Punditry - Khosla Ventures by pengxiang

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									Punditry

           Invention


                          Vinod Khosla
                       Khosla Ventures
                                 1
                       September 2009
“All progress depends on the
     unreasonable man.”
                    - George Bernard Shaw




                                            2
“A crisis is a terrible thing to
            waste.”
                           - Paul Romer




                                          3
reality check?

                 4
   “The telephone has too
 many shortcomings to be
 seriously considered as a
means of communication.”
           - Western Union Internal Memo, 1876
                                                 5
“There is no reason for any
      individuals to have a
  computer in their home.”
   - Ken Olsen, President, Chairman and Founder of DEC, 1977
                                                               6
“Heavier-than-air flying
         machines are
           impossible.”
     - Lord Kelvin, President, Royal Society, 1895
                                                     7
     Extrapolating the past…
               “A rocket will never be able to leave the Earth’s atmosphere.”
                           NY Times, 1936




                                             The reality…
                                                          The V-2, in 1942, Sputnik in 1957, and many more…



                                                                                                              8
Source: http://listverse.com/2007/10/28/top-30-failed-technology-predictions/
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.”




      The reality…


                                                                                                9
                                                         Source: Popular Mechanics, Wikipedia
forecasting

              10
“It is the mark of an educated person
     to look for precision only as far as
      the nature of the subject allows.”
                                  - Aristotle
                                                11
      oil price forecasts (1985-2005)

                                                        $51




                                                                                                                                5 year
                                                                                                                               forecast
                                                                                                                                 error
                                                                         Forecast
                                                                                                                                10 year
                                                                                                                               forecast
                                                                                                                                 error



                                                                           Actual




                                                        $15
                                                                          1985                            1990   1995   2000




                                                                                                                                          12
Data/Source: World Oil Prices Barrel) (current $ / - EIA Office of Integration Analysis and Forecasting
    gas price forecasts (1985-2005)

                                                   $8.00




                                                                                                                                          5 year
                                                                                                                                         forecast
                                                                                                                                           error


                                                                                                                                          10 year
                                                                     Forecast
                                                                                                                                         forecast
                                                                                                                                           error




                                                                       Actual



                                                   $1.00
                                                                          1985                                      1990   1995   2000




                                                                                                                                                    13
Data/Source: Natural Gas Wellhead Prices (current $ /1000cf) - EIA Office of Integration Analysis and Forecasting
    gas price forecasts (1985-2005)

                                                   $8.00




                                                                                                                                          5 year
                                                                                                                                         forecast
                                                                                                                                           error


                                                                                                                                          10 year
                                                                     Forecast
                                                                                                                                         forecast
                                                                                                                                           error




                                                                       Actual



                                                   $1.00
                                                                          1985                                      1990   1995   2000




                                                                                                                                                    14
Data/Source: Natural Gas Wellhead Prices (current $ /1000cf) - EIA Office of Integration Analysis and Forecasting
                               EIA Oil Price Forecasts: 2005 through 2009




                                                                                                                           2009 forecast




                                                                 The same regression
                                                               repeated year after year!
                                                                                                                          2008 forecast
                                                                                                                               2007 forecast

                                                                                                                          2006 forecast




                                                               Colored arrows represent price range for previous year
                                                                                                                          2005 forecast

                                               2005                                                                     2030




                                                                                                                                               15
Source: EIA, data for Imported Low-Sulfur Light Crude Oil (2006-2009), 2005 forecast is “world oil price”
                                          World Oil Supply Projections: 2006-2030?




                                                                                     16
Source: Foreign Policy, citing McKinsey Global Institute
                                         telecommunications: actual vs. forecast demand



                                                                  1,000 GB/s




                                                                                                        1995 projection



                                                                                             1987 projection

                                                                                      1983 projection


                                                                                  1980 projection




                                                                               1978 projection




                                                                   1 GB/s




                                                                                                                          17
Source: internal forecasts for major telecommunications company
                                                             Mckinsey : US mobile subscribers
                                                                                                 1980 forecast for 2000




                                                                     forecast                                             actual




                                                                                                                                   18
Source: American Heritage Magazine - http://www.americanheritage.com/articles/magazine/it/2007/3/2007_3_8.shtml
yesterday’s technology, tomorrow’s forecast




   1980’s phone:              year 2000 phone:




                                                 19
quantitative modeling flaws


  models with given inputs are precise but inaccurate


    • low “standard deviation”, but with high “standard error”

    • input the measurable, ignore the immeasurable

    • obscured embedded assumptions




                                                                 20
                  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




                                                                                                                  21
Source: http://www.newyorker.com/archive/2005/12/05/051205crbo_books1
     more?


                 … specialists are not significantly
                     more reliable than non-
                  specialists in guessing what is
                  going to happen in the region
                           they study…


                                                                        22
Source: http://www.newyorker.com/archive/2005/12/05/051205crbo_books1
        why?


                      “…. experts were much tougher in
                   assessing the validity of information that
                    undercut their theory than they were in
                    crediting information that supported it.”
                                                                        - Tetlock




                                                                                    23
Source: http://www.newyorker.com/archive/2005/12/05/051205crbo_books1
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
“extrapolation of the past”

            vs.

  “inventing the future”

                              25
redefining swans




                   26
              “black swan”
                                                                 …rarity, extreme
                                                                      impact, and
                                                            retrospective (though
                                                                 not prospective)
                                                                     predictability



                                                                                      27
Source: Nassim Nicholas Taleb, author of “The Black Swan”
calera



... turning problem carbon dioxide into a feedstock.




