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Startupbootcamp Virtual Demo Day – Decarbonize

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This week, another shout out to the team at Startupbootcamp (SBC), for not only nurturing some of the most interesting startups emerging in key tech sectors, but also for managing to co-ordinate accelerator programmes and virtual demo-days in the very challenging circumstances of the past two years. The most recent virtual demo day I attended was Decarbonize last December, which was backed by corporate partners Mitsubishi Corporation and NYK Line.

Here is a summary of the ten participating projects (links are in the project names):

Electro-Active Technologies

According to the presenters, more than a third of all food is wasted – and all that food ending up in landfill is generating tonnes of methane. Using a biological-electrochemical process, this team is developing the use of electron-generating bacteria to convert food waste into hydrogen, powered by renewable energy. The bacteria-powered system can be installed onsite for commercial applications (which reduces transportation costs), and can contribute to the decarbonisation of food and waste transportation and associated industrial processes. As a further bonus, this waste management solution is also a source of carbon credits.

Urchinomics

Sea urchins are responsible for devastating swathes of kelp forests. This project is designed to re-home the echinoderms in land-based farms (“ranches”) with natural feed, and re-position them as a premium sea-food (especially sushi restaurants, who are willing to pay above-average prices). In doing so, vital kelp stocks will be replenished.

Nozama

With its origins as a solution to defining and achieving “measurable sustainability”, Nozama is designed to track the amounts of carbon dioxide emitted, reduced and extracted from the environment. This particular presentation focused on single-use plastics, which makes sense given we all need to do a better job of reducing/removing these items from the environment, and at every stage in the manufacturing, packaging, distribution, consumption and disposal life-cycle. However, they have chosen to complicate the process. As part of the tracking solution, the project has decoded to introduce blockchain technology, in the form of smart contracts and non-fungible tokens (NFTs). They aim to do this by capturing the data associated with waste collection and processing, to demonstrate that no waste has gone into landfill or the environment, and that it has been repurposed or recycled. So far, so good, but then it gets even trickier. This recycling data is converted into an NFT, and sold via the “Plastiks” marketplace, which acts as a form of recycling guarantee, and a “proof of capture”. The NFT minting occurs at the point of invoice to the waste customer, by uploading the recycling data and issuing a certificate. from waste collection and processing. Further, the NFT is combined with art, to “create an emotional engagement with recycling”. The re-cyler selects art to be associated with the NFT, or the artist selects the re-cycler. Finally, the plastics producers need to buy the NFT (certificate plus the linked artwork?) and offset it against appropriate waste/carbon/energy credits. What wasn’t clear is whether the re-cycler has to keep the art, as continued proof of certification…

Clean Hydrogen Technologies

This is a project that produces hydrogen without using water, and by using less energy, and at less cost. Natural gas is a stop-gap solution for hydrogen production, and current solutions create too many carbon dioxide emissions, or they are energy hungry or they are too expensive. Instead, the process “extracts” hydrogen from natural gas – not by burning it, but using a patented catalyst to produce “turquoise” hydrogen, along with conductive carbon (which can be used to build batteries).

Handprint

With a tagline of “Grow with the Planet”, Handprint have an ambitious goal to turn 30% of the world’s land and oceans into natural reserves by 2030. They plan to achieve this by connecting companies to regeneration projects like planting mangrove swamps, and then divert part of their customer revenue towards funding of those projects. The founders believe that this combines company values with market credibility and customer engagement. Further, they claim that consumer transactions (at the point of purchase) in themselves generate regeneration actions (and repeat transactions).

Primary Ocean

The premise for this project is that seaweed is better at absorbing carbon dioxide than trees. And once harvested from the ocean, seaweed can be added to the soil as a natural fertiliser. In this way, giant kelp plants become offshore seaweed farms, and also contribute to decarbonising transportation (from the production of bio-fertiliser and bio-fuel). The combined effect is also carbon negative.

