Build a climate startup #46
How to generate and validate climate startup ideas
Hello Human,
Today, I’m publishing something different.
Earlier this year, I tried launching a hydrogen airplane startup.
I learned a ton from this experience and also want to share my learnings with you. There isn’t much information about the early stages of building a (hardware) climate startup.
In this article, I summarize my key learnings on how to generate climate startup ideas, select an idea, and then effectively validate it. This can be helpful for other climate founders out there!
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🛫Alba - the hydrogen airplane
Over the past six months (March-August 2022), my co-founder and I tried launching Alba, a hydrogen airplane startup. Yes, that’s right - a hydrogen airplane startup.
Alba’s bold vision was to enable low-emission transatlantic flights.
We focused on designing and developing a hydrogen-first Blended Wing Body airframe and integrating hydrogen storage and propulsion system into it. More on that later in this article!
⚙️The process
How on Earth does somebody get to thinking and building a hydrogen airplane? Let me walk you through our process step-by-step.
Here’s an overview of the steps we took:
Idea generation
Idea selection
Idea validation
Closing down
(Now, we are back at the beginning of this process!)
💡1. Ideation generation
What we did
After my co-founder and I had agreed to start working together, we started ideating different climate solutions. We created a document in our shared Google drive and listed all our ideas for a climate startup. We had 17 ideas together.
I generated most of my ideas by staring at the below pie chart. I went through sector by sector, coming up with solutions that could tackle that sector's greenhouse gas emissions. I focused on hardware solutions, as I am most familiar with those via my Survivaltech.club newsletter, think that our world lacks hardware climate startups, and my co-founder has an incredible background in mechanical engineering.
What we learned
List down all the ideas that you have. Even the most self-evident ones. They might spark a new idea or a fruitful discussion with your co-founder.
Crowdsource ideas. Now that we are back in the ideation phase, I’ve started asking people (especially climate investors) whether they have identified climate problems not enough people are yet tackling.
🎯2. Idea selection
What we did
Once we had listed all our 17 ideas, we picked four ideas we held as the most interesting based on gut feeling.
We then gathered more information on the four ideas and constructed the following rubric to evaluate different ideas:
This rubric was a good try to evaluate the different ideas and pick the idea rationally. However, looking back, we made the decision based on internal motivation.
We got excited about decarbonizing aviation and building an electric airplane for transatlantic flights. We run forward with this idea.
What we learned
➡️Framework for choosing a climate startup idea
There were numerous learnings from this phase and things I will do differently next time in selecting the idea and problem space. Thus, I created this framework for choosing a climate startup idea.
Here are questions under three topics I would ask yourself when picking a climate startup idea:
1. Climate impact
What is the solution's realistic time for climate impact? How long are you willing to wait?
How big is the solution's climate impact potential? Is there a minimum climate impact you want to make?
How certain is the solution's climate impact? How big are the scientific uncertainties around the solution’s climate impact?
Which climate problems have been neglected?
2. Team
What is your team's unique advantage (skillsets, network, insights, etc.)? How good is the founder-market fit?
What motivates you and your team?
3. Timing
What fundamental shifts are taking place in technology/society? (E.g., the price of solar, the time required for genome sequencing)
What policy and regulatory carrots are there? (E.g., Inflation Reduction Act in the US)
Notes:
The founder-market fit was a topic that constantly came up when talking with investors. Prepare for this question. If you don’t have all the skillsets in your team, demonstrate that you can hire fast and more than well.
This framework can also be used in idea generation. For example, look at the recent Inflation Reduction Act and determine what opportunities it opens.
🗣️🛠️3. Idea validation
What we did
The real work started in this idea validation phase.
We started by doing back-of-the-envelope calculations for retrofitting a Boeing 747 airplane with batteries and electric motors.
We quickly realized that battery-electric airplanes are not an option for flights over 500km (310 miles). We also noticed several companies were already building battery-electric regional and short-haul airplanes. Thus, we decided to focus on decarbonizing medium- and long-haul flights.
We learned hydrogen airplanes (fuel cells or turbines) have the lowest in-flight emissions on medium- and long-haul flights compared to other alternatives.
We also learned that hydrogen requires 4-8x more volume (4x for liquified hydrogen, 8x for compressed hydrogen) than jet fuel to store the same amount of energy. In the current tube and wing airplane model, there’s a limit on how much hydrogen fuel and how many tanks you can fit in the fuselage before there’s an uneconomic trade-off with the passenger seats. Read more about different aviation fuels and their energy densities in this Survivaltech.club deep dive.
Thus, we decided to go forward with the Blended-Wing Body (BWB) airframe design. This novel airframe blends the tube and the wings into one flying “Batman” wing. The BWB airframe design has two key advantages: Firstly, it has all the space to fit the hydrogen fuel requiring 4-8x more storage volume than jet fuel. Secondly, the BWB is more aerodynamic, cutting fuel consumption by up to 25%.
The BWB design is already used in the military, e.g., the U.S. Air Force B-2 stealth bomber.
To figure out whether it was feasible to build a hydrogen-fueled BWB airplane, we had to find quickly learn about a vast array of fields:
Aerospace engineering; especially aircraft design and aerodynamics
Aircraft certification process
Aircraft manufacturing and supply chains
Airline operations, business model, and sustainability strategies
Hydrogen economy (production + distribution)
Airplane startup financing
Hydrogen powertrain (jet turbine & fuel cell) development
Quick prototyping
We gathered information and made sense of the problems mainly by:
talking to people
building conceptual designs and prototypes, and
reading scientific papers and reports.
