Chris Anderson is the editor-in-chief of Wired as well as being a commentator – in particular on the long tail.

Chris Looks at the trending towards zero in terms of cost for bandwidth, processing power and storage ad case studies some organisations that are building business models that presuppose the move down the graph towards free ahead of their competitors still utilising a mindset of scarcity.

Miki makes some interesting points about TradeMe/SellMeFree, wondering why SellMeFree isn’t more successful given that it charges nothing for the service that TradeMe does in fact charge for. Miki concludes that it’s free for anyone to browse and buy on trademe so the audience is there, which drives people to sell there. Virtuous cycle = momentum = incumbency.

Check out the full movie here.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

6 Comments
  • You can see why people sit up and pay attention when Anderson talks.

    Did you notice the reference to the personal manufacturing platform model (aka Ponoko)?

  • Hi Ben,

    I saw the video a couple of weeks ago and was going to bring it to your attention, but didn’t get around to it.

    He does bring up a lot of interesting points. His perspective aligns very closely to mine with one reservation. That is his rather blase attitude towards waste.

    The trend he postulates would cause even greater volumes of is e-waste, a problem that is already almost insurmountable now. Its because in the minds of Western “consumers” electronic goods are already too cheap and therefore expendable, which is happily enabled by the conventional business model which encourages a disposable culture where companies must make incremental upgrades of their products and planned obsolescence in order to maintain their revenues.

    The basic idea relates well with a business idea I had after reading Amory Lovins’ book, Natural Capitalism.

    According to the book, the Industrial Economy can utalise between 75% and 90% less energy and resources and still produce tbe same amount of products and services that it does whilst making use of current technology, but for some the initial capital costs and long payback period are prohibitive.

    I believe I have come up with a solution that will enable companies to overcome the obstacle of reconciling the uncertainty over the benefits of resource efficiency and being environmentally friendly particularly in the area of energy generation.

    My vision would be to build a company that combines an energy efficiency consultancy and electricity generation business with an investment intermediary. The consultancy would advise clients on what steps to take to drastically reduce energy and resource usage.

    The energy generation business would work with the client to choose an energy solution that would best meet their needs and if appropriate organise its construction on site.

    The investment intermediary would provide the greatest proportion of the revenue flows to the company through linking capital investors who are after a secure investment with a healthy return over the lifespan of the contract to the clients who need the initial capital investment of the solution.

    The revenue would come from a three way split of the cost savings stemming from the energy and resource efficiency measures and from selling the electricity generated by the electricicity genertion installed at the client’s site. (Wind, Solar, Biogas). The main problem I saw was how to get funding from investors for such a revolutionary idea, but I’ve stumbled across another solution that is very similar to mine.
    http://www.mmarenewableventures.com/Solutions/Investor.html
    http://www.ecogeek.org/component/option,com_frontpage/Itemid,1/limit,13/limitstart,78/

    I think it could work just as well in a redidential application as an industrial one. What do you think?

  • The idea sounds good at first blush. Some questions;

    – how to ensure neutrality and convince clients that one is giving honest advice and not just trying to obtain revenue for a sister organisation
    – do the numbers stack up – is the saving sufficient (when split three ways) to make it worthwhile?
    – are investors really keen on such long term plays as energy generation?

  • Hi Ben,

    Thanks for the feedback. Getting feedback is the whole point on why I posted the idea in the first place. I’m certainly not ready to take on such
    an ambitious challenge as this and only brought it up, because I
    thought it related well to the topic.

    “How to ensure neutrality and convince clients that one is giving
    honest advice and not just trying to obtain revenue for a sister
    organisation.”

    I guess by being as transparent as possible. The three
    parts of the company will not be seperate entities, but will be
    interdependant of each other in their performance of their seperate
    functions and this would be made quite plain to the client. Not to
    mention the clients would be aware that the company has an incentive
    to provide the best advice on resource and energy efficiency due to
    the revenue/savings sharing business model.

    “Do the numbers stack up – is the saving sufficient (when split three ways) to make it worthwhile?”

    I believe so. There is a huge untapped market out there which is not
    being serviced, because of the prohibitavely high initial capital costs
    a barrier which would be overcome if my vision comes to fruition.

    I understand that finance investors expect little more than a 8%
    return and still have to accept high risk as people who invested in
    the 15 finance companies that collapsed last year found out to their
    dismay. As I said in my earlier post, according to Amory Lovins there
    is potential to make 75-90% energy and resource usage and therefore
    cost savings. Apparently the payback period is also far quicker than
    most assume. NanoSolar have recently developed solar panels that cost
    as little as $1 per watt with a lifetime equivalent to conventional
    solar panels.

    “Are investors really keen on such long term plays as energy
    generation?”

    I see the greatest potential for uptake for long term play coming from
    investment funds that have Kiwisaver portfolios, because they should
    favour long term, medium to high return, and low risk investments such
    as what I’m talking about.

    What do you think?

  • Hi Ben,

    I meant ….three way split between client, company, and investor…

  • Have I adequately addressed your concerns Ben?

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