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Business incubators or “accelerators” have helped launch some of the leading companies of our time, from Airbnb to Dropbox. Unlike most startups, which face truly grim survival odds, ventures that participate in accelerator programs have between a 75% and 87% five-year survival rate. Accelerators can reduce the cost of launching a startup by as much as 50%. They also provide key mentoring help, business connections, and even future funding support.
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Elemental Excelerator is an accelerator in the non-profit sphere, that annually funds 15-20 companies hoping to “change the world one community at a time.” Their focus is on sustainable solutions and innovations for water management, agriculture, energy usage, waste, and transportation. I interviewed Dawn Lippert, Elemental’s CEO, about her experiences helping startups, what makes Elemental Excelerator different and her advice for companies looking to succeed in these sectors.
Harrison: Why did you decide to build this accelerator program, and what was involved in getting it to where it is today?
Lippert: Elemental sprang out of a convergence of events centered in Hawaii a decade ago. At the time, the state used imported oil for 90 percent of its energy needs, and average residential electric bills were around four times as high as those in the rest of the country. That situation was dirty and expensive, and ripe for change. So, in 2008, the state set a goal to move to 70% clean power by 2030 — a goal that has now been upped to 100% clean power by 2045. I was working at Booz Allen Hamilton in Washington, D.C., and came to Hawaii as a consultant to the Department of Energy, which was helping the state devise a long-term clean energy plan. We found that Hawaii needed new technologies to reach its renewable energy goals, so DOE provided some initial funding to support startups solving key challenges. Maurice Kaya, the former administrator of Hawaii’s Energy Office, was overseeing the program; he invited me to help run it. After learning and reiterating on that model, we developed Elemental Excelerator, which currently has over 20 partners from philanthropy, industry, and government. We’ve also scaled up about 300% from our original work.
Harrison: How is Elemental Excelerator’s model different than other accelerators?
Lippert: Our model differs in a couple of key ways. First, in addition to providing funding up to $1 million per company, access to high-powered customers and partners, and an incredibly talented group of peer CEOs, we also help design and deploy demonstration projects. We’ve found that there’s a critical gap in funding for startups that have great technologies but need early adopters. Our funding of up to $1 million helps buy down the cost of trying out a new technology or business model. It allows our entrepreneurs to partner with a new kind of customer, or deploy a proven technology in a new way. Then, we work with the startup and stakeholders — from municipalities and utilities to business owners and schools — to co-design and implement that innovation in partnership with the community.
Engaging local communities in the process of innovation and deployment is our second big differentiator. We employ a “place-based” model of innovation, which recognizes that each geographic area has a unique identity. They are made up of resources, needs, cultures, and people. We seek input on the challenges faced by local residents, businesses, and policymakers, and then work to find and implement innovative solutions. The American communities we focus on are in Hawaii and California, and we also deploy in Asia, particularly in Australia, New Zealand, Japan, Thailand, and South Korea.
Harrison: What’s working well for Elemental?
Lippert: Well, in the last five years, we’ve distributed about $30 million to 82 portfolio companies and deployed 56 demonstration projects. Our portfolio companies have gone on to raise more than $350 million in follow-on financing, and we’ve had six exits. The latest cohort of 20 companies includes entrepreneurs who are reinventing transportation. They include electric aviation company Ampaire, and electric mobility companies Proterra, Scoot, and Chargetrip, each of which is expanding into new customer segments and business models. We also have companies who are expanding access to clean, affordable drinking water: Microvi — which removes nitrates and other contamination in a low-cost, low-impact way — and Zero Mass Water — which builds solar panels that create drinking water. This year we also leaned into resource efficiency with companies like CarbonCure — which sequesters CO2 into concrete through a simple process that does not add cost — and Full Cycle Bioplastics and Biocellection, which are attacking the burgeoning plastic disposal problem.
We’re excited about our Equity & Access track, a new track we added this year. This track funds startups that increase access to innovation in low- to moderate-income communities in California. Of the more than 500 startups that have applied to our program this year, 42% applied for that track. That showed us that this market presents an attractive business opportunity, beyond social responsibility.
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Harrison: Do you have any parting advice for startups?
Lippert: When you work in tough industries like energy and water, it can be tempting to do anything to land that first big customer. But don’t give anything away for free; there is always something to negotiate. Make sure that you can share the results from pilot projects you do with partners: if you can’t publicize your successes, you’ll miss out on business opportunities going forward. Oh — and get in touch with us when our next round of applications opens in February 2019!
January 30, 2019 at 03:35PM
Forbes – Entrepreneurs