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Note: This article was published in ‘The Edge Malaysia’, Malaysia’s leading business weekly on 20th July 2009 in my column entitled “Money & Entrepreneurship”.

Malcolm Gladwell tells a great story. His book, “Outliers” must be one of the best business books of 2008. The basic premise of his book is that people are successful not because of some great talent that they have or because they have very high IQs but because of the opportunities that they had, of being in the right place at the right time.

Take Bill Gates for example. How did he create Microsoft and end up being the richest man in the world? He’s brilliant, yes but so are thousands maybe tens of thousands of people in the USA, but why him? According to Gladwell, Gates was lucky enough to be born in 1955 which meant he was in his teens just when the computer revolution was taking shape. His parents were wealthy and because he was a bright child who got bored in public school his parents put him in an elite private school, Lakeside. It just so happens that in 1968, just when he joined Lakeside, the school bought a sophisticated computer terminal, the ASR-33 Teletype with a direct link to a mainframe in downtown Seattle. As owning an ASR and buying time on a mainframe was very expensive in those days, Gates was fortunate indeed to be at Lakeside. Hence he began programming at the ripe old age of 13, when most other teenagers were more concerned with pimples and hairspray.

Then, because Lakeside had a computer club he was given the opportunity of testing software developed by Computer Center Corporation a spinout of the University of Washington. He went on to do more computer work at the University, which had one of the more sophisticated computers in the US at that time. All of these honed his computer and programming skills which came in pretty handy in starting Microsoft.

His other great opportunity was his introduction to IBM. As Chairperson of the United Way Charity his mother Mary Gates met John Akers the CEO of IBM who mentioned that IBM needed someone to write the software for an operating system. She introduced her son Bill to Akers and Gates was given the job of writing the operating system for IBM, which was the beginning of the Windows operating system.

The final great opportunity that Gates had was that IBM was not insightful enough to keep the rights to the software that Gates developed for them. The thinking at that time was that hardware was more important than software and software had little value. IBM gave up the software to Gates and that was the final piece of the puzzle for Bill Gates.

Had Gates been born at a different time or went to a different school or if his private school did not have the ASR or if his mother had not met Akers or if IBM had decided to keep the IP rights to the software, there would be no Bill Gates the richest man in the world. Gladwell does not say this is luck, but the creation of the right opportunities is whats important.

That brings me to Malaysia and the Outlier principle. Perhaps we are not as successful in technology not because we don’t have the right skills or policies but perhaps we did not have the right opportunities and our timing was less than perfect.

Had Dr. Mahathir created the Multimedia Super Corridor in say 1986 instead of 1996, then perhaps Malaysia would be a great success today. The year 1996 was far too late to enable the creation of a technology industry, as it was at least two decades behind the US. The best of times for the technology industry when the giants of the industry like Microsoft, Dell, Amazon, Yahoo and many others were created was in the 1980s and early 1990s. The timing for the MSC was also bad because immediately after its launch the Asian Financial Crisis hit the region in 1997. It took 2 years for the region to recover and then disaster struck again with the “Dotcom Bust” in 2000. Then in 2001 we had the 9-11 terrorist attacks and again the global economy was hit. By the time Malaysia recovered from all these problems the opportunity to make it big in technology was lost.

Companies were also affected by all these economic turmoil. Many MSC companies were started in 1996 to 2000 and there was a tremendous buzz about the community, despite the 1997 Financial Crisis. However, the Dotcom Bust dealt a severe blow to fund raising for technology companies and many of the foreign Venture Capital firms that were investing in this region returned home. This curtailed funding and stopped the formation of larger technology companies. Again missed opportunities. Had we started in the late 1980s instead of 1990s we would have been able to ride the technology boom years of the 1990s and I am sure there would be many successful technology companies today.

