The Bold: April 25th, 2018
Good morning and happy Wednesday! These past two weeks have been very eventful because not only have the NBA playoffs begun, but the Spring weather has finally arrived in Ithaca!
Every year, Cornell has an awesome event called The Celebration where those who are involved in entrepreneurship travel to Cornell for a day and night to come together. During this event, Cornell always names an entrepreneur of the year. This edition of The Bold will tell the story of the 2018 Cornell Entrepreneurs of the Year, who went from being Cornell engineering undergrads to becoming billionaires of the company called….
Before we get to that, here is the question of the week: For companies that are in the top 25% for gender diversity, how much more better do they perform then teams outside of that quartile?
As always, life is short. Never settle. Jump to the parts that you find interesting, and enjoy!
Now lets begin:
1) Energy and Transportation
2) Blockchain, AI, and Cornell Shoutouts
3) The Quick Ten
4) Story of Courageous Entrepreneurs
Energy and Transportation
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This is a big topic, but lets take a crack at the interesting trends happening in energy and transportation. But first, lets understand what happened in the past.
The Past: Horses Ruled
Remember those western movies with cowboys traveling by horse across the countryside? Less than a hundred years ago, that is how everyone traveled, not just cowboys. Horses were the thing. These glorious beasts caused a slight problem however… manure. Cities considered this challenge a public health crisis because all the manure caused cities to reek.
Henry Ford to the Rescue: Henry Ford, working at a maintenance position at Edison, experimented A LOT with gasoline engines. In 1896 he created a Quadricycle which was just a bicycle on four wheels. It took him seven years to build the Ford Company after his first attempt of making a car. But there were many other car companies and famous manufacturers at the time, so how did Henry Ford break through the pack to change history?
In 1913, Henry Ford made another discovery that would take his company to new heights, called the assembly line. From this innovation, cars were built much cheaper and went from needing at first more than 12 hours to just 1.5 hours to be built. That is insane. This innovation was a powerful inflection point that put car usage on an exponential path.
In this story the lesson is simple, technology naturally gets cheaper and cheaper over time. Some of the greatest opportunities are when the inventor can take a resource at first only available to a few, and enable many people to have access to it. Henry Ford did it with cars.
The Present and Future: The New Landscale
There are many exciting trends in this space. Energy is a $6 trillion dollar industry, and here are quick snapshots of the most important ones:
Solar and Wind Energy: Currently 63% of the world’s energy comes from fossil fuels (mainly natural gas and coal). No surprise. Wind and solar energy is about only 6.3%, and 1.3% respectively. But according to Bloomberg, that will change very soon…
In just ten years, solar energy is expected to become more efficient than not just coal, but natural gas. In twenty years, solar output is expected to grow by 12X and wind energy by 4X. That is insane, and this chart goes into the details:
That is fast. This rapid increase in solar panels is due to Swanson’s Law. Think of Swanson’s Law as the equivalent for solar panels that Moore’s Law is for computers. Specifically, Swanson’s Law is that the price of photovoltaic panels drop about 20% after every doubling of shipping volume.
Cars are about to change forever: But don’t just take it from me. Carlos Ghosn is known to be one of the great legends in the automotive energy. He is executive chairman of Nissan, Mitsubishi, and Renault. He has lived and breathed the car industry for forty years, and he predicts that the car you will “be driving ten years down the road will be nothing like the car that you are driving today.” Wow. But what does he mean?
He gave the analogy of the phone. At first, we had the flip phone which just made calls. Now our smartphones do everything. He believes the car industry is about to go through the same wave, where cars currently just do mobility, but in the future will be able to do much more.
Two trends will allow this new tidal wave to become a reality. Autonomous and electric engines. An average American spends 101 minutes per day driving. With autonomy or even partial autonomy, people will be able to spend those minutes without having to worry about driving, but doing work, watching movies, or if they are like me probably sleeping. With electric engines consumers will see less of a direct impact on their lives compared to autonomy, but our planet will be happier.
