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Mgt Building A Green Business Osu Jan09

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martin tobias presents lessons on starting a green business

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Mgt Building A Green Business Osu Jan09

  1. 1. Building a Green Business: Lessons and Opportunities Martin Tobias January 2009
  2. 2. Tech nerd to Green and back
  3. 3. Martin Tobias <ul><li>In the beginning </li></ul><ul><ul><li>Medford HS ‘82, Mensa, the other thing. </li></ul></ul><ul><ul><li>OSU ‘86, ASOSU Treasurer, Lambda Chi Alpha, Bus/CS </li></ul></ul><ul><li>Accenture, Information systems consulting </li></ul><ul><ul><li>Senior Manager, ‘87-’91, Microsoft, Sullivan Payne, Coopervision Silco, RR Donnelley </li></ul></ul><ul><li>Microsoft Corp., Software </li></ul><ul><ul><li>Program Manager, ‘91-’97, 4 years in Europe </li></ul></ul><ul><li>Loudeye Technologies, Inc., Digital Media services </li></ul><ul><ul><li>Founder, Chairman, CEO, ‘97-’00, lead investor, $0-$12M revenue. </li></ul></ul><ul><ul><li>Grew from 1 to >400 people, senior mgt, board, 5 acquisitions. </li></ul></ul><ul><li>Ignition Partners, Venture Capital </li></ul><ul><ul><li>Venture Partner ‘02-present (active ‘02-’04) </li></ul></ul><ul><ul><li>Infrastructure software investments, Cloudmark, Inc. </li></ul></ul><ul><li>Imperium Renewables, Inc., Biodiesel producer </li></ul><ul><ul><li>CEO/Chairman ‘05-’08 first investor, $0-$89M revenue. </li></ul></ul><ul><ul><li>Scaled up tech from pilot to largest BD plant in world. </li></ul></ul><ul><li>Kashless, Inc., ReCommerce </li></ul><ul><ul><li>CEO/Founder ‘08 </li></ul></ul><ul><li>Other </li></ul><ul><ul><li>27 personal venture investments </li></ul></ul><ul><ul><li>Founder Northwest Energy Angel Network. </li></ul></ul><ul><ul><li>Leading man, Biker Dreams the movie. </li></ul></ul><ul><ul><li>Blog www.deepgreencrystals.com , www.frombitstobarrels.com </li></ul></ul>
  4. 4. From Bits to Barrels <ul><li>1982 Timex Sinclair, Kaypro, Basic </li></ul><ul><li>1984 OSU Cobol, cards, Pascal on MAC </li></ul><ul><li>1985 Leading Edge, ASOSU Treasurer, 1 st lab in MU. </li></ul><ul><li>1987 RPG on S/38 Andersen Consulting, 2 patents </li></ul><ul><li>1989 Microsoft, power to the PC </li></ul><ul><li>1997 Loudeye, a/v on every computer, 3 patents </li></ul><ul><li>2001 Ignition Partners, fund next big thing </li></ul><ul><li>2004 Bored with tech, need next big market </li></ul><ul><li>2005 CEO Imperium Renewables, Biodiesel for all </li></ul><ul><li>2008 Surf </li></ul><ul><li>2009 CEO Kashless, Inc., ReCommerce </li></ul>
  5. 5. The Scary Stuff
  6. 6. WE are the problem
  7. 7. THEY have the resources
  8. 9. Where is the Peak? We passed it
  9. 10. % of WW GDP for oil
  10. 11. Oil still relatively cheap
  11. 12. Dramatic Changes: An Ice-free Arctic? 1979-2003: Progressive Loss of Arctic Ice
  12. 13. The big carbon emitters
  13. 14. The Frequency of Weather Related Disasters Data from Swiss Re 2005
  14. 15. Can we actually do anything?
