Why is Facebook free?

Have you ever wondered why Facebook is free? If it's so awesome (free photo galleries with easy sharing after my holiday/wedding/party, allows me to organize events without calling/emailing/smsing, free games) and complicated (seems more complicated than my Gmail and I get more work done on Gmail than on Facebook), how can it be free?

Let's look at how the mechanisms within Facebook work to make it free.

In our digital distracted disembodied world, a Facebook "like" immediately triggers overly optimistic feelings and thoughts. The thought process for many people is: my (Facebook) friends they think I am very smart/witty/cool/beautiful, hence they "like" my status update to show their support. For companies, my customers must have "like"d us so much that they willingly broadcasted their "like" to all their friends. They did not do it for the free voucher or the chance to win a million dollars.

Let us put things in perspective. A Facebook "like" is a click of the mouse or a touch on a mobile device. A typical person goes to Facebook when they are bored at work/school, killing time on their daily commute or just trying to be non-productive. It is an action that takes less than 0.1 seconds and probably lesser mental processing time. The Facebook interface has already gamed Facebook users into mindlessly clicking "Show More Posts". A Facebook user easily reads more than 20 random status updates daily from "Facebook" friends. A "like" is inconsequential. The calculation of the value of a "like" should look like: 1/20 * 0.1 = 0.005.

It is in Facebook's interest to design an algorithm that both shows you updates from people who are close to you and from people who are not really active users of Facebook. The first group of people whom you are close to (easily identifiable by metrics such as the number of mutually connected friends, common tagged photos, common events, plays the same games as you, frequency of interactions within the Facebook platform.. etc) are of high value or interest to you. You want to know what is going on in their lives (how are their kids, where did they go for their honeymoon, are they feeling happy at their new job, are they still together..). The second group of people who are not as close to you are of interest to Facebook (or to the advertisers using Facebook). You probably added them due to social obligations at a random event. You are not really interested in what they think, say or do.

Facebook currently earns money from advertising. The only way it can guarantee money from advertisers is to ensure that Facebook users spend an inordinate amount of time on Facebook. Hence, for people who are not active users of Facebook, it will try to increase the likelihood that they will feel connected to their friends by introducing their rare updates to active users of Facebook. Active users like you (yes, you, the person who comments to everyone's status update with your pithy remarks and insightful musings about the fate of the universe) are very likely to do something. Therefore, it makes sense and cents to introduce passive users to active users, so that the network effect kicks in. The most valuable users to Facebook are those who are active and who are able to catalyze other people into doing things on Facebook. Facebook is really a good example of BF Skinner's psychological experiment (Skinner Box), where rats are trained to push buttons incessantly because the relationship between rewards and activity is not clear and randomized. For humans, you don't need to put them in a box. You just need a screen and an internet connection.

You are no different from a rat, who has been trained to push a button in a clever experiment with randomized rewards. Facebook is the digital abuse of humanity's primal need to feel a connection to another human being.

If you want to blame the increasing disconnect among human relationships, blame Facebook or the advertisers paying Facebook. However, since you buy the products marketed by the advertisers on Facebook..

If you think my reasoning is entirely flawed, just ask yourself - "Why is Facebook free?"

If you really want to be popular, be well-liked or to show care and concern to a friend you have not contacted in a long time, just try this. Facebook helpfully sends you birthday reminders. Take 5 mins for each friend, and call them to wish them happy birthday. Switch off your mobile phone and computer. Find a quiet place, pick up a fixed line phone and call (I know you need to write the friend's mobile number on a piece of paper which is an archaic concept, because your brain cannot remember mobile numbers anymore. It's a skill only present in older adults who cannot fathom the usefulness of Facebook.) Instead of the "marshmallow" (air and empty immediate sugary goodness) fleeting sense of achievement, you will feel more fulfilled and happy than giving out 200 likes (for "world peace", to support someone's bid to the next "XYZ", to stop the war..).

There are two benefits of doing that. Firstly, two people in the world will be happy and one will be pleasantly surprised. As people age, you will gradually realize that you are lucky to have had the chance to talk to that friend. It's a fact of life that people die and not entirely because of old age. Accidents happen. Earthquakes, tsunamis, nuclear reactor meltdowns, riots, wars, train wrecks, tornadoes, shipwrecks, cancer, heart attacks, muggings, fires..

Even better, write a handwritten letter.

Super human powers

I believe that humans possess super powers:

The power to love

The power to empathize

The power to forgive

The power to share and transfer knowledge

The power to transform dreams into reality

The power to break human limits

(Work in progress)

Bullshit filters from doing a startup

One serious side effect of starting a startup and digging into the trenches is that I've realized that my bullshit filters have highly evolved. (Note that in the title, I said I am doing a startup, but we've not exactly did anything outstanding.. no revenues to speak of and definitely not profits, just a lot of failures and lessons =) )

In the first place, I am a pretty skeptical person. This has been further enhanced by my 4 (5?) years in engineering school, where you quickly learn to drill down into the numbers about whether the thing will hold your weight or explode into your face. The bridge will collapse or the reactor will blow. There are no 2 ways about it.

The funny thing about introducing yourself as a startup co-founder is that you suddenly get pitched a lot (not as much as a VC, I'm sure) about new potential business ideas and partnerships. Well, I guess that's karma for having pitched stupid ideas to other people.. (Oops..) Now, I think our small team has gained a little bit of credibility just because we're still hanging around after 1 year. The internal joke among our team is that we are the cockroaches.. =p We try not to die by keeping our burn rate low and trying stuff out to see if it works (www.paulgraham.com/die.html).

Having blown away the smoke (social media guru.. cough cough), I tend to fall back on some wise words that many experienced businessmen/businesswomen once told us.

"It's 'Revenues - Costs'. Nothing else matters." I don't really care about what your idea is, as long as you quantify the additional sales it brings or the costs savings it will bring to the potential customers. If it's so fantastic, it should also have at least 1 client already committed to paying. If I see/hear unicorns and fairies, I'm riding my magic carpet out.

The other thing is that, I should be impressed by how well you know the industry surrounding the idea you are pitching. I should not know more people within the industry or more about how the industry operates than you.

Coincidentally, it seems that our team also follows a simple division of labour. We are either making the product or selling the product. Nothing else matters. There are no "idea" guys. Like my prof said, there is no market for ideas.

I'm also pretty convinced that there's no smart way or shortcut to do stuff most of the time. Just do it the hard way, and it almost always turns out to be the smart way. If all else fails, and the competition is more entrenched, has more resources, is smarter, than the only recourse is to work harder.

Customers are not users. Users are not customers. Customers are defined as people who pay you money. Period. If you can find users but can't find customers, you screwed. Customers are also defined as people that you can help in 2 ways: either add to their revenues or lower their costs. If that happens, they are extremely happy to pay you for your hard work.

A competitive advantage is not something theoretical from Porter's 5 Forces. A competitive advantage in reality is:

• Something that lets them do things faster, better and cheaper than you (the FBC test)
• A larger sales force (which means they can cover more ground than you) and that they can spend more time talking to each customer, making your customers feel highly valued
• A larger marketing budget, which means they can place advertisements left, right and centre in industry publications, conferences and on all the media channels
• More knowledge of the industry, which means they know the shortcuts which costs you effort, time and money to learn
• Insider knowledge - Nothing sneaky or underhanded, it just means that they might get wind of certain movements such as regulatory changes or someone having a large budget to spend in 1 week's time
• More experience in the industry, which means they know more people who have a business relationship with them, whom they can ally with to kill you off
• A more established reputation, which may translate to better credit terms, better discounts and preferential delivery
• More cashflow, which means they can kill you with a price war
• More assets, which means better financing terms
• A prettier or more attractive sales force (ever wondered why all the ice cream shops, dessert places, yogurt cafes almost ubiquitously have young servers? Or why the male private bankers all seem to be models in their previous lifetime?)
• A longer list of marque clients, whom will attract more marque clients, whom will attract more marque clients.. to infinity
• Infrastructure that is more efficient in delivering products/services to customers quicker and at a cheaper cost
• Better customer service, both before sales and after sales (after sales service translates to repeat customers and referrals, something which many don't grasp)

I'm also interested in understanding how people think they can start businesses if they can't convince themselves to survive on half their paycheck and not prepare enough cash reserves for 18 months of living expenses, just in case no revenues come in for 1.5 years.

