How the Smart Grid Opportunity Looks a Lot Like the Internet Once Did

11/8/10

The smart grid is a new technology arena that will change how Americans think about electricity. Entrepreneurs jumping into this sector give many reasons — to save the planet, save lives, or save the economy — but what attracts us most is the opportunity to leverage what we learned from the Internet revolution, to make a difference.

I see myriad opportunities for tech entrepreneurs to transition to energy, and on Wednesday evening I’ll be moderating an MIT Enterprise Forum that will dig into the possibilities. The parallels between the Internet and the smart grid are notable:

Billions in federal funding are jump-starting this sector, not unlike the way U.S. Department of Defense investments built ARPANET. Startups are attracting millions in venture capital investments, while big players grapple to define the playing field.

The grid’s move to a digital information network is a game-changer for an entire industry, just as the Internet changed the way people do, basically, everything.

Like the web, the smart grid gets its intelligence from technologies that Northwest entrepreneurs already know. The grid will need analytics, data management, communications, e-commerce, and security, not to mention software applications for businesses and consumers.

These parallels motivated the selection of panelists for Wednesday’s forum. V2Green is a perfect example of a local entrepreneur’s tech-to-grid transition. Former Microsoft executive David Kaplan founded V2Green to solve the grid-related challenges of electric-vehicle charging. V2Green made a successful exit in 2008 when it was acquired by GridPoint.

David will tell you that V2Green’s relationships with utilities were a key to its success. Utilities are both essential and daunting to energy startups. Chris Heimgartner runs the distribution operations for Snohomish County Public Utility District, including a $32 million smart-grid project. David and Chris will give some relationship advice to entrepreneurs who see utilities as their next market.

Venture capital investors like to see scalable business models with defensible intellectual property.

The Department of Energy’s Pacific Northwest National Laboratory (PNNL) in Richland, WA has received millions of dollars from the stimulus package to develop smart-grid innovations.

Mike Davis, associate laboratory director for PNNL’s Energy and Environment Directorate, will tell us about smart grid research, and how entrepreneurs can leverage intellectual property from the lab. Rick LeFaivre, a venture partner at OVP Venture Partners, will explain what else entrepreneurs should do to get a “yes” from investors.

The established vendors in the energy industry are likely to defend their turf and grab for their share of the new smart-grid market. Some startups will be acquired, while others suffocate. Survival will depend on partnering with major players, such as Alstom Grid, GE Energy, Siemens and ABB.

Michael Atkinson manages Alstom Grid’s network management systems business in the Americas and China. In the conversation Wednesday evening I’ll ask Michael to shed some light on how startups should approach the big industry players — especially now that Microsoft, IBM, Cisco and Google have entered the smart-grid market.

Denis Du Bois is CEO of P5 Group, a cleantech marketing firm, and founding editor of Energy Priorities Magazine. He will moderate the MIT Enterprise Forum "Tech to Grid: How Technology Entrepreneurs Can Find Opportunities in the Smart Grid Revolution" in Bellevue November 10. Follow @

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