Jack Ma Ends 20-Year Reign Over Alibaba Wealth Creation Empire


Stepping down as chairman: Jack Ma waving while standing for a photograph with Alibaba CEO Jonathan Lu (left) and co-founder and vice-chairman Joseph ‘Joe’ Tsai in front of the New York Stock Exchange. Ma is giving up the reins of Alibaba Group Holding Ltd after presiding over one of the most spectacular creations of wealth the world has ever seen. — Bloomberg

Alibaba co-founder Jack Ma retires as CEO on 55th birthday

As Alibaba founder Jack Ma retires, a look at how he built the $460 bn ecommerce empire in China


 

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Steep learning curve


What is meant by “steep learning curve”?

Unfazed, this mass comm graduate overcame all kinds of challenges to make it in business.

SAMANTHA Mah did well on her first business venture but suffered a loss on her second. However, failure did not deter her and her two partners from moving on. They gave it another go until they could see the fruits of their labour.

Mah worked as a company administrator and voice talent for radio commercials before she decided to venture into business.— aNis aBdullah/The star

Mah’s first business received an investment of RM10,000 from her sister, Natasha, 37. She and two investor-partners started an online boutique targeted at young women. After one-and-a-half years, business picked up and was quite good.

Mah, 30, is the youngest in her family. She has two elder sisters and a brother.

Mah, Natasha and a friend Jason Leong, 31, started their trading company on March 8, 2011. Just four months later, it incurred a big loss, prompting them to change the products they were selling – from peanuts and sesame seeds to edible organic products.

A mass communication graduate from Universiti Tunku Abdul Rahman (UTAR) in Selangor, Mah had worked part-time as a company administrator and voice talent for radio commercials before she venturing into business. She is now the marketing manager/managing director of her company.

After starting Wide Tropism Trading, she passed her online boutique business to a friend.

One of the biggest challenges for Mah, at the beginning, was that neither she nor her partners had a corporate background.

“We handled matters based on our experiences. Sometimes we had to ask friends for advice.

“In the first few years, there were lots of arguments,” she said.

Mah is glad that her relationship with Natasha survived those trying times.

As part of the company’s costcutting measures, each of them had to take on more responsibilities in various departments.

“There were too many things on my plate – human resource, accounts, design and marketing – and I was suffocating. But we did not have enough (finances) to hire staff,” said Mah.

After two months, she “exploded” and cried during a meeting.

“I could not take the pressure and workload anymore,” she said.

Eventually, they could afford to hire new staff.

“Only then did things start to fall into place,” she said.


Cheated by a supplier

Initially, they were importing foods such as peanuts and sesame seeds, and distributing them to local suppliers. Unfortunately, they suffered a huge loss in the first year itself due to unscrupulous parties.

Due to limited cash flow, they could only import one container of stock at a time. Each time, they flew over to the exporting country, India, to check on the quality of the stock and witness the peanuts being loaded into the containers. The first two shipments went through successfully.

However, the third shipment, supposedly of Grade A peanuts, was discovered to contain Grade C stock instead, when it arrived.

She said: “No one in the market would accept the stock. We sought help from the local distributor to sell off the peanuts at a lower price but even then, no one wanted them. After trying for two months, we had to sell off the peanuts to a peanut butter factory at below cost. As a result, we ran into losses amounting to RM40,000.”

The supplier denied it was his fault and instead blamed others. They then contacted the High Commission of India, in Kuala Lumpur, for help but to no avail.

“We wondered how we were going to continue business. My father advised us to pick ourselves up, learn from it, and be more careful. Everyone was very supportive and encouraged us to continue. They believed we could do better,” she said.

Mah then sought help from her uncle, an experienced fruit trader and grocer. He advised her to run a business that’s less risky, such as repackaging and distributing organic products.

She and her business partners promptly took his advice.

In July 2011, her company had its first customer, a newly opened supermarket in Petaling Jaya. In two months, Mah’s team had designed the logo and sourced for products and packaging. And so, their label Love Earth was born.

 Overcoming obstacles

Every day, Mah and her partners packed their products until midnight, and delivered them, working on weekends to selfpromote their products as well.

Said Mah: “Each time a new supermarket called, we’d celeto brate!”

Gradually, it was time start their expansion plan but they were hampered by limited cash flow.

They knew they had to spend more to create brand awareness. That’s when they started their online webstore.

“None of us had any knowledge about marketing. So I attended marketing and e-commerce talks to learn and see what we could do,” she said.

Mah recalled: “The first three years of business were really tough. My salary was only RM1,000 monthly (to cut costs).”

But their efforts paid off. After five years of sheer hard work, they could buy two units of four-storey shophouses.

The company started with 50 products and now has 180.

Currently, it is distributing these products to over 500 outlets throughout Malaysia.


New priorities

Mah, who got married two years ago, plans to expand her family this year. Her husband, C.V. Loh, 32, distributes bio-degradable plates, lunch boxes and bowls as well as health supplements.

She said: “I hope to have financial freedom, and more time for my family. If possible, I would like to be a part-time businesswoman and full-time housewife one day.”

She plans to raise her children herself and not send them to a nanny. She also hopes to travel more in the future. Presently, she travels at least thrice a year. Seeing other countries and cultures opens up one’s mind, she said.

Although she is a career woman, Mah believes in putting family first.

“Women play a role in bringing up the family. If a child is not well taught, he might be a nuisance to society in the future. But if he has a good upbringing, he can be the sun that shines and brings benefits to all. Also, a woman is the pillar that upholds the family,” she said.

Mah explained that even though she studied mass communication and broadcasting, it was during her internship that she realised that she wanted to go on a different career path than she had originally planned.

After her graduation, she thought of going into volunteer work. But her uncle advised against it. He told her to be successful so that she could help herself and others in future.

By Majorie Chiew The Star
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China leads the way as world’s billionaires get even richer


The United States created 53 new billionaires in 2017, down from 87 five years ago
China produced around
two new billionaires a week last year as the fortunes of the world’s
ultra-rich soared by a record amount, a report said Friday.Read more at: https://phys.org/news/2018-10-china-world-billionaires-richer.html#jCp
China produced two new billionaires a week last year as the fortunes of the world’s ultra-rich soared by a record amount – AFP

China produced around two new billionaires a week last year as the fortunes of the world’s ultra-rich soared by a record amount, Swiss banking giant UBS and auditors PwC said.

Billionaires’ wealth enjoyed its “greatest-ever” increase in 2017, rising 19 percent to $8.9 trillion ($7.8 billion euros) shared among 2,158 individuals, said the report by Swiss banking giant UBS and auditors PwC.

But Chinese billionaires expanded their wealth at nearly double that pace, growing by 39 percent to $1.12 trillion.

“Over the last decade, Chinese billionaires have created some of the world’s largest and most successful companies, raised living standards,” said Josef Stadler, head of Ultra High Net Worth at UBS Global Wealth Management.

“But this is just the beginning. China’s vast population, technology innovation and productivity growth combined with government support, are providing unprecedented opportunities for individuals not only to build businesses but also to change people’s lives for the better.”

The report said China minted two new billionaires a week in 2017, among more than three a week created in Asia.

In the Americas region, the wealth of billionaires increased at a slower rate of 12 percent, to $3.6 trillion, with the United States creating 53 new billionaires in 2017 compared to 87 five years ago.

Currency appreciation saw European billionaires’ wealth grow 19 percent although the number of billionaires rose by just 4.0 percent to 414.

Wealth transition from just five families accounted for 30 percent of the continent’s wealth expansion, the study said.

It warned of lower economic growth in the United States and China if the trade war between the two countries escalates.

“US and Asia ex-Japan equities could fall by 20 percent from their mid-summer 2018 levels.”

Asia challenging US dominance

For China’s young billionaires “the country’s fundamentals of a huge population and rising technology will continue to offer fertile conditions for entrepreneurs to grow their businesses,” the study said.

It there were only 16 Chinese billionaires as recently as 2006.

“Today, only 30 years after the country’s government first allowed private enterprise, they number 373 – nearly one in five of the global total.”

It said 97 percent of them are self-made, many of them in sectors such as technology and retail.

Billionaires from Asia, especially in the Chinese city of Shenzhen, are now challenging the traditional dominance of Americans as technology entrepreneurs.

“In 2017, they equalled America’s level of venture capital funding for start-ups, registered four times as many Artificial-Intelligence-related patents and three times as many blockchain and crypto-related patents as their US counterparts.”

Ravi Raju, head of Asia Pacific Ultra High Net Worth at UBS Global Wealth Management, said Asia’s billionaires “are young and relentless. They are constantly transforming their companies, developing new business models and shifting rapidly into new sectors.”

The report said that globally, self-made billionaires have driven 80 percent of the 40 main breakthrough innovations over the last 40 years.
UP AND OUT OF POVERTY – Xi Jinping https://youtu.be/SYWz2bwCUEE

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© 2018 AFP /Phys.org

Asia’s billionaires see fastest wealth growth: report 
September 17, 2014 

 

 Asia’s billionaires see fastest wealth growth: report

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Read more at: https://phys.org/news/2018-10-china-world-billionaires-richer.html#jCp

Asia’s billionaires see fastest wealth growth: report



September 17, 2014

Asia’s billionaires led by Chinese tycoons enjoyed the
fastest increase in their wealth this year compared to their peers in
the rest of the world, a report said Wednesday.

