Saturday, December 29, 2007

Looking back

We are at the end of 2007 and about to ring in 2008. Its interesting to reflect on what was most significant about 2007. I was at CES in January 2007 and the buzz about the Apple iPhone was rising to a crescendo. Apple had little to no presence at CES in 2007 and instead chose to deliver their message from MacWorld in San Francisco. For me, it was amusing that the most significant technology product was launched right here in Cupertino, while I chose to travel to Las Vegas to see what was hot at CES :-). I have decided that this year I will not head to CES in case I miss something as significant in the Valley. :-) Its interesting to compare some predictions on wireless, at the beginning of the year, from some leading VCs, to what happened in reality. As one of the panelists pointed out then, "VCs are often wrong, but never in doubt" :-)

In any case, it turned out to be a very significant year for Apple. Apple stock is on a tear and the impact of the iPhone will be felt for years to come. The Mercury News rightly says that they have transformed the mobile phone industry. The next few years will see Apple setting the pace and the rest of the industry trying to catch up, much as they did with the iPod.

In April, I wrote about location based services and their promise. I was disappointed they did not take off in a big way in 2007. I think that this will be corrected in 2008, perhaps again with Apple leading the way ?

The other big technology trend in 2007 was the push behind Clean Tech, and Solar energy in particular. As we got close to the end the year, we saw NanoSolar announce production shipments and Ausra announce a contract with PG&E. I am sure this is just the beginning of an explosion of activity in clean tech in the years to come, with the Valley driving innovation again.

In a few days, I will share some of my predictions for technology trends in 2008. Till then, happy holidays and a great New Year to everyone.


Tuesday, December 18, 2007

A Great Day for Clean Tech in the Valley

Today was a great day for Clean Tech. NanoSolar announced that they are shipping their first commercial panels for field deployment at Luckenwalde in Eastern Germany. Of course, Gunther Portfolio had tipped us off about this in their post on December 10th. As the CEO, Dr. Martin Roscheisen, discusses in his blog they are expecting to enable 99c/Watt panels. It is interesting that they have donated one of the first three panels to the Tech Museum in San Jose. I am sure the NanoSolar IPO, when it happens, will be one of the best the Valley has seen.:-)

The other interesting news, which did not quite get as much coverage, was that PG&E had agreed to buy 2MW of power from wave energy from a Canadian company, Finavera Renewables. Wave energy has always been a promising and challenging source. As the data I presented from Dr. Amit Kumar's talk in October showed, the theoretical potential for geothermal and ocean power is 70 TW, but feasible capacity is expected to be on the order of 2TW and significant technical challenges remain. Good to see that PG&E is driving the leading edge of wave energy. Clearly compared to the practical possibility of 1200 TW from solar (again from Dr. Kumar's data), this is small, but we may need all the sources we can get, if we are to stem impending doom in the form of catastrophic climate change. :-)

Lest you think I exaggerate, listen to what NASA scientists had to say yesterday in San Francisco (video clip from ABC News). The report says that by 2012-2013 the Arctic will be ice free at the end of summers. This was not expected to happen till 2040, previously. Let us hope that alternative energy is still in time to save the planet.


Monday, December 10, 2007

Social Lending

In villages in India you used to have local moneylenders who were almost part of the family. They gave you money in times of need. Sometimes, they took jewellery or something else as security, but mostly they loaned you money because they knew you. Of course, it was at a profit, sometimes a huge one. Interest rates could be well over 200% :-) But, at least, you got the money when you needed it. This practice has reduced somewhat in recent years with modern day banking facilities available in most places, but I would not be surprised if it is still very common in places. That's what comes to my mind when I hear social lending. :-)

So, when I got an invitation to a Social Lending panel organized by the MIT Club of Northern California on December 5th, I was intrigued. I was curious to see how Web 2.0 had changed this age old practice :-) The panel was hosted at Wilson Sonsini Goodrich & Rosati in Palo Alto and moderated by Eric Nee, Editor of the Stanford Social Innovation Review. The panelists included John Witchel, CTO of Prosper, Patrick Gannon, SVP of Lending Club and Harvey Grasty, Head of Business Development of MicroPlace, a division of Ebay. Prosper and Lending Club have been funded by Valley VCs to the tune of $40M and $10M respectively and MicroPlace has access to a lot more funding, potentially, as part of Ebay. Prosper is the oldest of the three, having been around since early 2006, while MicroPlace launched their website in October 2007.

The concept is simple - peer to peer lending. Anyone can be a lender or a borrower. All you need is to be able to surf the web and create an account at one of the sites. The three companies have somewhat different approaches to the process, though. In all three cases, you can lend small amounts of money, as low as $25, for short periods of time, and you can choose who you will lend to. They charge a service fee of 1% in all cases. Microplace has altruistic goals of eliminating global poverty, while Prosper and Lending Club are focused more on borrowers in the United States. Microplace partners with third parties like the Calvert Foundation and others to make low interest (2-3%) loans in other countries, especially underdeveloped countries. You cannot make loans to individuals in other countries directly.

Prosper has over 500,000 registered users and $100M in loans so far, $40M in VC funding and 45 employees. They claim transparency of the process as their biggest advantage. The borrowers submit detailed information on their background and requirements and the lenders can choose who they want to lend to based on risk and return. Prosper has an automated lending process which either party can customize based on their preference. Risk is assessed based on Experian Scorex credit scores and other criteria. The borrower needs to provide a fair amount of personal info for lenders to assess, though not as much as typical banks require. The minimum credit score is 520.

Lending Club started as a peer to peer lending service for college alumni on Facebook and received $10.26 M in VC financing in August 2007. They have $3.25M in loans so far with $25M turned down. The average rate of return is 12.25% and minimum is 6.78%. The average FICO score is 692. Their users range from students to 70 or 80 year olds. The lending process is automated like Prosper. They view themselves as combining responsible credit with social networking.

All three companies claim that their process is far simpler than borrowing money from a bank, there is more transparency, a higher rate of return and the flexibility to loan money to people or causes you find interesting. They claim their default rates are low and that they assist in helping fight fraud and securing privacy. However, they have all been around a lot less than most banks, are less capitalized and are a lot smaller in people terms than the smallest of banks. If the security and privacy issues do not limit them and they grow to service a large volume of loans they have the potential to be profitable and change the banking paradigm. If, for example, you can borrow money at 7-10% to pay off $20000 in credit card bills, it looks like a win-win situation for the borrower and lender, by cutting out the middleman. As John Witchel of Prosper stated, they have many more product ideas like 5 year loans and others for the future. If they are successful in banking, there are other areas such as insurance where consumers have even less choice, which look to be possible growth areas.

I must say that these companies are fine examples of the innovative thinking that is the hallmark of Silicon Valley and the Bay Area. Whether they are successful over the longer term remains to be seen. But, the world is a better place for the attempt and surely will bring some competition to an industry which has not changed in ages, and the average consumer will benefit from it. Certainly, if the villagers in India have access to the Internet and to websites like Microplace, they will get a better deal than they could from the local moneylender, or even the local bank :-)


Saturday, December 8, 2007

Super Solar panel ?

The Inquirer has an interesting story about a South Carolina company which claims to have developed a solar panel which is 15 times more efficient than current solar panels. The company, FreEnergy LLC, claims to do this by using the entire spectrum of light from the sun, rather than a fraction as conventional solar cells do. The other interesting thing about the company is that one of the founders moved from California to South Carolina to start the company. :-) Rather the opposite of the usual clean tech startup trend :-) You can read more about the company on . Is this a fundamental breakthrough or another cold fusion like story. ? Time will tell. The Inquirer, as usual, comes up with the most interesting stories, even if they don't all turn out to be true :-)


Saturday, December 1, 2007

The Wireless Wars

If you did not know it already, there is a battle brewing for the wireless spectrum. As the Mercury News reports, the 700 MHz spectrum which is currently being used for UHF TV, is being auctioned off to the highest bidder. What prompts the auction is the federal mandate which forces the TV broadcasters to go digital from 2009 (see this Benton Foundation link for an excellent review of the timeline.)

The bidders for the spectrum include the usual suspects like AT&T and Verizon and some new players like Google and Frontline Wireless, a startup funded by stellar Valley VC's ! So, why such a diversity in the bidding ? - because the stakes are big ! It has a lot to do with Net neutrality and control of the Internet. For example, see this perspective from the man who has some claim to having invented the Web, Tim Berners-Lee. :-) See, not quite who you thought it was :-).

Its all about control of information, and in an information age that equates to a lot of power. The Mercury News column talks about interesting angles to the bidding, such as Google bidding, but not to win. Interestingly, it all ties back to the mobile phone operating systems and Android, which I wrote about earlier in the week. This auction also appears to be the last of the spectrum auctions for useful spectrum. The deadline for bids is this Monday and the results will be announced early next year according to the Mercury News. I can't wait to see who wins this one. It could change the power structure in wireless communication. I will make a prediction - the bid will be a lot more than the $4.6B minimum that the FCC expects for the spectrum.


Thursday, November 29, 2007

Clean Tech VC funding skyrockets

The Mercury News reports that the first three quarters of 2007 saw $2.6B in clean tech funding in 168 deals. This compares to $1.8B in 2006 and $235 million in 2003. As I discussed in my post in January 2007, clean tech funding accounted for about 9% of VC funding till late last year. It will be interesting to see what fraction it is going to be this year. The interesting comparison was with funding for software, biotechnology and biomedical devices. With the highest rate of growth for clean tech funding, we could see clean tech being the largest sector for VC funding in 2008 ! That would be massive change in just 5 years. Whether this will be in time to reverse global warming remains to be seen, but its a good start :-)

One big difference I see between clean tech funding and funding for the other areas is that the size of the deals is very large. However, one deal listed for $500M to Delta Hydrocarbon, a Dutch company, to enhance oil field production did not seem to me to be particularly clean tech. But, maybe there is a clean tech angle to it :-). If at least some of the clean tech funding sticks in the Valley, it certainly will drive the level of activity up.

On Tuesday, Google made a splash with their announcement targeting 1 GW of renewable energy at prices cheaper than coal. This is an ambitious target and they are willing to spend millions chasing it. Though there are differing views of it, I for one, hope they make it. They have the deep pockets to try and if they achieve the target it will make a significant difference. To understand how difficult this is, read my post from last month where I quote Dr. Amit Kumar's data which shows coal at 5c/kWh compared to the cost of other renewable energy sources.


Mobile Phone Operating Systems - Open or Closed ? - Part II

On Tuesday, I wrote briefly about the mobile phone panel I attended at PARC. Here are some highlights of the discussion. Andy Seybold put up a slide showing the market share for the various OSs currently. Though the space seems fragmented, Symbian does control the majority of installed mobile phone OSs with over 165M installed. ( I still have my Diamond Mako clamshell from SONICblue with the Psion OS from Symbian. :-) It was pretty cool then, but way ahead of its time. ) With over a billion phones shipping per year this is a very respectable market share. (In comparison about 200M PCs ship per year. ) Microsoft shipped over 11M mobile phone OSs in 2006 and expects to ship 20M this year. Monta Vista was one of the lesser known names on the panel, but they control over 95% of Linux OSs on mobile phones. It was interesting that they said that they are supported by many OEMs just because they are not Microsoft. :-) Google also seems to be hoping for this "not Microsoft" effect to help them. :-) Of course, they are also giving away Android with much of its open stack and hoping many developers will write to this platform. Their goal, of course, is to have a much larger playing field for advertising revenue. Rich Miner of Google commented that lots of information was accessible from the cell phone and it tied in nicely with their goal of organizing and making information accessible. In any case, with over 2.5 billion cell phones in use worldwide and growing, the market size is about 3X the number of TVs worldwide, and the opportunity is large by any reckoning.

The first question the panel considered was - why the push for an OS on mobile phones now ? The consensus seemed to be that phones have grown to become mini-PCs with many applications and power management requirements and lots of peripheral functionality, larger screens and other capabilities. With this level of sophistication and the constrained power requirements a targeted OS was required. There was some discussion on what was really open or closed. Microsoft claimed that since there were 100,000 people downloading their SDK and about 18000 apps built on their platform, they could be considered an open platform. One of the panelists pointed out that the baseband functionality in Google's Android was not open sourced for security and other reasons. Symbian pointed out that FCC regulations governing usability prevented some of the control code being open sourced. There was no closure on this discussion.

The panel talked about having the full browser or Outlook on a mobile phone and seemed to agree that it was about context and not about having the full functionality. Alan Brenner, SVP of Blackberry platforms for RIM commented that data usage was less than 10% on mobile phones today and as the usage climbed more applications would be enabled. Rich Miner's (Google) view was that today's smart phone was tomorrow's feature phone.

There was heated debate among the panelists on the cost of the mobile phone OS. One view was that it was insignificant with relation to the overall cost of the device. Rich Miner of Google pointed out that some phones which are available to service provider customers for $100 typically cost about $50 and Microsoft was charging between $10-$12 for the operating system with the Opera browser, which was not insignificant. Microsoft's Gerardo Dada responded that Microsoft provided value for the cost and that they spent significantly on R&D compared to the rest of the industry. Microsoft did acknowledge that the trend of giving away software and generating revenue from service was something that they see and have ways of addressing. Symbian's VP of US Operations, Jerry Panagrossi pointed out that free code was not necessarily good, especially if it was poorly tested. Alan Brenner quotes the CEO of Verizon saying that the return rate on open devices was over 40%, while the return rate on Blackberries was only 3%. In all, a fairly lively debate :-)

The panel deplored the lack of control of the features and settings on mobile phones today and attributed it to control of the ecosystem by the carriers and mobile phone OEMs. This was expected to reduce over time. Alan Brenner mentioned the availability of the Blackberry Unite(?) next month which would allow changing settings. Nokia's Victor Brilon mentioned that you can do this on some Nokia smart phones today by downloading software and using a USB connection. He pointed out that some of the difficulty with opening up the settings was the cost of the ensuing support requirements.

The panel seemed to agree that much of the increase of rate of growth in mobile phones would come in emerging markets in Asia and Africa with data services growing in India, China and Africa. Today with 250M phones in the US, the market was 80% penetrated. However, Andy Seybold said that could go to 300% with users having multiple devices. This is certainly true of many people I know. Though, there is the possibility of integration as with the iPhone. People certainly do not like carrying more devices than they have to.

The panel discussed the opportunity for application developers. Most of the panelist companies have active developer programs. However, Rich Miner of Google pointed out the lack of return for many application developers for mobile phones. Very few companies which were funded to do mobile phone apps generated successful exits. Part of the reason for this was the considerable fragmentation in the market and lack of opportunities for sales to end customers. (However, ring tones did generate significant revenue for some people, mostly in Asia. ) Google is giving away $10M to applications developers to write apps for Android, though ! I am sure there will be some interest in that :-)

In any case, a very interesting panel which made it clear that all the major software players were going to give of their best to control a large fragmented market.


Tuesday, November 27, 2007

Mobile Phone Operating Systems - Open or Closed ? - Part I

Today I attended a great panel session at PARC hosted by the Wireless Communication Alliance (WCA). I have been going to WCA events for many years, especially when they were closer to home at HP in Cupertino. This was clearly one of the best WCA meetings I have attended. The PARC Pake auditorium was almost packed to capacity. Andy Seybold was the moderator and the panel consisted of the top players in mobile operating systems - Symbian, Microsoft, Monta Vista, Nokia, Research in Motion (RIM) and the latest entrant, Google. RIM and Symbian were represented at the VP level ! For a complete list of the panelists, check the WCA link above.

It was a very lively panel, as was to be expected with some strong competitors in close proximity and Andy as a moderator. I was on a panel he moderated a few years back at UC Berkeley and there clearly was no lack of strong opinions :-) The Valley mobile phone company conspicuous by their absence was Apple. That was a pity, but they rarely show up for events except their own. Though, you could almost sense the industry responding to the challenge of the iPhone. Nokia explicitly mentioned that they had been beefing up their presence in the Valley. So, the Mercury News column on Sunday was close to the mark. The Valley is seen as a center of innovation and every major player wants a piece of the action. The panel discussion did touch upon this as well as the impact of emerging markets and globalization.

There were a range of interesting topics covered during the session and I want to mention the highlights, at least. However, I will save this for my next post later in the week. Stay tuned.


Sunday, November 25, 2007

Silicon Valley and Globalization

Today's Mercury News has front page coverage on Silicon Valley's gains from globalization. The article discusses the gains for Cisco, HP and other major multinationals based in Silicon Valley from global growth. The article also discusses the return of VC money flow to the Valley and points out that the valley is at the crossroads of venture capital with money flowing into the valley from all over the world and being invested worldwide.

There are some interesting statistics on the flow of venture capital to and from the rest of the world in the print edition. The charts don't show up in the link above for some reason. Perhaps, this is the most striking change from the '90s, when money flowed into the valley and stayed here. This led to the tech boom and the bust, of course. The Valley has recovered somewhat, but its far from the affluence of 2000. Perhaps, the return to glory for the valley will be in the form of the clean tech boom.

