Greek Complexity

Too young to fail? Or too experienced not to?

I just read two interesting articles, both on Technology Review, and published independently just a couple of days apart. What's interesting is, one of them writes about youth and even a lack of formal education potentially being keys to entrepreneurial success, while the other makes a strong case for older, experienced entrepreneurs. So two opposing views in the same magazine!

Who is right? You decide. See Too Young to Fail and Innovation without Age Limits.

To be fair, the first article doesn't actually opine that young, smart people not yet tarnished by preconceived notions will definitely succeed as entrepreneurs. It simply reports on a sort of experiment being run by Peter Thiel, billionaire founder of Paypal, who does believe in this idea.

The argument over Internet freedom

...aka piracy, depending on who you talk to, is fast becoming a hot-potato issue.

Even in sedate Singapore. Entrepreneur Bernard Leong makes his case to the Singapore government as to why they should not enact a law similar to SOPA. You'll find his piece here. He says:

The burden of reviewing every blog post, tweet and video submission is impossible to manage for any company. This is similar to the situation in China, where video sites such as Tudou have to hire people to monitor content uploads 24-7 to ensure that no sensitive political content is uploaded.

SGE‘s opposition against SOPA/PIPA legislation is not focused on freedom of speech arguments which have been brought forward by many digital advocates. You can read about these elsewhere. Our concern is that such legislation has profound implications to our economy.

He later says:

There has been strong resistance against both bills not just from many technology entrepreneurs from the start-up space but also from multi-national companies such as Amazon, Google, Microsoft, Twitter and Facebook.

...meaning that the opponents of such legislation are, as one would expect, those who would suffer most from SOPA-like legislation. Now, The Economist said in their usual forthright style a few weeks ago that:

The bill’s supporters want this [how content should be distributed and paid for] to change as slowly as possible, so they have time to adapt. Opponents want to see more rapid changes in business models to speed up overdue innovation: cheaper pricing in poor countries, more use of on-demand digital services, less exclusivity in distribution, and ultimately, less reliance on selling albums and DVDs. Yet self-interest is at work on both sides: many of the bill’s critics are trying to create just these kinds of business.

A related issue is now boiling over in India. Global Internet companies are in effect being held accountable for things that their users said, even though a law had previously been passed specifically to clarify that Internet companies and other intermediaries could not be held liable for their users' misdeeds (as long as certain conditions were met). See Is India Ignoring its own Internet Protections?.

So who's right? I'd rather focus on the freedom-of-speech argument that Bernard eschews. High-minded? Idealistic? Yes and yes. But that doesn't make the argument any less valid. In fact, focusing on dollars and cents cheapens the issue.

Note also, as The Economist implies, that arguing purely on economic grounds is to pick winners and losers. Who is to judge whether Google's and Facebook's claims are more valid than counter-claims by Newscorp and CBS? On what basis can one pick one side over another?

Taking the freedom-of-speech tack will probably not have much effect in Singapore (possibly the reason Bernard avoids this argument to begin with) but I think this is the right argument as a matter of principle. Possibly the only right argument. It certainly doesn't have the conflict of interest of the economic arguments advanced.

Singapore vs Hong Kong as a business jurisdiction

Link of the day: Singapore as a Holding Domicile for Your China Operations

This piece contrasts the use of Singapore as a location to set up holding companies for Asian operations versus using Hong Kong instead. Mostly about tax but also other matters. Not as boring as it sounds. The article doesn't mention it explicitly but Singapore also has bilateral trade and tax arrangements with India, separate from the India-ASEAN tax treaty. China and HK don't.

Dilbert wisdom

On CEO stock options:

And in real life? After having run the company to the ground, the CEO walked out the door and left the clean-up job to whoever stayed behind.

Entrepeneurs: please ignore these tips

Luke Johnson writes a piece in the FT piece titled "Ten pieces of advice that should be ignored". Every entrepreneur and, arguably, everyone else associated with a young business should read this list. Says Johnson, don't listen when someone tells you:

• "Never borrow money." What? Why wouldn't an entrepreneur want to borrow money? Equity is much more expensive than debt. Sometimes, much, much more expensive. (As you can see, I use very specific technical terminology like "much, much more"!) Given that I am in the business of providing equity capital, you might think I am making things hard for myself but I stand by this. Of course, best of all is funding yourself via internal accruals, but that doesn't sound very start-up-ish.
• "Profit is all that matters." As Johnson says, different situations call for different metrics of success. Accounting profits aren't the only thing to strive for. For example, one of my portfolio company CEOs has this slogan in his email signature: "Revenue is Vanity, Profits is Sanity but only Cash is reality".
• "Don’t worry about your competitors." The lay reader might wonder why an entrepreneur might even fall into this trap. Surely every business has rivals, you'd think, (and if it truly doesn't, consider the possibility that it isn't a very attractive business to be in), but you'd be surprised how often some entrepreneurs fall into the trap of complacency and ignoring their competitors. I'm not saying that entrepreneurs should be paralysed by the presence of rivals -- sometimes competition can even be a good thing, for instance if it helps educate prospective customers -- but razor sharp focus on who else is in the market is very important.
• "Don’t work with partners." Johnson doesn't say much about this but I cannot stress this enough. In contrast to the first point, where I talk about how some entrepreneurs unnecessarily dilute their shareholding, the same entrepreneurs sometimes don't like working with partners because it feels like they're "sharing" an opportunity with someone else or giving away control. This kind of thinking is a bit upside-down. 1 + 1 really can be more than 2 sometimes... subject to picking the right partner and forging the right partnership arrangement. I use the term "partners" broadly, whether these are formal business partnerships with another company or getting seasoned execs to join your team.

