Men are from Video Games, Women are from Social Networks

Auren just wrote an interesting article analyzing the behavior pattern of men and women on social networks. Even though men and women both represent 50% of the users on social networks, women are much heavier users. This dichotomy is even more true for married women who are active users, while married men mostly don’t join the sites. Men spend as much time online, but spend more of it playing video games or poker.

Read the full article at:

Four Seasons Follow-Up

Somehow someone at the Four Seasons read my negative review and called to apologize. They reimbursed the room service charge and explained that the rental operation is run by Whistler itself and that they will try to push them to provide faster service.

They also suggested that next time I should complain while on the trip so they could accommodate me better. Good idea 🙂

Jira is a fantastic technical project management tool

Nine months ago we moved all of OLX to Jira ( We are extremely satisfied with the product.

It’s extremely important to input every single project your tech team is working on. If you don’t document very small bug fixes and changes, you can end up having a large portion of your tech resources on projects that may or may not be very important.

Also note that online project management tools like Jira and Trac ( are much more useful than PC based solutions. Everyone always sees the latest version of all the projects. Developers assigned to a project can comment on it or update the status in real time. Managers can update specs and track their projects.

There are many ways to organize your release schedule to fit your organizational needs. At OLX, releases are on an ad hoc schedule, but we average a release every 2 weeks. We also have a weekly product meeting where we cover what was released, upcoming releases and adapt project priorities as needed.

The bright future of online advertising

Despite my previous post on the gloomy outlook for startups for the next 12 months, I am more bullish than most on the online advertising market.

Advertising expenditures have a tendency to decline during recessions and the online advertising market collapsed in 2001 after the Internet bubble burst. However, I predict things will play out differently this time. The online ad market is not supported by billions of dollars of silly VC money as it was in 1999.

Companies now have the tools to monitor the ROI on their online advertising. As such, if anything a recession would probably accelerate the transition from offline advertising to online advertising as companies become more ROI focused. Given that online media represents about 20% of media consumption but only around 5% of advertising spending, it still has a lot of growth ahead of it.

That is not to say that growth is not going to slow down. The largest budgets are still controlled by big brands and agencies who don’t invest much online yet and who are going to be even more risk averse in a difficult environment, but the trend from offline to online is inexorable.

Google is going to great pains to make online advertising more attractive to advertisers. To decrease accidental clicks they recently changed their AdSense policies to:

  • Clearly separate Google Ads from the content of the web site
  • Enforce more standard Google Ad formats
  • Only make the title and the link clickable in the ads (and not the text description or the entire row)

All those changes decrease the click through rates on their ads, but should increase conversion rates for advertisers which in theory should allow them to bid more on keywords. All those changes are bad for revenues in the short run for Google and its AdSense partners, but should pay off in the long run.

Conclusion: The recession will decrease the short term growth rate of online advertising, but accelerate the transition from offline advertising to online advertising.

Why the startup market is like the real estate market

Homeowners hate to sell their houses for less than they paid for them. When prices fall, instead of adjusting to the new reality, homeowners keep their price expectations hoping that their house will sell. In the short run, they don’t need the money and patiently sit on the house. As a result liquidity dries up in the market. After many months, they adjust their price expectations and the market begins to clear again.

The same thing is about to happen in the startup world. In theory, startups should be insulated from the current macroeconomic headwinds. The current economic slowdown is caused by massive deleveraging around the economy. Venture capitalists are not funded by debt and cannot afford to sit on all the capital they raised for too long. Likewise, startups for the most part have no debt. However, as public valuations of consumer Internet companies have come down by over 25% across the board (and in some cases much more than that) and the IPO market has shut down, exit multiples are likely to decrease accordingly. Moreover, VCs, like most people, are like sheep. If everyone is putting their heads down and bracing for the worse, they will do the same and be much more careful.

Because there are still a few crazy deals happening, like Slide raising money at a $500 million valuation or Bebo being acquired by AOL for $850 million (a good sign we are at the top of the market), startup owners have not yet realized that this will affect them. Valuations are about to come down, but like homeowners, startup owners take a while to adjust to the new reality. Few deals will get funded for 12 months. Eventually the need for cash will win and deals will start happening at much lower prices. In fact, valuations might fall by more than they “should” if you have hundreds of deals that have to get funded simultaneously coming to the market.

