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. The user or the provider cannot capture this incremental value per transaction, but if the externality can be internalised into a group, then this can dramatically increase the value of the group. …
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”. …
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? 6.353 …
Proponents of a low carbon future often propose hydrogen as a path forward for solving the problem of a transportable fuel, with notable support for various forms of hydrogen fueled vehicles.
Almost all hydrogen is currently produced via ‘steam reforming’, using methane (the main constituent of natural gas). The methane is mixed with high temperature steam in the presence of a catalyst, producing a mixture of CO2 and hydrogen. The valuable hydrogen is collected and the CO2 vented to the atmosphere. The CO2 means that this path is counterproductive as a de-carbonization strategy.
Hydrogen can also be made using electrolysis of water by splitting the molecule into hydrogen and oxygen. …
It is necessary for countries to face some harsh facts about the future. I will take Australia as a case example. Its energy consumption by sector is shown in the diagram above — the critical thing to note is that the transport sector, which almost exclusively relies on fossil fuels, is equal to the electricity sector at 27.5% of total demand (in 2016–17).
The second inescapable fact is that if we are to avoid a climate change catastrophe we have to de-carbonize our energy system. …
The challenge was to take a one week period in the National Energy Market and try to understand how that one week would look like in 2050 — a year in which we will have eliminated black and brown coal from our energy mix, and almost eliminated gas turbines.
The first part of the challenge was to take a snapshot of current allocations. The graph below is taken from https://opennem.org.au/#/all-regions
This is a supply scenario dependent on CO2 polluting black and brown coal together with various forms of gas generation.
Lets assume that the overall energy consumption of the region remains static, despite population growth, through improvements in energy efficiency. …
There has been a lot of debate in Australia about the impact of rapidly rising electricity prices, role of solar energy and other renewables in the supply chain, and the potential impact of widespread adoption of battery technology amongst residential households.
Within that discussion there is a mention of the feared utility ‘death spiral’ — where fixed costs of the distribution network must be apportioned among a dwindling user base as users either opt out of the network or drastically reduce their consumption.
It is possible to gain a quick overview of this issue without getting bogged down in the intricate details. …
During the next ten years the world will experience a set of fundamental tipping points that will change both geopolitical dynamics and the economic order.
This article discusses the dynamics behind these changes and foreshadows some of the impacts & opportunities.
Tipping Point 1: Climate Change — Cognitive Bias Flips The World
The latest report on climate change has some chilling statistics. Shown on the left are the forecasts for average temperature rises.
The impact of a 11 degree rise in average temperatures in the year 2100 is difficult to comprehend and yet we know it would be devastating to the world as we know it.
The question at hand is how this projected scenario will impact the world in the short-term — the next ten years. …
This is the first in a three part series that provides a primer on venture capital — how it works, why it works and what it feels like to go through venture funded business growth. Provided from the perspective of someone who has sat on both sides of the fence, through several booms and busts.
What is a Venture Capital Fund?
Typically a venture capital fund consists of a set of “limited partners” who participate in a fund which is structured as an incorporated limited partnership. …
Just to the north of Australia lies one of the world’s most interesting archipelagos — the island country of Indonesia.
It is home to nearly 260 million people living on 1.8 million square km of land, strung across over 18,000 islands.
It is part of the developing world, but as the graph below shows, it is rapidly catching up in terms of income per capita and life expectancy.
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