LEADERSHIP. LEARNING.

TECHNOLOGY BUSINESS
THE WEEK OF JULY 29, 2013
Minimum
wage in focus
Is there a case for
paying workers more,
or is a race to the
bottom good?
Intellect
Motion
Local start-up sees
gaming and medical
applications in motion-
control devices
Tesla
speeds up
Billionaire Elon Musk
is more Henry Ford
than Tony Stark in
manufacturing Model S
Bollywood
on the go
Want to watch Shahrukh Khan and
Deepika Padukone in the 2007 hit
Om Shanti Om on your tablet? Now
you can with Tappp, an over-the-top
entertainment delivery platform for
mobile devices.
Real riches are the riches
possessed inside
B C Forbes
Om Shanti Om movie poster
MW2 THEEDGE SINGAPORE | JULY 29, 2013
comment | BY JUSTIN FOX |
corporatemoves
Berger Intl Ltd
Jaideep Nandi has been appointed ED wef
July 18
Work experience: CEO, Berger Paints (Singapore) Pte
Ltd; director, Berger Paints (Singapore) Pte Ltd
BNP Paribas
Gunner Hoest has been appointed head, com-
modity derivatives, Asia-Pacific wef July
Work experience: Over 15 years in capital mar-
kets; head, Asian commodity derivatives,
Credit Suisse
Darco Water Technologies Ltd
Ang Kheng Hui has been appointed independent
director/audit committee member wef July 17
Work experience: Director, Greater China Invest-
ment Holdings Pte Ltd; director, Springboard Con-
sulting Group Pte Ltd
Keppel Corp Ltd
Loh Chin Hua has been appointed CEO wef
Jan 1, 2014
Work experience: CFO, Keppel Corp Ltd;
chairman, Alpha Investment Partners Ltd
Chow Yew Yuen has been appointed CEO, Keppel
Offshore & Marine Ltd wef Feb 1, 2014
Work experience: COO, Keppel Offshore & Marine
Ltd; MD, Keppel Offshore & Marine USA Inc
KPMG
Tham Sai Choy has been appointed chairman,
Asia-Pacific wef Oct 1
Work experience: Partner, KPMG Singapore; 30 years
of audit and financial advisory experience
Nordic Group Ltd
Fong Kwan Meng has been appointed CEO wef
Aug 1
Work experience: Acting CEO, Multiheight Scaf-
folding Pte Ltd; deputy CEO, Multiheight Scaf-
folding Pte Ltd
SAP
Andrew Pitcher has been appointed senior VP/
GM, financial services, Asia-Pacific and Japan
with immediate effect
Work experience: Retail and commercial bank-
er, National Australia Bank; 21 years in finan-
cial services
See Hup Seng Ltd
Thomas Lim Siok Kwee has been appointed
executive chairman wef July 22
Work experience: Director, See Hup Seng Ltd;
director, SHS Special Coating Pte Ltd
Ng Keng Sing has been appointed ED wef
July 22
Work experience: Director, Unicom Energy
Intl Pte Ltd
Suntar Eco-City Ltd
He Kaijun has been appointed independent
director/audit committee member wef July 19
Work experience: Chairman, Xiamen Optoelec-
tronic Technology Centre; chairman, Xiamen
LED Trade Promotion Centre Compiled by
Rahayu Mohamad
Companies are invited to submit notices of senior
corporate appointments and changes. Photographs
(in jpeg format) are welcome. Announcements will be
edited for brevity. Email rahayu.mohamad@bizedge.com;
attention: editorial coordinator, Rahayu Mohamad.
EDITORIAL
EDITOR | Ben Paul
SECTION EDITOR | Ben Paul
COPY-EDITING DESK | Elaine Lim,
Evelyn Tung, James Chong,
Chew Ru Ju, Tan Gim Ean
PHOTO EDITOR | Samuel Isaac Chua
PHOTOJOURNALIST | Bryan Tay
EDITORIAL COORDINATOR |
Rahayu Mohamad
DESIGN DESK | Tan Siew Ching,
Christine Ong, Monica Lim,
Nik Edra, Mohd Yusry, Ariff Hussin
ADVERTISING+MARKETING
HEAD | Edward Stanislaus
GROUP SALES MANAGER | Cecilia Kay
SENIOR MANAGERS | Adrian Kwek,
Windy Tan
MANAGERS | Charis Liang
INTEGRATED MARKETING - MANAGER |
Jeffrey Wong
COORDINATOR |
Nor Aisah Bte Asmain

CIRCULATION
MARKETING
SENIOR MANAGER | Colin Tan
EXECUTIVE | Judy Wang
OPERATIONS
ASSISTANT MANAGER |
Cesar Banzuela De Jesus, Jr
EXECUTIVES |
Gerald Aw, Joey Ang
CORPORATE
MANAGING DIRECTOR |
Edward Stanislaus
CORPORATE AFFAIRS DIRECTOR |
Ng Say Guan
PUBLISHER
The Edge Publishing Pte Ltd
150 Cecil Street, #13-00
Singapore 069543
TEL | (65) 6232 8622
FAX | (65) 6232 8620
PRINTER
KHL Printing Co Pte Ltd
57 Loyang Drive
Singapore 508968
TEL | (65) 6543 2222
FAX | (65) 6545 3333
We welcome your
comments and criticism:
feedbackspore@bizedge.com
Pseudonyms are allowed but
please state your full name,
address and contact number for
us to verify.
Strengthen your confidence
Condence isnt something you either have
or you dont. Its a dynamic emotion that,
like a physical muscle, needs exercise to
grow stronger. Here are two ways to build
and maintain it:
Take inventory of your past. Its easy
to doubt yourself and your abilities. But
if you look at your track record, chances
are that your successes outweigh your
failures. And, more importantly, you
likely survived your missteps and
gleaned lessons along the way.
Focus on strengths. Most leaders
are very strong in a few competencies,
average in the majority and weak in a
few. Concentrate on leveraging what
youre best at. Then, manage your
average and weak areas so they dont
detract from your effectiveness.