Flying Cars?: The Google co-founder has spent hundreds of millions to achieve this vision. In fact, a subsidiary of Goole called Kitty Hawk is building flying cars. Here is its first product, Cora. He is not the only one though, companies such as Airbus are also looking to create that next flying car.
Blockchain, AI, and Cornell Shoutouts
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Important information to know about the Blockchain and AI industries:
Blockchain and AI News:
Blockchain:
Rush of Money into the System: In just the first three months of 2018, VC investment in crypto surpassed that of total VC investment in 2017. There is lots of debate on what the first “killer app” will be. Basecoin and Orchid are two startups that think they have found the solution.
1) Basecoin: raised $133 million, and wants to create the worlds first stablecoin. A stablecoin is a cryptocurrency that is always at a fixed price. Think of something with all the properties of Bitcoin but without the volatility.
2) Orchid: is looking to raise $125 million, and wants to create “anonymized” internet access across the globe. This means that when you use Orchid, giants such as Facebook will not be able to take your data.
Head of the IMF Says Fight Fire with Fire: Cryptocurrency can be used to make transactions untraceable. Obviously governments are not going to be happy, but the question is how will they combat this trend? The head of the IMF suggests that governments should “fight fire with fire.”
What she means is creating partnerships with governments and cryptocurrency, which will hopefully make governments more efficient and effective. Hopefully she is right.
Amazon Blockchain: You think Jeff Bezos would miss an upcoming wave of technology? Amazon is not just creating home robots, but they have also offered “blockchain as a service.” Here is Amazon talking about it in more depth.
AI:
FB, Google, and Alibaba are building their own chips: For all these tech giants to pursue the building of chips to power their AI shows there is an opportunity to be had in this field.
First FDA Approved AI Diagnostic: One of the most powerful applications of AI will be in medicine. AI will become a special assistant empowering doctors, and in some cases replacing them.
Chamath and Social Capital: Chamath Palihapitiya is one of the people I admire tremendously. He is the founder of Social Capital, a very successful VC firm. This week at the Sohn Conference, he gave an incredible speech about AI, and its opportunities. The video is only 18 minutes, and explains the investment philosophy for one of America’s greatest VC’s. He also recommended Box as a great investment.
Cornell Shoutouts:
Big Ideas Competition: Every year Cornell has a big ideas competition, where out of many competitors the students with the best ideas get picked for a final presentation the day after Celebration. Here is a snapshot for two of the ideas presented:
Rahul Mukherjee, 2020: This biology and economics major wants to transform our politics. His organization aims to sponsor conferences that will bring college students together to draft legislation. This legislation will then be delivered to Congress.
Sachi Koide, 2018: This biological engineering major used her skills to create a handheld system that would help farmers detect contamination in cow’s milk before it goes into the tank. Given that the dairy industry loses $29 billion every year by undetected contamination, this product has got potential.
Shout out to the writer of this article for summarizing these ideas and to all the people who enabled this event to take place.
The Quick Ten
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Most Fascinating Thing I Found this Week
1) This Article on AI: Easily, this. This article does a great job of explaining the history of AI and its future impact on the world. It has a beautiful, quick, and compelling history of AI that anyone can understand, and lays out how AI will and will not impact our society.
Other Cool News I Found
2) Trump Successful in Trade War? Full Disclosure, I am not a Trump fan at all. Putting it mildly. But, there is validity in the fact that we need to stand up to China. Since the Trump trade battle, China ended a rule that punished U.S. automakers called the 50:50 rule. This move by China showed a small victory for the U.S.
3) Bill Gates says CRISPR can solve humanity’s biggest challenges in health: These technological revolutions are for real. Just ask Bill Gates.
