4 Key Takeaways from The Alibaba IPO

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I wrote about this in this week’s CoInvent newsletter. Just I’d post my thoughts here again. Here is the original content from the newsletter.

There certainly has no lack of coverage of Alibaba’s IPO last week. For those of us living in the States, Alibaba may not be as relevant to our lives as, say, Amazon.com. However, when you take over 80% of China’s e-commerce market, you can take over the world. According to a Reuters report, Alibaba IPO ranks as world’s biggest after additional shares sold – $25 billion raised, surpassing the 2010 record of $22.1 billion set by Agricultural Bank of China.

As an entrepreneur, here are a few things that I learned from the Alibaba story:

  1. Your customers are the king! Treat them well and they will take care of the longevity of your business
  2. No matter whether you are running a 10-person startup or Fortune 500 company, have a global strategy, because the majority of your customers in 10 years will be coming from developing countries – assuming if your business can last that long
  3. Silicon Valley is not the only game in town. Now you can pretty much build a household startup name from some top cities in the rest of the world – LA, New York, Chicago, London, Berlin, Hong Kong, Beijing, Seoul, New Delhi, etc
  4. Have a revenue strategy for your startup from the get-go. At one point, Alibaba had no revenue and almost got killed by eBay in the China market. That’s when they introduced Taobao (淘宝网), which is now one of the world’s top 10 most visited websites according to Alexa

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Introducing CoInvent Startup Summit

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One of the benefits about going national with CoInvent is the fact that now we can make things more scalable and impactful. I’ve always wanted to start a national conference series which provides great and useful content and networking opportunities for startups, entrepreneurs and investors alike. I am glad that we can finally launch it today – introducing CoInvent Startup Summit.

We are launching this conference series only in New York for now. We should be able to bring it to our west coast markets in early 2015. This year’s startup summit focuses on addressing the “Software Eating The World” theme. Via multiple 20-minute talks, we are hoping to cover a variety of industries that technologies are disrupting – including fashion, social, media, education, banking, just to name a few. Each of these sessions will be structured via panels or individual talks. As the organizer, CoInvent will strive to bring only A-list speakers to this forum. We know how little time entrepreneurs have and certainly don’t want to disappoint you with mediocre content.

With this announcement, we are introducing a few speakers as well. You can check them out here. More speakers will be added in the upcoming weeks. Stay tuned. Early bird tickets are available now. We hope to see you on November 7th at this inaugural event. Feel free to contact us if you have any speaker suggestions.

Apple’s Big Announcements

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iPhone 6 and 6+ both have become available today (Sept. 19). In this past Monday’s newsletter, I shared my thoughts on Apple’s most recent three announcements: iPhone 6 and 6 Plus, Apple Watch, and Apple Pay. You can read this entire newsletter here. I’m reposting it here:

Apple made three big announcements during last week’s Apple event – iPhone 6 and 6 Plus, Apple Watch, and Apple Pay. Here is my take on either of these:

a. New iPhone: In this category, Apple is not the innovator anymore. Samsung had bigger screens for its phones a while ago. These days, even Xiaomi’s phone screens are bigger than the current iPhone. But why do people still go nuts about Apple’s new iPhones. The answer is simple. Because it’s Apple.  Apple is capable! Apple can deliver! Even Tim Cook said himself: “We didn’t have bigger-screen iPhones because the technology wasn’t ready. But it’s ready now!”

b. Apple Pay: Apple Pay uses a combination of NFC and Touch ID for authorizing mobile payments. According to Bank Innovation, Apple is getting 15 cents of a $100 purchase. This is an unprecedented deal, giving Apple a share of the payments’ economics that rivals such as Google do not get for their services.

Apple Pay is also headed for China through a partnership with UnionPay. In that market, Apple Pay will face very formidable challenges from existing payment players such as WeChat and Alipay. Just this morning, TechInAsia reported that Tencent’s WeChat just introduced in-store payments for Dairy Queen and 8 other chains. That’s exactly what Apply Pay is doing. Back in January, Alibaba also said that about 30,000 brick-and-mortar outlets were accepting in-store payments via its Alipay app.

c. Apple Watch: This move from Apple is inevitable. Wearable is the future. Enough good things said about the Apple Watch. But here are a few concerns I have:

1. Apple Watch can currently only be paired with an iPhone to be functional. Does that mean when you go for a jog, you need to bring your iPhone with you? A huge inconvenience.

2. Watch has a much smaller user interface than your typical iPhone or iPad. If you are used to the touch screen interfaces on your current iOS devices, it would be very hard to apply the same user gestures on a smaller watch screen.

