A different perspective
I was on an introductory Zoom call with Alex Kosyakov, a founder of Natrion, an innovative lithium-ion battery tech startup from the USA. About 10 minutes into a conversation Alex casually mentioned that his solution, a special membrane enabling the production of higher energy density batteries, is a drop-in solution for existing lithium-ion battery manufacturers. This meant that any existing battery manufacturer could buy Alex’s product and immediately use it in their manufacturing process. By this point, I had met and talked with dozens of battery tech startups, but it was the first time I had heard the term - “drop-in solution.”
A couple of weeks later, I was listening to an interview with Yair Reem of Extantia Capital - a venture firm investing in scaling climate technologies. Explaining how Extantia evaluates clean tech scale-ups, he specifically mentioned that startups with a drop-in solution have a much higher chance of securing necessary investments. After hearing the term for a second time, I’ve started to look at the startups I worked with from a new perspective.
I realized that many successful startups offered drop-in solutions, even if they didn’t explicitly label them that way. Take my own experience, for example, the corporate startup I helped launch, Red Wind, a wind turbine manufacturer. After spending three years building it into a successful company, I had never thought of our technology or business model as a drop-in solution. But in hindsight, that’s exactly what it was.
For Red Wind, we didn’t develop a wind turbine technology from scratch. Instead, we looked around for existing designs of wind turbines, that would match our criteria, specifically, we had to be able to localize manufacturing of up to 80% of its components. When we found one, we looked hard into each component and checked whether there was available capacity, skills, and willingness to make this component in Russia. While in the end, several of our suppliers had to develop manufacturing of specific components like towers or copper plates for the generator, none of these products were particularly complex. In the end, all were successfully made in Russia.
This “drop-in” characteristic of component manufacturing proved invaluable when I pitched the project to our investor—the state nuclear energy corporation, Rosatom. The investment committee was particularly concerned about localization risks. To address these concerns, we demonstrated that most components required for localization were already being manufactured in Russia. For completely novel parts, like wind turbine blades, we proposed continuing to source them from overseas. While some new manufacturing lines had to be established and certain equipment needed to be acquired, we assured the committee that localizing wouldn’t involve developing entirely new products from scratch. These drop-in characteristics ultimately helped me secure the necessary funding for the factory.
So, how do you know you have a drop-in solution or how do you design a drop-in solution?
Let’s first start with a definition of a drop-in solution. A drop-in solution innovates on a single process or a piece of equipment, leaving the rest untouched. This single innovation however is sufficient to deliver 10x value for the customer.
The key question to ask when designing your product or service: How much does your solution require the target industry to change? The less disruption it causes, the faster your product can be adopted. If you’ve built something that plugs into existing systems with minimal effort, congratulations—you’ve created a drop-in solution, and these tend to scale far more rapidly than disruptive tech that requires overhauling infrastructure or retraining entire production teams.
The 4-step framework for drop-in solution
By analyzing my experience in wind turbine and lithium-ion cell manufacturing, the experience of the startups I’ve interviewed and worked with, and listening to investor’s opinions, I’ve developed my four-step framework for understanding if your product or service is a drop-in solution:
Step 1: Determine if you can leverage existing manufacturing to make your innovative product.
How easy is it to integrate your process or equipment into existing manufacturing or supply chains? Let’s look at the example of drop-in innovation in hard tech. Heliorec, a floating solar startup, designed a specialized mold for a "floater"—a key component on which solar panels are mounted when deployed on water. But here’s the smart bit: Heliorec doesn’t manufacture the floaters themselves. Instead, they supply the mold to existing manufacturers, who can produce the floaters using their current setup.
Other technologies require building entirely new supply chains. Take hydrogen for transport, for instance. First, clean, cheap power sources need to be developed. Next, electrolyzers, that make hydrogen from electricity, must be designed and manufactured. Then, you need specialized transport and storage vessels capable of handling hydrogen. And finally, you’ll need good quality fuel cells to convert hydrogen into electrical energy. Any technology in the hydrogen value chain depends on the successful development and scaling of multiple other technologies. If the industry you’re working in faces similar challenges, it will be difficult to create a drop-in solution.
Step 2. Determine if you can use existing equipment to offer innovative services or solutions.
