Posted on Techdirt - 22 February 2008 @ 12:09pm
As more entrepreneurs set their sights on the potential to make money (and ostensibly do some "good" in the process) in the solar power industry, it would seem obvious that Silicon Valley would emerge as a hotbed of activity. Anecdotally, Silicon Valley is home to more aspiring founders and CEOs per capita than any other place in the world; people flock here ready to take their shot at the-next-big-thing. The Valley's many success stories have spawned a large group of people who have the name recognition and/or money needed to tackle big challenges. In a recent column, The New York Times draws connections between the experience and aspirations of Silicon Valley's business elite and the likelihood Silicon Valley could also become "Solar Valley".
While many people are looking for the first solar industry Google to emerge, it is companies like Intel that provide the better template for what Solar Valley businesses might look like (Moore's Law having nothing to do with it). Google became a household name and corporate giant barely a half decade after its founding. Key to that success is competing in an industry with low capital requirements, and where creating a successful brand can be a self-fulfilling. On the other hand, Intel was around for twenty five years before its marketing efforts led people to start asking for Intel Inside; even today Intel's products remain essentially hidden behind the more visible brands of PC manufacturers. Like chip companies, solar businesses face capital-intensive startup and long product development cycles. As a whole, the solar industry faces development hurdles like land acquisition, permitting, environmental review, and transmission capacity, which will limit the rate at which solar companies can grow. And solar companies are unlikely to earn much of a premium on their name: your electricity bill will not say Energized By Ausra any time soon. Even residential products will be sold through local solar installers, and homeowners are more likely to choose an installer based on the best value for the service than any particular panel manufacturer that that installer represents.
There's no doubt that interest and investment in solar power will continue to grow in Silicon Valley, and the area will almost certainly produce success stories. But the nature of the industry means that most of the magazine covers will stay reserved for members of the Internet crowd.
5 Comments | Leave a Comment..
Posted on Techdirt - 6 February 2008 @ 4:52am
There may be nobody that knows the excitement of joining the hot-Internet-company-du jour better than Udi Manber: Chief Scientist at Yahoo, 1998-2002; CEO of A9.com, 2002-2006 (A9 was hot for a minute or two, right?); VP Engineering at Google, 2006-present. Udi's resume exemplifies the aspirations of many a talented computer scientist and/or software engineer, all hoping to work for the next bright star in the Silicon Valley sky. And Udi is probably just one of many who have successfully leapt from one hot, cool company to the next. The New York Times thoughtfully considers the consequences of this pattern in light of the proposed Microsoft-Yahoo merger.
It is indeed unlikely that a combination of these two giants would be very appealing to those finicky tech workers who are looking for the next big thing. However, it's been awhile since either Microsoft or Yahoo has been the next big thing, and yet neither have shown much trouble filling their ranks; clearly plenty of workers are content to have a well-paying job at a stable company. It is also probable that some employee attrition would follow on the heels of a completed merger. But this is not the case of start-up being acquired, where the start-up company's technology is often in the early stages of development and the buyer is paying as much for a smart, ambitious team as it is for the lines of code that have been written. In fact, part of Microsoft's plan may be to trim the fat beyond the 1,000 layoffs already announced by Yahoo, and some of those jumping ship may simply be sparing the efforts of the executioner's blade.
The human resources challenges associated with the evolution of a company from hot stuff to yesterday's news have already been priced in to this deal. Those challenges are certainly correlated with Yahoo's underperformance over the past few years and, subsequently, to the price of its stock. And Microsoft has no doubt considered how these challenges might continue or be aggravated by a merger; their offer reflects such considerations. Yahoo is a mature brand with a very large audience and, recruiting and retention problems notwithstanding, Microsoft believes that they can wring greater profits out of those assets than Yahoo's own management has been able to. Don't expect MicroHoo to become an exciting upstart that appeals to the likes of Udi, but don't expect that this fact will deter Microsoft from pressing forward with their plans.
