Luca Venza  0:00  

So thanks. Thanks for joining us, everyone. Well, my name is Luca Venza, I'm the Director of Technology Innovation Transfer and Acceleration at IESE business school based here in Barcelona. And it's time we talk about money. I think we've been spending the last day and a half really sharing fantastic ideas on infrastructure, or materials on health care. We've seen lots of fantastic initiatives, some great products, some brilliant minds. Now the question is, how do we pay for all of this? So this panel is a panel of experts from two sides, really, of the let's call it the investment paradigm. One is how do you take an idea out of a laboratory, build a team, start a company and build something genuinely unique from zero. And representing that we have Josep M. Pique and Javier Del Rosa, who are specialists in that transfer of technology out of the laboratory. And another question is, what is the role of big corporations? What are these big projects we saw Hyperloop earlier today, and we have someone who's on the advisory board of Hyperloop. And we also have Pablo Rodriguez, who is in Google X and Telefonica Apha, which are moonshot factories, where corporations think of big ideas and start them from little projects. So it's my pleasure to welcome you all, to give. I think, just as a quick introduction, maybe give you each two minutes to say, what is it that you're working on now, particularly focusing maybe on material science, if it's relevant, and that you're excited about?

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Josep M. Pique  1:41  

Thank you very much, Luca. I'm getting pickier in what Josep M. Pique and I am the President of the LaSalle Raman University. I was the president of IASP, International Association of Science and Technology Policy, which is a network 400 scientists around the world, And also he combined this activity with the City Council when I am helping the city developing all the strategies in zoned for instance 22 at Barcelona, where I was the CEO of 2012, from 2011 to 2014.

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Ramon Betolaza  2:13  

Hello, thank you for having me on the panel. I'm Ramon Betolaza. I'm an investor, professional investor, I guess you could call it. I've been in private equity, most of my professional life going from industrial companies, large restructurings, industrial companies. And now I spend a lot of time with Hyperloop on the board and helping the CEO and the rest of the team achieve their dream. I'm also working on a new technology for batteries, which goes to the material sciences that has no lithium, no cobalt, and it is the cyclability from 2000 to 35,000 cycles, which I think is going to be what really changes the energy sector, which goes to ` investing, etc. I'm also working with a former partner of mine on the decarbonisation fund for Europe, where there's still a lot to be done. So from that perspective, yeah, I guess that's what I'm doing lately.

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Luca Venza  3:13  

I think the question in the room is, what aren’t they making the batteries out of?

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Ramon Betolaza  3:19  

It's a well, it's part of it, actually, you can tell us potassium, it's a change in the nano gel, and the electrodes, actually with the collaboration and the help here of the UPC, and the nanotechnology professors here. So that's actually been a project where from an industrial company that was manufacturing electric motorbikes, we needed to solve a problem, which is that the batteries need to last longer and be charged much faster. And we came into a potential solution with the graphene accelerated charging mechanism and technology. And from there, it wasn't clear there was enough graphene. And I know Zina always tells me there is more than enough graphene in the world. But there's been severe approaches of five years developing a new technology that actually now could change all of that. Where you don't need to change the battery for so long, you can charge it in far less time and it's much greener, which is also being applied to Hyperloop, because as you know, the capsules are going to be battery powered to get the linear engine in place. So you won't have to charge the whole track, as you do right now, with the levitation trains, which are high speed trains. So there's far less infrastructure and that it's critical as to how do you charge the battery which is going to be in that time that the train goes around, that the capsules go around in the station, and there's a limited amount of time, so you can't swap batteries or change that. So there's a lot of different aspects that have taken me from the traditional industry into what I think is the new evolution, not revolution, but there needs to be an evolution in how we manufacture things or what do we put in them.

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Luca Venza  5:07  

I think also that the journey of investors from more traditional, let's call them no investments into this new world of tech development is a fantastic journey for us to follow you through. So  Ramon,  you have big, big ideas, big corporations, unlimited resources. You started out in Google X, you moved here, you launched Telefonica Alpha and had very successful healthcare spin out kind of come out of that. You know, what are you up to, now, I guess, and what is the role of these moonshot factories?

