New DE Book Coming Later This Year

After many years of work, the next Disciplined Entrepreneurship book is with the publishers now and will be coming out later this year.  It dates back over a decade now, when we started to apply the Disciplined Entrepreneurship methodology to the all-important Climate and Energy sector.  It turns out that the first principles applied, but there were additional dimensions to consider, and the sequencing might change a bit.

After running the course on this topic and getting feedback from hundreds of students, as well as dozens and dozens of guests and instructors, we are ready to publish.

We are pleased to share the Disciplined Entrepreneurship for Climate and Energy Ventures: 24 Steps to Build Solutions for People and the Planet cover (now available for pre-order).  While the content is now basically locked down, the “final final” editing and formatting is not (which includes the invaluable and much cherished illustrations), so as this becomes more finalized, we will be putting more of the content up here in the upcoming months.

But for now, I am comfortable sharing my Foreword and a few of the testimonials from people who have seen the materials.

Enormous thanks to all the students who have taken the class and contributed to this effort, as well as the many, many guests and mentors over the past almost two decades (too many to try to name here, but know we are extremely appreciative of all of you).  A whole other level of thanks is due to the three masterful and committee core instructors who stayed with the course to deliver it and keep improving it each year, co-authors Tod Hynes, Frankie O’Sullivan, and Libby Wayman.  Most of all, I want to thank Ben Soltoff, who came in a few years ago to the Trust Center with a complete devotion to this topic and has taken the initiative to make the book happen as the lead author.

Foreword to the Book “Disciplined Entrepreneurship for Climate and Energy Ventures: 24 Steps to Build Solutions for People and the Planet”

On May 6, 2005, MIT President Susan Hockfield announced in her inauguration speech that climate was the moral imperative of our generation. She was going to marshal the vast resources of MIT to address this challenge. One of those assets was our excellence in entrepreneurship.

After decades as an entrepreneur in the information technology (IT) sector, I was surprised by the lack of entrepreneurial activity in the energy sector. Irrationally overconfident (a trait of many entrepreneurs), I thought this was going to be easy. I would just take the refined principles I had learned and apply them to the energy sector, and we would have this sorted out within a year. So, I set out to do my first solo, brand-new-from-the-ground-up course at MIT in the fall of 2007, then called simply “Energy Ventures.”Oh, was I wrong!

After a systematic analysis of the industry and the challenge, I realized that energy was drastically different. My former MIT colleague and later U.S. Secretary of Energy Ernie Moniz summed up the situation perfectly in just two sentences: “The energy industry is a multi-trillion dollar per year, highly capitalized, commodity business, with exquisite supply chains, providing essential services at all levels of society. This leads to a system with considerable inertia, aversion to risk, extensive regulation, and complex politics.”

The dynamics driving exponential innovation in this sector are different than those in software technology2. The end product is often a commodity (such as a kilowatt-hour of electricity), and the industry is extremely capital-intensive. It takes decades for breakthrough innovations to be adopted in the market. Disintermediating the existing players is often not a feasible strategy; you have to work through them. Solutions need to focus more on price than value, and they definitely need to scale to be meaningful.

Then, there is the fact that energy is an essential service to society and has very direct links to policy and politics. At the micro level, it is often perceived as a right rather than a privilege, which has ramifications at the macro level. At the government level, energy and climate are two of the strongest factors driving national security and economic well-being. While “energy independence” is a term fraught with issues, it is still a powerful topic for political leaders. There is no escaping regulation.

I realized that traditional venture capital, which is a fit for the IT sector, is ill-suited for energy. I wrote about this in my August and October 2007 articles “What Wrong with Energy Investing?” (Parts I and II)3, which I must say with some humble brag, hold up pretty damn well. I wrote them around the peak of Cleantech 1.0 investing. VC investors did not do well at that time, but there were plenty of investors who made money scaling wind power. Unfortunately, many VCs ran away from energy and blamed the sector, not the framework in which they were analyzing and building companies.

But the important question I faced while designing an academic course is: What should the future climate and energy entrepreneur do to be successful? After a tremendous amount of thought and testing hypotheses, I realized, along with my colleague (and course co-founder) Tod Hynes, that there are key components of the battle-tested Disciplined Entrepreneurship framework that easily transfer.

Our course has run continuously since its 2007 launch. Well over 600 students have taken it, and we have seen how they have done in the real world. Our teaching team expanded to include Frankie O’Sullivan, who brought an incredible depth of expertise on the technical side to the team; Libby Wayman, who adds expertise based on her firsthand experience in government and large corporations; Jacqulyn Pless, who joined as an instructor and shared her wisdom on economics, policy, and innovation; and finally, Ben Soltoff, who added a new perspective that included rich experience and expertise in climate and being a thoughtful writer (don’t underestimate that when documenting what you are learning and writing a book!). A series of tremendously talented teaching assistants have also helped run the course.

The result is a framework that we have found to work, and we have the evidence to show it. Over 60 companies have directly come out of the class, and they have raised at least $2.3 billion in funding and created more than 2,500 jobs. There have also been at least 116 CEOs and co-founders who have come through the course over the years. Several students have gone on to start their second and even third companies. These alumni companies have raised at least $5 billion and created more than 4500 jobs.

Is it an algorithm? Is it perfect? Is it done? The answer to all of these questions is definitely no. It will be forever evolving, but I am sure what we are offering in this book will contribute significantly to the corpus of knowledge about how to teach and do entrepreneurship, or simply call it innovation if you want, because it does not need to be tied to startups in this incredibly important field. In fact, I can think of nowhere else where innovation is more important. We need more innovative leaders in large government, corporate, and non-profit organizations who can run through brick walls to make the change needed for economies to adapt to the changing climate and stop making the problem even worse.

Lastly, as we have seen with the foundational Disciplined Entrepreneurship framework, we can start to apply artificial intelligence and create tools that will even further accelerate our ability to innovate, but first, we must refine the methodology. To write the prompt libraries, you first need a proven framework. That is what we are offering here for the first time.

That is our goal in this book—to share a practical guide for building climate and energy ventures—and I am confident you will find it helpful. We look forward to others building off this to solve the singularly most fundamental challenge of our generation, as President Hockfield laid out over two decades ago now.

Bill Aulet

Early Testimonials for the Book “Disciplined Entrepreneurship for Climate and Energy Ventures: 24 Steps to Build Solutions for People and the Planet”

“What I learned in the Disciplined Entrepreneurship framework has helped me found and build two successful climate and energy companies.  This framework has been my road map, and I recommend it to all.”
—Alex Wright-Gladstein, CEO and founder of Sphere. Co-founder of Ayar Labs.

“In my quest to address the dual challenge, I have looked far and wide to find the best methodology. I found it in this Disciplined Entrepreneurship approach, and we have successfully brought it to Texas.  I strongly believe it should be adopted globally, and we intend to help facilitate this.”
—David Baldwin, Partner at SCF Partners: Energy Service and Technology Investments, Co-Founder of OpenMinds and TEX-E.

“People often say that there is no ‘playbook’ for building new ventures in the climate & energy space. That changes today with the arrival of this singular new book that distills the hard-won lessons learned in the trenches over the last almost 20 years by the teaching team at MIT’s Climate & Energy Ventures course. A bible for aspiring entrepreneurs who want to save the planet and make a lot of money while they’re at it.”
—David Danielson, Former US Assistant Secretary of Energy Efficiency & Renewable Energy; Co-Founder, ARPA-E; Partner, Breakthrough Energy Ventures; Founder of MIT Energy Club as well as MIT Energy Conference

“It was the Climate and Energy Ventures class at MIT that showed me that there was a systematic way to build and evaluate these types of companies.  These lenses, as well as the discussions in the classes, have been invaluable to me as a global investor with a focus on sustainability and impact investing for the last 15+ years.”
—Shahazwan (Juan) Harris, current Head of Strategic Investments, EPF Malaysia, and former Executive Director, Investments, Khazanah Fund (Malaysia)

“I’m not sure my start-up company would have made it without these frameworks—but I know for certain it wouldn’t have achieved the same level of success. The prescriptive, actionable guidance in this book is unmatched for anyone building a climate or energy company. For me, Disciplined Entrepreneurship was a true north star.”
—Oliver Stahl, founder and CEO of Entelios AG.

More to come soon ….