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 BLOG >> June 2014

The Future of the Automobile [Future
Posted on June 27, 2014 @ 05:00:00 AM by Paul Meagher

As mentioned in my last blog, The Future in 2050, I am reading Reinventing Fire (2011) by Amory Lovins which discusses how the energy transformation from fossil fuel energies to renewable energies will play out between now and 2050. One of the major areas where the transformation will occur is in the area of transportation which accounts for the majority of our current fossil fuel usage (with buildings, industry, and electricity generation being the 3 other main areas).

So what might our cars look like in 2050? According to Amory, something like the new BMW i3 which was just released into North America in May 2014.

A more important question than what it looks like on the outside will be what is made off. Here the BMW i3 is currently leading the pack because it is 1) commercially available, and 2) made of advanced carbon-fiber composites that are stronger than steel and significantly lighter than steel. These advanced carbon-fiber composites are used to construct the frame in order to make the car much lighter than current electric vehicles. It is considered an "ultralight" vehicle (although not nearly as light as the Volkswagen XL1).

When you can make a lighter vehicle based upon advanced composites then it means you can use smaller batteries to power it and get more efficiency at the same time. The smaller batteries in turn lead to a lighter vehicle which opens up other avenues for making powertrain components lighter because they bear less stress. We are still in the early stages of this revolution in ultralight vehicle technology so it is difficult to imagine how light our vehicles will be in the year 2050. The lightness of the vehicle, however, will provide the basis for economical and efficient vehicles run purely off electricity and fuel cells and not reliant upon fossil fuels for powering them. So the transformation away from fossil fuel energy to renewable energy in 2050 will involve a transition to significantly lighter vehicles made possible by advanced composites that will replace steel as the primary structural component in our vehicles.

Some reviews of the BMW i3 miss the point entirely of why this vehicle matters. They evaluate it according to traditional driver metrics like handling, looks, power, interior space and so forth. You have to look at the structural makeup of the vehicle to see why it matters.

The major factor holding up more widespread deployment of advanced composites is the lack of manufacturing capacity to produce these composites. Once the supply is more readily available then we can expect to see more widespread deployment of vehicles with ultralight structure and components. Again, BMW is leading the way on developing the manufacturing capacity to produce these composites. The Wikipedia page on the BMW i3 discusses the current state of BMW's carbon-fiber manufacturing efforts:

BMW is manufacturing carbon strands that form the basis of the i3's carbon-fiber reinforced plastic bodywork at a new US$100 million plant built in Moses Lake, Washington, using raw material shipped from Japan. This location was selected to take advantage of the abundant hydroelectric power available in this U.S. region because carbon-fiber production requires considerable energy and would otherwise emit much carbon dioxide. Electricity in this region also costs about one-seventh of what it costs in Germany, providing a financially beneficial reason for the Moses Lake location. The carbon fiber is then shipped to Landshut, Germany, where the carbon-fiber reinforced plastic parts are fabricated, and the vehicle assembly line is located in Leipzig.

As of February 2014, BMW was producing an average of 70 cars a day, about half the planned production. The lower production output is being caused by a high defect rate in the carbon parts. The company plans to invest about €100 million in the production of carbon parts in order to solve the supply problems. According to BMW, there were 11,000 orders globally as of January 2014, including 1,200 from U.S. customers. As a result of high demand and the slow production rate, delivery waiting time extends until September 2014.

So large investments are beginning to made in "light weighting" future automobiles and once the manufacturing capability for advanced composites is less buggy and more available, we can expect to see more components of the vehicle becoming lighter, battery systems becoming correspondingly lighter, powertrains becoming lighter and so on. There are some nice positive feedback loops that happen once you start developing lighter and lighter vehicles with structural strength equal to or greater than current automobiles.

Getting cars off fossil fuels and onto electricity and fuel cells will be an important component of the energy transformation between now and 2050 but it still does not eliminate fossil fuels from the equation if our power plants are still burning fossil fuels to create electricity. Obviously, the expectation is that power generation will come almost exclusively from renewable energy sources in 2050 due to the increasingly favorable economics of renewable energy production and islandable microgrid technology that is expected to come on stream by then.

The energy transformation between now and 2050 will be a disruptive time for the energy industry as new players emerge and new renewable and alternative energy based technologies displace fossil fuels as the motive power of the economy. Fossil fuels will not disappear, but they may be reserved for making products like advanced composites, asphalt, plastics, etc.. because they are considered too valuable to be burned.

