Perfect timing

“The economic situation is apparently so grim that some experts fear we may be in for a stretch as bad as the mid seventies … when Microsoft and Apple were founded.”

Paul Graham

“We haven’t got much money, so we have to think”

Ernest Rutherford

Trade Me was launched in 1999, just as the first tech bubble burst spectacularly.

I wonder which companies will look back on the current financial crisis and think that it was possibly the perfect time to launch?

Feel free to nominate some possible candidates

UPDATE: I didn’t realise when I posted these quotes this morning, but today is actually the 100th anniversary of Ernest Rutherford’s award of the Nobel Prize for Chemistry.  :-)

Rugby World Cup 2011

I’m surprised there hasn’t been more said about the draw for the 2011 Rugby World Cup, which was held last week.

Some people might try to tell you that there is still a lot to happen between now and 2011, with qualifying tournaments to be held etc, and lots of time for the form of the contenders to come and go.

But I think we pretty much have the information we need now to guess the likely quarter- and, dear I say it, semi-finalists.

There are basically nine teams who are likely quarter finalists in 2011:

  • The tri-nations : New Zealand, Australia and South Africa;
  • The home nations: England, Ireland, Scotland and Wales;
  • France; and
  • Argentina.

There are only three countries outside of that group who have ever made the quarter-finals at a World Cup:

  • Fiji in 1987 (on points difference over Argentina & Italy) and again in 2007 (thanks to an upset victory over Wales)
  • Canada in 1991 (coming through a very weak pool containing France, Fiji and Romania)
  • Samoa in 1995 (again at the expense of Wales)

Considering possible upsets this time, it would seem Pool D is the place to look.  Wales will again need to beat both Fiji and another qualifier from Oceania (I presume Samoa, given Fiji and Tonga are already qualified?)  As we’ve seen, they have been known to lose these sort of games in the past.

But assuming that doesn’t happen, we’re left with nine teams vying for eight spots, so only one of those will miss out.

It looks like Scotland is the most likely candidate, as they have ended up in Pool B, with Argentina and England.

So, the quarter final match ups are:

  1. England v Wales
  2. France v Australia
  3. NZ v Ireland
  4. South Africa v Argentina

Australia has the most difficult assignment here – they have a pretty weak pool, with just Ireland and Italy to beat, and then go straight into a tough semi-final against France.  We all know what happened to NZ under pretty similar circumstances in the last world cup.

On recent form, it’s hard to pick a winner from England and Wales.  They have three wins each from their last six matches, with all games won by the home team. See: http://www.pickandgo.info/

Either way, it’s hard to imagine either of those teams beating the winner of Australia v France in the first semi-final.

In the bottom half of the draw you’d have to back NZ and South Africa to win and face each other in the semi-finals, with the winner then odds on in my book to win the following week in the final too.

So, there you go … to make the final the All Blacks will need to beat France in the pool match and then get up over South Africa in the semi-final.

It’s not at all out of the question that the final could be a repeat of 1987, with the All Blacks coming up against France at Eden Park.

What do you think?

David Kirk

I was sorry to hear that David Kirk has stood down as CEO of Fairfax in Australia.

It would seem he jumped before he was pushed, but who knows.

Over the last couple of years, I’ve lost count of the number of times I’ve had to correct people about how Fairfax, and David specifically, handled the acquisition of Trade Me.  The starting assumption seems to be that shortly following the purchase we would have been inundated by suits.  But, at least in the 18 months that I worked there following the sale, that didn’t happen. 

They took an active interest, for sure, but seemed happy to let us get on with the job.  I think he deserves a lot of the credit for that.

No doubt there will be some exciting opportunities ahead for him.

Likewise, it will be interesting to watch and see how Fairfax and Trade Me fare as a result of this change.

31-December

I notice the Sunday Start Times today picked up my story about Malcolm Gladwell’s theory (from Outliers) about the birth dates of top sports people and specifically how it relates to the All Blacks:

Early arrivals get jump start

The theory is that when age-group teams are selected those that are born just after the cut-off date have an advantage as they will be slightly older, and that advantage will then be compounded by the additional coaching and playing opportunities they have over the years, until they actually are better than others born later in the year.

