Q&A with Michel Vandenberghe of LENR-Cities on the LENRG Ecosystem

The following is a Q&A that I conducted with Michel Vandenberghe of LENR-Cities. I have been interested in finding more out about the LENRG ecosystem that his company has been promoting, and I tried to ask some fairly simple questions to get a better idea of the LENR-Cites business model.

1. What benefits does an organization who joins LENRG receive?

We are neither a consultant, an integrator nor a broker. Ecosystem development is a new business.
LENRG member benefits from LENRG level offering;

For Partners : An organization who joins LENRG have access to Ecosystem level resources to develop its own business.
We plan to develop 4 main resources, including :
A brand/Communication system (LENRG) to promote his own business during events and beyond.
A scientific/industrial team to build scientific project proposals and develop the corresponding business ecosystem.
A marketplace ( Future : Partner Known – 2 years preparation; waiting for Budget to engage)
An investment fund (work in progress). But currently, funding as usual for Scientific projects.
Special case : Initial players who joins LENRG participate in the implementation of the operating model of LENRG and consequently get a share of the value created by LENR-Cities as they share risks with LENR-Cities to implement the proposed business model..

For Customers : “Shape their future”.
Support to forecast and plan for their business
Participation in Challenges with LENRG.
Better conditions to get technologies and products from LENRG.

2. How does an organization become part of LENRG? If there is a fee, how much is it?

Valid for the current stage only (next stage, model is evolving).

For partners (no fee).
Scientists : Core team coopt scientists,
Industrialists (Only big entreprises for now): It is opportunity driven.
We are looking for 2 other Big players:
We would like to get an automotive company joining LENRG. Second one is Confidential.
We are looking for “Clusters” to join (As presented at Milano on April the 10th) : Scientific projects driven
Investors and Innovators: Need to send us a proposal.
Academics: working with our local representative in their country (UK, Swiss and Italy: we have representatives).

For Customers : Annual fee.
Cost is not defined yet but low cost.
Objective is to offer all capabilities to Medium industries and startups to develop LENR applications

3. What are the obligations that are required of a member of LENRG?

You must add value to LENRG and LENRG must be a way to develop your own business.
Your company must have a commercial agreement with LENR-Cities.
Note that Initial partners have strategic agreement with LENR-Cities (confidential).

4. What kinds of organizations should consider becoming part of LENRG ?

Scientists and their enterprises (to be funded and develop their own business).
Clusters ( An infrastructure to benefit from our action to develop innovation and business ecosystems)
Big industries ( to develop their own ecosystem).
VCs (LENRG reduces the risks for them).
Innovators (Finance, Legal, IT).

5. How does LENR-Cities administer the LENRG system?

Confidential.

6. What is the purpose of LENR-Venture?

LENR-Venture supports a new investment model to fund research (before Venture capital business is applicable);

7. Does a member of LENRG automatically become connected with LENR-Venture, and if so, what benefits does that provide?

Yes, as LENR-Venture is a member of LENRG (like LENR-Cities).
Note that R&D will be funded by LENR-Cities not by LENR-Venture (applications and business funding).
LENR-Venture manages the market demand as help to drive development and investment.

8. What will the funds in LENR-Venture be available for — and what kinds of conditions will apply to groups funded by LENR-Venture?

LENR-Venture funds LENRG Members business including LENR-Cities. Condition is to have a commercial agreement with LENR-Cities in order to apply the model which supports the new investment model.

For initial players, agreements are more strong (confidential).

9. Will it be possible for scientists and researchers to obtain funding for their research work through either LENRG or LENR-Venture? If so, what kind of conditions would apply to those researchers and how would their research findings be made available to others?

Yes, see above.
LENRG members own and commercialize their technologies and products.
LENR-Cities only ask for a commercial licence.

Open Innovation is mandatory inside LENRG.

