Greek Complexity

Great article! Why to Not Not Start a Startup, writes Paul Graham. Great read for anyone that earns a living, not just for entrepreneurs. Couple quotes:

If you're too inexperienced to start a startup, what you should do is start one.

and

To almost everyone except criminals, it seems an axiom that if you need money, you should get a job. Actually this tradition is not much more than a hundred years old. Before that, the default way to make a living was by farming. It's a bad plan to treat something only a hundred years old as an axiom.

Expressed unexpectedly like that, it does set one thinking.

Golden Eras

A friend posted an interesting thought on his Facebook page a few days ago that I thought I'd share:

People talk about Golden era of this and that being 50+ years ago and wish they were there. I wonder what are we in the golden era of now?

Someone responded:

We are in the golden era of tech n biotech innovation!

To which my friend pointed out:

I don't know - its not like we sit in awe of the next technological or biotech innovation - much like years ago when flying was a super exciting event or when everyone gathered to watch the space launch. These days people couldn't even care less about the space shuttle launches!

Someone else then added:

The only thing which gets people as excited as you say nowadays is soccer in Europe and S.America, Superbowl for N. America, Cricket for Indians and Chinese New Year for the Chinese, the movie Titanic in 1997 and iPhone, iPods, X-Box, playstations and Harry Porter in general..... Some Hollywood and some bollywood movies also tend to make people queue overnight for tickets.....
So you can say we are in the Golden age of culture and sports....
May be we live in the Golden age of metro-sexuality, bi-sexuality, transsexuality......

You have a very valid question... but the answer to it is that we live in the Golden age of "something" that only the future generation may refer to as "Golden" and for us is just plain everyday "bull-s**t" :-)

And then I piped in with:

I think there are no more golden eras left. Things move too fast for that and like [the guy above] points out, there isn't one thing that rivets the world... very little homogeneity. It's like a comment I read once made by a film critic or gossip columnist or something. Went something like- in the Golden Age of Hollywood, we had Stars, but today we only have celebrities.

Maybe if someone looked back a thousand years from now at the scale of a few hundred years, they'd find a Golden Age of something. Innovation? Creativity? The spread of the rule of law? The emergence of intelligence at the level of our entire species (as opposed to individuals or groups of individuals) enabled by boring stuff like better education but also by better tech? Overt religiousness? The rise of Big Oil? Ok, just kidding about that last one!

What do you think?

Pragmatic vegetarianism

Interesting article. JG is Jeff Goldberg, a journalist with The Atlantic. JF is Jonathan Safran Foer, a writer who recently published the book Eating Animals. 

Would normally have just stuck this on my radar feed but I thought I'd bung in a quote:

JG: When I was a vegetarian, the first thing I would cut out was mammals, because I figured that mammals are the closest species to me. Birds are more distant and fish are still more distant, but you argue very strongly that beef is actually the most humane thing to eat. Do you differentiate at all, on a moral scale, between eating mammals and eating birds and eating fish?

JF: Another way to think about this is how different does an animal have to be for us to simply regard it as a living thing. And I think this kind of dichotomous way of framing this - it does a real disservice to the conversation. Even the word 'vegetarian.' You were talking about cutting things out of your diet, instead of cutting down. There are an awful lot of people who care about this stuff and for reasons good or bad, just can't envision becoming vegetarian. So what do we do with that? Do we throw our hands up in air and say that since I'm not going to be perfect about this I'm completely off the hook. They will say, `I was a vegetarian for six years and I found myself at an airport and I was shaking from hunger so I ate some McNuggets and that was the end of my vegetarianism. It's just such a bizarre way of thinking about it.

I care about the environment, I try to buy good appliances, I certainly turn the lights off when I leave rooms, and so on and so forth, and yet I also fly. So should my getting off the plane say 'Okay, I know that was bad, so I'm now bad, I'm going to leave lights on, I'm going to let my car idle.' It's nuts. I wish people would talk about food in a way that was more similar to how we talk about the environment. The question of 'Are you an environmentalist or not?' is nonsense. It just doesn't make any sense.

JG: Something is better than nothing.

[...]

JF: Maybe one day the world will change, that we'll be in a luxurious position of being able to debate whether or not it's inherently wrong to eat animals, but the question doesn't matter right now. 

Twitter Rant

The FT has an interesting article on Tencent, the Chinese Internet company that has grown leaps and bounds over the past few years to now become one of China's largest and most valuable Internet players. Quite well written, I thought, covering all the major aspects of Tencent's business and the reasons for its success so far.

