Archive for January 2010
The basis for our research report started back in 2006. At that time, as Groom Energy engineers were working with a F500 customer to build a GHG reduction budget, it occured to us that GHG tracking and reporting would eventually represent a fundamentally new process within every large company. Even by then, staying on top of reporting for the EPA’s Climate Leaders was requiring more and more time for our customers. It was no surprise that spreadsheet tools were not going to scale – but it was the collaboration necessary to even gather and manage the data where the gap was most obvious.
What most people don’t know is that we even made a concerted effort to start our own Groom Energy spin-out GHG software company. We had surveyed the market through our customers, found only a few third party software packages, and thought we saw a path to a new class of enterprise software, calling it “enterprise carbon accounting” or ECA for short. (all new markets need a name, right?)
Within a few months we had detailed the basic software functionality and even recruited a software team to start building it. After several initial meetings with traditional software VC’s in Boston (most of whom couldn’t spell G-H-G, but all of whom understood enterprise software) we sensed it was going to be a long slog to get early stage funding based on our powerpoint-ware. Either we had bad breath, couldn’t convey the opportunity correctly or needed to live on Sand Hill Road…
Within a few months of our effort we starting uncovering more new ECA vendors, some established EHS vendors with GHG extensions, some VC funded pure start ups, some larger software companies who added GHG modules. It seemed each week we were adding a new entrant to our wiki list, which was more and more daunting. At 10 known players we were concerned. At 20, we knew were were too late and abandoned our effort. At 30, we knew that our customers were just as overwhelmed trying to understand the offerings, all while building their own strategies internally.
And hence the idea for our ECA research report was born. We saw that the best way to leverage our effort was to help our customers with a more concrete deliverable – customer based research which could be regularly updated as the market developed. Not as profound as an entirely new company, but worthwhile nonetheless. The good news is that market response has been a bit overwhelming…
Check out the latest report and, if you’re an entrepreneur considering your own ECA software start up, study the vendor list carefully – its up to 60 and still going….
In the 1967 movie The Graduate, 21 year old Ben Braddock (aka Dustin Hoffman) received a famous bit of advice – “there is a great future in plastics.” The line has lived on since, like an insider stock trading joke – however, VC’s would call the character who delivered this line “a master of the obvious.” If plastics would be a big market, how would Hoffman have chosen the application area or the start up company that would win?
So over roughly the last seven years, new market categories within Cleantech have come into vogue with similar, layman speak descriptions – insert your favorite – “there is a great future in….” batteries – biofuels – carbon software – demand response – green building materials – LED’s – smart grid – solar PV – wind, and even water.
What’s stunning is how many of these now visible companies only received their Series A funding in the last few years. Companies like Hara (Series A in 5/2009), Silver Spring (Series A in 4/2008), Solyndra (Series A in 4/2007), Solar Power Partners (Series A in 9/2007) and SunRun (Series A in 6/2008) are all perceived leaders in big market categories, yet they’ve only been in existence for a few years.
Which makes it that much more fun to speculate on the next favorite hot markets. My votes for three new Cleantech categories which will become more visible (ie. early stage funded) in 2010 are: 1. nuclear power, 2. magnetics and 3. waste heat recapture systems.
Nuclear power, because it makes so much sense. In a market where there has been so little new R&D, one can only imagine what could be developed if entrepreneurs were given capital and support. The fun thing about this one is how real green advocates have a conundrum with the benefits and risks. A relevant company would be NuScale, but there are others as well.
Magnetics, because with so many spinning parts in both existing and newer energy systems the math favors reducing friction (ie. operating more efficiently) and lower lifetime maintenance costs. A relevant company might be Synchrony which recently introduced a computer controlled bearing.
And Waste Heat Recovery, because energy efficiency is in vogue and waste heat is becoming a more known, literally, as a waste of energy. Also we can expect, like cogen and fuel cells, these systems will be supported even more heavily with utility incentives going forward.
Oh, and if you want to follow the professionals who write on this stuff look at GreentechMedia with their top 2009 investment list. Or Jeffries Investment bank who speculates how much more $ will flow into Cleantech.