If you are building a consumer facing experience (i.e. game or app or site), you are implicitly assuming that your users will shift their minutes away from some previous activity and instead allocate those minutes to you. Your competition is not just the other sites which offer your value proposition. Your competition is Facebook, the TV, their girlfriend or boyfriend, the news, YouTube videos, etc. You are competing for minutes.

If you are building a B2B company, you usually need to compete for pitch minutes. Decision makers (and non-decision makers) at various levels of the enterprise get pitched to all the time. New suppliers. New software. New coffee machines. New this. New that. These inbound pitches come by way of different channels. Some pitches come in by way of cold calls or e-mails, while others come in via warm introductions, etc. You are competing across all of the channels for minutes.

“From the outside looking in, you never see opportunities. But jump into the ring and get into the fight. That’s when you find opportunities.”

Notice how he didn’t say “Find opportunities then jump into the ring.” In order to identify and understand the real possibilities/risks/challenges/rewards of any opportunity, you need information and actionable insights. Typically, this is not information you can find in a research report, outlined in a 10-K or 10-Q, discussed in a news article, or highlighted at an industry conference. Although you may find some of the information you are looking for there, you will also often find information which is misleading, inaccurate, false, lacking context, lacking sufficient detail, and or incomplete — useless for identifying real opportunities and executing against them.

Opportunities and real insights/information only come to those who put their money and or time on the line. This means constantly engaging in actions like pitching to potential clients, getting pricing from suppliers, making painful mistakes, shipping out products, losing money on some deals or projects, making money on some deals or projects, etc. The longer you stay in the market, the more information you will gather about the market and the more opportunities you will discover. You have to be in the market to know the market.

At Penn, my derivatives professor taught us that any and all financial products, from the simplest bond or stock to the most complex CDO or CMBS you can imagine, could be broken down into simple blocks/units consisting of some combination of a long position, short position, put, or a call. Let us take this simplification approach and apply it across any business operating in any industry. Real estate. Technology. Manufacturing. Advertising. Medical practices. You name it. They all break down the same way:

1. Company A makes product X or provides service X.
2. Product X or service X has a total cost of Y.
3. Client B wishes to procure product X or service X from Company A.
4. Client B provides to Company A goods/capital/services of value Z in exchange for product X or service X.
5. If Z > Y, Company A earns a profit. If Z < Y, Company A loses money.
6. That’s it.

When is value created? When Z > Y. When is value destroyed? When Z < Y. A company that only loses money and destroys value will eventually run out of money.

But why then do some companies focus only on growth and not profits?

For a high growth company, profits are traded off for growth and market share. But this trade off still occurs with an eye towards the future when at some point value creation will kick in. As Mark Suster says, “This is the trade-off between profits & growth. You can drive profits up by not investing today’s dollars in tomorrow’s growth.”

And why then are there companies that get acquired for their teams or their technology or other “strategic” purposes and not for their profits? In these cases, the acquiring company expects to acquire resources which will add value to their own organization (some companies are better than others at acquiring other companies.)

Real value creation is not easy. The world is overall fairly efficient at pricing goods and services. Competition in most places/industries is high. In the end, you must take input resources (i.e. labor, capital, goods, services) and produce an output with a total cost that is lower than the price which you receive in exchange for providing the output to others. That said, there are always opportunities, inefficiencies, and ways to create value.

Keep an eye on this company. They are early and certainly have a long road ahead of them, but they have tremendous potential. If you’re an iOS developer, they are now out of beta and you can sign up at http://nextpeer.com/

I want to stay as close on the edge as I can without going over. Out on the edge you see all kinds of things you can’t see from the center. Big, undreamed-of things — the people on the edge see them first.

The article brought back memories of my earliest days of building apps on the F8 Facebook platform. I remember Craig Ulliot posting about hitting 250k downloads on his app and not knowing how to handle all of the traffic. Keep in mind this was 2007 — Facebook with about 35-40 million users was the #2 social network behind the heavyweight MySpace.

It was glaringly obvious to Mark Pincus (and some other early players) that social games were an enormous opportunity — while it seemed glaringly obvious to many others that the silly games and applications on Facebook were just a fad filled with notification spam. I remember many people in 2007/2008 who told me there was no future in Facebook applications/games — no money to be made. Some older people told me that Facebook was just a fad for college kids. And people who were excited about the potential of the Facebook platform kept asking when we would see “real” apps instead of just games.  Fast forward to today — entire venture-backed companies try to enter the market by launching apps on the Facebook platform (and or on the iPhone platform.) According to the Wall Street Journal, venture capitalists invested $1.33 billion into gaming in the first three quarters of 2011, after investing $589 million in all of 2010. Things change quickly.

The VentureBeat article reminded me how Zynga consistently raised big money ahead of everyone else time and time again. Zynga also focused heavily on the #2 Facebook rather than the spam-cluttered/creepy MySpace (seems so obvious in hind sight right?). Zynga did so while the media/pundits preached doubt about the viability of the social gaming business, while competitors failed to grasp the size of the market opportunity, and way before gaming incumbents even knew what was going on. Zynga raised a war-chest to go after what they could see was/is an enormous opportunity, while incumbent gaming companies did not view Zynga as a real threat or competitor. By the time the rest of the world fully realized the opportunity, Zynga was already miles ahead.

The takeaway is about being at the edge — by no means an easy place to be. This applies across areas like technology, entrepreneurship, and investing. The edge is the land of uncertainty — where everyone tells you what you are doing makes no sense, will not work, is too small, is not interesting, will not make money, etc. And often they are right. Many ideas, products, investments, and companies on the edge fall off into nothingness. Yet the edge is where you have to be to spot the obvious-in-hindsight big time changes before everyone else does. The edge is where you catch the big wave. [Or the edge is where you step out of the way for an impending storm.] The edge is where you can react to what is coming before everyone else. If you wait for the time when things are clear and obvious and everyone around you nods in agreement that there is a tremendous opportunity approaching, you are no longer on the edge. You are too late.

I found this part of the interview memorable:

Cringley: So you were 21 years old. You were a big success. You had done all this by the seat of your pants. You didn’t have any particular training in management. How did you learn how to run a company?

Jobs: You know, throughout my years in business I discovered something. I would always ask why you do things. The answers that I would invariably get are: “Oh, that’s just the way things are done around here.” Nobody knows why they do what they do. Nobody thinks very deeply about things in business. That’s what I found.

I’ll give you an example. When we were building our Apple computers in a garage, we knew exactly what they cost. When we got into a factory in the Apple II days, the accountants had this notion of a standard cost, where you kind of set a standard cost and at the end of the quarter, you would adjust it with a variance. I kept asking: why do we do this? The answer was, “That’s just the way it’s done.”

After about six months of digging into this, I realized that the reason they did this is that they didn’t have good enough controls to know how much it’s going to cost. So you guess. And then you fix your guess at the end of the quarter. And the reason you don’t know how much it costs is because your information systems aren’t good enough. But nobody said it that way.

So later on, when we designed this automated factory for the Macintosh, we were able to get rid of a lot of these antiquated concepts and know exactly what something cost.

So in business a lot of things are folklore. They are done because they were done yesterday. And the day before. What it means is, if you are willing to ask a lot of questions and think about things and work really hard, you can learn business pretty fast. It’s not the hardest thing in the world. It’s not rocket science.

This reminded me of a course I took at Penn where the professor would often push back on our responses to dig down to the underlying assumptions or bases for our answer. In business, many processes and decisions get made with the basis that they are “standard” or because “everyone else does it this way.” Steve Jobs reminds us to discover the underlying reasoning behind a process or decision — to stop and critically examine what we are doing, how we are doing it, and why we are doing it. For an entrepreneur this extends to everything from hiring to product decisions to raising money vs. not raising money to marketing. Clearly time is a scarce resource for any entrepreneur, so there is a trade-off between thinking and doing. Navigating that trade-off is part of the equation.

Stanford has now turned what were previously collections of course materials into actual courses with not just lectures, videos, and materials, but also professor interactions, quizzes, peers/community interactions, homework, exams. This is made possible through a combination of automated grading, crowd sourcing questions, open office hours, crowd sourced translations, video lectures, and online discussion forums. These courses are being taught by world class faculty — people who are at bleeding edge of their respective fields. The courses are designed to resemble the difficulty and work required for the actual in person courses.

According to the course announcements, the Introduction to Artificial Intelligence course alone signed up over 145,000 people from all over the world. This is typically a course taught to 200 undergraduates on campus each paying about $57,198 per year to attend Stanford (Stanford estimate of the typical student budget.) Now this knowledge is being disseminated across the globe to thousands upon thousands of knowledge-hungry people for free. Simply amazing.

Stanford is expanding from three courses to eleven (update: thirteen) free courses for the term starting in January 2012. Here is a link to the Cryptography course. You can find the other courses at the bottom of that page.

Technology allows professors to transcend physical space and time constraints to leverage their expertise into an online learning platform for large numbers of people all around the world. Education and knowledge dissemination are powerful forces of change and growth. They allow people to build, create, develop, and improve both themselves and their surroundings. They make our world a better place for more people.

Among institutions of higher learning, Stanford is leading the way. For that they deserve our applause.

Singapore

A former British colony, Singapore is a small island state with enormous economic and political power in the region. It is a hub for finance and international trade. In 2010, Singapore is estimated to have the 3rd highest GDP growth in the world at 5.5% right behind Indonesia at 5.55% and China at 9.4% (for comparison the US is at 2.6%). The government runs the country extremely efficiently. The law is strict and punishments for transgression are serious — the crime rate is extremely low and it is one of the safest places I have ever traveled through. The country places a strong emphasis on hard work and education. The commercial nature of the country is quickly noticeable as the government is strongly pro-business and the capital gains tax is zero. Famed investor Jim Rogers makes his home in Singapore. Some of the most impressive and talented students I met during my years at Penn were from Singapore.

