August 11, 2013
You have to make a business decision, decision A or decision B:
Decision A: definite cost of $150,000 today.
Then there will be no more cost in 6 months time.
Decision B: Do nothing today, but in 6 months time:
==> 0.8% chance that it may cost the company $2 million
==> 99.2% chance it may ended up cost you nothing
Which decision will you take?
Scenario 1 – You are the 100% (or majority) owner of the business
If you are the owner of the business. Obviously you don’t want to pay that $150,000 if in 6 months time 99.2% of the chance it may cost you nothing. 0.8% of 2 million is $16,000, it’s not worth to pay $150,000 for it. Therefore as an owner, you should be more likely to take decision A.
Scenario 2 – You are the manager of the business, you do not own the business
If you are just the “manager” of a listed company to make this decision, what you care is your job. So everything is about doing things safely. If you make decision A, and 6 months later the business happen to fall into that 0.8% chance and cost $2 million, then your job will be at risk. So the safer option for you is to take decision A, pay $150,000 today.
You often wonder: “why does that organisation make that decision?”
You need to understand that it really depends on the own interest of the person who makes the decision.
December 5, 2012
In the 90s, I was amazed by what internet can do, so in 1999 I started my internet business.
What if we take iPhone 5 or Galaxy III to the year 1999?
- It’s faster than any personal computer in 1999,
- It has much better screen than any monitor you can buy in 1999,
- It’s camera is better than any digital camera you can buy in 1999,
- It can determine your location, no computer can do that in 1999,
- It only weights 112g, lighter than a floppy disk drive in 1999,
- It’s internet connection speed is faster than anything you see in 1999,
Now, we have hundreds of millions of people carrying these devices around. What kind of potential is this? It has far more potential than anything we have seen in history.
So now, it’s all about mobile + mobile + mobile.
May 30, 2012
Do you like to your own boss? think again.
You need to be able to cope with those pressures.
1) Pressure for payroll
When you wake up, you need to be responsible for the payroll for say 50, 100 staff, it’s really some kind of pressure on you. Yes, revenue is currently flowing in, but any mistake you do can reduce the revenue, and you are still be responsible for those costs. Only when you become a boss, you will know how it feels like.
2) Pressure for growth
Even if you think, I am happy with my current business situation, I don’t need any growth. The problem is, the world is moving fast, if you don’t grow, you will shrink, your competitor will take over you, therefore you are forced to have constant pressure to grow. The world is changing so fast, there is no such thing a business can use the same model and last forever, if you are making profit, someone else are fighting for that profit too.
3) Pressure for losing everything,
Who knows what will happen tomorrow, the more you own, the more fear you have on losing them.
4) Pressure for decision
For example when you make a decision, it will benefit someone, but disadvantage someone else, you got to make all kinds of tough decisions each day. There is no such decision that can make everyone happy, and ultimately you are always responsible for the consequences of making those decisions.
If you want to be a boss, make sure you can cope with all those pressures.
This week’s top technology news is the listing on Facebook. People are asking the question:
“Is Facebook worth 100 billion dollars?”
“Will Facebook grow more?”
My own opinion is that Facebook should be valued at 2 or 3 times less than current value.
Facebook’s main revenue is from it’s advertising. It is interruption advertising so it has its limit. I don’t think it can grow much further, probably 2~3 times than the current size the most. This kind of advertising has its limitations, it certainly doesn’t worth 100 billion, not even half of that.
2) To compete with Google because Facebook can build a Social Search
I really don’t know what social search can achieve? Searching for things my friend buy? What’s the point? as my friend would show off to me on things what they buy, I don’t need Facebook to tell me that.
Searching for other people? I really don’t think it can have much value than Google currently can provide. Google has got a far better search capability because it has got real commercial data, I don’t think Facebook’s social data can compete with Google in terms of generating revenue.
Again, this “currency gonna be big” doesn’t make sense. Majority of people use Facebook to connect with their friends, it’s like a communication platform for some people. Most people don’t have a need to use Facebook as currency.
Currently Facebook currency takes 30% commission, that’s simply too high, only those high margin online games can participate, or digital goods can be traded using the Facebook currency, it’s a large volume, that might worth a few billion dollars, but certainly not worth 100 billion.
No matter what, Facebook is still big and massive, but based on their current business model and products, it should be valued at 2 to 3 times less than it’s current value, or even less.
