Rob Day: January 10, 2012, 6:38 PM

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“How Do I Get a Job in Cleantech Venture Capital?”

Around this time of year, the amount of inbound requests for coffees and "picking your brain" chats is always pretty overwhelming, as business school students and others start thinking about how they would love to be a cleantech venture capital investor.

I wanted to write down a few thoughts for such folks in case they would be helpful. Unfortunately, much of what I have to give is simply tough love. Because it's very, very hard to break into cleantech venture capital. When you account for the few specialist teams out there still actively investing in the sector, and then further account for the number of such firms that are hiring any new associates, I would estimate there are probably only one to two dozen new positions in the industry each year for anyone who doesn't already have deep experience. At most. Last year I think it was even less than that. There's at least 10 very interested job seekers for every one available entry-level cleantech venture job, and probably many more.

So with the caveat that no matter how smart you are, the numbers are stacked against you, here are some suggestions:

1.) Think hard about why you want to do this type of job.

I know one of your b-school classmates spent their summer interning with a venture firm and has been quietly lording it over everyone else; don't fall for their swagger. It's not the most direct pathway to achieve your goals, whatever they are.

If your goal is to make money, go into project finance or hedge funds or buyouts or Wall Street.  

If your goal is to make a significant impact on the cleantech industry or on the environment or such, go into a large company and work to make them more green. There, even a small shift makes more of an impact than most cleantech startups ever do.

If your goal is to find yourself doing a lot of exciting entrepreneurial things, go be an entrepreneur.  

If you're looking for job stability and an easy work-life balance, you're definitely barking up the wrong tree.

Venture capital is simply not the best way to accomplish any of those goals. Be honest with yourself about what you really want to do, and also don't fall for the Sunday New York Times-type hype about how VCs are heroes of the innovation world. That's a carefully crafted image some VCs have put out there, very much on purpose, but the true heroes are the entrepreneurs and the corporate managers who go out on a limb to work with entrepreneurs. They actually make stuff happen -- they're the ones to really be admired. There are lots of more impactful (albeit less heralded) ways to accomplish your goals than being a VC, I can pretty much guarantee it.  Don't get me wrong, it's a really fun job if you can land an opportunity in the field -- I love it with a passion that grows the more I time I spend doing it. But I can also tell you that if you want to be a cleantech VC for somewhat romantic and unresearched reasons, you probably won't be a good one anyway.  

And don't think that if you get an entry-level job in cleantech VC your future is secured. It's an up-or-out type of industry, and for the most part, the associates end up going out instead of up. There simply aren't enough openings at the partner level to sustain even the number of justifiable advancements, and it's hard to do well, so there are a lot of folks who find they don't like it or can't cut it. It can be a good springboard into other things, often entrepreneurial endeavors, and can be a very educational experience, but don't fight for an entry-level VC position and then think you've pegged your career for the next 40 years. Heck, venture capital as we know it may not be around 20 years from now -- it's a broken model.  Do you really want to fight to get into a shrinking club?  

In other words, don't go after a cleantech venture job unless you're deadly serious about it.

2.) Network, network, network. But don't just do quick calls and coffees. Do something meaningful.

Yes, there's no substitute for networking your way into a venture capital gig. VC firms typically don't advertise when they're thinking about hiring a new associate, so it's often a matter of right place/right time. One strategy is to watch for announcements of firms that have done first closes on a new fund. That often is a trigger for new investments, and perhaps some changes to the existing team (either up or out), and thus maybe they'll be looking for someone to bring on board. So start with such searches -- but don't be satisfied just talking to someone there.

No one gets hired into a venture capital firm because they impressed one of the partners there over a coffee or during a phone chat. And disappointingly, VCs also don't talk to other VCs about how they're hiring a new associate or such. It just doesn't come up very often. So the idea that a VC you talked to will follow up with you, out of the dozens who chatted with him/her, to let you know about another firm that's hiring an associate is a pipe dream.

The only way you get hired into a venture firm is by impressing them with your ability to actually add value, either to portfolio companies, or to the diligence process. Here are a few networking-your-way-into-VC dos and don'ts:

DON'T try to impress a VC with a couple of general investment theses you've come up with. They've been doing this for longer than you have, they've seen several companies fitting that thesis already, and have already been all over it six ways till Sunday.  