Construction in the Financial District

English is easily spoken throughout the country and the people I met were friendly towards foreigners. The food and people were diverse; I liked how easy it was to find restaurants preparing dishes from all over Asia. There were shopping malls everywhere showcasing all the top international brands; the air conditioned stores were a welcome reprieve from the mugginess outside.

Lunch

I also made it over to both casino resorts (among the most expensive to build in the world, newly opened in 2010, and the first casinos allowed in Singapore): the Marina Bay Sands and the Resorts World Santosa. A large number of tourists at these resorts were Chinese. Gambling is banned in mainland China, so these casinos are positioned to attract large numbers of Chinese tourists looking to gamble — a niche that Macau has dominated historically. Singapore reminds me of a startup in its ability to stay nimble, flexible, and adapt to the changing environment to best position itself for the future. I am bullish on the future of Singapore.

Marina Bay Sands

Resorts World Sentosa

Malaysia

Rather than wait in long traffic bus/car lines, I walked the 1 kilometer causeway linking Singapore to Malaysia across the Straits of Johor. I made my way through customs into the city of Johor Bahru. This is the second largest city in Johor after Kuala Lumpur (which I unfortunately did not visit) and fourth largest city in Malaysia. I only went on a day trip, which is far too short for visiting a new place, but I enjoyed my visit.

Crossing into Malaysia

The shopping malls did not carry brand name products; everything was bootleg and incredibly cheap by Western prices. It makes sense then that many people living in Singapore cross into Malaysia to go shopping. The food was spicy (and tasty), which I have come to expect of South East Asian cuisine.

Any Software You Want $1 USD

The coolest thing I found was an arcade at one of the malls. The entire arcade was filled with old school video game machines from the 80s and 90s. Most of the machines were covered in Japanese characters and the manufacturing stickers on the backs of the machines confirmed their origin. It seems that a number of old video game machines retire from Japan to a new home in Malaysia. The arcade had a number of video games I enjoyed as a kid. I was reminded of the classic American cars so prevalent in Cuba that seem to freeze time.

Old School Video Games

The Trip

This was my first time travelling alone to a place where I did not know anyone. I also do not speak Japanese and I am a gaijin (Japanese for “foreigner”). I also decided not to use any maps or handbooks — this forced me to talk to people wherever I went for directions, suggestions on places to check out, or just to meet new friends. I looked online for a few places of interest, but I did not make a strict itinerary or anything resembling a schedule.

I woke up at around 6-7am each day and went out exploring in the city until 10-11pm. I started each day with a blank piece of paper, with the intention of filling the paper by the end of the day based on recommendations from people I met along the way. I would then write down one or two places that I wanted to check out along with what district of Tokyo they were in — this served as my starting point of the day before I could learn of new places to visit. I would then hop on the metro line and make my way to the district. Once I arrived in the correct district, I asked as many people on the streets as it took to find my intended location. I did not meet many Americans during my time in Japan, and my Spanish and French proved useful in a few situations.

I quickly learned that most Japanese people do not speak much English, but they are incredibly friendly and kind to strangers (which runs counter to the common generalization that Japan is a very closed off culture). In one situation, I took a train which had assigned seating, but my ticket was entirely in Japanese. A Japanese woman and her daughter that I asked for help did not speak English, but they managed to guide me to the proper train and the right car. They even came back 15 minutes later to make sure I got on the right train as there was another train coming in as well.

In another situation, I went to a hole in the wall noodle restaurant with automated ordering outside. This was my first night in Tokyo and I had no clue that I even needed to order from the automated machine outside of the restaurant. Furthering my confusion, I had trouble picking what to eat as the buttons had no pictures. I waited for the next person to order and then I tried asking him what he ordered. No English. Ok, let’s gamble. I just pressed the same button he had. Then when we went into the restaurant, he sat next to me and showed me how to properly order the dish from the chefs with the various extra choices, etc. The meal was delicious, even thought I am not entirely sure what I ate.

The coolest part of my stay in Japan was how many different people I met from all over the world. I spent a day walking through Tokyo with a Greek woman that I met in one of the Emperor’s gardens. I spent some time hanging out with two German students on a pier in Yokohoma as they boasted with pride about their national soccer team. I met a few Brits who were avid Japanese figurine collectors and came all the way from England to visit various anime/figurine points of interest (I learned that Japanese anime, short for animation, is incredibly popular and a large part of Japanese pop-culture.) I met two IT workers, an Aussie and an Indian, who got hired away from their native countries by Japanese firms. I met an American from North Carolina who moved to Japan to work in investment banking after he fell in love with Japan while studying abroad during college. Nearly everyone I met shared a story with me and all of them were on such different paths.

My German friends and I

A Twitter Story

I have personally witnessed the power of social media many times before and I am a fan of Twitter. I wanted to share another example that happened during my Japan trip. It all started when I read Dave McClure’s Twitter updates about his trip to Japan where he met with startups/entrepreneurs. I publicly asked him for direction on how to get connected to the tech/startup scene in Tokyo. He replied. And so did Trevor Owens who saw my tweet and introduced me to Japanese tech entrepreneur Hiro Maeda. After a few Direct Messages on Twitter, Hiro and I agreed to meetup in Akihabara Electronic Town (an area of Tokyo that has lots of gadget/technology stores). Hiro brought along his friend, Kakiyama Takehiro, who is also a young Japanese entrepreneur working on an exciting business. From there we geeked out in Akihabara at various electronics stores and they were kind enough to show me around. I got to learn a bit about business in Japan and the different attitudes toward entrepreneurship. Kakiyama then invited me to go see the K-1 World Max kick boxing tournament, which was an absolute blast. It was a pleasure to meet two young entrepreneurs halfway around the world and I had a fun day. And it all started with Twitter; only four years ago, none of that would have happened.

Meeting up

K-1 WorldMax kickboxing tournament

Random Observations

• In the US, smoking indoors is not allowed, but smoking outside is. In Japan, smoking inside is allowed, but smoking outside is not unless it is at a designated smoking station (basically a green trash can with a smoking sign on top)
• Sushi at the Tsukiji Fish Market (biggest fish and seafood market in the world) is absolutely incredible, but even the “fast food” sushi joints are incredibly delicious
  

  Tuna

• The metro stations have arrows and lines for which directions people have to walk in and on what side — people follow these pretty strictly
• People do not cross the street until the walking light turns green even if there are no cars coming in either direction
• Even though everything is incredibly clean and I saw virtually no littering outside, I noticed surprisingly few trash cans out in public
• Just like in China, most eateries do not have napkins, so bring your own or buy them at the eatery (foreign concept for Americans)
• Vending machines are everywhere. Most street blocks have two to four vending machines. They sell everything from soda to snacks to coffee to rice to umbrellas. I have never seen so many different vending machines and in such large quantities
  

  Vending machines

• I saw so many people wearing clothing with English writing that either made no sense or was comical. I even found a “used-American” clothing store — I should have sold them a suitcase full of old t-shirts from my basement
  

  Buy American

I loved every moment of my visit and I hope I can return to Japan soon. I would love to stay longer than five days on my next visit, as there are many things I simply did not have enough time to do.

I’m excited for what the future brings. I’m graduating college this year. I can’t wait to travel to new places, meet new people, learn about new technologies and businesses, and jump into the world.

I’m happy to say that I was able to get a start on all of the above during the past 5 weeks. I plan to write three blog posts covering the separate parts of my travels. This first post covers my time in California.

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I moved out to California with one goal on my mind: to learn how to surf. Prior to this summer, I had tried surfing twice, and I wanted the opportunity to spend more time learning. So I booked a ticket and went out to San Diego.

Surfing is not easy by any means (I quickly learned this) and can be dangerous (a man died surfing on my beach during my 3 weeks there). I came in expecting to learn fairly quickly and not to have much difficulty. Needless to say, I had a really rough start including a few bad wipe outs, lots of trouble controlling my board, and difficulty dealing with the waves in every way. Within the first few days, I had multiple cuts across both legs from rocks, a bruised back from a wave that crashed down as I attempted to popup on my board, and a swollen lump on my head from getting thrown headfirst into the ocean floor. I was frustrated by my lack of progress and the steep learning curve.

Waves are completely indifferent. They will crush you, throw you down, and drown you. Waves will humble you. I learned very quickly that the key to staying safe out on the water was learning how to minimize the power of the waves coming at me while I waited for a wave to catch or while I was paddling out onto the water. After a few times of getting hit hard by waves, you start learning how to read the waves. Some waves are good to roll over on the top and some are not. Some waves are better to dip the board through, while other waves you just need to dive down as deep as possible as they crash over the top (as long as no one else is around you because your board will go flying). If you get better, you learn how to “turtle”, which is grabbing your board by the side rails and flipping over underwater as the wave passes over you.

While 3 weeks is hardly enough time to learn how to surf well, I am happy with the progress that I made. I did not make it out to the truly big waves and I could not ride every wave that I attempted, but I did manage some great rides. The first time I actually stood up and rode a wave all the way in to shore was incredible. Riding a wave is euphoric. Nothing else matters when you are standing up and just cruising. Some of the time, I would just paddle out beyond the initial break and sit up on my board relaxing far from shore as waves rolled underneath my board. Other times I would lay down my board on the beach and just sit there doing nothing.

