Wishing and hoping
The wealthy investor could see the potential: before him was a young man — and an idea — whose time had come.
DOZENS of would-be entrepreneurs enter the office of Melbourne’s wealthy Liberman family each year, hoping to persuade them to invest in their businesses.
Nine out of 10 walk away empty-handed.
But when a 28-year-old Vietnamese refugee named Huy Truong made his pitch in June last year for money for his start-up Internet retailer, wishlist.com.au, he left a lasting impression.
“We could see from the hunger in his eyes that he wanted to do everything necessary to make this work,’’ recalls Josh Liberman, who oversees the family’s e-commerce investments in its $1 billion-plus business empire.
Liberman says Wishlist’s founders, Huy and his sister Jardin, 30, had the right attitude: that hard work was the key to success.
“This would be their lives and they would eat, sleep and breathe Wishlist,’’ he says.
There was something more. Josh Liberman could see similarities between Huy Truong’s raw ambition and that of his grandfather, Jack, who had arrived penniless in Australia from a Soviet gulag in 1949.
The Libermans, who were later joined as investors in Wishlist by the Smorgon and Besen families, did not build their fortunes by backing duds.
Which means Wishlist — launched a year ago by Huy and Jardin — must be doing something right.
It is early days yet and the first profits are still at least a year away, but Wishlist has shown all the signs in its first 12 months of becoming Australia’s premier online retailer.
It attracts between 3 million and 5 million “hits’’ a month and has experienced 800 per cent growth in sales and page visits. Full-time staff numbers have increased from six to 85.
Wishlist’s success has the big bricks-and-mortar retailers sitting up and taking notice, belatedly scrambling to emulate the concept.
In the rare moments when they have time for reflection, Huy (pronounced Hugh) and Jardin marvel at how far Wishlist has come in 12 short months.
But Wishlist’s genesis goes back much further than one year. It really began in 1978 with a harrowing five-month voyage on a leaking fishing boat which carried the Truong family from Vietnam to Australia.
It was helped along by the racist insults heaped on the young children in the school playgrounds of their new country.
And it is a product of the thwarted ambitions of Huy and Jardin’s father, a successful entrepreneur and businessman in Saigon who had everything taken from him when the Viet Cong came to power.
“Our Dad’s second entrepreneurial venture was to take his whole family to Australia and try to re-create a set of opportunities that were no longer available in Vietnam,’’ Huy says, leaning forward in his chair at the conference table in Wishlist’s humble West Melbourne warehouse-cum-office.
“He put all his eggs into his children, so to speak, and he then just worked day shift, night shift, whatever it took to put his kids through school.
“As a result he felt that one day it ought to end up with another family business — started by his children.’’
Developed from an idea so simple that it falls into the “why didn’t I think of that?’’ category, Wishlist sells gifts over the Internet.
Log on to the Web site and type in a few essential details — the recipient’s age, gender, interests — and the Wishlist service can select an appropriate gift that a day or so later will arrive gift-wrapped at the front door.
The product range of 4000 items is still growing, from fashion and beauty products to games, toys, sporting equipment and corporate gifts.
In the jargon of the dot.com world, it is the killer B2C (business-to-consumer) concept: perfect for the cash-rich but time-poor shoppers of the new millennium.
“We see Wishlist potentially as a global company,’’ says Liberman, whose family in the 1990s was an early investor in Australia’s most successful dot.com business to date, LookSmart.
WORLD domination was the farthest thing from their minds when Huy and Jardin launched Wishlist last July in a poky third-floor room in a building in Victoria St, North Melbourne. A shaky ping-pong table was the shared company desk.
“Our original motivation to start a dot.com was not about wealth creation,’’ Huy says. “It was always about ‘Let’s see, what the hell — it would be more of a failure not to try something than to try and fail’.’’
To properly understand the Wishlist story, we need to go back to Saigon, to the dying days of French colonial Indochina.
Huy and Jardin’s father, Minh, worked his way up from sweeping floors in a Saigon warehouse at the age of 16 to running and owning the business, transforming it into an import-export company that turned over more than $20 million a year.
But Minh Truong gambled badly on the outcome of the Vietnam War. When the tide turned in favor of the communists from the north, Minh was marked as a capitalist enemy of the state. His wealth and business were confiscated overnight.
