Why CTC?

We have a problem

There is a growing awareness of the types of human activities and consumption that does the most damage and while there is some willingness by individuals to change behaviour and reduce their carbon footprint (and the current recession is probably good for the environment!), the likelihood is that demand for energy will continue to increase - people are slow to change behaviour. The challenge is to create new products and services that can either:

generate new sources of sustainable energy or increase the efficiency of existing generation, storage, transmission etc ('supply-side' solutions); or
develop products and services that result in lower energy consumption - and that will be readily adopted by users (both consumer or business).

Such products and services will nearly always have a high 'technology' content although they may not rely on 'high technology'. This is an important distinction - many of the technologies that we need already exist having been developed for an entirely different purpose. In many cases all that needs to be done is to identify an opportunity and then 'harvest' existing technology in a new way.

Why now?

This competition was conceived two years ago when oil was at $140 a barrel. At that time there were good economic reasons for developing alternative energy sources (supply side) and ways of using energy more efficiently (demand side). With so high an 'umbrella' many energy generating/saving technologies and businesses became viable for the first time. Investors recognized this and the number of greentech and cleantech funds mushroomed - some created afresh, some refocused from sectors that had gone off the boil.

Since then the oil price has, of course, collapsed. However, one imperative has been replaced by another - regulation. Climate change is now on the agenda of politicians and governments - largely because the 'public' want their leaders to act. Everywhere there is looming legislation and other 'initiatives' (like carbon trading) designed to regulate and provide an 'incentive framework' that will drive down the use of fossil fuels.

The net result is the same - the investment climate (both corporate and new venture) remains very positive1. Investors know that there are huge new areas markets opening up and are hungry for new opportunities and - though they may deny it - they are competing for good deal flow. The best funds are going to make very good returns.

Where will these new businesses come from? We believe that there is a lot of 'low-hanging fruit' out there, by which we mean:

Proven technologies - perhaps developed for other purposes entirely - that can, with a little imagination and ingenuity - be applied to and utilized in a clean technology application. There's a multitude of scientists and engineering research students at the top of their game - and creative enough to think of ways in which they could 're-purpose' or adapt their expertise and technology to a 'clean technology' application.
Insights gained from knowledge of industries and markets - new products and services that fill real needs. There's a multitude entrepreneurial and imaginative business school students who spot such needs - but lack the know-how (technology) to do anything about it.

How we're rising to the challenge

The first aim (Phase 1) of this competition is to challenge these two communities (technical people and business people) to propose new opportunities for potential new products and services in the 'clean technology' arena. These ideas will not be well-formed and most will be no more than 'educated hunches'. That's fine - this is how many new enterprises start life. We want as many ideas as possible in the 'hopper' - grading comes later.

The second aim is to generate real 'teams' of individuals drawn from technology and business backgrounds to work on these ideas. These teams will be 'rounded' to the extent that they will bring the multiple perspectives, experiences and 'know-how' of both business and technology. We do not pretend that such teams would have the right skill-sets to take the new product or service all the way to successful commercialization (that hardly ever happens). However, they might well have the capacity and will and to take the idea to the next stage.

The third aim is to challenge these teams to develop a proposal for taking the idea to that next, 'proof-of-concept'2 stage of development. Such 'proof-of-concept' funding is comparatively easy to find for promising proposals3. We will challenge teams to say how they would use such funding to take the proposed product or service to the point at which:

It would stand a good chance of attracting 'series A' venture capital from a Clean Technology Fund; or
It could be licensed to an existing company that recognizes the potential of the 'business' and wants to buy or license the concept or the intellectual property (e.g. in the form of patent, know-how, design or brand); or
It becomes self-sustaining - in other words generate revenues that would obviate the need for further external investment (an unlikely but possible outcome).

Different from so many business Plan competitions

Most business plan competitions are an end in themselves – the final plan is so often an elaborate document that does not focus on the core risks and challenges faced by a new venture. Only in rare instances do these competitions provide the participants an opportunity to develop the concepts first. They are a terrific learning experience and an excellent mechanism for stimulating (mostly) students to think about a new venture and celebrating the ones who have done the most thinking – but the vast majority go nowhere.

This competition might be different. To begin with, we're trying to base our new ventures on real technology opportunities and market needs. Second, we believe that there really is investment available for good opportunities. Third, we are putting together 'teams' that are explicitly short-term - whose sole objective is to take the opportunity through to the next stage of investment by a process that we call 'de-risking'.

In short - we want to create sustainable ventures. And this is how we do it.

Clean is more than green - what is clean tech?

Cleantech represents a diverse range of products, services, and processes, all intended to:

Provide superior performance at lower costs, while
Greatly reducing or eliminating negative ecological impact, at the same time as
Improving the productive and responsible use of natural resources

More complete definition please refer to www.cleantech.com/about/cleantechdefinition.cfm

1 "Venture investment in renewable energy tripled to $3.1 in 2008, according to Data tracker VentureSource, and the Obama administration's willingness to aggressively back the clean technology sector should only spur more start-up capital." Wall Street Journal online - 9th March 2009

2 The concept to be 'proven' may be technological, 'can we make it work'? But it might well be commercial, 'will customers actually buy it'?

3 Which it is - there are an increasing number of 'proof-of-concept' and other 'development' funds available in the range £25k - £100k (and sometimes as much as £250k). This funding sometimes has the added advantage that this money is often 'soft' - that is, in the form of grants rather than equity