Cameron: Officially good afternoon on the Westcoast and happy afternoon everywhere else in Canada. My name's Cameron Burke. I'm a partner at Fort Capital in Vancouver and formerly head of Cleantech at PWC Canada. I'm delighted today to moderate a panel on a topic that is everywhere in the news, it appears at the moment. The momentum and the evolution of the Cleantech sector. It really feels like were in a transformational moment right now in Cleantech, a combination of ESG mandates, net zero, post-pandemic investment methodology is driving enormous momentum and I think what we're here today to discuss the scale up in this ecosystem. Raising money, when you're trying to do it, it sometimes feels like the end, but I think if you've been through it you realize it's the beginning. The beginning of another transition and often the only part that scale's is the technology. So today we're going to dive in with a great panel. I'm very excited to speak with about scaling a company after funding. The challenges that it represents. The cultural pressures, the strategic pressures and we're going to dive in right now. What I would like to do is just do a level set here on some introductions and, Roch, why don't I start with you, if you can give a little context on your role.
Roch: Sure, happy to. Thanks, Cam, and welcome everyone to the webinar. My name is Roch Ripley. I am a lawyer and patent agent with Gowlings. I'm based here in Vancouver and I head the intellectual property department here. A lot of my practice is helping Cleantech companies generate and protect IP surrounding their inventions, licencing and commercializing that, and also doing work on the transactional side when it comes time to scale up and raise money as Cam mentioned.
Cameron: Thanks, Roch. Darren, over to you.
Darren: Good morning, everyone. Good afternoon those in the East Coast. My background is CPA from Victoria. Did a commerce degree at UVic. I've always been engaged in companies that have been able to make a difference and the first 10 to 15 years of my career was in the medical devices and pharmaceutical industries, and realized I can't help drugs perform better because I'm not a scientist, so I got into Cleantech about 6, 7 years ago. It's been a fantastic ride and I agree I think we're now seeing the tide is changing and it's good to be on the right side of history. I think today's discussion is really fruitful and helpful for those looking to get involved in this sector.
Cameron: That's great and last, certainly not least, Jeanette.
Jeanette: Hi, everyone. Jeanette Jackson. I'm the CEO of Foresight Canada. We are Canada's largest Cleantech accelerator with our home routes here in the Province. So we've had the opportunity to support of hundreds of BC innovators, entrepreneurs as they work through that ideation, commercialization and of course scale up phase. Lots of really interesting things happening in the Province right now. Sectorally we're seeing strong development in the resource sector, mining, forestry, oil and gas. On the energy side it's no secret we have some CCUS, or carbon capture winners, here, hydrogen developments with HTech and the great work that's been doing with the Canadian Hydrogen Fuel Cell Association, energy storage, water, aggretech, so the region is certainly prime to lead Canada, and the rest of the world, and help Canada lead globally when it comes to Cleantech innovation and scale up.
Cameron: Okay. Perfect. That's a great door opener. I'm going to start. Let's keep that thought going Jeanette. The global Cleantech innovation index recently ranked Canada at number 2, up from number 7, in their rankings, citing strong government funding, a vibrant ecosystem. In the context of BC perhaps you could give us your perspective on the landscape for Cleantech scale ups in BC. Are we really primed for growth?
Jeanette: For sure. The last 18 months, even just before COVID, there's been a lot of conversations about how we better help the BC Cleantech company scale. The amazing work that the BCCO Alliance has done with bringing some of those larger late stage ventures together to share best practices with the rest of the network. We're always happy to share their stories and get them integrated with those earlier stage companies. You've got a lot of digital expertise here and we're seeing more and more in Cleantech ventures. The important element of data and digital and dashboarding because we need to understand the problem as best we can so that we can develop the best solutions. BC has some strong talent and capacity there. Obviously we also have a very strong framework that the Province is building on. It started off as Clean BC, with some ideas and guidelines, and now that's going to be moving onto a deeper integrated component of the Province's economic strategy and so really excited to see how some of those things come together in the coming weeks and months as those pieces are announced. Foresight, we tend to think of ourselves as a mighty force. Small team, big impact but we did some work on the BC cluster strategy which allowed us to take a step back and look at what programs and initiatives are working and what programs and initiatives could perhaps be beefed up a little bit. When we also do surveying we hear from BC companies that what's helping them succeed is they are getting access to talent, they have lots of government support programs, there's still some great initiatives being provided, not only with us but other accelerators and partners in the Province. Here we also have the home base for the IP collective, so it's a national program, 30 million dollars. I know Roch's going to be diving into that so no sense in stealing some of that wind. But BC has been punching above its weight on the Global Cleantech 100 for sometime and I think it's because of these Clean BC and even the new announcement for the Center of Innovation and Clean Energy. That's going to start to attract industry and investors and even more innovators to the region. Definitely punching above our weight and I could ramble about that for quite some time.
Cameron: Okay. As a British Columbian I'm selfishly very pleased to hear that but, inevitably like any other part of the tech ecosystem, there's a tap in regionally and there's how do we align Federally. I notice that you've expanded recently into Alberta. It would seem from a 30,000 feet that there's an interesting ecosystem there of procurement, industry meeting tech and all sorts of interesting things but if you could give us some context of what you see as the advantage of being in Alberta, and synergies between the Provinces, that benefit both perhaps.
