The only constant is change

Many of us know Bob Dylan’s famous song: ‘The times, they are a-changin’. As was true when it was written in 1964, its title remains a matter of fact today. In our role as VCs, we thrive in a constant state of flux. We refer to change as opportunities and we’re always looking for the nascent solutions to growing problems which will manifest at scale in a few years’ time. With the companies that can anticipate change the best being the most likely to emerge on top.

To illustrate this ‘constant change’ phenomenon perfectly I wanted to share two examples during my 15+ years as a Partner at SET Ventures.

When we started in 2007...

...we were a cleantech venture firm focused on sustainable energy technologies (hence the source of our name ‘SET’). At that time, wind and solar generation solutions were labelled as ‘alternative energy’. Only dreamers or tree-huggers believed that renewable resources could one day surpass coal, gas or oil in affordability and deliver a significant portion of our power requirements.

Nevertheless, this change occurred through mass deployment of (initially subsidised) solar panels, larger wind turbines and more efficient batteries. Consequently, the cost prices of panels and turbines dramatically declined. Faster than even the most respected forecasters could predict, and suddenly the term ‘alternative energy’ disappeared.?

As the winds of change continue to blow, it appears only a matter of time before we refer to fossil fuels as the ‘alternative’ energy source. Quite a change in only 15 years.

Fast forward to 2014...

...and we’re finalising the raise of our second fund. One of the potential investors required a personal interview with all partners as their final due diligence item. A normal request and a chat I was more than happy to have. Soon two representatives showed up at our office in Amsterdam.

The opening question was a rather personal one: ‘René, can we ask how old you are?’ An easy one and nothing controversial, I thought. But my answer, ‘I’ve just turned 55.’caused both men to fall back in their chairs saying ‘we may have an issue’.

The problem turned out to be that they believed a middle-aged Managing Partner was probably not eager enough to sign up for another fund term of 10 years.

Now, almost ten years later, we are raising our fourth fund based on a great financial track record, we’re an active thought leader in in the energy transition and we have an excellent senior partnership team in place. We’re ready for that next 10 years.

And while I have decided to stay close as a Partner at SET, I’ll no longer be devoting the majority of my time to the new fund. The reason? I turn 65 this year, and the prospect of signing up for another 10-year fund term just isn’t necessary any more given the team we have built at SET. And frankly, it doesn’t fit with the way I want to balance my life going forward.

Sounds natural for an old guy, no?

But much to my surprise, I have to explain this position and battle scepticism repeatedly with investors. Despite the great team we have, investors want me to stay involved, even at 65.

A totally new perspective on age. Quite a change in less than 10 years.

So, what’s the takeaway? It’s that change is a constant and recalcitrant element of time. Just as we have seen in the energy transition over the last 15 years and will continue to see in the future. It’s time to let the team my co-founder, Wouter Jonk and I have painstakingly built over 15 years lead the way.

Dylan knew it, we all know it. The times, they are a-changin’.

Written by René Savelsberg , Co-founder and Managing Partner of SET Ventures in Amsterdam.?