T Boone Pickens, Wind Power, And National Security.

Posted on July 14th, 2008 by Zach.
Categories: General, Industry, Renewable Energy, Systems of the World.

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Does this look like the traditional face of an environmentalist? Take a look at this interview with T. Boone Pickens about why he is investing in Wind Power in West Texas:

Pickens Article on Investing in Wind

The concept of viewing our dependence on foreign oil as a historically massive transfer of wealth is excellent. It allows people on every side of the energy debate to frame it in a way that shows what is critically important about our dependence on oil.

I am a fan of locally produced energy. Even when we mine and burn coal, at least as a country we see the impact on our soil. Divorcing ourselves from our consumption (and consumption of anything, not just oil) is one of the first mistakes we need to rectify, and in a hurry.
I am a firm believer that once you frame consumption, reduction becomes a set of quantifiable goals. If you don’t have that frame, you have no place to start.

Now I am not naive enough to think that a lifelong oil guy like T. Boone Pickens is doing this out of the goodness of his heart. Like all of us he has larger motives – in his case mainly profit motives. In fact I would put money on the fact that this story is way more complicated than it seems.

Pickens has been taking advantage the odd regulations regarding drilling in Texas and is buying up land above a set of aquifers. So along with lobbying himself into a Water Authority and distributing water into the Dallas metropolitan area, I have no doubt that wind generated electricity can be easily transmitted down those same pipe lanes.

Eminent Domain is a wonderful concept.

If it turns out that there is Natural Gas on his land, then you can see the whole plan come together – one $2 billion pipeline, three critical services.
There is big money in this thing for Pickens, and all in all it is pretty brilliant if totally shady.

But in the end, I sit here and ask myself; “Do I Care?” And the answer is no. From the outset of embarking on this journey, I told myself that I didn’t care why people came to the table as long as they came. Well Pickens, came to the table because he saw huge money in wind power. I may not personally love all of his reasons, but his reasons frame the problems in ways many other people can identify with. And for that I am excited to welcome an old Oil Wildcatter to the party.

Let’s talk more about the transfer of wealth, it is a great point and one that I never would have conceived of if not for Pickens’ approach. It is simple and straight forward, and it matters.
Here is the You Tube explanation of the plan.

Here is the full website: www.pickensplan.com

Judge for yourself.

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The Weeds Pt. II: Energy Level

Posted on April 4th, 2008 by Zach.
Categories: General, Industry.

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The second point about The Weeds stage I wanted to bring up is energy. Every day I bump into people who are so pumped up about their product or idea, that it seems like they have been snorting NoDoz for 72 hours. I don’t understand these people. They are like happy little elves, you just want to smack them.

Now I’m not talking about the start up phase here, because we all feel like that to begin with. Start Up is frenzy. It is a set constant firsts. First press coverage, first product roll-out, it is like raising an infant – everything is new. It is a constant adrenaline rush basically, you feel like you are going to change the world in some way.

No I am talking about the people who are four, five, six years in and are still gonzo over their idea. I don’t get these people. Now maybe that works well for them, and if so – great. For me four years in, the novelty has worn off. I still love what we have started, I love what we make, but I can’t be on that high anymore. It’s kind of like claiming that your are “just experimenting” with heroin in your forth four year. I hate to break it to you buddy, but four years in, what you got there is called a habit.

My feeling is that in The Weeds, you need to try and remove yourself from the extreme highs and lows of the startup. The Weeds are a grind – product development takes time, you have little freak outs where you panic that you may have invested four years of your life into this thing and you can’t see the horizon (stability, reward, etc.). In these moments it is essential that you not be riding the wave of startup adrenaline. On the good days you get all crazy (see the NoDoz reference above), and on the bad – well let’s just say the lows can sometimes be rough.

It is difficult, but these days I try and remain somewhere in the middle, avoiding the highs and lows that are so tempting. I try and socialize as much as I can where work is not the topic of conversation, where every interaction feels like something I should take advantage of in the work context. I am trying to find a set of things that have absolutely nothing to do with work to keep me grounded. I learned this lesson the hard way in the late 90’s trying to start a Non-Prof in San Francisco. The highs were high, but the lows were really hard, both on me and I assume the people around me. Live and learn.

