Q&A: Gary Lauder, venture capitalist, on designing the future as if time mattered

Gary Lauder may not be an urban planner, but he has calculated that a single intersection wastes 14 person-years annually and advocates that our planners think about design in terms of time lost.

Would city councils think differently about unnecessary stop signs if they realized the resulting traffic clogs were more than just an inconvenience? Gary Lauder, a venture capitalist who advocates for design that takes our time into consideration, hopes so.

I spoke with Lauder about a traffic sign that encourages taking turns, how a single intersection can waste 14 person years annually and how business might help fix these problems. Below are excerpts from our interview.

You're a venture capitalist by trade, but in your spare time you think about how we can make traffic patterns, taxi queues and other aspects of our daily lives more efficient. Why do you care about this?

I've been thinking about this kind of thing since high school. This isn't my career, but I'm vocal about it. For god's sake, I'm 50 already and nobody has done anything. Whoever is supposed to be paying attention to these things isn't doing what's self evident and obvious. There comes a point when you stop waiting for someone else to do something. Having said that, this isn't my main role in life. It's not likely to be. Whether any of this comes about is unclear. If the innovation isn't obvious to other people, then I try to put in on a silver platter to get others to run with it. But that has yet to occur.

In 2010, you gave a TED Talk proposing a new type of traffic sign that encourages drivers to take turns. Talk about that.

The idea was inspired by my having gotten a traffic ticket at a stop sign at a three-way intersection. At the straight portion, it was painfully obvious there was no other car to stop for. I didn't come to a full and complete stop. That got me thinking about why that stop sign was there in the first place. It's there because during rush hour there are cars trying to get in where traffic wouldn't otherwise stop. Unless there's a stop sign, there's no way for them to get their turn. That would lead to a big backup on that side street or people taking their chances jumping out into traffic. But instead you have a stop sign where everyone needs to stop, even if no one is there. What's missing is a sign that says, If someone is there, you stop, and if no one is there, you don't stop. That's not a part of the repertoire of signs. There's very little innovation that happens in traffic signs.

The main idea of the talk is howto measure these things in terms of societal benefit by the amount of time and gas wasted. Since there's so much loss to society by wasting people's time, there are so many opportunities to not waste that time. Roundabouts are not inexpensive to put in, but there's so much value in time saved that it's worth it to make that investment.

Your talks are fascinating in that they connect the time and energy we spent at, say, unnecessary stop signs with lost money. Why don't we traditionally think in this way and why should we?

When I'm stuck in traffic or waiting on a line, I can't help but think how it could be improved. Why is it this way and why isn't it better? Most of these things happen because there isn't really a customer-service orientation on the part of people empowered to make these decisions. That's a terrible injustice. The way to get people to think about it is to say people's lives are being wasted by this inaction and thoughtlessness. This does warrant more thoughtfulness. How do we weigh that against other things? Any government expenditure needs to be justified. We tax people's money, but we don't count the fact that we're taxing people's time. And if time is money, we're taxing their money.

Can you give a couple of examples of how much something like an unnecessary stop sign costs in terms of time and money?

As I mentioned in my TEDx Marin talk, in my little town there's one intersection with four stop signs. Every morning and evening, a five-minute backup forms. That equates to 115 person-hours per day wasted, which is the equivalent of 14.3 person-years each year. If you multiply that by the average wage in America ($20 an hour), that equates to about $600,000 per year in time wasted. To translate from an annual cost into a one-time cost, you need to figure out the time value of that money. If the town could borrow money at a 5 percent discount rate, it would be worth up to $12 million to fix this problem. The good news is it could be fixed for less than a half-million dollars. If you subtract the cost of fixing it from the value of fixing it, then you end up with the cost to society of not fixing it.

In Aspen, they've been debating how to change the entrance to the city for more than 30 years. Inbound in the morning and outbound in the afternoon, people are delayed by about 15 minutes. The aggregate number of cars delayed is about 10,000. If you multiply that out including the same average wage, that's $41 million per year of the cost to those commuters. If you divide that by the same discount rate, that's an $800 million cost to society. It's worth it to spend up to $800 million to fix that. It wouldn't cost that, by the way. Part of the reason why they haven't fixed it is that the people who it affects have residences outside the city. They're not represented by the city council.

The issue you just mentioned is one of the obstacles to making these changes happen. What are the other challenges?

People aren't complaining about it. People only complain about things they perceive they can change. If a construction site was causing a delay, people would be complaining. But it's a stop sign. People don't think about the fact that there's a better alternative. The town council tends to be responsive to complaints. Another issue is simply that roundabouts aren't familiar to many Americans. Before they're put in, there are always people who say it will cause the end of civilization as we know it. But in every case, they find it isn't so bad. People have tremendous fear of the unknown. That's an issue that has yet to be addressed. Also, it will cost some money. There's always a limited budget. Just because we'll be saving people $600,000 a year of wasted time doesn't mean the town will get any of that value to help pay for these things.

This isn't part of your work as a venture capitalist, but do you see any business opportunities in these ideas? What might they look like?

There are two opportunities I perceive here, but I don't know whether anyone is already doing these things. One is to create a lower-cost instant-roundabout type of technology, which might already exist. I don't want to be too specific on this because I don't want to reduce the opportunity for some future entrepreneur to patent what I have in mind. This summer I'm going to an expo to see what kinds of solutions exist. There's also an opportunity to come up with a better way to measure traffic flow and queuing.

What do you see as the future of these issues? Is there any indication that the next 30 years will be more progressive than the last 30?

Judging by the past, it's hard to believe the future will be any different. However, there is one thing that's different about the future than has been about the past. Due to the advent of the internet, more citizens and lay people feel empowered to get involved with things they know little about. I'm an example of that. That's what it might require for these things to come about.

Is there anything else you'd like to add?

I'm still passively looking for a town that wants to try the take-turns traffic sign. It should only be tried under a controlled set of circumstances. You want for the vast majority of people who encounter it while driving to have already been educated as to what it means. That means it has to be a town that is small enough that you can afford to educate everybody and also distant from a major metropolitan area. To me, that's the ideal place to try this out. There is a process established for doing such experiments. That process would need to be followed. The first thing you need is a town that wants to do it. It's been three years and counting and no such town has come forward.

Photo: Gary Lauder at TED2010 / By James Duncan Davidson

This post was originally published on Smartplanet.com

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