tag:blogger.com,1999:blog-88996690123490176062024-03-19T11:17:44.813+08:00David Lawson International BusinessDALawsonhttp://www.blogger.com/profile/10031303804428493211noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-8899669012349017606.post-55774413799669256242010-10-07T09:11:00.000+08:002019-11-13T10:01:51.167+08:00Tourism in Japan: A New Frontier for Australian Business(Published in the Australian New Zealand Chamber of Commerce in Japan Newsletter, October, 2010<br />
<a href="http://www.anzccj.jp/static.php?menuid=13&artid=84">http://www.anzccj.jp/static.php?menuid=13&artid=84</a>)<br />
<br />
Niseko is now synonymous with commercial success for Australians in Japan, but are there other opportunities for Australian tourism and service industry ventures around the country?<br />
Since 2000, Australian tourism and investment in the Niseko region of Hokkaido has continued to grow. The recent ‘endaka’ may see something of a reduction in the numbers of Australian skiers who can afford to travel to the Niseko this season, but any reduction would likely be a small aberration and have little noticeable impact on the region these days, as while Australians alone account for 55% of all visitors to Niseko, since 2006, the percentage of non-Australian foreign tourists to the region grew from 9% to 45%. This growth in foreign tourists continues to help the region prosper in the face of a continued decline in the number of Japanese tourists to the region who still make up 75% of all tourists, but whose numbers continue to decline steadily.<br />
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Visitors from Hong Kong booked 15,802 nights of accommodation in the region last year, compared with 5,330 nights of accommodation booked by Australians. The ‘bolter from behind’ in the race for beds in the Niseko region has been the mainland Chinese who at 3,604 nights of accommodation have overtaken the number of Korean, Singaporean and American tourists and have almost caught up to the Taiwanese (whose numbers have dropped from a high in 2007).<br />
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Despite some pressure on real estate investments in the Niseko region attributed to the Global Financial Crisis or ‘Lehman Shock’, in the recently released statistics for Japanese real estate values, Kutchan Town (a part of the greater Niseko region) has experienced the highest growth in real estate values in Japan for the second year in a row and is only one of 330 or so survey points amongst the 22,000 in Japan surveyed to have experienced growth, or at least held the their value.<br />
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Earlier this year YTL Group, one of Malaysia’s leading infrastructure conglomerates relieved Citi Group of the Niseko Village development, which includes the Niseko Hilton, Higashi Yama and Green Leaf Hotel properties. This is the Malaysian company’s first foray into Japan and in anticipation of the continued growth in tourism from Asia, they are starting with a US$10 million refurbishment of the 200 room Green Leaf Hotel and are continuing on a program of sales to foreign tourists. In a continuing trend towards Asian investment in the area, which commenced with the sale of the Australian owned Nihon Harmony ski resort to PCCW of Hong Kong in 2007, the Yamada Onsen Hotel was sold to Chinese interests last Spring and in September this year GHM of Singapore and Club Med have just announced a major high end investment in Rusutsu town. The Capella resort group from the US is on target with a greenfields development scheduled to commence in 2012.<br />
Whilst it’s interesting to see the impact that Australian tourism and capital has had on regional Japan, how can Australian businesses learn from this example, can this be replicated in other parts of Japan and what opportunities are flowing from the wider growth in foreign tourism numbers in Japan?<br />
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These days Australian officials meeting government and industry representatives in other regions of Japan are often asked if we can get Australians to replicate the Niseko phenomenon in their corner of the country. And while there is no denying that the insight, nous and perseverance of a succession of our countrymen and women was critical, the ingredients for the successful growth of Niseko also included the facts that:<br />
•business practices are probably relatively less restrictive in Hokkaido compared to other parts of Japan<br />
•guaranteed excellent powder skiing in the same time zone as Australia during our long holidays is probably a safer investment than what our own ski fields have to offer, and once the commitment is made to Japan,<br />
•air transfers to Sapporo via Narita or Kansai are probably easier for travelling Australians than having to transfer to trains. Also,<br />
•the investment in Japanese language options in schools in Australia has probably also paid off as now many Australians are comfortable with travelling to Japan and<br />
•the working holiday visa also meant that Australians could provide a ready and willing workforce during the ski season, thus fuelling the demand.<br />
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No doubt dealing with the local authorities over the years has had its challenges, as is probably the case for businesses in Australia as well, but from the perspective of the Australian Consulate and Austrade Sapporo, the regional government organisations of Niseko appear highly committed to building the infrastructure needed to attract and retain foreign nationals. They are working on solving international education options for foreign and mixed-race children and multi-language capable medical facilities. This month the towns of Niseko and Kutchan have announced the amalgamation of their tourism promotion efforts and are expanding the use of social media marketing devices such as Twitter and Facebook to improve their exposure. One of Niseko’s biggest assets is Paul Haggart, a long-term Japan resident Kiwi with fluent Japanese and excellent cultural awareness, who is their Tourism Strategy and Promotion Section Manager. Niseko also employs a Chinese national to help build that business.<br />
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As several key figures in Niseko point out, the ‘White Season’ tends to sell itself but there is a concerted effort to promote the “Green Season” as well as the “Brown Seasons” of spring and autumn and more and more tourists are finding the Niseko area has numerous attractions and diversions to keep them entertained in a relaxing environment. ‘Food tourism’ is also big on the menu.<br />
