funnysnow

Oct 15, 2006
They hit the jackpot with dotcom venture
After years of struggle, NUS friends strike gold when SPH bought their company Hardware Zone for $7.1m

By Jeremy Au Yong

WITH just one year to go before graduation, Jackie Lee decided to take a break from his engineering course in 2000, to concentrate on a website he and five friends had founded.

It was not exactly a conventional choice. His parents, both vegetable sellers, had hoped their eldest son would get a steady job.

Eight years of struggle, sleepless nights and bouts of soul-searching followed. But two weeks ago, Mr Lee and his first business partner Eugene Low became millionaires when media giant Singapore Press Holdings announced that it would buy their company, Hardware Zone, for $7.1 million.

The sale may not be in the same league as Google's US$1.65 billion (S$2.64 billion) buy-out of video-sharing website YouTube last week, but it is still pretty impressive for a Singapore dotcom business that started out as a hobby website for tech geeks.

It is one of Singapore's largest deals involving a dotcom start-up.

Although Mr Lee, 30, the company's chairman and chief executive, tried to remain level-headed about the sale, he could barely suppress his delight. 'I'm going to buy a new car but don't ask me what. I'm not going to tell you,' he said. He now drives a three-year-old Honda Accord.

At the beginning, he and Mr Low started the site as a forum for local computer enthusiasts, telling them where to get the best parts for the best prices and giving them a place to share tips on how to speed up computers.

This was in 1998, when they were first-year engineering students at the National University of Singapore (NUS). The special-interest site called the Singapore Overclocker's Group grew so popular that it turned into a fully-fledged dotcom business under the brand ************.com.

They had no overheads. The pair maintained the site from their homes and their parents paid the utility bills.

As it began to take off, they roped in fellow engineering students Joe Ang, Jimmy Tang, Poh Swee Hong and Jereme Wong.

Soon, shops in Sim Lim Square and US tech firms started advertising on ************.com. In the first year, the site made $300,000 from online advertising.

The turning point came in 2000, when the six of them worked on the website full-time as part of the six-month industrial attachment required by their course. They went looking for investors and raised nearly $1.5 million.

Until then, Mr Lee and Mr Low had only put in about $1,000 in capital to cover operating costs. Up till the time the investors stepped in, that nominal input was also supplemented with a $20,000 grant from the Infocomm Development Authority of Singapore.

With the injection of funds and the responsibilities that came with it, the duo decided to take a break from school.

As Mr Lee put it: 'Who is going to fund a part-time CEO?'

The plan was for the other four friends to complete their degrees first and return to work in the company so that Mr Lee and Mr Low could resume their studies.

The two never made it back to university. Mr Low worked out he had enough credits to get a science degree and changed his course to graduate.

Mr Lee didn't have enough credits to graduate, but decided not to go back to school anyway.

At first, his parents were apprehensive about his decision, but they came around when he told them he would go back to school if he failed.

And sure enough, there were occasions when he worried that he had made the wrong decision.

Just after they had raised their capital, the dotcom bubble burst. Revenue started to dry up as advertisers fled from Internet start-ups. In 2000, the company suffered a loss of $300,000.

While other companies were tempted to cut costs, Hardware Zone decided to expand into the traditional print business. In 2001, the company published its first title, HWM, a magazine covering IT news and reviews.

It proved an instant hit with online viewers, who were happy to make the switch and buy the magazine. The response was so good that the quarterly magazine became a monthly. Within one year, circulation was up to 20,000 copies a month, making it Singapore's best-selling IT magazine.

Yet, while revenue grew healthily each year, profits were still hard to come by. In its first year of print publication, the company's losses came to $150,000. A year later, that was cut to about $20,000. The company finally turned the corner in 2004.

Hardware Zone now runs 12 websites and 16 magazines spread over seven countries. These include HWM in Singapore, Thailand, Malaysia and Indonesia, as well as local lifestyle magazines such as Carma, which covers motoring, and Inside Golf.

The original web portal ************.com attracts about four million unique visitors a month and is one of Singapore's most popular sites.

The workforce at their Ayer Rajah Technopreneur Centre office has grown from four to about 160. Revenue was $6 million last year.

Mr Low, 29, the company's general manager,would not say how much they earn now, or how much they are worth, but they have all the trappings of a middle class lifestyle: each has a car, all play golf, two live in condominiums and - thanks to the sale - none of them are short of cash. Four of the six are married.

Success has not changed them, Mr Lee said.

'We're all still very good friends. In fact our wives complain that although we see one another every day, we still want to hang out on weekends.'

He does not think that the buy-out will affect the way they run the company. 'We're still going to be here doing what we love doing,' said Mr Lee.

Mr Low said the growth of the company is something he would never have imagined 10 years ago. 'I thought that I was going to be a teacher, like my parents.'

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sassygirl_

wow. i really admire those pp who could make their first million ed such a young age. wonder when's my turn. hhahahaha

funnysnow

-Y-, maybe can make here famous, SPH wanna buy here too.. LOL!

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Wenzi

i made my first million in Monopoly!

it's me.. wenzi!!!!
愛一個人不一定要擁有﹐但擁有一個人就一定要好好去愛他!
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.phoenixity.

wah.................... rich seh. :speechless:

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Woud you lie with me and just forget the world? ♥


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fuyumi

I will say it's one place I will go for some hardware review.