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The Chamath Palihapitiya Experience

September 12, 2013

Former Facebook exec, and now investor, Chamath Palihapitiya was interviewed in Marin County at a lunch that I joined. The questions were wide-open ranging from what makes you mad to whose better Zuckerberg or Sandberg?
One of his most interesting perspectives is that outside of his tech investments, he is investing in hospitality and entertainment. Why? Because his experience with Facebook has focussed his attention on what he sees as a rising value in photogenic experiences. Young people get more value out of showing their friends their trip pictures. They would rather spend money on those experiences than say a new car. So Palihapitiya has invested in the NBA Golden State Warriors as well as restaurants.

It was also interesting to hear that he has cashed out of Facebook stock and has put that money into Google stock. More conservative for sure. But then he says he’s a big backer of Bitcoin.

He is one of the few leaders in technology who stand by the NSA. He thinks their work is awesome. He comes at it from a point of realism.  I believe it’s fair to summarize his point that Russia, China and hackers are hacking.  As US citizens, our taxes are paying for the NSA to help us to make decisions, don’t we want them to be good and aggressive? Don’t delude yourself to think that you have privacy.
Palihapitiya has a strong personality but there were a couple of traits that stand-out as what seems like trends among technologists:
- Cussing. Palihapitiya swears a lot. I don’t know him but it feels affected. Other technologists like Dave McClure are fond of cursing. Why do they do it? Who knows but I expect it’s because it makes them come across as rebels and authoritative. “I don’t care what people think about me cause I think for myself and I’m right.” Personally, I don’t have an issue with cussing except that now that I am a father I know that my kids will search me on Youtube and I don’t want them to hear me cussing. I also know it offends people and if there’s no good reason to offend its better not to.

- Obsession with intelligence. Palihapitiya talks a lot about finding the smartest people on on the planet and how they will displace phonies from ivy league colleges. He obviously makes a good point that intelligence matters. What he doesn’t caveat is that luck, timing, and hard work are maybe more important than intelligence. Airbnb and Uber are billion dollar companies but did they require genius and the smartest people on the planet to develop? Of course not.

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China’s Solar Advantage? Manufacturing And Supply-Chain!

September 5, 2013

Many investors in the solar industry attribute China’s advantage in the solar industry to massive government subsidies and a large workforce consisting of inexpensive labor. But in a study released by the Royal Society of Chemistry’s (RSC) journal, Energy & Environmental Science, large-scale manufacturing and supply-chain benefits also play a role.

Because solar manufacturers in China enjoy a density of production and the cost-benefit of using local suppliers, the RSC states that they enjoy a Minimum Sustainable Price (MSP) advantage of 23 percent per watt.  The MSP represents the lowest price solar manufactures can sell their product for and still achieve a profit.

According to the RSC, the 2012 estimated MSP for United States solar panels was $1.19 per Watt for US solar panels versus $0.91 per Watt for Chinese solar panels.

The RSC study refutes the notion of cheap labor helping China’s solar industry as regional influences negate this advantage. But the RSC believes that large scale solar panel manufacturing in the region, which is enabled by access to capital and a less restrictive business and regulatory environment, are the prime factors in the difference in MSP.

There is hope for manufacturers outside of China as the RSC believes China’s success could easily be replicated. But it’s not that simple according to Al Goodrich, Senior Analyst at NREL and lead author of the study.

Mr. Goodrich states, “for solar power, there’s a chicken and egg problem: consistent demand is needed to provide manufacturers with access to the capital required to achieve large scale production, but large-scale production will be necessary for solar power to compete as an energy source without subsidies.

Researchers at the US Department of Energy’s National Renewable Energy Laboratory (NREL) and Massachusetts Institute of Technology (MIT) developed the bottom-up cost model for MSP to examine the underlying causes for the shift in the global manufacturing base of photovoltaics from the US and Europe to China.

Despite the supposed difference in MSP, shares of First Solar (FSLR :NASDAQ) were up 4.8 percent in afternoon trading.

China Sunergy’s New Solar Cells Achieve Over 20% Conversion Efficiency

September 3, 2013

It may not be a record, but it’s still impressive as China Sunergy (CSUN :NASDAQ) announced today it has reached an energy conversion rate of 20.26 percent on its new generation of high-efficient, mono-crystalline solar cells as certified by the Franhofer Institute for Solar Energy Systems ISE.

Mass commercial production of the cells will commence by the end of this year.

These new cells surpass the 20 percent mono-crystalline cells conversion efficiency benchmark mandated by the eight development guidelines issued by the State Council for China’s photovoltaic industry in July 2013.

Exceeding 20 percent helps push China Sunergy towards one of the key components of the winning formula for the solar industry of higher efficiency cells at affordable prices. China Sunergy did not release any details on pricing.

Investors certainly understand the significance of this announcement as shares of China Sunergy were up 3.16 percent in early afternoon trading.

First Solar and AGL To Deliver Australia’s Largest Solar Project

July 31, 2013

AGL Energy Limited announced today that it will move forward with two utility-scale solar energy projects totaling 155 megawatts (MW) and First Solar (FSLR :NASDAQ) will be providing the photovoltaic modules and EPC services for the projects totaling approximately $450 million.

First Solar will be building a 102 MW solar plant at Nyngan and a 53 MW plant at Broken Hill.  The Nyngan plant, located in New South Wales, will not only be the country’s largest solar plant, but the biggest in the southern hemisphere. The projects are receiving $166.7 million in funding from the Commonwealth Government through the Australian Renewable Energy Agency and $64.9 million from the NSW Government.

Both projects are scheduled to begin construction in 2014 and be completed by the end of 2015.

Nyngan and Broken Hill are part of the Australian government’s aggressive goal of obtaining 20 percent of its energy through renewable sources by the end of the decade.

With stellar business wins like today’s announcement, First Solar continues to be a darling in the solar industry despite being called out Aaron Chew, an analyst with Maxim Group LLC in New York back in April 2012. Back then Mr. Chew felt the company needed to make major changes to its business model and downgraded the company to “sell” with a target price of $9.

Shares of First Solar were up 2.17 percent to 49.55 in afternoon trading.

Tile Raises $2.6M For Lost And Found Bluetooth

July 24, 2013

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We have been wondering for years why there isn’t an easy tagging product so that you can locate your stuff in your garage, closets, etc. The find my iPhone feature works so well we thought this would work for other products. So we are not surprised to see that Tile has found lots of people who are interested in investing via Self-starter. Tile was incubated in the Silicon Valley mobile accelerator Tandem Capital.

What’s interesting here is that Tile allows you to find stuff that is well outside of BlueTooth range as it networks its community who are on Bluetooth via cell phones to track down lost objects.

Tile is taking orders for $25-a-piece tags via its web site.

Even though we like the idea we wonder why 50K people donated? Is there a particular use-case? Is find my stolen bike it? They are fairly big – matchbook size – wouldn’t a thief simply spot a Tile and throw it away? From its promos, Tile thinks the key uses cases are bikes, wallets, purses and keys. What about dogs? Or kids?

The most common complaints seems to be that it only lasts for a year, then you need a new one.

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GreenLancer.com Raises Additional $225,000 To Complete Series A

July 11, 2013

Seeking to solve the problem of finding green energy engineering plans for a solar energy project, Detroit’s GreenLancer.com announced today that they have raised an additional $225,000 to complete their $500,000 Series A round.

GreenLancer.com’s investors are a posse of Michigan-based companies including Bizdom (Detroit), Start Garden (Grand Rapids), Blue Water Angels (Midland), Northern Michigan Angels (Traverse City) and a private investor.

As a web-based solar engineering company, Greelancer.com provides online technical documents, engineering services and financial modeling through a national network of engineers that are supported by the cloud. The value proposition for Greenlancer.com breaks down to two components: cheaper and faster.

From past experience, we know that solar engineering services aren’t cheap and often take a while. But most companies are aware of this when they undertake solar projects. Being the fastest and the cheapest isn’t necessarily an advantage unless their bright spot is working with companies that don’t have an understanding of utility-scale projects.

Greenlancer.com plans on spending their newly found capital on supporting their “ambitious growth plan” but one cannot help but think they should spend a little on developing a new name and upgrade the content on their web site so that it would actually entice potential customers to try their unique service.

Home Delivery From TJ’s and Costco Via Instacart Raises $8.5M

July 10, 2013

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San Francisco-based Instacart has raised $8.5M led by Sequoia Capital. Also backing are Khosla Ventures, Canaan Partners, SVAngel and Paul Buchheit, the creator of Gmail.

Instacart will shop for and deliver groceries to your door within 2 hours for a fee of $3.99. You can order from Costco, Whole Foods or Trader Joes,which don’t deliver. The comparable here is not to Webvan or Amazon groceries but to a freelance car service like Lyft where anybody with a car can be a driver. We don’t get how at that price they will get someone to drive to a store and buy groceries then drive to the customer’s home.

The deal is notable because Sequoia’s Mike Mortiz was on the board of Webvan. He says“We had still been receiving outpatient therapy for our Webvan fiasco,” says Moritz, who’s joining the year-old company’s board. Still, with Instacart, he says, “There is little danger of a relapse.”  Everyone we know who was involved with Webvan says that the model works and there are a number of companies providing it today. Other than the pricing we wonder what happens if Trader Joes and Costco start to home deliver.

Instacart today says it has 200 personal shoppers in the Bay Area. The Instacart app has maps of local supermarkets and can direct  personal shoppers to specific aisles. Founder Apoorva Mehta says Instacart’s “secret sauce” is its fulfillment software, which allows the online retailer to combine orders placed at different times and fill them from different stores.

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