SMART Letter #36
March 25, 2000

!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*() ------------------------------------------------------------        SMART Letter #36 - March 25, 2000 Copyright 2000 by David S. Isenberg -- "one-man multi-national corporation" -- -- 1-888-isen-com ------------------------------------------------------------ !@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*() CONTENTS > Introduction: Asia Diary > 21st Century Voyage of Discovery -- Asia Dispatch #1 > Observations of an Ignoramus: Asia Dispatch #2 > If you Smile at me I will Understand -- Asia Dispatch #3 > Deliver the Atoms -- Asia Dispatch #4 > Singapore vs. Hong Kong -- Asia Dispatch #5 > Hong Kong: The Citiest City, the Center of the Asian Internet: -- Asia Dispatch #6 > Conferences on my Calendar, Copyright Notice, Administrivia ------- INTRODUCTION: ASIA DIARY I wrote the six essays below during a trip to Asia between February 18 and March 8, 2000. I stopped at Tokyo, Seoul, Singapore and Hong Kong. I was looking for the Asian version of the Communications Revolution, and I found it. It was everywhere -- in a tiny restaurant in Tokyo's fish market, on the train, in the streets and shopping centers, in the newspapers and stock markets, and increasingly in the minds of Asia's business and government leaders. This is longer than other SMART Letters -- I apologize. My favorite essay of the bunch is #3; if you only have time to read one, read that one. It stands alone nicely, too. To get right to the Asian Internet, though, skip to #4, #5 and #6. Do please let me know what you think, what your own experiences are with the non-U.S. Internet, and whether you think I got it right, missed it big-time, or what. Earlier versions of these essays were posted on the discussion boards. (Since then,there have been significant additions and a few re-writes and corrections.) is the home of, the first interactive mutual fund. I'm in the Metamarkets Think Tank, with Nolan Bushnell, Nicholas Negroponte, Peter Sprague and Reuven Brenner. The trip to Asia was partially sponsored by Metamarkets thanks to Don Luskin, MetaMarkets CEO. ------- 21ST CENTURY VOYAGE OF DISCOVERY -- ASIA DISPATCH #1 [Originally posted from Tokyo, February 19, 2000] I have embarked on a 21st century voyage of discovery to Asia. Next stop Tokyo, where I will speak at GLOCOM, the Institute for Global Communications, spend a day with a client, and meet with such communications entrepreneurs and Internet movers and shakers as my hosts have arranged. My hosts for this Japanese leg of my Asia tour include Shumpei Kumon, whose wise hand is on the helm of GLOCOM; S.J. Roh, a senior consultant for Japan's IFTECH, Institute for Future Technology; and my brother Daniel, who's been commuting between Tokyo and Tel Aviv for a decade, bridging the developed world's two most divergent cultures to bring Israeli entrepreneurial innovations to Japan's manufacturing savvy and implementation expertise. Now I'm 31,000 feet over the northernmost Canadian trackless tundra. Nothing but snow below. If our jackscrews gave out here, it'd be days before TV crews could get to the wreckage. Fortunately, we are in a brand-new Boeing 777, the first aircraft designed completely without paper drawings or physical models. (Take *that* Steve Roach!) These transcontinental aircraft are the closest thing to a time machine that humanity has; the instant I boarded, it became irrelevant that it was morning in New York. We are flying from 10 AM today to 2 PM tomorrow in about 14 hours, yet we'll have neither sunset, dark nor sunrise. And despite the fact that it was morning in New York, they served us dinner, dimmed the lights and expect us to sleep. Amazingly, about half the passengers have taken the suggestion; they are sleeping. We left Newark for Tokyo in a snowstorm some four hours ago. We climbed away from the bad weather, north over Ontario. We split James Bay down the middle and kept going north. We flew over the southern third of Hudson Bay; its long leads of water (or new ice) punctuating the snow gave me images of whales and seals coming up to breathe and polar bears waiting at the edge for a seal meal. Now we are flying parallel to the arctic shore of the Canadian mainland. There is not a town or road to be seen; but it is a beautiful day over the Inuit Riviera. I feel disconnected from the world on these long airplane trips. This adds to the time-machine-like quality. I've got stuff to do, but I can't pull in the web pages to do it. So I am stuck with the 6.3 gigabytes of my hard drive, or that small part of it that I've loaded in anticipation. I suppose there's software that'd suck down the entire CANARIE website and the entire Stokab website and the entire FCC website overnight before these epic embarkations, but even so, I'd probably need to "go" somewhere else on the web today. When are airlines going to figure out that their passengers need connectivity? (Not the three dollar a minute, bad voice quality kind, but the Internet kind.) I wish I had an RJ-11 with 56 kbits of dial-up connectivity. I'd switch airline loyalties in a minute to get it, too. Now as long as I'm ragging the airlines (love to hate 'em as much as the phone companies) let me tell you about the battery situation. There's an electricity jack for my laptop right here by my business class seat, but does it look like any kind of electrical outlet in the world? Noooooo. Does it look like the twelve-volt cigarette lighter plug that now serves as auxiliary power outlet on every car made anywhere in the world? Noooooo. Do the "can we do anything to make your flight