June 30, 2000 VOL. 29 NO. 25 | SEARCH ASIAWEEK
Asians joined Internet start-ups in droves. Now they have to decide whether they've made a big mistake
By JIM ERICKSON
Fashion Meets Frugality
Starting From Scratch
In case you were wondering if all those people who answered the call of the wild to join dotcom start-ups this year were having more fun than you, the answer is: why, yes, they generally are.
"I think for the moment, this is really my dream job," says Suresh Kanji, who gave up a management position at an international accountancy firm to become the 28-year-old finance director of Space Asia, a Hong Kong-based Internet advertising agency. "I wanted to be part of the New Economy."
Many people do - without really knowing whether they will regret excusing themselves from the old economy. Part of the attraction of Web work, besides stock options, is its mystery. There's a belief that life in an Internet start-up is not just a job, it's an exceptionally well-paid adventure. But is the New Economy workplace all that different? Asiaweek spent time with dotcom workers in China, Singapore and Hong Kong to find out. Here's our report:
The jobs remain largely the same
At this stage of Internet development, there are few dotcom job categories that do not have traditional-company analogs. Writers still write, graphic designers design, software programmers program, and accountants account. At an e-tailer, for example, "the typical job is not that different from a job at a catalog retailer, except the product is displayed on the Web instead of on the printed page," says Philip Evans, senior vice president at The Boston Consulting Group and co-author of Blown to Bits: How the New Economics of Information Transforms Strategy. True, Internet workers may have to learn new techniques and technologies. A marketing manager can experiment with mass e-mail as a branding tool, for example. But, says Kanji: "E-business is just business."
The pay really is better
A global shortage in knowledge workers translates into fatter paychecks. While low-skill employees at the bottom of the scale tend to earn ordinary wages, the difference between old economy salaries and new can be dramatic for jobs with greater responsibility. According to an April survey by human resources consulting firm Watson Wyatt, a marketing executive in a Hong Kong e-business earns a basic salary of nearly $40,000 a year, 17% more than a counterpart in a non-dotcom high-tech company. An e-business sales manager does even better: Base pay tops $100,000, fully one-third better than a sales manager in the real world.
The work environment is casual
Because the vast majority of start-ups are small, corporate hierarchies tend to be flatter. Communication up and down the ranks flows easily and advancement depends more upon ability than corporate policy. Along with a feeling of individual empowerment, employees say one of the more satisfying aspects of dotcom life is a shared sense of purpose, of belonging, that goes beyond mutual enrichment (pervasive use of options means almost everyone is an owner). Workers say they feel they are participating in an inflection point in history, helping to shape society-altering events.
Dotcoms tend to adopt the clubby, beer-and-pizza ambiance of Silicon Valley. Older employees may find that a bit discomfiting, even after they adjust to a boss barely old enough to take a legal drink. Kenny Hargrove, a 40-year-old financial journalist, showed up for his first days of work at a Hong Kong lifestyle website in a suit and tie, only to be ridiculed by co-workers in t-shirts. "Banks have casual Friday, but we don't have a formal Monday," says Hargrove. "There's this reverse fascism of dress."
The pace is frenetic
Dotcom workers wear their armpit stains like damp badges of honor. They brag about the crazy lives they lead, the 18-hour days and the lost weekends. To work for an Internet company is to be immersed in the Big Bang. A new industry is forming, worlds are colliding and a lot of energy is being released. It isn't just the quantity of work that is different, it's the quality. "You're making stuff up on the fly, improvising, guessing, drinking information from a fire hydrant with precious little margin for error," says Evans.
Chronic staff shortages mean employees often contribute to several sides of the operation at once (including fixing the fax machine when it breaks), adding to the topsy atmosphere. The emphasis is on getting results - now - not on hewing to process and sticking to turf. "At Space, we'll identify a problem at mid-morning, and by the afternoon, we're working to fix it," says Kanji, who analyzes the myriad financial propositions and acquisition deals that are commonplace in dotcomdom. "In a traditional office, [the solution] would be bogged down in paperwork limbo."
For many, participating in such a fast-paced, unstructured and fungible business is the fun part. "It's thrilling," says Evans. "But it's also rather stressful. Some people thrive on it. Other people find it frustrating."
