A few days ago I met Matthew Scott for lunch.  Matthew told me the story of “Mighty Light“.

MightyLight aims to bring “light” (literally) into the lives of millions who live in remote parts of the world and don’t stand a chance to get grid connectivity. It aims to do so by a clever product that is solar-charged and uses energy efficient white LED for lighting.

It got me thinking on how innovation in distribution channels is probably as critical as innovative product design in the context of domestic consumers in emerging markets (and particularly so in the case of BOP consumers…)

Now, if you are a purist - this may not count as true innovation.

Distribution channels (or even innovation in distribution channels) is not something that you can patent…and yet there is no doubt that products like these are capable of transforming the lives of millions through clever combination of technology and distribution which hitherto was not possible. 

In other words, they fit the criteria of high-impact and definition of a “breakthrough product” - and possibly innovation.

What do you think?

On a related note, I also spoke with Alok Singh, CEO of Novatium a few days ago - they too are doing something that is fairly unusual and exploting a business model around services that has not been tried in the PC industry before . Will it work? We dont know yet.

Is it an innovative approach? I certainly think it is.

Related Post: Has the $100 PC finally arrived?

The idea has been floated and rejected in America a couple of times. Now the Chinese are considering e-stamps for email in China as a way of preventing SPAM.

SPAM is a term commonly used to refer to unwanted junk email that is usually of a commercial nature. Internet regulators are pushing for a cyber-postal system, according to the Shanghai Daily News. Some 58% of email in China in the first half of this year was SPAM.

The news came out at the 5th Annual China Internet Conference, held last week in the city of in Jiangsu Province. "We are working with several institutes on development of e-mail stamp technology," said Wang Xiujun, a member of the Anti-Spam Working Committee under the Internet Society of China (quoted in the Shanghai Daily). "It can help filter out spam mail from the source before it is sent out."




China Tech News reported on the events at the conference.

BDL Media CEO Danny Levinson attended the conference. "I think it's going to be difficult to implement so late in the game for China," Levinson said regarding e-stamps. "There are already multiple deliverability problems in China among the different portals..." Levinson went on to say that the affect might simply be to change how Internet users in China send their communications, with email being dumped for instant messaging.

The Shanghai Daily stated that the technology for e-stamps is "still under development." The paper said it was too early to tell whether users would have to pay "postage."
See article.

While the topic is not directly related to either venture capital or private equity, I found it interesting this week to read that philanthropy seems to be on the rise in China.

The Chronicle of Philanthropy carried an article in it's September 20th edition on how the generation of wealth in China's booming economy has begun to begun to result in philanthropy.

The Chronicle notes that new millionaires are being created in China at about the same rate as in the United States. "While many of the affluent are known for their lavish way of life, members of this growing generation of wealthy Chinese are developing a taste for charity," the journal said.




Between 2003 and 2006, China's five richest individuals gave $640 million to charitable causes, according to one source.

The article in the Chronicle looked at some of the regulatory issues involved in the rise of philanthropy in China. A couple of ironies emerge. One is that charity was despised by Mao. Another is that American institutions (like colleges and universities, for example) are now sending their fund raisers to find money in China.
See article.

Is China corrupt? Sure. But, how corrupt? The China Law Blog published a post today that looked at where China stood compared to other nations...

Of the 180 countries surveyed by Transparency International, China ranked 72nd. They were tied with India, Mexico, Brazil, and a couple of other countries in that spot with a "cleanness" score of just 3.5 on a scale of 0 to 10. China was somewhat more corrupt than Turkey (64th with a score of 4.1) and almost as corrupt as Saudi Arabia (79th with a score of 3.4) and Thailand (in a 10-way tie for 84th with a score of 3.3).




I think it's pretty easy to say that corruption is bad. It reduces competition and adds to the cost of doing business. It's harder sometimes to convince people that corruption is relative - which is to say that all countries seem to have some degree of corruption, since no one scored a perfect ten on the scale.

You can think of countries in terms of their ranking. The USA ranked 20th, making it less corrupt that 160 other countries. Switzerland ranked 8th. So only 11 countries are more corrupt than Switzerland and less corrupt than America. That's not a very big difference, is it?

You can also think of countries in this report in terms of their scores. Switzerland scored a 9.0 on a scale of 0 to 10. The USA scored a 7.2 - which perhaps makes the difference between 8th place and 20th place look a bit bigger...

The China Law Blog interpreted the scores as being tied to the economic health of a country. The better a country's economy, the lower their score and their ranking. About 75% of the world's countries scored a 5.0 of lower on the scale.

The least corrupt country on earth? It was a three-way tie between New Zealand, Denmark, and Finland (all with a score of 9.4). The most corrupt country in the world? Somalia and Myanmar tied for the lowest score: 1.4. They were just barely more corrupt than Iraq, whose score was 1.5 on the survey.
See article.

China Success Stories is fast becoming one of my favorite blogs. Their recent article on due diligence is an excellent examination of the complicated issues surrounding the simple task of not getting burned in your dealings in China.




George Martin, a Partner at Faegre & Benson LLP wrote the article for CSS. The premise is simple. Business in China is different than most places in the world. It's easy to see why people jump in unprepared: the market is huge and potentially very profitable.

Martin sums up the problem colorfully: "Making your investment and contractual relationships prosper means minimizing risks. But identifying business and regulatory risks in China, for those unfamiliar with the process, may sometimes seem like trying to focus a telescope on the dark side of the moon. "

Read his whole article here. I think you'll be glad you did...

See article.

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We talked a few days ago about the nightmares that can come with joint ventures in China. How do you avoid them? Dr. James Chan, writing for China Success Stories, has some Practical Tips on Working with a Chinese Partner.




Most of Chan's tips seem simple and obvious. But many Westerners doing business in China still manage to neglect them for some reason. An example: respect the business cards of a Chinese partner. Exchanging business cards is the business version of a handshake in China. Look at the card. Keep it out for a few minutes before you slide it into a pocket or your wallet. And have plenty of your own business cards with you to give away when you go to China.

The list of tips (there are 18 in all) can be eye-opening. For example, never give a clock as a gift in China. And don't give men green hats. Chan explains why in his article. Other tips are easier to understand. The Chinese tend to be social first; then they do business.

My favorite tip is number 14. It deals with what it means when a Chinese person says "yes." It often means simply that they're listening - not necessarily that they are agreeing with you.

You can read all of Dr. Chan's tips here.
See article.

CiviBlog Dot Org has an excellent article online at the moment about Internet censorship in China.

Many countries (perhaps most) exercise some amount of censorship over the Internet. In most cases that censorship involves some government authority identifying specific sites or domains that are then blocked. But like in so many other areas of life, China is different...




In The Great Firewall of China, the people at CiviBlog explain that censorship in China is designed like a "panopticon", a sort of prison where the guards can observe anyone whenever they want to and the inmates never know whether they're being observed right now or not. The result is self-censorship (and paranoia, I suspect).

The article examines Internet censorship in general, but that topic has a special interest for entrepreneurs and investor in China because the Internet is such a thriving economic sector. Guessing how censorship, specifically Chinese censorship, will impact consumer behavior is a hard task. The process of censorship in China makes success in venture capital projects that are related to the Internet just a little bit more like hitting a moving target...

See article.

For me, once the Canadian dollar began trading at par with the US dollar on Friday, it should have been payback time. All those years of jokes about the Canadian "dollarette" were finally over. No more, "Do I weigh 20% less in Canada?" nonsense. Or so I thought.

Then I opened my inbox to find this message from one of my college dorm mates: "Dollar may be big. Football players still tiny. Not real football, either."

Damn it, he's right. Take a look at the guy from the BC Lions (above). The ground appears to be a close neighbour. And what's with the black yoga tights? Is he a football player? Or did he lose his way en route to a track meet?

I should have remembered that Doug Flutie was a quarterback in the Canadian Football League for several years. To say he is petite for a football player is an understatement: back when he was still a college player in Boston, he borrowed a friend's apartment and left behind a tee shirt. We all took turns trying it on and it was so tight on each of us that we looked like a bunch of Hooters employees.


The biggest guy on the team (#3 below) is listed as being all of 6 foot 3. What would that make the sprite he is hoisting in the air?



The guy who ruined my happy Parity Day, that's who. Now my Laura Secord chocolates taste just a little bitter.