What irritates me about the article though, as with so much press out there, is the headline: "Why Tencent could teach Twitter a few tricks". Why does this irritate me?

For starters, Twitter is mentioned all of once in the article body. The article is about Tencent, not Twitter. Why insert Twitter in the headline, Mr Sub-Editor, when the journalist herself has focused on Tencent?

But more importantly, where is the sense of proportion? Tencent is expected to have revenues of $1.5B-2B for 2009, it has 500M active accounts for its QQ messaging platform alone, its market capitalisation is $39B, it had a net margin of 39% as of 2008, and the list of achievements goes on.

And Twitter has... hype. The company itself doesn't seem to release user stats but estimates I've seen are piffly. Take this post for example which estimates that US users will number 18 million as of the end of 2009. Globally, the service may have anywhere from 35 million to 45 million users. Monthly unique visitors number in the 6 million to 10 million range. But, and here's the rub,

• "Users” are defined as people who access Twitter at least once per month. Once per month?!
• How many of these "users" are robots? No one knows.
• Twitter also has a high abandonment rate, estimated at 60% in the first month alone as of April 2009, meaning that 60% of users abandon the service within the first month of signing up! Who knows how many more follow the crowds to the exits thereafter.
• And most importantly, Twitter doesn't make money!

The only thing Twitter has done well is market itself to the media (not users). Ok, they've had a bit of a role in helping to disseminate news during occasional events such as the Nov 2008 Bombay terrorist attacks but this doesn't in any way make the company a broad-based success.

So can the media please stop with the Twitter hype? There are many many more deserving companies out there, especially outside the US.

Linkfest

Yes, it's a bit of a linkfest this couple of days. If you don't know what I'm talking about, you need to subscribe to my RSS feed or type in your email into the box at the top right of this page or take a look at the Radar section in the right navbar.

Some "dream"

Worth a read. Excerpts:

Some are leaving behind their homes and mortgages right away, while others are simply halting payments until the bank kicks them out. That's freeing up cash to use in other ways.

Ms. Richey's family of five used some of the money to buy season tickets to Disneyland, and plans to take a Carnival cruise to Mexico in March. Mr. Fernandez takes his girlfriend out to dinner more frequently. "We're saving lots of money," Ms. Richey says.

[...]

 Ms. Richey and her family made the move to Club Rancho Drive in August, when she was already several months behind on the mortgage. With Mr. Robbins's help, she recently sold the house on Caspian Drive for $195,000, money that the bank will accept to settle the $430,000 mortgage debt. She's also considering walking away from the mortgages on her two rental properties.

Showing a visitor the personal touches in her new home, including a $1,800 dining set she bought with some of her newly available income, she notes the advantages of being a renter rather than an owner. "You take a risk for the American dream," she says. "I don't have to worry about paying property tax, homeowners' insurance, the landscaping, cleaning the pool or any repairs."

[...]

With an income of about $8,300 a month and a rent of $2,200, Mr. Fernandez says he now has the wherewithal to do things he couldn't when he was stretching to pay the mortgage. He recently went to concerts by Rob Thomas and Mat Kearney. He also kept his black BMW 6 Series coupe, which has payments of about $700 a month.

Shouldn't people like this be in jail? I borrow money from you, decide later that I'm not paying and can walk away scot-free. Hang on, not just scot-free. I spend the money I've "saved" by buying myself goodies.

As one commenter said:

These people can walk away because US laws are designed to allow this. Here in Canada you cannot walk away from your home without very severe consequences i.e. the banks will take ALL your savings + property + might even garnish your wages. In the US you can just walk.

Leaving aside the moralities of this behaviour (and the proud photos that the defaulters are happy to pose for), doesn't anyone see that this simply lays the foundation for the next debt crisis? And more broadly, what does this say about the validity of contracts? What are these so-called analysts thinking when they come up with stuff like:

"It's a stealth stimulus," says Christopher Thornberg of Beacon Economics, a consulting firm specializing in real estate and the California economy. "The quicker these people shed their debts, the faster the economy is going to heal and move forward again."

Are defaulters just shedding debts or also racking on new ones, which they will again default on in future? Cheat me once, shame on you. Cheat me twice, shame on me.

Quote from a budding bureaucrat

I promise this is worth a read.

"Deep" engineering doesn't exist in Singapore, says Motochan, particularly in the context of new business formation. Ok, accepted, I guess.

And the solution?

