There was thunder over Boulder this evening, which Third Derivative (D3) colleagues and I heard from opposite sides of the same town while dialing into the same Zoom. Masaki joined from Benin, where it was already past midnight. Most of the rest of the room was in Japan, where it was already tomorrow morning. Eight time zones, one thunderstorm, and a very generous group of founders!
The occasion was a session with the Japanese climate tech startups going through JETRO‘s Global Startup Acceleration Program, co-hosted with D3, New Energy Nexus, and Japan Energy Fund. D3 introduced me by saying their current team is “part of my legacy,” which warms the cockles of any founder’s heart.
My brief was two-fold: tell my founder story, then share climatetech pitch tips ahead of Climate Week NYC, which runs September 20-27 this year. Below is roughly what I shared:
Level One: A Japanese Console
To explain how a computer science major wound up running an advanced carbon materials company, I have to start with video games.
My console of choice as a kid was the TurboGrafx-16, known in Japan as the PC Engine. I was the only kid I knew with one – an odd duck, which future entrepreneurs often are, and I have written at inadvisable length about it since. The console was built by NEC, Nippon Electric Corporation. What I did not know at the time: while I was sinking hours into Military Madness on NEC hardware, elsewhere at NEC, Sumio Iijima-sensei was discovering the carbon nanotube.
Remember that for later!
Moonshots And Underdogs
My mom was a curator and chair of the Department of Space History at the Smithsonian National Air and Space Museum, so I spent a many weekends going into work with her and wandering around underneath actual moonshots. (She retired a few years ago, and I am still not over how cool her job was.) What stuck with me was that the Apollo program took far more than engineering. It took political will, conviction, aspiration, and – above all – imagination to take something that would have been dismissed as impossible and commit to making it real.
I played American football at Thomas Jefferson High School for Science and Technology and then at Rice, in the very stadium where John F. Kennedy gave the speech that launched the whole idea of doing hard things because they are hard. We were underdogs every time we stepped on the field. Every snap was a moonshot. However, with the right team, a clever strategy, and relentless execution, we found ways to win games we had no business winning. That has been more or less my experience of entrepreneurship too, and it is why I keep coming back to moonshot leadership as a frame.
Two Exits And A Nagging Question
I started founding companies while still a university student, beginning with a small mobile devices venture in the era of the Palm Pilot. Through no particular brilliance of our own (We were all computer science majors, and it turns out that computer science is roughly 15% of what a software startup requires.), we were acquired.
Then I served as CTO of what became the world’s largest DVD rental machine company, which was acquired for $100 million by our largest rival, Redbox. Both experiences taught me the same lesson from opposite directions: when we had the right people and led them capably, we won; when we didn’t, we suffered, regardless of how good the technology was.
Which left me with an uncomfortable question at a fairly young age. Great. I built the world’s largest DVD rental machine company. Is anyone’s life actually better?
Be A Scientist, Save The World
At almost exactly that moment I went back to my alma mater and sat in on a lecture by Nobel laureate Rick Smalley. It has since become famous under the title “Be a Scientist, Save the World.” I was way, way in the back of the room.
Smalley’s argument was that, if you list the top challenges facing humanity over the next century (energy and climate, yes, but also clean water, hunger, poverty, social equity) and you solve energy, you get the solutions to most of the others essentially for free. I could not unhear it. That lecture set the direction for everything that followed, and I have told the story of that path a few times since.
Smalley, by the way, won his Nobel for co-discovering the buckyball and ushering in the modern era of nanotechnology. He was also a frequent collaborator with Iijima-sensei at NEC. Two nano-engineered carbon molecules, two labs, on opposite sides of the world. Stay tuned.
Hardtech Is Hard
After Smalley, I went to Switzerland for business school (still one of the best decisions I have made) to build global leadership capacity and learn global supply chains. Coming back to the US, I became Rice’s first entrepreneur-in-residence and helped spin a number of companies out of university IP, including a little outfit called DexMat that I would not join for years.
Pushing from software into deeper tech, I discovered that it is called hardtech for a reason: capital requirements are greater, paths to market are longer, dependence on large corporate partners is heavier, and exposure to policy and other exogenous factors is more significant. As a multiple-time exited founder, I had the strange experience of watching my returns go down over time!
