Austin Mayor Lee Leffingwell declared the city the clean energy capital of the world at a reception for the Clean Energy Venture Summit 2011 at city hall Wednesday night.
The city’s goal is to have 35 percent of its energy come from renewable sources by 2020 and it’s well on its way to achieving that goal, he said.
In the last few weeks, the city has signed wind contracts that will put it at 30 percent of its energy coming from renewables by the end of next year, Leffingwell said.
Austin has a very mature high-tech industry that provides a support base to nurture clean energy business that continue to grow, Leffingwell said.
Several years ago, Austin declared itself the live music capital of the world and no one has ever challenged that, Leffingwell said. So he expects the clean energy capital of the world slogan to stick as well.
The changes started at city hall, which is the only city hall that is a national wildlife habitat, it has all kinds of renewable features including solar panels, Leffingwell said.
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At the Clean Energy Venture Summit 2011 in Austin, Cyclewood Solutions competed with four other CleanTech Open semifinalists from the South Central region.
And it took home the $10,000 prize.
Kevin Oden, Chief Operating Officer of Cyclewood Solutions and Nhiem Cao, president and CEO of Cyclewood, pitched their company to a panel of judges. At the end of the day, the judges decided Cyclewood was one of the best companies to go on to compete in the Cleantech nationals in San Jose, Calif. in November for $250,000.
Cyclewood, based in Fayetteville, Ark., makes biodegradable plastic bags called XyloBag from lignin, an organic material that biodegrades in 150 days.
The plastic bag market is worth $8.6 billion.
Cyclewood can make its Xylobags for as little as one and half cents, Oden said. That compares to 1.2 cents for a traditional bag, he said.
By 2015, the company predicts sales of 2.2 billion bags from just 12 customers. It also expects to have revenue of $127 million by 2015 and to be profitable.
Cyclewood is seeking a first round of funding of $600,000, followed by a $1.5 million second round.
The other Cleantech Open semifinalists for the South Central region included GeoSolar Zero Energy Buildings, based in Louisville, Kentucky, which makes fully integrated temperature controls for buildings to conserve energy. NanoTermo, an Austin-based startup, has developed a heat dissipation technology for Light Emitting Diodes, known as LEDs, using a composite nanotechnology material that can be fitted into existing and new light fixtures.
Smart Office Energy Solutions, based in Houston, makes a hardware and software system to control building energy use. It was also selected as the only Texas company to go to compete in the national competition. And Silicon Solar Solutions also got recognized as a runner-up and was selected to go to compete in the national competition. The Arkansas-based startup has created thin solar sheets made form large grain polysilicon technology that makes solar manufacturing less expensive.
More information on the problem plastic bags pose to the environment and Cyclewood’s solution.
In 1999, the Texas legislature passed a law to mandate the state diversify its energy resources.
The legislation, dubbed the Texas Renewable Portfolio Standard, required all electricity providers to collectively generate 2,000 megawatts of additional renewable energy by 2009. The state estimates that 2,000 megawatts of renewable energy generates enough electricity to power more than 800,000 homes.
The 2005 legislature increased that to nearly 6,000 megawatts by 2015, said Robert J. King with Good Company. He moderated a utilities futures panel at the Clean Energy Venture Summit 2011 in Austin Wednesday afternoon.
“We’ve blown past that,” King said in an interview following the panel. “We’re already at 9,000 megawatts.”
That shift to renewable energy has kept the power flowing in Texas despite a huge demand for air-conditioning power from a sweltering hot summer. Renewable energy from coastal winds prevented a blackout on Aug. 4, King said. An additional 2,000 megawatts from coastal wind farms, combined with conservation prevented outages, he said.
The energy utility futures panel at Clean Energy Venture Summit 2011
“Wind is a competitive resource,” said Cris Eugster, executive vice president and chief sustainability officer with CPS Energy, San Antonio’s utility company. Wind energy costs just 5 cents per kilowatt, he said. That compares to 11 cents per kilowatt for nuclear, 4 cents for gas, 5 cents for coal and 15 to 30 cents for solar, according to the Pure Energy Systems Wiki.
Wind energy will play an even bigger part in the state’s future. King estimates that energy generated from wind will double to 18,000 megawatts within three to four years. Texas is spending $6.7 billion to put in new energy transmission lines in the next four to five years, King said. That’s nearly $2 billion a year statewide to upgrade the energy infrastructure system, he said. That presents huge opportunities for entrepreneurs and innovation in Texas, he said.
