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Forbes Asia – October 2017

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INDIA’S RICHEST GET MUCH RICHER
ƫĂĀāĈƫđƫċċ
GOING
FOR THE
GREEN
SI WOO KIM’S
CHARGE SIGNALS
ASIAN FUTURE FOR PGA;
LADIES’ ERA IS
ALREADY HERE
AUSTRALIA...............A $12.00
CHINA....................RMB 85.00
HONG KONG................HK $80
INDIA............................RS 375
INDONESIA............RP 77,000
JAPAN.................¥1238 + TAX
KOREA........................W 9,500
MALAYSIA...............RM 24.00
NEW ZEALAND.......NZ $13.00
PAKISTAN....................RS 600
PHILIPPINES..................P 260
SINGAPORE..............S $12.50
TAIWAN......................NT $275
THAILAND......................B 260
UNITED STATES........US $10.00
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For important information on PineBridge, please visit https://www.pinebridge.com/global-disclosure.
CONTENTS — OCTOBER 2017
VOLUME 13 NUMBER 10
S PAGE 68
“I REMEMBER
WATCHING THE 2009
PGA CHAMPIONSHIP
WHEN Y.E. YANG
BEAT TIGER.”
10 | FACT & COMMENT // STEVE FORBES
Why is the key to prosperity ignored?
COVER STORY
68 | BIG HITTER
Si Woo Kim and his Korean colleagues lead the way as golf flourishes in Asia.
BY MONTE BURKE
—SI WOO KIM, 22-year-old star
South Korean golfer
COMPANIES, PEOPLE
12 | BEYOND THE I.T. ADVERSITY
Cognizant CEO Francisco D’Souza sees bluer skies for India’s troubled tech sector.
BY HARICHANDAN ARAKALI (FORBES INDIA)
16 | NEXT TYCOONS: “BANKING IS EXCITING”
A family of entrepreneurs has turned KBZ into a finance powerhouse in Myanmar.
BY RON GLUCKMAN
19 | LAWRENCE HO’S WAGER
The Macau mogul is betting that a huge wager in Japan will pay off.
BY PAUL ARMSTRONG
20 | SECOND ACT
After building and selling a top New Zealand wine label, Kim and Erica Crawford started over.
BY JENNIFER SCHULTZ WELLS
23 | HEME ON RYE
A veggie burger could be the solution to Asia’s food-security dilemma.
BY PAMELA AMBLER
24 | BRICKS AND CLICKS
Entrepreneur Yael Aflalo turned a visit to China into a fashion philosophy.
BY KATHLEEN CHAYKOWSKI
COVER PHOTOGRAPH BY
MATTHEW MAHON FOR FORBES
2 | FORBES ASIA OCTOBER 2017
UNLESS OTHERWISE SPECIFIED, ALL TOTALS AND PRICES EXPRESSED IN OUR STORIES ARE IN U.S. DOLLARS.
CONTENTS — OCTOBER 2017
VOLUME 13 NUMBER 10
28 | THE POINT OF ALL RETURNS
Optoro builds its business on America’s mountain of rejected merchandise.
BY SUSAN ADAMS
31 | Q&A WITH STANLEY MCCHRYSTAL
The ex-U.S.-general on arguing with your team and eating one meal a day.
BY RICH KARLGAARD
34 | A CUT ABOVE
It’s always been quality over quantity at U.S. beef provider Greater Omaha.
BY CHLOE SORVINO
40 | THE WAY WE WORK
Thanks to some help from Masayoshi Son, WeWork is a $20 billion startup.
BY STEVEN BERTONI
45 | AND THE WAY OTHERS WORK
Naked Hub and others take on WeWork in Asia.
BY PAMELA AMBLER
46 | THE RIGHT CHEMISTRY
Incyte’s secret: embracing an older age of pharma.
BY MATTHEW HERPER
INDIA’S 100 RICHEST
50 | THE LIST
No. 1 Mukesh Ambani added a staggering $15.3 billion to his net worth.
BY NAAZNEEN KARMALI
54 | STEPPING UP AND STEPPING OUT
Some next-gen scions join the family business, while five heiresses go their own way.
BY ANURADHA RAGHUNATHAN
S PAGE 74
“I LOVE TO SELL.”
—ZANG TOI, couturier to the stars
62 | WAITING IN THE WINGS
Ten interesting billionaires who are not wealthy enough to make our list. Maybe next year.
FORBES LIFE
74 | A FLAIR FOR FASHION
Zang Toi came to New York from Malaysia and has dressed glamorous women for 20 years.
BY CHEN MAY YEE
78 | THE CARTIER TANK
From the wrist of General John Pershing to Kim Kardashian.
BY MICHAEL SOLOMON
79 | GADGETMAN // BEN SIN
Stay away from potholes when riding Ancheer’s teeny bike.
80 | THOUGHTS
On work.
X PAGE 20
“WE KNEW EXACTLY
WHERE WE WERE
GOING.”
—New Zealand winemakers
KIM & ERICA CRAWFORD
4 | FORBES ASIA OCTOBER 2017
FORBES ASIA
SIDELINES
Editor Tim W. Ferguson
Editorial Bureaus
Beijing Yue Wang
Shanghai Russell Flannery (Senior Ed.); Maggie Chen
India Editor Naazneen Karmali
Contributing Editors
Bangkok Suzanne Nam
Chennai Anuradha Raghunathan
Hong Kong Shu-Ching Jean Chen
Jakarta Justin Doebele
Melbourne Lucinda Schmidt
Perth Tim Treadgold
Singapore Jane A. Peterson
Taipei Joyce Huang
Vietnam Lan Anh Nguyen
Columnists Jean-Pierre Lehmann, Ben Sin
Production Manager Michelle Ciulla
EDITOR-IN-CHIEF
Steve Forbes
CHIEF PRODUCT OFFICER Lewis D’Vorkin
FORBES MAGAZINE
EDITOR Randall Lane
EXECUTIVE EDITOR Michael Noer
ART & DESIGN DIRECTOR Robert Mansfield
FORBES DIGITAL
VP, INVESTING EDITOR Matt Schifrin
VP, DIGITAL CONTENT STRATEGY Coates Bateman
VP, PRODUCT DEVELOPMENT Salah Zalatimo
VP, WOMEN’S DIGITAL NETWORK Christina Vuleta
ASSISTANT MANAGING EDITORS
Frederick E. Allen – Leadership
Loren Feldman – Entrepreneurs
Janet Novack WASHINGTON
Michael K. Ozanian SPORTSMONEY
Problematic Pakistan
T
wo fateful Islamist uprisings shook the world
in the late 1970s. The
more recognized one was led
by Ayatollah Khomeini in Iran.
