Last week, Fred Wilson from Union Square Ventures wrote about Kickstarter's transformation into a Benefit Corporation in his blog. A Benefit Corporation, or B-Corp integrates social causes into its objective, similar to Non-Profits, but remains nearly all the other features of an C-Corp or S-Corp, and can choose to be taxed as either.
Of course, the question is, why would corporations need to integrate a built-in social cause into its objective? After all, part of the vision of Founders often sets the corporate culture and objectives, and many C-corps naturally incorporates the triple bottom line into their ideology.
However, there are some legal arguments that could be made that provide reasons why a B-Corp is much more advantageous for start-ups that a traditional C-Corp or S-Corp. One primary reason is that it shields the Directors from lawsuits by shareholders and third parties. I made the following chart here as a general guide.
One argument for B-Corps is that Founders/ Directors can make decisions on liquidity, acquisition or other fiduciary matters in which they are shielded from potential lawsuits by shareholders. The most cited case is when Ben & Jerry's had two offers of acquisition- one from a similar company with the same environmental objectives, and the other higher offer was from Unilever. Eventually, Ben & Jerry's chose to be acquired by Unilever because of fears of impending lawsuits against the Directors had they chosen to be acquired by the other company with the lower offer; also their board had a legal responsibility to their shareholders to choose the higher offer despite the fact that the Founders did not want to sell the company. Truth be told, although this is an standard example, in a lot of cases, I think it is more common that the CEO is blamed then fired rather than a lawsuit against all the Directors. Clearly this was the case when Microsoft wanted to acquire Yahoo! for $47 billion and former CEO Jerry Yang refused, which caused much criticism and eventually led to his dismissal, or rather, his "resignation".
In either case, a B-Corp is clearly more advantageous than a traditional corporate model because it effectively shields the Founders and Board members from making decisions that might not be in the best financial interests of the company, but that rather takes into account the social responsibility of the company. (I have to add a note here that despite Ben & Jerry's acquisition by Unilever, and its transformation into a B-Corp in 2012, that the acquisition itself wasn't such a bad thing after all since Unilever kept Ben & Jerry's mission in tact.)
In the UK, the CIC (Community Interest Company) is often compared to the US B-Corp, however if we take a closer look, the CIC is actually closer to the US 501(c)(3) Non-Profit than a B-Corp. The CIC is something of a hybrid between a traditional UK Charity and a Limited Liability Company. However, the CIC allows Directors to have a salary whereas in a Charity, the positions of Directors are entirely voluntary. Also the legal entity of a charity is the same as its members and Directors, so that Directors can be directly sued by third-parties, although these sorts of lawsuits against Charities in the UK are quite rare, compared to the US, where litigation runs rampant in every sector under any possible circumstance.
In my humble opinion, if entrepreneurs or Startup Founders with social motivations had to choose between a CIC or a regular Ltds I think it would be more advantageous to choose the latter. Although CICs are a hybrid between Charities and Ltds, there is a maximum cap on dividend payouts and profit distribution that would not be appealing for investors. In addition, in a traditional charity, tax relief can be applied to donations, whereas the CIC is considered similar to a Ltd in structure, which puts it into a unique position where it cannot benefit from private investors nor have the same advantages as charities by giving tax relief.
Although the Benefit Corporation structure is one that has its roots in social causes, so do Non-Profits, and there have been mass reported cases of fraud and misuse in regards to the latter (eg, American Breast Cancer Foundation, United Way, Kids Wish Foundation et al). The list of corrupt Non-Profits in America is disturbingly unending, despite the fact that there are many (such as NPR) that are highly regarded.
I think one should keep in mind that although the B-Corp should ideally have a Board of Philosopher Kings, who are collectively working towards the common good of the people and the environment, that any company can mask itself as mimicking those same causes, whilst taking advantage of its position of being effectively shielded by lawsuits.
UK charities, on the other hand, because they have such stringent fidiciary reporting measures and voluntary Board of Directors, do not suffer from the corruption that high profile US Non-Profits are known to have. In fact, I myself, had such bad experiences with US Non-Profits that I often become suspicious when someone tells me he or she is starting a US Non-Profit or some sort of "Foundation". Of course, there are many good Non-Profits as well, and I am probably not doing them any justice in this entry, but generally I find 'philanthropy' in the US often has a double-edged sword, and one that is highly motivated by profit. Many people may not be aware, but the Gates Foundation has often been criticised as a shell corporation and acts as a for-profit entity.