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Statistics recently published by the Japan Tourism Agency point to Japan being the 33rd most visited country in the world and Japan ranks 8th in Asia. To put this into context, Australia is ranked 11th in the world just behind Mexico whose foreign tourism is obviously dominated by sun-seeking Americans. France is the country with the most foreign visitors and the US ranks second in the world. China is the most popular foreign tourism destination in Asia and is ranked 4th in the world. But Japan is working hard to build its image, be more accommodating, especially of the Chinese tourists and international tourism to Japan will continue to grow.<br />
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As we watch Japan struggle to capture and cope with the sudden boom in tourism especially from China, are there opportunities for Australian businesses to capitalize through the provision of goods and services to Japanese companies?<br />
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The anecdotal evidence seems to be that whilst the Chinese are spending a lot while in Japan, spending tends to be primarily on bargain priced electrical goods or cosmetics and medicines from discount stores. Australian managed bars and restaurants in Japan make the same lament as their Japanese counterparts when it comes to serving Chinese diners – they tend to choose the highest quality/cost foods on the menu and drink tea all night, thus eroding the profits of the establishment.<br />
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Bearing in mind that it’s generally tough going for higher cost and better quality food and beverage products from Australia in this deflationary Japanese market, there may be possible niche supply opportunities for Australian companies exporting products and ingredients tailored to the Asian markets to also look at diversifying their supply to businesses catering to those customers in Japan.<br />
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However, there are probably more significant opportunities in the services sector. Quite a few Australians throughout Japan are involved in hotel businesses, from management positions in the major international chains through to the entrepreneurial Australian who has invested in a couple of the quintessentially Japanese ‘love hotels’. This should indicate that Australian expertise and insight into services associated with profitable and successful tourism business is valued in Japan.<br />
Therefore, I can envisage opportunities for Australians with experience in providing training, management and expertise associated with running tourism related service industries as being highly regarded in Japan – a position which is backed up by our own successful tourism industry and the recognised success of Australians in the sector in Japan.<br />
High personnel costs in Japan mean that Australian businesses which can identify staffing efficiencies, offer a full suite of services targeted to specific sectors of the tourist market without the inefficient ‘over-servicing’ of customers as often happens in Japan, will find opportunities for growth in line with the growth in tourism to Japan. New entrants to the market have the advantage of being able to go to where the market need is rather than relying on the expectation that foreign tourists will travel somewhere merely because that’s what Japanese tourists have always done. This is another reason why Niseko has flourished while other Japanese ski resorts have floundered, even though shinkansen lines were laid to their doorstep.<br />
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In the meantime, happy skiing! And if you need some more warm weather, you can always fly from Haneda to Kuala Lumpur for 5,000 yen!<br />
<br />
<br />
David Lawson<br />
Trade Commissioner and Consul<br />
Australian Consulate (Austrade), Sapporo<br />
David is currently filling this position on a temporary basis. David joined Austrade in 1997 to fill the same role in Sendai after running a Japan-specialist consultancy for 9 years. Since finishing his term in Sendai in 2001, David spent 4 years as Austrade’s Trade Commissioner in South Australia and recently completed an assignment as Consul-General and Trade Commissioner in San Francisco.DALawsonhttp://www.blogger.com/profile/10031303804428493211noreply@blogger.com1tag:blogger.com,1999:blog-8899669012349017606.post-76440349191502917152010-06-14T05:17:00.001+08:002010-06-14T05:21:29.411+08:00World Innovation Forum 2010 (NYC) - Insights by Mitch Ditkoff"Thought leaders will soon be a thing of the past" <br />
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<a href="http://www.stumbleupon.com/su/33FpIr/www.business-strategy-innovation.com/wordpress/2010/06/world-innovation-forum-2010//r:t">http://www.stumbleupon.com/su/33FpIr/www.business-strategy-innovation.com/wordpress/2010/06/world-innovation-forum-2010//r:t</a><br />
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<br />
World Innovation Forum 2010<br />
Submitted by Blogging Innovation on June 13, 2010 – 9:28 am by Mitch Ditkoff<br />
<br />
I just returned from the World Innovation Forum in NYC.<br />
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My big insight? Thought leaders will soon be a thing of the past. <br />
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In their place? Feeling leaders — business savants who have made the journey from head to heart and aren’t afraid to let the rest of us know what they’ve learned along the way.<br />
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I’m not talking warm and fuzzy. Nor am I diminishing the thoughtfulness of WIF presenters. They were. Thoughtful, that is. Very. <br />
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But it wasn’t so much their thinking that moved me — as it was the feeling behind their thinking.<br />
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No matter what business you’re in, the engine of innovation is really about being moved. That’s what movements are made of — the heartfelt, intrinsically motivated effort to get off of dead center and accomplish something meaningful.<br />
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This is the crossroads all of us are standing at these days — the intersection between this and that. What the newspaper industry is going through. And the music industry. And the television industry — just to name a few. <br />
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My heroes, these days, are the people who don’t just stand at the crossroads, but dance — inspired individuals who find great delight in the paradoxes, get juiced by the challenges, and realize that “innovation” is not a program, initiative, or model, but a way of life.<br />
