Jon Powers: Welcome back to Experts Only. We’re recording this episode live at the RISE Consortium‘s the future of resilient infrastructure and energy security event. I’m super excited today to be talking to a good friend of mine, the amazing Dawn Lippert. Dawn has been called the Bruno Mars of clean energy, which I think is an awesome title, thanks to Analytics. She is the CEO of Elemental Accelerator. They’re a startup program that each year funds 15 to 20 companies up to a million dollars each to improve systems that impact the planet and people’s lives for energy, water, agriculture, transportation, and beyond. Daw, welcome to Experts Only. Dawn Lippert: Thanks so much for having me. It’s great to see you, Jon. Jon Powers: It’s so Great to see you. So you have such an interesting background, right? You went to school at Yale, you’ve been working around the world on environmental and energy issues. You worked at Booz Allen in another alternative energy practice, and you’ve really built an fascinating career addressing the issues of climate change. What in your background really got you interested in addressing these problems? Dawn Lippert: It’s such a good question. I think from the beginning, when I was working at Booz Allen, I actually got to work on both the policy side and the technology side. So I worked on the first launch of RPE, which is the energy project. So I got really interested in this nexus of what’s happening in public policy and these macro ideas around transformation, and then what’s happening with new technology and where do those two bump into each other and intersect? So that’s really what we’ve been exploring and building at Elemental over the years. Jon Powers: Yeah. So where from that experience … What helped prepare you to lead Elemental? We’ll talk more about what the organization does in a second, but just from your personal perspective. Dawn Lippert: I think it’s the ability to just learn and grow and change. I mean, this sector has changed so much. I started Elemental about a dozen years ago and to think of … People talk about the solar coaster and the solar industry, but if you think about the innovation rollercoaster, it’s been even more pronounced. There’ve been lots of dips, lots of learning and new approaches to things. So I think it’s just really being willing to try things, being willing to fail and learn from our mistakes and learn from our CEO’s and get better as we go. Jon Powers: Yeah, not to mention just an incredible influx now of things like ESG capital and interest around climate tech is at an all time high right now, which is super exciting. So for folks that are not familiar with Elemental, you lead an incredible group with a mission to redesign the systems at the root of climate change. Can you talk a little bit about what your organization does and maybe some case studies and some of the amazing companies you’re investing in? Dawn Lippert: Sure. I’d be happy to. That’s my favorite thing to talk about. So our mission, as you said, is to change systems at the root of both climate change and social inequity, and to change the systems not separately, but actually work on them together as they’re deeply interrelated. So far we’ve invested in 117 portfolio companies and alongside investing in them … and we’re a nonprofit. So it gives us the ability to invest for impact first and financial return second. Alongside investing in the companies, we actually fund projects with most of them. So we’ve funded over 70 projects around the world with emerging- Dawn Lippert: … funded over 70 projects around the world with emerging technology companies and commercialization in the industries you mentioned, so energy, water, and many of the things of competent resilience today, mobility, agriculture and circular economy, which includes carbon and material. So, out of those projects, one of the things that really makes Elemental unique is getting really close to the ground with our companies and really close to implementation and deployment and figuring out what’s actually working with customers, whether they’re utilities or government or other businesses, and what’s actually working commercialization on the ground and what’s not. And so, it’s enabled us to build a library of pattern recognition over the last dozen years of how to commercialize technologies across these various sectors. So, across the companies we’ve worked with, we’ve awarded over $40 million and the companies have raised over $4 billion as follow-on funding, so about a hundred X there. A couple of the companies, just to highlight, that I’m pretty excited about right now and I think are particularly interesting in the context of this conversation, one is a company called Jupiter Intelligence. So, they’re a company that does risk modeling- Jon Powers: Can I ask you a question? Dawn Lippert: Yeah. Jon Powers: Just from where you’re going at this. Dawn Lippert: Go for it. Jon Powers: Just for a very basic question. In the life cycle of these companies, can you talk about where you’re investing? This is really early stage stuff, right? Dawn Lippert: It’s actually