Jeanette: Sure. For us as an organization it's quite fascinating. It's almost ironic how many renewable energy companies, oil and gas companies, actually come out of BC given that we have preset hydro power and that's looked at as clean energy. Alberta is an interesting place. They're asking for support. They're asking for access to the best innovators so that they can solve their own opportunities to be more sustainable and reaching that zero climate targets. Alberta also is a network of engineers and, manufacturers, fabricators and those things are required to materialize and scale up a lot of the Cleantech companies here in the Province. We started to get a lot of applications of ventures that wanted supports from us and so that was a natural segue. If we can breakdown these regional silos, industry and investors don't have barriers, and I think know as COVID has materialized neither do teams. They're dispersed everywhere. I think the more we can collaborate and connect the dots on resources available, share best practices that as a country we can just succeed better together.
Cameron: That's great. We're chatting about the context of which this momentum is happening in. Myself, as a former operator, sometimes it feels like a lonely journey. It's great to have momentum but keeping the train on the tracks is a fulltime job and, Darren, maybe we could get some context from you. In February Loop completed an IPO. Congratulations on that. I'm sure it was a overnight success but I know that journey is long and bumpy and not linear and I think for all the operators on this call, if you could give us some context of how you got to that point. How do you survive long enough to get to that point of success? I always love hearing these stories.
Darren: Great, thank you. It's funny. I mean a couple of years ago before just as we were receiving our second traunch investment from Cummins I was talking to one of our directors and one of our successes is that namely that we just survived as a company, regardless of what we did. We were around, we had a heartbeat, we had a bit of cash in the bank and that was a success. I think what's interesting is that anytime you're in a disruptive industry, going into up end and incumbent, there are always head winds because you're trying to make a difference in a technology and environment that's not used to certain new technologies coming in and there's going to be incumbents that are pushing you off, there's government regulations that you're dealing with and things like that. So for us as a company, one of the main themes that we've always driven on is getting the right people that are there for the right reasons, because you're going to have all kinds of ups and downs, positives and negatives that happen, things that you're not aware, you can't control, and when it gets ugly in the business and there's tough times and you've got suppliers calling you, screaming at you to make payments and all the rest of it, you need to have a good team there that believe in what they're doing and that are willing to go through that together to get to the outcome. If you believe that you're going to be on the right side of history, oftentimes you will. It's obviously ups and downs to get there but for us as a group, and a lot of the Cleantech groups, having that cultural piece bind you together is critically important. So our company's been around almost 20 years now. One of the things that our founder did, very smartly, is back in 2008 when there was the down turn, was he basically he turned the company off for a couple of years. Let the economy ride itself out. A bunch of patents were issued to the company and effectively he started it up again rather than taking it right offline. We got a bunch of patents. There were some more enthusiasm around the Cleantech space. Got a new group of investors in and then started down that pathway and things like that I think are the difference around how entrepreneurials manage that growth and that process. Always keeping an eye, obviously, on cash flow and I can't overemphasize the amount of government support that's been there. So everything from the EBC tax credits here in BC are hugely supportive for entrepreneurs because they can put in an investment. They get a tax credit back. It de-risks it a little bit for them. All the WED work, IRAP, SDTC, SHRED, all these programs are hugely important to help companies survive, and really when investors see that the government's there to support that program you're leveraging. A dollar in actually gets you a $1.75 in working capital and that's a huge leverage point that I think goes unnoticed. Certainly here in BC we've been one of the more progressive Provinces in advancing some of those tax credit initiatives, which are fantastic, because it takes it out of the control of the government, if you will, and puts it in the hands of the investor. So they're choosing where to put their dollars and then the government's leveraging that. So it's a market driven tax incentive program which I think is fantastic.
Cameron: That's great. Scaling a tech company is exhausting, closely matched by IPO'ing, so the combination. I'm curious was there a moment when the IPO happened, where you able to take a step back and sort of the team just notice the moment in time and congratulate yourself on getting to that point? Or is it just sort of a blur on the way to scale?
Darren: We, as a company, were out doing a growth equity round and during COVID there was this huge ESG push, all these things in the environment they were pushing a lot of money towards this energy transition. You were starting to see certainly the likes of Tesla pushing the electric vehicle markets and things like that. Calling out fossil fuels was helpful. For us we had chosen to work with a bank, similar from a culture perspective, they were engaged in hydrogen and so they had that DNA within them. So National Bank Financial was the one who was leading our growth equity round and they led our IPO. So we purposely chose them because they had hydrogen in their DNA. They were engaged with helping Ballard and other companies like that raise capital. In the later part of November of 2020 they basically came to us and said, "Look, the market's ripe for technology companies. There's a lot of companies out there looking for cash in the public markets. Investors love the space. You have a unique platform. We want to take you public." and we were not ready as a public company. Nowhere close so we were purely a private enterprise. We had a controller and one accountant. Then all of sudden within 4 days we had to go back and reaudit 3 years of financials, do the prospectus and all this stuff and the window was going to be a month, basically in February, that they could see that it was going to open for it. Because we were a pre-revenue company. We're certainly in the earlier stage and I think that cultural piece is usually important because having a team that said, "Okay, I'm going to give up 2 months of nights and weekends but we're going to get (at that point it was 50 million)" and then it just kind of grew and the story grew and we had a unique value proposition but, again, the right team was there that put the hard work in. We priced on February 3 at the peak and then we closed on the 25 and we raised the capital that now we're beginning to deploy as we scale up.
