3 Ways Blockchain is Fundamentally Changing The Power Industry

I attended a TED style energy conference about a week ago and the consensus was that the future utility is here regardless of how reluctant the industry is. With impending delivery of Tesla Powerwalls and continued reduction in solar panel prices (with science now able to facilitate solar power generation even in rainy conditions [PDF]) fundamental change is not just imminent, it is here.

I wrote a future utility post a year ago and in it I suggested a scenario where

'Sam is considered as a 'node' on the future electricity grid (with a card and a mobile app to measure how much energy she uses or produces)... Sam’s home is powered by a rooftop solar panel and has a neighbor, Jo (with his own + or -), who doesn’t drive, doesn’t own a solar panel but trades stocks for a living, using a lot more electricity than Sam by running servers at home. Some days Jo (conceptually) ‘gets’ electricity from Sam's 'home battery' or the Walgreens or the wind farm depending on whether Jo 'wants' renewable energy. Because Jo is another node on the grid'.

That scenario is closer than I projected all because of Blockchain. As I share in my ebook Managing Technological Change In The Utility Industry I see 3 areas of fundamental change

  1. Consumer data management: The ledger function that the Blockchain provides will allow 3rd party technology and service providers to safely interact with the end consumer in a relationship that up until now didn't exist; the utility acted as the gatekeeper of consumer data preventing access to the services that we now take for granted in other industries for example the ability to get contracts based on your customized usage profile.
  2. Retail trading between consumers: the contract between the utility and you is for the utility to generate and deliver electricity to the your home. Smart contracts, enabled by blockchain, will enable a solar panel and Powerwall owner to sell electricity to their neighbors, effectively cutting out the utility. It's already being piloted in NY and will be an area of huge impact. Yes, the future is now.
  3. Utility security: data transmission, and consequently data security, at the scale the utility has never known is currently at the top of industry concerns. Secure data transmission, using the blockchain and its public/private key cryptography and cryptographic signatures (amongst other cryptographic techniques), takes away the pain of the utility CIO. 

The industry is not prepared for these changes and in some cases is actively resisting it. Blockchain as an infrastructure platform is not a fad, even if Bitcoin may be, and Goldman Sachs is spending heavily to disrupt itself [PDF].

As Nobel prize winning physicist Max Planck suggested 'a new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents finally die'. Time for the industry to wake up.

Polymathic Weekly #6: Muji and Little Bets

Two friends are currently working on huge projects. One is building a movement and the other is building the infrastructure layer of how individuals engage with government. The projects generate opposite feelings in me; admiration at the audacity of their goals (we are all inspired by great leaders) and dread for how much it will take to get there (because internal motivation is required to take on perilous journeys). But admiration, and a desire to assist as much as I can, eclipses the dread. I’m rooting for them..

Product
The white noise app for babies had the undesired effect of putting me to sleep while our son stayed awake! Since I liked the effect on me :) I found Muji to Relax to help. Take a 15min break at work listening to crackling logs, chirping birds or flowing water. I assure it’ll do you good. Just don’t fall asleep at work.

Article
Anytime I walked into a Muji store I wondered about the polarity of selling products (commercialism) purporting to simplify our lives. This New Yorker article on the commercial zen of Muji (yes, the same company that made the app above) brilliantly handles this conflict while shedding light on a fascinating company.

Book
I’m more intrigued by Pixar than by Apple. On Apple’s 40th anniversary it’s the slightly less popular but more creative of Jobs’ appropriations that I draw insights from. Pixar's creative approach speaks to the changing nature of business and how it requires a willingness to take Little Bets to find breakthrough discoveries. Packed with familiar examples from various subjects (including Pixar,) Little Bets is a light but good read.

Note of Thanks that will be (mis)construed as a shameless plug :): Amazon does not provide information on who bought ebooks but I’d like to say a huge Thank You to whomever it was that bought a copy of each one of my five ebooks, I truly appreciate you.

Have a great week! Book giveaway coming next week :)

A Simple Heuristic for Managing Technological Change in The Utility Industry.

The electric utility industry is glacial in its adoption of technology. There is evidence of this in never-ending pilot projects with startups that lead nowhere and in product design crowdsourcing campaigns that take a year and end up with products that remind one of the failed healthcare.gov project.

