Chris Leong

A friend of mine, Bugs Tan has a great way for inventors and entrepreneurs to evaluate good business ideas. Bugs Tan is an award winning inventor who is very passionate in the field of innovation and entrepreneurship.

Based on his experience, he came out with a practical series of questions to help entrepreneurs and inventors to evaluate their ideas. I like these questions as it provides a very good perspective on how an entrepreneur should review the viability of their idea.

Do also check out Bugs’s blog to tap his thoughts on innovation.

A friend of mine, Eliza Nordin is a VC and have recently did a great presentation on the subject “Factors that attract venture capitalist to new ventures”. Here are the slides to her presentation.

Follow her on Twitter to tap into her thoughts: elizanoordin

Overview of Teak Capital

Teak Capital is a venture capital management company based in Malaysia. Teak Capital currently manages   Teak Ventures Sdn. Bhd.’s funds and is also an appointed partner of MAVCAP under its Outsource Partners Programme (OSP) in July 2008.

Before answering the question, What is a good business idea? Let me ask you this question, do you need a good business idea to start your business?

A long time back, my MBA professor once told me that your business idea do not need a competitive advantage to make money. The class was stunned but in many ways he’s right. There are so many businesses out there who does not have any significant competitive advantage but are making a decent profit.

Think of the chicken rice stall near your office. How do they fare compared to the best chicken rice in town? Not good enough i assume. But are they making money? You bet they are. But not as much as the extraordinary money that the best chicken rice stall is making.

So, do you need a good business idea to do business? No.

You only need a good business idea if you aspire to be the market leader in your industry. A business idea that allows you to earn extraordinary profit.

So what consist of a great business idea?

In my opinion, the human motivation of avoiding pain and increasing pleasure is a good measurement of an idea.

The best ideas generally have a mixture of both. Personally if given a choice, i like ideas that help customer avoid/remove pain. It is just human nature to have a bigger motivation to avoid pain rather than to seek pleasure.

The first step, for you to evaluate an idea is to identify the pain point of your customer and think of a solution to solve it. Make sure that the problem is so painful that the customer will gladly pay money to make it go away. (Those are the best ideas) In terms of pricing, you need to ensure the pain removed is bigger than the pain the customer feels when paying you.

What about pleasure based ideas?

Use the same methodology and identify how you are increasing the pleasure of your customer. Are you creating fun? Are you increasing sales for them? Identify them.

Careful though, if the business idea is a pleasure based idea, then you really need to identify whether your product/service is a “nice to have” (massage, spa, manicure & ETC).

If it is a “nice to have”  then you are exposed to what is called an elastic consumer goods/services. It just means that the higher you charge the lesser demand you have. Elastic goods/services are dependent on the current economy situation. People will cut back if they don’t have enough money and you also face the danger of a price war.

Here are some starting point for you to review your business idea.

Stay tune for the next post.

I’ve been meaning to write more about the entrepreneur scene in Malaysia, but I just can’t seems to find the time to do that. But I would like to share with any budding entrepreneurs that wants to apply for the Cradle pre-seed grant a useful budget spreadsheet.

Like any grants, Cradle’s pre-seed grant has rules on what you are allow to spend on. Based on the guidelines for the allowable expenses in Cradle’s website, I’ve devised a template to assist entrepreneurs to plan their expenditure. It is based on the allowable expenses stated by Cradle in their website.

Documentation on the allowable expenses by Cradle (As of 19 March 2010)

Download the Cradle pre-seed budget template.

P.S: Do feedback to me if you find any bugs in the template.

Quite some time back, I wrote about some resources that Malaysian entrepreneur can check out to get their idea started. Cradle Funds had just launched its new commercialisation grant (RM 500k) to assist entrepreneurs in their ventures. Cradle has 2 grants, one for product development and one for commercialisation. With these 2 funds, Cradle had helped fill some of the gap in the funding ecosystem in Malaysia.

From what i understand, Cradle is keen to fund ideas/business that has technological innovation + potential to make money.So entrepreneurs “want-to-be”, check out the Cradle website to see how you can tap into it to kick start your ideas

Product Development Grants (CIP 150)

Commercialisation Grant (CIP500)

In the last post, i had talked about losing mind share in US. However, Friendster is still very strong in Asia, especially in Malaysia and Philippines. Friendster is the #11 site in Malaysia and #6 in Philippines (Facebook is the #1 in both countries). However they have been losing market share for a long time (Friendster used to be the top site in Malaysia)

So the key question now is, Is Friendster better off with MOL than on their own?

The answer is YES for me on paper. Here are some reasons:

1. Friendster can only survive by being a niche social media player.  Friendster is strong in Asia but they are still an American company (Australian CEO). So fundamentally, their insights on being a niche Asian Social Media player is limited. Therefore MOL will be able to provide these insights (Especially with Malaysia as one of their strong market)
2. MOL is strong in Berjaya Group (Majority owner of MOL) has many B2C businesses like U-Mobile, Hotels and its many F&B Franchise business (Kenny Rogers, Wendy’s ETC. Avenues of monetising Friendster can be easier.
3. With MOL already strong in Micro-Transaction, they would have the experience to monetize Friendster’s users. MOL and Friendster shared the same target market.

However, MOL is facing an uphill task. They need to settle down quick. Here are some of my key worries.

