Peet Denny On How Seed Investment Equips Start-Ups To Tackle The Global Climate Crisis
Peet Denny is a tech entrepreneur who has founded Best Boy Electric, Move Thirty-Seven and Brum.ai. He was CTO and CPO at Wealth Wizards, is a visiting fellow at Aston University’s School of Engineering and Applied Sciences.
In 2019, Peet Denny quit his successful career in tech startups to devote the rest of his life to fighting the climate emergency and has now founded Climate VC. Climate VC is funding 120 early-stage UK-based climate start-ups over three years to accelerate innovation with global impact to help save our planet and improve life for every person living on it. Their ultimate aim is that at least 10 will be full-scale successes, removing 10 megatonnes of CO2e a year each for a decade to achieve a gigatonne impact.
Peet discusses about HOW people with world changing ideas ARE creating huge impact on the climate emergency. HE ALSO EXPLAINS how to implement innovation in our own start-ups and why entrepreneurs must focus on impact first
Highlights from the interview (listen to the podcast for full details)
[Indio Myles] - Could you please share a bit about your background and what led to your work in sustainable business?
[Peet Denny] - First and foremost, I'm a technologist. I've been working with computers all my life. In fact, I started programming computers when I was 10 years old. My dad brought a ZX81 home, and I used to go to the shop to buy magazines full of programs you'd type into your computer and try to make things happen. I then got into tech-entrepreneurship, and started a web start-up during the dot com boom. Then, I worked for a lot for big American tech companies in microsystems and Oracle.
I've spent my career building very large systems, leading large teams, working in and founding start-ups that do interesting things with technology.
Later in life, I started to focus on artificial intelligence. I built a team most recently that created the world's first AI financial planners. It's an AI that can figure out the best thing for you to do next with your money. We did the first one of those in the pension space. Through my consulting, I discovered climate change. People have been talking about climate change for decades. It only really went through my ears and down into my heart maybe four years ago. That's when I decided to put everything else down and focus full time, the rest of my life, on fighting the climate emergency.
As a Founding Partner of Climate VC, can you tell us about the fund and how it is addressing the climate change crisis?
First of all, I wanted to try and figure out the best way that I can show up. Given who I am, my weaknesses, strengths, age, and background, what is the most impactful thing I can do? I looked at creating the start-up myself, tried a few experiments and looked at some crazy ideas. I asked, “can I build a rainforest in the desert?” I think I have to be a little bit of a megalomaniac to see if I can do something really major in the climate space! But it took me about six months to come up with this project. In the UK and I think in Europe in general, there's a really large groundswell of amazing people who've got world changing ideas that might fail. They're risky, but if they don't fail, if they get to where they want to get to, they could have a huge impact on the climate emergency. I thought, “this is where I can show up.” I understand how start-ups work up, I've been working in start-ups all my life, I understand how money works and I've been working in finance for a lot of my life. Maybe I can help fund these early-stage start-ups, because I felt that this was the missing piece. Wind power, solar power, electric vehicles, all of those things are very well understood, and therefore there's lots of money flowing into these areas. But if you look at the areas where they are going to be the most impactful things to address, like how we grow our food, move around, make things out of concrete and steel, those are the most impactful areas. There's not enough money flowing into those areas, and I thought that's what I can do.
Where do you see common shortfalls in entrepreneurs trying to seek impact investment and what advice would you give to entrepreneurs looking to scale?
One of the main shortfalls is people who are motivated to come and do impact often have very good ideas, but the idea is not enough.
Ideas don't change the world; actions change the world. What this means in this context is you need to create a business and become somebody who can run a business.
That means you need to be on top of your finances, you need to be able to create a business plan, wrangle with tech, understand how to do operations and be able to sell. Being able to sell is such a large part of what you need to be able to do as a founder, so that you can inspire and hire the best people. You can then sell to customers, raise money from investors. There are all of these ideas of being an entrepreneur where you need to come along and make your idea a reality. I think that's the bad news; a lot of founders tend to focus too much on the idea and not enough on getting it out there into the world by making it into a business. The good news is there are many people who are the best in the world at what they do, and they're inspired by this mission of fighting the climate emergency.
There are people of all walks of life waiting to be inspired to work on something like this. I suppose my advice would be to figure out how to bring people of different backgrounds together and make your idea into a business that turns money into impact.
How can individuals effectively contribute to catalysing change and addressing problems that matter to them most?
There are two things. One is if you look at how innovation happens. Innovation is not necessarily invention, it's not necessarily coming up with new ideas. It is making new things happen, maybe by taking existing inventions and deploying them in the new way. It’s making new change in the world. How does it happen? It happens through diversity of thought and experience. I studied innovation at Stanford, and they went deep into how to expose yourself to more diversity. If innovation happens at crossroads (i.e. where there are lots of different people passing by), how do you place yourself at those crossroads? Meet artists, accountants, lawyers, crypto bros and trying to listen to ideas from everywhere. In that big crowd of people with ideas, experiences, and backgrounds, there'll be a magic combination. Somebody will say, “these people are crazy, hardcore accountants, and all they think about is rigor and structure, and that doesn't appeal to me at all. But, my skills and their skills combined will create something magical.” Expose yourself to as much diversity you can. My second recommendation is so clichém and maybe all your guests say this, but be yourself. That's an uncomfortable thing for a lot of us to do, and that doesn't mean we can't grow. Try investing in yourselves to grow. Try to spend time discovering who you are and be more like that. It might make us feel childish, like we don't appear grown up or professional enough, but figuring out who we are and being more like that is really the magic we bring to the table.