more enjoyable" flight attendants have an adapter for one of these common formats on board? Nooooo. One nicely gave me a US number (an 800 number to make it especially hard to call from Tokyo) where I can order one to use on my next trip. So now I have turned off my printer port, turned off my modem, turned off my sound, turned my screen to its dimmest setting, and I expect that my big battery, which is about as high-tech as it can get, won't even make it to Nome. Who's gonna be the official airline of the Internet? ------- OBSERVATIONS OF AN IGNORAMUS: ASIA DISPATCH #2 [Originally posted from Tokyo, February 22, 2000] I crawled off the plane jet-lagged, punchy and half-awake. I did not know a single word of Japanese, and except for the name of my hotel, I did not know where I was going. Yet I found my way to the Tokyo express train, and I found my way through the subway to my hotel. This is a testimony to the power of the few English words on signs and in the brains of the several people who helped me. On the express to Tokyo, my assigned seat was with three teenage girls. All three had little portable phones, which completely engrossed their attention. They were either short-messaging their friends or playing some kind of networked game; The phones were super-tamagotchis. They sucked up all their attention. The girls made some phone calls too, talking excitedly into the set. Then, 2/3 of the way through the hour-long trip, all three fell asleep as if the hypnotist had clicked his fingers. In my hotel, I entered a netherworld. I needed to write a brand new talk for GLOCOM, and I needed to reset my body clock. I had three totally unstructured days to do it. I opened my computer and began to work. I slept in snatches, ate when I felt like it, and took long walks in the Ginza (the main Tokyo shopping district) and in the Tsukiji (the mother of all fish markets). As I wander Tsukiji, I know I am missing even the not-very- subtle ramifications of this culture I do not know. I deduce that what is familiar must be due to common human psychobiology. I watch a fishmonger butcher a 300-pound tuna in front of his stall with deft movements of a huge razor-sharp knife. Over the next 72 hours a talk coalesced. I call it "Five Layers of the Communications Revolution". At the same time, my sleep snatches became longer -- and even began to happen during the dark part of the day. I gave the talk about 12 hours ago at GLOCOM. It went quite well. It was translated into Japanese thought-by-thought; I used the interpretation time to formulate my next thought in simple, economic English. I have been watching closely for signs of the Japanese recession. I finally saw one person who fit the U.S. model of "homeless". He was sleeping outdoors on cardboard behind the column of a Ginza department store; his shopping cart, piled with worldly possessions, was alongside. Most of the higher-class stores are empty. The clerks in the windows look bored. The lines of taxis waiting for fares are very long; notwithstanding, a taxi-ride still costs over US$6.00 for 1.2 miles. The English-language Mainchi Daily News had two recession headlines last Sunday. The first story was, "Nation Finds Reason to Sing At Last". It was not about prosperity, it was about singing about prosperity, about an up-beat chewing-gum pop song that goes, "Japan's future is bright, the whole world is jealous." It's Japan's version of "Pennies from Heaven." The article quotes economist Akiyoshi Takumori; "[The song] is a reflection of the more optimistic mood among people about the economy." I must ask a Japanese friend whether "Mainchi" translates to a meaning more like "propaganda" or more like "happy talk". The second headline said, "Sacked men make spirited return". It was about some men from the Unemployed Workers Union (!) who "refused to let joblessness get them down". They decided to open a restaurant named "Restaurant at the Crossroad of Cheer" to give other jobless men a place to meet, eat and discuss the economic situation. If I knew some Japanese, I'd go to Ristoran Genki Kosaten's grand opening on Thursday. This happy talk on the Mainchi Daily News front-page is the most powerful evidence I have that Japan's recession is really affecting people's lives. A theme emerged from my talk at GLOCOM, mostly during the lively Q&A that followed it, that Japan must enter the communications age to climb out of its recession. This would mean real telecom competition, further break-ups of the Japanese telecom behemoths, and the introduction of a vibrant venture-funded start-up sector. <Advertisement>My brother Daniel, who was in the audience, is at the forefront of this activity. Dan's firm Triangle Technologies,, just closed a US$10M deal on one of the first Japanese start-ups. Dan has seen a decided uptick in start-up activity in recent weeks. </Advertisement> An English language newspaper editorial on Japan's increasing irritation with Echelon caught my attention. Echelon is the now-well-documented US spy network that monitors all international electronic communications (among friend, foe and U.S. citizen) everywhere. I actually self- censored my last dispatch to MetaMarkets because I did not want to trigger any unnecessary government scrutiny. Remember when I was describing my high-tech computer batteries? I took out a phrase that described them as having, "the energy density of plastic explosives" because I didn't want to trigger the Echelon keyword detector. Well, I am a U.S. citizen, and if I want to use plastic explosive as a figure of speech, I'm damn well going to do it, even if my communication is international. A