Does EESTOR Have What It Takes To Be Disruptive?
One of the great myths of innovation is that the best products win out. Nothing could be further from the truth - tons of great products fail. Let’s take a look at an potentially great new product and see what might be in store for it.
In my landmark article on electric cars I briefly mentioned EESTOR, the company which has supposedly developed a new means of energy storage that will facilitate relatively cheap electric cars. Not much is known about this company as they are being very tight-lipped about the technology, business plans, products, and just about everything else.
So now over on Money magazine’s website they’ve gone and picked EESTOR as one of The Disruptors - 11 Companies, 11 Ideas That Will Change Everything. Why? Because of the revolutionary nature of their technology:
EEStor’s device is not technically a battery because no chemicals are involved. In fact, it contains no hazardous materials whatsoever. Yet it acts like a battery in that it stores electricity. If it works as it’s supposed to, it will charge up in five minutes and provide enough energy to drive 500 miles on about $9 worth of electricity. At today’s gas prices, covering that distance can cost $60 or more; the EEStor device would power a car for the equivalent of about 45 cents a gallon.
Money believes that the EESTOR energy unit will obsolete the internal combustion engine. I think they believe this based on the novelty of the technology. To be sure, if it works the way they describe the EESTOR unit is better and more cost effective than any nanobattery in the pipelines. But I think they aren’t considering some of the other factors needed for innovation to succeed. Here are a few:
Business Model - we don’t know much about EESTOR so we don’t know anything about their business model. Except, they’ve got one publicized customer - Feel Good Cars, the company that makes the Zenn. Ostensibly we’ll start seeing Zenns with EESTOR units sometime next year. But in order to, as the Money article said, “(disrupt) oil companies and car makers that don’t climb aboard” there will have to be a few customers that people actually know about.
Networking - again, we know little about them but the only product they are touting is the large electric car-sized energy unit. Are they making smaller units for other industries? Do they have alliances with other companies to integrate these units? I think if they were we’d know about it.
Branding - EESTOR is much like Intel in that their product will be used inside of other products. Like Intel and Nutrasweet, EESTOR has the opportunity to create an ‘EESTOR Inside’ brand and associate this with the quality of the end product - if the end product ever takes off.
Channeling - Automobiles have a vast, effective distribution network. For EESTOR’s product to be disruptive, cars featuring their technology must be available in this channel. On the Zenn website you can look at a map showing Zenn dealers nationwide. I count 34. In contrast there are more Chevrolet dealers than that in my metropolitan area alone. EESTOR technology won’t disrupt anything until established dealers sell Zenn cars.
Customer Experience - what is the unique customer experience in driving an electric car? Silent operation, rapid accelleration, zero emissions, and a coolness factor since most electric cars are pretty unique looking. But it’s the experience of OWNING an electric car that will make or break the ‘disruptive’ factor of the EESTOR technology. And right now, the cards are stacked against them. Refueling is part of the customer experience - people are used to refueling their cars quickly. Although the EESTOR unit boasts a fast recharge time, as I discussed in my electric car article you’ll need special high-power recharge stations that currently don’t exist (and won’t exist until the demand for them exists - Catch 22 right there). So you’ll be stuck with recharging at home, which will take a while. Long recharge times are one of the main things that made the original electric cars unappealing to customers.
It’s also instructive to read the Wikipedia entrance for disruptive technology. Here’s a cool graph from the article:
Note that the disruptive technology enters the market at a low-end.
“Low-end disruption” occurs when the rate at which products improve exceeds the rate at which customers can adopt the new performance. Therefore, at some point the performance of the product overshoots the needs of certain customer segments. At this point, a disruptive technology may enter the market and provide a product which has lower performance than the incumbent but which exceeds the requirements of certain segments, thereby gaining a foothold in the market.
In low-end disruption, the disruptor is focused initially on serving the least profitable customer, who is happy with a good enough product. This type of customer is not willing to pay premium for enhancements in product functionality. Once the disruptor has gained foot hold in this customer segment, it seeks to improve its profit margin. To get higher profit margins, the disruptor needs to enter the segment where the customer is willing to pay a little more for higher quality. To ensure this quality in its product, the disruptor needs to innovate. The incumbent will not do much to retain its share in a not so profitable segment, and will move up-market and focus on its more attractive customers. After a number of such encounters, the incumbent is squeezed into smaller markets than it was previously serving. And then finally the disruptive technology meets the demands of the most profitable segment and drives the established company out of the market.
By definition, high-performance electric car batteries fit into the MOST DEMANDING USE location on the graph. As such it won’t build the grass-roots demand that traditional disruptive products develop.
Contrast this to the approach of Firefly, who is developing the next generation lead-acid battery. In every aspect, their product fits into the innovation effectiveness model better than EESTOR’s. And since the Firefly battery can enter the market at the low-medium quality use level, they can become disruptive easier.