People with cash will be in a much stronger position in 12 months than those without and should be able to buy companies and advertising at much lower prices.

Conclusion: Your greed versus fear dial should be turned to the fear side right now. Raise money now (even if not at the valuation you dreamed of) and be extremely careful with your cash burn.

The Art of Designing Markets

As an economist by formation and at heart if not by trade, I have always been fascinated by how the creation of efficient markets can fundamentally improve welfare for all. This is one of the reasons, I love my job at OLX so much: I am creating free, liquid, efficient markets where in many cases there were expensive, fragmented alternatives before.

I recently came across a fascinating article in the Harvard Business Review on how to design markets with examples from the kidney exchange, medical labor, spectrum allocation and school selection markets.

Read the article at:
Harvard Business for Educators

Recessions promote breakthrough innovations

Auren Hoffman wrote an interesting article a few weeks ago on how recessions can promote innovation. I can relate. When Zingy was created in July 2001, the mere mention that we were doing “telecom” and “direct to consumer” made investors run away in the other direction. In the end, Zingy was definitely helped by the lack of capital available in the market because it meant that we had very few competitors. Aucland, by comparison, had dozens of competitors in every country with many companies raising over $10 million. As the result, we exhausted our resources fighting for market share rather than building a sustainable company.

Read the article at:

The Club Dumas and Special Assignments were disappointing

After a long non-fiction binge, I decided to read a few fun thrillers while on my two ski trips. I picked up The Club Dumas by Arturo Perez-Reverte and Special Assignments by Boris Akunin on strong recommendations from Amazon, my friends and a review in The Economist.

The stories are enjoyable, but something was missing from both. I am not quite sure what was missing, but the books lacked that special page turner “I can’t wait to see what happens next” quality that some thrillers magically seem to conjure.

I had extremely high expectations for the Club Dumas. Having read The Three Musketeers and watched The Ninth Gate (and loved both), I felt ready to fall for the story. I liked the intrigue, but found the pace much too slow and the main character unappealing. I also really hate it when authors keep repeating what a main character is like to entrench our image of them. I get that Corso can use different smiles and looks to ingratiate himself to different people – no need to repeat it 100 times! Describe Corso’s character a few times, then demonstrate it through his actions. No need for the repetition!

I approached Boris Akunin’s Special Assignments differently. Special Assignments is a collection of two novellas on the adventures of Erast Fandorin, a 19th Century Russian special investigator described to me as a mix of James Bond, D’Artagnan and Sherlock Holmes. Again, I found the adventure intriguing, but disliked the repetition about the characters’ traits, the simple mindedness of most characters (yes we are in the nineteenth century, but that does not mean that everyone is naïve and stupid), and the fact that it’s more Sherlock Holmes than James Bond and D’Artagnan – it felt lacking in action.

Despite my misgivings, the stories were interesting and I feel there is something there. I am definitely going to give both authors another try. I will check out The Winter Queen by Akunin and am still debating which Perez-Reverte book to check out next.

Whistler is great

This is not quite the review I expected to write 12 hours into the trip. The trip could not have started worse.

I had never been to Whistler and decided to take advantage of the fact that I was already in San Francisco to check it out.

Unfortunately, the station is two and half hours from Vancouver airport. Worse, the bus dropped me off at the wrong hotel.

When I finally managed to get to The Four Seasons around midnight, the hotel service was a huge disappointment. There was not one to help out with the luggage.

The food at the late night in room dining was expensive and terrible! In the morning, renting skis and boots took over 2 hours – including nearly an hour of their concierge not understanding my name and bringing me other people’s ski boots!

It then took nearly an hour to buy a simple lift ticket!

Worse of all, it had not really snowed in 6 weeks and the forecast called for rain at the station level for the duration of my stay. I finally got on the slopes around 11:30 am and the snow in BlackComb was icy everywhere except at the very top of the glacier where the t-bars run.

Fortunately, from that point on everything went great. That afternoon I switched to the Whistler side and somehow the snow at Whistler Peak was still very good despite being at a lower elevation than BlackComb.

It did not rain, but snowed every day.

