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BUSINESSWEEK ONLINE: Business Week ebiz | |||||||||||||||||
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Building an Internet Startup -- Hong Kong-Style Real estate, not cyberspace, has always been king in the former colony. Outblaze founder Yat Siu is out to change that For Internet entrepreneur Yat Siu, running a company in Hong Kong presents some special challenges. Take the Saturday night the 25 year-old founder of Outblaze, a Hong Kong-based designer of Web portals, was meeting a venture capitalist. Just as they were starting their dinner at Zen, a tres chic restaurant in the city's swanky Pacific Place shopping complex, Siu got a call on his mobile phone. It was from the office, located a few minutes away in a grim neighborhood of narrow alleys and decaying tenements. The area is one of the few parts of Hong Kong where startups like Outblaze can find reasonable rents, but the building's electricity had gone out. Worse, building management figured that fixing it could wait til Monday. "They were like, what is the big deal?" says Siu. A blackout is a huge deal for an Internet company that must operate 24 hours a day, 7 days a week. Waiting till Monday would exhaust his backup generators and endanger his 7 servers and 70 PCs. Siu tried to stay calm in front of his prospective investor. "The last thing I wanted to say," Siu says, "was that power was out in the building." He continued his meeting, getting updates on his mobile phone every half hour as his partners scrambled to get the power running again. They did, and Siu is now looking for new offices -- while also putting the final touches on a new venture-capital package to help Outblaze grow. EXPOSED SHORTCOMINGS. Siu is managing to build a hot business in Hong Kong despite the odds. High-technology entrepreneurs have long taken a back seat to the city's property developers, bankers, and traders. That didn't bother many people when the Hong Kong economy was booming in the early 1990s. But the Asian crisis has cruelly exposed the shortcomings of the former colony. Concerned about Hong Kong's over-reliance on the real-estate sector, Chief Executive Tun Chee-hwa is pushing a series of initiatives to refashion Hong Kong as an Internet and E-commerce hub for the region.
And versatile. Siu was born in Vienna into an environment rich in music. His mother, a native of China, was an opera director who regularly toured the Continent. His father, a violinist, was from Hong Kong. Siu learned the piano, flute, and cello. He became so accomplished that he entered an elite music conservatory in the Austrian capital when he was just 10 years old. After six years, though, Siu opted out. Rather than pursuing a career as a performer, he tried to put his musical training to use in the business world. When he was just 17, he landed a job with Atari, composing music for computer games. Quickly he tired of that and found that he liked designing the software itself. He gave up music completely, much to his mother's dismay. Siu still credits his musical training for giving him a leg up in his career. "In music, you are expected to express ideas, never to follow the rules," he says. ON HIS OWN. That sort of ethos suited the entrepreneurial Siu just fine, as he spent the following years jumping from company to company, continent to continent. He left Austria for the U.S., where in 1994 he earned a bachelor of science degree at Boston University. While in Boston, he founded a company that designed 3D software and was acquired by Silicon Graphics in 1995. He then moved to his father's home city. It wasn't long before the younger Siu set out on his own again, starting Hong Kong Cybercity, an Internet community site similar to GeoCities in the U.S. But Siu soon realized that he was too late to be a force in that game. "The idea is old-hat," he says. "There is not a future for a small player." He is negotiating a sale of Freenation, as the company is now called, and expects to announce a deal with a U.S. company in April.
As Outblaze grows, Siu is betting that the company's performance will erase all doubts. He won't reveal advertising revenues, and with the Asian recession, the ad dollars are surely not coming in at a fast clip. Still, Outblaze is building a sizable user base. Since its launch in December, Outblaze has collected 70 partners, which boast a combined 600,000 users. By yearend, Siu predicts 5 million users. The company had three servers in December, a dozen in February, and will have 25 by the end of April. And while Siu is planning on moving to bigger offices in another part of Hong Kong soon, he's still not taking his chances with the electricity supply. "The servers," he points out, "are in the U.S." Some lessons Siu isn't about to forget. Einhorn covers technology in Asia for Business Week from Hong Kong _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |
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 Outblaze founder Yat Siu | ||||||||||||
