2 reasons to go to Taiwan

Taiwan isn't top of many people's lists of places to go. I went there in 2000 for about 5 days. I was working in Japan and was desperate to get away from the Tokyo/Yokohama megalopolis I was living in. One of my students had been stationed in Taiwan during the war and recommended it to me. In particular he recommended the National Palace Museum in Taipei which he claimed held over 1 million artefacts and held the largest collection in the world.

I'd recommend Taiwan to everyone for two things:

• The National Palace Museum is staggering. During the Chinese civil war Chiang Kaishek boxed up the contents of the Imperial Museum in Beijing and moved it to Taiwan. The museum contains a cross-section of 4000+ years of Chinese history and art. Some of the craftmanship is just staggering (but that doesn't stop it turning up in plastic format in Hong Kong).
• The other amazing thing I saw in Taiwan was Taroko gorge. I'm a big fan of hot thermal springs. The springs in Taroko were beautifully unspoilt when I was there. In particular one set of springs located in cave, next to the river at the bottom of the gorge. There's nothing quite as refreshing as lying in a freezing mountain river with boiling sulphurous water pouring over your head. I wish I could have got a photo but at the time I was too busy enjoying myself.

Snake alley in Taipei is also worth a visit if you feel you need a quick reminder of the savage cruelty which we humans mete out on the animal kingdom.

Here are my photos:

Taiwan 2000

City to surf times

Just trying out the charts in Google Docs. Here are my City to Surf times for the last four years

Great news for Australian PRS 505 Sony Reader owners!

Great news for Australian PRS 505 Sony Reader owners: the new firmware has been released. The Sony Reader now supports ePub and most importantly Adobe Digital Editions books. This now means that we can buy books from the Dymocks online bookstore and read them on our Readers.

The downside is that Dymocks ebooks are ridiculously overpriced. They're not much cheaper than paper books. Hopefully this will change in time.

The Challenges of Software as a service

I've been thinking a lot recently about Software as a Service (SAAS). It seems to me that there are huge opportunities in this area at the moment. As Nicholas Carr points out however it is unlikely to be the goldmine that many thought it would be. Here a few disjointed thougths:

The SAAS battle is going to be fought over the next few years and I suspect that those companies which win the early battles will end up winning the war. Companies like Salesforce and Netsuite are perfectly poised but the big old companies like Microsoft are definitely still in the game. This war will be fought by sales people using datacenters and products as their weapons.

I personally don't think price cutting will be a major tactic in these battles. Companies unlike casual internet users, expect to pay for services. In fact they are downright suspicious of free services and rightly so in my opinion. Businesses need to know that they are being supported. Charging a premium for your service may give you credibility with potential customers. At the moment all that matters is that you are significantly cheaper than the desktop alternatives.

Contrary to much popular opinion I think Microsoft has the ability to move seemlessly from being the largest desktop software company to the biggest online software company. At some point it will just flip the switch and start offering its Office customers a fully functional online version. Power users will be able to download the high spec desktop versions of the software but everyone else will just use Office online.

Transferring over from traditional software to cloud based SAAS is a potentially laborious and technical process. SAAS providers may find that they have to provide this service for free in order to attract customers.

One of the great things about SAAS is the opportunities it offers niche players. I often go into companies and find that someone internal has created a really incredible front end system. They often have to do this because there was no software provider catering for their particular niche in the market.

A private equity or venture capital fund could do a lot worse now than go around snapping up all these niche services. They could support them out of a single location and invest in a really strong sales team. Then its just a race for users.

Advertising model

I started this post a few weeks ago after reading the Top 100 Web Apps in Australia list. I had this real unease at the number of businesses on the list that were relying on the advertising model. Courtesy of Elias I just stumbled on this amazing talk by David Heinemeier Hansson about the benefits of aiming low and aiming at enterprise




There's not much more I can add really. The Dane hit it on the head.

The only thing that I would add really is that the kind of VC's that we have in Australia are more likely to go for the modest simple startups that Hansson is talking about. The kind of sums which Hansson shows in this presentation are exactly the kind of things that VC's in Australia would love to see.

And here's the old post that I started:

I work in venture capital but not specifically tech venture capital. The advertising model worries me a lot. There are so many unknowns, from what I can see, about the long term viability of this model. I can feel it myself as my media consumption habits change; I am becoming less and less exposed to traditional advertising. If I want something then I will search for it. I search for things I don't know I want yet by reading blogs and news sources and occasionally going to the shops. I have basically stopped watching TV. I read a newspaper on average once or twice a week. I listen to the radio for an hour or two a week while I am in the car. Maybe I am deceiving myself but more than ever I think we are masters of our own consumption. Any business model which thinks that this tide is going to turn and advertising is going to once again master consumers in the way it did during the 20th century is dreaming in my view.

