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Bitcoin Session
by Adam George
October 16, 2014
At the 15th annual World Knowledge Forum, three major pioneers of the recent Bitcoin phenomenon gathered to enlighten the audience on this new cryptocurrency. Jinyoung Lee Englund, Director of Marketing and Communications for the Bitcoin Foundation, was joined by Roger Ver, CEO of Memory Dealers and one of the first investors with Bitcoin, and Jonathan Mark Southurst, the Editor for the Asian Region of CoinDesk.
Mr. Ver described Bitcoin as “indestructible, uncontrollable money that anybody, anywhere in the world can instantly use without having to ask for permission.”
A virtual form of currency marked by its lack of regulation and adamantly supported by its users, or “miners,” Bitcoin could enable anyone in the world to make any kind of transaction with any other user if it achieves widespread adoption.
“The supply of Bitcoin is limited, but not because of politicians. It’s limited by the laws of mathematics,” Mr. Ver stated. “I think everyone in this room is smart enough to know that we can trust mathematics more than we can trust politicians.”
After Mr. Ver examined the utility of Bitcoin, Ms. Englund focused on how the essence of Bitcoin mirrors the goals President Geun Hye Park presented in her 2013 joint address to the Korean congress. Ms. Englund firmly believes that Bitcoin can help Korea maintain the center stage of innovation.
“The creative economy is what we needed to jump-start Korea’s economy again,” Ms. Englund avowed, echoing President Park. “China is quickly eclipsing Korea in innovation; Korea needs new ideas in order to jumpstart its economy.”
Ms. Englund also looked at the benefit of zero regulation within Bitcoin, explaining that with other payments, like credit cards, a third party must always intervene, approve, and record the transaction. This is not the case for Bitcoin, which has eliminated the necessity for the third party.
“Whenever you take out the middle man, you reduce cost and increase options for the consumer,” she said.
Following Ms. England’s comments, Mr. Southurst addressed some of the negative responses Bitcoin has received and dispelled concerns with the fiat currency.
“There are a lot of people out there who disparage Bitcoin…[but] these are literally the guys who, in the 90s, looked at the Internet and saw no value there,” Mr. Southurst claimed, referring to two prominent individuals who have vocally criticized Bitcoin.
Mr. Southurst then compared the narrow-minded perception of Bitcoin’s initial stages to that of personal computers in the 1980s: “Everyone approached it with fear and awe, not knowing how to possibly fathom such a creation. But now we can control it, without having to acquire any licenses or approvals. The same will apply to Bitcoin,” Mr. Southurst assured.
After their opening statements, the panelists converged on the idea that governments should embrace Bitcoin and avoid limiting people’s ability to take part in the virtual transactions. In fact, Mr. Ver questioned the qualifications of any government that decided to abrogate the use of Bitcoin by its people.
“Even if there is only one country with a free market exchange of Bitcoin, that will set the market price for everybody else around the world,” he said, “and anyone with a smartphone will be able to use Bitcoin.”
Upon the conclusion of the session, all three panelists agreed on the need to help push Bitcoin towards the mainstream and jumpstart a new economic trend. Mr. Ver even offered to send anyone willing to participate 1,000 Korean won at the end of the talk in the form of Bitcoin, hoping to ignite future Bitcoin miners. With the need for global collaboration rising, Bitcoin could easily pave the way for more innovations worldwide.
A Tale of Two Finances: Finance 2.0 in China
by Adam George
October 16, 2014
Dr. Liu Qiao started off his discussion on the financial history of China by changing the title of his lecture at the 15th Annual World Knowledge Forum to “A Tale of Two Finances: Finance 2.0 in China.” Dr. Qiao explored the nature of China’s past economical depression, and then shifted focus to the positive future in China’s grasp.
“Right now, there are more than 50 million companies in China, but only about 10 percent can get financial support from the current financial system,” Dr. Qiao explained.
A lack of efficiency and a focus on fame in the form of the Forbes 500 list has propelled the Chinese companies into a downward spiral as of late. Companies only looked at achieving a certain number in sales rather than taking into account the importance of investments and the return on invested capital (ROIC).
