Why Bloom Energy Is & Isn't the Google of Greentech
Katie Fehrenbacher - clean power
Kleiner Perkins Caufield Byers venture capitalist John Doerr, who led an investment in Bloom Energy and also in search engine giant Google, made the comparison as he took the stage during the launch event on the eBay campus. “This is like the Google IPO,” said Doerr. Presumably, he meant the excitement and anticipation in the room, but also the potential for the type of returns that Bloom could bring to Kleiner.
VC Returns
For Kleiner, of course, Bloom is ultimately about Google-style money-making. Bloom could be Kleiner’s first homerun in its cleantech portfolio — something it sorely needs after making dozens of investments and having little, to no, exits in the space. Doerr has previously said that the eight-year-old Bloom will take "nine years to a successful public offering,” so clearly an IPO is in the minds of the investors. At the Bloom launch event, when a reporter asked Doerr if “Bloom is the next Google,” Doerr replied “I hope so.”
Will Bloom’s investors be able to make the kind of money off of Bloom that they made off of Google? Bloom has clearly taken — and will continue to take — a lot more money than Google to reach scale. Doerr said last year that it took Google $25 million to get to an IPO, and it had already taken Bloom $250 million to get to where it was last November when Doerr made that statement (since then it has raised close to $400 million in total).
But the market for energy is ultimately bigger than the Internet — in the trillions rather than the billions as Doerr likes to say. That’s what Bloom’s investors are betting on. That they might have to put more in, wait a lot longer, and get a smaller slice, but that a smaller piece of a larger pie will be worth it. If there was a “Google of greentech,” equivalent, that’s probably what it would look like.
Industry Game Changer?
If Bloom is able to deliver on some of its claims — and cut its costs — it could possibly make the kind of change in the energy industry that Google has made on the web. Bloom founder KR Sridhar and General Colin Powell (Bloom board member) spoke at length at the launch event, about how they could see Bloom boxes powering homes and businesses throughout the developed and the developing world, from rural Africa to the rapidly growing middle class in China. Distributed power that is cheaper than the grid, and cheaper and easier than other renewables, could be a real game changer.
Like Google has been the platform for the basis of countless businesses and services, Bloom’s distributed power could also work as a platform (perhaps why they went with the Bloom Home Server reference) that could compliment solar systems, and electric vehicles. Business, or homes, that could use the boxes to generate power cheaper than can come off the grid could lead to the creation of new business models, where third parties buy and sell power.
Of course it’s totally unclear at this point if Bloom will even be able to deliver on some of those world domination promises. For example it will be really difficult for Bloom to get the price of the electricity from the Bloom box down, particularly to be competitive without the California and federal subsidies. NEA’s Scott Sandell, who backed Bloom, explained to us how Bloom intends to try to cut some of these costs.
Buzz Factor
To me, Bloom and Google clearly share one thing at this moment: cool factor and attention. Bloom, quite frankly, is the biggest thing to happen to the cleantech industry to date. Any media site that has any back archives of articles on Bloom knows how much mainstream attention Bloom is getting — we’ve had record page views this week. A coworker complained to me this morning that there’s no news, as Bloom has sucked all of the air out of the industry this week. At the Bloom launch event eBay CEO John Donahoe said: “This is a good day for Bloom, but also for cleantech.”
Bloom is even cool enough for Google to want to align itself with the fuel cell maker. Google was Bloom’s first customer and is using some of the Bloom boxes to power part of its campus. Google Co-founder Larry Page, who spoke on stage at the Bloom launch event, said: “Distributed power is a big deal. I'm a big supporter of this. I’d love to see us having an entire datacenter running on this some day.”
However, it’s unclear to me whether or not Bloom will be able to keep the type of attention going that Google has been able to maintain over the years. Bloom might be the cool kid this week, but that buzz will die down pretty fast unless Bloom is able to rapidly innovate, sign up new customers, and make high-profile moves. For a manufacturing company, that’s making power components and working on margins and cost cutting (like chip makers) that’s going to be really difficult. As Bloom founder KR Srindhar said at the Bloom launch event, “this is not software, it’s manufacturing, similar to building a car, and that takes time.”
Bloom’s device also won’t be consumer-facing any time soon, which handicaps it from all of the attention that consumer customers generate. While some publications have been concentrating heavily on Bloom offering a less than $3,000 Bloom Home Server to power residential homes, make no mistake such a power device is more than a decade away and still very much an “if.”
At the end of the day it will only be the months and years ahead that will be able to determine if Bloom will truly be as revolutionary as it’s claiming. And to be able to claim the title the Google of greentech — or to make the same kind of impact on the web, and generate the same kind of wealth that Google has delivered — are very large shoes to fill.
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