America’s Cup: delivering on a plan

The America’s Cup event was over hyped.  Many held unrealistic expectations of how it would do.  However, hype shouldn’t be the benchmark.  What we should be considering to determine whether or not the America’s Cup event was a success was comparing it to the original estimates.  Those were the basis upon which the decision was made the host the event and should be the benchmark as to whether or not the event was a success.

As noted back in August when musing about the eventual report’s outcome:

Smart financial decisions are not based upon hype.  They are based upon conservative projections of a return on investment. America’s Cup was not brought here because of hype, it was brought here because conservative projections suggested it was a good investment.


What we really need to do is take a step back and compare the results that we’re seeing against the projections to prove if the investment was worth it. The conservative projections suggested that based upon the invested amount we would generate $235 million of direct spend on the island.  We need to figure out if the returns generated met or exceeded that estimate.  If you expected it to bring the second coming of Jesus then I can only shake my head that you bought into such hype and suggest you’re reading the wrong blog.

The America’s Cup was a well planned event.  It was the only case I’m aware of where an estimated potential economic impact assessment was done to justify whether or not the event should be done.  These sorts of things are critical.  It is easy to throw money at something and hope, but that doesn’t always yield results.  It is much better to take a measured approach to develop a plan and estimate conservatively as best you can so you have a good idea of expectations.

Here were the key findings of the potential economic impact assessment report.

 

The categories didn’t match exactly as there were some variations in terms of estimates for more cruise visitors, increased impact on government and concerts.  Visitors was given as a total which has been compared against the $25.9 million total estimate for visitors.  There was no impact from cruise provisioning, government-other or concerts.

Overall however, every category outperformed the estimate of gdp impact with the exception of government.

How did the actual event measure up?  In total expenditure, the impact was reported as having been $336.4 million vs. the original $242.2 million.

Was the America’s Cup a success?  There has been a great deal of debate about whether it could have done more or shared the benefits better.  However, when considering whether the event was planned, estimated and executed successfully, the numbers suggest that it exceeded expectations. Let us hope that future events and initiatives are planned, estimated and executed in a similar fashion while yielding a similar level of success.

Comments

comments

The swing vote matters

Here’s my chart of poll results going back over the last few years.

Notice something?  The big change in the election was that the swing vote wholly supported the PLP.

This is key to understand.  The OBA, if they want to maintain any sort of relevance, need to target the swing vote, not hardcore PLP supporters.

Who are the swing vote?  What does the swing vote want?  How do they target those desires and deliver?  Those are the key questions the OBA needs to answer with any strategy.

 

Comments

comments

Again… seeking profound change

The OBA’s strategy and vision is to keep recycling the same failed strategy which hasn’t worked.  It is honestly so repetitive that I don’t even feel its necessary to write anything new on it.  I can just quote old commentary regarding the UBP where most of it still applies for the OBA.

Here’s a post from 2009 regarding a need for fundamental change in the way the party conducts themselves rather than new faces.


Seeking profound change

Originally published June 2009

John Barritt was recently quoted in The Royal Gazette condemning the suggestion that the UBP should rename itself.

“A rose is a rose by any other name. Something more profound than that is required.”

Mr. Barritt is absolutely correct.  However, peering through rose colored glasses could detract oneself from distinguishing between a rose in bloom and one which has wilted.  As Mr. Barritt suggests, the UBP needs profound change and a new name won’t do it.  Members need to either walk away from the party and go independent or the UBP needs to start being the change it says it would bring.

When it comes to the “do as I say and not as I do” mentality it is hard to differentiate the UBP from the PLP.  The PLP have been known to skirt laws, policies and procedures while expecting the people to have respect for them.  The UBP subsequently condemns such actions and suggests that government should embody ‘good governance’ and transparency when it itself doesn’t follow such principles.  While the UBP may claim ‘we’ll earn your trust’, we shouldn’t have to wait until after their elected to start trusting them for  maintaining a shroud of secrecy only works against its development.

If the UBP play the way they practice then the way they run their party is a good benchmark for how they’d run government. Thus despite many promises to the contrary, people still believe things likely wouldn’t change if they were elected.  If the UBP hopes to gain any form of traction a real step forward would be to first change in themselves what they would like to see changed in government.  This means reversing the culture of secrecy within the party and making as much of it as transparent as possible.

