The real flavor is in how I managed through these changes, and how it affected my view of entrepreneurship in cleantech.  I know a lot of people are going through similar things, so I hope I can help with this short story.  Since I’ve surfed new England for about as long as I have been working in solar, it’s only appropriate I tell it in metaphor with the sport I confided in when times were toughest.

I saw the cleantech swell forming while I was a freshman in college. I picked my line and started paddling hard.  Before “green” was in the popular mind I popped up on the Wakonda board and had at it.  Wakonda was a nice riding performance short board.  It had a lot of speed and carved tight.  Had a few blemishes and some patchwork, but for the money, she was a steal.

Wakonda was an old 6-channel short board—one of those ideas that was a bit ahead its time.  Accordingly, it was a hard sell because it was so different, but the guys that got it, got it. Despite what pundits thought they knew, the core of this board still floats, even today.

I entered in a surfing competition with Wakonda.  Our investors had their pencils pressed hard to their score cards.  My number was called at the peak of high tide, just as the solar swell was coming in strongest.  We had our local buddies next to us, 1366, Bandgap, Konarka, Evergreen among others.  We were giving each other friendly crap.  Some were riding long boards, some short like us.  But one thing we all had in common is that all our judges were watching, and we had to give our west-coast boys a run for their money.

I got into the first wave early.  I gained poise and built the momentum I needed to maneuver around anyone who tried to drop in on me. We had some solid patent filings and nailed our first set of milestones.  And on a real crowded day, as solar was becoming, those things were important.

I felt good on my feet off the bottom turn. I was sizing up to do something big.  And hell, this was a competition right?  You either go big, or go f#$%ing home.  So I shot for big.  I wanted to show the crowd—and yes, the judges too—a backflip.  I had practiced the components in pieces, and just had to put it all together.  I lowered my stance and rotated for a carve up the face—but then–something terrible happened.

The wave closed out on me.

A few of our guys saw it coming and pulled out of the wave before getting dumped.  Others got tossed.  I managed to hang on through the whitewater, hoping the next wave would come through and I could at least get some points out of it.  That bridge wave never came.

I was left floundering in stagnant water with enough time to take a breath and look up to see the next crash coming down on me.  I had to decide which way to go.  Do I duck dive and go back out for another set? Or do I head to shore? There wasn’t much time to choose.  My resources were running out. I was short of breath.  So I sat in limbo—which is a very dangerous place to hang—“the boneyard” as we call it in the surfing world.  This is the spot between the line-up and the beach where the waves crash.  Here bodies collide, tempers flair, boards break, and breathing is difficult.  When you’re in the boneyard you focus on one thing: get the f#$% out of the boneyard.

I was frozen.  I could not decide which way to go. I was hungry for something more and in denial of the fact that the ride was over.  I longed for a win.  I looked up and saw my teammates that pulled out early were already on new waves.  Riding toward me. I could probably paddle their direction and jump on too, but I knew, deep down, that the effort was moot. The solar waves were a dying set and those guys were on some of the last rides of the day.   So I turned around and rode their whitewater back to shore as a freelancer.  I actually had some fun with it—which really is all that matters anyway right?

In hindsight, it was clear that Wakonda had its work cut out.  We were riding a beach break.  And every surfer knows how shifting sand can suddenly change a wave. You just hope you get lucky and get on a good barrel. We were also in a lineup with a herd.  On big days there are a lot of idiots jumping in the water who just follow the excitement, and that complicates positioning for everyone.  Makes it hard to move.  Anyone can find his way into a lineup, it’s the first ones who respond to the changing conditions who really know what’s up.

In the end it turned out the guys getting good rides in the solar materials business weren’t on short boards.  It was the long-boarders who got into the waves farther out from shore.  They got the attention early and took the show.  These were the companies who paid a lot for big boards so they could get on waves before us shorties even started paddling.  They hanged 10 for a moment and peeled off. No big jumps, just simple positioning.  We’re all waiting for the scores to come in.

To get there I’ll have to do the same, but not at this spot.  It’s too crowded now.  And I learned to ask myself what do I enjoy doing? Is it surfing? Or impressing judges?  I realized I don’t have to raise capital to build a good business. In fact, if I am really good, I will never need to and prefer not to.  I just like to surf.  Forget the other stuff.

So for me it’s back to the swell charts, where the excitement of a new day resides.