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Pablo Rodriguez  5:41  

Sure thank you so much. I, you know, I think we're, we're about to enter into a new innovation era. I think we've gone through the first two waves, the first one was mostly computing, and we had the IBMs and the HPs of this world. The second one has been mostly digital. And we've had companies, you know, the Facebook's and the Googles of this world, and the Amazons and, and the rest of the world trying to catch up, mostly, and I think that digital transformation is necessary as a network for modernization. But it's probably not enough to create value. I think we are at the verge of a third era of innovation, where the digital and the physical meet is not about one or the other. And there is a focus on people on the planet. And the risk is not so much business risk, as I'm going to do another me too that I'm going to replicate somewhere else, and do I have the commercial channels and partners, but there is a lot of science risk. So moonshots try to cover that space where traditionally, venture capitalists have not covered. And that has been driven either by governments or by corporations, where you're trying to take risky projects and have a large impact, and have some patience for them to mature. I think what's been happening over the last years, and I've experienced firsthand, is that those times that we used to think there were 10-20 years are actually shortening. So the long term is becoming the short term for multiple reasons. And primarily, I think scientists are becoming more entrepreneurs. I think there is a large, we learn a lot more to become more multidisciplinary. I think money understands better how to take risks, we are learning how to take better risks. And, and we know how to stage these big ventures, these big projects, into small tranches into small milestones that maybe are about, you know, three to six months prototyping and, and we put the focus on learning, we change the metrics. So I'm super excited, I think there is, we are at the right time at the right place for all of these things happening. And I can see more of that moonshot thinking that started with governments and big, you know, taking a man to the moon, coming into more and more into the venture capital world and more and more into corporations wanting to play into that space, and entrepreneurs wanting to do well and do good.

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Luca Venza  8:43  

And on that point, when you see these big moonshot factories, is it, what's the model moving forward? Is it corporations acting on their own power? You know, is it Google, we have all the data in the world so let's do something with it, or is it public private partnerships, or is it public lead, and companies follow? What do you think is going to be the trend?

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Pablo Rodriguez  9:04  

Listen I think that these big bets on science and social impact and moonshots, we're still in this third wave of innovation, we're still learning how to do it. And I think we have some data points. We've seen what governments have done with DARPA. We've seen what McCrone is doing with its program on 20 Unicorns in the next 15 years. We're seeing Japan driving their moonshots program. We're seeing the Spanish government driving their missions for the country and putting I think it's $150 million fund into that. So we're seeing government's trying to drive these. We're also seeing some large corporations pushing for these, and we're also seeing some venture capitalists that are developing funds that are going for these bigger moonshot thinking. I believe it is going to be a mix of all of those things. I think people will want to share the risk. And the key is going to be how do we learn as much as possible in that journey of de-risking things. But I can see how many more players that are showing up at night for that space, and it will probably be a hybrid, a lot of people want to take the risk, nobody wants to take it alone. So we will probably see a lot of resharing.

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Luca Venza  10:36  

That's fantastic. We'll explore more that we saw just Josep earlier this morning talking about this concept of the changing priorities that we see, right, how we see funds are going to shift out of necessity. So maybe Havier, you know, you're the only true full time impact investor on the stage, so tell us, you know, what are you up to, how does Ship2B work, and we'll take it from there?

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Javier Del Rosa  11:01  

Okay, great, Ship2B, is a private foundation, which has the mission is to demonstrate towards the impact economy. By impact economy, we understand the business in a startup or any large company that is taking into account decisions, both economical, traditional things, and the impact of your act or wherever it is. So wherever you are going, you are taking into account, which is the impact in it can be societal, it can be environmental, can be whatever kind of impact can be, but you're taking this in account. So I'm actually working in this foundation, we are working mostly, or I'm in the startup area of the foundation, we are accelerating startups, which are either in the health sector or in the climate sector. And we have a twin or a brother or a cosign VC he's very close to close 55 million euros. This is the biggest impact VC found in Spain. And it's just starting in this investment right now.