Over the six months, we held +230 meetings and calls with aerospace engineers, airlines, hydrogen experts, investors, and other people in relevant fields. We build conceptual designs and three small-scale RC prototypes with a BWB airframe and electric motors.
What we learned
Form key hypotheses → Validate/invalidate → Iterate. We started with the idea (battery-electric medium-haul airplane) and listed down hypotheses that we had regarding it. We then looked for answers to these hypotheses. When we learned something new, we iterated the idea. This worked well.
Talk with lots of relevant people. We were newcomers in aviation with a bold idea, and there was a lot to learn. This idea required an understanding of several areas listed above. Talking with experts in different fields was an efficient way to find answers and learn about the particular field in general. My time in SF this spring certainly accelerated this learning process tremendously. People in SF were incredibly open to making introductions to amazing people in their network (Read more about my time in SF here). Furthermore, California and especially LA are hot spots for aerospace innovation in the US and the whole world. (Learn about the legendary Mojave desert next to LA)
Prototype. Fast. Building conceptual designs and prototypes taught us a lot about BWBs and aerospace engineering in general. It also showed people we were building this and not only talking. The conceptual designs and prototypes helped convey our idea to people and get feedback.
Pitch your idea. I pitched Alba at the On Deck Build for Climate’s showcase and at the SILTA Demo Day in SF. We even applied to YC. Building a deck and pitching forced us to clarify our value proposition, customers, roadmap, business model, and many more aspects. Having deadlines created a sense of urgency and accelerated our process.
Talk with customers early on. We got to talk to several airlines and their decision-makers in August. Looking back, we should have prioritized this higher in our development process and started the talks earlier. Even YC’s motto is “make something people want”. However, I need to give some mercy to ourselves here. Scheduling a meeting with an airline executive takes time and persistence.
🛬4. Closing down
What we did
After having +230 meetings and calls, building a concept design, and prototyping, we started feeling things weren’t proceeding as we had anticipated.
We looked at the data that we had gathered. We listed down reasons why we should and should not continue building Alba. We also listed what worked well in this process and what we could improve.
We eventually took a hard decision and decided not to continue building Alba. After committing to this for six months, it was emotionally challenging but the only right choice.
The biggest reason for us not continuing to build Alba was our solution’s long time (+15 years) to uncertain climate impact.
We discovered that there are still scientific uncertainties around hydrogen as an aviation fuel. First, we don’t have empirical evidence of what the water vapor that hydrogen airplanes emit will do in high levels of the atmosphere. Water vapor is a greenhouse gas. Second, hydrogen leakages may also create a serious climate problem. Hydrogen is a tiny molecule that easily escapes into the atmosphere. In turn, hydrogen is an indirect greenhouse gas in the atmosphere.
In short, we didn’t want to take the risk of building a BWB hydrogen airplane and realize in 10-15 years that our climate impact is, in fact, neutral or negative. That would erase our whole purpose of building a climate startup.
In addition, we found other reasons not to continue building. Several potential co-founders with strong aerospace engineering background deemed Alba even too ambitious (new fuel + novel airframe), airlines seemed to prefer drop-in sustaianble aviation fuels, and hydrogen jet turbine development was still relatively far away and uncertain.
Learnings
Trust your intuition. Making tough decisions is always hard. Usually, your intuition already knows what you should do. If I look back at all the hard decisions that I’ve made, I’ve always followed my intuition. As an analytic person, I have tried rationalizing decisions afterward. But really, it has been my intuition that has made the decision.
Fight against the sunk cost fallacy. It is tempting to keep going with a bad idea “just because you have built this already for X number of months or years”. It is a humane thing to do. Fight against it. (Read more about sunk cost fallacy and other errors in decision-making here.) Side note: I find neuroscience and its role in decision-making fascinating. Check out my Bachelor’s thesis “To trust or not to trust? Trust decision – a neurobiological creation and a victim of subconscious biases. Implications for economic decision makers”.
📝Other remarks
Keep a mailing list. We sent updates about our progress to people we wanted to keep close to (potential co-founders, airlines, investors, climate people, etc.). This was certainly helpful and demonstrated the progress concretely that we were making.
Pay it forward. Help other people, and good things will happen to you.
🔥Next steps
My co-founder and I are still committed to building a hardware climate startup. We have started exploring new climate problems and solutions.
➡️In case you have identified any overlooked climate problems that we should explore, I’d love to hear about them.
I’m preparing my visa application to relocate to the US. I fell in love with the Bay Area’s climate tech community this spring. (Read more here.)
➡️I’m looking for an Entrepreneur-in-Residence/Fellowship/ similar position in a US-based climate fund or organization to relocate to the US (preferably the Bay Area). If you know of any opportunities, I’d highly appreciate hearing from those!
🗞️News
🪨Paebble, a European carbon storage startup, launched and announced its €8M funding round.
✈️LanzaJet got a $50M grant from Breakthrough Energy for its first commercial sustainable aviation fuel plant.
🌊Propeller VC raised a $100M fund targeting ocean-based climate solutions
🌟Lowercarbon raised a $250M fusion-focused fund focused.
💰Breakthrough Energy expands its investment focus to climate adaptation and is raising a separate later-stage fund.
🏗️H2 Green Steel, a Swedish low-emission steel startup, got $3.45B in debt funding for its hydrogen-based steel plant in Boden and raised a $260M series B round.
⚡Electra, a Colorado-based low-emission steel startup, raised an $85M funding round for developing its low-temperature, electrolysis-based steelmaking process.
[Read more about decarbonizing steelmaking at Survivaltech.club’s recent deep dive.]
As always, I’d love to hear feedback and connect with fellow climate people! Contact me at pauliina@survivaltech.club or on Twitter.
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Best, Pauliina💚