Party on, dotcommers!

One of the most interesting things about the New Economy is the propensity of its participants to make deals on the fly. Put any two Netpreneurs together for 10 minutes and they will inevitably search for synergistic opportunities — a fancy way of saying, "Let's see how we can make money together."

I'm not knocking it. I think it's great because what is emerging is a culture of cooperation that breeds increased opportunity for all. For sure, not every one of those deals will lead to something great, but the open-minded attitude displayed by dotcommers — big and small — is very encouraging indeed.

There are several networking functions where the local digerati can congregate and look for business opportunities, or just hang out with others in the industry. The most prominent one is probably First Tuesday, which — as its name suggests — is held on the first Tuesday of each month. The venue changes each month but it's usually in Bangsar, Kuala Lumpur, the place to see and be seen.

Its intended purpose is to match Netpreneurs with venture capitalists. But, I don't think it's been too successful on that front. There have only been one or two matches to date. But, it's still a good event to attend because you get to meet interesting dotcommers there. During the height of the dotcom boom last year, it attracted as many as 300 people. These days, you'd be hard-pressed to find 100. But, the ones who still attend are the true believers of the New Economy. Many of them are running pure-play dotcom start-ups, which I believe are the essence of what the Internet is all about.

Another popular IT event is Net Bash, held once every few months and also in different locations. The crowd is a bit different. For want of a better word, I would call it a more "Old Economy" IT crowd — people from the more traditional technology companies, involved in software solutions, systems integration and so on. There are some pure-play dotcommers too, but not like in First Tuesday.

Another type of dotcom party caters to niches. Word Up, which is supposed to be for content providers (fancy dotcom term for writers), is held once a month, usually on a Thursday. Like First Tuesday and Net Bash, the location always changes but it's usually in Bangsar. However, unlike the other events, no snacks or drinks are provided. You pay your own way, which is fair enough since the grouping is a lot less formal and smaller.

Although it's intended for writers, just about anybody can — and does — attend. Regular dotcom party animals like Ritches Fernandez of MalaysiaKini.com (he's an ad sales guy, not a writer) and Wind Koh (a web designer) can be seen hanging out at Word Up gatherings. A lot of corporate communications and PR people show up as well. I guess they're writers too. Sort of, anyway.

Just recently, a bunch of web designers got together and formed a new grouping called Doxob. The mood at the inaugural party was surprisingly upbeat given that web design work is becoming scarcer. It'll be interesting to see if Doxob can keep its membership focused or whether it will evolve into a more general dotcom gathering the way Word Up has. I didn't see too many non-web designers at the first party, with the exception of the omnipresent Fernandez (but then again, maybe he knows some HTML).

Possibly the most unusual type of dotcom gathering is the IT Christian Fellowship, which meets up once a month at a church in Section 14, PJ. The main purpose is to sing songs of faith, but as I said earlier, put two IT persons together and the search for synergy begins. As expected, lots of business cards and ideas get exchanged before the singing starts.

The crowd is very different. All, of course, are Christians, and most are high-level executives. At last week's gathering, I spotted Alan Fung (former executive director of Pikom and founder of Permission.com.my), Stan Singh (vice-president of Mui dotCom), Nick Goh (GM of Cordoda, a broadband service provider) and Lawrence Mak (IBM's manager of customer support operations in Asean). I was told that Sun Microsystem's MD, Govinathan Pillai, and entrepreneur-at-large, Derrik Khoo, occasionally show up as well.

Although I'm not a Christian, I enjoyed the gospel songs (no, they didn't sing the corny but irresistible Cinta IT). But, what I found most interesting was the frankness of the discussions. Fung, for example, told the crowd how the dotcom downturn has affected his business. Very different from the kind of talk you'll find at First Tuesday and Net Bash where no one ever admits they're doing badly.

There's not enough room in this article to describe the many other types of dotcom gatherings around town, but if you're involved in IT or are thinking of taking the dotcom plunge, rest assured there's a party out there for you. So cheer up and party on.

Has Derrik found his groove?

