The new medium is the old medium

A few months back, I wrote a post about the power of video as a prototyping tool.  More such videos are coming out and it's exciting to watch this tool become so powerful even as it moves into more and more hands.  Again, distributed production. 

As I said before,

Perhaps not surprisingly, effective technology development teams
embrace prototyping to design products and services.  Yet those same
engineers and scientists turn around and try to describe and sell their
ideas without designing the communication process.

The short
video, done well, not only communicates more information in 3 minutes
than a powerpoint presentation can get across in 15 minutes, but allows
for prototyping.  Express, test, cycle.

Who wouldn't rather watch a compelling 3 minute video than read through 5 online pages, or download and read a brochure?  And as broadband gets broader, and publishing tools get easier, this will push production capabilities out to the margins in ways we can't imagine yet. 

Here are some of the more interesting recent examples I've seen. Sure, these are done by professionals, but increasingly for smaller customers and means.

XPlane has made the move from graphic design to video communications tools—and using Apple's Keynote software to do it.  This video, Did You Know 4.0 (an update to earlier versions), is wonderful:

As is this compelling video by Jake Harriman, founder of Nuru International, and a Marine Corps veteran (and Stanford MBA student), describing his new social venture.  The quality of the video (and their website) demands the viewer to take the organization seriously.  

The End (Jake's Story) from Nuru International on Vimeo.

Every entrepreneur should figure out how to tell their story in this medium.

Driptech and the opportunities in distributed production

BusinessWeek recently highlighted Driptech among their “Most Intriguing Businesses.” I first met Peter Frykman when he participated in our 2008 Green Technology Entrepreneurship Academy, passionate about the commercial opportunities he could envision for his new technology.Driptech_product

There are countless social entrepreneurs starting businesses in the developed world for customers in the developing world.  Most exceed the intentions-to-understanding ratio. Peter and Driptech had the advantage of going through Jim Patell’s Design for Extreme Affordability class at Stanford, and its focus on the user and use context, and seemed to have broken through to actual usefulness.

As BusinessWeek says

Frykman’s breakthrough was the realization that such systems didn’t
have to be made in large manufacturing facilities and then exported
abroad. Instead, they could be made with cheap plastic tubing and
compact precision lasers, even in facilities in target markets.

Driptech’s innovation includes a better drip irrigation system—cheap enough and simple enough for small-scale farmers—along with a better manufacturing process. And it’s the production process, as much as the product, that enables broad diffusion.  Manufacturing is localized and draws on low cost and globally available materials (polyethylene tubing). In BusSpeak, that means value creation is pushed to the margins of the network, to the benefit of the local and critical partners in distribution, sales, and service.

Distributed production may be the coming industrial revolution–the tools that enable small and local producers to acquire precision manufacturing capabilities.  First to produce someone else’s designs but soon enough to be able to adapt and reconfigure for their own.  Given its product and mission, Driptech could be one of the more rewarding of the early examples.


IDEO on TED, Tim Brown on thinking big in design

For anyone not already in IDEO's PR reach, Tim Brown's presentation at TED in July has been posted.  Tim does a great job talking about how design become a narrow profession—"a priesthood of folks in black turtlenecks and designer glasses working on small things." And in talking about how design can become something more.  

In many ways, Tim's remarks on design challenge us in the same way that Drucker challenged managers: "It's not enough to do the thing right; you need to do the right thing."

Design thinking, in this way, is becoming a powerful frame for thinking about innovation, one that focuses on the process (innovating) and not the outcome (innovation).  It's one thing to say people should "innovate" but, because innovation-as-process is so closely associated with innovation-as-outcome (eg., a revolutionary market success), such behaviors are hard to pursue. 

I once asked a class full of senior executives whether they wanted innovation. They all said yes. When I then asked whether they wanted their direct reports to spend time developing and experimenting with new ways of doing their work, they all said no.  They wanted innovation-as-outcome but not not the process.

Design thinking describes what you should do when you're innovating, but in a way that sounds more manageable and more useful.

