I recently had the opportunity to participate in a panel of lessons learned from four climatetech entrepreneurs. It was organized by Trellis (formerly known as GreenBiz) and moderated by Chris Wedding of EFI, where I am a Fellow.
It was a great discussion with other entrepreneurs whom I like and admire, and hopefully it was beneficial for its target audience of climatetech entrepreneurs and investors. Below is a brief summary of the questions I was asked and my responses:
What are 2-3 lessons learned from your prior startups with $300M+ of exits to date?
- The difference between success and failure all comes down to people – and your ability to lead them. I have been part of organizations which have failed because we had the wrong people in the wrong roles, and I have been part of organizations which have succeeded because we brought in better, more capable leaders. The job of a founder/CEO is to surround yourself with smart, motivated, diverse, values-aligned people, and spend your time/effort setting them up for success.
A side effect of this principle is that, as a founder/CEO, you can build your dream team – indeed, it is your responsibility to do so. I maintain a list of people with whom I dream about working some day. I have worked with some of them in the past, and dream about joining forces again. Others I have known or admired from afar, and am always looking for opportunities to bring them into the fold.
If you’re in this business long enough, you will have both successes and failures. Through the ups and downs, the main thing you will take with you from one adventure to the next is the relationships you build along the way. - Play the long game. It is natural to obsess about the outcome of your current venture. Many ventures fail, though, and often for totally exogenous reasons that aren’t your fault. At the same time you are working on your venture, proactively collect new knowledge, experiences, and networks that will help set you up for success in your next adventure. Addressing the climate challenge is a long, complicated journey; even if you experience failure along the way, you will zig and zag your way to eventual success.
- Thinking of playing the long game reminds me of an expression: “A startup isn’t a sprint; it’s a marathon.” My experience and the experience of dozens of other moonshot leaders indicate that this perspective is categorically wrong. A startup isn’t a sprint, and it isn’t a marathon – it’s a frickin’ sprintathon. It’s a series of all-out sprints punctuated by crucial periods of rest, recovery, and redirection. This isn’t just semantics; it’s a fundamental shift in how we approach startup culture and performance.
How did your CEO role at Third Derivative – the world’s largest climate tech accelerator with $2B of follow-on investment in 200 startups – influence your work at DexMat?
You have to dare to do things differently. As a founder/CEO, you will be surrounded by people who tell you to execute familiar, known patterns – but familiar, known patterns are what got us into this climate crisis in the first place!
At Third Derivative, we innovated new models in several ways. We admired the climatetech accelerators that were already doing great work, but, as we continued to lose ground on climate goals, it was clear that they were insufficient. We envisioned a bigger/faster accelerator ecosystem, and everyone told us it couldn’t be done.
Most accelerators brought on cohorts of ~10 companies at a time; we had nearly 50 in our first cohort, and have continued to grow ever since. Most accelerators have physical locations; we went virtual to be able to serve the myriad worthy climatetech ventures around the world who couldn’t uproot to Boulder, Colorado. Most investors need to negotiate every individual term sheet; we convinced VCs with $9B to agree to a standardized set of terms to accelerate dealmaking. Today, four years after I launched Third Derivative, it has helped mobilized more than $2B into more than 200 climatetech startups – because we innovated new models.
Now we are doing the same thing at DexMat. Everyone’s climate roadmap includes maintaining a reliance on old, inferior materials – like steel, aluminum, and copper – that are really hard and expensive to decarbonize. However, DexMat isn’t trying to make those materials green – and there is only so green you can ever make them; we’re making them obsolete.
The lesson for founders, is to surround yourself with people – cofounders, employees, investors, and customers – who recognize that daring to approach problems with different solutions is a feature, not a bug.
We have all heard the quote “Culture eats strategy for breakfast.” What makes a good culture for a climatetech startup, and how do you shape it proactively?
I have found that what really works for climatetech moonshot startups is an “Explorer Culture.” This culture is:
- Couragious (bold, ambitious)
- Purposeful (commitment to mission)
- Balanced (sustainable high performance)
- Fun!
To build an Explorer Culture, you have to start with the right inputs – your team. I have had a lot of success in team building by hiring people who exhibit curiosity and humility. Most companies hire for role, and then try to squeeze people into their culture. I have had more success hiring for culture, and then training for role.
With a great team in place, you need to lay the foundation by building a psychologically safe environment. Psychological safety is the belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns, or mistakes. It seems counterintuitive that we need safety to enable couragiousness, but your team cannot take bold action without it.
Psychological safety can be measured – we use assessments designed by Amy Edmondson, a pioneer of the field – and the simple act of measuring it sends a message to your team about how important it is. It’s Management 101: what gets measured gets managed.
Once your baseline is established, you can then introduce interventions to improve psychological safety, and measure their efficacy. I have had success at multiple ventures with “Failure Fridays.” These all-hands meetings celebrate our failures for the week, and focus on the learnings that came from them. If you want anyone to volunteer to share their failure, though, you need to lead by example, which is why I always go first.
Upon a foundation of psychological safety, you can then build a truly high performance team by cultivating a feedback culture – about which I have written in much greater detail.
Your team’s high performance must align with your organization’s purpose. My teams co-create mission-vision-values statements, and we revisit them frequently. Every new hire learns them during the hiring process, and then becomes a co-creator of the next iteration. When faced with a dilemma, we look to these statements as our North Star to help us make hard decisions from complex options.
To ensure that this high performance is sustainable – rather than leading to burnout and turnover – you need to create work-life harmony for your entire team. I have had success with flexible work schedules, flexible PTO, and repeated emphasis on everyone taking care of themself. Here it is crucially important to lead by example, so I include exercise, mental health blocks, and even naps on my shared calendar for all to see.
Finally, building, leading, and executing a purposeful venture should be fun. Sometimes it is hard to find room for fun when all of your work seems to be mission-critical – so you have to create room. Become your company’s Chief Fun Officer, or – if that isn’t your jam – appoint one. Or make it a rotating role! My ventures have had fun holding weekly tea times, and singing our performance updates.
How do you balance your parent and CEO roles?
There are so many similarities between growing startups and growing small humans! Here are a few principles by which I try to abide:
- Put on my own oxygen mask first: take care of my physical and mental health to ensure that I can be my best self to my family and my team.
- Create hard boundaries for family time that are respected by my team – and respect theirs as well.
- When with family, stay 100% engaged; resist the temptation to check in on Slack. I struggle with this one the most.
- Find areas of alignment: e.g. when my youngest child was born, executive 1:1s became joining me for a stroller walk.
- Automate/outsource all of the banal stuff that adds unnecessary cognitive load – scheduling, housework, etc. – so that I can focus on quality time with my family and team.
- ABL – always be learning. Children, partners, and startups all grow and change rapidly. Today’s optimized routine won’t be tomorrow’s. Maintain frequent, open communication about how it’s going with my partner and my team.
If you could put one message on a billboard for all other climatetech founders, what would it say?
You are not alone.
Solving climate is a big, hairy, audacious challenge. Together – and only together – will we build the sustainable, prosperous, equitable future. You got this. And we got you.