Read more at: https://phys.org/news/2018-10-china-world-billionaires-richer.html#jCp

 

Unknown Chinese startup creates the world’s most valuable Bytedance


Independent moves: Bytedance has become among the most successful major Chinese tech companies in creating an
international base without the backing of giants Alibaba and Tencent. — Reuters

 

Building a vision: Over five years, Zhang has grown the app into one of the most popular news services anywhere, with 120 million daily users. — Bloomberg

Said to be valued at over $75 billion in new round of funding.

Bloomberg reports that when  Zhang Yiming first shopped the idea of a news aggregation app powered
by artificial intelligence six years ago, investors including Sequoia Capital were skeptical
.

Back then, the question was how a 29-year-old locally trained software engineer could outsmart the numerous news portals operated by the likes of social media behemoth Tencent Holdings. and extract profit
where even Google had failed.

Zhang, now 35, proved them wrong. Today his company, Bytedance Ltd., is on its way to a more than $75 billion valuation — a price tag that surpasses Uber Technologies. to top the world, according to CB Insights.
The latest in a long line of investors who’ve come around is Softbank Group., which is said to be planning to invest about $1.5 billion.  Bytedance now counts KKR & Co., General Atlantic and even Sequoia as
backers. Much of its lofty valuation stems from the creation of an internet experience that’s a cross between Google and Facebook.

35-Year-Old Unknown Creates the World’s Most Valuable Startup

 

News aggregation app evolves into a multi-faceted media goliath

 

WHEN Zhang Yiming first shopped the idea of a news aggregation app powered by artificial intelligence six years ago, investors including Sequoia Capital were sceptical.

Back then, the question was how a 29-year-old locally trained software engineer could outsmart the numerous news portals operated by the likes of social media behemoth Tencent Holdings Ltd and extract profit where even Google had failed.

Zhang, now 35, proved them wrong.

Today his company, Bytedance Ltd, is on its way to a more than US$75bil valuation – a price tag that surpasses Uber Technologies Inc to top the world, according to CB Insights.

The latest in a long line of investors who have come around is Softbank Group Corp, which is said to be planning to invest about US$1.5bil. Bytedance now counts KKR & Co, General Atlantic and even Sequoia as backers.

Much of its lofty valuation stems from the creation of an internet experience that’s a cross between Google and Facebook.

“The most important thing is that we are not a news business. We are more like a search business or a social media platform,” Zhang said in a 2017 interview, adding that he employs no editors or reporters.

“We are doing very innovative work. We are not a copycat of a US company, both in product and technology.”

What’s remarkable is Zhang was able to do it all without taking money from the twin suns of China’s internet: Alibaba Group Holding Ltd and Tencent.

It’s the first startup to emerge from the dwindling cohort of mobile players that hasn’t sought protection or funds from either of the two. In fact, it has often locked horns with them, in court and elsewhere. And it’s arguably more successful at engaging youthful audiences abroad.

The story of how Bytedance became a goliath begins with news site Jinri Toutiao but is tied more closely to a series of smart acquisitions and strategic expansions that propelled the company into mobile video and even beyond China. By nurturing a raft of successful apps, it has gathered a force of hundreds of millions of users and now poses a threat to China’s largest Internet operators.

The company has evolved into a multi-faceted empire spanning video service Tik Tok – known as Douyin locally – and a plethora of platforms for everything from jokes to celebrity gossip.

But as with Facebook at the same stage of its life, Bytedance now faces questions over when or even how it will start making a profit.

“The predominant issue in China’s internet is that the growth in users and the time each user spends online has slowed dramatically.

“It is becoming a zero-sum game, and costs for acquiring users and winning their time are increasing,” said Jerry Liu, an analyst with UBS.

“What Bytedance has created is a group of apps that are very good at attracting users and retaining their time, in part, leveraging the traffic from Jinri Toutiao.”

Despite its seeming isolation, it’s become the most successful major Chinese tech company in creating an international base, venturing via apps like Tik Tok into the US, South-East Asia and Japan.

Even Tencent’s WeChat had to pump the brakes on its own overseas initiative four years ago.

What Zhang perceived in 2012 was that Chinese mobile users struggled to find information they cared about on many apps.

That’s partly because of the country’s draconian screening of information. Zhang thought he could do better than incumbents such as Baidu, which enjoyed a near-monopoly on search.

The latter conflated advertising with search results, a botch that would later haunt the company via a series of medical scandals.

There was little Toutiao could do about censorship – in fact, the company’s been repeatedly excoriated by authorities for failing to filter content and been forced to clean up its services with alarming regularity.

But Zhang held fast to his early vision of delivering content that mattered to users through AI. The closest American equivalent was Facebook’s news feed.

After falling flat with the bulk of China’s venture capital stalwarts, Zhang eventually secured investment from Susquehanna International Group.

