Solvation

CleanTech Open Global Forum 2011 - Part 1

Oddly, cleantech markets and social capital markets are barely aware of each other, despite obvious areas of complementary expertise. So I traipsed to San Jose to the Clean Tech Open Global Forum to interact with the very high quality CleanTech entrepreneurs, and those entities that fund them.

I have a project in mind to facilitate the bridging of these investment ecosystems that I hope will unlock further capital, but for now, let me simply report on some excellent startups I spoke with.

Impact investors would be interested in what I think of as Alchemy 2.0, and Regenerative Products

• Waste (post-consumer, especially) to energy
• Waste (post-consumer or industrial) to disaster recovery goods
• Energy Grid-busters
• Off-grid irrigation and energy solutions
• Those companies in the gray area described below that add Social Entrepeneurial connection into the communities they serve, primarily via directly creating Green Jobs and providing education.
• Very low impact transportation solutions, whether local fabrication, mass transit, remote monitoring, etc.

Impact investors MIGHT be interested in super-stopgaps

• Efficiency solutions for water use
• Alternative building materials
• Efficiency solutions for currently deployed energy or power systems; including transportation
• Behavioral change solutions even if they provide only incremental energy/water advantages, because of the learning involved
• Alternatively-powered individual vehicles (rather than mass transit)

Lost in translation are those solutions that appear to work against inevitable change

• Cleaner dirty energy
• Industrial waste to consumer goods

 

In Part 2, I'll expand on specific companies.

Alternative Energy Investment

Out of public companies only, in everything related to advanced materials (nanotech, solar, etc.), my gig was to pick something related to alternative energy. They needed to buy and hold for 3 years. After a few months of analysis, I picked AMSC, which produces superconductive wire and products that incorporate it. They were not profitable yet. Very few analysts covered them, possibly because understanding superconductivity does require some fairly specific knowledge. The ROI was around 190%. This was from 2006-2009.

 

Economic Catastrophe - Maybe It's the Only Way?

OK. Here's a hypothesis I developed after reading this highly disturbing report on the state of the world's oceans.

Hypothesis: It's GOOD that the US middle class (and lower) is becoming desperate, because in order to change behaviors drastically, it's going to require masses of people doing whatever it takes for them to survive, and the uberwealthy will in turn need to set up and financially support the rules so that "doing whatever it takes" actually is survivable.

(My own objection: most of the uberwealthy are too out of touch to understand what needs to be done, how quickly, and how extensively.)

Have I become too cynical?

BP, Executive Compensation, and Corporate Responsibility

Evidently, the next step is for BP to lower a box a mile underwater and then a big tube will contain the oil into a boat. OK, seems like a straightforward concept; it might work and keep working for several months, if they can get the box over the well in deep water using robots. Then the idea is that another well is drilled elsewhere in the meantime to relieve the pressure.

In the same article, Reuters reports: "Obama administration officials were reviewing the practice of granting exemptions from environmental impact studies for oil exploration projects deemed to involve little risk. The Minerals Management Service had exempted BP from a detailed environmental review of the project."

Now, I'm just not seeing how that would've caught the problem. The problem was failing to design redundant safety systems. I'm not sure how environmental impact would encourage them to be careful. Making more rules does not encourage following them. Making rules is about codifying the punishment, and we clearly do not punish people in financial leadership commensurate with their negligence.

BP is a British company, and you can check out the executive compensation, which, at about $5 million for 2009, is not extreme as these things go (Chesapeake Energy CEO made $100million in total compensation for 2009, compared to its average salary of $32k, a multiple of 3000x), and reasonably justified precisely because the head of BP does take on exhorbitant responsibility. But do we HOLD them to that responsibility? What seems to happen is that we decide, "Well, hey. Tony Hayward, CEO, you got to the position where we pay you a lot of money, you MUST be a leader, and so we respect you, and if you err in a way that causes calamity, you'll land on your feet because we NEED our leaders to land on our feet."

But we don't. We need our business leaders, the ones we aggrandize with the justification that they're taking on enormous responsibility, to behave responsibly or face the consequences. It's the leadership of the firm that sets the tone for making tradeoff decisions between community safety and shareholder profit-taking.

There's something seriously wrong with the system when making the same decisions at a far lower pay rate is more likely to get you the appropriately severe punishment. Isn't that what corruption is: Money buys a special set of rules?

