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CASHLESS KENYA

JAKARTAâ€™S SEA WALL

Mobile money takes off

A plan to keep the city afloat

SAMSUNG WOES

LI KA-SHING RETIRES

Can the firm bounce back?

The end of an era in Hong Kong

INNOVATION CITY How Dubai became the most innovative city in the world

FIRST JEWELER OF THE PLACE VENDÔME In 1893, Frédéric Boucheron is the ﬁrst of the great contemporary jewelers to open a Boutique on the Place Vendôme

SERPENT BOHÃˆME

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The business of life & living

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ART PIECE P26

A Birmingham gallery with a difference

MAY ISSUE 149

CONTENTS UPFRONT

JAKARTA WOES

Can the city survive rising sea levels?

LIVING

GARY VEE

Is the entrepreneur a social media genius or a charlatan?

HOTEL

A Milan hotel with a very fashionable heritage

MEDIA

CondÃ© Nast is betting on videos to show the way forward

INVESTMENT PIECE

Cashing in on sporting cards

HEAD BOY

The new head of Louis Vuitton menswear aims to make changes

NO SHOWS

How bad customers are hurting the highend restaurant scene

EXHIBITION

A Monet exhibition in London

COLUMN

The secrets of smart investing

33,164 copies December 2017

MAY ISSUE 149

CONTENTS FEATURES

DUBAI INNOVATION

How the city transformed itself into one of the world’s most innovative

CASHLESS KENYA

Country leads the charge for the eradication of cash

SAMSUNG’S WOES

Can the Korean giant emerge from its recent scandals?

END OF AN ERA

The retirement of Li Ka-shing and the future for Hong Kong’s tycoons

CHICAGO PROPERTY

Taking the temperature of the Windy City’s high-end property market

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UPFRONT

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Jakarta’s race against time John Lyndsay examines whether the Indonesian capital’s sea wall will help prevent disaster

akarta has a problem. Around 40 per cent of the city is below sea level and rising waters have been threatening the Indonesian capital for decades. The country of 10 million people has more than 81,000 kilometres of coastline, making it very vulnerable to climate change. It does have a natural barrier to rising sea levels: mangrove forests, which help keep tides out. However, half of its mangrove forests have been destroyed in the past 30 years, as coastal communities have chopped them down to get access to fish and shrimp farms. The Indonesia government, desperate to stop any further encroachment by the sea, is building a giant $40 billion sea wall that will close off Jakarta Bay.

It’s not the first sea wall. One that was reinforced in 2007 is already showing signs of damage, with cracks and leaks more and more common. The area affected by the rising sea levels, in Jakarta’s northern belt, is home to more than four million people, all of whom are at risk. As with many of the issues in this part of Asia, the main reason for the problem is a lack of investment in infrastructure. The city does not pipe in enough drinkable water, so locals build wells that take water from aquifers. Do this enough times and the land above it collapses. This is exacerbated by the constant new building of malls, apartments and offices on land. These buildings take more water and increase the weight on the land. As the land continues to sink, the

UPFRONT

frequency of floods grows, mainly caused by rain-swollen rivers bursting their banks – the water goes back in towards land rather than out into the bay. Jakarta is, in some ways, a prisoner of its geography. Set in a plain crossed by 13 rivers, it owes its importance to its location. Jakarta Bay provides a natural harbour, which was a vital port for the various rulers – Hindu, Muslim, Dutch – that took control of the city. When the Dutch ruled Indonesia, they built a series of underground canals in a failed attempt to control the flow of the water. Now, the Dutch are back, offering their expertise in an attempt to stave off disaster. It was in the 1990s that the full scale of the problem facing the city came to be realised. But the big wake-up call was the floods of 2007. Fifty people died

$40bn The amount that the proposed sea wall will cost

and more than 300,000 were forced to evacuate their homes as floodwaters covered more than a third of the city. It was a catastrophic event and one that forced the government to take action. The solution seemed clear: the city had to replace the reliance on groundwater extraction with clean, piped water. More than a decade after those floods and little progress has been made. Some analysts believe there is less than five years left to act, or northern Jakarta will be permanently underwater, causing the biggest natural disaster in Indonesia’s history. Enter the Giant Sea Wall, an ambitious, $40 billion project that – its defenders hope – will save Jakarta and create a whole new district out in the sea. Planners want to build a 40km dyke that stretches across Jakarta

Bay creating a huge manmade lagoon. A new coastal city would then be built on the reclaimed land in the shape of the garuda, Indonesia’s national bird. The project’s defenders say it’s the only way to save the city; its detractors say it will cause too much social upheaval and cost too much. Already there have been mass evictions of traditional fishing villages, as old coastal communities are bulldozed to make way for construction sites. Environmental activists also claim that the manmade lagoon would be nothing more than a septic tank, as, with little sewage treatment along the coast, the city’s waste would pour into the lagoon with nowhere else to go. At least, however, the government is taking action. The city’s rubbish-filled rivers are being cleaned and widened, and

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new concrete barriers are being erected. Reservoirs are being built to hold water after heavy rain. Far out at sea, the first towers are being built on reclaimed land. The developers claim that when finished, more than 300,000 people will live here, in a new city.

Most of the properties are being marketed to overseas investors, primarily Chinese, and it’s hard to see how any regular Jakarta resident could afford to buy here. As well as the main island, there will be 17 new islands, and it is expected to take nearly 40 years

to complete. It’s nothing if not ambitious, but critics say it’s wrongheaded and focuses more on selling property than fixing the flooding issue. Whatever happens, Jakarta, like many cities across the world, faces an uncertain future.

of its location. It also doesn’t help that the city’s ancient drainage systems are in constant need of repair. Like Venice, New Orleans is also sinking, with some parts of the city sinking by nearly two inches a year. This is a result of manmade factors (oil, water withdrawal, construction) as well as mother nature.

Alexandria, the flooding in recent years has got worse and worse, and coastal waters are inching closer to buildings and infrastructure.

FLOOD-PRONE CITIES VENICE This unique city floods about 100 times a year, in a phenomenon known as acqua alta. It doesn’t help that the city is sinking – by about nine inches in the past hundred years. Every time the city floods, it causes structural damage, but the city is fighting back. Underwater gates are being built at the entrance to the three inlets where the sea enters Venice’s lagoon. When the seawater rises above a certain level, air will be pumped into the gates, causing them to rise and shut off the sea. NEW ORLEANS Like all the world’s flood-prone cities, New Orleans is a prisoner

ALEXANDRIA The Egyptian government has warned that 13 per cent of the country’s coastline is at risk from rising sea levels. The UN estimates that by 2080, 120,000 people living near the Mediterranean Sea could be affected by rising seawaters. In

MANILA One of the most exposed cities in the world, Manila faces a huge flooding problem, with large areas of the city set to be underwater in the decades to come. Like in Jakarta, the problem is two-fold: rising sea levels and sinking land. The problem is particularly noticeable after heavy storms – in 2009, more than 300,000 people were displaced by floods, which covered 80 per cent of the city.

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FLOODING CAUSES HAVOC IN NEW YORK SUBWAY SYSTEM New Yorkers endured a number of flash floods as unseasonably wet weather continued to affect the city. Commuters posted videos of subway stations being flooded as authorities struggled to cope with the fallout. It’s just the latest in a series of problems for the subway system, which is overcrowded, underfunded and in desperate need of upgrades. Authorities claim the subway is simply a victim of its own success, with average daily trips increasing from four million in the 1990s to six million in 2017. Whether the new transit chief, Andy Byford, can improve the ailing system remains to be seen.

/ URBAN

UPFRONT

The amplifier He’s the brash social media expert you have never heard of. CJ Hannon explores the world of Gary Vee

ou probably don’t know anything about Gary Vaynerchuck, but for a generation of entrepreneurs, he is a modernday sage, dispensing socialmedia friendly bites of wisdom, one Instagram post at a time. For his critics, he’s a snake oil salesman, peddling half-truths and aphorisms, convincing others that they too can get rich, if only they sort out their social media techniques. Social media is filled with charlatans, promising that if you just download their ebook/ subscribe to their channel/sign up for their conference, then you too can discover the magic bullet that will lead to untold wealth. Vaynerchuck, or Vee, as he’s known online, is legitimately wealthy. He made his first real money growing his father’s wine business from $3 million to $60 million a year by 2005. That was done by – you guessed it – web savvy. He rebranded the store, changing the name from Shopper’s

Discount Liquors to Wine Library, launched online sales and started a daily webcast covering wine, called Wine Library TV. That proved good experience for his next venture, VaynerMedia, a digital ad agency he founded with his brother. VaynerMedia provides social media services to Fortune 500 companies and employs more than 600 employees, grossing $100 million in revenue in 2016. Born Gennady Vaynerchuk in Belarus in 1975, Vaynerchuck’s family moved to the US when he was three, and he and eight members of his family lived in a studio apartment in Queens. The entrepreneurial bug bit early. As a child, he operated a lemonade stand franchise and earned thousands of dollars trading baseball cards. By the age of 14, he had joined his family’s wine business, a decision that was to change his life. The aforementioned Wine Library TV became his first ‘viral’ project. It

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featured him tasting and talking about wines, inviting guests such as hockey legend Wayne Gretsky and Wall Street pundit Jim Cramer on air, and his manic on-screen presence elevated the show above some of the other nascent online wine channels. Critics bemoaned the lack of substance, but Vaynerchuck could point to the numbers: more than 100,000 per episode at its peak. This was him building a personal brand, and as his YouTube numbers rocketed, so did his Twitter followers.

As a child he operated a lemonade stand and traded baseball cards This got the attention of conference organisers. Vayernchuck’s stage presence is much as you might expect: a hyperactive, profane blur of energy, coupled with what he would see as refreshing honesty. Despite this rags to riches story, Vaynerchuck is not universally loved. A 2009 Gawker headline called him a “wine-loving Twitter twerp”, and this year its tech site Valleywag wrote: “Think of him as a sort of Deepak Chopra of selling b******t with Snapchat.” Mention his name at any tech conference and you will be met with groans – it’s not cool to like Gary Vaynerchuck

UPFRONT

Part of his problem lies in the social media space, which is dominated by hucksters with promises of untold riches

and probably never will be. It’s hard to imagine him caring – his brand of straight talking has seen his audience grow year after year, eagerly lapping up his Instagram videos, his tweets and his YouTube channel. It’s not just an audience he has been building – he’s invested in dozen of tech companies, including Facebook, Twitter and Venmo, and Entrepreneur Magazine estimated his net worth to be in the region of $160 million. Critics wonder if his investments create a conflict of interest when he’s advising his clients on which social media channels to use. Of course he’s going to recommend they use Twitter and Facebook, given he’s an investor, they claim. While this is true, it’s also true he would probably be recommending they use those channels if he wasn’t an investor. Other critics point to the website Glassdoor.com, where employees can post anonymous reviews of their workplace. VaynerMedia doesn’t come out too hot – with review after review criticising a chaotic management structure and incompetent staff. Part of Vaynerchuck’s problem is the nature of the business he’s in – the social media space is filled with hucksters, all promising you more likes and follows and engagement. If the mantra among the salesmen

Vaynerchuck’s foray into reality TV was universally panned

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Vaynerchuck’s estimated net worth in millions of dollars

of Glengarry Glenross was ‘always be closing’, then the mantra of the social media generation is ‘always be posting’. And so they do, even when they have nothing to say. Trite observations and bland aphorisms dominate, masquerading as ‘content’, and although Vaynerchuck is not the worst offender, his determination to post constantly results in frequently insipid content. Vaynerchuck doesn’t listen to the haters though. Take his foray into reality TV. Last year he took part in Apple’s first original TV

show, a reality programme called Planet of the Apps, where he and a number of judges (including Jessica Alba and Gwyneth Paltrow) evaluated pitches from app developers looking for investment. The show was a flop, almost universally panned. Vaynerchuck shrugged it off and launched DailyVee, a daily, ‘videodocumentary’ series on YouTube that “chronicles Vaynerchuck’s life as a businessman”. He also signed a 10-book deal with HarperStudio in 2009 (reportedly for $1 million), and his most recent book

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SOCIAL MEDIA SAGES Tai Lopez Although derided as a huckster by many, there’s no denying this investor’s numbers. His videos have been viewed by more than 100 million people in 92 countries. His TEDx talk gained more than seven million views, and more than 100,000 people have joined his 67 Steps success system. He makes sure viewers see his supercars and mansion, and flaunting his wealth has worked so far.

Dan Bilzerian The poker player and playboy has gained more than 20 million Instagram followers, all keen to get a glimpse of his outrageous lifestyle. Bilzerian doesn’t care one bit what the ‘audience’ wants, and his no-holds-barred posts show the power of a social media strategy based on not caring.

Grant Cardone The multimillionaire property developer posts extremely well produced social media content, particularly video. He also dishes out useful, actionable information that his 1.5 million followers lap up. This is social media at its best, in that it actually creates value for those who follow it.

Crushing It!, has gone onto the NYT bestseller list. It all comes back to what Vaynerchuck does almost better than anyone else: harnessing the internet to build brands. And whatever his critics say, he has built two multimillion dollar businesses, and made it into

Fortune magazine’s 40 under 40 last year (even if there was some eye rolling among the staff when it was announced he made the list). For Vaynerchuck, the brickbats he receives surely make his success all the sweeter. And unfortunately for his critics, he is showing no sign of slowing down just yet.

