What I did during my summer vacation...

I hate to destroy the illusion that I spent this entire summer at the Galapagos (although I would have loved to…). I also have to fess up that Steven Addis and my wife took the pictures I used for my little Galapagos blog entry, so they deserve all the credit!

In any case, I got some homework today to revive the blog by sharing some of the stuff I have done over the last few months, without telling you too much about what is really going on in our little “project Better Place”…

I figured that the best sharing I can do is to put up my reading list from this summer, to prove I wasn’t totally goofing off. All books are extremely interesting and every one of them is highly recommended reading on their own. Put together with the weak signals I collected this summer they make for a very interesting picture.

So, On the boat in the Galapagos I read Blue Ocean Strategy by Chan Kim and Renée Mauborgne, which is a fantastic business strategy book, guiding the reader through a methodology for examining markets by looking at them with a fresh view. It could probably be considered a prequel to both Innovators dilemma (by Clayton Christiansen) and Crossing the Chasm (by my dear friend Geoff Moore), two of my favorite business books ever. In other words, the best way to disrupt a market is by looking at an adjacent (even if not yet existing) market and defining the complete product through new glasses. As a general observation, the book is much better read in the middle of a blue ocean, but that is not a mandatory requirement…

I read a couple of great car books, one of which is a rare find – Billy, Alfred and General Motors by William Pelfrey (who was the head of GM’s corporate communication till recently). I bet you most of you don’t know who founded General Motors, but all of you know who Alfred is in the title of the book. And no, the answer to both answers is not the same person. Read the book! I always find that these books about what happened at the beginning of an industry to be extremely inspiring, as we all now take this $1.5 Trillion industry for granted, with its rules, inertia, winners and losers. We buy the cars but don’t know each name stands for a great engineer or an inspiring entrepreneur, who failed or succeeded, but whose name became immortal in the car brand they spawned.

Speaking of formation of industries, I re-read one of my all time favorites - Empires of Light by Jill Jones. If I have not yet convinced you to get that book and read through it’s time you do. What a master piece, describing an industry that changed all of our lives, through so many imperfect technical solutions some of which still stand. To think of the fact that incandescent light-bulbs are still dominant more than a century after Edison, and are still wasting 995 of the energy they get in the form of heat…yet they carry so much inertia that they are still ubiquitous even in countries where electricity and emissions are problems. Not to mention, Edison’s fight against Alternating Current (AC) which no one even thinks of replacing as the standard today… Yet we all seem to think that Tesla was a sports-car guy now that Tesla Motors generated the much-deserved excitement with their roadster. 

The other car book is the new one, Zoom by the two economist columnists - Vaitheeswaran and Carson. I love the historic perspective, the conclusion that the car market is about to be disrupted, although I don’t agree with the openning remarks about how Hydrogen is the solution (although I am not through the entire book yet, so there might be a great twist to the story towards the end). The book is extremely thoroughly researched, very colorful in its detail of the car industry, and feels almost like it takes over where Billy, Alfred book concluded… so consider it an unsynchronized sequel…

Finally, a great book you should read to put the entire oil picture in perspective is Out of Gas written by David Goodstein of CalTech. The first chapter is fantastic even for people who are not versed in the science part of the issues. The rest if great if you really want to understand the fundamentals of the energy issue and not make the same mistakes as other people make routinely (like thinking that “oil producing countries” actually produce oil…).

I mentioned weak signals – which is something I picked up at the great session with my Young Global Leaders out in Dalian, China. The hospitality was as usual incredible, with China awe-inspiring in its continuous growth and enormity. I have a bunch of notes from the sessions, although the best part about YGL this time were the YGLs themselves and the free form discussions we all had, which I am not at liberty to share even if I could capture the magic of that week in our shared space. The YGL team and Professor Schwab asked us to bring a weak signal to the session – meaning some event or piece of data that tells us something about the future, not in a direct way.

The question caused me to start collecting weak signals this entire summer. The three that I would share with you are all related in fairly obvious ways though – The cost of a deep water exploration oil rig, this year’s Nobel Peace Prize, and the recent story about the reduction in ocean’s ability to absorb CO2.

• A new deep ocean rig costs upwards of $600M to buy and $500,000 to operate daily. It digs at the ocean floor which is 12,000 feet under the ocean surface, and goes in well over 20,000 feet to find oil. I learned about these numbers in a session where an expert on the topic mentioned that oil is “cheap and abundant”, which makes me wonder what happens when we need to find the “expensive oil” - if this is the cheap stuff. Did I mention the price of an oil barrel crossed $90 for a brief moment this week?

