The Missing Platform Perspective in Climate Tech?

This post continues my climate journey as a software systems thinker seeking my place in climate. See my earlier posts for more context on my journey and on systems thinking in climate.

Coming from the software technology world, one thing that’s really surprised me as I’ve gotten deeper into climate is how rare it is to see conversation about platforms in climate tech. Platforms are everywhere in software, yet don’t pop up very often in climate — instead I see dozens or hundreds of point solutions in nearly every climate-tech category — and I can’t help but feel that this gap represents a big missed opportunity. So in this post I’m going to explore what climate-tech platforms might look like, where I see some of the best platform opportunities, and what it might take to make some of these platforms successful.

First, what do I mean by a platform? In software, platforms are a classic way to gain high leverage. Platforms (in areas like clouds, databases, ML, payments, operating systems, and more) take common capabilities and provide them as services, abstracting away complexity and offering simple interfaces for others to use or build on. By allowing platform builders to focus on great capabilities and achieve economy of scale, and allowing platform users to focus on their differentiated value-adds on top, platforms enable the development of rich ecosystems and accelerate innovation on all sides. The most successful software platforms — like the tech giants of Google, Meta, and Amazon — have become so successful that they’ve become aggregators, dominating all sides of a multi-sided ecosystem and becoming embedded in our daily lives.

Platform opportunities in climate tech look a bit different because climate is not just a digital problem but one that’s deeply intertwined with the physical world. There are pure-play software platform opportunities, but also physical platform opportunities and hybrids that combine software and physical elements into one platform. Here are some areas where I see the most obvious opportunity for these different types of climate-tech platform:

• Carbon accounting and offsetting: [Software] platforms for measurement/accounting of carbon emissions, for reporting and insight-analytics to help reduce emissions, and for sourcing and utilizing carbon removal offsets.
• Distributed energy and smart grids: [Hybrid] software platforms for aggregating and enabling use of physical distributed energy storage and production — like home and EV batteries, solar, and demand response in the context of power grids.
• Sensing and control: [Hybrid] software platforms that integrate physical monitoring and controls with the goal of optimizing environmental footprint, for example in commercial & residential building management, industrial processes, and agriculture (where the “control” could include guiding transformation to regenerative agriculture, for example.
• Biological & chemical processes: [Physical] platforms defined by low/zero-carbon precursors, feedstocks, or biological/chemical transformation processes that can be used to produce a range of materials, fuels, foods (like alternative protein), etc. Includes examples like Ecovative’s mycelium platform and Epoch Biodesign’s enzyme platform.
• Reclaimed carbon: [Physical] platforms for managing reclaimed carbon: collecting it from various capture technologies/sources, managing its transformation to useful forms, and redistributing it to an ecosystem of storage and reuse technologies.

Platform examples

Given my background, I have the most to say about software and software-adjacent platforms, so let’s dive into the first two examples on the list above to explore what these platforms might look like.

In the carbon accounting and offsetting space, where the goal is to help producers measure, account for, reduce, report, and potentially offsets their carbon emissions, I see at least 3 software platform opportunities. First is on the measurement/accounting side, where the platform would provide common standards and data integration for an ecosystem of industry-, emissions-scope-, and domain-specific instrumentation & accounting. Second is on the offsetting side, where the platform would provide a marketplace for offsets along with services for offset quality verification. And third there is an opportunity for an uber-platform — and possibly even a market-dominating aggregator — that provides reporting/analysis, optimization, and action guidance, integrating the first two platforms into a combined ecosystem of specialist measurement providers, offset providers, and insight-analytics specialists.

And indeed we see activity in the market around these platform concepts. One of the most interesting players in the space is Stripe with its carbon removal platform; Stripe is clearly positioning itself as a platform and making a play to be the long-term aggregator and standardizer of an ecosystem of point-solution carbon removal technologies. There are also several companies trying to build the uber-platform (e.g. Watershed, Sinai, Patch, Persefoni, among others), though, perhaps due to early maturity of the market, they seem to be focusing more on providing all capabilities themselves vs. a true platform’s specialization on common infrastructure and focus on catalyzing/brokering the ecosystem. Over the longer term, I’d expect these companies to try to differentiate on being reporting/analysis/optimization platforms, opening up the other legs of their “platforms” to enable broader ecosystems.