CPS Energy plans to generate 20 percent of its energy portfolio from energy efficiencies and renewables by 2020, Eugster said. It’s halfway there with wind energy making up 97 percent of its renewable sources, he said. But CPS also sees growth coming from solar. It runs that state’s largest solar farm, located on the south side of San Antonio, generating 16 megawatts of energy.
CPS also gets 250 megawatts of energy from 140,000 households participating in its energy efficiency program, Eugster said. And it has hundreds of customers enrolled in its home-based solar program, he said.
What’s starting to hook everyone together is the idea of the smart grid, according to panel members.
“Some entities out there think that having their own energy at hand, and not being dependent on the grid, is a good idea,” said Mark Carpenter, chief technology officer of Oncor.
Advanced meter legislation in Texas requires that utility companies install smart meters or digital readers inside people’s homes, King said.
“We have $3 billion being spent in the next couple of years on advanced meter infrastructure in Texas,” King said. That is a huge opportunity, he said.
Innovation in the last 18 months has been incredible, said William Clayton, vice president of customer care with NRG Reliant Energy.
“It seems like every day something new is coming out.” Clayton said.
Jon Shapiro, founder of the Texas Institute, told the audience that while energy companies focus on saving pennies they should be focused more on Cybersecurity.
“It’s really going to be the loss of power that is going to be a big win for smaller companies that diversify their energy sources,” Shapiro said.
Could a cyber-terrorist or hacker kid take down the energy grid?
“The systems were designed for straightforward communications and some of the equipment has been sitting in the fields since the 70s,” Shapiro said. “Many of these devices have a high degree of susceptibility to hacking. As you bring on more devices you have more vulnerability. The smarter you get the grid, the more entry points there are for hackers,” Shapiro said. He didn’t think a hacker or terrorist would take down the grid, but they could cause lots of painful problems and outages in parts of the system.
“100 percent of the customers want reliability,” said Larry Weis, general manager of Austin Energy, the nation’s ninth largest publicly-owned utility serving more than 410,000 customers.
Yet residential customers think about energy just six minutes a year, he said.
“I’m fascinated with all the things we can do,” Weis said. “I just hope the customers want it.”
Richard D. Williams, director of corporate development with Energy Future Holdings, based in Dallas, says the company has been trying to put solar panels on customers roofs for a long time.
But the cost to install solar panels from $10,000 to $30,000 has been prohibitive for many customers, he said. So the energy company went to a lease model and now it’s over-subscribed for its solar program, he said.
“Change the business model and attract more customers,” he said.
The leased program costs just $50 a month with no upfront costs, he said.
A lot of customers want a renewable energy package but they just don’t want to pay for it, he said.
During a question and answer session at the end of the panel discussion, an audience member asked about Algae as an energy-generating resource. King said the
Williams with Energy Future Holdings said the science behind Algae energy production is still about five years away from mass production.
Another audience member asked about the safety of smart meters in the home. She said a lot of California city governments have already banned them because of concerns about safety. The panel members said there is always concern when it comes to utility companies putting technology into customers’ homes, but the safety concerns are unwarranted.
Today we’ll be reporting live from the Clean Energy Venture 2011 summit in Austin.
The event starts at 1 p.m. with a utilities futures panel, followed by presentations from five Cleantech Open semifinalists competing for $10,000 in funding and a chance to go to nationals to compete for $250,000.
Then Ideal Power Converters and MTPV, presenters from a past Clean Energy Venture conference, will discuss their accomplishments in the past year.
And a reception takes place from 6 p.m. to 8 p.m. at the Austin City Hall to announce the winners of the competition.
So stay tuned.
In June of 2009, C4 Workspace opened in the King William neighborhood of South San Antonio.
This Friday, San Antonio’s only full-time dedicated co-working space closes.
The business, originally located at 108 King William, fell into debt and never gained enough customers to meet its expenses. C4 Workspace moved into cheaper headquarters this year at 1001 S. Alamo St., next to Madhatters Teahouse. But it still wasn’t able to make ends meet. Its expenses totaled $4,275 a month, but it had only $1,000 in revenue coming in, according to a post on the C4 Workspace Facebook page.
C4 Workspace catered to digital nomads like consultants, freelancers, home-based business owners and others. C4 Workspace rented desks by the day or month. It also offered a conference room. People would drop by to use a desk, plug-in and use the Wi-Fi, but they also met for coffee and networking.
