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Punditry    Invention 1 Vinod Khosla Khosla Ventures September 2009
“ All progress depends on the unreasonable man.” - George Bernard Shaw
“ A crisis is a terrible thing to waste.” - Paul Romer
reality check?
“ The telephone has too many shortcomings to be seriously considered as a means of communication.” - Western Union Interna...
“ There is no reason for any individuals to have a computer in their home.” - Ken Olsen, President, Chairman and Founder o...
“ Heavier-than-air flying machines are impossible.” - Lord Kelvin, President, Royal Society, 1895
“ A rocket will never be able to leave the Earth’s atmosphere.”  NY Times, 1936 Source: http://listverse.com/2007/10/28/to...
Extrapolating the past…  1949: “Where a calculator like the ENIAC today is equipped with 18,000 vacuum tubes and weighs 30...
forecasting
“ It is the mark of an educated person to look for precision only as far as the nature of the subject allows.” - Aristotle
oil price forecasts  (1985-2005) Forecast Actual $51 $15 1985 1990 1995 2000 5 year forecast error 10 year forecast error ...
Data/Source: Natural Gas Wellhead Prices (current $ /1000cf) - EIA Office of Integration Analysis and Forecasting  Forecas...
Data/Source: Natural Gas Wellhead Prices (current $ /1000cf) - EIA Office of Integration Analysis and Forecasting  Forecas...
2005 Source: EIA, data for Imported Low-Sulfur Light Crude Oil (2006-2009), 2005 forecast is “world oil price” EIA Oil Pri...
Source: Foreign Policy, citing McKinsey Global Institute World Oil Supply Projections: 2006-2030?
telecommunications: actual vs. forecast demand   1,000 GB/s 1 GB/s 1995 projection 1987 projection 1983 projection 1980 pr...
Mckinsey : US mobile subscribers Source: American Heritage Magazine -  http://www.americanheritage.com/articles/magazine/i...
yesterday’s technology, tomorrow’s forecast 1980’s phone: year 2000 phone:
quantitative modeling  flaws <ul><li>models with given inputs are precise but inaccurate </li></ul><ul><ul><li>low “standa...
the folly of predictions:  tetlock study hundred’s of experts. 80,000+ “expert” forecasts & 20+ years Results: Experts are...
more? …  specialists are not significantly more reliable than non-specialists in guessing what is going to happen in the r...
why? Source: http://www.newyorker.com/archive/2005/12/05/051205crbo_books1 “… .  experts were much tougher in assessing th...
The losing mentality…  “ If I had thought about it, I wouldn't have done the experiment. The literature was full of exampl...
“ extrapolation of the past” vs. “ inventing the future”
redefining swans
“ black swan” … rarity, extreme impact, and retrospective (though not prospective) predictability Source: Nassim Nicholas ...
calera ... turning problem carbon dioxide into a feedstock.
kior “ a million year crude production cycle reduced to hours?”
transonic/ecomotors “ 50-100% more efficient engines cutting world oil consumption in half”
soraa “ 10X less electricity use for lighting”
battery black swan rumblings?
moore’s law:  not a new paradigm! electromechanical relay vacuum tube transistor integrated circuit (moore’s law!) $1,000 ...
“ relevant scale ” solutions for ... oil ... coal ... materials ... (efficiency of oil & coal use)
“ ... relevant cost ” “ ... relevant scale ” “ ... relevant adoption ”
reality: electric cars
reality: $2,500 nano
reality: electric cars
reality: electric cars …  and yet I am optimistic! Source: The Economist over next 40 years, car fleet =  3 billion cars  ...
as surely as... 1985:   NOT  a PC in every home 1990:  NO   email for grandma 1995:  NOT   the internet 2000:  NO   pervas...
reason for optimism: 1922 2002 users radio cable Source: Morgan Stanley TV internet 50 million
“… every strategic inflection point [is] characterized by a ‘10X’ change …” “ There’s wind and then there is a typhoon, th...
exponential innovation…  2010 2040 assuming ~2% rate of change…  = X units  1926 = X units  to predict 2040 in 2010, we wo...