And the data appears to back this up.

Here is a graph of the birth months of the 45 All Blacks from this year:

2008-all-blacks-birth-months

In this squad 55% of the players are born in the first four months of the year, where you would only expect this to be 33% if the dates were evenly distributed.

So, those of you who were born in the second half of the year now have a good explaination for why you never made it, while those of us born in the first half need to find another reason (my excuse: I was over the weight limit for my own age group when I was a kid, so I was playing against older kids anyway).

Looking at this, I was especially interested to see that there are five of the current squad born in December.

allblacks.com

As if to prove that there is always an exception to every rule, there is even one player in the current squad born on the 31st of December.

If the theory is to be believed this is the single worst possible day for an aspiring rugby player to be born, as they will be the youngest candidate for every age-group team, constantly having to compete with kids who are older and therefor bigger and more co-ordinated etc.

So, for somebody born at the end of December to make it they must be an exceptional player.

That player: Richie McCaw.

Now that’s an outlier!

Image: allblacks.com

Where do I find Google?

Google has published their list of the top search terms for the year:

Top 10 searches on google.co.nz in 2008

  1. games
  2. bebo
  3. youtube
  4. trade me
  5. lyrics
  6. google
  7. map
  8. hotmail
  9. tv
  10. weather

Half of these are site specific brand names (in bold) – meaning that rather than using Google the person doing the search could have simple added .com or .co.nz to the term and entered the URL directly into their browser and found the site they were looking for directly.

(the same trick would actually also work with most of the other terms too, but it’s not so obvious that people searching for these things were after the corresponding .com)

The one that will really surprise many web developers, I suspect, is “Google” itself – the sixth most popular search this year.  

How do you explain that?  What’s the mental model those users have of the web and of search engines specifically?

Most technology people will, I suspect, find it difficult to understand the sort of person who does this sort of search, but that’s exactly what we need to do if we’re going to build products these people will like to use and will tell their friends about.

Now Hiring: Web Designer

Interested? Check out the job description.

Too clever

Jason from 37signals last week posted one of my favourite quotes about complexity, and specifically complex systems:

“A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over, beginning with a working simple system.”

John Gall, from his book Systematics

Here is another along the same lines:

“There are two ways of constructing software; one way is to make it so simple that there are obviously no deficiencies, and the other way is to make it so complicated that there are no obvious deficiencies. The first method is far more difficult.”

C. A. R. Hoare, the inventor of the Quicksort algorithm

And, why do we think complexity is desirable in the first place?

“People often misinterpret complexity as sophistication”

Niklaus Wirth, the father of Pascal

Are you trying to be too clever?

Outliers

I just finished reading Malcolm Gladwell’s new book, called Outliers.

I recommend it.

Just like his previous two books (The Tipping Point & Blink) it’s full of great stories that will make you think a lot.  

For example:

  • Why are so many great sports people born in the first half of the year (more than half of the 45 All Blacks this year were born in January, February, March or April)?
  • Why are Asians generally better at maths?
  • Why is a pilot with a greater respect of authority more likely to have an accident?
  • What do The Beatles and Bill Gates have in common?

There is also a great section about the importance of meaningful work.  

He defines this as having:

  • Autonomy – i.e. you are your own boss
  • Complexity – i.e. you find the work engaging
  • A connection between effort and reward

Which of those criteria are you getting from your current job?

You can get a taste of all of this from his presentation from the Pop!Tech conference held earlier this year.

If you’re struggling to find a good gift this Christmas, you could do a lot worse than one of his books.

The Story of SuccessThe Power of Thinking Without ThinkingHow Little Things Can Make a Big Difference

And, for those of you who have already read the book, a question to think about – what have you spent 10,000 hours working at?

PS Garr Reynolds beat me to this post by about 12 hours and has lots of links to other Malcolm Gladwell presentations if you’re interested.

Now Hiring: Web Designer

Interested? Check out the job description.