Turning to distributed energy and smart grids, we find a hybrid space where the platform opportunity includes both software and physical components. Energy storage is a prime example: distributed home/commercial and EV batteries (and other emerging storage technologies), interconnected with the grid and managed and controlled by distributed software like that being developed by WeaveGrid, represent a hybrid platform for diverse applications. Today the ecosystem around this platform is nascent and fragmented, with proprietary storage technologies in separate silos, and applications focused only on the most obvious — like augmenting centralized generation during peak loads.

But it’s not hard to envision a future where a thriving ecosystem of storage technologies all integrate together and serve a wide variety of stored-energy applications across home and commercial uses, from grid augmentation to ubiquitous distributed vehicle charging to distributed production (e.g. of hydrogen, desalinated water, biomaterials) to distributed waste management to industrial/commercial heat.

Key to this scaled future will be the platform: interfaces at the hardware/physical level that abstract away the details of connecting different storage and use technologies, standardizing storage and access; software that mediates and manages energy use and storage, and integrates with the grid as well as centralized and distributed generation to optimize the system as a whole. The platform will allow ecosystem scaling and effective specialization — and will be critical to capture new accelerants like California’s recent move to ban gas vehicle sales by 2035, which will make millions of new EV batteries available for connection to this platform.

Creating successful climate platforms

Platform opportunities are not always easy to harness. A successful platform technology in climate has to get several things right — all of which require careful systems thinking:

• Boundaries & interfaces have to be placed at the right points so that each player in the platform ecosystem has enough room to innovate and create a successful value proposition, while keeping enough commonality across players to get the platform leverage. For example, an energy-storage platform that defined its storage interface by prescribing chemical-battery-cell-level characteristics has the wrong boundaries, since it over-constrains potential storage providers; a better interface would be at an electrical interconnect level. On the software side, getting boundaries right typically means careful API and data schema design, e.g. for describing carbon offset characteristics in an offset marketplace.
• Platform go-to-market needs explicit, strategic investment in order to take a nascent ecosystem from bootstrap to scaled. Early ecosystem players/partners must be carefully chosen to ensure the platform can deliver end-to-end value in its early days, otherwise it won’t gain critical early adopters. For example, one can’t build a successful carbon reporting & offsetting platform without viable and desirable offsets or industry-specific accounting models. Once bootstrapped, achieving greater scale often comes from seeing and harnessing tailwinds in systems forces like policy changes or capital availability — e.g. by strategically recruiting new ecosystem partners to capture those tailwinds and expand the platform’s applicability. But this also must be done carefully, balancing competition and commoditization forces to ensure partners have enough clear space to differentiate and succeed. For example, the aforementioned CA gas-car ban is a tailwind with potential to fuel rapid scale of distributed-energy-storage platforms, and the IRA offers potential scaling acceleration for many climate platform areas.
• Economics of scale have to be in place for a platform to succeed; platforms tend not to be successful if it’s cheaper or easier to scale vertically-integrated point solutions than a platform-led ecosystem. This can be particularly challenging for physical platforms, where early players have to take the risk of building generalized, scaled physical infrastructure in the anticipation of a future ecosystem — e.g. building out generalized materials-feedstock capabilities in advance of robust applications of those feedstocks. In physical worlds, platforms are thus more likely to require innovation in capital models that can de-risk up-front investment, or are likely relegated to a phase 2 strategy as a way of generalizing a successful first product built in a non-platform, vertically-integrated way. (In software it’s easier to start from a platform on day 1, since the costs are far lower and scale tends to be cheap or free.)

Despite these challenges, I think it’s clear that there is a ton of unexplored territory for platforms in many areas of the climate solution space. And given platforms’ proven ability to accelerate technology — and to potentially create transformative aggregator effects in some areas — I think this is a big opportunity for smart systems thinkers to make an impact in climate, and an area that deserves far more attention!

Are you working on a platform play in climate? Do you see a platform opportunity that I’ve missed? I’d love to hear from you! Comment here or find me at abbrown at gmail.com.