Of Vietnam, Iced Coffee and the New Future

Ca Phe Sua Nong.JPG

Photo credit: Wikipedia

I talked about Vietnam “Pho” in one of my older post (click HERE if you want to feel hungry). So I am going to do it again and this time and talk about Vietnamese Iced Coffee. I was never a great fan of coffee or any form of coffee products, I am still not a fan of coffee and I don’t think I will ever be. But there is something different about Vietnamese coffee that I don’t mind having more than any sane person should whenever I am in Vietnam.

Vietnamese iced coffee, also known as Cà phê đá or cafe da, is made using medium to coarse ground dark roast Vietnamese-grown coffee with a small metal Vietnamese drip filter. After the hot water is added, the drip filter releases drops of hot coffee slowly into a cup. This finished cup of hot coffee is then quickly poured into a glass full of ice making the finished Vietnamese iced coffee (Thanks Wikipedia!). The very first coffee tree was brought into Vietnam, according to online sources, in 1857 by the French. The beverage quickly became a major contributor to the economy when Vietnam rose to be a strong exporter of coffee.

This is not a post about coffee but the history of coffee in Vietnam shows how the beautiful country is benefiting from the government and the people’s openness to collaborate with external parties. A very valid example – Vietnam’s third largest lender, BIDV together with FPT Corporation, one of the country’s leading conglomerates and Dragon Capital are working with South Korean conglomerate, Hanwha Group in running the country’s accelerator program known as Vietnam Innovation Startup Accelerator (“VIISA”) (For more coverage: Dealstreet Asia). This was officiated during the a recent conference held in Hanoi which was hosted by the Vietnamese government and other foreign and local partners.

with-big-boss

With the DPM of Vietnam and Chairman of FPT

My interpretation: Vietnam is progressively opening up the local ecosystem by welcoming more foreign participation and more importantly this is done in a collaborative manner i.e. foreign friends work with local friends on big big things. What I expect to happen is that there will be more and more of such foreign-local collaboration as the government has set the precedence which in turn will encourage similar arrangements to happen at different or all levels within the country. An official welcome from the government is like a VIP or a rock zone ticket to a Celine Dion (this doesn’t reflect my age) concert and you get to sing with her on stage. Not only you get to watch the show, but you get to be a part of the show with a key role. How did I come to this conclusion? The Deputy Prime Minister of Vietnam stayed from the start til the end of the event as well as a closed door VIP lunch, and even moderated a session during the event. (I know this is rocket sciene!)

Main takeaways from the session:

  1. The government – To continue working on gaining recognition and acknowledgement of Vietnam as a great hub for startups. As the environment continues to improve, there are now about 12,000 new SMEs being registered per month; this is much more than the previous number of 5,000-7000 per month.
  2. Technology as catalyst – To develop innovative startup ecosystem through IT and technology. This is not just about the technicality, but also about how to be innovative and creative in business and commerce. Especially for SMEs/startups that are going through commercialisation.
  3. Awareness and startup culture – The government recognises the need to encourage more Vietnamese to get onto entrepreneurship bandwagon and that startup culture is no longer just a jargon. Startups as a community is no longer just a tool for pushing the unemployment figure down, but also as means to push the boundary for the progression of the country. The country needs to learn to accept failure and risks. What is more exciting is that the government is starting to learn that social objectives and economic benefits can be reaped indirectly from an active and vibrant startup ecosystem.
  4. Role of central government and local authority – To build an information hub and supporting centres as well as to allow access to finance and credits. Regulators and authorities are to build frameworks, policies and mechanism for angel investors, venture capitalists to play a structured role in supporting startups. Banks and credit lenders should also have a clear role on how to get into the game. However, the most important element of all these is to allow the market to adjust itself and follow the market principles. This is a very important point because it is a sign that the government realizes that interfering the economy might not be a good thing after all.
  5. Risky community – Ministries hope for startups to take more risks, cooperate and form a community on its own. The ministries acknowledge that sharing and cooperation is key to overcome and address risks. Investors and startups  are also encouraged to proactively propose ideas to government as the government now has an “open-ear” policy for the industry and willing to take in good input from market players.

So, now tell me – why aren’t you looking at Vietnam yet? Not only because of the food (and coffee), but also the overwhelming energy level when you talk to any Vietnamese friends.

