On Startups, ClimateTech and Plug ’n’ Play ESG
A Conversation with Nolan Gray, Entrepreneur and Investor
Serial entrepreneur Nolan Gray, selected as Forbes 30 under 30 in Europe 2020, is co-founder and former Chief Commercial Officer of Svea Solar, helping to transform a Swedish solar panel installer into one of Europe’s leading digital energy companies. Now 30, he devotes himself to entrepreneurial and impact investment activities primarily in the ClimateTech startup space. Reach him at nolan@croftdown.com or LinkedIn.
Q. Nolan, you’ve been a leader of two successful SaaS startups, and mentored, advised, or invested in many more. What excites you about the startup space?
Nolan: Simple: You get to create things that you’re passionate about. You get to build them and do things with them. Sometimes you build in a textbook way, sometimes in more scrappy ways. And you’re doing it with people you know and care about. It’s a cliché, but founders often feel they’re creating a family. In some ways, they really are.
Founders love to inspire people to be as passionate as they are in creating something worthy of being in the world. That’s when it’s the best. I learned how to use SaaS – software as a service – to do what I was passionate about. Something that was going to make an impact, but also a profit. Making a profit was not just important because I wanted a financial return for myself, but also to prove that you can run a profitable business that is good for the planet. You can show people that it can be done, and how to do it. What got you to focus on the ClimateTech niche?
I realized that to make an impact on the planet, it needs to be profitable. Passion and profit only together can save the planet. Whole new types of businesses will arise to meet sustainability needs. It’s an amazingly fast-growing, exciting and important space.
ClimateTech pulls together my passion for nature, my concerns about the direction of the planet and my natural attraction to tech as the best way to make an impact.
Do you see yourself at this stage as more of an entrepreneur or an investor, or a little of both?
It was never my intention to be an investor. Opportunities just came along that were too good to pass up. And I had the right skill sets to contribute to the founding teams, particularly after the round. I’ve been on both sides of the table. There’s a lot to figure out and get done at speed, particularly around due diligence.
So I’m an entrepreneur who likes to make good investments and meet great founders. What is the single most important tip you would give to starting entrepreneurs? Make sure there's a market for what you’re making. It’s nice to do some good and help a few people but it’s another thing entirely to change things at scale. Make sure your TAM (total addressable market) is large. If possible, huge. At the same time, ClimateTech entrepreneurs need to know when going in that it’s a complex space with a mess of policies and subsidies. That knowledge can either accelerate your business or paralyze it. You can’t become a prisoner of rules and regulations, but someone senior needs to stay up to date with all those changes, learning how to leverage them. What should ClimateTech investors be looking for and thinking about? First, make sure that you’re not just getting sold some sweet story that sounds good and would “look good”. Make sure there's a market there for it. Second, look at the founders, their track records, and the diversity of the team’s experiences and skills.
Third, you’ll need patience. Not infinite patience, but be prepared for setbacks and unexpected developments. So investors should expect that it’s not going to be a quick straight shot and accept that risk.
Where do you see the opportunities in ESG reporting?
There’s a huge problem with so many competing standards and frameworks. Now it’s like everyone doing their balance sheets differently or reporting their taxes on different forms and according to different currencies.
There’s a need for some type of external harmonization and orchestration, or one player will emerge as dominant, set the rules, and the rest will follow. The field is always going to blend management consulting and software. Will there emerge a TurboTax of ESG reporting? Maybe. But it will be a while before the Wild West is tamed.
The trend will be shaped by big data and AI, but, we can hope, also by smart, devoted, compassionate humans. To bring awareness of environmental, social, and civic issues, ESG should become a simpler, clearer, more manageable and understandable process, democratized, and disintermediated.
ESG needs to reach and tune in to the needs of businesses, both small and large, not just the wealthy and powerful, but the broad market of consumers and citizens. ESG will never be plug-and-play, but that should be the driving direction.
Do you have a story to tell about how you and your colleagues are working for a more sustainable world? At The Global Imprint, we would love to hear about it. Reach out and let’s discuss your work and how ESG reporting can help transform your vision and hard work into impactful real-world results.