Why Is It So Easy to Select the Wrong Battery for Your Application?

Anyone who has spec’d in a battery for a new application knows that what sounds on the surface like a simple and straightforward task can get very complicated very quickly. Need a battery to supply a motor with 10 watts for 1 hour? Simple, select a 10 Watt-hour (10Wh) battery, right? The only problem is that, depending on the battery chemistry, a 10Wh battery may only be able to deliver 10 watts to the motor for about 40 minutes before it uses up its available capacity.  

Using batteries for high power applications only makes the situation worse. Why? Every battery has internal resistance, which you can imagine as a tiny light bulb inside the battery. All of the current that is delivered to the motor has to go through the light bulb first. At very low currents, the light barely shines at all, and most of the power is delivered to the motor. But at the high currents that are required by high power applications, the light shines brightly, using up the power that would otherwise have been delivered to the motor.

This reduction in power comes in the form of a lower voltage across the battery terminals. So, if your high power application requires 48V, you may have to use a battery pack rated at 60V. And that is only the beginning: you still need to limit the battery’s depth of discharge to a level that won’t cause damage to the battery, and you may want to limit it further in order to extend the battery’s cycle life. And the list of caveats and gotchas goes on from there.

To make matters worse, these complicating factors are different for different battery chemistries, so selecting a Li-ion battery for an application requires you to follow a totally different set of rules than you would follow to select a lead-acid battery for an application. I know that an incomplete understanding of these issues has led to poor choices when pairing batteries to applications, and I also believe it has led to missed opportunities for developers of new battery technologies whose solutions don’t align with rules of thumb typically applied by those in the industry. Most of those rules of thumb are based on lead-acid batteries, and they simply don’t apply to other chemistries.

VtM has addressed this challenge by developing an economic optimization model that pairs batteries to applications while taking into account the most important of these subtleties and complexities. The model is extremely useful for both creating a short list of battery options for a given application, and for identifying the best applications to pursue for a new battery technology. To learn more, please send an email to jay@venturetomarket.com.

Generic Go To Market Strategy: Startup Killer

Originally posted on the Rockies Venture Club Blog.  

A detailed, focused, and feasible go to market strategy is a critical distinguishing feature between the majority of startups that fail and the few that achieve great success.

As an example, imagine you are an angel investor listening to a pitch from a company developing an aftermarket add-on to improve automobile gas mileage. Its go-to-market strategy consists of identifying early adopters of efficient automobile technologies and targeting them at auto shows in environmentally conscious and heavily regulated states like California and Massachusetts. The company will sell products directly through its website while building relationships with aftermarket auto parts chains and independent retailers. The emphasis will be on young professionals, targeted through a massive web-based campaign to build awareness and drive adoption. Conversations with early customers will inform product improvements and enable the startup to refine its marketing pitch.

With a few minor changes, this generic and high level go-to-market strategy could apply to almost any technology in any market. As an angel investor, you’ve heard it many times before, and you’re skeptical: activities like “identifying and targeting early adopters”, “building awareness”, and “driving adoption” are easy to talk about but difficult to do well.

Now imagine you are an angel investor listening to another company that is at the same stage of development for an almost identical product. In this hypothetical example, the company tells you that it has identified automobile emissions reduction programs in three major US cities, with the largest in New York City (NYC).

NYC’s program offers attractive rebates for devices that reduce particulate emissions in cars. Although not the primary function of the startup’s device, the company was able to tweak its design slightly to take advantage of the little-known incentive. The company found a chain of aftermarket auto parts dealers in NYC that cater to environmentally conscious car owners, and it has engaged them in discussions about the product’s design and price point while exploring the potential for a distribution agreement. Additionally, a “green” NYC cab company is interested in advertising the product on the roofs of its cabs in exchange for discounts on the startups’ devices.

Based on the attractiveness of the market, the startup has decided to launch its product in NYC and quickly follow with launches in other major cities, starting with the other two that have automobile emissions reduction programs. It will use what it learns in NYC to refine its rollout in the other cities, which are already being planned to coincide with the ramping of the company’s manufacturing capabilities.

Which company would you have more confidence in as an investor? The second company is already doing all of the things the first company was only talking about: it has identified retail partners and early adopters, it has located the market where its offering has the lowest cost to consumers (thanks to the rebates), and it is focusing on a small geography where it can maximize the impact of every dollar spent on sales and marketing by taking advantage of network effects. It has a well-defined expansion plan linked to its manufacturing capabilities, so that it can grow at a fast but manageable pace. As a potential investor, even if you don’t agree with the plan, you know the company is thinking strategically and you have a starting point for suggesting changes.

