Biomass Authority

I’ve written several articles for BiomassAuthority.com this past month. The first article was about the pine beetle damage of the lodgepole pine trees in Colorado, and whether they can be converted into ethanol or some other useful product. Then I wrote one about climate change and the Gaia hypothesis, which may sound a little like sci-fi depending on your viewpoint.

The third article was a result of finding an advertisement for a corn-burning stove. I compare the relative costs of a number of fuels from corn, wood, oil, etc. and how it relates to heating a home.

A Whole New Mind – book review

An associate recently gave a very strong recommendation for a book entitled, ‘A Whole New Mind’ by Daniel H. Pink. Whenever I have someone recommend a book in an enthusiastic manner, I immediately run out and get it. In this case, I found it at my local library. Since I’ll be returning it soon, I thought I’d do a short review so I’d better remember it and to share what I learned from it with readers who might enjoy the material covered in the book.

The book focuses on what will be necessary to have a valued skill set in the future. When I was growing up, the advice was usually to stay in school, get good grades, and then study a profession like medicine, law, or engineering. I chose engineering. But there are reasons to believe that this advice is outdated due to several phenomena that have occurred in the past few decades. The author uses the alliterative effect of the words ‘Abundance, Asia, and Automation,’ to help describe these phenomena. Abundance is the recognition that over the years, most material needs have been satisfied with the abundance of high quality consumer goods that are more affordable than ever before. To be successful in this market of abundance, products need to be distinguished from each other by virtue of their transcendental qualities, not just their features and price. The word ‘Asia’ is related to globalization and how any job that can be done cheaper in India or China will likely be done there in the future, so if you find yourself in one of those professions whose jobs seem to be exiting stage left, you’ll have to retool your career to find a way to make yourself useful in this new economy. ‘Automation’ refers to the skills that used to require the ability to concentrate on fine details for hours now being done in seconds by a computer. Again, if your major skill is something that can be done faster and cheaper with a computer, you’ll need to figure out how you can add value some other way in the future.

I graduated from college at a time where an engineering degree meant a lifetime of job security combined with above average pay, so these phenomena all sounded very familiar to me, since that is no longer the case in the U.S.. I’ve seen many jobs that had been done here in my lifetime disappear into Asia seemingly overnight. Automation is a subject I studied in college, and I have always had a fascination with it. I recall asking a professor what would happen to the manual laborers who were replaced by robots. He responded that I was an engineer and shouldn’t be asking that kind of question, a response which I found more amusing than enlightening. It turns out that I didn’t need to worry so much about robots taking manual labor jobs. They were taken by lower cost workers in other countries. Similarly, I am a beneficiary of the low cost, high volume products that are significantly less expensive today in inflation-adjusted dollars than they were when I was a child. But I am also a victim of it because the engineering on many of these consumer and durable goods is increasingly being done in Asia, which reduces demand for the engineering to be done here in the U.S..

Is there a silver lining in this cloudy job forecast? The answer is not to change careers to become a doctor or lawyer, since some of that work is already being off-shored and taken over by technology as well. One way to become more aligned with the times is to re-activate the right side of our minds. Much of the work involved in writing software and doing engineering analysis is left brained, but the things that really differentiate products are less about the technology and more about the artistic side of product development. I can attest to the fact that much of the work I did on the last several products I designed had much more to do with Industrial Design, that is, the design of the user interfaces, colors, shapes, and textures than it ever had in the early days of my career. Back then, we could just put a product in a rectangular enclosure and paint it the standard corporate color and sell it. In the more recent products, we developed at least a half dozen artist renderings, ran them through customer testing and only then did we choose the shape and colors. Then we came up with full scale 3D models and solicited feedback on those as well. The appearance of the product these days is as important as what it does. The hardest part was trying to figure out a way to make everything fit inside of the design that was eventually chosen. So I can agree that when it comes to product design, the aesthetics definitely matter more today than they did 20 years ago.

It’s these right-brained values that are becoming more important in differentiating products than just price points and feature sets. It may account for why Apple has made such headway in the computer business after nearly losing it all a decade ago. That company definitely marches to its own drummer from a design standpoint and they’ve carved out a very profitable and ever growing slice of the pie as a result.

The book goes on to talk about how the right and left lobes of the brain interact and is full of examples which help to drive the point home. It covers exercises to help better utilize both sides of your brain. The second half of the book goes on to explain a sequence of the six senses of the coming Conceptual Age, namely, Design, Story, Symphony, Empathy, Play, and Meaning. You will not find these terms in any old-school engineering texts.

