Renewable Energy and Green Building Entrepreneurship

Chris Wedding, Faculty

Duke University

Week 1: Get Inspired - The Power of 3: Entrepreneurship + Green Building + Renewable Energy

Week 2: Dive into Business - Real Opportunity. Real Challenges.

Week 3: Blast Off - Moving from Ideas to Business Implementation

Week 1: Get Inspired - The Power of 3: Entrepreneurship + Green Building + Renewable Energy

Why Start a Renewable Energy and Green Building Entrepreneurship

Inside Entrepreneurship: Entrepreneurs Solve Problems

Global Problems

  • 2.5 bill lack access to clean drinking water or adequate sanitation
  • 1.2 bill lack access to electricity
  • 2.7 bill use biomass for cooking, link to 3.5 mill deaths per year from indoor air pollution
  • Lose 68% wild animals by 2020, relative to 1970's 58%
  • 100k chemicals, 3 bill potential combinations
  • 20% coral reefs are dead, 45% are healthy, 25% of world's fish live near them

Key Conclusions

  • World is full of environmental, health and social problems, creating new business opportunities
  • It is possible to do well and do good, no need to accept less financial reward when pursuing a business or investment that also creates positive environmental or social outcomes
  • The mission aspect of business that solve problems like those in these slides can form a powerful vision that attracts and retains passionate and skilled team members

Questions for you

  • Which of these problems resonates most with you? Is that feeling strong enough to inspire you to create a new business around it?
  • Which env or social problem were not discussed in these slides? Is there a way that renewable energy or green building projects, products, or services could be a part of the solution?
  • Do you see any conflicts with trying to run a profitable business and also trying to make a positive environmental impact? If so, why do you think that? Do you have the same thoughts at the end of the course?

Intrapreneurship: Innovation from Within

Intra = inside (can be entrepreneurship within a larger company) + innovation

Defining Intrapreneurs

  • Serve as major sources of productivity and innovation within companies
  • Seek more than a paycheck
  • Require autonomy, independence, and ability to experiment/freedom to pivot
  • Need to be promoted and challenged, or may move to another company

Big Companies: Innovate or Die?

  • Since 1995, almost 90% of Fortune 500 companies have merged, been acquired, or gone bankrupt

Intrapreneurship is Growing

  • 70% of Millennials (92 mil) want to start their own company, seeking meaning, impact, autonomy, creativity
  • Number of US internal corporate innovation incubators has grown from 12 (1980) to 7k (2016), 38% of world's top 200 companies have innovation labs
  • Questions
    • What can I create that does not exist?
    • What resources can I find or aggregate (that others overlook) in order to build something new?
    • What are customers going to ask for 3-5 years from now?

Opportunities in Green Building and Renewable Energy

Opportunities in Green Building Design

Mainstream in US, ex1 Bank of America Tower NYC 1.3 bil Certified LEED Platinum in 2010, payback was one year. Ex2 Empire State Building NYC 38% projected less energy usage, saving 4 mil a year.

Scale - LEED

1.5 mil square feet certified a day, 80k projects across 162 countries, 200k LEED Accredited Professionals

Impacts the Broader Economy

Booz Allen Hamilton projects that 2018 green buildings will account for 190 bil in labor earnings, 2 mill US jobs, more than 1/3 of entire US construction sector.


Initially created for suburban office buildings, industry interest and third-party rating systems have branched out to include other countries and types of buildings/developments.

Stringent and Innovative

Less bad is not enough for some, new programs provide guidance on net zero water, net positive energy, zero "red list" chemicals in building supply chains, social justice in the organizations that operate within these buildings.

Key Conclusions

  • Green building is no longer a niche for environmentalists
  • Not just about buildings, find passion in materials, public health, city planning, responsible site design, or social equity
  • Sector is growing because of financial reasons, not because of policy or environmental goals
  • What green building/development are there in your country? Can you become an expert?
  • Do you focus on mainstream or cutting edge green buildings?
  • How can you learn from green building successes in other countries, and then become a leader in that sector in your own country?

