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The value of Apple, versus the cost of Windows

4 May

mac-vs-pcI remember walking in to Seedcamp Week Berlin and shamefully turning on my 4 year old Packard Bell laptop in a sea of Macs. Similarly, if you walk in to Red Rock Cafe in Mountain View, or St Oberholz in Berlin, 90% of the people there are using a Macbook. It seems that Macs rules startups.

Yet a few years ago I remember reading a blogpost where some Venture Capitalist said that if he ever walked in to a startup’s office and all the employees were working on Apple computers, he would walk straight out and never make an investment. The argument being that such a startup clearly did not know how to spend wisely.

At the time I pretty much agreed with him, and always figured if I ever had a startup I would frugally equip the company employees with the very best of Dell.

Over the past six months, I’ve come to realise how wrong both I, and the long-forgotten-to-remain-nameless VC, have been.

Early last year when my trusty, but under-powered Windows 7 Packard Bell laptop died, I dutifully popped along to PC World to buy a new laptop. They barely had any stock, but I had no choice – I needed a computer that day and PC World is usually your only option for a same-day computer purchase. So I walked away with a HP laptop, equipped with Windows 8, and most importantly to me – a promised 5-7 hour battery life.

After only about a week I took the laptop back, because I assumed the battery was defective; it would only ever last about 2.5 hours, meaning after half a morning working somewhere remote I would already be getting battery warnings. Well, it turns the battery is not defective, it is just crap. I don’t know what they have done to Windows 8 to make it such an energy hog, but there is no way that thing would ever get 8 hours battery life unless I used it Jedi-style with the screen switched off and no WiFi.

Every time I moaned about it on Twitter the poor HP social media folk would direct me towards the same “Improving battery performance” page on the HP website, where the guidance to extend battery life is basically to not use the laptop.

The other small issue is Windows 8. I thought it would just take a little getting used to. Nope. Windows 8 sucks. It sucks bad. I can scarcely believe that a company that employs actual professionals to make products to be used by consumers, could make something so fundamentally unintuitive and unusable.

I could have just about lived with these problems if I was ignorant about the grass on the other side of the fence. But nope, with a Apple fanboi co-founder that was never going to be a possibility. I could see him smirking every time I had to reach for the powerpack for my laptop, while he would complain “oh, I’ve been using my Macbook for half the day and it only has 5 hours battery left. What should I do?”

The final straw was when I met some investors the other day and they were genuinely shocked that I didn’t have a Mac. Clearly not the guy I quoted from the blogpost.

So the other day I picked up a 14″ Macbook Air from Gatwick airport. It was about £120 cheaper than buying it elsewhere and knocking off VAT makes it about the same price as my rubbish HP laptop.

Experience since using it? Amazing. Battery life seems to be a genuine 11h. So refreshing not to have to keep one eye on the battery indicator and have the power pack nearby at all times. Size – it’s so light. Everything about it feels better. The touchpad is amazing and the multi-finger swiping feels instinctive almost straightaway. I won’t go on about how good it is, but the most important thing is that I already feel more efficient… and I also don’t get rage at my laptop like I did with the HP.

So, thanks to the combined crapiness of HP laptops and Windows 8 user experience I am now ex-Windows and pro-Mac. Even if they costs a little more, Macs seem to make it up with value.

Now if anyone can tell me why it would ever be worth a business paying £900 for a Mac Thunderbolt display rather than a £150 Dell screen, I’m all ears.

Leaving the Rocket ship

29 Jun
Rocket Berlin Bear

Rocket Berlin Bear

After just over a year working at the headquarters of Rocket Internet in Berlin, yesterday was my last day.

When you’re always travelling at rocket-speed, it’s quite difficult to jump off a moving vehicle, but jump I have.

In total I was at Rocket Internet for about 21 months, but given the amount I learnt there I’d say it was more like 3 or 4 years in any other “ordinary” job. It’s been a fascinating time, from my first 8 months working in London launching a specific venture, to my time in Berlin where I had a role that allowed me to see nearly everything that was going on in the Rocket universe.

Rocket has a lot of detractors, and it’s nearly impossible to imagine what it’s like from the outside looking in, but I’d say its reputation has improved over the past year. Perhaps it is more a grudging respect that, whilst we’re not aiming for innovation, we really have entrepreneurship nailed down pretty well.

This recent article in Venturebeat gives one of the best analysis of Rocket that I have read. It was always amusing for us on the inside to be reading speculative articles about Rocket Internet, but this guy has a closer relationship to the firm and as a VC, rather than a random blogger, he has a slightly better perspective. Be sure to read the comments too.

I hope over the next few months to blog a little bit about what it was like at Rocket Internet, to maybe address some of the mis-conceptions.

So what’s next? Well, in a rather unusual twist for someone leaving Rocket Internet, I have decided not to start or launch a “ecommerce startup incubator”, and instead will be launching my own startup, Satago, in London.

Pic is my leaving present from the Finance department at Rocket, one of the most thoughtful leaving presents I’ve ever had!

We apologise for the interuption…

22 Apr

It’s been over a year since my last blog post. Naughty blogger.

The reason for my silence has been a kind of self-imposed personal stealth mode, as I worked on a few things.

Not that I expect the blogosphere has particularly suffered from my absence… nevertheless I would like to get back to blogging my thoughts.

To summarise, the two main events in my professional life have been:

  1. I moved to Berlin, Germany to work at the HQ of Rocket Internet.
  2. I raised some money through Seedrs to build the MVP for the startup idea I developed during my MBA.

I’d like to blog about aspects of both. There’s lots to say. Until I get back up to blogging speed I’m going to repost a couple of posts I published on my personal blog a few years ago that I think are still interesting/relevant.

London the Primate City

5 Apr

A blog post about Munich is basically an excuse to post pictures of girls in dirindls

I’m in Munich, Germany at the moment, working on a new Internet company that is growing in leaps and bounds. We’re hiring lots and lots of people, both technical (developers) and non-technical. Something in particular about this interests me – Munich isn’t Germany’s first city, it isn’t even its second – in fact Munich is the 3rd largest city in Germany behind Hamburg and the capital, Berlin.

Why does this so fascinate me? Well, can you imagine setting up a brand new Internet company in the UK’s 3rd city? According to Wikipedia, Glasgow is the UK’s 3rd city. In fact, let’s forget Glasgae for a second, can you imagine anyone ever setting up a brand new super successful Internet company in Birmingham, the UK’s 2nd city? Nope, neither can I.

In the UK it seems that unless you’re in London, you’re nowhere. How does one city get to dominate a country so much, and is it good for the UK? According to George Zipf’s theory of rank-size for an ideal distribution of city size the 2nd city should be half the size of the largest city, and the 3rd city 1/3rd the size, and so on. Mark Jefferson described “primate cities” as those that so dominate the country that they capture most of the population and economic activity in a country. Classic Primate Cities include London and Paris, whilst the most extreme example is Bangkok, which is 40 times larger than the next city.

Compare that to Germany, where Berlin has a population of 3.3 Million, Hamburg is 1.6 Million, and Munich is about 800,000. They almost perfectly follow Zipf’s Law. So which ecomony is doing the best out of UK, France and Germany? Yeah I won’t bother answering that…

Although Berlin, where my direct employers are actually based, is itself considered a bit of a European startup hub, I never get the feeling that it dominates Germany in the same was that London dominates the UK. I don’t think many of my non-British friends in the UK would seriously consider living anywhere in the country other than London. In fact, do people even want to visit Birmingham or Glasgow? Not really. Other than a weekend trip to Edinburgh, for most people London is the UK.

Everyone had gone to Bradford for the weekend.

So for someone from a far-flung corner of the UK, that’s a bit depressing. What chance does Dundee have of becoming some kind of gaming hub, when as soon as a company gets successful it will probably up-sticks to Edinburgh, like Rockstar – developers of Lemmings and Grand Theft Auto – did (yes – Grand Theft Auto was developed in Dundee!).

The UK Government acknowledges the London dominance by trying to force some taxpayer-funded organisations to move to provincial cities. Even the BBC is getting in on the act by moving its BBC breakfast programme to Manchester – a move which is proving rather unpopular with the staff.

I doubt London will ever lose its “Primate City” status in the UK. Nevertheless, I think government is obliged to keep trying to encourage companies to invest elsewhere in the country. Which is why you will get some pretty good incentives to start a company in places like Scotland. Here’s a story in which a founder of an Internet company got a £250k grant from Scottish Enterprise. I was also pleased when my MBA classmate, Xavier, told me that one of the reasons he set up the first Better World Books overseas subsidiaries in Scotland was because he was impressed with how helpful Scottish Enterprise was.

Maybe there is hope!

Expensive Apples

26 Oct

Yesterday’s microeconomics class about monopolies was quite fascinating, especially the idea of profit maximisation in a monopoly as at first it is counter-intuitive.

Here’s how I see the profit maximisation theory applying to a well-known company: Apple. Let me know if I’m wildly off the mark and I’ll go back to my text-books.

Apple has a kind of monopoly in the high-end personal computing market. I have read that it has a 90% share of the $1000+ market. Most of the personal computing market has had it’s profits squeezed massively, whereas Apple, I believe, is one of the most profitable companies out there, and is especially profitable compared to other computer manufacturers.

I’ve often read Apple critics say that if Apple were to just lower its prices it would take a bigger share of the personal computing market and would get more revenues as a result. However, I would say that Steve Jobs, as well as being a great product guy and a bit of a psycho, is also a great economist. Perhaps he has got Apple computer sales ticking along at their profit maximisation point and he knows that if they were to sell more Apple computers they would actually reduce their profits.

I asked our Prof about this and he said “I don’t know”, which a bit less than satisfying. I did ask how they can make more profits with a given product line if they’re at the profit maximisation point, and the answer was “they can’t”. So the only way to grow profits is to move in to new product lines.

I was looking forward to this lecture as I’m familiar with another monopoly: the market for MBA loans in the UK (rant warning). There is only NatWest serving the market and one of the things that suffers in a monopoly is customer service. Interestingly, students from Insead have set up their own MBA financing marketplace, Prodigy, where alumni actually invest in new MBA students.

Lastly, I point you in the direction of Mungonomics.

Who gets depressed? The rich. Everyone else is too busy.