Leila Madrone founded Sunfolding in 2012 with an innovative idea — build a solar tracker using pneumatic “airbags” instead of motors and torque tubes. By 2015, the company was deploying the technology in a field test in Davis, California.
Over the next six years, Sunfolding iterated on the technology’s design, built out the supply chain, and tried to prove bankability. Then, in 2021, the company found themselves faced with a major decision: take on a utility scale solar project during a global pandemic, or pass.
In this episode, Lara Pierpoint talks to Leila about Sunfolding’s journey from breakthrough technology to shutdown, exploring the critical decisions that shaped the company’s path and ultimately led to SunFolding shutting down in 2023. Leila also shares the broader lessons for climate hardware startups navigating the complex intersection of innovation, manufacturing, and venture funding.
Credits: Hosted by Lara Pierpoint. Produced by Erin Hardick. Edited by Anne Bailey and Stephen Lacey. Original music and engineering by Sean Marquand. Stephen Lacey is our executive editor.
The Green Blueprint is a co-production of Latitude Media and Trellis Climate. Subscribe on Apple, Spotify, or anywhere you get podcasts.
Transcript
Tag: Latitude Media Podcast at the Frontier of Climate Technology.
Leila Madrone: When we were walking around the field, it was like going through a history Museum of Solar. There were panels from the eighties that were still producing power installations. There were all those crazy ideas, the Wild West ideas we had talked about all out there. You’d walk around and some people on our team had worked on some of them, and you’re hitting their heads being like, I can’t believe I built that. This is a really fun time just to be part of this, be in the middle of history with solar on that site and have ours be one of all these interesting designs out there. It was a good period to be trying something new.
Lara Pierpoint: That’s Leila Madrone. In 2015, she was running a solar tracker company that she founded called Sunfolding, and the clip you just heard, Leila was describing walking around the site of the company’s very first major field test of their technology. The site was a 300 kilowatt solar installation at PV Evolution Labs in Davis, California.
Leila Madrone: Someone at PV Evolution Labs who was overseeing that site at the time said, this is the kind of thing we want to do here. We want to show that there’s new technology. If you guys can get this stuff built, we can give you panels and we already have an offtaker agreement, so this can be a fully working site. You just have to get your trackers under those panels.
Lara Pierpoint: So this project was a major proof point for Sunfolding. Up until then, they’d only built a 10 kilowatt project that proved the technology worked. But this Davis project was the startup’s first effort at proving that the technology could scale,
Leila Madrone: And we tried to do all the things that a grownup company would do at the time, working with a real EPC, working with real manufacturers trying to build up our processes as much as we could so we would have some sort of foundation for scaling. But unfortunately, the project didn’t go as hoped at that scale. We were testing it at the actual product level, which was a field as opposed to the component level, which was the individual tracker itself. And so much about the field is how things interact and so much of the field is how things install, install ability and constructability. And we realized that we had to do a complete redesign.
Lara Pierpoint: The Davis project marked the start of Sunfolding’s eight year journey to prove that its solar tracker worked in the field while securing its supply chains and also convincing bankers that the technology worked. But that journey all came to an end in 2023 when Sunfolding announced it was shutting down for good. The solar market at that moment was booming. Hundreds of gigawatts were being installed each year, and the multi-billion dollar tracker market was flourishing alongside it. So why couldn’t Sunfolding make it work? I am Laura Pierpoint and this is the Green Blueprint, a show about the architects of the clean energy economy. We’ve already invented most of the solutions needed to decarbonize the global economy, but many of these technologies are not yet commercial and they need to get financed and built at scale. We don’t have decades to get them commercialized. We have years this week I talked with Leila Madrone, the founder and chief technology officer of Sunfolding about why the company shut down.
Leila Madrone: I think that the real issue for a lot of climate hardware, hard tech founders is how to get to a point where you can sell things that will pay for your company. It’s very simple.
Lara Pierpoint: Leila launched Sunfolding in 2012. By that time, she had spent years at a different startup working on a problem. Can a solar plant be built using lower cost highly manufacturable machines?