“What had defined his success was a strong business instinct combined with a really strong work ethic and a sense of the very traditional male role of being the provider,’’ Huy says.
“When all those things were stripped from him and he came out to Australia, it was an incredibly difficult time for him. Part of what Wishlist is is in no small part due to that experience.’’
On a dark night in May 1978, the eight members of the Truong family — Minh, wife Du, daughters Dinh, 9, and Jardin, 8, sons Huy, 7, and Cam, 2, and an uncle and aunt — packed a few precious belongings in a cane basket and pushed off from the coast near Saigon in a 29m fishing boat packed with 41 people.
They faced constant risks of pirate raids and falling prey to sharks.
After almost five months at sea, the refugees made it to East Timor, tantalisingly close to Australia. But three times their crossing was halted by tempestuous weather.
In desperation, Minh wrote a pleading letter to the Australian Embassy in Jakarta, and within days the family were accepted.
Their first home in Australia in October 1978 was a migrant hostel in Nunawading, but they soon settled in Ringwood, where they were the only Asian family in their neighborhood.
While his children were fighting battles against racism in the playground, Minh Truong was confronting his own demons as he found work on the production line at a packaging factory.
“From 1978 right through to ‘83-’84 was a period of enormous frustration and as a result he was an angry person,’’ Huy says.
“To go from being a very successful businessman with significant wealth to making boxes, it was tough for him.’’
Their father had harbored dreams of starting a business in Australia, experimenting with drying abalone for export, but all his efforts came to nought.
Meanwhile, Jardin had left university to set up the Australian operations of women’s clothing label Kookai, then rose to general manager of another clothing chain, Ojay.
Huy worked in Melbourne for Wall St bank J.P. Morgan, then for Boston Consulting Group (BCG), who paid for him to study for an MBA at Harvard University in the US.
But even as he climbed the corporate ladder, Huy was plagued with doubt.
“Dad had said to me that if I went back to BCG he would think I’d failed because I wouldn’t have fully utilised the experience from Harvard to do something else,’’ Huy says.
One day at Harvard in late 1996, Huy went to a lecture by Jeff Bezos, an unknown drop-out from Wall St who had recently launched an online bookstore called Amazon.com. The lecture theatre was mostly empty, but Huy was captivated by the possibilities he saw in Bezos’ vision of the Internet as the vehicle for a new style of retailing.
Soon after returning to Melbourne in mid-1998, Huy dropped the bombshell on BCG that he was quitting.
Having chosen the Internet as their method of selling, the Truong family threw around different ideas before settling on the Wishlist concept.
Everyone got involved. Jardin and her father went to a trade show in Hong Kong to glean ideas. Dinh, an IT consultant, came on board with her technical expertise. Cam, a solicitor, gave legal advice. Huy’s wife, Cathy, a management consultant, and Jardin’s husband, David, a multimedia and graphic design expert, completed the team. The business was kick-started by a State Government grant of $100,000, the family’s own savings and several other private investors who put in more than $1 million.
“Our beginning was very humble,’’ Jardin says.
Early problems were fortunately ironed out before Christmas, because it was then that the business took off, recording sales of $500,000 in December alone. Buoyed by that success, Wishlist raised $15 million from a group of blue-chip investors earlier this year to increase infrastructure and staff levels, and to provide working capital until the business starts making a profit.
Huy says that by every benchmark, the company is ahead of where it had planned to be at this stage.
But the Truongs are not rushing out to spend any new-found wealth. And they wisely avoided the stock-market frenzy that saw so many underprepared dot.commers rush to list and raise money from punters late last year and early this year, only to be badly bruised when the bubble burst in April.
As a keen student of business history, Huy has no doubt that many dot.com retailers are still to fall by the wayside — a fate he is determined Wishlist will avoid.
Even his corporate hero, Jeff Bezos of Amazon.com, is experiencing difficulties. And both in Australia and overseas, several high-profile Internet retailers have already burnt all their cash without making a profit.
This has been just the wake-up call the industry and investors needed, Huy says.
But even in the unlikely event that it all falls apart tomorrow, Huy and Jardin feel they could walk away with the satisfaction of having fulfilled the dream first nurtured on that long boat trip from Vietnam.
Published in Herald Sun Weekend: Saturday, August 5, 2000