More on cash for clunkers

A recent study by Consumer Energy Report on the Cash-for-Clunkers program offers some additional alternatives for how the cash might have been spent. After counting how many low-mileage SUVs and trucks were purchased through the program, Lisa Margonelli offers some other alternatives.

“For that much money, we could have
gotten a lot more,” says Lisa Margonelli, who directs the New America
Foundation’s Energy Productivity Initiative. “Consider this: Cash for
Clunkers only required a fuel economy increase of 2 mpg over the
original car, so the total mandated gas savings was about 38 million
gallons of gas. The auto companies can raise the fuel economy of cars
on the assembly line by that much at a cost of $500 per vehicle. So, we
could have given our $2.87 billion to the auto companies to upgrade 5.5
million cars by 2 mpg or more, and bought ourselves a yearly fuel
savings of 303 million gallons of gas.”

That's an 8-fold increase in annual fuel savings. Maybe not as bold as my earlier "modest proposal", but still a useful perspective on how to spend money effectively if the objective was to reduce our dependence on gasoline.

Thinking and doing

One of the central tenets of our Center for Entrepreneurship's programs is that bringing ideas to reality and to the broader market is about effectively combining thinking with doing. Joseph Schumpeter said it well:

To undertake such new things is difficult and constitutes a distinct economic function, first, because they lie outside the routine tasks which everybody understands and secondly, because the environment resists in many ways… This function does not essentially consist in either inventing anything or otherwise creating the conditions which the enterprise exploits. It consists in getting things done [italics added].

Obviously, there is a great deal of "thinking" involved with getting things done, but none of it counts for much without the "doing." Perhaps more importantly, it's not about how well you think before you do but rather how well you integrate the two very different activities so that they support and build on each other. A longer post on this is overdue, but suffice to say there is a need in higher education—and the MBA in particular—for a new focus on "getting things done."

Rick Reis's Tomorrow's Professor email newsletter shared this quote from, and link to, a very apropos essay on the need
for college education to embrace the art and science of doing—not just

"Analytical thinking is an incomplete educational agenda in part because it disconnects rationality from purpose, and academic understanding from practical understanding or judgment. In order to prepare for decision and action in the world, students need to develop not only facility with concepts and critical analysis but also judgment about real situations in all their particularity, ambiguity, uncertainty and complexity. They need to develop practical reasoning."

The essay appears in this month's Carnegie Perspectives, by Senior Scholars Anne Colby and William M. Sullivan write and is adapted from an article with the same title that appeared in the winter 2009 issue of Liberal Education, published by the Association of American Colleges and Universities. Both come from the Carnegie/Jossey-Bass book, A New Agenda for Higher Education: Shaping a Life of the Mind for Practice.

UC Entrepreneurship Academy, September 14-18, 2009

UC Entrepreneurship Academy

September 14 – 18, 2009 @ UC Davis

out of the lab and into the world


The one-week UC
Entrepreneurship Academy
is designed for science and engineering graduate students, post-doctoral researchers and faculty who want to explore
moving their research out of the lab and into the world.
Through a combination of lectures,
exercises and team projects,
participants gain the ability to recognize, develop and communicate
potential opportunities arising from their research.

Learn to:

  • analyze, enhance and communicate the broader potential impact of your research
  • build a business skill set for a career in industry R&D
  • evaluate market and technology opportunities for your research
  • network with industry and investment experts around your research and career

Open to science and engineering graduate students, postdocs and faculty from any university. The
one week program runs Monday through Friday at UC Davis.

"The academy has been the single most eye-opening experience in my professional
development journey thus far. This is 'must do'..." – Cawas Engineer, University of California, San Diego

"It is very difficult for me to get out the lab to do anything.
Taking me out of the laboratory to meet these people is the best thing
possible. – David Mendoza-Cozatl, University of California, San Diego


"The academy was
challenging, interesting, exciting and important. The connections, the
mentors, my classmates, and the hosts have all contributed to my sense
of entrepreneurship, my ideas, and my network.  A very positive
experience." – Mac McGoldrick, Colorado State University, Fort Collins

 For more information, visit our Web site >>

A cooler X-Prize

At the beginning of June, the Western Cooling Efficiency Center at UC Davis announced the Western Cooling Challenge, a more modest version of the X-Prize which challenged industry to “slash electricity use by rooftop air conditioners in the western United States by more than 40 percent.”  Yesterday the first winner was announced.