8 Comments | Leave a Comment..
Posted on Techdirt - 20 December 2007 @ 1:12pm
Nuclear Power 2.0
from the can-you-say-nu-cle-ar? dept
For a long time I held a fairly unpopular view: I thought that the United States had made a big mistake by tabling its nuclear power industry in the 1970s. Surely, I thought, researchers and operators would have found ways to make nuclear plants clean and safe by now, had the industry continued its growth. Building new nuclear power plants was never made illegal, but it became unpalatable. A new nuclear plant has not been developed in the U.S. in more than 30 years. While interest in building additional nuclear power capacity has recently reemerged, I have found myself with a complete change of opinion: not only has the 30-year hiatus not dampened hopes that nuclear power might yield a safe and secure energy source, but the effective prohibition has actually provided incentives for innovation in the industry. A number of other nations have continued their nuclear power programs and, while there hasn't been a major nuclear accident in
more than 20 years, nuclear plants built in recent years share the same basic design as the last plants built in the U.S. Now, to win over nuclear skeptics, a number of companies from upstarts to multi-nationals are developing the next generation of nuclear power technology. These new technologies are intended to address concerns over plant safety, nuclear waste, and security through innovative new designs and materials. Thus, it appears the hiatus actually drove more innovation in the space as innovators had to design around the worries from people. These firms are hoping not only to compete not against wind, solar, geothermal, etc. for a share of alternative energy investment capital, but also to go head to head once again against coal and natural gas power plants as a primary source of new energy. With the opposition to nuclear power forcing companies to explore innovative new designs and materials, they stand a good chance against a legacy energy industry that has had very little incentive to innovate over the past three decades.
22 Comments | Leave a Comment..
Posted on Techdirt - 13 December 2007 @ 8:01pm
The clean-tech sector -- along with every other sector, company, and person who uses energy -- suffered something of a setback today at the hands of the United States Senate. By a vote of 40-59, federal tax incentives for clean-tech investments will be left to dry up at the end of next year. Using the 2007-2008 Senate math that most of us missed in 8th grade civics class, it now takes 60 votes to get anything done, including an extension of current renewable energy investment tax credits set to expire. These tax credits have played a big role in the surge of investment into wind, solar, and other clean energy technology. The votes of 40 Senators certainly don't reflect the feelings of their constituents (Americans are almost unanimous in their support for developing new sources of renewable energy) but the issue is more complicated than 39 Republican and one Democratic congresspeople who are sour on solar. The clean-tech incentives ran into a roadblock when supporters insisted on -- you'd better sit down for this -- paying for them. Specifically, the tax incentives would be paid for through the year 2016 by repealing billions of dollars of long-standing subsidies to fossil fuel companies. The escalating costs of energy are being felt by Americans who are paying significantly more to fuel their car, heat their home, and keep their lights on. Higher energy costs will eventually work their way into just about every product that we purchase and every service that we have come to enjoy. A near-decade-long extension of the federal incentives would have significantly leveled the playing field versus legacy energy systems and paved the way for continued acceleration of investment into clean-tech. The sector has seen false starts before as incentives have come and gone. Today's inaction dampens hopes that energy consumers will have alternatives any time soon, and leaves individuals, companies, and entire industries at the ongoing mercy of an aging and unstable fossil fuel infrastructure.
10 Comments | Leave a Comment..
Posted on Techdirt - 11 December 2007 @ 12:11pm
There's no debate that the clean-tech sector has been enjoying a surge of interest from the venture capital community. Wired magazine takes a quick look at some recently released data that shows that clean-tech investments by VC have surged to new heights in 2007. The article notes that clean-tech dollars are closing in on the amount invested in Internet start-ups which, naturally, raises the specter of everyone's favorite B-word: Bubble. Yes, the accelerating rates of VC investment into clean-tech companies might chart something like late-90s VC Internet start-ups. Yes, 2008 may indeed bring some clean-tech "venture flameouts" reminiscent of Webvan and eToys. Overall, though, using the history of the Internet sector as a yardstick (let alone a forecasting tool) for clean-tech is naive. The article does steer away from this analogy to some extent: on the whole, clean-tech companies will be measured the old fashioned way, in revenue dollars rather than in clicks, page views, or eyeballs; clean-tech companies are generally trying to capture pieces of some very large existing pies, rather than define and create new markets for themselves; and clean-tech businesses look more bricks-and-mortar than Internet in terms of infrastructure requirements.