Currently there are approximately 1,500 B-Corps in the world, with over 10,000 CICs in the UK and 1.5 million Non-Profits registered in the US. Despite whichever corporate designation that startup Founders may use, ultimately, it is up to the Founders and Board of Directors to drive the vision, not a company designation. Let's hope that B-Corps can overcome the corruption that has plagued many US Non-Profit entities, and be able to do the kind of incredible work that many charities have done in the UK, whilst still being profitable entities that are interested in the triple bottom line.
By Sierra Choi
Everyone has an opinion about the development process. I certainly wouldn't consider myself an expert, although I was very much involved in the software development process of a previous startup I worked at that developed KidsApps. And in my humble opinion, SCRUM, agile development and lean methodologies do not work for mobile apps, SaaS applications nor any applications dealing with B2C.
In fact, a lot of B2C startups focused on these methodologies have often failed even if they win public approval or gain a large amount of traction. In my previous KidsApp startup, we had more than 4 million downloads, but we were unable to retain that user base despite the fact that we utilised agile development and lean methodologies to give people what they said they wanted.
SCRUM and agile development was prominent in 1980s corporate Japan, when there had been a strong separation of roles: product owner, developer, user, investor etc. In this day and era, in the startup world, all these roles merge, and often people have more than one role in the development of a company.
And the truth is, people don't know what they want. If in doubt, check out all the Kickstarter campaigns revolving around software development or mobile games. There will be a critical mass of people donating their funds to projects that are based on user popularity, but after the launch, the enthusiasm wanes. Why? Because people think they want something, when they really want something else altogether.
Everyone in the 90s wanted a Blackberry with a miniature foldout keyboard, but they were in denial of what they would actually come to desire: the touchphone.
I think the most important aspect of development need to satisfy these following requirements:
1) Easy to use, no bugs, fast to download, doesn't lag (we are living in an era where people have short attention spans)
2) It makes my life easier somehow either by saving time to do something, organising something or making something convenient without having to put in a lot of effort
3) It piques my curiosity. (And this is the most important). It is something that I need to access again and again, and not an unsavoury one-off download, or join-then-forget phenomenon. I want to access it, because it has something I continually want and need that satiates my curiosity.
SCRUM taskboards may address #1 and #2, but it rarely addresses #3.
If we look at OUYA, as an example, a mobile gaming company that had successfully closed $15 million in funding led by Kleiner Perkins in 2013 only after they gained $8.6 million on Kickstarter by fans who loved the idea of their open source mobile gaming platform, we have to wonder what went wrong?
So, why did they fail? Because despite the fact that people had funded their product, that isn't what they actually wanted. People didn't want another console like X-box or SonyPlaystation that had a bluetooth wireless feature. What people wanted was speed and engagement. OUYA had neither. Bluetooth is super slow. No one is going to want to play games on a console that has a slow lag time, even if it is wireless, and has many samples of different games. What people want is a continuous, engaging narrative and speed.
Although I don't agree with many of Peter Thiel's ideas, I agree with him and think that lean methodology is actually antagonistic to product development. To use the anology of film, let's pretend you are making a film, and you have 20 investors tell you to change a scene because it's not what the audience wants. What you then end up with is most likely a low-par crappy romantic comedy or soft core porn film that probably isn't very funny nor sexy. That is what I consider to be most software products or apps on the market today. Something I don't really need nor want, but may download it just once out of market hype. (eg, Snapchat).
I also think that the reason why there is a high turnover of software development talent is that they are rarely involved aside from the coding process. Obviously if you have a bunch of twenty-something software engineers who are just told to code this/that/frontend/backend/ without giving them any sort of creative input nor access to analysis and involvement in the process of software development, they will get bored and leave, or simply do the most bare minimum to get by.
And the truth is, the audience is never a trustworthy source of what they actually want; however, the audience is intimately connected to the vision of the director, and when people create something completely unexpected, it naturally becomes a black swan phenomenon. That is why we love touch phones, although we never imagined we wanted touch phones in the late 1990s.
Founders have to be ahead of market research and market analysts. That is why Founders such as Etsy's Former CEO Rob Kalin and Airbnb's Brian Chesky knew exactly what they were creating, even if, at the time, people thought what they were creating was crazy and no one would want what they had been attempting to do.
As an artisan, Rob Kalin understood that our contemporary world was based on factory-mass produced mentality, and he wanted to create a marketplace for lesser known artisans around the world. As an artist and designer, Brian Chesky observed that most people couldn't afford expensive resorts for holiday stays and opened up a revenue stream VCs could not understand at the time. Steve Jobs created Apple products with superior audio and visual technologies with a focus on art and design because he understood Microsoft and other PC makers had long given up on innovation and were focused on cheap, bare minimum products for high margin profit.