Did we mention stock options?
The dotcommers interviewed weren't willing to dwell on it, but there is no denying the get-rich-quick mentality that drives many to the Internet, even if it means taking a pay cut. Evans calls the seductive pull of a stake in a company that could have a ridiculously successful IPO "the crock of gold at the end of the rainbow." He does not use the word "crock" carelessly. With the collapse of technology stock prices, the chances of becoming a multi-millionaire overnight have gone from Long Shot to Impossible Dream for most netrepreneurs.
What's worse, they can't even console themselves with the knowledge that their jobs are secure. Most industry analysts predict more than nine out of 10 web companies will fold over the next several years. Bricks-and-mortar firms that lost staff to dotcoms expect to be able to hire back disillusioned refugees from the first wave of Asian failures in the not-distant future. The Hong Kong office of Morgan & Banks, a job recruitment firm, has already seen five Internet defectors return. "One of the talent pools that's forming out there is people who've gone to dotcoms that have not done well," says Jackson Wilson, managing general partner for AC Ventures, the venture capital arm of Andersen Consulting. "Those people are better off because of that experience, which makes them valuable to us or to other dotcoms."
That is the common fall-back position of New Economy workers: if it all turns to dust, they say, they've at least learned valuable lessons about the Internet business and added a nice hook to their resume. "I didn't join up hoping that the company would be worth a billion dollars someday," says Kanji, "but I suppose I wouldn't mind, either."
with reporting by MARIA CHENG and STUART WHITMORE Hong Kong
By AL REYES Singapore
Did the Internet save Paul Lim's career? Not exactly, but it may have helped him gain a new lease on life. In 1994, the Singaporean was foundering in the wake of a failed media venture with a Chinese-American businessman that had cost him $300,000. Deep in debt, depressed and doubtful of his future, "My entrepreneurial spirit died," he says. He woke up one night in a cold sweat, panicky and wondering how he could have fallen into such a dank hole. "I felt like jumping," he recalls. "I was at a point where I thought I had two choices: to live or not."
Lim stiffened his upper lip and went to work at Singapore logistics group YCH, assisting its chief executive Robert Yap, who became something of a mentor. Lim married, had a daughter. But it wasn't until 1997 that he felt confident enough to strike out on his own again. With the Internet boom in full swing in the U.S., Lim left for Seattle, home of Amazon.com and Microsoft, to learn all he could about information technology and e-commerce. He spent nine months overseas, then returned to Singapore full of ideas and ready to start over.
Still heavily in debt, Lim used his contacts to raise half a million dollars in seed money to start an online shopping mall, and borrowed additional funds so he could invest personally in the venture. The project soared as dotcom fever raged. Lim worked fast to line up a wide range of products and vendors, launching the site early this year. Previously, his relative youthfulness and boyish looks counted against him in Singapore business circles. So did the fact that he had been part of a failed enterprise. Under the New Economy rules, that changed. Now, his age - he's 36 - and track record are considered big pluses.
"Before, I was drowning. The water was over my head," he says. "Then I was riding the wave." The ride, as it does for so many high-tech entrepreneurs, was about to take an unexpected and nasty turn. April's technology-stock crash dashed the confidence of Lim's backers. "Our shareholders panicked," Lim says. "I had tried to run things my way, but of course they said we had to consult them. I couldn't go at my pace. Earlier, they were excited because they could see their investment multiplying. But after the crash, they started withholding money, even though it had nothing to do with our plans. They turned out to be speculators, rather than investors." Unable to resolve differences with the money men, Lim left the company a month later - and once again found himself out of work with bankers to repay.
"It's difficult to balance paying off my debts and feeding my family," he says. Yap, his former mentor, came to the rescue. Lim, now with valuable experience in setting up an online supply chain, accepted a position as chief operating officer at consumersupplychain.com, a new venture Yap set up to provide payment settlement, order fulfillment, inventory management, and distribution services to e-merchants and businesses. Lim, who had been working on setting up similar systems for his online mall venture, now has the security of a salary and a stock-options package as well. His boss, he says, is willing to give him the entrepreneurial space to implement his ideas, while providing the necessary financial backing.
After a turbulent five years learning the personal risk and hard knocks of entrepreneurship, Lim says he is excited at the prospect of piloting a new, challenging business. Not to mention paying off his debts in time.
