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AI Start-up Ideas in Climate Tech, AI, Green Energy - 100xFireside Chat Ep3

If i wanted to build a career in ai and had i known this that's a nice blueprint for how you can actually get into the carbon space as an ai engineer me and sid we launched india's largest chain of backpacker hostel two of india's largest chain of backpacker hostels if you're thinking of building a startup then this is a17 trillion market. Okay everyone in the chat guys sachin. And i go long back we've known each other for like about 10 years both of us met each other at a time and both of us dropped out of college at very different time very colleges. But we just happened to drop out of the out of colleges around the same time and we joined our first startup together and started learning about digital marketing that was the thing back then digital marketing was like the trend we rode that wave for a very brief while we did like an agency stint both of us loved traveling so we worked in the travel industry for like 5 years and after working together for 5 years we just parted ways after that started working on our own things basically that's pretty much who sain is. I think the conversation will tell you more about who he is. And what we have to uncover in this session mainly we're going to talk about sain comes from the climate tech space he's been in that space for about fiveish years. And we'l be just uncovering possibilities of how can there be a marriage of generative ai and climate tech and how hand inhand do these both domains go in order to solve real world problems and i think there are a lot of real world problems that can be solved because both ai and climate tech are pretty much two of the most trending and out there things especially in this year as well as last year and the and a few years to come as well so very interesting stuff to uncover thanks for that in-depth introduction i was talking to sid yesterday and we were talking about how he is working in the like in the ai space the core ai space. And i'm working in the core sustainability space and i personally believe that these are the two biggest trend global trends at this point in time so i would like to just begin with that. And i can't even begin to imagine the amount of value that we'l be able to create just by marrying these two domains and real impact a lot of real impact can be driven and that's exactly why i'm working in this so while i was working with sid i was working we me.

And. Sid we launched india's largest chain of backpacker hostel two of india's largest chain of backpacker hostels it's essentially a. Yeah. So while we were working there we were essentially dealing with a lot of properties small and mediumsized properties and i was looking for a real problem statement that i could solve so then i realized okay electricity consumption in small and medium-sized properties is a big chunk of their operating expenditure which they have to spend on a regular basis. Right. So i was like. Okay. I know that this is a paino of these property owners how can we solve this just first principle approach to everything then i realized. Okay we can build an iot solution which is optimized for small and mediumsized properties which essentially does energy management but most of the energy management solutions were essentially for large scale businesses. So. Yeah just to cut everything short we built an energy management tool which collects data from properties helps them predict which equipment is going to go off when and using all of that data we were helping them save a lot of money around 40% of all the electricity that they were consuming earlier they were saving then i sold that company off and i started lit which was my last company low suit was india's first carbon accounting tool it's essentially a tool that tells companies what's your carbon footprint and it's a very complex job to do it requires like data gathering from a lot of different operations of a company and then putting together it together in the form and of an analytics platform and there we use a lot of ai basically in analizing graphs and charts and giving insights actionable insights to the so our focus isme we are not going for large scale organization though we work because a lot of we get a lot of inbound of brands like unil decathlon and all of that. But we with intent we only go after smes and we are they're going for solving for smmes. So. Yeah. So they require they do not a lot of them do not have the knowledge or the what do you say the back the formal background to be able to or the time to be able to analyze that graph and derive insight and then integrate it into their strategy that requires like a lot of expertise so what we are doing is we are basically eliminating we're trying to eliminate we can't say we have done that yet completely. But we are trying to eliminate that sustainability expert that companies currently require in order to analyze that data and take action so we've sort of spoken about your background.

