WHAT distinguishes them from many other technoreneurs is the willingness
to move out of their comfort zone, and to out their shoulder to the wheel.
This issue we feature stories of home-grown technopreneurs who have defied
the odds to carve a name for themselves in the local IT scene. These seven
men are founders and the lifeblood of thier companies. They are luminaries
from Alam Technokrat Sdn Bhd (skali.com), ATM Holdings Inc (Asia
TravelMart), JobStreet.com, The Media Shoppe Sdn Bhd, Cari Internet Sdn
Bhd, REDtone Telecommunication Sdn Bhd and Interbase Resources Sdn Bhd
(Lelong.com.my).
Each one of these men has an inspiring tale to tell. At the height of
the Internet-led tech boom, many of them abandoned cushy job in search of
fortunes in the technology world.
Needless to say, in their quest to strike gold, they faced countless
challenges. While most of the obstacles were related to funding and
keeping a tight lid on expenses, some of them learned that it is better to
focus on business solutions rather than providing a world-class
technology.
Of course, most university lecturers would balk and say they just didn’t
read the textbooks sufficiently. And these seven men, who rank among the
local IT trailblazers, would probably be the first to acknowledge it. But,
they, argue, it is precisely this nature that makes them technopreneurs in
the first place. The fact that they dare to attempt new things by
sacrificing their comfort and job security sets them apart from the rest.
Their travails appear to be bearing fruit, at least for three of them.
JobStreet.com, Skali.com and REDtone have announced that they are heading
towards listing on MESDAQ this year. The others cannot be ruled out as IPO
prospects. Find out inside what makes them tick and how they took the bull
by the horns to stay afloat, despite stiff challenges to their very
existence.
Reaping the Reward
Company: REDtone Telecommunications Sdn Bhd (formerly known as VMS
Technology Sdn Bhd).
Founder: Wei Chuan Beng, 38.
Core business: Discounted-call provider.
Survivor since: February 1996.
Biggest challenge: Cash reserves down to bare minimum in year 2000/2001
and had to lay off 30 per cent headcount.
It took Wei Chuan Beng only six years to build REDTone
Telecommunications into a well-entrenched player within the local telco
sector, with over 2,500 corporate clients and a projected revenue of RM30
million for 2003. He achieved this with a single-minded commitment towards
R&D activities. But it was not plain sailing all the way – he has had his
fair share of ups and downs.
`This emphasis on R&D almost brought us down to our knees,’ he says. Wei
says that in year 2000/2001 the company was struggling to make ends meet,
as revenues did not match cumulative R&D expenditure. `We were established
in 1997. By year 2000 we had already spent about RM7 million in R&D work,’
he explains.
But they did pull through, thanks to a RM20 million cash injection from
MSC Venture Sdn Bhd. The progress was smoother from then onwards, but not
because they turned their back on R&D activities. In fact, the bulk of the
investment went to R&D work. Wei’s confidence in focusing on R&D
activities has never wavered. `There is no way a company can grow without
innovative products. R&D activities gave us the solid foundation to launch
our products,’ he says. According to him, the company has spent about RM12
million on R&D so far. Wei, who holds a degree in Electrical Engineering
from the University of Technology Malaysia and a Diploma in Management
Studies from the Malaysian Institute of Management (MIM), says the secret
of his current success lies in training and experience picked up during
the early days of his career.
He worked for Hewlett-Packard for six years, from 1989. He started off
as a systems engineer, which enabled him to master IT technical and
customer relation management skills. Next, Wei joined the sales and
marketing team as HP’s major account manager. Wei left HP to begin his
entrepreneurial pursuit by establishing a software development and system
integration company, TQC Consultants (IT Division), in 1995. TQC
registered cumulative sales in excess of RM4 million in its first two
years. Wei founded REDtone Telecommunications with two other partners in
1996 to ensure that the Group would eventually become a telecom services
company rather than a sales/products company. What started as a dream is
now a reality.
S.Jai Shankar
Small is Beautiful
Company: Alam Teknokrat Sdn Bhd.
Founders: Tengku Farith Rithauddeen, 32 Azmi Ahmad, 38; Aimi Aizal
Nasharuddin 36; Maznida Mokhtar, 36.
Core business: E-business solutions, Data centre, Server co- location,
Local search engine, Web hosting services and Web development.
Survivor since: 1996.