Kayla Itsines Fitness is one of the big growth areas on social media and this personal trainer has utilised it brilliantly. With more than 10 million followers and a consistent use of user-generated content (particularly before and after shots), Itsines is one to watch.

BRITISH PUB CHAIN CALLS TIME ON SOCIAL MEDIA The British pub chain Wetherspoons has deleted all of its social media accounts after its chairman, Tim Martin, claimed that “people spend too much time on social media”. He also said that closing the accounts would have no effect on his business. Shares in the brand rose 1.5 per cent after the announcement, which may prove to be a savvy business decision. Wetherspoon owns 900 pubs in the UK and Ireland and has proven to be recession proof, with profits soaring in recent years. The announcement comes after increased focus on the negative effects of social media, and the current investigation into Facebook’s selling of personal data.

UPFRONT

Condé Nast’s ‘pivot to video’ Condé Nast is betting on videos to show the way forward. Valeriya Safronova visits its new studio

t took three men two hours to shoot a 63-second overhead instructional video of Laura Rege, a recipe developer, making a cake for Bon Appétit – what people in the food-video industry call a “hands and pans”. At the Kitchen Studio, Condé Nast’s new 7,000-squarefoot space in Industry City in Brooklyn, four to six of these “hands and pans” videos are shot daily. It is the type of video on which Tasty, BuzzFeed’s famous recipe offshoot, has built a very large audience. Condé Nast’s food brands, Bon Appétit and Epicurious, have heartily embraced the format too. Now, the company wants to double its current video business. To do so, it will have to move beyond what’s worked in the age of Facebook video, and make something new. Until now, most of Condé Nast’s food videos were made in its test kitchen in the company’s headquarters at One World Trade Center or in Airbnb rentals. But business has been growing. During the last two years, Bon Appétit’s

YouTube subscriber base increased from 34,000 to more than one million. In the same period, the number of monthly unique viewers for the videos on its website grew by nearly 2.5 million, according to comScore. Overall, video now makes up a quarter of revenue for The Lifestyle Collection — that’s Bon Appétit, Architectural Digest, Epicurious, Condé Nast Traveler and the now digital-only publication Self. All told, these brands produce about 40 to 50 videos per week, and that doesn’t include those made for advertisers. At the same time, the company expected significant overall revenue decline from 2016 to 2017. It closed the print edition of Teen Vogue; reduced the print frequency of GQ, Architectural Digest and Glamour; and cut employees across the company. After that crusade of downsizing – and the turnover of big-spending old-guard editors-inchief like Vanity Fair’s former editor Graydon Carter – there are now rumours of the impending departure of Anna Wintour, the company’s artistic director and the editor of Vogue. But she has unexpectedly

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Left: Carla Lalli Music, food director of Bon Appétit, makes scallops at Condé Nast’s Kitchen Studio Below: Thomas Werner, a producer, and Laura Rege, a recipe developer, work on a ‘hands and pans’ video

become the avatar of a right-sized, moderately thrifty Condé Nast. And, rightly or not, Condé Nast is finally looking to digital. In recent years it has embraced digitally focused leaders like Samantha Barry, the new editorin-chief of Glamour, and Phillip Picardi, the chief content officer of Teen Vogue. Perhaps not surprisingly, a significant portion of the company’s advertising solicitation is now devoted to video. The idea that video will be a financial saviour in the media business is contentious, and often mocked. It is expensive to create, and audiences aren’t equivalent – yet – to print or even web in their ability to be monetised. (In human terms: one person watching a video is not financially equivalent to what one person paying for a magazine has been worth.) But Vogue the magazine has just over one million paid subscriptions, and Vogue the YouTube channel has more than 2.2 million subscribers. “In the next 24 months, I hope that video is half our business,” said Craig Kostelic, the chief business officer of The Lifestyle Collection. “It’s critical. It’s the macro trend of content consumption.” Condé Nast is not betting everything on “hands and pans” videos. In fact, it is increasingly looking beyond them as viewers gravitate toward something that is a cross between short social videos and the food programmes of yore

(you might remember it as cable television). Much of the space is for videos featuring hosts like Claire Saffitz, who is known for videos in which she breaks down complex recipes for foods as varied as Twinkies and soup dumplings, or Brad Leone, the quirky host of ‘It’s Alive’, a series about fermentation, pickling and more.

The idea that video will be a financial saviour in the media business is a contentious one and often mocked by analysts “For so long we were doing those hands and pans videos, and it’s one of those things you had to do based on internet demand and traffic,” said Adam Rapoport, the editor-in-chief of Bon Appétit. “They’re kind of boring, they’re not stimulating and they’re predictable. It was not creatively rewarding. As an industry, we’ve gone beyond that and it’s gone more to the personality videos, to more narrative.” Bon Appétit has attracted hundreds of thousands of viewers with human-first series like one in which children react to various foods, for example breakfast

UPFRONT

“This industry is moving so fast. The videos we are creating now compared to two years ago are really different”

items from the last hundred years (“the beginning is horrible, so is the middle, so I’ll give it a four,” said one sophisticated taster about a 1920s breakfast of codfish cakes, hominy and stewed prunes), or another where the magazine’s deputy editor swaps out his office for 24 hours of hands-on labour at fast-paced casual restaurants like Katz’s deli in New York (he is critiqued by one of his temporary co-workers for being “a little too nice”). Epicurious, while much smaller (it has about 146,000

YouTube subscribers) has similarly attracted audiences with videos series like the 50 Person Prep Challenge, in which people attempt basic culinary tasks like slicing a pepper or dicing an onion. To optimise the new test kitchens for filming, they have been outfitted with overhead lights, blackout curtains and acoustic panelling to muffle outside sound. All the stovetops are gas. “People want to see the flame,” said Eric Gillin, the digital general manager of The Lifestyle

Collection. Sponsored product is everywhere. The countertops? Caesarstone. The small appliances? Braun. Furniture? Crate & Barrel. The smart fridges? Samsung. And so on. And though the test kitchen at Condé Nast’s headquarters has served well as a shooting location, it will now go back to being primarily a workspace for editors who are trying out recipes. “Video can be kind of intrusive,” said Rapoport. “You have camera people, lights, you have to section off a portion of the kitchen, you don’t want people to be too noisy. Shooting interrupts the basic workflow.” “On YouTube, over half of our audience is under 34 years old. These people are young, they’re really engaged, they’re watching for an average of over five minutes. It’s not this eight-second watch time like on Facebook,” said Matt Duckor, the executive producer for the Lifestyle Collection. “YouTube is a sneaky, over the top kind of channel unto itself,” Gillin said. Videos that are somewhere between the length of a socialmedia post and a 60-minute special thrive on YouTube, Duckor said. A significant chunk of viewers are consuming them not on a cellphone or computer but on a television. “Twenty per cent of people watched that cheesesteak video on a television, whether on a smart TV, a game console, Roku or Apple TV,” Duckor said, referring to a video in which a

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Bon Appétit editor ate 16 Philly cheesesteaks in 12 hours. “Coming across something in your Facebook feed and stopping on it for three seconds can count as a view, but when we talk to advertisers, they want people who are actually connecting with what they’re doing, not just happening upon it.” The Condé Nast teams have embraced the flexibility of the mid-length format. “When you’re post-cable, it’s not a half-hour TV show, you’re not programming for these ad blocks, you’re telling the story for as long as there’s a story to be told,” Gillin said. “This industry is moving so fast,” Duckor said. “The videos we’re creating now compared to two years ago are really different, but you’re always going to need kitchens, you’re always going to need the ability to have production space to have people work and sit.” For now, the revenue coming in from videos is split between advertising and sponsorships. “About half to two thirds of it is more about traditional ads, like pre-roll,” Kostelic said, referring to the brief advertisements that play before a video. But increasingly, Condé Nast makes videos for its clients that it does

Craig Kostelic, chief business officer, Eric Gillin, digital general manager, and Matt Duckor, executive producer for Condé Nast’s Lifestyle Collection of publications, at the publisher’s Kitchen Studio in Brooklyn

not promote on its own platforms. “Historically, you would have a digital media plan with a set amount of view or impressions,” Kostelic said. “More people are coming to us for our content and creative services plans, with distribution being a separate conversation.” The greater goal is for the lessons The Lifestyle Collection team will learn with the Kitchen Studio space to trickle out to the rest of the company.

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“The issue that Condé Nast used to have is that it was really siloed out by brand, and the brands didn’t speak to each other, they didn’t share learnings,” Duckor said. “We’re at a place now where we can take learnings from Bon Appétit and the success we’ve had on YouTube and apply them to Architectural Digest, where they haven’t quite had the investment in that platform that we have. That’s the real opportunity.

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Urban art James Brennan visits the Reuben Colley Fine Art gallery in Birmingham

rtist Reuben Colley has come a long way from the Bromford estate near his childhood home in northeast Birmingham. But not too far. His gallery, now housed in a stately Victorian building on one of the city centre’s most prestigious streets, regularly features work by the likes of Andy Warhol, Damien Hirst and Grayson Perry. Yet the brooding tower blocks and

forgotten scrublands of Colley’s youth are a frequent subject of his own paintings. “My work still varies from urban to woodland and park landscapes, but they share the common value that they are immediately familiar to me,” he says. His recent collection Remnant is described as a celebration of “the neglected corners of Birmingham’s urban landscape, which are

destined for demolition, or have already disappeared”. And yet his unvarnished depictions of contemporary city centre life shed a positive light on familiar locations in a city that’s constantly reinventing itself. Drawing on a range of influences, from Impressionism to photorealism and pop art, there are echoes of the great painter of industrial England LS Lowry in Colley’s work. But while his paintings are post-industrial, they evoke a sense of optimism. Whether it’s a windswept playing field or a rain-soaked Bullring shopping centre, Colley finds beauty and wonder in the mundane. “I never paint with any particular audience in mind, but I

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“I try to be honest with my paintings, and try to depict life as it is, unapologetic, but always beautiful” find that people from every walk of life and of all age groups can relate to and appreciate my work, and I think that it is because I just try to be honest with my paintings,” says Colley. “I try to depict life as it is, unromanticised and sometimes unapologetic, yes, but always beautiful in its own way” Reuben Colley Fine Art occupies the ornate Union Club building on Colmore Row, not far from the grand Council House and the Birmingham Museum and Art Gallery. All three were designed by the Birmingham architect Yeoville Thomason in the latter part of the 19th century. “The architecture certainly lends itself perfectly

to displaying art to its very best potential, and the location couldn’t be better,” says Colley. The surrounding area holds much significance for the arts in Birmingham. BMAG owns the largest collection of PreRaphaelite paintings in the world, and one of the movement’s foremost members, Sir Edward Burne-Jones, was born just a few yards away on Bennett’s Hill. You’ll find Burne-Jones’ stunning stained glass windows across the street at St Philip’s Cathedral. And around the corner in Edmund Street, there’s a blue plaque commemorating Conroy Maddox and the Birmingham

Opposite: Bullring Winter Below: The Writing’s on the Wall

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Surrealists. But Colley’s story began a few miles away in the suburb of Hodge Hill. “My first introduction to fine art was at secondary school, where my teacher was a highly reputed artist called James Byrne, who is now one of the artists we represent at Reuben Colley Fine Art. From this point onwards, all of my academic choices were directed to becoming an artist of some sort.” After completing a fine art degree, Colley exhibited his work in nightclubs and trendy city centre bars. “By now I was also working as a picture framer for a large gallery in Birmingham, who subsequently represented me in both their Birmingham and London galleries. This opportunity gave me just enough financial stability to completely indulge myself in painting.”

UPFRONT

Right: Digbeth Evening Below: Class of ‘61

As Colley’s art began to gain recognition nationally as well as locally, it wasn’t long before he felt the time was right to open a gallery in the suburb of Moseley. “My decision to open my own gallery was made for one reason, to have complete control and freedom over exhibiting artwork,” he explains. “Freedom is an artist’s number one priority but in the process of marrying art and business, this can often become diluted.” To maintain his artistic freedom, while still taking care of business, Colley needed help. He found it in the form of sales director Timothy Ison, who also began his art career in the same gallery that represented Colley, some 20 years ago. “Without this business relationship I wouldn’t be able to be both artist and gallery director,” Colley explains. “My time in the studio has to take priority, so assistance is essential. Since our move to the city centre, we now have three new members of staff, and with a business of such a bespoke nature I have been very lucky to have found a team who are so sensitive to what we do.” After five successful years in Moseley, the small but neatly proportioned city centre gallery opened in 2015, and the business has grown to fit its distinguished surrounds. “Moving to Colmore Row has naturally attracted new clients, and being in the city centre has meant we have had visitors

“My time in the studio takes priority, and with this business, I’m very lucky to have found a team who are so sensitive to what we do” from all over the world. We have also started to feature works by some of the most celebrated artists of the 20th century including Damien Hirst and Andy Warhol, and these works are proving very popular,” says Colley. While the gallery uses online platforms such as Artsy to showcase and sell with great success, there’s no substitute for browsing the gallery in person.

Visitors might find an Andy Warhol screen print of Mick Jagger, signed by both artists, next to a Grayson Perry etching or a Banksy screen print. But Colley remains true to the spirit of his own work by also representing local artists, as well as those whose work features the city of Birmingham. Rick Garland’s unapologetic urban landscapes depict graffitistrewn derelict warehouses as well

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as uplifting cityscapes dabbed with soothing light. Having originally painted gritty images of New York, Garland saw many parallels with Birmingham, and began painting its abandoned factories, as well as some of its cherished old buildings. Meanwhile, local artist Danny Howes’ work captures hectic scenes of traders at Birmingham’s historic Wholesale Market, the UK’s largest, soon to be relocated to a new site outside of the city centre. In 2015, Colley, Garland and Howes painted a

collection of Phyllis Nicklin’s iconic photographs of 1950s Birmingham, which capture a city and nation in flux in the aftermath of the Second World War. The collection also includes work by Horace Panter, bass guitarist with the legendary Coventry 2-Tone band The Specials, and another artist on RCFA’s books. Known for his pop art paintings of mix tapes and Americana, Panter has recently been commissioned by The Beano comic to commemorate its 80th anniversary, portraying the likes of

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Dennis the Menace and Minnie the Minx in the style of Warhol and David Hockney. The breadth and diversity of art displayed at RCFA is a reflection of Birmingham as a city, but also of Colley’s attitude to the artistic process. Artists must be free to choose their own subject and to work in their own way, and Colley strives to be faithful to their needs. “My gallery is orientated towards the artist as much as possible, to give them peace of mind in the studio,” he explains. “It has proven to be a successful formula attracting both a very high quality of artist and a very receptive audience. This has meant that the gallery has grown in an organic manner, with the flexibility to experiment and grow relationships with those who appreciate what we do.” A visit to Reuben Colley Fine Art should be on any art lover’s itinerary when in Birmingham. But be mindful of the city’s neglected corners. You never know who you might find sketching there. Rueben Colley Fine Art, 85-89 Colmore Row, Birmingham

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UPFRONT / CLASSIC READ

The Hard Thing About Hard Things

of books. [The reality is that] attributing a firm’s success to a specific strategy may be wrong if you sample only the winners. When luck plays a part in determining the consequences of your actions – as is often the case in business – you don’t want to study success to identify good strategy but rather study strategy to see whether it consistently led to success.” Horowitz goes against these common management book tropes and focuses on everyday issues such as how to lay off people, if it’s

Horowitz’s book stands out by ignoring the most common tropes of business books

en Horowitz’s The Hard Thing About Hard Things focuses on the real challenges faced by entrepreneurs, who face a long and lonely road to success. Horowitz, who cofounded multiple companies and now works at the venture capital firm A16Z, is well placed to examine why setting up (and succeeding with) a company is hard. One of the book’s strengths is its candour. Horowitz is brutally honest about his flaws as an engineer, founder and husband. Focusing on one thing for so long can lead to the type of tunnel vision that has a detrimental effect on every other aspect of your life. Of course, for the author, it paid off in the long run. He founded Opsware, a software company that was eventually sold to HP for $1.65 billion. Horowitz has been critical of the management book genre in the past, claiming that “when I was a

CEO, the books on management that I read weren’t very much help after the first few months on the job. They were all designed to give you directions on how not to screw up your company”. He said: “But it doesn’t take long before you get beyond that and you’re like, OK, I’ve screwed up my company, now what do I do? Most books on management are written by management consultants, and they study successful companies after they’ve succeeded, so they only hear winning stories.” The investment strategist and writer Michael Mauboussin added to this point. “The most common method for teaching business management is to find successful businesses, identify their common practices, and recommend that managers imitate them,” he said. “This formula is intuitive, includes some compelling narrative, and has sold millions

ever OK to take employees from a friend’s company, and how to minimise office politics. He also focuses on an often overlooked aspect of being a CEO: managing your own psychology. “By far the most difficult skill I learned as a CEO was the ability to manage my own psychology. Organisational design, process design, metrics, hiring and firing were all relatively straightforward skills to master compared with keeping my mind in check. I thought I was tough going into it, but I wasn’t tough. I was soft. Over the years I’ve spoken to hundreds of CEOs, all with the same experience. Nonetheless, very few people talk about it and I have never read anything on the topic. It’s like the fight club of management: the first rule of the CEO psychological meltdown is don’t talk about the psychological meltdown.” Horowitz does talk about it and it’s one of the most interesting parts of the book. An enlightening, sobering and useful read, this is a must for anyone thinking of setting up a company.

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UPFRONT / FASHION

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A new face at Louis Vuitton Virgil Abloh is one of the few black designers at the top of a French heritage house. Vanessa Friedman and Elizabeth Paton chart his rise

irgil Abloh, the founder of the haute streetwear label Off-White and a long-time creative director for Kanye West, will be the next artistic director of menswear at Louis Vuitton, one of the oldest and most powerful European houses in the luxury business. He will be one of the few black designers at the top of a French heritage house. Olivier Rousteing is the creative director of Balmain, and Ozwald Boateng, from Britain, was the designer for Givenchy menswear from 2003 to 2007. “I feel elated,” Abloh said via phone recently, adding that he planned to relocate his family to Paris to take the job at the largest brand in the stable of LVMH Moët Hennessy Louis Vuitton, the world’s largest luxury group. “This opportunity to think through what the next chapter of design and luxury will mean at a brand that represents the pinnacle of luxury was always a goal in my wildest

dreams. And to show a younger generation that there is no one way anyone in this kind of position has to look is a fantastically modern spirit in which to start.” The appointment, widely rumoured in recent months, is part of a shake-up on the menswear side of LVMH, which began in January with the departure of Kim Jones, Abloh’s predecessor at Louis Vuitton. Last week, it was announced that Jones would become the menswear designer at LVMH stablemate Christian Dior, replacing Kris van Assche. Abloh’s appointment is also a reflection of the increasing consumer-driven intermingling of the luxury and streetwear sectors, which helped boost global sales of luxury personal goods by five per cent last year to an estimated 263 billion euros (about $325 billion in today’s dollars), according to a recent study by the global consulting firm Bain & Co. And it is an acknowledgment on the part

$325

Global sales of luxury personal goods in billions last year

of the luxury industry that it must respond to contemporary culture in new ways. “Virgil is incredibly good at creating bridges between the classic and the zeitgeist of the moment,” said Michael Burke, chief executive of Louis Vuitton. The two men first met about 12 years ago when Abloh spent six months interning at Fendi with Kanye West, where Burke was then the chief executive. “I paid them $500 a month!” Burke said. “I was really impressed with how they brought a whole new vibe to the studio and were disruptive in the best way. Virgil could create a metaphor and a new vocabulary to describe something as old-school as Fendi. I have been following his career ever since.” Abloh, 37, a first-generation Ghanaian-American raised in Illinois, is widely considered one of fashion’s consummate purveyors of cool; a master of using irony, reference and the self-aware wink (plus celebrity, music, digital and hype), to re-contextualise the familiar and give it an aura of cultural currency. Despite having no formal fashion education (his mother was a seamstress and taught him her trade; he studied architecture and civil engineering), Abloh founded Off-White – a reference to his belief that old barriers are breaking down – in 2013, almost a decade after he first meet West and

UPFRONT

became his creative partner. In 2015, Off-White was a finalist for the LVMH Young Designers Prize. (Abloh will be the first LVMH finalist to take on a major design role in an LVMH brand.) Off-White has 3.1 million Instagram followers (Abloh alone has 1.6 million), and Abloh received the Urban Luxe award at the British Fashion Awards last year. During the just-past womenswear season, there was almost a riot in the Rue Cambon outside the Off-White show as fans crowded to get in. A champion of the crossbranded collaboration, Abloh has worked with names as varied as Nike, Jimmy Choo, Moncler and,

with an upcoming project, Ikea. Most recently, he teamed up with Takashi Murakami, a frequent Vuitton collaborator, for a show at the Gagosian Gallery in London. “In a way, all of my output has been to make a compelling case for me to take on a role such as this,” Abloh said. “I think of it as kind of the ultimate collaboration.” It also presumably made a compelling case that Abloh could be the man to make Louis Vuitton menswear more relevant – and more visible – to the millennial generation. He will build on the foundation laid by Jones, who also gave classic menswear and Vuitton’s history as a luggage expert an urban edge, and recently

Above: A recent Louis Vuitton menswear show Right: The Beckhams are fans of the label

engineered a sellout collaboration with Supreme, another streetwear success story. “For the last eight to 10 years we’ve been having this conversation about what’s new, and for me, that has to do with making luxury relatable across generations,” Abloh said, adding that he had been putting together an eight-page “brand manual” defining the new ethos of his Vuitton. “The first thing I am going to do is define new codes. My muse has always been what people actually wear, and I am really excited to make a luxury version of that.” Burke added: “Louis Vuitton was not a couture house. From

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the mid-19th century to the 1920s and beyond it always sought to cater to the new wealthy class, not the old aristocrats.” Abloh also said he would be focused on rethinking how the brand communicated with its consumers, including the release of products, the runway show and the way it interacted with the global political mood.

“When creativity melds with global issues, I believe you can bring the world together” Certainly, Vuitton will give him a bigger platform than he has had. Menswear is sold in only about 150 of the 450 Vuitton stores around the world, though the company plans to increase that by between 25 and 28 stores. There are also 13 free-standing men’s stores, with six more planned this

year, according to Burke. Though LVMH does not break out specific brand performance, Burke said the menswear business had been growing in the double digits and “had a stellar 2017”. That places a burden of expectation on Abloh’s shoulders, especially given all the hype around his name – he was mentioned for possible top positions at Burberry and Versace. One of the criticisms most often lobbed at him (by Calvin Klein’s designer, Raf Simons, among others) is that his real genius lies in repurposing other people’s work, as opposed to creating new silhouettes of his own. Abloh is also not one to shy away from political statementmaking, a tactic often seen as a risk for a luxury brand. Last year, during a guest appearance at the Florence menswear show, Pitti Uomo, Abloh eschewed the traditional runway show and instead collaborated with the artist Jenny Holzer on a piece addressing the immigrant crisis. “Product is only one part of the luxury narrative,” Abloh said in the phone interview. “I want to use Louis Vuitton’s history with travel to really look at different cultures around the world to help make all our humanity visible. When creativity melds with global issues, I believe you can bring the world together. Fashion on this level can really open eyes.” Abloh will continue to run Off-White – “it is for the 17-yearold version of myself, whereas Vuitton is for the 37-year-old I am today,” he said – and to work with West. But he said he would cut back on his other activities, including moonlighting as a DJ. He will show his first collection for Louis Vuitton during Paris Men’s Fashion Week in June.

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FAST FASHION BRANDS COMPETE FOR CUSTOMERS Fast fashion brands such as H&M, Zara and Forever 21 are locked in a race to speed up their supply chains even more, with a new breed of online retailers ensuring the route from design to the high street has never been quicker. Sites such as ASOS have cut supply chains down to a week and have taken customers from the high street stores. Recent controversies involving both H&M and Zara have shown the perils of bringing new lines to market fast, and analysts will be watching them closely to see if they can continue to compete with the online retailers.

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FUTURE PERFECT Iain Akerman explores how Dubai established itself as one of the worldâ€™s most innovative cities

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aeed Al Gergawi, director of the Dubai Future Academy, is giving a tour of the world’s first fully functioning 3D printed office. “This is the base of the building,” he says, pointing to a small patch of exposed surface next to the Office of the Future’s main entrance. “It took 17 days in total to print and in terms of technology it is already, to some extent, outdated because of how fast the technology is moving.” There are elements of ’60s sci-fi design peppered throughout the office complex, which is home to Dubai Future Foundation, of which Dubai Future Academy is a part, and acts as both an exhibition space and an incubator for emerging technologies. Apart from being reminiscent of 2001: A Space Odyssey, it represents a milestone in computer controlled fabrication. The only inhabited structure of its kind in the world when it was first opened in May 2016, it was constructed using a 3D printer that measured six metres in height, 37 metres in length and 12 metres in width. The printer’s automated robotic arm used an additive concrete ‘printing’ technique to construct the building, which now acts as a hub for Dubai’s focus on innovation and knowledge. Subsequent work on the building’s management system, interiors and landscaping took a further three months.

Much of the office’s immediate surroundings, situated at the foot of Emirates Towers, are dedicated to innovation. Immediately next door, the Museum of the Future is beginning to take shape and is due to open next year. It will act as an incubator for futuristic innovations and design and, like the Office of the Future, is part of Dubai Future Foundation.

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The Museum of the Future will act as an incubator for innovation and design

A short walk away, just inside Emirates Towers, is Area 2071, a physical manifestation of the UAE Centennial Plan. A plan that aims to make the UAE the worldâ€™s leading nation by 2071. It hopes to achieve this by not only asking disruptive questions, but by evolving global systems capable of answering the toughest challenges facing humanity. How might we feed the next billion people?

Above: The Office of the Future, which was 3-D printed Top left: Saeed Al Gergawi, director of the Dubai Future Academy

How can artificial intelligence be used to help eradicate cancer? What if every child has access to quality education? Only through the commitment to a knowledge economy can these questions be attempted to be answered. At the heart of all this is an understanding that the world is undergoing revolutionary changes. Technology has altered the way

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we live, work, think and communicate, and will continue to do so at an unprecedented pace. It is transforming our world through never-beforedreamt-of innovation, accelerating the move away from mechanical and analogue electronic technology towards digital electronics and the Internet of Things. In the future, everything will be connected. Cars, fridges, televisions, washing machines, toasters, blenders, even dishwashers. It is even possible to imagine a world where science and technology live within people. The impact of all this is, of course, potentially colossal, with accelerating change – where the rate of technological advancement increases exponentially as time passes – leading to Ray Kurzweil’s theory of The Law of Accelerating Retur ns. That is, technological singularity, where artificial intelligence acquires the abil-

“Because of how fast things are happening, we tend to lose focus when we think about the future”

ity to create ever smarter and more powerful machines than itself. For these reasons, and others, Dubai has dedicated itself to innovation and the formation of a knowledge economy. In essence, to ensure that the city and the emirate are future ready. “There’s a quote that says ‘the science of today is the technology of tomorrow’,” says Al Gergawi. “Because of how fast things are happening, we tend to lose our focus when we think about the future. And because everything happens instantaneously it’s very easy not to focus on at least five years or 10 years from now. Which is why even on a national level the UAE launched its 2071 strategy in order to maintain that focus. Because once we start losing that aspect of thinking of the future and creating knowledge when it comes to how we adapt to the future, we lose the race when it comes to competing internationally.”