The Valley however, is still very attractive to the rest of the world. One other trend the Mercury News discusses is the ramping of the Valley presence of big tech companies like Nokia and Microsoft who seek to be closer to ideas, partners, investors and customers. As the column says, it appears the world is flat and Silicon Valley is at the center of it and the next wave appears to be clean technology. I will root for that.


Thursday, November 22, 2007

Thankful in the Valley

Its another beautiful day in Silicon Valley with blue skies and sunshine and we have a lot to be thankful for this Thanksgiving. I was thinking of such things when I read Dean Takahashi's column in the Mercury News. He says it all. The Valley cycle of boom and bust has contributed much to making it what it is. Though, I must say it was not much fun being on the bust side of it :-)

Then again, I would much rather be in Silicon Valley, than in say, Bangladesh, where people are fighting to stay alive. The poor country continually faces severe calamities such as this and struggles to get back on track. The World Bank and the rest of the world are pitching in with their help, but for those going through the ordeal life must be tough indeed. Yes, we in Silicon Valley and the U.S.A. have a lot to be thankful for.


Saturday, November 17, 2007

Hybrid Chevy Tahoe is Green Car of the Year ?

The Chevy Tahoe has apparently won Green Car of the Year ! That too at 21 mpg ! What's next, the Hummer ? I think this is where Phoenix Motorcars and Dan Elliott have sensed the market sentiment perfectly. As I wrote yesterday, Phoenix is targeting this market with their trucks and SUVs. The Green Car Journal seems to have done some thinking before giving the award. A third of the cars sold are large SUVs according to the link above, though, I am sure that number will drop if gas prices stay high. But, certainly this proves a large addressable market for Phoenix.


Thursday, November 15, 2007

Green Hummers and Zero emission SUVs ?

Green trucks, Hummers and SUVs ? Zero emission trucks ? Oxymoron, you say ? Phoenix Motorcars does not think so :-) . I had the good fortune to be invited to a talk by Daniel Elliott, CEO of Phoenix Motorcars. The talk was hosted by Fast Company , publishers of the magazine of the same name, at the Hilton Garden Inn, Cupertino. I didn't even have to drive that far for a great lunch and to hear about a great company and product idea.

Phoenix is targeting that niche space of truck and SUV owners who also want to be green. Clearly, these are not your typical Prius owners :-) . But, I was rather impressed as the story unfolded. Phoenix is an Ontario, California company. Their zero emission trucks have a range of about 130 miles on a full charge and take about 10 minutes to recharge ! They can get up to speeds of about 95 mph with a full payload and go 0 to 60 in 10 seconds. ! Not your average Prius :-) To achieve this they have a special combination of motor, battery technology and a few other innovations. The Nanosafe battery from Altair Nanotechnologies is a key component. These Li-Titanate batteries take only 10 minutes to charge from an offboard charger. They take about 6 hours to charge from an onboard charger hooked up to a 220V supply. The infrastructure deployment to make these off-board chargers available widely is an issue which will take time to overcome. Altair Nano's battery technology appears to be impressive, in that it overcomes the slow charge time problem. Apparently, they are targeting other applications such as a 4MW storage facility for windpower.

Phoenix buys the chassis from a Korean supplier and outfits it with their technology. There are two 35kWh battery packs on board to give the 130 mile range. The batteries can outlast the vehicle itself and can be recycled. They require a special connector to enable the 10 min charge. Otherwise they can hookup to the same chargers that other electric cars use. A typical charge costs about $3.70 and to get a range similar to a diesel truck probably around $7.40, compared to a full tank of gas at about $60. Very impressive economics. Even if gas prices were to fall this vehicle would be economical ! The truck costs about $50, 000, so more expensive than other trucks. But, Phoenix claims lifetime cost is about 76c/mile which is comparable to other trucks.

Currently, they are targeting fleet sales only and have customers like PG&E and NASA lined up. They plan to open up to consumers by 2009. With 17M automobiles sold in the US and 39M worldwide they have a large addressable market. Even if they sell in the 100,000 units only they expect to be profitable in 18 months. They have raised over $100 M so far. No big name VCs shown on the web page, though. They are partnering with others for nationwide distribution.

Clearly, they are playing in a high stakes game. Today's Mercury News reports on a court rejection of Bush's truck fuel standards. Schwarzenegger's shown as applauding the decision. As Dan Elliott pointed out, both gasoline based automobile and electric car camps have their own lobbies. The electric car lobby does seem to be gaining some strength recently. I remember electric car designs at MIT as early as the '80s sponsored by GM and other major car manufacturers. But, they never went far in the market :-) . Both their mileage and market clout have increased in recent years with major manufacturers introducing electric cars and hybrids and the public showing an increasing tendency to buy and drive them. Interestingly, this month's Fast Company magazine has an article on Jonathan Goodwin who claims he can get 100 mpg out of a Lincoln Continental and cut emissions by 80%. Yes, he works on Hummers too. See, the title of this blog was not all fake :-) He claims he can get 60 MPG on a H3. So, what are the major car manufacturers missing ?

The automobile industry requires deep pockets. Its not every day you see a new automobile company, Tesla notwithstanding. The last one was DeLorean and we know how that ended. But, I must say that I am impressed by Phoenix's approach of applying their innovation where it matters, and not trying to reinvent the wheels (literally) :-) Even if they do not have the muscle to set up their independent manufacturing, distribution and financing networks, they appear to be able to ship trucks and collect revenue on them. Their careful choices in product and market strategy seem viable. I hope they are successful, because it will drive the rest of the auto industry to follow. I'll wait to buy my Hummer :-)


Monday, November 12, 2007

Wild markets, tech companies and solar tax credits

The last few days have seen wild gyrations in the stock market. While there was no single day with 1000 point drops, a few successive days of heavy selling especially in tech stocks have left most Valley companies with significantly reduced market caps. Here's an assessment on day 4 of the tech wreck. Within the 15 miles from Mountain View to Milpitas we lost a market cap of at least $100B in the space of four days. Just Apple, Google and Cisco lost $30B each and there are many other big names on that stretch. Of course, there is a lot more market cap left in these tech titans and I am sure they will come roaring back. But, exactly when remains unclear at this time.

The emerging clean tech hot companies like First Solar and SunPower were hit big time losing over 14% each just today. First Solar went up over $50 on Thursday, Nov. 8th and has almost given up all the gains by today. These and other clean tech related stocks were particularly hard hit because of the rumor that Solar investment tax credits would expire in 2008 because of a pending energy bill without provision for these. Of course, these could bounce back just as rapidly should the reports prove false. But for now, the bad news just keeps piling up on an already jittery market. It would be interesting to see when all this hits bottom and starts climbing back.


Sunday, November 11, 2007

Bionic Bodies ?

The MIT Club of Northern California held an interesting panel on Semiconductor and Systems Opportunities in Biomedical Technology. The panel was comprised of folks from the semiconductor and biomedical industries and was moderated by Dr. Sudhi Gautam a surgeon turned biomedical engineer. Panelists included Stanford Professor Dr. Atul Butte, Ron Koo from Maxim Technologies, Steve Sapiro from Emotiv, a thought sensor startup and Dr. Rich Withers from Varian Inc. In the interests of full disclosure, I helped set up the panel. My motivation was to understand why the economics of semiconductor companies was not showing up in biomedical devices. The panel discussed this along with many other interesting questions.

Dr. Gautam opened the session with some statistics on the biomedical industry. 50% of all biomedical companies worldwide are in the US and over 2500 of them are in California. The Bay Area including Silicon Valley has over 700 and Sunnyvale is one of the hotspots for biomedical devices ! This is probably logical since the proximity of Silicon Valley's semiconductor industry, the medical research from Stanford, UCSF and other universities coupled with access to venture capital must make for an interesting combination. The panelists gave their view of what the next hot thing was. Dr. Butte suggested that perhaps there was more value in understanding the impact of genetic analysis than in having the analysis itself widely available with lower cost chips. The solutions which used the chips in end applications to improve a particular problem were likely to be more popular. Today this knowledge is limited. The panel considered the question of body reactions to implanted silicon sensors. The view was that much like stents have been designed with coatings which make them less susceptible to rejection, new technologies would be developed to overcome this problem.

The panel considered the question of the best mechanism to foster transfer of technologies between the biomedical and semiconductor industries. Semiconductor companies which target the biomedical space hire experts in the field to understand the space and define products. Similarly biomedical companies also sometimes hire semiconductor experts or acquire teams with this expertise, especially when developing biochips or arrays. However, they pointed to the inability to have access to specific semiconductor process technology to optimize biochips. Not many biomedical companies have the luxury of owning a fab :-)

The panel considered the impact of outsourcing technology in the biomedical industry. Today diagnosis assistance such as reading X-rays is sometimes outsourced, but its far from a perfect situation. There are also regulatory hurdles to such practice. The question of which device areas would be impacted by MEMS was answered by Alissa Fitzgerald and MIT Club officer and MEMS expert, from the audience. The primary areas seem to be in cardiac or cardio-thoracic devices.

