Posted by: Orrin | February 26, 2010

RE: Matt Mireles’s NYC vs Silicon Valley

Mark Mireles blogged about whether NYC has the appropriate investors for tech companies. Here’s an excerpt and link:

But as a first-time founder trying to raise capital and achieve product-market fit, the question for me is not “Is NYC hot?” or even “Is NYC becoming a better startup hub?”so much as it is “Is NYC the best place to locate my startup?” And on that question, I’m not sure the answer is yes.

via www.metamorphblog.com

If you go through his blogs he covers multiple issues comparing the culture of the financial centre of the US and the technology centre.

So lets go down the list that Matt talks about.

Raising Capital

People who come from financial backgrounds are the worst investors on the planet. A friend of mine was talking to investors looking to invest in a solar cell fab from scratch. For some INSANE reason, they wanted to be able to triple their investment within 2-3 years. Typically, the areas they want to invest would be the so called hot ones such as green tech, cloud computing and social media.

a) Angel Investors

You can’t find them because in financial centers. Cash is king and cash now is god. People want returns ASAP so they can invest in the next “big” thing which the market has already developed (think the ever growing amount of social sites).

b) Few Bullets

In general from what i’ve found is that the culture developed in these financial centers are incredibly unhealthy; I want results and I want them now. As most entrepreneurs are aware, the development/lead time is an incredible long process and inevitably you won’t be delivering every month.

c) Hard to create competition

At least within the Asian markets, the majority of VC’s are located in Taiwan, Hong Kong, Shanghai and Beijing. From my understanding (read guesstimate) a lot of the VC’s are tweaked to operate the same as bankers.

d) Lower Valuations

I don’t understand why the hell they want more equity within a business? In fact it’s the norm over in asia for a VC/Investor to take over 50% of shares to protect their interests. Mark Suster advocates that a VC shouldn’t take too much equity as it gives the founder less incentive to give it his/her all.  It breeds the mentality that the founder is just another employee of the big VC’s company

e) Speed

Early bird catches the worm pretty much sums it up. You better hope your competitors aren’t running cause if they are, the few days/weeks/months you waste could be the “fun” part.

Getting Talent

Notice how the majority successful people used to be poor? Now shift that to engineers who take fat paychecks home from giant financials. Most people want that stable income and the safe job. But the dis proportionality of the current system causes too much imbalance in the system. People who used to be key personnel become overheads. And everyone knows startups don’t need overheads.

It’s kind of like the rich kid at school who expects everything to be just the way he wants it. Well listen up buddy cause life’s tough.  If these fat cats are down and out, it’s in their best interest to take the pay cut cause who else will pay them? Beggar’s can’t be choosers.

Financial’s were never meant to be investors and if they’re trying to screw you over, tell them to take a hike. We don’t need their stinking money!!!

Posted by: Orrin | February 26, 2010

Democratization of Power

Craig Hunter wrote:

A number of prominent academics andventure capitalists, perhaps even our current Secretary of Energy, have argued that existing flat-plate PV technologies are a dead end. According to this group, PV is only relevant if it can meaningfully contribute to solving global warming, which in turn means solar energy must be able to supplant fossil fuels for large-scale power generation in both developed and developing economies, particularly India and China.

Framed in this way, the litmus test for any solar energy technology is its ability in the next 10-20 years to be deployed in hundreds of gigawatts per year, delivering electricity at $.05-.07/kWh, even in areas that aren’t very sunny. Given the load factors of PV installations, not to mention the possible need for storage, we need to consider a target installed system price of no more than $1/Wp

via www.greentechmedia.com

The issue here is that many people are putting too much priority on the cost of the cells. How long to payback? What is the efficiency? What’s the $/Wp?

My stance is that solar is not the be all and end all. In fact i foresee the future energy market share to be about 50-70% Nuclear and the rest a combination of hydro, wind, solar and geothermal.

The focus on cost means that there is an expectation for solar to completely supersede fossil fuels. This in my opinion is unrealistic in a few ways. Firstly the amount of area to cover to generate the amount of energy required by earth today would be so much that we probably would need a few earths. Secondly at our current production growth rate, by 2015 we will probably have about around 20GWp production per year.

