[Kyle]

Hello Brian, it’s a pleasure to make your internet aquaintance. 😉

Directly to point is a thread on the micro-contributor approach (and fundraising in general). I look forward to hearing your thoughts/reaction to that string.

Respectfully,
Kyle

[Kyle]

@Aeronaut: I think your page 3 in particular, is an excellent draft for the “Why we are writing you today” portion of a viral marketing effort on the part of FFS. After that page, however, I would go directly into some detail about the science and engineering of the FFS project and make an appeal for both: one, the support of the effort/join FFS non-profit; and two, a specific ask for a small contribution, 100% of which would go directly to funding the research.

I think you could more effectively leverage FFS as the political agent in any political effort FFS wanted to undertake, but VASTLY more importantly, the tax-deductible small contributions go to fund the FFS grant(s) to the DPF research. Like you, Aeronaut, I am firmly of the opinion that a direct appeal to a large micro-contributor market will be the quickest and most likely route to assure funding for DPF “proof of concept”. (And by “proof of concept” I mean that we have experimentally demonstrated less expensive “to-the-grid” power.)

I am very glad to see the many active and thoughtful contributors on this site; I think we are beginning to see the right assembly of resources to see cocncrete results.

Respectfully,
Kyle

[Kyle]

Bummer, I ran into post length maximum by 200 characters on the last post. So, in conclusion to that previous post:

Bottom line opinion: we should give this approach some serious effort, as an organization, as it has huge upside to advance our mission, with only moderate downside (initial money investment—when this money could instead go directly to the DPF project).

[Kyle]

Thanks Aeronaut, I appreciate the understanding, though I must say, I want to wander all over the solar system; how do you do that? 🙂 I think you provided some great ideas for the viral portion of the approach; as well, I think Rezwan and Aaron are good suggestions, though managing the website is already a large time commitment for Rezwan, I would guess.

I wanted to give a few thoughts around the second “marketing plan” bullet, as I think it also has a lot of potential. I also wanted to provide an overdue analysis to Rezwan as to why I made the claim that I think that the DPF is more “sexy” than other projects that have managed large funding; in this case, I’ll start with an analysis of what the DPF has going for it and then compare to the Planetary Society’s solar sail as an example.

Best solution for the environment
This research has a serious chance of resulting in the single, best energy solution for global warming of all current and “in-the-works” production solutions in the next 5-10 years. This is attractive to both “liberal” and “conservative” US organizations on the issue; and, not to rip on the US here, but would obviously be attractive to the rest of the world. (Without getting too political, it never ceases to amaze me how you have to always make specific comments to address the often unreasonable positions of certain elements of the US political spectrum.) Anyway, I would expect FFS could partner with several of these organizations; again, this would need to be part of a strategy conversation before we would want to get down to specifics.

Solution for Aid Organizations
Here, I am speaking of the availability of significant amounts of energy at prices that would make it feasible for use in the production of quality food and water in developing nations. Dozens of significant, respected organizations with long contributor lists populate this space, not to mention potentially foreign governments.

Between 1 and 2 billion people in the world lack access to clean, drinkable water (depending on the source, and definition of “clean water”, but that seems to be the range). For example, Bangladesh is currently suffering from significant water shortage due to arsenic in the ground water. There exist several inexpensive up-front solutions for cleaning any type of polluted water that would substantively address almost all of these types of water issues, but in every case, they require electricity. (For example, Dean Kamen’s portable, enclosed distillation system that produces 10 gallons of clean water per hour on 500 watts of power is too expensive an ongoing cost for villages in Bangladesh that already have power lines.) With the reduction in cost of power by one-to-two orders of magnitude, these solutions become immediately viable and therefore of great interest for these organizations. A $1-2M total price tag is peanuts compared to the amount sought by other solutions: for example, $30M in VC funding is being sought by the founder of the Grameen bank/phone to deploy 1 kw “cow-dung” generators to be coupled with Kamen’s distillation device.

In any event, we should be able to negotiate with a significant number of organizations about partnering to fund this project on this benefit alone.

Patriotism
Dependence on “foreign oil” is a hot button issue, politically right now and this is a non-trivial matter when appealing to our demographics.

Create Jobs
Research and innovation have always been the primary means of creating jobs—if you have any questions there just look to the rail road jobs of the 19th century or the computing industry from 1980-2000. While production of DPF devices would not create as many jobs as those two examples, we would certainly be looking at the creation of tens of thousands of jobs directly and by suppliers.

