Victor Wong

"Learn from yesterday, live for today, hope for tomorrow."

Fri, 25 May 2012 14:57:44 -0700

“Learn from yesterday, live for today, hope for tomorrow.”

- Albert Einstein

The Reason Online Ad Prices Are Free Falling

Thu, 24 May 2012 05:55:00 -0700

The Reason Online Ad Prices Are Free Falling:

AdAge published a piece I contributed to it recently which explains the economics of the online ad industry.

Ads work (even on me)

Mon, 21 May 2012 17:15:19 -0700

Peter Thiel has been lecturing about startups at Stanford and in a recent class, he talked about the importance of distribution to any business succeeding. How you reach your customers is incredibly important because simply having the best product doesn’t always mean you win the customer. The customer needs to hear about you and trust you. Thiel touched on a point that I’ve always found curious:

Consider advertising for a moment. About 610,000 people work in the U.S. ad industry. It’s a $95bn market. Advertising matters because it works. There are competing products on the market. You have preferences about many of them. Those preferences are probably shaped by advertising. If you deny this it’s because you already know the “right” answer: your preferences are authentic, and ads don’t work on you. Advertising only works on other people. But exactly how that’s true for everybody in the world is a strange question indeed. And there’s a self-referential problem too, since the ad industry has had to—and did—convince the people who buy ads that advertising actually works.

Working in the online advertising industry, I often get told by friends and family that ads don’t work on them since they don’t click on the ads. I’ve found it interesting because recently the same people have been mentioning how they see PaperG’s online ads everywhere now that we’ve started running them.

Ads work by increasing my awareness of an offering and influencing how I feel about it. The more I see or hear of something, the more I trust it and the more likely I’ll use it. Ads succeed simply when they are seen.

I’ll be the first admit that ads work on me, and I suspect I’m actually in the vast majority whether the others realize it or not.

"When you want something, all the universe conspires in helping you to achieve it."

Sun, 20 May 2012 19:08:52 -0700

“When you want something, all the universe conspires in helping you to achieve it.”

- Paulo Coelho

The $144,146,165 Button

Tue, 15 May 2012 06:51:13 -0700

The $144,146,165 Button:

I always wondered how much to tip a cab driver and also how much extra money those default options in cabs were generating as a result of consumer ignorance of social norms. Now I know… it’s a lot of money. Talk about the power of default (and behavioral economics)

Wonder and Beauty in Everything

Mon, 14 May 2012 17:02:30 -0700

Recently, I’ve been spending a lot of time with science and humanities focused friends (as opposed to my economics and tech friends). The weighty subjects of life, the mind, the purpose of them, and the wonderment of them have come up repeatedly for whatever reason.

The conversations reminded me of a fascinating psychology book, Soul Dust, and the Wall Street Journal article summarizing the book’s findings:

What is the point of being conscious? Mr. Humphrey made his name many years ago with a famous essay on the evolutionary function of intelligence, arguing that it emerged through natural selection not to solve physical puzzles, as many assume, but to solve social ones—to read minds. Here he attempts a similar explanation for why the impartial spectator of consciousness is watching a magical mystery show. His answer sounds startlingly unscientific, even spiritual: to impress the soul.

What he means is that being enchanted by the magic of experience provides a reason to live. Rather than being an aid to survival, consciousness provides an essential incentive to survive. Enchantment is itself “the biological advantage of being awestruck.” Or, as the poet and Pooh creator A.A. Milne put it, “It’s awful fun to be born at all.”

I am not fully persuaded by this last part of the argument—I prefer to think that the evolutionary advantage of consciousness has to do with the benefits of imagining and influencing future events—but it’s exhilarating to see this crucial question about our existence answered with such intellectual breadth. Scientists are often accused these days of overlooking the awe and wonder of the world, so it’s exciting when a philosopher puts that magic at the very heart of a scientific hypothesis.

It’s fascinating to wonder, “why do I think?” It’s even more amazing to finally have a decent answer.

"The visionary lies to himself, the liar only to others."