Yet this is all fine and good, but somewhere you have to mix in enough passion to keep what your business moving forward, and that is an equally difficult task. So how to balance? Where do you find inspiration? Vacations help, they give you a little space to reinvigorate. But I was also recently was reminded of a good solution when I walked into a new cupcake business around the corner.

I am totally jealous of their simple business model – bake cupcake, sell cupcake, how deliciously simple.

I managed to fight the crowds at the door on the first day, and said hello to one of the founders. Her eyes were bugging with excitement as they had sold out of their full day’s worth of cupcake supply in the first 45 minutes of the day. The space wasn’t quite done, and in the frenzy one of the guys who was building out the space (clearly a friend, or husband, or relation) stopped to pitch-in, running the cash register. So much excitement, so much frenzy, I returned to the office with a proximity startup high…and of course an excellent Red Velvet cupcake.

Mmmm… Go on with your bad self Georgetown Cupcake.

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In The Weeds

Posted on March 27th, 2008 by Zach.
Categories: General, Industry.

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I have been in The Weeds recently. It’s a place that start-up addicts know well because it happens to us all. In my humble opinion, The Weeds are that stage between the start-up frenzy and the full fledged company. I am not actually sure if other people use the term, but I like it because that’s exactly how it feels.

In our case the weeds have huge upsides – everything we have going, seems to be booming along: Reware and Juice Bags are going global with growing sales around the world, the PowerCube’s first couple of units are rolling off the assembly line and are due to be deployed this summer, and a couple of new projects are looking like they are set to pop in a big way.

That’s the upside of the weeds: If you make it this far, you have settled into a model that actually works. You have figured out your processes and managed to the survive the huge challenge of covering expenses. Every business in the startup frenzy has enormous obstacles that look like total doom. If you make it into The Weeds, then you have managed to avoid most of those. Congrats.

But there are serious downsides to The Weeds too. The vast majority of these arise from the fact that in The Weeds you suffer from having all of the problems of the start-up stage nipping at your heels, while at the same time “real company” issues are booming onto the stage for the first time. There are two that pop instantly into my head as I write this; the never-ending challenge of managing cash flow, and managing energy level.

Managing Cash Flow

In the startup stage you don’t really worry about this, you are so psyched to be selling anything, so excited to be in existence at all, that this doesn’t come up all that much in discussion. Overhead is lower in your garage, you beg/borrow from friends on an almost constant basis to get what you need done. Life on the cheap. The hustle.

The Weeds bring office space. Friends are not quite as excited to loan out their services the fourth time, and you are tired of asking. The Weeds bring cash crunches where larger transactions from customers and suppliers don’t always overlap in time to pay the bills. Cash Flow management is a fascinating thing to ponder from the outside and a total pain from within. You see plenty of money coming and going, there might even be a fair amount in the bank account, but there is also something always looming on the horizon that is going to suck that cash away. In The Weeds while your overhead is pretty mature, your networks of distribution and overall sales need to catch up.

Cash flow management is the single largest challenge to companies. Recently I have been talking to people who run successful businesses much larger than ours, and it is frightening to realize that these issues never go away. The numbers you are dealing with just get bigger. Oh Joy.

Founder’s salaries are always the first casualty of cash flow. The Weeds often force a decision between your own paycheck and something that will help the company grow. You own the company, you believe that it is a great investment in your future, so of course you are going to sacrifice a small, short-term paycheck for long term success. But there comes a point where you need to pay for the day-to-day of your own life, you can’t always be working for the future.

Reluminati, has had two points where we have had to make a leap of faith in the cash flow department. The first was a couple of years ago when we needed an office big enough to grow into. We were worried that our sales per month would not cover the rent, but the space made us a real company and so we took the risk anyway and made it work.

The second leap came recently in trying to figure out how to pay ourselves consistently, essentially factoring in our work as a cost to the company. We have taken that leap as well, and though it is stressful at times, it seems to be working. I’m not sure if this is as huge a step for everyone as it is for me, but I really think this is when a company becomes real.

