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Cleantech is no new PC Industry

I wrote this last night, before the Solyndra Chapter 11 bomb dropped, which just reinforces the point: any industry that is reliant on “government push” rather than customer pull can hardly be considered the next PC industry.

In the last two days I read two posts equating clean energy products and industry to the early PC industry:

I have to disagree.  I’m not saying money can’t be made.  But while computers/software will march on and regularly produce billion-dollar companies like Facebook, Groupon, DropBox, etc. (computing is hardly “solved”), clean energy will be a tough, hard road.  A few missing buoying factors:
  1. Consumer demand.  What made PCs great was insatiable demand from consumers and companies for new capabilities at less cost.  Face it: electricity is too cheap for most people to care about it.  A recent New York Times story on green jobs noted the difficulty of getting consumers to care enough about home energy efficiency to spend federal stimulus money.  Corporate customers can make the investment, of course– that’s where LEDs and similar technologies will catch on first.  But when we liken things to the exciting PC revolution and Steve Jobs, we’re not talking about corporations doing 20-year ROIs.
  2. Enabling platform.  Electrons from a wind turbine or solar panel have no magical properties.  The Apple ][ opened an entirely new world for me and millions of others.  I don’t see my kids having a life-transforming moment when I buy LED lightbulbs.
  3. Technology and cost curve.  Every new technology that comes along tries to claim “Moore’s Law” type properties.  With fragmented energy technologies, that is clearly false.  No, having microprocessors in your smart meter doesn’t mean you will ride Moore’s Law.  The truth is very few technologies will have a curve like CMOS– and provide such an incredible platform for so many different components and applications.  I don’t see that in energy.
I also don’t buy into the fantasy that social networks, apps and gameification will be our salvation in energy.  That is a way VCs say they are out of money/scared of real energy projects.  There will be money made in clean tech, but it will be by damn hard, persistent manufacturing work— like the Chinese entrepreneurs who are winning in solar.  There’s no shortcut, and no rocket to jump onto like the 1980s PC industry.

Boston Display Ecosystem

I was reminded by the announcement that QD Vision had raised an additional $22 million for development of quantum-dot displays of the significant display technology ecosystem around Boston.  A refresher on some of the players:

  • E Ink.  The most-visible star of the system.  Now Taiwanese-owned (note the acquirer changed their identity to E Ink!).  Proved that persistence can pay off, especially if you enable some critical functionality– in their case, high contrast, low power for e-books.
  • Kopin. Also an established (Nasdaq:KOPN) player, supplies miniature LCD displays based on a unique crystalline Silicon lift-off process.
  • QD Vision. With its latest announcement, QDV is returning to its “roots”– seeking to build displays based on wavelength-tuned emission from quantum dots.  Note they have demonstrated/discussed other display applications including better LED backlights, and better color filters as well.
  • Pixtronix.  Founded by ex MIT prof. Nesbitt Hagood, Pixtronix has been relatively quiet.  So I was pleasantly surprised to find videos of a display they built with Hitachi (Japanese, sorry) — based on MEMS shutters at every pixel! [update: raised another $4M in June 2011]
  • Laser Light Engines. A spin-off from contract research firm Physical Sciences Corp,  Salem NH-based LLE is developing ultra-high brightness laser engines to power cinema projectors.  They recently closed a $13 million B-round with IMAX as one of the investors.
  • Luminus Devices. Though not a display company directly, Luminus (another MIT spin-off) supplies high-brightness LEDs for projectors.
One that got away was Iridigm, which started in Boston by Mark Miles (initial prototypes were built at MIT), and subsequently moved to Silicon Valley.  Qualcomm acquired them in 2004 and has subsequently poured enormous resources into commercialization of this interferometric MEMS technology.  The latest promo videos are looking very impressive!
Anyone I missed?

Soured on Components?

I got an email from a tech entrepreneur with deep experience in silicon and imaging today: “Uh oh, even Matthias Wagner is getting dubious about components?  In that case, the venture guys must be really down on components!

My response:

On the contrary– I love components!  However, they don’t always make good early-stage investments [have been meaning to start a rather sparse list of novel component startups that were successful early-stage investments].  Or rather, the way these investments are done often causes them to be bad investments for the first guys in (including the founding team).  I see the same pattern repeated over and over:

  • Interesting core technology, multiple potential markets.
  • For sake of raising VC, focus on the biggest, fastest-growing market.
  • Because you need to move fast, you hire a complete team from chip to systems to sales to several VPs.
  • Burn a ton of money very quickly.
  • Core component/materials take 5x longer than the initial optimistic estimate.
    • Any more than the 2-3 engineers working on this core piece won’t speed it up.
  • Cut your team down.  If you’re lucky, raise a Series B at a crushing down valuation.
  • Refocus on a less ambitious first market, just to ship something.
  • If lucky and stingy — and the team is still motivated– live to see another day.
I guess VCs and entrepreneurs have to understand the chain of risks with the core technology [the types of failures are almost predictable, because every new device seems to hit them], and agree to a smaller initial “launch market” where you can prove a very simple version of your platform.. even if the headline numbers look a lot smaller.
[From recent conversations with component VCs left standing in the Boston area, I think a new lifecycle model is emerging that addresses this.  However, whenever a venture gets “hot,” discipline goes by the wayside and A-rounds escalate.]

NFC: Please Make “Internet of Things” Work!

A post on GigaOm today entitled Near Field Communications is More Than Just a Mobile Wallet is right on.  Developers have a new tool that relies on the security of physical proximity.

Here is my modest proposal: let’s use NFC to make attaching stuff to WiFi easier.  Plugging devices into USB, configuring them, etc. is a huge hassle and impediment.

