Fabrice Grinda

This is not quite the review I expected to write 12 hours into the trip. The trip could not have started worse.

I had never been to Whistler and decided to take advantage of the fact that I was already in San Francisco to check it out. Unfortunately, the station is two and half hours from Vancouver airport. Worse, the bus dropped me off at the wrong hotel.

When I finally managed to get to The Four Seasons around midnight, the hotel service was a huge disappointment. There was not one to help out with the luggage. The food at the late night in room dining was expensive and terrible! In the morning, renting skis and boots took over 2 hours – including nearly an hour of their concierge not understanding my name and bringing me other people’s ski boots! It then took nearly an hour to buy a simple lift ticket! Worse of all, it had not really snowed in 6 weeks and the forecast called for rain at the station level for the duration of my stay. I finally got on the slopes around 11:30 am and the snow in BlackComb was icy everywhere except at the very top of the glacier where the t-bars run.

Fortunately, from that point on everything went great. That afternoon I switched to the Whistler side and somehow the snow at Whistler Peak was still very good despite being at a lower elevation than BlackComb. It did not rain, but snowed every day. Unexpectedly the station was hit by a storm that dumped almost a foot of snow. My heli skiing was cancelled due to the weather, but as I had to be ready by 7:30 am for that trip, I ended up being the first on the slopes and skiing in fantastic snow all day. Even better, I went heli skiing the next day enjoying both perfect fresh powder and amazing weather allowing me to get 9 runs in.

The station is huge. The skiable area is the largest I have seen in North America. Whistler is a great little town with lots of amenities. I ate at two delicious Italian restaurants: Il Caminetto and Quattro.

All in all I very much enjoyed the trip despite the lackluster start!

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Reading about astrophysics almost always makes me feel insignificant and oh so mortal. The article below proved no exception, especially given its bleak predictions, even if they are hundreds of billions of years in the future.

Reposted from New Scientist:
http://www.newscientist.com/channel/opinion/mg19726452.300-commentary-what-future-astronomers-wont-see.html

Faced as we are with impending economic gloom, with financial institutions under threat and stock markets around the world roiling like the sea in A Perfect Storm, perhaps we should step back from our myopic fixation on the present and think rather longer-term.

Viewed through the prism of the cosmos, things look a lot brighter. It turns out, in fact, that we live in quite remarkable times.

Ever since Edwin Hubble discovered that our universe is expanding, physicists have been striving to determine what will happen next. An expanding universe acting purely under the influence of gravity should slow down. So will the expansion continue forever, slowing but never quite coming to a halt? Or will it stop, leading the universe to collapse in a “big crunch”?

In fact, neither is happening. A decade ago, astronomers observing the motion of distant galaxies discovered something crazy: the expansion is actually speeding up. The dominant force in the universe seems to be some kind of cosmic antigravity that permeates empty space.

There is something exciting and a little scary about discovering that the dominant stuff in the universe is something we didn’t even know existed. However we feel about finding out that we, and all the stars and planets and galaxies we see, have been relegated to a new level of irrelevance, we can ask what this discovery implies for the future.

It doesn’t look good. If the universe’s expansion continues to speed up, powered by dark energy, objects beyond a certain distance from us will eventually be moving away from us faster than the speed of light. Nothing can travel through space faster than light, of course, but as far as we know space itself can expand as fast as it wants, carrying stars and galaxies along with it like surfers on a wave. If we wait long enough, distant objects will disappear from sight, and perhaps hundreds of billions of years from now our galaxy will sit alone in a vast, seemingly empty cosmos. The countless billions of galaxies we see now will have disappeared.

In that case, scientists in the far future, on some other planet without the benefit of our current knowledge, will see no evidence from their observations that the universe is expanding. After all, the only way that we know about it is by looking out at distant galaxies and tracing their motion. If they are out of sight, there will be no such tracers.

