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Like many, I listen to podcasts on my commute to and from work.  Yesterday, I came across this podcast from Greentech Media featuring Shayle Kann, SVP of Research and Strategy at Energy Impact Partners.  Shayle had written an article about the future of energy and tied it to the life events of his colleague’s soon-to-be daughter which is due at the end of the year.

The podcast and article are worth your time – and not just for those interested in the future of energy.  Given that we just had a newborn, I thought it would be fun to duplicate the exercise using my son Ian and my thoughts on the “bets” Shayle puts forward.

Bet #1: Ian will control machines with his voice more than with his keyboard.  My answer: False*

My answer comes with a caveat, what’s the timeline?  In the podcast, Shayle discusses the growth in AI-enabled voice assistants over the last 3 years.  While the number of devices being sold is impressive, voice still has a real user-engagement problem.  These devices are primarily used for timers, audio, weather, and news.  I also think voice has a UX issue that most aren’t talking about, it’s hard to remember what all a device can do (your phone has apps you see every day and do not use).  Until voice-enabled devices do almost everything, I think the path to engagement will remain tough.

Bet #2: Ian will never personally drive a car. My answer: False

While there are several converging technologies and business model innovations in the automobile space, I believe purely out of curiosity Ian will drive a car at some point in his life.  AV’s, ride-sharing, and scooters are all disrupting the way we think about transportation, but pure curiosity gets the best of all of us.

Bet #3: By the time Ian buys his first home, especially if he’s in an urban environment, his surroundings will be transformed. My answer: True

A few of the major trends already impacting cities: WeWork, AirBnB, and EV’s.  Up next: drones (robotics), repurposed parking lots, and vertical farming.

Bet #4: By the time Ian shops for his own groceries, >20% of his produce will be grown indoors, up from virtually none today.  My answer: True

Given the current population growth, the impact farming has on climate change, and vice versa this is a given.  We’ll need more food and the way we grow it today isn’t sustainable for the three major reasons listed.  We need more food, it impacts our climate to grow it, and our climate is changing the way we will have to grow it.

Bet #5: Let’s turn to Ian’s house. I bet that in Ian’s first home of his own, more than half of his electricity load will dynamically respond to grid or price signals. My answer: True

I loved Shayle’s answer here because it was concise and spot on.  Control HVAC plus 1 or 2 additional devices and this goal is achieved.  It must happen in the background, consumers don’t know nor care what the impact could be.

Bet #6: By the time Ian reaches 30 (in the year 2048), electricity’s market share of final energy consumption will more than double. My answer: True

Another fairly simple answer, EV’s should change the demand significantly especially if they hit long-haul trucking in the near future.  The industrial applications of storage and efficiency should also play a large role in increasing electricity’s market-share.

Bet #7: More than 50% of Ian’s electricity, as represented by the national breakdown, will come from renewables by the time he’s a sophomore in high school.  My answer: False

It will be close, but I say we fall just short of this goal primarily due to the availability of natural gas.

Bet #8: Ian will live over 200 years, and for most of his life, electricity will be his only food.  My answer: False

So many ethical questions here, though companies are working on products that allow them to download your loved ones’ text (email, text messaging, social media) then build bots that mimic the physical manifestation of them.  Kann makes a compelling case by listing the major inventions of the last 85 years, but the regulatory and ethical hurdles might defeat this one.

There you have it, my take Ian’s future as it pertains to energy and innovation.  Thank you Shayle for writing this piece, it was a neat way to think about the future and possibly gives Ian something to look back on while having a laugh at his old man’s expense.

Recently, Jonathan coined the phrase “the drag of orthodoxy” as it relates to regulated industries and their inability to quickly adopt new technologies even when they provide the best use cases.  Often, this is due to both the inability to implement new technology (easier to solve) and the opportunity costs of losing trust (harder to solve).

Digital adoption in these industries requires buy-in from traditional institutional mechanisms and an evolution of norms as well as consumer trust.