This is what led me to build Third Derivative – to see if we could improve outcomes for all climatetech founders. We took an ecosystem approach to commercializing, deploying, and scaling deeptech for climate. Our founding conviction was that this work is a team sport requiring corporates, investors, national labs, and founders moving in concert. By now, D3 has helped mobilize more than $4 billion of capital across more than 300 deeptech startups, and those numbers keep climbing! I am enormously proud of what that team continues to do.
The Bottleneck
The most valuable thing I learned from my D3 and RMI colleagues was to hunt for leverage points, the places where an acute intervention produces outsized results. Reviewing thousands of climate tech startups a year, one pattern kept surfacing: conductive materials sat right in the bottleneck for renewables, electrification, mobility, and buildings. Demand curves for conductive materials pointed sharply up. Production forecasts for materials like copper pointed flat or down. And copper and aluminum are filthy to produce in the first place.
That is what pulled me toward advanced materials for my next shot on goal. Solve conductive materials at scale and you get a rising tide that lifts every other boat in climatetech.
Which brings me to DexMat, where I am now co-founder and CEO. We make Galvorn: many times stronger than steel, lighter than aluminum, as conductive as copper, and produced not by combusting carbon but by capturing it. I held up a small spool on the call, roughly 150,000 meters of conductive fiber, which never fails as a conversation starter. People want to touch it. They are always surprised by how soft and light it is.
A Swing Held Up By 100 Quadrillion Nanotubes
Galvorn was co-invented by Rick Smalley, the man whose lecture put me on this path in the first place, which I have called a full-circle moment before and will happily call one again.
And last year we had the honor of hosting Sumio Iijima-sensei at a celebration marking 40 years since Smalley’s buckyball discovery. There is a photograph of him sitting on a swing suspended by Galvorn carbon nanotube fiber. The man who discovered the very first carbon nanotube, held up by roughly 100 quadrillion of them! That is a decent proxy for the exponential we intend to keep riding.
Climatetech Pitch Tips For A Very Loud Week
Everyone’s introduction on this call included the same two goals for New York Climate Week: meet customers and meet investors. What could be more relatable? Over my career I have raised roughly $100 million of early stage venture capital and sold a lot of product, and those turn out to be nearly the same conversation. Here are the climatetech pitch tips that have served me best.
Know thyself and know thy audience. The first golden rule of communication. Be clear about who your company is and who it isn’t, and resist pitching what you imagine people want to hear. Then work just as hard on the second half. The audience at Climate Week is different from the audience at VERGE, which is different from an investor across a coffee table, which is different from a customer procurement meeting. Listening is a far more valuable skill than pitching. You are not trying to misrepresent your work; you are trying to translate it into the language that gets that particular human interested.
Pull, not push. Walk up to someone and try to convince them of something, and Newtonian mechanics kicks in: equal and opposite reaction. Investors and desirable customers have well-developed defenses against being pitched. Entice them with a nugget instead and shift the dynamic so they are leaning in and asking the questions.
Investors invest in lines, not dots. You will almost never nail a pitch and watch a checkbook open. What investors want is a series of interactions that form a trajectory going up and to the right. So the goal of the first conversation is the second conversation. This is agonizing for impatient founders, and I am extremely impatient, especially about climate. Bill McKibben is right that winning slowly is losing. With investors, though, patience is a virtue.
Less is more. The temptation is to inundate people with every reason your business is wonderful. Withhold instead. Leaving gaps is what makes someone ask “well, what about X?” and that question tells you exactly what matters to them. It is a bit like dating: play slightly coy and let them become thirsty for the next meeting. None of that requires misleading anyone; it just requires being unhurried. As a bonus, it quickly separates the truly interested from the politely curious.
Investors are humans, not robots. For now, anyway. People decide from the heart and then build elaborate spreadsheets to rationalize the decision. A VC sees a thousand deals a year and can fund maybe ten. Plenty of those thousand pencil out on paper. The ones that get funded are the ones that captured someone’s imagination.
The three T’s. American VCs talk about TAM, tech, and team. For TAM, nothing beats customer traction: a new offtake, a pilot, a deal, evidence of depth in a niche or breadth for a platform, a credible go-to-market. For tech, be careful. Technical founders love to talk about the technology; investors mostly want to know what de-risks it, so lead with milestones, IP position, scale-up progress, and techno-economics. For team, they want your origin story, why you are the right person, who else is on the bus, and every new senior hire that closes a risk gap. My own view is that this list should be inverted with team at the top. Most investors unfortunately do not see it that way.
