In this week’s installment of Elevator Pitch, we meet a rather unconventional gent. Nat Goldhaber studied transcendental meditation under Maharishi Mahesh Yogi (guru to the Beatles); played a key role in the Three Mile Island nuclear meltdown; and was the 2000 Reform Party nominee for vice-president of the United States. (For a while, anyway.)
But Goldhaber also boasts serious tech chops. The Three Mile Island event — at which Goldhaber had a front-row seat as the top energy advisor to Pennsylvania’s governor — shaped his future views on energy investment. He left politics to launch his first startup, and today, he’s the cleantech guru at Claremont Creek Ventures. The firm’s based in downtown Oakland, which is not exactly a venture capital hotbed. Like I said, unconventional.
Q: HOW’D YOU GET INTO THIS RACKET?
A: In 1984, I started a company that became known as TOPS. We developed the first truly interoperable networking system, tying together Macs, PCs and Unix-based computers and allowing the free exchange of files and data. The company was purchased by Sun Microsystems in 1987, during Sun’s most exciting period of growth.
I’d served Sun as a vice president for a year when the venture firm that had funded TOPS offered me a position as partner. The new fund was called Cole Gilburne Goldhaber and Ariyoshi. Although I later started two additional companies (the Apple-IBM joint venture called Kaleida and Cybergold, which I took public in 1999), the joy of being an early stage VC remained with me.
Q: WHAT DO YOU LIKE ABOUT VENTURE CAPITAL?
A: I love being a VC. I am consistently reminded of the extraordinary times we live in and the greatness of our economic system. I’m exposed to brilliant entrepreneurs with world-changing ideas.
Claremont Creek Ventures generally invests in start-ups very early in their evolution. This offers me an opportunity to materially assist entrepreneurs in refining a business plan, growing a team and executing to profitability. Being a VC allows me to leverage the skills I learned a start-up entrepreneur and use them to help new entrepreneurs create great companies.
Q: WHAT KINDS OF PITCHES ARE YOU LOOKING FOR NOW?
A: In the end analysis, I look for pitches from entrepreneurs most likely to succeed. I look for sound, defensible plans with demonstrable markets.
But what I like best are those ideas that are really revolutionary; those ideas that when I first hear them I say, “Really?” or “That’s impossible.” Then, through the persuasiveness of the great entrepreneur, incredulity melts away and I become a passionate believer.
Claremont Creek looks for such plans and entrepreneurs from the fields of digital energy (IT applied to energy efficiency and generation) and digital healthcare (IT applied to better, cheaper, faster diagnostics and improved healthcare outcomes).
Q: WHAT’S THE BIGGEST MISTAKE ENTREPRENEURS MAKE?
A: There are three big mistakes common to most first-time, early stage entrepreneurs.
First, new CEOs chronically underestimate the costs, complexity and time required to develop their product or service. Second, many new CEOs incorrectly believe that the founding team has all or most of the skill sets necessary to propel their company to success. Finally, many early stage teams believe, “If we build it, they will come.” The expense and skills of marketing and sales are overlooked.
Q: WHAT’S THE NEXT BIG THING GOING TO BE?
A: Almost for sure, digital personalized medicine will be the revolution of the next decade or two. Yes, there will be plenty of interesting developments in IT and in mobility, but even there the most interesting manifestations of that development will be in personalized medicine.
Q: YOU SPECIALIZE IN CLEANTECH. WHAT’S IT GOING TO TAKE FOR THAT SECTOR TO REGAIN FAVOR WITH INVESTORS? THE NEEDS SEEM SO OBVIOUS, BUT THE REGULATORY, INFRASTRUCTURE AND POLITICAL HURDLES ARE STEEP.
A: I look for the sweet spots in IT applied to energy, where capital efficient investments can make a big difference. The great thing about IT is that it’s scalable. Once an IT product is completed, it can be very broadly applied with comparatively modest additional investment.
Energy savings is both a moral imperative and a money maker. So companies that use IT to provide energy efficiency and savings tend to be capital-efficient investments and have natural markets. Government subsidy and regulatory mandates can be big accelerators for our companies, but in no case is government behavior required for success.
Q: CLAREMONT CREEK’S BASED IN OAKLAND. DOES THE EAST BAY GET OVERLOOKED WHEN IT COMES TO TECH — AND DOES THAT CREATE OPPORTUNITIES FOR YOUR FIRM?
A: We chose the East Bay as an ideal location for Claremont Creek because of proximity to UC Berkeley and the Lawrence Berkeley Labs. When compared to the area around Stanford, Oakland (and the rest of the East Bay) are completely under-served by venture capital. Entrepreneurs are often hard put to find capital – except from Claremont Creek.