What happens when you combine the musings of physicist Richard Feynman, carbon nanotube technology, and a seed accelerator looking for the next big deal? How about a company that creates a technology to recycle the waste CO2 produced by your automobile as it cruises down the road at 65 miles an hour?
Science fiction you say? Not quite, because such a technology is actually under development, and it is based upon the three ingredients described above. The company is called Prometheus, named after the Greek Titan who defied the gods, stole fire and gave it to humanity. It's the brainchild of serial entrepreneur Rob McGinnis, and it's received backing from Y Combinator, the highly successful seed accelerator based in Silicon Valley.
Capturing carbon dioxide directly from the air is one of the strategies to solve the greenhouse gas problem. McGinnis is developing a device to convert captured air directly into fuel. He has a working prototype, but it only can recycle a small amount of carbon dioxide and create a small amount of fuel. Expecting significant progress over the next few years, McGinnis hopes to create fuel that could be sold for about $ 3.00/gallon.
The effort is clearly a long shot, but imagine if McGinnis and his company actually succeed at capturing all of the waste CO2 byproduct of the fuel burning process and convert it back into usable fuel? Our greenhouse gas problem would look entirely different! That doesn't mean an end to renewables such as solar, wind, and hydropower. Instead, carbon capture is merely one of the portfolio of strategies needed to solve the climate change problem. That's because even if we stopped spewing CO2 and other greenhouse gases into the atmosphere worldwide today, we need to do something about all of the residual gases we've already emitted, and which scientists predict will cause us great future harm.
So far as I know, everyone associated with Rob McGinnis in this carbon capture endeavor thinks this is a long shot, likely of the 500 to 1 or 1000 to 1 variety. However, every big technological advance at some point is described as such. The better question to ask is, why should anyone believe that McGinnis has ANY CHANCE of being successful? I think there are three reasons.
Reason #1: Nanotechnology
Various companies are now attempting to do "direct carbon capture", either converting them into solids or injecting the gas into some type of underground storage. McGinnis is using a different strategy involving carbon nanotubes.
There's a good chance you've heard about nanotechnology. While nanotechnology was an unrealized idea at the time, world renown physicist Richard Feynman gave a famous lecture in 1959 to the American Physical Society about the potential of manufacturing on a nano scale. Feynman described the idea of doing manufacturing products at a scale thousands of times smaller than what was possible at the time, literally to the level of atoms. Of course, the idea of manufacturing on such a tiny scale was seemingly science fiction, and might have been dismissed as such, except for the fact that it was Richard Feynmann making the prediction.
It WAS science fiction, until it wasn't, when a series of pioneering breakthroughs occurred in the 1990's and early 2000's. One such breakthrough was carbon nanotubes. Feynman's ideas have now become a reality, opening up the potential for incredible transformation at a molecular scale.
Why not then apply Feynman's idea of molecular manufacturing to the problem of removing all those nasty greenhouse gases from the air?
Reason #2: The Track Record of Rob McGinnis
Which brings us to Rob McGinnis. McGinnis himself is a great study in transformation. He obtained a Bachelor's degree in theatre from Yale University. While most of his classmates likely headed down I-95 to the bright lights of Broadway, McGinnis decided to hang around New Haven and get a PhD in Environmental Engineering. Not exactly your typical educational progression, but McGinnis isn't your typical guy.
Most likely, while his fellow PhD's generally headed off to work in academia and research institutes, McGinnis ended up starting a company called Oasys. Those undergraduate acting skills probably came in handy, as McGinnis was able to raise $ 20 million in venture capital to fund the company's technology called Forward Osmosis (FO). This is a technology to clean up dirty water. Oasys focused on applying its Forward Osmosis technology to the problem of cleaning up wastewater generated at power plants and oil drilling.
Having successfully launched Oasys Water, McGinnis then went on to form a second company called MatterShift in New York. MatterShift developed a technology to produce carbon nanotubes at scale. In effect, the company found a way to take the carbon nanotube membranes from the university lab and apply them at industrial scale.
