Entrepreneurship is about the Mix and Match

St. Louis was wet and cold except for the last day we were there. It was a nice walk to the Knight Center (where we stayed which was equipped with accommodation for executive education) to the Skandalaris Center – the center of entrepreneurship, Washington University at St. Louis.

We were given a presentation by its Center’s head, Ken Harrington. During the presentation I found out something new. Here it is…Entrepreneurship is driven by innovation which in turn is driven by the Intersection of cultures, societies, industries etc.

Hmm..Intersection ? What is that??

What Ken or the Skandalaris Center is saying is that innovation will be developed by the merger (intersections) or fusion of ideas that may originate in other domains or industries.

Well here are a few examples: -

· Google = Merger of Search engine (ICT) Technology + Online Advertising = USD141 billion
· iPod and iTunes = Hardware + Online technology + Music/ Entertainment industry + its cool design = more then USD1 billion
· Myspace = Online technology + Sociology (the need to interact) = USD580 million.

Get what I am saying??

Process to Innovation is not enough

Ken mentioned that the normal process of innovation i.e. taking the idea to market that involves Business Plan is not enough but the entrepreneur must also do the following:-

1. Increase his or her network intersections in other areas because innovation relies on this. So the idea that entrepreneurship should be limited and taught in a vertical or specific group of certain students is wrong.
2. Understand these intersections
3. Know how to identify the opportunities in these intersections.
4. Use the tools needed (and this needs to be learned) to capture the opportunities in these intersections.

In fact, I am writing this Blog at the Web2.0 Conference in San Francisco is all about Internet and Social networks (sociology). In 2 years Web2.0 grew at 622%.

USA VC vs Malaysian VC

Today in St. Louis, I had the opportunity of meeting Tom Melzer. Tom is a senior financial figure in the States, being served in the Federal Reserve under 3 Presidents. In my discussion with him, I can summarize the drastic differences between an American VC and a Malaysian VC...here are the main ones.

(i) American VC tend to be very focus in particular sector (ICT only or Biotech only or Medical Devices only etc.) , Malaysian VCs will invest in many sectors.

(ii) Because of their focus, the American VC has the depth and can put in substantial business building expertise

(iii) Both country VCs will tend to invest in later stages rather then Idea and Seed.

(iv) 8% dividend rate for its pref shares (non -cumulative) for US VCs compared to Malaysian VC rate of 10% - 25% cumulative dividend pref shares.

(v) The insurance, pension and large funds tend to invest in the VC industry (about 5-10% of their funds). In Malaysia most funds come from the Government.

(vi) American Private Investors in VC funds tend to have direct tax credit by expensing out the mgt and operational fee of the VC management company. Investment premium tax allowance is at 15% instead of the 30% rate for personal income tax.

Tom did highlight that VCs tend to invest in later stages and that there are many aspects of the eco-system that gets to work before a VC invests into a company....

(i) A strong incubation to assist in the physical and soft infra of new and later stage companies.
(ii) Strong demand for a particular sector or specialization e.g. the medical faculty in Washington University, St. Louis has a large R&D budget that provides an economic stimulus in commercialization.
(iii) Networking by the local business councils bringing together funders, entrepreneurs, university and other relevant specialists.
(iv) Grants and angel funds to provide funding in the early stages of the venture. These are funders prior to the VC investment.

The Culture of Failures

In our new book, SKALI LAGI, I mentioned that Entrepreneurship is about failures and not about successes. I expanded that entrepreneurship is about getting up when ever you fail.

For entrepreneurship to strive, a community or country needs to accept and (in fact) celebrate failures.

I think the main reason to the United States success in entrepreneurship, is its tolerance to failures. It is this tolerance that has provided its propensity for risk.

Today I met with Dr. Raul Perez, whose father immigrated from Cuba in the 1960s after the Communist took over. Dr. Raul's father came to the States without speaking English and (at that time) medicine in Cuba was behind to the States.

Well, Dr. Raul's father survived and did very well. He concluded this is the land of second chances and of new opportunities.

The United States for many people are a new beginning after failures or being a social outcast in there own countries. So when a failure occurs or someone has had some failures, they do not take this against a person.

Can Malaysia celebrate failures and learn from it ? Maybe and like the Kauffman foundation said it takes some small successes first and to show everyone that failures will lead to successes.

Kansas City and The Kuaffman Foundation

Kansas City was wet and cold and when we arrived at the airport I noticed the Tornado shelter. This strongly reminded me that we are in the Mid West of USA.


My main reason in Kansas City is to Visit the Kauffman Foundation, probably one of the most advanced institution in entrepreneurship.