It began offering the news app in August 2012. The platform studied what users read and searched for, then referred information and articles based on those habits. The more people used it, the better the experience, and the longer people stayed.

By mid-2014, daily active users had climbed to more than 13 million.

Sequoia finally came to the table, leading a funding round of US$100mil.

“We push information, not by queries, by news recommendations,” Zhang said in the interview last year.

But it was video that really propelled Bytedance into the big leagues.

Streaming services have always been popular in China. Even during the desktop era, companies like YY Inc championed a model where people sang and danced in virtual showrooms to win online gifts from fans. Later, outfits like Kuaishou fuelled that penchant for zany showmanship.

Bytedance saw an opportunity, but made its videos much shorter: 15 seconds, to be precise.

Around September 2016, it quietly launched Douyin. The app let users shoot and edit footage, add filters and share them across platforms like the Twitter-like Weibo or WeChat.

That format appealed to shorter millennial attention spans and became an instant hit, so much so that WeChat later blocked direct access to the app.

A year after, Bytedance acquired Musical.ly for US$800mil. It saw synergy between the buzzy teen US social video app created by Chinese co-founders and Tik Tok, and is now in the process of combining them. Tik Tok and Douyin had a combined 500 million users as of July.

The challenge now is in translating buzz and viewership into dollars. The company is expanding its ad sales operations, particularly for Toutiao.

Several media buying agencies said its massive reach and the attention it draws is a natural lure for marketers. Many said Bytedance is even pulling spending away from Tencent.

Bytedance, which previously cut a deal with Cheetah Mobile to sell ad space, has brought most of its ad sales in-house, said Kenneth Tan, the chief digital officer for Mindshare China, an agency.

“From a pricing perspective, they are expensive for what they are. They definitely charge a premium,” Tan said. “But that has not been an inhibitor for the large brands.”

There’s a big caveat, however. Brands remain cautious about Bytedance’s regulatory issues, particularly given Beijing’s historic unpredictability around censorship.

This year, it had to shut down a popular joke-sharing app in April just as it appeared to take off. It also suspended Douyin and its bread-and-butter Toutiao around the same time.

That’s “a potential risk to brand collaboration,” said Sherry Pan, general manager for China at the agency Magna Global. — Bloomberg

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Chinese are the unsung heroes of South East Asia: Robert Kuok Memoirs


They are the most amazing economic ants on Earth, ‘Sugar King’ writes in memoir

Good Chinese business management is second to none; the very best of Chinese management is without compare. I haven’t seen others come near to it in my 70year career. Robert Kuok

The overseas Chinese were the unsung heroes of the region, having helped to build South East Asia to what it is today, said Malaysian tycoon Robert Kuok (pic).

He said that it was the Chinese immigrants who tackled difficult task such as planting and tapping rubber, opening up tin mines, and ran small retail shops which eventually created a new economy around them.

“It was the Chinese who helped build up Southeast Asia. The Indians also played a big role, but the Chinese were the dominant force in helping to build the economy.

“They came very hungry and eager as immigrants, often barefooted and wearing only singlets and trousers. They would do any work available, as an honest income meant they could have food and shelter.

“I will concede that if they are totally penniless, they will do almost anything to get their first seed capital. But once they have some capital, they try very hard to rise above their past and advance their reputations as totally moral, ethical businessmen,” Kuok said based on excerpts of his memoir reported in the South China Morning Post .

“Robert Kuok, A Memoir’ is set to be released in Malaysia on Dec 1.

Kuok said the Chinese immigrants were willing to work harder than anyone else and were willing to “eat bitterness”, hence, were the most amazing economic ants on earth.

In the extracted memoir published by the South China Morning Post, Kuok, pointed out that if there were any businesses to be done on earth, one can be sure that a Chinese will be there.

“They will know whom to see, what to order, how best to save, how to make money. They don’t need expensive equipment or the trappings of office; they just deliver.

“I can tell you that Chinese businessmen compare notes every waking moment of their lives. There are no true weekends or holidays for them. That’s how they work. Every moment, they are listening, and they have skilfully developed in their own minds – each and every one of them – mental sieves to filter out rubbish and let through valuable information.

“Good Chinese business management is second to none; the very best of Chinese management is without compare. I haven’t seen others come near to it in my 70-year career,” he said.

“They flourish without the national, political and financial sponsorship or backing of their host countries. In Southeast Asia, the Chinese are often maltreated and looked down upon. Whether you go to Malaysia, Sumatra or Java, the locals call you Cina – pronounced Chee-na – in a derogatory way,” he said.

He added that the Chinese had no “fairy godmothers” financial backers.

“Yet, despite facing these odds, the overseas Chinese, through hard work, endeavour and business shrewdness, are able to produce profits of a type that no other ethnic group operating in the same environment could produce,” he said.

