Daily Archives: June 10, 2009

Seth Godin on Harvesting

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Seth’s Blog: Harvesting

The goal is to reach the point where there’s some harvesting going on. The first sales might cost you a hundred or thousand dollars each to make. At some point, though, you want sales to happen for free, people to show up with money. At some point, you want word of mouth to replace promotion and to earn back the money you invested up front.

That’s why it’s astonishing to me that people develop projects where harvesting is difficult or impossible. Here are some of the elements of a market where you are likely to reach the point where you can harvest the benefits of your investment:

* Word spreads. You want a market where stories of your success and reputation will reach other prospects.
* Needs are similar. You want a market where the skills you developed to help one person can also be used to help another person.
* Budgets exist. You want a market where there is more than one player with money to spend (on you) to solve a problem.
* Barriers exist. The market should reward insiders (like you) but make it really difficult for copycats to come in and steal share and lower prices.
* Price should rise with value delivered. As your work spreads and your reputation increases, you should be able to charge more, not less.

I think 90% of all markets don’t meet these standards, and given the choice, I’d avoid them.

Craiglist Foundation’s Bootcamp

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Craigslist Foundation’s 6th Annual Boot Camp – Eventbrite

Connect. Inspire. Act.

Imagine 1500 passionate people gathering together to change the world. That’s Boot Camp – a fun, intensive one day gathering where people learn how to bring their ideas for stronger communities into reality.

Boot Camp is for you if:

* You’d like to participate in all this new energy for community change and just don’t know where to start.
* You’d like to meet people who share your interests.
* You’re looking for new career options in this challenging economy.
* You work in the nonprofit sector and want to learn new skills and meet new people.
* You’re in business or government and you wonder how you can collaborate with others to strengthen your community.

At Boot Camp, you will learn how to take action in interactive workshops, meet people who can turn dreams into action, receive expert coaching, and get fired up by stories of successful community transformations.

Now only if something like this is possible in Adelaide!

Crikey on Fielding

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Last time I wrote about Senator Fielding’s tour to the US to listen to both sides of the debate on climate change.

Crikey suggests that climate change now is not about the science anymore but about mitigation and thinking of this like insurance.

I think that’s a fair call. However, how do we solve the issue if we do not understand the cause?

What is the mitigation strategy? Is it carbon taxes or building a better economy?

As Schelling suggests, the best mitigation strategy for poor countries is to become a developed economy.

So, what should Australia do?

Why Tax is better than ETS

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Climate change protest in Hunter Valley | National Breaking News | News.com.au

“The protesters are angry that heavily polluting industries, like aluminium smelting, will receive 90 per cent of their pollution permits free from the Federal Government … allowing them to carry on largely unaffected by pollution constraints,” Rising Tide spokesman Steve Phillips said.

This is the exact kind of problem that a ETS will create – corporate welfare.

As Mankiw puts it, the fundamental theorem of ETS

Cap-and-trade = Carbon tax + Corporate welfare.

What should Akash Ganga’s Strategy be?

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Akash Ganga is a company based in India which has developed a product to create clean drinking water from air. I blogged about the founder earlier .

Akash Ganga in Hindi translates to the “the perrenial river Ganga from the sky”. Very apt.

I admire the intention behind it and I think it is a great product innovation coming out of India. Now that they have launched a new website with their productI want to figure out their strategy.

Their website and news articles suggest that they are going for the home and office market as a fresh water solution. Is this the right strategy?

It will be interesting to check out the economics.

First, they provide a comparison with reverse osmosis. I think number 4 should be the other way round.