These are the four out of Johnson's ten tips that I have personal experience with and can assure current and aspiring entrepreneurs that they really can have a big impact on the success or failure of a business.

Yes, we need more messiness!

Creativity and serendipity depend on it.

What am I talking about? An architect called Aaron Betsky zeroes in on the downsides of Singapore's planning obsession. Yes, it all works but

everything was being planned with such efficiency and with such an eye to latest theories of what makes good urban environment that there was no opportunity for chance, ad hoc activities, or the joy of contrasts.

My office is in the Marina Bay Sands area so I know that Betsky is bang-on with his assessment. Sadly and frustratingly, this is a thread that runs through all of Singapore, not just in urban planning but also, to pick just a few areas, education, the arts, the promotion of entrepreneurship and sports.

This terrific short post tells you more: Singapore's URA: Too much planning? Especially watch for the very funny dig at our bureaucrats' reading habits!

Lenskart spam

As regular readers of this blog would recall, I talked about Lenskart.com a few days ago and wondered whether people would buy eyewear online. They must be reading my blog closely because, to convince me that my misgivings are unfounded, they've put me on their spam, ah, mailing list. Ok, I'm joking, of course.

I mean, I'm joking about their trying to convince me. I'm not joking about the email itself. I did get an unsolicited email from them touting their wares. Not just glasses but also watches, wallets and ladies' handbags. The email was sent not to my murli.net email address, which might be sort of understandable if this was a robot crawling the web for mentions of Lenskart, but to my work email address. How did they get this? (I do know the identity of one organisation that has sold my work email address to third parties in the past, but that's a story for another day.)

I wonder if their investors IDG Ventures know that their newest investee buys email addresses in bulk for spam purposes. I also wonder if one of the metrics presented by management to their board is "unique users" or "prospects contacted" or "email list size" or some such, whether people like me are (inappropriately) counted as part of this and whether -- listen closely now -- this metric determined to some extent the valuation that IDG assigned to the company.

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Update: The funny thing is, the email ends with the following:

"Call: +91 8860004379/97 It's almost as amazing as our customer service."

Yes, I've no idea what that means.

Grab a bit of Netflix. Add steroids. Produce Kaggle.

More in the Big Data vein. Just spectacular.

Kaggle is a platform where companies, researchers and governments can host competitions to help solve huge data-related problems. About 50 competitions have been run to date and members take just days to solve problems that have stumped scientists for years.

"To date Kaggle has crunched data on dark matter, predicting which used cars are likely to be bad buys, improve the World Chess Federation's official chess rating system, and predicting the likelihood that an HIV patient's infection will become less severe, given a small dataset and limited clinical information," Kaggle claims.

[Founder Anthony Goldbloom] spoke to many CIOs who all said they wanted to do more predictive modelling but their enthusiasm didn't match actual adoption. Goldbloom concluded that the problem was that the product was too technical and the barriers to entry too high."I just became obsessed," said Golbloom. "It was so much better than trying to predict unemployment next month and getting it wrong."

via From Bondi to the big bucks: the 28-year-old who’s making data science a sport

The title of this post, of course, refers to a contest by Netflix some years ago.

The ideas of competition, wisdom of crowds, and cross-disciplinary analysis themselves are not particularly new but the application of these ideas to big data analytics is new, driven by advances in storage, parallel processing, cloud computing, etc, and by the increasing imperative for organisations to be smarter about what they do with the data they possess.

When NOT to go with a (big-name) VC

Old post by Chris Dixon but, heck, I just saw it. If it's new to me, it's bound to be new to someone else. Quote:

Suppose there is a pre-profitable company that is raising venture financing. Simple, classical economic models would predict that although there might be multiple VCs interested in investing, at the end of the financing process the valuation will rise to the clearing price where the demand for the company’s stock equals the supply (amount being issued).

In practice, the equilibrium states for venture financings are: 1) significantly oversubscribed at too low a valuation, or 2) significantly undersubscribed at too high a valuation. ...

When you invest in early-stage companies you are forced to rely on very little information. Maybe you’ve used the product and spent a dozen hours with management, but that’s often about it. The signals from other investors who have access to information you don’t is an extremely valuable input.

So what should the smart entrepreneur do? They should read The Importance of Investor Signaling in Venture Pricing including the comments that follow the post, separate the wheat from the chaff, and then turn theory into practice.

A different kind of start-up event

I was attending a closed-door, fairly free-wheeling discussion last week here in Singapore hosted by one of our coopetitors when someone brought up the topic of events for VCs and entrepreneurs. Now, if there's one measure of commercial activity in Singapore that's always flashing bright GREEN, it's the number of conferences, seminars, fora and networking events held for tech start-ups. So when this person asked the rest of the group whether, in our opinion, Singapore has a sufficient number of platforms for VCs and entrepreneurs to meet each other, the answer seemed pretty obvious. Even if one doesn't go to all the events, going to a few every year is sufficient to get to know pretty much everyone else in the space. Singapore's VC industry isn't that big after all. It's essentially the same in India as well.

But it struck me that one thing I (and my portfolio companies) continue to find difficult is finding good mid to senior staff to join existing start-ups. I think there's an opportunity for a platform specifically targeted at people who want to move into the tech start-up space but don't want to start one of their own for whatever reason. Yes, this exists to a small extent on online fora but I have yet to see an event specifically created to allow start-up teams to get to know their brethren from larger organisations and vice versa. The opportunity exists across all roles -- sales, finance, technology, HR, operations, you name it. Put a critical mass of qualified people in a room and I can practically guarantee that it won't be seen as yet another start-up networking event.

Who wants to do this?