My lifestyle completely centered around my surfing. I did little else each day besides eating amazing Mexican food (big shout out to the “everything-on-the-menu-tastes-great” Don Carlos Taco Shop in La Jolla, the owner is awesome as well) and watching World Cup matches — mainly because I had no energy left when I would come back from the beach in the late afternoon/early evening. Here are a few pictures:

Overcast surf day

Wipe out

Heading out

I did manage to make it out to Los Angeles to see a few friends. LA seemed unchanged from my trip there last summer; awesome food, horrible traffic/transportation, lots of amenities/things to do, and a culture oriented around media/entertainment. Here are a few pictures (one from my camera the other from my cell phone) from the trainride:

View of Pacific from the train (Camera)

View of Pacific from the train (Cell Phone)

Just an all around relaxing, yet simultaneously exhausting experience.

“From the outside looking in, you never see opportunities. But jump into the ring and get into the fight. That’s when you find opportunities.”

It’s easy to sit on the sidelines while the world passes you by. It’s easy to be a critic, a pundit. Jump into the ring and get into the fight.

The Flight to China

I flew in through Chicago and the flight over was about 15 hours. It seemed as if everyone on the plane was opportunists headed to China to pursue business. The guy next to me on the flight is helping to expand operations in China for an electrical parts manufacturer. A few others I spoke with owned textile factories throughout China.

Initial Drive into Shanghai and Real Estate

The outer parts of the city on the drive in from Shanghai Pudong International Airport are a MESS. Serious urban sprawl and construction going on everywhere. I was told that there is no zoning on the outskirts of the city and many parts of the inner city were built with no zoning in mind — this is clear as soon as you enter the city. The quality of buildings here has HUGE variance — you can see a Class A office property right across from a dilapidated small apartment building. Outside the main part of the city, there’s large noticeable vacancies. Rows and rows and rows of empty buildings. You can look straight through the window of one empty building and into the five behind it. I was told that they are going to fill all these buildings up, but my skeptical nature makes it hard for me to fully believe such optimism. Still, the inner parts of the city are very densely populated and the buildings are filled with people. The buildings are all different qualities and sizes. It’s as if they used ten different cookie cutter sheets for each set of buildings. The biggest question on people’s minds has been “Is Chinese Real Estate a bubble?” Having seen Dubai last Spring, I realized quickly that Shanghai is no Dubai. This city has an underlying demand and real fundamentals stemming from the increasing levels of urbanization. The large price run up in Shanghai real estate may correct in the short term, but a bullish long term outlook does not seem irrational.

Lifestyle and Living Costs are Attractive

One of the coolest parts of China is that everything is ridiculously cheap by US standards. You can eat a full meal for $1 USD at a sit down fast-casual style eatery. Cab rides usually cost $1-4 USD anywhere in the city. One of the businessmen I met in Shanghai confirmed that if you make a US or Euro salary in Shanghai, “you can live like a king.” Rents in the nicest parts of the city are no more than New York City rates, and you can enjoy the nicest amenities that the city has to offer at really cheap prices. This lifestyle factor seems to be a huge draw for the expats who make their homes in China.

Intellectual Property Does Not Exist

Intellectual property protection is not really enforced or expected in China. We met with a large medical device manufacturer and pharmaceutical company who made this very clear. Lots of local copycats spring up to replicate existing drugs or medical devices. There is little or no enforcement of IP here in China. The typical model is: replicate a US or European product, get funded by private equity and scale it to IPO or Sale. It’s very hard for foreign companies to come here because it is very difficult to put up barriers to entry based on product. This also makes products super cheap for Chinese consumers. I sent out a tweet which captured my conclusion: “No intellectual property protection here shifts competitive advantages from innovation to selling/distribution and speed of replication.” That’s a much different playing field than in the US.

Driving Insanity

I had heard drivers were crazy in Asia and I expected this, but I was still in for a shock at how hectic the driving in Shanghai was. The drivers will literally hit you. Bikes, mopeds, and cars don’t seem to care about traffic signals that much. They also don’t seem to care about one way streets all the time. I saw a woman get hit by a guy turning the corner on his moped (she was OK, but he didn’t even stop). I saw a young boy duck in front of our bus on his bicycle and barely make it. I stopped keeping track of what I saw. It’s just something to be constantly on the lookout for before you cross the street or even choose to walk outside (the mopeds sometimes fly around on sidewalks or walkways).

The Infrastructure is Superb

The metro system in Shanghai is extremely easy to navigate and very modern. It was easily the nicest metro I have ever used. LCD screens everywhere, easy to follow signs/directions, and everything is in English as well as Mandarin. The most striking thing was that everyone files into orderly lines to board the trains – that would never happen in the US. The Shanghai Pudong International Airport is enormous, very modern, and even has water fountains that let you set the water temperature as well as free WiFi (I wish more US Airports had free WiFi).

Emphasis on Execution

From talking to many local and foreign businessmen, the general conclusion seems to be that business in China is all about execution and that ideas take a back seat. Multiple people told me that the Chinese school systems are much more rigid and systematic than US schools, which makes it harder to develop outside of the box thinking. This can be a huge advantage for anyone coming to China from America with a strong sense of entrepreneurship. It seems like you can really stand out. I can’t help but feel that this advantage is temporary. As Chinese entrepreneurs become more global, there will be a greater balance between ideas and execution. Ideas in the US are a dime a dozen.

Chinese are Buying Foreign Assets to Expand out of China

This has not historically been the case, but this is now a growing trend. Chinese companies are doing this to buy know-how and to set themselves up for global expansion beyond the Chinese market. A recent example of this is the November 2009 closing of Beijing West Industries Co. Ltd.’s acquisition of Delphi Corp.’s global brake and suspension business. The Chinese are buying up real estate, technology, and businesses from the US in a cash scarce environment. Such moves show the foresight and shrewdness of Chinese businessmen who are taking advantage of the global downturn and setting themselves up for the future.

The Government Controls Everything
Everything in China has an “aura” of government to it. This was not as weird for me to get used to after visiting Dubai last year where the situation is very similar. A critical aspect of life in China is the strong role of government in every aspect of life. Pretty simple, but worth mentioning. Being able to work with the government is critical to success for many businesses in China.

The Chinese Consumer

I had the opportunity to sit down with a retail and dining operator. He gave me an excellent overview of the Chinese consumer. Popular leisure activities in China include board games, karaoke bars, shopping, and playing dice games. The Western conception of night life is completely foreign to them. I noticed this when I went out at night — I saw people playing dice games in night clubs. Also, Chinese consumers love expensive and premium brands. In fact, they respond strongly to pricing levels as a signal for quality. One of the hard things for me to get used to was that Chinese consumers LOVE choices. When you go into a supermarket, it feels like there are 100 brands to choose from for every product type. When we went to Pizza Hut we got about 4 menus to choose from (Pizza Hut is a premium restaurant in China). It sometimes felt overwhelming to have so many choices — I like simple menus and quick comparison shopping. Also, in a lot of ways, I felt constant parallels between the consumer online market in the United States and physical shopping market in China. Barriers to entry are very low, replication/copy-cats exist everywhere, switching costs are very low, brand loyalty is low, options are abundant, and costs of doing business are very low. It felt like everywhere I turned there was a shopping mall. I’ve never seen so many shopping centers so close together.

Commodities and Real Estate All Over

This is probably true of any emerging market, but it really struck me that so many of the people I met were involved in or somehow linked to either commodities or real estate. No real insight here, just an observation.

University Meeting

We got to meet with business students and a professor from Shanghai Jiao Tong University (SJTU), which is considered the MIT of China. The University has recently been in the news as the home of the Google hackers. I had a wonderful time meeting the students and I enjoyed hearing their views on the US as well as China. The NY Times has an excellent article on SJTU, which has, in recent years, consistently beat out schools like MIT and Stanford in international science competition.

Being White Stands Out

Being white in China stands out. I definitely felt like an outsider the whole time, but I was treated extremely well all around the city. One time, I went to a restaurant with a few Asian girls from my trip. Whenever they tried to order or get the attention of the waitress she would ignore them. Whenever I needed help the waitress would run over instantly. I found people staring at me in a lot of places — I didn’t mind it, but it was very noticeable. I also noticed that when I bargained in the street markets, I consistently had to pay a higher price than the Chinese people on my trip — they told me that white people are expected to pay more.

Language is NOT a Barrier

I thought that my lack of Mandarin would make it very difficult to enjoy China. Most people that I tried speaking with in restaurants, stores, or other places throughout Shanghai spoke very little or no English. This was only a superficial barrier. I still found ways to communicate. And the expats that I met throughout the week all confirmed that it took them all roughly 1-2 years in China to pick up enough Mandarin to get by. One expat that I met with hired a private tutor (very cheap to do) and developed high level speaking skills within 6 months.

Concluding Thoughts

I had an amazing time in China. In my mind, China rising to the top is not a matter of IF, but a matter of WHEN. I am extremely fascinated and excited by the opportunities in China. Everything is new and constantly changing. There are definitely barriers to doing business in China, but that’s a good thing because it helps you build a competitive advantage. I truly believe that doing business in or with China will be like having a website – ubiquitous. I can’t wait to return to China, and hopefully for a longer visit next time.

I’m thrilled with the results of this video and I had a blast. The whole process behind creating and launching this video felt the same as when I was launching new applications on Facebook. There’s very few experiences that can compare to the amazing feeling of launching something new and watching LIVE as people enjoy what you’ve done.

Here’s the first song I’ve ever recorded/published. Enjoy:

My trackball first showed signs of not working properly within 2 months of getting my phone. As the weeks wore on, it got harder and harder to use. Eventually I got fed up with it and called Verizon. They shipped out a new BlackBerry Tour for me. I restored my backup onto my new device, and when I went to upgrade the phone, everything got deleted. And the BlackBerry software on my computer stopped working. Long story short: after spending a good chunk of my day doing multiple uninstalls-installs, restoring data, and updating everything, I finally got my replacement phone working again. Even with my insane amount of optimism, I am confident that my new device will break down or cause me a headache shortly.