If you are looking for more “evidence” for the vibrance in Vietnam, check out the latest co-working space that has been setup by a group of high energy level young entrepreneurs – CirCO.

Now, that was a long. Til next time.

 

 

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The WHO reminder

if I have 48 hours a day

Thesis: I would build an app that would instantly remind me of a person who is waving at me or shaking my hand telling me that we have been in touch before. Why such idea? Because I am bad with faces and names, and generally not very good in replying messages and emails quickly!

Target users: Anyone who thinks they need to look less dumb when that person starts to tell you how you met, bla bla bla and yet you can only go with pretending you remember.

Business model: How it works? Scan the person’s face with your phone camera (obviously you will need a bit of skill to make sure the person doesn’t know you are “scanning” him or her – time to be a real spy!) so that your camera can immediately pull information from social medias and public sources to identify the person and then get that linked back to your mailbox, contact list, text messages and call history. Once you have built enough data on the individual, the app will then provide you suggested actions or tips for your conversation with the counterpart. The app should also be rating or categorizing the individual to allow you to decide on how much time you want to spend with this person.

Housekeeping: This idea may not be realistically practical and is thought through based on personal assumptions. Also, it may have been executed or currently running by someone else.

Done with my ranting. Til next time.

US – ASEAN and why I am bullish about ASEAN

IMG_5029

Let me start off with some key stats (statistics and statements) around the long distance relationship between the United States and ASEAN:

  1. ASEAN is the United States 4th largest export market. At $75.5 billion in 2012, exports to ASEAN created or supported over 472,000 jobs in the US (source: US ASEAN Business Council).
  2. California ($11.4B), Texas ($11.2B), Washington ($5B) Oregon ($3.75B), Illinois ($2.65B), and New York ($2B) had over $2 billion in exports to ASEAN in 2010. (source: US ASEAN Business Council)
  3. The average ASEAN consumer purchases nearly 1.75 times as many U.S. goods per capita as the average Chinese consumer, and nearly nine times as many as the average Indian consumer. (Beat that!)
  4. FDI net inflows in ASEAN from the U.S. is about 8.8% (for the period 2012 – 2014), higher than money coming from China and only second to Japan. (source: ASEAN)

Why am I throwing so much numbers about the US-ASEAN romance? Simply because we felt that love is in the air and I want to share the love to all fellow ASEAN comrades (sounded cheesy, I know).

We (see the lucky ones in the picture) were fortunate enough to have attended the US ASEAN Conference in San Francisco a couple of weeks ago. Triip was invited to speak about their experience as founders in the growing ASEAN region. What amazed us was that the audience in the U.S. understood the opportunity and challenges to be running a startup in ASEAN. There were lots of interests, but what was not there was the official linkage to a better collaborative route.

(Repeating myself again) ASEAN is an economic group of 10 countries with over US$2.4 billion of production capacity. The scene has just gotten more interesting with the formation of the ASEAN Economic Community (AEC). As much as people from the outside view ASEAN as a fragmented market, the formation of AEC helps foreign investors from the U.S. to get a good feel of the region throw one single counter of interaction. Hence, out of the sudden, ASEAN becomes much bigger that how it used to be prior to 2015.

What other stats should you be aware of:

  1. ASEAN is the 3rd largest economy in Asia and the world’s 7th largest
  2. ASEAN is the number one destination for US investment in Asia ASEAN investment in the US has grown over 1,400% and US investment in ASEAN has increased 169% since 2001.
  3. 36% of Asian Americans trace their ethnicity to an ASEAN country.
  4. The number of individuals from ASEAN countries choosing to become US citizens has increased 33% in a decade and about 12% of all US naturalizations each year are by individuals from ASEAN countries (these includes our fellow comrades from Vietnam, Singapore, Malaysia, Indonesia etc who are working with Google, Quora, Facebook and other tech giants).
  5. Students from ASEAN countries contribute over $1.4 billion to the US economy each year and 4,600 US students study in ASEAN countries (we Asians love to study)
  6. 7% of US jobs from exports are supported by exports to ASEAN

US Jobs supported by ASEAN

So what do these stats means for all of us who are still in ASEAN? You are sitting in a hot spot! So hot that you need to go cool down in a bucket of ice every five minutes (perform at your own risk)!

Why am I bullish about ASEAN?

