Last week, we flipped the script and invited our Cohort X entrepreneurs to grill the VC. What did we learn?
Solving the climate crisis is the greatest economic opportunity of the 21st century. It’s why our portfolio companies are seeing unprecedented levels of market success while working to solve our knottiest climate challenges. And it’s also the message of a new book by John Doerr and Ryan Panchadsaram called Speed and Scale: An Action Plan for Solving Our Climate Crisis Now.
Informed by interviews with nearly a hundred climate pioneers, including our CEO Dawn Lippert and Board Chair Laurene Powell Jobs, the book lays out a comprehensive and measurable action plan to accelerate a sustainable future. It shows that there is plenty of reason for hope that we can get to net zero in time.
The richest person in the world right now is a clean tech founder!
It all starts with a number: 59 gigatons. That’s the total yearly emissions standing in the way of net zero. But beyond revealing that the climate problem is a mind-bogglingly big one, that number doesn’t tell us much about how to solve it. That’s where the book’s objectives and key results (OKRs) come in. OKRs are a powerful tool to turn ideas into achievements by tying ambitious goals to measurable results.
Speed & Scale identifies 10 objectives — ranging from Electrify Transportation and Decarbonize the Grid to Protect Nature and Fix Food — and dozens of associated key results that account for each of the 59 gigatons of emissions. It’s one thing to know we need more electric vehicles, for example, but how will we know if we’re on track to slash enough transportation emissions by 2050? One key results shows we can zero out 5 gigatons if 50% of the miles driven on the world’s roads are electric by 2040, and 95% by 2050.
“If that doesn’t happen, we’re still pumping fossil fuels,” said one of the book’s coauthors Ryan Panchadsaram in a recent fireside chat during Kickoff Week for Elemental’s Cohort X. Ryan, who is also advisor to the John Doerr and previously served as Deputy CTO of the USA, discussed the book’s approach to designing a climate action plan around measurable results, how entrepreneurs play a role, and much more. Here are some key takeaways:
1. What’s OKR priority #1? If we had to rally all of our efforts and money into tackling one objective first, Ryan suggested going for the biggest target: decarbonizing the energy going into the grid. Not only does that address the largest share of emissions, at over 16 Gt, it also may be the most immediately achievable. “What’s fascinating about that KR (Key Result) is the amount of power that we have as community individuals, voters in our local cities,” Ryan said. “Our utilities do planned purchases of energy so this KR is incredibly addressable by just a passionate group of 5 to 10 to 15 people in every city across the country.”
2. The role of innovation is the quest to drive down costs, Ryan explained. While some may be willing to pay a “green premium” (up to a point) and policies can make those green premiums more affordable in the interim, the book outlines the specific cost targets that batteries, green hydrogen, carbon-neutral fuels, and other innovations need to hit. “Cost will always be the reality check that we face as clean tech entrepreneurs,” Ryan says. “Turn that green premium into a green discount so when people think about the right thing to do, it’s also the cheaper thing to do.”
3. Is the climate opportunity overhyped? Not at all, says Ryan, and not just because the climate impacts are just a fraction of what we’re going to see in the next decade and beyond. The sheer economic opportunity in zeroing out 59 gigatons of emissions is, if anything, massively underhyped. “Each one of those tons of emissions is someone’s revenue stream,” Ryan said. “We are in the business of creating alternatives to that.”
4. Make it a race. Applying an economic opportunity lens to the climate crisis can spur action by turning it into a competition. On a national level, countries will compete to own technology categories, as China and Germany did in the race to lead the solar energy sector during the ‘Cleantech 1.0’ era. “This is an all out race to who gets to be the clean nation first,” Ryan says. “And in that process I think what we’re going to see is some incredibly valuable companies.”
5. No more leaps of faith. Even just a couple years ago, Ryan said, this would have been a very different book. With the speed at which the climate and innovation landscape is shifting, and the number of success stories at our fingertips, we no longer need to rely on appeals to believe in the climate opportunity. Now, you can even look to public markets to identify real economic forces like Enphase, SunRun, and of course Tesla. “The richest person in the world right now is a clean tech founder!” Do proof points come any bigger?
Beyond Speed & Scale, we talked startup growth and industry trends with Ryan and our Cohort X entrepreneurs. Here are a few quick hits:
- OKR 1.5 is reducing emissions from planes by 0.6 GT, 20% of miles flown use low-carbon fuel by 2025 and 40% of miles flown are carbon-neutral by 2040. Can we start with emission mandates for private aviation?
- Microsoft, Stripe, and others investing in carbon removal are kickstarting an entire industry. Look for it to grow over the next few years.
- And, unsurprisingly, entrepreneurs are already thinking about a world post zero emissions. Let’s build toward a regenerative, healthy, living planet.
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