Why? Let us use the changes we would like to see in parliament as an example.  At present there is no advance schedule, little room for public consultation, no hansard minutes and no publishing of voting results.  All of these are things the UBP would likely claim they would change if elected and yet none of these things are reflected in the way the party is run.

Take caucus meetings as an example.  It is a rather secretive event.  Now certainly there are portions that are necessarily secretive but then there is likely also a great deal which is not.  Thus, why not bring transparency to everything that does not specifically need to be kept secret?  The UBP could publish an advance schedule including descriptions of topics to be discussed.  They could open themselves to public feedback on those topics ahead of time.  They could record and publish hansard minutes and finally publish voting records.  Beyond this they could do the same with other meetings including trying to document what they are able to of parliamentary sessions.

You might ask if the process of reaching consensus is made public, would this tarnish their ability to maintain a unified front?  In order to combat this assertion let us take a look at when parliament works best, which is when people vote on conscience.  When votes reach a consensus everyone falls behind that consensus and government resolves to pursue the result.  People debate, discuss and finally agree on a way forward.  Should this parliamentary process be made public?  If so, why is transparency in parliament any different from transparency in a party caucus?  Why is it not possible to disagree, debate, come to a consensus and finally unify behind the decision, all in the public eye?

Bringing transparency to the party would reap rewards greater than just improved trust.  The party can demonstrate what government would be like if it was in charge.  It could bring greater visibility to the less outspoken and less publicized members allowing for greater promotion of their individual candidates.  It could enable them to garner more support by welcoming feedback and public input.  It would encourage people to feel like they could have a greater impact on decisions and give the party a more participatory feel.  Subsequently the party could look to other initiatives it hopes to bring forth should it be elected and move for implementing them today.

Let us take a moment to call a spade a spade and realise that sometimes roses need to be replanted in order to flourish.  Upturning the roots of the party would reflect a profound change that could set the UBP on a new course.  It would finally be able to demonstrate a real commitment to the democratic change that so many know we need.  It would give the party new found life and potentially entice greater support, thus enabling the party to rejuvenate itself more empowered to better serve the public, whether as opposition or incumbent.

Comments

comments

What are cryptocurrencies?

MONOPOLY MONEY TEMPLATE | cvsampleform.com

Previously I wrote  laymans explanation of the blockchain.  I’ve been asked to write an explanation of what cryptocurrencies and distributed ledger technology is.  This is my attempt at explaining cryptocurrencies and hopefully later I’ll come back to distributed ledger tech and it’s potential.

What are cryptocurrencies?  Well to start off with, let’s not over complicate it by worrying about the “crypto” part and simply things down a bit.  A cryptocurrency is a virtual form of money that anyone can create.  Imagine you had a large printing press and decided to print your own money.  By doing so, you would effectively create your own currency.

Virtual currency is the same, except the money exists digitally rather than in paper form.  The key thing to understand is that it is only transferable and only has value based on who or what is backing it.

If I offered you $100 USD vs. $100 Monopoly money, which would you take?  USD you know you can readily use and would be accepted almost anywhere on the planet.  Monopoly money, by contrast, is really only valuable in a game of monopoly.  Outside of monopoly, it is worthless and no one sane would give you anything for it.

Currencies that aren’t backed by a physical asset of some sort are a figment of human imagination.  They only hold value if people think they do for otherwise they’re worthless.  For many years, USD was backed in value by physical gold.  The ability to exchange your USD for gold at any time is what made people believe in its value.  Today, it is a global medium of exchange backed by the US government and US Treasury and that backing is what lends people to still trust its value.

Bitcoin

Bitcoin is also a figment of human imagination.  It is backed by nothing of actual value but is built on a technology called the blockchain.  The block chain provides a near irrefutable medium of trust backing the bitcoin currency.  That trust is acheived through distribution and cryptography.  Meaning it is near impossible to corrupt it and the log that backs all of the transactions made in it going through history.  So the currency itself is nearly uncorruptible, however it’s value is a different story.

Bitcoin is only as valuable as people deem it to be.  It is not tied to any underlying asset so a bitcoin is only worthwhile if you can exchange it with someone else for something of value.  This is the looming problem with the debate over whether or not bitcoin is in a bubble.  Many people are buying bitcoin because other people are buying bitcoin, not because they want to exchange it for something else or use it as a medium of exchange.