But change the industry must. The new consumer demands it (push) and it is what technology wants (pull). Caught in the middle of this push and pull is a cadre of management that is struggling with understanding who the new consumer is and is hampered by the bureaucracy and hierarchical decision making process in an environment where speed is crucial. Built on a premise that the utility's role was to provide stable power reliably and safely the system, and consequently the industry, has failed to adapt to a time where the consumers definition of safe and reliable power is one that is reasonably priced and sourced from renewables in a digitized economy.

What is required is a decision making approach that facilitates speed without compromising on the need to continue to provide stable power safely and reliably (as newly defined by the consumer). The new approach should factor in the 4P’s and weigh the impact of any new technology based on these four factors below by asking some critical questions. There are a few more questions than the ones listed below and I cover these in my ebook ‘Managing Technological Change in the Utility Industry’. 

  • People: How will the new technology impact consumers and employees?
  • Product: How does the new technology change the product we are providing?
  • Performance: Do our processes change as a result of this new technology?
  • Policy: what are the policy implications of adopting this new technology?

A comprehensive risk and response prioritization assessment of the answers to the questions above. This enables the development of a simple radar chart that enables the manager make the case for the right projects to be implemented at the right speed. An example radar chart for Augmented Reality (AR) is shown below. As easily seen, employees and processes are most affected by AR. This is due to the possibility to train a new employee to address the skills shortage that is quickly becoming a big problem in utilities across the country.

Simple heuristics like the 4Ps also provide a mindset modification to favor speed over ‘paralysis by analysis’. A much needed mindset change in the industry. As the industry moves to a distributed structure, as consumers request a deeper and more customized experience from their utility providers and as technology advances at all layers (from the infrastructure to the interaction layer) the ‘glacial-response-while-we-collect-rent income-business-as-usual-approach' of the utility will no longer work.

It’s what technology wants. And you and I know that technology eventually gets it’s way.

Please like, share and tweet!

Polymathic Weekly #2

Moving to a new city, like traveling to an unfamiliar place, has this positively disconcerting effect. You notice details; you are aware of your surroundings, unconsciously reaching for the familiar, while consciously soaking in and enjoying the new. This same learning happens with new technology; the best tools are rooted in familiar habits while adding new experiences to your daily life.

Ponder this as you experience technology tools you for work and life...

Product
I’ve tried a lot of productivity and behavior modification apps but I’ve mostly failed. I’m finally getting some success with Productive. The user experience is familiar (swipe for completion etc) and the app is set up to help you develop new habits and behaviors. It’s helped me swap out a serving of fruit for my second daily cup of hot chocolate.

Article

  • The most productive colleagues I’ve worked are/were pulsers. That’s my made up word for people who have the ability to churn out high quality work in chunks of productive time. The work time is broken up energy (body, emotion, mind or spirit) replenishment time. Manage your energy not your time (2007 HBR article) shares some of the research behind this and why pulsing is so effective. Adding pulses to Productive...
  • 10,000 hours with Reid Hoffman is not a short read so I would suggest you bookmark. I would also strongly suggest you read and take notes on what makes the founder of LinkedIn, and a person who’s benefited immensely from understanding the networked world we live in, tick.


Book
If you’ve read the oatmeal comics then you’ve heard of ‘What If?’. The book provides Serious Scientific Answers to Absurd Hypothetical Questions written in by readers. My favorite question has to be ‘How much force power can Yoda output?’ Read if you want some seriously nerdy stuff disguised as humor.

Have a great week and as always, let me know what you think or share suggestions.

*Unfamiliar, for example, would be an English speaker holidaying in an Arab country

Polymathic Weekly #1

Between 2005-2007 I curated a weekly email of books, music, pictures and a pithy quote. It got folk over hump day and became a thing with ~10k views/month*. Life happened, I stopped sending the newsletter and managing the site but kept curating interesting links for friends/colleagues.

It's 2016 and it's back! Every week (if you let me) I'll share great articles, a couple of books and lifehacking products. The goal is to that you get something new and career advancing every week.

