Saturday, March 04, 2006
Main Page (Startup School Wiki)
Paul Graham's startup school Wiki is pretty cool, especially the presentations.
ï¿½1 in 6 male immigrants leaves Canadaï¿½
Some signs of Canadians cluing into the problems they face in absorbing imported skills in their labour market. Regular readers of b-gen would, of course, not be surprised at the findings of the study. I have blogged about this issue a number of times.
What are the chances of Canada getting this right? I remain skeptical. Stephen Harper did make this issue a part of his electoral platform, but until I see any tangible action I'd consider it as just a cynical ploy to attract immigrant votes from Liberals and NDP. Besides, the real problem is at the provincial level because professional regulation in Canada is a matter of provinical jurisdiction. Unfortunately, provincial professional associations are very powerful lobbies whose main interest is in preventing competition from imported skills so that their existing members can continue to earn high wages. They make it extremely hard, tedious and expensive for new immigrants to practise their professions in Canada by creating a labyrinth of regulations whose sole purpose is to keep as many immigrants out of their professions as possible. Of course, they hide behind pseudo-concerns of "assuring safe practices" and indulge in not-too-subtle fear-mongering about third-world educated furriners let loose in Canada. The provinces leave it up to them to work out the procedural details, which is kinda like asking union hacks to come up with procedures to qualify scab labour for work. Essentially, this creates a market failure that allows current members of professional associations to seek rents.
This is a huge structural problem with the Canadian economy. On one hand, immigrants are making up the shortfall in Canadian population growth : if Canada were to stop immigration, its population would fall and the economy would shrink due to low birth rates. For many years the replacement of retiring workers and growth in new skills has been accounted for by the immigrant labour. However, the creation of entry barriers by professional accreditation bodies creates a structural impediment for the new supply of labour and skills in connecting with the growing demand. Therefore, you have this ridiculous situation where many parts of Canada are running short of doctors, engineers and nurses but many well-qualified doctors, engineers and nurses educated in foreign universities continue to drive cabs or deliver pizzas in Toronto and Vancvouer. Clearly, this cannot go on indefinitely and as other destinations open up and compete for a share of the same migrant labour skills, Canada would lose its attractiveness.
This leads me to believe that perhaps the real problem is the separation of federal and provincial powers in Canada. Immigration is federally regulated and works in its own little silo to meet its targets of attracting targeted volumes of skills. Once those people come into the country, they are left to fend for themselves and there is no coherent strategy to ensure that Canadian society actually benefits from the increase in labour pool. The provinces are not particularly involved in helping immigrants integrate into the labour market, although they have jursdiction over regulation of professions, and thus an indirect control over such integration.
Solution? There are a few obvious options to solve the problem : get the provinces involved in immigration, or create federal accreditation standards, or help immigrants qualify for specific provincial jursidictions even before they enter the country, or change the immigration policy so that only people posessing relatively easy-to-absorb skills are brought into the country. The time to do it is now. Too many lives are being ruined by false promises held out by Canada. I have heard enough tales of woe from frustrated cab drivers in Toronto and Vancouver to see first-hand how painful this is. Of course, such retarded policy is also hurting Canada's long-term economic interests and destroys one of the few macroeconomic competitive advantages the country has. Canada must leverage the attractiveness of its otherwise tolerant and peaceful society to attract global talent and let it flourish in its beautiful, cosmopolitan cities if it wants to have any chance of creating a post-resources, post-industrial economy. $60 oil is not going to last forever, Alberta.
When you can't earn an MBA
A friend forwarded me this interesting e-book on the potential (lack of) value of an MBA, written by an Indian entrepreneur.
: as a matter of fact, I do have an MBA from a good school that I am quite happy to have earned. I'd like to think that I have, in fact, learnt something at b-school and my MBA has also opened up many doors for me that otherwise would have remined closed. Funny enough, I am making less money post-MBA than I made pre-MBA, but I absolutely love my post-MBA job. However, this book presents an interesting counterargument, one that I have seen many potential b-school applicants think about in some form.
My personal take on the MBA
: if you are passionate about business, economics, strategy and leadership (as I am), you can't go wrong with a top MBA. However, if you see the MBA just as an escape hatch that takes you from being a code monkey at tech shop and land you a spreadsheet monkey job at an I-bank or become a consultant droid, you would most likely miss out on what could potentially be the most rewarding and enriching educational experience of your life. I *loved* each and every moment I spent at b-school. Just pick a school that in non-parochial and attracts smart people from around the world.
: As Steve Jobs says, you gotta find what you love. Some of us find it at b-school. Others don't. How much your MBA means to you would most likely depend upon which of these two categories you fall under.
Friday, March 03, 2006
McLuhanisms - Marshall McLuhan
Just going through some of my all-time favourite stuff on McLuhan's website for the zillionth time. Did I mention that I am an utterly unabashed McLuhan groupie? He's, like, the coolest Canuck ever.
