Taking charge in a new electric world

As I said last week, a big strategic challenge for any business is recognising shifts in the external environment which may represent threats or opportunities to existing sources of income.

One clearly declining ‘product’ in the face of technological change (i.e. the rise of mobile phones) has been the public phonebox.

It’s very cool to see a telecoms company thiking laterally about this costly legacy infrastructure. Telekom Austria has started converting some of their phoneboxes into recharge stations for electric vehicles.

How clever to tap into a hot trend early. Phoneboxes are likely to be in high-traffic areas, are hard for NIMBY residents to object to (given they boxes are already in situ), and may well have some of the power infrastructure (they are lit at least).

While I have little-to-no faith in Aussie equivalent Telstra being so proactive, this does strike me as an example Better Place should be looking at.

What other public infrastructure could be adapted to better/greener use?

h/t: Springwise

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Agassi talks up a Better Place

You may remember my earlier posts on the Better Place electric car scheme (1, 2, & 3). Well, now that WordPress allow us bloggers to insert videos from TED easily, I thought I’d share an 18 min vid presentation from Better Place founder Shai Agassi:

He does a great job of outlining the economics of his model, and addresses some of the typical objections to this idea. He continues to highlight the linkages needed (between his firm, auto manufacturers, techologists, governments etc.). Let’s hope (for his sake, and perhaps ours) these cooperative endeavours continue.

And he mentions Australia…

Friedman and I get Wired – an electric combination

New York Times op-ed dynamo and Flat World zealot Thomas Friedman has joined me on the Better Place electric car bandwagon – see his discussion of the consortium’s expansion (and my post on them earlier this week).

I also found a lengthy Wired magazine profile of the man behind the scheme. It certainly sounds audacious yet practical. The article provides a lengthy explanation of the components of the puzzle (click on the figure above for an explanation). There’s a video explanation of the Israel rollout below.

The challenge for firms is to find where they can best contribute to or benefit from such a different set of infrastructure and behaviours. What possible complementary products can you foresee?

Network externalities & electric cars

Further to my post of last week about US electric companies potentially boosting the sales of electric cars through bulk orders, the state of Hawaii’s has endorsed a proposal to develop the network of recharging stations necessary for large-scale adoption of the technology.

Hawaii joins a list of countries and locations reportedly jumping on board, including Israel, Denmark, San Francisco, Renault-Nissan, and Australia (through yet another Macquaire consortium).

The driver of all this is Shai Agassi and his Better Place startup. The firm clearly has a very strong grasp on the need to build partnerships when dealing with products so reliant on network externalities. Put simply, unless consumers can be convinced that shifting to electric vehicles is not a hastle, then most won’t bother. Likewise, until they can be sure there will be enough consumers, most providers of the necessary infrastructure, like “filling stations”, won’t bother either. Better Place is trying to break this impasse. Now let’s just hope they are backing the right technology, and also, are not just building monopoly via technology lock-in.

Avoiding too much of a demand shock

There was an intriguing piece in the Wall Street Journal a couple of weeks ago flagging the prospect that US electricity suppliers may place large bulk orders for plug-in electric cars (in the tens of thousands).

The motivations appear twofold and are relevant examples of firms trying to take their destiny into their own hands (or to influence their industry environment in a strategic management sense).

Firstly, the utilities firms are seeking to drive (ouch, nasty pun!) producers towards this option by subsidising them (partially) through the difficult embryonic loss-making development stage. Clearly the electricity suppliers see these vehicles, and the firms that produce them, as complementors, with substantial scope to increase the demand for their product (presumably at the expense of the oil companies).

Secondly, the electricity suppliers are seeking to better handle any subsequent demand shock (oh, it’s pun central!) that will surface if such vehicles become commonplace. The article notes the significant dramas caused by the adoption of air-conditioners (which shifted demand spikes from winter to summer). The utilities firms are being suitably forward-thinking in exploring the impact of overnight recharging. Perhaps it will also allow them to have some collective impact on the technology developments themselves.