“Greater China has 100 companies entering this 500 list, accounting for 20 percent of this total list…Of the 100 companies, 16 of them are losing money; they don’t have any profit, but they’re so big and so huge that they can’t fail….The financial system supports this kind of mentality, so it boosts lots of credits to their size,” Dr. Qiao said.
While this method for finance seemed to work initially, the economy currently grapples with the repercussions of poor investing and returning. Banking systems normally provide financial loans for starting companies, but banking unfortunately accounts for a large part of China’s debt in the GDP. Because of poor investment decisions, banks can no longer fund startups as much.
“Finance 1.0 is a trouble maker, so we need a new financial reform and system in China,” Dr. Qiao said. He then looked to ways Chinese companies have begun to put an end to this and embrace a new China 2.0.
Dr. Qiao assured the audience that a new surge of finance has been detected in China. Peer-to-peer startups, or P2Ps, are small loaning companies that advise customers on where and how to invest their money efficiently.
“[The] cost is very high, as high as 30 percent, but it’s efficient; [it] takes a couple of days to process an application and then receive the loan,” he explained.
Because of this efficiency, other companies have caught on and have taken it one step further. Alibaba, for example, advises customers on how to efficiently invest any extra money they have in their account and generate a relatively higher yield in return. The achievement can also be viewed online, giving the customer a stronger sense of autonomy and success at their own fingertips.
“This whole process takes 3-4 minutes; a very pleasant experience,” Dr. Qiao said of Alibaba, which sets the company apart from its competitors.
Dr. Qiao’s appreciation of Alibaba and the P2Ps in China demonstrated his optimism for the 2.0 finance plan and encouraged more support for innovations within the country. Multiple municipalities compose the nation of China and each can have a large influence on the economy. By finding a way to support innovations in this area, more ventures like Alibaba can lead China to its coveted 2.0 finance.
By focusing on the issue and efficacy of money efficiency, Dr. Qiao hopes that the Chinese economist will recognize the importance of investment and promising returns to ensure a more stable and fruitful China in the years to come.
Startup Step 1: Developing Your Ideas
by Adam George
October 16, 2014
Mr. Kanishk Parashar, the CEO and founder of Coin, a startup that has combined multiple forms of payment into one mobile device resembling a credit card, described the process to successfully creating your own business by developing your idea.
Born in India and raised in the US, Mr. Parashar owes most of his experience in entrepreneurship to his time in Silicon Valley, as he traveled there to find a job. From that point on, he said he learned the tricks of the trade through failures and needed to keep focus on the importance of commitment and endurance. Prior to Coin’s success, Mr. Parashir said he had experienced nothing but disappointment.
“I had already founded at least five other [start-ups] that had completely failed…I was so tired of failing…[But] what I’ve learned through Coin is the ability to shake off failure, take ‘no’ for an answer.”
This process, he said, ultimately paved his way to understand how to produce a successful, effective and impactful startup.
Mr. Parashar also emphasized that certain sacrifices must be made in order to maintain one’s focus. Before founding Coin, he cited his work with a startup that failed due to his engagement in secondary activities. He said all other potentially distracting activities that could take away from one’s focus must be removed in order to facilitate the development process.
“The focus is absolutely necessary; when I started Coin, I quit everything, [going] as much as I could go,” he said. “At 8am, start working; 2am go to bed; 8am, go to work.”
Mr. Parashar stated that once the commitment to a startup has been established, insights into the specific business realm will undoubtedly reveal themselves and propel the startup forward. He said this is the second step, and described the necessity of finding the right guidance in the payment sector in order to make Coin a better product.
“Introducing new technology into the payment landscape is like changing the rockets engine and modifying it to be better while it’s in flight. You cannot change something while it’s moving, so you have to do more to attract consumers to your products,” he said.
In order to help distinguish these new insights, the startup must consist of a team of qualified and diverse people. But overall, Mr. Parashar affirmed the importance of trust within the team and the struggle to find people with the right skillset.
Resources in the form of money or connections are chiefly important as well, according to Mr. Parashar, as he commented on his own travails in trying to support his startups financially.
“I sold my car so I could have $30,000 to make prototypes,” he said.
In time, however, Mr. Parashar’s prototypes found willing investors.
“[It] took about 6 months for there to be interest in our prototype…and eventually the zeroes were added [to the investors’ donations],” he said.