Create real urgency. Investors have every incentive to string you along, because more time means more data on whether your line is going up or sideways. Be truthful and be clear about other interested parties and about upcoming valuation inflection points. Nothing motivates an investor like FOMO. My own preference is never to bring up an investment round at all. I want them to ask, because the question is a buying signal, and because being one of the hundred people that day announcing a raise puts you in exactly the wrong tier. The single most effective thing you can say to an American VC is “we just closed a round.” There is no faster way to hear “wait, is there still room??”
Always serve dessert. I think about conversations like meals. There is an appetizer to get someone hooked, a main course of real content and Q&A, and then dessert. Founders forget dessert constantly. We let someone else have the last word, and the last word is what everyone remembers. Keep something in your back pocket: “one last thing,” or a different angle they have not considered. Leave on your own terms with your message as the final thing in the room.
Turn the dial up on boldness. I spent that whole first half of the call talking about moonshots, and I have to be careful, because plenty of investors want de-risked things that do not sound like they might explode on the launch pad. I can tell a very measured version of the DexMat story. But when I have 30 seconds in a loud room during Climate Week, I swing the pendulum back: we’re not making metals like copper and aluminum greener, we’re making them obsolete. Or, in their own dialect: the next generation of gold rushes will be built on an entirely new kind of pickaxes and shovels. Say something that fits neatly into the container they already carry around and it goes in one ear and out the other. A little cognitive dissonance wakes people up.
Tomo Shibata made the excellent point that in Japan, being that contrarian can read as rude. My view is that turning the dial up at New York Climate Week is a feature rather than a bug, but with a guardrail: distinctive enough to stand out from the other twenty pitches that investor heard today, not so far out there that you get written off as unserious. I have absolutely erred on the far side before.
Tomo also offered the best metaphor of the hour: a pitch is a movie trailer. Its job is not to tell you the whole plot; some trailers do that, and then I no longer need to see the movie. Its job is to entice you to buy a ticket.
My own refinement of his marathon analogy: it is a marathon run on a track, and every time you come around, the investor has another chance to say no. Your job is to keep them interested for one more lap. Which, come to think of it, is just my sprintathon wearing a different singlet.
How I Actually Do Climate Week
Climate Week overlaps the UN General Assembly, so New York is completely packed and getting anywhere by car is a fantasy. I log about 30,000 steps a day, which is excellent for my health – and also for the environment.
My approach:
- Prioritize the people I cannot see any other way. Customers and investors I can meet in other contexts. Fellow travelers flying in from outside the US, I cannot.
- Skip anything where I am a face in a crowd of a thousand. Shouting a pitch over a DJ costs me my voice for the rest of the week and buys me nothing.
- Stack activities. Someone hosts a climate run almost every morning; the climate tech VC crowd takes one day, Extantia Capital and friends take another. I get my run in, I network in a small and intimate setting, and I have a Galvorn sample I can literally run with as a conversation starter. Running at sea level after training in Boulder also makes me feel briefly and gloriously fit!
- Look for the interest-driven events. Runs, sports, whatever the shared hobby is. Common ground builds rapport faster than a badge scan. There is apparently padel this year, which I do not fully understand yet, and which I intend to go learn.
I will be in New York Monday through Wednesday. Come find me. Or better yet, out-kick me on a morning run and then tell me about your company while I catch my breath.
Dessert
I am grateful to the Third Derivative team for the invitation, to JETRO and Japan Energy Fund for building the bridge, and to the founders themselves. Bio-based aromatics. Catalysts for supercapacitors in AI data centers. Water risk assessment by drone and satellite, presented by a deputy CEO who was in Benin after midnight and joined anyway. Twenty thousand farmers enrolled in a carbon program in the Philippines. That is a serious cohort!
If I can leave you with one thing, it is that we really are all in this together. Together – and only together – will we build the sustainable, prosperous, equitable future. This is an ecosystem, and one Zoom call is a thin slice of it. If any of you want to go deeper one-on-one, the D3 team knows how to find me and I would be delighted. 🚀
What has been the most useful pitch advice you have ever received, and who gave it to you? Share it in the comments below.