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.

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.

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.

Asia Pulse is among a number of sources following the growing involvement of foreign private equity (FPE) in China's real estate market.

The venture capital company Zero2IPO is suggesting three reasons for the trend:

• Beijing real estate values are being impacted by the coming 2008 Beijing Olympic Games.
• The 2010 Shanghai World Expo is having much the same impact on real estate values in Shanghai.
• The idea that an adjustment in the value of the Yuan will eventually come, and will make Chinese real estate more valuable in terms of Euros, Yen, or Dollars, has encouraged many foreign firms to view Chinese real estate as a way of taking advantage of anticipated exchange rate changes.

Add to these factors the fact that many China firms are running short of the capital resources needed to invest in their own real estate market and the door to foreign firms seems to be opening wider.

Zero2IPO's latest research shows FPE involved in 31 separate real estate investments in China in 2006. Those investments had a total value of over US$3 billion. In the first quarter of 2007, real estate was the largest investment sector for private equity in China.

In addition to the influx of foreign investment, Hong Kong and Shanghai Banking Corp (HSBC) has begun pouring private equity into Mainland real estate through Hong Kong, according to the Hong Kong Standard. HSBC has created a US$700 million private equity joint venture fund with Hong Kong-based property developer Nan Fung to buy Mainland property.
See article.

Hello VentureBlog readers. Are there still any of you out there? My hat is off to folks like Fred Wilson who blog religiously on a daily basis. While I post a thing or two daily to my personal Vox blog, that's usually a picture, a quote, a video. Fully formed sentences are a bonus on my Vox blog. But what it lacks in structure and depth, it makes up in cute pictures and video of my kids. Sure, my mom is willing to read VentureBlog and pretend she gives a crap about liquidation preference because I'm her son, but when it comes to cute pictures of her grandchildren, she'll check that blog with OCD consistency. My mom's desire for more info on her grandchildren, however, is no excuse for neglecting VentureBlog. And so I return to the hallowed pages of VentureBlog (I hope it is more hallowed than hollow).

Do you ever read a newspaper column and get annoyed when it is just a bunch of little snippets without any overriding theme or structure. Lazy, lazy, lazy. Well, for the sake of easing back into VentureBlog, this post is going to smack of those lazy columns. Sorry about that. I'll try to do better next time.

First things first, welcome to the New and Improved VentureBlog. Do not be confused by its near identical appearance to the old and not yet improved VentureBlog (particularly if you are reading this via my RSS feed :)). VentureBlog is now running on MT4. There's been a ton said out there about MT4 -- lots and lots of praise for its depth, simplicity and beautiful new UI. I second all of that (and not just because I'm an investor). It is a pleasure to use and the MT team deserves a pile of credit for continuing to raise the bar for blogging software.

Not surprising to most of you, I'm sure, I spent the beginning part of this week at the TechCrunch40 conference. While folks like Walt Mossberg, Kara Swisher, Chris Anderson, John Battelle, make it look easy, the conference business is anything but. It takes a pile of planning, a huge amount of leg work, some real personality and a fair bit of luck to make a new conference work. But Mike, Jason and Heather pulled it off in a big way. The TechCrunch40 had the necessary mix of startup energy, investors trolling the halls, journalists chasing down stories, and ice cream bars. So congratulations to them for a great conference. If you couldn't make it to the TechCrunch40 and want to get a feel for the energy in the halls, Craig and I recorded a VentureCast show there that I am sure Craig will be posting shortly.

While I was at the TC40 event, I bumped into Michael Copeland. Michael is a great guy and an equally great journalist. It saddened me to see "Fortune" on his name tag. I don't have any problem with Fortune. I like the magazine and I'm thrilled that Michael is writing for them now. But it was just a reminder of the terrible decision by Time Inc. to shut down Business 2.0. The crew at Business 2.0 worked hard to understand and articulate the underlying trends that continue to power this round of Internet innovation. They weren't content to simply write about the fads after they had been outed by the blogosphere. They dug in. I was lucky enough to attend a couple of the Business 2.0 gatherings of their "Next Net" companies. They were lively debates orchestrated by Erick Schonfeld and the rest of the Business 2.0 editorial team. It is a shame that there won't be any more of those gatherings. Maybe Michael can carry the tradition over to Fortune. [I wrote this post on a plane this morning and then read this evening that Erick Schonfeld has joined TechCrunch as Co-Editor with Arrington. That is fantastic news for TechCrunch -- Congratulations to Erick, Mike and Heather.]

As is par for the course, I didn't actually spend much time in the conference hall during the TechCrunch40. But during one interesting session in which Marc Andreessen and Dave Filo were explaining to Chad Hurley how they invented the Internet, I peaked in and saw Eric Savitz in the front row blogging away madly. Have I ever mentioned on VentureBlog how incredibly great Eric Savitz is? He really is. Unfortunately, because he writes for Barrons he blogs mostly about the public markets. Somehow he managed to even make posts about earnings calls entertaining. And when he is blogging at things like TechCrunch40, his stuff is just awesome. If you haven't read Eric's blog, go check it out now. It has been really impressive how quickly his blog has become one of the standard bearing tech blogs.

As a bookend to Shameless Self Promotion Month, I should mention that over the summer I funded a great company called Jaxtr. Jaxtr is what I like to think of as "social telephony." You can put a Jaxtr widget on your blog, social network, eBay listing, etc. and enable click to call. Jaxtr then establishes a virtual phone number for you that is local for the person calling -- if someone is calling you from India, they get a local India number, same in Europe or China or Iowa. And because the number is virtual and lives on top of a voip platform, you can then control the destination of those incoming calls. It can come to your cell phone, your home phone, Jaxtr voicemail, whatever you prefer. Better yet, you can determine the path of the call by individual. These features are just the beginning for Jaxtr, which will increasingly take advantage of voip and the social graph (oh crap, I swore I wouldn't use that term) to create more control, leverage, cost efficiency and fun for users. I'm thrilled to be involved with the company (along side many of the earliest Skype investors). Incidentally, I did get a fair number of comments and emails telling me that Shameless Self Promotion Month sucked and that I should cut it out. Fair enough. We now return to our ordinarily scheduled program of pontification and sarcasm.

I guess that's enough for now. Sorry for the rambling. It is good to be back.