The panel did consider the issue of cost of biomedical devices and why they are not impacted by cheaply available technology. The semiconductor component cost of many of these devices is a small fraction of the total cost. The fact that the medical device industry is not an open, competitive space is part of the issue. After the lengthy regulatory approval process, the devices are supplied to patients and are paid by a small group of insurers. The cost is added up among the many layers in the system. So, even if technology scaling of cost and performance were to be applied to these devices there would be no quick reduction in cost. This is partly the reason for the high cost of health care in the US without the commensurate benefit. Strange how a capitalistic society is not so capitalistic in some critical areas :-)

However, with access to technology much better health care is possible. The panel talked about many new advances such as robotic surgery devices which could perform much more complicated surgeries than humans could perform, with far more success. This will drive the growth of a whole new way of praticing medicine, with doctors being trained to use these devices to achieve very high levels of surgical sophistication. Intuitive Surgical and Accuray are two Valley companies which provide such devices today. Clearly, Silicon Valley is going to be at the center of such exciting innovation in the years to come.


Thursday, November 8, 2007

First Solar heats up

Solar is surely heating up. First Solar announced Q3 results of 58c EPS versus an expectation of 19c and the stock is up 30+% and over $50+. That too on a down day ! I should have listened to Gunther and loaded up on FSLR. Clearly there is demand for solar electric modules and whoever can supply it in volume is benefitting. First Solar is an Arizona based company selling primarily to Germany. It will be good to see which of the valley companies puts up competition first.


Monday, November 5, 2007

Ausra contract from PG&E - Milestone for solar thermal power

Today's San Jose Mercury News website announces a a PG&E plan to buy 177 MW of solar thermal power from Ausra's planned facility in San Luis Obispo County. I did not see this in the print edition today. So, clearly this will be big news tomorrow. The column also mentions Brightsource's planned 400 MW plant. The Governor cites the Ausra PG&E deal as an example of the power of California's AB 32 legislation. If that is the case, there will be a repeat of the late 90's Internet boom in clean tech. When some large entity such as PG&E primes the pump with such large deals the whole ecosystem responds. Getting 20% of PG&E's power from renewable sources by 2010 is a tall order.

As I discussed in my blog a couple of weeks back, the cost/kWh of most alternative energy sources, especially solar, is unattractive compared to current grid rates. However, legislative requirements for utilities provide a powerful incentive for renewable energy. Ausra is well positioned, because solar thermal power is reasonably cost effective and the company has powerful Silicon Valley backers such as Vinod Khosla, Kleiner Perkins and others. With paying customers such as PG&E and the end users such as you and I, the VCs will clearly see return on their investment. This might very well start the alternative energy Gold Rush ;-)


Extending Moore's Law to Genetic Mapping

This week the San Jose Mercury News had a very interesting article on how genetic mapping was following the exponential growth associated with the transistor density in semiconductor technology. In fact, an Applied Biosystems executive is quoted as predicting that all the genes associated with cancer would be mapped in five years. That would be an impressive achievement, especially if that led to cures for at least some of the major diseases. The computational requirements for genetic mapping, drug design and related computational biology are immense. I was fortunate enough to attend a talk by Professor Adam Arkin at an MIT club event where he touched upon some of the possibilities in this vast field. Its truly fascinating.

Talking of MIT club events and biomedical technology, I strongly encourage you to attend this event on Semiconductor and systems opportunities in biomedical technology on Nov 8th in Palo Alto. :-) An eminent group of panelists from the semiconductor and biomedical industries will discuss potential opportunities of common interest to both. Will write more about this after the event.


California Clean Tech Open Awards 2007

Its a bit late to be writing about the California Clean Tech Awards ceremony which was held at the Palace of Fine Arts on Monday, Oct 29th at the Palace of Fine Arts in San Francisco. But, better late than never. I had a vested interest in attending this event, since Ed Gunther of Gunther Portfolio and I had submitted an entry under the Smart Power category. We wanted to check out the teams which won. I must say I was impressed with the winning teams. The full list of winners and finalists can be found on the CCTO website. Lucid Design Group won in the Smart Power category and Federspiel Controls were runners up. Lucid had a web based environmental performance monitoring system for buildings and individuals aimed at energy conservation. Federspiel controls entered a wireless control system for HVAC systems.

There were six categories - Smart Power, Air Water and Waste, Green building, Renewables, Transportation and Energy efficiency. Each of the winners got $50,ooo in cash and $50,000 in services from the sponsors. The awards in each of the categories were handed out by the respective sponsors.

There was an impressive list of speakers from the US DOE, California Energy Commission, NRDC and Nth Power (a Clean Tech VC). Dave Rodgers from the US DOE stole a march by inviting the winners to Washington DC (at the DOE's expense) to present their entries before the DOE for potential sponsorship. I was also impressed by the winners acceptance speeches. They had honed their pitching skills during the summer with the CCTO's series of events preparing the finalist teams to refine their business plans for the final submission. This was one of the main attractions for us when we entered the event. The results of the process were impressive. Each of the winners were able to articulate their value proposition succinctly. From years of experience I have learnt that this is a very valuable skill to have when pitching to VCs.:-) You have them in the first few minutes or you don't :-)

From that perspective all of the finalists for the CCTO were winners. They have gained valuable insight into the process of taking their companies to the next step. The awards event also had a showcase for the finalists. The companies represented were impressive and I am sure many of these will make it even without the CCTO prizes. There was strong VC representation in the audience. The networking opportunity was great. Met Google's energy Czar, Bill Weihl who handed out the Google green building prize. Nice title to have :-) Met several folks from the MIT Clean Tech Entrepreneurship series who were volunteering to put on the CCTO. The number of volunteers for the event was impressive - well over 350. Shows the level of interest in clean technology. If some of the companies participating in the CCTO succeed, they will serve to put California in a leadership position in the clean energy movement. Even without the CCTO prizes these companies are also likely to attract much VC interest. In fact, I ran into at least one VC looking for a good clean tech opportunity and was able to introduce one of the finalists to an energy company representative. My little contribution to the clean tech crusade :-)

Sunday, October 21, 2007

Solar Energy - Heat or Hype ?

There is so much written about solar energy these days, that it almost reminds one of the Internet days of 2000. Stocks like SunPower are at 400+ PEs and new startups are getting funded in the 10s of millions of dollars. It almost begs the question - how hot is it and will the trend continue for ever? I had been wondering about this question when I got an invite to a talk on "Current Status and Future of Solar Energy" from the speaker himself, Dr. Amit Kumar. Talk about coincidences. :-) The talk was on October 17th at the PARC auditorium in Palo Alto and was hosted by the MEMS Journal club.

Dr. Amit Kumar did his Ph.D research in Photovoltaics at Stanford and Caltech in the late 80s and early 90s, and is now CEO of a publicly traded biomedical company and is on the boards of several solar energy companies. The talk was well laid out and had a wealth of data drawn from a variety of sources including Dr. Kumar's own estimates.

Current worldwide energy use is 14-15 Terawatts (TW), with the US consuming about 4 to 5 TW. Of the total worldwide energy consumption, about 12TW is from fossil fuels, 1.5TW from hydroelectric and biofuels, 1TW from nuclear and 0.2 TW from all other including solar. In 30-50 years this 15 TW is expected to grow to 30TW from population growth, emerging nations consumption and economic growth. One of the estimates which surprised me was the fact that about 3.5TW of the 4TW US consumption came from transportation related energy consumption (planes, trains, ships and automobiles). The vast infrastructure put in place to deliver oil and gas worldwide from raw material to consumable gasoline enables it to be sold at prices cheaper than most other liquids except tap water. :-)

If fossil fuels continue to be the primary source we will continue to pump carbon into the atmosphere (currently estimated at 8 billion tons/yr) aggravating any existing problems. Dr. Kumar estimates resources for oil, gas and coal to be 120, 300 and 1500 years, respectively. He then considered each of the alternative energy sources in terms of their opportunities, challenges and potential to supply the global energy requirements.

Cleaning up fossil/bio fuel use with carbon sequestration methods allows continued use of fossil fuels with less of their problems. However, challenges here are entropy, cost, capacity and leakage. Without technical breakthroughs it does not look easy. Geothermal and ocean tides have the potential to supply 70 TW, but economically feasible capacity is on the order of 2TW and installed capacity is minimal.

Hydroelectric has a gross potential of 4.6TW and installed capacity of 0.6TW in 1997 and a possible 0.3TW more production increase. Problems include capital cost and issues like the relocation of a billion people (?) for the Three Gorges dam in China. In India, I am aware of some projects shelved due to environmental impact.

