Fire Your "Snowflake" Customers (and Other Lessons in Climate Sanity) (#220)
Weekly Brief: 3 decisions. 3 minutes.
Welcome to Climate CEOs — the leading newsletter for climate tech leaders navigating growth, capital, and sanity. Built from work with 300+ climate CEOs and 25 years of meditation practice.
This Week:
📊 Finance — Gross Margin: Quality > Percent
⚙️ Tools — Quiz: The 5 Types of Wealth
⛰️ Leadership — Motivation: Identity > Consequences
TL;DR:
Customized “snowflakes” kill valuation. Fire your most difficult customer.
Balance your 5 types of wealth so you don’t win the wrong game.
Lead via long-term identity, not just the fear of short-term consequences.
📊 Finance
Gross Margin: Quality > Percent
Which is better?
Gross margin of 60% that is unpredictable, project-based, and tied to personalities
Gross margin of 30% that is predictable, product-based, and tied to systems
Most investors would say #2.
If you require 12 footnotes, 9 appendix slides, and 6 calls to explain exceptions to gross margins across time and customers, then you might have a problem.
Investors lose interest, and valuation multiples will suffer.
They don’t value the “heroics” of a custom climate engineering project. They value the boredom of a repeatable low-carbon deployment.
Project (custom) = lower multiple
Product (scalable) = higher multiple
—
👉 So what?
This week’s action:
Audit your pipeline today. Identify which 20% of “snowflake” customers are eating 80% of your engineering time. Consider firing one to protect your long-term margins.
Next steps:
Ask your heads of engineering and business development to identify 10 ways to shift your go-to-market from a project-based to a product-based model.
⚙️ Tools
Quiz: The 5 Types of Wealth
If we only solve for financial wealth, we may just get it. And win the wrong game. The dog chases the car and gets a meal of metal.
Cheesy? Maybe.
But also true. And it helps us avoid founder burnout, divorce, and kids who hate us.
I recently read this book and used its quiz for a breakout discussion in our EFI climate CEO peer group meeting.
They include:
Time
Social
Mental
Physical
Financial
We manage what we measure. So measure more stuff that matters more.
—
👉 So what?
This week’s action:
Take the 5 Types of Wealth Quiz.
Next steps:
Track your score every quarter. Over time, ask: Do I like where I’m headed?
Do this with your teams in off-site meetings. Let them know that you care about them as humans, not just team members.
⛰️ Leadership
Motivation: Identity > Consequences
It’s hard to move a team when the “path” is a 10-year decarbonization goal.
That’s why you need to read this book:
Switch - How to Change Things When Change Is Hard — Chip and Dan Heath
They use a simple metaphor:
The Rider = rational (analytical brain)
The Elephant = emotional (instinctive brain)
The Path = environment and systems (clarity of the actions to be taken)
As you can imagine, #2 is more powerful than #1, despite the Rider’s attempt to use a bullhook to “control” the 8,000-pound elephant.
Consequences are about #1.
Based on fear.
Feels imposed.
“If we don’t achieve 50% YoY growth, we’ll have big engineering layoffs.”
Identity is about #2.
Based on belonging, values, and self-consistency.
Feels chosen.
“We are visionary builders helping customers tackle climate risk profitably.”
Are you managing by the “Runway” (Consequences) or by the “Mission” (Identity)?
Appeal to the Elephant, not the Rider. If your life (or company) is on the line, you know which will win.
—
👉 So what?
This week’s action:
Rewrite one internal update to focus on who your team is, not just what they might lose.
Next steps:
Ask your head of people to read the book (or my short summary) and suggest five ways to change internal messaging and incentives.
If this helped you, forward it to a CEO friend.
~ Chris
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