Now on to the business model of cell phones. Right now, in the USA, cell phones are mainly sold through a razor blade model. The carrier gives away the phone (or heavily subsidizes it) and in return, you sign a long term contract with heavy termination fees. And many devices are only available on certain carriers — the perfect example being the iPhone on AT&T. I expect and hope that this model will be disrupted shortly. What we need is more competition between carriers and device manufacturers — no more exclusive contracts on devices or forcing people to sign long term contracts. Competition breeds innovation and lowers prices. I want to be able to buy any phone and use it on any carrier with no contracts required. Some important highlights:

• On January 5, 2010, Google released the Nexus One phone. This phone can be purchased unlocked and can be used on any carrier.
• Rumors are that this Wednesday, AT&T will lose exclusivity over the iPhone

I am hopeful that such developments are the start of a longer term trend where consumers are given more options in devices and carriers become commoditized.

I’ve been thinking about time a lot lately. Time has an incredibly unique set of characteristics: everyone has it, you can’t buy it back, everyone spends it differently, it is infinite on a generalized level, it is limited on a personal level, no one knows how much of it they have left, and you can’t stop spending/using it. Given these characteristics, I simply want to maximize the time I have available to me.

I’m excited for what the future brings. I’m graduating college this year. I can’t wait to travel to new places, meet new people, learn about new technologies and businesses, and jump into the world. I can’t wait to see what the coming years have in store for me. I have no predictions other than the fact that human nature will repeat itself in the future as it always has over history: people will make/lose money, people will make irrational decisions, new artists (musicians, actors, etc.) will emerge with new work and performances that captivate us, barriers to entry will drop across various industries, old incumbents will fall at the hands of new emerging startups, political/high profile scandals will unwind, technology will evolve to make our lives easier and better, the world will continue becoming more global/connected, and the clock will keep ticking. Am I an optimist? Hell yes.

Here’s a really cool mashup that my friend Spencer sent to me. It’s a very well done mix of the top 25 Billboard hits of 2009 by DJ Earworm. I think it’s a great way to end my last post of the year:

What’d I take away from his talk? The importance of pushing through comfort zones. He emphasized throughout his talk to us how important it is to constantly push yourself beyond what you are comfortable doing. That’s how he ended up pursuing opportunities all around the world. And, as he explained, that’s what he uses as his test for making business decisions where he is in unexplored territory. As always, that’s easier said than done.

Most high achievers grow up with constant external positive reinforcement of their success. When you got an “A” your math test and your teacher gave you a sticker or your parents put the test on the fridge — such actions condition high achievers from a young age to value extrinsic motivation. Furthermore, high achievers develop an avoidance of failure. It’s too easy to stay in a comfort zone and continue achieving without much risk.

What Tom Barrack emphasized is something I have tried to incorporate more into my life in the past few years, although his talk really underlined to me just how important it is. Last year, I signed up for an extremely quantitative class filled with engineers, statistics, and math majors. My initial reaction was one of fear of failure. I wanted to drop the class within 2 weeks because I felt that the material was way above my head and that I could not keep up with other students in the class. But my father convinced me to stick to the class. He put everything in perspective for me: I would just have to work harder than everyone and that I have never in my life backed down from a challenge. Why should I back down now? It made me realize how easy it is to avoid challenges — it’s so much easier to stick to the formula that works. But I faced that class head on and ended up with one of the highest grades in the class. All because I pushed through my comfort zone.

Another recent example came to me in squash, which I only started playing about 2 months ago. I’ve been playing a lot lately, and usually with players who are undoubtedly more experienced than I. I have forced myself to constantly play with people who are better. I get destroyed match after match after match. But I push through it and my game has improved dramatically in the past few weeks. I recently tweeted my approach to squash, which I believe applies to a lot of other things:

If you want to be the best, play with the best…embrace the competition

My serve and court game is decent, but my return game is awful. So what do I do? I always let my opponent serve so that I am constantly under fire and forced to practice my awful return. And it has definitely strengthened my return game.

Basically, I think comfort levels serve as an amazing gut check. Anytime you feel uncomfortable trying something new or difficult — it means that you have to push through it and force yourself to embrace whatever comes your way.

Until recently, I had only thought of myself as interested in a Type 2 role (running a business), but the current state of the world has opened my eyes to the importance of Type 1.

In a boom, money is loose and easy to find. Capital in essence, becomes a commodity. If you are running a business as a Type 2 at a successful level, everyone is competing over you; everyone wants to invest in your business and put their money to work. Also, in a boom, business is generally good and it’s easier to find customers, charge customers, and ultimately make money. So during boom times, it puts you in a power position to be an entrepreneur putting Type 1 money to work.

In a bust, money is tight and hard to find. Capital is now a rarity. If you have capital (Type 1), everyone is competing over you. Business operators want you to invest in their company. They are willing to take lower valuations and worse terms just for some cash. It’s also harder to run a business when the economy is struggling; customers are harder to find, customers demand better pricing, and everyone tightens up. In such a state of the world, Type 1 sits in the power position.

I constantly hear how right now is the best time to start a business. Conventional wisdom today, at times, feels like it is purposefully contrarian. While right now is a good time to start businesses, especially in areas where incumbents are struggling or out of business, I think it’s a mistake to ignore the importance of having capital.

Right now, to me, seems like a better time to be investing in undervalued assets, investing in startups at low valuations, and putting money to work on much better terms than seen in a long time.

The conclusion is then fairly self-explanatory: I’d rather invest in many businesses at the bottom for cheap than start one business at the bottom. I’d rather operate a business in a boom than invest in businesses at boom prices. In a boom, entrepreneurs are in power. In a bust, capital holders are in power. Be in the power position.

Reflections on Los Angeles:

1) The city is very spread out and decentralized. I spent the first two months of summer living in New York. Los Angeles is eseentially a flattened out New York. So you have the same amenities and offerings, just spread out over a larger area. Just takes getting used to the fact that everything is spread out.

2) There is lots of distressed real estate and it will come back. California had a huge real estate bubble crash. Being on the ground in LA gave me the opportunity to see first hand the condition of the real estate market. There is going to be lots of opportunity in California real estate in the next few years. Having spent time in Dubai (which also had a huge real estate crash), I saw that LA has real fundamental demand for goods and services. Dubai was just built on nothing. Check out this graphic from RealtyTrac which does a good job of showing a snapshot of real estate in California.

California Foreclosures

3) California has water problems. I went to a sushi restaurant and I noticed the following sign posted around the restaurant:

Water Problems

I’ve never seen a sign like that, but it makes sense given the water conservation efforts underway in California.

4) The city is littered with seekers of fame. If I were to generalize about cities I’ve spent time in, I would say New York: Money, Washington DC: Power, and now Los Angeles: Fame. That’s not necessarily bad or good, that’s just how I see it. The culture of Los Angeles seems very predicated on status and fame.

5) The food is out of this world. It should be no surprise given the ethnic diversity found in California, that the food is amazing. I don’t need to say much more.

6) Public transportation is not part of the equation. This summer I took the metro or a bus all over New York. It was so easy and convenient. In LA, that doesn’t appear to be the case.

Reflections on Alaska:

Alaska was absolutely gorgeous. I spent about a week out in the middle of no where (which was a nice break from the buzzing of the BlackBerry) and I got to truly enjoy the outdoors. I’ve enjoyed fishing ever since I can remember, and Alaskan fishing was a true pleasure.

One of the biggest things I learned on this trip was about an environmental issue called the Pebble Mine Project. In a nutshell, the proposed project is to build a open pit copper mine in Bristol Bay which experts estimate has about $500 billion in copper deposits. Bristol Bay is home to some of the largest salmon runs in the world and provides about $300 million in revenue for the local fisherman. This proposed mine, which would be among the largest ever built, poses a significant threat to the entire ecosystem in the area because there is virtually no way to safegaurd the water, air, and land against a mine of this size. I can’t say I’m the biggest environmentalist in the world, but there’s something indescribable and beautiful about the nature of Alaska. It would be a shame to see it destroyed.

I would love to spend more time in Alaska. Here’s a few pictures from my trip:

Fly Fishing

The Scenery

Alaskan Sockeye Salmon

Here’s the team I ended up with:

QB (start 1): Ben Roethlisberger, Jake Delhomme

WR (start 3): Steve Smith (on the Panthers), Chad Ochocinco, Roy Williams, Chris Chambers, Earl Bennett

RB (start 2): Clinton Portis, Kevin Smith,  Jamal Lewis, Cedric Benson, Ricky Williams, Michael Bush, Peyton Hills

TE (start 1): Dallas Clark

I’m really excited about my team. At RB, I have 4 guys (Portis, Smith, Lewis, Benson) who are undisputed starters on their teams and the other 3 guys are all very capable backups who could shine if given the starting opportunity. I’m really confident in my WRs, and I’m looking for a big time bounceback for Chad Ochocinco. I’ve been following him on Twitter and he’s got me sold that this will be a big year for him. I’m only half joking. Chambers can put up huge numbers on occassion and I’m hoping Bennett hooks up with Cutler to rekindle the magic they shared in college. I’m confident that Dallas Clark will put up top TE numbers. The only position I’m worried about is at QB. I’m not sold on Big Ben or Jake Delhomme. Neither of them consistently put up big numbers at QB. Luckily, my league doesn’t give too many points at the QB position, but it’s still nice to get good numbers out of that position.

Last year I finished second. The goal, as always, is to win it all this year.

“Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead.”

These words apply to many things beyond just investing. Beautiful and simple.

