Solar cost trends

Good friend Dr. Chris Wedding forwards an excellent analysis of solar industry and the growth of solar.  Growth of solar to me is not how much upside there is for the investor but how cheap the energy use is for the consumer (see graph below). The article is more directed towards ROI for investors.

Enjoy the article here.

Ofcourse the recent allocation of $1B by Mr. Bill Gates and his co-directors (including Alibaba founder Jack Ma, Reliance Industries chairman Mukesh Ambani, venture capitalists John Doerr and Vinod Khosla, former energy hedge fund manager John Arnold, and SAP cofounder Hasso Plattner) towards clean energy has been in the news with Breakthrough Energy Ventures. Energy investments have not been successful because the standard model of Silicon Valley mindset based investment returns do not occur in the short timeframes nor the standard software style business models apply.  I was delighted to read the following from John Arnold:

"“Being a 20-year fund with patient capital that’s not needing short-term gains allows us to have a longer-term outlook as well as fund technologies that don’t fit into the traditional VC model as it exists today,” says Arnold."

Read the complete article at Quartz here.

Art of stating the obvious

McKinsey & Company's Mr. Marcel Brinkman, Mr. Scott Nyquist, Mr. Matt Rogers, and Mr. Richard Ward published "Five technologies for the next ten years" in September 2016. It is a good article consolidating technologies that will impact oil and gas. Though it is a delightful foray into stating the obvious, information that has been well know for the past two to four years.

"Five technologies will change the oil and gas industry: mobile will speed oilfield transactions, increase efficiency, and improve safety by removing people from harm’s way; the Internet of Things (IoT) will reduce the cost of repairs; machine learning will provide ever more optimal solutions to field challenges; robotics will upend the question of who does the work, and blockchain will make contracting faster and smoother than ever before."

Please read the obvious here!

Mr. James Dimon: Exceptional insights and foresights

This is a delightful interview of Mr. James Dimon, Chairman and CEO, JPMorgan Chase & Co., speaking with the Economic Club's president David M. Rubenstein on Monday, September 12, 2016. In 45 minutes, Mr. Dimon covers politics, economics, and current and future state of the world and much more. If there was ever a case to be made for the strength that America offers now and in the future, this interview covers it.

Counterpoint: Uber

"... it is a rerun of the oldest sort of business: middlemen insinuating themselves between buyers and sellers."

Writes Mr. Leo Mirani on Quartz here via Ms. Aruna Viswanathan  Mr. Mirani offers a compelling counterpoint to the much hyped Uber for X concept and the build up of the sharing economy.

"There are only two requirements for an on-demand service economy to work, and neither is an iPhone. First, the market being addressed needs to be big enough to scale—food, laundry, taxi rides. Without that, it’s just a concierge service for the rich rather than a disruptive paradigm shift, as a venture capitalist might say. Second, and perhaps more importantly, there needs to be a large enough labor class willing to work at wages that customers consider affordable and that the middlemen consider worthwhile for their profit margins."

The middleman has always been a part and parcel of business from time immemorial.  Real estate and financial transactions being the oldest.  One could say that religions may have cornered the market in creating the man in the middle business, yes?

The article is worth a read and refreshing, though what it highlights as the key reason for such economies to emerge, income inequality, is a bit disconcerting.

Entrepreneurism in the USA

The drop of entrepreneurism driven growth in the USA has a plethora of reasons.  One of them is US's policy on immigration:

"For decades, the United States invited the world’s best and brightest to come and study at its universities and provided them with temporary work visas. But it placed tight limits on the numbers of permanent-resident visas for those who wanted to stay, so the lines grew longer and longer. My research team at Duke, Harvard and NYU documented that there were, as of October 2006, more than a million skilled workers in “immigration limbo” in the United States, with only 120,000 green cards being made available every year for their work categories. Ten years later, I estimate the number of skilled workers in limbo is roughly 1.5 million. I explained in my book, “The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent,” that this would lead to a reverse brain drain. That is exactly what happened."

Writes my friend Mr. Vivek Wadhwa in The Washington Post opinion column Fewer foreign entrepreneurs say they need the U.S. That’s a problem here.

This has resulted in entrepreneurial innovations growing across the world.  Mr. Wadhwa's conclusion is correct - The tide has surely turned:

"The world’s entrepreneurs used to dream of coming to Silicon Valley because it was the innovation capital of the world and there were few opportunities elsewhere. This is no longer the case, as I learned during my recent trip to New Delhi. There are start-up incubators sprouting up all over India, and the quality of the start-ups is second only to those in Silicon Valley and China, which are running head to head.

I spoke to about 50 entrepreneurs at local incubators and meetups. Unlike earlier generations, very few had interest in moving to the United States. Most said they believed the greatest opportunities were in India. As technology designer Himanshu Khanna said, “Why should I move to Silicon Valley when I have a market 10 times as large here?” Five years prior, Khanna had asked me to sponsor him for a long-term U.S. visa, which he could not get.

The tide has surely turned."