Etc i think everyone is like up to speed and has context but in order to go further i want you to define the climate space because it's a very niche space like when i think of when most people think about the climate space they think of nos and you know a very sort of a doing it for the good of the planet there's no money there that kind of a whole perspective sort of comes into it uh. But i because i've known you and i've known that what you've been doing i know that there's a whole opportunity that a lot of people don't really tap into and it's a very niche space can you talk about that a bit on what are the kind of opportunities there what are people in climate tech spaces doing what kind of companies actually do exist etc got it got it so first i would like to say that 70% of all emission comes from businesses okay on the planet on the planet. Okay. So businesses control most of our emissions but they make us feel guilty saying that we have to reduce our carbon footprint by so if you are not changing your lifestyle it's your fault even if you do change your lifestyle it's a very controversial statement i'm not saying you shouldn't change your lifestyle you should do it because it has other benefits as well but just if you are doing it out of the guilt. That. Okay. You are not contributing enough that's the wrong motivation most of the emission happens because of companies and as a result i'l talk about i'l focus on just that bit.

Okay so for a company to become a net zero entity so basically the world is aiming to become net zero. And that's the only way we can tackle climate change. Okay now to become a net zero entity you need to first track to know what where are where do you stand today just to evaluate once you've evaluated yourself you have to reduce your emissions as a business entity and then once you have reduced your emission by bringing in different kind of strategies i'l deep dip into it then you have to erase your emissions remaining unavoidable emissions you have to erase okay by investing in green projects deforestation. Etc right so if you look at this space this way it becomes very easy to look like to understand it basically track reduce erase so in tracking there are opportunities like softwares like us which give carbon intelligence. Right there is there is opportunity for softwares that facilitate transaction basically track different activities of a company to give a carbon footprint right in reduce you have all sorts of application so once you have tracked and you know that as a company your carbon footprint is 100 bill billion tons or 100 million tons now to reduce what will you do you will employ ev you will ensure that the waste generated is basically recycled again all of that. Right so there is a plethora of different applications that a business can adapt in order to reduce their emissions and then once they have reduced they can upset so now within all these you have a lot of opportunities right soft i was just looking at a software which essentially gives you waste management intelligence it looks at all the waste that you produce. Okay. And then it tells you what is the percentage of that waste that you can reuse right and hence reduce the so there are a lot of ai applications there even in tracking i told you basically risk assessment predictions about the future looking at past trends is a great application right deriving insights from existing data and communicating it to the smme in a very simple language is another application working with banks to basically look at their entire portfolio and giving them insight. That okay all your investments in india are going to face a lot of risk with respect to climate in next 10 years so then they will look at their investments in a different way so there are a lot of different applications of ai across track reduce erase.

Right so can we establish that everything that happens in the climate tech space is basic basally centered around how enterprises and these businesses can actually figure out a way in order to bring their carbon emissions down to net zero that's the ideal goal. Yeah that's the central mission that every single climate tech is centered around is there any other narrative there are narratives there are a lot of different narratives. But why i'm talking about this narrative is because in 2015 200 nations from around the world gathered said. The global. Yeah. It's called the paris agreement which basically established that the world agrees that we have to become net zero by 2050. So that's the common goal of all the governments. Right. So it's. And. Yeah. And it's science bagged. It's bagged by the top most scientists in the world. So right. Uh yeah and heavily vetted heavily criticized everything so i would want to align myself with that goal so that we need to work as a team. Right it's a the clock is sticking we don't understand so we need to work as a team so that's what that.

So the one question that i have is so the un basically announced that as a goal but not everyone is really tight like sure you can have prime ministers and presidents of every country going there and saying like yes i will agree to this but they might as well not do it in order to increase profits or whatever it is. So how does that ecosystem work wherein they actually incentivize what is keeping these countries and the companies in line so that they actually follow this awesome so great question amazing question so basically what's happening is that it's not just that we've signed that agreement we are bringing in policies in order to pressurize businesses to start tracking their emissions for example india came up with a policy wherein they mandated the top thousand companies by market cap to mandatorily disclose track and disclose their emissions not only their direct emissions their supply chain emissions as well all their suppliers everyone had to disclose so now what's happening is that if reliance has to disclose then their entire supply chain has to disclose right which is having a which is essentially top 5,000 smes in india. Right. So government is very smart they are basically putting regulations on the to top folks and that is having a trigger down effect on the economy and they are not facing the backlash so that's how you do it you bring in the regulations and the regulations are coming in it's just that it's not but what are the incentives for them to actually go into it other than you know like there's a stick but what's the carrot so the incentive is you get better loans you want to say if you are an exporter in india from 2025 you won't be able to export to a top european client because you don't have your carbon footprint disclosed it's called carbon border adjustment mechanism so your eu is saying whatever you import sorry whatever you basically export to europe you have to pay a tax on it if you do not and that basically that basically that's okay. You can see so that basically up their entire business model. And. Yeah. Okay got it. Okay. So now there's incentive is there any incentive for the government to implement it.