Managing this has nothing to do with the amount of money coming in, because there is always plenty of that. It is about managing the flow of cash successfully. This is when it feels like you have a job, that playtime is over. It feels good.

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Laziness and the Environment.

Posted on June 18th, 2007 by Zach.
Categories: Industry, Pop-Culture, Sustainability.

This title looks like I am going to rail on people that are too lazy to care about the environment.

Not True!

No, as I have voiced here before, I am at my fundamental core – lazy. With so much change going on in the world I often feel like I just need a nap. Really it is the personal decision making process that is so exhausting. Should I get the Organic socks, or the recylced ones? Is a hybrid better or worse than running Biodiesel? What if my ethanol is from a corn based feedstock and not Switch grass or cellulosic waste product? Does that make me a horrible person? Should I reclaim some furniture that looks bad or buy new sustainable harvest wood designs?

Can you hand me that pillow, I’m just going to lie down here for a sec…

Fortunately there are many people out there to guide us through our new enlightenment. A Beacon of Green Light as it were. One great example just came out:

The Lazy EnvironmentalistThe Lazy Enivronmentalist’s Guide to Green Living.

Full Disclosure: The Author Josh Dorfman is a friend and has always been a great supporter of Reware.

Here is what I love about Josh’s approach in everything he is doing: Environmentalism comes across as accessible to everyone, with a complete lack of “holier than thou” speak. He makes this stuff fun and the book reflects that approach. I totally recommend it as a easy starting point to figure out how to work some of this stuff into your life.

This is Josh’s first book, but he has become a bit of a green media mogul – you can check out his Radio program on Lime (Sirius Satellite). Both are good, interesting places to start in the green thing.

And most importantly none will make you feel like you need to lie down for a bit.

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Feeling The Love

Posted on June 7th, 2007 by Zach.
Categories: Industry, Pop-Culture.

Recently on their blog, Thought Kitchen, our idols over at Nau gave us a little love. We consider this an honor, it being the coolest company in the world and all.

What Nau is trying to do as a company is essentially revolutionize the clothing manufacturing process. They’re taking the movement that Patagonia started and are heading to the next level. One particular piece that we love is the “Detailed Specs” section, where customers get a peek at the origins of their fabrics, their manufacturing, and a little process.

Here is how rock star Nau is: Reware was recently featured on the Today Show (Many thanks to Matt Lauer and our friend Paul Hochman, who did us right in that piece incidentally). I called my Mom to tell her we were on and she made her typical supportive noise – sweet but not overly excited. When we hit The Thought Kitchen page, she was the one calling me! And she was fired up, I think she told everyone she knows. So there you have it Nau, you beat the pants of the Today show for cool factor among the fam.

The clothing is fashion forward as well as recycled, organic, and other good stuff. Definitely check them out. After all, you need something cool to wear under your Juice Bag, we suggest the recycled polyester Riding Jacket. Sick.

Big Up to everyone over there, keep making us envious.

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The Matrix – Designing a Good Consumer Filter

Posted on May 14th, 2007 by Zach.
Categories: Industry, Sustainability, Systems of the World.

When Socially Responsible Investing (SRI) first started to grow there was inherent challenge that had to be overcome: If a company like Nike was recycling their shoes and a significant leader in waste reduction, but employed 10 year olds for 20 cents a day, were they an acceptable investment? Some people would say; “Yes, the environment is all that matters and Nike is doing a good job innovating on that level.” Others would say; “No, how can you claim to invest in a socially responsible way if you are abusing the labor force that is making the product?” To their credit Nike has made progress on their labor practices over the years, but the reality of these reactions is that both are correct and this ended up being a major barrier for SRI breaking into the mainstream.

The solution that was developed over a number of years was really quite ingenious in a free market sort of way – let the consumer decide what matters. SRI managers have created issue based filters for investing. Care about the environment? Here is a list of companies that are acceptable using that filter. Is labor your issue? There is a filter that fits. In many cases the filters have become even more nuanced allowing consumers to associate different “weights” to each issue based on their own priorities. Combine that with more traditional investing filters (Risk analysis, Diversification, Sector investing, etc.) and you have a very smart approach to the investment process.

This has been incredibly successful, and we have watched SRI fund management grow to exponentially as a result.