Why should the Kauffman Foundation care about entrepreneurship in Malaysia ??


The Foundation would interview us (Olga - Czech Fellow and I) on camera and the above was one of the key questions.


It was a good question...my answer was better understanding between East and West and world peace.


Entrepreneurship is about economic growth and prosperity for a community. The current wars and global conflicts are not about a conflict of ideology or religion but of economic concerns. Entrepreneurship allows a community to prosper and avoid conflicts.


Understanding has been spread for many centuries via commerce and not by the sword.

Therefore the new ambassadors to promote understanding in the globalized world are not politicians but entrepreneurs.


Helping economic minorities


One of the programs by the Kauffman foundation was to assist economic minorities, especially the Hispanic and African American communities.


This is similar to Malaysia where there is a real need to assist the Malays, whom are a economic minority, to have an equal share of the Malaysian economic pie.


Similar to the Malays, the Hispanic and African American communities will need affirmative action to assist them out of a economic misfortune because the capitalist system will not.

In assisting these communities substantial emphasis is on education and training; and not to spoon feed.


Psychology is the stumbling block


Is a community's psyche a stumbling block? Yes because it is an impediment to growth and sometimes there are deep rooted fallacies and beliefs that do not help a community to grow.


But such thinking can change. Malaysia changed its people from a farming/ mining industry to manufacturing; and now to turn Malaysia into a Knowledge economy.


From the challenges I hear at the Foundation, I realize that it will be the most challenging change, my community will embark.


The answer is to make visible small successes to show that long time fallacy and thinking is wrong. This will slowly change people's thinking and instill confidence in the community.


Coaching as part of education and training


Coaching is one of the main pillars to assist these new entrepreneurs. First coaches are matched to the entrepreneurs by skill sets that the venture require and not the industry they are in. A common mistake many Incubators make (this was also confirmed during the NBIA Conference in Seattle).


Coaching is a structured and process driven activity. First with matching the mentor to the entrepreneur, then to conduct an assessment of the entrepreneur's venture together with detail analysis. Then a development plan is made and agreed between the entrepreneur, the Foundation and the mentor.

In the analysis of the entrepreneur's venture, the basics will apply to the assessment. Key basic questions are asked: -

1. Does the business concept make sense. Does it really satisfy a demand ?
2. How do you make money from the business idea ? i.e. Profits.

These basic questions need to be answered first before the development plan (like a business plan) is formulated.

I know..the above seems basic but you will be surprised that even many Fortune 500 companies don't get this right.

However, the main challenge the Coaches highlighted is the basic understanding by the entrepreneurs of key revenue and cash flow mechanisms i.e. the basics.

Hey Look..It's Janet Jackson

We arrived to sunny LA during Good Friday and Easter Sunday, which gave us some time to explore Santa Monica, Orange County and Hollywood.



During the Hollywood tour we saw Janet Jackson having lunch with her father.

She noticed we were around and hid her face (as if it would stop us snapping our cameras)

The NBIA Conference in Seattle

Besides from the excellent food by my fellow Malaysians in Seattle, I was also there to work and attend the National Business Incubator Association (NBIA) Annual Conference

(this is very much for the Eisenhower Foundation staff to read just to show them that I am working :-))

Some of the lectures were pretty basic but there was some that was very interesting.

One of these lectures, was about the 25 mistakes start up companies make. A very senior and experience Incubator was presenting the 25 mistakes. After the presentation it dawned on me that none was about the Idea but more on execution. When asked, he admits that you can have the most brilliant idea but it is execution that matters most.

So my message to the Venture Capitalist at home is that the idea is not everything but the execution and the people behind the idea.

The Global Malay

Met Azman from MTDC (our landlord) and Dr. Faridah (UPM) who also attended the NBIA Conference. They been around for 3 days ago and been eating Malaysian food everynight. They met a few Malaysians in Seattle.

I had the opportunity to have dinner with them and it was a really good dinner.

Md. Ali, Ana, Puan Zaireen, Me, Azman, Cik Lah and Fazillah

Met a few other Malays the next day and I must say they are doing well. A throws out the argument that many Malays cant survive without the Government to support them.





Haji Nor. A fellow Kelantanese. Stayed back from his studies to capture opportunities in the US.









These Malays tend to have similar characteristics, they had left Malaysian after the Asian Currency crisis in 1998 . They were effected tremendously by the crisis and had come to the States to start fresh. They are educated, intelligent and determined but they left Malaysia because we are society that do not accept failures.

There failures is a big lost to our country. It was a bigger lost when these Malays leaves our country because they represent Intellectual assets that is needed for our future.