Fri, 04 May 2012 07:28:32 -0700

“The visionary lies to himself, the liar only to others.”

- Friedrich Nietzsche

"I have a healthy disregard for the impossible."

Sun, 29 Apr 2012 14:27:46 -0700

“I have a healthy disregard for the impossible.”

- Larry Page

Let's Save Business From the Businessmen

Wed, 25 Apr 2012 14:53:49 -0700

Let's Save Business From the Businessmen:

When wide-eyed recent college graduates, disillusioned with the corporate world, lament the ugliness of modern capitalism, they overlook the fact that with all its imperfections, capitalism remains the best way to organize an economy. It has helped lift tens of millions out of extreme poverty in China and many other previously centrally planned economies. On a microeconomic scale, businesses have imperfections as well, but they remain one of the best ways to organize people to solve problems.

Forbes published my op-ed, titled “Let’s Save Business from the Businessmen” (originally titled “A Founder’s Defense of Business”). I wrote this piece after having a late night conversation with a friend who challenged me on why I work at a for-profit venture but talk a lot about social impact. Through a lot of conversations, I realized that the two weren’t mutually exclusive and in fact could be well aligned. My conclusion is that business isn’t inherently bad, but they can become bad when they focus only on profit and forget why they exist — to solve problems.

PaperG attempts to solve the problem with access to information, specifically local news and places information. By creating a sustainable business model through advertising for local media, we enable communities to know what’s going on in their neighborhood. At the same time, we deliver new customers to local advertisers which helps create more jobs and support the broader economy.

We’ve had numerous discussions internally and with partners about pricing and what to include in ad packages being sold to local businesses. I’m proud to say that we’ve always sought to ensure that advertisers are getting their money’s worth and not overpaying. If we can’t help them actually build their small business through effective online advertising, we won’t have a business in the long run. PaperG can’t make short-term profits without sacrificing long-term value, and so we won’t.

I hope all businesses will realize what sort of positive impact they can have by concentrating on problem-solving. Businesses need focus on the problem first, the profits second.

The Cost of Pricing Everything

Sun, 22 Apr 2012 16:36:16 -0700

Can optimizing everything for maximum utility leave us in a sub-optimal situation? That’s the question posed this week in a very interesting book review of What Money Can’t Buy. The author surveys how market morality (the idea that markets always lead to optimal outcomes) permeates our everyday life now and challenges traditional social norms. He concludes rather provocatively, but thoughtfully:

Proponents of market morality claim that it imposes no belief system, but that’s just a smoke screen. Choosing to place utility maximization at the core of your belief system is no different from choosing any other guiding ideological precept. Every problem has an incentive-based solution; every tension can be resolved by seeking the maximally efficient outcome.

This is a depressingly reductive view of the human experience. Men will die for God or country, kinship or land. No one ever picked up a rifle and got shot for optimal social utility. Economists cannot account for this basic fact of humanity. Yet they have assumed a role in society that for the past 4,000 years has been held by philosophers and theologians. They have made our lives freer and more efficient. And we are the poorer for it.

Thinking about some of the examples of markets taking over social norms, I do feel indignant, even as an market-loving economist. When did we go from naming buildings and monuments after people who have built a legacy to naming them after people who made a lot?

In a rare case of an anachronism being something I am proud of, Yale refuses to name its new residential colleges after rich donors and instead only after alumni who have done something worthy of recognition. I think such a policy brings the best out of the community and gives people something to aspire towards — an externality unaccounted for by the market.

I really do feel that markets not only allocate goods and resources but they also express and promote attitudes towards the very goods being exchanged. Once we agree certain goods can be bought and sold, we implicitly label them as commodities and some things should be sacrosanct. People can’t sell their votes, organs, or freedom. Enabling the sale of them would effectively destroy the value they represent.

Markets, at the worst, could destroy a lot of things but at the very least, fail to capture or account for everything. Markets can make people do the right things some times but they cannot make the right motivations — in fact, oftentimes, they undermine the right motivations.

