Climate change modeling and skepticism

Reno, Nevada is a sportsman’s paradise. Twenty minutes from world class skiing, and thirty minutes from Lake Tahoe. It is hard to imagine a more convenient place to live for winter sports, summer sports, and almost all of the amenities of a city. And if more is needed, SF is a quick 3 hours away. But there is a fairly significant threat to this lifestyle – climate change. I have only lived in Reno for two winters, but it is pretty clear that the Sierra is starving for snow. I am hopeful that the coming El Nino will help end this miserable west coast drought. But even that will be a temporary event. It seems that drought and fire may become the new norm. In addition to the lack of snow, the lake is low and the Truckee River flow rates are falling.

And by climate change standards – these observations are not so bad. It gets worse as you get closer to the poles. The changes observed in Alaska, for example, are significantly more dramatic, with temperature increases far exceeding the average 1 degree observed globally. Is this surprising? Of course not! There is no debate. Burning fossil fuels makes carbon dioxide. Carbon dioxide absorbs IR radiation. The surface of the earth absorbs solar radiation and emits IR radiation. So if there is more stuff in the atmosphere that absorbs IR radiation, then the earth absorbs more energy than it emits, and its equilibrium temperature increases. Basic stuff.

Unfortunately, it gets more complicated. Along with carbon dioxide, burning fuel also increases the concentration of aerosols (small particles) in the atmosphere. These particles tend to scatter solar radiation back out into space before it is absorbed by the earth – thereby causing a cooling effect. This has reduced the actual global temperature increase from what was expected from the observed increase in CO2 concentrations. And even worse, it is impossible for scientists to quantitatively predict the effect of aerosols because 1) particles are not uniformly distributed around the globe, and 2) light scattering off of particles depends on their shape and chemical composition. Some particles even serve as “cloud condensation nuclei”. So increased particle concentration means more cloud droplets, which in turn means brighter clouds, smaller cloud droplets, and less precipitation.

Some particles – like soot – absorb solar radiation, increasing the rate of warming. Soot particles have been observed in Arctic and Greenland snow, causing the snow to melt faster. Decreased snow cover leads to increased absorption by the ground, which leads to increased warming. This increased melting also causes methane to be released from permafrost – which is an even more potent absorber of IR radiation – causing increased warming. These “feedback” effects are even more difficult to model because they are highly non-uniform.

Here are some more complicating effects. Increasing temperatures makes more water evaporate. Water itself absorbs IR radiation in the atmosphere, further increasing warming. Also, increased global temperature shifts the frequency of the radiation that the earth emits, which in turn will change how much is absorbed by atmospheric gases. Ocean patterns will change because melting ice changes local salinity levels, which effects ocean water density. These changes in ocean patterns lead to changing weather patterns. Some scientists predict a weakening of the jet stream – which would lead to increased penetration of Arctic air into the mid-latitudes (i.e. the famous polar vortex events in the US). And if a large volcano erupts, the earth cools temporarily for a year or two. Etc., etc., etc.

The bottom line is that global climate modeling is a very, very difficult thing to do. Scientists who do climate modeling make different assumptions and come up with different scenarios. This makes it easy to close your eyes and plug your ears, and say “blah blah blah, I can’t hear you, global warming is a liberal myth because I had to wear a jacket yesterday blah blah blah”.

All I know is that there is less snow in the Sierra, and it is seriously affecting my ability to ski.

Technology startups and intellectual property

One of the first questions that an investor asks a technology startup is: have you protected your intellectual property? Of course, this means: have you filed a patent, or do you own an exclusive license to a patent? The implication is that you and you alone can commercialize the technology, effectively creating a barrier to entry for everybody else. On the surface, this sounds simple. First, you get an idea. Next, you document the idea clearly. Then, you verify that it has not been documented before. Finally, you pay the patent office. And voila, you own the idea! Nobody else gets to make money off of your idea.

But it is not simple at all. As one might expect about any process in which gobs of cash are at stake, there is a lot of gamesmanship and strategy involved. Since the game involves lawyers, it is an extremely expensive game. Therefore, you have to be able to pay to play. If you can’t pay, you lose. Even if it was your idea in the first place. I am quite certain that Apple knew that Bose was going to sue Beats for patent infringement before they decided to make Dr. Dre a billionaire. I am certain that Apple took the expected settlement costs into account when deciding on an acquisition price. They have been around this block many times before – most recently, with Samsung.

A patent is not really a solid barrier. Patents can be circumvented. Nuances can mean everything. And if there is enough of a case, it will go to litigation. In this case, the players with the most money (and of course all of the lawyers) win. So what does a patent really mean? It can be speed bump – gently dissuading other small fish from playing in your pond. It can be a smoke screen – making competitors think that you are working on something completely different. For a startup looking for an investor it is simply a box to check.

