Fast times at cleantech high
Uplift’s first “investor” was Uncle Sam – the Department of Energy to be more exact. We received our first (nondilutive) $150,000 from the American Made Challenge (AMC) Solar Prize (Round 3, 2020) administered by the National Renewable Energy Laboratory on behalf of the DOE. Its second independent source of capital was Cleantech Open (CTO), a national incubator that named Uplift’s technology a 2020 West Regional Winner and awarded it a cash prize.
After coming from a free booth at RE+ courtesy of AMC, and now heading to a free booth at Verge as a former CTO cohort member, we think it is a good time to reflect on those experiences and how we have relied on them since.
The “Clean Energy XPRIZE” and the “Startup MBA”
AMC prizes are modeled after XPRIZE competitions. These competitions invite technologists to solve a hard problem, offering a no-strings-attached cash prize to the winner. The first XPRIZE, in 1994, awarded $10 million to Mojave Aerospace Ventures for its breakthroughs in private space flight. Likewise, the DOE offers various prizes for breakthroughs that advance solar energy and other interesting clean energy technologies. It opened its first Solar challenge in February 2018 and is now on its sixth round of the AMC Solar Prize
CTO is more like an annual (every summer) executive MBA program, but for startups. One hundred percent (100%!) of promising startups need help defining, messaging, and modeling their business idea.* Since 2005, Cleantech Open National has trained over 3,500 entrepreneurs from over 1,800 early-stage clean technology startups. They are the Harvard Business School for technologists, but as a crash course.
*That last paragraph is an “elevator pitch” I made up for CTO. I learned during my CTO Summer to “blast the quant” up front to explain the importance of the problem solved by the business. I 100% made up that statistic, but I am 100% certain that it’s true.
Some Pain, Big Gain
Both of these opportunities are huge for a clean energy tech startup, but neither are easy.
Once you are in the process, the requirements are rigorous. AMC is a competitive race to the finale in under 12 months. To get to the finals, you have to demonstrate real progress with a working technology prototype and a commitment from a willing customer who will invest in you by trying it out. CTO is more “back to school” with lectures and homework. Every week you must deliver business strategy documents, from a business canvas through an investor pitch deck. Participating and delivering requires that you make serious time set-asides from the day-to-day of starting up your startup.
Both of these programs are invaluable, however, in that they bring structure and deadlines so that your business can “find itself.” There’s some navel-gazing required to complete both the AMC submissions for each round and the CTO weekly assignments. But mostly, these programs are helping your business establish the "right" business goals, i.e., the ones that progress you towards selling your whatever-it-is and changing the world.
Of the many positive take-aways from both programs, we offer what we see as the top three. First, by interviewing potential customers, you will learn fast whether you are on to something. Nothing is more important to the early days of your business idea than customer discovery, and both programs demand you invest early and often in doing it.
We all want to believe that we can imagine our customers and the reasons our specific technology will be the most important product that ever happened to them. All of us are wrong. Nor can you validate your idea by running it by someone you think is smart so they can tell you it’s not crazy. And one or two conversations with potential customers will not be enough. You need to start by reaching out to dozens of strangers and ask them to give you a few minutes to discuss your product and how it might interest them. After you gather those data points, you will realize that you need more reactions – hundreds, or if your market is a smaller number of players, then responses from at least 80% of them.
Customer discovery is daunting, and often unpleasant. Yet, the more you do it, the more addicting it becomes. Every reaction is a meaningful fact about what your product should be, and what it shouldn’t be.
Second, you will get your message straight. Your message defines your business’s reason for being. Establishing that, alone, is the means of first impression with customers and investors. It better be compelling, or it will also be your last.
Anything too long and too technical will definitely meet with glazed eyes and deaf ears. Intuitively, we all know that. But most of us don’t hear the conversation in our heads until we trot out slide decks and videos and business summaries. What’s more, you only have a moment to capture the attention of your listener by inspiring or intriguing them. Most of us don’t have marketing degrees, and the words and images that will ignite the neurons in our fellow humans rarely come naturally. The AMC network and the CTO coaches have a great deal of experience with both form and content of the elevator pitch, introductory pitch, and longer-form pitch. Their feedback offered a safe place to find out what people need to hear, and what words are just noise.
What Uplift appreciated most about the coaching we received on pitches and slide decks is learning the balance within the message. Our number one lesson on pitching, which was surprisingly difficult to internalize, was to not get lost in our technology. We make power electronics. It is hard to avoid talking about just how great it is to hit that voltage sweet spot on your bus bar. (If that statement turned you on, call us!) Your audience wants the punchline first, and the benefit has to be instantaneously obvious with few words and a picture. Those words can be a number: “20% more power! 30% less cost!” Or it can be benefit that everyone can relate to: “Make your solar panels snow-resistant and bird-s**t proof!”