The trouble is that in order for it to maintain its value, you need to have someone else to sell it to.  There are realistically few places that accept it, the transaction costs are high and if suddenly everyone wants to recoup their earnings at the same time it can lead to a crash where there are many more sellers than buyers.

I highly recommend reading this article if you’d like to know more about Bitcoin’s underlying value.  It is the clearest writeup I’ve seen yet.

So bitcoin bitcoin fundamentally has value because people believe in it and it’s potential.  As long as people continue to believe in it it will continue to have value.  If that changes, bitcoins value will change.  So that’s bitcoin, how is it different from other cryptocurrencies created as part of “initial coin offerings” (ICOs) and referred to as “tokens”?

Other cryptocurrencies and Initial Coin Offerings (ICOs)

What are ICOs?  ICOs are the equivalent of people printing their own money.  Fundamentally, people create their own money and then, via the internet, offer their newly created currency for people to purchase.  This “initial coin offering” is being used as a funding mechanism for various concepts.  An important thing to understand is that when you purchase the money/tokens/currency of an ICOs, your purchasing the equivalent of paper money someone has printed that in most cases gives you no entitlement to ownership of any sort of an asset.

For many years the retail chain in Canada called Canadian Tire printed it’s own money.

Canadian Tire: A True Canadian Icon: Canadian Tire 'Money ...

That money was usually given out as part of a loyalty scheme where a certain percentage of your purchase was given back in the form of Canadian Tire money.  It is a currency that is only valid and accepted in Canadian Tire stores.  Outside of those stores it has no value except in trade with people who would use it to shop in those stores.

Imagine that Canadian Tire was struggling financially.  They decided they wanted to raise money by using an ICO.  They turned around, created a new “cryptocurrency” version of Canadian Tire money and sold it via an initial offering on the internet.  This would allow people to trade currently accepted, transferable and government backed Canadian or US dollars for this new Canadian Tire cryptocurrency or tokens.  Canadian Tire gets real money they can use to fund their operations, you get virtual money you can use to buy things in their stores.

Here’s a key point to understand.  By buying Canadian Tire’s cryptocurrency you don’t actually end up owning anything.  It provides absolutely nothing more than the ability to spend that currency in their shops.  If Canadian Tire goes out of business?  Your currency is worthless, just as your stash of paper Canadian Tire dollars would be.

The big challenge of cryptocurrencies like Bitcoin, Litecoin, Ethereum Coin, Bitcoin cash and other ICOs is that the market is horribly unregulated and you could end up buying a currency that in the end is not transferable and ultimately worthless.  This is key to understand before getting caught up in the hype.

Cryptocurrencies and Bermuda

So, if cryptocurrencies are inherently risky and virtual does that mean Bermuda should be avoiding them?  Frankly, no.  Cryptocurrencies are a highly unregulated industry at the moment.  Opportunities exist to provide jurisdictions to provide the right regulatory framework to enable cryptocurrencies to be trusted for everyday use and flourish as a new medium of exchange.

We effectively have arrived at an age where anyone anywhere can create their own currency.  This has power in that it has democratized a key founding principle of what powers modern society.  Currencies act as a transferable store of value and medium of exchange and it is tremendously valuable to enable people to be able to create them to empower groups, organizations or individuals.  Many great innovations will arise as a part of it, however there will be many growing pains along the way.

The opportunity for Bermuda is if we can move quickly with the right streamlined regulation to enable cryptocurrencies which are backed by a robust regulatory framework that establishes trust.  The race is on to be a competitive player in providing the right environment. Bermuda has an opportunity if we move to embrace it and ensure we stay in line with our historical principles of offering a compelling regulatory framework that maintains a strong reputation as above board and trusted globally. (We also need to do everything we can to maintain that reputation and not inadvertently damage it and ruin our opportunity)

So what about distributed ledger technologies and the blockchain?  Cryptocurrencies are only the tip of the iceberg, the most well known application of the blockchain.  The real future is leveraging DLT for much bigger and better concepts, however that’s a wholly larger discussion and one which will have to wait for another article.

Comments

comments

Should we strive for more independence or more control to ensure a successful gaming industry?

