Hey Grovers,
Two things this week (1) are climatech accelerators dead and (2) can you clean up heavy industry without a green premium.
We ask:
Tristan Pollock built and sold two Silicon Valley startups, ran accelerator programs around the world for 500 Startups, and now runs Gener8tor's energy accelerator in Nevada.
Grant Budge spent 25 years in mining, steel, and carbon capture before co-founding PeroCycle, a two-person UK startup trying to decarbonize steel without asking anyone to pay a premium.
Let's dive in.
In this week's issue
- The case for accelerators
- Hope isn't a business model
- Skip the moonshot
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The case for accelerators
"Accelerators are dead" = mentorship is dead. So, if the question becomes "is mentorship dead", is your answer more clear? Mine is.
Tristan built and sold two startups in the Valley, then spent years launching accelerator programs everywhere from Saudi Arabia to Russia for 500 Startups.
Another thing is accelerator branding. Every city wanted its own Silicon Valley, but most of them ignored what they already had in favor of copying something that took the Valley decades to build.
Nevada is taking the opposite approach, building its accelerator around hard tech that fits what the state already has.
It’s home to the country's only active lithium mine, a massive industrial park (larger than the city of Detroit), and a growing network of former Tesla employees building the next generation of climate tech companies.
Permits can sign in weeks, there are zero corporate taxes, and a state-run VC will match an investor's check.
One company in his last cohort left the seven-week program with a $400K grant and access to a university wet lab, all thanks to the ecosystem Nevada had already built.
Based on my understanding of Tristan's experience, a common trend emerges. A lot of times we make judgements on a certain technology or business model based on the success of a team that just did not do that tech or model justice.
Few accelerators focus on being an accelerant for specific companies at specific stages in their journey, as Gener8tor is doing here in Nevada. To judge the role of 'the accelerator' in climatech, we must judge the ones doing the model justice.
In this case, 'the accelerator' is very much alive.
Hope isn't a business model
Conventional wisdom says cleaning up steel requires a 20–35% green premium or a high carbon price. Grant says no.
He came to PeroCycle after 25 years in mining, steel, and carbon capture, which means he's watched ~95% of the ways this kind of technology fails.
The one he warns about most is what he calls inventorship ~ founders who keep improving the technology while hoping the economics will eventually catch up.
But spoiler alert! Hope isn't a business model.
Here, every improvement to the catalyst had to also improve the economics or it went back to the drawing board.
The result is a reactor that captures COâ‚‚ and converts it back into carbon monoxide. Steel mills then replace fossil fuels with their own recycled emissions.
In 12 months, they went from needing a $50 to $70 per tonne carbon price to a negative cost of carbon abatement.
For steel mills, that means lower operating costs and a one-to-three-year payback instead of the five years most capital committees expect.
So regulation went from the business case to a growth driver. Exactly where it should be!!!
Producers selling into Europe now have an economic reason to adopt the tech. Big difference.
Skip the moonshot
Both founders arrived at the same answer from opposite directions.
Grant could aim his technology straight at a first-of-a-kind steel plant pulling millions of tonnes of CO2. To pull from Sergio's episode, that would put PeroCycle in a deeptech category with revenue expectations 5-10 years out.
Instead, their demonstrator unit already works economically on its own, so he can start in smaller industries like glass and nickel and bring in revenue years earlier.
Within two decades, the tech could keep up to 2.8 billion tonnes of CO₂ out of the atmosphere each year, roughly 8–9% of today's global emissions.
Tristan made the same call about Nevada. He loves a good moonshot, but their accelerator is pointed and specific. That's what will make them successful.
Neither Grant or Ttristan is playing small. Sometimes the shortest path to the big version can be one that works a little bit today, more tomorrow, and really well in the long term.
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With love, Blake
See you next week!
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