I bring this up because Reware is struggling with similar issues as a company. We like to think that we are part of a shift in product creation. We try to integrate concepts that matter in the world – local production, low toxicity, recycled material science, a little environmentalism, minimal packaging, and so on. Basically with every product, we would want a narrative that falls within our vision of next gen product design. This is what we believe is good for the world, and we know this is where the money is. We are after all in in this thing both to change the world and make money, pro-market force peeps that we are.

The annoying thing about being what’s next, is that the systems of the world are conspiring against you pretty much at every turn. As a small company we don’t have the resources to force our vendors to adjust to our needs. And this is a hard thing, something that I am sure Patagonia struggled with in the early days, that Nau is going through, and Arbor Sports has had to deal with. Everyone trying to adjust the status quo in product design runs into these systems like a brick wall.

A tangible example:

Right now we make three lines of solar bag. Our favorite is the ES line. With three styles (Daypack, Messenger, and Backpack) and three or four colors, we sew these bags in Texas. The quality is second to none and that is always an important factor. Plus the best part of this line is the fact that all the fabrics are made from recycled soda bottles. It is a bag that fits all of our goals – Production in the US, recylced fabrics, solar on the front to charge to gizmos – pretty great right?

Thank you, I will accept your humanitarian award, but please hold the applause.

A down side to this fabric is that it is not currently in wide distribution. What this means is that there is a limited supply in the marketplace, production keeps shifting from one factory to another, and the low toxicity dyes and process pieces don’t always work quite right. The company we work with to sew the bags struggles because they too are doing something that has never really been done and these barriers screw up production. This is a problem because often we cannot rely of a steady stream of bags. We then cannot offer these bags to larger clients because we worry we will not be able to supply them. I feel my ulcer flaring up just writing about it.

So problem #1: Production of the environmental fabrics is amazing, cool to be a part of, but sometimes unreliable.

The answer for us has been to use a more traditional system of sewing with a great company in North Carolina. Still in the U.S., but made for the most part from traditional Denier or Ballistic nylon. Still with the solar. So we have lost the recycled fabric piece with this style (we are experimenting with some organic fabrics), but gained reliability of production. This gives us the ability to sell more widely and have more faith that we can deliver. Plus making in the US we have a 4 week turn around for the most part, meaning that our response to the market is fast. Really fast. Speed and reliability comes at a price though and it is a steep one. The bag we sew in NC we could probably make in China for a 1/5 the price. That is a huge price discrepancy and effects the end cost to the consumer as well as our bottom line.

Problem #2: North Carolina is expensive

Anyone who manufactures overseas will tell you that product development is a headache – especially if you are a small company. The reality is, China is just far away and that leads to complications. No offense to Mr. Friedman, whose picture of the flat world is a good one, but in my experience it not so much seamless as navigating the seams themselves. You basically need a person on-site that you know and can communicate effectively with. Or you need to go yourself, and often. But there are huge benefits – the low costs are the primary one. This may seem cold because we all like to think that we would pay more for our stuff. The reality is that we will not. We have an idea about what things will cost and as consumers, we will not deviate from that. This is why China is booming, and industries like sewing are disappearing for the US. It just is what it is, and there is no avoiding it.

Problem #3: Overseas production is complicated for small companies. It has long lead times per order. We have to worry about labor conditions, and environmental usage.

So there is no silver bullet here that solves all of our problems. This is and will become reoccurring theme of the fundamental industrial shift we are going through as a country, as a world. There is no single solution in Energy, in Waste, in Water Conservation – in a every area it will take a basket approach to solve problems.

So our dilemma has been this – How do you quantify the narrative of your products? Is a future bag made in China of recycled fabrics better, or worse than a Denier Nylon bag made in the States? Is the fact that production is inconsistent for astounding products better than average products that are reliably produced?

What do consumers value most in their so-called “green” products?

For a while I have been agonizing over this, and in the end the SRI model that I love so much is a good starting point. We are attempting to create a matrix to products that allow the consumer to weight what is important to them. We will have products from overseas, we will have products made in the states. We will have expensive “Boutique” or “Limited Edition” uber green bags. We will have more traditional fabrics with solar on them.