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That’s the main reason why I enjoyed the World Innovation Forum so much. <br />
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Because that was precisely the mindset of the presenters — and the people who attended — no matter what industry, pedigree, or astrological sign. <br />
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As I watched the 13 WIF presenters do their conference thang, I got some unexpected insights into the art and science of delivering a memorable presentation to a global audience of innovation-hungry patrons. <br />
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So, for all of you conference keynote wannabees out there, take note. Here’s part 1 of your tutorial. <br />
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1.Be in tune with your purpose: If you’re going to hold an audience’s attention for more than 10 minutes, you’ve got to begin by holding firm to your purpose… your calling… what gets you out of bed in the morning. If it’s missing, all you could ever hope to deliver is a speech — which is NOT what people want to hear.<br />
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If your purpose is clear, you’re home free and won’t need a single note card.<br />
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Mark Twain said it best: “If you speak the truth, you don’t need to remember a thing.”<br />
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2.Be passionate: Realize you are on the stage to let it rip. Completely. People are sitting in the audience because they want an experience, not just information. They want to feel something, not just hear something.<br />
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So play full out. Pull the rip cord. Jump!<br />
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3.Connect with the audience: You may know a lot of stuff. You may have a double Ph.D, but unless you know how to connect with the audience, your knowledge ain’t worth squat.<br />
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If you were a tree falling in a conference room, no one would hear it.<br />
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So tune in! Establish rapport! Connect! And that begins by respecting your audience and realizing you are there to serve, not preach.<br />
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4.Tell stories: That’s how great teachers have communicated since the beginning of time. Storytelling is the most effective way to disarm the skeptic and deliver meaning in a memorable way.<br />
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“The world is not made of atoms,” explained poet, Muriel Rukyser. “It’s made of stories.”<br />
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No bull. Parable!<br />
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5.Have a sense of humor: There’s a reason why HAHA and AHA are almost spelled the same. Both are about the experience of breakthrough. And both are sparked when the known is replaced by the unknown, when continuity is replaced by discontinuity.<br />
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Hey, admit it. At the end of the day, if you can’t find the humor in business, you’re screwed. So, why wait for the end of the day. Find the humor now.<br />
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6.Get visual: It’s become a corporate sport to make fun of power point, but power point can be a thrill if done right. A picture really is worth a thousand words.<br />
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If you want to spark people’s imagination, use images more than words. The root of the word imagination is image.<br />
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7.Have confidence: Do you know what the root of the word “confidence” is? It comes from the Latin “con-fide” — meaning “to have faith.” Have faith in what? Yourself.<br />
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That’s not ego. It’s the natural expression of a human being coming from the place of being called.<br />
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So, if you’re about to walk out on stage and are feeling the impostor syndrome coming on, stop and get in touch with what is calling you.<br />
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Let that guy/gal speak.<br />
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8.Trim the Fat: When Michelangelo was asked how he made the David, he said it was simple — that he merely took away “everything that wasn’t.”<br />
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The same holds for you, oh aspiring-keynote-presenter-at-some-future high-profile-conference (or, at the very least, pep-talk-giver to your kid’s Junior High School soccer team).<br />
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Keep it simple. Or, as Patti LaBarre, the delightful MC at the World Innovation Forum put it, “Minimize your jargon footprint.”<br />
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9.Celebrate what works: If you want to raise healthy kids, reinforce their positive behaviors — don’t obsess on the negative. The same holds true for conference keynotes.<br />
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If you want to raise a healthy audience, give them examples of what’s working out there in the marketplace. Feature the “bright spots,” as Chip Heath likes to say. Share victories, best practices, and lessons learned.<br />
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Save the bitching and moaning for your therapist.<br />
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10.Walk the Talk: Good presenters are genuinely moved. Being genuinely moved, it’s natural for them come out from behind the podium and actually move around the stage — as in, walking the talk.<br />
Big thanks to Michael Porter, Michael Howe, Jeff Kindler, Chip Heath, Andreas Weigend, Biz Stone, Seth Godin, Brian Shawn Cohen, Wendy Kopp, Ursula Burns, Joel Makower, Jeffrey Hollender and Robert Brunner for their presentations at the World Innovation Forum. <br />
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Special thanks to Seth Godin for his bold effort to remind people that “there is no map, not even a fictional map” — and that all he could do was point the way there. Lucid. (Start walking, people!)<br />
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And last, but not least, a big thank you to Patricia Meier, Santiago Muro, George Levy, Becky Gee, Sebastian Mackinlay, Kelsey Woods, and the entire HSM team for all their hard work, good cheer, and vision to make this year’s WIF such a delight.<br />
