The Pacific Northwest boasts several world-class research institutions, making the region a hub for cleantech R&D. But how do you move from the lab to the marketplace, building a business around your new innovation? What government programs are available to help your startup gain traction early on? And what industry associations offer programs for entrepreneurs and advocate for cleantech companies large and small?
Full Transcript
Alexsandra Guerra: You’re listening to the Reversing Climate Change podcast by the team at NORI, the carbon removal marketplace. This is a show about the innovators and entrepreneurs developing solutions to climate change. Hello and welcome to the Reversing Climate Change podcast. I’m Alexsandra Guerra.
Ross Kenyon: I’m Ross Kenyon. Alexsandra is co-hosting with me for the first time. We asked in the podcast survey we sent out. People clamored for her. We’re happy to have her on. She’s been one of our most fun and frequent guests, but it’s been a while. So we’d like to add her to the group of co-hosts for the Reversing Climate Change show. Kristoff is producing. What’s it like to be over there, Kristoff? You look like a nerd.
Christophe Jospe: I’m learning.
Ross Kenyon: I’ll figure out how to keep myself quiet. That might be a challenge, but feel free to chime in like Paul. Today we have with us Tom Rankin of the Clean Tech Alliance. We’ve seen him around at events here in the Seattle area. Curious to learn more about what he does with regard to clean tech, what it is, what his organization does and supports. Tom, I don’t know if you know the drill, but we like to start with people’s story and how they got to this point. Why don’t you tell us a little bit about how you came to be?
Tom Ranken: How I came to be.
Ross Kenyon: Yes, in a very universal cosmic sense.
Tom Ranken: I was born in the mountains of Florida.
Alexsandra Guerra: In the mountains of Florida.
Tom Ranken: My family is from Seattle, but my father is career Navy, so we moved around all the time as kids and eventually ended up back here for graduate school and have been on the business side ever since grad school. Worked in banking, worked in biotech for a long time, and been doing this job now for eight and a half years.
Ross Kenyon: That is one of the most contained versions of a backstory I think we’ve had here. We’re going to have to drag it out of you, I think. Go ahead, drag. What is the Clean Tech Alliance and what would you say you do there?
Tom Ranken: So the Cleantech Alliance is really a straight over tackle trade association for companies that are working in this broad space we call Cleantech. And that mostly has to do with energy very broadly defined. We do the same things other trade associations do in a lot of ways. We advocate for our members. We have a very broad based membership and a broad based board. So we don’t advocate for everything. And the board wants to have a consensus when we advocate for some things. So things like the governor’s Clean Energy Fund has been something that we’ve been very much in support of for the last four, going on to the fourth allocation out of the capital budget this year, we hope.
We do a lot of events because people in the space are very outgoing, they’re gregarious, they want to be together, they want to know what’s going on, they want to network. And it’s really important from a business standpoint. I see people that are making contacts. People find jobs. They find customers. They find investors. They find collaborators. So just being in the same room, networking and learning about what’s going on is very important to the members. We do a lot of PR work, social media, website stuff. So we bring visibility to our members.
And we have a program for entrepreneurs, so very early stage individuals usually who have Deep expertise in their technology, but have never written a business plan, don’t know how to run a business, and we run them through a program where essentially we put them in the same room for a course of four or five months with people that have written business plans, have raised money, and get them up to speed on how to start a business up.
Alexsandra Guerra: And what is that called for our listeners who are interested in looking that up?
Tom Ranken: It’s called the Cascadia Clean Tech Accelerator, and we run it in conjunction with a sister organization in Oregon, So we have companies from all over the Northwest that apply and we run through one or two dozen companies per year. And it’s really been very, very successful for that very early stage entrepreneur.
Ross Kenyon: How would you say the Pacific Northwest fares in terms of clean tech? Is this a hub for it? We’re kind of in the middle of it. So it seems like there’s a lot happening here, but I suppose I don’t have a great basis to compare it against other areas.
