I wanted to get a feel from the ground, on how the common man perceives the NEM. I spoke with at least 50 people who in the informal analysis might represent a cross-section of the “average” Malaysian, if there is such a creature. To begin with, I started with the mamak shop owner on the street corner, moving to the newspaper vendor and to the soya-bean drink vendor in the van. I quickly got the message that the problems they are experiencing (namely less cash in the pocket) are due to the economic downturn we are undergoing. Once the economy bounces back, the pockets will jingle with cash again – this is what they believe. Not many had heard of the NEM and those who had, skipped the pages of the newspaper where NEM was reported. Enter the first player – the man on the street who does not see what the fuss is all about.

I turned my attention to academics, government employees and executives. The feelers from the ground were different. There is acknowledgement that Malaysia is not doing as well as some other countries and that we are experiencing the heat from the hunger in the belly of China, India, Singapore and others. China is perceived as the manufacturing capital of the world while India is positioned as the backend services hub of the western world. Singapore is well, just Singapore – a tiny red dot that manages to outdo Malaysia at just about everything. There is such a love-hate relationship with this neighbouring country that both envy and contempt are expressed several times in the same sentence. This group had heard of the NEM and most had read the NEM reports in the newspapers, but only after reading about Amber Chia’s marriage with her manager and how an 18-year old girl in Kuantan had been beaten up and robbed by her boyfriend. Enter the second player – the NEM is not spicy enough to compete with sensational stories.

I had to get the feedback of entrepreneurs as well, so I rang up some of the CEOs of technology-based SMEs whom I frequently interact with. Most, if not all, were aware of the NEM and had in fact been waiting for the announcement and details. They had read the PM’s speech and the analysis in the business sections of the newspapers. They just cannot figure out how the government is going to deliver the outcomes enumerated by the PM. To them, the NEM looks like a wish-list that is going to difficult to fulfil – given their experience to date with government machinery. Enter the third player – business people who have nothing but more questions on the NEM.

NetValue readers should be aware that only the first part of the NEM has been announced. Essentially, this is a critical analysis of where Malaysia presently is, what’s happening in the global context, why the NEM is required, what it’s goals are, areas that we should focus on the and determining where we want to head. This is the “what” portion of the NEM. The all-important “how” portion will be revealed at a later date and will be called the “Economic Transformation Programme”. Somehow, this point has not been picked up clearly by the third group in my unscientific sample.

The NEM is built on the premise that for Malaysia to change, the people must move up the ladder and become innovators. The future of the country depends on the willingness of the citizens to adopt change as quickly as possible. Mindsets have to change, together with attitudes and skills. Unless we get a buy-in from all the stakeholders, this is going to be more difficult than we would expect it to be under ordinary circumstances.

The impressive, well-researched 209 page NEM document has to be translated into a language that my first sample group can identify with. It has to resonate in the hearts and minds of those who do not and will not read government plans or intellectual-type documents. The plain-reading document must relate to what matters most to this group of stakeholders – money in their pockets. They must be made to understand, in very practical terms and without any jargon whatsoever, that this is what the NEM will do for them. This is what I feel the NEAC must do quickly and immediately. Next, some very nifty plain-language case studies have to be crafted for the second group that seeks excitement in the material they read. The present form will just not do for this group. We have to plot a storyboard that sparks the imagination of this group and engages them to explore the NEM, just as they would do a novel or video game. For this group, we have to focus on the sizzle and aroma, not the steak itself, so that the punters will willingly walk into the restaurant and eat the steak.

The business community must be made to understand that the implementation details are yet to come and that the NEM is not just a collection of motherhood statements. The “how” will be revealed, after consultation with various parties. The NEAC must do this quickly and effectively, before the NEM loses its buzz and excitement. The NEAC must remember that the business community is a captive customer that is keen to buy its wares, so we cannot afford to lose this customer through unresponsiveness.

Lastly, we have to connect with the new media, taking our crusade to where the young and trendy congregate. This cannot be done in the typical dry and factual manner that the older generation is fond of doing – the new media battle cry must reflect the whims and fancies of its target audience.

In short, unless the NEM is effectively communicated to the public at large, it will become just another document on the shelves of libraries. It will remain a acronym on the lips of some and suffer indifference from, and possibly sabotage by, the bureaucrats who are tasked with its implementation. We can ill afford this and through collective effort, is something that can be avoided.

This article first appeared in “The Edge Malaysia” 12 April’10

Over the last two months, I have met many entrepreneurs who are now stuck with their proposals in their hands, unable to secure funding to take their projects forward. Seed funding is still available but the amounts disbursed are relatively small and are more appropriate for small teams of individuals who want to take their first plunge into the realm of entrepreneurship. Malaysia has never had an angel network to speak of and attempts by an international angel network to setup a chapter in Malaysia failed last year. Our culture and eco-system is vastly different to that in developed nations, making the expectations of potential local angel investors humorously unrealistic. While they accept that they will be “sleeping partners” in the venture, many of them insist that their “pillow talk” be adhered to. Their gentle murmurings soon amplify into piercing voices as money not only talks, it shouts. Behaviour depicted in William Shakespeare’s novel “The Merchant of Venice” bubbles to the surface, with the Shylocks demanding their pound of flesh.

