It’s a sunny morning in Camarillo, California, and the fields along Pleasant Valley road are full of berry pickers in colored sweatshirts moving swiftly to gather ripe fruit. I take a left turn down Calle San Pablo into an unassuming industrial park, the research and development center for Cool Planet, a young company that claims it can use leftover plants to produce a miraculous fuel: a $1.50 gallon of gasoline that also bolsters sustainable agriculture and even combats climate change.
I’m here to meet Mike Cheiky, the founder of Cool Planet and a prolific inventor and entrepreneur. In 1975, he started Ohio Scientific, one of the earliest personal-computing companies. He followed that with a string of startups whose innovations included biofuels, touchscreens, batteries, voice recognition, and fuel injectors.
Cheiky’s ventures have always done well raising money. Two weeks ago Cool Planet announced a $100 million round of funding from names like Google Ventures, British Petroleum, General Electric, and ConocoPhillips. All told, his last three companies — Cool Planet, Zpower, and Transonic — have raised at least $300 million from some of the biggest players in Silicon Valley.
A cheap liquid fuel that “reverses global warming,” as Cheiky puts it, seems like a fantasy. But the venture capitalists he works with are eager to open their checkbooks for ideas that everyone but the entrepreneur deems impossible. “People always say it sounds too good to be true,” says Wesley Chan, who led Google Ventures’ initial investment in Cool Planet. “That is exactly the kind of company I get excited about as a venture capitalist. We’re in the business of making big bets.”
The company's critics agree with Chan on one thing. “People say it sounds too good to be true because it probably is,” says Robert Rapier, a chemical engineer and the managing editor of Energy Trends Insider. “What Cool Planet is claiming, that is pretty much like saying if you raise the temperature and pressure enough, you can turn water into wine.”
Cheiky’s former employees have a more troubling take. “He is either the world’s most unheralded genius, or he’s criminally insane,” says a former Transonic engineer. “One thing is for sure. He is undeniably very good at parting investors from their money.”
Welcome to the Batcave
Cheiky’s private lab, referred to by employees as the Batcave, sits behind the Cool Planet building and across the street from Transonic his fuel-injector company. Zpower, the battery company he founded, was also headquartered here for years and is now a few miles away. Cheiky no longer works for any of them, preferring, he says, to research, innovate, and then pursue the next project. Still you get the sense, walking around, that he views them all as part of his domain.
"He is either the world’s most unheralded genius, or he’s criminally insane."
He greets me with a firm handshake, an imposing figure at roughly 6-foot-3 and 250 pounds. Cheiky sports an epic combover of dark black hair and tinted glasses that magnify his eyes — a mad scientist crossed with a linebacker. The first thing I see, walking into the lab, is his lavish collection of rare cars and motorcycles, including two Ferraris, a Maserati, and a Ford Cobra.
Down the hall he’s built a museum celebrating his accomplishments. The showpiece is the Ohio Scientific Challenger II, the best known unit from the company Cheiky created just after graduating with a BA in physics — his only academic degree — from Ohio’s Hiram College. In 1981, Cheiky says he sold that company for around $10 million. "We were the first personal-computer company to really cash out," he explains.
From there, he takes me on a dizzying tour of his subsequent inventions. "This was 1981, and we had a touchscreen with icons displayed as floating tiles," he says, gesturing to a brochure featuring a computer system called Centerpoint. "Basically an iPad in 1981." After that came work on natural-language agents. "We had a Siri-type interface working by say 1993, ‘94. Except ours was called Si," he explains. "You know, exactly like Siri!" Next he shows me photos from his electric car company, DEMI, which built the zinc-air battery that won a NASCAR-style race organized by the US Department of Energy in 1991. "The team that came in third, they became Tesla," Cheiky recalls with a grin.
The idea that he could have been a tech-industry titan has always nagged at Cheiky. "We were about six months too soon," he says of selling Ohio Scientific. According to Cheiky, Steve Wozniak used some of Ohio Scientific’s technology to build the Apple II. It’s one of many moments he relates that seems to tie Cheiky to the icons of Silicon Valley. "We were moderately successful, but had we been plugged into the California Intel scene, we probably would have been Dell."
The founder’s dilemma
Silicon Valley is fond of a parable called the founder’s dilemma. It’s the notion that the people who are especially good at creating companies, the thinkers who chase after seemingly impossible ideas and inspire a team, aren’t always suited to run a more mature business. Finding and funding these thinkers is what venture capitalists do — you can always get a responsible CEO later to clean up the mess.