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Mitch Ditkoff is the Co-Founder and President of Idea Champions and the author of “Awake at the Wheel”, as well as the very popular Heart of Innovation blog <a href="http://www.ideachampions.com/weblogs">http://www.ideachampions.com/weblogs</a>.DALawsonhttp://www.blogger.com/profile/10031303804428493211noreply@blogger.com0tag:blogger.com,1999:blog-8899669012349017606.post-39066706278526574422010-05-05T06:58:00.000+08:002010-05-05T06:58:29.344+08:00Twitter, ABC's "QandA" Program and social participationAfter four years in the US, one of the things I most enjoyed about coming back to Australia was reconnecting with the Australian Broadcasting Commission's (ABC) excellent current affairs programming on radio and television.<br />
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One program I have particularly enjoyed has been the Question and Answer (QandA) program on ABC TV on Monday nights. Quoting the website (<a href="http://www.abc.net.au/tv/video/downloads.htm#?vid=qanda">http://www.abc.net.au/tv/video/downloads.htm#?vid=qanda</a>), "Q&A puts punter, pollies and pundits together in the studio to thrash out the hot issues of the week. It's about democracy in action - on Q&A the audience gets to ask the questions. Q&A is hosted by one of the ABC's most respected journalists - Tony Jones."<br />
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A third and perhaps the most enjoyable aspect of this program is the real-time TV audience participation generated through Twitter. Following #qanda on Twitter makes you feel like you're in a rowdy town hall political rally and rather than just shouting at your TV in a vacuum, Twittering allows you to share your comments with the wider Twitterati and QandA has also started publishing some of those Twitter comments on the bottom of the screen.<br />
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Has Twitter brought us back to old-style Town Hall politicking from the comfort of our own lounge room? How are the political parties responding and engaging with this new phenomenon? And how can I get a computer screen big enough to be able to capture the thousands of Twitter comments and how do I weed out the clever from the profane?<br />
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Perhaps an enterprising programmer can solve these problems for us all.DALawsonhttp://www.blogger.com/profile/10031303804428493211noreply@blogger.com0tag:blogger.com,1999:blog-8899669012349017606.post-43672399902738570702009-11-26T05:05:00.000+08:002009-11-26T05:15:18.302+08:00How Web 2.0 is changing the way we work (from McKinsey Quarterly)How Web 2.0 is changing the way we work: An interview with MIT's Andrew McAfee - Courtesy of McKinsey Quarterly.<br />
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<a href="http://www.mckinseyquarterly.com/How_Web_2_0_is_changing_the_way_we_work_An_interview_with_MITs_Andrew_McAfee_2468">http://www.mckinseyquarterly.com/How_Web_2_0_is_changing_the_way_we_work_An_interview_with_MITs_Andrew_McAfee_2468</a>DALawsonhttp://www.blogger.com/profile/10031303804428493211noreply@blogger.com0tag:blogger.com,1999:blog-8899669012349017606.post-64238848617469550332009-11-24T17:29:00.000+08:002009-11-25T12:27:42.911+08:00How to sell books using social media<a href="http://tinyurl.com/HowtoSellBooksUsingSocialMedia">http://tinyurl.com/HowtoSellBooksUsingSocialMedia</a>DALawsonhttp://www.blogger.com/profile/10031303804428493211noreply@blogger.com2tag:blogger.com,1999:blog-8899669012349017606.post-44317980334167054512009-11-16T16:32:00.000+08:002009-11-16T16:32:44.443+08:00Some things to look for when seeking venture capitalVenture capital firms are not <b>just </b>a source of finance for the lucky few who manage to pitch their idea better than the thousands of other innovators competing for scarce resources.<br />
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A venture capital firm looks beyond the idea and is often more concerned with the team who will deliver the business growth.<br />
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In the same way, when seeking an investment by a venture capital firm, don't just spend your time marching up and down Sand Hill Road, rattling the tin for contributions hoping for the quickest offer of a term sheet. Instead, you need to view the process as a courtship. In the same way that a job interview is really an "inter-view" - an opportunity for a company to size you up, but also an opportunity for you to gain direct insight into the team you may be working with - you need to work out if you can work with this team.<br />
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<ol><li>Will the VC team be able to help marshal all of the non-financial resources you will need to scale up your business? </li>
<li>Will they be an active or passive board member? </li>
<li>Can they help you find the right staff and do they have the connections to help you get the product or service to market quickly and efficiently? </li>
<li>Will they be a useful sounding board and source of ideas for when the going gets really tough?</li>
</ol><br />
Bear in mind that for the VC money they will have active board involvement to ensure that they maximize the return to their investment and minimize the risk that the entrepreneur is going to make mistakes. And they have most likely seen all those mistakes before.<br />
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Remember that this relationship will likely last several years and for the success of the business, it has to last. But there will be an end - because the VC must be focussed on 'the exit'. VCs are always looking at how they will recoup their investment and pay back their Limited Partners with profit<br />
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<div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">So when preparing your pitch remember that the VC is not just a source of finance to help an innovator on the path to mega wealth, you have to make the relationship work.<br />
</div>DALawsonhttp://www.blogger.com/profile/10031303804428493211noreply@blogger.com0tag:blogger.com,1999:blog-8899669012349017606.post-38836621122336029612009-11-10T23:29:00.000+08:002009-11-11T00:55:20.925+08:00Unleashing the Collective Genius of Employees<em>Unleashing the Collective Genius of Employees</em> is the name of a webcast from Stanford University which I watched recently. It describes an excellent idea for capturing and encouraging innovation in the workplace. If you're interested in watching the whole seminar it takes less than 1 hour and can be found here. <a href="http://tinyurl.com/ylnf3fm">http://tinyurl.com/ylnf3fm</a><br />
