Business, Self- reflection
Johnson Cheng
Three Leadership Lessons from "The Last Ship"

Three leadership lessons from “The Last Ship” for startup founders who find themselves in sticky situations.

Three Leadership Lessons from "The Last Ship"
Johnson Cheng
The Day After: View from Emerging Markets and ...
The Day After: View from Emerging Markets and Beyond
Johnson Cheng
Lessons from The Last Lion - A Book on Winston ...

This blogpost lays out my afterthoughts and lessons learned from reading The Last Lion, a detailed account of Winston Churchill during WWII. 

Lessons from The Last Lion - A Book on Winston Churchill
Johnson Cheng
Trump, Complex Systems, and A Biblical ...
Johnson Cheng
RISE Conference 2016 & Other Thoughts

Lessons learned in the RISE Conference and thoughts on the economic situation. 

RISE Conference 2016 & Other Thoughts

The Day After: View from Emerging Markets and Beyond

What a year we’ve had! And what a year for emerging markets.

On Saturday, I had the honor of sharing my thoughts on the Panel titled “The Day After: View from Emerging Markets and Beyond” at The 2020 Annual Emerging Markets Institute Conference by Cornell University. The following are my key takeaways from the panel:

  • There is reason for hope. In the 1920s, the world had just experienced double whammy of WWI and the Spanish Flu of 1918. Once the US was relieved of those calamities, there was widespread adoption of new technologies (refrigerators, washing machines, radio, phonograph, automotive, etc) that propelled the US economy to prosperity. At the cusp of large scale 5G adoption and application of artificial intelligence, we can expect a similar “golden age” once the dampening effects of the pandemic on the economy fades. (Timothy Heyman, President of Franklin Templeton Mexico)

  • Africa, especially the two local dominant economies - Nigeria and South Africa - has so much potential, but a clean and fair political environment is the prerequisite for strong economic growth for the continent. (Oby Ezekwesili, Federal Minister Education and Presidential Candidate of Nigeria)

  • Traditional companies would do well by continuing their digital transformation and using that as a competitive advantage in the COVID era. Partnerships are key to this digital transformation process. We are also seeing innovation coming out of Asia that could be used in the West as well (e.g., contact tracing apps). (Anindo Dutta, Partner at EY)

  • As a part of Asia, Europe, and Africa at the same time, Egypt has potential to leverage its unique confluence of people and access to these markets. (Hashem El-Dandarawy, Founder of Team 4)

  • Africa and Latin America have strong potential for economic growth that we shouldn’t overlook (Yuqiang Xiao, US Management Committee of ICBC)

  • Despite the great divides (digital, income inequality, Sino-US), emerging markets have strong growth fundamentals given their population size, consumer class, and level of digitization. We can investigate and find out where the opportunities are on the ground, find ways to innovate for the local markets, invest in tech startups in the region, and make an impact. (Johnson Cheng, Founder of Chi Fan Group)

It was an exceptional panel since we all came from different parts of the world. It felt like an IMF meeting. I’m so proud of the team at my alma mater in pulling this conference off. Cornell EMI has established itself as the intellectual powerhouse for emerging markets. I highly recommend this conference to anyone who’s interested to work or invest in emerging markets.

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For those who missed the panel, I’ve included below the speech I gave at the panel.

My Speech

Thank you, Tim. This is Johnson, I’m a double Cornellian, CALS ’09 and MBA ’14. I’m the founder of Chi Fan Group, a venture investment firm, and Voyager Capital, a private equity firm that primarily invests in AI and enterprise SaaS startups.

First, I want to thank Professor Lourdes Casanova and the Cornell Emerging Markets Institute for including me on this panel. 

Today I’ll share about three things: 

1)     The challenges in Emerging Markets during COVID 

2)     Reasons for Hope

3)     What you can do 

1)    Challenges 

To quote Professor Lourdes and my friend Bernard Yee, an IT executive and my mentor, this is the best of times and this is the worst of times for emerging markets. Emerging markets have taken a huge hit to their economies and public health due to COVID-19. Some are struggling to contain the rise in confirmed cases while trying to keep the economy afloat. 

Undoubtedly, COVID-19 has exacerbated the three “Divides”, chasms that left unfixed could wreak havoc to the very fabric of international and societal order

1)     The Divide between the Rich and the Poor. Even if we ignore the fact that billionaires see fortunes rise by 27% during the pandemic (as reported by the BBC), we’ve seen students from poor families falling behind in schoolwork just because they don’t have wifi at home or appropriate internet setup for Zoom. It’s so easy for us to use Zoom and we take it for granted yet we forget how fortunate we are compared to those without regular, high speed internet access. Front-line staff in retail, hospitality, and restaurant businesses can’t really work remotely and many emerging markets rely heavily on tourism, which is decimated during COVID. 

2)     The Divide between Trump-led Western liberal democracies and China. The political rhetoric and actual animosity and suspicion between the two “spheres” if you will stand in the way of forming a global coordinated response to the pandemic. 

3)     The Divide between traditional and the digital economy. Traditional businesses that relied on natural resources and manufacturing plants suffered tremendously during COVID while companies that are digital native, such as Zoom and Slack, have soared in revenue and stock performance. Digitization will be very disruptive to the traditional economy

Nonetheless, there is reason for hope. And here’s why: 

2)    Reason for Hope

Emerging economies have accounted for almost two-thirds of the world’s GDP growth and more than half of new consumption over the past 15 years. 

Key Drivers of Emerging-Market Growth:

1.     Population Growth. The combined population of emerging markets is projected to swell by about 1 billion over the coming decade, and in many countries these populations remain relatively young. Roughly half of India’s nearly 1.4 billion people are younger than age 25, for example.

2.     The Rise of the Consumer Class. Annual household private spending in emerging markets is rising nearly three times faster than in advanced markets as hundreds of millions of households enter the middle and affluent classes. 

3.     Rapid Urbanization. More than 500 million people have moved from the countryside to urban areas in emerging markets since 2007, and this trend is continuing. This shift is fueling surging demand for services and housing, and trillions of dollars in infrastructure investment.

4.     Digital Leapfrogging. More than 2.6 billion people in emerging markets use the internet, and consumers in many emerging markets are among the world’s most digitally savvy. Smartphone penetration is soaring, and many consumers are leaping directly from cash to digital payment. 

5.     China’s Growth.  This year, the Chinese economy is steadily picking up, as evidenced by the positive overall growth in the first three quarters, including a 0.7% growth in foreign trade and a 5.2% rise in paid-in foreign investment. This is a major contribution to economic recovery amongst emerging markets and in the world. President Xi mentioned recently that China will stay committed to openness, cooperation and unity for win-win results. President Xi’s aim is to turn the China market into a market for the world, a market shared by all, and a market accessible to all. He raises the prospect of doubling China's GDP by 2035. By collaborating with China, emerging markets can have quick access to 5G infrastructure, the trillion-dollar China market, and much needed investment capital. 

3)    What you can do: 

So here’s what you can do (4 “I’s”):

§  Investigate. In general, traditional newspapers are too slow, biased, and overly general. Ignore the noise. Gather intelligence yourself. Talk to people on the ground and in the industry and see for yourself first-hand what’s happening. Where are the customer pain points and inefficiencies? 

§  Innovate. It’s always prime time for innovation, especially when the going gets tough. It’s a lot easier for smaller companies to experiment with new products, adopt new cloud and collaborative technologies, and innovate. Make sure you have a strategy to collect, analyze, and act on data. Emerging markets are full of energetic, aspirational, and industrious entrepreneurs. The Pitch Competition we just saw is a testament to the innovative and entrepreneurial talent in emerging markets. Governments and companies would benefit from leveraging and empowering this valuable asset. 

§  Invest. Invest in tech companies. We invested in FiscalNote, the largest legaltech startup in the States that aggregates global bills and legislations on one platform and provides analytics using AI. Essentially, it’s the “Bloomberg for Legislations”. The company is expanding rapidly in South Korea, Japan, Indonesia, India, and greater China. We’ve also invested in Green Monday, a plant-based food tech giant in Asia, pushing the adoption of alternative protein. VCs are also looking for local startups that would likely to become unicorns, following the example of their equivalents in China. An example of this would be Grab. We see AI, EdTech, Foodtech, and Smart Healthcare to be interesting sectors to look at.

§  Impact. Use this opportunity to make an impact on the community around you. I’ve learned that a family business in Colombia offered underprivileged kids lunches for 1 euro and kept alive people, restaurants, and hotels. This is the time to make a tangible impact on people’s lives and they need you.  

4)    Conclusion

In conclusion, COVID has been tough on emerging markets but we remain bullish on the potential of emerging markets in a post-COVID world. We can all investigate, innovate, invest, and impact. 

Last but not least, I always cherish my Cornell connection and I think Cornellians would do well in emerging markets by connecting and collaborating with each other. Thank you. 

Trump, Complex Systems, and A Biblical Perspective

It's been an emotionally challenging time for me given recent events that are happening around me: equity changes at my parent company and a Trump upset. I'm devastated and have been scrambling for the past two weeks to process them. Perhaps I should seek comfort in the old adage, "Change is the only constant in business." But that's neither comforting nor prescriptively useful. In search of an effective mental framework while wallowing in sadness, I've come across a beautifully written Quartz article by Parag Khanna on how quantum physics can perhaps explain the unexplainable developments in geopolitics (or life for that matter). In short, unpredictable - and even shocking - events, such as a Trump victory, that happen are a result of a confluence of changing factors that act in convoluted, uncertain ways to produce a single outcome. Traditional intellectual frameworks - ones that Professor Peter Katzenstein taught us at Cornell - are no longer sufficiently effective in analyzing the state of political matter when used independently; in fact, we've arrived at a world where no single mental framework/theory is dominant (and where no single state is the ultimate hegemon). This is very scary for us because we're horrible beings at managing complexity. Our brains shut down in the face of complexity and worst of all, uncertainty. We crave for simplicity (because it saves brain power, and it's predictable) but in real life, there's no simple explanation for a Clinton defeat, Brexit, rise of Duterte, and other seemingly unacceptable events. One could resort to the relatively simple argument that attributes such events to the rise of populism due to the unequal and often unfair distribution of benefits brought about by globalization. But is that it? I would argue that there exists multiple frameworks (and even some undiscovered ones) that are all true at the same time even when they're at odds with each other. Imagine each intellectual model (e.g., economic, political, societal, financial, etc.) exists on its own dimension, and we live in a multi-dimensional world; existence refers to the state where current time cuts across all the dimensions within which known and unknown factors are in different states; events happen as a result of the combined effect of the changing flow of these different factors, which can exist in contradictory states simultaneously (as in quantum mechanics). It's like playing multi-dimensional chess except some chess pieces are unknown while others can be "dead" and "alive" on the board at the same time. To make matters worse, you can either measure how fast the pieces are moving or their position but not both simultaneously (Uncertainty Principle). Now I bet your brain is shutting down even if you've tolerated reading my puzzling blog this far. In short, if quantum mechanics is our life writ large, then the latter is strange, complex, and uncertain.   

So here's the simple biblical answer: there's a lower story and an upper story. The lower story is complex, disappointing, and evanescent. We won't ever understand the physical world 100%. I don't mean to be cynical but even Solomon said, "I have seen all the things that are done under the sun; all of them are meaningless, a chasing after the wind." (Ecclesiastes 1:14). There's no one  formula in the lower, human story. Even if you succeed in finding THE formula or in leading a secular, successful life, you're "chasing after the wind." Obama's legacy - Obamacare, immigration reform, LGBT rights, etc - can be undone overnight by a Trump presidency. But that is not to say that we should just sit back, do nothing, and be cynical about life. The upper story is God's story, and just like Pastor Randy Frazee preaches, it's only through this upper story lens can we make sense of the lower story. God's story of salvation is the only story that matters in the long run. As Sarah Keung shared in our WhatsApp group, "Since then, you have been raised with Christ, set your hearts on things above, where Christ is, seated at the right hand of God. Set your minds on things above, not on earthly things. For you died, and your life is now hidden with Christ in God." (Colossians 3:1-3 NIV). The core message of salvation through Jesus Christ in the upper story gives me strength to do the right and godly thing in the lower story. This is why Peter says "Since all these things are thus to be dissolved, what sort of people ought you to be in lives of holiness and godliness (2 Peter 2:11)". Don't get discouraged and derailed by lower story developments. Having the upper story in mind, may we keep doing the right thing even when we don't want to. Even when it hurts.

A thought experiment

A friend of ours, Florence Chan, visited little Isaac today and gave him a gift - a globe that plays soothing white noise/classical music and glows at night. Problem was (there's always a complication) that Gloria couldn't open the battery compartment and put batteries in. So I thought for a second given my experience being an entrepreneur how this could be an analogy of my work life. The following are thoughts and quotes that people around me would typically (and hypothetically) say around me in this situation:

Gloria - can you open the battery compartment?

Design thinkers - why do we have to open it and turn it on? Let's brainstorm with everybody and interview the baby.

My boss - If and when is this going to be a profitable endeavor?

HR - (innocently) can we overpay for underqualified people to help you open it five months down the line?  There's so much competition for talent!

My not-so-friendly peers - he can't do it. he's too young. Who does he think he is? he's going in the wrong direction (whatever “direction” means!

My CFO - when is this thing going to go public with a P/E of 50?

My shareholders - show me steady progress as you turn the screwdriver. And don't just use this solution once. Copy it across the entire nation!

My marketer - we need 500 million to buy google ad words to advertise our solution.

John Piper - are you opening it because you believe in yourself or because by opening it you glorify the God who redeemed your life through Christ Jesus whom you will serve as a living sacrifice?

Professor Ya-Ru Chen - It's easier to open it if you believe you can open it. The efficacy of the self-efficacy theory.

Deal-making friend - I want a term sheet that outlines my rights to this globe after it's turned on and proven useful. 

Caleb - you're 30 days behind these paperwork and you're spending time writing this blog! 

Entrepreneur in me - problem with severe constraints again (where's the screwdriver?) 

Leader in me - Novianna, where's the screwdriver? Mom, where are the batteries? (found both and solved the problem). Yay, teamwork!

Isaac - (tummy time and forgotten).

 

 

 

Exciting Ideas at Cornell Shark Tank -- and the winner is...

Flora Pulse, an agricultural smart data startup founded and led by PhD student Michael Santiago won the #CUSharkTank, with a $1500 prize and the opportunity to pitch at the @SXSW Interact in March. Congrats to Michael and his team!

Through an interdisciplinary research, Flora Pulse has invented a device that can monitor and track the actual plant water content in real time, through the complementary mobile app. In comparison with the present methods of using soil neutron probe, pressure chamber, and remote sensing, Flora Pulse enables a more accurate, cost effective, and time effective way to monitor plant's condition and control irrigation schedule. This technology would be very useful for water sensitive crops and for water conservation. 

Coupled with a informative and well versed pitch, alongside with a mock-up prototype, Michael earned the opportunity to  pitch to a much larger audience.

Nevertheless, the other teams that pitched on Wednesday night weren't lacking in ideas. Here are a summary of the night's other pitches.

  • SALT (pitch by Weill Cornell PhD student Fon Powell) offers a sodium test strip that can be easily self administered by hypertension patients that can inform the users, as well as their physicians, of the patients' sodium level data and trends

  • NTi Technology (pitch by chemistry student Shane Heil) offers a light activated disinfectant that can continue to disinfect while staying on a surface, reducing infection risk due to contamination, as well as time and cost savings in reducing the frequency of disinfection

  • Arctyc Innovations (pitch by MEng student Willie Mendelson) offers a wine cooling device that allows rapid yet accurate cooling, which allows users to achieve optimal drinking experience in minutes

  • Right Price Management (pitch by Johnson School MBA students Rebecca Robinson and Derek Mayer) offers a pricing tool platform, which is widely available for hotels, to non-institution short-term property rental host (e.g. Airbnb users), enabling them to set the right price on their rentals

  • Produce Pay (pitch by Johnson School MBA student Pablo Borquez Schwarzbeck) offers a payment platform for farmers, distributors, and banks to ensure faster cash turnover and greater efficiency in fund utilization when harvested produce is en route to the end consumers

After the competition, I also got to talked with the competitors and fellow judges at the Statler Hotel Banfi Restaurant -- a much needed talking space for post-competition relaxation and debriefing. Many thanks to the sponsors and organizers of the event. I look forward to stay in touch and explore further opportunities to work with these bright students and their companies.

 

I will put the link to event pictures and videos here once the organizer makes them available.

Cornell Shark Tank and Startup & Tech Networking

Pretty eventful with my stay at Cornell this week. First, there will be the annual Startup & Tech Networking tonight #CUNetworking, where 50+ companies of all sizes will show up and create quite a crowd at Sage Hall Atrium @Cornell_MBA. There will be students, alums, and every kind of attendees there, and I wonder if it can fit everyone in tonight.

Then more excitement will come tomorrow evening at the #CUSharkTank, where I have the honor to be one of the three judges on the panel, hearing from 5 competing teams of bright students from all kinds of disciplines. I wish them good luck in the final preparation to shine in the Shark Tank and grab the top prize, which includes the tickets to attend and pitch at the  @SXSW Interactive, one of the biggest startup events of the year!

Look forward to more exciting update!

Johnson Shark Tank | Feb 3 (Wed) 5:00 PM - 6:00 PM | Duffield Atrium

In memory of Nelson Mandela

In memory of Nelson Mandela, who would have been 96 today, I'd like to share a quote from him that inspired me:

What counts in life is not the mere fact that we have lived. It is what difference we have made to the lives of others that will determine the significance of the life we lead.

 

Thanks to Arielle Ngai for sharing on Facebook and in fellowship.