"The guy is brilliant, there is no question. His IQ is probably in the 150s."
Cheiky fits the archetype of this itinerant genius to a T. "[Mike] is an early stage guy, he’s got big ideas," explains Mike Rocke, Cheiky’s right-hand man, who’s worked alongside him at his last three companies. "He starts things up, and then when things slow down and get into the commercialization aspect, he gets bored, and goes off and does something else."
Rocke, who walks with a slight limp and keeps his thinning gray hair tightly cropped, first met Cheiky when he was working as a venture capitalist for Intel in 2002. He led Intel’s investment in Cheiky’s third company, Zpower, then left shortly after and soon began working with Cheiky full time at Transonic.
When describing Cheiky Rocke is effusive, even likening him to Thomas Edison. "One of the things Mike can do is span all this invention and put things together for the next stage," Rocke says in an excited whisper. "Nobody can put together disparate ideas like he can … this is renaissance stuff."
The two operate as something of a tag team: Rocke solicits investments while Cheiky is the public face of his companies and a compelling draw for investors — an eccentric scientist who’s built a reputation over 40 years and five companies, from Ohio Scientific to Cool Planet.
But Cheiky’s entrepreneurial track record, and his science, aren’t quite what they seem. "The guy is brilliant, there is no question. His IQ is probably in the 150s," says a former employee who worked closely with Cheiky at Transonic. "The problem is he is using all the intelligence for evil."
What it’s like to work with Mike
In Cheiky’s telling, he’s a restless inventor who thrives on pure research, a man who enjoys founding companies but quickly grows tired and moves on. Current and former employees and executives at Cheiky’s companies dispute that. I spoke with more than a dozen of them on condition of anonymity, largely due to non-disclosure agreements, stock holdings in these companies, fear of litigation, and Cheiky’s allegedly explosive temper. According to some, Cheiky doesn’t leave his companies by choice, and has twice been pushed to resign from the companies he starts when board members and investors realize his research isn’t commercially viable.
One former employee at Zpower, a company that makes zinc-air batteries, recalls that engineers would prototype and assemble new units every day. But each afternoon, Cheiky would have the new prototypes driven to his private lab, where he would test them without sharing the resulting data. "It was total snake oil," says the engineer, who saw that data only after Cheiky left the company. "He was selling a revolutionary new technology that wasn’t."
Others recalled that his attempts to massage data could become dangerous. One former Transonic engineer remembers an experiment in which gasoline was run over a catalyst inside a chemical reactor. "He realized relatively quickly that he wasn’t getting the results he wanted ... he just started turning knobs left and right," the engineer says. "I thought it was quite dangerous." Cheiky pushed pressure and temperature above the safety limits this engineer had built in. "It was the most chaotic experiment I’ve ever been involved with."
He did plenty of research, but according to former employees, Cheiky’s grasp on that work sometimes didn’t match his ambitious vision. "There was definitely a way to create an interesting product there," says an engineer who worked at Transonic. "But Mike didn’t have any real understanding of what was going on. He named the company Transonic because he had this idea that the combustion was happening at the speed of sound. That had absolutely nothing to do with it."
It wasn’t that Cheiky was clueless. According to one engineer from Cool Planet, Cheiky was adept at recruiting talent. He was also brilliant at spotting market opportunities and designing technology that suggested a revolutionary — and timely — breakthrough. His engineers all praised the big, conceptual ideas behind Transonic and Cool Planet. But Cheiky refused to accept when things weren’t working as he predicted. It fit a pattern common among passionate founders, says the former Cool Planet engineer, and holds true for Cheiky more than most. "They have enough grasp of science to be dangerous, but not enough to accept they could be wrong."
Digging at the data
After showing off his awards and patents, Cheiky leads me through the Batcave and back to his rows of cars and tables of lab equipment. He grabs two plants borrowed from Cool Planet: the more robust specimen was grown with a substance known as biochar, he tells me, the other without.
"It was total snake oil. He was selling a revolutionary new technology that wasn’t."
Cheiky founded Cool Planet on the premise that he could break down plants into liquid fuel, water, and biochar, a sort of charcoal byproduct that can improve soil for agriculture. It’s why Cheiky claims his process doesn’t just make cheap fuel, but is also good for the environment. "Biochar puts carbon back in the ground," he tells me. "It holds more water and it’s also sequestering CO2. That's reverse global warming. That's the magic compound. I consider it the most important work I’ve ever done."
