Time To Grow Up and Get Your Pyjamas On

My kids drive me nuts.  My youngest son spends most days in his pyjamas playing computer games. My youngest daughter complains about never having enough data whilst she is creating her next Tik-Tok or editing videos of one of the animals being “so cute”. Each of our kids has three screens; a phone, iPad and a laptop. I don’t remember sanctioning any of those purchases. I don’t see my kids for large parts of the weekend, as they are playing on their computer. It’s perfectly normal my wife tells me. It can’t be I say.

So to counteract this growing behavioural trend, we decided to take the kids on a 3-week trip to Asia at Christmas. Exquisite beach hotels, swanky City hotels, lots of day trips on boats, up river, out to sea, up mountains, fish-markets, elephants, nature walks, temples, rural villages, making hats from leaves… Something of a memory lane for me, as I had grown up for large parts of my life in Asia. These day trips usually involved mini-bus and being driven to a variety of locations.

I loved looking out the window of the bus and watching people going about their lives. The economies of these Asian countries are thriving, especially in the big Cities. In my day, there were thousands of bicycles and small motor-cycles which drove the economy. These days its trucks and cars that block the roads, and pollute the air so much so that pedestrians have to wear face-masks to venture out on to the sidewalks.  But in the rural towns and villages, it is still the humble motor-cycle that pulls makeshift trailers and laden with wares, and I mean laden. There is art-form to stacking a motor-cycle 2-meters high and 2-meters wide with chicken cages, hay or even people. Head-on they look like a motor-home approaching, but the distinctive ‘put-put’ mutter from the small motor is a giveaway. One enterprising gentleman on a scooter caught my eye.  It seemed he had just collected his wife and new born child from hospital; his wife riding pillion, holding the delicate new-born child and a suitcase; as the husband weaved his way through the crowded traffic, whilst holding a saline drip suspended from bamboo cane. A very perilous construct, but life moves on.

I turn around every 15 mins or so and say, ‘look at that guy with the 3 goats on his back’, or ‘what an amazing looking temple’. Silence from the back. Heads are down and buried in their phones. I try to engage them. My wife tells me not to worry. All rather a depressing. There were good moments too, lots of them, but that stuck with me.

Back home, my eldest son, who is still at school, is a digital consultant to our business. He throws Gary Vaynerchuk quotes at me, whilst downloading the latest social media business app, which as it turns out saves us 40% on our film-editing time. And there has been a lot of that. It turns out we don’t have to hire a new social person as the App he has identified can create and schedule all our social media activity weeks in advance and collate the statistical analysis for us. He has an awareness to Brands, Apps, Enterprise software, business models revolutionising different sectors. I’m starting to feel out-dated and out of touch. But I couldn’t be prouder of him.

My technology exchanges with my son made me realise that my generation is guilty of being a bit out of touch and not listening to our kids. We need to take a look at the life they inhabit. Take a look at their norms. How do they interact with the world around them? My youngest son isn’t playing on his computer; he is playing, laughing and talking online with his friends. They are having as much fun as I used to kicking a ball around or building toy models from balsa wood. We have to look up and see what our kids are doing today, listen to them, as they are ones that will inhabit and define the future. The types of jobs that they will have probably don’t exist today.

In this virtual world, they have to think differently. 

The schools and Universities we herd our children to are slowly making changes to subjects. And kids are accessing the information that they need online and digesting the information in different ways. They are equally comfortable with and reliant on technology. They are self-learning from a very early age. The online games that they play on their computers are teaching them skills they will need in the future. I see that now.

However, what it has created is opportunity for investors. That was a cold segue! But tell me you didn’t think the same thing. Hear me out.

I was first subjected to this phenomenon when Mine-craft first surfaced. I was even dragged to a 2-day event at Disneyland Paris. I have never felt more out of touch in my life. Even that time when my then girlfriend was trying to teach me the dance moves to ‘Don’t Blame it On The Boogie’ didn’t even come close. Thanks for trying Siobhan! Then the sequence of ‘must have’ software games started to invade our house.

The gamers that my kids watch online are multi-millionaires. And there are lots of them because there are billion dollar industries being started in bedrooms all over the world. These gamers are sophisticated business people and have built up huge followings by recording themselves or playing live acting like kids, bantering with their mates, laughing screaming and quite often swearing. YouTube pays them through a share in advertising revenue that they generate. These gamers are lauded by their avid followers and wanna-be hoards of children in bedrooms all over the word. And right now I am lauding them too for their financial acumen.

Apparently, the best players do online collaborations. It has got professional. Some players have built teams around them. The compete for honours and money. Big online events where people pay money to watch the best players and best teams battle each other online. You can even bet on the outcome of the game. There are currently about 500,000 frequent and occasional viewers. In addition, there are conferences all over the world holding events where you can pay to watch the same guys you pay to watch battle online battle each other live. Most professional real-world sports teams like soccer and football have e-sports equivalents. These professional gamers wear the team jersey and are sponsored or paid by the club. They are representing! And some of these guys make millions, but without the danger of brain injuries and ligament damage.

I was not aware of the scale of this industry until about a year ago, when someone asked if I wanted to invest in a HK based e-sports team. They sent me many large tomes about the industry, the training methods, the selection process, the competitions, the turnover, business plans… these are sophisticated operations. They know where the cash is and how to structure an organisation to put them in a position to extract it. In this virtual world, they have to think differently. Their cost structure is different. These teams are popping up all over the world. Some are going public. Could these companies be part of our future investment portfolio? Probably. But first we need to understand the sector. Like all sectors in their infancy, there will be winners and losers. Hopeful, enthusiastic management teams with no commercial acumen, need to be separated from the herd. This a fast-moving sector, but the fundamentals of business and investing still apply.

We are going to interview several of these over the next few weeks to learn more. Why not come along for the ride with us? Send us your questions and we will put them to these companies, or go and do the research for you.