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Luca Venza  12:09  

So from the impact perspective, how do you see the material science world all these brilliant minds out in the audience? Are you prepared to invest in them?

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Javier Del Rosa  12:19  

Sure. In fact, impact is not a different kind of startup. So your queue should take into account the operational decisions as VC has to take into account. But you have to take into account two, which is all the intentionality of the entrepreneurs. So you can be producing a material that can be a graphene for the battery, but the important thing is, if you what do you want to do good with that? I think a good example can be a financial company, called Pentium, for instance, they were a financial startup. So you may think in a very, can be a financial startup company startup, they were doing there Inverse Law mortgage? No, normally, it's taking the property of the flat of the, the, the, the owner, so the gallery people to this company was proposing a model in which you do your spending wherever you're spending for paying the resident. But when this ends, and the father dies, the sons can recover the property of the flat, so the secondary impact there, and it's a financial company. So this is a clear example of how you can impact the simple things?

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Luca Venza  13:32  

No, no, that's great. I think Josep let's come back to you because this is really your area, right? You spent your whole career and continue to get scientists and technology out. What are the challenges of that transfer?

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Josep M. Pique  13:45  

Really, like Pablo also, the challenge that we have now it really if we have to innovate in a market driven, or we are in a developing nation with a technology push, it says market pool or technology push. Really when we know what we want, it has an energy transfer project, because you are waiting for a solution, you create a team, and this is the goal, because I understand that you know what you want and you know the business model. But the challenge here is to find a new business model. And this is the reason why we need a different animal, or we have the same animal. The science with a different element is entrepreneurial behavior, because entrepreneurial means how this technology is finding a customer that is going to pay for scaling this project. And that's the challenge, to discover the business model. One of the things that we're learning, and Collider here in Barcelona is doing a very good job, is when we are trying to discover the customer discovered the business model. It means when we are using the scientific method, not for developing scientific processes, for developing business hypotheses. This is a perfect means. This technology will make some value that somebody will pay, because it makes a value but somebody will pay, it's better not to scale. Because you will fail to scale, something that will not, you will not find enough customers to invite or to invite investors to be in the middle, because that's the reason why we have now in this long journey from technology to the market, how we need to send messages to investors that we're advancing in value. One of the more effective messages that we can send to the investors is that we have evidence. Evidence of what? Evidence that this technology is running good. You need to validate the additional running, and the customer is happy. Oh, this is different, it means that we are adding a second value, somebody will pay for that and be happy with that. And from my point of view, and listen Pablo, we can put 1,000 million euros waiting for these big scales, but we need to be sure that the first step is running well. And for this reason, pilots are, from a point of view, the key element in TRL, for allowing the technology to understand if there is a business model or not. And not just value, a business model in a lab is a business model in a real life in real life means that we the cities, we are the first mile of innovation, the first mile of global innovation. If we don't allow entrepreneurs to build their business, in our cities and in our regions, we will not invite them to scale because they cannot scale because they don't have the evidence. From my point of view, the challenge here is to show evidence, evidence on technology, evidence of customers, but evidence of business models. If we achieve that they will be very happy to buy and you will be happy to invest. But let's see how this journey is really working. Not just for solving the problems of the past. That's good. Also for serving the branch of the theater. And that's the plan to find out.

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Luca Venza  17:12  

And no Pablo in Alpha, you have this right? Yeah. TJ Neil there, he's the guy who put the methodology behind it right. So really, the startups spinning out of university and the moonshot factory is a similar process. It's not that different, right?