DO pick one subsector you're going to get super-smart about and dive into it. I still remember a b-school student I knew several years ago who decided he would become an expert on building-integrated PV.  He ended up in an operating role instead of an investing role (see point #1 above), but I still periodically catch up with him. If you want to stand out because of what you know and who you know, stand out as a specialist, not just a clever person.

DON'T ask for "thoughts and advice."  It's often a waste of time for both of you.  

DO ask for quick thoughts about specific companies you bring to the table, especially if they're in a subsector you're trying to become a specialist in. An investor is much more likely to give you tactically valuable information if you ask them for specifics instead of generalities.

DON'T ask them to refer you or intro you to their colleagues if they don't already know you well. Venture capital is a reputation-driven industry. No one wants to get a reputation for having sent time-wasters to go bother other investors.

DO ask them if they know of any firms that are about to close on a new fund but may not have announced it (as per the above).

DON'T try to impress a VC by bringing them a startup they likely already know about. If you found out about the startup by reading about it somewhere, the VC already knows about it. If you bring them a stealthy or super-early effort, maybe that will elicit some interest, but it better be a really promising company and not just a fellow b-school classmate's whimsy.

DO get to know VCs by putting significant time into supporting efforts they'll care about -- activities like the MIT Energy Conference that will be bringing in VCs. Even better is getting involved in nonprofit efforts that cleantech VCs are involved in, either professionally or on the side. Find any excuse to spend some quality time with the VC over a shared task, in other words, instead of just a quick coffee and some bland advice.

DON'T criticize a VC's investments. If you really have something to get off your chest, do it with appropriate caveats.

DO see if there are ways you can deliver some real value through a dedicated project. Offer to do a market map. Offer to do some specific biz dev research for a portfolio company. And best of all, intern. An internship is your single best pathway into VC, at least for young professionals.

Show the VC how valuable you are; don't expect them to get that on the basis of a brief interaction and a resume, or to hire you based upon your unproven potential. The great thing about the DO items listed above is that they also position you for other fun roles besides VC, leveraging the same experiences and knowledge and networks you've built.

3.) Expect contradictory advice.

Aspiring VCs often go to established VCs and ask them for advice as to how best to become a VC. Since "don't bother" or "be lucky" aren't very satisfying answers, the VCs give advice as best they can, but it's often very contradictory, leaving the aspiring investors even more confused. Why?

First of all, there is no standard path into venture capital. Everyone got there via a unique path.

Secondly, since there's no right way to do venture investing, there's no right way to break into venture investing. VCs who are former entrepreneurs will tell you to go be an entrepreneur. VCs who are former investors of another type will tell you to go get some other investing experience. VCs who are former consultants will tell you to go prove your value by doing market maps or doing some specific business development research for a portfolio company.

In general, I think former entrepreneurs do have a better shot at becoming VCs -- and then at being good VCs. So much of the role involves networking with entrepreneurs, knowing the challenges of being an entrepreneur, and being able to provide value to entrepreneurs. So an entrepreneurial background is a very useful thing, more useful than being a consultant or a banker.  

And who knows, you might decide you like being an entrepreneur better anyway; who cares about going over to the dark side and becoming one of those meddling VCs?

4.) Have a Plan B that you pursue just as actively, in parallel.

Be prepared for your quest to network your way into a VC role to take a long time, and very likely to end without you getting such a role, since the odds are stacked so heavily against you.

The smartest thing you can do is have another plan (or even more than one) that you pursue in parallel that you would also be excited about. Create options for yourself.  

Many VCs find themselves in the career by accident, having stumbled into it along the way. In fact, that's what happened with me -- I started doing some project work for a cleantech venture firm as a way to get smart about what entrepreneurial opportunities I could identify in the sector, and ended up getting hooked by the venture capital work instead.

So go out there open-minded.  Look for activities you can do that will build deep knowledge in particular areas, and rich networks across investors, entrepreneurs and experts And then you'll find a good way to leverage those assets one way or another. If by networking with and working with VCs you find an opportunity there, grab it.  But if you find a really rewarding entrepreneurial experience for yourself instead, grab that and run with it.  

The twisting road may bring you back that way later on anyway.

Rob Day: December 28, 2011, 3:52 PM

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12 Predictions for ‘12

'Tis the season for making year-end predictions, and even though I'm clearly not very good at it, I got dragged into doing them a while back. So here are some for 2012. Enjoy these with the appropriately sized grain of sodium chloride.