By RON GLUCKMAN Beijing
Zou Jun concedes it was a wild leap into the unknown. But risk was part of the reason for leaving the sensible, steady career climb at global accountancy firm KPMG for a senior position at an unpredictable Internet start-up in his hometown of Beijing. The job offered a challenging kick, and "potentially lucrative" was another phrase this audit manager felt certain would apply.
Zou, 29, had done his research. He was prepared for a lot of unpaid overtime. But even a savvy netster like Zou experienced some shocks making the transition to the New Economy as a senior staffer and part-owner of online book vendor Jingqi.com. There have been tradeoffs. Like in commute time. Often, there isn't any. That's because Zou, who drives a Citroen, sometimes doesn't find time to go home to his wife. Don't call it sleeping at the office, though. "Meetings often start at 2 or 3 a.m.," he says wearily. "We don't sleep. We just keep working."
Not long ago, Zou (his nickname is "Jacky") played badminton regularly, and hiked with friends in the countryside on weekends. Nowadays, a Sunday highlight is a dinner when the cellphone doesn't ring. Staffing is still short, so he has to do several jobs at once. He reckons he spends about half of his 80-hour week on financial planning and modifying the business plan. Another 20% of his time goes to development work such as negotiating partnerships and deals. Seminars, speaking engagements and other marketing chores, which Zou handles because his colleagues speak little English, take up the remainder.
"I'm smoking more, too," says Zou, true to form firing up first thing Monday morning on a tour of the company's headquarters. "To be honest, it has been very different from what I expected. The long hours didn't really surprise me. I'd been looking for a new job and talked to a lot of friends before I made up my mind to change. But it's still way more work than I expected. And the meetings go on and on. Sometimes people just brainstorm for hours."
For this, he took a pay cut and left the predictable world. "Accounting is very straightforward," he says. "At KPMG, we prepared time sheets. We had staff plans, finely detailed, six months in advance. Here, everything is different. There are no formulas. We don't know what will happen next month."
Or if they'll be around next month. "But I'm feeling positive," he says, sucking on a cigarette. While China abounds with online book vendors, Jingqi is touted among the top contenders. The company was formed by Xi Shu (known for his Beijing book store of the same name) who was one of the first to challenge the decades-long state monopoly on book distribution. Xi later added a franchise operation, and partnered with Xu Hui, then with MyWeb.com, to create an online presence. Currently, the company delivers books to Beijing customers by bicycle messenger.
Sales are solid, but the company needs investors to really take off, says Zou. The tech-stock wreck could make capital scarce, and the Chinese government currently forbids foreign investment in domestic Internet companies. "That's a real risk," Zou acknowledges. Moreover, according to a recent report in the Chinese press, 40 of the country's 200 online bookstores have already failed. "I'm really not worried," says Zou. "I did this for a reason, to try something new. I'm learning a lot of things. I think we'll be successful," he says - then shows he's already mastered the correct netrepreneurial attitude. "If not, I'll just try something else."
Fashion Meets Frugality
By ALEX A. SENO Hong Kong
"We almost didn't hire her," says looks.com founder Ian Smith of Jacqueline Ng. "During our interview, I was mean to her. I didn't think she could hack it with us." While the small Hong Kong-based cosmetics e-tailer could have used Ng's polish and experience in big-league regional marketing, the concern was that her three years with Cartier, the French luxury jeweler, had spoiled her for working at a struggling start-up. "We don't have multimillion-dollar budgets and money to throw around for ads in Elle," says Smith. But then Ng, 28, e-mailed him a detailed marketing proposal. "It was wonderful," he says, "and we had to bring her on board. She's been great, although I am sure that some days she still misses the old life."
Ng does get a far-away look when she talks about a Cartier party at the Oberoi, one of Bombay's grand hotels. Back then, she was mingling with expensively dressed and powerfully perfumed movie stars and Maharaja family members resplendent in heirloom jewelry. "We had the crème de la crème," she recalls. Today, the people in her target market attach earrings to all the wrong body parts, such as their navels. Her last marketing event was a rave party for 1,000 sweaty, trendy young things who hung around until dawn. Ng spent a solid 18 hours staging the event trying to showcase looks.com's line of "hip but affordable" unguents.