If we examine other sectors, such as medicine and science, we see a similar kind of methodology: Elizabeth Holmes took 10-15 years to develop the core products at Theranos, a blood testing company that only needs a few drops of blood (instead of an entire vial or two) to transmit important genetic data via wireless technology.
Founders are always ahead of the trend of what people want, and it is not merely about convenience, SCRUM and agile development nor about crowdfunding popularity.
Founders are naturally stubborn, and persistent. If they all gave up so easily at the first sight of criticism, then they would all become cubicle drones. That's why I think it's important that investors support the vision of the Founders, because it is that long-term vision that will gain the greatest return on investment.
Lean methodology, I find (almost always), is for people looking for a quick profit.
By Sierra Choi
There has been much debate about pay discrepancy between men and women in the US that has fueled many different arguments with no viable solution.
In the UK, as I wrote in one of my previous posts, there are more women in management positions, and on the Board of Directors for companies than any other nation in the world. In fact, the UK has a history of female leadership and empowerment. However, as I was researching the payscale for unicorn companies located in London, I found an peculiar occurrence.
Monitise is one UK's very first unicorns, currently its valuation is over £1 billion and launched its IPO in 2007 on the London Stock Exchange (LON:MONI).
Its Chief Executive Officer Elizabeth Ruse recently quit "for personal reasons" a couple of weeks ago. However, a look into the payscale at Monitise shows an alarming disparity.
In the fiscal year 2014, CEO Elizabeth Buse's total annual compensation was just £42,000 whilst her male colleagues, Lee Cameron (Executive Director) was £663,000; Brad Petzer (CFO) £290,000 and even the Technology Advisor Michael Keyworth was £352,000
Although Ms. Buse started at Monitise in June of 2014, which is roughly half of the year at the company, the annual compensation seems exceedingly low in comparison to her management colleagues whose compensation was approximately 350-650% more than her meagre salary of £42,000. In addition, she received a total of 5 million in total stock options whilst 3 out of 4 of her male colleagues in executive management had received between 10-11 million.
Another eyebrow raising story that came out two weeks ago around the same time was when Eileen Burbidge, VC at Passion Capital and one of the most prominent figures in the UK tech scene disclosed that as Skype's 3rd employee, she was the only person on the management team who did not get paid for 8 months.
Although Ms. Burbidge successfully pivoted her career into the world of venture capital and now is sitting on the Business Advisory Panel for David Cameron, in addition to being one of most powerful women in the UK tech scene, I think it's fair to say that these sorts of injustices eventually come to light, even if Ms. Burbidge has finally talked about this publicly a decade after the fact.
This makes me wonder however, if perhaps one of the reasons Ms. Buse left her CEO position at Monitise was simply because she was extraordinarily underpaid in comparison to her male colleagues? Although I am unaware of all the circumstances of this particular situation, and can only speculate on information that is available to the public, I think in my humble opinion that this sets an extremely negative climate for female C-level executives in the UK. Monitise is one of the first UK unicorns to have launched its IPO, yet by taking a cursory look at its executive management payscale, one can only wonder at this austere deviation away from fair pay for women.
By Sierra Choi
As an update, I had written a couple of weeks ago that the stock market will be entering an area of consolidation. So far, it held up to my predictions and have held the support level of 181.31 for the SPY. As I mentioned previously in another post, it is currently resembling the consolidation pattern from Sept 2011. I extrapolate that in the next couple of months, around mid-November, that this would signal the end of the consolidation period, and I will then be on vigilant watch for the lookout of uptrend signals.
If we examine a couple of the most profitable sectors in the stock market in the last 5 years, the sectors that immediately come to mind are the retail sector and the pharmaceutical sectors.
The retail food sector is often touted as a recession proof sector because people need to eat, whether or not we are in a recession. Another sector that has done extremely well in in the last half decade is the pharmaceutical sector.
Valeant Pharmaceuticals has made a 500+% gain in the last 5 years and I was curious about why.
Valeant Pharmaceuticals primarily focuses on dermatology products that do not require a prescription. The majority of their products are acne-based washes and creams; their lesser products include a few neurological products (eg, anti-depressants and benzos, Ativan, Wellbutrin).
So why do acne meds make money? For one thing, because the people who use them become lifelong customers. In comparison, cancer meds have not caught up in profit margins as acne meds because of the simple fact that cancer patients often die within 6-8 years of treatment, whereas an acne med patient will often be a patient for life.
If anyone who has had experience with pharmaceuticals might have noticed that cures are not profitable. Treatment, and ongoing treatment are, on the other hand, quite profitable, but cures themselves are never profitable. Even if we hypothetically made an assumption that a combination of borax (a natural salt) + 3% hydrogen peroxide solution will cure acne forever, this inevitably will not create lifetime customer value (LCV) because its sale is a one-off. Once a patient is cured of the condition, there is no motivation to continue to purchase the product. Whereas, in the pharmaceutical model, if one never cures the condition, but only treats it superficially, then what you have is a staggering profit margin, and customers for life.
Cancer meds and cancer treatments, although they are a trillion dollar industry and are dependent on new diagnoses, and because the majority of cancer patients die within 8 years, it means that profits eventually do not generate lifetime customers as the meds for acne and other dermatological conditions
However, if we take an example of a company that specialises in autoimmune diseases, these people become customers for life, therefore elevating the bottom line.
I was nineteen years old when one of my best friends died from cancer. He was my best friend in high school; we were in mock trial together, and he became the valedictorian of our year, and won a full scholarship to UC Berkeley. He was one of the most brilliant people I have ever met and I remember so much of our time studying together or pushing each other to become better at what we were capable of. So it was unfortunate that he had developed skin cancer at the age of 19, and after treatment with an experimental cancer drug, he was dead within 8 months.
For a long time, I was really angry that this had happened to him. He and I had the same family doctor, and our doctor was far from evil. He was someone I had known since I was 10, who had treated my entire family. But when my best friend died, I made a life changing realisation: I realised that doctors weren't gods. This was a very important realisation for me, because before, I believed everything doctors always told me, and believed blindly that whatever they recommended automatically made things better.
So it was a shock then, for my 19 year old self to realise that my best friend had died because he had what had been the beginnings of skin cancer on his back, and after given an FDA approved cancer treatment drug, he was dead within 8 months. Before this event, I never questioned the medical and pharmaceutical industries. I never questioned my doctor, and what he would tell me I only considered was the holy truth. And when my friend died, I became angry. I started to question, and what I found out wasn't pretty.
Truth be told, doctors are people, flawed people with an often outdated education. My doctor who was also my friend's doctor, and whom I know never had any bad intentions, was the one who prescribed the experimental-cancer drug that eventually killed my best friend. He didn't know any better. This is what he had been taught in medical school: to treat symptoms and prescribe new drugs. He wanted to help my friend, but he was limited by what he could do, and he was told, this experimental drug could help my friend, FDA approved. (As a note, it only takes 2 studies to become FDA approved. You could have a million trials but if 2 are successful, your new drug is approved.) My doctor is not a bad guy, but the system he worked under limited his choices in treatment for his patients.
I sometimes wonder what it would've be like if my friend were still alive? What if he never took those experimental cancer drugs? What if he had fought the cancer on his own, and let his own immune system destroy the skin cancer on his back? Would he still be alive today?
Most doctors (and like my cousin in New York) are good people. In medical practice in the United States, it becomes increasingly harder to also remain ethical doctors because medicine and the practice of medicine is not determined by the doctors themselves, but by corporations that are interested in making a profit. There exists this incestual relationship between the public and private sector, and this insidious relationship destroys everything England had stood for in 1948, when NHS was first created.
After WWII, the UK did an extraordinary thing: it ratified universal health care for anyone. After those years of fighting wars together, people were rather connected through society; we were all human after all, and the UK decided to take care of its own people, all of its people. What kind of nation are we? If we can't take care of our children, our sick and the elderly?
In comparison, what has been the history of healthcare in the United States? It has been a series of abject failures- of citizens declaring mass bankruptcy at the face of overwhelming health costs, deterioriating health for all, and abject ignorance of disease conditions. In the United States, Obamacare has become nothing but a fallacy to the concept of universal health care, and acts as a method to increase profit margins over a short period of time. Healthy people must pay an extraordinary amount to have simple benefits of health care, and sick and poor people are forced to declare bankruptcy to get the health care that they need. Is this the model that the UK would like to follow when funds for the NHS expires in 2020?
Historically, the UK has always been the pioneer in progessive thought. For many centuries, economic wealth had been dependent on the slave trade for many nations. The slave trade itself had accounted for more than 30% of the UK's GDP in the late 1600s. For me, studying history often has a high level of humility when discovering the truths about the world. I find it incredible that so much wealth of our ancestors had been dependent on something we consider so unethical in contemporary times.
However, in 1706, the UK set an unusual precdent: in In the case of Smith v. Browne & Cooper, Sir John Holt, Lord Chief Justice of England, ruled that "as soon as a Negro comes into England, he becomes free. One may be a villein in England, but not a slave." This was an extraordinary event that would begin a domino effect in many other European and Asian nations. Soon, Russia, China, France, Spain and Portugal followed, abolishing slavery as a trade.
The United States, would begin their anti-slave crusade nearly 70 years later from 1775 when the first abolition society would appear in Pennsylvania to the banning of slave trade trips in the Slave Trade Act of 1794.
