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[[Beth Comstock, Senior VP & Chief Marketing Officer, GE]]
[Good morning. Thanks for joining us. ]
[We're very excited to have you here. ]
[Here we are in the Bay area, the hub of innovation and technology, ]
[and that's what we want to talk about today--innovation ]
[and technology around the clean energy space. ]
[The question for us today is how do we do more of it?]
[ that we can scale, that we can implement pretty quickly?]
[Today we want to spur a dialog around]
[The idea today is how do we take new emerging technologies]
[out of that lab, put them on the road, on the rooftops, ]
[We're here today to talk about taking action. ]
[At GE, we love taking action. ]
[[It's time to spark a revolution] Over the past 5 years with ecomagination, we've been able]
[to team very closely with our customers, ]
[and together we've been able to co-invest and]
[co-develop new emerging green technologies. ]
[We've made ecomagination a rallying cry for us.]
[We've been able to see through ecomagination that it's ]
[good for business, it's good for GE,]
[and it's good for the environment, and I think one of the things we've learned over the past]
[few years is that those benefits aren't mutually exclusive. ]
[So we're now entering what we call a new phase of ecomagination.]
[What's up for our next five years. ]
[You're going to hear today that we're talking a lot about doubling down]
[on our commitments and opening up to new ideas. ]
[We believe that the challenge now is to accelerate.]
[How do we move faster in all that needs to happen in clean technology?]
[There was a downward trend in clean]
[tech investing and venture capital from 2008-2009.]
[Not surprising, given the economy, but it's good to hear]
[that the sectors bounced back to sort of record]
[investment numbers in the first quarter of this year.]
[But I don't think anyone would say that that's enough. ]
[The challenge is how do we do more?]
[How do we use government--the stimulus money]
[on clean technology has only gone so far.]
[So today we've put together all of you, this sort of room of ]
[brilliant people, brilliant innovators, ]
[problem solvers, visionary investors, ]
[because we want to make clean tech our reality. ]
[We've got the ideas, now we just have to work together to]
[kind of collectively put our imaginations to work. ]
[So that's why we're making this announcement today. ]
[We're going to talk about how GE's opening up ourselves]
[with our money, our expertise, our channels, ]
[and to do that I'm happy to introduce]
[GE's chairman and CEO Jeff Immelt. ]
[He'll give you details on our announcement today. [applause]]
[Good morning, it's great to be here. ]
[[Jeff Immelt, Chairman & CEO, GE] I think it's best said we want to reiterate]
[our commitment to ecomagination.]
[We think it's a great time to be talking about energy security]
[and the reduction of pollution and job creation and growth.]
[[Now is the best time for ecomagination]]
[That's what we--when we talk about ecomagination, that's really what we mean. ]
[So this is something that we've been working on a long time,]
[and I thought today would be a good time to just talk about]
[where we want to go next, who some of our partners are, and some of the]
[ways that we're going to continue to expand this initiative in GE. ]
[In our company, everything's about metrics. ]
[When we launched in 2005 we basically said ]
[we were going to have four goals. ]
[We were going to double our R & D, we were going to work with our customers to grow our]
[revenue, we were going to reduce our own greenhouse gas emissions as a company, ]
[and we were going to be transparent. ]
[We were going to get involved in the public debate about]
[energy, affordability, and security. ]
[Over the last 5 years, we've really done what we've said we were going to do. ]
[We've doubled our R & D, we spent about 5 billion dollars on ]
[clean tech products over that time period, we generated 70 billion dollars of revenue.]
[We basically grew from 5 billion dollars in revenue]
[in 2005 to 20 billion dollars ]
[of revenue this year, so green is green. ]
[We improved our own plants. ]
[We installed technology in our own plants. ]
[We reduced our own carbon footprint by 22 percent. ]
[We saved money while we were doing it. ]
[We saved 130 million bucks. ]
[So we kind of think this is a good idea.]
[This is something that's about commerce, it's about profit,]
[our clean-tech business within GE, we're all about scale. ]
[Our business would be a Fortune 130 company]
[just in clean technologies, so this is quite a substantial]
[endeavor and something that we've ]
[really been able to lead in. ]
[It's also benefited our customers in very practical ways. ]
[Utility customers, airline customers, rail customers, ]
[kind of the heartbeat of the global economy, ]
[the American economy, we've helped make them more efficient]
[Our aviation products have helped fuel burn.]
[Products like our G90 are being followed by products like the GEnx]
[engine on the Boeing 787, which will ]
[improve fuel burn or be part of a system]
[that improves fuel burn by 20 percent--I mean--substantial. ]
[It's helped our locomotive customers with the Evo locomotive]
[and some of the productivity devices we've used. ]
[This is about real commerce, real technology, ]
[When the GE team got started on this we were ]
[kind of neophytes, I would say, in terms of ]
[what it meant to launch an initiative in clean energy.]
