Friday, January 25, 2008

Green versus Clean

You might think this is about the semantics of green tech versus clean tech. That is an interesting question in itself, but this is about a neighborly spat between two Sunnyvale residents and Santa Clara County and state laws and redwood trees and solar panels. Sometimes truth is stranger than fiction. See here for the Mercury News story. Its complete with a Google Earth map :-) A Sunnyvale couple has been found in violation of the California Solar Shade Control Act ( I bet you did not know that it existed), a law signed signed in 1978 by Gov. Jerry Brown. See, the solar movement in California has a long history :-)

The problem - eight Redwood trees in the Sunnyvale couples' home cast a shadow on their neighbor's 10kW solar panel system. So, the Santa Calara County and courts are asking them to cut down their trees or face hefty fines. The spat has been going on for a few years and has already cost the tree owning couple a fair amount in legal expenses. In any case, its a very interesting dilemma - would you cut down trees to save the environment with solar panels ? Its almost a philosophical question, let alone a purely economic and environmental one. The Mercury News ran a Web Vote on this question and today's (Jan. 27th) newspaper shows that 144 people thought the tree owners should trim the trees and 372 people thought they should not. Probably not a scientifically valid poll, but still, an interesting result.


Wednesday, January 23, 2008

Green Tech for the Consumer Market

If you were looking to find out how hot clean technology is in Silicon Valley these days, you only had to attend the Green Tech for the Consumer Market panel session hosted by the MIT/Stanford Venture Lab at Stanford's Bishop auditorium on Tuesday, January 22nd. As a volunteer for the event, I got to attend for free and it was well worth it :-) The Bishop auditorium was filled to its capacity of 324 with people standing in the aisles. VLAB events usually attract a good crowd, but this was exceptional. Of course, there was the usual gang of Stanford MBA students, but there were also a lot of VCs, investment bankers, lawyers and, of course, entrepreneurs.

The panel was moderated by John Rockwell of DFJ Element (Draper Fisher's clean tech investment arm) and included two VCs - Steve Westly of the Westly Group and John Denniston of Kleiner Perkins Caulfield and Byers and three Clean Tech entrepreneurs - Ron Gonen, CEO of RecycleBank, Michael Murray, CEO of Lucid Design Group and Frank Paniagua, CEO of Green Plug. Each of the entrepreneurs gave a brief introduction of their companies and product ideas and then the moderator posed a set of questions to the VCs on clean tech investments.

Ron Gonen talked about how RecycleBank works with cities to help increase their recycling rate and share the savings with the company. They have deployed pilots in Vermont and other East Coast cities, where they partner with a city and offer homeowners incentive points to increase their recycling. The recycling bins are outfitted with RecycleBank chips which calculate the weight of recycled material and award points to the homeowners which they can use to buy goods and services on the Internet. Sort of like airline miles, but based on the weight of material they recycle. This increases recycling in the city and saves the city landfill and other garbage costs. RecycleBank takes half the savings the city gains in this manner and also makes money off the advertising for the products sold off their awarded points. They have investment from partners like Coca Cola. You can view their demo here. In India, there were (still are?) people who used to come by your house to collect your old newspapers, bottles etc and sell these to shopkeepers and others for reuse. This is a fancier, scaled up American version of the idea with virtually no competition today and from the looks of it, destined to be a very successful company.

Michael Murray, CEO, presented for the Lucid Design Group. They make a Building Dashboard, which is an internet based application which monitors real time energy usage in a building. The idea is that if you are aware of how much energy is being used at various times in different areas of a building you will look for ways to reduce the usage. The implementation is rather impressive. There are various real time demos on their website which show off the capabilities of their software at various installations. The demo he showed of a dorm at Emory University was impressive in the range of options it had. I could not find it on the projects page, though. I am not surprised that Lucid Design Group won the CCTO's Smart Power Award this year.

Frank Paniagua, CEO of Green Plug described how his company is solving energy and material waste in consumer electronics products and other battery powered equipment by enabling an intelligent universal power supply. Today the DC power supplies for cell phones, laptops, iPods and a variety of devices are all different, and as a result a single family has a host of different power supplies. This is inconvenient for most people, not to mention redundant and expensive. Further, when these are discarded they generate toxic waste. Green Plug's intelligent power supply concept communicates with the devices which use DC power and supply only the exact power required. They also prevent overcharging and supplying power when not needed. Green Plug defines a digital protocol which makes realtime communication possible between devices and their power supply. It is implemented on a programmable microcontroller, but its also embeddable. They also license their Green Talk protocol and universal connector free of charge. A cool idea, but a tremendous challenge to implement since they have to not only support a wide range in AC voltage on the input side, but also a wide range of DC current and voltage on the output side. They also have to get a wide range of manufacturers and their devices to incorporate Green Plug technology in their power supplies. But, Frank Paniagua has solved a similar challenge before as co-founder of the Video Electronics Standards Association (VESA) which produces display standards to enable a wide range of devices to connect to displays worldwide. As a former Board member of VESA, I know how valuable that organization is today.

