Art Center College of Design Panel: Sustainable Mobility Opportunities Abound In L.A.

Neal Anderson (Propellant Group): We have really smart people to talk about a new dimension and creation cycle around a new and sustainable economy. What's interesting about this panel...is that they represent an end-to-end capability from idea generation to market success...What we are going to be dealing with is how to get new sustainable economy ideas into the marketplace...You are looking at representatives of investment, business, government, and education. We're going to talk about those four sectors and how they interact...

Matthew Trevithick: I'm a partner at Venrock which is a little bit north of here in Palo Alto, in the heart of Silicon Valley...There are really a couple of reasons for me to be here. First, and most importantly, I believe that design will be an essential component of accelerating the adoption of clean energy technologies. That is going to be particularly true in the vehicle space. That is my primary reason for being here. Part of it is to also meet people I wouldn't ordinarily meet in my day-to-day activities as a technology-oriented venture capitalist. To reciprocate that, I'd also like to share with you some of the inside secrets of raising venture capital and what it's like to interact with a venture capital firm. We are small, private partnerships and there is a tremendous personal nature to the business. We tend to invest in things in which we are personally interested, either through direct experience or if we have taken the effort to educate ourselves with a set of activities.

I'd like to take you through why I am particularly interested in transportation and why my firm, Venrock, is particularly interested in clean energy investment...I found that I had a distant relative in Cornwall, England who invented, a little over 200 years ago, the steam locomotive. That meant that he was an engineer crazy enough to tinker with the steam engine and make it powerful enough to move itself. By inventing high-powered steam engines he was able to make this particular vehicle, the Penydarren, go nine miles at a speed of five miles per hour in 1804. When I found out about that as a little boy it pretty much destined me to become an engineer and have the bold ambition to participate in creating a future solution in transportation...I pursued a career in engineering and entrepreneurship.

I have had two software companies that successfully sold and gave me the opportunity to, in 2000, really commit fully to energy technology. I was initially looking for entrepreneurial activities. That brought me into contact with the venture capital industry as it was just starting to formulate investment theses around clean energy. Venrock invited me on board in 2004 to help them build out a clean energy practice.

Lawrence Rockefeller founded Venrock in 1938 as one of the pioneering venture capitalists. Venrock stands for "Venture Rockefeller." At the time there was no organized method for backing entrepreneurs, but Lawrence recognized that Venrock could be an engine of growth in the U.S. economy. He invested in what he found interesting at the time, which was aviation. He backed James McDonell, with McDonnell Douglas, and Eddie Rickenbacker, who was a World War I fighter ace, in what was the creation of Eastern Airlines. From aviation came avionics. That quickly, in the ‘60s, led to electronics. In 1969, Venrock was professionalized under dedicated venture capital managers. Venrock was fortunate enough to be the only institutional investor in the first round of Intel in 1969. Apple Computers followed. 3Com and a company called StrataCom sold to Cisco for a healthy percentage of its market capitalization.

We are a diversified venture capital firm. Our theme is "early stage energy technology." Information technology has been our historical strength. Digital media and internet software came along in the ‘90s. Healthcare represents about one third of our investing activity. In the Silicon Valley, Lawrence is known as a pioneering venture capitalist, but in other elements of the community he was also a pioneering conservationist.

We have great interest to invest in transportation because transportation and the electricity supply are the two huge markets available for energy technology investing. I'm going to focus on a couple of transportation investments that happen to be local.

Transonic Combustion is a novel fuel injector system with the opportunity to dramatically increase the fuel efficiency of internal combustion engines without changing how they are made or used. When all of you drive your automobiles you probably recognize that the engine gets hot and the tailpipe gets hot. It turns out that you waste about two thirds of energy heating those components, and if you don't do that it is the source of efficiency gain. We are actively working with OEMs to get this technology into mass-produced vehicles.

We believe strongly in a couple of things: That the internal combustion engine is with us for a period of time, but that the electrification of the vehicle drive train is taking us to very exciting and new places. When a vehicle is principally an electric instrument, enabled by a large battery, what it means to be a car suddenly changes. Ativa is one of our companies making large-format battery packs for electric vehicles like the Think automobile, which is a city car that some of you might be familiar with.

In conclusion, there are four reasons people buy products. Products are either better performing or lower cost. They are more convenient. Fourth, they are better designed. Fashion is a tremendous reason as to why products are purchased and the design community getting involved in the clean technology movement can be, probably, disproportionately influential in helping drive some of these aspirational products into the market.