On that note, Wells Fargo, paid its CEO $21 million worth of compensation. Relatedly, I just investigated buying stamps from the ATM. They do charge to sell you stamps, but they don't tell you. And they sell quantities like 18 or 36 that make it very difficult to multiply by $0.44 and realize that you're paying a premium (90 stamps for $47; that's how I realized there was a premium. For those of you who are math challenged, 100 stamps at $0.44 would cost $44, so 90 stamps would be less than that, and $47 is more than some amount that's under $44. So I knew I was going to pay a fee). Despite the fact that I needed the stamps, I couldn't bring myself to buy them; it was too disgustingly exploitative.

I must move my money, despite the amount of work it will take to set up elsewhere. 

2020 Forecast: Fire and Ash with a good chance of Phoenix

Here are my forecasts. The gist is this: it's going to be a decade of transformative change, and if we get stuck in the transitions, we'll protract the agony. If we can agree on broad goals and a process -- a life -- that involves respecting the journey to meet those goals and the people we travel with on our roads, then we may see some amazingly wonderful things emerge.

(1) Community and Government: Regardless of financial stability, social systems will crumble. Schools will bifurcate into "bare necessity" and "elite." At least one emergency (but probably several) will point out just how utterly incapable our medical system is at caring for everyday, insured middle class working people when large masses need hospitalization. Protective services (fire, police) will similarly face a few overwhelmingly impossible tasks because of weather-, earthquake- or social unrest-related crises.

The emerging solution to this will be that young people ("digital natives"), marshalled by the middle-aged ("diversity natives") will reach across the socio-economic aisles as never before.  The challenges are so pervasive that only collaborative teams will be able to address them, and team-creation is easier than ever. 

Look for alliances: alliances among young adults to solve specific innovation challenges; alliances between educational and other services to provide emergency resources; alliances to share personal resources, skills and expertise that tie communities back together again.

(2) Finance and Regulatory: Financial stability won't happen. No, not for the whole decade; not until the uncertainty surrounding global warming, toxicity, and other health issues are addressed -- at a minimum. In fact, an entirely new financial system -- or rather set of systems -- will continue to develop. It will be like "the internet in the 1990's" where decreasing numbers of people think the new system is a fad but the technology just isn't quite there to bring everyone on and up to speed.

That's called Social Entrepreneurship and Social Capitalism, and is represented by some amazing innovations that run the gamut from reinventing the traditional (investing a philanthropy's endowment is far more powerful as a social change agent than the relatively small amount they give away as grant money) to the novel (new risk management exchanges -- like the Housing Index, or the Peace Index), and the hybrid mechanisms of evaluating (paradoxically real) intangible assets and removing the focus from the abstraction, "money."

Look for innovations in just about everything, from traditional philanthropies treated as financial funds, grant money coming from for-profits, to new instruments like "social bonds," new exchanges, and the merging of data as it flows across the boundaries between corporate, governmental, and community organizations.

(3) Personal: Love and loving will continue to become increasingly traditional, with women shouldering immense caretaking loads due to smaller families that are widely spread out, higher incidence of everything from asthma to autism and alzheimers. Women will want to marry earlier and choose again according to "prospects" rather than sensitivity; men will want to capture younger women. Boomers will pool their resources and recreate communes where at least some children will be enlisted to provide caretaking services. 

Amidst the resurgence of spirituality, where people recommit to some sort of faith: faith in God or society or their family, will be an eventual understanding of who is NOT the enemy.  As people from the LGBT community, as immigrants, and as people formerly known as "minority" become included in the real work of monitoring and healing society, empathy will increase.

That said, the tolerance for uniqueness, "Too Much Information," will continue to contract. People will consider themselves very transparent but share less and less. A lot of us will block much from ourselves. The small children will watch this.

Look for a resurgence in the arts -- people who reconnect adults to their emotions -- for 2030.

Financial and Social Capital - an Example

I just posted a financial analysis I did in 2006. The challenge was to canvas the entire space of novel materials (except bio), with particular interest in nanotechnology; look for a viable publicly traded alternative energy company; and then buy and hold that for three years with no risk management (e.g. options).

The name of the company has been obscured, but here's the graph. It was $9 when I recommended it, and roughly $31 now. (Between $25-30 in June '09, so the ROI would be about 3x.)