Cameron: That's so great to hear. I think it is a lonely journey along the way, so I think for those operators out there sometimes, it happens way faster than you anticipate and getting that deal room ready, getting ready, getting advisors ready is always an interesting lesson. I'm curious about the lessons, post, that raised in terms of using the capital to deploy and how you're scaling up. Give us a little insight into how you're managing that process.
Darren: I mean mention culture a lot so having systems in place in terms of how you recruit, doing job descriptions, all those things, oftentimes companies don't have those ready. But if you have the right hearts and minds that are going down that pathway people will generally figure it out because you're scaling quicker than what the company's actually technically ready to do. So if the people are in the right mindset and supporting each other, if job descriptions are done incorrectly someone else will lean in and help fix those initiatives. You've got people coming on every week, onboarding, all these things that change and your culture scales so quickly and if you have the right people above that then they can help have that culture flow through to new people. What's been most interesting for us, again because the Cleantech story is resonating well with a lot of people who are coming out of other industries, are coming out in the finance world, coming out of the KPMGs or PWCs of the world is they see an ability to make a difference, so what's been most interesting for us is the amount of recruitment we've had within the friendship category, if you will. So someone will say, "I know so and so at PWC that would love this role. I'm going to go and recruit them." and they've come over because of that cultural bind. So the recruitment process, again from a culture perspective, can be hugely differential because people want to get involved in something that's different. Not just a regular cannabis play or something like that.
Cameron: That's a topic, the culture piece is, I think, a really critical one and one that I'd love to come back to in a bit as it post-raise in my experience to it, it also exposes expectations that maybe you didn't know existed. Whether it be on the product side and how you're going to grow. How you're not going to grow and all of those things. I'd love to circle back with you but I think the timing of these things you touched on as well. Roch, I wanted to bring you in. When you see these kinds of tail winds, macro tail winds that are driving momentum, I think for a lot of startups right now who have been working on their tech, deals are coming faster than perhaps people anticipate. Or the opportunity to go through a liquidity event or raise some capital. I'm curious about, are the companies and startups that you see, what is typical, if that term really is relevant, of a company's IP strategy before it's really had a chance to scale up?
Roch: I think the term works, sure. Every company's different but I would say there's some unifying themes. I think sort of unsurprisingly my experience in some aspects sort of mirrors what Darren was just talking about. When you're just starting out a lot of the focus, I have found, is on the tech that has caused you to want to start a company and that solves the problem you've identified in the marketplace. So it tends to be, I think, a more inward looking. You've got this idea. You've got this product. How do you protect it? How do you move forward? Basically how do you survive which I think was actually what Darren said. Not so much, or a little less, what's everybody else doing and how is that supposed to impact my strategy? Of course it's relevant but in terms of sort of a hierarchy of needs it's let's protect what I've got first before I start looking to see what everyone else has done. That's typical. It's not necessarily ideal. I would say, particularly in the Cleantech sector, I have found a lot of times, I would say more in Cleantech than other sectors come around of investment, often an investor, whether they be a strategic investor, I mean we've done deals where it's an energy company in Alberta looking to diversify its portfolio or whether it's a VC or somebody else where they will say, "We actually do want to know what work you've done." looking at your competitors because it does tend to be a space where if there is an IP issue law suits can happen. They're big capital assets with established players, a lot of times, that tend to not be afraid of litigation. With that one sort of Cleantech caveat, which sometimes people will then rush and say, "Now we've got to do these third party searches." I'd say the culture typically is let's focus on what we've got, little more inward looking, and go to market as opposed to what everyone else is doing, with an emphasis on cashflow and survival. Like Darren said.
Cameron: Putting myself in the mind of an operator right now, and I'm looking to go out and do a raise, I'm attracting talent, I think IP is interesting in that various times in the last 10 years, if you talk to VCs it's really top of mind. You have to have unique differentiated IP. Other times it's more of a go to market strategy. Do you feel like there's a different in Cleantech versus the rest of the tech world, if you can generalize that way, that you need a little more defined IP strategy in Cleantech than the rest of the tech ecosystem?