Yeah of course because when you are implementing these strategies you are unlocking a lot of underlying efficiencies for example if you compel companies to operate more sustainably what will companies do they will find ways to optimize their energy consumption what will they do to optimize their energy consumption they will either bring in better appliances or better machinery or they will basically switch to a cleaner grid. Okay. So that gener creates a lot of employment. Right. So it has a lot of different things the pollution. Okay. So this is basically the big incentive for the government at the end of the day is basically increasing aggregate efficiency right increasing aggregate efficiency that's exactly what they're looking at and if they bring in these regulations aggregate efficiency will take care of itself. Right. Okay do you want to give context to what is aggregate efficiency and how that term itself is defined by the way guys i want this is like one of the best things that i've ever sat through i've watched it like three four times in my life there's this video called the third industrial revolution on youtube. It's a one and a half hour lecture by this guy i think everyone should watch it's it gives you a whole new perspective. Yeah. So i think s. I don't think i'l be able to do justice to what he said.

But we'l like we can share the link with them and i can quickly tell about what aggregate efficiency is it essentially means me how efficiently does an entity functions that's what it essentially means and it depends on a lot of underlying levs for example if 5g if 5g comes in it changes the aggregate efficiency of the entire nation. Right if all cars could become electric it will change the aggregate efficiency of in like everything like where whichever i actually i actually just remembered an analogy that guy used so when a plant takes energy from the sun and there is a certain amount of energy that is stored within the plant and when i eat the plant only 10% of that total energy is transferred to me. Right. So that's why when i eat an animal that's basically 1% of the total energy being transferred to me because that animal eats plants. And i'm eating that animal so there is a lot of energy that is lost in the conversion from one entity to the other there's a lot of energy that is lost in from raw material to finished product.

Yeah. Exactly so when you minus that and what remains as the final profit is known as aggregate efficiency basically right and the top and the best country to achieve aggregate efficiency is japan. They i think they achieved 1 20% the peak. Yeah something that. Yeah. The best country to agre to achieve aggregate efficiency is at 20% which sounds very poor if you think about it. Yeah. So that's what he said where is the remaining efficiency lying so it we are basically we have 80% margin in terms of so all that efficiency is lying in doing all these kind of things like changing the underlying infrastructure of the economy going from fossil fuels to renewable resources. Etc right got it uh. Okay. So i think you've defined the climate tech space quite well there's one singular problem that everyone is working on solving there's a huge movement of governments around the world that are actually making it happen and there are incentives for these companies in order to work towards that problem there's a market and i was going through this report comparable to ai i would say comparable to a absolutely so i read a report by i think pwc or one of these big consulting firms and it was it's called a global risk report and were two things on top which really didn't surprise me. But it was good to see them there on top number one. So the global risk report is a report that basically tells what are the biggest risks that we as a planet and as a species face across the globe in that particular year for 2024 the biggest risk was climate change and the second biggest risk was ai based misinformation and disinformation elections basically like us is having their elections india is having their elections deep fakes are on the lose people are using voice transformers like that.

