Culture was the central point of my reason to start this blog. I thought that there was so much to explore in Asian culture to try and understand the future.
Initially my interest was focused very much on Japan and Hong Kong. It’s ironic that before the Japanese government’s ‘Cool Japan’ initiative there was much more content out there about what was happening in Japan. Great and really missed publications like the Japan Trends blog and Ping magazine.
Hong Kong’s film industry had past its peak in the mid 1990s, but was still doing interesting stuff and the city was a great place to synthesise both eastern and western ideas to make them its own. Hong Kong because its so densely populated has served as a laboratory of sorts for the mobile industry.
Way before there was Uber Eats or Food Panda, Hong Kongers would send their order over WhatsApp before going over to pay for and pick up their food. Even my local McDonalds used to have a WhatsApp number that they gave out to regular customers. All of this worked because Hong Kong was a higher trust society than the UK or China. In many respects in terms of trust, its more like Japan.
Korea quickly became a country of interest as I caught the ‘Korean wave’ or hallyu on its way up. I also have discussed Chinese culture and how it has synthesised other cultures.
More recently, aspect of Chinese culture that I have covered has taken a darker turn due to a number of factors.
In Deep Geek through his Middle Earth playlist goes in depth into the world that JRR Tolkien built around The Hobbit and The Lord of The Rings. Christopher Tolkien added to the world through his work compiling and editing his father’s manuscripts. Keeping track of it all is a huge undertaking and Tolkien fans often disagree over nuances. Hence, the Middle Earth playlist acts as a sort of audio CliffsNotes analogue to all things Tolkien-related.
Ahascragh races
The Ahascragh of my memories is a one-road town with a petrol station slash local garage and tractor repair workshop, pub and one or two general stores. It was the local market town closest to the farm where my Dad grew up in Galway. By comparison it barely merits the name of town compared to the local urban centre Ballinasloe. This TV news section is from 1977. This seems to be encouraging child jockeys and raising money for the local GAA club.
Big Trouble In Little China
Big Trouble In Little China has a number of problematic aspects to it, but is saved by its efforts to honour the Chinese and Hong Kong cinema that went on before. It’s one of my guilty pleasures as I am a big John Carpenter fan.
Cadbury Lunch bars
Cadbury South Africa promoted their Lunch Bar using a character called Tumi who is the ultimate side hustler.
According to Dan Parmenter who was the creative director on the project
So, we created the story of Tumi, a streetwise hustler who has a couple of different vocations and even owns his own small business. His streetwise nature means that even though he’s managed to snag a part as an extra in a war film, he’s still not shy of a bit of his own shameless self-promotion.
Using StableDiffusion algorithm to create a video that explore our past, present and future. It has a charm to it that reminds me of old stop motion animation.
Alan Dulles
Alan Dulles talks about the role of intelligence and regime change in foreign states in this old film. It is interesting that the film starts off with a modern Soviet tank that the CIA managed to acquire through theft. Dulles was the head of the CIA during the early cold war. He was responsible for coups in Iran and Guatemala. His career finished with the Bay of Pigs.
I worked peripherally on And1 early on in my career, but it didn’t catch fire in Europe than it did in the US. I hadn’t known the full extent of the buzz marketing campaign that backed up the brand in the US. Here’s the early versions of their ‘mix tapes’, which did for street football what skate videos did for skateboarding in the 1980s. They blew up street basketball in the US, in a similar way to the X Games blowing up extreme sports. ESPN got on board with a sports related reality TV show with players competing for an And1 team contract.
But all the buzz marketing didn’t get the cut through that Wieden + Kennedy’s Freestyle TV advert did, effectively depositioning And1 from its street ball territory. Then there was a tie-up show on MTV2 that was similar to the And1 | ESPN show of the previous year. The lesson I took away from And1 was that product and reach both matter. Nike could buy reach and And1 didn’t have any product of note after the Tai Chi.
Opinion: Intel’s ‘smart capital’ is a warning from the past | eeNews Europe – the author considers the rise of private equity to fund new silicon fabs as a warning of peak semiconductors. Similar things happened in the 1980s and 1990s when large businesses like Coca-Cola helped fund manufacturing facilities. The key difference this time is how globalisation has been thrown into reverse by ‘Made in China 2025’ and hostile moves against Taiwan
Loss of Chinese tourists forces Europe’s luxury retailers to rethink | Financial Times – A recent surge in Middle Eastern tourists, as well as US visitors buoyed by the strong dollar, has helped fill stores. Eduardo Santander, CEO of the European Travel Commission, said the lack of Chinese tourists left the many luxury retailers that relied heavily on them with “a huge feeling of loss”, but had spurred “a huge effort to diversify”. Retailers have personalised their services. During Europe’s Covid lockdowns, shop assistants contacted customers via WhatsApp with tailor-made recommendations. Berg sees a “possible return to the old idea of service and store management from the 1990s, the little black book with all the customers’ addresses and preferences in it”. “You have to do much more to attract local customers,” Berg said. “They can come back, they have more time to spend, versus an international customer that was determined and straightforward.” – A few thoughts on this: The article asserts that Chinese tourists are straightforward and not picky. I think Chinese tourists are very picky by comparison, although the diagou’s supplying lower tier cities or buying to order might appear to be ‘luxury hoovers’. Secondly, luxury brands have treated non-Chinese customers abysmally (in particular the watch makers like Rolex and their retail partners like the Watches of Switzerland group) and they deserve all the problems that they get. Only focusing on the Chinese market has allowed the Chinese customers to blow up the secondary market. A straw poll of people that I know who have a Rolex from the past 10 years or so:
All of them had to buy their watch on the secondary market
About 80 percent of them had original warranty cards with Chinese family names, which is far higher than the 30 to 40 percent share that Chinese consumers make of the global luxury market
Finally, I don’t see the market coming back in the same way given Xi Jingping’s focus on common prosperity which will make luxury consumption increasingly problematic.
