5 Comments

Summary:

Do recent struggles dominating the news represent the beginning of the end for green technology? Nah, it looks like business as usual for Silicon Valley. Only one in ten start-ups ever make it, VCs like to say, and failure makes you stronger.

Aptera Update: Factory Plans and the Big Bugaboo, China

In the past two weeks, we’ve seen at least three green technology CEOs sent home to spend more time with their families, two companies implode, a trade war escalate between China and the U.S. over solar  and Google cancel its program to develop technology that can producer power cheaper than coal. Only one bright spot of news has stood out recently: Siemens bought eMeter, a smart grid software company, for an undisclosed amount.

Do these struggles represent the beginning of the end for green technology?

Overall, it looks like business as usual for Silicon Valley, which, of course, is good. Only one in ten start-ups ever make it, VCs like to say. Failure makes you stronger. Some CEOs are visionaries and others are professional managers geared toward scaling up companies, etc. etc.

Remember all of those articles with journalists yammering about how green technology needs a Netscape moment? Well, this is it. But it’s not the moment when Netscape zoomed in its IPO. It’s the moment when it got absorbed into the gaping maw of AOL. Netscape became irrelevant, but life went on. The Internet, in fact, became even larger. Netscape’s demise simply proved that the so-called First Mover Advantage is vastly overrated.

Computing didn’t die with Sperry Rand either.

The analogy between green and computing isn’t perfect. Green technologies often require far more capital and time to get to market. Many also have to compete against existing technologies — like coal and incandescent light bulbs — that have spent decades winnowing out costs and building up manufacturing infrastructure. But VCs have thrown away large amounts of capital on companies serving the web, too. Anyone remember Akimbo? @Home? AltaVista?

Green technologies tend to get subjected to a higher level of scrutiny. Some critics seem emotionally dead set against the industry. Incumbents want to undermine it. Many entrepreneurs also grossly underestimated the technological challenges. Still, the reaction seems to go over the top. The founder of Friendster didn’t have to commit the public equivalent of self-immolation because Facebook succeeded and Friendster didn’t. But the public seems to want blood from every green company that fails to achieve corporate immortality.

Case Studies

Examine the two prominent collapses. Aptera wanted to make three-wheeled cars. Both Google and NRG Energy invested in it while Darrell Issa, the Republican Congressional Representative that championed investigations into Solyndra, sought to get federal loan guarantees for the company.

The Aptera 2e was a blast to drive. After emerging from the car during a test drive in San Francisco in 2009, individuals on the sidewalk stopped to take my picture and ask me questions. I felt like the Man of the Future: if only I had worn my silver skin suit.

But buy it? Three-wheeled cars have been nonstarters for years. Buckminster Fuller’s Dymaxion crashed during its public debut. Sidecars as a fashion statement went out with the Third Reich. The only truly successful three-wheeled vehicle has been the wheelbarrow. Aptera had one really interesting aspect to it: the body was made from a high-tech composite that is stronger than metal but far lighter.

Range Fuels, meanwhile, wanted to produce cellulosic biofuel with a variant of the Fischer-Tropsch process. FT, however, has only been popular with countries and regimes — Apartheid-era South Africa and again the Third Reich — cut off from oil imports. Companies with arguably more advanced processes leveraging biology — Solazyme, Gevo, and Amyris — all pulled off IPOs.

Range Fuel’s success in landing VC fund and government loans was to some degree due to its fortunate timing. It emerged at the dawn of green tech investing, when VCs and others were optimistic and desperate for new ideas to fund. At the time, many also mistakenly believed that the same skills required to succeed in computers would directly map to green. Mitch Mandich, a former Apple exec, served as CEO. Few people would now think, “Fuel additives, all-in-one desktops that come in five designer colors. It’s all just sales. Hire him.”

Now look at Google terminating the RE<C Program, an initiative to develop technologies that could produce electricity at cheaper prices than coal. A noble ambition, but not one for a software company. Google was building heliostats, or mirrors, for solar thermal power plants. Imagine being an engineer on that project. You’re in the company cafeteria where everyone is talking about deep linking and you’re trying to steer the conversation to reflective surfaces. All of your closest peers are at Brightsource Energy, 3M and DuPont. You might as well have a hairy mole on your upper lip.

Google, however, is not giving up on green energy. It desperately needs to get a handle on its energy consumption. It will continue to invest in solar farms, as well as use Google Ventures to get an early look at technologies like the AC-DC converters from Transphorm. In other words, it will begin to act more like Intel Capital than a nonprofit.

China’s trade war? Things will get cheaper and the case will drag out until everyone has forgotten it.

Only a few hit it big

And now for the positive news: Siemens will buy eMeter. For years, eMeter has been one of the most promising and successful start-ups in smart grid. If eMeter were a cloud company, it might have been able to stay independent for a longer time.

But the smart grid is an unusual market with a very, circumscribed client base. Only around 3,000 utilities exist in North America versus the hundreds of thousands of customers that want cloud services. Utilities also tend to be quite conservative. An acquisition was the logical, inevitable outcome.