Financial Opportunities in Renewable Energy

Global Revenues in Advanced Energy

200 bill in US, 1.4 trill annually worldwide (2x airline industry), 375 committed to this sector by Goldman Sachs and Bank of America.
Solar and Wind Projects have over 1.5 tril invested since 2009, cost has fallen roughly 75% since 2009.
Energy storage market projected growth is 100x from 2013-22, and a 250 bill market by 2040.
210B to 410B additional investment/year is needed between now and 2050 to address climate change.
Between 2007-16, 59 T is expected to be transferred from Baby Boomer gen to their kids, impacting social investments.
Billionaires see opportunity, commiting to a 1 bil investment fund to grow innovative cleantech companies.

Green Building Case Study: Cherokee Investment Partners

Goals: 100% fewer greenhouse emissions, 50% less water use, 30% less energy use.
1st LEED Plat certified green building in N. Carolina.
One of first 10 LEED Plat historic buildings in the world.
Material reuse, daylight usage, flexible space design + recycled materials, team buy-in + cool spaces, culture + communication, HVAC efficient, solar panels

Key Conclusions

  • Green buildings do not general cost much more than conventional ones, this project cost less than a conventional non-green retrofit
  • Need champions for buy in, bring them into the design process, engage their creativity, create many owners of the green building idea
  • Tell others about your experience, share lessons learned, offer tours, write articles, doing so will help advance green building market while also branding yourself as an expert on the topic
  • What skills do you want to become more familiar with (architecture, mechanical, electrical, construction, marketing, brokerage, appraisals)
  • What credentials can you earn to make your green building startup more trusted (accredited professional for LEED, WELL, SITES, or similar)

Renewable Energy Case Study: Strata Solar

Green Building Case Study: Nicholas School of the Environment

Week 2: Dive into Business - Real Opportunity. Real Challenges.

Week 3: Blast Off - Moving from Ideas to Business Implementation

Week 2: Dive into Business - Real Opportunity. Real Challenges.

Drivers of Green Building & Renewable Energy Entrepreneurship

The Logic Behind Green Building

Diagram showing firms who have done more than 60% Green projects for 2015 and 2018. The delta between the two years showcases an opportunity for growth.

Green building costs for first constructions

Perceived extra costs (15%) vs actual extra costs (0-4%).

Lifecycle costs

 Financing and construction (25%) vs operational costs over a buildings life (75%).

Financial benefits

Rent premium, sales premium, absorption premium, occupancy premium, lower operational expenses, higher net operating income, enhanced land sales, greater tenant retention, improved retail sales, risk reduction.

Non-Financial Benefits

Increased worker productivity, reduced absenteeism, improved academic performance, faster recovery rates at medical facilities.

Human Health Benefits (0% weight on bottom line because they are hard to model)

Daylighting (extra 46 min, thus better sleep), ventilation and air quality 100%, active layout design, acoustics and noise reduction 66%, thermal comfort 5%, biophilia and views 10%, location to amenities.

The Business Cases for Green Building

The Logic Behind Renewable Energy

Manage Budgets

Can create 20-year predictability in power prices that also escalate at lower annual rates than conventional (often through power purchase agreements (PPA))
Personal note: because tech affects/lowers storage and collection, long term predictive models may not account for global grid transformation

Be Resilient

Business, hospitals, financial institutions, data centers, and many homeowners don't want to ever go without power

Save Money

76% of companies surveyed by PwC see renewable energy purchases as a way to generate an attractive return on Investment (ROI)

Build a Brand

70% of big corps are actively pursuing renewable energy

Attract and Retain Talent

60% of employees care about whether their employers take action on environmental and social sustainability issues.

Additional Resources of Logic Behind Renewable Energy

Inside Entrepreneurship: Benefits and Examples of Entrepreneurship

Richard Branson: business magnate, investor, philanthropist, virgin group founder, the ability to make positive impacts at large scale.

