Ever wondered how fireworks are sold in China? In my native Holland there are strict rules on how and when these dangerous good can be sold. China does it differently, the goods are hawked on the street just like most other products. Sometimes even by sales men smoking cigarettes (no picture of that one yet, unfortunately).

Notice how quiet the streets are, these pictures were taken on the afternoon before Chinese New Year. I assume everybody was playing games on game.com.cn, because we broke all records that day!

Over the past couple of days I had my annual Chinese New Year holiday. Having some time to relax means for me that I get lots new business ideas. Most related to things I am currently involved in, like games, where I have thought about some ideas for the next frontier in gaming: the combination of mobile gaming and social networking. But also in other fields, for example in the field of e-books. I won’t have time nor the resources to something with this, therefore I post some of my thoughts about e-books here. Maybe it will inspire others to do something with it.

E-book readers have come a long way since they were first introduced a couple of years ago. The new readers do not use a computer screen anymore that constantly refreshes itself and is therefore tiring to look at, but they use electronic ink. This technology is a huge breakthrough in my opinion, but it does not get the attention it deserves. E-ink means that the screen reads like a real book, it only refreshes itself when you turn the page. If you have never seen it, try to find a store where they sell them (still not easy) and ask for a demonstration. The good thing is that the devices are light (same weight as a paperback) and have a huge battery life because the battery is only used when you turn the page (about 7500 pages). Basic memory in the devices is enough for 100-200 books in these devices, but most have expansion slots to even take a thousand books with you if you want.

I have owned an iLiad e-book reader for about 18 months now (I probably have a pre-production model, that was given to a start-up I invested in), but did not use it much. Why? It was too slow, it always had trouble connecting to the internet (especially with firewalls). The software was user-unfriendly and I always had trouble downloading stuff. However, the e-ink technology was great, and from the moment I had the iLiad in my hand I knew this would one day revolutionize the way we read. Too bad the iLiad engineers and marketeers did not manage to put the product into the market, they had a big opportunity on their hands but they blew it. Out of frustration with the iLiad I decided to buy Sony’s latest e-book reader (the PRS-505) a couple of weeks ago. Although it is still not perfect, it was a revelation.

It’s screen is a bit smaller than the iLiad and, does not have wifi or a pen to write, but it just works. I bought several books already in the Sony e-book store and getting them on my reader was just a matter of drag-and-drop. Even my parents could do it. That statement is not meant to make you laugh, but it shows where the iLiad went wrong. A product should be easy to use, also for people who are not technical geeks. And the Sony e-book reader is fast. I don’t need to wait a long time to get to the next page (for the iLiad this took up to 2 seconds sometimes, totally unacceptable), but the moment you press on one of the page turn buttons (there are buttons for left-handed and right-handed people) the next page appears almost immediately. I read two book on my Sony reader so far, and it’s the same or even a better experience than a normal book. You really forget that you are reading an e-book.

As mentioned I think e-books based on e-ink will be the future. But there is still some work to be done, especially on the marketing side but also on the product side. If I evaluate a business idea I try to look at the potential market size. Products that appeal to older people especially have my interest, because they are the ones that have purchasing power. The e-book is such a product. Why? When you get older it gets more and more difficult to read smaller fonts. If the font on an e-book reader is too small you just press ‘zoom’ and the whole book is offered in a bigger font. Press ‘zoom’ twice and you might not even need your reading glasses anymore. This is a feature that marketeers should focus on.

Another great thing is the integration of audio. The Sony reader has this. It does not work flawless yet, but that should be easy to solve. It does not exist yet, as far as I know, but if I would be a publisher I would offer my books in a combination of audio and text (or to start with a print version, plus a free audio and e-book). If you read the book on the e-book reader but are tired you should be able to switch to the audio version right away. Or when you are reading a book at night, you can continue to listen to it while driving to work the next day. Technically very simple, and nobody is doing it.

