Mars the Arrival: an ode to the slowest game in the world

In a world embracing instant digital gratification, I’d like to compose an ode to a quirky game where the average length of a move is measured in days and even paying money can’t speed things up. This game is Mars: The Arrival (MTA), a Mars colony builder app by Heiwa Games, for Apple and Android.

First, a bit of backstory. I grew up on a steady diet of science fiction, SimCity, Elite and Civilization, and am thus always on the lookout for a decent Mars colony simulator. “Decent”, in my book, means bearing some resemblance to reality, so that (for example) materials should either be made locally or slowly and expensively hauled from Earth. Paradox’s Surviving Mars is typical in the shortcuts taken by big-budget games: metals can be obtained by having a drone zap rocks of metal ore conveniently lying on the surface, instantly turning them into refined steel. At the other end of the spectrum, the obsessively micromanaging Mars Simulator Project does things like assign each settler Myers-Briggs personality types and track the radiation exposure of their eyeballs, pretty much foregoing colony building entirely. Between the two lies a whole heap of pay-to-play trash, where materials can be magicked out of the thin Martian air and buildings completed instantly simply by forking out cash for credits.

One day, idly dredging the depths of the Play Store, I stumbled on MTA. As you start the game, you’re treated to a 3D view of Earth, where you can select your faction, and then another 3D globe of Mars, where you can select the placement of your nascent colony. Enjoy these shiny graphics while they last, because for the rest of the game, the UI is closer to Excel’s 1979-vintage predecessor Visicalc: green figures on a black background, slowly ticking up or down.

The core of the game is a resource gathering/city building exercise. Your initial objective is simply to become self-sufficient in the essentials (energy, oxygen, water, food), shuffling your meager crew around a cycle of researching new things and building buildings. Unlike any other game I’ve seen in this genre, there is no visualization whatsoever of what your colony looks like: the UI is a simple tree of expandable options with miniature icons, and if you complete a solar panel, the “Solar Panels” row ticks up from “1x” to “2x” and the Power panel adds +0.3 MW. There are no disasters and no surprises: if you run out of oxygen, it’s on you for not noticing earlier. Even a positively boneheaded move, like taking out your only habitat out of operation to build an upgrade, only results in leisurely red blinking and a slow but inexorable dip in the Happiness stat as 12 colonists find themselves squeezed into the 10-person Landing Module.

I was sufficiently intrigued by the concept that I reached out to Heiwa Games, and lead developer Stefan was kind enough to answer a few questions. On the inspiration for the game: “I was reading the Red/Green/Blue Mars trilogy of Kim Stanley Robertson. So I started with a space colony building prototype and focused on a realistic rather than on the typical game-style approach. The first prototype was “too close-up”. You had to piece building segments together forming a resource transportation network and you was supposed to see settlers doing their work. I felt that a more strategic “zoomed-out” approach would lead to the terraforming stage quicker so I started the second prototype that finally grew into the app you know today.”

It is difficult to convey in words just how slowly the game moves. One less than complimentary review compares it to “watching paint dry”, but most paint dries in under 24 hours, while in MTA it’s quite common to find yourself adjusting a shipment that’s going to depart Earth in three days (real time) and won’t actually reach you until a week has passed. The average small building takes at least 1 day to build, sending out an expedition takes over 4 days, and some late-game buildings can take up to 10 days, not including the week or four it took to gather the necessary resources. And because your colony is so strapped for colonists, especially in the beginning, you can rarely do more than one or maybe two things in parallel. A typical day of game play thus consists of loading it up, spending a minute or two shuffling people around just enough to kick off the next thing, and making a mental note of how many hours or days it will take until that thing will be ready and you should log in again. As I write this, I am well over 6 months into my first game, and while I’ve finally made it to the final phase, there’s still plenty of work to do to get to a stage where I can say I’m done.

Yet these nearly absurd constraints are also what makes the game interesting, and once you make your way to the Expansion Phase, the game turns into slow motion chess, where you’re often plotting your moves a week in advance. “With 8 settlers in the next ship, I’m going to need to expand beyond the Habitat into a Dome, so I’ll need to make sure I’ve got plenty of Construction Supplies. But I can only research the Dome after they’ve arrived, so it’s going to packed until they finish research and building. To keep everybody happy, I need to complete the Media Center, but then I’ll need to pull the Scientists from the Greenhouse and risk running low on Food…” The game undergoes a gradual fractal explosion in complexity, as you move from bare survival into exploration and industry, juggling exotica like biomass, hydrogen and rare earths. Maintenance also becomes a serious headache, since repairs are costly and take buildings offline, but if you don’t repair, they may break down entirely. And while the game has a classic Civilization-style tech tree, it’s kept completely hidden, meaning you need to figure out what to research as you go along and won’t find out even the basics like how much it will cost and who needs to staff it until each tech is done.

Stefan: “I have played mobile games a lot and while some of them are really fun, I hate this inflexible concept of almost all base building type games. Especially the concept of speeding up the game by using real money and selling virtual goods for real money. I am aware that developing companies need to follow this pattern in order to earn the money they need to keep going. However having a well paid job, this situation didn’t apply to me.”

MTA is free to play, but monetized very carefully. By default, you get a popup every now and then, offering a marginal boost to a future shipment in exchange for watching an ad. You can also pay for “Gold Member” status, which gets you access to the leaderboard; a “logistics contract”, which lets you randomly reshuffle future shipments that are 3-6 days away, and a “sponsor contract”, which lets you skip the ads and still get the extra loot. None of these options speed up the game or let you buy your way out of trouble.

This is not to say the game is perfect. Fuel for rockets, a key consideration for any settlement, is inexplicably missing entirely. There are no notifications or options for queueing construction or research, meaning you have to keep track of what’s going to be ready when. Escaping the long and tedious Expansion Phase requires hitting arbitrary targets for population and built-up area, but you have no control over the arrival of settlers and are arbitrarily blocked from any research related to local manufacturing, meaning the last couple of weeks are basically spent twiddling your thumbs. Last but not least, since the game contains no random events at all, once you’ve reached an equilibrium it’s a little too easy to stay there — at least until the Industry Phase comes along and your colony starts growing at 30+ settlers per shipment, forcing you to build like crazy just to keep up.

Given that the game’s audience is likely to have heavy overlap with hacker types, have Heiwa considered open sourcing it? Stefan says yes: “I have started thinking about how to grow the team. Currently we are three individuals, a coder, a tester and an administrator. I would really like to join up with other people that also have a burning passion for settling Mars and are willing to join a non-standard economic business model. Plan is to move the code base to git and make it available to a limited group of people joining up. So if someone reading this interview would be interested, please reach out to me using the support function of the app. Maybe we can reach the terraforming phase in terms of app development much quicker that way.

One feature in the works is a birds-eye graphic view of the settlement, so if you’d like to see this happen, drop Heiwa a line. Me, I’ll still be plugging away at my supply chain, watching the little numbers tick up and down.


38 per hour? Predicting daily COVID cases from press release delays in Singapore

For the past year and half, many Singaporeans have come to expect the government’s daily COVID-19 case update at around 4 PM. Delays tend to mean bad news, as most recently shown yesterday, when the update was delayed by around two hours and revealed Singapore’s worst community transmission numbers ever (88 cases).

So I couldn’t help thinking: can we, the public, predict case numbers from the delay alone? In cryptanalysis, this is called a side channel, meaning we’re extracting information not from the message itself, but from metadata like timing.