Tom Ranken: Well, the short answer is yes. And the longer answer is the longer. We’ve been actually doing some research as of late, trying to understand the space better. So we’ve got a lot of innovation going on here. It’s just part of the DNA of this region. It’s something that didn’t exist when I moved here. The economy was all about Boeing and forest products and ag, and now it’s incredibly diverse with software, biotech, and everything else you can think of. So that’s part of who we are today. So that’s a big plus.
We’ve got fantastic research institutions in the region. We have three national labs that are within the multi-state region, Idaho National Labs, NETL, and the Pacific Northwest National Lab. Got great research institutions like the University of Washington and Washington State University that are really doing incredible stuff in this space. And a lot of support policy-wise. It’s just a great region for a lot of reasons. When we ask the people that we’re interviewing if this is a great region, they all say, yes, it is. But they have different reasons for that. So it points out that things are going well, but there’s other stuff we need to learn to understand this whole sector better and how to make it more effective.
Alexsandra Guerra: What are some of those reasons? I’m curious, the variety that you see.
Tom Ranken: One of the interviewees was some people down at Commerce who went on at length about how much for an area with such low cost electricity, our energy efficiency efforts are really leading the country in a lot of ways. So we’re just great at that. If you look at any aspect of research, I mean, we compare with anybody in the world. You know, the hydro backstop to what we have here for a generation of electricity. On and on, things like that. So individual things. If you look, for example, at aerospace, clearly we lead the world.
Boeing leads the world in how to create innovations in that space to make airplanes more effective, more efficient, and do the great things that we want to do in clean tech. So lots of answers. All different.
Ross Kenyon: I did that Boeing tour, the future of flight one or whatever, when you get to see how they’re building all those planes. I think it’s the biggest indoor space in the world too. Well worth it. Apologies to anyone at Airbus listening for us being partisanal. Is that what you say if you’re a partisan? It’s like artisanal, partisanal. I don’t know. Tom, to what degree is policy something that is very necessary for clean tech? Or in some ways, are these people you’re working with in so far as you’re working as a trade group, are they developing private sector alternatives?
Are these competitive? Are they collaborative? How does this work?
Tom Ranken: It’s a really good question. At the end of the day, what we need to develop is stuff that stands on its own in the marketplace. So the Policy makers in India that are contemplating how to provide electrical power, you know, right now when they do that, the rational place for them to go is coal. So when the economics of that are inferior to solar, wind, storage, etc. , then we’ve changed the world. So ultimately, we have to create things that stand on their own in the marketplace. Having said that, a lot of our members are early stage companies that are just getting started.
And about the hardest thing in the world to do is start a company that Build your technology and maybe even harder than that is to sell it for the first time. So where the government can step in and aid that process, it can be really, really important. I mentioned earlier that Governor’s Clean Energy Fund, they’ve created demonstration projects through that. So you see things like early stage battery software and batteries themselves come out of these companies that are deployed and working and sold for the very first time. Partly with state capital assistance to get that happening.
So those companies then have the ability, you know, small companies, very few customers can then go around the world and market their products and say, hey, you’re not going to be the first buyer of this. It’s actually deployed. You can come and see it.
Alexsandra Guerra: And how does that work that you have utility? It sounds like a utility pilot working with these entrepreneurs on these never before used devices when utilities are quite So what you said about the utilities, I think, is very true.
Tom Ranken: They want things that work. But what essentially happens through this program is the government, the state of Washington, pays about 40% of these combined projects. So the utility’s The entrepreneurs, the innovators, the national labs will be reviewing them to write reports about it. So a consortium of different organizations work together, and they go through a competitive process of applying to the state and the Department of Commerce for these grants, essentially. And when they win them, if they’re the best ones in the queue, then the state will fund a portion of that project.
So essentially, the state of Washington has helped to fund some of these. So the cost of the utilities and everybody else has diminished quite significantly.
Alexsandra Guerra: So we don’t have to go down this rabbit hole if you don’t want to, Ross. I’m just totally curious from like the process as an entrepreneur and I worked at the utility before this and now as an entrepreneur. How do they even create a proposal for a grant that is competitive with some of these larger vendors like GE or Schneider Electric to actually compete for this?