Of course the option of borrowing money from banks or selling equity to Venture Capitalists is still there. Easier said than done, however both sides play the blame game for their lack of engagement – banks and the VCs blame entrepreneurs for not understanding their business or projects well enough to produce realistic and viable business plans while entrepreneurs point the finger at the funders for not seeing the picture and vision that the entrepreneurs can perceive in the eye of their minds. This is an age old argument that has become the hallmark of how different images manifest to both parties, although both are staring at the same crystal ball. Let’s not even complicate the matter with instances where banks insist on collateral or VCs, who because of their charter, are only allowed to fund companies that have matured to a certain level or are active in a specific sector only.

Even if you meet all the criteria, you have to compete against other companies who have also met the criteria. If your application happens to be evaluated at a time when there are other stronger cases, you may not be successful even though you have a perfectly viable business proposition. The problem of course, is that you have no way of determining who or what you are up against. Recall the story of a lion chasing two men. The issue is not about out-running the lion but instead, out-running the other person. As long as one man outruns the other, he escapes becoming the lion’s lunch. If you don’t want to end up as lunch, you must “outrun” other companies whose applications may also be sitting on the VC’s table.

This is where creativity and innovation come into the picture. The standard MBA-type business proposition is no longer enough. While it is absolutely necessary that you prepare your proposition so that it includes all the information that the funder is looking for, but in these economic times, this alone is not sufficient to give you the competitive edge. You have to do more and inject creativity and innovation into all aspects of your proposition. It is not enough to have an innovative product or service alone – innovation must be apparent throughout the value chain. It has to be built into your in sales and marketing process, in the business model, in the choice of strategic partners and alliances, as well as in post-sales support and service.

We all know that at the end of the day, the bottom line is that money is needed to make more money. Entrepreneurs have to quickly adjust to the new reality that there may be limited grants available from now on. They have to stop complaining about the situation and start planning for life in the altered landscape. They have to mature quickly and come to terms with the present reality. After all, one cannot get ahead by continuously looking in the rear-view mirror. To secure non-grant funding, new skills have to be learnt; new rules have to be mastered. This season, Mental Protein will focus on the new skills and rules that entrepreneurs need to acquire to do precisely this.

Slowly but surely, we are being dragged into a world where free money is scarce and entrepreneurs have to really buck up to secure bank or VC funding. As Malaysia prepares its New Economic Model, we have to be ready to play the liberalisation and globalisation game. We can become the hunter or the hunted, the choice is entirely ours.

Welcome to the real world.

This article first appeared in “The Edge Malaysia” 22 March’10

Be that as it may, 2009 was a mixed bag from an innovation point of view. We had some stunning successes on the one hand and a few disappointing letdowns on the other. From a country perspective, it was very heartening to see the Prime Minister take the lead and declare innovation as a national agenda. The drafting of a New Economic Model, anchored on innovation and creativity, is already underway. The 2010 Budget speech alluded to the fact that the goal of heading towards a high-income economy can only be achieved by injecting and embedding innovation into industry, government and education. At the highest level, things are looking much better than they were before as the leadership is convinced of the role of innovation in nation building. Closer to ground however, the picture is not quite the same.

If we look at patents, a key measure of innovation in a country, the numbers do not look healthy. Only about 15% of the patents filed in Malaysia are of Malaysian origin – the rest are foreign patents seeking registration in our country. Of the 15% Malaysian origin patent applications, less than 9% are actually granted. The failure rate of Malaysian origin patents is 91%. This means that of all the patents that are approved and granted, only 0.6% are Malaysian. Not a good indication, by any yardstick.

A government agency recently announced that the rate of commercialisation from public universities stands at 3.4%. I was quite surprised to see this figure because in my opinion, this is rather high for a country that has a critical mass of teaching universities. I delved deeper into the issue and using official statistics for the last 2 years, a different picture emerged. The best performing university was one that achieved only 0.01% of commercialisation success. You really don’t want to know about the rest. We can of course rationalise this number and put forward all kinds of reasons and explanations, but just keep Jim Rohn’s definition of “rationalise” in mind.

What beats me is that while most of us acknowledge that we have some systemic and fundamental problems that have led us to the state of affairs we are in, we are not willing to stare at ourselves in the mirror and admit the strategic mistakes we have made. Until and unless we acknowledge where we have gone wrong, how can we correct the situation? Have we as a nation become so fearful of our own shadows that we dare not call a spade a spade? Have we become experts at rationalising instead? I choose to adopt the approach of self-criticism as I believe it is the best weapon to combat threats to our survival – Andrew Grove’s “Only the paranoid survive” should be essential reading for Malaysians who fear self-criticism.

