Venture-Capital Firm Puts Faith in Clean Technology

ANDREA SEABROOK, host:

Google, Amazon, Netscape. These names are probably familiar to you, thanks in part to Kleiner, Perkins, Caufield and Byers - KPCB. It's a venture capital firm based in Silicon Valley. They started investing in tech start-ups before tech start-ups were cool. See, venture capital firms make or lose millions or billions of dollars by investing in high risk, emerging companies. And in a way, they're the crystal ball of business. Well, KPCB is now focused on green energy. The venture capital's firm John Doerr is here to help us look into that crystal ball.

Hello, Mr. Doerr.

Mr. JOHN DOERR (Partner, Kleiner, Perkins, Caufield and Byers): Hello.

SEABROOK: Why is this a good investment right now?

Mr. DOERR: Let's pick bio-fuels, as an example. In order to make bio-fuels work for all Americans, we need to have vehicles that will use them, so-called flex fuel vehicles. There's four million in the United States, but that's not nearly enough. We need distribution for bio-fuels. We need it to be available at, you know, say, 10 percent of the filling stations, the gas stations. And then, finally, we need more investment, the building of more plants.

And for those investments to be made, the investors, the markets, need some level of certainty. They need to know that the Middle Eastern oil interests are not going to crash the price of oil in order to temporarily destroy those investments. If we have all of those, we would shift to bio-fuels the way Brazil has. Brazil, in just four years, went to over 80 percent of their vehicles being flex fuel capable. And Brazil today is energy secure. It's not dependent on foreign sources for its oil.

SEABROOK: Not all green energy sources are cheaper than oil right now. Are you investing in those too, or really just the bio-fuel, ethanol market?

Mr. DOERR: We're investing across the board. Energy, for example, for transportation, the needs for those is different than the energy needed to power our homes. Solar energies today, photovoltaic, are more expensive than electricity from the grid, but they're improving every year. And you have to shoot ahead of the duck. So if we're investing ahead of the time, then those will be massively economic.

SEABROOK: Well, it also sounds like what is making this a good time rather than decades past, to look at renewable energy as a profitable - as you said, massively economic market, is technology change. It sounds like we're just able to do things that we couldn't do before. Is that right?

Mr. DOERR: Oh, you're absolutely right. And so in addition to the price at the pump, there are two technology changes that are causing this field to be attractive. Nanotechnologies. Those are advances in the very small. Engineering an organism, for example, to ingest sugar and then secrete a more advanced bio-fuel. So that's one.

But the other one that's often missed is the relentless doubling of computing power every two years. Now the scientists who are trying to bring us green technologies can literally design the innovations, instead of stumbling around to discover them. And that's because they have better, sharper edged tools in the form of massively more computing power.

SEABROOK: If oil prices go down, as they have done already, will venture-capitalists like your firm lose interest in the market?

Mr. DOERR: Oil today is sixty-two dollars a barrel, that's about $3 a gallon. All the investments we're making make enormous sense should oil prices go to $40 a barrel; think $2 a gallon. And there's one other attraction: Whether gas is $2 a gallon or $3 a gallon, today's energy sources are not green. And as investors, we believe we've got a climate change, even climate crisis on our hands, and there'll be both policies as well as economic and moral incentives for us to drastically reduce our greenhouse gas emission.

SEABROOK: Mr. Doerr, you mentioned to me before we got started that your teenage daughter is one of the reasons why you're doing what you're doing. Tell me about that?

Mr. DOERR: Last summer, we had dinner with some friends, and the topic was green - global warming. We went around the table and everyone offered their view and definition until we came to my 15-year-old daughter, and she said, Dad, I agree with everything that's been said about global warming, but I want you to know that I'm scared and angry. Your generation created this problem and you'd better fix it.

SEABROOK: John Doerr is a partner at the Silicon Valley based venture capital firm, Kleiner, Perkins, Caufield and Byers.

Thank you, Mr. Doerr.

Mr. DOERR: Thank you. Transcript provided by NPR, Copyright NPR.