20 April 2023 |

Notes from the field


On Thursday last week, I got up before sunrise (for the first time in an embarrassingly long time) to take the train to Boston. The MIT Climate and Energy Prize organizers graciously invited me to help judge their annual start-up competition, which is open to teams from North America and Europe. This was the 16th year of the competition, making it one of the longest-running student-run start-up competitions.

The newsletter author and a who’s who of other stellar climate tech investors at the judges’ table

As I noted on Sunday, the competition itself used to be called the ‘Clean Energy’ competition. This fact in and of itself illustrates a fundamental decadal change and where the energy is (and isn’t) in climate tech. Here’s what I wrote Sunday:

Notably, none of the teams (at this year’s event) pitched new or improved power generation technologies. When the competition started 16 years ago and was called the ‘Clean Energy’ prize, I imagine few teams were working on anything besides that.

There’s a good reason for the shift in focus. Since 2007, the world has made a lot of headway in figuring out how to finance, build, and deploy clean energy technologies. Most of the remaining work in the energy transition could be borne by building infrastructure; it doesn’t depend on inventing new generation technologies…

So what are teams working on if not new ways to generate clean electrons? 

The answer is everything else! Early-stage climate tech teams, especially those coming out of universities with significant R&D capacity, are working to overhaul every fossil fuel-fired stitch in the fabric of society. The teams that competed are bringing solutions to market spanning everything from direct air capture to new electrolysis techniques to custom microbial coatings. 

Whether by removing legacy emissions (carbon removal), decarbonizing steel and fertilizer production (green hydrogen), or making agriculture more sustainable (microbial coatings), these products could be significant additions to decarbonization efforts globally, especially at scale.  

And yet, these industries barely ‘exist’ today:

  • Carbon removal: While Frontier has more than $1B in tow to make advanced market commitments for carbon removal and the U.S. government offers tax credits, the actual carbon removal scale in 2023 is probably only six, maybe seven-figure tonnes (compare that to ~50 billion tonnes of CO2-e greenhouse gas emissions
  • Green hydrogen: While there’s a lot of green hydrogen hype right now, and producing green hydrogen will be critical to decarbonizing industries like steel and fertilizer, 99.3% of hydrogen production globally is black or gray, i.e., fossil fuel-fired in some capacity.
  • Microbial coatings: While microbes play a big role in pharmacology, using them for things like displacing synthetic nitrogen fertilizers or other ‘climate’ applications is still pretty novel.

That’s what early-stage climate tech is about these days. From plastics to fertilizers to steel to concrete to compounds in your yoga pants, almost everything around us is fossil-fuel based in some capacity. Decarbonizing energy is a critical first step in decarbonizing the economy. But it is far from the last. Even if the grid and transportation were fully electrified tomorrow, the next thirty years would require deep disruption and decarbonization elsewhere.

If it feels like ‘climate tech’ as a term increasingly touches everything (and risks losing definition in the process), that’s basically what I’m gesturing at here. You could imagine a solution or business in almost any sector that could qualify as ‘climate tech.’ 

This breeds new communication challenges. Some of which we’ll now explore in the context of pitching solutions and climate tech start-ups. The following sections are thus geared towards the entrepreneurially-minded among you who may be building or want to start building in climate tech. Hopefully they’re also interesting for those of you who would simply like a window into my interview process.

Pitching the ‘why’

It’s unlikely you’ll find yourself in many situations where you need to do upfront work to convince someone to care about climate change. Fortunately, we’re past that point on most fronts. 

Still, clearly defining the ‘why’ of any climate tech start-up pitch is an opportunity to define the size of the opportunity and to tell a compelling story. Here’s some advice.

It’s not all about CO2 (and methane). For one, there are other, oft-overlooked, greenhouse emissions, like N2O. Especially anything targeted at agriculture can have an impact there. 

And there are countless other climate challenges (and opportunities) beyond mitigating or removing emissions. Whether air pollution, biodiversity loss (more on that next week), landfilling, or something else entirely, these are enormous opportunities for new businesses.

On the flip side, it’s true. The climate tech ‘industry’ is still a bit myopically focused on emissions. Especially when you’re sitting in front of investors or policymakers.

So steering pitches away from emissions is a tricky challenge. You want your pitch to cater to what investors and policymakers are focused on.

