Cameron Rules, Sarkozy Sucks!

Over the last two weeks I had the pleasure of attending the eG8 Summit in Paris at the invitation of French President Nicolas Sarkozy and being invited to tea with David Cameron, the Prime Minister of the UK, at 10 Downing Street. I wanted to share my reflections on both experiences.

The fact that Sarkozy got 1,000 Internet entrepreneurs together in Paris in less than 6 weeks was actually a very impressive feat. Moreover, the who’s who of the Internet was there: Mark Zuckerberg, John Donahue, Eric Schmidt, Sean Parker and many others!

McKinsey started by sharing the findings of a very interesting study they did on the Internet where they showed that:

  • For every job destroyed by the Internet, it creates 2.6 jobs
  • The Internet accounted for 3.7% of GDP in the countries they surveyed
  • The Internet was one of the fastest growing components of GDP in the countries surveyed

Sarkozy then gave a very eloquent speech where he stressed the importance of the Internet to France and as a force for liberty and freedom around the world as displayed during the Arab uprisings. Unfortunately, this is where my compliments end.

Sarkozy kept emphasizing how important it was for the Internet to be “civilized” (e.g.; regulated) and for intellectual property to be protected. The conference itself was boring as the old guard was talking to and at the entrepreneurs rather than talking with them. Worse, the smaller working “forums” were useless as the concluding slides had been written before the conference and their content in no way reflected the discussions in those forums (if anything, they said the exact opposite)! All the political “conclusions” had been reached before the conference even started!

The French government was not ready to heed the advice of the delegates. Eric Schmidt suggested: “Technology will move faster than governments, so don’t legislate before you understand the consequences. You want to tread lightly in regulating brand new industries. The trend is that incumbents will block new things … nobody who is a delegate here would want Internet growth to be slowed by some stupid rule.” American journalism professor Jeff Jarvis stood up and asked Sarkozy to take a “Hippocratic oath” for the Internet: first, do no harm. In response, the president of France said “of course,” but couched his reply in terms that address the need to protect security and privacy.

The event had no real point and seemed merely to be a photo opportunity of Sarkozy chatting with Internet leaders under the pretense he consulted the industry before passing any laws. From a content perspective LeWeb is much more interesting! Fortunately, the networking opportunities at eG8 were great and I took advantage of the opportunity to catch up with all my good French Internet friends.

The meeting at 10 Downing Street with Cameron could not have been more different. There were less than 100 Internet entrepreneurs, but all extremely relevant (which made it much more productive). Moreover, Cameron came in saying: “I disagree with Sarkozy’s conclusions and there are three things I want you to know:

  1. The Internet represents the future of economy and is a great driver for growth and we want your companies in the UK.
  2. We understand we don’t have the best environment yet, but are working hard putting in place the right and extremely friendly environment from a regulatory and tax perspective.
  3. I have a great team of advisors here to help, lean on them as much as you want.”

Instead of Sarkozy’s: “We want to tax, regulate and control you”, it was: “We want to set you free to do whatever you do best and let your creative spirits run wild!”. The contrast is all the more farcical as France just banned the use of the words Facebook and Twitter on TV to the astonishment of every Internet entrepreneur in the world!

Even their personal styles could not have been more different. Sarkozy’s mannerism and tone reek of condescension and arrogance. By comparison Cameron was jovial, approachable, light hearted and self-deprecating: “I sat between Obama and Zuckerberg at the G8 and could not believe I belonged in the room!”

No wonder Loic is seriously considering moving Leweb to London: Cameron’s team is offering to help while the French government seems intent on competing with him!

The conclusion is ineluctable: Cameron rules, Sarkozy sucks! Now if the Brits could just do something about the weather in London, I might even consider moving there 🙂

Why India is behind China!

I recently wrote how the world is less globalized than we suspect it is and how we now spend $88 billion a year in visa processing fees. What is not included in this figure is the extraordinary opportunity cost of time and inefficiencies imposed by the visa obtaining process. I recently experienced a telling experience which illustrates the differences between China and India.

OLX is present in both countries and I typically visit both countries every year. China unfortunately requires a visa for French citizens but has a very efficient process for obtaining and delivering it. You can pay a surcharge and obtain it the same day from their visa processing center on 12th avenue and 42nd street in New York. The processing center is very well staffed and even where there are many people in line, you rarely wait more than 30 minutes.

India by contrast makes it an ordeal to get a visa. I was supposed to keynote an Internet conference in Mumbai last December. I started going through the process in October. The application required my French birth certificate, notarized and apostilled in France, which as you can imagine is extremely difficult and time consuming to obtain from the US. It required a formal letter inviting me to India. It required a notarized copy of my visa for the US and copies of various bills proving my residence in the US. You then apply through a visa processing center where even the expedited process takes weeks during which they have your passport and you can’t travel anywhere!

You first apply online, which you need to do at least 5 times given the lack of proper instructions regarding specific requirements which seemingly vary on a case by case basis! To drop off the application you then have to wait in line for hours in front of the processing center. Several times, after waiting for 3+ hours they simply closed down the center saying there were too many people in line, asking us to come back again the next day!

Worse, it is basically impossible to get anyone on the phone at the visa processing center to get the status of your application. After several weeks of harassing them, they told me that my application was on hold because my new visa for the US was less than a year old and they would need notarized copies of all my past visas to prove the continuance of my US residency. I duly provided the required documentation and again waited for weeks before being told that because there was a gap of 6 weeks between two of my visas, I could not apply in the US and would have to apply at the Indian embassy in Paris! The fact that I live in the US and that I had no intent or reason to go to Paris did not dissuade them! By the time I finally got my passport back the conference had passed!

I pushed my trip back to late January, asked a good friend of mine in India to write a letter saying he was looking forward to hosting me during my vacation there and reapplied for a tourist visa. This time I had all the documents on hand and two weeks later, I had my visa.

Granted it is hard for Indians to get European and American visas, but imposing “reciprocity” with such complexity is insane and self-defeating, especially if it is the representation of Indian bureaucracy in general! Driving through the streets of Shanghai and Delhi, you can’t help but wonder how less stark the contrast would be if India streamlined its bureaucracy!

