Fractional Ownership in Windmills
Windcentrale is a startup in the Netherlands that allows individuals to invest in windmills that provide for their energy needs. For the first time, thousands of households get the opportunity to deploy a windpark together in order to generate their own sustainable power. The park is going to consist of 3 windmills and will start generating early 2019 and produce power for approximately 8000 individual owners. As an individual you can buy your own so-called 'windshare' to help on the transition to become energy independent. The estimated return is 6%.
The New Deal for Infrastructure Providers
Traditional infrastructure financing often requires large institutions to provide the necessary cash-flow for construction. These institutions provide a loan to builders so they can build and deploy. Then, the interest and loan amount is paid back with the builder charging a premium on the service provided after construction.
While this model has traditionally been a safe bet, it also has created the side-effect of increasing the costs of services we use. Whether that’s energy delivery, car-sharing, or other business service—it’s been impossible to avoid charging a marginal cost per unit of production to payback these loans (and make profit). Additionally, it prevents smaller players from investing in infrastructure, which restricts this privilege to large institutions. Talk about a restrictive business model. 🤔
NestEgg aims to turn this model on it’s head with the goal of dramatically reducing (or even eliminate) the fees attached to each unit of production. In other words, reducing the marginal cost.
This is achieved by rearranging the financing. Instead of large institutions taking on the investment risk, it’s instead taken on by a larger group of individuals and smaller investors. The investment goals of these investors are different. Their incentive for investing is to receive the future productive output of the infrastructure for free, thereby reducing their cost of living by not needing to pay for basic needs. Need energy? Purchase shares in solar and windmills. Need mobility? Invest in a fleet of self-driving cars to be deployed in your neighbourhood. Once infrastructure is established, it doesn’t cost money to fuel. Other than occasional maintenance, a solar-panel/windmill/self-driving car can operate each day for free. 🤯
The infrastructure provider makes profit through providing maintenance and taking a small slice of the productive capacities, aligning them with long-term care of the infrastructure.
Let’s talk about frictions.
Today we can travel large distances with planes & trains. Massive supply chains require ginormous shipping vessels that transport goods across the world. Our pizza is driven to our doors within 30 minutes. Our society has removed a large swath of frictions that have prevented collaboration in the past. It’s very hard to imagine a world in which these frictions still exist. It’s even harder to imagine what radical changes to our lifestyle are possible when further frictions are removed.
For example. What if you could snap your fingers and have anything you want. Imagine it’s instantaneous and doesn’t cost anything at all. Once this reality is possible, our concept of ownership and access begin to radically shift.
Why would we purchase something, like a hammer, which we keep in a closet until the 2-3 times we use it a year? To look at this from a higher overview, imagine all the metal, transportation logistics, and resources spent on making a million hammers that sit in the closets of a million homes.