Unquestionably, the push of consumer expectations will continue to combine with digital forces to propel these industries past their legacy infrastructures and into a new age of innovation and growth.

Bitcoin could very well be the inflection point that is needed for mass adoption of blockchain technology in regulated industries and launches them into a new era.

We’ve been here before with less revolutionary technologies.  Marketplaces, enabled by wide-spread adoption of the internet have been around for over 25 years.

However, industries such as insurance and energy are just now beginning to leverage technologies like API’s to offer consumers the chance to compare plans just as they have flights for years.

The adoption cycle also applies to business model innovation. Uber and Airbnb offer on-demand services to better match supply and demand of goods.  It may not seem like it, but those companies are over 10 years old.

Just recently, we’ve seen startups like Honor and Trov apply the same concepts to elderly care and property insurance respectively.

The important thing to note is that just like consumer adoption of technology is rapidly increasing, the same thing is occurring in institutionalized industries.

Where can we go from here with blockchain in regulated industries?

Electricity transactions are still tracked almost exclusively in Excel before being submitted into databases that rarely are connected.  This system adds millions in additional transaction costs and makes full transparency between market actors almost impossible.

If smart meters and API’s wrote these transactions into a decentralized ledger, the errors would be eliminated almost immediately and new entrants (i.e. consumers with excess power capacity due to solar panels) would be encouraged to enter the market.

Healthcare provides maybe the most obvious applications of blockchain technology.  Patient information, research data, and prescription purchases all require privacy, security, and have rigorous standards for quality.

In finance, the unbundling of the job will require new platforms for the reintegration of common services like payroll, insurance, and financial planning.  Blockchain technology provides the perfect solution for transaction and ID verification.

The rise of Bitcoin and other cryptocurrencies has started a conversation centered mostly around their skyrocketing prices.  Yet, what is most exciting for me are the potential use cases that will come as the masses become more comfortable with the underlying technology and its ability to improve the industries that most affect their everyday lives.

Jonathan and I are at the CBI Insights Innovation Summit in Santa Barbara this week. Below are a few quick takeaways from yesterday’s panels and discussions.  Enjoy.

  1. As can be expected, voice and text will be the biggest winners at the intersection of UI and AI over the next few years.  People can now interact with devices without knowing how to read and write. For developed nations, this means that toddlers now interact with computers for the first time by voice instead of touch.  However, the implications for the developing world are even greater. Since illiteracy will no longer be a limiting factor to bringing people online 2B additional people will have the chance to connect to the rest of the world.After the Q4 and CES success surrounding Echo and Alexa it’s pretty clear that Amazon is leading the way in voice. Yet, Google and Apple still have one big competitive advantage, an OS in your pocket.  Consumers generally want to interact with one OS across multiple devices so this hurdle is likely to be key for Amazon.The industries that will be impacted range from retail to content / media to healthcare.  The order of implementation is likely to go from low risk to high risk.  As Jeremy Liew of Lightspeed Ventures said, “health won’t be the first real domain, rather a something like shopping where no one dies if it goes wrong.”
  2. The IPO and M&A climate is changing.  Just as early as a few years ago, growth at any cost was the standard way to IPO  Now, companies are taking a growth at some reasonable cost approach. I wrote last week that non-tech firms entering the startup M&A fray is likely to put a focus on sustainable business models and the IPO market looks to be following suit.  Scott Kupor of a16z believes “companies with 30% annual growth and near-term profitability are likely to have good IPO prospects”
  3. Chamath Palihapitiya of Social Capital was his usual quotable self and several of his insights will be long-lasting in my mind.  Among them:More big companies should partner with VC firms. Combining their balance sheet with access to talent is a game changer. These large, incumbent companies should share the risk with talented startups instead of defining exactly what they do. This mindset prevents them from building big, meaningful businesses. FinTech is a great industry for incumbents to do this. because by definition there must be an ecosystem for consumer interactions.Working around regulatory is immature, Silicon Valley should being working with regulation.  Regulatory standards keep consumer trust in industries like finance, utilities and health where this is paramount.  This trust often leads to more users which leads to more revenue.  In addition to these benefits, regulation helps companies build a sustainable moat and weeds out those who don’t have the courage to run the gauntlet of starting a business.
  4. With the copious amounts of data coming online the way we think and work with data is changing rapidly.  Among the challenges businesses will face; cleaning data that comes from multiple collection points (IIoT, energy) and consumer privacy.AirBnB’s Chief Economist Peter Coles elaborated on both challenges on the panel focusing on big data.  AirBnB wanted to work within the regulatory frameworks of major cities as they expanded their footprint but in order to do so needed to share data with those cities without compromising customer privacy.  The solution: aggregating data in order for these cities to spot trends without violating user trust. Sometimes solutions are beautiful for their simplicity.The other insight Peter provided was on measuring data.  Most of us default to one off queries on our database to solve the problem of now.  Instead, AirBnB has taken the time to create “core metrics” in order to eliminate one-off problem solving.  This is something I know I have done in the past and am betting most of you have too.