In the end, what really matters is the people – not the patents. The team will make the company a success. The most obvious reason for this is that continuous innovation is key. Rest on your laurels, and you will be surpassed. And if a key technology is that important, a patent is not always the best option. Because, a good team can keep secrets. And unlike patents, secrets do not expire.

Note Soup: The greatest sloppiest guitar players

Although many have compiled a list of the greatest guitar players of all time, I figured I would add my two cents. Why not? First of all, I don’t think it is useful or even possible to rank guitar players the way Rolling Stone does it. There are too many attributes that go into making a guitar player great. Some players are innovative. Some are technically proficient. Some play with feeling. Some are distinctive. Some are great songwriters or singers. Some play great rhythm. Some play great leads. The list of attributes is endless.

Although a minimum level of technical skill is necessary, there is not a very strong correlation between skill and greatness. Some of the sloppiest players were amazing rock players. The epitome is Led Zeppelin’s Jimmy Page. The riffs were amazing, and many of them made the song. But most of the time, the notes that Page would cram into a guitar line tripped over themselves and created a soup that simply cannot be replicated by anyone on purpose. The main riff in “Hot Dog” and the guitar solo in “Heartbreaker” are good examples. A far cry from the technical perfection of Van Halen’s “Eruption” and the countless shredders that turned guitar into a sport throughout the 1980’s.

Another example is Angus Young of ACDC. When he played a note, bent a string, or pinched a harmonic, the sound could give you chills. And once the moment enveloped him, Angus’s fretting hand seemed to move faster than his picking hand. The resulting mess created a soundscape of string vibration, fret noise, pick noise that somehow fit the experience perfectly. A clean and technical solo would not have worked.

Joe Perry of Aerosmith exhibited a similar tendency to squeeze notes into a solo only to get completely lost halfway through. The notes were clean and the bends were in tune. But the tempo barely hung on and the guitar melody was often out of phase with the tune. His genius, however, was how he got himself out every time. By the end of the solo section, the guitar somehow barely avoided oblivion and rejoined the rest of the group so perfectly that it all seemed planned.

None of it was planned. Page, Young, and Perry do not write solos. They wing it. And there is something so exciting about taking the unplanned risk, going out on the ledge, and seeing how you get through it. It makes for great art, and the results can be magical. Perhaps Jimmy Page’s most famous solo – the one in “Stairway to Heaven” – was famously completed in one take. Not a flawless one. But a perfect one, nonetheless.

Riding on Tesla’s coattails

This past weekend, my startup Dragonfly Energy was featured in the Reno Rebirth section of the Reno Gazette Journal. The story was picked by USA Today, where the headline read: “Tesla gigafactory race brings out Nevada innovators”. This demonstrates the excitement that Tesla has brought to the region by simply announcing Reno as a potential site. On a more personal level, I am ecstatic that my picture got delivered to every hotel room in America, and I am pleased that a spotlight was shined on Dragonfly Energy, and on Reno – a hidden jewel that I am convinced will one day become a hub of energy and technology. As I was quoted in the story, I would love to be involved if Tesla were to decide to locate the gigafactory in Reno. However, I do realize that Tesla switching from Panasonic to a completely new manufacturing process is not a likely scenario.

The biggest factor in Tesla’s decision is likely which state will offer the largest tax incentive. And unfortunately, Nevada is not likely to compete against Texas in this regard. But Reno has much to offer for tech companies. I chose to settle down here for a lot of reasons. Because I love to ski. Because Lake Tahoe is the most beautiful place on earth. Because the mountains are gorgeous here. Because it is a great place to raise kids. Because real estate is affordable. Because of the Truckee river. And because of all of these reasons and more, I believe that any growing tech company will be able to attract top talent to the area.

A small battery manufacturing company can grow in a controlled fashion. In fact, I believe that, with the right streamlined process, battery manufacturing can be done inexpensively without economies of scale. This is the goal of Dragonfly Energy. And when the market develops, scaling will rapidly follow. So whether or not Reno lands Tesla’s gigafactory, Reno can attract tech companies by continuing to support its local talent and to spread the word to attract the innovators – not only the behemoths. And in that regard, I am extremely grateful to RGJ for the press, and to Tesla for helping that story go national!

Vetting by Credentials

Any new risky endeavor – an investment, a new hire, a move – requires some sort of vetting process in order to mitigate the risk and assess the likelihood of success. When deciding whether or not to invest in a completely new technology, investors tend to seek third-party validation from experts in the field. This is a non-trivial process, because selecting the right “experts” also requires some sort of vetting process. In the end, unless a personal connection exists, the vetting of individual people for a new job or task or to simply serve as an expert involves an analysis of credentials.

