SAN FRANCISCO (02/08/2000) - T.K. Wong points out the window of his office suite at the manicured lawns and the duck pond below. "Pretty nice, huh?" he grins. It's nice, sure, although not a lot different from any other Silicon Valley glass-and-chrome box. But it is a far cry from the third-floor one-room office in Wong's native Singapore that served simultaneously as a fencing school and headquarters of SilkRoute Ventures, Singapore's first Internet company, back in 1994.
That might as well have been a lifetime ago as far as the 33-year-old former fencing champion and SilkRoute founder is concerned. Here in Redwood City, Wong's new venture, Advanced Manufacturing Online, is already bursting at the seams and preparing to move to larger digs.
Wong recounts the difficulty he had finding new office space, haggling with realtors who wanted stock options in return for a lease. He eventually found space in Palo Alto, but he still won't give up that one-room office on Beach Road in Singapore - even as his group of companies continues to expand and now occupies the rest of the Beach Road building and others nearby. Wong is merely following the advice of a feng shui master who told him he must never let go of the place where his prosperity started.
Call it superstition, but Wong sees no reason to tempt fate. It has been good to him so far: He's chairman of a Silicon Valley business-to-business Internet startup with bright prospects, $30 million in venture capital funds and an IPO in the offing. How he got from a small room in Singapore to an office park in Silicon Valley is a story of vision, hard work, determination in the face of doubters and, most of all, chutzpah.
Singapore is an unlikely starting place for a fast-moving Internet company. A tiny island city-state of less than 4 million people at the foot of the Malay Peninsula, Singapore is destined by geography to remain a small market. Until recently it also had a well-deserved reputation as a hostile environment for entrepreneurs. But what could have been Wong's biggest handicap - coming from Singapore - has instead proved to be one of his greatest assets.
At first glance the story of T.K. Wong is no different from that of scores of other young Silicon Valley hotshots. No slouch in the intellect department, he got his bachelor's degree in computer science and engineering from MIT in 1989; his thesis, on distributed information systems, took the top prize in his department. Along the way, he managed to find time to captain MIT's fencing team and win the New England intercollegiate championship in 1989.
But because he is from Singapore, Wong's story is anything but standard. The usual path for Singapore's best and brightest, upon completing their Ivy League or Oxford education, is to take a secure, high-paying job in a government ministry and spend the rest of their career there. Such a progression is often dictated by the fact that recipients of prestigious government scholarships, such as Wong (coveted because they are the only means for most Singaporeans to afford a foreign education), are required to work for eight years after graduation at the institution that sponsored their degree. Making a beeline to Silicon Valley was not in the cards for Wong.
Instead, he returned to Singapore, where he joined his sponsor, the National Computer Board. He worked on the IT 2000 Master Plan, the government's long-range plan for catapulting the country into the high-tech age. Despite his lofty job title, IT architect, Wong was a bit bored. He had always considered himself a trailblazer, and this was not the cutting-edge stuff he had dreamed of. "I was so pissed when I got back to Singapore," he recalls. "The computer revolution had already happened. It wasn't new anymore."
Then, in 1994, lightning struck. Wong was in the United States, visiting some MIT buddies, most of whom were abandoning their Ph.D.s to jump into the Internet. He wanted in. "When the Internet came around and introduced connectivity as the key paradigm I said wow! This is it!" he says.
Wong went back to the National Computer Board and tried to convince his bosses to take a serious look at the Internet, which was then still virtually unknown in Singapore, even among the high-tech elite. He showed them a business plan for a new company. No thanks, they said. How could he be sure the Net was not just a fad?
"To me it was a no-brainer," Wong says flatly. Luckily he had a good relationship with his bosses and he was released from the remaining two-plus years of his bond (about $71,000, which he later repaid) to work on his new company himself. Skeptics to the end, his bosses at the NCB offered him his old job back if things didn't work out.
With a friend and less than $70,000 in seed money - every dollar he had saved, plus help from a couple of private investors - Wong started SilkRoute Ventures in late 1994. It was Singapore's first Internet company, founded before there was even a commercial ISP. (The first ISP, SingNet, was set up the following year by the government- controlled Singapore Telecom, which was then a monopoly.) The name SilkRoute was Wong's spin on the information superhighway. "The way we saw it, the Internet was the new digital Silk Road," he says. "It would bridge East and West, allow people to meet, [and] enable commerce and different ways to do business."
Wong had always wanted to blaze trails, and now he was way out in front. Under Singapore's myriad overbearing regulations, it was not even clear if SilkRoute's early business - designing and hosting Web sites - was legal.
"Technically it could be considered a 'value-added network service' and that was prohibited by the Telecommunications Act," Wong recalls. "It was really a gray area, what I was doing. Businessmen would ask me, 'Is this OK?' just to host a commercial Web site."
There were other hurdles more familiar to young entrepreneurs. Wong's mother thought he was ruining his life by throwing away his safe government job. While his friends were buying nice cars and condominiums, Wong was working around the clock, sleeping in his office on a rollout mat. "I paid myself nothing. I was so broke I put my car in neutral going downhill to save gas," laughs Wong, who now drives a Lexus.
Taking on a handful of partners, all fencers, Wong started a collection of businesses ranging from Web-page design to online marketing. They worked like madmen. When they needed to blow off steam they would put on their masks, pick up their foils and start fencing.
In December 1995, Wong and his partners founded AMO. The idea was to find new ways to apply the Internet to the manufacturing sector, which then, as now, makes up a quarter of Singapore's gross domestic product. "We were so ahead of the curve," Wong recalls. "We didn't know it was called b-to-b or e-commerce then." What they did know was that "everyone faced this problem - linking all their partners, going across borders. The industry really needed a solution and didn't have one. The Internet was the only [thing] that crossed borders."
In 1997, AMO signed up Sony and Matsushita as beta-test customers and worked with them intensively, fleshing out its system. In early 1998, AMO launched the resulting ECNet service, an Internet-based supply-chain management system for electronics manufacturers. After that, things quickly picked up steam.
In the first year after ECNet went live, AMO acquired 10 big-name customers; within a year it was up to 50. The list of clients now reads like a who's who of the electronics world: AMD, Allied Technologies, Epson, JVC, Matsushita, Motorola, National Semiconductor, NEC, Philips, Seagate, Solectron, Sony and Toshiba, to name a few.
Late last year the financiers came calling as well. AMO took in $20 million in third-round funding in October from Goldman Sachs, Doll Capital Management and Morgan Stanley. It had already received $10 million from early backers, which included AsiaTech Ventures of Hong Kong and leading British VC house 3i.
His backers say Wong picked the right niche in building business-to-business supply-chain systems for high-tech manufacturers. "Whether by accident or by Wong's brilliance, [AMO] started in exactly the right place," says Peter Moran, a partner with Doll Capital and an AMO investor and board member. Asia - particularly Southeast Asia, where Singapore historically has served as entrepot and trading hub - is where most of the world's electronics companies base a large percentage of their manufacturing operations. Many of these multinationals, which typically have plants scattered from China to Bangladesh, use Singapore as their regional headquarters.
AMO is literally in the middle, says its CEO, Bob Verheecke. "We're providing the bridge in cyberspace between one company and another [company's] operating software, and creating a hub in the center."
AMO's nonproprietary system required a lot of work up front by Wong and his engineers, who had to translate different computer files to a common format.
But "once you do that, it is stickier, harder to give that up," Verheecke says.
By serving as a central host, he adds, AMO acts as a clearinghouse for collaboration. "There have been lots of advances in manufacturing software, like [enterprise resource planning] and [material resource planning], that are getting manufacturers closer to their suppliers but never quite touching. What we're doing is closing the gap between them."
