1 00:00:00,000 --> 00:00:07,560 Well, hi everybody, welcome to daily source code episode number 522, still coming to you 2 00:00:07,560 --> 00:00:14,200 from the box laden curry cottage, soon to be the formerly the former kind, I got to come 3 00:00:14,200 --> 00:00:18,200 up with that sentence, soon to be our ex-coated, let's put it that way, it's Sunday 4 00:00:18,200 --> 00:00:19,200 afternoon. 5 00:00:19,200 --> 00:00:25,480 And oh, by the way, I'm calling this episode 522, I realized I made kind of a rookie mistake. 6 00:00:25,480 --> 00:00:29,920 And you changed the nomenclature of your podcast. 7 00:00:29,920 --> 00:00:34,000 So I, instead of doing the episode number and DSE in the date sequence, I was putting 8 00:00:34,000 --> 00:00:39,760 a BOC in the BOC number in there, that really messes up a lot of different players, who 9 00:00:39,760 --> 00:00:43,080 do list shows and alphabetical order. 10 00:00:43,080 --> 00:00:48,400 And so I'm just going to turn it back to the episode numbering that I've been using. 11 00:00:48,400 --> 00:00:52,800 Also, since I am putting original content, even in the best of Charlie's, I guess they 12 00:00:52,800 --> 00:00:57,160 kind of qualify as a regular daily source code. 13 00:00:57,160 --> 00:01:01,440 So part of the advantage of moving house, and as you know, we're in the middle of that, 14 00:01:01,440 --> 00:01:04,440 we have the new house, we're slowly building stuff up. 15 00:01:04,440 --> 00:01:09,280 You, of course, you start with the curtains, I've learned that over the years, after painting 16 00:01:09,280 --> 00:01:15,480 the kitchen, you know, then you kind of start to move over the glassware and you want 17 00:01:15,480 --> 00:01:17,000 to do most of that stuff yourself. 18 00:01:17,000 --> 00:01:20,200 And then by Wednesday, the movers are coming and all the heavy lifting is going to be 19 00:01:20,200 --> 00:01:23,800 done, but they're still going to keep the podcast console here until Thursday. 20 00:01:23,800 --> 00:01:27,000 And when they bring that over, then of course, will officially have been moved into the 21 00:01:27,000 --> 00:01:30,480 new dwelling, the new cottage. 22 00:01:30,480 --> 00:01:36,400 So as I go through draws and draws of stuff, which, of course, is stuff, if it's your 23 00:01:36,400 --> 00:01:38,120 stuff, it's shit. 24 00:01:38,120 --> 00:01:40,280 My shit is my stuff. 25 00:01:40,280 --> 00:01:45,160 Now, looking at gadgets and basically making evaluations, whether I should throw something 26 00:01:45,160 --> 00:01:51,200 out, put together big box of stuff to sell on eBay, or, of course, save it. 27 00:01:51,200 --> 00:01:55,480 And a lot of the stuff, as you can imagine, still winds up in the to be saved pile. 28 00:01:55,480 --> 00:02:05,440 So to my power book, G4, which you know, I, excuse me, I switched over to Windows platform 29 00:02:05,440 --> 00:02:10,400 after my third power book in as many years, bit the dust, and it had to be sent off 30 00:02:10,400 --> 00:02:11,400 to Apple. 31 00:02:11,400 --> 00:02:16,160 Several months for it to be returned, probably almost three months, and it came back 32 00:02:16,160 --> 00:02:20,880 and the battery was to hose, so I had never really got back to using it, but I, I cracked 33 00:02:20,880 --> 00:02:27,000 it open today in my evaluation process and realized that in garage band was the, about 34 00:02:27,000 --> 00:02:34,000 8% complete edit of a podcast I did in interview with Ray Lane and John Doer and Bill 35 00:02:34,000 --> 00:02:40,200 Joy from cleaner Perkins, the world renowned investment firm, Bill Joy, of course, known 36 00:02:40,200 --> 00:02:47,200 for founding, a co-founding son Microsystems, Ray Lane known for a number of backgrounds, 37 00:02:47,200 --> 00:02:52,840 including, of course, the, being president of Oracle Corporation and John Doer, one of the 38 00:02:52,840 --> 00:02:56,000 most famous venture capitalists in the business. 39 00:02:56,000 --> 00:03:00,640 And at the time, and I'm not quite sure of the date, because the date stamps are all over 40 00:03:00,640 --> 00:03:01,640 the place in Garage Band. 41 00:03:01,640 --> 00:03:04,200 I can't really figure out when it was recorded. 42 00:03:04,200 --> 00:03:09,640 It was done via Skype and, and a phone bridge, it was in the summer, because I do 43 00:03:09,640 --> 00:03:13,320 remember recording it and being very hot and actually during the interview, I was taking 44 00:03:13,320 --> 00:03:17,640 off my shirts down there in my wife, Peter, while the conversation was going on, but it 45 00:03:17,640 --> 00:03:26,920 was timed with the release of an announcement by Cliner Perkins that they had made a fund, 46 00:03:26,920 --> 00:03:29,120 which was available for $100 million. 47 00:03:29,120 --> 00:03:34,560 By now, I believe that has been doubled to $200 million, called the green tech fund. 48 00:03:34,560 --> 00:03:40,080 And that means that this money is going to be invested in, quote, green technologies. 49 00:03:40,080 --> 00:03:45,600 Now, of course, I was, at the time, I was very into Trinity, biodiesel, and I wanted to 50 00:03:45,600 --> 00:03:49,600 know a lot more about what these guys who, without a doubt, are gentlemen who can make 51 00:03:49,600 --> 00:03:54,640 the earth move and have done so in the past, their big players, in big money and make 52 00:03:54,640 --> 00:03:57,520 a lot of things happen. 