I first came across the members of the Homebrew Crew jamming at some random bar in Auckland’s Queen Street many (many) moons ago when they had another concept ensemble called @peace (seriously dope sound). Naturally, the music and their flow appealed to me and has left an impression ever since. Close to a decade later, I still find myself scavenging through the halls of Youtube to pick out their sounds.
This is one particular session I come back to time and time again. A live recording at the Red Bull Studios in Auckland called the ‘Sundae Sessions’. The lyrics are loaded but it goes well hand in hand with a beer on a Sunday afternoon.
Enjoy the listening.
Just for the record – I highly rate underground Kiwi Hip Hop. I don’t rate underground Australian Hip Hop sound though, I’ve always found the annoyingly too accent heavy. Not that there is anything wrong with that, it’s just a personal preference.
In the end,
we all come back
of our missing pieces
– It taunts us every day.
Our bedroom mirrors
Take peace from us.
That there is another world
-Inside of us
We are still looking.
Never quite seen.
Across foreign lands.
– We are hidden,
In distant lands,
Between what you want to see
And what we let you see.
We see what we remember,
But we forget too.
So I carry a bilas bilum
And she wears a meri blouse.
Seeking approval from the mirror
Before we head to the day:
Maski, yu wait meri pinis.
Maski, yu wait man pinis.
Our bedroom mirrors
Are missing pieces.
Reflecting what’s missing
Inside of us.
It takes the peace from us,
Leaving us anxious
– Hans Lee
Where I wrote this….
￼Article first published in Venture CFO on January 22, 2015.
What is the Difference Between Creating and Capturing Value?
I recently heard an entrepreneur speak about the founding and growth of his company. It was a fascinating and instructive story overall, but he mentioned one concept that I’ve been mulling over since. He talked about the difference between creating value and capturing value. ￼
This topic came up when asked how he decided when to take outside capital and how much. He described how he, as a founder, is focused on building value in his company. As he was looking for capital, he found that most potential investors, including venture capitalists, were more focused on capturing value. He found this to be a problem because he believed that capturing value too early would inhibit their ability to create value.
I’ve been thinking about how VC’s and other investors can help entrepreneurs both create and capture value.
First, what does it mean to create value?
The activities that make up the economy are not a zero-sum game. Gains in one area do not have to come at the expense of losses in other areas. The economy grows, and value is created, when entrepreneurs create outputs more valuable than the sum of the inputs.
The process of creating value can include focus on the following:
Creating a network effect. Some products become exponentially more valuable with more users. The classic example is the telephone. One telephone in the world is worthless, but that one phone becomes more valuable as more phones are placed into service. More recent examples include Facebook, Twitter, and other social media sites. Some of these companies created billions of dollars of value even before turning a profit because of the number of users they have been able to attract.
Building brand strength. The stronger the brand, the more a customer is willing to pay for a product. A brand is built over time through marketing and a reputation for high quality and good service. Apple is a good example of value created through brand strength. Consumers are willing to pay more for Apple products than comparable products because they trust the brand.
Developing efficient operations. Manufacturers create value by selling a product for more than the cost of the materials, labor, and equipment needed to produce the product. The more efficient the operations, the lower the cost of production. The lower the cost of production, the more value is created. Value can be considered both the profit to the manufacturer and utility for the customer relative to price.
Second, what does it mean to capture value?
Agriculture easily illustrate the difference between creating value and capturing value. Farmers create value by planting and growing crops. However, creating a valuable crop doesn’t do any good unless the crop is harvested and sold.
Value-capturing activities include:
Monetizing users. Social media companies often struggle with capturing value. Twitter created enormous value by rapidly building a large user base, but they have struggled to capture the value through monetization. Facebook’s stock has been surging because they have found effective ways to monetize through advertising.
Pricing effectively. The value of a strong brand and efficient operations can’t be captured if the product isn’t priced appropriately. Again, Apple is a great example. They earn high margins because of their brand strength and quality product, and they protect these margins by controlling their high pricing carefully across all distribution channels. It is difficult to find lower than usual price on Apple products.
Providing liquidity to shareholders. A company can capture value by monetizing users and pricing appropriately, and then they can pass on that value to shareholders by providing the ability to sell the more valuable shares. This can be done in many ways. Profits can be distributed through dividends. Private companies often raise money at higher valuations and allow new investors to buy out existing investors. The goal of public companies is to allow investors to capture value by increasing their stock price.
Real Value Must Be Created Before Being Captured
Both creating and capturing value are necessary, but it’s important to recognize where to place your focus at a given stage in your company’s growth.
In general more focus should be placed in the early stages on creating value, and as sustainable value is created, some attention can be turned to capturing that value. Even while capturing value, management should stay continually focused on creating value, or the ability to capture value will be short-lived.
Beware of artificial value, such as that created by financial engineering. Failure to recognize this distinction is one of the causes of the housing bubble and subsequent economic collapse. Low interest rates and creative financial products led to a flood of capital into the housing market. This caused housing prices to artificially inflate, creating the illusion of value creation.
Banks allowed homeowners to capture that “value” by borrowing against the inflated value of their homes. The illusion was eventually exposed, leaving behind severely underwater mortgages and general economic disaster.
