Entrepreneurial Opportunities In Cleantech
Workshop at Sweden - U.S.
Entrepreneurial Forum 2008
October 23, 2008
Prepared by Tom Kosnik
Fenwick and West Consulting Professor
Agenda
• Cleantech VC investment Trends
• Cleantech Categories
• Exercise: Which Categories interest you?
• Exercise: Where is your category on the adoption
life cycle?
• Clusters, Circles of Influence, and Context
• Forces in context affecting adoption of cleantech
innovations
• Cleantech Entrepreneurs going global face a
“double Chasm”
• How would you approach visionary VCs in SV?
Energy Related VC
Investments Soared
in
2008
USD
Millions
Energy VC Investments
$7 000
$6 000
$5 000
$4 000
$3 000
Energy VC Investments
$2 000
$1 000
$0
CleanTech Categories
1.  Clean Air
2.  Clean Water
Categories
3.  Waste Treatment
Adapted from:
4.  Energy Efficiency
5.  Green Building
6.  Renewable Energy
7.  Smart Power
8.  Clean Transportation
9.  Clean Cosmetics
10.  Cleantech Social Movements
Where is your
Cleantech Category
here in Sweden?
Revenue Growth
Indefinitely elastic
middle
Chasm
Growth
Market
B
C
Mature
Market
Declining
Market
A
Technology Adoption
Life Cycle
® Copyright 2007
Mohr, Davidow Ventures
D
Fault
Line!
E
End of
Life
Time
Source: Moore Geoffrey A. (2002), Crossing the Chasm; Moore (2005), Dealing with Darwin
Launching a Cleantech Venture:
Clusters, Circles of Influence, and Context Presented by Tom Kosnik,
Fenwick and West Consulting Professor,
Stanford Technology Ventures Program
October 23, 2008
This part of the workshop is based on an upcoming book:
Lena Ramfelt & Thomas J. Kosnik (Under Review)
Circles of Influence
If you circulate any part of this
presentation please give credit to the authors.
Lessons from Silicon Valley: Slide #6
Launching a Cleantech Venture: Clusters, Circles of Influence, and Context •
•
•
•
Clusters, Circles of Influence (CoI)
Context
Forces in context that may affect adoption of a
cleantech innovation
Lessons from Silicon Valley: Slide #7
What’s a cluster?
•
•
•
•
A region engaged in entrepreneurial activity.
Bigger than a single city.
Smaller (usually) than a state or country.
Examples:
–  Silicon Valley
–  Kista, Sweden (Wireless Valley)
–  Singapore a cluster that is also a country
–  Beijing
–  Hong Kong
–  Shanghai
–  Route 128 outside Boston
–  Palau (a country that is becoming a cluster)
Lessons from Silicon Valley: Slide #8
Examples of clusters
Lessons from Silicon Valley: Slide #9
What Are the Circles of Influence? Players who bet stakes on you – but you’ve got to know the code!
Stakes
Players
Code
Circles of
Influence!
Lessons from Silicon Valley: Slide #10
Players help entrepreneurs get stakes to play the game
•  Venture capital firms
The major players in
•  Angel Investors
Silicon Valley…
•  Research Universities (Stanford and Cal)
•  Silicon Valley Law firms
•  Investment banking firms
•  Stock exchanges (NASDAQ, NYSE, etc.)
•  TiE, Monte Jade, other societies
•  BASES, ASES, Energy Crossroads, SWIB
•  Public Accounting firms
•  Consulting firms
•  Executive search firms
•  Business and Technical News Media, Blogs…
•  Joint Venture Silicon Valley
•  Government agencies
Lessons from Silicon Valley: Slide #11
How are they similar or
different in your home
cluster?
The stakes include…
Money
Time
Relationships &
Social Networks
Passion
Talent
Technology
And much more…
Lessons from Silicon Valley: Slide #12
But to get the players to put up the stakes,
you’ve got to know the code…
•
•
•
•
•
•
•
Rules of the game and rules of thumb
Explicit and implicit
Verbal and written
Communicated in public and private
Hard to learn and easy to forget
Rooted in cultures of countries and regions
Varies across industries and functional disciplines.
Lessons from Silicon Valley: Slide #13
Context surrounds the Circles of Influence in any cluster
Players
Stakes
Code
Lessons from Silicon Valley: Slide #14
Why is Context Important?