All empirical evidence that there was ever a big bang will have disappeared, as will all evidence for the mysterious dark energy that dominates the universe (and which by that time will contribute more than a million million times as much energy to the visible universe as matter does).

We can therefore allow ourselves to feel somewhat smug; astronomers in the far future will get it totally wrong. It turns out we live at the only time, as far as we can tell, when both the expanding universe and the existence of dark energy can be inferred. In the distant past, dark energy would not have had a measurable effect on the universe’s expansion, and in the far future, the expansion itself will not be measurable.

In fact, in an accelerating universe the limits to available knowledge will peter out faster than in any other kind of expanding universe, as there is no way to observe anything beyond the rapidly shrinking horizon. Such a universe is also the worst-case scenario for the long-term survival of life, as the energy needed to power it will run out (so much for intelligent design!)

We may never know if other fascinating and important aspects of our universe are hidden from us today, yet would have been visible had we been smart enough to evolve 5 billion years earlier. But these cosmic conundrums may at least make the gyrations of the stock market seem a little less profound.

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This British bank heist movie is great. It felt like a well done classic. In many ways it reminded me of Snatch, though it’s a bit darker. The story is fast, sharp and fun. The intertwining story lines keep you guessing and come to a satisfying ending (as opposed to many of the current thrillers which often end with a completely implausible twist).

Go watch it!

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I adore skiing. I was introduced to it essentially when I learned to walk and have enjoyed it tremendously and extensively ever since. I had the pleasure of skiing in Snowbird and Alta with my dad and baby brother for the past few days and the experience was phenomenal.

It’s much more convenient to get to than Whistler or Jackson Hole from New York. There are numerous nonstop flights daily to Salt Lake City. Just as importantly the station is only 40 minutes away from the airport. It’s the only resort where I regularly go for the week-end if I see a storm system approaching.

The powder is amazing both in quantity and quality. The snow is very dry and over 500 inches regularly fall every season. I can’t recall having been to Snowbird/Alta without it snowing at least half the time. This trip was no exception with over 30 inches of snow falling over 3 of the 4 days of my trip and nonstop snow on the forecast for the coming days.

The terrain is also phenomenal. The skiable domain is much smaller than what you would find at Whistler, Chamonix or Les Trois Vallees, but it makes up for it with an impressive array of ungroomed bowls and tree runs. It’s also much larger than it used to now that Alta and Snowbird are explicitly linked and easy to ski from one to the other (you used to have to hike between the two). You can also augment it with the resorts’ heli-skiing and cat skiing operations, though the heli-skiing is often cancelled due to inclement weather. If you are up for a challenging day, sign up for the “mountaineering experience” in Snowbird where you will hike and climb your way to extreme terrain.

The station only caters to good skiers. There is no après ski to speak of. All restaurants close at 9 pm and most are mediocre at best. There is one exception in Shallow Shaft which offers delicious fares and amazing wine! Alta is the more elitist of the two stations. It does not allow snowboarders and does not put foot rests or safety bars on any of its lifts.

Possibly as a result, the station is not crowded. We never waited for more than 2 or 3 minutes and we found fresh powder in a few places in the middle of the day. Most stations are fully skied out within minutes of opening and the lines are much longer. It was so uncrowded, on a Spring Break week no less, including on Saturday, I wondered how financially stable the operation is. But for as a skier, I did not care, I was happy and fully fulfilled. My only complaint is the highly skewed male / female ratio!

All in all, I can’t think of a more pleasant skiing experience short of a week of heli-skiing. Happy skiing!

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I had the pleasure of being invited to watch Sampras and Federer last night. The setting was amazing. Federer entered the court to the Star Wars theme song dressed in his “Darth Vader” black. Various songs from Rocky were played to cheer Sampras on during the change overs. Many tennis great were also in attendance including Ivan Lendl, Roy Emerson and John McEnroe.