Can the same be said for the Biotechnology and Green technology industries? Are we late in the game or are the best opportunities happening currently thus giving us a chance to make it big in these industries? If one explores the Biotech industry timeline (http://www.bio.org/speeches/pubs/er/timeline.asp) the Human Genome Project (HGP) was officially launched in 1990 while the Plant Genome project was started in 1989. The HGP was probably the start of the greatest race in Biotech history and the next 20 years brought forth so many discoveries in human healthcare, cloning technology, DNA sequencing and agro-technology. The Human Genome was completely mapped in 2002, 12 years after its launch and ahead of time. If you go to the link given above, you will see that there were probably 10 times more discoveries in the 1990s and 2000s than in all the decades prior to the launch of the HGP.

Malaysia, however, is just starting out on the road towards building a Biotech industry. While, opportunities still abound the lack of qualified and properly trained personnel and lack of quality Biotech education in our universities means by the time we are ready, it will be too late again for us. Yes, there will be some successes and I believe we should still build up this industry but the best years of the Biotech industry may be behind us by the time we are ready. For this industry finding the right niches would be the best thing for our country and that might be in Neutraceuticals or agro-technology.

Green technology is still in its infancy and probably holds out some hope for us, but the new Ministry of Energy, Green Technology and Water has to come up with policies and incentives soon because in the last 100 days since its formation we have still heard nothing in terms of Green technology. We are generally not known for our speed in policy formulation or implementation so unless something is done very soon, it will be too late again for us.

I don’t mean to disillusion everybody, but I believe Gladwell has some very important points in his book. Success does not come merely from talent or brains it comes because the talent and brains are in the right place at the right time or because we create the opportunities to be in the right place at the right time. Hence, our policy makers need to be more prescient, we need to look ahead into the future and look for the opportunities that will present itself over the next 10 to 20 years and then create openings for our Entrepreneurs to take advantage of these opportunities.

We cannot merely be followers of technology; we need to be creators of opportunities. Only then can Malaysia make the great leap forward to become a developed nation.

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Its been a while since my last Blog post and the truth is I haven’t been inspired enough to write another post. It was easy enough to start but to keep your blog alive & kicking is something else.

Then I came across these two stories in the New York Times and, well its a Sunday and I really don’t want to be another statistic in the graveyard of blogs, so …

According to the NYT article entitled ‘Blogs falling in an empty forest” 95% of the 133 million blogs (wow thats a huge number of blogs & thats in 2008) are essentially dead or abandoned. These are blogs that did not post anything in 120 days or more.

Reading the article I get the sense that most people just tire of posting especially when they don’t have many readers. Some people also have great expectations of getting a gazillion readers and making money off advertisements. However, only the most popular blogs ever get enough advertising dollars to actually make blogging monetarily rewarding like Techcrunch or Gizmodo. Many rely on special interest posting but according to the second article on NYT, Get the Tech Scuttlebutt!, rumors seems to be the big thing in attracting readership. Thats human nature I guess.

So the lessons for creating a great blog and avoiding the Blog Graveyard are:

1) Find a niche in which there is a large group of interested readers (technology, politics, sports, cars),

2) Write interesting articles that are unique and differentiated from your competitors

3) Keep your blog updated; and most importantly;

4) Make sure you are very well networked within the industry so that you can find the best rumors & make sure occasionally some of those rumors come true. (Note: If every one of the rumors are just that, rumors, then you will be denounced as nothing more than lying to get readers & into the graveyard you’ll go).

So if you’ll excuse me, I just heard a rumor & have to check it out for you …

This week marks the return of the technology IPO to Nasdaq after a long hiatus. After a long time we have two venture capital backed companies being listed on successive days – Open Table Inc and Solarwinds Inc, both on Nasdaq.

Open Table operates a restaurant reservation system and has about 10,000 restaurant users while Solarwinds offers network management software. The Open Table IPO was priced almost 40% higher than expected because of unexpected demand. It is a small IPO but its backed by blue chip VC firm Benchmark Capital Partners. Incidentally the existing shareholders sold about 48% of their shares obviously capitalizing on strong demand and high prices.

