Archive for the ‘Business’ Category

Acting on ideas

I think it’s really important to write ideas everyday. In fact, it’s a new year — if you don’t already have a notebook and pen, get one. I personally rely on Evernote, a notebook (lately, I’m starting to think I might like the Evernote Moleskine notebooks – I’ve started with the Moleskine Evernote Business Notebook for meetings) and a pen. 

When you are set, don’t forget to read James Altucher: FAQ on how to become an Idea Machine. I particularly like the following:

I have an Idea. How do I get money for it?
You don’t. You have to implement it. You have to have other people who like it. You have to get money from customers who like it. You have to build up so that it can support yourself.

For my first business, I started it, got customers, got employees, had an office, and then, 18 months into it, I quit my fulltime job, and went to my startup fulltime.

That’s how business works in the real world.
We live in an entitled world now where people think ideas are enough now to get funding and make billions.

Go old school. Deliver proven value to others, charge money for it, get testimonials about how good your product is, and then you’ve widened the horizon of your decisions. That’s the path to success.

What eventually happens with apps

There has been a lot of talk about apps generally not doing well. There may be truth in the matter.

Let’s take my mother, a classic example of someone who plays Candy Crush (made by King, whom are now public listed in London). She plays this mainly on her iPad, but also on her iPhone.

Life began quite simply by just playing the game. She got up to nearly level 500, and she only made 3 in-app purchases. Countless hours of entertainment, for what amounts to 3×0.99 cents. You don’t get much for $3 these days.

Then suddenly with the help of automatic app updates (and the fact that the Average Revenue Per User (ARPU) needs to increase for earnings), she was required to login with Facebook finally.

She did, and started from scratch!!! Nearly 500 up there, and starting from scratch. You can’t imagine she’s pleased but she enjoys playing the game.

Fast forward to today, and the Facebook app logged her out. Candy Crush became aware & asked for a re-login. Lo and behold, the 70-odd levels she completed were gone and she had to start from scratch.

Her total investment in time? 8 months. Her total unrecoverable investment in in-app purchases? Less than $3. Her frustration levels? Like she wanted to throw the iPad at the wall!

What can we learn from this? Apps provide countless hours of entertainment for very little revenue to the app creator. App updates that break the database, eventually annoy the user. Is the user likely to continue with other games or apps? Possibly. But after a while there is app fatigue.

So it’s not about discovery. Sure the lists help. But being social (ie in-person) aids discovery too.

Being consistent, is key. Who downloads an offline travel guide, that gets updated and needs a resync, when you happen to be offline? I know a few offenders.

Splitting up apps that should be one – Facebook/Messenger, Foursquare/Swarm, etc. Then not providing a consistent interface, removing features or worse crashing when you’ve got to switch to the next app.

App fatigue is caused by putting the company or investor first, and the user last.

And as more contribute to the subpar user experience, the more smartphones will be whittled down to providing their basic functions provided for by Android & iOS with a sparse few extras. Overall, that makes the barrier to success much higher than before.

A bubble or are things different?

Strongbow bubblyI just read this in Bloomberg Businessweek: Silicon Valley Hears Echoes of 1999. Key takeaway:

IPOs were priced at a median of 30 times sales in 2000, compared with 5.2 times last year, the data show. MarketWatch traded at 46 times 1999 sales on its first day, while Rocket Fuel’s valuation was 7.6 times 2013 revenue.

The average age of companies also went up for IPOs – from 6 years to 12 years. That said, the valuation’s have become saner.

For further reading, how do you value a business by Fred Wilson: 

I learned in business school that the multiple of earnings one should pay for a business is roughly the inverse of interest rates. The reason for that is if you buy a business that makes $10mm a year and pay $100mm for it, then you are effectively getting a yield on your investment of 10% (annual earnings/purchase price). This math is terribly simplistic but fine for the purposes of this post. If interest rates are 5% instead of 10%, then you would pay $200mm for the business ($10mm/$200mm = 5%). So the math here is interest rates = annual earnings/purchase price. Again this is very simplistic because it does not deal with the important questions of what interest rate you use, how you deal with earnings that are growing or declining, and a host of other issues. But at the end of the day, this math [annual earnings/purchase price = yield] is fundamental and everything about asset values, capital markets, and valuations stems from it.

I think things are different now. That said, downturns are cyclical. 

Time spent on PR

How WhatsApp’s Arora Sealed Facebook Deal – Digits – WSJ: Time spent on PR is time not spent ‘making your users happy,’ Arora said. ‘The users you get from press and hype are not the best users.’

Bitcoin Exchanges can’t work in Malaysia

News today: Genneva (gold trading company, launched by former Prime Minister Mahathir) Malaysia director charged with accepting deposits without a license.

So if you’re thinking of a Bitcoin exchange in Malaysia, think again. Bank Negara Malaysia obviously doesn’t think much of Bitcoin. How will you accept deposits without a license? 

Singapore on the other hand proves itself to be in the forefront of finance: treat Bitcoin like a product. Read the full IRAS statement. Singapore is about to get its first Bitcoin ATM soon.

For further reading, see the BAFIA 1989, in its entirety. Once again, laws that prevent innovation.

Being attentive

We just won a lot of money!As I always do, I make last minute purchases for Christmas. It’s not because of the lack of planning, more so that I’m getting busier despite the holiday season approaching.

From 10am – 10.06am I called Machines in Gardens. No one would pick up the phone. I called iStore by C-Zone in Publika. Quick answer (picked up the phone within 4 rings), stock was available, so I reserved a few units. Within a span of 1.5 hours, I had my Christmas presents ready.

You win business by picking up the phone. 

At Harrods yesterday, there were three concessions that we spent some time around – Chanel, Gucci, and Louis Vuitton. Sales people at Louis Vuitton always seemed busy and generally left one part of their concession empty. They weren’t busy per se, just not engaging. At Chanel, you could go grab a bag off the shelf yourself. At Gucci, they paid good attention to you, spent time with you and engaged heavily. Guess who won the sales then? 

Pick up your phone. Be attentive to your customers needs. Serve in the service industry. You will be rewarded by being successful in business.


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