That said, people do a lot of good things without incentives everyday, though the number of things may diminish as markets permeate more and more of daily life. In my experience, there are still good people who don’t check first if the moral high ground isn’t on top of a pile of gold. When you find those people, you have to place a high value on your relationship because they are increasingly rare in today’s world, but don’t ever make the mistake of thinking you can put a price on them — or else you may have diminished the most valuable thing in the world.

"Find the leverage in the world so you can be truly lazy"

Sun, 15 Apr 2012 22:10:00 -0700

“Find the leverage in the world so you can be truly lazy”

- Larry Page

Economic Theory Plots a Course for Good Food

Tue, 10 Apr 2012 23:02:35 -0700

Economic Theory Plots a Course for Good Food:

“At Starbucks, the price of coffee isn’t so expensive. But the profit margin changes when you order any special blended milk and sugar concoction. And speaking of beverage prices, if you must order a Coke with your meal, it tends to be cheapest at Chinese restaurants.”

The Beatles As a Business Model

Sun, 08 Apr 2012 16:52:54 -0700

Steve Jobs was a huge fan of The Beatles and even once said:

My model for business is The Beatles: They were four guys that kept each other’s negative tendencies in check; they balanced each other. And the total was greater than the sum of the parts. Great things in business are never done by one person, they are done by a team of people.

This comparison really rings true to me for the best of founding teams. You have a group of talented people who each can do several things well and likely one thing amazingly well. They also will have deficiencies which hopefully get covered by others’ strengths.

Inevitably, people want to go off and do their own thing even after accomplishing some amazing things together. The Beatles eventually disbanded as each of the highly talented individuals wanted to be more central and have their own successful careers as individuals (though that didn’t stop them from the occasional collaborations). Companies are not that different than bands it would seem: only Mark Zuckerberg is left at Facebook and Jack Dorsey at Twitter, while their co-founders and early employees have occasionally gotten back together to work on things.

The dissolution of The Beatles certainly doesn’t diminish what they had accomplished which was unrivaled. I entirely agree with Jobs that The The Beatles completely overshadow The Rolling Stones. That said, I do wonder sometimes if the better model for business and founders would be The Rolling Stones. Those guys managed to stay together all these years while producing some great work. They did occassionally have to replace people, but they’re still rocking it.

Isn’t that what it’s all about? Making something for the world to enjoy with the right balance of people you enjoy working with.

"You can’t build a reputation on what you are going to do."

Sat, 07 Apr 2012 13:00:43 -0700

“You can’t build a reputation on what you are going to do.”

- Henry Ford

Size Matters, But Not For Long

Sun, 01 Apr 2012 16:55:05 -0700

On my recent trip to Shanghai, I was amazed by the sheer scale of construction and building going on there. In the Pudong district, you can see two of the world’s largest towers standing next to each other. What’s incredible is how short lived their reigns as China’s tallest tower (and among the world’s tallest 10) last despite their incredible sizes.

9 years separated the incredible 88 floor tall Jin Mao tower from the 101 floor Shanghai World Financial Center. Just 6 years after the new leader was built, the Shanghai Tower will take the top spot. Not only are the towers getting taller but they are doing so faster!

This got me thinking about the digital landscape. Social networks and online properties keep growing bigger and bigger. Even entrepreneurs like Mark Pincus describe wanting to build “skyscraper websites.” Every year there is a new big thing that threatens to outgrow the last thing. Every year there is a new “fastest growing thing” (Pinterest is this year’s). The world is heading to larger and larger scale at a faster and faster pace.

The sheer sizes of all the physical and digital properties are certainly impressive but I have started to wonder if they really matter ultimately. Will any of these things matter in their own right when they are no longer no. 1 in size?

View from the new no.1 tallest tower in China, looking down at the no.2 tallest tower.

"If you’re not getting rejected on a daily basis, your goals aren’t ambitious enough."

Fri, 30 Mar 2012 09:39:00 -0700

“If you’re not getting rejected on a daily basis, your goals aren’t ambitious enough.”