This weeks tip is adapted from To Strength-
en Your Condence, Look to Your Past by
Amy Jen Su and Muriel Maignan Wilkins
Management tip
OF THE WEEK
E
LEADERSHIP. LEARNING. TECHNOLOGY BUSINESS
THE WEEK OF JULY 29, 2013
Minimum
wage in focus
Is there a case for
paying workers more,
or is a race to the
bottom good?
Intellect
Motion
Local start-up sees
gaming and medical
applications in motion-
control devices
Tesla
speeds up
Billionaire Elon Musk
is more Henry Ford
than Tony Stark in
manufacturing Model S
Bollywood
on the go
Want to watch Shahrukh Khan and
Deepika Padukone in the 2007 hit
OmShanti Omon your tablet? Now
you can with Tappp, an over-the-top
entertainment delivery platformfor
mobile devices.
Real riches are the riches
possessed inside
B C Forbes
Om Shanti Om movie poster
M
cDonalds and Walmart,
the two biggest private-
sector employers in the
US, dont pay their work-
ers much. This more or
less eternal truth is making one of its
increasingly frequent appearances in
the news recently. McDonalds is catch-
ing flak for a sample monthly budg-
et for employees that sets aside US$20
($25.26) a month for health insurance
and no money at all for heat. Walmart,
meanwhile, is threatening to cut back
on plans to open stores in Washing-
ton, DC, after the DC council voted to
impose a super minimum wage of
US$12.50 an hour on big retailers.
For decades, most discussions of
pay levels and income disparity in the
US have been accompanied by a pro-
nounced economic fatalism. Pay is set
by the market and the labour market
has gone global, the reasoning goes
and when a Chinese or Mexican worker
can do what an American can for less,
wages have to go down. In explaining
whats happened to autoworkers, say,
that story makes some sense. But Mc-
Donalds burger-flippers and Walmart
checkout clerks cant be replaced by
overseas workers. Instead, both com-
panies were able to build low pay into
their business models from the begin-
ning McDonalds because so much
of its workforce was made up of liv-
ing-at-home teenagers who did not in
fact have to pay for heat, and Walmart
because of its roots in small Southern
towns where wages were low and liv-
ing wage laws unheard of.
Now, McDonalds is increasingly
staffed by grown-ups (teens have gone
from 45% of its workforce in the 1990s
to 33% recently), while Walmart is
trying to conquer the big cities of the
North. Both companies have been un-
derstandably loath to depart from their
low-pay traditions, so conflict and crit-
icism are pretty much inevitable. Its
becoming clear that pay levels arent
entirely set by the market. They are
also affected by custom, by the bal-
ance of power between workers and
employers, and by government regula-
tion. Early economists understood that
wage setting was fundamentally a so-
cial decision, Jonathan Schlefer wrote
on hbr.org last year, but their 20th-cen-
tury successors became fixated on the
idea of a natural law that kept pay
The case for paying people more
in line with productivity.
Since 1980, though, overall pay
and productivity trends have sharp-
ly diverged in the US. And since the
1990s, research on the impact of mini-
mum wage laws has demonstrated that
there clearly is some distance between
the textbook versions of how wages
are set and how it happens in reali-
ty. Its not that minimum wage laws
work miracles, but they also dont
have nearly the downward effect on
employment levels that a pure supply-
demand model would predict. Not to
mention that decades of research at
the organisational and individual lev-
els have shown the link between pay
and on-the-job performance to be ex-
tremely tenuous.
If pay levels at Walmart, McDonalds
and elsewhere are at least to some ex-
tent a societal choice rather than the
natural outcome of economic law, it
raises a lot of interesting questions.
One is whether the doldrums the US
economy has found itself in since the
early 2000s might, at least to some ex-
tent, have been inflicted by corporate
executives committed to keeping la-
bour costs down. In 1914, Henry Ford
famously more than doubled wages at
his factories, mainly to fight attrition
but also so that Fords assembly line
workers could afford to buy the cars
they were making. By that standard,
McDonalds and Walmart are doing
okay their workers can afford to
buy their products. But Fords work-
ers could buy a lot of other things,
too, and they and their counterparts
at other automakers went on to form
the bulwark of a giant new American
middle class that helped drive eco-
nomic growth for decades.
Economic analysis of Fords de-
cision has focused on the efficiency
gains of paying higher-than-market
wages less turnover and more-pro-
ductive workers led to higher profits
and higher market share, the reason-
ing goes. That in itself is a big deal.
But the even bigger argument that by
raising wages Ford might have led a
shift in societal norms that put more
money in average Americans pock-
ets, thus boosting consumer spend-
ing and economic growth, hasnt had
much appeal to mainstream econo-
mists in the US.
In fact, most of the interest has in-
stead been in how hyper-efficient op-
erations like McDonalds and Walmart
boost living standards by delivering their
products to consumers at ever-lower
costs. A few years ago, Jason Furman
recently tapped to become chairman
of President Obamas Council of Eco-
nomic Advisers, argued that Walmart
was a progressive success story be-
cause it had driven retail prices down
so much. Even if you grant that Wal-
Mart hurts workers in the retail sector
and the evidence for this is far from
clear, Furman wrote, the magnitude
of any potential harm is small in com-
parison. Its a provocative argument,
and it might even be right. But its un-
likely that its the whole story. For all
its productivity innovations, Walmart
has also been a key player in a race
to the bottom that has tamped down
wages and dismantled worker protec-
tions in the US in recent decades. Its
at least worth asking if the economy
would be better off with a race in the
opposite direction.