Expect more to follow. Conglomerates like Siemens, Areva, Schneider, Toshiba and ABB have been on an extended shopping spree in the U.S.

So cheer up. This is par for the course.

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  1. Katie Fehrenbacher Monday, December 5, 2011

    Greentech struggles are business as usual for the Valley http://t.co/eqyN19iR

  2. Nathaniel Bullard Monday, December 5, 2011

    Greentech struggles are business as usual for the Valley http://t.co/q9Op1tM9 >the hairy mole on the upper lip, from @mikekanellos.

  3. RT @katiefehren: Greentech struggles are business as usual for the Valley http://t.co/eqyN19iR

  4. [DocDocc] Greentech struggles are business as usual for the Valley http://t.co/b1ERiND2 via gigaOM

  5. It maybe par for the course, but it doesn’t feel any better.

  6. Greentech struggles are business as usual for the Valley http://t.co/NUVDdsLC @amarchugg #news

  7. Ray Informatics Monday, December 5, 2011

    Greentech struggles are business as usual for the Valley: In the past two weeks, we’ve seen at least three green… http://t.co/igNq7WXh

  8. Crunked On Tech Monday, December 5, 2011

    Greentech struggles are business as usual for the Valley http://t.co/n5qGCMdl

  9. Greentech struggles are business as usual for the Valley http://t.co/SQKyHFRI @amarchugg #news

  10. Greentech struggles are business as usual for the Valley: In the past two weeks, we’ve seen at least three green… http://t.co/jsoKOIfT

  11. Greentech struggles are business as usual for the Valley: In the past two weeks, we’ve seen at least three green… http://t.co/qhi4BUoq

  12. Greentech struggles are business as usual for the Valley: In the past two weeks, we’ve seen at least three green… http://t.co/lt6FpBHz

  13. Searle Morris Monday, December 5, 2011

    Greentech struggles are business as usual for the Valley: In the past two weeks, we’ve seen at least three green… http://t.co/Ft5I22yT

  14. Elissa Angela Monday, December 5, 2011

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  16. amazinginteriors Monday, December 5, 2011

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  17. Yasbella Sebastian Monday, December 5, 2011

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  18. Roberts Chapman Monday, December 5, 2011

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  23. Peter Alexandrov Monday, December 5, 2011

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  26. Mitanshu Saini Monday, December 5, 2011

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  29. gigaom: Greentech struggles are business as usual for the Valley http://t.co/zVUZeG58

  30. gigaom: Greentech struggles are business as usual for the Valley http://t.co/zVUZeG58

  31. Torontogreenhouse Monday, December 5, 2011

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  32. David Cornish Monday, December 5, 2011

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  33. RT @gigaom: Greentech struggles are business as usual for the Valley http://t.co/iwUKm9LS

  34. Midlands Consulting Monday, December 5, 2011

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  35. All Trends IT Monday, December 5, 2011

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  36. ET Accelerator Monday, December 5, 2011

    Greentech struggles are business as usual for the Valley http://t.co/o727QRKs RT @gigaom

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  38. Peter Boshuis Monday, December 5, 2011

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  59. Annie Fishman Monday, December 5, 2011

    Greentech struggles are business as usual for the Valley; failure makes you stronger @ http://t.co/YpwIOpUE via @mikekanellos @GigaOM

  60. Daniel Goldfarb Monday, December 5, 2011

    Good article from @gigaom on why we shouldn’t panic about recent bad news in cleantech http://t.co/FiBwYfLZ #Google #RE<C #innovationishard

  61. Greentech struggles are business as usual for the Valley http://t.co/JX2MhGF7

  62. Greentech struggles are business as usual for the Valley http://t.co/HIWVqe1l

  63. нолимит Monday, December 5, 2011

    RT @gigaom: Greentech struggles are business as usual for the Valley http://t.co/iwUKm9LS

  64. Greentech struggles are business as usual for the Valley – Do recent struggles dominating the news represent the beg… http://t.co/EaSkkAVs

  65. Today American Monday, December 5, 2011

    [389] Greentech struggles are business as usual for the Valley
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  66. Worth reading MT @danielgoldfarb: Good article on why we shouldn’t panic about recent bad news in cleantech http://t.co/SRbDupg8

  67. Greentech struggles are business as usual for the Valley: In the past two weeks, we’ve seen… http://t.co/sMmaNNuW

  68. Commence Partners Monday, December 5, 2011

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  69. DistributionAdvice Monday, December 5, 2011

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  71. Greentech struggles are business as usual for the Valley: 5, 2011, 2:36pm PT No Comments In the past two weeks, … http://t.co/ONRoNa2w

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  73. Salazar @ Teelook Monday, December 5, 2011

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  74. Christophe BAILLON Monday, December 5, 2011

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  76. RT @gigaom: Greentech struggles are business as usual for the Valley http://t.co/iwUKm9LS

  77. Greentech struggles are business as usual for the Valley http://t.co/BNZ0DJgl

  78. Tech Venture Capital Monday, December 5, 2011

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  79. Stephen Taylor Monday, December 5, 2011