In the case of my associate who recommended the book, it was a result of an educational product we’re advising a company about and we were trying to relate how the product could be used to improve test scores, yet this book questions the validity of test scores in relation to success in one’s chosen career. It’s true that they may help you select a career and perhaps get you into a better school, but there are many other ‘soft’ skills determined by the right brain that may be a bigger determinant of one’s career success than shear IQ points or aptitude test scores. These soft skills are not easily measured with standardized tests. Good test scores will still be necessary, but not necessarily sufficient, when it comes to demonstrating marketable skills in the future.

I found the book to be a fast and enjoyable read with lots of great pointers to other resources. I would highly recommend the book, particularly if you’re contemplating how you might spend the rest of your career after seeing jobs like yours disappear to other lower cost economies.

EntConnect Trivia

John Gaudio, the keeper of the flame as far as EntConnect goes, has a recent blog entry about its history. Today I thought I would include an image from a ’sampler’ magazine that Bill Gates used to send out to stir up interest in Midnight Engineering.

Click on the image above for a readable version of it.

You can get an idea of the agenda of the very first 1992 ME-Ski conference and above that, there’s an advertisement for some ME back issues, including some of the topics covered in those issues.

I still have many of my Midnight Engineering back issues since I felt there was something unique and irreplaceable about them and couldn’t bear to throw them out. I’m sure they are destined to become collectibles.

I often wonder if Midnight Engineering magazine will ever be relaunched or if a similar magazine (or possibly a website) may appear. Catering to high tech entrepreneurs and bootstrappers is a niche, but probably even more relevant today than ever as few engineers have the option of working for a large and secure employer from their first job until they are ready to retire.

We are all self-employed in many respects and developing one’s entrepreneurial instincts is as essential for an engineer as it is for a CEO running her own show.

LinkedIn Tip on Groups and Associations

[UPDATE: April 25, 2008] The technique described below no longer works, as it appears that LinkedIn has closed up this loophole recently. They did, however, at the same time add the ability to add people directly from the groups described as ‘Group B’ as explained below. I don’t know if this is a permanent change, so I’ll just leave this caveat here in case someone gets confused about why this technique no longer works, as one commenter of the posting has already noticed.

However, I can think of examples where you may have lost the email address of a person you know or have an expired email address and would like to connect with the person if you find him on LinkedIn. So here’s a workaround. In the list above, I have divided the groups up into two categories, A and B. The A affiliations are those which you can create yourself. The B groups are managed by a group manager which you can only join by permission or invitation. Recall that you can send messages to another group member in group B through LinkedIn, but you cannot directly add a person from group B to your network unless you know his email address. However, LinkedIn allows you to add anyone to your network without knowing their email address if you share an affiliation from list A. Here’s the strange part. LinkedIn doesn’t require that the invitee actually have that affiliation listed in his profile. It works the same way as if you shared a company or school affiliation.

Here’s an example I can think of on how to use it. Please keep in mind that I don’t ever recommend inviting anyone who does not know you, only people with whom you’ve already established some connection outside of LinkedIn. Suppose you had met someone on an Alaskan cruise but subsequently lost the person’s email address. Then if you found that person on LinkedIn and wish to reconnect with him, you could ask for an introduction through someone else in your network, assuming he is within 3 levels of you. If he is not, or if you don’t want to bother anyone else in the network for an introduction, you can simply make up an affiliation such as “Alaskan Cruise 2005″ and add it to your profile and then request to add that person to your network using the Groups and Affiliations option and selecting Alaska Cruise 2005. After you’ve joined networks, you can simply delete that group.

Zero Energy Home to be Featured at EntConnect

As I mentioned in a previous posting, I’m helping to organize an entrepreneurial conference called EntConnect in Denver on March 27-30th. One of our regular conference attendees, Gary Skinner, will talk about a home he built recently that was profiled on EcoTech on the Discovery Science channel. You can catch a 2 minute clip of it here:

There are always glimpses of the future that I get from other attendees at EntConnect. Whether you’re a freelancer, a business owner, or an employee, if you have an entrepreneurial spirit, you should consider joining us in 6 weeks.

The conference fee is 50% off if you sign up before March 1st.

Do biofuels actually cause more greenhouse gases?

I recently received a pointer to this blog article which references a NY Times piece about articles in Science that state that biofuels actually increase global warming by pulling land into the agricultural pool that was previously a carbon sink. The first of these Science papers is focused on the ethanol industry in the U.S.

