Monday, March 23, 2009

Debugging the Elephant: My Aha! moment at IIT Clean Tech 2009

Have you heard that elephant story? When 4 blind people touch different parts of an elephant and they just can't figure out how it can possibly function? Software designers are required to laugh at this story to make the grade but it is relevant for all new endeavors. When it comes to figuring out the clean energy space- yep I didn't have the big picture. Aha! All is changed. On March 21, I attended the IIT Clean Tech Forum: "To inform and educate attendees about opportunities for jobs, businesses, investments, research and development in the emerging new energy economy." But I got more. I got to visualise the elephant. A software person, at such events, I position myself as a dilettante- its a defensive posture. The conversation quickly moves into PV cells, Silicon stuff, Nano or Giant windmills, even biomass (a polite word for waste matter among other things). Else its about policy, big government programs and so on. The Forum featured great talks (Solar energy, Biofuels, Energy Storage etc. ) but I was really interested in the talk by Raj Vaswani, Silver Spring Networks, on Energy Management. It was great - overview as well as details; not to mention entertaining. The energy crisis is real - NIMBY -> BANANA -> NOPE (not in my backyard, build anywhere nothing anywhere near anything, not on planet earth). He also called software the "Fifth Fuel" (I love that) and mentioned demand side management several times. I got the trunk of the elephant - I knew how software skills could be applied. But I still didn't have the big picture - Who cares enough to help me build my dream? The real AHA moment came during the panel. It came from Adam Grosser, Foundation Capital. In a nutshell: "Demand side applications are more amenable to VC funds than supply side- e.g. storage, transmission, data management - like Raj's company". So the companies that focus on "efficiency" are the "low hanging fruit" - and that is what VC's fund. Infrastructure energy projects are supply side - which is where solar, wind etc come in - payback (and witness increase in government funding) comes after a little longer period of time and required different capital strategy. That's it- this is how I can slice/dice the space - tell the tail from the trunk and what's in between. So, if you are in clean tech or thinking of getting into it- create a framework that works for you: ask - Supply side or demand side? Where is my expertise a strength? Low hanging fruit or long term payback? and then develop your funding and execution strategy. An oh, by the way, Raj's company is growing and hiring like crazy - write . A word of caution - Raj says "my customers are the big Utility companies and they don't even like low hanging fruit; they will just pick up the fruit if its laying on the ground."

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