Cleantech-less in Seattle

7/7/11Follow @nparekh00

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a critical mass of people needed for many of the challenges involved in cleantech. When I think about cleantech, I think of it as a cleaner version of more traditional manufacturing industries. We have some large blue-chip corporations that are not Internet and software oriented in the Pacific Northwest. Weyerhaeuser, Boeing, and Nordstrom are a few. These companies are not producing a large number of entrepreneurs or trained workers who are seeking employment in the cleantech sector. But Boston and San Francisco really do not have this talent pool either. Great engineering talent resides in the Midwest or the South. Generally, well-financed companies are relocating the right people or relocating themselves to take advantage of them. Seattle does have a strong biotech community, but there is yet to be a local biotech or synthetic biology company pursuing cleantech (at least that I know of).

• Government Support: Though I have been impressed with the new direction at the University of Washington in terms of technology transfer and licensing, overall the Washington state government has not focused on cleantech as an investment area. There was a lot of talk in the 2006-2008 timeframe about cleantech and biofuels being the next big thing for Washington state. That has yet to emerge. During the Great Recession, the Washington State Energy Program was 100 percent focused on near-term job creation and “shovel ready” projects. Unfortunately, projects focused on the next wave of clean technology were not supported.

So what’s an entrepreneur or an executive to do? If you are an executive focused on cleantech, you must be open to opportunities outside of Seattle. Most of them will be. If you are an entrepreneur focused on cleantech, you must raise financing outside of Seattle (I found money in San Francisco, Chile and Norway) and then decide whether you build your company in Seattle. Software or Internet focused cleantech companies (smart grid, energy conservation) can be successful in Seattle based on our talent pool and our green leanings. Biofuels, solar, wind, green chemicals and materials, water, and other cleantech industries will be harder in Seattle.

Personally, my wife and I decided that Seattle is home and we are taking the long view of a life in Seattle. Though I love the mission and social purpose of cleantech, I love Seattle more. In 2010, I started looking at both cleantech and Internet opportunities in Seattle for my next adventure. In the end, I found more compelling non-cleantech opportunities locally and now I am CEO of a professional social network and blogging platform in the real estate industry called ActiveRain.

I certainly hope the cleantech cluster in Seattle develops over the coming years or decade. Success breeds success. Unfortunately, cleantech in Seattle needs more visible and proactive leadership in the finance, industry and government if it is to emerge as a major employer or technology focus in the future.

So who is up for the challenge to lead the cleantech cluster in Seattle?

Nikesh “Niki” Parekh is CEO of Seattle-based ActiveRain, the largest social network and blogging network dedicated to the real estate industry. Niki is the former CEO at a UW cleantech spin-out called Bio Architecture Lab and has held positions at Madrona, HouseValues, and Second Avenue Partners. Follow @nparekh00

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  • Rob
  • http://www.nwenergyangels.com Byron McCann

    Nikesh makes solid insights into the cleantech industry in the NW. Yet, there is a consistent and passionate group of entrepreneurs that we see coming through to present to the NW Energy Angels, a private angel investment group in the Seattle area. http://www.nwenergyangels.com And, the investors are equally passionate about cleantech even though many of them have come from successful careers in software, internet, or other technology sectors. It’s a group that is highly engaged together, has a world-class advisory council,and sees a vibrant cleantech sector in the NW as its vision.

    Other industry clusters have taken years to develop and, through persistence, the NW will find its cleantech center of focus. Once we see some successes and exits, it will solidify. I remember that the software industry grew over many years and that many companies needed funding from outside the NW even after there were NW investors established in that sector. Investors like to collaborate that way as well.

    Furthermore, through the Cleantech Open, a national business competition, we see many new startups coming out of the NW across a number of subsectors. http://www.cleantechopen.com

    So, we have momentum, some cleantech funds such as Chrysalix and Yaletown in Vancovuer, B.C. (still the NW) and Pivotal in Portland, some key capability building blocks, and much work to do. I suspect when a cleantech VC bases in Seattle, we will take a significant step forward.

    Byron McCann
    Co-Chair NW Energy Angels
    Regional Director, Cleantech Open
    Ascent Partners Group

  • Rob

    Byron, I agree Seattle and the northwest have much going for it. That’s a big part of the frustration I hear from many of the founders. We are so close. I enjoy feedback from the front lines, even if it is difficult to hear. Identifying the missing components, finding the barriers, is a necessary part of the process. Onward and upward.

  • http://www.nwenergyangels.com Byron McCann

    Absolutely, Rob! The front lines are where it matters and helping these entrepreneurs succeed is critical.

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