Kuok ultimately attributed the Chinese survivability in Southeast Asia to its cultural strength.

“They knew what was right and what was wrong. Even the most uneducated Chinese, through family education, upbringing and social environment, understands the ingredients and consequences of behaviour such as refinement, humility, understatement, coarseness, bragging and arrogance,” he said.

 

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Too good to be true? Think twice


 

HAVE you ever grabbed an offer without any hesitation, simply because the price is too cheap to resist?

Many of us have this experience especially during sales or promotional campaigns. We tend to spend more at the end or buy things which we are uncertain of their quality when the deal seems too good to say no.

It may be harmless if the amount involved is insignificant. However, when we apply the same approach to big ticket items, it can cause vast implications.

Recently, I heard a case which reinforces this belief.

A friend shared that a property project which was selling for RM300,000 a few years ago is now stuck. Although the whole project was sold out, the developer has problem delivering the units on time.

The developer is calling all purchasers to renegotiate the liquidated and ascertained damages (LAD), a compensation for late delivery.

One of the homeowners said he is owed RM50,000 of LAD, which means the project is 1½ years late. When we chatted, we found that he purchased the unit solely due to its cheap pricing without doing much research in the first place.

The incident is a real-life example of paying too low for an item which can leave us as losers, especially when it involves huge sum of investment, such as property.

To many, buying a house maybe a once-in-a-lifetime experience, a decision made can make or break the happiness of a family.

A good decision ensures a roof over the head and a great living environment, while an imprudent move may incur long-term financial woes if the house is left uncompleted.

Nowadays, it is common to see people do research when they plan to buy a phone, household item, or other smaller ticket items.

Looking at the amount involved and implication of buying a house, we should apply the same discretion if not more.

It is always important for house buyers to study the background of a developer and project, consult experienced homeowners regarding the good and bad of a project before committing.

I have seen many people buy a house merely based on price consideration.

In fact, there are more to be deliberated when we commit for a roof over our heads. The location, project type, reputation of a developer, the workmanship, the future maintenance of the property etc, are all important factors for a good decision as they would affect the future value of a project.

Beware when a discount or a rebate sounds too good to be true, it may be just too good to be true and never materialised. If the collection or revenue of a housing project is not sufficient to fund the building cost, the developer may not be able to complete the project or deliver the house as per promised terms. At the end of the day, the “price” paid by homeowners would be far more expensive.

In general, the same principle applies elsewhere. It is a known fact that when we pay a premium for a quality product from a reliable producer, we have a peace of mind that the product could last longer and end up saving us money. Some lucky ones will end up gaining much more.

For instance, when we purchase a car, we should consider its resale value as some cars hold up well, while others collapse after a short period. Other determining factors include the specifications of the car, the after sales service, and the availability of spare parts.

Quality products always come with a higher price tag due to the research, effort, materials and services involved.

In addition to buying a house or big ticket items, other incidents that can tantamount to losing huge sums are like money games, get-rich-quick scheme, or the purchase of stolen cars or houses with caveats.

When an offer or a rebate sounds dodgy, the “good deal” can be a scam.

Years of experience tells me that when what is too good to be true, we should think twice. I always remind myself with a quote from John Ruskin (1819-1900) who was an art critic, an artist, an architect and a philosopher. “It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money – that’s all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do.

“The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”

Food for thought by Alan Tong

Datuk Alan Tong has over 50 years of experience in property development. He was the world president of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

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Goodbye Motorola! How Chicago’s greatest tech company fell to earth?


Under the Galvin family, Motorola had soaring achievements. This was the
company, remember, that invented the cellphone. Those days are over.
What went wrong?  
Click below and Scroll or arrow down to keep reading.

Malaysian start-up CO3 plans to set up Google-like offices in the region


 

KUALA LUMPUR: Taking a cue from the trendy, cool office spaces of Google and the like, a Malaysian start-up aspires to offer a one-of-its-kind co-working space in the region.

Dubbed CO3 Social Office, the venture was launched yesterday and will roll out by June.

Co-founder and CEO Yong Chen Hui said CO3 stood for connectivity, collaboration and community that offered a platform for people from different establishments to work together.

“Cool workplaces like Google make people envy,” he said in his presentation during a media conference here yesterday.

“Such places will inspire people to give their best to the corporation everyday,” Yong said.

The first CO3 Social Office, with a space of 21,000 sq ft for 300 people, will be housed at the shoplots next to IOI Mall in Puchong.

The second, covering 40,000 sq ft for 500 people, will be located at Jalan University in Petaling Jaya, next to Sin Chew Media Corporation Bhd, which is one of CO3’s eight founders.

Three more are planned. These will be situated at the Kuala Lumpur city centre, Sentral and Damansara.