"We have to be creative about what we do," she says - and do more with much, much less. That means chores she once hired others to do, she does herself, like setting up product booths at company events. Now she seeks free brand visibility by doing make-up at fashion shows in exchange for a logo placement. She is trying not to break a nail.
By JACINTHA STEVENS Singapore
If Singapore issued ideal citizen badges, Steven Yeo would be wearing one on the immaculately pressed dress shirt that is his daily uniform. He attended a prestigious school in France on a Singapore government scholarship for the best and brightest. After earning his chemical engineering degree, he returned home to steadily build a model Singaporean working life. He spent seven years at the Economic Development Board followed by a series of general manager positions in the private sector. Until recently he was chief executive of one of the city's biggest travel agencies. And he doesn't mind spending his non-working hours at church or tidying the home he owns in a nice neighborhood.
These days, however, life is messier. In the mornings, Yeo, 40, gets behind the wheel of his champagne-colored Honda sedan, buckles into the leather seat, drives his wife to her modern office and then heads to Singapore's down-at-the-heels Chinatown district, where an Internet job awaits. In an old shop house, Yeo toils for a company with an unproven business model and no profits in sight. His boss is a 33-year-old Briton, Mark Weingard, who has been known to dress as a Chinese emperor for promotional videos.
Yeo, now the local managing director for Worldmine Web, a Singapore-based online travel specialist, for the first time in his life finds himself surrounded in the workplace by non-Singaporeans. Of the 40 employees at company headquarters, 60% are expats. He is getting used to hearing a variety of accents and dealing with geographical peculiarities of co-workers who are from Britain, Australia, France, Canada and Norway, among other countries. The average age is 29, and attitudes are laid back, not buttoned-down.
"We're in this adventure together," Yeo says. Amid the youthful din, he sees himself to some extent as a stabilizing force, a sounding board to test how the company's ideas and image will play with the establishment, Singapore Inc. No sandals for Yeo. He thinks it is important to keep up the "old economy look" that his government and business contacts expect.
In the late afternoon of a manic workday, Yeo has an audience with officials of the Singapore Tourism Board. He is trying to convince them to include Worldmine in a presentation at an important European travel fair. Just out the door, two young Worldmine colleagues who are also attending suddenly begin to fret about their casual attire. Yeo eyeballs them. "You're fine," he says. "You would be suspect if you were more formally dressed." It turns out the tourism officials are tolerant of California-style informality. The company is signed on.
Starting From Scratch
By MARIA CHENG Hong Kong
For every go-go dotcom CEO, for every flashy webpage, there are hundreds of lowly Net slaves, cubicle jockeys who spend long hours keypunching HTML code. After the writers and page designers have had their say, it is up to programmers like 24-year-old Andrew Lee to handle the grunt work, converting concepts into digital eye-candy.
"This is definitely what I want to do. At least for now," says Lee. Workdays can last up to 10 hours, and in that time Lee estimates that he can complete at least five webpages, depending on the complexity of the design (text is easiest, animated graphics hardest). The job can be repetitive and redundant, and while perks are few, he doesn't have to wear a tie or a plastic nametag. He works shoulder-to-shoulder with his peers in a non-descript office tower. "It's really not as boring as everybody thinks," he says. "It's like you're speaking the computer's language. It can be very satisfying to see a change on the screen after you've finished coding something." And he has his music. Lee dons headphones, switches on his CD player and listens to Japanese pop singers when the walls start to close in. "It seems a bit naughty, but it makes programming more interesting," he shrugs.
"These programmer jobs really depend on the person," says Anthony Houlahan, Lee's supervisor, a project manager at Web Connection. "For someone like Andrew, who is ambitious and keen to learn, it's an excellent opportunity. "It's bloody hard work, but it's an investment in the future."
"Joining a dotcom was the right decision," Lee says, "because I can learn about different parts of e-business." Nevertheless, he pines for more creative control and anticipates moving into management. "But that's a long way away," he says as he types in yet another line of code. More immediate is an approaching weekend and a game of basketball or tennis. "When I'm not at work," he says, "the last thing I want to see is a computer." Staring down a plastic box five days a week is dues enough.
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