Free Money(?) from ARRA, Merlin's Nice, Uther Stinks, Greenfuel Selling Out

Why is NOW is the best time to start a new business? Well, let me tell you ... but first …

The single most difficult aspect of any entrepreneurial venture is not something you can overcome with skill or even repetitive practice.

That trickiest aspect is not market research. Some people find it difficult to figure out if there really is a market for a particular product or service, especially if it is some highly original idea. If you are about to make something that no one has ever heard of before, how can you know if they will want to buy one? True, that's not an easy answer. There are several special cases where what the product was, or did, or looked like was not really as important as the marketing. The hula-hoop, the Frisbee and the pet rock are certainly examples of things for which there were no prior examples and for which there never was any "need" that was being met.

Many, if not most people who start a business of some sort will tell you that getting the financing was the most difficult part, and often it is. Unquestionably under-financing a new business is the number one cause for businesses closing before they get to profitability (if they ever would). But there are literally millions of business people (or one time business people) who persuaded "Uncle Morty" to loan them $10 or $20 thousand to get started and running for 6 months. Often followed by squeezing mom and dad for a few thousand more when things got thin toward the end of those 6 months, followed by tapping big brother (or sister, of course) to write an SBA loan application and still the enterprise is a ghost from history before the end of the year. So, yes, doing the financing right is one of the more difficult aspects. There are even some people who keep doing this same routine, year after year, hoping that one of their "ideas" for a business will find "traction" enough to get past that initial hump. But those "serial entrepreneurs" are the opposite of most who form a business. Indeed they lack the problem to which I am referring as the "single most difficult".

For the majority of people the most difficult step to take is the first one. There are a thousand and one questions that plague the mind of the entrepreneur at the beginning of a new enterprise, from, "Is my sign the right color for this business?" to "Did I manage to recruit the right people for my board of directors and how do I get rid of one of them if I chose poorly?" Not all "serial entrepreneurs" create only failed businesses, some are very successful, but the ones whose complete self-confidence fails to make them pause to consider what might go wrong and what steps must be taken to avoid a commercial disaster are the ones keeping sign makers in business as they repeatedly order "Going out-of-business" signs.

Recession time + Summer time = Time to Start a Business

Whether or not we have hit bottom on this recessionary downturn in the economy (and it annoys me no end that most of it was caused by self-fulfilling predictions of tightening credit and the economic slowdown that would cause) we are almost certainly within 6 months of a start of noticeable (dare I say, undeniable) recovery. That means if you do not try to open a shoe shop on a shoe string that is only 6 months long, but instead, enter into it (or any business) with a fully matured plan to last 3 years to profitability, your chances are excellent right now because you will be ahead of the crowds moving in the direction over the next 9 or 18 months. If you can put together a basic enterprise that is sound financially for the next 18 months that focuses on renewable energy, then you can probably find some government grants, loans or other support as long as you can create jobs over the next 9 to 18 months.

I am receiving Department of Energy newsletters and announcements almost daily about some new, focused opportunity which they want to fund. Some of them, like the recently announce US$85,000,000.00 for "consortia" of universities and business and research enterprises (including federally funded research institutions like NETL or NREL) looks like it will go to 2 or at most 3 "consortia" (as specified in the announcement). That looks to me like this program is designed to suit a couple of entities that have informally proposed some ad hoc alliances and that the result will be similar to when the Department of Defense asks for proposals for a joint Army and Air Force "tactical fighter" so that the two competing bids almost have to come from "consortia" led by Lockheed Martin on one side and General Dynamics on the other. (Excuse me if I am mis-speaking about DOD contractors, I honestly don't even know if those two are "leading" companies any more of if they have been swallowed up in mergers by even broader based organizations.) But regardless of how narrowly targeted some of their objectives may be there are literally thousands of opportunities being funded through the American Recovery and Reinvestment Act of 2009 (ARRA), as well as others that have evolved under prior energy legislation and regulations like the Energy Independence and Security Act of 2007 (EISA) and the Energy Policy Act of 2005 (EPAct 2005).

A whole range of activities related to building insulation upgrades, training for energy efficiency workers, rebate programs for energy efficient appliance, and more are being administered and funded under individual State Governments, as well. Rural areas are eligible for special programs, too. In fact, here's the exact quote from an Energy Efficiency and Renewable Energy press release from the DOE (Monday 20, 2009):

"Activities eligible for State Energy Program funding include energy audits, building retrofits, education and training efforts, transportation programs to increase the use of alternative fuels and hybrid vehicles, and new financing mechanisms to promote energy efficiency and renewable energy investments." The aforementioned "transportation programs" are such things as CNG buses, light rail, and possibly municipal garbage trucks that run on CNG and therefore don't sit around idling (often diesel engines) for half the day while stopped for pickups. However, you might want to check into local programs in your state because there are a number of rebate and other programs to help small businesses with energy efficiency that did not exist before. For example some of these ARRA State Energy Programs provide for additional rebates for solar photovoltaic and solar hot water systems, small wind applications, and geothermal systems for homes, businesses, and energy efficiency and insulation programs for government and institutional buildings, too.

