Last week I was challenged by our CTO here at Pano Logic if I had ever heard of selling heat. I assumed immediately he didn’t mean selling electricity or gas, but I have never heard of just selling „heat.“ So I turned to Google, as I was sure this must be a common practice somewhere. Strangely, it wasn’t.

While most of the continental Europe is rather corrupt, there is not too much hope that political will is there to brake centralized heat supply monopolies and separate heat production and distribution (like it is attempted in electricity markets). Further distribution should be split into backbone city heat pipelines and distribution branches to multi apartment buildings. Then each apartment building may generate heat using integrated solar thermal facades or roofs plus heat pumps. A  „smart grid“ markets technology applied to heat would make wonders to heat prices.

Europos Komisijos komisaras Andris Priebalgas rašo, kad „reikės atnaujinti ir rekonstruoti daugumą ES elektros tinklų. Mums reikės pereiti į tokią būklę, kai didesniąją dalį elektros energijos tieks vėjo, bangų, saulės ir fotovoltinės energijos gamintojai. Be to, mes turėsime užtikrinti galimybę kiekvienam pastatui ir namui gamintis savo energiją ir parduoti jos perteklių perdavimo tinklams“.

Tačiau Lietuvoje ši komisaro vizija – utopija, nes mes kuriame vertikaliai integruotą monopoliją, kuri pasmerks vartotojus energetinei baudžiavai, nes jie praranda pasirinkimo teisę ir laisvą prieigą prie skirstomųjų tinklų. Ne tik smulkūs gamintojai negalės rinkos kainomis parduoti energijos pertekliaus – net naujoji atominė jėgainė neturės pasirinkimo laisvės ir bus visiškai priklausoma nuo „Leo Lt“ malonės, nesvarbu, kas bus liūto šeimininkas.

Šiam vertikaliai integruotam monopolininkui politikai suteikė amžiną privilegiją – nevaržomą prieigą prie kiekvieno energijos pirkėjo – nuo didžiausio pramoninio vartotojo iki mažiausio namų ūkio. Kitaip tariant, liūto letena atsidurs kiekvieno Lietuvos žmogaus kišenėje.

Atsimenat „Matricą“?

„… the problem is choice“ – sako Architektas bandančiam įsikirsti kas čia aplink darosi Neo.

Wind turbines, once built, generate almost free electricity – they require only some basic maintenance and servicing. That means that they have a marginal cost of production close to zero (i.e. each additional kWh of production only requires more wind, but no actual spending); that also means that their main long term cost is the repayment of the initial construction cost, in the form of debt repayment and return on capital for the investors.

This has two simple consequences:

• the cost of wind power is essentially set at the time of construction, when the parameters of the financing of the initial investment are agreed, in the form of debt service plus a set return, over an agreed period of time, typically 15-20 years. That cost is fixed and will not vary in accordance with the price at which electricity is actually sold.
• once installed, wind power will always be dispatched – with its negligible marginal cost of production, it will always be cheaper than alternatives, and the only reason not to take such free power will be technical constraints from the network (which I’ll discuss later). When dispatched, wind power will move the dispatch curve, and ensure that the marginal cost of production required at that point ot satisfy demand will be lower than if wind power were not available – ie wind power displaces the most expensive power source that would have been needed otherwise, typically a gas-fired plant.

Taigi ir saulės šiluminės energijos ekonomika yra panaši.

So, where’s the money?  Here’s my answer: to find the money, seek out scarcity. Abundance in some areas inevitably creates scarcity in others. Attention, reputation and talent become relatively scarce in economies of abundance.  Businesses will be well positioned to charge for their services if they can deliver one or more of the following values:

• help amplify attention through more effective advice/recommendations
• foster and protect reputation
• help amplify talent development through rich learning environments

The real winners will realize that amplifying return on attention, building reputation and developing talent are deeply and intricately related – the most valuable platforms will address these needs in powerful new ways.