This week's picks

Product

  • Boomerang for Gmail - They say 'teach people how to treat you', if that's the case stop sending work emails late on Sunday night and refuel your tank instead. Use Boomerang and schedule that email for Monday morning :) Also never miss sending a follow up email.
  • Bonus: x.ai: Most of my meetings last year were scheduled by Andrew or Amy. Not real people, artificial intelligence. Apart from a few glitches most people couldn't tell they weren't human. Welcome to the future.

Articles

  • Robots Will Take Your Job - Continuing the AI theme, the Boston Globe has a fantastic take on AI/Deep Learning and the impact it will have on our jobs. Read for why "we must seriously start talking about decoupling income from work".
  • 13 Urban Trends: As cities change before our eyes what can we expect and how can we, as individuals, position to benefit. Some of these are playing out in Austin (my new home) now.

Book

  • Your Flying Car Awaits - At $0.99 this book is a steal! There was a time when predictions were the remit of researchers/true experts. They still got a lot wrong. This book is a fascinating look at many of those wrong predictions and some that are no longer fantasy.

Enjoy! Share your thoughts, feedback, send to friends or just say hello...

I'll be at SXSW in two weeks so let me know if you have any particular innovation you are interested in scouting/learning more about.

Till next Sunday, have a fantastic week!

'Seyi 

You can get my Ebooks on Amazon (same price as your daily coffee but with a longer lasting boost) or here at www.asha-labs.com/book/


Systems Thinking (Business) | One Stamp (Novel) | Startups | Alien #2102 (Novel)

 

 

*The image above (circa 2006) is from wayback machine.

 

 

Zenefits, Uber and Facebook: Who Loses When Innovation & Regulation Collide?

ZenefitsUberFacebook or Internet.org. These companies have dominated tech headlines in the past few days for the issues they are dealing with regarding policy and regulation. In the case of Uber it's been the case pretty much since inception. Some of the coverage positions the regulators as the bad guys stifling innovation: 'Damn those luddites!'. Some paint the technology companies as the villains; 'Travis Kalanick is the evil baron of our time!'. In the case of Zenefits it does seem like there was a lot of negligence and disregard for regulation.

The more thoughtful commentary cuts to the fundamental issue here and that is the conflict between the purpose of government and the purpose of business. The most crucial determinant of a system's behavior (the government or the business in this case) is the system's purpose. I talk more about this in my ebook which is currently free on Amazon. Fundamentally, both sides of regulation (government) and technology (business) pursue their own separate goals. There will always be friction between what was (and how regulation dealt with that) and what is about to be (and the inadequacy of old regulations to deal with this). That will never not be the case. Another example is the inadequacy of utility industry regulation in dealing with consumer energy data in a time when every device captures and stores data.

In all these cases what needs to happen is a shift from the ‘all regulations are constraining’ trope towards helping create enabling regulations. What gets missed in the conversation is the nature of regulation; some are enabling and help to bring the innovation or benefit to life while some are constraining by putting bounds around how much can be impacted as a result of the innovation or technology. The goal is to help inform more enabling regulations, with emphasis on the word inform not influence, and also foster an acceptance that some constraining regulations are actually for our own good! The simplest examples of constraining regulations that have been hugely beneficial that I can think of is traffic control through lane demarcations. Imagine a world where there were no lane markers on the roads because car manufacturers felt it would limit how much driving people could do...

Enabling regulation comes about by utilizing a framework where regulators

  • look at the macro system,
  • make projections about where things are going at the subsystem level (and this is where the technologists or innovators can help)
  • Engage with the citizens they are trying to serve
  • futurecast about what technology wants

and factor in all this information to create policies that enable the government achieve its ultimate aim of creating a thriving citizenry that benefits from the  innovative/new technology that the other side of this conversation is selling.

It starts from working towards the same goal or shared purpose. A greater goal When goals are at odds (as is the case in the 3 examples above) the only real losers are the consumers; they miss out on the benefits the technology can provide while the regulators and businesses are distracted. During these regulation battles the businesses keep figuring out ways to run outside of the regulations (a systems trap called 'Rule Beating') to continue growing while the regulators keep regulating.

A shared goal that will yield benefits for all the subsystems involved, especially the most important element ; you and I.

One can always dream...

Why LinkedIn Needs To Pull A Netflix (And Why Amazon Is Doing So).

