My friend is meeting up with Shai Agassi next week and we got talking about what he will say. Shai caused surprise last month in the IT industry when he left the global product chief role at SAP. The reason this is of interest (here) is that he left to pursue interests in alternative energy and transportation. Now that he's free of the command and control world, he's got a blog (set up just a few weeks ago).
This is what he had to say on this new, driving passion:
It feels like there is a band of angels right now working on so many interesting ideas [in alternative energy and transportation], and some of you expressed your direct or indirect interest, that I hope you won’t be bored when I wander off to the energy space.
Nice. The man is claiming to be open-minded right now, too:
I decided to take 100 days to go through the 100 or so offers I received in the first 100 hours. I hope to narrow them down and look at the most interesting problems to solve. I will remain completely unbiased during this time, as I have not had a chance to stay broad and open since we started TopTier (called Quicksoft back then), 17 years ago.
His initial expressed area of interest is "the wide deployment of electric vehicles". He's quick to admit that the underlying assumption he holds right now is that:
"Electric vehicles will become a reality within a short timeframe, and will be cheaper to operate within a short time. The cost of acquisition which is higher than a normal internal combustion car, will offset with various operational costs, taxes and emissions credits. The question remains - how do you build a complete solution for all constituencies related to the electric car? The consumer needs to feel comfortable driving an electric car with a ubiquitous charging infrastructure. The grid needs to support the new load from this moving electrical appliance. And municipalities need to get a ready made package for city and regional wide deployment of electric vehicles."
He's not short of ambition here (and there's a decent dose of ego too, which is probably best). He'd like to become the Westinghouse of electric cars - "the guy who deployed it in mass scale - the business guy who deploys with the highest efficiency and best business approach."
Cool. Isn't blogging marvellous? That saved me and a load of middle management a lot of time.
So here goes. This is what we suggest Shai could do next.
First, I'd encourage him to read and meet Saskia Sassen, Ralph Lewis professor of sociology at Chicago University, who I was lucky enough to have speaking at a Future Cities Project session I chaired last year in London. Sassen understands how the structure of the world is changing - it has flows of trade and people that revolve around a global network of cities now, whereas our institutional structures, rules of ownership and other frameworks are still built around a global network of nation states. She understands, too, how virtual and physical communities interplay, how virtual relationships create new physical ones that define new patterns of movement, identity and trade. The reason this stuff is important is because it affects the future of infrastructure - her parting shot to me was being fascinated by the idea of 'inhabited infrastructure'. I've been mulling it ever since. If you start viewing the world that way, opportunities open up.
Shai should talk to Graham Sadd, too. Graham is a British entrepreneur who has an ability to see ahead. We had a long lunch discussion last week about his vision of being able to walk up to any device - a mobile phone, a car, a bicycle, whatever - and be able to prove your identity, load (so negotiate) your insurance and fuelling, and then use it.
This opens up intriguing possibilities. First it makes it far easier to lend things to other people. Right now I cannot lend Joe my car without playing admin hoopla. Yet it goes further. It means people – individuals – could actively earn money by allowing others to use such devices. Suddenly infrastructure becomes shared, differently.
Why would people do that? Well right now most people leave their car in in a garage or parking space most of the time, often paying for it to sit there. Surely better to let it earn money for you. I've talked about this concept before, in areas such as home delivery, where having something useful to offer in the right place at the right time, when brokered through technology, can create earning opportunities for individuals.
Today most private devices don't get shared, except taxis. Shai needs to ask why.
Graham has a track record of focusing on things that become really important. At Infobank the man was selling electronic commerce on CD-ROM before we had a world wide web. People described it as "catalogue shopping on CDs" - they couldn't see it coming. Today people think his company, Paoga, is about simplifying digital authentication but it's about much more – it removes the burden of assessment and information gathering from every seller, be it a bookstore, an insurance company or, most importantly, someone who today wouldn't dream of selling to us without better authentication.
So that's infrastructure and organisation, identity and device sharing. Now let's look at energy. Joe is always harping on at me about the potential of vehicle to grid technology - the idea that your electric car could actually feed electricity back into your home, or the power grid from its batteries (or other power source). And why not? Cars become mobile power stations, that expend or acquire energy as they travel or sit still.
If he's not already, I'd put Shai in touch with John Woolard, CEO at BrightSource Energy. Aside from having been a player in clean tech for years, he's a VC at VantagePoint, one of Silicon Valley's top clean tech players, sits on Tesla Motors' board and is CEO of one of the most exciting firms I've encountered recently that noone has yet heard of. Drawing on a US/Israeli technology heritage (especially a firm called Luz), he brings to reality solar distributed power towers that comprise of mirrors that focus the sun's energy onto steam turbines. When organised as a plant, they generate the same amount of electricity as a typical conventional power station at a decent price (and boy do they do lots of sums). John is passionate about the need to provide people who drive electric vehicles with proper access to charging networks that make journeys possible. And he sees the opportunity, I feel sure, to fuel a charging infrastructure which provides people with energy from renewable sources. Having the ability to offer that, perhaps alongside intelligent load balancing that draws excess power from conventional sources, is a killer opportunity in the EV market.
Just as important, Woolard's previous work is bang-on relevant to Shai. Check this out from a Fast Company ones-to-watch article in 2002 (yes five years ago).
Both cost and reliability are impacted by the available supply versus demand during peak and off-peak energy usage hours. Without energy management technology, a company manages its energy costs through traditional building control systems, if used, and historical analysis of monthly utility bills. Managing energy costs and usage based on historical information is ripe with inefficiencies and offers little control to impact energy usage and costs. Additionally, energy managers lack the understanding of peak period energy usage and timely price information needed to make effective energy decisions. As a result of using energy management technology, companies have the potential to significantly conserve energy and reduce costs by managing peak period usage smartly. Utilities can offer customers cost-saving energy curtailment programs and incentives to reduce energy usage during peak periods.
If the person managing an enterprise or a utility could see in real-time when buildings, homes or machines were using energy unnecessarily and adjust usage remotely, how much energy and money could be saved? Woolard's team created enterprise energy management software that enables efficient interaction between supply and demand of energy providers and energy users to reduce energy usage, lower energy costs and optimize the energy procurement processes.
Range is - and will remain - a critical concern for those buying and using electric vehicles. This week Tesla announced the range of its roadster will have to come down due to weight increases during development. One of our own patrons, Lorenzo Wood, has long argued that the way that range is articulated in alternative energy vehicles is right now almost useless. A full to empty indicator works fine in a petrol car when you have a network of gas stations but when you're making decisions about whether you have enough charge to get home, things are different because you can't stop on the way and charge up (certainly for the time being). What's needed, he argues, are interface systems that tell you whether you can get home - or tell you whether you can get home via X, Y and Z locations. This models in factors such as terrain (you use a lot of electricity going up hill and a good EV will absorb charge back into the car when you're going down one, or braking) and congestion. It can also develop an ongoing performance model for your vehicle, based on your own data and other similar vehicles as products mature, or even as components degrade (which is currently a concern for battery-powered vehicles).
What Wood stresses is lacking today in homes, vehicles and businesses are interfaces that monitor where energy is coming from, what it is costing, and how much impact an individual's activities are having on consumption and emissions. Currently, most 'appliances' - be they fridges, TVs or cars have an energy and emissions specification - a point of purchase indication of how efficient that device is (or rather was, in a laboratory situation). Once out in the world, we only have electricity bills, fuel gauges and so forth to measure how everything is doing. In reality, how much 'fuel' something is using, what it costs and how it impacts on the world, is both difficult to measure or do anything about. This approach means converting an existing car to be super clean is nigh-on useless if anyone wants a reward, such as a tax-break. The bias is towards new - converting older infrastructure isn't worth the bother. So we have to wait for it to wear out before things get cleaner. Which will take decades.
I'd also send Shai straight down to Burlingame, next to San Francisco airport to see Ian Wright. Ian designed routers and switches for the likes of Cisco and DEC before becoming one of the world's most important pioneers of high performance clean vehicles. He has built the extraordinary WrightSpeed X1 electric roadster prototype, a car that should be added to everyone's list of things to do before they go to the great gig in the sky (click on chapter6 and enjoy). We pulled 1.5g on a freeway exit. I sat pressed in my seat squeezing what I thought was a panic button, something I later discovered was the remote for his garage door. Aside from Ian's pioneering showmanship in proving that electric vehicles can be sexy as hell, there are some very important things he is doing. His objective is to replace heavily polluting SUVs and sportscars "because that's where you can have the most impact - the problem isn't the 30mpg cars... it's the 8 or 10mpg ones". He asserts that the true measure should be gallons consumed per hundred miles driven rather than mpg. When taken from this perspective, one can see that transferring someone from a 10mpg car to a 20mpg car saves 5 gallons per hundred miles, whereas moving someone from a 30mpg car to a 40 mpg car only saves 0.83 gallons per hundred miles. Wright is convinced that the great opportunity is in serial hybrids similar to GM's Volt, where the drivetrain is pure battery-powered electric and a combustion engine charges the battery once the vehicle's range needs to be extended. Wright has exciting specific plans - Shai should go and quiz him on them.
Finally, I'd point out that politics remains the biggest unknown factor for any clean tech project. As the Economist pointed out in its front page article on November 18th last year, "the risky boom in the clean energy business"...
"Almost all clean energy... relies on government subsidies to make it competitive with fossil fuels. For the moment politicians seem quite happy to pay up. Government subsidy is a wobbly foundation on which to build a business. [Yet] politicians are a fickle lot... fashions fade and voters may begin to question the logic of certain subsidies as ever more firms take advantage of them and the bills begin to rise. Society should rejoice that greenery is in vogue. Markets too will over the long term come to value the technologies in which the clean energy business is investing. In the short term, though, the prospects of a business so dependent on the whims of politicians are bound to be uncertain."
Of course, if summer 2007 ends up being the summer when clean tech was hyped to death, rather than the beginning of a shift from an information age to what one might term an "energy age", some might remember Agassi as an equivalent George Shaheen. He was the Andersen Consulting (aka Accenture) chief who left to run WebVan, a dot-com boom firm that listened too much to venture people who insisted it had to get big quickly.
And who is my friend? Well he is the most visionary person I have encountered in all my research. He sees the world differently to most other people. He sees our world as full of stationary metal vehicles, that require tremendous energy to shift their bulk and our tiny frames around. He sees a world congested where people are being told they will not be able to move so much, so cheaply in future and asks whether that's because the space is full of the wrong kind of stuff. And he points out that everyone buys their own deckchair, just in case they need it for the beach. He understands that if someone creates an infrastructure that means we can grab a device on demand, be it a tiny car, a huge truck or an old lady who wants company to the shops, everything could change. He does the very rare thing - he thinks at the system-level. He understands that the world is an inhabited infrastructure.
But he's modest so can tell his own story. Shai, I hope you enjoy the meeting. The world needs more systems people.