As the long oral history of Cheiky’s many accomplishments winds down, I explain that after interviewing former employees, I heard repeatedly that he was forced out of companies once investors discovered that his science didn't add up. He folds his arms across his chest, expression unchanged, barely missing a beat. "When somebody comes in to the company to be the president, they want to take over," he says. "People want to have extreme ownership, so they’ll come in and say whatever was done before was no good."
So why does he leave these companies after a few years? "I'm the lab guy, I'm on to the next thing," he says. "I've made lots of money, couple of yachts, lots of houses, and high-performance sports cars, but I really love working in the laboratory. That's my mission. To be the first person to do something."
I press him on the science behind Cool Planet. What about quantum chemistry, an esoteric and largely theoretical field, that he boasted was key to the company’s technology during a talk at Google’s Solve For X event? He responds with a bewildering string of scientific terms: zeolite catalysts, quantum wells, substitute benzene rings, angstroms, and hydrocarbon fragments. "This is not mystical or anything, this is standard quantum chemistry," he adds. "There is nothing novel or controversial about it. It’s just one of the many thousands of fields you need to have expertise in to do something like this."
I later run his comments by three experts, including professors in quantum chemistry and zeolite catalysts. They tell me Cheiky’s got his science a bit mixed up and is making exaggerated claims. But it’s not until I call the University of Wisconsin that I really find the smoking gun. I reach William Banholzer, PhD, a chemical engineer who previously spent eight years as the chief technology officer at Dow Chemical. "I actually use Cool Planet as a teaching example of outrageous claims that defy common sense," Banholzer says.
He means that quite literally: Banholzer has created a PowerPoint presentation using Cheiky’s claims from his Google Solve for X talk, along with early Cool Planet presentations and charts. He doesn’t need to know exactly how Cheiky’s patented process works to conclude that it’s wrong: there simply isn’t enough energy in most plants to get the quantity and quality of fuel Cheiky claims he can produce. "And if you’re going to make biochar," says Banholzer, "everything I just said about the amount of plant material you’d need gets even worse."
Banholzer is uniquely qualified to assess whether someone is selling snake oil or pitching solid science. In addition to working as Dow Chemical’s CTO, he spent years helping to manage its venture capital arm. He saw hundreds of companies claim to have amazing new technology and learned to separate fact from fiction. His lesson on Cool Planet is meant to help business students do the same.
"Students get sucked in, because they want to believe," says Banholzer. "They see GE and these other big people put their money in. Because these companies put their money in, the students immediately jump to the idea, ‘Oh well they must know what they’re doing, it means there is something pretty good there.’ So I use Cool Planet as an example of ‘Don’t forget your engineering.’"
Executives at Zpower, Transonic, and Cool Planet all say they’ve significantly changed or improved on their company’s core technology since Cheiky left. Transonic and Cool Planet executives added that they no longer rely on his patented "breakthroughs" as the core of their business at all. When asked about the claims Banholzer had dissected, Cool Planet’s new CEO Howard Janzen told me: "Some of those claims were in the very early days of the company, and since the time that I’ve been here we’ve been very careful to try and be accurate with the statements we put out, and that has not been one of the things we put out."
"They have enough grasp of science to be dangerous, but not enough to accept they could be wrong."
They’ve distanced themselves from Cheiky, so why do Transonic and Cool Planet continue to operate next to his private lab, in the tiny kingdom he’s been building for decades? In part, it’s because Cheiky’s reputation has thus far been an asset to these companies rather than a risk. Cool Planet says it’s moved away from his technology, for example, but the company still has many of his claims, slides, and patents on its website.
Even Mike Rocke, who lauded Cheiky’s brilliance several times, admitted in a phone call after my visit that some of Cheiky’s work in the lab was shaky at best. "Let’s get this straight. What I admire and respect Mike for is his early thoughts and innovation, okay?" After all, Rocke points out, creating viable companies isn’t easy. "I’ve been with these different companies and watched a lot of them not commercialize, or struggle to commercialize," Rocke says. "I’m a mechanical engineer and there are issues with his stuff. But the thing is, the initial ideas are the ideas that I like, the science and how do you get this proven, sometimes it doesn’t work out. Sometimes it’s not good. Sometimes it isn’t good science or it’s not provable science."
