There have been a wave of articles over the past year lamenting how Silicon Valley doesn’t seem to be creating anything meaningful anymore; how it’s all about sexting apps and Pinterest clones now. How entrepreneurs aren’t trying to tackle tough big problems anymore.
Clearly these writers are not talking to the same people I’ve spent the last seven years talking to.
The latest comes from the New York Times, which identifies Silicon Valley’s ‘Youth Problem’ — the idea that young talent is being attracted to these buzzy, cool, sometimes frivolous companies more than ever before, creating a gap between the old-guard engineers that built the infrastructure of the internet and the privileged developer youth that is flocking to San Francisco’s Mission District and driving up housing prices.
Most of these articles — including the lengthy Times one this morning — are true enough and bring up a lot of interesting points. There has been massive investment and attention on social apps in recent months.
But I think many of these articles are missing some key parts of the story. That there’s already a Valley movement to tackle hard world-changing problems: it’s been called cleantech over the past several years, and it’s now emerging with savvier, more sober ideas. Also, realize something that is often overlooked in these articles: young people like never before want to work on world-changing, social good projects and innovations.
The trends behind cleantech are seeing a resurgence
I read the New York Times article this morning while in the audience of the Cleantech Group’s annual summit in San Francisco. As I skimmed over paragraphs about how young talent is flocking to sexting apps, I heard pitches from young entrepreneurs about water software, and drones for more efficient farming. Behind me the team from ScootNetworks was marketing its electric scooter sharing program.
A lot of these entrepreneurs will realize how hard energy and cleantech is, but they’re still out there, looking to build technologies that have a meaningful impact on big world problems. Opower’s CEO Dan Yates kicked off the morning by saying he’s seen a resurgence in cleantech over the past 18 months, though he also encouraged entrepreneurs to be satisfied with creating incremental solutions to start, rather than trying to bite off the whole problem.
What many of these articles miss is that a solid portion of Silicon Valley (entrepreneurs and investors) piled money and time into these lofty ideas and big problems, calling it “cleantech.” I’ve covered the irrational exuberance, the bubble and the bust of the cleantech phenomenon ad nauseum at Gigaom, but this section of entrepreneurs is still largely overlooked in much of the story of the Valley.
That’s because a bunch of those entrepreneurs and investors lost money and pride, and had to change course or exit the industry. Obviously young talent doesn’t want to flock to a sector that routinely isn’t making people wealthy. Media coverage like the 60 Minutes piece don’t help with that negative branding of cleantech.
But there were some major winners out of that crazy era, too, like Elon Musk with Tesla Motors and SolarCity, which are changing both the auto industry and the energy sector. As the years go by and more of the investments mature from that initial cleantech investing wave, there will be even more large exits like Google’s acquisition of Nest, and Opower’s IPO.
Another part of the cleantech story is that hard lessons have been learned and the sector has evolved. The startups pitching during the opening of the Cleantech Group summit “look like the evolution of cleantech,” said Chrysalix Energy Venture Capital’s Wal Van Lierop — i.e., they’re using more digital technologies, they’re leaner and they’re not going to plow hundreds of millions of dollars into factories to prove out their technology. In a way, they’re just plain smarter (or the investor that funds them will be).
Cleantech is more sober. The Cleantech Group Summit seems a bit smaller. There will still be a crunch to get Series A funding for the early-stage startups. But all of that is a good thing.
Social good is cool
Finally, the story isn’t just about cleantech. Young people are interested and motivated by social good and world-changing ideas more than ever before and are actively looking for these opportunities. Companies that are good at recruiting young talent talk about creating a “mission-driven” culture. Google has known this for years and it’s only one reason why it tackles projects like putting $1 billion into clean power farms across the U.S.
Social good can mean a lot of things, but the overall idea is that whatever product, app or tool a company is building is making the world a better place somehow. Impact investing is another way to describe this investment trend. Sustainability is another from a corporate perspective as well as a venture capital angle.
The author of the New York Times article said what young talent really cares about is stuff that is “cool.” Social good is cool. Cleantech might not be cool now, but it was once and it will be again; it just might not be called cleantech.
Tesla and Elon Musk are cool. Nest and Tony Fadell are cool. As more proof emerges that startups tackling hard problems can make money, more young talent will be flocking to the next Teslas and Nests.