In 2016 I convinced Rosatom, the Russian state nuclear corporation, to invest $1B in wind energy and wind turbine manufacturing. Why did they agree? Let's break it down:
1. Significant Margins from Energy Generation: The margins were substantial enough to cover all possible losses and penalties, even in a worst-case scenario.
2. Existing Industrial Base in Rosatom: The company had some confidence in its ability to handle wind turbine manufacturing, as it was currently manufacturing nuclear reactor cores. While we didn’t end up relying on this expertise at all, it provided a necessary connection to utilizing existing assets.
3. Corporate Target for Diversifying Income: Rosatom had a strategic goal to increase revenue from non-nuclear businesses. Wind energy fit this objective perfectly.
Key Takeaways
Avoiding Risks: Corporations want to invest in ventures that are highly profitable, matching or exceeding the profit margins of their current products.
Leveraging Existing Assets: It's all about how to squeeze extra dollars from existing assets. Demonstrating how the project ties into the corporation’s operations is crucial, but be cautious. This connection can hinder or kill the project if followed too rigidly. Show the connection, but leave yourself a way out.
Hitting Where It Hurts: The project goals must align with the corporation’s overarching strategic aims. This alignment increases the likelihood of approval from top executives, whether it’s the CEO or the chairman of the board.
Conclusion
Proving a business case to a huge corporation like Rosatom isn’t just about numbers or technology. It’s about strategy, risk management, and aligning with broader corporate goals. When pitching your project, make sure to highlight significant margins, leverage existing assets, and align with the company’s strategic objectives. This approach is key to securing corporate investment.