New York is now complete!

I have always had one favorite restaurant: La Petite Maison in Nice. I have always loved Mediterranean food and been amazed how very simple dishes with great ingredients served tapas style can be extraordinarily good. Even the tomatoes and lemon they leave on the table before the meal are succulent!

I am happy to report that La Petite Maison just opened in New York! The setting is not nearly as cute as in the one in Nice, it is awkwardly located (54th between 5th and 6th), you can’t go for a walk in the Cours Saleya or the Promenade des Anglais after the meal and the scene is very French, but those quibbles aside, the food was so good I felt nostalgic for Nice!

You just have to try the artichoke heart salad with olive oil and parmesan, the truffle macaroni, the Nicoise onion tart and the grilled sea bass!

How to minimize human misery in recessions or the macroeconomic implications to hedonic adaptation


As I was reading The Upside of Irrationality, Dan Ariely’s sequel to the brilliant Predictably Irrational, I started wondering whether there were macro implications and applications for behavioral economics and specifically to the concept of hedonic adaptation.

As I described over the years in my musings on happiness, hedonic adaptation is the process by which we rapidly adapt to changes in our life circumstances and return to our mean level of happiness. Because we disregard its existence, we humans are particularly bad at predicting how positive and negative changes in our lives will affect our happiness. People in Michigan predict that people in California will be happier than they are given the weather. Empirical evidence suggests that a move to more clement weather does temporarily improve people’s happiness, but their happiness level rapidly reverts to the mean as they get used to the gorgeous weather. Likewise, when asked to predict how they would react in the face of negative events such as losing the ability to use their legs, people underestimate their ability to cope. They predict they would be miserable forever while research suggests that after an initial dip in happiness, people rapidly revert to their mean level of happiness.

Behavioral economics suggests ways to delay or speed up our adaptation. If you are considering indulging yourself by buying a new wardrobe and plasma TV for instance you are better off spacing the purchases. Likewise, if you are receiving a massage, you are actually better off interrupting it for a few minutes in the middle.

The reverse applies to negative changes in your life, especially economic cutbacks. People intuit that they should spread the pain, but research suggests that are much better off reducing consumption all at one. In other words, you should move to a smaller apartment, give up cable television and cut back on expensive coffee all at once rather than in increments. The initial amount of pain will be higher, but as we rapidly adapt to our circumstances, the total amount of agony will be lower.

It strikes me that our society and politicians have been making the wrong choices over the last few years in terms of economic policies as we seem unable to take a bit more pain in the near term and thus end up enduring pain for much longer than we might otherwise have to. It was not always the case. In 1981, when Paul Volcker increased the Feds Funds Rate to up to 20% in June 1981, he plunged the US in a deep recession increasing the unemployment rate from 5.8% in 1979 to 9.7% in 1982. However he tamed inflation which peaked at 13.5% in 1981. By 1983, inflation was lowered to 3.2% and the stage had been set for a period of sustainable growth.

More recently though we have artificially propped up many sectors of the economy through bailouts, subsidies and policies which delay those markets reaching equilibrium. We thus create an impression of continued economic malaise as these markets slowly reach equilibrium. In other words, we have longer lower level pain instead of more pain for a shorter period of time.

Even assuming that the total amount of pain is the same in the case where we let markets clear on their own versus propping them up and it’s just the intensity and duration that changes (and I suspect that it’s not), we are clearly making the wrong choice. The continual arrival of bad news prevents us from adapting to our circumstances and we are thus suffering much more than we would otherwise if we had experienced the entire negative outcome in a brief period of time. Moreover, I suspect that continued arrival of negative or mixed economic news is detrimental to society at large and not just for those who have lost their jobs and/or home as the economic uncertainty makes them fear for their own well-being. In other words it’s better to have brief deeper recession than 20 years of Japan like stagnation.

This is not to say we should not act when the economy is in recession. Running counter cyclical fiscal and monetary policy has proven effective time and time again. The issue has more to do with policies that prop up real estate, car manufacturers, and banks, and delay the inevitable reform of public pensions and our overall fiscal adjustment. Despite the potential for moral hazard, you actually can’t let your financial sector go out of business because it is the engine of credit creation without which you don’t have an economy. My concern is less with the need to bailout banks (unfortunately we had to), but the fact that we did not do a good job at cleaning their balance sheets. Instead of disposing of most of their toxic assets with a good bank / bad bank approach (or a number of approaches with the same outcome), we are hoping to let them earn their way out of the problem by keeping short term interest rates low (banks make a lot of money in low rate environments because their borrowing decrease which increases the spread with the rate they earn on the long term loans they made). The result is not dissimilar to the zombie bank problem that infected Japan for the last twenty years. It took twenty years for these banks to clean their balance sheets and start lending again. Credit creation remains broken in the US and might worsen if housing takes a turn for the worse, which it very well might as we don’t seem to have reached the market clearing equilibrium as suggested by continuing price decreases.

Likewise, the entire slew of policies enacted to stem the decrease in housing prices have merely delayed many foreclosures, price decreases and decreased labor mobility as people have stayed in their home longer than they should in the hope of a price recovery. Instead of seeing a rapid adjustment to the market clearing price and acting accordingly, homeowners are enduring agonizing small decreases in prices year after year. Again, in this, we seem to be copying the Japanese example where house prices fell a few percent a year every year for 18 years from 1989 to 2007. In the end residential real estate prices fell over 90% in Tokyo between 1989 and 2007 and commercial real estate fell over 99% in some cases!

As our politicians and public unions face fiscal retrenchment, they should really focus on decreasing human misery by making more cuts and adjustments upfront rather than spreading them little by little over many years.

Hedonic adaptation is one of the most powerful tools at our disposal for stemming human misery. Let’s make the most of it!

Augustus: The Life of Rome’s First Emperor by Anthony Everitt is enriching

As a self-styled Roman history buff who has always considered Augustus to be my role model because he essentially singlehandedly created the Roman Empire, I had to read his biography to get the detailed backstory.