1) Blogging is much more of a meritocracy. There are over a hundred millions blogs in existence (indexed since 2002). New blogs crop up everyday. In contrast, the major news networks all remain the same. The hosts are nearly the same (sometimes they rotate between networks). With blogging, new blogs shoot up out of nowhere and gain large followings in a relatively short period of time. A recent example of this is the financial blog ZeroHedge, which started a few months back as a hosted blogspot domain and has now grown into one of the edgiest financial blogs in the world. The mainstream media loves to point to the fact that anyone can start a blog as a way to question the credibility of bloggers. The problem with this argument is that they fail to realize no one continues to read bad bloggers. If you are not providing great content and value, people won’t read what you have. It’s as simple as that

2) The feedback is real, unfiltered, and instantaneous. The people on TV News Networks have no real resistance to what they are saying. Sure, they bring on people to “debate” them, but there is very little discord on the air. All the voices sound the same. Blogs have a simple thing called comments. Although some sites limit the comments on their posts, most sites allow uncensored and raw comments. This means that bloggers with large followings can’t get away with just saying unfounded opinions. Anyone who spews out garbage will get RIPPED APART in comments. It’s as simple as that. I would love to see these TV News Hosts attempt to handle the feedback that bloggers get on a daily basis. They couldn’t handle it. They are not used to anyone seriously challenging what they say.

3) Bloggers have nothing to lose. Whereas the major TV networks are owned by the same handful of big companies, the blogosphere constantly gives rise to new voices who are unafraid to push the envelope. It is precisely because anyone can start a blog that bloggers are FEARLESS of what they say. Blogs really are too small to fail and that makes them an incredible source of groundbreaking ideas/news. Sure, blogs can often overstep the lines of reality, but I think we’ve seen in the past year that so can mainstream media. I love reading a blog that consistently pushes the envelope because they are unafraid of disrupting the status quo. This is how truth and ideas are born.

With that, I would like to leave you with one of my ultimate favorite clips of one of my favorite personalities: Jon Stewart. He is brilliant, sharp, witty, and always pushing the boundaries. Ironically enough, this comedian, as of today’s Time Poll is the MOST TRUSTED NEWSCASTER IN AMERICA. Let that sink in for a moment.

This is a clip of him coming onto CNN’s Crossfire and absolutely ripping them apart for their failure to truly do their responsability of delivering real discourse. His apperance on the show led to the cancellation of the show (after having run for 12 years) and the termination of Tucker Carlson’s contract with CNN.

For an entrepreneur, it’s important to make an attempt at drowning out the noise and really focusing in on opportunity. I see massive opportunities in hedge funds and real estate investing in the coming years.

First off, the space is a lot less crowded. For example, in a June 16 Bloomberg article, Hedge Fund Research reports that of 9,500 funds in existence around this time last year, 1,200 have closed. So for every investment, there are now less people looking at it. That inherently creates opportunity.

Secondly, and perhaps more importantly, we must look at the players remaining. The average hedge fund lost 19% in 2008, which is the worst year on record since the dataset began tracking in 1990. So of the remaining players, they are now increasingly risk averse. The name of the game is to survive. That’s healthy and appropriate. But it also means that such a recent memory of a near fatal experience can impede the investing decisions of people who made it through the blood shed of 2008.

Thirdly, we must look at history. Investors and market speculators have existed in some form or another since the ancient days of Aristotle in Greece. There have always been bubbles and crashes. Booms and busts. Today is no different. There will be more bubbles in our lifetime. And there will be more crashes as well. Many things come into existence through booms and trends. It is part of our human nature.

And so, I have no doubt in my mind that the future looks very bright for investors. New markets will come. The players will change, but the golden rule will always be the same: buy low, sell high.

[the school is] premised on the theory that excellent teachers — and not revolutionary technology, talented principals or small class size — are the critical ingredient for success.

Here is what the teachers were selected on:

The eight winning candidates, he said, have some common traits, like a high “engagement factor,” as measured by the portion of a given time frame during which students seem so focused that they almost forget they are in class. They were expert at redirecting potential troublemakers, a crucial skill for middle school teachers. And they possessed a contagious enthusiasm

There have always been different theories on success in the classroom. What really struck me about this school is that it has a completely contrarian approach: the teachers get paid more, the class sizes are bigger, the teachers work a lot more, and there is no safety net for teachers.

To make ends meet, teachers will hold responsibilities usually shouldered by other staff members, like assistant principals (there will be none). There will be no deans, substitute teachers (except for extended leaves) or teacher coaches. Teachers will work longer hours and more days, and have 30 pupils, about 6 more than the typical New York City fifth-grade class.

Teachers will not have the same retirement benefits as members of the city’s teachers’ union. And they can be fired at will.

This school basically cuts out any excess in the system. The best teachers should get paid a lot and in return a lot should be expected of them. In a sense, this school provides for a market for good teachers. I think an economic model to solve education in America could create significant change. People commonly bring up that teachers don’t get paid much, so there’s not an incentive for people to work in teaching. Imagine if being a teacher paid as much as traditionally highly paid professions like being a lawyer or an investment banker (pre-2008) or a doctor. I have no doubt in my mind that we could develop generations of extremely talented teachers.

The key is incentives. And as of today, it’s very hard to attract the best in the world to teach the next generations of America. That needs to change.

What I think is problematic for many entrepreneurs is when they face a 3rd party who has interests that only align partially. For example, you are the CEO of Startup Company XYZ that designs, manufactures, and sells a special widget. Big Company ABC comes to you with a deal to use your manufacturing facilities to design and manufacture a new type of widget which they will sell. A lot of startups get approached by big companies who want to “outsource” things to them. Do not do this deal. It’s obviously a great deal for Company ABC to skip the design and manufacturing stages by outsourcing it to you and, but this deal leaves you stretched thin and unfocused. Your Startup Company XYZ needs to stay focused on your widget, not on someone else’s widget.

These people want to bend your will to match theirs. That’s why it’s so important to know what you want and go for it. Otherwise, it’s too easy for others to come in and use you for their own purposes. It’s very rare that the interests of both parties align perfectly. When you are at risk of becoming a means to someone else’s end and that end is not what you ultimately want, run the other way. Fast.

When going through my unread e-mails, I noticed a few trends and decided to setup filters in Gmail to better process my incoming e-mail. I quickly noticed that all e-mails basically fall into “auto-generated” and “personal” e-mails. Basically, “personal” e-mails are any e-mail where someone has to manually e-mail you and often the e-mail is intended for just you or at most a few other people. “Auto-generated” e-mails come from websites I have accounts on or groups I’ve signed up for. My ultimate goal was to create an Inbox where I would only get personal e-mails. These are usually the e-mails that require my immediate attention as I prefer to reply fairly quickly to e-mails. Here’s what I came up with:

1) Some websites/groups send me a lot of e-mail that I don’t read often

I found that sites like Staples, Amazon, Uloop, Skydeck, Mint, and others send me frequent updates. I very rarely read those, but sometimes I do and I don’t want to delete them all. So I setup Gmail filters to filter them into a separate folder that I can check infrequently. This way I can search through them at any time or retrieve them if needed at a later date.

2) Some websites/groups send me a lot of e-mail that I read consistently

A few sites like Facebook and Twitter, send out many notifications and I usually will read these. I still don’t want them clogging up my Inbox, as these notifications are not always that important. For sites like these, I setup individual folders that get filtered e-mails. For example, Facebook e-mails all go into a Facebook folder, etc. This also includes all of the school e-mails I get from Penn and Wharton. I want to stay informed of on campus events and school news, but I don’t always need to see this right away.

3) Some websites/groups send me e-mail that I never read

This was the easiest to deal with. I have signed up for websites in the past that I no longer use and listservs that I no longer read. For these, I simply setup auto-delete filters so I will never even see their e-mails. This was my favorite part and it will surely clear a lot of “noise” out of my Inbox.

4) Personal e-mails get lost in the shuffle

These are the most important for me.  I noticed more than a few personal e-mails that I had missed or replied slowly too because they were in the middle of a bunch of other e-mails. These e-mails are now the only e-mails that touch my Inbox.

Overall, I spent a few hours setting up all the filters and clearing through my Inbox. In the end I am left with a system that should hold fairly well for the foreseeable future and help me keep my e-mail organized.

This past month, I’ve had a lot to blog about, but my computer broke and I’ve had to resort to a new lifestyle. I actually delayed getting my computer fixed because I wanted to experiment life without a computer. It’s been very interesting to say the least. My cell phone has limited Internet and e-mail capabilities, SMS texting, and AIM capability, but no attachment ability or complex Internet access.Without a computer, I can only use public computers and I have to plan out my usage ahead of time.

The great part of this is that I spend WAY LESS time on a computer in a typical day and usually go over all of my e-mails and TO-DO items in one sitting. This has made me extremely efficient. The only way to really get an instant guaranteed hold of me is through phone calls — I don’t think I realized how little time I spend actually talking on the phone and instead through Twitter/Gchat/e-mail/AIM/SMS texting etc. The personal touch of a phone call is not to be underestimated.

The downside is that this makes it harder to blog something right away when it is fresh in my mind or to write draft blog posts for writing out in full at a later time. Also, my Twitter usage has shifted to my mobile device, which allows me to Tweet easily, but makes it harder for me to interact with others because I don’t get a constant stream of updates to my mobile phone (it’s not a Blackberry or an iPhone.) Also, I don’t always like my delayed ability to respond to e-mails — I try to respond to e-mails as fast as possible usually. Lastly, not having a computer makes it hard for last minute information gathering (i.e. directions, weather, etc.) or sending off some quick attachment via e-mail.

