1 min read

The Utility of Resilience

It seems like resilience will be the word of the last year, and maybe this one too.

Unfortunately, there's no rest for the weary coming out of the pandemic. Record drought in the west could be a precursor to yet another record fire season. The Atlantic hurricane season saw its first named storm on a record-setting date and is forecast to be more active than normal once again.

Technology won't just need to help us mitigate climate change, but should also help us adapt to it (i.e. make us more resilient).

You'll hear skeptics mention battery technology isn't "economical" and on a quantitative basis, that's still true.

However, the events like the ones I mentioned above and the winter storm in Texas in February drive something even more important: perceived value (or utility for you economic wonks out there).

Utility determines what customers are willing to pay and resilience now increases customer utility when it comes to technologies like storage and backup generators.

Why did Ford highlight a home backup as part of the new F-150 Lightning? Consumer utility of resilience is increasing.

Why does Generac have a backlog bigger than the one post they had to post Hurricane Sandy? Consumer utility of resilience is increasing.

One of Charlie Munger's favorite mental models is called "lollapalooza" - which is more than a music festival in Chicago.

Lollapalooza effects: when 4-5 forces from the basic disciplines come together to accelerate one another

We're up to at least two with battery technology. First, developments in chemistry drove down costs. Now, the utility of resilience has brought economics into the fold. What's next?