The most outspoken and visible
proponent of this view over the past
couple of years has been Business
Insider editor-in-chief Henry Blodget,
who says corporate Americas penchant
for putting short-term shareholder in-
terests above those of workers is ac-
tually starving the rest of the econo-
my of revenue growth. Can Blodget
prove this? No. Is it a valid topic for
economic research and political de-
bate that ought to be getting more at-
tention? You betcha. hbr.org
Justin Fox is editorial director of the
Harvard Business Review Group and
author of The Myth of the Ration-
al Market
E
THEEDGE SINGAPORE | JULY 29, 2013 MW3
DIGITAL ONLY
P
R
IS
O
N
E
R
O
F
A
R
T
IC
L
E
1
1
2
T
h
e
u
n
lik
e
ly
fa
te
o
f S
o
m
yo
t P
ru
e
k
sa
k
a
se
m
su
k
www.theedgereview.com
The regions rst digital-only current
affairs magazine is available on
your desktop, smartphone and
tablet. Get your weekly brieng
rst thing every Friday morning.
Y
o
u
r

w
i
n
d
o
w

t
o

S
o
u
t
h
e
a
s
t

A
s
i
a
Desktop
Reader
OUTRAGE
OVER FPI
LEADERS
OUTBURST
Disrespectful
behaviour shows
vigilante groups
true colours, say
Muslim clerics
INDONESIAS
LEGAL QUICKSAND
WHAT ABES
RESURGENT
JAPAN MEANS
FOR ASEAN
US STILL MORE
POPULAR
THAN CHINA
But many see China
becoming worlds
leading power
MACHINE
POLITICS
Cambodias
CPP seen to
dominate
election
NO PORNO
FOR PYROS
Malaysias ethnic,
religious tensions
on the rise
MW4 THEEDGE SINGAPORE | JULY 29, 2013
COVERSTORY | BY LOH CHEN-YI |
Bollywood breakthrough
Sandy Agarwal on how Swissclear Globals Tappp platform delivers over-the-top online entertainment the prepaid way
B
ollywood is reaching out to more glo-
bal viewers than ever before. Stars like
Shahrukh Khan and Kareena Kapoor,
and blockbusters like Ek Tha Tiger
are now not only familiar to millions
of Indians from New Delhi to Mumbai, but also
a huge hit with billions of fans in Asia, as well
as on Broadway.
Now, Swissclear Global, a digital servic-
es provider, wants to make these Bollywood
movies available for viewing on your smart-
phone or tablet computer. All you have to do
is buy a real or virtual prepaid card that has
been branded as Tappp.
Tappp is a word play on tapping the pre-
paid marketplace, with the last three letters
being the initials for people, places and pay-
ment. Eventually, Swissclear Global, a local-
ly-incorporated company despite its European
name, plans to extend this card to Hollywood
hits and movies, and drama serials in other
Asian languages.
Sandy Agarwal, founder and CEO of Swiss-
clear Global, is certainly au fait with the cultur-
al affinity for movies and music in his country
of birth, where other forms of entertainment
often lag far behind.
Indians consume more hours of mov-
ies and music than any other ethnic group in
the world. They also produce more movies a
year than any other country in the world,
he observes.
However, the traditional method of distrib-
uting entertainment content through DVDs
and VCDs and selling them in brick and mor-
tar shops is fast losing its appeal.
More and more, I see people are stopping
production of DVDs and VCDs so the average
guy is not going to be able to buy a DVD like
before. But it is available online, says Agar-
wal, referring to the trend whereby many stu-
dios now offer their intellectual property for
consumption via the web.
Having gone online, the next challenge for
them and content suppliers that opt for over-
the-top (OTT) distribution is securing customer
payments, especially in less developed parts of
the world, where credit cards are scarce.
OTT is the industry acronym for the on-
line delivery of audio and video content, with-
out having traditional operators like cable or
TV broadcasting companies involved in the
process.
Payment options
The answer in those cash-based economies is
to go down the prepaid route. Thus the idea
for Tappp was born.
Tappp is designed to provide a fast, reliable
and secure way to pay for these digital serv-
ices. It has a technology payment platform to
record the receipt of cash at more than one mil-
lion retail points across six countries.
Through Tappp, one can either buy a real
card with a PIN or opt to receive a virtual card
with the PIN transmitted via text message to
a phone. The PIN holds the key to a world of
content for customers.
Apart from video-on-demand and music,
customers can also pay for mobile airtime
with more than 200 telcos in over 70 coun-
tries and buy gaming credits for more than
1,000 online games, simply by using cash or
a credit card.
From a content providers perspective,
what I think is truly unique is that with just
one integration, they are able to access the
entire network that sells our prepaid cards,
and cash-paying customers in six countries
and two continents, says Agarwal, referring
to his network of merchants in Singapore,
Malaysia, India, the United Arab Emirates,
Canada and the US.
Agarwal has international experience in
entertainment services content. Born in India,
the affable entrepreneur turned American after
spending years as a high-flying executive with
cable television networks Discovery Channel
and ESPN, where he often played leadership
roles in helping to break into new markets for
TV content in the Asia-Pacific.
His first entrepreneurial venture followed
at a mobile content and advertising firm
called Landmat, which was acquired by mo-
bile phone maker Nokia, in 2007. But after a
few years of corporate life with Nokia, Agar-
wal decided to fulfil his yearning for entre-
preneurship with another venture known as
Swissclear Global in 2011.
As its name suggests, the company was ini-
tially intended as a Swiss-based entity oper-
ating out of Berne, Switzerland. But Agarwal
then changed his mind in favour of Singapore,
for both business and personal reasons, leav-
ing the companys name unchanged.
Tappps entertainment library currently
holds over 4,000 movies, TV shows and music
videos, including more than 50,000 songs, at
prices that start from 50 US cents (63 cents).
The key content partners are Indias Eros Now,
one of the countrys largest providers of on-
line Bollywood movies and Singapore-based
Spuul, a one-stop aggregator of South Asian
entertainment content.
Building the platform
But the plans dont just stop there. Agarwal
has more content rabbits to pull out of his hat,
intimating that he has been busy making his
rounds of the region to get other Asian pro-
viders to sign up.
