The 5% rule

True technological disruptions typically follow non-linear paths: Adoption rates happen slowly—then suddenly and all at once. We are now at that point with electric vehicle adoption. As Bloomberg noted this week, EV adoption just crossed the crucial 5% threshold in the United States. “If the US follows the trend established by 18 countries that came before it,” Bloomberg writes, “a quarter of new car sales could be electric by the end of 2025. That would be a year or two ahead of most major forecasts.”

 Even this prediction of 25% by 2025 may prove to be conservative. Consumer preferences can (and do) shift rapidly for certain products—think of the iPhone in 2007. In Norway, for instance, over 80% of all new car sales are now pure EVs. The question then becomes, of course, if consumer demand shifts at an exponential pace, which companies are then poised to benefit… and which will be made obsolete? (H/T Christopher Tsai)

“It makes sense that countries around the world would follow similar patterns of EV adoption. Most impediments are universal: there aren’t enough public chargers, the cars are expensive and in limited supply, buyers don’t know much about them. Once the road has been paved for the first 5%, the masses soon follow. Thus the adoption curve followed by South Korea starting in 2021 ends up looking a lot like the one taken by China in 2018, which is similar to Norway after its first 5% quarter in 2013. The next major car markets approaching the tipping point this year include Canada, Australia, and Spain..”


The high school dropout and poet turned Fields Medal winner

This Quanta magazine profile of June Huh, who won the Fields Medal—math’s most prestigious award—is a wonderful character study. The piece explores the delicate balance between a healthy passion for a subject and a consuming obsession that is (perhaps) required for superlative success. What’s clear is that Huh is man purely dedicated to his craft: a near religious devotion to routine, a sparse office, and a deliberatively slow pace of work that affords him pure focus on the subject at hand. (H/T Josh Tarasoff)

“Huh’s entire life is built on routine. ‘Almost all of my days are exactly the same,’ he said. ‘I have a very high tolerance for repetition.’ He has trouble staying asleep and usually wakes up at around 3 a.m. He then goes to the gym, has breakfast with his wife and two sons (one is 8 years old, the other just turned 1), and walks his eldest to school before heading to his Princeton office. The office is spare, practically empty. There’s a large desk, a couch for sleeping — Huh typically takes a nap later in the morning — and a yoga mat rolled out on the floor (just for lying down, he said; he doesn’t actually know how to do yoga). No books, just a few stacks of papers neatly arranged on a shelf against one wall. In the corner is a vacuum cleaner. Huh likes repetitive, mindless activities like cleaning, dishwashing and the physical act of transcribing what he reads into a notebook.”


The seed of scale: Customer love

I enjoyed this podcast interview between LinkedIn co-founder Reid Hoffman and OpenAI’s Sam Altman. They discuss an essential theme that I ascribe to as an investor: Customers need to not just like, but actually love, the product or service. As Reid says: “I believe it’s more important to have 100 people who love your product than a million who just sort of like it.” Reid continues:

“And this isn’t always obvious. Many entrepreneurs fall into the trap of chasing the illusion of scale – the one million users who show up to use a flash-in-the pan product. What you actually want to do is seek out the true seed of scale, which has much humbler origins. Many great scale stories begin with a tiny kernel of die hard fans, no more than 100 strong — who are almost zealous in their passion for your work. They hang on your every product release. They can’t believe they ever lived without you.”

A few more links I enjoyed: 

“Eric Schmidt, former CEO of Google, became one of the wealthiest people in the US by specialising in software engineering. Yet, if he was starting out again today, Schmidt says he would not be targeting bits and bytes alone. The 67-year-old thinks the next big thing is the ‘bioeconomy’, not the internet. This catch-all label, Schmidt explained to me at the Aspen Ideas forum last month, describes “the use of biological processes to make use of things that we consume and manufacture… advances in essentially molecular biology… plus advances in AI have allowed us to do new techniques and grow new things.”
“The secret is Shein’s internal software, which connects its entire business from design to delivery. ‘Everything is optimized with big data,’ Lin said. Each of Shein’s suppliers gets their own account on the platform, which spits out information about what styles are selling well and can also quickly identify which might become future hits. ‘You can see the current sales, and then it will tell you to stock up more if you sell well and what you need to do if you don’t sell well. It’s all there.'”

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