Roch: Yeah, I think there is a difference. I think the difference is, I alluded to it a minute ago, it's that a lot of Cleantech innovation occurs, I would say, up the patent bailiwick. You've got a lot of time tangible equipment so if a competitor copies you, you could actually see that the equipment is being sold. It makes detecting third party infringement a little easier. You take that equipment, you export it to a bunch of different markets, again that is something that the patent system was designed in mind, and also the equipment costs a lot. There's a big capital cost usually. Big R&D cost so that tends to be an area where people protect that innovation with patents and that can lead to litigation. I think contrast that with other hot sectors. If you've got a pure software play you've got naturally other IP rights that can protect that. For example, you've got copyright that arises automatically. You might be able to keep all your codes secret, which you can't do if you've got a piece of equipment and you're going to sell it on the market, and subject for a different presentation, you've got a whole mess of confusing law, sometimes, when it comes to software patents that really doesn't apply to traditional tangible equipment. I think Cleantech is, generally speaking, more of the traditional patent bailiwick then some other tech spaces. One other thing that is kind of interesting is that the last time we had a gigantic world wide recession was around 08/09 and what was interesting then was I found in the IP space there was a lot like we see now, government funding to the Cleantech sector, and for several years after that last recession you saw a big spike in Cleantech R&D and a corresponding increase basically across many Cleantech sub-sectors in patent filing activities. I think we're kind of seeing that again and I think that goes to how Cleantech is a little different than some other tech sectors.
Cameron: Okay. How does that strategy change after raising capital? I know that is a broad question but you're working with a lot of startups. They bring in a strategic partner. Perhaps some context you could provide there on how IP strategy will inevitably change or things to look for. Is the mentality after raising capital any different in your experience as related to IP?
Roch: I think so. I think it's different in that everything can be different, culturally, after raising some money and when you're scaling up by hiring a lot of people. So what does that imply? It means number one, there's more work. So before pre-scaling, let's say you have your core idea, you're an entrepreneur, you're a very small, closely held company, you don't really have to decide what idea are we going to protect. You've got your core group that inspired you to start the company. Then you've got a lot of funding, and you expand your engineering team, and now you've suddenly got 3, 4, 5, 6, 10, 15 different potential ideas to protect. Sure, you can protect everything the same way but that's a lot of time, a lot of money that may not meet your commercial goals in the most efficient way. So that is where, as opposed to I guess being mainly inward looking, a lot of times people will start looking outwardly and say, "What are our competitors doing? Where are they filing? If we pursue that space are we going to walk into a patent minefield where, yeah, we could try to protect our own tech but it's going to be really hard. Look what other people have done, and look at all the potential risk we expose ourselves to, but if we have a choice of 3 or 4 different areas to wade into maybe we go into the area that is less densely filled with our competitor's IP rights." So I think, one, there can be a shift in focus from primarily internal to yes, still internal but much more complimented by understanding of what your competitors are doing. Then there's also just more of that freedom to operate risk mitigation I talked about. So where you're not just looking to protect your own innovations but you're looking to avoid other people's patents. I think practically once you scale up the risk gets higher because you're a bigger target. You get press. People know you have money. You start taking their customers. You start earning market share. That's when you get attention, good and bad, and that's where freedom to operate and knowledge of what other people are doing so you can avoid their patents before you get a nasty letter, can be a helpful thing and represents a bit of a cultural shift.
Cameron: Okay. With the assumption that I'm going to phone you anyway, Roch, on my IP work. Okay, let's start there.
Roch: Good assumption. Yes.
Cameron: Okay. And that's the end of the seminar. No. When is the right time to phone you? When do you want to be called when the stars align and when a company is able to be on their front foot versus on their back foot here? I'm curious if you could share with this group, is it ever to early to get your IP strategy dialed in?
Roch: I'd err on the side of earlier than later only because you can kind of shoot yourself in the foot, if you err on the side of later. I mean, early on the big risk is with public disclosure because if you publicly disclose your idea before you patent it, assuming you want to patent it, you can shoot yourself in the foot and your basically can't get rights in most places. You could still get them in Canada and the US but other very large Cleantech markets, like all of Europe, China, for example, you can't get protection there anymore. What I tell clients is, "Look. You may not want to protect there. It may be okay but make the decision in advance. Don't wake up one day and find that the decision has been made for you and you have to justify to an investor, after the fact, that in fact it was the right decision." So, I think before you start going to telling people to try to raise money, or pitching a whole bunch of different customers, or going to conferences and pitching your ideas, that's where you want sort of advice as to what do you have and what's the most valuable, what are your best chances to protect it and can we protect it now before you go do things that you may regret after.
Cameron: Yeah. That's great. My concept when I was running my own companies were that to scale successfully, I had enough capital, I had talent and some good tech I was ready to go. I think that for all of the operators out there, actually for all us, you quickly realize after that that there's 50 things you need to know how to do, that you need beyond just those four. I guess, Jeanette, for you what are some of the other challenges you've seen companies experience when they move from startup to scale up?
Jeanette: For sure. Good question. I think the companies always think it's money and everyone else looking in thinks there's money out there if, again, you can just really show that you have the right team, value, prop business model and competitive advantage to compete. And, of course, that's now surrounded by things like strong customer discovery, a very clear understanding of the problem that you're going to solve and the value of that problem. Money will certainly come. Some of the challenges that we've seen with scale up, it really depends. Cleantech now is so broad. There's a lot of talent out there but we hear things like it's still hard to find the right engineers that have the right experience to dive in and get started quickly. These companies that are growing they are often, it's new, and so it does a lot of training and education that has to go. The same thing with the executive level. We've seen from some of the larger companies here they're importing CFOs and Chief Revenue Officers from other regions. I think there's an opportunity for us as a Province to pull together more scale up talent.