The year 2010 has been declared the year of innovation and creativity. A mere declaration does not change people or their mindsets, persistent hard work does. What is Malaysia going to do to make her citizens innovative and creative? Sporadic acts of intervention and activities will just make a mockery of the declaration – we need a systematic and methodical process that will ignite innovation and creativity in the public, while a structured plan of injecting and embedding innovation is implemented in the industry, government and education sectors. Do we have such a plan? If we do, then it is surely a well kept secret. I sincerely hope we do not repeat our mistakes of the past – asking people to do something without empowering them or without giving them the tools required to do the job. You just cannot become innovative unless you learn how to innovate. This is an overused and abused cliché but it is still true in today’s age of rapid technological advancement and globalisation – it you fail to plan, you most certainly plan to fail. We don’t need rocket science, we just need to get back to basics.

We are constantly reminded how the South Koreans or Taiwanese have overtaken us over the last 2 decades, let alone the Singaporeans. How did they achieve this in a relatively short time span? You can rest assured that they applied a very liberal dose of common sense, attacked their weaknesses head-on and promptly returned to the basics. This is what Thailand and Vietnam have been doing over the last several years too, making FDIs stand up and take notice of them.

While the Prime Minister is taking the leadership role of doing the right things, the masses have to do things right. One cannot function effectively without the other – both have to be in sync with each other. Otherwise, Malaysia will become a dysfunctional nation, at odds with itself and isolated by the world. We cannot take baby steps as far as innovation is concerned – the time for small actions is over. Our survival depends on bold steps, executed swiftly with precision. As the Kiwis put it diplomatically – let’s stop mucking around, close the charade and get the shears out. Enough is enough.

In all honesty, I think 2010 can be a good year. The economy is likely to show signs of bouncing back and I hope sanity will return to our embattled political parties, leaving us more time to focus on building Malaysia Version 2.0. We have to focus on three things in 2010 – implementation, execution and delivery. We have to stop talking and start doing. We know that this is our weakness, so let’s address this weakness and take decisive steps to overcome the problem. Bring in foreign help if we have to, but understand that what has worked for them will not necessarily work for us. Learn and adapt methodologies and processes until they fit our own unique eco-system. Self-criticise until we get it right. Stop being defensive and above all, don’t rationalise.

This article first appeared in “The Edge Malaysia” 28 Dec’09

Entrepreneurially Bent, Cyberjaya.

Wow, I thought that the notion of a killer application had been killed. So many times technology gurus bet their mouths on certain technologies or killer applications, only to find that they were mere fads. I for one do not believe in the ability to predict which technologies or killer applications will survive the acid test – the market. The market is a funny animal, totally unpredictable and likely to spring a surprise when you least expect it. Rather than predict the success or failure of a technology, I prefer to test the market.

If you are looking at general or generic categories that will be hot next year, then it is not too difficult to answer your question. Anything that has the label “clean and green” is likely to attract the attention of both investors and consumers. Most people in developed nations have woken up to the fact that the human race has been systematically destroying our earth and any technology that helps halt or reverse this trend will be of interest. However, this is unlikely to be at the expense of price or aesthetics – money and looks will dominate the consumer’s mind. So if you ask me whether a Malaysian consumer will choose a computer that has lower energy consumption over one that does not, I think not. Malaysians are more likely to be in the same mind frame as others from developing nations – I am not going to give up my priorities just to save the earth. If the product or technology meets all my wants and needs, looks good and doesn’t cost any more, then I wouldn’t mind helping save the earth. Not otherwise, because it is my money and I come first. Saving the earth can wait.

Another general category to focus on is one that gives consumers power, freedom and mobility. If a product or technology can help me do what I want to do and not tie me to a specific place or time, I am likely to go for it. This is the general trend that is driving the subscription of WiMax in Malaysia, in spite of the advertisement which seems to have offended some people. . Broadband on the go, at home or in the in the park. Once consumers get the feel of freedom, they are unlikely to go back to confinement. This is also why Facebook, Twitter and Linked-in applications on mobile phones are growing at an exponential rate. Any product or technology which can un-tether consumers will fly. For this, consumers are generally willing to pay more, as it meets their own (selfish) wants. This is where you have to appreciate the difference between wants and needs. As long as their needs are fully met, consumers will generally throw extra money to get their wants, so an emotional appeal has to be present in the product or technology. If you fail to do this and use a logic-based approach, you will lose.

The third general category you might want to explore is that of health. The health craze is not a fad and is not likely to go away. For some strange reason, people want to live longer. Even those whole live miserable lives want to lead longer miserable lives. Any product or technology that can help them achieve this want, is staring at a few pots of gold. We are not talking about health as in the drugs that are necessary to combat diseases or illnesses – these are an absolute must. We are talking about those who are not sick in any major way and just want to extend their lease on earth. These are the consumers who will fork out cash to try out every new product that promises a longer earthly experience. For them, fear is a good marketing strategy. The belief in Murphy’s Law that if something can happen, it will happen to you, has propelled the insurance industry to heights that would have been difficult to imagine. Similarly, all you have to do is to put fear in the mind of consumers that they could be a target for anything from cancer to heart attacks to diabetes and you will get them queuing at the door. Ethics, what ethics? Have you ever come across an insurance salesperson who tries to convince you that nothing bad is ever going to happen to you?

