Pioneer Mortality and The Osborne 1

© Can Stock Photo / scowill

In April 1981, Adam Oborne debuted the very first portable computer. His company was the fastest growing in Silicon Valley. You can see how popular the idea of portable computing got by visiting any coffee shop any day of the week. Laptops, tablets and smart phones are all descendants of the Osborne 1.

Yet Osborne Computer declared bankruptcy thirty months later, and disappeared completely by 1986. This is fairly common in the history of commerce, the story of the pioneer that did not survive.

Portable computing as a concept was separate and distinct from its first manifestation, the Osborne 1 computer. This is a key to understanding subsequent manias based on pioneering technologies or concepts.

We humans are a creative, inventive species. There always seems to be an exciting concept or something new that will really change things. Steamships, railroads, petroleum, airplanes, automobiles, telephones, radio, television, cell phones…something new is always on the horizon. These things have created new ways of doing things and reshaped our lives and society.

But with each of these revolutionary ideas, there was a difference between the successful path of the idea, and what happened to the first manifestations or demonstrations of that idea.

The Osborne 1 computer was a twenty-four pound beast with no battery, a three inch screen, and now-laughable technical specifications. The concept of portable computing was worthwhile, revolutionary, and eventually changed the way we live and work. But the first manifestation did not even turn out to be sustainable or successful.

Just as the key uses of the internet took time to emerge and evolve, the most important uses of any new idea probably do not exist yet. In the internet boom of the late 1990’s and early 2000, some investors made the mistake of confusing the powerful concept with its initial manifestations. It did not end well for them.

There are powerful ideas circulating today based on revolutionary concepts. They may eventually reshape our lives, institutions, and society. When you come across one of these intriguing situations, please remember the lesson of the Osborne 1. Clients, if you would like to discuss this or anything else in more detail, please email us or call.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.


The Big Payoff from Automobile Evolution

© Can Stock Photo / esperanzacarlos

Clients know we’ve been investing in different facets of the auto business for years. It is a vital industry. People need to go places, after all—to school, work, and play. The more we research, the more interesting the future becomes.

Here are some of the surprising things we have learned:

Going a mile in an electric vehicle, or a hybrid in electric mode, costs only three cents. Gasoline takes a dime. The seven cent difference adds up to $175 billion dollars annually in the US. 1

The idea of ‘autonomous vehicles’ or self-driving cars seems fantastic today. Rapid advances in radar, other forms of sensors, artificial intelligence, and communications are making the technology a reality. We will see it, at least in some form, in some places, in the not-too-distant future.

Engineers project that autonomous vehicles will experience a 90%-to-95% reduction in accidents compared to human-driven vehicles. We thought about what this could mean, and ran the numbers. Across the whole country, this means thirty thousand fewer traffic fatalities per year. Two million injuries would be avoided. In economic terms, $135 billion in property and human damage would be prevented every year, if the accident rate were reduced 90%.2

In a related development, the cost of solar electricity is falling about 10% per year3. This makes sense, because solar power is a technology and the price of technology tends to fall year by year. So the cost advantage of electric propulsion may grow even larger.

With these compelling economic factors, it is easy to forget that the price of electric vehicles is not yet low enough to be competitive with internal combustion engines. But as a client reminded us recently, “Wide screen televisions used to cost $12,000, too.” As volumes go up, prices will come down. We know how this works.

The benefits we’ve cited above amount to thousands of dollars per year, per household. This doesn’t count the time we might gain from not having to drive, or the significant health advantages from reduced vehicle emissions.

The prospects for a healthier, wealthier society are exciting. Change usually creates winners and losers. You know we will be studying these issues intensely and watching closely. Please call if you have questions or comments about how this may affect you.

1Calculated from US Department of Transportation figures

2National Transportation Safety Board statistics

3Farmer, J. Doyne & Lafond, Francois. How predictable is technological progress? Research Policy, 2016. Volume 45, Issue 3.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.