I later email this quote about "bad science" to Cheiky, who took it as a compliment. "So, my approach in early-stage development is to cover a lot of ground with very little money by flying through the test process and only cherry-picking for the most interesting and promising candidates for further later-stage work," he wrote. "I contend that this is not bad science, it is simply a super lean management style to move the company forward very fast with limited resources."
Under the rug
How is it possible that so many smart people, from Silicon Valley’s top venture firms to the world’s biggest energy companies, were compelled by Cheiky’s claims for so long? And if Cheiky really was pushed out of at least two companies, Transonic and Zpower, why didn’t any of his investors raise the alarm when he tried to attract new venture capital?
"Sometimes it isn’t good science or it’s not provable science."
Part of the answer is that venture capital is arguably the perfect target for a smart, confident man with an impressive background: it’s an industry built on placing bets that sound impossible, and often won’t pay off for years or even decades. It’s about being on the hunt for something that sounds too good to be true. And for the last 12 years, Cheiky and his partner Rocke have been pitching just that.
And what about all the due diligence his investors did on the science? Even the firms that specialize in energy can be fooled, says Banholzer. "They have a lot of investment guys, who are like bankers, and they don’t use their engineering talent to do due diligence."
The venture capitalists who’ve sunk tens of millions into Cheiky’s startups have a lot to lose if his suspect science is discovered — exposing Cheiky might stop him from raising money again, but it would also tarnish their reputations. None of the firms who backed Cheiky would speak with The Verge about him on the record, but several shared negative impressions on background. Unlike many serial entrepreneurs, who return to previous investors for favorable terms, Cheiky’s last three startups all have a very different set of backers.
It’s not about the money
Back in the Batcave, Cheiky and Mike Rocke start bragging about their latest round of funding. "I went from 50 cents a share very quickly, to $1 very quickly, to $2, and this new raise is on that same line," Cheiky tells me of Cool Planet’s recent $100 million funding. Gesturing to Rocke he asks, "Have you told him what the valuation is? It’s in the stratosphere."
"I've made lots of money, couple of yachts, lots of houses, and high-performance sports cars, but I really love working in the laboratory."
"A $100 million-dollar raise is more than most small companies do at an IPO," confirms Rocke with a smile.
He must be doing well, I say, thanks to the shares he holds as founder of these companies. Cheiky’s entire demeanor changes. "Oh," he says, "I typically divest." That’s odd, I say to the man who seconds earlier was bragging about the rapidly increasing value of Cool Planet’s shares. Doesn’t he want to reap rewards for the companies he creates? "I’m the lab guy," he exclaims. "I really am on to the next thing."
"He’s not that much of a money guy," Rocke chimes in dutifully.
Cheiky loves to play the role of inventor; someone only interested in doing great science with no concern for money. But during the two hours I spent with him, he happily chatted about his cars, yachts, private jets, and mansions. He didn’t have room in the Batcave, he explained, to park his newest toy, a Mercedes E63S that starts around $92,000. But whenever I asked detailed questions about his wealth, he would change the subject back to his passion for pure research. "I’m about being out there doing something nobody has ever done before," Cheiky intoned. "Doing the best you can for mankind."
Cheiky’s next plan to help mankind is a startup called V-Grid. As he explained in a YouTube clip, the company’s goal is to revolutionize the electric grid, bringing cheap, renewable energy to millions around the world. The clip was pulled a few days before this story was published and edited to remove several seconds. In the original video, he claims to an audience of small investors that a team of backers, including Google, BP, and GE, and NorthBridge are already funding V-grid.
Cheiky says the because he secured a loan from Cool Planet to start V-grid, all the investors in one company are essentially backers in another. Yet when I asked those same investors if they had ever heard of or funded V-Grid, all adamantly and repeatedly denied it. But with the ink barely dry on Cool Planet’s recent fundraising, Cheiky’s already got another dream to sell, another round of investors to pitch. Seeing big-name backers already committed gives small investors confidence that someone has done due diligence on his claims.
As we wind down our day in the Batcave, Cheiky continues to hammer home the extent of his ongoing influence on the companies he’s founded, but no longer runs. "From a big-picture perspective," he tells me, "these companies have in the first line or two of their website exactly the mission statement that I set out for them." It’s not his fault that the scientists who’ve followed him couldn’t make his technology work. Most people just aren’t as smart as him. "If they make a mistake, they are too embarrassed to call," he explains. When it comes to revolutionary breakthroughs, Cheiky tells me, "The devil’s in the details."