3. The biggest achilles heel for the Apple Watch is probably its battery life, which is reportedly only able to last for less than a day. Apple has from now to early next year to tackle this problem before the Apple Watch gets shipped. From there, the user expectations will either go through the roof or tank like the Titanic.

Apple definitely had its most glorious day since the iPhone launch. Can’t wait to enter the new Tim Cook era!

Our newsletter goes out each Monday. You can subscribe at www.GetCoInvent.com.

It’s Just A beginning for Alibaba

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Alibaba officially priced its U.S. initial public offering for $68 per share today, which values the company at $167.62 billion, making it among the largest IPOs in history. Alibaba will trade on the NYSE tomorrow. If you have no idea what Alibaba does, I suggest you watch this documentary – The Alibaba Story – Crocodile in the Yangtze.

Alibaba has captured 80% of Chinese e-commerce market and is aiming to do the same in the west. Under Jack Ma’s leadership, I believe the IPO is just a beginning of a new era for this global e-commerce giant. So what is Alibaba and what does it do? I get asked this question a lot. Check out the following videos.

 

Overview

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Recap of CoInvent LA Launch Event

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Last night, we held our first-ever CoInvent event in Santa Monica. Over the course of last month, folks have been warning me how hard to get a big crowd together in LA, unlike New York, because everybody will be driving from different places. But over 350 people signed up for last night’s event. We had a great turnout.

I want to give a big shout-out to our big sponsors and partners that helped make last night’s event possible – General Assembly, Handy, and FreezeCrowd. Special thanks to our guest speaker and my friend – Espree Devora, known as “the Girl who Gets it Done,” from #WeAreLATech.  Here are some memorable moments from the event.

On TechStars’ Equity Back Initiative

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TechStars just announced a new “Equity Back Guarantee” program last week. David Cohen, TechStars’ founder, wrote in a blog post, “we firmly believe in the value of the Techstars accelerator program and in the long term value of our network. This makes it easy to take this step to ‘put our equity where our mouth is’… At the end of the Techstars program, your company will have 3 business days to lower or eliminate our equity position if they’re not satisfied with the value of Techstars.

I am a firm believer of this type of “founder-friendly” initiative being implemented to a startup accelerator due to the facts that:

  1. this will certainly increase the number of quality startups applying to TechStars’ programs in the future
  2. this positions TechStars as a true founder-centric startup accelerator. In today’s world inundated with startup accelerators, this is a real value proposition strategy
  3. this shows TechStars’ confidence in its value-add role to startups enrolled in its program, which in turn boosts investors’ confidence being part of its program and attracts more sponsors and partners

However, this kind of ballsy initiative doesn’t come without risks – e.g. founders can now leave the program without giving away any equities if they are not satisfied with the program. TechStars does invest resources – money + space + its network – in each startup it backs. As of now, it’s hard to predict the long term effects of such an initiative. Obviously, all eyes are on TechStars now on how this works in the near future. More startup accelerators might jump on the bandwagon if this turns out to be working well.

The Three Types of Resources Every Startup Needs

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I came across an article this weekend named “Bootstrapping re-defined: a comprehensive strategy for startups.” David Shelters, the author, mentions the three types of resources vital for every tech startup are financial, knowledge-based, and relational resources. Recently I happen to be pondering about the things we are doing at CoInvent to better our community members’ experiences. The answer is actually pretty simple – providing better access to finance, knowledge, and connections – the three resources mentioned above.

Here, I want to illustrate the ubiquitousness of these three resources in everything we do in the startup ecosystem. So let’s break it down to different industry players that you and I are familiar with and use them as examples – accelerators, co-working spaces, VC firms, trade schools, event/conference platforms.

1. Accelerators

  • Examples: YCombinator, Techstars, etc
  • Financial resource: Startups meet with investors at demo days
  • Knowledge-based resource: YC has a one-day event called “Startup School” where first-time founders can learn from more experienced-founders and investors
  • Relational resource: Most startup accelerators has a mentor network where startups can connect with mentors

2. Co-working Spaces

  • Examples: WeWork, RocketSpace, Cross Campus, Blankspaces, etc
  • Financial resource: Most coworking spaces host events where investors are invited to connect with founders
  • Knowledge-based resource: Seminars and conferences hosted at coworking spaces offer useful information/knowledge to founders
  • Relational resource: Networking opportunities are ingrained in all coworking spaces, esp. those 24-7 ones. When I was working out of Cross Campus in LA, I had struck up many great conversations with other startups working there