Alas, the Ministry of Health does not timestamp its press releases, but fortunately avid Redditors do, reloading the page on repeat until the update shows up and immediately posting it for that sweet, sweet karma. Using the Reddit API, I quickly hacked together a simple Python script to extract afternoon-ish posts of links to /r/singapore and spit out the stats of how many local cases there were that day and how delayed the update was. After a little massaging by hand to account for inconsistent titles etc, I had a Google Sheet of 46 posts between My and July 2021. Here’s a graph comparing cases vs delays, with cases in blue and minutes elapsed after 3 PM in red:

Cases per day were sorted from least on the left to most on the right, and while the corresponding minutes of delay graph is spiky, the correlation particularly on the right side is clear enough even to the naked eye. Indeed, applying statistics 101, the Pearson correlation coefficient is 0.77 across the whole set (n=46), or 0.81 for days with over 20 cases (n=19), where 0 means no correlation and 1 means perfect correlation.

Applying linear regression via the FORECAST() function, we can now come up with a thoroughly unscientific prediction of cases per day based on the minutes of delay:

In short, a press release at 4 PM sharp averages out to 20 cases, and every hour of delay after that adds around 38 cases to the tally. Selecting points at one-hour intervals:

Press release timeMinutes of delayForecast number of cases
3:00 PM0-19
4:00 PM6020
5:00 PM12058
6:00 PM18097
7:00 PM240135

Why negative at 3 PM? Because the earliest time recorded in this sample was 3:30 PM. Here’s hoping we don’t need to add any more rows to the table.

Disclaimer: This is all wildly extrapolative and inaccurate, uses a poorly controlled sample, relies on the whims of random Internet posters, and doesn’t account for how unlinked, dormitory or imported cases may impact the delays. Short the STI or buy 4D at your own risk, and please don’t have a heart attack if some overworked social media person at MOH collapses from exhaustion and doesn’t get around to posting the zero-cases update until 8 PM.

Last revised on 19 July 2021.

Predicting Singapore’s next travel bubble

Singapore and Hong Kong recently announced what’s claimed to be the world’s first air travel bubble, meaning a controlled two-way corridor between largely coronavirus-free territories, with travel allowed for any reason and no quarantine required on either side. Here’s some speculation about what other countries could follow.

Don’t call us, we’ll call you

There are four countries that Singapore has unilaterally opened its borders to. However, none have yet to return the favor and none seem likely to anytime soon.

  • Brunei is the only one of the four allows any Singaporeans in at the moment, with a Green Lane for business and official travellers only, but they show no sign of easing up to tourists. Then again, the famously dull Abode of Peace is not too high on anybody’s bucket list.
  • New Zealand is closed to all non-residents, full stop. They’ve also made it clear that Australia will be the first cab off the rank if they do open up, but for time being it’s still returning residents only and they need to do a 14-day quarantine too.
  • Vietnam recently announced its first business-only green lane with Japan. Singapore may follow, but tourism is unlikely to come anytime soon.
  • Australia has been in talks with Singapore for a while, although the outbreak in Victoria put everything on hold. With that seemingly under control, things are moving forward again and the country recently welcomed its first quarantine-free arrivals from New Zealand. They’ve been careful to tamp down expectations though, and for time being it looks more likely that any relaxation would involve shorter/at-home quarantine, not a free-for-all.

The less naughty club

Another three essentially COVID-free regions, all in greater China, are considered safe enough by Singapore to require only a 7-day Stay Home Notice (SHN), instead of a full quarantine. My two cents: Singapore’s next bubble destination is quite likely to come from this group.

  • Macau was very successful at containing COVID, and has thus been very careful at reopening, currently permitting some travel from nearby Guangdong but remaining closed to the rest of China and the world, including Hong Kong. If they choose to reopen to HK, and discussions are already well underway, it’s likely Singapore will follow.
  • Mainland China has a business Green Lane with Singapore, but has yet to open to general travel from anywhere. HK and Macau will both need to come first before Singapore will be on the agenda.
  • Taiwan is planning to open its very first two-way bubble with the tiny (and COVID-free) island nation of Palau. If this works out, Singapore could follow, although you’d expect a business-only channel first. However, politics complicates things: Palau is one of the few nations that formally recognise Taiwan, but Singapore is not, and this is likely why Hong Kong hasn’t opened up to Taiwan either.

There is one more country on the 7-day list, although it remains to been for how long:

  • Malaysia, Singapore’s next door neighbour, was an early COVID success story and an obvious candidate for opening up. However, in early October things started going pear-shaped, with more and more local clusters popping up. The state of Sabah has already been put on full quarantine measures, and if things don’t improve soon the rest of the country may follow.

The fallen angel club

Two countries were previously on the 7-day list for other travellers, but have been relegated back into Division 14. (The third was Hong Kong, but they were rehabilitated on October 12.)

  • Japan remains a statistical anomaly, winding back a spike in August but still reporting hundreds of new cases daily.
  • South Korea has contained several outbreaks, but continues to struggle with low but persistent community transmission.

Both countries were popular tourist destinations for Singaporeans, and both have business Green Lanes in place, but until they can get community transmission under control, they’re unlikely to be Singapore’s bubble list.

The wish list

Various other countries have been proposed as bubble candidates. None seem likely.

  • The Maldives, with its self-contained resort islands, has been touted as being suitable for a travel bubble: just dedicate a few islands for Singaporeans only! However, while the Maldives already has an open-door policy to the world, they’ve paid the price with some of the highest per-capita COVID rates in the world, and it’s difficult to see what Singapore would get out of this.
  • Thailand has been remarkably successful at containing COVID, but they’ve kept their doors firmly locked to the outside world — you can’t even fly to or from the country on anything except government charters. There are no Green Lane arrangements, the Special Tourist Visa for hardy tourists willing to endure 14 days of quarantine was a spectacular flop, and now the shambolic military junta that runs the place is busy dealing with what’s looking more and more like a potential revolution.
  • Thailand’s COVID-free neighbours Cambodia and Laos have similarly restrictive policies, with tourist visas no longer issued and 14-day quarantines mandatory. It’s unlikely either would open to Singapore before Thailand or China.
  • Fellow air hub Qatar seems to be recovering well from a migrant dorm-driven outbreak even worse than Singapore’s, but driving cases down to zero is still a ways off and Singapore is a marginal trading partner at best.

And that’s pretty much it. Indonesia, Philippines, India, Europe, the Middle East, the USA etc are all dealing with what can only be described as raging epidemics, none of which look likely to be contained before vaccination becomes widespread. And while there are some COVID-free Pacific island states (Palau, Fiji, Vanuatu, etc), none have flights to Singapore.

Back in the dim antiquity of March 2020, I glumly predicted that the world would fragment into COVID-free islands in a sea of contagion. I was lucky to find myself on one of these islands, but it looks like there’s not going to be a whole lot of sailing between them anytime soon.

COVID theater: the upcoming gauntlet of dubious air travel safety measures

Security guru Bruce Schneier invented the term “security theater” to describe the showy but time-consuming and largely ineffective security measures adopted by airports in the wake of 9/11. As passenger flights fitfully restart in the wave of COVID-19, we are starting to see the first acts of its successor, COVID theater.  Here’s a breakdown of the theater’s performances, from the first stage of a journey to the closing curtain.

Stage 1: At the airport

Disinfection tunnels, booths and showers

Some airports are moving to mandate various contraptions that spray disinfectant at the hapless people passing through them, purporting to kill bacteria and viruses.  These are completely ineffective at sanitizing an actually sick passenger, whose viral loads are inside the body, of dubious efficacy at preventing surface-to-surface transmission, and if anything seem likely to be hazardous to health since the disinfectants used were never designed to be inhaled.  As a cherry on top, the most common ingredient is ethyl alcohol (ethanol), meaning that many Muslims, Hindus and others will justly object to breathing in the stuff.  In short, these seem to be the backscatter X-rays of the COVID era: hopefully this time it’ll take less than 12 years to ditch them.

