Fabrice Grinda

Month: April 2011

Globalization is more fragile and less entrenched than you think!

I was shocked that the statistics I came across in a recent article in The Economist which presented Pankaj Ghemawat’s research on globalization.

We seem to take it as a given that we live in a globalized world, but on many indicators global integration is far from complete:

  • Only 2% of students are at universities outside of their home countries
  • Only 3% of people live outside their country of birth
  • Only 7% of rice is traded across borders
  • Only 7% of directors at S&P 500 companies are foreigners
  • A few years ago less than 1% of all American companies had any foreign operations
  • Exports only represent 20% of global GDP
  • Air travel is restricted by bilateral treaties and ocean shipping is dominated by cartels
  • Foreign direct investment (FDI) accounts for only 9% of all fixed investment
  • Less than 20% of venture capital is deployed outside a fund’s home country
  • Only 20% of shares traded on stock markets are owned by foreign companies
  • Less than 20% of Internet traffic crosses national borders

More worryingly globalization seems reversible. Emigration levels today pale with those 100 years ago when 14% of Irish-born people and 10% of native Norwegians had emigrated. Back then you did not need visas. Today the world spends $88 billion a year on processing travel documents and in a tenth of the world’s countries a passport costs more than a tenth of the average annual income. Nearly a quarter of North American companies shortened their supply chains in 2008. It takes three times as long to process a lorry-load of goods crossing the Canadian-American border as it did before September 11th 2001. Even the internet is succumbing to this pattern of regionalization, as governments impose a patchwork of local restrictions on content.

Read the full article at: http://www.economist.com/node/18584204?story_id=18584204

Warning: Be prepared for self-indulgent narcissism over the next few days :)

You might argue that coming from me it might not be much of a change from the usual, but as I have not found a way to share TV interviews or shows about me without appearing narcissistic, I felt a warning was appropriate 😉

On the bright side English speakers will be spared the brunt of it as the interviews and TV shows I will be sharing will be in French.

Today I will be sharing a quick interview I did on BFM Business in front of the Nasdaq last Friday. Tomorrow I will be posting three TV shows from 11 years ago during the Aucland period where a bunch of TV crews followed me around for a while to present Internet auctions and describe the life of entrepreneurs.

On Saturday, I will be posting the sequel to one of these shows. The same TV crew from 11 years ago followed me around Buenos Aires and New York for a week. They will be presenting: “11 years later, what happened to him”. With a week’s worth of footage they can make me say almost anything so it should be interesting 😉

The Ricther Scales should update “Here Comes Another Bubble”

I posted the video when it first came out in 2007 and watched it again this morning and it feels much more relevant today than it did then. It might not be a bubble yet, but the environment is definitely getting frothy. Most of the larger companies going public or being acquired are clear leaders with revenues and profits, albeit with dizzying valuations. However, at the seed stage seemingly anyone with an idea can get funded. Moreover, the terms have worsened significantly for investors as “uncapped convertibles”* have become more common for the best deals. This frothiness at the seed stage is making the war for talent insanely competitive resulting in failed or marginally successful startups being acquired only for their teams! This won’t become a full blown bubble until marginal companies start going public or getting exits based on hope rather than real success, but it sure is getting hot in here! Now is definitely a good time to be starting or selling a company.

By the way, if you have not seen this video of the Ricther Scales at the 2010 Crunchies, it’s well worth checking out as well!

* An uncapped convertible means the seed investors invest in a note that will convert to equity at a discount to a Series A deal at whatever that price is done. This is as opposed to a priced deal where there is a valuation that is defined and we are buying equity or a capped convertible where the note will convert, but the price of the conversion has a ceiling. As I explained in my angel investment guide, Jose and I don’t like convertibles because we don’t feel they properly reward us for the risks of investing in a seed round, especially since a Series A is far from guaranteed to happen.

The Sleepless Elite

There was a great article in this week’s Wall Street Journal on the 1 to 3 percent of the population who are “short sleepers”. They thrive on only a few hours of sleep per night without the need for naps or caffeine. They are energetic, optimistic, ambitious and thinner than the average. They may also be hypomanic.

In other words, they pretty much sound like most great entrepreneurs I know 🙂

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