When they were in kindergarten together at Tehiyah Day School in El Cerrito, Raphael Rosen was the only kid who could beat Brenden Millstein at the Minute Math game.
Those math duels, plus shared interests in hiking and the environment, helped trigger a lifelong friendship between Rosen and Millstein.
They ended up going to Harvard together (where they were partners in their physics lab) and spending summers as research fellows at Lawrence Berkeley National Laboratory. Eventually, they both worked in New York for different environmental concerns. But they wouldn’t be apart for long.
A year ago, the two Berkeley natives created Carbon Lighthouse, a Silicon Valley company that helps businesses, schools and nonprofits reduce their carbon footprint — at no cost to the client.
In June, Echoing Green, an organization that supports social entrepreneurship in human rights, health and the environment, selected Rosen and Millstein as 2011 fellows, awarding them a grant of $90,000.
In addition, they scored $80,000 from the Center for Social Innovation at the Stanford Graduate School of Business (where Millstein completed his MBA) and $8,000 from StartX (the Stanford Student Startup Accelerator).
They also landed free office space at AOL in Palo Alto.
All of that helped get their company going, Millstein says, but still, being 27 years old is a “pretty serious liability” in business — and both men are 27. They both got married recently, within months of one another.
“When we walk into a building, the people in the property management world are in their 40s and 50s,” Millstein says. “People can interpret what we say as ‘we know how to operate your building better than you do’ — which is true. Property management and engineering are very different things.”
While chutzpah may not land a new account, recommendations from satisfied customers help. Clients have included the city of Palo Alto, San Francisco’s Jewish Community High School of the Bay, Oakland Hebrew Day School and a number of office buildings.
Also, Carbon Lighthouse, along with two strategic partners, recently was selected by the Oregon Department of Energy to identify carbon and energy-saving opportunities at 56 schools throughout the state.
On one hand, Millstein and Rosen don’t have three decades of experience — unless one counts kindergarten. On the other hand Rosen says, “people are excited that younger people are working on these [environmental] problems and are committed to solving them.”
They also know how to speak to the clients’ bottom line. To wit, their website: “We believe that people like to make money. Call us crazy … [W]e think the way to motivate people to quickly become carbon neutral is to maximize their returns … In California, every dollar we save customers reduces CO2 emissions by roughly 2.5 pounds.”
Carbon Lighthouse takes on a job with no up-front money from the client; how the company makes money is by sharing the savings.
For example, suppose installing energy-efficient lighting in a 10-story office building costs $100,000, Carbon Lighthouse will raise money to finance the project. If the yearly savings are $40,000, Carbon Lighthouse will get $35,000 and the client $5,000. Over five years, Carbon Lighthouse will earn $175,000 and the client will save $25,000.
And after five years, the customer retains the entire savings.
Carbon Lighthouse donates some of its earnings to its not-for-profit arm, the Carbon Lighthouse Association, which competes with power plants for pollution permits (also known as carbon allowances). But instead of using those allowances to emit carbon dioxide, they “retire” them — handing the allowances back to the government on behalf of their clients, and thus balancing out their residual carbon footprint.
Growing up in Berkeley, Rosen attended the Reform Congregation Beth Israel and Millstein the Orthodox Congregation Beth El.
Rosen says both were “passionate about the environment,” noting that their Jewish upbringing made them aware of the concept of stewardship, service and caring for the planet.
After Harvard, Rosen headed to the U.K. to complete a master’s in physics at the University of Cambridge and Millstein went to New York to work for NYSERDA, a state agency that works on energy and environmental issues.
The pair met up again in New York, where Rosen most recently served as vice president of corporate development at Just Energy, a solar energy developer. But Millstein returned to the Bay Area three years ago to study at Stanford, where he received both an MBA and a master’s in engineering, with a focus on renewable energy.
While still doing graduate work, he launched Carbon Lighthouse, where he is CEO. Of course, he persuaded Rosen to be its president and co-founder.
With Rosen’s expertise in solar energy and Millstein’s in energy efficiency, the two bundled four engineering services into one package that could make their customers carbon-free: energy efficiency (improving equipment to maximize savings), demand response (optimizing energy use to help prevent blackouts), renewable energy (using solar panels and other local sources) and carbon allowances.
Both men are committed to Judaism.
Rosen, who lives in San Francisco, is a member of Congregation Adath Israel, wears a kippah and refrains from work on Shabbat or Jewish holidays. During the Sabbath, he spends time with his new wife, a UCSF doctoral student in neuroscience.
Millstein, who lives in Menlo Park, celebrates his “own version of Shabbat,” refraining from work on Friday night and sharing Shabbat dinner with his wife, Amanda Schwartz Millstein, a Stanford medical student whom he met at a Jewish student gathering.
Noting that Rosen “works nonstop most of the time,” Millstein is relieved that Rosen has Shabbat to decompress.
Explains Rosen, “I don’t like wasting time, rarely take breaks and I’m able to focus for long periods of time.”
Nonetheless, in his spare time, Rosen managed to write three novels — as yet unpublished.
And he had this to say about his co-founder Millstein: “I don’t know anyone else [with such] zest for life and enthusiasm. It’s quite a privilege to spend so much time working with him.”
While the Carbon Lighthouse website says the company’s goal is to make money for the client, Millstein emphasizes it’s not their primary aim.
“People should use our service because it’s the right thing for the country,” Millstein says, “and it’s right thing for our planet.”
Carbon Lighthouse is located in Palo Alto.For more information, visit www.carbonlighthouse.com.