SILKROUTE Group's founder Wong Toon King, 33, is reportedly worth more than US$40 million in personal wealth. |
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No pinching required here. His is one of the first Asian-packaged software companies to have tie-ups with big boys like IBM, Compaq and Microsoft. Old Economy money was made the touchingly tedious way. Poor Creative Technology's Mr Sim Wong Hoo, venture capitalists like to say today, struggled for more than 10 years. So much toil, so much time. But New Economy millionaires typically short-cut the slog to just two to five years. Mr Thomas Ng, managing director of Singapore venture capital firm, Technology Development Fund (TDF), says that thanks to the Internet, the traditional reach of 10 to 50 km around one's place of business has elongated to, well, infinity. And the stakes have risen -- correspondingly -- sky-high. Mr Wong, who is building up his Internet company SilkRoute to be among Singapore's top 10 companies by market capitalisation, says: ""Never in the history of mankind have we ever seen this kind of wealth creation in such a short period of time by so many young people.'' After the first round of funding, a dot.com is typically enriched by half a million to $5 million in cash. The money sure smells the same, he says wryly, but much else has changed. Yesterday, money was made through transactions, because you bought or sold something. Today, it is based on valuation, often with little real bearing on how the company is faring. Says Mr Argarwalla: "The difference between the old and new economy is that in the former, no one will ask you: "What is your revenue stream?'' In new economy, that's the first question. Profits don't matter.'' And the new net-worth measure is not how much, but how much, how soon? Says industry watcher, PropertyBuyer.com's managing director Sonny Lim: "In the past, people only got to this kind of money, obscene as it is, in their late 40s. Now people are coming to this kind of wealth in their mid 20s.'' The new creed is: If you are going to make it, you have to make your first million by age 40. After that, what's the fuss about being just another rich grey geezer? A US-based support group here bears credence to this. The Young Entrepreneurs' Organisation (YEO) is a club so exclusive that even tycoons Ted Turner and Donald Trump do not qualify as members. Not that they are not rich enough. They are just not young enough for YEO, which demands that you make your first million before hitting the big 4-0. To join, you must be below 40 and the founder or owner of a company with gross annual sales of more than US$1 million. Among its 2,500 young, restless and rich members worldwide are Michael Dell of Dell Computer, Christine Hefner of Playboy Inc, and Kei Suzuki of Softmap Corporation. The Singapore chapter now has 37 members, double that of two years ago. A quarter are dot.coms and a third are Old Economy beneficiaries brewing dot.coms on the side. Their average age is 33 and the youngest member is 24. The new president, Mr Agarwalla, himself runs Vedika Software, as well as batchmates.com, a soon-to-be-listed website which allows people to locate old friends for free. Beyond commiserating with each other on how thin the air is up there and the perils of having too much too soon, they network and form new alliances, to make more money of course. Anti-Benz brigade Their dreams are not made of old economy icons like Mercedes Benz 500 SELs or landscaped koi ponds and District 10 bungalows. According to VC Mr Ng, dot.successes seldom purchase the proverbial five Cs. In this new arena, he says the key agenda is to: No. 1, have fun; No. 2, give back to society. ""This game is not about about who drives the bigger car. It is about journeys, not arrival,'' he explains. The New Millionaire's profile also tends to be anarchist and anti-social, he reckons. They are likely to be single or married without children, unshackled by family or mortgages, hence their ability to work till dawn and travel at a moment's notice. They are rarely hung up on hierarchy, degrees or status. In their struggling years, many trapping-averse technopreneurs are likely to drive a Hyundai or Nissan (cheap and decent). If they do better, industry watchers they may upgrade to a BMW 3 series or Lexus reluctantly. Mr Joel Loo, 37, founder of CommonTown, which received $6 million in funding from Singapore Press Holdings, EDB Investment and Walden International Investment Group last November, still drives a seven-year old Lancia. ""None of us buy Mercedes-Benzes. We buy out smaller companies with healthy revenues and expand into new markets. We spend to generate more revenue,'' he says. But to be sure, when the cold hard cash comes, Silkroute's Mr Wong reckons, there will be diversification into old economy assets like property and cars. But instead of big flashy houses, he says dot.com millionaires like himself buy several residences ""to create an environment to stimulate and inspire me''. He himself has two addresses: one here, another in the US. And the most expensive thing he has splurged on so far is an apartment here for his parents. Fast cars may be on the buy-list too but they are to ""create an adrenaline surge, rather than for bragging rights''. Big is better is too -- yawn -- old economy. He explains: ""In the old economy, you used money to buy status. In the new economy, you