Aerial

Positioning their product as “Fitbit for carbon”, the founders want to remove the “guilt” associated with measuring, tracking and reducing our carbon footprint. The resulting data analytics (from enterprise customers as well as individual consumers) can help change behaviours. Initially launched as a solution for business (to track the carbon footprints of companies and their employees), the analysis is designed to not only track carbon emissions but also provide tips for footprint management and offset. Then there’s “Aerial for Crypto”, which seems to be a way for NFT creators (musicians, artists and designers) to “reduce the environmental impact of their work”.

SungreenH2

This project deploys nano technology to produce hydrogen via water electrolysis, but at a lower production cost by using low-cost and earth-abundant materials as electrolytes. Under this patented solution, the founders expect to reduce the cost of green hydrogen from #2 per kg to less than $1 per kg.

Carbon Asset Solutions

The task of soil carbon sequestration needs accurate measurement, and is currently uneconomic. This project has developed a patented digital system, using high-precision soil carbon measurement technology. By connecting this measurement process to advanced software, the team can offer instant tracking, and they are currently seeking ISO certification. Serving both the supply-side (via carbon farming) and the buy-side (financial institutions and carbon markets) they can support trading of carbon credits (with plans to use blockchain technology to track the credits?). Essentially “Carbon as a Service”, the founders believe their solution is also attractive to investors, who want access to reliable carbon credits (without necessarily having to be part of the supply chain). However, some regulatory hurdles remain, particularly licensing laws in respect of financial products and market places. But, it seems that the emerging voluntary carbon market could be one of the fastest-growing financial markets, so no doubt smart capital will find a way to overcome these regulatory barriers.

Teraloop

Finally, a project looking at renewables storage, still one of the major challenges to renewable energy, thanks to the cost and (in)efficiency of existing battery technology. This team is looking beyond their current kinetic storage technology, to achieve “rapid response power on demand”. This will have the the combined benefits of prolonged life on energy distribution assets (and therefore, greater ROI), electric vehicle fast-charge points, and a path towards scalable manufacturing and deployment.

 

Overall, each of these projects has a clear value proposition, although some are more developed or were better articulated than others. Also, it was evident that most of these startups are working in complementary technologies and solutions, such that the combination of two or more of these projects could create some significant development progress and enhanced decarbonization outcomes. It also felt that much of this work is being done in spite of (rather than thanks to) government policy and public sector efforts in this area. Let’s hope the founders manage to raise the capital they need to bring their solutions to a wider (and willing) audience.

Next week: How digital brands are advertising

End of Year Reflection

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As we reach the end of 2016, I can’t help thinking: “What just happened?“. It’s been a year of unexpected (and far from conclusive) electoral outcomes. Renewed Cold War hostilities threaten to break out on a weekly basis. Sectarian conflicts have created levels of mass-migration not seen since the end of WWII. Meanwhile, there have been more celebrity deaths than I can recall in a single year. (And a Scotsman is the #1 tennis player in the world.)

Old Father Time, Museum of London (Image: Chris Wild)

Old Father Time, Museum of London (Image: Chris Wild)

The Brexit and Trump poll results are being cited as either examples of the new populist/nationalist politics, or proof that our current democratic systems are highly flawed. Either way, they are indicative of a certain public mood: anger fueled by a sense of despair at not being able to deal with the rapid changes brought about by globalisation, multiculturalism, modernisation and the “open source” economy. Ironically, both the Brexit and Trump campaigns relied heavily on the global technologies of social media, 24-news cycles and internet-driven soundbites (plus they surely benefited at various times from fake news, false claims and belligerent rhetoric).

As I write, I am in the UK, which is heading for a mini winter of discontent (with high-profile strikes in the rail, mail and airline sectors). The last time I was here about two years ago, there was a general sense of public optimism; now, post-Brexit, it feels very subdued, even depressed. Whether this is a delayed response to the Brexit result, or uncertainty about the exit process itself, it’s hard to tell. While the governing Conservative party leadership is struggling to implement the outcome of a referendum that many of them did not want (or expect), the opposition Labour party (whose own leadership was highly ambivalent about the Brexit vote) is busily re-enacting the 1970’s and 1980’s….

