Shining a (renewable-energy sourced) light on the current state of Clean Tech

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By Ryan Miller, MBA Candidate

Published 4.30.13

Michael Linse (right), of Kleiner Perkins Caulfield & Byers, listens as Robert O'Connor (left), of Wilson Sonsini Goodrich & Rosati, answers a question at last week's Presidio Presents event. The panel discussion, which took place at the HUB in downtown San Francisco, focused on the topic of Clean Tech Finance.

Michael Linse (right), of Kleiner Perkins Caulfield & Byers, listens as Robert O'Connor (left), of Wilson Sonsini Goodrich & Rosati, answers a question at last week's Presidio Presents event. The panel discussion, which took place at the HUB in downtown San Francisco, focused on the topic of Clean Tech Finance.

Last night Presidio Graduate School held its third and final Presidio Presents Speaker Series event of the school year.  Presidio President William Shutkin hosted an inspiring line-up of panelists, each with a unique perspective on clean tech financing.  The engaged crowd on hand showed a keen interest in what insights and experience were to be shared.  With drinks being served and enjoying the casual evening atmosphere of the HUB, the mood was jovial and relaxed.  President Shutkin started off by introducing each of the panelists and had each panelist share more about their backgrounds.  Our guest speaker panel included:

Speaker’s bios can be found here.

Being at best a casual observer of the clean tech industry, my first impression listening to the panel was “these guys know their stuff.”  I was impressed.  Their dialogue provided a number of different perspectives to create a solid representation of the financial landscape as it relates to the clean tech sector.  For me, it was a chance to get an insider’s view on clean tech’s “state of the union” and how it has changed over the past decade, to better understand the direction in which technologies are evolving, and to gain some strategic insights into where clean tech entrepreneurial endeavors might best be aimed.  Here are just a few of the takeaways from last night’s speakers:

1) “Be a Realist”

If there was a mindset that best described our guest speakers’ message, this would be it. Each of the panelists displayed a passion for clean tech, yet a wisdom of what can reasonably be expected to succeed in the marketplace among clean tech ventures.  A common theme amongst last night’s topics was that the bubble of relatively easy clean tech financing has come and gone.  Investors who lost money through the mid-to-late 2000’s in overzealous or unfinished clean-tech ideas are now much more hesitant towards the sector.  Being realistic in the scope of opportunities and investment possibilities available now will help entrepreneurs choose successful business ventures within their scope and abilities.

2) “Don’t Go Head on Against the Big Boys”

Michael Linse put this nicely into perspective, using hybrid vehicles as an example.  The difficulty in competing with companies such as BMW or Toyota who already have a stable supply chain, operations, financing, branding, etc. in place is a daunting endeavor.  He warned against disregarding the challenges associated with producing and distributing a new product (especially a high-capital product) and the advantage this gives to established businesses.  So, what’s a smart entrepreneur to do…

3) “Invest Around the Edges”

Robert O’Conner used this term to explain what the panelists agreed was the best current option for entrepreneurial success.  Looking for opportunities that can be applied “around the edges” of various larger-scale existing businesses or industries can be an effective way to avoid some of the common pitfalls for clean tech startups.  A clever product or idea that can be plugged into existing technologies has distinct advantages. For one, it doesn’t have to “reinvent” what’s already been accepted in the marketplace.  This allows entrepreneurs to focus on their clean-tech niche and not on compete to gain traction against established competitors.  It also reduces risk by broadening the applicable uses, and not hinging success on one specific brand (for instance, a specific widget that can be applied to all hybrid cars versus starting your own hybrid car company.)

The panel also recommended pursuing opportunities that require less capital investment for success.  A venture with low capital requirements, at least initially, will more likely spur investor interest.  Adam Bergman referred to the prior era of clean tech investment as “unhealthy exuberance,” but he and the panel also believe that the marketplace is in a much more realistic phase of maturity.  They agreed that there are still plenty of willing investors for promising ideas and products that have realistic profitability targets and customer bases.  Hence, we’re in a more “sustainable” era of clean tech venture capital.

Thank You’s

I’d like to thank each of the guests last night, as well as President Shutkin and the Presidio team for hosting such an informed and engaging presentation.  Another thank you to the sponsors, whose efforts created a well put together and enjoyable presentation.

Keep an eye out for more Presidio events.

Ryan Miller, MBA Candidate

Ryan is an MBA candidate at Presidio Graduate School. He’s also an amateur songwriter and plays rhythm guitar for the yet to be formed band, The Presidians.

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