General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsGigaom: What 60 Minutes got right and wrong in its story on the “cleantech crash”
1). RIGHT: From a purely venture capital perspective, cleantech has been ugly and it has crashed. I dont think you can argue rationally that this hasnt happened; again, only in the venture capital, Silicon Valley ecosystem. And yes, there are a couple exceptions that emerged from the Valley that made it through, like Tesla.
As Ive covered many times over the past six years, venture capitalists lost a lot of money on cleantech (Kleiner Perkins being the poster child of this), and many have now left the sector. At the same time, entrepreneurs widely know theres very little money available for early stage cleantech startups anymore, and the limited partners that back venture funds dont want the VCs to invest their money in anything called cleantech these days.
There was a very real bubble and bust that happened, though there are still firms around that have evolved and are sticking with it. Will it come back like the second wave of the internet? There will be some more successes in the future but I dont think the equivalent massive amount of money from VCs will emerge again.
A lot of the 60 Minutes piece was trying to cover this Valley aspect and I think they did a good job of that. The VCs did lean on government connections and support at times, and they made a lot of mistakes.
Vinod Khosla is also the right guy to talk to, as hes the enigma that says his firm is going to continue to fund the cleantech sector at an aggressive pace, despite the difficulties. It was probably pretty hard to find a VC that would admit on camera that she or he made a bunch of weak investments in cleantech and now, hat in hand, is exiting the scene.
2). WRONG: Unfortunately, playing up the taxpayer-funded government green-flop angle in the piece was both stale and overblown. Its been covered ad nauseum not only in the political arena, but also in more mainstream pieces like the Wired one two years ago.
There were a few companies in manufacturing that were backed by the Department of Energy loan program that were clear mistakes Solyndra and Fisker but some of the other companies mentioned in the piece were either very minor losses or also still have promising tech that is being developed under a different owner. Leslie Stahl named 9 companies that didnt do well for various reasons (not all from the loan program) and then dramatically declared shes exhausted from naming them all.
As Michael Grunwald has pointed out in his book The New New Deal, government support from the Department of Energy through the stimulus has created a large amount of jobs over the years. Beyond the stimulus, solar panels and wind power have reached record levels in the U.S. in the last year and thats also thanks to U.S. government support. Even within the loan program, there were more wins than the 60 Minutes piece let on, like the Ivanpah solar farm that created a lot of jobs outside of Las Vegas. The U.S. government needs to give more support to next-generation energy technologies, not less.
Part of the problem with the 60 Minutes piece is that its combining the story of U.S. support for clean power and energy efficiency, with the Silicon Valley story. Theyre totally separate and different. The subhead of the piece is a prime example of the confusing aligning of those two things:
Despite billions invested by the U.S. government in so-called Cleantech energy, Washington and Silicon Valley have little to show for it.
Um, does that include the huge gains in wind farms and solar panel projects in the U.S., or does that just mean that Solyndra didnt work out? Because, Solyndra happened in the summer of 2011; two and a half years ago. The underlying problem is that cleantech is a convoluted term that can mean many things, and isnt all that helpful as an organizing group. Lets figure out in 2014 if we should kill that term or not.
http://gigaom.com/2014/01/05/what-60-minutes-got-right-and-wrong-in-its-story-on-the-cleantech-crash/