Heidi Roizen is a very well-known Silicon Valley venture capitalist and entrepreneur. I first met Heidi years ago […]
UPDATE: This February 3, 2016 post on Uber deserves an update. This week Uber announced that it lost $800 Million in its 3rd quarter. That’s correct, $800 Million in only three months. The Uber announcement tries to spin the loss as good news for Uber as ” increased by only 25% over the third quarter last year. An $800 Million quarterly loss is right up there in the same league with Trump lost money. I guess we need to remember Trump’s admonition that debt is good, and it’s ok to lose other people’s money. Uber’s announcement goes on to project continuing losses projected to be greater than $3 Billion next year, as Uber continues its plans for an apparent IPO for brain dead investors.
Since I joined the high-tech industry years ago, Silicon Valley has had a fundamental need for highly educated engineers and scientists that could not be filled by American graduates. This reality has been bemoaned by Congressional politicians for decades now, who have essentially done nothing to increase the emphasis on STEM education (science, technology, engineering, and math) for resident Americans, and who instead chose to provide the H1-B Visa enabling Silicon Valley high-tech companies to employ immigrants to fill these crucial positions, and has enabled the high-tech industry to thrive. The election of Donald Trump has changed all that. His platform is almost completely devoid of any acknowledgment of the crucial importance of high-tech innovation to U.S. productivity and economic growth, the need for H1-B immigrants and the parallel need for greater investment in STEM education.
In the simplest terms, the concept here is how a company can potentially increase both revenue and market share by executing a strategy to work with direct or indirect competitor(s) to the benefit of both, a win-win. The old Arab saying, “My enemy’s enemy is my friend” also applies. It can also be as simple as joining an ad hoc collaboration among a group of companies or a standards group to create market order and simplicity from an overcrowded and confused market. Customers invariably respond to products that provide the greatest value and paths to long-term increased value and cost reduction. Collaboration or “Co-opetition” is one of the most effective means to achieve that goal, particularly in an economic environment where “flat is the new up.”
The release of the Panama Papers is of such potential significance and magnitude that it is difficult to know where to begin. I have decided that I will begin with the most interesting and relevant topic for me, the Canadian angle: possible links from Mossack Fonseca’s tax haven shell companies to the Vancouver BC real estate market, the current Canada Revenue Agency investigation of KPMG’s Canadian offshore tax haven scheme, and potential conflicts of interest within CRA. The KPMG and CRA issues have been extensively investigated and reported by CBC News, and also discussed on this site.
It dawned on me that my blog post from July 2013, still has particular relevance to the current situation in Canada. I discuss the longer term structural issues confronting Canadian entrepreneurs and Canadian venture capital. When I first arrived in Canada in 1989, I learned quickly that the Vancouver startup ecosystem was nothing like what I knew from Silicon Valley.
British Columbia and New Zealand share many economic similarities, except that New Zealand has way more sheep, are way better at rugby and are better sailors. Both economies are focused on natural resource exploitation, tourism, wine, and horticulture. Both economies have similar populations though we have more space and are not isolated in the South Pacific. The motion picture industry has been a major factor in both economies, but both are highly vulnerable to foreign exchange fluctuations. Both economies have made efforts to diversify into high tech, pouring millions into development of startups. Both economies have had modestly successful companies in high tech, which have been bought out and moved out. The crucial difference may be New Zealand’s pragmatism about how to deal with this economic reality. British Columbia could learn from New Zealand.
Heidi Roizen is a very well-known Silicon Valley venture capitalist and entrepreneur. I first met Heidi years ago at a European COMDEX event in Nice when she was still in her entrepreneurial phase. Since that time she has gone on to fund numerous startups, and is now a Partner at Draper Fischer Jurvetson. In this blog, Heidi is sounding the alarm to entrepreneurs that, as she says, the market has already turned for the worse. She has been there before and offers her sage advice to this generation of entrepreneurs on how to survive. IMHO, she is spot on.
So Trump is Uber and conversely, Uber is Trump. This comparison has been made by both supporters and opponents, so as they say, there must be some truth in it. Both Uber and Trump have based their strategies on disrupting the status quo and the establishment with politically incorrect behavior. My argument here is simply that while the disruption fostered by both Trump and Uber may appear attractive at first glance, and desirable to many, in both cases, there are much deeper ethical issues that are only now coming to the forefront.
With good intentions, and also a good dose of Facebook business strategy to expand its base of users, Mark Zuckerberg has struck out to promote Free Basics, a free limited Internet for the poor in less developed countries sponsored by Facebook and its local telecommunications partners. While on the face of it Free Basics would seem to have merit, Zuckerberg has run into a wall of opposition. On close inspection of the details, Facebook’s problem, despite all of its global corporate sophistication, appears to be naïveté about the foreign markets it is trying to enter. It is possible to argue that Zuckerberg and Facebook have the best of intentions and sound arguments. But the best of intentions and sound arguments mean nothing if the key element lacking is a clear understanding of the current foreign market, and the crucial need to adapt to it or fail. Zuckerberg could have looked no further back than 2013 for clues to why he has failed.