Rob Day: December 27, 2011, 1:30 PM

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Looking Back on 2011 Cleantech Investing Predictions

It's been a tumultuous year for a whole lot of folks, and the cleantech market has been no exception. As we near the end of 2011, I thought it would be good to look back on how our predictions from a year ago turned out.  

Here's what I predicted last December:

1. The cleantech venture capital shakeout will become more obvious.

I'd say this has been true. At least to entrepreneurs seeking financing, especially early stage. A few of us in Boston were recently trying to figure out who's still actively investing in the sector in this region -- and it was a shockingly short list. I suspect the same is true in other regions as well.  Score: +1.

2. 2011 will be the Year of Energy Storage.

Turns out this was pretty correct. Energy efficiency still showed a lot of dealflow, solar continued to get a lot of dollars, but energy storage rose up to challenge both subsectors. Seems like this will be a longer-term trend as well, given all the companies at an early stage that have taken in funding over the past couple of years -- and are likely to be taking in even more dollars in the future.  Score: +1.

I said the runner-up subsector would be LED lighting. Anecdotally speaking, feels like this was also about right. It's a hot sector that looks set to continue to heat up (no pun intended).

3. 2011 will be a moderately up year for cleantech venture dollars and valuations.

The dollars prediction was about right, at least through Q3, and I'm guessing Q4 will also be an up quarter when we see those numbers. The valuations prediction was very wrong, however. Tough to find data on this, but I've met with a lot of entrepreneurs who've talked about there being significant valuation downward pressure these days. Half credit only on this one. Score: +1/2.

4. A major geopolitical event will spike oil prices above $120/barrel.  

Nope, wrong. But that's because the global economy remained so bad. Certainly we had plenty of geopolitical excuses for oil price spikes this year. Score: +0.

5. There will be an energy law passed in the U.S., but it will be very patchy and incomplete.

Nope, not even that. The frustration continues. Score: +0.

6. A couple of big venture-backed cleantech IPOs (valued over $1.5B) will happen, but still no blockbusters.

Not so much. The cleantech S-1 backlog continues to grow. Score: +0.

7. Family offices and other non-traditional investors will become a critical source of funding for cleantech private equity.

This has turned out to be pretty correct. But while family offices have indeed stepped up with more activity and visibility, the true non-traditional investor "heroes" filling the capital gap have been corporate investors.  Score: +1.

8. New hybrid investment models will emerge.

Here's what I wrote last year: "I predicted this for 2010. It didn't really happen. But I continue to speak with both LP-backed and non-traditional VCs and PE players who see the need. So I'll double down for the prediction for 2011. And what I'm talking about is the emergence of new models that combine project finance and venture capital; that take innovative approaches to the use of debt and equity combined; and/or investment into the kinds of business models (like services, etc.) that VCs have typically had a hard time backing." Ditto this year. In particular, at my firm, we have started doing this, but nevertheless, it didn't really happen as a broad sectoral trend. Score: +0.

9. "Tech-enabled services" will be the new hot buzzword among cleantech VCs.

At the time, I noted that I shouldn't be predicting buzzwords, but that what I was really predicting was a rise of investor interest in alternative business and investment models in the sector that weren't dependent upon proprietary technology.  And given the rise of activity in IT-based cleantech plays, including the emergence of Sunil Paul's 'Cleanweb' model, I think I was essentially correct. And this trend will continue.  But no, I shouldn't predict buzzwords.  Score: +1.

10. Among U.S.-based cleantech venture investors, they will devote relatively more dollars to international investments.

I haven't seen a lot of data around this, so it's hard to say. But I haven't seen a lot of evidence of it, myself -- so let's put it in the "wrong" category.  Score: +0.

11.  The Washington Redskins will have a winning record.

D'oh. Score: +0.

So looking it all over, a mixed bag of predictions. In such a chaotic year, that's not too surprising, but still: I scored only 4.5 out of 11. Where I missed, it was mostly by being too optimistic. I'll try to do better later this week when I post predictions for 2012.

Congrats on surviving 2011, everyone.  And thanks for reading and for reaching out with your comments and feedback.  That's why I do this: to learn.  It's clearly not to demonstrate superior prognostication skills!

