There has been a quiet revolution in the economics of products & technology. One is well know and much heralded. It is commonly referred to as network effects. The other is less well known, but equally powerful. I use the term ‘marginal runaway’ to describe it.

Network effects occur when each additional user (or consumer) of a good or service has a positive effect on the value of that product to others. In essence this is an economic externality. …


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Assessing Risk in Startups is Hard

This articles describes a methodology for systematically assessing risks in a high technology startup and then presenting the results in a simple risk contour profile and a single number, its Phi Risk.

The methodology described here is designed as adjunct to the Lean Canvas methodology. It extends that methodology by adding one further aspect — how to assess the risk side of the risk-reward tradeoff.

For anyone interested in a Phi Calculator that performs the calculations in this article and produces final graphs and risk numbers, you can download the calculator here.

There are 11 risk parameters to assess. Each parameter is graded on a profile of 0 to 10. Low risk is ranked as 0, medium risk as 5 and high risk as 10. Finally the result is shown in a simple “Risk Contour Profile”. …


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GE Evolution Series

An interesting thought experiment is to ask whether it would be possible or practical to convert one of the largest locomotives in the world to battery power.

A typical very large train is GE Evolution ES44DC.

It has 5,000 US gallons tanks (18,900 litres) and at ~ 10Kwh per litre it is carrying around 189 MWh of energy in those tanks.

A diesel electric train of this type has a conversion efficiency of ~ 45%. So that fuel tank is carrying the equivalent of 85MWh.

If we use the Tesla 85KWh battery pack (weighing in at 540kg) then how many Kg of batteries do we need? …

About

Gary Aitchison

Serial entrepreneur, Engineer & Economist, citizen of world. BSc, BEng & MTCP Sydney University, MSc Economics London School of Economics & Political Science.

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