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Al Gergawi, a former programme director of the Mars 2117 programme, is well spoken, young and committed. He epitomises the zeal evident throughout the shared spaces, hubs and incubators that form an intrinsic part of Dubai’s focus on the future. The office itself is filled with bursts of natural light, while its main meeting area is sprinkled with relevant reading material. There are copies of Jennifer Gidley’s The Future: A Very Short Introduction, Michio Kaku’s Physics of the Future, and John Thackara’s How to Thrive in the Next Economy. There’s even a boxed gift from Dubai Genomic City. “It’s usually because we’re focused on our own sector or our own line of work that we don’t look at the different aspects and changes that might impact us,” adds Al Gergawi. “The example that’s always used is Kodak. They did not look at anything that’s digital, which ended

Dubai’s soaring towers are just one manifestation of the emirate’s drive towards innovation

up killing them, even though it was a byproduct of something they created within Kodak. They didn’t have the horizon scanning that was necessary for them to see that there’s this development happening and it will kill the company. “What are the different developments that we see happening now that will impact different industries? How will developments in fintech impact DIFC? What would blockchain do to the financial sector that we have already established here? “Dubai Future Academy aims to be a knowledge hub for those trying to create the future. How can we support these individuals, these entities, in trying to create the future of their sectors, or just the future in general?” It is finding answers to such questions and pre-empting them that is central to Dubai Future Foundation’s existence. When it was first launched in April 2016, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, said: “The future is not built on possibilities and numbers but on clarity of vision, planning, action and implementation.” To this end the foundation’s roadmap – Dubai Future Agenda – not only supports individuals, organisations and different industry sectors, it includes more than 20 initiatives to enhance the

“Kodak didn’t look at anything digital, which ended up killing them, even though digital was a byproduct of their creation” leadership of Dubai and the wider UAE. Amongst them are Dubai 10X, which calls on all government entities to embrace disruptive innovation, and the Dubai Autonomous Transpor tation Strategy, which seeks to transform 25 per cent of the emirate’s total transportation to autonomous mode by 2030. Even the Office of the Future is a cog in the wheel of transfor mation. It for ms par t of Dubai’s 3D Printing Strategy, which also falls under the umbrella of the Dubai Future Foundation. Launched in 2016, it focuses on the technology’s development for the benefit of the emirate’s residents, placing an emphasis on the real estate, construction, medical and consumer sectors. Its aim? To ensure a quarter of Dubai’s buildings are 3D printed by 2030.

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“We live in a fast changing world where the future can be felt right here in our present,” says Khalfan Belhoul, chief executive of Dubai Future Foundation. “Dubai has long realised the significance of keeping pace with future technology and making the best of innovation to shape a better future. Dubai Future Foundation represents

Innovation could be seen in the dredging of Dubai Creek in the 1960s the tangible outcome of this vision to define the future in the present. It is the manifestation of Dubai’s determination to take forward its significant experiences in aviation, trade, financial services and technology to the next level.” Innovation, of course, is nothing new to Dubai, although it has picked up pace in the past five years. From the dredging and deepening of Dubai Creek in the 1960s, to the inauguration of Port

Rashid in 1972 and the implementation of Dubai E-Government in 2001, it has consistently had an eye on the future. Not all of which have been easy, as Robert Webb, a former civil engineer with Sir William Halcrow & Partners, can confirm. Webb lived and worked in what was then the Trucial States between September 1964 and May 1968, constructing the souq wharf in Deira, extending the customs wharf in Dubai, deepening and dredging Dubai Creek, and eventually carrying out the initial site investigations for Port Rashid. “The initial vital engineering problem was the stabilisation of the Creek entrance, due to the high littoral drift causing shifting and unpredictable sand bars,” says Webb of the problems associated with deepening and dredging Dubai Creek. “Harry Ridehalgh, the responsible partner in Sir William Halcrow & Partners, published a paper on this in the Proceedings of the Institution of Civil Engineers in about 1963. “The sediments in Dubai creek consisted of alternating layers of sabkha, sand and hard crusty layers of cemented sand. These made dredging difficult. The way we overcame it was to carefully map the areas to be dredged, determining the depth to the hard layers by water-jet-wash-probing through the sand until solid resistance was found (usually with a loud ‘clunk’). The hard layers would then be drilled and blasted in patterns to break them up into sufficiently small pieces to enable all sabkha, sand and hard material to be dredged up with a cutter suction dredger, rather like a large water suction hoover with a large rotating set of steel teeth at the submerged suction end. The dredged material was than pumped to large reclamation areas along the sides of the creek, providing prime development land.” The impact of the work was immediate. “Dubai had a history of being a trading centre and the development of the Creek to allow commercial shipping cemented this position,” says Webb. “And as cargo volume increased, deepening the channel to accommodate larger coastal steamers and offshore supply boats firmly established Dubai’s preeminence in the Trucial States as the leading trade centre. This then led to the construction of Port Rashid, and later Jebel Ali Port, to enable alongside-loading and unloading of deep sea shipping. Up until then all deep sea ships had to offload into barges in the open sea for them to be towed into Dubai Creek.” Fifty years on, Dubai now has its sights set on being a world capital of innovation within the next 10 years. A goal that many believe is attainable. “Dubai was always seen as a fantastic, safe and secure holiday destination close to the

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world’s biggest population hubs; a place of amazing architecture and stunning buildings and wonderful shopping,” says Kevin Hasler, managing director of PR firm BPG Cohn & Wolfe. “But as Dubai continues its relentless upward path to be consistently recognised as one of the world’s leading cities, the need to diversify the story of the emirate has been apparent. “And in such a tech-savvy city with a young and switched on digital population, its commitment to smart government, innovation and creating a can-do environment for local and international entrepreneurs makes perfect sense. “The vision of Dubai – and the confidence with which it can be achieved – is of course in no small way down to the leadership of the Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum. But what is helping propel the city ever forward is how so many people – Emiratis and expatriates alike – have taken this spirit and applied it to the way they conduct business and are increasingly hard-wiring innovation into the way they operate. “And what Dubai is doing today in the field of innovation is not PR spin. It’s real, it’s happening and the world is sitting up and taking notice.

The UAE has unveiled a plan to colonise Mars by 2117, and will launch a probe in 2020

In the space of a few decades Dubai has grown to become a genuine player on the world stage – a city that while maturing is staying true to its young and experiential roots.” Interestingly, this innovation is not limited to Earth. In February last year, the UAE launched a plan to colonise Mars by 2117. It’s a vision that has many layers. The Emirates Mars Mission will send an unmanned probe to the planet in 2020, making it the first ever mission to the Red Planet by any Arab or Muslim country, while $ 136 million has been set aside for the construction of a city in the desert that aims to replicate life on Mars. All in preparation for 2117. Why? Because the breakthroughs in science and technology that such a mission will entail will be to the benefit of humanity. “What is nice about the space sector is that they’re leading a lot of the technology and the science aspect,” says Al Gergawi. “The question is how to transition those advance sciences and concepts into reality. So our goal will be to bring in the public and those experts from different sectors and have them meet. Because usually they don’t. That’s why we want to be that hub where people can come in and work together.”

CASHLESS KENYA

David Whelan discovers how Kenya is embracing a new, cashless future

here’s always money in the banana stand. That’s the phrase popularised by American sitcom Arrested Development in the mid-’00s that has now become synonymous with saving culture: hide your cash somewhere and have it for a rainy day. Except, that scene reflects a shift in the way we perceive and handle money. Spoken by the patriarchal, sixty-something George Bluth Sr, it’s not a surprise that, by the end of the episode, the banana stand is burnt to the ground – and all the money with it. This is a simple lesson that most growing economies are learning. Cash is precarious. As an object, it is losable or flammable. It is far safer and easier to do away with it entirely. Kenya is one such country; it has been leading the charge for the eradication of cash for simple, traceable digital transactions. Physical money is an antiquated concept; a tracking device designed before we had the technology to track everything. It’s now fairly common to manage your entire life digitally – from coffee purchases, to airline travel and all the way to large-scale investments. 2017 marked the 10th birthday of Kenya’s M-Pesa, a mobile phone-based money transfer and financing app that paved the way for Africa to emerge at the forefront of the world’s cashless revolution. M stands for mobile, while Pesa is the Swahili word for money. Originally perceived as an efficient way to manage loans, the service has become a key part of Kenyan life. There are now well over 70,000 separate vendors that accept M-Pesa as a form of payment, while, in 2013, 25 per cent of the country’s economy flowed through the app. And there is only one way to trace the curve: upwards. “Mobile money is not entirely new, with digital transactions being widely used as a means for the diaspora to transmit remittances,” says Christopher Suckling, senior analyst at HIS Markit specialising in assessing political, economic and business risk. Operated through Safaricom and Vodacom for Vodafone, M-Pesa allows for balances to be sent through PIN-secured text messages, deposits

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Nairobi is one of Africa’s largest cities, and one of the most technologically advanced

to be made and withdrawals – all at the touch of a few buttons (or squares pretending to be buttons on touch screen phones). The service is, of course, not an entirely benign practice – users are charged a small percentage for each transaction. Just this year, Safaricom moved into e-commerce officially, launching Masoko, which it hopes will take mobile money into the international world. “In Kenya, where the M-Pesa service is more than a decade old, mobile money has been a big driver in accelerating financial inclusion,” adds Lauren Pruneski from Tala, a digital finance service operating in Kenya. “The ability to safely send, store and transact money via one’s mobile phone enables more people to participate in the economic life of their communities, particularly those people who historically have been excluded from traditional financial systems.” “The spread of mobile money in Kenya is largely the result of M-Pesa’s market dominance, whereas neighbouring markets have been more competitive across infrastructure, licencing arrangements, and so forth,” says Suckling. “M-Pesa is owned by Safaricom (60 per cent

There are now more than 70,000 vendors in Kenya that accept M-Pesa

GoK, 40 per cent Vodafone) which owns a lot of the hard mobile infrastructure in Kenya and has the highest mobile network penetration. “Of particular urgency for the Kenyan security and mobile services has been developing capabilities to monitor the electronic transmission of remittances to neighbouring Somalia and identifying those utilised for the financing of terrorism. To this end, a raft of Anti-Money Laundering (AML) and Terrorism legislation has been approved in recent years.” This means that finances can be transferred, simply, into the wrong hands – and monitoring

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“It’s a mobile money revolution. More than 10 million transactions are conducted every day”

transactions is a constant requirement throughout the continent. This isn’t always easy – with the installation base constantly rising. From 2007, M-Pesa grew exponentially. Halfway through its life, it had 17 million registered users in Kenya alone. According to Wesley Diphoko, founder of Kaya Labs, “the greatest thing is that Africans are also playing a role in making this move possible”. It is not simply a move from without to within: Kenyans are doing it for themselves. M-Pesa now boasts, according to Kenya’s Communications agency, an 80.8 per cent market share of mobile money services, beating out international and local competitors; it is a dominant, indigenous force. “Kenya has led the mobile money revolution,” says Pruneski. “At least 96 per cent of Kenyan households have at least one member using M-Pesa. More than 10 million transactions are conducted on the network per day.” Two African created apps have assisted this transformation. Yoco and SnapScan, founded by Katlego Maphia and Kobus Ehlers, respectively, simplify the process for entrepreneurs to receive payment electronically. Crucially, these are apps designed for the people of Africa – and not an app mapped over another economic or social model, and transplanted into African territory. Diphoko predicts that, within the next ten years, the entire continent could become cashless. This would benefit one crucial aspect, economy, as, finally, “the true reflection of economic performance as most transactions will be captured”. “Tala was the first company to provide unsecured loans via smartphone when we launched our Android app in Kenya in 2014,” says Pruneski. “Our innovation is in how we use data science to underwrite individuals with little or no credit history. When a customer downloads our app and begins the loan application process, he or she also gives Tala permission to view the data on their smartphone. Our proprietary models then assess thousands of mobile data points including social connections, texts and calls, utility bills, and merchant transactions to instantly determine the customer’s creditworthiness.

