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Making The Most Of Asia's Meltdown


Enterprise -- Companies: ENTREPRENEURS

MAKING THE MOST OF ASIA'S MELTDOWN

How Derk Wilken is steering his Web-design firm, Beebop, through the Asian crisis

When Derk Wilken, 39, started his Web design firm, Beebop Internet Solutions, in Bangkok two years ago, he expected to ride the colossal wave of Thailand's decade-long economic boom. But a year later, many businesses were drowning--including Beebop's first client, a travel agency, which shut down in January, 1997, without paying its bill.

Wilken rejected the suggestion of his Thai friends that he hire off-duty police officers to collect. Instead, he swallowed the loss and kept the defunct agency's Web site active to showcase his work. And realizing that he couldn't depend on the local economy anymore, Wilken launched his own E-mail marketing newsletter to drum up business in cyberspace and look "beyond the horizon of Thailand, because on the Web, the whole world is your market."

Wilken's moves were well timed. The Thai economy has only gotten worse. Unemployment and suicide rates are on the rise, half-finished office towers stand idle, and the baht fetches only about half as many U.S. dollars as it did last July, when it was untethered from the greenback.

BEACH LOVER. Even so, tiny Beebop is growing slowly but surely--from a meager 200,000 baht (then worth about $8,000) in revenues in 1996 to a million baht last year (about $22,000). And if everything stays on target, Wilken projects that sales will quintuple in 1998. His local clients include the Thai health ministry, a Mercedes-Benz dealership, a cigar importer, and a real estate agency. But Wilken's international gambit is also paying off. In recent months, new business has come from Hong Kong (Philip Morris Asia), London (magazine publisher AutoAsia), Virginia (Internet company Geo Enterprises), and Australia (Access International Investment group).

In part, Wilken attributes his survival to some pretty basic business principles--honesty, reliability, and on-time delivery. He's also finding opportunity amid economic distress. Low wage rates in Bangkok and an anemic baht make his prices even more competitive outside of Thailand. Wilken claims he can set up a complex Web site for one-third of what it would cost in the U.S.

As businesses around the world confront rising wages for scarce technical workers on their home turf, they can outsource parts of their computer programming and Web design work globally--to little squirts such as Beebop, who operate in low-wage, lower-cost regions and transmit their work electronically. Now, "long-distance working relationships are becoming the norm," says Gary Ober, Philip Morris Asia Inc.'s information-technology manager, who hired Beebop last July to build and manage an image library for the company intranet. Pleased with the results, he referred Wilken to his son David Ober, director of Geo Enterprises, a Web development company in Hanover, Va. He outsourced work to Beebop, too.

Like his business, Wilken's career path has bridged East and West. A Dutch national, he spent four years as a procurement officer with the U.N. in New York, Singapore, Thailand, and the former Soviet bloc. But his fondness for beaches and a job in procurement for international aid agencies led him back to Thailand in 1995. Within a year, he quit to pursue a longtime interest in the Internet.

Wilken taught himself Web design and in January, 1996, launched Beebop out of his apartment. He liked the name's "swing"--and it was an easy English word for Thai speakers to pronounce. For startup capital, he pooled his own savings with a $10,000 loan from his brother in Germany. And to comply with laws that limited foreign ownership, Wilken found a partner: Jirabool Vittayasing, owner of Dash Creative Co., a trinket manufacturer. The two companies swapped 30% of their shares. In September, 1996, Beebop moved into Dash's offices in suburban Bangkok. Today, Beebop still shares Dash's secretary, bookkeeper, and sometimes its graphic designers.

While Dash has been invaluable locally, Wilken's newsletter--which now has about 500 subscribers--has been his key to building business around the world. It's easy and cheap to produce and has, directly or indirectly, hooked important clients. AutoAsia's publishing director, Steve Fisher, was surfing the Web one day for cheaper Web-design work than he could find in London. After stumbling onto Beebop's Web site (www. beebop.com), Fisher followed directions for subscribing to the newsletter. Impressed by Wilken's marketing expertise, he hired Beebop to build a fee-based Web database. "I wanted someone who understands marketing, and it didn't matter to me where they were," says Fisher.

While it's common for small businesses in Thailand to impress clients with fancy addresses, sleek offices, and a posh car, Wilken has always been frugal. He doesn't have a car--and takes taxis to visit clients. His office is spare. Besides Wilken, Beebop has one part-time Web developer. His first full-timer starts next month. Salary: around 15,000 baht monthly--or $330. Wilken supplements with student freelancers. He concedes his no-frills approach has cost him some local business but thinks he's better prepared to handle adversity than most Web firms there.

Web designers who had hoped to get business locally were particularly vulnerable. "We expected more corporations to use the Internet and put up Web sites each year, but with the economic crisis, they have postponed plans," says Praisith Ratanachaithong, executive director of Idea Net Co., a small Internet service provider in Bangkok. Wilken, too, has seen new local business wither but has persuaded his existing Bangkok clients to stay on board by stressing the Web's value as a low-cost marketing tool.

To continue his offshore expansion, Wilken is mostly targeting small and midsize businesses, trumpeting his ability to set up intranets and Web sites with big databases they might not be able to afford otherwise. He plans to ramp up his marketing efforts with trips to Europe and the U.S. this summer. Last July, he incorporated in Las Vegas--chosen because of its light regulation--and set up a U.S. bank account--just in case some clients prefer that he have a U.S. presence. Eventually, says Wilken, "we may absorb other companies," in Bangkok. But he's in no rush: He takes his lesson from a volatile economy. A slow, steady pace--with time out for some lazy beach days--may be just the right speed.By Aparna Mukherjee in Bangkok with Robin Schatz in New York Enterprise -- Companies: ENTREPRENEURSReturn to top


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