Biggest challenge: By 1997, their mountain of debts stood at RM18 million.
All employees walked out.
`Small is beautiful. Don’t do what I did. When starting a company, keep
it lean and simple,’ says Farith when asked what advice he would give to
technopreneur wannabes.
He should know. Having got carried away with technology, the former
merchant banker confesses about having spent too much time on technology
instead of business solutions. Hence, they spent more than what they were
making. `We were technology driven rather than business driven. There was
simply no business (solution) in the plan,’ he recalls. The company
started out by providing Internet search engine solutions, by partnering
former Digital Equipment’s Alta Vista.
At the height of the dotcom frenzy, spending on technology gobbled up
most of the RM18 million Skali raised. That, says Farith, was their
biggest mistake. When the dotcom bubble burst, all hell broke loose, says
Farith.
But Farith and his founder-friends never gave up. Perhaps motivated by
the fact that their personal properties were pledged as collateral, they
persevered to push harder to stay afloat. `Looking back, we never thought
about quitting. We were all just too busy trying to survive. When you are
at the bottom, the only way is up,’ he says.
Thus, they embarked on an arduous, nail-biting journey, planning how to
survive. They settled for a big pay cut, with all the five founders taking
home a mere RM200 a month for a year. They had to use their credit cards
to the maximum to pay their 30 employees, who soon walked out of the
company as the future appeared bleak. He recalls having to hide his car
from a finance company, riding a motorbike and even going to his parents’
home for `free’ dinner.
With two young children to support, it was Farith’s wife, a teacher, who
became the main wage earner for the family. Throughout the trying period,
Farith remained a picture of humility, simplicity and determination.
Today, he is out of the woods.
The company turned around when Malaysia Airports Berhad gave them a big
business break. Malaysia Airports invested RM15million in early 2000 for a
30 per cent stake in Skali. They also managed to convince their investors
to trust them and invest more.
Farith now takes pride in the fact that the company is currently
chalking up a healthy growth rate of 7-8 per cent on a monthly basis. This
is mainly attributable to their having reworked the business plan to focus
more on solutions. Last year their revenue stood at about RM15 million
with about RM800,000 in profit.
Prathaban V
Three strikes but not out
Company: Asiatravelmart Sdn Bhd.
Founder: Alex Kong King Ong, 33.
Core business: Internet Travel Reservation System and a clearinghouse for
secure e-commerce payment. Provider of technology, distribution and
content for the global travel industry.
Survivor since: June 1997.
Biggest challenge: Unanticipated external shocks to the tourism industry.
The last 17 months have seen the global travel industry taking three
major hits – the Sept 11 terrorist attack in the United States, the Bali
bombing and the Severe Acute Respiratory Syndrome (SARS) outbreak. All
these events did impact on ATM Holdings Inc. But if anyone thinks this
would be the end of the Group, he is dead wrong.
According to Alex Kong, ATM CEO/founder, the Group as a whole has not
only weathered the storm but has also done rather well due to the
diversified range of its offerings. `We have a B2B and B2B2C extension to
fall back on in times like this,’ he notes. Kong’s ability to beat the
odds and survive has been the hallmark of his career in the online travel
industry.
To do this he always tries to keep one step ahead of competitors and
naysayers. ATM’s claims to a succession of firsts in the industry,
including being the first online travel reservation site in Asia to
introduce e-Ticketing and transactional m-Commerce, probably best
epitomises this attitude. The ability to survive and prosper is not
surprising considering Kong, who has a degree in Travel Industry
Management from the University of Hawaii, is a true-blue industry veteran.
He ventured into the industry as a tour guide at a relatively tender age
of 14.
But as the saying goes, the road to success is usually full of humps and
potholes. In the case of Asiatravelmart Sdn Bhd, ATM’s flagship company,
the challenges were in the form of inadequate bandwidth, inadequate
Internet payment gateway and the lack of working capital. He solved these
problems quickly before they could fester and trouble the company’s
fortunes.
For example, Kong managed to convince internationally known financiers
such as Merrill Lynch, Citicorp, Asia Java Fund and AsiaTech Ventures to
invest in ATM during critical periods for the Group.
Beating the odds and riding out the toughest challenge are fast becoming
a routine for this Miri-born technopreneur.
S. Jai Shankar
Still searching for profits
Company: Cari Internet Sdn Bhd.