[the first 12 years of my career running a plastics business,]
[not exactly on the side of environmentalists all the time,]
[I kind of studied this more as a business proposition.]
[I'd say I've learned a lot, and the company has learned a lot over the last 5 years. ]
[When we started the belief was this was too precious,]
[I think what we've learned is that, really, when you apply technology and commercialization,]
[I would say, if we had it all to do over again, we wouldn't use the word green so much,]
[just because it gets cast the wrong way, frequently. ]
[I think what we learned is it's about industrialization. ]
[And this is not a precious initiative. ]
[This is a broad-based, industrial initiative. ]
[The customers might hate it;]
[we think customers like saving money. ]
[They want suppliers that help push them along those lines that was action only by the elite. ]
[But I've got to tell you, there's GE hourly workers]
[whose jobs have been created,]
[who make good wages, who deliver exports]
[and because of the things we've done. ]
[So this is real people doing real innovation and making progress. ]
[When we started we were kind of--]
[went it alone, but what we've learned is that we need customer partners, we need]
[It helps when the government is aligned, when public policy is aligned. ]
[This is about an ecosystem. ]
[So, look, I've learned a lot in this. ]
[There's some things I'd probably do differently if I started over again today,]
[but I'm as excited about what clean energy can do]
[for our company, for this country,]
[and the global economy--I'm more excited today, having ]
[been through this experience than I was 5 years ago.]
[Now, going forward is best said. ]
[We're going to basically continue to double down on technology. ]
[At GE this year we'll spend about five percent of our industrial]
[That will probably go to 6 percent in the future. ]
[We're quite invested in technology.]
[We think these clean-tech products will grow at twice]
[We're going to reduce our own carbon]
[We're going to reduce our water usage by 25 percent. ]
[So, again, we are making substantial, focused]
[improvements over the next 5 years, ]
[and, again, be part of the debate]
[on why this is good for the broad economy, why it ]
[creates jobs, and why we think it's an important initiative. ]
[We'll have another 30 products.]
[We've launched 92 ecomagination products.]
[We'll probably have another 30 products in the next 24 months.]
[We're just quite committed to continue]
[to drive it in water and conservation, our service business,]
[and continue to drive this on an ongoing basis. ]
[If you walk around the product displays you're going to see]
[across the breadth of GE, and it's one of the things ]
[You're going to see lots of energy technology from offshore wind to biofuels]
[In transportation you're going to see the most advanced]
[aircraft engine design, what we call the movement planner, which helps make our ]
[locomotive customers more productive.]
[In fuel and carbon services you're going to see a Monogram ]
[refrigerator that has, really, zero carbon footprint]
[because of the foaming agents it uses]
[and the electricity that it uses. ]
[We've got a team from our commercial real estate business here]
[that can talk about how we can make our sites more energy efficient]
[and thereby improving the value of their commercial real estate. ]
[Water is going to be very aggressive. ]
[Pro Pack is really something that can be used in a big utility or steel plant]
[to have zero water discharge,]
[really do a great job of recycling, and ]
[water regeneration, so I'm quite excited about the technology. ]
[Then some of the futures, from solar, ]
[a new diesel engine that's much]
[One of our partners in Southwest Wind, ]
[which does a residential consumer wind technology,]
[transportation more on batteries, so quite exciting. ]
[More in homes on smart appliances]
[and what we call kind of sheet]
[And then water reuse for areas like]
[shell gas and tar sands and things like that. ]
[So you're going to see lots of new technology]
[that we think is going to increase our growth and profitability]
[and satisfy our customers at the same time. ]
[And again, that's really what this initiative in the GE context is all about. ]
[So we've got a couple of announcements today that we want to make.]
[[Announcing...WattStation] The first one is this product right here]
[We're very much believers in the electric vehicle, ]
[and we think that the infrastructure around the electric vehicle is going to be quite important. ]
[This is a great design product.]
[It's going to be commercially available by the end of this year.]
[We think that this is a billion and a half dollar market over the next--]
[probably by 2013, so we think it's going to be quite]
[important for the infrastructure of the electric vehicle. ]
[I started my career in sales, so--every good salesman]
[loves to touch the product and see how it works. ]
[This is the electric vehicle charger.]
[Again, as I said, we're quite excited about what it can mean]
[That's one that we're announcing today. ]
[At the same time, we've got a product called Nucleus. ]
[This is called the WattStation.]
[If you look at GE appliances and lighting, we utilize--about ]
[50 percent of the electricity in the home comes out of GE products--]
[appliances, lighting, water heaters.]
[This product, Nucleus, is something that]
[is kind of a communications device that ]
[you can just plug in inside your home and as you have]
[digital appliances, smart appliances, and a smart water heater, ]
[you're going to be able to track electricity uses on your laptop.]
