It’s hard to build fast-growing clean tech companies with venture capital: looting the planet has a much higher return on investment than saving it.
Twenty years ago, there were high expectations of companies looking to reduce environmental impact, but a prolonged recession, China’s dominance over solar production and low natural gas prices were just a few factors that undercut investor expectations and stumbled the industry for years. Many vaunted products and technology never made it to the market.
A 2016 MIT Energy Initiative working paper found that VC is “the wrong model for clean energy innovation.” It takes years to create economies of scale, and not every investor is willing to foot the bill for a decade of R&D.
Full TechCrunch+ articles are available to members only.
Use discount code TCPLUSROUNDUP to save 20% on a one or two year subscription.
“If a new and more diverse set of actors avoids the mistakes of the clean tech VC boom and bust, they may be able to support a new generation of clean tech companies,” the paper concluded.
That hypothetical cohort is now a reality: A McKinsey report found that climate tech could attract “1.5 trillion to $2 trillion in annual capital investment by 2025.”
Senior climate writer Tim De Chant spoke to five investors to get their take on the industry’s state of Q3 2022† Their answers shed light on how VCs are responding to the downturn, which technology has the greatest potential for impact, and what they’re looking for right now:
- Pae Wu, General Partner, SOSV; CTO, IndieBio
- Christian Garcia, partner, Breakthrough Energy Ventures
- Rajesh Swaminathan, venture partner, Khosla Ventures
- Andrew Beebe, Managing Director, Obvious Ventures
- Amy Burr, Chairman, JetBlue Technology Ventures
Thank you so much for reading TechCrunch+ this week!
Senior Editor, TechCrunch+
Twitter Space: Immigration Act for Startups with Sophie Alcorn
Immigration attorney and TechCrunch+ columnist Sophie Alcorn will join me on Thursday, June 16 at noon PDT/3 pm EDT to answer questions about legal living and working in the United States.
During a recession, sales teams need to think like product managers
SaaS sales teams leave no stone unturned in search of greater efficiency, but their focus is almost always on solving their own problems.
Studying strategies to drive lead generation is great, but sales teams “should also look at successful customer experiences and determine what went right in each case,” said Erol Toker, CEO and founder of Truly.co.
How many exchanges did it take for a customer to get a demo or sign a contract? Do you use lead quota as a performance benchmark?
“Thinking like prime minister means no lead quotas,” Toker said. “It rather means focusing on the customer journey.”
Looking for product-market fit in a declining market? Hire freelancers to manage your burn speed
Laying off employees often creates opportunity costs that are difficult to recover later: the remaining staff members are demoralized and companies can lose years of institutional knowledge in one afternoon.
To control costs, founders should consider hiring freelancers to test strategies, manage products, and run sales to preserve their cash, writes Dean Glas, co-founder and CEO of SellX.
“In today’s uncertain market, using freelancers is a way for companies to find or deepen product-market fit without betting on the farm.”
A 7-step method to hold effective pitch meetings
We often have articles with advice for building pitch decks, but if you need a framework to manage the meeting itself, we’re here to help too.
Nathan Beckord, Foundersuite.com CEO and host of the “How I Raised It” podcast, shared a seven-step approach that helps founders set expectations and connect on a personal level with the investors they pitch.
“Even if the investor isn’t a good fit for your startup, they might just be able to introduce you their contacts.”
Why it’s so hard to bring enterprise AI/ML products to market and what you can do about it?
To develop an effective demand generation strategy, organizations need to understand how their customers search for solutions. But what do you do when your category is so new that no one knows how to define it?
The ambiguity surrounding AI and ML creates a major challenge for marketers in this domain, writes Mike Tong, director of strategy and operations for enterprise at B Capital.
To solve demand generation, Tong advises companies to stay in the category creation mode, avoiding complexity and choosing a specific vertical and problem statement.
“While today’s environment is complex in many ways, it can be liberating for your marketing strategy. Your company can play a role in determining the space it will someday gain.”
How startups should deal with the recession
As investors tighten their wallets, the runway is now, more than ever, a critical measure of longevity.
That’s why in the coming downturn, how much cash you have on hand should determine how aggressive or conservative your plans should be, writes Mike Volpi, a general partner at Index Ventures.
The best advice for dealing with the downturn should be based on the length of your runway and the efficiency of your business. Runway falls into one of three categories: Two years or more; between one and two years; a year or less.
The corresponding strategy for each would be “stay aggressive”, “relentlessly prioritize”, and “time to trim” respectively.