The Tipping Point
October 11th, 2007 | Uncategorized | 1 Comment »
If you could only read 3 nonfiction books in your life for leisure purposes, the Tipping Point is one of them, the other two being Freakonomics and Blink. The Tipping Point is not as fun as the other two books I recommended, but essentially helpful for entrepreneurs, or in other words, people who wants to start something (not necessarily a business). If I had to describe the Tipping Point in one sentence, it is that the book tries to identify how an epidemic is started, not a malady kind of epidemic, but when a trend crosses a threshold and spread like a disease. To draw a real life example that’s not from the book, there’s a very tiny japanese ramen restaurant close to where I live, they make excellent ramen, one of their flavors, a white soup based pork ramen, is probably the best of its kind, best I’ve ever had. This restaurant is in the middle of nowhere, in a small alley surrounded by residentials. Eight years ago I was introduced to this restaurant, and I began going about once a month, it was never crowded, but only seemed to be sustaining itself by loyal customers. Some time between that number of years, a change happened, everyone started going to that restaurant. The wait around dinner time is more than an hour, and if I went there at 9:15 pm (it closes at 9:30), there’s still a 10-minute wait. Since the restaurant did not have any geographic advantage, you can pretty much rule out people who stumble upon it, so how did it become the Ramen place to go to in that district, that threshold is the tipping point. I wouldn’t quote the book too much, but word-of-mouth empidemic needs Connectors and Mavens, Connectors are people who are connected to a lot of people, and Mavens are people who are authorities of the subject. It matters less if suddenly 30 people stumbled upon the restaurant, than 1 connector/maven who went to the restaurant, and loved it.
Have you heard of Craiglist, heres an interview of the creators with Freaknomics. Craiglist only has 25 employees and it is one of the top 10 traffic sites in the US. Yes, and it looks like shit (thus it loads quite fast), and well its domain name is not that great either. Recently there is an indy documentary film about the lives of people who use Craiglist in San Francisco. Have you wondered how you could possibly heard of Craiglist? Like the restaurant I mentioned above, Craiglist does not have any advertising, and its purely from word-of-mouth. I wonder what its tipping point was. Tipping point is necessary for success.
Talking about Craiglist reminds me of Baidu, it is now the 3rd most-used search engine globally. It owns 5% of the queries as opposed to 60% from google. It is amazing because only people from china (who reads simplified chinese) uses Baidu, sure China has 1/6 of the world’s population, but what is the % of people who are online and regularly searches. Imagine Baidu expanding globally, into other asian languages, even traditional chinese, the possibility is endless. Baidu stocks skyrocketed, everyone wished they bought it before (including me). Ever since the subprime fiasco, stocks are moving agaist the economy, some people say we are again in a bubble. I dont think we are. We are only in a bubble when everyone’s grandma and their cats are talking about buying stocks, most people nowadays, they are still weary of what happened in the past. Trading is always a game of not being the last guy to get to the party, and certainly not the last guy to reach the exit in case of a fire. I still predict a recession 9 months after the first interest rate cut, and that puts us right in election time. Yes, a democratic president always have to pick up the pieces. So between now and then is probably a good time to invest, get the hell out, and buy a house. I continue to recommend solar energy stocks and techs. If you don’t already have GOOG, RIMM, AAPL, BIDU, it may already be too late. The correct thing is probably to identify the next GOOG, and right now my speculative google contenders are VMW and FSLR. More speuclative risky stuff I recommend would be STV (digital TV in china!) and YGE. One long term investment advice I really have is, don’t buy too much of your own company’s stock for your 401K no matter how much a discount you get, well unless you worked for Google. Just look at Enron, when shit happens, you lose not only your job, but your retirement funds. Have you watched Damages, the show I kept recommending, and recommending. If you haven’t watched it, you get two slaps from me. Do you sympathize with Ted Danson’s role as the crooked CEO on trial for screwing his employees. It takes a crook to become a CEO, all CEOs should screw his employees in the first sign of troubles, just because they can (yes, if you are a CEO reading my blog, please screw your employees to your heart’s delight, but chances are, you already have). They become CEOs for power and success, and to screw their secretaries (a different kind of screwing than the above), if you are screwed in light of your employer’s accounting trouble, its really your own fault, enough said.
Talking about buying a house (and don’t ask me if housing in the US has bottomed yet), a friend asked me how much money I would spend on stuff I want to buy, as opposed to tying myself down with a morgage and saving every penny I can. My answer is this: whatever you want to buy is always worth it (no matter how much it is) if it brings you happiness. My advice is live every moment as if it is the last day of your life (who knows you may die in a car accdient tomorrow), and also keep in mind that you may live forever (and in case of that, prepare a little), and the correct way to live is to have a balance in between of that two thoughts. Balance is the key to everything.