Centralized and concerted effort with direct and appropriate KPIs needs to be adopted with regards to innovation and value-creation, across all government agencies. [...] Our kids need to feel passionate about IT and its explosive ability to create value, from zero to hero in a few years [...] Bring the fun back into engineering among our youth, and pull out all stops to attract the brightest engineers abroad, and we might just have a fighting chance at ‘genetically-engineering’ the birth of ‘deep’ engineering on our shores. Of course, we always have the alternative, which is to keel over and stop trying. But that would be very unbecoming of the Singapore Government, wouldn’t it? :)

You may begin crying now. Or laughing. Or both simultaneously.

Free wine? Deluxe home? $10K a month?

All of the above on offer and in return:

we’re looking for someone (maybe you) who really knows how to use Web 2.0 and Facebook and blogs and social media and YouTube and all sorts of good stuff like that — to tell the world about our wines and the place where we live: the Sonoma County Wine Country

say the folks at the Murphy-Goode Winery in California. Applications due June 5th, 2009.

And here I am plugging their message for them at no charge!

For the Ripplevox team

[shameless plug]

Ripplevox, pick me to trial StarHub’s BlackBerry® Storm™ smartphone because:

• Who better to review this than the guy who wrote these other reviews? (Let's not reference my book reviews too.)
• I'm already a pretty heavy mobile data user and I've used several phones and other gadgets over the last few years. So I know what works and I'll tell it like it is.
• I'd LOVE to experience a better touchscreen than the iPhone's
• I'm a Starhub subscriber, of course
• I love Ripplevox! Ok, that's just flattery :)
• Can I stop now?!

[/shameless plug]

Sixth Sense

This is by far, the most innovative interface I've ever seen and am likely to see for the next few years at least. And yet, it's conceptually so simple (execution is everything) that it's really not particularly expensive, far cheaper than what it cost them to put together those simulated scenes in The Minority Report. Plus it could be extended to several several applications (yes, that's two severals) using Internet-based plumbing that already exists today.

View the video and be wowed. And I thought the bit where he walks up to his friend was just hilarious.

Video from here.

And the Facebook debate continues

I read the title of one of Mike Arrington's recent posts and thought he was being sarcastic. Glory be, he's serious!

Mike relates user complaints about Facebook's interface changes to design by committee. That's wrong. Design by committee is before the fact, user feedback is after. I don't think any user is saying they can do a better job at designing the Facebook interface; they're just saying what they hate about what Facebook themselves have done.

So the broad ideas, vision, back-end architecture and all that is very much Facebook's job. This is NOT what users should be doing, ie users aren't involved in core design. Users don't design either Porsches or iPhones; expert designers do. What users can in turn do (generally speaking) is provide the market reaction. Give feedback on specific hitches and glitches that affect them. What Robert Scoble calls taking "splinters out of the experience".

Someone else comments on the same page:

Ignoring your users much of the time is the path to oblivion for a company. The examples cited about Porsche and the iPhone are examples of survivor bias. There’s probably 100 or 1000 examples for each of those where the idea and/or the company bit the dust.

How true. Case studies are one thing but can we look at the universe please?

MobileLeap

So since I complained about the lack of mobile-ready websites out there, it was just a matter of time before I discovered MobileLeap.

To understand how terrifically amazingly absolutely fantastically good this service is, first open your mobile phone browser and type in www.economist.com. Curse. Then try navigating the garbage layout that the The Economist inflicts upon mobile phone users. Curse again.

Then go to MobileLeap on your mobile phone browser and type in www.economist.com. Experience utter bliss as you now get a mobile-ready website generated on the fly.

Doesn't sound like much? Well, you're not following instructions then. Remember, open your mobile phone browser, Economist, curse, MobileLeap, happy sigh.

I've tried this with the BBC website too (another horror) and it works just as well.

Hat tip, ironically enough, to Kate Russell at BBC's Click.

The financial crisis and venture capital

A couple of days ago, I was chatting with an ex-entrepreneur who now acts as a consultant to technology start-ups.

We were talking about the current financial crisis and its implications on venture capital. His opinion was that VCs now need to recalibrate their return assumptions. Whereas VCs would typically have sought returns of many times their investment in the past, now they should look at relatively measly cash multiples of 2-3x.

That could be one possibility.

My perspective is that the ultimate providers of capital, LPs such as pension funds and endowments, would not be willing to accept lower returns from venture capital for the same (or higher) risk. Instead, they would apply correspondingly smaller proportions of their investment capital to this asset class, i.e., it is purely an asset allocation story. This will mean that fewer VCs will raise funds, the supply of funding will dry up and --in theory-- the multi-bagger exits will still occur.