Cameron: Right.
Jeanette: A few other things, we find when money comes in they start to let the shiny objects syndrome get a little, they think they've got a little bit of money so perhaps their focus wavers a little bit and we really just say, "Really double down and understand your core competency and perhaps still continue to reflect on what you can be outsourcing." Of course that assumes that your IP and agreements can all be negotiated to support sort of that strategy. Understanding scale up gaps. It's okay to not know everything and be vulnerable and admit that and reach out for help. That's sort of where our growth program comes in where it's very flexible and customized to the company's specific needs in the specific sector. Early stage you can use more generic consultants and things like that but as you grow it needs to get more refined. You want to scale quickly so there's again not that learning curve. Then always just focus on the deliverables. When you raise money you raise it to execute on a specific milestone plan. Stay focused on that. Continue to communicate with your investors, if that's evolving and changing, so that when you need your next round of funding they're not wondering what you've been doing and if it's aligned with their expectations, over the previous funding cycles. Those are some takeaways that I've drafted here.
Cameron: I would imagine you see, I mean Foresight sees so many companies in this space, and I think there's something really contextual here, really interesting about, you know, specific to Cleantech. Are there any missteps that you've seen that are specific to this sector perhaps, or best practices you think are useful for companies to model as they hit that point where they think, "Aha! We've raised the money. We've done it." and you're thinking, "Uh-oh! I've seen this before."
Jeanette: Perhaps over estimating the pace that policy and domestic industry might adopt. Sometimes we've seen that. I mean I'm in a bit of a Cleantech 2.0 cycle. I am a zero entrepreneur. I started my first Cleantech company, (sorry, I've got this puppy and I know she's barking), I started my first Cleantech company back in 2005 and that's when sort of the whole solid state lighting transition was happening with lighting. So we were waiting on policy to really drive demand and I just think it's really important that when you're scaling your focused on paying customers and their needs and don't assume that some magic policy is going to come into play in a short period of time. I see Darren nodding so hopefully he agrees.
Cameron: Darren, I mean, this is particularly relevant for you. Often, in my experience, everyone's heads down, getting to that point that you have that big moment in time and then afterwards it's a really tricky point because there's a lot of everyone sort of takes a step back, and maybe has a different point of view on what going forward and what scale really should look like now that you cross that finish line. Were there any unexpected challenges you've experienced post-IPO?
Darren: It's interesting. I'll just step back before that. So when you have no cash it forces you to be laser focused on your core competencies. You only have so much money to go around so you focus really on where you can create the most value, and leveraging on what Jeanette said about this when you have subsidies and all these things, regardless of whether or not you need them, if you talk about subsidies to investors it makes them nervous. Because then they think that this business plan is predicated on government's moving. That's never a good position. Even if it doesn't happen at least from a cultural mindset the management is saying we're going to make a go of this business based on it's market economics. It may take us 5 years but we're not relying the government to move because it might take 10 years for them to move. So when you're looking at industries, like hydrogen for example, looking at what's going on in China and Europe where you're seeing stuff that's actually happening. Where you're banning diesel engines in city centers. That's already done. Then you can make a move into those kind of various markets with support. So post-IPO for us, the real learnings that we're going through now as a company is, again, the kind of shiny object growth syndrome is you now have all this money, because you've never been fully funded before, and everyone is trying to add value. So all the employees have great ideas and they're thinking about, "Okay, we should do this, this and the other thing." I think it's important, regardless of what the real answer is, is to always kind of have milestones and goals in mind about these are the metrics we need to see before we deploy this 5 million. So we need to see this market move, this size of the market, things like that move, before we do these things and you may set it down on a monthly basis or quarterly basis and then always going back and measure, because things will change quickly, but at least being able to go back and reflect on those to say, "Hey. We made a wrong decision here. We advanced this program too quickly because these milestones didn't happen in the macro market." Because there's things that we can control as a company and as an industry and there's things that you can't. You can't move macro markets. So as we see the likes of Chevron and Exxon moving into energy transitioning it gives you more comfort to say, "Okay. Maybe the hydrogen market is 18 months away instead of 5 years away like it was a few years ago."
Cameron: Especially now when we're mostly working from remote and you have this sort of isolation, culturally, you touched on that earlier and mentioned it, I want to come back to that for a sec. Post-raise, when people have all of these different points of view, how have you been able to keep your culture tight? Are there any lessons learned or best practices sort of keeping people on task as they're dealing with a really challenging time at home, working remote, or keeping people aligned on that laser focus?