Founder: Liew Chew Keat, 34.
Core business: Local search engine, Web hosting services, Web development,
domain name registration and online flower delivery.
Survivor since: June 1996.
Biggest challenge: Ran out of funds by 1999. An investor gave them a new
lease of life.
Cari’s bachelor leader, Liew Chew Keat, says they broke even last year,
but is still far from generating champagne-popping profits.
Sitting in a cosy corner in a local Starbucks yuppie hangout, Liew’s
first utterances were about how expensive a bottle of cafe latte and
orange juice are today. `I suppose I am in the wrong business. I should
have started a coffee house! Internet never was a good business,’ he
jests.
Liew is a simple, amiable man. He jokes and is downright honest when
answering questions. `We will be seven years old this June. It’s been a
long time. We have grown from `zero’ to where we are today,’ he
reminisces.
Liew created Cari single-handedly in 1996. He was then coding in C++ and
Java, while working as a programmer for the San Jose’s High Tech
Forwarders Network in the United States. He was then frustrated that there
was little information on Malaysia and decided to start his own search
engine, providing in-depth information on Malaysia.
The dotcom crash in 2000 hit them hard. Liew confesses that thoughts of
giving up did cross his mind many times. `Until 2000, I had had many
second thoughts. There was simply no income at all,’ he says. Fortunately,
a local tech company threw him a lifeline he would not forget.
While the whole world was anxiously waiting for the new millennium, AKN
Technology Sdn Bhd offered to invest RM5 million in Cari for a 30 per cent
stake on Dec 31, 1999. That offer gave Cari a new lease of life.
Using the new funds, Liew hired more programmers to strengthen his team.
By mid-2000, his staff strength had ballooned from six to 16. The funds
got him excited as he figured that he needed to do a lot of projects to
create greater visibility in the market. Today, he regrets spending too
much money on marketing.
`My biggest mistake was to allocate an advertising budget in 2000. I
spent RM500,000 advertising on radio, television and newspapers. However,
it was the wrong timing to do so. At that time many other dotcoms werealso
advertising and we needed to shout louder than the others,’ says
Liew. `It was not exactly a mistake. I would say it was a (learning)
experience. I am much wiser now.’
Prathaban V
High tech job matchmaker
Company: JobStreet.com.
Founder: Mark Chang Mun Kee, 37.
Core business: Online recruitment company with a vision to be the premium
provider of human capital in the region.
Survivor since: MOL.com July 95. (JobStreet.com was a component of it.
JobStreet.com spun off in Oct 1997.)
Biggest challenge: No one single major challenge but many small ones along
the way, which have been overcome.
Mark Chang is probably one of the best-known local technopreneurs
around. Admired for his unassuming manners and highly bold strategic
initiatives, he has certainly carved his name in the local technopreneur
folklore.
A qualified mechanical engineer from the University of Texas, Austin,
and the Massachusetts Institute of Technology, Chang’s first
entrepreneurial foray was in developing MOL.com portal. He built it into a
very successful portal even before the word portal was invented. In 2000,
he then sold MOL.com to Tan Sri Vincent Tan Chee Yioun of Berjaya Group
Bhd for RM12 million, but cannily held on to the job recruitment segment
of the portal – JobStreet.com. This outfit flourished and attracted two
rounds of venture capital funding from premium investors – US venture
capital firm Walden International Investment Group and Sumitomo Corp of
Japan.
As the CEO and founder, he provides the visionary leadership and infuses
JobStreet’s 130 employees across nine offices in four countries with a
sense of shared purpose. `Having the right set of people makes a lot of
difference,’ he notes. That’s why, he says, though in the beginning
JobStreet was working with a group of very fresh and junior staff, they
still persevered. `They had enthusiasm and energy and that helped us to
pull through, though we still had to learn many lessons the painful way,’
he says.
Asked if the current downturn is affecting his business, Chang replies
tongue in cheek: `Downturn, what downturn? The fact is business was
affected from Q4 2001 through Q1 2002 where the whole company took a 10
per cent pay cut as a precautionary measure. `However, 2002 results turned
out to be a record year for both sales and profits,’ he says. Well, the
staff not only had their salaries restored to the old levels but they also
got a bonus.