Leila Madrone: Solar in 2008 was really wild. No one knew what solar was going to look like, and I was working at the time because of my robotics background on the machines that move around at that time, giant lenses to capture the sun.
Lara Pierpoint: But the company was struggling to take off mostly because the cost of solar was too high, and after four years, Leila moved on.
Leila Madrone: So taking those learnings, I left that company and started the project that eventually became Sunfolding with the idea that how do you make the underlying machines that drive the solar plant low cost enough and manufacturable enough that this all pencils. Okay,
Lara Pierpoint: So talk about what was the basic idea behind Sunfolding? What was it that you created to accomplish all those objectives you laid out?
Leila Madrone: Yeah, so the basic idea was how do you take the physics of how a solar field works with high wind and all these things moving around all day long, a harsh environment, and then how do you apply high volume manufacturing to it?
Lara Pierpoint: In 2012, the solar tracker market was in its infancy and the most common approach was to use a motor to turn the panels. So one panel would be mounted to a steel rod which would connect to a motor, multiple panels
Leila Madrone: Would connect to a single motor. If you have a high volume manufacturing base system and you’re actuating on top of every post, you should be able to drastically lower the overall amount of steel in the system and you also should be able to drastically reduce the number of parts in your system. So sun folding had about three to four structural components compared to dozens of structural components that a traditional tracker would have.
Lara Pierpoint: Sunfolding’s actuator, which is the device that actually turns the panels moved using pneumatics, the technical term for using compressed error or gas to power a mechanical process.
Leila Madrone: So to imagine it take a pivot point and then either side of those pivot put an airbag, a very industrial airbag, and imagine that your solar panel’s on top, and as you change the pressure on either side of those airbags, the solar panel moves. But what we figured out that made it usable for solar was that we didn’t need a control system on every single one. Through this unique set of geometries, we were able to create a system where the ratio of the pressures made every one of these actuators point in the same direction.
Lara Pierpoint: Basically, Sunfolding’s trackers would move based on the pressure and the airbags underneath the panels. The pressure in the airbags was controlled by a system of tubing attached to the underside of the panels. That tubing was the same stuff used for air brakes and trucks.
Leila Madrone: Then the machines just when we were in sun folding the first few years started to become low cost enough that it started to pencil because when you’re following the sign, you’re going to get a lot more photons and you’re also going to get photons at the time of the day. You really need them because one of the problems with solar is you’re really peaky in the middle of the day, but when you add trackers, you’re almost flat over the course of the day. And this is a huge deal for building a new kind of grid based on solar.
Lara Pierpoint: So this is what Sunfolding was building when they pursued the 300 kilowatt project in Davis in 2015. And as we heard Leila explain earlier, the project revealed some flaws in the technology forcing a redesign that would become a common theme for the next few years as the company tried to keep pace with the declining cost of solar.
Leila Madrone: So when we started in solar, we know we can get to this cost and we can get to it in a certain amount of time, and we did and we were part of this amazing industry, the solar industry that keeps deciding it’s going to lower its costs much faster than anyone could ever predict. So that means we would get to our cars cost target and the industry would’ve already moved way far ahead of that. And so then you do your next iteration and you bring your costs down and the industry has moved even further down. And so in this particular industry, bringing up a new technology when it’s part of a new industry was both exhilarating and infuriating because the goalpost kept changing. Eventually
Lara Pierpoint: Sunfolding had to raise bigger dollars to prove the technology. The startup used a combination of seed funding from family and friends and various government grants, but to compete in the utility scale, solar market, Sunfolding needed venture capital and that made the stakes a lot bigger too. Before we get into the projects, let’s talk for a sec about the series A, because that was a really critical milestone for you guys, right? So you’ve built, as you say, these sort of smaller sub megawatt projects. Is that essentially what you took to go out and raise your series A and how much did you raise and how did you think about that as being the thing that would get you to the next step as a company?
