First of all, if you haven't read Michael Liebreich's recent column on the connections between shifts in the energy industry and in society, please do so. It's very well done.
Now, onto this column's topic at hand.
If you were to think of big companies from outside the energy industry that could be poised to radically disrupt the electric utility industry, Google (and its big-tech peers) would have to top the list. Google has, over the past decade, invested in early-stage energy tech, toyed around with legally establishing a utility structure, acquired home-energy automation company Nest, put hundreds of millions of dollars into renewable energy projects and project pools, and introduced a few online tools for potential use. It has the talent and the resources to do this at scale.
And yet, I find myself increasingly feeling like Google and these big players are asphyxiating cleantech entrepreneurs. Not on purpose, perhaps, but through "the dampening effects of dabbling," as Gregor Macdonald called it in response to a tweetstorm of mine recently. These tech giants talk a good game. But they're not taking it seriously, and so they're not playing the traditional "tentpole" role that such tech giants have played in creating ecosystems.
If Google et al. were really serious about deploying data, IT, etc., to reinvent the utility market, there's so much they could do. Imagine a Google-sponsored "utility of the future" with integrated end-to-end intelligence and controls on both sides of the meter, an aggressive embrace of distributed generation and distributed storage and automated demand response, and a utilization of that utility-customer relationship to drive lots of revenue-acquisition opportunities for other letters of the Alphabet, for massive economic synergy.
Is this a crazy vision, that Silicon Valley's tech giants could lead the reinvention of the electricity industry? Not according to their own rhetoric. Many of the tech giants are supposedly looking to this set of markets as a growth opportunity, worth encouraging and investing in. Cisco has proclaimed that renewable energy is a good investment and a key enabler of the "internet of everything." HP is getting into renewable energy because it is a "good business opportunity." And strongest of all, Google has declared that "we see renewable energy as a business opportunity and continue to invest in accelerating its development."
This is not just "we think being green is good" rhetoric (in which they would be joined by nearly all the other tech giants including Apple, Microsoft and Intel, among many others). In these cases, it's a declaration of strategic intent.
Well, if the strategic intent is to invest into growth or at least enhanced profitability through cleantech, the follow-through is starkly lacking. At Google, the company's previous early-stage energy tech investing has been pulled back, and Google Ventures hasn't been asked to fill the void. While Nest is doing some interesting things in energy, it's been made clear that the major strategic push for that business is in general home automation (fire detectors, cameras, etc.), and that most of the team there isn't focused on working the energy-savings angle. They're putting money into project investments that make money, but not into the startup platforms themselves. And their consumer tools (such as the recent rooftop solar assessment tool that's gotten a lot of press; more on that below) have been mostly pursued by individual engineers who are given some latitude by the company to follow their personal passion, rather than via any kind of strategic initiative.
If they were serious about "accelerating its development," Google et al. would be actively partnering with and even acquiring energy tech startups, at least on the service and data side. Instead, when I talk with such entrepreneurs, it's clear that most of them (unless they're already part of the Elon Musk related community) can't even get a meeting with the giants. This frustration is palpable, even from startups that have tens of millions of dollars in revenue. It's just not a real priority for the tech giants, despite the rhetoric. Or, alternatively, perhaps people somewhere within these behemoths are working on this business opportunity -- but if so, they're trying to do it all internally, instead of engaging with and building the broader ecosystem. Because they're certainly not talking with any of the entrepreneurs I talk to. And I talk to a lot of them.
The point isn't that this strategic disinterest on the part of the tech giants is somehow reprehensible, or even surprising. As energy prices have fallen, it's definitely taken the urgency away for many big companies to pursue this kind of agenda, and as the move to rebrand Google as Alphabet shows, there are plenty of other competing strategic priorities to capture their attention. Perhaps just distractedly dabbling in this massive market-disruption opportunity is actually the right shareholder-value move right now.
But for cleantech entrepreneurs, the impact of this distracted dabbling is that these tech giants are simultaneously taking a lot of the oxygen out of the room (scaring off investors, scaring away talent), while also not providing the partner and/or acquirer that cleantech entrepreneurs need to really drive their solutions forward at scale. The entrepreneurs feel like they have to compete with the deep-pocketed PR power of the tech giants, but are relegated to only partnering with and selling to the slower-moving industrial strategics.
It's not an active aggressiveness at all, but the headwinds these tech giants are creating are very real. A great example came this week. I can't tell you how many "check if your rooftop can get solar" online tools I've seen over the past few years, and yet Google puts out a press release about a limited-market launch of another such tool, and that gets all the breathless press attention as if the world had never seen anything like it before. More tools and more attention for this market are generally a good thing, so the author of that tool definitely deserves our thanks for doing it. But it's also an apt illustration of the missed opportunity for really massive impact on our markets if Google et al. ever decided to get serious about making an impact on these markets. Instead of just putting out press releases, to do it right would require a combination of internally developed systems and external startup engagement. They are not doing this.
Imagine if you are the coach of a kids' soccer team, and you're trying to coach your players to run to open space so they can get the ball passed to them with room to make plays happen -- to create a dynamic offense. And meanwhile, the biggest kid on the field just never passes the ball. It's great that the big kid is on your team, maybe. But if she just dribbles around endlessly, no one gets a chance to score.
These tech giants are happy to let the world think they're going to be getting into this market opportunity in a big way. At some point, perhaps they will. But in the meantime, the gap between their rhetoric and their actual, demonstrated strategic intent is big, and stifling for those startups working really hard to make progress during very lean times. If any of the letters of the Alphabet ever do get serious about learning about and tackling this $320 billion market opportunity, I know lots of entrepreneurs who will be eager to talk with them. I look forward to that day.