MIT Enterprise Forum Dinner Program: “How Will Green Return the Green” Wrap-Up

by Rebecca Anderson

At the MITEF program on January 20th, the panel discussion, moderated by Jesse Berst founding editor of SmartGrid News, touched on many issues from policy to financing. The breadth of the discussion was a reflection that the clean tech sector is still new and its success is dependent on a number of key resources striking a perfect harmony before it becomes an integral part of our economy. Despite that, the panel seemed to conclude at least the following: we are in a transition to a greener frontier, we have eager entrepreneurs on the frontlines of that frontier creating innovative technologies, we each have a role to play in this transition and, in the words of Jesse Berst, green will definitely return the green. Although the panelists had different view-points on a number of issues discussed, resulting in an entertaining and lively discussion, there was unanimous agreement on the above conclusions.

Roger Woodworth, VP of Sustainable Energy Solutions at Avista, described the current state of clean tech as a rubber band, with the innovators at the front and everyone else (society) at the back. Roger pointed out that eventually, the back will be forced to catch up with the front or the rubber band will snap.

So, what is the hold-up with those at the back? Patricia Irving, the entrepreneur representative on the panel and CEO of Innovatek, highlighted two major concerns for clean tech entrepreneurs related to the holdup at the back from Roger’s rubber-band analogy. The first being investors, especially those in the Northwest because of their history with fast turnaround software plays, are looking for the same quick returns. Brad Zenger managing director at Pivotal Capital, one of the few venture capital funds focused on clean technology in the Pacific Northwest, echoed Patricia’s concern and emphasized the lack of capital was especially concerning compared to the number of patents and engineers in the field. The reality is that a typical cleantech play will be a long term, capital intensive investment. The second concern: finding customers willing to make sacrifices to adopt new sustainable practices in their day-to-day lives, thus demanding sustainable products and technologies.

There has been a lot of hype about government grants and funding, but Rogers Weed, Director of the Washington State Department of Commerce explained, that the government does not want to be in the position of picking winners and losers like a venture capitalist. Investing in high risk young companies, is an irresponsible use of taxpayers money, he said, and before the government will invest in a company, the investment and banking communities need to step-up, vet the business and prove that they believe in its success (part of his defense of matching funds in current government grants, which means that grants typically go to more established companies). Unfortunately, the investment and banking communities are hurting in the current economic climate, which results in a number of young companies with big potential unable to find traditional financing sources. In the meantime, I predict there will be a lot of boot-strapping, entrepreneurs taking advantage of various technology incubators, such as the McKinstry Innovation Center, and consolidation of resources among entrepreneurs with synergistic business ideas. On the positive side, when the private sector loosens its purse strings, there will be many companies with high potential teed-up for paying out high returns.

Patricia’s second concern can only be addressed by following the advice Rogers gave in his closing comments, “TAKE ACTION!” Each of us can make a difference by enabling sustainable practices in our day-to-day lives, supporting various local clean tech programs such as the one MITEF orchestrated, and putting pressure on our legislative representatives to take action too.

For those of you on the frontlines of the clean tech revolution, whether you are an entrepreneur, innovator, investor or early-adopter, consider yourselves pioneers and, as I recall from the panelists’ comments, the Northwest, its people and its businesses are great at being pioneers - so let’s keep the tradition alive.