Saturday, 22 September 2012


I'm going to say some harsh things in this post, harsh things some people may not appreciate.

The problems our generation faces are so mind-bogglingly big, that people either can't relate, or lack the understanding of the fractal of issues involved to advocate for and practice sensible solutions. The good news is, technology is giving ever more people the facts, the education, the understanding and sensible platforms for real debate.

We have people advocating for something very Eco-friendly that they can do at home (often at great effort - like grow vegetables, or financial expenditure - like set up a power-self-sufficient home), but the vast majority of us cannot. We hear advocation of such ideas as if they were solutions, and yet they never take off.

Therein lies is my first message:
If your solution is not applicable at the scale of the problem, what you have is not a solution. What you have is a hobby.

As Shai Agassi, Founder and CEO of Better Place points out - Biodiesel is great, if you happen to have the Amazon in your back yard. Despite nearly $100bn the US pumped into using it, it never got adopted past 2%, in terms of miles driven on it. A bucketload of money spent. No solution.

Another example is Hybrids. Less convenient, less affordable. Result? we sold nearly 10 million cars in Australia in the past decade. 16,000 were hybrids (despite having been on the market for the entire decade). That's less than 2%. In as far as our oil dependence goes, they are not a solution.

If your solution to any problem doesn't scale, for any reason - be it the value proposition in the eyes of the consumer, supply issues, whatever the reason, it simply isn't a solution. It's a dud.

If you intend to recommend we stop making food in factories and go back to growing it into our back yard, ask yourself:
It worked when the earth's population was 700 million people. Today we're 10 times that, and live in dense cities. Does my solution scale, without magically "willing away" 6.3 billion humans? Can it be used by millions who live in dense urban environments? Can I pitch a value proposition about it that pragmatic people would buy? Or will I be preaching to the choir, sell to the choir, and it will stop there? Can it be used by everyone? Will it be used by everyone? You better think it's yes and yes and be able to talk to any criticism of your idea and convince people it's the best thing (for them, not for you), since sliced bread.

Once you think you have a solution, you will find there are two roads - the road of begging and the road of doing.

One flavor of ideas goes like this:
"It's not viable, but if the government gives us $100bn, we can do amazing things like connect Australia's East coast electric grid to the West Coast". (The words are mine but they capture the gist of one of the BZE proposals). Don't get me wrong. I look at BZE and I'm astounded by the possibilities we can do using what we know today.

But I want to see these ideas go beyond an expensively-printed booklet and a website. I want to see it happen.

There may be good long-term economic/environmental reason to do these, but the reality is, in proposing them you'll join a queue at the government's door, along with many other beggars, vying for charity money, for a life-support-machine for your idea. The government may be in a phase where it's got some machines to hand out, or a phase where they're on hold for a decade or two, or a phase where someone will get them before you because what he proposed translates into more votes in the next elections. At best, there will be a thousand of people like you, and 10 life support machines to go around. And even if you get it, remember the first rule of charity: It always runs out. And if all that weren't enough, remember it takes government a hundred million dollars to do what a start-up can do with ten million, required rigid organizational structures, cushy government jobs and all.

There is another way.

It involves building organizations that need no life support machinery.
(they can, at times but not always, use a defibrillator tho).

When a thousand of people with such ideas are ready, all thousand can go ahead, so long as the underlying hypothesis their ideas and organisations are based on hold.

(... and don't complain about probability of businesses to survive if you haven't yet read The Lean Startup. Business failure rates assume everyone is driving blind, which in many many cases you no longer have to).

Even and despite business failure rates, we (as a society) will achieve far more things if we try far more things, and we can try far, far more things this way.
The pool of risk-ready available start-up capital (the kind that is capable of taking on risk and is priced accordingly, so we're not creating the second GFC by doing this) is infinitely bigger, directly tied to how sensible your ideas are, and allows us to be far more efficient at the use of this money, money only designed to jump-start you, not support you for life.

When Shai Agassi approached the Israeli government in 2007 with a unique proposal to set up nation-wide infrastructure and begin a consumer-driven conversion of the nation's 2-million-odd car parc to electric, with virtually all associated problems thought out (Yah. watch the links in this piece, I won't go into it here), Ehud Olmert (then Prime Minister) told him "I'm not a venture capitalist. Go find your money elsewhere...". But he also told him "Once you do find it, I will open every door for you to come build it here". Olmert slammed the door of begging in Agassi's face, but lit up the path of doing like a goddam runway. Touche.

Electric Holden fitting the Better Place battery-swap model
taken 14/8/2012 at Swinburne University, Melbourne
Agassi's proposal in itself is inspirational. Not being a career car guy himself, his idea is so rabidly awesome that it's in the process of disrupting a global $10tn/year (that's trillion) market - car, oil and ancillary businesses combined, worldwide. That's a lot of welcome change. Better Place's initial pricing costs in Israel and Denmark do not seem aggressive at first sight, but one has to remember they have borrowed $800mn (and Better Place Australia, the third country to go, is raising $1bn on top of that), and as they return their investors their money, and as the cost of alternatives goes up... they can make their company live up to its name.

More importantly, Agassi will have shown us what one person with an idea and can do, if the idea is not just technically awesome but can be applied at the scale of the problem, in virtually any country without a dime from government, driven by a living, beating, economic heart of its own. That means they can make it better, more efficient and more eco-friendly with each passing year at the speed we'd expect from, say, Apple products.

It shows how risking doing something new, big, audacious and hairy can be done sensibly, not limited to the small number of such endeavors governments can carefully fund, without putting public money at risk.

And it's there to remind us what any one of us can do if we cast our idea to be both awesome and viable.

No comments: