Thursday, January 7, 2010, 3:25PM ET - U.S. Markets close in 35 mins..

Can Cleantech Produce "Ten Googles"?

Posted Jun 03, 2009 01:39pm EDT by Sarah Lacy in Venture Capital, M and A, IPOs, Clean Tech

Vinod Khosla, of venture capital firm Khosla Ventures, is an optimist. You show him a huge problem, and he sees only a huge opportunity. And, since he’s a VC, he sees lots of dollar signs around it too.

As a co-founder of Sun Microsystems and investor in companies like Juniper Networks, Khosla had a stake in the earliest days of the Internet build-out when it seemed like an impossibly hard task. Now, he sees the same—if not greater—opportunity in cleantech.

He says it’s less about individual technologies like ethanol and solar cells and more about “re-inventing the infrastructure of society.” He includes in that everything from light bulbs to cement. The opportunity is so vast that Khosla says “clearly” at least 10 “Googles” will be built. And as a former partner in Kleiner Perkins Caufield & Byers—one of Google’s first investors—he knows a thing or two about the search giant.

In a rare, sit-down interview at his Menlo Park office, Khosla explains why he’s invested in more than 30 cleantech companies since starting his own firm, and why other investors who say it’s too capital intensive and too risky are wrong. (Not that he minds them leaving him all the deals, he adds.) But Khosla also takes on idealistic environmentalists whose wacky ideas can’t scale or even make it to market without subsidies. Instead, he calls himself a “pragmentalist.”

Is there a lot of hype? Sure. There’s always hype with new technologies. In fact, Khosla has bad news for those who bought solar stocks at their peak—your investments will probably stay underwater. But look alive, because more IPOs are coming “faster than people think.”

49 Comments

Mulv-unit
Mulv-unit - Wednesday June 03, 2009 03:35PM EDT

--LegalizeMe Clean coal is a political term. The process of creating energy from coal creates CO2, you can't clean a chemical reaction... -- I agree above that there needs to be a diversification of energy supply and relaying on cheap energy now ( coal in cost, oil due to cost to change energy infrastructure for a new source) will only intensify the costs for the future when supply runs low... I agree with the Author from the point that low cost renewable energy will be the modern economic revolution much of what computers have done since the '70's. If you have money to make home run bets, then you stand the chance to make huge returns, and this author seems to have that kind of money.... For everyone else, you have to ask yourself "Is there something better I could be doing with my money now?" For myself paying down my debt and short-terming the market works for now, and hopefully in the future I will be in a position to invest in possible home run companies like Clean Tech

Mulv-unit
Mulv-unit - Wednesday June 03, 2009 03:35PM EDT

--LegalizeMe Clean coal is a political term. The process of creating energy from coal creates CO2, you can't clean a chemical reaction... -- I agree above that there needs to be a diversification of energy supply and relaying on cheap energy now ( coal in cost, oil due to cost to change energy infrastructure for a new source) will only intensify the costs for the future when supply runs low... I agree with the Author from the point that low cost renewable energy will be the modern economic revolution much of what computers have done since the '70's. If you have money to make home run bets, then you stand the chance to make huge returns, and this author seems to have that kind of money.... For everyone else, you have to ask yourself "Is there something better I could be doing with my money now?" For myself paying down my debt and short-terming the market works for now, and hopefully in the future I will be in a position to invest in possible home run companies like Clean Tech

James
James - Wednesday June 03, 2009 03:37PM EDT

Clean energy? Why? Stupid global warming BS. The same person responsible for "global warming" is the one that began the ice age... GOD.

alex b
alex b - Wednesday June 03, 2009 03:41PM EDT

Gee, I thought these guys were all about redistribution of wealth, why doesn't he give away half of his 10 billion dollar empire to the poor. He sure wants uncle Obama to take all my money..."for the good of all"

Yahoo! Finance User
Yahoo! Finance User - Wednesday June 03, 2009 03:44PM EDT

Mr. Khosla needs to get a real job that forces him to do some real work. As a venture capitalist, all he does is invest his money in companies that employ people who do the real thinking and the real hard work.