Digging a bit further into the numbers provides some insight into whether or not VC firms are looking at clean-tech as the Internet-boom redux. While clean-tech VC dollars are closing in on the amount invested in Internet start-ups, the number of companies funded with those dollars is much fewer (168 deals over three quarters of 2007 compared to 195 Internet deals in the third quarter of this year alone) and the value of those deals is substantially bigger (upwards of $11MM on average, compared to $5-6MM avg. for Internet companies). The number of new Internet companies getting funded far exceeds new clean-tech businesses, meaning much of the clean-tech money is re-investment in existing companies. In this light it's fair to say that the growth in VC dollars for clean-tech is more indicative of a maturing sector than of a bubble buildings to a burst. A few billion dollars seems to be a reasonable investment toward trillion dollar opportunities. But if I start seeing beige-and-white box vans driving around San Francisco again, and sock puppets on TV, I'll start getting worried.
5 Comments | Leave a Comment..
Posted on Techdirt - 26 October 2007 @ 7:34pm
For most teenagers, getting their driver's license is a rite of passage that marks a newfound freedom. The idea of having their driving monitored using GPS tracking devices would seemingly make a teenager more surly than a NYC Taxi Driver.
At least one teen might feel differently if he is successfully able to challenge a speeding ticket using data from the GPS tracking system installed in his car that ostensibly shows the car moving at the speed limit within 100 feet of where he was clocked speeding.
Drivers have long been at the mercy of the court when pleading their innocence to charges of a traffic violation. As the article notes, the courts have been for the most part merciless, with the he-said of the ticketing cop and his radar gun being upheld in most cases over the she-said of the driver. Technology used by the police to nab traffic offenders is usually taken at face value, despte cases where it is obviously flawed.
GPS tracking systems in personal vehicles could restore some balance towards drivers falsely accused of speeding, but first the courts will have to both understand how the technology works (nontrivial, perhaps) and also satisfy themselves that the data is true and accurate.
The courts will no doubt want a say in how GPS tracking services record, secure, and authenticate their data before weighing them heavily as evidence. Existing service providers may step up to this challenge and offer "traffic court certified" service at a premium.
Perhaps those drivers whose GPS tracking systems have earned them a discount on their car insurance will wind up reinvesting a few of those dollars into service that might some day get them off the hook in court.
41 Comments | Leave a Comment..
Posted on Techdirt - 24 October 2007 @ 1:11pm
The latest chapter in the tech patent saga comes in the form of a lawsuit by Aruba Networks against Motorola subsidiaries Symbol Technologies and Wireless Valley Communications. Aruba's lawsuit is actually a counter-offensive to a lawsuit filed in August by Symbol and Wireless Valley that accuses Aruba of infringing upon several of their patents.
The punch line of the counter-suit is the revelation that, in 2003, Aruba opened its robes to Symbol during due diligence for a potential acquisition. Now, after chewing for four years on what it learned about Aruba's system, Symbol suddenly claims that Aruba's technology has, since the beginning, infringed upon Symbol's patents.
In how many ways does this case illustrate some of the insanities of the patent system? For one, patents applied for by Symbol in February 2001 were not granted by USPTO until February 2007.
While prudence in patent examination is expected, six years is a lifetime in technology years. Making the assumption that the technology in question is justifiably patentable, the USPTO clearly failed Symbol: its market share in WLAN hardware has dwindled in the intervening years while Aruba's has grown strongly.
Checking that assumption, it's difficult to see how technology that was simultaneously developed by no fewer than four different companies (Symbol, Aruba, Airespace, Trapeze Networks) qualifies as novel, non-obvious, and therefore patentable.
But it's the entire timeline that perhaps best illustrates the lunacy. In 2001 Symbol had an idea, and Aruba Networks didn't yet exist. By 2003, Aruba was delivering its product to customers but Symbol still hadn't made it to market and was kicking the tires at Aruba.
Fast forward to 2007, Symbol's market share has fallen to third place and fading behind Aruba (even holding that position largely due to sales of legacy WLAN hardware, I suspect) and suddenly it discovers that all along Aruba has been infringing upon its "invention".
It's a sad but popular refrain made possible by the soft protectionism that is the current patent system.