There were several more great insights from panelists and presentations from amazing companies like SigOpt and Affective.  The future is filled with talented people solving massive problems.  I’m looking forward to another productive day focused on big industries like auto and insurance.

Recently on the “This Week in Startups” podcast Silicon Valley investor and CEO of Vayner Media, Gary Vaynerchuk was the featured guest and one of his insights added a unique dimension to the way I think about product development.  Gary asserted that all great products are actually in the time business; meaning they all give us back a resource of which we have a finite amount.

The specific example he used was Uber.  He explained that Uber is not selling car rides but instead focused on getting people where they need to go quicker and we are even willing to pay a surcharge to preserve our time.  Another example was Amazon which is the master of this technique dating back to the development of one-click ordering to one-hour delivery to the most recent Amazon Dash.

As I thought about ways this might apply to the industries in which I am particularly interested I turned my attention to the concept of the “smart” home. Over the last 5 years several companies have emerged as leaders in this field and all are marketing themselves with different value propositions but the one thing they are all offering their consumer is: more time.

Nest is far and away the most recognized product in this category and its primary marketing message is that it “pays for itself.”  I would certainly advocate that all homes should have a smart thermostat for efficiency reasons but the main feature of Nest is its ability to learn user occupancy habits.  While we may not spend more than 1-2 min a day setting our thermostat this time adds up over the course of a year to about 12 hours.  The future of these occupancy sensors have enormous potential.  Imagine 10 years from now if deliveries, home repairs, etc… are scheduled automatically based on when you are home according to the sensor in your thermostat or light bulbs.

Speaking of light bulbs, what Nest did for the thermostat several companies are attempting to do for the light bulb.   There is no clear winner in this space as of yet, but Phillips Hue, WeMo, Lifx, and Stack are all vying for poll position.  Again, all of these companies have different value propositions for the consumer but all are selling time savings in the form of not worrying about flipping a light switch, forgetting rather or not you turned off the lights, or in the case of Stack helping you rest better and wake up in a way that helps us be more productive with the limited time we have during the day.

These products combined with smart meter data being rolled out in some states present an exciting future where homeowners can make informed decisions about big purchases.  For instance, thermostat, light, and smart meter data could be used to let homeowners know which appliances they should upgrade, if they should install a rooftop solar system or new more efficient windows. Once a decision has been reached, the project would be scheduled automatically from the sensors placed in the thermostat or light bulbs.  This kind of possibility explains why so many companies from different industries (AT&T, Direct Energy, Comcast, and NRG) are vying to “own” the home.

While our society can sometimes seem “anti-technology” as evidenced by books and movies focused on dystopia via innovation the smart home presents an opportunity for us to live our lives more efficiently in terms of both time and money.