“ We will over-estimate the near term and underestimate the long term!”
land is not (remotely) a constraint 3000 km Source: Gerhard Knies, CSP 2008 Barcelona world electricity demand  (18,000 TW...
three billion acres...
nega watt energy savings!
nega barrel energy efficiencies!
brian arthur’s evolution...
path to black swans... more shots on goal!
nine dots problem Source: Amory Lovins, RMI
standard nine dots solution Source: Amory Lovins, RMI
standard nine dots solution Source: Amory Lovins, RMI
better: use just three lines Source: Amory Lovins, RMI
mechanical engineer’s solution
geographer’s solution
wide line solution
… technology expands the ‘art of the possible.’ … today’s ‘unimaginable’ is tomorrow’s ‘conventional wisdom.’
we can’t predict what will happen “ Nobody knew early in 1921 where radio was really headed. Everything about broadcasting...
200 years of technology speculation 1785 1995 10,000  semilog scale railroads railroads telephone, electric lights broadca...
Dotcom bubble…  Terabytes Morgan Stanley High Technology Index Source: Andrew Odlyzko  (University of Minnesota – Digital ...
new technology has a history... “ In 1885, Yale students who were getting ‘more light than they relished’ chopped down an ...
“ no change bigotry” vs. “ environmental everything” vs. pragmentalists
to predict the future, invent it!
irrational ideas:  “how to green” books
... or get to  work . vk@khoslaventures.com khoslaventures.com/resources.html
65 Together, our products will improve the way all people live 65
66 Calera Corporation Built on carbon negative cement 66
67 Living Homes And prefabricated, environmentally friendly, cheaper, LEEDS homes 67
68 Soladigm Using electrochromatic  windows 68
69 Amyris LS9 Gevo Kior Mascoma Range Fuels Coskata LanzaTech Fueled from renewable sources 69
70 Ramu EcoMotors Transonic Firefly Seeo Sakti3 Nanostellar Tula Technologies With reduced fuel consumption and CO 2  emis...
71 Topanga Lit by high intensity, low power discharge lighting 71
72 Ausra Altarock Infinia Stion PVT Solar Using renewable electricity 72
73 Great Point Energy Cooking with natural gas from clean coal & biomass 73
74 Group IV Lumenz Reading with LED lighting Soraa 74
75 Kaai Watching HD laser TV 75
76 NanoH2O Drinking desalinated water 76
77 Segetis Safely using biobased plastics and chemicals 77
78 Draths Biobased materials for your home 78
79 Pax Streamline Staying comfortable with more efficient air conditioning 79
80 Change every aspect of daily living 80
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Punditry/Invention by Vinod Khosla

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Punditry/invention, by Vinod Khosla, Khosla Ventures, sep. 2009. (Cleantech/Maintech)

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Punditry/Invention by Vinod Khosla

  1. 1. Punditry Invention 1 Vinod Khosla Khosla Ventures September 2009
  2. 2. “ All progress depends on the unreasonable man.” - George Bernard Shaw
  3. 3. “ A crisis is a terrible thing to waste.” - Paul Romer
  4. 4. reality check?
  5. 5. “ The telephone has too many shortcomings to be seriously considered as a means of communication.” - Western Union Internal Memo, 1876
  6. 6. “ There is no reason for any individuals to have a computer in their home.” - Ken Olsen, President, Chairman and Founder of DEC, 1977
  7. 7. “ Heavier-than-air flying machines are impossible.” - Lord Kelvin, President, Royal Society, 1895
  8. 8. “ A rocket will never be able to leave the Earth’s atmosphere.” NY Times, 1936 Source: http://listverse.com/2007/10/28/top-30-failed-technology-predictions/ The reality… The V-2, in 1942, Sputnik in 1957, and many more… Extrapolating the past…
  9. 9. Extrapolating the past… 1949: “Where a calculator like the ENIAC today is equipped with 18,000 vacuum tubes and weighs 30 tons, computers in the future may have only 1,000 vacuum tubes and perhaps weigh only 1½ tons.” Source: Popular Mechanics, Wikipedia The reality…
  10. 10. forecasting
  11. 11. “ It is the mark of an educated person to look for precision only as far as the nature of the subject allows.” - Aristotle
  12. 12. oil price forecasts (1985-2005) Forecast Actual $51 $15 1985 1990 1995 2000 5 year forecast error 10 year forecast error Data/Source: World Oil Prices Barrel) (current $ / - EIA Office of Integration Analysis and Forecasting
  13. 13. Data/Source: Natural Gas Wellhead Prices (current $ /1000cf) - EIA Office of Integration Analysis and Forecasting Forecast Actual gas price forecasts (1985-2005) $8.00 $1.00 1985 1990 1995 2000 5 year forecast error 10 year forecast error
  14. 14. Data/Source: Natural Gas Wellhead Prices (current $ /1000cf) - EIA Office of Integration Analysis and Forecasting Forecast Actual gas price forecasts (1985-2005) $8.00 $1.00 1985 1990 1995 2000 5 year forecast error 10 year forecast error
  15. 15. 2005 Source: EIA, data for Imported Low-Sulfur Light Crude Oil (2006-2009), 2005 forecast is “world oil price” EIA Oil Price Forecasts: 2005 through 2009 2030 2005 forecast 2006 forecast 2007 forecast 2008 forecast 2009 forecast Colored arrows represent price range for previous year The same regression repeated year after year!
  16. 16. Source: Foreign Policy, citing McKinsey Global Institute World Oil Supply Projections: 2006-2030?
  17. 17. telecommunications: actual vs. forecast demand 1,000 GB/s 1 GB/s 1995 projection 1987 projection 1983 projection 1980 projection 1978 projection Source: internal forecasts for major telecommunications company
  18. 18. Mckinsey : US mobile subscribers Source: American Heritage Magazine - http://www.americanheritage.com/articles/magazine/it/2007/3/2007_3_8.shtml forecast actual 1980 forecast for 2000
  19. 19. yesterday’s technology, tomorrow’s forecast 1980’s phone: year 2000 phone:
  20. 20. quantitative modeling flaws <ul><li>models with given inputs are precise but inaccurate </li></ul><ul><ul><li>low “standard deviation”, but with high “standard error” </li></ul></ul><ul><ul><li>input the measurable, ignore the immeasurable </li></ul></ul><ul><ul><li>obscured embedded assumptions </li></ul></ul>
  21. 21. the folly of predictions: tetlock study hundred’s of experts. 80,000+ “expert” forecasts & 20+ years Results: Experts are poorer forecasters than dart-throwing monkeys Source: http://www.newyorker.com/archive/2005/12/05/051205crbo_books1
  22. 22. more? … specialists are not significantly more reliable than non-specialists in guessing what is going to happen in the region they study… Source: http://www.newyorker.com/archive/2005/12/05/051205crbo_books1
  23. 23. why? Source: http://www.newyorker.com/archive/2005/12/05/051205crbo_books1 “… . experts were much tougher in assessing the validity of information that undercut their theory than they were in crediting information that supported it.” - Tetlock
  24. 24. The losing mentality… “ If I had thought about it, I wouldn't have done the experiment. The literature was full of examples that said you can't do this.&quot; - Spencer Silver on work that led to the unique adhesives for 3-M &quot;Post-It&quot; Notepads. Source: Wikipedia
  25. 25. “ extrapolation of the past” vs. “ inventing the future”
  26. 26. redefining swans
  27. 27. “ black swan” … rarity, extreme impact, and retrospective (though not prospective) predictability Source: Nassim Nicholas Taleb, author of “The Black Swan”
  28. 28. calera ... turning problem carbon dioxide into a feedstock.
  29. 29. kior “ a million year crude production cycle reduced to hours?”
  30. 30. transonic/ecomotors “ 50-100% more efficient engines cutting world oil consumption in half”
  31. 31. soraa “ 10X less electricity use for lighting”
  32. 32. battery black swan rumblings?
  33. 33. moore’s law: not a new paradigm! electromechanical relay vacuum tube transistor integrated circuit (moore’s law!) $1,000 of computing buys exponential scale Each time one paradigm runs out of steam, another picks up the pace!
  34. 34. “ relevant scale ” solutions for ... oil ... coal ... materials ... (efficiency of oil & coal use)
  35. 35. “ ... relevant cost ” “ ... relevant scale ” “ ... relevant adoption ”
  36. 36. reality: electric cars
  37. 37. reality: $2,500 nano
  38. 38. reality: electric cars
  39. 39. reality: electric cars … and yet I am optimistic! Source: The Economist over next 40 years, car fleet = 3 billion cars … China (2050) = total worldwide fleet today … India (2050) = 50X current Indian fleet
  40. 40. as surely as... 1985: NOT a PC in every home 1990: NO email for grandma 1995: NOT the internet 2000: NO pervasive mobile 2005: NO financial implosion 2010+: reason for optimism
  41. 41. reason for optimism: 1922 2002 users radio cable Source: Morgan Stanley TV internet 50 million
  42. 42. “… every strategic inflection point [is] characterized by a ‘10X’ change …” “ There’s wind and then there is a typhoon, there are waves and then there’s a tsunami” - Andy Grove
  43. 43. exponential innovation… 2010 2040 assuming ~2% rate of change… = X units 1926 = X units to predict 2040 in 2010, we would need to predict 2010 in 1926!