I had learned a lot on the topic from Edward Champlin’s fantastic lectures on the Roman Republic and the Roman Empire while at Princeton and had enjoyed HBO’s fantastic TV show Rome and was looking forward to learning more.

The book is not nearly as well written or as enjoyable as Ron Chernow’s brilliant biographies, but I loved both learning more about Augustus’ life and the social and cultural mores of the time.

If you are a fan of Roman history, you owe it to yourself to check it out!

The Metropolis Case is beautifully written and shockingly compelling

I am a bit at a loss for words when it comes to describing my liking of The Metropolis Case. I am not a huge fan of music, dislike opera and don’t particularly care for gay male leads. Yet, somehow, the intertwining tale of four characters connected by music over a period spanning from 1860s Paris to New York after 9/11, becomes slowly engrossing.

I am not quite sure why the characters are so compelling. Their coming of age is predictable. More likely, the underlying, if secondary, issue of aging and its consequences resonated with me. I share the characters’ fears and annoyances at the prospect of aging and lust for the fountain of youth. I suspect the beautiful prose also played a large part in keeping me captivated. As I have mostly been reading non-fiction books and a few thrillers, I have not come across a book as beautifully written in a long time. I also appreciated the whiff of magic realism towards the end of the book (even though it was highly predictable).

If you are looking for a beautifully written novel definitely check out The Metropolis Case.

Fast Five is surprisingly good!

This might yet again be an illustration of the power of low expectations. I was not impressed by the prior movies in the series, but was looking forward to a fun mindless evening and ended up with more than I bargained for.

Many sequels which extend and mix the cast of characters from prior movies end up not developing any of them enough and feel like they lack depth and are all over the place (e.g.; Spiderman 3 & Shrek 3). In some movies the ensemble comes together in support of a single coherent storyline as it did with Ocean’s Eleven.

Fast Five brings together all the main actors of the past movies and manages to utilize them effectively and coherently by focusing them on a heist whilst being chased by The Rock and his team. In many ways, the movie is more Ocean’s Fourteen than The Fast and the Furious and is all the better for it.

The movie is a much more violent and action packed Ocean’s Eleven. It’s a bit less slick than that movie, yet manages to mix extreme brutality with humor in a way that makes it highly enjoyable. It goes without saying that the car chases and action scenes were fantastic (the best in the series yet) and a ton of fun to watch.

Turn off your brain and go along for the ride, you won’t regret it!

Globalization is more fragile and less entrenched than you think!

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.

Read the full article at:

Envoye Special Sequel: Conquering the Web, 11 Years Later

Envoye Special just aired the sequel to the show from 11 years ago that I mentioned in the previous blog post.

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.

Flashback: Aucland TV Coverage

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

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

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”. 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.

Warning: Be prepared for self-indulgent narcissism over the next few days :)

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 😉

The Ricther Scales should update “Here Comes Another Bubble”

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.

The Sleepless Elite

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 🙂

Read the article at:

Lessons of a super tenacious first time entrepreneur

Read this amazing article by my good friend Xenios Thrasyvoulou, the Founder & CEO of Peopleperhour, one of my portfolio companies. He recalls his amazing journey in entrepreneurship and all the lessons learned. Once again grit, tenacity, passion and staying power conquer all!

Read it at:

A SuperAngel’s Investment Guide

In recent years I came to realize how much I truly love angel investing: I get to meet tons of young new entrepreneurs, I get to see and hear the newest developments in the market, and I get to participate in the growth of amazing companies!

In a previous post in 2008 I explained that I had fundamentally changed my angel investing strategy. After reviewing both empirical data and from my personal experience of feeling (and being) a lot less rich, I went from investing a lot: $250k to several million, in a few startups, to investing a lot less: $25k to $250k with a $50k average, in a lot of startups.

The change can be seen in the number of angel investments I made:

  • 2005: 2 very large investments
  • 2006: 4 large investments
  • 2007: 1 large investment
  • 2008: 7 investments
  • 2009: 9 investments
  • 2010: 22 investments and 4 follow-on investments (with 5 more investments expected to close in January and February 2011)

It’s not as though I completely adopted the “spray and pray” approach. As I explained in another post, active CEOs are more likely to invest in consumer facing companies, because the due diligence is easier. As Co-CEO of OLX, I have very little time to dedicate to angel investing so I have devised a mechanism to evaluate whether or not to invest in less-than-an-hour, although the “magic” is a bit more complex.

My Angel Investing Method

1. I only look at pitches that I feel capable of evaluating

Given my experience and interests, I only look at consumer facing projects (C2C and B2C) with the following components: marketplaces and/or user generated content (UGC) and/or ecommerce.

If your project falls out of this still relatively large box, I won’t look at it. It’s not that there are no great B2B or semiconductor projects, but I don’t have the time to understand the sales cycle, the competitive dynamics, and the technology, etc.

2. I decide whether to invest or not based on 4 criteria

If I:

  • Like the team
  • Like the pitch: the market size, the business model, etc., basically if the business meets my 9 business selection criteria
  • Like the product: yes, I expect the product to be live if only for the founding team to demonstrate its tenacity and capability of executing on a shoe string
  • Like the deal: pre-money valuation, liquidation preference, size of the raise…

… then the entrepreneur can literally leave with check in hand (a wire actually). An hour is all it takes.

3. I have a secret weapon: Jose Marin, my amazing angel investing partner

Another large part of the reason the system works so well is that I do all of my angel investing with my good friend and angel investing partner, Jose Marin. Jose was one of the founding partners of Deremate, an eBay clone in Latin America, which was sold to Mercadolibre in 2005. In 1999, I provided the technology and business plan for Deremate from Aucland, my eBay clone for Southern Europe. In the process, I became close friends with its CEO, Alec Oxenford, who is now my partner, co-founder and co-CEO in OLX. I also became friendly with the other founding partners.