Yeah essentially and there is no regulation around it right now there are no bills that are passed there are only guidelines so you might as well do it and get away with it right now while you still can in order to get that power so that kind of validates that these are two of the biggest problems on the planet right now not problems but also opportunities since we are you know looking in the sense of businesses. Uh. Yeah problem hence and hence opportunity. Yeah. Uh so when i think about climate tech what comes to my mind obviously is lot of use cases around predictive analysis i know that a lot of startups are working on you know predicting the weather better so that instead of having 3-day accuracy they can have a better accuracy or whatever it is then there is a lot of things around predictive analysis because what you're dealing with across these companies even to calculate like you said carbon footprints you're dealing with big data from not only a company let's say like reliance but also all its conglomerates all its supply chain vendors everything this whole thing has to be kind of integrated and if you want to really move a lever in order to make an impact you need to suggest a lever that is applicable in the least amount of friction so that you can get it done fast and it can make that kind of an impact across the entire chain. As well right what are the use cases that you see in particular to ai i've covered it on an umbrella fashion using bucket terms like predictive analysis big data and all that but can you talk about a few very specific points where generative ai in specific if at all can actually help out in this climate tech problems that do you want me to talk from problems that can be solved or do you want me to talk from. Okay let me let me just do it personal carbon footprint tracking is becoming a thing a lot of people who are climate conscious have started tracking their gard and where i see ai can disrupt here is to basically ai can learn from their habit patterns by integrating with different data apps that they use for example for writing they're probably using uber for shopping they're probably using amazon and all of that and that data can be taken in order to help them take better decision on the go right. So that's one application just it's. And it can be relate it can be like anyone can adopt it anyone who live wants to live a sustainable life. And then you can build business models around it and figure out how to monetize it so that's one secondly companies like for example a company like c company like koch has operations in more than 200 countries and they have probably five lakh suppliers so how the temperature of the planet changes impacts their supply chain in weird ways. Oh okay tell me more for example let's assume that colombia is one of the their major consumption country in south america and because of climate clim change they face large scale floods more frequently as a result their distribution like people who will take a cook bottle and distribute it to that last shop from where the consumer will buy it that won't happen right and that way since they have global operations if these events happen more frequently which they have already started happening it's going to frequently cost them money.

Right. So that's a risk it's going to basically lead to a lot of losses now if you calculate the amount of money you lose for the next 15 years that amount is only going to increase so it's like increasing in a compounding fashion. Yeah like you never know like what happens to bombay in next 50 years. Right. So when these companies sit and they decide a strategy for their company they're thinking of next 30 years and for that they need to be able to do climate modeling which requires prediction basically for prediction that's where wow that is insane that is insane so that tells them that. Okay. How should you reallocate your resources such that in next 15 years you will be able to mitigate the risks that you foresee today and it sales billions and billions of dollars it gives them competitive edge and like almost monopoly like advantages at times in the long run so risk assessment is a big thing.

So it basically tells them that okay next year there is a high likelihood of a hurricane hitting indonesia. So what you should not ship a lot of coke bottles over there something like that. So. Yeah. In. Yeah. So that also that's more very real time. But it does more of like you need certain puts right to be able to plan your strategy for next five years i want to know. Okay. I have1 billion how do i allocate this1 billion so that they make value create value for me for the next 30 years or for the next 20 years. Right so when i'm allocating this resource i'm thinking about.

Okay. You know what all are the risks that are associated if i invested here so there you also look at climate related risks they are extremely important so there are companies that just do that we are one of those companies like a part of what we do is that as well. But we do it for smaller entities there are larger companies that only work with enterprises only work with a coke so like that. So basically you can get a job with these companies work in their aits and. Yeah. Lots of lots of applications um. Okay so we've sort of covered i want to get to that job part after this. But i just want to explore a few more use cases so predictive analysis is sure you map out the weather patterns and figure out and this is obviously more applicable for companies where meteorology or weather patterns have a big impact in some way or the other and these are probably like fmcg companies or like maybe hardware companies that are like very niche what else do you see as a marriage of ai and. Climate tech. I do not understand it very clearly. But i know as a matter of fact that basically currently we lost lose a lot of energy by using traditional grid lines that energy consumption can be optimized a lot using artificial intelligence that's another application and another i said waste management so in waste management you can identify what amount of waste you can actually reuse so that the amount of waste you release as a company goes down. So yeah banks use ai to identify which companies to give loans to right so basically using ai they can study different indicators of a company which are released by companies on their sustainability report a lot of companies release sustainability report on their platform like or most of european companies and a large chunk of indian companies release their sustainability report so banks can basically read these sustainability reports better with ai and take better decisions on who to give loans to right so in banking that is the application uh.

