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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 …

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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!

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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.

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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.

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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.

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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.

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Here is my latest article in the 20th April issue of Netvalue, The Edge (Malaysia) on what Malaysia needs to do to move up to developed nation status.

In his book ‘Capitalism, socialism and democracy’, Joseph Schumpeter set out the idea that innovation leads to gales of ‘creative destruction’ as it causes old ideas, technologies and equipment to become obsolete. He states that the question is not “how capitalism administers existing structures, … [but] how it creates and destroys them.” He believed that this creative destruction is the essence of continuous progress and improves the standards of living of the society at large.

I believe Malaysia is now at a crossroads, where the old economic order is becoming obsolete and a new economic order is necessary to continue the progress of the last 30 years and to improve the living standards of its citizens. The fact that we are at this crossroads today coupled with a global crisis of confidence and ebbing confidence in the leadership of this country is critical to the future of our new Prime Minister Dato Sri Najib Tun Razak as it is to the future of Malaysia itself.

However, knowledge that we are at such a crossroads affords us the luxury to change direction and that is what Najib has to do. He can be the architect of a new economy, based on innovation and creatively destroying the old economic order, so that the nation can set itself on a new direction of prosperity.

This change is similar to what former Prime Minister Tun Dr. Mahathir did when he came to power. Until the 1970s Malaysia was an agrarian economy dependent for its growth on rubber, cocoa and palm oil as well as tin mining. What he did was turn a small agrarian economy into a high growth industrial economy by adopting friendly export oriented policies and by encouraging the formation of export based manufacturing industries. He fostered this growth through a stable government and inviting foreign direct investments (FDI) in these industries.

However, the world has moved on and export manufacturing that is dependent on abundant low cost labour has moved to countries that are still relatively economically under-developed with large population bases like China, India and Vietnam. Malaysia with its smaller population and higher relative labour costs is slowly losing out with FDI moving to these countries in search of cheap labour.

The world has moved on, but we are still stuck in the 1980s mentality of labour intensive industries. Hence despite all the progress we have made in the last 30 years, we still have factory workers earning less than RM1,000 a month and University graduates still only earning between RM1,500 and RM2,000 a month upon graduation. Amazingly that was what it was in the 1980s and 1990s and it’s the same today. This simply means our citizens have made little economic progress in 30 years. So despite the many gleaming buildings and wonderful highways, to the majority there has been no economic progress, only economic stagnation, despite 30 years of economic growth.

The main cause of this is the policies we continue to adopt especially our dependence on labour intensive, low cost manufacturing and resource based industries. Let us be very clear about this: traditional manufacturing jobs have moved to other countries; our oil and gas and timber resources will be depleted in 10 to 15 years; there will be a glut of crude palm oil in 15 years time when Indonesia will probably produce 3 times our production of palm oil; tourism will be highly competitive especially with the integrated casino resorts in Singapore and tax free pioneer status and similar policies will be offered by just about every country in the region to attract FDI.

In 15 years we will be in no man’s land, competing with all our neighbours for the same FDI and highly choosy investors who will go where the offer is the best. That will mean the lowest cost offer. If we don’t do anything today, then the future for our children is very bleak indeed. I cannot imagine factory workers still earning below RM1,000 a month and graduates less than RM2,000 even after 2020, but that is the most likely outlook. Unless we do some creative destruction of our own economy, before it is destroyed by competition in the future.

So what should we do? Firstly we must not just pay lip service to the change agenda, we must instead make a constructive and conscious decision to turn our economy and our policies around completely. The focus of our future must be on a “brain economy”, where innovation and brain power is the cornerstone of economic policies.

We must gradually stop the hiring of cheap, low cost, under-educated labour that powers the labour intensive industries. Manufacturers must be told that over the next 5 years import of cheap labour will be phased out completely and only manufacturing that uses high technology and information technology will be encouraged. Existing manufacturing plants also have to upgrade their operations to high tech operations or lose their tax incentives. In future only high tech manufacturing FDI will be allowed.

Next we must look seriously at advanced manufacturing and follow the direction of Japan and Germany in using technology intensive plant and equipment for manufacturing and move up the value chain into design and development and phase out original equipment manufacturing (where someone else designs the product and owns the brand but we provide the low cost manufacturing base).

We must also increase the support and effort towards the information and communications technology (ICT) and Biotechnology industries. While the support seems adequate, it is not sufficient if we are to move to the next level of growth. After 12 years the Multimedia Super Corridor is maturing and we have created many ICT companies who are now exporting their products and services globally, we must increase the support given to these companies to grow even further. We have done well but we can and must do more.

The Biotechnology industry is now showing signs of success with more than 100 Bionexus companies (many of which are already profitable) and plenty of biotech and agritech R&D being done in our universities. These need to be commercialised but for it to happen technology and education industry policies need to be liberalised and this can only be led by the Ministry of Higher Education and Ministry of Science, Technology and Innovation. We need to be more progressive if we are to move our universities to the next level of commercialisation success. The R&D is being done, but commercialisation is being held back by poor policies and guidelines.

We also need to create more competition and we need to reward the progressive Universities by giving them more incentives to create new R&D&C (Research, Development and Commercialisation). For a brain economy to succeed we need to have the brains in the first place and here we need to improve the quality of education at all levels from schools to Universities. Just because more students have 20 A’s does not make them smarter, because it is not the number of A’s but the quality of the A’s that matter. Our standards must be improved and we must follow international standards not create our own lower standards just to show more A’s. By doing that we are doing a huge disservice to our children because their future will be impacted by the quality of their education.

The country must change and we must create an economy that is based on science and technology and on creativity and innovation. It is a very difficult proposition and it is precisely because of that that we must do it. If it is simple other nations will also imitate what we do and that creates competition like what we are facing today. But by taking the difficult road we can create high-level competencies and capabilities for our citizens and that will secure our future and create the “brain economy” we need to survive and prosper. Maybe then our factory workers will earn RM5,000 a month and not need to survive by selling goreng pisang and tosai to supplement their income. We owe that much to our children and that’s what the new PM should do.

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