Sometimes the secret to success and failure is something as small and seemingly insignificant as the nail in a horse's shoe. It's been argued that King Richard III and his army were defeated in 1485 at the Battle of Bosworth because of a faulty horseshoe nail. That defeat had significant future consequences. One writer said,
"Amazing when you reflect on it. Without this victory for the Tudors, the whole of British history could have been different. No Henry VIII and the divorce laws, no Royal Navy, no Church of England, no Union with Scotland - all of these things perhaps turned on a horseshoe nail."
When successful entrepreneurs are asked, "what was the secret of your success?", one common answer they give is, "I saw something that everyone else either didn't think was important, or else they just missed." Sometimes that means finding the right nail for the horse's shoe. That's one of the reasons I think entrepreneurs are far more important than politicians in solving the greenhouse gas emission crisis we face. In this post I profile three companies with emerging technologies, exploiting an opportunity that most everyone else has missed. Each is it's own type of horseshoe nail. Each solution could play an important role in helping us solve the greenhouse gas problem.
Besides the fact that the three companies are all trying to solve an aspect of the climate change problem, they all have received investments from Breakthrough Energy Ventures. In recent posts I've profiled other companies that have received funding from Breakthrough, an investment fund that includes business superstars such as Bill Gates, Jeff Bezos of Amazon, and former New York Mayor Michael Bloomberg.
The first company profiled this week is named KoBold Metals. KoBold is attacking its own version of the nail in the horse's shoe: finding more cobalt. What does cobalt have to do with the nails in horse's shoes?
Cobalt, you may recall from chemistry class, is element 27 on the Periodic Table, first discovered by George Brandt in 1735. Cobalt is used in all kinds of applications including strengthening and improving the performance of cutting tools and dies. You'll find it in jet engines and gas turbine generators. It's used in all kinds of electroplating applications because of its appearance, hardness, and resistance to oxidation. Long before such high technology applications, cobalt was used for centuries to produce brilliant and permanent blue colors in porcelain, glass, pottery, tiles and enamels.
Why, then, would something with such broad applications be considered a form of "horseshoe nail"? The reason is because of batteries. Cobalt, along with lithium, is a key ingredient in battery storage, particularly the type used in electric vehicles. Electric vehicles of all sorts are a critical part of moving from a fossil fuel based economy, but all that incredible technology powering electric vehicles depends upon some cobalt. Unfortunately, a shortage is on the horizon.
Enter Kobold Metals. The company isn't just another mining venture. Instead, Kobold wants to employ Big Data and statistical modeling techniques to make it easier to obtain the cobalt we'll need for all those electric vehicles. Besides mere access, the company wants to increase "ethical sources of supply". You've heard of "blood diamonds"? There's a parallel with cobalt.
Malta, the second company in the Breakthrough Energy Ventures portfolio profiled in this post, is solving a different, but equally important, problem related to the delivery of renewable energy. The problem is the difficulty of storing electrical energy. Every electric utility that's ever existed has faced the problem of variation in demand. After all, the need for electricity varies by time of day and time of year. The traditional approach used by utilities is to have excess capacity in the form of power plants that are used only on a part time basis. Sometimes a plant will remain largely idle except for a few hours each day. It's a very inefficient solution.
Renewable energy adds an additional dimension to this problem. After all, the sun never shines at night, and oftentimes the wind doesn't blow. Even hydropower is variable. The problem already exists on a pretty significant scale in California, where 30% of solar power can't be used when it's generated.
The electric vehicles using the cobalt described earlier solve this problem using batteries. How about creating giant scale batteries to store renewable energy? That's what Malta is trying to do: create a giant scale storage system for the excess electric generated by renewables, to be used when it is needed.
Malta is using a tried and true strategy employed by entrepreneurs and inventors everywhere. Rather than build something entirely new, the company is trying to re-purpose tools and technologies used in other applications. As reported on the company's website: "The Malta system is made up largely of conventional components and abundant raw materials – steel, air, salt, and commodity liquids. The technology capitalizes on existing manufacturing and construction ecosystems in the power and oil and gas industries, making timelines to market impact short and low-risk while keeping costs low."
