The Next Big Thing is Upon Us

My last posting suggested that growing fear global warming’s of the economic and ecological consequences of — and the usual greed for profits –would combine to provide emotional stimulus for the venture capital industry to lead the clean technology revolution. In addition to being in tune with the usual emotional motivators to investment and action, the VC industry also has the skills and smarts to lead the transition to a sustainable, global industrial society. As a group, we are skilled at identifying paradigm shifting opportunities for investment. Such opportunities are relatively rare, but when they arise, they often provide phenomenal returns. At Friday’s “State of the Valley” conference hosted by Joint Venture Silicon Valley (see www.jointventure.org), John Doerr of Kleiner Perkins Caufield & Byers called clean technology “the largest economic opportunity of the 21st century. “ Folks, the next big thing is upon us.
 
We’re living through two such paradigm shifts in communications. The Internet has revolutionized the way we conduct business and shrunk the world. Wireless technologies have made communications ubiquitous and have enabled the less develop world to skip the outmoded, paired copper wire, legacy infrastructure. As investors, we are comfortable and facile with disruptive technologies and are well suited to lead the coming paradigm shifts in energy and transportation.
 
Human society’s current annual energy consumption is less than 1/100th of one percent of the total annual solar energy supplied by the sun. (see www.hubbertpeak.com). Thomas Edison is quoted to have said “I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait ’til oil and coal run out before we tackle that.” We have just begun to tap the infinite potential of solar energy. 

In one of the few lucid moments of his presidency, President Bush admitted that we are addicted to oil. This simple statement may turn out to have been the greatest legacy of his presidency. The hardest thing for addicts is to admit their addiction. Our global industrial society’s addiction creates trade imbalances and geopolitical strife, and will cook the planet if we allow it to run its course. For a Texas oilman to admit our collective addiction is a huge step in the right direction.

Before we blindly plow up the Great Plains to feed our addiction with corn based ethanol, why not take a hard look at our energy habits? Does each of us really need to consume as much energy as we do? Do we really need a three ton SUV to drive to Safeway to buy a quart of milk? While we are developing alternative energy technologies, we can take some of the pressure off the system by reducing our demand. Create negowatts by making our next luxury cars Civic or Prius hybrids. Let’s lead the paradigm shift with our behavior and our investments.
 
The transportation sector is ripe for a paradigm shift. Hybrid vehicles are one step in this shift. Plug in hybrids will come next. But these are only incremental shifts because these new vehicles still move thousands of pounds of vehicle in order to move a few hundred pounds of people. The Segway and electric motor assisted bicycle require much less energy to move human cargo.

To meet the challenge, we need bigger steps than these. Applying the lessons of the packet transport architecture of the internet to the transportation sector might yield surprising results. A network of completely solar powered electric vehicles on fixed guideways, with continuous solar arrays just the width of the guideway could create an efficient, zero emissions urban transportation network. More on this later. The point is, the venture capital industry thrives on change and paradigm shifting, out of the box thinking and is perfectly suited to lead the clean technology revolution.
 
Save the Date: January 31, 2008. Check out www.focusthenation.org for information about the first Focus the Nation Day which is designed to mobilize students, civic organizations and business leaders to create global warming solutions. There are bound to be some great commercial ideas coming from this event. Let’s pass this along to our kids and their schools. 

Your mail: Previous comments on the problem organized religions often have of being tolerant of other religions struck a raw nerve. Anyone interested in organizing an annual summit of all the leaders of the world’s religions to begin a dialog on this issue? Perhaps solving the climate problems will provide an opportunity for sparring faiths to build this tolerance by working together to create a sustainable, environmentally sound, global economic system.