Hey good luck. I am from the same part of the world and agree 100%. I should point out though that there is widespread use of UPS and generators. Not sure if people will go completely off the grid, but initially you are definitely a 'cheaper generator', if cheaper. Like you said its a cash-based economy, and people don't like to put a lot of money up front even if it means savings in the long run, so how will you combat the high initial investment? I do think this is the viable solution. Also you should look into transmission losses. I have heard power lines there are between 30% and 50% lossy.
Thanks, all really good points. Initially I'll be targeting the high end residential and commercial market to get cash flow going and sustain the business. Residents in major cities such as Karachi, Lahore, and Islamabad purchase their houses for US$500k+ with cash. The goal is to sell them on solar electric systems ranging from US$5k to 15k with the promise they can completely or mostly eliminate their electric bills, and get their ROI in 5-7 years while getting uninterrupted electricity for 25 years. The market is ripe and I have seen residential installations worth US$35k with upfront cash.
Generators and UPS are current alternatives. However Generators, very loud and expensive to purchase, are dependent on fossil fuel (dirty) prices, which are very low at the moment but fluctuate routinely. UPS devices produce square wave outputs that damage appliances permanently. Convincing the market to go solar instead because of these reasons is the eventual sales challenge for sure.
Transmission losses (including electricity theft) are part of the sales pitch. They are a big reason why Supply doesn't meet Demand and Load Shedding has to be enforced.
I would focus on incremental systems. Something like 10$ cellphone, 100$ for lighting, 1,000$ for PC, 10,000$ for AC.
Also, midrange UPS don't output square wave, I fact solar systems include a UPS for night time power. So, you could sell a ~3k, UPS system with bult in solar hookups where people can add pannels over time.
Thanks and completely agree. I'm going back home with an open mind. There's lots I will learn on the ground and will fine tune my approach according to the realities. I reckon Energy Efficiency will also play a big part in my approach down the road. Wanted to initially target a high end market segment with the least barriers to entry.
An opportunity I see is retrofitting a low voltage power distribution system within homes as part of the retrofit. Solar and batteries are already direct current and that's what digital electronics use...wall wart transformers are a kludge, directly plugging in the USB cable that charges my phone makes more sense.
At the extreme end, a system with solar cells and batteries that only serves digital electronics might be the MVP for the One to Zero market.
To me, it looks like the place where there is a strong potential for early mover advantage: i.e. it's a zero.
Solar system installation is a commodity market inside a larger commodity market of general power systems. Residential sales are individual and high touch (even higher touch at the higher end). Construction projects have long timelines and often substantial local regulatory overhead, especially for electrical power systems at the scale of buildings.
On the other hand, low voltage power for digital devices can scale outward from small partial installations, e.g. one solar panel, one battery, one outlet. Low voltage power already has DIY components for applications such as landscape lighting. And it's not directly in competition with Seimens, Caterpillar, GE, and the local power company. And it can be delivered via DHL or UPS or the local retailer.
After 25 years in the industry, I don't believe that construction scales except for linearly. Of course that may be your goal and it's a good one.
I'm curious if there are other distributed generation techs which could make sense -- 1KW windmills, thermal/stirling/etc.
Solar economics might make it win over everything else, though.
Also might be fun to subsidize solar by selling data. In exchange for hosting/keeping clean/etc. the solar panels, you get most of the power, and a small amount of data, which is then provided as commercial data service to the nearby area.
Terrorism is too real in that part of the world unfortunately as you already know. A 1KW windmill will turn into a 3 ton pile of smoldering scrap metal if the right mouths aren't continuously fed. Also the idea is de-centralizing power generation to skip the transmission step where all the leakage exists.
Random anecdote while reading this: I used candle light few years ago after being forced off grid for a few hours at night. It was marvelous. If it wasn't for fire hazard I'd use it every night.
My kids and I love LED candles. They look like 3-inch diameter cylindrical candles, complete with a wax exterior (which is, I admit, really frustrating at times), and have an LED inside that provides a flickering light. As a bonus, the batteries seem to last nearly forever since it's basically one LED and a small circuit.
>One to Zero : from the 21st century to the Dark Ages, instantly. This is life for billions in the developing world, connected to aging electric grids. One minute you’re in Islamabad watching Netflix while facetiming on your iPad. The next instant, the power goes out. Your Wi-Fi router, lighting, wall mount TV, fridge, air conditioner are off. It’s 115 F. Welcome back to the Dark Ages.
Most people in the "developing world" don't have neither wifi, nor air conditioning. In fact almost a billion lives in shanty towns, in make-shift "homes".
I think saying most people in the developing world don't have wifi or air conditioning is an overgeneralization.
I've lived in Ghana and currently in Zambia and people do have WiFi, 4G and airb conditioning. Granted there are large populations that don't have great homes, the need for electricity (hospitals) is great.
For example, at the teaching hospital in Lusaka, there isn't even running water.
I wish OP best of luck and will be rooting for him.
>I've lived in Ghana and currently in Zambia and people do have WiFi, 4G and airb conditioning. Granted there are large populations that don't have great homes, the need for electricity (hospitals) is great.
That's only in the bigger cities, and the circles expats are commonly associated with. And not even there for a sizable majority. And Ghana is one of the most developed (and less war-torn) parts of Africa.
> The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. Copying others takes the world from 1 to n, adding more of something familiar. But when you do something new, you go from 0 to 1. Tomorrow’s champions will not win by competing ruthlessly in today’s marketplace; they will escape competition altogether, because their businesses will be unique.
Both Gates and Brin "copied" existing ideas and improved them. CP/M and Altavista (I think?). So both examples are of people going from 1 to n, not 0 to 1 as they seem to be suggesting.
Going from 0 to 1 brings you a lot of praise for being a pioneer or innovator, but rarely money. Going from 1 to n seems to at least as hard and it's where the money is.
This doesn't fit as well in a blurb, but a more precisely-stated version of Thiel's thesis is that, since truly competitive markets tend to drive down profit margins, you want to have some big advantage that's hard for competitors to duplicate. MS-DOS's big, hard-to-duplicate advantage was the IBM PC, and Google's advantage is that their search engine was just so much better than others in the early days -- it had a much better ranking algorithm and didn't bloat up its pages trying to be a "portal". For another example, consider Facebook: its advantage is that approximately everybody's friends are on Facebook, and not on, say, Google Plus.
Read the book, it's actually considered one of the best business books of recent years. Despite the title, Thiel covers countless important areas of the entrepreneurial journey to great ideas -> great businesses
Almost all writing I've read from the paypal mafia is ridiculous. Granted they've done some cool stuff, but there is a reason that Robert Downy Jr. decided that when he needed to play an eccentric comic-book millionaire, he followed Musk around.