a company should know the basics of the business, even if you are in an “admin” function.) Given the high level of regulation in some sectors, finance and legal professionals especially may need to do some serious reading to ramp up.

{A quick sidebar: while there is certainly great need for tech and business professionals in climate, there is an even larger need for skilled trades people including electricians, HVAC installers, equipment maintenance personnel, etc. We need millions of new people coming into these trades to make the IRL changes to our energy, building, manufacturing and other systems. While outside the scope of this blog, it’s worth mentioning.}

The climate tech space is extremely dynamic, so the sectors which are most software-intensive will inevitably change. So stay tuned in and do your homework!