February 2016

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Crisis of Conscience

SF Tech Contemplates its Relationship to Real World Industries
Therese Sullivan Therese Sullivan,
BuildingContext Ltd

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Crisis of Conscience

It seems the SF Tech community is having a crisis of conscience this week. Media site TechCrunch.com published a plea from Senior Editor Matt Burns for the Tech world to pay some attention to the crisis of contaminated water in Flint, Michigan:

“Let’s fix this. Let’s use the tools that allow us to deliver booze on demand and the tools that let us order a masseuse and the tools that let us get a box of fancy snacks delivered monthly to rebuild a great American city.

If the so-called smartest generation stopped trying to solve the problem of replacing their mothers with robots and fixed Flint and the countless other dying cities in America, they’d have statues erected in their name. They’d be modern philanthropists, modern heroes.  That sure is better than having 1,000 followers on Peach.”
Marc Andreesen, storied venture capitalist, immediately replied to Burns in this tweet-poem:
“Useless tech companies aren’t solving big problems!”  “Arrogant tech co’s should stay out of real world industries!”

I call it a tweet poem because Andreessen captures a rich haiku juxtaposition. He’s conflicted. Firms like his have unprecedented power in deciding where technology investment dollars go. But I don’t think they ever sought the level of responsibility that comes with that power or anticipated that problems like Flint would be laid at their feet.

Another expression of SF Tech’s Crisis of Conscience is this virtual discussion between O’Reilly Media’s Tim O’Reilly and startup-incubator Y Combinator’s Paul Graham on the relationship between technology and growing economic inequality in the U.S. O’Reilly explains that “financial markets have increasingly gone from being a source of capital for companies to a kind of giant betting pool, in which winning and losing is much less correlated with underlying economic activity.” This unmooring is what has left tech VCs with more responsibility for what is happening everywhere else than they’d like to own.

To remind us of the second half of Andreessen’s haiku, SF Tech VC Paul Holland was featured in an episode of a new Netflix comedy/documentary series this week, Chelsea Does Silicon Valley. Holland’s Foundation Capital is an investor in Netflix, and his cameo showed him and team reviewing a social dating app from the Hollywood personability. Netflix and dating seem a lot less like ‘important problems’ than what Holland was in the news for in 2009, eg supporting Presidential Remarks on Clean Energy. But, Netflix has been a much better dollar investment for Foundation Capital than its earlier bets on Clean Tech, and commercial building energy efficiency, particularly.

Does this proof case mean that nothing will come of SF Tech’s Crisis of Conscience? Looking at just the building energy efficiency big problem, ‘maybe not.’  I noted that the Silicon Valley Graduating classes working on the Buildings IoT that we met at CoRE Tech Silicon Valley in November were circa 15 to 35 years ago—Intel, Cisco, Google, Microsoft. Yet, as I wrote here and here, the social media storm created by this era’s graduating class — Facebook, Linkedin, Instagram, Twitter, Snapchat, Slack (an Andreessen Horiwitz investment), etc - may be the most disruptive to the status quo and the most transformative of all.

These social media/collaboration tools are key to 'Change Management.'  As defined at Core Tech, change management means getting the right messages at the right time to stakeholders up and down the design, construction, operations and maintenance chain – corporate real estate groups, facility management teams, IT departments, engineering firms, automation contractors, big equipment makers, sustainability, energy management professionals, etc. And don’t forget occupants! In a previous era, we would just call it  C O M M U N I C A T I O N. And I see the importance of "Change Management" everywhere:

This DOE showcase example has succeeded due in 9 parts to communication, 1 to part technology. I’m impressed with how this national real estate investor has reduced energy use across its 26M sqft of office space, while overcoming the challenges of split tenant/owner incentives, lack of tenant awareness, and limited tenant participation in building energy efficiency efforts. You’ll see social media at work in those best practice communication strategies.

Today, with the millennials comprising a big, influential part of the target audience, any communication has to leverage social media tech - and do it well. Once at a ‘big data and the energy industry’ conference, a speaker was actually presenting on the print flyer that was left on utility customer door knobs. The team did A/B testing on whether the flyer performed better with graphs or without, in green or in blue. ‘Small problem’ certainly. But, this was the big innovation! How you communicate with the target audience makes all the difference in driving technology adoption and behavioral change. (optimizely.com is another Andreessen Horowitz investment).

At least for commercial building energy efficiency, SF Tech’s focus on less than the big problems of real world industries might be an acceptable strategy afterall. The solutions and platforms that survive the test of the small and move up into the enterprise and industry might bring Andreessen’s haiku into harmony. Of course, the ‘Arrogant’ should still stay away.


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