Nature has been big news lately but there’s a fundamental disconnect in the way our innovation sector is being deployed when it comes to one of the largest challenges our world – and our economies — face.
The warnings have been apocalyptic as Australia played host to the Global Nature Positive Summit and in the leadup to Biodiversity COP 16, which began earlier this week in Colombia.
Half of the world’s GDP relies on natural ‘ecosystem services’ like clean water, healthy soil and pollinator insect colonies that are increasingly threatened or at risk of collapse.
As the world mobilises to address this threat there is a need for new thinking, fresh solutions, technological disruption and game-changing hardware, software and tools. Nature is the new climate – both an existential threat and an irresistible opportunity space.
It should be startup heaven.
But as political, business and environmental leaders lament change is not happening quickly enough, frustration builds. Because for the most part, it is not true that our innovation sector lacks the big ideas needed to accelerate the transition and achieve system-wide step changes.
What we have is a missing middle.
Our work at Pollination has often involved growing and scaling solutions companies in the climate and nature space. That’s true of our own company – which has grown from three people to a global advisory and investment business of over 200 people in just five years – but also in the startups we work with, sometimes invest in and help to scale and grow.
The typical pattern we see features large corporations wanting to act but facing a clear gap when it comes to solutions. For would-be first movers, there are few off-the-shelf answers ready to be deployed at the massive scale that’s required.
That is the situation we faced when working with one of Australia’s largest retailers, as they challenged us to advise on how to drive decarbonisation of their vast supply chain. What should they pay for, now and over time? When should they share the cost with other beneficiaries within the supply chain? What solutions did they need to access to make confident and credible claims, at the corporate and consumer product level?
A deep dive into Australia’s innovation sector reveals early-stage ventures that often have elegant solutions to the big scary corporate problems dominating boardroom discussion. What are they doing? Often stumbling around looking for finance from a venture capital pool that seems too small for the task at hand, too averse to risk, and too slow to progress opportunities into deployable business-ready solutions.
In Australia, the thing we are not yet good enough at is matching solutions innovators with corporate needs. If a large retail chain, airline or agribusiness badly needs a solution that only exists in the garage of a minnow it might as well not exist at all.
The speed and depth of the challenge mean we can’t just wait for the venture ecosystem to grind along. There is a vital place for venture funds, but there are other ways to get things done in a hurry too.
There is an important role for our time-honoured system of incubators and accelerators helping early-stage companies to explore and develop their ideas in a supported way.
But it’s not the only way.
There’s also an opportunity to fast-track some innovations and get them to where they are needed with speed and directness. The role I love to play more than anything is being a connector between the boardroom and the garage. This involves bringing an understanding of scalable commercial models that deliver wins on both sides — making innovators more investible (getting dollars to flow) while also adding shareholder value to the larger corporate (either via increased revenue and/or reduced cost and risk).
With a combination of convening power and commitment to catalytic collaboration, we can unlock more creative ways for those who need solutions to help commercialise, roll out and scale for those who can provide them.
Sometimes this might involve larger companies taking an equity stake or helping to secure finance. Just as often it involves both ends of the solutions pipeline working together to explore the shape of demand, making sure the solution is tailored for maximum effectiveness and the innovator is able to provide solutions at the scale that’s required.
Doing this successfully requires intermediaries who know the leaders of Australia’s largest companies, are talking with them, understand their needs and can be trusted to give advice and counsel. Those same people need to be plugged into the innovation ecosystem, talking with early-stage ventures and understanding not just what they have to offer, but what they need in order to deliver.
Here at the intersection of early-stage and mature, of tiny and large, is where real impact can happen quickly. That’s important because business as usual when it comes to climate and nature startups is likely to deliver results as usual. We know that’s not going to be fast enough or large enough to match the urgency and scale of demand.
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Megan Flynn is the chief growth and impact officer at climate and nature solutions firm Pollination.