Speaking of the 70’s and 80’s, the return to Cold War hostilities has felt like an inevitability for the past few years, and if it weren’t so serious it might be the suitable subject of a satire by Nikolai Gogol. While the primary fault lines are again between the USA and Russia, there are some complications and distractions, that don’t paint as clear a picture compared to the past: first, the relationships between the US President-elect and Russia confuse matters; second, the ideological war has shifted from capitalism vs communism, to liberalism vs autocracy; third, the role of “satellite” states is no longer to act as proxies in localised disputes – these supporting characters might now provide the trigger for all out hostilities between the super powers.

The ascendancy of this new nationalism (within the USA as much as in Russia) and the increased autocratic leadership on display in democratic, theocratic, oligarchic and totalitarian regimes alike is a renewed threat to enlightened liberalism and classical pluralism. Hence the significance of failing democratic institutions and political leadership in the west – the vacuum they leave behind is readily filled by the “certainty” of dictatorship and extremism. With China added to the mix via recent maritime events, plus ongoing strife in the Middle East, the potential flash point for a new Cold War conflict might be in the Spratly Islands as much as Syria, Ulaanbaatar as Ukraine, or Ankara as Aden.

On a (slightly) lighter note, the number of celebrity deaths reported in 2016 could be explained by demographics: artists who became famous during the explosion of popular culture in the 50’s, 60’s, 70’s and 80’s are simply getting old. In terms of dead pop stars, 2016 was book-ended by the deaths of David Bowie and Leonard Cohen. Both were experiencing something of a renaissance in their professional fortunes, and each left us with some of the most challenging but enduring work of their careers. Of their surviving contemporaries, some might argue that Neil Young and Bob Dylan continue to keep the musical flame alive, but for my money, Brian Eno and John Cale are the torch bearers for their generation.

In a satirical end of year review in The Times last weekend, the following words were “attributed” to Bowie (someone known to understand, if not define, the zeitgeist):

“Sorry to bail, guys. But I could see the way things were going.”

Next week: Content in Context is taking a break for the holidays. Peace and best wishes to all my readers. Normal service will resume on January 10.

The arts for art’s sake…

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Last week I wrote about the importance of learning coding skills. This prompted a response from one reader, advocating the teaching of STEM (science, technology, engineering and maths) in schools: “Coding and the STEM subjects are our gateway into the future.” I would agree. But, as other commentators have noted elsewhere, we also need to put the A (for art) into STEM to get STEAM to propel us forward….

Equivalent VIII (1966) Carl Andre (b.1935) Purchased 1972 http://www.tate.org.uk/art/work/T01534

Equivalent VIII (1966) Carl Andre (b.1935) Purchased by Tate Gallery in 1972 http://www.tate.org.uk/art/work/T01534

I recently attended a talk by renowned arts administrator Michael Lynch, as part of the FLAIR art event, where he expressed frustration at the state of the arts in Australia, the lack of a public arts policy, and the associated cuts to government funding. It can’t help that from John Howard onward, we have had a sequence of Prime Ministers who, while not total Philistines, have shown little enthusiasm, appetite or appreciation for the arts. And during Q&A, Mr Lynch referenced the conservative and “safe” nature of so much arts programming as evidenced by the lack of risk-taking and the stale and over-familiar choice of repertoire, although he did acknowledge some arts organisations were doing exciting work.