You might argue that people are not willing to pay for this. Could be, I know the internet business models quite well, and think that books will go the same route as music. Free, free, free. So you need to start thinking about a new business model. I think there is a very attractive one for e-books. You want to get the latest bestsellers on your e-book reader? Either you pay for it, or you get them with advertising embedded. Just like in a magazine. If you don’t like that, you can pay for it. Or if you don’t like the ads, let the e-book reader know what kind of ads you would prefer. It’s easy anyway to target ads at certain groups based on their reading behavior. You can change where the ads are continuously and you can change the content of the ad. Why is it accepted in magazines and papers and you don’t see it in books yet?

But there is more. Most people do not read book anymore, which is a pity. I just came across the statistic that 44% of all Americans did not read one book in the past year. Apple’s Steve Jobs remarked last month that e-book readers will never become big because people do not read anymore. Because of that he said Apple will not make an e-book reader. But do they not read anything at all? Some of them surely fall into the category that just watched TV or surfs the internet. But there is also a big group that reads magazines and newspapers. And that is an even bigger opportunity for publishers. Make all your publications available in an e-book format! I want to subscribe to the New York Times and to the Dutch NRC Handelsblad. But I am not doing it because I would get the paper with one or more days delay. However, if I can get it automatically on my reader I would be willing to do it. Same for magazines. And it’s good for nature as well, imagine how many trees would be saved if people would not read paper newspapers anymore! Now I realize that paper versions will likely not disappear soon, but with better e-ink readers it could go faster than you imagine.

I actually do not trust Steve Jobs with his statement. Remember when the iPod video came out? A few months before that he said that people don’t watch video’s on a small screen. For the iPhone he also denied that Apple would make one. Well, I won’t be surprised if he is fooling the competition once again, and Apple will introduce an e-book reader in the near future as well. Steve is a very smart guy, and I think he also sees these opportunities. Apple could make the perfect device, the best design with the best features. When the iPod was introduced Steve said that you can now bring your whole music collection with you wherever you go. With the iBook (They already own the name, but use it for a different product) you could do the same for your book and magazine collection.

But in case Steve Jobs will not do this, I hope at least one start-up company will do it – and do it better. Get a better searc
h functionality, make sure the device has wifi and 3G, and make sure the design is great. Amazon made the worst looking product of the year with its Kindle e-book reader; but they still manage to be sold out! Make sure advertising can be integrated, and do a good job on marketing. People don’t even know what e-ink is. Wherever I go people ask me about it, even though the technology is several years old. Integration in a mobile phone could also be an idea (this company is already doing that), to make it even more portable. And don’t forget to make deals with newspaper and magazine publishers (something the folks at iLiad also did not manage). The company that does this right will be a winner.

Note: If someone from iLiad reads this, and feels I am not giving their product enough credit, please feel free to contact me (marcvanderchijs (at) gmail (dot) com). If you can provide me with the latest model I will test it for at least a few weeks and let you know my experience and blog about it.

This afternoon we had an appointment for our baby Scott at WorldLink with our doctor. We were a bit late already, when I realized that the baby was still asleep in his bed. So I went over and took him out of his warm bed. He woke up and looked at me angryly, because he just went to sleep an hour earlier. And when I tried to put him in his Maxi-Cosy baby stroller he started crying out loud. Really, really loud. I would do the same in his situation, so I did not blame him.

But my wife blamed me. She was not in the living room at that time, and came running in and asked me why I woke up the baby. I told her that you cannot avoid waking him up if you go out with him. She had a puzzled look on her face, and told me that we had an appointment for a regular check-up for her, not for the baby. Oops, I misunderstood…

Now the baby, happily asleep minutes earlier, was crying like crazy. We had to leave and it was up to her parents to get him back to sleep. I felt pretty stupid, but could not do much. Luckily the others could laugh about it, and later I heard Scott went back to sleep quickly after we left.

Some companies need serious help to market their products.

I have been in Shanghai for many years, and am an avid yogurt eater. At least three times a week my breakfast consists among others of yogurt with muesli. The problem is that the yogurt for sale in every Chinese supermarket is of the sweet variety. You just cannot buy unsweetened yogurt in a normal supermarket (Carrefour may be an exception, but likely at astronomical prices, and I hardly ever go there). It does not taste bad, but it’s full of chemicals, and I prefer to have the original sour variety in my fridge.