The ambitious expansion plan is to include 40 locations in the Asean region. The spaces will be equipped with meeting rooms, private booths, sleeping pods, mini library, fast wi-fi, etc.

Yong said the company’s target audience was the 90s – “the future” – who value freedom, cool and charming trends, etc.

CO3 aims to respond to the flexibility and fluidity of today’s work environments by transforming offices into hip communal living spaces.

CO3 will also strive to provide entrepreneurs, SMEs and non-pro­fit organisations a unique co-office environment to help grow their businesses.

“We hope to be the next US$2bil ‘unicorn’ by 2022,” Yong said during the presentation.

A “unicorn” is a company with a billion-dollar valuation. The mythical animal is used to emphasis how rare it is to reach that status.

Bruneian artiste Goh Kiat Chun, better known as Wu Zun, is one of the eight founders of CO3 Social Office.

Source: The Star by tho xin yi

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Rich Gen-Y kids making their own success


SINGAPORE: One of Rachel Lau’s strongest childhood memories is the smell of newspaper. Her father, driving her to school each day in Kuala Lumpur, would make his sleepy daughter open the paper, go through stock quotes and do mental math.

“He would be, like, How did KLK do today? OK, if it’s up four sen and I’ve got 89,000 shares, how much did I make?” Lau recalled. The daily ritual continued through her teenage years. Her father Lau Boon Ann built his fortune in real estate and by investing in companies like Top Glove Corp Bhd, which became the world’s biggest rubber-glove maker.

Some days, he would stand in front of an empty lot with his young daughter and challenge her to imagine a building there rather than watching the chickens running around.

Lau, now 31, is one of the three millennial co-founders of RHL Ventures, along with Raja Hamzah Abidin, 29, son of prominent Malaysian politician and businessman Datuk Seri Utama Raja Nong Chik Raja Zainal Abidin and Lionel Leong, also 29, the son of property tycoon Tan Sri Leong Hoy Kum.

They set up RHL using the wealth of their families with a plan to attract outside capital and build the firm into South-East Asia’s leading independent investment group.

“We look at South-East Asia and there is no brand that stands out – there is no KKR, there is no Fidelity,” Lau said. “Eventually we want to be a fund house with multiple products. Venture capital is going to be our first step.”

RHL has backed two startups since its debut last year. One is Singapore-based Perx, which has morphed from a retail rewards app to provide corporate clients with data and analysis on consumer behaviour. Lau is a member of Perx’s board, whose chairman is Facebook Inc co-founder Eduardo Saverin.

In January, the firm invested an undisclosed amount in Sidestep, a Los Angeles-based startup that’s also backed by pop-music artists Beyonce and Adele. Sidestep is an app that allows fans to buy concert memorabilia online and either have it shipped to their home or collect it at the show without having to wait in line.

“RHL guys are really smart investors who are taking their family offices to a new play,” said Trevor Thomas who co-founded Cross Culture Ventures – a backer of Sidestep, together with former Lady Gaga manager Troy Carter. “What attracted the founders of Sidestep to RHL was their deep network in South-East Asia.”

A lot of startup founders in the United States want to access the Asian market, said Thomas, but they often overlook the huge South-East Asian markets and only focus on China. “Rachel and the team did a great job of explaining the value of that vision and providing really great access to early-stage US companies,” he said.

In South-East Asia, RHL has positioned itself between early-stage venture capitalists and large institutional investors such as Temasek Holdings Pte. Hamzah said they want to fill a gap in the region for the subsequent rounds of funding – series B, C and D. “We want to play in that space because you get to cherry pick,” he said.

RHL’s strategy is to take a chunk of equity and a board seat in a startup that has earned its stripes operationally for at least a year, and see the company through to an initial public offering.

Summer camp

RHL’s partners represent a new generation of wealthy Asians who are breaking away from the traditional family business to make their own mark. They include billionaire palm-oil tycoon Kuok Khoon Hong’s son Kuok Meng Ru, whose BandLab Technologies is building a music business.

RHL’s story begins in 2003 at a summer camp in Melbourne. During a month of activities such as horse riding and playing the stock market, Lau struck up a friendship with Hamzah, unaware that their parents knew each other well.

Their paths crossed again in London, Sydney, New York and Hong Kong as they went to college and forged careers in finance – Lau at NN Investment Partners and Heitman Investment Management, where she currently helps manage a US$4bil equity fund; and Hamzah at Goldman Sachs Asset Management and Guoco Management Co. Together with their mutual childhood friend Leong, the trio would joke about all returning to Malaysia one day to start a business together.

That day came in 2015 when Hamzah called up Lau in Hong Kong and said: “Yo! I’ve moved back. When are you coming back? You haven’t lied to me for 15 years, have you?”

They decided their common trait was investing.

Hamzah shares Lau’s passion for spotting mispriced assets by analysing valuations. Lau says she trawls through 100-page prospectuses for fun and values strong free cash flow – the cash a company generates from its operations after capital expenditures. Leong helped structure debt products at Hong Leong Investment Bank before joining his family’s real-estate business to learn about allocating capital to strategic projects.

In February 2016, they started RHL Ventures – an acronym for Rachel, Hamzah, Lionel – with their own money. When their families found out about the plan, they were eager to jump in, said Lau. Now they aim to raise US$100mil more from outside investors.

The partners have roped in their family and hedge-fund experts as advisers. “We recognise that we are young and still learning,” Lau said. “There is no point pretending otherwise.”

Leong’s father runs Mah Sing Group, Malaysia’s largest non-government-linked property developer. Hamzah’s father, chairman of mechanical and electrical business Rasma Corp, is a former Federal Territories and Urban Wellbeing Minister. Top Glove chairman Tan Sri Lim Wee Chai is also an adviser, in place of Lau’s father, who died in 2008.

The other two advisers are Marlon Sanchez, Deutsche Bank’s head of global prime finance distribution in Asia-Pacific, and Francesco Barrai, senior vice-president at DE Shaw, a hedge fund with more than US$40bil in investment capital.

RHL added a fourth partner last month, John Ng Pangilinan, a grandson of billionaire property tycoon Ng Teng Fong, who built Far East Organisation Pte and Sino Group.

Ng, 37, has founded some 10 ventures, including Makan Bus, a service that allows tourists to explore off-the-beaten-track eateries in Singapore.

As well as their family fortunes, the four partners bring experience of upbringings in dynasties that valued hard work, tradition and dedication.

Ng recalls his grandfather, Singapore’s richest man when he died in 2010, would always visit a property he was interested in buying with his wife.

After driving around the area, they would sit on a bench and observe it from a distance. Then they would return to the same spot after dark.

“He said to us, ‘What you see during the day can look very different at night,’” Ng said.

Hamzah, whose great-grandfather Mustapha Albakri was the first chairman of Malaysia’s Election Commission, remembers his father’s lessons in frugality – one time in London he refused to buy a £2 (US$2.50) umbrella when it started raining as they had plenty of umbrellas at home.

Leong, scion of Mah Sing Group, grew up listening to tales of how his family business overcame tough times by consolidating and reinventing itself from its roots as a plastic trader. “It made me realise that we have to be focused,” he said.

“So with every deal we do, we have to put in that same energy and tenacity.”

Lau was a competitive gymnast as a child but quit the sport when she failed to win gold at a championship event.

“It’s one thing I regret. In hindsight, I don’t think I should have given up,” said Lau. “The ultimate champion is the person who doesn’t give up.”

One old habit however remains. When Lau picks up a newspaper, she goes straight to the business section. “It’s still the only thing I read,” she said. – Bloomberg/The Star by Yoolim Yee

Related stories:

Fostering innovation: Treasury secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah (centre) witnessing the ceremony for the establishment of the Islamic venture capital fund between Jamaludin (2nd from left) and Amir. Looking on are Mavcap chairman Abdul Rahim Hamid (left) and Elixir Capital adviser Tan Sri Datuk Dr Abdul Samad Alias.

Mavcap aims to set up RM2bil investment funds

Venture capitalists invest US$56b in start-ups
Chua: ‘The Government recognises the important role of the VC industry as a source of financing to emerging high-growth companiesMalaysian venture capital attracts RM7.2bil in 2015
Malaysia Venture and Gobi to focus on S-E Asia with new fund
Signs of bubble in mobile Internet start-ups



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Promoting women entrepreneurs; mind your finances


Do we need specific initiatives to help female entrepreneurs? Some say no, because men and women face similar obstacles in business. However, there can be no denying that women face challenges not experienced by their male counterparts.

LAST May, the SME Association of Malaysia organised a talk on women entrepreneurship at its regular SME Club get-together. We were worried that the topic would not be interesting, but to our surprise, the event was well received.

About a hundred people participated in the talk.

When we told the SMEs that we were going to have a talk on women entrepreneurship, some of them asked: Why talk about women entrepreneurship? Does it matter? Why bother?

After all, business is a men’s world. The place for women is at home.

Others said there was no need to differentiate women entrepreneurs from entrepreneurs in general, as many of the barriers faced by female-owned SMEs were similar to those faced by male-owned SMEs.

To this, I would say: Yes and no.

While male and female entrepreneurs may face similar constraints in general, women face specific barriers and challenges not experienced by their counterparts.

While women make up about 50% of Malaysia’s population, less than 20% of the SMEs are owned by women. Even though the number for women entrepreneurs is small, it’s nonetheless encouraging as it shows that women no longer buy the stereotype of business being a male domain.

