 Welcome to 2021. Thank goodness 2020 is in the rear view mirror is all I can say, but I sure hope 2021 and beyond is a lot better than what it's looking like this week, but we'll figure it out. Anyway, have a good nice holiday season. Kind of quiet around my household but I'm hoping everybody else had a good holiday Christmas and New Year's and Hanukkah or whatever you swanza whatever you celebrate. Um, I got a nice email from one of our hosts here at think tech Mitchell and who does a Wednesday show called the white Hawaii the state of clean energy. It was on one of my favorite overall topics which is basically really doing good deep analysis on things and you know it's it's always people are always trying to predict the future and especially people are trying to gain financing and that's where we have antitrust laws for, for the stock market and stuff so people can capitalize on inside information. The idea is to to really look hard enough at what's going on around you to kind of predict the future, especially if you're looking financially at the stock market. You want to pick companies that are growing early on and make good investments in them and then if they they're good investments, the company grows it gets bigger and bigger and bigger. So when the stock prices go up, you end up making money. And that's how a lot of people really number one in their retirements and settle into a good retirement when they get to be my age or make good money and invest further and end up being rich when they're younger than they need to retire and they can retire early. So the things that that helps figure out this predictability is is called disruptive technologies and Mitch sent me a great video. It's actually a guy named Tony Siba S EBA. I'm sure you can Google them or look them up online he probably has several videos out there on YouTube and and Vimeo. But anyway, he's one of those guys that that does a deeper dive on disruptive technology. And it was a great video and and the timing was perfect because this video was from 2017. The 2017 was not that long ago. It's only three or four years ago. And so some of what he's predicting or what he's talking about. It's either happening today, or it didn't happen at all and you can you can tell whether he's on the mark or whether he's like off in the bushes. And it turns out pretty much on the mark I had a couple comments that we'll talk about later that I think he missed. And if he haven't he'd have been like crystal clear crystal ball accurate and and helps us move forward from today into 2021 2022 and beyond. So basically what he focuses on are two things disruptive technologies. And in that transformation is is not linear. It, it's exponential. So you don't ever have a change that just goes on a nice climbing line like this. And if you remember a couple weeks back I showed you a graph of stock, and the stock was flat for a long time flat for a long time then all of a sudden goes up. That's exactly what he's talking about when he talks about disruptive technologies. And he talks about it with really basically two major components. Number one is technology convergence and a business model innovation. And I'll go into those in more detail and give you some examples. He starts off by talking about experts, and if you have watched and energy man a few times you know what I feel about the term expert. And I can look back to 2020 and tell you, hey, how many of those experts were right everything from whether you wear a mask you don't wear a mask to whether the virus started in China or didn't start in China everybody has an opinion. Everybody's got everybody's an expert, and most of them were wrong. And so you don't just listen to people who quote unquote or experts you have to dive a little bit deeper. And Tony talks about how you do that dive. So just some of the history of experts that maybe weren't quite so expert. One of the examples he gives is in New York City, he showed a picture of New York City one of the main drags probably at near Times Square where they're doing the Easter Day Parade. And it's a 1900 so the very turn of the century, last century 20th century. And in the street. All you see is horse drawn carriages. All horse drawn carriages hundreds of them. He says, there's one car in this picture. And he's on the screen he circles it so you can find it otherwise you can take you hours to find the car in this picture of hundreds of horse drawn carriages. And he says, And here's a picture from 2019, 2012, where now there's no horses, there's only one horse in the picture, and all the rest of the hundreds of vehicles in there are cars. And that was the Henry Ford, you know, mass production of vehicles that that really was a technology change a disruption that that people live through in the early turn of the 20th century. And it was one of those things that really wasn't predicted. If you were living in the 1900s, you know, for thousands of years, people have been riding horses and using horses to pull carts and carriages and things. If you in 10 years you're going to be driving a car, I'd say most of the people on the street, we just start laughing and go, you're crazy I can't afford one of them and, you know, and plus I have my trusty horse and he's a lot less complicated and stuff, but sure enough, later, the world was driving cars. Those are the kind of technology disruptions that he's talking about. The point is, not too many people picked up on it. Not too many people figured it out. And probably not too many people bought a whole bunch of Ford stock and or stock and car companies and made a bunch of money on it because they never believe that automobiles in 10 years or 12 years would basically take over the streets of any city. Another one he talked about was AT&T, big telecommunications company been around for a while, probably beat the daylights out of the bell telephone company in terms of landlines. And best guess what, they invented this neat thing called the cell phone. So they hired a high powered company, marketing company, to find out whether the cell phone was going