  1. Increasing interests from the U.S. as well as other giants like China
  2. An increasing number of good talent as a result of knowledge transfers from those who were trained by the likes of Facebook, Misfit etc
  3. Language is no longer on top of the “challenger” list as companies are learning how to accommodate to local market demands. It is a self selection process, whoever who can’t adapt will simply get kicked off the market.
  4. We are young! Average age of an ASEAN country go as low as 21 and the highest is about 37. We are still productive and spending.

This is probably one of the most poorly written piece that I have done, but then you get my point.

More spamming of pics!

IMG_5020

Triip’s Ha (the only female – go girl power!)

 

Til next time.

Vietnam “Pho” You

Pho_in_Saigon

Photo credit: Wikipedia

 

Did you know that the Vietnamese noodle dish “pho” was created during the French occupation and so it is a relatively “new” dish? For those who have no idea what pho is – Phở or pho is a Vietnamese noodle soup consisting of broth, linguine-shaped rice noodles called bánh phở, a few herbs, and meat, primarily served with either beef or chicken, according to Wikipeda (yup, Wikipedia is a good friend).

No this post is not about the noodle. Well, at least for me, I always start understanding a new environment by having a taste of its local food. Understand the necessity and basics. Having been to Vietnam for a couple of times this year, I did learn a thing or two that is worth sharing with my fellow friends who are probably cursing at me for making them salivating at the picture of this hot steamy bowl of noodles. Anyway, (not sure if this is accurate) there have been some Vietnamese friends who explained to me that pho was created because food was scarce during the French occupation and Vietnam War. Hence, it became part of the tradition within the Vietnamese community to keep pho as a reminder of the harsh times during instability.

Vietnam has been through an interesting journey as a nation and as an ecosystem for startups. You probably have heard of the big boys such as Topica, Appota, Vatgia, VNG etc. There are more and more startups from Vietnam that are marching their onto the ASEAN battlefield, taking on the giants from within and outside of the region. It becomes so interesting that VCs can’t overlook Vietnam anymore. It becomes so exciting that entrepreneurs who are not Vietnamese are looking for opportunities in Vietnam.

So what are some of the interesting statistics I have been looking at

Percentage of Individuals Using the Internet vs GDP Per Capita (PPP)(2013)

Figure 1: Internet Penetration vs GDP Per Capita (2013)

My interpretation: On the top right corner you have the three countries which are deemed to be much more mature than the rest of ASEAN, essentially it is quite natural to see a much higher internet penetration rate. Towards the lower left corner, we have the emerging markets of ASEAN. What is interesting here is that even though GDP per Capita, which indicates the level of average disposable income, of Vietnam is comparatively lower than the likes of Thailand (a super social market), Indonesia (the mini China) and Philippines (a vibrant professional market), its internet penetration rate stands out. Vietnamese are curious about what is there on the net, always learning and willing to learn.

Broadband Price Plans

Figure 2: Comparison of Broadband Plans

 

My interpretation: There are 6 main Telco players in the 2G arena (the top 3 owns more than 80% of the market in terms of number of subscribers), and 4 main Telco players in the 3G arena (with the Top 3 providers, namely Viettel, Vinaphone, MobiFone owning over 95% of the market). *I didn’t make up the numbers! Check out the source.* What I am seeing (I believe anyone can read the table above) is that you can buy more mobile data in Vietnam with the same amount of money else where! If you only need mobile data and not food to live, you could probably live longer in Vietnam than in most other countries. As such, it is getting much easier for startups to reach out to their target audiences through mobile and why more startups are going for the mobile first strategy in Vietnam.

___________________

Having been able to participate in the mentoring sessions for Topica Founder Institute and being apart of the Viet Youth Entrepreneurs December Pitch, here are some key observations of the Vietnamese startup ecosystem:

  • The ecosystem is young and has visually limitless growth potential.
  • There is a shift in mentality in that startup founders are looking more towards expanding across the region rather than focusing on only home market.
  • There needs to be further guidance for local startups as there is still room of improvement for them to be able to draw out a more accurate competitive landscape for the sectors they are in.
  • Founders need to continue and increase the effort of talking to founders from other ecosystem.

So that is Vietnam “pho” you. (Pardon my bad pun)

Til next time.