There are tremendous opportunities for entrepreneurs and investors involved in the great energy transformation that is now unfolding. Rocky Mountain Institute is playing a leadership role in these developments:


The Future in 2050 [Future
Posted on June 24, 2014 @ 07:53:00 AM by Paul Meagher

Systems thinking is a useful tool for trying to predict the future. Systems thinking will not necessarily lead to correct predictions, but if systems models are developed they can help us debate and refine our models in a way that other approaches can't. This is in part because systems models incorporate the idea of reinforcing and balancing loops that drive the evolution of a system. This seems to capture the essentials of the problem of predicting the future, namely, identifying the dominant positive and negative feedback loops and how they interact with various physical "stocks" to determine the evolution of major aspects of the economy over time.

When trying to predict the future there is the issue of how far into the future we want to look. This depends on what problem we are trying to solve. If the problem we are trying to solve is avoiding the meltdown of society due to climate change, peak oil, water scarcity, etc... then the "future" is probably not 2020. The societal shifts required cannot be implemented in that time frame as they will require huge infrastructure investments that will take longer to finance and implement. For example, a renewable energy infrastructure to replace most of the infrastructure that now runs on fossil fuels will not be a 5 year project; it is more likely to be a 35 year project with a 2050 date when the project might be considered largely "completed".

I'm aware of two recent books that use 2050 (or thereabouts) as a reference point for predicting the future. One book is Reinventing Fire: Bold Business Solutions for the New Energy Era (2011) by Amory Lovins and the Rocky Mountain Institute. Another is 2052: A Global Forecast for the Next Forty Years (2012) by Jørgen Randers (who was a co-author with Donella and Dennis Meadows on the seminal Limits to Growth book). I recently acquired the Reinventing Fire book and will be picking up the 2052 book from my local library to help me understand what the future circa 2050 might look like.

The Reinventing Fire book tackles the issue of how we will transform our energy systems away from fossil fuels towards renewable energies. Amory believes this energy transformation will be driven by the increasingly favorable economics of renewable energy, cost savings through incremental and radical efficiency improvements, and the large amount of profits to be made by free market capitalism as it exploits the tremendous opportunities that arise as renewable forms of energy displace more expensive and less available forms of energy (fossil fuels). Amory looks specifically at transportation, buildings, industry, and electricity generation as the main consumers of fossil fuels and how they will be impacted by the switch to relying more upon renewal forms of energy. Amory provides a playbook for how the energy transformation will unfold citing many technologies and design options that exist today which are expected to play important roles in the long transition towards a society powered predominantly by renewable energies.

I'll have more to say about the Reinventing Fire book in future blogs. I'm getting ready to read his chapter on the future of transportation which could be fodder for my next blog. I want to end today's blog by stressing the point that predicting the future involves picking a date in the future that you are interested in predicting an outcome for. It occurred to me that 2050 is as good a date as any and has the benefit of being more realistic in terms of when we might "solve" some current systemic problems like climate change, peaking oil, water scarcity, etc... If we enlarge our timeline for prediction, and concern, then maybe we can adopt a more optimistic and can-do stance towards what humanity can accomplish if given realistic timelines and a timeline that encompasses our children's future prospects. If we expect to solve major social and ecological problems by 2020 then we are likely in for disappointment, but if our timeline extends out to 2050 then the small leveraging steps we take today may not solve our problems by 2020, but they might be properly viewed as a part of a sustainability solution that can yield benefits to our children in 2050.


Learning Systems Thinking [Business Models
Posted on June 19, 2014 @ 05:29:00 AM by Paul Meagher

In recent blogs, I've discussed some helpful insights from leaders in systems thinking (i.e., Twelve Leverage Points, Systems Thinking and Sustainability, Aspirational Networks of Collaboration, Diagramming Systems, Limits To Growth).

In todays blog I want to point you in the direction of three free and useful systems thinking resources you can use to learn systems thinking. All the resources I'll be discussing were developed by Gene Bellinger who has been actively promoting the spread of systems thinking through his wiki, youtube videos, and online systems modelling platform,

The first resource I want to share is the website. Here you can find a hodgepodge of information about systems modelling and find ways to link up with other systems people.

The second resource I want to share is Gene Bellinger's YouTube Channel. Gene posts new YouTube videos on a regular basis and many of them usefully discuss his insight maker systems modelling platform.

The final and most important resource to mention is the website where you can develop and share models with a large community of other systems modellers.

So if you have an interest in learning more about the nuts and bolts of systems thinking, the wiki, youtube channel, and online systems modelling platform/community developed by Gene Bellinger are a good place to begin your journey.

Gene is offering a Systems Thinking Certification course as one way to sustain his enterprise. He would be well qualified to do so given the obvious contributions he has made to the community. Here is an overview of the certification program which is being offerred for the first time so there are still glitches to be worked out in this first iteration of the certification program.