The ambiance was electric and the match was fun. Sampras was not as sharp as in his prime, but is still very fit and his serve, especially his second serve, is as good as ever. The night alternated between serious play, with a few amazing exchanges, and comic moments – including Sampras’ impressions of John McEnroe and Tiger Woods :)

It was a great night for tennis!

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“Is China democratizing? The country’s leaders do not think of democracy as people in the West generally do, but they are increasingly backing local elections, judicial independence, and oversight of Chinese Communist Party officials. How far China’s liberalization will ultimately go and what Chinese politics will look like when it stops are open questions.”

Read this great article by John Thornton in the last issue of Foreign Affairs:
http://www.foreignaffairs.org/20080101faessay87101-p0/john-l-thornton/long-time-coming.html

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The Richter Scales’ Here Comes Another Bubble seem to be the inspiration for yet another great song!

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In a prior post – Sometimes it pays to be lucky – I was expressing my gratitude when I learned that MilleMercis, one of the companies I got involved with after my Aucland days, had gone public.

Since then, the other two companies I was involved with were both successfully sold. 2xmoinscher was acquired in July 2006 and Cityvox was acquired last Tuesday (Mach 4, 2008).

This brings an end to my 1999-2000 bubble era angel investments. I had made three significant investments (relative to my net worth at the time) and two small investments. Of the five, there were three successful exits, 1 IPO and 1 bankruptcy.

Large investments:

• MilleMercis: European online marketing company – went public on the French stock market
• 2xmoinscher: ”Half.com of France” – successfully acquired
• Cityvox: “Citysearch of France” – successfully acquired

Small investments:

• Webhelp.fr: Call center operations – successfully acquired
• Alidoo: “Pets.com of France” – went bankrupt

When I look at the three larger investments I was involved with, they only have one thing in common: really smart, passionate and tenacious teams. In none of the three did things end up working the way we expected them to back in 1999-2000!

MilleMercis
MilleMercis started out as a wish list site which allowed to sell ads at high CPMs under the assumption that something you want is something you are interested in. The website never took off, but MilleMercis built deep CRM, viral marketing and online marketing knowledge that it used to start managing email databases for third parties and become a full blown ad agency with a viral marketing specialty. Combined with the growth in online marketing in the past 8 years, it became hugely successful.

2xmoinscher
2xmoinsher has a great business model and is a great product, but constantly faced an extremely competitive environment. Not only did Amazon launch its Marketplace and eBay largely move to fixed prices, but a local French company called PriceMinister launched on the same model, raised significantly more money and constantly outspent 2xmoinscher in marketing, BD deals, acquisitions and hires.

2xmoinscher only survived by the tenacity of Aymeric Chotard its Founder and CEO who made every penny count and obtained much greater ROI on his cash spent than his competitor. He worked his team as hard as he could for 10 years straight! 2xmoinscher did relatively well, but Priceminister is the runaway success: its last round of funding was on a valuation of several hundred million Euros and an IPO is being discussed.

Cityvox
Cityvox also had a circuitous path to success. I invested in the company in 1999 because I loved the intelligence and passion of its founders Bertrand Bigay and Michel Athenour, I liked Citysearch in the US and I believed in the value of local search. The vision was correct but it took forever to get there. In 1999, none of the local small businesses advertised online though we believed they soon would. It only started to happen 9 years later!

The original business model was to have sales teams contact local businesses to build personalized page for them on Cityvox for an annual fee. The business failed as small businesses in France were not ready to go online and there was no way we could compete with the yellow pages sales force.

Cityvox barely survived the bubble bursting. The team’s passion and commitment convinced its angels to reinvest before it ran out of cash while the company aggressively cut costs. They reduced headcount, moved from Paris to Marseilles, got the city to subsidize the move and did everything in their power to preserve cash. On the revenue side, the company was largely saved when it successfully sold its syndicated content to third parties who wanted local information and reviews. Again this business proved transitory as most companies eventually decreased their content budgets.