Putting together a go-to-market strategy is easy, and every entrepreneur has one. Often it relies on the development of a product so great that it essentially sells itself: all the startup has to do is build it and let people know they can finally buy it. By the time entrepreneurs in this mode start thinking about the details of their go-to-market strategy, competitors may have already established themselves in the most attractive market segments and with the most valuable partners. This will make every future sale more difficult, because the startup is forced to pursue customers and partners less interested in its products. Additionally, if a pivot is necessary, entrepreneurs more focused on the technology than the market may not realize it until they have wasted major time and money. The final drawback of this approach is that savvy investors recognize its limitations, and that could make raising money difficult.

In an environment where the vast majority of startups fail, entrepreneurs with such a poorly defined go-to-market strategy are taking on a significant and unnecessary risk. How do you know when your strategy is detailed and focused enough? Ideally, you should be able to list the top 15-20 potential customers (for business to business startups) or the top 3-5 channel partners (for consumer focused startups) based on the features that distinguish your offering from the competition. You should be able to make a compelling argument about why these customers are more promising than those in other market segments, and you should be able to describe how you’re going to sell to them and how you will move beyond those initial customers to the broader market.

It takes time to figure out these details, so it is important to start early. It is much easier and faster to change an existing plan based on new information than to develop a plan from scratch at the last minute. With so many ways to fail, it would be a shame to let one so predictable kill your company.

1,000,000 New Reasons to Take Advantage of NREL’s Free Assistance for Cleantech Entrepreneurs

Originally posted on the Rockies Venture Club Blog

Since 2010 the National Renewable Energy Laboratory (NREL) has offered up to 40 hours of free assistance to U.S. based small businesses with fewer than 500 employees through its NREL Commercialization Assistance Program (NCAP). The Program is designed to “help emerging companies overcome technical barriers to commercializing clean energy technology”, and it does so by providing limited free access to NREL’s facilities and the technical expertise of its scientists. With the imminent opening of NREL’s new Energy Systems Integration Facility (ESIF), the scope of capabilities available to participants in NCAP and NREL’s other industry partnership programs is about to take a giant leap forward.

At its most basic level, ESIF is a collection of 15 laboratories covering everything from power systems integration, to electrical and thermal storage, to smart power, to materials characterization, to manufacturing, and more. You really have to see ESIF in person to fully appreciate the scale of the facility, and during my recent tour I was struck by the huge amount of space available for equipment testing and systems analysis. The only facility in the U.S. equipped with megawatt-scale (1,000,000 watts) test capabilities, the space is designed for large scale equipment and big experiments. The labs are interconnected with two AC and DC ring buses that allow experiments to expand beyond the walls of a single laboratory, and the facility has a SCADA system in place to monitor and control it all. Petascale computing at the on-site high performance computing data center and powerful data visualization tools round out the facility’s capabilities.

The best news is, these laboratories are not just for NREL’s scientists: NREL actively encourages partnerships with industry that provide access to the lab’s facilities and technical experts. If you are a cleantech entrepreneur and haven’t yet familiarized yourself with NREL’s capabilities and industry partnership programs, it’s time to do so. Colorado based startups would be particularly remiss if they didn’t explore NCAP, the free commercialization assistance program mentioned above. The idea is pretty simple: if you have a technical or market related challenge in an area where NREL has some expertise, and you have a project that requires 40 or less NREL labor-hours to complete, you may be able to get support for the project for free.

According to Niccolo Aieta with NREL’s Innovation and Entrepreneurship Center, about 40% of companies interested in an NCAP project actually undertake one. The other companies typically find that their challenges aren’t a great match for NREL’s capabilities, or they have an issue that is too large or complex to be resolved in 40 labor-hours. However, don’t rule out a project until you’ve spoken to Dr. Aieta about the details, even if you don’t see relevant capabilities on NREL’s website (which I’ve found a bit challenging to navigate). Also keep in mind that projects are limited by the amount of time NREL employees can spend working on them, not by equipment or lab time. So if you need to leave a piece of equipment in place to test for a few weeks, then want some quick help evaluating the results, you won’t be excluded automatically due to the long test time.
If NCAP doesn’t work for you, and you are able to pay for support, NREL also works with companies through technology services agreements (TSA) and cooperative research and development agreements (CRADA). These are flexible arrangements that are customized on a project by project basis, so the best approach is simply to contact NREL and start a discussion. One nice feature about these programs is that partners pay NREL’s costs with no markup, which helps keep out of pocket expenses in line.

Besides the obvious benefits of working with a local world-class laboratory, there are additional reasons to engage with NREL that may not be apparent at first glance. Venture investors are still skittish about cleantech, thanks to the industry’s capital intensive nature and the long, risky time to market for cleantech innovations (note the recent rebranding of the Cleantech Fellows Institute to the Energy Fellows Institute). Increased emphasis is being placed on the value that large, well-established energy equipment firms can bring as strategic investors in cleantech startups. Clearly, the more visibility a startup can get with these companies the better, and NREL’s laboratories are great places to rub elbows with their technical staffs. ESIF in particular, with its unique capabilities related to megawatt-scale equipment and grid-scale integration, will be a magnet for large energy equipment companies and should present great opportunities for small local companies to engage with them.

