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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
$0
$1 000
$2 000
$3 000
$4 000
$5 000
$6 000
$7 000
Energy VC Investments
Energy VC Investments
USD Millions
CleanTech Categories
1. Clean Air 2. Clean Water 3. Waste Treatment 4. Energy Efficiency 5. Green Building 6. Renewable Energy 7. Smart Power 8. Clean Transportation 9. Clean Cosmetics 10. Cleantech Social Movements
Categories Adapted from:
® Copyright 2007 Mohr, Davidow Ventures
Time
Rev
enue
Gro
wth
Technology Adoption Life Cycle
Growth Market
Mature Market
Declining Market
Indefinitely elastic middle
End of Life
A
Fault Line!
E
D C
B
Where is your Cleantech Category
here in Sweden?
Chasm
Source: Moore Geoffrey A. (2002), Crossing the Chasm; Moore (2005), Dealing with Darwin
Lessons from Silicon Valley: Slide #6
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 #7
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 #8
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 #9
Examples of clusters
Lessons from Silicon Valley: Slide #10
What Are the Circles of Influence? �Players who bet stakes on you – �but you’ve got to know the code!
Players
Code
Stakes
Circles of Influence!
Lessons from Silicon Valley: Slide #11
Players help entrepreneurs get stakes �to play the game
• Venture capital firms
• Angel Investors
• 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
The major players in
Silicon Valley…
How are they similar or different in your home cluster?
Lessons from Silicon Valley: Slide #12
The stakes include…
Money Time
Talent
Technology
And much more…
Relationships & Social Networks
Passion
Lessons from Silicon Valley: Slide #13
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 #14
Context surrounds the Circles of Influence �in any cluster
Players
Code
Stakes
Lessons from Silicon Valley: Slide #15
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 #16
Forces in context affect adoption of cleantech innovations
Players
Code
Stakes
What 5 context factors have biggest impact on adoption of your Cleantech innovation?
17
Cleantech entrepreneurs face a “Double Chasm”
as you go global
18
The Technology Chasm
Adapted from: Moore (2002), Crossing the Chasm.
Chasm
Early Market
Bowling Alley
Tornado Main Street
Total Assimilation
Techies Visionaries Pragmatists Conservatives Skeptics
Resistance to Risk
19
The Cultural Chasm
Language Laws
Circles of Influence Ethics
Religion Education
Culture
Business-Government
Provincial Code
Business Ecosystem
“Foreign” High-tech venture
Adopters in a new country’s Local culture
Lack of Experience Lack of Trust
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, including Al Gore and John Doerr
http://kpcb.com
Khosla Ventuers Vinod Khosla left KPCB to focus on cleantech
http://www.khoslaventures.com/
Mohr Davidow Ventures Eric Straser was an early mover in cleantech VC
http://mdv.com/
Foundation Capital Foundation Capital recognized for leadership in cleantech. Steve Vassalo was an early mover
http://www.foundationcapital.com/
Draper, Fisher Jurvetson (DFJ)
Global focus, Raj Atluru was early mover in clearntech
http://dfj.com/
Technology Partners Ira Ehrenpreis was an early mover in cleantech
http://www.technologypartners.com/
Lightspeed Venture Partners
Moving rapidly into cleantech. Andrew Chung is a rising star.
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
Time
1. Defend & extend current critical businesses
2. Build momentum of emerging new businesses
3. Create options for future businesses
Horizon 1 Next 12 months Market share, revenues, margins
Horizon 2 12 to 30 months away Segment share, profitable growth, CAGR forecast
Horizon 3 Next generation Positioning the Next Big Thing
Adapted from Baghadi, Coly and White (1999) The Alchemy of Growth
The Three Horizons
Time
1. Defend & extend current critical businesses
2. Build momentum of emerging new businesses
3. Create options for future businesses
Adapted from Baghadi, Coly and White (1999) The Alchemy of Growth
Product categories: …………………………….
Markets - geos: …………………………………
Markets – verticals: …………………………….
Product categories: ………………………..
Markets - geos: …………………………….
Markets – verticals: ………………………..
Product categories:……
Markets - geos:………
Markets – verticals:…….
Stanford Center for Professional Development • 26
How might Porter’s Five Forces - And Other Factors – Affect your Cleantech Category?
Technological Change
Ecological Change
Social Activism & Interest Groups
Macroeconomic Change
Political Situation
Regulation, Deregulation, Re-regulation
Changes in Customers’ Customers
Demographic/ Psychographic Changes
Adapted from Porter, Michael (1980), Competitive Strategy, Free Press
Cleantech�Chasm Crossing is scary and fun!