                                                       28
kior



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




                                                    29
transonic/ecomotors



 “50-100% more efficient engines cutting world oil
               consumption in half”




                                                     30
soraa



    “10X less electricity use for lighting”




                                              31
battery black swan rumblings?




                                32
moore’s law: not a new paradigm!

   $1,000 of computing buys
   exponential scale




                   electromechanical   relay   vacuum   transistor   integrated circuit
                                                 tube                  (moore’s law!)




   Each time one paradigm runs out of steam, another picks up the pace!
                                                                                          33
“relevant scale” solutions for




                                         ... oil
                                       ... coal
                                 ... materials
             ... (efficiency of oil & coal use)
                                                   34
  “...relevant cost”

 “...relevant scale”

“...relevant adoption”

                         35
reality: electric cars




                         36
reality: $2,500 nano




                       37
reality: electric cars




                         38
                         38
     reality: electric cars

                        over next 40 years, car fleet = 3 billion cars

                        … China (2050) = total worldwide fleet today
                        … India (2050) = 50X current Indian fleet




                                                                   … and yet I am optimistic!




                                                                                                39
Source: The Economist
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

                                                   40
     reason for optimism:

                             users



                                            radio
                                            TV


                                            cable

                                            internet
                     50 million




                                     1922   2002




                                                       41
Source: Morgan Stanley
“…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
                                         42
exponential innovation…
assuming ~2% rate of change…




                                                        = X units




        to predict 2040 in 2010, we would need to predict 2010 in 1926!



                                                                 = X units




 1926                                                   2010                 2040
                                                                                    43
“We will over-estimate
  the near term and
 underestimate the
      long term!”

                         44
land is not (remotely) a constraint


                                                3000 km




                                                           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




                                                                                            45
    Source: Gerhard Knies, CSP 2008 Barcelona
three billion
  acres...

                46
negawatt energy savings!




                           47
negabarrel energy efficiencies!




                                  48
brian arthur’s evolution...




                              49
path to black swans...

more shots on goal!


                         50
     nine dots problem




                            51
Source: Amory Lovins, RMI
  standard nine dots solution




                                52
Source: Amory Lovins, RMI
 standard nine dots solution




                               53
Source: Amory Lovins, RMI
 better: use just three lines




                                54
Source: Amory Lovins, RMI
mechanical engineer’s solution




                                 55
                                 55
geographer’s solution




                        56
                        56
wide line solution




                     57
                     57
…technology expands the ‘art of the
           possible.’



…today’s ‘unimaginable’ is tomorrow’s
      ‘conventional wisdom.’


                                        58
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




                                                                      59
200 years of technology speculation

                                                                                                                                                    internet

   10,000 semilog scale


                                                                                                                                        computers

                                                                                                                         broadcasting




                                                                                                         telephone,
                                                                                                       electric lights
                                                              railroads
                                                                               railroads




                      1785                                                                                                                          1995




                   “Triumph of the Optimists: 101 Years of Global Investment returns”

                                                                                                                                                               60
   Source: Elliot Wave International; "Triumph of the Optimists: 101 Years of Global Investment Returns"
         Dotcom bubble…




                                                                                                                                    Morgan Stanley High
                                                                                                                                     Technology Index
       Terabytes




                                                                                                                                                     61
Source: Andrew Odlyzko (University of Minnesota – Digital Technology Center)   Morgan Stanley Technology Index from Yahoo Finance
   new technology has a history...



                                         7,000,000
              nect
              ions
              Con



              Lon
              don
               in




                                                     90   93   95   99




 “In 1885, Yale students who were getting ‘more light than they relished’ chopped down an electric pole
                               erected at the corner of the campus…”

                                                                                                     62
Source: When Old Technologies Were New
   “no change bigotry”
           vs.
“environmental everything”
           vs.
     pragmentalists


                             63
to predict the
    future,
   invent it!
                 64
irrational ideas: “how to green” books




                                         65
... or get to work.




              vk@khoslaventures.com
    khoslaventures.com/resources.html

                                        66
Together, our products will improve the way all people live




                                                              67   65
                                  Calera Corporation




Built on carbon negative cement




                                  68        66
                                                                    Living Homes




And prefabricated, environmentally friendly, cheaper, LEEDS homes




                                                                    69       67
                                 Soladigm




Using electrochromatic windows




                                 70         68
                                Amyris

                                LS9

                                Gevo

                                Kior

                                Mascoma

                                Range Fuels

                                Coskata

                                LanzaTech




Fueled from renewable sources




                                71        69
                                                  Ramu

                                                  EcoMotors

                                                  Transonic

                                                  Firefly

                                                  Seeo

                                                  Sakti3

                                                  Nanostellar

                                                  Tula Technologies

                                                  Hybradrive




With reduced fuel consumption and CO2 emissions




                                                  72          70
                                                      Topanga




Lit by high intensity, low power discharge lighting




                                                      73        71
                              Ausra

                              Altarock

                              Infinia

                              Stion

                              PVT Solar




Using renewable electricity




                              74          72
                                                     Great Point Energy




Cooking with natural gas from clean coal & biomass




                                                     75        73
                            Lumenz

                            Group IV

                            Soraa




Reading with LED lighting




                            76         74
                       Kaai




Watching HD laser TV




                       77     75
                             NanoH2O




Drinking desalinated water




                             78        76
                                               Segetis




Safely using biobased plastics and chemicals




                                               79        77
                                   Draths




Biobased materials for your home




                                   80       78
                                                           Pax Streamline




Staying comfortable with more efficient air conditioning




                                                           81       79
Change every aspect of daily living




                                      82   80

								
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