Now Hiring – Web Designer

I’m looking for a contract web designer to work with me on a number of different projects, starting as soon as possible.

I have enough work to keep you busy for the next three or four months, at least, perhaps three days per week.

And, if it all works out, there is likely more work available after that.

You are the perfect person if …

  • You have empathy for users and know what it takes to make a website feel obvious
  • You have a good understanding of web conventions, and a bias for following these rather than reinventing the wheel on every project
  • You can quickly create a rough design, without fussing about making every pixel perfect
  • You have the ability to add a touch of brilliance to an existing design or outline
  • You understand what can be easily achieved in HTML & CSS (you don’t have to be a technical person, but you should at least have sympathy for and be able to communicate clearly with those who are)
  • You’re comfortable having other people critique your work and push you towards an even better solution
  • You don’t take yourself too seriously
  • You can manage your own time, and have a strong sense of initiative
  • You have enthusiasm and motivation to burn

I can offer a good mixture of interesting work, from new ideas to existing successful sites which require some re-work.

This will be a relaxed arrangement – I expect to spend some time with you each week, but most of the time you will be free to work where and when you prefer.

I’ll measure you based on what you produce rather than how long it takes you.

To apply please send me an email with:

  • Your details
  • Examples of your work – show me something you’ve created that you think is remarkable
  • A list of your three favourite websites (excluding Trade Me and Google) – tell me specifically what you like about each of them
  • Your preferred rate
  • Anything else that demonstrates how you are smart and get things done

My email address is on the right

I hope this is an exciting opportunity for somebody reading this.

If not you, then perhaps you know somebody who might be interested that you can send this to?  (thanks in advance for the referral)

I’ll look forward to hearing from you.

Bring something special

Good luck to everybody who is heading to Taupo this weekend to cycle some or all of the way around the lake.

I won’t be there this year, but I have been spending quite a bit of time on my bike lately in a desperate effort to be ready for the bike leg in a team relay at Challenge Wanaka in January.

Here’s a simple mantra from Lance Armstrong which might help you keep the pedals turning:

“Pain is temporary, quitting lasts forever!”

Possibly something to keep in mind as you approach Hatepe Hill.

And this, from somebody contemplating a seven-hour training ride:

“I’ll bring something special for the first 2:30hrs, but will need to borrow someone else’s special for the last 4:30hrs!”

Indeed.  Hopefully that won’t apply to any of you.

Whatever you do, ride safe and enjoy the day.

Remember it’s all about the story you can tell when you’ve finished.

Related posts:

What do you think Rakon is worth?

Mark at Valuecruncher has recently been publishing a lot of valuations for NZX listed companies on the Valuecruncher blog.

Each post contains a brief description of the assumptions that he’s using and a link to the valuation on the Valuecruncher site, where you can interactively change some of these assumptions and see how it changes the underlying valuation.

For example, see what he thinks about these companies:

This week he’s trying something a bit different.

He’s nominated Rakon as the stock of the week, and rather than just publishing his own valuation he’s asking: what do you think it’s worth?

At the start of September a share in Rakon was worth about $3.  Today, just a few weeks later, the same share is worth just slightly above $1.

See: Google Finance Chart for Rakon Limited

Obviously it’s a pretty volitile time for all stocks at the moment, but Rakon has also announced that sales are slowing and their expected profit this year will be much lower than previously expected as a result.

So, how does that feed into the valuation?

At $1 per share, is that cheap, or a fair price, or still too expensive?

Valuecruncher provides a starting point for a valuation by automatically generating estimates for each of the key inputs.

As I type this is calculating a valuation of $1.82, and the current market price is $1.04, suggesting that the shares are 75% undervalued (i.e. cheap!)

But, when you look at some of the inputs it’s using to come up with this valuation there are some things that look a bit optimistic given the recent announcements.

So, let’s play with some of those assumptions …

In my valuation I’ve assumed slightly lower revenues and profit margins (the grey lines show the starting assumptions, the blue bars show my values).

rakon-earnings

I’ve also assumed a lower terminal growth rate (which is the amount of growth beyond the initial three years), at 7% rather than 8.5%.