Leila Madrone: Yeah, I would say venture capital was a really good match for us at that moment. And we had the background, we had six years of data behind us. We had had so many partnerships, we had so many third parties come in and help us with the technology and we had customers, we had some really big lois with big customers signed. We had revenue, and I think that’s kind of the right place you want to be as a company to raise series A, and it was what we needed. There weren’t other buckets of capital that were going to pay for us to deploy customer projects.
Lara Pierpoint: And so is the way to think about it that so you’re selling these projects to customers, to your EPCs, but that’s probably not fully covering your costs. And so as you’re moving into this scaling moment, was the VC funding really to build up your supply chain, actually get these projects off the ground in a way that you would start to show that you were able to operate at scale? Was that the idea, even though you weren’t necessarily making money on a project by project basis,
Leila Madrone: It was everything at once. So it’s lowering your cost. It is adding the new design features. It is growing your manufacturing and supply chain. It is vetting that manufacturing and supply chain, growing your company, building a company, all of those things. We come from a relatively small size pre-series A to a more modest size company, what you’d expect post series a company that’s capable of executing. So at that point, we were still getting the cost down, but it was really more about let’s just execute and prove that we can execute before we get to the next big milestone. Next big milestone being step up in scale and probably step up in funding.
Lara Pierpoint: Okay. So let’s talk about how you’re gearing up for that. So now you’re building projects, you’re continuing to try to bring the cost down as you say, you’re growing your company. So what are some of the things that are happening that are both challenging and exciting in that period as you’re trying to think about how to get that to that next step in scale?
Leila Madrone: It is thrilling to see these huge fields of something that you brought into the world. It is wild. You dream about it after you see it. It’s just such an amazing thing. It’s like you had all of these generated graphics of what it was going to look like and then you see it in real life. It’s just this wild experience to have and to realize it works is just, it’s an incredible moment for any kind of innovator. So that was amazing. And it was also amazing how many people wanted to buy the product. So we had quite a slew of projects in the works that we were executing on,
And that led us to our series B where we went up in scale very successfully up leading up to our series B and we wanted to get to the next level. And so that was the next piece, although you did ask me something before that I should address, which is we still weren’t at positive margin. And so that means that effectively we’re still kind of paying for each project. We are not making any money on any project, which means that we have all this great pipeline of projects, we have this portfolio we can use for bankability, we can use for raising money, but we aren’t yet profitable. We felt that if we raised enough money to get to the next level of scale, we would unlock some of the scaling reductions you get in cost, which you do get at some point. So we went down that road. But right when we had right at the end of raising our series B, we started to notice some issues with some of our sites.
Lara Pierpoint: You’d been building projects at this point up to about 10 megawatts, is that right? So are you thinking of this as each step is an order of magnitude and you’re ready to go to hundreds of megawatts projects and as you’re going out to raise your series B, what were the milestones that you wanted and needed to hit before doing that, and what were the milestones your investors wanted to do and needed you to hit before doing that? And were those the same things?
Leila Madrone: At the time I think I was still a pretty naive founder, even though I was maybe eight years and I’m like, this technology works and people want to buy it, therefore someone should give me money to do it. That me, that was my thinking. So I think now if I were to do it, I would’ve thought through some more of the higher level metrics around it for sure. But it seemed like that was logical enough to make it. We needed money, we had a product, people wanted, let’s go, let’s just go. I will say though, I wonder how much our desire to get to that higher level of scale was driven by expectations around what you need to be as a company when you’re on that pathway, when you’re on that venture pathway. Because so many of the conversations were around how do we become one of the top three companies in the world?
They weren’t about how do we utilize this unique technology to help specific communities or sectors of the market that no one else is addressing. It was just about what is the biggest total addressable market? How do we get there fastest? And that was really the mantra that was in my head was how do I become that? Well, I wonder sometimes if we instead had thought about what is the niche market where this is the most needed and can we somehow address that in a different way than going on this journey of venture capital? Is there a different pathway that technology could have taken?
