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Home Star, a great idea

Rob Day: November 22, 2009, 8:25 PM

You're a DC politician.  You want to do something to promote jobs growth.  You want to do something to make a reduction in carbon emissions more feasible and rapidly implementable.  And you'd love the idea of being able to give some kind of tangible value to your constituents.

Thus, Home Star is born.  The idea would be that homeowners would (either directly in the form of a voucher, or via overseeing programs, or via tax credits) get significant financial credit toward the cost of accredited home energy efficiency retrofits.  Stopping up air loss, improving insulation, upgrading appliances, etc.  It's not rocket science, but it takes someone pretty knowledgeable to do it right.  And it can save a ton of energy and dollars for homeowners.

We've known about the potential savings for a while.  The White House recently put out a report showing that residential energy efficiency retrofits on a mass scale could save homeowners $21B per year and reduce carbon emissions by 160 million tco2e per year.  The problem has been getting homeowners to actually DO it.  Left to their own devices, many homeowners balk at the up front costs involved, and don't know where to start finding a good retrofitter to work with.  So the savings don't happen.

So it makes sense to devote some resources to giving it a kick-start, helping to reduce the upfront costs and putting in place programs to help homeowners find trustworthy, qualified consultants to do the work. 

And yet VCs are challenged by this market.  The problem for VCs isn't that this isn't an attractive entrepreneurial opportunity.  It's that they don't see how to achieve a 10x out of it.  Tough to find proprietary, scalable technology-type plays that would result in high value exits.  A couple of companies have been backed in the space by institutional VCs, but even Sustainable Spaces (one of the more visible venture-backed residential retrofitters) is said to be shifting away from service and into IT-based offerings.  There are a ton of home energy monitoring efforts, but it can be tough to see any being truly differentiated from the pack.  VCs are trying to get in through the meter via smart grid type investments, but still, at the end of the day... There will need to be someone actually providing the service part of the solution. 

Home Star would be a great idea, here's hoping it happens.  And if it does, I would expect to see several VCs jump into backing service companies in the sector, following the money.  But it'll be interesting to see how they position such investments in terms of their fit with the traditional VC investment model...

PS: I will be away from blogging capabilities for the next week, so Happy Thanksgiving everyone!

Exciting news

Rob Day: November 12, 2009, 10:58 PM

Long-time readers will know that in my spare time (ha) I've been serving as President of the Renewable Energy Business Network, a non-profit I and Andrew Friendly of ATV officially co-founded last year (although read below for more backstory)...

Yesterday we were extremely pleased to announce that REBN and the Clean Economy Network have joined forces, with the REBN network of chapters and leaders being integrated into the Clean Economy Network Foundation. 

It's an exciting move that will mean bringing a lot more professional leadership to the combined effort, with the existing REBN leadership team (both organizational and chapter-level) joining forces with the very strong CENF team.  REBN had, over the course of the last couple of years, grown by leaps and bounds, from an initial handful of chapters to now 17 chapters across the US and Canada, strong support from sponsors like Rosenzweig & Company, Mintz Levin, Holland + Knight, Silicon Valley Bank, and Hattaway Communications, more than 10,000 chapter-level members and a pretty darn big online group at LinkedIn as well.  REBN became big enough, at least, that the pursuit of our educational and community-building mission needed some additional support.  And meanwhile, we had gotten to know the great team at CEN and found them to be completely on top of everything going on in the clean economy world, especially in regards to policy, which as we talk about on this site is so increasingly important for cleantech entrepreneurs and investors to know about.  So when we started talking with each other about making a move like this, it seemed like a good match then and feels like a great match today.

It's been a wild, fun ride with REBN to date.  REBN was actually the brainchild of a small group of smart young clean energy businesspeople, including the likes of Dan Kalafatas and Josie Gaillard and others, all of whom early in this decade came up with the idea of a low-key networking group in the San Francisco area to help renewable energy business types meet with each other, learn about the industry, find new business and startup opportunities, etc.  That initial chapter did well, and at some point I got roped into taking on the role of chapter lead (I believe I grumbled about it to Dan and Josie at the time, but owe them a debt of gratitude now), and we held get-togethers, organized panel discussions, etc.  It was a great, easy resource, so when I moved out to Boston in 2007, I left the group in Nick Allen's very capable hands, and Andrew Friendly and I talked about finding a similar organization in Boston to join and enjoy.  But we discovered that there really wasn't one, at least not with the same feel as REBN.  So we launched "REBN-East", and what we thought would be a very small thing ended up getting a pretty big crowd.  Apparently San Francisco wasn't the only place where there was a big unmet need for low-key, come-as-you-are, open-to-all education and networking for cleantech professionals. 