Netflix has been a darling of the stock market with a market cap that has grown to ~$40Bn over the last 5yrs (image below). The company did this by disrupting the movie rental industry (biggest victim being Blockbuster Movies along a few thousand mom and pop movie rental stores) with its watch and return all you can/pay a flat fee business model. 

 

Netflix stepped up its game (and better served existing customers with improved technology in the form of algorithmic filtering/selection and the move to streaming. This was great for us but was just a sustaining innovation. Not much happened to the stock price but these innovations, which weren't internally developed but were as a result of overall technological improvements, kept Netflix at the top of the game capturing more and more customers.

And then along came ‘House of Cards’ and the era of data driven original content. Using data/intent and interest algorithms, Netflix green-lighted a series that a lot of people actually doubted would succeed. Competitors missed the shift that was happening because the competition (Netflix) did not look like whom they'd competed with all along. "There's no formula...there's no textbook on the shelf that you pull down and say, 'How do you run an Internet movie distribution company?' We're writing that textbook."Even when Steve Swasey (Netflix VP of Communication) said this  in 2012 talking about the show competitors missed Netflix's bigger ambition to be a full production and distribution house.

Binge watching sessions, Emmy wins by several original shows created using this mix of data/intent/interest (by Netflix and Amazon) and, most recently, the movie rights bidding wars at the last Sundance festival (with the movie writers as benefits) finally signaled to movie houses and the TV/movie establishment that they’d been disrupted by Netflix. Similar to how Blockbuster (and even Redbox) did not know what hit them...

Which brings me to LinkedIn.

LinkedIn came into the market as the network of people; people get jobs through the people they know riding on the wave of social networks and greater internet access (technology not created by LinkedIn but key to its success). People could brand themselves and very soon companies could as well.

LinkedIn knocked companies like Monster out of the game; Monster’s stock price crater coincides with Linkedin’s IPO and it currently has a market cap that is 1.8% of LinkedIn's market cap. Since then Linkedin has added more engaging content through the acquisition of Pulse (where you are reading this now) & Slideshare, mobile apps for recruitment and career training (through the acquisition of Lynda). But these are all sustaining innovations.


LinkedIn needs to disrupt another industry and I believe it should pull a Netflix and get into publishing original career development booksEspecially as we all wonder about the future of work and our roles in the New Economy (if the robots don’t take over). Think about it; LinkedIn has data on the job vacancies, talent pool and their interests/skills gaps and a huge market opportunity. Data, interest, intent and predictive capability. Despite the wrong declarations on the death of books, the global book publishing industry will grow to $128.3Bn in 2019 from $120Bn in 2014. The ability to target career needs using advanced analytics and provide the books/content to bridge the skills gap will enable entrants  to capture market share from (and dare I say disrupt) the incumbents.

It’s a great opportunity for Linkedin to utilize its strength and get into adjacent markets where innovation is lacking and much required.

I’ve read 4 books this year, all based on personal recommendations and I even walked into a store to buy one. Like a lot of people, I will always buy more books than I can possibly read and recommending books that meet me at my point of need will always make me open my wallet. Why else do you think Amazon is opening over 300 stores? Because Amazon knows the market is huge, technology is ripe and it's time to disrupt the book publishing industry.

Berkshire Hathaway, Alphabet & Why Warren Buffett Should Be Worried

Warren Buffett (through NV Energy) and Elon Musk (through Solarcity) are currently battling in Arizona; one wants status quo and the other wants the government to continue providing subsidies to homeowners with solar panels who want to sell their power back to the grid (it’s known as net-metering). NV Energy has fought the subsidies using lobbyists, and won this round by getting the laws rewritten making solar cost prohibitive  for new customers and uneconomical for current solar panel owners. Apart from the creepy image of half naked Buffett and half naked Musk, Bloomberg Business magazine shows a myopia that I doubt Warren Buffett himself has. 

Sidenote: The battle actually highlights a systems thinking trap that actors fall into called Policy resistance; various actors try to pull a system towards various goals (most of the time conflicting as in this case), the result is an outcome no one likes but everyone spends considerable time and money maintaining. Point is, no one benefits from this war.