Temperature checks

Thermal scanners have long been a familiar sight for travellers to Asian airports, and they were promptly dusted off when COVID rolled around, with Canada among others poised to mandate them.  While manual forehead checks are slow and error-prone — I’ve had several checkers report temperatures in the low 35s, meaning I’m apparently dying of hypothermia in tropical Singapore — those based on infrared imaging are a fast, scalable and sensible precaution.  However, we now know that COVID can be infectious before there are visible symptoms like fever, meaning that these alone won’t suffice.

Preflight COVID-19 testing

The gold standard of checking whether somebody has COVID-19 is the PCR swab test, but the logistics of testing people before they can board their flights are formidable.  First out of the gate was Emirates, which has kicked off mandatory COVID tests for all passengers checking in at Dubai, with results reportedly available in 10 minutes.  However, based on the linked video, this is actually a serology (blood) test that can only detect past infection, not a swab test that can detect current infection, making this pure theater.

On the government level, a number of countries like Thailand require that passengers bring along a negative real (PCR) COVID-19 test result, leaving the often rather involved logistics of getting this test to the traveler.  Hawaii is also following suit, and with time, as tests improve and become more easily accessible, I expect getting your brain tickled through your nose to become a sadly common pre-departure ritual.  Here’s hoping saliva tests become more common.

One practical complication I’ve rarely seen mentioned is the dubious accuracy of COVID tests, with rates for both false positives (healthy but tests sick) and false negatives (sick but tests healthy) varying between 3 and 20 percent depending on who you believe.  While false negatives are the bigger problem in epidemiological terms, they will be less and less common as the pandemic subsides.  The problem of false positives, though, will continue: if there’s 200 people on a flight, and 5% falsely test positive, that’s 10 people having their travel plans wrecked.  With one flight a day this might work, but what happens when an airline is dealing with thousands of false positives every day?

Check-in & security

Airports and airlines have been moving towards self check-in for a while now, but coronavirus has lit a fire under these efforts.  However, there’s enough complexity with visa checks and luggage and such that while airlines will do their best to steer people away, the manned check-in counter will remain.  Security will also continue to have humans in the loop, only with more social distancing.  There are already spread-out queues spilling out of the security areas, which were never designed with this in mind, and it remains to be seen whether this can scale as volume ramps up.


Travellers to the US used to laugh at the shrink-wrapped apples on offer in United’s famously pathetic Club lounges.  Alas, it looks like COVID-19 will have the last laugh.  Many lounges have been closed entirely, and in those that remain open, social distancing and capacity caps are in, while self-service buffets and drinks are out.  First class lounges that offer food made to order can likely continue as is, but for the rest of us, it’s going to be brown bags and shrink wrap all the way.

Mandatory masks

Last but not least, most airports and airlines have now mandated wearing masks.   This one is not theater: while the efficacy of non-medical masks in protecting the wearer remains low, even the WHO has finally come around to recommending them to help protect others from the wearer’s own infection, so expect these to stick around.

Stage 2: On board

A typical passenger airplane refreshes its entire air supply every 2-3 minutes, making its air far cleaner than (say) a meeting room.  Nevertheless, more theater awaits onboard.


A lot of ink has been expended on airlines leaving middle seats empty, which is a non-starter: no airline will agree to abandon 33% of its capacity forever, and indeed none have actually done so.  A few have made disingenuous commitments about leaving middle seats empty unless the plane fills up, which was standard pre-corona practice anyway.

One more financially realistic alternative, though, is installing plexiglass dividers between seats in economy class, and one Italian company has already come up with a concept for this.  No public takers yet.

Airlines like Singapore Airlines have also stopped allowing advance seat selection: you sit where you’re assigned, complete with a rather odd division of the aircraft into separate compartments for transiting and non-transiting passengers.

Reduced service

If you think passengers on an airplane have it tough, the airline crew bear the brunt of it.  To cut down on the number of interactions with passengers, airlines are already cutting service left and right: no drink or meal service on shorter flights, prepackaged brown bags on longer ones.  COVID is also the last nail in the coffin for duty-free shopping.

As what this means for their work uniform, these two before & after pictures from Air Asia tell a thousand words.  At least the new uniform has a vaguely reassuring Santa Claus vibe to it.

Outside business class, where the extra space and privacy will be a better selling point than ever, it’s going to be really difficult for full-service airlines to compete against their low-cost brethren.  This applies even more in markets like Asia, where personal service and sex appeal remain key differentiators.

No hand luggage

One of the weirder evolutions of the COVID era has been airlines restricting carry-on baggage or even eliminating it entirely.  I’ve yet to hear an epidemiological justification spelled out for this, but presumably the excuse is to reduce the amount of time spent standing around shoving bags into the overhead compartments.  Conveniently, the increased time spent checking in and collecting bags is the responsibility of the airport, not the airline.

And more…

Airlines, bleeding money, have taken the opportunity to cut other perks as well.  Amenity kits consist only of masks and hand sanitizer, and most airlines have dropped the in-flight magazine.  Emirates has eliminated limousine rides, free wifi and live TV, and Qantas has stopped serving alcohol.

Stage 3: On arrival

The real fun, though, begins on arrival, or to be quite precise, while jumping through all the hoops needed to be even permitted to fly into a country.

Border closures

As this world map from IATA shows, something like half the world remains completely closed (shaded dark blue), with no international flights at all permitted.  Even the lighter blue “partially restrictive” countries are in reality entirely locked down to visitors, as the vast majority of them only permit their own citizens or residents to return.

Some of these travel restrictions made sense when they were first imposed, when you wanted to restrict transmission into a virgin territory.  For the COVID-free territories like New Zealand, continuing to maintain these arguably makes sense even today.  But for the vast majority of these countries, where the genie is well and truly out of the bottle within their own borders, complete closures make no sense whatsoever.


Since COVID-19 doesn’t care about nationality, and most countries can’t legally stop their own citizens from returning, large swathes of the world now require all incoming travelers to quarantine for 14 days.  Enforcement of this quarantine varies widely: in some countries you’re taken to hotels or camps and effectively detained for the duration, while in others you can stay at home to serve your sentence, perhaps with the odd phone call to check.  And if both sides require quarantine, even the shortest return trip now requires 28 days, which is a non-starter for anything short of moving countries for good.

As an aside, it’s curious how the number “14” has now become standard.  It appears to originate from Chinese estimates back in January of how long it takes people to become symptomatic, and it has been unchanged ever since, even though we now know not just that most people become symptomatic in 5-6 days, but that they appear most contagious a few days before that.  So odds are a 7 or 10-day quarantine would also catch 99% of infections — but what bureaucrat would dare break ranks and suggest so?

Bureaucracy and travel bubbles

As complete border closures become increasingly intolerable, various “travel bubbles”, “green lanes” and other schemes to allow tightly controlled travel are starting to sprout.  As one example, here are the twelve (12) steps required to travel from Singapore to China under the “green lane” process:

  1. Obtain a letter of sponsorship from the relevant Chinese organisation, whether it is a government agency or business entity
  2. The sponsor will file an application with the local provincial or municipal authorities
  3. An invitation will be issued to the traveller once the application is approved
  4. Apply for a visa at the Chinese embassy in Singapore, if required
  5. Submit health declaration to the Chinese authorities
  6. Take a COVID-19 swab test within 48 hours before one’s scheduled flight, at one’s own cost
  7. Once the swab test results come back negative, the traveller can board the flight, taking the necessary precautions, such as wearing a mask at all times, even in-flight
  8. Take another COVID-19 swab test and a serology test, which tests for the virus’ antibodies, once one has reached China, at one’s own cost
  9. Remain in a quarantine location designated by the local provincial or municipal government for one to two days until the test result is out
  10. If tested positive, the traveller will remain in China for medical treatment at his own cost
  11. If the test result comes back negative, the traveller can proceed with the itinerary that was planned by his sponsor, and he must adhere to it for the first 14 days
  12. The traveller must use China’s local health QR code for the duration of his stay

Since this process was designed by bureaucrats, there are no commitments regarding how fast these applications will be processed, much less details about what will be considered permissible grounds for travel.  Now multiply this across every pair of countries where you might want to travel, and it’s clear this will provide a much stronger brake on business travel than business visa requirements ever did.