Now let’s look at an example of process innovation. JR Energy Solution, a startup from Korea, built a dedicated lithium-ion electrode factory. Electrodes are the main components of lithium-ion batteries and the most difficult ones to make. There is zero innovation in JR’s manufacturing. What they do differently, is that they offer to make electrodes for anyone.
In the battery industry, IP for battery cells is closely guarded. Companies build gigafactories that run 24/7, dedicated to making their special type of chemistry. JR stands this model on its head by offering to make electrodes for anyone interested while not having its proprietary battery recipe. They provide manufacturing-as-a-service to those who need to make electrodes at a small scale - like innovative startups, established companies R&D, or small-volume clients.
Both examples, Heliorec and JR, demonstrate the successful application of the drop-in principle. Heliorec makes just the mold, and everything else is done by existing suppliers. JR provides novel services using state-of-the-art equipment. Sometimes, like in the case of JR, you don’t need to develop new technologies, but instead, you can develop novel applications, that are themselves a drop-in solution for existing processes in the value chain.
Step 3. Determine if you are the disruptor or in the disrupted space.
The drop-in solution is possible if there exists a value chain, into which the solution can be parachuted. Such a value chain usually takes a long time to establish, so the industry that you will be operating is likely to be well-established and not overly innovative. Think legacy automotive OEMs, transformers, oil, and gas.
Presenting a drop-in solution in such an industry can be a quick and easy win. However, by playing in the existing industry, you are vulnerable to the same risks as its incumbents - being disrupted by truly innovative startups that will put you out of business. That’s why I don’t see much point in innovating for the industries, that are clearly in their decline - ICE cars, oil and gas.
Now, there could be a big and innovative industry where your drop-in solution will be welcomed and will likely survive in the long term. Think of the lithium-ion battery, solar, wind, or emerging electric heating industry. These are fast-growing markets with established value chains. By offering drop-in solutions in these industries, you are riding the rising wave, helping new technologies scale and reduce costs. Being in the right industry is the best way you can make sure that your drop-in solution will not drop out!
Step 4. Evaluate how easy it is for a customer to “drop in” your solution.
Here is the deal. The ease of the drop-in rests on two factors: the ease of technical integration and the ease of regulatory integration. Technical integration is pretty straightforward. How easy would it be to bolt your technology onto existing factory lines? How much training would the factory workers need? Can existing equipment manufacturers make your device?
For example, 8inks is a startup revolutionizing electrode coating technology for lithium-ion batteries. Its innovation enables to increase in coating speed and allows to simultaneously coat several layers of different chemicals. This is highly valuable for battery manufacturers. 8inks innovation is a combination of “coating line upgrades”, allowing for simultaneous and high-speed coating of several layers of chemicals. 8inks business model is Hardware-as-a-Service (HaaS) allows 8inks customers to apply new technology with minimum risks and minimum time.
The regulatory integration is a little more complicated. If your drop-in solution requires prolonged certification, permitting, testing, and regulatory approval, then it will be highly problematic to “drop in”. First, consider whether there are any health and safety issues that you will have to manage. Corporate customers are far less likely to buy something, that is a health and safety hazard and hasn’t been tried/approved. Investors will not be very patient with protracted regulatory approval procedures, as every day spent on getting the paperwork in order means a day with no sales and operational costs financed out of investors’ pockets.
Drop-In Solutions—A Smarter Path to Scaling
Innovation isn’t just about flashy new technology; it’s about creating something valuable that people can adopt quickly and easily. That’s what makes the concept of a drop-in solution so powerful. If your product can integrate seamlessly into existing processes, systems, or infrastructure, you’ve drastically improved your chances of scaling successfully.
The framework I’ve outlined—leveraging existing manufacturing, offering innovative services, operating in the right industry, and ensuring ease of integration—provides a clear pathway for determining whether your product qualifies as a drop-in solution. If it does, you’re well on your way to overcoming some of the hardest challenges in scaling hardtech or climate tech startups.
In today’s competitive landscape, scaling up isn’t just about proving your technology works—it’s about ensuring that adoption is as frictionless as possible. The less you ask your customers to change, the faster they’ll embrace your solution. The road to success is rarely smooth, but with a drop-in approach, it can certainly be faster.