The other was General Zia-ulHaq’s coup d’état in Pakistan,
which turned the long creep
away from the country’s secular
origins into a gallop. During
Zia’s reign, Pakistan’s nuclearPM Abbasi emerged from latest political scrum.
bomb aims were realized, and
the world has been an edgier place since.
Today it’s as hard as ever to gauge Pakistani progress toward being a modern,
peaceable state. The timeless animosity with Hindu India shows little abeyance,
aggravated as always by the handling of Kashmir and no doubt fueled by the rise
of fundamentalists in Indian politics. Superpower relations continue their historical influence: The U.S., weary of Islamabad’s perceived duplicities (exemplified by
the quartering of Osama bin Laden), has snubbed its role in Afghanistan while
China—a friend for decades, as a foe of India—is pouring billions into Belt &
Road investments.
Pakistan’s long-underwhelming economy has shown renewed zest (a record
five domestic companies appeared on our Best Under A Billion list this year), but
that masks imbalances: A surplus of imports threatens the rupee and may trigger
another IMF bailout.
Behind the long-term lag in Pakistan’s GDP lies the intrusion of the military
into internal affairs, regional rivalries (Sindh versus Punjab), the waste of human
development in Zia-fostered Wahhabi madrassas and the never-ending strife among
the nation’s political clans. Lately this last factor has brought the removal of prime
minister Nawaz Sharif in favor of his party’s Shahid Khaqan Abbasi—all the while
trolled by opponent Imran Khan, a verbal flamethrower against the Americans.
Abbasi made the rounds at September’s UN meetings in New York, advancing
the familiar Pakistani line that everything, including security of the nuclear arms,
is just fine, Jack. A long, lamentable record of instability, punctuated by the part
that Pakistan and China played in North Korean proliferation, does not attest to
the PM’s pat assurances. Results will speak louder.
DEPARTMENT HEADS
Mark Decker, John Dobosz, Clay Thurmond
Avik Roy OPINIONS
Jessica Bohrer VP, EDITORIAL COUNSEL
FOUNDED IN 1917
B.C. Forbes, Editor-in-Chief (1917-54)
Malcolm S. Forbes, Editor-in-Chief (1954-90)
James W. Michaels, Editor (1961-99)
William Baldwin, Editor (1999-2010)
6 | FORBES ASIA OCTOBER 2017
Tim Ferguson
Editor, forbes asia
globaleditor@forbes.com
MUHAMMAD REZA/ANADOLU AGENCY/GETTY IMAGES
Editorial Director Karl Shmavonian
Art Director Charles Brucaliere
Senior Editor John Koppisch
Wealth Lists Editors Luisa Kroll, Kerry A. Dolan
Photo Editor Michele Hadlow
Statistics Editor Andrea Murphy
Research Director Sue Radlauer
Online Editor Jasmine Smith
Reporter Grace Chung
Intern Yinan Che
FORBES ASIA
READERS SAY
CEO/ASIA, FORBES MEDIA
PRESIDENT & PUBLISHER, FORBES ASIA
William Adamopoulos
SENIOR VICE PRESIDENTS Tina Wee, Serene Lee
EXECUTIVE DIRECTOR Eugene Wong
SENIOR DIRECTOR, REGIONAL SALES Lawrence Jang
SENIOR DIRECTOR, MARKETING & AD SERVICES
Aarin Chan
DIRECTOR, CIRCULATION Eunice Soo
DIRECTOR, EVENTS & COMMUNICATIONS Janelle Kuah
DEPUTY DIRECTOR, EVENTS & COMMUNICATIONS
Audra Ruyters
DEPUTY DIRECTOR, CONFERENCES Jolynn Chua
DEPUTY DIRECTOR, CIRCULATION Pavan Kumar
SENIOR MANAGER, CONFERENCES Quek Xue Wei
SENIOR MANAGER, MARKETING & RESEARCH Joan Low
OFFICE MANAGER/ASSISTANT TO THE CEO/ASIA
Jennifer Chung
AD SERVICES MANAGER Fiona Carvalho
AD SERVICES MANAGER-DIGITAL Keiko Wong
MANAGER, EVENTS & COMMUNICATIONS Melissa Ng
CONFERENCE MANAGERS Clarabelle Chaw, Cherie Wong
ASSISTANT MANAGER, CONFERENCES Isabel Wong
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FORBES MEDIA
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GENERAL COUNSEL MariaRosa Cartolano
PRESIDENT, FORBESWOMAN Moira Forbes
SENIOR VP, CORPORATE COMMUNICATIONS Mia Carbonell
0+!.ƫĂĀāĈƫđƫ+(1)!ƫāăƫđƫ1)!.ƫāĀ
CONVERSATION
OUR STORY about Fab 50
pharma company Yunnan
Baiyao (“The Picture of
Health,” September, p. 23)
prompted “Melanie” to post:
“I am happy to hear that
YNBY Corp is doing well. I
believe that Yunnan Baiyao
powder is extremely effective, has many applications
and should be readily available in the U.S. Unfortunately, the FDA sees differently.
I’d love to see someone do a
story on all traditional Chinese medicines that actually
work yet have to be labeled as
a ‘dietary supplement’ in the
U.S.” In its Web posting headlined “Innovators, Rebels
and Rogues,” Esquire Philippines had a mildly dark tone when analyzing the
young members of our Philippines 50 list (p. 74), who owed their wealth to
“hard work, some smarts, luck—and a little bit of cunning.”