On-arrival COVID-19 tests

As shown by the Singapore-China path above, an alternative to quarantine is mandating COVID tests on arrival.  Vienna in Austria was the first airport I know of to offer this, with results in 3 to 6 hours, and quite a few places like South Korea and Iceland have now followed suit.  You’re still typically detained until the test results are out, but at least you can be on your way, if not the same day then at least the following one.

My money is on this becoming the gold standard going forward, because no country is really going to trust any testing done elsewhere.  It’s just too easy to fluff up, forge or bribe your way to a negative test.  So expect arrival in a country to mean a smile for the camera, a digit on the fingerprint reader, and a cotton swab up your nostril.

Movement restrictions

But after you’re through the gauntlet, are you finally free?  If Japan’s proposals come to fruition, not really: despite successfully passing through all these hoops, business travellers permitted into the country will be restricted their hotels and offices/factories, with use of public transport off limits.  The mind boggles at how the bureaucracy can delineate what is permissible and not (customer offices? shopping malls? restaurants?), much less how they expect to enforce this.

Most other countries, such as (once again) South Korea, are outsourcing the job to technology: instead of trying to proactively limit where they can go, they just require foreign visitors to install a tracking app, so their movements can be traced afterward.

Is all this theater worth it?

Any discussion of whether these measures are “worth it” involves a complex calculus that goes beyond the already involved economy vs health tradeoffs of any COVID-related policy.  Airline travel is more emotionally charged than a trip to the supermarket, for travellers and decision makers alike, and there are two separate risks to weigh: the spread of COVID-19 between passengers, and the risk of bringing COVID-19 carriers to somewhere where they can infect others.

For the first, the sheer weirdness of being crammed elbow to elbow with strangers in a tin can hurtling through the troposphere for hours on end causes anxiety in many people at the best of times.  Now mix in the fear of catching an (occasionally) lethal disease and you can see why people are freaked out.  Airline travel is also one of few venues left where the 1% have to rub shoulders with the hoi polloi on fairly equal terms, meaning that legislators, a frequent-flying bunch, are directly incentivized to promote “safety”, certainly when compared to, say, worrying about working conditions at an abattoir. And America being America, airlines are fully aware that if they follow anything less than best practice, they leave themselves open to lawsuits. So if any one airline rolls out a safety measure, no matter how cumbersome or pointless, all others now face pressure to adopt it too, or risk having it used as legal ammo against them.

For international travel, though, the primary driver for these restrictions is the same as it is for security theater, namely politics. In the same way that nobody wanted to be seen to be soft on terrorists after 9/11, letting “diseased foreigners” into your country is electoral kryptonite, and we’ve already seen that while these restrictions were quick to ratchet up, they will take a long time to wind down.  (Fun fact: Richard Reid tried to blow up a plane with his shoe in 2001, and the TSA is still peeling off everybody’s sneakers almost 20 years later.)

So how big are the risks?  For on-board transmission, we know that with the original SARS, there was one well-known flight that saw at least 16 people get infected.   Yet to date there seem to be no signs that travel would be unusually risky: for example, the superspreaders events database at time of writing contains zero (0) known superspreading events within an airplane or an airport.  I’m no epidemiologist, but these 511 people interviewed by the New York Times are, and they figure that a flight is slightly riskier than a haircut, but slightly less risky than riding a bus or subway.

(Update: There has been at least one superspreading incident on an airplane now, namely case #17 in Vietnam, who appears to have infected at least 10 people on the same London-Hanoi flight.)

As for preventing COVID-19 from spreading at the destination, this is a clearer risk, and in the early stages of the pandemic the virus obviously spread from country to country by airplane.  The limiting factor for safety measures on this front is alternative methods of travel: if there’s nothing preventing you from driving from New York to Miami, or Frankfurt to Malaga, there’s not a lot of point to swab testing or quarantining flyers.  So here too it’s the locked down island nations like New Zealand, Australia and Japan, where arriving by air is the only realistic option, that seem likely to insist on the tightest measures for the longest.

Last year, I clocked 150,000 miles on a plane.  This time, it’s not looking likely that I’ll be on a plane again before the end of the year.

Islands in the sea: A simple model of a world with endemic coronavirus

TL;DR: The world is likely to soon be an archipelago of coronavirus-free islands in a sea of infection, and will remain so until an effective vaccine or treatment is globally available.

First up, a disclaimer: I’m not recommending any particular course of action, since I don’t claim to have the expertise to do so.  This is based entirely on analysis of the second-order effects of actions already being taken around the world today.

Creating islands

China has demonstrated to the world a simple and brutal but seemingly effective strategy to suppress the coronavirus pandemic. Isolate people in small groups, wait out the incubation period while removing the sick, repeat until everybody is healthy or dead.

Once you have created a coronavirus-free space, you also need to regulate entry to it to ensure no new carriers slip in.   Basically the same approach applies here as well: create an “airlock” by strict quarantine of all would-be entrants for 14 days, after which the healthy can enter.

Stating this in a few sentences is easy.  Actually implementing it with no gaps, meaning every local transmission and every infected visitor is successfully caught and quarantined, is fiendishly difficult, and many will try but fail.  If so, the world can soon be split in two:

  1. Islands, where local transmission of coronavirus is not present and there are strict entry controls to keep it that way.
  2. The rest of the world, or the sea, where coronavirus either is spreading locally or can be reintroduced at any time due to lack of effective controls on population movement internally or externally.

It’s important to note that islands need not be entire countries. A reverse quarantine zone, intended to keep disease outcan be implemented by any polity with control over its territory and the ability to keep out outsiders, be it a state, a province, a city, a farming village or a mountain cabin full of preppers.

So what?

If this pans out, the implications for the next year or two are enormous and complex, but we can draw a few straightforward conclusions:

  • Travel will remain extremely restricted.  Islands, paranoid about becoming infected, will be slow and cautious about opening up to other islands, hostile to anybody entering from the sea, and unwilling to send anybody into the sea themselves.  Would-be islands, trying to prevent new carriers from entering, will also restrict travel and apply quarantine measures.  Truly dysfunctional governments will be unable to restrict travel in or out, but their population will have other priorities.
  • Poor countries are likelier to end up under water.  If they lack the ability to enforce population isolation, keep their borders locked down, detect the inevitable slip-ups and track down their contacts fast, they will not be able to stop transmission.  Premature declarations of victory, followed by lapses back into the sea of community transmission, are likely.
  • Larger nation states may fragment.  If a country-level island is not possible, smaller entities may try to form their own.  For example, the Australian island state of Tasmania has already requiring all arrivals even from the rest of Australia to quarantine for 14 days.
  • Herd immunity in the sea will not end travel restrictions.  The population of the islands is not immune, so they will continue to heavily restrict travel from the outside.
  • Only universal vaccination or an effective early-stage cure will dry up the sea.  These are the only controlled ways to either bring immunity to the islands, or make the risk of getting sick tolerable. Even after islands vaccinate their own, they will continue to restrict travel from infected zones, because no vaccine is perfect or available to all.