Benefits of Entrepreneurship

Flex schedule and work location, opportunity to build real wealth for you, your family and your team. Elon Musk: found, cofound, TCO, chairman, and CEO, Tesla, SpaceX, SolarCity, PayPal.

Global Impact

Solve poverty through business solutions. Kenya, Tanzania, Uganda: 450k homes upgraded to solar power, 500 new homes added everyday, 300 mil saved over 4 years

Key Conclusions and Questions

  • Entrepreneurship can offer low work-life balance early on but fantastic life balance after success
  • May hold more potential than charitable work to address environmental, health and poverty problems
  • Is redefining "work", now company size, culture, work schedule, work location and business purpose are much more flexible
  • Which benefits excite you the most? Who inspires you, study their path, success, failures and daily habits.
  • How will you define success - control over schedule, financial success, environmental or social impacts, other?

Entrepreneurship: A Working Definition and More

Challenges in Green Building & Renewable Energy Entrepreneurship

Inside Entrepreneurship: Criticisms of Green Building

They cost too much (15% perceived extra costs, but 0-4% actual extra), 25% = cost in financing and construction, 75% = operational over a buildings life, thus optimize for building life management.
Can look like any other building, with the addition of having that third party certification. Result in construction delays, if the team is not familiar with building, sourcing, managing. More people are integrated in the design and planning phase to get things right. Certification cost is too high, depends on stakeholders.

Inside Entrepreneurship: Criticisms of Renewable Energy

Renewable energy is a new industry and does not have as much subsidies. In the past there was too much policy risk. Intermittent power, storage market is projected to grow over 100x from 2013 ot 2022 becoming a $250 billion market by 2040. Environmental and human health impacts go ignored, 140-320k birds die each year from wind turbine collisions. Offerts below market financial returns (not true). Do they suffer from too much technology risk? No, most is invested in assets. Cost has fallen and warranty has gotten better

Inside Entrepreneurship: Challenges in Entrepreneurship

Psychological struggles: roller coaster, full of uncertainty and ambiguity, create self-doubt, can be lonely. Material sacrifices: no eating out 3x per week or buying that new car, no end of year bonuses, health insurance, or matching retirement savings. No saving for retirement or kids college funds. Compared to your plans, the business might take 2x the time and only product 25% success.
Personal Note: Not sure I agree with the material sacrifices, this is assuming that you go all in and don't have a financial safety net/don't offer yourself appropriate funds.

Week 3: Blast Off - Moving from Ideas to Business Implementation

What Business Solutions Do you Have to Offer?

Inside Entrepreneurship: Empowerment and Inspiration

Why start? To change the world! Willing to work 80 hours now to avoid working 40 hours a week. Avoid regret - twenty years from now, you will be more disappointed by the things that you didn't do than by the ones you did do, so throw off the bowlines, sail away from safe harbor, catch the trade winds in your sails. Explore, dream discover. The critical ingredient is getting off your butt and doing something. It's as simple as that. A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow, not next week, but today. The true entrepreneur is a doer, not a dreamer. For all of the most important things, the timing always sucks. The stars will never align, and the traffic lights of life will never all be green at the same time. Conditions are never perfect. Someday is a disease that will take your dreams to the grave with you. Pro and con lists are just as bad. If it's important to you and you want to do it eventually, just do it and correct course along the way. Ideas are easy, implementation is hard. When everything seems to be going against you, remember that the airplane takes off against the wind, not with it. Half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance. A person who never made a mistake never tried anything new. I have not failed, I've just found 10k ways that won't work. Success is walking from failure to failure with no loss of enthusiasm. I've missed more than 9k shots in my career, lost almost 300 games. 26 times trusted to take game winning shot and missed, failed over and over and over again in my life  and that's why I succeed. 

Generating Ideas for a Startup

What do you complain about? Look for problem,s preferably your own, avoid solving a problem that no one has. Have others already designed solutions. Are you creating a vitamin or a painkiller? Nice to have or need to have? Are you super excited about it? Your passions + skills are unique. We are not robots or one-trick ponies, instead we have a diversity of passion and skills combining these can create rare combinations that make your next product or service stand out in the market. Focus on fabric for airplane chairs, don't just chase technology for new business ideas, the majority of global products and services are sub-optimal and have been overlooked for decades. They are ripe for some fresh brain power and hungry entrepreneurs.