Here’s my answer: to find the money, seek out scarcity. Abundance in some areas inevitably creates scarcity in others. Attention, reputation and talent become relatively scarce in economies of abundance.  Businesses will be well positioned to charge for their services if they can deliver one or more of the following values:

• help amplify attention through more effective advice/recommendations
• foster and protect reputation
• help amplify talent development through rich learning environments

The real winners will realize that amplifying return on attention, building reputation and developing talent are deeply and intricately related – the most valuable platforms will address these needs in powerful new ways.

Instead of looking for customers for your products, you seek out products (and services) for the tribe.

Tags: architecture

Facebook has missed out on a tremendous opportunity to use recommendation permissioning to annotate their social graph with trust information–that’s an order of magnitude more valuable than the graph itself. I hope they don’t figure it out–then I can do it.

I do not believe folks at Facebook are dumb not to realize value of trusted gestures. Maybe Umair is right about them being evil?

Tags: facebook, trust, reccomendations

Tags: astronomy, observatory

The devil, however, is in the details (about which little has so far been revealed). Specifically:

• Will advertisers pay people to recommend their products to friends? How much?
• Will there be no money involved? In which case, people are just going to recommend businesses and brands because they feel like it? (Honest, but probably not a particularly popular activity, and certainly nothing that an advertiser is going to pay Facebook for).
• If people are paid, will they be paid once, or will they get ongoing payments for downstream referrals and ongoing business? (You recommend your Morgan Stanley broker to a friend. The friend uses the broker and racks up huge commissions and recommends the broker to three other friends. Do you get compensated for this?)
• Will „friends“ reveal that they are being paid? That they are effectively part-time buzz marketing agents and sales reps–or, as with some cases of physical world „buzz marketing,“ will friends just appear to be raving about a particular product because…they love it?…

and

The press release outlined the concept, but it did not address any of this:

Advertising messages will gain distribution through what Facebook has termed the “social graph,” the network of real connections through which people communicate and share information…Users can become a fan of a business and can share information about that business with their friends and act as a trusted referral.

How? Any money involved? Just doing favors for friends? If so, why will advertisers pay Facebook for this?

Facebook users can interact directly with the business through its Facebook Page by adding reviews, writing on that business’ Wall, uploading photos and in any other ways that a business may want to enable.

And people will do this because?

These actions could appear in users’ Mini-Feed and News Feed, Facebook’s popular products that allow users to share information more efficiently with their friends.

Will I be paid to put commercial items in feeds? Will it be clear that I am getting paid?

Facebook’s ad system serves Social Ads that combine social actions from your friends – such as a purchase of a product or review of a restaurant – with an advertiser’s message. This enables advertisers to deliver more tailored and relevant ads to Facebook users that now include information from their friends so they can make more informed decisions. No personally identifiable information is shared with an advertiser in creating a Social Ad.

This could easily get ugly, too. Devil in details.

Social Ads can appear either within a user’s News Feed as sponsored content or in the ad space along the left side of the site.

Again, compensation involved? Favors? What’s in it for the „friend“ who is bombarding „friends“ with an advertising feed? Discounts on future products? Great table next time you visit? Is all this disclosed? Will other friends enjoy it?

As you see early assesment of Facebook as a multi level marketing platform (initially for apps) is justified. As Umair says FB is deeply cynical (and evil).

And more:

Planet Advertising desperately wants to believe we will all trust all our „friends“ who start spamming us with Ads, but they misunderstand the entire dynamic of trusted networks. We trust friends precisely because they don’t do this sort of thing. Once they start, we stop trusting them – its dynamic, not static – you have to keep on co-operating with me to keep my trust, its not a given.

And, as anyone who is familiar with the game theory in behavioural economics will tell you, once we suspect we are being played for a sucker / taken advantage of, we will take revenge – even to our own detriment. The backlash on this, since it has been done so crassly, is going to push Planet Advertising back far further than it need be.

Simple, heh… Where does this leave clueless FB users (or should I say members, „fansumers „???). Sadly, they will be reclyled… once again. Result – time wasted (for them) and some cash maid for Consumerberg.