Mofobikalypse: Mobike is Sydney’s last bike share still standing

Back in February, I prognosticated that despite having the worst bikes to ride, Mobike was going to win Sydney’s bike share war.   Three months later, it’s starting to become clear that they did indeed win… so far.

Four reasons Mobike won

The first reason is simple: they’re the only ones still trying.  In the last few weeks, not only has a fresh flood of Mobikes hit the streets, but some of them are the next-generation Mobike Lite 2nd gen bikes that are much lighter than the old ones and have seat height adjustable up to 180 cm, making them so much more pleasant to ride.  Still no gears, and they feel a lot flimsier since they have a normal, exposed chain transmission instead of the Heavy’s fully encased shaft, so it remains to be seen how they’ll stand up to the mean streets of Sydney, but all in all they’re now almost as good as Ofo bikes used to be.  By comparison, what was the last time you saw a new Ofo or Obike?

On that note, while the few remaining Ofos and Obikes are looking pretty beaten up these days, the indestructibility of Mobikes has served them well and the average Mobike is still perfectly functional, although it’s worth checking the brakes before taking off.  That said, some troglodytes have figured out that if they smash the lock button with something hard enough, like their skull, they can not only pop off the button, but bend the underlying pins so badly that people can’t unlock the bike anymore.  Sigh.

Third, Mobike has much better pricing.  Single rides start from $1.50/hr, which is already better than Ofo/Obike’s $2 minimum, but the killer app is their $7 per month Mobike pass, which gets you unlimited 2-hour rides.  My typical ride is ~1.5km around Darling Harbour between the office and the bus stop, so if I do this twice a day for four weeks, I’m looking at $160 on Ofo… or $7 on Mobike.  Not a hard choice, is it?

Last but not least, Mobike is the only one still restocking helmets: here’s a recent shot of 6 Mobikes in a row, where every single one has a helmet.  (Although I’ll admit this was more like winning the lottery than a daily sight.)  Given that the boys in blue are actually enforcing the law every now and then, meaning you risk a stonking $319 fine if caught without one, you’re a fool to bike without a helmet — and good luck finding one that’s not orange.

…but for how long?

All that said, I’m not sure how long this current happy state of affairs will last.  Restrictions are getting tighter, with the entirety of Darling Harbour (including the bike racks!) being marked as a no-parking zone in the Mobike app despite being possibly the best place to bicycle in the inner city, and those helmets will keep disappearing unless either the law is changed or Mobike comes up with a way to enforce returning.  (Side note to Mobikers who just plonk the helmet in the basket: stop doing that, srsly.  Lock it up.)

But that’s the other nice thing about the $7/month plan: you don’t need to commit too far in advance, and you can always stop when it’s no longer working for you.  In the meantime, I’ll keep Mobiking.


Monaco: Doing the math on an ICO where the house always wins

genting_hotelMonaco has a nifty premise: it’s a debit card that lets you avoid currency conversion fees by the magic of cryptocurrencies. Just swipe your card to pay in local currency, so the pitch says, and it will send some Ethereum (ETH) or Bitcoin from your account to the merchant at “perfect interbank exchange rates without markups or fees”, saving you 6-8% on every $1000 you spend.

That’s a pretty bold claim in itself, and I’ll get back to it later, but the even more interesting thing is that this company’s Initial Coin Offering (ICO) has been backed to the tune of 54,800 ETH, or around US$20 million at time of writing.  (Update: The final number was 71,392 ETH, worth US $73m in January 2018.)  That’s a lot of coin for a debit card, and I became curious: what kind of margins these brave investors can hope to get back?

Revenue and profit

skyway_valleyInvestors in Monaco become holders of Monaco Card Tokens (MCO).  Monaco promises these investors exactly one source of revenue: a flat 1% licensing fee on all debit card transactions paid with cryptocurrencies, which is converted into ETH immediately and added to a pool called the Asset Contract.   This also means that any transactions made using Monaco but funded by fiat, which in Monaco’s own opinion will account for 60% of transactions in the first year, will net investors precisely nothing.

The Monaco whitepaper (PDF, page 24 onward) has “Conservative” and “Optimistic” scenarios that purport to sketch out the vast profits to be made.  Once you puzzle your way through what the numbers mean, three things jump out quite quickly.

First, they assume that Monaco will pick up 165,597 or 281,515 regular users in the first year. That’s a mighty ambitious uptake number given that some estimates for the total number of cryptocurrency users hover around the 1 million mark, meaning 1 in 4 of them would need to start using Monaco within a year (and not competitors like Token or TenX). By the second year, the optimistic model has nearly all of those million on board and churning through $2 billion, and by five years (2022), we’re at 5 million and $16.6 billion. The conservative model, on the other hand, calls for a mere 3 million users and $9.8B by 2022.

Second, there’s a blandly named factor called “Growth in Underlying Assets” which purports to project how ETH will appreciate against the US dollar, and has nothing whatsoever to do with Monaco itself.  The conservative model assumes a mere 40% year, compounded forever, while the optimistic model assumes 100%/year.  This translates to a source of 3200% growth within five years, irrespective of Monaco’s popularity!

Third and most strikingly, while the whitepaper presents lovely big numbers for the value of the pool as a whole, there’s nothing about profit per MCO, the value of each MCO, or the expected return on investment (ROI).

So I did my own math: I computed the ROIs for the whitepaper’s numbers, and I added two models of my own.  In my “optimistic” model, I assume that each of the ~2,000 investors manages to convince 5 other people to get a Monaco and use it with cryptocurrency to the tune of US$2,500 a year, and that ETH stays at its current valuation.  In the “pessimistic” model, I assume that the only people using it are the investors themselves, they only spend $1,000/year, and that ETH prices fall back to $150, a level they last plumbed in the dim antiquity of four weeks ago. Here are the numbers for the first year for all four models (raw data):

Source Gyrovague Monaco
Model Conservative Optimistic Conservative Optimistic
Profit per MCO (USD) $0.0008 $0.0100 $0.0873 $0.1484
Return on investment 0.04% 0.47% 4.07% 6.93%

That’s not looking too great unless you’re hitting the Kool-Aid pretty hard.  But since investors have bought their MCOs at around 140 MCO per ETH, which works out to around $2.14 per MCO at current exchange rates, you might naively assume that after the ICO is over, they can at least sell them back for more or less the same price.  Right?

Not so: all of that sweet, sweet ETH now belongs to a future Swiss company called Monaco GmbH, not the investors.  The MCO Creation Terms section 2.4 helpfully spells out what their investors do get if they sell (“burn”) their MCO:

the right to claim … a pro-rata share of net license revenue (License Revenues) … if – and only if – the Monaco Card Project successfully generates such License Revenues.

In other words, the original price is completely irrelevant.  When measured in USD terms, one MCO is worth only the revenues computed above divided by the number of MCOs, plus, since they’re in ETH, the natural appreciation (or lack thereof) of those revenues.  With an estimated 10 million MCOs sold, here are what the models predict two years in:

Source Gyrovague Monaco
Model Conservative Optimistic Conservative Optimistic
Value of MCO (USD) $0.0008 $0.03 $0.90 $2.20
Profit/loss per MCO -$2.14 -$2.11 -$1.24 $0.05

In other words, if the card goes completely gangbusters and ETH continues to skyrocket, an MCO will be worth slightly more than what it originally cost, whereas if the card is moderately successful, it’s worth about 3 cents.

But I mentioned ETH skyrocketing.   What if our investor had just held onto the original ETH instead of turning it into MCOs?

Source Gyrovague Monaco
Model Conservative Optimistic Conservative Optimistic
Value of original ETH $0.54 $2.14 $4.20 $8.57
Profit/loss per MCO,
compared to holding ETH
-$0.53 -$2.11 -$3.30 -$6.37

Oops.  Perversely enough, it looks like the better ETH itself is as an investment, the worse off you are putting any of it into MCO!