 

Of course I was looking not only at traditional financial performance but also applied social capital ideas to the analysis.

The Bailout, The Election

The market, this morning. Particularly telling: central banks might want to consider not throwing money into the system because it dampens any impulses banks might have to lend to each other.
http://www.nakedcapitalism.com/2008/09/libor-surges-to-nearly-7-but-us-stock.html

Thanks to Al Chang, via Jerry Michalski's Yi-Tan group for the next two:

Analyzing the Bailout: What's In It, Anyway? Clear synopsis about why this bailout is ill-conceived.
http://www.clusterstock.com/2008/9/analyzing-the-bailout-what-s-in-it-anyway-

Mussolini Style Corporatism in Action. On an actual phone call.
http://www.nakedcapitalism.com/2008/09/mussolini-style-corporatism-in-action.html

Merrill: Low Treasury Yields to go Even Lower. "...our models suggest that there is another 15-20% downside in average home prices and they are already down 20% from the peak."
http://www.nakedcapitalism.com/2008/09/merrill-low-treasury-yields-to-go-even.html

...and my personal favorite from a few days ago, a study of Republicans by psychology professor at the University of Virginia, written for liberals who grapple with why others make such different choices.

What Makes People Vote Republican - Jonathan Haidt.  "(M)orality is not just about how we treat each other (as most liberals think); it is also about binding groups together, supporting essential institutions, and living in a sanctified and noble way.  When Republicans say that Democrats 'just don't get it,' this is the "it" to which they refer. " http://www.edge.org/3rd_culture/haidt08/haidt08_index.html

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Off-topic bonus link: Gut Instinct's Surprising Role in Math - NY Times

Stand Up to Cancer - SU2C

A quick post on an event tonight that raises funding for cancer research via your passive participation. Like many people, my life has been drastically altered through losing people I love to cancer: my mother and father both died of cancer (1990, 2004 respectively), and my son's other grandmother also (1994). I have had other relatives and friends who have themselves been afflicted by cancer, or have their lives changed by the affliction of others they love.

The SU2C website gives more details on the overall campaign, or watch

Will.

Many will write long essays today, so I just want to leave you with a simple idea:

The other day a close friend was lamenting about how her kids hear of a new Something, and then throw a tantrum if they can't have it. She expressed dismay in particular because they didn't know the thing even existed five minutes before, and now their life wouldn't be complete without it.

I think even as adults, that "just gotta have it!" feeling never quite leaves, we just get far more selective, we understand how much work goes into attaining our heart's desires, and let's face it we've tried most things by the time we're all grown up, so it takes a bit to get us to the point we're going to do whatever we must to get what we want.

But, we still do! Whether it's a new electronic gizmo, or a house, or something else entirely, somehow, some way, we do everything we can to make it happen.  We have the will.

Now, it's Earth Day again.  What if we had the will to pursue clean water and fresh urban air with the same "gotta have it!" feeling as we do for good education or our prized possession?  What if we pursued the creation of economic systems that protected the stability of the physical environment with as much enthusiasm as we do the stability of financial markets?

Can we muster the will of an average 10 year old?

Cancer Therapy Without Side Effects Nearing Trials

Cancer is something of a pet peeve of mine. I'm always happy about good nanobionews, this via Wired Magazine.

Health Post

Well, the EPA -- by minimally protecting air quality -- has shown once again that having regulatory oversight for a first-approximation level economic system just doesn't work well. 

From the Washington Post article:

The EPA estimated that it will cost polluting industries $7.6 billion to $8.8 billion a year to meet the 75-ppb standard, but that rule will yield $2 billion to $19 billion in health benefits.

So, once again, we have this issue that we are accounting in a way that the right hand has no impact on what the left hand is doing, so even though we can see the connections -- and by "health benefits" just imagine how much innovation and productivity isn't happening to think about the magnitude of secondary effects -- we have no true "market mechanism" at work here.

When I was in MBA-land, we had a case in Cost Accounting regarding two Division heads having at it as they lobbied for their own interests.  This is the same issue:  the health people want one thing, and the industry lobbyists want another thing.  As a society, we have no CEO, no ultimate arbiter of whether we're following the mission of the organization, because as a society, we don't have a single mission.  This is where a "market" ends up being a helpful proxy for "wisdom of the crowds".