February 5, 2010
Global warming might be a big issue, if the trend continues, then in 100 years time, the earth could become a difficult place for human to live on.
Now, let’s ignore all these, let’s assume there is no “end of the world” thing, let’s assume the world will just go on. Then, in 1,000 years time, what will happen to us?
Of course, in 1000 years time, almost all the living thing on earth today will be dead, but I think whatever we do here will become digital antique:
Let’s ask a question:
Is a person’s privacy in 1000 years still have privacy concern? not really.
I think in 1000 years time, Google or Facebook will still exist, but maybe a different name. All the data can be analysed.
Whatever we do on Internet, on Google or on Facebook today, everything will be recorded, and it won’t be deleted. No matter what, the data will be stored in some format, then it becomes digital antique. Future people can get an understanding on how humans live today.
- Your email on Gmail will be recorded
- Anything on Google Doc will be recorded
- Whatever photo you post on facebook will be recorded
Of course, it won’t be real humans who will try to analyse this massive amount of data, it will be the “Super Computers” which will go and read, and analyse everything on the data. Because by that time, the super computer will be extremely powerful, it can analyse everything, and have a report on whatever people need. Such as any particular person’s relationship, how he runs business etc…
So….. who will try to access your data? most likely someone related to you. They want to check their ancestor.
You may not live forever, but in theory, all your digital data on the internet should be there for a long long time. By that time, people can know very well on what their ancestors did 1,000 years ago.
With the help of super computer analysing all your data:
- Computer will analyse your record, and it will be able to know what kind of person you are, what kind of charactors you are, perhaps it will know you deeper than your friends today.
- The computer can even re-struct another you easily, a 3D image about you, based on the photos you have stored.
You cannot live forever, but perhaps your digital data can.
October 13, 2009
Innovation on the internet is very harsh. Let’s take the following example:
- Company A is a successful web site, charges services of $100 per unit, with 100,000 unit sold last year, company A is earning $100 x 100,000 = $10M a year.
- A new company B launches a similar service, but company B does not charge anything to its customers. Instead, company B generate income from display advertising on the web site, for serving 100,000 unit of services, company B is able to earn $1M a year from advertising.
Internet innovations, or information innovations can easily erode existing revenue, erode existing business models.
Company B has got an idea for a new internet business, it’s providing a free service to internet users, that idea can generate $1 million. However, when company B generate that $1 million worth of business, it means some other company out there will be losing many times more money of what company B earn. Will company B care about that? No it won’t.
This is what happened to the internet world, at any moment, there will be a new business model, that can be destructive, that can kill existing business, just like that.
Company A might be earning $10M today, but when Company B enters, after 12 months, company B grows to earning $0.5M, but that can damage company A and force the company A to earn less, reduced to $5M.
=> Company A loses $5M
=> Company B gains $0.5M
When company B gains $0.5M, they have a net gain of $0.5M, they don’t care if any other company result a net loss. They really do not care.
Can company A do anything about it?
There is nothing Company A can do, company A will just see their customer numbers reduced gradually. This is the sad part of Internet innovation, you never know when you are going to be replaced by someone else. Your profit today does not mean the same profit will be there tomorrow.
When more and more people are using internet, this kind of scary scenario will be happening more often. Be prepared, be the one who are innovative, keep innovating, don’t be “innovated and terminated“.
Read a news about Sony has been running with big loss, it’s operating loss of more than US$2 billion. That’s a HUGE number. I remember ever since I was young, Sony was everywhere, you buy walkman from Sony, you buy TV from Sony….
I searched Sony Walkman, and found my memories. I have found the following 2 walkman which I owned:
Sony was dominating the world….. However, things has changed for Sony since then:
Sony Walkman has been replaced by Apple iPod
The walkman leader was unable to identify the market trend — mp3. They allow iPod to grow, and when Sony found out, it’s a bit too late, allow iPod to dominate.
In the 90′s, Sony Monitors was the top choice for computer screen. Not sure when, suddenly Sony computer monitors was no longer available.
In Australia, the leader of LCD TV isn’t Sony TV, it’s Samsung.
Sony Playstation 2 was just… invincible. It was almost the only choice for game console few years ago. But here comes Microsoft with XBox. Then Nintendo’s Wii surprise. Playstation 3 just wasn’t able to dominate the game console market anymore.
Sony, the consumer electronic super giant, when are they going to release the next killer app?
September 4, 2009
How can I get better salary?
How can I get paid better?
Your salary is nothing to do with how hard you work. Your salary is to do with your ability to solve problems.
The world economy is running by people solving problems for each other. The bigger problems you can solve for others, the bigger reward you will get.
You shouldn’t just be focusing on “I want to work hard”, what you should be focusing on is “how can I improve my abililty to solve problems better?”
If you can prove to your boss that you have ability to solve problems, then you will worth more, then you will get paid higher. It’s not about showing “how hard you work”, it’s about showing “how good you can solve problems”.
- You shouldn’t just solve problems for now, while you are solving problems for today, you need to have the abillity to prevent future problems.
- You shouldn’t be thinking: I just do what I am told to do, it’s a job. No! No! No! your thinking should be about: There is a problem, how can I solve the problem effectively and efficiently. If you always think this way, then your boss will value you more.
- If anyone else can solve the same problem you are solving, then you are not special, you are replacable. Do not expect you are going to have a very high reward.
- You got to develop some problem solving skill that you boss can trust you, you need to have good commercial sense plus attention to detail.
Change your thinking today, want to get paid better? It’s all about solving problems.
August 30, 2009
Now is the ski season!
Few years ago, me and my friends went to snowy mountains, be aware, some accident can happen:
This was my scenario, I go first, and there was a hump in front of me. I was pretty skinny, so I can easily ski over the hump easily. Just like below:
My friend saw me ski over the hump easily, then he thinks there is absolutely no danger. Therefore he accelerate at full speed just like me. Unfortunately he forgot he was 70% heavier than me, and that’s what happened:
His ski hit into the hump, and he then “fly” over the hump. Due to the high speed, his “flying” distance was more than 5 meters, then you saw a very hard “landing”.
I saw the whole event. That was a pretty bad hit….
So… be aware, accidents do happen.
July 8, 2009
When I started my dot com business, it was 1999. This year is 2009. That’s 10 years! Here is my summary of internet advertising I observed for the past 10 years:
Stage 1 – $50 CPM – (1999~2000)
Back in 1999, not sure which person started to charge $50 CPM (means $50 per 1000 banner impressions, or 5 cents per banner impression). That $50 CPM rate is pretty high, and is able to make many Internet businesses very profitable. That’s how internet bubble was born, all because of this $50 CPM. If you were a dot com company, you can claim: “Oh, my monthly web site traffic is 20 million impressions, so my income = 20,000,000 x $50 / 1000 = $1M”.
Look, it was $1M advertising income for 20 million impressons back in 1999. In 2009, for you to get 20 million impressions in Facebook, it might only cost you less than $4000. That’s 250 times cheaper.
Stage 2 – Collapse of $50 CPM (2000~2004)
Soon advertisers start to find $50 CPM doesn’t work (too expensive), less and less advertisers are willing to pay at such rate, some even disappointed with internet advertising, thinking internet advertising is a joke. CPM rate starts to drop. At the same time, a lot of dot com companies who over-estimate their internet advertising revenue were unable to keep their business alive, they collapsed. That’s the dot com bubble.
Stage 3 – CPC (2004~2007)
Within 2~3 years, CPM rate drops dramatically, a new revenue model CPC (when web users response to the ad with a click) starts to become popular. Overture started those, and Google are the one successfully implement it.
Stage 4 – AdNetworks (2007~2009)
It is extremly easy to start a new web site, threfore there are many, many web sites out there. The concept of “AdNetworks” becomes popular. AdNetork act as a middle man matching advertisers and web sites. Advertisers don’t have to deal with hundreds of different web sites, and web site don’t have to deal with hundreds of advertisers.
Right now, advertising supply is more than demand. Advertisers can in fact decide how much they want to pay.
For more desperate sites: Advertiser can get super low rate from them, but of course, volume is limited.
For less desperate sites: Advertisers have to pay a little bit higher, but still low compare to few years ago.
What does this mean for any new Dot Com entrepreneur?
This is a pretty bad news for any one who wants to start a new web site today. It is extremely difficult to build a profitable web site if it rely only on advertising income, because advertising income is more than 20 times less than few years ago.
Your web site got to be extremely successful (large volume) to be able to attract massive ad revenue and be profitable.
or your web site got to be extremely low cost to operate, to be profitable.
If you want to start a new internet business, think again, you need to think outside “advertising”.