•  It affects the adoption of cleantech
innovations.
•  It affects your sources of funding
•  In the short run it’s outside your control.
•  In the long run, a wise community of
entrepreneurs, investors, community
leaders, and government leaders can
change your context – through the Circles
of Influence.
Lessons from Silicon Valley: Slide #15
Forces in context affect adoption of
cleantech innovations
Players
Stakes
Code
What 5 context factors have biggest impact
on adoption of your Cleantech innovation?
Lessons from Silicon Valley: Slide #16
Cleantech entrepreneurs
face a “Double Chasm”
as you go global
17
The Technology
Chasm
Resistance
to Risk
Tornado
Early
Market
Chasm
Techies
Visionaries
Bowling
Alley
Main
Street
Total
Assimilation
Pragmatists Conservatives Skeptics
Adapted from: Moore (2002), Crossing the Chasm.
18
The Cultural Chasm
Lack of
Experience
“Foreign”
High-tech
venture
19
Lack of Trust
Language
Laws
Business Ecosystem
Business-Government
Education
Religion
Culture
Ethics
Circles of Influence
Provincial Code
Adopters
in a new country’s
Local culture
Visionary VCs are
Fishing for
Cleantech Winners.
How would you approach
Visionary Cleantech VCs
in Silicon Valley?
Kleiner Perkins
Caulfield and Byers
21 partners focused on Cleantech, http://kpcb.com
including Al Gore and John Doerr
Khosla Ventuers
Vinod Khosla left KPCB to focus
on cleantech
http://www.khoslaventures.com/
Mohr Davidow Ventures Eric Straser was an early mover in http://mdv.com/
cleantech VC
Foundation Capital
Foundation Capital recognized for http://
leadership in cleantech. Steve
www.foundationcapital.com/
Vassalo was an early mover
Draper, Fisher
Jurvetson (DFJ)
Global focus, Raj Atluru was
early mover in clearntech
Technology Partners
Ira Ehrenpreis was an early mover http://
in cleantech
www.technologypartners.com/
Lightspeed Venture
Partners
Moving rapidly into cleantech.
Andrew Chung is a rising star.
http://dfj.com/
http://www.lightspeedvp.com/
Where can you learn more?
(California) Cleantech Open
http://www.cleantechopen.com/
DFJ Entrepreneurial Thought Leaders (ETL) Program
http://etl.stanford.edu
Energy Crossroads:
http://energycrossroads.org/
Global Entrepreneurial Marketing (GEM)
http://gem.stanford.edu
Stanford Technology Ventures Program:
http://stvp.stanford.edu
STVP Educators Corner
http://ecorner.stanford.edu/
Thank you for your
insights in this
workshop!
Tom Kosnik
Skype: thomas.j.kosnik
1-650 450 3330
The Three Horizons
3. Create options for
future businesses
2. Build momentum
Horizon 3
of emerging new
Next generation
businesses
Positioning the Next Big Thing
1. Defend & extend
Horizon 2
current critical
12 to 30 months away
businesses
Segment share, profitable growth, CAGR forecast
Horizon 1
Next 12 months
Market share, revenues, margins
Time (1999) The Alchemy of Growth
Adapted from Baghadi, Coly and White
The Three Horizons
3. Create options for
future businesses
2. Build momentum
of emerging new
businesses
1. Defend & extend
current critical
businesses
Product categories:……
Markets - geos:………
Markets – verticals:…….
Product categories: ………………………..
Markets - geos: …………………………….
Markets – verticals: ………………………..
Product categories: …………………………….
Markets - geos: …………………………………
Markets – verticals: …………………………….
Time (1999) The Alchemy of Growth
Adapted from Baghadi, Coly and White
How might Porter’s Five Forces - And Other Factors –
Affect your Cleantech Category?
Macroeconomic
Change
Political
Situation
Social Activism &
Interest Groups
Changes in
Customers’
Customers
Regulation,
Deregulation,
Re-regulation
Demographic/
Psychographic
Changes
Technological
Change
Ecological
Change
Adapted from Porter, Michael (1980), Competitive Strategy, Free Press
Stanford Center for Professional Development
• 26
Cleantech
Chasm Crossing
is scary and fun!