Having said this I suspect that a lot of the VC speculation in the US is based not so much on the advertising models but on the value of the user bases to large companies. Microsoft paid $400m for hotmail when it had 8.5m users. It now has nearly 300m users. That must go down as one of the great investments of the Dot Com era. A lot of Web 2.0 companies and their investors don't seem that bothered by the lack of advertising revenues. They're in a race to get users. Monetising those users will be the work of whoever they sell to. Australians are huge gamblers. They have a whole national holiday basically dedicated to an indigenous gambling game. I'm sure if more Aussie startups pitched their business model as a gambling on a race then they'd get a lot more interest from local investors.

Having said that I think that indigenous Australian social apps are always going to struggle.

and here I stopped and started this post

What I'd like to see in the Top 100 web apps

Ross Dawson's list of the Top 100 web apps got me thinking about how many of them I'd actually be willing to invest in if I had the money. I'd be curious to see some of the business plans and the assumptions they're based on. Looking down the list it's not immediately clear how any of them plan to make money other than through advertising. I'm not a big gambler so I'd want to see some pretty firm cashflow projections. I'm not talking about becoming a multimillion dollar company either, I'm just talking about covering costs and making a modest return.

One thing I've learnt from reading a bit about value investing is to always look for the really simple boring business models. Looking down the list of Top 100 web apps I couldn't find many really boring companies. They all look fairly interesting. (Number 50 is fairly boring but it's also dead).

So what kind of companies am I talking about? I have been an accountant now for 6 years and in that time I have been into at least a couple of hundred businesses in all industries. One of the things which has struck me in that time is just how poor a lot of traditional enterprise software actually is. Not only is it poor but it's often very expensive especially when it needs to be customised. Companies are often slaves to their CRM providers. These software providers are in turn slaves to legacy code (is that the right jargon?) which they'd love to put behind them but for various reasons aren't able to.

Enterprise software often has to be localised because of local laws and regulations which means that it's harder for multinationals to get in without putting a presence on the ground. One of the leading online bookkeeping programmes, Netsuite, can't do Australian payroll. Until it can it is going to struggle to win over a lot of small companies. The same goes for Quickbooks online.

I recently stumbled on Clever Books which is a simple Australian online bookkeeping programme comparable to MYOB. Cleverbooks is about half the price of an MYOB subscription by my reckoning. Now this is a company that I'd be willing to invest in. The business model is so simple. The measures of success are so clear. The cashflows are so real!

MYOB is obviously a big player but there are lots of other smaller, niche players who Web 2.0 entrpreneurs can set their sights on. How about creating niche Web 2.0 apps for funeral homes or language schools or truck drivers or law firms? There are many niches to attack. The more boring the industry the better in my opinion. Just look at the results of a search for 'funeral home software'. The top results look shoddy to say the least.

My challenge to the Australian Web 2.0 scene: give up on the wacky social apps; pick a really niche industry and nail it. Next year I want the Top 100 list to be so boring that I fall asleep before I get to 50.

Stand up, talk big, look forward

Ever since I found out that Ian McEwan learnt his craft on a creative writing course I have been slightly wary of him. The snob in me says that writing isn't something that you can be taught. When I'm reading his books I have the nagging thought in my mind that I'm reading the product of a carefully programmed automaton. This view is purely based on ignorance. I've never tried writing anything longer than a blog post. (Most of my attempts to write novels never get beyond a page or two). All writers have to hone their craft; some do it wandering through depression era America; some do it in the deserts of Kuwait; and others do it at the University of East Anglia.

Anyway, after the big fuss over Atonement I thought I'd give him another chance so I borrowed Enduring Love from a friend and I'm halfway through it now. I'll save my review for when I'm finished. So far I think it's great. One passage in particular really caught my imagination:

For all that there is an uneasiness I have to conceal when I meet a child. I see myself through that child’s eyes, and remember how I regarded adults when I was small. They seemed a grey crew to me, too fond of sitting down, too keen on small talk, too accustomed to having nothing to look forward to.

It's a great little summation of what it is to be an adult. Perhaps that could be a motto in life or even a tattoo: stand up, talk big, look forward.