The fourth general category is one that people are uncomfortable talking about but are actively engaged in nevertheless. For some, it is a preoccupation while for others, it appears to be a fulltime occupation that their mind is engaged in. Advances in high-speed broadband have come about due to it directly. Phenomenal progress in content management, optimisation and compression have been driven by it. The envelope of image processing is being pushed by it to the limits of physics. No, it is not society wellbeing or the advancement of the mankind. It is sex. Look at Viagra from Pfizer or Cialis fro Lilly. Which do you think is the bigger user group – those who need to take it to overcome their outstanding problem or those who want to take it to have an outstanding experience? Sex has driven countless new technologies and innovations either directly or indirectly.

So, what’s in store for 2010? Your guess is as good as mine. My crystal ball does not work, so I just rely on common sense and the power of the market.

This article first appeared in “The Edge Malaysia” 14 Dec’09

Innovative Malaysian, Shah Alam.

In the simplest of terms, innovation means creating wealth from novel and creative ideas. A nation that is able to convert raw creativity into economic wealth is classified as an innovative nation. The March 2009 Global Innovation Index lists Singapore as the most innovation nation in the world, followed by South Korea and Switzerland. Malaysia comes in at number 21, just below France and Germany. On the surface of it, we are not doing too badly, as we are even ahead of Australia and New Zealand. When you dig in deeper however, there is cause for concern as our SMEs are lagging in innovation. Don’t forget – the SMEs are our engine of growth and if this engine is not innovative, we cannot have a smooth ride. All of us should be losing sleep over this. We cannot and must rely on the large foreign companies in Malaysia to drive us to our destination. We also cannot rely on GLCs, they are themselves feeling the brunt of globalisation and liberalisation. Large Local Companies (LLCs) are of a very small number in Malaysia and this cannot be our focus either. Hence by default, we have little choice but to instil innovation into our SMEs. This automatically means that we have to instil innovation into the average Malaysian, as it is he who makes up the SME sector in Malaysia.

The government wants to double the per capita income of Malaysians in 10 years, making us a high-income economy, an ambitious but achievable target – if executed and implemented diligently. Bureaucrats can either make or break this dream, as the task of implementation lies in their hands. I choose to believe that regardless of political affiliation, the bulk of bureaucrats want what is best for the nation. They genuinely want to implement plans and projects that will bring about prosperity and success for Malaysians. However, there is a snag. An innovation economy places a different set of demands on government and industry alike. The rules of the game are not the same as the rules for an industrial or agricultural economy. If we try to play the innovation game using the rules we know, we will lose the game. As the government is an integral piece of the puzzle, we have to unsure that bureaucrats understand the rules of innovation

A whole generation of civil servants has to be retrained and equipped with the tools that they will need to take us into the innovation economy. They will have to be exposed to techniques, methods and processes that innovative nations have used to position themselves at the head of the pack. They will need exposure to case studies, on how governments have assisted industry to succeed in the context of innovation. Innovation has a unique value chain and the components of this value chain have to be well understood by the bureaucrats. Managing innovation is yet another area that has to be mastered. Essentially, a brain transplant will have to be done. We can’t just put civil servants through a 2 or 3 day course in creativity and expect them to transform themselves miraculously into innovative and progressive citizens, ready to take the nation forward. This is what concerns me – our obsession with instant results. If this part of the game has not been planned out carefully, then we are certainly planning to fail. The budget spells out what needs to be achieved and the next crucial step is to work out the “how” bit. We must learn from those who have achieved the results we desire. MNCs are always a good place to draw lessons from, as a country heading towards an innovation economy should be run as a large global company. We have enough Malaysians experienced in MNC operations who can help retrain and realign our civil service, injecting best practices that have taken decades to develop.

Innovation is needed in government, in its day to day processes and its dealings with Malaysian citizens and foreign investors. Our FDIs are drying up and innovative measures have to be taken to attract fresh FDI – something that the PM has pointed out in the Budget speech. Innovation has to be brought into the picture to create a business-friendly environment, so that cost and pain of doing business is minimised. Innovative measures have to be taken to attract people with the right skills to our country. None of this is going to happen at the operational level unless we make sure that the officials are equipped with the necessary skills and knowledge on innovation. It is human nature to say that something cannot be done when in reality, the person just doesn’t know how to do it. Let us not put our bureaucrats in a position where they turn down projects, proposals and initiatives because they do not understand the fundamentals of innovation. Let’s get this critical step right before we embark on the Tenth Malaysia Plan. We have about one year to get our act together.