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Cleantech Startups | What they Need

Cleantech startups need prototypes to increase (investor) confidence.  Confidence is built in a technology when it shows desired results with some reproducibility in an affordable, scalable process environment. After that, it’s easy to justify the nice equipment price tag. From my experience, cleantech prototyping is usually needed on three fronts:

1. Modification of a tool to accommodate a new process (i.e. making affordable equipment do what it wasn’t designed to do, i.e. fixtures, sample holders, heating, cooling, pressure…playing with PV=nRT). These are easy fixes.

2. A low-cost mimic of a production-level tool.  Typically at under 10% the big-boy price.  This means manual systems (<–my shameless plug) that can fit on a benchtop and yield repeatable results.   These are fun jobs that yield high value tools.

3. Custom tool for making something that’s never been done before. This is the breeding ground of intellectual property.  I love these jobs.  And companies with this level of dependency on custom equipment usually want solid non-disclosure agreements and full rights to IP.

I concluded that cleantech prototyping services were the best solution after repeatedly going down the same process development paths with resource-limited startups.  I hope to hear comments from any readers who have (or haven’t) gone through any of the following in this startup space:

Shared facilities | A Hassel

When they can’t afford the equipment, researchers can share facilities (at local universities such as Harvard or MIT for example) to deposit films, and use analytical tools.  The prices are reasonable, but knowing whether the process environment is contaminated with silver, sodium, or the last user’s PB&J is a huge unknown. Needless to say, unknown variables don’t help when something isn’t working.  Further, scheduling time at these facilities is burdensome, and startups are forced to sacrifice flexibility—one of their biggest attributes.  Good R&D grunts will tell you they want control of all the process inputs.   It is nearly impossible to do this in a shared facility.

Outsourced R&D | Expensive and slow

Alternatively, a startup can outsource non-vital operations of a manufacturing process.  They let the pros handle upstream processes that are already—I say with great hesitation—standard to the industry.  Like a chef putting on the finishing touches, the startup can let another lab, company, or a foundry do the prep work, i.e. scribing wafers, coating materials, or other steps upstream of their process. Sounds good, right?

Nope. It turns out that sourcing relationships are difficult to find in the materials R&D world. They require many months of proposal writing, or contracts that cut an arm off shareholders and put IP on the chopping block.  Working with another company is tough because they are likely a competitor if they have any capabilities you need.  Foundries do exist but their fees aren’t much better than finance rates on the $500K machine in the first place.  And they’re slow.  “We haven’t received the samples yet from [insert company X here]” is a poor excuse to board members who expect to see progress.  Startups finally concede to the notion that they need to bring the capability in-house if they want to sprint forward and stop screwing around in a 3-legged race.

Cleantech Prototyping | Crucial to Startups

So as it turns out, the solar chef must do his own prep-work, AND do it on a budget—hence the Ikea knives and day old cuts from Costco.   THIS is the environment that down ‘n dirty startups really work in.  In this environment, significant advances are made when teams can quickly improvise processes with equipment modifications to try new experimental conditions.  This means getting under the hood of the car and changing parts. FAST.

Custom equipment design is neither in the realm of PhD nor technician job duties—the guys who are typically staffed in an R&D startup.  The expense of a full time engineering team is hard to justify when design needs are intermittent in the early stages.  So to a lean and mean R&D startup, Cleantech Prototyping services are essential.

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Flexible solar panels are like the toy at the bottom of a cereal box.   I get excited about the thought of playing with them. I imagine bending, rolling and unrolling them, showing them to my friends, or even throwing them over my shoulder like a cape and running around while I power batteries.  The opportunities are truly limitless.

But then I look at the price and decide to reach for the generic brand corn flakes solar panel.  There is no toy in this box. In fact, there isn’t even a box.  It’s just cheap, sometimes energy dense, and usually made in China.  Dreams smashed.

Why was I attracted to the flexible panel in the first place?

In all of my encounters in the solar business, the metrics that matter for a solar panel are:

1. Cost—cost of the panel, out of pocket expense?
2. Weight—how portable is it? How easy is it to install?
3. Durability—how rugged is it in the field? Can I attach it to a jack-hammer?
4. Lifetime—what’s the payback period? NPV? IRR?
5. Efficiency—coupled with cost & area to get cost/watt

(other metrics are permutations of the 5 listed above).

It seems that flexibility implies a combination of a few nice attributes: cost, weight, durability.   But in reality, no markets ask for this complete set. Take a look at the chart above.  Here are the major markets for solar:

1. Utility—projects are financed on NPV and ROI basis.  Technology agnostic.  Cost per watt driven unless area (land) constrained, which is rare.