4) Seven Things Americans Do Most: As an entrepreneur, disrupting any of these seven activities can be profitable. To say the least. They are: sleeping (8hrs/day), eating (67 min/day), driving (101 min/day), working (8hrs/day), surfing the internet (32hrs/month), watching TV (2.8hrs/day), cleaning (smaller than others, but sizable).
5) How Hackers can Disrupt 2018 Midterms: Wow. Crazy to think how vulnerable our elections currently are. Yet challenges are opportunities, and hopefully an entrepreneur can think of a solution to help.
6) Is Curing Disease a Sustainable Business? With the advent of biotech, one shot cures are being invented. Take one pill, and your disease is gone. For the patient, this is great. For the pharmacies, not so much. Longterm profits erode, and there are less people to spread the disease. Goldman Sachs points to Gilead Sciences’s hepatitis C drug as an example.
7) China’s Path to Power, Educate the Students: Really fascinating. Here is how China ensures students learn the fastest: Murals surround the school with quotes saying “March to the Future.” Then before each class, students dance, sing, or stretch to boost brain power. Lessons last 35 minutes, broken into blocks with different activities that first begin with “I do, you do” exercises from the teacher. Fascinating. I wish Cornell classes were so innovative.
8) Fun Facts about Self-Storage: Self-storage is a $38 billion industry. One in eleven Americans pay an average of $91.14/month for self-storage. Never knew that.
9) Lets Livestream Earth: EarthNow aims to create satellites that can create a livestream of almost any part of Earth. The footage will be accessed by anyone with a smartphone/ tablet. Did I mention Bill Gates, Masayoshi Son have invested in EarthNow?
10) Jeff Bezos, Why it is Always Day One?: Jeff Bezos reminds everyone at Amazon that every day is day one. One employee asked him what he meant and well, this is what he said …
Story of Courageous Entrepreneurs
___________________________________________________________________Hustle + Resourcefulness > Talent any day of the week. This statement is embodied by the founders of Wayfair: Niraj Shah and Steve Conine.
Niraj Shah and Steve Conine:
Our entrepreneurs first met at Cornell in their Freshman year, living only a few doors down from each other. Talk about serendipity! Over time their friendship grew, and by the time their last semester came around they believed their futures were set. Niraj would go to graduate or law school, and Steve would go into his family business. But one Cornell class would change their lives forever.
They took Cornell’s only entrepreneurship class at the time, which was taught by the Cornell legend Prof BenDaniel. In the course they created a business plan for an IT consulting business, and decided after school to follow through with the business. This business was sold for $10 million after four years of hard work. The year was 1999, and once the internet bubble popped, some of their wealth was instantly wiped out.
Then they were on to their second business, which involved mobile phones. Yet it did not succeed. After a year of blood, sweat, and tears, they had no company to show for it. Then these entrepreneurs made their bold decision, to switch gears and try a new business. After not succeeding previously. The idea began with… birdhouses.
Despite the internet bubble, the two noticed a site that thrived by just selling birdhouses. Through further research, they noticed many similar niche stores thriving. The pair had a realization. Using the business and internet acumen that they have developed from their last two ventures, they could create many of these successful niche internet sites. CSN stores was born.
Bootstrapping for nine years straight, CSN stores continued to stay in a strong position. However they realized their business could grow even faster if all these niche stores were placed under one site. Thus CSN stores became Wayfair, and now this $6 billion dollar company is looking to take over the $500 billion home goods market. Their journey all because of Cornell.
Answer to the question of the week: Teams that had diverse teams performed 35% better than teams did not have good diversity. This study shows the importance of having diversity in teams. Even though in the beginning these teams usually are not as frictionless as non-diverse teams, the long term results are undeniable.
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For those that hung in there or even just skimmed this, thank you! If you found just one thing of value, then this newsletter accomplished its goal.
Enjoy this beautiful Spring weather, and talk with you soon =).
“If you are not willing to risk the unusual, you will have to settle for the ordinary.” — Jim Rohn
Warmly,
Justin
