Boulder Valley clean-tech companies face competition in global market

BOULDER — As clean-tech becomes an increasingly global industry, companies large and small are looking to work together to foster innovation and success in a competitive field.

Boulder Valley CEOs discussed this issue and others at BizWest’s CEO roundtable on the clean-tech industry.

Demand has been driving the global market for clean-tech, especially with countries such as China that have been pushing for electric vehicles and clean energy due to a pollution crisis, said Joe Mitchell, CEO of UQM Technologies Inc. Europe is also increasing its demand for clean-tech.

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That demand has created increased competition, Mitchell said, especially as both startups and major companies return to the market of electric vehicles and other clean-tech. To stay competitive and meet the demand in China, UQM decided to sell to Denmark-based Danfoss Power Solutions, a major company looking to be a player in the space.

Siemens Power Generation is also looking to make sure it’s meeting the demand in China and entered into an agreement with a company there to license its product.

“Eventually, we will become competitors; we’re giving them the know-how to be our competitors,” said Jacques Nader, director of the wind turbine R&D office for Siemens. “I could see why smaller companies would face those challenges.”

Smaller companies might face a lot of competition from larger operations, but they also can be a key to their success. Nader said he’s looking to work more with startups because of their ability to innovate.

“One thing I’ve learned with a big company like Siemens is you have to become very patient,” he said. “If there’s a new idea, in the startup world you go try it out. Siemens is a process…. I’m in R&D so I’m very interested to work with startups.”

While there is a desire for startups and large companies in clean-tech to work together, that can sometimes be difficult.

“What we find is 90 percent of the time the innovation groups at larger companies aren’t empowered to do the job they’re supposed to be doing,” said Chris Kaffer, CEO of Maillinda LLC. “The innovation group guys are super smart and see how tech can innovate in a strategic direction. What happens is a business will get some friction and the startup ends up getting strung along a long time before everything falls apart.”

Steve Berens, CEO of Clear Comfort, said that he’s experienced that situation on both sides of the line. He said because clean-tech is still a relatively new industry, it’s still establishing the rules.

“Large companies are going to be large companies,” he said. “As startups, we need to recognize the right way to approach the length of time it takes. Things take their time to prove, get initial adoption and then real capital is needed. Dealing with the sustainability space, the rules are becoming gelled but they’re not quite there yet.

Getting capital is a significant consideration in the clean-tech industry.

“Our company survived on grants from the Department of Energy,” Mitchell said. “With the new direction that’s gone; we haven’t gotten a penny of government money in the last five years.”

However, there are opportunities for government funding, such as SBIR and STTR grants.

“More companies should seek out not-diluted, government-available financing,” said Trent Yang, director of private equity for AMG National Trust Bank.

The capital source can often determine the approach a business takes. 

“I had a company that was focused on investors; you’d look at the website and it was about smart cities and how it will solve all major cities’ transportation issues,” said Carl Lawrence, CEO of EnergySense LLC. “But then you’d take it to RTD and that’s not what they’re looking for so you need to create different marketing and branding to show you meet the needs of RTD, the customer.”

Paul Roamer, president of Ethos Distributed Services, had a similar experience of shifting focus.

“We had grand plans of fundraising and chased money,” he said. “As we went down that path, I became more convinced that money was a bad thing for a people company. We needed to bootstrap and perform and get to a size to execute before we bring money in. Now we’re at the point where cash is not a constraint. We can bring in money, but now we’re people constrained.”

Finding talent can be difficult. Fortunately, Nader said, many millennials are looking to put their skills into companies that have a mission, such as sustainability. But Roamer added that it can be very difficult to find blue-collar workers, with many community colleges starting programs in eco-tech but eventually shutting them down.

“On the professional side, we haven’t been doing a lot of hiring but we have been very successful. We compete with California and Michigan, and in comparison, Colorado is much more attractive; we get a lot of people who want to move here,” Mitchell said. “On the blue-collar side, that’s been a challenge. We’ve bumped our base rate up considerably.”

As a state, Colorado does well for clean-tech.

“When you look at different types of rankings of how Colorado does compared to other states, we settle in ranked between 5 and 7,” said Ed Williams, chair of the Colorado Cleantech Industry Association.

However, there are other states, such as New York, that have official initiatives and incentives to build its cleantech industry, a possibility Colorado could consider.

“The Front Range’s advanced materials and energy storage technology is incredibly robust, more so than New York and possibly as much as both coasts,” Williams said.  “Putting some state initiative behind that could add to an interesting robust ecosystem in this state amongst others.”

The BizWest Boulder Valley Clean-Tech CEO Roundtable included Steve Berens, CEO of Clear Comfort; Chris Kaffer, CEO of Mallinda LLC; Carl Lawrence, CEO of EnergySense LLC; Joe Mitchell, CEO of UQM Technologies Inc.; Jacques Nader, director of Siemens Power Generation Wind Turbine R&D Office; Paul Roamer, president of Ethos Distributed Solutions; Ed Williams, chair of Colorado Cleantech Industry Association; Trent Yang, director of private equity for AMG National Trust Bank. Moderated by BizWest Editor/ Publisher Chris Wood. Sponsored by Plante Moran, represented by Jim Cowgill and Jeremy Wilson, and Berg Hill Greenleaf Ruscitti, represented by David Kerr.