Wind energy has a theoretical land potential of 10 TW and practical potential of 2TW. Offshore potential can be up to 5TW. But, wind power is intermittent, needs storage and has distributed generation restricted to some areas only. It is viable, supplying at close to grid power rates where it is deployed.

Biofuels like Ethanol need large land areas for cultivation and have energy densities close to half of gasoline and cost more in energy to make than we can get out of them. They are also water resource limited for cultivation. If all available land is cultivated 8-10 TW is possible, but practical potential is 1-2TW. Their primary attraction is being able to use the existing fossil fuel distribution infrastructure and subsidies.

Nuclear fission is a viable alternative, and much capacity is deployed worldwide and even in the US. Estimate that 20% of US power is nuclear. Waste disposal, uranium availability and weapons and terrorism concerns are major issues. To get 10TW we need 10000 plants, which seems like quite a lot to build. So, delivered capacity from nuclear is limited to the number of 1GW plants that will be built.

Solar has a theoretical potential of 120,000 TW if irradiation of the whole earth's surface is considered. Practical possibility is about 1200 TW. To deliver 3-4 TW at 10% solar cell efficiency needs land area of about 250miles x 250 miles or 62500 sq miles. Currently we have about enough solar modules to cover 50-100 sq. miles. Even this is a $30B market. So, we have a long way to go :-) Maybe, the high PE of the solar panel makers are justified :-) But, there's more to this story. One of the limitations of solar energy is that its not very concentrated. Rooftops and other viable sources can only provide about 10% of the surface area required. The rest has to come from generating installations which can be capital intensive. One can see why many startups are targeting this space. Capacity is increasing, but nowhere near what is required. Silicon may be a limitation even at current levels.

One main issue with solar energy has been the cost. While coal, gas, oil, wind and nuclear have generating costs between 5-8 c/kWh, (with coal the cheapest at 5c/kWh), solar energy costs about 25c/kWh. This does not even include the costs for storage and distribution. Dr. Kumar quoted his thesis advisor, who compared funding solar energy generation to funding the Apollo mission if Southwest were to provide $29 shuttle missions to the moon. Clearly, in spite of these economics, many VCs are pumping billions of dollars into solar energy. Other challenges for solar include inverters for DC-AC conversion and storage.

Cost may be reduced with scale, manufacturing improvements and new types of cells. Efficiencies range from about 25% for crystalline silicon to about 15% or lower for CIS/CIGS, CdTe, amorphous silicon and nano TiO2. The market is dominated by single crystal silicon (92+ %). followed by CdTe, CIGS and particle based cells. Exotic structures like tandem cells and paints are in their infancy. Most of the non-Si technologies have still not achieved the scale of manufacturing capability that is required. Till they do, its too early to make a call on their viability and scaling possibility.

New opportunities in solar include new types of cells and structures, storage and inverters, thin film material and cells, silicon supply and other materials, installation and repair, electric vehicles and catalysts for hydrogen evolution. Cost reduction is a major challenge. The environmental impact of some of the technologies used is another.

Dr. Kumar concluded that in the midst of a global energy crisis we are forced to look at alternatives to fossil fuels and solar is clearly one of the better alternatives. But, we also need massive changes to our way of life, conservation and more efficient products for lighting and transportation and an effort in alternative energy bigger than the Manhattan and Apollo projects. Dr. Kumar can be contacted at amitoptigon (at) hotmail (dot) com.

I am glad that I attended this talk, because it gave a broad overview of many different alternative energy methods and their relative impact and potential. However, the answer to the question of how much of the solar buzz is hype and how many bumps there will be in the road between now and when solar energy is a viable energy alternative to fossil fuels, is still elusive. With oil close to $90/barrel, its easy to fund alternative energy work. But, what happens if oil were to go back to $20/barrel ? Maybe with the impact of global warming being felt worldwide, there would still be an impetus to drive alternative energy. But, with more oil accessible from the less ice-locked Arctic and Greenland, does it drive a vicious cycle of more oil based economies ? :-)

If I were to guess, the VCs will fund more solar energy companies. Silicon Valley will continue to be at the center of much of this action. There will be a few phenomenal successes, as there were in the Internet boom days, and there will be a few fadeouts. However, there will be much energy generated(pun intended :-)), lots of action and excitement and a few millions to be made for the entrepreneurs and investors. The valley will have contributed to global development in yet another realm, maybe with more impact than the previous semiconductor and internet cycles. The more things change, the more they remain the same :-).

Saturday, October 6, 2007

How Green is the Valley ?

If Mayor Chuck Reed is to have his way, very green indeed. He has very ambitious plans to make Silicon Valley, or at least San Jose, greener than it already is. His plan covers it all - cut energy use in half while the population grows by 20% in 15 years, add 25000 new clean tech jobs, add 100, 000 new trees and 60 new trails, convert all city waste to energy by 2022, have 100 million gallons of waste water be recycled and have the entire city fleet of vehicles be run by alternative energy. If he pulls off 25% of his ambitious vision, he will have set up a model for much of the rest of the world to follow and establish himself as a politican of national reckoning. It also makes excellent business sense. It will draw many manufacturing intensive clean tech jobs to Silicon Valley and further drive its growth. So, I, for one, hope he pulls it off. That would make the Valley a world leader in a sustainable future. Companies like Nanosolar already have plans for manufacturing in San Jose and this could drive the growth of a clean tech ecosystem. This would be karmic compensation for the early semiconductor fabs which arguably generated not so clean side effects. :-)

Meanwhile, Ed Gunther of the Gunther Portfolio forwarded me this interesting tidbit on the economics of solar technology in developing countries. Solar panels in public installations are being stolen. Readers will find this amusing, and something most solar experts had not counted on in solar technology expansion. But, that's the way technology is sometimes viewed by the poorer segments in a developing nation. Arguably, India is no longer a developing nation. But, there is significant poverty still in the country. I remember hearing stories of people stealing copper strips used in lightning conductors on tall public buildings, when I was a student. But, copper has gained so much in value that these thefts occur even in Silicon Valley these days :-) Clearly, there is even more incentive to cost reduce solar technology. :-)

Ed also sent me this interesting link from MIT on how students can prepare themselves for a career in solar energy. To me this is rather uncharacteristic of MIT :-) MIT rarely handheld students, lest they not learn how to blaze trails. But, the Laboratory for Photovoltaic Research has chosen acceleration of the adoption of PV as its mission, and I say more power to them :-) I would love to see MIT be the leader in yet another "hot" technology :-)


Monday, October 1, 2007

Clean Tech, Mergers and Acquisitions etc

Its been a while since I blogged, what with travel and a hectic schedule, but its time to get back to writing. Over the summer, Ed Gunther of Gunther Portfolio and I submitted an entry for the California Clean Tech Open. Our entry was in the space of waste heat conversion to energy. It was a lot of work and we got a provisional patent out of it, but we did not quite make it to the finalist list. Our idea was great, we think :-), and I am sure one of these days we will see such products in the market. The competition was stiff and the winners for the CCTO will be announced at the end of October and I think we will see some excellent new companies come from them. This year Forbes covered CCTO and some of the finalists got some excellent visibility.

Meanwhile, Silicon Valley is on a roll. The pace has picked up not only in the Internet space and Web 2.0, but in alternative energy too. Nanosolar raised $100M in June 2007 and is setting up manufacturing in San Jose and in Germany. Not to be outdone, another thin film CIGS company SoloPower of Milpitas raised $30M in July. Its interesting how the Internet and alternative energy fields intersect. The Google founders are investors in Nanosolar. But, that's always been the story of the Valley. The semiconductor entrepreneurs of the previous generation from Fairchild, Intel, National Semi and others became VCs at Kleiner, Sequoia and other firms and they invested in a host of new technologies and companies including Google and Yahoo, which have in turn grown to become giants of their own. If anything, the pace has accelerated in recent years. The Valley is as fertile in innovation as it was in the days of the fruit orchards of the early 20th century. Meanwhile, Fairchild has turned 50 and the Valley is moving even faster with its innovation. Sometimes the more things change, the more they remain the same, however. One could look at the new alternative energy companies, especially in solar energy as related to semiconductor technology.

Mergers and acquisitions have always been an integral part of the Valley scene. On September 20th, the MIT Club Semiconductor Entrepreneur Series hosted an event on " How to Negotiate an Acquisition Term Sheet" at Cooley Godward in Palo Alto. This was an interesting event where two Cooley attorneys, Jenneifer Fonner DiNucci and Jane Ross negotiated a hypothetical acquisition term sheet. They covered the highlights of the negotiating strategy and the structure of the term sheet. There is wide variation in these deals and the devil is in the details. Interestingly, they pointed out that the bigger billion dollar deals tend to be simpler in structure than the smaller million dollar deals. The whole discussion and audience participation was very illuminating and covered the acquirer, acquiree, VC, investment banker, attorney and employee perspectives.