• Al Gore won the Nobel for his amazing work waking us up to the dangers of the “uncontrolled experiment” we’ve been running on the only habitable planet within reach. I still find some people’s reaction to the recognition he received incredible. In some newspaper I read the morning after the headline was “Al gore makes 9 mistakes in his movie”. Talk about denial.

• Finally, this last one from this week's news -  Oceans seen soaking up less CO2. This one is really troubling as the ocean is our global “hidden CO2 sink”. You see, a few years back scientists ran a calculation that predicted our Earth’s atmosphere should have about twice as many carbon atoms as we measured, so everyone was wondering where did the CO2 go? It ended up that the ocean was a very efficient CO2 sink. It also ends up that the sink is getting clogged…as we find out today that the speed of absorption went down by 50% over the last decade. As if we needed more bad news. Did I mention the caps were melting at an alarming speed?

When I put all these signals together I get an interesting picture – (1) we ran out of cheap new oil reserves, (2) we are running out of place in the atmosphere and the ocean to store the carbon atoms oil makes when we drive our cars, and (3) we are all much more aware today than we were three years ago of the implications of our actions and the predicament we found ourselves in, thanks to Al Gore. At the same time, we will not stop driving our cars – thanks to the freedom to roam we got used to since the days of Billy Durant, Henry Ford and Alfred Sloan.

Now, as I was writing this entry two strong signals flared up - Oil hit $92, and closed the week over $90 - as OPEC anounced they simply don't see a way to increase production short term. the second one was a strong rumor coming out of the blogosphere about China intending to raise the tax on Gasoline so as to get the price up to $5 per gallon. I am not sure there is a base to the rumor, but if it is true then the second largest car market in the world will be strongly inclined to shift away from liquid fossil fuels fairly rapidly.

What does it mean? I guess we’ll see in our collective behavioral changes…From government policy to individual choices. Is it time for a “blue-ocean” look at this greatest of industries...

Stay tuned - more on Monday

Comments

[Rick Bullotta]

Welcome back, Shai. Good to hear that you're still in "infosponge" mode. You oughta add some Machiavelli to your reading list to help with the inertial resistance to change...

So any thoughts on where the new venture will be based? Israel? USA?

All the best,

Rick

[Zobeid]

Those deep-drilling rigs are amazing, and they're the kind of technology that can someday be leveraged to make enhanced geothermal energy accessible over wide areas.

If you want to put global warming in perspective, I think "Cool It" by Bjorn Lomborg makes a good companion to Zoom. Lomborg's view is that global warming is a real problem, a manageable problem, but not a civilization-threatening crisis. (His book has brought forth counterattacks from Al Gore's followers.) Vaitheeswaran and Carson appear to agree with Lomborg -- as long as we don't begin powering our cars with tar sands, oil shale and coal-to-liquid fuels. That would cause CO2 emissions to skyrocket, which is something even Lomborg would object to.

[Tour Ben]

Hello Shai

While reading today's paper.... how about exercising some of your own personal talent ,energy and means in a serious effort to cut world fossil fuel consumption?

Detailed information upon request.

Only good
Ben

[Mark]

Good idea Shai,

Let me know if you need any help

[Natalia]

Glad to finally hear from you again. Thank you for the book recommendation. As I love to read myself, I will absolutely check those out. By the way, have you read "Collapse, how society choose to fail or success" by Jared Diamond?

[RockTheReactors]

Couldn't find an email address for you... this is the next best thing... read the article in the New York Times... You may want to check out what we've been up to all along Route 66...
http://www.toaster66.com
http://www.thebox66.com
We have a booth at EVS23 in LA, Dec 2-5
The old Route 66 is about to become the first Electric Highway!!!
Glad you Davos folks are finally seeing it our way... ;o)
Except you're NOT taking this away from the people who did all the ground work for the last 10 years...
This belongs to the pioneers of the EV industry... so back off! ;o)
Let's sit down and talk like gentlemen, on how we may be able to work the same side of the street...
Be well,
Rem
www.electrifyingtimes.com

[Noy]

Shai Shalom,

I have an idea on how to make clean,cheap efficient energy.
I would like to know if we can talk about it.
The idea was devised it feb.2007 and from then it has been boiling in my mind,
Improving with the help of 2 more PhD students.
We have no experience in how to make this idea happen, but we think it can change the world (at least we hope).
If you find this interesting, please respond to my email.

Thanks,
Noy.