  15. 16. New York City circa 1950
  16. 17. New York City December 2001
  17. 18. Diesel Grew Quickly in Europe Source: ACEA www.acea.be
  18. 20. Yes we can
  19. 21. Reading <ul><li>The Bottomless Well , Peter Huber </li></ul><ul><li>The Prize , Daniel Yergin </li></ul><ul><li>Sleeping with the Devil , Robert Baer </li></ul><ul><li>Infidel , Ayaan Hirsi Ali </li></ul><ul><li>Energy at the CrossRoads , Vaclav Smil </li></ul>
  20. 22. Key Insights <ul><li>Oil crisis, not energy crisis </li></ul><ul><li>Americans are lazy </li></ul><ul><li>Solutions must be upgrades not platforms </li></ul><ul><li>Entrepreneurs will find the solutions </li></ul>
  21. 23. <ul><li>Corn Ethanol </li></ul><ul><li>Biodiesel </li></ul><ul><li>Solar PV </li></ul><ul><li>Wind </li></ul><ul><li>Geothermal </li></ul>The Markets You Think Of The New Green <ul><li>Engines ($200B) </li></ul><ul><li>Lighting ($80B - US) </li></ul><ul><li>Appliances ($10’sB+ ) </li></ul><ul><li>Batteries + Flow Cells ($50B+) </li></ul><ul><li>Gasoline ($500B+) </li></ul><ul><li>Diesel ($500B+) </li></ul><ul><li>Jet Fuel ($100B+) </li></ul><ul><li>Cement ($100B+) </li></ul><ul><li>Water ($500B+) </li></ul><ul><li>Glass ($40B) </li></ul><ul><li>BioPlastics ($10’sB+) </li></ul><ul><li>Generation - $250B - US </li></ul><ul><li>Solar Thermal </li></ul><ul><li>EGS </li></ul><ul><li>Clean Coal </li></ul><ul><li>New Nukes </li></ul>Think big markets not “ green ”
  22. 24. Areas of promise <ul><li>Software meets energy </li></ul><ul><li>Next generation liquid fuels, esp feedstock </li></ul><ul><li>Enhanced Geothermal </li></ul><ul><li>Unregulated water power </li></ul><ul><li>Captive energy markets (NE, Hawaii, etc.) </li></ul><ul><li>Materials with strong IP </li></ul><ul><li>Waste to energy, enhanced biomass </li></ul><ul><li>Consumer solutions today. </li></ul>
  23. 25. How I decide <ul><li>Early market with meta trends I believe </li></ul><ul><li>Technology advantage </li></ul><ul><li>Personal advantage </li></ul><ul><li>Some kind of fundamental inefficiency </li></ul><ul><li>Direct path to market </li></ul><ul><li>Minimal regulatory </li></ul><ul><li>Capitalization matches environment </li></ul>
  24. 26. Why Loudeye? <ul><li>Trend: Audio/video become standard </li></ul><ul><li>1997: 14.4 modem, Real Audio, QT CD only, MS Netshow, $100/minute encoding </li></ul><ul><li>Problem: multi-format, cost of encoding, software applications. </li></ul><ul><li>Value prop: Scale multi-format input/output encoding and mgmnt apps. </li></ul><ul><li>Result: the first large scale digital media deployments, Apple iTunes, XM Sat, etc. </li></ul>
  25. 27. Why Imperium Renewables? <ul><li>Trend: Peak oil, lack of drop in alts. </li></ul><ul><li>2004: $45/brl oil, 25MG BioD, peak oil </li></ul><ul><li>Problem: scale of alternative liquid fuels. </li></ul><ul><li>Value prop: Scale up capacity, grow alts. </li></ul><ul><li>2007: $145/brl oil, 300MG BioD, peak oil. </li></ul><ul><li>Result: the largest biodiesel manufacturing in world, world wide plan, biojet, algae. </li></ul>
  26. 28. Some lessons from Imperium <ul><li>The Good </li></ul><ul><ul><li>Technology and scale up worked </li></ul></ul><ul><ul><li>Right about petroleum prices, structural change. </li></ul></ul><ul><ul><li>Capital markets initially favorable. </li></ul></ul><ul><ul><li>Biodiesel fundamentals WAY better than Ethanol. </li></ul></ul><ul><li>The Bad </li></ul><ul><ul><li>Tech not enough when inputs rise faster than outputs. </li></ul></ul><ul><ul><li>Long term debt for new build technologies VERY HARD. </li></ul></ul><ul><ul><li>When your comps tank (ethanol), you tank. </li></ul></ul><ul><ul><li>Don’t give your first big customer equity. </li></ul></ul><ul><ul><li>Don’t change growth strategy in midstream. </li></ul></ul>
  27. 29. Biodiesel in Indonesia <ul><li>$115K start up cost </li></ul><ul><li>1,500l/day coconut biodiesel plant. </li></ul><ul><li>9,000Rp/l fully loaded production costs B100 </li></ul><ul><li>Diesel 13,000Rp/l delivered. </li></ul><ul><li>diesel customer saves $, local economy keeps money on island. </li></ul>Sumba Foundation and Tobias Foundation
  28. 30. Why Kashless, Inc.? <ul><li>Trend: Recession, climate change. </li></ul><ul><li>2008: 15M users, 60Mpv, CL, FS, <1% </li></ul><ul><li>Problem: inefficient market for free, reuse and lack of marketing awareness. </li></ul><ul><li>Value prop: eBay for free stuff, GHG tracking, local, social net integration. </li></ul><ul><li>Result: ? </li></ul>
  29. 31. Competition $ $ features features craigslist Kashless Kash Craig All products Y Y Y - Y Tax receipt Y - - - - Adv. Search Y - - - Y Reputation Y - - - Y Scheduling Y - - - - Points Y - - - Y eComm integr. Y - - - Y Multi notification Y - - - Y Widgets Y - - Y Y Delivery tools Y - - Y Y Cost % of trans 0-2 0 0 2-5 9-20
  30. 32. Success in Green means… <ul><li>Change Coal, materials, efficiency, or oil. </li></ul><ul><li>High capital effeciency </li></ul><ul><ul><li>Total raise to exit < $25M </li></ul></ul><ul><ul><li>Declining costs with scale. </li></ul></ul><ul><ul><li>Short innovation cycle. </li></ul></ul><ul><li>Clear, direct path to customer. </li></ul><ul><li>Pricing power in value chain. </li></ul><ul><li>Low regulatory hurdles. </li></ul><ul><li>Product can achieve unsubsidized competitiveness. </li></ul>
  31. 33. In the end… <ul><li>Do what you are passionate about. </li></ul><ul><li>Look for ability to add unique value </li></ul><ul><li>Work is better than study. </li></ul><ul><li>[email_address] </li></ul><ul><li>We have internships </li></ul><ul><li>http://www.deepgreencrystals.com </li></ul>
  32. 34. Background slides
  33. 35. Recognized Renewable Energy Expert
  34. 36. Liquid fuels data dump
  35. 37. Some fun with Oil numbers <ul><li>+$60/barrel = + $735B for top 8 oil producers </li></ul><ul><li>Russia is now leading oil producer </li></ul><ul><li>70% of oil futures are “financial” in 2007 up from 40% in 2005 </li></ul><ul><li>95% production gains from spare capacity </li></ul><ul><li>1% oil demand increase = 40% price increase </li></ul><ul><li>WW production essential flat since 2005 </li></ul>
  36. 38. Oil Infrastructure Rusting Away <ul><li>Almost every component of oil and gas system beyond original design life and rusting away. </li></ul><ul><li>If the system is not rebuilt, supply will artificially suffer acute drop in next decade. </li></ul><ul><li>Rebuilding the industry infrastructure will cost $ trillions ($50 to $100 trillion?) (Simmons). </li></ul>
  37. 39. Time for Oil to go bye-bye
  38. 40. GHG data dump
  39. 41. U.S.: Emerging State-Level CO2 Regulation Source: CO2e.com
  40. 42. www.azfoo.net

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