Memo to CBS: Every business is tough! In 2012, the Wall Street Journal ran an informative piece on just how tough the private sector venture-capital businesses is, headlined, “The Venture Capital Secret: 3 Out of 4 Start-Ups Fail.”
It seems at first that this is a secret 60 Minutes is unaware of — since the show focuses almost entirely on the failures. But CBS explains that “the venture capital model is that for every 10 startups, nine go under” — except that CBS appears to see that as a bug, not a feature, failing to understand that the successes more than pay for the failures.
Moreover, 60 Minutes is apparently unaware that the DOE Loan Guarantee Program has a whopping 97 percent success rate, while the companies CBS focuses on such as Solyndra and Abound Solar were just 3 percent of the portfolio.
It’s as if 60 Minutes did a profile of the venture firm Kleiner-Perkins and focused primarily on its failed investments with only passing mention of AOL — and no mention at all of Amazon.com, Genentech, Sun Microsystems or Google! In fact, when 60 Minutes profiled co-founder Tom Perkins several years ago, they called him “the captain of capitalism” and only found time to mention the winners!
Let’s set aside the question of why 60 Minutes chose to do a hit-job on cleantech, which clearly was unwarranted, after producing widely criticized puff pieces on the NSA and Amazon’s wildly impractical delivery drones.
The key point is that the goal of DOE’s investments is not to make money. The goal is to accelerate the drop in price — and increase in deployment — of clean energy in the market, which it clearly has done in industry after industry. A secondary goal was to create jobs in this country, which it also succeeded in doing.
Inexplicably, the 60 Minutes correspondent asserts that according to “everything I’ve read there were not many jobs created” (and they even found an uninformed former DOE official to agree with them). CBS claims taxpayers have little to show for the investments when the data clearly show otherwise.
The whole segment is baffling. CBS asserts that the key cleantech investor they interview, Vinod Khosla, is “known as the father of the cleantech revolution.” He ain’t, and in fact he’s about the last person you’d want to talk to on the subject (see my 2010 post, “Is anyone more incoherent than Vinod Khosla?“).
They even found a Chinese cleantech entrepreneur to say “clean tech is not going well” — even though China is the leader in both solar and wind power. CBS complains that the Chinese have created U.S. jobs using some of the technology U.S. taxpayers supported — as if the only U.S. jobs that count are ones created by U.S. companies. CBS correctly notes that China is willing to take a long term view of clean tech — but never mentions how opposition to U.S. clean energy standards, cleantech investment, and a price for carbon by conservatives in Congress have hurt the competitiveness of U.S. companies.