The state of the P2P marketplace lending industry

New York, view from hotel

I just got back from a week in New York City for meetings with the Uvamo team and for the Lendit 2015 conference. Lendit is a conference focused on the P2P lending industry (nowadays called marketplace lending), and this was the third year the conference was organized.

I had been to the inaugural conference in NYC 2 years ago, at a time when marketplace lending was still something that was relatively small and unknown. I had been investing in LendingClub loans for quite some time already by then, but most traditional bankers I met during that time told me that it was impossible to make consist good returns on a loan portfolio (I was, and am, making a net return of about 8.5% per year). It’s always when things are new that people don’t understand it or don’t want to understand it, so I didn’t argue too much – but I did blog about it a couple of times.

During the first conference the organizers had expected about 200 participants, but the final tally was 375 people. I thought that was quite a lot, but the year after the Lendit Conference in San Francisco had almost 1000 particpants. Suddenly it had become a big event, although marketplace lending was still not mainstream.

But the successful LendingClub IPO in December last year changed things significantly. Suddenly the skeptics realized that marketplace lending is here to stay and that it’s a real alternative to borrowing from banks. I had expected about 1500 people at this conference, but when we had dinner with the organizer the night before the conference he told us almost 2400 people signed up and they had to close the registration.

The conference itself was great. Because I am on the board of Chinese marketplace lender Dianrong.com I follow the space closely and I got to know quite a few people in the industry over the past 2 years. The industry has matured a lot obviously and the start-ups from 2 years ago are now big companies. LendingClub is a $8 billion dollar company and competitor Prosper just closed a private round at a $1.9 billion valuation. They are not banks yet, but they may one day become something like a bank is now.

Lendit 2015 New York City

Banks now even want to partner with marketplace lenders. LendingClub CEO Renaud Laplanche for example announced on stage that they started a $150 million cooperation with Citi. Two years ago this would have been unimaginable. And Larry Summers (who is even on the board of LendingClub!) explained in his keynote that the future of finance consists of online marketplaces. He believes that 10 years from now 40-50% of all current bank lending will go through online marketplaces. That means that there is still a huge upside.

Larry Summer's speech

As part of the Lendit conference there was a special China track and there were a lot of Chinese participants. It was probably a good wake up call for many people in North-America to see that US market leader LendingClub is much smaller than some of the top Chinese players. In China the market is booming, it’s incredible. I mentioned this already in another blog post last week where I talked about Dianrong, but growth rates that people in the US can only dream of are normal in China.

Lendit 2015 New York City

China’s P2P market is many times bigger than the US market, it’s even bigger than all other P2P markets outside China combined. Hard to believe? When I see the monthly Dianrong figures I believe it, I have seen the company grow from its first loan 2 years ago until where it is now, that is simply not possible outside China.

Soul Htite at Lendit USA 2015

One big difference with the US is that Chinese P2P lending companies not just do loans, but they build whole new product categories around it. For example Dianrong, also has a fast growing banking solutions division, that works with some large banks to help them with their technology. Many Chinese lending companies also have a wealth management division, something you don’t see in the US. As Dianrong CEO Soul Htite explained on the main stage at the conference, this is a normal thing for Chinese companies, not just in the P2P lending space. One reason is that you start from scratch in China, there are not many existing tools that you can integrate. E.g. when Alibaba started they had to figure out logistics and payments themselves, Amazon could use existing services for that.

Soul Htite in the China panel at Lendit USA 2015

The extreme competition is another reason that Chinese companies have to innovate faster than their US counterparts. Competition in the US certainly has increased, and CEOs of the leading companies don’t freely exchange information anymore (during a CEO dinner on Monday night the CEOs of Prosper and On Deck did not even mention their partnership to the other participants, even though it was announced pre-market the next morning!). This reminds me of my time in China when I learned the hard way that Chinese companies would not even consider sharing any information with the competition.

I sometimes wonder what would happen if Chinese marketplace lending companies would become active in the US. It’s not happening yet, but I think they could make life very difficult for the leading players. For now they have no real reason yet to move overseas, the opportunity in China is still huge. In China loans are not a replacement for bank loans, but many people or SMEs have no other source to get credit capital. There is still a huge untapped market there, especially now that a large portion of lending and investing in China is now happening on mobile devices.

What’s next? There is a lot of innovation in the financial marketplaces and many niches have been covered over the past 2 years (e.g. student loans, real estate, car loans). But many are relatively small opportunities because they are niche. I think some of the leading players will start acquiring niche players and I think a lot more will go public soon. I think they may turn out to be good long term investments, although they have to show consistent high growth for years to come in order to live up to their multiples. I see more internationalization, meaning US companies moving overseas, or non-US companies expanding to the US. This is already happening, but at a small scale. As for Chinese companies, I don’t see them expanding to the US soon, but don’t be surprised if they suddenly turn up in other Asian countries that are closer to their home base. Exciting times!

Job opening: 2 analyst positions at CrossPacific Capital in Vancouver

View from the CrossPacific Capital office in VancouverView from the CrossPacific Capital office

Our fund CrossPacific Capital (www.xpcp.ca) in Vancouver is expanding rapidly and we are now looking to hire 2 analysts for our Vancouver office. You will work directly with the managing partners, Frank Christiaens and myself.

We are different from other venture capital funds in that we work closely with Chinese strategic investors, limited partners and VC funds, and that we are mainly looking for exits for our portfolio companies in Asia (especially in China). Therefore it’s a prerequisite for candidates to have lived and worked in Asia for at least 3 years. Because there is a lot of communication with China, our analysts have to be fluent in Mandarin Chinese (spoken and written).

You will need to be able to work independently and be able to determine your own work priorities. If you can handle it you’ll get a lot of responsibility (we’ll coach you of course), more than at this level in most other VC firms.

CrossPacific Capital (XPCP.ca) Christmas party 2014CrossPacific Capital office in Vancouver

If you plan to make the switch to venture capital this may be the right job to get into the industry. You will join pitches by companies, do due diligence on them and help us in the valuation and decision making process. We are a small organization, so there are no layers between you and the managing partners, meaning that you have a lot of direct exposure to what happens in and around the firm.  Frank and I tend to be quite direct (we’re both originally Dutch…), but you’ll probably get used to that quickly. Occasional travel may be required, depending on projects and clients that you work with.

Our office is in the the middle of Gastown in Vancouver, surrounded by bars and restaurants, on the top floor of a heritage building with great views over Vancouver harbour and the North shore mountains. Several of our portfolio companies are in our office, and because of our open office environment you’ll have a lot of contact with them.

Our analyst Ms. Bing Dai, who plans to do a start-up as the next step in her career, said on her Facebook about her current job: “I learned more about entrepreneurship, technology and human interactions during the past two years at CrossPacific than any period before. A great environment to hang out with amazing people around the world and experience what starting/investing in tech companies is actually like.” Hope you don’t mind me copy/pasting your text Bing :)

The official job ad as posted on our website:

Company

  • CrossPacific is an asset management and advisory firm, strategically headquartered in Vancouver, BC Canada, North America’s Gateway to Asia.
  • CrossPacific invests in Canadian and select US technology companies and creates value through cross-border business expansion into China. CrossPacific also invests in companies that would be investment targets for Chinese companies looking to expand their presence in North America.
  • CrossPacific is managed by 2 Managing Partners and 1 CFO. The team is strenghtened by 2 Venture Partners, Enterepreneurs-in-Residence, and Advisors.

 

Responsibilities

  • Market Research
  • Financial Analysis
  • Due Diligence Support
  • Business Developmemt Support

 

Required Expertise

  • Having worked in Asia for a minimum of 3 years
  • Strong analytical and quantitative skills
  • Excellent Excel skills
  • Eager interest in technology
  • Deep knowledge of certain technologies
  • Prior start-up experience a plus – not a requirement

 

Education Level

  • University level Master degree from recognized university, preferably with an undergraduate degree in engineering or science
  • Native Mandarin
  • Fluent English
  • Other languages a plus

 

Compensation & Perks

  • Base salary negotiable
  • Bonus as a function of value created for the Fund
  • MSP
  • Medical and dental insurance
  • Awesome Gastown office with waterfront views, accessible by Canada Line, Expo Line, Millenium Line, and many downtown buses

 

CONTACT: Ms Rui Habib, rui@xpcp.ca

A Few Days In China: Some Thoughts And Observations (Part 2)

XintiandiShanghai, view over Xintiandi

After some impressions about life in general in my post yesterday, today some more business related topics that I noticed during my trip to China last week.