Lara Pierpoint: Okay, but it seems like you have, as you say, you’ve got some solid logic behind you right now. You’re building projects, people want to buy these projects, you’re ready to grow, and you’ve got folks who are investing in you through a series B. So that’s really exciting. And this is about 2019, right? That’s right. And this is also when as you alluded to, you’re starting to see some challenges particularly out in the field. So can you talk about what those looked like?
Leila Madrone: Yeah, so we saw some issues with some of our sites and we realized that a lot of it had to do with possibly not having as many resources to invest in manufacturing and supply chain processes as a bigger company would’ve taken when launching a new product. And so we had to take a step back right at the beginning of 2020 to pause on operations so that we could implement more best in class processes and best in class testing on top of what we were doing. Because sometimes you think order of magnitude scaling that the same processes you were using translate, but as soon as you’re making that many of something, you have to go to several more levels to make sure that what you’re building is what you think you’re building.
Lara Pierpoint: That feels like a heavy statement. And of course the good news is nothing else is going on early in 2020 that would make this difficult.
Leila Madrone: No. Okay, so here’s how this played out in such an interesting way. I think it was January of 20, I can’t remember the exact date. I’m going to say it was maybe January or February of 2020 where I came to the board and I said, okay, I know this is not the best thing for a business to pause, but we have to pause. We have to have our customers be happy. We have to solve these problems so that we can’t scale if we’re not putting out the best product possible. And everyone agreed we have to with integrity, do do this. And so we basically said, we think this will take three to six months to get in place, so we’re just going to do that pause. We think we can do it. We have the series B, a little bit of series B buffer to do that and we’re going to invest. When you say
Lara Pierpoint: Pause, just really quickly what you mean is that you’re going to pause in terms of manufacturing and deploying trackers at the stage.
Leila Madrone: That’s right. That also means that you’re going to pause in terms of taking on customers because you sign with a customer and usually you have to immediately start ordering parts. We had to pause on some of those and we definitely lost a few. We were on this roll, right? We had this momentum, so we had to pause on that, but we didn’t actually think it was going to be so damaging and it probably wouldn’t have been except that this little thing happened in 2020, but made things a little bit more challenging than we had expected. After the break, Leila
Lara Pierpoint: Tells us about what started to go wrong for unfolding.
Leila Madrone: All sorts of strange things happened during the pandemic that really affected supply chains and solar is a supply chain business, and we were one tiny part of this supply chain business. And so one thing that happens when things are that insane is that people become risk intolerant, which makes sense. So their desire to try out new technology goes down. It’s not insurmountable, but it is a fact. And the other thing that was really challenging for us was there was this historic divergence in the cost of US steel versus Asian steel. And usually there’s a little bit of a divergence, but it’s not enough to make up for the fact that you have to ship stuff across the world. So almost every part of ours was made in the US and we used so much less steel that it made sense for us to be in the us. We had a much simpler part, so it made more sense to be in the us. Half of any tracker is steel, and if that underlying commodity is three x the cost in the us, it’s going to make it hard to compete with anyone.
Lara Pierpoint: Can you talk a little bit just about that one piece of the puzzle here? I mean, so clearly we’re sitting here during the pandemic, crazy things start to happen. Is it like you’re just kind of watching as the price of steel ticks up slowly? Did it happen suddenly? Were you waiting to see if it would come down again? How did you think about whether this was an aberration versus a long-term issue that required a change in how you thought about sourcing your parts?
Leila Madrone: Well, I think an important part of whenever anything goes wrong as a founder is you have to figure out how to work it to your advantage. With steel, we used it to look at what impact was it having on all our competitors and we could see which projects they were walking away from and which ones they were staying in, and we could start to make some assessments about what their underlying costs were and what their drivers were. So it helped us draw some of our own new milestones based on what we knew we had to achieve. So that was a positive side. The negative side was we realized that even though we were going to keep our supply chain in the us, we also had to diversify with something outside the US just so we could compete at all during this time period. So I can tell you that trying to set up international supply chain for the first time for a very complex machine during a global pandemic is not fun.
