Ten years ago it was fashionable to say that you worked for a dot-com company, or better yet, that you had started a dot-com. These days, it seems dot-com has been replaced by anything related to the environment, especially clean energy. Perhaps the title of my post should read especially in Alberta, as it should be no surprise that energy is a big deal here. Clean energy (read: not oil) is still somewhat unique though.
A number of investors who made lots of money during the dot-com boom are now turning their attention to the environment. Vinod Khosla is perhaps the most high-profile of these investors, but he’s certainly not the only one. Here is a VentureBeat article on Khosla specifically, and a great Economist article on the trend in general.
Shane and Evan Chrapko are two Alberta boys that have followed the now predictable path from dot-com millionaires to clean energy entrepreneurs:
The one-time Brosseau farmboys are co-CEOs at Highmark Renewables, a new biofuels company based near Vegreville.
They were impressed with the technology developed by feedlot owner Bern Kotelko and the Alberta Research Council to convert cattle manure and other waste to a biogas that produces electricity, ethanol or plain heat, Evan says.
The dot-com they founded was called DocSpace, and they sold it for a cool $568 million USD, which gave them about $75 million each. If you do a search for DocSpace now, you won’t find much, and that’s hardly surprising. I attended a talk that one of the brothers gave at the University of Alberta a few years ago, and I simply could not fathom how they sold their company for that much money. They definitely made the most of the boom.
It’ll be interesting to see how successful Highmark becomes. The brothers took on another company back in 2003 called Time Industrial, and had this to say at the time (careful – Word document):
“But Time Industrial has a very real possibility of being 10 times or even 100 times bigger than DocSpace. It’s a second once-in-a-lifetime chance. You don’t get too many of those.”
That company went public in 2005, for far less than DocSpace, and the brothers have now moved on to Highmark (to be fair the company was bankrupt when they took it over). They have (thankfully) toned down the hyperbole, and they’re operating in a really hot sector, so maybe they’ll find success once again.
The Chrapko brothers no doubt got this article in the Journal because of their success in the past, but I’d be willing to bet there are dozens of similar stories to be told here in Alberta. Perhaps not with numbers as large as DocSpace, but certainly entrepreneurs transitioning from high-tech to energy.
Read: Edmonton Journal (Archive)
4 thoughts on “Energy is the new dot-com even in Alberta”
Docspace, about 2-1/2 years old at the time, had about $200,000 USD in revenue (a large part of which was revenue from a customer that also had shares in their company) when they sold it and less than $300,000 USD in revenue the year that Critical Path (who bought Docscpe) owned it, even though the Chrapko boys assured Critical path the revenue was going to skyrocket. Clearly this deal was one of those crazy ones done at the height of the dot.com craziness. Critical Path didn’t know what they were doing and some of their senior execs (for other reasons) ended up being charged with fraud and convicted. I am not sure that the Chrapko boys are talented in more than just hyping their latest ventures. Time Industrial was a failure and didn’t even come close to their lofty predictions so they bailed.
Thanks for the comment. I have to give them credit for taking full advantage of the situation in which they found themselves, but yeah, I shake my head at the same time. Thx for the info.
These guys are totally full of it. The engineers at docspace were good, and that was the only part that survived at path.
Meanwhile, the chrapkos told and retold the story of docspace to anyone that would listen. From rags to riches. Farming to Fame. If you believe them, they had a vision from god, and created the next best thing to a moon landing. Something world changing. They were brilliant, and they did it all on their own. $300 million. $500million. $568million. $800million. Everytime i read about them, the amount of (paper) money made goes up. In reality, no one made a lot of (real) money on this deal.
They clearly believed they had the midas touch. So much so, that every investment since (including Time Industrial) has gone nowhere. How does a tech company in Alberta focused on oil and gas not make millions? The chrapkos found a way.