This article first appeared in “The Edge Malaysia” 23 Nov’09

Concealed Talent, Seremban.

You are right about the top-notch universities: they have produced new technologies, entrepreneurs and businesses that are truly mind-boggling. Just look at the track record of Stanford, UCLA, Santa Clara, Carnegie Mellon and Menlo College. They are very focussed in their approach and apply the discipline of commercial logic in their innovation and applied research. Their fundamental research is also built upon the premise of investigating genuinely novel approaches to familiar problems. By doing so, they minimise their chances of failure and by default, increase their rate of success. This is just plain common sense.

The graduate students who enter these universities get absorbed into a vibrant culture where mediocrity is, at best, vaguely tolerated. The students are challenged and provoked not just by their faculty, but by their peers. Unlike the “kiasu” environment that Malaysians and Singaporeans have to endure, the atmosphere in these universities is designed to help individuals discover their natural flair, ability and capacity. When your back is against the wall, you suddenly become naturally creative. This aptitude comes from our “fight or flight” syndrome that we have inherited from our ancestors. These universities have the right blend of people, processes and other factors that exploit this syndrome to nurture talent in individuals.

Graduate students who enter these universities to learn some “secret knowledge” are often disappointed to find that what they are taught in the lecture halls is no different to what they could have studied in a university in their homeland.  You must understand that the magic is not in the subject material of these universities. Look at the syllabus or curriculum of the courses offered by these universities and you are unlikely to spot any major differences between these universities and the second-grade ones. The subject material is not the secret ingredient and in fact, MIT (not in the Silicon Valley) even offers all it’s subject material for 1,900 courses to anyone – for free (http://ocw.mit.edu). You can get lecture notes, slides, assignments and their solutions and even AV material for courses ranging from Astronautics to Brain Science to Philosophy, designed by some of the greatest professors from around the globe – even though you may not be enrolled at MIT. In fact, you do not even to register in order to download the material.

It’s the chemistry, not the subject matter, which is explosive. When you take brainy people from around the world, put them together in an environment that encourages crazy thinking and give them the tools to visualise their concepts, you are on to something big. When you remove mental barriers and expect (not merely encourage) people to experiment, innovation happens. Let’s take a look at the scale of things. In 2008, Stanford worked on 4,500 externally sponsored projects, with a value of over US$1 billion. In the same year, it received over US$62 million in royalty and licensing fees of 344 technologies. Almost 400 new innovations were evaluated in that single year by Stanford’s Office of Technology Licensing. But is not just this kind of technological pace that has given birth to Google, Cisco, eBay, IDEO or NVIDIA – the chemistry includes another important ingredient that is sorely missing in Malaysia. The ability to share, discuss and collaborate is vital to the genesis of something immense.

When I was running the research centre of an MNC in Malaysia, I setup an area in the office for researchers to sit, have coffee and talk. This was meant for people to share ideas, thoughts and the weird inklings that they might have had in the back of their minds. It did not work. The area ended up being used for meetings to discuss projects they were working on. The purchase of an expensive coffee machine was truly a waste, as were the snug couches. The researchers were more comfortable in their cubicles and only ventured outside when they were forced to attend meetings. Sitting down and exploring new opportunities, as a self-initiated exercise, was not part of their mindset. People in the Silicon Valley behave differently. They have an inbuilt need to communicate, to discuss their ideas with anyone who is willing to hear them out. If anything, you suffer the problem of turning down technopreneurs who want to discuss their projects with you in minute detail.

If you do decide to venture out to the Valley, I would advise you to take the focus away from books and connect with the people around you instead. A full set of distinctions in your Masters qualification may raise the eyebrows of a few prospective employers but these are unlikely to further your footprints in the real world. Find and join a Mastermind Group, where people of different skill sets come together to discuss new technologies and ventures. If you are not in the circle, it can be difficult to get into a Mastermind Group. Use your Asian angle and every other possible angle to provide you with the niche you need to get into one of these groups. You will really have to network to find the pulse of the community, otherwise you will return with just another paper qualification.

This article first appeared in “The Edge Malaysia” 09 Nov’09

Bamboozled, Petaling Jaya.

I can understand how you feel. It is easy to suspect your own knowledge when the gurus of the day promote views that are polar opposites of what you have in mind. Time and again, technopreneurs have had to grapple with this difficulty when their reading of the crystal ball does not resonate or synchronise with those who are in the know. You will not want to hear this but my personal experience has shown that the majority of the time, the experts are right and the technopreneur has misread the symptoms manifested by the market. If you interpret the indicators incorrectly, your treatment or therapy is unlikely to bear results. If fact, you may end up killing or seriously injuring the patient, using medicine as an analogy.

Having said that however, we should also look at how grossly wrong experts have been in the past. The most famous example often bandied around is the statement Bill Gates is purported to have made: “Who would want more than 64Kb RAM in their computer?” This may be outdone only by Thomas Watson Senior, the former President of IBM, saying that “I think IBM will be able to sell only 5 computers worldwide.” Some of the techno-geeks I know, in fact, have 5 computers in their home. The founder of Digital Computers, Kenneth Olsen, laughed off the idea of computers for consumers by asking “Why would anyone want a computer at home?”