Social media has been set alight by the proposed Casino Gaming Amendment Act, a fire stoked between those who fear political interference and those who believe the government has a right to set the direction for gaming on the island. When it comes to gaming governance there is wide variance between strict independence such as New Jersey’s which offers a bi-partisan fixed term, reasoned dismissal approach and that of Singapore which allows for significant Ministerial intervention.  Which is the best fit for Bermuda given our environment, political history and desire for a successful gaming industry?

The opposition has thrown down the gauntlet speaking to those who fear our history of issues becoming stymied by political interference and scandal, defending their version of independence. By contrast, the government speaks to their significant mandate from those who desire them guiding the course of policy.  Was the original law independent or lax enough?  Is the proposed change one that risks enabling political interference and eliminating the independence of the gaming commission?  Is the proposed change one which will bring us in alignment with other jurisdictions allowing the government more control over appointments and policy implementation?

The existing Casino Gaming Act, implemented by the now opposition provided provisions for varying initial fixed term appointments by the Minister of the day.

Limited provisions were added for the removal of a member on the basis of bankruptcy or criminal offenses.  Otherwise, members were appointed and cannot be removed.  The premise appears to have been to provide rotating fixed terms of 3 years for commission members to provide continuity across changes in governments.  Many have decried the lack of “independence” in these original appointments as justification for changing legislation to allow for a change in the guard now.  Did the original legislation go far enough in ensuring independence in the commission and the appointment of its commissioners?

The amendment itself, as published by Bernews, provides provisions for the Minister to remove members from the commission at will as well as give directions on policy.  This represents a substantial departure from the OBA’s original intent.

Minister Simmons argues that the current commissioner has failed in his duties and should be replaced.  It is his assertion that this is the right of a new government to replace commissioners as they see fit.  He suggests this is fairly standard practice internationally and cites Singapore as an example.

“The Casino Gaming Amendment 2017 I tabled brings Bermuda in alignment with other jurisdictions including Singapore regarding Casino Gaming Governance.” bernews.com/2017/11/casino…

What does the Singapore’s Casino Control Act say?

Constitution of Authority

7.

—(1)  The Authority shall consist of the following members:

(a) a Chairman; and

(b) such other members, not being less than 4 or more than 16, as the Minister may, from time to time, determine.

(2)  The Schedule shall have effect with respect to the Authority, its members and its proceedings.


Directions by Minister

11.  The Minister may, after consultation with the Authority or otherwise, give to the Authority such directions, not inconsistent with the provisions of this Act, as to the performance and exercise by the Authority of its functions, duties and powers under this Act as the Minister may consider necessary, and the Authority shall give effect to all such directions.

Thus, indeed Mr. Simmons is correct in suggesting that Singapore does allow the membership of the authority to be chosen by the Minister.  It also matches the proposed legislation in that it enables the Minister to give policy directions to the body itself.

However, various individuals on social media have decried Singapore as a poor example of a strong democracy and not one we should emulate.  According to the wikipedia article on Singapore, it is not held in the highest regard for democratic freedom.

Although the elections are clean, there is no independent electoral authority and the government has strong influence on the media. Freedom House ranks Singapore as “partly free” in its Freedom in the World report,[87] and The Economist ranks Singapore as a “flawed democracy”, the second best rank of four, in its “Democracy Index“.[88][89] 

However, it also notes that ‘Singapore “consistently rated among the least corrupt countries in the world by Transparency International.[97].  That Singapore’s unique combination of a strong almost authoritarian government with an emphasis on meritocracy and good governance is known as the “Singapore model”, and is regarded as a key factor behind Singapore’s political stability, economic growth, and harmonious social order.’

 In 2011, the World Justice Project‘s Rule of Law Index ranked Singapore among the top countries surveyed with regard to “order and security”, “absence of corruption”, and “effective criminal justice”. However, the country received a much lower ranking for “freedom of speech” and “freedom of assembly“.[100] All public gatherings of five or more people require police permits, and protests may legally be held only at the Speakers’ Corner.[101]

Any who believe in the right of the people to demonstrate, march, protest and call out the government as happened during the last administration, would likely be perturbed by the restrictions Singapore places on freedom of speech, freedom of assembly and protest.