In concluding, Mr. Parashar stressed that a strong belief and passion in your product will thrust your startup to new heights.
“[You] need to be able to say every morning that I’m very happy and I wouldn’t want to be doing anything else,” he said.
As Mr. Parashar looks to the future, he hopes to continue to make products, like Coin, that people will care about and have a great impact on the world.
Mr. Kanishk Parashar, the CEO and founder of Coin, a startup that has combined multiple forms of payment into one mobile device resembling a credit card, described the process to successfully creating your own business by developing your idea.
Born in India and raised in the US, Mr. Parashar owes most of his experience in entrepreneurship to his time in Silicon Valley, as he traveled there to find a job. From that point on, he said he learned the tricks of the trade through failures and needed to keep focus on the importance of commitment and endurance. Prior to Coin’s success, Mr. Parashir said he had experienced nothing but disappointment.
“I had already founded at least five other [start-ups] that had completely failed…I was so tired of failing…[But] what I’ve learned through Coin is the ability to shake off failure, take ‘no’ for an answer.”
This process, he said, ultimately paved his way to understand how to produce a successful, effective and impactful startup.
Mr. Parashar also emphasized that certain sacrifices must be made in order to maintain one’s focus. Before founding Coin, he cited his work with a startup that failed due to his engagement in secondary activities. He said all other potentially distracting activities that could take away from one’s focus must be removed in order to facilitate the development process.
“The focus is absolutely necessary; when I started Coin, I quit everything, [going] as much as I could go,” he said. “At 8am, start working; 2am go to bed; 8am, go to work.”
Mr. Parashar stated that once the commitment to a startup has been established, insights into the specific business realm will undoubtedly reveal themselves and propel the startup forward. He said this is the second step, and described the necessity of finding the right guidance in the payment sector in order to make Coin a better product.
“Introducing new technology into the payment landscape is like changing the rockets engine and modifying it to be better while it’s in flight. You cannot change something while it’s moving, so you have to do more to attract consumers to your products,” he said.
In order to help distinguish these new insights, the startup must consist of a team of qualified and diverse people. But overall, Mr. Parashar affirmed the importance of trust within the team and the struggle to find people with the right skillset.
Resources in the form of money or connections are chiefly important as well, according to Mr. Parashar, as he commented on his own travails in trying to support his startups financially.
“I sold my car so I could have $30,000 to make prototypes,” he said.
In time, however, Mr. Parashar’s prototypes found willing investors.
“[It] took about 6 months for there to be interest in our prototype…and eventually the zeroes were added [to the investors’ donations],” he said.
In concluding, Mr. Parashar stressed that a strong belief and passion in your product will thrust your startup to new heights.
“[You] need to be able to say every morning that I’m very happy and I wouldn’t want to be doing anything else,” he said.
As Mr. Parashar looks to the future, he hopes to continue to make products, like Coin, that people will care about and have a great impact on the world.
The Road to a Creative Economy
by Adam George
October 15, 2014
On October 15, 2014, Dr. Andrew McAfee, principal research scientist and associate director for the MIT Center for Digital Business, Ben Casnocha, best-selling author and technology entrepreneur, Yigal Erlich, the founder and managing director of the Yozma Group, and Jung-hee Ryu, CEO of FuturePlay, gathered to discuss the values of entrepreneurship and how to establish it in any culture.
Mr. Erlich, of Israel, spoke first on the recent success Israel has experienced in venture capitalism.
“It’s a teamwork, and that the team consists of the right people – creativity characters, the interpreter, someone who pays attention to details, and someone who can understand the organization and how to move things within the company,” he said.
Because of the government’s involvement in funding such entrepreneurial startups, Israel has created the right environment from which tech-based companies can emerge.
Mr. Casnocha also cited the importance of creating such an ecosystem.
“The people who must build entrepreneurial ecosystems…are the entrepreneurs themselves. Entrepreneurs must be leaders of their own community, organized together and promote the shared cause,” he said.
In addition to embodying the leader, entrepreneurs must realize the time and effort it takes to become established and the importance of being celebrated, Mr. Casnocha noted.