The answer is to start there. By all means.

But don’t stop there. The climate conversation is becoming more ‘inclusive’ very quickly, and I personally always look for teams who offer (and speak directly to) multi-solve solutions. I.e., ones that hit on emissions and other opportunities. Most solutions inevitably provide multiple benefits anyways when you zoom out; calling that out clearly is foundational to a good pitch.

Why is this still a problem? The reason decarbonization is hard has a lot to do with how amazing fossil fuels are. I’m not joking here. Across dimensions like energy density, portability, and versatility, fossil fuels were God’s gift to industrialization. That’s why ending our addiction to them seems nigh impossible at times.

Starting with the question bolded above is a solid way to sell the ‘why’ of any climate tech pitch. Tell us why no one has solved this particular problem previously. It stands to reason others have tried. So an easy way to cut to the core of your ‘why’ is to hone in on why others have failed. 

During at least two pitches on Thursday, I could think of other companies off the top of my head building relatively similar solutions and operating at a later stage. If they’re working on it, why do we need you to work on it, too? 

Those are missed opportunities to clarify differentiation.

Tell us what about your technology or approach has completely unblocked this for you in a way that separates you from the rest of the pack. This is also an essential lead into a core question that technically fits in the ‘how’ section of the pitch but which I’ll cover here, i.e., what in the solution or business lends itself to a defensible strategy (whether IP or other) that would be hard for a competitor to copy?

Pitching the ‘how’

The following are some key reminders for pitching and positioning the ‘how’ of the solution itself. While pitches are short, you’ll notice many of these points pertain to what not to leave out. 

First… don’t forget the how! I only left ~25% of pitches feeling like I was adequately brought up to speed on the technical specs of the team’s solutions. That surprised me a bit. Don’t assume people, even those of us who follow the industry closely, know how a sand-based battery works or what the key components of its ‘tech stack’ are (other than, I assume, sand). 

Define the entire product journey. From the upstream… Whatever the inputs for your business are, with whom are you competing for them with? Are they abundant? In the case of biomass, for instance, fuels, power plants, (and maybe biochar) are going to hog a lot of input. 

For other inputs (e.g., other waste streams), there might truly be little competition. In that case, are they abundant? Could you scale your business to the entire globe without running out of supply? What component of your supply chain could become the most constrained overnight? 

…To the downsteam. For anything focused on materials (or that is a big potential power consumer) articulating, or at least gesturing at, a full lifecycle emissions analysis is critical.

For a number of bio-based material firms, there isn’t always clarity on what happens if the material ends up in a landfill. Could your product turn into methane under the ‘wrong’ conditions? Could your technology struggle to source cheap, clean energy? If yes, you may struggle to get people excited about your businesses’ comprehensive climate impact.

Don’t overlook team composition. This is a hugely important factor for growing a business that’s often overlooked. Most teams presenting last week did a good job hitting on this. The line of inquiry is pretty simple: Who’s on the team at this early stage, and why? 

Also, who are your advisors? How incentivized are they? Who else are you building networks with (whether corporates, other startups, past founders)?

The prospect of trying to hire and manage a team is probably the #1 thing keeping me on the entrepreneurial sidelines. People problems are high on the list of things that ultimately sink young companies, even if the tech is sound and defensible and the bank account is flush. 

Lastly, show your work. If you have projections on what your solution will cost at scale, I’d love to get the 30 sec on how you arrived at those figures without needing to ask for it. Sorry to sound like every math teacher you ever had.

The net-net

That’s enough pitch coaching for one newsletter. There are many other points I could introduce here, but the ones were those that most immediately jumped out at me. If you or your team is looking for more advice and coaching on this front, feel free to let me know!

Zooming out, it’s easy to get lost in the weeds of fundraising numbers and the weekly rigamarole of politicized headlines surrounding the energy transition. 

Here’s something else to not lose sight of. The energy in early-stage climate tech and climate tech R&D at seminal institutions like MIT is still electric. Macroeconomic headwinds and the scope of the climate challenges at hand be damned. 

If you feel bogged down by media doom & gloom surrounding climate change, a trip to an event like MIT’s Climate and Energy Prize is probably the best antidote I can recommend. The world’s best and brightest are applying themselves to imagining a new climate economy. Take heart in that! I do.