I consider myself a research capitalist — finding, co-investing and developing the most impactful technologies to solve climate change. I currently lead a cleantech program at a Canadian national lab, and it is my job to find the best research ideas to invest in and co-develop. As with many breakthrough technologies, a lot of the projects involve exciting startups with founders fresh out of academia trying to commercialize their graduate work. I’ve seen new companies developing new lightweight sustainable polymers, or a process to make vegan leather, or a catalyst that produces clean hydrogen. Each believes that their solution will save the world.
The good news is that climate startups are attracting investment like never before. Last year was a breakout year for climate venture capital investment with over $40 billion in funding allocated. It has never been a better time than to start a company or join a startup based on academic research in sustainability. But how do you take an idea from the basement lab to an investor?
Assessing potential for impact
So how do you assess which projects developed in academia will be the most impactful on emissions in a commercial capacity? I first evaluate the technology based on four metrics:
- Total addressable emissions reductions: If implemented at scale, can this technology address 1 gigaton or more of CO2 emissions yearly? A CO2 capture process that embeds carbon into concrete could decarbonize the entire built environment, a sector that emits a huge number of emissions. On the other hand, the market and emissions reduction potential for vegan leather is much more niche.
- Technology readiness level: Is this just an idea or has a proof of concept been developed? What will it take for this technology to scale and how does it fit within the current ecosystem.
- Current cost, and potential to decrease cost over time: Ultimately, you can have the best emissions reduction technology, but if it is too expensive or doesn’t bring any value, no one will buy it. Understanding what a potential business model for new technology — who will buy it, for how much and why — is key to making any impact.
- Supporting or similar research: The competitive landscape is also an important consideration. Many innovators think what they have is unique, or that it is the best-in-class, when in reality there exists something that already addresses that issue.
Building a business plan from your research
If the idea or project passes these metrics, the next step is to turn that idea into a business.
You need to start asking the hard business questions instead of the hard science ones such as what is the state of the market? How does this technology bring value? What will this cost? Who will buy it? Why will they buy it?
Take your research and build a business model canvas to help understand the bigger picture of what your research is and how it can be important to the world. Oftentimes academics can get lost in the details. Instead think about how to apply your work to the real world and how to take your research and turn it into a product or a service.
Let’s take an example of a business model canvass that I built when I was trying to take my PhD work out of the lab and into the startup during the Carbon XPRIZE competition. We were developing new catalysts to electrochemically convert CO2 into renewable fuels and chemicals.
The vision was simple, imagine a world where we could source the fuels and chemicals we need to make plastic and other essential materials not from fossil fuels in the ground, but from CO2 in the air.
Take a look at the business model canvass for this idea below.
Learning to pitch and what it gets you
Now you’ve built a business plan, you’ve thought about why your research is important and how it can make money. This creative exercise is a practice for transitioning out of academia and into private industry or the public sector.
As an academic, developing a pitch helps you contextualize your research and it makes it easier for you to communicate its benefits and possibilities to others.
An effective pitch has three parts and largely follows classic story structure. Once upon a time there was this problem, I worked on this solution, because of this solution the world is a better place.
Academia produces highly technical and specialized people whose greatest strength is not the subject matter expertise, but rather their ability to think critically and test hypotheses. To reach net-zero by 2050, we need people who can take multi-disciplinary and collaborative approaches to one of the toughest and most complicated problems and who can communicate across subject matter lines. Those trained in academia have these traits, they just need to learn how to show it to the rest of the world.