Using the card

skyway_mistSo that’s the deal for investors. How about ordinary users who just want to use the card to realize those great 6-8% savings?

That’s a very good question, since there aren’t any users yet. In fact, Monaco has yet to announce when the cards will be available or what costs like annual fees will be associated with them. Their website also has lots of pretty pictures of their mobile app, but this app, too, remains firmly unreleased.

The other big mystery is the promise of “perfect interbank exchange rates without markups or fees”, since cryptocurrency exchanges do charge fees, which are often quite meaty at that (for example, 4% at Coinbase).  It is unclear how Monaco intends to make these costs go away, and the whitepaper (4.6) handwaves this away as “proprietary”, but one obvious option would be to take a leaf from the credit card playbook and quietly tack it onto the exchange rate itself, which would of course defeat Monaco’s primary purpose.  The currencies themselves also charge for transactions, which particularly for Bitcoin have recently been prohibitively high with fees of several dollars a pop, and as far as I can see Monaco never discloses who pays these.

If you signed up for a regular credit or debit card, details such as these would be found in the terms and conditions of that card. However, despite promising free “Monaco BLACK” cards to the first 500 investors, Monaco has yet to publish such a document.


Monaco looks like a great deal if you are Monaco.  Otherwise, steer clear.


Half the Donut: Why an entrepreneur earning $100k gets to keep over $99k in Singapore but under $57k in San Francisco

The donut of doom: Total earnings vs total tax in California

You’re about to quit your job and start living the life of a one-man entrepreneur. Living in your basement, you have no rent and no employees, and since you’re selling your skills you don’t need venture capita yet, but you’re still dreaming big. All things being equal, where should you base your business?

Tip: Probably not in the place where the taxman takes a red bite like this out of your income donut.

More specifically, in each of San Francisco, Helsinki, Sydney, Tokyo and Singapore, if your business earns $100,000 in net revenue and pays you a “ramen-profitable” $2000 monthly net salary:

  1. How much post-tax profit will your company make in a year?
  2. If all of this profit is paid out in dividends, how much does will you have left after taxes?

If you’re wondering why I picked those five cities, part of the reason is that it’s a nice geographical, cultural and political spread, but mostly it’s because I’ve either founded a company or worked for a company based in each of them.  The $100k net revenue/$2k net salary model, funding product development on the side, is basically what I modeled my one-man consulting company on back in 2006.

To jump straight to the answers, click here. If dividend imputation and municipal inhabitant taxes get you all tingly and excited, read on. Hardcore masochists who’d like to double-check my math are also invited to examine the gruesome innards of this Google Docs spreadsheet.


This is a hypothetical exercise, so I’m going to simplify as much as I can, the accounting is still stupidly complicated and there’s a whole lot of cramming square pegs into round holes going on.  In particular:

  • I ignore all non-financial considerations. Visas, availability of talent, infrastructure, economic prospects, legal and political environment etc are all important real-world factors for locating a business, but out of scope for today.
  • $100,000 is net revenue, we ignore all expenses aside from salary and tax. In other words, $100,000 is what’s left over after business registration, accounting, stationery and whatnot, and we also assume that those costs are the same across all countries.
  • We assume sales tax does not apply.  This is not as unfair as it seems, since most countries exempt companies until they reach fairly high yearly sales thresholds and exclude online and/or international/interstate sales.
  • The business has no tax deductible expenses. This is particularly unrealistic for the United States, where 72,500 pages of federal tax code means creative deductions are a national pastime, but them’s the breaks.
  • Pensions are accounted for on a defined contribution (what-you-pay-is-what-you-get) basis, so $1 put in now is worth (at least) $1 later. This is true for Singapore, Australia, US 401(k)/IRAs and some Japanese corporate plans;  this is manifestly not true for US Social Security or the national plans in Finland and Japan, but for lack of a better measure we assume it is anyway.
  • Taxes are computed assuming that pension and health insurance contributions are tax-free, which allows me to ignore the distinction between employer and employee contributions.
  • The owner is a full-fledged local resident under 40 for the purpose of tax, pension, insurance etc brackets.
  • For the sole purpose of minimizing futzing about with exchange rates, for income tax thresholds etc I’m going to merrily assume that 1 USD = 1 SGD = 1 AUD = 1 EUR = 100 JPY. This is obviously not correct, but is not all that much worse than picking actual exchange rates that’ll be out of date in moments anyway.

Last but not least, this is a work in progress, a revision history is at the bottom of the article.   Now, let’s roll up our sleeves, channel the spirit of the late great Herbert Kornfeld, and balance this shit wit’ a quickness.

Round 1: Paying a salary

$2000 x 12 = $24,000, leaving $76,000, right? Not so fast. There are four main things to worry about here: income tax, pension fund contributions, payroll taxes and health insurance. Both pensions and health insurance are tricky since our countries’ systems vary so widely, so we’ll just attempt to standardize the legislative minimum. And since all these fees are usually percentages of salary, we have to work our way backwards starting from desired post-tax income to get to the employer’s cost.

Golden Gate BridgeIn San Francisco, I’m going to cheat a bit and outsource the otherwise horribly complex income tax computation to the MIT Living Wage Survey, which figures that for a single adult, it takes pre-tax earnings of $26,692 to have $1,929/mo left over after tax, an effective tax rate of 13.28%.  Optimistically assumes that rate stays the same at $2,000/mo, we now need $27,675.  Next, we add in a 6% employee pension contribution with 6% employer matching (+$3203) and boost medical from $149/mo to a post-Obamacare estimate of $368/mo (+$2628).  On top of this, employers have to pay 6.2% of wages for Social Security, which I’ll lump as a “pension” for the purposes of this article; 1.45% for Medicare; 3.4% for CA unemployment, plus 1.2% and 0.1% of the first $7,000 only for federal unemployment and employment training tax respectively. (Huge props to ZenPayroll.)  In a rare bit of good news, SF’s payroll tax (1.5%) only applies once total salaries exceed $150,000, so we can ignore this.  We thus arrive at $36,773.

Ice, HelsinkiIn Helsinki, personal income tax is so complicated the only sane way to compute the effective rate is to punch numbers into the official tax calculator.  A gross income of €29,000 and zeroes for everything else, including being a godless pagan who avoids church tax, nets income of €23,978, for an effective rate of 17.32%.

As a >30% shareholder of his own company, our hero can apply the lower “YEL” pension employer contribution of 17.55% for two years.  On top of this, we have the employee side pension contribution of 5.15%, 2.04% mandatory health insurance, and 0.80% employer/0.60% employee unemployment insurance.  We thus arrive at €36,615, which is, rather incredibly, a hundred bucks less than SF, and this gets you a cradle-to-grave Scandinavian welfare state!

Expressways in Shinjuku, TokyoIn Tokyo, national income tax (shotokuzei) is 5% for the first Y1.95 million and 10% above, plus a flat 4% prefectural and 6% municipal tax (which combine to form jūminzei, resident tax), which works out to 16.6%.  For pension, you can pick the national plan (kokumin nenkin) at a fixed Y14,980/month regardless of income, or a standardized company pension (kōsei nenkin) at 17.120% split evenly between employer and employee; being cheapskates, we pick the national plan.  National health insurance is 80% of municipal and prefectural tax paid, which in Tokyo equates to 9.97% split between employer and employee. Phew!  (Dōmo arigatō to Japan Consult.)   Final damage 33,448 hectoyen, and I’m delighted to find out that I’m apparently the fifth person in the history of the Internet to use that lovably awkward term.