Yahoo! Finance User
Yahoo! Finance User - Wednesday June 03, 2009 03:49PM EDT

There is no such thing as "Clean Coal" Those who think they know who post don't have a clue, they are only basing their bable on what they real on news blogs. If the emissions from a coal plant were actual cleaned to the last Micron dust particle. Which are the ones that destroy your helth "Microns" look it up. It would cost more to clean the coal emision than it is worth. The cost? The 'Air Scrubbers' that it would take the coal companys to purchase and install. Why do you think they have paid millions to lobbyist to fight clean coal technology. The coal companies then bargain the emission standard down by donating money to the political candidate running for office 'cough' G.W.Bush *#@ and thus we have the watered down standard we have today. The cost enormus, the sollution? Alternative energy and energy storage like Beacon Power company.

Commander.
Commander. - Wednesday June 03, 2009 03:51PM EDT

Sorry guys, Hydrogen Storage is the energy source of the future and always will be. THERE IS NO STORAGE! Anyone who says there is; I want to see it. Show me a company that sells reliable affordable hydrogen storage that is practical for a car to travel say, 100 miles on a tank. Hydrogen is merely a proton, it slips between the atoms of anything you store it in. Metal Hydride has been around since the 70's and will never be cheap and affordable enough to use. Google algenol , origin oil. Algae has the potential to make 100,000 gallons per acre per year, desalinate water and produce biomass for soil at the same time. As opposed to crop based ethanol that does exactly the opposite for 30 gallons per acre per year. The answer is out there somewhere. We do not need to keep doing the same thing over and over. New clean tech will emerge.

James
James - Wednesday June 03, 2009 03:57PM EDT

The next Bill Gates will be the guy that figures out a way to democratize energy production. Then energy will be like PCs and boom exponentially, much like the internet boom. Who could have predicted the Y2K+ applications of the internet in 1990. That transformation only took 10 years.

sodosm
sodosm - Wednesday June 03, 2009 04:02PM EDT

Clean energy my foot. Global worming is a scam1 I beleive it was cooked up by a bunch of American haters! Let's take carbon dioxide crap. Some time ago NY Times publshed in its Science section, proof that CO2 really heats up this globe. They found correlation between the global high temperatures eras and high CO2 atmospheric levels using samples of Antartic ice. What the 'proof" did not consider is the fact that at -70C, CO2 sublimates -- transitiones from gas to ice-- and in Antartica such low temperatures are reached even today, in a hot cycle, and quite often in a cold cycle eras. So one should expect Antartica to be a "sink" for CO2 in cold periods, full of CO2 trapped in its ice destroying their "proof" This happens when "science" has and agenda and second rate scientists are getting grands to prove it. Also, at 65,000 ft Altitudes and above, the temp are lower than -79C so the CO2 is cold ice crystals, reflecting light and heat. More CO2 in atmosphere, more CO2 crystals reflecting heat!!! I SHOULD GET A NOBEL PRIZE for this little disertation, but the Sweeds are not likely to be so inclined since all these nordic nations are antiamerican, and paranoic about any change in the global climate. this is because most of potential chances in climate may get them in diaspora again, as happened with the Vikings, Goths, Ostrogoths etc. In short, for all "Clean energy", "anticarbon" enthusiasts, if u r concerned, keep your breath for 5 or 10 min per day!! ... and do not forget, YOU ARE CARBON UNITS!!!