Then we were contacted by Cheng Chang in Houston, who let us know that he'd heard about REBN and liked the idea and was going to launch a chapter there.  At that point, REBN was still unincorporated but had three chapters going across the country, and thriving.  Suddenly, Andrew and I had one of those moments where we just looked at each other and realized, "wow, there's really something here."  And so we decided to officially launch REBN as an incorporated non-profit organization, and put some effort behind it.  We press-ganged recruited Laura Bartsch and Helen Fairman to serve as part-time co-executive directors, and then held an official launch event and started spreading the word.  Before you knew it, we had nearly ten chapters, and then things just started snowballing from there.

As far as I can tell, the success of REBN has been due to its open-access and low-key educational/sharing format, and in huge part to the way that our volunteer chapter leads have stepped up to help organize chapters in their regions, in a really decentralized format where we in the tiny REBN national leadership team were constantly being amazed by the huge successes of chapter leads in places like Philadelphia, Minneapolis - St. Paul, Denver, New York, and elsewhere, without a lot of guidance, just smart entrepreneurial businesspeople working to build a regional clean economy.  An amazing effort by amazing businesspeople, far too many for me to list here, but when you go attend a REBN/CEN event in your region now, make sure and tell them "thanks" for all their volunteer efforts, will you please?  And there should be an upcoming event over the next couple of months in every one of our chapters, to celebrate this news.

The Clean Economy Network team now brings a level of policy knowledge to this effort this is exciting to be a part of.  We've got some fun things in store that will start with the traditional REBN-type activities that existing members are used to, and will build from there, bringing in even more educational content and business-building opportunities.  And we're certainly not going to lose the familiar REBN style -- doing what we can to contribute to regional clean economy efforts in whatever way makes most sense for each community, with dull elbows and small egos.  Take a look, and think about signing up at if you're interested in getting involved. Of course, CEN's c4 sister organization is also doing a lot of community-building in another venue: In the policy realm.  Lots to do there as well, lots of opportunities to get involved. 

Big thanks to the many people involved in getting REBN launched and growing it to this point, from the early days in SF to the nationwide effort it's become.  And big thanks to our new colleagues at CEN!  Their vision and execution has been what has really inspired us to take this next step with them.

Of course, now I need to come up with another personal new next big thing.  Suggestions are welcomed!!!


Friday follies

Rob Day: November 6, 2009, 11:00 AM

Some random links and observations on a Friday:

  • Apparently not every reader picked up on the fact that my last post was tongue-in-cheek.  Guess you had to be there.  Fortunately, Scott was in fact there...
  • David Gold wrote recently on some of the same issues, wondering why solar and the like have gotten so much attention from VCs while technologies like geothermal have gotten much less attention.  His answer is that in large part "much of the bias has to do with the fact that not many VCs have strong networks of geologists, drilling technologists, heat pump engineers and steam turbine power generation experts to build great geothermal companies".  I'm directionally in alignment with David's take -- obviously I agree that VCs need to broaden their horizons into other sectors of cleantech, and acknowledge it's easier said than done when it requires learning new markets, new technologies, etc.  However, I'm not sure geothermal is the best example for this.  VCs going into solar and biofuels are following the few available examples of good exits in the sector, geothermal plays are often challenged in VC eyes in terms of their capital intensity and lack of opportunities for new intellectual property, and it's not yet a fast-adopting market.  Same challenges for VCs looking into other sectors like ocean power, grid-scale storage, etc.  Like it or not, not all attractive market opportunities are a good fit for the venture capital model.


Conventional wisdom and cleantech venture capital

Rob Day: November 4, 2009, 6:02 PM

I had the pleasure of speaking as part of a panel this morning at the Mid-Atlantic Capital Alliance's conference in Philadelphia.  Here's a taste of what I told them:

1.  Cleantech only happens in Silicon Valley and MIT.  If you look at the dollars flowing into cleantech from venture capitalists, and read the sunday NYT, that's the natural conclusion you would draw.  So my apologies to everyone in Philly (or the rest of the country outside of northern California and Boston), there's clearly very little good entrepreneurial activity in cleantech in your region.

2.  Cleantech is really only solar, "smart grid", biofuels and electric vehicles. 

3.  Cleantech is really only about capital intensive business models. 

4.  Cleantech startups are only for whiz-bang PhD researchers who have earth-shattering innovations.  Business models like energy efficiency services, and other implementation efforts, need not apply.

5.  The only good cleantech startups are those backed by VCs.  The fact that only 1% of startups get their initial capital from VCs simply means that 99% of new businesses are bad ideas.

I was supposed to describe what I like about being an investor in this market right now.  And I told them that what I like about this market is that many people actually do believe the above points.