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Pablo Rodriguez  17:27  

Yes. Yes, there is a methodology. There is a way of thinking. There is an attitude, there is a different attitude. When you talk about the future, I have a lot of respect for the future, because we haven't lived there. And I have no idea how it's going to be, I stopped trying to predict the future a while ago. Because yeah, things change so fast that the only thing you can do is be ready and, and try to, and try to anticipate a future that you will desire to happen, something that you would desire to happen. And I think that's the major difference between what we typically do with lean startup methodologies and sort of trying to go to market where there is a need, and you're trying to discover this need, you talk to a company or you talk to a cause to the consumer. When you're trying to explore a bit more in depth into the future, you need to combine futurologists with scientists and go into methodologies that allow you to, to explore futures that still don't exist, and that you want to happen, and then come back from there today and try to have a plan to see what happened. When we started off about four or five years ago, thinking about the futures that we would like to happen, we thought about futures, we would like to have a world where energy would be totally distributed. And energy could be moved around from one battery to another battery, and there will be a lot more resilience and sustainability. And that was six, seven years ago. We also thought about a future where we would like to have a world where mental health was something that was not a taboo, but it was like going to the gym, and then COVID hit and then we have a solution to part of that problem. So it's a different way of anticipating those needs and it mixes many different people who need to be represented at the table to have those sessions and very diverse thinking and embrace that and hold the tension for a while. I think  the metrics, probably one of the biggest challenges that I've seen in that window of opportunity that is between science and the impact is that the metrics are not defined. You know, whenever a venture capitalist comes in, he tells you give me yeah, how many pilots do you have? How many retention rates. You know how much advertising money you're paying in. And then you talk to a scientist? And I say, well, it is how many papers are published, how many patents are made. And I mean, that window in between where there is this major opportunity, but there is this black hole, we need to think about new metrics. And I think that's where a lot of work will go. And if we nail that will give a lot of confidence for this to happen

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Ramon Betolaza  20:26  

I totally agree with you here. And I'm not sure what the future brings. But we have to have dreams and visions, and try to go towards them, which linking to your earlier point is, and I think that's one of the reasons why PUZZLE X should exist, that we've been talking about before. Because there is a new revolution in what new materials can do to existing things that we have, and to new things and ways of manufacturing. But they are in research centers, universities, scientists, the cities have a lot of impact or willingness to attract people to get it done here. But to get those pilots, you need money, and you need capital and you need SMART Capital, not just any capital, and there needs to be some metrics that understand if this is matching an existing need or is there a new need. Most of the large corporations have been fostering all this R&D or funding it in some way. But right now, they don't feel the need, because they don't know it exists. So the investors can't anticipate what the large corporations are going to do, which is at the end, what we do, to create something that then a very large corporation is going to end up using. So you need to find a bridge, to bring, to get the knowledge to the investors and to the corporations and have a common space, where then we can all pick and choose what is basically in my area of interest, because of course, in this Moonshot, I mean, you everyone has their own views, ideas and focus. And you can’t just have all of the investors just looking around anything and everywhere, because that's just not going to take you anywhere, you need to have a focus, you need to know what you're spending your time on, and then your capital. But I think there still is a gap of what we have and is available, which we actually do need in terms of the climate change initiatives, the SDGs, in terms of decarbonisation, there's a lot of things that can be done that many people are already working on, but it cannot be applied yet to industry, because there hasn't been that bridge. Because you haven't gone from TRL two or four, which is in the lab, to the real world, so that an investor like us can see it, and then help the scientist figure out how to scale it and create a company from there. Because that part of that magic, there needs to be a lot of knowledge that needs to be put together. And I think that this is what PUZZLE X is trying to do is trying to put us all together. So we can end up and then eventually you'll figure out what the impact is. I don't think impact investing needs to start with impact. It needs to start with investing, and then figure out what the impact is. And if it makes money because at the end of the day, I'm sorry, but money is looking to make money. So from that perspective, yeah. Except if you have a foundation like you.

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Luca Venza  23:26  

I think even foundations need to be financed. So this is a great question. When you really added to this a lot, which is how do you do that bridge, but I don't know how it all comes down to people, right? So you can't do that bridge. I think Pablo could finance a team. From the top, right. He had the money, he had large corporations that could invest in talent, and they could get those different minds in room. Here we have those minds in the room and it didn't cost us anything. So what do you do?  What is that support that needs to be given to a scientist that's different from internet technology? You know, I always tell my students you know, when you see a lot of success in high growth, internet tech is done by consultants, like people who know how to manage projects, they don't necessarily need to understand a whole lot more, they just know how to manage projects, how to raise money, how to communicate, material science is a little different. So, what do you do, how do you help the companies?

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Javier Del Rosa  24:23  

Sure. We are not inventing anything. I think Steve Blank and Jerry Angle many years ago in Silicon Valley, show us about the customer discovery methodology and the importance of discovering things out of your customers previous to the developing things. So, what we are doing, we have been doing with you said with the Catalonian government, is trying to apply this structure and scientific process because this is a scientific process is quite a structure, what should you ask, what kind of questions you should ask, which are the steps you should proceed. So, we have a structured process that you can share and is open, it's easy to be shared to researchers, so they can advance in this part of the business. And which is most important, the cost of this is almost zero. So as an investor, you're most of the time receiving startups that have been that have not been validated. So okay, you may have fantastic technology. But please go make some validation, and then come back, because I don't know, I don't want to spend some time or some money on something that doesn't even validate that he has 100 interviews, or that maybe a lot. But what is this in the life of a fun startup.

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Ramon Betolaza  25:39  

Let me add one thing to linking to what you were saying or was Pablo saying earlier, and we were talking about this earlier, there is an enormous amount of capital and money now provided by governments and super governments to really fund all of these projects, but guess what, they are not allocated. Because the guys with the project don't know who to talk to, the guys with the capital have no idea what they should be doing or who they should be funding. And there is a very big knowledge gap. And, and it is true, the knowledge is there. It's just the pieces of the puzzle, haven't been put together yet. 

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Josep M. Pique  26:19  

I agree absolutely. Because that's the way if we know people that did in the past, the way that we need Sherpas, we need the DNA people that were doing this job before, to come back at this point zero, and to help new startups to grow. And perhaps Collider is doing a very good job because we are mixing in this case in the Mobile World Capital, people that were entrepreneurs before. And they know the process, and the dialogue, the banter. Because when you're an entrepreneur, and it is the first step you're doing, you don't know, but explain the indicators that you tell you to utilize before. That's perhaps the reason why this is not about technology. It's about talent and technology, and talent and technology and inception moment, in the launcher moment, in the growth moment, and the exit plans. And we need to combine in our ecosystem, different people, like you, that know how to talk with the big corporations, and you can bridge in a very easy way. And this is why we need communities and also focus. I feel that PUZZLE with Mobile and all the ecosystem of Barcelona can really make this an ignition, connecting talent technology for developing this customer discovery, this validation, after that to connect with investors, and after that to connect. I love Paulo about the exit plans. Because all these people will invest in either know when you will have the exit plan, it means that you will have the return of the investment. And you will come back with this money to new startups that you will invest in again. I feel now that Barcelona is a very good moment. We have deep research centers that will attract a lot of talent. Now, the city of Barcelona developed in the deep tech node, it means that we believe that technology is ready. But we need to develop a business model on that. And the idea is to combine technology with the right talent in order to develop this journey from inception, launch to market traction, validation of the scalability and exit plan.

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Luca Venza  28:15  

It's interesting because I mean, there's not a lot of events like this out there, you don't have material scientists really drawn out of the lab into a public environment where they can be interrogated openly. And because there's been a need for secrecy, right? There's a certain innate secrecy in discovery and invention. And so they were raised on on a belief that what I'm doing cannot be shared,

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Josep M. Pique  28:40  

You can make a hypothesis, but you have to validate, you can use the scientific method as qualitative research, and the hypothesis is do 100 interviews and it is about the right scale. If it's not right, stop, because as you know, Pablo was telling me before he learned very fast, and stop the spread because it's not running because perhaps this the same technology, for instance, photonics, you can cut the skin of human being and you can cut cows. It’s the same technology to biologists different the same person group in two value chains. It's better established when validated. And after that if it’s running good, if not stop and go to find another value chain.

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Luca Venza  29:22  

Great. So we have about a minute each. I just want to get everyone's final thoughts about what's the future of impact investing, particularly in material science we've seen that Sequoia Capital, which is probably the most prestigious venture capitalist coming out of Silicon Valley, has announced an evergreen fund. So they've said, we understand that these time limits that funds are tied to are not helpful. And so we're going to open up funds that have indeterminate end dates. So step one, right. What is the future of impact investing?

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Javier Del Rosa  29:57  

Sure I think there is no future like the present. In fact, a not is not a matter of investor for startups. So you have investors like Blackrock or big investors, they're saying publicly that they are just taking into account investments in big companies that are taking into account the impact. Last week, we had the COP26. So, this is right now, this is not the future. So,the first thing is, it is not the future it is today. So said that I think investors are suiting to impact investment. This is a steady movement that is happening, but they're already there, especially in the impact investment funds, but they see most of the VCs are moving to that, the regulator in Spain is asking the investors to give a matrix of impact. So it's not just the investor, it is the government who is asking for that. And we are expecting new international standards, both in financing and in impact. So the same way we are having the profit and loss statement, we are having the challenge we are expecting in the near future new standards to measure impact. So this is very close. Very, very close.

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Luca Venza  31:31  

Great. So Pablo, from that moonshot factory, what do we expect in the future?

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Pablo Rodriguez  31:37  

So I think Harvard told us at this time to build. We are seeing a journey, going from technology during innovations to product driven innovations to purpose driven innovations. I think that a journey for scientists is a journey. I think that becoming entrepreneurs, now you're asking them to focus on purpose and fall in love with the problem, super important fall in love with your problem. And don't don't try to you know, try to find a hammer, where which nail am I gonna hit. It’s gonna be a cultural transformation and an attitude one, I see exciting areas around materials, you know, biosensing, biometrics, patches that measure biomarkers for non abuse, medical signals, you know, beyond heart rate and glucose, seeing a lot of excitement around chips and hardware to process AI. And especially with optics. Moore's Law is cutting whatever you can do in one machine. So you have to distribute it. And I think all the materials around optics to boost AI, I think, are super exciting. And then batteries, for reinventing the electrical grid, which hasn't been rethought in the last two centuries. And I think that is a lot to do. So I'm super positive. But I think that the main journey is going to be an attitude of wanting a cultural one in and, and money understanding that the risks are not that risky and, and storytelling, the journey from belief to impact is going to be a lot about storytelling.

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Luca Venza  33:23  

Thank you, Ramona?

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Ramon Betolaza  33:25  

Now, I agree, I think impact investing is already here, in one way or another, because we all have lots of different metrics that we need to adhere to. And any institutional investor is getting their capital from individuals. And there's much more sensibility, which with the Glasgow meeting with all of the other initiatives now is here to stay. So every investor is going to be an impact investor, it's just going to be measured in a different way. Now, it's no longer valid to make money without asking questions. I mean, we're seeing that, for example, also with commodities, there is a very large French company Total, that no longer buys gas from one US company because they cannot certify where that gas was coming from. So there's going to be different prices for differentiated commodities. And that will mean that affecting the capital will only go to things that can make money whilst making an impact, as opposed to before saying, okay, I have to give up something. So it's a change in attitude in what people are ready and willing to be doing. So there's no way back and with materials, I think it's the same thing. We've gone from the digital evolution, and now we need to change and revolutionize how we manufacture things, how basically the different components in everything that we have today.

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Luca Venza  34:42  

I think that opens a whole conversation line around ESGs and the future of ESGs. We won't go down that road today. But I think it's fascinating because there needs to be a level of sophistication there that doesn't exist today.  

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Josep M. Pique  34:53  

I agree that I feel that the United Nations was doing a very good job. We have the 16 plus one challenges. Just very clear that it is challenging everybody in the world. And we have to see inside this box, what is the challenge that they want to solve? Because they can control the challenge of the pollution in the water, but what is my contribution to this big challenge. And if you understand that the challenge and also the purpose to love the problem, and we love the time means that we will transform this primate in a solution will contribute to a better world.

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Luca Venza  35:27  

Great. Well, that's our time for today. I want to really extend a thank you to all in just 10 seconds. Thank you to all of our panelists for being here. We're gonna extend this conversation into a workshop on co-creation, upstairs from three to five. Tony, would you care to join all of these topics to come up in the session that I'm running up there. Please, as always, approach our panelists outside at coffee for networking. They'd love to talk to you. So thank you very much!

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