Let’s make a deal

Deal making is on the up and up. Everywhere I turn I hear people talking about the deals they are doing. Everyone seems to be doing a bit of this and a bit of that. I have never understood what this really means, but whatever it is, it seems to be heating up.

I was reading in a financial magazine recently that of the 1000 new dollar-based billionaires that were created in the past year, over half of them were in the hedge fund business. Now, I don’t even know what a hedge fund really is, but I do know it has something to do with managing money; from what I understand, other people’s money. And lots of it.

The message that this kind of publicity puts out to the youth, who all want to get rich quick, is that there is big cash to be made in the “money business”. So, if hedge fund folk become the new role models and the masses are inspired to become money managers then I have important question to ask: who is doing all the real work? If everyone starts becoming money managers then who is creating the initial wealth that then goes on to get managed?

In this world of high finance and fast deal making it seems that once again the fundamentals are being left aside. This can only mean one thing, a correction is coming. But, if you listen to the financial experts, no one seems to think that it is anytime soon. When the last bubble burst we never considered the influence of the new emerging power houses, China, India and Russia. There is so much money floating around out there for investment that it seems like the party is never going to end.

I remember when I was active at Internet Solutions. The financial guys spoke of financial year end, of profits, of performance, etc. These days, when it comes to all this deal making, I don’t hear people speaking about profits or growth or financial year end pressures. The other day I asked someone if they had a good financial year end, and they replied by saying that they had a good year. You see, profits didn’t seem to come into it. I didn’t hear any talk of a good year, just a good time. Yup, it seems that the party if still going strong. So, let’s make a deal !

Posted by Ronnie Apteker

Viva Vottle

By Ronnie Apteker

We have had a record day on Vottle today, and there's still a few hours left. The traffic is higher than ever. We launched a new look and feel home page last night with some very powerful new functionality to do with regions/locations.

Our vision with Vottle all along was to be able to create a platform that lets you view two communities side by side so that you can see and compare the cost of living, what's popular, trends, etc. With the new changes we just rolled out we are a big step closer to this objective.

One million cometh

by Ronnie Apteker

We are very excited here in Vottle land. The traffic on this cool site (we think it's very very cool) is now approaching a million page impressions a month.

Check the big V this coming week - some very cool new things are happening !!!

Alchemy

by Ronnie Apteker

Does one have to invest big to make it big? Perhaps if you are playing blackjack, but investing is not the same as gambling. Yes, luck is always an important factor (some would argue the most important) but there is more to it than that. Also, where, or rather, what we invest in is not always that obvious.

There is no correlation between the effort/time you put into something and the rewards (financially speaking) that you may possible get out. And also, there is no correlation between the money you invest in something and what the possible returns could be. Yes, if you were investing in a shopping mall then the numbers would be rather large I would imagine. But, intellectual property, on the other hand, does not necessarily require a big financial injection.

Consider a musician or a film maker, or someone sitting at home writing software on their laptop. They could be even be sitting on a beach somewhere doing their thing. Yes, consider this for a moment. This is really a function of time, effort and talent, and of course, inspiration. Ultimately, it is a function of a person, or a group of people. And that’s what you are investing in, people.

A hard-working, enthusiastic, talented person can hide away behind their computer and the end result could be magic. The next big thing could be developed in someone’s bedroom and this is what is happening in the world today. When it comes to investing, look towards someone’s character. Remember, personality opens doors, but character keeps them open. And, when exploring your opportunities out there, consider who sees themselves as an Alchemist.

Some people spend time to save money, others spend money to save time

by Ronnie Apteker

Time is more valuable than anything. I know, I am stating the obvious but when it comes to time I am becoming more and more selective about where I spend it. Perhaps it was turning 40 this year that triggered this, or perhaps I am just too busy these days and I am desperate not to waste any time. And perhaps I just need a break. Hang on, do I have time for a holiday? Ok, now I am wasting your time. Let’s move on.

I have invested a lot of time and resources into various computer projects and movie ventures this past year. And I am always intrigued when I hear film makers talk about the risks they are taking. Let’s see, I work from sunrise to sunset 7 days a week, and I put in the money and then, I keep hearing about the risk that everyone is taking. What risk?

Now I am not trying to trivialize anyone’s role or contribution, but I do battle to understand how a 21 year old university graduate can say that they are taking a risk by making a film. If the film doesn’t work (which is the case most of the time) then I lose some money and life goes on. What risk did the film maker take? I, on the other hand, am not straight out of university, and I have opportunities thrown at me each week. When we embark on a new project that means I have to turn these opportunities away. There is a cost to this. But, I am often told how we are all sharing the risk. It almost sounds like we are all in it together as equal partners.

Let’s assume for this discussion that we have indeed split the costs. Let’s assume that we have all made a financial investment. Yes, then we are all at risk But in terms of the time factor, how does one put a value on the time they have invested? One simple answer could be that if you are offered a job opportunity that pays, say, a million dollars a year, and you turn it down, then your cost for that year could be said to be a million dollars. But if you were unemployed, straight out of university, and you spend a year on a new project, then what opportunity costs have you foregone?

My conclusion is that it is most often very difficult for people to understand the true costs of doing business. People in different situations with different track records cannot value their time the same. Yes, an hour of my day is the same as an hour of your day. But, if I had the potential to earn, say, a million dollars an hour, and I took an hour off, then that million dollars would have to be considered. And, if another person was earning say, 100 dollars an hour, and they took an hour off, then the financial component here is quite different. And this is the point I am trying to make. Yes, I know this requires a great deal of sensitivity as people get very defensive when you imply that someone’s time may be more valuable than yours, but this is a very real consideration. The value of human capital is not an easy thing to understand and we all tend to sell ourselves short.

