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Selling the Teleporter

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01/2017
This case was written by Marc Kitten, visiting Professor of Finance at Imperial College Business School.
It is intended to be used as a basis for class discussion rather than to illustrate either effective or
ineffective handling of an administrative situation.
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As Ariadne gazed into the sky, she wondered how long it would be until the day arrived when
women (and maybe some men) would routinely visit other places in deep space. The

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possibilities were endless. One didn’t even need to find a hospitable planet. With the new
technology, one could bring, at no cost, whatever was needed to survive: air, water, food… Of
course, you needed to go there first by traditional means, and to bring with you all that was
necessary to install or build the machine. But would that actually work? It had not been tried so
far. Antonio thought distance didn’t matter. It would just take time. But he wasn’t that sure.

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A bit of history

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Teleportation is an ancient and recurring human dream. It is present in many myths, ancient
and modern, most recently in Wagner’s Ring des Nibelungen. Earlier stories of teleportation
typically have a magical or spiritual element: In the famous Aladdin story of The Arabian
Nights, djinns are depicted as being capable of instantaneously transporting themselves across
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continents. It’s only recently that scientific explanations have been attempted, for example in
1897, in Fred T. Jane’s novel “To Venus in Five Seconds”. Since then, modern Science fiction
has routinely attempted to describe the technology that would make it possible.

In Star Trek, people or inanimate objects are placed on the transporter pad and are “dismantled
particle by particle by a beam, with their atoms being patterned in a computer buffer and
converted into a beam that is directed toward the destination, then reassembled back into their
original form” (usually with no mistakes).

In the eponymous series, the Stargate creates an artificial wormhole between two Gates. After
dialing their destination, “travelers are disassembled by the originating Gate, transferred as a
matter stream with reassembly instructions to the receiving Gate, which then reassembles them
upon arrival”.

In Douglas Adams’ The Hitchhiker's Guide to the Galaxy series, teleportation has been
described as "not quite as fun as a good solid kick to the head" on account of the fact that
teleporting involves having your atoms ripped apart in one place and put back together
somewhere else.

Recent notorious literary successes have revived our dreams. While J.K. Rowling’s Harry
Potter takes us back to good old supernatural explanations, in Jumper, Steven Gould explains
that his hero “teleports by warping Space/Time around himself, creating a wormhole or gate
that lets him appear instantaneously anywhere on Earth” 1.

1
All references: Wikipedia

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Antonio McCat
In spite of his recent fame, little is known about him. He was raised in Britain in a caring family.
Suffice to say, in his childhood Antonio doesn’t seem to have shown much interest for anything
else than his PlayStations™.

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Antonio’s mother explained:

“The challenge with Antonio is he can’t think of anything else than his screens. It was
already like that as a small boy with Minecraft. It never improved and he will expedite
meals and homework to go back to his virtual world. I don’t know what to do.”

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Regardless, Antonio did well at school and went on to apply to engineering studies at Imperial
College. The boy had never been very outgoing. While he was a student, instead of opening to

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a world of new opportunities in vibrant city of London like most of his classmates, he became
even more reclusive, spending all his time in the labs.

Ariadne was his classmate and probably the only person he would talk to, albeit as briefly as
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possible. It was a bit of a surprise when, one day, he told her he would share his discovery with
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her if she could promise to keep the secret. And there it was, a huge machine secretly built in
the ancient and generally forgotten galleries beneath the university. A machine that was able to
send an object or a live being to a similar other machine, wherever it was placed. In this case,
the second prototype was built in a remote part of Antonio’s beloved Scotland, close to his
grandparents’ farm. At first, Ariadne was sceptical. But, soon, when she emerged in a place that
definitely wasn’t South Kensington, she had to reckon the technology worked! She was a bit
dizzy but no more than when she took the bus, and the experience was rather effortless. Antonio
wouldn’t explain the principles in much detail but there were a few key specifications.

Technical specifications
Unlike quantum teleportation which –so far- concerns only the transfer of information,
teleportation is a true form of transportation.

• Teleportation can only occur between two stations.

• Teleportation actually occurs at the speed of light, but because any distance on Earth is
negligible at that speed, the trip is perceived as instantaneous.
• Each station can either send or receive but cannot do both simultaneously.
• There seems to be an uncompressible one-minute delay to recharge both stations after
each transfer. This is already a progress compared to the first prototypes and Antonio
doesn’t think it can be further improved.
• There was a new constant of physics that Antonio discovered during the trials: the
maximum weight that could be transferred at once was limited to 70 kilograms (in fact,
the exact number can be rounded to 70.0318 kg). Any attempt to transfer more than that
at once would result in the difference staying in the sending station, while 70kg would
appear in the receiving station. Unfortunately, it wasn’t possible to select which 70kg

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would travel. Attempts to reunite the two parts through a second transfer were not
conclusive.
• Another limitation of the technology is that, sometimes, while the sending occurs
normally, nothing appears in the receiving station, with no chance to ever find it again.
Antonio doesn’t think this can be solved but has calculated the probability of this

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happening was one in hundred million, on average.
• A teleportation station or teleporter is a large machine that requires a significant
footprint: at least 10 x 10 meters (100 m2 or 1100 sq ft) with a height of about 10 meters,
making it look like a big cube. There is a bit of flexibility to reduce the height but what
is really important is the total volume of 1000 m3 which cannot be reduced. The cost for

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building a station depends on the number of stations built and is estimated in exhibit 1.
Ariadne estimates that, a month after starting industrial production, it will be possible

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to deliver any new station on-site within 4 days on average.
• The cost for a fully comprehensive insurance is $0.5 million for a station, yearly. It
covers all forms of liability.
•
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Each station needs to be constantly powered on, whether used or not, and consumes
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3,000 kWh (kilowatt x hour 2) a day. The cost varies between 7 and 32 cents per kWh.
Global variations in electricity costs are provided in exhibit 2.

The transportation industry

The teleporter had the potential to disrupt the transportation industry. But what was its true
potential? Train and airline passengers’ figures for the USA are provided in exhibit 3.

Ariadne was aware of a major issue: this invention was so important that it couldn’t be left to
one country, one organisation, let alone one person. It could also not risk falling into criminal
hands. Too many organisations could be motivated to capture it for their unique benefit. The
obvious solution was to share it with the rest of humanity, like Internet or MP3. On the other
hand, it was tempting to look for a compromise that would allow Antonio to monetise it
partially. But Antonio was not a good communicator. He needed Ariadne’s help.

Conclusion
It had been a year since Antonio had shown her his invention. Today, Ariadne felt both excited
and overwhelmed. She had singlehandedly negotiated with the United Nations an agreement
that would allow Antonio to keep the exclusive commercial rights to his invention for one year,
from the moment they would launch in about one month. After this, the teleporter would fall
into the public domain, the secret of the technology would be released and the competition
would quickly build up. They had one year to build a business but where would they find the
money?

2
As an example, a large modern fridge may consume 1kWh a day.

3
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Selling the Teleporter

Exhibit 2
Exhibit 1

Electricity prices
Manufacturing cost of a station
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4
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Exhibit 4
Exhibit 3

Overweight figures
Passengers in the USA
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5
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6
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Exhibit 5
Evolution of borrowing costs
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Selling the Teleporter

Exhibit 6
Evolution of venture capital funding
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8
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9
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Taught by Marc Kitten, from 10-May-2024 to 31-Jul-2024. Order ref F508245.
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