[All the research says that if a consumer can ]
[see their electricity uses they can cut it by about]
[10 percent, and this is going to be a very inexpensive]
[GE-designed device, which we think will be kind of ]
[another little appliance, if you will, in the home. ]
[This will come out of our consumer business. ]
[It's very much aligned with our ecomagination efforts, as well. ]
[is really the thrust of why we're here today and]
[what I would call a digital energy.]
[anytime you're talking about a big initiative like this. ]
[When you use a word like smart grid people ]
[think it's, again, an elite term,]
[we've started calling it digital energy because everybody's]
[seen over the last 20 years the impact that digitization has had]
[in every corner of our life. ]
[It's easy to make the leap into the fact that digitization is going to]
[completely transform the way electricity is really]
[created, connected, and used]
[So we think about digital energy, about how you create power, ]
[how you can get more out of the assets, ]
[how a utility customer can get more out of the assets that they have, ]
[and use a broader variety of technologies]
[with respect to what they have, ]
[how you connect power, how you can make the grid work more efficiently--]
[the losses on the electricity grid]
[not just in the U.S., but particularly outside the United States-- ]
[and how power's used by empowering consumers, by empowering]
[utilities, to be more effective. ]
[So we really believe that this digital energy space]
[is going to move fast and big ]
[It also lays the groundwork for everything else that needs to be ]
[from nuclear power to renewables to more efficiency, ]
[so this, really, we think is the key to the future. ]
[It's probably a 15-20 billion dollar market today.]
[It's close to 2 billion dollars for GE.]
[In some way, shape, or form this market is probably going to grow]
[by tenfold in the next 2 decades. ]
[So this is probably one of those markets that you want to invest in.]
[As you look out into the future, there's just not that many]
[that offer this kind of promise and this kind of growth.]
[I'll show you just some of the variety--]
[data collection, there's things like smart meters. ]
[Local intelligence allows both consumers and utilities to be smarter. ]
[Enterprise integration allows you to more effectively connect]
[Automating the grid allows our customers to be]
[smarter about the way power is used. ]
[You look down there and the penetrations are all less than 5 percent. ]
[Even by 2015 the penetrations are all going to be less the 20 or 25 percent.]
[So this market is in the early stages. ]
[It is a great place to invest. ]
[GE is committed to be one of the leaders in that space.]
[We're one of the leaders today, and we're committed to stay one of the leaders over time. ]
[The thing about digital energy,]
[smart grid, is that it's massive]
[and that our customers want to see us offer]
[So if you look at what I have up here as core, in some way, shape, or form, ]
[GE is either inventing or developing ]
[everything up there that's core.]
[I would say, today, GE probably can provide 50 or 60 percent]
[of what a customer might require to do a digital energy project. ]
[But our customers want more solutions.]
[There's incredible innovation that's going on in the venture community, ]
[and the only way we can offer a complete package,]
[or the only way we can try growth, is by partnering]
[with the venture community on these emerging technologies. ]
[So when I look at a market like this, ]
[I think about speed and I think about solutions--]
[Speed to market is going to mean that we have to ]
[continue investing a lot of ourselves, but we need to partner. ]
[And solutions means really driving commonality in ]
[technology so that our big utility customers, ]
[or our big industrial customers, can buy from one person. ]
[to be a good aggregator, a good convener, ]
[both for the innovators out there, and also for our customers. ]
[So that's how we think about the set-up. ]
[So the third announcement we have today is this 200 million]
[[$200 million To improve the way we create, connect, use, power] We're partnering with ]
[four of the biggest venture capital firms in the ]
[Three in the U.S. and one in Europe. ]
[Again, we think that the combination of GE investment and venture]
[capital investment is going to allow us to ]
[It's going to allow us to accelerate new ideas.]
[It puts us shoulder-to-shoulder with some of the smartest tech investors.]
[And we can use what I call the industrial clout of GE]
[to bring technologies to this marketplace faster. ]
[The way the process is going to work,]
[and Chris and others can talk more about it, ]
[but we're going to, in a very defined time period, we're going to open it up for]
[We're going to allow people to do it online. ]
[Grants can come in the form of $100,000-type ]
[grants to help take small ideas and ]
[commercialize them all the way to big equity investments]
[with our partners or on GE's behalf. ]
[So this is going to take lots of different forms as we ]
[roll it out over the next few months, ]
[but we think this is just going to open up investing in]
[clean technology, particularly around digital energy and the smart grid. ]
[It puts GE, I think, right where we want to be]
[in a leadership space with a lot of ]
[partners, and the commitment we're making is just that]
[we're going to be able to use our manufacturing capability,]
[our sales, the brand, the power of our]
[customer trust, reliability.]
[We're going to be able to move this quickly, and we're]
[going to be able to make things have scale.]