Unexpectedly the station was hit by a storm that dumped almost a foot of snow. My heli skiing was cancelled due to the weather, but as I had to be ready by 7:30 am for that trip, I ended up being the first on the slopes and skiing in fantastic snow all day.

Even better, I went heli skiing the next day enjoying both perfect fresh powder and amazing weather allowing me to get 9 runs in.

The station is huge. The skiable area is the largest I have seen in North America. Whistler is a great little town with lots of amenities. I ate at two delicious Italian restaurants: Il Caminetto and Quattro.

All in all I very much enjoyed the trip despite the lackluster start!

The type of article that stirs my feelings of mortality

Reading about astrophysics almost always makes me feel insignificant and oh so mortal. The article below proved no exception, especially given its bleak predictions, even if they are hundreds of billions of years in the future.

Reposted from New Scientist:

Faced as we are with impending economic gloom, with financial institutions under threat and stock markets around the world roiling like the sea in A Perfect Storm, perhaps we should step back from our myopic fixation on the present and think rather longer-term.

Viewed through the prism of the cosmos, things look a lot brighter. It turns out, in fact, that we live in quite remarkable times.

Ever since Edwin Hubble discovered that our universe is expanding, physicists have been striving to determine what will happen next. An expanding universe acting purely under the influence of gravity should slow down. So will the expansion continue forever, slowing but never quite coming to a halt? Or will it stop, leading the universe to collapse in a “big crunch”?

In fact, neither is happening. A decade ago, astronomers observing the motion of distant galaxies discovered something crazy: the expansion is actually speeding up. The dominant force in the universe seems to be some kind of cosmic antigravity that permeates empty space.

There is something exciting and a little scary about discovering that the dominant stuff in the universe is something we didn’t even know existed. However we feel about finding out that we, and all the stars and planets and galaxies we see, have been relegated to a new level of irrelevance, we can ask what this discovery implies for the future.

It doesn’t look good. If the universe’s expansion continues to speed up, powered by dark energy, objects beyond a certain distance from us will eventually be moving away from us faster than the speed of light. Nothing can travel through space faster than light, of course, but as far as we know space itself can expand as fast as it wants, carrying stars and galaxies along with it like surfers on a wave. If we wait long enough, distant objects will disappear from sight, and perhaps hundreds of billions of years from now our galaxy will sit alone in a vast, seemingly empty cosmos. The countless billions of galaxies we see now will have disappeared.

In that case, scientists in the far future, on some other planet without the benefit of our current knowledge, will see no evidence from their observations that the universe is expanding. After all, the only way that we know about it is by looking out at distant galaxies and tracing their motion. If they are out of sight, there will be no such tracers.

All empirical evidence that there was ever a big bang will have disappeared, as will all evidence for the mysterious dark energy that dominates the universe (and which by that time will contribute more than a million million times as much energy to the visible universe as matter does).

We can therefore allow ourselves to feel somewhat smug; astronomers in the far future will get it totally wrong. It turns out we live at the only time, as far as we can tell, when both the expanding universe and the existence of dark energy can be inferred. In the distant past, dark energy would not have had a measurable effect on the universe’s expansion, and in the far future, the expansion itself will not be measurable.

In fact, in an accelerating universe the limits to available knowledge will peter out faster than in any other kind of expanding universe, as there is no way to observe anything beyond the rapidly shrinking horizon. Such a universe is also the worst-case scenario for the long-term survival of life, as the energy needed to power it will run out (so much for intelligent design!)

We may never know if other fascinating and important aspects of our universe are hidden from us today, yet would have been visible had we been smart enough to evolve 5 billion years earlier. But these cosmic conundrums may at least make the gyrations of the stock market seem a little less profound.

The Bank Job is lots of fun!

This British bank heist movie is great. It felt like a well done classic. In many ways it reminded me of Snatch, though it’s a bit darker. The story is fast, sharp and fun. The intertwining story lines keep you guessing and come to a satisfying ending (as opposed to many of the current thrillers which often end with a completely implausible twist).

Go watch it!

Snowbird & Alta currently rank as my favorite ski resorts!

I adore skiing. I was introduced to it essentially when I learned to walk and have enjoyed it tremendously and extensively ever since. I had the pleasure of skiing in Snowbird and Alta with my dad and baby brother for the past few days and the experience was phenomenal.

It’s much more convenient to get to than Whistler or Jackson Hole from New York. There are numerous nonstop flights daily to Salt Lake City. Just as importantly the station is only 40 minutes away from the airport. It’s the only resort where I regularly go for the week-end if I see a storm system approaching.

The powder is amazing both in quantity and quality. The snow is very dry and over 500 inches regularly fall every season. I can’t recall having been to Snowbird/Alta without it snowing at least half the time. This trip was no exception with over 30 inches of snow falling over 3 of the 4 days of my trip and nonstop snow on the forecast for the coming days.

The terrain is also phenomenal. The skiable domain is much smaller than what you would find at Whistler, Chamonix or Les Trois Vallees, but it makes up for it with an impressive array of ungroomed bowls and tree runs. It’s also much larger than it used to now that Alta and Snowbird are explicitly linked and easy to ski from one to the other (you used to have to hike between the two). You can also augment it with the resorts’ heli-skiing and cat skiing operations, though the heli-skiing is often cancelled due to inclement weather. If you are up for a challenging day, sign up for the “mountaineering experience” in Snowbird where you will hike and climb your way to extreme terrain.

The station only caters to good skiers. There is no après ski to speak of. All restaurants close at 9 pm and most are mediocre at best. There is one exception in Shallow Shaft which offers delicious fares and amazing wine! Alta is the more elitist of the two stations. It does not allow snowboarders and does not put foot rests or safety bars on any of its lifts.

Possibly as a result, the station is not crowded. We never waited for more than 2 or 3 minutes and we found fresh powder in a few places in the middle of the day. Most stations are fully skied out within minutes of opening and the lines are much longer. It was so uncrowded, on a Spring Break week no less, including on Saturday, I wondered how financially stable the operation is. But for as a skier, I did not care, I was happy and fully fulfilled. My only complaint is the highly skewed male / female ratio!

All in all, I can’t think of a more pleasant skiing experience short of a week of heli-skiing. Happy skiing!

I loved the Federer – Sampras exhibition match at the Madison Square Garden

I had the pleasure of being invited to watch Sampras and Federer last night. The setting was amazing. Federer entered the court to the Star Wars theme song dressed in his “Darth Vader” black. Various songs from Rocky were played to cheer Sampras on during the change overs. Many tennis great were also in attendance including Ivan Lendl, Roy Emerson and John McEnroe.

The ambiance was electric and the match was fun. Sampras was not as sharp as in his prime, but is still very fit and his serve, especially his second serve, is as good as ever. The night alternated between serious play, with a few amazing exchanges, and comic moments – including Sampras’ impressions of John McEnroe and Tiger Woods 🙂

It was a great night for tennis!

The Prospects for Democracy in China

“Is China democratizing? The country’s leaders do not think of democracy as people in the West generally do, but they are increasingly backing local elections, judicial independence, and oversight of Chinese Communist Party officials. How far China’s liberalization will ultimately go and what Chinese politics will look like when it stops are open questions.”

Read this great article by John Thornton in the last issue of Foreign Affairs:

Cityvox, my learnings as an angel investor and the power of grit and tenacity

In a prior post – Sometimes it pays to be lucky – I was expressing my gratitude when I learned that MilleMercis, one of the companies I got involved with after my Aucland days, had gone public.

Since then, the other two companies I was involved with were both successfully sold. 2xmoinscher was acquired in July 2006 and Cityvox was acquired last Tuesday (Mach 4, 2008).

This brings an end to my 1999-2000 bubble era angel investments. I had made three significant investments (relative to my net worth at the time) and two small investments. Of the five, there were three successful exits, 1 IPO and 1 bankruptcy.

Large investments:

  • MilleMercis: European online marketing company – went public on the French stock market
  • 2xmoinscher: ” of France” – successfully acquired
  • Cityvox: “Citysearch of France” – successfully acquired

Small investments:

  • Call center operations – successfully acquired
  • Alidoo: “ of France” – went bankrupt

When I look at the three larger investments I was involved with, they only have one thing in common: really smart, passionate and tenacious teams. In none of the three did things end up working the way we expected them to back in 1999-2000!

