Joining the Clean Fight

Today I am excited to announce that I have joined The Clean Fight NY (TCF), a new accelerator in NYC for growth-stage clean energy companies, as Program Director. TCF works with clean energy startups that have approximately $1 million in annual revenue and have successfully raised outside capital. Our goal is to help these companies cross the chasm and scale and, ultimately, to help bring 100% clean energy to 100% of the population, starting in New York.

You may be wondering why I have chosen to do this, and why TCF might bring me on, given that my background is one of generalist investing (as well as teaching). In short, like many of us, I believe the climate crisis is the most consequential threat that humanity has ever faced. I have been looking for ways to contribute to alleviating that threat for a number of years now, working to build a knowledge base and network in the world of sustainability, with a goal of shifting my professional focus to the space. I have invested in companies like HEVO Power and Radiator Labs, and volunteered for organizations like the Cleantech Open and 350NYC. I’ve spoken with dozens of investors, entrepreneurs, advocates and other leaders in the space. So many of these leaders have freely given of their time, often acknowledging the potential benefit of getting more people to throw their talents into this fight. I’m certainly not alone as a technology generalist moving to a clean tech focus – Jason Jacobs is a great example and inspiration. I’m very happy to join this movement, and to have convinced the team at TCF to give me a chance.

You may also be wondering why companies that have already successfully gone to market would benefit from an accelerator program? It’s true – there are very few programs for companies at this or later stages. This is something new, which makes it exciting. It’s also badly needed. NYSERDA, a program sponsor, has funded numerous accelerators and incubators over time. They and others in the space have pointed out that, even more than in other sectors, companies struggle to move from successful initial pilots and demonstration projects to large-scale implementations and a wider customer base. There are many sources of extra friction in the world of clean energy compared to other sectors: longer sales cycles, complex products which often entail hardware component(s), a shifting regulatory landscape, and more. An accelerator cannot overcome all the challenges for all companies, but we’ll try to help a group of particularly promising companies to overcome as many as we can.

We will not be doing it alone. Aside from NYSERDA, thanks to the efforts of Kate Frucher (Managing Director), Taylor Rowe (Director of Partnerships) and others, TCF is fortunate to have an impressive slate of partners including key prospective customers, leading investors, sponsors and advisors. Nyla Mabro (Head of Strategy and Marketing) and Grace Aranow (Program Associate) round out the team, together with a fantastic board. TCF is also a member of the New Energy Nexus family of clean energy accelerators around the world. 

More to come about our first cohort of companies (all of which are focused on decarbonizing buildings) and the journey of TCF. For now, if you think you have something to contribute to TCF – if you are a potential customer or partner of clean energy building product companies, a potential investor, or perhaps a technologist looking to join those of us shifting our focus to sustainability, please reach out.


The Road to the Final Four

Behind the Scenes of the Cornell Tech Startup Awards

Today, ten startups founded by Cornell Tech students competed in the Sixth Annual Startup Awards, vying to be one of four winners to receive $100,000 in cash and services from Cornell. A description of each of the competing companies can be found here and the video of Open Studio, including short pitches from each of the ten, is here. If you have not seen the video pitches, I highly recommend watching them; having seen thousands of pitches and organized and judged many competitions, I think they are some of the best I’ve seen from newly-founded companies. 

If you have seen the videos, you may be wondering where these teams came from, and how they made it to the finals? I’ll attempt to answer those questions in this post.

First, a bit of background in case you missed the preamble for Open Studio. The Awards are a program of Cornell Tech, a New York City-based branch of Cornell University, home of the Jacobs Technion-Cornell Institute, focused on graduate applied sciences. Cornell Tech is home to Masters, PhD, and post-doctoral students in fields including Computer Science, Electrical and Computer Engineering, Business, Law, Operations Research; as well as bespoke programs like Connective Media, Health Tech, and Urban Tech. 

The Awards are a concluding celebration of the Studio Program for the year. The Studio at Cornell Tech is a collection of classes in which students work in interdisciplinary teams to apply their academic knowledge to solve real-world problems by creating new digital products. I teach Startup Studio, which is one of two capstone courses, together with BigCo Studio, for the Studio curriculum. This year, 186 students formed 46 teams to pursue new business ideas in Startup Studio.

Ultimately, 25 teams applied for Startup Awards this year. Many came out of Startup Studio, but the Awards are open to any Cornell Tech student team, and we had entrants who developed their startup ideas outside of class as well. As in prior years, in order to qualify for Startup Awards, teams had to include Cornell Tech founders who are committed to working full time on their startup should they win. The first step in the process was submitting a written application, which ran to five pages or so, not including exhibits, for most applicants, with details on their teams, plans, products, potential impact, and more. They submitted videos, cap tables, budgets, and investor pitch decks. What had been a school project for many students took a major step toward becoming a real company at this point.