    Greentech struggles are business as usual for the Valley http://t.co/mdNCUyDY

  80. From @Mikekanellos! RT @katiefehren: Greentech struggles are business as usual for the Valley http://t.co/WUtNKKv7

  81. RT @UciliaWang: From @Mikekanellos! RT @katiefehren: Greentech struggles are business as usual for the Valley http://t.co/Jz0n1bzM

  82. Affiliate Marketer Monday, December 5, 2011

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  83. Masaharu_Shimizu Monday, December 5, 2011

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  84. Greentech struggles are business as usual for the Valley http://t.co/sfmQ7eRi

  85. Gregg McPherson Monday, December 5, 2011

    Best line: Sidecars as a fashion statement went out with the Third Reich, Greentech struggles are business as usual. http://t.co/s4Mb6iIe

  86. Greentech struggles are business as usual for the Valley – Do recent struggles dominating the news represent the beg… http://t.co/jzDuZoLN

  87. Srusti Ranjan Monday, December 5, 2011

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  88. Ogilvy PR Cleantech Monday, December 5, 2011

    Great piece by @katiefehren – Greentech struggles are business as usual for the Valley http://t.co/nL0xW9Cf

  89. Gregg McPherson Monday, December 5, 2011

    RT @cleantec: Greentech struggles are business as usual for the Valley http://t.co/Kt1qu9QZ

  90. Chicago Clean Energy Monday, December 5, 2011

    Greentech struggles are business as usual for the Valley http://t.co/chugeiLs

  91. Greentech struggles are business as usual for the Valley http://t.co/TEzqT5J3

  92. Greentech struggles are business as usual for the Valley — http://t.co/r79oZ2A5

  93. Karen J. Miller Monday, December 5, 2011

    Greentech struggles are business as usual for the Valley http://t.co/9fvNsKpI

  94. Guillaume Lardeux Monday, December 5, 2011

    Greentech struggles are business as usual for the Valley http://t.co/w4dha1LD > still waiting for a Netscape moment

  95. RT @gigaom: Greentech struggles are business as usual for the Valley http://t.co/iwUKm9LS

  96. Ruth Protpakorn Monday, December 5, 2011

    Greentech struggles are business as usual for the Valley http://t.co/CCDeicQS

  97. Q3 technologies Tuesday, December 6, 2011

    hmm.. eMeter eh ! Wonder how much they bought it for?

    Latest Technology Blog

    1. I wonder that myself. Some of these companies are notoriously cheap. I imagine it was pretty good though. EMeter has 20 plus customers and some big names: hydro one, etc.

  98. Greentech struggles are business as usual for the Valley: In the past two weeks, we’ve seen at least… http://t.co/eRl7yLEo via @gigaom

  99. Les #GreenTechs en ébullition dans la Valley http://t.co/tANk8Zuy http://t.co/HN0U5YKr

  100. Jean-Gabriel Morard Tuesday, December 6, 2011

    Re: “The only truly successful three-wheeled vehicle has been the wheelbarrow” – not quite true. Three-wheel scooters like this one: http://www.piaggiousa.com/scooters.html#!s=home/mp3-500 are very popular in Paris and in other cities in Europe. And they’re really cool, too.

  101. Milton Schultz Tuesday, December 6, 2011

    Greentech struggles are business as usual for the Valley … http://t.co/y7RUjokF

  102. Greentech struggles are business as usual for the Valley http://t.co/RpwZnZlj #cleantech #vc

  103. Greentech struggles are business as usual for the Valley — Cleantech News and Analysis http://t.co/OWV6xVsK

  104. Greentech struggles are business as usual for the Valley http://t.co/Ikmt8wpG

  105. Greentech struggles are business as usual for the Valley http://t.co/0AlbIEqg

  106. Silvio Marcacci Tuesday, December 6, 2011

    Clean tech industry struggles just seems like business as usual to Silicon Valley veterans http://t.co/OqJfOUsL #in

  107. Mike,

    the VC model that accepts 1 in 10 success rate also requires the one that wins to return 10X-100X. That isn’t happening in many Cleantech investments. The higher capital requirement means that more have to succeed modestly to cover the large failures.

  108. I just commented on “Greentech struggles are business as usual for the Valley” @gigaom: http://t.co/AqS4OCch via @gigaom

  109. Greentech struggles are business as usual for the Valley – GigaOm http://t.co/kO89OXhT

  110. Charles D’HAUSSY Thursday, December 8, 2011

    Greentech struggles are business as usual for the Valley http://t.co/0iGucHTh

  111. Greentech struggles are BAU for the Valley… but Siemens, Schneider, Toshiba, ABB are on a shopping spree in the U.S.
    http://t.co/vj4trKCU

  112. Camila Yusufzai Saturday, December 10, 2011

    Greentech struggles are business as usual for the Valley – GigaOm http://t.co/K3NtmcDp

  113. Carbon War Room Tuesday, December 13, 2011

    Failure makes you stronger #entrepreneur http://t.co/TD9vRMzp

  114. RT @cwarroom: Failure makes you stronger #entrepreneur http://t.co/TD9vRMzp

  115. RT @cwarroom: Failure makes you stronger #entrepreneur http://t.co/TD9vRMzp

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