53 00:03:57,520 --> 00:04:02,600 How they were going to approach, filling out this, spending this money essentially, 54 00:04:02,680 --> 00:04:08,440 what they were going to spend it on and what they see as the trends and clearly global warming 55 00:04:08,440 --> 00:04:15,240 and the price of oil and or even the availability of oil are making these initiatives 56 00:04:15,240 --> 00:04:16,840 very, very important. 57 00:04:16,840 --> 00:04:24,040 Now, what you'll learn, as you listen to this interview, which, by the way, I was not paid to 58 00:04:24,040 --> 00:04:29,480 do, it was at my request, it will sound a bit like a commercial for Cliner Perkins, 59 00:04:29,560 --> 00:04:33,800 but not in the way you might expect, if you listen all the way to the end, it's just shy 60 00:04:33,800 --> 00:04:40,360 of 29 minutes, but it really gives an interesting insight into how Cliner Perkins, at least, 61 00:04:40,360 --> 00:04:46,440 is venture capital firm operates and what they're looking in and even how you can approach them. 62 00:04:48,440 --> 00:04:54,440 Of course, I have to disclose that Cliner Perkins is an investor in Pod Show, but as you 63 00:04:54,440 --> 00:05:00,200 listen to it, I think it'll become clear that there's no real benefit to me doing this other than 64 00:05:00,200 --> 00:05:06,680 keeping the relationship going with these guys, which I value immensely, but listen to how they 65 00:05:06,680 --> 00:05:12,840 approach problems, how they approach companies ideas, and how they approach the world, I think 66 00:05:12,840 --> 00:05:18,840 you, I think you'll get a kick out of it. So, oh yeah, I even did the whole corporate intro thing 67 00:05:18,840 --> 00:05:23,000 just to make it sound really cool, like big brewing voice here, ladies and gentlemen, 68 00:05:23,800 --> 00:05:29,720 Ray Lane, John Dore, Bill Joy of Cliner Perkins about the Green Tech Fund on the Charney. 69 00:05:35,320 --> 00:05:40,200 Maybe, I don't know who wants to, you know, who wants to kind of get it going, but 70 00:05:41,400 --> 00:05:47,640 the most logical place to start, I feel, is with the announcement of the the most recent fund, 71 00:05:47,640 --> 00:05:52,920 which is fund number 12, I believe, and then we can, I don't know, John, or Ray, if you want to 72 00:05:52,920 --> 00:05:58,120 pick that up and just explain exactly, you know, what this 100 million Green Tech initiative is, 73 00:05:58,120 --> 00:05:59,720 and then we can kind of take it from there. 74 00:06:00,920 --> 00:06:07,080 Glad you asked, Cliner Perkins, Prof. Bill Dan Buyers, is in the relationship and venture 75 00:06:07,080 --> 00:06:12,360 capital business, which means we're helping entrepreneurs, innovators, scientists, doctors, 76 00:06:13,320 --> 00:06:17,640 those who want to do more than anyone, things possible with less than anything, 77 00:06:17,640 --> 00:06:22,040 less than anyone, things possible, literally to go out and change the world to 78 00:06:22,840 --> 00:06:33,240 realize of dreams and their ambitions. And we've been doing this now since 1972, and so the latest 79 00:06:33,240 --> 00:06:38,600 of our funds, our venture capital funds, Cliner Perkins, Coffield and Buyers number 12, 80 00:06:39,080 --> 00:06:46,600 really the first in which we have earmarked money for a very important and exciting area, namely 81 00:06:46,600 --> 00:06:55,400 that of what we call green technologies, ways to address some of the largest needs and economic 82 00:06:55,400 --> 00:07:03,080 opportunity on the planet. It seems like the venture capital business is, if anything really a business 83 00:07:03,080 --> 00:07:09,160 of timing and understanding of timing. So when I read an announcement like this and certainly a 84 00:07:09,160 --> 00:07:13,560 dollar figure of $100 million, which 100 million of anything is quite impressive, 85 00:07:14,360 --> 00:07:21,560 is it now time has the, have alternative fuels and biotechnology's finally reached the tipping 86 00:07:21,560 --> 00:07:26,360 point where this is really a forge ahead, a leapfrog, if you will? 87 00:07:27,080 --> 00:07:34,920 Well, it's quite clear there's a market need in $60 a barrel oil, it speaks of large and expensive 88 00:07:34,920 --> 00:07:42,920 volumes, but there's also important technological advances and I think Ray Lane, my partners on 89 00:07:42,920 --> 00:07:48,200 this conversation with us, as is Bill Joy, and I think Bill would be particularly good at speaking 90 00:07:48,200 --> 00:07:53,800 to those. Before Bill does that, sorry, Bill, let me just kind of add to what John said about 91 00:07:54,360 --> 00:08:01,240 it before we go into the technology. You know, the venture business is one where its success is 92 00:08:01,240 --> 00:08:10,600 driven by seeing trends, seeing paths before other see them because of technological developments. 