SMART Letter
#36
ASIA DIARY
March 25, 2000
!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*()
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SMART Letter #36 - March 25, 2000
Copyright 2000 by David S. Isenberg
isen.com -- "one-man multi-national corporation"
isen@isen.com -- http://isen.com/ -- 1-888-isen-com
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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
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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
MetaMarkets.com discussion boards. (Since then,there have
been significant additions and a few re-writes and corrections.)
Metamarkets.com is the home of OpenFund.com, 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.
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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?
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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, www.triangletech.com, 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!
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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.
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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
(http://prejeans.com) 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 sunglasses.com.
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, 8488.net, 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 tom.com. (Mom.com, anybody? How
about a gambling site named bet.net? Or a science fiction
site named zorg.org?)
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 isen.com 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
myrice.com, 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
-- soccerchina.myrice.com, love.myrice.com,
chinaMP3.myrice.com, 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 china.com 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 iLink.net 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 http://www.t3conference.org/
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
http://www.wtc2000.org/info.htm
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 http://vortex2000.com/
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.
-------
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provided that the two lines below are reproduced with it:
Copyright 2000 by David S. Isenberg
isen@isen.com -- http://www.isen.com/ -- 1-888-isen-com
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