Valuations
Company valuations are going through the roof, especially private company valuations. When Tudou raised its first round in late 2005 valuations were probably 10% of what they are now. At one time Tudou raised the largest round ever for a Chinese company, which was $57 million at that time. Now that number is just peanuts and many companies have raised hundreds of millions in later stage rounds.

Although in Silicon Valley valuations are also extremely high (e.g. Uber @ $40 billion and Snapchat @ $19 billion), I have the feeling that Chinese tech companies tend to get ever higher valuations based on the same numbers. I have no data on this, but that’s just what I hear when talking to local VCs. One reason may be that the Chinese market is potentially much bigger than the US market, although most Chinese have a lot less earning power. And for Chinese companies it may be easier to go abroad (with the right management teams) than it is for US companies to enter China.

Buying R&D
A relatively new trend is that Chinese companies are now actively buying R&D from outside China. With growth rates going down to about 7% this year they need to find other ways to grow faster, and foreign intellectual property is a good investment for that. We see it a lot at CrossPacific Capital and several of our portfolio companies are in discussions with Chinese buyers. Chinese companies are especially looking for companies that can deliver revenue right away, so products that can immediately be integrated or sold in China.

The valuation of these companies mainly depends on the current product portfolio and less on the value of the IP for future products. Chinese business men want to see results now, nobody knows what will happen in 4-5 years so that’s less important. Generally valuations for these companies are a lot higher in China than in North America, meaning that if you can identify the right products or technology you can make a good return on your investment. However, valuations are not as high as Chinese Internet and tech companies.

Marc, Soul & Scott at the Dianrong officeMarc, Soul and Scott at Dianrong’s Shanghai HQ

Dianrong
One important reason why I was in China was for a Dianrong board of directors meeting. Dianrong is a Shanghai-based P2P lending company, comparable to LendingClub or Prosper, but only focused on China (for now) and therefore with Chinese characteristics (shorter loan duration, higher interest rate etc.). The company is also active in banking solutions for traditional banks.

When I first met Soul Htite, the founder and CEO of Dianrong, a few months before I left China in 2013 he was so convincing about his plans that I fairly quickly decided to invest. That was a good decision because Dianrong turned out to be one of the fastest growing companies I have ever been involved in. It’s unbelievable how innovative the company is and how it manages to handle its growth. The company is obviously still privately held, so I am not able to share any data here, but trust me that the figures are extremely impressive.

In my opinion, one major strength Dianrong has is the management team that Soul put together. Many of the executives are graduates of top US schools like Harvard, MIT, Stanford or Wharton, or from Chinese top universities (or both). The team understands both the Western and the Chinese financial and Internet world and that makes them stand out from many of the other Chinese P2P lending companies.

Dianrong is the type of company that could conquer the world from China. Not just South-east Asia like some ‘traditional’ Chinese Internet companies are doing already, but possibly also the Western world. Yes, I am biased of course, but keep an eye out for them!

WeChat
While many people in North-America have never heard of it, WeChat (微信) is now the only app you need to do business in China. Originally a messenger app comparable to WhatsApp, it has grown into a mobile-first combination of the Facebook timeline (with built-in privacy!), Messenger, Skype, a business sales & marketing platform, and a group communication tool like Slack. Companies like Dianrong rely on WeChat for communication, and in many instances it has replaced email. You can run a company on WeChat these days.

I use WeChat a lot in Canada as well, but it’s not really taking off yet among people that don’t have a lot of connections with China. I hope that will happen though, because it’s extremely useful and a great way to stay connected to people that you meet. Next to exchanging business cards you now just scan each others QR codes to get connected. If you want to do business in China make sure you have WeChat installed on your phone.

The future of retail
If you want to understand how retail in the West will change, come to China first. Already a couple of years ago people were ordering everything online and that has only increased. Real time delivery for (almost) free is the norm and I believe that China might be the first country where large supermarkets and other stores may disappear. There are still a lot of shopping malls, but if this trend continuous they will be mainly for high-end brands (where the retail experience is important) or just for window shopping.

It’s hard to imagine how fast online retail has grown. In March 2013 when I left China McKinsey estimated that by 2020 Chinese online retail would be between $420-$650 billion. Guess what, in 2014, so just one year later, online retail was already at $450 billion in China. I don’t want to criticize McKinsey too much, but they clearly should do their homework a bit better and learn about exponential instead of linear growth (their models worked with 15-20% growth per year and were likely based on 2011-2012 data, but real growth in 2013-2014 was over 50% per year).

The fast growth is partly because of convenience, because urban Chinese work longer hours than people in Europe or the US and therefore have less free time for shopping, but also because of traffic jams, lower car ownership and pollution. If you know it will take you a long time get to a large supermarket, you don’t have a car or if it’s very smoggy outside you might as well order everything online. And don’t forget the secondary and tertiary cities where people also have a lot more disposable income nowadays, but where lots of products are not for sale in offline stores.

The next big business opportunity: Senior care
If you want to catch the next big wave in China (outside of tech), look at opportunities in senior care. There are many reasons why this is such a huge growth market and I could probably write a complete blog post about it, but I’ll just list the main ones here:
– Most Chinese below 40 don’t have brothers or sister because of the one child policy. Traditionally Chinese take care of their parents, but if 2 people have to take care of their aging parents next to their jobs and kid(s) that can be a major burden.
– Urban Chinese don’t have large apartments, so taking care of their parents is not always possible
– Younger Chinese are more affluent and can (and are willing to) pay for senior care
– Sending your parents to a senior home is not a taboo anymore
– It’s difficult to find good senior homes, at some of them wait lists can be decades

My friend Ninie Wang saw this opportunity already back in 2003, right after graduating from INSEAD. She was one of the very first but the sector is now growing fast, but there are still a huge opportunities for anything related to Chinese senior care.

A few days in China: some thoughts and observations (part 1)

Shanghai by night

Shanghai by night

Last week I spent a couple of days in Shanghai and Beijing for among others a Dianrong board meeting, for meetings with other VCs and investors, and of course to catch up with friends. It was a busy week where I did not sleep a lot, but a trip that was totally worth my time.

I am now back in Vancouver and my mind is so full of thoughts and observations about the trip that I decided to put some of them on virtual paper and post them on my blog. We have now been away from China for over 2 years and that gives me some much needed distance to see the country in a more objective way than when we were living here or when we had just left. I will put my thoughts online in 2 separate blog posts, because there is way too much information for just one article. The first one is more about life in general, the second one will be more about business and investment related topics.

Pollution
The bad air was probably the main reason why we left China. I got sick (literally!) of not being able to run outside and I felt really bad for the kids when they could not play outside most of the time. Waking up to a grey world in the morning while the sun was supposed to shine made me feel angry while living in Shanghai. But interestingly, during this trip it did not bother me as much. Why? I guess because it’s just for 5-6 days and after that I would be back in the clean Vancouver air. Although I started to cough again and felt my throat while running, I just shrugged it off.

Smog at the approach to Pudong airport

 

Smog during approach to Shanghai Pudong airport

The smog was not too bad as well, most of the time between 150-200 PM2.5 (which is merely unhealthy, although in Vancouver probably nobody would be allowed to go outside anymore at these levels), which means that it was normallyhazy but that you could easily see a few hundred meters. I couldn’t run outside though, which was a bit of a nuisance, especially during my early morning 25 km run on Sunday. Generally I did not feel that the pollution was much worse than 2 years ago, but this was just a 6 day sample – and the day before I arrived Beijing had a hazardous 800+ pollution reading – so this is in no way a scientific observation.

Taxis
While living in China I had a car and a driver, so I did not use taxis much. However, when I needed them I could normally easily hail one on the street. That has changed quite a bit in 2 years because of taxi apps. If you don’t have these installed it’s very hard to find a taxi, even outside of rush hour. The reason is that the taxi apps subsidize their drivers, they get a few extra RMB on top of the taxi fare to lure them to work with the taxi app company. The downside is that they are not very interested in picking up passengers on the street or at hotels anymore.