Approved borrowers receive credit in a few minutes to their M-Pesa wallet.” Other observers are less enthusiastic. “In emerging markets,” Pruneski says, “the World Bank estimates that more than 70 per cent of MSMEs lack access to credit. Three billion people around the world are underserved.” The issue is how Kenya’s model could be replicated elsewhere. We are, as a people, dedicated to cash. It’s yours. It’s private. Cash does not know nor indeed care who is holding it. It is servant of whoever has it in their pocket. It is untaxable, beyond reproach – there is a primitive sense of security when you have money in your hand, which is only increased when you hide it somewhere only you know. You cannot hack a note or a coin. This will change, of course, once societies become digitally native – but for now, cash is still a king of sorts. And it may not even be in decline. Kenya won out thanks to three simple factors. It had a dominant mobile service, Safaricom, a huge mobile phone base and a killer app. These three aspects do not apply to every country on the continent. Looking further afield, it doesn’t necessarily work everywhere. “A combination of this dominant market position, first mover advantage, and quicker regulatory change has resulted in Kenya leading in mobile money uptake,” continues Suckling. “In general, Kenya’s Central Bank is about five years ahead of regional peers in developing and implementing regulation on mobile money to digital currencies. Underpinning all of this is Kenya’s strong tech sector.” Back in November 2016, Indian Prime Minister Narendra Modi announced that the government would be removing the Rs500 and Rs1,000 notes – overnight. This effectively meant that 86 per cent of the cash in circulation in India was made

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redundant at the sound of a bell. Unsurprisingly, this caused a fair few issues, in particular with the poor – who do not have access to banks and whose financial transactions were 97 per cent cash. Savings were rendered worthless and entire industries – such as New Delhi’s informal recycling systems – had to reconfigure how they paid their workers. A shift to cashless caused a great swathe of upheaval – and the poorest people suffered. There was no grand plan like there is Kenya; the process did not grow from a fertile garden but, rather, it attempted to replicate the model with no prior research. Kenya, by contrast to India, has a long standing history of internal migration – of workers moving from the country into urban cities. Money had always been sent home, but before the rise of M-Pesa it would often take days and, often, would not even arrive at all. “The biggest criminal risk to mobile money inside Kenya is fraud and circulation of counterfeits,” says Suckling. “There are tens of thousands of mobile money agents and this makes Know Your Customer systems difficult to implement.” The market, then, was ready for M-Pesa, but wary of its pitfalls – transactions were made instant. A person could work in Nairobi and their family could have access to their wages within seconds. Another factor against growth is that, throughout Africa, telecom companies have to share the market: so there are over 200 different M-Pesa

“The biggest criminal risk to mobile money inside Kenya is fraud and circulation of counterfeits”

alternatives across the continent. The issue here is, of course, that it is near impossible to accept or use them all. They’re competitors for a reason. In 2013, for example, approximately 85 per cent of the world’s transactions still involved cash – with Egypt, Saudi Arabia, Peru and Malaysia only making one per cent of transactions in credit. M-Pesa is also not a foolproof system. It is – by international standards – inelegant. Just this year, a report surfaced of a shop being robbed of $3,657 after the mobile phone synced with M-Pesa was stolen and used to transfer funds to a variety of accounts. This is not an isolated event and it is part and parcel of the technology: a phone, easily stolen, is locked only by a PIN, an antiquated lock system. In 2012, M-Pesa grew out a new branch, M-Shwari. This was to battle against the obvious criticism that a telecom service could never function like a bank and to provide a further safety net for earned money: money would flow and change hands, but never be held or allowed to accrue value. M-Shwari functions as an interest-bearing savings account that offers microloans – and, in a nation where most people do not have access to private computers or stable internet banking, accrued 1.2 million subscribers in its first year. According to a study conducted by Kenya’s National Bureau of Statistics in 2015, only 9.5 per cent of the country’s small to medium enterprises

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A man uses a smart card at a mobile water dispensing machine in Nairobi

conducted business through a computer. 40.7 per cent of enterprises operated through phones. “The mobile market is all very cheap and very flexible,” says Suckling. “You can look up exact tariff prices on the major carriers. And, adding to this, there is a huge market in second-hand phones.” In April of this year American heavyweights PayPal announced a breakthrough deal with M-Pesa – potentially altering the landscape forever. This unites PayPal’s 200 million clients with Kenya’s 23 million M-Pesa users, allowing for international transfer between the two systems instantly. Straight from a phone. Diversification is a huge part of M-Pesa’s consistent control over the Kenyan marketplace. “In 2016, MIT’s Tavneet

Suri and Georgetown’s William Jack published a study finding that increased access to mobile money has lifted an estimated 194,000 households out of extreme poverty,” says Pruneski. “M-Pesa has had a particularly beneficial impact on women, enabling 185,000 to move out of subsistence farming and into business or sales occupations.” The African continent has been keeping pace, too, with the implementation of a variety of cellular regulations that are years ahead of European or American counterparts. “One Area Network comprises East Africa Community (EAC) members,” says Suckling. “It streamlined tariffs and many interoperability when roaming between countries in the EAC. It’s an interesting case given it effectively achieves what UK roaming can now do in EU, but was a couple of years ahead.” This makes transferring money through M-Pesa across nations easier and more difficult to trace.

“The number of mobile users will reach 4.7 billion worldwide by 2020” But, there is hope for a Kenyan like model to take off around the world – and unite those traditionally disconnected from financial services to enjoy the same benefits of those that have. “Mobile phone penetration rates continue to rise in the developing world as both feature phones and smartphones come down in price,” says Pruneski. “In 2017, the number of unique mobile subscribers surpassed 5 billion globally, with the fastest rates of adoption coming from emerging markets like China, India, and Sub-Saharan Africa.” “Additionally, the number of people accessing the internet from a mobile device has doubled over the past 5 years, to 3.6 billion, and is expected to rise to 4.7 billion by 2020. By the end of 2016, mobile broadband network coverage had grown to reach 83 per cent of the world’s population. Also in 2016, more than 100 million new mobile money accounts were registered. While there is still much work to be done to improve connectivity and scale mobile-enabled solutions, we are moving quickly towards a future in which mobile phones are ubiquitous and connecting individuals everywhere to life-enhancing services.” It seems, then, that time is the only factor of replicating Kenya’s great success throughout the world. That and a shift in ideology – taking us away from the grounded banana stand and looking upwards, to a united cloud.

WHAT NEXT FOR SAMSUNG? Jesse Onslow Norton examines the past and troubled present of South Koreaâ€™s biggest company

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he birthdays of global corporations are usually a cause for extended celebration and year-long publicity campaigns designed to highlight every success the company has ever experienced. This year, however, one of the world’s most powerful conglomerates made the unexpected decision to skip the celebrations due for its 80th year in business. Samsung – the South Korean company best-known for manufacturing smartphones, televisions and other electronics – saw little reason to draw attention to the significant challenges it has been embroiled in over the past 12 months. Over its 80 years in business, Samsung has been transformed from a humble grocery distribution outfit to a multinational conglomerate whose products are found in pockets, homes and workplaces all across the world. But despite its status as a household name brand, the past few years have proven difficult for the company. First came the disastrous launch of the Samsung Galaxy Note 7, the only tablet computer in the world to have been blanket banned from aircrafts in many countries over fire safety concerns. Then came a corruption scandal that has resulted in the impeachment of South Korea’s first female president and left Samsung’s de facto leader embarrassed and battling for his freedom. Samsung now finds itself at a crossroads. South Korea’s largest conglomerate has consistently set itself apart from its competitors with its long-term commitment to innovation. But as its fortunes appear to be waning, the company’s bold vision for the future is being replaced with a

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By 2014, Samsung employed 490,000 people, more than Apple, Microsoft and Google combined

much more sombre reflection on its origins and the status it inhabits within South Korean society. So how did this story begin? On March 1, 1938, a college drop-out named Lee Byung-chul founded a small trading group called Samsung. With a capital investment of just 30,000 won (around $27), Lee hired 40 employees to distribute groceries in trucks across the Korean Peninsula. The company found early success and quickly gained a reputation for producing noodles, before later expanding into sugar and wool. As it matured, bold and frequent diversification would become a key growth strategy and one of the company’s defining characteristics. Following the Korean War, Samsung successfully consolidated its position and expanded into the insurance, securities and retail sectors. It wasn’t until the late 1960s that the company produced its first black and white television and moved into the industry that it would eventually dominate and drive forward: consumer electronics. Today, Samsung is one of the largest and most diverse companies in the world. As of 2014, the conglomerate employed 490,000 people across all of its divisions – more than Apple, Microsoft and Google combined. Samsung Electronics, it’s largest division, is the world’s leading vendor of televisions and electrical appliances, but the conglomerate also operates across biotech, manufacturing, construction, finance and marketing. For most consumers, however, it is the company’s smartphones that are its most recognisable product. In 2016, the company discontinued its flagship Galaxy Note 7 after a battery fault was discovered that could cause phones to catch fire or even

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explode when put on charge. In total, Samsung was forced to recall more than 2.5 million phones and cut revenue expectations by $41.8 billion as it suffered a 33 per cent drop in operating profits. This was a disaster for a company that makes as much as 40 per cent of its total revenue from smartphone sales, and it has struggled to regain the confidence of consumers ever since. Last year, Samsung lost its status as the largest smartphone player in India, a key battleground with its Chinese competitor Xiaomi. The Chinese tech unicorn has aggressively undercut Samsung on smartphone prices to reach new consumers across the developing world. It has done so at a time when smartphone ownership is reaching peak saturation across more advanced economies. In China itself, Samsung no longer even ranks in the country’s top five smartphone sellers. While Samsung has been the world’s top smartphone seller for years, some estimates suggest the company dropped behind its American competitor Apple in the fourth quarter of 2017. According to market research firm International Data Corporation, Samsung’s global market share dipped from 23.3 per cent to just 18.9 per cent over the course of last year. But as troubling as the news of international sales may have been for Samsung during 2017, it would be domestic

Koh Dong-jin, president of Samsung’s mobile communications division, explaining how the company will fix the Samsung Note 7

affairs that would ultimately cause the conglomerate the most headaches. In its home country of South Korea, Samsung single handedly accounts for roughly 20 per cent of the nation’s total GDP, but its significance goes beyond the economics. Samsung has achieved a unique status as part of the country’s culture and identity, and has become involved in just about every aspect of nation’s social and political life. From building tanks and weapons systems to aid the ongoing standoff with North Korea, to operating hospitals, investment banks and even its own city, Samsung touches everything in Korea. As a result of its omnipresence, the company’s success or failure is intrinsically tied with that of the nation as whole. This has led to both the national government and international organisations such as

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the World Bank and the IMF to label the company as too big to fail. The interdependence of Korea’s vast corporate conglomerates and national interest has created a revolving door between the boardrooms of the biggest companies and the country’s National Assembly. But the unorthodox governance of Korean companies has created rising tensions in Seoul as critics highlight the potentially damaging accumulation of power within just a few of the country’s wealthiest families. In South Korea, it is common for companies to be overwhelmingly controlled by a single founding family that typically holds only a small portion of the total equity. Companies that are managed in this way, like Samsung, are known as chaebol. They are able to make fast, incisive business decisions with an emphasis on long-term growth. And

In South Korea, it’s common for companies to be controlled by a single founding family

because the chaebol companies are family-run, the directors are less concerned with short-term shareholder value and instead seek to maximise the value that their sons and grandsons will inherit. Korea’s unusual chaebol system has been credited as the reason for the international success of its biggest brands. Samsung, LG Electronics and the Hyundai Motor Company have each been able to rapidly expand across both Asia and the West. But while their global success has benefited the country’s economy, protests against the monopolistic power wielded by these companies have become more and more frequent. In 1997, following the Asian financial crisis, the IMF mandated that the countries leading chaebols be opened up to external auditors for the first time. A government investigation was launched into Hyundai Group, which at the time was the country’s largest chaebol. Officials claimed that the conglomerate had used company funds to artificially inflate the firm’s share price and conceal enormous debts it had accrued during the collapse of the Asian property bubble.