Sydney Opera HouseIn Sydney, the Tax Office says the first $18,200 of income are tax-free and the next bracket until $37k is 19%, for an effective rate of 5.36%.  The minimum pension (superannuation) contribution is 9.25% and Medicare (public health insurance) levy is 1.5%, and since our total income is under $84k, we’re not required to pay the Medicare levy surcharge for not having private insurance.  Payroll taxes in Australia are administered at the state level, but New South Wales only applies its rate of 5.45% once payroll exceeds $750,000, so that particular bullet is dodged, and at $28,087, the end result is easily the lowest of the bunch.

Shophouses in Katong, SingaporeIn Singapore, income tax is easy: 0% for the first $20k, 1.4% for the next $10k (usually 2%, but they’re discounting 30% in 2013), for a scarcely believable effective rate of 0.24%.  Mandatory pension (CPF) contributions for employees under 50, which include a health insurance component, are 16% for the employer and the 20% for the employee, with a maximum contribution of $1800/mo (not applicable here). The only other obligatory cost is the Skills Development Levy at 0.25% of salary, capped at $11.25/mo.  This equates to $32,777.

We can now compare the total cost of employment, ie. how much it costs the company to pay the owner that $2000/mo salary:

Employer cost vs take-home pay

But while taxes disappear into the gaping jaw of Leviathan, pensions are retained by the owner in some form of another (see Disclaimer), so a more instructive comparison deducts salary and pension from total cost to arrive at what I’m calling “employment overhead”:

Employment overhead

At the end of Round 1, Singapore is the clear winner ($117!) and Sydney a close second, followed by Helsinki and, at the back of the bus, Tokyo and San Francisco, where nearly $8k disappear in a puff of smoke.

Round 2: Corporate tax and dividend taxation

In our idealized mini-company, everything that was not paid out to the employee is pure profit. If the company wants to dish them out to its sole shareholder, how much do they get after the taxman takes his share?

Cable car, San FranciscoIn California, a C corporation pays 8.84% corporate tax.  (A pity we’re not in Nevada, where it would be zero.)  Pile on federal taxes at 15% to $50k and 25% to 75k, noting that you can deduct your state corporate tax first, and we get 23.7%. Since California treats dividend income as ordinary taxable income, in the $36k-to-87k tax bracket you’re looking at 25% to Uncle Sam, 12.3% to California, 3.8% to Medicare and 1.2% for “deduction phaseouts” (wat?), totaling a whopping 42.30%. Tot these up, and our entrepreneur is left with 44% of what the company earned, or $27,828.  And if that sounds bad, here’s a calculation that arrives at 26% when you max out both tax brackets!

That said, if you’re going to do this in real life and do not have ambitions to grow to be the next Google, you should almost certainly opt for an S corporation or an LLC instead.  These don’t pay corporate taxes: instead, they pass their income (or loss) onto their shareholders, who then pay normal income taxes.  This is good if you’re keeping the money, but terrible if you were planning to reinvest it.  However, since all other corporation types in this little survey are “real” companies that can choose to reinvest or issue dividends, I felt that a C corporation is a fairer comparison point.

Geese in Hietaniemi Bay, HelsinkiIn Helsinki, both corporate tax and the tax treatment of dividends was revamped in 2013.  From January 2014 onwards, corporate tax is 20%, leaving €63,385 in post-tax profits.  The basic capital gains tax on dividends is 30% (but 32% above €40k), with a tax break of 75% on the first 8% of “free capital”, which for our newborn company equates to the total yearly profit.  This works out to an effective rate of 28.59%, leaving €36,211 in our hero’s bank account.

Cherry blossoms in Korakuen Garden, TokyoIn Tokyo, corporate taxation makes Japanese payroll and income taxes look simple.  Based on this handy summary from JETRO, for “a small company in Tokyo”, corporate tax is 15%, “restoration corporate surtax” (read: Fukushima surcharge) is 1.5%, prefectural and municipal “inhabitant taxes” in Tokyo are 0.75% and 1.85% respectively, “enterprise tax” is 2.70% (I presume this is meant to discourage entrepreneurship?) and as a cherry on top “special local corporate tax” is 2.19%, for a total of 23.99% but an effective rate of 22.86% for reasons I won’t even claim to understand. But wait! Once your earnings top Y4m, new rates apply and you now get socked for 24.56%.  In effect, the effectively effective rate is an ineffective 23.54%.

So that’s taxes, now dividends, which are even more like tentacle porn. To quote Japan Tax, “As so often seems the case with Japanese individual taxation, what would be expected to be a simple tax matter is made overly complicated by a range of expiring tax benefits (that are often revised or extended) and a range of alternative obscure reporting elections, deductions or exemptions.” The short of it is that the withholding tax rate for unlisted shares is 20%. The long of it is that you can then choose to report or not report it as ordinary income. If you do report, you have to pay income tax, but receive a dividend deduction of 12.8% for overall income of Y10m or less but 6.4% above which offsets the withholding tax and, you know what, fuggedaboudit. Pay 20%, end of story, and keep 40,709 hectoyen.

Sydney Monorail on Darling BridgeIn Sydney, company tax is a flat 30%, no if ands or buts, and the highest rate in our survey.  Dividend income is treated the same as ordinary income and taxed at same rate, except that thanks to dividend imputation you get “franking benefits” that are meant to offset the corporate tax already paid.  Acting on the optimistic assumption that they do, this means all that’s left is the difference between the corporate tax rate and the receiver’s marginal income tax rate, in our case 32.5% (for the $37k+ tax bracket) plus 1.5% levy, or 4%.  This leaves a rather juicy $48,326.

Singapore city at duskIn Singapore, corporate tax is usually 15%, but new companies in many sectors including IT pay zero (0%) tax for the first three years for their first $100k in profit, no special applications needed.  There’s also a whole slew of other tax incentives, including 4x deductions of IT gear and, most incredibly, cash transfers of up to $5,000/year from the tax man for companies that make a loss despite earning over $100,000 in revenue, but that’s another story and our rules exclude this kind of thing anyway.

Singapore has no capital gains tax, so Singapore company dividends are also tax-free. The company can thus pay out $67,223 in dividends, and the shareholder gets every last cent. This means our entrepreneur’s yearly earnings after tax are $91,223, and adding in the $8,640 sitting in their pension fund, they have managed to hold on to $99,883 of it.

Company profit vs dividends after tax

Dear reader, if you made it this far, I salute you. Now all that’s left is to sum up your salary, your pension and what’s left of your dividends to see how much of your $100,000 you still have left over.


Total left over from $100k

Singapore romps home as the undisputed winner, with the entrepreneur keeping a scarcely credible 99.9% of what they started with. It’s just a real shame that, for political reasons, the government has recently gutted the EntrePass scheme and thus made it close to impossible for a foreign one-man entrepreneur to set up shop.  (If you’re keen anyway, check out the Singapore Expats “Business in Singapore” forum or drop me a line.)

Somewhat to my own surprise, Sydney rocks up in second place with 74.6% left over.  Australia’s not what you’d call a low-tax (much less low-cost) country, but income tax is highly progressive and the dividend franking system means you only pay tax once on dividends, meaning that at low incomes you get to keep most of what you earn.  The calculus would change pretty rapidly if you earned $200k and found yourself in the 45% income tax bracket.

Helsinki and Tokyo show up neck and neck in 3rd and 4th place, with 66.8% and 66.5% respectively. Both have heavy taxation of income, payroll, corporate profit and dividends, but no total clangers. (Except Finland’s 24% value-added tax, the exclusion of which makes Helsinki unrealistically rosy, unless you can source all your income from outside the EU.)  The canny entrepreneur could nudge up both of those figures: in Tokyo, you’d actually want to pay yourself more salary since income tax is lower than corporate tax, while in Helsinki the reverse applies.