There are several key reasons for women to get into business. Running your own business provides flexibility in managing career and domestic responsibilities.

Also, it gives some degree of personal freedom to women who are dissatisfied with “fixed” employment. Job flexibility, like work hours, office location, environment, and the people they work with, is appealing to many women.

Other reasons for women to start a business include income security and career satisfaction. Some women become entrepreneurs due to some personal circumstances, like being laid off, divorce, or the retirement of their spouse. They start a business to improve or maintain their social or economic status.

Some women who do not have any previous work skills or experience start a business in order to prove that they can be productive and useful.

The majority of women-owned businesses are smaller outifts than those owned by men, and they are mostly concentrated in the service sector (about 90%). Many of these businesses are likely to be unregistered micro-enterprises operating in the home or on temporary premises, with few employees and limited capital for expansion.

Access to financing is one of the biggest challenges. They are less aware of the options relating to loan and grant opportunities. In addition, women usually lack the collateral required compared to men, stemming in part from restrictions on asset ownership.

Women entrepreneurs are also less likely than their male counterparts to have a history of interaction with formal financial systems, lowering their credit-worthiness and potentially raising interest rates on loans assumed.

They also encounter obstacles in accessing opportunities to acquire knowledge and skills that underpin successful entrepreneurship. This may be due to impediments in access to education, training and job experience. These are usually compounded by the demands of domestic responsibilities.

Time constraints further limit women entrepreneurs’ formal networking, which, in turn reduce access to skill and capacity-development opportunities. Formal networks, such as business associations, provide a wealth of information on business opportunities, access to government officials, grants and support programmes, as well as credit credentials and access to loan packages, to name a few.

Good networks provide good access to information and resources. First-hand information allows entrepreneurs to move one step ahead and grab the opportunities. A good pool of resources would help entrepreneurs to survive in bad times and to expand more effectively.

The Government needs to take a proactive role in promoting women entrepreneurs. We need to put in place gender-responsive policies and capacity-building initiatives to address the structural, institutional and socio-cultural inequalities.

It would perhaps be best to start by enhancing their access to finance, which is essential in building a good business foundation.

By Datuk Michael Kang who is the national president of the SME Association of Malaysia.

Mind your finances

Up to 36 of business failures are caused by inadequate financial management, according to a report by the ACCA. —123rf.com

IN GENERAL, more than 50% of startups fail within five years, and up to 36% of business failures are caused by inadequate financial management, according to a report by the Association of Chartered Certified Accountants (ACCA) entitled “Financial management and business success – a guide for entrepreneurs”.

The report says many entrepreneurs are not equipped to make informed and effective decisions about their financial resources.

“Having the right financial capabilities remains vital throughout the life of a business, whether you are just starting out, have an established business or are looking towards a final exit from a firm,” explains Rosana Mirkovic, ACCA’s head of SME policy.

“Businesses are changing and innovating more rapidly than ever, and the financial management needs of organisations must continue to evolve alongside their developments. Recognising the right financial management capabilities is therefore imperative to their success,” she explains.

Mirkovic adds that understanding financial information is vital for offsetting the risk of business failures as it reveals the early warning signs of impending problems.

The report by ACCA addresses the financial literacy skills gap, potentially serving as a guide to those starting their own businesses and are new to financial management.

Business planning plays a critical role at every stage of the business, says the report.

“Preparing a business plan pushes you to identify and assess the opportunities and threats facing your business. It helps ensure that you have an in-depth understanding of your market, the competition and the broader business environment,” it elaborates.

Effective planning takes into account long-term goals, objectives, strategy, tactics and financial review.

ACCA also advises startups to seek good financial advice and involve their accountants or individuals with financial expertise at the planning stage to take full advantage of their expertise in areas such as business planning, raising business finance, tax planning and setting up financial management systems.

Significant financial expertise may be needed to understand and evaluate the different financial options entrepreneurs may have. This includes knowing the company’s financial strength, financing cost, financial flexibility, business control, financial risk, personal finances and business strategy.

“Good financial control offers far more than just keeping track of purchases and sales. Rather than approach financial control as a chore to be left to the bookkeeper, your aim should be to see how the right capabilities can improve your business,” the report advises.

ACCA notes that business owners should gradually develop the capabilities of their in-house financial team.

“Choosing the right solution for your particular business takes careful planning. Your overall investment in financial capabilities — whether you are paying for additional employees, higher salaries for more skilled employees, training costs, use of external providers or upgraded systems — must be affordable and offer value for money,” it adds.

But financial management is at its most powerful when used to drive improvements in business.

Moreover, for many entrepreneurs, it could also lead to a successful business exit. Preparation for a successful exit typically begins far in advance of its final date.

Effective exit planning needs to start early and take into account a whole range of issues like timing, succession, management systems and tax efficiency.

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