Darren: Yeah, so we closed our second traunch of funding with Cummins March the 16, the Monday, just as everything was shutting down and it was a great feeling being able to get everyone on a teams call that Tuesday morning and saying, "Hey, we got our 10 million in. We're good for 12 to 24 months and you're all taken care of." I think it bound everyone together and so there was that cultural bit of hey we're in for the long haul now. So just trying to reinforce that. So we went through a mission vision values exercise in the summer of 2020 and it was quite good in that everyone had a chance to participate and they all feel part of the company. It's not a top down effect. Whether or not the mission vision values was right, just having everyone being able to participate in that, I think drives that cultural bit again. So as things go forward and there's nuances in the market and there's people get scared because of COVID, is the market going to turndown? They're there for the right reasons.
Cameron: Yeah, that's great. It's something we've all been dealing with is that sense of isolation or connection which can be really challenging. Roch, post-raise, post-IPO, post-liquidity I guess, are there any things you think that leadership or management would find surprising, as it relates to IP challenges as a company evolves and gets larger?
Roch: One I think I've referenced a little earlier, sort of the unpleasant surprise of maybe capturing a competitor's attention with being high profile, and making it known that you are funded and ready to capture their business. So that can be an unpleasant surprise but the other I think ties closely to what Darren was just talking about, culture. I think you've mentioned you've got a lot of new talent. Everybody's looking to add value. Everybody has these ideas they want to contribute and that is a transition. If you're small, everybody knows each other. You don't have that many employees. A lot of stuff on the IP side can happen organically. Do you have a new idea you want to protect? Yes. Well, everybody knows it because you've got the one idea you're working on and maybe the company was started with a closely connected group of people. So you sort of, without even knowing it, have a lot of natural, organic communication. Everybody's all on the same page. But then you hire a lot of people with all these different ideas, how do you know what everybody is working on? If people leave are they going to take all their knowledge with them? Or is there going to be some institutional knowledge retained in the company, and if so, how do you actually document that? Even if you can sort of harvest all those ideas, which is a process in and of itself, how do you decide how to proceed with that? What's more important than the other? Everybody has limited resources, post-raise or not. If not money then definitely time. So what do you do with 15, 20 ideas? You're going to maybe patent 5. Keep the other 15 a trade secret. How do you decide which 5 to patent? How do you protect and retain the knowledge for the other 15? That is typically done when you hit a certain size. Some kind of formal process because there's just not another way to do it when you're hiring a lot of people and you grow. I find that I think a lot of people are just surprised that it is, or can be, if not another fulltime job at least another parttime job for someone who's brought on to manage that innovation internally. Because there is a lot there in terms of keeping everybody on the same page, educating everybody so they have the same sort of culture, and having some kind of process to capture and manage all this new information that you're going to have to manage because it's tough to do organically when you're a lot bigger.
Cameron: I'm going to put you on the spot quickly here, Roch, just because I promised I would earlier.
Roch: Okay. A little inside baseball, but go for it.
Cameron: One of the things that I've been curious about is that we talk about these global trends, whether it's ESG or net zero, that's driving interactivity, M&A, I'm also cognizant of the fact that regionally there's different trends, macro or micro trends, that are driving behaviour. Is there anything that you're seeing with the startups that you're working with that certain types of tech, or certain types of IP, is particularly of interest in ways that perhaps Canadians were not cognizant of yet? Do you know what I mean? Like, you know, trends in China are driving M&A activity in specific things or in Germany or across the EU. Are you seeing anything that Canadian operators should be aware of?
Roch: That's a good question. I do think despite the press that China has occupied recently that they are still a very large commercial, partner might not be the right word, but entity market. The ties do run deep and despite a lot of the friction there I think there is still a lot of motivation and market pressure related to China that drives a lot of R&D here. I might see a disproportionate amount of that because of course with China there are specific IP issues. They are still, when it comes to IP, they don't have a great reputation but they are actually doing a pretty good job making their systems better. That is driven out of self-interest. As they industrialize they actually file more patent applications than other country on the planet. At least internally and even externally they're up there now. So they're changing their own systems to be more aligned with their own self-interests which also benefits our clients. That is probably the biggest one that comes to mind. I'd say maybe the other one is, well, I would just say the cross sector emphasis on Cleantech. By that I mean, I'll just sort of harken back to what Jeanette mentioned earlier, intellectual asset collective and also something I said a little earlier about how it's 12, 15 years ago the last gigantic recession, there was a lot of government priming. I think last time it was general priming of the economy. Maybe a bit of a Cleantech focus but this time I think there are a couple of things that are different. Maybe they're related to the same topic but one, the fact where we are economically is because of an invisible international threat that is also what climate change is, and a lot of different environmental problems are, I think that has, whether we know it or not, been an extra motivator towards driving a lot of this Cleantech adoption. So I think we see it with a big emphasis on hydrogen, in terms of a clean fuel source, which I'm sure Darren can, or has, and can talk about. We see of course more of that here because we've got, historically in BC, very big hydrogen based sector. That's also gone to I think very specific government action. Like the IAC, the Intellectual Asset Collective, which I think is telling to me that they started, I think their mandates a little broader than this now, but they started by saying, "We're going to work on things like patent pools and freedom to operate." because like I said, I think that is something that is of particular concern to scale up companies because you start to get that attention. So I think there is sort of more targeted Cleantech focus. Both because of the sort of the zeitgeist we're in and also reflected in specific government action that I don't think was here the last time we went through some economic storms like this.