During the past 14 years, 15 separate studies have shown that ethanol has a net positive energy balance. Only one study has contradicted it, but the researchers of that study (Pimental and Patzek) wrote the same paper 4 times so you may hear that the ratio is 15:4. It’s the one that always gets quoted (usually unknowingly) when someone tells you it takes more energy to produce a gallon of ethanol than you can get out of it. Now it appears ethanol opponents will have another study to quote, this time about biofuels creating additional greenhouse gases.

In looking in the supporting materials in Science Express, I found this curious assertion:

If corn-based ethanol could not receive a credit for removing carbon from the atmosphere – deleting the feedstock uptake credit from the GREET model– it would increase greenhouse gas emissions by 48%. It follows that if the use of land to grow corn for ethanol has the net effect of reducing land-based carbon sequestration, the overall effect will be a bigger release of greenhouse gasses.

In other words, they are stating that when comparing greenhouse gases from corn to gasoline, corn should not get a credit for having removed carbon from the atmosphere. Instead they think it should be compared to growing a forest or prairie in the place of farmland which would allow the carbon to be sequestered year after year. Forests and prairies give back carbon to the atmosphere every year when their leaves and grasses die. In the case of forests, every few decades the trees die, or burn, or are used for some other purpose and thus also give back their carbon in a brief instant of geological time. Unless you’re burying the carbon deep under the earth’s surface or oceans, any carbon taken in by plants is given off in a few months or decades. Soils also have a limited capacity to hold carbon and eventually reach a homeostasis after only a few decades. So I consider the logic used in this study to be flawed.

But I will expect that every biofuel opponent will quote it with abandon, never realizing that the authors of the paper are not comparing biofuels with fossil fuels, but rather biofuels with some imaginary state of affairs where forests that capture but do not release carbon to the atmosphere have been replaced by farmland.

All land capable of sustaining plants, whether it be used for farming, prairie, or forest eventually reaches a homeostasis when it comes to CO2 sequestration. Farming allows us to take advantage of the CO2 to carbohydrate conversion that occurs on land whereas prairies and rainforest that go unharvested do not. But in the end, they all return CO2 back to the atmosphere in a relatively short span of geological time. The only counter-examples are swamps that can, over the course of millions of years, turn vegetation into coal by trapping a tiny percentage of carbon each year.

Rawhide Energy Station Tour

The Northern Colorado Clean Energy Network and NCRES are planning a tour of the Rawhide Energy Station.

Date/Time: Meet on Tuesday, March 4th, 2008 at 9:15 a.m.
Meeting place: Northwest corner of Harmony Road/I-25 park-and-ride in Fort Collins, CO

The park-and-ride is located just north of the first traffic light when you head west on Harmony Road from I-25.

We will leave at 9:20 a.m. and carpool to the Rawhide Energy Station. Here are the directions from Harmony/I-25 intersection:

Go north on I-25 for about 22 miles and take Exit 288. Drive east for approximately 3 miles and turn north at the plant entrance. The tour is scheduled to begin at 10:00 a.m. The tour takes about 1.5 hours.

The Rawhide Energy Station is located 26 miles north of Fort Collins. It was built in the early 1980s and started generating power on March 31, 1984. It has a 274-megawatt coal-fired steam turbine for the base load and 4 gas turbines capable of generating 260 megawatts for backup of the steam turbine and for supporting peak loads during the summer time when electricity demand is high. It uses approximately 4000 tons of low sulphur coal per day. Rawhide is one of the cleanest coal-fired power plants in the nation in terms of sulphur dioxide emissions.

If you want to go on the trip, please contact me via email at lee810@yahoo.com or by phone at 970-978-6188 and let me know the names of the people you’re bringing, and whether you will be meeting at the Harmony park-and-ride for carpooling.

That phone number is my cell phone that I’ll have with me at the time of the tour in case you need to contact me on the morning of the tour.

Detailed maps of the meeting area and directions to Rawhide Energy Station are located here.

The Mathematics of MLMs

Every once in a while I get solicited by someone promoting a Multi-Level Marketing (MLM) scheme. This has gone on for as long as I can recall. You have probably already heard an MLM pitch where you recruit 5 members, they each recruit 5 members, and so on until you rise to the top of a pyramid structure and become financially independent. It’s sometimes referred to as Network Marketing.

The majority of these schemes often involve buying ‘lotions and potions’, which have near magical properties. Once you sign up, you agree to recruit others to do the same. The products have amazingly high markups compared to other similar products you can buy in a supermarket. They need these high margins because when you work your way through the math, half or more of their proceeds are gobbled up in payments to people at various levels in the pyramid. With an MLM, instead of eliminating the middle man, you’re adding about 4 or 5 levels of middle men.