The problem for most non-Chinese is that the taxi apps are in Chinese, so they are difficult to navigate. Uber works in China as well (it’s called People’s Uber here), but it’s not as good as in the US. The drivers seems to be new and often have no clue about directions, but at least many of them speak some English (that hardly ever happens with normal cab drivers). I tried to add my Chinese phone number to the regular Uber app but could not input the verification code, so the app was suddenly useless.

The few normal cabs that I used suddenly relied on their taxi app GPS system to get to the destination, instead of just thinking themselves about how to drive there. In the past drivers often had no clue about where to go and I had to guide them, but now they first take minutes to input the address, then they follow the directions exactly (instead of thinking about taking a faster side street like in the past) and one still drove past my destination (I had to point it out to him). One small difference is that many now seem to accept tips, so I could round up to the next 10 RMB and didn’t get tons of coins or bills back.

Internet
My biggest headache in China was the slow and censored Internet, it drove me totally nuts at times. In Canada I am so used to using my smartphone for everything, it’s like my second memory. But in China that second memory was suddenly extremely slow or did not work at all. I did have a VPN but it did not always work or it got blocked for a while after visiting ‘harmful’ sites like Google.com. Even with VPN I could not load Facebook on my laptop, although I managed to get an occasional connection on my mobile phone. Most of my business is done through a Gmail account, but half of the time I could not access it, not even with my VPN running.

The non-Chinese Internet seems to be much slower and stricter than 2 years ago. This was my biggest frustration during the trip, much bigger than the traffic or the pollution. If I should ever try to live in China again this should be solved first, I guess I am too spoiled after using normal Internet in Vancouver. Maybe a better VPN and a faster mobile Internet connection may help, not sure.

Cultural changes
I feel China, especially Shanghai, has become a lot more Western over the past 2 years. Shanghai was already the most Westernized city, but the way people dress and behave in places like Xintiandi is virtually the same as in higher end places in North-America. While having breakfast in Xintiandi on the weekend I noted several fathers with their young sons having (Western) breakfasts as well, just like I would with my son Scott. There are a lot more outside terraces (esp. on the street outside Xintiandi Style) where people are having coffees while chatting with friends, much more than before I left.

The number of high-end shopping malls seems to continue to go up, despite the fact that many are quite empty. I suppose brands need to be visible, so people know what to buy during their trips outside China. The shopping malls are world class, better than anything you find in North America, and comparable to Tokyo, Hong Kong and Singapore. I don’t like shopping at all, but I did not mind strolling around some of the malls looking at the high-end products for sale.

People keep on dressing better as well. Especially in the business districts of cities like Shanghai or Beijing people seem to dress better than in the US or Europe. Less casual and with higher quality clothes than just a few years ago. I dress quite casual myself (high end jeans, dress shirt & jacket) and found myself underdressed on at least 2 occasions…

View from the Park Hyatt on a clear spring day

 

Traffic at the Guomao intersection of the 3rd ring road, there are traffic jams all day.

Traffic
Not much change, although it seems to be even more busy now than it was when I left. It’s virtually impossible to do more than 2-3 meetings a day in Beijing, unless they are in the same area or unless you are willing to take the metro. People still drive like they did before, not caring for others and using the horn constantly. On the first day I almost got hit by a car while on a zebra crossing with a green pedestian light. I guess I have become too North-American and forgot that that does not give you any additional rights as a pedestrian.

What I noticed that cars seem to be much nicer than before. There are not many old cars on the streets of Beijing and Shanghai anymore, likely because of the license plate taxes and because of environmental requirements. The number of super high-end cars is not as high as in Vancouver yet, but seeing a Lamborghini, a Ferrari or a Bentley is quite common.

Hotels
The top hotels in Shanghai and Beijing are so much better than in North-America, it’s almost incomparable. In Shanghai I stayed at the Langham in Xintiandi and in Beijing at the Park Hyatt close to Guomao, and both hotels were amazing. The service is impeccable and very fast, and staff has been trained well (often a problem in Chinese hotels and restaurants). The rooms are very well designed and much nicer than for example those of Langham hotels where I recently stayed in North America (in Pasadena and in Manhattan). Especially the Park Hyatt room was beautiful and very modern, with a huge bath tub (that I didn’t use) and sliding doors to divide the room into a bedroom and a bathroom. Small things like a power plug in the safe to recharge your gadgets, or boutique toiletries and high-end linen on the beds make the difference between a good hotel and a great hotel. The only bad thing was the slow Internet in both hotels, but I guess that’s not something you can blame the hotel for.

My second blog post with some observations about business in China is here.

Coyote in Stanley Park

Yesterday I wanted to do run in the evening, but because I had a board call with China at 6:30 PM I decided to do a 12 km run to and around Stanley Park during lunch.

While running on the path around Lost Lagoon I saw a greyish unleashed dog in the distance. I did not see the owner, which was a bit strange. I slowed down a bit and when I got closer I noticed that the dog didn’t wear a collar and looked scruffy. The closer I got the more I realized it actually didn’t look like a real dog and that it might be a coyote…

It seemed to look at me for a short time but then just ignored me. I walked as close to the lagoon as possible, trying not to startle or provoke the animal, and was happy when I passed it (the coyote was probably just 10 meters away from me at one point).

Unfortunately I did not bring my iPhone while running, so I could not take a picture – I probably would not have dared to take a photo anyway. But a quick search online turned up several other sightings of coyotes in Stanley Park over the past weeks, so I am now pretty sure it really was a coyote.

Coyote sightings in Stanley Park (March 2015)

Coyote sightings in and around Stanley Park over the past 2 weeks

When I got back to the office after my 55 minute run – normally I run the 12 km a few minutes slower, I guess the adrenaline rush because of the coyote helped – I went to Google and found out I made some serious mistakes.

First of all you should never approach a coyote if you see one, but slowly back off. In my own defense, I didn’t realize it was a coyote until I was quite close already.

But worse, I then passed the coyote walking as close to the water as possible. My thinking was that in case it would attack I would just jump in the cold water. Well, online I found that coyotes are excellent swimmers and actually follow their prey into the water!

Of course nothing happened because coyotes don’t generally attack humans, especially not when they are on their own (if you see a pack of coyotes it may be more dangerous). It was an interesting experience though and a reminder of how close we are to real nature in downtown Vancouver.

Update (March 19, 2015): I just received an email from the Stanley Park Ecology Society with some interesting information that I partially copy/paste her.

We’ve been keeping a close eye on two coyotes in the West End area as we know that for a time last summer a nearby resident was leaving food out for it at the foot of Nelson Street where it enters Stanley Park. It’s habituated behaviour subsided after the feeding situation was resolved, but the past couple of months the behaviour has been returning likely due to food scarcity and some success in getting food from people. This is most often the explanation for a change in behaviour like this.

 The mangy coyote had been traveling to meet a mate in Olympic village but they appear to have returned together to den down near Burnaby and Bute Street. Based on reports I have received, they have yet to show any aggression towards people or pets, but they are also very comfortable so we do not want their behavior escalating to the point where it approaches people. We are encouraging people to scare the coyotes if they linger in public spaces (mainly for the coyote’s safety) – we are also asking residents to keep an eye out and report any instances of people feeding it or if it shows any aggression. Feeding coyotes is illegal under the provincial wildlife act, and is a ticketable offense, so if we are able to gather enough details on anyone feeding we may be able to act on it.

 

The sudden rise of Meerkat

Meerkat - the future of live video streaming?

Two weeks ago nobody had heard of Meerkat and now suddenly everyone is talking about it (well, at least all the super-early adopters that I surround myself with). It’s quite amazing how quickly this video streaming app has gained traction, despite the fact that it’s actually nothing new. It reminds me of how Twitter’s exponential growth started at SXSW in 2007, and Foursquare at the same show in 2009 (coincidentally this week SXSW takes place again!). Why is Meerkat growing so fast?