I once heard a saying which said that some people spend time to save money while others spend money to save time. I have been very fortunate in my life to have been financially independent from a young age. I always look to spend money to save time because I really battle to find the time to process all the opportunities that exist around me.

I have people telling me every other week about how they don’t like to have their time wasted and yet it is often these same people that will then go and get stuck in traffic for hours going to pick up their dry cleaning. This makes no sense to me. I would rather pay someone to collect my dry cleaning because that time that I save is more valuable to me. But, I guess one needs to understand the value of their own human capital or potential and then one would not be so quick to voluntarily get stuck in traffic.

Now consider those who travel business class. I do sometimes, but not too often. I would rather give the money to those who need it. Business class, like many other privileges, is not about saving time. We all arrive at our destination together, at the same time. Business class is about comfort and status. It is about luxury and relaxation. This is not to be mistaken with saving time. It is always intriguing to me that the same people who allow themselves to get stuck in traffic for hours also put up a big fuss when it comes to air travel.

Today’s piece was just something I often battle to put in words. I hope I have sparked some food for thought. As someone who is trying to lead people, I often have to challenge people’s thoughts and ideas. Yes, time is indeed the most valuable thing we have, and when people are aligned it certainly saves a lot of hours.

The death of the traditional cellphone operator

by Greg de Chasteauneuf

Today you buy a cellphone, insert a SIM Card and you are locked in to only make calls with that specific Mobile Network Operator (MNO). You may have the ability to roam between all available MNO's in your area, but you are still stuck to high call charges on those GSM networks. As the handsets evolve they begin to offer more advanced data capabilities (3G, Wifi and soon 802.16e - Wimax) the voice capabilities of the phone really just becomes another application on an intelligent device. This evolution starts to separate the applications on a phone to the underlying data bearer or carrier. The mobile phone is evolving into a device very similar to the PC, where the hardware and software are independent from each other and the voice provider you choice is merely an application or configuration on your mobile device.

Traditionally, the phone manufactures would embed a basic operating system, which would lock out third party developers from tapping into a mobile phone's resources. As mobile phones are becoming more and more intelligent and the mobile phone manufacturers are using operating system which allow programmers to develop applications for them, this is allowing startups such as Fring.com(*), Yeigo.com and Truphone.com (to name a few) to develop applications which uses the phones hardware (such as the microphone, speaker and data bearer components) to make voice calls bypassing the traditional 'voice' GSM functionality. This is a huge leap forward and it challenges the voice providers; for the first time we now have access to a previously "locked down" handset. The user now has the ability to decide which voice provider they would like to use - this could be as simple as a pure price decision or access to value added features such as presence or Internet Messaging. This empowers the consumer to decide who they want to use as a VOIP provider. This maybe the actual MNO who is supplying their customer with data services but could also be an Internet Service Provider (ISP).

All this leads to a few interesting long-term changes in the mobile voice space:
1) The traditional MNO will continue to operate but might just become a data carrier
2) At some point calls will no longer be metered using time as a unit of charge but rather bytes
3) VOIP providers can offer voice services to a previously "locked down" customer
4) 2008 will see the introduction of Wimax (802.16e) handsets in the market; this means that Wimax providers will be able to offer IP carrier services to a handset for voice and data services
5) Providers who have access to Wimax (802.16e) spectrum can offer voice and data services seamlessly
6) Coverage is key in the voice space; new providers will need extensive Wimax or even Wifi coverage. Rooftop real-estate is become an even more lucrative business.

What this ultimately means is that prices will drop and value added features will flourish (goes without saying). The cost of operating a VOIP / Wimax network is substantially less than operating a traditional GSM/3G network. Besides cheaper costs per Mhz on the local-loop, new-age mobile voice providers will leverage off cheaper technologies such as Metro Ethernet back-hall, IP soft-switches, IP-IP interconnects (no expensive ss7), more efficient multiplexing algorithms, and enhanced features at a fraction of the traditional cost.

* In Fring's latest versions of the software the company have embedded a SIP (Session Initiation Protocol) stack, which in essence allows its users to configure any VOIP provider they choose. Not only can you make Skype calls via Fring you can also use your selected VOIP provider to make calls directly from the Fring application to any fixed or mobile number globally.

Of mice and menus

by Ronnie Apteker and Greg de Chasteauneuf

The traffic on Vottle this past month has been fantastic. We are very excited about our trajectory. We had, until the start of this month, a modest Google AdWords campaign in place. And, at the start of October we turned up the juice and we have been overwhelmed at how the traffic has intensified.

It is interesting to note that the biggest referral we get from Google is around the area of “Jobs”. In my view, this is suggesting, that here in South Africa, there is still a lot of opportunity online in the area of recruitment. But it is not just in our “Jobs” category that we have seen a marked increase, but also, in the number of daily registrations and the number of daily postings.

We also rolled out a new motorbike feed this past week which is part of our aggregation journey. Between Jobs, Property and Motor Vehicles, our Vottle classifieds service is certainly finding its grove; or; as the new speak would say, we are gaining some traction.

This past month’s education with Google is something everyone should take note of. Unless you know this already, because, for me, I am still amazed. It is more clear to me now why Google is the world’s largest media company, and the Internet icon of this day and age. They pioneered the pay-per-click methodology and the evidence of its success is something we are witnessing this past month on Vottle.

Its also interesting to see our ranking on Alexa climbing week on week. Alexa computes traffic rankings (combined measure of page views and users) by analyzing the Web usage of millions of Alexa Toolbar users. Here at Vottle we like to use Alexa as a barometer on how well we are doing. Currently, we are sitting in 504th position here in good old SA. Our goal is to get into the top 100 Alexa ranked sites in South Africa in the next few months.

Make sure to check Vottle again around this time next week – there are some very cool new features that are coming your way.