It is easy to see why “famous last words” of technical experts prove to be so inaccurate – the specialists often cannot see the wood for the trees. When you have a vertical mental picture, you tend to become so laser-focussed that anything outside your field of vision is not visible to you. So, this disease is more susceptible to experts rather than amateurs. It is a case of the “cup being too full” to receive any more elixir being poured into it. Philosophically speaking, Bruce Lee always told his students that they would not be able to learn anything from him until they emptied their mental cups that held their previous knowledge, experience and skills.

This phenomenon is not only prevalent in the ICT industry but across the board. The founder of Warner Brothers Pictures, Harry M. Warner, is reputed to have exclaimed “Who wants to hear actors talk?” when dismissing talking pictures that were poised to kill the silent films. The president of a large American bank was dead set against investing in Ford Motors and said “The horse is here today, but the automobile is only a novelty – a fad. It will not last and the horse will win.”

Still, interesting as these examples are, they don’t help you answer the question you are asking. One guideline is to examine the nature of your intended products and services. If they provide an evolutionary improvement over others that are already in the market, stick with the opinions of the experts. You have to assume that they understand existing products, customers and markets better than you do. Otherwise, they wouldn’t be experts, would they? So if you’re offering faster speed, more features or lower costs, give the experts the benefit of the doubt.

If however, your conceptualised products and services are filling an unmet need of the market, the situation may not be so straightforward. In such circumstances, you tend to find experts who disagree with each other, depending on their personal take of the industry. You are inclined to get as many views as the number of experts you consult. If it is any consolation, this variance serves to show that you have identified a gap that does indeed exist. The only issue, and an important one at that, is how best to fill that gap and profit from it. Like almost every other situation in life, it is usually a matter of taking the “middle path” by mixing and matching the different opinions until you strike a happy medium – in terms of time and costs of development.

If on the other hand, you are proposing products and services that the market itself does not know it wants, you are either on to a blockbuster or on the way to the local asylum – the line between the two is a razor’s edge. The fine line that separates genius from lunacy is what separates a runaway success from one that customers run away from. Think about it – phenomenal breakthroughs that the market did not ask for have included such common products as the radio, TV, the PC and the Internet while disastrous flops that made it to hall of insignificance include the New Coke, Ford Edsel, bottled water for pets and Apple’s Newton. When evaluating products and services that are ahead of the market, ignore the experts and ask children instead. You are likely to get better advice from a child than an expert, or at the very least, suggestions that arise from curiosity and creativity.

This article first appeared in “The Edge Malaysia”  19 Oct’09

Stumped, Shah Alam.

You may be able to develop better sites but the fact remains that you have not. It is always easy to proclaim that you have better skills than others – after the fact. Instead of feeling angry or uncomfortable with the success of others, let’s examine the root causes of their successes.

See if you can identify the technology that I am about to describe. The technology experienced massive growth when it was first introduced, led to a worldwide interconnect, provided near-instantaneous communication, resulted in E-commerce, initiated chat-rooms, pioneered encryption, commenced standards, reshaped businesses and quite frankly, changed the world. Most of the people I have given this scenario to immediately identify it as the internet or the World Wide Web. What I have described however, is the telegraph which was introduced around the year 1840. Notice the similarity between the telegraph and the internet? You could easily be forgiven for mistaking the characteristics and outcomes described above as being those of the internet, as they are in fact identical to those of the telegraph. The point I am trying to make is that the manifestations of a particular technology may differ but the underlying factors seldom do.

The single most important underlying factor which propelled the telegraph in the 1800s and has driven the internet in the 1990s, is the need for humans to communicate with each other. Any application or technology that simplifies or expands the communication process is one to watch out for. We all know today that the email played a major role in the success of the internet. B2B and B2C commerce took off when companies and consumers realised that the internet made it possible for them to communicate easily, irrespective of time zones and geographical distances. VoIP took off expectedly as it demonstrated significant savings in call charges. The need for individuals to communicate is what led to the birth of blogs. Now we have millions of blogs in cyberspace, some of which are never read by others, but the need to communicate and share drives their authors to continue penning their thoughts. On the mobile front, the rather primitive SMS technology has become the de facto communications platform for both teens and adults alike. Isn’t SMS nothing more than a mobile and briefer version of email?

If there is one thing that separates Homo sapiens from other kingdoms, it is the need to connect and feel connected. This is exactly what both Facebook and Twitter offer. Life is what happens between blogs entries and Twitter focuses on this unseen and often, unknown zone. People care and want to know when you have having that cup of coffee at Starbucks or are rushing to the gym or are sitting with a tub of ice cream at home, feeling depressed. Silly as it may sound, people want to know the trivial things that others are doing and they want others to know the mundane things they are doing too. It is such a basic concept, but one that is behind the astounding growth of Twitter as it fills a gap in people’s lives – in 140 words or less.