This New Study Reveals How Brand Loyalty is On the Decline / Digital Information World – I see this as more indicative of economic recession rather than any major change. Gallup showed that traits such as preference for green products decline in a recessionary environment, it would make sense if brand loyalty took a similar battering in favour of private label brands and substitute products
Until watching this video on Heat I didn’t understand its link to Michael Mann’s earlier projects Crime Story and L.A. Takedown; which were basically attempts to make the same story for film. One of the reasons why Heat looks so realistic is that the film used a number of ex-special forces consultants including Steven Mitchel, who you might know better as Andy McNab. Heat is a legendary film for putting Al Pacino and Robert DeNiro in the same scene at the same time.
Heat has fantastic dialogue and is used by the US military for training purposes.
Beauty
Is the BBL bubble about to burst? – The Face – BBL is Brazil Butt Lift – the big butt is going the way of oversized breast enhancement surgery. It will have its place, but it won’t be so extreme
‘Prison Gothic’: Hong Kong road signs reborn as new font – Hong Kong Free Press HKFP – “Responding to the social movements and changes is a big incentive for the fonts’ development,” said Brian Kwok, associate professor at Hong Kong Polytechnic University’s design school. “In the past, symbols of Hong Kong local culture might be egg tarts, milk tea and the Lion Rock,” Kwok told AFP. “Now fonts have become a way for young people to explore their Hong Kong identity.”
PES are a stop motion animation house, whom I was introduced to by Guy, one of the creative directors that I work with. Film food trilogy is one set of films that they did a number of years ago, over a seven year period.
The film food trilogy starts with Western Spaghetti
The second film Fresh Guacamole was short listed for an Oscar nomination.
The final one in the food film trilogy is Submarine Sandwich.
Doraemon and Toyota collaboration for advertisement
The premise in these Toyota films is that it is 30 years later and the human characters have grown up, but have still stayed in the respective relative status to each other. The giant is still a bully for instance and Nobita is still a dweeb.
https://youtu.be/OfnUNmjHzoQ
Big Data China: AI – Surveillance symbiosis
Interesting discussion on the use of big data and machine learning in China. The programmable world with Chinese authoritarian characteristics. Some interesting insights in this stream. The event covers:
how China‘s large-scale investments in surveillance technology is both enhancing the state‘s capacity to repress dissent and providing commercial advantage to Chinese AI companies operating in the facial recognition and surveillance space.
CSIS
It is worthwhile looking at the materials that the CSIS is doing in association with Stanford University on Big Data China.
How LVMH took over Asia
Asianometry looks how Louis Vuitton grew so big in Asia. Japan and Hong Kong took over luxury sales increased in the 1970s due to a massive increase in disposable income. Its interesting that much of it was driven initially by Japanese department stores in the 1960s and Ferragamo was one of the first western luxury brands that they stocked. Louis Vuitton opened their first store in Japan in the Ginza district in the 1970s, they had somehow managed to leap the chasm that stymied other rivals who were traditional medium-sized enterprises like Louis Vuitton at the time. Well worth a look at this video.
Prior to reading The Power Law Mallaby wasn’t a familiar name to me. Looking into his background I could see why, Mallaby is a Washington Post columnist and specialises in international economics for the Council of Foreign Relations. A perfect CV for a policy wonk. His previous works have included a biography of Alan Greenspan, the World Bank and a book on hedge funds.
What the book doesn’t cover
The origins of modern venture capital in the pre-second world war era was through the family offices of people like the Wallenbergs and the Rockefellers. The Power Law only picks up the story post-war and has a distinct US bias in its storytelling.
Synopsis of The Power Law
George Doriot
Mallaby starts the story with Georges Frédéric Doriot and the American Research and Development Corporation (ARDC). What’s interesting Doriot is how he was different from today’s VCs with a focus on patriotism. Doriot is most famous for his funding of Digital Equipment Corporation (DEC), an enterprise computer company whose mini-computers facilitated the early internet and many business computer systems. At the time of DEC, the Boston area seriously rivalled the Bay Area as the technology centre.
Treacherous eight
As the book goes into the story of Arthur Rock and his relationship with the treacherous eight who left Bill Shockley’s lab, this is where many Silicon Valley histories start to coalesce with The Power Law. Mallaby adds a little more, such as the 600x return that both the eight and Rock enjoyed from their investment. At 96, Rock is still alive at the time of writing. He is more recently remembered for his involvement of firing of Steve Jobs from Apple in 1985, a good deal of this came down to his distaste for Jobs informal appearance.