Whilst British women wrote numerous essays and articles about the ethics of the slave trade and a need for abolition in the 1800s, women such as Julia Gardiner Tyler, the 2nd wife of President Tyler (and the historical source for the character of Scarlett O'Hara in Gone With the Wind) wrote very eloquent essays defending slavery. The daughter of a plantation owner, whose wealth and livelihood depended on slave labour, Julia Gardiner Tyler naturally defended her entire family's heritage. What she says is interesting though; she said that slaves were better treated as slaves than if they were left alone to live their own lives.
That legacy wasn't so far off, because even after the US' abolition of slavery in 1863 by President Abraham Lincoln (157 years later after the British courts declared slaves as "free men" in England), slaves were left to fend for themselves in poverty and segregation and it wasn't until the 1960s when Martin Luther King Jr. changed the world with his view of racial equality in "I have a dream".
Meanwhile, the UK had done something completely different. After the World Wars, they integrated a system known as the National Health Service, or NHS. Rich or poor, race or gender aside, people had a right to health care. I wonder what would happen if the UK decided to follow the US in their approach in health care post-2020? In history, the UK typically sets the precedent, however in the post-modern era, many Labour Party leaders have instead, embraced the tactics of the American strategy for short-term profit margins at the expense of the population at large (eg, Tony Blair)
We have to remember that at one time, slavery was a large percentage of England's GDP until the courts dictated in 1706, that all men were free once they landed in England. How brave must that decision have been to go against conventional morals and prejudices? And how brave was it to set a precedent for the US to follow 157 years later?
CB Insights, often makes fun of people for being "wantrapreneurs": people who are primarily interested in becoming billionaires than entrepreneurs per se, and often have "get-rich quick" schemes or perhaps even have ambitions of creating wealth out of the suffering and exploitation of others, often at an extravagant burn rate. I even think that perhaps this wantrapreneur model has been elevated in the media by Hollywood, a sector I am quite familiar with that celebrates exploitation.
My hope is that all entrepreneurs, such Sir John Holt and Abraham Lincoln, have the courage to do the right thing, even if it only begins with an idea and goes against the status quo.
And I wonder, which are the UK and US startups that will disrupt the global medical and pharmaceutical models of profit in our current era?
By Sierra Choi
DISCLAIMER: This post was not intended for any stock advice and for educational purposes only
I was talking to a Swiss friend of mine last week and he was asking me how I find the time to write such detailed blog entries. To be honest, I spend much more time devoted to reading, being up-to-date with the financial and venture capital developments and having conversations with people about various subjects than to spend time actually writing. These are subjects I have an innate curiosity about, and so reading for me is simply a natural part of my work-life integration. Most of the time, I spend a lot of time thinking about these issues, and when it comes time to write, it is really a matter of articulating those ideas onto print- or rather, in our technocratic era, to the blinking screen. I even think about what I am going to write about as I am working out and running on the treadmill.
Anyhow this conversation with my Swiss friend lead to a segue-way about the parallels between the production cycle in a film, TV or new media project to the product life cycle for a technology company. As I mentioned previously, I come from a production background and was lucky to be in a sector where the distribution of men to women were fairly equal and there were just as many female Producers to male Producers at any given work environment. Successful Producers are very open and tend to like to share their insights with younger Producers because so much of the production life cycle is related to building relationships with people and developing trust and mentoring naturally comes with the Producer title.
Similar to a product life cycle- Producers work in a similar way as Product Managers and Project Managers. (In fact, at the Producers Guild of America, the "project manager" title in new media is the same as the Producer title, and project managers can receive Producer credit.)
Producers, Product Managers and Project Managers don't have a 9-5 sort of position where you can clock in and out. There are 3 phases in the film/TV show/new media project life cycle- as there are 3 phases in the technology product life cycle: Pre-production, Production, and Post-Production.
In the Production cycle, similar to the phase of release of a new product in a technology company, there is often an aggressive push to the deadline. Producers are known to work around the clock. Producers are also problem-solvers. They don't want to hear excuses, eg, "The shop was closed and I wasn't able to get the required items," "We weren't able to shoot this scene because the actress didn't show up." The only viable excuses for not accomplishing a goal or project deadline are family tragedies (ie, death in the family or accident).
However, a more relaxed, and less intensive phase are the Research & Development and Pre-Production phases. This is a time when the schedule is not as aggressive, and one can spend time reading, meeting with people, going to conferences, giving talks or interviews, networking and generally have more of an open schedule where ideas are starting to come together, and the right talent are being acquired. One of my colleagues at the Producers Guild of America (in which I am on the International Committee) Butch Kaplan is always reading screenplays. The only time he isn't reading several new screenplays is when he is on-location in the Production phase. Butch is the only Producer I've met who can read a script and say exactly how much the budget is going to be, down to the exact dollar figure.