93 00:08:11,160 --> 00:08:19,640 And so this focus on green tech is similar to other trends we've seen in the past, 94 00:08:19,720 --> 00:08:24,520 such as the internet or the semiconductor industry or the enterprise software industry and 95 00:08:24,520 --> 00:08:30,040 the development of various trends within it. And this is a major initiative as most of our funds have 96 00:08:30,040 --> 00:08:35,960 been have been focused on major initiatives that we develop a perspective around 97 00:08:35,960 --> 00:08:42,840 developed deep expertise on so that we can make smart investments in. And we think the timing is such 98 00:08:42,840 --> 00:08:49,560 that the technology is at a point, you know, most technological developments over the last several 99 00:08:49,560 --> 00:08:56,760 hundred years have gone through a predictable shape or curve where early adopters, you know, 100 00:08:56,760 --> 00:09:03,480 we can actually see where the cost per unit of output, no matter what it is, whether it is 101 00:09:04,040 --> 00:09:13,160 more law in the computer business or its metcast law or other laws in the networking business, 102 00:09:13,160 --> 00:09:20,440 but various or go back a hundred years and and look at the amount of output and factories 103 00:09:20,440 --> 00:09:26,760 and different core methodologies. But when we can see the shape of that curve before it has been 104 00:09:26,760 --> 00:09:33,560 adopted and we can see the productivity will be an order of magnitude better than its predecessor 105 00:09:33,560 --> 00:09:39,800 technology. And we think that is the right time to focus on it. And we can certainly see that 106 00:09:40,200 --> 00:09:43,720 in the green tech initiative now. Bill, do you want to add to that? 107 00:09:44,440 --> 00:09:52,600 Basically green tech involves consumption and production of resources and whether electricity or 108 00:09:53,080 --> 00:10:01,240 or water or food and this largely involves chemistry, I mean electric chemistry and batteries, 109 00:10:01,240 --> 00:10:08,520 this chemical reaction or making making clean water from dirty water is to separate molecules. 110 00:10:08,520 --> 00:10:15,160 And what's happened is that advanced technology has reached the point now where we can begin to 111 00:10:15,160 --> 00:10:20,200 change and design things at the scales to do better than we could with the kind of crude chemistry 112 00:10:20,200 --> 00:10:26,760 we did in the past. So we can genetically engineer organisms to clean things up or we can 113 00:10:26,760 --> 00:10:33,000 engineer new materials to make resource-oriented processes more efficient. So we suddenly have the 114 00:10:33,000 --> 00:10:38,440 opportunity to make the kind of large factor improvements that will make a real change in the world. 115 00:10:38,520 --> 00:10:44,440 And these industries that have been frozen out of very slow rate of advance are to no rate of 116 00:10:44,440 --> 00:10:52,520 advance for a very long time. The announcement of the investments you want to make came 117 00:10:53,320 --> 00:11:00,760 very close to the to the state of the union with President Bush. I presume it started to hit 118 00:11:00,760 --> 00:11:09,640 hard on his own legacy but really laid in about the U.S.'s addiction to oils, particularly foreign oil. 119 00:11:09,640 --> 00:11:14,040 Is that something that you knew was coming? Is that purely coincidence? Is it all just things 120 00:11:14,040 --> 00:11:22,680 coming together at the right time? Is it for real? Is the government on the same pages as you are? 121 00:11:22,680 --> 00:11:26,360 Well, I think the amount of money that the government is investing in the series 122 00:11:26,360 --> 00:11:33,880 is not up to the challenge and hope that it increases. We certainly come at this from 123 00:11:33,880 --> 00:11:40,040 separate paths but whether you're looking at this glasses half empty or half full, I think you 124 00:11:40,040 --> 00:11:47,240 have to say that until this point in time we've been as a country and as a state as a world in 125 00:11:47,240 --> 00:11:55,640 trouble with respect to energy innovation. And as we look around whether it's with the initiatives 126 00:11:55,640 --> 00:12:02,520 that Governor Schwarzenegger has launched in California or President Bush for the United States, 127 00:12:02,520 --> 00:12:11,240 being green, embracing green, sustainable technologies is without a doubt the most tough-minded 128 00:12:11,240 --> 00:12:18,680 and geostrategic and pro-growth and Tom Friedman would say even patriotic thing that can be done. 129 00:12:18,760 --> 00:12:24,120 It used to be that being green were the things Sissis would do the sort of hugging 130 00:12:25,160 --> 00:12:29,800 liberals, but the government, the frog would disagree with that. And Tom Friedman would disagree, 131 00:12:29,800 --> 00:12:39,240 but all of a sudden to find a way to win the world from $60 a barrel oil that's going to 132 00:12:40,760 --> 00:12:48,600 fuel radical Islamic regimes in the Middle East and is more than a matter of smart economic 133 00:12:49,480 --> 00:12:59,880 it's a matter of worldwide stability and sustainability. All the experts now agree that 134 00:13:00,680 --> 00:13:07,720 there is a serious climate crisis underway in the form of global warming. And so we need real 135 00:13:07,720 --> 00:13:14,840 innovation and incentives for innovations in renewable energy, wind, solar, biofuels, 136 00:13:15,720 --> 00:13:24,280 clean water, clean transportation, increased conservation. And we've seen European nations because 137 00:13:24,280 --> 00:13:29,640 of their higher energy prices take the lead in this regard, but the largest consumer both in 138 00:13:29,640 --> 00:13:35,880 an absolute sense in per capita is the United States of America here in North America. And historically 139 00:13:35,880 --> 00:13:41,480 America has been one of the world's great innovators. So I think the way to look at this green 140 00:13:41,480 --> 00:13:46,760 glass half full is that it's a great area for entrepreneurs and innovators to go make a difference. 