Sunday, June 22, 2014

June 2014 - Diving into technology

Firstly, sorry for the bad English and aesthetically, non-pleasing post. Wrote this in a impromptu manner.

As many of you know, I'm working on a project that's tech oriented. Its partly because what I am trying to solve is a big problem I face everyday and partly because I felt theres no better time to solve this with the lever of technology and information and platform freedom. Its still ongoing and I am fumbling with the mountain of things to clear and sort and worrying about whether theres a true problem, whether the problem is a one single mega pain or a collection of big and mostly small pains which is harder to solve.

The key (which I learnt) was to spot problems that are too painful to be ignored, come up with a rough, simple product that solves most of it and continuously listen to user feedback and iterate if it fails. The belief that solving a very important problem and getting users crazy over your solution before thinking about revenue models is also something very new to me. There were also talks about growth hacking, making things go viral and then Whatsapp just disproved it with no PR, no marketing, by charging people and the user stats still hit through the roof, because of a great product that users loved. The interesting thing was things are viewed differently, very dynamic, very forward looking and a constant stage of experiments. Reminds me of the saying: "Focus on where the puck will go, rather than where it was". Its a very different world from where I came from which admittedly is very backward looking for most of the practitioners, and I can better appreciate how Buffett, Munger start to look at things. Steve Jobs also hinted that innnovation and creativity is all about doing what you love (ensures you go through lots of crap), connecting the dots between far flung concepts (aka latticework mental model as per Charlie Munger) and of course think big (not in the ambition sense but more like macro level) to mix and match stuff to see what works and not.

I actually picked up programming to understand how it all works and understand what and how engineers or programmers as some call, work on problems and I must say its all a very cool process. Ive also burnt many weekday nights and weekends learning it (still learning it),  my last was trying to do "pushes" via a command prompt which is really a basic concept of making changes on your PC and pushing it to the cloud servers in layman terms. Its basic but I took forever to learn it, its a unique field and incredibly powerful. You realize that you can actually create things that makes makes a difference, makes life easier, basic ones like getting bus timings, movie schedules etc. and they have serious big scale applications. I mean I would still take a few weeks or months to build one but I have seen people doing it in a few days.

There is in fact a much deeper impact to me. Suddenly it becomes clearer what tech or some startup companies were doing. Why Facebook bought Whatsapp or Occulus, why Twitter could do a billion range IPO despite its financials (Not that I totally agree with the valuations) but you have a much panned out view of the landscape. Why is Swipe, VMware and Salesforce (I know there was a recent short call on it) so popular etc? Why is Tesla so different? Are they crazy to build a hyper loop or make humans do interstellar travel like weekend trips. We aren't really talking about singularity here but you can start to see how things and technology converge and why people start to move towards the cloud, towards privacy secured products and services like Snapchat and more importantly towards mobile etc. I recommend reading this slide by Mary Meeker of KPCB.

More importantly, the actual process of trying to start up something is immensely gratifying, and I have not even came up with a product yet. The act of doing it, I have already learnt so much from it. Crafting experiments to test for product demand and relevance, understanding the difference between whats a want and a need, whether to listen to your customers or regard them as users who dont know what they want. Also understanding whats the industry landscape, categorizing product types and building features. I enjoy reading posts from a few people in the industry, from the big hitters like Paul Graham to lesser known ones like Slava who runs RethinkDB. For PG, I particularly like "Do things that dont scale", "Ambitious startup ideas", "How to get startup ideas", "Schlep Blindness" and "Startups in 13 Sentences".

The fact that startups are the mix of very intelligent people on the forefront of technology and the desire to break things make for some very interesting combination and results.

On the other hand, my portfolio has little changes except for a HK listed real estate company which I invested into. I went in at a high, there's some massive price movements even though volume and free float is very low. Value remains and likely a minimum 2 bagger. There seems little thats reasonably priced for me though at the moment. Fed's decision to cut back on bond buyback also had some real impact, rates are moving up fast and Chinese companies borrowing in 2014 is staggering. Its US$14 trillion, even more than US companies now. China corporates also will make up over half of total global corporate borrowing needs over 5 year period (i.e half of US$60 trillion up to 2018) Read here for more info. A quarter to a third is financed by shadow banking. And no surprises for guessing its steel and real estate that dominates. And foreign reserves that China has is US$4 trillion. Uh oh...

Also favorite highlight, Bumi Resources tipping on the default edge, like again... HERE

Again, appreciate any exchange if ideas and/or comments.


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