Portfolio | February 2018

ISSUE

146

CHINA NEXT

THE FINAL FRONTIER

Airbnb pushes east

How will the new space race end?

BRAZIL’S ECONOMY

THE CEO PHILOSOPHY

Can it recover in 2018?

The rise and rise of Stoicism

Meet the businesses who are reinventing the region’s tech scene

MIDDLE EAST STARTUPS

FEBRUARY ISSUE 146

The business of life & living

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FEBRUARY ISSUE 146

CONTENTS UPFRONT

12

DISNEY’S NEW CLOTHES

How the Fox takeover will reshape entertainment

LIVING

16

A room with a view in Hong Kong

BANGKOK PROPERTY

Where’s the value in the Thai capital

22

BRAZIL’S ECONOMY

The political and financial year ahead

32

AIRBNB IN CHINA

Why the company is making a push into China

74

HOTEL

80

WHAT TO PACK

From Seoul to Zagreb, we’ve got you covered

84

STREETS AHEAD

Why Thailand’s food scene is gaining worldwide attention

88

EXHIBITION

A design exhibition in San Francisco

90

COLUMN

How one entrepreneur ‘crushed it’

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33,349 copies January - June 2017

FEBRUARY ISSUE 146

CONTENTS FEATURES

38

MIDDLE EAST START-UPS

The companies and the people changing the face of the region’s start-up scene

46

THE NEW SPACE RACE

Why corporations have overtaken countries in the race to dominate space

54

THE CEO’S FAVOURITE PHILOSOPHY

Why Stoicism is gaining ground among CEOs, entrepreneurs and athletes

60

PARIS CALLING

Can the French capital take advantage of London’s exit from the EU?

66

BREXIT

We examine what Brexit really means for Britain’s economy

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UPFRONT

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Disney’s new clothes CJ Hannon explores Disney’s takeover of 21st Century Fox

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t was a deal that reverberated around the world – a deal that will affect everyone from cinema chains to smartphone users, Hollywood studios to Silicon Valley. When it was announced late last year that Walt Disney had agreed to buy most of 21st Century Fox, for $52.4 billion, it sent a message to the industry.

That message: the future of the entertainment business is online.

It also provides an intriguing last act for Rupert Murdoch, who will now become – should the deal pass antitrust regulators – Disney’s largest shareholder. The move would make Disney the largest Hollywood studio in history, and place it ready to fight back against Silicon Valley’s increasing encroachment in the entertainment business. Disney has already announced an ambitious plan to introduce two streaming services by 2019. With this deal and the wealth of movies, TV shows and sports programming it provides, the company will now have the muscle to challenge Netflix, Apple, Amazon, Google and Facebook in the fastgrowing realm of online video.

For Murdoch, the deal made sense. He had become increasingly concerned at the growing power of tech companies such as Apple and Amazon. As they moved deeper into

the entertainment world, Fox and the other traditional entertainment players are increasingly losing out to the likes of Netflix for the best scripts. Even Facebook is looking at streaming live sporting events, with the company willing to spend “a few billion dollars” on global rights. All of this understandably made Murdoch take pause. He is, after all, a man who has made his fortune understanding the shifts in the global media landscape. And for Fox, things weren’t going well. His 2014 attempt to buy Time Warner failed, while its recent attempt to become the sole owner of Sky has not passed. Should Labour win the next British election, it’s likely that scrutiny on Murdoch’s British holdings will increase.

Family rivalries also came into play. Three years ago he installed his eldest son, Lachlan, as executive co-chairman, giving him equal standing to him. He appointed his younger son, James, chief executive of 21st Century Fox. They would all work together, Murdoch insisted. Troubles soon emerged.

James, who is less conservative than his father, had expressed embarrassment at Fox News, particularly its stance on climate change. According to The New York Times, tension rose in August

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UPFRONT

“Disney is going to become the Walmart of Hollywood – huge and dominant”

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last year when James sent an e-mail that criticised President Trump for his response to the racially charged violence in Charlottesville. Trump considers Rupert Murdoch a friend and informal advisor.

Disney, under the leadership of its chief executive, Robert A Iger, has become an entertainment behemoth. Iger’s deals to acquire Pixar, Marvel and Lucasfilm had been masterstrokes. With 21st Century Fox’s businesses, analysts believe Disney would be able to compete against Silicon Valley. One media analyst, Barton Crockett, said: “Disney is going to become the Walmart of Hollywood: huge and dominant. That’s going to have a big influence up and down the supply chain.” Cinema owners could be the first to get squeezed.

Traditionally, a film’s box-office revenue is split evenly between cinemas and the studio. But Disney has managed to get cinemas to hand over more than 60 per cent on films such as Star Wars. Now it can try the same thing with Fox’s Avatar, which has four sequels in the works. That’s not the only the potential problems the merger will cause for cinemas. Studios have been looking at ways to get films released on the small screen sooner, with Disney looking to launch an online service next year, which may mean its Marvel and Pixar films will bypass cinemas altogether.

According to insiders, the deal got started with a casual get together last summer between Iger and Murdoch at Murdoch’s Bel

Disney CEO Bob Iger

Air winery. According to The New York Times: “There, Mr Iger and Mr Murdoch chatted about the way technology was roiling the media business, according to Mr Iger, who came away thinking – to his surprise – that Mr Murdoch might be open to a merger discussion. Mr Iger said he called him a few weeks later in August to propose more serious talks.” Those talks led to the deal that’s now in place. So far, the Murdochs are making all the right noises: the deal isn’t a retreat, it’s a pivot. “I know a lot of people are wondering, ‘Why did the Murdochs come to such a momentous decision?’” Murdoch said on a

conference call with investors. “Are we retreating? Absolutely not. We are pivoting at a pivotal moment.”

Lachlan, 21st Century Fox’s executive chairman, added that the move was “about returning to our roots as a lean, aggressive challenger brand” that would be “focused at the beginning on must-watch news and live sports”.

For Disney, the addition of Fox will, they hope, boost their own streaming services. The first, ESPN Plus, will arrive this spring. The second, unnamed service, featuring the company’s Disney, Pixar, Marvel and Lucasfilm offerings, will come on stream later this year.

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THE MURDOCHS Rupert Murdoch is 86, and has been thinking about his succession since 2014 when oldest son Lachlan (46, pictured) returned to the family business a decade after leaving. Since then, there’s been a power-sharing scheme between Lachlan and his younger brother James (45). James is the chief executive of 21st Century Fox and chairman of Sky while Lachlan is the co-chairman of 21st Century Fox and News Corp. The Disney deal will leave James without a role in the company, although there are rumours he will get a job in Disney after it goes through. Lachlan will stay and run what remains of his father’s business, including Fox News. As for Rupert, he will remain owner of Fox News as well as Fox Sports, Fox Business and its network of 28 local TV stations in the US. He will also continue to own News Corp, which is home to the likes of The Sun, The Times, The Wall Street Journal, Dow Jones and TalkSport.

THE CONTENDERS NETFLIX The king of streaming services, Netflix is the brand to catch. With more than 80 original films set to debut in 2018, the company is hoping that its viewing figures will increase with new content. This only works if the new content is compelling, and that’s always a big risk.

Established: 1997 Valuation: $70 billion

Rupert Murdoch and Donald Trump embrace

Thanks to the Fox deal, Disney now own most of Hulu, so that may be rebranded rather than an entirely new service being set up.

Of course, the deal is reliant on it being passed by the authorities.

The Justice Department is still fighting AT&T’s $85.4 billion acquisition of Time Warner.

President Trump is friendly with both Murdoch and Iger, and Sarah Huckabee Sanders, the White House press secretary, said that Trump had spoken with Murdoch and “congratulated him” on the deal. Iger, unsurprisingly, believes

the acquisition should be passed.

“If they look at it from a consumer point of view,” he said, “they should quickly conclude that the aim of this combination is to create more high-quality product for consumers around the world and to deliver it in more innovative, more compelling ways.”

If the deal does go through – and that looks likely in a Trump administration – then both Hollywood and Silicon Valley will have to contend with a new power player. What this means for the consumer remains to be seen.

APPLE Apple is taking streaming seriously, with the company set to spend $4.2 billion on original programming by 2022.

One clear advantage Apple has over its rivals is that the company owns the means of distribution, with mobile phones set to take a bigger chunk of market share.

Established: 1976 Valuation: $900 billion HULU With more than 3,500 series and movies, Hulu is a joint venture between Walt Disney, 21st Century Fox, Comcast and Time Warner. Once the Fox deal goes through, Disney will own a majority stake in the company, and could rebrand Hulu

as it launches its own streaming service later in the year.

Established: 2007 Valuation: $6 billion AMAZON Amazon hopes that its legions of customers will also use the service to stream movies and TV shows. Cleverly, the company has bundled its offerings, so Prime customers also get two-day shipping on purchases, a free Kindle book each month and unlimited access to Amazon Music. Whether this will be enough to lure customers away from Netflix remains to be seen.

Established: 1994 Valuation: $400 billion HBO HBO Now’s advantage is its history of creating world-class original content, from The Sopranos to The Wire to Game of Thrones. The company hopes that the quality of its content will see it win customers away from Netflix and Hulu.

It’s a big ask, but with 29 Emmy wins in 2017, there’s no sign of it giving up any of its competitive advantage soon.

Established: 1972 Valuation: $30 billion

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UPFRONT

Bangkok bargains Gregor McClenaghan finds value for money in Thailand’s capital

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angkok’s booming property market is welcoming a new wave of foreign investors who are looking to cash in on high-quality projects at a fraction of the cost of other cities in Asia.

With property in Hong Kong and Singapore now too expensive for many ordinary buyers, smallscale investors from those cities, and increasing numbers of newly-rich Chinese, are getting more bang for their buck in Thailand’s metropolis, where the expansion of public transit lines has helped make new

and this has actually helped the market because it means there is no oversupply in the suburbs, while downtown, where the price per square metre is very high, there is not much supply and a lot of local demand,” says Aliwassa Pathnadabutr, managing director of international real estate consultancy CBRE’s Bangkok office.

“Now things are looking good.

Last year the prime minister (former army general Prayut Chan-o-cha, who seized power in a military coup in 2014) announced there will be elections soon, which

“The recent turmoil has helped the market as downtown there’s not much supply and a lot of demand”

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areas attractive, even as a shortage of land to develop downtown and political upheaval several years ago has helped keep developers cautious and prevented the property market from overheating.

“Sometimes when a market is booming people worry about bubbles, but in Thailand over the last 10 years we had the political protests; we had flooding one year; then the last couple of years there was an economic slowdown,

helped market sentiment; transit projects are going ahead; and there are signs of economic recovery after the slowdown of the last few years, so now is a good time to invest.”

Helping breathe new life into the property market are large numbers of Chinese investors, who according to figures from CBRE now make up 34 per cent of foreign property investors in Thailand by nationality, although many of those are resident

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UPFRONT

“There is still inventory left from last year, but not many projects are due to launch in 2018 so growth will slow; the take-up rate for high end projects last year was around 70 per cent, which is very healthy, and we see 2018 being smooth,” he says.

“Long term, Bangkok is a big city and it’s growing, so demand is constant; if one area of the city starts to slow due to oversupply, other areas pick up. A few years ago average vacancy time in the CBD was around six months; now it’s two or three months, and in some areas units are only vacant for a month between tenants.”

Khan believes that Bangkok is a city on the rise and that the future looks good for investors.

“The domestic economy is strong and there are a lot infrastructure projects planned, with big Japanese developers signing joint venture agreements with Thai public companies; billions of dollars are coming into the economy.

Personally I’m very optimistic about the real estate market.”

THAILAND – RULES AND REGULATIONS

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in Hong Kong. In 2010, only 16 per cent of investors were non-Thai; in 2017, foreigners are 24 per cent of the market.

There has also been a noticeable shift in the market’s motivations: in 2010, 65 per cent of buyers were end users, and just 35 per cent were investors; by 2017 that had completely reversed, with 66 per cent of people buying condominiums as investments and 34 per cent to live in.

“The more recent Chinese investors are mainly looking at cheaper units of five to 10 million Thai bahts; that can get you a decent size unit located further out of town, but still near a transit

line,” says Aliwassa. “For more expensive property downtown, 20 million bahts and up, people from Hong Kong are still the biggest foreign investors.”

Frank Khan, executive director and head of the residential department at the Bangkok office of international real estate consultancy Knight Frank, says investors can expect rental yields of four to five per cent in some areas, and capital gains of around eight per cent, depending on location; rental yield in the more expensive downtown areas is lower, but capital gains for those properties tend to be higher due to limited supply and ongoing demand.

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The percentage annual gains investors can expect in downtown Bangkok

Foreigners are prohibited from owning land in Thailand, so the only way to buy commercial property or houses is through a majority-Thai owned company.

Condominiums, however, are different: Thailand’s Condominium Act of 1979 allows foreigners to own up to 49 per cent of the total saleable area of a condominium project, on a freehold basis. Currently, most projects are around 25 per cent foreign owned, so there is plenty of room for foreign investment, but property experts recommend that buyers make sure there are guarantees in their sale and purchase agreements that the units they buy are part of the 49 per cent total that is available.

Although the market is well regulated and developers

FEBRUARY

will not risk breaking the law, Frank Khan, from real estate consultancy Knight Frank, said buyers should ensure the property’s specifications are also attached to the sale and purchase agreement to avoid misunderstandings.

It is also vital that money for a property purchase is transferred

properly through the correct channels, to ensure compliance with anti-money laundering laws. Banks need to know that funds are being moved for a property purchase so they can issue a foreign exchange transfer certificate; this certificate has to be seen by an officer from the land department in order to

authorise transfer of the title deed.

There is a healthy resale market for condominiums in buildings that are five to 10 years old, but buyers intending to make a quick profit from resale should be aware that they will face an additional 3.3 per cent business tax if they sell a unit on within five years after completing their purchase.

