an interesting story here at Reuters about the investments, led by
John Doerr, that Kleiner Perkins has been making in various
cleantech companies. The not so subtle underthread is that they've
made a strategic error by investing in the sector rather than in
the booming internet business. Given that I work and invest in
cleantech I obviously can't say that Doerr and Kleiner are wrong
to look at the sector. However, I think I would argue that they'v invested
changes have left Kleiner, the most active venture capital firm
in cleantech, with dozens of investments that may never pay off,
threatening its image as the gold standard of venture capital.
remains bullish on cleantech and in an email to Reuters called
Miasole a well-run company that "was caught in a perfect storm."
He did not respond to questions about his personal investment.
the cleantech sector has challenges, but it would be a mistake
to underestimate the size of the opportunity," Doerr said in the
email, adding revenues in Kleiner's cleantech portfolio rose 70
percent over 2011, to $2.4 billion in 2012.
argue about the sector itself either: there really are great
fortunes to be made out of changing the way the world powers
itself. Rather, I'd argue that they've invested too much money in
specific companies. For I've had dealings with one of the
companies they funded. And the experience was, well, not terrible,
but not good.
obviously, it would be possible to call everything I'm about to
say sour grapes. They didn't employ me, take me seriously, I'm
just being a grump and slagging them off as a result. So I'll not
actually name the company.
And the basic
idea of what the company is trying to do sounds just absolutely
great. I can't tell you what that is because it will immediately
identify the company. But take my word for it: the basic idea is
entirely peachy and dandy. It may or may not work of course but
the basic theory is entirely plausible. Even an obvious method of
dealing with energy production.
As one input
into their manufacturing process they need a specific material.
That material being on in which I am the global expert. Yes,
that's right, I'm being extremly bumptious here. The expert,
not just an, one of many, but the guy who knows more than anyone
else about it. It's purely happenstance that I do but someone does
have to be said expert in anything and in this particular flavour
of our universe I am the expert for this. I know who makes it,
from what, in which quantities, who they sell to, where you might
look for new supplies, which minerals contain it, where they can
be found, how you would process them, what it would all
cost.....the expert. Further, I've been in this market for
knowledgeable guy, that's me. And this company really does need
this material: it's the secret sauce that makes their machines
work. Over the years I've tried to make contact with the company.
You use this stuff, I know where to get it so that you can use it
sort of thing. And it's at that point that I begin to think
they've got too much money for a start up company. They've just
got too much money to burn.
with a start up you can find out and get in touch with the right
person pretty quickly. "Oh, yeah, it's Jim or Bob who deals with
that, let me put you through." It's very unusual to find a whole
department, with a heirarchy, handling something as simple as raw
materials procurement. It's unusual to find that even in a large
company these days, given the effort everyone's been making at
flattening the management structure. But that's what I did find.
And several attempts to get through never did lead to a contact
Then I did
get a contact from the company. From an external consultant who
seemed to have no real knowledge of the field. Entirely
unconnected with my previous approaches. And instead of wanting to
talk about where they might get their necessary materials, they
were offering some research work. Into an area that neither I nor
they had much idea about and even then not something that they
really needed to know. Yes, I know this reads like a whinge: but I
am trying to get across the point that they just haven't been
acting like the lean and hungry start up one might hope they would
For even when
I pointed out that I had at my fingertips the answers to the real
questions they needed answers to, I once again got radio silence.
continued to watch what they're doing and to my amazement they've
signed up with one particular potential supplier. The one
potential supplier out there that has very little chance indeed of
ever being able to make a go of producing the material they want.
The one supplier that no one in the industry would point them to.
Indeed, would generally advise people to avoid. Again, I can't
give the technical reasons why, for this would reveal who it is
again. But the essential point is that if this mooted production
method can actually be made to work then there are three extant
plants that you could bolt it onto: instead of building an
entirely new, from scratch, plant as is being suggested.
is only personal experience, anecdata if you like. And I'm sure
you can construct an argument that this is just me angry at not
being listened to: or paid perhaps. But my takeaway impression of
this company is simply that they've got too much money. Too much
to be cute and quick as a start up needs to be.
why I think that Doerr and Kleiner have invested too much in
cleantech. Not that the total amount of money is too large, nor
that the sector isn't worth investing in. Rather, that they've put
too much into this one company I know about. So much that it just
isn't acting like the nimble and new company it needs to be to
Yes, it's an
entirely personal view: but that's still what the view is. At
least one of their investments just seems to have too much