Mr. Ryu agreed with Mr. Casnocha, but recognized that Koreans “prefer secure and stable jobs over adventurous startups.” This explained the hesitation people face with starting their own business.
“We need more international collaborations and learn from Israel,” Mr. Ryu said, citing that Korea has all of the necessities for a startup, from high-speed internet to government funding, but is lacking in international involvement.
Mr. Ryu commented more on the fear of failure in the Korean culture, saying that people generally grow to hate the face of a product, should it fail.
“In the Asian cultures, [people] cannot differentiate the individual and individual’s work,” he said, implying that people do not want to meet that problem and ultimately turn to other, less entrepreneurial venues.
“Most countries would love to have [Korea’s] problems,” Dr. McAfee reassured the audience, saying that Korea’s current state is rather positive. “[We need to] take these strengths and try to leverage them and go in a more positive direction.”
Israel, a prime example of international collaboration, experienced a successful surge of new companies in the past 30 years. Mr. Elrich stated that 300 multinational companies came to Israel seeking acquisition of the companies, but didn’t take the technology. Instead, these companies remained and grew with the funding of the Israeli government. The process, amounting to five years, significantly helped the companies to flourish.
This funding may seem daunting for any aspiring entrepreneur, but the panelists fervently assuaged any fears. Starting a company is “easier and costs less than ever before,” Mr. Casnocha assured.
“The money is getting easier and easier to acquire…[with a] worldwide surplus of savings,” Dr. McAfee agreed. But he warned that finding smart money to invest in any business is becoming difficult as a way to secure favorable returns.
The panelists concurred on the importance of entrepreneurial education, not just on the foundations of the business model but from within the culture as well. Mr. Casnocha argued that, in order to effectively change a culture, one must spend time outside of it.
“Spend time in a [different] culture that has [a specific] trait and try to soak it all up, and then come back to the culture that doesn’t have that trait and try to infect everyone else, just like a virus,” he said.
Dr. McAfee also maintained that the education system must face a renovation. By contrasting the free-spirited learning model of the Montessori schools and the rigid structures of universities, including MIT, Dr. McAfee concluded that the strictness of his university education turned off his ability to be creative.
Drawing upon conclusions reached through his colleagues’ research, Dr. McAfee emphasized the need for innovation in education in order to encourage more creativity.
“When [a student is] sitting in a classroom, absorbing information, it’s worse than if their brain is asleep,” he said.
All panelists agree that in order to foster more entrepreneurship within a country, the education to do so must start in school. As a society, they said we must celebrate, educate, and encourage those willing to take the leap into starting their own business and pave the way for those around them.
David Epstein: 0.5%: The Margin Between Good and Great
by Adam George
October 15, 2014
David Epstein, author of The Sport Gene, presented his platform for excellence within sports on October 15, 2014 at the 15th annual World Knowledge Forum in Seoul. Mr. Epstein’s research focused on the importance of sampling and the dangers of hyper-specialization in athletic practice.
While athleticism may only apply to a small number of people, Mr. Epstein expressed hope that his work will eventually influence other areas.
“[My research focuses on] high performance in sports, because I think it relates to high performance everywhere,” he said.
Mr. Epstein discussed stellar sports stars, including Barry Bonds, a prominent former American baseball player. While Mr. Epstein noted his athletic excellence, he delved into a unique example involving one of Barry Bonds’ rarer moments: a sports failure.
He explained that Barry Bonds failed to hit a pitch from Jennie Fitcher, a renowned softball pitcher, causing many to gawk at such a spectacle. However, Mr. Epstein provided an explanation.
“When Barry Bonds was faced with unfamiliar movements of the rotation of torso and the shoulder, and an unfamiliar rotation of the ball, he was stripped of that learned expertise that allowed him to predict the future to not rely on his reflexes,” he said.
Mr. Epstein claimed that star athletes can’t depend on reflexes to perform, but rather they learn various sports skills unconsciously, which is then formed into a habit of sorts. This learning allows athletes to develop a signal that says, for example, “the ball is going here or there.” Therefore, the athlete can appropriately and successfully respond based on such exposure to specific sports-related phenomena.
Understanding the process of skills acquisition fueled the next section of Mr. Epstein’s presentation. Using the example of memory in a chess game, Mr. Epstein discerned that grandmaster chess players could easily replicate chess boards depicting a point of play after only viewing it for a short amount of time.
