Excerpted from Paul Lightfoot, CEO of hydrophonic greenhouse producer BrightFarms:

“To truly shake things up in a market, innovations also need new business models as well as what Christensen calls “value networks” – new supply chains, channels to market and so on. Without such support, established leaders can squash or co-opt new players, sometimes killing or at least sidelining their innovations along with them. Sometimes it can take a long time for new business models and value networks to evolve in support of a “new” technology.”

Take “solar power. The sun as a source of energy dates back to ancient times, of course. But its first potentially mainstream applications – most notably a satellite powered by a small solar cell – emerged in the 1950s.

Solar technology research and development has continued over the last 50-plus years, but solar languished as a commercially viable alternative to fossil fuel-based sources of energy because of low oil prices.

We did not make significant progress in the deployment of solar until it made business and economic sense. As the price of a kilowatt-hour of electricity rose, the price of solar in many markets suddenly made economic sense. Even then, it took a business model innovation – the power purchase agreement (PPA) – for rooftop solar to take off. The solar PPA enabled users to purchase solar-generated electricity as they consumed it, with no upfront cost of building a solar plant.”

Such a solution, using Produce Purchasing Agreements would also make sense for hydrophonics:

“At BrightFarms we are deploying business model innovation for produce that could disrupt the produce industry. Think of the model like a solar PPA, but for produce – a “produce purchase agreement”. A PPA between BrightFarms and major supermarkets disintermediates the old system.

Instead of transporting produce thousands of miles, we finance, build and manage (in partnership with local farmers) greenhouse farms to grow and sell produce in the same community.

So, instead of paying for transportation, (the average food item in the U.S. travels 1,500 miles), shoppers are paying for better produce. Plus, our shorter and simpler supply chain results in fresher, safer, longer-lasting, tastier and more nutritious produce that uses fewer pesticides and less water and land, and that mitigates contaminants and run-off.

Hydroponic greenhouse technology, like solar, has been here all along. We just needed the PPA business model as a disruptive innovation to unlock it’s potential.”