In all honesty, I did not take Jose very seriously at first. With his suave Latin style and playboy looks, I never imagined working with him. Not knowing him, I could not imagine he had the mettle to succeed. We lost touch over the years and reconnected in 2008 on one of his trips to New York where he shared his experience with his company, IG Expansion. IG had very successfully partnered with large American companies to take them to Spain, Brazil, and Mexico. He felt that angel investing could be an interesting and synergistic side business to IG Expansion.

We finally made an investment together in 2009 in PeoplePerHour and jointly led the fundraising round for, a Rakuten clone for Russia. Upon working with Jose my impression was changed forever. Jose is one of the hardest working, smartest, and most standup guys I have ever met! Working with him has been one of the true pleasures of the last few years.

Not only is he a great source of lead generation for new deals and a great thought partner for investment ideas, but he does all the heavy lifting when it comes to the investment documentation and all the stuff I hate to do! He makes sure the letter of intents (LOIs), stock purchase agreements (SPAs) and the like are perfect. I trust him fully, to the point I never read legal docs. He works directly with my lawyer to draft all the docs. I just make sure the deal points are in line with what was agreed upon with the entrepreneurs.

Jose is really one of the key reasons I can be as prolific an angel. Like with Alec, my co-CEO in OLX, we never formally sat down and spoke about how we would split tasks, we never allocated the angel investing work, we just fell into it based on our interests and what needed to be done. While the work we do as angels overlaps, it broadly breaks down in the following way: we both source new deals and evaluate them, though I am usually the final decision maker on whether we do a deal or not. We jointly agree on the deal terms with the entrepreneur. I send the intros to other angels if need be. Jose takes the lead on closing the deal. I typically help more with product feedback, marketing strategy and VC introductions. Jose actively does status checks with entrepreneurs, flies over to meet them in person and takes the lead on identifying what we could do to help them.

Basically it just works!

4. We often crowd source the due diligence and investment

Reasonably often, we end up leading the angel round with say a $100k investment and raise the remaining amount, typically $500k, though it ranges from $200k to several million, from our angel friends. Jose and I agree to the terms with the entrepreneurs and help them with their deck. We then introduce the team, deck, and terms to our angel friends and ask them if they are interested in participating, and if so, the amount.

Some just tell us they are in for a certain amount without any due diligence. Many, especially early stage funds or VCs who invest at seed stage, organize meetings and calls with the entrepreneurs. In the course of a few weeks, we get to hear the feedback from our network and can assess the demand for the deal. If we can get close to the amount we were looking to raise, we work towards closing the deal, and bridge the entrepreneurs if necessary. If we can’t get close to the amount we were looking to raise, we don’t do the deal.

The angel list now has around 200 names on it segmented by whether they are willing to invest globally or in the US only. As you might suspect, many of the names on the list are also on

Though the above might sound like a lot of work, the reality is that it probably takes less than one hour or two of our time to organize.

5. We use a standard entrepreneur friendly set of terms

We have done so many deals, we now have a basic template. If we are leading the deal, my lawyer takes the lead on the docs, under the supervision of Jose. All of our deals are basically clean deals with a 1x liquidation preference. We don’t do participating preferred, etc. We do expect our parent companies to be Delaware C Corps, or Cyprus holding companies in the case of our Russian investments.

We never invest in convertible loans unless they have a low valuation cap. We feel that the 15-25% discount to the series A they typically offer is not enough compensation for the much greater risk of investing at a very early stage, especially since a series A round is far from guaranteed to happen. If the entrepreneur insists on the convertible structure, we will just wait to invest in the series A.

6. We try to get proprietary deal flow

Jose and I have successfully been doing international idea arbitrage for 12 years in the businesses we run. We apply the same principles to many of the companies we invest in. A large portion of our investments, and our seemingly most successful investments, are localized versions of successful US concepts for Brazil and Russia. Our early success in the region seems to be generating a virtuous circle by which we are known to be good investors in the region and get to see great new deals there which hopefully will in turn be successful.

I will detail our recent investments later, but just to give you a sense of what we invested in (with many more in the pipe):


  • Paypal copy
  • Expedia copy
  • Gilt copy


  • copy
  • Jetsetter copy
  • copy
  • Rakuten copy

We also invest in clones in Germany alongside Lukasz Gadowski of Team Europe. In those deals, he takes the lead and we co-invest. Recent investments include:

  • Grubhub copy
  • Yext copy
  • copy
  • WarbyParker copy (online glasses)

We have not invested much in China as we feel the decks are mostly stacked against non-natives.

I use the word copy for illustration purposes. It does not do justice to the great work the entrepreneurs do at localizing the concept and adapting it for local market conditions. For instance in Russia there is no reliable delivery infrastructure so many companies have to build their own. One of the lessons learned was, you can get a huge productivity increase by removing the passenger seats in your delivery vehicles so your drivers don’t play taxi when they should be doing deliveries…

That is not to say that we only invest in copies of successful US businesses. Around half of our deals are innovative new concepts from around the world, mostly in the US with a few deals in Israel and the UK. We invested in Peopleperhour for instance, due to the vision, clarity of purpose, intelligence, passion of Xenios, its founder and CEO, who is revolutionizing the temporary work space, originally pioneered by elance and odesk.

Our deal flow is varied and comes from many sources:

  • Entrepreneurs we have already backed who introduce us to their entrepreneur friends
  • Friendly angels and early stage funds such as Oleg Tscheltzoff, Team Europe, and Xavier Niel and Jeremie Berrebi of Kima Ventures
  • Friendly VCs, especially DN Capital, Bessemer, General Catalyst, and Repdoint, who share deals that are too early stage for them or deals where we can help
  • Stanford Business School (Jose is a GSB grad)
  • Our entrepreneur friends
  • My blog

Lessons Learned

1. Quality of time spent helping entrepreneurs matters more than quantity of time

In the early batch of investments where I invested a lot, I typically joined the board, organized regular meetings and was very involved. The reality is that a lot of the time spent in the board meetings and getting reports was not very productive.