Rob Day: December 15, 2011, 8:06 AM

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Quick Hits: Boston’s Super-Angels, Nordan’s Smart Thoughts, and More

Been caught up in a number of year-end projects and thus am way behind on topics I've wanted to write about, so here's a quick set of thoughts on a few unrelated topics, Peter King "Monday Morning Quarterback" style:

***

Had dinner last night with several of Boston's most active cleantech angel investors (thanks to Bic Stevens for the invite).  No, none of this went on -- just some thought-provoking conversation over a great Italian meal. One thing that struck me, though, was hearing that Boston-area cleantech VCs are now doing only around three or four Series A rounds per year, and yet at that table were angels who had done eight and six deals over the past year themselves.  

This tells me that for cleantech entrepreneurs in this region (and I suspect it's the same elsewhere), angel funding is now the new-normal way to get started. A few cleantech startups here will take in VC dollars as their first dollars, but many more will have to make significant progress on smaller amounts of money before the VCs will jump in with their multimillion-dollar checks. I suspect this is doubly true for first-time entrepreneurs, as opposed to entrepreneurs who've already got a relationship with a VC or three.

So for emerging entrepreneurs out there, don't automatically build a plan/pitch requiring a $5M or even $2M Series A to get started. Have at least an alternative plan in your back pocket that allows you to make progress with $250k to $500k. And start figuring out how you can network your way into the local angel community.  

That isn't as easy as it should be, despite the good efforts of Bic and others like him. So one takeaway for me is that we need to work even harder to make the Cleantech Open Northeast a venue for regional entrepreneurs and angels to get to know each other.

***

Matthew Nordan is one of my favorite cleantech VCs, not least because he's "wicked smaht," as they say around here.  If you haven't read his recent four-part evaluation of the current state of cleantech investing, do so.  

I find myself largely in agreement with Matthew's points, and in fact have already stolen a couple of his charts for various purposes. So rather than go through the entire four-part series in detail with just a lot of "amens" from me, here are some quick thoughts and reactions, for what they're worth:

1. This is one of the better illustrations of the decline in early-stage cleantech investing I've seen. It basically shows that Seed/Series A activity has fallen off by about half -- driven, of course, by the general retrenchment of cleantech venture capital and exacerbated by the continued shift to later-stage investing by VCs. Angels and even corporates are filling that void somewhat, so the picture must look even more dire for cleantech venture capital firms.  The pendulum may be starting to shift back, but still -- it's striking.

2. I disagree with the illustrations by Matthew and others that extrapolate past patterns of capital needs to project future capital needs into later-stage investments in the sector and say there's a huge gap. I understand the logic of it, and it may end up being right. But we're seeing a real shift in the industry. Fewer of the early-stage companies will "graduate," and in some cases rightfully so. Just because all those companies will continue to burn cash, doesn't mean investors should continue to feed them more cash. I'm already seeing a decline in the number and amount of follow-on deals and dollars VCs are willing to put into their companies, except in the case of clear winners -- "pruning the tree" is happening more strictly and earlier in VC portfolios, somewhat out of necessity. Plus, there's a definite shift away from capital-intensive investing in the sector. So while Matthew's basic point is still right -- even as the VCs shift to later stages, there's still going to be yet more need for later-stage capital -- I disagree that it will happen nearly to the extent projected here. Matthew and others who do this type of projection essentially send an implied message: "Hey, there's lots of need for later-stage funding; jump in and fund a fab!" I would tell investors, "Hey, be really careful about being the 100th institutional investor to jump into late-stage cleantech investing, and be especially careful about funding construction of a fab and expecting venture-type returns." There is room for both perspectives alongside each other.

3. Matthew compellingly illustrates that cleantech venture returns haven't underperformed returns for the entire industry, that there's no "cleantech returns gap."  I agree.  But what I really take away from his analysis is that venture returns have sucked across all categories, cleantech and non-cleantech. I don't find the cleantech fund returns he describes to be particularly compelling, as a group. The median IRR in that group he shows is negative.  And yes, that's on par with VC returns across all sectors over the past decade. Still, I wouldn't want to back an index of cleantech venture funds based upon this performance -- and that's essentially how many of the bigger LPs out there will view the question.

