Venture Assistance: An Interview with Ford Tamer of Khosla Ventures
The Always On Going Green West Conference in Sausalito last week brought together venture capitalists, CEOs and inventors from all sectors of the green sphere. One of the key venture capital firms in attendance was Khosla Ventures, who just raised $1.1 billion toward two new funds- the most money raised by a venture firm in two years.
I had the chance to sit down with Ford Tamer, an Operating Partner at Khosla Ventures focused on cleantech and IT, and ask him about his motivations, his thoughts on the cleantech industry, and what Khosla Ventures is looking at in the future. He joined Khosla Ventures 2 years ago after twenty years of experience in founding and building successful technology businesses.
Ford Tamer
Me: You’ve been building tech companies for over 20 years- why are you still in this field?
Ford: Especially in green tech, it’s an opportunity to do something I can tell my kids about and be proud of- it’s a lot easier to tell them about working to benefit the Earth than it is talking about building semi-conductors. That’s the best news about being in this business: do good, feel good.
You led a panel called “Terrawatts of Solar” with some key players in the industry, talking about what will drive the future of solar power and how it will scale. What will it take to bring solar into the Terrawatt level?
Right now the install price for solar is at $6-8 per watt on PV. That’s half of 2 years ago, which is great. We need to be at $2/ watt in the next 3-4 years and demand will start exploding.
There has been a lot of talk at Going Green West about how energy and water projects are increasingly overlapping- are there any projects you are looking at that overlap between electrical efficiency and water management?
Some technologies are using water in solar/ thermal plants and cleaning up water in the middle of the desert. The big overlap questions in regard to energy and water are: Can you produce clean water at lower energy levels? How do you reduce the electricity levels needed? One water company is developing technology using a reverse osmosis membrane- 4% of cost at 25-35% efficiency fpr the plant- that’s a 10x impact.
How does Khosla Ventures find companies to invest in and what are you looking at in the future?
We are looking for who has an idea that is breaking new ground. We see 10-15 new ideas every week. Our job is not to just looking at what’s being done now, but trying to predict what’s coming and reaching out. We try to be ahead of the market.
On the seed side, we find ideas from many sources- probably 1/3 from unsolicited plans, 1/3 through reaching out to universities, and 1/3 through networking. By the time you hear about an idea at a conference like this, it’s almost too late. My purpose here is general networking.
On solar we are pretty open, and right now we are working with 5 companies in lighting, which wasn’t being done 2 years ago. We are looking at grid scale storage companies. In general, companies who can do high efficiency, low cost projects.
How influential will December’s Copenhagen Summit be on the direction of Khosla’s investment strategy?
We believe cap and trade needs to happen. That will have a big impact on what we do. If it has a cost assumed to go with it, we’ll be looking at who would cap and trade make more attractive? If the cost of going to more efficient lighting is the best bet, that’s where we’ll look.
There is a 2010 regulation that says companies will have to begin to measure emissions. Efficiency measures will become more critical and that will become more of a priority. In general, its effect would be across the portfolio.
How will carbon trading happen? How do you predict what the right abatement strategy will be? Whatever comes out of the summit could potentially open up new markets.
After more than 20 years of developing your own companies, how has your personal role changed over the last two years of working with Khosla Ventures?
We like to call what we do Venture assistance- we are more in the assistance business that the creation business. My role is to assist entrepreneurs as the go to market partner. I’ve been in operations for 20 years, so getting on the other side is a big change. It’s a change from being a quarterback to being a coach.
On the operations side you’ve got a team- you have a direct impact on the day-to-day operations. You immediately know the impact of a new product introduction. Or man. Cost reduction. If not immediate, you can see it in a few months.
This is much more long term- five to seven years, so you have to be a lot more patient. You don’t get the immediate gratification or indication of progress in a relatively short amount of time. You spend much more amount of your time at your desk, though I still travel a lot in support of the companies I work with.
There’s an emotional impact of not seeing that relatively immediate gratification. On the other hand you meet a lot of really smart people across ways. You are funding companies that are going to have a big impact on the earth in the long term.
You work with a lot of great companies doing a lot of great things- who would you recommend?
My companies are on the tech side- we focus on LED lighting. We are looking at energy ratings on appliances- AC being the big one. Between AC and heating you account for 80% + for energy in a home.
He went on to say that for PV Soraa in Santa Barbara and for AC Pax Streamline in Berkeley are both doing great things. He also mentioned PV-Thermal in Berkeley, who are working with solar-thermal. He said that most PV panels are 15% efficient, and that 85% of the heat generated is lost in air under the panels. They are working on how to utilize the energy in that heat. He also highlighted Sloadigm, who makes glass that changes color depending on the amount of sunlight, which helps to save energy.
In your time at Khosla Ventures, what are you most proud of?
I’m passionate about lighting. I’m proud of working with LED Co. in Santa Barbara, the inventor of blue LED. Also a Topanga outside lighting company who can generate 20,000 lumens + from a bulb the size of a quarter. And Ecomotors, whose goal is to improve fuel economy by 50%. Everyone was talking more on the generation side 2 years ago, and now there is more of a focus on efficiency investment.
It was fantastic to talk with him and feel the enthusiasm and dedication he has for the industry and hear his earnest, from-the-heart commitment to assisting new companies in developing products that will be good both for business and for the earth.
To learn more, you can visit the Khosla Ventures website http://www.khoslaventures.com.
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