In April 2008, John Doerr gave a keynote speech at MIT, the alma mater and former employer of EEStor inventor Carl Nelson. The setting was the 2008 Energy Conference and Doerr kept the session interactive by a subtle and unusual technique of soliciting groups of questions which were responded to with individual attention inconsistently, allowing him to sidestep a question about electrification which seemed to provoke an intriguing set of behavioral cues the interpretation of which is best left to experts. Doerr pointed out that over the years, MIT had invested $50Mil in KPCB ventures from which $500Mil had been returned. Additionally, Doerr pointed out that 6 of the 30 green tech ventures they are backing are in the area surrounding MIT, not including A123 Systems which was funded by Kleiner rival Sequoia Capital...among others.
An unavoidable topic of conversation was Kleiner's intriguing transition from a focus on Information Technology ventures to Alternative Energy ventures. Doerr pointed out that Kleiner's $25Mil investment in Google in 1999 panned out 5 yrs later at it's IPO. In comparison, it's investment in Bloom Energy has required $250Mil and 7yrs of effort but still won't be profitable for another 2 yrs. Doerr:
The markets for the Internet ventures generally are measured in the billions. I believe the markets for the green tech ventures are larger, by maybe an order of magnitude in tens of billions. Or even more...energy after all, worldwide is a $6 Trillion business counting all the uses of it.
Doerr goes on to talk about how Kleiner is attacking this opportunity. Again, in his own words:
So for this field of green technologies, we're taking a very systematic approach to finding the best green innovations. ...now finding these solutions is good clean hard work. In the past couple years, this has been a priority at our shop. We've reviewed over 1500 plans. Met with 150 entrepreneurs, visited almost 50 different labs, universities, held 3 global convenings of the world's thought leaders from academia, the world of entreprenurs and businesses and policies. ...we've invested $250Mil in 30 ventures.
Based on Kleiner's prior successes, there's very little room to doubt its ability to continue picking winning ventures, which has made it a destination du jour for the money of many famous and powerful people. Take Michael Dell for example. According to David Kaplan in his 1999 book, "The Silicon Boys and Their Valley of Dreams," Dell became "the individual holding the largest piece of KPCB VIII and had asked to put in $20Million" but was only allowed to put $5Million. And this interesting tidbit:
Apparently, he (Michael Dell) didn't want the other investors to know he was in with them: His identity in some of KP's records is masked through the use of a Texas holding company called Kiralexa.
Kaplan points out that Kleiner's investors all receive a list of who else is invested in each fund including amounts creating a "pecking order within the tiers of investment [that] provokes intense rivalries among participants," and possibly explaining the desire to invest with Kleiner through a holding company. Recently, Kleiner's well earned prestige has been well documented by this Fortune article. In it, Kleiner's other stealth companies are profiled.
Characterizing what Kleiner has been up to lately has been greatly advanced by Jon Gertner's Oct 3, 2008 article in The New York Times Magazine. It's difficult to read Gertner's article and not come to the conclusion that Kleiner may have embarked on a strategy which may yield it's largest gains by an order of magnitude over previous successes. Of even greater difficulty, particularly for followers of this blog is to read Gertner's article and NOT look for EEStor clues.
I counted 2 oblique references to EEStor in the article. The first is in paragraph 5 where Gertner refers to "supersecret ceramic compounds," a reference which would be almost too good to be true if it weren't for the fact that Bloom Energy (also among Kleiner's 30 green tech ventures) also relies on ceramics. The second comes when Gertner lists the locations of ideas that Bill Joy and others "tracked down" in green tech including Texas among it's list. If you consider that Kleiner only appears to have 2 investments in Texas, it's likely EEStor is referenced there.
To find out if my guesses were correct, I contacted Gertner and asked him about his article, his access to Kleiner and EEStor. For the first reference, Gertner said he had other technologies in mind but with regard to the Texas reference he said, "Yes, I was definitely referencing EEStor there. Yes, absolutely." Gertner went on to point out that his reference to energy storage in the article also at least partially had EEStor in mind. So, if EEStor was what Gertner was writing about in those passages, what didn't he write about EEStor, what did he learn about it, what do they think of their investment now, is it one of the 15 green techs that Ray Lane says are of Google caliber, etc etc etc etc????? "My conversations about their stealth investments were off the record."
Overall, I had a good conversation with Gertner. He pointed out that the purpose of his article wasn't to cover particular companies so much as find a way to explain to a general audience the big picture of what Kleiner is doing and why. But he did explain that he finds EEStor interesting, a conclusion that was driven home to me when Gertner started politely posing EEStor questions to me ...while audibly scribbling things down on a pad of paper. :-)
The key take away from the above information is that if you want to understand whether or not EEStor has a viable future and you don't have access to 3rd party validation today, the next best way to gain insight into this is by observing the behavior of credible entities like Kleiner. To call companies like Lockheed and Kleiner fools because they don't understand dielectric saturation or the significance of prototypes, to me, is silly.
Note: here's another Doerr presentation.