My answer to an angry letter

Recently, I received an angry letter from an investor. He said NRGLab could cause a massive drop in the share price of one of Australia's most well-known gas companies, which he also happened to be invested in. This investor wanted us to sell him our shares at an outrageously low price in order to protect the gas company from future loss, in case our company were to grow too quickly. His fear was that gas prices would slip significantly once we introduced our SH-boxes to the market.  

Every gas company in the world is invested in the exploration, production, refining and marketing of oil products. These companies go out of their way to protect their market share and subdue competing technology. After all, no investor wants to lose their money. Really -- who does?

One way companies protect themselves is through the use of intellectual property rights. Intellectual properties yield profits, not only to the patents, but to the resource companies as well. This way, the average consumer allows these companies to develop new technology simply by purchasing food at the grocery store, music on the Internet, or leasing a car from a dealership.  All the proceeds, through a network of intellectual property patents, give companies a sense of security, which allows them to expand into NEW properties, and NEW relationships. 

During the recent economic crises, a drop in demand lead to significant losses in intellectual properties. Gas industry investors had been sensing this threat for some time.

Back to our angry investor, who is not longer certain of the security of his investment. Before the crises hit, people had easy access to “cheap” money: credit available at an ultra-low rate of interest. Typically, if the government wants to stimulate job creation, they lower the gold-reserve requirement for banks, who are then able to lend more money at lower interest rates to potential entrepreneurs. However, the well of cheap money ran dry after so many start-up businesses failed, and people could not repay their loans.  But since intellectual property investors got accustomed to “cheap” money and the influx of spending that was feeding into their web of patent rights, they aren't ready to give it up. Voluntarily, at least.  

In 2013, investors should expect serious competition. People will begin tapping all available resources in order to produce cheap energy and then distribute it, at a profit, to private markets. It will be incredibly hard for huge gas corporations to compete, in terms of price point, in the coming age of new technology. First, these large companies will resist; but sooner or later they will be forced to relinquish their monopoly privileges  and the web will finally become untangled. 

Similar situations will occur across other industries, including IT. Consumers will hold onto software longer.  They will use predominantly free services, and will have access to a growing range of services with the ever-expanding independent app market. National governments will support private competition, while motivating their own IT-manufacturers via budget spending.  One should expect national Internet segments and national payment systems to emerge within the coming years.

Let me reiterate: the modern intellectual property system only exists because of the access to “cheap money”. As soon as this resource is depleted, intellectual properties will long longer be able to be protected, or renewed. This angry investor -- his stake in the gas industry will be worthless, and fairly soon, I suspect.

Unfortunately, I won’t be able to help him then, and I certainly have no intention of selling him my technology, or my know-how, for cheap.