From start-up to IPO: New Zealand’s most successful entrepreneur

New Zealander Tim Williams, struck gold with Internet marketing company ValueCommerce, and is now launching his latest venture—an online wine and lifestyle portal.

Tim Williams

By Chris Betros

Tim Williams got his start in business when he was just seven years old. The affable New Zealander recalls fishing one day when an elderly lady approached him to ask if she could buy his fish for her cat. Williams offered to give her the fish but she insisted on paying. So on his way home, he stopped by her place and sold her his fish for five cents each. “By the end of the year, I was going around to 20 houses, selling fish,” says Williams. A few years later in high school, his entrepreneurial spirit had kicked in and he was selling Christmas trees for a tidy profit. “I think the key to being successful at whatever business you are in is to enjoy what you do and not even see it as work,” says Williams, now 38. He is one of New Zealand’s most successful entrepreneurs in Japan, having founded Internet marketing company ValueCommerce among his endeavors. “I have always loved creating something, seeing it work and grow. I’m very passionate about what I do.”

But it was a lack of passion that led Williams to leave his job as a molecular geneticist at an Auckland hospital and come to Japan in October 1993 to visit his brother who was working at the New Zealand Embassy. He was following in the footsteps of a lot of Kiwis. “We’re a small country, you know. After you graduate, you take off for a couple of years overseas. I was actually planning to go to China to study Chinese medicine but I never made it. In fact, I still haven’t been to China yet.”

Williams’ business instinct sensed an opportunity in Japan. He brainstormed with a New Zealand Embassy worker, Jonathan Hendriksen, over BBQs and beer. “We both had a notebook of silly ideas. After a few lagers, we concluded we should get into the Internet business and started a company, Transpacific, to sell domain names. “At first, it was a baptism of fire,” Williams says. “We were working part-time while trying to launch the domain business. We got our office furniture and a phone system by trading a case of whisky with the defunct Long- Term Credit Bank of Japan. For the first two or three years, we had to make ends meet by doing all sorts of odd jobs. I did medical rewriting, helped a car export agent sell 300 cars a month; I taught English, and even gave cooking lessons at night.”

Williams and his colleagues opted to grow the business organically at first—not that they had much choice: “Banks would look at us and see a group of foreigners with less than five years’ experience, an Internet business and no Teikoku Databank rating, so they said no. It was a real learning experience for us. We didn’t even know what IPO meant, what an angel investor was, and never thought you could ask people for money. I was naïve,” he says. “We knew that we wanted to be in control of our own lives and that we had a ground-breaking business, bringing all the international domain names to Japan.”

Before long, the US company ValueClick expressed interest in Japan and Transpacific got the license for ValueClick and localized their website. Eventually, Transpacific spun out ValueClick as a separate company and it went public in 2000. Meanwhile, Williams started transforming his domain-hosting business into an affiliated Internet marketing organization. In 1999, Transpacific changed its name to ValueCommerce and launched Japan’s first ASP affiliate marketing platform and service. “I remember at the press conference, a Japanese reporter asked: ‘Does this really work? If it does, that’s pretty cool.’ Our lead engineer was standing behind him and said, ‘Of course it works. I made it.’ ”

"Japan is a notoriously copycat country. We’d come up with something and then someone would copy it ... you have to constantly focus on the cutting edge and make sure you lift the bar."

It wasn’t all smooth sailing at first, he says: “Japan is a notoriously copycat country. We’d come up with something and then someone would copy it. Looking back, it was quite disheartening, but now I understand Japan and there is no point in wasting negative energy on things like that. You have to constantly focus on the cutting edge and make sure you lift the bar. As soon as we were up and running, the first thing I did was to hire good people. My passion lies in the creative side. Once a company gets bigger, you’ve got HR policies and operational procedures to worry about, which doesn’t float my boat. I know it’s important but I take the approach that there are people out there who are far better at that than I am.”

American Brian Nelson was hired as COO from the Gallup Organization in 2000, and in 2002, he became president and CEO, allowing Williams to take a back seat. “From the get-go, I was hiring people with the intention of finding someone to run it because I didn’t know how big it would get. If it had stayed at 20-30 people, I probably would have stayed on as CEO. But as it grew, it went from me driving the company to a team effort. I wasn’t desperate to cling on.”

While Williams and his team found it easier to attract investment, raising about US$35 million from US venture capitalists JAFCO, PCCW and others, the biggest challenge came in 2001 with the dot.com bust. “We had to do a big restructure in 2002 and let a third of our staff go when the market came crashing down,” says Williams. “That was probably one of the toughest things I had to do. Then we started to rebuild. One of the big issues leading up to the bust was the huge amounts of money being thrown around. A lot of people had over-inflated views of themselves and promptly rushed out and spent all that money. If I had to advise anyone starting an enterprise today, I would say grow your business organically. Even though you might not be trained in finance, you pay more attention to cash flow because your day-to-day life depends on it.”

Williams’ latest venture is a wine shopping and lifestyle portal called iwine (www.iwine.jp). “I’d spent the last 11 years telling people how to promote their website or advertise or how to make ad revenue from their site. I thought I’d like to be on the other side,” Williams explains. About four years ago, he got involved with a company that was importing wines from Napa and selling them to restaurants and hotels. “I was asked to be chairman of the company. They didn’t really have a full-time CEO in Japan, so we approached Michael Khoo who was the head of Mondavi Japan at that time. He came on board and has driven the B2B business really well, reaching 1,200 hotels, restaurants and clubs.”

To boost their inventory, Williams found an ideal partner in Terada Soko which has 8,000 different kinds of wine in its warehouse at Tennozu Isle. “We have only just started this month, but our goal is to become the Amazon of wine. Michael does the B2B side, and I do the B2C side. It’s a pretty neat portal with about 1,000 wines on it from all over the world and it will be bilingual. We will do all the usual online marketing such as search engine optimization, search advertising, emails. However, we don’t just want to be an online site. We also want to be a community and we’ve been doing tasting events for a couple of hundred people at a time. The next step is to build a big wine lovers database. A lot of our B2B customers have their own mailing list, with up to 5,000 regular diners, so we can do cross-promotions, promote their restaurants if they promote our wine site or we might do joint events.”

Ironically, Williams finds himself almost back where he was 10 years ago. “I’m connecting systems up once more. It’s a wine specialist software system from the US and we have the exclusive license for that,” he says. Iwine has investors, too. “The good thing about this project is that the investors are not venture capitalists. They are the sort of people who own a winery or they are wine lovers, so they are equally as enthusiastic about it as we are.”

Despite his passion for work, Williams does take time to have a bit of balance in his life. “I play table futsal and soccer and I like to fish in Hakone. About two months ago, I started studying Krav Maga, an Israeli martial art. I am so bruised all over,” he says. In listening to Williams speak so enthusiastically, one gets the feeling that he has many projects ahead of him. Whatever it is, Williams will be ready to jump in at the grassroots level and roll up his sleeves. “For now, I’m really excited about iwine. It’s a fun product to work with. When 5 p.m. Comes around on a Friday, there is no shortage of drinks to try.” JI