RS

For a research area which needs a second and third look, please visit the newenergytimes website and read over the current updates covering the area of Low Energy Nuclear Reactions (LENR).

http://www.newenergytimes.com and
http://www.infinite-energy.com

The 14th International Conference on Condensed Matter Nuclear Science (ICCF-14) will be held from the 10th through the 15th of August 2008 at the Hyatt Regency Hotel on Capitol Hill in Washington DC. The purpose of this scientific conference is to present and discuss new results on low energy nuclear reactions (LENR), which originally went by the name “cold fusion.”

This should be an interesting meeting.

Joseph

You like a number of other people who have communicated with me off line have brought up this point. I have not addressed nuclear in any depth and would say it merits a good deal more consideration and discussion that I am not ready to engage in yet. I believe that is part of the solution. When looking at nuclear, I think it should be viewed through the same general prism but I am sure there are numerous other significant factors as well that are very significant (e.g., public perception and policy) in the case of nuclear. I would love to hear a perspective from a nuclear expert. My sense is that nuclear is not a good venture capital investment or even private equity but now with private equity investments getting so big, maybe it is.

You seem to understand the subject thoroughly, though I was looking for references to Vito Harlow or Saul Caso.

The one area you don’t touch on is nuclear — low cost, carbon free, baseload — any impressions on this?

Interesting article. As an aspiring energy entrepreneur (and a student in said class) I agree with your description and analysis of the additional challenges facing entrepreneurs in the energy field. Perhaps the implication is that entrepreneurs and investors need to redefine and re-prioritize the sources of value in the energy space. While in most industries the standard new venture pitch starts out with how much does it increase revenue/save costs, who’s going to buy it, and who cares, perhaps in energy the space the first items to address are why the utility/infrastructure incumbent can’t stop you from doing it and why you won’t be in locked in a public hearing process for 5 years before your first project can be built. Those two risk factors probably have a bigger impact on a new energy venture’s NPV than your standard technology and execution risks that dominate other industries.

James

I think your skills list / model is very appropriate for a class teaching energy-related entrepreneurship…perhaps even for a book? (hint, hint). Many energy ventures will not face all of the difficulties you describe, however (some will not face any, in fact), but the bulleted ‘dimensions’ serve as a great educational tool for aspiring entrepreneurs looking at the energy space. There certainly are peculiarities common to many energy ventures….my background before MIT Sloan was in hydrogen and fuel cells, so I learned many of these first hand and early on.

Not to be neglected, however, are the core tenets of technology (brick & mortar) entrepreneurship that Ken Morse, you, John Preston and all the MIT E-Center practitioners have institutionalized at MIT. MIT’s focus on quantifying the value proposition, proving the market pull (list your first 10 customers), surrounding yourself with the best and brightest, etc should also be a part of your class. I also hope that the teaching method that I found so valuable – ‘learning from the tribal elders’ and ‘mens et manus’ – is used…I am sure that it is.

So, my general comment is that the model of needed skills for energy entrepreneurs is great and insightful, but is most valuable as ‘icing’ after the core technology entrepreneurship lessons have been taught and demonstrated. As an energy venture capitalist, I see WAY too many smart people neglecting the basics and putting ‘energy’ behind ideas that have little chance of succeeding (in my humble opinion)….often because of poor technology entreprenership skills, but also because of, as you have skillfully illustrated, common peculiarities of energy entrepreneurship.

All the best & see you in April for the 2008 MIT Energy Conference.

Brian

1. Single-dimensional solution.

The more fields of study a solution has to interact with — and compete with — in the market, the harder it is to predict success.

2. Shorter time frame.

The longer your technology takes to reach fruition, the more likely your solution will be obsolete by then.

3. Smaller scope and scale.

Larger operations have more government hurdles, have more competition from corporations, and take longer. Leave the home runs to Manny and Big Papi; think Wade Boggs single up the middle.

4. No public perception issues.

Invest in wallflower technologies that are subtly game-changing, but don’t cause a stir. You want companies that can focus on their technology and their customers, not their PR.

5. No governmental conflicts.

Look for companies spending their money on sales people, not lobbyists.

–

All of this means we may be entering the era of “wiki-energy,” where the energy problems of today will be solved, not by one giant corporation with a silver bullet, but by a thousand startups with narrowly focused, well executed solutions.

In general, I agree that the energy entrepreneur is a special breed and that many energy companies have unique challenges. However, I believe all the excitement around energy innovation these days is fantastic, as it is attracting a large amount of needed talent from other areas into energy. Many of these talented people can learn quickly, so I don’t think a background in energy is a prerequisite for success. It is important to have someone, though, who does recognize the unique challenges of energy.

Also, there are many companies that can be classified as “cleantech” that don’t necessarily share all the same challenges that you described which can make energy entrepreneurship so difficult. For example, I’m currently reviewing a software company that could have a substantial impact on the efficiency of a utility’s operation. While the software is complex, it does not have the challenges of manipulating silicon (or carbon nanotubes or bacteria, etc) to make novel energy generating or energy storing devices. The “clockspeed”, to use a term from MIT’s Charlie Fine, of this company is much higher than many other energy companies, so it may be a closer to fit to the traditional venture model for a company.

There are also energy companies that apply known energy technologies in clever ways to solve important problems. Seahorse Power, one of our investments, is a great example of this. They’ve engineered a smart solution that marries PV with a battery and some clever power electronics to make a device — a cordless trash compactor — that cuts down on street litter and substantially reduces a municipality’s rubish collection costs by cutting the number of garbage truck rolls by a factor of 4-8. There is real value here — in terms of both money and energy efficiency — and Seahorse Power is capturing this value well with known technology.

Regards,
-Jay