In the Post-Production phase, this is a time for audience testing and re-writing storylines. Similar to an alpha or beta launch when user feedback has been integrated, all bugs are fixed and modifications are made to the product before launch, the film or project can undergo radical change. A mentor of mine from Morgan Creek Productions told me that there had only been one film he had worked on in which the entire film had changed to such a significant degree in Post-Production due to unusual events during the Production phase, so that the film did not even resemble what it had originally meant to be. In a parallel manner, we can attribute this kind of radical shift to what happened with companies like Slack, and how the founders had originally wanted to produce a web-based multi-player game, but eventually ended up with a company communication platform.
For me, a lot of my interest in not knowing everything about a particular subject is what captivates my interest. I can't think of anything more egocentric and boring as to say one is a complete expert on something. For me, learning is an integral part of this product life cycle. Brad Feld, entrepreneur and VC writes in his blog:
While a great mentor knows a lot and has had plenty of experiences, she’s always learning. The best mentor/mentee relationships are peer relationships, where the mentor learns as much from the mentee as she teaches the mentee...I know a lot about some things. And I know very little, or nothing about a lot more things. My business and technology experience is deep in software, where even the hardware companies we are investors...But I don’t know all software. And I especially don’t know vertical markets. We’ve consciously stayed horizontal in our investing, being much more interested in our themes which apply to many different vertical markets. But ask me about a vertical market, whether it be entertainment, real estate, insurance, auto, food, energy, or financial services and I’ll often approach it with a beginners mind.
I think this is the best kind of attitude to have, and nearly all of the A-list Producers I have met via the Guild have this mindset. There is an openness to Product Development in a technology startup, where ideas are shared and there is a collective mindset where relationships are built that is parallel to the life cycle of feature films.
And possibly, another reason why Steve Jobs had successful careers in both feature film and technology could be attributed to the parallels in the film life cycle to the product life cycle.
By Sierra Choi
I think there is an inherent mainstream stereotype that emotion is often perceived as a weakness. Certainly there are some roots of truth to this- especially if a person flies off the handle and can't control his or her emotions at every little obstacle or misunderstanding; however, in my opinion, this is most likely symptomatic of a lack of discipline, rather than a person simply ruled by his or her emotions. I, myself have been driven to anger many times, but usually I find what works for me is to have an hour time-out rule. Typically if I am angry at someone, either a friend, a family member or a colleague, I'll say, "I will talk to you about it tomorrow." If I am still angry after an hour, then I make a point to bring it up in a non-defensive way. However, most of the time, the things that may trigger anger may be entirely trivial in nature and not worth discussion points. My family has origins in South Korea, and I find South Korean culture very similar to the French- people express anger very quickly, then forget about it just as easily and never hold any grudges.
In relation to the power of emotion, I think it's worth noting that many social movements have risen due to the catalyst of emotions evoked from citizens around the world.
In a parallel way, if we think about the way emotion has moved us through history, there will always be speeches that evoke that spirit- although we are connected via the mirror of time, I think some universal speeches, especially those in literature and politics can represent the Why of what motivates us to act, and how we collectively cultivate ethics that are indicative of our generation and generations past.
Some of my favourite speeches in history are:
Marc Antony's speech after the Assassination of Julius Caesar in order to create the triumvirate.
JFK's "Ask not what your country can do for you, but what you can do for your country"
General McArthur's "Old soliders never die, they just fade away"
Martin Luther King Jr's "I have a dream"
King Edward VIII's 1936 abdication speech
How romantic was it for one of the most powerful figureheads in the world to give up his power and his home country for the love of an American woman?
Certainly powerful orators in recent times, such as President Obama, need only begin to speak before people begin to swoon under his influence. He is able to capture and understand how to evoke emotion in his audience, and this is a very powerful tool, the power of emotion.
Likewise, I think there has been a progressive movement for startups to utilise videos to promote their products, so much so, that if we examine all the startups in London that have been funded £6 million+ in recent years, we will see that they all produced several product and team videos. Of course, a good video should not be produced in lieu of a great product- but the trend seems to be that when they are able to connect emotionally to their audience- the users and companies who use their product, and the VCs that fund them, that videos have rather become a necessity rather than an option. In fact, all well-known accelerators and incubators in the US and the UK require videos as part of their admission process, and never a slide deck, business plan or a long IM (information memorandum).
