Recurrent Energy and Kaiser

SCE/Sunpower - T5 product

Wells Fargo and SunPower team up to offer PPA’s.

Interesting exchange between Greentech Media and Vinod Khosla..

As of January 2010, I have joined Renergy Capital, LLC as a partner, along with Jeff Phillips and John Markham.

We intend to finance distributed solar generation, fuel cell and other renewable energy projects at commercial scale.

But JLM, as Seth Godin says, sometimes it’s more important to know when to quit if you want to succeed (see “The Dip” for example). Always a fine line between persevering/”never say die” and “the definition of insanity is trying the same thing expecting a different result”. Sometimes you have to find the door instead of bashing your head against the same wall, but some times there is no door! I know you are a military historian, should the British have continued to fight in France (never say die/press on) to victory or retreated (quit) at Dunkirk? I bring this example up because I believe it is often cited as one of the greatest military decisions in history, preserving the men of the British army so they could eventually succeed in WWII, right? Look forward to your thoughts on this one.

Great post! Sometimes street smarts can take a while to sink in (or be rediscovered). I founded a company in 1999 and left a very staid old (low margin) industry to do so. The founder of my prior company had boostrapped it over 25 years into a $100M business and I learned a lot about how to run a lean and successful business from him. That all went out the window when we took venture capital in 1999. Every board member was on top of our management team to hire every consultant and headhunter we could find so we could “push out product out to the market” and “grab attention and market share” and “staff up”. I guess on the one hand they were right, because as Steve Blank says “in a bubble, get liquid”. With another round or two and a bunch more employees and some semi-useful software, I guess we could have emulated Ariba, Commerce One, or one of the other ecommerce/vertical market companies that never really had a solution that solved ANY significant problems but managed to make the employees rich, but we missed that window by about 6-12 months. That did not end well! Fast forward to my next two companies where we “recovered our street smarts” and bootstrapped and had to find early customers to make ends meet, and that discipline forced us to develop stuff that people would actually pay for. The flip side to that is that bootstrapping and trying to find quickly addressable markets can cause you to go after small markets/solutions that can’t result in the kind of home run you dream of as an entrepreneur. I guess there is a happy medium in there where street smarts combine with thinking big and if you look hard enough (maybe that is an element of street smarts as well) you find an addressable entry point to a large market. That way you get early traction but can grow into a situation where you can grab the brass ring in the large market. Again, thanks for the post and the series!

Similar to California’s AB 811 program, New York has just launched it’s own version:

“The legislation will empower communities to launch Property Assessed Clean Energy (PACE) loan programs, allowing them to leverage federal funds and provide loans to commercial and residential property owners. Property owners could then opt into these programs, finance energy efficiency retrofits and renewable energy systems and reap an immediate savings on their energy costs. They will be able to repay their loans via an annual charge on their property tax bill.”

Full Article - http://thegovmonitor.com/world_news/united_states/new-york-to-launch-pace-loan-programs-for-property-owners-16221.html

Steve Blank is the founder of e.Piphany  - a 1999 IPO deal that allowed him to retire.  His methodology is called “Customer Development” and involves iterating quickly based on customer feedback.  The earlier variants of this method (or similar anyway) include Guy Kawasaki’s iterative development model and “fail fast, fail quickly” models.

I think what’s changed now (vs 1999, when we were doing NetFreight.com) is that the COST of failing is so much less.  Back then, I think we were afraid to admit to our VC and other investors that we were wrong and needed to pivot and so we were actually afraid of customer feedback if it showed we were “wrong”.  We probably spent close to $2M before we even had an “alpha” out the door!

Today, with the free services or at least low cost cloud services available on the web, you really can fail much more cheaply, afford to be wrong more often until you get it right, and investors are more expectant and tolerant that you will be wrong before you get it right.

Steve also has great guidelines on how you know you are right based only on smaller sample sizes and stresses that you can’t even think about scaling the business until you have a product/customer fit.

You also have to think about what kind of market you are in.  Unless you are in an established market and are either trying to be the “best” or a cheaper or niche alternative, spending wildly to grow your sales typically won’t work, because there is no market there to spend it on (yet).  This lesson was learned the hard way by many, many “pioneers” who ended up only with arrows in their back (think Palm, B2B markets, etc.)

The customer development model can be applied to more than just tech or web businesses as well.  Right now in our renewable energy finance business, we are constantly trying to test different finance programs with different types of customers.  Hopefully by the end of the process we will have products that fit each customer segment for each type of tariff and renewable technology. I also struggle with how to characterize say the “solar” market.  Is it a new market that will still take time to develop or is it a segment of the overall established “energy” market where we will be “better” to some and “cheaper” to other.  I don’t think many people in the industry think about it that way, hopefully we can gain an advantage if we can come to the right conclusions and execute on them.

Check out Steve’s latest lecture posted on his blog.

Beyond just panels or the generation piece of the equation, there are many opportunities in the space surrounding solar - from racking and installation solutions, to inverters, to cooling to storage.

Couple interesting articles lately discuss the massive amounts of water the utility scale guys are applying to pump in the Mojave desert here in California:

“The Genesis Solar Energy Project would consume an estimated 536 million gallons of water a year, while the Mojave Solar Project would pump 705 million gallons annually for power-plant cooling, according to applications filed with the California Energy Commission.”  - full article.

The utility scale solar thermal guys want to use wet cooling because it’s more efficient than dry cooling.  Given the drought conditions here in CA (and the fact the desert is the best location for solar) along with dropping panel prices, it’s possible that the PV solutions may sooner or later give solar thermal a run for their money on these projects.

Also seems that somewhere some startup can figure out some creative process to create steam or cool these systems more economically (along with cleaning the mirrors/troughs) etc.