For those of you who have not used Meerkat yet, it’s basicaly just a live video streaming app. There are many of these apps but none have really taken off like Meerkat has. Already back in 2008 I was using live streaming app Qik at the Opening Ceremony of the Beijing Olympics. I still remember that because it only worked on Nokia phones and I just had my first iPhone, so the team came to my hotel a few hours before the Olympics started to give me a Nokia phone! Qik was too early, the mobile Internet speeds were too slow and the data still too expensive (or you could not connect to the Internet at all, like happened to me at the Olympics), so they did not take off. Eventually Skype bought them and that’s the last I heard of them.

There were many other live streaming apps, but I didn’t really use any of them until I found Meerkat a few days ago. Suddenly I saw the light, Meerkat did 3 things better than other players. The most important one is that it was built on top of Twitter. When you go to Meerkat and you start streaming, automatically all your Twitter followers will get a message that they can click on to immediately see what you are viewing. This leads to a viral effect, because people retweet the tweet.

The second is the user interface, it is so simple to use it. You can give your stream a title or you just click start, that’s all you need to do. Nothing to set up, nothing to link, it just works. And you can see who is watching your stream and these people can interact with you. Excellent!

The third one is the fact that the stream can only be viewed live, it is not recorded so you can’t watch it again. You can record your own streams and publish them if you want, but that’s not the aim of the app. This may actually lead to a lot more video being streamed, because if something awkward happens only the people who watch it live have seen it. Theoretically they could record their screens, but that’s unlikely, and Meerkat obviously does not allow them to record the stream. This is one reason why Snapchat took off, people seem to want this.

My first Meerkat stream had 10 users!

This morning I decided to try out Meerkat while driving from a meeting to the office. It was a super boring stream, just showing me driving while listening to some Latin music on Sirius XM. I did not say anything and I did not show much of the surroundings. The stream was only about 10 minutes, but during those 10 minutes I had 10 people live watching me drive! If I can generate 10 viewers during such a short time for such a boring video, while most people did not even hear of Meerkat yet, it means this thing has legs.

Suddenly I realized that this could be huge. At any time I can now stream live what I do and the whole world could theoretically watch me. And I have control of the stream, nobody else can post it somewhere for others to watch. I never thought that was important, but I probably would not have recorded myself driving if I knew the stream could easily end up on YouTube.

Is this sustainable? Nobody knows, sometimes apps have huge growth and then they suddenly fade away, see for example Chatroulette in early 2010. But to me Meerkat is more than just a fun app like Chatroulette. It may have found a video solution for the basic Internet need of sharing and showing off. It’s easy to copy and because it’s built on top of another service they depend on them, but if they manage to keep the current traction they have a good chance to become huge. Because of Twitter the service can grow virally, which is a very smart. For sure the timing seems right, mobile Internet is much faster and cheaper than a few years ago and Twitter has almost 300 million active users that can view and share Meerkat’s streams. In my opinion Meerkat may have nailed it.

Twitter just bought Periscope that seems to do something very similar to Meerkat, but if I were Twitter I would offer Meerkat $100-150 million and integrate it into Twitter. Meerkat needs Twitter to grow, so I think they might take the offer. Or they may want a multiple of that, live video is at a tipping point and there are clear business models for this, meaning that this could be worth a lot more than “just” $150 million. An acquisition might lead to huge new growth for Twitter itself, because so far you can only use Meerkat with Twitter. Interesting times ahead, looking forward to following (and using) this app!

Getting rich can be easy

Jet.com

If you want to become a multi-millionaire there is normally no real short cut. As an entrepreneur you have to be smart and willing to take big risks. You’ll have to work extremely hard for many years, with tons of stress, failing relationships, and sometimes even health problems as a result. For entrepreneurs the result is never guaranteed, so you could still end up with nothing. Is it worth it? Of course, because most people don’t do it for the money, but because they like the thrill and the feeling of winning. But if there would be an easier way to earn your first millions that would certainly be nice.

It turns out that a few weeks ago there was a huge opportunity to become a multi-millionaire in a short time without too much hard work. Business Insider, a site I actually used to write for a couple of years ago, posted an article about a stealth start-up that offered non-employees up to 100,000 shares in the company. Like most people I dismissed the article as a scam, but I probably should have read it a bit better.

The stealth start-up turned out to be Jet, a company that has not launched yet but already closed a second round of funding at a rumored $600 million valuation. The 100,000 shares are the same amount given to very early top management employees, meaning probably somewhere in the 2-5% range. That would put the value of the 100,000 shares at a staggering $12-30 million right now! To be fair, these are stock options and I don’t know the strike price, but assuming that they are based on the first round which was probably done at about $200 million post-money they would still be worth $8-20 million right now. And the company has not even started operations yet!

What did you have to do to get these shares? Very simple, you just had to get other people to sign up for the site. In January an IT guy at a funeral insurance company in a small town in Pennsylvania, Eric Martin, read about the contest and decided to check it out. He went online and saw that 10 contestants who would manage to sign up the most people would get 10,000 shares and that the number 1 would get 100,000 shares. The funeral insurance guy asked 3 of his family members to sign up and was suprised to see that while he had rank 232,582 when he signed up, he went to 13,767 with one sign up and to 5232 with just 3 sign-ups. So what do you do in such a situation?

Eric was smart and realized that if your rank goes up so quickly most people were not really competing for the big prize. He downloaded a statistics app, plugged in the numbers, and was surprised to find out that he should be in the top 10 with just 2000 sign-ups. If you know a bit about the Internet you probably realize that that’s actually not so hard to do if you have enough time or if you are willing to spend a few thousand dollars. Time was not on Eric’s side, however, because he only joined the contest a few weeks before the end and most people had been competing for over 6 weeks already, but he was willing to spend some money.

There are a lot of websites where people (often mothers sitting at home) go to earn some money by filling out forms or surveys. Eric knew of these sites and decided to spend a total of $3000 on Swagbucks.com to get people to sign up using his referral link. The result was that within a few days Eric had 2000 sign-ups and was in the top 10 already! At that moment he probably smelled that he may be able to win this contest if he would continue this strategy, especially after he received an email from Jet that had the total numbers of sign-ups of all the contestants in the top 10 in it. It turned out that the number 1 only had 4000 sign-ups so far!

So Eric decided to double down and started to spend serious money on his campaigns, making him the #1 with just 3 days to go before the competition ended. Of course the other competitors also did not sit still and bought ad campaigns as well, but by putting up a big Facebook campaign on the last day of the contest Eric managed to win. He spent a total of $18,000 on this, but that may turn out to be one of the best investments ever if Jet gets an exit.

I love this story, it shows that if you are smart and willing to put some money at risk you can have a chance to earn a life-changing amount of money. It’s a bit like angel investing, only in this case the pay-off is significantly higher than the average angel investment. I hope for Eric that Jet will make it!

Apple doesn’t know the time in Cancun

Westin Lagunamar, Cancun

Last weekend I was in Cancun for the wedding of one of the co-founders of Uvamo.com, a new P2P insurance company that I am involved in. It was my first time in Cancun and I had a good time there: the resorts are top class and the Caribbean sea beach is amazing (see for some of the pictures of the trip this set on my Flickr page). It’s not the real Mexico of course, but that’s probably an important reason why many tourists come to this place. They look for a safe and relatively cheap place for their beach holidays, and that’s what Cancun provides them. Most never seem to leave their hotels or resorts and when you travel to local markets in Cancun city you hardly see any tourists.

Time change Cancun

Cancun is so focused on tourism that the place decided to change its timezone during the time we were there (not just Cancun, but the whole state of Quintana Roo): in order to make it more convenient for tourists from the US east coast they changed from CST to EST, meaning that the clock was set one hour forward. This time change happened in the night from Saturday to Sunday, the night we had the wedding party.

The next morning I woke up, looked at my phone and then my watch and realized they were showing the same time. I had not changed my watch yet, however, so that should have shown a different time (my iPhone always changes time zones automatically). I checked with some friends and it turned out that all iPhones had the same problem, and that Apple’s timezone database did not include the Cancun time change. When I turned on my laptop it also still showed the old time in Cancun, meaning that it was actually an hour later than the time on my laptop. I manually set the time on all my devices to New York, so at least I would not make any mistakes.