So as it stands, my verdict is NO for EESTOR being a disruptive company, at least in the immediate horizon. But with a bit of a tweak things could be totally different.
Again, as I stated in my original article the path to broad acceptance of electric cars is through plug-in hybrids, and here is where I think EESTOR could make a huge difference. Instead of producing a large unit supporting a 500-mile trip, make a smaller one with a 100 mile range. It should be much cheaper than anything currently being considered for plug-in hybrids. This would immediately solve the networking, channeling, and customer experience issues. It would associate EESTOR with major car manufacturers that make hybrid vehicles (”EESTOR Inside” on a Toyota carries more weight than the same slogan on a Zenn). The vehicles would be available anywhere, and the customer experience is improved by having the gasoline engine for longer trips. Yet you’d still be able to operate as cheap all-electric 75-80 percent of the time, and home recharging wouldn’t be as big a deal.
Great products like the EESTOR unit will fail if the fundamentals of innovation effectiveness aren’t present. The Money article to the contrary, I think EESTOR sits on the edge of a knife.
FOLLOWUP:
Here is something tangentially related that supports the essence of my article: a blogger points out that venture capitalists focus on business model over product. Business innovation comes before product innovation.
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14 Responses to “Does EESTOR Have What It Takes To Be Disruptive?”
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If the technology EESTOR is developing proves to be sound and workable, it would represent a major shift in how we view energy. Our world does not have an energy problem–we have an energy storage problem. EESTOR may be making a major mistake in tying their technology to the automobile–other, more smaller applications may gain faster entry into the marketplace. For example, solar energy, which is now tied to using banks of heavy batteries to store the energy collected but not used. I can think of a hundred uses of an energy storage device if they could perform to the EESTOR stealth hype. If the hype proves to be true, everything changes.
JP Morgan:
I agree which is why I pointed out that to be disrupted they need to produce some ‘low-quality use’ products. That is where Firefly has a foothold. EESTOR could, for instance, produce a high-energy storage UPS solution that could obsolete the entire market from day one. They could produce devices for mobile electronics, automobiles, solar energy systems…and then eventually electric cars.
If the EEStor technology works, and can go into production- they win.
Earlier this year before the information blackhole stabilized around the company, the CEO was quoted (by Tyler Hamilton http://www.technologyreview.com/Biztech/18086/) saying pacemakers to locomotives.
The channel and customer experience/support will follow if it works.
Business model is the easiest thing to get right- hopefully they have already. However- even if they didn’t, it can be saved by getting it right after.
The keys are it works, they can take into production.
More accurately, those are the keys for them to make it disruptive. If it works- someone else could make the disruptor.
I had to think about the response to your comment since I genrally agree with you but not in light of my post. The post you referrenced was focused on the entrepreneur and how the by and large miss the opportunity to connect with the VC’s by beginning their conversations and presentations talking about their product or technology.
Most VC’s invest in businesses not technologies or products. Big VC compensation is through the “carried interest” that occurs at exit and the split between themselves and their limited partners.
In talking about disruptive technologies, I like to reference the work done by Clayton Christensen, “Innovators Delimma and Innovators Solution” and expanded by people like Mark Long and his work at SuperLab. Instead of looking at the technology itself, they look at the Job Needing to be Done and if it is something that is new, for whatever reason, then they might be a new category and then the company needs to validate the market and, if it is substantial, raise a lot of capital to establish themselves as the dominant player.
As an example, Airsis, a San Diego company with a product called PortVision, could not have existed until 2005 when changes were mandated by US and International Maritime organizations. This represented new work that could be done and a “New Category”.
A number of VC’s and Angels passed on the opportunity because, as I heard on VC tell the Airsys CEO, “we don’t consider investing until companies are at about $4M in revenues. Well, if a company is a new category by the definition I am using, there was no market and consequently no revenues! These types of investors will miss these opportunities every time.
One last thing, I am not characterizing all VC’s or Angels. There are a number of VC companies like Union Square Ventures and Mobius Capital Partners who focus on the seed stage companies and find some early new category winners. They generally make BIG money when they do.
In any case, thanks for picking up my earlier post and seeing a connection.
You have missed the key point about Eestor and its disruptive potential for the automobile industry. Eestor expected to be CHEAP ($2,100 for a 50KWHour unit).
So you can afford to have TWO units - one in the home which you charge up overnight on off-peak electricity, then the other in the car. You can then do home recharging in 4-6 minutes (at 3000 volts with a cable with nice thick insulation). When you don’t need to do this, you can satisfy your home peak-hour electricity needs from the home unit charged at off-peak prices (for those regions that have them), which means that the home unit pays for itself.