Cityvox again survived by successfully moving to mobile and getting paid to build local mobile sites for the major operators in France. Finally in the last few years while Yelp started coming to the forefront in the US and the promise of local advertising started to become fulfilled, online advertising revenues finally started to take off for Cityvox and the company was on much stronger footing.

Orange, France’s largest ISP, mobile operator and Internet company came a calling and a deal was made. You can read more about the deal (in French) at:
http://www.journaldunet.com/ebusiness/publicite/actualite/orange-rachete-cityvox-pour-se-lancer-dans-les-liens-sponsorises-locaux.shtml

Conclusion
Things rarely happen as you expect they will it in startups. This was also true of the startups I created. Zingy was originally a copy of Kiwee in France and Jamba in Germany – a B2C provider of mobile content. We transitioned to becoming a B2B provider to the carriers because Premium SMS did not appear in the US market until 3 years after we launched!

It should also be said that in almost all of us who have been successful were very lucky in many ways! However, as you can’t count on being lucky, if there is one lesson to be had from the above experiences, it is that the most important traits of a startup team are adaptability, open mindedness, grit and tenacity. It would have been easy for Aymeric, Bertrand and Michel to get great jobs in large stable companies. After 5 or 6 years of fighting day and night, the lure of stability and a few good nights’ sleep must have been appealing. However, they stayed the path, kept believing that they would figure it out no matter what and ended up succeeding while others simply gave up or failed to adapt!

Congrats guys! You truly deserve all your success!

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Funny and insightful!

• Sandberg leaves for Facebook. Let’s all recite Eric Schmidt’s Serenity Prayer
• Eric Schmidt’s Serenity Prayer

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On Tuesday evening, I had the pleasure of attending a seminar sponsored by McKinsey on China’s Business and Policy Evolution at the Asia Society (http://www.asiasociety.org/) in New York.

The panelists were Howard Chao, Partner and Head of the Asia Practice of O’Melveny & Myers, Nicholas Lardy, a Senior Fellow at the Peterson Institute for International Economics, and Jimmy Hexter and Jonathan Woetzel, Directors at McKinsey & Company who co-authored Operation China: From Strategy to Execution.

I learned a few interesting things:

• While China is not becoming a democracy in the traditional sense of the word, it is becoming much more open. For instance, they took the rather unprecedented step of posting their new energy policy law proposals online and inviting experts, including foreign experts and McKinsey to review it and suggest changes. The project will probably not be put into law at this NPC but it probably will be at some point in the next 6 months.
• Urbanization is continuing apace and by 2025 there should be 1 billion urban dwellers. This suggests that 40-50% of the population of many cities and workers at most companies will be migrant workers. As such the government and companies are going to have to be much more supportive of migrant workers than they are today.
• Despite rising labor costs, most multinationals are not going to move out of China given the complexities of changing their supply chain, the economies of scale that China offers and the lure of the domestic market. Last year Vietnam had $40 billion in exports, China $1 trillion. As such, countries like Vietnam do not have the infrastructure to accept a large scale move of companies from China there. Not to mention a large inflow of capital and companies in Vietnam would probably lead to higher costs there. In other words, while countries like Indonesia and Vietnam are going to grow and offer cheaper labor costs than China, China will remain a major manufacturing hub for most multinationals.
• Most companies in China were built on cheap labor with little effort made on organizational efficiency which provides great opportunities for productivity improvement going forward as companies bring their global management best practices to China.
• Interestingly a large portion of China’s exports are coming from foreign companies established in China.
• Inflation is becoming a problem and might be creating bubbles in real estate and stocks because the negative real rate of return offered on bank deposits is leading individuals to invest in any alternative they can find.
• China will let the Yuan appreciate against the dollar faster than it has in the past (it appreciated at twice the annual rate of 2007 in the first two months of 2008) to fight inflation and decrease its oil import prices.
• Economic growth is expected to slowdown to below 10% per year as a result of the global slowdown but will remain high (8-9% per year).

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