Red or Blue Ocean

Red vs Blue Ocean

Been a while. Work has kept me really busy:

*Commercial time: Offpeak, Eko and Hermo*

One of the similarities between Offpeak and Hermo is that they are both competing in industries with multiple players – the RED ocean.

Given the niche, Eko is considered to be in a space that has less competition and disruption – the BLUE ocean.

For entrepreneurs-wannabe, it is important to diagnose the type of “ocean” they are going to be swimming in. The recent hype around entrepreneurship has rushed a lot of new founders into the market without them doing sufficient homework. Simple analysis such as competitive landscape (direct/indirect), important stakeholders and especially customer needs are essential before going all out.

What most great companies that got invested have in common is that they are all targeted at specific needs of users, whether or not these needs or demand are organic (existing gap in consumer needs) or “exploitable” (not sure if this is the right term, but what I mean is that you can foresee a demand or a potential evolution of user behavior).

Customer acquisition strategy for different type of demand or markets are generally different. This is what I think:

Red vs Blue Ocean 2

Note: I don’t have all the answers and this is just something I drawn out at 12:03AM!

That’s all for today. Til next time.

P/S: All the above are merely my personal rant and shall not be taken into account  reaaaaalllyyy serious decision making.

Profiling Your Investor

More often than not you would want to fundraise with a certain expectation of closing the round within X months, yet the process might take months and you might very well be running on cash deficit when it becomes X+Y months. So, what would you do? Pay your team with I-OWE-COUPONs? Not that you have a choice when your bank account is empty (yet you still have to pay the bank fees for maintaining your account).

At a recent sharing session, I was highlighting about the importance of being able to profile your prospect investors. This is precisely to handle the kind of scenarios mentioned about. I believe many investors have elaborated on this subject before. So I am just going to share with you my version of investor profiling. Ta-da! (Look down, I mean below this paragraph not under your table.)

VC Groupling table

I call this the “Groupling Table”! So to help you understand, see below again (you should get it by now)

Hungry Leader – VC who looks to lead your round and generally having higher risk appetite to new ideas and ventures.
The “Let’s See” – Typically the type that follows other investors and have less tendency to be the first one to jump onto an investment opportunity.
Decisive – VC that gives you an answer quick enough.
Deci……..sive – VC that gives you a maybe for an answer or just never gets back to you.

I would think it is useful to know the type of investors that you are dealing with and subsequently figure out how to get a decision out of them. Of course, it is always advisable to be: clear, specific and friendly towards your prospect investors. So that they won’t kick you out of their office!

P/S: All the above are merely my personal rant and shall not be taken into account  reaaaaalllyyy serious decision making.

Beyond the heat

Priceless art piece

Priceless art piece

Behold – the master art piece that you rarely get a chance to see. Observe the realistic fire that depicts the current “temperature” of the e-commerce space, opening an array of opportunities to what will be coming next. The fiery fire is hot, yet people are attracted to how much it is shinning. Seems like a realistic representation of how e-commerce has been a hot space for a really long time, yet entrepreneurs and some investors are still chasing after the dream of creating the best of same kind.

Ask any VCs, a lot of them will tell you that they think e-commerce has become too “hot” over the last 2 years. “Hot” meaning too expensive and too many. Hence, VCs are generally more picky and skeptical when a founder brings along an e-commerce idea.

To illustrate my point on the ecommerce market being too saturated, here is a list of some e-commerce ventures in South East Asia (I might have missed a lot more in the market!)

Country

Domain
Brunei 365eStore (http://www.qqestore.com/) Malppy.com (http://www.malppy.com/)
Cambodia SnapyShop (http://www.snapyshop.com/) FanNow (http://www.fannow.com/) SHOP168.me (http://shop168.me/) Gladmarket (http://www.gladmarket.com/) Ecamshopping.com (https://ecamshopping.com) Little Fashion (http://www.l192.com/)
Indonesia Bukalapak (http://bukalapak.com) Sportdio.com (http://sportdio.com) Cipika Store (http://cipika.co.id) Alatproyek.com (www.alatproyek.com) RALALI.com (http://ralali.com) Gudangsofa.com (http://www.gudangsofa.com) Sportkita (http://sportkita.com) Traveloka (http://traveloka.com) RajaMobil.com (http://www.rajamobil.com/) LOJAI.com (http://lojai.com) Tokopedia (http://tokopedia.com) The Icon Art Painting eCommerce (http://theiconart.com) Tiket.com (http://tiket.com) Tombolife Herb Online Store (http://tombolife.com) ORORI (http://orori.com) trivi teknik (http://triviteknik.com) Seroyamart (http://seroyamart.com) Libby Brownies (http://libbybrownies.com/home.php) Realtyrumah (http://realtyrumah.com) Chandra Karya Furniture (http://chandrakarya.com) Kucari.com (http://kucari.com) Bilna.com (http://www.bilna.com/)
Laos Kopnoi (http://kopnoi.com) Laos Flower.com (http://www.laosflower.com/)
Malaysia Blip (http://blip.my) Fruits Paragon (http://fruitsparagon.com) Favechic (http://favechic.com/) Lelong.my (http://www.lelong.com.my/) FashionValet (http://www.fashionvalet.com/) LuvClo.com (http://luvclo.com/)
Myanmar Shwe 99 (http://www.shwe99.com/) Myanmar Online Store (http://www.myanmaronlinestore.net/) Yangon Online Store (http://www.yangononlinestore.com/)
Philippines Sister Secrets (http://www.sistersecrets.com.ph/) Shop This Easy (http://www.shopthiseasy.com/) Galleon (http://www.galleon.ph) Ametech US (https://www.ametech.us/store/) Hallo Hallo Mall (http://hallohallomall.com/) Magpalitan (http://magpalitan.com/)
Singapore Tate & Tonic (http://tatetonic.com) DRESS A PETS (http://dressapets.com) Swimfie (http://swimfie.com) Clozette (http://www.clozette.co/) Bellabox (http://bellabox.sg/) NoQ store (http://www.noqstore.asia/) RedMart (https://redmart.com/) Kwerkee (http://www.kwerkee.com/) Luxola (http://www.luxola.com/) GoFresh (http://gofresh.com.sg/)
Thailand Central Online Shopping (http://www.central.co.th) invadeIT (http://www.invadeit.co.th) Follow’s Me Shop (http://www.followisme.com) Pomelo (http://pomelo.com) Wishbeer (http://wishbeer.com) WearYouWant (http://www.wearyouwant.com/en/)
Vietnam

cungmua.com (http://cungmua.com)

XDEAL (http://xdeal.vn)

thegioididong.com (http://thegioididong.com)

123Mua.vn (http://www.123mua.vn/)

FOREVA (http://foreva.vn)

This is an intriguing scenario because some might ask – what is next?

With the many e-commerce companies in the market, the competition becomes much more intense and I can’t emphasize enough on this. This competition will be a battle of strategies and differentiation. The team that can bring in the most value add on top of the products that they are selling will be the winner in this fearsome battle where entrepreneurs will have many hair-pulling moments trying to figure out how else to make their customers happy and improve the metrics that they are being measured against. What this means is that there will be more opportunities for new ventures or ideas that exist to serve these e-commerce giants and dwarfs.

An area of interest for e-commerce companies would be on conversion ratio i.e. the probability of a lead being converted into actual sales dollars. Opportunities to pitch to these e-commerce companies will arise for analytics/intelligence ventures. E-commerce sites would want their visitors to be looking at items/goods that are most relevant to the characteristics and preferences of the unique visitors so that the chances of sales is higher. E-commerce sites would also want to know their customers better and be able to project the purchasing behavior, hence improving their inventory management protocol. In short, increasing chances of sales (so to increase revenue) and better managing inventory (so to reduce cost).

Another area of value add e-commerce sites would want to bring to their customers through improving payment and delivery experience as well as the fulfillment process. Payment has always been a key for e-commerce companies, especially when online buying is still a new habit for most countries in this part of the world. Deliver experience is also one area where a lot of customers complain about. Given the geographical condition of the region, it makes it more challenging for logistics company to tackle this issue.

To summarize my thoughts, beyond e-commerce we will see a lot more opportunities for entrepreneurs in this region to create a viable solution. As such, I believe investors should be more active in covering the space that I mentioned.

That’s all for this round. Til next time.

P/S: All the above are merely my personal rant and shall not be taken into account  reaaaaalllyyy serious decision making.

2014

You have probably seen the infographic by Tech In Asia on the biggest Series A in Asia (see link).

What it means for me:

1. Ventures for South East Asia is relatively cheap as compared to the larger Asian player(s) i.e. China;

2. There is huge disparity in terms of valuation between the rest of Asia and South East Asia – China could be a little too expensive for the time being and potentially funding would spill over to South East Asia;

3. The South East Asia story is realizing – international VCs are starting to explore into the “road less taken” e.g. Vietnam;

4. No clear correlation between market sizing (in terms of population) and valuation – ventures are less geographically sensitive.

So, what is so intriguing about this?

1. Will this trend continue?

2. Will valuation in South East Asia go up since there are observations where more funding are after ASEAN ventures?

3. At what price will VCs stop investing?

That’s all the ranting I have for now. Till next time.

FanFic: Uber X MyTeksi (aka GrabTaxi)

THE CONTENT OF THIS POSTING IS MERELY A PERSONAL SPECULATION, a speculation I made simply because my mind keeps running around the excitement of seeing more money invested into ASEAN companies.

We recently heard about the Series C funding that was closed for MyTeksi (also known as GrabTaxi). Over the last 12 months it has raised a total of US$90 million from its Series A, B and C round. So this is where I begin to think – what is next for MyTeksi (besides the huge expansion plan they have)? How will its investors, which includes Vertex who went in at Series A and Tiger Global Management who recently joined the party, exit and get the multiples they are so looking forward to? I am quite sure not many knows the answer and we will have to wait for the big announcement when it is the right time.

As I was saying, I am supposed to do a bit of speculation here, so this is what I am speculating – MyTeksi be acquired or merge with Uber.

Before ellaborating further let’s take a look at the funding rounds of both Uber and MyTeksi:

Uber X MyTeksi

Source: Crunch Base and various tech articles online. I do not own the data!

Without going into details of the comparison between Uber and MyTeksi, what I am seeing here is that:

  • both Uber and MyTeksi has been winning their investors’ hearts, in large amount of $$$
  • MyTeksi has been more aggressive in their fundraising plans, considering that all 3 rounds of funding happened in a single year.

From the observations above, I extrapolate that MyTeksi could be in the game of valuation chase so that they can be acquired or go through a share swap at a price that is lucrative for the investors. The follow on question should be “Who will be the buying party?” – my guess is Uber.

I believe all that is happening to MyTeksi will somehow benefit Uber, mostly on pushing up the valuation of such business models. So at the end of the day, we are not only seeing competiton between Uber, EasyTaxi, MyTeksi, Taxi Monger etc. But this is also a form of “collaboration” through you-up-your-valuation-so-I-will-up-mine approach.

A couple of reasons why I think Uber would love to join forces or acquire MyTeksi:

  1. MyTeksi is still ahead of Uber in conquering ASEAN, whereas Uber is strong in ex-ASEAN markets, so this provides inorganic growth to Uber;
  2. Uber can then include Taxis into its fleet, joining the expensive cars that they have been using – creating a GIANT taxi company;
  3. Given the recent government pushbacks of some ASEAN countries, it would make more sense for Uber to acquire/work with a local player such as MyTeksi.

So here you go, my speculation based on my imaginative brain. Again, all speculation without serious research nor inside information. In short, just another rant from me.

Til next time.

Peach..I mean Pitch

peachzdfgad

Do you know that peaches are native to China from where they spread to rest of the world via ancient silk route? Peaches travelled across ocean to get to the other regions, and this is what we hope our pitches can do too (not literally over the ocean, but to get our messages across).

Many times when I engage a founder, the founder would be most engrossed in talking about their idea, vision and how different and unique the concept is. While this is an important sign that a venture capitalist would love to see in the founder, it is also important not to overdo it. Otherwise it would seem like the founder is trapped under his/her own bubble world (of course, this is just my personal opinion).

Some of the questions a proper pitch should address are:

  1. What problem are you trying to solve?
  2. How do you plan to do that?
  3. How far are you in building this solution?
  4. What are the characteristics of your target customers and users?
  5. Who are your competitors and who are the stakeholders in your supply chain?
  6. How do you monetize?
  7. How does your financial projection look like?
  8. How much investment is needed and what instrument do you prefer?
  9. How will you and/or your investors exit?
  10. What is the next step?

There you go, the perfect 10 slides! Of course, this is just my personal opinion.

That’s all for today. Til next time.