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A Generation Apart
Two Asian entrepreneurs exemplify the region's vastly different outlooks toward the Internet economy
By ERIC ELLIS
October 12, 1999
Web posted at 6 a.m. Hong Kong time, 6 p.m. EDT
Richard Li and Chan Hong Saik don't known each other, but they are alike in many ways.
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Both are the sons of successful Chinese businessmen operating in two of Asia's preeminent emigrant Chinese business centers, in Li's case Hong Kong and in Chan's Penang, Malaysia. The wealthy fathers of both men wouldn't have minded if their sons went into the family business, which happened to be the same field--property development. But after completing foreign educations--Li in North America and Chan in Britain--both sons opted to carve out their own corporate profile, to prove something to themselves and their proud families.
And both have been successful at doing so. At the ripe old age of 23, with some of his dad's cash to help him along, Li conceived a pan-Asian satellite television service, selling it a few years later to an Australian company, Rupert Murdoch's News Corp., for $950 million. At about the same age--albeit 20 years before Li--Chan started up a substantial printing and packaging business in the Penang jungle. He also later sold out to a big Australian company, making his father proud and himself a very rich man.
Infused with cash and confidence, both men in recent years have decided to reinvent themselves and have become Internet entrepreneurs. And here is where they differ. Li doesn't seem to mind paying good money for a business with no immediate prospect of making a profit. Chan wouldn't go near such a deal. The only thing that matters to him is black ink on the bottom line.
The paths of these two businessmen virtually crossed last Friday at Singapore's Ritz-Carlton Hotel, fast becoming the Netpreneur's abode of choice when in the wired island. In a function assembled before the region's rapt press, Li inked a deal to pay $33.5 million for a profitless business, an Internet startup holding company that turns over less than $3 million in annual sales. Li and his new partner, 33-year-old Singaporean Wong Toon King, spoke grandly of plans to list their company on New York's NASDAQ exchange, the forum that has made instant billionaires from a brace of profitless American Net startups. Li and Wong fully expect they will go the same way.
A floor or two above that glittering occasion, after an industrious day inking deals with banks and utility companies, Chan was enjoying a quiet cup of tea. He was explaining to me that just one sale of his company's software equals the annual sales of Silkroute Holdings, the company that Li had just valued at $108 million. And Chan's IBM-backed Electronic Business Exchange has been making a few sales, installing e-commerce systems for slow-moving banks and utilities in Asia, Australia and Europe.
"To me profits are the only thing that matters," says Chan. "Why be in business if you cannot quickly turn a profit?" He wouldn't think of going public unless his business had a sustained history of making money. Li and Wong share the same opinion but their route to personal profitability is vastly different. Li's Silkroute deal has turned Wong into a very rich man, transforming a $60,000 investment Wong and a few buddies made in 1994 into a $108 million-plus business today. And part of that deal--$6 million--is real money from Li. Cold hard cash is something not often seen in the share-swapping Net economy. It's a long way from the $300 a month Wong paid himself in 1994 to run his car and handphone while sleeping on the floor of Silkroute's office. And Li sold Star TV for an enormous amount when it too didn't make any money, except for Li and his backers.
So who's right? Chan? Or Li and Wong? Chances are they probably all will run enormously profitable businesses and Asia will be a better, richer place for their successes. There's no doubt all three have some solid business plans behind them, particularly Li's ambitious idea to wire Asia via satellite-enabled Internet access and Wong's big plan to marry, online, component suppliers with manufacturers.
But their approaches are a generation apart. The 50-something Chan has spent barely a cent on public relations while the 30-somethings Li and Wong employ teams of spruikers skilled in getting their bosses' names in the paper. As Asia's Net economy takes shape, it will be interesting to see who can generate the most impressive amount of black ink sooner.
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