Q&A with ATI’s Mitch Jacobson
Want to know how ATI’s Clean Energy Incubator works? Here’s our Q&A with CEI Co-Director Mitch Jacobson.
A. I’m director of the Clean Energy Incubator at the University of Texas, part of the Austin Technology Incubator, and what we do on a daily basis is work with emerging technology companies who have an early stage technology that needs a business model around the technology. So what that means is we work with entrepreneurs who are trying to start a company around a technology that they believe, and that we believe, is a solution to a big problem in the universe – in our case, it’s around energy. It could be around efforts to use more renewable energy or to increase energy efficiency in transportation, waste, and water. We work with these entrepreneurs to pretty much make a company out of the technology and to figure out how to make money. Then we go out and raise capital around that team and that technology. That’s what we do from an incubator perspective.
From a community perspective, we do a lot of building of the cleantech community. A recent economic impact report shows that we have a $2.5-billion cleantech industry in central Texas, with 20,000 employees, growing at over 11 percent. That’s bigger than the biotech industry by double. (That won’t stay that way because of the Dell Medical Center.) But it’s a big industry. One of the things that we do is we have events with our sister organization, CleanTX, around the cleantech industry. A lot of that is about educating the community about what clean technology is, why it’s important, and why we should care. These events are workshops, networking events, panels, and presentations that help continue to build this $2.5-billion ecosystem. So it’s not just the Clean Energy Incubator at ATI, it’s also CleanTX, Austin Energy, the City of Austin, the University of Texas, a lot of the solar and wind companies in town – the combination of all these groups that have built this cleantech economy in Austin.
Q. What are some of your favorite ATI company success stories?
A. Ideal Power – which started out with two guys in a garage, a typical entrepreneurial story – that is now a publicly traded company on the NASDAQ stock exchange. ATI began to work with them in mid-2009. We helped them put this business model around their technology and hire talent, and we helped them raise over $3 million from different sources. Their technology initially was a new type of inverter to convert DC energy from the sun to AC energy in a building or a home. Every solar system has to have an inverter to do that. Their inverter was different in that it was one-tenth the size, one-tenth the weight, and one-half the cost of what was out on the market at the time. Which was significant. Now, they’ve turned that technology into doing that plus a lot of other things, including energy storage. Energy storage is a big deal. How do we store energy when the sun is not shining and the wind is not blowing? That’s a big success story.
Another ATI success story is a company called Ridescout, which is a transportation aggregation company. If you want to get from point A to point B and you don’t have a car, the Ridescout app will show you every transportation option that is available to you, how much it costs, where it picks up, where it drops you off, etc. It includes Uber, Lyft, Car2Go, bus, train, rental car, bicycle share – whatever might be in the area at the time. Ridescout was bought by Daimler Benz, the German car company. So that’s a big success story. They came into the incubator around 2013 and were here for about a year.
Q. When and how does ATI graduate companies it incubates?
A. ATI graduates energy companies – not necessarily when a big success story like a buyout happens, although that could be the reason – usually when we’ve worked with them for about two years. (ATI graduates pharma or biosciences companies after about three years. For software companies, it’s usually about a year.) Companies graduate when: we’ve raised money to a Series A fundraising; they’ve built a team; they’ve got a board of advisors and a board of directors; there’s actually a business model around the technology; and, in fact, they’re probably starting to commercialize the product itself – meaning they actually have revenue coming in the door.
Q. How does the ATI team select the companies it accepts into ATI?
A. We’re very experienced at doing this. I think the things that we look for are no different than what a venture capital organization would look for in terms of investing their own dollars. The biggest difference I think of us versus other incubators and accelerators is that we are looking for big solutions around big problems. (We’re not looking for the next product.) We’re looking to solve big problems with big solutions around infrastructure and health. So the problems of the masses of clean water, of low-cost energy and energy efficiency, transportation, waste, health and pharma – these are all big issues and problems that our world faces. We’re not going to solve all of those problems. It’s not just technology that solves problems – there’s regulation and policies – but our impact is from a technology perspective. We work with entrepreneurs who are coming up with technologies that solve these problems. We look at it from a business perspective: It could be the greatest product in the world that helps lots of people, but if you can’t make money, then that product will never get to the marketplace. So you’ve got to look at it with business acumen.
Q. What is your background, and why do you love the clean energy space?
A. I’ve been in the technology space for a long time. I grew up in the computer world back in the early ’80s when PCs were almost the size of this desk, as heavy as this desk, and I saw the revolution of the personal computer into these laptops and these tiny little computers (smart phones). I left the computer business and started my own angel company, Eyes of Texas Partners. I was investing in early stage companies like we have here at ATI. In fact, I invested in two ATI companies a long time ago. So I knew of ATI, and when I was ready to go to the next step in my career, I met with (ATI director) Isaac Barchas. The idea was for me to meet a lot of these ATI companies and see if they needed my skill set. And I did do that. Isaac and I came to the conclusion that the better spot for me was running the Clean Energy Incubator here at ATI … (CEI Co-Director and UT professor Dr.) Michael Webber and I had lunch one day. Michael has a background in energy and water from an academic perspective, and also from a technology perspective, because he has started a couple companies. We decided that I would run the business side of things, and Michael would handle the energy technology aspect. The environment has become a personal passion. The beauty is that the Clean Energy Incubator has brought together my technology background with something I am very passionate about.