not as early as you would typically think. In some ways, Excelerator is a misnomer in that way. So, when we first started the Excelerator, we were starting to fund projects. And so, actually, we fund companies that have working prototype that usually are in the market. They have a few things in the field. And where we get really good and really specific is to start scaling their commercialization work. So, when companies have a product, they have a technology that’s working well, and then they’re ready to go into a new market to bring a new product to market, to try a new part of their business model or to take a leap they otherwise wouldn’t be able to take, that’s where we often come in with funding. And many times we actually bring in the customers and then we fund about half the project, sort of de-risk it, and give the customer the care to bring it forward and get it over the line. Jon Powers: Yeah. And for folks that aren’t as familiar in the finance space, the critical need there is that a lot of investors won’t fund that space, right? So, you’re getting really early startup money to prove your idea or you need to have customers, but that critical gap is really important to get a lot of these climate tech companies to really thrive. It’s so important. Dawn Lippert: Yeah. That’s exactly right. And I would say the other critical part of it is that it’s pretty hard to find capital to put things in the ground early where there’s still a lot of risks. So, oftentimes, for the projects that we’re funding, we’re trying to create a blueprint that then can be funded by debt or funded by project finance or asset finance or other kinds of more vanilla capital so that companies can really fuel their growth as opposed to just funding all of this on venture capital, which is the lesson that we learned 10 plus years ago in this space. Jon Powers: Yeah. Absolutely. Go back to Jupiter, so you started talking about Jupiter and it was one of the companies, I didn’t mean to cut you off. Dawn Lippert: Yeah. So, a couple of those companies I’m interested in and I think really intersect well with this resilience space, Jupiter is a company that enables really actionable decisions on climate change and they reduce risk for infrastructure that can be heavily affected by climate change. So, we heard earlier today about really trying to understand the risks of climate change, whether it’s drought, flooding, major storm, fire. And so, Jupiter gets really granular on that. So, the project that we funded with them, for instance, is working with Hawaiian Electric in Hawaii to say, “Okay. So, we have an island, we have so much infrastructure, much of it that risk from various climate risks, but which of it is most at risk.” And so we can say, “This substation has this percent chance of being underwater within the next four or five years.” Right? So actually getting to that granular level of risk enables the utility to then put sensors on those key pieces of critical infrastructure and really target where some of this hardening work should happen as opposed to just looking at the whole system and saying, “Wow, this is going to be really expensive to understand what to do.” So, that’s the kind of company that I think from the resilience perspective is bringing all kinds of PhDs and Nobel Prize winners in science to bear in a new technology platform that can be really helpful in resilience spending, which can be really significant over time if we’re not really targeted about it. And I think people are waking up to this after the pandemic as well. I mean, Jupiter’s seen their traction increased 10X in Q1 2021 compared to a year ago. So, I think people are saying, “Okay. So, we had this pandemic. What are the other unexpected things that we can start planning for now that are on the horizon?” And climate is really on top of that list. Jon Powers: Awesome. Any other examples before we move into some of the consortium work? Dawn Lippert: Yeah. So, I mean, one other example that I think could be interesting to this group is a company that we work with called SOURCE Global. So, they’re a company that makes fresh drinking water out of sunlight and air without being connected to grid tight infrastructure. So what’s been really interesting working with SOURCE is that we funded their first water purchase agreement. So, you know the world of power purchase agreements better than most. Jon Powers: Yeah. That’s interesting. Dawn Lippert: But we should be able to apply the same kind of financing mechanism to many other kinds of critical infrastructure. And so, we funded their first water purchase agreement with the indigenous-owned community partner actually in Australia. And so, proving this business model and the economics behind it was really key to being able to scale the water purchase agreement model around the world. So, SOURCE is now deployed in more than 50 countries worldwide, and the projects create jobs. I mean, our projects now in Australia created 50 jobs and offset about a hundred tons of CO2 per year. So, these are major climate solutions as well as water and resilience solutions for commercial applications, remote applications, community applications, as well as potential forward operating base or resilience applications. Jon Powers: Yeah. So, for folks that are just getting familiar with Elemental, you really started in Hawaii, right, and began to expand out beyond Hawaii. First of all, was that just because you wanted to move to Hawaii or was there a reason? And then second, your experience there being in this islander community literally, how has that helped you look at scaling companies outside of that? Dawn Lippert: Yeah. So, it’s a great question. One of the reasons we were in Hawaii is because it is an amazing canvas to try new things. So, when we started Elemental in Hawaii in 2009, it was actually one of the few places where clean energy was way cheaper than fossil fuel energy because we were burning oil for power in Hawaii, as we do in many islands. And so, the economics just penciled out here way before they did on mainland. And now, it’s amazing to see of the broader clean energy economics catch up. But because of that economic dynamic, we were way ahead on solar, even electric vehicles, on biomass and other kinds of renewable energy technology. So, for example, distributed solar is the largest single power plant on the island of Oahu. So, it’s bigger than our biggest power plant. One-third of single-family homes in Oahu have solar on them. So, if you’re actually looking for a place to test technology, like one of our portfolio companies, Span, that adds resilience for individual homeowners and digital control panel, it’s a great place to roll out that kind of technology because it’s something that’s really needed here from a technical perspective, as well as regulatory and policy support, but it’s actually needed on the physical infrastructure before it would be other places. So, Hawaii presents this really nice case study in canvas for some of those technical solutions and then enables us to really learn how to scale them up elsewhere as well. Jon Powers: And you built a really interesting ecosystem there, the utilities, corporate partners, philanthropic organizations. I’ll put the defense department in there because it’s the major footprint of the Navy. What have you learned from coordinating or quarterbacking a coalition like that to actually try to get things done? Dawn Lippert: I think that’s one of my favorite parts of the job is actually working with all these different stakeholders to get things done. I was living in Washington, D.C. before coming to Hawaii. And one thing I noticed about living in Washington is that people get really specific into a vertical, right? So, you’re really specific into energy, everything about energy, but it’s not as clear or as intuitive to think about how energy impacts education and labor unions and water and planning and permitting, and all these other systems that have to intersect with energy to be successful. But then when you live on an island, we can’t go five minutes without thinking about these other systems and how we’re impacting them. So, I think that perspective has been really helpful for us in understanding what it really takes to commercialize technology in a real world setting. I mean, that’s what makes climate technology so fascinating and so different from scaling a social app or something on your phone or a software as a service technology. It actually is in real people’s communities. It doesn’t happen in a vacuum. People have to interact with it and accept it. So that’s been, I think, an advantage of being in a community like this. DOD, as you know, is one of our major funders and backers, has been since the beginning, specifically working with the Navy. And I think what the Navy has been really interested in, first of all, Hawaii is the only place that has all of the services co-located in one place. So, we have a huge advantage there in terms of having this military presence and coordination. And also our Indo-Pacific command is responsible for about 51% of the earth surface, so securing communications, land, water, air within 24 hours. So, it’s a huge responsibility. And one of their key challenges has been energy supply chain and infrastructure across this enormous area. So, really being able to connect with and have access to some of the cutting edge technology across these infrastructure spaces is an enormous competitive requirement I would say out here. Jon Powers: Yeah. So, for a lot of smaller companies and having served in the Pentagon and then working in Silicon Valley, there is a true lack of understanding of how to even enter that market, right, because there is a complexity, I think, many of the folks in the audience here at the summit are very well aware of. You’ve been trying to get a government contract and having to have the track record, and how do you even get in the door and realizing it’s going to take 18 to 20 months to get something started, which maybe get done in six months in the private sector. So, how do you coach those companies in your portfolio, for instance, to think about how to approach the federal government or the defense department