10. What kind of progress have you made in getting both these new programs started and operational?

All processes are initialized and core is well defined.
We are now doing our first scientific project proposal in UK about Nuclear Waste Management.
We are planning to develop Challenges The scope of the first challenge is defined
Key is to get funding to set up LENR-Venture and go to the next stage with LENR-Cities

11. What is the long-term vision for your projects? How would you like to see the world affected by your work?

A operating model well-defined and replicable at any scale to sustain an increasing pace of innovation.
Developing the “Micro-Factory’ Cluster in Switzerland.

More and more people considering cooperation as the first source of competitive advantage.

Some of the slides from the LENR-Cities presentation at ICCF can be found here.

  • Michel Vandenberghe

    No, we are proposing a tool to get the society to help itself. I dare say, society need some, concretely people who do want to make it happen…

  • Michel Vandenberghe

    Sure 🙂

  • Michel Vandenberghe

    Only shared goal is to make LENR and sometimes, a beer at the bar when we are doing an event 🙂 Mutual self-interest is not about collaboration.

    “with virtually no fuel”

    When these ready products will be available, I guess you are going to wait to have some LENR enabled Car available to buy a new one. I guess that the boss of GM and thousands of subcontractors working for GM are ok with that.

  • Fyodor

    Which companies are those? Other than Rossi, whose only commercial product doesn’t create high enough temperatures for electricity generation.

  • GreenWin

    If I am understanding Michel’s (pardon misspelling below) vision – the LENRG ecosystem brings together various interests in low cost energy. Similar in a way to how AirBnB and Uber bring together home/automobile owners with people needing accommodations/transportation. So for example, the owner of a nanomaterials process (A) is aware LENR requires nano-powder metals. If they are a member of LENRG, specialists making LENR fuel combinations (B) will contract the services or process of (A) increasing value for both (A and B.)

    Like Uber or AirBnB, LENRG provides access between members (similar to industry “Associations”) labelled here as a business “Eco-System.” In exchange for these connective services, LENR-Cities (the commercial entity of LENRG) gets a percentage of revenue from members’ sales.

    Please correct if this is wrong. I am trying to simplify this model for those of us without MBA degrees. 🙂

    • Michel Vandenberghe

      No, we do not ask for a percentage of revenue from members’ sales. This is their own business. The ecosystem has its own offering and LENR-Cities sells this offer.

      Let’s take an example. You have a car. In your car, you have an available seat. This seat
      has a value. When you travel with a friend, your friend does not pay but he would have had to pay to use for instance some public transportation system.

      On theother side, somebody needs a seat when he is traveling, but not enough to pay a
      public transportation system There’re some value in both case but no way to monetize this global value.

      A third party build an application 1) to match seats 2) from A to B but also add some mechanisms to help each community to trust the system and the other side.

      The third party monetizes seats and share the revenue between players. Note that the third part has no seats. It is not a transportation facility. Globally a system can monetize a value, but not the parts.

      In a market, exchange is based on transaction. There’s an underlying mechanism to monetize. You give and get something in one stage.

      In a Network, People have something which have a value and may be monetized. X may have a transaction with B. B knows C. But A is not able to monetize something with C. It is a bartering system.

      In an ecosystem,people have something which has some value but they are not able to monetize like in the carpool example. I’ve a technology but nobody wants to fund my
      work, I’ve money but I need a customer for that technology to fund it, I’m an industrialists and I might be interested by this technology if its development was funded and so on. With an existing market, these problems would not exist but there’s no market.

      LENR-Cities is a third party as in the carpool example. We are matching the parts and
      reducing risks for each party. In the case, the third party build a kind a “transportation system”. In our case, we are building “a Market”, that is to say we propose an answer to each of the previous question with lower risks for each party. But it is not enough, we need to monetize this market in order to make it working.

      A market is a living thing. There’re the innovators first, next the early adopters up to the lagers. The risk to be out of the market is what is driving each player that is to say to lose its customers. With major disruptive technology, many players are involved and have concerns with this risk. Then there’re many prospective buyers.

      We monetize this risk. The idea is: If the adoption was done by all the parties at the same time this risk will be much lower. Then the offering is about how to adopt faster and is based on a fair financial deal. Proposal is pay a fee to participate in this new model, in practice to reduce your risk, and with this fee, one implements a new investment model. That’s it. You have the fuel for the market we have created.

