Lessons in Energy from an MIT Sloan School Grad
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from research (private or government sponsored) in chemistry and materials science. In my opinion, a founding team that will be successful in the energy innovation sector will need to have the continuous and active involvement of the person(s) whose research the technology is based on.
Current and future entrepreneurs in the energy sector should focus on forming a founding team that has this involvement of the person(s) whose research is the basis of the new venture. While at MIT Sloan, I co-authored an independent study paper (under Bill Aulet’s guidance) with two of my classmates that attempted to rank the top 20 new renewable energy ventures—those that started after 1988 and were publicly traded for at least 24 months as of 2009. We also researched the common traits of these new ventures. One of the common themes for the successful firms was that there was long-term continuity in their top-level management, including their founding team. Oh, and by the way, more than 60 percent of the top 20 firms in our study were solar firms, indicating the power of incentives in their success.
If you are a chemical engineer (like I am), you know that one of the common methods to measure the speed at which chemical reactions occur is the method of initial rates. The speed of a reaction is typically the fastest at the beginning of the reaction where the reactants do not change their concentration much. You should also know that this is not indicative of the average speed of the reaction, which is important, if you are designing a commercial reactor. Similarly, reactions that seem fast or yield high amounts of needed products in the lab do not always translate when you increase the size of the reactor.
I can attest to this from my firsthand experience of working with researchers at an energy storage laboratory at MIT. As an MBA student I worked with a post-doctoral associate to formulate a business plan for a new energy storage device. Here I was talking to potential customers and analyzing market size, while all we had was a battery the size of a one-dollar coin. Customers wanted a commercial-scale product, which in our case would be the size of a car battery. Numerous variables are at play when you increase the scale. This is one of the crucial steps in converting a lab technology to a successful, large-scale commercial technology. It involves a lot of time and capital in most cases.
Solar photovoltaics manufacturers have faced this problem in one form or another—the rate of film deposition, or purification/crystallization of silicon. Battery manufacturers face this during the scaling up from small to large cells. Biofuel firms face this during the process of scaling up from one liter a month to commercial production levels. If you are interested in starting a firm in this sector, you will need an appreciation for the complexity in scaling up, a lot of patience, and a lot of capital support.
I have to qualify my thoughts above with the statement that they might not be applicable to all types of energy innovation, but it is safe to say they apply to the majority of them. If you are interested in a career in this sector, my advice would be to appreciate the complexity that is the three-level energy cake: policy, people, and scale. There is no doubt that innovation driven by this generation will cause a momentous shift in the way energy is produced, used, and converted. The question is how soon?