Applying teams then became eligible (and were required) to participate in a series of workshops and events, including “VC [Venture Capital] Days,” when teams meet with investors and founders to pitch and receive feedback. It was at this point that COVID-19 forced some changes on the process compared to years past, when these meetings would take place in person, with the dozens of students mingling with dozens of investors and other professionals. Such gatherings were already out of the question by the time VC Days came along, so the Spinout Team (the group of Cornell Tech faculty and staff who organize the Awards) went virtual. We moved the VC Day interactions online, hosting the sessions in Zoom rooms. The virtual  interactions lacked the handshakes and informal networking of years past, but were better in some ways: we were able to include investors from Silicon Valley, for example. In the end, the teams interacted with dozens of professional investors and accomplished founders through the Spinout programs. 

In the second and final VC Day, the participating investors provided feedback on the team pitches that the Spinout Team then used to narrow the field from 25 to ten teams. The finalists were notified on April 29, at which point they had just one week to prepare a five minute video pitch for Open Studio. In years past, they would have had over two weeks to get ready for their live presentations on stage in front of the Open Studio audience, but, this year, they had to submit their videos with enough time for our professional producer to edit them together for the final Open Studio program on May 15. The teams also had that short time to work out any remaining intellectual property issues with each other and any other students who worked on their projects but may not be planning to join their startups after graduation.

The few days leading up to the May 6 deadline were a whirlwind of practice sessions with the Spinout team and recording for the finalists. In the end, as I am sure you agree if you watched the videos (again, if you haven’t you should), all the teams told compelling stories, some very personal, and proved their ingenuity and dedication. On the way to Open Studio, the student teams became company founders in a real sense, making difficult decisions regarding post-graduate professional commitments, company roles, equity allocations, and other challenging founder issues.

In past years, the finalists presented at Open Studio to an invited audience including a panel of judges – investors and Cornell Tech faculty – who meet immediately after the pitches conclude to select the winners. This year, because Open Studio had to be pre-recorded, the judges had to watch the videos and make decisions before the event.

So it was that, a few days before Open Studio, seventeen judges, including venture capitalists, founders of successful technology companies, and Cornell Tech faculty and practitioners, met virtually to select the four winners. As in the past, the judge pool comprised more practicing professionals than Cornell Tech participants, so as to enhance the focus on real-world impact and viability in the final selection. The judges, all with many other commitments, each spent over an hour watching the pitch videos and preparing before the deliberations. All were very vocal, active participants in the live session, which entailed nearly two hours of iterative voting and discussion. As in the VC Days, the judges considered a variety of factors in the selection, including competition, barriers to entry, potential impact, team backgrounds, traction, and the potential to generate revenue and attract funding.

In the end, four teams were selected, along with a runner-up who will benefit from continued mentoring and services from Cornell Tech – you can see all five named here. Congratulations to these teams! These five, along with the twenty other applicants to this year’s Startup Awards, represent the ideals of Cornell Tech, namely, impact in the form of applied technology. The Awards are just one step in the journey for the teams that continue, whether they won or not. 

My deepest respect goes to the teams, and my thanks to all those who made this year’s Startup Awards possible – the VC Day participants, Startup Awards judges, and my fellow Spinout team members. Finally, best wishes to all the participating teams!


Why Teach Startup Studio @ Cornell Tech

Last fall I was offered the opportunity to teach Startup Studio. I couldn’t say no. My history with Cornell and Cornell Tech, the potential to help build on an already-great program, the chance to participate in the development of startup education, and the Studio team all drew me to the role.

I first heard about Cornell Tech from Dan Huttenlocher when the school was just an idea without a name. A year or so thereafter, my first visit to Cornell Tech was to its initial, temporary space in the Google (Port Authority) building. There were just a few team members rattling around what felt like a big space (though it was probably only 5,000 square feet). That’s when Dan introduced me to Greg Pass, the school’s first “Chief Entrepreneurial Officer.” We soon realized we had met before — in Spacecraft Design class as Cornell undergrads. Over the intervening seven years, I volunteered my time to help as Cornell Tech grew, and in the process had a lot of fun. From the outset, the initial team members at Cornell Tech brought to their work the spirit of founders, an experimental, free-wheeling nature that I hope to carry forward in Startup Studio.

The first Startup Studio comprised less than ten students. David Tisch took it over and made it a jewel of Cornell Tech and an engine for new venture creation and entrepreneurial energy for New York City. I was fortunate to sit in on and help with the course over the years.

When I attended college and grad school, there was a legitimate debate about whether entrepreneurship could be taught at all. Today, there are many effective classes in startup formation. Cornell in Ithaca, Columbia, NYU, Stanford and any number of other schools and programs in NYC and beyond offer rigorous, practical instruction in lean startup principles, design thinking, and other building blocks of new product and business creation, most of which have been developed just in the last ten or fifteen years. I am excited to join in the development of this discipline within Cornell Tech and hope to join conversations on the topic with professionals from other institutions as well. I think Startup Studio at Cornell Tech is unique in some ways — its truly interdisciplinary academic setting, applied focus, and scale (nearly 200 students this spring) present a special challenge and opportunity.