Some have argued that by giving the Minister control over who is on the commission as well as the ability to dictate policy that the commission is by no definition independent.  A commentary posted in a newsletter by Global Gaming Business’, a leading publication that focuses on the international gaming industry, had dire warnings for the proposed legislation.  It suggested the legislation “strips the commission of any independence since the members would be removed if they didn’t follow the directions of the government”

In no respected gaming jurisdiction can the government remove a duly appointed member of a gaming commission without proof of wrongdoing.

 

[I]f the government controls what the commission will or will not approve, this is the definition of corruption. A commission that is dependent upon the government for its jobs and funding will simply be a rubber stamp for any deal negotiated by the government along with any strings that are attached to such a deal.

 

Perhaps some officials in Bermuda should contact the regulatory boards in New Jersey, Nevada, the United Kingdom or any reputable gaming jurisdiction. Find out what the procedure is in those regions to remove a sitting commissioner. It’s not easy.

Mr. Simmon’s suggests he does have reasoning and decries Commission Chairman Alan Dunch as having been ineffective and having had an attitude towards the new government. 

“[Mr. Dunch’s] attitude may perhaps be further seen in the recent non-participation in the National Anti-Money Laundering Committee’s National Risk Analysis, failure to provide the requested presentation for the related workshops and failure to provide the analysis and conclusions of the working group that the commission was chairing.”

So what are the regulations surrounding appointing and removing gaming commission members in New Jersey, Nevada and the United Kingdom?

New Jersey has one of the strongest protections of independence with their commission having established fixed terms, bi partisan balance of appointments and removal only by cause.

The Casino Control Commission consists of three members appointed by the Governor of New Jersey with advice and consent of the New Jersey Senate. The number of commissioners was reduced from five on January 17, 2012.[8]

Commissioners serve staggered, five-year terms and can only be removed for cause. By law, no more than two commissioners can be of the same political party, a requirement that is intended to ensure political balance on the panel.

What of the UK? The law provides control to the Secretary of State (Minister) to appoint and remove commissioners as they see fit.

The Gambling Commission shall consist of a chairman and other commissioners appointed by the Secretary of State.

(3)If the Secretary of State thinks that a commissioner is unable, unfit or unwilling to perform his functions, the Secretary of State may dismiss the commissioner.

However, I was unable to find any examples where a commissioner was removed from the Commission by a Secretary of State.

Nevada is less clear, there were no specific provisions that could be found in acts regarding the appointment and removal of regulators.  The only references to the removal of a members was found was in a 2007 Reno based NewsReview.com article when the incoming governor made a stroke of midnight switch of appointees.  The article goes on to note “Casino regulators serve fixed four-year terms to protect them from changes in administrations, governors have not always respected that process” and provides a couple examples.

After the 1982 election, governor-elect Richard Bryan asked Richard Bunker to step down as Gaming Control Board chair, and Bunker complied.

 

“I had indicated that I would like to appoint my own person, and he readily agreed to that,” Bryan said last week.

 

After the 1966 election, governor-elect Paul Laxalt publicly requested Nevada Gaming Commission chair Milton Keefer and commission member James Hotchkiss to step down. They weren’t wild about the idea—Laxalt had attacked them both during the campaign—but within weeks they both resigned.

The governor in 2007 admitted that the law provides for a fixed term and suggested there is no obligation on the part of a member to step down and thus the reason for his the midnight switch to change the appointment before it took effect.  He suggested he “would feel more comfortable having his own person” on the board.  To which the article notes “the whole purpose of the law is for governors not to have their “own” people in these sensitive posts, since the statute insulates appointees from political removal and regulators’ terms often overlap those of governors”

The governor argued that he only wanted to replace the Chair and not the other members, noting a hands-off policy beyond the reappointment.

 “I took the view that essentially the governor ought to have a hands-off policy with respect to the day-to-day operation, but I certainly wanted to be briefed, and was briefed, for example, when we intervened at the Stardust and other properties … during my term.”

 

In a more locally oriented comparison of independence, we could look at the Tourism Authority Act with regard to appointment of the Chairman and members.  Certainly it should serve as an example of the opposition’s idea of independence given that it was set up to be independent of political interference.

So in the case of the Bermuda Tourism Authority, the Chairman is appointed for a fixed term though can be removed with specific cause.

