The Powerhouse: Inside the Invention of a Battery to Save the World (9 page)

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hackeray and Amine could work anywhere. They could leave Argonne and strike out on their own, for instance. If they did so, one advantage would be leaving behind the requirement to vet their project ideas through Department of Energy bureaucrats, who could demand many pages of documentation solely to explain whether a new experiment would be safe. Yet they wouldn’t necessarily earn more money working in the private sector—government rules established in 1980 allowed recipients of federal grants, such as government scientists and university professors, to retain total or partial rights to their patents. Both scientists were reaping the rewards of their NMC work.

There were other pluses to working in a national lab, factors of which Chamberlain kept Thackeray and Amine aware as part of his job to manage sensitive souls with enormous egos. First and foremost was that, if you wanted to publish in respected journals and have your patents noticed, Argonne was a good home. The battery scientists were competitive—everyone knew they were in one of the hottest fields in science or technology and all wanted to make the next advance first and have it quickly adopted commercially. Argonne was on the leading edge of this particular science. The battery guys were sheepish about saying so explicitly, but they felt they fielded the strongest collective team in the country and perhaps the world, retaining their stars and attracting smart, fresh minds as postdoctoral assistants. If someone on the outside suddenly edged ahead, Chamberlain’s team became agitated.

It aggravated Thackeray to learn that Envia, the California start-up, managed to make batteries work 50 percent longer than his own team could. Thackeray’s wholly predictable reaction allowed Chamberlain to do what he did best, what he called “managing from the backseat.” Even though Envia was effectively an appendage of Argonne—it was improving on the lab’s own patent—Thackeray regarded it as
competition
. He began to push his team harder.

The battery guys would tell you that Chamberlain was hard to get in to see—he was so busy with his double job—but that when you did sit down with him, he tried to understand your ambitions and to create the opportunity for them to be realized. They cherished him for that quality. But they also knew that Chamberlain was a calculating boss with fixed aims, and the most fixed of all was the race. In practice, one meaning was that, even though Argonne was a government lab, technically owned by the public, they could not publish everything they learned for the very reason that a race was
under way. It was an iterative game. You wanted everyone to publish so that the field as a whole moved forward—and the scientists earned the peer respect accorded to prolific writing. But you also hoped to protect your own inventions—as soon as you published, you enabled your competition to use your inventions against you. Thackeray and Amine—everyone—understood that calculus. It was part of Chamberlain’s war-within-a-war.

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Chamberlain drove eighteen miles from home to Argonne every day along 75th Street through the suburbs that had grown up in the decades since the lab first plopped down in Tulgey Wood. He turned on Cass Avenue South, which eventually became a wide, picturesque road flanked by forest. Before long, he turned sharply right at a big, black sign containing Argonne’s logo—a triangle whose flanks were painted the primary colors. A mile-long drive followed through the forest planted at the beginning and ended at a guard shack where Chamberlain would show the badge hanging around his neck. Then he turned right into a sea of mostly red brick buildings, spread over the hundreds of acres. Within minutes, he would see it—Building 205, on a smaller black sign, also embossed with the logo. After fifty or so footsteps, he would be in the building.

Today, Chamberlain made a left toward the “dry room.” It was a state-of-the-art, moisture-proof setting customized for fiddling with advanced lithium-ion batteries. An air lock separated the dry room from the outside world. Inside, a slurry of carbon and NMC was coated onto rolls of aluminum, creating new battery cathodes. “It’s a nineteenth-century technology,” Chamberlain said, deserving of no place in such a lab. In labs he had seen in other countries, Chamberlain added in a whisper, scientists actually stood by and dipped a finger into the slurry in order to pass judgment on its quality. When Wan Gang was at Argonne, he was only Chamberlain’s latest Chinese visitor. A few months previous, the Americans raised the subject of lithium-air with a Chinese delegation and offered to help them develop the technology. But the visitors wanted to discuss only one subject—lithium-ion. The theme was: how do we get what you invented? Meaning the NMC. Chamberlain and his team were extremely cautious, silent. Argonne could build robots that automatically created a perfect slurry. It could invent the NMC. But China could not. “That’s where we will catch up,” Chamberlain said.

Perhaps Chamberlain was right. Thackeray and Amine could be the ones to make it happen.

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n June 2007, Sujeet Kumar and Mike Sinkula took up office at the public library in downtown Palo Alto. Kumar, a battery scientist born in India, and Sinkula, a San Francisco native, were using a public conference room there to talk on cell phones, print and fax papers, and organize meetings. For four months, they worked to raise $3.2 million in order to license and validate the idea that Argonne’s NMC 2.0, the advanced cathode that resulted from jolting NMC with a little more than 4.5 volts of electricity, could double the capacity and halve the cost of automotive batteries. They would spend the money to form a team of ten or so scientists who would build such an ultrapowerful battery. That would allow them to raise more cash and aim to manufacture it.

At the time, it appeared that, in the automotive world, only Kumar and Sinkula were aware of Argonne’s NMC formulation. They alone seemed to conclude that, if you were thinking of profit-making applications, NMC 2.0 was the most promising battery material available. Kumar had identified its properties at the Silicon Valley start-up company where he and Sinkula previously worked. The start-up, NanoeXa, sought to develop batteries for power tools, and Kumar, its chief engineer, had stumbled on the NMC after a months-long hunt for an edge over incumbent companies. He had examined hundreds of patents and academic papers on lithium-ion. The NMC and its second-generation improvement were superior to anything else he found. In 2006, he surprised Thackeray with a call about the invention. Until then, Thackeray had detected no industry interest in it at all, but NanoeXa’s CEO proceeded to license it for $150,000.

