Saturday, June 21, 2008

Follow the Big Waves, but Think Contrarian

We are now in the midst of the Web 2.0 craze, and every other entrepreneur I meet these days is trying to start a new Social networking site. Never mind that even the most talked about ones -- Facebook, Youtube, Second Life, Twitter -- have not turned profitable yet.

I do believe that Web2.0 and Social Networking will become big, indeed much, much bigger than what we can even imagine today. But I very much agree with the advice offered by Peter Thiel, the ex-CEO of Paypal and currently founder and president of Clarium Capital Management (which was the early investor in Facebook), when he spoke at the recent TIECON 2008 that I was fortunate to be able to attend. His advice -- yes, follow the big waves, but think contrarian: meaning, don't do what everyone is thinking of doing, or can easily think of doing. Just as anyone could think of starting a pet dog food portal in the Web 1.0 days, most of the social networking sites I get pitched these days have the same feel -- it's too obvious, so even if it works, there'll be many others around the world who have, or will have, started the same thing.

My own contrarian thinking is that, while everyone sees the young and tech savvy generation as the natural targets for Web2.0 -- after all, most people my generation are considered lost cause as we "just don't get it" -- some of the most significant value creation will be found in applying the power of social networking to the elderly generation today. I think it is a fallacy that, just because many of the people in that generation (and I'm trending towards that soon...) are IT illiterate, they won't be able to benefit from the social networking power of the internet.

One example from Japan that I like very much is the thermo-flask maker who adds an internet connection to the flask. The old parent living alone in their rural home in Japan start their day pouring hot water from the flask to make tea. If for some reason the flask is not activated, the flask is programmed to send an alert to their son working in Tokyo, who can then call back to find out if there is anything unusual. We are obviously not even scratching the full power of social networking and user-generated content in this case, but you get the idea.

My contrarian bet is on the start-up that exploits the intersection of the two exploding sets -- social networking and aging population -- while others are mostly looking at the young and cool. Send me your business plan if you have one sitting in this sweet spot!

In arriving at this contrarian bet I'm connecting two different dots -- the fact that I'm part of the aging population myself, becoming increasingly aware of the challenges I will face soon as an elderly, and the fact that my involvement in NUS Entrepreneurship Centre and in angel investing keep me constantly exposed to new web2.0 ideas; in particular, the NUS Overseas College (NOC) students that I come into contact with often keep me abreast with the latest developments in Web2.0 from Silicon Valley, China as well as right here in Singapore. One such group of NOC returnee students in Singapore, who called themselves the E27, is now running an incubator for interactive digital media (IDM) for my centre (Garag3). I would encourage you to visit their E27 website to find out the latest happenings in the web2.0 community in Singapore.


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