[Trung Dung]

Hi Shai,
I was exciting to read the article about your future venture of green power for battery-powered cars when I was on flight from Copenhagen to Manchester. It is very similar to our research in energy autonomy for multi-robot systems.
In fact, we have been doing research on energy autonomy for multi-robot systems and we developed a strategy of self-refueling energy and self-sharing energy for mobile robots. The strategy covers your idea of swapping battery but more interesting with mobile charging station, instead of fixed station only. Further, we are going towards to truly autonomous robot, sociable robots which is absolutely autonomous (saying Car), instead of electric cars with human control.
Just have a look an article about our work and free to contact me if you need further information. I am wiling to share our ideas with you through our article and experiences because we are researchers, not business man like you :)). Of course, co-operated activities in the area are slightly expected to discuss if you are happy with our scientific achievements.
http://technology.newscientist.com/channel/tech/robots/mg19325937.000

[Michael Guimarin]

Shai,

I completely agree with your sentiments on this topic, and though it is a bit off from the subject, I really should respond with everyone else on the other point, I wanted to talk about PBP.

I think that PBP is a great idea, and I am also encouraged to see that you have secured a large amount of funding, as we all know the danger with starting an EV company and The Big Guys (Oil, Automative, Gov't). Lord knows this will keep you all safe. The only thing I have a question about is whether you guys have a Patent for PBP, I mean, you must, if you have secured funding and what not, and I was wondering if you could give me the patent number so I could look it up.

You may have recieved a post from my Dad, CEO of EVIN, LLC. Basically, exactly like PBP in every way, minus all the attention, which we haven't saught for obvious reasons.

[Michael Guimarin]

I was hoping that you would respond to me, and that hopefully we could have a dialogue, because the goals of our two companies are very closely entertwined, and even our markets are the same. I won't lie to you and say that I'm some random guy with an idea. Evin has both patents and prototypes for EV's and the infrastructure network. Rather than a competitor I am hoping that we can cooperate to bring this future that we all so desperately need. Please contact me if you read this, it means a great deal to all of us who have been working on this for over 15 years. Thank you

Michael Guimarin

[YOSEF]

היי ,שי
קראתי על היוזמה שלך ושל החבר ,להקים תשתית לאספקת חשמל למכוניות חשמליות.
קודם כל ,אני מאחל לכם הצלחה בפרוייקט.
יחד עם זאת נראה לי שיש בפרוייקט ,דברים תלויים בהצלחה,שנראה לי שתצטרכו הרבה תושיה
כוונתי בדברים התלויים:
1.במידה והמצברים בעולם לא יתפתחו כצפוי -מבחינת עלות ומשקל.
הרי שדבר זה יגרום קושי בהתפתחות הפרוייקט.
את עלות המצבר יש לחלק לאורך החיים של המצבר ולהוסיף על העלות של החשמל
ליחידת קילומטר.
אם המשקל של המצבר יהיה גבוה ,הרי שהרכב יצטרך להטען כל שעה .ולא בטוח שבמרחקים של שעה נסיעה יהיה בכל מקום היכן לטעון.
אין לסמוך על כך שעלות הדלק תעלה, עלית מחירי הדלק הרגיל היא זמנית וצפוייה לרדת בעוד מ"ס חדשים.

ברצוני לציין ,שהתודעתי לנושא האנרגיה החילופית בעקבות כתבה בעיתון אודותיך,מאז נרתמתי לנושא האנרגיה החילופית תוך הזנחה של רעיונות גדולים בתחומים שונים.
אני בהחלט רואה חשיבות לנושא וחושב שצריך לעשות ולפתח את הנושא ככל האפשר,ולו רק להרגיע את המצפון,עשיתי מה שאפשר בהתאם ליכולת שהעניק לי הבורא.
בכוונתי להגיש לקרן ממשלתית ,בחדשים
הקרובים רעיון בר פטנט בתחום המסנן
.יש לי גם רעיון למצבר חדיש עם תפיסה שלא נראתה עד כה,אך נראה לי שיארך הזמן עד שאבצע סקר יתכנות בנושא המצבר.
בכל אופן אני מקווה שלא תצטרך לחכות לא לפיתוחים שלי ולא של אחרים,כדי לקדם את נושא הרכב החשמלי והתשתיות.
אשמח לעזור במה שניתן
יוסף

[יוסף]

בהקשר לתגובה הקודמת
ניתן לפנות אלי לאימל
[email protected]
יוסף

[meir more]