In summary/conclusion
All of these approaches will combine to present a very compelling case to many potential partner organizations able to contribute in meaningful ways: from small to large possibilities. On the smaller side, perhaps a supplier could be convinced to provide a 10-20% reduction in the price for machined/manufactured parts that the DPF project needs as a tax write off for a contribution in kind, or by means of a commitment of first-right-of-refusal on possible future production contracts. On the larger side, FFS might approach some car manufacturers to fund part of the research as part of their brand and marketing efforts; if they can differentiate themselves as innovators in the electric car race, they position themselves for significant profit from initial sales and ongoing brand awareness and differentiation.

Exploration of the “Final Frontier”
In reality, while the DPF project provides attractiveness in all of the above areas more so than the Planetary Society’s solar sail projects, this is really the only area where their project is more “sexy” than the DPF, in my analysis; would love other opinions, if you see more areas where the solar sail project has more “sex” appeal. However, undoubtedly this is very attractive for certain target markets, more markets representing a larger portion of the population are attracted by the above “DPF sexy-list”.

Again, it cannot be underestimated that when comparing the entire package, the planetary society has a LARGE, existing donor base and huge names like Carl Sagan as the founding president. The claim I made, however, was that the DPF project is more “sexy” than the solar sail projects; corollarily, I think it is NOT true that funding the DPF project will be easier than funding the solar sail project for the above organizational reasons.

[Kyle]

Micro-contributor non-profit proposal (The slightly more fleshed out version.)
Therefore, in order to address the previous posts questions, I propose that FFS consider the following:
I. Emphasize raising monies through tax-deductible donations from many, small contributors in order to fund a (multiple) grant(s) to promising technologies that will further the mission of the organization.
a. Expand ‘contributor’ member list for the purpose of funding research grants and covering operating expenses. (Huge emphasis on the former—FFS would want to be a non-profit where 90+% of donations went directly to ‘the cause’.)
i. Develop the ‘marketing plan’ (I don’t like that name, as it is too “for-profit oriented” and buzz word sounding, but that is what it is.)
1. Online
a. Establish an “onboarding” process by which FFS welcomes new members and encourages their participation in discussions (details to be developed by FFS and vetted by current members in another string)
b. Identify one or two established “parent-figure” personalities from existing members to own the above onboarding process for new members
2. Drive new members to the FFS community
a. Viral posts to drive eyeballs
b. Partnerships with appropriate organizations or blogs
c. Etc.
3. Mail campaigns?
b. Increase internet “fun-item” sales (I think the t-shirts and etc are great)
i. Details on this to be developed and vetted
c. Establish a board of directors and/or board of advisors for FFS composed of three types of members:
i. 3-5 Serious science types;
1. Bring the gravitas and technical weight to FFS
ii. 3-5 Wow factor types;
1.Household names that bring ‘sex appeal’ and bring weight for fundraising pushes for particular projects
iii. 5-8 Serious business/money types
1. These individuals would be expected to bring, personally or through their network, certain funding levels to FFS (say $50,000/year).
d. Consider hosting one or several events throughout the year for presenting the progress and current understanding in alternative fusion physics approaches; these events would focus on both the science and the business, but emphasize the science.
i.These kinds of functions can be great revenue streams for non-profit organizations from both the conference fees and new members’ donations from conference attendees, but only if a good theme and presenters are constructed.
ii.One of these might be an evening event with ‘big fish’ philanthropy types, an attraction presentation (like The Canadian Brass play for a dance night, or a Hollywood comedian type does a stand-up, etc), and Eric Lerner giving the “look at what we are doing now and with your contribution this evening, we will solve world hunger!” presentation. (Well, “solving world hunger” might be a bit of an oversell, but you get the point. 😉 )
iii. Another might be a more serious industry conference with science papers being presented.
II. Consider adding a secondary objective to FFS’ mission: to provide funding for substantive science that advances the common good. (or some such language)
a. In this discussion, we could potentially address a significant gap in current science research funding between government grants and private, for-profit funding.
i. To potentially include a more social sciences discussion around: why would we, as a society, want the generation of power to be conducted by for profit businesses? (Like Enron: enough said, imo.)
ii. This also allows for using the social benefits derived from the research to drive interest in and contributions for FFS and the DPF
b. This second discussion is related, but not directly to point; for that reason and the one below I will leave a more detailed conversation here to another string.
III. This post has already gone WAY too long and many of you may not read this far, so I will curtail additional ideas; suffice to say that I think you get the idea around the proposal. (Questions or thoughts/reactions always welcomed, of course. 😉 )

The one outstanding question I have is: why not fund LPP’s phase II through a more traditional angel or venture capital round of financing? (I suspect that the answer here has something to do with a combination of: too much risk (too early in the research/engineering phase) for most funding sources; and too little is known, even by specialty energy VC firms, of fusion that is aneutronic—and what is known about fusion is that it is very risky, VERY expensive, not well understood by scientists, and has long development times. To summarize: I think VC firms will feel unable to properly conduct their due diligence and risk assessments prior to considering an investment. Eric would be the best source for anecdotal insight to this question, I think.)