The first certified winner of the UC Davis “Western Cooling Challenge”
is Coolerado Corp. of Denver. Recent federal tests showed that their
five-ton commercial rooftop unit should be able to air-condition a
typical big-box store with less than half the energy needed by
conventional cooling units. (UC Davis Challenge Produces a Better Air Conditioner)

Cooleradoc60 The target was a 40 percent reduction in energy use and peak
electricity demand compared to conventional cooling units. According to Director Mark Modera, tests indicated that the
Coolerado H-80 provides “almost 80 percent energy-use savings and
over 60 percent peak-demand reduction.”

Sure, it’s not developing the first spacecraft
capable of carrying three people to 100 kilometers above the earth’s
surface (twice within two weeks).  But the energy revolution—like all technology revolutions before it—won’t come from one giant leap. It will come from many small steps.

Rooftop conditioning is not as glamorous as space flight, it’s just an inextricable part of our daily lives: “Commercial rooftop air-conditioning units are used to cool 70 percent
of the floor area in nonresidential buildings in the western U.S.” Seeing as space conditioning is roughly one-third of the end-use energy consumed in commercial buildings, this is a sizable problem.

I have written before about the difference between moonshots and innovations in energy, and this is a great example of how change can happen.  Not because Coolerado has a great product, but because the Western Cooling Challenge could pull together the right network to make this technological leap and, at the same time, make the next one easier too.

Creating breakthrough energy technologies requires pulling together the variety of players that, in an old and established industry like space-conditioning, need to come together in support of a change.  Here’s the list of collaborators that the Western Cooling Efficiency Center pulled together:

    • Cooling system manufacturers will invest in developing new
      technologies and bringing them into production. (Partners already
      affiliated with the Western Cooling Efficiency Center include large
      industry leaders Trane, Lennox and Munters, as well as smaller firms
      with innovative technologies.)
  • Building owners and operators will provide a market for
    technologies developed for the Western Cooling Challenge. (Partners
    already affiliated with the Western Cooling Efficiency Center include
    industry leaders Wal-Mart and Target. The center also works closely
    with the California Department of General Services, which manages many
    state buildings in California.)
  • Electric utilities offer financial incentives to
    building owners and operators who adopt efficiency technologies.
    (Energy partners who have already committed to providing incentives for
    Western Cooling Challenge technologies include industry leaders
    Southern California Edison, the Pacific Gas & Electric Co., and the
    Sacramento Municipal Utility District.)
  • Energy regulators approve energy-efficiency programs
    proposed by utilities. (The California Public Utilities Commission has
    already set public energy-savings targets through their “Big Bold
    Initiative.” The Western Cooling Efficiency Center has incorporated the
    Big Bold Initiative into the Western Cooling Challenge goals.)
  • Universities and other public institutions provide
    unbiased technical support. (Partners who have already committed to
    supporting the Western Cooling Challenge include the U.S. Department of
    Energy, the National Renewable Energy Laboratory, and the California
    Energy Commission, as well as the UC Davis Western Cooling Efficiency
    Center, the challenge facilitator.)
  • Other nonprofit organizations that focus on energy
    efficiency. (Those that have committed to supporting the Western
    Cooling Challenge include the American Council for an Energy-Efficient
    Economy; the Southwest Energy Efficiency Project; the Northwest Energy
    Efficiency Alliance; the Retailer Energy Alliance; the Natural
    Resources Defense Council; and the New Buildings Institute.)

By bringing together the networks of collaborators whose support is critical, innovators focused on developing the next technologies can easily find, partner, and work with the major players in the industry.  Together, and around a common goal, they can (and this is the hard step) commit their support to turning these innovations into inextricable parts of our daily lives.