Finding A Profitable Niche [Entrepreneurship
Posted on June 16, 2014 @ 07:25:00 AM by Paul Meagher

Lately I've noticed that many of the books I'm interested in reading are being published by Chelsea Green Publishing so I decided to investigate their site to learn more about the company. The company's motto is "The Politics and Practice of Sustainable Living" and it expresses very well the niche they serve. They appear to have found a profitable niche both because the topic area has been gaining in popularity for a long time now and because the titles they publish have a good lifespan. They have many 20 year old books that still sell well because the politics and practices of sustainable living apparently don't change as rapidly as they do in other topic areas.

When you are a book publisher you can potentially publish books that serve a wide variety of interests. Indeed, in the early days before Chelsea Green Publishing had found its niche, it published books in other topic areas such as Art. Eventually, they found their audience and here is how co-founders Margo and Ian Baldwin describe the process of finding their niche to an interviewer:

Ian: We had, I would say, extremely good editorial judgment, and we published quality books, so we built a brand name of a quality publisher that was interested primarily in non-fiction, but what we didn't have was a sense of who are audience was - you've got to pick out your audience and you've got to be extremely precise. So we had difficult times. We had to keep going back and attempting to raise money - but never enough money.

Margo: We were trying to be eclectic, but it became clear that in order to survive you had to be a niche. We were already headed in that direction. Eliot Coleman was an early author of ours, and the organic gardening movement. The other thing we realized was that you really needed to have a backlist of books that sell year after year. That just takes plain old time to build up. That can't be fiction, or temporary non-fiction.

Interview: You need books that people are going to go back to because the information is going to be as good 20 years from now as it is today.

These days Chelsea Green Publishing is one of the few independent book publishers that is profitable. As the sustainability movement gains momentum, they find themselves in the enviable position of having many of the key books in all the key areas of sustainability. They are selling 3 to 4 times as many Elliot Colement The New Organic Grower books today as they did in the early days of its release. Finding the right niche not only lets you survive, it can make you thrive.

Chelsea Green Publishing offers a nice case study in the importance and process of finding a business niche. It is also important to note that niches can grow in size over time so getting involved early in a growing niche can be very profitable. Chelsea Green had the vision and tenacity to see that the niche would grow in size and are reaping the benefits of their ongoing editorial judgement within a fairly well defined niche (i.e., Books > Non-Fiction > Politics and Practice of Sustainable Living).

Margo Baldwin is the president of Chelsea Green Publishing. There are not many videos of her on YouTube. Here is one from 2 years ago that gives you a sense of who Margo is and a few of the titles they publish within a niche defined as the "politics and practice of sustainable living".


Profitable Micro-Farming [Agriculture
Posted on June 11, 2014 @ 10:03:00 AM by Paul Meagher

In my last blog, The Market Startup, I discussed Jean-Martin Fortier's new book, The Market Gardener (2014), which explains how he is able to generate $140,000 in revenue from 1.5 acres of land producing and selling vegetables.

Last night I surfed onto Chris Martenson's Peak Prosperity YouTube Channel and found a large number of interesting videos to watch or listen to. One recent video is an interview (Mar 29, 2014) with Jean-Martin Fortier on profitable micro-farming. For those of you that don't have the time or inclination to read Jean-Martin Fortier's new book then I recommend you listen to the interview below. Interviewer Adam Taggert is an excellent interviewer and Jean-Martin does a great job of conveying how micro-farming can be profitable, sustainable, enjoyable, accessible, and competitive with the current paradigm for producing and purchasing vegetables. The podcast covers some introductions at the beginning, then discusses how Jean-Martin does micro-farming, then gets into some of the financial details of his micro-farming business, and concludes with a wide ranging discussion on why micro-farming could become a significant trend in agriculture.


The Market Startup [Entrepreneurship
Posted on June 9, 2014 @ 09:35:00 AM by Paul Meagher

I'm 3 chapters into a book called The Market Gardener (2014) by Jean-Martin Fortier that describes in detail how he is able to generate $140,000 in revenue from vegetables produced on 1.5 acres of land. He is a farmer from Quebec, an hour outside of Montreal, and he uses french intensive methods to grow enough vegetable crops on 1.5 acres of land to feed 200 families (via CSA Shares), supply local eating establishments, and sell at farmers markets. His system of farming not only encompasses sophisticated small scale intensive food production methods, but also addresses how to manage input and production costs so that they are very low (principally because he has no role for a four wheeled tractor and associated attachments in his farming system), and how to manage cashflow effectively using a Community Shared Agriculture model that provides financing early in the season when he has to purchase most of his inputs and equipment. Other methods of direct selling (to eating establishments, farmers markets) means he is taking most the potential income from his food production efforts, and not losing over half to food distributors and retailers.