[Kyle]

Thanks, Warwick and Rezwan. Warwick, I hope the below will clarify the scope and details of the proposal I am making.

From the top down, conceptually, I see five broad phases to any fusion energy project:
I. The science/physics theory:
a. For the DPF experiment, this was largely done, as I understand it, between the loss of NASA fusion grant monies in 2001-ish and the resumption of DPF engineering in 2008-ish.
II. First prototype and engineering (‘proof of concept’):
a. This phase sometimes iterates with the theory phase, obviously.
b. This is where we are now with the LPP DPF experiment.
III. First Production unit deployed
IV. Rapid business expansion; “new market formation”
a. Significant competition enters the market
V. Established market

Warwick, your comments are very applicable to (and great ideas for) phases III and IV; my comments were more directed at phase II—which is where money is most needed and hardest to come by and is where I would like to focus our immediate discussion.

The above phases are intended as a general statement, as specific completion/stage-gate conditions apply to each phase. For example, in the case of the DPF experiment, and its subsequent business model, phase II would have two likely completion criteria:
I. The prototype experimentally (and independent peer-review) demonstrates net energy gain: Ep > Ec, where:
a. Ep = Total usable (by the grid) energy produced; and
b. Ec = Total energy consumed by the DPF.
II. Based on the above experimental results, Cdpf < or = Calternative, where:
a. Cdpf = Amortized unit cost for DPF = (Cp + Cu + Cf)/El
i. Cp = Purchase price of the DPF generator
ii. Cu = Fixed upkeep for generator, housing and personnel over the lifetime of the generator
iii. Cf = Marginal fuel costs over generator lifetime
iv. El = Energy produced over generator lifetime
b. Calternative = Amortized unit cost for existing energy solutions ~ $1200-2400 per (what was the unit Eric gave here in his google talk?) (Coal at the bottom of that number and wind/solar at the top – if someone has better numbers, please let me know.)
i. Calternative has the same conceptual equation as Cdpf, but as we already have the numbers, it’s easier to simplify here.

Strategic note: it is possible to shift the second complete/stage-gate criteria from phase II over to phase III; however, bear in mind that as risk is shifted from phase II to III, funding will be harder to come by for phase III and you will likely pay more for that funding (especially if you do a private, for-profit equity round). (Aside: venture capitalists like nothing more than a huge ROI venture with just enough risk that they can negotiate substantially higher equity positions for themselves, while not having so much risk that it is perceived as “fatally flawed”.)

Further, for purposes of clarity, there are two legal organizations here about which we are talking: Focus Fusion Society and Lawrenceville Plasma Physics (they are perhaps sibling organizations, but distinct nonetheless).

The Focus Fusion Society is a non-profit organization with the purpose of creating a community of people who want to bring to reality “Unlimited Safe, Clean, Low-cost Energy for Everyone.” This could be interpreted broadly to mean any alternative method of generating base-load power that is environmentally friendly and inexpensive, from all types of fusion to biomass to solar, and etc., so long as they meet the above criteria.

Lawrenceville Plasma Physics is a for-profit organization: a high-technology research and development corporation specializing in applications of plasma physics, including fusion power and high-power X-ray sources. (C or S-corp, do you know, Rezwan?) As we all know, LPP’s primary activity at present is the DPF project.

The primary question I think that needs to be resolved is: “How do we best fund phase II for the LPP DPF project?” In my opinion, the answer is to fund the project with a grant from FFS. Follow-up questions to consider:
I. What should the strategic mix look like in order for FFS and LPP to adequately fund phase II?
II. To what extent should private equity funding (venture capital firms and accredited individual investors), private grants (non-profit and foundation) and public grants (NASA, DoE, etc) be sought?
III. What is ‘adequate funding’ for phase II?

Proposal Proper in next post. 😉

[Author]

Posts