BANGKOK – AREAS TO INVEST 1) SUKHUMVIT The city’s main east-west artery, with the BTS Skytrain running above it, is a favourite location for expats and is lined with shopping malls, hotels and condominium projects. Analysts draw a distinction between Main Skuhumvit, running from Soi 3 to Phra Khanong, which is packed with high end and premium buildings due to sky-high land prices, and Greater Sukhumvit, extending out into the suburbs, where more recent, slightly cheaper projects are located.

2) CENTRAL BUSINESS DISTRICT (CBD) Encompassing the areas of Ploen Chit, Chit Lom, Sala Daeng, Silom and Sathorn, the CBD has high-end and premium condominium projects side by side with the most expensive commercial real estate in the city.

3) PERIPHERY While areas like Chaeng Watana in the north are a long way out from the city centre, there is a market there for low and mid-

range apartments for people who can’t afford to live closer to downtown, and as Bangkok’s public transport network develops over the coming years more developments are expected to launch in peripheral areas.

4) FRINGE The layer of development just outside the Sukhumvit and CBD areas includes Lad Prao, Punnawithi, Ratchadapisek and Rama 9 Road. These areas have good public transport access.

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OTHER PARTS OF THAILAND Outside Bangkok, there are condominium projects in the resort towns of Hua Hin and Pattaya, but Frank Khan, from real estate consultancy Knight Frank, said the market in those towns is poor compared to Bangkok. “These resort town projects are lifestyle buys, and Thai people and foreigners are not buying them at the moment,” he says. “For investments, the market is Bangkok.” The only other location that investors might consider, says Aliwassa Pathnadabutr, of CBRE, is the island resort of Phuket.

/ PROPERTY

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UPFRONT

French chic A sprawling mansion on the Riviera

4 bedrooms

Pool

Water view

Movie theatre

Gym

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here’s nowhere quite like the French Riviera and Nice has long been one of its most desirable destinations. This sprawling renovated neo-Provencal property offers panoramic sea views, in a quiet location, while being relatively close to downtown Nice. Located over 4,000 square metres, and featuring a heated pool and Jacuzzi, this would make the perfect summer home. The garden level features a living room, a dining room with a billiards room, a fully equipped kitchen, a bedroom with en-suite bathroom and a cinema room; upstairs, there’s a main bedroom with en-suite bathroom and a dressing room opening on a terrace, two other bedrooms with en-suite bathrooms and an office. There’s also a gym and an independent studio for guests.

France

PRICE $5.85 million

christiesrealestate.com

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UPFRONT

Brazil outlook Sam Cowie looks at what Brazil can expect in 2018

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om Jobim, the legendary Brazilian musician, composer and bossa nova pioneer, famously once said of his home country: “Brazil is not for beginners.”

It’s a statement that rings truer than ever today. Over the past decade, fuelled by a commodities boom and increasing demand from China, Brazil became an emerging market champion.

It won the rights to host the World Cup and Olympics successively and seemed to survive the world financial crisis, boasting 7.5 per cent growth in 2010, with millions lifted from poverty into a new middle class.

20th century French general and statesman Charles de Gaulle said: “Brazil is the country of the future… and always will be.” For many Brazilians, the future had seemingly arrived.

Fast forward a few years, however, and Brazil plunged into its worst recession on record, the result of falling commodities

prices, a slowdown in trade with China and a colossal corruption scandal at the heart of the state oil giant Petrobras that saw key sectors of the economy – especially construction conglomerates – paralysed.

The economic downfall and far reaching corruption investigation dubbed “Car Wash” was the key driver of a highly controversial impeachment process that took down leftist president Dilma Rousseff. She was replaced by the business friendly and centreright leaning Michel Temer, who enacted a string an unpopular austerity measures and reforms that he defended as bitter but necessary measures to get Brazil’s flailing economy back on track.

In October, Brazil will go to the polls to elect a new president in what is expected to be its most contested and important general election since 1989 when the country returned to democracy from a 21-year military dictatorship. For now, analysts

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say, Brazil’s economy has turned the corner. The country crawled out of recession in the middle of last year, thanks mainly to an unexpected agricultural boost.

“There is a cyclical recovery that is underway, I suspect that this will continue,” says Neil Shearing, chief emerging markets economist at Capital Economics. Capital Economics GDP growth forecast for Brazil is 2.8 per cent in 2018

The country turned the corner last year thanks to an unexpected agricultural boost and one per cent in 2017. Inflation, currently at record lows, is likely to creep a bit higher to around four per cent, but still under the central bank’s target. Banks are starting to lend again and the labour market is recovering, albeit slowly, from its peak of 13 per cent unemployment.

For now, markets remain strong, with São Paulo’s benchmark stock market Bovespa hitting a record high at the beginning of 2018, though excitement is expected to wane as October’s elections draw closer.

Capital Economics currency forecast could see Brazil’s currency the Real drop down to $3.5 by the end of the year.

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UPFRONT

Right: Brazil’s current president, Michel Termer Below: Former president Lula, who was convicted of corruption, although he has appealed the sentence

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That’s coming off the back of the worst recession in recent history. In 2015, when the country plunged into its worst recession on record, GDP shrank by 3.8 per cent and was followed by another 3.6 per cent fall in 2016.

Shearing says Brazil failed to make necessary reforms during the economic good times. “What we didn’t see was this second round of reforms that Brazil needed – it still had problems with very low rates of domestic savings, low rates of investment, big infrastructure bottlenecks, problems with red tape and taxes on the supply side of the economy,” he said.

“None of that mattered when the economy was chugging along nicely, but it did mean that supply constraints started to build up,” he added. Shearing says that the economy is on the right track, at least for now.

“Outlook in the short term relatively bullish,” he said.

“Where I have greater concerns is over the medium term, the two- to five-year horizon.”

One of the thorns in the Temer administration’s side has been its attempts to pass a reform of Brazil’s generous but costly pension system, which would see Brazilians working for longer.

“The Temer pension reform is only really scratching the surface of what is necessary, it’s probably only a quarter of what is really necessary to get the pensions system on a sustainable footing, it’s absolutely critical,” Shearing says.

In October, Brazilians will go to the polls to choose a new president. The popular Lula da

“The outlook for the short term is bullish, but there are greater concerns over the medium term, the two- to five-year horizon” Silva leads the polls for voting intention, and markets fear that he would stray from Temer’s pro-business and reform agenda.

Lula was sentenced to nineand-a-half years in prison for corruption in June but remains free pending an appeal.

For many voters, particularly in Brazil’s poorer states, the

“Lula” effect remains strong. He remains Brazil’s only working class president and is credited with implementing social policies that helped the poor. Extreme poverty in Brazil increased 57 per cent since 2014 and today unemployment stands at 12 per cent. Those figures are more important to many voters than the

FEBRUARY / ECONOMY

corruption charges Lula faces.

But if Lula’s sentence is upheld, he may not be able to run, leaving the presidential race wide open for as many as six leading candidates.

One of these could come from his left leaning Worker’s Party.

Research published in Brazil’s leading financial daily newspaper Valor Economico suggests that as many as 50 per cent of Lula voters would vote for the candidate he supported.

Markets are hoping for a market friendly centrist candidate,

but one has yet to appear. Geraldo Alckmin, the current governor of São Paulo, is the market’s favourite so far but his intention for voting at the polls is less than 10 per cent. “It feels like the political landscape is not conducive with a liberal, centrist candidate coming through and is more tilted to a populist, either from the left or the right,” says Shearing.

Polling second after Lula is the hard right former army captain Jair Bolsonaro, a pro-gun, law and order candidate with a history of

2.8%

Capital Economics GDP growth forecast for Brazil this year

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sexist and homophobic remarks, a mix of Donald Trump and the Philippines’ Rodrigo Duterte.

Despite his admission of knowing next to nothing about the economy, Bolsonaro’s appeal lays in his tough on crime stance in a country with rising violence – there were 62,000 murders in 2016 – as well as his reputation as incorruptible.

Recent figures suggest that corruption is the biggest concern for 62 per cent of Brazilian voters. Twenty-one out of 54 senators running for re-election in 2018 are under investigation in the Car Wash investigation.

President Temer has also faced his own scandals – in May 2017 he was taped appearing to condone payments of hush money to a jailed former political colleague in a secret recording set up by meat tycoon Joesley Batista. A close aid of the president was also caught by Brazil’s federal police containing a suitcase with R$500,000 ($155,000) outside Batista’s company (JBS) office in São Paulo.

Temer survived two votes in congress that could have led to his removal, for bribery, corruption and criminal organisation.

Ultimately, he is understood to have survived by horse trading with congressmen, freeing up funds for lawmakers to spend on projects in their districts.

Aside from domestic issues like the election, it’s important to watch for a slowdown in China that would lead to a slight drop in commodity prices as well as interest rates rises in the United States that could see investors taking money out of riskier markets like Brazil, though this is unlikely to affect the 2018 outlook much.

ARGENTINA FACES ECONOMIC AND POLITICAL PROBLEMS In general 2017 was a good year for the Argentine economy. President Macri managed to satisfy foreign hedge funds over debt repayments, rolled back corporate taxes and even tweaked old age pension benefits. Overall, though, economic recovery was slow and he remains under pressure in 2018. Macri campaigned as the antidote to former president Cristina Kushner, who was seen as incompetent when it came to economic matters. For Macri to succeed this year, he will need to restructure labour laws, fight off his political opponents and hope that the early signs of recovery can blossom into something more.

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UPFRONT / SPEND

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LEXUS X MARQUIS-CARVER YACHT

The BeoLab 50 speaker has seven built-in amplifiers and is made of aluminium, oak and fabric. Sleek and oh so stylish, these speakers look as good as they sound.

A beautifully sleek yacht, this concept from Lexus and Marquis-Carver is the latest attempt by a luxury car maker to move off dry land. Few have done it so stylishly, and we can only hope it makes it to market.

Lexus, POA, lexus.com

Beolab, from $30,742, petertyson.co.uk

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SIEGER BY FÜRSTENBERG ESPRESSO CUPS Handmade in Germany from Fürstenberg porcelain, these cups are available in two finishes: completely gold plated or with platinum interior.

This can cool or freeze anything in a matter of minutes and even doubles as a traditional microwave. Kitchen tech at its best.

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FRIGONDAS FREEZER

US LUXURY CAR MARKET HEATS UP Mercedes-Benz has outsold BMW in the US luxury car market for the past two years in a row. The German manufacturer can point to its range of SUVs as one reason for its success, but BMW aims to fight back with its new X2 model at the Detroit car show. A full size X7 SUV is expected to roll out later this year. The German brands pushed Lexus into third place with Audi and Land Rover also confident about their prospects in 2018.

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UPFRONT

Print ready CJ Hannon discovers a magazine shop in London at the forefront of the print renaissance

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t’s a good time to be making magazines. For all the doom and gloom around the ‘death of print’ narrative, indie publishing is enjoying a resurgence of late. One example of this can be found in the Clerkenwell neighbourhood of London. There, located at the base of a 1950s tower block, in (ironically enough) a defunct newsagent, lies Magculture.

abroad: English-speaking countries such as the US and Australia of course, but also a huge number from mainland Europe, where the default language is now English for these magazines, to help them cross borders.”

For Leslie, the shop is very much a labour of love. “The new generation of magazines are so carefully crafted and produced, I felt they deserved to be presented better

“We have had more than 650 titles in the past two years since we opened.

Most are local, but a minority are from Europe, Australia and the US”

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Set up by the designer and writer Jeremy Leslie, the shop has quickly established itself as the best magazine shop in London. Home to more than 450 titles (ranging from £4 to £100), it’s a testament to the health of the industry right now. The magazines range from mainstream titles such as Monocle to gritty zines and short-run labours of love. “We have had more than 650 titles over the past two years since we opened,” Leslie says. “They come and go. Most are local, but a large minority are from

than the usual rough and tumble newsagents we have in the UK.” Indeed, Europe has a number of wonderful magazine shops, such as Anatheum Niewscentrum in Amsterdam and Do You Read Me? in Berlin. “As I was writing constantly about the growth of the indie scene I realised London needed something similar, and that if I didn’t do it someone else would. That would never match my expectations so I decided to give it a go.”

It took Leslie about nine months to get the shop open. “My super-

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supportive wife and I drove around London checking out different areas,” he says. “We went through several other sites before settling on the final one. By then I had realised that the most important thing was the nature of the site and the space it had, rather than a fancy address.

The shop was a defunct newsagent at the base of a 1958 tower block; underneath the suspended ceiling and rubber floor tiles was a perfect example of modernist architecture: a double-sloping roof with skylights and an original terrazzo floor.

It was of a scale and shape that meant I could open the shop as free-standing thing in its own right, and still have my office and design studio behind it.”

While there are a few existing shops in London that sell indie titles, space is an issue. Many of the stores are very small, and the magazines are packed in, spine out, which makes it difficult to browse. “I didn’t want to open a cubbyhole, I wanted a big space, so I had to go to a quieter street, although where we are is quite central,” Leslie says. “We’re near Soho, Angel, Shoreditch – we do get a lot of passing trade, which has been a surprise.”

Despite the rise of online shopping, magazines are very tactile things, and nothing beats holding one in your hands and flipping through the pages before a purchase, something that can never be replicated online. “All the magazines are presented full cover visible in the shop, and we encourage browsing and questions,” Leslie says. “Many

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customers know exactly what they want, but we also find ourselves advising and helping others. Some people will spend more than an hour looking through the entire stock before buying.”

Leslie’s interest in magazines and magazine design can be traced back to his teenage interest in music. “I was drawn to music magazines when I was younger, firstly for the content, then once I went to design school I joined the dots and realised that magazines like The Face interested me to read but also to look at,” Leslie says.

“When I left art school I worked at a London listing magazine called City Limits and caught the magazine bug: the adrenaline and deadlines, free tickets, the smell of typesetting. I subsequently worked at Face competitor Blitz as art director, then had my own studio, a period as art director at Time Out London during its heyday in the ’90s, and then 10 years at John Brown Publishing where I

Magculture is located in a defunct newsagent in the Clerkenwell area of London

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Cost in sterling of the most expensive magazine stocked

got to develop a large design team and create some great magazines: Carlos, M-real, Hot Air. I’ve worked for myself most of my career, aside from TO and JBP.” “Running any retail business is challenging, particularly for someone with no experience.

