I hope that 50 years from today, I’ll be able to look back at this moment in time and see it as a catalyst -- a crystallizing moment that led America (and the rest of the world) to dramatically increase investment in research that would lead to clean energy being the only kind of energy that we use. Having said that, I struggle to see how President Obama’s recent speech changes anything for an entrepreneur thinking about starting a company today -- and I’d argue that that’s a good thing.
President Obama recently made his annual State of the Union address to Congress. In it, the President issued a now-famous challenge to the nation: “By 2035, 80% of America’s electricity will come from clean energy sources.” The President compared the challenge we face today to the one we faced following the Soviet Union’s launch of Sputnik in 1957, and he’s promised to increase R&D funding provided by the government to a level that hasn’t been seen “since the height of the Space Race.” Following President Obama’s speech, there have been numerous columns telling VCs to “be daring” and encouraging entrepreneurs. Given all the discussion on our new 2035 goal, I thought that it made sense for a VC to weigh in.
I should say at the outset that I love it when a leader makes an audacious goal and challenges an organization (or a country). When President Kennedy made his famous “Man on the Moon” speech almost 50 years ago, he captured the imagination of Americans. He challenged us not just to put a man on the Moon, but also to create a network of communications and weather satellites. Those last two ideas don’t get discussed as often when we think of Kennedy’s speech, but they were certainly no less important.
Obama is currently proposing increasing the funding for clean energy to $8B. That’s very exciting for the long term, but these dollars are likely to be focused on university and National Lab research. Almost by definition, it will be years before we see the successes of some of this research or the opportunities to commercialize them. It would be tragic for a generation of entrepreneurs to miss the enormous opportunities that exist today because they’re banking on the promise of tomorrow. One could argue that they’re not completely mutually exclusive, but with so much attention being paid to the president’s speech, I'm concerned that people are missing the opportunities right in front of them.
What opportunities do I see? Plain and simple, there is an incredible amount of innovation still to come in cleantech. At the end of 2010, I wrote about 2011 being the year of energy efficiency -- and nothing I’ve seen in the first month of 2011 has dissuaded me. The rapidly falling prices of LEDs are making solid state lighting increasingly economical. We’re seeing distributed generation for solar demonstrate tremendous commercial success for the leaders in the space. Smart meters are installed on millions of homes in America (including many homes in Silicon Valley). Even electric cars, a former staple of science fiction (or affordable only to the elite), are now quite affordable and becoming increasingly available. That’s just a small sample of the opportunity that exists today in just a few segments of the cleantech sector.
Obama’s clean energy goals have upped the ante for cleantech innovation over the next two decades. While 2035 may seem far off, the foundation for a clean energy future starts today. If there’s one thing that is clear to me after listening to the State of the Union address, it is that there has never been a better time to start a new company focused in cleantech. Got something brewing? Game on. I can’t wait to hear about it.
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Mike Dauber is a vice president at Battery Ventures. He co-authors the firm's Clean Makes Green blog. You can contact him on Twitter at @mdauber.