Soon we will also offer Chinese content, Ko-
rean dramas, Filipino and Indonesian shows,
Agarwal says, also hinting that English lan-
guage movies havent been neglected.
For this, he intends to leverage on his early
days in US networks, where he has built a wide
base of contacts in the West. And perhaps for-
tuitously, some of his ex-colleagues now work
for OTT heavyweights like Netflix and Hulu,
which are transforming the traditional space
for cable and terrestrial TV in some western
markets with Internet-based offerings.
These OTT players may now be barred from
distributing their content in Asia due to licens-
ing restrictions, but should the situation ever
change, Agarwal will be fully primed to help
them penetrate the region.
The issue for them is that its not easy
to go for market after market, he says. And
with their business models relying largely on
credit cards or PayPal, he believes Tappp can
co-exist with these online giants in a mutual-
ly beneficial manner.
When they are here and realise that a lot of
customers dont want to pay with credit cards,
Ill be here to help them enable the cash econ-
omy that will be my job.
Even before the launch of the entertain-
ment offerings, Agarwal and his team have
been hard at work for the last two years, build-
Agarwal aims to build a very large distribution network via which customers can pay for entertainment content using cash
ing
de
ver
yo
ne
ice
car
sit
car
po
pe
As
ica
bra
of
an
pin
tai
to
of
trib
in
ne
wh
vid
no
av
a w
ba
me
tre
is o
com
a l
on
ma
mo
tai
or
a b
dio
wa
for
tha
ins
of
OT
cop
sid
co
B
R
Y
A
N
T
A
Y
/
T
H
E
E
D
G
E
S
IN
G
A
P
O
R
E
THEEDGE SINGAPORE | JULY 29, 2013 MW5
E
or-
ork
lu,
ace
ern
om
ns-
ver
elp
asy
nd
on
an
al-
of
ds,
on-
in-
ave
ld-
ing the platform and getting distribution
deals done.
What we did was simply to build a
very large distribution network where
you can pay using cash, he says. The
network spans retail stores, self-serv-
ice kiosks and, ironically, even a credit
card payment facility through its web-
site to enable the purchase of a virtual
card for customers.
That allows Tappp to reach out to a
potential market of nearly three billion
people across Southeast Asia, South
Asia, the Middle East and North Amer-
ica, who can now access a growing li-
brary of entertainment, after two years
of operations devoted to mobile airtime
and gaming.
The first two (businesses) were step-
ping stones in getting (us) towards enter-
tainment, Agarwal explains. We had
to have the network; we had to have all
of this in place so we could have our dis-
tribution agents in place.
Now that the key pieces are falling
in place, he is readying the firm for its
next leg of growth entertainment
where Eros Now and Spuul are OTT pro-
viders for a target audience which may
not possess a credit card or is simply
averse to using one online.
The big problem is they dont have
a way to pay for it this business was
basically conceived to take care of an un-
met need. Agarwal also notes a clear
trend in the way entertainment content
is often delivered these days. It has be-
come more and more exclusive because
a lot of services are now available only
online you cant get them on the nor-
mal distribution channels.
With online distribution viewed as the
most efficient way of delivering enter-
tainment content, physical formats like DVDs
or VCDs are in danger of becoming relics of
a bygone era.
You should look at how many major stu-
dios have stopped manufacturing DVDs, Agar-
wal says. There are a few compelling reasons
for this trend, he notes.
A simple DVD in a box may cost no more
than a dollar to make. But throw in transport,
insurance and distribution, and the final cost
of a DVD is inevitably multiplied.
Last but not least, going online through
OTT also mitigates the perennial problem of
copyright piracy that has been a thorn in the
side of the entertainment industry.
We have more or less established that the
cost that the consumer is willing to pay today
is about a (US) dollar a movie the pirated
cost for making a DVD. So how do I compete
against these guys? The only way is through
OTT! he emphasises.
The advantages dont just end there. I
can deliver the movies to you on time and I
can also make sure that you never run out of
movies to watch. And, if I price it correctly,
you will always come to me first.
The ability to price offerings correctly is re-
ally the name of the game, as far as he is con-
cerned. Tappps offerings start from as little
as 50 US cents for a single days access to the
entertainment library of its current partners,
Eros Now or Spuul.
The prepaid route also offers a service flex-
ibility that conventional broadcasters find hard
to beat it doesnt lock customers into a long-
term subscription plan or require the installa-
tion of a content providers set-top box.
The industry statistics also speak strongly in
favour of OTT. Currently, OTT content is only a
tiny fraction of the US$468 billion global mov-
ie and TV industry, according to management
consultants Arthur D Little. It estimates the rev-
enue generated through OTT at only between
US$2 billion and US$3 billion in 2011.
But research by other parties forecasts expo-
nential growth for the Internet mode. A study
by Informa Telecoms & Media even projects
the global OTT market to be worth as much as
US$37 billion by 2017, as the cost of fibre broad-
band declines and adoption rates skyrocket.
That puts early-movers like Tappp in a strong
position to capitalise on the growth.
In the first month of the launch of
our pilot market in India, our target was
10,000 customers and we crossed that lev-
el, Agarwal says. Now were expand-
ing to take Tappp nationwide across In-
dia, he adds, describing the country as
a key market where the predilection for
entertainment and the general paucity of
cashless modes make it ideal for the pre-
paid model.
Tappp is therefore something of an anom-
aly in the modern world. It signals a return
to the old ways of doing business, albeit
by using a modern technology platform,
to stimulate market demand where cash is
still the dominant mode of payment.
But the greatest irony may lie in the
fact that Tappp benefits from an earn-
ings model that is not dissimilar to the
icons of the cashless economy. Like Visa
or MasterCard, it makes the bulk of its
operating revenues from a percentage of
the transaction value or, more specifical-
ly, the merchant discount rate (MDR) at-
tached to payments.
The merchant gives me a discount for
collecting this (prepaid card value) for cash,
explains Agarwal. So its no different from
a Visa or MasterCard except theyre doing
bank account to bank account, but what Im
doing is cash to bank account.