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Samsung chairman Lee Kun-hee suffered a heart attack in 2014 and his son Lee Jae-yong has been de facto leader of the company ever since then. The ride has been far from smooth for the Samsung heir. Last summer [2017], Lee was found guilty of bribery, embezzlement, hiding assets overseas, concealing profit from criminal acts, and perjury in what South Korean media called “the trial of the century”. He was sentenced to five years in prison as a result – the longest sentence ever given to a South Korean chaebol leader. Four other Samsung executives

Top: Lee Kun-hee, former Samsung Group chairman, leaves court after his trial Above: Jay Y Lee, co-vice chairman of Samsung Electronics, after he was found guilty of bribery

were convicted on similar grounds, receiving sentences of up to four years each. Most of the charges relate to significant donations from Lee to foundations linked with the former South Korean president Park Geun-hye, which were understood to be in exchange for political influence. Samsung was also accused of providing billions of won to fund the overseas equestrian career of Park’s daughter. In return, Lee allegedly sought government support for an $8 billion merger of two Samsung affiliates that would consolidate Lee’s power back in 2015. Lee has continued to deny the allegations against him and served just five months in jail before his sentence was reduced and suspended by an appeals court. He was set free soon after. While Lee’s trial was a publicity disaster for Samsung – as demonstrated by more than 400 people applying for the 30 seats in the public gallery – his quick release leaves questions about whether this situation will truly have an impact on Samsung or chaebols in South Korea. Deposed leader Park was fined $17 million and sentenced to 24 years in prison last month [April 2018] after being found guilty of a string of corruption charges following her impeachment. The South Korean public has called for the government to address decades of corruption involving senior politicians and family-run conglomerates. The scandal has created greater awareness and

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encouraged criticism of the long-standing relationships between the political elite and the chaebols that dominate South Korea’s economy. Park’s former political opponent, the liberal Moon Jae-in, swiftly replaced her as president on a populist platform of cleaning up government. With Samsung accounting for so much of South Korea’s economy, the conglomerate may well be a hot target for the new president as she seeks to make her election campaign a reality for the country. In March 2018, Samsung Electronics took measures to improve the governance of its board

Below: Kwon Oh-hyun, co-vice chairman of Samsung Electronics Bottom: Korean leader Park Geun-hye announcing she is willing to stand down as president

of directors. For just the second time in the division’s 49-year history, the firm appointed a woman to its board of directors – a rare move in Korea’s corporate world. The firm also separated the role of chairman from that of the chief executive officer as part of its efforts to modernise its management structures. Speaking at Samsung’s annual general meeting of shareholders for the 2017 financial year in Seoul, the current chief executive and vice chairman, Kwon Oh-hyun, said: “The separation will further empower the board of directors and enhance its independence. The board will be able to evaluate the company’s performance more objectively and have greater authority and efficiency as a decision making body… I believe this is the right time for a younger leadership to take the helm of the company to better respond to a rapidly changing global IT industry.” But despite Kwon’s optimism for the youthful energy of the new management structure, the average age of a Samsung Electronics board member is now 60 – far higher than its Asian competitors, not to mention equivalent juggernauts in Silicon Valley and other tech hubs around the world. Kwon himself retired in March, shortly after the annual general meeting, citing the “unprecedented crisis” the company faces in relation to the recent corruption scandal as a key factor in his decision. Shareholders, however, reacted to the announcement with scepticism saying that as long as Lee continues to head the company the crisis is likely to continue. Technology companies all over the world are struggling to attract the necessary young talent to drive new innovation and future-proof their operations. For Samsung, the ability to move past its recent difficulties and begin to build a reputation employees are proud of could be key in the company’s success or failure going forward. For Samsung’s heir, the answer lies not in the company’s homeland, but in Europe. In March, Lee took his first trip since being released from prison and began immediately searching for a “new engine for growth” for the company outside of Korea. It’s anticipated that this year will see Samsung double-down on mergers and acquisitions that allow it to regain control of the smartphone market. Samsung has come a long way since its beginnings as a Korean grocery distributor. Its dedication to continuous improvement and iteration has seen it rapidly expand across sectors in search of new markets. But as the company looks to leave its troubles behind, its fate may be determined by its past as much as it is by its bold vision for the future.

Lauren Razavi examines how the retirement of billionaire tycoon Li Ka-shing reflects the changing face of Hong Kong

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master dealmaker, a fearless tycoon, an investment guru, and Asia’s answer to Warren Buffet – these are the words used to describe the prominent businessman Li Ka-shing, the richest person in Hong Kong and the 23rd richest person in the world, according to Forbes’ annual list of billionaires. This month, the 89-year-old Li is set to retire as chairman of CK Asset, his property group, and CK Hutchison, his main holding company, following the merger of Cheung Kong Holdings and Hutchison Whampoa in 2015. “Looking back all these years, I am blessed to have had the chance to build Cheung Kong and to have served society,” Li said at the press conference announcing his retirement in March. It had been his “greatest honour”, he added. From media to biotechnology to infrastructure, Li’s conglomerate touches the lives of practically everyone in HK and an ever-increasing number of people across the world too. Amongst a variety of other assets and brand names, Li’s operations currently include 52 ports across 26 countries, numerous retail chains, including Watsons in Asia and Superdrug in the UK, and a variety of energy and utility firms worldwide. Soon, Li will pass the

$100 billion global empire to his son, Victor.

Li’s retirement is a symbolic turning point for Hong Kong, where the economy has long been dominated by an exclusive circle of business tycoons. Now, as mainland China’s global influence continues to expand, Hong Kong’s next generation must face the challenge of honouring their families’ legacies. So how did Li Ka-shing create Hong Kong’s most powerful business empires and what does his retirement mean for the future of Hong Kong? Li was born on July 29, 1928, in Chaozhou, a city in Southern China’s Guangdong Province. In 1940, at the age of 12, his education was halted and his family was forced to flee as wartime refugees. Following their arrival in Hong Kong, Li took a job sweeping factory floors and spent time caring for his sick father, who died of tuberculosis shortly afterwards. It was from these humble beginnings that Li built his empire, aided initially by his marriage to a wealthy cousin. During his teenage years, the ambitious Li worked 16-hour days at a plastics company. Following the war, he made his first fortune by manufacturing plastic flowers, and by the late 1950s, he bought the site of his factory when he was unable to renew the lease, which kickstarted his property

CK Hutchison’s business operations stretch more than 50 countries and employ over 300,000 people

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Li Ka-shing started off sweeping factory floors and made his first fortune manufacturing plastic flowers

portfolio. Sensing an opportunity, Li invested in local Hong Kong real estate as others sold in the years that followed. He did this most notably in 1967, when riots inspired by Mao Zedong’s Cultural Revolution in China spread to Hong Kong and sent the city’s property prices plummeting. In 1979, Li won the suppor t of the two great colonial banks in the region – Standard Chartered and Hongkong and Shanghai Bank – which enabled him to prosper further. Hongkong and Shanghai Bank (now HSBC Holdings PLC) agreed to sell Li its stake in the investment holding company Hutchison Whampoa at less than half of its book value. This symbolic coup came as a result of private negotiations and the bank even went so far as to finance the deal.

Li’s purchasing of these Hutchison shares made him the first person of Chinese origin to own one of the British-founded companies that had dominated Hong Kong’s economy since the colony was first founded in 1841. The status and attention that came with this helped Li make inroads in China, where he mixed financial interests with political connections to become even more prominent. During Britain’s handover of Hong Kong in 1997, he was appointed as a senior advisor to the Chinese government and served on the committee responsible for writing the city’s mini-constitution under Chinese rule. Some of Li’s notable deals include profit of $15 billion on the sale of UK mobile phone network Orange to German multinational Mannesmann Group in 1999, becoming the world’s largest private port operator by 1991 following the purchase of Felixstowe port in the UK, and completing a $5.8 billion takeover of Australian power

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provider Duet Group in 2017. Mainly through his private investment arm Horizons Venture, Li is also a major tech investor who, amongst many other companies, has provided funding to Facebook, Spotify and Skype. Today, Li has a fortune of $34 billion, according to the Bloomberg Billionaires Index, marking him out as the city’s richest figure for an entire generation. His career has spanned more than half a century and the local press in Hong Kong have dubbed him “Superman” for his legendary business acumen. Those who have worked with him say he is equal parts ruthless and amiable. Despite his many successes, the self-made businessman’s legacy is not without its controversies. Li is part of a generation of Chinese immigrants who moved from the cities, towns and villages of their homeland to build business empires and significant fortunes all across Asia. As the most prominent of the Hong Kong tycoons who took advantage of the reforms of Chinese leader Deng Xiaoping, Li became a major figure in China’s emergence as an economic superpower. In the early days, he shouldered considerable financial risk to help the country attract foreign trade and enter global markets as it opened up to the rest of the world.

Hong Kong is today ranked as one of the world’s most unequal societies

In Hong Kong, Li’s status has moved from heroic to questionable in recent years as close relations between politics and business have been subject to more public scrutiny than ever before. While his rags-to-riches story of peddling plastic flowers was once celebrated as symbolising meritocracy, more recently he has come to represent unjust political influence and a system dedicated to preserving the status quo instead. July 2017 marked 20 years since Hong Kong waved goodbye to colonial rule and was handed back to China. But the celebratory mood was tarred by the city’s growing social problems. Government data shows that income inequality has reached its highest level in 40 years, with the wealthiest 10 per cent of households earning 40 times more than the poorest 10 per cent, according to an income report published by the Census and Statistics Department last year. Hong Kong’s property market is squeezing the population’s poorest and pricing young people out of home ownership and affordable rents entirely. The

charity Oxfam, in response to the recent census data, has called Hong Kong one of the most unequal cities in the world. Young Hong Kong residents today see a lack of upwards mobility that means they could never hope to have a rags-to-riches story of their own. An increasingly resentful population views life as difficult and expensive, and wealthy individuals like Li as a negative force for their society. According to a report by real estate consultancy Knight Frank, Hong Kong was home to more than 4,000 ultra high-net worth individuals in 2016, although mainland China boasts more than three times that number. Many wealthy people from China have also purchased property in Hong Kong,

Li Ka-shing’s retirement is the end of an era for Hong Kong’s moneyed elite

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pushing up housing prices in the territory even further. The report also highlighted that Hong Kong has the world’s third largest concentration of individuals worth upwards of $30 million, with only London and New York ranking higher. Victor Li, the eldest of Li Ka-shing’s two sons, is set to take over at CK Hutchison when his father retires. At the age of 53, Li has spent decades working as his father’s apprentice in preparation for the challenge. But those who inherit a conglomerate from a parent like Li Ka-shing often battle with the responsibility, and lack the drive, luck and vision of their predecessor. Other business empires such as the Lee family’s property firm Henderson Land and the Cheng family’s property and infrastructure company the New World Development have already tackled and completed the transition to a new generation. Hong Kong society has shifted considerably over recent decades, however, and the monopoly power that their fathers enjoyed has become less acceptable than before. For Victor Li, however, analysts predict a struggle to emerge from his father’s shadow – although his father has left him well prepared.

“Li has prepared his successor since a young age. For several decades, Li trained Victor in overseas projects and later put him in charge,” says Joseph PH Fan, co-director of the Centre for Economics and Finance at the Chinese University of Hong Kong. “The associated diversification and relocation of tangible assets to, for example, Western Europe is part of the long-term succession plan, considering Victor’s comparative advantage in developed markets over emerging markets such as China.” Undoubtedly the biggest challenge faced by this new generation of business leaders is the fierce competition coming from mainland China, which grows tougher and tougher each year. Today, Li Ka-shing’s personal fortune of $34 billion marks him as Hong Kong’s richest man but positions him significantly behind Chinese internet tycoons Jack Ma of Alibaba and Pony Ma of Tencent, who are worth $50 billion and $47 billion respectively. These figures highlight the economic shifts that are currently unfolding in Asia as China continues its exponential rise to global prominence. Aware of the changing tides, Li dedicated time and resources to making his empire increasingly

“Li has prepared his son to take over the business for decades, training him in overseas projects”

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international in recent years in order to prepare for Victor Li to take the reins of the business. For example, he recently sold an office building in Hong Kong for a record $5.15 billion, while buying oil pipelines in Canada, a water supply company in the UK, and a gas distribution business in Australia. Overseas diversification has laid the groundwork for his succession, although Chinese state media have criticised these moves, labelling them as “unpatriotic”.

Opposite: Li Ka-shing with China’s Xi Jinping Below: The HQ of HongKong Electric Co, one of Li’s myriad companies Bottom: Li and his son Victor (on his right)

Li has always had a star quality about him and, even today, the straight-talking entrepreneur can move whole markets with a few well-placed words. Despite being in his late 80s, a 2016 interview with Bloomberg revealed that he still works 16-hour days every single day of the week. It’s perhaps no surprise, then, that he won’t be retiring from public life completely. When Li steps down as chairman this month [May 2018], he will remain as a senior advisor to CK Hutchison, offering guidance for the business operations stretching more than 50 countries and employing more than 300,000 people. A dedicated philanthropist throughout his life, Li will also focus on his charitable work through the Li Ka Shing Foundation. “Li will never be fully retired. He will continue to lend reputation to his successor and the family business group to the very last day,” Fan says.

Hong Kong needs to find a new way to innovate, or it faces being left behind by mainland China for good According to financial markets research firm Dealogic, Li’s main parent company has acquired more than 300 companies worth $185 billion over the past 25 years. To put it lightly, his significance as an Asian business leader has been substantial. Will business in Hong Kong be the same without him? “Li’s retirement symbolises the end of the period of the first generation of tycoons in Hong Kong. How the businesses will evolve and how successful [they will be] are important questions. It’s not only relevant to the founding families but to society too,” Fan explains. “To policymakers in Hong Kong, it’s critical to contemplate policies to fill the space left by retired tycoons, in order to facilitate entrepreneurship in a new generation.” Hong Kong has long enjoyed a reputation as the gateway to China, but if it is to sustain its global status it must find a new generation of entrepreneurs to lead it. The opening up of China to international investment has seen Beijing, Shanghai and Guangzhou flourish as international business hubs. Hong Kong must now reassess its strengths and find new ways to inspire innovation, otherwise it could be left behind for good. As an editorial from the South China Morning Post so aptly puts it: “It is doubtful there will ever be another self-made tycoon quite like the city’s richest man, who built an empire woven into the fabric of Hong Kong life that spans the world.”