So. Yeah like in manufacturing you can do better predictive like may basically most of it is prediction. Right it's very data and handling interpretation data prediction and stuff like that. Right. So if you want to predict the deforestation for that like you said satellite imaging there are startups that are giving intelligence based on that so there are come like a century plywood. Yeah es is huge in europe. So. Yeah. So like a century ply how do they make money they make money by giving fes flies come from trees need to be grown.

Right. So for this company some sort of a predictive analysis based on climate data right or satellite images will definitely help them take better decisions or grow better quality of forms right. So basic. Yeah everything kind of centers around data and predictive analysis. And i think a way to think about this is you got to find. And you would obviously be able to make a huge impact and do something really interesting only if you deal with problems that have a vast amount of data like you need to play around with some sort of a complex problem that looks easy to solve but isn't that easy to solve in reality. Basically right. And i would say keep it simple we have identified a path to the goal which is net zero track reduce offset so identify what are small applications of ai within these buckets and start that way like if i was to start if i wanted to build a career in ai i would have and had i known this it would have made my life easy because now i know okay in tracking what are the different use cases in reduction what are the different use cases and within those use cases then i can look at okay. What are the small problems out of the 20 things that it does what are the five things that i can do using ai and that's how you do it that's how things happen in reality that's how things happen so that's a great that's a great point that you brought up which is something that i've also realized by exploring generative ai which is what really. M everyone thinks that generative ai in itself is the golden goose which it is in some way but unless you have some knowledge of the domain unless you really know the domain inside out whatever ai that you learn is really point l you need to know where you want to use it basically you need to.

Yeah. Exactly you need to know what are you trying to do with it. Exactly so that is the first thing. So okay you have the skill set you know that these are the three main buckets go through like spend a couple of weekends go through all the different possible problems that you can work on then identify companies that are working on those problem statements and then reach out to them and be like. Hey i would want to do this for you i think that's a better way to go about it rather than uh. Yeah that's a nice blueprint for how you can actually get into the carbon space as an ai engineer what's the state of companies in india that are in this space like do you see similar companies over here or how early is india in terms of you know the climate tech space so i would say there's a there is more demand than supply of product of services in the climate tech space. Right so there are companies that are working one is en king. It's a it's a good company there is another company called upap they are also into climate intelligence only so basically the demand in india is increasing rapidly because government is bringing in regulations very quick last year th000 companies were mandated as a result five lakh smmes in india have to disclose which five lakh b2b market is a huge market it's not it's a very big market right.

And it's only going to become bigger. Okay. So there are so i mean what i understand from this is there's a lot of problems that need to be solved but not enough solutions around. Right so there are not enough there are solutions as well but there are not enough people who are solve like picking those solutions and implementing okay there is a lot of white space if you want to build a if you're thinking of building a startup this is the space to look at because at the end of the day you can't build a startup in ei you need to apply it somewhere. So once you if you apply it in a space then this is a 17 trillion market in the next five years. Right maret. Yeah. That's it goes hand in hand with what we spoke about earlier right or you can build a rapper and you can make some money for like 6 months a year or whatever if you have enough distribution but in if you want to make if you if you really want to build a company purely out of ai then you should get into deep tech you should you know build a foundational model like a sora or a gpt or something very foundationally deep tech or something which is robotics or hardware or something like that otherwise all ai is basically like a hammer it's a toolkit that you can use in order to build something else like a house or something like that and that's the magic that's when the justice will happen understand when you can actually utilize ai to solve real problem if i am right facing some pain and if you can't if you can solve that pain if internet was just a bunch of couple of websites and nothing else then it's a waste true. Right. So you need to we need to utilize this power to solve real problems and the most pressing real problem at this point in time is climate change and i would urge every young person here to definitely like explore that sp.

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