Editor’s note: PARC contributed a version of this post, “How to build a cleantech portfolio 101″ to SmartPlanet (SmartTakes, edited by editor-in-chief Larry Dignan). You can see the original post here.
When PARC, a Xerox company, became an independent subsidiary in 2002, we were free to consider entirely new directions and industries. Cleantech was one of our first efforts to take the deep competencies and expertise we cultivated solely for Xerox, and apply them to problems and needs for other clients. But how did we align our idealistic motivations – concern for the environment, desire for impact – with commercial realities? Here are some of the strategies that helped us resolve conflicting goals and move from possibility, to reality…
Just explore it
- Start with the familiar. Our approach was very simple: we began doing what we did best, which is bringing together a group of people from different disciplines together around a mutual interest or common problem. In this case: concern for the environment, and whether there was more we could do to help. We held a “study group” to explore topics from the literature, not just because we wanted to see what others had said or done, but because it provided a framework to explore ideas.
- Connect with outside experts. It was one thing to talk about all possible cleantech projects, but quite another to get something concrete started. Which project would go first? What was the required investment level? Should we focus on just one area, or cast a wide net and address many? We didn’t look inside for these answers – we turned to outside experts, hoping they could help hold up a mirror where we could see ourselves, and the possibilities, more clearly… So we decided to host a speaker series with co-sponsoring organizations HP, Agilent, Xerox, EPRI, and UC Merced. This approach allowed us to pool our interests and broaden our scope.
- Create a community of expertise, and let ideas simmer. The cross-organizational group invited prominent experts on various cleantech topics, and provided them with an open, public platform (PARC Forum), where they could share their expertise with us, and with others. The cleantech invited speaker series, which originally started out as “Science and Technology for a Sustainable World”, covered global warming, green buildings, cradle-to-cradle design, and much more. While listening to and interacting with these experts, we soon reached a tipping point of sorts where various PARC researchers started coming up with new ideas and inventions.
- Motivate throughout the process. Getting motivated at the beginning of a process is obvious; what’s less obvious is the importance of getting motivated towards the end. One of our ethnographers connected us with HP corporate activist Barbara Waugh, who inspired us to action: “Just start somewhere. You can do it. Just do it.” Surprisingly, this simple encouragement helped motivate us to move from abstract discussions to a concerted plan of action. After all, ideation is easy; implementation is hard.
Know WHAT to start
While PARC’s cleantech innovation program began as an informal initiative by a small group of dedicated scientists, it has since evolved into a strong, multidisciplinary effort aimed at developing solutions for multiple clients (global enterprises, startups, government agencies/partners) across a variety of industries. But how did we choose which specific problems or needs to work on?
- Leverage existing capabilities. In choosing what to work on first, it’s easiest to leverage capabilities you already have. In PARC’s case, we had worked for decades on printing, and the core competencies behind this provide a very strong foundation for a number of other useful applications. (“Printing?!” you ask? Well….yes. Complex printing production systems involve lasers, optical systems, microfluidics, semiconductors, computer science, mathematics and algorithms, social sciences, and so much more…) New energy technologies need to be driven to very large scales, and the fundamental barrier, relative to incumbent fossil fuels, is cost. Turns out, printing is one of the most cost-effective methods for mass producing patterned substrates, and so can be very valuable for better metallization on solar cells, tailored electrodes in batteries, and so on.
- Combine depth of expertise and collaboration. We came across a couple of entrepreneurs (SolFocus) who had a compelling design for concentrating photovoltaics (CPV) that could significantly reduce the cost of solar electricity. In a single weekend, two PARC researchers came up with a take on this CPV design that would miniaturize the optical packaging to the point that the structure would look like and be manufactured more like a wafer/circuit board. This was essential for reducing cost and providing numerous other important benefits. The reason the PARC scientists were able to envision and develop this improved but novel CPV design so quickly – despite naysayer reactions – was because they, like most PARC researchers, had the confidence and ability to see things differently because of their deep expertise. In this case, the scientists combined insights from optical system design, solid-state electronics and electronic packaging, semiconductor materials and processes, and more. Opportunities and insights emerge when you draw on deep, cross-functional expertise and apply it towards solving a problem.