4. Matthew's breakdown of the three trajectories is very well done.  In fact, it resonates with a similar analysis I did a couple of years ago that showed even more starkly that "last money in before the exit" rounds have rarely led directly to the anticipated exits, thus necessitating further funding, presumably often at down valuations. Common-holders, even founders who are still in the management team, can be the most hurt in such instances, as the preferred investors have various protections and options available for reducing their pain in down rounds.  And angels and founders no longer in the senior management team get crushed. Of course, in this scenario it's quite common for founders to no longer be part of the management team after that happens. So I think the real lesson learned here is that founders and angels need to be more wary of big upround valuations when times are good. Yes, dilution is a concern, and rightfully so, and so I wouldn't argue for artificially holding down valuations, either. But run really, really lean (i.e., smaller rounds needed) and don't over-hype your company. Because if you raise a really big round at an unwarranted valuation, there will be really big and probably unrealistic expectations -- and you will get crushed when they aren't met. At least, that's how I would think about it were I in their shoes.

Great work by Matthew. Thanks to him for doing this and putting it out there.

***

I think this is one of the most exciting times in cleantech venture investing that I've ever been a part of. Yes, there are some scary things lurking out there. But while we're seeing the "dabblers" back out of the sector, those investors and entrepreneurs still active in it are really committed to it. And at the same time, I'm seeing a next wave of investors like Nordan and Rachel Sheinbein who are willing to re-examine even core and hard-held assumptions about how cleantech venture capital should be done: in some cases (like Rachel) to re-affirm the existing model, sure, but it's still really healthy and energizing to see the examination being done at all.  

And the dealflow has never been healthier, at least from my perspective.  It's a great time to be investing.

Plus, I really do feel like we're on the verge of a wave of market reinvention that could finally unlock all the value created during the last decade's worth of technology reinvention. If we can finally start to see entrepreneurs introduce new channels and new business models out there, that could unleash a huge amount of latent growth for the sector.

***

The federal government is incompetent and absent on energy policy, but the states have been stepping into the void.  I continue to hear about interesting new policies and programs being implemented at the state level to encourage implementation of clean technologies, even in states you wouldn't think of as being particularly "green" leaning.

But what I'm also starting to see is a wave of attacks at the state level against these policies. There's some real "swiftboating" going on right now, even in states like Massachusetts that have been among the most solid leaders over the past few years -- misinformation campaigns and thinly veiled partisan attacks.

Watch this trend carefully.  

***

I'm headed to the Greentech Media holiday party tonight.  Seems a good excuse to thank them for continuing to put up with my shenanigans and for being a great partner over the past few years.  Thanks, guys -- looking forward to sharing a cup of cheer tonight!

Rob Day: November 18, 2011, 8:12 PM

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Reinvent the Utility

In the last decade, cleantech venture capital was about reinventing the electric generator.

It's time to reinvent the utility.

Utilities, as currently structured, exist for one reason: wires.  Wires connecting consumers to generators are a natural monopoly, so rather than expecting a competitive market, the market is heavily regulated and overseen by PUCs representing the public's interest. It's true in electricity, just as it's true in wireline communications. Yes, that skews the market, but there's no good alternative in the face of a natural monopoly.

But wires are less important, as distributed generation (so far primarily in the form of rooftop solar, but in the future via other means as well -- Bloom Box, anyone?) catches on. So now retail deregulation plus DG increasingly offers that alternative. Wires are still important, but less important than they once were.

Centralized utilities, as they exist today, are ultimately doomed, as DG and IT will inevitably cannibalize their currently insurmountable advantages. Someone will maintain the wires and connect remote loads and sources, so utilities as we know them won't disappear altogether. But over the long run, today's utilities will have to dramatically shift what they do -- leaving some huge economic rents to be captured by others.

I wish I saw more entrepreneurs focused on driving that shift.  You want to reinvent the energy industry?  Reinvent the utility.  It's an incredibly tough challenge -- but one worth taking on.

Rob Day: November 14, 2011, 12:27 PM

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What Is “Cleantech 2.0”?

Here's a not-atypical venture capital story:

An early-revenue (or sometimes even pre-revenue) stage venture-backed startup with promising early results wants to make a big splash and run really quickly, so they look to raise a large-ish "growth round".  

To identify a significant new lead investor for the round, they turn to investment bankers with their deeper rolodexes.  The i-bankers only take the assignment because the round will be big enough to provide large enough placement fees to justify their doing the work, versus some other larger transactions they could be working on instead.  For this reason, very few sub-$10 million venture capital rounds get big-named investment bankers placing them.

