Redemption.
It's the theme for the weekend. Passover and Easter are about of renewal and rebirth. Its spring time. The winter has past and we made it. Our ancestors celebrated spring to remind us that just because there is no food for months doesn't mean it will be that way forever. Things change.
I heard a great story this week from an entrepreneur friend. Lets call him Bob (not his real name). He helped a small company with ad sales and dramatically increased their revenue. The board was so impressed they made him CEO.
After six months or so of pushing for more revenue growth, they flat lined and they were still loosing money. He decided to pivot with the small remaining funds in the company's coffers with just months of runway left. They would work through agencies and sell to larger brands instead of selling to direct marketers. Months went by and revenue was still flat. It wasn't working. The company was almost out of money. His strategy didn't work. He was fired.
The next day, Bob assembled the company and delivered the news. "I don't think I can ask you to do anything more," he said. Then the phone rang. It was an exec from a fortune 500 company. Within an hour, the executive placed an order that resulted in a 50% boost in their monthly revenue. And the calls kept coming over the week and the following weeks. Revenue doubled that month. And doubled again the following month. The company is now on a path to profitability. Bob is a hero again and the board revoked their decision to fire him.
When should a board fire a CEO? When should an entrepreneur keep going? When should they give up?
Persistance is the single best indicator of successful entrpreneurs. Only problem is that if you are persistent, you might chase an idea that is doomed. Intel's founders had the persistance to abandon the memory business and focus on microprocessors. It took ten years to make that bet pay off, but they succeeded in a big way. Meanwhile a company called Micron had persistance too. They stuck to the memory business and are forgotten today because they persisted down the wrong path.
Sometimes persistence and patience pays off. Sometimes spring arrives and the gloom lifts. Redemption happens.
Happy Passover. Happy Easter.
3:30-4:30 CST in Austin, Texas for SXSW, Hilton Garden Inn, Sabine Room
use #cleanweb to comment or ask questions.
NOTE: if you want to read the notes, download the PDF. For some reason, they don't show in the viewer.
If you are in rainy Austin, please join us for a gathering of the Cleanweb crowd.
If you are not here, you can join for questions on Twitter on channel #cleanweb at 3:30-4:30 CST (1:30 PST, 4:30 EST). Presentation portion will run about 20 minutes followed by discussion in the room and on twitter channel #cleanweb.
I'll post a PDF with notes in a sec
The title: Why Cleanweb will beat (and better) Cleantech. Hilton Garden Inn - Sabine 3:30-4:30 on Saturday
Also, try out Lanyrd to organize your Austin SXSW experience. I've been liking it.
http://lanyrd.com/2012/sxsw-interactive/spmmd/
Someone asked me the other day, "What are the characteristics that make a company part of the cleanweb?" Huh. Well that sounds like a great list to make. So, lets see.
# 5 Use of information technology. In some cases the ubiquity of cloud and mobile computing and the IT infrastructure makes us a bit blind to what is possible. Yes, this applies to almost every startup out there, but without innovate application of information technology, you aren't a cleanweb company.
# 4 Compete with fossils. Your competition is an incumbent product, service, or technology that was invented before 1970. Why 1970? By the late 1960s, most of the infrastructure of the modern world -- except IT and biotech -- had already been invented and deployed. Electricity, internal combustion engines, cars, trucks, jets, highways, subways, trains, ships, skyscrapers, newspapers, print, windows, and pretty much everything you see and experience when you walk around in the world. The opportunity of the cleanweb is to transform everyday objects and services into their more efficient and more awesome versions.
# 3 Make better use of existing resources. Companies like Airbnb and RelayRides are extracting more value from existing products and services.
# 2 Accelerate deployment of clean energy. Companies like Solar Mosaic, SunRun, Sungevity and OneRoof Energy, and Solar City are attacking 60% of the cost of retail solar electricity. Their success is fueling the rapid growth of solar in the US.
# 1 Change a business model. I can't think of a cleanweb company that doesn't innovate in business model. It's because reducing transaction costs (in the economic sense of the word), is core to cleanweb.
This list is abstract. If you really want more concrete examples see my first post on cleanweb here or my post on cleanweb in food here. I'd love to hear about specific cleanweb posts on other categories like transportation, buildings, food, water, energy, etc.
I gave a talk today at a Stanford GSB class taught by Dan Reicher and Stefan Reichelstein.
It was great to address the roughly 85 students who were a mixture of grad students from Business, Law, and Engineering. Plus it forced me to get a long-form discussion (almost 2 hours) of Cleanweb together.
I'm attaching the slides (PDF). I didn't video it (wish I had)
(Please note I haven't identified all the copyright holders for a few of the images I got off the Net, so careful where you use these.)
Monday I will do a lecture on "Information technology meets cleantech" for Dan Reicher's class at Stanford business school. Anyone who has been following me lately knows I'm obsessed with this idea of the cleanweb, which is not just application of IT to cleantech but a broader opportunity for IT to address the macro trend of resource limitations and burgeoning population.
Reading for preparation is part I of Carolota Perez's book:
Perez, C. (2002). Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages.
You can get much of the gist of the book at her website.
One of her key insights is that we are at the cusp of the "Golden Age" of information technology as it forms a synergy with renewables and globalization just previous golden ages formed a synergy -- in her terms a "techno-economy paradigm" -- like the automobile, oil, and mass production after world war II and the great depression.