Tom Ranken: Well, to date, they’ve been very successful at it. And frankly, having some of those companies collaborating is not a bad thing. For example, there are some really good software companies, Demand Energy and Doosan GridTech. They’ve developed technologies here in the state that are really quite good. I mean, world-class products. And when you get these applications, the people know each other, and that’s part of what we do as an organization. I mean, these people are in the same room together, and they say, hey, what do you think about doing this? And they collaborate.
So they put together Terrific applications. And they’re all competitive, right? So the big guys can compete too. And at the end of the day, the best projects that win.
Alexsandra Guerra: Interesting. So you’re bringing them together, the ecosystem of the large players and the smaller just starting off entrepreneurs.
Tom Ranken: Yeah, we have about two-thirds of our members are small companies, 20 employers or fewer, and one-third are quite large. That includes Boeing and the big utilities and the national labs and the universities and so forth. So part of the deal is bringing everybody together so they can collaborate.
Ross Kenyon: I love it. Yeah, I quite like your comment from a few questions back about how these innovations need to be able to stand on their own economically. In this process of grant making and seeking either subsidies or quasi subsidies, how do you make sure that there isn’t a sort of Solyndra in the mix? Or is there a problem when government’s picking winners like this? Is it less bad than I might think it is? How do you negotiate that and avoid the political criticism that can derive from that?
Tom Ranken: Well, there’s two answers to that. Is it a bad thing? Politically, it’s very bad. And the fact that we still remember Solyndra from six, eight years ago was evidence of that. From an economic standpoint, you’re talking about really early stage technologies that are inherently risky. If you were a venture capital firm and scored one time out of 10, you’d be very, very successful. So personally, I don’t worry about that too much. We need to be trying new things that have a chance of winning. And that’s part of what the process is about.
Let’s prove it in the marketplace. If it works, great. If it doesn’t, we’ll go back and try the next one. So from an economy standpoint, I don’t worry about that at all. Not all these things are going to win.
Alexsandra Guerra: So who’s taking that risk? And I think you might see different entities willing to take that risk. What is your take on it? And who have you seen that?
Tom Ranken: Well, in the case of those Clean Energy Fund projects, the risk is split. So if the state’s putting 40% of the money in, that’s at risk. And the utility’s putting some money in, that’s at risk. The company itself, often these are life and death issues for the companies. If the technology does not work, the risk is shared. But the state of Washington is taking some of that risk.
Ross Kenyon: Sounds less risky given that it’s super early stage. I think if it was a more established company, there’d be a lot more grounds for the people that work there being politically well connected. Maybe there’s more possibility for things we wouldn’t like to see. But given that these are unfunded, is this maybe their first seed round or even pre-seed round amounts of money?
Tom Ranken: Well, it depends on the company, but in many cases, they’ve raised substantial capital to get to the point where they can, I mean, they’re not in the early stage, let’s create a battery for the first time. I mean, that’s been done. So the technology’s built, they have the engineering problems, you know, solved, at least to the point of having that first product out there. Now, what we’ll see, you know, as they’re deployed, we’ll find out in real world activity, you know, if there are issues with that, if there’s more engineering that’s necessary and so forth.
So it’s, you know, it’s not a thousand percent Ready to go bulletproof, but it’s pretty darn bulletproof by the time it gets to that point or they wouldn’t be funded to start with. It’s not a research fund, it’s a deployment fund, right? So there has to be a very, very reasonable chance for these things to actually work in the real world. And they’re competing against other things. So the state’s not going to throw the money in for something that has a whole lot of risk.
Ross Kenyon: I kind of want to do a little bit of a story time thing, Tom, since you’ve had such a good seat to observe and participate in all these trends. Where did clean tech start maybe when you started your career in this? And where do you forecast it going in the next decade or so? I’m sure the changes have been quite impressive since you’ve started.
Tom Ranken: Well, I started this job just as the economy was falling apart eight or ten years ago. Great time for an emerging sector, right? Yeah. Prior to that point, there were a whole lot of new companies and ideas and entrepreneurs and so forth. I think in retrospect, many of them didn’t have very realistic expectations about what created a business, right? So they were visionaries that were on a mission from God to stop climate change, not necessarily people that knew how to make payroll. And what we saw when the economy tanked was you can’t make payroll, the mission from God stops.