Monday, February 27, 2006
Industry Note - Are VCs the Real Chasm In 2.0?
I had a fun chat with Scott a few days ago, and he has a post outlining a bit of what we discussed, so check it out for some fresh thinking.
But the larger point behind that particular discussion is simple, and probably worth a larger, broader discussion.
Out discussion was about the fact that we're at an impasse today in the 2.0 space. The 2.0 crowd has the right tools (communities, networks, attention markets, etc), but not the right audiences. Big media still has the audiences, but not the tools.
Consider Digg. Digg, as it is, is useless to me, and to most of the rest of the universe. I don't care if there's a video on YouTube about an 87 year old dude having a sex change. Reading Digg is like listening to a coked-up Connie Chung talking to the same 1000 Ajax worshippers...every second of every day.
It's not that Digg inherently sucks. In fact, I think attention markets are going to be a revolutionary, radical innovation. But, as in many 2.0 models, the content is like the community.
Digg's community of pimply teenagers can give me neither relevance nor depth.
Now, the WSJ's, WaPo's, NYT's, Economist's audiences could - but they haven't been given the tools to connect and create.
This begs the bigger, more crucial question: why not?
I think the answer's simple: VCs. VCs are great are crafting value propositions for enterprise software and semiconductors. They understand those industries very, very well.
But they distinctly don't understand media and culture, and so they can't craft value propositions (or build the right relationships, etc) for their portfolio companies - and that's when they invest in the right companies to begin with.
Largely, this is because the things that make VCs good at crafting value props for software and chips - alliances, the stack, efficiency, building out ops, helping slowly win big customers, investing a great deal in a small number of plays, etc - destroy more value than they create for plays at the intersection of media, www, and consumer markets.
Hence, the impasse. The senior guys in the community that should be understanding where 2.0 plays fit in the emerging value chain, and then actively seeding that concept with potential acquirers aren't, or won't - or maybe, just possibly, can't
I think they need new blood, new ideas, new thinking, to build that understanding. What's stopping them? VC is clubby. Like any other club, they exist to sustain asymmetries (in information, resource, capital, etc).
Now, that's not inherently bad. Asymmetries, too, can be efficient.
But I think it's becoming increasingly clear that, today, VCs are deeply resistant to change. If you factor in the pre-crash, it's taking two cycles - 14 years - to change VC. That is an incredibly
long time - especially for an industry that's supposed to be about innovation!
Three simple examples.
Ask yourself: is it really efficient for VC to have so little turnover compared to any other industry?
How is it possible that while every other industry in the world has undergone wrenching change, VC looks almost exactly the same as it did 20 years ago?
Is it any coincidence that while the VC overhang (uninvested cash) piles up, the very definition of the term innovation is shifting to a class of players who are clearly much hungrier - like Ideo, Cheskin, Doblin, etc - and are busy redefining innovation on their own terms, as a design-driven discipline?
Now, I'm not trying to offend my VC readers and pals here - in fact, many insightful venture guys have said as much in the last few months (Joe Schoendorf last year, memorably). But let me be more honest than I perhaps should be: from my POV, as a strategy consultant at the intersection of exactly those spaces VCs are grappling with, the current state of VC is a full-on stall.
The failure to understand, craft and articulate 2.0 value propositions is just the latest example of this VC decay. VC must change organizationally and strategically - or the downward spiral is going to continue.
And that's why we've reached an impasse: because, just possibly, the real
chasm for 2.0 is exactly the set of guys that should be seeding, growing, nurturing, and building it.
The Rise of the Advisory Capitalists
An interesting discussion's been going on lately about the emerging group of folks who are more or less Advisory Capitalists, kicked off by Stowe Boyd.
Since I'm on this list of people, let me add my 2c.
It's funny - though my clients also include incumbents from industries like media, advertising, telecoms, CE, even FMCG, for the last few months, when people in SF ask me what I do (which is always the first thing people ask you in the US, but never anywhere else in the world), I say "I'm like a VC, only without the C".
Which, uhhh, generally leaves people more confused than before, but does point to the rise of this semi-new niche of people, which, I guess, until now, has lacked a label.
Yes, I can certainly see the argument that ACs might have a reason for existence in a flat world - cheap information, cheap coordination, you know the score.
But I think that the rise of AC is solving a different problem: the VC competence trap.
Isn't AC what VCs should be doing? If not, what's their economic function? Simply to select investments, and then to leave advisory work to others? Isn't the fact that the expertise required to guide new ventures isn't separable from the capital required for them to create value the whole rationale for the existence of venture capital?
I think the rise of ACs is a temporary thing, which points to a deep, ongoing malaise in VC more than a real structural shift in financing of innovation (as I've been pointing out lately); namely, the fact that VCs are nearly as resistant to
change as Microsoft.
Sunday, February 26, 2006
The Market Maestro
Story of the most famous value investor in India.