- Chris Dixon

Directional Media Is Moving

Fri, 30 Mar 2012 07:00:05 -0700

Directional Media Is Moving:

My guest article on MediaPost about the yellow page industry shift towards local display advertising from just local search.

International Perspective

Sun, 11 Mar 2012 17:54:45 -0700

Traveling from the US to another country always gives me some new perspective.

The other day I was flying from San Francisco to Shanghai, and I was surprised to find there were no individual televisions on the plane — a rarity on most of my domestic flights now and even more rare on international flights I’ve taken. After my momentary shock, I remembered the Louis CK bit “Everything is amazing and no one is happy” and I became grateful for the fact I was about to travel half way around the world in less than 12 hours, a feat previously unthinkable a half century ago.

There’s so much I take for granted in the US — access to social media, clean air, personal space, and much more, which I quickly think about once I don’t have them.

In spite of some of the personal inconveniences of foreign travels, I am always impressed by what goes on in other countries. Looking out on the skyline of Shanghai, I can’t help but feel in awe of its rapid development and modernity.

The sheer size of cities puts things in perspective: Shanghai has 23,000,000 people while San Francisco has 800,000. It’s so easy to think Silicon Valley is the center of the world and the epicenter of world’s largest tech market but the truth is international markets dwarf us in size.

There’s so much to learn from how others are doing things. One easy example is a bus spot I spotted in London:

It makes so much more sense to have the glass protecting people waiting for buses rather than simply shielding them from the rest of the sidewalk. I feel like much of the day-to-day human experience is universal so the rest of the world is grappling with the many similar problems as those of us have in the US. There’s likely many innovative solutions out there waiting to be found and shared — that’s why I love traveling internationally so much.

Access to Capital

Sun, 04 Mar 2012 17:00:06 -0800

In college, I joined a non-profit, Elmseed Enterprise Fund, a microfinance institute that lent $1,000-$3,000 to low-income entrepreneurs who didn’t have access to traditional credit. I thought it was a really interesting organization which had a mission I could get behind, having started my own little enterprises in high school with seed capital provided by my parents. From my time running Elmseed, I really saw how a little capital can change people’s lives — access to capital is such a critical problem in the world.

We funded an entrepreneur to start a hot dog cart who went on to spawn many more food carts around town. We funded a contractor who started to get big jobs from the university. In all these cases, we were able to make a significant individual impact, if not community impact, through capital.

Money has a multiplicative effect. When one individual can start a business (e.g. coffee cart), that person now has business needs (e.g. coffee beans from the local roaster). $1 can generate more than $1 of wealth in a community.

One year, I came up with an idea to get more capital in the world of microfinance. We would go to big corporations and ask they temporarily donated money to a new fund which would buy up existing loans made by microfinance institutions to free up capital for those microfinance institutes to lend out again. The big idea was that we would only use that capital for 3 or 6 months before sending the money on to a charity that corporation already supported. So now Goldman Sachs could say it not only gave $1,000,000 to women’s education but it could say it gave $1,000,000 to microfinance and to women’s education (when it really was the same $1,000,000). Some of co-founders of the non-profit took the idea and started to get some major banks behind it. Unfortunately, I had to lessen my involvement over time as PaperG took off.

Recently, I’ve dipped my toe back into this world. I’m volunteering my fundraising and marketing knowledge to help out Acumen Fund, a wonderful funding model for social enterprises. It has pioneered the concept of “patient capital” — which is a financial investment with no expectation of turning a quick profit and focuses on maximum social impact over financial. It is funding some amazing social enterprises around the world and really investing in building a network of people trying to change the world. Expect to hear more about it from me in the months to come.

"And don’t worry about losing. If it is right, it happens — The main thing is not to..."

Sat, 03 Mar 2012 14:08:54 -0800

“And don’t worry about losing. If it is right, it happens — The main thing is not to hurry. Nothing good gets away.”

- John Steinbeck on Falling in Love: A 1958 Letter