My Year as NREL’s Entrepreneur in Residence

by Joel Serface

I just spent an amazing year at the National Renewable Energy Laboratory (NREL), but have no start-ups to show for it (yet).

A year ago, I was asked by
Kleiner Perkins to be the first Entrepreneur in Residence (EIR) at NREL. As a person who has been into energy and environmental technologies since gradeschool and as an early cleantech investor, it was an opportunity of a lifetime to become the first NREL EIR. It was a fantastic time spent with some of the best cleantech researchers in the world. I felt like a kid in a candy store. I tremendously added to my depth and breadth of cleantech history and knowledge.

The program itself was a grand experiment that I commend the Department of Energy for attempting. DOE’s calculus was that if they inserted a serial entrepreneur/investor backed by a brand-named VC firm into a lab that magic would happen and that an innovation would turn immediately into a company. At worst, DOE would learn a lot about what it and its labs need to do better to in order to accelerate ideas to market.

In the 11 months that I had the privilege to work inside NREL, I met with more than 300 researchers, identified around 30 promising technologies that I thought could reach commercial potential over the next several years, and honed in on 3 technologies that showed imminent promise. Unfortunately, the EIR program was timed too short to reach its full potential and to get the first one of these ideas set up as a company.

When building a new program into a research institution, timing is critically important. Based on my experience running the
Austin Clean Energy Incubator at The University of Texas, it took almost 11 months to start my first company. In 18 months, I had helped start 5 companies. In total, these companies raised more than $200 million, but none surpassed KP’s investment hurdle.

When I agreed to become NREL’s EIR, I set the expectation with DOE, NREL, and KP that starting a company that KP would back within one year should not be expected. While there are a tremendous number of opportunities for commercialization at NREL, they need to temporally match a VC firm’s thesis, meet its perceived portfolio needs, or surpass its hurdle for innovation. Given enough time, many of the 30 technologies described above could be built into companies, but not necessarily into ones KP would fund over the period of the EIR Program.

A more reasonable expectation for all was to use this program to begin developing long-term relationships with VCs and start-ups that helped the lab and DOE develop better tools and processes. If successful, this could help NREL deliver more companies or successful collaborations for the entire industry. With this approach in mind, there were many things learned by all parties that could benefit the entire venture capital and start-up industry. Here is what I learned…

First, NREL truly is “The National Renewable Energy Lab”. There is more breadth and depth of renewable energy and energy efficiency knowledge at NREL than any other institution on the planet. This alone is worth the price of admission. Unfortunately, the admission price has never been posted and there have only been secret alley entrances with secured doors to gain access to the lab. The lesson here is that new interfaces need to be developed by the lab to better expose its collective knowledge and translate it to the marketplace more effectively (thus EIR and other programs).

Second, the value in NREL is not just in its innovation, but more importantly in the value it can deliver across the life cycle of a technology…

  • Innovation – Yes, NREL has a great pool of researchers and ideas. They also have a network of other labs and universities they collaborate with (MIT, Stanford, University of Colorado, etc.). They will also soon be the hub of all DOE renewable energy intellectual property by managing DOE’s IP Portal.
  • Acceleration – NREL’s experience allows them to solve critical issues for external technologies and companies. Success stories abound from NREL helping First Solar, Uni-Solar, Clipper Wind, and many others. Identifying new ways to open up NREL to solve critical issues in start-ups is critical to the VC industry.
  • Analysis – NREL has a large division that does market, techno-economic, scaling, integration, policy, and plant design analysis. This primarily is developed for DOE and Congress (which really does not take advantage of this tremendous asset), but needs to be exposed to the financial services and venture capital sectors. I would encourage any thesis-driven VC firm or investment bank to review the work that has already been delivered by NREL.
  • Testing / Validation – NREL provides the service of testing all flavors or renewable energy, storage, transportation, building, and energy efficiency technologies. They even integrate multiple technologies as systems and perform accelerated testing. NREL’s validation not only helps get products designed into projects, it also provides critical feedback for future development.
  • Deployment – NREL has a cities and states program that helps advise on local policies, design parameters, and integrated solutions. NREL will increasingly be involved in regional test and implementation centers that will help scale technologies into cities and integrated pilot facilities.

