Hugging Trees While Hugging Capitalism

Searching for the answer to the age-old question of “how to do well and do good” at Obvious Ventures

There are many things I want to get out of my summer as an associate at Obvious Ventures. To name a few:

Seeing into the future: As a huge sci-fi fan, it’s a thrill to not only see how we are transcending science fiction to science, but helping enable a slice of Roddenbery’s take on our future.

Dusting off the engineering degree: I’m still in a Whatsapp group with my mechatronics classmates, and I don’t have much to add to conversation these days on topics like “what’s the best oscilloscope to buy?” or “can you laser cut leather?” Excited to sound momentarily cool when I casually mention calculating drag on a flying car in week one at Obvious.

Super quads: At 18 miles a day, my commute to and from the office will be the longest daily bike ride I’ve ever had, and I’m hoping for some payoff more than an increased desire to eat.

The real opportunity I am looking for, however, is to see how we can use venture capital as an investment vehicle for sustainable systems.
It might look like I’m hugging a tree, but given that the Banyan tree is a top 10 attraction in Lahaina, contributing to Hawaii’s $10B tourism industry, I’m really just hugging capitalism.

In the summer of 2016, right before starting my MBA at Harvard Business School, Ben Gaddy, Varun Sivaram and Francis O’Sullivan published their paper on the underperformance of venture capital in the cleantech industry. It wasn’t news that cleantech venture wasn’t a shining exemplar of profitable returns, but it highlighted the severity at which the majority of portfolios missed their targets.

“Cleantech venture capital is dead, long live cleantech venture capital!” — Steven Lacey, GTM

The relationship of venture and the energy sector has been a highly debated topic, but I view that as more of an opportunity than a risk. Many VCs have left the space, and there are advantages to looking where others are not, especially with the right expertise and lessons learned from the past.

I saw opportunities firsthand while working in project finance in the energy and resource productivity space, where it seemed clear that there was a fit for venture in high-risk, high-reward technologies, particularly in non-infrastructure areas. The fundamentals of what made the industry attractive were still there: with finite resources and increased political and societal concern on environmental impact, successful companies would manage these risks, or innovate to solve these problems.

Paul Hawkins points this out quite clearly in Drawdown: while we obsess over energy generation breakthroughs, the largest climate mitigation efforts might be in HVAC, waste reduction, transportation, efficiency, and food systems. These also happen to sound like appealing investment areas!

Venture capital didn’t need to shy away from cleantech, it needed to evolve its definition and approach.

I was instantly drawn to Obvious as they have tackled this evolution head on. At the firm, sustainable systems include the industrial internet-of-things (bringing efficiency and waste reduction to traditional industry), smart cities, two-way grids, and agtech, to name a few. This summer, I’ll personally be exploring supply chain IoT and aquaculture, and if I’m especially efficient, a quick re-look at energy storage.

These segments all have brilliant entrepreneurs building businesses that can yield outsized financial returns and reach outside the traditional targets in cleantech, all while delivering extraordinary environmental impact — making them obvious world positive investments.