Leo, their pet is high tech. He has a chip embedded inside him to identify his ownership. Mandatory for all pets in Seattle.

Goodbye Philly and Hello Seattle

Philly was very interesting and educational. Before i left, we managed to see the famous steps of the Rocky movie and see a jazz show at the Art Museum.

The Rocky statue

Jazz music in the museum. Good way to bring the public to exhibits.

Hello Seattle...

Arrived in Seattle on Saturday night with Fatin (Saudi Arabia) and Khash (Mongolia). The National Business Incubator Association (NBIA) Conference will start on Monday, which gives me some time to explore Seattle.

View from my hotel room overlooking the Bay.

The Market at Seattle

A cat shelter volunteer with his favourite cat to raise funds for the Cat Shelter.

Interesting poster of the WWII time period warning of Nazis spies in the US. Found this at one of the shops at the market.

The Convention Center in Seattle

The EMP (Experience Music Project) building. It has the most equipped Science Fiction museum withe props from most of the Science Fi movies.

The Space Needle from the Monorail.

We the People....

Or as Rafael (Philippines fellow) would say "We the fellows..."

My visit to the Constitution Museum was very exciting. The museum had an excellent opening with a live actor narrating over some screenshots and movies on the founding of the US Constitution.

The exhibits that followed was also very well organized and structured to show how the US has evolved.

As I contemplate after the museum, I realize that the US is not perfect (for example slavery, no centralized government at the start of independence) and like many nations it is changing and trying to adapt to both its internal and external challenges.

However, what the US has (and with my admiration) is a system that allows it to change.












Me with the statue of General Washington




With Benjamin Franklin statue











The Liberty Bell

A picture says a thousand words

Another lecture was by Bob Halperin on Change. One of the exercise was to pick a picture which best describes what we think of the US. Here are some, including mine, which I felt had some good descriptions.




This is the picture I picked - The hand print. To me the US represent individualism and the pursuit to be someone better, a Land of Opportunity. But individualism is represented by many communities seen as some lighter and darker shades of the print. While the scars and the cracks in the past has really shaped and changed what "Individualism" is in the US.

On the other side of the same coin, the hand print also represent US aggressiveness which tend to label what should be and interpreted by what Americans see and want...overpowering and overshadowing other beliefs and interpretations.











Shirlene's (Singapore fellow) picture which represents the freedom of the kite to aim as high as the sky. Her interpretation of the US.
















Marcelo's wife interpretation of the US - Dignified, honest and friendly. But be careful as she warned..."this dog can turn around and bite you".

Not Enough !!

One of the seminars, during my fellowship was about the US economy. A repesentative from the Bank of America said that the US economy's growth cannot be supported by the current workforce and suggested that immigration to be more open to allow labor to be imported.

However, as I explore the United State further, I can see in the papers and the Television, there is a large majority that wants to stop immigration into the US.

It is not obvious who will win, but this country is built on immigrants. That was how the country was fueled and the main reason for its independence. Will the US stop now ? Will the US stop its immigration policy which has been a historical foundation of its expansion.

Charitable USA

The civic society or charities in the USA is whopping USD1 trillion a year industry. Giving money to the charities, the arts and other societies is a big thing in the US. This includes donations to political parties. Obama just raised USD25 million in 3 months for this campaign, including USD 7 million coming from individuals via the Internet.

All in all, individuals and families contribute up to USD200 million annually.

After hearing the numbers from the Pew Charitable Trust, I could understand how they can have such an expensive office with a breath taking view of Philadelphia (see picture)

On the volunteer side, many corporations get their staff to volunteer in such charities. Why ?



A study had some findings to share:-

• 51% of mid and upper managment learned how to manage in such scarce resources


• 49% said they utilized the art cultuer as an entertainment value for friends and family


• 74% said of volunteers felt good by giving back to the community.


• Increase in leadership, team managment and networking among the volunteers.

It was indeed an intresting presentation. A past USA fellow who works for the state education board said that she utilizes such charities to overcome certain administrative hurdles.

However, eventhough a lot has been given there is still many schools without proper teachers and faciliaties.

Maybe they should save the USD240k a minute they are spending on Iraq to save their schools.

Instead of Bullets invest in Books.

The Changing face of American Culture

The first seminar of my program in Philadelphia was by Dr. Weaver (seen in picture) who presented his paper on the American Culture.

It was an indeed an interesting topic. Dr. Weaver views may have been very similar to my views on matters of how the World perceives American values and cultures. However, I think that I have not really explored views that counter to Dr. Weaver’s stand.

Nevertheless, the information on US history and American psyche in Dr. Weaver’s paper was very beneficial. I guess to understand the US you must first understand its history.

