Starting young

By IRENE KIEW

The Star, 21 April 2004

Founder and CEO Warren Tan, 24, became a businessman at an early age. Driven by the need to upgrade his computer in order to play games, he looked for ways to earn money and get affordable upgrades he discovered and became an active participant in newsgroups, which were like online classifieds, where he could buy and sell used computer parts.

Warren eventually realised that used computer parts were worthless to some people after they upgraded their systems but that others were willing to pay good prices for those same parts because they couldn’t afford brand new ones. He began to exploit that. Warren’s friends were more than willing to sell their used hardware to him. He’d spruce it up a little, advertise it online, and make a small profit from the sale.

He also researched the kind of parts that would be in demand and their market value so that he’d know a good thing when he saw one and be able to snap it up if it became available. Even as a Form Four schoolboy, Warren saw what he was doing as a business.

"I kept a set of accounts. I was selling and buying hardware and it was important to know where the money was going and account for it, rather than just take the profits and spend them. I had to know how much I was making. So it was exciting because I knew it was a business."

Later, he began investigating domain names. He wanted to get his own domain name because everybody had a standard e-mail address. He wanted to get a nice e-mail address saying @warrentan.com.

After some research, Warren found that companies selling domain names had to be registered with the Internet Corporation for Assigned Names and Numbers (ICANN), the company that provides domain names. Moreover, there were very few local companies in the business. Seeing the healthy profit margin to be made, Warren applied to be a licensed registrar with ICANN and was accepted. That’s how his current business was born in 1999.

In that same year, Warren took up a computer science degree at the University of Warwick, Britain. His business was still developing but being an Internet-based business, his geographical location was not an issue. He struggled to balance education, work and a social life. At the same time, he found out that computer science was not what he’d expected it to be.

"It was very in-depth and focused a lot on programming. If you want to spend the rest of your life programming and developing software, then it’s great. But I discovered I’m more of a businessperson. IT is just a field that I use to expand my business. So I told myself it was probably a waste of time to complete the course," Warren admits.

However, he made no rash decisions. Upon completing his first year, Warren applied to the university to defer his studies for a year. He then came back to Malaysia to concentrate on getting his business up and running, branching out into web hosting as well, which he describes as a "natural progression" since most domain name registrars also sell web hosting.

Four years have now passed and he’s still deferring his degree.

"I’ve discovered that it’s not important for me personally. The experience and what I learn by working is a lot more meaningful than a paper degree. To me, it was a risk worth taking. So far so good."

"This (lack of formal education) gave me an open mind. It allowed me to think out of the box instead of thinking the way people are trained to think. As a result, I’m not constrained by the usual procedures and the way people do things. My methods of doing business were radical during that time."

Warren also had the benefit of financial advice from his father, a banker.

"My dad didn’t understand the business but he did understand how important it was to be prudent with finances, to make profits and keep your accounts clean. He imparted to me the values of working hard for what you have."

Warren ran his business from home. The low overheads made the business profitable from day one. Expenses were mainly limited to telephone and Internet bills as well as the monthly cost of leasing servers to provide web hosting.

In May 2000, Warren incorporated his company with an RM100,000 paid-up capital, believing that a private limited company would gave the business a greater ring of authenticity. Shareholders comprise various family members.

Warren points out that people will not stop using e-mail or maintaining business websites, so there’s no reason to for customers to leave unless they are dissatisfied with the service. He foresees his company moving on into web design, web applications and development. But building up a company is not easy he gets only six hours of sleep on most days, and works every day.

"There’s always so much to do. But at the same time, it’s never been a job. Of course there are days when things go wrong and get stressful, but that’s part and parcel of working. It’s fun. And it’s nice to have a bit more freedom, to be the boss."

And it’s also nice to be able to afford your dream car - Warren purchased his BMW 3 series last November.