MatterShift's carbon nanotube membranes represent a practical application of Feynman's idea of the molecular factory. Membranes have long been used to filter substances. Creating a membrane using carbon nanotubes (CNT's) opens the potential for the kind of things Feynman envisioned in his 1959 lecture. In this case, the nanotube membranes would be used in things such as seawater desalinization. As noted on MatterShift's website, "Each nanotube acts as a conveyor belt that performs functions on molecules as they pass through, single file, analogous to how factories function at the macro scale." It further pointed out, "Three significant advances made this breakthrough possible. First, there has been a 100-fold reduction in the cost of carbon nanotubes in the last 10 years, with a corresponding increase in their quality. Second, is the growing understanding of how matter behaves in nano-confined environments like the interior of sub-nm CNTs, in which molecules move single file at high rates and act differently than they do in bulk fluids. And third, has been the increase in funding for tough tech startups, which enabled Mattershift to spend 5 years of intense R&D developing its technology."
If the molecular factory could do things such as remove pollutants and salt from dirty seawater, why not apply the same concept to removing "dirty" CO2 from the air? Thus, the idea for Prometheus, and the McGinnis device to turn CO2 into usable fuel.
Thus, a potential technology to revolutionize the greenhouse gas problem. How, then, to turn it into a real business? Enter Y Combinator.
Reason #3: Y Combinator
Y Combinator is a seed fund that invests in promising entrepreneurs and their companies. It may be the most famous of all such funds, having since 2005 invested in more than 1000 startups. "Seed stage" companies typically are pre-revenue, though not always. They often have already received what's called "friends and family" funding, meaning that the founder(s) has/have gotten initial capital from parents, Uncle Louie, or a generous and highly optimistic friend. Occasionally, such companies are merely at the "cocktail napkin" stage, though usually well beyond that.
As the name suggests, a "seed stage" fund invests in companies at the "seed stage." In any event, a "prospect" for Y Combinator has definitely moved beyond the "cocktail napkin" stage for the idea. After a rigorous screening process, it chooses a group of entrepreneurs and provides training. It invests $ 150,000 in each "graduate" company and then provides ongoing help to them, typically in the form of: 1) introducing the company to prospective customers; 2) providing ongoing mentorship; and 3) helping line up future financing.
Y Combinator is certainly not unique in this, it's just that they've been VERY successful. How successful? While lots of "graduate" companies have flamed out, reportedly, the combined value of their "graduate" companies that have succeeded is over $ 65 billion! Their "graduates" include AirBNB, Dropbox, and Reddit.
It's one thing to invest in a new lodging concept such as AirBNB but an entirely different thing to invest in a technological "moonshot" such as removing waste CO2 from the air. After all, a company such as AirBNB pioneered a new version of a very old idea: hospitality and lodging. Not that AirBNB wasn't a huge risk, but investing in true "moonshot" technologies is incredibly tougher. Notwithstanding that, Y Combinator says it is investing in some companies trying to solve the greenhouse gas problem.
Y Combinator is certainly following a fundamental principle of early stage investing: create a portfolio, don't attempt to put all your money with one company. The fact that the company has invested in more than a 1000 startups attests to the fact this concept is well understood. However, trying to invest in this area is pretty challenging because there just aren't very many companies pursuing carbon capture. Maybe that will change over the next few years.
Will Rob McGinnis achieve his goal of carbon capture and recycling in his VW Golf? Can he scale it? Can he make his new company, Prometheus, not only successful, but a huge success for Y Combinator? Unknown at this point. However, all of the right ingredients seem to be there: 1) carbon nanotube technology is proven, it just needs to be applied to the CO2 removal problem successfully; 2) Rob McGinnis has demonstrated the ability to start and build companies; 3) there's a huge addressable market if a viable solution can be found; and 4) Y Combinator certainly can help coach McGinnis and his team as well as anyone can.
Though Google is an exception, nearly every successful startup "pivots" along the way from the original idea of the founder. Most likely, McGinnis a Prometheus will do the same. The "pivot", however, may be an even better idea than McGinnis's planned carbon capture device.
As previously profiled in "Unexpected Perspective", there are other carbon capture technologies under development. Nine out of ten will likely fail. However, as with all angel investing, success depends upon finding the one in ten that provides a 10+X return.
Richard Feynman foresaw the future when he gave his famous 1959 speech about "molecular factories." Let's see how long it takes to create the first successful molecular factory that "scrubs" carbon from the air.