I think I’ll get my laptop fixed soon or get a new one altogether. But this experiment has definitely shown me the value of not being constantly connected by having a portable laptop. The efficiency losses have not been that bad, but the ability to have lots of interaction and the ability to be very flexible is a significant cost.

P.S. I hope to put up slides and video from my talk for PSL’s Entrepreneurs Unplugged shortly. If you missed the talk, you can get a recorded version from USTREAM here:

http://www.ustream.tv/recorded/1419673

PSL’s newest event series Entrepreneur Unplugged will extend the spirit of Founder Factory by bringing successful Entrepreneurs “on stage” to share their personal stories of risk taking and decision making.  The format will be a 30 minute presentation followed by question and answer.  The series will be streamed live, recorded and distributed online.

We’re proud to have Boris Silver open the series and share his experiences with his startup, Sport Interactiva, which provided fantasy sports games to over 1 million users on social networks.  Boris took a leave of absence from the University of Pennsylvania to grow the business full-time and navigated a successful exit just 9 months later.

Thanks to our friends at the University of Arts for providing an absolutely amazing venue to showcase the series.  The series continues on 6/17 and 8/19 at the same time and place.

When: April 22, 7pm

Where: University of the Arts, Hamilton Hall (map)

Location: 320 South Broad St, Philadelphia, PA

 

Look forward to seeing you there.

So I definitely want to start out by thanking Wharton, the companies I met with, the government of the UAE, the Wharton Alumni, and the trip organizers for hosting me and providing such incredible experiences.

I kept a journal for the length of the trip to keep track of my thoughts, experiences, and questions along the way.

I wasn’t really sure how to write a single post re-capping the entire trip and there are so many things I want to talk about.

Wharton arranged some phenomenal meetings with the CEOs and management of 3 large companies in the UAE. This post will highlight the three companies that we had official visits with. 

Company One: Emaar Properties

The first company that we met with was Emaar Properties, a Public Joint Stock Company operating out of Dubai. Emaar is one of the largest real estate companies in the world and they are responsible for many of the iconic properties of Dubai like the Dubai Marina, the Burj Dubai (tallest building in the world), the Dubai Mall, and many other properties (commercial, residential, and mixed-use). They have focused on building integrated communities that have not only housing facilities, but educational, medical, shopping and other core facilities needed to sustain communities. It’s a unique approach, which allows them to build “start-up” communities anywhere in the world.

What was truly inspiring were Emaar’s plans for the future. They are not looking to become just the biggest company in the Arab world — they are instead aiming to become of the largest companies in the world. Period. They are working towards this goal by having multiple business units within the company to focus on things outside of real estate like hospitality, education, healthcare, transportation, etc. I noticed that everyone in Dubai is perhaps overly optimistic, but they have no qualms about thinking big. I love it. It is truly a city of dreamers and big thinkers.

After the CEO of Emaar presented to us, we were joined for lunch by the Chairman of Emaar, Mohamed Ali Alabbar. He is considered one of the most powerful business leaders in the Arab world and he holds lots of influence as the close confidant of Dubai’s Dubai’s Ruler and UAE’s Vice President/Prime Minister, Sheikh Mohammed bin Rashid Al Maktoum. Mr. Alabbar’s charisma and presence in a room is unlike anything else I have never witnessed. We learned of his growing up from a poor family and his fundamental beliefs in working hard and doing what you love. He told us that right now is the best time to start something entrepreneurial and to follow your passions. Like some others in this time of world crisis, Mr. Alabbar believes that there will be massive opportunities for those willing to take them while others run for cover. It never hurts to hear one of the most successful people in the world voice the key mantras of any entrepreneur.

Company Two: The Emirates Group

The next company that we learned about was The Emirates Group. We had the opportunity to meet with Mr. Maurice Flanagan, Executive Vice-Chairman of the Emirates Airline and Group, who was kind enough to give us a tour of his headquarters and talk to us about the history, goals, and future of the company. We sat with the man who literally built Emirates Airlines up from a startup funded with $10 million USD in 1985 into one of the most well regarded international airlines in the world — employing over 35,000 people, and flying over 20 million passengers a year. The Emirates Group is the holding company which controls Emirates Airlines, as well as other lines of business.

Emirates has had to deal with the massive fluctuations in oil prices as well as the changing economic preferences/attitudes of its consumers. Mr. Flanagan explained some of the technological advancements that they’ve made at Emirates to help keep them cost competitive and to keep them more informed. It was also informative to hear about Emirates’s operations in the cargo transport and the tourism services. Other airlines have actually outsourced parts of their operations to Emirates and Dnata (airline services subsidiary of The Emirates Group.) This puts Emirates in a powerful position.

Company Three: Mubadala Development Company

The third company that we met with was Mubadala. The company is a Public Joint Stock Company operating out of Abu Dhabi, and basically functions as the investment vehicle of the Government of the Emirate of Abu Dhabi. Some of the more famous investments that they’ve made are in AMD, The Carlyle Group, and Ferrari.

It is important to note that this is the only company we officially visited with outside of Dubai. There is some rivalry between Abu Dhabi and Dubai: Dubai gets all the flash and hype, while Abu Dhabi really controls the oil wealth of the UAE. Abu Dhabi is the wealthiest emirate of the UAE; the average net worth of an Abu Dhabi citizen is about $17 million USD. In fact, with all the real estate and tourism problems that have hit Dubai hard recently, Abu Dhabi has had to bailout Dubai with $10 billion USD. The Economist has a good piece on this here. Think of Dubai as the fast talking, risk seeking, ambitious, young gun nephew and Abu Dhabi as the prudent, methodical, veteran uncle.

This context is important for understanding Mubadala. The goals of Mubadala are to make not only financial returns, but strategic returns as well. This is interesting to note because their investment criteria differs from that of most Western investment firms. Mubadala is willing to invest in projects that may have low financial returns, but huge strategic returns — like building highway projects or educational facilities in the UAE.

Their creative approach to investing really impressed me. I was also really impressed by the range of investments that they make — they invest in projects ranging from infrastructure to real estate to health care to energy to aerospace. And they are willing to invest globally as much as they are willing to invest in the region. They also employ a very flat organizational structure.

One thing that I made particular note of was their focus on bringing knowledge into the country. They are very interested in transferring knowledge and skills from foreign companies for the purpose of creating jobs and improving the abilities of citizens within the UAE. It is a very humble and mature approach to improving the economic situation of the UAE in the long term. They realize that the oil is going to run out and they are preparing for that very day.

Conclusion

Overall, the visits to these companies were fantastic. They were all incredibly hospitable and welcoming. I also witnessed just how business friendly everyone (government included) is. They are not scared of working with foreign companies and they are not afraid to think big. The governments of both Abu Dhabi and Dubai are very involved with businesses, and make no effort to hide it. There are no taxes in the tax free zones and the rules are incredibly transparent.

This country is a dream for entrepreneurs. The government will bend over backwards for you and give you everything you may need to succeed.  And unlike in America, ambitious dreamers in the UAE are the norm, not the exception. The most striking aspect of all this is that the visionaries see their dreams realized time and time again in the UAE. There are truly no constraints or limits to what is possible.

When I was young like you, in my 20s, I learned English from scratch because my masters in the West spoke it. But, you see, I have new masters in the East and they speak Mandarin. So I will learn Mandarin everyday.

I think this quote really touched me for three reasons. Most obviously because I like language learning. Secondly because it just reinforces the shift in power from the West to the East. But most importantly this quote really struck me as beautiful because of who was saying it and the way in which he said it. It was absolutely humbling to hear such a man use the word “master” (not once, but twice) and equally humbling to know that even at his age and level of wealth he is working so hard to constantly improve.

Yesterday I read through Warren Buffet’s annual letter to shareholders which he just wrote for Year 2008. You can read it here. To sum it up, his investment firm Berkshire Hathaway had its worst year ever. Their profits plunged 96%. Interestingly enough, Buffet took many positions in derivative instruments.

Now let’s rewind and look at some of the things Mr. Buffet told his investors in his 2003 letter to shareholders.

Derivatives are financial weapons of mass destruction 
 

Derivatives generate reported earnings that are often wildly overstated and based on estimates whose inaccuracy may not be exposed for many years  
 

Large amounts of risk have become concentrated in the hands of relatively few derivatives dealers … which can trigger serious systemic problems 
 

But I can point out that in 2008, he took on large exposures to derivatives and that he is now in a position where he may get burned big time. He was right in 2003, yet he didn’t stick to his own philosophy and took on leveraged bets through derivatives. Credit to Buffet of course is his absolute willingness to take any and all blame ”It is my belief that the CEO of any large financial organization must be the Chief Risk Officer as well. If we lose money on our derivatives, it will be my fault.” That being said, his bets may very well payoff, but it surprised me to see him take such positions.

But I wanted to bring forth an empirical example of why I think Chipotle is going to crush and destroy Qdoba. Beyond the fact that their burritos taste better and that their menu is more simply designed. I want to talk customer service. What makes it easy to compare is that I know of the same exact situation, which was handled differently at both places.

Customer Service at Qdoba

Two of my friends went to Qdoba while a third went to the nearby Greek Lady. The third friend joined the first two at Qdoba after they had all received their respective meals. He was quickly told that he couldn’t eat there because only Qdoba customers were allowed. That makes sense in theory, but fails in practice because:

1) The Qdoba store was pretty much empty

2) His friends were paying customers at Qdoba and he was joining them

Customer Service at Chipotle

This past week, I went to the new Jimmy John’s which is a few doors down from Chipotle. Two of my buddies were at Chipotle, but I had eaten there for the past 4 days and didn’t want to make it my 5th day. So I decided to mix things up with some Jimmy John’s. I joined them shortly after at Chipotle and sat down with them in the middle of a really crowded store. The manager at the cash register watched me walk in with Jimmy John’s in hand. She smiled and didn’t say a word. Someone even came over to our table and wiped it down before we started it eating. They didn’t say a word about my Jimmy John’s sandwich either. In fact, the manager even gave us free soda cups.