One is cashless and the other is not, but
the mechanics of the transactions are much
the same.
The future for cash is therefore not as dismal
as many would assume. In Singapore, the use
of prepaid cash is vital to facilitate daily cash
transactions such as for parking and electronic
road pricing charges, for example.
Global statistics also show that over 30 billion
prepaid cards were manufactured worldwide
in 2011, an average of more than four cards for
every person alive on the planet today.
Meanwhile, Swissclear Global is just mak-
ing sure the millions of viewers who have not
embraced cashless payment technology can
still follow the exploits of their favourite stars
in the latest Bollywood blockbusters.
A lot of customers dont
want to pay with credit
cards... This business was
basically conceived to
take care of an unmet
need. Agarwal
B
R
Y
A
N
T
A
Y
/
T
H
E
E
D
G
E
S
IN
G
A
P
O
R
E
Tappp on desktop (top) and Android tablet screens
The Edge Collection
To upgrade or subscribe:
Go to subscribe.theedgesingapore.com Emai| hot|inespore@bizedge.com Ca|| 6232 8622 (Monday to Friday 9am to 5.30pm}
This special promotion ends 31 August 2013
Singapore, Malaysia & the region now at your fingertips
3 years of
The Edge Singapore (print + 3 digital access)
+ The Edge Malaysia (1 digital access)
+ The Edge Review (1 digital access)
with $200 Takashimaya gift voucher
$418
3-YEAR PLAN
+
+
MW6 THEEDGE SINGAPORE | JULY 29, 2013
E
tech | BY JOAN NG |
T
he fanciful motion-control-
led screens that Tom Cruise
worked with gloves on in
the sci-fi flick Minority Re-
port arent even a reality yet,
but on-screen technology has already
moved on. Robert Downey Jrs Tony
Stark, in Iron Man, has digital screens
that fill a large space, expand and
contract at the clap of a hand and in-
telligently filter out noise at the flick
of a finger all with just Starks
bare hands.
Off-screen, scientists and engi-
neers are churning out better gadg-
ets too. Some of that innovation is
happening in our backyard. Intellect
Motion, a Singapore-based start-up,
has developed palm-sized panels that
allow you to play first-person shoot-
ing games on your PC or check your
Facebook page without having to
touch a keyboard or a screen.
As of now, the iMotion takes the
form of a simple rectangle, about the
size of a deck of cards, with three
round lights on it and a Velcro strap
that runs behind. You slip your fin-
gers through the strap and swipe your
lighted palms at a computer screen
or TV to move things around. Click-
ing is as simple as covering one of
the three lights with your fingers.
Movement from the iMotion can be
detected by the webcam on your lap-
top or smart TV, or with the cam-
era in Microsofts Kinect, the mo-
tion-controlled gaming device. Avid
computer gamers can configure the
iMotion for gaming shortcuts: cov-
er two lights to switch weapons, or
swing your palm in a wide arc to
launch a grenade.
Medical origins
The iMotion actually started out as a
medical device, developed in Russia
by the companys two founders, Vlad
Lukashevich and Alex Khromenkov.
In addition to the iMotion, they had
also developed a gravitation distri-
bution system called GMotion and
a platform called PMotion.
GMotion is a bungee and harness
system that makes complex move-
ments like jumps and turns easier
by reducing the users weight. PMo-
tion works like a high-tech Bosu ball,
training balance as well as the spine
and hip muscles.
Together, these devices can help
detect and correct problems in posture
or gait, improve hand-eye coordina-
tion or simply increase fitness. The
products are already in use in Russia
for diagnostics and treatment, as well
as for training sportsmen and mili-
tary personnel. To complement the
products, Lukashevich and Khromen-
kov also developed games that made
treatment and training more fun. The
gaming market, therefore, is a natu-
ral progression for them.
Given its start as a medical device,
Lukashevich thinks the iMotion has
a significant advantage when com-
pared to other motion control de-
vices made for the gaming market.
We soon realised that our devices
had such a high degree of accuracy
they were better than anything else
out there, he says.
The first step, however, is to refine
the industrial design of the product.
As a consumer device, the founders
realised that it needed to look sleek-
er and have a better finish. The com-
pany is crowdsourcing design ideas
by asking Facebook users to vote for
their favourite design. When the vot-
ing is complete, the project will be
posted on Kickstarter, a website that
allows companies to raise money via
crowd funding. Project creators choose
a deadline and a minimum funding
goal and individuals pledge money
online for the projects. If the goal is
not met by the deadline, no funds are
collected. Intellect Motion plans to
seek $100,000 on Kickstarter.
Fostering innovation
Although Russian in origin, Intel-
lect Motion is a locally-incorporat-
ed company and partially funded by
the government through the Interac-
tive Digital Media Programme Office
(IDMPO), an inter-agency outfit host-
ed by the Media Development Au-
thority and funded by the National
Research Foundation. The IDMPO,
which also involves efforts by oth-
er agencies such as the Agency for
Science, Technology and Research,
the Defence Science and Technolo-
gy Agency and the Economic Devel-
opment Board, aims to develop the
IDM sector, establish Singapore as
an R&D and innovation centre and
achieve breakthroughs in next-gener-
ation media. One of the programmes
under IDMPO is called i.JAM, short
for the IDM jump-start and mentor
programme. It provides funding to
start-ups like Intellect Motion in two
phases for up to $150,000.
i.JAM works with appointed in-
cubators to identify and nurture
start-ups. These incubators admin-
ister funds, provide advice and help
establish networks. Intellect Motion
was discovered and incubated by
Ruvento Ventures, the Asian arm of
a Russian start-up incubator called
Ruvento Asset Management. In addi-
tion to matching funding from i.JAM,
Ruvento also helped link the found-
ers of Intellect Motion with John
Baby, a local entrepreneur and an-
gel investor who has spent years in
the medical industry. Baby is now
helping the company gain approv-
al for the use of its medical devices
in Singapore.