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In summary, it describes a kind of 'stock market' for ideas in which participants (the employees) are given notional capital to invest in the ideas generated from within the company. The idea is that rather than have good ideas lost in the 'ideas basket' because of a lack of time or resources or because the promotor of the idea can't navigate the politics, there is a mechanism to have ideas investigated and championed (or quashed) based on an internal market mechanism.DALawsonhttp://www.blogger.com/profile/10031303804428493211noreply@blogger.com0tag:blogger.com,1999:blog-8899669012349017606.post-75990989598642955112009-10-14T08:19:00.000+08:002009-10-14T08:19:49.664+08:00Venture Capital 101: How a VC fund worksA General Partner (GP) raises a fund (say $100 million) which is usually a 10 year partnership between a group of Limited Partners (LP). This limited partnership of typically involves about 10 investors.<br />
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All the investing is made in new high risk ventures over the first five year period during which time the GP draws down the funds promised by the LPs ($100 million) at the rate of $2 million/year <br />
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The second five year period is the harvest time (although there might be some follow-on investing made during this time as well). <br />
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The ventures need to execute the 'exit' part of the strategy and the GP starts returning funds to the LPs. <br />
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The GP charges a management fee of typically 2%/year of the total for the first 5 years.<br />
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This management fee declines at a linear rate to zero over the second 5 year period (or a percentage of the assets is the consideration if those assets haven't been sold yet).<br />
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If the fund has doubled in value as a result of all of the exits (ie. $200 million), the LPs get all of their principle back plus all of the management fees. <br />
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Of the remaining $100 million, the LPs get 80% and the GP gets 20%.<br />
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See more at: http://www.mycapital.com/VenetureCapital101_MyCapital.pdfDALawsonhttp://www.blogger.com/profile/10031303804428493211noreply@blogger.com0tag:blogger.com,1999:blog-8899669012349017606.post-74588764161413726562009-10-13T23:53:00.000+08:002009-10-13T23:53:13.357+08:00Social Media and the Dispersion of AuthorityMcKinsey's article on "Building Private Sector Diplomacy" has interesting implications for all organisations. http://www.mckinseyquarterly.com/Building_private-sector_diplomacy_2450<br />
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Social media has 'dispersed authority' and customers and stakeholders are now not merely 'price-takers'. <br />
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Engaging with customers/clients is now truly about 'inter-action' and the more flexible and responsive an organisation is, the better it will survive change.DALawsonhttp://www.blogger.com/profile/10031303804428493211noreply@blogger.com0tag:blogger.com,1999:blog-8899669012349017606.post-75451162318369175092009-10-09T00:07:00.000+08:002009-10-09T03:00:48.699+08:00Technology Disruptively Enhancing EducationLearning material away from the class room using technology and using the classroom to reinforce the learnings is so simple yet so effective.<br /><br />Instead of trying to focus on what the teacher is saying with the distractions of the classroom and then staying up too late trying to solve the homework problems by texting, IMing, Facebooking and calling friends for the answers is the 'old way' of learning.<br /><br /><br />The smarter way to use technology such as the iPod or any delivery mechanism on a computer is for the material to be delivered in a format in which the student can listen and learn at their own pace, and in their preferred environment (like the bean bag in the bedroom without the distraction of someone cracking jokes on the other side of the room) and review and repeat the material.<br /><br />And then use the classroom time to go through the problems with the help of peers and the teacher. (This isn't my idea! This is what they are doing at the Menlo School in California.)<br /><br />Wouldn't it be fun to go back to school!?<br /><br />Well of course you can - for free - just go to iTunes University.... <a href="http://www.apple.com/education/mobile-learning/">http://www.apple.com/education/mobile-learning/</a><br /><br />ENJOY!DALawsonhttp://www.blogger.com/profile/10031303804428493211noreply@blogger.com0tag:blogger.com,1999:blog-8899669012349017606.post-64263087494045473112009-09-26T02:46:00.000+08:002017-09-24T16:56:27.620+08:00Commercializing Technology - Strategies for Australian CorporatesAre Australia's major industrial firms aggressive enough with their strategies for commercializing their R&D internationally?<br />
<br />
I have had two recent interactions with academics who have both caused me to ponder whether Australian corporate R&D is maximizing returns to innovation.<br />
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In a Working Paper from the Centre for Governance of Knowledge and Development, Regulatory Institutions Network (RegNet), College of Asia and the Pacific, ANU, Dr Hazel Moir questions: "Who Benefits? An empirical analysis of Australian and US patent ownership"<br />
(<a href="http://cgkd.anu.edu.au/menus/workingpapers.php">http://cgkd.anu.edu.au/menus/workingpapers.php</a>) (October 2008)<br />
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Firstly, there are several positive observations which can be made such as:<br />
<ul>
<li>Australia is in the top 10 countries holding patents in the US (not bad considering that the Australian economy is only 6% of the US economy).</li>
<li>A large proportion of the patents held by foreign companies in Australia are in the biotech and pharmaceutical sectors. (Perhaps this is because of the value of the investment in a patent because the lead times and costs involved in bringing these products to market is so significant but perhaps it also implies strong R&D credentials in those sectors in Australia.)</li>
</ul>
However, one of the most striking points made by Moir is that 92% of all patent applications in Australia are made by corporates, yet there is only 1 company in the top 100 companies that own patents in Australia which is headquartered in Australia! This means that all of the 'royalty payments and knowledge spillovers' flow overseas!<br />
<br />