Shai,
First, congratulation on your courage and vision.
It was amazing to read an article in Haaretz yesterday discussing your new venture, and on the same day receive a very detailed 69 page business plan how” to make recharging readily available and easy for owners of hybrid and electric vehicles.”
Obviously, solving the refueling issue comes ahead of any advances in battery technology or manufacturing etc, should we wish to dramatically increase the use of electric power to power cars. It is also obvious that it requires the cooperation of all interested parties in the process (industry, government etc) and - deep pockets.
I am not sure how far you have developed your business plan, and I was wandering if you will benefit from reading the business plan that was prepared by a group of five capable Israelis. (I thought that they may benefit should you wish include them in your plans).
For more info please email me at [email protected]

[eb]

I had hoped to be able to send this to your e-mail but I could not locate it. If you could respond that would be great.

Re the 10/29 WSJ article about electric cars, particularly exchanging discharged batteries for charged ones, I wanted to ask you not to neglect the possibility of also serving electric motorcycles or other electric vehicles besides cars. Since their batteries are different, you would either need to stock them also or to permit driver charging at your service stations as well as battery exchange. It may be good to offer both driver charging and battery exchange anyway even to cars.

One further question: The WSJ article mentioned that your intention was of "exploiting existing batteries that are smaller". Can you tell me who makes these existing batteries you mention? Thanks.

[humberto effio]

I am suporting the idea of electrical vehicles on cities that fuel prices very high , here in las Vegas Nevada we received
31 million turist per year, and trafic congestions and polution , I am searching for new ideas and vehicles to get new way of transport and see you Idea will work on rentals and taxis companies here we need new alternatives for cities like las Vegas
and the millions of visitors will be saving
money on high prices .

[Jar Lyons]

I read somewhere in a business article that you thought an island community might be a good proving ground for your business plan.

Vashon Island is a 20 minute ferry ride from Seattle, and is a very environmentally friendly oriented community.

At 13 miles in length, I think it is an ideal place for an electric vehicle.

[yafit]

Dear Shai
my name is yafit, an israeli student in the EE faculty in the technion,
i am looking for a more "private way" to contact u, and i wanted to know if u have some official office or email for contact
(i only found your blog on the web but nothing alse)

your respond is very important to me,
respectfully yours,
Yafit.

[Bill Strawbridge]

shai:

I'm a commissioner for the Town of Palm Beach, FL and maybe this is the place for a high end/high visility demonstration project.

My last venture capital deal was a dotcom and I used to sit on the Venrock Board.

What do you think?

BillStrawbridge

[Roger Hollander]

Tata's new Nano is a perfect candidate for incorporating an electric motor.

ZipCar, the hourly car rental company designed for city inhabitants who don't own cars, in NYC for example, is a perfect candidate for a small scale consumer rollout prior to a mass market campaign.

I wish this project the best and hope to see it reach the masses.

[Ronen Shnidman]

Hey Shai,
I'm an Economics student at McGill University who has been following this initiative of yours. I am currently taking a graduate course called Project Analysis, for which each student must undertake a cost-benefit analysis. I thought it would be interesting to do a CBA on your Project Better Place.

You mentioned that at least 5 countries are setting up policies to make EV feasible. Would you be interested in helping me conduct an analysis of the benefits your company would provide to one of these countries? I would need your assistance to get access to the necessary data, but the rest I can handle from Montreal.

Please give me an answer as soon as you can.

Sincerely,
Ronen Shnidman

[Yo]

Hi, great to read about all this. I would love to drive an Israeli electric car in Germany. And as for Israel - it might be a pity it's so small but for that reason it's ideal for electric cars. Whichever way this works out - main thing it does work out! :-) Even though I can't really help in any way I will keep my fingers crossed and tell everyone about it. The best of luck! Yo

[Alex]

Hi Shai,

ditto other comments, great initiative. In Hong Kong a few of us concerned about CC and Peak Oil got together a few years ago and began developing an offshore wind farm for Hong Kong, this project is now Asia's most advanced large scale offshore wind farm (201MW) and the driving force behind it is now CLP (the leading utility in Asia). The HK Government has supported the project by implementing an RE target and program is on track for 2012 construction. Last year some of us from that group started Peak Oil Hong Kong, we have a website www.peakoilhongkong.com to raise awareness in Hong Kong. Last month some of us decided to see what we could do to promote electric vehicles in Hong Kong. There is some serious money and companies considering invovlment and if there is some way to work with you that would be great as it would save us reinventing the wheel - either way something will happen on this front now. Hong Kong is well suited; wealthy, polluted and small
Good Luck, would love to hear from you, Best
Alex