I was surprised when I heard that veteran dotcommer Derrik Khoo had decided to become a consultant although every failed Netpreneur in town eventually becomes one. Since he has already failed twice, I suppose that makes him doubly qualified for consulting work. How clichéd, I thought.

I never expected Khoo, an incurable serial entrepreneur, to settle for any project with less than a global scope. How could he possibly settle for a job as unscalable as consultancy?

Then, he e-mailed me (and about 50 other friends and associates) a detailed explanation on why he decided to accept an offer to head a soon-to-be-formed division within a public relations (PR) agency that would specialise in technology companies. All of a sudden, it made sense.

Khoo, after all, has excellent PR skills. But more than that, he really knows his stuff. Though not a techie, Khoo has a sound understanding of IT, and his pedigree in journalism gives him an edge over most PR consultants — many of whom have no clue what the press is all about. (How else do you explain the deluge of mostly unusable press releases that swamp editors every day?)

Also, this new division — which was mooted by a larger international agency — would be created with him in mind. That's pretty flattering. Couple that with an attractive compensation package and you have a good argument for him to accept.

Still, I had my doubts. For one thing, I'm not sure he would be necessarily good at doing PR for others, although he's obviously good at self-promotion. By his own admission, he is no expert at PR. In fact, he's never even worked in a strictly PR capacity before.

So, when I caught up with him last week, I asked two key questions that caused him to let the cat out of the bag: He's decided to say "no" to the job offer.

Firstly, I asked why he needed an international PR agency to fund such a business, which requires minimal capital. Khoo admitted he didn't need it. Secondly, I asked why he needed the support of a bigger agency that probably would require him to find his own tech clients, anyway. Again, the answer was he didn't need it.

So, instead of creating a subsidiary for an international agency, he's now seriously considering starting his own consultancy (working title: Derrik Khoo & Co), which would provide small IT companies with strategic advice on government relations.

Specifically, it will teach start-ups how to make full use of the benefits offered by the Multimedia Super Corridor (MSC) to secure government grants; to gain access to government venture capital funds; and to make the most of existing government laws and regulations. This, he is eminently qualified to do. And no one — not even his harshest critics — can dispute that.

I admire Khoo. He's an incredibly smart guy and I always believe he has what it takes to achieve greatness. But, his big mistakes in the past were to venture beyond his core competencies and to make plans that were simply too grandiose. Many people who know him say the same thing.

"The problem with Derrik is that he always complicates things with his grand visions," says a friend who has travelled with him on road shows. "He can't seem to be content with something simple and straightforward."

No more. "Stick with what you know", that's his new motto. "If I had only stuck to what I knew best, I'd have made much more money and suffered far less grief," he said. And, he's not thinking big anymore. "I know this kind of business is not really scalable. You can forget about an IPO or attracting any venture funding. This is niche stuff we're talking about," he said.

I asked Khoo what he thought were the main reasons for the failure of his first two ventures: Brave & Bold, an online content play; and Go2020, which facilitated an online shopping mall. He stoically maintained he was "simply ahead of his time".

Frankly, I think he just chose the wrong business models. Nobody's learnt how to make online content pay and online shopping malls don't work outside Japan (what works in the Land of the Rising Sun doesn't usually catch on elsewhere - witness DoCoMo's iMode).

This time, though, he might be on to a real winner. For one thing, he possesses the ultimate barrier to entry: himself. No one in the industry has the same kind of charm, wit and government contacts that he has. There's only one Derrik Khoo.

What a lot of people tend to forget is that the man does have a track record of success, albeit in the Old Economy. He joined the New Straits Times as a Grade B journalist earning RM1,250 a month in 1985. When he left the company 11 years later, he was making 15 times that amount — his reward for making Computimes one of the most profitable ventures to have emerged from the New Straits Times group.

But the main reason I believe he will strike gold with his latest venture is because for the first time in five years, he's tapping an existing demand rather than trying to create one. As renowned venture capitalist Bill Gurley wrote: It's far easier to surf a wave than to create one.

"Twice already, I tried creating a wave and I got totally wiped out," Khoo said in agreement. "Now, I'm content to just go surfing."