Cameron: Yeah, it does feel different. Jeanette, same thing, I want to put just a quick question to you. Roch, that was great by the way, well done. I've had the privilege of going through an accelerator in the past and understand what an opportunity it is and I am super excited that out on the West Coast there is Foresight doing a lot of heavy lifting here. All things going well, in 5 years, in 3 years, what is the role of Foresight or accelerators in helping really push this momentum that we see today? What kind of function can it play?
Jeanette: Wow. That's a great question. Thankfully we have our creator strategic plan that is going to give me some good context to build on. But by 2030 we hope that Canada has over 2 million clean jobs and how do we get there? It's again through scaling up ventures that are solving the climate crisis. It's helping industry sort of evolve and develop its culture to embrace innovation and the path to sustainability which in turn leads to a path to more competitiveness. We're seeing lots of different conversations come to light where capital is at the table. So is it government matching dollars? Is it private capital? So the role that Foresight plays in all of this is we want to be one of the recognized organizations that looks at acceleration from an ecosystem perspective. So bringing together the innovators with industry investors, government academia associations who all do incredible work, and hopefully through some collaborative efforts and initiatives that breakdown silos and allow us to leverage resources, optimize resources, optimize programming. Not standardized. I don't want to use the word because it's a constant evolution. The needs and the sectors that we're going after is constantly evolving. So how can we be a platform and a support engine for all of these stakeholders? Through meaningful, transactional conversations, programs and initiatives. So that's the role we hope to play. As we move East everything is done grassroots with partners on the ground. In Ontario we worked with the Centre for Social Innovation on their climate ventures. Now we're going to be exploring a sort of challenge opportunity for collaboration there. With our partners in Quebec we're looking at taking what we've done successfully with scale up here and talking about what they're doing that's working, what we're doing that's working, and sharing those best practices. I imagine even in the next several months here one of our projects that we've been working on will come to life. It's called Cleantech Forward. It's a national net zero innovation marketplace that allows us to learn from all the challenges, and all the adoption that's happening with a limited group of industry and government buyers, and allowing these groups that are perhaps a little more laggard; they don't have the expertise, they don't have the capacity because everyone's fully tapped out. So how can we allow them to learn what's already happened, and just move into the more adoption phase as opposed to having to start fresh every time, because there's a lot of transferables between regions and sectors that we can exploit for the benefit of Canada's net zero transmission.
Cameron: I'm cognizant of time so I'm going to hopefully, if I can ask you a very huge question that you can answer, and give you not enough time to answer it, one of the things that I've always been frustrated by as a Canadian tech operator was that Canada never really felt like, it wasn't like primary market. I was usually South. I was looking somewhere else, and if I could survive long enough and do that effectively, then Canada became a great hopefully a secondary market. That's just my experience. One of the things that I really feel passionate about as it relates to Cleantech is procurement within Canada. You've got this really vibrant ecosystem, do you feel like the various levels of government are a viable procurement opportunity that companies should focus on? I know what it's like trying to get through government RFP and run a startup at the same time. You feel like it's this chicken and egg. I'm just curious if you think that is a real opportunity for startups today in Cleantech?
Jeanette: I think that different governments in different regions are at least getting more clear on what their areas of interest and priorities will be. So whether it's electrification infrastructure. Whether it's built environment. Retrofits. At least those conversations are happening so that the innovation community can better understand if they should invest their limited time and resources into trying to tackle that customer. Now that's certainly a bottom up approach. Top down there are some pretty significant policy pressures coming in. You know we've put in a pretty bold carbon tax mandate and so these things, whether you like it or not, they do put pressure on to drive the pace of adoption. We're certainly hopeful. That's actually what this Cleantech Forward, sort of net zero marketplace, is all about. It's definitely domestic focused and there's a lot of elements of de-risking so that decision makers can just be more comfortable and understand what it takes to work with the innovation committee. What does a pilot project look like? How is that successful? What other players need to come in and how can we continue to learn best practices every time the marketplace has a successful sort of transaction component to it? So I probably could ramble ... but it's definitely I think ... in the right direction.
Cameron: I know that's a big one.
Jeanette: And I know that the intent is there. It's just now, okay, moving beyond intent how do you get people to act and who pays for that?
Cameron: Got it. We are rapidly running short on time here and I wanted to get to a final question for all of you which is really, again back to the more macro level. Darren, I know it's hard to look outside your own operations when you're doing as much as you are right now, but what is your take and your outlook for the Cleantech sector in BC and Canada over the next 12 months?