THE INTEREST GRAPH
Our lists from last issue grabbed the most eyeballs:
Fab 50: Asia’s Best Big Public Companies 2017
10,128 page views
Philippines’ 50 Richest 2017: A Lucky Few Have Rodrigo Duterte to Thank
FORBES ASIA (ISSN 1793 2181) is published monthly with additional special issues
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China’s New Ivy League Incubators—A Victory for Humanities Majors?
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8 | FORBES ASIA OCTOBER 2017
Taiwan Is Slowly Getting Help From Around Asia to Resist China Economically
5,519
Villas Complete With Nuclear Bomb Shelters in Chiang Mai, Thailand
3,862
“Boutique services
are helping to
change not only how
students approach the
application process
but also what they
study when they get
to college.”
“The new
Southbound
Policy will likely
provide some
support to Taiwan’s
competitiveness.”
FACT & COMMENT
“With all thy getting, get understanding”
WHY IS THE KEY TO PROSPERITY
IGNORED?
BY STEVE FORBES, EDITOR-IN-CHIEF
HERE’S A BOOK for the ages. With Gold:
The Final Standard (CreateSpace Publishing,
$14.99)—and his two previous volumes1—
Nathan Lewis has established himself as one
of history’s most formidable and correctthinking economic writers, joining the ranks
of Friedrich von Hayek, Ludwig von Mises,
Henry Hazlitt and a handful of others. Lewis
understands the subject of money better
than almost any other observer today, demolishing one harmful myth after another
that plagues economic policy and has shackled the U.S. and most of the rest of the world
with subpar growth.
The key to unlocking a great boom (along with a low-tax
regime) is stable currencies. Without sound money we will be
hurt by more dangerous and unnecessary crises à la 2008–2009
and subsequent limp recoveries, which are slowly eating away at
the legitimacy of our liberal democracies.
Why is correct monetary policy so fundamentally important? As Lewis writes, a modern economy is ultimately “a vast
network of cooperation . . . in which hardly anything is created
without combining goods, services, labor and capital from all
over the world. . . . The network of cooperation is organized
through the use of money, with information transmitted via
prices, interest rates, profit and loss. These seemingly simple bits
of information direct all economic activity.”
Unstable currencies are like viruses in your computer—they
corrupt those “bits” of information. Destructive bubbles result,
such as the housing frenzy preceding the 2008–2009 crisis.
In 2001, a barrel of oil cost little more than $20. Then the U.S.
Treasury Department and the Federal Reserve deliberately
began weakening the dollar in the mistaken belief that this
would stimulate more exports and economic growth. Petroleum rocketed to more than $100 a barrel. Other commodities
behaved in similar fashion. These surges didn’t come about
because of natural demand but because of a declining dollar.
Nevertheless, most people took to heart the message that the
rising prices seemed to convey: All these things were becoming dearer. The misinformation conveyed by prices resulted in
hundreds of billions of dollars being misinvested, particularly
10 | FORBES ASIA OCTOBER 2017
in the building of houses.
Everyone understands the basic need for
fixed weights and measures in daily life: the
amount of liquid in a gallon, the number of
ounces in a pound, the number of minutes
in an hour. None of these amounts fluctuate; they are unchanging.
Just as we use a scale to measure something’s weight, we use money to measure
the value of products and services. If the
measuring rod itself becomes unstable,
the smooth functioning of an economy is
disrupted, just as our lives would be if the
number of minutes in an hour constantly fluctuated.
What’s the best way to achieve a stable currency? By linking the currency to gold. Obviously, with gold we’re not going
to get a precise measurement, but as Lewis demonstrates in
his concise and deeply learned history, gold has maintained
its intrinsic monetary value better than anything else for 5,000
years. Silver did the same until the mid-1800s, but for several
reasons it then drifted decisively away from paralleling the
value of gold, which is why most of the major countries of the
world moved solely to a gold standard.
The fluctuating price of gold today doesn’t reflect the real
value of the yellow metal but, rather, the fluctuating value of
various currencies. Lewis strips away all the mumbo jumbo
about an effective monetary policy and the mountainous misunderstandings about a gold standard. You tie your currency
to gold at a fixed weight. (For decades the U.S. dollar was fixed
at 1/35th or $35 an ounce.) The mission of monetary policy
is to keep the currency at that ratio. Period. (A central bank
might engage as a “lender of last resort” to sound banks during a panic, but the loans would be quickly repaid.)
Lewis chronicles how from time immemorial there has
been a contest between advocates of stable money and those
who, for a variety of reasons, want to toy with it. For centuries
there have been writers advocating the virtues of juggling with
currency values as a means of promoting more prosperity and
power for the state. Adam Smith and others blew up this nonsensical notion (as well as other self-destructive ideas, such
as restricting trade across borders). The belief that a currency
should have a fixed gold value (the pound/
gold ratio remained, £3.89 per ounce, for
more than two centuries) became widely
accepted, thanks to the roaring economic
success of Britain, starting in the 1700s,
and then of the U.S. after Alexander Hamilton’s sound-money reforms under George
Washington.
By the time of World War I, just about
every self-respecting country was on the
gold standard—or knew it should be.
Thanks largely to money being a stable
and thereby nondisruptive tool, the world
economy expanded on a scale that had
never before happened.
It seemed all those funny-money ideas
had been thoroughly discredited, the latest
instance being the several defeats of Democratic candidate William Jennings Bryan,
who ran for the U.S. presidency on a proinflation, anti-gold platform.
Then came the Great War and the
gargantuan growth of government to wage
what countries felt were life-and-death
struggles. But as Lewis shrewdly notes, even
before that conflict, people—including the
Brits—were beginning to lose sight of what
made the gold standard work. The seeds of
confusion were being sown.
After the war, the gold standard eventually reemerged (which Lewis, in a brilliant
bout of research, demonstrates was remarkably similar to the prewar version) but was
then blown away by the Great Depression.
