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The Real Purpose of Startups

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We are in an era of planned obsolescence. Factories work feverishly to produce the latest hardware, with a human cost that we’ve inadvertently built in. And if you aren’t involved in a startup of some sort, then what are you doing with your life? The rewards seem within easy reach. Some are even investing in nothing—funding teams without a product in mind yet—in the slim chance it will actually become something. It’s the lottery for the technologically savvy—but if played right, whole industries can be redefined, and genuine value can be created for everyone.

Right now, many disruptive companies are just beginning their life. We look to startups because when corporations grow to a certain point, it’s hard for them to adapt to customers’ needs. With the Innovator’s Dilemma we find many established companies that reach the top of their game and then suddenly fall flat on their face; finding out the hard way that there is indeed a difference in drive for profit and growth versus creating value or meaning. They are unable to catch up with other companies that have embraced a market or technology that they never saw as profitable, and by proxy, a threat.

However, many startups pursue disruption and profit, only to find the same fate as their failed peers. Dave Kashen describes the process:

“In the startup world, thousands of entrepreneurs focus their ingenuity on finding ways to make millions of dollars. They look for market inefficiencies and focus on questions like: “Will consumers pay for this?” without asking “Will this make people’s lives meaningfully better?” It’s not that we shouldn’t try to make money, it’s just that money should be merely one of many factors we strive for, and it’s played far too central a role for far too long.”

Amy Hoy looks at the cost of burnout for those involved:

“Every fucking time you see somebody using glory to hagiographize young men & women who are doing something clearly stupid, you must ask:”

What is this raft of shit, and why are they trying to get me to paddle it?

“And make no mistake, bartering away your “one and only youth” working 100-hour weeks on a web site for the promise of a big fat carrot on the end of a stick 80 million lines long, dangled by a fat statesm–venture capitalist, who will make 3x or 10x or 100x more than you, in the vanishingly unlikely scenario that you “succeed”… is clearly stupid.”

With the explosion of aspirational “startup porn” like Pinterest and a continuous flow of new iThings, we have bought into the illusion—“artificially created demand”—that consuming products and rampant innovation is propelling us toward a better life. And creating digital wares is appealing because it seems like creating new jobs would be good for our economy—but digital landfills are problematic, too, with issues arising around archiving and longevity.

Even if there are young companies with meaningful intentions, not all investors are biting. They’re looking for ideas that fit existing trends, and they push for a quick exit via acquisition or further funding. Entrepreneur and investor Chris Dixon explains:

“The problem I encounter is that many of these “meaningful” startups have trouble raising money from VCs. An entrepreneur working on groundbreaking robot technology recently joked to me that he’d have an easier time raising money if his robots were virtual and existed only on Facebook.”

The truth is, we may well be in the largest slowdown of technological growth in human history. Economist Tyler Cowen calls this the “great stagnation.” Take our modern-day kitchen, for example. The 19th-century kitchen was built around a live fireplace, but then we rapidly benefited from electricity, water, and gas stoves. Then the past fifty years brought no major technological changes.

Silicon Valley investor and web browser inventor Marc Andreessen famously said, “Software is eating the world.” He thinks our economy is being revolutionized by computing; our most favored jobs are shifting from the industrial age to the information age:

“This is the great sweep of economic history. When the vast majority of the workforce was in agriculture, it was impossible to imagine what all those people would do if they didn’t have agricultural jobs. Then a hundred years later the vast majority of the workforce was in industrial jobs, and we were similarly blind: It was impossible to imagine what workers would do without those jobs.”

Even if Andreessen’s prediction is right, our current technological trajectory is still far from perfect. From Cowen’s perspective, personal computing hasn’t broadly improved society’s standard of living. He says we’ve “plucked all the low-hanging fruit.” Today, innovation takes more effort. Some of the most successful technology companies haven’t done much for job growth: “Take the ubiquitous iPod. It’s created less than 14,000 jobs in the U.S., Internet giant Google, 20,000 employees, Twitter, a mere 300” (Author’s note: Cowen’s figures have obviously changed since that quote.) In fact, the net creation rate of jobs has been on the decline since the 1970’s.