BTW, Jeremy Rifkin is also writing about these topics, although I haven't yet read his book on the topic, The Third Industrial Revolution. My friends at Pure Energy Partners sent me a Cliff's notes version so I kinda feel like I have, though.
So, if you were a student in Dan's class on Monday, what would you want to know about this topic?
My inner achiever wants to do a good job on this lecture. Plus, this will serve as fodder for my more aggressively titled talk, "Why Cleanweb will beat Cleantech" at SXSW this spring.
Ask a question you'd want to ask if you were in this Stanford GSB!
It is an often-repeated mantra to "fail fast and fail often."
These are good words to inspire risk taking, but they've always struck me as somehow a bit off. I think I know why. What we want is not the the failing, but the learning that results.
An example: Brightmail.
When I first started working on anti-spam ideas back in the late 1990s in response to my ex-wife's complaints about porn in her email, my initial idea was to replace your inbox with a better inbox. These solutions would run on your own computer -- client software. They were good ideas I thought (the patent office agreed enough to later grant a patent). I hired some former FreeLoader software developers to write a prototype and I started talking to Internet Service Providers (ISPs) about the ideas. The ISPs hated it. The last thing they wanted was more client software to manage.
I figured the one place that might go for the idea was AOL, my former employer. They already had their own client software and I had lots of relationships at the company. Even they hated it! At that point, I knew we were beaten.
I assembled the software team at a meeting room in the Red Carpet Club at Dulles Airport. I told them it was over. The idea might be clever, but it had no customers.
As we we were leaving, I said, "I wonder if we can do something that works on the central servers? What would that look like?" And I went up to the whiteboard and sketched out a new idea that became the basis of Brightmail, the product that even today has about 80% market share for server anti-spam.
It was a small pivot - move functionality from client to server - but it changed everything. Now the same ISPs were interested and saying, "yes, if it worked even a little, we'd buy it."
ISPs were our early customers and then corporations. We grew to profitability and filed an S-1 to go public. Symantec gave us an offer to buy the company that took instead for $370M.
It turned out a silicon valley success story. But it weren't for that early pivot, it would have been an outright failure. The key was listening deeply to what potential customers were saying. They didn't like the idea of more client software but they were really struggling to stop spam. And they had scads of third party server products in their operations centers, so I figured another wouldn.
Sometimes failure is the only option. But the reason why failure is celebrated in silicon valley culture is because of the pivot. So don't fail. Pivot.
Today we announced the nominees for the 2011 Gigaton Awards. If others in industry follow their lead and governments take their responsibilities to set the proper rules for the marketplace, then we will solve the cllimate problem in this decade. The Gigaton Awards help light the way.
Capitalism is a powerful force. Channeled in the right way, it delivers wonderful things like air travel, the internet, and smart phones. When they aren't directed properly, they give us pollution, climate instability, unhealthy food, and more ills of modern society.
"...inspiring whole industries to change." - Sir Richard Branson on Gigaton Award nominees
There are companies that are quietly making progress on climate stability by focusing on what makes sense for them and what makes sense for society. The good news is that doing right for the climate is increasingly doing right for your shareholders. This year's nominees are from several sectors and headquartered in many countries. What they share is that they are achieving real results.
In early December at an awards ceremony in Durban, we'll unveil this year's winners. Last year's top winner was 3M, a company that made major reductions in emissions and also created products that advance renewables and energy efficiency.
Here is a picture from last year's award ceremony in Cancun of 3M's George Buckley holding the Gigaton Prize with co-presenters Sir Richard Branson and me.
The Gigaton Awards were inspired by my realization many years ago that we -- investors, entrepreneurs, businesspeople, policymakers -- don't really appreciate the scale of the climate problem or the scale of the solutions. I started the Gigaton Throwdown as an effort to inspire all of us to think big about solutions. The Gigaton Awards are run by the Carbon War Room and presented by Gigaton Throwdown, and the World Climate Summit. Carbon Disclosure Project is a key partner.
For details about this year's cermony, go here.
Cleanweb is the most leveraged way to address resource constraints of climate, energy, water, food, and land. It is the application of information technology to these challenges. For the first time information technology of social media, mobile, and internet allow us to reconfigure business models to be more efficient for capital and for resources.
What are some examples?
Two iconic examples. First Airbnb. This remarkable company started only a few years ago and each night they book the equivalent of two MGM Grand Hotels, the largest hotel in the US with 6,000 rooms. Here's the thing: they don't use hotels. They use people's spare bedrooms or apartments when they are away. Airbnb and its competitors like HomeAway are eliminating the need for any new hotels. Now that is impact. The greenest hotel is the one that doesn't get built.
Second, solar electricity. 60% of the cost of today's retail electricity come from "soft costs" like interest, permitting, engineering, sales and marketing. Most of that cost could be eliminated through cleanweb thinking and some companies like Sungevity, OneRoof and Mosaic are doing exactly that. Now get this: the unsubsidized cost of retail electricity is about 2x the US average retail grid price. Cleanweb could cut the price of retail electricity to be competitive with the US grid.
There are so many opportunities to expand the cleanweb into other realms and create fast-growing companies. I've written about some of these in the past here about food and lots of categories here. My partner at Spring recently posted the example of SAP, which has cut emissions and also saved money through many cleanweb innovations.
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