My founder journey: from Enterprise SaaS to Climate Tech ??

Part 1: Burning skies

One morning in 2020, I woke up to burnt orange skies over San Francisco.

Still half asleep and not fully processing what I was seeing, I shook awake my then-girlfriend: “baby, get up — the sky is on fire!”

Confused, she pushed herself out of bed, approached the window, and moved the curtains aside completely. “It looks like sunset. What time is it?”

It was 8am.

Overnight, fires raging across California had spread so much that by morning, the smoke had blanketed the skies, obscured the sun, and made it difficult to breathe. It was like Armageddon had come.

While fires were becoming increasingly common (and severe) for Californians, this particular one was special for those of us in the bay area — it burned right in our backyard and scorched our skies.

It was a wakeup call for many of us techies... But not for me.

At least not yet.

Meanwhile, in Enterprise SaaS?land

For my part, I was busy fighting different kinds of fires: working my ass off trying to get my enterprise software startup off the ground. I had spent five years putting every single ounce of my energy into it, laser-focused on making it work.

But it wasn’t working. Not really.

Even though we hired a great team, raised a bunch of money from top-tier investors, and got an exciting break signing one of the biggest companies in the world, we were still struggling to find real product-market fit.

Five years and a few pivots into the business, I was becoming increasingly disillusioned. Not only could I not see a path to VC returns, I couldn’t shake off a feeling that what I was effectively dedicating my life to didn’t truly matter.

Sure, we were inching closer to that coveted $1M ARR milestone, but there was no repeatability, and I couldn’t see how the company could become big enough to justify the investment. Not just of cash, but of my time as well.

After having some difficult conversations with my board, we agreed to wind down, and eventually sold the company, returning the bulk of the cash to investors and finding a soft landing for many of our employees.

A new beginning

Once the dust had settled, I found myself in the privileged position of being able to ask “what’s next?”

Whatever it was going to be, I realized, I wanted to work on something with real-world impact — something with an inherent and quantifiable mission.

It was then that I remembered the burning skies over San Francisco.

Doing a little digging, it turns out that 18 of the 20 worst fires in the history of California occurred in the last two decades alone.

The common thread: climate change.

So a few twists and turns aside, that’s what I decided that I was going to work on. But there was just one problem:

I had no idea where to start.

At a high level, I understood what caused climate change. But more practically, I didn't know the actual things that governments, companies, and individuals could do to help. More specifically, how could someone with my background help?

To try to wrap my head around it all, I read books, listened to podcasts, and even flew to COP26 in Scotland to speak with anyone who was willing to chat with me to try to get a sense of direction.

This process felt quite lonely. I was meeting plenty of people who were already working on very specific problems, but nearly nobody else in my shoes: a founder with background in enterprise software, looking to transition to climate: a big, daunting, and seemingly unrelated field.

Luckily, it turns out that I just wasn't quite looking in the right place. That all changed when a friend I met traveling pointed me to what was then a relatively nascent Slack group, and has since evolved into a full-fledged non-profit with a thriving community around it.

Community

In July of 2020, a Google Engineer by the name of Eugene Kirpichov, posted on LinkedIn that he was leaving Google to go tackle the climate crisis. His post went viral, and Eugene went on to found Work on Climate: a non-profit organization working to make climate work mainstream.

Eugene’s mission struck a chord with many people: at the time of writing, Work on Climate numbers some ~16,000 members(!) — and includes investors, advisors, industry experts, job seekers, and entrepreneurs — many of whom are just now moving into climate work.

Work on Climate, it turns out, shares its mission with many other organizations and communities: in Israel, where I now live, there is an increasing number of organizations focused on helping entrepreneurs start and grow companies in the climate space. They connect investors to founders, startups to customers, and more.

PLANETech, an organization created by Shani Zanescu and Uriel Klar only two years ago, partners with Microsoft (via ClimaTech) to “bring together developers, tech advocates, tech experts and entrepreneurs to learn together about the new emerging domain — Climate-tech.”

I just attended one of their events, and I cannot begin to describe the level of excitement and electricity in the air just being around this passionate group of people.

And there’s more — tailored communities like NSB (“No Silver Bullet”) created by Ram Amar, an experienced entrepreneur himself, are specifically catered to entrepreneurs working on new startups in the climate space in Israel (ping me if you’re a climate founder here and want an intro to the group).

“Mitaklemim”, a recent group that seeks to provide a Hebrew-speaking community where professionals from across the board band together to drive the ecosystem forward.

The common thread to all of those groups is people: passionate people dedicated to working together and helping each other tackle the climate crisis.

Perhaps unsurprisingly, many of them, like me, are entrepreneurs who are outsiders to the climate space. And more than a few are also newcomers from enterprise software. Which brings us to the second part of this post.

Part 2: How to transition from Enterprise SaaS into Climate Tech

I think one of the most daunting things, being an outsider to the climate space, is the sheer size of the problem and, consequently, the sheer amount of potential solutions one could, in theory, build.

I spent the last year and a bit researching the climate space broadly, and have started developing a high-level thesis on how to go from “everything is possible” to “this is what I should try to tackle.”

