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Robert Metcalfe is against energy conservation.
The founder of network equipment maker 3Com Corp., which is in the process of closing its $2.7 billion acquisition by Hewlett-Packard Co., Metcalfe is among a crowd of venture capital investors trying to figure out how sustainable energy technology will generate the big returns they’re used to getting from other technology sectors.
Metcalfe, a general partner at Polaris Venture Partners, followed his 1990 retirement from 3Com with a career as an Internet pundit and online publisher that lasted through the decade, including from 1992 to 1995 as CEO of IDG’s InfoWorld Publishing Co. Beginning in 2001, he joined Polaris Venture Partners in Waltham.
Metcalfe, a networking expert operating in a cleantech landscape, is blunt about how he is changing his thesis to suit a new area of investment: he isn’t.
“When you’re a hammer everything looks like a nail,” he said. “I’m a networking guy so everything looks like a network to me.”
Metcalfe believes the lessons learned building the Internet can be applied to the world’s energy problems. Hence the controversial stance on consumption.
“If the Internet is a guide, when we’re done solving energy we won’t be using less of it, for Pete’s sake,” he said. “It will be available in squanderable abundance. That’s a different mind-set and it’s a lesson from the Internet.”
Networking isn’t the only goad Metcalfe’s been using to try to change people’s thinking on energy technology. “Green” has been politicized, he says, and its anti-business stigma is an impediment. Rather than “green tech,” or “cleantech,” Metcalfe’s been beating a drum for adoption of the term, “enertech."
In spite of his iconoclasm on branding and ideology, portfolio companies that count him as a board member look to Metcalfe as the voice of experience. “He really is sort of the sage business mind, and that’s the role he plays on the board,” said Frank van Mierlo, CEO at 1366 Technologies Inc.
The first thing 1366 did as a company was to sign a contract with MIT that conferred ownership of a portion of the company in exchange for a license to its core technology — a way to build more efficient solar-energy cells from silicon, spun out of the lab of MIT professor Emanuel Sachs.
The company could have exploited an ambiguity in the contract, creating its own employee equity pool before setting aside the university’s shares in the company. That would have diluted MIT’s ownership, and lined up Metcalfe, early employees and other investors for a bigger payday. However, Metcalfe insisted that 1366 not short change the university that generated its technology, van Mierlo recalls. The company decided to set aside MIT’s shares before creating its employee options pool.
“Bob was very adamant that it should be done that way,” van Mierlo said. “If there’s one thing certain about Bob it’s that he’s an honest-to-a-fault, straight-shooting kind of guy.”
In 1972, not long after leaving Harvard University with a doctorate in engineering, Metcalfe went to the Palo Alto, Calif., research center at Xerox Corp. Flush with cash and determined to spend it on research and development, Xerox had its engineers work on the first laser printers, early computers, bitmap displays, fonts and several other features now associated with the personal computer.
Metcalfe’s contribution was to co-invent the ethernet — a technology that formed the basis for 3Com’s founding in 1979.
Until that time, computer systems were built as a series of terminals connected to a central unit that controlled all the data and processes. At Xerox, Metcalfe’s job was to connect an early version of the personal computer to the Internet. He developed what he called an ether-centric system architecture, in which control was shared among a group of end-user machines.
Energy storage and generation must become distributed, Metcalfe professes, as data storage has become in an Internet-enabled global computing system. He’s on the board of Infinite Power Solutions, a Colorado company making microbatteries, and Polaris has invested in two other distributed storage startups: SustainX Inc., developing compressed-air energy storage in West Lebanon, N.H., and Sun Catalytix Corp., a Cambridge developer of water-splitting technology for storage.
Polaris Venture Partners is going out to raise its seventh fund in 2010, he said, and it will likely be smaller than the $1 billion sixth fund the firm closed in 2006.
“That’s a reflection of the market,” Metcalfe said. “There are many fewer (limited partner investors) and the ones that do exist have less money for venture.”
That may mean less money available for startups, but it won’t mean a slowdown in innovation, he said. “From my little perch here things look great. They always have.”
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