This leaves me with a valuation of $1.02, which is more-or-less the current market price.

So, if you’re comfortable with my assumptions then you could say that the current price is about fair value.

What do you think Rakon is worth?

Start with the Valuecruncher valuation, just like I did, follow these simple instructions, if you need some help, and let us know what you think.

Disclaimers:

This is not intended to be a detailed analysis, and anyway I’m no expert and am mostly following my nose, so I’ve used round numbers.

In case it’s not blindingly obvious, please don’t buy or sell on the basis of what I’m saying here – this is not investment advice.

I have some Valuecruncher shares but no Rakon shares.

Depressing

Via the O’Reilly Radar, this article from The Boston Globe is well worth a read:

Depression 2009: What would it look like?

“Instead of dusty farm families, the icon of a modern-day depression might be something as subtle as the flickering glow of millions of televisions glimpsed through living room windows, as the nation’s unemployed sit at home filling their days with the cheapest form of distraction available.”

Now, that really is depressing!

Surely there is a lean-forward alternative to that bleak scenario?  

We might be drowning in financial deficits, but there is still a cognitive surplus, isn’t there?

Holy Cow!

I’m back in New Zealand after a couple of crazy weeks in Nepal.

I realised this was no holiday when I got to the airport in Auckland and saw some of the stuff the rest of the guys in the group I was travelling with were taking – their check-in luggage overflowing with tools and equipment.  

Everybody had a job – to install electrical systems, or air quality systems, or to lay vinyl floors etc.  It took me a while to work out my role.  

I initially thought that I would just help by being a grunt, but of course there is no shortage of volunteers for that job in the third world!  

In fact, when one of the senior local guys spotted me trying to help out with unloading the truck of equipment at the factory he got quite grumpy, and I was promptly whisked off to have a guided tour of his onion patch (seriously – they were nice onions!)

I eventually worked out that the best way I could help was by soaking up some of the endless hospitality the locals were so keen to arrange for us all, and in the process leave the other guys some space to actually get on with their jobs.

So, I ended up being more tourist than anything else.  

In the process I covered quite a bit of distance on rough roads and on foot and got to see some amazing parts of the country. 

Outside of the busy-ness of the Kathmandu valley it’s a really beautiful place.

Unfortunately photos really don’t do it justice.  The experience is multi-dimensional.  Without the heat, and the bustle, and the noise, and the dust, and the smell, and the tooting, and the taste, and the looming mountains at a height where you only expect clouds, you miss just about everything that makes it interesting.

Just driving through town is exhausting – there is so much to take in and all of your senses are in overdrive.  Your life flashes before your eyes so frequently – as your driver lurches out into the opposite lane, one hand on the steering wheel and one hand permanently on the horn, at a speed that is much faster than the designer of the tiny little car you’re sitting in would have dreamed possible, only to discover that heading in the other direction is a public bus packed so full that people have overflowed onto the roof, while all sorts of livestock block the side of the road  – it starts to become mundane.

It’s also amazing how quickly you become accustomed to things not working.

Especially in the smaller towns the roads are in a permanent state of disrepair, with massive potholes only making them seem even more narrow than they are.  Although they do create some good opportunities for the local kids who put up ad-hoc road blocks – provided they position themselves just past a rough section of road then traffic is already slowed enough to allow them to stop cars and extract a few rupees.

In Kathmandu there is so much traffic – cars, buses, bikes, cows, as well as people on foot – that during the day it’s a permanent jam.  On more than one occasion we left our driver to it and got out and walked.  There are traffic police at the main intersections – they blow their whistle and point and wave their arms, but they are really on a hiding to nothing.  

Out on the highway we passed one gang of guys hauling up a bus which has come off the road and crashed into the river valley below killing 30 people onboard.  I’m not sure how many of those were inside the vehicle and how many were on the roof.  