1. MOL’s strategy of using Micro Transaction, Social Games and Music make sense but execution might be difficult as MOL has no prior experience managing a Web 2.0 company. Can MOL afford to make any rookie mistakes? Can they effectively manage cross culturally?
2. Does Berjaya have the vision to stay with Friendster for the long run? Berjaya’s track record with MITV is not exactly fantastic. Will they see enough value in Friendster to invest more money if the goings get tough?

Friendster is now Malaysian. Malaysia’s MOL has just bought Friendster a couple of weeks back for an undisclosed sum. It was rumored to be at the region of USD 26 million, a large sum of money considering the fact that they have been losing share and mindshare to Facebook. While I am happy that Malaysia finally have a global Web 2.0 company, I am skeptical on how Friendster can stay relevant in the Social Media sphere with the Goliath Facebook gaining market share day by day.

That skepticism was magnified when I tried looking for some books about Friendster in Amazon. The top 2 books that I found are Woman Loving Woman and Threesomes, Friendster has lost so much mindshare that it is even not featured in Amazon’s search engine . Not even one Friendster book is featured in the first 3 pages!

I hope Friendster’s 3 prong strategy on Microtransaction, Music and Social Gaming works. Or else, it will be a very expensive lesson for MOL.

All the best Friendster!! I agree with GreyReview, you need a fair dose of luck, lots of it!

Updated: In a different post, I mentioned that  Friendster is better off with MOL than on its own. Berjaya offer so much more value for Friendster to make money. I’m still skeptical, but I will be very happy if MOL can turn around Friendster. It will definitely improve Malaysia’s brand..

The reason that i’ve not been posting lately is basically to have some time to reflect on how should i position my blog. So stay tune for more news

The Windows Lounge features the lighter side of Windows 7. It’s a secure group on Facebook – you need a Microsoft email address to join! Come for Tips n Tricks, fun videos and to share your thoughts on Windows 7.

Check it out

An effort by Microsoft to promote Office 2010 movie style. So far so good, its the top 5 viral video for the past 24 hours (as at 10 July 09 by Unruly Media) with 66,000 views and 112 blog post.

If you want to try out the technical preview of Office 2010, check out this website Office 2010: The Movie Web site.

Read a insightful survey that I found on the net about a study about Malaysian’s Gen Y(millennials) workforce by PwC. This reports summarize the “turn-ons”  and “turn-offs” of a Malaysian Gen-Y worker.  This report provides some clues on how  a manager especially from the Gen-X and Baby Boomer era should manage a Gen-Y worker.

After reading it, I find that this report is also very useful for any marketer who wants to sell to Gen-Ys. Like it or not, Gen-Ys are going to contribute the bulk of consumer spending in the near future. Understanding what they turn them on is key for any marketer.

I compile some of the highlights of the report but to read more click here to Download survey

Highlights of a Global Gen-Y Worker

1. Consistency gets stale. They want mobility throughout their career lifetime, preferably involving overseas stints.
2. Job-hopping is overrated. Debunking the portfolio careers myth, our Gen Y will remain loyal to their employer – as long as they feel fulfilled in their role, that is.
3. Green is in. Issues of sustainability and climate change are of major concern, and will affect their career choices.
4. Can’t live without gadgets. They’ve grown up with technology – it is part and parcel of their lives, which includes the work they do for a living.
5. The term work-life balance is passe. Employers can’t just encourage a balance but should provide the means for this balance through more flexible work hours.
6. Respect my space, please. The Gen Y maintain clear separation between their work and personal lives, and are unwilling to share too much personal information with their employers.
7. Coaching welcomed here. They prefer on-the-job development rather than formalised training, especially working with strong coaches and mentors.
8. Cash is king. When it comes to benefits, cash bonuses are valued higher than training and development.
9. We are all made the same. They believe in gender equality, where they and their partners will contribute an equal amount of financial support for their households.
10. I rely on me. They will take personal responsibility for funding their retirement

The key findings reflect the views and opinions of our Malaysian Gen-Y worker, which for the most part mirror that of their global counterparts:

• The majority hope to experience work life overseas – 88% expressed the desire to work abroad.
• Corporate responsibility (CR) plays a big role for millennials in their choice of employer with 86% choosing employers with similar corporate responsibility values and 77% stating they would leave an employer whose values no longer matched their expectations.
• Strong coaches and mentors are key to development – 98% of the respondents stated working with strong coaches and mentors was important to their personal development.
• 65% indicated that they plan to self-fund their retirement while only 22% expected their retirement to be funded by their employers’ retirement scheme.
• 68% of millennials believe that by 2020, China, Russia and India will have more economic influence than Europe and the USA.
• Job hopping in a portfolio working arrangement is not likely. 86% of millennials believe they will only have between two and five employers and only 3% believe they will have 10 or more employers

Our millennials are hoping for a shift from traditional Asian work practices. 58% expect to work traditional work hours with some flexible hours and 57% selected flexi-hours as the most highly valued employee benefit.

• Our millennials value privacy – only 29% are willing to share more personal information with their employers.
• Cash is king for millennials – 49% value cash bonuses as one of the most preferred employee benefits.
• Our millennials are on the fence on the current Malaysian economic health. However, almost three-quarters (72%) feel that the global economy is worse off.
• They believe in gender equality. Two-thirds (66%) believe that they and their partners will contribute an equal amount of financial support to support the household.

Michael Jackson is a great singer and I would always remember him for all the fantastic songs that he brought to us. I basically grew up listening to his songs and my favorite song of his is “Man In The Mirror “ . I’m planning to watch the Michael Jackson Memorial live tomorrow to rekindle my childhood memories.