The red tape wasn’t too hard, but it took some time to navigate the arcane world of real estate agents,” Leslie says. “You need to find the right place, and access the ‘real’ list of properties that the estate agents will show you only after you have established some trust. There are a lot of properties

available that don’t look like they are available. I definitely learnt a lot from the process.”

Another issue is distribution. “It is the hardest and most broken part of the industry. Simply, it is very hard transporting large boxes of paper around. Most of the people we work with are lovely but some are just useless.” There have been lots of good surprises too. “Anyone and everyone buys magazines.

Girls, boys, men, women, students, grannies… they buy them in strange combinations and you can never guess what they will bring to the counter,” Leslie says.

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ANXY Anxy addresses mental health by reminding us that we are all capable of collapse, and encouraging us to understand how we can help ourselves and others cope. That sounds super-serious, and in some respect it is, but it also uses good photography, illustration and different styles of writing to be welcoming and positive.

MUSHPIT Reinventing the boring women’s magazine with razor-sharp wit allied to a defined political stance and presented using the best contemporary editorial design, this is a brilliant piece of editorial creativity. Who says the left can’t enjoy themselves?

Jeremy Leslie

“Distribution is the hardest and most broken part of the industry. It’s hard to transport large boxes of paper” A major help was the fact that the Magculture brand was already established. “It would have been 200 per cent harder without the online presence – the blog had been out for 10 years before we opened the shop,” Jeremy says.

The website, magculture.com is a hub of magazine-related news and opinion, with a focus on indie titles, as well as some of the more

iconic mainstream titles. Along with the books Leslie writes and publishes, there’s also the events, all of which have helped establish the brand as the go-to one for all things independent publishing.

Since opening in 2016, Leslie has seen the indie publishing scene flourish. “It just gets healthier and healthier; it’s such an exciting time. It’s fascinating seeing new

MACGUFFIN My favourite: a magazine that uses a single item each issue (they’ve done the bed, the window, the rope, the sink and most recently the cabinet) and use it as starting point to research stories of history, design, anthropology and beyond. It is intelligent, engaging, beautifully designed while entirely open and approachable.

interests growing. Recently we’ve seen a whole new range of mags published by young women for young women, and a new interest in mental health. There’s a growing ecosystem of publishers, supporters, shops and readers that have benefited enormously from the web and social media.”

As for the future, there’s lots on the horizon. “We’re about to relaunch our online service. It’s already really successful, and we’ve done a lot of research and planning and we believe we can expand it further. We ship magazines daily all over the world.”

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Airbnb’s China push Lauren Razavi examines why Airbnb is eyeing China in the next part of its global expansion

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wo-thousand and seventeen was a landmark year for Airbnb. The online marketplace now offers a total of four million homes in 65,000 cities spread across 192 countries. For the first time it achieved a full year of profitability and, in October, the company was valued at US $31 billion. But this year, the world’s most disruptive accommodation company is hoping to finally crack one of its greatest challenges: China.

China is the biggest tourism market in the world and, by 2020, Airbnb expects to have more customers there than in any other country. But since launching back in 2008, a slow adoption rate has seen the country lagging significantly behind the rest of the world. Last year, however, there was 270 per cent increase in Chinese bookings, with more than one million stays booked in the third quarter. In just three years, bookings are up more than 100-fold.

“Driven by an appetite for authentic travel, Chinese millennials are increasingly

turning to Airbnb for unique travel experiences – and we couldn’t be more honored to welcome Chinese hosts and guests into our community,” says Crystal Hou, head of communications at Airbnb China. “With more than 400 million Chinese millennials driving business and consumer trends, Airbnb is perfectly positioned to serve the Chinese market. The opportunity for us is huge.”

Over the past year, Airbnb has launched a series of new initiatives in the Chinese market including in-home inspection services and host education programmes.

The next 12 months will see the company focus on broadening its customer support operations by hiring 150 new staff and investing heavily in popular Chinese social media platforms like WeChat and Weibo. The hope is that 2018 will be the year that Airbnb hits the mainstream in the world’s most populous country.

“The more people who put their flats on Airbnb, the more attractive it is for potential renters. There are economies of scale and these kinds of network effects fuel the

$1.2tr Projected value of Chinese tourism by 2020

$4bn

Number of trips taken inside China in 2015

growth of these digital platforms,” says Annabelle Gawer, professor of digital economy at the University of Surrey and co-director of the Centre for Digital Economy in the UK. “It’s essentially for these platforms to have a really large user base. China is a huge country, which makes it an extremely attractive market because of the sheer size of the population.”

Airbnb isn’t the first tech firm from Silicon Valley to turn its attention towards China’s increasingly affluent population.

Both Google and Facebook offered services behind the Great Firewall until censorship and increasingly protectionist policies made their business models unsustainable. Both companies have flirted with the idea of re-entering China, but so far neither has had the confidence to take the plunge and compete with local tech giants like Tencent, Alibaba and WeChat, who now dominate the Chinese internet.

In 2014, ride-sharing app Uber made an ambitious move into China, which saw them providing lifts across the country’s

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“There’s a bright future for China’s sharing economy as Chinese millennials conduct their affairs online and value the environment”

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60 biggest cities. However, after two years of fierce competition, it failed to achieve its target of a 30 per cent market share and was sold off to local rival Didi Chuxing in a deal worth $35 billion. If Airbnb wishes to learn the lessons from other companies who have gambled on China, it needs to have a firm strategy in place for how it will capture loyalty from the country’s 721 million internet users.

“Global companies see potential because China’s economy is amongst the strongest

in the world. Its middle class is the largest in the world, and its consumer spending has been growing in double digit percentages every year for the last couple of decades,” says Ann Lee, adjunct professor of economics and finance at New York University and author of the international bestseller What the US Can Learn from China.

“International travel is growing rapidly amongst young adults in China and Airbnb is in the perfect position to capture that market.”

Chinese travellers now take

more than 127 million trips each year, with key Airbnb markets such as France, Italy, Japan and the US featuring among their most visited destinations. When they depart from the insular internet behind the Great Firewall of China, they’re opened up to digital platforms that have long been banned in their homeland. Unlike Facebook and Google, however, Airbnb has never been censored by China’s strict internet police. This means that when Chinese tourists and business travellers return home, Airbnb works just as it did when they travelled abroad, and there’s nothing preventing them advertising their own home to guests.

“I believe there’s a very bright future for China’s sharing economy because its millennials have

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very progressive attitudes about environmentalism and conduct most of their affairs online,” says Lee. “The Chinese government promotes the sharing economy because of its benefits to the environment and its resources. But moving everything online also provides more transparency for transactions and enables the government to more efficiently collect taxes and crack down on black markets.”

There has been a surge of enthusiasm for the sharing economy in China, but getting it to work for investors hasn’t always been easy. In July 2017, a single sharing platform company, Sharing E Umbrella, lost its entire inventory of 300,000 umbrellas when users

failed to return them. Similarly, two bike sharing platforms, Wukong Bicycles and 3Vbike, were put out of business last year after each lost 90 per cent of their bicycles.

Despite setbacks like these, there is still a growing appetites for the sharing economy from homegrown Chinese startups – and one company Airbnb will definitely have heard of is TuJia. With headquarters in Beijing, Tujia has been offering holiday accommodation in the Chinese market since 2011 and will be Airbnb’s fiercest rival as the platform pursues its 2020 goal for China. Homegrown Tujia has the advantage of understanding the local market intimately and

Amount of tourism spending in 2015

$500bn 80,000 Number of Airbnb listings in China

Airbnb founder Brian Chesky

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it already integrates with all of the most popular Chinese social networks and payment platforms.

If Airbnb is to succeed in the world’s largest accommodation market, it’s going to have offer something that Tujia doesn’t.

“Tujia has raised $300 million in funding and is valued at $1.5 billion, which is still quite small compared to Airbnb. I think Airbnb has a good chance to succeed because they can offer to Chinese travellers an extensive set of apartments and locations all around the world, which Tujia can’t do,” says Gawer. “However, Airbnb risk failing if they don’t play their cards right with the government. If they come in as a Western company with a competitive mindset in China, fighting against local companies, they will not succeed.

The Chinese market has never reacted well to this.”

Around the world, many destinations have begun to crack down on sharing economy platforms. Berlin, Amsterdam and New York have all introduced legislation that places restrictions on the use of home-sharing marketplaces like Airbnb. If it is to succeed in China, it will have to be careful not to step on the toes of regulators. Airbnb understands that China is unlike other markets.

It has looked at the experiences of Uber, Google and Facebook and recognises that it must adapt its business model to local needs if it is to continue growing. If it can finally find success after a decade in the Chinese market, it seems like nothing will stop it from dominating the next decade of global travel.

AIRBNB’S COMPETITORS XIAOZHU Set up in 2012, Xiaozhu is Airbnb’s main competitor in China. The company says it has more than 100,000 listings and has been backed by, among others, Jack Ma’s Yunfeng Capital. Although

focused on China, it has listings in more than 400 locations around the world.

TUJIA Valued at more than $1.5 billion, Tujia has more than 650,000 listings in China

and in some (mainly Asian) overseas markets. The company plans to expand across Asia, in order to take advantage of China’s growing tourism market. Tujia is Airbnb’s biggest rival in the ultracompetitive hospitality market.

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UPFRONT / CLASSIC READ

Twelve Classic Tales from the World of Wall Street

by John Brooks

and Chrysler. Ford spent millions on a PR campaign, promising the American public the car would be the automotive way of the future. The car flopped, badly, and cost Ford more than $350 million. If there is a theme through Brooks’ book, it’s how each iconic company featured was

If there’s a theme in Brooks’ book it’s that how each iconic company featured was defined by a moment of infamy

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ublished in 1969, John Brooks’ collection of New Yorker business stories became a huge hit, illustrating that, as much as the general public likes to criticise Wall Street, high finance has always been a source of fascination. It helps that Brooks is a wonderful writer, with an eye for the inside-baseball terminology as well as the ability to approach his subjects like a critic. Although the book went out of print in the 1970s, recent years has seen it regain popularity, mainly due to Bill Gates. The Microsoft founder describes it

as his favourite business book (and says Warren Buffet feels the same way) and even published one of the book’s chapters on his website. That chapter – Xerox, Xerox, Xerox, Xerox – looks at the technologists who took huge risks to create the Xerox machine, with many Xerox employees putting their life savings into the development effort. That ultimately was an American success story and Brooks focuses on the failures too. The chapter called The Fate of Edsel examines the catastrophic attempt by Ford to develop a car that would compete with General Motors

defined by a particular moment of infamy. Brooks writes like a dream and gets inside the psyche of the companies he profiles.

He is a man who can talk to the people with and without power and it’s his countless off-therecord interviews that allow him to weave a dense tapestry.

He doesn’t just focus on companies, but on the very levers of financial power, lifting the curtain on some of the more arcane institutions, such as the Federal Reserve. That chapter, In Defense of Sterling, looks at the relationship between the Fed and the Bank of England, who, at the time, were running a substantial deficit. Brooks’ skill is that he can make the big picture personal and illuminate even the dryer aspects of international finance.

MIDDLE EAST START-UPS Iain Akerman discovers the businesses that are putting the Middle East on the entrepreneurial map

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hen Amazon completed its purchase of the Dubai-based e-commerce platform Souq.com in July last year, the region’s start-up community was beside itself. Here was a success story worth talking about. Proof that tech entrepreneurship had come of age in the Middle East and North Africa.

Amazon paid an estimated $600 million for Souq, a company that had begun life as a simple auction site back in 2005. For many, its sale signalled a turning point in the region’s startup economy. An economy that is currently in the throes of an unprecedented boom.

According to ArabNet’s The State of Digital Investments in MENA 2013-2016, $980 million was invested in tech start-ups in 2016 compared with $247 million in 2015. That figure is likely to break the billion-dollar mark this year. In total, 200 start-ups received funding in 2016, with the number of investors increasing from just 11 in 2009 to 145 by the end of 2016 – a figure that represents a tenfold increase in the number of investors in the Middle East and North Africa.

The amount of money involved is considerable, with the number of big-ticket investors on the rise.

Mohamed Alabbar, an Emirati billionaire and the founder and chairman of Emaar Properties, launched a $250 million growth fund with Middle East Venture Partners in September, promising to invest in innovative early-stage and growth-stage tech companies across the region. Last May, ST Ventures, a $500 million growth fund established

by Saudi Telecom, was launched to help grow the region’s “digital innovation eco-system”.

But it is not only venture capitalists who are fuelling entrepreneurship. Governments see innovation as a key driver of economic development.

In 2013, Lebanon’s Central Bank launched Circular 331, a $400 million initiative designed to boost investment in start-ups, while the Kuwait National Fund has dedicated $7 billion to supporting small and medium-sized enterprises (SMEs). In Saudi Arabia, an SME authority has been established and the kingdom’s Public Investment Fund has set aside $1 billion to provide SMEs access to capital.

The UAE meanwhile has consistently promoted and encouraged a spirit of entrepreneurialism, providing start-ups with a relatively favourable

regulatory framework, low taxes, and strong government support. It also presents start-ups with the best access to capital thanks to its status as the region’s financial centre.

“The start-up scene has matured over the past five years,” says Fawzi Rahal, managing director at Flat6Labs Beirut, a regional start-up accelerator.

“There’s more awareness, more players (investors, entrepreneurs, mentors, service providers) and there’s strong support from many governments across the region. There are also various activities

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Fuelling the boom is the region’s young, energetic and passionate population, who are voracious digital consumers

Dubai is one of the most tech-savvy cities in the region with a variety of tech incubators and venture funds

and events that bring all participants together.”

The centres of this boom are Dubai, Jeddah, Beirut and Cairo, with lesser but significant input from Amman, although Nadim Zaazaa, chief executive of the UK Lebanon Tech Hub, says there are no “centres” for entrepreneurship, only intersections. “The ones that place applied knowledge in fertile environments are the ones that are the most productive,” he says. “If you’re agile enough, that could be anywhere. Clusters such as the Beirut Digital District are definitely one good way to do it.