Lara Pierpoint: So it’s a global pandemic. You’ve raised a series B, you are redesigning and ensuring your quality, you’re creating now a global supply chain because of some of the craziness and changes in input prices, et cetera. You’re continuing presumably now to acquire customers and move things forward. So let’s talk about what was happening to the company as we start emerging from Covid. What was your idea on the next set of things to go do now that you’re able to at least theoretically operate at this a hundred megawatt scale?
Leila Madrone: So the market in that kind of ensuing period from when we first were building our projects to the early 20 21, 20 22 timeframe, solar had used up a lot of the flat land that we talked about earlier. And so there started to become a lot of projects that were on undulating terrain. And we looked at that and we said, oh wait, that is one of the things we always knew we could do well. And when we started doing testing on it, we realized we could do it phenomenally well because each of our actuators is driven by air. Most trackers are connected with a long torque tube, long steel tube, and so all of them are connected by the super long steel tube, which means that the ground beneath it has to be flat. And so that usually means you’re either on flat land or you need to make the land flat.
And generally in solar, at the time people were just doing the grading and on some sites that was not a big deal. And on some sites it both was, I would say ecologically devastating as well as very, very expensive. But it was happening a lot. And we saw that and realized that this value proposition we had discounted early on when solar sites were flat was suddenly something that made our technology unique and exceptional in terms of the value it could bring, not just value in terms of cost, but value in terms of preserving the land as well as saving money, preserving top soil, preserving land in such a way where 50 years from now when these solar sites are retired, because I don’t know, we have fusion or some sort of crazy new energy that land can get reclaimed for those communities and it is still in the great shape it was in when we originally built the solar.
So that was definitely a value prop that not only was really matching the new kind of trends in the market, but also really invigorated my passion for what we were doing. It made so much sense to do something that was both helping solar as well as extremely productive. And we definitely got a few projects based on that, even though after taking our pause, our six month pause, which turned I would say kind of into a two year pause because of the pandemic really knocking us back, and then we started ramping up again. So it was this kind of restart that happened rather slowly.
Lara Pierpoint: And so at this point, you’re starting to push into the a hundred megawatt range and you decide to take on a utility scale solar project. So talk about those pressures for scale and what led you to think about the utility scale project?
Leila Madrone: So we needed to figure out how to get enough revenue so we would look big enough to get to play at another level if we wanted to prove that we could be one of the top tracker companies and that we could get revenues that show that we could compete with the biggest tracker or even not the biggest, even the medium sized tracker companies. We needed to prove that we could take on these bigger projects because honestly, there weren’t a ton of the other projects. There were probably enough for us, but there wasn’t enough to convince someone that was a big enough total addressable market to be worth investing in.
Lara Pierpoint: Makes sense. So in some ways there’s a lot of logic to the fact that you have pressure around going this big this quickly, so that’s the moment that you’re in. So talk about what it was like to contemplate a utility scale solar project now. What were the things you were thinking about as you were maybe making the decision on whether to pursue that project or not?
Leila Madrone: I can still remember the day we made the decision. Tell me about it. I actually remember sitting there, what did you have for breakfast? Because I knew that that decision was going to make or break the company personally. You know how sometimes when you get food poisoning and you remember that thing you ate? Oh gosh, in the moment, I don’t know that I knew that for sure, but I knew that it was going to be a big deal and we had been in that undulating terrain realm, but we didn’t have an undulating terrain project of that scale that was ready to go because one of the things about solar is the sales cycle is long. The building cycle is long. It could be as short as three months, but it could take as long as two years just to get to assigned po. So we had things in the works, but that was the one that was ready.
And it was this big project on totally flat land where we’re going to be losing a ton of money and we had to make the decision, is it worth it to do something that doesn’t show off our value proposition that we’re trying to sell on? And also shows that we are not making money on these projects, should we still do it? And ultimately we did decide to do it. We felt that we needed to show the revenue numbers and we needed to show growth even though we weren’t showing profitability or even necessarily the value that was unique to the product in doing this project.