What is perhaps the most interesting point to note is that among all of the jurisdictions mentioned, the only one which provided a provision for a Minister to “give directions to the Commission as to the policy” was Singapore.  None of the other jurisdictions reviewed appeared to have any such provision to allow for a Minister to dictate policy itself.

Overall, the consensus appears to be mixed with the strongest provisions for independence of commissions being New Jersey’s which allows for bi-partisan staggered appointments and removal only with specific cause.  Singapore provides the most flexibility and provisions for Ministerial direction, though it lacks credibility towards independent governance which is accommodated by their low levels of historical corruption.

This leads us to wonder, what are the best provisions for the future of our island to ensure the success and welfare of our fledgling gaming industry?  If independence is a goal, why was the original act not modeled after New Jersey’s system to provide for bi-partisan balance of appointments, fixed terms and reasoned removal?  If independence is not a goal, why have a commission at all?  Are we satisfied enough with our track record on historical corruption on both sides of the isle that we can successfully emulate the Singapore model?  Does the proposed amendment provide an environment where our industry will flourish?  Does our existing law do so?  Perhaps we should go back to the drawing board?

 

Comments

comments

Ranking tech hubs and what makes them appealing

A reader sent in a link to an interesting article of 2017 tech hub rankings.  The ranking itself may largely be subjective, however it is interesting to note the criteria used to measure appeal as they are fairly indicative of what we need to be considering.  It seems they’ve tried to balance appeal for both starting a business as well as attracting talent.

The company behind the ranking provides a number of measures they use.  In 2016 they used 8 categories.

4 Work factors

  • Time To Start A Business
  • Seed Funding
  • Startup Output
  • Average Salary

4 Life Factors

  • Cost of living
  • Average Rent
  • Paid Vacation
  • Average Commute

In 2017 they expanded the list

  • Early staging funding
  • Startup Experience
  • Cost of living
  • Paid Holiday
  • Software Engineer Salary
  • Cost of Monthly Travel
  • Time To Start a Business
  • Monthly Rent
  • Growth Index
  • Startup Output

These kind of things are worth noting, especially those that are under Bermuda’s control such as the Startup Experience and the Time to Start a Business.  Toronto and Montreal score high in the rankings because you can start a business in 2 days.  How long does it take in Bermuda?

Comments

comments

The best way to kickstart a tech hub/scene in Bermuda is to have International Business and/or Government invite entrepreneurs to solve their business challenges.

Stuart Lacey nails a key roadblock to building a tech hub in Bermuda.

“What we need, and what Bermuda has in spades, is real businesses with real problems,” he said.

“Start-ups need access to global companies, working closely with them to see what isn’t working and integrate to work with them.”

This.  So much this.  The best way to kickstart a tech hub/scene in Bermuda is to have International Business and/or Government invite entrepreneurs to solve their business challenges.

The best possible synergy can be found in identifying pain points within the industry that don’t represent the core value proposition of a business.  Something that is a common problem across the industry that is not worth the investment to solve directly but would be welcomed as a third party solution.

This is an essential component to kickstarting a tech hub/scene on island.  The reason being is that the most challenging part of building a tech startup is finding product/market fit.  Put in layman’s terms, startups have the most chance of success if their solution fits and solves a specific problem that people value enough to pay for.

If, entrepreneurs can readily be paired with an industry (like our local insurance, legal and finance industries) to address their pressing non-core problems, we can plant seeds for Bermuda based startups.  All of the other elements required to build and scale those startups are here, we just need to pull them all together.  An absolute best first step would be for international business to openly invite and pitch to potential entrepreneurs challenges that they would readily like to see solved and would be willing to pay for.

 

 

Comments

comments

The challenging task of building a tech hub in Bermuda: it needs to be quick, easy and painless to startup in Bermuda

 

Building a global tech company is incredibly difficult.  Many people think mega tech companies like Airbnb start just as an idea that raised millions of dollars.  Seems easy.  Few understand the real stories, like Airbnb having actually started as “Airbed and breakfast”, literally offering to rent out an airbed in a living room. That they struggled in their first year, amassing $40,000 in credit card debt and ended up raising money and marketing themselves via an election gimmick of selling re-branded cereal as “Obama O’s”.  It wasn’t an instant jump to easy money, it was a long haul to build a tech business.

startup financing stages

Raising lots of money is only part of the process and its the part the average man on the street thinks tech companies are all about.  Have some crazy idea, raise milllions, profit!  It usually doesn’t work that way.  The idea is only the beginning.  You then have to prove your idea by self funding or raising money from friends and “angel” investors to try to take your idea to something tangible.  You need to deliver something with promise before you can progress and this isn’t anywhere as easy as most people think it is.