Grandma should be able to wave her new digital pictureframe over her WiFi basestation to connect it.  I should be able to wave my iPhone over someone’s laptop and give them guest access to corporate WiFi for 24 hours.

The Wi-Fi Protected Setup standard supports NFC already.  IMO the missing element is the ability to use a “magic wand” to connect devices.  This could be a wireless device associated with a base station, or preferably a smartphone/tablet that has secure access to the base station.

That kind of easy setup is what is needed to get widespread use of Internet-connected stuff!

Beware – “Advisors” Slide

It’s instant credibility.  For the fresh entrepreneur.  For the veteran entrepreneur starting in a new area.  The Advisors slide.  I have used them.  I have been used on them.  I have made mistakes on both ends.  Some cautions…

As an entrepreneur you probably know exactly what you are building.  You have very few cycles to spare.  The last thing you are looking for is hours on end hearing from an “expert” why this or that is impossible, has been tried before, etc.

But to show VCs that you have tapped the experts in the technology, market, etc. you need a couple of advisor names.  You network to a few, meet for coffee and a chat, even send a slide deck.  You ask them to be an advisor, with some vague talk about equity.  They say “sure,” and you put them on your slide, and get on with your many other tasks.

I have learned this is a mistake.

For many entrepreneurs the threshold to agreeing to be an “Advisor” is pretty low.  I enjoy helping other entrepreneurs.  I don’t do it based on whether I believe its a $1B opportunity.  Helping someone build something new and interesting, and learning the ropes– that’s good enough for me and many others.

The problem comes when the advisor gets a reference call from a VC.  The truth is anything short of “I love the team, I love the business, I want to invest and/or work with them” on that call is bad for the company.  Even having a big name say “they seem like smart guys, not sure exactly what their current approach is” doesn’t do much for you.

I remember getting an echo of so-so feedback (through a VC) from an Advisor in my first company.  I was pissed.  But in truth I had spent little time actually talking through the business, getting advice and making him feel “heard.”

Some advice for entrepreneurs:

  • Clearly separate “advisor” from “Advisor.”  It’s great to have lots of advisors.  But list only capital-A Advisors in your slide deck/website.
  • Make the threshold for official Advisors high:
    • A certain number of hours per month; per week leading up to fundraising.
    • Make them a shareholder.
      • Preferably with cash out of pocket so they have skin in the game… and you have tested their commitment to your vision.
  • Prep Advisors well before you pitch VCs: walk through the pitch, in person, and answer questions/objections.  Either walk away agreeing it’s good, or take them off your slide.

Some advice for potential advisors:

  • Keep an open door for entrepreneurs seeking advice.  It’s good for the community.
  • Draw a clear distinction between informal advice and being an Advisor.  Before agreeing to the latter answer: would I be comfortable sitting with the team at a VC pitch?
    • If not, tell the team.  Don’t take stock.  Give them occasional advice if you have time.
    • If so, get a stake in the company.  Work with the team to really understand the business.  And get ready to take reference calls as if they were a continuation of the pitch.

Weekend Project: RoboLaser

A week ago I finally got an Arduino kit.  I decided to mock up a solution for a “picoprojector” in work environments.  I previously listing the shortcomings of current offerings, and sometimes it’s best to follow a trashing with an alternative!

The idea is that many applications need only pointing indicators, not full-frame video projection.  So, start with a steerable laser pointer.  The theory was that you could use very cheap, low-power mechanics and a control electronics if you used them in conjunction with a low-cost camera module, and used video feedback control.

The first iteration is messy and bulky, but seems to validate the concept.

There are a couple of emerging needs that I have been tracking that require this functionality.  I’ve filed a provisional on one complete solution (great way of forcing a brain dump!) and have a decent parts list to get the total size down to that of a webcam.  It would eventually need some serious iterations on image processing / control algorithms too (and not just in Java-lite!).

Project Ingredients

  • Adafruit ARDX – nice Arduino starter kit with breadboard, etc.
  • An extra mini servo motor (one comes with the kit)
  • A $10 pen+laser pointer from Staples that can be “rewired” a bit
  • An ancient crappy USB webcam
  • A bunch of LEGOs to hold everything together (topped off with hot glue)
  • Arduino’s software cousin, Processing (now includes video library to capture webcam frames)

An Update: “Terminator” App
I used the platform functionality above as the basis for a pointer that finds a face in the field of the camera, and aims the laser at the base of it (chin or neck).  Used subset of OpenCV library that has been brought over to Java.  The control parameters for the video-based laser guidance (good old PID) still need some tuning.

You’ll have to excuse the q&d video editing with speedup and generic iMovie soundtrack!


Displays vs Solar Cells!

I promised a follow-up post on the total flat panel display (FPD) production. CES week, where manufacturers unveil their latest monstrous TVs, is good timing!

The current production of FPDs is about 70 million square meters per year. That is the equivalent of 150 million 42″ TVs– some of it of course going into iPhones and the like. For some perspective, let’s show what production output that looks like in my neighborhood (Cambridge), tiled into a giant screen:

Annual Flat Panel TV Production... and Likely Content!

It turns out the total square area of solar cells produced annually is about the same (70 square kilometers). [Side note: shows power of consumer demand pull vs. government regulatory push– cells are now $150/m^2 vs TVs at $1000/m^2]

So what is the “energy balance” between the two (annual TV area vs solar cell area being added)? The solar cells produce an average of 30W/m^2 (1000W/m^2 sun * 15% efficiency * 20% peak-base factor). The flat panel TVs suck an average of 360W/m^2 (pulled from this CNET survey).

So, if owners of new flat panel TVs can restrict their viewing to 2 hours per day, the new solar panels can power them.

That actually gives me some hope.