Posts Tagged ‘network externalities’

Friedman and I get Wired – an electric combination

December 11, 2008

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

December 8, 2008

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.

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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.