Incidentally, Open Table lost US$ 1 million last year, made a small profit in its last reported quarter and its patent filing is being challenged.

So we have a small company, offering a simple business proposition (i.e. offering restaurant reservations online), thats losing money, has a legal suit which it apparently has a high chance of losing yet has high demand for its shares and is pricing it above fundamentals! Did I leave anything out? Oh yes, shareholders are selling out a big chunk for a sizeable profit, probably enough to buy that Ferrari they oh, so desire.

Does this mean that “irrational exuberance” is returning to the markets after a 2 year hiatus?

Well Rosetta Stone Inc which IPOed in April jumped 40% on listing.

While I am all for strong IPO markets, such exuberance when the economy is barely recovering is probably a precursor for another rise and big fall somewhere in the near future. Do investors never learn? Sigh!

On 7th May 2009, Multimedia Development Corporation (MDeC) and Technopreneurs Association of Malaysia (TeAM) organised a very interesting Forum with 5 leading panelists on the topic “Bust2Boom: Are you ready for the recovery”. The premise of the Forum was that the recession is coming to an end and that companies now have to prepare for the recovery that always follows a recession. In economic terms, there is always a cycle of boom-bust-boom and its only a matter of timing when a boom will follow a bust.

We had an eminent set of panelists for the session comprising leading Technopreneurs, the CEO of the largest technology project financing company in Malaysia (Debt Ventures) and the VP of industry development at MDeC and I had the pleasure of moderating the session:

Panelists:

Mr.Chris Chan, CEO, The Media Shoppe Bhd (TMS)

Mr. Michael Lai, CEO, Packet One Networks (M) Sdn Bhd

Mr. Low Huoi Seong, CEO, Vision New Media Sdn Bhd

Mr. Zubir Ansori Yahaya, CEO, Malaysia Debt Ventures Bhd

Mr. Saifol Bahri Shamlan, VP, MDeC

Moderator:

Dr. V.Sivapalan

See below for the slides that I presented at the session to explain the premise of the Forum.

The Panelists concluded that we will definitely see a recovery in 2010 if not by end 2009, so companies should start preparing for the recovery. The Panel also gave several concrete recommendations for companies:

1) Get yourself benchmarked. A slowdown is a good time to get yourself benchmarked and to prove to customers that you have high standards in place. For example software companies can get themselves benchmarked to CMMI standards.
2) Do more R&D. When business is good, you will be busy serving clients but a slowdown is a good time to analyze your business and improve what you have to offer by spending the time on R&D.
3) Take advantage of the many grants on offer, not just R&D grants but also marketing grants. They can help you build up the business for the coming recovery
4) Build more partnerships, locally, regionally and globally. When times are slow everyone will be more willing to look at new partnerships so this is a good time to do this.

5) Build credibility and a good track record, both for the business and personally.
6) Spend time exploring the needs of your customers and fulfilling those needs.
7) Broadband and convergence is a powerful medium that will disrupt the way business is done globally. It is no longer only about the Internet but convergence will happen with other devices and the most powerful of these will be mobile. Study how this will affect your business and your customers and use it to build new disruptive businesses.
I totally agree with these panelists. So start preparing for the coming recovery and then the boom that will certainly follow in 2010 – 2012.

Following up on my article on how to teach Entrepreneurship, this New York Times op-ed article by David Brooks “Genius: The Modern View” is relevant. An Entrepreneur is like a genius. They both have talent and great potential but talent alone does not make a Genius great, nor does talent or Entrepreneurial traits make for a successful Entrepreneur. Like all great people even talented individuals have to practice, practice, practice and learn and improve on their skills before all that talent can flourish into something special. As Brooks says in his article, “The key factor separating geniuses from the merely accomplished is not a divine spark. It’s not I.Q., a generally bad predictor of success, even in realms like chess. Instead, it’s deliberate practice. Top performers spend more hours (many more hours) rigorously practicing their craft. Mozart played a lot of piano at a young age, Einstein read every book on physics he could get his hands on and Tiger Woods spent many hours every day at the driving range and golf course even after he had won all the majors, still fine tuning his game. Practice never ends and learning is a lifelong profession. So its the same for Entrepreneurs. You may have the talent and the traits of an Entrepreneur, but you still need to learn the skills of Entrepreneurship and management and then execute, execute, execute. And the learning never stops. Even today after 25 years as an Entrepreneur I am still learning new things.

My friend Dinesh asked me this question today: ” I’m curious, how does someone teach Entrepreneurship? Its those traits I am talking about, the ones which can’t be taught and have to be cultivated. The culture to take a risk, plug at it even if the going’s rough, to be able to think on your feet and out of the box to compete when you’re the smaller fish.”

Many Entrepreneurs generally believe that you cannot teach someone to be an Entrepreneur. That is true to a certain extent, but Entrepreneurial education is not about making an Entrepreneur out of someone who either does not have the interest to be an Entrepreneur or does not have the traits of an Entrepreneur.

To be a successful Entrepreneur, what do you really need? For sure you need to have traits like passion, desire, drive, risk taking culture, thinking out of the box etc. But is this enough? Will having these traits alone make you a successful Entrepreneur? Sadly I think not because I have see so many Entrepreneurs who have most if not all of these traits, yet 80% fail to create a successful entrepreneurial venture.

My own personal experience as an Entrepreneur of 25 years is proof. I had many failures, not because I lacked the necessary traits but because I lacked the skills.  If I had known then what I know now, especially the skills necessary to create a successful venture I would have been a more successful Entrepreneur at a much earlier age and would not have failed so often.

Can you even “teach” someone these traits? I have my doubts. One cannot teach someone to be passionate or driven or to take abnormal risks. It may also be difficult to teach someone the ability to “think on your feet” or “out of the box” but this is possible, as there are courses on creative thinking and innovation that can help with this.

So, traits are a necessary but not sufficient condition to create successful Entrepreneurs.

Today, there are literally hundreds of thousands of Entrepreneurs around the world who have these traits and have taken the plunge into starting an entrepreneurial venture. Yet the vast majority will fail. Why? Its definitely not because of a lack of passion or drive or the risk taking culture. No, they fail because even a startup, an entrepreneurial venture, is ultimately a business and like any business there are management skills that are necessary to make it a success.

But the skills necessary for an entrepreneurial venture are different from a mature company. Its those skills that we teach in Entrepreneurship education. For example, strategy – how do you create a competitive advantage, how do you ‘position’ your business within the competitive space (this is a different form of competitive strategy compared to what you would do in a mature company).

What is a good Value Proposition for Customers (you’ll be surprised at how few Entrepreneurs even understand what a Value Proposition is and how to effectively get that message across to customers). How do you market your business, what marketing strategies do you use & when.

Entrepreneurial education or training cannot make you an Entrepreneur, but if you have Entrepreneurial traits & want to create a successful business you don’t have to learn by trial & error, there are skills that can be taught to make you a better Entrepreneur and help you minimize the risks of your venture.

You still need to have the passion, desire, hunger and risk taking nature of an Entrepreneur, we cannot teach you that. But if you have these traits and want to embark on an Entrepreneurial venture we can help you better manage that journey and this has been proven numerous times even through my own teaching of Entrepreneurial programs and my coaching of Entrepreneurs.

Yes we can teach Entrepreneurship and we can help create better Entrepreneurs.

The Week-in-Tech (WIT) is a weekly Video show helmed by Karamjit Singh the Editor of Netvalue, The Edge and ably supported by Netvalue writer Aishah Mustapha. This week they review my article “Creative Destruction Crossroads” in their show. Watch it here.