Lara Pierpoint: And I imagine that particularly utilities with their risk aversion, breaking into that market is a whole thing into itself, right? It’s not like you had dozens of these kinds projects to compare.
Leila Madrone: It’s not like people were begging us to do the utility scale projects, even though we had a lot of customers who wanted us to do other smaller scale projects because we had already done a number of ’em. No utility scale company wants a company that’s never done a utility scale project to do their utility scale project. So it’s kind of a new first of a kind. It’s that how do you break into this market where once you’re in it, you can get more and more, you have to prove you can do it. And so there were really logical reasons behind it, but I knew that if it didn’t work out, that was our last shot.
Lara Pierpoint: So you’ve made the decision now. What were the next things that you all did as a company to try to meet that moment?
Leila Madrone: We had hired a wonderful COO who had what it took to build this kind of thing, but interestingly enough, a lot of the supply chain had been set up before he got there. So he didn’t actually have much input on how we built that supply chain. And there was a gap between kind of an older regime and the new regime coming in. So there’s a lot of new stuff happening. So there were new suppliers on that project. There were new people working on it, but overall, because we had so many processes in place, a lot of that stuff cleared itself up. But we had another kind of interesting event, which was we had been using a material from DuPont that had been used in automotive for 40 or 50 years, is one of the most utilized polymers in the automotive industry. And it was at the core of our product.
And throughout unfolding, even from the beginning when we were working with the government, they were like, don’t you need two different materials so that in case something happens with the one, you’ll have something to fall back on? And we said, sure, when we have enough money to do so, we’ll do that. But this material is so widely used and it’s been around for 50 years, so something could happen, but we don’t think that’s our highest risk, so we’re going to stick with this one material for now. And what we kept testing other materials, but this material was so great and we knew so much, we had so much data about it in the fields that it was our core material. It was in fact our only material and there was a supply chain disruption. There was a seemingly something you would never think would affect us.
There was this horrible earthquake in Turkey just really devastating that took out some tiny component that was one of the ingredients in this polymer. And if DuPont had still been overseeing the polymer, maybe it would’ve been okay, but DuPont had gotten bought by Dao and then Dao had sold off this polymer to Selenase and Selenase had just brand new, had this polymer under their belts. And so there was a lot of uncertainty and ultimately it took six months for this material to start getting made again and any sort of stock that they had, guess who was not top of their list of access, this tiny solar tracker company, even though from our perspective, we bought tons of their material not compared to the automotive industry, we can’t compete with Ford. So for the six months that we were supposed to be deploying product at the uc utility scale project, instead our supply chain team was on the phone with all of our customers explaining why we were laid.
Lara Pierpoint: And so you’ve got a couple of cascading or building challenges in this period. So this is happening. You’ve got this massive supply chain disruption. You’re calling customers, you’re saying you’re late, you’re trying to ramp up into this utility scale project. What else is going on as you’re trying to really to see strain as you’re trying to increase your resources and be able to meet effectively these projects that you have out there? Say more about how that all looked.
Leila Madrone: What’s interesting is I feel like even though this feels like the biggest horrible thing that could happen to a company, I still think we could have recovered if we had that same sort of argument we had when we raised our series A and series B. That moment or when we got bankability, which is this is a technology that has risk. It’s new, but it has a value proposition that’s worth the risk. Our value proposition of preserving the land, I think at that point in time wasn’t accepted as being a good enough value proposition to be worth the risk of us moving forward. That is my assessment, that it is a good value proposition and for me, it was the most passionate I’d ever been about the technology at that moment, but that doesn’t mean that that translates into monetization.
Lara Pierpoint: Okay, so it’s 2023, you’re building things, you’re struggling through, you’re getting through this support, and we had
Leila Madrone: Multiple projects. It wasn’t just the utility scale though
Lara Pierpoint: We got the utility scale project, but things start to kind of turn for the company and there were some impracticalities around raising a series C, so that was something that was not kind of the right next step for the company. What happened and why did you decide to shut down?