A couple of years ago, I was at a mobile gaming conference, representing a startup I was working for at the time, and after meeting with an investment banker from Morgan Stanley, he told me to shorten the company business plan to 1 page, at most 1.5 pages.
"I want to read down the middle, skim through the content, and see the bottom line in [sic] one page." He didn't want to read the IM nor know more details about the technology. He wanted a 1pp business plan and a short company demo video which we did not have. He did not want to read the 60 pp thesis that detailed all the company objectives nor any of the patents we held nor the ideology of the company that the KidsApp EdTech CEO of the company I was working with had taken weeks to write. What he wanted a movie trailer, something that made him curious about the company that would pique his interest.
Simon Sinek in his TedTalks, The Why partly describes this phenomenon. The most effective adverts and commercials are those that rarely have anything to do with the actual product, but about people's experiences and relationships with each other. In a world where we are inundated by technology, apps, mobile games, SaaS applications and the like, we need to humanise the content, to reaffirm our humanity, rather than denying its existence.
Mark Suster, who is both an entrepreneur and VC, in his blog bothsidesofthetable also discusses the power of video and how the single best method to explain your startup is through this audiovisual power of narrative.
Some of his favourite startup videos include:
Masterpiece for Osmo
MakeSpace storage and MakeSpace storage 2
As one can see, these product/ service videos focus entirely on relationships between people, so that the product/ service itself becomes ancillary to the focus, therefore getting closer to the Why of what makes people act.
Some of my personal favourites include the original gmail product video (now Chrome)
and also fashion eCommerce startup Lyst's videos in which they specifically created an artistic representation- resembling a living organism that was used to visualise their data analytics.
Another favourite of mine that I found really unforgettable was this video advert for...liquor.
I also remember in 2008, when I was living in Los Angeles, several Producer friends of mine and I were discussing over social media this commercial we were all blown away by...about shampoo.
Except it wasn't really about shampoo, and the Johnnie Walker video wasn't really about liquor. It was about the undefeatable human spirit.
By Sierra Choi
Awhile back I wrote about the issues regarding CALPERS and CALSTERS being unable to calculate private equity fees. At the time I stated that it was almost a dereliction of duty that pension funds of this size and supposed sophistication could not address a very simple issue on fees paid.
Unfortunately, it gets worse. This Naked Capitalism blog post details how the head of Calpers Private Equity, at a public investment committee meeting, appears to fail to understand some of the basic structures of the private equity industry. Please click on the link and watch the videos; its quite frankly a train wreck. Please remember, Real Desrochers is responsible for upwards of $40 billion in private equity and venture capital commitments. The pensioners of California deserve better.
By Ashok Parekh
To understand the future of energy, I think it's immensely valuable to study the history of energy consumption within the last two hundred years.
The current dominant market forces are the petroleum and gas industries, a reign long held since the mid 1900s when there was a shift from coal to crude oil. The pioneer and entrepreneur who began it all was a man named Edwin L. Drake, who had used a steam engine and cable-tool drilling rig to drill the first petroleum oil well in 1859. However, his path was filled with many obstacles, and the future founding father of the petroleum oil industry spent 5 months unsuccessfully drilling for oil in Pennsylvania that earned him the nickname "Crazy Drake" and his venture as "Drake's Folly."
However, Edwin L. Drake persisted despite running out of money, and relied on friends for financial support and on August 27. 1859, when he finally found that black liquid gold called petroleum oil, it was an event that would signal the beginning of the end of the dominant energy force in global markets, what was then known as the coal industry, and start the transition to petroleum. About a decade later, in 1870 a man named John D. Rockefeller along with his Co-Founders would incorporate Standard Oil Co. Inc. in the United States, which became one of the world's first and largest multinational corporations.
Standard Oil was the Microsoft and Google of its day, and in a similar manner, attracted anti-trust lawsuits from the U.S. Government. Much of the history of Industrial Era and its innovative newfound technologies were fictionalised in a novel by Ayn Rand in Atlas Shrugged, which was fairly revolutionary for its time because much of the novel integrated intimate conversations between the author and the founders of different companies in uncensored format, detailing many woes faced by Founders when the U.S. Government often usurped their technologies or stopped them from operating via lawsuits.
However, Standard Oil, with Rockefeller as head, created a precedent in many business practices, including acquisition of smaller competitors and by combining all their disparate companies spread across many states under a single group of trustees. Rockefeller integrated many other tactics, such as secret transport deals and because of its acquisition of all aspects of its trade, it would eventually lead to the passing of the Sherman Antitrust Act by U.S. Congress in 1890- just twenty years after the inception of Standard Oil. After losing its antitrust legal battles with the U.S. Justice Department in 1911, Standard Oil was broken down into smaller companies, what would be known today as Chevron and ExxonMobil.