Conclusion

Beyond the obvious incredible taste of Chipotle, they are going to win because they care about the important things — like not annoying loyal customers who may not choose them on a particular day. Qdoba is completely empty everyday I walk by there and I fully expect that trend to continue.

The book chronicles David Einhorn’s drawn out battle against Allied Capital, a company that David Einhorn publicly shorted. What starts out as small balance sheet discrepancies turns into a drawn out investigation which results in mountains of evidence of fraud in Allied Capital subsidiaries, government (SEC) incompetency, and an alarming vilification of short sellers. The book is really one mans journey for truth and fairness. In fact, he donates all of the book profits and all proceeds from the short sale of Allied Capital to charity.

It’s truly scary to read about how failure riddled the SEC is, how Allied Capital was able to lure away government lawyers to work for them as lobbyists, how Allied Capital management consistently showed a disregard for the truth and refused to own up to mistakes/problems. Allied Capital even wire tapped David Einhorn’s phones! The sell-side analysts show a complete disregard for mounting evidence against Allied Capital and constantly shove their “buy ratings” to anyone who will listen. I think the part that really got me was the lack of serious investigations at the SEC and the rampant bureaucracy at other government branches involved in the book. He also writes about the financial media’s lack of concern for the truth. Basically, he shows the world the true dark side to the financial world. 

This book reads like a detective mystery book. Only it’s all real and backed up with loads of publicly available documentation. It’s a fantastic insight into the hedge fund world, Wall Street, and the government. And best of all the book proceeds and the killing that he made from shorting this fraud of a company are going to fund some great causes.

I can’t recommend this book enough.

Tomorrow marks the end of football season. It’s definitely an exciting day, but it’s also a bit sad because I have no more football to look forward too.

It’s definitely been a weird post season for me. I don’t remember the last time that the New England Patriots didn’t make it to the playoffs, so I didn’t really have a team to follow. I must say it’s very rare for a team to go 11-5 in the regular season and not make the playoffs, but things happen and you can’t always win.

I’ve completely stayed away from reading or listening to sports media these past few weeks, as they tend to hype things up too much for my liking. That being said, I’m pretty excited for the upcoming matchup between the Pittsburgh Steelers and the Arizona Cardinals.

Game Thoughts

The Cardinals have an outstanding offense with an absolutely dominant trio of Wide Receivers. Larry Fitzgerald is absolutely unreal in the way he goes up and fights for the ball. Anquan Boldin is a fearless receiver who plays with so much heart. And Steve Breaston has developed into a fantastic 3rd threat. It’s unheard of for a team to have three receivers go over 1,000 yards receiving in a single season, but the Cardinals did it this year. [Note: Only 5 teams have ever done this in NFL history according to WikiAnswers]. I’m not sold on the running game, but Edgerrin James didn’t take much wear this season as he mostly sat on the bench or played back up — he’s been playing with a lot of energy and heart lately. I also like the Cardinals defense lately and they’ve been playing exceptionally well. And of course, who can forget Kurt Warner. This guy has been through the ringer of the media and has had quite a rollercoaster ride after the St. Louis Rams. It’s great to see him have another shot at a title. He’s a fierce competitor and can make some incredible throws, despite his age. If the Steelers can pressure him and get him moving outside the pocket, he’s going to have a really rough day, but the Cardinals have had fairly good pass protection this year.

The Pittsburgh Steelers obviously have their famous ferocious defense playing really well. They’re going to pressure Warner all day. I don’t know how they’ll go about covering the receivers, but I imagine they’ll blanket the secondary and force the Cardinals to run the ball. I also think the Steelers will lean heavily on their running game to eat up the clock and slow down the Cardinals fast gunning offense. I’m a bit concerned with Big Ben’s propensity for holding onto the ball for too long and trying to make big plays. He usually takes a beating and puts himself in some bad situations. Their receiving game should do well with Hines Ward back in the lineup and the deep threat Santonio Holmes on the other side. I expect a lot of dump offs to the tight end Heath Miller — Big Ben loves him.

Market Analysis

As always, I go back to my gambling roots and pull up the prediction market numbers on matchbook.com. The line is -7 +115 on the Steelers, +7 -116 on the Cardinals. That means betting $1 on the Steelers will win you $1.15 if they win by more than 7 points. Or betting $1.16 on the Cardinals will win you $1 if the Cardinals lose by less than 7 or win outright. So the market is showing that it expects the Cardinals to either lose by less than 7 or win outright.

In terms of betting on just an outright winner, the lines are -225 Steelers, +222 Cardinals. Put another way, a bet of $2.25 wins $1 if you bet the Steelers to win and they do win OR a bet of $1 wins $2.22 if you bet the Cardinals to win and they do win. Doing some quick gambling calculator math tells us that the market’s Implied Probability for this game is about a 69% chance that the Steelers win and a 31% chance that the Cardinals win.

In big games like this, it’s really hard to find a favorable betting line (too much attention and money go to the game), so the best you can do is check the market action around 5-10 minutes before kickoff. You may or may not see big chunks of money moving into a particular position. That’s often where the sharp money is going, and it’s a decent bet usually if you can catch the line at good odds.

I love rooting for the underdog, the Cardinals offense is really exciting to watch, and I think Kurt Warner is an incredible person to go through what he did and still make it out on the other side.

Go Cardinals!

Be back soon.

Niche marketers and people who are interested in creating products for global consumption need to figure out how to either target products individually to local markets or create products so ubiqitious that they are accepted across all cultural norms.

If we look at these titans of industry, what can we learn from their captains who served under them?

Are most of these captains, people who themselves are driven to eventually be the head leaders or are they perfectly happy with being just captains? 

What makes a great #2 as opposed to a #3? Can there be more than one person at #2?

What makes a great #2 as opposed to a great #1?

How does the #1 deal with a #2 who wants to be #1? Is this to be encouraged or gaurded against?

Now here’s the best part of the contract he signed. His contract stipulates that he can walk away in the event that the majority ownership changes. Stephen Ross is expected to exercise an option which would increase his ownership of the Miami Dolphins from 50% to 95% in early January. Bill Parcels gave himself an out. It was widely known that there was takeover interest in the Dolphins and Bill came into a messy situation. If he fixed that situation and built up a great team, it was expected that new ownership could take control. And that means he can opt-out of the remaining 3 years, grab his $9 million, and head on to whatever he wants to do. Bill Parcels captured the upside value of what he brought to the table.

Always proud of his persuasive powers, Rockefeller took special pleasure in wooing opponents whom he had learned to appreciate by tracking their ploys against him. When a lawyer named Virgil Kline won two lawsuits against him [Rockfeller] in the 1880s, Rockefeller invited him to his office. “Mr. Kline,” he said, “you have given us a good licking. Now I would like to have you come and work for me.” Kline agreed and became a long-standing member of the Standard Oil legal staff.

What i can say is that I think Out of Home entertainment is becoming about far more than movies. HDNet was the first to do a live 3D broadcast to a theater, and we will continuing trying to expand that business, along with 2D out of home. Bits are bits, and just like you can make them smaller, you can make them a lot bigger and more interesting. (from SIA)

It’s cool to think of the possibilities of moving beyond just watching movie showings on the big screen. Imagine going to watch the Superbowl with a group of friends or big boxing matches, etc. This is already being done, but from the surface, it appears that Cuban is trying to make this bigger and more mainstream. It’ll be interesting to see how this develops.

As always, the greater the tumult, the cooler Rockefeller became, and a strange calm settled over him when his colleagues were most disconcerted. When pushed, he always stood his ground. The SIC episode showed that Rockefeller was now developing exalted faith in his own judgment. Like all revolutionaries, he saw himself as an instrument of higher purpose, endowed with a visionary faith. He knew that his actions would at first be resisted and misunderstood by the myopic crowd, but he believed that the force and truth of his ideas would triumph in the end.

Introduction to Twitter

Twitter started out as an internal communication tool used by staff at a California startup in 2006 and in about two years has grown to 3.2 million registered users. Twitter is a social network based around micro-blogging where users can post and read text updates/messages of up to 140 characters in length to and from other users. The service creates a publically indexed/searchable (although privacy settings can be used) depository of status updates or ‘tweets’ which can be sent and received through the website, through mobile devices, through external websites, and other access points.

The success of Twitter lends itself to excellent analysis under the Rogers innovation framework. Furthermore, Twitter is highly flexible and adaptive to re-invention from within its own community. Despite having many excellent traits which make it spread and stick, Twitter still faces some issues before it reaches mainstream adoption.

Relative Advantage

From a relative advantage perspective, Twitter is a tool for instantaneous blogging or ‘micro-blogging’.  As compared to traditional blogging with longer posts and more up front effort, Twitter updates are fast, short, and require minimal effort. Twitter updates may have less content than regular blog posts, but it’s a lot easier for most people to write a 140 character update than it is to write a 500 word blog article. Twitter also offers up significant social capital incentives. First, users can gain social currency to use outside of Twitter by ‘following’ updates from famous opinion leaders and or trend setters like Dave Matthews or MC Hammer, both of whom are on Twitter, to use for purposes like gossip. Furthermore, this instant dissemination of information means we can learn about news much quicker through Twitter than through traditional news sources. For example, the devastating Chinese earthquake in 2008 broke through Twitter like wildfire before even the US Geological Survey could announce it and about an hour before CNN reported it! This turns Twitter into an instant communication channel.