Unfortunately, none of these MLM companies can deliver the promise of financial independence to more than about .4% of the people who participate in the scheme. In reality, the ratio is likely to be less. I’ve worked through an example below that will show you what’s wrong with this business model.

If you assume that financial independence for you means making 5 times a minimum wage of $6/hr, then you’d need $60,000 annually ($5,000/month) to achieve this. Many MLMs promise incomes much higher than this, but let’s be conservative and use this amount. Let’s see how big an organization you’d need to get to that income level in an MLM structure.

Assuming that your product requires each member in your downline to purchase $200 worth of product per month and you get an average of 10% of the money that flows up through your organization, you would need about 250 people in your organization for you to earn $5,000/month. This means that it would be about 5 levels deep and might look like this:

You + 5 + 25 + 125 + 95

For the sake of simplicity in building a 250-person organization, let’s just say your bottom level is still filling in and that’s why the bottom level has 95 people. If you got a 10% commission on all these people’s purchases, your monthly income would be $5,000/month. That sounds pretty good right? Well, here’s the rub. ALL of the 250 people in your organization are making little or no money, yet ALL of them were recruited so that they can get to where you are, that is, to financial independence. The people in the bottom level of the organization are spending $200 per month and making nothing. The 125 people in the level above them are spending $200 per month and are making less than $8 per month in commissions on average, so they are out $192 per month. The 25 people in the level above them each have an average of 9 people in their downlines and thus are making $180 in commissions and so they are losing $20 per month. The 5 people above them have an average of 49 people in their downlines and are making $980/month less the $200 they spend on products so they are clearing $780 per month. That’s not even equal to a $6/hr minimum wage job.

So, in order to achieve your financial independence, you’ve got an organization of 250 people and not a single one of them will be making more than the minimum wage. But ALL of them were recruited with the promise that financial independence was achievable. So in order to achieve YOUR financial goals, you have built an organization where fully 99.6% are unable to achieve THEIR financial goals.

You may say that all you need to do is to keep on building the organization and that will lift everyone up, right? That’s all well and good, but the ratio of people who are financially independent to those who are making little or no money DOES NOT CHANGE. There will always 99.6% working for minimum wage or losing money in an MLM. Do you really want to be part of a scheme that only permits 1 in 250 of its members to achieve the financial goals that everyone who has been recruited is expecting to attain?

What usually happens in these organizations is that the majority of people who are unable to meet their financial goals eventually get disillusioned and drop out and so everyone spends their time recruiting replacements. Few ever manage to rise very far, because the top people are already in place and the bottom members are getting replaced on a continual basis.

MLMs are a complete waste of time, money, and social capital. I was hoping that with the arrival of the Internet that these schemes would simply just go away as people were able to educate themselves about the other side of these “too good to be true” stories. It does seem to be helping expose these schemes for what they are. If you’d like to see a great website on the inherent flaws in the MLM business model, go to Jon Taylor’s MLM-TheTruth.com for an in-depth analysis of it as well as links to many other websites with similar supporting information. I found out about Jon Taylor’s work from an interview with Rob McNealy on his excellent podcast called Startup Story Radio.

I post this only for the purpose of helping people to wrap their minds around the mathematics of MLMs. I know that the majority of people recruited into MLMs are decent people who were recruited by other well-intentioned people who just repeated the sales pitch they were taught. But you can see from the math behind MLM pyramid schemes requires that for everyone who achieves financial independence, about 2% in their organization will make less than a minimum wage and the other 98% will lose money. I cannot imagine anyone feeling good about being a member of such an organization, especially if he is the one living off the other 99.6% of the people in his organization.

EntConnect 2008

I am helping to organize an entrepreneurial conference called EntConnect that runs from March 27th-30th, 2008 at the Sheraton West Denver hotel in Lakewood, CO. This conference has been held each year since 1992 and initially grew out of a conference organized by the publisher of Midnight Engineering magazine. Midnight Engineering was published for about 8 years in the 1990s and was targeted at engineers and technologists who engaged in entrepreneurial activities, often in their spare time, as its name suggests. Even though the magazine is no longer published, many of us had enjoyed the conferences so much that we kept them going. I say ‘we’, but I should mention that it’s the hard work and dedication of John Gaudio who pulls the conference together each year. This year a few of us have stepped up to give John a helping hand. He’s letting me take care of the website and on-line registration system.

The conference has taken on the feeling of a reunion. We sometimes bring in new members and friends which helps to keep things interesting. This year we decided to make an effort to recruit other like-minded people to participate. If you’re interested in entrepreneurial pursuits perhaps you may like to join us.