Cecilia Estolano, CEO Community Redevelopment Agency Los Angeles: I am here today to talk to you about what role we hope local government can play in driving innovation, innovation in the sense of building the green economy. We believe Los Angeles has the potential to be the clean tech manufacturing center of the nation. In terms of mobility, we are already a leader in design for transportation solutions. What we would like to do is become the leader in manufacturing, designing, and assembling some of those sustainable transportation solutions so that we can create good jobs for people that live in Los Angeles. We need to rebuild this economy to rebuild the middle class if this is going to be a sustainable region.

Los Angeles is on its way to becoming the greenest big city in the world. We have a number of initiatives, everything from a very ambitious renewable energy goal from the largest municipally owned utility in the country-the Los Angeles Department of Water and Power-to achieving tremendous reductions in our waste stream (we have tremendous recycling rates from cities in the United States). We are trying to reduce water consumption. In a relatively arid environment with three sources of imported water-all three of which are threatened-we absolutely must reduce our consumption if we're going to be a sustainable city. We already have very aggressive goals for reducing greenhouse gases. We've already exceeded our Kyoto Protocol goals and are on our way to reducing CO2 emissions to 35 percent below the 1990 levels. We have the second largest fleet of hybrid vehicles in the nation. We are a leader in having an alternative fuel city fleet. Don't think of the cars that bureaucrats drive, think of trash trucks, think of vehicles at the airport or the Port of Los Angeles.

We have also been the leader, believe it or not, in funding public transportation. Our mayor was spearheading the Measure R initiative that recently passed to raise $40 billion in transportation investment for clean fuel buses, trains, and some highway projects.

We are pioneering green building. We have a leading green building program in the city of Los Angeles. We are working our way into creating much more open space and a more livable Los Angeles by planting one million trees. We are greening the largest port in America and taking 16,000 dirty diesel engines off the road at the Port of Los Angeles, making them a clean fuel fleet. That is a tremendous innovation in transportation. We are also greening our Los Angeles airport. We have that, and many more initiatives.

The redevelopment agency is just one part of the city. Our goal is to promote economic opportunity and improve the quality of life for the people who live in 32 areas spanning Los Angeles all the way from Wilmington in the south to Pacoima in the north to the Eastside to places like South Los Angeles and Westlake. This is our mission and we are focused on strengthening the L.A. economy.

We are also the key city agency for promoting transit orientated development. Thirty-two of the 59 transit developments in the city are in our project areas. We play a tremendous role in facilitating community engagement, planning, land assembly, and investment in infrastructure of urban design, all to encourage the kind of development that will encourage transit use and a more efficient use of land.

We are in the business of creating economic opportunity. We are focused on trying to bring manufacturing jobs to Los Angeles. Why? They pay better and they can recreate the middle class that we've lost over the last 20 years when we had the aerospace industry decline.

These are all of the things we have to offer. We are a convener and we can be a facilitator in the best sense. We have access to capital. We have a tremendous market, some of which I have enumerated already. We have a talented and diverse workforce and a wonderful lifestyle. We have leading institutions here, UCLA, USC, CalTech, JPL, and others. We have some of the greatest drivers for transportation in the country. We have the largest port complex in the country, one of the largest airports in the country, and of course the Alameda Corridor runs through our city.

We are promoting L.A. as a clean tech destination. We are promoting three clusters: the San Fernando Valley, the harbor area, and, particularly, the Downtown area. In each of these areas we have a number of incentives we can provide. I hope that when we get into our dialogue we will be able to talk with venture capitalists and innovators about what, if any, of these incentives are useful to them.

Let me tell you about the Clean Tech Corridor in Downtown Los Angeles. We envision a "Clean Tech Corridor" stretching from the Cornfields to the north, where our DWP will have an R&D facility, all the way to our "Clean Tech Manufacturing Center" to the south, where we own 20 acres. We will issue a request for proposals (RFP) for end user clean tech manufacturers, some of whom may be in this room today. Folks like Aptera, we think, have the potential to incubate a whole industry in Los Angeles.

Our vision is that we want to see the triple bottom line. We'd like to see good paying jobs and clean production producing an end result that will advance our environmental aims. Whether it is advanced clean transportation or green building materials, these are the types of businesses we would like to have located in Los Angeles to create the supplier chains and ripple effects that will stimulate our economy.

In essence, we are here to make the pitch that Los Angeles should be your clean tech destination. We want to convene; we want to facilitate. We don't want to be an impediment; we don't want to be a barrier. We don't want to be your worst nightmare; we actually want to welcome you to the city of Los Angeles. I'm sure you never thought you would hear those words but we are here to say that we are your partner in trying to make Los Angeles the center for clean tech and transportation innovation.