Augie Tam

Augie Tam Founder, Gaijininvestor.com

Augie Tam is just a guy with a website, but in Bit Valley that can qualify you as a startup. We first found him, in fact, giving a presentation at the Startup Forum in Tokyo. His business card lists his home number and email (no physical address), his site is hosted on a commercial service, and, since Tam doesn't have much money, his company was registered in California, where fees are much cheaper.

But Tam, a Chinese-American expat living in Tokyo who doesn't know much Japanese, is convinced he's sitting on an opportunity. His site, GaijinInvestor.com, helps solve the problems he himself encountered as an English-speaking online trader trying to participate in Japan's stock markets. According to Tam's research, he has over 1 million potential customers in the US alone.

Since his presentation at the Startup Forum he's had a few VC nibbles. More important, of course, is he's gotten a write-up in J@pan Inc. magazine. -- Daniel Scuka

What gave you the idea for GaijinInvestor.com? On October 1 last year, brokerage commission fees were deregulated, helping open the door to online trading in Japan. I had already been trading in the US with my E*Trade account, and I decided that since I had money sitting here in my yen savings account earning near zero interest, I wanted to try my luck in Japan's market. First thing I did was open a Japanese online brokerage account, at E*Trade Japan.

How's your Japanese? It's not so good. And although I'm Chinese-American, I grew up in the States, so I never mastered the written characters used by Japanese and Chinese. So it's just as tough for me to read as for any other foreigner. I can read a little, but I had to ask my Japanese friends to help me open up my E*Trade account here.

So this really was a problem you had personally? Yes. The first problem was how to open an account, and language was the first barrier. But that in itself wasn't too difficult. My next problem was: where do I get the information to help me decide what to buy? That's a bigger problem. Institutional investors have access to extensive research reports on Japanese companies in English, but for the individual, there's precious little out there. I can't get my Japanese friends to help me translate every day. That's what inspired the idea behind GaijinInvestor.com.

What's the first thing you did to launch the site? I bounced the idea off a few friends to see if they thought it was worthwhile. My initial idea was to start a site focused on foreigners like myself living in Japan who are eligible to open a brokerage account, since they'd have to go through the same process I did. The first thing I did was translate the E*Trade Japan site into English -- that was pretty easy since the Japanese screens are almost the same as the (English) E*Trade screens in the US. That helped me develop a Japanese-English glossary of trading terms and online trading site menu items, which I put on my site.

Next? My friends all said that the market here was too small, and they advised dropping the project. But having some experience as a Web developer, and considering that commercial hosting is pretty cheap, I went ahead and did the site coding myself, since I figured that would test the concept. Within a month -- I first thought of the idea in December -- I was able to launch. After I put the site up, although I received some queries from other Japan-based expats, I received a lot more interest from people overseas, and that's when I discovered that the market was actually global. It was my first strategic shift [laughs].

How'd you end up pitching the idea at the Startup Forum? I sent the organizers an email and asked how to sign up. That was the first public arena where I actually explained my site to people. I was a little nervous, but it didn't seem too different from presentations that I'd done in b-school, so it wasn't too bad.

What sort of investment are you looking for? Seed capital -- $1 million US, followed by subsequent rounds. Unfortunately I don't have any wealthy friends or family [laughs], so I'm also looking for professional angels. I don't actually have a great deal of investment right now, but pitching at the Startup Forum certainly helped.

How about staff? I'm still a one-man operation, although I have some outside advisors who are helping me. I'm basically at the very early startup stage.

What's the next step? The next milestone is to find one or more strategic content partners. Also, I need to develop some tools that will pull out stock quotes or display portfolios -- something that can help personalize individual user pages. I also want to develop some research and other data in-house.

How many potential users are out there? Currently, there are about 10 million online investing households in the US alone. I estimate that at least 10 percent are interested in investing in foreign stocks, so that makes 1 million potential US-based users. For every online investor, there are three offline ones who use the Web for research. Obviously, these numbers are growing. Jupiter Communications says the US online investing population will double to 20 million by 2003, with growth rates in Europe and other parts of the world even higher.

How are you going to make money on this? I'll primarily follow the advertising model. Pay-for-content is tough. We might get people to pay for investment advice or stock recommendations, since other sites are already doing well with that approach, but no one will pay for news -- it's free. Basically, we'll do some of the things that Motley Fool and TheStreet.com do for US stocks.

What do you do in your spare time? I don't actually have much. I do get some time for playing roller hockey in Akihabara on Sunday afternoons, though.