Considering the phenominal technological advancements in such industries as mining and the extractive industries and our strong agricultural reseach and development, two industries for which Australian technology is world renowned, I wonder whether Australia's largest companies are sufficiently engaged in extracting rents from the global market for our knowledge and innovation?<br />
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The other academic interaction I had which has also been contributing to my thinking in this area a seminar I attended by Dr Richard Dasher, Consulting Professor and Director of the US-Asia Technology Management Center at Stanford University, entitled "Technology Strategies in Silicon Valley and Asia: Contrasting Patterns of Open Innovation"<br />
<a href="http://www.stanford.edu/group/us-atmc/cgi-bin/us-atmc/wp-content/uploads/2009/09/090924-402a-flyer.pdf">http://www.stanford.edu/group/us-atmc/cgi-bin/us-atmc/wp-content/uploads/2009/09/090924-402a-flyer.pdf</a><br />
<br />
Dasher made several very useful points comparing and contrasting the open style of innovation for which Silicon Valley is synonymous with the closed and incremental style of innovation typical of Japanese corporates.<br />
I was particularly motivated by a comparison of strategies which major corporations could employ to develop innovation as a tactical advantage, both offensively as well as defensively.<br />
According to Dasher, the requirements for successful open innovation are:<br />
<ul>
<li>an ability to evaluate external knowledge</li>
<li>an ability to integrate external knowledge (both tacit and explicit)</li>
<li>a clear vision of the direction and strengths of the company</li>
<li>brilliant understanding of market psychology and potential new markets (unmet needs)</li>
<li>flexibility in business planning</li>
<li>strategies to hedge risk</li>
<li>strong external sources of knowledge who will cooperate.</li>
</ul>
Australian corporates need to look at connecting with global technology markets as a source for new technologies to develop internally and for possible avenues for spinning off their own technologies in a global market. DALawsonhttp://www.blogger.com/profile/10031303804428493211noreply@blogger.com0tag:blogger.com,1999:blog-8899669012349017606.post-48783956388741882832009-04-05T10:28:00.000+08:002010-05-16T10:34:19.359+08:00Can you buy a Silicon Valley? Maybe (essay by Paul Graham, February 2009)A blog by Paul Graham: <a href="http://www.paulgraham.com/maybe.html">http://www.paulgraham.com/maybe.html</a><br />
<br />
A lot of cities look at Silicon Valley and ask "How could we make something like that happen here?" The <a href="http://www.paulgraham.com/siliconvalley.html">organic</a> way to do it is to establish a first-rate university in a place where rich people want to live. That's how Silicon Valley happened. But could you shortcut the process by funding startups?Possibly. Let's consider what it would take.The first thing to understand is that encouraging startups is a different problem from encouraging startups in a particular city. The latter is much more expensive.People sometimes think they could improve the startup scene in their town by starting something like <a href="http://ycombinator.com/">Y Combinator</a> there, but in fact it will have near zero effect. I know because Y Combinator itself had near zero effect on Boston when we were based there half the year. The people we funded came from all over the country (indeed, the world) and afterward they went wherever they could get more funding—which generally meant Silicon Valley.The seed funding business is not a regional business, because at that stage startups are mobile. They're just a couple founders with laptops. [<a href="http://www.paulgraham.com/maybe.html#f1n">1</a>]If you want to encourage startups in a particular city, you have to fund startups that won't leave. There are two ways to do that: have rules preventing them from leaving, or fund them at the point in their life when they naturally take root. The first approach is a mistake, because it becomes a filter for selecting bad startups. If your terms force startups to do things they don't want to, only the desperate ones will take your money.Good startups will move to another city as a condition of funding. What they won't do is agree not to move the next time they need funding. So the only way to get them to stay is to give them enough that they never need to leave.<br />
___How much would that take? If you want to keep startups from leaving your town, you have to give them enough that they're not tempted by an offer from Silicon Valley VCs that requires them to move. A startup would be able to refuse such an offer if they had grown to the point where they were (a) rooted in your town and/or (b) so successful that VCs would fund them even if they didn't move.How much would it cost to grow a startup to that point? A minimum of several hundred thousand dollars. <a href="http://wufoo.com/">Wufoo</a> seem to have rooted themselves in Tampa on $118k, but they're an extreme case. On average it would take at least half a million.So if it seems too good to be true to think you could grow a local silicon valley by giving startups $15-20k each like Y Combinator, that's because it is. To make them stick around you'd have to give them at least 20 times that much.However, even that is an interesting prospect. Suppose to be on the safe side it would cost a million dollars per startup. If you could get startups to stick to your town for a million apiece, then for a billion dollars you could bring in a thousand startups. That probably wouldn't push you past Silicon Valley itself, but it might get you second place.For the price of a football stadium, any town that was decent to live in could make itself one of the biggest startup hubs in the world.What's more, it wouldn't take very long. You could probably do it in five years. During the term of one mayor. And it would get easier over time, because the more startups you had in town, the less it would take to get new ones to move there. By the time you had a thousand startups in town, the VCs wouldn't be trying so hard to get them to move to Silicon Valley; instead they'd be opening local offices. Then you'd really be in good shape. You'd have started a self-sustaining chain reaction like the one that drives the Valley.