Darren: Yeah, I mean, I'm hugely bullish on it for sure. Just seeing the macro trends, the amount of capital. So Chevron a couple of weeks ago escalated their investment into hydrogen production from 3 billion to 10. So these kinds of things you're seeing a lot more and I think what you're looking at is when the economics are there, so total cost of ownership in any, whether it be wind, solar, whatever, hydrogen is there against incumbents so they can see a pathway to getting where you're going to be making more money, and really, you need to always follow the money. I think when you're talking about government procurement programs, that was always the inherent challenge is that you're not going to get fired for saying yes to Xerox, where you've got new competing technologies coming in and there's always that risk factor. So you've got to be able to get the economics there and so what we're trying to work through is a lot is coming up with a 5 year purchasing plan with customers. So this year you might not make the same money but in year 2 and year 3 you can see that process going down. We're in the limit. You're going to be saving maintenance costs, whatever it happens to be, and then the CO2 tax, all those things are additive. So they're not part of the economics behind it. I think you're seeing more and more customers looking at that and so I agree with Jeanette. It's difficult to have a bottoms up where the government's procuring stuff because there's always a risk in that. Some companies are going to do well and have good products. Others won't. But this top down, in terms of like banning diesel engines and doing these types of things that forces customers into making better choices, can be hugely helpful. We've seen it in the electric vehicle scale up phase. It started and then when they scale up and they say, "Okay. Well electric vehicles work well here by hydrogen will work on this segment." and let the market figure that out. It's difficult for the government to figure that out but I think just the macro sense right now is that the Cleantech movement is here and seeing what's happened, and this is kind of I think as a Canadian, how many great tech companies we've developed over the last 20 years and then how many of them have been crushed by China? Because they go through in a peer scale up and I think one of the things that we are always sensitive to is when you're scaling up is you've got to scale. You can't wait because if you wait you're going to be left behind so get out and deploy your capital and move aggressively. You know there's a number of Cleantech companies here in Vancouver that had wind power, solar power and they're all kind of gone none because just they've got overtaken. They weren't moving fast enough. I think we have to be, generally as Canadians we're a little bit more passive if you will, we have to be more aggressive in our businesses.
Cameron: Roch, same question to you. What's your take? What's the outlook for Cleantech going forward?
Roch: I think it's good. I mean, like Darren, I'm bullish. For a few reasons. One, just given where we are right now and the momentum to today, even if everything turned on a dime, I think the existing momentum in the short to medium term would still be promising. I don't think everything. I don't think all the reasons why there has been success to date will stop, but even if that sort of macro economic environment changed, there's so much momentum now that I think in the short to medium term there would still be a lot of activity and success. But beyond that I think, like Darren said on a macro scale and like we've talked about earlier this hour, there is every reason for success to continue. People sort of feel a lot of the issues underlying Cleantech more. There's going to be governments looking to keep economies primed, also to meet their public commitments, but over and above that the free market is demanding a lot of these solutions. The question to me, that I think is a pretty safe bet, the question I have in my mind and maybe I can phrase it as a hope, is I hope we can as a country, and particularly in BC, take advantage of some of the things that can distinguish us internationally. Maybe Jeanette can comment about, she already did comment a bit earlier about BC and Alberta, historically there has been an interesting nexus there in terms of the Provinces working together and maybe in funding or technology required to make an energy sector cleaner and more efficient, coming from anywhere in the country. Darren mentioned electrification. Well there are only a handful of places, really, in the world where we have so much hydro power that electric vehicles in fact are cleaner. We happen to be one of those places. So can we leverage that sort of natural damage we have to distinguish us internationally? Like just Jeanette just said, government procurement. There's always going to be risk there. You never want to only rely on it but other economies, particularly some of the Asian ones, have had a lot of success leveraging that advantage better than we have. So that to me is the question mark. Not so much will there be success particularly in the short to medium term? I think it's a pretty safe bet the answer's going to be yes but I'm really interested in how the country does in taking advantage of those differentiators that we will actively have to take advantage of if we want to distinguish ourselves internationally.
Cameron: Yeah, I totally agree. Jeanette, perhaps you could wrap this up for us here. What's your take?
Jeanette: I think at the end of the day, front and center, is a global climate transition. It's not only an opportunity for us to do what's right for Canadians and for British Columbians, it's do what's right for economically. Quite frankly, our global competitiveness will rely on us domestically making these moves and we're seeing a lot of thought leadership. We're seeing a lot of groups come together, even industries collaborating more than ever to breakdown, again, those silos, to look at innovation more holistically, to look at technology roadmaps and net zero transmission roadmaps and things like that. People are in it and it's become just part of business conversations at all levels. There's always going to be laggards and things like that but how do you go from setting these goals and saying this is what we're going to do to action, and again, how can government best support all of these initiatives, from our angle is definitely an important reflection.
Cameron: I think when you have talented skilled operators, you've got an advisory ecosystem on the capital side, the legal side, that can support and play a function, accelerators and public sector, at least it gives us all of the components to take our shot. I feel really optimistic and I do want to thank all of you for your points of view and for the conversation. I think we could have gone for about 4 hours. A lot to talk about but thank you all very much for the conversation today.
Jeanette: And the ventures are optimistic too. In our recent national survey, Canadian Cleantech ventures are very optimistic and I think we need to build on that and put that front and center. Darren, ... all your work at Loop. It's been amazing to follow along.
Darren: It's all our engineers. The passionate people that have designed this stuff and, again, I think being on the right side of history is always a good place to be.
Cameron: Well said. Thanks everybody. Thanks to all the participants for joining us today. We really appreciate it.