[So that's what the challenge is all about. ]
[Again, like I said, we're partnering with some of the best. ]
[We've seen tremendous growth in clean energy]
[We believe it's really an important part of our brand. ]
[It's an important part of how we grow in the future, and we plan to keep]
[investing along those lines. ]
[It really is about growth and competitiveness,]
[and you can have a competitive ]
[industrial base and you can grow while reducing ]
[So it's not that these things are inconsistent. ]
[We've always believed that they are consistent.]
[It's a place that ultimately big and small companies need to play together. ]
[I've spent a lot of my career working with venture capitalists. ]
[The big waves in the innovation community in this town--]
[I don't need to tell people in this room--]
[have been, really, information technology, first.]
[Healthcare--lots of innovations have come from the]
[venture community of Silicon Valley in healthcare. ]
[Energy is a little bit different because it's the combination]
[taken down the learning curve quickly--]
[In GE, we've got lots of great researchers who]
[can come up with great ideas, but we're not going to invent every great idea. ]
[But there's nobody that does commercialization better than we do. ]
[There's nobody that does scale-based innovation better than GE. ]
[And so we think this gives us a very good]
[Positive clarity would help.]
[I've worked with John Doerr and Bill Gates and others--]
[U.S. Climate Action Partner and others -- to try to get]
[more clarity around policy for clean energy future in the U.S.,]
[but we're going to go forward regardless. ]
[Again, I think the opportunities are out there.]
[We're going to move decisively and quickly to]
[make this reality for us in the future. ]
[So that's just a little bit about why we're here today. ]
[And I'm going to ask Beth to come back up.]
[We've got a great panel, but I appreciate you being here and I think]
[it's an exciting set of announcements for GE. Beth? ]
[[Beth] Thanks, Jeff. [applause]]
[So now we're going to move to our first panel discussion.]
[First up, our moderator, Chris Anderson of Wired. ]
[Chris has been just a fantastic collaborator as we've put this ]
[ecomagination challenge together.]
[Then I want to introduce behind him, our various VC partners. ]
[Paul Koontz, general partner from Foundation Capital;]
[Ray Lane, managing partner from Kleiner, Perkins, Caulfield, and Byers;]
[Chuck McDermott, general partner Rockport Capital;]
[and also Mark Little, who is ]
[GE's Senior Vice President and director]
[of GE's Global Research around the globe; ]
[and Yves Behar, who is the founder and designer behind fuseproject. ]
[I think that's it not a coincidence that we're here]
[When GE asked me to participate and help them ]
[think through how this challenge will work about 6 months ago, ]
[the analogy that came to my mind was the internet in 1980. ]
[[Chris Anderson, Editor in Chief, Wired Magazine]]
[That, too, was a moment where the infrastructure of ]
[the new market was being laid and we actually weren't quite clear]
[what the market was and where the direction was going. ]
[Telecommunications in those days was also a kind of ]
[It wasn't clear that if you weren't AT&T, or the equivalent, that you could participate. ]
[this kind of this kind of peer-to-peer, end-to-end ]
[was quickly recognized as and opportunity for a new kind of innovation,]
[a new kind of company, and new kind of applications. ]
[Suddenly the pool of participants grew hugely, ]
[and the story of the last 20 years has been ]
[exploring what those opportunities are. ]
[What drew me to this was the sense that this was an analogous moment--]
[that the grid, a utility-scale, kind of one-way]
[infrastructure, not an economic opportunity]
[for most entrepreneurs simply because they don't know how to interface it, ]
[was being opened for all the reasons]
[that Jeff articulated--the notion of demand management, ]
[distribution, the idea that if you loop entrepreneurs and consumers]
[about how you use energy and when and where--that we will discover new applications. ]
[Much as the technologists discovered]
[the web, created HTML, but we]
[figured out how to fill it, I think there's this opportunity ]
[to use the grid and it's entrepreneurial and it's individual. ]
[analogy is apt because the innovation model]
[that Silicon Valley represents ]
[is an opportunity to open up to a new class of innovators.]
[In a sense, what drew me to this]
[was the idea that by catalyzing the opportunity--]
[here are the standards, here's the magnitude--]
[people to think about this and about surface ideas ]
[that aren't already being surfaced.]
[I guess the first question is really about the mechanism]
[I want to address a few to Jeff and then turn to the rest of the panel. ]
[This is, as best I can tell, the largest]
[innovation fund that's ever been created. ]
[You chose a relatively unique way of doing it--]
[a collaboration with external VC firms. ]
[What made you take this opportunity to ]
[invent pretty much a brand new way of surfacing ]
[[J.I.] You know, Chris, first, ]
[since I've been CEO and worked with Mark Little, we have]
[very much tried to make GE an open]
[In healthcare, energy, we've wanted GE to be a ]
[place where the best scientists, the best technologists, like to come. ]
[So for years now we've invited ]
[venture capitalists to our Global Research Center.]
