Friday, November 20, 2015

A Good Capitalist Story

Good capitalist figures are hard to find stories about because they tend to be quiet folks who just do what they do.  They're generally not attention whores, they're more often the quiet ones that don't get noticed.

Meet Manaj Bhargava.  Chances are, you've never heard of him, but you've heard of his invention that made him rich, those ubiquitous red and yellow bottles of 5 Hour Energy.  Bhargava says he was surprised at the rapid acceptance of his invention, but from that first story link, a February 2012 issue of Forbes:
In one corner of Manoj Bhargava’s office is a cemetery of sorts. It’s a Formica bookcase, its shelves lined with hundreds of garishly colored screw-top plastic bottles not much taller than shot glasses. Front and center is a Cadillac-red bottle of 5-Hour Energy, the two-ounce caffeine and vitamin elixir that purports to keep you alert without crashing. In eight years 5-Hour has gone from nowhere to $1 billion in retail sales. Truckers swear by it. So do the traders in Oliver Stone’s 2010 sequel to Wall Street. So do hungover ­students. It’s $3 a bottle, and it has made Bhargava a fortune.
It has brought him to Forbes list of the richest people, with a net worth estimated at $4B.  The 62 year old now is in the enviable position to be able to live on 10% of his income and donate the other 90% to his personal charity, Stage 2 Innovations lab in Farmington, Michigan.  It's here where he's likely to do the most good.
The Stage 2 team consists of more than 100 engineers of all different backgrounds. The main focus of the project is to adopt ideas and concepts that have been around for centuries, but have not advanced due to perceived impracticality or inefficiency. Bhargava offers the team funding, plus as much 5 Hour Energy as they need in order to bring these ideas into fruition, designing efficient machines that can be manufactured on a large scale.
If you were to try to address the two largest needs in the third world, you'd probably end up pretty quickly focusing on energy and clean water with energy first because if you have energy you can purify water.
Free Electric exercise bike/generator: With a single hour of operation, this stationary exercise bike is claimed to generate enough electricity to power small household appliances, including lamps, toaster ovens, and cell phones. Pedaling turns a turbine that generates electricity and stores it in a battery for use throughout the day. This device allows for a clean energy source that can easily be used in homes. Bhargava plans to distribute 10,000 of these bikes in India next year, claiming that the bike could be made for less than $100. He expects that a community may share a bike to power numerous batteries for several households. 
Bhargava rides a prototype at Stage 2 Innovations.  Video here.

Mandatory nerd stuff.  Note that they talk about pedaling the bike for an hour and using the electricity throughout the day.  It doesn't say that it will last all day; that depends on how much energy is stored vs how much is removed.  Some numbers might help.  A professional road cyclist can put out amazing amounts of power - for a little while.  I've read that British sprinter Mark Cavendish puts out almost 1600 watts, but only for a few seconds.  For sustained power output, good riders can put out "a few hundred", like 300-400 watts, maybe 500.  But after an hour, that's still only 300-400 watt-hours.  It's highly unlikely an untrained villager will put out more than the low end of those numbers.  In (what looks like) a 12V battery, 240 Watts is 20 amps, though.  (I have a 35 amp hour battery I could fill in under two hours with one of these - assuming I could still put out 240 watts continuously for two hours.)   Finally, there's no free energy here.  That 240 watts the villager is providing will have to be supplied to the villager as food.

My point here, though, is that this is the story of a good man who made it big through innovation and creating a product (actually, he pretty much created the "energy shot" market).  Now his goal is to help others.  Voluntarily.  No government or NGO is taking 90% of his wealth; he's giving it.  There others out there that we never hear about.   
 

6 comments:

  1. Hmmm.....IIRC, there are a lot of semi-dilapidated (but still running) single cylinder Lister diesel engines floating around India, and I suspect some regions have quantities of free flowing water. Not to mention (marginally useful) wind, and the possibility of animal power (oxen + gearbox = higher RPM = more watts). How long before some enterprising individual connects Bhargava's very cheap power generating device to an external power source? It might not have Cavendish's peak wattage, or even his steady state output, but watts is watts, and if there's sufficient storage media 100-200 watts/hour over 24 hours could be useful.

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  2. The caloric output required vs. the stored electrical power benefit would make this a non-starter in my view in any area where people are hardly eating above a subsistence level. If you have ever done the bicycle generator hooked to a lightbulb demo... the amount of exertion to bring feeble glow to a 100 watt bulb is stunning. The amount of work we get from fossil fuels is ENORMOUS... and yet almost zero percent of the population has any awareness of fossil fuels other than they're "dirty and bad and pollute".
    For remote places like the guy is trying to serve, wouldn't solar be better? Then the people who are at such a subsistence level could busy themselves with better uses of their time than burning calories to store a little tiny bit of electricity, instead letting mr sun apply unyielding pressure against the problem. Wouldn't it take the same amount of technology downstream the generation point to store usable power?

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  3. I would consider that all the so-called 'energy drinks' are either dangerous (and some have caused death) or useless and don't live up to their claims. Why would anyone even try one of these?

    I don't agree with allowing the rich (or anyone) to avoid taxes by giving their money to 'charity'. If they want to give to charity they should pay their taxes first. If they give 'their' money tax free to charity than by default all the rest of the taxpayers are forced to pay more to make up that loss. end the charity deduction. Do good things with your own money.

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  4. Anon 1118 - I'm curious where you got that this was untaxed money? Was it in one of those links and I didn't catch it?

    There are IRS limits on donations. The general limit is 50% of your gross income, but that depends on the tax status of the place you're donating to. I have no idea about his foundation's status, but if it's not the right type, that limit goes down or can go away; that is, no amount is deductible.

    As for whether or not the drinks are any good: I don't care. I don't use them, never tasted one. But if people want to spend their money on expensive water, or risk their health, it's fine by me. Freedom includes the right to be stupid.

    Alien - at the least, they could get the villagers to take turns. Everyone rides for a 15 minutes or so. But like Anon 0934 said, they'd better have ample food and not be starving, otherwise nobody rides.

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  5. Kind of reminds me of the hand generators used to power radios you see in some WWII movies. Otherwise, the light bulb can be LED and needs less wattage (think wind up LED flashlights).

    I wouldn't knock 5 Hour Energy - the stuff works! However, I use the knockoff Kirkland brand from Costco that goes for about half the price.

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  6. There are limits to how much you can deduct on a personal tax return. However no rich person who owns a company is affected by this limit. The tax laws allow him to create an LLC which can give away 100% of the money pretax. This is what Bill Gates does with his billions and in fact what every rich person does. Al Gore donates to his own charity which buys his personal jet and pays for his personal travel. Taxes certainly are necessary I would not argue that they are not. But I do believe our taxes are excessive and part of the problem is there are too many people riding for free while the middle class pay the full tax bill. Everyone should pay tax and there should be no loophole that allows a Bill Gates to pay zero tax on billions that he then gets to spend as he sees fit. My point is simple; everyone, every entity should pay the same tax rate as me and every other middle class person and then they can do whatever they want with the money.

    In my humble opinion a person/group is not being a good citizen; a good member of the community if you are seeking exemptions from taxes while forcing everyone else to pull up the slack. End the 'charitable' deduction and end the tax exempt entities. Equality not special treatment.

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