<br />
___But now comes the hard part. You have to pick the startups. How do you do that? Picking startups is a rare and valuable skill, and the handful of people who have it are not readily hireable. And this skill is so hard to measure that if a government did try to hire people with it, they'd almost certainly get the wrong ones.For example, a city could give money to a VC fund to establish a local branch, and let them make the choices. But only a bad VC fund would take that deal. They wouldn't seem bad to the city officials. They'd seem very impressive. But they'd be bad at picking startups. That's the characteristic failure mode of VCs. All VCs look impressive to limited partners. The difference between the good ones and the bad ones only becomes visible in the other half of their jobs: choosing and advising startups. [<a href="http://www.paulgraham.com/maybe.html#f2n">2</a>]What you really want is a pool of local angel investors—people investing money they made from their own startups. But unfortunately you run into a chicken and egg problem here. If your city isn't already a startup hub, there won't be people there who got rich from startups. And there is no way I can think of that a city could attract angels from outside. By definition they're rich. There's no incentive that would make them move. [<a href="http://www.paulgraham.com/maybe.html#f3n">3</a>]However, a city could select startups by piggybacking on the expertise of investors who weren't local. It would be pretty straightforward to make a list of the most eminent Silicon Valley angels and from that to generate a list of all the startups they'd invested in. If a city offered these companies a million dollars each to move, a lot of the earlier stage ones would probably take it.Preposterous as this plan sounds, it's probably the most efficient way a city could select good startups.It would hurt the startups somewhat to be separated from their original investors. On the other hand, the extra million dollars would give them a lot more runway.<br />
___Would the transplanted startups survive? Quite possibly. The only way to find out would be to try it. It would be a pretty cheap experiment, as civil expenditures go. Pick 30 startups that eminent angels have recently invested in, give them each a million dollars if they'll relocate to your city, and see what happens after a year. If they seem to be thriving, you can try importing startups on a larger scale.Don't be too legalistic about the conditions under which they're allowed to leave. Just have a gentlemen's agreement.Don't try to do it on the cheap and pick only 10 for the initial experiment. If you do this on too small a scale you'll just guarantee failure. Startups need to be around other startups. 30 would be enough to feel like a community.Don't try to make them all work in some renovated warehouse you've made into an "incubator." Real startups prefer to work in their own spaces.In fact, don't impose any restrictions on the startups at all. Startup founders are mostly <a href="http://www.paulgraham.com/gba.html">hackers</a>, and hackers are much more constrained by gentlemen's agreements than regulations. If they shake your hand on a promise, they'll keep it. But show them a lock and their first thought is how to pick it.Interestingly, the 30-startup experiment could be done by any sufficiently rich private citizen. And what pressure it would put on the city if it worked. [<a href="http://www.paulgraham.com/maybe.html#f4n">4</a>]<br />
___Should the city take stock in return for the money? In principle they're entitled to, but how would they choose valuations for the startups? You couldn't just give them all the same valuation: that would be too low for some (who'd turn you down) and too high for others (because it might make their next round a "down round"). And since we're assuming we're doing this without being able to pick startups, we also have to assume we can't value them, since that's practically the same thing.Another reason not to take stock in the startups is that startups are often involved in disreputable things. So are established companies, but they don't get blamed for it. If someone gets murdered by someone they met on Facebook, the press will treat the story as if it were about Facebook. If someone gets murdered by someone they met at a supermarket, the press will just treat it as a story about a murder. So understand that if you invest in startups, they might build things that get used for pornography, or file-sharing, or the expression of unfashionable opinions. You should probably sponsor this project jointly with your political opponents, so they can't use whatever the startups do as a club to beat you with.It would be too much of a political liability just to give the startups the money, though. So the best plan would be to make it convertible debt, but which didn't convert except in a really big round, like $20 million.<br />
___How well this scheme worked would depend on the <a href="http://www.paulgraham.com/cities.html">city</a>. There are some towns, like Portland, that would be easy to turn into startup hubs, and others, like Detroit, where it would really be an uphill battle. So be honest with yourself about the sort of town you have before you try this.It will be easier in proportion to how much your town resembles San Francisco. Do you have good weather? Do people live downtown, or have they abandoned the center for the suburbs? Would the city be described as "hip" and "tolerant," or as reflecting "traditional values?" Are there good universities nearby? Are there walkable neighborhoods? Would nerds feel at home? If you answered yes to all these questions, you might be able not only to pull off this scheme, but to do it for less than a million per startup.I realize the chance of any city having the political will to carry out this plan is microscopically small. I just wanted to explore what it would take if one did. How hard would it be to jumpstart a silicon valley? It's fascinating to think this prize might be within the reach of so many cities. So even though they'll all still spend the money on the stadium, at least now someone can ask them: why did you choose to do that instead of becoming a serious rival to Silicon Valley?Notes[<a href="" name="f1n">1</a>] What people who start these supposedly local seed firms always find is that (a) their applicants come from all over, not just the local area, and (b) the local startups also apply to the other seed firms. So what ends up happening is that the applicant pool gets partitioned by quality rather than geography.[<a href="" name="f2n">2</a>] Interestingly, the bad VCs fail by choosing startups run by people like them—people who are good presenters, but have no real substance. It's a case of the fake leading the fake. And since everyone involved is so plausible, the LPs who invest in these funds have no idea what's happening till they measure their returns.[<a href="" name="f3n">3</a>] Not even being a tax haven, I suspect. That makes some rich people move, but not the type who would make good angel investors in startups.[<a href="" name="f4n">4</a>] Thanks to Michael Keenan for pointing this out.Thanks to Trevor Blackwell, Jessica Livingston, Robert Morris, and Fred Wilson for reading drafts of this. <a href="http://news.ycombinator.com/item?id=497951">Comment</a> on this essay.DALawsonhttp://www.blogger.com/profile/10031303804428493211noreply@blogger.com0tag:blogger.com,1999:blog-8899669012349017606.post-86496761878343083392009-01-10T02:02:00.001+08:002012-06-24T11:54:04.685+08:00Success factors for foreign market entryI was reviewing a 10 year old publication I wrote for the Australian government this week. (<a href="http://www.dfat.gov.au/publications/catalogue/eaaubp10.pdf">http://www.dfat.gov.au/publications/catalogue/eaaubp10.pdf</a>). And while the data is dated I was struck by the fact that the success factors and pitfalls I listed remain timelessly relevant - no matter which foreign market you're trying to enter:<br />
<br />
