Winning in cleantech VC

bethuneBy Richard Bethune, MBA ’14

This article was written in response to a seminar given by Randall Ledford, PhD, Senior Vice President and Chief Technology Officer of Emerson Electric Co. in an EDGE Seminar on Oct. 9, 2013 at Duke University’s Fuqua School of Business.

After seeing the bodies pile up following the first big wave of cleantech venture capital investments in the 21st century, I believe that Randall Ledford and Emerson Electric’s technology transfer approach may be one of the few winning approaches.

After the dotcom crash, Silicon Valley moneymen poured billions into cleantech investing— possibly because it had the word “tech” in it. They looked for the quick 2-3x returns seen from Internet companies as carbon legislation and a new energy paradigm appeared to be just over the horizon. Many of their investments crashed and burned. Smart people do not engineers make. They simply lacked the technical sophistication to properly evaluate their investments. Perhaps more importantly, they were used to quicker returns on their investment from non-capital intensive investments. That’s not the energy industry. Cree still calls itself a start-up and it’s decades old. It’s not cheap to build many energy products, except perhaps demand-response software. In contrast, Emerson’s technology transfer approach to VC makes much more sense. Continue reading

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Purpose to profit: Considering next-generation retail platforms

brownBy Tatyana Brown, MEM/MBA ’16

This article was written in response to a seminar given by Terry Yosie, PhD, President & CEO of the World Environment Center, in an EDGE Seminar on Oct. 2, 2013 at Duke University’s Fuqua School of Business.

How can businesses leverage the nexus of evolving information technology, online retail, consumer personalization, social gaming, cause marketing, and purpose-driven brands? Our recent EDGE Seminar with Dr. Terry Yosie, President and CEO of the World Environment Center, prompted me to reconsider sustainability as business model innovation. With consumer goods, the next two decades may witness an evolution in corporate web retail platforms as a way to build brand loyalty.

We’re all shoppers: imagine you need a new shirt. You visit the website of your favorite brand or retailer and log into a personal account. The right-hand sidebar says the shirt you just picked will help an NGO that is collaborating with the brand to help farmers in India switch to sustainable cotton and support their families. Maybe you see green leaves or numbers estimating your (considerable) 2013 social purchasing impact. Perhaps it is holiday season. The site suggests other items based on past purchases, so you buy someone a gift. You’re glad to learn that the company is on track to meet its 2015 sustainable threads target. It feels good to support building local capacity through fair business.

This customer may be a niche segment, but it’s growing. In 2010 more than half of Millennials bought a product tied to a cause, as did two out of five Americans.[1] Continue reading

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Sustainability: Reducing risk is the reward

chowBy Dan Chow, MEM/MBA ’15

This article was written in response to a seminar given by Terry Yosie, PhD, President & CEO of the World Environment Center, in an EDGE Seminar on Oct. 2, 2013 at Duke University’s Fuqua School of Business.

Many companies have reached the point where they need to switch from a low-hanging fruit approach to sustainability and begin making changes that reimagine entire industries. Unfortunately, our current economic, political, and educational institutions are not geared towards creating that kind of shift in thinking. Our recent seminar speaker, Terry Yosie, did an excellent job of re-framing that problem as an opportunity for up-and-coming business leaders. Most importantly, he talked about how the greatest value that sustainability offers often comes from reducing uncertainty and risk rather than the “win-win” cost savings that seem to be the focus of sustainability departments today.

I worked in the sustainability department of a large Fortune 500 company this summer, and my team needed to build a business case for every project that was proposed. More often than not, that requirement led to a robust analysis of the expected economic benefits and a much more qualitative assessment of the “intangible” benefits such as positive PR or a reduction in environmental impacts. Predictably, that approach led to the economics of a project being weighted more heavily since they could easily be compared to other projects at the company. A glaring issue with that process is that risk reductions usually represent the largest source of value for the system-wide sustainability efforts that will actually change an industry, and they are usually categorized in the intangible section of a business case. Continue reading

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More questions than answers for the utility industry

reederBy Jake Reeder, MBA/MPP ’15

This article was written in response to a seminar given by Rob Latoff, Director and Senior Partner with McKinsey & Company, in an EDGE Seminar on Sept. 25, 2013 at Duke University’s Fuqua School of Business.

Rob Latoff’s perspective on energy economics in the EDGE Seminar was refreshing in its lack of certainty about the U.S. and global energy sectors. During his talk, Latoff didn’t attempt to, as he put it, “develop the most perfect crystal ball.” That said, several predictions about the direction the energy sector might take over the coming decades emerged naturally from between the lines (or slides), of his talk. Below, I’ve tried to list what I think are the most interesting ones from the utility and electricity space.

1. Technologies will emerge to protect consumers and companies from electricity price volatility. Perhaps the most startling point that Latoff made during his entire talk was about bulk electricity pricing. According to Latoff, electricity prices can rise or fall 10- to 100-fold over the course of a normal day (and he has seen prices vary as much as 1,000-fold within a 24-hour period). It doesn’t take a perfect crystal ball to see that this situation is untenable. As utilities use time-of-use charges and other mechanisms to pass on these costs to their customers, the market will respond by developing products and services to alleviate wild price swings. These might be technology-based (energy storage technologies), service-based (demand management), or end consumer-based (distributed generation and smart devices that, for example, dry clothes at low-demand times). What is clear is that 10- to 100-fold price swings within a developed commodity market cannot remain the norm forever. Continue reading

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Energy independence: Four decades of rhetoric

rokeachBy David Rokeach, MBA ’15

This article was written in response to a seminar given by John McNabb, Vice Chairman of Investment Banking with Duff & Phelps Corporation, in an EDGE Seminar on Sept. 18, 2013 at Duke University’s Fuqua School of Business.