to take off and become a household item, or whether it was just going to be kind of a specialty thing that maybe big businesses and the military use and the consultant came back and said, and in the next few years, you probably sell about 900,000 so less than a million in these things. So, you know, that's not really going to, going to break the break into the market. Well, in the first couple years, it was 109 million, not under a million. So obviously AT&T not only missed out on the cell phone boom, but they also took a hit because their landlines started going backwards, they weren't being used as much. And so they lost on both sides they invented the cell phone, but they failed to analyze what was going on and detect that transformation that technology transformation in time to capitalize off of it. And last one he gave, which was kind of close and dear to the Hawaiian heart is Kodak. The Kodak Kula show used to be one of the biggest things in Hawaii for a tourist attraction. And Kodak invented digital photography. The company invented it. And they were worldwide they were like the number one in film in the whole world. And within 12 years, they went from a $14 billion industry to bankruptcy, because they failed to recognize disruptive disruptive technology, and the things that this guy Tony Siva talks about. So, as we go forward into 2021 and beyond, we have to recognize a couple of things that Tony talks about. He talks about that disruptive technology, not just being not a flat straight line or an increasing straight line. He talks about it being an S curve that goes like this and then takes off and then levels off up here in the top. That S curve nowadays because of how rapidly technology is changing is getting shorter. It's flat for a long time, then shoots up and then flattens out. So that that disruptive technology window shrinks in time in just a couple years. And that's why this video from 2017 is so important, because what he talked about specifically. And what we're going to talk about the rest of the time here really takes takes into account what's happened in within the last five years, and maybe projects out to 2035 or so. But some of it you can see he was right on the money or he's right on the money in many ways. And it's happening at a much faster rate. So, a couple more things want to point out. IBM, the great computer company when they started out with computers. The guy who ran IBM actually said, I don't really see the computer being in every home. Most of the computers that we produce and there won't be that many are going to end up at, you know, universities that do a lot of study, you know, lab work and things like that research, and some bigger, maybe accounting companies that do a lot of number of things. And so IBM focused on the big, you know, big computers and big rooms and, you know, servicing the business community. On the other side, you had Apple, and Apple saw the exact opposite. Apple saw that the computer had a real application in the house, and in the home, and that people were going to really latch on to Apple computers, because they were fun you could do all kinds of things. The contrast between the two that I picked up on though is IBM latched on to the business model and kept their computers fairly clean on the memory. They didn't, they didn't have to have a lot of memory because memory was expensive. And Apple use a lot of memory, and it made their computers really expensive and most people couldn't afford them in the house. So even though they were focusing on an individual market, their computers were too expensive. And IBM was focusing on a business market where there is more money, and they could afford a little bit. They were kind of skimping on the storage, which was expensive at the time, but this technology disruption that happened during that short period when computers are being developed was the cost of memory. And that's what Moore's law, where memory doubles in two years, and the price drops in half every two years. So for every two years, you get a doubling of the memory of the memory capability, and a halving of the cost of that memory. And so, Apple, over time, memory was getting so cheap that their product became really user friendly. And IBM was able to capitalize off of cheap memory, but literally what you see in Windows is a copy of the Apple operating system, the way it was introduced to the computer to be more user friendly. And if you're an old computer user, you remember doing DOS commands and things like that that are, it's almost like being a programmer or a, what do they call them, a coder yourself using DOS command. C colon, backslash, blah, blah, blah, blah, blah. All that stuff comes from the old days of IBM. So, catching on to these market changes and these disruptive technologies and the transformation of technology, the convergence of different technologies, and the introduction of business models, innovative business models is what Tony really talks about that we're going to get into here. Innovation is taking less time because of technology, it's crunching. And the business model convergence talks about technologies that are coming that complement each other. So for example, when you start to look at phones, the cell phone, the cell phone when AT&T came out with it was a big brick. And all it did was make phone calls. And you could plug it into your car to save battery and have your battery last longer. You could charge it in a big charger at home. And the thing was big. And all it did was make expensive phone calls, kind of like the IBM computer. It was a one trick pony. But then what you had was you had the convergence of the cell phone with the lithium battery. And with much more memory that was much cheaper. And the computer technology and computer programming and gaming and stuff that was making computers more and more capable of more and more things that people wanted to do, like cameras, digital cameras. So the cell phone, because of technologies that were not only disruptive, but complemented and business models that recognize the convergence