I was in San Francisco (incredible city to run…unfortunatley, I could not find the Dutch Windmill…next time) last week attending the Cleantech Forum. Just one year ago, most of the large oil and gas corporate ventures groups were in attendance. This year, there was only one. The price of oil is hovering near $30.00. Last year, the price of oil was ~$55.00 during the same event, the fall had already begun but trips were planned and bags were packed back at $100.00. C’est la vie.
Being based in Houston, I was and am an anomaly here. In fact, after an inspiring speech by a cleantech investor, I went to introduce myself. After explaining that I was inspired, who I was, what I do, and where I was located, he replied: “Ewe…you are in the belly of the beast. Please speak to my team if interested because I cannot help you.” First of all, I didn’t ask for anything. Second, I have heard this before and replied that we work with the largest energy companies in the world across the value chain and have the best track record of emerging energy technology startups…but this may not be of use to his investments. After this digested, he wanted to hear more.
My point is this, the Cleantech movement does not like the Traditional energy establishment. And the traditional energy establishment does not actively recruit nor engage new entrants into this ecosystem.
From the very beginning of SURGE, it was my hypothesis that in order to truly change the energy industry, clean energy and traditional energy players require one another’s expertise to scale the new energy economy. The traditional energy players, whom account for the largest percentage of energy sources and power generation, lack the ability to rapidly prototype and implement disruptive approaches and technologies and have been hesitant to invite new entrants to the table. The clean energy industry needs to tap into the know-how, developed infrastructure, financing capabilities, and regulatory influence of the traditional industry but has not developed the best platform to engage this network.
I co-founded SURGE in Houston because this is the best place to start a new energy company. Houston is 5x larger in employees than that 2nd largest energy town, it has the highest density of energy decision makers, there are leading energy academic and regulatory institutions here, Texas is a deregulated utility market (thanks to a SURGE co-founder), it produces more wind energy than anywhere else, NASA is based here, this is ground zero for the project finance and private equity energy investors (think Venture Capital bud add a few zeroes), and it houses an entire ecosystem of experts that know how to scale big ideas. And the costs for an entrepreneur is even better: lower cost of living, 5,000 customers in one place, incredible food, a car ride from New Orleans, and a bunch of talent looking to be inspired. I truly contemplated a better location. There isn’t one. It is true that Silicon Valley runs the software world…but this world is industrializing from the digital world to the physical. And the knowledge and ability to scale these “things” globally is a must-have to truly change our energy landscape (again, Houston). Look at Tesla and Apple…both of them are reaching to the automotive industry for experts to build out the car of the future.
Last week in San Francisco, I was reminded that the Berlin Wall has not come down between the old and new…YET! I believe it must come down and will come down or we will just wait for cleantech 3.0.
The paradox is that the new energy economy will repeat the same mistakes and spend a lot of money making more if it does not embrace the experts that came before us. And the future of the energy industry is the environmentally conscious millennial that grew up in a world with Facebook, an iPhone, sees the car as a utility (thank you Uber) vs. an identity, and wants a calling to change the world.
And now has never been a better time to be in Energy to build the companies that will allow us to increase access and sustainably produce and consume energy. Massive shifts are driving change on how we think about, develop, and consume energy including: the generational crew change (baby boomers are retiring faster than the industry can hire millenialls and GenX’ers went into tech), software and web applications driving rapid innovation, accelerated growth of renewables, regulatory changes, the amounts of capital that can be accessed by public and private funding sources, and most impactful, the rapid growth of non-traditional energy companies emerging as viable entrants.
It is time to change the perspective…let’s move forward together…Who is in?