Feeds:
Posts
Comments

Archive for May, 2009

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!

Advertisements

Read Full Post »

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.

Read Full Post »

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.

Read Full Post »

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.

Read Full Post »