Cash for Clunkers: A Modest Proposal

Congress is authorizing an additional $2 billion to extend the Cash for Clunkers program, to be redirected from a program designed to support loans for green energy projects.  If the government is now looking for the most effective ways to use cash to green our economy, I offer this modest proposal.

Some background

U.S. consumers and car dealers burned through the initial $1 billion in the "Cash for Clunkers" program in this first week.  The additional $2 billion comes as a result of public outcry—273,077 consumers got in on the first deal and now there's a "run on the bank" as many more (both consumers and car dealers) are feeling left out (WSJ 8/11/09).

The Cash for Clunkers program is a political "two-fer." The original billion came from the stimulus package and was designed primarily to goose the comatose auto industry with the added benefit, however, of appearing green because the program was "designed to replace gas guzzlers
with more fuel-efficient vehicles." The additional $2 billion is coming directly out of the pocket of another stimulus program designed specifically to support green energy projects.  At this point, the congress and the administration is prioritizing its green efforts: cash for clunkers versus green energy projects. 

Congress appropriated $1 billion for the payments as part of the
stimulus package, which was quickly exhausted. In early August 2009,
lawmakers approved providing an additional $2 billion for the program,
intended to keep it alive through the end of the month, and President
Obama was expected to sign the bill. That money would be borrowed from
another stimulus program, a loan program for green energy projects. (NYT 8/06/09)

While the actual green benefits will not be known for several years (and much debate),  the Washington Post has a nice initial review of the issues here. Essentially, estimates put the green benefits of the Clunkers program at a savings of 7 million metric tons of carbon from 2010-2019 (about the lifetime expected, had those clunkers been kept on the streets).  In perspective, U.S. automobiles will emit 16,000 million metric tons during that same time, so congress is spending $2 billion to offset 0.04% of U.S. auto emissions. 

By comparison, the Obama Administration's proposed improvements in new automobile fuel-efficiency will offset roughly 220 million tons (a 1.3% drop): 

The new standards, covering model years 2012-2016, and ultimately
requiring an average fuel economy standard of 35.5 mpg in 2016, are
projected to save 1.8 billion barrels of oil over the life of the
program with a fuel economy gain averaging more than 5 percent per year
and a reduction of approximately 900 million metric tons in greenhouse
gas emissions. This would surpass the CAFE law passed by Congress in
2007 required an average fuel economy of 35 mpg in 2020. (White House Press Release)

A Modest Proposal

So as Congress debates the worth of increasing the fuel efficiencies of America's cars and trucks, I offer this modest proposal for how we might best spend the next billion-dollar program of Cash for Clunkers.

My proposal is based on a few simple assumptions.  The Lincoln Savings & Loan scandal of 1989 provides some useful data.  Five senators "were accused of improperly intervening in 1987 on behalf of Charles H. Keating, Jr., chairman of the Lincoln Savings and Loan Association, which was the target of a regulatory investigation by the Federal Home Loan Bank Board (FHLBB). The FHLBB subsequently backed off taking action against Lincoln." (see Keating Five).  Aside from costing the federal government $3 billion, we learned that Charles Keating had made substantial political contributions to these five senators for a total of $1.3 million dollars. 

According to, $1.3 million in 1989 is the equivalent of $2,257,208.87 in 2008 dollars.  Rounding up to $2.5 million suggests that the current price of a U.S. Senator's influence is approximately $500,000 (in 2008 dollars).  It's possible, given the politics of the past decade, that prices in this market have increased at a faster pace than the overall economy, so let's be conservative and set the price of influence at $1 million per Senator.  I'm going to make the (generous) assumption that Representatives cost roughly the same, though by numbers they should only cost a fourth of that. 

At 435 members of the House of Representatives, and 100 members of the Senate, that puts the total at $535 million to buy up all the influence of Congress on a particular issue.  We could assume that we only need half as much to ensure passage, but why not get everyone involved.  That increases the chance nobody will complain or whistle-blow.

So ensuring the passage of any higher fuel efficiency
standards or other energy efficiency or clean energy legislation, then, would come with a price tag of approximately half a billion dollars.  That's 1/6th of the total spent on achieving a 0.04% improvement in auto emissions for the next 10 years. 

Seems like a great bargain to me.

ADDENDUM 8/13/09

From Professor Chris Knittel, Economist and transportation expert at UC Davis:


New UC Davis estimates say the federal government's Cash for Clunkers
program is paying at least 10 times the "sticker price" to reduce
emissions of the greenhouse gas carbon dioxide.

While carbon credits are projected to sell in the U.S. for about $28
per ton (today's price in Europe was $20), even the best-case
calculation of the cost of the clunkers rebate is $237 per ton, said
UC Davis transportation economist Christopher Knittel.

"When burned, a gallon of gasoline creates roughly 20 pounds of
carbon dioxide. I combined that known value with an average rebate of
$4,200 and a range of assumptions about the fuel economy of the new
vehicles purchased and how long the clunkers would have been on the
road if not for the program," Knittel said. "I even assumed drivers
didn't change their habits, although some analysts have suggested
that the owners of new vehicles will drive more than they would have
with their old cars.

"In the end, the lowest cost to remove one ton of carbon from the
environment was $237. More likely scenarios produced a cost of more
than $500 per ton, even when we accounted for reductions in
pollutants other than greenhouse gases. That suggests the Cash for
Clunkers program is an expensive way to reduce carbon."

Additional information:
* Analysis text <;
* Christopher Knittel home page <;

The Low tech, high stakes world of innovation

A few recent and distantly related events have strong implications for our thinking about fostering revolutions in energy.  In particular, the challenge of pushing old and large industries to adopt new technologies in hopes of making widespread change.

The first incident was PayPal's recent global service outage.  It lasted only about an hour:

"About an hour ago, PayPal started experiencing site issues
that affected the ability to send and receive money. We have all hands
on deck to get this fixed," said PayPal spokesman Anuj Nayar in a blog post about noon PDT. "We're really sorry for the inconvenience."(CNET)

According to PayPal executives, the company processes $2,000 in transactions every second, so an hour outage cost vendors who rely on PayPal about $7.2 million. PayPal's Total Payment Volume in 2008, according to the company, was $60 billion—"nearly 9 percent of global e-commerce and 15 percent of US e-commerce."

The second incident came in a distinctly different field.  This May, Lennar Homes, acknowledged its use of a new and defective Chinese-made drywall.

Lennar Corp. has identified 400 homes in Florida that have confirmed
problems with defective Chinese drywall, and it has set aside $39.8
million to repair the homes, the Miami-based home builder said in a
securities filing Friday. (WSJ, 5/31/09)

The drywall problem has affected more than just Lennar Homes, estimates of 100,000 houses built in 2006 and
2007 with the suspected Chinese
drywall.  According to the Wall St Journal (WSJ, 8/06/09):

Experts estimate it costs about $100,000 to pull out bad drywall and
replace corroded electrical wiring and appliances in an average-sized
home, and the problem is shaping up as a costly disaster for homeowners
and the battered housing industry. Many homeowners are hoping the
federal government will step in with some sort of aid similar to that
provided for victims of hurricanes and tornados, as well as a
moratorium on mortgage payments.

If proven a health hazard, the total cost to the construction industry for removing the tainted drywall adds up to approximately $10 billion in repairs.

For the small business owners relying on PayPal, an hour of lost revenue is costly.  But to the small contractors and drywall subs who may have to replace existing drywall, this kind of problem can put many of them out of business altogether.

Really sorry for the inconvenience

The two incidents together highlight a particular problem when thinking about the stakes of innovation.  High technology generally has an aura of high risk, of bold visions and big leaps.  And yet the real risks—the stakes—may have less to do with the innovation and more to do with where it's going.

As central as PayPal and other recent computing and internet innovations have become in our lives (think iPhones, Blackberries, Apples, Google, and Amazon), they're no match for the ubiquity and taken-for-grantedness of so many technologies that have become invisible and embedded in our lives. Think drywall, and then insulation, lighting, electricity, gasoline, internal combustion engines, tires, and on and on.