2. Residential—similar to 1 but with more concern for upfront cost & out of pocket expense, may be area constrained on smaller rooftops.

3. Commercial—similar to 1 & 2 with niche in BIPV, where aesthetic value may be valued over returns. May be area-constrained on smaller rooftops.

4.  Portable power—cars, boats, bikes, efficiency, W/kg, W/area, often area constrained and concerned with durability.  Will pay premium for substitution of heavy batteries.

5.  Personal power—chargers, bags, efficiency, mechanical toughness, will pay premium to enable usage of electronic devices off-grid.  Highly area constrained.

However, there are very few applications where all of these attributes are necessary.  Rooftops are designed to withstand the weight of a traditional glass panel, while people buying portable laptop chargers don’t really care about their generated cost per watt.  They just want to use their laptop on a jobsite in rural Africa (yes we’re always price sensitive, but not as much as other markets).

“Yes but installation costs are lower when you can just roll them on the roof” you may say?

I would argue that cost savings comes from eliminating racking systems, not the act of rolling.  Flat, rigid, lightweight panels can be laid out in the same way at very similar cost. The bottom line is that a rollable form-factor offers a low value-add.

What’s the opportunity?

There’s a disconnect between what markets want and manufacturers deliver.  We’re seeing low-efficiency, flexible panels going into BIPV markets (where cost still matters along with aesthetic), and portable/personal power markets (where efficiency matters most).

These thin film efficiencies are increasing (see Nanosolar, Unisolar, & Global Solar), but panel lifetimes will need to be proven before financiers will risk 20 year returns on a technology with little value-add over Kyocera or Sharp’s Silicon or First Solar’s CdTe panels.

What this leaves is an opportunity for efficiency & cost per watt leaders to come up with clever packaging techniques to make their panels lighter and foldable so they can penetrate portable and personal power markets.

I look forward to sharing my solutions to this space and the status of the project once it is publicly available.

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The rural Matala region had largely leapfrogged land-based telecommunications infrastructure—pretty standard in the third world, but the cell phones hit some of the villages before electricity had, which raised some questions for me.  I wondered how they charged them.

I found out that they charged up at one or two houses in a given village with electricity, or they’d give them to a friend to bring into town.  In fact, it seemed they treat electricity like they do water—walk to a source, fill up, bring it home.

The farmers earn close to $1/day, so hooking into the grid is cost-prohibitive—nearly 4 years income.  Getting a gas generator is an option that would cost nearly 1 year’s income.  Alternatives like solar and wind?  1-2 years income.   It is clear there is no solution other than scavenging for what electricity they can to power the few, small electronics they need.  There is very little incentive to make these types of investments even if they could save the cash.  Their investments take other forms.

Driving through the valleys of Kilimanjaro I noticed acres of crops where some corn was about 3-4’ higher than the rest.  I asked our guide, Ibrahim, why.  He said that the first rains came early this year, so farmers had to bet on whether to plant their seed or not. “If it’s a false start to the season, their seed is ruined. But if they wait too long, they miss an extra harvest.”  So the farmers hedge by planting a portion of their crops during the early rain and saving most of their seed for later.  When you’re making a dollar a day, crops are the only currency you have the volume to risk.  Crops are their primary investment.

Accordingly, most farmers typically invest any spare cash into low-risk, low-return items like tools for work—things that bring an element of security and predictability to their business in the fields.  They will not take a leap of faith in a technology which may only marginally improve yield, break, or be too expensive to maintain (take it from Paul Pollack if you don’t believe me). They need real, immediate cashflows from what they invest in—or small investments with short payback periods that hold inherently low risk.

I asked a bit more about alternative ways to get affordable power to the region.  I learned about a company called Egg Energy. They were setting up portable battery charging stations in remote villages of Tanzania where consumers can access electricity at a price they can budget. I didn’t encounter any of the stations, but the idea made a lot of sense to me. It got me thinking about the evolution of the country’s “grid”.

With this “distributed power redemption” model (I dub thee), there is promise that the need for DC power electronics (mainly battery charging & lighting) will pull-through alternatives in remote locations where grid-connected AC is cost prohibitive. It could take the form of distributed DC charging stations.  The model could be a good stepping stone to rural electrictrification by alternatives.  It may even introduce further standardization in global DC infrastructure, as increasing DC power supply & demand cut-out the AC/DC inverter-middle-man (imagine a standard DC wall plug that’s not a jerry-rigged cigarette lighter?!).  It will be interesting to see how elements from this embryonic business model will affect the 1^st world’s AC/DC power infrastructure in the coming years.

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