Jobs, Jobs, Jobs

Some (in fact, many) are subject to restrictions on how "carbon neutral" they are in their life cycle carbon usage and carbon dioxide (and other Greenhouse Gases) releases, but the overall eagerness to create jobs worries me a little about the longer term implications of that objective. One can certainly imagine that a proposal to place in service a dozen tiny, track-driven, electric-powered, sidewalk snowplows, each requiring an operator and steered by handlebars such that with less total materials involved in their manufacture and eliminating the gas (or diesel) powered engine of a mini-bulldozer style sidewalk plow (with a single operator) that is only 5 times as fast as the smaller manually steered plows you achieve a number of desirable net outcomes. You don't pollute the air from the engine's exhaust, you stimulate manufacturing in your new capital purchases of machines, the new machines are electric powered, thus no air pollution, and you have created at least seasonal employment for 12 persons which could be extended to nearly year round if these machines also could change their plow blade for a set of spinning brushes to sweep sidewalks during summer, spring and autumn; which, of course, saves on not using water for sidewalk washing to keep them clean. It all sounds like it fits the ARRA like a glove.

That reminds me of the Chinese government project criteria. That is not to say that their environmental concerns are the same, although reports are that the whole of China is becoming much more cautious about environmental issues, but rather that, in China, the main concern is how many jobs will this create (preferably permanent jobs)?

My issue with my suggested smaller, electric, hand-operated snowplows is that while the Federal programs are paying for it, terrific! It created jobs, but not permanent jobs, and if those jobs were to become permanent (e.g. they fell under city collective bargaining agreements with other city workers) the labor cost alone would be staggeringly worse than hiring one extra bulldozer style driver and buying one extra bulldozer style sidewalk snowplow. This would be 2 salaries versus 12, less maintenance and longer equipment life expectancy, and, until and unless the electricity being generated is from renewable resources, the air pollution "saving" is really just a "geographical shift" to outside the city.

Thomas L. Friedman, in his book Hot, Flat and Crowded suggests he'd like to see us become, "China for a day, but only a day." His idea being that we could then make some autocratic proclamations of policy without all the untimely delays of pushing legislation through the law making process to effect some of the changes that (he believes) are necessary to improve chances of civilization actually surviving the "Climate Change Crisis", and remaining competitive in a world that is changing so rapidly. I am afraid that we may be losing sight of the goals of long term energy stability that also mitigates climate change contributions in favor of short term fixes for the economic recovery that is currently the hot topic in the news. I hope that is not true, but my snowplow example would seem to argue differently.

Technology Leader on the Sales Block

Sad news, Greenfuel Technologies has pretty much confirmed their own death knell. They have announced that they will be "entertaining offers for the sale of its intellectual property and other assets," including their "vertical technology" and their downstream processing. It may not be the crash of the Hindenberg, or the sinking of the Titanic, but it sure doesn't feel like a rubber ducky being lost in the bubbles in a bathtub either. For at least a good portion of the last couple of years, I looked upon them as one of the leaders in the algae-to-fuels field, and based on their association with APS and the Redhawk trial of their techniques (despite the operation closing down rather than expanding) it seemed to me that this was the Wright brothers progressing from gliders to their first tentative powered flight than Howard Hughes combination maiden and farewell flight of the Spruce Goose.

It appeared to me too, recently, that perhaps APS was poised on the brink of a really significant breakthrough point in partnership with Greenfuels. By combining algae "re-use" of carbon dioxide with the high-oxygen combustion environment for coal firing electric generation that produces far less carbon dioxide in the first place it seemed like perhaps we were going to see something that one could really classify as getting close to "carbon neutral" (I know, I know, it's still introducing fossil carbon). But by the time you calculate the carbon re-use, the liquid fuel produced (biodiesel or some similar equivalent) and the oxygen given off by the photosynthesis being at least a supplement to whatever was the primary source for oxygen enriched combustion it could be like going from the fire department blasting you with one of their hoses compared to a kid with a water pistol shooting at you from across the street.

The DOE shows a chart for oxygen enhanced combustion (and notes that coal fired electric generation is just one of the processes that could benefit from it). In this chart it shows that one could reduce the amount of fuel needed by as much as 60% if the combustion environment was raised to 35% oxygen. The information at the top right corner of this graph may never be more than a theoretical projection but it postulates that with 100% oxygen environment for the combustion, the resulting reduction in coal consumption would be fully 50%.

