What are the entrepreneurial trends prevalent in the eco space today?

I think there are two key trends in the marketplace today:

1. In general there is a heightened level of consciousness around preserving the environment for ourselves and future generations (save the earth).
2. Entrepreneurs are excited by the fact that viable businesses can be created while saving the environment. In other words, it's not simply the philanthropists and the die-hard environmentalists who are shepherding the movement (make money).

Is there a growing focus in this direction? If yes, why?

There is definitely momentum in this direction via both push and pull mechanisms. Cleantech has become a must-have, and no more remains a nice-to-have. There are companies, large and small, that for both tangible and intangible reasons want to be seen as proponents of the "go green" movement. Tangible, because it makes good business sense and it could lead to new businesses or segments within existing businesses. Intangible, because consumers increasingly will lean towards brands and businesses that they perceive to be on the right side of the eco universe. From an India context, again consumers and entrepreneurs are realizing that as we grow, there is a cost to that growth. That cost in part is the pollution cause in the production and transport of goods around India, and also in the disposal of goods (especially electrical and electronics) as consumers can afford more and want the latest and greatest. As a result, DFJ has focused in this particular category and is investing in the ewaste recycling segment as an example. There is a lot more work that has to be done to educate the mass consumer base, but there is definite progress being made, especially by the younger generation.

Are you seeing an increasing number of entrepreneurs venturing into businesses that are oriented towards protecting the environment?

Not as many as I would like, but yes, there is continued momentum. Again, DFJ, for example, has 4 investments thus far in companies that are either based in India or have significant operations in India in the eco-friendly ecosystem. Reva is an electric car company based in Bangalore; Dlight Design is a high-efficient LED lighting and power management system for the rural population; Deeya Energy is a very effective energy storage system as a replacement for Diesel Genset market; and the ewaste recycling company I mentioned before. We are seeing more in the solar, wind and biomass areas from a power generation standpoint. But I think a lot more can be done in terms of coming up with more environmentally friendly manufacturing techniques and mass market applications for clean water, power, ad waste disposal (which can be turned into fuel). Technologies in these areas will be developed in India where the need is immediate and massive.

What kind of entrepreneurs are entering into cleantech businesses?

They can broadly be divided into three categories:

1. A significant group, almost 40%, is older and has prior experience in related industries. For example, semiconductor firms, because of the downturn, are moving into the solar panels/processes field.
2. The second, and a more active group, is that of 'transplants' - executives who have had exposure to cleantech products and processes in the US and Europe - who are now using this knowledge to fill the demand-supply gap in India. This constitutes another 40%. This is a passionate group that focuses more on India-centric service delivery mechanism than product innovation. They leverage on the technology available in the West, license it and proliferate it in the Indian mass market. I feel transplants will lead the cleantech entrepreneurship in India, at least for a while.
3. The third group is a fairly young crowd comprising recent graduates. They are creative, enthusiastic and more open to experiment as they have fewer liabilities.

What kind of proposals are you getting in the green space? What are the opportunities that exist in this space?

Out of the 700 proposals I have received in the last one year, about a third are related to cleantech. We are seeing a heavy uptick in recent months though - 80 of the 250 proposals we have received in the last four months are cleantech based. However, many of them are project-based or are not scaleable. I would encourage entrepreneurs to look at mass market application that involve transportation, water, power, waste/sewage, recycling of all sorts of goods, manufacturing, cleaner fuels, particulate capture from vehicle exhaust et cetera.

How can entrepreneurs engage themselves in environment related issues?

This is a grass roots movement. There are mechanisms (public and private) for entrepreneurs to congregate, share ideas and make things happen (that's what entrepreneurs know how to do best). On one hand, there has to be availability of products and services that are addressing the environment; on the other, there has to be significant education for the consumers and various constituents with respect to the benefits, both tangible and intangible. There are companies overseas like whole foods, Patagonia, REI, Ben and Jerrys whose names and brands are synonymous with being Green and very environmentally friendly. Entrepreneurs don't necessarily have to be in the direct business of the environment (like Reva or Deeya), but rather can make it part of their culture to be eco-friendly (recycle, contribute part of the operating profit to a cause, adopt a environmentally friendly cause, plant trees, clean up trash, adopt a road etc.). These initiatives have to be adopted at individual, community, and company levels. Often there is a tendency to be apathetic or view a problem as so large that indifference creeps in (How much difference can I make as an individual!). But entrepreneurs are a different breed and swim against the current. I think it will be the entrepreneurs (not the politicians) who will make this change happen, in terms of both production and consumption of goods and services that actually benefit rather than endanger the environment.

What challenges do entrepreneurs face in this space? How can they be overcome?

Challenges are several. A change in attitude has to take place (and it is happening albeit slowly) across the spectrum in both the public and private domains. Additionally, there may be changes in systems, processes, materials that are required for producing goods, which will be more costly than doing things the traditional way. That cost has to then be passed on to the consumers or be subsidized. There will have to be a push on the government front to cause policy change to occur. For example, Reva has worked very hard with government institutions to make them realize the value of having an electrical vehicle and as such, has pushed for subsidies either directly from governments at the local level (Chandigarh, for example, now provides a Rs. 15,000 subsidy for anyone purchasing an electrical vehicle) or for reduction or elimination of excise taxes. Then there will have to be a fairly significant initiative to educate the consumer that they can be green without having to compromise on quality, comfort or other decision-making parameters. Entrepreneurs are notorious for not taking "no" for an answer and figuring out how to overcome hurdles. Add to that the Indian ingenuity and working within constraints that most of the world would consider insurmountable, and you have the ideal mixture to overcome any challenge.

What are the changes you foresee in the coming years with respect to environment-related initiatives?

I think the next ten years will see phenomenal change, not only in terms of environmentally friendly initiatives in the fields of energy, water and the like, but also in terms of consumer behavior and making environmental friendliness part of every day activities. India is a young country, and more often than not, the changes in behavior are catalyzed by the young who are not set in the old ways, and they adapt to change a lot more easily than the older generations. I strongly believe that based on what I am seeing in India from an environmentally friendly entrepreneurship standpoint, we will be at the forefront of not only eco-innovation but also mass deployment of eco-friendly innovations, products, processes and services.

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