The i-bankers want to go to the types of large institutional investors in their rolodexes who typically cannot do direct investments into venture capital rounds, because of their check size requirement and other factors. Sovereign wealth funds, "growth equity" funds, pension funds, hedge funds, certain family offices, perhaps an aggregation of individual investors into a special-purpose vehicle, etc.  The i-bankers thus argue for an even bigger round, because then they can potentially bring in these very large check-writers who need to individually write (for example) a minimum of a $20 million check in order to get interested in any direct investment opportunity.  They also usually talk up the company as the best thing since sliced bread, naturally.

Now the round starts to look much larger than the company really needs at that particular point in time.  But that's okay to management and early investors because with these larger check-writers often comes a higher valuation.  If the round size doubled, it wouldn't be surprising to see the ultimate valuation also double, so that dilution for insiders remains roughly the same.  It's not justified that way overtly, of course.  But the existing investors and i-bankers and entrepreneurs all push for this outcome ("no way are we giving up more than x% of the company!"), and the outside larger investors mentioned above often aren't subject matter experts or well-positioned to do a lot of independent valuations and risk assessments of venture-stage companies. And of course, a company with such high growth aspirations must therefore have tremendous exit potential.  The valuation justification follows.  Sometimes the valuation is even established by the i-bankers instead of those actually writing the new checks.  Sometimes it's just that more bidders means a higher winning bid.

Either way, such a high valuation means investors' expectations are sky-high for the company's near-term growth and exit execution.  And they have the additional capital to deploy, so it's time to spend it toward acceleration.  Cash burn goes up.  And yet, not everything can be accelerated by simply spending more money.  Something along the way -- a technical challenge, a scale-up delay, slower-than-expected market adoption, a slammed-shut IPO window -- causes the startup to fail to hit their milestones even with the additional capital deployed.  Suddenly this high-profile company needs more cash, and is in a higher cash-burn situation with a weakened or "sidewise" story to tell.

Time to call in the i-bankers again.  And to start gathering as much non-dilutive government support as possible.  And to push a PR campaign.  And maybe to file an early IPO, as a financing event even if not a liquidity event.

Some such startups work through it. Others don't and flame out quite publicly.  Either way it certainly represents a potential negative selection bias in terms of which companies get the headlines, the big financing rounds, etc.  

This isn't a "good vs. bad" argument, I'm not suggesting that capital intensity never generates returns or is inherently evil, I'm not trying to invalidate i-bankers' roles or certain investment strategies; there's some good justification for a select few companies getting the above-described treatment. Certainly there are some great companies who get attention, government support, high valuations, etc, deservedly.  But there are also many who don't deserve it, as well as great companies who don't get this high profile treatment and its resultant press attention.  Some investors seem to drive their companies into this type of "hype-capital cycle" as a matter of course.

This cycle is what I believe people are implying was "Cleantech v1.0" when they talk about "Cleantech v2.0", as many are these days.  Nevertheless, I have yet to see any consistent definition out there of what Cleantech v2.0 means, other than "not Cleantech v1.0".

But understand -- the "hype-capital cycle" is a venture capital phenomenon.  It is not a cleantech phenomenon.  It happens in any number of venture sectors, to varying degrees.  

In the cleantech sector is where some of the more obvious examples of this cycle have occurred, especially a few years back.  But that should not in any way be used to argue that venture capital investments in the cleantech sector must necessarily look like any version of the above.  If the sector looks skewed toward capital intensity, in large part it's because the financial model applied to the sector has been skewed toward capital intensity, not because of some inherent underlying factor applying universally across the sector.

Cleantech is not capital intensive.  Some cleantech is capital intensive, but not all of it is.  Don't judge the entire sector by the fact that the above type of venture capital story gathered lots of headlines and dollars over the past few years, there are other stories to tell.  And in fact, "small cleantech" may ultimately get much bigger and provide better investor returns than any of the above story.  In other words, it may turn out that "Cleantech v2.0" actually looks a lot like "Venture Capital v1.0"... 

It's encouraging to see so many investors and industry participants actively seeking to develop a model for Cleantech v2.0.  But to date, it's mostly been defined by what it is not, than what it will be.