Colin Charles Agenda

I read with great zeal the article about Y Combinator in the NYT titled: Silicon Valley’s Start-Up Machine. I think there are a few important takeaways, especially with people trying to build this kind of thing elsewhere.

1. People take the $100,000 at a 7% stake because of the whole experience. Advice from seasoned entrepreneurs (like pitch improvements, etc.). The importance of the network they bring (which is hugely underestimated by many clones). Dumb money remains dumb.
2. “The general public doesn’t understand start-ups at all,” Buchheit said. “They’re mystified how a company with no revenue can be worth a billion dollars. It’s because of this power law: If a company has a 1 percent chance of being a hundred-billion-dollar company, then it’s worth about a billion dollars. That kind of thing doesn’t happen in your normal life experience. If I get a cup of tea, it’s a cup of tea – there isn’t a chance that it’s actually made out of solid gold. But that’s how this works.” – direct quote from Paul Buchheit
3. “One of the reasons,” he said, “is because there’s nothing else to invest in. If you have money, there’s nothing to put it in. Bonds return nothing. And the stock market – what public company do you feel reasonably assured is going to go up at historical norms of 8 percent a year? It could all just fall apart. . . .” If, on the other hand, you discover the next Google, you can increase your investment by “a thousand X.”

Nothing else to invest in. Interest rates in the USA are low. In Malaysia (or Singapore), you have property as an investment that should return more than 8% per annum. Refer to my old post about the startup ecosystem in Malaysia.

Its nice to see lots of funds and accelerators pop up, but without the experience, the lack of vision, and other investment vehicles that return sufficiently, I’m not sure how even the angel incentives help.

I’m not a fan of Louis Vuitton. I just don’t like the monogram, mainly because it is so heavily counterfeited that you can’t spot a real from a fake. Some key takeaways from LVMH unit sales growth disappoints:

• “It depends on aspirational demand and new consumers.” This is true for all luxury products. Austerity measures, economic downturns, etc. will hit you where it hurts.

• “The risk of ubiquity is that . . . the consumer, seeing the same products everywhere, all the time, starts to perceive a brand as being too common,” said analysts at HSBC in a note published in January.

So if you’re a luxury brand, exclusivity is important too. A fine balance for growth vs. exclusivity is key it seems.

Seth Godin is spot on in Where are your assets? Please go read it.

Do work and get paid once. Build an asset and get paid for as long as it lasts.

Key takeaways: real estate pays regularly, stocks are the promise of a later payoff (maybe a little more regularly with dividends). Build your brand by overdelivering to earn trust. Ensure you’re always building value (people miss you when you’re gone). Gain expertise – don’t do the same thing over & over again. These apply to companies as well.

The picture shows a boxed set of Red Hat Linux 7 & 8. Shortly thereafter they became RHEL & Fedora. Red Hat built assets and look where they are now – listed on the stock exchange and arguably one of the largest companies in opensource. Cygnus started with no more than $6,000 in capital, had a great exit to Red Hat and formed much of the basic underlying toolchain.

A salesman would say, “always be closing”. I think the mantra should be: always be building assets.

In addition to what I wrote last week, Social media gaffes from restaurants & how to make it worse, there’s a few more links/data points to look at:

• The mother of Isadora Chai writes back in TMI, From mother to daughter. A recommended read.
• BFM has an interesting podcast on this: Night on Earth: Vox Populi. Its broken up in 2 segments so listen for the whole hour. Apparently they spoke to Isadora Chai before she graduated from chef to writer: “I’m not sorry to say this, but most bloggers, this is just a glorified hobby with a huge camera and too much time on Facebook.” Seemed like perfect timing. It’s a damn good listen though because she touches on how bloggers lack ethics, and so on.
• BFM had another interesting podcast: Social Media Suicide. Highly recommended and this segment is a lot shorter and has some good call-in opinions as well. Guest is Shankar Santhiram, who has many a training program, including one on customer service & handling difficult customers.

Some new retail terms that don’t really mean much in the Malaysian market: concept store, pop-up shop.

Retail usually requires a rental of 3+3 (sometimes 2+2). Those are years. If you’re going into a concept, be prepared to spend. Concept stores are no different from a regular retail store in a department shop in Malaysia. Its just a nicer/different word to use.

Pop-up shops in a retail location? They are usually 3-month rental terms (sometimes 2 months first, followed by 4 month cycles). If its a shop, you’ve got to furnish it like your concept store. If it’s a cart, you pack up & setup daily. Carts aren’t cheap (of course cheaper than a retail store; but once you add in cost per square footage, you’re really only saving on furnishings). 

Remember a 10am-10pm opening schedule. Even during public holidays. With rules that usually prevent you from eating at your cart/pop-up store, with the ideal being you have 2-shifts of work daily.

Overall, there is no such thing as a concept store or pop-up shop in Malaysia. You just have the burden that is retail. Plain & simple.

The New York Times paywall has become less porous. The idea of reading free content is going away and I think this is great for content producers.

I didn’t start paying for the New York Times till sometime last year, and I didn’t start paying for the Financial Times till sometime this year and the reason is simple: their paywalls were rather porous. 20 articles a month with free headlines, the ability to click from social media, etc. 

I love the two publications above and wanted to read it on the go. This is where the subscriptions started making more sense. Believe it or not, I like the physical paper better and do get it at most hotels that I stay at, but for those periods that I don’t, I crave for it. Hence the subscriptions to both.

Monthly/yearly payment options are being tried out by Andrew Sullivan. 

This Week in Startups has the concept of a producer to keep the show alive. This idea isn’t new though – it was probably conceived by Adam Curry on the No Agenda Show. 

Let’s not forget all sites that carry PayPal tip jar’s.

Why do I think its great for NYTimes/FT/etc. to start charging? Because its clear good quality content cannot be provided for and be created for free.

Once Netizens begin to start paying for content from these major players, it will help them understand that they have to pay for content for smaller/niche players. Call this conditioning. It can only mean that more people will enjoy paying for Byliner or Hacker Monthly or The Magazine.

Of course there’s no perfect login solution today. When I find a link from Twitter on my mobile that goes to Malaysiakini (which I also happily pay for), I see a paywall. I know I can head to The Malaysian Insider to find the same news without login details. I expect authentication technology will improve in the near future.

Overall, this is an exciting space to be in these days. Publishing is changing right in front of our eyes with a long-term view on being sustainable.