We’re now faced with consumption-biased technological change: “technology that benefits mainly the highly skilled workers, but hurts the less-skilled, average person.” For those in information jobs, it’s an exciting time. Growth and jobs are plentiful. For those outside, though, their quality of life isn’t near as great, and it hasn’t improved much over the past few decades. The median income has stagnated, we’re mainly adding “McJobs” to the economy, and close to half of US is in a very fragile financial state—which is a “visible symptom of Great Depression–era level inequality.” We’re also seeing a “dumbification” of society, where media misinforms and more people seem to be aware of what’s happening on reality TV, than in reality.

Yet, exciting new products are released every day that promise to improve our lives. Are they fulfilling that promise? Are we? We make outlandish claims—like one brand of chewing gum will help you get a kiss from a beautiful woman—in order to differentiate. Umair Haque says this is an industrial age model of product creation: “We have to move from differentiation, to actually making a difference—to people, communities, and societies. Mattering in human terms. I think the key words, when it comes to making a difference, are: human potential.”

In short, if software is truly eating the world, then it needs to be more meaningful.

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About the Author

This is article is written by Francisco Inchauste from his essay found in the second issue of Distance, a nice, quarterly publication full of essays on design and technology. If you enjoy thoughtful and smart writing, and being a part of a meaningful conversation, then get it here.

Callum Connects

Agnes Yee, Legal & Compliance Recruiter of Space Executive

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Agnes Yee started Space Executive in Singapore, which is a hub for businesses in some of the world’s fastest growing economies.

What’s your story?
After graduation, I joined a design media company as a Business Development Executive, during the era when ‘reading a magazine online’ was unheard of. I believe that laid the foundation for being unfazed by rejections.

I fell into recruitment pre-GFC and rode the highs and lows in the early years. A decade later, I decided to set up my own recruitment company, partly because I could. I’m acutely aware of the face that being an Asian female in Singapore is sometimes a privilege, and that many women in the world are living a very different existence.
Thereafter, we joined Space Executive as part of a merger. I am currently the Partner of Space Executive, a recruitment company focused specialist disciplines, including Legal, Finance, Digital, Sales and Marketing and Change. We also run Space Ventures, a venture capital business, which invests in seed and pre-series A businesses.

What excites you most about your industry?
On a daily basis, we’re influencing how one spends a third of their day. It is interesting how the Internet has transformed the industry, and I’m excited to see how we can harness technology to bring us to the next phase of this business.

The VC is an extension of applying our skills and experience in reading people. We very much invest in the people as much as the idea. Being a native Singaporean, it’s been exhilarating watching Southeast Asia becoming a hotbed of ideas; and young entrepreneurs simply daring to dream.

What’s your connection to Asia?
I’m a born and bred Singaporean. I love that I speak both English and Mandarin, grew up playing with Indian friends and eating Malay food.

Favourite city in Asia for business and why?
Singapore for the low barriers of entry to set up a business, but has to be China (and Hong Kong) for their hunger and constant innovation.

What’s the best piece of advice you ever received?
青春不要留白 which translates to ‘Don’t waste your youth.’

Who inspires you?
Anyone who has gone against the grain.

What have you just learnt recently that blew you away?
It wasn’t recent but reading the article on https://waitbutwhy.com/2015/12/the-tail-end.html never fails to blow my mind how little time we have left. Charting our lives in weeks, and realising I only have enough time left to enjoy 60 Christmas turkeys, read 300 books (all if I’m lucky); and mostly, I’m left with the last 5% of the time that I spend in-person with my parents.

If you had your time again, what would you do differently?
I’m cognisant that every decision I made in life has brought me to where I am today, and I wouldn’t change one thing. But I’d really like to have had more time to travel.

How do you unwind?
Exercise and wine.

Favourite Asian destination for relaxation? Why?
Trekking any mountain in Asia. It brings us back to the most basic. To overcome elements of nature and our own mind.

Everyone in business should read this book:
Start with Why, Simon Sinek

Shameless plug for your business:
Space Executive started in Singapore, a hub for businesses in some of the world’s fastest growing economies. We assist organisations in accessing a targeted and specialised, and often times transient talent pool.

Out of Singapore, we have recruited across 14 countries; and have embarked on our global expansion plans with offices in Hong Kong and London this year, and US, Japan and Europe in the following years.