The risks of adopting a new product or technology are very different when it's a new behavior and relatively distinct from so many other aspects of life. While it seems as though they have become central to our lives, we're actually quite resilient when our computers crash, our internet access goes down, our cellphones drop calls.  We can manage. And anyway, why worry?  A few years down the road and we'll have moved on. Our biggest concern is whether we can keep our email address of cell number.

So a small business adopting Paypal is very different, in other words, from a small business adopting a new brand of drywall, putting it up, and then putting over that drywall the household electrical outlets and light fixtures, the trim, the paint, the finished flooring, the furniture, and a real live family. The low-tech product requires a larger commitment because the contractor (and home-owner) have to live with it for decades and, should it fail, has considerably more costs than simply replacing it. 

And that's just drywall.

Consider today's headlines around the energy revolution. Utility-scale solar and wind sound like technological breakthroughs, as does the smart grid.  But the utilities adopting them take the same risks as the contractor: they have to live with their choices for decades, indeed they are liable for those choices. 

At 34 years old, Microsoft is long past a start-up. It's operating systems are running approximately 90% of all personal computers, and yet the public has been relatively tolerant of the bugs, incompatibilities, and poor performance of its latest version, Vista (which to date has over 360 million users).  Imagine waking to find that your utility has installed an upgraded version of your power meter, and half of your appliances are no longer compatible. Or worse, imagine that your new Microsoft CE power meter has a virus (questions about the security of the smart grid are finally starting to surface).

Now imagine you're the utility. Would you bet your company on someone's high tech product when mistakes in low tech choices carry high stakes?  The moonshot and Manhattan project were high-tech, but these projects never faced the challenge of adoption by a reluctant market.  Investing in the next energy revolution requires accounting for the market: those who would commit their businesses to adopting, installing, and standing behind the new technology for decades. 

Are we designing solutions low-tech enough for them?

Pursuing science in and out of the Ivory Towers

In talking with Andy Revkin of NYT (Views on Fueling an Energy Quest), I threw out an informal statistic that has been talked about on our campus regarding the number of doctoral students in science and engineering who take jobs in academia versus industry, and questioned whether their graduate training gives them the right skills to generate scientific findings that address (or can feasibily be applied to) real world problems.

Fig03-33 So how many of the 30,000 graduating PhDs in Science and Engineering each year are going into academia?

According to a survey by the NSF, approximately 26% have secured tenure-track appointments 4-6 years after graduation.  This number is skewed by the high number of social scientists included,  If we look at engineering and the life sciences, those numbers drop, respectively, to 16% and 21%.  Approximately the same number are holding postdoctoral and research staff appointments in universities.

Assuming a reasonably steady-state situation, that would suggest that somewhere between 60-70% of graduating PhDs in the life sciences and engineering are going into jobs outside of academia.  This number jibes with a survey of graduating UC doctoral students conducted by  Mary Ann Mason and Marc Goulden (UC Doctoral Student Career Life Survey, 2006) that found only 36% of male and 27% of female doctoral students wanted university research positions.

Essentially, the majority of graduating PhDs in life science and engineering are pursuing jobs outside of university research labs. Their training, however, comes from those who remained.

One of the big challenges for universities over the next several decades is to prove their value in a world that has fewer resources to devote to greater social and environmental crises.

A century ago, the federal government established the land grant universities with an explicit mission of helping address real and pressing problems.  Researchers worked closely practioners (mostly farmers, as the economy was dominated by agriculture) to ensure best practices were identified and shared, and new technologies diffused rapidly where they would help.  In the time since, federally-funded research has made such industry interactions unnecessary. Research funding (and overhead) came to depend on the peer-reviewed grant process, in which scientists evaluated the value of their colleagues’s work and helped allocate research dollars across the field.

The links between the needs of society and of science weakened, and the need to train scientists to understand and work effectively with others outside the academe went away.  So here we are, with pressing social and environmental problems, and a system that has undermined science’s ability to lead in the changes we desparately need.