4 Comments | Leave a Comment..
Posted on Techdirt - 11 October 2007 @ 4:45pm
As posted today on BoingBoing, the upcoming release of SimCity Societies asks game players to consider how their city-building choices affect (virtual) climate change. Upping the ante on Chevron's online game Energyville, Societies was developed in collaboration with BP, nee British Petroleum. By piggybacking on the success of the SimCity franchise, BP will gain access to a much larger audience than Chevron's strategy of hoping users find its standalone game. While their stated goal of raising awareness of climate change issues and energy alternatives is admirable, BP's in-game branding smacks more of marketing than of educating. The real missed opportunity, however, would be if BP just uses the game to talk at players, even if what they have to say is informative. The SimCity community is one of the oldest and biggest "connected" communities around, and the very nature of the game brings together millions of individuals who enjoy solving problems. Rather than creating a glorified brochure, BP should leverage their participation in the game to foster a conversation between the company and individuals. That could mean allowing players to provide feedback on their experiences with in-game climate change or even (at the player's discretion) sending back entire game-play sequences that could be
compiled and dissected by the company. BP, which faces changing realities of the energy industry, would do well to consider that they might learn more by listening to their customers than by telling their customers what the company already thinks. No such intent is obvious from what BP is saying about the game, but maybe we'll be pleasantly surprised.
7 Comments | Leave a Comment..
Posted on Techdirt - 3 October 2007 @ 4:08pm
It will come as no surprise to air travelers that this year has been the worst on record for flight delays and cancellations. Since technology failures played a role in some of the year's worst headaches, it's a fair question to ask whether better technology might fix what's broken with air travel.
There's little debate that the nation's air traffic control system needs updating; contentions arise over who will take responsibility for it.
Yet, while the FAA and the airline industry might spend another decade hashing out major infrastructure upgrades, the airlines should be investing now in technology that can provide relief to their customers in the short term.
Investments to improve areas such as crew management, gate management, and flight scheduling, would take compounding bites out of the problem of delays.
Yield management systems, technology in which airlines already invest substantial sums, could be tweaked to account for goodwill lost to cancellations and delays.
Most significantly, more information given to air travelers, both at the time they purchase tickets and at the time they fly, will arm them to make better decisions about when, where, and whether or not to get on an airplane.
Airlines would do well to consider how technology innovation could improve their customers' experience. Much as JetBlue distinguished itself early on by offering superior service, passengers will reward an airline that provides an overall better travel experience.
Airlines need not fear the costs of making these investments, because the cost of not making them could be much higher. Witness, again, JetBlue, whose reputation and stock price have still not recovered from customer relations missteps made earlier this year. Instead, airlines that employ new tech to take some of the pain out of air travel may join the growing number of companies who find themselves rewarded by shareholders for providing better service to their customers.
11 Comments | Leave a Comment..
Posted on Techdirt - 19 September 2007 @ 2:08pm
ComputerWeekly recently ran an article discussing some of the complexities companies face when considering a slew of new "green IT" products. While the middle of the article reads more like a press release, it does conclude with a few sharp points about companies that have made the connection between green tech and ongoing waste reduction efforts. When companies consider "going green" strictly from an environmentalist's point of view -- that being green is socially responsible and is inherently a good thing to do -- most will find insufficient justification for making any significant investment. However, as more companies demonstrate that green tech investments, properly made, translate to long term cost savings, others will follow suit. It makes sense for green tech vendors to feature the efficiency improvements of their products and services because, environmental benefits aside, reducing waste and inefficiency is a practice with which most companies are already well versed. If the industry is successful in their efforts to reframe green tech from a moral to a fiscal consideration, decision makers will be able to evaluate it in terms with which they are much more familiar: the bottom line. Once the discussion centers around dollars and cents rather than birds and trees, every sensible company will have to determine not if, but which green tech investments will improve their efficiency and overall business.
11 Comments | Leave a Comment..
Posted on Techdirt - 12 September 2007 @ 1:34pm
As big energy companies jump into the green tech gold rush, some of them have faced criticism that their efforts amount to little more than a cosmetic makeover. Chevron's recent release of an online game in which players are asked to tackle the energy demands of a virtual city does little to soothe such critics. Chevron was beaten to the punch by Starbucks, of all companies, who launched a similarly themed online game back in April. Both companies state their aim to increase awareness of energy issues and encourage participation in the search for solutions. Judging by their investment of creativity into these games, however -- Starbucks' "Planet Green Game" is both more fun and more informative than "Energyville" -- the energy company has been soundly beaten on their own turf by the coffee company (even then, Starbucks' game won't be mistaken as much fun or brilliantly informative any time soon). Chevron appears to have realized that video games can be a useful tool to reach the upcoming generation of their customers and investors; it so happens that it is also this game-playing generation that will face the environmental, security, and economic problems related to energy demand. Unfortunately, Chevron's half-baked game is unlikely to generate any real dialogue, and, for critics, it certainly fails to demonstrate a serious commitment by the company to solving these problems.
5 Comments | Leave a Comment..