Space Ventures provides funding, management and financial guidance to young businesses with original ideas. We have invested in peer to peer lending platforms, credit scoring, social media education, and other start-ups spanning diverse industries. We are always interested in hearing more about new ideas.

How can people connect with you?
https://www.linkedin.com/in/agnesyee/

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started, built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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Callum Connects

Chrystie Dao-Szabo, Founder of iPayMy

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Chrystie Dao-Szabo founded iPaymy for Business – a secure and easy to use
platform enabling SMEs to pay rent, salaries, invoices, and even corporate tax using the credit cards they already have in their wallet today.

What’s your story?
I’m Chrystie Dao-Szabo, and I’ve worked as an international banker for over 22 years. During that time, I travelled through Asia, Australia and Europe, and everywhere I saw how my clients struggled with managing their finances and keeping cash around.

I wanted to use my experience to help them, but I also knew the solution they needed didn’t exist yet. This pushed me to give up on my secure career, and instead look into the innovative world of FinTech for an answer.

This is how I founded iPaymy – at its launch, a platform to help consumers pay their monthly expenses using their credit cards. We’ve grown a lot since, and today, iPaymy for Business is a platform that allows business owners to use their credit cards to pay for rent, salaries, invoices and taxes, freeing up their cash for business-critical operations.

What excites you most about your industry?
What excites me most about FinTech is it’s culture of constant disruption, thanks to cool and innovative products and services coming out every day.

What’s your connection to Asia?
I was born in Vietnam, grew up in Australia and worked in Asia, Europe and Australia. Being raised by traditional Vietnamese parents meant that deep down I was still an Asian at heart, so I have a strong connection with the region.

Favourite city in Asia for business and why?
Singapore of course. It’s easy to do business, English is the main language, and the infrastructures like public transportation are great. Also, the government supports local innovation in multiple ways, like giving grants for SMEs and FinTechs.

What’s the best piece of advice you ever received?
Keep giving, and one day you will receive.

Who inspires you?
My parents. My father had a successful business in Vietnam just before the fall of Saigon in 1975. After the war, my father was sent to a re-education camp for three years, which meant my mum had to bring up two young kids – a 3-year-old, me and my 4-year old brother on her own.

In 1980, we all fled Vietnam on a boat and arrived in Sydney, Australia via refugee camps in Indonesia and Singapore. There, my parents had to start over with nothing to their names and only AUD 50 given to them by the Australian government.
They went on to build several businesses in Australia!

What have you just learnt recently that blew you away?
The number of young and smart people who have carved out successful careers by founding their own startups (or joining really cool ones). When I was starting out my career, doing any of these was not a viable option; it was either working for an accounting firm, an insurance company or a bank.

If you had your time again, what would you do differently?
If I were starting out my career now, I would choose the path of joining a startup as you get to learn so much about running a business and how to assemble a winning team.

How do you unwind?
I like travelling to a beach or a resort destination and just relaxing by the pool or beach. I also like to unwind after work with a glass of champagne or wine, and a bowl of truffle fries.

Favourite Asian destination for relaxation? Why?
Thailand. I love the people and the spicy Thai food.

Everyone in business should read this book:
The E-Myth. It’s a book series that dismantles common myths about entrepreneurship in different industries.

Shameless plug for your business:
With iPaymy for Business, SMEs can pay rent, salaries, invoices, and even corporate tax using the credit cards they already have in their wallet today. SMEs love iPaymy because it works like a credit card, but pays like cash.

iPaymy’s secure and easy to use platform reliably delivers payments to vendors while freeing up cash and providing access to interest free credit. Forget the delays and aggravations that come with traditional SME financing options. Schedule recurring payments, manage invoices, set payment reminders, and monitor payment status all from one dashboard.

It’s never been easier for SMEs to meet monthly payment obligations while keeping cash available to fuel growth, bridge receivable gaps, and make immediate investment in the supplies, services, and expertise needed to drive a growing business forward.

How can people connect with you?
You can find me on LinkedIn or contact me by email.
My LinkedIn: https://www.linkedin.com/in/chrystiedaoszabo/
My email: [email protected]

Twitter handle?
https://twitter.com/ceedeees

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started, built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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