The conference runs from Thursday through Sunday starting off with a ski day at one of Colorado’s world renowned Summit county ski areas. We generally choose the ski area depending on snow conditions at the time. Past ski trips have been to Keystone, Breckenridge, and Arapahoe Basin. Friday, March 28th has a number of fun activities starting with high performance go-cart racing and/or indoor skydiving and ending with an Italian feast at Valente’s restaurant in Wheat Ridge. After dinner, some conference participants meet for drinks and conversation at the hotel lounge.

The main part of the conference takes place on Saturday with presentations from conference participants on subjects mostly related to entrepreneurial activities. In the past we’ve had topics that included how to improve your company’s ability to show up in web search results or improving your marketing effectiveness as well as many, many other subjects. Some of our members are quite skilled at spotting technology trends and letting us know about them far in advance of their arrival or widespread adoption. The conference goes on all day Saturday with morning, afternoon, and evening presentations. We take a break to go out to dinner at one of the local restaurants in the evening. The late evening activity planned for Saturday night this year is an informal poker game.

The conference is very relaxed and allows for numerous opportunities to have side discussions with people who have entrepreneurial interests. A few of our past participants have grown their businesses from garage startups and sold them for enough money that they could comfortably retire. Curiously, no one has opted to retire. We’ve also had people who have made fortunes and then lost everything during a market shift. A few of us are not entrepreneurs by the strict definition of the word, but enjoy networking with entrepreneurs in the hope that some of it may rub off on us.

The regular cost of admission to the conference is $299 and we have special discounts for rooms at the Sheraton Denver West hotel for $75 per night. There is a period where you can receive a substantial discount if you sign up early. If you sign up before Feb 11^th, the cost of the conference is only $99. The cost after Feb 11th will be $149 up until Feb 29^th. After that, it will be the full $299. Junior registrants (age 21 and under) are admitted at half of the regular prices. The cost covers the conference admission only. All other activities are pay-as-you-go. For example, if you participate in the ski day, then the lift tickets, meals, and equipment rental are the responsibility of the individual. Similarly, the Friday afternoon events this year are expected to run approximately $30 to $50 depending on which ones you choose. The Friday evening Italian dinner at Valente’s is $35. The Saturday lunch at the hotel is often picked up by one of our sponsors, as are the refreshments on Saturday evening. Thus there is a lot of flexibility on which activities you’d like to participate. You may opt to attend for the entire 4 days or just for the weekend conference.

EntConnect is a great place to network with others and to give and receive advice on running a business. There are many opportunities to participate in the discussion and you can even present a topic of your own. The schedule of topics and speakers comes together on the website as the start date approaches. You can follow its development at www.entconnect.org. You can see a representative Entconnect agenda by looking at last year’s agenda which is linked to the website.

Entconnect has a guarantee that if you are not delighted with the conference, you can request and receive a full refund. I don’t know of many conferences that offer a guarantee like that. Similarly, if you find that you cannot attend for after you’ve paid, you can request a refund or have your registration fee applied to next year’s conference.

We have resisted promoting the conference for fear it may to grow too large since we did see it expand to over 250 attendees one year. After that, it was decided to scale it back in size to give it a much more relaxed and friendly feel. For the past few years, it has averaged around 25 to 30 attendees, but we would be happy to increase to double that size.

Please feel free to contact me if you’d like more details on the conference or visit the website at www.entconnect.org.

The Cost of Installing a Residential Solar System

The website owners at SolarPowerAuthority.com had asked me to write an article related to solar energy, since they were familiar with my renewable energy articles on this site and liked the way I wrote them. Based on the quality of the other solar energy articles I found on the site, I was happy to do it. The article is entitled “How much does it cost to install solar on an average U.S. house?” My goal in writing the article was to explain to a lay person how much one should expect to spend on a photovoltaic (PV) solar system capable of supplying a household’s electrical needs.

In Colorado solar panels on the roofs were a common sight back in the 70’s and 80’s when the government was offering attractive subsidies for solar systems. Mostly they were hot water-based thermal collectors because PV cells were much too expensive for the amount of power they generated. Now with the increasing cost of natural gas and electricity, solar power is making a comeback and this time it’s likely to stay because as utility costs have increased, the cost of PV solar systems has dropped dramatically. The equipment that lets you connect a PV system to a household electrical system has also grown more sophisticated, allowing you to sell power back to the electric company during peak solar generating times. This essentially causes your electric meter to spin backwards and can reduce your electricity bill down to nothing. The article has many more details and so I recommend you head over to SolarPowerAuthority.com to check it out as well as many other solar-related topics.