The good news is that we're on it, as a society; there are many people developing new ways to manage risk and evaluate sustainability in industry so as to enable us to reward those who "do good."

Underlying "doing good," though, is acting in concert with our own long-term self-interests.  We all know that sometimes we don't sleep enough because there's something else more important (work? sick kid?...).  As a society, sometimes we don't act sustainably because we're caught up in something else (economy? feeling self-protective?). Sometimes, it's the right decision, sometimes it's not.

Version 2.0 of the economy will be to have a global model that can account for all facets of humans' lives, not simply the accumulation of financial currency.  Further, it will be robustly sustainable. Our current market system has many components that push us towards accumulating money; that's how the score is kept, after all.  A sustainable system will have many components that push us towards a sustainable equilibrium, incenting us to "do good" simply by following those rules of the system that are now relegated to "morality" or "ethics," but which can (with effort) be part of the main measurement systems.

Technology Roadmap for Productive Nanosystems

The Foresight Institute has published their Technology Roadmap for Productive Nanosystems. (The map is on page 15.) Note in particular the ability to create filters and sensors is an early development.

MIT/Stanford VLAB Summary

VLAB had a very interesting line-up on Tuesday in a packed house at Stanford's Business School.

Ron Gonen, the CEO of RecycleBank, might have the most interesting doppelgoogle ever.  He also has an interesting business model for recycling, one that allows consumers to acquire frequency points for recycling.  The concept hinges on RFID chips that allow operators to match recycling with recycler.

An engaging, dynamic speaker -- who knows how to flatter Californians -- Ron reports 90% penetration in the communities he's launched within. He gets quite a bit of interesting information based on the places the recycler-consumers choose to spend their frequency points. He notes that low-income neighborhoods use their points at the supermarket.

One of his points that I think bears repeating here: he strives to leave some money on the table with respect to charging municipalities so that the municipality can point to the success of the program and build positive community cohesion.

The second presenter was the CEO of Lucid Design. This company creates real-time energy use dashboards for commercial building owners.  He made mention of a reality TV show that is a competition for lowering the carbon footprint.  The winner?  50% Saved.

The last commercial presenter was the founder of GreenPlug, a company that makes chips and gives firmware to companies: Pip Coburn, are you here?  (Pip had a very memorable picture in his book "The Change Function" that rails upon the excessive amount of computer hardware that must be lugged.) The hardware automatically recognizes what the specific device needs, and turns off after it's fully charged.  Further, it's created for easy disassembly, minimizing e-waste.

Advanced Materials and Consumerism

There is an interesting article out of MIT, about a new tiny, quick sensor.

Note to VC Funds interested in alternative energy because it's such an obvious thing: the field is competitive, there are many paths that are going to dead-end, and it's highly interactive with regulatory forces.

Wanna diversify?  You should be investing in filtering and sensing technology.  Control of microstructure as well as the creation of new types of advanced materials will make these the must-have consumer products of the (20)10's.

Decisionmaking Under Uncertainty - Global Warming

Here's a brilliant video describing how to deal with the "is it real or is it memorex?" questions about Global Warming.

In true Generation X leadership style, the argument -- devoid of idealism, only paying attention to pragmatic concerns -- is as follows: Who cares about what scenario is true or false? Who cares about who is right or wrong?

What should we do?

Shameless Promotion - Sustainability Scenarios

On Dec 20, Jamais Cascio will be hosting a one hour webinar on sustainability.  The official blurbiage:

The process of building a sustainable future follows diverse paths, and the choices we embrace today will shape the future we encounter over the next 20 years. By adopting a scenario planning approach, Cascio will look at what kinds of results we might get, and what kinds of opportunities and surprises those results could have in store.

Morgellon's, Nanotechnology, and the Medical Profession

As some know, I have recently had the honor of being chosen for the position of Director of Research Communities for the Center for Responsible Nanotechnology.

Occasionally people in the general public have questions about things they've heard or conjectured, and they submit these via the CRN webform. One such topic was Morgellon's, which for those who don't know is a newfangled mystery disease that seems to be legitimate but was discounted for a long time.  What it is, exactly, is apparently still up in the air.