Malta's system works as follows. Excess electrical energy is gathered, then used to drive a heat pump. The heat pump converts electrical energy into thermal energy. The thermal energy is then stored in molten salt. When electricity is needed, the thermal energy in the molten salt is converted back into electrical energy and sent onto the electrical grid. As such, rather than store electricity in a typical battery, it's stored in molten salt. Malta's owners and investors believe this technology could become a key to making renewable energy the bedrock of the electric grid. In a sense, Malta's molten salts are like Kobold's cobalt – a horseshoe nail - overlooked in the big picture, but essential to success.
Motif, the third company in the Breakthrough Energy Ventures portfolio profiled here, solves another key problem that's often overlooked. While we tend to pay lots of attention to carbon dioxide that spews out of the stacks of coal-fired electric plants and automobile exhaust pipes, we tend to overlook all of the greenhouse gases that are a byproduct of our diets.
You're already very familiar with a certain annoying byproduct of human digestion. Try as you might, you can't get rid of it. What you likely haven't thought of is that livestock have the very same problem, even though so far as I know, it isn't a social embarrassment for livestock. In the greater scheme of things, for an individual cow it's simultaneously both as insignificant and significant as the nail is in the horse's shoe.
But here's where it gets significant. According to the UN's Food and Agricultural Organization, up to 18% of greenhouse gases come from livestock. By comparison, in the USA alone, 27% of total human greenhouse gas emissions come from electric plants. Lots of attention is focused on closing coal plants in particular. However, while we're focused on eliminating all these coal fired plants – some thing I think we should be – we're largely overlooking the fact that those coal emissions are being replaced by the emissions of huge numbers of livestock around the world.
In the USA, livestock generate about 16.5 metric tons of greenhouse gas/person/year while in the rest of the world, it's about 5 metric tons. As the rest of the world becomes increasingly wealthy, the demand for protein in the diet increases, thus mandating huge increases in livestock. It's not unreasonable to project that while we get rid of all the carbon dioxide from coal plants, we'll replace it with methane from you know what. What's really bad about that is that methane is a far more potent greenhouse gas than carbon dioxide, so we may be worse off!
I don't know about you, but I don't have any plans to reduce, much less eliminate, protein from my diet; and I prefer proteins in the form of meat, not beans. Most everyone I know feels the same. So we've all got an emerging livestock "problem". Enter Motif, which is developing a way to provide us the protein we need and crave without increasing the need for livestock.
Motif's solution is to produce some of that protein through fermentation. Fermentation? You can't be serious!
Serious they are, and it appears they've got a solution. The proteins being created through the fermentation process will end up in food that increasingly tastes just like the steak you know and love. Pretty amazing what food chemistry can accomplish!
No, connoisseurs of fine beef can still tell that these look alike meat products aren't the real thing, but it's getting increasingly difficult to tell the difference. Not only that, if you've never had much of the real thing, as lots of people in the developing world never have, you may never know the difference.
The goal isn't to get rid of the kind of steaks you'll get at Ruth's Chris Steakhouse, one any of its worthy competitors, it's to limit the need to add huge amounts of livestock around the world to meet the growing demand for protein.
This demonstrates a key problem with the general strategy to solve the greenhouse gas problem. There's lots of attention placed on curbing emissions in the USA, Europe, Japan, and China, but the real need is to find a way to prevent the growth of greenhouse gases in the rest of the world. The strategy Motif is taking addresses this problem, by providing a way to get lots of tasty protein for the hungy masses, but without all of the problems that go along with lots of livestock.
Will Kobold Metals, Malta, and Motif succeed? It's still an open question. The point to make, however, is that each represents a fundamentally better strategy in dealing with the global greenhouse gas problem than governmental solutions, because in each case an entrepreneur saw something that no government bureaucrat likely ever will. The best way to solve the problem is to create conditions where entrepreneurs can find those "horseshoe nails", create solutions that will both get rid of greenhouse gases, and make lots of money. Governments can't do these sorts of things; but even if they can, they tend to produce highly inefficient, ineffective solutions.
Cheer them all on. After all, in the not too distant future, you may recharge your electric-powered automobile overnight at supercheap electric rates made possible because your local power company generates electricity from renewables, then stores power using the Malta grid-scale energy system. KoBold has helped assure there's plenty of cobalt to make your car's battery store power like a champ. On your way to work you stop for breakfast at your favorite eatery. You'll enjoy something delicious, and you'll swear that it's really nice beef, even though it's really produced by Motif's fermentation process.
Even better, you and millions of others will breathe air that's free of all the excess carbon dioxide and other greenhouse gases we've been emitting for years. Take another bite and enjoy!