“Entrepreneurs in all emerging markets – MENA’s included – will deploy tech to leapfrog development stages. They will solve problems of healthcare, education, public services and access to finance among many others. And they will do so in fascinating ways that people in far more developed markets tend to overlook. Call them hacks if you wish.”

Fuelling this boom is the region’s predominantly young, energetic and passionate population.

Veracious consumers of all things digital, they have little loyalty or attachment to legacy systems and have wholeheartedly embraced the digital age, with Saudi Arabia one of the most digitally engaged societies in the world.

“Entrepreneurship has always been there, but the recent surge can be attributed to many things,” says Rahal. “Investors seeking other asset classes; the ease of being able to start a tech company now versus 10 years ago; the digitisation of the economy; the transformation of finance, health, transport, agriculture and commerce; and international aspirations.”

Within this environment there’s no shortage of entrepreneurs putting their ideas to the test.

Companies such as UAE-based Now Money, which utilises mobile banking technology to provide financial services to low-income migrant workers; Saudi Arabia’s doctor booking portal Sihatech; and the Abu Dhabi-based laundry app Washmen. Most have single-word names such as Proximie, Kamkalima, Instabug, Sawerly, Jumpsuite, Push-bots, Taskty, or InstaShop.

“There’s no shortage of potential talent,” says Zaazaa. “Most founders are first time entrepreneurs and lack experience building tech products. We

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“More universities, investors and corporates are stepping into the space, and that’s when the real innovation will kick in”

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at the hub experience this firsthand. Start-ups based in our Beirut office go through much more learning on the job than those in our London base. But the way they approach problems is fascinatingly different and that carries so much promise.”

There are success stories, of course. The GPSbased shipping app Fetchr has gathered funding of $52 million, music streaming platform Anghami now has more than 33 million users, while Kuwait-based food delivery start-up Carriage was acquired by Germany’s Delivery Hero for an undisclosed sum last year.

And then there’s Careem. Headquartered in Dubai, the ride-hailing service is the startup success story cited alongside Souq as both an inspiration and a contributor to the region’s start-up boom.“The region has a large young population with its share of problems, but as every entrepreneur knows, every problem is an opportunity,” says Mudassir Sheikha, chief executive and co-founder of Careem. “There are a lot of unmet needs in the region that were not catered to before, at least not in an affordable and convenient way. With the use of technology, the possibilities are endless. People who are starting to become bigger consumers of tech services now have different sets of preferences, which creates more opportunities for entrepreneurs.”

Founded in 2012 by Sheikha and Magnus Olsson, both previously management consultants, Careem is valued at $1 billion following a $350 million cash injection from Saudi Telecom and Japanese internet firm Rakuten in December 2016.

“You have to think big from day one and start with targeting a big problem and a big opportunity,” says Sheikha. “At the same time, you have

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Top and bottom: Arabnet has rapidly turned into the region’s biggest tech conference and networking event

to keep in mind that by launching a product, it won’t take off automatically. There’s a lot of hard work, feedback, curation and measurement that goes into it. You need to be able to measure something to improve it.

“Another significant part is to get the right people to be a part of your start-up. Even an amazing idea wouldn’t be viable without the right talent to execute it. A big part of achieving that is instilling the right values in your start-up. Everyone in your team needs to be aware of the ideals they should aspire towards and share the same mission.”

From modest beginnings, Careem now operates in 72 cities across the Middle East, North Africa and Pakistan, catering to 15 million customers served by more than 500,000 ‘captains’.

It’s a long way from the $1.7 million of seed funding raised in 2013 to help the company compete against the entrance of Uber into the UAE market.

“The biggest barrier facing local entrepreneurs is how to attract big regional capital to fund opportunities from the region, for the region,” says Sheikha.

“It really comes down to convincing investors of how massive the opportunity is, showing solid traction, building an awesome team, and just not giving up.

“While we’re used to regional investors looking outside the

Careem, a Dubai-based ride-sharing service, is hailed as one of the region’s biggest startup success stories

region, times are changing. The purchase of Souq

by Amazon was a landmark transaction and will surely compel investors to start looking at local opportunities as well. Even if they don’t at first, it’s no reason to give up. The key is to keep trying because once they start investing more in local start-ups, it will change the ecosystem in the region dramatically.”

At present that ecosystem is far from perfect, despite the boom, says Zaazaa. “The ecosystem is still nascent,” he says. “More universities, investors and corporates are stepping into this space. That’s when the real innovation will kick in, the more serious talent will flock to start-ups, and that’s when the ecosystem will grow.”

Each market has its pros and cons. There are also barriers to entry, all of which need to be patiently dismantled. Legal and regulatory systems are often cumbersome and con-fusing, education is frequently inadequate for the creation of a knowledge-based economy, and the costs of setting up can be unnecessarily high. All hinder progress.

The creation of a tech-enabled ecosystem is therefore of paramount importance, says Sana Bagersh, chief executive and managing director of Abu Dhabi-based BrandMoxie and founder of Tamakkan, an organisation that advises start-ups and entrepreneurs, with no single entity able to do this alone.

“What we need is a more integrated strategy, a concerted effort, and a systematic plan to build this environment,” says Bagersh. “Abu Dhabi and the UAE already have all the ingredients to create incredibly dynamic hubs, but we just need the vision, the commitment and the guidance to bring all the elements to work together. Right now we are all coming together organically.”

The UAE may offer the best infrastructure, safety, stability and access to capital, but has struggled with issues of bankruptcy and throws up arduous bureaucratic obstacles. The process of acquiring an employment visa, for example, lacks the type of elasticity needed to handle the needs

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of a start-up world, which favours short-term contracts that privilege flexibility over stability.

“In most places we’re starting to see tech ecosystems actively lobby governments for better environments to do business and for more openness,” says Zaazaa. “So governments are easing up those constraints to at least get out of the way of that growth. In Lebanon it was the internet speed, in the UAE it’s the bankruptcy laws. The only thing left to do is to raise more awareness and educate.”

There’s also a challenge of collective experience, says Omar Christidis, chief executive and founder of ArabNet, an events, media and research company focused on digital business and entrepreneurship.

“Tech demand is outpacing tech talent,” says Christidis. “We don’t have enough technologyexperienced people, especially in middle and senior management. We have a hard time finding experts with 10 to 15 years of experience since no one was working in digital marketing 10 to 15 years ago.

A Careem employee training new drivers in Saudi Arabia

“Tech demand is outpacing tech talent.

We don’t have enough techexperienced people at the moment”

“There are also some specific challenges to each market. In the GCC, there’s a culture of working for the government because people are used to taking stable prestigious government jobs.

Therefore, the challenge would be to push them to be risk takers. Lebanon has the challenge of infrastructure, since it doesn’t have the strongest internet connectivity.”

The Middle East and North Africa Talent Competitiveness Index (MTCI), a joint study

by INSEAD Business School, Google and the Centre for Economic Growth released in May last year, revealed that the UAE ranked in the top 20 of 118 countries globally for enabling, developing and retaining talent. However, it also showed that the UAE had one of the highest rates of ‘fear of failure’ and one of the lowest for entrepreneurial intention.

“There is absolutely a fear of failure in the UAE,” says Bagersh. “Arab culture still celebrates success and not effort, so children are programmed early to focus on grades rather

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Aabnet’s founder, Omar Christidis, Fawzi Rahal, the MD of a start-up seed programme in Beirut, and Careem’s co-founder and CEO, Mudassir Sheikha

than achievement. We need to counteract that in schools and homes. And there needs to be a culture of embracing entrepreneurs and making it easier from a regulatory and policy level, to encourage them to keep trying despite setbacks.

This means making it easier for SMEs to repay loans, to provide innovation grants, and to encourage big corporations to buy from small enterprises.

It is an entire culture change, and when it happens it will significantly spur entrepreneurship growth.”

In Lebanon, poor internet and the slow adoption of e-commerce are significant obstacles to entrepreneurship, as Anthony Tawil, co-founder of Shop Samra, a food delivery company specialising in homemade delicacies, explains. The company launched in December.

“We knew that e-commerce is picking up in the country, however the infrastructure for it was still complicated to set up,” says Tawil. “We still had to cater to a crowd that is not yet fully comfortable paying online, so we were only relying on cash-ondelivery as the initial payment method. This was also the easiest option, as setting up an online payment gateway on our website is still a complicated procedure with local banks, and is still considered quite expensive in terms of transaction fees and bank commission rates.

“Another barrier was the inclusion of the debit card machine when delivering our products.

Customers still had to pay in cash when the ham-

per was delivered to them, as adding a debit card machine is also complicated and requires a bit of time before we could get our hands on one, let alone that it is a bit expensive to acquire. There’s also the fact that PayPal is still not allowed in the country. There are other alternatives to it, but we opted for cash-on-delivery as a start because Lebanese are still rather reluctant to buy online, especially if the website or brand they are buying from is relatively new to them.”

Priorities for the future? Rahal rattles off a list of hopes: funding across all scales; mature entrepreneurs; intellectual property from the region; angel investors; regional start-ups going global; incentive schemes. All will help the region’s startup economies develop and hopefully prosper.

“Once the hype settles, this will separate the serious from the rest,” says Zaazaa. “Investors are already becoming far more savvy about what works from both tech and market perspectives.

More experienced people will join the growing start-ups. More people will come back from abroad to join this renaissance. Universities will open up to the changing market/industry needs, focusing more on applied research and nurturing talent differently. The management culture will become more open and mobile. And, most importantly, failure becomes more acceptable. It is no longer a question of whether all this will happen. It is a question of how soon.”

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THE NEW SPACE RACE

THE NEW SPACE RACE Lauren Razavi examines whether the rise of private space travel poses new problems over who owns the cosmos

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THE NEW SPACE RACE

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nly a generation ago, sending tourists into space and mining asteroids for resources were ideas reserved for the pages of science fiction novels. Fast forward to 2018, however, and a modern space age is rapidly emerging and it’s capturing the minds of entrepreneurs across the globe.

According to global investment firm Goldman Sachs, more than $13.3 billion has been invested in space startups worldwide since 2010.

Heavyweight investors such as Google, Fidelity and SoftBank are among those betting big on growth and innovation in this area.

But what has caused all this fervour over space and why has the proposition become so attractive to private companies? Going further, who regulates space and what are the most interesting developments to date?

The move from the exploration of space by governments to the exploitation of space by private companies has well and truly arrived this year – and the sector is brimming with ambitious new entrants eager to get in on the action. Some of the best known players include Elon Musk’s SpaceX, Jeff Bezos’s Blue Origin and Richard Branson’s Virgin Galactic. But it’s not billionaires alone who have high hopes for what outer space has to offer.

“In my opinion, there’s no more powerful driving force than pure commercial return in investment,” says Mike Lawton, founder and CEO of Oxford Space Systems, a space technology startup that specialises in next-generation deployable structures for the global satellite industry. “The commercial nature of being a private space company makes us more efficient than the government agencies of the past. It’s a race to see how quickly and cheaply we can develop this technology and achieve those important technical milestones that prove it’s fit for commercial rollout.”

Whether it’s launching small ‘cubesat’ satellites into orbit or figuring out how to extract resources worth trillions of dollars from passing asteroids, the buzz of commercial activity centred on outer space has produced a race to drive down costs and bring cheaper service options to market. The fierce competition between compa-

Virgin Galactic WhiteKnight2 carries SpaceShip2 for its first rocket powered flight

THE NEW SPACE RACE

“Competition between the independent companies tends to increase their performance. That’s just capitalism”

SpaceX rockets sit in Launch Complex 39 at the Kennedy Space Center

nies that are hoping to take advantage of the final frontier is gaining more momentum every day – and it’s offering notable benefits too.

“The existence of competition between independent companies tends to increase their performance. That’s just capitalism,” says Ian Crawford, who is professor of planetary science and astrobiology at Birkbeck College and vicepresident of the Royal Astronomical Society in London. “The private sector is quickly making access to space more efficient and the cost of getting things into space cheaper.”

Despite the perceived benefits and notable achievements of the private space industry so far, serious questions around the governance and ethics of exploring and exploiting space remain.

Some hold the view that commercialising space will exacerbate social inequalities here on Earth or create a new form of colonialism in space, while others believe the only way to make real progress is to trust in the power of market forces to stimulate the creativity and innovation needed to make humankind a space-faring civilisation.

On both sides of the argument, however, regulation is sure to play a crucial role.

“If you’re going to explore and exploit, for me it should first and foremost be for scientific advancement,” says Saskia Vermeylen, senior lecturer and chancellor’s fellow at the University of Strathclyde, whose work as a legal scholar focuses on the areas of property theory and resource frontiers. “Right now, we talk about exploiting space in the language of property rights – that it must be done within a framework of private ownership and exclusive access. This stems from the idea that companies won’t be interested in investing if they can’t recoup on those investments.”

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THE NEW SPACE RACE

Mike Lawton, CEO of Oxford Space Systems, a startup that focuses on next-generation deployable structures for the global satellite industry

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In the same vein of considering commercial motivations, one of the biggest debates in the burgeoning profession of space law is whether people or companies can legitimately use or own parts of outer space, as well as where the lines between these two concepts blur. At the moment, the main agreement that governs space activity is the Outer Space Treaty, which was crafted by the United Nations and signed by more than 100 countries back in 1967.

“One of the treaty’s key elements is the idea of prohibition on the appropriation of celestial bodies and outer space. Put simply: nobody can legally own a part of space,” says Dr Christopher J Newman, space law specialist and reader in public law at the University of Sunderland. “But to complicate matters, it also declares that outer space is free for use by all states. So these ideas of ‘ownership’ and ‘use’ are very important.”