- Expand your network. We only heard about the SolFocus entrepreneurs because of the speaker series we hosted and the broad network of connections we built. A university professor (Roland Winston of UC Merced) told us about the SolFocus entrepreneurs, who were literally working out of their garage and had borrowed the principles of non-imaging optics from his work. We later decided to combine forces with SolFocus, because PARC doesn’t commercialize products directly; our clients and partners do. The key behind identifying this potential collaboration is that we didn’t limit our network to a single type of like-minded entity. By overlapping global corporations, VC funders, universities, non-profits, and startups, we expanded the very network that helped us find out about such timely opportunities.
- Incubate and accelerate. The entrepreneurs behind SolFocus decided to incorporate PARC designs and know-how into their products. Considering PARC “as their CTO”, they established a technology development relationship with us, which included our incubating them on site. SolFocus grew from the 2 founding entrepreneurs to over 50 people before they moved into their own headquarters, and shortly afterwards they commercialized their first-generation product with an installation in Spain.
Know WHEN to stop
PARC has since launched a variety of new cleantech projects, in areas that include model-based control for data centers; silicon photovoltaics; novel air conditioning; batteries; enhanced geothermal; and CO2 capture for liquid fuels. Some of these are further along than others, and we have a portfolio management strategy in place that helps us meter significant investments over time as we assess technical, business, and market risk/reward tradeffs. But how do you narrow or filter options in the early, exploratory stages?
- Constrain the problem, and prototype. Unfettered invention isn’t enough; you need constraints to help frame the solution. Since PARC had been an internal R&D capability for Xerox for 30 years, we had learned to ideate within industry constraints… unlike many academic institutions and consulting firms. Since we often found ourselves in the position of having ideas the world hadn’t caught up with yet, PARC learned early on how to build what was needed if it wasn’t yet available. Such prototyping is essential, not just for validating assumptions, but for refining features and seeing new solutions, testing, refining, and optimizing user experience as well.
- Connect with the market early. Since becoming an independent subsidiary, PARC has had to implement a number of new approaches to help us understand what’s needed, identify markets and areas of opportunity, assess the competitiveness of our capabilities, and make early connections with potential partners. For example, we embedded business development within labs; hired visiting technologists to share their industry expertise and help provide direction for enabling technologies seeking a “killer app”; brought in entrepreneurs-in-residence to help reframe and commercialize technologies; and more.
- Size the opportunity. Many ideas for new projects get thrown out after some soul-searching and estimating of return on our investment/effort. Since PARC derives income from co-development funding and downstream royalties (typically less than 5% of the ultimate product value), there’s a lower limit on the market size we can go after. As a research lab director, I use the rule-of-thumb that the market be >$500M for PARC to start a technology project aimed at it. This can sometimes be frustrating for inventors, but given where PARC sits in the value chain of technology creation, and that we only work with partners to do the actual commercialization, any other market opportunity would be too small.
And: seek inspiration everywhere
As part of the above cleantech efforts, PARC invented a novel printing approach that involves “co-extruding” or squeezing two or more materials out of the same nozzle. This controlled ability to squeeze one material between layers of another material, enables us to create really interesting – and useful! – vertical sheet-like structures. At a microscale, this capability allows us to make incredibly intricate geometric structures for solar, fuel cell, and battery applications. PARC is commercializing this technology with a major solar cell manufacturer, and we now have a new project aimed at making Li-ion batteries with higher energy and power capability, which could be valuable for electric vehicles.
Here’s the fun part: The researchers who invented co-extrusion were actually inspired by striped toothpaste dispensers. (Researcher Dave Fork told me he noticed the property while brushing his teeth one night.) So here’s the last observation I’ll offer here – seek inspiration everywhere. Because there may be even more room for creativity when it is enhanced by the possibility of meaningful impact.