Leila Madrone: We were trying to raise money for that whole time, and we ultimately came to the conclusion that it wasn’t going to happen
And our existing investors were tapped out and without someone to pass us to take us to the next phase, there just wasn’t enough cash. And it wasn’t like we just needed a small amount of cash. This business was so capital intensive, it had to be someone with a stomach for this crazy cash flows and crazy amounts of cash upfront. And these projects, a hundred megawatt project is a lot of money going all over the place. And ultimately, again, I feel like I think the story at the end is always the company couldn’t raise money if you thing. So that is ultimately the case. But I think if you ask any person in the company, they’ll be like, well, if I hadn’t made this mistake in 2016, this never would’ve happened. I think everyone will have their own story around it, but I think as a founding team, which everyone at unfolding was to some extent, you just do the best you can.
And I would say overall we did the best we can and then maybe 50% on top of that every single step of the way, and it just was too much to do with that amount of money and that amount of time. How much money were you trying to raise at that stage, roughly? Well, it depends on the year. We tried to raise a lot more at the beginning, and then we were like, okay, the markets were starting to adjust to the fact that there hadn’t been as many exits in the climate space as people were expecting and that they weren’t as high. So it was in the tens of, I think maybe it was 30 if I remember.
Lara Pierpoint: So that moment to shut down, that has to have been painful. How did that feel for you? How did it feel for the team of folks you worked with?
Leila Madrone: I was really heartbroken. It was like the worst thing I’d ever imagined happening to this company happened. It was really sad for everyone, but the connection I had with the team for that last year especially, everyone was so locked in. Everyone was doing everything it took, the communication was amazing. We didn’t always agree, but we were communicating and people were putting in just most heroic efforts to have all, even with the supply chain challenges, making it all happen just over and over again, heroic. And so I was sad about the company, but I was also sad to lose this amazing team that I just loved working with and who are just some of the greatest people I’ve known. So that was really sad and I think that it was heartbreaking, but the day that the day after we shut down and everyone came in to get their stuff, the amount of times people said, I’m so thankful I got to do this kind of meet up for some of the heartbreak.
Lara Pierpoint: I think this is why we do this in climate. There are some things that need to change and hopefully will change for this to be a good business, but I feel the same way. My friends, some of them will ask me constantly, what are you doing in this climate world? This is not the past like financial glory, but this what you just said. That’s the reason I do it. I mean, all of us who are passionate, right?
Leila Madrone: You do it. It has to be done.
Lara Pierpoint: Yeah. Okay. Let’s talk for just a second about how we’re going to fix this and fix the climate going forward. What do you think are some of the biggest, I guess I know there’s some tension points between venture capital and hardware development that you pointed out that are really tricky and we’ve talked about some of those and just the sheer scale of what’s required monetarily to do all of this. Let me start with, maybe we can kind of go through pieces of the ecosystem. Are there things that companies can do differently to manage some of those tensions you think?
Leila Madrone: So in terms of the technology companies, I think the main mistake I see early stage founders making is that as soon as they think they’re ready to raise, they start, they go out to vc and they’re not thinking about the long game when they do that because there’s only a certain amount of money that you’re going to be raised from vc that’s before it translates into an unattainable exit. And I know these founders know how to do math. I need them to start doing this kind of math to realize that if you are thinking, oh, I’m going to raise 10 million for my first round and 30 million for my next round. Okay, great. Multiply those numbers by 10, and that’s how much you’re going to have to exit to make everybody happy. And I think we need founders who can think about how do I get money from different places, but also how do I get resources from other places? How do I weave together things so that venture capital is, it’s one piece of my toolkit, but it’s one of 10. As hard as you work to get that vc, try to get that corporate partnership, try to get government on your side, work with local governments if you’re using something that’s going to affect them and find your allies. That is to me, the thing we all need to do is create those coalitions. Yes.
Lara Pierpoint: Yeah. Well, and let’s talk some more about that. So I mean, what are some of the things that the ecosystem can be doing differently? Maybe are there things, for example, VC investors could do to make this go better for these companies?
Leila Madrone: Interestingly, I think the VCs have really stepped up for climate. I think that you may listen and think, oh, it’s because VC is not doing enough. VC to some extent is doing more than a lot of other sectors to step up and take risks. VC is good at taking risks and they’ve taken a lot of risks. I think that the ecosystem has to stop pushing founders toward VC immediately. The current work I’m doing is thinking about what are all these different resources and tools you can use outside of vc? And you can buy a hundred books about how to build a company based on vc. You can go through every single accelerator even in the climate space, and they will all be setting you up to raise vc. There’s not that much of how do we build a coalition? There’s all, how do we just graduate you to getting a pile of money, so then you can go, that’s a growth simplification, but it does feel like that happens most of the time.
Lara Pierpoint: So what does this mean then in terms of the other things in the coalition? So government funding, depending on which government you’re talking about, may or may not be a good source of funding.
Leila Madrone: I want to see, including some of the VCs, I’ve talked to VCs about this too, start to think about new kinds of asset classes that we can use. That’s a whole nother podcast or series. What are these asset classes? People are thinking about it. And what gets me excited is I start talking about these ideas and then the VCs are almost sometimes the first ones to step up and be like, I can’t do this as a vc, but I want to help you think through what do we do? What do we do here? Talking to banks, they’ll be like, oh yeah, we need that. Tell me what you figure out. So everyone wants to solve it. We all see that it’s a problem. We’ve seen the bloodshed. And I think just continuing to have these conversations and to really look at the data and to figure out what the data is telling us about what is working and what is not, and what is an ecosystem do we need to do to give more support to these founders so they don’t have to figure it all out on their own.
Lara Pierpoint: What gives you hope about climate tech innovation despite the outcome for Sunfolding?
Leila Madrone: Well, okay, so when I started in solar, there was hardly any solar in the ground. And as I mentioned, it was crazy everything that was happening. And now we’re here and I can’t even believe how low cost solar is, how easy it is to deploy, and the cost of solar going down so much maybe is part of why Sunfolding is not here, but better. Solar is like a winner than Sunfolding. So that’s one big piece of it is just the longer you wait, if you’re in climate, the more change you see. And so you have these moments where it feels like hope is lost, and then you can’t believe how much progress we’ve made. It is extraordinary. You can’t get lost in the waves. You have to see the whole ocean, right? And so that is, for me, the long view is hopeful.
Lara Pierpoint: If I wired a hundred million dollars into Activates bank account tomorrow at your discretion to spend, besides funding your first book deal, to write about how we’re going to fix the ecosystem and fund companies in a whole new way, how would you spend that money?
Leila Madrone: I would create a program for founders who have technologies that are not a good match for vc, but which are so needed, specifically things around protection and preservation, especially in the light of fires and floods and the types of adaptation we need to take to protect people.
Lara Pierpoint: Thank you so much for doing this, Leila. I really can’t thank you enough for sharing all of your insights with folks. There’s so much to learn from so many things that folks are doing in climate, but the way that you’re arriving and how candid you’re being and how willing you’re being to share the full story on Sunfolding, I think there’s so much that people will learn from that, and obviously so much you accomplished. So thank you again for showing up and for doing this.
Leila Madrone: Thank you.
Lara Pierpoint: Leila Madrone is an executive in residence at Activate and the former founder and chief technology officer of Sunfolding. The Green Blueprint is produced by Latitude Media in partnership with Trellis Climate. The show is hosted by me, Lara Pierpoint. Our producer is Erin Hardick. Anne Bailey is our senior editor. Sean Marquand is our technical director. Stephen Lacey is our executive editor. If you’d like to suggest topics or guests for the show, send an email to editors@latitudemedia.com. You can listen to The Green Blueprint at latitudemedia.com or subscribe wherever you get podcasts. And if you have fellow clean energy or climate tech travelers who would benefit from the insights in this show, send them a link. This is The Green Blueprint, a show about the architects of the clean energy economy.