Communication is also what has pushed the envelope of Facebook. People want to know who you know. In studies done on Facebook usage, it was found that more than 90% of Facebook users check out the people their friends know. Most then go on to make connections with these total strangers, who are friends of their friends. Weird, but the end result proves that the concept works. It is also the same with Linked-in, a site that allows you to communicate with others on a professional basis. In the United States, it has become the preferred site for identifying and locating potential employees. Linked-in shows you how you may be linked to a completely unfamiliar person, through someone you know. The ability to communicate these things is what powers the growth of social and professional networking sites.

So, what you need to do is to rethink how you utilise your clever team of programmers. Having technical skills alone is not even half the story – they will not dream up Facebook or Twitter or Linked-in on their own accord. World changing products come from a deep understanding of the rational needs and emotional wants of the human race. If your product fulfils rational needs, you can be certain that price will play a large part in the decision making process. If you meet emotional wants, price is less of a factor and your ability to deliver a “feel good” experience is more important. Technical teams have to be guided, mentored and coached to deliver real-world solutions – otherwise they tend to stick to the realms of familiarity. The CEO must drive the product design of any company, from a functionality point of view. He or she has to determine what the product should do for the customer, leaving the “how” to the technical wizards. The product must revolve around the customer experience, not the other way around. First movers have a definite advantage, as users will not switch social networks when their connections and links are all set up. So don’t begrudge Facebook or Twitter, as they have got their fundamentals right. Have you?

This article first appeared in “The Edge Malaysia” 28 Sep’09

An enterprising accountant, Shah Alam.

We have often heard the eastern saying, which states that when the student is ready, the master will appear. Various opportunities appear on our horizon, with some registering on our radar and others flying below it. The beauty of enterprise and entrepreneurship is that what one person sees in a given situation may be directly opposite to that which the next person observes. Both may be looking at the same state of affairs, but each sees what his mind has been conditioned to see.

If you ask many business owners, this is one of the worst economic times to enter business. The current industry climate is certainly not the greatest, as companies are playing the wait and see game. While government spending will boost the industry, the bulk of this spending will go towards infrastructure projects. There will clearly be a spill over effect and ICT companies will see some improvement in their business towards the later part of this year, but this will not be in proportion to the boost in other sectors. Coupled with the economic climate is the threat of globalisation that is looming at our front door. Various sub-sectors of the services industry have been liberalised and this trend will continue until our whole economy is laid bare to the world. This is a non-reversible movement and whether we like it or not, is here to stay. Many companies will die. Given this bleak backdrop, the conservatives will advise you against going into business until the situation improves.

Yet ironically, this is the best time to embark on new ventures and opportunities – if the cashflow of the business is positive. Being an accountant, you are likely to scrutinise the Profit and Loss statement of the business and pay close attention to the Balance Sheet. In times like these however, both these statements should take the back seat. Is the cash flow positive and healthy? How long can the company sustain if the revenue drops? What is the threshold before you have to start retrenching staff and go on a cost-cutting exercise? You must know at the outset how much money you stand to lose if things take a turn for the worse. From a numbers point of view, the cash flow account will tell you everything you need to know to make an informed decision.

However, I suspect your question is really not about the numbers but the qualitative factors that need to be considered before making the leap. Not having domain expertise is always a worrying factor, as you may not understand the nuts and bolts that make the business tick. This may have been a big problem in the past but today, it is certainly not one that cannot be solved quickly and easily. Acquiring technical expertise has become convenient and easy, something you can do from your armchair. Just look at the videos that you can find, for free, on YouTube. There are tutorials for beginners and experts, on just about every ICT topic imaginable. Just look at the videos produced by “Commoncraft”, an American company that specialises in making difficult concepts appear easy and straightforward. You will find their videos for novices on YouTube. Another company, “TheNewBoston” produces videos that teach the basics of computer networking. Regardless of the subject your are looking for, YouTube is likely to have content that will be able to help you understand the subject matter. For learning software applications, “Teach-ICT.Com” is a great resource. There are video-based tutorials there that teach you the common ICT software applications in hours. Not having domain expertise is no longer an obstacle, only an excuse. Google is the answer to getting knowledge and expertise that can put you on the right path for more learning.

Once you have done this, the next step is to learn from your customers. The best way to understand what the company’s products really do, disregarding the fluff in the marketing literature, is to study their usage by the customers. There is nothing technical about this. Customers use products as a means to an end – they either solve customers’ problems elegantly or they don’t. Where the products don’t quite hit the nail on the head, customers end up modifying or changing the products to overcome the shortcomings. It is frustrating to see new business owners trying to understand their products by burying their heads in the R&D rooms when the wealth of product knowledge sits out there with the customers.