There's nothing really for free. There is something called social capital, and it's hard earned capital. You better be doing a lot of favours for people around you, because you're not going to get much help when you need favours or introductions back. If you have been introduced by a friend, please don't cut out the person who made the introduction. The person making the introduction probably does not want anything from you, but just wants to be cc-ed at least for the first email just to ensure that contact has been made. If you are being introduced, make it easy for the person doing the introduction by writing a short introductory paragraph and be specific about what you need help for. Thank the person making the introduction in the email thread and remember to treat him/her a drink or a small box of chocolates/tea/something healthy.

It could be just timing, the wrong team or wrong execution. If it does not work for 2-3 years, just man (woman) up and try something different. A successful entrepreneur probably tries more than 10 businesses or project in his/her lifetime, and not all of them will succeed. So everyone has a failure now and then.. it's bouncing back that matters.

Also, just because you co-founded a startup or raised some money, you're not a hotshot. I feel that humility is highly under-rated as a virtue. Please feel free to smack me on the head if I ever get too inflated.

It also helps to laugh at yourself once in a while. Everyone makes mistakes, and startup founders have made one of the largest mistakes one can make in a life by trying to fit a lifetime's worth of work/stress within 5 years.

Don't lose your temper at a co-founder. It's one of the most unproductive and stupid things to do.

Once in a while, give a little (time or money) to charity. You don't really need that $1 and it's always handy to have tissue around.

There are 5 cent, 10 cent problems and there are half a million dollar problems. Choose carefully which problem you want to solve in your startup. Unfortunately, we have not found that million dollar problem yet, but we believe we are closing down soon.

If the cost of trying is low in terms of effort, time and money, just do it and don't think so much about it. Just write it off as a bad investment if it does not do well.

Sometimes, it's about the money and timing. See an opportunity, calculate the risk and returns, assemble a team, strike hard and fast, get out.

Sometimes, it's not about the money, but that you really genuinely have been thinking, living and breathing that domain for the last couple of years and you really feel that you have a unique solution that is Faster, Better and Cheaper. I don't think that you really need that much passion, but if all else fails, passion might be the only motivating force left. I've seen people attract great teams, just because of their enthusiasm. It's highly contagious.

There are a lot of resources out there. Probably, one of the most useful is the Startup Toolkit.

http://thestartuptoolkit.com/ It helps to ask you the questions you should have the answers to before even starting. Even now, we're still trying to fill up all the sections with both quantitative and qualitative data and we're still finding more customers. We need more doctors to sign up so that we can more accurately diagnose what makes them happy!

http://www.MedF1.com

Death by a Thousand Cuts

Lately, I feel as if I'm slowly bleeding to death from a thousand cuts. There have been miscellaneous annoying things and requests which have been taking up time, energy and mental space unproductively. This has led to frustration and unhappiness.

Henceforth, I shall develop a polite way to deflect such annoyances, so that I can focus on the more important things in life.

http://www.quora.com/Etiquette/How-do-you-politely-turn-down-someone-who-wants-to-grab-coffee-sometime

http://www.bothsidesofthetable.com/2010/05/17/learning-to-say-no-to-meetings/

I'm awfully sorry, but I need time to focus on learning and working on getting more sources of revenues into our startup, if it is ever to develop beyond its current embryonic stage.

Whenever I feel like this, I take a deep breath and go back to the basics of what makes me happy - learning from my mentors, working hard on something difficult to concentrate, getting some real work done, reading something mind-expanding, exercising, spending time with important people and finding my personal meditation spot on the Himalayans.