The concept of "Market" and "Gardener" encompasses both the production aspect of food production (the Gardener) and the economical aspect of food production (the Market). When you can put the two together effectively, you have the basis for a successful food-production enterprise. What is useful about "The Market Gardener" is that it doesn't just focus on the food production aspect of farming as many farming books do, but also addresses how to significantly reduce startup and ongoing costs, and how to market and sell food in a way that maintains cashflow and produces good profits in an industry ("Farming") that has not been very profitable as of late (e.g., most farmers have to work off farm to sustain themselves and the farm). The book offers lots of practical advice for farm startups that might also contain useful ideas about how to manage startups in other industries (e.g., keep startup costs low, keep ongoing costs low, find as many direct markets as you can, buy labor saving equipment as early as possible, beware that going big may be less profitable, finance operations through multiple direct sales channels, time income with expenses to maintain cashflow, etc...).

I'll end this blog with the idea that it might be useful to refer to a startup in a more verbose manner as a "Market Startup" by analogy with "Market Gardener". The "Market" prefix is meant to signify that the startup is producing something for a market and not just producing something for the sake of producing it or producing it for oneself. A market startup has identified direct sales channels, has minimized startup and ongoing costs as much as possible, has found a way to make more money using fewer resources, has created a branded product that keeps customers paying year after year (CSA clients), etc... All businesses produce a consumable of some sort, for a market gardener the consumable is literally consumable, for a market startup, the consumable is metaphorically consumable. Perhaps similar principles apply for keeping the customer fed and happy.

The Market Gardener book was originally published in French as Le Jardinier-Maraîcher (2013), did very well as a French language gardening book, and was translated into English through financing from a crowd-funding campaign. You can read the book in either French or English.

Here is some creative market gardening that is trending on YouTube. Thirty seconds into the video it gets interesting.


Advanced Pitching Webinar [Selling
Posted on June 4, 2014 @ 07:11:00 AM by Paul Meagher

Oren Klaff, the author of Pitch Anything, and master investment pitcher, is offerring an advanced pitching webinar this thursday. The webinar registration link is here..

I've blogged recently about parts of Oren's book and enjoy his work. His views and body language are entertaining and thought provoking. Here is the invitation email that Oren sent:

I can look at your presentation for 60 seconds and know which of these three reactions a buyer will have:

  1. boredom
  2. mild interest
  3. wow!

Your job as the presenter is obviously to create that wow. How? It’s not too hard. Use the right structure and you will attract, engage and fascinate.

And if you want to learn how I do that, join me on Thursday. I plan to go beyond basics and show what pitch tradecraft is really about: making the audience feel anticipation, humor, tension, surprise.

A good pitch is a good pitch because it makes you feel something (not because it delivers information.)


IF you want to compel someone to invest in your product, service or idea, then you need the right structure to create emotional desire.

On Thursday June 5th at 12pm PST, I’ll show you advanced pitch tradecraft: how to turn your next presentation into an intensely satisfying emotional experience for your buyers.

Here are the learning objectives of the Thursday webinar:

Learn how to go beyond “facts, features and benefits” to create and deliver an emotional narrative that won’t be easily forgotten.

Learn the major mistakes nearly everyone makes when pitching a deal and how to audit your current presentation for these problems

How to fix your current presentation, even if you have a pitch later this afternoon.

Here is an recent update from Oren with an example of a pitch he gave recently:

Here's the opening lines of pitch I recently gave. These exact words attracted more than $100 million of interest in the deal, and ultimately closed more than $25M.

"Gentlemen, here's the opportunity in 127 words:

If you recently saw a great movie like Spiderman, Frozen or even Zero Dark Thirty, then you are in good company. In the US, so did 1.3 billion other people.

Today, the theatre business is a $15 billion chunk of the American economy, and it’s growing fast.

So where’s the opportunity in all this?

Changes in consumer preferences are giving small theaters a real advantage over large ones. THE MOST PROFITABLE BUSINESS MODEL in the movie theatre industry is upgrading uncomfortable terry cloth seats to large leather seats, the size and quality of First Class airline seats.

When you upgrade a theater this way, you make $5 more per ticket. You take a large share of the local market. And you improve profits by more than 25%.

This presentation is about Acme Theatre’s high-margin business in the acquisition, upgrading and operation of movie theatre assets."

To learn how to craft the best opening minute possible (I call this the Big Idea), join me here on Thursday 12pm PDT (3pm EDT).




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