When the US and the USSR were battling it out to become the first humans to land on the moon in 1960s, the relevant legislation was designed to regulate the activities of nation states, and was agreed and signed by nation states alone. This is because the idea of private companies having the capital required or the inclination to get involved in outer space just wasn’t on anybody’s radar back then. A key reason for this was financial. In 1973, the total cost of the Apollo programme was reported to be $25.4 billion, and in 1969, a single launch of its Saturn V launch vehicle cost around $375 million. Adjusted for inflation,

The main agreement that governs space activity is the Outer Space Treaty, which was signed in 1967

that latter figure is the equivalent of billions of US dollars in today’s money.

Now, in the 21st centur y, most countries have their own laws with regard to space activity. As a result, the Outer Space Treaty has been applied to private companies as it would be nation states, at least for the most part, provided these commercial players are compliant with the appropriate national regulators. This interpretation has been used to justify companies making use of and pursuing plans focused on profiting from space in recent years. But what actually constitutes ‘using’ and what constitutes ‘owning’ space is an ongoing debate.

“It’s clear that you can’t appropriate or claim ownership of a celestial body like the moon, Mars or an asteroid. But if you’re causing damage to an asteroid by mining resources from it, for example, does that count as ownership or use?” says Newman. “This is the fundamental discussion us space lawyers are faced with.

The idea of who owns what in space is definitely going to be a point of contention as more private players become involved.”

In 2015, then-US president Barack Obama introduced regulatory changes that guaranteed private companies the right to own, sell and profit from any resources they extracted from celestial bodies such as asteroids. This signalled a new chapter in space regulation, clarifying which specific actions were deemed acceptable in space by a national regulator. In August 2017, Luxembourg became the first European country to allow the ‘appropriation’ of space resources by commercial entities, hoping to remove regulatory uncertainty and attract new companies to its door. Now it seems only a matter of time before other countries follow suit.

The path towards a feat as ambitious as commercial spaceflight isn’t always smooth, and nobody knows this better than Virgin Galactic CEO Richard Branson. Back in 2014, a test run resulted in disaster when a rocket ship violently broke apart in mid-air, killing one pilot and severely injuring another. In the reports that followed, US aerospace authorities attributed the tragic incident to inadequate design safeguards, poor pilot training and lack of oversight.

The negative impact on public perception was significant. As BBC science editor David Shukman commented at the time: “This is clearly a massive setback to a company hoping to pioneer a new industry of space tourism.

Confidence is ever ything and this will not encourage the long list of celebrity and millionaire customers waiting for their first flight.”

THE NEW SPACE RACE

51 From top: SpaceX Falcon 9 rocket launches from Kennedy Space Center in June last year; Blue Origin, owned by Jeff Bezos, successfully carries out a test launch and landing in 2015; Bezos launches the Blue Origin New Shepard system last year

THE NEW SPACE RACE

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The space tourism game is certainly highstakes, but there are already a handful of people around the globe who have spent time in space recreationally. As you might expect, though, these early space tourists have had to pay a high price for their out-of-this-world vacations.

When American businessman and engineer Dennis Tito became the world’s first space tourist in 2001, for example, he paid approximately $ 20 million for his eight-day stay on board the International Space Station. More recently, Canadian billionaire Guy Laliberté – founder of the global circus company Cirque du Soleil – paid an estimated $40 million for his 11 days as a space tourist in 2009.

These days, however, the price tag of extraterrestrial breaks is dropping fast. So what will it be

The world’s first space tourist paid $20 million for his eight-day stay on the International Space Station

like to vacation away from Earth, and how quickly will doing so become the new normal?

“The notion of being a traveller in the stars really captures the imagination. The first steps into space tourism will likely be ‘near space’ – the area where it’s possible to see the stars and view the curvature of the Earth, but it’s technically not quite outer space – and that will happen very quickly,” Newman says. “Virgin Galactic, for example, are going to offer ‘suborbital flights’ where they don’t orbit the Earth, they just pop their nose into space and then pop down again. It wouldn’t surprise me to see those operating by 2020. From there, we may well see the rapid emergence of a commercial, domestic space tourism industry.”

Over the next decade, space tourism will shift from being the preserve of the ultra-rich and

THE NEW SPACE RACE

“We will see a steady drop in price of space travel so that eventually most people will be able to think about visiting space”

From top left: Buzz Aldrin during the first moon landing; a photo of Jupiter from Nasa’s Juno spacecraft in 2016; Nasa’s Orion crew testing a docking hatch; clouds on Jupiter’s surface

become much more accessible and affordable than ever before. Historically, space travel has been a high-risk activity that requires participants to be in good health and at their peak physical fitness.

Country music star and avid space enthusiast John Denver famously failed to complete the tests and training required for him to take a trip to space in the 1980s, while many aspiring astronauts have ultimately had to pursue alternative careers because of the stringent requirements of space-faring roles.

Newman believes this is one of the key aspects that will change as space tourism develops this century. “In the future, selection will be financial rather than being based on fitness or health criteria,” he says. “We’ll also see a steady price drop so that eventually it will be within the contemplation of most people to think about visiting space.”

Within a timeframe as short as a few generations, space travel could become as simple and seamless as flying between continents has become since the end of the Second World War. Some basic guidance that tells passengers what to do in the event of an emergency will still be required – much like when you get on board an aircraft now – but the days of specialised training to become a pilot and then an astronaut in order to visit space will be gone. In essence, anybody who has the money will be able to do it.

“It’s like the early days of aircraft. When they started allowing the paying public onboard, it transformed the aircraft and air transportation industry,” says Lawton. “It’s going to be a real pivotal moment for mankind and for tourism to have these first-ever paying customers on board a spacecraft.”

The next couple of years are set to be significant for the space industry. In 2018, Nasa will send astronauts into space on privately-made spacecraft for the first time, thanks to partnerships with SpaceX and Boeing. Meanwhile, Virgin Galactic aims to offer its first commercial flights at some point this year and is so far on track to do so. US president Donald Trump has already announced his intention to achieve the country’s first manned mission to the moon in more than four decades by the year 2020.

As the whole world looks towards the possibilities of the final frontier, there are as many questions as answers. But the notion of building otherworldly new businesses and shaping the products and services needed for humanity to become a space-faring civilisation is certainly an exciting challenge for our times.

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BOARDROOM PHILOSOPHY

Does an ancient philosophy hold the secrets to better, happier modern living? Gary Evans puts its principles into practice and finds out how top CEOs use them to get an edge in business

I

wake up in the dark. I get out of bed and go into the living room and sit down on the sofa.

I leave the light off. An old apartment, nice big windows, but freezing cold this time of year. I think about the day ahead: deadlines loom, an inconvenient visitor will call, I need to chase money owed for work done a while ago.

Now I picture myself part of a circle: my girlfriend in the next room, family, friends, the circle grows, includes neighbours, the city, the country, bigger still, the whole of humanity, nature, the universe.

It’s still half-dark and I imagine the worst. Say, I lose my job – no great stretch, since I’m a freelance writer. Without work, I can’t pay my bills, have to move apartments, lose my nice big windows. What if something else happens, catastrophe, a thing worse than losing my job? I read the quote noted in my notebook the night before: “It’s not events, but our opinion about events, that cause us suffering.”

I reread it, think it over. I put the coffee on. Birds sing songs in the trees. Through the windows winter sun slides in low and golden.

Every day this week I’ll do the same: travel into the future, see how cosmologically insignificant I am, and envision my own death.

This practice, thousands of years old, propped up the lives of some of the most powerful people in history. It helped humans survive through inhumane times. More recently, it earned a cult following in the boardrooms of big business.

“The essential premise of Stoicism,” Ryan Holiday says, “is that individuals control very little about the world around us – but what we do control is our response to that world. That’s shockingly close to the job description of a CEO or an investor or an entrepreneur.”

This ancient philosophy first got going in Athens in the 3rd century BC. I quickly learn the names of the big three Stoics: Epictetus, Seneca and Marcus Aurelius. Stoicism has had a revival in recent years, revived by the books and blogs of modern Stoics like Holiday.

Most people think philosophy isn’t for them, Holiday says. Too esoteric, too stuffy. He wanted to show those people practical examples of Stoicism at work to prove how it could improve their lives.

Stoicism has three parts to it: the metaphysical, the logical, the ethical. Holiday and modern Stoics mainly focus on this last bit, on trying to achieve what the ancient Stoics called “a good flow of life”.

Holiday has published several books adapting Stoic principles to modern life. His examples of people who put these principles to work include everyone from Amelia Earhart and Barack Obama to John D Rockefeller and Steve Jobs. The Obstacle Is the Way: The Timeless Art of Turning Trials into

Triumphs sold more than a quarter of a million copies and gained a cult following among actors and rappers and particularly NFL coaches.

But it’s among business leaders that the Stoicism revival appears strongest. Apparently, they’re all at it; Elon Musk, Jeff Bezos, Bill Gates, Warren Buffett, billionaires who manage their billions by employing Stoic principles. “They don’t control whether the market goes up or down,” Holiday says. “Whether this happens or that happens. But their job – and their income – is dependent on making the most of all of it.”

“One of the four cardinal virtues of stoicism is justice. The others are practical wisdom, courage and temperance”

Ryan Holiday’s bestselling book on stoicism, whic has been embraced

by CEOs and athletes

Can this ancient philosophy really hold the secret to better, happier more successful modern living? I decide to spend a week as practising Stoic.

This is how my Oxford Dictionary defines Stoic: “A person who can endure pain or hardship without showing their feelings or complaining.” I am English, a northerner, working-class. Surely it doesn’t get more Stoic, more stiff-upper lip than that?

“That’s a big misconception about Stoicism,” says Massimo Pigliucci, professor of philosophy at the City College of New York. “It comes from confusing Stoicism the philosophy with stoicism the attitude of going through life with a stiff upper lip.”

“One of the four cardinal virtues of Stoicism is justice – the others are practical wisdom, courage, and temperance. It means that we have a duty as human beings to use reason to improve society, in any way possible. And one of the fundamental doctrines of Stoicism was that of cosmopolitanism, the idea that we are all brothers and sisters, from our close relatives to strangers who live on the other side of the world.”

Modern Stoics are always referencing an essay Pigliucci wrote for The New York Times describing his daily routine as a newly practising Stoic, the routine I follow.

It goes like this: when picturing the day ahead, think about the four cardinal virtues, which one you need for each of the day’s tasks (practical wisdom for the deadlines, temperance for the inconvenient visitor, practical wisdom and temperance and justice when it comes to people who owe you money, and so on). For his “growing

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circle of concern” – an exercise called Hierocles’ circle – he sometimes uses Google Street View and Google Earth and moves from an image of his home to an image of the whole planet. About the next thing, catastrophe, he writes that it may end up with you picturing your own death and that “novices may find this last exercise emotionally disturbing”. I did and it was. This can’t be a healthy way to start your day, surely?

“Practising Stoicism is like going to the gym,” Pigliucci tells me. “It requires constant work, effort, and focus. And the results are pretty much proportional.” He elaborates on his four years studying the philosophy in his latest book How to Be a Stoic: Using Ancient Philosophy to Live a Modern Life. Stoicism makes him feel more “serene”.

Friends and family say he’s “less irritable or prone to anger”. And a Stoic quote inspired him to get in touch with the brother he’d fallen out with.

Still, a bit joyless, isn’t it? And all this stuff about circles of concern, serenity – sounds wishywashy to me, almost New Age. I want hard evidence, facts and figures. Pigliucci tells me to speak to a man named Tim LeBon. LeBon works as a cognitive-behavioural therapist in a private practice and for the NHS in London. His bio also shows he’s a registered existential therapist and philosophical counsellor.

Stoicism strongly influenced the creators of cognitive-behavioural therapy – changing the way patients think and behave – which is now the most widely used practice to improve anxiety, depression, and other mental health problems.

LeBon’s pilot studies found Stoicism measurably improves well-being: “This was the case no matter how we measured well-being,” he says. “Be it presence of positive emotions, absence of negative emotions, finding life meaningful. This was interesting, because many sceptics would have said that being more Stoic would not lead to more joy – yet it seems that it does.”

In one study, LeBon and the team at Modern Stoicism (modernstoicism.com) found participants who practised Stoicism for one week reported a 14 per cent improvement in life satisfaction, a nine per cent increase in positive emotions, and an 11 per cent decrease in negative emotions. Optimism increased by 18 per cent. Asked whether it made them a better, wiser person, 56 per cent of participants gave themselves a mark of 80 per cent or more.

Halfway through my week as a Stoic and this thing happens: my laptop charger stops working and my laptop battery quickly runs out. All my work’s on there, my interviews. It’s a public holiday and I have no way getting a new charger for a couple of days. It’s a problem. Normally, I’d react

Sokrates, Antisthenes, Chrysippos, Epikouros

A bust of Marcus Aurelius

People who practised stoicism reported a 14 per cent increase in life satisfaction

with some colourful, northern, working-class language. Not this time. The quote in my notebook: “It’s not events, but our opinion about events, that cause us suffering.” That’s Epictetus. I’m not entirely comfortable with cosmological insignificance and death, but at least I’m not swearing at inanimate objects.

This is what we talk about when we talk about modern Stoicism, LeBon says: “Paying attention to your thinking and focusing only on what you can control, trying to do the right thing.”

Do the right thing? It seems certain business leaders are picking out the bits of Stoicism they like and overlooking the bits they don’t. A recent analysis by the UK’s Equality Trust found your average FTSE chief executive earns 386 times more than a worker on the national living wage.

But maybe executives feel they have no control

BOARDROOM CULT

over that. Bosses earn more than workers. That’s the way it’s always been. Stoicism is a philosophy that condones inaction, doesn’t it?

“Gandhi has been compared with the Stoics,” John Sellars says. “He was not known for his inaction.” Sellars teaches philosophy at University of London. He says there’s nothing wrong with making money, but not at the cost of “maintaining a decent, virtuous character”. Some people have bought into the “macho rhetoric” found in parts of ancient Stoicism – more to do with the era than the philosophy itself – and it is possible to take

Top: The two quotes read ‘Only the just man enjoys peace of mind’ by Epicurus and ‘Every place is safe to him who lives with justice’ by Epictetus Above: Ryan Holiday

Stoic ideas and use them in a non-Stoic way.

