This is from last night.
I was thinking about the economy at large today and was wondering about the role of unit costs regarding employment. Finnish politicians are obsessively trying to put together a “society agreement” that would basically state that everyone collectively agrees on a certain set of measures to get Finland back on track.
The basic premise in this agreement is that we should be able to get a 5% bump in productivity. In the beginning it was stated that (quite poorly, to be honest) that people should work slightly longer to achieve this. It has since then turned to discussion about issues related to holiday pay and other benefits that would improve the mathematical output per cost.
The argument behind all this is that Finland’s unit costs have risen the fastest in EU since the last 10 years. This can be seen in the graph below.
It is believed that if we are able to get these unit costs down, we are able to push ourselves back to the growth track.
However, if there’s one thing that I’ve learned in working with UpCloud and previous companies is that there is never really any single reason that is holding back your growth or preventing you from achieving something. It is usually a group of smaller reasons that most likely aren’t obvious in the beginning.
It dawned on me that what if our unit costs doesn’t really matter? Unit costs surely matter on the public sector which has inflated quite a bit in the last 10 years, but keeping those down doesn’t help Finland’s economy grow. We need exports. Exports only happen when there are industries and companies creating products and services the markets demand.
What if the real issue is that we simply aren’t building things that the world wants?
Nor are the products refined to such a scale that the market is willing to pay a decent amount of money for them. Much of Finland’s exports currently are to do with very basic, highly competed industries. Top 5 goods exported, according to Statistics Finland, in 2014 were chemical industry products (23.1% of total exports), forest industry products (20.1%), metal and metal products (14.4%), machinery and equipment (12.8%) and finally – electric and electronics industry products (12%).
To me, these sound awfully low level goods regarding value creation. Forest industry products is certainly something where we can have somewhat of a competitive edge, but the others not so.
Here are the top five industries exporting in the US in 2014; machines, engines, pumps: (13.5% of total exports), electronic equipment (10.6%), oil (9.7%), vehicles (8.4%) and aircraft, spacecraft (7.7%). These top 5 industries account for 49.9% of all exports.
And our dear neighbouring Sweden for 2014: machines, engines, pumps (15.5% of total exports), electronic equipment (10.7%), vehicles (9.8%), oil (8.1%) and paper (6.2%). In total, these 5 industries account for 50.3% of all exports.
The top 5 industries in Finland account for 82.4% of our exports. I think the problem, when looked like this, is pretty clear. Our economy is incredibly skewed towards these large industrial companies.
I believe our problem isn’t high unit costs, but the structure of the economy dominated by only a few industries.
At the beginning of my summer holidays I decided to cut cords with some of the most notorious notification pushers – mainly Facebook. I disabled all of my mobile notification from Facebook except for direct messages and a couple of other more personal things. I’m happy to say that it feels like I’ve gotten my life back.
You only notice the difference when you make the “jump” and it’s refreshing. I don’t look at my mobile as often and when I do, it feels more meaningful. Part of this change is also my growing focus towards blogging and reading RSS feeds.
One interesting point of view I’ve picked up when going back to Facebook voluntarily to check out what people have been up to is that it feels like everyone is mostly promoting their own views on news and other events. Very few people share (or at least Facebook doesn’t show me those) what they’ve been up to and use it as a personal blogging platform.
I’ve also built about 15 or so lists based on different criteria and this helps me go back a little more and in little more detail to see what different groups of people are up to.
Since disabling all the notifications, I’ve also gone back to Twitter more and more. It’s so great when nobody is doing the filtering for you and you get the full firehose. Also, it’s been great to spend time with great blogs and read some longer form commentary and views on a multitude of trends.
It almost feels like, while it is built in and in Facebook’s interest, the marginal utility of spending more time with Facebook has long gone negative.
I listened to a really great podcast episode from A16Z (Andreesen Horowitz, the venture capital company) on the role of government and innovation. The guests on the show for this particular episode were Fred Upton and Greg Walden, of the Energy and Commerce Committee including the subcommittee on Communications and Technology. Among a lot of issues, they discuss the Telecommunications Act, originally passed in 1934 and revised in 1996.