Third, you will confront your weaknesses. As a startup, you don’t have a huge team with all the skills required to have all the answers you need. The AMC forces a technology sprint from proof of concept to commercialize-able prototype. If you think the R&D will be a straight line from idea to execution, go find your fortitude and courage (because it won’t be). Beyond identifying technology challenges and perhaps skills gaps for your development path, you will also learn what you don’t know about running a business. Maybe you have a patent lawyer, a website developer, a graphics designer, a product manager, a sales team, a fundraiser, a grant writer, a manufacturing expert, a regulatory expert, an accountant, a financial modeler, a payroll and benefits administrator, and someone to clean the bathrooms and stock the coffee. I am sure that long list has omitted a few talents you will need to function and scale up as a business.
The work we did in CTO made us account for all the bases we needed to cover, and, more importantly, at what point we needed to worry about them. Through AMC, we put ourselves in the place of the dog that catches the car fender. In other words, when we do make something that works, what will it take to make it and put it out in the real world? Doing so has allowed us to recognize growth pain points in our technology envelope and go-to-market strategy, and explain to investors our plan for addressing them.
Better, faster, cheaper is the holy grail. These programs make you move fast. They can make you better, but even with free money, the lessons do not come cheaply.
Uplift’s regret is that we did not set aside time to slow down and rebuild our strengths in the image of everything we learned. Moving fast has a downside, in that you don’t get all the upsides of being deliberate. Learning is a process, however. Even if you understand the lesson upon first hearing it, implementing it often takes trial and error. Because these and other incubator programs are so focused on exposing you to the gamut of business development and growth stages, in a short amount of time, they forget to emphasize the value of reflecting on what you learned how to take advantage of it.
Since 2020, we have continued to achieve technology milestones. In “doing” our business, the important lessons we gained from our experiences in 2020 eventually sunk in. But we will admit that we did not grip those lessons in the most advantageous sequence. Sure, we needed to build a great product, and we were driven to do so by the premium in our tech culture of being an overnight sensation. But if we had doubled down on more customer discovery and better messaging in the first half of 2021, we would have established our funding and customer opportunities sooner. Those details are as important to your technology development and survival as the smartest engineer you can find.
A time out feels expensive when time is of the essence. But making time for a retreat or introspection is probably the most valuable investment you will make in your business. The pitch deck you make at the end of three months of CTO or to showcase your progress in the AMC finals is only the beginning of the most important step you will take as a business: defining your product and purpose.
Train Like a Champ
If you have been kicking around ideas for a clean technology or had a research breakthrough you want to try and commercialize, don’t be afraid to throw your hat into the ring. The application processes for both AMC and CTO ask some hard questions, but neither require the detailed business plans and budgets you would have to submit in a government grant application.
We have some tips if you are considering either or both programs.
Do some advanced research. Customer discovery is just what it sounds like: calling people and finding out if they would be customers and what they think customers would buy from you. You don’t have to be accepted into an AMC challenge to tap into the network posted online. Or do some searches on LinkedIn. Lots of people you have never met before are happy to chat about an idea, and in exchange share what they know as a matter of technical expertise or their experience with a particular industry. This kind of research is low cost but will definitely make your application stronger. And it will put you ahead of the game once you start the program.
Plan your big idea as a small idea. You know you are on to something game-changing with all kinds of applications to improve life on Planet Earth. But don’t overpromise yourself, because you will set yourself up for failure. As power electronics, we are an enabler to all kinds of energy generation and storage innovations. We had to choose the market segment we would reach for first (off-grid solar). To be all things to all people takes time, and certainly more than a year. Use the customer discovery to discover your minimum viable product. You can certainly preview your path to world domination to whomever will listen. We cannot emphasize enough, however, to focus your customers and investors, and yourself, on what you plan to take to market first. It will help you demonstrate success in achieving the goals of the program. That success will become a building block in your empire.
Finally, make friends with other startups. Some of them may be customers, but almost all of them will be allies. There is no better way to forge a connection than through shared trauma. All of us on the roller coaster of building a new technology and the business to go with it need others in our lives who can sympathize, commiserate, and appreciate achievements. Your mom may understand you better than anyone you know, but she probably doesn’t “get” your battery chemistry or why something called the “Inflation Reduction Act” has completely changed the outlook on your clean tech business. Mentors may have wisdom to share from past experiences, but others going through the same thing you are at the same time will have notes on their successes and failures that will hit home. Don’t be afraid to share your own stories and it will come back to you in spades.
The Final Set
Uplift made it to the finals in both AMC Solar Round 3 and CTO. We did not win the grand prize, but by then the money was just a secondary benefit. We came out stronger, and better positioned to recognize our opportunities as a business and take advantage of them.
AMC and CTO are just two of the many incubators for big ideas, budding entrepreneurs, and successful founders looking for the next challenge. Some promise networking and introductions to investors, but that’s not their primary value. Find one that is right for you and join in.
And don’t forget that these programs are great places to make friends. As we head to Verge next week, we can’t wait to see members of our program cohort and catch up. So please come by our booth and reunite if you are an old friend, or introduce yourself and become a new one!