Annualdinner2017_tonyseba.pdf

From Parking to Parks – Bellevue & the

Disruption of Transportation Presentation to:

Bellevue Chamber of Commerce 2017 Eastside Annual Dinner Bellevue, WA

Tony Seba www.tonyseba.com Copyright © 2016 Tony Seba

10 Oct 2017

A STROLL DOWN

Memory Lane

Copyright © 2016 Tony Seba

th 5

AVE NYC

1900

Where is

the car?

Copyright © 2016 Tony Seba

US National Archives

: Fifth Ave NYC on Easter Morning 1900

th 5

AVE NYC

1913

Where is

the horse? Copyright © 2016 Tony Seba

George Grantham Bain Collection

Photo: Easter 1913, New York. Fifth Avenue looking north.

TECHNOLOGY

Disruption Copyright © 2016 Tony Seba

Rodin – Thinker Photo: Tony Seba

What is a Disruption? WHEN A NEW PRODUCT OR SERVICE HELPS

create a new market AND

significantly weaken, transform, or destroy an existing product, market category / industry

Copyright © 2016 Tony Seba

FAST FORWARD TO 1985

1985

Copyright © 2016 Tony Seba

Image: GMAuthority.com

‘Expert’ Disruption Forecasts AT&T hired McKinsey & Co to forecast cell phone adoption by the year 2000 THEIR (15-YEAR) PREDICTION

900,000 SUBSCRIBERS

They were off by a factor of:

120x

THE ACTUAL Year 2000 NUMBER WAS

109 million Copyright © 2016 Tony Seba

Motorola DynaTAC 8000X from 1984. Source: Wikimedia, Source: Economist

AT&T Disrupted - while $$ Trillions Created 120,000,000 Actual 100,000,000

80,000,000

60,000,000

40,000,000

20,000,000

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

0

Forecast

AT&T’s landline telephony market was disrupted It missed out on multi-trillion dollar opportunities! Copyright © 2016 Tony Seba

Sources: Subscriber Data : CTIA Companies: Company Stock date source: Yahoo!

It’s usually the ‘experts’, ‘insiders’ & mainstream analysts who dismiss Disruptive Opportunities “There's no chance that the iPhone is going to get any significant market share. No chance....” Steve Ballmer,CEO Microsoft, 2007

“The iPhone's impact will be minimal. It will only appeal to a few gadget freaks. Nokia and Motorola have nothing to worry about.” Bloomberg Analyst, 2007

“It's important that [Internet] expectations aren’t cranked too high. The total number of users is still very small...” Copyright © 2016 Tony Seba

Bill Gates, CEO Microsoft,1994

FAST FORWARD TO 2000

2000

Copyright © 2016 Tony Seba

Image Source: State.me.us

Kodak FY 2000: Record Results FY 2000 Financial Results: Revenues: $14 B

"A great brand, a great balance sheet, cash flow. This is a very smart time to be in the picture business" Daniel Carp, CEO, Kodak Letter to Investors, FY 2000

Operating Earnings: $2.2 B Net Profits: $1.4 B

"Picture-taking at an all-time high worldwide:"(1) Record # of Pictures taken: 80 billion. Record # of Prints ordered: 100 billion.

2012 - Kodak Filed for Bankruptcy Protection Copyright © 2016 Tony Seba

Image: GMAuthority.com

(1) Kodak, Annual Report 2000, Letter to Investors, Sources: Data and Image : Kodak

Why do smart people at smart organizations consistently fail to anticipate or lead Market Disruptions? Copyright © 2016 Tony Seba

Rodin – Thinker Photo: Tony Seba

Copyright © 2016 Tony Seba

Technology Cost Curves

Copyright © 2016 Tony Seba

# of transistors doubles (roughly) every two years. Annual improvement rate

~41.4%

1Billion x Logarithmic Scale

Computing: Moore’s Law (1971 - 2011)

Exponential growth in # of transistors Copyright © 2016 Tony Seba

Source: Wikipedia

Technology Cost Curves Technologies Improving at different rates Data Storage – Kryder’s Law Hard Disk $/bit down 50% every 18 months Digital Imaging – Hendy’s Law Pixels per $ - 59% / year Network Capacity – Butter’s Law of Photonics The $ cost of transmitting a bit decreased by 50% every 9 months Li-iOn Batteries $/kWh 14% per year Copyright © 2016 Tony Seba

Source: Wikipedia Image: apple.com

apple.com

Cost of Li-ion Battery Storage ($/kWh)