At the time however, coal was still the dominant energy market force around the world, and petroleum oil was simply an up-and-coming competitor. In 1905, the UK produced 235 short tons of coal, and was the leading coal producer in all of Europe, with Germany as a close competitor with 121 short tons produced in the same year. The United States was the predominant coal producer in North America with 350 short tons with coal as the leading source of energy used in the United States until the 1950s when oil and gas would lead the energy industries.
In the UK, a visionary named William Knox D'Arcy who had been a partner in gold mining in Australia and New Zealand in the late 1800s decided to set his sights on an up-and-coming energy competitor- petroleum oil in 1900.He banked his entire fortune from gold mining in a search for petroleum in the Middle East, and would spend the next eight years drilling for crude oil in Persia (now Iran). After an extraordinary burn rate, and close to losing his entire fortune, on May 26, 1908 he finally struck oil and the following year, he was made director of the newly founded Anglo-Persian Oil Company which would eventually become British Petroleum (BP). Similar to Edwin L. Drake, William Knox D'Arcy was a pioneer and entrepreneur who went against the popular trends of his time, persistent in his endeavors and began to disrupt an industry that had long been held by the coal industries. The UK's controversial love affair with the Middle East and with, petroleum was exemplified by T.E. Lawrence, an archaeologist who became known as Lawrence of Arabia.
However much of the UK's transition to petroleum from coal was also in part, due to what had transpired in the first World War, when former Prime Minister Sir Winston Churchill switched to utilising petroleum as the energy source for the Royal Navy, instead of coal.
In a parallel trajectory, almost a hundred years later, the U.S. began integration of Japan and South Korea's high tech experimental algae biofuel in their naval and aviation fleets between 2008-2010 when President Obama began his biofuel initiatives and soon after in 2011, commercial jet liners began integrating biofuel on air flights.
My own father worked for many years in the U.S. oil industry and I remember as a little child visiting the oil refineries in California during special events. In the U.S., the petroleum oil industries provided stable jobs for many Americans, and there is a famous saying in Texas that I will always remember: "Oil feeds my family and pays my taxes."
In the little time that I have spent in Texas, I have found Southerners quite welcoming, humble and down-to-earth, not exactly the ignorant monsters that they are often portrayed in the media. However, with oil jobs moving abroad, many of those Texans have lost their primary source of income, but I wonder if perhaps algae biofuel (which is ideally grown in hot temperatures- such as the ideal environment of Texas) might not become the new source of those new jobs in the United States?
Algae biofuel was derivative of efforts from scientists around the world, however, Japan was the first to patent biofuel cells in 2003 and 2004 by the University of Tokyo and the Kitakyushu Foundation.
This system utilised photosynthesis and solar energy in transforming biofuel cells into semipermanent power generation. Japan's water-powered car utilises this biofuel cell technology.
A couple of years later, in 2006 and 2007, South Korea produced a method for directly producing biofuel using sea algae via its research by scientists at the Korea Institute of Industrial Technology and in following year the UK began the world's largest algae biofuel initiative in 2008.
Algae is a type of seaweed found in the sea. They multiply quite easily and one of its advantages is that it can grow in both freshwater and wastewater (although wastewater algae has more contaminants that make it less effective for biofuel). Algae biofuel releases carbon dioxide when burnt, but unlike fossil fuel (from petroleum, gas or coal) algae biofuel releases carbon dioxide that has been recently removed from the atmosphere via photosynthesis and are harmless to the environment if accidently spilled. It is completely biodegradable and do not effect other natural wildlife or environmental sources of energy.
The United States Department of Energy estimates that if algae biofuel replaced all the petroleum fuel in the United States, it would require 15,000 square miles (39,000 km2), which is only 0.42% of the U.S. map or about half of the land area of Maine or roughly 4x the size of Manchester.
The UK has implemented biofuel for its buses and transportation since 2012 and Japan has started using algae biofuel in their operating bus services last year via Isuzu Motors and bio-venture firm Euglena. However, there was much resistance against utisiling biofuel cells around the world for many political reasons, and Japan's plans to launch the water-powered car into the U.S. were temporarily halted when they had suffered devastating effects of the tsunami + earthquake in 2011.
In 2012, The University of Birmingham created a prototype, a mini-hydrail Hydrogen Pioneer Train and this year, the University of Warwick is also creating a hydrogen powered locomotive using the biofuel cell technology.
Historically, UK pioneers have been the innovators that have pushed new technology and energy sources to the forefront of Europe. This has been the case with both coal and with petroleum and gas. The question remains, which are the companies that will bring biofuels and biofuel cell technology for public consumption into the next century?
By Sierra Choi