As a business owner, you need to know what your products do currently for the customers. Using this knowledge and with their feedback, you can redesign the specifications and functionality of the products to meet true customer needs. Again, none of this technical – it is just business sense. It is also something that most technical people are not very good at, so a business-oriented person should step in. The “how” is what the technical team should be sent off to do. How the features, specifications and functionality of the products are achieved should be left to the technical team.

If any of this sounds like common sense, it is. However, just look at the bulk of the businesses and products out there and tell how many use common sense to succeed.

This article first appeared in “The Edge Malaysia” 14 Sep’09

In the backyard of my Penang low cost housing area, it was almost a tradition in most households to dunk “Eu char Koay” in black coffee for breakfast, while watching the women folk prepare lunch. Unbelievable as it may sound to the young of today, race and religion did not matter to us in those days. In fact, some of us were hardly aware that we were ”different”. Indians, Chinese and Malays spoke Hokkien and Malay effortlessly, interspersing the conversations with new English words that we would try to show off. There was no need to ask about food and beverage sensitivities, everyone knew what each other was allowed to consume – or not. In the houses of my Muslim friends, their mothers made sure that the beef was kept in the kitchen and not on the dining table. Most Chinese houses had two tables for food, one that had halal food and another that did not. My Chinese classmate once made the mistake of mixing up the ladles and was given a beating by his father. None of us were surprised when he received a public caning in school for his folly – from our Chinese headmaster. The races looked after each other sensitivities, so there was no question about tolerance – there was genuine acceptance. Life was certainly a lot simpler.

This Merdeka has got me thinking of my “good old days”, although to the young, they probably sound like “miserable long days”. We were a lot poorer monetarily but a lot richer with dreams and aspirations for our country and ourselves. Looking at the skyscrapers from my office window, the progress we have achieved is self-evident. Yet, as one who believes firmly in the concept of opportunity cost, I can’t help feeling that we could have done better as a country – if we had put some common sense in place. Of course, in hindsight our vision is always 20:20. So while this is obvious now, it was probably not so obvious during the journey from independence to the present. Still, to be content and to accept one’s circumstances is the beginning of the comfort zone and this temptation should be resisted at all costs. Strive we must, to heights greater than our hearts are willing to accept. We have to scale peaks that challenge and confound our minds. If our dreams and aspirations do not scare us, frankly, our vision is not big enough. We must have the courage to dream big, for everything that we hold in our hands today is the result of someone’s dream yesterday. The vision that we conceive in our minds will literally create our reality for Malaysia Version 2.0.

If we accept this premise to be even remotely true, what is our vision for Malaysia 2.0? The government has announced that the way forward is to move Malaysia and her people into the Innovation Economy. To say that we are no longer competitive in our traditional areas of strength would be to state the obvious. Innovation is the song that most countries are singing now, so for our government to hum this tune is completely understandable. An Innovation Economy is one where New-Wave revenues are generated, high value employment created, the dimensions of risks and failure understood and celebrated, entrepreneurship nurtured and mentored, human capital transformed – all through a supportive and collaborative framework of government machinery, policies and strategies. Believe you me, this is a very tall order and anyone who can tell me where to start, is a much smarter person than I could even pretend to be. The dream of Malaysia as an Innovation Economy bewilders and baffles me, given the current shortcomings that we are grappling with. Making the leap from here to there, from present to future, has to be nothing short of a leap of faith. This is precisely why I feel we are on to the real thing. If we know how to achieve our dream, it is not a dream but merely a milestone or target that can be attained with our present knowledge and resources. A meaningful and life-transforming dream requires us to stretch beyond our current capabilities and resources, it humbles us and makes us understand our limitations. Out of this realisation is born new knowledge that can set us free. This will be our real Merdeka.

The Innovation Economy for Malaysia 2.0 requires a symphony, not individual musicians who play the tunes that interest them. This symphony, under the watchful direction of the conductor, moves in unison to create harmonious notes that are music to the ears of the audience. Everyone in the symphony knows the importance of his or her part and no single person is more or less important than another. All are cogs in the giant wheel of music.

Can we get the little Napoleons in government (the ministries and their agencies are full of them) to accept this? Will they give up their turf and the USA factor (“Untuk Saya Apa?”) for the betterment of our nation? Can the academics drop their ego trips, come down from their ivory towers, and accommodate the needs of the industry? Can we change the mindset of Malaysians to celebrate failures of entrepreneurs? Can we make the Venture Capitalists agree that venture capital is not the same as banking? It is possible to make the officials who approve grants appreciate that the public is asking for a slice of its own money? Is it possible for transparency and accountability to be embedded into our psyche? Can we bring back the good old days where race and religion did not matter? We will continue to experience these obstacles if we do not include every single Malaysian in our dream. Everyone must share the dream and be on the same page, singing the same song. For the sake of the country, we have to change ourselves and our direction if we want to truly appreciate and benefit from Merdeka. To paraphrase Lao Tze, if we do not change our direction, we may end up where we are heading.

This article first appeared in “The Edge Malaysia” 31 Aug’09