Sep 12, 2024 · 45m · catalyst
The better mousetrap fallacy
0:00 / 0:00
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of Catalyst, host Shail Khan and Energy Impact Partners' Andy Lubershane explore the 'better mousetrap fallacy,' examining why climate tech startups frequently fail when pursuing incremental innovations against rapidly scaling incumbent technologies rather than targeting 10x structural breakthroughs or standardization.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Shayle holds 38.3% of the talking time here. How this is scored →
Shayle as informed peer 5.8 Guest teaching 2.3 Guest disagreement 1.5 Shayle pushing back 2.5
speaking balance: gold is Shayle, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 34:48 DAC has 150 mousetraps and no mice
Andy forcefully dismisses the flood of 150 direct air capture startups, claiming the race to engineer new capture mechanisms is 10 years too early because virtually no demand exists at current price points.
Hardest push from Shayle ▶ 36:59 Shayle rejects freezing DAC innovationShayle explicitly dissents from Andy's view on DAC, arguing that incumbent approaches cannot reach the necessary $50 per ton target, which justifies continuing to invent new capture mousetraps.
Biggest teaching moment ▶ 11:08 American novelty bias vs Chinese factory iterationAndy analyzes why the American venture culture's obsession with bold, novel technology blinds investors to the competitive moat of continuous, incremental factory-floor scaling mastered by Chinese manufacturers.
Shayle holds their own ▶ 28:56 Shayle on fragmented nuclear licensing curvesShayle demonstrates his energy economics grasp by showing that licensing 20 distinct advanced nuclear designs sabotages cost reductions by preventing serial deployment of a single standardized design.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Shayle as informed peer | Guest teaching | Guest disagreement | Shayle pushing back | Why |
|---|---|---|---|---|---|---|
| Mid-Roll Commercial Sponsorship Segment 1 | 5 | 3 | 1 | 2 | Shayle frames the episode around the better mousetrap fallacy and the classic debate between innovation and deployment. Andy clarifies that while breakthrough tech is essential in unsolved sectors, chasing marginal improvements in mature sectors misallocates capital. | |
| Historical Precedents in Solar and Batteries | 6 | 2 | 1 | 2 | Shayle draws parallels to the historical shakeout in solar PV where crystalline silicon crushed dozens of thin-film startups. Andy explains how lithium-ion battery costs fell through incremental manufacturing scale and learning curves in China rather than novel chemistry breakthroughs. | |
| Grid Storage and Legitimate Exceptions | 6 | 3 | 2 | 3 | Shayle quizzes Andy on whether sodium-ion batteries fall into the mousetrap trap. Andy distinguishes between derivative battery chemistries and non-competing categories like multi-day storage or industrial thermal heat storage. | |
| Mid-Roll Commercial Sponsorship Segment 2 | 6 | 2 | 2 | 3 | Following the mid-roll ad break, Andy argues that nuclear power is a regulatory problem rather than a technology problem, advocating for deploying proven Gen III+ designs. Shayle notes that licensing 20 divergent reactor designs fragments the learning curve rather than solving costs. | |
| Direct Air Capture and Market Demand Imbalance | 7 | 3 | 2 | 4 | Andy asserts direct air capture is suffering from a lack of buyers rather than a lack of capture methods. Shayle directly pushes back, arguing that unlike stationary batteries, existing DAC technology is nowhere near cheap enough, necessitating further fundamental mousetrap exploration. | |
| Macroeconomic Shifts and the Real Mousetrap Solution | 5 | 1 | 1 | 1 | The pair discuss how the post-ZERP macro environment acts as an earlier filter against weak incremental startups. Andy closes with a humorous personal reflection on how filling wall holes is the true 10x alternative to mousetraps. |
Statements from this episode (13)
Lubershane: Capitalizing alternative tech in mature climate areas paralyzes deployment
“There are some areas, though, where I do think that the mousetraps we have are good enough, and actually are likely to get better incrementally on their own, such that funneling a lot of capital into trying to build a differently better mousetrap is probably a…”
Khan: Over 100 startups attempted alternative solar cells before silicon won
“Cause back before it was obvious that crystal and silicon was going to be The dominant winner. There were a hundred technology startups. I mean, literally a hundred technology startups doing different kinds of solar cells, lots of different thin film stuff, SI…”
Lubershane: Energy storage startups underestimated lithium-ion cost declines from manufacturing scale
“I've, you know, watched and talked to dozens of companies and founders, and I think Oftentimes making the same mistake as they were trying to commercialize some kind of better mousetrap for energy storage, which is they underestimated the pace at which the cos…”
Lubershane: US obsession with novelty created dependence on China's manufacturing scale
“And I think, you know, comparing the US and China, part of the issue with the US is, you know, we really do kind of tilt towards this mindset of novelty and, you know, boldness and daring and restlessness, which are definitely huge assets and strengths for the…”
Khan: Clean tech startups need a 5x-10x improvement to beat scaling incumbents
“If you're building something that you think is a better mousetrap, like, it's 20% better, Than whatever the incumbent technology is. In all likelihood, your reaction, my reaction, when we see a company that's doing that is like, 20% better is not better enough…”
Lubershane: Startups 20-50% better than lithium-ion repeatedly get crushed
“It's kind of amazing now for over a decade, there's almost a continuous stream of companies I feel like I've seen across a wide range of different approaches to building a mousetrap to store energy that have always been in the 20 to 50% theoretically better th…”
Lubershane: Startups are not well positioned to develop sodium-ion batteries
“The fact that it's been largely developed by and is already being scaled up by the exact same large industrial players, battery manufacturers that make existing lithium ion you know, means that it's, You know, I guess it's, I guess it is a better mousetrap, bu…”
Lubershane: Gen-III+ nuclear reactors are all the industry needs
“So-called Gen-III technology or, you
Gen three plus technology, which is very much an incremental improvement over the light water reactor designs that have come before, is really, in my opinion, all we need.”
Lubershane: Serial deployment of 1-3 reactor designs beats novel nuclear
“If I were the omnipotent energy czar of the country or the world, I would pick
One, two, maybe up to three designs, and deploy them serially and, you know, say we're gonna do 10 of these, and we're gonna see how it works out, maybe 10 of each and we're gonna s…”
Lubershane: There are over 150 direct air capture startups
“There are now, I think we found a list somewhere, and it's a pretty credible list of over a 150 direct air capture startups, so there are countless mousetraps.”
Khan: There are more carbon removal startups than meaningful buyers
“Depending on how you want to define it, I'm pretty sure there are more carbon removal startups than there are carbon removal buyers, at least at any scale, like meaningful scale of buyers.”
Khan: DAC needs more startup approaches despite an impending reckoning
“There's an extent to which I still want more mousetraps in DAC, despite I think what's going to be a pretty painful reckoning in the startup landscape, just because I think we need to find something that is truly cheap enough. If we're going to do DAC at scale…”