Think Big. Get close to your customers in US.

Here is a nice interview with Jeremy Liew of Lightspeed Ventures featured in TechNation Australia.

Jeremy's direct style shines through.  My favourite quotes:

What are some of the most common mistakes you see aussie start-ups making?

Not thinking big enough. Focusing on technology instead of customer problems. Not looking for a global perspective in employees, leadership and investors early enough.

What do you think is stopping Australia from becoming a leading global tech-hub?

Market Size. Aussie companies need to look to global markets, and that means relocating closer to customers, so there is a limited runway that a company can have while based in Australia.

What advice would give an Aussie startup considering making the move to the US now?

The time to move to the US (or anywhere that is close to your markets) is when you’re ready to talk to customers. No need to move before that. But you must do it once you’re talking to customers. Otherwise, it is just too hard to stay top of mind as a startup.

What is the one bit of advice you would give a startup founder?

You can change your team, you can change your technology, but you can’t change your market.

Bottom Line: It won't take you long to read, but you will learn a lot.

CPV: Devil is in the detail

Eric Wesoff of greentech media posted a nice 3 part review of concentrating photovoltaics (CPV) suggesting that the technology might be "stuck in the middle" between "the rapidly commodifying silicon solar market and the well-financed high-output concentrated solar thermal market."

 

HCPV is defiantly in the middle, but I would not discount HCPV just yet.  LCPV on the other hand will find it tough to penetrate the market as PV prices fall, even if they can achieve a significant $/KWhr advantage.

 

For HCPV there is room for high-DNI applications between large PV and small CST. Project developers will like the smaller foot print if $/KWhr can be hit and reliability proven (but that acceptance will take time).  TJ-cells are only now reaching the minimum efficiencies required to make HCPV work.

 

So is CPV over shadowed by CST?  Perhaps only in the battle of press releases.  Apart from the relatively mature trough-type CST technology, products in both CPV and CST are only just coming to market. There is justified excitement about FPL and PG&E contracts, but the energy will only be sold if they hit $/MWhr targets.

 

We won't know how successful the most advanced new CPV and CST companies will be in hitting cost targets for perhaps 12 months.

 

Part of the issue for CPV is that many companies launched with what looked like a great concept.  But in CPV the devil is in the detail, e.g. optical and mechanical losses, thermal issues, required tracking precision, low cost manufacturability, and keeping the optics clean in operation.  The "detail devil" has sent several companies back to the drawing board. Others look on track to produce a great product - now they need to win over the developers.

 

Bottom Line: In assessing a CPV technology you need to consider both the target applications and the completeness of their design concept for that application - does the team have the expertise to make it work? 

Worley plans 34 x 250 MW solar plants in Australia

I don't often post news items, in fact I don't often post :-).  However, this is pretty interesting.  The Sydney Morning Herald reports that Worley Parsons, Australia's largest engineeering company, is planning to build 34 250 MW solar power stations.  You can read about it here.

It will be interesting to find out which technology they will use. The article says they would use "technology employed in the United States over the past 20 years" and build the plants by 2020.  Strictly interpreted, that limits the candidates to existing power tower and trough technologies.  It would not include home-town boy Ausra, who announced seperate discussions with Australian governments.

Bottom Line: US based solar thermal companies will be looking overseas to avoid the desert land grab in the US.  Look for more innovative technologies from Australia and other Asia-Pacific countries coming to the US for capital.

Bay Area Statistics

Here are some interesting statistics, courtesy of the Bay Area Council Economic Institute. 

• The Bay Area is the world's fourth-most-important center for global business - after New York, London and Tokyo - as measured by the number of and revenues of Forbes Global 1000 companies.
• At $400 billion, the region's economy - if it were a nation - would be the world's 18th largest.
• Economic productivity is $122,000 per worker, 26% higher than the national average.
• 42 percent of the Bay Area's residents have college degrees.
• The region attracts 35 percent of all venture capital invested in the US (approx $10 billion).
• Very high venture capiltal invested per capita at $1,370, ahead of Singapore ($180), Israel ($117), New York ($107), Sweden ($101) and UK ($35).
• Bay Area universities attract 6% of national academic research funding (approx $2.5 billion).
• Foreign investment in the region grew 67 percent from 2002 to 2006.

The report calls for action to address some of the downside: a high cost of doing business, expensive housing, congested traffic (they should try Sydney), and a stressed education system. The report provides a lot more detail in comparison to other major world regional centres.

Interestingly, the high cost of doing business seems related mainly to salary and "benefits", i.e. payroll tax, health insurance, pension, and miscellaneous employee incentives. So partly that high productivity is being shared around, but also health costs (the US is almost double that of other developed nations as a % of GDP) must play a part.

Bottom Line: A great snapshot of the Bay Area, but read the report rather than the press summaries to get the real details.

Is it that bad?

Many people outside the US have been asking me: Is the US economy really that bad? What does that mean for early stage companies?

From outside the US, the sensationalist, and not so sensationalist, media reports have relentlessly painted a grim picture of the US economy.  While commentators have been calling a recession for a long time, official stats have not yet reported the requisite two quarters of contraction. Although the Fed Chairman did warn of a possible "R" today.

The optimists are saying that the the damage is contained to finance and real estate, while growth in the rest of the world will soften the blow. Pessimists say the flow through to consumer spending will drag down the whole economy.

What is the impact on early stage companies? My reading of the mood is that, unless you are looking for a IPO or trying to raise debt, then stay on course but be disciplined. VentureBeat has a post that pulls together a variety of sources here.

Bottom Line: Glass half-full? Glass half-empty?