The face of global competition for young Singaporeans

Upon returning from Shanghai recently, it is with great shock, sorrow and trepidation that I became aware of the brief announcement that MM Lee Kuan Yew and SM Goh Chok Tong were stepping down from parliament. Many of their statements and comments about how the younger voters deserve a fresher perspective pained me greatly. The negative feedback from the public was especially appalling, given that some of them were made without context and without acknowledging the sacrifices, hard work put in by these 2 senior leaders. I question the media's exaggerated portrayal of the ignorant young voters seriously. If the comments featured in the papers are reflective of the general sentiments, we have a crisis.

Given that the choice to retire by these 2 senior Singaporean leaders (collectively, they have served a total of over 80 years in office, more than 3 times my years on earth) reflects the official recognition that Singapore is in a phase of transition, I would like to introduce from personal experience the real face of global competition that is faced by my generation. I have always wondered what this term meant as it is a popular term bandied about by the media and government. To me, it was unsatisfactory, abstract and difficult to grasp. This is an attempt to give human faces to the largely anonymous and ambiguous term "global competition". I have worked with these individuals before briefly and I claim with a large degree of certainty that I am able to give a frank assessment of their capabilities.

In my personal experience, "global competition" is real and I have witnessed it first hand. They are smarter, more educated, more hardworking, multi-cultural, multi-lingual, willing to forgo pay in exchange for learning experiences, humble and willing to push themselves to learn. They have a strong environmental and social consciousness. They are concerned with health and personal development. They are religiously tolerant and are able to connect emotionally with people from various backgrounds. They might or might not have privileged backgrounds, but they are firmly able to contribute to any organization or enterprise based on their own merits. They effortlessly fit into several major cultural and business landscapes of the world, be it in the United States, Europe or Asia (I have not witnessed Latin America and Africa, hence, I am unable to make any comments). Many of them started running their own organizations or companies, while being a full-time student.

I shall start my introduction in chronological order. Although I have not sought the approval of these mentioned individuals, I believe that they will not take offense. I consider it a privilege to have worked with them (or currently still working) and I have personally learnt much from them. I can only hope that they have similar opinions about me. Where possible, I have included links to their online profiles. Of course, they are my friends, so I will be a bit biased =)

America

Caroline Howe

http://www.linkedin.com/in/carolinelhowe

http://itsgettinghotinhere.org/author/carolinehowe/

I got to know Caroline through environmental activities a few (4?) years ago. She's been based in India for the last few years, first starting with the Indian Youth Climate Network. Since then, she's been on an electric car roadtrip across India and has recently started a startup focusing on environmental solutions. Spunky, full of energy, genuinely warm and smart, she has been dynamic and driving the cause of environmentalism among youths, organizations and corporates. She works both locally (India) and globally, through her links with the United Nations and international youth networks.

Education: Yale

Domains of knowledge: Engineering, Environment, Organizational, Media, Policy, Awareness

Languages: English, French

Places: America, India

Australia

Jack Fuller

http://www.learningandteaching.unimelb.edu.au/awards/features/jack_fuller

I met Jack around the same time as Caroline. He was kind of tall (compared to me.. short Asian guy), and funny in a quiet way. I am very happy that he was awarded the Rhodes Scholarship recently. He has experience working in Germany (green politics) and East Timor (building sustainable gardens).

Education: Awarded Rhodes Scholarship (Oxford)

Domains of knowledge: Environmental politics, policy

Languages: English, German, Tetum (I had to google this.. the language used in East Timor)

Places: Australia, Germany, East Timor, Malaysia

China

Li Li

http://www.cycan.org

http://baike.baidu.com/view/38325.htm

Li Li is another great friend. There's no need to introduce much about him, other than he headed a project to clean a river polluted by industrial sewage in his hometown, founded the largest youth climate network in China (China Youth Climate Action Network - http://www.cycan.org/) and has been working as a environmental consultant for several companies.