      The ecosystem sells to all players outside of the ecosystem (they are not taking the risk to create the market) how to reduce their risk. Inside the ecosystem, parties create the risk
      by developing their own offering.

      LENR-Cities get a share of the global business. In fact, this is a kind of tax to make the system working. Wow, it looks like a state business! And the objective is to develop and fund science to address our global challenges.

      Side effect is to accelerate the development and the industrialization of disruptive technology, which is a requirement with the development of the LENR technology to address the energy core issue.

      With that we my have a growing and sustainable economy.

      Crazy, no?

      • GreenWin

        Again Michel, thank you for your thoughtful reply. It would appear the error in my simplified model (of LENRG) is that remuneration to LENR-Cities is in the form of membership fees (or subscription fee) – not a percentage of member revenues. The precursor to this concept as I understand it, is industry Associations.

        We must however, be careful not to pretend the Uber and AirBnB models are altruistic “sharing” services when in fact they are brokers – i.e. they are electronic versions of agents, brokers, middlemen, who bring two parties together. I have used both Uber and AirBnB and will do so again because they are “value added” services that simplify and expedite previous models. Both are business models that streamline and simplify the needs of all parties. This is the strength of your proposal, IMO. I look forward to functional examples of LENRG.

        Just as we all look forward to Andrea’s 1MW E-Cat burn-in customer declaring his satisfaction with the plant’s performance and cost-savings.

        • Michel Vandenberghe

          Using existing models to explain new ones is often confusing. If you want to make some comparison, our model is closest to an insurance model than to an industry association. An Insurance company invests money to create additional value: In future outcomes of research for us. Back to first sentence 🙂

          Uber or AirBnB models are not altruistic but they are not (only) brokers. In a business context, a broker add value to transactions between players. Transactions between parties are possible even without a broker (but Regulation imposes some of them). In Sharing Economy, the third party creates transaction first and then one can say they are brokers but, without them there’s no market.

          A functional example? Our objective is to fund research without asking IP or shares. We share with you enough information to understand why.

          1 MW E-cat ? It shoud be a new gold rush. Sell Shovels 🙂

        • Michel Vandenberghe

          Using existing models to explain new ones is often confusing. If you want to make some comparison, our model is closest to an insurance model than to an industry association. An Insurance company invests money to create additional value: In future outcomes of research for us. Back to first sentence 🙂

          Uber or AirBnB models are not altruistic but they are not (only) brokers.

          In a business context, a broker add value to transactions between players. Transactions between parties are possible even without a broker (but Regulation imposes some of them). In Sharing Economy, the third party creates transaction first and then one can say they are brokers but, without them there’s no market. This is why their business has a huge value.

          A functional example? Our model enables to fund research without asking to own IP or a share of the company who develop the technology. We share enough information with you to understand why.

          1MW E-Cat? We will have a new gold rush. Sell “Showels” 🙂

  • Michel Vandenberghe

    Perfect 🙂 Thank you.

  • Michel Vandenberghe

    More details to understand….

    Preamble.
    In the digital economy, your community tells you what the community wants; Theoretically, one might even start a project without any prior definition of the product your want to sell. It is the way way you build the community which defines what the community wants. When you know what the community wants and you have customers and the challenge is to match what you are now doing with the effective behavior of your community, not the opposite…
    and so on…

    How LENR-Cities works ?

    0. LENR-Cities build the whole plan and address initial conditions to start his business.
    1. LENR-Cities develops a Business model. Simply, a Business model describes how you create value. LENR-Cities has developed a business model to create value with partners. We know what we want to do, not how we are going to do it.
    2. LENR-Cities sells this business model to partners, in fact answer to the questions : What is the value of the project for a partner and how they get a share of this value. LENR-Cities defines and maintain the architecture of the operating model to be able to ensure consistency between the Business and the operating model to be implemented.
    3. Initial players participate in the implementation of the operating model of the proposed business model. The whole team is an ecosystem (LENRG). Simply, the operating model is how your execute.
    LENR-Cities is in charge of the LENRG which has its own offering (Ecosystem resource but not only), partners are in charge of LENR (this is their business). As they share the risk with LENR-Cities, they share the value.
    4. in parallel with (3). We are building our first scientific projects and are making proposals to selected companies, in order to get the initial fuel of our project.
    5. We create our innovative fund and we develop a business ecosystem around our initial scientific projects.
    and so on….

