A Message to Clean Tech Entrepreneurs: You Are Still Not Late

A week ago, U.S. President Joe Biden signed an executive order urging his administration to create a comprehensive strategy on climate-related financial risk . The order includes a slew of asks, mostly around how to 1, measure; 2, assess; 3, mitigate; and 4, disclose the potential harms wrought by climate change.

Of those four priorities, two are fundamentally financial: assessment and disclosure. The other two, however, are physical. Measurement is about sensing what is happening to our own systems and to the planet; mitigation is about reducing severity—or to put it in plainer terms, doing something about the impacts of climate change.

Measurement and mitigation are economy-wide, even global challenges, but they’re also business opportunities of equal scope. They fall under the umbrella of climate tech, a sector that has resumed early-stage fundraising and growth after a very quiet half-decade.

Climate tech has accrued $17 billion or so of investment globally in the past few years, most of that in the U.S. under a presidential administration that was actively hostile to its principles. Surely an administration wanting to bolster a climate tech market will create more interest in the sector—and in company formation and probably capital-raising, too?

If climate tech is going to be the new, hot investment space, it’ll need some new, hot companies. Ali Tamaseb, a venture capital investor at DCVC, has just published a new book, Super Founders, that uses numbers, not myths or media tales to examine who starts billion-dollar startups and what approaches they take to fundraising, product development, market fit, competition and so on. There are lots of insights to be gleaned here, but I’ll highlight just a few that may be of particular interest for climate tech founders.

The first is that there’s room at the billion-dollar table for companies tackling hard, fundamental problems of the climate tech sort. Tamaseb calls them “deep tech” companies, which “bring value by offering a product that is so hard to develop that it requires years of scientific and engineering advancement.” You might think deep tech companies would be rare in the unicorn ranks, particularly when there are so many highly visible consumer-facing apps. But Tamaseb finds that they represent more than a quarter of all billion-dollar start-ups.

The second is that there’s room for value creation, even in competitive or crowded-seeming markets. The door to success doesn’t close behind the first company to try something, or even the first five. In fact, Tamaseb finds that the largest cohort of billion-dollar startups were those with many competitors already in the market before they entered.

This idea in particular gives me hope for climate tech. After all, the sector has had one boom—and quite a bust—already, but many things that were tried then could very well work today at billion-dollar scale and act as building blocks for those creating new companies. These would have plenty of things going for them, by Tamaseb’s estimation. Clean technologies are cheaper than ever; they work better than ever; and there’s more market support, more policy support, and more societal engagement on climate than ever. That means that whether you’re trying something brand new or a tried and true idea, you’ll more likely find a market.

There’s another reminder from another longtime technology observer that I hope all climate tech entrepreneurs bear in mind. Seven years ago, Kevin Kelly wrote a short essay titled “You Are Not Late.” In it, he urged all entrepreneurs not to feel like they’d missed the seemingly wide-open opportunities of earlier decades in technology. “The last 30 years has created a marvelous starting point, a solid platform to build truly great things,” he said. “However the coolest stuff has not been invented yet.”

I hope that’s true for climate tech, for the entrepreneurs who are building its new wave, and for what they bring to the climate, too. The White House is bringing climate to the heart of our systems and society. It is also creating new markets for climate tech to fill.

Nathaniel Bullard is BloombergNEF’s Chief Content Officer.

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