There has been a chronic lack of successful venture investing in the energy sector. With few other paths for innovation, this has led to a near complete lack of meaningful progress towards any of our global climate goals.
This sector is projected to be worth $4.3 trillion by 2030, more than any other sector.
It is also the sector with the greatest opportunity to turn around our carbon crisis. So why are we stalled despite the prize and the urgency?
In 2016, MIT published a post-mortem on the cleantech industry that argued venture capital simply doesn’t make sense in energy. But it’s clear you can build enormous businesses in energy, and they don’t all have to be focused on highly capital-intensive extraction and distribution
For example, Sonnen recognized the need for residential storage in the German market, where solar had relatively high penetration. They sold to Shell for $180 million
Another example is in the oilfield services market. Schlumberger spotted the opportunity to quantify the level of oil held in rock and have since built a $48 billion company.
The best way to build businesses is by identifying and addressing constraints and bringing together existing technology to address market inefficiencies.