So those companies pretty much tanked. Investors also had really cold feet about the whole field, so we saw a whole pullback from a lot of that area, and the whole investment part has changed quite considerably from what it was years ago. The technology, though, the research and development has been extraordinary and continues to be extraordinary, basically because of the institutions we have here in the region working on it, like the University of Washington and Pacific Northwest National Labs and so forth. So we see a lot of people out there creating great stuff from an innovation standpoint, small company, hopefully going to change the world.
This research that I alluded to before has been very interesting because we may find out that even more impressive is what’s being done internally within the big companies like Boeing and Microsoft and Amazon and the rest of them. They’re very concerned about these issues and doing some great stuff.
Ross Kenyon: Kristoff, are you champing at the bit to say entrepreneur?
Christophe Jospe: You said it for me, Ross.
Ross Kenyon: Are there things you want to say that you’ve been taking a step back? Why don’t we be so kind as to extend the platform to you?
Christophe Jospe: Well, I’m kind of curious in how you define clean tech, Tom.
Ross Kenyon: Oh, thanks. That’s a hard question. Back to basics. Let’s do it.
Tom Ranken: Yeah, most of our members are doing something in energy broadly defined. So by broadly defined, that would include efficiency and construction, right? Building buildings that are more efficient. So it’s a very, very broad group of companies. Everything from stuff that would be obvious like renewable energy to, and we have one company that’s been really interesting to watch that came out of our accelerator program that’s into insect farming.
Ross Kenyon: For eating.
Tom Ranken: Well, originally that was the notion that the vision of the entrepreneur was, you know, for all the reasons of high protein, low resource going into insects, that she was very interested in that. By going through the program, some of these people that have built businesses before said, okay, who’s going to buy your bugs to eat? And there aren’t a whole lot of people in Seattle that create a big business around, you know, eating insects. But what there may be a big idea behind this is that you can get high protein animal feed through insects.
So the possibility is very strong that you can create animal feed at low cost with high protein. That could be a big idea. So that’s an example of something that’s completely out of the renewables area, but it’s a resource efficiency kind of play that we’re very enthusiastic about.
Alexsandra Guerra: I once had a friend who tried, we went out to a tequila bar and she tried to get me to eat a cricket.
Tom Ranken: Yeah? How was it?
Alexsandra Guerra: I didn’t do it. She ate the crickets. I just couldn’t. And for like an hour, the bartender and her kept coaxing me to do it.
Unknown speaker: You weren’t drinking enough then.
Alexsandra Guerra: No, I wasn’t. I definitely had to drive after, so drink responsibly. But I want to go back to Christophe’s comment and slide in there.
Ross Kenyon: Wait a second. I want to talk about crickets real quick.
Alexsandra Guerra: Wait. Okay. Okay.
Ross Kenyon: They’re good. I did it once in Mexico City and they’re quite good. You have some salt and some lime and it’s not so scary.
Alexsandra Guerra: That’s what people are saying. Like, oh, it’s good. It’s good. That wasn’t tequila.
Ross Kenyon: Yeah. That might have been involved too. I remember it was at Chapultepec, the big hill. But anyways, okay, sorry.
Alexsandra Guerra: Well, I think it all goes back to, you know, what we’re used to and paradigm shifts. So like, you know, eating insects is probably done. I mean, it’s done a lot around the world. It’s just not in my world.
Tom Ranken: Right. That’s very foreign to Americans. But, you know, it’s very common in some cultures.
Alexsandra Guerra: Yeah, shifting what we say.
Christophe Jospe: Don’t underestimate the power of social media influences and how fickle taste can be, literally, once someone thinks it’s trendy and hip to start eating cricket steaks. I wouldn’t bet the farm on it, but I wouldn’t be surprised to see this sort of thing take off.
Ross Kenyon: Some of my CrossFit friends are into the cricket flour and the cricket bars and stuff. Yeah, people swear by it. As a vegetarian, are crickets okay or no?
Alexsandra Guerra: I don’t care.
Ross Kenyon: I don’t care. Ladies and gentlemen, there you have a definitive answer.