Therefore I was pleasantly surprised to see an article in Shanghaiist a few weeks ago called Bebemamie, fresh unsweetened yogurt delivered to your door. It turns out that there is a French company in Shanghai that has been producing fresh yogurt since 2004 and selling it directly to its customers. And I did not even know about it… I think they should get a new marketing person right away. It is not so difficult to reach your target group in Shanghai, which probably mainly consists of foreigners. But if you wait for 4 years before blogs start writing about you, you may have lost some sales. Their website seems to be blocked in China (did they ever check?), and when I used a proxy server to see the site I got an empty page with the text ‘Opening soon. (c) 2005 Bebemamie’…

Maybe I am wrong, and they just do not want more customers because of production capacity restrictions. Or they feel it should be a niche product that not too many people should know about. If that is the case, I am sorry for this additional promotion, because your product is perfect!

My wife and I started ordering right after reading the article, and are very happy with the product and the easy home-delivery. Every Monday a delivery person brings us 10 new jars of fresh yogurt, and picks up the old jars. Exactly enough for one week. And although the price is not low (RMB 10 per small jar), the convenience and taste completely compensate for this. It is a thick, sour tasting yogurt, exactly the same as the yogurt I had when I lived on the island of Curacao as a kid. I don’t think I had it anywhere else since.

Interestingly, my wife also says that this is the kind of yogurt she had in Beijing as a kid. So it seems that in the past Chinese also ate the unsweetened ‘real’ yogurt. Did people’s taste change after they introduced the sweet variety? Or was it cheaper to produce a more artificial product?

Whatever the reason, I am happy to have real yogurt again. Real yogurt without any added chemicals or preservatives, and made from imported Australian milk. If you live in Shanghai or Suzhou and want to order as well, call Bebemamie at 021-6269 1701 or 6269 1702. The yogurt is also available at Kommune, Slice Deli, Enoteca and House of Flour. Look for small unlabeled glass jars with yellow tops. Bon appetit!

When I joined Spill Group just over two years ago to set up their business in Asia, it was still a relatively small Dutch company. I had actually never heard of the company before Reinout te Brake contacted me, and also could not find a lot of information on the internet about Spill. Fast forward 26 months and things are completely different. Spill is now a VC invested company with over 130 employees, offices in Holland, Poland and China, and with leading online flash game websites all over the world. In terms of reach the company is in the top-3 of the online webgames world, together with Yahoo Games and MSN Games, with over 60 million unique visitors per month. If Microsoft and Yahoo do not merge Spill Group will be the number one very soon. I am proud to be part of this company, and hope to be able to continue to add to its success in the coming years.

This week at the Casual Connect convention in Amsterdam, Spill Group announced three new cooperations that shows the direction the company is going. First of all Spill Group announced that it decided to work with in-game advertising agency Double Fusion for both gamesgames.com and girlsgogames.com. Spill looked at several in-game advertising companies, but decided to work with Double Fusion because of its innovative solutions and end-to-end solution. This is a significant step, because it shows that Spill is now focusing more on the US market after already dominating many of the European markets.

Another big step for Spill was the announcement of RealNetworks that they have signed a long-term cooperation agreement with Spill Group. The cooperation will give Real exclusive syndication rights for Spill Group’s family-oriented portals. This means that Real’s games will be totally integrated into Spill’s portals, giving them a much bigger reach then before.

Third, Spill just announced that it has given Panfu, a recently launched and very fast growing virtual world for kids, the exclusive syndication rights for the kids sections of Spill Group’s portals in several European countries. These last two deals show the importance of having high game traffic on portals, and Spill’s role as the world’s number one game traffic generator, which is the core of Spill Group’s business model. I am sure you will hear a lot more about Spill Group in the next months and years, not only in Europe and the US, but also in Asia.

Last night was New Year’s Eve according to the Lunar Calendar, marking the beginning of the Year of the Rat. Some people also call it the Year of the Mouse, and especially Walt Disney is using that with lots of Mickey Mouse related New Year’s events and ads for Hong Kong Disney Land.

We stayed in Shanghai this year, because a 6-week old baby is a bit too young to take to a South-East Asian beach resort, or to fly to Beijing to meet Grace’s family. However, her parents are here now to take care of Scott, so it was still a family event. Like every Chinese family we had a big dinner, and after that the family gathered in front of the TV to watch the New Year show. This program, that is rumored to be the most watched (non-sports) TV program on earth, features stand-up comedians, dancing, singing and acrobatics. To me each year’s program is similar, although the themes are a bit different (of course this year the Beijing Olympics were part of it).

It’s not my favorite program (and that’s an understatement), so I was happy that Gary and Yang Lei decided to drop by. Yang Lei and Grace played with the baby, while Gary and I sat in my study smoking nice cigars and drinking a New Zealand red wine. We talked about the past year, and our plans for the coming year(s). Always nice to reflect on what has happened to Tudou, and where it is heading. Around 10 PM the fireworks outside got so loud that I had to close my window (I opened it for the cigar smoke) and around 11 PM even with the window closed it was difficult to talk.

Gary and Yang Lei left around 11:30, so they would be home in time for the new year. And in time to pack for their mini-vacation somewhere in South Asia. After that I got my camera and made some shots of the firework that was set off outside. The sounds and lights amaze me every year again, especially because the fireworks are a lot heavier than the ones that are allowed in Europe. I put a short clip on YouTube (shot from our 37th floor balcony) so you can get an impression of what was going on outside. Happy Year of the Rat to all my readers!

This afternoon I went to the Dutch consulate to apply for a passport for Scott. Finding out exactly which information we would need to apply for the passport was a bit difficult. When I called the consulate last week at 10:30 AM I got an answer machine saying that the consular section would only be open between 9:00 and 11:30. Huh? I was calling in that time frame.

The information available online did not answer all my questions, but the next day I reached their receptionist who gave me a list required documents. Quite some information, but we had all of it readily available, except for the required baby passport pictures.

So the next hurdle was to get these passport pictures made. There are quite some restrictions for Dutch passport photos, which is fine for adults, but a hassle for little babies. The consulate gave us the name and address of a Kodak outlet that would know how to do this. But when we called there to check they said they had no experience with babies. Because there is no way you can ensure that the baby will be awake when a picture will be taken, and you cannot wake a baby up without causing inconsolable crying, we decided to take some pictures ourselves and bring it to the Kodak shop to make them into the right format to fulfill the requirements. So finally we had our pictures and this afternoon we went to the consulate.

In order to apply for a passport for your kid, both parents and the baby have to come to the consulate together. This caused some logistic issues in between nursing times, but because it’s almost Chinese NY I had a very flexible schedule today. Things went very smoothly there, we were the only visitors at the consulate, and they helped us quickly and efficiently. In two weeks Scott will have his own passport!

The only thing is that he does not have a Chinese visa and residence permit yet, so that will be the next problem to solve. Not sure how that works yet, but knowing Chinese bureaucracy that might take a bit more time. I am also not sure if I still need to officially register Scott in the Netherlands – I tried to do that at the consulate right after he was born, but was told that this was not necessary (or even possible). Any suggestions are welcome, otherwise I will spend some time online during Chinese New Year to figure it out.

Today Scott is one month old, and in China you then celebrate Man Yue. There is a tradition that the baby’s hair gets shaved off at Man Yue (or after 100 days, or after 1 year).

At first we were not sure if we should also follow the tradition, but eventually we decided to do it. We were curious what our son would look like without hair, and apparently it is good for the baby’s hair when you shave his head completely. A special baby barber came to our apartment, and got rid of all our baby’s hair in a matter of minutes. He will use Scott’s hair to make special Chinese painting brushes out of it. A good souvenir.

Judge for yourself whether it looks good or not. I had to get used to it at first, but now I like it. I feel Scott looks much more like a young baby now.