Telco: New commercial models

Federal Communications Commission (FCC) has a new proposal, "The FCC has a plan to free us from our cable boxes" here at Wired.com:

"But cable providers may still fight this proposal. This is the latest in a string of plans hatched by the FCC to rein in the telecommunications industry, including the agency’s net neutrality rules and new regulations on how much telcos can charge for phone calls made from prisons. The telco industry is currently fighting the the FCC’s net neutrality regulations, and has already defeated the agency’s attempt to stop states from banning municipal Internet service. With $20 billion a year in rental fees on the line, the industry is unlikely to stand still."

Looking forward to the new wave of innovation in telco.

Hyped up Gartner Hype Cycle

In a recent posting from TTI/Vanguard:

"Has anything on the Gartner hype cycle been hyped quite as much as the Gartner hype cycle itself has? In any event, it’s always interesting. [I agree] The headlined item this time around is smart machines, which, weirdly, moved backward since last year. (Has the Second Law of Thermodynamics been repealed without our hearing about it?)"

The post referenced article on Datanami is "'Smart Machines' Top the Hype Cycle, Gartner Says" here:

"And while Gartner talks about the importance of “deep neural networks” for big cognitive workloads, it apparently doesn’t think that “deep learning”—which is the core underlying technology that’s enabling much of the advances in this arena—is worth adding to its report. Or maybe the group just prefers to come up with its own names for things."

Oil & Gas: Digital Frontiers

Good friend Mr. Naveed Iftikhar sends along an article from McKinsey "The next frontier for digital technologies in oil and gas":

"Harnessing new technologies could boost efficiency—a mandate that’s especially important for oil and gas players globally."

The article states the obvious in layman terms. The oil and gas leadership that understands the imperatives discussed is already moving ahead. The ones who are tied up in cost cutting and "going back to the basics" have claims such as how can we even take the first step when the data is not organized and is in silos.

My company The RBR Group is currently engaged with the oil and gas leadership, which has chosen to quietly begin the leapfrog to machine learning, deep learning and cognitive computing.  The next few years are going to be interesting if the oil price fluctuates significantly in either direction.

Read the complete article here.

Following a recipe can lead to disaster

Do you believe if one receives an MBA in Entrepreneurism, one will become the most brilliant of entrepreneurs, and even better with the degree from a superior university?  Do you believe that breakthrough innovators can document a process that one can follow and be just that brilliant?

I believe "true entrepreneurs" have it in the genes (see my blog here); I believe leadership cannot be taught; both are born"with it".

Following is a short and an exceptional video from Mr. Jacques Pepin showing how a recipe, a formula, "is a point of departure" not the destination.  A simple yet powerful analogy.  Enjoy!

End of golf?

From a Bloomberg Magazine article "How Golf Got Stuck in the Rough":

"Today companies are relying less on glad-handing on the links, and many young people are cool to a pursuit viewed as time-intensive and elitist.  The result: Golf is suffering from an exodus of players, and courses are closing. The number of U.S. golfers has dropped 24 percent from its peak in 2002, to about 23 million players last year, according to Pellucid."

Golf is an unsustainable sport unless the golf course is in the tropics.  A cultural shift has occurred as well.

"Those sticking with the sport are playing fewer rounds.  U.S. golfers played a total of 462 million rounds last year, according to researcher Golf Datatech.  That was the fewest since 1995.  Says Morelli: "All the people under 35 are leaving the game.""

I believe golf is a sport that will significantly decrease in the next 10 to 15 years unless it rediscovers itself like Cricket has through shorter and faster games.

The Economist predicted oil crash

"As oil begins to pool in the Gulf, a gap has opened between the prices of LLS and Brent (see chart), even as LLS and WTI have moved into alignment. The discrepancy in prices between the middle of America and the East and West coasts will persist until someone works out a way to move the stuff around in greater quantities. But even if that happens, in a couple of years the whole country will have more light, sweet crude than it needs. If the oil continues to back up, prices will fall further compared with global markets, threatening production from high-cost shale beds and perhaps even smothering America’s resuscitation as an oil power."

From The Economist article "Spreading disarray" on Dec 14th, 2013 here.

HP's The Machine - Rethinking computer architecture

"“We have moved to what I call the Wall Streetization of technology,” says Shrijeet Mukherjee, the vice president for software engineering at Cumulus Networks, a maker of networking software. “It’s all about short-term gain.”"

From Bloomberg Magazine article "Can HP Build the Computer of the Future?" here.  I was reminded of the quote above.  The article ends a bit ominously:

"Mukherjee, who worked at SGI, says Web companies such as Google and Amazon have, in effect, achieved important advances for computer science with their high-efficiency data center software. They haven’t dedicated resources toward experimenting with radical advances in hardware. This is part of a generational shift, say Mukherjee and Fink, who both complain that few university students know how the guts of computers work. “There is a definite fear that we have stopped doing basic research around computer technology and that students are focused on much higher-level problems,” Mukherjee says. If HP’s hardware moonshot fails, he says he doubts a Facebook or Google will rise to take its place, but the R&D cash is there. “They certainly have the economic fortitude to make such a system,” he says. “It will require an individual who is willing to change the balance of things.”"

HP has designed its own grand challenge, to redefine the architecture of a computer.  See the HP The Machine website here.  I am following it closely.