<strong>Success Factors ...</strong>The basic ingredients for successful entry into any market are especially valid when targeting Japan. In particular, companies have failed in Japan because they did not devote sufficient time to preparation (ie, gaining an understanding of the market and developing an appropriate market entry plan). This is especially crucial for entering the Japanese housing market.<br />
<br />
Long-Term Vision, Long-Term Strategies<br />
A long-term perspective with targets and strategies to:<br />
· know the market, the competitors, the competitive advantage<br />
· identify and qualify opportunities, target market segments, develop specific goals and tactics<br />
· meet long-run goals by achieving short-run rolling plans<br />
· develop team vision for the whole enterprise or project.<br />
<br />
Capabilities<br />
Measure resources and risks to identify and ensure:<br />
· adequate capital to sustain market penetration and setup costs<br />
· necessary human resources with the appropriate leadership and creative ability, technical, interpersonal and language skills, and willingness to adapt to client's culture<br />
· reliable network of materials suppliers and sub-contractors (whether in Australia, Japan or<br />
elsewhere) to meet demands and scale of operating in Japanese market.<br />
<br />
Commitment<br />
Recognise necessity to have:<br />
· expectation that establishing a market position and achieving profits may take several years<br />
· an ability to interpret short-term results in the longer-term perspective<br />
· ability to evaluate, refine and continue to monitor market information with the aim of constant improvement.<br />
<br />
... and Common Pitfalls and Problems<br />
Not surprisingly, there is a wide range of pitfalls and problems that can impede a foreign company’s successful entry into the Japanese market, quite apart from the regulatory and technical issues referred to earlier. However, the majority of these can be minimised or avoided by proper research, planning and preparation.<br />
<br />
Some of the most common pitfalls and problems include:<br />
· inexperience in dealing with a foreign culture and in particular the Japanese business environment, as well as lack of suitably skilled staff, leading to misunderstandings with Japanese clients and contacts<br />
· unfamiliarity with, and insufficient research beforehand into, the basic processes of exporting, resulting in delivery delays, errors and mishaps<br />
· insufficient attention to proactively managing transport and logistics to ensure safe and timely delivery of products to Japanese client<br />
· delay in responding promptly and fully to all communications from Japanese client<br />
· insufficient flexibility and preparedness to modify one’s products and services to meet the precise specifications and high quality standards of Japanese customers<br />
· over-reliance on a competitive price alone as the principal selling point of one’s product or service<br />
· insufficient understanding of the high minimum quality standards expected in Japan for any product or service, regardless of low price<br />
· insufficient differentiation of one’s product in terms of design, materials, novel features or functions, and assembly techniques and packaging<br />
· inability or reluctance to meet after-sales service expectations<br />
· insufficient staff with necessary skills to satisfy high Japanese standards and expectations of customer service<br />
· difficulties in training Japanese labour in construction methods and material usage.<br />
<br />
Some Australian companies have already encountered a number of these problems, including cases where the problems put an end to an Australian company’s efforts to tackle the Japanese housing market for the time being.<br />
<br />
The Fundamental Pitfall - Inadequate Financial Planning<br />
Probably the most common and fundamental problems encountered are financial ones, ranging<br />
through:<br />
· insufficient basic capital allocation for a long-term market entry strategy and all the costs involved, with sometimes a two or three year wait before making a profit<br />
· unpreparedness for the many hidden costs that can arise, most commonly in shipping and warehousing, as well as in developing and maintaining a commercial relationship with the Japanese partner<br />
· strong pressure from Japanese customers/partners to reduce prices, which can significantly erode the foreign supplier’s profit margin<br />
· failure to plan around a considerable range of possible foreign exchange movements - for example, the yen has moved from Y80:US$1 in mid-1995 to almost Y130: US$1 by late 1997 (and from Y60: A$1 to as high as Y90: A$1 during the same period).DALawsonhttp://www.blogger.com/profile/10031303804428493211noreply@blogger.com0tag:blogger.com,1999:blog-8899669012349017606.post-47884732151945723352009-01-07T04:25:00.000+08:002009-10-31T05:39:17.059+08:00Online Selling in a Slumping EconomyAmazon.com seems to have proven once again the benefits of buying and selling online.<br />
<br />
And now that Austrade has commenced collaboration with Amazon to make their <em>Fulfilment by Amazon </em>service available to Australian companies, it seems that we will see more Australian products available online in the US. This service will make it cheaper for Australian companies to get their products into the US and will make the products cheaper for US consumers.<br />
<br />
Contact me if you are an Australian company with a neat consumer type product you want to bring into the US market or register here:<br />
<br />
<a href="http://www.austrade.gov.au/Sell-on-Amazon/default.aspx">http://www.austrade.gov.au/Sell-on-Amazon/default.aspx</a>DALawsonhttp://www.blogger.com/profile/10031303804428493211noreply@blogger.com0