U.S. citizen should be able to use words like plutonium, U-235, reactor, terrorist, bin Ladin, hijacking, sabotage, biological weapon, narcotics, money laundering, KGB, CIA, strong encryption, assassination, wiretap, smuggling, humint and sigint in international correspondence without fear of his own government, despite the fact that these NSA keywords can trigger an investigation. Such investigations are REAL good uses of our tax dollars, doncha think? And besides, I gave up plutonium smuggling for the terrorist assassination militia last week, so let them investigate me -- I'm clean! ------- IF YOU SMILE AT ME I WILL UNDERSTAND -- ASIA DISPATCH #3 [Originally posted from Tokyo, February 26, 2000] A wheelchair driver must note every sidewalk discontinuity. A diabetic alerts to each sweet taste. So does my own linguistic incapacity in Japan sharpen my power of observation. Gesture, dress, posture, expression, tone of voice, bearing, gait, social distance: all attract my attention with greater insistence. Before dawn on my second morning in Tokyo, the Tsukiji fish market is bustling. Men on bicycles balance six or eight precarious styrofoam boxes of seafood. Men with hand trucks thread through the pedestrian crowd. Cars and cranes and trucks and taxis miraculously avoid each other. In the middle of Tsukiji a traffic cop on a short pedestal, in the middle of an area much too chaotic to be called an intersection, attempts to direct traffic with hand and whistle. He is only partially successful. I notice that Tsukiji and tsunami have the same first syllable. Dozens of funny little three-wheeled flat-bed motor scooters blat about in every direction, delivering fish from stall to truck. Men drive them standing up, holding a steering wheel that is fixed to the motor, which is fixed to the single front wheel. Steering wheel, motor and wheel turn as a unit to make a corner. The morning wind is chilly. People slurp noodles at outside counters. I was hungry, but it was too cold to eat outdoors. I saw a four-stool coffee shop, and went inside. The sign said, "Coffee 250 Yen." I pointed. The old lady behind the counter put out coffee, milk, sugar. I sipped slowly. The tiny cup was as good as any Starbucks. When it was empty, I put coins on the table. She took them, rang the register, turned to me and said, "Fish . . . . . market." I smiled. "Fish market," I agreed. I found a section of Tsukiji with little working-class restaurants. Each was separated from the chilly morning by a flimsy three-section aluminum sliding door. I leaned down to peer into each; then I saw an empty stool, felt my stomach, ducked down and slid the door open. The place was tiny. There were a dozen short bar stools along a miniature counter holding eleven hungry fish workers. There were three cooks and a dish washer in the cramped kitchen in back. I worked my body onto the single empty stool, arranging my knees tight against the counter. I smiled at the closest of the two waitresses, looked up and down at the whatever it was that 22 chopsticks and 11 spoons were working on, and pointed at the bowl with the darkest liquid in it. Then I pointed at my mouth. The waitress smiled, nodded, and yelled something Japanese at the kitchen. Presently she put a bowl in front of me and said, "Pork noodle." I tucked in, holding a bundle of noodles with chopsticks and spoon, trying to slurp them noisily like the other guys. Yum! It was mega-tasty. There were three sauces, some hot sesame oil, and a couple of powders on the counter; I tried each one on a few noodles in my bowl, aware that I could be making a huge ketchup-on-lobster-like faux pas. Nobody seemed to notice. I liked the spicy sesame oil the best. When I was done, the waitress refilled my mug of hot green tea, and I sat for a moment. Then the door slid open and there were two more people than the counter could hold, so I stood up and took out a 1000 yen note (US$10), and the waitress took it and gave me change. "Domo," I said. (I think that's like saying, "Thank" in English.) "Thank you. Goodbye," she replied. I don't know why I went straight back to the little place the next morning. Tourists visit once, snap a picture, move on. Maybe my language inability made continuity more important. The entire restaurant staff recognized the strange American from yesterday. I had to wait for a couple of minutes before somebody got up. I saw a dish that was some kind of yellow chicken-mushroom slime over rice. I pointed and said, "I'd like that, please." "Large or small?" the waitress asked in English. I looked at her. "I'd better have a small," I said. The dish, served with clear tofu-seaweed soup, was another grand slam on the culinary diamond. Out of the park. I scraped up every grain of rice with my spoon. The waitress poured more green tea. "You have email address?" she asked. My head snapped up, then I recovered, smiled and pulled out a business card, presenting it Japanese side up, with a little business- style bow. "Are you going to email me?" I asked. She nodded. "Good," I said, "see you tomorrow." "Tomorrow closed," she replied. I asked why. She struggled for a word that did not come. Been there, done that, I thought. "Holiday?" I suggested. "All Tsukiji closed," she agreed. After breakfast, I went in a different direction. I found the REAL Tsukiji, the inner sanctum, the heart. The activity I had seen before now seemed a shadow-puppet Guignol, something from the wall of Plato's cave. But this, this was it. My wife finds it amusing that I always stop to look at fish. In a pond, in a supermarket, on the street in Chinatown, on a calm fall evening