by: Joel Makower
Last week’s Cleantech Venture Forum in San Francisco was, like the several that preceded it over the past few years, a celebration of the growing clean-tech industry. But each year, the crowds get bigger, the presenting companies get more sophisticated, and the insider talk gets more self-assured.
I started going to these events — at which 15-20 companies present their business plans in rapid-fire succession to an assembled gathering of qualified investors — in 2000, when they were produced by a now-defunct nonprofit, a precursor to the Cleantech Venture Network, which now produces them. The sector was born into a post-boom, dot-bomb world in which venture capitalists were holding on to their wallets, and technology companies were lucky to get any funding at all. Many of them didn’t. My colleagues and I at Clean Edge saw dozens of companies, some with impressive and promising clean energy and advanced materials innovations, wither and die on the vine for lack of the $200,000 or so they needed to get to their next stage of development.
That’s a far cry from, say 1998, when such companies might have easily gotten an order of magnitude more than that just for showing up.
How things have changed. The world’s growing resource needs and environmental concerns have ripened markets for solar, wind, and fuel cell energy; advanced bio-based materials; water-saving technologies; and other innovations that fall within the clean-tech rubric. And investors have started pouring money into the space — slowly at first, with signs of much more to come. At least two traditional Silicon Valley venture capital firms are readying quarter-billion-dollar clean-tech funds. The state of California is pumping hundreds of millions more into the market. Oil companies, utilities, electronics manufacturers, and chemical companies are investing even larger sums. And smaller investor groups, like Expansion Capital Partners, are raising money to target the clean-tech space.
Last week’s two-day event saw the typical assortment of entrepreneurs pitching solar and hydrogen energy technologies, advanced battery storage technologies, and other energy-related innovations. There were also firms offering water-conservation products and services, and one with a technology to convert manure and other farm waste into organic fertilizers. One of the most talked-about companies, MBA Polymers, makes recycled plastics from “complex mixed plastic streams.” It is building a plant in China to capture the waste plastics from computers and other used plastic detritus and turn it back into the raw materials for making new plastics.
As the MBA Polymers example suggests, the presenting companies at Cleantech have gone well beyond the business-plan stage. Most have significant capital and intellectual property, impressive management teams — every firm, it seems, has a passel of PhDs on board, if not a Nobel Laureate or two — and a few customers. And all were looking for their next $2 million or $20 million to get them to the next stage.
What was my favorite? All that high-tech wizardry notwithstanding, I was seduced by the potential of a decidedly low-tech company: EcoDuro, a manufacturer of high-strength shipping pallets engineered from recyclable paper and glue.
It may not sound all that world-changing until you begin to appreciate the world of pallets — those ubiquitous wooden shipping platforms that are the workhorses of industry. American businesses send hundreds of millions of wooden pallets into landfills every year, spending a billion or so dollars in the process. About 40% of all hardwood harvested in the U.S. is for pallets, about two-thirds of which are used only once before being tossed out. A fourth of all wood in landfills is from used pallets.
EcoDuro makes a pallet out of corrugated cardboard and recycled paper. It's 100% recyclable, lighter to ship, doesn’t require fumigation (as wood does, to eliminate wood-boring insects), and can be recycled along with other paper and cardboard. And the company’s manufacturing process also allows pallets to become marketing and merchandising tools — which makes great sense, given the number of shoppers who now patronize “warehouse” stores.
I don’t mean to geek out on cardboard pallets. The Cleantech forum contained many other impressive technologies and companies. But EcoDuro reminded me that for all the promise of solar energy and the hydrogen economy, that cleaner, greener innovation often comes in rather low-tech forms — a simple idea that has the potential to cause dramatic shifts in resource use at very large scales.
Original Post: http://makower.typepad.com/joel_makower/2005/03/an_ode_to_shipp.html
