This Week in Startups - VC Sunday School: first-tier investor behavior + Climate: Dangerous Ventures' Mike Lin | E1385

Episode Date: February 13, 2022

Jason and Molly begin this double-header Sunday show with a VC Sunday School segment on top-tier VC behavior (01:38). You will learn: 1. How first-tier VCs compare to second-tier VCs 2. When VCs should intervene in a portfolio company 3. The difference between micromanaging and good governance 4. Jason's framework for ensuring alignment: Mission, Plan, Strategy, Tactics 5. Why good Board Members remain calm and positive Then, Molly is joined by Mike Lin from Dangerous Ventures for a This Week in Climate Startups segment (22:00). You will learn: 1. What Mike learned from working at Makani Power (acquired by Google X) 2. The potential of "muscle-powered" energy and its limits 3. Lessons from the failed Potenco generator & One Laptop Per Child project 4. How Mike got himself fired from Apple for insubordination 5. Why Dangerous Ventures is backing "Dunkirk" climate solutions Show Notes: (00:00) Jason and Molly tee up the show, Top VC vs. Second-tier VCs,  Mike Lin from Dangerous Ventures (01:38) The behavior difference between a top tier VC and a second tier VC (09:23) Where VCs should actually intervene in a portfolio company, micromanaging vs. good governance (11:47) First Republic Bank - Discover what a long-term financial relationship can do for you. Visit https://firstrepublic.com/startup today to learn more. (12:50) What needs to be in alignment Mission, Plan, Strategy, Tactics  (14:58) Why good Board Members are calm and positive (19:30) Jason and Molly intro the This Week in Climate Startups segment (20:40) Superside - Go to https://superside.com/twist to get $3000 or more in credits when you sign up for an annual subscription (22:00) Mike Lin from Dangerous Ventures discusses his previous startup experience at Makani Power (26:09) Can muscle-powered energy come back? (27:57) Pulling Power from the Sky: The Story of Makani (30:56) Notion - Go to https://Notion.so and use promo code TWIST to get $250 off its annual team plan (32:28) Lessons from Mike's time as the founder of Fenix, which was bringing power to low income economies, and the lessons from the failed Potenco generator & One Laptop Per Child project (36:35) How Fenix rose out of the ashes of his previous startup, Fenix's smart battery (39:55) Why Mike Lin was fired as an Apple contractor for insubordination (43:39) Who is going to actually solve the climate crisis? (46:15) Mike's ambition at Dangerous Ventures and why they are backing "Dunkirk" climate solutions (53:43) Managing a micro-fund and using SPVs to build initial momentum Check out Dangerous Ventures: https://www.dangerous.co/ FOLLOW Mike: https://twitter.com/tweetmikelin FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

All right, everybody, welcome to another Pat Sunday edition of this weekend startups. First up, we do another edition of VC Sunday School. Molly is going to ask me about the difference between a top tier VC and a second tier VC, and we double click on it and get into what happens in a board meeting. Do you discuss tactics, strategy, the plan, the mission, and what it means to be a great board member and investor in a startup? Then I interviewed Dangerous Ventures General Partner Mike Lynn, who's a climate founder and investor and has some pretty impressive stories like the time you got the boot from Apple for being insuborded it.

Oh, it sounds like my kind of guy. I like them already. All right. It's going to be a great show. Stick with us. This week in startups is brought to you by First Republic Bank, where everybody gets a personal banker who's reachable by phone, email, or text, and through First Republic's banking app. Learn more at firstrepublic.com.

Member FDIC, Equal Housing Lender. Superside. Ambitious companies need the right design partner in their tech stack, one that doesn't sacrifice quality for speed. Get $3,000 or more in credits when you sign up for an annual subscription at superside.com slash twist. And, Notion is one place for notes, docs, docs, projects, and everyday work that goes way beyond a wiki.

Go to notion.s.O and use promo code twist to get $250 off an annual team plan. So I think this is a question that has started to come up because I'm a new investor trying to make my name. Your name, however, is fantastic. And so we have this sort of interesting dichotomy that was well stated on Twitter the other day, which was, let's see, it was Ali Muhammad, right? I'm sorry, Ali Resnick is the CEO of Belong, a startup that's innovating the model of long-term rentals and homeownership, evidently. Last, about a week ago, he tweeted this, and I want to ask you about it.

The difference between a top-tier VC and a second-tier VC is so massive that I'd go as far as saying that I'd choose to bootstrap if I couldn't raise from the good ones. And then when asked about the specific differences and the replies here was his answer, which was a top tier VC is at worst unhelpful and best improves the odds of success dramatically. A second tier BC is at worst catastrophically invasive and at best unhelpful. Got it. So first of all, what is the top tier VC versus a second tier BC? Yes. Like how would you define that, you know?

Yeah, I would start with, who hurts you? Who hurts you? I mean, this is a sub-tweet, right? Resnick, it's a sub-tweet. This is how, like, people back channeled to their board. So, like, the good board member on his board is, like, now taking aside the second-tier VC on the board. All right. Is that, yeah, I mean, is there truth to this?

Okay, so, yes, there is. Does he mean new ones? There's top-tier. So when we say top-tier and second-tier, are we talking about, reputation, are we talking about returns, etc.? Because are we talking about the firm's reputation or the individual's reputation? So let's just look at that for a second.

Yeah, let's just say a helpful VC versus a non-VC or a legendary VC with a lot of experience versus a neophyte one. And here's what happens. Great, the more successful you become as a venture capitalist, the more comfortable you are in your own skin, the less imposter syndrome you have, and the less pressure you feel,

because you know you're good at. And this is one of those really rare instances where the feedback loop on how you do as a venture capitalist is delayed by, how about a decade. So imagine if we were like a basketball team and we played for 48 minutes, but we didn't know the score, we didn't know the fouls.

We just found out 10 years from now what the outcome of the game was. I think we did good. I think we worked hard. I think we put the ball in the basket. But everything is being kept secret, right? So you couldn't see if the ball went in the basket or not. That would be a good way to think of it.