    How we make money?
    Investment = Ecosystem resources.
    Return on investment = a share of the total funding (industrial crowd funding)
    Value created = Minimize the cost of risks for industrialists and increase the value of risks for investors.
    What does that mean ?
    Simply, cost of risk for an industrial is how much it costs not to be ready when a technology is going to reshape its business. Bigger is the company higher is this cost as more time consuming and difficult it is to change.
    For medium companies, the cost of risk is to do research too expensive for them, and not to make value with innovative stuff which is higher as competition has not made it as a commodity yet.

    Simply, the value of risk depend on the probability to succeed when you invest. The return on investment on business with a risk depends on the effective risk.

    How LENR-Cities reduces risks? back to preamble….

    Additional question ; Why LENR-Cities shares all these information. Because when you read a book about how to drive, you are not a driver. hm, sometimes, you can 🙂 in this case, you will be probably a good friend.

    • we want LENR Fusione Fredda

      Trying to understand better….

      There are risks involved in being ‘the ideal middleman, or environment’ at a cost, when the internet is completely free.

      Uber and AirBnB are user-demand driven phenomena. They are ‘middlemen’ of sorts, which charge and profit on their catalyst platform for a mass-type user defined demand, and a potentially mass type of offer: this is scarcely regulated (for the time being, and in certain Countries) compared to what is available through the well licensed taxis and hotels systems.
      So there is a time related economic freedom, on which some governments are already clamping down. Would LENRG and Lenr-Cities want to find a slot in a similar user driven system?

      Could LENRG and Lenr-Cities be identified as a hybrid closed-open environment: there will be ‘protection’ on research (does this read “exclusive rights on”, or “confidentiality agreements” for research?), but an ‘open’ (does this mean ‘free, not charged’) interchange within the ecosystem?

      Could such an “environment” also spontaneously originate and grow, in competition with, or independently from, LENRG and Lenr-Cities?

      Would LENRG and Lenr-Cities wish to find a slot in a similar user driven system?

      The fear, IMHO, is that ‘agencies’, ‘governments’, ‘lobbies’, ‘industrialists’ have a high drag rate, especially in the LENR field (25 years and still counting should teach us something).

      So why bother begging at their door, when there could potentially be ‘unharnessed’ masses of people demanding LENR technology implementation and solutions?

      Those are likely to force the change that LENRG, as an environment, envisages.

      • Michel Vandenberghe

        Thank you. Very interesting…

        You: Would LENRG and LENR-Cities want to find a slot in a similar user driven system?

        Michel: Yes, we need to innovate faster but organizations want to survive to changes. There’re two trends. Working on making organization more adaptive and create an environment which makes organization more resilient to changes. We have a focus on the last one, a mass-type user defined demand. And we have a focus on implementing an organization who is more adaptive.

        You: Could LENRG and LENR-Cities be identified as a hybrid closed-open environment: there will be’protection’ on research (does this read “exclusive rights on”, or “confidentiality agreements” for research?), but an ‘open’ (does this mean ‘free, not charged’) interchange within the ecosystem?

        Michel: Protection means to offer to scientists an environment to do research and get a fair share of the value they contribute to create. LENR-Cities is committed on that. Open means value creation and sharing is based on usage, not ownership. People can make value with what they own and this is their business.

        You: Could such an “environment” also spontaneously originate and grow, in competition with, or independently from, LENRG and LENR-Cities?

        Michel: Yes and it is also part of our strategy to foster such trend. Independently, yes. In competition? They can compete with us but we do not compete with them.

