The end is nigh for Nau

As the US “cradle-to-cradle” eco clothing manufacturer and retailer Nau forecloses it is worth reflecting on what happened and what other pioneers in sustainable innovation can learn.

Like many ventures unable to raise new funds, Nau blames the risk-averse financial markets for its failure but the truth is their failing is largely their own. As Business Week made clear in its May 07 profile, the venture was always high risk given the breadth of what it was trying to do. As though developing truly environmentally friendly textiles and turning them into desirable clothes was not enough of a challenge, for some reason they also needed to experiment with retail concepts involving “web fronts” and kiosks.

Why was this? Could they not find an existing retail channel to market that addressed their eco-urban customers? Or was the channel model essential to yielding the exceptionally high gross margins of 70+% they targeted? And what was the true value proposition – the textile, the clothes or the way they were retailed?

So What?

Nau would make an interesting case study to help other budding Sustainability Innovators to avoid their mistakes and possible “sustainable bubble” ambition. Maybe Nau should have taken a more “open” approach to innovation, focusing exclusively on developing their sustainable textile “knitting” and leaving the clothes design and retail to those best placed to exploit its use? (see Innovation Insight #1 - use what already exists for another take on this theory in practice).

Attempting to control the entire process from end-to-end smacks more of megalomania than "essential" innovation i.e. innovation essential to succeed. It is hard to see what barriers exist to the uptake of their textile in the marketplace (other than cost) and therefore justifying the end-to-end control they sought. Nau was no Apple and had no Steve Jobs so this ambition was always going to be a stretch for a VC funded start-up, regardless of the state of the financial markets.

As innovation moves into the era of more open innovation I would hope innovators such as Nau start to recognise that they do not have to pioneer alone and on all fronts; there is a world out there willing to share the challenge and even the pain.

The Nau goal of more sustainable clothing is too important to let fail so lets work together to find better ways to make this happen, spread the risk, increase participation and focus innovation on where it matters.