In 1973, President Richard Nixon announced “Project Independence,” an effort to make the United States energy independent by 1980.  Nixon defined his objective as “not [having] to rely on any source of energy beyond our own.”  Four decades later, this dream hasn’t yet come to pass.  It never will.

John McNabb spoke at Duke University’s EDGE Seminar Series on Sept. 18, 2013.  He is a seasoned oil and gas executive and is currently the Chairman of Willbros Group, an international energy construction and engineering company.  Mr. McNabb spoke about the extraordinary growth and potential of American oil and gas production.  Increasing production, he argued, would lead to energy independence. Continue reading

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Energy industry offers promise for MBAs: 5 Tips for successful recruiting

By Malcom Riley, Sector Director: Energy & Technology, Career Management Center, Fuqua School of Business

career fairThe energy industry is in the midst of unprecedented transformation and growth worldwide.  Mature markets are aggressively pursuing solutions that will reduce their foreign oil dependency as well as their environmental impact.  Developing nations are focused on cultivating the natural resources necessary for growth.  Energy companies in every segment are competing relentlessly to make key acquisitions, enter untapped markets, and negotiate the game changing deals needed for long-term success.  The energy industry’s business challenges are growing more complex each day, and this reality presents a unique opportunity for talented MBAs.

Although MBA recruiting represents a very small piece of the recruiting puzzle for most energy companies, hiring is projected to increase in the near future.  In fact, according to a recent survey of 935 corporate recruiters in 50 countries conducted by GMAC, the energy sector will demonstrate a demand for MBA talent as great as any industry.  Continue reading

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What makes a successful sustainability executive?

006510_sustain035 smallerA diverse work background, a systems thinking mindset, and the ability to lead change are a few of the traits that employers are looking for in sustainability hires.  EDGE managing director Katie Kross and alumnus Koji Kitazume (MEM/MBA ’12) interviewed 10 diverse sustainability employers this summer to understand what skills make a sustainability candidate stand out.

Read full article on TriplePundit: 5 Traits Essential for Sustainability Leadership.

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New energy finance focus at Fuqua

Energy student, Fuqua School of Business, Duke UniversityFuqua School of Business has already earned a reputation as one of the best places for MBAs to gain industry expertise in energy and environmental sectors.  In July, Fuqua extended its offerings with the approval of a new MBA Concentration in Energy Finance.  The new concentration, which is an addition to the school’s existing MBA Concentration in Energy & Environment, will give MBAs a chance to dive deeper on issues of project finance, markets and trading, corporate finance, and risk management, with a grounding in the specifics of global energy markets.

“With the addition of this new concentration, we are responding to the growing interest of our students in careers at the nexus of energy and finance,” said Jennifer Francis, Fuqua’s Senior Associate Senior Associate Dean for Programs. Fuqua is the only MBA program in the Businessweek Top 10 to offer a major or concentration in Energy Finance to its MBAs.

The new focus on energy finance follows Duke’s announcement in June of a $5.5 million gift to the Duke University Energy Initiative, which will, among other priorities, provide funding for a new energy finance professorship of the practice at Fuqua.

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Duke student entrepreneurs solve energy challenges

chowby Dan Chow, MEM/MBA ’15

Dan Chow is a Duke graduate student pursuing dual Master’s degrees in Environmental Management and Business Administration. In this column, Dan shares his experiences pursuing environment-related entrepreneurial ventures at Duke.

Ideation

Dan Chow (pictured) and his teammates pitched their Refrackt business plan in the Duke Start-Up Challenge, Apr. 11, 2013

I first became interested in energy entrepreneurship while working on a geothermal-based start-up as an undergraduate at Middlebury College. When I arrived at Duke to pursue my graduate studies, I first attempted to repackage the idea of using old oil and gas infrastructure for geothermal power, and recruited a team to participate in the Program for Entrepreneurs (P4E) at The Fuqua School of Business. While that idea fell through after several conversations, I was still keen to gain additional entrepreneurial experience.

Through a serendipitous meeting, I teamed up with Judy Winglee, a PhD student at the Pratt School of Engineering, Mark Panny (MEM-WRM), and Victor Smith (MEM-EE) to compete in the Duke Start-Up Challenge (DSC), a Duke-wide competition for new business ideas across a broad spectrum of industries. Our proposed venture, Refrackt, built on Judy’s research to tackle water consumption and wastewater production in the hydraulic fracturing industry. Continue reading

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Crossing the climate line

This op-ed first appeared in the Raleigh News & Observer on May 21, 2013.

by Daniel Vermeer

Earlier this month, a remote monitoring system in Hawaii recorded the first time in human history that the daily average for carbon dioxide levels in the atmosphere hit over 400 parts per million.

Crossing the 400 ppm line is not inherently meaningful, other than reminding us that we are on a path to a place we don’t want to go. But it can be an opportunity to step back and reflect on the virtues of a stable climate and the stake we all have in that stability. Continue reading

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