Around town every driver seems to know the width of their car/bike to the nearest millimetre, and to people familiar with “only a fool breaks the two second rule” it seems astounding that there are not more prangs.  Or, maybe not … I’m told that if you injure someone in an accident you need to pay all their treatment, but if you kill them it’s a flat rate of 5000 rupees (approx NZ $100), so anybody who causes an accident is incented to make the extra effort to ensure they are not left with an ongoing bill for care (in other words: if you do get run over watch out for the car that just hit you switching into reverse!).

Technology is a bit of a mixed bag.  Just about everybody carries a mobile phone, and calls are ridiculously cheap – about 4 rupees (or 8c) per call.  But, on the other hand I was blissfully without an internet connection for most of the trip.  When I asked at one of the places we stayed if they had access I was told it would be available tomorrow.  This turned out to be an optimistic estimate (perhaps tomorrow as in tomorrow never comes), as I later discovered they were still waiting for trenches to be dug and wires to be laid so they could get connected.

Despite having so much hydro potential, there is not enough electricity to go around, forcing the country into a system of “load sharing” where one region at a time is disconnected for an hour or two on a rotational basis.  Apparently there is a schedule, but even so the locals still seem surprised when it happens.  Everybody scrambles into action, torches are found, candles are lit and generators are fired up, and everything quickly gets back to normal (apart from the tourists stuck in their room with no idea what is happening).

Despite the impact this sort of stuff has on their lives, everybody is so tolerant. 

At the check-in desk at the airport on the way out they have a professionally printed sign which reads “System Down”.  When that gets put up the waiting queue quickly sorts itself out – the Europeans and Americans get seriously agitated with the delay, while the locals just stand patiently hoping that it will soon be fixed.

Just like everywhere else in the world, it’s the people who make the place special.  

While I was there they were celebrating Tihar, which is the local equivalent of Diwali and marks the start of the new year (I’ve seen in 2065 already!).  All of the main streets and buildings were lit up for the occasion.  Because there were a few days with less traffic even the smog took a holiday, and there were some nice clear views over the Kathmandu valley.

Sanjeev, who is the adminstrator at the cancer hospital in Bhaktapur, devoted himself to looking after me throughout the trip.  He invited me around to his house for the Bhai Tika ceremony on the final day of the festival.  It ended up being the highlight of the trip.  They live as an extended family – his grandmother is 77 and his son is 3.  Their place is about an hour out of Kathmandu, along some roads that the average kiwi SUV driver would probably feel a bit anxious about.  But, they made me feel very welcome, and were obviously keen to let me experience a bit of what their lives are like.  They seemed a little nervous about how I would react to the food, but it was fine – although I was pleased to have a knife and fork to eat with as I’m not nearly as efficient eating rice with my fingers as they are.  

Maybe one day I’ll have the chance to return the favour.  Who knows what they would make of my place?  They would no doubt find it just as foreign and odd.

What about Nepal generally?  

As you travel around there is not much evidence of wealth.  In fact they make a mockery of what we call poor.  

This graph from GapMinder shows the progress they have made since 1950:

GapMinder - NZ v Nepal

Back then the average income was less than $500 per person, and the average life expectancy was only 36.  The blue trail shows the change since then. The red trail shows NZ over the same time frame.  For Nepal, both statistics have doubled in the last 60 years, but even so still they live shorter lives than New Zealanders did in 1948 and earn on average about 1/17th as much as we do now.  Outside of Africa only Butan, Haiti and Timor-Leste are below them.

Overall I was left feeling pretty small and quite selfish. 

It’s so easy to go on this sort of trip thinking that you are doing something good, but you soon realise that actually says more about you than anything.   The amount of need is so overwhelming, that it’s very easy to feel completely hopeless.  I certainly didn’t come away with a sense that anything I could do, or indeed anything that anybody could do, will make much of a dent.  And I was depressed to meet a few locals who have started to become immune to people like me promising to help but following up with little, or nothing.

But, despite that, I did get to see a few examples of good stuff happening.  Most, it seems, are where outside people with skills or resources that don’t exist there are supporting and pushing along the locals who are already trying to help themselves.  This is obviously not a new model – Sir Ed did much the same thing, and even today a NZ $5 note is a popular present in Nepal.