Like, yeah, like literally, there was some magic way to avoid seeing if the ball went in the basket and knowing the score. So what that does is when you start out as a VC, you can get very, very anxious, nervous, and then you start acting. strange because you're acting out of fear, as opposed to acting out of confidence and a focus on doing the important work on a day-to-day basis that we do as capital allocators,

which picking which ones to invest in and then supporting them as much you can after you have invested. So what is it that a top-tier VC can do at a company that's so great? Well, when you get somebody who's really good, if you're a first-time founder, they might help you avoid 10 common mistakes, each of which would have cost you weeks of work to figure out and have the risk of ruin or could be distracting, you know, and problems like that. In other words, okay, we should do a cruel accounting. You should use this accounting firm. Okay, we need a world-class IP attorney. I know one. Or we need HR support. I have the great person for that. Oh, you want to do sales. I know somebody who sets up sales teams for SaaS. You should read this

article, you should talk to this person, would you like me to introduce you to somebody who's done it before? All of that can be transformative for a first time founder. I see it up close and personal all the time where they're struggling because they're doing something for the first time, right? So the first time, you are, you know, I'm sure a real estate broker, and the first transaction you go through, you can make a lot of mistakes. So having a mentor can be really helpful. So, you know, pick whatever. Vets on a basketball team, the rookie. You know, there's all kinds of advice you can give. Now, what can go wrong?

Oh, my lord. Well, if the VC is second-guessing the founder and the founder says, hey, here's our plan for the next year. And the VC is like, what about doing this? What about doing that? Can we get a research report on this? Can I get these statistics? And all of a sudden, you know, some VC, and I hear this all the time when I'm on calls,

the people who are the, you know, seasoned individuals, they may ask one or two strategic questions for a board meeting. and then you'll have somebody jumps in the board meeting and they're just there to show how smart they are and then they're asking all these requests of the management team that takes so much time. And that can send... This is the catastrophically invasive part that Ryan referred to.

Yes. I'm sorry that Ali referred to. And the CEO of companies, it's generally accepted, serve at the behest of the boards. Now, sometimes a founder and their co-founders will control the board, so de facto they're answering to a board

which they control, but oftentimes they're answering to a board that they have to build consensus on, and that's where governance is a good thing. And so what if that person is on the board, creating these wild goose chases, wasting time, and generally making the founders in their management team jump through hoops. What I do, they present the plan. I say, great. Is there anything you're concerned about with this plan? Let's say we're doing planning for the year. anything you're concerned about, anything that we can be helpful with. And then maybe I'll look at the plan and say, I don't know, how many sales executives do you think you need to hit this plan? And what's your strategy for recruiting sales executive?

You know, I might ask a question just to hear their thought process, right? But other people will ask for data and studies and this and maybe we should do a group and it really gets annoying real quick. It's very interesting because it seems like, I mean, I think we should, I think on some level you can sort of take top tier and second tier VC out of it. Like there's certainly what you're saying is that if you're new, you can get anxious and you want to do this because you're trying to prove yourself. Right. However, it seems to me that a lot of this is really about understanding what your role is

in the ecosystem. Like your role is to support, but not like why are you trying to micromanage a business that isn't yours? Yeah, exactly. You're a shareholder in the business. You're there to make sure that the business is being run properly. The shareholder classes are being represented. but you're not there to run the company.

So it would be like, you know, Michael Jordan becomes a coach and he's on the bench and he's like, you know, decides he's going to get in the game and set a pick, you know, like it's just not how it works. You're not in the game. So you have to understand that line, yeah. And when you say you're there to make sure the company is run properly, even that is a nuanced statement, right? Like you are.

Yeah. But did we? You're also not. Well, no, you are. I mean, you would want to make sure that, like, we filed our taxes. We have directors and officers insurance. We have an HR department, right? So there are checkboxes.

Exactly. What are the checkboxes versus the like leave me alone? I think the checkbox items are things that have to do with proper governance, holding regular board meetings, doing proper accounting practices, proper legal practices, proper HR practices. These are blocking and tackling and infrastructure things that are so easily accomplished that if they're not getting accomplished, you have to really wonder, like, do we have the right CEO here if they can't get those things dialed in?

So, you know, and if it's the first time founder. And then what is it not? You know, like, it's not, I want you to hire this person. You should be managing like this. You should be talking like this. You should be. I would say it's not, you know, maybe. You know, the day to the day, tactical.

I would, you know, if you look at there's a mission for a company. There is a plan that you're trying to execute against. that serves the mission. And then below that mission and plan, you have strategies to fulfill that plan, and then you have strategies that are backed up by tactics. Tactics tend to be something you do on a day-to-day hourly basis. The strategy tends to happen in quarters,

and the plan tends to be done for a year or two, and the mission tends to be done for a decade. So I like to look at that mission plan strategy tactics. Sometimes you'll have a board meeting and get into tactical issues. hey, how are we going to sell this product? Sometimes you'll have a board meeting where you review the plan, hopefully at the beginning of the year, hopefully you're touching on that plan every quarter.

Hey, how are we tracking against the plan? You could talk about strategies, right? I see most of the time people are talking about the strategy and the plan. The mission tends to not change that often, but you might have every couple of years, hey, our mission's still the same. So I think the higher up, the big picture it is, the better. And then sometimes a founder will say,

Listen, I'm having a tactical problem. I can't hire developers. What are you seeing across your portfolio as a strategy for that? Or a tactical issue. Hey, we're having patent lawsuits. How do we deal with them? We have patent trolls, right? So it can get tactical, and you can be super helpful tactical.

So I've been through things now after 11 years where I can just tactically tell somebody, pick up the phone, call this attorney, call this accountant, call this headhunter, and they'll solve the problem for you in all likelihood. So I can just point to where the solution is. But on strategy, that's a conversation, right? and the plan is a conversation. And so I like to keep it, you know, as high up the stack as possible. If the founder wants to get tactical, sure.