So no need for recharging at a service station unless you are on a really long journey with no friendly home recharger at the other end. And at $2.50 for a 50KWH 200 mile recharge, your friend or relative will not even think about billing you! Of course most daily commutes are less than 100 miles round trip, so overnight charging would always be fine for them.
I think the first big logic flaw you have in your post is the difficulty of charging. As the other poster mentioned, charging at any station will be rare for most drivers.
The other half of this is your exageration over the problem of having charging stations. There are already chargers in california where they had the EV-1 and other EV’s. The military has well established standards and safety procedures that would be easily converted to civilian use.
Compared to all the engineering and construction involved in digging a pit for the gasoline tanks, and building a station, hooking up a charging station is nothing.
Plus, I think you’ve forgotten the reason behind needing electric cars at all. Oil is a scarce product. Eventually prices are going to rise. With every penny they rise alternatives make more and more sense.
Greg: the charging stations in CA are for low voltage, long recharge batteries that came with the EV1. The fast recharge units like the EESTOR, A123, and Altairnano require much higher power and current to recharge in minutes instead of hours, as I’ve posted elsewhere. And there will be a need for fast recharge in remote locations for the same reason that you need a gas station on a long trip - you run out of fuel. Even if you only use an EESTOR equipped car 25% of the time for longer trips, that will be the lowest common denominator - you’ll still need a gas powered SUV or minivan for longer trips, unless you integrate the EESTOR into plug-in hybrids.
Technopete: If EESTOR is indeed marketing a fast home recharge unit that would be a huge step in the right direction, but it really doesn’t improve the need to have the remote units for long trips. The plug-in hybrid approach fills that need far better.
[...] Energy Tech, Customer Experience, Branding, Innovation, Creativity, Brand, Business. trackback My innocuous little post on EESTOR has become the most popular/infamous article I’ve written yet. So I thought I would follow [...]
I think the item missing is how easy it would be to put up a changing station and the recharge time. It could look like a paring meter in the parking lot of any fast food place. You plug in your car, swipe you card and go in to eat. In 30 minutes you leave with an 85% charge. If you are traveling over 200 miles the human body needs to stop once in a while anyway. What we fail to think about is the daily commute will not require charging as that would be done at home so the 5 minute fill up is not as necessary. This is not sci-fi but available with current batteries and some of the EV’s currently available. See the conversion kits and Tesla. The Eestor will just make it lower in cost.
Caroll
It would be easy to build low power, low voltage charge stations anywhere there’s a decent electrical service to a building. But to take advantage of fast recharge capability you need a lot more power, unless all you’re doing is ‘topping off’ a few hundred watt-hours. Let’s say you park your car outside that fast food place with the need to recharge 40 kWh (close to empty). To do that in 1/2 hour you would need an 80 kW charger. That’s pretty big - at 240 V that would require over 300 amps! In comparison, a 240 volt, 30 amp charger, which you could install at a home, can only deliver 6.4 kW. It would take over 6 hours to recharge. That’s the best you could do at a building with a limited electric service. That’s why you need special high-power recharge stations to ‘fill up’ a high power battery or ultracapacitor.
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Below is a detailed discussion clearly demonstrating the invalidity of EEstor’s claims and targets.
EEstor does not report either a new material, or any data that indicates the ability to store more energy than known titanate dielectrics. EEstor calculates the amount of energy they expect their capacitor to store. A fundamental oversight results in an invalid calculation that is inaccurate by more than a factor of 100! The error is uncomplicated. Simply, energy does not equal ½ CV2 for a capacitor made from a nonlinear dielectric. For all high permittivity ceramics, the dielectric permittivity (K’) decreases markedly with increasing electric field E (dielectric saturation). Energy increases roughly linearly with voltage for these materials, as opposed to with the square of the voltage (ref 2).
Importantly, this is not a case wherein EEstor claims to have made some specific breakthrough regarding this issue. No such breakthrough is reported. There are no energy storage measurements, no permittivity versus field data, and no mention of eliminating or reducing dielectric saturation. Their patent and presentations indicate a complete lack of awareness (or lack of acknowledgment) of this issue. EEstor simply purports to make (or aspires to make) high K barium titanate based material, with a K of 18,000, and ultimately with an incredibly high breakdown strength of up to 300V/um. They then calculate the energy stored as ½ CV2 without comment on the use of this equation.
How large of an error does this cause? Calculated energy density is ½K’E2 when calculated total energy is ½CV2. For K = 18,000, and a field 100 V/um, this invalid calculation gives 800 J/cc. (½K’E2 = (0.5)(8.85×10-12 F/m)(18,000)(1×108 V/m) = 8×108 J/m3 = 800 J/cc). Eight references describing actual studies of energy storage in high permittivity ceramic dielectrics (including barium titanate and BST) are noted below. All of these studies indicate a maximum energy density ranging from about 2 to 12 J/cc, depending on the exact material and the maximum breakdown voltage (which is on the order of 100V/um in most cases). Notably, for the studies involving very high K materials, if the authors had simply calculated energy storage using ½ CV2, as EEstor does, it would have similarly resulted in reported values on the order of 100 times greater than the actual measured values!