First, a disclaimer: I'm still developing these ideas out, so what I'll be providing is an incomplete and high-level framework. I plan on providing additional updates as I flesh this out further, but for the benefit of similar aspiring climate entrepreneurs, what follows is the v1 of my thought process breakdown.

But first, a primer: what is this "climate" thing all about?

At a super high level, it’s important to understand that “climate” is not just one field — it’s a bunch of different ones. It touches everything we do and how we live: grow food, make stuff, get rid of it, generate energy (and expend it), etc…

When people talk about climate solutions, there are two broad topics they refer to: mitigation and adaptation.

In layman's terms, mitigation deals with making climate change itself less severe, and adaptation deals with what humans need to change to live in an increasingly severe climate.

For the rest of the post, I'll focus on mitigation, as that's primarily what I've been researching.

For climate mitigation, there are, at a high-level, two jobs-to-be-done, and they both have to do with getting rid of CO2 (and equivalent damaging greenhouse gasses, referred to together as CO2e)

1. Stop adding more CO2e to the the atmosphere
2. Remove existing CO2e from the atmosphere

As a first step, to figure out what to focus on as an entrepreneur, my approach is to find an intersection point between impact, and what I’m personally good at so that I could add value. Put another way, I’m looking for founder-market fit, and taking a top-down approach to it.

Founder-Market Fit

On the market side, I’m seeking to whittle down potential problem spaces by answering these questions:

1. How do we stop adding CO2e (e.g. what are we doing today that needs to change?)
2. What adds the most CO2e? (of the above things, which is most damaging?)
3. What alternatives already exist that we just need to deploy faster / at greater scale?
4. Who is already deploying them? (see footnote i.)
5. What problems do they face? (in deploying these solutions faster)
6. What of those (acute, serious) problems can we solve with software? (see footnote ii.)

On the founder side, I’m seeking to whittle down all the possibilities to a smaller subset by answering these questions:

1. What am I good at?
2. What am I passionate about?
3. Who’s in my network (and could thereby give me an advantage tackling one solution over another)?
4. What available people and data do I have access to?
5. What (if anything) makes me uniquely good at solving a particular problem?
6. What does my gut tell me?

"But that's not enough"

My friend Matan Rudis (the CEO of Vert) had some important points to add once we spoke about the ideation framework above. I'd like to share them with you.

Here's what Matan had to say:

"Starting with founder-market fit is great, but that's not enough.

Two more things that are highly valuable for founders to pay attention to are the state of the market, and the state of VCs.

To find your path in climate, like any other domain, you'd have to deeply understand your specific market's dynamics to the level that you have a "market intuition." This is complicated and requires a lot of time, but it's critical.

It's not enough to have a thesis that some solution would be amazing, you should actually consider who'll pay for it, why, where they'd see the ROI from, etc.

I know so many climate startups with a weak business model, which leads me to the second point: VCs.

You may find it harder to raise capital for a climate startup than you would for, say, a cybersecurity company. That's because the climate space is relatively nascent, and the business models (and personas) are not as fleshed-out as they are in more established industries.

The primary consequence of this is that many VCs (especially ones without a primary climate emphasis) will demand more proof of you than in 'traditional' fields before they ever invest."

So I asked Matan: in light of this, what would be the most important action item that he would suggest to new climate entrepreneurs seeking to set themselves up for success? Matan's response:

"You have to be even more aggressive about proving out your business model than you would in other spaces.

Where possible, sign customers, or get written commitments. Don't spend so much time refining your investor pitch deck over talking to customers – it's less likely that VCs will fund you off of a deck than in other fields.

Spend the majority of your time talking to customers and doing the legwork to prove out the market as early as possible."

Bonus: a list of potential solutions

First, a warning. In my previous startup, we spent years working on a Solution In Search of a Problem. It's a way harder path than starting with a problem, and so I strongly advise that you take the time to deeply understand your chosen market and its needs before zeroing in on a solution to work on.

That said, you should absolutely read this recent post by Y Combinator titled “Request for Startups: Climate Tech”. In it, the YC team does a phenomenal job explaining different high-level problem spaces within climate, and then provides specific ideas for potential startups that they think are both necessary, and would like to fund.

It’s a useful read, and if anything, should give entrepreneurs new to the space a more specific idea of what startups are considered climate startups.

Closing words

I hope this post was useful for any other entrepreneurs looking to enter the climate space. Above all else, please know that while the problem is indeed daunting, there are many things that smart people like you can do to help. Please borrow (or steal) my methodology and alter it as you see fit.

I’ll continue posting learnings as I progress further in the ideation process, and would welcome your feedback and questions.

Feel free to reach out over LinkedIn — I’m really happy to talk to anyone doing work in this space, point to resources, and make relevant connections.

Thanks for reading.

Ever-updating list of climate communities I'm familiar with

* Work on Climate

* VOYAGERS

* PLANETech - Israel based

* NSB (No Silver Bullet) - Israel based

* Mitaklemim - Israel based

Footnotes

i. Starting with question #4, I can start doing customer discovery like I would for any other startup — and so can you. Presumably there’s a customer (let’s say a heat-pump or solar installer), they have a problem and it’s my job to discover it and help them solve it).

ii. My choice to tackle software (as evident in question #6) is pragmatic, and connects us to the “founder” side of “founder-market fit”.