Talking of billion dollar deals, sometimes they don't work out the way everyone wants. Today Ebay announced a writedown of the Skype acquisition. The co-founder and CEO, Zennstrom apparently leaves with an accelerated payment. The earn-out agreement on that term sheet must have been interesting :-) Meanwhile, Zennstrom is probably concentrating on his next venture Joost and a spectacular exit for it as well. Its interesting how quickly Scandinavia has adapted to the Silicon Valley model :-)


Tuesday, June 5, 2007

Google acquires Peakstream ?

This came as a surprise, but Google has never been predictable. The Register, which comes up with interesting "early news", reports that Google has acquired Peakstream. Peakstream, of course, is the company which started out targeting parallel computing on graphics chips and then rapidly expanded their tools to multicore x86 chips and other parallel systems. The team, the VCs, the Stanford connection and the promise of higher performance must have been a powerful mix which attracted Google. There is more on this from Reuters, which is usually more reliable than the Register. I have been a big fan of the Register and its relative the Inquirer, but their news is not always completely accurate. Their writing is however, highly entertaining and departs from the staid press prose. They do get a high percentage right well ahead of the rest of the channels :-) I am sure more confirmation and details will be available in the days to come.

This is a good example of how the Valley, startups, VCs and their networks work. I am sure if Peakstream was located in India or Australia with the same technology, this acquisition may have worked more slowly or not at all. But, then maybe they have the technology because they are in the Valley ? :-) Clearly, the rest of the world may take issue with that :-)

Interestingly, the Register also has a spotlight on shades of 1998 :-) Some interesting analogies !


Tuesday, May 22, 2007

Portable Power Sources

The MIT Club of Nortern California's Semiconductor Entrepreneurship series hosted the third event in its series on Portable Communications on May 16th, 2007. This panel discussion focused on Portable Power sources and had an impressive lineup of speakers. The panel was moderated by Scott Chou of Gabriel Venture Partners and consisted of Dr. Ross Dueber, CEO of Zinc Matrix Power, Carl Schulenburg, CEO of PowerMems, Dan Squiller, CEO of PowerGenix and Dr. Steven Visco, Founder and VP of Polyplus battery. Scott Chou presented a concise overview of the landscape and challenges in portable power generation and storage. Each of the panelists described their unique power generation and storage mechanisms - a truly impressive array of technologies.

Scott Chou pointed out that Clean Energy was rapidly gaining favor in the VC world with $2.36B in funding of 124 deals in 2006 vs $820M and 74 deals in 2005. Of this funding Ethanol/biofuels/clean coal topped the list with solar a distant second in total funding, though the number of deals was 34 to 27. He then discussed the impact of energy density. Diesel gives about 11000 W-hr/liter while methanol at the low end is only about 4400 W-hr/liter. Other biofuels span the range. In comparison a Li-ion batter is about 400 W-hr/liter, though its not quite a useful measure for this application. He also touched upon the negative impacts of biofuels in driving up the costs of food crop and the search for non-food crop as sources of biofuel. Interestingly algae topped his list delivering 95000 liters of oil/hectare with the nearest competitor being chinese tallow at 6545 liters of oil/hectare. So, the algae win hands down :-) This was a nice overview of the clean energy scenario as it stands. Thanks to Scott for all the data.

The panel's focus of course was on portable power sources. The worldwide battery spending is on the order of $60B, with $20B of that going to rechargeable batteries. So, it certainly is not a niche market. Zinc Matrix appeared to be the leading contender for the longest lasting batteries for laptops and other portable devices. No wonder Intel Capital is an investor. However, the PowerMems technology seems to challenge it with charges lasting for the lifetimes of the device, on the order of years. However, the application is for relatively low power wireless sensor devices requiring power in the mW range. Their technology harvests ambient energy from vibrations, heat and solar energy and stores in a 3D nanostructure battery. Their focus seems to be mostly on the broad spectrum efficiency of power generation and less on the storage, though. Polyplus has interesting technology where they focus on Lithium-seawater, Li-sulfur and Li-air batteries. You would expect that seawater, despite having the advantage of being a plentiful electrolyte, would pose some corrosion problems. However, the key to their technology is the ability to keep the Li anode chemically protected while being electrochemically active. They claim energy densities of 6000 W-Hr/liter. Then there was PowerGenix, who developed next generation Ni-Zn batteries. They claim to be cheaper and smaller than Ni-Cd and Ni-Mh batteries and promise an upset in the rechargeable battery space.

Overall a very interesting panel, with fuel cells being the only key missing technology - the Ultracell panelist could not make it. Clearly, battery technology is the key challenge in portable devices. Device performance follows the almost exponential semiconductor scaling and the power requirements follow, but battery technology barely keeps up a linear improvement in performance and almost no cost reduction. Truly revolutionary approaches are needed if the status quo is to budge by much. Certainly this panel provided some interesting approaches to this very challenging problem.


Thursday, May 17, 2007

California Clean Tech Open

The 2007 California Clean Tech Open (CCTO) was officially kicked off at San Francisco City Hall, Tuesday, May 15th with a host of luminaries present. For those who are not aware of the event, this is the second year of the event. The first event last year was the brainchild of the MIT Club of Northern California's Renewable Energy and CleanTech Series. For a description of last year's events you can find the report at the CCTO website. The event is a business plan competition for clean technology. All it takes to enter is a 3 page executive summary by June 30th and a small entry fee. Prizes are awared in six categories with prize sponsors ranging from AMD, Google, Lexus, PG&E, SDG&E, SCE and ENVIRONFoundation.

The kickoff event itself was quite interesting. An impressive lineup of speakers and a panel discussion was all contained in a hour and half with a great networking reception. For a complete list of speakers see the link above. The panel discussion, very ably moderated by Kerry Dolan of Forbes, gave an opportunity for senior executives from the sponsors, SDG&E, SCE, ENVIRON Corporation, PG&E, Google, AMD and Lexus to talk about their initiatives in Clean Technology.

Brad Barton from the US Department of Energy spoke of the strong interest and initiatives in alternative energy programs at the DOE. Bob Cart, CEO of GreenVolts who won the Renewables Prize in 2006 described how they entered the CCTO with a summary and ended up with a complete business plan, funding and support. The company has since raised $1.5M in VC funding. Matt Caspari, CEO of Aurora Biofuels who won Transportation Prize first runner up did even better with $5M in VC funding. Raj Atluru, Managing Director at Draper Fisher Jurvetson gave a VC perspective of interest in clean technology. He talked of the tremendous growth of interest in clean technology funding among VCs. His particular focus was on technologies improving efficiencies of clean energy generation.

The closing speech by John Garamendi, Lt. Governor of California was frank and stirring. He pointed out that the innovation spurred by the CCTO and entreprenuers in California solved only part of the problem. Without serious policy changes to address global warming, these innovations would not address the whole host of problems generated. Some of these issues, where a few inches of increase of sea level would salinate major sources of fresh water supply in California, or where the rise in temperatures could lead to tropical parasites and diseases could not be fully addressed by these innovations. So he exhorted the public to push for major policy changes to address the larger issue.

The networking reception which followed was very good. Many of last year's winners were present to discuss their companies and technology. I had an interetsing discussion with Dave Culp, President of KiteShip which provides wind power assist for ships. He was part of the America's Cup design team in 2003. It will be interesting to see who the winners are for 2007. I am tempted to write up a 3 page summary by June 30th. Now all I need is a good clean tech idea :-)


Saturday, April 28, 2007

Mars Rover Mission at the Tech Challenge

Today was D-Day for the teams competing in the Tech Challenge and that included Arjun's team, The S.A.G.A of the Flaming Chicken (don't ask me why :-)). The challenge was modeled on the Mars Rover problem of getting out of a crater. The design problem consisted of a drop of the device from a 12 ft height to land on a strip of carpet (the crater) and then ascent of a steep (60 degree) incline to get to the top of the crater. There were two sets of teams, grades 9-12 in the morning and grades 5-8 in the afternoon. All told there were over 190 teams from schools all over the Bay Area. There were a wide range of devices ranging from very sophisticated climbing robots with cushioned landing support of various kinds to even manual jump rope based devices. The best thing about these challenges is the variety and creativity they generate. The kids have great fun coming up with interesting devices, names, themes and delivery mechanisms. The Tech Challenge team also sets up the judging to be as broad and inclusive, and as encouraging as possible, to appreciate the effort the kids put into the contest.