It's the most energy efficient way of being as well, because it's so hard to pretend to be somebody else. Find what your magic is, find what the magic in other people is, and discover the combination that really works.
What barriers are obstructing entrepreneurs from committing to creating a positive environmental impact through their activities?
I think the biggest one is appetite for risk. Most people do not have the tolerance for risk to go and start a business, especially in the impact space. If you sit down and try to think about all the things that could go wrong, it's really scary. You won’t feel in any way qualified to do this. You'll feel like a complete fraud. You'll see all of the things that can go wrong and feel that you're not up to the task. Appetite for risk is probably the main thing that distinguishes effective entrepreneurs from everybody else. I'd recommend people try to reduce as much as they can the cost of failure. This is why things like universal basic income works well to promote entrepreneurship, because there is a flaw to how low you can go. Your business may completely fail, you may completely run out of money, but you're never going to lost a roof over your head. The cost of getting things wrong is reduced, which means you can take more risks. Risk is what we need to be able to do. It also means as you start your business you can be more on top of where your money is going. If you're frugal about what you're spending money on, how long your runway is, and how long you can afford to keep running this business plan, then it means you've got more liberty and freedom to act. Take more risk, the failures are never as bad as you think they're going to be. But the successes could be way bigger. Think big and lower the cost of failure. Also, if you're going to be an impact entrepreneur and try to create a positive change in the world, that should be the focus. We talk a lot about having an equal view or priority for both impact and financial return, or even a triple bottom line. I don't think you can optimise for three things. I think people who are much more clued into this believe that if you go for impact then impact will drive returns. If you create a huge change in the world like Tesla have spearheaded this move to make the transition to electric vehicles. If you're creating a huge impact in the world, you can't fail to be successful financially.
Go for impact first and be genuine about that. Make impact your number one thing, and if you can create that huge change, then financial success will follow.
What inspiring projects or initiatives have you come across recently which are creating a positive social change?
I come from a technology background, and I'm surprised at how much I like nature-based projects. I've been sitting in my bedroom my whole life programming computers with 15 screens around me. But I really like the stuff that uses nature and/or is inspired by nature to make a big change. For example, there's this one company called Phycobloom, and they are working on this idea that when you grow bacteria and algae, they produce things.
This special type of algae will produce an oil. If you can persuade the algae to release the oil into the water it lives in, you can then scoop the oil off the top of the bath and use it as aviation fuel.
They create the optimum, most beautiful living conditions for the algae. They're getting everything they want to eat, all of the boyfriends, girlfriends and discos algae enjoy! Then, all they do day and night is suck in carbon dioxide out of the atmosphere. What do they excrete? Oil you can use for aviation fuel. They've managed to create this method where they don't need to kill the algae in order to harvest the oil. If they manage to pull it off (and they might not because everything is risky), then there is a very clear route to being able to create carbon negative jet fuel. There is another company I love, and I'm a bit jealous of the fun that they get to have. They're a venture studio in Paris called Marble. They're not a fund in that they don't just invest in other people's ideas, they invite incredible people to come and work with them for a few months and create ideas they build businesses out of. They'll sit there editorialising and just imagining what the future could look like. And then, after a few months, they will hit on an idea, and build that. One of the ideas they've come up with and are quite far down the road in building is this idea of taking sea water and using it to hydrate deserts in a very low energy way? Through sucking sea water up and misting it over the deserts, all of the salt comes out quite quickly. You're therefore dispersing fresh water into desert regions to massively lower the temperature. After a while, things will start to grow.
To finish off, what books or resources would you recommend to our listeners?
I'm a climate guy, so all the things I think about day and night are climate related. There's a really good primer if people are new to this space and want to understand what the causes are and what are the understood areas of solutions. That resource is Bill Gates's book How To Avoid A Climate Disaster. Some people look at that recommendation and think, “hang on, Bill Gates is a technology guy, why would we listen to him?” But, he's just spent the past 10-20 years speaking to the world's best experts and writing down what they've said. That's a really good primer. More involved and more scientific than that book is the Drawdown Project, which is a classic. They keep updating it all the time, and there are a bunch of scientists from around the world who got together and said, what are the most impactful things we can do to fight the climate emergency? How much will the actions cost? How much CO2 will be removed from the atmosphere and how much money will be saved? Then, they rank them by order of effectiveness. In there, there'll be things you expect, like offshore wind turbines, but also things that maybe are less intuitive. For example, educating girls is the sixth most impactful thing you can do to fight the climate emergency. All of those causes are ranked, and it's available for free on their website. Finally, there's a really amazing course you can sign up to do called Terra.Do, which is a few months long and run out of Stanford University. If you want to spend some time with amazing people and learn the ins and outs of what we can do individually to help make a difference in climate, do the Terra.Do course.