This government-led support net-
work for start-ups is an experiment
for the nation in fostering innova-
tion. By linking up with incubators
both locally and around the world,
the government is hoping to engage
private enterprise at what it does best
seek out innovators and entrepre-
neurs. And it is providing financial
aid in the hope of luring these start-
ups to the country. In addition to
funds, an industrial building along
Ayer Rajah Crescent has been refur-
bished for the use of the start-up
community. Called Block 71, it hosts
meeting spaces and allows start-ups
to rent desks and chairs on a month-
ly basis for use as a budget work-
space in lieu of an office.
Intellect Motion is currently rent-
ing two of these hot desks at Block
71, but its managing director Baby
says there are plans to open an of-
fice soon. There, at least, we will be
able to set up a proper demo area.
One of our products, the GMotion,
requires a permanent space for dem-
onstrations, he explains.
Khromenkov, meanwhile, is test-
ing out how the iMotion works with
the Oculus Rift, a virtual reality head-
set for 3D gaming that is the result
of a successful Kickstarter project by
a company called Oculus. It looks
like a giant ski mask and sits heav-
ily on the head. But once you put it
on, the real world gets entirely shut
out. All you can see is the screen
in front of your eyes, which makes
you feel like youre securely in vir-
tual reality.
Khromenkov thinks that pairing
the iMotion with the Oculus Rift could
allow him to create a virtual gaming
experience that is highly realistic. The
future of gaming, he thinks, could
change with the advances of motion
control technology. We think it can
inspire developers to be even more
creative and dream up new virtual
worlds and scenarios for gamers to
enjoy, he says.
As author Napoleon Hill once
said, what the mind of man can con-
ceive and believe, it can achieve. If
Minority Report-style controllers are
not far away, perhaps Tony Starks
intelligent computer system is not
too far behind.
Start-up Intellect Motion sees gaming and
medical applications in motion-control devices
The iMotion, which started out as a medical device, allows you to play games on your PC without having to touch a keyboard
Slip your fingers through the Velcro strap and swipe your lighted palm at the TV to
move things around
THEEDGE SINGAPORE | JULY 29, 2013 MW7
E
humanresources | BY KEN EVERETT |
W
hen the article First fire all the
managers (Harvard Business Re-
view, December 2011) appeared,
it stirred a debate. Why? It is a se-
rious story about a serious com-
pany, with several hundred employees, a leader
in its industry that has flourished for 20 years
without managers.
Im not suggesting you fire all your man-
agers, but I am suggesting you look at how
your business is organised. Otherwise, you
might miss significant advantages.
A moments reflection shows why this is
so. The traditional organisation is just over 100
years old. It was set up to recruit and train ru-
ral workers to become cogs in emerging facto-
ries. In the absence of any other, the military
model was more or less adopted. Our current
business language is full of fossil words that
prove this. We still recruit, train, appoint, pro-
mote, retire or fire. These are all military words.
And the person who runs it all is called the
chief executive officer.
Rural workers are still being recruited to
factories in some places, but not in Singapore.
It forces us to ask: Is the old model still the
best for a world-class company in a world-
class country?
Things are different. We now compete for
well-educated talent who have choices, and
who think work should offer more than money.
Their shopping list includes words like mean-
ing and autonomy!
I stumbled across this opportunity by acci-
dent. I set up business in Singapore 20 years
ago. I couldnt afford employees and cer-
tainly not in several countries. So, I formed re-
lationships with others we called affiliates. This
happened in Singapore, then Malaysia, Japan,
Thailand, China and so on. My substitute em-
ployees loved their autonomy. This encouraged
innovation. We were soon doing fine.
Then I discovered they liked being in a
community. I had to learn the new role of
hosting meetings. We worked on product
improvement and marketing together. More-
over, we built trust, which helped enor-
mously when we sold regional deals. Then
the affiliates began to compete to host meet-
ings in their country. This shared the lead-
ership, and business prospered. We were
getting better.
During SARS and other crises, it turned out
our model was extremely resilient because we
all shared in the ups and downs. Many larg-
er companies went bankrupt. Not being able
to employ people had forced me into a model
(which we now call the networked organisa-
tion) that was collaborative, leader-full and re-
silient. Not bad for a default option! These are
qualities traditional organisations lust after.
Then came a revolution that transformed
our business. For some time we had collab-
orated informally with similar businesses in
our industry. On reflection, this activity had
turbo-charged our business. For example, our
biggest affiliates came this way. So we got seri-
ous about this and called it N2N, for network-
to-network-networking. Now we were getting
better at getting better!
What has this to do with Singapore and
Singapore organisations?
The networked organisation (NO) is only one
of many variants that have emerged. One spec-
tacular example is The Morning Star Packing
Company, featured in the HBR article already
mentioned. I call it an SMO, a self-managed
organisation. Then there are VOs (volunteer
organisations like Linux, Apache, Wikipe-
dia), COs (community organisations like The
Hub), and ROs (results-only workplaces like
Best Buy. Each is differentiated by the way it
is organised. All show that leaders can now
be architects of collaboration.
Theres a caveat, of course. To attract and
engage todays talent means leaders need to
be more like hosts than commanders.
Hosts of what? Conversations are a good
start. Then meaning and ambitions fol-
low naturally.
It is not enough to hide behind the podi-
um showing PowerPoint to rows of troops.
This uses the auditorium as an indoor parade
ground. It sends a strong message about pow-
er, control and keeping quiet. How comfort-
able will we be sitting in a circle saying, Im
not sure I know the answer to this yet, so Id
love to hear your ideas?
Singapore has unique advantages in Asia.
These include the opportunity to embrace a
daring new area of innovation our organisa-
tions. And it behooves our institutions to stim-
ulate debate on how to reinvent them.
