Jiva Technology

Why its time for a post-oil economy

There was a time when I thought that governments in general and government ministers in particular actually new what they were doing. The events of the past few years have firmly dispelled that notion. Its not surprising really, these are very complicated jobs with a lot of ambiguous information and politics just doesn’t really do complexity and shoes of grey.

When I ask friends about the most important things they think need to be addressed; those things rarely show up on the front page of the newspapers for urgent government action. Too often, they require tiny improvements over a long period of time; the benefits will accrue to the future and not to now – what sane politician would want to do that.

But there does seem to be one area where important area where everyday concerns can coincide with big politics and that’s climate change. People are looking for action; they’re looking to take action. We’ve lived in an oil based economy now for over 100 years, the job of building a new post-oil economy should be the job of everyone, not just the younger generations. In the US, Alexandria Ocasio-Cortez has championed the Green New Deal, a reference to the New Deal policies that lifted the US out of the Great Depression, but to me, this is something far simpler. We have the wealth and the expertise and the desire to build an entirely new economy that relies to a far lesser extent on fossil fuels. Ramez Nam’s piece on decarbonising America provides a great overview of the challenge we face in everything from farming to construction and from transport to public policy. This is not a partisan political issue, there is agreement across age groups and political persuasions that something has to be done and the time to do it is now. Sleep walking into catastrophe was never a good idea, but the recent school strike and Extinction Rebellion protests show just how strongly people feel about the issue.

At the moment, the talk is negative, about avoiding bad things, but the reality is that upbeat leadership towards a de-carbonised world is a good thing for everyone. Its positive, its good for the economy and its good for the one world that sustains the life we live. It will be fascinating to see how this unfolds, but its hard to believe that the necessary leadership is not going to emerge in the near future. Its not hard to imagine a conversation in twenty or thirty years time where people wonder how anyone thought it was a good idea to light a fire under the bonnet of car to provide motion. You did what?

Something we never think about.

Amongst all the excitement of developing and rolling out a new product and entering a market, the focus falls squarely on attracting early customers, making them as excited as you are about the product and adding features that will bring in the next wave of enthusiastic early adopters. It’s all about delighting the early advocates and generating the buzz required to build early momentum. As someone once said to me, the first 1,000 users are the hardest.

And it’s true … to a certain extent. Because those early days are hard, you need the energy and commitment to believe the product and market into existence. Caution and concern are not all that helpful. But an outstanding blog post by Sahil Lavingia reminded me of a problem that I see more and more. One that lurks over the horizon ready to trap the unwary.

During that early phase of product release and user traction, you pay very little attention to what happens when you’ve attracted all the users you’re going to attract for your product. What happens when you sign up the 1,501st customer in a core market of 1,501 users? Like a rocket that has insufficient fuel or stages to reach escape velocity, you continue for a while and then slowly start falling back to earth. Lavingia is refreshingly honest about his experience and he performs a service to fellow entrepreneurs in talking about a topic that, well, most entrepreneurs don’t talk about. Loss aversion kicks in, no one wants to let go and some very hard decisions have to be made. It reminds me of all those micro messaging services, like Pownce, that emerged in response to the launch of Twitter. Most gave up early without the traction needed to keep going, but in the back of the mind, there’s always the story of Slack or Paypal to keep you going. Billion dollar successes that rose from failing projects.

It’s something to think about when you’re starting your new project. Being crushingly honest about exactly who will see value in what you’re doing in a detailed way, rather than a vague and generalised fashion. Focusing on the value of how that values delivered helps size the market in an honest way. It’s possible to build decent, profitable companies in small markets. But not in micro markets. Best to know that before you start. Just another thing to consider, alongside technology execution, marketing strategy, funding, competition, recruitment. Who’d be an entrepreneur?



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