Social Status Effects

Additionally, users can quickly earn social currency within the Twitter community by sharing interesting links or posting valuable updates. The fact that ‘followers’ can ‘un-follow’ you creates a negative incentive to spamming or sending out high noise updates of little value to your ‘followers’. The ‘follower’ structure of Twitter also creates a hierarchy of social proof on the service. The profile design displays a publically available ‘follower count’, which tracks how many users subscribe to what you say. Psychologically, users want to attract more followers because it builds their social proof and makes their perceived importance higher. This incentivizes users into self-promoting their Twitter page to gain more ‘followers’, which in turn promotes Twitter for free through explicit diffusion. This is why people will add links to their Twitter page on their business card, e-mail signature, blog page, business profile, etc. This turns into a self-repeating process where new users also want to gain ‘followers’, so they continue the cycle of self-promoting their Twitter page to friends, family, business contacts, etc.

Compatibility with Existing Norms

In terms of compatibility with existing ideas and experiences, Twitter blends several concepts with which people were already highly comfortable with before Twitter: public connectivity/blogging, short messaging, and status messages. Regular blogging has been popular since the late 1990s and many people are comfortable sharing themselves publically as well as connecting to others through social networks like Facebook or MySpace. Similarly, in today’s tech savvy era, people are well versed in sending short SMS/text messages or e-mails. Lastly, services from IRC chat rooms to Facebook have let users specify their status with messages as simple as “Away.” Twitter combined these concepts to let people post short, public, messages in the form of status updates, which makes it easier for new Twitter users to feel comfortable right away.

Complexity and Trialability

When examining complexity, Twitter offers bare bones simplicity which lowers barriers of use and focuses users on continuous use. The minimalist design of Twitter stands in stark contrast to feature heavy social network sites like Facebook and MySpace; the users can’t do much beyond updates than posting a profile picture and a couple lines of bio information. This makes it more potent because users are never distracted by alternative functionality other than posting status updates and all interaction with Twitter occurs around this one core feature/purpose.

Twitter’s ease of trialability attracts new users and makes it easy to play with.  Signing up for Twitter is free and takes under a minute. Each update or ‘tweet’ can take seconds. Users can update from multiple access points like from their mobile device, on instant messenger, or through the website. These factors make Twitter very easy to try and come with no real costs.

Observability

Additionally, Twitter’s highly observable widgets across the web have fueled the popularity of the service. For example, users can put a Twitter widget on their personal website or blog or Facebook profile, which will then display a feed of Twitter updates from their account. This lets that user’s friends stay up to date on their updates, but the real benefit here is that a user needs to only update their status in one place, Twitter, and it will be shown across any web service that they choose to integrate Twitter widgets on. This in turn promotes Twitter through implicit diffusion and makes it more observable. Some conferences use large digital screens to display live streaming updates from people who are currently Twittering at that particular conference. This lets users connect to other people at the conference and form communities. By allowing cross-functionality across different mediums, Twitter lets potential users learn about and observe Twitter in action through already popular mediums like blogs, social networks, and conference meetups.

Re-invention of Uses

The uses of Twitter are countless, which leaves it open to constant re-invention from its users. NASA used it to give coverage of the Phoenix Mars landing and California has used it for emergency forest fire information dissemination. Twitter is completely open to re-invention and multiple uses among people. Also, Twitter has built a vibrant developer community by opening their API to any outside developer. There have been hundreds of web applications built on top of Twitter that leverage the core functionality of Twitter, but give users different features. For example, stocktwits.com tracks real time stock discussions on Twitter. This lets thousands of passionate developers act as an outsourced R&D team for Twitter for free. In return for benefiting users with new verticals and re-invented uses of Twitter, developers get free and virtually unrestricted access to the data flow on Twitter’s API. In the end, all of these re-inventions create more individualized benefits for users and add passion that supports Twitter because the innovation comes from within the user community.

Problems and Future

One of the biggest problems that has prevented Twitter’s mainstream breakthrough is that the core users are in the niche geek crowd. Users who initially sign up for Twitter have no followers, which may make the service useless for people who either a) don’t already have friends on Twitter or b) don’t have an outside source for attracting followers (i.e. like a blog or friends who use the web actively). It’s harder to jump in, unless you already know other people because you have to work to build up the community and social proof. Twitter could provide a friend suggester (like on Facebook) or they could promote new users on the homepage to give them exposure. Another problem is that Twitter faces problems with credibility because it’s not always possible to tell if people are who they claim they are and people may try to disseminate false information. Twitter just needs to aggressively keep out spammers and respond promptly to imposters.

Overall, I expect that Twitter will break through to the mainstream as more people outside of the tech scene use it. Twitter will evolve into a new communication channel used across the world that will make public many private conversations that people have on messengers, chat, and e-mail. It will also give us access to instant news and provide trackable public sentiments. I think the power of Twitter has yet to be fully realized and I’m excited to watch it further develop.

As one early associate remarked, “The only time I ever saw John Rockefeller enthusiastic was when a report came in from the creek that his buyer had secured a cargo of oil at a figure much below the market price. He bounded from his chair with a shout of joy, danced up and down, hugged me, threw up his hat, acted so like a madman that I have never forgotten it.” These isolated joyful outbursts only underscored the usual constriction of his personality.

 

We’ve indulged ourselves for too long with tax cuts that we can’t afford, bailouts of auto companies that have become giant wealth-destruction machines, energy prices that do not encourage investment in 21st-century renewable power systems or efficient cars, public schools with no national standards to prevent illiterates from graduating

When you read this list it all seems so clear and obvious. We’re spending money we don’t have, bailing out companies like GM that are absolute FAILURES, and not teaching America’s children the skills they need to compete.

immigration policies that have our colleges educating the world’s best scientists and engineers and then, when these foreigners graduate, instead of stapling green cards to their diplomas, we order them to go home and start companies to compete against ours.

This is something I see at Penn/Wharton all the time and it really bothers me. Some of the smartest people I know at school are from foreign countries. Yet why is it that after 4 years of UPenn, they are not allowed to easily stay in the United States? It makes absolutely no sense. We are shooting ourselves in the foot and sending some of the best talent in the world back abroad.

To top it off, we’ve fallen into a trend of diverting and rewarding the best of our collective I.Q. to people doing financial engineering rather than real engineering. These rocket scientists and engineers were designing complex financial instruments to make money out of money — rather than designing cars, phones, computers, teaching tools, Internet programs and medical equipment that could improve the lives and productivity of millions.

It’s true. The incentives to go into banking and finance have been very large and really smart people have flocked into this field. Yet these institutions create nothing of real tangible value to society.

Generally, I’d like to see fewer government dollars shoveled out and more creative tax incentives to stimulate the private sector to catalyze new industries and new markets. If we allow this money to be spent on pork, it will be the end of us.

Handouts are not the solution. Incentives to build are.

Well just yesterday, I learned that 50 Cent has a new reality TV show on MTV and I decided I’d check it out. MTV is with the times and they offer free streaming full-versions of the show online here. It’s a bit cheesy (in a reality TV sense) and the contestants aren’t particularly captivating (that’s probably why the show itself has gotten poor viewership), but it’s cool to see Curtis Jackson show us his business side. Typical storyline: 14 contestants compete for $100k investment from Curtis Jackson into their business plan. Think of it as “The Apprentice” with Donald Trump replaced by 50 Cent.

Each episode has a “lesson” or “code” that Curtis teaches to the contestants on the show.

Here’s a quick run through the lessons so far with some thoughts on each:

1) Choose Your Crew Wisely

The people who you surround yourself with are paramount influences on your success, attitudes, and general outlook on life. At the end of the day, we have a choice on who we spend our time with. The key is to choose good people who you trust and like. Good people win out eventually. Surround yourself with positive, trustworthy people. This isn’t just important for business — it’s important for life.

2) Turn Shit Into Sugar

This episode had contestants literally shoveling horse manure in a competition. Some of them were afraid to get their hands dirty. If you want to win you can’t care. You have to be willing to get your hands dirty and get grimy. Those opportunities that are particularly messy also have less competition. The key is just getting in there and getting it done. In real terms, that means being on the front lines of your business.

3) Truth = Money

I loved this episode. 50 Cent explains to them that the real key is being truthful, honest, and genuine to who you are. His example is that people like his music because it’s real and it’s who he is. This example generalizes very well to the business world where you will run into endless characters who make grandiose claims, tell a lot of stories, and are fake. There’s a fine line between business development/sales and fake behavior. The key is not succumbing to outside pressures to act big/powerful. The real value is staying grounded in who you are and acting truthful in all your actions. People are not stupid. Eventually people will figure out who you are and what you’re saying. Lies and exaggerations will always catch up. Ask Bernie Madoff. 

4) Respect the Hustle

This episode is really about getting out there and selling. 50 explains that if you want people to buy from you, you have to connect with them and put in whatever energy it takes to get your work done. Hustling takes many forms, but it really just boils down to going 110% in whatever you do.

5) The Hustler’s Eye

This rule isn’t as self explanatory as the other rules, but it deals with seeing people/things for what they really are.  In some ways, this is really about being able to spot people who violate rule #3 and try to mess with your perceptions. You need to be able to make your own conclusions and judgments. Don’t let other people shape your reality for you.

6) Use Your Cents to Make Change

Probably something that’s particularly relevant during the holiday times, this rule is about giving back. 50 Cent is involved in various charity efforts and he teaches the contestants about giving back to the community. Pretty straight forward.

So if you don’t already have a blog, go get one on WordPress or Blogger. It takes about 30 minutes to setup and it’s a fantastic thing to have. It’s never too early to build a blog and it’s a great thing to build before you really need to use it, because once you do need it (i.e. once someone searches for you), it’s already too late.