Co-working is thriving in areas that have a robust entrepreneurial base. That does not bode well for San Antonio that it cannot provide community support for one dedicated co-working space. Meanwhile, Austin has more than a dozen co-working sites. In fact, The Atlantic, in a special labor day report, called freelancing the industrial revolution of our time. The nation has undergone a sea change in the way it does business from desk-bound office workers and factory workers to freelancers and telecommuting, according to its article.
Todd O’Neill and his wife Debbie Curtis poured their life’s savings into the business. Perla Escobar was also an investor. They worked hard to make a go of it. Unfortunately, the community support was not there in the end, according to O’Neill’s Facebook post.
Philip Nelson is best known in the San Antonio high-tech community as a marketing executive with NewTek, a company which makes special effects software for the movie and TV industry. NewTek also makes the Tricaster, a portable TV studio in a little black box that lots of media outlets, bloggers, companies and schools use for remote broadcasting.
But now Nelson has undertaken a new venture. He’s launched a crowdsource-funded Kickstarter project to raise $4,988 to finish an album of country, folk and americana songs.
Nelson is half way to his fundraising goal and has 11 days left to make the rest. Alan Weinkrantz, Nelson’s friend and a San Antonio-based marketing expert who owns a high tech PR firm has offered to kick in $250 if 60 people from the San Antonio area pledge $25 each. (Full disclosure I pledged $25 to Nelson’s project.)
Brian Sharples, CEO of HomeAway
Those are just a few of the secrets of being a successful entrepreneur, according to Brian Sharples, CEO of Austin-based HomeAway. He gave an insightful speech recalling some of the lessons of his life at Capital Factory’s Demo Day recently.
“I’ve been an entrepreneur all of my life,” Sharples said. “I’ve had some that haven’t worked out at all and some that have worked out OK.”
For some reason, from the beginning, HomeAway has just exceeded expectations, Sharples said.
“A lot of that is because we do have a very seasoned group of people,” he said.
Sharples founded HomeAway in 2005. It is a vacation rental marketplace that matches homeowners with property managers and travelers interested in renting a home.
“HomeAway was a very big idea to take a huge market and try to consolidate it on a worldwide basis,” Sharples said.
The idea came to Sharples on a vacation. He had just finished with another startup IntelliQuest Information Group, a supplier of marketing data and research to Fortune 500 technology companies. He decided to take a few years off and travel around the world with his wife and three kids.
“We like to stay in houses more than hotels,” he said. “It gives us a lot of space to run around.” But finding properties in Southern France and Italy to lease was not easy. He had to find property managers and make arrangements with each individual.
“As an entrepreneur, I’m always trying to figure out what’s the next thing,” Sharples said. That’s generally a problem he encounters daily or something that irks him. The vacation rental marketplace was a problem that needed a better solution, he said.
“It just kept nagging at me why wasn’t there an Expedia for vacation homes?” So he decided to create one.
But he drew from his experience and his failures at other entrepreneurial ventures. Like the time he borrowed $1 million from some venture capitalists to corner the used car market by creating massive events at football stadiums around the country. He built an enormous structure in San Francisco.
“The day we opened a freak storm and tornado blew in with 75 miles an hour winds,” Sharples said. “It just completely leveled the place. No one died. But a lot of cars got destroyed.”
“And long story short, I lost the first $1 million I ever took in about three hours,” he said. “I learned very quickly that you not only have to have a good idea but one that can be executed. You have to have a good plan.”
Investors are looking for a great idea combined with a terrific plan for execution, he said.
Since then, he’s had incredible paranoia about managing risk.
“I learned that day that I didn’t spend enough time thinking about risk,” he said. “I didn’t buy the right insurance policy.”
So when he started Homeaway, he thought a lot about managing risk. He wanted to find out who tried and failed at creating a home rental marketplace.
“Looking at competition is such an important thing,” he said.
Before putting the HomeAway business plan together, Carl Shephard and Sharples spent five months talking to everyone they could find about the vacation rental market. They knew nothing.
“We talked to customers. We talked to suppliers. We learned a lot of cool stuff,” Sharples said.
They also discovered that in 1999, Expedia bought the VacationSpot and paid a ton of money for it around $75 million. A year later it went out of business. So they hunted down Rich Barton, ex-CEO of Expedia, to find out why VacationSpot failed. They flew out to Seattle and met at a café with Barton and two members of his former management team. They told how they tried to turn the business into a hotel business. Within a year, the company was gone. None of the customers wanted to deal with that kind of a model.
“Customers in this business preferred a marketplace model because they were dealing with their personal homes and personal possessions,” Sharples said. “They wanted to talk to the people they were renting their houses out to. Travelers wanted to talk to the owners too.”
“It was a business where the conversation was really, really important,” Sharples said.
“The best model for our business was a super, super boring model. It wasn’t sexy technology. It was a marketplace model bringing together buyers and sellers.”
Since launching, HomeAway has raised $405 million in private funding and acquired 17 websites. The company recently went public and has a market valuation of $3 billion.
Business is about game theory and planning for the future, Sharples said.
“When you introduce your company, five competitors may react to it. Some may over react to it. Venture capitalists may react to it,” Sharples said. ““This is a great time to be an entrepreneur. There’s a lot of money out there. But I’ve never seen such a fast follow market.”
For example, about 18 months after Groupon launched, it saw 100 competitors spring up, Sharples said.
Sharples started HomeAway when he was 44.
“There is no way if I started the company in my 20s or 30s, the company would be as successful,” he said.
Age and experience play a big part in creating a successful venture, he said.
“The stuff that you messed up makes you good,” he said. “The lessons you learned in life.”
Sharples advised new entrepreneurs to surround themselves with as much experience as possible.
“It’s really critical when you’re a young company,” he said.
Also, it’s important to hire people to complement your skill set, he said. Also, investors want to see humble entrepreneurs.
“It’s OK to say you don’t know everything,” he said.
At the same time, you have to be a little cocky. You have to show your passion. You have to answer the question “What’s your higher purpose?”
“One thing I love about our company is it’s a travel business. It makes memories. It’s about happiness. It’s about making people money,” Sharples said. About 600,000 people transact between $7 billion to $10 billion in revenue on HomeAway, he said.
“What is that higher purpose? What are you aiming for long term,” he said. “If you don’t have that passion, you won’t attract investors. It’s not just about the exit strategy and how are you going to make money.
There are a handful of high profile companies that get funded with lots of money and they haven’t figured out how to make money. That isn’t the real world.
“You have to know how your business is going to make money,” he said.
Video courtesy of Capital Factory:
What do Foursquare, Twitter and Foodspotting have in common?
They launched or gained major traction at South by Southwest Interactive in Austin.
The SXSW conference has become a magnet for high-tech entrepreneurs looking to get attention for the next big thing. Last year, dozens of entrepreneurs climbed aboard startup buses to code and create companies on the way to the show.
The startup fever runs red hot at SXSW. And that may be why at the next show SXSW will host the SXSW Startup Village from March 9 through March 14. The event will feature “SXSW Accelerator, panels, meet ups, lounges, pitch events, and mentoring and coaching sessions,” according to SXSW.
“By bringing these individuals together under one umbrella we hope to create a heightened awareness of this unique community during SXSW Interactive and SXSW Music, as well as more opportunities to educate, collaborate and network with fellow attendees.”
And in case your startup needs a little insight into the venture capital process, check out this video.
About a year ago, Ilene Haddad, started the first BlogathonATX because she wanted to meet other bloggers and learn from them.
“I’m not a good or consistent blogger,” Haddad said. “I was looking for accountability.”
Apparently, a whole lot of other Austin area bloggers wanted to network with others too. The first BlogathonATX sold out within a few days, Haddad said.
“It exploded overnight,” she said. “Obviously I wasn’t the only one that needed a little help.”
Haddad, a graphic designer for 20 years, has blogged for the past 2 years.
“I love to write so much,” Haddad said. “ I just started to write about all sorts of things. It’s my take on day to day stuff.”
Her blog has benefitted from the community that gathers at BlogathonATX, she said. The first event, held in August of 2010 sold out and so did the second event, held last January. The third BlogathonATX takes place on Saturday, Oct. 1 starting at 9 a.m. and running until 9 p.m. at Link Coworking and only a handful of $60 tickets remain, she said. This time, Haddad is expecting more than 100 people, up from 60 at the last two events.
“People can come and blog,” Haddad said. “We have a tech support room. For people who are new to blogging, they can come and get that help. We bring in a few experts in various fields and we have roundtable discussions.”
The event is very collaborative with lots of open discussions and unstructured time, she said. And the snacks are plentiful. She’s also looking for sponsors for the event.
“We have tons of food,” Haddad said. “It’s mostly very casual. A lot of really good stuff comes from the unplanned.”