For the S.A.G.A the day did not start off too well. True to form S.A.G.A had come up with another Jules Verne like device held in air by helium balloons and propelled by four electric motors driving large propellers as directional thrusters.

One half of the team went to fill the balloons with helium for their device while I carted the rest with their device and the cheering squad to the Tech Museum. We got there well in time and checked in. The balloon squad checked in a half hour later and unloaded the balloons and then disappeare dto park their cars. Another half hour passed and two of the team was still missing. Closer enquiry revealed that one of them was running out of gas in his car (a '50s El Camino) and had gone on a refuelling mission. Finally with about an hour to go before the contest closing all the members were accounted for. Then they discovered that they had forgotten their biography forms, including the one I had painstakingly written, at home.

Well, they went for it without the forms. They attracted a lot of attention with the device. A lot of other kids and curious parents came and quizzed them about their device. It was one of the few non-robotic, non-remote controlled devices around and certainly the orange balloons, yellow t-shirts with chicken cartoon faces for the team and one of the team members dressed as a white chicken had some visual impact. The device survived the 12 foot drop aided by the helium, but the propellers were not very effective as steering devices and the device did not make the landing on the ramp within the prescribed three minutes in spite of a cheering crowd. So, I believed that after three winning years they would have to take one year without a prize. The team went on with their interviews with the judges and came back rather enthusiastic in spite of the setbacks. They decided to give away the balloons to the small kids in the audience. This of course, won them some brownie points with the crowd.

The Tech Museum hands out about 18 awards for each section, roughly 1 in 5 teams entering get some kind of award. The awards started with a good number going to Cupertino High School (the SAGA's school) and almost an equal number going to rival Monta Vista. Imagine my shock when the style awards were announced and the S.A.G.A got the first one of two! You can check out all the award winners here. You just have to click through each one patiently. The team had pulled it off for the fourth year in a row. Their team work and enthusiasm had converted almost certain defeat into victory.

The final tally on the awards was Cupertino High 6 - Monta Vista 6. Rather impressive, because I think Monta Vista is academically a superior school and certainly more competitive. But, certainly the Cupertino High teams were tough competitors too. I guess a lot of the credit goes to some teachers like Chemistry teacher DeMuth and Biology teacher Ujifusa who encourage their classes to participate and award them class points for participation. Both teachers were there in person during the weekend cheering and capturing the events on videocam. That's dedication in teaching for you. I guess they are some of the few along with the organizers of the Tech Challenge who impart the spirit of innovation and a love of engineering and creativity to our children in Silicon Valley.

To Melissa McAlexander, Brittany Sabol and others at the Tech Museum who run the Tech Challenge, I can only say thank you for helping bring the spark of creativity to the kids in Silicon Valley. I am rather proud that some of the Tech Challenge organizers are also MIT alumni, because, at least in part, I am sure, they drew some of their inspiration from the other Tech. I am proud to have been associated with the S.A.G.A. of the Flaming Chicken these last four years. They grew from a group of friends who dreaded technology to some who dream of taking at least an engineering minor in college. When I look back on these times, I am sure I will say these were the good old days, and I am sure the kids who participated in the Tech Challenge will say the same.


P.S. I started writing this on the 28th of April, but just finished it today, May 6th :-)

Friday, April 27, 2007

20th anniversary of the Tech Challenge

The Tech Challenge is an open ended design contest for kids in grades 5 through 12. The Tech Challenge is run by the Tech Museum of San Jose and is in its 20th year. The Tech chooses real life problems like floods, forest fires or space missions and develops a model problem which has some elements of the original problem. However, the model problem is constructed in such a way as to allow multiple solutions limited only by the creativity of the entering teams. This year's challenge is titled Mission to Mars.

I have been associated with the Challenge since 2004, when Melissa McAlexander, who runs the Tech Challenge, roped me into volunteering as an advisor to teams from Lowell Elementary in San Jose. The challenge that year was Pick a Pike. There were about 30 kids from Lowell in our group assisted by 5-6 advisors. Most of these kids had never entered a design contest, let alone win a prize. We spent about 10 to 12 weeks with the kids helping them understand the challenge and getting them to think about ways of solving them. The kids formed about 5 teams and played a bit, fought a bit, and fooled around a whole lot. In the end, though, they did come up with some rather clever solutions which caught the pike - plastic fish floating in a tub of water. When 3 out of the 5 teams won prizes, their joy knew no bounds. For the advisors it was an exhilirating experience.

The same year, my son Arjun and his friends, who were in Cupertino High decided that they also wanted to participate in the Tech Challenge and I ended up being nominated their advisor too. This was quite a different kettle of fish. High school kids rarely want any guidance or advice. They just wanted money for the supplies and to be driven to places where they could buy stuff. Their design was a catapult which looked like a medieval flame thrower. It caused great excitement among the audience in its operation because it was powered with bungee cords and tended to be dramatic in its launch, when it threw a net into the tub to catch the fish. Strangely enough, they went on to win a prize that year for the "Most Courageous Team".

In 2005 the challenge was Battle the Blaze. Arjun and his friends put together yet another medieval looking device and and again won an award for "Simple Elegance". The team had renamed themselves as The S.A.G.A of the Flaming Chickens. One of the team members designed some rather cool T-shirts for the team and another dressed up in a yellow chicken suit for the event. In 2006 the challenge was Fight the Flood. The team stuck with the same name and came up with a strange manually driven conveyor belt which scooped the sand. They got an award for Teamwork. All along that was what they excelled at.

They have a team again in 2007, with most of the original members. They have always considered themselves "tech challenged" and worked at coming up with solutions low on technology and high on creativity. Rather, odd for Silicon Valley kids, at least the technology part. Over the years I have seen them goof off, fight, slack off, put in last minute efforts and come up with crazy ideas. But, in the end, they have enjoyed the process and learnt a lot from it.
The team has always worked well together and enjoyed solving the challenge together, but I notice a definite change in their attitude towards engineering and technology. They seem to have developed a genuine liking for it. Even my 9 year old, who is a constant, and sometimes unwelcome, supporter and critic at their team meetings is inspired by their efforts. Truly, the Tech has done something right in inspiring creativity, teamwork and a love for engineering and design in kids. Certainly from all accounts in the press, the US is falling behind in technology education. But, in my experience from the last four years, the Tech Challenge seems to have found the magic recipe for teaching creativity and engendering a love of engineering in kids.

Tomorrow is D-Day at the Tech Museum where the kids will bring their devices for the Challenge. It is bound to be a high energy and fun day as in past years. I am looking forward to it. Regardless of whether Arjun's team wins, I am sure they will have a lot of fun and so will I. For me, it is the last year I will be part of their team as they participate in the Tech Challenge. Its my way of rejuvenation and bonding with my son and his friends before they go off to college. Fortunately, Krishnan, our younger son will be able to sign up for the Tech Challenge in a couple of years, to help keep me continually young. :-)


Sunday, April 22, 2007

Location based services, applications and products

The Wireless Communication Alliance (WCA) held a panel discussion on location based services, applications and products on Tuesday, April 17th. The WCA is a non-profit organization which hosts some very good events on wireless technology in Silicon Valley. Location based means that the device has the capability of knowing its own location. One of the more common means by which this is achieved is by using a GPS (Global Positioning System) receiver on the device. The initial GPS satellites were deployed by the US Department of Defense and they are continually monitored and maintained by the DoD. In recent times the technology has seen rapid deployment in commercial devices such as cars, cell phones etc due to the availability of low cost receiver ( sub $5) devices.

The panel consisted Mike McMullen, VP, Sprint PCS, Jaap Groot from Tedyo Holding Inc., Greg Turetzky from SiRF, John Ellenby from GeoVector and the Director of Marketing from Loopt. They were pretty unanimous in their opinion that every mobile device would have location based capabilities very soon. SiRF is one of the earliest semiconductor companies to offer discrete GPS silicon. For cost, power, accuracy and availability reasons, the technology has been slow penetrate the cell phone space. The main chip suppliers for GPS are TI, Qualcomm and SiRF. In spite of the Federal mandate to associate a physical address with the telephone number of a person calling 911 in the US, GPS is still not universal on all cell phones. The mandate is met in different ways by providers. Some providers who have GPS in all cell phones meet E911 requirements indoors by cell tower triangulation and outdoors by GPS. However, cost and accuracy limit the capability. Today most GPS enabled devices cost around $200. When the chip costs drop to $1, significantly more devices will be enabled.

