# What 60 Minutes got right and wrong in its story on the “cleantech crash”

As soon as 60 Minutes aired its story on “the cleantech crash,” on Sunday night, my Twitter feed immediately erupted in hand wringing and complaints (and yes, my feed is filled with a mix of environmentalists, cleantech advocates and investors). Full disclosure, I spoke with the producers of the 60 Minutes piece on background a few times over the past few months as they were putting it together, just to try to help them go in the right direction.

Contrary to the reaction of many of my Twitter friends, I think 60 Minutes got some key things right in the story, but they also got a couple of things wrong in there, too — most importantly they’re overlapping the Valley story with the government funding story. Here’s my take on their piece, which — to their credit — is one of the more comprehensive mainstream media looks at what was the VC cleantech phenomenon:

1). RIGHT: From a purely venture capital perspective, cleantech has been ugly and it has “crashed.” I don’t think you can argue rationally that this hasn’t happened; again, only in the venture capital, Silicon Valley ecosystem. And yes, there are a couple exceptions that emerged from the Valley that made it through, like Tesla.

As I’ve covered many times over the past six years, venture capitalists lost a lot of money on cleantech (Kleiner Perkins being the poster child of this), and many have now left the sector. At the same time, entrepreneurs widely know there’s very little money available for early stage “cleantech” startups anymore, and the limited partners that back venture funds don’t want the VCs to invest their money in anything called cleantech these days.

There was a very real bubble and bust that happened, though there are still firms around that have evolved and are sticking with it. Will it come back like the second wave of the internet? There will be some more successes in the future but I don’t think the equivalent massive amount of money from VCs will emerge again.

A lot of the 60 Minutes piece was trying to cover this Valley aspect and I think they did a good job of that. The VCs did lean on government connections and support at times, and they made a lot of mistakes.

Vinod Khosla is also the right guy to talk to, as he’s the enigma that says his firm is going to continue to fund the cleantech sector at an aggressive pace, despite the difficulties. It was probably pretty hard to find a VC that would admit on camera that she or he made a bunch of weak investments in cleantech and now, hat in hand, is exiting the scene.

2). WRONG: Unfortunately, playing up the taxpayer-funded government green-flop angle in the piece was both stale and overblown. It’s been covered ad nauseum not only in the political arena, but also in more mainstream pieces like the Wired one two years ago.

There were a few companies in manufacturing that were backed by the Department of Energy loan program that were clear mistakes — Solyndra and Fisker — but some of the other companies mentioned in the piece were either very minor losses or also still have promising tech that is being developed under a different owner. Leslie Stahl named 9 companies that didn’t do well for various reasons (not all from the loan program) and then dramatically declared she’s exhausted from naming them all.

As Michael Grunwald has pointed out in his book The New New Deal, government support — from the Department of Energy through the stimulus — has created a large amount of jobs over the years. Beyond the stimulus, solar panels and wind power have reached record levels in the U.S. in the last year and that’s also thanks to U.S. government support. Even within the loan program, there were more wins than the 60 Minutes piece let on, like the Ivanpah solar farm that created a lot of jobs outside of Las Vegas. The U.S. government needs to give more support to next-generation energy technologies, not less.

Part of the problem with the 60 Minutes piece is that it’s combining the story of U.S. support for clean power and energy efficiency, with the Silicon Valley story. They’re totally separate and different. The subhead of the piece is a prime example of the confusing aligning of those two things:

“Despite billions invested by the U.S. government in so-called “Cleantech” energy, Washington and Silicon Valley have little to show for it.”

Um, does that include the huge gains in wind farms and solar panel projects in the U.S., or does that just mean that Solyndra didn’t work out? Because, Solyndra happened in the summer of 2011; two and a half years ago. The underlying problem is that “cleantech” is a convoluted term that can mean many things, and isn’t all that helpful as an organizing group. Let’s figure out in 2014 if we should kill that term or not.

3). WRONG: The piece had a very, very light touch on Kior. The company’s stumbles are far bigger than explained in the story, from missing its volume production goals, to having a stock hovering between $1.50 and$2, down from an IPO price of \$15 per share, to having a law suit from investors. Yes, it’s possible that they’ll pull through and meet expectations, but more likely is that they won’t. That’s just the realities of the difficult business.

4). RIGHT: Because it’s 60 Minutes they end on an upbeat aspirational note, with a statement from Khosla on being a dreamer:

In fact you need dreamers to stretch. I probably have failed more times in my life than almost anybody I know. But that’s because I’ve tried more things. And I’m not afraid to fail because the consequences of avoiding failure are doing nothing.

As I said in this piece about Kleiner Perkins, I think the VCs that put money into some of these cleantech innovations actually deserve a bit of our admiration, despite that some of the investments weren’t so wise, and many haven’t yet proven to be good for their funds.

They tried to bring us jetpacks, and they hoped to create some real fundamental innovation in sectors like energy that are super important for the world. The rest of their peers made money off of sectors that don’t necessarily have a direct benefit for society like gaming, social media, or online commerce.

Money is the goal in the end either way, but the Valley has always been about risk taking, and the cleantech VCs took the biggest risks out of anyone in the Valley of the past half decade. Hopefully there’s a next wave of these investors that are making smaller, quieter, and more informed bets and will some day show there’s a model in the Valley that will work.