in a harbor, under any random dock or bridge; if there are fish, I will stop and look. I can't help it; fish are important. Now here were acres and acres of every description of fish. There were live minnows, dried minnows and huge frozen swordfish. There were black fish and red fish, goose fish and sea robins, mackerel, flounder, bass, grouper, yellowtail, albacore, bonito, salmon, shark. There were centimeter-long squid and squid that must have been two- thirds of a meter long. There were sea cucumbers, oysters and cockles, octopi and nautili, mussels and scallops, hard-shell clams, soft-shell clams, geoducks, and the clam that's called mirugai in sushi bar Japanese. There were eels and needlefish. There were ugly, malformed creatures that looked like they came from a four-mile deep. There were lobsters and red shrimp and green shrimp and tiger shrimp, frozen shrimp and live shrimp, tiny shrimp and shrimp that must've weighed a kilo. There were crabs; crusty crabs and smooth crabs, big red translucent ones, brown ones with long spider legs, and round ones that pulled their legs into a baseball-sized package. Everywhere men were cutting, culling, sorting, packing, pouring, sawing, buying and selling. French historian Braudel points out that marketplace take the same form in every culture, in every period of history. It sounds like psychobiology to me; sparrows flock, wasps make paper nests, cats hunt alone, ants build hills, fish turn into the current, and homo sapiens make a marketplace. I have seen huge thriving markets in Hong Kong, Merida, Oaxaca, San Jose (Costa Rica), a dozen U.S. flea markets, and now Tsukiji; except for the specific goods sold, they do indeed look much the same. They seem to work the same, too. Perhaps it is the highest form of human instinct. The next day I did not eat breakfast. I stayed in my hotel room and worked all morning. I made tea, and ate a bit of salami-type meat that I got in the market. I got an early lunch. No email from the waitress came. The next morning I went to the little restaurant again. I asked for something with seafood in it. She tried to tell me about a couple of alternatives, but I did not understand. I told her to order me what she liked herself. It was good -- I ate the whole thing. During breakfast, I noticed three Western-looking kids looked at me through the flimsy door. I waved them to come in, and the waitress pointed to three empty stools. They asked, "They got raw fish here?" By then I had found the sushi section of Tsukiji. I told them where it was, and they filed out. "But if you want good food, come back here," I said as they left. When the waitress had a break, I made an exaggerated frown and said, "No email." "I went to your website. I did not understand," she replied. "Very technical," I said. "I'm sorry." She smiled. I said, "Send me email, don't be afraid of bad English. I will understand." The next morning the usual 30 or 40 messages arrived. I almost did not notice the one with the subject line, "a waitress of a small Chinese restaurant." Chinese? A surprise. I thought it was a working-class style of Japanese food. The email said that waitress was named Toko. The restaurant's name was Yajima. It continued: >When I saw you at the first time, I thought you were >not an ordinary tourist. Because that kind of foreigners >never choose Chinese food. They come to Tsukiji to eat >sushi! You ate your breakfast with a lot of spice, didn't >you? You know very well!! She got that I wasn't a typical tourist! And she had seen me covertly trying out the spices. But (heh-heh) she thought I *knew*what*I*was*doing*. The email continued. She lived with her mother and father, her younger brother and sister, two cats and a dog. Hmmmm, single. I didn't want to go *there*. I wondered if she saw my wedding ring or knew what it meant, or saw my wife's picture on my website. She traveled an hour to come to work every morning. She was working hard for her future. She wanted to join a volunteer group (for what?) next year, and she was now inspired to study English harder -- for her future, the email said. Now it was my last morning at Yajima. I did not have time to respond to Toko's email before breakfast. I ate something new. It was delicious. I told Toko that I got her email and I was glad to know her better. I complemented her on her English. She looked down. "Today is my last day in Tokyo," I said. "I know," she replied. "I saw calendar on your website." When I finished, Toko poured me another cup of green tea. I took out a 1000 yen note, and she gave me change. More people came in. There were not enough stools. I stood to finish my green tea. Then I put the mug on the counter. "Goodbye," I said. "Goodbye," she said, and extended her hand for a Western- style handshake. I shook it. I waved at the other waitress, the cooks, and the dish washer. They were all looking at me. They nodded towards me, which was as much of a bow as the kitchen had room for. "I will send you email," I promised Toko. "We will keep in touch." She smiled. I ducked my head, slid open the flimsy door, and went out into the Tsukiji morning. ------- DELIVER THE ATOMS -- ASIA DISPATCH #4 [Originally posted from Singapore, March 2, 2000] In Singapore, Japan seems very far away. It is a six-plus hour flight from Narita to Singapore, further than Europe is from New York. Down here on the equator, the Singaporeans don't consider Japan to be especially Asian. The phrase is, "Asia ex-Japan." India, in contrast, is a neighbor -- it would be heresy to suggest that it was *not* a part of Asia. I have arranged to share my Singapore hotel with "Biker Bob" Gilbeau -- the entrepreneurial founder of Prejeans Restaurant, in Lafayette, Louisiana. Prejeans ( is one of the pre-eminent Cajun restaurants in the world (a small world, encompassing all southwest Louisiana). Bob built it all himself on land he inherited from Grandpére Prejean. Today it seats 350, has an award-winning Culinary Institute chef, and features live, genuine Cajun music every night -- in fact, Bob first booked Michel Doucet before he was sure he'd be calling his now-Grammy-nominated band Beausoleil! Bob and I share a disappointment over the cancellation of George Gilder's "Telecosm Asia" meeting -- so Internet World is a good excuse to come to Singapore anyhow. Bob's a remarkably compatible companion -- we share the room's single phone line to do email and web-browsing, and we figure out Bob's new digital camera and send JPEGs back to our wives. (Our wives, in turn, conspire by email to get revenge on us for our good time without them.) The two trade powerhouses of Asia -- Singapore and Hong Kong -- are competitors for firstest and mostest. The recent Hong Kong Tel contest was the latest battle of that war. If SingTel had won this key piece of Hong Kong real estate, Hong Kong would have been deeply humiliated. The acquisition of HKT by Richard Li and his Pacific Century CyberWorks (PCCW) would assert that Hong Kong would be the master of its own fate. This latter now seems a done deal (for the moment). Somebody here whispered that Bejing was behind it, that China would never let SingTel win this battle. Like religion, national pride is a powerful and dangerous force. The hottest ticket in town tonight is the PCCW party. I wangled an invitation this afternoon at Internet World; I'm going just to say I was there. Asian e-commerce faces a special kind of last mile problem -- delivering the atoms. I spoke with one young Singaporean VC here who was skeptical that e-commerce could gain an Asian foothold at all. He asked me to consider the case of Malaysia or, worse, Indonesia. Imagine, he said, that I ordered a pair of Ray-Bans from These would represent a month's salary for the deliveryman. And in a semi-reliable system, it is easy to diffuse the blame when something is "lost". Singapore, which (especially to Singaporeans) represents an island of law and order in an Asian ocean of lawlessness and corruption, has a population of 3,000,000. This is not a market, it is a niche when compared to Asia's billions. My informant went on to tell me of a Singapore hi-fi and electronics dealer who briefly tried his hand at e- commerce. His stuff was lost in shipment, and he was scammed and spoofed. Credit cards that were valid upon order magically became delinquent within hours. He wound up shutting the operation down within three months. He lost four million U.S. dollars on the adventure. The stuff doesn't even have to be very valuable, he said. "I subscribed to Wired last October," he said. "You know how many issues I've received? Two." The situation in Taiwan has its own "special properties." A Taiwanese informant told me there were two different markets. There is a cash market, where something can change hands with no record. Then there is the official market, with licensed importers, taxes, duties, and permanent records. When a credit card is involved, the persistent record makes it perforce an official transaction. The cost goes up. Shipping fees cap the list of e-commerce disincentives -- in Taiwan e-commerce is a difficult business. Yet another person told me about a Chinese e-commerce company,, that has made a deal with a major taxicab company to deliver the goods over the last mile. Asia, with small exceptions like Singapore, Hong Kong and a few other big cities, has a long way to go before it is ready for U.S.-style e-commerce. There is a huge opportunity for a logistics company that understands the various Asian cultures to solve this problem -- the company that does will rule Asian e-commerce. It's the infrastructure, stupid. So what kinds of Internet business *will* fly in Asian air? His best guess was that businesses that delivered information -- news, interaction, games, connection to people, etc., could still do quite well. To some extent, Asians may suffer an e-commerce inferiority complex. A Singaporean explained why e-commerce isn't catching on in Singapore. "Shopping is a recreational activity in Singapore," he said. "You see whole families, grandmothers, kids, the whole gang, out shopping all day Saturday. They like this. They wouldn't stop," he said. I am getting tired of hearing statements like, "Content is king," and "The limitation is talent and ideas, not technology." There is a reason *why* they're true -- the Stupid Network!!! If internetworking had not shifted control to the edge, to the end user by making details of networks in the middle irrelevant, today's wave of value creation would have been stillborn. If intelligent terminals at the edge had not taken over the functions of intelligence in the middle, then the content that creative people create would be backed up behind the dam of telco control. If people do not understand the etiology of this happy state of affairs we enjoy, there's a good chance we could lose it. It's the Stupid Network, stupid. Now, off my soapbox and on to the PCCW party! ------- SINGAPORE VS. HONG KONG -- ASIA DISPATCH #5 [Originally posted from Singapore, March 3, 2000, with a look back at my stop in Seoul, Feb 27-29.] The Singapore experiment, squeaky-clean and predictable on the surface, has its paradoxes. Some intersections have countdown timers, indicating that you have five-four-three- two-one seconds to reach the other curb. (These are in addition to the usual red/green walk/don't walk indicators.) In sharp contrast, sessions at Internet World begin lackadaisically; the keynote sessions all start at least half an hour behind schedule. The Pacific Century CyberWorks (PCCW) party last night was indeed a hot ticket. I stood with a small clutch of reporters who whispered that Richard Li *himself* might show. There was a heated discussion between a woman who maintained that China moved behind Richard Li in the HKT play, and a man who insisted that nothing of the kind was necessary. He pointed out that even though the face value of the PCCW's offer was similar to SingTel's, Cable & Wireless, (HKT's parent company) would rather own the stock of dynamic Internet-oriented PCCW than dinosaur-like SingTel. Who wouldn't? To me, both arguments seemed plausible; Hong Kong and Singapore certainly are arch-rivals, and SingTel certainly is a PTT-heritage telco at its very core. Meanwhile, Richard Li's father, Li Ka-shing, owns a controlling interest in Hutchinson Telecom, which is Hong Kong's second largest telco after HKT. This would be unthinkable in the United States, but it rates only a parenthetical comment here. (In Asia, family ties don't count for much, do they?) Li Ka-shing is also behind yesterday's IPO of Chinese multi-lingual super-portal (, anybody? How about a gambling site named Or a science fiction site named The hors d'oeuvres at the PCCW party were delicious, the wine was tasty, the people were beautiful, and the dance floor was shrouded in misty dry-ice vapors. The disco music, however, got louder and louder until it rendered my 50-year-old presbyacoustic ears useless. And soon, even though I put my ear right next to the exquisite lips of the slender Singapore air flight attendant who was intimately divulging to me her deepest secrets of coping with jet lag, I could no longer hear anything except the thump, thump, thump of the bass machine. There were only two options; invite her to dance, or, . . .oh, here comes her boy friend . . . well, maybe one option. I returned to my hotel to dream of beauty and riches and being twenty-something again. Internet World in Singapore is a sleepy affair compared to the New York City version last fall. The sessions are mostly market hype and buzzwords. It is hard for me to glean anything new. I keep interested by noting how people use the concept "Asian" -- in many cases it means "behind." One young securities analyst suggested to me that the Asian recession was the only problem, that once the recovery was underway, e-commerce would take off. Myself, I suspect that e-commerce is more horse than cart. There are 27 million Internet users in India -- this is a take rate of three percent. In the United States there are maybe 50 million Internet users, but this is a take rate of 20-some percent. Quick, what's the fourth-most-populous country? That's right, its Indonesia. So here's Singapore, at the junction of China, India and Indonesia (1, 2, and 4). Tell me that Asia doesn't have potential. Go ahead, tell me. Earlier this week, when I was in Korea, one of the members of one of my audiences, a former Korean government telecommunications official, suggests that technological progress is good, but without government policy, there will be no communications revolution. Nowhere is this more the case than in India. When I was in Korea last week, where Apricot (the *real* Asia Pacific Region Internet Conference) was underway, I had dinner with the irrepressible Izumi Aizu and two other Internet entrepreneurs. One of them was Suchit Nanda, who had been an Internet entrepreneur in India since 1988, when his ISP consisted of a single acoustic-coupled 300 baud modem by his bed. When the phone rang, he's wake up, take the phone off-hook and insert it into the modem's rubber cups. He soon had a bedroom full of modem racks, and realized he was in the Internet business. Suchit Nanda recounted how Indian government bureaucracy systematically (but unconsciously) suppresses the spread of the Internet. In a misguided attempt to nurture local industry, the Indian government imposes a 60% surcharge on all imports, including computers. You might think this would encourage the manufacture of home made computers, except that Indian manufacturers must pay a 60% surcharge on CPU chips, disk drives, etc., etc. Because lack of terminals was keeping his ISP business from growing, Nanda designed and is building set-top boxes that turn televisions into Internet terminals. These aren't cable modems; the connection is still made via dial-up, but he can build them for $50 worth of mostly home-made parts, including a wireless, infrared keyboard. So powerful is the pent-up demand for Internet connectivity that sales of Nanda's box are outstripping his ability to build them. Nanda's original idea was to develop the Indian Internet, to help people get on line, and to develop his own ISP business. But he is surprised that he is that he's getting huge orders from outside India, from places like Bahrain and Iran. The thing is taking off so strongly that he's seriously considering abandoning his ISP business to concentrate on building this box. Anybody want to buy an Indian ISP? The global Internet makes friends around the world. This morning, here at Singapore's Internet World, I looked up from my coffee to see Mike Nelson, Al Gore's long-time science aide and advisor, who recently took a job with IBM as Internet strategist. Mike, taking the heat for his former boss, says *he* is the one who really invented the Internet. (Damn, I forgot to