141 00:13:46,760 --> 00:13:52,760 And I think the big difference now versus 20 years ago because we're certainly a lot of venture 142 00:13:52,760 --> 00:13:57,960 capital sloshing around 20 years ago and 10 years ago. The difference now is that we can see 143 00:13:58,760 --> 00:14:07,800 a cheaper cleaner, better ways to provide energy. And so we know as I said the beginning of this 144 00:14:07,960 --> 00:14:15,400 podcast, we know the shape of these curves and economic curves. And once we know the shape 145 00:14:15,400 --> 00:14:19,880 and we know that there's going to be an order of magnitude improvement, then that's the time to 146 00:14:19,880 --> 00:14:24,520 push the go button. That's the time to start investing in these entrepreneurs. We're not afraid 147 00:14:24,520 --> 00:14:28,280 of the things that are technically difficult. People come out all the time with business funds. We have 148 00:14:28,280 --> 00:14:33,160 trouble understanding. We look in the encyclopedia. We look in the textbook. They've got some new 149 00:14:33,160 --> 00:14:36,600 science. They've got some new technology. They're doing something in a different way than it's been 150 00:14:36,600 --> 00:14:41,960 done before. It challenges existing order. Sometimes it challenges the limits of our understanding. 151 00:14:41,960 --> 00:14:45,720 We're not afraid of that. It doesn't mean we're not going to vet it. We're going to get experts to 152 00:14:45,720 --> 00:14:51,000 come in. We need to have credibility in the new idea. But the fact that it's hard and the fact that 153 00:14:51,000 --> 00:14:54,840 it hasn't been done before is often the thing that feels the big opportunity to solve these big 154 00:14:54,840 --> 00:14:59,240 problems. And so we thrive on that. Those are the kind of business plans we want to see the big 155 00:14:59,240 --> 00:15:03,400 change the world kind of plans. But I think we're sitting on standstill road for many years and you're 156 00:15:03,400 --> 00:15:07,800 seeing this dot com and that dot com and this semiconductor company. That's the semiconductor company. 157 00:15:07,800 --> 00:15:11,800 And all of a sudden you started to see, I have a new way of cleaning water. I have a new way of 158 00:15:11,800 --> 00:15:18,520 remediating this waste. I have a new way of taking a fuel cell and making energy much more efficiently 159 00:15:18,520 --> 00:15:24,200 and cleanly. And we suddenly start to see, not just one, but a drum beat of these kinds of 160 00:15:24,200 --> 00:15:29,000 innovations coming along. You realize the game's a foot. It's not just because there's a need. 161 00:15:29,080 --> 00:15:34,440 It's because technology is providing an opportunity to do transformative businesses like 162 00:15:34,440 --> 00:15:39,400 Netscape and Amazon and Google and to Nentech and Lotus and Compact. We're in their time 163 00:15:40,760 --> 00:15:45,720 for their problem. This is a new time in a new problem. And these businesses are going to happen 164 00:15:45,720 --> 00:15:50,680 now because the technology end the need are coming together at the same time. We're very fortunate that 165 00:15:50,680 --> 00:15:56,120 that's true. How do you even contemplate doing diligence on all these opportunities? 166 00:15:56,120 --> 00:16:00,760 You know, what kind of resources do you need to bring in to find out what has potential? 167 00:16:00,760 --> 00:16:07,800 Well, we'd like to be involved in a industry at its very beginning. It's always better to back the 168 00:16:07,800 --> 00:16:14,760 number one or number two player than the 10th or 11th. And so the partnership since the beginning 169 00:16:14,760 --> 00:16:21,960 of the biotechnology industry, the distributed affordable, the personal computing industry, 170 00:16:21,960 --> 00:16:31,640 the internet industries, networking industries has drawn on our ability to help entrepreneurs 171 00:16:31,640 --> 00:16:39,960 with really terrific relevant operating and technical experience. As well as a strong and powerful 172 00:16:39,960 --> 00:16:48,280 network of forward thinkers, scientists, consultants, and we're bringing that same network. That's 173 00:16:48,440 --> 00:16:54,600 the same resources to bear in helping today's energy entrepreneurs. You know, innovation and 174 00:16:54,600 --> 00:17:00,600 the energy industry we were marked earlier has been an option more on. There just has not been any 175 00:17:00,600 --> 00:17:10,440 and all of a sudden because of advances in materials, in chemistry, in process. We can borrow from 176 00:17:10,600 --> 00:17:17,880 many different fields, be they, high volume manufacturing, buttering, and depositions to make 177 00:17:17,880 --> 00:17:26,040 possible innovations in energy innovations and transportation in the storage of really electrons 178 00:17:26,040 --> 00:17:32,200 