The Many faces of the American Culture

There is probably no single theme of the American culture but a formation of many different cultures which has strongly represented its current face to the outside world.

The US of A was started by the influx of mainly North European immigrants. At that time these immigrants were the outcast and religious outcast of Europe. They came to the States to search for a new beginning and, of course, new opportunities.

Self Destiny and Risk taking well rooted in American culture

The US was founded by immigrants whom had a strong sense of self destiny. They had left their families and homes for a new hope in the “New World”. Of course, to make such a decision a community must have a strong belief in risk taking.

For example, as described by Dr. Weaver, for anyone in US to succeed they must first fail and as such, someone that has not failed is in fact looked down by the American society. Failure to them is good. This is of course very contrary to where I come from. Here, Dr. Weaver highlighted that the greatest President the US ever had was Abraham Lincoln whom had various failures before he became President.

Andrew Carnegie was another example, which is a model of an American entrepreneur.

These immigrants fought for their independence and had strongly believed that opportunity is in abundance. They also believed that the Government should be small and not interfere in the individual rights of its citizens. Remember that US independence came from its strong belief to break away from the strong centralist government of Great Britain.

However, in times like now and during the American Civil War a central/ federal government had emerged.

Americans have strong sense of self destiny and do not like to have things handed down to them. The average American would rather say “Can I borrow a piece paper” rather then “Can I have a piece of paper”. Beggars on the street would rather say “Spare some loose change” rather then “Give me arms and charity”.

Because of such strong self destiny, volunteerism is strong in the US with an average of USD800/900 is donated to the charities by the average American family. The size of such NGO/ Charity industry has now reached USD1 trillion per annum and charities from individuals and corporations has reached over USD200 million per year.
The Romantic American

Americans are romantics. They strongly believe in the strong representation of good and evil. The typical American cowboy movie would always have the “Good” guy wearing the white hat and the “Bad” Guy wearing all black. To the Americans there is no “gray” area and there is just Good and Evil on each side.

This is very different from Europe where many European cultures believe that in most cases good and evil is mixed in everyday life of “Gray”. Shakespeare’s “tragedies” and his writings are a reflection of European culture.

As Dr. Weaver highlighted in his paper, one of the biggest Hollywood movie was a movie called “Independence Day” (http://en.wikipedia.org/wiki/Independence_Day_(film) which was about a US President leading the World against the invading Aliens from outer space.

As usual, to the Americans, the “Good” guy will always win.

How 9/11 changed the American Psyche.

9/11 is probably the biggest event in American history that has challenged all the assumptions that the US culture strongly believed in.

The US of A has never been invaded and its people have never seen the destruction of war first hand, unlike Europe and Asia.

This changed on September 11th 2001.

The American people felt the destruction of war which was fought many times by many different Presidents in the past in its foreign policy. Suddenly, the US idea of invisibility and not being directly effected by its foreign policy is now being challenged.

Post 9/11: A strong Federal Government

For the first time since the American Civil War, all branches and levels of the Government moved to sacrifice personal liberty for a stronger central government. The Patriot Act is just one of the examples of such changes, including the formation of the Homeland Security Department.

But times are again changing. The US is now getting over its Post 9/11 insecurity. We see many Americans challenging and fighting for their personal liberty. Guantanamo Bay has received more then 100 legal challenges in the Supreme Court and until recently the Democrats took control of Congress.

An Awaken US of A

As the United States awake from its insecurity, it realizes that its foreign policy that has existed post 2nd World War will have a direct effect to the average American. No longer can both the Atlantic and Pacific oceans be a safe cushion to its implications in the foreign policy.

Isolationists will also not have strong support because weather the US like or not they have to participate in the world stage knowing that if they do make a mistake, failures by its administration will have concencequences to its people.

Can 9/11 happen again? Maybe it could and maybe it could not but the loss of personal liberty by the average American citizen cannot be sustained in a country that was founded on the basis of justice, freedom and pursuit of happiness.

A different United States of America.

The new United States will also see a change. It will no longer be a melting pot because according to Dr. Weaver not all races and culture gets melted, especially the communities that do not look and practice the traditional northern European identities and religions.

The new United States culture will be a cookie cutter or better described, as a salad bowl where the identities and cultures of the United States are determined by the diversity of its people.

These changes are slowly appearing. The United States may have woman as a President or if Obama wins, an African-American President. In Congress it has already has a Muslim senator. More importantly, it had two Secretary of State that are of an African-American heritage.

Is this the changing landscape of the United States? By 2040s, Americans of European decent will be a minority.

As it changes internally and adapt its “integrated” role to the World, we will see a new change of America’s culture and its perception to the world.