buy discretion and try not to show it off. You don't want to be too flashy,'' he says. Mr Seah Liang Chiang, 36, managing director of Digital Scanning Corporation group which deals with barcode scanners and has a turnover of $6 million, agrees. ""The New Millionaires are generally more humble and low-key. Many would rather live a quite life diving in the Bahamas on their private yacht, reinvest in younger entrepreneurs or give back to society,'' says Mr Seah, who recently treated himself to a Saab convertible. They are loath to make any lifestyle changes, notes dot.comer Mr Lin Wills, 31. He is a YEO member and founder of soon-to-be-listed online stationery seller Wizoffice. ""People think all millionaires live a lavish life once they make a fortune. That's probably only applicable to lottery millionaires,'' he observes. Still, he confesses he does dream of owning a slinky Porsche. Easy come, easy go As the adage goes, wealth is often wasted on youth. A rich young man uses money differently from an old man. He reinvests rather than realises it. What comes easy goes easy, as his appetite for risk goes up. Venture capitalists note that technology millionaires tend to put their money back where they got it and roll the dice one more time. Examples of such technopreneurs turned angels here abound such as Interwoven's Ong Peng Tsin, United Test and Assembly Centre' s Inderjit Singh and Internet Technology Group's Koh Boon Hwee, who is the director of 46 companies, both large and small. Notes Mr Ng: ""They seldom get out, they go back in again and again, as if addicted to the lifestyle.'' As opposed to old millionaires who stashed away their winnings to line the pockets of their next generation, new economy millionaires prefer to bankroll several interesting ventures in their lifetime. It could even be to propagate a pet hobby, completely unrelated to dollars and sense. Fencing enthusiast Mr Wong, who brought home a silver medal for Singapore in the South-east Asia Games, for example, started a fencing school here in 1993 to ""pass on character-moulding attributes of the sport such as grace, honour, chivalry and fair play''. Other times, their dollars go to whim fulfilment. When ex-Lotus Development CEO Jeff Papows sold his first software company in 1993, he bought his old high school and had it renovated to his taste for fun. Another big thing for those with too much spare change is philanthropy. Partly, this assuages "Why Me?' recriminations late at night. Partly, they are at a loss to know what to do after making their piles and charity is a convenient and feel-good dumping ground. As Netscape developer-turned-billionaire Marc Andreessen, 28, once put it: ""A lot of us are going to be looking at this and saying the only thing we can do is give it away.'' He added he was not planning to leave his money to his children as it would ""de-motivate'' them. He also did not want the government to get this money by inheritance taxes. Nostalgia and cause-crusading guide their cheque-books. So far, alma maters are among the favoured for the likes of Jerry Yang, Jim Clark and Bill Gates. The latter has to date bestowed US$34 million to the University of Washington, US$15 million to Harvard and US$6 million to Stanford. Three years ago, US$60-billion-man Mr Gates announced that he will run Microsoft for just 10 years more before devoting the rest of his days to give back all his winnings to society. Grabbing eyeballs But one thing is for sure, observers say media will be on every New Millionaire's acquisition list. In the information age, everyone knows the purveyors of public opinion -- the media moguls -- are the real superstars who hog the headlines and fire the popular imagination. Be it TV, radio, magazines, or e-zines, Messrs Ted Turner, Michael Eisner, Sumner Redstone, Rupert Murdoch and Richard Li have all leapt onto the bandwagon to control as many media platforms as money can buy. According to Mr Sonny Lim: ""A big part of Internet success is building a brand. And the guy in front who grabs the most eyeball becomes a brand.'' What better way to spread your brand values than to build a network and beam BUY ME messages into people's brains on unlimted bandwidth? Most Generation X and Yers, after all, grew up glued to the TV, radio and the movies. They imbibed their values, hopes and dreams from celluloid, airways and the silver screen. It is the stuff of their ""If I had X million, I would buy a TV station/beam X-Files non-stop/fire Fann Wong'' fantasies. As such, industry watchers say you can bet your bottom dollar that the new rich will be spending theirs on media bidding wars. But perhaps the most valuable thing money will buy the New Millionaires is a plethora of choices. Unlike their parents who were stuck in boring jobs till age 65, they fulfilled their financial goals early in life and enjoy the option of retiring early to do what they really want. If that sounds too dull, they can play chairman, strategist or software developer a la Bill Gates, instead of vexing about day-to-day operations as CEO. But few would plan to retire. They figure it's the best show in town and they have got a season ticket, so why leave? Quips Mr Agarwalla: ""You expect me to live on a beach? Even on the beach, I'll probably be looking for a Internet connection.'' | |||
Tuesday, March 8, 2011
Suddenly rich
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