Making cement without also making carbon dioxide seems impossible; the basic chemistry of the process releases the gas. But maybe that's not really true, Stanford University scientist Brent Contstantz began thinking last year. Of course, it was only a theory, he told himself, but the market for cement is so large -- about $13 billion annually in the United States alone -- and the pressure to reduce its effect on the environment so strong that he sent a 12- line email to venture capitalist Vinod Khosla.
"I have an idea for a new sustainable cement," Contstantz wrote. "I'm sure you are already aware that for every ton of [standard] Portland cement produced, approximately one ton of carbon dioxide is released into the atmosphere. My cement wouldn't do that; in fact, it would remove a ton of carbon dioxide from the environment for every ton of cement produced."
Khosla, who knew Contstantz only casually -- the two hadn't been in touch for 20 years -- was on vacation. But after a discussion that lasted only an hour, he told the scientist, "I don't care about the rest of the business plan. You don't need to estimate costs. You don't need to do a cash flow. You don't need to do a presentation. Just hire five people, set up a lab, and go."
Contstantz was astonished. "What we're up to," he warned, "takes balls."
"Well, you've got the money now," was the response. "Get busy."
It was a classic performance from Khosla, a man who "enters any chamber believing he's the smartest man in the room," in the words of one longtime VC. "In 30 seconds, in one paragraph, I knew this was worth doing," Khosla says now, adding that the cement startup, called Calera, "may be our biggest win ever."
Over the past four years, Khosla has become the world's foremost investor in environmental startups. He has committed an estimated $450 million of his personal fortune to financing 45 ethanol factories, solar-power parks, and makers of environmentally friendly lightbulbs, batteries, and automotive components. These investments have made him the most prominent of an increasingly rare breed, the so-called angel investors who put their own funds into the youngest of companies -- including outfits that are pursuing the most innovative, but not yet commercially viable, approaches to serious problems such as global warming. It's a kind of seed-stage investing that traditional venture funds have largely abandoned. And rightly so, Khosla says. "If somebody comes to you with a cold-fusion idea, you should not be funding it as an investor with other people's money. Funding it, if they're credible people, as a science experiment, as a hobby, is perfectly okay -- as long as it's your own money."
Khosla's green investing has made him something of a celebrity, mentioned in the media with the likes of mogul Richard Branson, former President Bill Clinton, Hollywood producer Stephen Bing, and General Motors chairman and CEO Richard Wagoner. I've known Khosla since his days as a recent immigrant from India more than two decades ago but hadn't seen him in years until we met in his office in Menlo Park, California, earlier this year. Khosla Ventures is tucked away in an unprepossessing corner of a redwood complex of small offices. The decor is rental-furniture bland. The only reading set out for visitors is a four-month-old issue of National Geographic with a cover story on biofuels. Khosla's own office is spare, with 15 large black-and-white photographs of his four children on the walls. For others in the firm, office dress is Silicon Valley casual -- jeans, fleece vests, and running shoes -- but Khosla arrives more elegantly attired, in taupe slacks; a chocolate long-sleeve, zip-neck knit shirt; and slip-ons in luggage tan with leather bows and kilties. He's 53, a slender 5-foot-10, genial and looking relaxed despite the prominent dark circles under his eyes.
Although he lives near his office, this morning he has already driven one of his daughters to school in San Francisco, a 90-minute round-trip that he makes every weekday in order to spend time alone with her. Later, he'll review several business proposals, prepare to announce three new investments and the hiring of an operational manager for his firm, and polish his remarks for an appearance at the United Nations. To meet with me, he has taken a break from writing a position paper on where the world will get the biomass it needs for oil independence. He writes two or three such papers a month, averaging more than 100 pages a year. "Nobody wastes less of the time in his life than Vinod," says venture capitalist Roger McNamee, whose office at Integral Capital Partners was for a decade just down the hall from Khosla's, at the storied Silicon Valley partnership of Kleiner Perkins Caufield & Byers.
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Recent Comments | 19 Total
November 2, 2008 at 3:17am by Yeves Perez
I happen to deeply agree with the wisdom of Tom Friedman (that we cannot consume of way out of this mess and “Have you ever been to a revolution where nobody gets hurt?”). The fact is that the current economic conditions will cause a lot of companies to close their doors (websites too), and will die off altogether due to lack of understanding the competitive landscape. Those that will fight to stay alive will need to figure out — What’s Next?
I believe that the New Green Economy will include the Rise of Green Real Estate Markets paired with the continued success of Cleantech, Clean Energy Markets, and large scale shifts toward Clean Transportation, and the Greening of the IT Industries (plus a fourth quarter of record investment!!), which will lead to a boom in “American Made” Green Collar Jobs and the creation of new wealth. The trick is: “who will get it right??” Execution makes all the difference for most of these opportunities and green investors need to pay more attention to the items that management claim they can achieve.
I'd like to ask Mr. Khosla if had ever heard of the Eco Investment Club before? And if he would like to join us! The Club has hosted several high impact, educational meetings that cover these “newly hot topics” such as: “The Economic State of Green Building” with Guest Speaker Harvey Bernstein, Vice President of Industry Analytics, Alliances and Strategic Initiatives for McGraw-Hill Construction and Hosted by Citi Smith Barney’s Bruce Kahn, and the First Annual “Green Leaders Week”, which was a week-long buffet of events for investors, who were interested in getting face-to-face time with the Green Business Leaders of Southern California. The events of this highly successful week were designed to give Accredited and Institutional Investors, who were interested in getting a first-hand look inside the minds of Cleantech leaders, the opportunity to witness operations of some of the fastest growing companies by attending a series of “open houses”, starting with Envirepel Energy, Inc., a clean energy (BioMass) company in Vista, CA.
And as a special surprise: Ask Oren Jaffe, Co-Founder of EcoTuesday.com, your toughest questions on Nov 5th, 2008, as the Eco Investment Club attempts to provide direction and positive outlook for green investors and business leaders seeking answers before creating more Green Collar Jobs! The event is called, “What’s Next For The Green Economy??” Submit your questions at ecoinvestors@gmail.com and join the webinar at:https://www2.gotomeeting.com/register/124526391 (Click here to register or learn more)
November 16, 2008 at 8:50pm by Jose Johny Thaikkattil
Hai,
I read your article, see the problem of carbon , mostly the vehicles are producing carbon of 50 to 60% yes we can eliminate the carbon from vehicles, burners, gen sets, I have a soultion if interested contact me JOSE JOHNY THAIKKATTIL
E-MAIL jfengineering@hotmail.com , I am also interested to join to your team
November 16, 2008 at 8:56pm by Jose Johny Thaikkattil
Hai,
I read your article, see the problem of carbon , mostly the vehicles are producing carbon of 50 to 60% yes we can eliminate the carbon from vehicles, burners, gen sets, I have a soultion if interested contact me JOSE JOHNY THAIKKATTIL
E-MAIL jfengineering@hotmail.com , I am also interested to join to your team
February 10, 2009 at 3:35am by Susan Ho
Khosla's great. One of his best investments is GreatPoint Energy, which has just been contracted by a Chinese State-owned power company to build a $300 million coal gasification plant in China. Why don't we see America taking advantage of these technologies? It is intensely frustrating.
Also, for anybody who's interested, Vinod Khosla has a series of lectures that he gives at Stanford, offering his advice and opinions entrepreneurship, the future, and technology at http://www.academicearth.org/lectures/search/vinod%20khosla/