It’s hard to build high-growth cleantech companies using venture capital: looting the planet has a much higher return on investment than saving it. Twenty years ago, hopes were high for companies looking to mitigate environmental impacts, but a prolonged recession, China’s dominance over solar power manufacturing, and low natural gas prices were just a few of the factors that undermined expectations. investors and left the industry limping for years. Many vaunted products and technologies never made it to 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 all investors are willing to foot the bill for a decade of R&D.
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“If a new, more diverse set of players avoids the mistakes of the cleantech venture capital boom and bust, then they will be able to support a new generation of cleantech companies,” the paper concluded. That hypothetical cohort is now a reality: A McKinsey report found that climate technology “could attract $1.5 trillion to $2 trillion of annual capital investment” by 2025. Lead climate writer Tim De Chant spoke to five investors for their take on the state of the industry in Q3 2022. Their answers shed light on how venture capitalists are reacting to the downturn, what technology may have the biggest potential 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, CEO, Obvious Ventures Amy Burr, President, JetBlue Technology Ventures Thanks so much for reading TechCrunch+ this week! walter thompsonSenior Editor, TechCrunch+@yourstar
Twitter Space: Immigration Law for Startups with Sophie Alcorn
Image credits: Bryce Durbin/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 living and working legally in the United States. We’ll be taking questions from the audience during the discussion: please follow @techcrunch on Twitter so you can get a reminder before the chat starts.
During a recession, sales teams need to think like product managers
Image credits: Magnetic-Mcc (opens new window) / Getty Images SaaS sales teams leave no stone unturned in their quest for greater efficiency, but they almost always focus on solving their own problems. Studying strategies to drive lead generation is great, but sales teams should also “look at successful customer experiences and identify what went well in each case,” says Erol Toker, CEO and founder of Truly.co. How many trades were required before a customer got a demo or signed a contract? Do you use lead quotas as a performance benchmark? “Thinking like a PM means there are no prospect quotas,” according to Toker. “Rather, it means focusing on the customer journey.”
Looking for a product-market fit in a down market? Hire freelancers to manage your burn rate
Image credits: Andrew T. White/Getty Images Firing employees often carries an opportunity cost that can be difficult to offset later: rest of the workforce is 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 execute sales to conserve their available 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-to-market fit without staking the farm.”
A 7-Step Method for Running Effective Kickoff Meetings
Image credits: John Lund (opens in a new window) / Getty Images We often publish articles with tips for writing presentations, but if you need a framework to manage the meeting itself, we’re here to help too. Nathan Beckord, CEO of Foundersuite.com and host of the “How I Raised It” podcast, shared a seven-step method that helps founders set expectations and connect on a personal level with the investors they are pitching. “Even if the investor is not a good fit for your startup, he may just introduce you to his contacts.”
Why it’s so hard to bring enterprise AI/ML products to market and what to do about it
Image credits: SEAN GLADWELL (opens in a new window) / Getty Images To design an effective demand generation strategy, organizations must understand how their customers seek solutions. But what do you do when your category is so new that no one knows how to define it? The ambiguity around AI and ML creates a huge challenge for marketers in this domain, writes Mike Tong, director of strategy and operations for ventures at B Capital. To solve demand generation, Tong advises companies to stay in category-building mode, avoid complexity, and choose a specific vertical and problem statement. “While the current environment is complex in many ways, it can be liberating for your marketing strategy. Your business can play a role in defining the space you will one day win.”
How startups should handle the recession
Image credits: Malte Mueller (opens new window) / Getty Images As investors trim their portfolios, track is now, more than ever, a crucial measure of longevity. That’s why in the coming recession, the amount of cash you have on hand should dictate how aggressive or conservative your plans should be, writes Mike Volpi, general partner at Index Ventures.
The best advice for handling the recession should be based on the length of your run 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, respectively, “stay aggressive”, “ruthlessly prioritize” and “time to cut back”.