of technologies, we're now coming together. And your, your modern smartphone, isn't just a cell phone. It's a computer. It's a calculator. It's a camera. It's a video recorder. It's a video recorder. It does all the, it takes messages for you. It does text messaging. It does all of these things. You can watch TV on your phone nowadays. So the convergence of all these technologies took the smart, the cell phone and turn it into the smart phone. So now we have an iPhone and Android phones and stuff that can do things that 10 years ago, people would just laugh. Like, you're going to do what? And in reality, we're in the Buck Rogers world of wearing little bit things on your wrist like a watch, but you can talk on it. You can do text message on it. You take pictures with it. And you wear it on your wrist and it's tied to your phone and your phone's tied to your computer and all your banking and everything else. So those are the technology convergences that Tony talks about. Another technology convergence they talked about that is really simple is the technology convergence of the smartphone and the vehicle. The smartphone got so capable with GPS and everything else in it that the typical person who normally would have to look up an address in a phone book and then get out some map book and flip to a certain detail page in a city and try and find a spot. He'd just get in his Google map and go where stands house in Kailua, it go and the thing would bring up directions to the house, a picture of the map and literally drive you to the house. So the phone was doing all that. And people were able to make purchases with their phone just tied to their credit cards and things like that. And all of a sudden you have things like Uber and Lyft that tied those technologies together those business models together and give you a brand new emerging disruptive technology business model that actually is a convergence of things that have been happening rapidly in different sectors and somebody who's smart enough to pull them out together and say, Well, if a private citizen, who only uses this car, you know, 10% of the day. And then suddenly is only a part timer. And he needs to make more money or he's working his way through college and he's making more money, or she needs to make more money. They can take their car that they're paying expensive insurance on and expensive gas and things like that and make some money. So how would they do that. They've got it in their hands they've got GPS they've got they've got communications, they've got the ability to charge people, and somebody just pulled it all together, built the software for it. And, and boom, you've got Uber and Lyft and the other companies that are out there. So those are some examples of disruptive technologies. So because we're going to take a quick break here. And when we come back, we're going to talk about disruptive technologies and to my favorite areas, the grid and transportation. But we'll be back in 60 seconds. He will come back to stand the energy man said awesome in here in a brand new 2021 year. So we were talking about disruptive technologies. We talked a little bit about Uber and Lyft and some of the other things that we are familiar with and how they developed. And now I want to talk a little bit about two things and they're actually integrated. But this guy Tony Siba talks about them separately. And I want to kind of fill in some blanks because some of the blanks that he left are really important to fill in. You know, electric cars. And I work for the state for H cat, my predecessor Tom Quinn actually did a lot of the marketing and exploration and technical work on batteries and stuff for Hyundai and electric cars here in Hawaii. And this was one of the first places in the US that did electric cars. So, I'm familiar with electric car development. And how it's been coming along and and this guy Tony Siba talks about the evolution of electric cars and how, how much more efficient they are then then gasoline powered cars. And he's right on the money that the data he puts down is is right on the efficiency of the engines, the number of moving parts and the maintenance between the two vehicles, it's, it's all, it's all, it's all right on the mark so he's he's electric cars in the long run are cheaper. He does though say that electric cars last longer, which is also true because there's less moving parts, and the electric car should last you instead of the 140 to 200 miles. The traditional car does nowadays, these electric cars should go double that range, maybe even some some companies are projecting a million miles on a car. Even 500,000 is going to get blown away and a million miles will be the typical life of your car. Well, when you take that into account and say, okay, electric cars are really efficient and they're really good. And they're on the way. I would say, take that to the bank. It's, it's pretty much going to happen because you can't deal with all the climate issues we have now. And the fact that internal combustion engines are in the 20 to 30% efficient on the in their best scenario, compared to the 90% efficiency of electric vehicles. You just can't, you can't justify anything other than electric cars with Tony missed, however, were two things. Electric car battery changeouts, because he says that maintenance is pretty cheap and the worst thing is tires. I'd agree, except that most of the people he probably talked to had never owned an electric car more than three or four years. And by the time you get to the 567 year point. You are oftentimes faced with changing out the batteries because batteries, whether you love them or hate them will deteriorate a little by little over the years depending on how weather made and other factors. And these don't last forever. And if you have a car that's seven years old, and suddenly you need to spend $10,000 put new batteries in. You may not want to keep that car. But that's, that's if you're using batteries and you know you don't mind reinvesting in the same vehicle. And, and you don't tear up the insides with your dog or