MilleMercis started out as a wish list site which allowed to sell ads at high CPMs under the assumption that something you want is something you are interested in. The website never took off, but MilleMercis built deep CRM, viral marketing and online marketing knowledge that it used to start managing email databases for third parties and become a full blown ad agency with a viral marketing specialty. Combined with the growth in online marketing in the past 8 years, it became hugely successful.

2xmoinsher has a great business model and is a great product, but constantly faced an extremely competitive environment. Not only did Amazon launch its Marketplace and eBay largely move to fixed prices, but a local French company called PriceMinister launched on the same model, raised significantly more money and constantly outspent 2xmoinscher in marketing, BD deals, acquisitions and hires.

2xmoinscher only survived by the tenacity of Aymeric Chotard its Founder and CEO who made every penny count and obtained much greater ROI on his cash spent than his competitor. He worked his team as hard as he could for 10 years straight! 2xmoinscher did relatively well, but Priceminister is the runaway success: its last round of funding was on a valuation of several hundred million Euros and an IPO is being discussed.

Cityvox also had a circuitous path to success. I invested in the company in 1999 because I loved the intelligence and passion of its founders Bertrand Bigay and Michel Athenour, I liked Citysearch in the US and I believed in the value of local search. The vision was correct but it took forever to get there. In 1999, none of the local small businesses advertised online though we believed they soon would. It only started to happen 9 years later!

The original business model was to have sales teams contact local businesses to build personalized page for them on Cityvox for an annual fee. The business failed as small businesses in France were not ready to go online and there was no way we could compete with the yellow pages sales force.

Cityvox barely survived the bubble bursting. The team’s passion and commitment convinced its angels to reinvest before it ran out of cash while the company aggressively cut costs. They reduced headcount, moved from Paris to Marseilles, got the city to subsidize the move and did everything in their power to preserve cash. On the revenue side, the company was largely saved when it successfully sold its syndicated content to third parties who wanted local information and reviews. Again this business proved transitory as most companies eventually decreased their content budgets.

Cityvox again survived by successfully moving to mobile and getting paid to build local mobile sites for the major operators in France. Finally in the last few years while Yelp started coming to the forefront in the US and the promise of local advertising started to become fulfilled, online advertising revenues finally started to take off for Cityvox and the company was on much stronger footing.

Orange, France’s largest ISP, mobile operator and Internet company came a calling and a deal was made. You can read more about the deal (in French) at:

Things rarely happen as you expect they will it in startups. This was also true of the startups I created. Zingy was originally a copy of Kiwee in France and Jamba in Germany – a B2C provider of mobile content. We transitioned to becoming a B2B provider to the carriers because Premium SMS did not appear in the US market until 3 years after we launched!

It should also be said that in almost all of us who have been successful were very lucky in many ways! However, as you can’t count on being lucky, if there is one lesson to be had from the above experiences, it is that the most important traits of a startup team are adaptability, open mindedness, grit and tenacity. It would have been easy for Aymeric, Bertrand and Michel to get great jobs in large stable companies. After 5 or 6 years of fighting day and night, the lure of stability and a few good nights’ sleep must have been appealing. However, they stayed the path, kept believing that they would figure it out no matter what and ended up succeeding while others simply gave up or failed to adapt!

Congrats guys! You truly deserve all your success!

China’s Business and Policy Evolution

On Tuesday evening, I had the pleasure of attending a seminar sponsored by McKinsey on China’s Business and Policy Evolution at the Asia Society ( in New York.

The panelists were Howard Chao, Partner and Head of the Asia Practice of O’Melveny & Myers, Nicholas Lardy, a Senior Fellow at the Peterson Institute for International Economics, and Jimmy Hexter and Jonathan Woetzel, Directors at McKinsey & Company who co-authored Operation China: From Strategy to Execution.