In laying out what really happened during
these controversial years, Lewis disproves
a number of misconceptions, among them
that the gold standard was a cause of the
terrible global downturn, when in fact it was
a victim of it, and that the Federal Reserve
brought on or deepened the crisis.
The causes of the Depression were basic:
The U.S. instigated a calamitous global trade
war with the Smoot-Hawley Tariff Act,
which imposed massive taxes on countless
imports that triggered similarly destructive
retaliations from other nations. Incredibly,
governments responded to the resulting
contraction with major tax increases (the
U.S. even imposed a tax on writing checks)
that deepened the slump. Then, led by Britain, countries engaged in competitive devaluations that ended up retarding recovery
and poisoning international relations.
Lewis gives searing insight into the massive blinders that hobble economists to this
day. They see the world through the lenses
of PIM—prices, interest rates and money.
Astonishingly, when analyzing the causes of
economic events such other critical factors
as taxes, regulations and culture escape their
attention. This blindness to reality is why so
many governments to this day rely on central banks to rev up their economies.
The Depression gave new life in modern
garb (mainly useless, mind-numbing but
impressive-looking mathematical formulas)
to the ancient idea of governments changing
currency values to artificially boost growth.
John Maynard Keynes added the additional
tools of controlling interest rates, government spending, taxes, tariffs and capital
controls to keep economies on track.
At a conference held by Allied nations
in 1944 at Bretton Woods, New Hampshire, to design a postwar monetary and
trade system, despite Keynes’ initial opposition members opted at the behest of the
U.S. to go with a new gold standard once
hostilities ended. All currencies would be
tied to the dollar at fixed rates, and the
dollar would be tied to gold at
$35 an ounce.
Lewis perceptively pinpoints a fatal contradiction in
play that would eventually destroy the Bretton Woods gold
standard and then burden the
world with subpar economic
growth. After the horrors and
chaos of the Depression years,
countries yearned for currencies with fixed values, which is
what Bretton Woods was designed to provide. But most governments also wanted to
engage in Keynesian currency and economic (mis)management. This usually meant
a “loose” monetary policy to create extra
money in the belief that it would boost economic growth, especially before an election.
Of course, easy money meant the country’s
currency would wobble against the dollar
and gold. Nations employed all sorts of
nostrums, such as restricting the amount of
money one could take out of the country, to
preserve a currency’s official value and then
would capitulate with a devaluation.
Amazingly, policymakers didn’t
grasp—and still don’t—that a stable currency meant focusing monetary policy to
do just that and nothing else.
Until the 1970s, the U.S. wanted to keep
the dollar fixed to gold but never realized
this was easy to do if you conducted monetary policy correctly: If the dollar weakened
against gold, you reduced the basic money
supply, and vice versa if the greenback went
up against gold. Instead we resorted to
capital controls, browbeating the Germans
to pay more for the upkeep of U.S. troops
stationed there and taking other actions to
“shore up” our balance of payments.
The U.S. needlessly and heedlessly blew
up the gold standard in the early 1970s
without really intending to do so. This despite the fact that during the Bretton Woods
era the growth in American industrial
production was just about the best in U.S.
history. The result was a decade of rampant
inflation, economic stagnation and political
strife. In the 1980s, Ronald Reagan allowed
the Federal Reserve to end the terrible
inflation, but his desire to restore a gold
standard was blocked by Milton Friedman
and other eminences.
The 1980s and most of the
1990s saw the U.S. pursuing
a semi-sensible monetary
policy. This, combined with
Reagan’s tax cuts and his Cold
War-winning policies, allowed
the U.S. and the world to enjoy
an economic boom. Alas, with
economists and government
officials woefully ignorant of
the necessity of a sound dollar,
the U.S. gave in to the siren song of a cheap
dollar in the early 2000s. Post 2008–2009
the Fed compounded this felony with all
sorts of destructively distorting actions that
have given us a decade of punk economic
performance.
Policymakers everywhere still adhere
to the fallacy that central banks can give
us lasting prosperity. A read of this book
would cure them of that fakery forever.
1Gold: The Once and Future Money
(Wiley); Gold: the Monetary Polaris
(CreateSpace Publishing). F
OCTOBER 2017
FORBES ASIA | 11
FORBES ASIA
COGNIZANT
BEYOND THE
I.T. ADVERSITY
Cognizant’s U.S.-anchored chief sees bluer skies
amid the cloud for India’s troubled tech sector.
BY HARICHANDAN ARAKALI
T
he accelerating shift to cloudbased IT, greater adoption of
automation and the Trump
administration’s stance on immigration have combined to
make the future of IT outsourcing providers in India uncertain. Companies such
as Tata Consultancy Services, Infosys and
Wipro are attempting to rapidly enhance
their high-level business-consulting repertoire, build AI-based tech solutions and
add thousands of local recruits in America, their biggest market. This is an unprecedented cultural shift as well, for all these
companies.
At their U.S.-headquartered but largely India-based competitor, Cognizant Technology Solutions, CEO Francisco D’Souza,
49, is pushing the Nasdaq-listed Teaneck,
New Jersey, company headlong into change,
including the $2.7 billion acquisition of
TriZetto Corp., made two years ago. That
has helped Cognizant’s health care unit impact 160 million Americans, D’Souza says
in an interview. The overarching plan is to
12 | FORBES ASIA OCTOBER 2017
become a strong intellectual-property business advisor and tech provider rolled into
one. And for that, he expects to accelerate
the pace of acquisitions at Cognizant, he
tells Forbes India. Edited excerpts:
Q: This year you entered your second
decade as CEO of Cognizant. What
strikes you about the current phase of
change in technology?
D’Souza: The overriding thought that
comes to mind is just how much innovation we’ve seen. About 24 years ago,
when we started Cognizant, technology was largely a back-office function. It’s
gone from there to becoming the very
basis of competitive advantage for many
of the businesses we serve; and because
of this evolution, the best days are still
ahead of us. If you think of the great digital buildout that’s happening, I think Cognizant, and the [tech] industry in general,
is still in the early innings. The next years
will see digital technology being deployed
more broadly in all industries and in
many more companies. And digital isn’t
just one thing, it’s many different technologies—social, cloud, mobile, analytics,
block chain, AI, IoT and so on.
What has changed more recently,
and how are you preparing to remain
a relevant vendor to your clients?
Until a few years ago, there was a sense
among our clients that digital technologies would be fundamental to their future.
But the patterns of how, why and where
were less clear. So we saw a lot of small pilots, testing and iterating. In the last couple of years, we’ve seen that change—the
patterns are becoming clear, digital technologies are becoming more mainstream,
and we see clients adopting it at scale.
To do digital at scale, our clients are
having to change their business, operations and technology models simultaneously. That is at the core of today’s change.
One of the most foundational changes
that we’ve made at Cognizant over the last
two years is to realign our delivery capa-
bilities across all of our business segments
along three areas—digital business, digital
operations, and digital systems and technologies. Each is focused on transformation in that area.
discovering market opportunities, course
correcting, prototyping and so on. To
facilitate that we have built what we call
“collaboratories” around the world, which
are co-innovation spaces for clients and
Cognizant teams.
ANJUNATH KIRAN/AFP/GETTY IMAGES
What did this entail?
Even before the [acceleration of] digital,
Cognizant had a diverse set of people.
In addition to engineers and M.B.A.s,
we’ve got doctors, nurses and chartered
accountants. It became clear that there
were some new capabilities that we needed. The main ones—and we built significant capabilities around the world—were
design, data science and a small group
of very-high-impact sociologists and anthropologists, who look at human factors.
Business-model transformation is an
iterative process and one that takes in
people with a broad set of skills and talents—technologists, consultants, data scientists, designers, industry experts—who
have to be collocated with the client. They
then go through the iterative process of
How is the work and the composition of
your staff changing?
I don’t think the global distribution of
our workforce has changed or will change
substantially in terms of where people are.
There haven’t been any big shifts, and I
don’t forecast any, either. India is far and
away our largest location, and it continues to be our largest recruiting base. In
the digital world, design, data science
and human factors become more important and our specialists need to be close
to the clients, and we’ve built them close
to the clients. Some of these specialists are
in India as well to serve clients here and
in Asia, but I would say the bulk of them
are close to the clients. The overall mix
of work and the distribution across cen-
ters, however, is not meaningfully different from earlier.
And you will accelerate acquisitions?
We had said earlier this year that we intend to accelerate the pace of acquisitions, and you’ll see us do that. It’s important right now as we continue to make
the shift to digital. With the exception of
our 2015 acquisition of TriZetto Corp.,
most have been tuck-in acquisitions, and
that will continue to be the primary approach. TriZetto established us strongly
in the health care space with a strong set
of intellectual property (IP) and software.
We will continue to build our platforms
and software, both in-house and via purchases.
How can we illustrate the rise of digital
services?
Take health care. A lot of the work is
underpinned by TriZetto’s IP. In other industries like insurance, retail and CPG
[consumer packaged goods], we also have
OCTOBER 2017 FORBES ASIA | 13
FORBES ASIA
COGNIZANT
It gives clients flexibility, and for us the
pricing is not based on people but based
on some output or delivery. Much of our
new kinds of work is on some kind of
BPaaS model.
As you evolve, what concerns you?
In the past, there were periods of rapid
advances followed by longer stretches during which new technologies were
widely deployed. With digital, technology is evolving on multiple fronts and at
a much faster pace. The ability of a company to sense and respond quickly at
this pace is new. It’s particularly important now, and one that we can’t miss. Part
of the challenge right now is that just as
there are technologies that we can see
today that are clearly important, there
are emerging technologies on the horizon that may or may not become important. That sense-and-respond mechanism
is critical at this point in time. I spend a
lot of time making sure that we keep one
foot in the present and one foot in the future, ensuring that we don’t miss an important trend.
“Cognizant, and the
tech industry in general,
is in the early innings” :
CEO Francisco D’Souza
our own IP that is starting to contribute
to overall revenue. If, broadly, digital is
seen as [new] software plus services, over
25% of Cognizant’s revenues come from
it as of the quarter ended June 30, 2017.
Apart from that, we have platforms from
TriZetto and others.
How are the new services different
in terms of traditional billing for
employees assigned to a project?
In the platform work, we are focusing a
14 | FORBES ASIA OCTOBER 2017
lot on what we call Business Process as a
Service (BPaaS). It combines cloud-based
infrastructure, software and people as a
stack on a per-transaction billing. For instance, a health insurer who signs up with
us for the BPaaS model will pay us on a
per-member-per-month basis. And there
is a menu of services. Take claims processing, for instance. They get the software, the underlying cloud infrastructure
and the people who will actually do the
claims processing—a kind of IT-in-a-box.
As the world becomes more tech-intensive, as tech becomes more complex and
the ecosystem and range of available tech
broadens, the need for companies like ours
in advising our clients on the right technology will only become more critical. Our
businesses will evolve—they will continue
to be large services businesses, but with
strong tech and IP underpinnings.
On AI [artificial intelligence], we are
still in the very early stages from a largescale-deployment perspective. We think
about AI for our clients. We are already
seeing that much of the work that we do
will have some AI components—it will
give us the opportunity to automate the
work done today manually by humans. It
will serve to amplify, make people more
productive and more efficient. I’ve heard
of predictions and fears that AI will substantially reduce employment in the services industry. I don’t think that will be
the case. F
Adapted from Forbes India, a licensee
of Forbes Media.
MADHU KAPPARATH FOR FORBES INDIA
Three to five years from now, what kind
of a Cognizant will we see?
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We help clients build corporate reputation, thought leadership &
executive visibility by creating, maintaining & growing relevance.
Find out how we Go All In at golin.com.
FORBES ASIA
ALL IN THE FAMILY
A GENER ATION E ME R GE S
‘Banking
Is Exciting’
A family of entrepreneurs has built KBZ into a finance
powerhouse in Myanmar. Mom and Dad are in charge,
but keep an eye on their twentysomething daughters.
BY RON GLUCKMAN
W
16 | FORBES ASIA OCTOBER 2017
annual rate of 43% since 2012. Last year it became the first Myanmar bank to open offices in Thailand, Malaysia and Singapore,
neighboring markets that are not only important for doing crossborder business but also for collecting remittances from millions of
overseas workers. In March, KBZ announced a landmark deal with
Sumitomo Mitsui Banking Corp. to expedite fund transfers in the
U.S. A deal like that would have been unimaginable a few years ago,
when strict U.S. sanctions against Myanmar were still in effect.
A majority-owned unit also controls roughly a third of the
country’s insurance market, and the annual growth in the premiums
it collects tops 40%. It’s the local front-runner in other financial
services, too, such as credit cards. Across the empire, analysts praise
KBZ’s planning, management and smart investments. “They are
definitely one of the most important companies in Myanmar,” says
a consultant in Yangon. “They are ahead of the curve on everything:
human resources, recruiting, transparency and business practices.
Others talk, but KBZ is really working to be the best.”
The bank employs almost 20,000 people and notes that it’s the
country’s biggest taxpayer: It paid nearly $25 million last year.
Even so, the bank represents less than a fourth of KBZ’s 80,000
workers. Privately held, the company doesn’t disclose figures for
revenue and profits.
ADAM DEAN FOR FORBES
hen a husband-and-wife team took over KBZ
Bank in remote northern Myanmar in 1996,
it had all the trappings of a mom-and-pop
operation. She was a local schoolteacher. He
also had been a teacher, then he switched to
tutoring before going into trading and mining. Today two of their
daughters help run things, and it’s still entirely owned by the family.
But looks can be deceiving. Aung Ko Win and wife Nan Than
Htwe have built KBZ into by far the biggest bank and one of the
largest companies in the country. KBZ Group boasts two airlines,
Air KBZ and Myanmar Airways International, and holds stakes in
the agriculture, real estate and tourism industries. The two sent the
daughters overseas for management degrees and this year brought
in a professional chief executive. They may raise money in a stock
market listing to invest in new businesses at home and abroad.
Myanmar aspires to be Asia’s next tiger economy, and to get
there it’s counting on companies such as KBZ to upgrade its skills
and become internationally competitive. “We don’t want to be the
best bank in Myanmar,” says second daughter Marlene Nang Kham
Noung. “We want to be among the best in the world.”
KBZ claims 40% of the country’s bank deposits, and its deposits
have exploded since the country opened up, growing at an average
In the spotlight: sisters
Nang Lang Kham and
Marlene Nang Kham
Noung.
FORBES ASIA
ALL IN THE FAMILY
corporate social responsibility. Its Brighter Future
Myanmar Foundation has financed water projects in
the parents’ home Shan State, independent advocacy
films and the Yangon Photo Festival, controversial
for highlighting uncensored photojournalism. In
2014, KBZ was ranked No. 1 for transparency by the
Myanmar Centre for Responsible Business.
One of KBZ’s first businesses was mining for
rubies in Shan State. Mining in Myanmar is a murky
industry marked by smuggling and payoffs to generals, and a report by London-based Global Witness in
2015 outlined the corruption. The group says KBZ
was one of the only companies to cooperate with
research for the exposé. The mine is still operational,
according to a KBZ spokeswoman, but the focus is
now on reforestation and modernization. “We are
“They genuinely care about investing in the country”: Aung Ko Win and wife Nan Than
committed to responsible mining,” she says. The KBZ
Htwe; their third daughter, Tracy Nang Mo Hom (second from left), is studying medicine.
website notes: “We are committed to meeting interLong groomed for the spotlight, Marlene, 26, and sister Nang
national norms and standards in all our business operations. We
Lang Kham, 29, are both executive directors of KBZ Group and
have zero-tolerance policies for bribery or facilitation payments.”
deputy CEOs of KBZ Bank. They’re regarded as two of the brightSome of Nan’s fellow teachers formed Kanbawza Bank in 1994 as
est lights in a wave of young Myanmar business leaders. Nang is in
a sort of credit union in the Shan State capital of Taunggyi. (KBZ is
demand as a conference speaker, with foreign executives keen for
short for Kanbawza, a Pali word for the Shan region.) Aung’s trading
insights into the country’s business reboot. Marlene seems to be the
and mining business prospered, and two years later, he bought the
deep thinker; she originally planned a career in the foreign service.
banking operation. Aung (now 55) moved KBZ and his family to
The pair exudes a bubbly, infectious energy. The upbeat impresYangon in the late 1990s, when there were only 4 branches. Now
sion is heightened by a tour of a KBZ office. With an incubator lab
there are 485, and KBZ expects to reach 500 by the end of the year.
and walls sporting signs with bright, inspirational messages, it could
The family lived in the headquarters building—customers
be the home of a tech startup. The sisters buzz about investments
bustled in the branch at street level with offices above, while home
in high-speed internet to connect the bank’s branches and about
was the top floor. “Nang always wanted to work in the bank,” says
creative digital-advertising campaigns targeting customers on
Marlene. “But now we both are really involved.” Adds Nang: “Bankmobile phones. They mention a tie-in with Viber, a popular voiceing is exciting, really one of the last frontiers here. We grew up in the
and-messaging service that uses the internet. The conversations
bank. Even as kids, we were always there, greeting customers. We
seem ordinary, except that this is a country where cellphones and
always felt a part of it.”
the internet were outlawed until not long ago.
Like many children of the elite in Myanmar, Nang and Marlene
In May, KBZ won praise for hiring an American banker, Mike
were sent to school overseas. Nang studied business administraDeNoma, as chief executive. He has extensive experience around
tion and management at the National University of Singapore,
Asia, including serving as CEO of Taiwan’s Chinatrust Commercial
then earned a master’s degree in management at the University of
Bank and expanding it to ten countries. “This is an amazing time
Sydney. Marlene spent four years at Georgetown University’s School
for Myanmar,” he says. “Where else in the world can you find a
of Foreign Service in Qatar before getting a master’s degree in innocountry where 30% of the people have electricity, 20% have a bank
vation, entrepreneurship and management from Imperial College
account, but 90% have smartphones?” He says KBZ will continue
Business School in London. (The youngest sister, Tracy Nang Mo
to modernize. “Within six months, you’ll see a lot, like anywhereHom, 21, is training to be a doctor.)
anytime banking.”
The sisters praise their parents’ acumen in building the business.
KBZ has managed to avoid being tainted by the corruption
Their mother, 60, the vice chairman, is described as the ultimate
that’s plagued Myanmar for decades (and by the current Rohingya
bean counter and has the final say on all financing. “Dad is very
refugee crisis). International organizations put the bank through
progressive,” notes Nang. “He knows more about Facebook than us,
meticulous vetting before signing on as a partner on various projand he’s not on Facebook!” Instead, she says, he spends lots of time
ects, and these groups heap praise on KBZ. “In terms of business
in Myanmar’s original information highway—tea shops. “He goes
operations they grade very high,” says a senior official with a large
and listens to everyone.”
international financier. “They can be aggressive, but they don’t just
The first candidate for a listing among the company’s many
chase wealth. They genuinely care about investing in the country,
businesses might be insurance, the sisters acknowledge. But the
and its future, by supporting its upcoming entrepreneurs.”
options are numerous, and KBZ holds many cards. “Our dad is the
KBZ has focused on its human-resources department, working
strategist,” says Nang. “In any business you have to have a plan. Even
to make sure it treats employees well. It’s also spending money on
when we were very young, they had a plan.” F
18 | FORBES ASIA OCTOBER 2017
FORBES ASIA
GAMBLING
Lawrence Ho’s Wager
Macau mogul is convinced that a huge Japanese bet will pay off.
BY PAUL ARMSTRONG
BILLY H.C. KWOK/BLOOMBERG
B
illionaire Macau casino magnate Lawrence Ho declares
Japan’s nascent gaming industry to be “the most exciting
market,” as the world’s biggest
operators prepare to table their bids for a
lucrative license. This follows his pledge
in Tokyo earlier this year “to spend what
it takes” to win a stake in a sector that
was provisionally legalized only last year
and stands to give the country a take
rivaling that of Las Vegas.
Speaking to Forbes Asia on the sidelines of this year’s Forbes Global CEO Conference in Hong Kong, Ho—the CEO and
chairman of Melco Resorts & Entertainment—said his company’s philosophy “is always to deliver the coolest, the most innovative, the highest-quality resorts. I think that
blends very well with the philosophy that
the Japanese market has.”
While the law to legalize casino gambling has been passed, it still awaits further
legislation outlining precisely how the industry will be regulated—and the locations
of the casinos. But the casinos will be part
of “integrated resorts” that include other attractions and facilities in a bid to enhance
tourism.
Ho said the company favored locating
close to Japan’s biggest cities—such as Yokohama and Osaka. “Everywhere we build
integrated resorts, our mantra is always to
build the coolest thing. And Japan will easily be the coolest; we’ll experiment with the
latest in technology, latest in building methods, latest in engineering. But in order to do
that, we really have to pick a location that is
top-tier—near major cities with a huge population and also high potential for tourists.”
He appeared to rule out the capital as
a possible destination, however. “We don’t
think Tokyo is going to happen. It’s such a
fantastic city, but it’s a city for government,
for financial. It’s less casual when you go
“Our mantra is always to build the coolest thing. And Japan will easily be the coolest.”
to Tokyo. I think the government is thinking of using the integrated resorts as urban
revitalization, so I think they’re looking at
Yokohama.”
While Japan is very much a gamble on
the future, Ho spoke glowingly about the
performance of one destination: Macau.
Asia’s preeminent gaming hub—and the
only Chinese territory where gambling is
legal—experienced a slump in gaming revenue in recent years amid a well-publicized
anticorruption drive by the Chinese government that, among other things, reduced
the amount of time mainland Chinese visitors could spend in Macau. But now the picture looks brighter ahead of “Golden Week,”
a weeklong holiday that China implemented in 2000 to boost tourism.
“So far, this year has surprised us—very
pleasantly—in terms of how strong the market has come back,” Ho said. “Macau went
through two very tough years. We made
use of those two years to focus on efficiency
and lean downs, as part of our continuousimprovement philosophy. Now I think this
Golden Week is going to be phenomenal. So
far, year to date, the market is up 19% and
really across all segments [of the casino industry], so the high-end segment, the massmarket segment … and the average stay is
also increasing.”
However, one thriving gaming destination in Asia that may cause concern for operators like Melco is the Philippines, after a
presidential order to sell government casinos owned by the Philippine Amusement
and Gaming Corporation (PAGCOR) as
soon as next year. Asked whether he was
concerned about the casino business being
cannibalized there, Ho was unmoved. “I
think the Philippines has been the star within our business for the past two years. I always like to compliment my team down
there, where we have the fastest-growing
property in the fastest-growing market in
the world. It’s working out extremely well.”
He pointed out that more international tourists are visiting the country, as perceptions about it change. “I think in the next
few years, there will be more and more tourists going in, so that will be the next phase or
catalyst in terms of the business.” F
OCTOBER 2017 FORBES ASIA | 19
FORBES ASIA
LOVEBLOCK WINES
Second
Act
After building and then selling a top New Zealand
wine label, Kim and Erica Crawford started over.
This time it didn’t get any easier.
BY JENNIFER SCHULTZ WELLS
20 | FORBES ASIA OCTOBER 2017
JIM TANNOCK FOR FORBES
W
hile cleaning out their house in New Zealand to move two
years ago, Kim and Erica Crawford came across a desk
pad from the early days of their former wine label. On it
they had mapped out their future: Grow the brand, sell it
within nine years and then buy land.