Jamais Cascio, CRN's new Director of Impacts Analysis made a comment about the professional resistance "new" diseases encounter, and that climate change may foster a lot more of these kinds of things.

I think one of the major transformations that will have to occur in the medical profession will be how to deal with the proliferation of new data and treatments.

Assassination Markets

I've been doing some work in Prediction Markets for IFTF, and have been particularly interested in the concept of assassination markets:  I predict this person will die can be transformed into a price on their head.

The thing that's fascinating is that markets have positivity and negativity built into them all the time.  However, with prediction markets, it becomes explicit.  A new betting site, BetUs.com, allows people to bet on specific outcomes for global warming.

Will new types of regulation spring up to eliminate the possibility of creating markets in destruction? 

Integrity In Science

I found a science watchdog site -- which tracks conflicts of interest in regulatory environments and is put out by the Center for Science in the Public Interest -- while investigating another: 

Evidently the FDA is set to approve a new, controversial, cow antibiotic, and there's evidently backchannel that people there are paralyzed by a Guidance note.

A breakthrough in model creation technology

Right now, people are concerned about global climate models.  And global atmospheric submodels.  And models of the ocean. 

In comes D-Wave Systems, which has developed a Quantum Computer.  From their site:

Quantum computers are capable of solving the SE with linear scaling exponentially faster and with exponentially less hardware than conventional computers. For a QC, the difficulty in solving the SE increases by a small, fixed amount for every electron in a system. Even very primitive QCs will be able to outperform supercomputers in simulating nature.

woot

And now for some good news, including another serendipitous mistake story (and an example of why it's okay to whine about having a bad day) Science & Technology at Scientific American.com: Lab disaster may lead to new cancer drug.

Panning for silver.

The EPA, thinking systemically, regulates nanotech. Beware The Silver Lining: A Risk Management Review Of Commercial Nanotechnology (TreeHugger).

Look ma, no plugs.

From: Technology Review: Plastic Sheet of Power.

The position-sensing sheet relies on two types of flexible electronics. Using a technique similar to silk screening, the researchers printed an array of copper coils 10 millimeters in diameter. In addition, they used a modified inkjet printer to print an array of organic transistors. Both devices are thin and flexible enough to bend with a sheet of plastic.

Gadgets would need to be equipped with a coil and special power-harvesting circuitry to use the power pad.

...

Still, the flexible electronics used to make this prototype is still in its infancy. "There's a lot of space to improve," Someya says. The devices aren't quite reliable enough. They change their characteristics in a period of months, he says, due to oxygen and humidity, which attack organic semiconductors and electrodes. However, he says, he is optimistic because some commercial displays, called organic electroluminescence (OEL) displays, use similar materials, and in recent years the display market has helped drive improvements in these organic devices.

Someya estimates that it will take about five years to overcome the remaining technical issues. Ultimately, he hopes to create a rollable, portable, and reliable power system that could be built into furniture and homes. "Our final goal is to implement the device as infrastructure," he says, "embedded [in walls and tables] from the beginning." Imagine, he says, moving a flat-screen television from wall to wall, without needing to worry about plugging it into an electrical outlet.

Happy Holidays

Rebroadcast for your amusement: Science of Santa Claus: Jolly Old Elf Really Can Deliver Presents in One Night, Says NC State Engineer.

Thyroid Disease Information Source -- Mary Shomon

Yet another female friend was recently diagnosed with a thyroid issue, so I've got to put this up: Home Page of Mary Shomon.  This is an author I found when trying to figure out why I felt SO much better when all I had been diagnosed with was "subclinical hypothyroidism." 

She's a widely-cited author who is herself hypothyroid. She writes simply, aggregates research, and the one thing that comes out loud and clear: this is a fast-changing field! 

Further, unless the blood tests are ordered, they relevant biochemicals aren't monitored (men? are you listening? there's research linking auto-immune disorders to pituitary and adrenal function) and even if they are the biochemicals are tough to build a diagnosis from. 

Irrelevantly, my symptoms, for the curious or bored, or those who simply like to click

Invisibility

I wondered what the negative index of refraction stuff would be good for.
Scientists Take First Steps Toward Invisibility - Yahoo! News.

Scientists as Heros

Wants some good holiday news?  How about this:
Scientists discover how cancer spreads

Disease sends bone marrow cells to prepare new tumor sites, study finds