Just building a viable startup with a viable product is impossibly difficult.  Then making it to the stage of scaling and possibly raising capital is on a whole other level.  If Bermuda dreams to create a tech hub we need to truly understand what it takes to build great startups and how we can nurture them to success.  We need to remember that every other country on the planet also has their eyes on attracting tech startups and talent.

The process of building a successful global tech company is significantly more complicated that most people realize.  Here’s a great breakdown of the stages from startup commons.

Building a team that can work together alongside a product that fits a market need is complex and expensive.  During this period you likely have no profit or revenue and it may involve “pivoting” from one concept to another to achieve a viable product that fits a market need.  Along the way you compete on a global scale facing well funded competitors, challenges and harrowing moments where you may go broke.  Often times building a product requires a significant upfront investment before you can generate profits or revenue which can be different from other businesses.  This makes the whole process different and quite a bit more challenging.

The big challenge facing Bermuda is that the early stages are expensive and low taxes are not an advantage for companies with no profit.  Low taxes are only advantageous for large established companies so we can’t think this will attract startups. Bermuda is one of the most expensive places to start a business, we don’t have an environment conducive to startups to offset the costs and the bureaucracy can be soul crushing.  This needs to be changed and soon.

While building my own tech company I traveled to places like Eastern Europe and South East Asia to keep costs low as a “Digital Nomad”.  If I’d stayed on island paying rent I would have gone broke early on.  You would be amazed at how nice of a hotel room you can get for $15 a night and the kind of meals you can find for 18000 dong (<$1) in places like Saigon. For years I had no income, was self funding or “bootstrapping” and was trying to stretch my savings to get my company off the ground.  I settled permanently back on island largely because Bermuda is my home and I want to be here.  It’s still a challenge because the less than average income I am able to pay myself would go a lot further anywhere else in the world than it does in Bermuda and I could probably reinvest more into my business instead.

There are challenges for Bermuda if we don’t attract startups at the idea stage because if you build a team somewhere you’re unlikely to move it once you start scaling.  It is hard to relocate a team once you’ve established a base somewhere, if you even do.  In order to be competitive Bermuda needs to offer a great deal more than low taxes.  Free office space in Southside with no support infrastructure, not even a restaurant, simply isn’t competitive when you compare what incubators and accelerators all over the world are offering.  Almost every country on the planet wants to attract tech talent and startups and are incredibly welcoming for it.  Bermuda, if it wants to build a tech hub, needs to provide a great deal more.

Stuart Lacey, another Bermuda based tech entrepreneur who founded Trunomi, had some good comments in yesterday’s Royal Gazette covering it.

Mr Lacey said a support system would need to be easily accessible to ensure the tech hub’s success.

Mr Lacey said: “In order for any tech hub to be successful, it will require significant and specialised support infrastructure such as transport, accounting, banking, legal, catering, restaurants and hotels in the immediate vicinity.

As Mr. Lacey notes, an RFI is a good start as it will give the government an idea of what the challenges are.  A tech hub needs the right sort of environment to make it as friction-less as possible to start a company.

  • It needs to be easy, quick and painless to start up in Bermuda.  Registering your company, jumping through legislative hoops, setting up bank accounts, etc.
  • It needs to be easy, quick and painless to bring talent to the island
  • Startups need mentorship, guidance and support through each stage from people who’ve done it before
  • Startups need help networking with people in industries who can help them grow
  • Startups need networking and access to people they can pitch to for potential investment at each stage to offset Bermuda’s expensive environment
  • Startups need opportunities to interact with local government and business to find opportunities where they can add value and build a viable business based upon industries we already have here.
  • Startups need need an environment where they can learn from other startups via conferences, meetups, communities
  • Startups also need infrastructure and amenities like Mr. Lacey suggested

The list goes on.  There is a great deal of support that needs to be provided to help founders turn an idea in to a business.  If Bermuda wants to seriously compete in attracting startups and building a tech hub we need to take a long hard look at what is required and what we can do that no other destination can.  We’re small, we have a wealth of local seed capital available, we have industries that could be leveraged for challenges to be solved and we could make doing business here easy, but the first step to disrupting industries likely needs to start with disrupting government.  It needs to be easy, quick and painless to start up in Bermuda.

Comments

comments

Thoughts on the OBA leadership contest

Back in September, Jeremey Deacon put up a post speculating on the OBA’s future: Where does the OBA go from here?

The first will be to elect a new Party leader which is, in itself, going to be interesting. They cannot elect someone with a UBP past, some of the OBA heavy hitters lost their seats at the last election, others have stepped down from the front bench or have left the Party altogether and they simply cannot consider turning the clock back, meaning there are meagre pickings.
Could they again elect a leader who is not an MP, as happened with Craig Cannonier? Yes, but the optics would be bad and would mean someone doing a John Barritt and sacrificing their safe seat.
It would also mean that the OBA would be led by a political novice and in the state they are in at the moment, when there is a dire need to rebuild and refocus, that, at least in my opinion, would be an unwise move.

In my own opinion, the OBA is struggling for relevance at the moment and it doesn’t terribly matter who they elect.  They fundamentally need to fix their very nature and it is far more of a task than simply picking a leader.  I said as much in my 100 days commentary.

“The OBA seem far too focused on what they think led to the PLP’s election win and not nearly focused enough on what led to their own loss.

“The party they campaigned to be before the 2012 election and the party they became were incredibly different.

“At their founding, they were to be a party of the people, collaborative and inclusive. Instead they became the opposite.

“Far too much emphasis is being placed on trying to emulate the PLP’s political style and not nearly enough is being placed on emulating the PLP’s ability to connect and be a voice for the people. “It is highly unlikely that leading from an ivory tower will ever result in the kind of outcomes they wish to achieve.”

One of the big differences with the founding of the OBA was that the people picked the leader, regardless of who it was.  It was empowering for their supporters.  After the JetGate scandal, the OBA simply held a meeting of party officials to pick the leader.  I believe this was a mistake because the OBA took the power out of the hands of their supporters and held it themselves.  The supporters had no say.

The OBA is now returning to the membership to pick their leader as part of their constitution but the question arises of what does their membership look like?  Do they have much of a following anymore?  Will many people turn out?  Is there any enthusiasm for the OBA at this point?  Personally I suspect support and enthusiasm is rather low and they would struggle to attract supporters and candidates at the moment.

I wrote some feedback in response to Mr. Deacon’s post on the link he shared on facebook at the time.

The only way for the OBA to be viable is to wholly dedicate themselves to fulfilling the pledges of their 2012 platform to become a party of the people. Yes, that means putting the leadership contest out to whatever membership they have left and having the people choose, regardless of the outcome. The party itself needs to be directed and driven by the people, not by a small cadre of back room wheelers and dealers.

However, I think the OBA has already tried this, failed and demonstrated that they can’t change. Few trust them to be different and as such they will struggle to attract any newcomers.

The difference in the past for any attempts at a new party was that there was always a fear of splitting the vote that led to a bias to support the OBA. I think now people are convinced enough that the OBA would lose that many would shift to support a new party.

If the OBA is going to regain any sort of relevance, it needs to put as much power in the hands of the people as possible.  I had thought that they may have a leadership challenge open to any member however after clarification from the @1BdaAlliance twitter account, it turns out their constitution limits it to MPs. That unfortunate as it might have attracted some new faces or the possibility of a senator standing for leadership.  Something different from the same faces that are tied to the UBP legacy and the OBA’s rough start.  It looks unlikely with this requirement.

Ultimately though, I don’t think it terribly matters so much who the leader is at this point.  The entire party needs to be focused on a servant leadership approach that focuses on empowering the people rather than an ivory tower one.  Unfortunately I really don’t see that as a realistic direction for the OBA because it just doesn’t seem to match their nature.  I haven’t seen an indication from any of the OBA MPs that there is someone among them that can lead that sort of a change within the party.  Perhaps they will prove me wrong and rejuvenate themselves.  Time will tell.

Comments

comments