15 October 2010

My Interview with Sheeraz Haji of Cleantech Group

Sheeraz Haji of Cleantech Group
I sat down the other day with Sheeraz Haji, President of Cleantech Group, which was hosting its Cleantech Forum New York this week.

Haji has been in his position for almost two years after a stint at McKinsey and a few successful software startups. He came to Cleantech Group because he saw an opportunity to "take a great brand and transform it into the leading market research firm on cleantech innovation."

But his interest in the environment goes back to his childhood. His father worked for World Bank in various developing countries, which gave the young Sheeraz some direct, personal experience with environmental issues. Water was a particular concern.

"I went to go swimming in a lagoon in Cote d’Ivoire (Africa)," Sheeraz says. "But my father said to me, 'You don't want to swim in there; that water's dirty, it'll make you sick.' I looked at the other kids, local kids splashing around in the water and responded, 'But there are children swimming in there…' That opened my eyes."

Water is one of the subsectors that Cleantech Group tracks, and the firm has a partnership with the US EPA to map innovation across the water sector. They also have a research partnership with the US Department of Energy on smart grid solutions. In addition, the firm provides data, research, and advisory services to companies and investors to need such information to make business and investment decisions.

What challenges are you seeing for the cleantech sector?

"Financing. Financing is still an issue. We're hearing that throughout the conference."

What about all that government funding? Was the US government's stimulus not successful?

"I think the stimulus package has been successful considering how complicated it is. Matt Rogers had a tough job; the government was in a tough spot. They did it fairly, I think, as fairly as possible. Of course there are critics. And I understand where they are coming from. Government has a big role to play, not just in money, but in providing a policy framework to inspire innovation."

What issues are out there looming?

"Water. Water is a huge global issue, which is why we're focusing on it here. It has been ignored when compared to the scale of the challenge."

Can you share some trends you're seeing?

"In our latest research, transportation received the most investor money. EVs, of course, but also things like the "ZipCar for China" -- eHi Car Service of Shanghai; EcoMotors; and car-sharing in general. ZipCar is a really strong model and brand.

"Resource sharing in general. How can you get more energy efficient than sharing office space or even personal cars. I mean, why shouldn't someone get some use out of my Prius while I'm not using it, as long as it's available the 3 days a year I'm actually home.

"More efficient internal combustion engines are a still in demand; we shouldn't ignore ICEs. Fleet vehicles are a huge opportunity, too. There are still a lot of opportunities to conserve less.

"Control systems; all sorts of controls HVAC, lighting, anything in building operation and performance."

We can't talk about electric vehicles (EVs) without talking about batteries. What are you seeing in terms of batteries, specifically for the EV market?

"No one has figured out the answer to batteries for EVs. We're just not there. I'm skeptical of battery swapping technology; I mean: will the public go for it? And will it help resolve the 'range anxiety' dilemma? People are afraid they'll run out of charge while out driving. I really think charging will have to mimic the gas station-style infrastructure."

That's a very capital intensive proposition.

"It is, but that's not the same in emerging markets, where they don't already have the infrastructure set up and people aren't already tied to their cars. You look at China and India. It's different in emerging markets. Where electric motorcycles might be a good place to start; we looked at electric motorcycles and thought it makes sense in China."

What about China? Any thoughts on the big green push there?

"I've just returned from there. There was a very positive vibe in Tianjin. They are embracing the Eco-City concept there. And you can see why: the demand, the need. It's real. And companies there tell me there are few capital constraints. Really, it is a can do -- and will do -- attitude."

Any thoughts on the cleantech IPO market?

"It's going to be an interesting place to watch. Amyris is performing. Brightsource could be one to watch. Everyone is waiting for Silver Spring Network to go public, of course, but smart grid deployment has been so slow. The IPO market will be pretty interesting. I'm optimistic about it."

What do you say to people (and I've heard a few VCs take this stance) who say that cleantech is too capital intensive to make it worth investing in? That we need more capital efficient opportunities to invest in.

"Cleantech has a host of segments and sub-segments; some are capital intensive; some are more capital efficient. I actually think there are too many people chasing capital efficient plays and that there is real opportunity in bigger, more capital intensive companies, which can still be successful. You can still build a big successful company even if it takes a lot of cash to build it."

What's next for Cleantech Group?

"Three things:

1) Investing in our research in 5 key areas: smart grid, energy efficiency, transportation, waste, and water.
2) Launching our water research series at our 1st ever water event: Nov 3-4 in LA: Water Research Series
3) Continued expansion in Asia (upcoming research projects and events in India, Korea, and China)."

For more on Cleantech Group, their research, and events: cleantech.com

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