Meeting an industry visionary

E-mail is said to have made organisations more horizontal. Ordinary workers can e-mail their CEO to share their thoughts on situations in the company. E-mail also allows ordinary folks like you and me to contact the mighty and influential — and sometimes they might just write back!

"The notion that you can send an e-mail to just about anybody is shocking," said Esther Dyson, a key panellist at the CEO Technology Summit held in Singapore last week. So very true, I thought to myself as I heard her say that. I first got acquainted with Dyson two years ago when I was still a salaried man with lofty Internet dreams.

I saw her talking on CNN about her investments in Eastern Europe and was impressed with her views. So, I sent her an e-mail asking whether she'd ever consider investing in Southeast Asia.

Dyson replied almost immediately asking me how I got her e-mail (I'd used Yahoo! to search for her website) and answering, "No, because I don't know the market well enough." She also gave me some useful advice about my plans at the time to do a content website. Online ads won't cut it and the subscription model doesn't seem to be working, she warned. I wisely took her advice and stayed a salaried man for the next two years.

At the time, I didn't know who she was. It was only later that I realised how prominent she actually was. The Industry Standard (now defunct) calls her "one of the most active and influential people in the industry". Besides being an angel investor, Dyson publishes an influential technology newsletter called Release 1.0, authored a book on the impact of the Net called Release 2.0, and writes a fortnightly technology column for the New York Times Syndicate called Release 3.0. She is the former chairperson for ICANN (Internet Corporation for Assigned Names & Numbers).

Dyson was a key speaker at the tech summit in Singapore where she shared her views on the future of the New Economy. The kinds of business models that she thinks will succeed in the coming years are technologies that help economies become more productive. We're talking about things like accounting systems, customer relationship management, logistics, and communications.

She's particularly bullish about ASPs (applications service providers, which deliver software over the Net). "ASPs are very sensible business models because they cut costs, centralise administration, and make it easier to distribute, operate and enhance the software," Dyson said. "If you sell someone software (in a traditional way), you may or may not have a continued relationship with that customer. But if you sell him a continued service, you will have a much tighter hold on that customer — provided you do the job right."

She illustrated the point of "doing the job right" by telling a story about Automatic Data Processing, a company involved in the business of payroll processing. ADP has seen increases in profits every quarter for the past 25 years, according to Dyson. The interesting thing is that the company has never had a contract with any of its customers.

"The deal basically was the customer had to be satisfied each quarter," Dyson said. "Because they knew they could lose that customer — as there was no contract and therefore no guarantee of continued revenues — they actually did a good job of providing payroll services every quarter."

That fundamental value of keeping your customers happy and keeping those revenues coming in, according to Dyson, "is a very good business model for the future".

When you hear her speak, you get the sense that Dyson is someone who believes strongly in getting the basics right. Another core value she touched on is to always deliver on your promises.

This was a point she reiterated over a private lunch, which she kindly invited me to. To be honest, I felt a bit out of place among the international businessmen at the table, which included the general manager of a Japanese VC fund; a specialist in mergers and acquisitions; a Chinese businessman involved in wireless technology; and the founder of a crisis management consultancy.

I asked whether she would now, two years later, consider investing in Asia. She replied the answer is still "No" because she still doesn't know the region well enough. She added that Asia probably has more business potential than Eastern Europe but she's already committed to the latter. "You can't just pull out and abandon those companies you've invested in," she explained. "If you do that, how can anyone ever trust you again?"

Sticking by your commitments; keeping your customers satisfied; delivering on your promises. All good basic values. Just like answering your e-mails, which Dyson obviously does.

Last year, a visiting German student who was doing his thesis on the MSC told me that he had e-mailed every single MSC-status company (there were over 300 then) asking for information, and fewer than 10 replied, five of whom said they couldn't help him.

Contrast this nonchalant attitude towards e-mail with that of Dyson, a leading industry figure who gets so many e-mails every day, she once wrote an entire article on the topic of how to manage e-mail overload. Yet, she found time to reply my queries two years ago.

Maybe she's just a very courteous person. Or maybe, as Mark McDonald, the Southeast Asia regional bureau chief of the San Jose Mercury News, suggested to me recently, "It's the reason why Esther Dyson is where she is today."