Yes, the cleantech industry is difficult, but that only increases the value of the deep technical and market expertise that entrepreneurs can find in Colorado. Investors and entrepreneurs alike should take notice as the state’s cleantech resources experience a major expansion when ESIF comes online.

 

Colorado Angels Have Unfair Advantage Investing in Cleantech

Originally posted on the Rockies Venture Club Blog

Colorado has a lot to offer cleantech entrepreneurs, from targeted grants, to easy access to NREL’s technology commercialization resources, to cleantech focused entrepreneurial programs at top research universities, to name just a few. There is no more supportive place in the country to launch a cleantech company, which gives local angels a distinct advantage when investing in this growing, and complex, industry. Colorado knows about investing in cleantech.

The only way the community could do more to support cleantech would be to scour the country for experienced, successful entrepreneurs, bring them to Colorado and immerse them in the local cleantech ecosystem, then provide guidance from industry experts as they develop business ideas around one of the numerous innovations emerging from local government labs and universities. Enter the Cleantech Fellows Institute, a Colorado Cleantech Industry Association (CCIA) program established to do exactly that. 

The Institute kicked off in 2012, with a class of 5 Fellows who had considerable entrepreneurial experience outside the cleantech industry. The Fellows knew how to start a business, but they didn’t know cleantech, so they spent 175 curriculum hours listening to 160 speakers, and took almost 30 cleantech related tours, to come up to speed. Each Fellow undertook a capstone project centered on a new cleantech business idea, and in the Institute’s inaugural year this exercise led to the creation of two seed-stage companies and one non-profit.

Under the direction of Executive Director Steve Berens, the Institute is now accepting applications for its second class of Fellows. This year the program is undergoing some changes based on lessons learned from the first class, including an expanded international component. The program will include a week during which delegates from around the world descend on Colorado to participate in the Institute’s activities and make connections between the cleantech communities in Colorado and their home countries.

Clearly, Colorado is putting a lot of effort into stacking the odds in favor of the Fellows and the cleantech companies they hope will emerge from the Institute. The VC community has taken notice, as evidenced by the 19 venture capital partners the program has brought on board to date. However, there is room for additional engagement from Colorado based angels, who have an advantage in their ability to participate throughout the process since the Institute is based in their own backyard. Interested angels can send an email to info@cleantechfellows.com to learn more and sign up for regular email updates.

Even with all of the support Fellows will receive through the Institute, cleantech remains one of the most challenging industries in which to start a new venture. The Cleantech Fellows Institute provides access to critical knowledge and a great support network, which will reduce risks in my opinion but it certainly doesn’t come close to eliminating them. The real determinant of the program’s ability to spawn successful cleantech startups is underway right now: the Fellows application process. The quality of the Fellows accepted into the program will have the greatest influence on how successful it is, and the ability of local angels to get to know the Fellows over the course of the program is an opportunity that should not be missed.

10-10-10 will Bring Big Problems to Denver

Originally posted on the Rockies Venture Club Blog

Entrepreneurs have a unique ability to see opportunity in the problems others face, and they are irresistibly drawn in by the desire to create, and sell, solutions to those problems. This is the guiding principle behind the upcoming 10-10-10 event in Denver, which will bring 10 would-be CEO’s to town for 10 days to brainstorm solutions to 10 big problems. The goal is not just to see if participants can come up with feasible solutions to the problems, but to go beyond that by turning one or more of those solutions into successful startups led by members of the group.

The brainchild of Denver entrepreneur and Vokl founder Tom Higley, the 10-10-10 is an experiment to see whether the creative genius that leads to startup success can be reproduced in a laboratory environment. Along the way, the event will highlight the positive business climate and culture of the Denver area, which was already given a boost recently when the SBE Council named Colorado one of the 10 most entrepreneur-friendly states.

The 10-10-10 is not a business plan competition; instead, it is about collaborative business plan creation. When CEO level entrepreneurs apply to participate, they will identify a problem they’d like to discuss with the other participants. They won’t suggest a solution in their applications; those suggestions will come during of a 10-day working session in Denver during which all 10 participants work on all 10 problems. If a feasible path to a solution emerges for one or more of the problems, it will be developed into a business plan.

The focus will be on big problems, as bigger problems lead to bigger opportunities. Since a primary goal for this exercise is to start one or more profitable businesses, applicants will need to provide proof that large companies or groups of consumers are willing to pay for a solution to the problem the applicant describes. That means charity projects are out (sorry Jimmy Carter, but if all goes well the participants will be in touch after their exits).

So, will it work? Like any experiment, or any startup for that matter, 10-10-10 has its risks. 10 days is not a long time to come up with a solution to a major problem, and participants won’t have much of an opportunity to gather additional information to flush out the details of their proposed solutions. Lots of problems seem easy to solve until you look at the details; hence the ubiquitous pivot.

However, there is something to be said for taking a step back, putting your head together with a group of smart people with access to capital, and looking for good opportunities that others have missed (I refuse to use the term “low hanging fruit”). How many times have you asked yourself, “why didn’t I think of that?” after you see someone strike it rich for rebranding off-the-shelf paint as liquid paper or repurposing a small box as a humane mouse-trap? There are so many solvable problems out there that I think a group of successful entrepreneurs with resources should be embarrassed if they don’t knock a few off and make a bundle in the process. Just don’t forget Jimmy on your way home from the bank.

Swift Tram Wants to Get You High

Originally posted on Rockies Venture Club Blog

Recently declared the third most investable startup at the 2013 Angel Capital Summit, Boulder based Swift Tram wants to revolutionize public transportation by taking it high above the streets. The company envisions riders zipping along in suspended coaches 20 feet off the ground, gliding unimpeded over traffic jams, accidents, and icy roads to reach their destinations quickly and predictably. And, perhaps best of all, Swift Tram expects construction of its routes to cost less and take less time than adding light rail or bus lanes to existing travel routes.

With such an attractive set of benefits, observers could be excused for wondering why no one has gone down this road before. In fact, they have: a suspended coach system (also called a suspended monorail) built in Wuppertal, Germany in 1901 is still running today. More recently, Siemens completed one in 2003, and Aerobus is supposedly building one in Weihai, China, but its current status is unclear. However, despite these examples and a number of others not listed, suspended coaches have played a very minor role in public transportation to date.

What makes Swift Tram different? According to Founder and CEO Carl Lawrence, it’s the cumulative effect of many recent technological advancements all incorporated into a new, modern design. Swift Tram has filed two provisional patents covering advancements intended to, among other things, improve the speed, efficiency and reliability of suspended coach systems while reducing operating costs. Understanding the company’s innovations first requires a general explanation of their new approach to an old method of transportation.

The Swift Tram system consists of coaches suspended beneath large tubular guideways that are supported by regularly spaced towers. Drive bogies travel through the inside of the hollow guideways and connect to the passenger carrying coaches beneath them through a channel that cuts through the bottom of the guideways. The bogies are the true heart of the system: they contain motors powered by electricity delivered through the guideways, and house the intelligence that enables the fully automated system.

The bogies will be designed to carry the coaches at average speeds of 45 to 75 mph, and will be fully automated, so no driver will be required in the coaches. The ability to operate without drivers is key to the operational efficiencies Swift Tram is counting on to make its approach economical. Not only does it allow the company to save the labor costs associated with drivers, but it significantly reduces the overhead associated with running smaller, more frequent coaches. By running coaches more frequently Swift Tram would reduce wait times for passengers, leading to happier passengers and, ideally, increased ridership.

Efficiency gains in the bogies would come from incremental improvements over historical designs, such as the use of regenerative braking and smaller, more efficient motors. At the system level, smaller motors would enable smaller bogies and smaller guideways, cutting construction and material costs. Swift Tram plans to pursue additional system level efficiencies by designing smart bogies that can coordinate their activities to minimize power draw system wide. In addition to using less electricity than traditional suspended coach drive mechanisms, they also would reduce the size of the electric grid required to support the system, again cutting construction and material costs.

By incorporating these and other design improvements drawn from recent developments in the smart grid, electric vehicle, and related industries, Swift Tram hopes to pull together a system that overcomes the challenges that have slowed widespread adoption of suspended coaches to date.

Currently, Swift Tram is focused on establishing the partnerships it will need to realize its vision. The company plans to manufacture the drive bogies, outfit the coaches, and develop the software for the control centers in-house, while manufacturing and construction of other system components will be outsourced. An in-house prototype of the bogie is under development, and Swift is raising a $1M seed round to support the engineering design of the total system. The company anticipates raising a couple of additional rounds to support prototyping, testing, and manufacturing before it sees initial revenue in 2016.

If Swift Tram is successful in helping public transportation rise above the fray, the ramifications could be significant. Metropolitan areas all over the world suffer from severe traffic congestion, and a cost effective solution that reduces travel time without adding to the ground-level footprint of transportation infrastructure has a lot of appeal. The array of approaches to suspended coaches that have come and gone without catching on provide a testament to the challenges Swift Tram faces, but if the company overcomes them it should find lots of riders who have been waiting for a better transportation option. Waiting in traffic jams, waiting for trains that aren’t scheduled to arrive for another 30 minutes, and waiting for buses that should have arrived 10 minutes ago.