  44. 44. “ We will over-estimate the near term and underestimate the long term!”
  45. 45. land is not (remotely) a constraint 3000 km Source: Gerhard Knies, CSP 2008 Barcelona world electricity demand (18,000 TWh/y) can be produced from 300 x 300 km² =0.23% of all deserts distributed over “10 000” sites
  46. 46. three billion acres...
  47. 47. nega watt energy savings!
  48. 48. nega barrel energy efficiencies!
  49. 49. brian arthur’s evolution...
  50. 50. path to black swans... more shots on goal!
  51. 51. nine dots problem Source: Amory Lovins, RMI
  52. 52. standard nine dots solution Source: Amory Lovins, RMI
  53. 53. standard nine dots solution Source: Amory Lovins, RMI
  54. 54. better: use just three lines Source: Amory Lovins, RMI
  55. 55. mechanical engineer’s solution
  56. 56. geographer’s solution
  57. 57. wide line solution
  58. 58. … technology expands the ‘art of the possible.’ … today’s ‘unimaginable’ is tomorrow’s ‘conventional wisdom.’
  59. 59. we can’t predict what will happen “ Nobody knew early in 1921 where radio was really headed. Everything about broadcasting was uncertain. For my own part I expected that since it was a form of telephony, and since we were in the business of furnishing wires for telephony, we were sure to be involved in broadcasting somehow.” - Walter Gifford, future President of AT&T, 1921
  60. 60. 200 years of technology speculation 1785 1995 10,000 semilog scale railroads railroads telephone, electric lights broadcasting computers internet “ Triumph of the Optimists: 101 Years of Global Investment returns” Source: Elliot Wave International; &quot;Triumph of the Optimists: 101 Years of Global Investment Returns&quot;
  61. 61. Dotcom bubble… Terabytes Morgan Stanley High Technology Index Source: Andrew Odlyzko (University of Minnesota – Digital Technology Center) Morgan Stanley Technology Index from Yahoo Finance
  62. 62. new technology has a history... “ In 1885, Yale students who were getting ‘more light than they relished’ chopped down an electric pole erected at the corner of the campus…” 7,000,000 90 93 95 99 Source: When Old Technologies Were New Connections in London
  63. 63. “ no change bigotry” vs. “ environmental everything” vs. pragmentalists
  64. 64. to predict the future, invent it!
  65. 65. irrational ideas: “how to green” books
  66. 66. ... or get to work . vk@khoslaventures.com khoslaventures.com/resources.html
  67. 67. 65 Together, our products will improve the way all people live 65
  68. 68. 66 Calera Corporation Built on carbon negative cement 66
  69. 69. 67 Living Homes And prefabricated, environmentally friendly, cheaper, LEEDS homes 67
  70. 70. 68 Soladigm Using electrochromatic windows 68
  71. 71. 69 Amyris LS9 Gevo Kior Mascoma Range Fuels Coskata LanzaTech Fueled from renewable sources 69
  72. 72. 70 Ramu EcoMotors Transonic Firefly Seeo Sakti3 Nanostellar Tula Technologies With reduced fuel consumption and CO 2 emissions Hybradrive 70
  73. 73. 71 Topanga Lit by high intensity, low power discharge lighting 71
  74. 74. 72 Ausra Altarock Infinia Stion PVT Solar Using renewable electricity 72
  75. 75. 73 Great Point Energy Cooking with natural gas from clean coal & biomass 73
  76. 76. 74 Group IV Lumenz Reading with LED lighting Soraa 74
  77. 77. 75 Kaai Watching HD laser TV 75
  78. 78. 76 NanoH2O Drinking desalinated water 76
  79. 79. 77 Segetis Safely using biobased plastics and chemicals 77
  80. 80. 78 Draths Biobased materials for your home 78
  81. 81. 79 Pax Streamline Staying comfortable with more efficient air conditioning 79
  82. 82. 80 Change every aspect of daily living 80

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