Ken Everett, chairman of Ken Everett Interna-
tional Pte Ltd and N2NHub Pte Ltd, is the au-
thor of Designing the Networked Organisa-
tion. He will be speaking on the Architectures
of Collaboration at SIM on July 30, 7pm. All
participants will receive a copy of his book. For
enquiries and registration, please email jacque-
linelow@sim.edu.sg or call 6248 9448.
Reinvent your organisation
Everett: Leaders need to be more like hosts than
commanders
I
n her apartment in Tibet, Lu Ping
sits back and clicks an order for
about RMB1,000 ($204) of cosmet-
ics. At the other end of China, on-
line retailer Jian Weiqing receives the
order in his office near a Shanghai
airport and prepares Lus shipment,
which will arrive in the distant prov-
ince within four days.
Standing between the two is Ali-
baba Group Holding Ltd, the Chi-
nese Internet juggernaut thats head-
ing toward what analysts expect to
be the biggest initial public offering
since Facebook Inc.
After starting as a business-to-busi-
ness marketplace where companies
trade anything from shoelaces to steel,
Alibaba has morphed into a far more
consumer-focused operation.
The company now gets the bulk of
its sales and most of its growth selling
to individuals across China, from vil-
lagers in places without supermarkets
and malls to sophisticated consum-
ers in Beijing and Shanghai seeking
to avoid pollution and traffic.
Foreign brands are just not that
common here, said Lu, who owns
a hostel in Lhasa, the provincial
capital of Tibet. Online, I can get
almost anything I want. And its so
cheap at least 20% less than de-
partment stores, she says.
Alibaba, which takes a cut of
goods sold and charges retailers
such as Jian to run ads on the site,
says it generates about 70% of pack-
age deliveries in China. Consumers
bought at least 1 trillion renmin-
bi in goods via Alibaba last year, a
figure equivalent to almost 2% of
Chinas GDP.
As Alibaba becomes a vital retail
engine for China, founder Jack Ma
understands he cannot keep grow-
ing without adequate distribution of
the goods sold on his sites. So his
next big initiative is the creation of
a delivery network that can reach
virtually any place in China with-
in 24 hours.
To make that happen, Alibaba
joined with five delivery companies
and other partners to found Caini-
ao Internet Technology Ltd. Alibaba
has said Cainiao will invest as much
as 100 billion renminbi within eight
years to develop and manage a lo-
gistics network.
Though Cainiao has been vague
about its plans, Cao Lei, a director at
the China E-Business Research Center
in Hangzhou, speculates that it will
tap Alibabas data-crunching capabil-
ities to help distribution companies
optimise storage and delivery sched-
ules and ensure their trucks take the
cheapest and fastest routes.
The smaller delivery companies
have to join forces with Alibaba, be-
cause if they dont they will be elim-
inated, Cao says.
Mas goal is to help Chinese deliv-
ery companies gain the kind of scale
and efficiency enjoyed by United
Parcel Service Inc (UPS) and Fed-
Ex Corp in the US. In China, the
American delivery giants are smaller
than many domestic rivals because
they mostly serve multinationals and
charge higher prices.
FedEx and UPS are very small
players in China and cater to a dif-
ferent group of customers, says Ri-
chard Tai, an analyst at consulting
firm China Research and Intelligence
in Shanghai.
Since Ma founded the company
in his Hangzhou apartment in 1999
with only two dozen items for sale,
he has expanded to 24,000 employ-
ees and marketplaces selling millions
of products. The company says it is
collaborating with Wasu Media Hold-
ing Co on a set-top box connecting
TVs to the Internet.
Alibabas earnings more than tri-
pled to US$669 million in the March
quarter on sales that surged 71% to
US$1.4 billion. The company posted
more revenue in the period than Ya-
hoo! Inc, which owns a 24% stake
in Alibaba, and its profit margin is
wider than Apple Incs.
Ma, whose fortune is estimated
at US$3.4 billion by the Bloomberg
Billionaires Index, last year said he
was considering an IPO. If it keeps
its momentum, Alibabas operating
profit could reach US$4.3 billion this
year, and US$7.1 billion in 2014, ac-
cording to Evercore Group llc.
An IPO could value Alibaba at
US$120 billion, Evercore predicts,
which would make it the biggest
tech IPO in history, eclipsing last
years US$104 billion pricetag for
Facebook Inc.
Alibaba has no timetable for an
IPO and hasnt hired bankers, accord-
ing to John Spelich, a spokesman for
Alibaba in Hong Kong.
The company itself doesnt sell
merchandise; it provides a market-
place for online retailers that sell
more than US$3 billion in goods a
day on its sites.
The two most popular are Taobao
Marketplace, which links individual
buyers and sellers, and Tmall.com,
which connects consumers to re-
tail brands such as Microsoft Corp,
Procter & Gamble Co, and Japanese
clothing chain Uniqlo.
Malls and department stores no
longer attract me, says Wang Lin,
an English teacher in southwestern
Sichuan province. I just lie in bed
comfortably, and I can shop around
the country and even the world.
Many Taobao store owners have
become millionaires. Jian, who runs
Chen Chen Cosmetic, the supplier of
Lu Pings face creams, is one. The
38-year-old has expanded his on-
line business from a one-man op-
eration to one with a staff of nearly
50 in eight years. Last year, he sold
more than RMB30 million of beau-
ty products.
Jack Ma is really something,
says Jian. Without him, my company
wouldnt exist. Bloomberg LP
tech | BY LULU YILUN CHEN |
Alibaba building China delivery net in shift to consumers
E
Alibaba provides
a marketplace for
online retailers
that sell over US$3
billion in goods a
day on its sites
MW8 THEEDGE SINGAPORE | JULY 29, 2013
E
tech | BY ALAN OHNSMAN |
E
lon Musk inspired Robert Downey Jrs
portrayal of comic-book billionaire in-
dustrialist Tony Stark in the Iron Man
films. The role model for Musk, a bil-
lionaire industrialist for real, appears
to be Henry Ford.