Sandhill Road
Arthur Rock and former Doriot student Bill Draper benefited from being in the right place and at the right time. The US government looked to spur innovation as part of the cold war and the Bay Area was were much of this innovation would happen. Sequoia and Kleiner Perkins followed soon after, these names are now central to the Sandhill Road venture capital ecosystem, but in 1972 they were just starting off with businesses like Atari. Atari wasn’t started by experienced business professionals, but by a twenty something who thought meetings in the hot tub were a good idea. Atari marked a point in time when VCs had to become the adults in room, or as Mallaby put it ‘active investors’.
What I didn’t realise at the time was how early in Kleiner Perkin’s history was their engagement with biotech pioneer Genentech. I didn’t realise that Genentech was funded before Apple and was more a peer of Tandem Computers. Much of the early networking was based on a two-way door between established venture funded firms that were descendants of the treacherous eight and early venture capital firms that employed experienced executives as partners.
Apple was notable for two reasons. Firstly, venture capital firms operated for the first time rather like an insurance syndicate with several funding the business rather than one large investor. Secondly, the returns on Apple seems to have solidified the model and bought niche financing to a wider awareness beyond the geographic pockets of the technology industry. Where many books like Accidental Empires would use this as a jumping off point to tell the story of the PC industry. The Power Law instead talks about computer networking, this makes sense if one thinks of Metcalfe’s Law as the power law that matters the most in the internet age. The early east coast venture capital community were more cautious than their west coast counterparts, partly because the east coast technology corridor had less of a loose network of connections compared to the west coast. I think that the different business culture of the east coast also had an effect.
Connectors
Doerr connected Cypress Semiconductor and Sun Microsystems, two companies that Kleiner Perkins funded so that they would make the SPARC RISC microprocessor. You could put this as the starting point for the golden age of UNIX servers and workstations – which we can trace forward to today’s Mac range and modern Google servers.
Doerr had attempted other alliances before and in this way we see a different way how Metcalfe’s Law was the power law of the title. VCs has access to several nodes that they could connect together to try and build a technical vision. This is different to the idea we’re usually sold of the tech visionary / company founder a la the Google founders, Mark Zuckerberg or Steve Jobs.
Meanwhile Don Valentine of Sequoia Capital usurped the founders of Cisco Systems and brought in a new team to run the business bilking the founders out of much of their money. Part of this was down to one of the original Cisco founders being a woman.
Government money
The VC industry of the early 1990s capitalised on government money. Netscape was a remake of Mosiac which was the first graphic internet browser software developed in the NCSA software design group. This was part of the government-funded National Center for Supercomputing Applications (NCSA) at the University of Illinois. UUNET was a commercial ISP based on the back of the ARPANET email delivery system. As the dotcom boom took off it was the largest ISP and the fastest growing. UUNET eventually became part of MCI WorldCom and then Verizon, where UUNET remains a key part of the Verizon business offering. Both Netscape and UUNET were viewed at VC successes but as The Power Law shows, the reality was more complicated.
Irrational behaviour
I thought that the original dot.com boom was irrational behaviour, but I learned from the account of GO Computers a decade or so earlier that irrational behaviour is very much in the blood of venture capital, which explains how we had WeWork and Uber in the 2010s which is where The Power Law finishes its tale. The funny thing about the irrational behaviour is that both the dot com era and the 2010s Softbank appear to have been an accelerant with their late stage momentum approach to venture capital deals which blew valuations on businesses up far beyond what would be reasonably expected otherwise. Softbank gave birth to ‘growth equity’ as a business model that took in many existing and new VC businesses including Russian Israeli Yuri Milner and his DST Ventures business which invested in Facebook, Stripe and GroupOn.
Paul Graham and Peter Thiel
Paul Graham was a founder of an ad tech business who then moved over to investing and had a reputation for warning startup founders about the nature of VC funding. It fitted neatly into the ‘John Gaunt’ type narrative that played well with some of his peers like Peter Thiel. The impact of these people setting an ideological agenda of sorts for Silicon Valley founders, together with a plethora of other founders providing seed capital to businesses from Google onwards greatly impacted the freedom of VCs to operate using their previous models and left the industry open for the Softbanks of the world to inflate everything.
China off-note
The Power Law offers a largely truimphantist view of the role of VCs such as Sequoia Capital in China. However, this seems to ignore the impact of Chinese VC and angel investors. It also chooses to ignore the negative impact of Xi Jingping.
Conclusion
Mallaby illuminates part of Silicon Valley history that I wasn’t familiar with, in particular VCs strategic role in steering technological change during the 1990s. Time has somewhat outpaced the book. The rise of Xi Jingping and the change in attitude towards safety and innovation amongst young Chinese is likely to make the China section look overly optimistic. The end of easy money, at least for the time being will impact the VC industry globally and growth equity looks like a folly during the present time. But if you want to understand how things were The Power Law is the ideal book for you.
