Saturday, August 22, 2009

You know, like a cow’s opinion

Do any of you read Seth Godin? If you haven’t heard of Seth, he is a very successful entrepreneur/marketer, who along with Malcolm Gladwell, is one of today’s socio/psycho-behavioral experts (the Alabama, to Gladwell’s Auburn, if you will). He’s written some pretty neat books (Purple Cow, Tribes, etc.), and everyday he posts some very interesting thoughts on his blog (If you’re in Sales, PR, Marketing, etc., I don’t see how you can’t be reading his (FREE) daily advice).

Well today, he
posted a pretty thought provoking question:

Let's say your goal is to reduce gasoline consumption.
And let's say there are only two kinds of cars in the world. Half of them are Suburbans that get 10 miles to the gallon and half are Priuses that get 50.
If we assume that all the cars drive the same number of miles, which would be a better investment:
Get new tires for all the Suburbans and increase their mileage a bit to 13 miles per gallon.
Replace all the Priuses and rewire them to get 100 miles per gallon (doubling their average!)
Trick question aside, the answer is the first one. (In fact, it's more than twice as good a move

Being the auditor I am, I had to know how he came to such a bold conclusion (what were his assumptions??). So I e-mailed him to ask for his formula.

First, I’ve got to say how impressed I am, that Seth replied (on a SATURDAY morning) within 1 hour!!! Seth, you’re a gentleman and a scholar.

But his reply didn’t really answer anything. He just said “assert 1000 cars and 1000 miles driven per car and use excel. you'll see”

Hmmmmmmmmmmm, ok. Maybe, he was trying to be the wise teacher that encourages his students to try out various formulas on their own???

I’m no car expert, but let’s say it costs $500 (?) for a new set of tires, and $5,000 (??) to re-wire your Prius (I realize this is probably WAAAAAAAY under-priced, but I had to start somewhere).

Click to Enlarge)

Sure enough, it does cost LESS to get new tires on your gas-guzzling Suburban, than re-wire your green Prius, but it’s really a moot point. In both situations, you’re better off (financially) BEFORE these improvements????

So, if you’re goal is to reduce gas consumption (AND you want to save money), you really should just be riding a bike??


nick said...

A - I think the point of the article is that there is more environmental benefit in putting money towards improving gas guzzlers than already efficient automobiles. Look at the amount of fuel saved for each: Over a distance of 1000 miles, the Suburban would use 100 gallons of fuel, then ~77 gallons after improvements (saving 23 gallons). The Prius would go from 20 gallons to 10 gallons over the same distance, saving 10 gallons. That is less than half the amount of fuel! When upgrading your vehicle, consider the gallons per mile calculation instead of MPG.

- n!ck

A said...

yeah, i was totally focusing on the financial impact of Seth's problem, instead of the actual question/solution.

thought about posting a REMIX to this post with the correct solution (in .xls format), but it seems you've beaten me to it!!

Sarah Green said...

You two are pretty nerdy. I feel like you're speaking a foreign language.