An email update or a 5-10 minute phone call once in a while is more than enough to get a sense of how the business is doing. Moreover, rather than having structured times to talk, it’s much better to be available punctually whenever the entrepreneur needs help. This works better for me given it takes less absolute time and is better for the entrepreneur because they get the help they need when they need it. I sometimes don’t talk to an entrepreneur for 6 months or more, but then end up spending a lot of time with them discussing a term sheet they might have received if they are fund raising, etc.

As most entrepreneurs I invest in can attest, I am usually very reactive and can give instant feedback on the product or make introductions to someone in my network.

This setup has definitely worked better for me and I believe that it has not decreased the quality of the help for the entrepreneurs, but I will let them comment on that directly.

2. Stick to your investment principles

I occasionally invested in companies that did not meet my 9 business selection criteria. I always had a great reason to do it, but it invariably did not end well. For instance in 2005 I invested $300k in Phanfare. I LOVED (and still love) both Andrew, the founder, and the product. It’s the best way to upload and manage photos and videos. They keep the originals forever and have amazing iPad and iPhone apps.

Despite loving the product and the team, I knew that the market for a premium photo and video hosting site was small given the free alternatives from Facebook, Youtube and others. I knew that this was not a $1 billion revenue opportunity and would at best be a sub-$100 million business. However, I decided to follow my heart and made the investment.

What I realized over the years is that it’s just as hard to build a small business as to build a big one, so you might as well try to build a big one. As an angel, you might as well invest in big ideas. Through sheer grit and tenacity, Andrew has made Phanfare profitable and sustainable, but its niche nature made it a poor investment.

3. Diversity is good

Sometimes companies fail despite having good entrepreneurs, good products and being in seemingly large businesses. Some business end up being bad businesses because competitors give away your product for free or consumers prove reluctant to pay for something they really should pay for.

A few reports I read on angel investing suggest that angels with less than 7 investments lose money and those with more than 7 make money. In fact the more investments you have, the higher your IRR because it increased your chances in being in the real hits like Facebook, Google, Youtube, or Skype.

In my particular case, I am glad that I had enough diversity in the portfolio to withstand the investment losses on all of my storage investments: Phanfare, Allmydata, and Badongo.

4. It pays to be lucky

As I had previously reported, I had been extremely lucky with my first batch of investments from 2000 and 2001. I had made 7 investments. If you had asked me in 2002, how much the 7 companies were worth, I would have told you they were worthless, in fact one of them, Alidoo, a for France, had gone under.

Somehow, over the course of the next 6 years 5 of the remaining 6 investments did incredibly well despite, or maybe because :), there was no involvement whatsoever on my part. One of them, MilleMercis, an online marketing company went public and turned my 76k euro investment in March 2001 into 1.16 million euros when I exited in March 2006. Four of the other five investments made money, albeit with lower returns than the MilleMercis deal: 2xmoinscher ( of France), Cityvox (a Yelp of France), Kangaroo Village (an incubator) and Webhelp (an online call center). The only exception was Demerate (an eBay of Latin America) where the liquidation preferences took all the proceeds of the exit.

Even my recent 2010 success might be attributed to luck as the startup scene has become extremely heated and Brazil is super-hot right now.

5. Exits can take a long time

VCs typically have a 4-5 year time horizon given their fund life. Given that angels invest before VCs we need to realize that many of our investments won’t be liquid for 6 or 7 years if not more. That duration has increased over the past few years as companies now need to be larger and more profitable to go public.

By way of example, I invested in Cityvox, a Yelp-type site for France, in January 2000, but only successfully exited when it was sold to Orange in March 2008, over 8 years later!

As such it’s very important to invest money you can afford to lose and will absolutely not need under any circumstance. I mentally write off all investments the minute I make them such as to be pleasantly surprised if something comes of them.

6. Most exits are below $30 million

Even though Facebook, Zynga, Groupon, Skype or Youtube come to mind when we think of successful startups, there are less than 5 startup exits per year with a valuation above $1 billion. In fact, the vast majority of exits are below $100 million and most of those are below $30 million. Excluding Zingy and OLX, the companies I ran, only one of my angel exits had a valuation above $40 million (MilleMercis). You can still get great returns, but you must be mindful of the valuations you invest at. It’s also a good idea to steer your startups against raising too much money unless the opportunity is really huge and the entrepreneur really wants to go big.

Performance to Date

I originally did very well with my 1999-2001 investments. My three large storage investments (2 in 2005 and one in 2007) were unmitigated disasters and essentially written off. Fortunately most of my other investments are actually doing rather well.

2010 was a year for the record books! Financially, it’s my second best year ever after 2004, the year I sold Zingy.

I sold 5 companies in 2010, one more at the start of 2011 and have a term sheet for one more. Another company also almost sold, but the buyer backed out at the 25th hour after we (the sellers) had signed the stock purchase agreement! I invested in 22 companies and made 4 follow on investments in companies I had previously invested in. I also committed to invest in 5 more companies. Those investments should close in January and February 2011.

The companies I sold were:

If you exclude the companies I actively ran (Aucland, Zingy, and OLX), Dineromail is my best investment to date as $300,000 invested in February 2006 became $4.69 million in February 2011.

In 2010 invested in:

  • January 2010: Captalis, Spanish lead generation company
  • January 2010: Martingale, hobbies marketplace
  • February 2010: Fisker Automotive, electric car company
  • April 2010: Assured Labor, job site for unskilled labor in emerging markets
  • May 2010: AppsFire, mobile app recommendation engine
  • August 2010: MeetMoi, mobile geolocalized dating site
  • August 2010: Follow on investment in Rate it All!
  • June 2010: Autrement (HotelHotel), Tripadvisor for France
  • June 2010: Follow on investment in Martingale
  • July 2010: Follow on investment in Peopleperhour, a freelance marketplace
  • October 2010: WiseStamp, social email signatures
  • October 2010: Hipway, Jetsetter for Russia
  • October 2010: Viajanet, Expedia for Brazil
  • October 2010: Follow on investment in Sonico
  • November 2010:, for Germany
  • November 2010: HealthVillage, WebMD for the world
  • November 2010: Groupit, group gifting payment solution
  • November 2010: Oktogo, for Russia
  • November 2010: Babyboom, for Russia
  • November 2010: Betterment, a better way to manage your investments
  • November 2010: Windeln, for Germany
  • December 2010: EcoMom, high-end
  • December 2010: MobileSpinach, local mobile cash
  • December 2010:, for Germany
  • December 2010: Buildabrand, an online branding system
  • December 2010: Usingmiles, a miles management solution

Since I started angel investing and excluding the companies I ran, I have invested in 55 companies of which I still have 43 investments active. The angel exits I have had so far have paid for all 55 investments including disasters like Allmydata. In other words, I am break-even with 43 investments still active a few of which look very promising including Viajanet, Wikimart, Brightroll and PeoplePerHour.

We’ll see what 2011 has in store for me from an angel investing perspective. Regardless, I am looking forward to meeting great entrepreneurs and hearing fantastic new ideas!

Fantastic and brutally honest memo by Stephen Elop, CEO of Nokia

It has been clear to outsiders for a while that not all is well in the house of Nokia. The question was whether Nokia’s management would realize it before it was too late and what they would do about it. The previous management seemed complacent about the threat to Nokia’s very survival brought about by the three pronged attack of Chinese phone makers on the low end, iPhone on the high end and Android pretty much everywhere in between.

Stephen’s memo is a realistic assessment of where they stand and a necessary wake up call. It’s going to be interesting to see what they decide to do on Thursday (the early rumors suggest a tie up with Microsoft and Windows Phone 7). It might be the wrong strategic choice and too late, but at least they are deciding to go down fighting as opposed to letting events overwhelm them.

Here is the memo for your reading pleasure:

“Hello there,

There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his way out of the chaos to the platform’s edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.

As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the freezing waters. The man was standing upon a “burning platform,” and he needed to make a choice.

He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times – his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a “burning platform” caused a radical change in his behaviour.

We too, are standing on a “burning platform,” and we must decide how we are going to change our behaviour.

Over the past few months, I’ve shared with you what I’ve heard from our shareholders, operators, developers, suppliers and from you. Today, I’m going to share what I’ve learned and what I have come to believe.

I have learned that we are standing on a burning platform.

And, we have more than one explosion – we have multiple points of scorching heat that are fuelling a blazing fire around us.

For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.

In 2008, Apple’s market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.

And then, there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry’s innovation to its core.

Let’s not forget about the low-end price range. In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally – taking share from us in emerging markets.

While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.

The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.

We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough. We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.

At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like North America. Additionally, Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements, leading to slowness in product development and also creating a disadvantage when we seek to take advantage of new hardware platforms. As a result, if we continue like before, we will get further and further behind, while our competitors advance further and further ahead.

At the lower-end price range, Chinese OEMs are cranking out a device much faster than, as one Nokia employee said only partially in jest, “the time that it takes us to polish a PowerPoint presentation.” They are fast, they are cheap, and they are challenging us.

And the truly perplexing aspect is that we’re not even fighting with the right weapons. We are still too often trying to approach each price range on a device-to-device basis.

The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyse or join an ecosystem.

This is one of the decisions we need to make. In the meantime, we’ve lost market share, we’ve lost mind share and we’ve lost time.

On Tuesday, Standard & Poor’s informed that they will put our A long term and A-1 short term ratings on negative credit watch. This is a similar rating action to the one that Moody’s took last week. Basically it means that during the next few weeks they will make an analysis of Nokia, and decide on a possible credit rating downgrade. Why are these credit agencies contemplating these changes? Because they are concerned about our competitiveness.

Consumer preference for Nokia declined worldwide. In the UK, our brand preference has slipped to 20 percent, which is 8 percent lower than last year. That means only 1 out of 5 people in the UK prefer Nokia to other brands. It’s also down in the other markets, which are traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on and on and on.

How did we get to this point? Why did we fall behind when the world around us evolved?

This is what I have been trying to understand. I believe at least some of it has been due to our attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally.

Nokia, our platform is burning.

We are working on a path forward — a path to rebuild our market leadership. When we share the new strategy on February 11, it will be a huge effort to transform our company. But, I believe that together, we can face the challenges ahead of us. Together, we can choose to define our future.

The burning platform, upon which the man found himself, caused the man to shift his behaviour, and take a bold and brave step into an uncertain future. He was able to tell his story. Now, we have a great opportunity to do the same.


The 4-Hour Workweek is shockingly good and may change your life forever!

I had heard great things about The 4-Hour Workweek and actually met its author, Tim Ferriss, a few times, but the gimmicky title always kept me from reading it. Rave reviews for his new book The 4-Hour Body, with yet another annoying gimmicky title, convinced me to start at the beginning to see what all the fuss was about.

Funnily enough the entire raison d’être of the book, to reduce the amount spent working because it is boring and meaningless, does not apply to me. I love being an entrepreneur and angel investor and thus fall more in the “love what you do and you will never work again a day in your life” category, especially since I can work from anywhere and can thus go on fun mini-vacations all the time.

I am not even sure that I bought his analysis that the opposite of happiness is boredom and that thus we should keep ourselves active. Hyperactivity, be it from working for work’s sake or finding personal activities, seems like an escape from finding deeper contentment with ourselves and the lives we lead. That said, as an escape, pursuing personal projects trumps slogging through hours of mind numbing and boring work. To be fair, later chapters of the book espouse doing things slowly and seeking the activities that speak to us.

Regardless, it’s less the book’s life philosophy that struck me (since it mostly eschews one), than its extremely practical productivity improving advice. In many cases, I had already reached similar conclusions to Tim’s and had already put them into action in my own life. The difference is that I got there through lifelong trial and error while you can get there by reading the book.

I know most of my friends will make fun of me for recommending this book given the number of hours that I “work”, but ultimately it’s about being as productive as you can be and really getting meaningful things done. You can choose to spend your increased productivity by doing the same amount of work in less time, thus freeing time for other activities, or you can choose to just do a lot more. It’s up to you to find your Pareto optimal life/work balance.

In the meantime, if you ever wondered how I am able to get so much done, here are a few of Tim’s recommendations that I had already implemented in my life that could work for you too:

  • I don’t read daily newspapers, watch daily news, etc. For the most part the news is sensationalist and irrelevant dribble. I prefer to get the relevant news in a more analyzed and digested format and thus only read The Economist and New Scientist every week. I also check a few tech blogs (Techmeme, Techcrunch, Engadget) once a day more for entertainment (I love tech and gadgets) and a bit to see what’s going on but that takes less than 10 minutes per day.
  • It is critical to live in the present and provide attention. Leave work at work and don’t think about it in other environments. Don’t take your cell phone with you or turn it off after you meet whomever you are having dinner or drinks with. Don’t answer the phone during meetings. Shut off your cell phone at night and don’t use it as an alarm clock (because most need to be on for that), especially when traveling internationally.
  • I mostly work from home on Mondays and Fridays, if only to save on commuting time and to spend more time with my dogs. It’s also great how much you can get done when you are not distracted by noise, questions, etc. To the extent possible don’t schedule phone calls and meetings for those days either! This setup makes it easy to take lots of 4 day week-ends. From NY I often whisk myself away to Cabarete or Snowbird/Alta for long week-ends either to kite board or ski.
  • Do not do work for work’s sake. Outsource or delegate all repetitive, low value creating activities that you get no enjoyment from. It can be very inexpensive to have a smart personal assistant pay your bills, go through your mail, etc. The 4-Hour Workweek walks you through a few smart and inexpensive examples of how you can set it up. I also apply it to my personal life. I don’t do laundry (the cleaner next door does it for $1 per pound!), cook, clean, etc. because I don’t get any enjoyment out of these activities. I would rather be playing video games or tennis 🙂
  • Take few meetings, limit them to less than 30 minutes and make sure they have a clear agenda.
  • Learn from Parkinson’s law: you will fill whatever time you allocate to a task. Self-impose short deadlines to get things done fast with just as much quality.
  • Take decisions quickly. Agonizing over the decision does not improve its quality and just reduces your happiness. Most wrong decisions are easy to correct once you realize they were wrong.
  • Travel light! It’s shocking how little you can take. I just came back from a 12 day trip to India. I had so little with me (a backpack with my notebook and Kindle weighing in at much less than 10 pounds) and a small suitcase weighing in at 18 pounds full, that I kept thinking I must have forgotten something. The reality is that for $50 or less you can buy locally whatever you need. Don’t pack toiletries for instance, they force you to check luggage, and are easy to buy anywhere!
  • Material goods should be there to serve you and not you them. Follow the 80/20 rule (keep the 20% of things that you use 80% of the time) and sell or give away most of the rest -> clothes, books, etc. You won’t miss them (otherwise you would be using them more) and if you do, you can always buy whatever has left a gaping hole in your life rather inexpensively.
  • Don’t burden yourself with large expenses such as mortgages and cars when you can get much more bang for your buck from a life enjoyment perspective by spending that money on travel and life experiences. Many such experiences can be had incredibly inexpensively (and many are detailed in the book).
  • Work in batch mode once enough work has accumulated. To prevent interruptions remove email notifications from Facebook, Linkedin and the like. You will see the activity when you choose to logon.
  • Ask for forgiveness rather than permission.
  • Don’t take no for an answer. As Samuel Beckett said: “Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.” The book gives great examples of how to do this.

As most personal stories written from a first person perspective, the book can feel self-aggrandizing at times, a weakness this blog post and my blog in general also share. Despite that, I truly loved the book and found lots of great tips that I look forward to implementing in my life in the coming weeks.

Read the book, it might very well change your life!

There are fewer millionaires than you might think!

If you live in a city like New York with everyone is seemingly richer than you, you imagine that there must be millions of millionaires in New York alone. However, many high income individuals seemingly spend to impress and don’t accumulate much wealth. It’s those who lead ordinary lives, work hard and save who end up being millionaires.

According to recent studies there are:
• 24.2 million millionaires, 0.5% of the world’s population
• 81,000 people with assets over $50 million
• 30,000 with assets over $100 million
• 2,800 with assets over $500 million
• 1,000 with assets over $1 billion

I am happy to report that the most common way to get rich is to start a business and 47% of the world’s wealthy people are entrepreneurs.

You can read more on the topic at:

Current Reading List


  • Why the West Rules–for Now by Ian Morris
  • The Lucifer Effect: Understanding How Good People Turn Evil by Philip Zimbardo
  • The Upside of Irrationality by Dan Ariely
  • Augustus: The Life of Rome’s First Emperor by Anthony Everitt
  • The Bed of Procrustes: Philosophical and Practical Aphorisms by Nassim Taleb
  • How to Live: Or A Life of Montaigne in One Question and Twenty Attempts at an Answer by Sarah Bakewell
  • The 4-Hour Workweek by Tim Ferriss
  • The 4-Hour Body by Tim Ferriss


  • The Metropolis Case by Matthew Gallaw

I will let you know what I think of them!

The Sherlockian is worthy of Sir Arthur Conan Doyle

I was in the market for a good thriller or detective story when I came across a glowing review of The Sherlockian in Entertainment Weekly. The concept of a dual track detective story one taking place in Arthur Conan Doyle’s time and one in the present appealed to me and the book did not disappoint.

The book covers a modern day fictional search for Arthur Conan Doyle’s lost diary which may explain why he chose to resurrect Sherlock Holmes from the dead after a multi-year hiatus. In parallel, the book imagines Conan Doyle’s life during the time period covered by the lost diary.

The book won’t enter the pantheon of all-time great detective books, but I loved its cameos and clever twists. In other words, The Sherlockian is a good historical suspense novel worthy of your time!

The Merchant of Venice is fantastic!

I had the great pleasure of seeing the Merchant of Venice with my good friend Niro last Friday, courtesy of my good friend Stacie.

The Merchant of Venice is actually one of the few Shakespeare plays I had not read or seen and I was looking forward to seeing it. The play is very different from the Shakespeare plays I have seen which are either comedies with dramatic elements where everyone ends up getting married at the end, or tragedies with comic elements where everyone dies at the end.

The Merchant of Venice sits somewhere in between given its more ambiguous ending. Portia does forgive Bassanio and everyone makes amends in the end, but I was left feeling there was trouble brewing in the relationships. While the play appears anti-Semitic at first, it really depicts all characters as flawed except for Portia and Nerissa. The Merchant of Venice is probably Shakespeare’s most feminist play. While at first Portia seems bound by the wishes of her deceased father, she rapidly shows her wherewithal, independence and judgment. She is also just and righteous where none of the men have an acceptable perspective. Given all this, I wonder how the play would have been received in Shakespeare’s time.

The acting was superb. The elocution of all the actors was perfect with the minor exception of Lily Rabe, who played Portia, who did not speak loud enough towards the end of the play. Al Pacino played the part of Shylock to perfection, which is no mean feat given that every time I see him I think: “booyah!”

Go see the play!

2010: A Year of Change

While the last few years were the logical continuation of the years that came before, 2010 marked a series of profound changes in almost every aspect of my life.

I was essentially kicked out of both my apartment in New York and my house in Long Island and moved to a house in Bedford and hotels in New York.

OLX continued to grow slowly but surely, passing the 140 million unique monthly visitor mark, but experienced significant change as Naspers bought a controlling stake in the company through a combination of primary and secondary investment in my largest deal ever (around $200 million). That said, other than OLX being much better capitalized not much has changed and I expect to remain Co-CEO for the foreseeable future.

I was given the chance to give a keynote at Emerce eDay where I spoke about entrepreneurship, OLX and the travails of running a global company.

My New Year’s resolution of traveling less came to naught as I continued to travel far and wide for OLX. Unfortunately, I spent almost 9 months on the road. Uncle Sam need not worry as I chose to remain a US tax resident – US capital gains taxes remained reasonable and I am grateful for the many opportunities I have been given in the US. I intend to be on the road less than 6 months in 2011.

On the personal side, a combination of artificial cartilage injections and intense rehab got my left knee into shape, but I managed to injure my right knee my first time out on the tennis court. I still can’t play tennis, heli-ski or do much extreme travel, though I continued to improve at kite boarding where the wind carries most of my weight. I hope to finally rid myself of knee injuries in 2011!

2010 is the year I discovered Hawaii. I went to Hawaii for the first time for MaiTai in May and absolutely loved the kiting there. I went back in August for a week of camping and hiking in Kalalau followed by a few days of kiting in Maui and went back again to Maui for Christmas and New Year.

The best books I read in 2010:

My best blog posts of 2010 were:

I became an ever more active angel in 2010 making 22 investments (with 7 more to close in January 2011) and 4 follow on investments. I also sold 5 companies and have signed term sheets for two more. One other sale fell through after we (the sellers) had signed the stock purchase agreement! The buyer’s board changed its mind at the 25th hour… I will detail the changes in my angel investing strategy and performance to date in an upcoming blog post to be posted once one of the pending sales closes. I will detail the full portfolio including investments and exits then. I can already share that one of my companies, Allmydata, was essentially a total write-off, but I did very well on the other exits. Essentially to date I invested in 55 companies excluding the companies I ran – Aucland, Zingy and OLX. I had 12 exits and the proceeds from those 12 exits covered all 55 investments. In other words I still have 43 investments (again excluding my large remaining share in OLX) where all the proceeds, if any, will be pure profit.

My predictions for 2010 were by and large correct:

  • It will take another 4 years to see how successful OLX will ultimately be.
  • OECD countries had sluggish growth and low employment growth.
  • 2010 was an amazing time to be an Internet entrepreneur though not quite for the reasons I envisioned as the early stage startup scene became awash with capital and M&A activity picked up significantly.

Fortunately, the more pessimistic scenarios I outlined (but only assigned a 33% probability of happening) did not come to bear and OECD countries did not experience a double dip.

The world economy is still awash with imbalances. There is a looming sovereign debt crisis in the West. The US has intractable partisan politics. Household balance sheets are far from being repaired. Boomers are starting to retire threatening to bankrupt pension systems. There is seemingly little political or public will to deal with systemic long term issues.

In the past, I have often been proven to be early in my negative forecasting. I started warning my friends about excessive real estate prices in the US in 2003 even though I only blogged about them in 2006. The aforementioned imbalances are unsustainable, but given my past predictive performance, I suspect the day of reckoning will not come in 2011.

2011 will likely bring more of the same as 2010. Fueled by cheap money startup and M&A activity will remain extremely high and I suspect (hope?) that several of my portfolio companies will be acquired. The US will have reasonable economic growth, though unemployment will remain high (above 8%). Europe will muddle through its problems at the periphery. China, Brazil and India will continue to roar ahead. The global structural imbalances will persist and may even worsen, but barring an unexpected black swan a new global crisis probably won’t happen in 2011.

I am also hopeful that at some point in the coming decade a new productivity revolution will spur growth and allow us to put our problems behind us. Things look bleak now, but if we think back to 1979 with raging stagflation and high oil prices, the outlook seemed dire for the West. Yet a period of 30 years of low inflation, stability and growth lay right around the corner. Even though I can imagine countless scenarios for the coming years that end with economic Armageddon and/or war, I am hopeful that the rising wealth in South East Asia and Brazil combined with continued technology improvements and structural changes in the West (e.g.; increasing the retirement age to 70) will spur a similar era of growth and stability.

Happy New Year!

Great Discussion with Ron Chernow on George Washington

Ron Chernow is one of my favorite authors. He wrote amazing epic biographies on Alexander Hamilton and Rockefeller amongst others. He recently released a biography on George Washington called Washington: A Life. He spoke with Jon Meacham at the New York Public Library last September about his new book.

My good friend Joyce Pustilnik recently pointed me to the fascinating podcast of that discussion which I am attaching for your listening pleasure.

I have not bought his new book yet, but it’s definitely on my to-read list!