“All those online articles that say that Stoicism will make you more effective, tougher, successful, and so on, are fine to a point,” Sellars says. “But they miss something important about Stoicism if they continue to present a successful life as one primarily shaped by external, material achievements.

“If business people want to lear n from Stoicism, then the real take-home lesson is that behaving decently ought never to be compromised for the sake of a quick profit.”

It’s comes back to what Massimo Pigliucci said about justice and temperance.“A duty as human beings to use reason to improve society,” is how he put it. I get back in touch with Ryan Holiday, who writes the sort of articles Sellars is talking about.

He’s a confusing fella, Holiday. He dropped out of college at 19, apprenticed under Robert Greene, the self-help guru known as the modern Machiavelli, then at 21 became director of marketing at American Apparel, the scandal-plagued clothing company.

He’s published as many books on marketing as he has on philosophy.

In Trust Me, I’m Lying: Confessions of a Media Manipulator, Holiday described how he quickly and cheaply drummed up nationwide attention for various clients. Example: he set up groups to boycott a film he was promoting, anonymously called authorities to complain about adverts he’d designed himself, leaked the complaints to

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BOARDROOM CULT

Below: Martin Luther King was an exponent of stoicism. Right: The death of Stoic Roman philosopher, dramatist and statesman Seneca the Younger

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blogs, then entered and won a competition to be the first person to send in a picture of a defaced ad in Chicago, a picture he’d taken in New York, before the Chicago Transit Authority banned the ads from its buses. He’s bought traffic for blog posts. He’s set up fake Twitter accounts. He’s paid for “anti-woman ads on feminist websites”.

Holiday wrote: “The most powerful predictor of what spreads online is anger.”

Holiday now lives on a ranch in rural Texas and writes philosophical blog posts about how we should all get off the internet to avoid “getting caught up in things that are designed to exploit and antagonise us and our emotions”. But he also runs a “creative advisory firm” called Brass Check, still seemingly up to his old tricks, promoting his clients by exploiting and antagonising our emotions. He said about popularising Stoicism in a New York Times profile: “We’ve only captured a very small fraction of the potential market.” The writer of that article described him as “a snake-oil salesman who swears he has abandoned snake oil, but not the highly effective sales tactics”. Holiday is the poster boy for CEO Stoicism.

I want to know how he balances these two diametrically opposite ways of living. He points out that Seneca worked as advisor to Nero, a murderous monster even by the standards of Roman emperors: “Talk about compartmentalisation! The

Nelson Mandela was into stoicism.

It’s not just a belief system for tech CEOs

idea is that the world isn’t perfect, nor do we necessarily choose the talents we’re born with or the realities of the market. But we can still be the very best of ourselves within those industries – and hopefully make them a little better in the process.”

I’m not convinced. And didn’t Seneca die because he got too mixed up in Nero’s dirty business? Christopher Gill is professor of ancient thought at the University of Exeter and a member of the Modern Stoicism team. He says I’m looking at this all wrong. Who cares if CEOs and entrepreneurs are attracted to Stoicism? There are people who are neither of these. Nelson Mandela was into Stoicism. Martin Luther King lived by Stoic principles. Stoicism can and should make a real difference.

“It offers the idea that nature expresses provi-

BOARDROOM CULT

READ LIKE A STOIC A beginner’s guide to Stoicism WHO: Seneca, Roman statesman and one of the big three Stoics.

BOOK: On the Shortness of Life.

WHAT: A short essay in the form of letter that will get you using time more wisely.

QUOTE: ‘It is not that we have a short time to live, but that we waste a lot of it.’

WHO: Marcus Aurelius, a big three Stoic and a Roman emperor.

BOOK: Meditations.

WHAT: The private philosophical journal of the most powerful man in the world.

QUOTE: ‘Dwell on the beauty of life. Watch the stars, and see yourself running with them.’

WHO: Epictetus, slave turned teacher, the least accessible, but most rewarding of the big three.

BOOK: Enchiridion.

WHAT: Stoic advice as noted down by one of Epictetus’s students.

dential care for all the elements within it, and that humans should respond by exercising providential care as well – two very valuable ideas without obvious parallels in modern thought. I have suggested that for modern purposes we might want to modify the Stoic view, so that we conclude that we should exercise providential care for animals and the natural environment and not just humans.”

But isn’t this the same thing as CEO Stoicism, working with the ideas you like, hacking the ones you don’t? “You are right that this modifies Stoic ideas for modern purposes,” Gill says. “But the modification is coherent with the main lines of Stoicism, while also adapting it to the modern situation – the environmental crisis that we have largely created and that the Stoics did not know.”

QUOTE: ‘Whoever would be free, let him wish for nothing, let him decline nothing that depends on others, else he must necessarily be a slave.’

WHO: Ryan Holiday, perhaps the most prominent modern Stoic.

BOOK: The Obstacle Is the Way: The Timeless Art of Turning Trials into Triumph.

WHAT: A Stoic guide to modern life that gained a cult following among NFL coaches.

QUOTE: ‘Focus on the moment, not the monsters that may or may not be up ahead.’

WHO: Massimo Pigliucci, the most influential modern Stoic.

BOOK: How to Be a Stoic: Using Ancient Philosophy to Live a Modern Life.

WHAT: Modern Stoicism’s best book.

QUOTE: ‘Stoicism is not about suppressing or hiding emotion – rather, it is about acknowledging our emotions.’

Gill gives me the best and most concise definition of Stoicism: “We have the basis for happiness in our hands.”

What’ve I learned from a week as a Stoic?

Stoicism and Stoic ethics have survived 2,000 years of interrogation for good reason. Most of life’s problems, I think, come from being out of time. Humans are a couple of million years old.

We lived one way for most of that time and now we live another, very different way. We’ve got analogue problems in a digital age. We’re monkeys wearing virtual reality headsets and we wonder why we’re confused. Stoicism succeeds where contemporary self-help strategies fail: it is an ancient machine for operating an ancient animal in modern times.

To some, Stoicism is a life-hack. It’s a quote on Twitter, an edge on Wall Street, an excuse to behave badly in Silicon Valley. So what? “It’s not events, but our opinion about events, that cause us suffering.” Put the coffee on, hear the birds sing, watch the sun come up.

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PARIS CALLING David Whelan examines whether Paris can profit from London’s exit from the EU

PARIS CALLING

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aris is emerging. It’s funny to be saying that in February 2018, but it’s true – a city famed for everything from high-culture, world art and some of the finest food is having a moment. It’s no coincidence this is coming just over a year after Britain’s referendum on the EU. London has often eclipsed the City of Light.

Separated by only 300 miles, the two great capitals of Europe had charged down different paths in recent years, with London taking the majority of the financial world, and Paris doubling down on fashion, taste and flair. Money talks, and the most money flowed into and out of London. No longer: London is, despite the best wishes of the majority of its voters, departing the European Union, and Paris, like a well-dressed if slightly more flamboyant older brother, is hoping to take up the inheritance. The financial hub of the world is moving – and Paris is waiting.

Be asked to think of Paris and it would not be unfair to suggest that the mind wanders to scenes of beautifully dressed people sipping coffee in street-side cafes and discussing the latest gallery openings. Paris is the zenith of chic, civilised cities – where erudite novelists such as Julio Cortazar brushed shoulders with Pablo Picasso. It’s certainly a nostalgic image, but one not entirely in line with reality. Taxes in Paris are notoriously high, its Labour Code a whopping 3,324 pages long and most Parisiens are embarrassed by public displays of personal wealth.

It’s traditionally a city for the artist, the subsidised, the everyone – venture capitalists, investment bankers and consultants are almost dirty words. Far better to be an artist, far better to not tell anyone about that Sorbonne degree, far better to take to the streets the moment someone attempts to alter the union laws.

Taxes in Paris are notoriously high and most Parisiens are embarrassed by public displays of wealth

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PARIS CALLING

Left: Emmanuel Macron Below: François Hollande

The revamp, however, has begun. Emmanuel Macron, France’s president, is straight from high-end business and has made economic revitalisation a priority – starting, of course, with burning to the ground previously held assumptions of France life. On September 22, 2017, Macron put pen to paper on new laws to make it easier for companies to hire and fire, smooth out interactions between employees and employers and reduce the strength of collectivisation of workforces. This, naturally, has made Paris more like London – where businesses are used to hiring people on long-term contracts, and relieving them when the situation is adequate. Nothing like this has ever been seen in the Fifth Republic.

Such examples of current law include companies limiting the size of their workforce to avoid more restrictive regulations. Another positive for business, France’s deeply intimidating wealth-tax, has been altered. From January 1, 2018, international buyers of property will no longer be held accountable to the same rules – which will usher in a London-like property boom and, of course, make it far easier for businesses that relocate to promote the city.

Other aspects of France are chang ing.

Corporation tax is in the process of lowering from 33 per cent to 25 per cent, and income derived from dividends and interest will soon be taxed at 30 per cent. There is also Macron’s famed ‘tech visa’, designed to battle against France’s traditionally robust stance against start-ups. This visa allows French companies to hire international talent more easily, as well as encourage entrepreneurs to choose the capital as their new hub. Next on the agenda will surely be to battle against London’s huge lead in venture capital fund raising. London raised $764 million in the first quarter of 2017 compared to $283 million raised in Paris.

Despite this, the pull of Paris could be great. It is by far the largest and most powerful capital city in the running to replace London, as well as a traditional leader in equities, corporate bonds and asset management. Paris is also a welcoming city for Islamic banking, and sukuk issuances, as well as a leader of financing green infrastructure. Fast-forward to 2024 and there is the little issue of the Olympics, which boasts an $8 billion cash injection into the city.

Outside of Paris, other news sounds encouraging. Over half of the UK’s skilled EU immigrant workers are considering leaving the country after Brexit, a June 2017 survey by Deloitte found, and in the very same month, Paris opened Station F, the world’s largest start-up campus, set in an old railway depot in Paris’s 13th arrondissement. A veritable zoo of entrepreneurs, Station F is a state-

It’s easier for international buyers to purchase property, which will usher in a London-style boom

ment of intent – boasting roughly 34,000 square metres of space that will host 1,000 start ups. In one single swoop, Paris overshadowed Europe’s other two great tech hubs, London’s Google Campus and Berlin’s Silicon Roundabout. It already has agreements with the likes of Microsoft, Facebook, HEC, Haver and Ubisoft to run programmes for aspirational companies. Station F director Roxanne Varza has said that this “really captures the state of the French ecosystem at the moment”. It has, of course, formed outside a microcosm. “Perhaps with Brexit, Donald Trump and high prices in Silicon Valley the French ecosystem feels it now has a new role to play – especially with president Macron’s recent election.

Station F is just going to accelerate what is already going on,” she says.

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PARIS CALLING

This is a far cry from the France of old. Back in 2012, the now maligned president Francoise Hollande popularly stated: “My enemy is the world of finance.” Now, Paris is trying to get cosy with the enemy. Macron has jumped across the lines – during his campaign for election, he visited London multiple times to woo back the 400,000 French residents with promises of a new, innovative future.

Even the very day of the EU Referendum was matched by a Parisian PR campaign – with Paris Region Enterprises paying for a ‘Choose Paris Region’ advert on multiple choice websites. A letter campaign followed. In February 2017, the 37th floor of London’s Shard was rented out to accommodate a gigantic meet and greet of 80 business executives and Paris’s financial and political elite. A sustained, overt and persuasive campaign was well underway.

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SBC have been one of the first and largest companies to state an intention to look at Paris. Back in July 2017, chief executive Stuart Gulliver obser ved that roughly 1,000 jobs conducted in London would be deemed illegal under a ‘hard’ Brexit, and, perhaps more encouragingly for Paris, he referred to Macron’s political and economic plans as “very encouraging”. Bank of America is planning to move at least 300 employees to Paris. These numbers are, at the moment, quite small, but it’s fair to say that HSBC may mean business – and when one of the world’s largest banks moves, others follow. Money, after all, makes money.

The French finance ministry opened the brainstorming office The Bercy Lab in October of last year, where civil servants and business executives meet to create and enact wide-ranging policies to help improve the working environment throughout the country. There is, of course, the flipside of this – that Brexit negotiations may end up resulting in a protective law for the financial sector. Originally, JP Morgan predicted 4,000 job losses but, after recent negotiations, it’s looking more like 700. It is not as if cities like Singapore, Hong Kong, Shanghai and New York flounder for not being part of the EU – there may be hungry cats among the pigeons, but there’s still a chance London has a trick or two up its wing. Luxembourg, another competitor, sits at 18th in the Global Financial Centres Index, the only other European city in the top 20, a huge 17 places below London. Being in Europe does not guarantee world-

domination. London has advantages that won’t change – its regulatory system is nationality-blind, and its court system is favourable to businesses.

Issues surround Paris’s great move. Of course, the beauty of Paris and its reputation as a gourmand’s dream present huge promise, but it is not flippant to point out that there will be a language barrier. Luxembourg, Dubin and Frankfurt, the chief competitors to London’s throne, do not possess that issue – either naturally English speaking cities or famed for their bilingual population, there is an unquantifiable element against Paris.

According to the Global Financial Centers Index, the number one element of attractiveness to business is English-language facilities. Without it, international recruitment becomes much harder.

Barclay’s, for example, has already announced its intention to turn to Dublin for its post-Brexit EU hub, while JP Morgan plans to spread its workforce across Dublin, Luxembourg and Frankfurt.

From Japan, Mizuho Services, Nomura and Daiwa plan to strengthen in Frankfurt. Morgan Stanley and Goldman Sachs, however, plan to move a few hundred employees to Paris.

The decisions, as of now, can and, most likely, will change – it’s about parachuting safely from London, before scouting out a new hub. But the early writing is on the wall – the competitors are a little ahead, with Paris playing catch up. Another issue with a Paris change is one less easy to pinpoint, because it runs in the blood of the country, through every vein. It’s one of collectivism, of believing in the whole over the singular.

The spirit of the Jacobin is alive and well in France – where the body and soul of the worker is inimitably guarded against the voracious onslaught of the capitalist machine. It’s why every single attempt to make the country more business friendly has been met by days of marches and protests; it’s why a BVA poll in September found that exactly 50 per cent of the country is against the changes.