Alexsandra Guerra: I think it’s really unfair. So first of all, thanks for calling me out now to all of our podcast listeners as the resident vegetarian. Not cool because I know everybody has different opinions, but like every label, they should be applied very, very loosely and everybody has their own take on what is okay and what isn’t.
Christophe Jospe: Or we should just be more pedantic because technically you’re a pescatarian person.
Alexsandra Guerra: This is true. I was vegetarian for a very long time and recently started eating fish. But anyways, let’s go back. You brought up a really good question, Christophe, which was how does Tom define clean tech? And so I liked your answer that it was broad. So would you consider, Tom, let me pitch this to you, is a technology that enables carbon removal and storage to clean up the atmosphere of excess carbon dioxide a clean technology?
Tom Ranken: Oh, absolutely.
Alexsandra Guerra: Oh, there we go. We’re clean tech folks. You’ve heard it here. Yeah.
Christophe Jospe: I like to see it’s more the enabling platform to it. If you’re a longtime listener, you’ve heard us massacre this metaphor multiple times, but we like to see ourselves as garbage collectors in a world that treats CO2 as garbage. And the value of a garbage collector is to show up to the... Yeah.
Tom Ranken: Where we’re really concerned in that area is the innovation process. How do you create the research? How do you take the research from the lab into the marketplace? How do you build businesses around that are economically sustainable to make that kind of thing happen?
Christophe Jospe: So... I had a conversation yesterday with someone who said a phrase I’ve come to dread, which is, this all sounds very interesting, Christophe. Let’s sign an NDA as the next step. And it’s just like, oh, God, do we have to? Yeah. Which maybe that’s where my interests lie. But truly, an idea is only as good as the execution of it. And in the pre-competitive space, it’s really important to put ideas out there for the consumption of others who might think about these ideas. So here’s a question for you, Tom. Yeah.
How do you consider the sharing of ideas in a pre-competitive space as it relates to clean technology? And does the government have a potential role to help foster the sharing of ideas so that they don’t get locked up in NDAs and intellectual property concerns?
Tom Ranken: So let’s start with the back part first. So the government in our society is very, very much in support of research, right? If you look at some of the things that the Yale Public Opinion on Climate Change surveys, like 85% of Americans support research in this field. And the government, I think, has a very legitimate role putting as much money as we can possibly advocate for in this very early stage of Let’s create the technologies. So those tend to be open, public, available for anybody to take a look at in many of these cases.
Ross Kenyon: You’re talking about just basic research.
Tom Ranken: Yeah, very basic research. So creating new technologies for batteries and things like that. Development of new kinds of solar panels and so forth. Once you get to the point of actually commercializing that, then the company doing that has to have some protection. You go out and make all these investments, get the product out on the market, and then the big guy down the block eats you and your investment for lunch. That’s not a good thing. So it’s a mixed bag. Some of it you do need to protect the investments that investors are making, particularly with early stage companies.
But on the early stage, I’d say as much public impact as we can get out of that is the best direction for society. And that’s not true for everything either. I mean, sometimes you see things like software development where you want it to be very, very public so people can create apps and add in. So it’s a mixed bag.
Ross Kenyon: Sure. And I’ve seen even people who get lumped into the libertarian category, like people like, I’m pretty sure I’ve seen Tyler Cowen argue that basic research is sort of like that and Center for Disease Control is sort of one of those things where government is best served doing that even if private enterprise is superior at creating businesses off of that research. Like government can have a role in the former, but should have a much lighter hand in the latter. So I could see that at least being plausible. That sounds good.
Do you guys have anything else you want to cover? We did crickets, so I don’t know how we’re going to top that.
Alexsandra Guerra: I did have a question earlier, which is, Tom, what do you think are some of the trends? Christophe did ask this, too, when it comes to clean tech, and what are the roadblocks that you see that we need to address today?
Tom Ranken: Well, one of the things we’re addressing in this research we’re doing, we’re doing a process of going out and interviewing people that have expertise in this space. And it’s a very, very broad space, as we’ve talked about before, to try to get a better picture. We’ve got a lot of companies starting. We’ve got a lot of established companies. But getting from small moving to big is very, very difficult in this space. So we’re trying to understand that better. We’ve seen things like battery technology. That’s been really interesting both on the software side and on the hardware side.