Following the excellent startup presentations, the moderator and audience posed a series of questions to the VCs on the panel. Steve Westly and John Denniston felt that the US was far behind Western Europe in adopting clean technology and alternative energy. They felt that Government subsidies were absolutely necessary to boost the emerging industry. They also felt that removing subsidies for fossil fuels and transferring them to alternative energy technology was a viable option.

They discussed what the VCs were looking for in funding companies. VCs are motivated by return on investment and looking at the companies which presented at this event, they noted how each one of them offered a unique advantage in waste reduction, energy awareness or convenience, but also strove to do it profitably. Different VCs have differing strategies for investment ranging from early stage and higher risk to later stage and lower risk. However, they agreed that most VCs today have a strong emphasis on clean technology investments. I could almost hear a room full of entrepreneurs whipping out their business plans :-)

Steve Westly commented that the opportunities in clean technology were just beginning and we are at a point of time similar to 1996 when the Internet boom had just started. Probably because of Steve Westly's political connections (he ran for Governor of California against Arnold Schwarzenegger) the questions and discussion centered on the political aspects of support for clean technology. In general, the panelists seemed to agree that regardless of who won the US Presidential election this year there would be more support for clean technology in the coming years. They also believe that in addition to new consumer devices using clean technology, many existing consumer devices will become more energy efficient and use cleaner methods of packaging and disribution.

Overall a most excellent panel and event.


Saturday, January 19, 2008

The changing face of Silicon Valley

Intel announced closing of their last Silicon Valley fab this year. It is as fitting a marker as any for Silicon Valley's transformation, from a focus on silicon to a focus on all emerging technologies. This has been in the making since the late nineties, actually, when the Valley focus shifted from hardware to the Internet and its applications.

Perhaps, the birth of Internet giants like Yahoo, Google, Ebay, Amazon and others, in Silicon Valley gave us an indication of things to come. The Valley has kept up a hectic pace of technology advances in the last fifty years, and though the early days were clearly silicon chip dominated, it has never really been about silicon only. Where other areas like Michigan focused on automobiles and stayed with that focus, the Valley is relentless in its pursuit of change. Intel spokesman, Chuck Mulloy, is right - Silicon Valley is less about silicon and more about technology development.

The latest indication of yet more change headed our way is in the rise of clean tech investments by Silicon Valley VCs to over a $1B/year. Silicon Valley had $1.05B in 43 clean tech investments in 2007 compared to a total of $1.79B for all of California and $3.95B for all of North America. In this case, though the VCs reside here and many of the firms are based in Silicon Valley, not all the money stays in the Valley. But, the numbers clearly show that this is the place where much of the action originates. Though some of the investors worry about a bubble, they are resigned to the fact that they cannot do much to stop it. All they can do is to make sure they make the right bets and come out ahead.

The Valley does not just embrace change, it pursues change, and that is probably the biggest difference between Silicon Valley and the rest of the world.


Wednesday, January 16, 2008

Solar Energy thrives in the shade ?

That's essentially the hypothesis which Jim Jubak makes on MSN money. His column posted yesterday makes the case that US energy policy largely ignores solar energy, and that in turn will boost prospects for solar energy and for investors in solar energy companies ! Intrigued ? - I certainly was. I really enjoy reading Jubak's column. He translates complex economic theories into simple language and his stock picks aren't bad either :-)

In any case, the argument he makes is as follows. Today, solar energy is silicon wafer supply constrained. Worldwide solar power production climbed only 13% in 2007 compared to 57% in 2004 and 35% in 2006. Much of the demand today is driven by countries such as Spain, Portugal, Germany and others which offer subsidies. If the US too had offered subsidies, the excess demand would have pushed the price of solar power up even more. Hence the solar energy industry is better off now without US subsidies :-)

He further notes that the silicon shortage has had the effect of bringing many more companies into the solar panel business and has driven existing companies to expand their production. This in turn will increase silicon production 40 to 50% in 2008 and 2009. Solar cell efficiencies are also expected to increase. Maybe pure silicon alternatives from the likes of Nanosolar and others will also hit the market in this time frame ?

