Here I am in Hong Kong some 49 years after I first arrived here. I wrote about that experience recently here. In looking for photos to use with this post, I found some that were taken in 1963 by a family that actually traveled on the President Cleveland,the ship on which I worked. I was able to make contact with Tim Brown who published the photos. He was eleven years old when he sailed on that ship at the same time I served on it.
The next time I came to Hong Kong was about 30 years later, 1992. I was working for Intel at the time. Of course by 1992, a lot had changed. I remember there was still an electronics industry in Hong Kong then. And it was still a place to buy cheap goods. But in the late 90s, my relationship with Hong Kong changed dramatically. As readers of this blog will know, my major activity (and professional accomplishment) was driving the development of residential broadband utilizing my position as Vice President of Business Development for Intel Corp. This was accomplished in the US and in many other parts of the world by working with the cable industry to utilize their infrastructure to provide two way high speed communications to homes. At the same time, we worked with phone companies through out the world to use their infrastructure to provide broadband (DSL). While the combination of cable and telephone infrastructure reached much of the developed world, it could not reach most of the developing world. That is when I became interested in Satellite communications. An example of this is a joint venture which I put together between Intel and SES Astra (Europe’s largest Satellite Operator) to provide broadband to be delivered to PC’s via Satellite.
Sometime in late 1996 I was asked by my friend, the late John Evans, to meet Richard Li, the son of Li Ka-Shing, one of the riches and most powerful men in the world. When I meet Richard he was about 30 years old and already a billionaire in his own right having created Star TV in 1990 and selling it to Rupert Murdoch in 1993. Richard had a strong interest in technology although he did not really know much about it. It turned out that he was considering acquiring a startup called WebTV and wanted my advice. WebTV was founded by Steve Perlman, a serial entrepreneur that I have known for about 20 years. It made sense in a way for Richard but at that time, I was convinced it would not succeed in the market. It was too early for Interactive TV and it still has not really happen. Soon after, and lucky for Steve, WebTV was bought by Microsoft for about 400 million dollars. Steve is now the founder and CEO of OnLive.
A few months after that, I was contacted by Michael Johnson and George Chan both of whom played key roles in the creation and operation of StarTV. Michael was the “idea guy” and George was the “get it done guy”. Both still worked for Richard Li and they were figuring out what their next moves might be after Richard’s non-compete lapsed. One idea was to bring the Internet to China. This was the mid 90s and there was very little Internet penetration in China. Strange to think that less then 20 years later, there would be more Internet users in china than any other country in the world. Michael wanted to take advantage of the cable TV systems that were installed in cities throughout China. The idea was to use satieties to download content into servers that would be located in these cities. The cable TV structure would be used to connect homes to the server. The device at home would be similar to WebTV. The company providing do the service would do the actual programing. The cable operator would get paid for the use of their infrastructure. It was kind of a hybrid of TV and interactivity. We were going to support some amount of upstream (to the Satellite) bandwidth so that email could be sent an received. I know it probably sounds like a dumb idea but please think about the mid 90s and China. Richard’s company, Pacific Century CyberWorks and Intel formed a joint venture called Pacific Convergence Group (PCC). We set up a development organization in California. Michael Johnson came over to lead the effort.
About a year later, I resigned from Intel (April 1999) to start up The Avram Miller Company which was pretty much a way to brand me. That name had come to me after attending the Allen& Co Sun Valley Conference for seven years. There was always a list of the companies present. One of those companies was The Walt Disney Company. Herb Allen kindly invited me to attend the conference in July 1999 even though I was no longer with Intel. I loved the listing of companies. The Avram Miller Company was right above The Walt Disney Company.
Just before I left Intel, I told my plans to leave to a select number of CEO’s in the companies I was working closely with. I had lead Intel’s investment in CMGI in December 1997 and was a board observer. When I informed the then CEO of CMGI, Dave Wetherell that I was leaving Intel, he asked me to join his board as an independent director which I did. When I told Richard I was leaving Intel, I mentioned I would be joining the CMGI board. He then asked me to join his board as well. Frankly, I was not too keen on joining his board. While I had developed a close relationship with Dave Wetherell, I did not feel very close to Richard and was concerned that I would not have a lot of impact. This turned out to be correct. But I was also intrigued with the idea of have my own global reach. Richard asked me what it would take financially to get me to join. I was pretty “hot” in those days. So I was asking for a lot. So I said, I wanted 0.5% of the company in options and 500k dollars. And that is what we agreed to. I actually asked for the cash because I had no idea how things worked on the Hong Kong stock exchange and was not sure if I would actually ever be able to get my options.
So this is what happens next: Richard, acquired this public company and renames it as the Pacific Century Cyberworks (PCCW). Intel invest $50 million into PCCW and eventually folds PCC into that company as well. Intel then folds in the joint venture. I am not yet on the board. I am advising Richard and we do a number of things including setting up a venture capital group within PCCW. I introduce Dave Wetherell to Richard Li and they decided to have each company invest in the other and enter into a number of strategic relationships. By that time, I also joined the board of World Online (based in the Netherlands) , which was one of Europe’s leading Internet Service Providers. I liked having the Asian, European and USA reach. It was a critical part of the strategy for my own company.
For a number of reasons, my appointment to the board was delayed. One of the key reasons is that the Hong Kong Stock Exchange requires that my compensation be appraised by an independent company to determine if it is was fair and reasonable. In the meantime, PCCW stock is going crazy. The strike price for my options where set at about $2.40 (Hong Kong Dollar). But the company is ridding the Internet bubble of the 1999. Soon, the stock is trading up in the 20s. I believe that at one time PCCW might have been the most valuable Internet stock in the world.
My stock options were valued at 90 million dollars. One of the major HR companies did the Appraisal and sure enough, they agreed that it was fair and reasonable compensation. I wish I could find their report. Of course, by the time all this work was done and my option package was finally approved at a stock holders meeting, the bubble burst and my options were underwater. I never realized a dime from them.
I continued on the board for a number of years. A long the way, PCCW acquired the phone company of Hong Kong (Cable and Wireless HKT) for 28 billion dollars. The Company was able to buy that asset with Internet Dollars. So there I was 36 years after sailing into Hong Kong as an 18 year merchant seaman, serving as a board member the Hong Kong Phone company, meeting with the top officials of Hong Kong including the Chief Executive.
PCCW continues to function and is the leading provider of broadband in Hong Kong. Richard Li is still chairman of PCCW. He tried to take it private recently but was prevented by Hong Kong Stock Exchange. George Chan is he managing director. Michael Johnson left PCCW many years ago and lives in South Africa. As for me, well those days are over. And I am stopping in Hong Kong my wife Deborah on our way back from Thailand. I can still afford a limo from the Airport and an amazing hotel room with a beautiful view of an amazing city that has played such an interesting role in my life.