Clean energy technology is now disruptive to existing energy markets. The price of cleantech is plunging, and will continue to plunge, following a pattern familiar to those working with digital tech. The more scale they achieve, the cheaper they'll become, as the industry plows funds back into explicit R&D and learns lessons through execution.
These disruptive technologies are now almost certain to power a multi-trillion dollar transition of the energy system away from fossil fuels. Yet investing in them is tricky. How do you invest in startups in an area where prices keep plunging?
I look for investments that have one or more of the following:
1. Network effects or business model innovations that generate high value.
2. The application of software, IoT, and other digital tech to clean energy.
3. Unique, game-changing IP that's hard to compete with.
4. Extremely scalable, capital-efficient business models.
In my role as co-chair of the Energy & Environment program at Singularity University, and through my five books and widely read blog posts on energy technology, I see a great many startups doing innovative things in the cleantech space. It's from that pool that I select potential investments.
I'll syndicate all deals in which I'm able to obtain a significant allocation for my syndicate.