Hence there is no basis for concluding EEstor has made any advance in the field, and clear evidence that the sole basis for their claim of unbelievably high energy storage is the simple, invalid calculation. Their aspiration (with no reported results) to triple the breakdown field to 300 V/um in combination with the invalid calculation adds an additional factor of 9, giving an absurd 7200 J/cc (along with all of the corresponding hype and speculation about a new miracle material).
Below are notes regarding the references noted above that clearly substantiate the analysis above (one report of personal measurements, the other seven directly from a Google search on energy storge in ceramic dielectrics). .
1. (My work, unpublished), 1987 – Report to Maxwell Corporation on energy storage potential in high permittivity ceramics. Measurements were made on thin films up to 100V / um on barium titanate and PLZT based dielectrics. K varied as ~ 1/E over much of the voltage range, resulting in an approximately linear increase in energy density with field. Maximum energy storage was 4 – 8 J/cc.
2. Love, Journal of the American Ceramic Society 1990 – Also observed a linear increase in energy with voltage for several classes of high permittivity (up to 12,000) thick film ceramics (barium titanate, PLZT, PMN). Reported up to 5 J/cc at 80 V/um.
3. Triani, et.al, (ANSTO and CSIRO – Australia, 2001 – J. Materials Science and Engineering. They reported 8 – 10 J/cc for PbSr titanate, and noted that the energy densities were similar to those of the best BaSr titanate materials for a given field, but the maximum fields of up to 100V/um (100KV/mm) were superior for the PST.
4. Kaufmann, et.,al, Penn State and Argonne, 1999. DOE Contract Report. They report sputtered BaSr titanate thin films with a K of 500 and a breakdown field of 100 V / um. K decreases to 120, and the energy storage is 11 J/cc. Also reported are data for hot pressed AFE/FE lead zirconate. These had a maximum K of 12,000, and a breakdown strength of 12 V/um, resulting in an energy storage of 3.2 J/cc.
5. Fletcher, et.al, 1996 Journal of Applied Physics D. They report a theoretical analysis based on Devonshire theory of ferroelectrics. Optimal energy density is predicted for materials with Curie Temperatures well below the operating temperatures. Applied to BaSr titanate, the model predicts an energy density of 8 J/cc at 100 V/um. The model was verified in actual materials.
6. Randolf, et. al, (Austria, 1996) – IEEE Annual Report - Studied dielectric energy storage for powders embedded in polymer matrices. They reported using a PbTitanate-PbZnNiobate material with K = 5000, and reported energy densities of 1 – 10 J/cc.
7. Lawless, et. al., Ceramphysics Inc. 1992 report a high permittivity ceramic (K = 8000) for which a maxium energy density of 6 J/cc was observed for samples with optimum breakdown strength.
8. Freim, Nanomaterials Research Corp NASA SBIR Proposal 1998, reports reduced dielectric saturation for nanocrystalline microstructures, and states that “Commercial coarse grain dielectric based ceramic capacitors are ineffective for use in high energy storage and delivery applications since the dielectric’s permittivity decreases sharply when the applied voltage is increased.” They target 5 – 10 J/cc for the proposed new improved materials.
If you aren’t familiar with dielectric saturation, or even if you are and you don’t think back to where ½ CV2 comes from – you miss it. And until you collect information and compare with the calculation, you have no clue it makes a factor of 100 difference in this case. People don’t even realize what EEstor is asserting. If they said, “we are going to use barium titanate based materials, which up until now how only been able to store 8 J/cc, but our barium titanate will store over 1000 J/cc – people would ask themselves how is that possible and what is the basis for that claim.
Then you would find out it’s not just a case of them not providing data or proof of their claims. They don’t even claim to have observed or measured a property indicating their barium titanate would be different. There is nothing left but the calculation. The sole origin for their high numbers is that they simply start with the K of high permittivity modified barium titanate (eg., K = 18,000 not a new achievement), and simply calculate energy = 1/2CV2. Anyone could have done that at any time for any high K material and gotten the same outrageous numbers.
So at that point, one should ask why people get a factor of 100 less when they actually measure it. The answer is well documented and obvious – dielectric saturation. So the only justification for using 1/2CV2 which gives a factor of 100 higher than known and understood measured values, would be if you made a measured observation that you have a fantastic new material that doesn’t saturate at all and stores 100 times the energy.
EEstor has never made any such claim or reported to have made any such obvservation. They just did the calculation. It’s just a mistake.
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