        You: The fear, IMHO, is that ‘agencies’, ‘governments’, ‘lobbies’, ‘industrialists’ have a high drag rate, especially in the LENR field (25 years and still counting should teach us something).

        Michel: Government 2.0 is out of our scope… Yes, sure. Global Challenges should drive them to consider how to support LENR but the impact of LENR is a real issue. On the other side, LENR community must consider a new strategy to get recognition and a fair share of LENR value.

        You: So why bother begging at their door, when there could potentially be ‘unharnessed’ masses of people demanding LENR technology implementation and solutions?

        Michel: You are right, theoretically I think, and with 3D printing, Open everything, functional and sharing economy and so on, if one adds a decentralized source of energy, the whole system explodes. LENR may be the catalyst of this major revolution. But considering our ecological pressure on the planet… LENR without some major change in our capabilities to innovate… We need a serious effort to re-engineer our planet… About industrialists. Give them a theory and some prototypes to start and many of them will adopt LENR now.

        You: Those are likely to force the change that LENRG, as an environment, envisages.

        Michel: If I was confident with that, I will go in my countryside house to take care of my
        roses : -)

  • GreenWin

    “LENRG members own and commercialize their technologies and products.
    LENR-Cities only ask for a commercial license.
    Open Innovation is mandatory inside LENRG.”

    Why would one need a commercial license if “Open Innovation” is mandatory? Does not Open Innovation mean bypassing IP, patents and trademarks??

    • Michel Vandenberghe

      Open Innovation ?

      No, simply.

      While the time to make value with what you have created a thing is smaller than the time you (an others) need to create the next thing, it works. Otherwise, you have not enough time to create value ( investment goes down and so on…)

      Then, you need to let others actors to create value with what you have created and get a share of the resulting value. Do not forget the the cost of sales, marketing and so on is a lot higher than the cost to create a product (in general).
      IP is not done for this context. What is true for creating value is true for creating things. Others have things you need and you do not have ttime to make them yourself.

      In order to manage that you need ‘Open IP” 🙂

      As you should ask me what is Open IP. WIth Open IP you do not create value with IP but with making IP an open product. Remind that without ownership you can not make Open things.

      For instance : Let’s try to imagine 3D priniting with IP… It is the same mess as for Music and property rights but 2 fold more complex….

      • GreenWin

        Thank you Michael for your kind reply. I am not critiquing, rather, trying to understand. In your address to ICCF-19 you mention AirBnB as an example. This I understand as AirBnB allows a home owner to “share” or more correctly, lease a portion of their personal property to a paying guest. This model is based upon a legal structure by which a person owns their home – by deed or legal instrument guaranteed by law & government. Therefor, “Personal Property” and “Intellectual Property” are essentially the same – albeit one is physical while the other is intellectual or knowledge-based.

        Pardon my misunderstanding how you define the difference between material and intellectual ownership — without benefit of the protective law we call IP??

        • Michel Vandenberghe

          I agree and I wrote : Remind that without ownership you can not make Open things. . but ownership is a construct. One needs to own something to make value but if you can make value without ownership, what is the value of ownership?

          Think about the functional economy ( http://www.product-life.org/en/archive/the-functional-economy-cultural-and-organizational-change)

          Something can be own by “Nobody” and its usage create value (This is the usage of IP which may create value). Usage can be a measure of ownership and value.

          The true problem is that we are not a state and it is why we need to work with innovators in law ( not easy to find them) to create a kind of contract in order to make the corresponding rights “portable”.

          IP can be an asset of the ecosystem. A company with IP can bring its assets in the ecosystem. Our objective for iP is topromote the sale of IP in volume and at low cost.

        • Michel Vandenberghe

          Alain has found an link about Open Patent. Another interesting topic.
          http://techcrunch.com/2015/04/23/open-patent-licensing/
          You still need patent.

  • Wolfgang

    The title should say LENRG (instead of LENG), pronounced as lenergy.

  • Michel Vandenberghe

    Tom Darden, Michael McKubre and others, all are saying we need to cooperate and build an ecosystem of scientists and so on. If you have another concern, please ask a question.

    Peter Gluck, a good friend, send me this link to help.
    The 5 Strategy Rules of Bill Gates, Andy Grove, and Steve Jobs
    http://hbswk.hbs.edu/item/7704.html

    we have published papers about the value and the purpose.
    http://www.e-catworld.com/2014/08/21/lenr-cities-announces-business-progress/
    http://www.e-catworld.com/2015/04/16/lenr-cities-publishes-white-paper-outlining/

  • we want LENR Fusione Fredda

    Unfortunately, I fear you have a point there. More transparency is needed, answers to simple questions.
    The model seems difficult to grasp, or not immediate – at least to me.
    How does it work if I want to put my (say) 5,000$ savings in this fantastic idea?
    Am I a customer facing an annual fee? Do I get a banefit in exchange of the investment, or is it simply 100% my bet (a donation for a good cause)? (this issue is naturally very tricky because of current legislation, which is different in each Country).
    Personally, I believe it will work, I believe LENR is going to be a revolution, but what is the guarantee that Big Oil is not going to put in billions, if participation is open, effectively influencing at least some LENRG decisions? How can the small fish become a member here, and help?
    I know the commitment by the organization is complete, but what can be done to guard against negative interferences, which the size of any investment can cause?
    If this is a business as all the others, it will succumb to profit logic, which goes beyond Dardenian honour and the ‘good for everyone’.
    If this is a business that is ‘confidential’, and people off the street do not understand it, it will take off, perhaps, behind the scenes, with the best intentions – but what will be the driver, necessity?
    Who is to say that large corporations, the big players, have human and environmental health as a priority with comparison to short or medium term profit?
    In my view, LENRG can be extremely successful – but public health and people’s interest in their own health and future should be the drivers.
    How do you plan to achieve the kind of success we all wish for LENRG?
    Do you see lenria.org as a competitor or a partner for LENRG?

    • Michel Vandenberghe

      You know that union is strength. Right? One have two options: Either using the military-industry-science model (very efficient in the US) or something new. We are working on something new. Remind that if it was easy it will have already been done.

      Do not confuse usage which is simple and design which is complex. Did you watch the video?
      Anyway, the model is simple. What one needs is a flag (brand), people to translate
      scientific opportunities in opportunities for industrials and investors (build a team), a digital platform to make everything accessible (transparency) and money. Then, there’re hundreds of details.

      If you want to invest is another question. We have not yet an “investor page” on our web sites. Investment rules are very strict including with Crowd funding as you know. Our project is to fund research. As you mention, legislation is tricky. Try to explain that to financial regulation authorities.

      Our customers are industrialists and investors, not people. Association and people
      can join the ecosystem, LENRG (No fee obviously). I got a request from an association based in the Connecticut for instance. But do not ask us for products: This is not our
      business, this is the business of some members of LENRG.

      It is not a business as usual, it is a business to redefine what business is. The true question is which approach will enable us to address all global challenges in the next coming 20 years and the solution requires to get all small fish to be on board. We are a small fish J

      What one needs to understand is that business is the only way to change what the business is. Values are not enough to drive changes. But you can define a business environment which leverages some values.

      About big corporations. Most of them are going to die in the next 20 years without huge transformation. People who govern the world know. Today most of them are working on a transition not a transformation. Corporations need to become swarm of small fish. Financial stuff is another question. It is about governance. But revolution in finance should come too, driven by business.

      We need two things; LENR and innovate faster that is design a business where change creates more value than continuing what we do. It is not a piece of cake.

      I agree that public health and people’s interest in their own health and future are the
      drivers. The future already exist and will be shape by sharing economy, circular economy, green manufacturing, 3D, new moneys, social business and so
      on and GAFA is the inheritance of the old market model.

      How do you plan to achieve the kind of success we all wish for LENRG?

      With luck, investors, a lot of work and you.

      Do yousee lenria.org as a competitor or a partner for LENRG?

      Partners.

  • Michel Vandenberghe

    LENR-Cities presentation at ICCF19 https://www.youtube.com/watch?v=P6LpryZ3u-E