And trailing the pack with barely half left over is poor old San Francisco with 56.9%.  Now obviously there’s more to deciding where a company sets up than taxes, because otherwise Silicon Valley would be empty… but unless you really need to be there, from a financial point of view setting up pretty much anywhere else seems to make a whole lot more dollars and cents.


Thanks to corporate law ninja Joe & serial entrepreneur Juha for a sanity check of the US, Finland and Japan calculations, Tuomas Talola for corrections to Finnish calculations, and my Singaporean accountant, the infatigable Ms Tan, for clueing me onto this stuff back in the day.  If you spot any mistakes, drop me a line.

Incidentally, Joe says that a fairer version of this exercise would model the corporate and personal taxes of each country and then solve for the optimal combination of salary and dividends.  Any takers?

Revision history

31 Oct 2013

  • Recomputed Finnish income taxes with tax office calculator.
  • Adjusted Finnish employer pension to use YEL rate instead of TyEL rate.
  • Corrected Japanese pension to pay national pension (kokumin nenkin) only.

Lonely Planet: This is Not the End

not-the-endCommenting on the affairs of past employers is bad karma, but the media circus surrounding Lonely Planet’s recent restructuring, with Skift’s hash of disgruntled misinformation and the Guardian’s premature obituary, is sufficiently misguided to warrant an unsolicited opinion.

Lonely Planet is and has always been a print publishing operation. Despite their carefully cultivated hippy-dippy image, the Wheelers ran a tight ship and LP was known in the industry for being able to produce and distribute more guidebooks of higher quality at a lower cost than anyone else in the business. This was achieved by a relentless focus on tweaking the publishing machine, and during my time there were regular mini-celebrations for (say) switching to a new printer that allowed cheaper color pages or trimming editing time by 10% by automating tasks that were previously done by hand in layout.

Yet being a print house left the company unprepared for the digital era, and despite its early web presence, it never seized the chance to become Expedia or TripAdvisor. Two anecdotes illustrate why:

Industrial History Museum, Merrickville, CanadaEarly on, one of the publishing execs was taking me through The Spreadsheet, which forecast in minute detail and often with stunning accuracy how much a book would cost to create and how much it would sell, taking into account everything from the cost of public transport in the destination to the impact of upcoming titles from the competition. Offhand, she remarked, “I don’t think we should be investing in digital until its revenues exceed print.”

Taken at face value, this seemed absurd. How would digital ever grow without any investment? Only later did it dawn on me: “investment” for her meant doing what the spreadsheet measures, which is putting money into books. Digital revenue would come anyway from e-books, which would be faithful replicas of print books, and once the magical 50% tipping point was reached, they could start by adding video clips of the Eiffel Tower to page 294 in the e-book.

But what if people don’t want e-books?

Later on, I mentioned the travel potential of Google Glass to one of the people in the product development team, responsible for dreaming up Lonely Planet’s future products. “Yes!”, he enthused, “just imagine if somebody wearing Glass looked at our guidebook, and they could see the latest edits superimposed on top!”

But what if people stop buying printed guidebooks?

Mind you, these were both consummate publishing professionals who live and breathe print. So at the end of the day, even though they and others at LP knew in their bones that print was falling, and that e-books and apps weren’t making up the slack, they simply didn’t know what to do about it, other than to cut more costs and churn out more books.

The new CTO Gus, on the other hand, does. LP’s asset is its independent content beholden to no-one, which drives its website and its brand. Despite debacles like BBC’s catastrophic mismanagement of Thorn Tree, at 100m+ visitors/year LP’s digital footprint remains head and shoulders above its print competitors, and its vetted content has no match (yet) elsewhere in the digital world. What’s more, they’ve already spent years putting in the hard yards to bring their technical backend up to speed as well. A relentless focus on digital is LP’s best shot at survival, and last week’s layoffs, far from being a portent of doom, are the most concrete sign yet that NC2 Media gets this as well.

National Arboretum, Canberra, AustraliaParticularly important is the unheralded switch to a “destination editor” model, which finally breaks the stranglehold the book publishing schedule has had on the operations of the entire company.  For example, this will allow the website to be updated continuously, instead of having to wait for the next book edition to roll around.  Far from giving up on content, this puts it front and center, and the move parallels The Guardian‘s digital transformation that has seen the newspaper grab a sizable online audience far outside its native UK market.

None of this diminishes the human tragedy of letting go people who have poured years of their lives into what was indeed for many more of a family than a company. But as the only alternative is slow and inexorable decline guaranteed to lead to the elimination of every single job, this is the best hand the company can play.  As the last page of LP’s guidebooks used to proclaim: “THIS IS NOT THE END”.

Down, down, down: Books, e-books and apps all trending to zero

“We expect DVD Subscribers to decline every quarter.. forever.”
— Reed Hastings, CEO, Netflix

Does your business model rely on selling paid content?  Welcome to Mr. Hastings’s world.


Many publishers continue to operate under the assumption that printed book sales are declining gradually or perhaps even plateauing.  Unfortunately the data tells a different story: the decline appears to be accelerating.  Here’s Nielsen Bookscan for the travel market:

Printed guidebook sales, millions/year

That’s from the “Guidebook Category Report, Rolling, Period 13” for 2006 to 2012.  The trendline is a simple polynomial (n=2) best fit, and if it’s accurate, the market will halve by 2015.  And while that sounds drastic, it’s by no means unprecedented, as the sales of CDs did pretty much the same thing in 2006-2009.

Of course, the market’s not quite homogenous: Lonely Planet’s been beating the trend, mostly by continuing to invest in print and absorbing customers from the rapidly-disappearing Frommers. But that just makes LP an even-bigger fish in an ever-shrinking pond.

So can the white knights of digital paid content, e-books and mobile apps, save the publishing industry?


Finding good data for e-books is a pain, so I ended up rolling my own: I grabbed Amazon’s Kindle Store Top 100 bestsellers lists since 2007, using snapshots from the Internet Archive that record the actual prices at the time, and computed average prices and the proportion of under-$5 titles, the vast majority of which are self-published.  (Source code in Ruby here.)

Average price of e-books in Kindle Store Top 100

Despite that December 2012 spike, the trend is clear, and while the decline looks gentle, my personal suspicion is that the trend line is too optimistic and that there’s a collapse looming.  For one thing, the data above is only for best sellers, meaning new books by well-known authors who command a distinct price premium; the average price of an average e-book is both lower and falling faster.  Yet even in the Top 100, the share of “cheap” books, the vast majority of which are self-published, is growing exponentially:

Books Under $5 in the Kindle Store Top 100

While I didn’t use their data directly, I owe tips of the hat to Piotr Kowalczyk, who wrote a very detailed report on the growth of self-published books on Kindle, and Digital Book World, which has been keeping tabs for the past half year (albeit looking only at the top 25).  DBW also has a credible explanation for the spike, which boils down to publishers yanking up prices in the period before they had to start allowing discounting, and further reinforces that shrinking prices are the new normal.


The collapse of prices in the mobile app world has been even more drastic, to the point that outside an  elite circle of bestsellers and the odd very specific niche, making money by selling the app itself is a pipe dream.  (All data courtesy of and the Internet Archive.)

Average price of paid applications in the Apple Store

By the end of the year, the average app will cost under 99 cents, and even that’s pulled up by every $999 BarMax and wannabe in the store.  The median price is already zero:

Share of free applications in Apple Store

In other words, over half of all apps are already free.  On current trends (and look how beautifully that line fits the data!), that will be over 80% within two years.  This is for the “premium” Apple Store widely opined to have less stingy customers; the equivalent figures for Android will be even more brutal.

What to do then?  The only answer is to figure out a way to make money that doesn’t involve readers paying for content.  Here are some ideas: