On Creating Deeptech Confluences: mobilizing private capital into ventures for humanity (Part 4)

The Northeast — A Region of Confluence Champions

This is the fourth of a four part series On Creating Deeptech Confluences. The work is based off my research & masters thesis at the MIT Sloan Sustainability Initiative. This post dives into the role and growing need of Confluence Champions.

Introduction

This post builds off post 1, post 2, and post 3 and is the final part of this Deeptech Confluence series. Here we look at the peripheral yet pivotal players of the Confluence that have not been mentioned so far: the Confluence Champions. These groups and individuals are essential in bridging together entrepreneurs, investors, and policymakers into a cohesive ecosystem.

The previous posts have highlighted various best practices for each Confluence stakeholder to push forward technologies from lab to market; this post however simply highlights what Champions do and look like in order to encourage others to do the same. In particular, we focus on how Champions network and shape the story of their Confluences.

Champions: networking and shaping the ecosystem

Group Champions

If entrepreneurs are the bedrock of any Deeptech Confluence, investors are the fuel that feeds the fire, and policymakers are like the wind that kindles (or extinguishes) the flames, then Champions are like the gravity keeping everything together. Except unlike gravity, Champions can exert variable force in unifying their Confluences — some have a stronger presence than others.

The map below from the US Cluster Mapping project shows the extent of Confluence Champions across various sectors of the economy. A couple hundred Champions are pushing novel science forward across manufacturing, pharmaceuticals, energy, and more.

Upon quick observation you can see a large quantity of Champions in the Northeast, where a wealth of initiative makers are advancing deeptech in the region. These are groups that are connecting and rallying their entrepreneurs, investors, and policymakers together into unified ecosystems.

Economy Wide Confluences

Take for example the Northeast Clean Energy Council (NECEC) — a nonprofit in Boston that supports the policy, workforce, and innovation demands of the regional clean energy economy. They have almost 140 members and are backed by a range of multinationals and experienced law firms. Modeled after the biotech group leader — MassBio — NECEC has played a big role in pushing forward the northeast to become a clean energy powerhouse.

You can look at their timeline to see this in action. Since their founding in 2006, the northeast has:

  • Created leading companies like EnerNOC, Digital Lumens, Next Step Living
  • Attracted leading companies GE, Enel Green Power, Schneider Electric USA
  • Created innovation powerhouses like Greentown Labs, NYC ACRE, MassChallenge
  • Created financing powerhouses like the Connecticut Green Bank and MassCEC
  • Created 323,500 clean energy jobs at about 1.5x the pace of the economy
  • Lifted MA, RI, VT, CT, NY into the top 10 energy efficiency states

NECEC’s role in this success has been through a combination of policy advocacy, startup mentoring, corporate strategic relationship building, and ecosystem event organizing. Put another way, through these events NECEC has networked together all the key stakeholders of the Confluence, and hence shaped the overarching storyline of clean energy in the region.

Individual Champions

Networking and shaping the ecosystem isn’t limited to groups; individuals have a profound impact on the Confluence as well. Though these individuals are more limited in their breadth than groups like NECEC, they make up with depth of personal connections which make decisions happen quickly.

Take for example Margit Wennmachers in the Bay Area Confluence. She works at the premier VC firm, Andreessen Horowitz (a16z), and has single-handedly shaped the story of tech in the bay area and her firm’s role within it. She’s done this by giving a voice directly to tech. At first she ran her own PR firm but then she was quickly recruited to a16z around 2009 after successfully shaping the narrative around the VC firm’s investment in Facebook. Her tactic: don’t rely on the press and instead give your thoughts directly to the market. Ever since she has acted as a “router” in Silicon Valley’s tech scene — giving a16z access to some of the best deals available while also tying together seemingly disparate investments into a unified story of how “software is eating the world”. The result is all of tech knows a16z, and they all think like them too.

More closer to deeptech, there is Mitch Tyson in the Boston Confluence. He is involved in practically everything clean energy. He went from being a deeptech CEO to one of the most active Champions in the Confluence. His involvement ranges from Greentown Labs, Acadia Center, Mass Tech Collaborative, Venture Cafe, to NECEC (where he is a co-founder). Plus he invests with the Clean Energy Venture Group, teaches at Brandeis Business School, and is a board member or adviser to half a dozen deeptech startups. His influence covers the entire spectrum of the Confluence stakeholders and even includes other Champions themselves (NECEC). The fact that he is a meta-Champion of sorts highlights his extensive purview over the region’s clean energy economy. The result is the northeast’s status as a regional clean energy powerhouse like California.

In the end, Margit and Mitch are only two examples of high-powered individual Champions in their Confluences. There are also many others who have successfully advanced their ecosystems with profound impact. It is no easy feat, but these are individuals who are clearly dedicated to their ecosystems.

Conclusion

This series has aimed at painting a picture of the Deeptech Confluence. Deeptech is broad, multi-faceted, and not easy. However it is essential to advance new technologies that provide promising solutions to our most hard-pressed problems. That is why the Confluence is important: it is the societal engine by which we can tackle these problems with a strong force. By mobilizing private capital into technologies that can make the difference.

This series has also aimed at showing how we can maximize the Confluence’s strength by fulfilling our roles within it — whether as entrepreneurs & employees, investors, policymakers, or champions. Each stakeholder has certain actions they can take to increase the chances of deeptech success in their realm of involvement. When the sum total of deeptech companies and private capital increases, so does the strength of the Confluence. Everyone plays an important and contributing role.

Lastly, this series has implicitly shown the need to think long-term with deeptech. Commercialization from lab to market can take years, plus there are many traps along the way in the “Valley of Death”. Not every technology is meant to be commercialized, nor commercialized when we think it should be. But what we can do is maximize the chances of successful entry into the market, and eventual value creation for all stakeholders in the Confluence. It inevitably takes grit and patience.

Further research in this field is highly encouraged since we have just begun to scratch the surface. Feel free to contact me or the MIT Sustainability Initiative if you are interested in exploring further.