And that’s something that has promise, particularly in this region. There are lots of other technologies. I mean, anywhere you can throw a light switch, you can find an entrepreneur with an idea. So it’s a very, very broad space. The thing that’s going to be really interesting looking at this more is looking at the Boeings and the Microsofts. Because I think they really have made a commitment in many ways as part of their brand, their commitment to their customers, their commitment to their employees to make a difference. And in some cases you can go into some of these organizations and look at things like how they use energy and see amazing stuff going on.
So that’s something we want to understand better.
Alexsandra Guerra: Yeah. What are the most easily adoptable strategies that some corporations could adopt in their climate roadmaps?
Tom Ranken: Well, the thing you hear and see most is building efficiency. There’s just so much potential as a new stock goes up and buildings are being rehabbed to really radically reduce energy utilization. A few years ago, I went over to the Fred Hudson’s Cancer Research Center and technologies they’ve developed over there with their facilities people are just absolutely incredible. They think they’ve cut their energy bill by about 40%. That’s awesome. And that’s really significant. Not only is it a big research facility, but they’ve got, I think at the time, 700 or 800 freezers and refrigerators because they have to store tissue.
They have incredible clean air standards in offices and labs for research purposes. I mean, they have huge energy demands. For the cost reasons, because of the employee commitment, because their employee is part of their brand, they’ve done these things and it’s really beneath the radar. You don’t hear about this on the front page of the paper, but it really is amazing what they’re doing and virtually everybody else because it’s important to people.
Ross Kenyon: One of the clean tech trends that I’ve noticed is in many cases, the example you just gave will have multiple reasons to care about this beyond just some altruism for the planet or something like that. There are financial incentives that pull in the same direction. You can also attract better talent because you get to brag about how efficient and clean you are. So I think stuff starts to scale and move very quickly when you do have multiple reasons all pulling together.
Tom Ranken: Right. There are great business reasons to do that. I mean, at the heart of it, you’re reducing costs, right? So that’s kind of a no-brainer. So, you know, resource reduction, sustainability, there’s a lot of stuff that’s absolutely equivalent of that. But then there are funds, for example, social responsibility funds. So your access to capital may be better if you have a better profile. Companies are starting to report this on their annual reports. Their customers care. So far, you see companies that are now associating their brand with Which is really, really important, the value of any organization with doing things that are clean and green.
And it makes a difference in their culture. I mean, we heard this loud and clear in our interview over at Boeing, for example, that 15, 10, 15 years ago, the CEO said, this is part of what we want to lead the world in. And that’s part of what they do every day. They’re always thinking about how to get more efficient airplanes, new systems that reduce the cost of fuel. I mean, there are business reasons as well as cultural reasons they’re into that.
Ross Kenyon: That sounds great. I think there’s plenty of reasons to be optimistic. We try to keep hope alive. I guess you could say on the show and look for that silver lining. And it’s been good that stuff like that has been happening. And then also with energy production, it’s become cheaper and more competitive for wind and solar and other technologies. Nuclear may be around the corner. I don’t know. They always talk about how it’s around the corner, but I guess we’ll see about that. But yeah, thanks for being here, Tom. Is there anything we should tell the audience?
Where can they find your work? Anything you want to plug?
Tom Ranken: CleanTechAlliance.org. If you’re interested in being part of it, we’d love to have anybody who’s interested in moving their businesses forward and changing the world.
Ross Kenyon: Great. Thanks for being here. And then also we forgot to talk a little bit about it, but I think you may have heard the new intro music at the beginning and hopefully you are about to hear outro music. People have long been asking us, why does the show end so abruptly? What can you do about it? I think we’re going to have an outro now. Yeah. Yeah, I have no idea how good it is when you hear it, but we’re going to be working on it since we are recording this in the past relative to you, listener, in the future.
Thanks for doing this, Alexsandra.
Alexsandra Guerra: Yeah, thanks for having me. Thanks, listeners, for requesting me. Love it.
Ross Kenyon: We’ll do more of this in the future. And thank you again.