What I especially like in this episode is the attitude towards innovation and how they wholeheartedly believe in it being the driver of good for all. I’m sure there is a lot of PR talk as well, but you can really see that these gentlemen are trying to build legislation that enables innovation and doesn’t suffocate it.
There’s a lot that European politicians and public organisations could pick up from this.
Google announced their Q2 results yesterday. I haven’t dug in too deep into them yet, but one figure that aroused my interest (and should probably interest everyone else in the online marketing and sales business) is Google’s traffic acquisition costs.
Q2 revenue for Google was $17,727M (that’s 17 billion dollars). Their traffic acquisition costs were $3,377M. More than three billion dollars to acquire traffic for one of the world’s most successful online companies. A quick search tells me that this is the money Google pays for partner websites in revenue share.
Google’s TAC is about 19% of its revenue for that quarter. One could also argue that this is Google’s cost of sales, but I guess some form of accounting laws require them to announce it like this.
Regardless – it’s a good reminder for everyone on the share of money to spend on marketing and driving your business. 20% may not seem like a lot, but not a lot of non-VC invested companies are pushing even that much into marketing.
This week I’ve learned first hand how much of a difference supported LTE bands can make between two internet connected devices. I’ve had an iPad Mini for a long time and use it quite often through USB tethering to give me connectivity for my MacBook Air.
Earlier this year I bought a OnePlus One – a superb Android phone. It was less than 300 euros and holds pretty superior specifications and technology, given how low cost it was. I’m really happy with the phone, but have realised when travelling outside the urban centers that it doesn’t quite well keep connectivity through LTE and keeps dropping to H+ or 3G.
On the other hand, the iPad Mini keeps perfect LTE connectivity and this led me to dig deeper why so. My iPad is model A1490 and it supports the following bands: 1, 2, 3, 4, 5, 7, 8, 13, 17, 18, 19, 20, 25 and 26. OnePlus One on the other hand supports “only” 1, 3, 4, 7, 17, 38 and 40.
I’m not an expert in radio technologies and how they enable internet connectivity. However, I believe the lack of bands does make a difference especially when outside of the larger cities. Pity, because the OnePlus One is a really good phone otherwise.
One of the most interesting content producers as of lately are the different venture capitalists that are blogging, podcasting and creating content in other ways. The venture capital business has become extremely competitive and they need to be active towards startups even before the startups require funding. Building a brand some marketers might say.
One of the best ones in this game is Andreesen Horowitz. Their a16z podcast series is phenomenal. Another great addition to this is Benedict Evan’s weekly newsletter (also part of the A16Z team). It’s a headline based newsletter with short commentary on the most important items.
In addition to companies creating content, venture capitalists in general are quite active as well. Perhaps the one I mostly admire is Fred Wilson. Another one I occasionally follow is Mark Suster with Both Sides of the Table.
With the push of the different social media services, it is easy to forget that that the web is full of longer commentary in a more readable format. I’m personally trying to get back to both blogging and reading blogs. I’ve begun to setup a feedly account with my most followed blogs for a closer look.
Venture capitalists are a great source of commentary since they usually reflect their personal backgrounds quite a bit and not their company. They follow the technology industry from a very unique position and hence, it’s interesting to read how they experience it.
Any other good VC companies or personal bloggers out there one should get accustomed to?
This year, I’m taking a little bit of a different kind of summer holiday. My wife’s working in July and I’m roaming the country side with my son. In the picture above, we’re in Helsinki at the Havis Amanda statue. We spent that day at the UpCloud office, working a little bit and welcoming a new employee to the UpCloud family.
I’ve always loved traveling a little bit and it does feel a little bit like I’m missing out on something this summer. However, that is all made up by the fact that I get to spend so much time with my son and working a couple of hours each day as well. It does feel like we connect on a lot better level than before the holiday.