See, this battle might be between Warren Buffett (Berkshire Hathaway or BRK) and Musk (Solarcity, Powerwall) but the real war is actually between Berkshire Hathaway and Alphabet (formerly known as Google).

A simple look at Berkshire Hathaway’s portfolio of companies shows a heavy tilt towards companies that provide (according to Maslow's Hierarchy) safety, physiological needs and a huge dose of self esteem. The graph below shows how BRK companies are heavily skewed towards these needs we have - the desire to house, clothe, feed and affirm our families; in the form of home construction/ownership, protecting those homes and our livelihoods in the form of insurance and the things we do when we have security and comfort, boating/jewelry and the like.


Crazy thing is Alphabet is not just borrowing the holding company model from BRK, Alphabet is competing directly. Here are the 3 segments of competition below. Some clear areas of overlap and competition: 

  1. Energy (safety and security): Apart from NV energy (the entity battling with Solarcity above), Berkshire Hathaway has made a lot of investments in traditional energy (coal, natural gas etc). As I mentioned in an earlier post about Alphabet/Google’s ambitions in the utility space, is fully focused on where the industry is going. Point is, for Alphabets bet to succeed to the heights we expect of Alphabet/Google bets, BRKs bet on NV Energy etc has to fail. 
  2. Infrastructure~40% of the manufactured homes in the US are owned by Marmon  a BRK portfolio company but these are traditional homes. According to Zillow more people are renting longer and less consumers are buying. What BRK has done is ‘own’ the resources required to give consumers the sense of ownership of a home, that’s the bet BRK has made. On the flip side Alphabet has made a bet on the new definition of a home not being the four walls; Nest and it’s suite of products, combined with the energy story above, enables Alphabet to own ‘inside’ the home. Again, opposite sides of a bet with the changing demographics and behavior trends giving an indication of who might win these bets. 
  3. Esteem (and maybe even self-actualization): The ‘vanity’ bucket of BRK’s investments are expressions of wealth from a time fast fading; jewelry, luxury boats and jets. While some of these might still be signs of affluence the demographic trends point to a move towards experiences. I’ll also suggest that as much as Calico is about extending life, it is the new ‘vanity’ desire, with the goal being to live long to enable us continue to have more experiences.

Larry Page has taken Warren Buffett’s playbook and modified it for the next century. Alphabet is a Berkshire Hathaway for the next 20 years, with a focus on advanced technology to satisfy our basic needs. 

I’m not a fan of trite general statements but ‘Software is eating the world’ by Andreessen Horowitz, might be apt here; the software guys are eating Warren Buffet’s world. Alphabet will be sharing their numbers for Q4 2015 today but Larry and Sergey are about to be even more embedded in our lives (and a lot richer) than we can imagine at this point.

Don't Plan Your Career, Lay Out Scenarios Instead

I won't bury the lede on this one; don't plan your career, a better approach is to develop a few scenarios of where you believe your industry is going and acquire the knowledge and skills that will be required to thrive in these scenarios. I'll explain how to do this.

I wrote a few articles in 2015 (OK, a lot) and the ones that got the most views/responses were focused on the future of an industry or company. Unsurprisingly, I got questioned on my ability to predict the future, people disagreed in a few cases. That's fine. My response was the same every time; I'm not actually predicting the future, I'm just laying out strategic scenarios. Second most recurring question was why I felt comfortable sharing my views on where the future lies for industries that I know little about? My response; it's easy when you apply systems thinking because one should be wary of folk who predict the future with certainty.

It’s all about systems thinking. Looking at the industry through the lens of some immutable systems truths and not placing too much weight on the short term beyond where we are in market cycles. It’s the crux of my ebook as I apply it to two industries (education and energy). 

