I saw Tom Siebel speak last week before a meeting of the Alliance of Chief Executives, giving a talk entitled From IT to ET, as in From Information Technology to Energy Technology. Here are some notes on the talk.
- Siebel now runs something called First Virtual Group, a diversified holding company that runs Siebel’s real estate, agribusiness, financial investments, and philanthropic activities. “Think of it as a private equity firm with one investor.”
- He did a long riff contrasting the period from 1980 to 2000 with what he anticipates in the period from 2010 to 2030.
- The 1980 to 2000 period was a paradise of government policies, efficient capital markets, and a free flow of capital to information technology that ultimately created a $1T information technology industry.
- IT growth was 17% CAGR from 1980 to 2000. From 2000 it grows, he says, with GDP at a rate more like 3%. “The party here is over.”
- “It’s done. Tell me the next step that’s a replacement technology. Right now it’s all bells and whistles.”
- The big picture from 2010 to 2030, he says, is (1) increased government regulation, (2) exponential population growth, (3) aging population, (4) increased demand for healthcare (of which 85% of an individual’s lifetime consumption is spent in the last year of life), and (5) energy scarcity.
- It took from 8000 BC to 1750 AD to grow the world population to 1B. In 2008, it’s 6.5B. In 2028 it will be 9B. (Says the guy next to me: “and they’re all going to need to buy things — how is this bad?”)
- These trends make for the following opportunities: (1) food, (2) water, (3) energy, and (4) healthcare. He also mixes in some Malthusian FUD with an overtone of Limits to Growth.
- Per-capita energy population is increasing exponential. So if you combine exponential population growth with exponential per-capita energy consumption, you end up with energy demand that is — pardon the expression — exponential squared.
- All energy on Earth comes from the Sun. (I was waiting for him to add “and it’s burning out” at this point, but he didn’t.)
- He then cited some interesting charts and graphs from a book called Fundamentals of Renewable Energy, which I think is this book though it might be this one.
- He then discussed the concept of peak oil, an idea that I’d heard of but that I hadn’t known was postulated in the 1950s by an engineer at Shell. By 2020/2030, says Siebel, this gets to be a real problem.
- He then said we have two choices: drill / drill / drill or invent / invent / invent. (There are times when I wonder if I shouldn’t have exploited my geophysics degree more.)
- He then discussed two initiatives he’s working on: (1) an Energy-Free Home Challenge that is soon to be formally announced, and (2) a new company called C3 that he was involved in founding.
- The Energy-Free Home Challenge is a contest with $20M in prizes paid for by the Siebel Foundation (2007 annual report here). The goal is to find a way to build houses that consume net zero energy at the end of a year, built with no more expense than traditional construction methods. (This, by the way, sounds definitionally impossible, but who I am to nitpick a billionaire).
- $5M will be awarded to enabling technologies (e.g., glazing, appliances). Ten finalists will be chosen and $2.5M will be awarded to them in prizes and $2.5M will be spent to build their homes. A grand prize of $10M will go to the winner. They will then build 90 additional energy-free homes (using whose money is unclear) in order to demonstrate the viability of an energy-free community.
- C3 (which I think is related to the acronym carbon-conscious consumer) is a new company, run by Siebel veteran Pat House, that will make enterprise software to help companies manage their carbon footprint. The company started by calling together a panel of 29 experts during the summer of 2008. “Deliberations were concluded 12/08.” C3 was founded last month, in 1/09. Operations will begin in 2/09. The product spec will be completed by summer 09. And — if I heard correctly — they will have demonstrable product one quarter later in fall 09. (And one heck of a development team if they can actually build a product in a quarter.)
- C3′s goal is to help companies “monitor, mitigate, and monetize” their carbon footprint. I tried for about 15 minutes to find a website for the firm and failed. If you find one, let me know via a comment and I’ll link it here.
- Almost to the point of comedy Siebel strained to not position C3 as an information technology company, despite the fact that it will sell enterprise software. “C3 is an energy tech company.” “IT is incidental to C3.” “C3 will not have an IT rate of growth.” (How quickly they turn.)
- And the capper: “My closest relation to information technology in the last 4 years has been selling Oracle stock every quarter.”
Overall, it was an interesting speech and I thank Tom for taking the time to give it. I like the idea behind C3, though I think it *is* an information technology company and am not afraid to say so.
I think the Energy-Free Home Challenge is interesting and it begs the question: given $20M, what is the most effective way to stimulate innovation? Contests with prizes? Grants to scientists? Venture capital investments? I don’t know the answer and since it’s not my money, I don’t need to. But I am happy Siebel’s giving it a try and I’m sure that if if produces even a few innovations that the money will have been well spent.
I’d also add that while Siebel didn’t talk about it at the event, that I think what he’s doing with The Meth Project is both quite creative and sadly quite necessary.