S. No
Criteria
RO
AME
1
Durability
Less, because with increasing use, the ground water TDS load on the RO plant increases, till the membranes break-down.
More, because it does not use ground water, but uses only air. Much longer life than RO plants.
2
Effectiveness in ensuring purity of water
Yes, but depends upon frequent changes of filter membranes. Over time its effectiveness declines.
Yes, and remains so for ever, because its effectiveness is independent of any component of the machine. Effectiveness never declines.
3
Effluent water
Yes, and effluent ratio keeps rising as ground water level is depleted
None at all
4
Short run costs per liter of potable water
Lower. Operating costs are lower as are capital costs
Higher on both counts.
5
Long run costs per liter of potable water
Possibly very high. In the long run (i.e. after 6 years) the RO plant might have to be abandoned due to excessive TDS in ground water leading to frequent collapse of membranes.
Very low, because atmospheric water quality is always very high and stable.
6
Environmental resource depletion
Certainly very high. RO often uses up nearly 2.5 liters of ground water to obtain 1.0 liter of potable water. High rate of depletion of ground water.
None at all. Generation of water vapor in the atmosphere is the only perennial source of water.
7
Microbial presence
Yes if membranes are inefficient; water might need UV treatment
Nil

This may not be the right comparison as they both have their uses. Also, most reverse osmosis plants function from sea water and not ground water.

The market for Akash Ganga is different and it works only under some specific circumstances in terms of high humidity, temparature and continous energy.

Their basic product – AS-650 – 40 liters/day – requires a relative humidity of 80% and temparature of 90 Faranheit consuming 750 watts of power per hour and takes 24hrs to produce 40 litres.

Let’s calculate the cost of running this product.

Appliance
 Watts x Hours per Day x Days per Year ÷ Convert to kWh KwH Per Litre kWh Rate = Cost per Litre
Akash Ganga 750 x 24 x 1 ÷ 1,000 40/18=2.22 Rs 5.5 = Rs. 12.2

It takes about 2.22kwH to generate 1 litre of water and costs about Rs12.2 a litre. Average cost of electricty comes from here .

If we add the capital cost and running costs, it may not be an economical alternative in a home.

Next, what about the right conditions for maximum efficiency. It works I think at 50% relative humidity too but provides the maximum output at 80%.

If we look at today’s map of India there are not many places where this product will provide the maximum efficiency.

(Source: Intellicast )

To really take this forward they need to predict the relative humidity in the various cities in India. A journal article like “Prediction of monthly-mean hourly relative humidity, ambient temperature, and wind velocity for India” could be a good start.

Then combined with temperature averages we can narrow down to a possible list of places.

For Bombay these are the following averages for decades.

Unit Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average temperature
over 21 years		 °F 80 75 77 80 84 86 84 82 82 82 84 80 78
Average high temperature
over 21 years		 °F 87 84 86 89 89 91 87 84 84 86 89 89 87
Average morning relative humidity
over 19 years		 % 82 75 73 79 84 81 84 88 89 91 86 75 73
Average evening relative humidity
over 18 years		 % 58 42 41 48 57 61 72 80 81 74 58 44 39

Add to this the availability of power. There is a 14% shortage of power in India in general due to subsidized power for farmers.

Once locations are filtered through this constraints then market scenarios need to be looked at.

Are homes the best place for this?

I think there needs to be a better strategy in place if this product needs to succeed.

Solar panel subsidy proves costly for Australia

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Garrett pulls plug on solar | theage.com.au

TENS of thousands of households will miss out on an $8000 solar panel rebate after the Rudd Government abruptly ended the program three weeks early.
[...]
From today the rebate will be replaced with a far less generous solar credits scheme that retailers say will typically net Victorian households about $4000 for a one-kilowatt system. This will be cut over time to about $800. A one-kilowatt system typically costs about $12,500.
[...]
Environment Minister Peter Garrett blamed the sudden move on a cost blow-out, from an original estimate of $150 million to $750 million a year, due to its unexpected popularity. Mr Garrett set aside a further $271 million in the May budget to fund the rebate scheme until June 30, but it is understood that money has been almost entirely consumed by 30,000 applications in the past month.

Subsidies are not a good thing from an economic point of view. The solar panel subsidy which was ending on June 30th was removed earlier due its high cost which clearly shows that there is a demand for solar power at a lower price point.

However, I think the real economies of scale lies not in small solar panels on houses but in the large solar farms especially using concentrated solar power. That is the area where $750 million should have been spent.