JW Marriott, Cancun

This can cause a lot of problems though, because people rely on their mobile devices for the time. As long time readers of this blog may remember, the same happened to all iOS devices when Russia changed its time in 2011. Because of that I actually missed a flight from Moscow to Cyprus and because I did not have a visa for Russia I ended up in a hotel room jail for a night…

It surprises me that Apple doesn’t have access to a reliable time zone database that updates the times on its devices if countries decide to change time zones. Actually, I just realize that even Google gets it wrong when you Google the time in Cancun, it still thinks that the tourist place is based in the Central time zone. Is there is still no service or company that can provide reliable time information in 2015?

Coinbase $75 million round is a game changer

Bitcoin

Today Bitcoin exchange/wallet/service provider Coinbase announced that it closed a $75 million round. Among all the major funding announcement of other tech companies $75M may not seem like a lot of money, but it’s actually quite significant. Not only is this a record funding for a Bitcoin company (one that puts total funding for Coinbase at $106 million), but even more important are the investors that put their money into Coinbase. They are not just venture capital funds, but for the first time also top financial institutions.

Among the investors in this round are the New York Stock Exchange, Spanish banking giant BBVA, US military insurance company USAA and Japanese telecom operator DoCoMo. Also the former CEOs of Citi and Thomson Reuters both invested privately in this round. I think this is a game changer for Bitcoin that shows that the crypto currency is no longer dismissed in the board rooms of the largest financial institutions in the world. Now that the first banks are on board the rest will have to take Bitcoin more serious as well.

Why would the NYSE invest in a Bitcoin exchange? I believe they want to better understand how the blockchain works and how they could potentially integrate it into their own systems. Investing in Coinbase will give them access to doing this with the market leader. NASDAQ was for a long time seen as more innovative by tech start-ups that wanted to list (that changed a bit after the Facebook IPO), but with this investment NYSE shows that they are not as traditional as many people used to think.

Having a mega bank like BBVA invest is also significant, because this is the first time that such a bank invests in a Bitcoin company. Banks actually have a lot to lose if they invest in Bitcoin technology: they make their money mainly through fractional reserve banking (basically creating new money) which is not possible on the blockchain, because you can see exactly where each Bitcoin is. The blockchain is the ledger that banks provide for their customers and many of the bank functions are not needed anymore if Bitcoin would start to take over the financial industry. I am aware that you can of course circumvent this by creating money through off-blockchain transactions, and that might happen eventually, but I don’t think that’s why they would invest.

Probably BBVA’s thinking is that it’s better to be the first to embrace Bitcoin banking than to be a follower. Now they are able to buy a share in the leading Bitcoin company in the world for what may turn out to be a low valuation. Normally a $75M round implies an approximate $400M valuation of the company, but if Coinbase would really become the first Bitcoin bank that’s peanuts (BBVA itself already has a $50+ billion valuation, 125 times that of Coinbase).

Many might not know this, but BBVA is a very innovative bank. Last year they bought Simple, a debit card ‘bank’ that was on its way to disrupt the banking industry. I loved Simple and was a bit disappointed that they sold out, but at least BBVA seems to be a good parent company (Simple is still around, but I have no idea how they are doing).

Having former Wall Street CEOs on board as investors may not seem to be a big thing. However, even though these guys don’t have the power anymore that they used to have, but they are still extremely well connected and will spread the word about Bitcoin in the right circles. The fact that they see Coinbase as an investment opportunity means they understand that the financial world is going to change.

I don’t think this is the last big Bitcoin funding announcement that we’ll see, it may actually open the floodgates for even bigger investments in companies like Circle, Bitpay or Blockchain. Or we may see more M&A activity in this field, with $75 million in the bank you can do some interesting acquisitions. Good times in Bitcoinland!

Bitcoin Quo Vadis?

Bitcoin crash

The falling Bitcoin price gives many people the impression that Bitcoin is dying, but actually the opposite is true. Yes, the price has been on a downward spiral for a long time and right now there is massive panic selling going, but for me that does not mean that the currency or the blockchain have failed. After record VC investments last year I expect a lot of companies to release Bitcoin related products over the next couple of months, and I think that once the price reaches a bottom a lot more people will start using it, either directly or indirectly. I am now sitting on an airplane, so I finally have some quiet time to put my thoughts in a post.

Let’s start with the elephant in the room, what is happening with the price? I am regularly asked by people what is going on, some are just curious, others are annoyed that their investment is not doing well and some are panicking because they put too many savings into Bitcoin. To be honest, nobody really knows for sure what determines Bitcoin prices on a daily basis, but I have some thoughts on this. I am a member of several private Bitcoin message roups on WeChat and on Telegram and the price is a regular topic of debate there (but certainly not the only topic).

Everybody has different opinions, but the consensus seems to be that the huge volatility and price drop we are seeing right now was not expected among the people who spend most of their time in the Bitcoin world, but that it’s also not unusual for such a young and hyped currency, and that Bitcoin has seen this kind of drops before.

Most people were not part of Bitcoin yet in 2011, but in early June that year the price reached $32 only to fall to $10 a few days later. The bottom of the following bear market was at $2 in November 2011! So if history repeats itself the price could fall a lot more than it has done so far, and maybe that would be a good thing.

I still spend a lot of time on Bitcoin and am surprised that Bitcoin would fall so much. The main reason that the price has been on a downward trajectory is actually partly because of its success: more companies accept Bitcoin (among others Microsoft, Paypal and Dell now take the crypto currency) so more people are using Bitcoin that they already own to pay for goods. The problem is that merchants change these bitcoin for fiat currency right away, leading to an increased supply of coins. Only when they would hold on to them (e.g. when they could use BTC to pay their suppliers or pay their staff, or if they would believe that the value would go up) the markets will stabilize, and that is just not happening yet. And in a downward market there is less incentive to buy new Bitcoin for people who spend it, because people expect the price to be lower in the near future.

To make matters worse, the Bitcoin miners that used to hold on to most of their Bitcoin are now spending them to pay for electricity. The lower the Bitcoin price the more coins they need to sell to pay for their costs. At current prices it’s almost impossible to make money with mining and some companies even stopped their mining operations (see for example http://www.coindesk.com/cex-io-halts-cloud-mining-service-due-low-bitcoin-price/)

What we are seeing now is that people who bought coins in the uptrend are panicking. Many of these must have bought coins when prices were far higher than today and they may now worry that the value of Bitcoin may eventually go to zero, and so they cut their losses and sell. Smart? If you need the money it may be a wise decision, but if you bought the coins with money that you were prepared to lose I would hold on to it.

This is typical behavior of small investors and it normally indicates that the bottom is near. Soon bulls will come back into the market and start buying coins on the cheap. The question is of course when this will happen, and that is something nobody knows. I personally have not sold a Bitcoin over the past months and I am not planning to do so now either (many people are like me it seems, 70% of all Bitcoin have not moved in the past 6 months). But I am also not buying yet, mainly because I feel I have enough exposure to Bitcoin in my portfolio. If I would not have Bitcoin yet, however, I would probably put some orders in soon. Don’t take this as investment advice of course, and keep in mind that most people are a lot more risk averse than I am.

Bitcoin transactions per day

Actually, Bitcoin usage was at an all-time high a few days ago, with several days of over 100,000 Bitcoin transactions per day. Still tiny compared to other financial transactions, but there is a clear uptrend despite prices going down. And take into account that so far there are hardly any good use cases for Bitcoin for the average consumer.

I am probably one of the bigger Bitcoin users in the world right now (in terms of number of transactions), because I have a Bitcoin debit card. This card was issued by Blade Financial, a company that CrossPacific Capital invested in and where I am on the advisory board. I use the Bitcoin debit card on an almost daily basis. All over Vancouver I pay in Bitcoin, but none of the merchants know that of course, and they don’t have to know it either (they only see dollars, not BTC). It works great and I believe that once this card launches officially (this is just a test card) a lot more people may be exposed for the first time to Bitcoin.

VC investments in Bitcoin companies are still on the rise and I hear about new Bitcoin companies on an almost daily basis. Bitcoin is far from over and maybe the shake-out that will be caused by the low price is a good thing. Of course the low price will lead a lot of people to be even more skeptical about Bitcoin, but that can change quickly if the price stabilizes and will start increasing again.