David
David - Wednesday June 03, 2009 04:05PM EDT

Nice to see Stacy again

sodosm
sodosm - Wednesday June 03, 2009 04:08PM EDT

Clean energy my foot. Global worming is a scam!! I beleive it was cooked up by a bunch of American haters! Let's take carbon dioxide crap. Some time ago NY Times publshed in its Science section, proof that CO2 really heats up this globe. They found correlation between the global high temperatures eras and high CO2 atmospheric levels using samples of Antartic ice. What the "proof" did not consider is the fact that at -70C, CO2 sublimates -- transitiones from gas to ice-- and in Antartica such low temperatures are reached even today, in a hot cycle, and quite often in a cold cycle eras. So one should expect Antartica to be a "sink" for CO2 in cold periods, full of CO2 trapped in its ice destroying their "proof" This happens when "science" has and agenda and second rate scientists are getting grands to prove it. Also, at 65,000 ft Altitudes and above, the temps are lower than -79C so the CO2 is "cold ice" crystals, reflecting light and heat. More CO2 in atmosphere, more CO2 crystals reflecting heat!!! Selfregulating!!! I SHOULD GET A NOBEL PRIZE for this little disertation, but the Sweeds are not likely to be so inclined since all these nordic nations are antiamerican, and paranoic about any change in the global climate. this is because most of potential chances in climate may get them in diaspora again, as happened with the Vikings, Goths, Ostrogoths etc. In short, for all "Clean energy", "anticarbon" enthusiasts, if u r concerned, keep your breath for 5 or 10 min per day!! ... and do not forget, YOU ARE CARBON UNITS!!! :-))

JR
JR - Wednesday June 03, 2009 04:12PM EDT

Green is the next dot.com boom ride the wave.

JamesZ
JamesZ - Wednesday June 03, 2009 04:13PM EDT

There will only be a handful of winners in the alternative energy (not 10 googles) and these are the ones with breakthrough technology in nanosolar ink, cellulosic based fuels and/or advanced battery/ultra capacitor technology. Not sure what Vinod has invested in, but he will be lucky to get 1 or 2 winners out of his 30 clean energy investments and maybe thats all he needs to make money. Even with alternative energy, what do you do when the wind doesn't blow (in the calms) or sun doesn't shine and only 7 or 8 hours of sunshine in the winter in the northern US. Furthermore no one wants more power lines to get wind and thermal solar energy out of the midwest or southwest or ocean to where its needed. You need more nuclear for baseline power generation. Its clean and affordable and necessary for these new hybrid plug-ins coming in the next few years. It will be interesting to see what happens with blacklightpower and there technology. Vinod is correct with the fact that most of these technologies don't scale, but don't confuse the easy money he made in telecom with alternative energy, its a different animal.

MattW
MattW - Wednesday June 03, 2009 04:30PM EDT

joel.wigton Thank you for providing us the information on CO2 output vs. GDP. You have succeded in locating a source that demonstrates the opposite of Ryan M's assertion. According to this source, the US emits the 9th highest per GDP of the 25 listed countries. That is a long way from "...polluting far less than any other country per GDP...". Since there are many major industrial powers with far smaller numbers (Germany 30% less, France 50% less) listed, this data demonstrates that it is possible for a nation to be much less polluting without destroying its economy, as Ryan M seems to fear. I still await the reference to the source that demonstrates that the US is polluting far less than any other country, by GDP or any other measure.