The Ford Motor Co founders mastery of
mass-production made the Model T the first
affordable car, revolutionising transportation.
Musk, who named Tesla Motors Incs sedan
the Model S as a tip-of-the-cap to Henrys car,
sees himself similarly as an engineer, a tink-
erer and a nitty-gritty entrepreneur.
I dont spend my time pontificating about
high-concept things; I spend my time solving
engineering and manufacturing problems, says
Musk, 42, in a factory-floor interview.
Have you seen my desk? Its right there in
the middle of the factory, he says, pointing to
a drab workspace beside the Model S line. It
doesnt look like Tony Starks office.
Decade-old Tesla is an automotive phenome-
non, with an industry-leading share price surge
that erupted on the heels of its first quarterly
profit, a rave Model S review by Consumer Re-
ports magazine and rushed repayment of the
Energy Department loan that got the compa-
nys factory into operation. Beyond this years
goal of selling 21,000 electric sedans, South
African-born Musk wants to one day make a
half-million battery-powered cars annually at
Californias lone auto-assembly plant.
Teslas initial struggle to reach a produc-
tion pace of 400 cars a week led it to miss a
5,000-car sales goal last year for the US$69,900
($88,244) Model S. The companys 4Q loss
widened after it added temporary workers
and resolved supplier snags. That output lev-
el has since been surpassed, and not trivial-
ly, Musk says.
At this point, making 400 cars a week actu-
ally feels like a walk in the park, whereas it was
a nightmare in 4Q, he said recently, declining to
elaborate ahead of Teslas release of 2Q results.
Shares of Palo Alto, California-based Tesla
have more than tripled this year amid its prof-
itable quarter. That profit included a one-time
benefit from repaying its US loan early. With-
out it, Tesla earned less than half a US cent
per share.
The carmaker may report a 2Q loss of 18
cents a share, excluding some items, the average
of 12 analysts estimates compiled by Bloomb-
erg. Tesla slid 14% to US$109.05 at the close on
July 16 in New York, the biggest one-day de-
cline since Jan 13, 2012, after Goldman Sachs
Group Inc set a target price of US$84.
Rocket Man
Musk also runs rocket maker Space Explora-
tion Technologies Corp, known as SpaceX,
and is chairman of solar-power provider
SolarCity Corp.
Gains for Tesla and SolarCity shares, along
with expanding SpaceX business, have swelled
Musks fortune to US$6.9 billion, according to
the Bloomberg Billionaires Index.
By late 2014, Teslas goal is to make 800
cars a week, before starting Model X electric
sport-utility vehicle production, Musk says.
The factory has 3,000 employees, including
about 2,000 assembly workers, with two dai-
ly production shifts.
The cavernous factory, pristine in early
2012, now is filled with activity. A once-spot-
less white floor bears smudges from accelerat-
ing production. Musk figures 40% of the facil-
itys 465,000 sq m now are used for assembly
of cars, electric motors, aluminium-encased
battery packs and parts storage. Overtime and
temporary labour costs are falling as workers
hone assembly skills, he says.
Tesla is also making nuanced changes to
the Model S to trim production time, cost and
weight. Some practices were way overkill,
Musk adds, such as high-strength boron-steel
inserts in the side pillars secured with aero-
space-grade bolts.
Those are being replaced with lighter, cheap-
er and easier-to-assemble aluminium reinforce-
ments that maintain a five-star US crash rating.
By year-end, engineers will slice the Model Ss
weight by as much as 36 kg.
Teslas Fremont facility is highly self-con-
tained compared with most large auto plants.
It stamps its own aluminium body panels and
chassis parts, moulds plastic components and
dashboards and even die-casts individual met-
al components.
Im not aware of other plants that do their
own die- casting, says Michael Robinet, man-
aging director of consultant IHS Automotive in
Northville, Michigan, who studies assembly prac-
tices. Thats very difficult to do on-site.
Tyres, glass and stereo speakers are among
the few things the plant doesnt make itself.
Were quite vertically integrated, Musk
says. Were closer to the way Ford did it than
Ford is now.
Henry Ford built the worlds largest vertical-
ly integrated auto facility, the Ford River Rouge
Complex, in Dearborn, Michigan. The complex,
completed in 1928, had its own steel foundry,
coke ovens, glass furnaces and a cluster of oth-
er shops making every vehicle part. Ford and
other automakers ultimately abandoned the
self-contained approach, finding that suppliers
could improve production efficiency.
Tesla is really bucking the trend, Robinet
says. It will be difficult for them to gain econo-
mies of scale as they expand if they dont work
more closely with the supply base.
Mundane pieces
Tesla straddles technology and autos. Its en-
trance into the Nasdaq 100 this month dem-
onstrates its tech-industry bona fides.
Bill Ford, great-grandson of Henry Ford and
executive chairman of Ford Motor, says man-
aging the flow of parts will be a challenge as
Tesla grows. I love their technology, he said
in April at a conference in Beverly Hills.
They need to be mindful as they scale up
that running a car company is different from
running a technology company. Some of the
mundane pieces, like supply-chain management
and keeping dealerships stocked with parts,
arent very sexy, but they are very real.
Most suppliers of parts and materials for
Model S were hassle-free, Musk says. About
5% were slightly problematic; 3 or 4% were
problematic; and 1 or 2% of them were a night-
mare, he adds.
We still have a lot to learn and can get a
lot better, but I think were pretty good at this
point managing the supply chain for tens of
thousands of units a year. Were going to really
have to step things up. Bloomberg LP
July 23, 2010 July 23, 2013
Tesla Motors Inc
Volume (000) Price (US$)
122.74
B
L
O
O
M
B
E
R
G
0
20000
40000
60000
80000
100000
120000
0
20
40
60
80
100
140
Musk morphs from Tony Stark to
Henry Ford as Tesla plant expands
Tesla, which makes 400 cars a week now, aims to up that figure to 800 by late 2014, says Musk
B
L
O
O
M
B
E
R
G