Scaling businesses sustainably

Four massive selection pressures and existential threats are looming large on the horizon for the HVAC industry, namely:  

1. Skills shortage. in part because trades as a career choice is undervalued by many families in a society where disdain for the undereducated is the last acceptable prejudice. Many companies in the HVAC industry struggle with recruiting, retaining and train a generation of talent that can lead the industry into meeting the challenges of today and tomorrow.
2. Commoditization of HVAC, where HVAC is sold on price and not on value or other distinguishing attributes. When the only thing left to differentiate between one contractor from another or one HVAC system from another is price, margins in the industry shrink. This sets up a race to the bottom where everyone - including the consumer - loses.
3. Biz model whiplash from programs and funding that ramps up quickly and immediately drops off precipitously. Nate calls this the bell curve cliff. While funding programs can help with technical training and upskilling for contractors, the whiplash from start-stop funding programs makes it difficult for HVAC contractors to scale and grow their business in a sustained and sustainable way.
4. Cultural decline of craftmanship, tinkering, maintenance and upkeep. Very few households invest in regular maintenance and upkeep of their heating and cooling system. This leads to the double humpback camel problem, where the HVAC industry makes most of its revenue during the 2 warmest and 2 coldest months of the year when most systems break down. And in recent years the peaks of this camel are only getting steeper. This sets a frenetic pace for the industry, and a decline in workmanship by contractors and a undervaluing of workmanship by the homeowners - which feeds into the other horsemen of the HVACoplyse - commoditization and Walmartization of HVAC industry.

Taken together, an important question for fellow Boundary Spanners: What happens when you layer on decarbonization on top of an industry that is already grappling with the existential threat of the 4 Horsemen of the HVAColypse? How can policy makers and HVAC professionals work together to help the industry confront these challenges without imploding under the additional mandate of decarbonization? 

Boundary Spanners is a podcast and a blog on residential decarbonization by Nate (@energysmartohio), the “blue-collar” CEO of HVAC 2.0 and Abhi (@akantamn), a “white-collar” policy researcher based in Canada. Nate and Abhi are taking tacit (unspoken) knowledge in the white and blue collar worlds and making it explicit (out loud) for residential decarbonization. Follow Boundary Spanners on Youtube (show), Substack (blog) or wherever you get your favorite podcasts from.