However, when given a board with an impossible formation of chess pieces, the grandmasters struggled.
“Grandmaster players were given board arrangements that almost looked like they were real, but they would never occur in a game. In those scenarios, the grandmasters were no better than the novices at recreating the board,” he said.
They failed at this because they had only learned to make order of the possible boards by finding chunks of likely scenarios; the impossible boards presented no such scenarios for them. This epitomizes the underlying creed for Mr. Epstein’s research.
Mr. Epstein’s work has consequently clashed with that of Malcolm Gladwell’s 10,000 hour rule, which states that one needs an average of 10,000 hours to master a skill. Mr. Epstein demurred the 10,000 hour theory because its credentials rest on an unrealistic sample. One of the primary studies looked at 30 professional violinists and their periods of practice.
“Ten thousand hours was an average of the ten best violinists…in fact, almost none of them had reached 10,000 hours…but one person went way beyond,” he said. These violinists had already prominently established themselves at the time of the study, again adding to the improbable nature of the results.
“It’s like doing a study on basketball players and only using those from the NBA…[and declaring that] it was practice that got them to where they are, not practice plus 215 centimeters in height. It doesn’t tell you the reality of skill acquisition,” he added.
Mr. Epstein then focused on a part of his research that involves analyzing the mechanics of the sport. He equated a learned skill, or sports mastery, to that of software, and the body to that of hardware.
“A computer is useless without software; once you have that software, your hardware starts to make a heck of a lot of difference with how good of a machine you have,” he said.
Mr. Epstein solidified this point by examining two decorated high jumpers, one that trained for 20 years and another that simply started jumping after a dare. He looked at their background and noted that the untrained jumper was born with a very long Achilles tendon, which Mr. Epstein claimed was his gift. The trained athlete’s tendon had become hard over time, however. Both instances, he said, exemplify contrasting paths to success but object the 10,000 hour rule.
Mr. Epstein ended his talk by reminding the audience that one can change their performance, regardless of how much practice has gone in, by looking at the intricacies of the sport. From the angle of the shot-put arm throw to the length of time spent viewing the golf ball prior to hitting it, the outcome can improve.
The Secrets to Corporate Longevity
by Adam George
October 14, 2014
Embracing change while maintaining authoritative stability epitomizes the secret to Merck’s success, according to Mr. Johannes Baillou, the Chairman of the Board of Partners for Merck, an international developer and distributor of pharmaceuticals. At the 15th Annual World Knowledge Forum, Mr. Bailliou detailed how his family-run company has withstood the test of time, being in business for more than 300 years.
Mr. Baillou said that having innovation at the forefront of Merck’s activity has led the company to high achievements. Initially starting out as a pharmacy company in 1668, Merck evolved to include a wide array of products that Mr. Baillou categorized into three fields: pharmaceuticals, performance materials, and life sciences.
“We are a conglomerate in the sense that we have pharmaceutical business and chemical business under one roof,” said Mr. Baillou. Because of this, Merck embodies a more specialized company.
“We’re a niche player; because after all, although we are quite big and known worldwide, we still are not a corporation and not meant to produce bulk,” he said.
In addition to pharmaceuticals, Merck has begun development with liquid crystals for use in today’s hi-tech gadgets and displays. Organic light-emitting diodes represent the latest aspect of performance materials Merck wishes to expand upon. As a result of this ambition, Mr. Baillou said Merck will be opening an OLED cite in Korea in order to work with customers such as Samsung. This is just another example of Merck’s ability to welcome variety within its product.
This unique dedication to international development and to patrons stems from what Mr. Baillou stated to be one of his company’s steps to success: putting the customer first. Merck relies on permanent feedback from esteemed customers, which he said is fruitful for both sides and has solidified a strong vendor-seller relationship.
In addition to this, Merck’s belief in transparency has generated a successful work environment.
“[We] take the issues and decisions and try to explain them to those involved,” said Mr. Baillou, hoping to dispel any disdain for authority within the company.
The foundation of a family board ensures corporate responsibility in a unique way, according to Mr. Baillou. Merck has and will always be a family business because of the unique familial administration. For professional reasons, the family members of Merck created a special board and welcomed shareholders to take some of the authority, but not all.