and the transformation of atoms. And we're moving, as I like to say, from a world that merely bits 179 00:17:32,200 --> 00:17:39,160 and bytes to one of atoms and molecules controlled by the bits and bytes and the market for energy 180 00:17:39,160 --> 00:17:46,120 is the largest of all those. We come back to a question you asked about how we actually do this 181 00:17:46,840 --> 00:17:51,640 and what's important. John started out by answering, I think your first question about 182 00:17:51,640 --> 00:18:00,040 those being in the relationship and venture capital business, maintaining a network of experts 183 00:18:00,040 --> 00:18:06,360 to deliver service to these entrepreneurs is our business. And you know, I would say that we 184 00:18:07,240 --> 00:18:13,320 our partnership maintains a balance of technical depth and business skills, business and 185 00:18:13,320 --> 00:18:18,360 economic skills so that we can balance the two of those. What are the right technological 186 00:18:18,360 --> 00:18:26,920 bets, where the right economic bets that will both produce the best outcome in terms of technology 187 00:18:26,920 --> 00:18:35,560 for society and also for a return on our investment. And then below that, you know, throughout 188 00:18:35,560 --> 00:18:42,120 this network that we maintain, we have deep deep technical expertise and entrepreneurs that we 189 00:18:42,120 --> 00:18:49,560 hope are passionate in their falling in love with the technologies that they produce. 190 00:18:50,200 --> 00:18:54,360 We can't afford to totally fall in love with these, we've got to balance them in some way. 191 00:18:54,360 --> 00:19:00,280 But we want to make sure this network delivers deep deep technical expertise and knowledge 192 00:19:00,360 --> 00:19:05,640 about what we're about to invest in. You know, Ray, you mentioned something about 20 years ago 193 00:19:05,640 --> 00:19:11,960 when there was a lot of the money floating around for alternative energy technologies. 194 00:19:11,960 --> 00:19:17,080 In fact, I believe California, particular was probably the leader in solar energy in the 195 00:19:17,080 --> 00:19:25,560 70s, also fueled coincidentally by a fuel crunch. And now the United States probably accounts for 196 00:19:25,640 --> 00:19:31,400 less than 20% of those leading technologies. Where do you see the real pockets of innovation 197 00:19:31,400 --> 00:19:38,360 taking place and maybe more specifically, is it solar, is it wind, is it biofuels, all of the above? 198 00:19:38,360 --> 00:19:44,360 I think it's a lot going on in all of those. Bill may want to take a couple of them and just, 199 00:19:44,360 --> 00:19:48,760 you know, paint a picture of what's going on, what we see is different today than in the past. 200 00:19:48,760 --> 00:19:55,240 But we are seeing innovation in all of those fields. So we have to assess all of them 201 00:19:55,240 --> 00:19:59,400 in parallel and try to make some assessment as to which one, you know, paint a picture of what's 202 00:19:59,400 --> 00:20:06,520 going on, what we see is different today than in the past. But we're invested in battery technology 203 00:20:06,520 --> 00:20:14,760 and more than one type of battery technology. We're invested in solar technology and more than 204 00:20:14,760 --> 00:20:19,320 one type of solar technology. And so, and we try to make choices within each of those fields. 205 00:20:19,320 --> 00:20:25,080 We're announcing this $100 million initiative, but we've come public with it only because 206 00:20:25,640 --> 00:20:32,520 we believe over the last five years, gradually, but in an accelerating pace, we've been both 207 00:20:32,520 --> 00:20:38,520 exposed to ideas from the best entrepreneurs and had the chance to back them in this field. 208 00:20:38,520 --> 00:20:45,800 And as smart entrepreneurs will, they want to keep their ideas quiet or stealth as we put it 209 00:20:45,800 --> 00:20:51,960 and fail they have products ready to offer to the market. And so we've made six significant 210 00:20:51,960 --> 00:20:59,480 investments today. And several of those are now public show the kind of opportunity that there 211 00:20:59,480 --> 00:21:04,600 is for innovation. Public in terms of the public in a sense that they're likely talking about 212 00:21:04,600 --> 00:21:10,280 their efforts, recruiting people, offering products for sale. And then others are on the verge of 213 00:21:10,280 --> 00:21:15,720 offering their services or products for sale. But they show they answer your question, which is 214 00:21:15,720 --> 00:21:21,160 what are the markets like, what is the size of them and what kind of difference are they going 215 00:21:21,160 --> 00:21:27,880 to make in our lives? You asked about solar. We're backing a venture called Mia Sole, which is 216 00:21:27,880 --> 00:21:37,560 making flexible solar panels. They deposit solar material elements on flexible substrate, for 217 00:21:37,560 --> 00:21:44,520 example stainless steel. Instead of putting it on expensive brittle silicon, a crystalline 218 00:21:45,000 --> 00:21:52,360 surface that raises the cost of it. And the solar market sales for these modules, photovoltaic 219 00:21:52,360 --> 00:21:59,320 modules grew 67% last year measured in megawatts. And over the last five years has been growing 220 00:21:59,320 --> 00:22:07,960 over 40%. There's almost an insurmountable market demand right now for innovation in solar energy. 