I was shocked that the statistics I came across in a recent article in The Economist which presented Pankaj Ghemawat’s research on globalization.
We seem to take it as a given that we live in a globalized world, but on many indicators global integration is far from complete:
Only 2% of students are at universities outside of their home countries
Only 3% of people live outside their country of birth
Only 7% of rice is traded across borders
Only 7% of directors at S&P 500 companies are foreigners
A few years ago less than 1% of all American companies had any foreign operations
Exports only represent 20% of global GDP
Air travel is restricted by bilateral treaties and ocean shipping is dominated by cartels
Foreign direct investment (FDI) accounts for only 9% of all fixed investment
Less than 20% of venture capital is deployed outside a fund’s home country
Only 20% of shares traded on stock markets are owned by foreign companies
Less than 20% of Internet traffic crosses national borders
More worryingly globalization seems reversible. Emigration levels today pale with those 100 years ago when 14% of Irish-born people and 10% of native Norwegians had emigrated. Back then you did not need visas. Today the world spends $88 billion a year on processing travel documents and in a tenth of the world’s countries a passport costs more than a tenth of the average annual income. Nearly a quarter of North American companies shortened their supply chains in 2008. It takes three times as long to process a lorry-load of goods crossing the Canadian-American border as it did before September 11th 2001. Even the internet is succumbing to this pattern of regionalization, as governments impose a patchwork of local restrictions on content.
In this flattering portrait, they follow me around New York and Buenos Aires as I run OLX and invest in various startups. They are dead-on in their analysis that for entrepreneurs national boundaries have largely lost their meaning as we create global companies with a global labor force addressing a global audience.
I also recommend the bonus interview of Cyrille Devaud who authored the show who effectively distills the substantific essence of entrepreneurship.
You can watch my section of the show below:
Alternatively, here is the full show:
WARNING: The following content may contain elements of self-indulgence, megalomania, and narcissism that are not suitable for some audiences. Viewer discretion is advised.
Remy Debrant who managed all the PR for Aucland during the bubble days managed to dig up this great TV coverage on Aucland. If you are dying to hear what I sounded like 11 years ago or just to see what I looked like with a bit more hair, check it out.
Funnily enough for a country where capitalism is at best regarded as a necessary evil, Capital is an iconic show in France. Capital presents a business theme every week and enjoys a cult like following, partly because of their critical tone.
Eleven years ago we were lucky that Capital used Aucland to showcase the concept of online auctions. They filmed two bidders competing for a Palm Pilot. They interviewed the seller. The filmed the meeting of the buyer and the seller. They followed my cousin, who was head of sales, as he tried to convince one of the largest comics collectors to put some comics on the site and gave a step by step explanation of how to do that. They even followed me to the Prime Minister’s office where I went to argue that we should not be regulated like the offline auction business where you needed a government auctioneer license to operate and had to guarantee the authenticity of each item.
Let me now take you back to March 19, 2000, with CRT monitors, dialup modems and all!
Envoye Special is an investigative journalism show that covers a wide variety of topics. As the bubble inflated entrepreneurs started being celebrated, seemingly the first time in France. While Capital decided to present online auctions, Envoye Special was more interested in the human side of the story: what are entrepreneurs like and what do they do? I was lucky to be selected as one of the entrepreneurs they showcased.
In the clip below, Cyrille Devaud, the fantastic reporter who prepared the interview follows me to Spain as we deal with a PR crisis because a user tried to sell his kidney on the site. It’s funny to see us excited about our PR coup. We managed to turn the story into one about our vigilance and prompt action which led to several hundred new users that day. Somehow that seemed huge at the time! For reference, OLX now routinely gets over 8 million visitors on a good day…
Some of the themes still resonate. On the opening scene I explain how the world had changed: where the big used to beat the small, the fast now beat the slow. I also describe stock options which were a novel concept in France. Unfortunately no one made money from stock options in Aucland, but I am proud that many of the employees later became very successful either in my subsequent startups, Zingy and OLX or in other startups.
Tomorrow, Envoye Special is presenting the sequel: “11 years later what happened to him”, filmed by the same reporter, Cyrille Devaud and his loyal cameraman Cedric Foure. If you are in France you can see it on Saturday at 13:55 on France 2.
Culture Pub is another iconic show in France. Every week they showcase the best TV ads from around the world. The Aucland TV ad was amazing and even won a Silver Lion in Cannes. However, it created a huge controversy when it was introduced in France because we killed a grandmother (who kind of looked like the mascot of our main competitor) and we used the tagline: “anything can be bought it’s a matter of price”.
Because of the controversy the ad was pulled within one day of hitting the airwaves by the censorship bureau. In a way it was the best thing that happened to us. Not only did I get the opportunity to go defend freedom of speech on all the talk shows, it led us to cut the ad while the grandmother is falling and to say: “The rest of this ad has been censored. To see the rest of this ad go to www.aucland.fr”. As far as we can tell this was the first time in the world a TV ad did this (Nike later did something similar in the US) and traffic went through the roof.
You might argue that coming from me it might not be much of a change from the usual, but as I have not found a way to share TV interviews or shows about me without appearing narcissistic, I felt a warning was appropriate 😉
On the bright side English speakers will be spared the brunt of it as the interviews and TV shows I will be sharing will be in French.
Today I will be sharing a quick interview I did on BFM Business in front of the Nasdaq last Friday. Tomorrow I will be posting three TV shows from 11 years ago during the Aucland period where a bunch of TV crews followed me around for a while to present Internet auctions and describe the life of entrepreneurs.
On Saturday, I will be posting the sequel to one of these shows. The same TV crew from 11 years ago followed me around Buenos Aires and New York for a week. They will be presenting: “11 years later, what happened to him”. With a week’s worth of footage they can make me say almost anything so it should be interesting 😉
I posted the video when it first came out in 2007 and watched it again this morning and it feels much more relevant today than it did then. It might not be a bubble yet, but the environment is definitely getting frothy. Most of the larger companies going public or being acquired are clear leaders with revenues and profits, albeit with dizzying valuations. However, at the seed stage seemingly anyone with an idea can get funded. Moreover, the terms have worsened significantly for investors as “uncapped convertibles”* have become more common for the best deals. This frothiness at the seed stage is making the war for talent insanely competitive resulting in failed or marginally successful startups being acquired only for their teams! This won’t become a full blown bubble until marginal companies start going public or getting exits based on hope rather than real success, but it sure is getting hot in here! Now is definitely a good time to be starting or selling a company.
By the way, if you have not seen this video of the Ricther Scales at the 2010 Crunchies, it’s well worth checking out as well!
* An uncapped convertible means the seed investors invest in a note that will convert to equity at a discount to a Series A deal at whatever that price is done. This is as opposed to a priced deal where there is a valuation that is defined and we are buying equity or a capped convertible where the note will convert, but the price of the conversion has a ceiling. As I explained in my angel investment guide, Jose and I don’t like convertibles because we don’t feel they properly reward us for the risks of investing in a seed round, especially since a Series A is far from guaranteed to happen.
There was a great article in this week’s Wall Street Journal on the 1 to 3 percent of the population who are “short sleepers”. They thrive on only a few hours of sleep per night without the need for naps or caffeine. They are energetic, optimistic, ambitious and thinner than the average. They may also be hypomanic.
In other words, they pretty much sound like most great entrepreneurs I know 🙂