Last week I spent a couple of days in The Netherlands for meetings and to give some speeches. I am trying to travel less and that is working quite well, because it was my first trip to Holland in almost 2 months. I took the daytime flight on Sunday to Amsterdam, which is more relaxed than the night flight that arrives around 5 AM.

On Monday I had a couple of meetings in Amsterdam, among others with Nico Schoonderwoerd and Zlatan Menkovic of Peerreach. I just invested in the company, something that was also announced during the time that I was in Holland. Around lunch time I was interviewed (short version, long version) by Erwin Blom for Fast Moving Targets and after recording the show we had lunch together.

I then did a few calls before taking the train to Maastricht (2.5 hours). There I arrived just in time for a conference call with a start-up on the West Coast, before having dinner at Beaumont. After dinner I had drinks with some fellow entrepreneurs who would also be speaking at the Global Entrepreneurship Week. Among others I had a glass of Italian wine with Iens, the founder of the Holland’s largest restaurant review site, Iens.nl, and I talked to Jan Scheele, who is a TED fanatic and among others organizes TEDxBaghdad.

I got up at 5 AM the next morning to go for a run, but because I had a bit of a cold I decided to skip sports and just work on my emails. After a big breakfast (where a hotel guest recognized me from a speech I gave a few months ago!) we took a taxi to the Gouvernement, the seat of the government of Limburg Province, where the Global Entrepreneurship Week would be held. It was a nice event, where I met some old friends, including my former university classmate Bert Habets (we were on the board of a student association together), who is now CEO of RTL in The Netherlands. Nice to catch up with him and to hear what he is up to in his job.

Global Entrepreneurship Week 2012 in Maastricht

The talks at GEW were inspiring and I had a great day. I also did 2 video interviews (did not see them online yet) and gave a speech. My talk was mainly about my own entrepreneurial experiences over the past 10 years and I specifically focused on some of China’s challenges. Lots of questions as well, which is what I like. After that there were drinks and over a couple of beers I talked to lots of entrepreneurs, investors and students. During my studies in Maastricht entrepreneurship was not a big thing yet, but that has changed completely! At night I had dinner with some friends and then went to bed quite early.

Wednesday I once again got up at 5 AM and again decided not to run but do some work. The downside of spending time at conferences is that you completely get behind on emails, and spending 2 hours in the morning to answer the most important ones makes me feel a bit better.

Bridge over the Maas river in Maastricht

After breakfast I prepared for my speech for later that day and then went shopping for some clothes. I had seen a nice shop close to my hotel, but it was still closed at 10:30 AM, so I went to another one that was open, where I spent quite some money in a very short time. The owner seemed to be very happy with me as a customer and I was happy as well: I am not a big fan of shopping and now I had 5 new shirts, 2 sweaters and 2 pairs of jeans in 20 minutes while also enjoying an espresso. When I walked by the first shop on my way back to the hotel at 11 AM the owner just opened up. For one moment I wanted to tell him that if he had worked a bit harder he could have earned an additional EUR 1000, but decided to refrain from commenting. He wouldn’t understand it anyway and everybody should decide for himself how hard he wants to work.

Scott’s personalized golf balls from Redline Golf

I changed into my suit and then walked to Beluga, a 2-star Michelin restaurant on the Maas river in Maastricht. I had been invited by David Verburg of Redline Golf, a Dutch company that sells high quality golf balls. Because he had seen on my blog that Scott also plays golf he gave me among others a set of golf balls personalized with Scott’s name on it! Scott loved it, see the picture at the end of this post. Lunch at Beluga was amazing, we asked the chef to just make some nice dishes for us and that’s what he did. What a fantastic food and a great way of preparing it (partly next to our table), and of course with very nice wines to pair with the food. Highly recommended. Thanks again for lunch David!

With the winning team of the Maastricht University business plan competition 2012

After lunch I had another meeting in the lobby of my hotel and then walked over to executive building of Maastricht University at the Minderbroedersberg. I had a cup of coffee with some students and then watched the finals of a business plan competition before I gave a speech about entrepreneurship. As usual there were beers afterward (I think every student-related event has free beers in Holland) and I was among the last people to leave. Then I went for dinner at Tout A Fait with a friend who runs a large family office, excellent to catch up with him over 5 courses of great food and fantastic wines. Life is good!

Although I did not go to bed until 12:30 AM I was awake by 4 AM already. I tried to sleep a bit longer (I was still tired because of copious amounts of nice wines) but that did not work, so got up before 5 AM, took a hot shower and started working. I packed my suitcase, had breakfast at 7 and then took the train to Amsterdam. There I had among others lunch with my parents at the Conservatorium Hotel and almost missed my flight afterward (my own fault!).

I was so exhausted from the busy week and the lack of sleep that I only had a glass of champagne and a quick appetizer (Beijing Duck) on board, before I put my seat in the sleeping position and enjoyed an 8 hour sleep. I woke up just over an hour before landing, had a small breakfast (yoghurt with fresh fruit, a warm croissant and some coffee) and then was happy to be back home. I brought the kids a lot of presents and tons of Dutch Sinterklaas candy, so they were very happy to see me as well. It was a great trip!

Scott showing off his own golf balls!

I just re-read an excellent article in Technology Review titled “Why we can’t solve big problems”, discussing why the world is not able to tackle big problems anymore like it was 50 years ago. When Kennedy announced that the US would put a man on the moon “in this decade”, NASA indeed managed to send Apollo 11 to the moon – and back. But since I was born (in 1972) nobody has been to the moon anymore. What happened?

The article discusses several reasons, one of them that VCs don’t want to take big risks anymore. To quote the article, “venture investing shifted away from funding transformational companies and toward companies that solved incremental problems or even fake problems . VC has ceased to be the funder of the future, and instead become a funder of features, widgets, irrelevances.” Computers and communication technologies advanced because they were well and properly funded. But what seemed futuristic at the time of Apollo 11 remains futuristic, in part because these technologies never received the sustained funding lavished on the electronics industries.”

My VC experience started about 8 years ago, so I am not sure how VCs did their investments before that, but I wonder if it may partly be because LPs want faster returns? There are so many funds out there that VCs may look for easy returns instead of big problems – big problems with a high risk and many years before returns could be made. Or maybe it has to do with the fact that the investments in big problems would be way too high, and it’s easier to put smaller amounts in smaller companies.

Next to that the (US) government played a big role as well. In the 1960s it was still possible to get the public behind an idea to put a man on the moon, something that would be much harder right now. People feel there are more important problems to solve. Maybe – but only in the short run. In the long run we need to solve big problems to make sure this earth will still have human inhabitants a couple of centuries from now. Maybe China will be the one that will tackle and solve the big problems humanity is facing?

Of course some funds are still working on big issues, one that immediately comes to mind is Intellectual Ventures that has among others developed relatively simple solutions for global warming that were featured in SuperFreakonomics. But generally VCs seem to be focused on apps and simple problems with quick returns.

Another exception is the Founders Fund, a VC fund set up by Silicon Valley’s Paypal mafia (the Paypal employees that got rich after Paypal went IPO). Their motto is the title of this piece “We wanted flying cars, but instead we got 140 characters”. They feel meaningful disruption is necessary, but most founders have no real intent of doing big things. But it may be a chicken or egg problem: do founders not look at the big problems because they know they won’t get funded or because they don’t want to do big things? I think the first part may be more important, because most entrepreneurs that I know want to change the world.

Sometimes disruption also happens by coincidence. Looking back at the founding of Tudou, the initial idea for that company was not to disrupt the traditional way that people consume TV and other visual media (it was actually something similar to what iTunes became for podcasts). You realize the potential of what you are doing only over time and then you start really thinking big.

When the Internet started I don’t think anybody could have imagined the impact it would have on this world. Although the article does not agree with me, I feel the Internet is at least as important as putting a man on the moon. It’s a different scientific field, but the Internet completely changed the way we communicate and how (and how fast) we get our information. The Internet may also help us to solve the big problems we are facing much more quickly.

If you’re interested in this subject you should read the full article here:
http://www.technologyreview.com/featuredstory/429690/why-we-cant-solve-big-problems/

I just landed in Amsterdam after the regular 12 hour KLM flight from Shanghai, a bit jetlagged but feeling fine. I mainly spent the flight catching up on emails and RSS feeds, reading 2 newspapers, 3 magazines and part of a book. I’ll mainly be in Maastricht this week where I will give 2 talks, one at the Global Entrepreneurship Week and one at award ceremony for a start-up competition. Always nice to be back in Holland for a few days and especially to be back at my Alma Mater Maastricht University (the University Fund paid for my trip).

KLM has a special this month, where they only serve wines made by Dutch abroad, called “A Touch of the Dutch”. So I got to taste a couple of nice new wines as well, among others a South African Pinotage (Aaldering Pinotage 2009 from Stellenbosch), a Cotes de Bourg (Chateau Beaulieu 2010, Bordeaux), and a young South African Chardonnay (Breedeweelde, Chardonnay Private Collection 2012). I am generally not a big fan of Pinotage, but this was a very nice one (even at 35,000 feet!). The Bordeaux was probably a decent wine, but it had no nose and it wasn’t anything special (maybe because of the altitude?). The 2012 SA Chardonnay was really nice, still very young but despite that very aromatic. Actually not a good combination with the red snapper that I had ordered, but that’s my own mistake (I should have ordered the De Kleine Schorre 2011 instead, but I think I already tasted that one on another KLM flight a few months ago). Bonus points for the KLM for this wine selection!

But the KLM actually deserves more bonus points on today’s flight. This weekend I was featured in an article in FD Persoonlijk, the weekend magazine of Holland’s largest (or better: only) financial newspaper. The interview (about my working style, especially the number of hours that I used to work per week) was done a couple of months ago already and I had totally forgotten about it. I only remembered the photo shoot that took place at Amsterdam Schiphol airport in September during a stop-over from a morning flight from Cyprus to an afternoon flight to Shanghai.

Someone mentioned that the FD article had been published on Twitter on Saturday, but of course I can’t buy the magazine in China. Therefore I tweeted @KLM and asked if they could have a copy on board the flight from Shanghai to Amsterdam on Sunday. They replied right away and indeed the paper including the magazine was waiting for me on the plane. I am often quite negative about the service of the airline, but this was a nice experience. Thanks KLM!

A couple of months ago I wrote a post on the fact that sports and politics don’t go together in China. Among others I wrote that the Beijing Marathon would not take place in mid-October because of the 18th Party Congress. I felt bad for the runners who had trained hard for this event, but luckily for them the race was eventually just postponed (Interesting fact: the Party Congress was also postponed, so in hindsight the marathon could have just taken place on its original date).

However, if you are a Japanese national you are out of luck, because the organization won’t let you participate. Officially for ‘safety reasons’, but I suspect that it’s just a case of bullying the Japanese because of the ongoing affair with the Diaoyu/Senkaku islands. It’s really sad that this is happening. To be honest, I probably would not join the marathon if the organizers were stopping one nationality from participating.

I wonder if main sponsor Hyundai (a Korean brand, not Japanese) agrees with the exclusion of Japanese runners. And do the other partners, such as Adidas and Gatorade, know that this happening? It’s a bloody shame if they do and if they don’t pull out because of this.

I went to the Beijing Marathon site to check if it’s really true that Japanese can’t join, but after registering as a user I could not continue the registration process because I did not receive their confirmation email. Maybe they put all registrations on hold because people started complaining to the press?

Because I plan to participate in the Shanghai marathon on Dec. 2, I immediately checked their website as well. The Shanghai Marathon kicked out their Japanese sponsor (they were forced to do so by the government), so I was a bit worried that they would also not allow Japanese to join. But luckily that was not the case, so if you are Japanese and living in China (and you’re not sick and tired of all the anti-Japanese campaigns that don’t seem to stop) you could potentially still run in Shanghai.

Update (Nov. 12): The Beijing Marathon responded and now says Japanese can sign up. They changed it because “Japanese normally don’t sign up individually”. My take: pure damage control, because they didn’t realize that media would pick up this story.

I am always looking for interesting new investments, whether start-ups or completely different asset classes like wine or real estate. Earlier this year I started researching peer to peer (P2P) lending after reading about Kleiner Perkins’ investment in Lending Club, and Mary Meeker (KPCB partner) and John Mack (former Morgan Stanley CEO) joining their board. P2P lending basically means that you can directly lend money to other people. Sites like Lending Club and Prosper.com facilitate this, by putting borrowers in several risk classes and giving you the opportunity to spread your investment over many different borrowers (e.g. if you invest USD 5000 you could lend USD 25 to 200 people).

When I was reading that returns of around 10% (net) per year are quite normal I thought it sounded too good to be true. Based on my corporate finance background I knew this kind of returns without a huge risk should not be possible in an efficient market. But the fact that some top VCs invested millions of dollars in the company intrigued me. These are smart people, did they see something that I didn’t see?

It took me some time, but I finally figured out that sites like Lending Club are actually giving small investors the same kind of returns that in the past only banks could get. The Internet made this possible, because the bank as a middle man was cut out. Because you diversify among many different borrowers you can estimate the default rate in advance, making the investment much safer than it would be when you would just loan to a couple of people. Returns of 10% on their loan portfolio are nothing special for banks, that’s how they got rich and that’s how they finance their huge overhead.

After talking to some people at Lending Club in June this year I decided to “join the club” and put money into a fund run by Lending Club subsidiary LC Adivsors. The advantage of the fund is that you don’t have to decide which loans to invest in, which is something I don’t have time for (or don’t want to make time for). There is a minimum investment for the fund obviously, but if you want to make P2P investment a significant part of your asset allocation you should certainly look at it.

So far my experience has been exactly what I expected, with net monthly returns over 0.7% per month in my portfolio. Service is excellent, with monthly updates and a contact person that I can get in touch with any time. If you’re interested in the fund feel free to contact me by email (marcvanderchijs (at) gmail (dot) com) and I can put you in touch with my contact person at Lending Club.

Of course you can also invest in loans with much smaller amounts, a lot of people seem to start out with a few thousand USD and add a small amount every month. There are a lot of tools out there to decided which loans to invest in, and which doesn’t need to take a lot of time if you don’t add a lot of $$ every month. There are quite some blogs about P2P lending and on how to get started, check out http://www.lendacademy.com/ for a good overview.

The reasons I decided to write this post now is because Lending Club keeps on growing very fast, and announced earlier this week that the company now has over USD 1 billion in person loans and is cash-flow positive, which is a major thing for a fast growing company. Their funds have about USD 250 million under management. If you are looking for an interesting and high-yield investment you should make sure to take a look at p2p lending. Lending Club and Prosper are disrupting the financial market for loans and I think this might become a big industry with very interesting returns for lenders.

Over the past 2 weeks this blog moved to a new server. I used to host marc.cn at Hostway, but they had too much down time and I wasn’t very impressed by their customer service. So eventually I decided to host it on my own server at Amazon, a bit more expensive but (hopefully) more stable. Of course not everything went smooth right away, but it seems now the blog is working fine again (knock wood…). Thanks for your help in setting up the server and troubleshooting Joop!

The picture below is going viral on the Chinese Internet today. It was posted on the official Durex account on Weibo (China’s Twitter), with the title “The difference between Obama and Romney is…”

(Source: Shanghaiist Facebook stream)

At home before going to school

Today the kids celebrated Halloween at school, so they both dressed up in their favorite Halloween costumes.

Walking (or in Scott’s case running) to class

Elaine only wants to dress up as a princess, so also this year’s outfit was an easy choice. Scott loves the movie Cars and admires our race car driver friends Ho-Pin Tung and Alexandre Imperatori, so we found him a Lightning McQueen race car driver suit. He was so proud when we arrived at school!

Happy Halloween @ Soong Ching Ling!