221 00:22:07,960 --> 00:22:13,080 And having said that, so we get a sense of the size of these markets overall. Today solar electricity 222 00:22:13,080 --> 00:22:20,520 generation accounts for less than 1% electricity generation worldwide. Another investment that we've 223 00:22:20,520 --> 00:22:27,800 made is in a brilliant team out of MIT, who this venture is called Lillipcution. And they're making 224 00:22:28,520 --> 00:22:36,440 tiny, but you do know all power, butteen power, the solid oxide fuel cells. And these are basically 225 00:22:36,760 --> 00:22:44,760 rechargeable electrons generators, the size of a battery that you'd put in a laptop or a cell phone. 226 00:22:44,760 --> 00:22:49,400 But instead of running for a few hours on a charge, the run for days on a charge. And when they're 227 00:22:49,400 --> 00:22:56,040 through with that fuel from your cigarette lighter, butteen, you have a squirt more into the cell 228 00:22:56,040 --> 00:23:05,240 and it just keeps on generating electricity. Three others are involved in energy storage to really 229 00:23:06,200 --> 00:23:12,520 disruptive technologies with respect to today's batteries, which are well positioned for improvement. 230 00:23:12,520 --> 00:23:21,080 And another large scale, solid oxide fuel cell project, together with an energy exploration 231 00:23:21,080 --> 00:23:29,400 venture that can more effectively discover and harness bridges from the hydrocarbon economy 232 00:23:29,400 --> 00:23:37,800 we're in today into a renewable economy. All told, renewable energy supplies less than 6% 233 00:23:37,800 --> 00:23:45,080 of the world's consumption of energy. And of that renewables, the vast majority is hydroelectric 234 00:23:45,080 --> 00:23:51,880 power. So there's a very, very large market opportunity that's right for innovation. 235 00:23:51,880 --> 00:23:58,600 Before Bill, before you jump in on this, John may be a question since, as a team you oversee 236 00:23:59,240 --> 00:24:05,960 lots of innovation, many things taking place. How about consumer adoption? Are you also investing 237 00:24:05,960 --> 00:24:13,000 in the evangelism, the prophesizing, and really driving consumer adoption towards alternative 238 00:24:13,000 --> 00:24:18,520 forms of, I will just say, let's call it energy in this case, or do you depend on the individual 239 00:24:18,520 --> 00:24:22,920 companies and points of light take care of themselves in their own business plan? 240 00:24:22,920 --> 00:24:29,080 If you look at the United States, energy and research uses is relatively efficient in the 241 00:24:29,080 --> 00:24:35,320 industrial side. We've done a fairly good job of getting more efficient there, but it's really, 242 00:24:35,320 --> 00:24:42,920 really been poor on the home consumer side. And we would love to find transformative tipping 243 00:24:42,920 --> 00:24:49,160 business plans, technologies that could improve the efficiency and in-residence as throughout the 244 00:24:49,160 --> 00:24:56,920 country. And that's a challenge, because people often look more to purchase costs than 245 00:24:56,920 --> 00:25:02,360 like cycle cost of ownership. And so we have to find new business models in new ways of making 246 00:25:03,000 --> 00:25:10,440 of that more intelligent decision happen. There are three ways to accelerate the adoption 247 00:25:10,440 --> 00:25:15,880 of these technologies into markets. In many cases, they're invisible to consumers. And getting 248 00:25:15,880 --> 00:25:22,840 an advanced battery adopted, for example, by Dell or a compact computers for their laptops, 249 00:25:22,840 --> 00:25:29,560 that's the way the partnership can help by opening doors. The second is to recognize that 250 00:25:30,440 --> 00:25:37,320 most of the markets for energy are regulated. And so there are government and policy 251 00:25:37,320 --> 00:25:44,200 incentives that are today in place and that can be extended or made even stronger, whether they're 252 00:25:44,200 --> 00:25:52,040 in the form of subsidies or clearing out regulatory underbrush that would either slow or hasten the 253 00:25:52,040 --> 00:25:59,160 adoption of these. And we're very active on that front in helping companies get their innovations 254 00:25:59,160 --> 00:26:05,080 and further research funded early markets of subsidized. The third and perhaps most important 255 00:26:05,080 --> 00:26:13,000 is to select the kinds of innovations that are going to naturally appeal to consumers. And those 256 00:26:13,000 --> 00:26:19,480 like the personal computer or like the revolution in podcasting are those that empower individuals. 257 00:26:19,480 --> 00:26:24,840 And so the energy innovations we're involved with are those that are distributed. It's a kind of 258 00:26:24,840 --> 00:26:32,360 personal energy. The same would be true of energy, storage, or of our efforts to find innovations 259 00:26:32,360 --> 00:26:36,840 for clean water. They're not even ideal of enterprise software is going the same direction. 