Hugh Jorgan
Hugh Jorgan - Wednesday June 03, 2009 04:34PM EDT

Texas CEO - You are sharp, but are wrong on coal as the future of energy. "Clean coal" is at least 10 years off and we need a solution now. Besides, it will cost at least $1T to retrofit existing plants when it finally arrives. Coal emits sulfur dioxide, even after scrubbing, radiation, more than even a nuclear plant, and alot of CO2. The only clean, renewable, and scalable energy technology currently is nuclear. After reprocessing spent rods, the average household produces only about a shot glass full of waste in 20 years. It emits no greenhouse gasses, and is economical and cheap. And it scales to large scale commercial/industrial production. A plant can be built in five years, excluding all of the enviromental crackpotism built into the process. They could build a new reactor on every nuclear site in the US and raise our domestic energy production from it current ~20% to ~35% by 2014. The US currently has 104 plants in operation. We could then begin to retrofit cars to natural gas, which is plentiful in the US (no more OPEC enslavement), and less polluting than petroleum. The problem with nuclear is not technical, but political. All of the anti-nuclear kooks have a faith-based hatred of it. It has nothing to do with facts, data, and information, only fear. It is a religion to them. They are idiots who will further ruin the country, based upon their own bias, as opposed to the truth. Unfortunately, they are in control of Washington currently. Obama is totally disengenuous and is controlled by the Demo party stooges on this issue. Their energy policy will only further serve to ruin the US standard of living and economy. We are in for some serious future sacrifice. Mr. Khosla is a bright and self-made success. I hope he is successful with his "green" ventures. It is also great that he is investing his own hard-earned dollars, not screwing us poor taxpayers as most anyone who has anything to do with DC appears to be.

JohannesW
JohannesW - Wednesday June 03, 2009 04:39PM EDT

to jack.trainor@ymail.com I have to disappoint you, but wars are good, as long as they are competetive and not religious or hate related. The most competitive wars were WW2 and Cold War. Because of them we have nuclear power, internet, cellphones, everything... and we would have more if we still had the same condition (of Cold War). And as for clean things, it is not the cleanness upon which is decided what way will be used to power things up. It is the demand, supply, costs, profit and government. However good point is made in the article about that not an individual technology will dominate the market. Wind power powered calculators is a joke. Nuclear Power will power homes, sun will power small thing. Wind small villages....

MattW
MattW - Wednesday June 03, 2009 04:40PM EDT

joeslick66, How will hydrogen fuel cells be a source of energy? Where will the hydrogen come from? Hydrogen can be used for energy storage and a relatively convienient liquid alternative fuel, but unless we have some existing source of free hydrogen, we will have to make it from existing compounds like water, by inputting energy. The energy we input will have to come from some source. Creating hydrogen, to put in cars instead of gasoline, using energy from the burning of fossil fuels is no energy or pollution saver. Wind and solar would provide us with a carbon free mechanism for creating such hydrogen fuels. This is a waste because it costs some money up front? Some people might use the word 'investment'.

JohannesW
JohannesW - Wednesday June 03, 2009 04:52PM EDT

Currently, however, hydrogen vehicles utilizing hydrogen produce more pollution than vehicles consuming gasoline, diesel, or methane in a modern internal combustion engine, and far more than plug-in hybrid electric vehicles. It is a Quote from EFCF and TechnologyReview.com.

John
John - Wednesday June 03, 2009 04:52PM EDT

Geothermal and Tidal are the future.

MIKE
MIKE - Wednesday June 03, 2009 05:02PM EDT

Coal is POISON? ....Icky..... We can't leave that in the ground!... It's creepy thinking about all that dirty dirty CARBON just under our feet? Wow. We've GOT to dig all that terrible pollutant up and burn it! ...Carbon=BAD...Tye Dye=GOOD

Yahoo! reserves the right to refuse, or remove any comment that does not comply with the Yahoo! Terms of Service. The submission of spam, hateful, or obscene messages may result in the termination of your Yahoo! ID.
About Tech Ticker - Send FeedbackDisclaimer. Copyright © 2007 Yahoo! Inc. All rights reserved.
Copyright/IP Policy - Terms of Service - Privacy Policy - Help
Quotes delayed, except where indicated otherwise. Delay times are 15 mins for NASDAQ, NYSE and Amex. See also delay times for other exchanges.

Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page. Quotes are updated automatically, but will be turned off after 25 minutes of inactivity. Quotes are delayed at least 15 minutes for NASDAQ, NYSE and Amex. See also delay times for other exchanges. Real-Time continuous streaming quotes are available through our premium service. You may turn streaming quotes on or off. Fundamental company data provided by Capital IQ. Financials data provided by Edgar Online. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Analyst estimates data provided by Thomson Financial Network. All data provided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.