CITY LIMITS David G Taylor takes the temperature of Chicagoâ€™s property market

Chicago is said to have offered a $1.32 billion tax incentive to Amazon, desperate for the firm to locate in the city

tlanta is “a fetid swamp, hotter than the sun”, in Newark “buildings are made of solidified smog” and Washington, DC “is a hive of deception and villainy”. That’s according to an article in the Chicago Tribune earlier this year. The name-calling came as Amazon was deciding where to build its new $5 billion headquarters, the retailer’s second in North America. The article declared that Amazon would choose Chicago, “because other locations are hot garbage”. Listing the 20 shortlisted places, the Tribune gave most of them short shrift. Boston, it said, was “basically a bar fight that turned into a city”. Indianapolis has “more serial killers per capita than anywhere in the nation”. Los Angeles was “likely to be jettisoned into the sea by an angry God”, and Montgomery County, Maryland “is inhabited largely by cannibals and mole people”. Last autumn, Mayor Rahm Emanuel set out why he thought Chicago would be the best choice for Amazon or any other business, arguing that America’s third-largest city offered culture to rival Seattle, San Francisco and New York at “one-third of the cost of living of those cities”. It seems when it comes to the talent pool, Chicago, Illinois, also scores highly, with 150,000 fresh-faced graduates emerging annually from institutions such as the University of Chicago, currently #9 in the QS World University Rankings, and Northwestern University, ranked #28. Chicago was said to have offered a $1.32 billion tax incentive to Amazon, so clearly, the gloves came off. At the time of writing, a decision by Amazon was imminent. If chosen, Chicago would have beaten proposals by around 238 cities and regions, not just in the US but also from neighbouring Canada and Mexico. Since

the staff requirement of Amazon’s HQ is estimated to be around 50,000, housing costs for management and other employees will be a key factor in Amazon’s final decision, which could give Chicago the edge. A 2018 report by international real estate brand Caldwell Banker has revealed Chicago prices – at the market’s upper end, at least – to be unusually inexpensive. Caldwell Banker found luxury condominiums retailing for an average of $383 per square foot. This compares with a median of $3,331 per square foot in New York, $1,296 in San Francisco and $ 1,225 in Boston – the three most expensive in America. Buying in Chicago also worked out cheaper on average than Los Angeles at $1,225 per square foot, Miami at $ 593 and Washington, DC at $554. The revelation prompted ChicagoBusiness. com to write in February: “Chicago’s high-end homes are a bargain.” “[If people] really understood how much less expensive it is here, more of them would be exploring relocating to Chicago,” Jenny Ames, a local Caldwell Banker agent, told the business news and analysis website. Brands such as Walgreens, Motorola, Boeing, United Airlines, McDonald’s and Kraft Heinz are already deeply ensconced in the city and stand testament to the diverse industries powering the Chicago of today, which range from auto and food manufacture to biotech and information technology. Despite having some of the highest property taxes in the US, the slow recovery of Chicago’s property market, its amenities and cultural scene, a wealth of prime river and lakefront locations, a strong transport infrastructure and a range of prestigious new building developments, all add up to making Chicago a tantalising option for businesses and property investors.

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Chicago is currently ranked fourth for real estate investment on Schroders’ Global Cities Index. Currently the city has much to crow about, having also set a new tourism record for 2017 with 5.2 million visitors, that’s a 2.5 per cent increase from the previous year. “Chicago is experiencing a surge in visitors and new residents alike, in part fuelled by Chicago’s incredible growth in high-end hotels, top-rated restaurants and new and emerging shopping and entertainment districts,” David Whitaker, president and CEO of the city’s official tourism agency, Choose Chicago, tells Portfolio. Recent announcements include an $8.5 billion eight-year plan to expand O’Hare International Airport, beginning in 2019, and the Barack Obama Presidential Center public library and museum in the renovated Jackson Park, due to open in 2022. There are several new hotel projects underway too. The former Atlantic Bank Building on Michigan Avenue, for instance, is undergoing renovation ahead of its autumn reopening as the Hotel Julian. It’s named in honour of St Julian the Hospitaller, the patron saint of innkeepers. Mayor Emanuel didn’t exaggerate its cultural pedigree, a key attraction. The city has as many as

Chicago is home to 25 Michelin-starred restaurants, a wealth of museums, galleries and universities

25 Michelin-starred restaurants, including Alinea and Grace, which have three stars each and serve exquisite French and American cuisine, respectively. Chicago also offers a wealth of museums and galleries, including the Art Institute of Chicago, a diverse trove of treasures, housing the largest collection of Impressionist and post-Impressionist art outside the Louvre. One notable example is The Bedroom, 1889, Vincent van Gogh’s depiction of his frugal living arrangements. Far grander is the work of legendary architect Frank Lloyd Wr ight, who’s f amously name-checked in a song by 1970s duo Simon & Garfunkel. Wright spent the first 20 years of his career in Chicago and the city boasts some of his finest buildings, many of which can be toured, including The Frank Lloyd Wright Home and Studio, and his modernist Robie House, which is now part of the University of Chicago campus. If it’s influential names you’re after, then Chicago has more than its fair share. It’s a list that includes animator Walt Disney, punk singer-songwriter Patti Smith, Playboy magazine publisher Hugh Hefner, choreographer Bob Fosse, playwright David Mamet and authors Ernest Hemingway, Michael Crichton and Philip K Dick. Not forgetting actor Harrison Ford, who starred in Blade Runner, the film adaptation of Dick’s post-apocalyptic novel Do Androids Dream of Electric Sheep? Born and raised in the city, Ford told the city’s Michigan Avenue magazine: “I love Chicago. I love the energy of the place, the architecture, the people, the rigour of the place. Bitter cold in the winter, fierce winds, hot summers… I am always happy to go back.” Getting back to the subject of property investment, I ask Jim Kinney, vice president of

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CITY LIMITS Millennium Park

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Luxury Home Sales at Baird & Warner, Chicago’s largest independent residential real-estate company, for his insider’s view. How has the city’s luxury property market fared in recent years, and what’s the current state of play? “The high-end market has been the most challenged in recent times,” Kinney tells me, “in part, because the inventory is harder to move. One issue is that new consumers are attracted to newer developments like One Bennett Park in Streeterville, Renelle on the River in River North, and No. 9 Walton in Gold Coast. That means resales north of three or four million – except for a couple of recent sales in the Trump Tower, the [art deco] Palmolive Building and 11 E Walton [situated above the Waldorf Astoria Hotel] – have seen the most challenges. New buyers are flocking to state-of-the-art finishes, and with re-sales, it may be that not everything is at that same level.” Of the new builds mentioned, One Bennett Park is a residential skyscraper, designed by Robert AM Stern and due for completion this winter. The New York-based architect is renowned for his work on structures such as Philadelphia’s Comcast Centre, its tallest building. Sitting

“High-end consumers are attracted to newer buildings, so the older houses are harder to sell”

besides expansive Lake Michigan in the affluent Streeterville neighbourhood, One Bennett Park is an 850-foot development set to be the tallest all-residential building in Chicago, its 67 stories offering spectacular views and close proximity to beaches, marinas and parks, the famous Navy Pier with its Centennial Wheel and attractions such as the Museum of Contemporary Art and Shakespeare Theater. The 60 condominiums on offer will range from two to four bedrooms at 1,737 to 5,130 square feet, and sell for between $2 million and $6.22 million. Downtown, Renelle on the River is an elegant 18-storey tower next to the Chicago River, situated in the former industrial district of River North, a trendy urban neighbourhood close to the shops of Michigan Avenue. Designed by bKL Architecture, Renelle will be completed in early 2019 and offer 50 three- and four-bedroom luxury condominiums. These range in size from 1,827 to 3,434 square feet and cost upwards from $1.2 million to $3.2 million. No. 9 Walton, meanwhile, sits in Chicago’s historic Gold Coast, a neighbourhood established in the early 1880s by millionaire businessman Potter Palmer and notable for its sandy beaches, 19th-century mansions, upmarket restaurants and luxury boutiques – mostly notably in the prestigious Oak Street shopping district. Due to be completed this year, No. 9 has been designed by the award-winning Hartshorne Plunkard Architecture. It comprises 66 two- to six-bedroom residences, ranging from 1,950 to 2,703 square feet and priced from $1.75 million to $2.6 million. That’s what’s happening now, but which neighbourhoods are being gentrified and where are the hottest locations for high-end investors, I ask Kinney? “The West Loop corridor and Fulton Street area, which has had a lot of tech industry commercial development in recent years, is now seeing some residential popping up,” he says. “People working in tech want to live close to work.” So, what upcoming developments should we be paying particular attention to? “In the past few years condominium project financing has been more difficult to get, and the emphasis and interest has been in multi-family rental development,” Kinney explains. “It’s now with the two larger condo developments, Vista Tower at 363 E Wacker Drive and the new Helmut Jahn-designed

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tion in 2021, 1000M’s properties will range in size from 926-square-foot one-bedroom condos, to four-bedroom 5,491 square feet penthouses. One of its key attractions will be the building’s unobstructed, panoramic views of Lake Michigan and its Downtown location. Now known for its theatres, art galleries and museums, the historic Downtown district was in the 1920s the stomping ground of notorious

Chicago still has a problem with crime, although it is down by 15 per cent

1000 S Michigan Avenue, where we will see if larger projects at the luxury price point can be sustained.” A uniquely shaped skyscraper that manages to be both geometric and curvaceous, the 1,191foot Vista Tower has been designed by architect Jeanne Gang to house 406 apartments, as well as the 210 rooms of the five-star Wanda Vista Hotel. It’s due to be completed in 2020. Meanwhile,1000 S Michigan Avenue, known locally as 1000M, is a 74-story, 832-foot tower close to Grant Park and sandwiched between the neighbourhoods of River North and South Loop. Due for comple-

Chicago offers investors access to one of America’s great cities, and a buoyant market

mobsters Al Capone, John Dillinger and Baby Face Nelson. Today, visitors are titillated with lurid Prohibition-era stories on themed tours. They might even recognise locations such as Roosevelt University on S Michigan Avenue from the 1987 film The Untouchables. It doubled as the Lexington Hotel, the luxurious hideaway of Capone and his henchmen. Just last year, President Trump tweeted about the “carnage” of Chicago’s gun violence, so anyone would be forgiven for asking how safe the city is today. Chicago Police Department recently revealed that citywide crime had dropped 15 per cent and robberies were down by 14 per cent. “Year-to-date, murders dipped 22 per cent and shootings dropped 25 per cent compared to the same period in 2017,” Chicago police told CNN. This police attribute to the hiring of more officers, more community policing and investments in crime-fighting technologies, such as gunshot detection systems and predictive crime software, which makes the deployment of officers more efficient. In the last year, it’s said Chicago police seized 1,900 guns. There’s more to be done, they admit, especially engaging the support of communities and increasing patrol numbers with a two-year plan underway to add almost 1,000 officers. “It’s a marathon, not a sprint,” Chicago Police Superintendent Eddie Johnson has said. “As long as we keep trending the way we are and we keep developing these relationships and partnerships and continue to invest in our police department, then we’ll see the gains that we’re looking for.” So, if you are looking to relocate or to invest in property, and you’re letting Trump’s tweets put you off Chicago, just be warned. Financially speaking, you may be shooting yourself in the foot.

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Fashion forward A stylish Milan hotel with a very fashionable heritage

LIVING / HOTEL

ARMANI HOTEL MILANO

WHERE TO STAY

Milan

PRICE From $600 per night

armanihotelmilano.com

 MXP

t may have seemed strange back when Armani started opening hotels, but these days, crosspollination is all the rage. With Ferrari making watches and Bulgari getting into the hotel business, it seems brand crossovers are essential. One of the first to make the move was Armani Hotel Milano, which opened its doors in 2011. Although much of the marketing hype was just that, hype, the hotel has eased its way into the city’s top league. The décor is restrained modernism: all muted greys, creams and whites. This is as much a showroom for the

“Cultural encounters are easily available to those who seek them out”

Casa Armani shop across the street as a hotel. It’s also a showcase for a lifestyle: wear the clothes, wear the fragrance, buy the furniture, live the Armani life. There’s a spa (of course), a restaurant and a bar, which has become popular with shoppers wanting a postsplurge tipple. The guests include international business travellers, Italians on a city break and well-to-do tourists. For those looking to shop, the Quadrilatero della moda, or ‘fashion square’, is next door, and filled with global brands. This is where all the major Italian labels are.

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FROM THE CONCIERGE

SEE

The Duomo is one of the most spectacular cathedrals in Europe, a massive Gothic building with hundreds of spires and statues on its exterior. Make sure to climb up to the top for spectacular views of the city.

Milan is a proud footballing city and the derby between AC and Inter is one of Italyâ€™s most intense. Head to their mutual home, the San Siro, for match day or take in a stadium tour.

EAT

Latteria San Marco is an eight-table hole-in-the-wall restaurant with a menu that changes daily. Expect lots of vegetables and a classic Italian cooking style.

MAY LIVING / INVESTMENT

ISSUE 149

Sport memorabilia Play your cards right and you could see big returns

Focus on rookies. If you are really confident, you can buy memorabilia signed by college athletes, but with most college athletes failing to make the big time, that can be a waste of money. That said, real money could be made if they do make it big.

Look for the unusual. An interesting message (a player’s catchphrase) can elevate the price, particularly if they usually just sign their name. If you go to an autograph convention, ask the player to sign their catchphrase, as it might push the price up if you ever decide to sell.

Like with all investments, they are only worth what someone else is willing to pay. Prices can rise and fall over the years, so it’s important that you enjoy collecting and see it primarily as a hobby first and a money-making opportunity second.

napping up sports memorabilia, and baseball cards in particular, is one way smart investors can make money. A recent sale of the rules of baseball, written by Doc Adams, went for $3.3 million at a Sotheby’s auction. The key is authenticity. Autographs can be forged, although your chances of being ripped off fall dramatically if you buy from one of the big American autograph memorabilia companies. It’s also important who the autograph belongs to, and how many items they signed. As with all investments, research is key: know which players and which teams are the most valued and understand which card fairs are reputable. For sports fans, doing the research should be a pleasure, and this is one of the few investments where getting the inside track should be a lot of fun. There are bargains to be had online as well, but nothing beats examining the quality of a card in person. For savvy investors, sports cards can be a fun – and rewarding – alternative investment.