260 00:26:36,840 --> 00:26:47,560 People that are individuals in an enterprise. So these are not mega wide innovations for cities 261 00:26:47,560 --> 00:26:53,800 of 10 million people, except as they can be distributed spread around to villages to your home, 262 00:26:53,800 --> 00:27:00,440 in your garage, into your personal electric vehicle. And I think that's one of the important 263 00:27:00,520 --> 00:27:07,000 breakpoints between what used to be known is clean technology. And about over the last 10 years, 264 00:27:07,000 --> 00:27:12,200 every year year and in year out about 6% of venture capital was invested in so-called clean 265 00:27:12,200 --> 00:27:18,600 tech. That's not the field that excites us. We're excited about green tech, which conveys more of 266 00:27:18,600 --> 00:27:28,920 the sustainability, distributed, personalized, and economically important, and green, think profit. 267 00:27:28,920 --> 00:27:36,600 Excessed, sustainable elements of this new initiative. We think the time has come for this field to 268 00:27:37,320 --> 00:27:45,880 get more than 6% of the worldwide R&D venture capital dollars. And we certainly intend to devote 269 00:27:45,880 --> 00:27:49,400 more than 6% of client-ers funds to these kinds of innovation. 270 00:27:49,400 --> 00:27:56,760 Well, one of the short answer to your question is, whatever it takes, we will invest in getting the word out 271 00:27:57,560 --> 00:28:06,280 on the demand side as well, trying to help manage demand and bridge over to the new energy economies. 272 00:28:07,400 --> 00:28:15,960 And I've heard my partners say many times that success is not enough. It has to be significant 273 00:28:15,960 --> 00:28:23,960 that we have to leave behind something significant for the world. If you look at many of the 274 00:28:23,960 --> 00:28:30,760 cleaner investments over the last 35 years that have been really good economic outcomes, 275 00:28:30,760 --> 00:28:35,960 they've been more importantly significant for the world at large. And we are attempting to 276 00:28:35,960 --> 00:28:40,280 announce new initiatives that will do the same thing over the next 20 years. 277 00:28:40,280 --> 00:28:45,320 Where are the gaps? What are you missing? What are you looking for any types of companies or initiatives 278 00:28:45,320 --> 00:28:52,280 or particular areas of invention? We're specifically looking very, very intensely right now for 279 00:28:52,600 --> 00:29:00,440 areas in the biofuels, initiatives in the biofuels area, whether they're biologically based or 280 00:29:00,440 --> 00:29:07,560 chemically based, free processing, material that would be recyclable. I mean, where the carbon gets 281 00:29:07,560 --> 00:29:15,400 recycled and doing that in a way that's very clean and has good economic and maintainability 282 00:29:15,400 --> 00:29:21,240 parameters. And so it's the whole system design of how such initiatives would get put together. 283 00:29:21,240 --> 00:29:28,840 And we've seen a lot of plants and we're still looking for one that's incredibly transformative 284 00:29:28,840 --> 00:29:35,320 and are very excited to keep looking in this area. And we think there will be a number of great 285 00:29:35,320 --> 00:29:40,360 ventures and hope to invest in several of them. Here's another example, Adam. We spoke about 286 00:29:40,360 --> 00:29:47,240 build it about most of the least efficient uses of energy being in homes. 25% of the electricity 287 00:29:47,240 --> 00:29:53,320 in homes is being used for lighting today. And so we anticipate. We've seen several proposals for real 288 00:29:53,320 --> 00:30:00,680 revolutions that provide more economic lighting, longer-lived lighting, better control lighting, 289 00:30:00,680 --> 00:30:08,840 and significantly lower energy consumption. The field is wide open. We want to see entrepreneurs 290 00:30:08,920 --> 00:30:15,960 or better said teams, great teams that can think through and take technology and apply its 291 00:30:15,960 --> 00:30:22,440 leverage. We know now that in the next 10 years there are great possibilities to apply technology 292 00:30:22,440 --> 00:30:27,720 leverage to deliver an order of magnitude improvement on any of these cost models that we 293 00:30:28,280 --> 00:30:34,120 are driven by today. And the John also has, I think, made the point several times, 294 00:30:34,120 --> 00:30:40,440 imping upon our national security at times. The last thing I would say is, go to our website. 295 00:30:40,440 --> 00:30:45,160 There's instructions there for how to send us, send us, send us your great ideas, come visit. 296 00:30:45,800 --> 00:30:51,000 We want to see the plants. We look at new things every day and we want to see lots of great ideas 297 00:30:51,000 --> 00:30:55,000 in these areas. We know that they're out there. We know they're more than they were seeing. 298 00:30:55,000 --> 00:30:59,560 We want to see more. Bring them bring us your great ideas. I think one thing we didn't touch upon 299 00:30:59,560 --> 00:31:06,600 as well is a lot of the really great ideas come from the great universities around the world. 