I learned a few interesting things:

  • While China is not becoming a democracy in the traditional sense of the word, it is becoming much more open. For instance, they took the rather unprecedented step of posting their new energy policy law proposals online and inviting experts, including foreign experts and McKinsey to review it and suggest changes. The project will probably not be put into law at this NPC but it probably will be at some point in the next 6 months.
  • Urbanization is continuing apace and by 2025 there should be 1 billion urban dwellers. This suggests that 40-50% of the population of many cities and workers at most companies will be migrant workers. As such the government and companies are going to have to be much more supportive of migrant workers than they are today.
  • Despite rising labor costs, most multinationals are not going to move out of China given the complexities of changing their supply chain, the economies of scale that China offers and the lure of the domestic market. Last year Vietnam had $40 billion in exports, China $1 trillion. As such, countries like Vietnam do not have the infrastructure to accept a large scale move of companies from China there. Not to mention a large inflow of capital and companies in Vietnam would probably lead to higher costs there. In other words, while countries like Indonesia and Vietnam are going to grow and offer cheaper labor costs than China, China will remain a major manufacturing hub for most multinationals.
  • Most companies in China were built on cheap labor with little effort made on organizational efficiency which provides great opportunities for productivity improvement going forward as companies bring their global management best practices to China.
  • Interestingly a large portion of China’s exports are coming from foreign companies established in China.
  • Inflation is becoming a problem and might be creating bubbles in real estate and stocks because the negative real rate of return offered on bank deposits is leading individuals to invest in any alternative they can find.
  • China will let the Yuan appreciate against the dollar faster than it has in the past (it appreciated at twice the annual rate of 2007 in the first two months of 2008) to fight inflation and decrease its oil import prices.
  • Economic growth is expected to slowdown to below 10% per year as a result of the global slowdown but will remain high (8-9% per year).

If you are white and in graduate school you are a cliche :)

This article is hilarious:

Most of the posts are great as well! You can recognize yourself in some of the posts which is so humbling! These two posts in particular were dead on:

Uh oh, I guess I am a white boy 🙂

Basically check out all the posts:

The Teutonic Viagra

I hope I don’t sound like a spoiled brat when I say this, but I have a major case of lust for the Audi R8 – aka the Teutonic Viagra. My Aston Martin V8 Vantage is drop dead gorgeous, but the reality is that it’s not that fast, it does not handle that well and is not very reliable.

I still have a year to go on the lease, so I am unlikely to change soon, but next year I can definitely see myself getting an R8 if I fit in it (I am too tall for the Lamborghini Gallardo and don’t fit well in most Ferraris).

I also loved the R8’s “Godfather” Super Bowl commercial.

Audi R8 Specifications:

Make and Model: Audi R8
Year: 2007
Engine Type: 4.2 Liter V8
Torque: [email protected]
Acceleration 0-60: 4.5 s
Suspension: Double Wishbones w/Audi Magnetorheological Dampers
Wheel Base: 104.301 inches
List Price: $140,000
Horsepower: [email protected]
Top Speed: 187 mph
Brakes: ABS, vented disc
Transmission: 6 Speed Manual
Weight: 3434 lbs

Entourage is great!

I am on an HBO binge. After watching all of Sex and the City and Rome in order (and loving them), I just started watching Entourage. In a way it’s the male Sex and the City – except even more unrealistic – the premise must be every teenage boy’s dream, but for 99.99999% of us, that’s all it will ever be!

I can’t quite put my finger on why I like it so much – I don’t want to be Vince (well ok, maybe for a week 🙂 or Eric. Their lives are shallow. Yet, somehow their adventures and friendship are phenomenally entertaining!

Next up: Band of Brothers. After that, I will probably try Prison Break, Battlestar Galactica and Jericho.

Did I mention I love Netflix? 🙂 So much to watch, so much to do, so little time!

The first half of Season 4 of Lost is a masterpiece!

I watched the last three episodes of Lost on very early this morning. The HD streaming quality is great! I don’t know if the lack of sleep made me more emotionally vulnerable or if the claustrophobic feel of watching the show in the dark in my bed on my computer got to me, but I could not believe how amazing and great the episodes were! I even cried at the end of “The Constant”!

I can’t wait to see more! It’s so incredibly good I can’t imagine they can keep up the level, but I sure hope they will! ABC, JJ Abrams, writers, cast and all: you have something special on your hands; don’t screw it up! Watch season 6 of 24 for hints on what not to do!

I’m F*cking Matt Damon & Ben Affleck

I assume most of you have seen those videos already, but if not, check them out!

Sarah Silverman can be hit or miss, but I loved the clip she played on Jimmy Kimmel.

I was impressed by Jimmy’s ability to enlist Brad Pitt, Don Cheadle, Harrison Ford, Robin Williams, Cameron Diaz and many others for his fun response.