How often have you heard the question or command ‘What’s the business case for it?’ for a new to the world or disruptive innovation. The fact of the matter is that, for almost every new to the world innovation, there are thousands of possible business cases, some more plausible than others.

Over 99% of the B-cases you’ve seen have the end in mind and are trying to prove a case. They start with the end in mind and work backwards. In addition, over 99% of the B-cases only do a partial job, they limit the analysis to the target and generally ignore the ecosystem. To say it another way, the externalities of most B-cases are greater than the internal components and overwhelm them.

B-cases are fine when you are in a situation of relative certainty. An example is determining the value of a 10% increase in fuel economy where there is a clear economic outcome. They are terrible in situations of non-linear complexity. These are complex systems with a number of ‘moving parts’, some of which don’t always behave rationally. In other words, most situations.

One example is the Ethanol fuel craze. There has been controversy for years about whether Ethanol really is more energy efficient when taken from a complete systems perspective. Recently, several people have developed complete systems model that seems to indicate that Ethanol is indeed energy positive, if it’s cellulose ethanol rather than corn-based ethanol. But wait! Suddenly there is the unexpected issue of pump corrosion! It turns out that ethanol is more corrosive than gas and current pumps deteriorate. An unintended consequence that changes the equation. More serious however is something that doesn’t occur in ANY model of Ethanol economics. That is consumer behavior. What will happen when a person realizes that they are only getting 250 miles per fill-up rather than the 300+ miles they got before. What happens the next time they pull up to the E85 pump with Ethanol and Gas right next to each other. Are they going to remember that they just filled up not too long ago with the Ethanol and this time choose the gasoline? Maybe or maybe not, it’s hard to say. But that’s just the point. No one has looked into this. There is a non-zero probability that E85 will be dead in the water not due to the economics or technology but due solely to consumer behavior.

Another example of the misuse of the Business Case is fuel cells. There are many ‘models’ of the fuel cell economy that incorporate varying degrees of complexity and completeness. The most limited ones look at fuel cells in vehicles. The more sophisticated ones encompass the whole hydrogen ecosystem, from production to storage, transport and distribution – the MOST difficult parts of the fuel cell economy. Which of them though, accommodate a disruption such as the emergence of a battery technology that has 2-3 times the energy density of today’s most advanced batteries and that can be filled up in the time it takes to refuel a gas tank? Impossible you say? How is it more impossible than economical hydrogen production and storage? Take a look at companies like EEStor in Texas with their ultracap technology and conclude that an all electric car that can be filled ‘at the pump’ (or at home) in a matter of minutes and drive 300 miles and go from 0 to 60 in 6 seconds is any more impossible than fuel cells. What’s the business case for fuel cells in this case?

The point is that Business Cases for emerging technologies are virtually useless. They suffer from the following deficiencies:

1. They are always too simplistic – they don’t deal with the complex non-linearities and unexpected
2. They are way too specific – their precision exceeds their accuracy
3. They try to prove an outcome rather than exploring all possible outcomes
4. They are way too narrow – presenting one or two alternatives rather than thousands
5. They are way too premature.