That is not to say that high oxygen content combustion environments are a single step cure-all. There are still lots of other pollutants in coals of all grades, but these would be handled separately anyway, since they are generally already regulated under rules from the EPA and local Air Quality Management boards or commissions.

Everybody's Hiding It

Minutes after I awoke this morning I was already deeply involved in writing today's column and other work, so it was that much later in the morning than usual I got around to pouring myself a drink. In this case it was Coca Cola rather than the usual morning coffee, but being a thinking kind of guy (sometimes), it gave me pause to think about the similarity between Coke and Coffee. Distinctive taste, loaded with caffeine and in my case sweet in a measure that can only be described as "extreme". There was something irresistibly enticing about coffee for me as a young boy. It was forbidden, but it smelled so good, percolating away on the stove of my best friend's kitchen, always a welcoming smell. But in my house such things were forbidden for young boys, so I had to wait to grow up until I could indulge. In the meantime, however, Coca Cola, was, after all, one of those sweet, sparkly, children´s drinks that seemed to my mother to be okay for kids, so I got my share of that. Mum would occasionally allow me a cup of tea, mixed with lots of milk and sugar, but coffee was so rarely even served in our house that it had all the allure of forbidden fruit (in fact more so, for me, because I've never been all that fond of most fruits, either).

You might not have guessed, but this is my entertainment commentary for this week. Yes, coffee and Coke and other forbidden fruits seem to be a recurring theme in movies and television recently. Perhaps it is just my personal viewpoint that sees things this way, but it does appear to me that there may be a "trend" arising from the evidence of what it getting produced and therefore what is getting to be popular. That is, following the mini-tide of "ghosts" shows over the past couple of years there has been an upswing in the number of movies and series about things forbidden. The Twilight (The Twilight Saga, Book 1), whether or not all the blood sucking is a metaphor for teens discovering sex, almost certainly the romanticized descriptions of the experience equate to the paperback romances, but being a vampire or vampiress is not something you wear out in the open (not unlike "Allison duBois" in Medium in which her capabilities being a semi-secret of the duBois family) or tell your parents about. Now there is a British made series on NBC called Merlin. In this version of the life of the legendary Arthurian magician, he is a young servant to the future king, in the court of Arthur's father, "King Uther" played by Anthony Head, probably best known as "the librarian" (aka Rupert Giles) in 123 of the 145 episodes on the original series of Buffy the Vampire Slayer. He should have stuck with vampires. Though it is not exactly his fault the series suffers terribly from the stifling character trait given to Uther, which is that he is pathologically, insanely, obsessively opposed to any sort of "magic" (up to and including prescient dreams, "Morgana" the king's beautiful ward (played by the very lovely Katie McGrath). In a "tip-of-the-hat" to American television's obsession with tokenism, "Gwen" (like anyone isn't able to recognize the representation of the young, lady-to-be Gwenivere) is played by Angel Coulby a London born actress, apparently of some degree of African heritage who, though soldiering on in a very creditable manner, is horribly out of place in this mythical medieval setting. Now, the producers might think that all this "forbidden magic" stuff creates dynamic plotting tension, but frankly it just stifles the action and turns ever episode so far into a rather tedious sitcom minus the humour (spelled the British way in deference to the context here). The one bright spot is that you just can't help adoring the charming Colin Morgan, more than a little goofy looking with a haircut that emphasizes his "Obama" size ears, he plays the innocence to the hilt and manages to delight regardless of the tedium of the constant, "how are we going to hide this from the king so he won't kill us" plotting which causes the whole "forbidden fruit" appeal of magic to fall on its face.

The Skype´s the Limit

My happy ending for this week is that a new century truly must have dawned because my sister has now learned to use SKYPE to view the most recent addition to her short list of grandchildren. I still feel like a good deal of the time I am trying to drag people (usually kicking-and-screaming, though not literally) into adopting video telecommunications as at least a sometimes mode of connecting. Even my sister says she is now "too old" to appear on camera (she IS a good deal older than me, but she's only a few years older than the last time I saw her in Switzerland). On of the nicest aspects of SKYPING is that it has not been isolated to a single computer software based success. C-U-SeeMe (the CU part stands for Cornell University where it was invented) computer video conferencing application (yes it really does allow multiple participant video and has for over 10 years) never really took off, but now after nearly a decade of "via broadband" video remotes in the television news world, Oprah has started to use SKYPE for remote interviews. Google too has gotten on the bandwagon and offers video as part of their chat application which is also included in their "Gmail" accounts now. Remarkably, I had recently just got off of a long distance phone call that was difficult to hear because of the poor quality of connection and a few minutes later I was video chatting with a business associate in which we have not only added the bandwidth of the video signal but the audio was clearer and crisper than the voice on the telephone call. That's what I call a happy ending.

Sincerely,

Love and warm wishes,

Stafford "Doc" Williamson

http://daochienergy.com