Projected cost of Li-ion Battery $/kWh

Copyright © 2016 Tony Seba

$500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $-

Assumption: 16% /year Technology Cost Curve

Source: Clean Disruption

Technology Convergence Copyright © 2016 Tony Seba

Convergence 2007 - Smartphone Technology convergence in 2007 to make the smartphone possible Data Storage – Kryder’s Law Hard Disk $ cost per bit down 50% every 18 months Digital Imaging – Hendy’s Law Pixels per $ - 59% / year Network Capacity – Butter’s Law of Photonics The $ cost of transmitting a bit decreases by 50% every 9 months Touchscreen, Li-ion batteries, computing, sensors... Copyright © 2016 Tony Seba

Source: Wikipedia Image: apple.com

apple.com

Key Technologies Copyright © 2016 Tony Seba

2017 - Key Technologies 1. Sensors / Internet of Things 2. Artificial Intelligence / Machine Learning 3.

Robotics

4.

Solar PV

5.

Batteries

6.

3D Printing

7.

3D Visualization

8.

Mobile Internet & Cloud

9.

Big Data / Open Data

10. Unmanned Aerial Vehicles / Nano Satellites 11. Blockchain Copyright © 2016 Tony Seba

Business Model Innovation Copyright © 2016 Tony Seba

Business Model Innovation: Ride-Hailing (Uber, Didi, Lyft, Ola...)

• Uber Bookings > US Taxi Industry Revenues (2016) • San Francisco = Uber & Lyft are 20% of all VMTs • New York City = 500,000 Ride-Hailing Rides per day (2)

(1)

Copyright © 2016 Tony Seba

(1) Rethinking Transportation, (2) Northeastern Univ

Business Model Innovation: AirBnb Marketplace Broker

Copyright © 2016 Tony Seba

Source: Tesla

Business Model Innovation Disruption

Business Model Innovation is as important & disruptive as

Technology Innovation Copyright © 2016 Tony Seba

Exponential Market Adoption S-Curve Copyright © 2016 Tony Seba

Technology Adoption S-Curve (Color TV % US)

ü Tech adoption is not linear but follows an exponential Copyright © 2016 Tony Seba

S-Curve Graph Source: Technology Futures, Inc.

Technology Adoption S-Curves Accelerating

Tech adoption S-Curves is are happening faster! Copyright © 2016 Tony Seba

Graph Source: Blackrock

Copyright © 2016 Tony Seba

How can WE Anticipate Market Disruptions?

Copyright © 2016 Tony Seba

Rodin – Thinker Photo: Tony Seba

The Disruption of Transportation 2020-2030 Copyright © 2016 Tony Seba

abc7news.com

The Electric Vehicle Disruption

Photo: © Tesla Motors Copyright © 2016 Tony Seba

2013 CAR OF THE YEAR: TESLA MODEL S Best-selling high-end large luxury car in America! (2)

Copyright © 2016 Tony Seba

Consumer Reports:

Best Car EVER! (1)

Source: Motor Trends, (1) Consumer Reports, (3_Bloomberg & Tesla

But who can afford an Electric Vehicle? Copyright © © 2016 2016 Tony TonySeba Seba Copyright

Photo: © Tony Seba

IS THE ELECTRIC VEHICLE

Disruptive? (You always need to ask)

Copyright © 2016 Tony Seba

Rodin – Thinker Photo: Tony Seba

1. Electric Motor - 5X more Energy Efficient

Internal Combustion Engine Copyright © 2016 Tony Seba

Electric Motor Sources:ICE - DOE, EM Wikipedia, Image Sources: ICE - Tony Seba, Electric - BradMerritt.com

2. EVs are 10X cheaper to charge/fuel It costs $15,000 to fill up a (gas) Jeep Liberty over five years (Consumer Reports) An Electric Jeep Liberty would cost $1,565 in electricity Improvements in power electronics will increase this 10X Image Source: jeep.com

Assumptions: 12,000 miles/year Tesla Roadster: 4.6 miles per kWh. Ave retail electricity in the U.S.: 12 ¢/kWh 5 year-cost = (60,000 miles * 0.12 $/kWh) / 4.6 miles/kWh = $1,565. Copyright © 2016 Tony Seba

Sources: Consumer Reports, DOE, Clean Disruption

2. Maintenance - Gasoline Car: 2,000+ moving parts (1)

Copyright © 2016 Tony Seba

3. EVs: 10X cheaper to Maintain ICE (Gas) Vehicle

2,000+ moving parts

Electric Vehicle (EV) (1)

18 moving parts

(1)

Transmission, driveshaft, clutch, valves, differentials, pistons, gears, carburetors, crankshafts...

EVs 100X fewer parts Tesla: Copyright © 2016 Tony Seba

Infinite Mile Warranty!

(2) Source: (1) Baron Funds, (2) Tesla Blog

4 – EVs Lifetime 2.5x > than ICE

• EV powertrains last 500,000 miles (800,000 Km) • Tesla (& others) building 1,000,000-mile (1.6m Km) Powertrain • That's 5x-7x ICE vehicles (1)

Photo: Tony Seba

Copyright © 2016 Tony Seba

(1) Rethinking Transportation

5 – EVs MORE powerful than ICE

“University Student team builds EV that breaks world acceleration record (0-100 Km/h in 1.51 sec) beats the $1m Porsche 918 Spyder (2.2 sec)” (1)

Copyright © 2016 Tony Seba

(1) ETHZ news

Anticipating Disruption from Above – Electric Vehicles Cost of EV with 200-mile (320 Km) range Cost of Electric Vehicle

$80,000 $70,000 $60,000 $50,000 $40,000 $30,000

ICE “Affordable SUV": $35-$40K

Avg ICE Car in US: $33K Avg Low-end ICE car US: $22K

$20,000 $10,000 $-

Copyright © 2016 Tony Seba

Clean Disruption © Tony Seba

Assumptions: • 4 miles/kWh, • 50kWh batteries, • 16% yearly battery cost improvement, • EV Cost = 3X battery Source: Clean Disruption

Tesla Model 3 – Record Single-Day Sales for any Product of Any Kind Ever! Tesla Model 3

$ 35,000

Unsubsidized

Autopilot (semi-autonomous)

215-mile range 0-60mph in < 6 secs

0-60

Market reaction:

180,000 cars >$6.3b

Image: Tesla

ordered / reserved first 24h! pipeline first 24h!

Biggest Crowdfunding Event in History: $400m & counting! Copyright © 2016 Tony Seba

Sources: Tesla,

The Autonomous Vehicle Disruption

Image: Wikipedia Copyright © 2016 Tony Seba

abc7news.com

FINANCIAL TIMES

May 5th, 2015

NEVADA APPROVES AUTONOMOUS TRUCKS

Copyright © 2016 Tony Seba

August

th 25 ,

2016

World's First Self-Driving Taxi Debuts In Singapore The first ever self-driving taxis have started picking up passengers in Singapore. MIT spinoff NuTonomy will be offering rides in 2.5 sqmi business district 1North. Delphi also announced autonomous trial in Singapore. Photo : The Verge Image Sources: Renault

Copyright © 2016 Tony Seba

Source: The Verge

CB Insights

May 18th, 2017

44 Corporations Working on Autonomous Vehicles

Copyright © 2016 Tony Seba

April 25, 2017

TESLA TO TRANSITION TO LEVEL 5 FULLY SELF-DRIVING - 2019 "U.S. National Highway Traffic Safety Administration (NHTSA):

Tesla with Autopilot 40% Safer." (1) Jan 2017

Elon Musk: "From Parking

Lot in California to Parking Lot in New York without touching controls by Dec 2017." (2) April 2017

Image: Tesla

"Level 5 Autonomy in two years [2019]. " (2) Copyright © 2016 Tony Seba

Sources: (1) Fortune, (2) Electrek

WHAT ABOUT THE

COST of

Autonomous Vehicles?

Copyright © 2016 Tony Seba

Technology Cost Curves

Copyright © 2016 Tony Seba

What an autonomous car sees Copyright © © 2016 2016 Tony TonySeba Seba Copyright

Graphic Popular Science

Exponential Technologies: Machine Vision (LIDAR Sensors)

2012

Google announced that the cost of technology in its self-driving car was

~$150k

LIDAR Sensor (for Machine Vision) was

$70k

The next generation LIDAR was

$10k

A SV Startup company announced LIDAR for

$1k

By the end of

2013 By Oct

2014 Copyright © 2016 Tony Seba

Image: Wikipedia

LIDAR: From $70,000 to $250 2015 GEN 1 LIDAR

$1,000

2016 GEN 2 SOLID STATE LIDAR

$250

GEN 3 (POSTAGE STAMP)

Copyright © 2016 Tony Seba

$90 Sources: Quanergy,Clean Disruption

Year 2000: World’s 1st 1-TeraFlops Computer ASCI RED - Sandia National Labs

Space = 1,600 sq ft (150

m2)

Power Consumption = 850 kW

Cost =

$46 million Image: Extreme Tech

Copyright © 2016 Tony Seba

Source: Wikipedia

Exponential Tech Improvement: GPU NVIDIA Drive™ PX Dual Drive PX 2 GPU Platform

8 TFlops Power Consumption = 250 W 3,400x improvement

Cost = ~$600 ~653,000x improvement

ü Xavier® (Q4 2017): 20 TFlops

ü Built for Self-Driving Cars Deep Learning Software

ü 1,000x improvement by 2025 Copyright © 2016 Tony Seba

NVIDIA CEO Jen-Hsung Huang

Image and Data Sources: NVIDIA

Autonomous Vehicles = Computer on Wheels Computer Platforms = network effects Winners Take All: only two O/S Survive (PC, Smartphone, Tablets...)

ALL YOU NEED is ONE Platform to Achieve LEVEL 4-5 Copyright © 2016 Tony Seba

Image: © Copyright Tony Seba

High Definition 3D Mapping & Localization –> L4/L5 Computer Platforms = network effects Winners Take All: only two O/S Survive (PC, Smartphone, Tablets...)

ALL YOU NEED is ONE Platform to Achieve LEVEL 4-5 Copyright © 2016 Tony Seba

Image:Source © Copyright DeepMap

Are consumers ready for autonomous cars? 2.8 b people

Copyright © 2016 Tony Seba

Source: Cisco Systems

China 70% Brazil 95%

India 86%

Copyright © © 2016 2016 Tony TonySeba Seba Copyright

Images Source: chinawshisper.com, inrix.com, ryot.org

Cool! I can and also while NOT driving! BUT WHAT’S THE

Disruptive Impact? Copyright © 2016 Tony Seba

Rodin – Thinker jenningswire.com Photo: Tony Seba

Transportation As A Service

Copyright © 2016 Tony Seba

Photo Tony Seba

Cars: Huge Waste of Space and Money nd 2

Cars = largest Capital Expense Ave. new car costs = $33k

Cars are parked 96% of the time! (1)

4% Asset Utilization is a disruption waiting to happen!

Copyright © 2016 Tony Seba

Photo: Tony Seba

Image: Tony Seba Source: (1) Donald Shoup

On Demand + SELF-DRIVING + ELECTRIC:

Convergence of Technology & Business Model Innovation

Copyright © 2016 Tony Seba

Source: (1) Clean Disruption Source: RETHINKX

TaaS - Transport-as-a-Service: On Demand, Electric, Autonomous Transport As A Service (TaaS) Ride-Hailing biz model Electric Vehicle tech Autonomous Vehicle tech Driving time goes from 4%

to 40% Vehicle Asset Utilization goes UP 10X Cars can drive 100,000 miles/year (up from 10k miles/yr) Copyright © 2016 Tony Seba

Source: (1) Clean Disruption

Do the Math: A-EV far cheaper than A-ICE Autonomous Internal Combustion Engine Vehicles can't compete with Autonomous Electric Vehicles. TaaS companies that use A-ICE will either go bankrupt or switch to AEVs

Copyright © 2016 Tony Seba

Source: (1) Clean Disruption Source: RETHINKX

Transportation As A Service (TaaS)

On Demand

Copyright © 2016 Tony Seba

Autonomous Electric Vehicles (AEVs)

Owned by FLEETS not individuals

TaaS: 4x-10x Cheaper than IO Vehicles

Copyright © 2016 Tony Seba

Source: (1) Clean Disruption Source: RETHINKX

95% of Passenger Miles TaaS (AEV) by 2030

Copyright © 2016 Tony Seba

Source: (1) Clean Disruption Source: RETHINKX

Disruption of Auto Industry: End of ICE & IO Copyright © 2016 Tony Seba

abc7news.com

U.S Vehicle Fleet Shrinks by 80%

Copyright © 2016 Tony Seba

Source: (1) Clean Disruption Source: RETHINKX

Annual Demand for New Vehicles Shrinks by 70%

Copyright © 2016 Tony Seba

Source: (1) Clean Disruption Source: RETHINKX

Disruption of Oil Industry Copyright © 2016 Tony Seba

abc7news.com

Global Oil Demand Peaks at 100mpd 2020 Drops to 70mpd 2030

Copyright © 2016 Tony Seba

Source: (1) Clean Disruption Source: RETHINKX

Global Equilibrium Cash Cost ~ US$ 25.4/bbl with 70mbpd demand

Copyright © 2016 Tony Seba

Source: (1) Clean Disruption Source: RETHINKX

Up to 70% of Deepwater Oil, Shale Oil, Oil Sands Uncommercial = Stranded Assets

Copyright © 2016 Tony Seba

Source: (1) Clean Disruption Source: RETHINKX

Implications

Copyright © 2016 Tony Seba

abc7news.com

TaaS Disruption Implications Financial: money in your pocket Saving per Household: $5,600+ / yr U.S. Disposable Income increase by $1 Trillion / year Productivity increase of $1 Trillion / yr time freed from driving

Social: Increased mobility for all Elderly / Pensioners Disabled Young Poor, Unemployed, Underemployed Copyright © 2016 Tony Seba

Image: Tony Seba

Source: RethinkX

TaaS Disruption Implications Environmental & Geopolitical Environmental 80% decrease energy consumption 90% decrease in CO2 emissions Decreased use of materials (20 vs 2000 & 200k vs 500k)

Geopolitical Oil Energy Independence Foreign Policy: energy security less critical

Image: Tony Seba

Copyright © 2016 Tony Seba

Source: (1)Source: Clean Image:Disruption RethinkX Tony Seba

TaaS Disruption Implication: Parking will be Obsolete

Car Fleet ~80% smaller 80%- 90% vacant parking spots in CBD Instead of money-losing parking, Bellevue can build green parks, walkable & social space AND increase the tax base with new business and residential development Copyright © 2016 Tony Seba

Source: (1) Clean Image:Disruption Tony Seba

TaaS Disruption - Parking Obsolete: 80%+ Vacant

Copyright © 2016 Tony Seba

Source: (1) Clean Image:Disruption Tony Seba

Walkable Cities -> Wealthier, Healthier, Cleaner Evidence: Correlation between

Correlation: Walkable Urbanism & Per Capita GDP of Metro Regions

Walkable Cities and Wealthier Cities (GDP per capita)

This research does not indicate whether walkable urbanism TaaS will also give access to causes highly educated persons to move or stay in metro areas, transportation many don't have or whether metroto areas becomewho more walkable urban because of higher-educated persons. Previous research suggests, access today though, that educated people prefer walkable urban places but • doesElderly, Disabled, Young, Sick, not indicate the causal connection. Richard Florida calls walkability a magnet for the creative class, and a recent study by Low-income Wisconsin PIRG finds that more than 80 percent of college students think having transportation options other than driving was either somewhat or very important in where they choose to live.14 Copyright © 2016 Tony Seba

$80k $70k Metro per Capita GDP

This Disruption of Transportation will help us create Walkable, Vibrant, Diverse CitiesThe that talent whowalkable attract GDP attract per capita of the the three highest-ranked urban metros ($60,500) percent economic higher than the GDPgrowth per capita businesses whois 52drive of the lowest three walkable urban metros ($39,700). and increase the tax base.

(2012 per capita GDP, chained 2005 dollars)

$60k $50k

R

$40k

2

= 0.57

y =73,024.59x + 36,492.00

$30k $20k $10k $0 0%

5%

10%

15%

20%

25%

30%

35%

40%

% of Metro Region’s Office & Retail Space in WalkUPs

45%

50%

Once In a Lifetime Opportunity: What City Do We Want to Be?

Car Market: From Copyright © 2016 Tony Seba

B2C to B2B2C

Back to the Future

Copyright © 2016 Tony Seba

abc7news.com

On the Cusp of the Fastest, Deepest, Most Consequential Disruption of Transportation in History

We are here 2017

Copyright © 2016 Tony Seba

US National Archives

On the Cusp of the Fastest, Deepest, Most Consequential Disruption of Transportation in History

We are here 2017

Copyright © 2016 Tony Seba

2030

This is NOT an Energy Transition This is a Technology Disruption

Copyright © 2016 Tony Seba Copyright 2016 Tony Seba

Photo: Tony Seba

Thank You! Copyright © 2016 Tony Seba

Photo: NASA

From Parking to Parks – Bellevue & the

Disruption of Transportation Presentation to:

Bellevue Chamber of Commerce 2017 Eastside Annual Dinner Bellevue, WA

Tony Seba www.tonyseba.com Copyright © 2016 Tony Seba

10 Oct 2017