You Should Have Been There for “The Lorax” and Dr. Seuss – DealMakers Breakfast, November 13, 2008
by “Should Have Been There” guest blogger, Larry Blumsack, President, Zoka Institute
Howard Berke, CEO of Konarka Technology tied green investing in energy efficiency to Dr. Seuss’s tale of “The Lorax.” It was a magnificent metaphor that set the tone for his talk at the November 13th Dealmakers Breakfast. This is a metaphor that has been influential in Berke’s life – a metaphor that portrays what happens in an unregulated market.
As memory jog for those of you chronologically gifted, Seuss’s “The Lorax” is a children’s tale about the destruction of an eco-system and possibly the world itself. It shows how unregulated destruction of resources can occur when greed is involved and profit is the sole motivation in promoting items of little or no value. However, there is hope in “The Lorax” as there is for the world today. Berke pointed out that empires have risen and fallen and risen again. Faced with the current economic challenges he has faith that the world will eventually overcome those challenges and rise again.
Berke is driven to provide good energy through energy transition and poverty alleviation through renewable energy. His 3Ps for investing are people, planet and profit through solar and wind energy. His company Konarka has developed innovative power plastics from organic materials – nano scaled polymers – that focus on the carbon building block of energy. It is a way of developing higher efficiency energy capture from moderate and low light.
Berke was very candid in detailing the problem facing the renewable energy industry because of the current economic climate. Is renewable energy a bubble or bonanza he asked rhetorically? Despite that $65 billion is already invested globally in clean energy, in 2008 investments have gone flat. There is no IPO market which discourages VCs from going beyond early stage investments. Renewable energy is asset intensive another discouraging factor for investors. Berke predicted that of the 800 solar companies in the globe there will be few survivors in the near future.
In responding to an audience question regarding coal, Berke said that the U.S., Russia and China will have to depend on coal until carbon capture is in full scale which is 20 years away. He went on to say that gasification and liquification of coal is the way to go in the future.
On the positive side, Berke pointed out that global and Fortune 500 companies are actively looking at the energy space now that valuations are more realistic. This could be the boost the industry needs.
Thanks Howard Berke for bringing me back to “The Lorax” more than a children’s fable it is a must read for any entrepreneur or investor today – for anyone.