Political parties in France are far more likely to be on either side of the spectrum than in Britain, where almost all major parties sit somewhere within the centre. This presents a more turbulent future

PARIS CALLING

HSBC has shown an interest in relocating to Paris after Brexit

picture than the one Macron may want to present.

A shift in favour could alter the trajectory of government far more drastically than in England. In July, for example, Philippe Martinez, leader of the far-left CGT, issued a rallying cry: “They’ve decided to break the code du travail. There will be fewer rights for workers.” The choice of words are key – it’s not about altering the law, or developing it, it’s about breaking. It’s about destroying something that has been part of France for over 200 years.

The future of Paris’s attempts to replace London lie in negotiating these entrenched ideals and presenting a long-term solution for everyone.

Whatever happens to London after Brexit, it is clear that Paris is making moves to alter itself

London’s loss might be Europe’s gain, with firms relocating across the continent

into something closer to its northern brother.

The process won’t be close to immediate – most experts agree that it will take at least a decade for clear signs of change to have revealed themselves – but it is going to happen.

Perhaps Paris will not become the new London but, instead, a variant on itself – a place that mixes tradition with forward thinking flair, and eloquence with sustained success. It seems that the most likely solution to this will be a broader spread of financial hubs across Europe, working in tandem – rather than the monolithic powerhouse we have now. Either way, we don’t have too long to find out – March 2019 is just a year way.

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WHA T NOW FOR BRITA IN? Jesse Ons a pos low Norto t-Bre xit lan n assesses dscap e

WHAT NOW FOR BRITAIN?

I

n 1947, when George Orwell reflected upon the lessons from the Second World War, he remarked: “A Socialist United States of Europe seems to me to be the only worthwhile political objective today.” At the time, the author’s sentiment reflected widespread disillusionment in Britain’s role on the international stage. No more could the tiny island nation compete with the rising powers of America, Russia and China, and no more could it continue to exert colonial power across the globe.

Today, the sentiment in Britain couldn’t be more different. The surprise EU referendum result in 2016 was driven by many different factors. Spiralling immigration, growing inequality and heavily strained public services each played a role in the decision to leave the EU. But for the 17.4 million people who voted for Brexit there was also a collective sense of loss of identity, importance and relevance on the world stage. Now the UK faces the uncertainty of determining how it can regain its international prestige.

“Brexit means taking back control of our borders, our money and our laws, as well as leaving the EU’s internal market, ending free movement of people, and ending the UK’s significant monetary payments to Brussels each year,” says Chloe Westley, campaign manager for the TaxPayers’ Alliance and social media manager for the Vote Leave campaign. “If we can achieve all of that and forge a new relationship with the EU based on cooperation and trade, then it will be a success.”

Until the UK formally withdraws from the trading bloc on March 29, 2019, there is very little the country can do to determine what its future trading relations will look like. The EU has ruled out negotiating a future trade deal in parallel to the current withdrawal talks, but has agreed to a 21-month transition period during which Britain can continue to trade as if it is in the Single Market.

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The UK now faces the uncertainty of determining how it can regain its prestige on the international stage

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WHAT NOW FOR BRITAIN?

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At the conclusion of the transition period, if no further trade deal is agreed, then it will default to World Trade Organisation (WTO) rules. This would mean that exports are subject to the same customs checks, tariffs and regulatory barriers that are currently charged on trade with countries outside the EU. Whether this happens or not depends entirely upon what concessions are made during the Brexit withdrawal negotiations.

“I think there is a real and present danger that we nominally leave the EU, the Single Market and the Customs Union, but in practice nothing very much changes,” says John Mills, founder of retail conglomerate JML and chair of the Labour Leave campaign. “I don’t think Brexit itself is a very big risk to Britain, but I do believe that the prospect of very slow growth could lead to stagnant wages as far ahead as we can see, and this is a very big problem in economic, social and political terms.”

Nearly 80 per cent of the UK economy is driven by the services sector. According to data from the Office of National Statistics, service exports to the EU account for more than a third of the country’s total exports. The Single Market enshrines the free movement of services between member states, but bilateral trade agreements are predominantly concerned with the movement of goods and capital. If the UK wishes to make a success of Brexit it may need to diversify its economy.

“The UK has a balance of payments deficit with the EU27, which is nearly six per cent of UK GDP. It is therefore completely unsustainable. We have to sell them more and import less, and I believe the only way we can do this is with a much more competitive exchange rate,” says Mills. “I think the solution lies in getting the UK economy less

Top left: Theresa May is under more pressure than any other modern British leader Above: Donald Tusk, president of the EU and Jean-Claude Juncker, president of the European Commission

dependent on services and re-orientating it towards manufacturing, so that we can pay our way in the world, which we are not doing at the moment.”

According to analysis of EU Commission figures

by Change Britain, a think tank in London, the UK could create more than 300,000 jobs in manufacturing and services by leaving the Customs Union and agreeing new trade agreements. The UK is the sixth largest economy in the world, with world leading financial, pharmaceutical and education sectors, but its global status could be at risk unless it is able to successfully negotiate new deals with major economies such as China, India and the US. “The EU has a very poor track record at negotiating free trade agreements, as 28 countries can barely decide on what to order for dinner, let alone all the conditions of a free trade agreement,” says Westley. “It has failed to negotiate a free trade agreement with China, the United States, Australia, New Zealand, and many other countries. By contrast, the UK should be able to

WHAT NOW FOR BRITAIN?

negotiate bilateral free trade agreements much faster than our European neighbours.”

Despite being more than 7,000 kilometres from the nearest Pacific port, trade across the world’s largest ocean could be pivotal in shaping the UK’s future. Liam Fox, head of the government’s Department for International Trade, has indicated that the UK wishes to join renewed talks for a Trans-Pacific Partnership. Following the withdrawal of the US from the draft negotiations in 2017, the 11 remaining member states, including China, Japan, Mexico, Australia and Canada, have resumed negotiations under a new name: The Comprehensive and Progressive Agreement f o r Tr a n s - Pa c i f i c Pa r t n e r s h i p ( C P T P P ) .

However, not everyone in Britain believes joining the CPTPP, or any other trade agreement, will be so straightforward.

“It’s complete codswallop. Basically, the Australian foreign minister has said that the priority for them will be to trade with the EU, not

“One of the most exciting things is the restoration of control over our rules and regulations”

with us,” says Eloise Todd, chairperson of bestforbritain.org, an online campaign that is seeking to reverse the Brexit decision. “If leaving the EU results in tariffs on supply chains it will have a major impact on our industries. Brexit could spell the end of the British car industry, and it’s misleading to say that it’s going to be fine.”

UK industries are already feeling the impact of Brexit. The head of the International Monetary Fund, Christine Lagarde, has said that discouraging Brexit negotiations have forced the global body to downgrade UK forecasts for productivity growth, business investment performance and overall GDP. But there’s one industry that is expected to suffer more than all the others.

During the half a century in which the UK has been part of the EU, London has established itself as the dominant force in European financial markets. In particular, the country’s $10 trillion asset management industry could be severely impacted if its financial passporting rights are not protected during Brexit negotiations. In response to this threat, some members of the ruling Conservative Party have called for UK to slash taxes in order to keep the country competitive.

“One of the most exciting opportunities is the restoration of control over rules and regulations. The EU has ultimate authority over the law of EU member states, which means that as long as the UK is a member, the government have to accept any directive or regulation introduced by EU institutions,” says Westley. “When we leave the EU, we will no longer have to take orders from the EU. Brexit provides the UK with the perfect opportunity to lower taxes and ease the burden of regulation on people and businesses.”

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WHAT NOW FOR BRITAIN?

FIVE POTENTIAL MODELS FOR POST-BREXIT BRITAIN Since the public voted to leave the EU on June 23, 2016, prime minister David Cameron has resigned, Scotland has renewed calls for another independence referendum, and a string of highprofile resignations have defined Theresa May’s new cabinet. To say that Brexit has unleashed chaos on British politics would be an understatement. Having lost their parliamentar y majority in a surprise election last summer, the ruling Conservative Party now face an uphill struggle to significantly reduce taxes in the face of a resurgent Labour opposition.

Before the UK government can even begin to determine what its future will look like, it must first finalise the withdrawal negotiations with the EU. Once a deal has been agreed in principal it will need to be voted upon in both houses of the UK parliament. What happens if parliament rejects the deal, however, remains unclear.

“We have until March 29th next year to figure out our future. If we want to change our minds, it’s legitimate for us to do so”

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“In terms of the EU negotiating process, we have until the March 29th next year to figure out our future. We are members of the EU until that date and if we want to change our minds, then it’s perfectly legitimate for us to do so,” says Todd. “If parliament votes against the final deal, there would probably be an outcry to put the deal to the people in a second referendum.”

After the upheaval of the first referendum result you’d expect the British to be reluctant to go to the polls again, but, surprisingly, there is growing parliamentary support for a second public vote on Brexit. A survey of party members conducted by the Mile End Institute at London’s Queen Mary University found that 78 per cent of Labour party members would vote in favour of allowing the public to vote on the final terms of the deal, along with more than 90 per cent of members for both the Liberal Democrats and the Scottish National Party.

It seems that Orwell’s dream for a Socialist United States of Europe lies in tatters for the

In 2018, as Britain conducts its most important international negotiations in more than a generation, there are five potential outcomes that will shape the nation’s future trading relations with the rest of the world. Each of these models is based on existing trading relations non-EU countries currently enjoy. The question is: where will Britain place itself on the global economic map?

Norway Model Norway is part of the European Economic Area (EEA) and is part of the Single Market, but is not a member state of the EU. It pays annual contributions to the EU and must comply with all of the regulations and standards without being represented in European Parliament.

If the UK wishes to replicate Norwegian relations with the EU, it must accept the essential freedoms of the Single Market: the free flow of goods, services and people.

This is seen by many in the UK as unacceptable, and prime minister Theresa May has effectively ruled out seeking this arrangement.

Switzerland Model

Turkey Model Like Switzerland, Turkey is not part of the EEA or the European Free Trade Association, but it does have a customs union with the EU. This ensures that there are no taxes or duties on industrial imports and exports.

However, under the Turkish model Britain would still have to apply the EU’s common external tariff on all trade with non-EU nations and it would have no say in determining how those tariffs are set.

Canada Model Canada spent seven years negotiating its unique access to European markets under the Comprehensive Economic and Trade Agreement (CETA). The deal eliminates the majority of trade tariffs and omits Canada from having to comply with most standards and regulations.

UK trade ministers have talked openly about wishing to replicate CETA in future trade relations with EU, but the deal only provides limited freedoms to the service sector. Crucially, the Canada Model would make no provisions for Britain’s substantial financial services and would not protect the passporting rights of London-based banks.

Singapore Model

Switzerland is located in the heart of Europe, but it is not a member state and is not part of the EEA. It does have limited access to the Single Market, meaning that most industries are governed by EU regulations and standards, but unique exceptions have been made for the Swiss banking and financial services.

For many pro-Leave campaigners, Singapore provides the most desirable model of what post-Brexit Britain should emulate.

The low tax, low regulation city state has been lauded by key figures such as foreign secretary Boris Johnson and Brexit secretary David Davis.

The Swiss relationship with the EU is defined by a staggering 120 distinct bilateral agreements that have been drafted over decades of negotiations. If the UK is to replicate this model, it must be prepared to become very familiar with the negotiating table in Brussels.

For the UK to become an Atlantic equivalent of the free trading Singapore, it could crash out of EU negotiations without a deal and revert to a WTO regime. But lowering UK taxes would not be an easy task in the face of the country’s popular left-wing opposition.

time-being. Britain’s future as a global leader of free trade remains as uncertain as ever. It faces the toughest two years of negotiations in more than a generation, in which it will struggle to rekindle the buccaneering spirit of its colonial past. Until then, the EU’s staunchest critic is straddling the exit door with one foot in and one foot out, hoping to not get hit too hard on the way out.

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City Limits The Upper House in Hong Kong

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LIVING / HOTEL

UPPER HOUSE

WHERE TO STAY

Hong Kong

PRICE From $600 per night

upperhouse.com

 HKG

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ew cities do boutique hotels better than Hong Kong, and The Upper House manages to raise the bar even further. With 100 rooms, it’s bigger than the average boutique offering, but never veers into the whimsy that many of the city’s hotels engage in. The interior is all sharp edges and fine lines, a modernist Chinese look courtesy of designer Andre Fu. The real winner here is the views: floor-to-ceiling windows capture the glories of the city’s skyline. The rooms are big too, certainly bigger than the average Hong Kong hotel room. Add in state-of-the-art technology (control your room’s temperature via an iPod Touch), impeccable service and huge bathrooms, and end up with one of Hong Kong’s most impressive hotels.

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FROM THE CONCIERGE

GO

Stanley, at the other side of Hong Kong Island, is a small fishing village with a laid-back vibe, perfect for escaping the chaos of downtown Hong Kong for the day.

Eat some fresh fish, walk along the nature trails or simply enjoy the sea air.

SEE

Temple Street Night Market in Kowloon is the last one of its kind. With everything from bootleg DVDs to fortune tellers and jade jewellery, it’s a treasure trove in the heart of the city.

EAT

The T’ang Court at the Langham is a Michelin-starred restaurant that adds a modern twist to Cantonese classics such as abalone peking duck. Worldclass service is to be expected as well as an excellent wine list.

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ISSUE 146

Leica camera A vintage piece of kit that has risen in value

1

Cameras with the box are worth more than those without. If the guarantee card is enclosed, the price will go higher again.

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Each Leica has its serial number stamped on the top plate. This will tell you when the camera was made and how many of that model were produced that year, the sort of information that collectors love.

3

Avoid cameras that use batteries. While the early self-winding models can still have their battery replaced, when those batteries stop being manufactured, those models will be rendered useless.

A

lthough cameras have become less common given the plethora of high-quality smartphones on the market, the best models can be a good investment. If you are looking at vintage cameras as an investment, you shouldn’t ignore Leica.