Interestingly, that same evening, I read this on FT Techblog:

The massive over-capitalisation of the VC industry during the dotcom boomhas never been fully unwound... The sickness in question is spreading instead from the limited partners - in particular the big university endowment funds, which over-invested in all classes of private equity in the boom years. As other parts of their portfolios fall in value, they are being forced to cut back on private equity - including VC - to maintain asset allocation ratios. The money flow is being turned off.

Now the trick is to be among those few who continue to manage multi-baggers...

Book review: Freakonomics

Freakonomics by Steven D Levitt (Rating: ***¹/₂)

Yes, I finally read this.

I thought this book was only so-so. Perhaps all the hype surrounding it raised expectations too much but my problem with this was that it was a little dumbed down. Which isn't a bad thing in itself, it just means that the book targets a wide audience. But it wasn't for me. I don't want to have to wade through calculus when I read a book for leisure but it would be nice to be mentally challenged every so often. (Lest you think I'm being an insufferable know-it-all twit, read the book and judge for yourself!)

It's a book full of interesting anecdotes. You could pick it up, flip to any chapter at random and not be lost. Some would say that that's the beauty of it but I like my reading to be "progressive", if that makes sense. To be fair, the preface does say that the book has no overarching theme, no grand conclusions and all that, so it's not like I didn't have fair warning.

My other complaint about the book is that nearly all the examples written about are backward-looking. Meaning, look at some data and derive a relationship retrospectively. Implications for the future are few and far between, aside from the major one that intuitive answers aren't necessarily correct answers.

Overall, a good, accessible tome but without any blinding insights.

Awww, those poor bankers

Ok, so I reused this title. But this time it's another group with a misplaced sense of entitlement.

If you haven't been hiding under a rock for the past one and a half years, you will have an inkling of the fact that large banks, mostly in the Western world, have been having a heck of a time dealing with the credit crunch. Governments have provided bailouts, central banks have provided lifelines, strategic investors have lost lots of money... Yet after all this, some bankers think they continue to be entitled to the kinds of bonuses and perks (Citigroup's new jet?) they received during the good times. What nerve... The ones responsible for this mess should be subject to clawbacks and instead they ask for more.

Fine, that's still what one would expect. Ask, and if ye receive, take it.

What I definitely don't understand is people who are not bankers standing up and saying that bankers should continue to be paid their wildly exorbitant salaries. Lex recently argued that bankers needed to be paid their "massive bonuses" (their words) as long as they were properly structured to align bankers' interests with shareholders'. So are they saying that past bonuses were awarded willy-nilly with nary a structure in sight? They also say that the average bonus last year was "just $112,000". Here's another choice bit:

Troubled banks may struggle to attract talent if they limit compensation to base salaries that have historically been a minor component of overall compensation. Many of the best bankers, often already wealthy enough to retire if they wanted, simply may not bother turning up for work if that is all that is on offer.

More here.

To which I responded with a comment on their website. It's somewhere on this page (sorry, there's no direct link).

The average bonus was "just" $112,000? What world are you living in, Mr Journalist? I find this sort of statement completely offensive--and I work on the buy side not as a milk delivery boy. Pity the poor average banker in your universe who only made $400,000 last year and now finds himself on the street begging for $100 bills to wipe his tears away. For goodness sake, can't you find more worthy causes to champion?

Bonuses are awarded for performance, they are meant to be over and above base salary and they are meant to be (generally) discretionary. If the performance doesn't cut it, the bonus goes out the window. As it should in these times. This doesn't mean that we will have multitudes of poor bankers suddenly unable to feed themselves (unless they can only stomach caviar and champagne everyday). It will only mean fewer cocktail parties on private yachts. All the better.

Besides, if the average bonus is "just" $112,000 --and I don't believe that-- whence all this noise about pay caps not being appropriate? Why will all these "average" wage-earners suddenly bump up against salary caps?

And finally, who knows, once the rules have been reset, perhaps supply and demand will help even things out. If there aren't enough high-flying bankers available when the spigots are turned off, who cares? The ones left behind will by definition not be as greedy as the ones who leave. Bankers have always been a hugely overpaid bunch. Let the job market now adjust to a more reasonable equilibrium in this new reality.

And finally, if you read nothing else on this issue, then read this. Paul Wilmott demolishes the argument that bankers are properly incentivised in this article.