ask Mike which Cabinet job he wants if Gore wins.) That night, Mike, Biker Bob and I go out for Singapore's signature dish -- Chili Crab. Epicure restaurateur Bob thinks that the crab is right up there with the best seafood anywhere. Mike likes the mussels, prepared with some kind of smoky Asian sauce. I agree, and I also like the tiny little squid, fried up crispy and coated with a sweet sauce. The soup's good too. Mike's VIP status had made a bottle of fine red wine appear in his hotel room -- we gulp it down, an excellent complement to the spicy seafood. That night, email from fellow MetaMarkets Think-Tanker Peter Sprague, former CEO of National Semiconductor, FOGG (friend of George Gilder), and current head of Wave Systems, announces that Peter and his wife are over at the Singapore Four Seasons; would I like to meet them tomorrow? Bob and I have afternoon flights (he to Bangkok, I to Hong Kong) so we arrange a late morning meeting on the rooftop pool. They're in town to join a cruise sponsored by the fancy Swiss finishing school that Peter's alma mater. In his bathing suit, Peter looks as unfinished as the rest of us. And even though I'm a member of the unfinished class, Peter senses I'm a friend and business ideas flow easily as we paddle in the pool. ------- HONG KONG: THE CITIEST CITY, THE CENTER OF THE ASIAN INTERNET: -- ASIA DISPATCH #6 [Originally posted March 9, 2000 from Washington, DC] Hong Kong is the citiest city in the world; stylish steel meets glitzy glass in a thicket of triumphant towers knit together on a human scale by mazes of walkways, waterways, shops, stairways, escalators, bridges, markets, malls, trams, ferries, taxis and trains. There is no pretense of parkland here. Escalators move twice as fast as they do in bucolic Manhattan -- they must; they are carrying Asia's millions. The corner of Asia that holds Hong Kong has more people than all of North and South America combined. Hong Kong is joined to China under the "one country, two systems" doctrine. Across the system-border, Jiang Zemin makes history the day I arrive in Hong Kong, saying, "Internet technology is going to change the international situation, military combat, production, culture, [and] economic aspects of our daily life." Just as Al Gore's utterance of the phrase, "Information Superhighway" meant the end of the White House's analog PBX and web pages for every arm of government, Jiang's pronouncement signals a new realization that China will join the 'net to participate in the 21st century. Maybe Jiang's new strategy is to boost China's market cap so it can acquire Taiwan in an equity swap. Singapore's rivalry with Hong Kong continues. The front page of the Singapore Straits-Times has two leads that I read on the plane from Singapore to Hong Kong. The first covers rule changes on Singapore's stock exchange to encourage IPOs -- five days before similar rules go into effect on Hong Kong's NASDAQ-like GEM. The second story covers Richard Li's conciliatory words towards Singapore following his apparent victory over SingTel in acquiring Hong Kong Tel. The headline says, "I feel bad upsetting Singapore's feelings." Sorry, Singapore. Hong Kong is the center of the Asian Internet, as far as I can tell. In Hong Kong, for the first time on the Asia Tour I hear no apologies for Asia. Internet entrepreneurs in Hong Kong have the world by the short hairs; they know it. I met Robby Yung, a 20-something European-born Chinese- American CEO of 'OS Internet'. Robbie's easy smile belies the fact that his paging business has been overshadowed by a mushrooming web design operation with offices in China, Hong Kong and Tokyo (so far). He speaks in an informal American hey-dude locution of how this week his firm grew from 70 to 130 employees when he acquired a potential rival. Schooled in America, Robby's been summering in China since he was a kid. His father helped start Citic, the private-investment arm of the Chinese government. Robby speaks as easily of China's bid to join the WTO as he does of Chinese youth culture. Familiarity with the urban music underground (Shanghai kids are into hip-hop, he says, while Bejing kids dig punk and hard rock) has guided his creation of OneMusic, a Chinese-Japanese-English. He is also starting OneWomen; Robby says that when he acquired the paging company, the OS in 'OS Internet' stood for 'Olympic Star', but he is renaming it 'One Studio'. When people come to him with web design work, he takes some of his compensation in equity -- "These people will be lifelong customers," he says. The Chinese government is funding his latest project -- web design training in the far-inland city of Chengdu. This is as win-win as they come -- Robby's main barrier to further growth is clever, trained people. I excuse myself; I am invited to a party in the Mid-Levels, a neighborhood of high-rises that caters to management- class ex-pats halfway up Hong Kong's mountain. I notice Richard Li on the cc list of the email that invites me; I figure I should dress up. Wrong. I'm the only one wearing a tie. And, of course, Richard Li doesn't show. One of the tieless is Anthony Yip, a twenty-two year old Tulane dropout who got interested in writing video games to the exclusion of his course work. Now he's the CEO of, a distinctly Chinese (he'd object if I called it a) portal. He talks easily of bandwidth and colocation -- he has colo space in central offices in Bejing and Shanghai. Bandwidth is a huge cost for him in relatively non-competitive China. So far, he's acquired a dozen sites --,,, et cetera. He is not deterred by the paucity of on-line advertising in China -- he's