“We still have a say [in company procedures] but not as much ownership of the company,” said Mr. Baillou.
However, the creation of the family board is still intact. As a means to ensure efficiency by all involved parties, all members of the Executive Board are considered to be general partners of the entity, meaning more is at stake should a negative event occur under the leadership of the board.
Mr. Baillou culminated his talk with the company’s slogan: Living Innovation. Merck has succeeded primarily because of its employees’ fearlessness to experience change in different aspects of innovation. This has paved the way for the diverse products and locations of the company. Merck thrives on “sustainable ways of making our employees entrepreneurs [and] by letting them take responsibility and make mistakes.”
Merck’s willingness to promote constant innovation while keeping the family in control of the company has not only propelled the company to modern success, but has also undoubtedly kept the company salient over the past four centuries.
Sarah Lewis: Creativity from the Arts
by Adam George
October 14, 2014
Sarah Lewis, cultural historian and best-selling author, presented her research on the power of failure and the successes hidden within the relatively negative term at the 15th World Knowledge Forum in Seoul, South Korea.
“There are blame-worthy failures, but there are also praise-worthy failures,” Ms. Lewis said. Aforementioned praise-worthy failures propelled Lewis’ research further, where she discovered the four main traits that “cultures tend to incorporate into their innovations.”
Ms. Lewis compared mastery, the first pillar of cultural innovations, to the sport of archery. “Mastery is the difference between hitting that 10 ring once and hitting it again and again,” she said, implying that mastery means nothing without the expertise to be consistent.
By citing the efforts of well-known artists, from Faulkner to Cezanne, Ms. Lewis explained how they felt embarrassed by certain products. Ms. Lewis tapped into these alleged failures and argued their importance. “This sense of dissatisfaction is important,” she said. “It can propel us onwards toward a masterful journey.”
This sense to continue, regardless of the number of blemishes on one’s record, embodies Ms. Lewis’ research. “Mastery…is living your life in a constant state of beta, a constant state of being in this ever-onward almost. And it’s this trait- mastery, not success- that leads to path-breaking achievements.”
Ms. Lewis then stressed the necessity to take time out to act like an amateur. She referenced the results of Andre Geim and Konstantin Novoselov, two scientists who partook in Friday Night Experiments where they encouraged the lab to ask outlandish questions. Such questions led to the discovery of the first ever 2-dimensional structure called graphene.
These methods accentuate the efficacy of the amateur approach, which Ms. Lewis called a “difficult idea for serious work because play is associated with something so childlike.” Even though Geim and Novoselov used unconventional means to discover graphene, they still won accolades for their findings.
Ms. Lewis’ third cultural innovation stemmed from the idea of the safe haven. “Safe havens are critical; [these are] times where you can let your idea germinate in sort of an embryonic state before revealing it to the world,” she said.
Ms. Lewis then equated the safe haven to that of the private domain in the film industry. She noted that “there are a set of films that we never would have known about” if the idea of a safe haven had not been incorporated into the industry. For instance, Ms. Lewis explained that many popular films were composed into a film because screenwriters were given private time to look at and feel out a script, rather than being subjected to the opinions of their peers right away.
Looking deeper into this, Ms. Lewis uncovered scientific evidence to explain this phenomenon. “When faced with the potential for dissent, the amygdala lights up, the part of the body controls fight or flight sensation,” she said, “and that’s what’s happening when we give up on our own true belief about something because we don’t feel like it will be supported by our colleagues.”
In order to experience a true cultural innovation, Ms. Lewis insisted a safe haven that is free from all judgment must be offered.
Ms. Lewis said that possessing the characteristic of grit is necessary to be successful through failure. She insists the ability to “withstand feedback for a significant amount of time and remain nimble in pursuit of your goal” will give innovators the power to endure trying times, and will determine the capacity of greatness.
Ms. Lewis described the word “failure” as a term that, in America, “only came into the lexicon as a term for bankruptcy.” Therefore, within the American culture, failure epitomizes the ultimate setback. However, she firmly believes that adhering to the four cultural tenants many successful artists followed will undoubtedly lead one to preserving their legacy as well as their culture.