Refining Your Vision

Understand the market: will prospects pay for your good or service? Can they afford to pay? Are there enough prospects who could pay the price you are asking? Is there a barrier to entry against future competitors? Do you have first mover advantage? Do you have the skills to operate the business? Do you represent your target market yourself? How long will it take to generate enough revenue to support you and a small team? How much startup capital is needed? Are you a high margin, low volume business, or the opposite?

Key Conclusions

All business models are not the same, choose a product or service that matches your timeline, risk tolerance, available capital and ultimate goals. Study what support system you will need to succeed before you begin (startup capital, marketing partners, technical skills, and more). UNderstand the market and yourself, you only can control the latter.

Moving to Reality

Using the Business Model Canvas

Definition: is a strategic management and entrepreneurial tool, assumes business plants change frequently, compresses a business plan into one page. Allows you to describe, design, challenge, or change your business model. Can more easily explain your business internally and externally. Should be completed by many people in an organization and then compared to uncover new opportunities and risks.

Parts: key partners (suppliers, peers, stakeholders), key activities (for customers, suppliers, peers or stakeholders), key resources (what they need), value proposition (for customers/what makes it different), customer relationships (connect with customers), channels (how reaching selling), customer segments (who, fish-whales), cost structure (which metrics, priority and ranking), revenue streams (values are customers willing to pay, how do we decide on price ).

Building a Great Team

You can't do it alone. Balance your limitation with others' skills and passions. Focus on strengths, instead of struggling to improve weaknesses.
Personal note: Find people that will provide feedback while improving weaknesses so you don't struggle through them; aka accountability partner.
List of strengths to consider: executing, influencing, relationship building, strategic thinking.
Sharing the pie: counter intuitive truth - in order to create a company with greater value and impact, you may need to share the wealth. Company value increases with more stakeholders that contribute. 100% of a small amount is less than 30% of a large one (when focused on multipliers).
Hire for cultural fit or raw ability: fit is a requirement, not an option. Jobs change quickly, people don't. A business is only a job until your firm is making money while you're sleeping.

Financing Your Business

<50k Friends and family, 50-400k Angel investors, 400k+ venture capital. Do you have market traction with a pilot project with results, paying customers, strategic partners, advisory board? 

Which investor is best for you? Seek a cultural fit, ancillary benefits might mater more like network or advice, strategic alignment, ability to invest in multiple rounds as venture matures.

Understand your investor: make it about them, not you. hat is their risk tolerance? Financial return expectation? How long can they wait? Are they sophisticated in your sector? What if they lose their invested capital? Are they interested in non-financial benefits?

Work your network: investing is about trust, find ones via mutual connections, check for commonalities like geography, school, hobbies, university studies, online groups.

Make a great pitch: 20 min for live meeting, connect emotionally with a story, communicate determination, ask the questions.

Launching Your Business

Validate and Refine, survey your customer, what do they like or dislike, and what will they pay. Convert your business model canvas into a language for a website (home, contact, about, blog). Launch needs a 1 pager using graphic design/pdf. Follow up with and Advisory Board to help you and hold you accountable when you don't know where to go next. Launch, find channel partners to help sell your service or product, and motivate them financially to do so. Start a blog or vlog or social profile to demonstrate your expertise and write regularly; think about a Q&A format.

Aim for a high touch approach that does not scale at first, get out of the office and talk to customers who are happy and unhappy as well as those who said no to you. Learn and refine your business, as an iterative process.

Key Conclusions

Perfect is the enemy of good, launch before it is 100%. Your first business idea is likely to fail, which only happens when you give up. It is very easy to start a new business thanks to all of these SaaS.

So Now What?

Closing - A World of Possibilities

Need grit, determination, focus, tools and software, mentor, business community online, resources for entrepreneurs and startups.