playing some uniquely Chinese angles. For example, because Chinese phone companies are their own ISPs, Internet access is just another charge on the phone bill; Anthony hopes to turn the phone bill into an e-commerce payment channel. Later, I learn that Anthony is the son of founder Peter Yip. My money'd be on the son. It is warm in the apartment. I hang out on the balcony with Hong Kong's digerati -- analysts, entrepreneurs, aficionados gesture excitedly and talk in English and Cantonese -- overlooking the world's busiest harbor and the world's citiest city. A New York Times reporter and a photographer are there covering the Hong Kong Internet scene. The party's host, Matei Mihalca, is a Romanian-born fast-rising Merrill Lynch analyst, who now suddenly covers the Asian Internet. Matei's wife is a slight, beautiful woman -- the editor of Ching-Fang, the Chinese edition of Playboy (published in Taiwan). Robbie Yung, who I left an hour ago, shows up with his COO Collin Choy. It feels like the epicenter of the Asian Internet revolution -- the heel of the hockey stick, right there on the balcony overlooking the hazy, humid glittering city and the world's busiest harbor. I decide to walk back to my hotel. It is eleven at night, but Hong Kong is totally safe. I descend in the elevator, and walk through the elegantly tiled lobby of Matei's apartment building and the well-lit parking garage. Then I turn right down a sloping, narrow side street, take a stairway that seems more direct, find my way across a bridge one level above a busy street, walk through a playground with swings and a jungle gym, tiled with firm rubber. Then I descend a spiral stair to the street, turn right and cross at a light while double-decker busses wait. I walk a city block and enter the mall that abuts my hotel. I pass a dozen glitzy stores that'd be in place in Paris or San Francisco. Then I take the down escalator, find the passage to my hotel in the corner and take the elevator to the eighteenth floor. Hong Kong is entirely do-able -- totally citified -- no problem, even for a gweilo like me. The next two days are a swirl of Peking duck dinners and fancy meetings in glass conference rooms with sweeping views of Hong Kong harbor. One morning I wake up early and walk down to ride the Star Ferry to Kowloon and back. One highlight is a visit to the data center, courtesy of John Luciw, who I met at the show in Singapore. This data center, on the umpty-umpth floor of one of the tallest fancy-glasses in Hong Kong, is a class act. iLink is a PCCW company. (Don't confuse it with the U.S. based i-link phone company, a multi-level marketing ploy.) Hong Kong's iLink is the glitziest, most modern, most attractive of the half-dozen data centers (such as Exodus and AboveNet) I have seen. Young Asian technicians hunch over terminals and confer in twos and threes. The CEO leads a half-dozen dark-suited sales prospects through the data room. The data room itself is compact, secure and well designed. The unit-of-sale is a single shelf in a rack with a locking cover. Everything (e.g., power, fire protection, data feed) is triple-redundant. Everything is multiply-secure. Everything is organized, bundled, aligned, well-lit, and carefully arranged. A class act, world-class. Speaking of class, a 20-min express train makes getting to Hong Kong's new airport from any downtown hotel about the easiest airport access in the world. I enter the hermetically sealed winged time-space machine, and I'm hurled forwards through a brief night, backwards to the same day I left, and I arrive on my side of the world, magically on-time and unscathed, with just a few minutes to change planes to Washington DC for tomorrow's meeting. ------- CONFERENCES ON MY CALENDAR April 23-24, 2000. Pittsburgh PA. T3 -- Tomorrow's Technology Today. A conference designed and organized by CMU students. I'll be on a panel called, "Winners and Losers: Mapping the new computing landscape," on Saturday morning. Looks like fun, and it's cheap, too. See May 7-12, 2000. Birmingham UK. World Telecommunications Congress. I am an invited speaker for the session entitled, "What's your network IQ?" Answer: Too high. For info, see May 23-26, 2000. Laguna Niguel CA. VORTEX. It looks like I'll be co-kibitzing the VC panel with Bob Metcalfe, then talking about something (tbd) for a few minutes after that. For more info, see June 7-10, 2000. Toronto ON. TED CITY. My only role here is as a paying member of the audience, but I think that Richard Saul Wurman does a real job with his TED conferences -- every one I have been to has had deep lasting impact. You can't shoehorn yourself into his regular Monterrey CA stand in February, but there are still a few spaces for June, and it'd be great to see other SMART People there. ------- COPYRIGHT NOTICE: Redistribution of this document, or any part of it, is permitted for non-commercial purposes, provided that the two lines below are reproduced with it: Copyright 2000 by David S. Isenberg -- -- 1-888-isen-com ------- [to subscribe to the SMART Letter, please send a brief, PERSONAL statement to (put "SMART" in the Subject field) saying who you are, what you do, maybe who you work for, maybe how you see your work connecting to mine, and why you are interested in joining the SMART List.] [to unsubscribe to the SMART List, send a brief unsubscribe message to] [for past SMART Letters, see] [Policy on quotes: Write to me. I won't quote you without your explicitly stated permission. And if you ask for anonymity, you'll get it.] ** David S. Isenberg, inc. 888-isen-com 908-654-0772 ** -- The brains behind the Stupid Network -- **