So what are these credentials? The most commonly used is the last school attended. This focus on school has led to a wide disparity in the price of a college education. Who will be hired first? A Harvard graduate? Or a Cal State graduate? The reality is that the identical information is transferred from professor to student regardless of who issues the diploma. But the damaging aspect is that the Harvard graduate is generally the one who has the money to pay for that particular degree. Any way you look at it, this is a “pay-to-play” system.

This article by Danny Crichton discusses the realization in Silicon Valley that the credentialing model is flawed. Some executives are actively trying to reduce the impact of the school name or even college attendance. Peter Thiel’s focus on the education bubble and his established scholarship for college dropouts is one example. I definitely do not agree with Thiel’s premise that a college education is detrimental. This is especially true in the energy space, in which physics, chemistry, and math fundamentals are far more important to innovation than in the software space. But there needs to be a fair vetting mechanism that directly assesses an individual’s capabilities – not who they know and where they studied. In the end, this will benefit everybody.

On the Verge of a Cleantech Boom

Cleantech was a tremendous bust several years ago. Solar panel technologies crashed and burned. This was because of the focus on thin-film solar cells, while the cost of silicon rapidly dropped. Energy storage technologies went bankrupt, including those that managed an IPO. This happened because, while giant Li-ion battery manufacturing were being built, the market never developed due to the high price of the batteries. With the exception of Tesla, whose stock is entirely reliant upon its growth potential, EV companies did not fare much better. However, there is increasing consensus among investors and energy journalists that we are on the verge of cleantech boom. This optimism stems from a combination of historical perspective and expected demand.

Historically, the parallels can be drawn with the dot com boom a decade ago. Remember that this boom, which occurred in the mid to late 2000’s, was immediately preceded by an epic bust. The original boom of the 90’s led to the infamous “dot com bubble” that burst in 2001. During the bubble, investment into random and dubious ideas for new websites flowed like water. What happened during the bust is that the unwise investors and the less than stellar ideas were weeded out. In the resulting vacuum, Google, Facebook, Twitter, etc. all flourished. A lot of folks got rich, and perhaps this is leading to another bubble (how much did Yo raise?).

It is apparent that cleantech is in a similar place – post-bust. Investors are far more careful, and the likelihood of success is increasing. This is partially due to the weeding-out of ideas, but also due to the expected demand for cleantech.

As the earth continues to sizzle (and a new El Nino on the way), climate change is coming back into the general consciousness. But that is only part of the story. Ultimately, demand is driven by cost, we are very close to cost parity with fossil fuels. The drop in the costs of solar and wind, and the increasing recognition of the societal costs of burning fossil fuels, is making renewable energy attractive from a purely economic (and not just a tree-hugging) perspective. Cost is the game-changer. And change will happen quickly!

Nano vs. Cost

Nanotechnology has been popular science since the nineties. The sudden realization that certain structures at the nanoscale have exceptional properties opened the floodgates of investment and government grants. It started with buckyballs; continued with nanotubes, nanoribbons, nanopillars, etc; and now molecular sheets (like graphene) are all the rage. For a while, any idea that didn’t have the prefix “nano” was not a fundable idea.

From a scientific viewpoint, there is no doubt that these nanostructures are very cool. They can be structurally strong, highly conductive, highly transparent, etc. It is no wonder that scientists were excited to introduce these materials to the world through mass production and mass incorporation into everything from televisions and solar panels to carbon nanotube tethers to the moon (yes, that was proposed). There was, and still remains, one problem: cost.

Many energy devices, including batteries, fuel cells, and some types of solar panels require very high surface area materials to perform well. In the specific case of Lithium ion batteries, the materials that comprise both the positive and negative side of the battery perform better when they are made of very small grains – nano-sized grains. And so, scientists continue to work on better materials that are made of nanotubes, graphene sheets, nanowires, nanopillars, etc. On the small scale, these materials all present great promise. But scaling up presents production and cost challenges that make these materials non-competitive compared to the current state-of-the-art.

This research needs to continue, since eventually we will figure out a way to make these materials cheaper. But for now, cost needs to be the primary focus. The technology for renewable energy and storage exists. Solar panels are extremely cheap now – not because of fancy new materials, but because of a renewed focus on conventional silicon technology discovered half a century ago. The current bottleneck – energy storage – need not be solved by nanotechnology. The focus now needs to be on making things cheaper, not fancier.

A Contrast in Weekends

I spent my twenties and thirties…OK now into my early forties, playing guitar in rock n’ roll bands. No matter what I was doing at the time – going to school, working in companies, teaching in colleges, raising kids, whatever – that has always been a constant in my life. I guess it is my escape. My yoga. Since I lived in Los Angeles most of that time, I spent a lot of time playing the Sunset Strip. The Whiskey, the Roxy, the Troubadour, the Key Club…I’ve played them all, with all sorts of bands. It’s always an experience. But it’s been a while. About 4 years since I last played the strip.

So it was a very nice surprise to have been invited down at the last minute by one of those bands to play at the Viper Room last weekend for a (I guess it would be called “reunion”) show. Of course, I didn’t hesitate to grab my guitar and head down to Hollywood for the night. It had been a while since I played with that band or even heard the songs. But the show kicked ass. The crowd loved it. I was never worried. Never nervous. This is something I have been doing for so long, it just felt natural. Easy.

Fast forward to this weekend. Dragonfly Energy is a semifinalist at the Cleantech Open in San Francisco. I am once again pitching the concept of cheaper battery manufacturing to investors. Unfortunately, I need slightly more than the price of a Viper Room ticket. For whatever reason, this performance is far more difficult. It really shouldn’t be. I have been pitching far more frequently than actually playing guitar. And the pitch is much shorter than a show. And the rules are clear: I just need to explain what I am selling, why I am selling, to whom I am selling, who else is selling, and why I am better than they are. Seems simple enough. But the feeling is far different than strapping on Les Paul and playing without any rules at all.

Fortunately, I am not alone. In fact I am really better off. The Cleantech Open consists primarily of scientists and engineers selling their hot new technologies to investors. And scientists and engineers, for the most part, hate talking to people who are not scientists or engineers about their hot new technologies.

The contrast between these past two weekends is meaningful to me. In order to move forward in the world of technology, one must actually step out of the laboratory and get some perspective. Technology is great, but eventually you have to give people what they want – whether customers or investors. And that means getting out of your element, and performing in uncomfortable situations.

Room in the Middle

I brought my family to food-truck Fridays in Reno a couple of weeks ago. We biked along the Truckee River, enjoying the views and vegetation. When we arrived at the park, the food and drink were fantastic. There was a big crowd. Kids were on the playground and running in the open spaces. A wonderful and completely off-grid experience. A great evening. The only unpleasant aspect of the experience was that generators were lined up in the field behind the food trucks. They were loud, dirty, and just a general annoyance.

The same may be said for any outdoor event requiring some type moderate power source. This includes many activities at Burning Man – which ends up being a mass of generators to power lights, amplification, and art displays. It seems to me that this is an ideal and completely untapped application for high-energy-density batteries – such as Lithium ion batteries.

Historically Lithium ion batteries have been used for small power applications – like cell phones, laptops, and power tools. Over the last couple of years the technology has leap frogged into hybrid and electric vehicles. There is a lot of room in between. This offers the potential for a large number of moderate-power niche markets. At Dragonfly Energy, we have identified RV’s and boats as perfect deep-cycle applications for Li-ion batteries. These markets are currently served by lead acid batteries, which are heavy, toxic, and do not very long. This is a pain point that Li-ion batteries can solve now.

In general, off-grid amplification, which would serve events ranging from barbecues to large music festivals could be entirely accommodated by solar panels, Li-ion batteries, and high efficiency devices. This solves the issues caused by generators and lead acid batteries, and allows for a leaner and greener experience.

An Introduction to Dragonfly Energy

In my last blog post, I argued that cheap batteries (and energy storage, in general) represents the bottleneck to the mass incorporation of intermittent energy sources both on and off the grid. From a business perspective, the winner in the race to cheap energy storage will be the first mover into a trillion dollar domestic market. That is why, over the last two years, I have personally focused on the problem of manufacturing Li-ion batteries.

Although Li-ion batteries have only been around for a few decades and the chemistry has evolved continuously over this period, the manufacturing process is old and archaic. It is messy, time-consuming, labor-intensive, and involves a nasty solvent. In my view, the key advancement in this field will occur through the automation and streamlining of the process. My startup, Dragonfly Energy, is actively developing my patented process that will do just that.

So, I have an idea, I have a patent, I have a lab, I have some proof of concept, and I have assembled team. What I don’t have is cash. So the million dollar question for me is: How do I get a million dollars (or two)? Government grants? Angels? VC firms? We are actively working on all of these options. That is the conventional way to go.

But as we wait, we are not idle. What if we can establish a niche market now? Dragonfly Energy is actively importing Li-ion battery packs for distribution to early adopters in the RV and marine markets. Between cellphone batteries and electric power plants, there is a lot of room in the middle.