in particular? Dawn Lippert: Yes. I think that consortiums actually like RISE and others that have emerged around that the nexus of innovation world or Silicon Valley investment world and DOD have an enormous role to play here. One of our favorite tools is to move projects in parallel in both. So, I would. Jon Powers: In both private sector and the public sector, yeah. Dawn Lippert: Yeah. And so, when we’ve been working with Navy and really setting up how Elemental works, there was a recognition that we would love to do projects within the fence line. There’s an enormous amount of value there, but also the recognition that this doesn’t often work, as you mentioned, with company’s timelines. And so, one of our roles has actually been to educate folks within the Navy or within DOD as how company timelines work, right? So, they may have raised a day. You really have 12 months to show certain milestones and traction, and you really need to hit those milestones in order to raise your next round of funding. So, there’s a time element built into startups. It’s not that they necessarily just always want to go fast because that’s what they’re built and they just need to always go fast, actually really built into how the company grows and matures and is financed over time. And so, part of it is that education process. But then what the Navy and DOD have done with us is, say, “Okay, let’s run projects in parallel tracks.” So that mostly we’re funding projects on the commercial side of the fence, outside the fence line for the DOD, and then parallel tracking on the DOD side. So, that might be something as simple as bringing project managers or base commanders along as we develop scopes and metrics to say, “Here’s the kinds of things we’re going to be trying to achieve with this project. Would that kind of thing be interesting to you and how do we bring you along the learning journey from the very beginning?” So, it could be as simple as that or it could be more in depth, such as going through cybersecurity protocol and verification process alongside the commercial projects. So, when the commercial project is successful, you’re already that sort of 18 months along with the DOD, so really trying to think proactively about how to parallel track projects so as to meet startup timelines while also ensuring that government is there to meet them when government is ready and really wants to take advantage of the technology. Jon Powers: Yeah. I want to go to the second part of your answer, too. Oftentimes, there’s an attitude within the federal government as this is the way we operate and you’ve got to fit into this box, but that doesn’t always work for innovation. So, as you’re educating back towards the government side, what are some of the biggest obstacles that you’ve seen them have to try to overcome or understand? And for instance, understanding the funding timeline, right, like startups don’t just move fast because they need to move fast. Sometimes they move fast because they only have limited money to prove their concept and go to the next stage. And they need to have a market. You need to have an off-taker, for instance, on a project to prove they can raise that next round. What are some of those big obstacles that folks in the government side need to understand so they can really tap the front end of innovation? Dawn Lippert: I think there’s a few. One of the bigger obstacles that we have seen is the way the services are staffed, particularly on the ground here. So, they’re designed for a certain level of turnover and people have their posts for a certain amount of time, so that can be really challenging. As you say, it takes quite some time to get this product up and running. And then often by the time you get to the altar, your champion is onto the next post. So, that means it’s really important to develop relationships up and down the line. But it also means one of the things that we’ve found to be most effective is to set out the metrics for success on the DOD side really clearly and in writing early. And then as new people come in and socialize in, you have of a really clear briefing history and a history of what’s happened with the project, but we’re trying to achieve where we are in the timeline. And you can really get the new folks to start to champion and lean into what it is you’re trying to achieve. So, I think some of that clarity is what we’ve learned from projects that, frankly, haven’t gone that well because we’ve lost our champion in the middle. The project was a little bit murky and being co-developed in a really organic way over time, which is a really natural way to develop these projects. Then we lose a lot of momentum trying to recreate that organic collaboration. Jon Powers: Interesting. And what role do you see the RISE Consortium playing now in that ecosystem in helping to move some of these concepts and these innovative solutions forward? Dawn Lippert: I think the main thing that I’ve heard from up and down the administration and the Hill is a huge amount of desire to work on this. I mean, exemplified by the fact that secretary of defense has four key senior advisors, one of them is in climate. I mean, this is a huge top-down push, right? But what we’ve heard up and down the administration is the need for really clear proof points. And so, I think that’s one place where RISE could play a really helpful role is to say, “here’s some things that we’ve found that are working well. Here’s how we know that, here’s how we’ve measured it, here’s where there are stakeholder buy-in around this,” which as you know both inside the fence and outside the fence is so important for DOD to know that. So, I think that’s one of the really key elements that RISE can play. I think the other is around demystifying some of the technology. So, it’s a little bit like cybersecurity was 10 years ago. People have been talking a lot about cybersecurity today. It’s a huge element of resilience. I see climate as the next wave. Where we were with cybersecurity 10 years ago, I think that’s where we are with climate now. And you think about the enormous need to clarify and demystify the cybersecurity space over time and figure out exactly what it is we’re looking at, what we need in terms of technology. That’s kind of where I felt we are with climate. So, that’s the other place that I see consortium like RISE can be so helpful in clarifying and demystifying it. Jon Powers: Yeah. I think that’s not only a need within the federal government, there’s a need within the private sector as people are really starting to accelerate. I think about the climate a lot as explained in a scene in the Matrix when all of a sudden it slows down and you started seeing the code. Until you get that, you don’t understand how climate touches everything. But once you do, you begin to understand all the interconnections of it. If you look at the last 10 years of this industry that we care so much about, it’s really been setting the table and putting the building blocks together for what is, I think, going to be a really dramatic decade of change ahead of us. What are you now looking for in your next set of companies that excites you about us being able to solve the climate crisis? And what are some of the verticals that you’re really interested in pursuing? Dawn Lippert: Yeah. It’s a perfect time for that question. We have just been going through due diligence and looking at hundreds and hundreds of companies and the new wave of innovation. And over the last few years, we’ve diligenced over 5,000 companies. Jon Powers: That’s amazing. Dawn Lippert: And so, it’s funny now to look at and say, okay, well, here comes another few hundred.” And every year I’m like, oh, we’re going to see the same things we saw last year because it’s kind of like feel a little bit like rinse and repeat, and it doesn’t at all. And it’s incredible to see the level of creativity and things that never heard of before coming through the door. So, that’s something that definitely gives me hope for the next 10 years and just think about the new talent coming into the space, diverse lived experiences that are bringing solutions I wouldn’t have thought of. So, I would say a couple of the areas we’re really… I would divide them, especially for this conversation, into two categories. One is around climate mitigation and environmental solutions there. And the other is around risk and climate risk. And we’re seeing huge movement from both the private sector and the public sector in both. I think there’s a real understanding that they’re different and there’s an enormous need for both. So, I think on the mitigation side, some of the things I’m really interested in we’re investing in some companies that are doing really interesting work in carbon. So, a few years ago, I invested the company called CarbonCure that sequesters carbon into concrete. Concrete is the most abundant man-made material on the planet. So, focusing on some of these big markets and big problems is one area of focus for us, so that’s something I’m really excited about. And other solutions to utilize carbon in ways that are economically feasible, we haven’t yet seen that in the direct air capture space where we’re investing, but we’ve seen it in Opus 12 and carbon to chemicals. We’ve seen it in carbon to concrete and other really creative ways to utilize carbon in economically feasible ways. Also in that space, really interested in the apparel space. That’s about 10% of global greenhouse gas emissions and fast fashion is an enormous contributor to both material ways and other environmental challenges, landfills, et cetera. So, there’s some amazing solutions coming up in that space as well, science driven solutions like a company called Evrnu that we’ve invested in, as well as marketplace solutions like a company called Thrilling that we’ve invested in. So, you can basically shop from any second-hand and consignment store online- Jon Powers: Oh, that’s. Dawn Lippert: … so bringing that whole brick and mortar world into cyber world. So, those are a couple of things I’m really excited about. And then on the risk side, looking a lot at fire coastlines and technologies or entrepreneurs that are really thinking about how to manage risk on the climate side and finding customers that really are leaning in and willing to pay, because they’ve seen what happened in Texas, they see what happened in California, and it’s really hit the bottom line. Jon Powers: Yeah. Well, first of all, let me ask before we get into the last question. Just from a process perspective, companies interested in submitting ideas to you, obviously, going to the website, elementalexcelerator.com, for sure, but just talk quickly about the processes as you look at some of these opportunities. Dawn Lippert: Yeah. So, Elemental, we’ve created an open process, as you said. One of our goals and one thing we’re really interested in is how to lift up new talent into this space. And so, one of the things we’re really interested in is how you democratize access to capital and to the networks to provide capital. So, we have an open application process that’s on our website once a year. With those companies, we only select a couple percent of the companies that come through our funnel, but we also serve those other companies in many other ways. So, we have a portal on our website, basically an AI-enabled matchmaking platform that connects investors in our network to companies in our pipeline that we think are ready. So, we’ve started building out a number of tools. Jon Powers: Was it a marketplace? Yeah. Dawn Lippert: Yeah. It’s an AI introduction engine. So, it doesn’t necessarily say to everyone in the world that startup is raising, which is not something they usually want, but creates curated introductions based on what investors are interested in and when startups are raising. Jon Powers: Oh, that’s good. Dawn Lippert: Yeah. So, we’ve been trying to bring forward a number of platforms that support not only our portfolio companies and the deep work we do with them, but really broaden out access to capital and ensure that some of the investors we work with can take a look at companies that may not be as well connected or the typical recipients of their capital, so lots of benefits to getting into the system beyond the direct work we do with our portfolio companies. And the same is true for our corporate partners. So, we recently announced Amazon’s Climate Pledge Fund as part of our scale up program, and we work with 25 other very large utilities and corporate partners. And one of the things that we are really committed to is connecting companies that we see at any stage, at any time of their growth to corporates that we think could be great customers or other partners for them. Jon Powers: So, last question, I usually ask about people’s personal careers, but I’m going to switch this up because you would work with so many entrepreneurs, so many you’ve touched bases, so many CEOs across such a breadth of companies. Is there a piece of advice you’d want to put to those entrepreneurs out there about how they should be thinking about growing their company or approaching, addressing climate change? Dawn Lippert: I think it gives me an opportunity to share something that I’m really excited about that we’re going to be launching later this year, which is our equity field guide. So, one of the things that we’ve been working on over the last number of years is how to support entrepreneurs at any stage in their journey and building equity into their companies, so both equity in, how do you think about hiring and retention and your supply chain, and also equity out, how do you think about the impact you’re having on the communities that you’re working with. And so, we’ve been working on this for four years with our portfolio companies and developing a lot of tools to support entrepreneurs. It looks really different for a company that’s five people or 10 people compared to big corporates who are doing this kind of diversity, equity and inclusion work. And so, what we’ve really zeroed in on is how do we develop that for startups and build it into the DNA early. So, we’re going to be launching that later this year. I think this is a gating issue for any entrepreneurs to figure out how to solve this, how to build it into their culture in a way that’s authentic to them. And we’re really excited about supporting the broader entrepreneurial community in getting there. Jon Powers: That’s amazing. That’s amazing. Well, what incredible work you’re doing for the broader audience. It’s important that you guys are also hiring. So, I’m going to drive you to the elementalexcelerator.com website, which we’ll have link from the CleanCapital website, some amazing opportunities for folks to get involved in the mission and be part of the team. I wanted to thank the team at RISE. And for folks who are interested in the consortium, you can go to www.rise-consortium.org. Again, we’ll link to the CleanCapital website. Dawn, thank you so much for the fascinating conversation. Dawn Lippert: Thank you and thank you both for the amazing work that you’re doing, really grateful to be part of the crew. Jon Powers: And thanks to Adair and Mike and the team at Converge, and of course, our producer as always. You can get more episodes at cleancapital.com. Thanks, Mike.