As one of the panelists quoted an ex-Trimble employee, " every object has an inherent right to know where it is". Accepting this thesis, one can easily see a wide range of applications for location based services such as - finding devices not in your hand, finding friends (who want to be found :-)), emergency services, increasing what you can see beyond what is possible now and so on. Today from a service provider's point of view, the cost to find the location of a friend on the network is about 20c. Loopt, a Sequoia funded startup, for example, sees a wide range of possibilities for social mapping of friends. GeoVector's technology adds direction to position information thus enabling a wider range of possibilities for location based services. They claim to "enable finding stuff where you are not and getting to it".

As with most technology, promise takes a long time to deliver. But, it certainly appears that a veritable explosion of location based devices and services are on the horizon. Soon, we will be expecting location capabilities on every reasonably valuable device we own from cell phones, to cameras and even sneakers, not to mention embedding this capability on pets and children. Surely, one is led to believe that Silicon Valley and the Bay Area will once again be a prime mover in this high potential space, if one follows the example of SiRF, Loopt and GeoVector.


Wednesday, April 18, 2007

MIT Club event on Communications in Emerging Markets

The MIT Club Semiconductor Entrepreneurship Series hosted a panel on the Future of Portable Communication in Emerging Markets on Thursday, April 12th. This is the second in a four part series on the Future of Portable Communication. As with the other events in this series it was hosted at the offices of Cooley Godward Kronish LLP . This, of course, means the food and drinks are pretty good ;-) In the interest of full disclosure, I helped with the planning of this panel.

The panel consisted of John Gardner from Nokia Growth Partners, John Sherry, Director of Social Science Research at Intel's Digital Health Group, Kristin Peterson, Co-founder and Chief Development Officer for Inveneo and Michael Kanellos, Senior Editor at CNET The panel was moderated by Julie Ask, Senior Research Director at Jupiter Kagan. The diverse panel had some surprising agreement on many things. All of them agreed that cell phones beat PCs as communication devices in emerging markets by a large margin. They mostly agreed that this was due to cost rather than ease of use. John Sherry talked about Intel initiatives targeted at emerging market applications for PCs such as ruggedizing, dust proofing, using alternate power sources etc. However, sometimes these led to increased cost which made the devices less attractive in these markets. Also, it was incorrect to assume that all customers in emerging markets wanted the lowest cost devices. There was significant demand for higher end capabilities.

Mike Kanellos described the range of uses these devices can be put to in emerging markets. In countries in the Middle East with large immigrant populations from India and Phillipines, PCs with video conferencing capabilities in Internet cafes are used to visually communicate with families back home. Cell phone services are used to transfer money home at much cheaper rates than possible with banks or financial service brokers. Overall PC penetration in the Middle East is very low, less than 20%.

Inveneo's Kristin Peterson described their observations from their efforts in Africa. Inveneo is an unusual startup - a nonprofit social enterprise aimed at connecting villages around the world. In many of these countries, communication can make dramatic differences in the lives of people in villages. However, most of them cannot afford expensive solutions. So, state of the art technology is mostly available as a shared resource. Even what we take for granted and available cheaply at Fry's in Silicon Valley may cost several times more by the time it makes it to a remote part of Africa. However, the effect of small things such as being able to communicate with a market in a neighboring village to find out that the price of crop is higher there may make a considerable difference to a poor farmer trying to sell his produce. He may be willing to travel the extra miles necessary to get the price differential.

While at the event, I met Hans Robertson of Meraki, a startup with the lofty goal of bringing Internet access to the next billion people. Their idea is to have small low cost wireless devices which can be added incrementally to form a mesh network. While the idea of mesh networks itself is not new, their take is on the ease of use and low cost of deployment. So, someone with access to the Internet could quickly deploy a wireless network and provide access to those who don't. Though, I am sure the service providers would want a cut of it, there is still room for enterprising entrepreneurs in developing markets to create small businesses and be the local ISP ;-)

While we in the Valley are in a race to provide the latest in technology, the rest of the world, especially the villages, are struggling to improve their lives with what technology they can lay their hands on. To them technology is not an end in itself, but a crucial means for improving their lives. Clearly the rate of adoption of technology is much slower at the fringes than at the center of the vortex of technology. :-)


Thursday, April 12, 2007

MIT Club event on Energy Storage

The MIT Club of Northern California's Renewable Energy and Clean Technology Series hosted a panel on Energy Storage at the PG&E auditorium on 4/11. As with most MIT Club events the panel was very good and the audience very engaged. Even the Thai food served was pretty good :-) Most MIT Club events are hosted in Palo Alto, but this was in San Francisco due the PG&E sponsorship. This is a bit of a drive from Cupertino, but its always fun going to San Francisco. The speakers included Dan Rastler from the Electric Power Research Institute, Dr. David Mills, Chairman of Ausra Inc., Mike Gravely, Research Program Manager with the California Energy Commission's Public Interest Energy Research Program and Rick Winter a consultant with Distributed Utility Associates.

In the pursuit of alternative energy solutions we don't often hear about energy storage. Interestingly, for the public utilities like PG&E and for alternative energy providers it is a very important issue. In the US we rarely have load shedding or blackouts, but in countries like India where this is common homeowners are very used to backup power supplies, mostly made up of lead-acid batteries. This is indeed a common and cheap storage mechanism as the panelists pointed out. The target for storage technologies is $150/kWh and currently most of them are 2-5x the target. Dr. Mills talked about Ausra's Concentrating Solar Power, which uses solar power stored as superheated steam and recovered using steam turbines. He claims over 95% efficiencies for the storage part. However, the technology requires a lot of area and is targeted at medium to large installations, O(MWatts), and not for residential or portable storage. The interesting technologies which are suitable for residential customers are lead-acid mentioned earlier and Lithium ion batteries. Yes, the same battery technology used in laptops and MP3 players. Due to mass manufacturing planned for this technology to address consumer markets, this will be a viable energy storage mechanism for larger applications, approaching $250/kwH in cost.

Mike Gravely talked about research programs funded by the State of California on renewable energy projects. This is the State of California's effort to encourage the development of renewable energy. It is seed money available to businesses and individuals to develop their ideas in the space. The grants are awarded every 4 months based on proposals received. The process appears easier than trying to get seed money from angel investors, if you have a good idea. Its only fitting that the State of California encourage innovation as an angel investor :-)


Tuesday, April 3, 2007

Al Gore and Democratization of Technology

The Embedded Systems Conference is going on at the San Jose Convention Center from April 3rd to 5th. I happened to get an exhibits pass and made the most of it today. One of the perks was listening to a keynote by Al Gore, the man who was to be the next President as he himself put it. Its been more than 10 years since I listened to him speak live. The last time was at my graduation at MIT. I wrote about this momentous occasion back in February. However, this was a very different Al Gore than the one I heard then or on TV during the 2000 elections. He was very relaxed, self-deprecating and really did seem to be passionate about his vision. :-)

He spoke about the difference between flying on Air Force 2 and having to take off his shoes when he boarded a plane these days. He also talked a fair bit about technology, global warming, outsourcing and the short term point of view which we seem to be adopting in the US these days. He compared our generation to the "Greatest Generation" which returned from saving the world from fascism and helped reach out and rebuild the enemy with a moral authority, so that there was greater wealth and stability all around. He described a vision where we had the opportunity today to use technology and policy to solve the world's very real global warming problems and create wealth and jobs. Where we saw a crisis today, he pointed out that it presented both danger and opportunity. He pointed out that seizing this opportunity would require taking a longer term point of view and relying on a moral compass.

Just judging from this one speech, I am pretty sure he would win the election this time around if he chose to run, though I am not sure Hillary Clinton or the Republicans would be too happy about it. Of course, if he wanted a sympathetic audience, there's nothing to beat a Valley crowd. Which might explain why he keeps talking at all these Valley events :-) However, I do believe that he may have a tougher time convincing the larger US population on the moral compass and longer term points of view. The world seems to have changed much in fifty years and the idealism of the '50s and '60s, seems to have dimmed a bit. But, who knows, Al Gore may just be the man to reignite it. He certainly seems to glow with a new found passion and vision.

Sunday, April 1, 2007

Springtime in Cupertino

The signs of spring are everywhere in Cupertino and the rest of Silicon Valley. The fruit trees are in bloom and the weather is sunny and pleasant. Little wonder that Apple has launched the long awaited AppleTV and is poised to deliver the iPhone in June. The orchards of Cupertino have historically delivered in the Spring :-) Even if this were not one of the foremost technology hubs of the world, its still a lovely place to be.

Here are some images of springtime in Cupertino, some from my backyard.


Tuesday, March 27, 2007

New day, New blog

This is an attempt to restart with a new blog, since the last one seems to be strangely ignored by all the search engines :-) We'll see how this one progresses. For those of you interested, you can find the old blog here. That blog's claim to fame is that its one of the few to have beaten all the search engines :-) Try typing the blog name into any search engine :-)


© 2007, 2008 Madan Venugopal    All rights reserved.