Although he understands that things will not remain rosy if the global
economy continues to struggle, he still harbours optimism. Chang reasons
that the current downturn may even help business as new clients are more
receptive to the value it offers relative to traditional means of
recruitment. Perhaps that is what sets him apart from others – a first-
rate business acumen coupled with a never-say-die attitude.
S. Jai Shankar
Local online auctions guru
Company: Interbase Resources Sdn Bhd.
Founder: Richard Tan Ling Geck, 42.
Core business: e-auction portal, content management software.
Survivor since: October 1998.
Biggest challenge: Convincing Malaysians that there is more to Internet
than e-mails.
When Richard Tan became the finance director for System Software
Associates Inc (SSA), an International EPR software company in 1990,
little did he realise that it was the first step towards a lifelong career
in the ICT sector.
Nine years later, the chartered accountant threw caution to the wind and
decided to become a technopreneur. With the help of two friends, Tan set
up Interbase Resources. It consisted of two portals – www.lelong.com.my
(an online auction portal) and www.autoworld. com.my (an automotive
portal). The former has since undergone a re-branding exercise and is now
known as www.buysell.com.my. The latter was divested to Heritage Vest Sdn
Bhd, a subsidiary of Hong Leong Credit Berhad, in 2001.
As this was during the height of the dotcom euphoria, things moved fast
for Interbase. In 2000, MSC Venture One Sdn Bhd pumped RM2 million into
the company. With the funding problem taken care of, Tan turned his
attention to tackling the other tough challenge – creating a `brand’ new
Internet platform for buying and selling in Malaysia in an environment
where the Internet is still used largely for e-mails.
The Kuching-born says unlike other countries, Malaysia still does not
have a `traditional’ market for trading of used or secondary items other
than cars and properties, and this only made the challenge more daunting.
`The other challenge is to educate the users and public that
www.buysell.com.my is a matching platform and that common sense and simple
precaution can prevent fraudulent practices,’ the golf aficionado adds. In
recent years, Tan has been fine-tuning his operational model. `Given our
experience in developing and managing portals, we decided to develop a
Website Content Management software,’ he says. The software (Interbase
CMS) allows website/portal owners to create and maintain content cost
effectively and on a timely basis.
In February this year, JetFM, an online share-trading site, invested
RM175,000 in Interbase in return for a five per cent equity stake. Under
the agreement, JetFM also has an option to increase the shareholding to 51
per cent for RM3.25 million.
Nevertheless, Tan says the founders are still majority owners of the
company. The doting father of two obviously does not intend to relinquish
control of his creation.
S. Jai Shankar
From cybercafes to content management
Company: The Media Shoppe Sdn Bhd (TMS).
Founder: Christopher Chan Hooi Guan, 36.
Core business: Technology enabler, focusing on Content Management Systems
and Knowledge Management.
Survivor since: April 1996.
Biggest challenge: Making ends meet, especially in year 2000.
Much of Christopher Chan’s success can be attributed to his knack for
convincing partners and potential clients to share his vision. In fact,
according to the chief executive officer of TMS, before year 2000, many of
the company’s projects were essentially concept proposals that customers
liked and funded. `To make ends meet, you did all sorts of businesses. We
had the Java Shoppe, a chain of cybercafes that we eventually sold or
closed down,’ he explains.
This was largely because before 2000, TMS did not seek any funds from
venture capitalists and depended wholly on organic growth. `I called it
customer-funded R&D,’ he says with a smile. But obviously, the confidence
in Chan and his ventures has not diminished among the investing parties.
Last year, TMS received RM2 million from the Multimedia Development
Corporation’s Multimedia Grant Scheme.
Besides his ability to source for funds, Chan is also adept at sitting
tight and hoping for the market to accept the products/services developed.
Patience is definitely a virtue here, as Chan acknowledges that one of
their biggest problems is gaining market acceptance for products that are
ahead of their time. `This means you have to wait until the market is
ready for your products and services. Lots of good companies underestimate
this and over-indulge in marketing activities,’ he reasons.
And his business savvyness doesn’t end there. Chan is constantly looking
for ways to handle business challenges head-on. For example, to counter
the current global economic slowdown, TMS is focusing on other revenue
streams such as training. The company, which grew about 25 per cent last
year, plans to grow by about 25 per cent to 30 per cent this year. The
Penang-born, the president of the Technopreneurs’ Association of Malaysia
(TeAM), is definitely gearing up TMS for better times.
S. Jai Shankar