It does hit you quite hard to realise how little time you spend with your kids in the end, when you begin to calculate it. Then again, life is made up of choices and I do love my work as well.
Being able to take a few steps back from the normal routines and enjoy an ice cream if we feel like it – that’s summer. And I do hope in the end – he’ll hopefully remember these as fun summers, regardless if he remembers the exact details or not. And that is what counts in the end.
I got tired of waiting around for the stable release of Lollipop from Cyanogenmod and decided to flash my OnePlus One with one of the CM12 nightly builds. I tried to update first to the CM12.1 Unofficial ROM, but this failed at flashing and I needed to try the official nightlies.
The official 3.4.2015 nightly build has been now running 24 hours or so without any issues and I’ve tried to utilise all the different functions of the phone. No problems whatsoever. A nice surprise was also that these nightlies support OTA updates, so if it keeps stable enough, you should be able to update your phone OTA without needing to install everything again.
Below are the intructions I used to update OnePlus One to Lollipop on a Mac OSX.
- Data cable
- Phone battery should be at least 80% full, just to be safe.
- Mac OS X Toolkit (download through one of the links)
- One of the CM12 Bacon (device name for OPO) nightlies from the Cyanogenmod Downloads.
- You’ll need either GAPPS or GAPPS minimal to get the basic Google apps on your phone (I went with minimal).
- Important: Have backups of all your files as your phone will be COMPLETELY WIPED/ERASED.
And here are the steps I went through:
- Fire up the Toolkit on your Mac.
- Connect your phone to your Mac with the data cable.
- First you need to select the “Unlock the bootloader of my OnePlus One” from the Toolkit. Follow those instructions carefully.
- Once you have unlocked the bootloader, do the next step “Flash a recovery”. I chose TWRP from Teamwin. Do follow the Toolkit instructions – they are simple and work well.
- Once you did this – root your OnePlus One with the next step in the Mac OS X Toolkit. Again, follow the steps of the Toolkit – they’re really sufficient and well done.
- Once you have done this step – add the nightly file to the phone. Also add the right GAPPS version to your phone. Make sure you’re adding just the zip-files. There’s no need to unzip them.
- Once the files are on your phone, make sure you have the “Update CM recovery” option de-selected in the Developer options menu under Settings.
- Shut off your phone and once shut off, press volume down and the power button combined. This should take you to recovery mode where you can install the nightly.
- Go to install and select the nightly file from your phone. Install that and once this has been installed, install the GAPPS-version you went with. Once these are done, reboot the phone and you should enter the Lollipop installation/configuration process.
- Now – go configure you’re phone. You are running Lollipop on your OnePlus One.
I did mess up on my own update process at some point and I needed to install the TWRP recovery app again after I had added the files to the phone. This is, because I entered Cyanogenmod recovery mode with the “volume down + power buttons” when I was trying to flash the files. CM recovery does not enable you to do this.
I’ve been super impressed with the nightly I’m on. Again, do all of this at your own risk.
Kiva sent me an e-mail this week thanking me for being a member of the service for seven years. Seven years is a long time in internet years, but Kiva is a truly world changing service that I wholeheartedly support. I can’t remember how or through whom I discovered the service back in the day, but I remember loving the idea from first visit.
The fantastic thing about Kiva is that it takes the internet and gives all the entrepreneurs who would not have the opportunity to leverage the wealth of the world to support them. It is the classic matchmaking service that internet works so well with.
Some of my achievements on Kiva include:
- $8.17 on credit at the moment
- $48.62 in outstanding loans
- $76.50 in total deposists
- $550 total amount lent
- 22 loans in total
- 32 loans by people I invited
- Lent to 14 of 84 countries on Kiva
One of my “investing” strategies has been to lend primarily to women and mostly in the retail industry. The reason I support women is due to the fact that I believe the success of the world really lies with the requirement of women to become equal members of our society. Education is important, but those who are able to bring food and financial aid to their families will most certainly have better chances at life.
This is also one of the reasons I really love Kiva. You can really help the people in need – all around the world.