If we rely on scale of economy to solve this problem, we are setting us to crash and burn epicly. If you look at the current producers, the majority are still using the screen printed solar cells. This technology comes from the semiconducter industry years ago, yet in 2010 still in use. If we truly want to succeed, investment in research will be key.

There are currently numerous alternate options such as CIGS, CuS, thin-filmed etc. etc. Some may succeed, some won’t. I obviously have my preferences but in anycase these guys will probably do well in the long term cause they are investing in the future.

In all honesty applications of solar should be the most focused in this day and age. Where before it was too expensive except for governments to buy, consumers are investing more and more to reduce their carbon footprint.

But as many have pointed out, solar power gives the consumer the power, pun intended, instead of completely relying on the power company. It gives consumer choice. Just as ebay stood for democratization of the marketplace, solar really stands for democratization of the power source. And really at the end of the day, this is a powerful thing

Posted by: Orrin | February 24, 2010

What’s Stopping You When Your Young?

The majority of business owners i have met are all part of the grey hair brigade. Many have years of experience within the industry, tired of working for the man and have decided to quit and become their own boss. When this sort of thing happens, people give that man a pat on the back, thumbs up and all the moral support required. Yet when a person who is young, who may or may not have finished his/her education decides to start a business, all that seems to exist is opposition.

Typical examples are:
- Your too young!!!
- You don’t have enough knowledge to start yet.
- It’s too hard
etc. etc.

None of these are good reasons to why you shouldn’t strike out on your own when your young. In fact i say its better to fail earlier in life so that you have time to pick yourself up again. Obviously we shouldn’t be aiming to fail because that would be counterproductive.

In any case there are many cases where young people have been incredibly successful including Mark Zuckerberg, Bill Gates, Steve Jobs and many more. One of the biggest arguments is that they are the top 1% and how could you compare? (Common criticism for myself as well). But if you really dissect the issue, had they not struck out on their own at that time, they wouldn’t be as famous or as 1 percenty as they would be in this day and age.

The criticism you receive generally is from the people who require security which in itself has no problem. Taking home a paycheck every month (week if you live in Australia) is what we aspire to (or told to).

Ultimately without testing out the water, you won’t know how cold or deep it is. If anything the experience and knowledge you gain from the process is much more rewarding than anything you can learn in industry or at school. To quote Guy Kawasaki, “don’t let the bozos get you down”. There are many people out there who think everything cr*p and any idea is doomed to fail. Be the oddball and stand out and chase your dream!

I recommend reading Tina Seelig’s: What I Wish I Knew When I Was 20 Years Old

Peace

Posted by: Orrin | February 24, 2010

Murray Gell-Mann Conference

So today is the official opening ceremony of Murray Gell-Mann’s birthday conference held at the Nanyang Technological University of Singapore. 4 nobel prize winners attended including Prof Gell-Mann, Gerard t’Hooft, Kurt Wilson and CN Yang. Countless other physics professionals attended the conference including my old physics lecturer Rod Crewther.

For those of you who don’t know who Prof. Gell-Mann is, he won the 1969 Physics Nobel Prize  for creating a system of identifying subatomic particles. His current partner Mary Mcfadden (fashion designer of some sorts, apparently the prestige of the fashion world) also attended. For more information click here http://bit.ly/bpxh2S

The event began with Prof Kwek Leong Chuan introducing the guest-of-honour who ironically was not Prof. Gell-Mann, but the president of NTU, Dr Su Guaning. His talk was a formality which bridged across to the very interesting Bertill Andersson. His humorous look at the research investment climate of Singapore was very well received by the audience where he finished of with a quote: “There is two types of research: Applied research and yet to be Applied Research”

From thereon, Mr Andersson acted as facilitator for the ceremony. In total there were 5 speeches given, being: Francis Yeoh, Teck Seng Low, Choy Heng Lai, Harald Fritzsch and George Zweig.

The first 3 talks revolved around key research institutes within Singapore, and the overall mission. Harald gave us a detailed scientific biography of the life of Murray Gell-Mann. Finally George Zweig ended with the aces.

I personally found Zweig’s to be most enjoyable with the perfect blend of humor and technicality. Through his talk, I received a glimpse of Prof Gell-Mann’s personality, generally comical much to the delight of the audience. In fact halfway through Zweig’s talk, Gell-Mann felt the need to interject over the definition and context of the word “real” !

All in all a certainly memorable and enjoyable event.

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