Damien Steel, CEO, Deep Sky

Around half a year back, I made a pivotal career move that’s set to steer my professional life in a whole new direction. Leaving behind nearly two decades in the venture capital scene, I stepped into the CEO role at Deep Sky, an ambitious startup looking to tackle climate change. Venture capital was my bread and butter — a world that both challenged and rewarded me. It provided me the opportunity to collaborate with some of the world’s best founders and business leaders in the tech domain. They taught me the importance of risk-taking and the unwavering dedication needed for success in burgeoning startups and emerging industries. When I took the reins at Deep Sky, my aim was to bring these invaluable lessons from industry giants to our mission: building the world’s first gigatonne scale carbon removal projects.

Venture capital also taught me how critical it is to kickstart an industry. I’ve seen promising ideas fizzle out simply because they misjudged the market or failed to evolve alongside the changing ecosystem. While some businesses thrive independently, others rely on the entire industry's growth. I firmly believe the carbon removal sector falls into the latter category. That’s why Deep Sky’s strategy revolves around partnerships. Our mission is colossal, and we’re convinced it can only be accomplished by collaborating across the industry.

I thought I'd share some early observations on the carbon removal industry. To be clear, I'm not a climate expert — I'm still diving deep into the rabbit hole of learning! My viewpoint is rooted in fundamental principles and lessons learned from successes and failures across various industries. I don't claim to hold all the solutions, but I share these observations and insights in hopes of rallying the industry so that we can have a meaningful impact.

We can’t do it alone

‍I've encountered numerous startups in the carbon removal space attempting to handle every aspect themselves – from inventing intellectual property, manufacturing, procuring renewable energy, storage, to sales. While this might be common in the early stages of an industry, I believe this approach is flawed in the long run. While it might sound self-serving, I strongly advocate for the necessity of two distinct entities to achieve rapid scalability – one focusing on creating intellectual property (the Technology Developer) and another dedicated to scaling it (the Project Developer). This parallels the renewable energy sector's structure. In that industry, most developers don't involve themselves in manufacturing solar panels or wind turbines. Likewise, the companies responsible for creating these panels leave the planning, funding, construction, and operation of renewable projects to specialized developers. These are fundamentally separate domains. I genuinely hold the belief that this model will guide the carbon removal industry's evolution and is imperative for meeting our goals within the required timeframe.

As many naysayers like to point out, the challenges ahead of us are obvious. Lowering costs, addressing the scarcity of renewable energy on a global scale, and scaling faster than many other industries pose significant challenges. Tackling these hurdles independently won't achieve the speed required to make a difference. At Deep Sky, we firmly advocate for the strength of partnerships. The good news is that in my three months with the company, every meeting of significance has ended with the other party affirming, "This ranks among the top priorities for our organization. We're fully committed. How can we contribute?"

We need to think bigger and sooner

‍I've collaborated with numerous startups over my career and understand the daunting nature of the early stages of company building. It's tempting to singularly zero in on creating the initial intellectual property (IP). However, I believe this can be a pitfall. The most successful startups start with monumental ambitions right from the get-go. For instance, if you're developing carbon removal technology, envisioning how to scale past 1000 units from day one is critical. This “working backwards” mindset not only aids in attracting early investment (a tip for you: investors appreciate ambition!) but also helps avoid unnecessary pitfalls in the company's early development. Here's the blunt truth: unless startups in the carbon removal space can demonstrate their scalability to both investors and buyers early on, most will struggle and eventually cease to exist.

Thinking big also extends to capital. Undoubtedly, fundraising can be challenging, but I've encountered too many startups in this field excessively concerned about dilution and fixated on achieving more with less. This isn't the path to building a significant company. The early dilution you face won't significantly impact the end result. When raising capital, your focus should solely be on attracting value-added investors (at times a tough task!) and securing as much capital as possible.

A final note on fundraising (admittedly, this deserves its own discussion): every CEO should dedicate a small part of their week to fundraising—it's a never-ending process.

A quick note to any investors out there that might be reading this. It’s time to rethink your traditional investment models. Yes, this industry will require significant capital and much of it will be used to fund the build out of real assets. However, there will be real winners. The problem is unmatched in terms of its importance and the world will soon wake up to the fact that we need to build an industry multiple times the size of the oil and gas industry and fast. There will be enormous companies that will be created to support this cause.

The tail winds are real, and all the building blocks are present
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‍In all my years exploring new markets and opportunities, I’ve never come across an industry propelled by such strong tailwinds as what I've witnessed in the carbon removal sector. The carbon removal industry has all the foundational elements essential for becoming a huge industry: a wealth of brilliant minds, substantial investment, and a growing customer base. This reminds me of a great piece written by Paul Graham, co-founder of Y Combinator, where he contends that the key to Silicon Valley's success in birthing world-changing companies boils down to a simple formula: nerds and rich people (http://www.paulgraham.com/siliconvalley.html).

Undoubtedly, the carbon removal space has incredibly smart founders —I've engaged with an impressive number of brilliant minds focused on carbon removal within just three months. Additionally, the venture community has finally begun recognizing and backing these startups. Notably, customers are stepping forward earlier than seen in most industries. Companies like Amazon, Microsoft, Shopify, banks and buyer collectives such as Frontier have committed to pre-purchases, actively propelling the industry forward. Let's be clear: this level of early customer engagement is a privilege rarely experienced by most industries. These are all necessary ingredients to building huge companies and we have them in carbon removal!

I understand I’m biased in the following, but I sincerely believe we are on the cusp of a multi (and note I said multi!) trillion-dollar industry. But as I am quick to remind most of my friends when I go on my rant about the opportunity, the size of the opportunity mirrors the size of the problem. Carbon removal does not give us a pass on all the other life changing habits we need to make in order to tackle climate. It’s just one piece of the solution - but an important one!

To our early partners, you inspire me. One of the many joys in this job is working with likeminded leaders and companies who genuinely want to change the world for the better. (cc: Mission Zero (we're hiring!), Equatic.tech, Airhive, Carbon Atlantis, Captura, Climeworks)

To all those in the climate industry reading this, I consider it an immense privilege to be joining you in the fight to reverse climate change. I hope Deep Sky can play a role as one of many needed solutions. History has proven that we as human beings have a remarkable capacity for innovation when faced with dire circumstances (take covid as a great example). I firmly believe that the moment to harness that capability is upon us.

We at Deep Sky remain unapologetically ambitious!