Education: Valedictorian (Outstanding Student Award), B. Eng, PLA Information Engineering University

Domains of knowledge: Information Engineering, Policy

Languages: English, Mandarin

Places: Zheng Zhou (Henan), Beijing, Shanghai, Indiana, Bangkok

Europe

Hungary

Pal Pastzrai

Pal came over to Singapore for exchange during his MBA programme. He also played waterpolo with the NUS Team and kicked our collective butts in the pool =) Don't mess with the Hungarians in waterpolo. They are unstoppable (although after drowning you, they are pretty friendly..) =)

I don't understand how he works on 4 hours of sleep everyday, while balancing studies, work and waterpolo trainings.

Education: CEMS Master's in International Management (Current), Corvinus Unversity of Budapest (best for Economics in Hungary)

Domains of knowledge: Corporate Finance, Strategic Management

Languages: Hungarian, English, French, Italian, Singlish =)

Places: Budapest, New York, London, Singapore

Thoughts

Four friends, unbelievable attitudes, great team players and leaders. They are all about 23 - 26, with much more experience than many of my peers. They have lived on at least 2 continents, 3 different countries and speak at least 2 languages. They are happy with being paid slightly lower or competitive market salaries, as long as there's learning opportunities and challenges (which, of course, being them, means that they want to lead, plan, manage and execute independent projects with real impact). There are many more friends with similar life stories, just that I've selected these few for brevity and breadth. They appreciate life, arts and music. They are humble and modest, many preferring to work in the background.

That is the global benchmark that is being set. I just hope I'm not too far from it.

Are we seriously that far from it? I doubt so. We possess a bilingual education, familiarity with both Western and Eastern cultures and a rigorous training. The hardware and training is there, but the crippling narrow-minded mindset, the audacity to take risks and the courage to uproot oneself into an unfamiliar environment is lacking. Can we break this national stranglehold on our imagination? Why are we limited unconsciously by our 710 sqm? We should at the very least, be active in SEA and Asia. We are more than able to live in any major city anywhere in the world, and be an global asset.

Why does the government want to attract global talent? Why do you think global talent attracts a premium? Well, if that global talent can speak 3 languages, has a network spanning 2 continents, works harder than you (12-hour days are normal), is better educated, is warm to people, open-minded, able to switch between different fields of knowledge effortlessly with actual execution expertise, is younger (has less liabilities), socially comfortable in different cultures and environments, why should that talent not get a premium? It's far cheaper to pay someone 1.5x the salary than hiring 2 people. While saving 0.5x the salary, that person may even generate more business through new ideas, contacts and knowledge sharing.

I hope that more people are aware of the global benchmark. From what I know of them, these friends are not stopping for a break. They are relentless.

Putting together Getting Things Done (GTD) and Evernote

The link to the Google doc is here: https://docs.google.com/document/d/1pLF4UemiBsT5RJqK5oF_v8ZsI1Jp46VkN2ajOn33PIo/edit?hl=en_GB&authkey=COSuqsUE#

It contains a list of tips, tutorials and helpful videos.

I've been thinking of trying out Evernote and the "Getting Things Done" (GTD) workflow organisation method. This is intended to be a condensed guide to the best articles that introduce you to both Evernote and GTD. I've freely copied from various sources. For more details, please look into the references.

Introduction to Getting Things Done:

http://www.getrichslowly.org/blog/2006/11/06/getting-things-done-how-to-take-control-of-life/

Done by Scott Moehring

PDF: http://www.getrichslowly.org/forms/GTD-diagram.pdf

Flowchart taken from:

http://www.komarketingassociates.com/blog/wp-content/uploads/2007/11/gtd_chart.png

The Google doc is open to anyone with the link, so feel free to share it and update it =)

We need leaders, not politicians

There is election fever in Singapore currently and it comes with its usual media storm of snarky online anonymous critics. Somehow in this maelstrom, I feel the real issue has been ignored.

The real issue that we should be focusing our passion, intelligence, collective wisdom, ingenuity and courage on should be the issue of producing leaders at every level of society, in every organization, in every community, in every school and in every family. This does not depend on which party you come from, how much experience you possess, which organization you are a member of, the current job scope you are covering, which school you come from, how much wealth you have accumulated, whether you are a Singaporean citizen or not. These are artificial dividing classifications that arbitrarily cause us to forget we all live on a tiny utopia, seemingly well insulated from the barrage of financial crisises, natural disasters, civil strife, war, religious conflict, corruption and terrorist attacks. Our daily grouses consists of not being able to board the first train that comes, wondering why the price of food has increased by 20c, complaining that housing is getting too expensive and debating about the melodramatic characters in the evening TV drama serials.

