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Dr. Gelvin Stevenson 1
Bio-Energy In New Jersey
October 23, 2007
Gelvin Stevenson, [email protected]
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Dr. Gelvin Stevenson 2
Lessons from Five Years ofListening
Center for Economic & Environmental
Partnership, Inc. (CEEP)
NY Energy & Environmental Funders breakfasts
(58companies)monthly2nd Friday
DC Energy & Environmental Funders breakfasts (26)
monthly1st Friday
National Hydrogen Financing Forum (28)annual 2004-2006
Plus follow up interviews
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Dr. Gelvin Stevenson 3
What You Need to Succeed
Big Earslisten to your market Small Egossee and admit your
mistakes
Lots of Confidencecontinually re-examine yourstrategy, but never
give up
Fast Feetbe nimble; make adjustments quickly Rich Unclesor rich
spouses or a big bank
account
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Dr. Gelvin Stevenson 4
OVERVIEW
Funds Markets
Technologies
Strategies
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Dr. Gelvin Stevenson 5
FUNDSBefore anything can be done, it must
first be financed.Prof. Hyman Minsky
IF everything always takes longer thanplanned, THEN you will
always needmore money than you thought.
Best solution: be independently wealth.
Second best: marry someone who is.
Third best: raise plenty of capital. (Butdont be desperate.)
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Dr. Gelvin Stevenson 6
Funds II
Lack of funds can hurt. No one wanted to fund R&D, so we had
a (lab scale) bench model, but never
had a working prototype. That reduced the interest people had in
thetechnology. (That companys assets were eventually sold to
another company.)
Even so, dont be desperate for funds. We were right not to
accept money offered at egregious valuationsthat wouldhave required
us to give up control.
We refused performance warrants. They arent worth the risk. An
interesting model for getting paid: Client companies or
organizations pay
consulting fees. Entrepreneur then raises the project money and
repays theclient company for the consulting fees.
Remember: larger investments are sometimes easier toraise than
smaller ones. After all, investors have to do almost the same due
diligence on a small deal as
a large one.
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Markets
Not understanding your markets is a
recipe for disaster.People I thought would be interested,
werent. We didnt understand their needs.
Potential customers are cynical; many have
gotten burned.
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Markets II You must constantly learn about your markets
and change with them.
One company stopped trying to generate newbusiness in the US and
is concentrating on the UKbecause its primed by Kyoto & EU
regulations.
We did not understand the market. People I thoughtwould be
interested, werent.
Entrepreneurs who preach to their markets neverconvert anyone.
(You should turn and run wheneversomeone says: The market should or
The marketwill You dont convince markets; you earncustomers, one by
one.
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Markets III
The CEO wouldnt heed anyones adviceabout which markets to
pursue. He had alaser vision of his dream and ignored near-term
applications that could have generatedbusiness and funds. That
company is now
bankrupt.
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Technology
If commercializing technology were easy,everyone would do
it.
We spent too much time fussing about ourtechnology when there
were already other devicesthat could do what we needed.
We were too focused on the product rather than theproject.
We underestimated the scaling problem, i.e. thedifficulty
getting from the a lab model to a prototypeto a commercial
prototype to a commercial unit.
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Technology IIThe company and inventor had different
visions of the product.
Think about how you solve problems
We didnt see that the problems wererelated; we didnt look at the
patterns offailures.
Many companies make improvementssequentially; not in parallel.
(Guess what:parallel is faster.)
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Strategy
Stay focused.
Get the first one done. Dont divert your attention to other
opportunities that comes your way.
Do your financial forecasts and planning.
Work hard to get costs out of thesystem. Costs do NOT drop
AUTOMATICALLY.
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And Good Luck!
(A little of that doesnt hurt, either.)
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Additional notes added later
Funds: My company didnt raise all themoney we could from the
public sector.
We thought too small. We should haveraised more money at the
beginning.
