Marc Gunther on Google Ventures, Detroit’s Newspapers, Shai Agassi and Li Lu (Part 2) 6


Marc’s appearance on Charlie Rose back in 2006

This is the second part of our conversation with Marc Gunther, which took place on Tuesday. Part 1 can be found here.

RaceTalk: Marc, I noticed one company speaking at Brainstorm: Green is Better Place. I also caught that you’ve written about them recently. They’ve had a lot of media attention and I was wondering if you could try explaining what it is about them that makes them so interesting. Especially with so many other start-ups in the green space competing for the same media attention.

Marc Gunther: They have a charismatic CEO ,who’s a great salesman for the company in Shai Agassi. They also have a mass model. So I’m more interested in Better Place than I am in, say Tesla. If you believe Shai he’s going to put cars on the road for a lower price comparable to today’s cars, maybe even less. Also his model is – if you’re interested in business – really interesting; because he wants to not only make the biggest change ever since the invention of the combustion engine or air conditioning, he also wants to totally rewrite the model of the automobile industry. Making it look like a cell phone model, where you’re basically not exactly owning the car battery – you’re kind of leasing it, paying for minutes. It’s a little hard to explain. He would do it much better than I would. But, it’s a very intriguing idea. I’m also really interested in other electric car companies, but more those that have the ability to scale up. I’m really interested in the Chinese company BYD. We’re actually going to have a major shareholder of BYD at the conference. A guy named Li Lu who is absolutely fascinating. Li Lu was one of the leaders of the Tienanmen square uprising twenty years ago this June, I think it was. Came to the US for school, became a venture capitalist and a private equity investor, and ended up being the guy who connected Warren Buffett to BYD. He hasn’t really spoken in public before, so he’s going to be a great addition to the event.

RT: They’re the battery behind One Laptop per Child.

MG: They are. That’s right.

RT: So I know we talked about Bill ford. I was going to get your thoughts around Detroit. Going way back, you worked at the Detroit News and Detroit Free Press.

MG:
But I didn’t know anything about cars then, and I still don’t know anything about cars.

RT: My question is around Detroit’s newspapers – do you have thoughts around the Detroit Free Press ending deliveries on Mondays, Tuesdays, and Wednesdays?

MG: I don’t think it’s a good sign when any company tells consumers what day they can get its product. I mean it’s just not a good thing. Imagine if, pick a company, HP said we’re only going to sell you our computers on Tuesdays, Thursdays, and Saturdays because that’s when we sell a lot of them and we’re just going to shut down the other days of the week.

RT: Richard Perez-Pena of the New York Times had a good piece today basically saying that there were no newspapers delivered yesterday in Detroit on one of the biggest news days in the city’s history.

MG: If you say its kind of a transition to an all-digital model then you could think about what it means. But it clearly can’t be a – it doesn’t work as a long-term model. You’ve still got huge infrastructure, presses, all that kind of stuff. If anything, the model at work is the model where newspapers print their own paper and print the national edition of the Wall Street Journal and then they print some competitor’s publication. You know, you can’t – it can’t work long-term. But maybe it’s a way to get people used to the idea of reading online.

RT: Finally I caught that Google officially launched their VC ARM today with Google Ventures.

MG: That’s really interesting – isn’t it?

RT: Yes,  they’ve pledged to make this their new venture arm for some of their Google.org interests and it sounds like they’re planning to invest at least 100 million in green tech and clean tech over this year. I was wondering what your thoughts around that are? With a lack of current exit strategies, VC’s strapped, is this going to be a big deal for the clean tech and green tech sector?

MG: I don’t think it’s financially a huge deal. It’s not a large amount of money and I don’t think they said all of it would go to clean tech. But it will be a part of that. The value that Google has is when they invest in something, they automatically make it cool because they’re just such a cool company. So, interestingly, in my blog, a week or so ago, I ran a story about Bill Gross’ car company called Aptera and the headline on it was “Google’s favorite car company”. The traffic was huge. If I said “Here’s Aptera”, the traffic would have been very small. So the value for Google – they have fascinating investments. They’re in this company call Makani Power, which is sort of some kind of combination of kite and wind power company.

RT: Yeah, high altitude wind power.

MG: Yeah, that’s what I guess they call it. When Google invested in geothermal that personally got me interested in geothermal so I think their cache is really worth a lot and that’s why Google interests me.

RT: So like you said, it could potentially create more buzz around these green tech projects and a bigger umbrella for them.

MG: Yea and also it’s possible if Google’s smart, that they’ll do what other VCs do and connect these companies up with one another. I’m sure they will do that. I mean Google’s energy story I think is one of the really interesting kind of under-reported stories out there. I actually did pitch it a couple of times to Fortune, and couldn’t quite get them to go for it. But I would really like to know how and why that’s happening and how they’re doing it all.

RT: I agree. Thanks for your time Marc.


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