We need leaders, not politicians. The term "politicians" brings to mind a calculated career choice, with connotations of mudslinging, petty political snubs, baseless rhetoric, endless machinations and maneuvering in an ever-consuming power struggle, alliances and carefully cultivated relationships. It carries the miasma of empty promises, under-the-table benefits, allegations and counter-allegations, thunder and fury. Where is the heart, the joy of service, the determination to set a leading example, the conviction to do the right thing, the courage to admit to the inherent human tendency to make mistakes?

For those online anonymous critics, please remember that your remarks are targetted at a real person with feelings. Before you make a another intelligent comment, mentally check whether you have ever taken up a leadership role in your daily life and whether you are qualified to criticize. If your comments do not enhance the debate that relentlessly drives the quest for better leadership from all our political, social, religious and business leaders, please refrain.

Just imagine the impact of everyone performing simple acts of leadership everyday. Just stop blogging, tweeting or updating your Facebook status for just 30 secs, and imagine. We can move on to discuss more salient issues such as current events and impactful long term trends. What can we do to balance our economic aspirations and environmental impact? What should we do about reducing our oil dependence on volatile supplies? How should we take precautions against shady financial products that do not create value? How do we adapt to a world where the global power order is undergoing upheaval? How do we remain relevant to China and India? What should be our role in South-East Asia? How do we drive the creation of more home-grown innovation, given that MNCs are placing more emphasis on China and India? How should we ensure that everyone gets a chance to enjoy a comfortable standard of living, work in a fulfilling capacity and develop a social consciousness? How do we manage the problem of an aging population? What is our culture and national identity? How do we preserve the best of our combined Asian heritage? How do we improve our education system so that kids learn how to learn, rather than rote learning? We can take action. We can fail, we can learn from our mistakes, we can improve on every iteration.

6 million leaders, that is a force to be reckoned with.

We need leaders.

The Dalai Lama was asked about what confused him about humanity

The Dalai Lama, when asked what surprised him most about humanity, answered:

"Man.. Because he sacrifices his health in order to make money.

Then he sacrifices money to recuperate his health.

And then, he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die, and then dies having never really lived."

Submission for YES! Funding to Spring Singapore - Spring has shifted to Fusionopolis!

For people applying for YES! Funding, please note that their office has shifted from Bukit Merah to Fusionopolis. Luckily, I did not mail our application in, but I went down personally.

Their new office address is:

1 Fusionopolis Walk

#01-02 South Tower, Solaris

Singapore 138628

Tel: 6278-6666

Take the MRT to Buona Vista MRT, then take the Biopolis shuttle bus. Alternatively, cross the road and take 91 from opposite the train station.

Conversation fragments from CNY 2011

"So cute! What's your name?"

"How old is he?"

"How old is she?"

"Come, let me give you an angpow.. Aiyoh, angpows cannot be eaten.."

"Come, wish Uncle, Aunty happy new year!"

"来，阿妈抱抱！“

"Don't let her fall!"

"Do you want a soft toy?"

"Must be sleepy.. Nap time is over.."

"Don't be scared.. These are all your relatives.."

"Mumm mumm.."

"Last semester? Good ah, graduating already.."

"Wah.. can earn money already.."

"So many of them getting married this year.. one after another.."

"So hard to book the hotel.. Must book way in advance.."

"Eat first or 'ban lat' first?"

"Hey, how come so-and-so never come?"

"This brand of cholesterol pills are sold at NTUC.. "

"Our family has history of high blood pressure.. so must take care of diet.. "

"Only when you do CT scan, then you can detect lung cancer, normal x-rays cannot detect it.."

"The cancer spread to the spine.. At first, she thought it was rheumatism.."

"The doctor said: 'Let her eat what she wants to eat..'"