Just a few months later, Kumar and Sinkula both left NanoeXa, explaining that they wanted to work “in another company.”
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To reassure their surprised CEO, they said it would not be associated with the NMC market. Within a few weeks, though, Argonne received another call from Kumar—he and Sinkula had launched their own start-up company. It would center around the NMC and be marketed to carmakers. In the coming years, the move on their own would be the subject of a considerable dispute with Michael Pak, NanoeXa’s CEO. But for now, fortune was with them. As Jeff Chamberlain had found in his own start-up stage, energy was the rage in Silicon Valley. Venture capital firms were competing fiercely for the most promising ideas. They had decided that renewable energy was the next big boom. But their eagerness seemed different from the past manias. It wasn’t just about money. The fever aligned with the Valley’s strain of politics, which generally vilified oil, embraced its technological rivals, and fretted about climate change. Here was a way for the venture capitalists to do well and do good.

Nationally and globally, a similar sentiment took hold about global warming. Barack Obama, at the time an American senator initiating a campaign for president, vowed to promote non–fossil fuel technology and reduce emissions of heat-trapping gases. But it was generally believed that whoever was elected, Democrat or Republican, would push through laws and federal spending to buoy solar, wind, biofuel—and battery companies. Silicon Valley’s venture capital community was prepared for these new policies and the commerce that would follow.

So Kumar sensed an almost physical reaction when, sitting before VCs, he launched his PowerPoint slide deck and said that the NMC, although more advanced than anything on the market, had thus far gone unnoticed. In Boston, a Harvard Business School graduate at a firm called RockPort Capital Partners “got very excited,” Kumar said. He asked to see Thackeray or Amine for himself. If what Kumar and Sinkula said was true, they would have their $3.2 million.

A couple of weeks later, Kumar, Sinkula, and two RockPort men flew to Chicago. Hearing out Amine, the investors returned to Boston and e-mailed a “term sheet,” an official commitment to fund them in exchange for half of their as-yet-unnamed company, to Kumar and Sinkula.

This was fast for Kumar. Despite his experience in start-ups, he now realized that he did not actually understand how funding worked. Back home in Fremont, California, he telephoned a college classmate of his wife’s.

Atul Kapadia was a principal at Bay Partners, one of the Valley’s oldest venture capital firms.

“RockPort is funding me, but I don’t understand the term sheet,” Kumar said. “Can you help?”

Mumbai-born Kapadia had an MBA from Stanford and a bachelor’s in biomedical engineering from the University of Bombay. He had gone to work at Sun Microsystems straight out of school, assigned to a design team that produced the Spitfire, a chip that later would be called the fastest in the world.

Kapadia had questions, starting with why Kumar was seeking money on the East Coast when the biggest VC firms were in the Valley. He suggested that Kumar and Sinkula drop by his Palo Alto office with their slide deck.

Two hours later, after hearing out the pair, Kapadia rang Kumar’s cell:
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will fund the idea, he said.

Kapadia offered essentially the same terms as the Boston group—$3.2 million for half the start-up, a standard offer in Silicon Valley venture capital. But as a demonstration of goodwill, he was prepared to cut Kumar a check immediately for half a million dollars so he could start working right away. Kumar could consider it a loan until the details of the equity investment were arranged.

Looking back later, Kumar had the feeling that he could have raised much more—$5 million or even $6 million—for the same equity share. His idea clearly was solid—after just a few calls, he and Sinkula already had two bites. But that was hindsight. Now he had to create a company. He accepted Kapadia’s rival offer.

He and Sinkula called their company “Envia Systems” and opened their lab in a small, new industrial park in an East Bay suburb called Newark, tucked amid a hive of tech start-ups. The company name was Sinkula’s idea, combining “en” from the word “energy” and “via,” from the Spanish for “way”—the way to energy.

Kumar called Chamberlain. “I’m ready to license again.”

Kumar’s agility surprised Chamberlain. He had orchestrated the deal based almost solely on an idea: he had no prototype in hand. As for intellectual property, he had only a written offer from Chamberlain for a nonexclusive license. “How did he pull it off when these VC guys are so cutthroat?” Chamberlain wondered. One lesson again was the timing—Kumar and Sinkula had struck precisely when the market demanded someone like them. But there was more to it. Venture capitalists did not say so explicitly, but technology, while important, was not their primary concern. They looked closely at a venture’s management. Their key question was, “Have they done this before?” Meaning, had the entrepreneurs involved carried out a prior venture deal that resulted in a big return? If they had, the investors would be exceptionally courteous and forthcoming with their cash. Chamberlain acted out the repartee in such a case:

You have already made my fund hundreds of millions of dollars. You are here to ask permission to do it again for me? Yes, please. How much money do you need?

Kumar had not earned anyone hundreds of millions of dollars, but he had “done it”—he had helped to lead three previous start-ups, which again was the core credential. It was what made the difference. He could approach VCs and say, “Look, here is a new opportunity. I don’t have the license deal yet, but you have to act fast. Here are the terms we’ve agreed on with Argonne.” “And, bang,” Chamberlain said, “you have three million dollars. He got it immediately.”

By comparison, Chamberlain had crawled Sand Hill Road just a couple of years before. When asked about his prior experience, Chamberlain replied that he “absolutely” had built a business from scratch—at Cabot. But venture capitalists felt differently about achievements within a big corporate setting. It wasn’t the same as success on a tight budget with a small staff and the risk on your own shoulders. Their reaction was “No, you haven’t done it.”

At Argonne, Chamberlain stood out because of his industry credentials and the lucrative deals he had negotiated. But a start-up was different. Kumar showed how a star played the venture capital game.