If the price of energy from fossil fuels continues to rise, they will soon reach parity with solar power and that would touch off a real boom in solar energy. This is projected to be in the 2012-2013 time frame. A most excellent theory from the perspective of all the solar energy companies and solar investors :-)

However, I am not sure that the assumption that the price of energy from conventional sources will continue to rise monotonically is a given. This is the only problem I see with the theory, though. This may somewhat affect the equation and timeframe, but overall its still good news for solar, unless oil prices drop dramatically.

Jubak goes on to pick some solar stocks which will benefit from this trend and interestingly they are all non-Silicon Valley companies. However, I will venture a guess that there will be a few companies from the Valley to pick from soon, given the attention the Silicon Valley technology industry and VCs are paying to alternative energy. :-)


Tuesday, January 15, 2008

Virtual CES

As I mentioned in a previous post, I decided not travel to CES this year and so I had to be content with reading about it. As always, there was plenty of coverage like Dean Takahashi's collection of CES favorites.

But, the one thing I would have liked to have attended this year, was Bill Gates' farewell keynote. He has been part of the technology scene for so long and of CES since 1994, that it won't be quite the same without him. He is really a technology visionary and has made some pretty good technology forecasts, but there have been some misses too as the Mercury News pointed out last week. I have listened to him speak at WinHEC and other events too and he usually has something original to say.

He predicted the PC-TV convergence a little too early and attempted to make a Microsoft a part of the living room several times over the last decade and did not quite have the same success as Apple has had recently. You could probably say that Steve Jobs and Apple timed that one a little better. The Valley won that one. Way to go Cupertino! :-)

Its amazing that this rivalry has lasted well over two decades, covered multiple devices and technologies and that the whole world has benefited from the results, though not everyone would agree that the influence has been all positive. Certainly, Bill Gates leaves at the top of his game. Even the die hard Mac fans at are fascinated by him and have posted his farewell video at CES. In recent years he has been prone to show these videos mocking himself at his keynotes. This final one from this year's CES is indeed pretty funny. Whether you like him or not, he did change the technology industry and I am sure he will do the same in whatever he attempts next.


Thursday, January 3, 2008

Akeena Solar starts the year right

Akeena Solar is on a tear. They certainly started the New Year right. The stock is up from about $8 to $13.60 at today's close in just three days. The volume today was an astounding 22M+ compared to an average volume of 650K. You may wonder why this dramatic rise, especially when the stock market's been taking a beating all this week. Perhaps the story behind this press release is one of the reasons. Akeena Solar announced that their Andalay solar panel technology will be distributed in Europe, Japan and Australia by Suntech Power Holdings Co.

The New Year's hardly getting started and already my prediction #1 from Jan 1st is getting some wind beneath its wings :-) I have to believe that there is plenty more to come this year. Its going to be a good year for Silicon Valley :-)


Tuesday, January 1, 2008

Looking forward to 2008

Its that time of the year again, a time for new beginnings and the promise of excitement to be. There are plenty of people willing to make predictions about the year to come. In Silicon Valley it always helps when the VCs see good in the year ahead and that seems to be what the Mercury News says. Speaking of the Mercury News, Dean Takahashi quotes Mark Anderson for these predictions for 2008. Then there are Dean's own predictions for Tech Trends for 2008. The Inquirer, of course, has a spicier set of predictions, and as they pithily put it, some of them may even come true. :-)

In any case, I'll go out on a limb and make some of my own predictions :-)

1) 2008 will see Silicon Valley driving clean tech to new heights. Now, this is not so difficult to predict, because there is plenty written about it already, like this recent article. There may even be some more Clean Tech IPOs from the valley. One which would be particularly exciting would be NanoSolar, if it happens. This in turn will drive more VC activity in the space.

2) In the mobile world, we'll see more GPS applications in the cell phone, maybe even in the next gen iPhone. This has been a while in the making and maybe 2008 is the year.

3) Facebook and LinkedIn will both have a big "exit" in VC terms with either a big acquisition or IPO.

I'll limit my predictions to these three for now and measure my accuracy at the end of the year. :-) There will be plenty of other exciting happenings in technology in Silicon Valley and the rest of the world. Yes, there is indeed much to look forward to.

Happy New Year !


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