Entrepreneurs and investors should work together to recognize the distinction between activities that create and capture value and prioritize their resources effectively. As they do so, they will be able to maximize both the value created and the value captured.
Question: What are other value creating and value capturing activities?
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Behind Steel Bars
Steel bars line the edge of this world.
Clad, cold, courage,
rust bearing steel bars.
Vestige reminder –
the colonial knights armour,
there is faith in steel.
Guard conscience, pray they
from perils that lay await.
Still, idle imagination loiters.
Give colour to grey steel bars.
Keep safe, this world.
Guard against, the light of night
Come what may.
Tall – stand picket.
Poke sharp, the heavens soft whites.
Reach high, the blue distant moun-tains
Or is it sky?
Picket steel bars,
Yet, the darkness in day
pierces the safety of this
@ Hans Lee
Where I wrote this
This piece was written in one sitting at the Airways Hotel in Port Moresby. I was looking for place to sit, read and write and this was the only (third) space that I could really work in. I highly recommend it, though I don’t know how busy it gets here – I was lucky enough to have it all to myself (and the security guard) while I wrote.
As you may have guessed it already, coffee definitely had something to do with this post. Nothing like a bit of caffeine to get the creative juices flowing.
Why I wrote it
At the time of writing, I was reading Dr. Steven Winduo’s book, The Unpainted Mask, which had weaved through the stories these ideas of objectivity and reflection. Telling his story from the first person, he observed the irony of the residents in Port Moresby who work to be part of a life that was ironic, bordering moronic, according to him. People who work so hard to keep an image that is expensive to maintain (the masks).
It made me reflect on where I was at in that moment of writing, looking out into the distant natural landscape through steel bars designed to protect me. From what? Well that was just it, I didn’t know. Maybe it was to protect my conscience from whatever was out there. In the distant was the cloud and blue mountain (or sky) but in the foreground was the protruding steel picket fence.
I was taking refuge behind these fences to carry out the art of being this version of me. It is definitely part of this Journey Home for me. I can’t say anything because I am (unfortunately) part of this group, but I shed no regret for this lifestyle. I wouldn’t be who I am, writing what I write, if it were not for my experiences.
I’ll leave it at that.
@ Hans Lee
I watch dusk descending
before a mountainous silhouette
casting shadow upon shadows-
a reprieve from summer sweat.
A city flickers on.
In tune – a deft chorus.
Homes light up. Car lights on.
Street lights up. Guide lights on.
the rust-stained sky,
glimmer into the evening
under a sea full of stars.
Or more like cane fields alit
Emanating too much heat.
Twinkling ambers into the dark-
nest-ling the now auburn sky.
But this is the wrong time of the year
in the city in the far north.
Am feeling soo hot
Like I need water.
Like aquarius in January.
Unable to bear
85 per cent
Another southbound traveller’s passing nod.
As if warned:
“Avoid the summers in the north”.
These are memories of a city in the Far North.
And I am fanning
temp’l and brow.
Awaiting an evening concert.
No sudden moves.
a broken metronome
to a cacophonous evening choir in legato.
Flying fox screaches
to-ambient mosquito hums
interject cicada cries
to cane toad drums.
A slither in the grass
sounds a curlew panic.
A flutter in the branches
Takes off into the darkness.
The soundtrack of
summer nights flickering
from my verandah.
And it is still hot.
This is the city in the Far North.
Waiting for the winds to change,
for long summers to end.
For days below 25 degrees.
For palms to bristle
in the breeze.
To cool the space
between temp’l and brow.
To give me reason to rise
from the sway of my hammock.
For right now,
It is early evening
It is the mid of summer
It is the city in the Far North.
-by Hans Lee
Light of the world
She, the light of the world.
He watched her rise and set.
They met at church as most do.
And then again on bus rides to school.
Then at markets. Then in shops.
On Facebook. Through text. Over phone calls.
Rising together till she fell.
And she refused his advances one day.
So he stained her cloak with fear one night.
Her sun never rose there after.
As she lived by the fear of light.
She burned her cloak, to hide the stains
When his family paid the five hundred kina.
Forgive and forget, her Pastor prayed
God punishes because we are all sinners.
And he sniffed at some white stuff.
Thought he was the right stuff.
And clenched at his heart one day.
– Myocardial Infarction
The coroners transcription.
Was all that was needed to say.
That’s when they came for her.
In the thick of her fear,
Extinguishing her light from the world.
The lawyers, the police.
The accountants, the priests.
They chanted our ancestors words.
You, the girl who witched his heart.
The doctor said “you broke his heart”.
You deserve to die, the witches way,
The girl who lived, by fear of light.
I wrote this poem with a lot of hate and disgust at a part of Papua New Guinean society that I can’t reconcile with who we are as a modern nation. For all we strive to be – holding on to our culture and customs and celebrating it – we are also still held back by the fear and deeply entrenched superstition that we harbour in the undertow of our conversations. I don’t mind being controversial here because someone has to be.
Something is seriously munted as shit if superstition is being treated as grounds for a criminal offence. Continue reading “#44 Poem: Sorcery Related Violence in PNG”