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FEBRUARY 7, 2000 VOL. 155 NO. 5

First, Create the Hot Start-up's founders think they can make their red-hot site "sticky" and profitable

Never mind computers, there weren't even a lot of telephones in Sandor Hau's hometown when he was a boy. Hau grew up in Pennsylvania's Lancaster County, home to the austere Amish farming community that famously shuns modern technology. "Mine isn't a classic Silicon Valley pedigree," jokes Hau, 28, who speaks Korean, English, Japanese and the conversational German of the Amish dialect. "I think my family were the only Koreans in the county. Believe me, I know what it's like to stand out."

Cover: Dotcom Mania
As Asia's Internet start-ups race toward lucrative listings, investors have dollar signs in their eyes
First, Create the Hot Start-up:'s founders think they can make their red-hot site 'sticky' and profitable
Then Pray for The Angel: After a midlife career change, investor Jim Mellon is looking for a few good ventures
Next, Call in The Venture Capitalist: AsiaTech takes high-stakes gambles on Internet firms
Cozy Up with The Incubator: A Hong Kong financier and his British partner hope to nurture the next big things
Now You Are Ready for The Listing: Hong Kong debut endures rough ride on the market
Or, You Can Just Sell Out: Eschewing an IPO, an Indian entrepreneur gives up his portal for a quick pot of cash

Beijing Tries to Build Barriers
Regulating the Internet

Viewpoint: New Eras All Too dot.common
What's pumping up Internet-company valuations? Hot air

Viewpoint: The Sound of Asia Booming
In this online exclusive, Bob Davis, president and CEO of Lycos, gives his take on the growth of Asia's Internet economy

Now in Seoul at the helm of one of Asia's hottest Internet start-up companies, Hau is standing out big time in the region's rush to cash in on the cyberboom. Last October, he and his partners, Hans Tung of Taiwan and Fuzhou-born New Yorker Chih Cheung, launched, an e-commerce and community portal. That was after they had secured $20 million, one of the most generous injections of "first round" funding received by an Internet company in Asia. "We had an idea," says Singapore-based Tung, "we put it down in a business plan and we went and sold the hell out of it around the world."

There's a perception that the Internet is making every player rich. Not true. It takes a good idea, and then a business strategy that makes sense. Hau's company,, has both. Among those impressed by the three ex-investment bankers were blue-chip U.S. backers like Intel and the Times-Mirror group. "We were overwhelmed," says Tung. "For an Asian start-up it was a lot of money." Now's directors and advisers include plenty of "suits," representing Goldman Sachs, Broadvision, Chinadotcom and Singapore Telecom. Thanks to the cash injection, the trilingual (Korean, Chinese, English) site maintains offices in Seoul, Hong Kong, Taipei, Singapore and Silicon Valley.

The energy is palpable in's loft-like Singapore headquarters, high above the noisy bustle of the city's Chinatown. Employees are young and chic, and many are U.S.-educated. At a recent in-house business meeting conducted around a big conference table, workers guzzle strong coffee as they brainstorm through the morning's agenda. Everyone has a say; all opinions are carefully considered. The egalitarian culture is as far away from Asia's old-style business patriarchies as San Jose is from Singapore. is a kind of frequent flyer program for Asia's Net surfers. The more you spend at its e-commerce site on items like CDs, travel tickets and computers, the more points you receive toward rewards. Check your free e-mail, earn points. Complete a marketing survey or register a friend, earn more points. And so on. The idea is to promote "stickiness," the ability to keep users hanging around your site for as long as possible. Stickiness builds online communities, which attract advertisers--and the biggest stock-market valuations. Hau hopes will be profitable by October. After that, the three partners will think about an IPO, probably in the U.S.'s points system also aims to address concerns in the region about online security. Asian Netizens remain particularly reluctant to reveal credit-card details online. The points system offers something back, suggesting to users that they are not just anonymous buyers with credit-card data. "Asians are still hesitant about the security issue," says Tung. "Our system makes people a little more comfortable." If imitation is the sincerest form of flattery, has a powerful admirer: Yahoo! is also looking at a points system to reward online loyalty for its regional sites, and Singapore's big Net service provider, Pacific Internet, has instituted a similar program. "We believe the idea was ours," says Tung.

The emphasis at now is on fulfilling its promise. More than half of its new funding is devoted to promotion and brand-building. Staff members are paid minimum salaries but given maximum share options, which they hope to cash in after what Tung calls "that golden day," when the company graduates to the stock market.

But there's much to be done before then. "We expect massive competition," says Tung. "There are so many companies on the Net, and others will use programs similar to ours, so we have to be prepared." But has the jump on its rivals and, in the Internet world, being first can be very important.

First, Create the Hot Start-up
Then Pray for The Angel
Next, Call in The Venture Capitalist
Cozy Up with The Incubator
Now You Are Ready for The Listing
Or, You Can Just Sell Out

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