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

1. Punditry Invention 1 Vinod Khosla Khosla Ventures September 2009

2. “ All progress depends on the unreasonable man.” - George Bernard Shaw

3. “ A crisis is a terrible thing to waste.” - Paul Romer

4. reality check?

5. “ The telephone has too many shortcomings to be seriously considered as a means of communication.” - Western Union Internal Memo, 1876

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. “ Heavier-than-air flying machines are impossible.” - Lord Kelvin, President, Royal Society, 1895

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. 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. forecasting

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. 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. 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. 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. 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. Source: Foreign Policy, citing McKinsey Global Institute World Oil Supply Projections: 2006-2030?

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. 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. yesterday’s technology, tomorrow’s forecast 1980’s phone: year 2000 phone:

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. 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. 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. 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." - Spencer Silver on work that led to the unique adhesives for 3-M "Post-It" Notepads. Source: Wikipedia

25. “ extrapolation of the past” vs. “ inventing the future”

26. redefining swans

27. “ black swan” … rarity, extreme impact, and retrospective (though not prospective) predictability Source: Nassim Nicholas Taleb, author of “The Black Swan”

28. calera ... turning problem carbon dioxide into a feedstock.

29. kior “ a million year crude production cycle reduced to hours?”

30. transonic/ecomotors “ 50-100% more efficient engines cutting world oil consumption in half”

31. soraa “ 10X less electricity use for lighting”

32. battery black swan rumblings?

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. “ relevant scale ” solutions for ... oil ... coal ... materials ... (efficiency of oil & coal use)

35. “ ... relevant cost ” “ ... relevant scale ” “ ... relevant adoption ”

36. reality: electric cars

37. reality: $2,500 nano

38. reality: electric cars

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. 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. reason for optimism: 1922 2002 users radio cable Source: Morgan Stanley TV internet 50 million

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. 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. “ We will over-estimate the near term and underestimate the long term!”

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. three billion acres...

47. nega watt energy savings!

48. nega barrel energy efficiencies!

49. brian arthur’s evolution...

50. path to black swans... more shots on goal!

51. nine dots problem Source: Amory Lovins, RMI

52. standard nine dots solution Source: Amory Lovins, RMI

53. standard nine dots solution Source: Amory Lovins, RMI

54. better: use just three lines Source: Amory Lovins, RMI

55. mechanical engineer’s solution

56. geographer’s solution

57. wide line solution

58. … technology expands the ‘art of the possible.’ … today’s ‘unimaginable’ is tomorrow’s ‘conventional wisdom.’

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. 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; "Triumph of the Optimists: 101 Years of Global Investment Returns"

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. 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. “ no change bigotry” vs. “ environmental everything” vs. pragmentalists

64. to predict the future, invent it!

65. irrational ideas: “how to green” books

66. ... or get to work . vk@khoslaventures.com khoslaventures.com/resources.html

67. 65 Together, our products will improve the way all people live 65

68. 66 Calera Corporation Built on carbon negative cement 66

69. 67 Living Homes And prefabricated, environmentally friendly, cheaper, LEEDS homes 67

70. 68 Soladigm Using electrochromatic windows 68

71. 69 Amyris LS9 Gevo Kior Mascoma Range Fuels Coskata LanzaTech Fueled from renewable sources 69

72. 70 Ramu EcoMotors Transonic Firefly Seeo Sakti3 Nanostellar Tula Technologies With reduced fuel consumption and CO 2 emissions Hybradrive 70

73. 71 Topanga Lit by high intensity, low power discharge lighting 71

74. 72 Ausra Altarock Infinia Stion PVT Solar Using renewable electricity 72

75. 73 Great Point Energy Cooking with natural gas from clean coal & biomass 73

76. 74 Group IV Lumenz Reading with LED lighting Soraa 74

77. 75 Kaai Watching HD laser TV 75

78. 76 NanoH2O Drinking desalinated water 76

79. 77 Segetis Safely using biobased plastics and chemicals 77

80. 78 Draths Biobased materials for your home 78

81. 79 Pax Streamline Staying comfortable with more efficient air conditioning 79

82. 80 Change every aspect of daily living 80