Finally, NREL will only get better; now is the time to begin forging long-term relationships with them. With additional funding, increased DOE support, stronger linkage to national priorities, and new management focused on commercialization and market needs, NREL will deliver increasing value to the cleantech community. By becoming more intertwined with our imminent national priorities and community needs, the lab will increase its “NRELevance” in our nation’s day-to-day existence.

So, what next’s next for the NREL EIR? Over the short run, I will help deliver a national energy efficiency initiative focused on schools with the help of NREL. I will also continue supporting NREL as an entrepreneur/investor and as an advocate of the lab’s potential. I will also continue nurturing the many wonderful relationships I began forging through this program. And, yes, there will be start-ups forthcoming, unfortunately not within the short period of the EIR Program.

Thanks again to DOE, NREL, and KP for inviting me into this unique and invaluable experience. I hope that my time at NREL has made a difference there. If NREL is successful with its new management team and tools, then the entire cleantech community and nation will benefit.

Joel Serface served as NREL’s first Entrepreneur in Residence with Kleiner Perkins Caufield & Byers. As an investor and entrepreneur, Joel has planted cleantech seeds in Massachusetts, California, Texas, and now Colorado. Since 2000, Joel has started or invested into more than 20 cleantech companies with 5 liquidity events so far and has catalyzed the formation of numerous supporting cleantech institutions and regional and national policy initiatives.

10 replies
  1. felixkramer
    felixkramer says:

    Joel, this is a great report. It sounds like it was a year well spent, and that all the parties involved will benefit. Having just come off a few intense weeks advising, endorsing, and in some cases being subgrantees in two rounds of stimulus grant applications (electric transportation and batteries) and heading toward ARPA-E with ideas for a new prize, I can say I've been inspired by all the creativity EERE's initiatives are sparking around the country. It looks like the talk about ET being the new IT is going to come true. Thanks, Joel, for helping to make it happen!– Felix Kramer, Founder, The California Cars Initiative and unforgivably infrequent "Bloggin' Team" member

  2. Joel Serface
    Joel Serface says:

    Andy — There were at least 5 companies either formed (or significantly influenced) from NREL technology over the year I was here. This is actually a very good number considering the national average for start-ups from universities being around 1 per $100M in research (per year). NREL's budget over the last year was roughly $300M (minus a large chunk for new building capital). This also comes with very little native venture capital on the ground here in Colorado to help seed these companies.

  3. Manuel Decoene
    Manuel Decoene says:

    I think a good interface for harvesting all potential valuable ideas is translating all input into the way the user most likely uses his/ her senses.

  4. Anonymous
    Anonymous says:

    Most EIR positions are limited to one year to create a company. That means you have to identify the technology in the first 90 days and then put your blinders on and move it to market. Maybe we should try a solicitor then barrister style model with 2 or three year periods in residence for the solicitors.

  5. Vinay Bhargava
    Vinay Bhargava says:

    Joel-Congrats on pioneering a new relationship between a national treasure and KP. Innovations in basic science have long lead times to get to market. But you have to start somewhere and keep pushing. Good luck,Vinay BhargavaGoogle

  6. Anonymous
    Anonymous says:

    While Clean Energy technologies continue to show promise, I think the execution and implementation of these technologies is not as efficient as the innovation phase.An idea would be to entice engineers and technicians from the petroleum industry to come to Clean Tech and bring some of their established best business practices from that segment of the energy industry into this developing segment.As long as the Clean Tech industry sees the petroleum industry (indisputedly the largest component of the energy industry)as a foe and not an industry from which it can learn, we will be in the same stage of ‘spinning our wheels’

  7. Anonymous
    Anonymous says:

    At a time when real renewable projects and real companies need to get to market, this type of activity does nothing to move the market forward. My hope is that the Obama administration will pull the money from these intellectual exercises and put it where real renewable projects will get done and real jobs that go with them will be created. But, glad to hear you had a good time …

  8. Lynn Sargent
    Lynn Sargent says:

    Joel,Thank you for sharing your EIR adventure with us. NREL is indeed a jewel that we Coloradoans are very proud of.You mentioned we have too few VCs to help these companies get off the ground. Could you please recommend some specific ways we could attract more to our state?Thanks very much,T. Lynn Sargent

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