Like I said earlier, nobody really knows what determines Bitcoin prices. I am just pointing to some trends that I observe in the market and that play a role in Bitcoin prices. One thing I did not mention yet in this post, but that I talked about in the past, is that institutional money can still not invest in Bitcoin because there are no ETFs on the market. I had expected that the first ETF would have been launched much earlier already, but the SEC is taking its time to approve these funds. The first one will likely be the Winklevoss fund and that could well lead to an unexpected rally when suddenly demand goes up much higher than supply.

I find the Bitcoin world fascinating and I am still very happy to be part of it. The low price leads to completely new dynamics in the market and because of that I keep on learning new things (sometimes the hard way!). Changes go much more slowly than I had expected, but I see that changes are taking place, both with blockchain applications and with Bitcoin as a currency. I look forward to the next year in Bitcoinland and being part of it as a participants, an investor and as an evangelist. The best is yet to come!

Christmas shopping in Vegas

Las Vegas boulevard

Grace and I just got back from a 3-day trip to Las Vegas. It’s an easy destination to get to from Vancouver, both Air Canada and Westjet have direct flights that bring you to Sin City in less than 3 hours.

Leaving rainy Vancouver for Las Vegas

Leaving dark & rainy Vancouver

The past weeks had been extremely busy so about 10 days ago we booked a flight and a hotel for the days before Christmas. Unfortunately work and private issues messed up our schedules a bit, so in the end we almost decided not to go. Because of that we both had to do phone calls and many emails while on vacation. Not the best way to relax, but we couldn’t change it and the only alternative would have been to stay home.

Las Vegas boulevard

Because I’m not a big fan of casino’s (I hate gambling and have trouble understanding how people can sit at slot machines or casino tables for hours) we booked one of the few hotels that does not have its own casino or slot machines, the Mandarin Oriental. I love the chain, it’s one of the hotels that I prefer to stay at in Asia as well. Their Las Vegas hotel was excellent with very friendly staff, a great room and good services. Almost comparable to 5-star hotels in Asia, which is something special in North America.

Las Vegas boulevard

We had decided to go to Las Vegas because we wanted to be away from the dark and rainy Vancouver winter days, and Vegas normally has dry and sunny weather (it’s in the middle of the desert). We were lucky because we had temperatures up to 23 Celcius while there (which is much warmer than usual), so I could walk around in a t-shirt during the day.

View from the Mandarin Oriental Las Vegas

View from the Mandarin Oriental Las Vegas

Grace’ main activity was to go shopping, while I was sitting in the hotel room behind my laptop, although I joined her a few times as well. A bit of a sacrifice, because I’m not a fan of physical shopping, I prefer to buy my things online.

What I like about Las Vegas is of course the nightlife, although we did not go out a lot. I was so tired from work that I slept 9-10 hours per night during the trip, just to recover. We did have some excellent dinners though. The first night we went to Picasso in the Bellagio, a French restaurant with a classical feel to it. I was glad I wore a jacket, otherwise I would have felt underdressed. We decided to go for the Menu Degustation, a multicourse tasting meal that featured the best creations of the chef. A great choice, but quite a large meal if you also take the wine pairings.

Steak at Jean Georges Las Vegas

Filet Mignon at Jean Georges Steakhouse in Las Vegas

We found out that Jean Georges also has an establishment in Las Vegas, in the Aria Resort. We had dinner there quite late on the second night, after we first had a foot massage in a Chinese spa on the outskirts of the city. Jean Georges did not disappoint, but it was not as high end as the one in Shanghai. Many of the other top restaurants that were on my shortlist (e.g. Hakkassan and Twist by Pierre Gagnaire) turned out to be closed during the week before Christmas, so that’s something to check out in advance before a future trip.

Michael Jackson ONE

On the last night we had dinner with friends from Vancouver that were coincidentally also in Las Vegas (the husband is actually a successful entrepreneur who lives mainly in Beijing, his wife and kids live full-time in Canada). Good for me to practice my Chinese a bit. We went to the Cirque du Soleil show Michael Jackson ONE with them in the Mandalay. There are always so many shows in Vegas that it’s hard to decide which one to go to, but after some research this seemed the best one. It was indeed a good choice, it was a combination of acrobatics, performance and dancing on the music of all famous Michael Jackson hits. Micheal himself also played a role with his 3D hologram dancing on stage, pretty cool!

View over Las Vegas from Mix Lounge (43rd floor of Delano)

View from Mix Lounge at Delano over Las Vegas’ skyline

We’re now back in Vancouver where I’ll work one more day on Wednesday before trying to take a few days off. It was a fun trip to end the year but next time I’ll try to plan it during a time when we are less busy.

The world’s best audio storytelling: Serial

Logo of the world's #1 podcast: Serial

Do you like to read detective books or watch detective movies? Do you enjoy a reality show? Then how about a combination of the 2 in the form of an audio podcast?

About 2 weeks ago I wrote a post about the Startup podcast that I liked a lot, and after that I decided to give the Serial podcast a try. I had heard about it a few weeks before already but did not think it would be interesting to listen to. Well, I was completely wrong. When more and more friends wrote about it on Facebook and Twitter, when even the mainstream press started to write about the podcast, and especially when the podcast hit #1 in iTunes I knew I was missing out on something.

It took me less than one episode of this weekly program to become addicted to the podcast. I ‘binge listened’ the first 7 shows in just 2 days (episodes are 30-50 min each). I lost sleep over it, listening to “just one more” episode at 2 AM and I drove home slowly from work so I could listen to a few minutes extra of the podcast. The experience reminded me of some of the top TV series that I binge watched, such as the early seasons of Lost and more recently Downton Abbey, where I could not wait to finish my work late at night so I could watch an episode.

My favorite podcast: Serial

Serial is the story about the 1999 murder of Hae Min Lee, a Baltimore high school senior. Her ex-boyfriend Adnan Syed was arrested a few weeks after the murder and was later convicted. He is still in prison. The thing is, he says he is innocent. Of course many criminals say they are innocent, but the longer you listen to Serial the more you realize that some strange things have happened in the investigation.

Did Adnan do it? I don’t know yet. One moment I am totally convinced that he is not innocent, but 10 minutes later I feel certain that he was framed and someone else was the murderer. I change my mind continously while listening to the podcast and when thinking about the facts afterward.

One reason why the show is so successful is because it slowly releases new evidence. The storytelling is amazing, with an important role for Adnan who is interviewed by phone in almost every episode. You hear him speak to you about the crime and what happened on the day of the murder (was she really murdered that day?) on your headphones or over he speakers of your car. That is so powerful, especially because his story is mixed with insightful comments by host Sarah Koenig.

Interestingly, nobody knows how the podcast will end. There will likely be another 3 episodes, but even Sarah says she does not know what her final verdict will be. The Internet is full of theories about Adnan and what might have happened on January 13, 1999. There are tens of thousands of comments on Reddit, people write blogs about it and there are even podcasts about this podcast. Many (or likely most) of the major newspapers have written about Serial and keep writing about it. I have never seen this before for a podcast. Serial is taking the medium to a completely different level.

One takeaway from Serial is how sloppy murder cases are investigated in the US. The police wants to find and convict someone and seems to just put aside evidence in favor of the accused. Adnan’s lawyer may not have had the best for her client in mind (unfortunately she died a few years ago, so she could not be interviewed) and it’s clear she made some major mistakes during the trial. Racial profiling is a big issue, my impression is that had Adnan been a white guy he may not have been convicted. And the scariest thing is that a former police detective who was paid by the program to look at the evidence, said that this case was actually investigated better than average…

If you want to give Serial a try you can listen here to the podcast on iTunes and here on Soundcloud (embedded below). Or just go the website of the Serial podcast where you can read about and stream all episodes. And if you like it as much as I do, make sure to send a donation to the production team so they can keep on doing the world’s best storytelling. I can’t wait until Thursday when the next episode comes out at 6 AM EST!

The parody Western Union does not want you to see

Western Union asked Facebook to take this parody down, so now it's going viral!

One of the companies that will be threatened most if Bitcoin becomes a success is Western Union. So when a parody on one of their ads appeared on Reddit and Facebook, they were not amused. The company sent a DMCA notice to Facebook forcing them to take the picture down.

Not a smart move for anybody who understands social media. Not only is a parody generally considered fair use of an image, so there is no legal basis for the notice, but normaly a take down notice leads to a lot of additional reporting, so many people who would not have seen the ad now see it.

The original ad makes me feel sad for people that don’t have normal bank accounts and need to use Western Union to transfer money. Sending up to $50 for ‘only’ $5 is crazy expensive, this is a fee of 10%. And this is only within the US, not even to overseas locations.

I wonder if there are other hidden fees, because in the add it only states ‘transfer fee’. I tried to figure this out on their website, where I noticed the small print messages “Card issuer cash advance fee and associated interest charges may apply” and “Western Union also makes money from currency exchange”.  Of course there will be no currency exchange when sending dollars inside the US, but that could add up for international transfers. Also “fees for agent locations may differ from online fees”… Plus there is a maximum amount of $999 that you can send per 30 days.

Generally I don’t think the US will be an easy market for Bitcoin to take off, because it’s too well developed to solve a real need. But this kind of transfer fees remind me that even in North America there are some serious business opportunities. I hope the ad will lead a lot more people to consider using Bitcoin. The technology is still too difficult to understand for most people (especially that part of the population that uses Western Union in the first place), but easy-to-use services such as Circle.com are now available to anyone and could save people a lot of money.

Scott and Elaine’s first piano recital

Scott & Elaine ready for the piano recital

This weekend Scott and Elaine had their first public piano performance during a recital for the Canada Music Week. Scott, who is 6 years old, started playing piano just over a year ago, in October 2013. Elaine (5 years old) tried piano for a few weeks last year but she was too young and started again this summer, so she now has about 4-5 months of piano experience.

Canada Music Week program with Scott & Elaine!

They have lessons once a week (next to all their other extracurricular classes and their daily homework), but practice at least 30 minutes at home every day, with Grace as their substitute teacher.

Elaine during her first piano recital

The kids liked to dress up for the event and were not nervous at all. The only one who seemed to be nervous was Grace!

Scott during his first piano recital

After their performance they got some flowers from us and they were really proud of that. On Saturday Scott and Elaine will have their next piano recital, so they are studying hard on another piece this week.

After the piano recital

Links to their performance on YouTube: Elaine’s piano recital and Scott’s piano recital

Embedded videos of their performance:

Silvercar – still my favorite car rental company

Leaving Opus One in our Silvercar rental

My Silvercar at the Opus One winery in Napa Valley

About a year ago I wrote about my very positive experience with car rental company Silvercar. Last week I used them again in San Francisco and I still love their cars and their disruptive business model. I am just surprised that not more people know about them and use them, therefore another blog post to spread the word. And no, I am not getting paid for this of course!

Silvercar is a US based rental car company that only has Audi A4 Quattro cars in its fleet (although that will change soon, I heard they will add Audi Q5s as well). All cars are exactly the same and are silver colored, hence the name. Pricing is competitive, at $89 per day during weekdays and $69 per day during weekends (in SFO, other airports may have different prices). But what really sets them apart from the competition is the experience and the extras that are all for free.

At San Francisco airport lines are generally quite long at the traditional car rental companies. For Silvercar there are no lines, after you made a reservation you just open the Silvercar mobile app when you arrive at the airport and click on the button to indicate that you have arrived. A Silvercar representative then picks you up from the rental car terminal and drives you to the Silvercar location (a 5 minute drive). There you can choose a car, you open the door by scanning the car’s QR code with your phone and off you go. No waiting in line, no filling out of forms and no upselling of insurance or other unnecessary add-ons.

Silvercar has great cars

But that’s not all, because the Silvercars are all extremely well equipped. Every car has a great navigation system built in (honestly, it’s much better than the system in my Porsche or Mercedes-Benz), which is free. So no $25 per day for an old-fashioned GPS that some car companies are trying to sell you. Each car has a toll tracking device, meaning that you can take the Fastrack lane at toll gates (very handy around San Francisco), and they will bill you automatically for this. All cars are also equipped with Sirius XM satellite radio, so you are not forced to listen to FM radio stations full of advertising and dumb presenters. Of course you can also play your phone’s music or podcasts through bluetooth. And the cars have built-in wifi, so you don’t have to use expensive data plans if you use a non-US phone or want to check your mails on your laptop. No other car rental company offers this and certainly not for free.

When you get back after your trip you just park the Audi at Silvercar and they automatically detect how full the tank is (with a sensor), so no need to fill it up when you are in a hurry to get to the airport. They will charge you regular gas prices, no huge mark-up like many car rental companies do (Silvercar just adds a $5 fee to fill it up). Unfortunately they do not bring you back to the airport in your own car anymore, you now need to take a shuttle bus (that left straight away after I got on, so no waiting for other passengers). At SFO they charge you an additional $20 for that, but it’s a mandatory airport transportation fee so it seems they can’t get around that.

My experience with Silvercar is excellent and I would advise everybody to use them when they are in San Francisco or at one of the other airports out of which they operate (currently Los Angeles, Dallas, Austin, Miami, Denver and Phoenix, with more locations being added over the next months). Silvercar just closed its $14 million Series B round (in total they raised $31.5 million), so I think you’ll hear a lot more from them in the future!

Opening of the 2014-15 ski season

Ski season opening on Cypress Mountain (Nov. 15, 2014)

Even though there is hardly any snow yet on the North shore mountains, today both Cypress and Grouse Mountain opened their new ski seasons. Because I have a season ticket for Cypress Mountain I decided to drive the 20 minutes from our home to the ski area to check it out.

Ski season opening on Cypress Mountain (Nov. 15, 2014)

The weather has been fantastic over the past days. Since I came back from San Francisco on Tuesday I have only seen blue skies, but it has been quite cold. On Friday morning it was -5 Celsius in Vancouver, with maximum temperatures around +5 Celsius during the day. That means that it was freezing the whole day in the ski areas (Cypress base station is at 3000 ft, about 900 meters), which is perfect for artificial snow making.

Ski season opening on Cypress Mountain (Nov. 15, 2014)

When I arrived at Cypress I saw that only 2 chair lifts were open, and a total of just 3 downhill ski runs. Not a lot, but good enough for an hour of skiing.

Ski season opening on Cypress Mountain (Nov. 15, 2014)

One advantage of skiing at Cypress Mountain is that it’s normally very quiet and there are hardly any lines at the lifts. Even today it was not very busy, the longest I had to wait was less than 5 minutes. Most Vancouver locals wait until there is a lot more snow before they start waxing their skis, and today the majority of the people on the slopes actually seemed to be Chinese (I heard a lot of Mandarin around me while in line for the lift).

Ski season opening on Cypress Mountain (Nov. 15, 2014)

It seems that there will be some rain by the end of this week, which likely means snow on the mountains, and I look forward to that. I am planning to ski at least 1-2 times a week over the next 5 months, so the more snow the better!

StartUp podcast

HearStartUp.com

Every day I spend about 25 minutes driving to and from work, which is a great time to listen to podcasts. There are so many good podcasts available nowadays and it’s so easy to play them on car audio systems through your phone, that it’s surprising that not more people do this. For me podcasts are a way to relax (especially after work) and to learn new things. I don’t like to waste time during the day, so I prefer podcasts that are entertaining but also give me new ideas or teach me stuff.

This week I listened to episode 7 of StartUp, a fantastic new podcast series that follows a the first couple of months of a new start-up. Alex Blumberg (of among others ‘This American Life’ and ‘Planet Money’ fame, podcasts I also listen to regularly) decided to set up a podcasting company and record most of his conversations and thoughts during the start-up phase of the company. The result is one of the best podcast series I have ever listened to, so good that I decided to blog about it.

I have been involved with a large number of start-ups over the years, either as a (co-)founder, CEO, board member, advisor or investor. One thing I learned is that the first few months are always remarkably similar. You have the best business idea in the world (you think – but most start-ups eventually change their business model because it doesn’t work), you are super motivated to get it off the ground, you try to find a good name, you look for co-founders and early employees, you start raising funds and finally you release your first product.

