Invest in them, who bring the most bang

A few weeks ago I bumped into Stanislav and Joonas, who had spent the summer in London interning for RBS and Research Intelligence respectively. Both of them were among the 10 students in 2009, whom I helped to finance the first year of their studies abroad. Every time I meet any of our past grant holders, part of me is happy that my investment is bearing fruit, but the self-conscious me feels a bit uneasy in the company of people with brains the size of ripe watermelons. Just a couple of years ago Stan told me after finishing his first year of Mathematics in Oxford at the top of his class, he had started seriously doubting if this was indeed the right place for him.

We run a university grant programme Young Scholar Grant (Noored Õpetlased) with a couple of friends, which invests one time £3500 cash grants in prospective Estonian boys and girls out of high school, who had the balls to apply to Oxford, Cambridge, Humboldt, etc and the wits to be accepted. We pay out ~10 grants every year where each basically covers the student’s first year living expense abroad. Again they will need the balls and wits to know they can support the next 3 years of the studies themselves. The money comes from private “investors”, who all put in £500-£2000 and every privately invested £ is matched 1:1 by the Estonian government.

We just gave out 11 grants to the 2012 class of ambitious youngsters. This year the government ran out of budget after 10 grants, so the investors stretched themselves to send the 11th person without any government sponsorship and fully privately supported.

Handing out the grants is quite a get-together for all previous years’ grant holders and a great chance for us to hear how they have been getting on. So we learned that Holger from ’06 had recently created some synthetic diamond as part of his PhD research. Kristjan from ’08 turned down two PhD offers from Oxford and moved to London to continue at Imperial. Mihkel from the same class wanted to try in industry and competed against 6000 other wishfuls to win a spot among the evil bankers of UBS. Marek from ’09 who studied with professor Higgs (of the boson) in Edinburgh had spent this summer in Geneva colliding particles and checking the debris for his teacher’s boson.

2011 grant yearbook – in Estonian

So what do we, the investors, get out of it? We get enablers. We get to make sure that the top 0.05% brightest young people of our small country are educated together with the top 0.01% of the brightest people of the world. Our own universities are very good, but they are not the best. And “very good” just does not cut it when you need the “best” people to run the future of your country. There are no strings attached with the grant, the students only commit to complete the studies in the university, after that they can do what they want – go into research, work for a bank, go bank to Estonia, stay abroad – whatever fits the ambition.

“Investment in education pays the best interest” – Benjamin Franklin

This is a no-brainer investment: you have 2x leverage from your government, the value of your underlying asset class (education) only goes up, there is no direct exit to worry about – the only question is in the value of the indirect benefits you get from having super-educated countrymen and -women around you. The annuity will pay back in small indirect benefits over the next 50 years. Of course, you are not the only one benefiting – there are the other 1.3M Estonians who benefit and there is nothing wrong in sharing the proceeds.

Our investors vary from ex-bankers and entrepreneurs to researchers, who are still in postgraduate positions and running on grants themselves. I strongly believe, that every one of us should have and can have a contribution to education. If you don’t like giving cash then why not read a course or a guest-lecture at your university. By now you should have learned something worth teaching others. It would be reckless not to.

Eric Schmidt says this world is not ready yet

BERLIN, GERMANY - FEBRUARY 16:  Eric Schmidt, ...

“This world is not ready yet,”  Eric Schmidt of Google told me and a bunch of London entrepreneurs rhyming with a catchy Dutch beer commercial. He confessed once thinking that all the big ideas were done when he was the CTO at Sun – and a month later the Internet was invented.

An hour strong Q&A session with Eric for London upstarts and selected Campus residents, masterminded by Eze Vidra, was a fantastic success. Short, yet thorough and thoughtful answers to question after question. No fluff, no wasting time.

The session was a good reminder of the Google vision, which has so incredibly – together with the three other pathfinders AAPL FB AMZN changed the way we interact. Through the hour one could pick up words of wisdom for different audiences.

  1. for governments – if you are building shiny technology parks on the outskirts of your capital next to a well connected highway – you have failed your entrepreneurs, this is not where world will be changed.
  2.  for entrepreneurs – put your naíve and arrogance to work, these are awesome assets that generally fade away with age. You have once in a lifetime opportunity to imagine the world differently – the way it should be rather than the way it is.
  3. for talented people – get your maths right for a luck laden scenario. Slave for an investment bank and hope to earn max $500K a year or work 5 years for a startup and vest into $10M of equity. Your choice. Note: Eric made $7B along his journey from software engineer.
  4. for young companies – focus your resources on solving the real and the hard problem versus break even or early profit. Try and cure a disease, invent something that saves people time and helps put food on their table.
  5. for venture capitalists – tough business these days. know your game or watch out for a shake-out.

Someone asked if there is a particular theme or an idea that had particularly excited Eric. He said he is expecting a lot of value propositions in combinations bringing together: mobile access + crowdsourced intelligence + data algorithms + cloud oomph.

Wanted to ask Eric when is Google going to get their banking licence and when do they expect most people be transferring their paycheck directly to Google Wallet. Legend has that Larry and Sergey were thoroughly frustrated with the US banks in 2004 when they started accepting adwords payments at a large scale. They were determined to f** the banks and get a banking license for Google but Eric then convinced them not to.

Given how unexciting the news have been around Google Wallet, I decided not to ruin the perfectly fine session. Instead I asked him, where is Google planning to make the most impact to people’s lives and habits in the next five years. He said “improving search from queries to the depth of understanding”. Remember, this world is not ready yet.


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La Grave – mecca of high mountain boarding

Today my old mistress returned my love – for the 7th year in the row I have come to La Grave as the missionary, praying for fresh powder. This year she was kind and considerate – a total whiteout and snowstorms on Friday followed by 1m of fresh snow today from top to bottom.

Morning snow – as viewed from Hotel Castillan balcony

La Grave is a hidden gem and it has all the right characteristics stay never to be discovered:

  • It has only one ski-lift – an archaic pulsating gondola system, which takes about 25 minutes to the 3200m. When the glacier is open (from late Jan) there is a drag-lift to the top of the glacier to 3550m at good days.
  • Not a single snowcat-track. There are literately no “routes” as you are used to in other resorts. You are dropped off at 3200 and then you either take the left or the right valley and follow your imagination.
  • There are 4-5 small hotels in the village, one superb hidden restaurant Au Vieux Guide with signature raclette and 2-3 other eateries. Not your apres-ski and party destination.
  • Most visitors are 30-40 year olds, tanned mountaineers, coming from far as US and Canada. You cannot find the latest Burton boards or jackets on the mountain. However everyone is wearing a rucksack packed with the latest technology of avalanche airbags, icepicks, receivers, shovels, etc. People are here to explore and stay alive, certainly not to show off

In most other resorts I look like a geek with my swallowtail board. Today I think it was almost 50/60 as about half of the snowboards used on the mountain were either full swallowtails or reduced fishtails. But hey, in these conditions you really see the difference – the split tail drops into the fresh powder, the wide nose surfs up while you ride the white wave.