We can have a tactical discussion. Yeah. Listen, in business and in life, long-term relationships are the key to success. And First Republic Bank believes they're also the key to your financial health and well-being. That's why every First Republic client gets their own personal banker to serve as their guide, confidant, and single point of contact. Have you ever had money issues? not been able to reach your bank quickly? I have. And it's absolutely brutal. We all know that.

With First Republic, that will never be a problem. You can reach your personal banker via phone, email text, or through First Republic's banking app. Ashley is a managing director on my team and has worked with First Republic on one of our fund accounts for almost four years. And she loves their customer service and support. Again, this is not a one-time transactional situation. It's a true partnership you can count on for years to come. In fact, seven out of ten, First Republic bankers have been with the bank for over 10 years. Discover what a long-term financial relationship can do for you. Visit firstrepublic.com today and learn more. That's first republic.com. Member FDIC, equal housing lender. I love that though. Mission strategy. Say those again. Mission strategy.

So you have the mission way up here. Yep. And then you have a plan that you create to fulfill that mission. After that you have the strategy strategy and then tactics. And then tactics. Write that down, everybody. Yeah. Well, like, a tactic might be, if we were building a, if we were building a content site, there might be tactical things like social media and SEO, right? And you can hire an SEO specialist. You can hire a social media specialist, a content creator.

Then the strategy might be, okay, our strategies, we want to raise our profile with this group of people. Yeah. And then the tactic might be, okay, we're going to do blog post, SEO, a podcast, content marketing, paid marketing. Those are all the tactics to fulfill that strategy. We want to raise awareness because we sell into, I don't know, we're selling into banks.

So we need to raise our profile with banks. We've got to need a content marketing strategy and a page strategy. And then the details are there. So sometimes they'll actually use a board meeting to present the strategy of their go-to market, right? And then the plan is always there, right? So sometimes people will, if they're doing six board meetings a year, have the plan come up every board meeting. Here's we're tracking against plan. Here's our, you know, org chart.

Here's the positions we're hiring. and you're really there. The board meeting, there's some check boxes to make sure we're doing things right on a legal basis, et cetera. And then there's,

oh, how are we doing according to plan? Yeah. And is it accountability? You know, most founders don't need accountability because they're accountable to themselves and their teams.

So it really is a chance to just have a really high level discussion about the plan, how we're doing against it, and if there's any way we can help and where are you stuck, right? Yeah, totally. We have,

in fact, an interview that was done back on Twist episode 1141 with CircleUp founder Ryan Caldbeck talking about the board member from hell that constantly, a VC constantly disrupting board meetings, asking Circle Up's team to do his own outreach and research, trying to sabotage a deal. I mean, it seems like there are lots of layers. Falling in from the back of a cab and complaining. I mean, being negative. Wow. I would say being negative is, you know, I was told early on when I started.

I started doing these board. I started joining boards like Dine and some other ones, Savings.com. And I just did it because I got basically paid in equity before I was actually writing checks. And they told me that my enthusiasm and my energy and my positivity was my superpower in the board meetings. Because you'd have some people who were just constant like Eeyore's, you know, like from Winnie the Pooh and oh my God, we're never going to get this done or whatever. And I was a founder. I was like, oh my God, we could totally do this. We'll get this and this and this. so we could get this done.

So I think enthusiasm and being a steady hand is the thing I've tried to at this age and my role in the industry, I try to be calm, optimistic, and really helpful, right? And keep the team motivated, right? So, you know, even when things are going wrong, that's where you really need your VC to even get more calm.

So when I worked, I worked on an ambulance, and I would watch these, when I was a volunteer, Bravo in Bay Ridge, Brooklyn, I would watch the people who were EMTs and paramedics work. And I was amazed at how calm they were when everybody around them was screaming because somebody was bleeding or having an asthma attack and they couldn't get oxygen or they were choking

or they were having a heart attack. And that ability to come in and become more calm in the eye of the storm is something that I have really worked on in my career. So when things are really challenging, I get into a very Zen state of, okay, what's the plan? Let's assess the situation

and let's work it out, right? I think that's really important in a board member. Yeah. Because if you're having a hard time as the founder and things are, the building's on fire and then somebody's like,

oh my God, the building's on fire. You're freaking out. It's like, don't panic. How many people are in the building? Don't panic. Right.

How many people are in the building? Where are they? How do we get them out safely? Has anybody called the fire department? Where's the fire extinguisher? Let's go through this list and figure out how to save some lives here if the building is on fire

and how to put the fire. out and get everybody to safety. So there's like some process there that pilots or EMTs have to go through, right, to deal with challenging situations. And this is somewhat self-interested, but, you know, I don't, I like to think that my personality and style would lend, like, it doesn't, I don't think you have to be a super experienced BC, not to be a lunatic who's up in someone's business unnecessarily who panics, right? So to, like, maybe what he really means by. top tier VC is not, because I'm sure you could probably find somebody from Andreessen or Sequoia or something who panics and is up in your business. And you could probably find somebody from a smaller

firm or who's new at it who doesn't. I would say those firms are so good at what they do that they know how to hire for what I've described and, you know, in terms of what's good or whatever. So I do think that they have seen in those places that they mentor their partners to be good at this and they mentor them by showing them. So when I go to board meetings, I always bring a managing director with me. So Jackie and Ashley join me and you will start joining me as well. Sometimes I've had Presh or Marine or Kelly join me. And I'll ask the founder, hey, can one of my up and coming folks sitting on the board meeting, they're just going to listen so they can see how I behave in a board. You know, I can sort of teach them these things. And so there is a contingent of people who,

because they write the checks, see themselves as super important, maybe more important than they are. and maybe they have an outsized view of themselves and their ability. You know, you have to come to this, you have to come to this job, this vocation with the understanding that you're not a player anymore. You're not on the field and that you're here to support those people who are. And if you come to it with that intentionality of just how supportive can I be? How can I help them avoid mistakes? How can I help them stay focused? How can I help them with things that are scary or challenging?

you know, you just want to be as supportive as possible and not be a lunatic like this person was. The circle of the founder talked about. But some of these people get high on their own supply, right? And I think because I was a journalist first and an entrepreneur myself, I just never thought, like, I knew better than the founder who was in the cockpit, right? If you're in the cockpit and you're flying the plane, like, you understand how this plane flies probably better than me who's sitting in the first row, you know, as a board member. I tend to defer to the founder and they're, you know, it's their company. They have to make these decisions and just. Try to be as supportive as possible and not be distracting.

The distracting thing is really, really brutal. Okay, so you have an amazing guest today. Let's talk about who's going to be on the program today. Yeah, I'm very excited for another Sunday edition of this weekend climate startups. Next up is an interview I did with Mike Lynn, who is a general partner at Dangerous Ventures, which is a small fund now getting bigger, focused on climate solutions. A lot of focus on adaptation and resilience here, which is interesting. He describes it as a Dunkirk strategy for approaching climate tech,

almost like a managed retreat in terms of adaptation and resilience. But what's interesting is that Mike is a serial climate founder. And he's had a couple of successful exits in the past. He worked at Makani, which is basically airplane-based wind kites. Yeah, wind farms. McCona was sold to Google. And he has another one called Phoenix. He also has some amazing stories about how he ended up being a founder.

for example, he was fired from Apple's climate team for insubordination. Oh, wow. And it led him to become a climate entrepreneur. So that is coming up after the break is a really good interview. Stick with us. Are you having design problems? Well, you need to check out Superside. SuperSide is a great alternative to old school expensive agencies and messy talent

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So here's your call to action. Go to superside.com slash twist and get 3,000 or more in credits when you sign up for your annual subscription. This is a twist exclusive and valid only for the next three months. I want you to go to superside.com slash twist. that's S-U-P-E-R S-I-D-E dot com slash twist to get $3,000 in credits when you sign up for that annual plan. Welcome to another edition episode this week in climate startups. I'm super excited to talk to Mike Lynn, who is a serial entrepreneur in the clean tech space

and also investor. So that's super great because so far I've mostly talked to clean tech investors or climate tech investors. And you have both ends of the spectrum. So I think we're going to have a great conversation today. Welcome, Mike. Thank you so much. It's great to be here. So let's start with the startup side, the part where you have actually built and exited climate tech startups. Because I feel like that is super inspiring because I keep joking that there's like three climate tech investors for every one startup.

You've done it. You can give, you know, future founders a little bit of a sense of the the travails, the pitfalls, the successes. Let's go through them, I guess, one at a time. Tell us about McCannie, which was cleaning. energy and acquired by Google. Yeah. Kind of a like a cool kite-based. Totally. Yeah. McCona was founded and came out of a very exciting startup studio of sorts before,

you know, the name really existed called Squid Labs. And this was founded by a good friend and dear mentor, Saul Griffith, and a bunch of really smart folks coming out of both the MIT Media Lab and the Stanford engineering program where I, you know, I'd done my undergrad and master's. And so it was very much. this ivory tower of smarty pants folks, but it was really a culture of builders.

And they were doing consulting on everything from solar pavement for some high north individuals who had some crazy idea to the idea of a food replicator, which now, of course, you know, Freiburg and, you know, Kana are doing. It's really exciting that these ideas were kind of in the primordial ooze a decade or so ago. and as kite boarders and avid, you know, kind of water sports folks, they were out there playing in the water and realized, you know, why can't we just harness the high altitude wind? Why do we have to just, you know, play around with small wind turbines just, you know, a few meters off the ground? And so that's where the idea of an airborne wind turbine was born. And I started actually off at one of the other companies within Squid Labs called Potanko.

And this was a human power generator concept using muscle power to produce electricity, but for applications in the developing world. And so this guy by the name of Nicros Nicroponte at the Media Lab started this nonprofit called the One Laptop for Child Initiative. And they had this beautiful, you know, smart laptop. Kind of a thing that I reserve it of. Yeah, it was really cute, really fantastic initiative in concept. but they didn't really fully realize, you know, to get these things out there, there needed to be power. So it was a bit of an oversight. They had a little hand crank generator on the side.

And so there was a number of concepts that were being born at that time. And I was one of the first employees there, raised a few million dollars. But that company was actually a massive, massive failure. And that was actually my first entrepreneurial experience. I mean, isn't that how it's supposed to do? Like, that's how it's supposed to go. You're supposed to have a massive failure and it makes you better. and that everybody wants to invest in you because you're a seasoned, like a battle-hardened founder.

Yeah, totally. And that team was able to be parlayed into, you know, helping Makani get off the ground as, you know, it was a group of really talented engineers, entrepreneurs, you know, technologists, and a myriad of different, you know, talents under one roof. We were working out of the old control tower at the Alameda Air Naval Air Base. And so we had just this massive runway where, Makani was able to, you know, procure a fire truck, loaded up with water, so it was nice and heavy, and launch these high altitude, you know, kites first initially flying them around in loops and circles and being able to generate power on the ground. And it's since evolved into a whole series of other really interesting technologies and eventually acquired by Google and brought into Google X. I want to ask a whole bunch of more questions about Makani, but I want to go back to the muscle generated energy thing because.

Can that? Because can that come back? I mean, I was thinking, I actually had a conversation with somebody who, like, lives out in the desert, way off the grid, right? They're figuring out all these crazy methods for energy storage. Like, well, if we can get sand to drop here, you know. And that's one of the things we were saying is like, why can't a soul cycle class power the building? All the classes happening. It can certainly power part of it. And that's kind of where, you know, energy literacy and being able to understand. you know, what is a watt, what is a watt hour, and how do you build this kind of vocabulary and this intuition into early, you know, childhood education and STEM, steam classes? Because, yeah, you can generate actually a lot of power. Anyone who's into cycling, they may have that watt meter on their bicycle, they can know, they know they can generate a lot, a lot of power. But in fact, over a course of a day, a small child could pedal a bicycle, pull a little, pull, you know, kind of almost like a top, spinning a little micro generator and produce

enough electricity to run their laptop. And so the concept is that, you know, it's, it's not a lot of energy, but it could be massively meaningful and transformative for somebody who's living in, say, rural, you know, Kenya, who has maybe a small, you know, efficient tablet, netbook, laptop, you know, smartphone. And so it was just a couple minutes of pulling could give you, an hour's worth of, you know, talk time on a phone or compute, you know, on a small network, that type of thing. Yeah. All right.

Well, let's go back to McCone. I mean, I do still think like, you know, kinetic energy, like people going through turnstiles in the subway. I mean, there's just so much potential generation that could be like additive. So, okay, you're at McCona and you're building these massive, I mean, they look like planes with lots and lots of turbines on them. You're building a physical thing, generating power. At what point did Google come in with X and why?

Like, was this developing into a viable business? And they said, okay, we think this is a moonshot for transforming clean energy? Yeah, I was not close enough to the actual deal of it transferring on to Google. But yeah, it was really a bold science experiment. And in a way, it continues to be this experiment that there's this massive resource of energy. of high altitude wind, which in a way is really concentrated solar. You know, the wind comes from the sun heating up the earth and having the air currents move around building high and low pressure zones and all this fancy science, but the truth of the matter is the wind is moving

a lot faster in the jet stream and there's a lot more energy to be harnessed. And so it was a series of colossal and amazing failures. There's a brilliant documentary of sorts that if anyone's interested, you know, it's worth of watch. It's called pulling power from the sky. the story of Makani. So that's on YouTube. Where you can see the actual progress. What was really exciting about Makani was not only the science and the technology, but the attitude that, well, we can really try and do something transformative.

And who knows, it still might be another decade or so before it's really commercially viable. But, you know, it's lived within Google and Google X for a number of years. And it's my understanding that it's now transitioned onwards out of Google to, I believe, Shell, which will hopefully take it to the, you know, the next level. I mean, McConae, I do think, did become, particularly, I think, because of that X acquisition and X saying like, this is the kind of moonshot we need. I mean, I have been hearing about that company for years. It really did become a little bit of a standard setter in terms of that sort of outside

of the box thinking about energy. Absolutely. Yeah. And I think it was dreaming really big. And even if the company, you know, wasn't really a commercial success yet. And I think really the operative is yet. Right. You know, it may be, in fact, a 20-year journey.

If we look at solar and how the very first solar panels were just outrageously expensive. And the only reason they really came into fruition now on so many rooftops is because of decades of refinement and new chemistries and new science and manufacturing and scale that it's reasonable. So even a 10-year project is maybe not the right time scale to think about. you know, bringing something as, as kind of bold as that idea into the market. You know, you kind of need to think about even larger geological almost time scales. Yeah, which we will totally talk about when we get to discussing investing in climate tech solutions and that specific barrier among others. Startups need a central hub to store information and collaborate on work more

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Get the $250 off your annual plan and then see the magic. Let me know how it works out for you. I'm sure you're going to love it. All right. So one transformation down. Then you moved on to Phoenix, a company called Phoenix. That was a renewal. energy and fintech startup.

And again, like, I just really want to explore these companies that have sort of laid the groundwork for what is hopefully this upcoming generation of people who are exploring these solutions. For sure. Yeah. So Phoenix was, in many ways, rising literally from the ashes of my first startup experience called Patanko. So knowing that...

Colossal failure. I remember. Yeah. Colossil. It was a big smoking crater in the ground. Had raised several million dollars of venture capital from prominent. you know, angel investors, really, who wrote massive checks. It didn't go to really traditional finance because it was bringing power to people in the most

low-income, you know, emerging economies like, you know, Bangladesh, Uganda. This is where we were trying to bring, you know, this laptop into the world. And, you know, pardon the kind of twists and turns. But the notion was that Patanko failed because its business model was actually terrible. It was hitched to this one laptop per child initiative, a nonprofit that was very well-intentioned. It had massive donors and backers handing out laptops for free to the world's kids. And the notion was that, okay, this is an education initiative. We're going to educate, you know, billions of kids around the planet when they don't have, you know, schoolhouses and teachers and books.

The internet and mesh networking and this clever little device would actually just change their lives. Yeah. Great concept. But in fact, nobody there was asking. for it. This was somebody in an ivory tower kind of saying, hey, I've got this technology. I've got a hammer looking for nails. And what we found on the ground is we were doing this user research. And I kind of came from the Stanford Design School with a design thinking approach. Looking and observing and talking with folks, we realized billions of people around the world

are living at the base of the pyramid, but they're solving their own problems with their own solutions and they were using 10-15 dollar Nokia kind of candy bar phones that were really garbage to us at that time but they were using it to do really innovative things like

call a buddy and say hey what's the price of coffee that you're getting at this market versus that market or what fish do they have coming into this trading poster that port and so actually the aha was people don't need laptops they're not asking for these they're actually using cell phones.

And so we built Phoenix after Patanko failed because that company relied on the success of the laptops to sell human power generators. We realized the need was actually people want cell phones. They're actually buying them with their own hard-earned money. It wasn't some charity handing out cell phones or in this case laptops. They were finding these buying them. And multi-billion dollar telecoms were entering into these markets.

Kenya, Uganda, Tanzania, Bangladesh, to install like 3G, now 4G, soon 5G networks, where people only earn like a couple dollars a day. It's really super surprising and that there's in fact a fortune to be made at the base of the pyramid where you can help people do well while doing good. And so they were using these tiny little cell phones as tools initially for business. So just in the same way, technology adoption, you know, the first computers were massive and they were used by businesses,

the first fax machines and then laptops and now cell phones, it was business people that adopted them. So not surprisingly, folks in Africa were buying cell phones, but they had no way of charging them. The same problem with the laptop. And so we observed these entrepreneurs who would dig a car battery out of an old broken down truck and then charge it up somehow at like the local community center where there was a generator or power,

haul it back to their village and then open up a little micro power company charging 25 cents to charge up somebody's cell phone. Wow. It was like super inspiring and entrepreneurial, and that was the spark for Phoenix. The notion was that this is helping people rise out of poverty. It's rising from the ashes of this previous startup, and it's about rebirth and renewal,

that that mythical Phoenix, the firebird, exists across lots of cultures from, you know, ancient Mesopotamia to China to Africa. It was just this beautiful story about rebirth and renewal. So as a renewable energy company, we actually started by talking to people, observing what they were doing, solving their own needs, and could we give them a better solution? And that was, in a way, a better car battery. And so we designed actually a smart battery system that we called the ready set that could actually charge from virtually anything from that human power generator. We built a little bicycle pedal generator that could attach to any bike. But also there were solar panels, little wind turbines, micro water wheels, and if you had the grid power, you could use it as backup.

But it was designed first and foremost to be able to charge cell phones, which was really novel at the time. There were tons and tons of meaningful charities and even some startups and for profits that were distributing solar lamps and lanterns. Because that was really the call it the Western view of, okay, poor people, they need light. It'll help them, you know, study and, you know, kids can get an education. They can read. That's really great. But that's not what they were asking for. Right.

They wanted to power their cell phones. And so as Phoenix actually got started when the folks at Google approached us and said, you know what? We've got this secret project called the Android phone. It's $1,000 now. It's not even available in the U.S. Wow. Yeah. But, hey, we've got it.

Cool origin story. So amazing. They had engineers. you know, bringing duffel bags of, you know, brand new Android phones, the G1 Android phone with a little sliding screen. They were working with local non-profits, microfinance institutions, and the great thing is the local telecom, MTN, a big South African telecom carrier in Uganda,

to pilot smartphones with farmers and entrepreneurs to see, hey, how might you use this phone? What are you going to do with it? And so they were looking up farming, you know, kind of tip and tricks, how do I deal with this pest on my tomato plant? Oh, I got this weird fungus on my, you know, coffee plantation. And so they were doing that, but they were also watching World Cup soccer and like, you know, sports betting and all sorts of things that, you know, people do on phones. And so far be it for us to say, no, you can't do that. They're furthering their businesses,

but they needed a way to power these phones because they were literally blowing up, you know, $1,000 Android phones from car batteries and diesel generators. Yeah. So we got that start was the sparked by talking with folks and in fact a really interesting partnership with Google. The Grameen Foundation that pioneered microfinance in Bangladesh. The Grameen Foundation brought the capital to help actually finance these phones and then our power solution for these small whole stakeholder farmers and entrepreneurs. It wasn't a handout. It was actually built to be this sustainable model.

Yep. And so you were the founder and CEO of that. it was acquired. You had, that was your second exit, right, acquired by Angie Group. Yeah.

And then this is where we get to a story that I am dying to hear, which is the part where you go to Apple to work on the climate team there, and you get yourself fired for insubordination. In fact, can you talk? Are you allowed to talk about this? Are the Apple guys in a show open the door? Like,

da, da, yeah, this was now actually a decade plus ago. And in fact, it was before McCannie and Patenko, and Squid Labs and all that. Oh, it was? Okay.

So this was like origin, origin story. For sure, yeah. It kind of was the shove out of the nest that I think I actually needed. So I had studied product design and mechanical engineering at Stanford and the D school. I was always interested in the environment. And my dream job really came into fruition when I was in grad school. And so I was working at Apple. my second year of grad school.

And I had this incredible role with the environmental technologies group. It was a super small team at the time, just four people. I was really the fourth member. And I was tasked with really helping the company define its climate change and mitigation strategy. And I'm like, oh my gosh, I'm a newly minted grad. I can't wait to dig my kind of teeth into this. And I thought, you know, what better than to, email Al Gore. So he had just spoken at Stanford, given his, giving his inconvenient truth

presentation that eventually turned into a film. Right. And now here he is with his like Apple laptop with the glowing white, you know, logo. And he's like saying all this incredible stuff, we need to involve him if we are going to build this, you know, like, world changing strategy and who better than Apple to lead the charge and be really, you know, kind of a thought leader in this space. Mm-hmm. And so it was literally the first day. after I got my newly minted diploma, I walk into the Apple headquarters in Cupertino, and I get told,

don't back up anything. Don't, like, touch your laptop. You need to come into my office. It rolls downhill, and you are at the bottom of that hill. And I'm like, what? And you were the bottom of the hill because you had emailed Al Gore? As it turns out, it is a big no-no to go over your boss's head, your boss's boss's head, go over Steve Jobs' head,

to go to Al Gore who sits on the board of directors of Apple. Wow. And so I was fired for insubordination and circumventing the management chain. And I was a nobody at the time. In fact, I was as common practices in Silicon Valley. Like when you're brand new, you actually get hired on as a contractor. I had a badge and an Apple email address, but it had, you know, a little designation saying, oh, well, you know, you're kind of a second class citizen.

You're a contractor. Right. And so it's super easy for them to say, we're going to squire. wash this bug and just like get rid of this problem. Don't worry, Steve. Don't worry all these, you know, VPs and executives. This troublemakers is no longer a problem. And so I learned really the hard way how big corporate America works.

And I was always taught, you know, move fast, break things, you know. Hustle. I mean, it's like the entire founder culture is like hustle and push boundaries and. Totally. Yeah, you know, kind of ask for forgiveness, not for permission. And in this case, you know, I got whacked really hard. But that's actually how I kind of learned that the startup ecosystem rewards that kind of activity, that behavior. But maybe corporate America a little bit less so.

And so actually that's how I found, you know, the Squid Labs folks. Got it. So that, yeah. So, I mean, that is just, that's a very profound lesson. And I wonder how you have used it going forward to think about who is actually going to solve the climate crisis. Because, you know, when I started doing this reporting at Marketplace Tech, I, like, we did this whole week in the valley where we just like knocked on doors of the big tech companies and the big venture capital firms. And we said, you know, hey, you're all the people who told us you were going to change the world. Like, why haven't you fixed this yet?

Or what are you doing to try to fix it? And it was kind of astonishing how incremental it was, how risk averse it was. And it sounds like you had a similar experience where you're like Apple, you know, for a million reasons not including. including just like stupid hierarchy, will not be a leader here. I have to start my own company. I wonder how that ethos has evolved and continues to like drive you right now.

Totally. I think that, you know, the future lies with those people who have those big ideas. And all too often, companies that are very successful are more often than not looking to preserve what they have and not necessarily stick their necks out.

You know, no one really ever got rewarded for, I think, especially in corporate environments, doing something that was really, really bold. You know, you kind of, it oftentimes attracts a type of person who wants to just kind of keep their head down. And especially at Apple where the culture was, you didn't want to be cornered in the elevator with Steve Jobs. He would ask you, you know, what's your name?

What do you do? Like, this was a really caustic and toxic culture. And I came to learn that Apple was not the think different, you know, the kind of bold and creative company that I think most consumers think of it as. And that's not to say that Apple isn't a great company and make great products, but not necessarily the right cultural fit for a lot of people. So I think the notion is that, yeah, the next generation of entrepreneurs and startups will definitely be those that are bringing ideas, you know, into fruition. And then hopefully it's through acquisitions or through IPO that they'll be able to gain, you know, kind of the capital,

the resources, have that balance sheet behind them to make their ideas. is, you know, truly world-changing and at scale. So from being luckily booted from Apple, because who knows how your dreams would have been crushed on the inside, you become a serial founder, and now you're an investor. Tell me what your investing thesis is. Tell me what you're doing as an investor. You have an existing microfund called Dangerous Ventures. And then pulling back the curtain, you emailed me and basically were like, I want to start,

what do you call it, a Dunkirk of climate solutions and adaptations and resilience fund. So tell me what you're doing and what your ambition is. Yeah. So Dangerous Ventures. And I really have to credit you, Molly, for all of your amazing work and reporting that helped, you know, inform a lot of this thinking, which is that, yeah, the name dangerous comes from, you know, we're here to solve the world's most pressing and dangerous problems through, you know, venture capital and really supporting this next generation of entrepreneurs. And, you know, sadly, we are not doing enough fast enough. and hopefully there are many, many more funds at the early stage and throughout the whole value chain and ecosystem to support hopefully more and more entrepreneurs. And that, you know, in my experience as an entrepreneur, I just found that there weren't enough climate, you know, kind of investors.

And fortunately, as you said, you know, there's now more and more folks piling on. And we will hopefully see, you know, a million flowers bloom as a result. And surely there will be some failures. but that's okay and to be expected. And that the premise is that not only do we need to invest in big, you know, ideas like Makani, but also small ones and medium ones and everything in between, that not all necessarily will be a good fit for venture investors, but ideally, you know, there's this opportunity to, you know, fund these ideas that are going to, you know, get traction and then go

to scale. So you are currently investing out of a microfund. Tell me, like, before we get into the mechanics of the funding, what areas of climate do you think need more startups? I mean, I feel like this is sort of the fundamental philosophical question. And, you know, we recently talked to John Doer on the show, and he was basically like, look, as an investor at this point, we have to be thinking planet scale, full stop, right? So I wonder what your thesis is in terms of.

where you put your time in your money and where you try not to waste your time and your money. Yeah, I think that the Dunkirk kind of analogy of, you know, we... Will you explain that for people who didn't see the movie? Yeah, I'm in... Or, you know, read history. I'm by no means a historian or expert. But my understanding is that, you know, when the chips are kind of stacked against you, you do need to regroup, retreat.

And this was a massive evacuation effort during World War II where, you know, literally every tiny boat that was available, folks pitched in to rescue these troops that were stranded, you know, in Europe, such that they could fight another day. And I think that this is kind of where climate solutions, adaptation, resilience, mitigation, these are. all components to surviving and hopefully thriving in an ever-changing planet. And so I think, you know, an example of one company that we've invested in is called Phion Technologies. And so this is a brilliant entrepreneur, Suds, who is just so hardworking, really scrappy entrepreneur, who has a company that is looking at wildfire detection and prediction such that both firefighters and limited resources can be deployed to save people and property, but also that insurance companies can hopefully re-engage in areas where they had otherwise

just altogether given up. Because, you know, you can't just do that. There are still people, lives, you know, homes, businesses that are in these fire-prone areas. What are they going to do? We're not just going to give up on them. We can't just abandon them. So I think that, you know, to John Doors' point, especially for a person as prominent and, you know, as influential as he who command so much capital.

should be focusing on these world scale kind of solutions. And for those investors such as myself at the micro kind of early stage side to invest in other ideas that hopefully can grow to scale who can deliver venture returns, but at the same time might focus on a niche or an area that is also going to be incredibly meaningful, particularly to the lives of people. So not to ignore what that means for the individual person. person. Yep. And that, well, and I like that you brought up that you're investing in adaptation and resilience and mitigation, right? Because those are for people who are not familiar, sort of, you know, there are two sides of this now. There's the part where we want to slow warming and we

ideally want to stay below that one and a half degree climb. Hope Springs Eternal at this point. Thanks for nothing. Cop 26. But also that we, that climb, there is a degree of change that is built in. And there's going to be increasingly extreme, whether they're going to be parts of the country and the world that are uninhabitable and that we are going to have to figure out how to adapt and create resilient systems to survive the change that's already baked in. And I feel like this is clearly a company that's sort of in that category, making ourselves more resilient to this new reality. And that's an area where, frankly, I think there's a lot of value in putting funding in

because globally spending on adaptation is like a tiny, tiny, tiny fraction. and that can we're talking about saving lives today. Absolutely. And it's perhaps not very sexy to say, oh, we're going to retreat. We got to regroup. But, and I don't particularly like this, you know, kind of belligerent war kind of analogy. Like, oh, this is the climate, you know, fight that we're in. But it is, in fact, one for, you know, kind of life and limb.