[We've opened up the doors globally because we want]
[to be known as a company that innovates, but we don't think]
[we can invent everything ourselves. ]
[Point number two--when I put on my]
[hat as an investor and a business person, ]
[I'm just as big a believer that digital energy, the smart grid, ]
[It's going to happen faster in different parts of the world than others, ]
[but the sense of the technology is here. ]
[The investment pays off relatively quickly. ]
[this is a great big market for GE.]
[For customers to get the full benefit they're not going to buy one or two things. ]
[They're going to buy a system, and that system's going to come]
[from multiple suppliers, not just one supplier. ]
[So the third thing, I think, is the system. ]
[And then the fourth thing is kind of working with the people on this panel.]
[A lot of the innovators are in ]
[places like Silicon Valley where we need to really draw]
[the best out of these start-up companies to make it happen fast. ]
[customers want a system and not one-off products, ]
[and to complete the system we've got to open up the doors.]
[Now I think the fun, Chris, just accelerates everything. ]
[In other words, what this says is here's the website, ]
[here's how you plug in, here's the groups, here's the money, ]
[here's the brand--fourth most valuable brand in the world, GE. ]
[plants--600 plants in the U.S.--]
[thousands around the world--]
[we know how to make things, we know how to sell things, we know how to service things, ]
[I think speed and the system together is going to make this very powerful. ]
[Again, we've worked with, really, ]
[We've co-invested to our own energy financial service organization, ]
[so we know the team, and we're]
[quite comfortable that we can create win-wins and go fast.]
[[C.A.] So in a sense it's too big for any one company or fund.]
[One of the unique aspects about this competition is]
[how open it is to ideas from anywhere--]
[individuals, entrepreneurs, small companies, students,]
[As you think about the kinds of ideas that might come forward,]
[and presumably there will be ideas we can't even imagine right now, ]
[how would an individual or an entrepreneur]
[Is there any precedent for this?]
[ever tried to do anything this expansive, ]
[Chris, in terms of getting this kind of grassroots. ]
[inside our plant as we did Eco 1,]
[where 5000 employee ideas that we implement.]
[In other words, the culture is]
[one of learning, adapting, executing. ]
[That's really what the company--that's how companies]
[survive for a 130 years is by kind of learning, ]
[adapting, executing, taking ideas from wherever ]
[Like I said, I've known the people on this panel for a long time.]
[for ideas is going to have to come from our partners, as well. ]
[[C.A.] I want to bring in some of the other panelists.]
[Yves Behar, the designer of ]
[the beautiful device over there, and we'll talk about cars in a moment. ]
[But Mark, I wanted to--Mark, you run ]
[I wanted to ask you about how you--]
[we've talked a little bit about employee ideas and the ]
[ideas surfacing--ideas from ]
[within a group of people who are already thinking about this. ]
[When you look at the opportunity to do open innovation and ]
[surface ideas from outside, how does that]
[change the way you develop products?]
[So this is an extension of what we do, Chris. ]
[We've had a long history of partnerships.]
[We have literally hundreds of connections with universities]
[around the world to get the great brains that are existing everywhere. ]
[As Jeff mentioned, we're opening up research centers ]
[all around the world to get connections there, as well. ]
[[Mark Little, Senior VP & Director, GE Global Research]]
[We have a long list of partnerships with big companies.]
[We have a VC activity, as well. ]
[As Jeff said, we have nothing on this scale, but for us this is very exciting. ]
[It's just the kind of thing we like to do.]
[We have 3000 women and men in our Research Center]
[who support the GE company as the core of the 50,000 technologists]
[that we have, but this is going to open up a whole new venue]
[for us to get great ideas. We're very excited about this. ]
[I'm confident that we're going to see some really great things coming out of it. ]
[[C.A.] And I know that in the last 6 months there's been a lot of research]
[on innovation models, competition models,]
[When you looked out there at success stories that you wanted]
[to incorporate in this, what came to mind?]
[We see lots of companies, Proctor and Gamble is one that has a long history of ]
[We've talked to them, we've learned from them.]
[Just the idea of getting people to give us their best ideas, to connect up with us, ]
[to match their skills up with our skills to find something]
[new and different is just really a great thing. ]
[[C.A.] Obviously, competition is now]
[recognized success model--the X PRIZE, etc--the notion]
[that creating a crisp challenge]
[with an end point and a reward that is ]
[10X investment on the part of the participants. ]
[Are you looking to the X PRIZE]
[as an example of that kind of catalytic power?]
[[M.L.] Well, we know the X PRIZE leadership team and they've done a great job]
[This is a similar sort of thing, but it's grander in scale.]
[We want to actually build businesses with partners coming out of this, ]
[so we're more ambitious in that sense. ]
[But the X PRIZE is a great model for us, too. ]
[[C.A.] Let me turn to the VCs.]
[Paul, let me start with you. ]
[Your history--you were there--present at creation in ]
[Netscape and others at the beginning of the internet. ]
[You're now at Foundation, and there's the smart grid, ]
[and energy technology is a big focus. ]
[When you look at the emergence of this new infrastructure, what]
[parallels do you see with the internet of 15-20 years ago?]
[[Paul Koontz, General Partner, Foundation Capital] There are some ways that ]
[in thinking about the two, and some]
[that in some ways are very different. ]
[regulatory context in which the smart grid has]
[The internet obviously wasn't a mission critical in any sense at the time,]
[where the smart grid is a much more central part of our economy.]
[So we did have a little more latitude to do things on the ]
[hairy edge back then than you do with the smart grid.]
[I think some things that are relevant]
[I remember early conversations we had about product release cycles, and up until]
[then software, hardware, was released ]
[in these fairly cumbersome cycles]
[of 1 year, 18 months, 2 years.]
[They were big events, and we began to say, "Why]
[couldn't we do that every 9 months?"]
[And then somebody would say, "why can't we do that every 6 months? Why can't we do that ]
[Why can't we basically just be spinning innovation and advancement ]
[and the technology out all the time?]
[allowing for the constraints that we have to operate in--]
[network and grid that we all depend on,]
[the opportunity exists to bring some]
[of that mentality to an industry that really hasn't moved very fast. ]
[I don't know if this is an accurate paraphrase, Jeff, ]
[but I've heard you speak about the rate of innovation in]
[many of the other industries in which GE participates and]
[how that stands in pretty sharp contrast to the slow pace of innovation]
[in the energy industry, and I think a big part of]
[our role and the role of the other venture]
[firms that are up here is to be the bridge that helps bring]
[their awesome commercialization ]
[power with a community and a genetic pool ]
[that we live in that lives and breathes innovation.]
[I think in many ways that's exactly what]
[Jeff used that word many times in his introductory remarks, and that's what the ]
[entrepreneurial community, the internet, lives for. ]
[I think in many ways, that's what we're here to contribute to the effort. ]
[[C.A.] You mentioned one of the distinctions was the ]
[When the internet was created it was on open standards, the ]
[to interface were clear to everyone just ]
[what the applications were yet to be invented.]
[Do you see the smart grid moving towards increasingly open standards?]
[I think one of the opportunities we have here is]
[to explain to people how one would. ]
[I realize that many of these standards,]
[the interfacing with your smart meter, the protocols, ]
[are going through regulatory process right now]
[to determine what's appropriate to open, how you avoid]
[security issues, etc, but do you see]
[sufficient progress in that kind of creation]
[ of open standards that would create this sort of innovation?]
[[P.K.] Yeah, it's one of the dimensions of ]
[policy, loosely defined, that I think is ]
[under debated at this point. ]
[Everybody talks about whether to put a price on carbon.]
[Everybody talks about the regulatory overlay]
[A lot of people talk about tax credit and subsidies and other things. ]
[One of the things that's holding back innovation is a lack of ]
[set of standards that companies can use]
[to contribute to this network. ]
[In the absence of that, the standards themselves, ]
[different technical approaches compete and there's grinding and]
[There is some of that that needs to be left in the competitive ]
[domain, to be sure, but there is also great value in some]
[intelligent, policy-level decisions to establish a framework]
[that allows commercial enterprises, whether small entrepreneurial ]
[enterprises or large firms like GE, ]
[contribute, innovate within that framework. ]
[It doesn't get as much discussion as I think it should. ]
[[C.A.] Ray, let me turn to you. ]
[Kleiner Perkins is one of the leaders in investing in this space, and ]
[I know you get a ton of deal flow or ]
[ideas coming over your desk right now. ]
[How do you think--? >>Not enough. ]
[So that's one reason to be here, but how do you think this sort of process]
[is going to change your job of identifying promising]
[opportunities and funding them?]
[[Ray Lane, Managing Partner, Kleiner Perkins Caulfield & Byers] Well, I think there's no lack of ]
[The question is opportunity. ]
[If you can identify the innovation and you can actually bring it to life.]
[I'd say we're overwhelmed with]
[the number of entrepreneurs that want to attack this problem. ]
[This is what I call a slow, fat rabbit. ]
[This is a really easy system.]
[You can even actually apply pretty ]
[elementary technology to this]
[It's such, as you said, a one-way, pretty dumb system]
[energy out there to match peak demand]
[and everything else is wasted. ]
[So this is not a hard system to ]
[So there's no lack of entrepreneurship or ]
[technology to bring to bear, ]
[but many times our entrepreneurs run into scale issues. ]
[They don't know how to scale this to the type ]
[There's 120 million residences and 20 million businesses.]
[About 10 of them are innovative--]
[PG&E is leading the way--that really ]
[innovate and want to move fast, but there's 3300 utilities.]
[There's another 1500 independent power producers]
[that all kind of have to move in sync and try to ]
[It is a scale problem, and it's very difficult]
[to think about new technology]
[that you can demonstrate and then]
[say, "Now I've got a bigger problem.]
[So I think the marriage of GE's ]
[massive scale--they know how to ]
[deal with the type of complexity and scale]
[with the entrepreneurship that we can attract]
[We'd like to hear all ideas.]
[Of course, a lot of those ideas aren't going to ]
[but I'm sure there are ideas out there, ]
[and, actually, companies, certainly research]
[labs in universities today, where we haven't seen ]
[So you take the creativity that exists in the VC community]
[and you combine it with the commercial scale and the research capability]
[that exists in GE, and good things will happen. ]
[Again, this is a slow, fat rabbit.]
[not even best in class--if we do things average, ]
[we'll get immense benefits. ]
[If you improve the efficiency of the grid 5 percent, ]
[50 billion gigawatts, excuse me, it's 50 billion gigawatts that we can get out of it,]
[[C.A.] Kleiner is one of the firms that's]
[created technology-specific funds before. >>Yeah.]
[How do you find the announcement of a dedicated fund]
[I think it is really the people who are involved in it]
[and the openness with which we communicate]
[and the speed with which we move opportunities through. ]
[It goes back to the Java Fund]
[that we did in the '90s, the iFund that we did]
[There's no question that those funds, because they have]
[money in them, attract entrepreneurs]
[Of course, some may not come to that]
[many more do than if we hadn't made the announcement, ]
[so I think public announcements like this]
[that involve a lot of smart people that are open]
[and willing to consider ideas, at the end of September]
[there will be a lot of people saying, "Ach!]
[They didn't listen to my idea.]
[I had the greatest idea in the world. They didn't listen to the idea."]
[At least there's an open dialog to consider it and say, ]
["Okay, well, let's see if this works. ]
[Let's see if we can do something with it."]
[[C.A.] Chuck, Paul earlier mentioned the role of government]
[I know that you've been thinking a lot about this. ]
[What do you see as the necessary actions]
[and moves and announcements from the]
[administration, the government in general, that would accelerate this?]
[[Chuck McDermott, General Partner, RockPort Capital] Well, I think there are people at the ]
[Department of Commerce and the Department of Energy under NIST]
[working very hard on this standards issue. ]
[Typically, in industry of this size it might take 6 or 7 ]
[years to develop standards. ]
[They're trying to compress that into a year, a year and a half, ]
[so there are people in this room who are working hard on that,]
[so we'll give them a pat on the back. ]
[But, I think the most challenging part on the regulatory aspect of it]
[really resides at the state level, because that's ]
[And I think one of the things that's challenging about deployment is not so much]
[technology, which we'll talk about more as the day wears on, but]
[a lot of it is how do we price this?]
[There's a hundred years of regulatory evolution]
[that have set rules that we're operating under today that]
[never envisioned the dynamic nature of the smart grid]
[and a two-way communication path and ]
[commerce taking place on it, as we envision.]
[We've designed rates over a hundred years to accomplish ]
[certain technical and reliability]
[and social goals and we've got this hundred-year]
[hairball here that we're going to have to try to unwind]
[over some accelerated period of time to really ]
[give clear pricing signals so that]
[smart technology can move out into the marketplace efficiently.]
[[C.A.] And to that point, one of the opportunities]
[your consequences or your energy choices]
[in your home is it can allow you to make smarter choices.]
[I know it was a priority for the administration in general, but I presume that what we have here]
[is an opportunity to take the information that's latent to the network,]
[make it visible to consumers--including]
[devices like that--so these kind of positive ]
[feedback loops of awareness and]
[smart decisions lead to more efficient use. ]
[[C.D.] Right, and that's probably Phase 1 of this so-called Prius effect. ]
[I can see what's happening and I can react to it. ]
[Perhaps next will be--on a broader scale--California is a great leader]
[on a lot of these things, so this has been, in some ways, ]
[the experimentation pond for some of this,]
[but for consumers to have certain]
[electricity pricing choices.]
[My first 300 killowatts hours per month are ]
[priced at X, and above that it's X+something. ]
[Where I live outside of Boston, I pay a flat rate]
[whether I do my laundry at four o'clock ]
[on the hottest day in the summer or in the afternoon ]
[or four in the morning, it makes no difference to me on my bill. ]
[You do your laundry? >>I do. [laughter]]
[I'm very independent. [laughter]]
[We missed the whole internet thing.]
[I still do my own laundry. [laughter]]
[Chris, let me add one thing. ]
[If you add up all of the companies that we've funded,]
[and maybe add in the rest of the venture industry, ]
[and you look at all of the power we expect to save]
[with the ventures--wind, solar, ]
[electric vehicles, all of that--in the next 5 years, ]
[you don't even come close to 50 gigawatts that you'd save]
[just making the consumer smarter and the businesses smarter about]
[You don't even get close to 50 gigawatts.]
[This is the easiest power we can save.]
[[C.A.] Yves, I wanted to--I've been saving cars]
[the other reason that we're here in California is that ]
[one of the foundations of the]
[electric car industry that's just emerging, what you have with electric cars]
[The electricity they're going to demand is going to require better, ]
[smarter distribution and potential storage.]
[It's an electron economy sort of vehicle. ]
[they have the opportunity to take that intelligence from the grid into vehicles]
[Can you tell us a little bit more about this]
[beautiful device, and how you look at the]
[car side of the grid going forward?]
[[Yves Behar, Founder, fuseproject] Sure. I think that we're ]
[in a place in California, but in general where ]
[people are really, really excited about]
[the electric vehicles coming up and more recycled cars, etc.]
[In many ways, design is the way that ]
[we're going to be able to make it tangible to people because]
[a lot of the savings that we talk about here--]
[they're great numbers, but they're a little bit abstract]
[at home doing their laundry, for example. ]
[whether they're in the home, whether they're on the streets, ]
[the physical way in which people are going to be able to]
[actualize their experience, ]
[how they're contributing to saving energy and]
[how they're participating, and I think this is really important. ]
[A company like GE, in a way, needs]
[people to participate in the products]
[that they make, that they provide, and]
[these types of devices are great for that.]
[it to be easier, they want it to be simpler, ]
[they want it to be just simply]
[a great experience that changes their life.]
[So the way we designed the WattStation]
[which sort of symbolizes a lot of ]
[visual noise in the urban environment--]
[visual noise, obviously visual and physical pollution there. ]
[In a way we wanted it to be completely different.]
[We didn't it to be square, we didn't want it to be large]
[in scale, we didn't want it to be made of]
[sort of hard-cornered sheet metal. ]
[We want it to really blend in the urban landscape.]
[So I'll just stand up because]
[the product here is very relatable. ]
[It's much more sort of serving the information]
[on a tray, and this is a lot about information. ]
[[C.A.] Can you visualize--where am I?]
[Where am I encountering this?]
[Well, you're encountering this on the sidewalk. ]
[So instead of parking meters, you]
[will have charging stations. ]
[You need to be able to see from the street whether it's ]
[available, whether it's charging, whether the ]
[car that's there is already fully charged,]
[and for that we have this LED ring right here.]
[But overall, the shape is very sort of a smooth and soft]
[that is just at enough angle so that]
[snow and rain doesn't stay on it,]
[but, exactly the right kind of angle for]
[human relationship with this object. ]
[So, we wanted it to be much more like the greenery in a city, ]
[rather than a large piece of ]
[infrastructure in what it says and what it expresses,]
[both about what it does, but also about the GE brand. ]
[It's easy to sort of see it appear on the streets.]
[inside technology here, from ]
[being able to charge a car a lot faster--]
[that we see in other products right now. ]
[The chord is retractable, so ]
[it goes straight back into the product. ]
[If you happen to bump into one, it's kind of ]
[softer and friendlier than a parking meter, I think. ]
[[off-camera speaker] I'm starting to fall in love with it. [laughter]]
[We want it to have human qualities, ]
[and we want it to integrate in the urban landscape]
[in a way that these things just become part of ]
[the every day, really the practical ways]
[in which you want to charge your car. ]
[You don't have to make a detour, you don't have to look on a map]
[It's just there whether you're parking at work ]
[or whether you're playing with the kids at the park. ]
[[C.A.] I have one more question for everybody.]
[I just want to give everybody a heads-up that]
[I'll be taking questions from the audience after Yves ]
[There will be microphones around.]
[I would just ask you to identify yourself. ]
[Let me ask one last question while you guys are preparing.]
[There's people who can spot your question. ]
[Is this going to be sort of radiating]
[intelligence and information such that,]
[for example, my car can know where one of these is free? ]
[How do you see the interface with the car work?]
[the product will have multiple ]
[types of connections--you can add in ]
[interactivity and communications. ]
[So you'll be able to drive down the street, ]
[and whether it's on an app on your mobile]
[device or whether it is your car that will have]
[this app built in, you will be able to ]
[And then you can also imagine what other kinds of information]
[Whether I'm a tourist or whether I'm looking for additional information]
[on the street, there's no reason why these wouldn't be even ]
[more of a service than just providing me]
[There's really simple things that are built in. ]
[For example, the screen is heated slightly]
[in case it rains, the snow or the ice]
[There's all kinds of things you can place in there]
[that can be upgraded over time. ]
[people making apps that do this kind of ]
[communication and that add even more intelligence]
[It's very much a platform in many ways. ]
[[C.A.] And who do you imagine will pay for them? >>Hmm?]
[[C.A.] Who do you imagine will pay for the installation? ]
[Well, the installations will be paid by businesses, cities,]
[[J.I.] That's the first wave, Chris--]
[Purdue University, municipalities. ]
[The first generation will be kind of a]
[public system, let's say, between the ]
[electric vehicles and the stations. ]
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