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I depart on a new adventure for Vietnam, the land where i hear 60% are below 24 years old which means I should be considered a middle-aged expat when I arrive. Lets hope the kids in Ho Chi Minh City will be kind to the elderly.

If all things work out, I will be helping a friend in a venture cap firm that is working on a new fund for digital media investments. It will be interesting to cross the fence and look through the lens from different perspectives on how startups are funded within the trenches of the VCs. I will be entering this short stint with no high expectations but only to get some good exposure of the Vietnamese startup scene plus some cheap beer in an exotic land 2 hours away from Singapore.

Having never been to Vietnam, I have miraculously worked closely with quite a number of Vietnamese in my course of work in the SF Bay Area. I also hear much of Vietnam’s investment potential and booming economy but this being an Easter Friday holiday, I shouldn’t bore with your dry economics… WHO also seems to be giving Vietnam pressure for their bird flu cases which brings me to thank concerned friends and family who had prepared me with their doomsday prophecies..  Of course, Russell Peters also provide more comedic views of the place which had really psyched me about visiting this place some time back, such as how motorbikes are used as vans there..

Boy, I can’t wait..

Knowledge@Wharton, in an October 4th article, talks about the irrational exuberance in valuations of social networking sites like MySpace and Facebook. They compared it to the more stable business models of search engine companies like Google and Yahoo; ecommerce sites like Amazon and eBay. One example of such exuberance is the $900M offer for Facebook in 4th Quarter 2006.

“Last January, Facebook founder Mark Zuckerberg, now 22, reportedly turned down a $750 million offer from Viacom, holding out for $2 billion, according to news accounts. This fall he is said to be mulling over a $900 million offer from Yahoo. Those are big numbers considering that the business, started early in 2004, has a modest nine million users and is believed to have annual revenue of around $50 million, though some experts expect that to double soon. If Facebook were valued at 55 times earnings, it would need a $16 million profit to justify a $900 million price.“

I particularly like this point on the different types of advertising pricing models that makes argument for valuations based on the oft-quoted metrics of unique visitors and page views, irrelevant.

The problem, as Wharton accounting professor Robert W. Holthausen sees it, is a dearth of information to plug into the standard valuation models. “You have little data on what kind of revenues they can generate and what their cost structure is.”

Valuing advertising-driven sites is particularly hard because the same numbers — such as the number of users or page views — can mean different things depending on how the advertisers are billed, Holthausen adds. “How often do they get paid for that advertising? Is it just when the advertisement appears? Or does there have to be a click through?” Similarly, not every user has the same value. That depends on how much the typical user is likely to spend and what he or she is likely to buy. Finally, Holthausen notes, a site will be more valuable if it uses a proprietary technology than if it simply offers services competitors can easily duplicate.

The full article can be read here.

People - I want the entrepeneur to be someone I'd enjoy working with, intelligent, honest and hardworking.

Products - the product (or service) should have a large market.

Plans - The entrepreneur should have the ability to make and execute plans

Profits - this should all lead to obscene profits.

Passion - the entrepreneur must exhibit real passion for the idea, since he or shee will be giving up some of their personal life to make it happen, and needs to believe strongly in what they're doing.

Persistence - the ability to stay with it through all the many setbacks that happen during the long time it may take from idea to profitable execution.

From Howard Morgan's post, a VC from First Round Capital. The first 4Ps were in concurrence with John Doerr's opinions. Howard came up with the rest later on.
So where do i see myself on this 6P metric? I shall not reveal the actual score but lets just say I will stick to bootstrapping for now. =)

Continue reading: The Dark Side of Entrepreneurs