You know, we only have this one planet. I love the notion of being an interplanetary species. But, you know, what's a part? easier to fix this home that we have than it is to terraform Mars. And in fact, maybe it's these things that we can do here to adapt that will inform how can we become a thriving, you know, multi-planetary species and make Mars inhabitable so that we don't screw that up too. So the notion that people are at its core is kind of really part of our thesis. And that's to say that it doesn't necessarily have to be climate or carbon or energy, say, related alone.

but also to look at the people component. So we're also investing into things like mental health and behavioral health, autism, because these are challenges that we face living in an ever-changing climate. Just like climate anxiety is a terrible thing. All these, you know, I'm a parent to a young child. And I think every day, like, gosh, with this pandemic, with the changing climate, like, what have I done bringing a new human into this world? And so this dangerous...

Every child is hope, Mike. You know my theory on this. Every child is hope. Totally. So it's wanting to provide, you know, these people, caregivers, parents, you know, those taking care of elders too. The tools and resources that they need in order to survive and ideally thrive in this ever-changing and really dangerous planet. And so investing in these dangerous problems is really the core thesis because it means that there's actually a real need. We don't really necessarily need the next, you know, Uber for X.

All respect to, you know, that kind of a business model. It makes our lives better, surely more convenient. But what are the true, you know, most meaningful and pressing needs that we have right now is our investing thesis. Yeah. So right now you have a micro fund, dangerous vestor, ventures, in which you and your partners are investing your own capital. You're actually literally putting your money where your mouth is right now. Exactly. Yeah.

And I think that that's where, you know, there is this real kind of mystique to venture capital. It's really hard to break in. And I think that, you know, you all have had some amazing first time or emerging fund managers on the Angel podcast, you know, in this most recent season. And I think that it's such a great, you know, series because it shows how many different ways that people can break into this industry. And it's one that needs a whole lot more participants with a lot. really diverse, you know, points of view, backgrounds, educations, you know, geographies too. It's easy for me to say as, you know, a male who went to an elite university, who studied engineering to do this, but I have so many blind spots. And I think that, you know, we are

assembling in fact a team that is as diverse as we can ideally build with the tools and expertise, the knowledge experience, and across all ages too, you know, every background that we can imagine we see that the diversity is really a strength and that it's because it's a superpower. You can kind of see around corners and anticipate things that otherwise, you know, another person might not see because of their blind spots. And then talk to me about what you're trying to build. Do you want to build dangerous ventures into an SPV, a special purpose vehicle? Well, how will that work?

In fact, you know, that's kind of where we started with an SPV being kind of a simple way for us as three GPs and one LP to kind of build this initial fund which we're deploying out of but you know over time to grow something that is really exciting

that is in fact going to be able to write bigger and bigger checks and support entrepreneurs and you kind of grow with the companies and being able to double down on your winners and all of that. Gotcha.

Is it easy at this point, I mean, do you feel like money is flowing in? Certainly, climate tech investors are a dime a dozen at this point, but hopefully the capital is following, right? Yeah, I think that, you know, with the macroeconomic turmoil that is here, you will see, I think, some people who are just in it to ride the wave, you know, take a pause. And then for the LPs, you know, fortunately, for many of them, this is, you know, just another kind of bump in the road. So I do believe Yeah, capital is flowing, especially because this is such, you know, a massive opportunity and existential crisis that we need to address. So with this, you know, crisis is a massive money-making

opportunity where you can, in fact, do well while doing good. I mean, I just keep saying the total addressable market is the whole planet. So a lot of value potentially. What advice do you have for either, you know, from your experience now, from both sides of this equation, what is your advice for startup founders coming into the climate space? Like what could we really use here? And then what is your advice for, you know, baby investors like me? Oh, gosh. Well, so for those founders, I think it is really important to follow your interests. And hopefully these interests lead to, you know, discovery, more knowledge and then ultimately, you know, a passion. and it's not that you need to have that idea yourself.

I think it is connecting with others, continuing to explore and talk, but I'd say the thing not to do, which is oftentimes easier advice is don't chase that shiny thing that you think is so great just because it's shiny or you think you can make a lot of money doing it, because that may very well be a fad. Even, you know, in the climate world included,

It's that if you are passionate about animal welfare and plant-based food and eating, go pursue that because that can have a massive, you know, kind of world-changing effect. And in fact, that's kind of where I cut my teeth, getting to understand, you know, how to build a venture fund and all that, is I was an early partner in Big Idea Ventures, which is investing in alternative protein, plant-based food, you know, cellular agriculture. But the thing is, there's just so many ways that people can get involved. if it's, you know, mobility or energy storage or give you water technologies. You know, we're going to need all these things and they're all impacted by this, you know, ever-changing climate.

Yep. No pun intended. Wait, pun intended. Mike Lynn is an investor and engineer and a serial entrepreneur currently investing with dangerous centers. And by the way, if you are listening, I just want you to know, Mike sent me an email that was so good that here he is on the show. So like, do the same thing. Follow that playbook and hope to hear from you. Thank you, Molly. Thank you for all the work that you do. Hey, guys, Rachel reporting here. On February 14th and 15th, we'll be hosting Founder University Intensive. This is a two-day program for Founders. Now, this course is only open to women founders. We'll be hosting a course open to everyone on May 9th and 10th. You can apply for both

at Founder. University. And applications for the longer 12-week Founder University program are due on February 14th, and you can also apply for those at Founder.com. University. Jason and Molly on Twitter. At Jason and at Molly Wood. If you're not a boomer and prefer TikTok, search for this week in startups to find the fan account at this underscore week underscore in underscore startups. And our official account at TWA startups,

but honestly the fan account is way better than ours. And if you're still not tired of hearing from Jason six days a week, you can hear a read his book angel at angel thebook.com slash audible.