Its nearly full moon as I start to write this newsletter and the powerful and enchanting moonlight spills over the ocean. Above the heavens are filled with the stars. Being in the middle of the ocean is one of the rare moments in modern life where you are forced to feel the immensity of the cosmos.
I couldn’t sleep so rather than tossing and turning in perpetual frustration I decided to get up and be constrcitve. It feels nice to be up when everyone is asleep aside from a few deck hands going about their early morning tasks. Its 3:30am.
Last night before going to sleep, I read something else about the divisions in our society today and how the privileged and not so privileged have even fewer common life experiences or chances to even meet each other. Clearly with the immense financial and political power wielded by the 0.1 or 1% of our society today, this is an issue. How can they make important decisions on everyone’s behalf if they have little empathy and understanding. Being on the ‘road’ at the moment one sees this more than normal. The extreme example is in modes of transport. There are the CEOs and business leaders who are shuttling around on private jets, rarely experiencing commercial any more at all. Then in commercial more of the wealthy middle class have been pushed in to some form of premium or business class as conditions in economy – or cattle class as some call it – become less and less palatable. Its not that the middle class have more money to spend but they are allocating more of their income to it when they do travel.
Currently I am on a cruise navigating the Adriatic. And I have have had many interactions with regular folk from butchers to nurses. But wherever we dock, and even in smaller ports in Croatia or Montenegro, there are massive luxury yachts. Worldwide they are getting bigger. And this is metaphor what has happened in the last few decades but intensified over the last 7 or 8 years.
Most of us don’t understand why and so no wonder the so-called 99% are all fighting amongst themselves. Personally I think that central bank policy has gotten off far too lightly in the media and public discourse. With money being created everywhere, it has pushed up financial assets which the super rich have to a greater proportion and this has exacerbated wealth disparities.
But the growing power of large corporations can also be blamed. They shop around the world for the lowest labour costs and lowest tax jurisdictions. Then the pay a small handful extraordinary wages and bonuses because corporate profits have risen.
We are clearly in the age of the corporation. No wonder you see Mark Zuckerberg and Eric Schmidt flying around the world meeting heads of state.
There is a growing backlash against capitalism. But I think that most people have forgotten what capitalism is. Unless we find some utopian new system, I would opt for more capitalism not less. At least as a transitionary step. I do acknowledge that very smart people are working on more evolved systems. In my mind it would mean more small and medium enterprises and healthier competition. Amazon’s recent acquisition of Whole Foods was a reminder of the dominance of a small number of behemoths. I don’t want to bash one single company, especially one where I appreciate its services. (I am one of those book lovers who went nuts on ordering books over Kindle AND I still go and buy the same books at the book store). But clearly anti trust officials have allowed it to become enormous as identified in an interesting article I read recently:
“We often talk about Amazon as though it were a retailer. It’s an understandable mistake. After all, Amazon sells more clothing, electronics, toys, and books than any other company. Last year, Amazon captured nearly $1 of every $2 Americans spent online. As recently as 2015, most people looking to buy something online started at a search engine. Today, a majority go straight to Amazon.”
The author goes on to note Amazon’s goal to control the infrastructure of the economy.
“It’s not just that Amazon does many things besides sell stuff—that it manufactures thousands of products, from dress shirts to baby wipes, produces hit movies and television shows, delivers restaurant orders, offers loans, and may soon dispense prescription drugs. Jeff Bezos is after something so much bigger than any of this. His vision is for Amazon to control the underlying infrastructure of the economy. Amazon’s website is already the dominant platform for digital commerce. Its Web Services division controls 44 percent of the world’s cloud computing capacity and is relied on by everyone from Netflix to the Central Intelligence Agency. And the company has recently built out a vast network of distribution infrastructure to handle package delivery for itself and others.
Companies that want to reach the market increasingly have no choice but to ride Amazon’s rails. With Prime and digital assistant Alexa, from GE appliances to Ford cars, Bezos has lured a majority of households into making Amazon the default provider of everything they order online. Most Prime members no longer comparison shop. This has forced competitors of all sizes—from major brands like Levi’s and KitchenAid to small-scale producers, e-commerce innovators, and independent brick-and-mortar stores—to abandon the idea of reaching consumers directly. Instead, they have to rely on Amazon’s platform to sell their goods.”
The real warning comes at the end of the article:
“Jeff Bezos’s big bet is that he can make buying from Amazon so effortless that we won’t notice the company’s creeping grip on commerce and its underlying infrastructure, and that we won’t notice what that dominance costs us. Amazon has unprecedented power to steer our choices. Ask Alexa to send you batteries and you won’t get the option of Duracell or Energizer; you’ll be shipped Amazon-branded batteries. Browse the Kindle bestseller list and you’ll see many books published by Amazon. Peruse the “customers also bought” carousel and Amazon’s algorithms will favor displaying its own products, even when they’re not the best match.
Amazon’s bid to buy Whole Foods should be a wake-up call. Our anti-monopoly policies have fallen into disuse and today’s big tech monopolies have used that opening to seize too much power. As Senator John Sherman, co-author of the Sherman Antitrust Act, declared as his bill came up for a vote in 1890, “If we will not endure a king as a political power, we should not endure a king over the production, transportation, and sale of any of the necessaries of life.” [emphasis added].
Now we are heading into the enormous Port Piraeus at Athens, one of the most significant in the entire Mediterranean. Greece is still a player in the shipping industry. But what interests me is that this is my first visit to the cradle of Western Civilization. I have for some time desired to see where Socrates would speak in the markets of the Aleph and see the Pantheon and other architecture that has so deeply influenced Western buildings and Washington DC itself. This is at a time where Western Civilisation seems to be going through a crisis of confidence. And I am sure that the G20 in Germany this weekend will only be another opportunity to tap down the US and Europe. In Europe the economic problems along with the refugee crisis has thrown up a lot of issues. But more widely, there seems to be popular trend to bashing the West. On the one hand, self reflection on wrongs done by our societies is much needed. In some ways, perhaps more is needed. Rather than just focusing on the slave trade and the way the American indigenous people were treated, how about asking the question of where are our bombs being dropped now? And do we need to be intervening in all these countries around the world? I think that our moral authority is declining because of excessive intervention. However, I also think that wholesale bashing of the West is also overdone. I have been a long term resident of Asia, and there are really no Asian countries that have accepted or encouraged large immigration and cosmopolitan societies that you see all across the West. I have lived in Japan and Korea and both are very homogenous societies. And friends in China tell me it has been quite difficult in the past to have a secure residency, apart from Hong Kong. The only place in Asia that is anything like London, New York or Paris is Singapore.
I also have this sense that western people are perhaps further along the curve of being sick to death with their political leaders and business as usual. If we are to solve the many crises that humanity is facing we need radical changes in the way we see the world and the way we organise our societies. Part of the malaise about the West is the apparent outperformance of the economies in places like Asia. But I think that they are outperforming under the rules of a dying system. There are now many Chinese millionaires and billionaires who acquired their wealth under the current global economy. But the rules might be about to change. Its like you have mastered the skills of soccer, but suddenly we might be told that we have to play hockey instead. I think that many people in the West are challenging their old values and ways of seeing the world. And I see immense creativity and entrepreneurship here that isn’t present across all of Asia, only perhaps in pockets.
That said, I must continue to acknowledge the entrepreneurship thats occurring in Beijing. I was forwarded this article this week:
“Beijing is not just a nice startup playground which might become truly interesting in a few years. This is the big leagues now. Startups can achieve massive scale quickly, because the domestic market is 1.3 billion people, which is four times the U.S. or European population.
An increasing share of these 1.3 billion people is actually targetable. In the U.S., 190 million people carry a smartphone; in China, it is more than 530 million today, and it will be 700 million or more in three years.
“Beijing is not a startup playground. This is the big leagues now.”
But a large market alone does not mean that a place will become a startup hub. It is the combination of market size and the extreme consumer-adoption speed of new services, combined with the entrepreneurial spirit and hunger for scale of Chinese entrepreneurs.
Beijing is the main hub where it happens. Here, entrepreneurs, engineering talent from the two top Chinese universities — Tsinghua and Peking — and VC money come together. Seeing the scale, speed, aspirations, money supply and talent here, I walked away thinking this will be the only true competitor to Silicon Valley in the next 10 years.
Yes, there are other hubs, such as Berlin, but the scale is different. (India is the only other possible contender here.) And it’s good for Silicon Valley to have a true competitor, because it sparks impulses on how to evolve to the next level.
In Beijing, tales abound about the sometimes crass competition between startups, and the often not ethically acceptable methods used to win.
The extreme competition only secondarily stems from the entrepreneurs; the main driver is the consumer adoption rates. New mobile apps often take off at mass scale even faster than in the U.S., and become a phenomenon overnight.The improvement from new services is large for most consumers, as the majority only went online recently with the arrival of smartphones.
Big startups are built in three to five years versus five to eight in the U.S. Accordingly, entrepreneurs who try to jump on the bandwagon of a successful idea scramble to outcompete each other as fast as they can.
Work-life balance is nonexistent in Chinese startups.
Meetings are anytime — really. My meeting in Beijing with Hugo Barra, who runs all international expansion for Xiaomi — the cool smartphone maker and highest-valued startup in China, at around $45 billion or so — was scheduled for 11 pm, but got delayed because of other meetings, so it started at midnight. (Hugo had a flight to catch at 6:30 am after that.)
In China, there is a company work culture at startups that’s called 9/9/6. It means that regular work hours for most employees are from 9 am to 9 pm, six days a week. If you thought Silicon Valley has intense work hours, think again.
For founders and top executives, it’s often 9/11/6.5. That’s probably not very efficient and useful (who’s good as a leader when they’re always tired and don’t know their kids?) but totally common.
Teams get locked up in hotels for weeks before a product launch, where they only work, sleep and work out, to drive 100 percent focus without distractions and make the launch date. And while I don’t think long hours are any measure of productivity, I was amazed by the enormous hunger and drive.
Its going to be interesting to see if this thriving start up system will be affected by the growing problems in the wider Chinese economy. If Korea and Japan aren’t careful, they are going to face even greater competition going forwards. A friend of mine who visited Korea recently was amazed that after 20 meeting in Seoul, none of the conterparties e mailed him. If it was London, Silicon Valley or Beijing (in all likelihood), many of them wold have proactively sent follow up e mails. He thought that the Koreans were too laid back. Lets hope for Korea that its new President will inject some ‘mojo’ into the national story.
I don’t want anyone to misunderstand my views. I am holding the question whether the West is actually undergoing a profound transformation. Part of that transformation will be to co-create new ways of doing things with the East of course. I don’t want to get into a dualistic us vs. them competition. We are all on this planet together and I personally want to be a cheer-leader for the entire planetary evolution.
I just recently started reading a book called “Lost Masters: Rediscovering the Mysticism of the Ancient Greek Philosophers” by Linda Johsen. Its a fascinating read and an important piece of work when there is so much interest today in the learnings of Eastern religions and philosophies, which are having an influence on modern day psychology (mindfulness movement) and for the relevance to the new sciences (most quantum physicists I meet end up dipping in to buddhism, hinduism etc).
But this new book suggests that the Greek Masters views of the world were not too dissimilar to the Sages of Asia.
“Lost Masters is all about this neglected but absolutely essential aspect in the lives and teachings of the great sages of European antiquity. If you are open to that dimension, you will want to read this book more than once. You will be amazed by the profound wisdom of these sages, which has been lost to us for two thousand years, except perhaps for a brief period when it was rediscovered in the Renaissance, only to be forgotten again. The subject matter of this book is not just of historical interest. It is of vital relevance to our civilization at this time, which needs to rediscover its roots in that spiritual dimension if it is to survive, just as individuals need to discover that dimension within themselves in order to transcend the dysfunctional egoic state of consciousness that is the main source of human suffering….
…The ability to think, which finds focused expression in the pursuit and ever-increasing expansion of scientific knowledge, is an amazing evolutionary attainment, but unless it is balanced with awareness, it becomes highly dangerous and destructive. The ego arises when there is complete identification with thinking without any background awareness
…Wisdom arises out of awareness. Wisdom can manifest as thought, but the root of wisdom lies in “no thought,” or freedom from thinking. That is why Socrates said: “Wisdom begins in wonder.” What is wonder? The dictionary gives various definitions. The one that applies to the saying of Socrates defines wonder as “rapt attention or astonishment at something mysterious or new to one’s experience.” So when he speaks of “wonder,” Socrates clearly refers to a state of alert inner stillness in which there is no thinking.”
Its great to be reading it as I approach Athens.
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