Leveraging financing as a creative go-to-market strategy

If you’re trying to bring a new climate technology to market, you’ll likely face a myriad of adoption hurdles: high upfront costs, unproven ROI, and a limited brand reputation. If you’re in a crowded space, these problems compound as you compete for the same early adopters.

To set your product apart, reduce the barrier to entry, and better align with how customers actually operate, consider leveraging customer financing as a primary go-to-market strategy.

In the second of our series in partnership with Unreasonable Impact, we sat down with Dr. Daniel Betts, co-founder and CEO of Blue Frontier, to discuss how you can use creative financing to meet customers where they are while maximizing the hidden value of your product.

The value arbitrage opportunity

Because your product is new, the market won’t immediately perceive its true value. Rather than wasting time and capital trying to convince them, you can take advantage of this gap and build a new business model around it. A common arbitrage opportunity in new products in the energy technology space is ROI vs Capital Cost. While you know that your product is able to reduce operating costs (energy savings or lower cost electricity production) in such a degree to create positive financial returns, your customer might not completely believe you or understand it. There is a difference in perceived product value and actual product value. While this is often discouraging, in fact it might be an opportunity to capture the value that is being discounted by your customer through financing and service offerings. 

For evidence of this strategy's success, look to the LED industry.  Today, many vendors offer LEDs via a "Lighting-as-a-Service" model. Rather than paying for bulbs upfront, commercial clients pay a monthly rate for lighting that is often lower than the amortized costs of owning and maintaining traditional incandescent systems. In doing so, the Lighting-as-a-Service company makes more money than if the lights were sold outright, while also increasing the size of their addressable market. 

Building owners will frequently replace perfectly functioning legacy systems—not just to save on CapEx, but to completely outsource and simplify their operations.

Leveraging arbitrage: the strategy

Understand the market's status quo
Start by exploring how the product is sold today. How are your competitors positioning themselves? What is the dominant business model? You might hear that a financing plan will "never work" in your industry. Don't be discouraged. That feedback highlights the exact friction points you can use to circumvent traditional thinking and jiu-jitsu your way into the market.

Map the buying triggers
Next, dig into what drives a customer's decision—what tips a "no" into a "yes." Audit and segment your market to understand what different customers care about. Look at other big capital expenditures your customers make and find out what factors made those decisions easy.

Align your financing with what your customers value
Now that you understand your customers' mindsets, you can tailor your financing approach accordingly:

• Remove the CapEx hurdle: Some customers want the lowest upfront cost possible and are averse to taking out traditional bank loans. For them, offering zero-cost installation with a monthly service contract removes the barrier to entry. It gets your foot in the door and creates an incredibly sticky relationship because they get to experience the full value of your product (like optimized energy storage or 100% uptime) without the upfront risk.
• Pivot from cost-saver to revenue-driver: A product that simply reduces costs can be a hard sell, but customers are usually willing to pay for a product that helps them make money. Find ways your financed product impacts how a building is used.
• Tie payments to customer success: Consider how your financing terms can solve a customer's cash-flow problem. For example, if you are selling a high-efficiency AC system to a commercial landlord, offer a financing structure where their payments only begin once a new tenant moves in and starts paying rent. By aligning your revenue with theirs, you show up as a risk-sharing partner, not just another vendor.

Capture value from multiple directions
Creative financing structures can also help you monetize your product beyond the initial customer. Ask yourself who else benefits from your product’s performance. If it optimizes grid energy use, perhaps the local utility will subsidize it, or the value creates new electrical capacity or sales opportunities to other businesses or service providers. If it makes a space significantly more comfortable, tenants might pay a premium. These are secondary value streams you can capture.

The caveats of financing 

Just because you can use financing as a go-to-market strategy doesn’t mean you should. It will only work if your product can actually be sold as a service—for instance, if you have the software capabilities to track, meter, and charge for energy usage.

You also need to ensure your buyers actually want a subscription model. A commercial real estate firm might love OpEx, but a manufacturing factory might strongly prefer CapEx for tax depreciation purposes. Doing your homework is key.

The practicalities of execution

If you decide to move forward, here is how to protect your business:

Acknowledge the new risk profile
When you use financing as a growth lever, you are no longer just selling hardware—you are building a credit business. Because you aren't getting paid upfront, you need to develop a credit function that can effectively underwrite clients and manage default risk.

Build in margin for error
The best way to mitigate this new financial risk is to ensure your recurring returns are robust. Price your service model to build a financial cushion. If a project goes wrong or a customer defaults, you need enough margin across your portfolio to absorb the hit without jeopardizing your core business.

Bound your downside risk
Make sure your contracts give you an easy out that prevents material damage to your company. For instance, if a customer defaults on their contract for your advanced AC system, structure the deal so that you only have to replace it with a cheap, conventional unit. Bounding your risk makes your business highly predictable, which enables you to bring in insurance companies or asset-backed lenders to finance the risk for you.

Design your product for refurbishment
For hardware-as-a-service to work, the math has to make sense when things fail. Your product needs to be easily recoverable, refurbishable, and redeployable. Build these outcomes into the physical design from day one—such as using inexpensive, replaceable outer casings so a redeployed unit looks brand new, while the expensive internals remain intact.

Dr. Daniel A. Betts is the Founder and CEO of Blue Frontier, Inc., a climate-technology company developing breakthrough ultra-efficient air-conditioning systems that dramatically reduce electricity use and peak grid demand. A mechanical engineer and thermal scientist with a Ph.D. in Mechanical Engineering and an MBA, he has spent more than two decades advancing innovative energy technologies across sectors including fuel cells, advanced batteries, distributed energy systems, and sustainable cooling. Prior to founding Blue Frontier, Dr. Betts held leadership roles in multiple energy-technology ventures focused on the commercialization of next-generation energy solutions. His work has earned international recognition, including the BloombergNEF Pioneer award and the R&D 100 Award, and Blue Frontier’s commercial system received the 2026 Product of the Year Award from the Air-Conditioning, Heating, and Refrigeration Institute (AHRI). His work has been featured in major media outlets including MIT Technology Review, Scientific American, Bloomberg, and The Wall Street Journal. Through his leadership, Dr. Betts is helping drive the global transition toward climate-friendly cooling and resilient energy systems.