Ray took me to Tilganga, which is a facility in Kathmandu that he was involved in setting up in the early 90s when he was working with the Fred Hollows Foundation.  They manufacture world class lenses, which are sold around the world and provide a source of income to subsidise the cataract surgery and eye clinic that they run for the locals.  

It’s not necessarily a free service as some of the patients who need treatment can afford to pay.  So they have come up with a nice pragmatic system for determining how much to charge based on some simple things they can observe – for example, is the patient wearing shoes, do they have jewellery, have they come by themselves or with family members, etc.  They still have a final subjective check, as some people will borrow clothes (and relatives!) from their neighbours for the occasion, but this at least makes the initial assessment objective, which is easier for the nurses who are reluctant to be making those sort of decisions.

When I was there there was a big crowd of people waiting patiently to be seen that day.  Some, I suppose, left later that day with a much better life as a result.

It’s yet another example of an overnight success, which actually took 10 years.

Luckily there are some people willing to help who have that sort of patience required to see projects like that through.  Most people, I suspect, are like me and would need a much faster pay-back.

If you’ve travelled to these sort of places yourself, then I doubt anything I’ve described here will be much of a revelation.  If not, then I would strongly encourage you to, when you can.  It will change the way you think, at least, and maybe the way you act too.

I reckon there is probably a bit of untapped demand for this sort of trip, where you can actually try and leave something a bit more substantial than footprints during your travels.  That’s an idea that will bubble away in the back of my mind.

In the meantime, some photos (click for full size versions) …

Sunrise Over Kathmandu
Sunrise Over Kathmandu

Collecting Water For The Day
Collecting Water For The Day

Phil & Bill At The Factory
Phil & Bill At The Factory

Mother ...
Mother

Sanjeev & Grandmother
Sanjeev & Grandmother

Lunch
Lunch

Sushant, The Ghost
Sushant, The Ghost

No Helmet?
No Helmet?

Connected?
Connected?

Mourning Monkey
Mourning Monkey

Joogi
Joogi

System Down
System Down

Lots more on Flickr, if you’re interested.

On an empty stomach

I’m currently in Nepal with a group from Medicine Mondiale.  

One of the places we’ve visited is the factory they are currently building, where they will produce an infant protein formula.

This is a crazy part of the world, so there are some interesting stories I will talk more about here once I’m back to a more reliable internet connection.

In the meantime, here is a short video they have put together as part of their entry in Google’s Project 10100

http://www.youtube.com/watch?v=tHTmUcTzZFI

From the voice over…

“Every year, more than five million infants die of protein energy malnutrition, because their bodies don’t have the energy to digest essential protein-rich food.

ProteinForte is a revolutionary pre-digested high energy chicken protein formula.

Made from unwanted by-products from the developed world, it costs only 20 cents and fits in a sachet.

And it could reduce global infant deaths by up to 75%.

The world can’t march forward with an empty stomach.”

Some very simple things you can do to be part of this:

  • Watch the video
  • Add your comments of support on YouTube
  • Vote for this project (okay, this only applies if you’re a Google employee at the moment – the rest of us: if you know somebody who works at Google, tell them to vote for this project)
  • Send the link to your friends
  • Blog about it

Easy!

I’m sure all of your help will be much appreciated.

Related posts:

We’re in the money

Question:

Why does the Powerball Jackpot max out at $30 million?

On a normal week they sell 1.5 million tickets.  Last week, when the jackpot was $24 million, they sold 2.5 million tickets.  This week they sold 3.5 million tickets, worth $33 million.  

So, it seems that a big jackpot is good for sales. 

Why not let the fun continue if nobody wins? Let the amount get REALLY BIG!

Also, for what it’s worth, and appreciating that maths is the LAST thing people think about when they buy a Lotto ticket, a quick calculation…

No doubt there were lots of people who don’t normally buy a Lotto ticket, but did this week.

However, the prize this week was 25% more than last week, but there were 40% more tickets sold, so the already low odds were actually much lower this week than last!

:-)

Related posts: