Expert Sessions | Founder Support with Ryan Kushner

Earlier this year, we hosted a series of expert learning sessions to help shape a long-term strategy for Work on Climate—one that’s grounded in the realities of an ever-evolving political, social, and economic landscape. These sessions brought together practitioners who have driven real impact by building climate-focused ecosystems, communities, and workforces across a range of sectors and scales.

Our next expert, Ryan Kushner, is the author of Accelerate This!: A Super Not Boring Guide To Startup Accelerators And Clean Energy Entrepreneurship. As cofounder of Third Derivative, the world’s largest climate tech accelerator (RMI + New Energy Nexus), he led the design of a global commercialization program uniting 225+ startups, $7B in venture capital, and corporate partners like Netflix, FedEx, Microsoft, and Shell.

This interview with Ryan will focus on his leadership of Third Derivative, a global climate tech acceleration ecosystem.

The concept of Third Derivative was to bring the ecosystem into one room: to get the corporates, the venture capitalists, and the innovators together.

Can you tell us about the conception of Third Derivative?

I was working for the California Clean Energy Fund/New Energy Nexus, where we were setting up climate tech accelerators all over the world as a nonprofit. Rocky Mountain Institute approached us and said, “Ryan, you wrote the book; this is what you do—you set up accelerators. Is there a world in which we can collaborate and make this?” 

We started sketching out the program on the back of a napkin, and it was a great project because RMI said, “Let’s make a great program—what does the world need?” It was an opportunity to have a blue-sky, blank-page approach to making an awesome program.

How did you decide to create a program with this particular scope?

The concept of Third Derivative was to bring the ecosystem into one room: to get the corporates, the venture capitalists, and the innovators together, and to have everyone row in the same direction. 

We’d do the job of finding great startups, pulling them together, helping them speak the same language, vetting, and listening to their corporate partners to understand their needs and how we could help fill those.

We focused on what really needed to be done, concentrating on carbon capture, steel, cement, petrochemicals, building technologies, and other sectors. We also looked at where we could add value as experts in the field: understanding long-term climate trends, understanding business, and identifying the gaps where we could make a difference.

How did you bring your first partners on board, and what convinced them to join?

The theory of this is covered in the book: it’s that any corporation that gets involved with an accelerator either wants to buy the products and services, they want to know what’s coming out of the pipe and see what’s new/interesting, they want to invest, or perhaps they just have some money in a CSR bucket. 

RMI has a great reputation, and they already had a lot of corporate partners, so it was pretty easy to get our first calls with four or five potential partners. Once we had them, it was easier to bring others on board. It’s all about relationships, trust, creating value, and trying to make good on a promise.

Accelerators are money takers, not makers… But they can do a lot in terms of bringing great minds together.

How did you make sure your support was actually helpful to founders?

At Third Derivative, we knew it would be selective—we have about a 5% acceptance rate. So we built in, right from the beginning, a system for giving people honest feedback so even if you spent five hours on an application and didn’t get into the program, at least you could get feedback, reapply and join our virtual community. I write more about this in my book, in the chapter called Serving the Rejected.

For the people who do get into the program, it’s about being aware that every company is different and everyone’s really busy—as an entrepreneur, you don’t need more meetings on your schedule. We have monthly meetings with founders, where we ask them what their problems are, what they’re dealing with, and we help them clear out the blockers. They can just get to work and figure out how their business can be better, faster, smarter.

That’s also what we want from a change model—as a program and as a nonprofit—we just want these companies to grow as reasonably fast as they can so they can succeed and solve problems.

What are some of the most important activities in running Third Derivative, and which of them are the most important to get right?

You need to have your financial books in order as an accelerator. The hardest thing is to have a donor base or a corporate base (or whoever’s paying for your program) pay in a sustainable way. As the vicissitudes of the market come and go, companies come and go, and staff of the companies come and go, you need to continue to build your program over the long term to create a reputation and have stability. Honestly, that’s the hardest thing for accelerators—figuring out who’s going to pay for your services.

Second to that, having great applicants and being able to vet them assiduously, because you sort of live and die by your reputation of having great companies in the accelerator. Those are the top two things: making sure you can run your organization, and then getting great companies. After that, a lot of it kind of takes care of itself.

What are the advantages and limitations of the accelerator model?

Accelerators are money takers, not makers. It’s a terrible business. There’s only a few examples of accelerators that make money. And so I would look at it as a loss leader—it can’t solve a financing problem because it can’t even finance itself. But accelerators can do a lot in terms of bringing great minds together.

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