The German manufacturer has long been considered a maker of classic cameras – they invented the 35mm format and are considered the leading brand for collectible cameras. The M3, made in the 1950s, could have been bought for $400 in the 1980s; now they can go for more than $1,500. Cameras made between the 1920s and the 1960s, when handcrafted techniques were combined with the latest technology to create iconic equipment, are especially desirable. Interested investors should scour eBay, antiques stores and second-hand camera shops for the best bargains.

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What to pack ...for winter weather in Seoul and beyond

Average temp

0°c

Beijing Paris New York London

ALSO WEAR IN...

3°C 4°C 2°C 5°C

SEOUL

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Chance of rain: 20%

WHAT TO SEE

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CHEONGGYECHEON Although quite controversial before it opened in 2005, this 11-kilometre restored stream is a welcome slice of nature in the heart of the city. At a cost of $900 million, it wasn’t cheap, but quickly became a favourite among Seoul’s residents. Mornings see commuters and joggers vie for

space, while lunchtime sees the benches filled with office workers eating lunch. Evening see families and love birds descend in droves and it allows you to take in the scale of the city away from the traffic. Buy an ice-cream and watch the city’s population slow down in the heart of one of Asia’s most exciting cities.

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ACCESSORIES

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Saint Laurent stud-strap bi-fold pebbled-leather wallet $440 matchesfashion.com

Gucci men’s king snake-print duffel bag $581 neimanmarcus.com

Berluti nubuck gloves $665 mrporter.com

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1. Valentino camouflage-print hooded gabardine parka $2,650, matchesfashion.com 2. Fear of God faded skinny selvedge jeans $989, harveynichols.com 3. Rick Owens black oversized cotton top $494, harveynichols.com 4. Loro Piana shearling-trimmed quilted nylon down jacket $3,468, mrporter.com 5. John Lobb city II leather oxford shoes $1,084, matchesfashion.com 6. Tom Ford colorblock leather-suede runner sneaker $1,065, neimanmarcus.com

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What to pack ...for winter weather in Zagreb and beyond

Average temp

5°c

Warsaw Budapest Vienna Berlin

ALSO WEAR IN...

-1°C -3°C -3°C -1°C

ZAGREB

FEBRUARY

Chance of rain: 35%

WHAT TO SEE

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MEDVEDGRAD Medvedgrad is a beautifully preserved fortress on top of Medvednica mountain that offers spectacular views of the city. It’s also home to a site dedicated to Croatian soldiers who died in the Homeland war. The trek up the side of the mountain is beautiful,

albeit not for the faint-hearted, and there’s plenty of cafes and restaurants at the top, should you need to recuperate. If you don’t fancy the climb down, there’s a bus service to the bottom. Construction took five years and was completed in 1254, and it remains one of Zagreb’s must-see sights.

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1. ChloĂŠ asymmetric wool and cashmere coat $5,770, matchesfashion.com 2. Frame Denim le high skinny grey leather jeans $1,402, harveynichols.com 3. The Row maura silk-satin blouse $1,854, net-a-porter.com 4. Christian Louboutin fanny leather fur-trim red sole combat boot $2,147, neimanmarcus.com

ACCESSORIES

Dolce & Gabbana embellished texturedleather iPhone 7 case $536 net-a-porter.com

Saint Laurent quilted pebbled-leather wallet $707 matchesfashion.com

83 Aspinal of London the large cabin case $1,368 harveynichols.com

LIVING / FOOD

Taste of Thailand

B

angkok has rightly won a reputation for being one of the world’s best food cities. The Thai capital’s eclectic street food offering in particular attracts a clamour of locals and tourists alike to its cluttered sidewalks. Grabbing a tiny plastic stool and slurping on soup noodles cooked on a battered metal cart has become one of the great life-affirming dining experiences of our time. But recent years have seen a resurgence in Bangkok’s “four wall” restaurant scene, and at the forefront is David Thompson.

The Australian chef has been celebrated as one of the best cooks of Thai food in the world – although

BANGKOK, THAILAND

James Brennan meets one of the best Thai food chefs in the world as the country’s restaurant scene explodes

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BKK

David Thompson

speaking to him, you might not know it. He was presented with a Lifetime Achievement Award by Asia’s 50 Best Restaurants in 2016. But while he describes himself rather self-deprecatingly as “jaded and cynical”, you can tell deep down how chuffed he is with his lot.

Thompson’s original Nahm restaurant in London was the first Thai restaurant in the world to be awarded a Michelin star back in 2001. Frustrated by a lack of authentic Thai ingredients in the UK, he eventually relocated to the mother lode in 2010. Thompson lost his Michelin star, but it was a price worth paying to be among a cornucopia of fresh produce that only Bangkok could offer. Perhaps he knew all along that the Michelin guide would follow in his footsteps?

Nahm regained its Michelin star when the first red guide to Bangkok was launched with much fanfare in December last year. Thompson accepted the accolade with typical equanimity, saying: “It’s great for the kids and it’s good for the restaurant’s reputation, but we’re just doing what we do.”

Asia already has guides in Japan, South Korea, Hong Kong, China and Singapore, which begs the question: why has such a cauldron of culinary creativity as Bangkok been so late to the Michelin party? Does Michelin’s arrival in the City of Angels signal Bangkok’s coming of age as a restaurant city?

“Bangkok has always been a great eating city. Street food, traditional

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“Fifteen years ago Bangkok wasn’t that exciting and was full of second-rate cooks. That’s changed dramatically”

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food cooked at home – Thai food is one of the best cuisines without question,” says Thompson. “But when it came to restaurants, up until 10 or 15 years ago, it wasn’t that exciting. It was dull and clichéd and full of second rate cooks, really. That’s changed dramatically. It’s increasingly a more interesting restaurant city. The juggernaut of the 50 Best Awards that came rocking through here in the last two years, and now Michelin, are officially acknowledging that burgeoning restaurant scene.”

Of the 17 restaurants to receive stars, there were no three-star winners, but French restaurant Le Normandie, modern European restaurant Mezzaluna, and progressive Indian Gaggan all won two stars. Among the seven Thai restaurants to receive stars were Bo.lan (owned by husband and wife team Dylan Jones and Duangporn ‘Bo’ Songvisava, who met while working at Nahm London), and Chim by Siam Wisdom, whose chef Thaninthorn ‘Noom’ Chantrawan found fame on the Iron Chef Thailand TV show.

But the real headline grabber was a 72-year-old goggle-wearing street food seller called Jay Fai (Auntie Fai), whose wok-fried crab omelettes have been wowing plastic stool-grabbing locals for years. Her award followed widespread reports that local authorities would be clamping down on Bangkok’s famous street food vendors. At a time when the rest of the world is embracing food trucks, it seemed crazy for the world’s best street food city to bundle its vendors off the streets. But according to Thompson, Bangkok’s alleged street food ban has been kicked into the gutter.

“Street food ain’t going away,” he says, emphatically. “You can try to shut it down, but it’s like a mushroom, it will pop up anywhere. It was a stupid initiative on behalf of the Bangkok metropolitan administration, and I notice the government itself made no comment on that announcement. And since then there have been no further measures being passed to in any way curtail street food. It’s not going away.

There’s no way you can stop Thais eating on the street.”

Thompson rejects the idea that moving street vendors into so-called hawker centres, like in Singapore, would clear the way for more Michelin gongs (restaurants require a fixed address to be awarded stars): “It would be such a political faux pas, it would be akin to something Donald Trump would do.”

But while commentators in the West

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seem enchanted by Asia’s Michelin-star winning street-food vendors, there are mixed reactions from the recipients themselves. It has been reported that Jay Fai now wishes to return her star. Her newfound fame, it seems, has attracted crowds of selfie-snapping tourists, pushy journalists and one or two nosy tax inspectors. Speaking to Eater, she said: “I wish I could give the star back already.

Many people come just to see and take

pictures and not necessarily to eat.”

Though a dedicated eater and lover of Thai street food, David Thompson is sceptical about its relationship with Michelin. “The idea of Michelin street food is a mismarriage,” he says. “While the quality of dishes is there, all the other things associated with Michelin stars ain’t there on the streets. You can’t call a plastic stool and a Formica table with plastic plates Michelin, can you?”

I get the impression Thompson feels Thai street food should be left alone to evolve in its own way. But when he talks about the new wave of Thai chefs who are transforming the restaurant scene, he talks with passion. He reels off names of restaurants almost too quickly for me to catch, places such as Bangkok’s 80/20, and Blackitch Artisan Kitchen in the northern city of Chiang Mai. “There’s a really interesting movement of young chefs coming through that I find quite fascinating,” he says. “Most of them are Thais, but there are one or two westerners.

They are about 28-35, and they’re cooking some very interesting food.”

One of the reasons Thompson cites for Bangkok’s restaurant renaissance is the apparent ease of getting started there. “London, New York or Sydney is expensive, so you need a riskless formula. Whereas here in Bangkok you can set up for as little as $200-300,000, which means far more people are opening up places and doing interesting things. This is one of the last frontiers where you have individuals with initiative opening up.”

Indeed, Thompson’s friend and fellow award-winning chef Gaggan Anand was born in Kolkata, but came to Bangkok to experiment with his progressive Indian food. Several years and two Michelin stars later, Anand posted a picture of Thompson and himself on Instagram.

He wrote: “2010. Two chefs began a movement in Bangkok… from street food we suddenly had restaurants making news internationally. In just 8 years look how far we have gone.”

Meanwhile, Thompson is looking to the new generation of chefs for the next chapter in Bangkok’s gastronomic story: “You have Thais who have travelled the world and have returned with their experience. And westerners who could work anywhere in the world, but choose to live in the City of Angels – and with good reason, because it’s a wonderful city.”

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California dreamin’ SF MoMA showcases Californian design

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he exhibition Designed in California focuses on the shifting design landscape of California after the digital revolution. Retreating from the commercialism of Modernism’s “good design for all”, California designers in the 1960s and ’70s sought to design with more political, social and

environmental awareness, as seen in the multimedia presentations of Ray and Charles Eames and AntFarm, and in the pages of the Whole Earth Catalog. A shared desire to empower the individual led to designs for “dropping out”, such as North Face’s tents and Chouinard’s climbing equipment, as well as the creation of new tools for connected

living – from the first Apple desktop computer to now ubiquitous mobile devices. Works by Sha Design and D-Rev demonstrate a focus on social impact, and new household products by fuseproject and NewDealDesign foresee a world connected and improved by the Internet of Things.

Until May 27th, SFMOMA, sfmoma.org

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89 Clockwise from opposite: Eames office conference room (1944-89); Edith Heath, Studio Mug; Jason Short, Solo Drone (2015); The North Face, Oval Intention Tent (1976); Hartmut Esslinger, Prototype for Apple Macintosh touch-screen tablet (1984); Arthur Espenet Carpenter, wishbone chair (1970)

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LIVING / COLUMN

Crushing It

By Gary Vaynerchuck

L

ewis Howes knows the sound of a broken dream. For him, it was the snap of his wrist as he slammed against a wall during his second game as a professional arena football player. An AllAmerican football player and decathlete, Howes at first refused to accept that the injury meant he’d never play professional sports again. For six months as he recuperated from extensive surgery in a full-arm cast on his sister’s couch in Ohio, he held out hope that he’d recover enough to resume his athletic career. But after another year of trying and failing to rebuild the strength he’d once had in his arm, he had to accept that it was over. For a lot of people, it would have felt like the end. He’d already been bullied in school, where he had struggled to keep up due to dyslexia. Sports had been his refuge, and he’d dropped out of college to try out for the NFL. Now, despite all his efforts, he was left with nothing – no degree, no skills, and no money. And it was 2008, when even people with ample amounts of all three couldn’t find a job.

What Lewis did have, thanks to his athletic training, was a belief in himself. He started pondering the question: “What could I create if I could create anything in the world?” He already knew what it felt like to get paid to do something he loved, so there was no question of taking any old corporate job he could get. But he needed to do something, because after months of living on her couch, his sister was getting impatient.

A mentor suggested he get on LinkedIn. Lewis realised that the platform gave him direct access to lots of successful people, people who might be able to lead him to opportunities or at least explain to him how they had gotten to where they were. “All I ever wanted to do was be around inspiring people that I could learn from.” He spent the next year, eight hours a day, connecting with local business leaders, inviting them to lunch and conducting informational interviews to learn

more about how they’d achieved their success.

He’d at first reached out to a number of sports executives. As one person connected him to another person, who then suggested he meet with another, his circle grew wider. As he learned more about LinkedIn’s possibilities, he optimised his profile, which then led to bigger and bigger influencers agreeing to meet him. By the end of 2009, he had 35,000 connections. At the time, Tweetups – in-person gatherings of Twitter users around a common cause – were popular. “I went to a couple and I thought, I’m building this following on LinkedIn. Why don’t I do a LinkedIn meetup?

So, he did one in St Louis, where he had gone to boarding school. Around 350 attended, and thanks to selling a few sponsorship tables, he earned about a thousand dollars.

“I thought why don’t I see if I can do another event and charge five dollars at the door?” He did, and he made money off the entry fee as well as the sponsorships.

“And then I thought I’m building a relationship with these venues. What if I asked for a 10 per cent commission on the food and bar sales from these networking events?” They said yes. In short order, Lewis was bringing in a couple thousand dollars a month, enough to get off his sister’s couch and move into his own apartment. People were astounded. How was he pulling this off? He didn’t have a real job, he didn’t have a degree, and yet he was bringing influencers together and being asked to speak at conferences. All through LinkedIn. They started asking if he could show them how to use the platform for their business, too.

Lewis started teaching other entrepreneurs how to optimise their profile and reach out to potential clients and investors. “I think because I came with passion, I attracted opportunities. I attracted people to come to these events. I became passionate about teaching, because no one else was talking about LinkedIn the way I was.”

How was he pulling this off? He didn’t have a real job, and he didn’t have a college degree

90 From Crushing It by Gary Vaynerchuck © 2017.

Reprinted courtesy of Harper, an imprint of HarperCollins Publishers

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