The surge of climate tech startups seeking to reshape clean energy and transform the vast industrial market has fueled optimism about combating climate change.

From environmentally friendly steel manufacturing to nuclear fusion, billions of dollars are pouring into these venture-backed companies across almost every technological field.

As I explained in a previous article, venture-led investments can play a crucial role in developing new clean energy sources and greener industrial processes.

After talking with numerous venture capitalists, startup members, and scholars who study so-called hardcore technological innovations, I am convinced that we are in the early stages of a carbon-free economy.

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However, while remaining optimistic, it is also important to be aware of the risks. As a journalist deeply involved in covering the Cleantech 1.0 era, I remain cautious about the development status of the relevant technologies.The Cleantech 1.0 era began around 2006, but by 2013, a wave of closures hit many solar, battery, and biofuel companies.

The current scene feels all too familiar: a boom in venture capital, hundreds of millions of dollars pouring into demonstration plants, testing unproven technologies, along with potential political backlash from the U.S. government's aggressive climate policies.

Documenting the current boom in climate technology means we must remember that most of the clean tech startups previously supported by venture capital failed miserably.

Today's investors and entrepreneurs hope this time will be different. As I found in my conversations with them, there are many reasons for their optimism. There is much more capital available this time, and the demand for clean products from consumers and industrial customers is much greater.

However, many of the challenges that emerged during the first clean tech boom still exist, and there are ample reasons to worry about whether today's climate tech startups can succeed.Here is the translation of the provided text into English:

Here are some key lessons learned from the Clean Technology 1.0 era.

Lesson 1: Demand is crucial. It is the foundation of any market, but is often overlooked in the climate technology sector. There must be someone who wants to buy your product. Despite public and scientific concerns about climate change, it is difficult to get people and companies to pay extra for environmentally friendly concrete or clean electricity.

A recent study by David Popp from Syracuse University in the United States and his colleague Matthias van den Heuvel indicates that the main reason for the collapse of the first clean technology bubble was weak demand, rather than the costs and risks associated with scaling up startups.

Many products in the clean technology sector are (large) commodities, where the impact of price on demand is often higher than all other factors. Environmentally friendly products, especially when they are first introduced, are usually too expensive to compete.

This argument helps to explain a unique exception in the Clean Technology 1.0 bubble era: Tesla Inc.Pope said: "Tesla has been able to differentiate their products from other brands because the brand itself has value." However, he added, "It is hard to imagine a famous (green) hydrogen brand emerging."

The research suggests that government policies may be most effective when they help create demand for green hydrogen or cement, rather than directly investing in startups as they strive to commercialize.

Lesson 2: Arrogance hurts. One of the most obvious problems in Cleantech 1.0 was that many practitioners were extremely arrogant. The main leaders and financiers (almost all men) made their fortunes in the fields of computers, software, and the internet, and tried to apply the same strategies to clean technology.

Matthew Nordan, a partner at the venture capital firm Azolla Ventures, said: "The first rule: Do not invest in areas you do not understand. Investors in Cleantech 1.0 mainly came from the technology and biotechnology fields, and they desperately wanted to catch up with industrial categories they knew little about."

Nowadays, many venture capitalists claim to have learned the lessons from the Cleantech 1.0 era. However, there are still some well-known investors who have made huge fortunes from large technology companies, and they confidently believe they can solve the world's biggest problems.I asked Professor Josh Lerner from Harvard Business School, who studies the operation of venture capital, why these investors haven't learned from the past.

He said, pessimistically, "These people are just egomaniacs. They want to save the world and see themselves as heroes, but they are just a bunch of fools, despite having had such experiences before."

A more positive view is that they may be able to "absorb some knowledge and innovation that has emerged in the software field and apply it to this area."

Lesson 3: Molecules are different from bits. We all know that writing code is easier and cheaper than building a steel mill. However, in the Clean Technology 1.0 era, for many people, the risks and unpredictability of scaling up molecule-based businesses were so great that they came as a surprise.

Low yields or the synthesis of useless by-products, which may seem like minor issues in the laboratory, can become huge obstacles in the real world, because this new process must be scaled up and must compete with existing technologies.Understanding whether a new process has commercial competitiveness typically involves building a pilot plant, which usually costs $100 million or more.

In the Clean Technology 1.0 era, many startups' technologies worked well in the lab but poorly in large-scale facilities, causing them to get stuck. You can't know whether your new process is effective until you truly achieve industrial scale.

The hope now is that more computing power combined with the application of artificial intelligence will enable startups to simulate how new processes work before actually building anything.

For example, running (simulating) a new method of producing green hydrogen in silicon to see where problems may arise is certainly much cheaper and safer than building a $100 million pilot plant.

Lesson 4: What did Solyndra's failure teach us? In the Clean Technology 1.0 era, Solyndra received a $535 million loan guarantee from the U.S. government to manufacture a new type of solar panel. People still remember its failure vividly.When the government attempts to select negative examples, it is often seen as strong evidence of the existence of problems. However, the lingering lessons from Solyndra's failure are quite different.

Firstly, whether you are a government official or a venture capitalist, do not invest in technologies that have little significance for the manufacturing industry and whose market demand is questionable. Solyndra's product was a highly complex cylindrical solar panel that required special customization and unproven equipment for manufacturing.

Take a look at the first three lessons I wrote. I wrote in 2011: "However, what Solyndra lacked was market insight and manufacturing flexibility.

Although the company quickly traversed the 'Valley of Death' as Silicon Valley entrepreneurs call it, which is the period from obtaining initial venture capital to starting to generate revenue, it was severely frustrated in transforming its operations into a viable long-term business.

If there is one most important lesson to be learned from Solyndra's failure, it is not to try to do too much, too quickly, and not to go it alone."No matter how it is operated, Solyndra may still fail. However, if the company develops more slowly, many people, including American taxpayers and venture capitalists who have invested hundreds of millions of dollars, would lose much less money.

Lesson 5: Politics can change everything. The Inflation Reduction Act introduced by the United States in 2022 helped drive the recent wave of clean technology investment, which was passed in Congress without a single Republican vote.

In simple terms, if a Republican president is elected in 2024, it could mean the end of radical federal climate policies.

There is also ongoing policy fluctuation in many other industrialized countries. Recently, the British Prime Minister also proposed to weaken the country's climate policies, and even Germany has shown signs of abandoning political support and funding for clean technology.

In a recent paper, Popp from Syracuse University and his co-authors traced the predicament of Cleantech 1.0 back to a seemingly insignificant Senate election in early 2010.After the death of the Liberal Democrat Ted Kennedy, Massachusetts voters elected Republican Scott Brown, which led to the demise of a comprehensive climate bill being debated in Congress.

Due to the absence of the possibility of carbon pricing, many venture capitalists lost interest in clean energy startups.

In 2023, with the Republicans holding a majority in the U.S. House of Representatives, they put an end to some additional large-scale federal investments in clean energy.

Thus, political factors in the United States are very important, and they can change overnight.

Lesson 6: The economy is the foundation of survival. The early days of the Cleantech 1.0 era were filled with enthusiasm and good intentions. People viewed climate change as a survival crisis.They believe that technology led by visionary entrepreneurs and venture capitalists will resolve this crisis. In fact, the will of the people is very strong and deeply engaged. The advantages of many new climate technologies are self-evident, and we urgently need them.

However, none of this guarantees success. Venture capital-backed startups that want to survive need an economic and financial foundation, not just good intentions.

A simple fact is that we rarely see excellent climate technology startups with radical new technologies. All of this is still in the experimental stage. The Clean Technology 1.0 era taught us what can go wrong, and we are still learning how to do these things well.