Thaifin.com's Uphill Battle


By Bruce Einhorn Many dot-comers stuck at struggling companies blame the irrational exuberance of the Internet bubble for convincing them to leave secure Old Economy jobs and take a chance on cyberspace. Nikhil B. Srinivasan, the founder of Thai-language personal-finance portal Thaifin.com, doesn't make such excuses. The ex-banker started the site three months ago, long after the Net bubble had popped.

The former hedge-fund manager for Morgan Stanley knew exactly what he was getting himself into with Thaifin, which now employs 24 people. Says Srinivasan: "Everyone thinks we are very brave."

UNDAUNTED INNOCENCE. Brave, yes. And, given that he and his employees are working for a dot-com at a time when almost everybody else is desperate to flee the business, perhaps a bit foolhardy, too. Srinivasan is quick to agree. Ask him how old he is and he supplies a rapid-fire response: "Thirty-three -- and stupid!" While Srinivasan is joking, some might well agree, not only for his timing, but also for the fact that he is trying to launch a tech company in Thailand. It's not, he notes, "a country friendly to tech businesses."

Srinivasan and his Thaifin cohorts are no strangers to spectacular collapses. They live in Bangkok, ground zero of the great financial crisis of the late 1990s. Four years later, the local stock and property markets are nowhere near the heady levels they attained before the baht's devaluation sparked Asia's meltdown.

Even today, now that Thailand has enjoyed a moderate recovery, relics of that era literally scar the Bangkok landscape. One of the first things a visitors sees when leaving the airport is a bunch of

half-finished towers intended to support a mass-transit project that fell victim to the downturn. On the drive into town, abandoned office buildings and derelict residential complexes are high-rise reminders of Thailand's boom and bust.

GOING IT ALONE. I first met Srinivasan back in 1996, when he was warning that Thailand was so messed up that it would take years to recover from its financial crisis. He was right -- to his own detriment. With the Thai financial sector still languishing in the post-crisis doldrums, there wasn't much of an incentive for Srinivasan, who attended Cambridge and Harvard's Kennedy School of Government, to stick with his Old Economy job.

The Indian-born banker (his wife is Thai) was managing assets at Bank of Asia, the Bangkok-based subsidiary of Dutch group ABN-Amro, but feeling frustrated. So he got the Bangkok Post, Thailand's premier English-language paper, to invest $500,000 in his startup, with a similar amount coming from individuals, and launched his personal-finance portal.

So far, he's satisfied with the results. Thaifin has signed up about 12,000 users, most of them in the demographically appealing 25- to 35-year-old age bracket, 40% of whom are women. And 45% of the users surf the bilingual site in English. That's important, he says, since it shows that Thaifin's users are well-educated enough to feel comfortable reading a foreign language, an important selling point to would-be advertisers.

SAVVY DEMOGRAPHICS. And Thaifin, Srinivasan tells people, is for serious users. Let others go for college kids with lots of time to play online games. He's aiming for focused, middle-class professionals who want the stock quotes, bank rates, career information, and other content that Thaifin spotlights. "No chat, no e-mail, no nothing," he says proudly. "Just useful stuff."

He has managed to attract some important advertisers, such as Starbucks, L'Oreal, Estee Lauder, GE Capital, and Unilever. Since its launch, Thaifin has nabbed about 15% of Tailand's online advertising market. That's the good news.

The bad news is the tiny market. There are less than 500,000 Internet users in Thailand, he points out. Moreover, the online ad market is miniscule -- less than $1 million last year. There are very few software programmers, too. Says Srinivasan: "The biggest barrier to success is the size of the market."

TARDY BANKS. With such a small pool of funds, relying on ads alone would seem to be a sure way of ensuring that Srinivasan and Co. will soon be looking for new jobs. So Thaifin is trying for other sources of revenue. For instance, the company has made deals with banks to get a commission for every customer using a Thaifin link to apply for a credit card. But most banks are so slow in following up on those applications that Srinivasan worries applicants will simply give up -- or blame Thaifin for causing the delay.

"Our biggest problem is that we're the middleman," he sighs. "We can't control the process. Some banks take five or six days just for the initial follow-up. But if they don't hurry up, then the customer will say that Thaifin is a bunch of losers." There's no shortage of failed dot-coms, and Srinivasan has his work cut out to make sure he doesn't join their ranks. Einhorn covers technology for BusinessWeek from Hong Kong. Follow his column every week, only on BW Online


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