your chickens or whatever like I have. That's one point. The other point is, if we're getting rid of all these gasoline vehicles, and we're switching to electric vehicles. Where's the electricity coming from. So you can count on the grid, nearly doubling if not more than doubling in capacity of not only power production, but distribution. When you go to electric transportation. So, I encourage you to watch his video and keep those two things in mind. Other thing he points out is that private ownership of vehicles is probably going to decrease because of a disruptive technology electric car coupled with autonomous vehicles. And he says between these two, the long, long duration or long life of the electric vehicles, more efficiency, and the autonomous vehicle, and the autonomous controls have gone from like 70,000 back in, you know, 2015 to less than $1,000 per vehicle in 2021. And that is going to drive the electric vehicle to a last longer, and combine with things like Uber and Lyft, where instead of people owning cars. They're going to just take Uber and Lyft, whether it's to work or whether it's to grocery store or whatever, because most of the time their cars sitting in a parking lot or sitting in a parking space or sitting in the garage, and not really going anywhere and having insurance for it, fuel for it, upkeep maintenance, all those things, and it doesn't really move that much. So for a lot of people, especially urban people, they're going to be using Lyft and Uber and stuff, and they're not going to own a car. So that's the big disruptive technology he's pointing to. Another one he talked about was the grid. And the grid, and trust me, the folks that I work with, we're so aware of this, it's painful, and our electric company and most of the utilities are so unaware of it, it's scary. The future of the grid is got to change. And the reason it's got to change is solar power is getting so cheap and wind power is getting so cheap that right now, and in his video, he actually gets in the numbers right now. You can buy solar and batteries and put them on your house and come off the grid. And the cost of your electricity is going to be cheaper than buying from the electric company. And that conversion or that change has been happening over the last three or four years, to the point where in Hawaii, solar companies have pretty much been going bankrupt over the last couple years. But now we're seeing a resurgence in the amount of solar they're putting in is they're also putting in battery storage. So, you put in enough solar power to run your house for a whole day, and enough energy enough battery storage to store the energy you need at night, and all of a sudden, you don't need the utility anymore. Well, he points out, and this is where I learned something from him. And it's really critical that on the grid, you can't afford batteries for the grid. You get to about 50 megawatts or so, and the batteries do not pencil out compared to other ways of storing energy. I'm tightro compressed air, my favorite hydrogen. You just can't afford batteries when you get to large scale grid. What you can afford is hydrogen and electric vehicles fuel cell vehicles are also electric vehicles. They just don't have as big a battery, they have a smaller battery, and a fuel cell that turns hydrogen and air into electricity, water and heat. So if you take the size of the grid to accommodate transportation as growing. You just can't afford to modify the grid and make that trend that that infrastructure more expensive to accommodate transportation. We just can't afford to do it, because we're at a point where a person's house and generate all the electricity need store it and use it cheaper. It costs to move the electricity from the power plant to the house. In other words, it doesn't matter whether using nuclear solar hydroelectric. It doesn't matter. It costs more for the utility company to move the electricity from the power station to your house. And it costs for you to put solar on your roof with batteries and stay off the grid. You just, that's the big economic advantage, but what are the other advantages. When you have a hurricane, what are the chances of every single house having all of the solar and all the batteries blown away. Not likely. A lot of them maybe some of them maybe depending on the severity, but in any weather event, different parts of your, your island or state or whatever, are going to have different impacts. And therefore, your survivability rates going to be better if your resources are distributed, spread out. So, we're running up on our end of our time here. I would encourage you to, if you can check out Tony Siva's video, look at it, it's about an hour and 15 minutes long. It's really good but add to it the fact that he underestimates the amount of grid cost there is. There are comments on solar becoming cheaper and cheaper and wind power becoming cheaper and cheaper that they're basically unless the utilities radically change their model to support what we call distributed generation. In other words, people that have their own power generation at their house or in their community, instead of just grid power. I'm going to be missing those, those dynamic technology changes those dramatic changes that everybody else has missed from AT&T to Kodak and everybody else. So, I hope that's a good way to start off 2021. The show next week is going to have Keith Malone from the California Kill Cell Partnership to talk about hydrogen in 2020 and 2021 what we expect is coming. And then we have a great show coming up the week after that with Mike Stritsky who if you hadn't, hadn't found out. He runs the hydrogen house in New Jersey and the New York Times did a fairly large article on him, and you could go back and read that. He's going to be announcing some great movie things that he wants to promote some great environmental films that he wants everybody to know about. So, until next Tuesday, this is Stan Osterman signing off as Stan the Energy Man here on Think Tech Hawaii. Thanks for joining us and we'll see you next Tuesday. Aloha.