Finally, I would not have signed up to teach if not for the team I get to work with. Josh Hartmann, Greg’s successor in running Studio, and his team, including Lendra Elberger and Tyler Rhorick, embody the spirit that drew me to Cornell Tech to start. I have also invited some amazing guest lecturers, from whom I am already learning myself.

In short, I am happy to have been a part of the Cornell Tech journey up to now, and am excited for the opportunity to guide Startup Studio into its next phase with some fantastic people.


Departure from CoVenture

After four years co-founding the firm, I recently decided to leave my role as a partner at CoVenture.  I continue to count everyone there a friend, and my decision was made after much discussion with the team.  Over time, our business has shifted – our Credit and Crypto business lines have grown and continue to attract more capital, while we decided to slow our new venture capital investment activity and are not raising a new dedicated venture fund at this time.  Because my focus was on our venture investments, it made sense for me to transition out in the wake of these changes.

I remain committed to our investors and portfolio – I remain on the CoVenture board and continue to advise the companies in the portfolio – but have stepped away from my day-to-day role.  I am also excited about the prospects for CoVenture – the Credit, Crypto, and potential future business lines and the team behind them.

The decision to move on was not easy, but deciding to stop making new venture investments was even harder.  Venture capital was our first business at CoVenture. Specifically, we tried out a new model for VC: investing in new start-ups with our own “sweat equity” – we designed and built software products in exchange for stock.  Later, we also invested cash in our portfolio companies. We set out to prove that we could make smart investments in this way, and that we could help our companies move faster from founding to first customer. We are excited about the portfolio we constructed, which includes some companies that are already stand-outs, such as KidPass, Produce Pay, Lightyear, Good Uncle, and others.  That said, as we invested our venture funds, the early-stage market shifted, making it harder to invest in great companies on fair terms with our software-for-equity strategy. Moreover, we learned that our service-focused investment model is more difficult to scale than anyone anticipated.

One of the first tasks of any startup is to get a product to market and to seek “product-market fit.”  We approached our business the same way, and quickly found a sizeable pool of founders interested in trading equity for product development.  Ultimately, we would go on to review thousands of investment opportunities and to make 40 investments, the vast majority through a combination of development services and cash, many of them listed here.  We deployed three small funds in this way.

As we began to try to make more of these investments and to consider raising larger funds, however, our new model would not scale.  Each engagement was unique and required not only engineers and product managers but oversight of many human factors. Perhaps the biggest challenge:  it’s very difficult for a founder to develop trust and rapport with a “consultant.” Developing a new product inevitably involves failure – bugs, unforeseen user errors, long feature backlogs.  When an “in-house” development team, perhaps a technical co-founder, experiences these failures, most founding teams rally together to get over them. When a founder experiences these failures while working with a consultant, the tendency to blame the consultant can be hard to resist.  This is not to say our work was perfect – far from it – only to say that it’s hard to find perfection in the world of new product development. But developing trust as a consultant took real time and focus with each founder.

Once that trust was developed and we built out the product, our companies needed help to ensure we transitioned our product teams out as smoothly as possible.  This process also took time and, in some cases, effort to help recruit full-time replacements for the resources we had been temporarily supplying to companies.

Additionally, we found fewer economies of scale in our own team than we had hoped.  Our product team did a laudable job of capturing and implementing best practices based on our experience with this new model, making each new project smoother and better.  But, ultimately, we found that each new product needs about the same time and attention from developers and product managers as the last one, and from similarly high-caliber people.  

Finally, the world did not stand still as we put this new investment model to the test.  The early-stage funding market evolved: attractive new companies began to raise more capital on day one, reducing the attractiveness of the software-for-equity trade we offered.

In the parlance of the various stages of product development, we did find early product-market fit and, we believe, validated our initial value hypothesis.  We were able to find and work with exciting companies. But as we worked to develop a growth hypothesis, we could not make our own business model grow using this style of venture investing.

I’m happy to have had a hand in our experiment with a new venture capital model at CoVenture, and to have had the opportunity to help assemble and work with our team and our portfolio.  There are, of course, other organizations pursuing similar investment approaches: Expa, Human Ventures, betaworks, and others.  I admire each of these firms in different ways and will not be surprised if one or all of them is very successful over time (some already are).  I hope this summary of the results of our experiment is helpful to them and to other entrepreneurs in their journeys.


Pitch Podcast

I had a great time recently with Patrick O’Shaughnessy on his podcast, Invest Like the Best.  The episode allows listeners to eavesdrop on an entrepreneur, Brett Maloley of Ladder, pitching first me and then Taylor Greene.

You can check it out here.