The debate then shifted to whether we need a new method to evaluate the benefits of a strong arts sector that is not purely dependent on economic terms or financial performance. It was not possible in the time available to come up with a suitable indicator, but I suggest we can derive a range of benefits from putting more emphasis on teaching, supporting and sponsoring the arts. This RoI might be measured in such terms as the following:

  • Enhancing creativity among students will benefit individual problem-solving skills and collective innovation;
  • A healthy arts scene is indicative of a balanced, self-assured and progressive society;
  • Participating in the arts can give people a sense of confidence and well-being;
  • Through art we can learn about culture, philosophy and history – especially of other societies;
  • Giving people the means to express themselves through art is an important outlet for their skills, talent and interests.

We agonize about the amount of investment in our Olympic athletes in pursuit of gold medals, and whether the money can be justified (goodness – Australia only just made the top 10!)  But no-one (yet) has suggested it’s not worth doing, even if we don’t win as many medals as is often predicted. And of course, together with the wider popular entertainment industry, professional sports attract more dollars, airtime and support through sponsorship, advertising, broadcasting rights, gambling revenue, club memberships and merchandise than the arts could ever hope to.

Part of the challenge lies in the popular notion that arts are either elitist, worthy, self-important, or simply frivolous – which makes it harder to build an economic case for the arts, but which can also lead to the worst kind of cultural cringe. Also, if the arts are really doing their job, they hold up a mirror to our society, and we may not like what we see. Populist politicians can’t afford to be associated or identified with such critiques – either as the targets or as de facto protagonists – so would they rather be seen shaking hands with gold medalists (or attending a Bruce Springsteen concert…) than maybe attending a cutting-edge performance by The Necks?

Next week: The latest installment of Startup Victoria pitch night

What the *%@#? Dave McClure vents his spleen…

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The final Lean Start Melbourne event of 2014 was a Q&A with Dave McClure, tech entrepreneur, early-stage investor and founder of 500 Startups. It was certainly an ear-opening experience, as Dave laced his comments with enough expletives to fund a small start-up (if only the organisers had thought to provide a swear jar…).

But while he was vociferous in his refusal to answer questions like “what’s hot?”, or “where’s the next big thing?”, he did provide some refreshing insights on how founders and investors need to adjust their expectations on funding and returns.

The event was hosted by inspire9, with sponsorship from BlueChilli, General Assembly, and Loud & Clear. Adrian Stone from Investors’ Organisation was acknowledged for helping to bring Dave to Australia, and Amanda Gome was the MC for the evening.

Dave’s investing model is basically a numbers game – identify a large enough pool of startup opportunities, place smaller “bets” on each one, in the expectation that only 10% will succeed, and of those, only 10% will be really successful, and very, very few will reach an IPO – but the spread of successful bets should each return between 5x and 20x. Whereas, some investors still try to “bet on unicorns”, in the expectation of a 20x-25x exit every time. Such opportunities will be increasingly unlikely, as the technology costs of production continue to decrease, therefore startups don’t require the same level or type of funding.

Based on current trends, Dave sees huge potential in video commerce, mobile video, and anything that monetizes search – e.g., influencing followers via social media, and converting this traction to sales driven by personalised recommendations. He’s also big on Spanish- and Arabic-speaking markets, and “anything that arbitrages sexism and racism” – hence his interest in women and minority entrepreneurs.

Dave’s advice is pretty simple: get the product, market and revenue model right, and then build scale into the business as quickly as possible. As such, he hates people asking him his opinion on their startup ideas (“what do I know?”); instead, he emphasises the need to get paying (and profitable) end users plus building scale through marketing as the true proof of concept.

Throughout the evening, Dave talked a lot about unit economics – not just production costs, but the real cost of customer acquisition, and time to convert leads to sales. It was also interesting that unlike some speakers at previous Lean Startup events, he was not particularly negative towards startups developing enterprise solutions – rather, he prefers to segment clients based upon their decision-making and purchasing limits. So, he looks at revenues based on the respective number of end users, SME customers and enterprise clients, because of their different price points and procurement methods, as well as the different customer acquisition costs.

Finally, he encouraged potential startups to think of the “most boring and mindless” business activities or processes, and figure out ways to make them more interesting via apps that use gamification and social media tools.