Another AMO advantage is its focus on primary production materials. U.S.-based competitors Ariba and Commerce One, the two biggest public companies that do supply-chain management, are centered on maintenance, repair and operations, or MRO. "Some b-to-b types focus on selling the equivalent of office supplies to manufacturers to help them run their business, whereas Wong is selling them the raw materials to make the product that is their business," says Moran. He points out that AMO's strategy has not gone unnoticed: Ariba and Commerce One are making acquisitions to get closer to AMO's model. In the meantime, AMO has the market largely to itself.
Wong would never have gotten this far had he not made a critical decision. In March of last year he relocated AMO's headquarters and operations to Silicon Valley. Though the company remains incorporated in Singapore, it is effectively a U.S.-based operation.
"Our customers were telling us, 'You're doing well in Asia but we're all serving global customers. If you want to do business with us you've got to figure out how to go global,'" Wong recalls. AMO was by then the flagship of the SilkRoute group, which now has nearly 300 employees (most of them with AMO) and eight small companies in the process of incubating.
But why move to ultracompetitive Silicon Valley when he could be a big fish in Singapore's small pond? Wong, whose easygoing demeanor masks an intense drive, says it was never really an issue: "This is where the action is. If you're not here you are playing a defensive strategy - waiting in Asia for some American company to come and acquire you. That's what most Asian companies are doing: sitting at home and waiting to be bought."
Wong grins, his eyes glinting with a competitive spark that leads one to think that crossing swords with him might be a perilous endeavor. "I said what the hell, I'll take the offense, come here and see what I can do. To be a true leader you have to compete in the leading market of the world - and that's the U.S., no question."
But it wasn't just the itch for a good fight that got Wong on a plane last year. No matter how smart he is or how good his idea, Singapore just didn't have the ingredients to make AMO a global player. And he wasn't thinking any smaller.
"If you want to transform an intellectual concept to a business opportunity, you need more than a good idea. You need experienced management, available capital, infrastructure that is designed to support the transformation of ideas into businesses," says Verheecke, himself a highly sought-after Valley veteran who has taken two companies public, including French software firm Business Objects. "And," he adds, "you need cultures that encourage and reward risk-taking."
Wong didn't make the move easily, however. He commuted back and forth across the Pacific every two weeks for about six months before giving up and moving with his wife and baby daughter to a townhouse in San Mateo last August.
He also must think of his parents. Wong, whose given name is Wong Toon King, is an only child (his younger sister died in a car accident a few years ago) and bears responsibility for his parents. Those unfamiliar with Chinese families may not appreciate the gravity of such family obligations, but Wong wryly says his mom and dad never miss a chance to make him feel guilty for "abandoning them" and, worse, taking their only grandchild with him. (For children less conscientious than Wong, Singapore has a "filial piety law" that lets aging parents sue kids who don't take care of them financially.) And there's another dilemma, Wong says. "On the one hand you know you can't survive in Singapore. You have to be here to be in the game. On the other hand, what value can you add? Here we're just another startup."
As much as he enjoys the buzz of Silicon Valley, Wong looks forward to going back to Singapore one day and getting in on the action there before it gets too much like, well, Silicon Valley.
Singapore is now trying to be "a more friendly place for startups," Wong says.
It has set up a $1 billion "technopreneur fund" to provide seed money for startups. It is actively courting international VC firms and has eased immigration rules to lure foreign entrepreneurs to set up shop. It has also relaxed the listing requirements on the local stock exchange. Whereas companies used to need a minimum three-year track record of profits before they could go public, now they no longer need to be profitable, although they need a hefty $47 million in backing to qualify for an IPO.
Still, even Silicon Valley wasn't built in a day. Wong gives Singapore another decade before it's a serious contender on the global high-tech scene. In the meantime, he'll continue to board Singapore Airlines Flight 1, eastbound to San Francisco, to go home.
Andrea Hamilton is a former correspondent for Asiaweek.