Interview
How I Bought 12% of Google for $12M; How VC is Fixing Climate Change | John Doerr Full Interview
- Strategic Shift to Climate Investing: Kleiner Perkins made a major commitment to climate investing in 2006–2007, running parallel to their app store and cloud bets, which resulted in approximately $1 billion invested across 70+ climate-related companies.
- Portfolio Performance: While early climate investments required longer timelines and capital to yield returns, the portfolio is now valued at approximately $3 billion on an "as-if-held" basis, validating the strategy despite initial challenges.
- Enphase Investment Success: Out of eight solar ventures, seven producing solar panels were crushed by Chinese market competition; however, the single investment in Enphase (microinverters) generated gains sufficient to offset all solar panel losses and is now worth roughly $1 billion today.
- Pandemic Fund Returns: A separate fund dedicated to pandemic preparedness achieved limited financial returns, as the expected pandemic events did not align with the investment thesis in a way that generated high multiples, though it provided valuable organizational focus.
- Investment Philosophy on Timing: The founder prefers being "too early" rather than "too late," citing Google (the 18th search engine) as a prime example of backing a market leader before it became obvious to the broader industry.
- Google Investment Rationale: The decision to invest in Google was driven by founder Larry Page's assertion that search could generate $10 billion in revenue and the conviction that a relevance engine (PageRank) using backlinks would drastically improve information organization.
- Business Model Innovation: Google's success was catalyzed by an open auction system for ads (modified Vickrey auction) that separated ad relevance from content, ensuring market liquidity and preventing overheating.
- Market Timing and Bias: Investors must maintain "prepared minds" and avoid historical bias (e.g., avoiding solar after early losses) by understanding the underlying physics and technology of new sectors.
- Climate Crisis Urgency: The current climate reality is described as a "new abnormal" characterized by escalating wildfires, floods, and 10 million climate refugees, necessitating a total transition from a fossil-fuel-based system to a clean energy economy.
- Climate Justice Obligation: The U.S. is identified as having an obligation to lead as the largest historical emitter, specifically to prove decarbonization is possible and to drive down costs for other nations.
- Key Result 1.1 (Electric Vehicles): The plan sets a specific target for electric vehicles to achieve price-performance parity with internal combustion engines by 2024 in the U.S. ($35,000) and by 2030 in India and China ($11,000).
- Six Climate Objectives: The strategy outlines six primary objectives: electrify transportation, decarbonize the grid (wind, solar, safe nuclear), fix food systems (reduce meat/dairy), protect nature (stop deforestation), clean up industry (steel/cement), and remove residual carbon via natural or direct air capture methods.
- OKR Implementation: The book utilizes the Objectives and Key Results (OKRs) framework to define measurable, time-bound goals for the 20 largest emitting countries, contrasting goals with a lack of actionable plans.
- Emission Reduction Targets: To limit warming to 1.5°C, global carbon emissions must be reduced by 8% annually from 2022 to 2025 to achieve a cumulative 50% reduction by 2030.
- Hope Drivers: Hope is derived from bottom-up movements, such as the spread of youth climate strikes from a single protest in 2018 to 4 million participants globally in 2019, and corporate leadership from entities like Walmart.
- Government vs. Private Sector: Private actors (entrepreneurs, investors, youth) are currently moving faster than governments; the author advocates for making the climate crisis a top-two voting issue in the 20 largest emitting countries by 2025 to force political action.
- Board Governance Philosophy: Effective board members should prioritize asking three to five insightful questions per meeting, with half focusing on issues the team has not yet considered, rather than dictating strategy.
- Talent Acquisition: Successful recruitment is defined by a genuine love for people and the ability to view ventures as "hopes and dreams" rather than mere transactions, providing credibility and affirmation to founders.
- Investment Advice for Non-Climate Funds: Not every fund must become a climate fund; instead, specialized investors (e.g., SaaS experts) should apply their domain expertise to climate applications (e.g., carbon accounting, supply chain management) like the investment in Watershed.