300 00:31:06,600 --> 00:31:12,120 This country, we have a lot of great universities doing a lot of research. I mean, really great 301 00:31:12,120 --> 00:31:19,400 research and connecting. It is our job, our mission to connect with those research teams and 302 00:31:19,400 --> 00:31:24,200 eventual entrepreneurs for that research that comes out of those universities. And so we want to 303 00:31:24,200 --> 00:31:30,520 continue to network with those great research universities because that's where a lot of the 304 00:31:30,520 --> 00:31:37,560 baseline work is going on that we'll see the results of in the next 10 years in the new 305 00:31:37,560 --> 00:31:44,040 energy economy. Please know that you can come and you can come to us with an idea. 306 00:31:44,680 --> 00:31:50,120 You don't need a business plan. You don't need the management team. You don't need the laser 307 00:31:50,120 --> 00:31:56,600 like focus on an unserved market opportunity. At the beginning of the biotechnology industry, 308 00:31:56,600 --> 00:32:02,360 there were two scientists, Boyer and Cohen in one of our partners Bob Swanson was reading one of 309 00:32:02,360 --> 00:32:07,000 their research papers and took them out for a beer these two of them. And we backed them to the 310 00:32:07,000 --> 00:32:13,880 tune of $10,000 a month to conduct an experiment in their labs and to write a business plan for 311 00:32:13,880 --> 00:32:20,440 what became Genentech, a leader, 120 billion dollar market value. In the worldwide biotechnology 312 00:32:20,440 --> 00:32:30,520 industry, there will be, in our opinion, several, if not many, Genentech's and Google's and 313 00:32:30,520 --> 00:32:37,000 some micro systems and Oracle's really great, big, durable, global companies who can serve 314 00:32:37,880 --> 00:32:44,680 the needs for innovation. In this, perhaps the largest of all our markets, the needs for 315 00:32:44,680 --> 00:32:51,480 clean water, clean power, clean transportation. The largest single trend on this planet over the 316 00:32:51,480 --> 00:32:56,680 next 50 years, everyone agrees is urbanization. We're going to triple the number of people living 317 00:32:56,680 --> 00:33:02,840 in large cities from $2 billion to $6 billion people. Think of that. That's going to be the 318 00:33:02,840 --> 00:33:09,240 equivalent of creating eight cities every year larger than Manhattan. And so the innovation isn't 319 00:33:09,240 --> 00:33:15,400 just happening in the United States, it's happening all over the world. Great innovation in bio 320 00:33:15,400 --> 00:33:23,320 fuels, bio diesel, for example, in Europe, tremendous demands for efficiency and conservation throughout 321 00:33:23,320 --> 00:33:29,720 all of Asia and the markets are also good. So we're open for business and are called to the 322 00:33:29,720 --> 00:33:34,920 world to innovators and entrepreneurs to visit the Cleaner Perkins, a co-field buyers website. 323 00:33:34,920 --> 00:33:46,120 It's www.atpcb.com. Yeah, I'd say go to kpcb.com. Look at the descriptions of our initiatives, 324 00:33:46,120 --> 00:33:50,840 look at the biographies of the partners, pick one of us who matches up with your ideas, send us an 325 00:33:50,840 --> 00:33:56,520 email, describe your idea, tell us your new technology, your new way of doing business, your way of 326 00:33:56,680 --> 00:34:01,160 getting things adopted, and we'll get back to you and let's start a dialogue and see if we can 327 00:34:01,160 --> 00:34:06,600 change the world together. So that's what I'd call quite an invitation. Now if you 328 00:34:06,600 --> 00:34:11,160 made it all the way to the end of this interview, then you'll know what I meant by kind of a 329 00:34:11,160 --> 00:34:16,840 very interesting type of advertisement. There's Bill Joy, a legend in Silicon Valley, inviting 330 00:34:16,840 --> 00:34:23,960 you to change the world together with him. Fantastic. Well, anyway, I hope you enjoyed that. 331 00:34:23,960 --> 00:34:29,640 I plan, that's one of my private promises to myself. I plan on doing a lot more interviews in 2007, 332 00:34:29,640 --> 00:34:34,520 and I will not probably put them on a different feed. I'm just going to make it all part of the daily 333 00:34:34,520 --> 00:34:38,120 source code because it's not what it's all about. Aren't you supposed to build a do whatever you 334 00:34:38,120 --> 00:34:43,000 want to do? So I shall do just that. And a reminder that portions of today's show are brought to you 335 00:34:43,000 --> 00:34:52,040 by Splenda, what's your flavor? Check out Splenda, mix the flavors together, and enjoy. GoDaddy.com, 336 00:34:52,040 --> 00:34:57,400 use checkout code dsc3 for a great deal of domain name, and if you're going to go to the movies, 337 00:34:57,400 --> 00:35:03,720 January 12th, stomped the yard opens up, go to stompedthepodcast.com, stompedthepodcast.com, 338 00:35:03,720 --> 00:35:08,280 and Tony Costas will tell you all about this fantastic new movie, which is going to be a big big hit. 339 00:35:09,240 --> 00:35:14,840 I hope. We want more business from down people. All right, I will be back tomorrow with 340 00:35:14,840 --> 00:35:20,200 probably another best of Charlie, which of course I'll give you an update on the big movie 2007, 341 00:35:20,280 --> 00:35:26,360 and have yourselves a great rest of Sunday afternoon. Or if you're on Australia, tomorrow. Bye. 342 00:35:35,640 --> 00:35:40,120 Get this piece of the show and more great ones like it on the BT Pod Show Media Network, 343 00:35:40,120 --> 00:35:43,560 powered by Pod Show and Limelight Network. Control your part in the show.