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Long Waves

Funding of JPods is a process very similar to how the Transcontinental Railroads were built in the US in the 1860s. All such shifts in paradigms follow the “Long Wave” process.

  • Start small, iterate relentlessly to constrain risks.
  • Remain self-disciplined to build a profitable cohesive flow that produce engineering excellence and strong relationships with vendors and the internal team.
  • Racing beyond the self-discipline of being profitable rarely develops the introspection required to win over the Long Wave. Our wave is likely to be 15-35 years. The shorter it is, the more disciplined we must be in the first 24 months.

Clarity of Purpose:

  • We will follow the Long Wave requirements. And, we can speed up the process because we have prepared for 20 years for. We know where we are going in building the Physical Internet®. We are integrating the efficiency of freight rail with the on-demand service of the Internet and the safety of theme park.

Constrain Risks:

  • Start with Kitty Hawk Networks to build an effective team and network of vendors. These are small networks with small risks and repetitive technologies. Incrementally, and as quickly as excellence of execution will permit, increase rate of deployment at least reaching


What will drive adoption is conversion of costs to value. As measured in passenger-miles per gallon, JPods are more cost productive by 50X buses, 25X trains, and 10X cars. Three types of capital will invest to profit from this 10X conversion of costs to profits.

Three Types of Capital:

  • Seed Capital will purchase a Kitty Hawk Network. This establishes the sincerity of a Local Mobility Company (LMC) team and begins the process of the local team and JPods sharing equity. Keeping the risks low to the LMC by paying for the Kitty Hawk Networks based on the following schedule:
    • Pay 10% at contract signing.
    • Pay 25% on inspection and drawing sign-off of a unit in the US.
    • Pay 25% on completion of first 24-hours of continuous operation.
    • Pay 40% on certification for commercial operation.
  • Then Construction Capital will be applied by Master Mobility Companies (MMCs) to build the networks. This capital is committed for 1-3 years with returns of interest, dividends, and equity appreciation. This type of capital will generally receive a higher rate of return because they are converting ideas into tangible assets. A JPods construction crew will be comprised of well over 1,000 people and be about 9 months long. It will require about 9 months from survey to certification. Within 24 months of building the first Kitty Hawk Networks, these crews should be able to build 4 to 16 km per day per crew.
    • Construction Capital can begin with as little as the $5 million for the Kitty Hawk Network.
    • At a cost of $10 million per km, an MMC building 10 km/day in a 9 months long process will require between $15 and $27 billion in Construction Capital.
  • LMCs will use Asset Capital (bonds, equity, debt) to buy the networks completed each week for $13 million/km. This will free up the Construction Capital to be recycled to build more networks, pay dividends and profits to investors. The LMCs will repay the long-term obligations of Asset Capital from the 10X reduction in operating costs versus buses, trains, and cars. My guess is Asset Capital will grow to $5 trillion in the US over the next 15 years. A guess is that 400,000 km of networks will be required:
    • This is ~3x the 140,000 miles of freight railroads. As oil prices rise, freight railroads averaging 476 ton-miles per gallon will be the dominant logistical arteries.
    • This is ~20% of the 2 million lane miles of urban roads. As gasoline prices the oil-powered logistical systems will collapse. JPods solar-powered networks and Local Use Vehicles (designed to operate around stations) will be needed to be the logistical capillaries.
    • Self-driving cars, biking, walking, etc… will make up for the other 80% of current car traffic.

Starting is Always the Hardest Part

Driving a paradigm shift requires (recommend reading Crossing the Chasm):

  • 10X benefits: People will not implement paradigm shifts illustrated by the Long Waves of less than 50 years without 10X benefits. With JPods there are multiple 10X benefits.
  • Scalability: Dramatic paradigm shifts such as the Transcontinental Railroads, Wright Brothers, Apple, etc… require polishing internal disciplines. Recommended reading:
    • Nothing Like It in the World
    • Great by Choice. JPods:
      • “start small, iterate relentlessly” matches “20-mile marches”.
      • Kitty Hawk Networks matches “fire bullets, then cannonballs”.
  • Luck:  The headwinds of the Federal monopoly are becoming a tailwind. Since
    • Headwinds: The Federal-Aid Highway Act of 1956 removed efficiency as a market force nearly half the freight railroads were bankrupt/abandoned and innovations such as Morgantown's PRT network have been stifled.
    • Tailwinds:
      • Ending the Federal communications monopoly allowed the communications networks to be digitized. Ending the Federal highway monopoly, enforcing the "post Roads" restriction, will allow transportation networks to be digitized:
      • In 2009 Warren Buffet bought BNSF because of their 400 ton-mile per gallon efficiency.
      • In 2012 Amazon bought Kiva robots to automate their warehouses for $775. Reportedly a 40X ROI.
      • US infrastructure by the current monopolies is rated a D for roads and D- for transit. More of what is failing will fail.
      • Congestion and oil instability are forcing a breakup of government highway monopolies.
      • JPods patented the Physical Internet®.

The wave of investment in digitizing devices, via self-driving cars, is nearly identical to the Motorola Razr cell phone. It was a brilliant digital device on an analog network. Digital networks using smartphones swept the Razr aside. JPods are digitizing mobility networks.

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