OrionWorks - Steven V Johnson <svj.orionwo...@gmail.com> wrote:
> . . .I gather Jed remains highly > skeptical that most traditional energy providers would be capable of > making the transition. > Yup. See the books and articles by Prof. Clayton Christensen for the reasons why. See especially "The Innovator's Dilemma." He describes the dynamics that usually prevent established businesses from adapting new technology. He shows many examples from history. It is not unheard of. IBM made major transitions in the 1980s. However, that was after losing the largest amount of money any corporation ever lost up to that time, and after nearly going out of business. It was a near death experience. Most businesses do not survive such things. GM went bankrupt in 2009. The stockholder value was wiped out. In many important ways, the company ceased to exist and another company of the same name is now using some of the factories and employees of the previous entity. It is not what you would call "making the transition." The gist of the problem is what you saw with U.S. passenger railroads in the 20th century. First the automobile business took away most of their local business in the 1920s. Then after WWII airlines took away their long distance business. Railroad executives might have invested in Ford Motor. They might have tried to start their own airline. But they never did. They saw themselves in the business of running trains on steel tracks. Not in "the transportation business." They had few relevant skills that applied to running an airline. Okay, they knew how to issue tickets and keep track of baggage and freight. They no experience with airplanes. They had no competitive advantage over start-up airline companies, especially not compared to people such as Eddy Rickenbacker, president of Eastern Airlines. He knew a lot about airplanes. He could learn how to issue tickets. The people at Exxon Mobil know how to drill holes in the ground and under the sea. They know how to operate gigantic tankers, and how to refine and deliver thousands of tons of gasoline a day. They have a deep, sophisticated skill set. But they have no experience relevant to competing with Defkalion. They know nothing about installing and maintaining HVAC equipment. All the money in the world will not give them a leg up trying to compete with Peachtree Service Experts, the Atlanta HVAC company that I contract with. Why would I switch my business to a start-up run by Exxon Mobil? They would not be any cheaper. They would have to hire from the same pool of trained local people as Peachtree does. A bunch of guys who used to work in offshore oil wells are not especially qualified to maintain conventional HVAC equipment, and they will not be qualified to maintain cold fusion-powered HVAC equipment either. This isn't hard to understand. I am talking about energy-related companies. I think that GM, Ford and Toyota will be well positioned to transition to cold fusion automobile engines. That is an entirely different dynamic. That is replacing one core technology with another, leaving your business itself in place. Big corporations often do a great job of that. The railroads had no difficulty transitioning from stream locomotives to Diesel. That is not the same as entering a different market segment. Christensen discusses this in detail. - Jed
