October | 2017 | Dezheng Kong's Blog

One of my biggest goals after graduating from Sauder is to eventually start my own business. In the first class of Comm 101 I was introduced to Nolan Watson, a fellow Sauder alumnus and the CEO of Sandstorm Gold. Throughout Comm 101 classes, I was exposed constantly to many names of successful graduated Sauder entrepreneurs. The big question is, whether to start my business after graduating, working, or better yet, next year? Timing must be impeccable in today’s fast-paced, competitive business world. In the entrepreneurship class in Comm 101 the i-clicker survey showed most people finding themselves wanting to work for a big company after graduation. In a perfect world, it is nice to have to work for a company to gain some experience then to start my own business. Nolan Watson is an epitome of this scenario, working with Deloitte and Silver Wheaton before starting Sandstorm Gold. However, time and tides tarry for no one, and business opportunities doesn’t either. On October 27, Toronto Stock Exchange (TSX) hit an all-time high of 15953.51 points. My classmate Jason Quan wrote his blog about in the south of the border, Utah transformed into a hub for young entrepreneurs to start-up their tech businesses. I wondered if such opportunities exist in Vancouver. Just last week, Hootsuite, a company based on Vancouver, founded a new charity firm for young entrepreneurs. The wind of change for youth entrepreneurship is blowing in Canada. In 2016, 15.4% of start-up firms in developing countries were owned by young adults aged 18-24. However, in the developed countries such as Canada, the number falls to about 7%. Canadian youth start-up programs now exist to close that gap. The biggest risk for starting a business from scratch is financial instability and an infeasible business model. Previously, lack of credit history and harder to secure a loan is a big problem for youths in developed countries. Nowadays, programs such as Futurpreneur and Youth Social Innovation provides loans to young entrepreneurs and even mentorship to secure the success of the business model. Looking at other sources of financing, many sources exist in BC such as crowdfunding and private offerings. The proliferation of e-commerce also offers other sources online such as Kickstarter and Indiegogo can also help young entrepreneurs excel their business without giving up shares. While the top companies do dominate the market with many advantages, the global hegemony of corporations is never set. In 2004-2007 Apple spent 9 times less than Nokia in R&D yet still won the smartphone battle. The status quo is a rare time of history where the risk is less than the reward for entrepreneurship, it is best to take a leap of faith and start now.

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https://blogs.ubc.ca/jasonquan/

http://theconversation.com/forget-the-apprentice-where-are-all-the-young-entrepreneurs-86190

https://betakit.com/hootsuites-ryan-holmes-launches-charity-supporting-young-entrepreneurs/

http://www.youthsocialinnovation.org/for-si/apply-now/

https://www.bcsc.bc.ca/For_Companies/Private_Placements/Crowdfunding/

https://www.bcsc.bc.ca/For_Companies/Private_Placements/Private_and_early_stage_businesses/#Offering

https://www.thestar.com/business/2017/10/27/energy-sector-helps-toronto-stock-market-hit-new-high.html

https://blogs.wsj.com/tech-europe/2012/05/14/nokia-outspent-apple-nine-times-on-rd/

https://qz.com/682517/after-analyzing-200-founders-postmortems-researchers-say-these-are-the-reasons-startups-fail/

http://www.futurpreneur.ca/en/get-started/financing-and-mentoring/

https://www.kickstarter.com/

https://www.indiegogo.com/en

http://video.foxbusiness.com/v/1795556551001/?#sp=show-clips

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https://www.rationalwine.com/wp-content/uploads/2015/09/Leap-Of-Faith.jpg

I recently just got my driver’s license and two options lie in front of me: an electric car, or a traditional gasoline-powered car. In the status quo, I would pick the gasoline-powered car in a heartbeat.

Electric cars are separated into two categories: plug-in hybrids, which are powered by gas and electric, and purely electric cars (EV). It is not advisable to buy a hybrid, because the leading indicator is that countries around the world are implementing policies that support the sales of EV cars. China and India are implementing the policy to support the sale of EV cars in 2030. European countries follow with similar laws and regulations. With these regulations, companies would be more likely to support EV cars. Furthermore, a hybrid car is also 20% more expensive than its counterparts that run on gasoline. A hybrid is the worst option based on price and future policies.

The value proposition of EV car companies, is differentiation, and they advocate for green cities and is priced higher than plug in and gasoline. Tesla motors currently dominates the EV market with 62.52% market share. Differentiation advantage will soon evaporate with more companies developing EVs. As discussed in Comm 101 tutorials, companies like Mercedes Benz are coming in and taking market share. Mercedes aim to have all its cars EV by 2022 and many other companies are following. When supply shifts to the right the price comes down. With the competition, there will be better models in the future, with a higher quality at a lower price. For gasoline-powered cars, with less suppliers in the future the supply will shift left being more and more expensive in the future. The owner of tesla even owns two gasoline cars, and calls one his “first love”. The mass quantity of gasoline-powered cars are here to stay.

When I am buying a car, I’m not looking just for the automobile, but the good service that is provided as well. In the status quo, the lagging indicators of these electric-car companies are in jeopardy. Faraday Futures, an electric car powerhouse, is mounted in debt, while the asset of its billionaire Chinese financier frozen by the government. Tesla Motors just fired hundreds of people in October based on performance management. The production of its new Model 3 is currently only at 260 units, far less than expected 1500 units projected. When these companies are having trouble now, it is difficult to see how they will maintain a good customer service while also keeping high profit margins when different car companies invade the market.

Within the next five years, gasoline-powered cars are the best option. I will consider EVs when they dominate the market with cheap prices and stable customer service.

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