Understanding the fundamental drivers and where your industry is going will enable you acquire the skills you need to thrive in your industry whatever the outcome of your  situation with your current company or with the company itself. It's a simple process

  1. Read and gather information on the game changing technologies within and outside your industry.
  2. Apply some Systems Thinking to the information you've gathered (I give some examples below)
  3. Lay out 2-3 scenarios for where things might go
  4. Research to gain better understanding of what skills you need to acquire  to play a leadership role in the scenarios you've laid out (#SkillsGap)
  5. Go about acquiring those skills.
  6. Stay learning

Systems Thinking Concepts to Apply for Scenario building

In the Fifth Discipline, Peter Senge advocates for the value of learning organizations. The same learning mentality applies in your acquisition of knowledge about technological advancements and the skills that will be required. Some things will always hold true, regardless of whether some of the technological advances come to be, because some systems concepts (I borrow from Donella Meadows here) will always be true. Here a few that you can use to develop your scenarios

  • Honor, respect and distribute information: the business model for some industries (e.g. insurance or credit ratings) is based on lack of transparency and hiding information from customers. Such industries, and companies that are thriving in such industries, can only do so for so long because information will always seek a way 'out'. For example the healthcare industry will end up with our individual health records belonging to us and not the insurance companies or the healthcare systems. Develop scenarios that respect this systems concept.
  • Listen to the wisdom of the systems: similar to the concept above, analog industries to yours that are further along in the system cycle will provide you a sense for possible scenarios in your industry. For example; the utility industry is moving from a centralized to a distributed generation and supply structure, similar to what happened to the telecommunications industry about 15 years ago. Listen to the systems. This concept also suggests that cross industry expertise is going to be critical in any scenario you come up with as competition will come not just from within your industry but from outsiders as well. An example is Myfitnesspal (acquired by UnderArmour) which has data on the food habits of ~80M users, expect this company to compete with insurance or health care data companies in the not so distant future . The future of companies and careers will be ruled by those who combine skills from several areas of expertise and augment it with technology to achieve their goals. Develop scenarios that recognize this.
  • Expand the time horizons: In 2013 there was a lot of talk about drones. In 2014 there was a lot of talk about drones. In 2015 there was a lot of talk about drones. In 2016.. you guessed it, there will be a lot of talk about drones. This is not because people don’t have things to talk about, it’s because until a technology becomes ubiquitous we continue to be fascinated by the possibilities. When developing scenarios, extend your time horizons to include a timeframe when the fascinating technologies of today become regular parts of our lives and work. 

Using some of these concepts you will be able to futurecast, develop scenarios and define what you need to learn to cover your #SkillsGaps and it also helps you develop a learning mentality (due to the amount of research you will have to do).  Even if none of your scenarios come to be you would have learned a lot and gained skills. You’ll need it to thrive regardless of the changes that happen around you…

Get my ebook on Systems Thinking and Scenarios here or for the interactive version check out Amazon.

Apple's Impending Problem? Lack of A Strategic Narrative.

No one can deny the value of a well constructed and well communicated narrative. There was a fab New York Times article about Larry Page this weekend that will continue to define how we feel about the business of Alphabet. In that article we get a sense for the strategic narrative that will define, in our minds, the next few years of business moves Alphabet makes. We rally round companies that tell compelling stories about themselves. 

Strategic narratives, stories in a business context, are a way to create a shared understanding of the past, an understanding of the work in the present and projections for the future state. We have examples of where this works; Alphabet/Google's is organizing the world's information and employees know where they fit in that future, SpaceX is working on transport to other planets for all of us and that keeps employees clear about their future aspirations. We also have examples of when a narrative is absent; Yahoo lost its narrative and its mojo because its leaders did not redefine the narrative  as the world changed around the company (and the ensuing employee exodus is inevitable).

For customers we can reverse engineer into what strategic narrative a company has when you see it take an action e.g Google becoming Alphabet (a holding company) or GE divesting its financial businesses (because it's strategic strength is industry not finance). And a lot of companies succeed even without having compelling narratives; these companies just don't become global behemoths.

But we have exceptions. The biggest company without a narrative right now is Apple. What is Apple's narrative?

See, a company narrative helps define where it's going or why it's doing what it's doing.  I strongly believe consumers buy the 'why'. When you don't know the 'why' what are you buying? Do I have a problem with Apple? Apart from Tim Cook's ill-fitting suit for his meeting with the Italian prime minister (I joke, I joke)?  There are too many Apple products in my home to suggest I have a problem with Apple. But 'why' would I buy another IPhone? Or why is my wife, and other friends, thinking it might be time to switch from Apple? These questions lie at the core of my worries about Apple.

To keep us buying IPhones the company will soon need to give us a more compelling reason why...Or else this story will turn ugly.