In the end we will leave it all up to the consumer to work out what is most important. Hopefully we will grow to a level that we can dictate our needs to producers and get everything we want in one product. – and really what is more greenie-capitalist America than that?

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The Breaking – More Martha Stewart or Road Warrior?

Posted on March 30th, 2007 by Zach.
Categories: Industry, Systems of the World.

We are beholden to tentative social systems like never before in human history.

Usually when that idea pops into my head, I am freaking out about the coming Oil crisis. Oil dictates so incredibly much of my world, it is crazy. The success of Reware for example is utterly and completely dictated by fossil based fuels. We build Solar Bags in which, let’s say for argument sake, 80-90%% of our process is dependent on Oil – The photovoltaics include materials refined using fossil based energy, they are then sealed in a special plastic coating (all plastics are petroleum based), they are then shipped (Using diesel fired trucks, trains, and planes) to a factory whose machines, heat, lights, and arriving workers are all powered by fossil energy. They cut rolls of various Nylon Fabrics (and if you own nylon, you own a nice little piece of woven oil my friend) into bags that incorporate the solar. Bags are then shipped to a warehouse, and then shipped to your doorstep. Let’s see, is there any step that isn’t totally dependent on the oil economy for us? Nope.

Think Oil price fluctuations matter?
And we are not special, you can take apart any industry and see the exact thing.

The systemic use of Oil in the world is astounding and we have two brand spanking new industrial behemoths developing in India and China. There is no question that there will be some shortage in availability will effect the cost of doing business AT EVERY SINGLE STEP for us, and the US economy at large.

Not convinced? Talk to Matt Simmons – a former Bush energy advisor – about what he thinks about the Oil that exists in the oilfields of the Middle East, or what he anticipates the growing demand to do to our own national security. Or how about James Woolsey, former CIA head under Clinton. Or Amory Lovins, who has forgotten more about this issue than I will ever know.

All of them will tell you that the coming Oil shock is a big deal. Interestingly though, it is not the only system we hang onto by a thread. There are other examples; among others Food Distribution, Clean Water Access, hell Traffic Volume – are all systems that stand precarious if you start to analyze them.

Imagine for a second all communications stopped on the planet. It is not that hard to spin a scenario where all satellite communications were knocked out, and not just from a rogue missile system Take this story about a coming solar storm.

Oh yeah, you read that right, Solar Storms! As if we didn’t have enough to worry about right? But I don’t bring this up in a doomsday mood – we’ll leave the killer asteroid we should worry about for another time. No, it looks like this storm won’t disrupt much, but it served as a mechanism to think about how critically important global communications are to the world we live in, and are only getting more so.

The question I find myself asking is what would be the impact of this. Seriously this is what I am wondering – what happens when the systems of the world come to a grinding halt? The easy answer is that I need to start buying leather chaps and spiked collars for my posse of punked out 80’s style post-apocalyptic warriors. We could drive around in dune buggies looking for trouble.

As exciting as that vision is, it seems like there might be a more nuanced answer. Will it be Road Warrior, or Martha Stewart, this world where systems break down. Is there good in system breakage? A rise in local economies, a subsistence workday, a return to natural fibers and a lessening of mass produced goods anyone? Any takers?

I don’t have all the answers, but I am curious. I can’t help but think that with all the doomsday projections, there are some serious unrealized positives. And I don’t call me a Luddite, I am just spinning the question. The Amish live a decent lifestyle, with happiness, family, and healthy economy. Is it unreasonable to look at that and wonder what would become of us should the systems we rely on so heavily disappear?

My current lifestyle personally would come to a grinding halt, especially workwise. I count myself as pretty handy, but the reality is I like the creature comforts of our systems. I don’t want to work in the fields dawn til dusk. I am a product of the digital age. I don’t remember what it was like before email – partly because it has become so ingrained in the business and personal world, and partly because I never worked in the pre-digital age. I have some vague recollection about how you do research without the internet, but sourcing materials for Juice Bags?

Now how would I go about that exactly? No really.

Update 4.5.07: It appears the Solar Storm will screw up systems. GPS and general global navigation may feel the heat. Sorry about the pun.

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