BUSINESSWEEK ONLINE : OCTOBER 23, 2000 ISSUE
BUSINESS WEEK E.BIZ -- PERSONALITIES ONLINE EXTRA: Q&A with adMart's Jimmy Lai "You're always your own most dangerous enemy" Blunt and ruthlessly critical of his mistakes, Jimmy Lai sipped tea in the elegant Asian simplicity of his house in Hong Kong's Kowloon district as he spoke with Asia Regional Editor Mark L. Clifford on Oct. 2. Clad in his trademark suspenders and blue jeans, Lai minced few words as he talked about his troubles with online retailing venture adMart. Outspoken and fearless, Lai is a rough-hewn outsider among Hong Kong's elite, unconcerned that he's ostracized for his attacks on China's Communist Party leadership, most notably former Prime Minster Li Peng. A self-taught intellectual and founder of Hong Kong's irreverently popular Apple Daily newspaper, Lai is a voracious reader who numbers Austrian free-market economist Friedrich von Hayek among his favorite authors -- but is known among employees and friends for his no-strings generosity. Here are edited extracts of the interview: Q: What's the current situation at adMart and your other online businesses? A: Admart has reduced its losses. We are not breaking even yet, but we are not very far away from breaking even. We are losing $2.3 million [U.S. dollars] a month compared with $7.7 million before. We expect to lose less than $1.3 million in a couple of months. Cash flow could be break-even in four months' time. Real break-even should be in eight months' time. Things are looking much much better. You have the density of population and people need the convenience. Once they try it, people are coming back. We see a lot of repeat customers. They are not just trying products -- they are buying convenience. The format of adMart is very dynamic and alive. We have lost $120 million cash out of my own pocket. The loss is not a concern now. The business didn't develop in the way I thought. There was trouble with the vendors. Once we break even, the business is viable. I don't see why we can't recoup our losses. People need the convenience. If I thought it would not make money one day, I would close it like the other businesses. Once we break even, we are not in a hurry to list it. Then the staying power [will be] infinite We're going back to the subscription model at [media Web site] atnext.com [a site that includes Next Magazine and his Chinese-language newspaper, Apple Daily]. That is the only model we see to secure revenue stream [this includes selling content to outside vendors]. The first move is very expensive. We don't want to be the first to do anything. Online portals are having a hard time spending their money [to build their own content]. Buying from us is cheaper Q: The lessons learned? A: I made the big mistake of diversifying into too many businesses. We lost focus, [such as opening some] retailing shops. We sold out of those. We closed adMart travel and some of the other online businesses we started...That was an expensive lesson to learn. This was the toughest business. I was never that stupid before. Arrogance, complacency. [In a more traditional business] I would never have diversified, I would never go into businesses on such a big scale. I would not be so sanguine about a business without a long trial-and-error [period]. That all violated my principles in business. I thought I was a smart guy. So much money was rushing into the Net. The hype about online psychologically hyped me. It set me into thinking that because the online business facilitates transparency and interaction of information, [that there was] a New Economy, a new way of doing business. [I thought] we should not be burdened by the past, let's try the new way. Actually, it was bulls--t. I had a very successful track record. That was my comeuppance. It led to complacency, to assumptions I made I should not have made and the arrogance that is attendant with success. The Net got me. Li Peng didn't get me, but the Internet craze got me. It was my own fault. You're always your own most dangerous enemy. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS EBIZ Contents for issue dated Oct. 23, 2000 The Humbling of Jimmy Lai RESUME: Jimmy Lai ONLINE EXTRA: Q&A with adMart's Jimmy Lai INTERACT E-Mail to Business Week Online

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