Right Brain Ventures

Microbes + Coal = Natural Gas

2008-07-29T21:36:00.000-07:00

I just returned from the AlwaysOn Stanford Summit where I moderated a panel on Cleantech. The topic was "Where's the leverage in Greentech?" and the panelists were Steve Jurvetson (DFJ), Bill Green (VPVP), Erik Straser (MDV) and Hale Boggs (Mannatt). The discussion was primarily around the trends in the industry and the perspective of the venture community. We talked about renewable fuels, electric vehicles, the solar industy and some other sectors. We only had 45 minutes which is definitely not enough to discuss leverage in cleantech.

One of the discussion topics which really caught my attention was the work of mother nature and the effect of synthetic biology on the future of energy. Steve Jurvetson said that its possible today to feed microbes to coal beds in order to produce an endless supply of methane gas. Of course, due to time constraints, we couldnt discuss it in a lot of detail, so I first caught up with him backstage and then rushed home that evening to do a lot of my own research (For those of you who dont know me, I am a big fan of biology).

It turns out that a conversion of just 3% of hydrocarbon substrates to methane can produce as much as 1000 Trillion Cubic feet of natural gas which is almost 40 years worth of U.S. natural gas supply!!

Here is how that works. In the absence of oxygen, a water-saturated environment and an abundant coal-bed, the natural populations of some of the oldest living micro-organisms, which have evolved over billions of years and currently exist in many deposits, feed on complex hydrocarbon molecules to yield methane (natural gas). If this science is successful on a mass scale, we will be surely on our way not only to an abundant supply of natural gas but also to the hydrogen economy; as the most cost-effective way to extract hydrogen is to remove carbon from the methane (CH4) molecules.

There are several companies working on enhancing the microbial process at different identified sites in the US. One of these companies is Synthetic Genomics which is based in San Diego and DFJ is an investor in the firm.

The Stanford discussion can be viewed at:- http://alwayson.goingon.com/page/display/28097?param=session/321. Also, check out the provocative comments by Bill Green about achieving our energy independence in 10 years and hear Erik Straser talking about an opportunity to get some libraries and schools named after you.

Saving a billion tons of emissions a year

2008-06-07T14:49:00.000-07:00

While the media is consumed with news about fuels and emissions from transportation, Kevin Surace, CEO of Serious Materials, points out that in fact the "built environment" is responsible for 52% of the greenhouse gas emissions worldwide, which compares to only 9% for cars and light trucks.

Serious Materials intends to tackle this problem by manufacturing eco-friendly products and disrupting building materials processes, some of which were invented as early as 1917! The company is building manufacturing plants right here at home in the US which will create thousands of "green collar" jobs.

Kevin talks about the challenges of fitting in the existing ecosystem but he insists that the company is committed to its goal of saving one billion tons of green house gas emissions a year. He shares the timeline of achieving such a hefty target and invites other companies in the clean energy space to do the same by setting emission reduction goals!

Beyond Black Gold...

2007-11-21T18:29:00.000-08:00

With United Nations projecting the world’s human population to reach 7 billion by 2013 and 9.2 billion by 2050, it’s quite evident that we will need new sources of energy beyond the fossil fuels that we as a species have gotten addicted to.

Tapping these alternative sources – lava in the earth’s core, tides in the oceans, crop residue in our farms, winds in the sky or even the nuclear fusion reactor ninety one million miles away – is not just crucial to meet our ever-increasing demand, but also to save our planet and to be truly sovereign nations by becoming energy independent.

It can be easily foreseen that some of the greatest innovations of the 21st century will come from disrupting the trillion dollar energy markets. Transportation disruptors will give us electric cars and next generation fuels, whereas new methods of electricity generation will lead to clean coal, solar thermal parks and wind farms, etc. Advances in materials will usher new forms of and methods of desalinating water and manufacturing cement, concrete, glass and (potentially) steel, while energy efficiency innovations might just offer us a new light bulb, invented in the 18th century, replacement of which is indeed long over due!

However, the organizations that will find the most success in this new environment are those that offer products and services which can scale efficiently and cost-effectively for adoption at a global scale.

The companies which will be profiled in the upcoming articles are looking to play their own unique role in our move to reduce carbon emissions and our dependence on fossil fuels.

Silicon Valley VCs Go Green

2007-09-29T01:27:00.000-07:00

Well...todays post is not about a new idea but rather about how Cleantech has almost overnight become such a popular investment sector for VCs. This theme was clearly visible at the AlwaysOn GoingGreen conference which just ended a week or so ago. The conference featured companies from all around the globe and kicked off with a keynote by Bill McDonough who got a standing ovation for his brilliant speech. He, as always, greatly inspired the audience and encouraged architects to think of "Building as Trees" and "Cities as Forests". Bill is now working with Vantage Point Partners - a leading cleantech VC firm which has made investments in companies such as Tesla Motors, BrightSource Energy, Miasole, Mascoma and many others.

Here is a video that was played at the conference highlighting the fact that Silicon Valley VCs are Going Green and we all know the success stories that orginiate, once this valley with all the brilliant entreprenuers and VCs, decides to tackle a specific sector. However, lets hope that other markets around the globe actively pursue this challenge as well because we all know that this issue is not just confined to this valley!!!

2M lives and 250M tons of carbon....

2007-08-28T01:18:00.000-07:00

One of the cool things about my job of evaluating companies is that once in a while I run into entreprenuers whose passion, motivation, mission and focus make me want to join them and assist in anyway possible to help them realize their goals. Today's story is about someone like that.

Sam Goldman spent early years of his life in Mauritania, Pakistan, Peru, India, and Rwanda before moving to North America. He wanted to experience the daily lives of people living in villages across the world, so after graduating with degrees in Biology and Environmental Studies from the University of Victoria, Canada, he spent four years in Benin with the Peace Corps founding and managing a for-profit NGO (GARPE-ONG) which runs a large rural agricultural training center.

It was at this place, where, one day Sam saw a person with third degree burns and upon inquiry realized that the burns were caused by a Kerosene oil lamp (I have to admit that as soon as I heard the words - kerosene lamps - I was all ears because I grew up with them). Sam was amazed by the degree of damage a small kerosene lamp had done and thats when he began his research which led to numbers that were mind blowing. Here are some statistics that he shared with us and are also available on his website:-

(a) A recent report by the Intermediate Technology Development Group suggests that indoor air pollution from flame-based lighting sources like kerosene lanterns result in 1.6 million deaths worldwide every year

(b) Approximately 1.5 billion people still do not have access to electricity

As a result of this research Sam had found his mission in life. After contacting various distributors in the US and not much success, Sam went to the Stanford business school to gain better business knowledge and to build a strong network in order to tackle this problem. During the "Entrepreneurial Design for Extreme Affordability" class at the Hasso Plattner Institute of Design at Stanford in Spring 2006, Sam met his co-founder Nedjip Tozun (Ned) and formed a company called "d.light design" whose sole mission is to provide affordable lighting and power solutions to the rural households or as the team puts it - "they want to make kerosene lanterns a part of history, where they belong".

Since cost has always been the key factor for anyone trying to reach these customers, d.light design has invented a product which is affordable to most of the population they are trying to reach and already have started working with a distributor in india. Penetrating markets such as India, Bangladesh, Nigeria etc is not an easy task and they will need key distributors to get their products on the shelves of small street shops. But if they are able to do it, there is tremendous opportunity and the market potential is huge.

But the distribution model is just a start. Upon further discussions with Sam, we both agreed that an additional revenue source lies in the carbon trading business model. Ok lets do some math. One kerosene lamp emits 0.5 - 1 ton of carbon in its lifetime. One ton of carbon on the carbon markets is approx $10-$35. Once d.light design is able to sell the carbon credits, they can significantly reduce the retail cost to poorer customers and still make a huge business. Out of the 1.5 billion households, if the dlight design team can even get only 10M million customers, that equates to millions of tons of carbon reduction, which on the carbon exchange will be equivalent to $100M on the conservative side. Now increase the numbers exponentially and you get the picture. Of course its challenging to accomplish, considering the fact that the entire accreditation processes take years and can cost up to $100K, making the proposition difficult for startups. Hopefully, the World Bank will start to address these issues at the Executive Committee level.

d.light design has won numerous awards such as AlwaysOn GoingGreen Top 100 company, 1st place in the DFJ Venture Challenge Competition and 2nd place in the Haas School of Business Global Social Venture Competition. The team has attracted funding from DFJ and Garage technology ventures, among others.

Sam and Ned are off to India this week. Best of luck to them. Who says social entrepreneurship cannot be a billion dollar opportunity!!!

From flying to fueling....

2007-08-25T18:52:00.000-07:00

Ok so i meet around six to eight CEO's a week from hightech and cleantech sectors to evaluate their emerging companies for the AlwaysOn 100 lists.

One of the cleantech companies i met this week was Imperium Renewables. Surprisingly, innovation wasnt the factor that amazed me the most about them (I have to give that to Amyris Biotech). It was the entreprenuer and garage story that has left me with a feeling that anything is possible if you put all your effort into it.

Imperium was started in 2004 by John Plaza. He was an airline pilot at the time with NWA who mortgaged his house and put all of his 401K to start selling bio-diesel in the Seattle area. The company developed and depolyed proprietary technologies around active methanol recovery and enhanced polishing.

Three years later, Imperium is the largest bio-diesel producer in the entire country. It has multiple refineries and by Q4 of 2008, it will have a combined production capacity of more than 300M gallons of bio-diesel a year. John has managed to get good cleantech VCs on his board - Ira (Technology Partners) and Nancy (Nth Power) - and has recently filed to go public with an offering up to $345 million.

Kudos to you and your team John!!