LIVING / STYLE

What to pack ...for summer weather in Taipei and beyond

Average temp

26°c

Beijing Seoul Tokyo Singapore

ALSO WEAR IN...

26°C 24°C 23°C 28°C

TAIPEI MAY

Chance of rain: 70%

WHAT TO SEE

THE NATIONAL PALACE MUSEUM Home to what is probably the world’s finest collection of Chinese art, this huge space features priceless paintings, statues, bronzes, lacquerware, ceramics and religious objects. With more than 700,000 pieces, it’s slightly overwhelming but immensely

rewarding. From the Neolithic Era to the modern age, there’s a huge array of artefacts on display, all intelligently laid out with descriptions in multiple languages. The grounds of the museum are very beautiful and worth spending a few hours in – the perfect respite from the chaos of downtown Taipei.

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ACCESSORIES

Chopard 42mm racing mille miglia classic chronograph watch $5,660 neimanmarcus.com

Dolce & Gabbana black logo-print holdall $1,279 harveynichols.com

Valextra pebble-grain leather carry-on case $6,047 mrporter.com

81 1. Burberry point-collar cotton-twill trench coat $2,067, matchesfashion.com 2. Amiri skinny-fit canvas-panelled distressed stretch-denim jeans $1,467, mrporter.com 3. Corthay arca suede double-monk shoe $2,260, neimanmarcus.com 4. Gucci amour eye printed cotton t-shirt $483, harveynichols.com

LIVING / STYLE

What to pack ...for summer weather in Mumbai and beyond

Average temp

30°c

Delhi Dallas Athens Larnaca

ALSO WEAR IN...

33°C 29°C 25°C 26°C

MUMBAI MAY

Chance of rain: 5%

WHAT TO SEE

THE GATEWAY OF INDIA A huge 26-metre stone arch, built in 1924, the Gateway of India has become one of Mumbai’s most popular meeting places. Located right on the waterfront, overlooking the Arabian Sea, it was built to commemorate the landing of King George V and Queen Mary

in 1911. These days its used as a meeting point and the weekend sees the area thronged with families who enjoy the cooling breeze off the waterfront. One of the subcontinent’s most iconic monuments, this is one relic of colonialism that has stood the test of time.

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1. Alexander McQueen leather buckle-strap jersey dress $2,501, matchesfashion.com 2. Gucci embellished printed silk crepe de chine blouse $2,452, net-a-porter.com 3. Hillier Bartley v-neck silk cami top $496, matchesfashion.com 4. Isabel Marant reverson eyelet-embroidered denim shorts $426, harveynichols.com 5. Aquazzura eden crystal-embellished sandal $1,824, neimanmarcus.com

2 3 1

ACCESSORIES

83 Gucci crystal-embellished squareframe gold-tone sunglasses $1,391 net-a-porter.com

Gucci sylvie floral-appliquĂŠ leather wallet $904 matchesfashion.com

Mozafarian white gold ring $6,851 harveynichols.com

LIVING / FOOD

Stand up and be counted

ave you ever arranged to meet a friend and stood them up without so much as a grovelling text message? Or maybe you’ve made separate dates with three or more people, all on the same night, and only turned up to meet one of them? Most of us wouldn’t dream of it – not if we want to keep our friends. But in the restaurant world, it seems, it’s quite a different story. Of all the challenges that get chefs in a pickle – whether it’s inequality and misconduct in the kitchen, increasing costs, or staff shortages – customers who book and fail to show up are perhaps the most pernicious. And while in the age of the smartphone it’s never been easier to reserve a table, it appears more and more restaurant-goers aren’t going after all, even when they say they will. “No-shows” are on the rise. In a recent study in the UK, it was estimated that, on average, one in five reservations is not honoured by customers, costing restaurants and pubs in the region of $22 billion a year. But it’s a problem

LONDON, UK

James Brennan examines the phenomenon of ‘no shows’ and how they are affecting the high-end restaurant market

 LHR

affecting restaurant businesses all across the world, whether they are in the most impersonal of mega-cities, or the quietest of small-town communities. Amanda Cohen is the executive chef and owner of Dirt Candy, a trendy, friendly neighbourhood vegetablefocused restaurant in New York City. For its inventive and damned-tasty plant-based fare, it has won rave reviews and awards galore, and this year New York Magazine named it ‘The Absolute Best Restaurant on the Lower East Side’. Cohen has appeared on Iron Chef America, and last year in Esquire magazine she delivered a stinging rebuke to the media’s indifference to female chefs, so you’d better not mess. But that still doesn’t stop people from booking tables at Dirt Candy and not showing up. “Every night we have from four to 12 people not show up for their reservations. Some nights I’ve had 20, and it’s getting worse,” says Cohen. “When I opened the original Dirt Candy 10 years ago, I would complain about this, and my friends

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LIVING / FOOD

who were chefs would sympathise. But these days they complain as much as I do, if not more.” Even at a high-profile place like Dirt Candy, no-shows can do a huge amount of financial damage, not only because of the loss in takings, but also because of staff costs. “You no-show at seven o’clock on Friday night and I can probably resell that table. You no-show at nine forty-five on Tuesday and you’ve just punched me in the pocketbook,” says Cohen. “Not only did you take a table that someone else might have wanted, but I staff according to how many people are on the books.” Managing reservations is no simple task. Tables have to be physically rearranged to accommodate groups of various sizes. Walk-in customers who want to sit at those reserved tables have to be turned away. But when those tables sit empty all night because of a no-show, it can cause another problem. “Some people get furious about it and take to Yelp to complain that we’re running some kind of reservation scam. Trust me, it happens.” As well as the financial hit, staffing problems, irate customers and the general pain caused by no-shows, they can also scupper chance encounters with Hollywood superstars, as Cohen explains: “Leonardo DiCaprio wanted to come one night but he needed a 6.30 table. The one table we could have given him was reserved, and so we had to turn him down. That table no-showed. Why do they not want me to meet Leonardo DiCaprio?” It might be easy for shameless no-shows to merge anonymously into the thronging crowds in the Big Apple, but what about Bury St Edmunds? The small market town in the English county of Suffolk is around two hours’ drive from London and has a population of 35,000 compared to New York City’s 8.5 million. There, among too many generic chain restaurants to mention, sits Pea Porridge, a rustic British

“We rely on the general public to give us custom. I don’t want to berate them in an all-singing-alldancing rant that comes across as aggressive” independent with a Mediterranean twist, named after the old local moniker for the long-gone village green. Chef/owner Justin Sharp and wife Jurga have put their hearts and souls into creating something special for the town, so that carefully sourced, high-quality

seasonal produce and a warm, homely atmosphere are just a reservation away. And guess what? “Almost every weekend, and especially Saturday evenings, we experience no-shows at Pea Porridge, even when bookings are confirmed earlier that day,” says Sharp. “And when

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Restaurants, from big-names in New York to small operations in rural England, are all trying to figure out how to cope with an increasing number of no-shows

we try to ring back generally there is no response or a half-hearted excuse like ‘oh, I thought I told my wife to cancel’ and that kind of garbage.” It appears that even in a small town like Bury St Edmunds, where it wouldn’t be uncommon for a jilted chef to bump into one of his customers at the bar of the local pub, people have no qualms about pulling a no-show. “About three weeks ago we had a table of eight no-shows on a Thursday night,”

says Sharp. “We contacted them during the day to confirm. We heard nothing back, and at 8pm they didn’t show. The booking was under a name we recognise, and they are fairly regular customers to boot.” Sharp even tells of a ‘friend’ who admitted to occasionally booking three restaurants for the same evening at the same time, and then picking one to dine in. “When I quizzed him on what he does with the other two bookings, he said, ‘Sometimes I cancel, sometimes I don’t.’ Shocking.” So how do chefs fight back? In 2012, Copenhagen’s Noma famously took to Instagram with a photo of Rene Redzepi and staff giving the finger to two no-show tables. The National Restaurant Association of America’s advice is a little more sedate, recommending credit card bookings, deposits and advance tickets for prix-fixe meals, or even overbooking slightly, as airlines often do. Justin Sharp says credit cards might be the way forward, especially for larger table bookings, but fears the admin might be too much to handle for a small independent like Pea Porridge. “I just

can’t see it working for us for a midweek table for two, who just want to come for a quick dinner. They won’t want to disclose their information, and I feel they will simply hang up and book elsewhere.” But despite all the woes caused by no-shows, Sharp says he wouldn’t resort to naming and shaming on social media. “After all, we do rely on the general public to give us their custom. I don’t want to berate them in an all-singingand-dancing rant that comes across as aggressive and disrespectful.” Dirt Candy’s Amanda Cohen agrees. “Trying to make people act like decent human beings isn’t my job,” she says. “If you were raised to have no consideration for others then there’s probably not much I can do to change you, so I think naming and shaming is counterproductive. We aren’t asking you to pay in advance. We’re simply asking you to call if you change your mind. It’s not a big request, it doesn’t cost money, and the phone call takes less than a minute. I’m not sure why it’s so hard.” A piece of advice for anyone considering making a booking and not showing up: don’t. It won’t win you any friends.

LIVING / ART

Monet & Architecture

The National Gallery in London hosts a remarkable Monet exhibition

he first exhibition dedicated to Monet’s paintings of buildings, Monet & Architecture is a mustsee for fans of the French impressionist. The buildings are located across Europe, in Normandy, in Rouen, in Paris, in London and in Venice. From small buildings in obscure villages to some of the most famous monuments in the world, Monet imbued each one with his own singular style. The buildings he

captured are surprisingly varied, from an apartment block in Paris covered in a huge advertisement, to a series of windmills against a grey Dutch sky, to a fishing shack at the edge of a blustery sea. The exhibition traces Monet’s development as an artist. His style changes as much as the places he paints. From smog-filled railway stations to windswept rural scenes, Monet’s eye was incredibly sharp.

It’s hard to pick out a highlight: possibly the Rouen Cathedral, painted in 1894, a shadowy work of brilliance. With 75 paintings on show, from 1840 to 1926, this is as comprehensive an exhibition as there has been in recent years. Monet’s breathtaking work is as ethereal and stunning as ever, and worth a trip to London. National Gallery, until July 20; nationalgallery.org.uk

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Clockwise from opposite: The Douanierâ€™s Cottage, 1882; Dolceacqua, Bridge, 1884; the National Gallery; Street in Sainte-Adresse, 1867

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LIVING / COLUMN

Invested By Danielle Town

y dad and I sat across from each other with a microphone between us to record our first podcast. Dad started fiddling with his phone. He pulled up a video on YouTube of an old white guy in a suit who clearly didn’t care what anyone else thought. He looked like someone who would think voting for a Mission with my money was liberal-young-person nonsense destined to land me in the poorhouse. He looked like someone who would use the term “poorhouse”. “This,” Dad said, “is Charlie Munger.” This was the guy who is as smart as Warren Buffett? “Charlie Munger is Buffett’s partner. They’ve invested together for most of their lives. And in this interview I’m going to show you, he breaks down Rule #1 strategy into four principles. These four things are all you have to know to do well with investing.” The relevant section is one minute long. In that one minute of talking, Charlie Munger succinctly summarises eighty-five years of investing experience that started with his and Buffett’s mentor, Benjamin Graham, in 1930. For Munger to put money into a company: • It must be a business he is capable of understanding • It must be a business with some intrinsic characteristics that give it a durable competitive advantage • He would like it to be a business that has management with integrity and talent, and • It must be a business that he can buy for a price that makes sense and gives a Margin of Safety The Margin of Safety, Charlie explains, gives us comfort, considering the natural vicissitudes of life (though I had no idea what he meant by Margin of Safety). Then he says, matter-of-factly, that these ideas

are so obvious and so simple that there is nothing left to talk about. That’s it. How to invest exactly like the best investors in the world (and presumably make the same billions they do), in one minute or less. I thought, Great, there is nothing left to talk about. Those principles did seem simple. In summary: be able to comfortably predict the long-term prospects of a company and buy it at a price lower than its value, given – my favourite phrase, asserting that ups and downs are completely natural and inevitable – “the natural vicissitudes of life”. Charlie had explained it just fine. (“Oh no,” Dad warned. “There’s plenty to talk about.” I internally rolled my eyes at this guy who just disagreed with Buffett’s investing partner.) “We are going to go through his principles one by one,” Dad said, “and it’s going to take a few months.” “Really?” I side-eyed him. “Months? They seem pretty simple and straightforward.” He laughed. He laughed at Charlie! Oh, no, wait, I realised. He was laughing at me for thinking Charlie’s principles were so easy. Hmph. “They do seem simple,” he chuckled, “but they’re deep. There is a lot there, as you’ll see once we start to talk about them. The principles are in a specific order of importance. I’m going to go through them one by one. This month we’ll work on what he means by being ‘capable of understanding’.” I have never been so dead wrong. Charlie Munger may have distilled his investing methodology into four easily soundbited principles, but there is a Hoover Dam-size depth underneath them. These principles have framed me and my father’s entire discussion about investing. They frame my investing decisions now. I doubt we will ever stop discussing them. And that is why Uncle Charlie is the master.

In one minute, Munger summarises 85 years of investing experience that started in 1930

Still or Sparkling?

Our private villas in the Maldives spoil you for choice. What will it be: your private pool, the sparkling ocean or the soothing renewal of the Jiva Spa? To reserve, call (+960) 6642200 | Email: exotica.maldives@tajhotels.com | www.tajhotels.com/maldives