My favorite podcast: StartUp Podcast by Alex Blumberg

This is what Alex captured on digital tape and put together in this 25-30 min/episode podcast. It’s great to hear how he grows from a super naive first-time entrepreneur to someone who starts to understand a little bit how the start-up world works in the later episodes. The podcast covers topics such as raising money and he even records the conversations he has with VCs (even some well-known ones), and how they react to his pitch.

Other topics he covers are how he finds his co-founder including the hilarious decision making process on who gets how many shares. I am glad they eventually solved that, because if I had been in the shoes of his eventual co-founder I would have probably walked off after Alex’ lowball offer. To be fair, Alex really had no clue about what it means to be a co-founder instead of an employee, and he mainly listened to friends who had no clue either.

Another interesting episode is the search for a name. The original name of American Podcasting Corporation is not good enough and the process they go through to find a name that everybody is happy with is very recognizable. It also shows that Alex is not a real business person but more of a creative: in the end he finally likes the name they come up with but after sleeping on it for a night he is not happy with the process they used to get the name. He wanted to change it because of that… That would drive me nuts as a co-founder, you often need creative people in your business but it’s not always easy to work with them.

When I started listening to the podcast I was 100% sure I would never consider investing in Alex’ venture, but after 5 episodes he almost convinced me to call him up and ask to join in the round. I started to like him and the way he talks about his business plans. I believe he could build an interesting business with his podcasts and I would have been willing to bet some private money on that. That is, until I heard his valuation. $10 million for a start-up that is just starting out seems very high to me, but they still managed to raise $1.5 million on it (incl. $200K from listeners in a crowdfunding episode!). Good for them, but I hope they will be able to raise subsequent rounds at such a hefty seed round valuation.

The company is certainly off to a good start, because this podcast is quickly becoming one of the more famous ones on iTunes and Soundcloud. If you are thinking about doing your own start-up this is a “must-listen-to” podcast. The same if you are a start-up investor who has never built a business from scratch him (or her)self.  If you just want to learn how a start-up works and about the problems entrepreneurs face in the early stage of their business venture, you should check this out. It’s well produced, very entertaining (even the ads are so good that you don’t want to skip them) and you’ll certainly learn a thing or two. The series is not finished yet, I hope Alex will keep on producing new StartUp episodes for a while.

Halloween 2014 in pictures

Halloween 2014 at Park Royal in West Van

A zombie attacking my car at Park Royal

This weekend it was Halloween again, and with 2 young kids that means lots of celebrations. The kids started the day with a Halloween Parade at school. In the late afternoon we went to the Park Royal shopping mall where many shops were handing out Trick-or-Treat candy. Scott and Elaine met many of their school friends and teachers there.

After a quick dinner at a Taiwanese restaurant we went on to King’s Avenue for trick-or-treating. We ended the evening in our street where the kids got a lot of candy from our neighbours as well. Scott and Elaine had a great time during Halloween and are now already talking about how they want to dress up next year. Below some pictures of the day.

Halloween 2014 at school

Scott dressed up as an emperor, but he lost his crown sometime during the day

Halloween 2014 at school

Elaine dressed up as her favorite Disney character Rapunzel, of course with a long hair braid

Halloween 2014

At school the kids started the day with a Halloween parade in which they had to tell the audience what costume they were wearing

Halloween decorations at home

Of course also our house was decorated for Halloween, both on the inside and the outside

Halloween decorations at home

Halloween decorations at home

Halloween at Park Royal

Family picture with some friends in Park Royal. I went as King Tut and several people took pictures of me!

Halloween 2014

Trick-or-Treat on King’s Avenue

Halloween 2014

Trick-or-Treat on King’s Avenue, with amazing decorations at some of the houses

Trick or Treat in West VancouverDespite the fact that it was pitch dark on the street, Scott and Elaine met several friends during the Trick-or-Treat

Scott's collection after a few hours of Trick or TreatThe partial result of trick-or-treating: a big bag of candy and other treats. 

Scott’s first Grouse Grind

Gondola at top of Grouse Mountain

View from Grouse Mountain this afternoon

I regularly do the Grouse Grind, a very steep 2.9 km hike with an altitude difference of 853 meters. Scott had told me a few times that he would like to join me, but I always thought it would be too hard and dangerous for him. The Grouse Grind was chosen last year as of one of the 10 most dangerous hikes in the world, and although I think that’s a bit over the top it’s certainly not a simple walk in the park. Each year many people have to be rescued because they underestimate the trail and some people have even died while trying to get to the top (either from heart attacks or because of slipping and falling down the steep slope).

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With Scott before the start of the Grouse Grind

The Grouse Grind season will be over soon: once there is snow on the trail it will be closed right away because it would be too dangerous, and that will likely happen in the next 1-2 weeks. So when the Grouse Grind topic came up again yesterday I told Scott we would go on Sunday if the weather would be nice.

Scott's first Grouse Grind

Well, today was a sunny day, so after lunch we put on our sports clothes and hiking shoes and drove to the start of the trail. Despite the fact that it was late in the season it was quite busy at the entrance of the trail, but it did not matter too much today because we would not go fast. If I do the Grouse Grind on my own I normally go much faster than the average hiker, so I keep on passing people on the narrow trail, which slows me down a lot.

Scott's first Grouse Grind

Scott was very happy and immediately set the pace. For the first 10 minutes we kept up with all the other hikers, but when the trail became steeper I told Scott to slow down a bit and let people pass. After about 20 minutes we made our first stop to drink some water. I didn’t really know whether Scott would be able to make it to the top (I had some doubts actually), but I knew that the best chance of reaching the finish was by stopping frequently and by drinking and eating enough. So I encouraged Scott to stop regularly, luckily he did not mind.

Scott's first Grouse Grind

The trail is well maintained and has a lot of steps that make it easier to climb. However, for Scott these steps were just a bit too high, so he climbed around the ‘stairs’ which made it even harder for him. But he did not mind, he even told me he liked the difficulty of the climb. After about 30 minutes we were at the 1/4 mark and we made another stop. Scott was talking a lot during the hike, so he did not seem to be tired yet.

Scott's first Grouse Grind

We hiked on and Scott kept on setting the pace. We let some people pass, but the pace was such that we even passed some people! The last thing I wanted was for Scott to blow up halfway the course, because walking down is even more difficult than going up (next to the fact that it’s not allowed to hike down), so I forced him to make another stop before the halfway point. He did not see why that was necessary but he did not mind and after a banana we hiked on to the 1/2 mark.

Scott's first Grouse Grind

From there Scott seemed to be getting wings and between 1/2 and 3/4 he did not want to stop at all. He asked me a couple of times if we were almost there, but he said he was not tired. At 3/4 we stopped for some more water and a Twix bar and then we climbed the last part to the top.

Scott's first Grouse Grind

After 1 hour and 53 minutes we reached the gondola station and I high fived Scott to celebrate his first Grouse Grind. He was happy as well and was still full of energy. We had a hot chocolate in the restaurant and then we walked around on the mountain for another 30 minutes before taking the gondola down to the parking lot. I am very proud of my little boy, he is quickly growing into a big boy and I am sure we’ll do this hike more often together. Congratulations on this achievement Scott!

Done! Scott's first Grouse Grind

Bitcoin in 6 minutes

A couple of months ago Rutger van Zuidam told me he was working with some friends on a project to create a short animated video that would explain the concept of Bitcoin to people new to the technology. I liked the idea immediately, because understanding the basics of Bitcoin is hard and most resources on the Internet assume that people know what Bitcoin is and what it can be used for. Today the video was officially launched, you can see it here in English and here in Dutch (both links on YouTube).

The result is great and will send it to friends or business relations who ask me about Bitcoin, something that happens several times per week. The video explains that Bitcoin is much more than just a currency (Bitcoin as money is actually just the tip of the iceberg), how it works and what the technology can be used for.

There are some great examples in the clip, among others about using Bitcoin technology to reduce healthcare costs (by assigning some bitcoins specifically for certain care), and about Bitcoin trust that allows a vending machine to order new goods on its own when they run out and even pay for the products itself.

Even if you know a lot about Bitcoin already it’s an entertaining video. And if you’re new to Bitcoin this educational video is a must watch. Enjoy and spread the word!

More information: http://www.bitcoinproperly.org/

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