3. VC Firms

  • Examples: Andreessen Horowitz, Sequoia, True Ventures, USV, Spark, etc
  • Financial resource: This is the primary role that a VC firm plays – funding promising and world-changing startups
  • Knowledge-based resource: Many VCs are speaking at conferences and writing blog posts to share experiences in order to help founders. If you don’t know this one already, definitely check out www.avc.com
  • Relational resource: VC firms, such as Spark Capital, True Ventures, have been hosting events to connect founders and share resources

4. Trade Schools

  • Examples: General Assembly
  • Financial resource: Most trade school students get a job after they graduate, which provides income opportunities in return
  • Knowledge-based resource: This is the primary role a trade school play – teaching and providing knowledge to students
  • Relational resource: Trade schools usually have relationships with local startups and small businesses which they can bring in to hire their graduates

5. Content/Events/Conferences Platforms

  • Examples: CoInvent, LeWeb, etc
  • Financial resource: Capital can be provided directly by the organizers (i.e. via a startup competition), or via a pitch/demo event that investors are brought in as judges or panelists
  • Knowledge-based resource: Valuable information and insights are shared during conference/event sessions
  • Relational resource: Plenty of networking opportunities at events to connect with other startups and investors

As you see, the ecosystem has resources for everybody. Bootstrapping founders need to know how to get affordable resources. For the funded startups, they can afford high-end conferences or premium events since they have more capital to deploy. The rule of thumb is this – if you are a hustling entrepreneur, you shouldn’t be starving for resources, because most of these resources can be acquired for free or with minimal cost.

The 15 Most Profitable Industries

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This is a list of 15 most profitable industries compiled by Sageworks, a financial information company. Data is collected based on an analysis of the financial statements of privately held companies. All industries are ranked by net profit margin over the last 12 months. I’ve met professionals from all these industries at our past events and conferences. Not surprisingly, accounting and legal services are topping this list as the #1 and #2 most profitable sectors.

 

Why Design Matters for Your Startup

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Now that startups have become a legitimate option for lots of young folks fresh out of college, it’s important to keep in mind that not all startups are created equal. If you talk to the digerati, they will tell you what separates good startups from the mediocre ones and what separates the insanely great startups from the great ones. Often times, you hear the word “design” a lot! Indeed, great designs can make your startup stand out from the herd, big time! Personally I tend to spend longer time with web and mobiles apps that are more visually appealing to my own sense of “design”. I just glanced through my phone’s screen and selected a few design-oriented apps – that I use religiously everyday – to show you what I really mean here.

1. Twitter -> Simple

I fire up my Twitter app whenever I am waiting in line in a postal office or having to sit through a tedious commercial during an NBA game. The Twitter mobile app is simply and addictive. I guess simplicity is what makes Twitter so great, especially for entrepreneurs thirsty for knowledge whenever and wherever possible.

2. Circa -> Clean

I love news apps like Circa. Co-founded by Matt Galligan, Circa is the kind of news app that can literally change your life. I now get all my breaking news from Circa – i.e. Malaysia Flight 17 & Gaza Conflict. And the clean design takes away all the unnecessary distractions so you can just focus on what matters – reading.

3. Instagram -> Minimal

Instagram is a photo sharing app. I am happy it’s designed that way. The designers at Instagram make the app just about taking photos and sharing. The single focus made it one of the most viral apps ever created. That’s why Facebook snapped it up so quickly. And it doesn’t hurt to have celebrities and brands endorse it too – Taylor Swift, Lebron James, Nike, Red Bull, etc.

4. Skype -> Practical

I believe mobile apps should be like utilities, something we use everyday for practical purposes. Skype is definitely one of those that have all the “utility” characteristics to me. I love how practical it is when it comes to team collaborations & communications. It is a must-have work app for my everyday life. The new iPhone design makes it even more practical.

5. Pocket -> Organized

Pocket is my “read it later” app. As an entrepreneur, I like to make things organized to make them manageable. Pocket is just one of those apps that make my life a little easier. Everyday, I stumble upon many useful articles and blog posts on Twitter, Techmeme, or someone’s newsletter. If I don’t have time right then to read them, Pocket simply lets me save them to read later. It’s one of my favorite mobile apps.

You may have noticed that I showcased lots of news apps in this lineup – well, Twitter is kinda like a news app to me. That’s just my personal taste. I am sure you can find a multitude of well-designed apps in the e-commerce, payment, or entertainment categories as well. But you get my point. “Good design” makes your startup stand out big time. Good design is what Steve Jobs means by “insanely great!” Our next Demo Night event only focuses on “design-driven” startups. Check it out here.

 

Best Steve Jobs Quote Ever

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I came across this quote again yesterday. It’s, indeed, the best quote ever from the legendary Steve Jobs. It keeps me going everyday. Thought I’d share it here just for the record.

Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary. – Steven Paul Jobs