They had done just that—building a bestselling sauvignon blanc label that
they sold for a small fortune, which allowed them to develop sizeable vineyards, land that they love. “We were very focused, between the two of us. We
knew exactly where we were going,” says Erica.
The Crawfords are now almost a decade into their second act, running
Loveblock Wines, their organics-driven estate amid the windswept hills of
Marlborough in the northeastern tip of the South Island. It’s
been challenging, even with their experience and capital.
Building a vineyard from scratch is expensive and time-consuming, farming is all about managing risk, and organics are
not generally known as a moneymaker. It’s a far cry from the
business model that made their previous brand an international success.
Back in 1996, when Kim and Erica started Kim Crawford Wines, they had plenty of vision but no money, so
they built a “virtual winery” out of the back room of their
Auckland home. It was an innovative approach at the
time, with Kim—a well-known local winemaker—buying grapes from contract growers and making wine in
leased facilities, allowing them to avoid huge outlays for
land, vines and equipment. The label under Erica’s management grew quickly and profitably. Sauvignon blanc,
unlike other varietals that need to be aged in barrels,
can be sold within a year of production. “It’s a high-value product,” says Kim, 57, with an almost “instantaneous return.”
Within seven years, Kim Crawford Wines was the
country’s tenth-largest winery in global sales. In 2003,
Veterans of the grape: “We now have
infrastructure and know what to plant,”
says Erica Crawford, with husband Kim
at their Marlborough estate.
FORBES ASIA
LOVEBLOCK WINES
the Crawfords sold the label—but not its physical assets, which
ings, and they’ve had to decommission a number of hectares
by this point included a 45-hectare block—to Canada’s Vinon top of the hill that weren’t producing. Yield is king in the
cor International, which itself was acquired three years later by
wine business, both in terms of growing the grapes and the volglobal drinks giant Constellation Brands.
ume of wine produced, and so any yield loss because of an orBetween the sale price and a performance-based earn-out
ganic strategy is really challenging, notes Jordan.
that saw Kim staying on at Constellation until 2007 and Erica
“I don’t think we understood how difficult the farm was going
until 2009, the Crawfords netted roughly $50 million. It gave
to be,” says Erica. “But we now have infrastructure and know
them the means to “live their values,” says Erica, 56, who today
what to plant.” So far the Crawfords have put around $8 million
drives the Loveblock philosophy and business as the compainto Loveblock, and despite the slow return on investment, the
ny’s managing principal. She became interested in organics after
label has grown enough to reach a tipping point.
a car accident in her early 30s led her to take stock of her health.
Their estate produces close to 27,000 cases of Loveblock
Kim, who has been married to Erica for 27 years, tagged along,
wine annually—the company expects to post $3.7 million in
up for the challenge of using old-world methods to grow grapes
revenue in the year ending in June—and is on track to douand make wine. “Kim and Erica took a novel path, but it enabled ble that within the next five years, with most of the producthem to fund their dream, and that’s to have all the elements, the
tion for export. They see a larger organics business developing
personality of the brand and control over the way the raw prodfrom the farm, including sales of grass-fed beef from their herd
uct, the grapes, are grown. That embodies a much stronger and
of Angus cattle. “It’s good to break even and to be a base for
compelling story [than their
the brand,” says Erica. While
original label],” says viticulture
Kim and Erica use only their
MEANWHILE,
consultant David Jordan.
own grapes to make Loveblock
A ten-year noncompete
wine, they also sell their grapes
AT KIM CRAWFORD
clause with Constellation preto others, and Kim runs a sepSince taking over Kim Crawford Wines in 2006, New Yorkcluded the Crawfords from
arate bulk-wine business called
making or selling any wine, but based Constellation Brands has built the label into a power- Zorro Wines. With more than
house, especially in the U.S. The label posted $229 million
not from growing grapes. They
90 hectares of their land holdin retail sales in the U.S. last year, making it the top-selling
went shopping after their sale,
ings planted, the Crawfords
New Zealand wine brand there, according to U.S. marketupping their holdings to about
now number among the top
research firm Impact Databank, and the top-selling sau215 hectares, which included
10% of the country’s largest
vignon blanc. Last year Kim Crawford became the first
160 hectares of undeveloped
vineyard owners.
New Zealand brand to break the 1-million-case mark in the
hillside and adjoining land in
They say they weren’t ever
U.S., growing 20% from a year earlier to 1.2 million cases.
Marlborough’s Awatere Valley
tempted to return to virtual
That represents 25% of the New Zealand wine category.
that is now home to the Lovewinemaking with Loveblock;
Kim Crawford is part of a stable of New Zealand labels that
block brand. “We couldn’t afblending grapes from a variety
Constellation—the largest exporter of New Zealand wines— of suppliers is now commonford to buy a developed vineowns and exports to 75 countries. —J.S.W.
yard,” says Erica, with Kim,
place among brands. “That
adding, “It wasn’t realistic. You
model is incredibly profitable,”
might want to buy a vineyard, but it’s very difficult.”
says Erica, “but what will your point of difference be? PeoProperty values in Marlborough have surged in recent
ple are looking for provenance in brands. They want to know
years, with wine companies and investors hustling to nail
where it’s grown, how it’s grown, what has gone into it. And
down grape supplies to meet demand. Sauvignon blanc wines
it’s those under 30 who are particularly interested in that.”
make up more than 85% of New Zealand’s total wine exExpanding the estate is all about the kids. “For me this is
ports, which hit a record $1.2 billion in June. Its biggest overgenerational,” says Kim, who grew up on a farm in rural New
seas market is the U.S., which has developed a particular likZealand and studied oenology at university. He met Erica, a
ing for the crisp, clean taste of Marlborough sauvignons. With medical scientist, in her native South Africa at a wine festival.
fewer vineyards hitting the market and a dwindling supply of
Their 23-year-old son, Rory, is an aspiring winemaker who,
land suitable for development, vineyard values in Marlborthey insisted, must ply his trade outside the family business
ough have risen sharply over the past year, fetching between
until he is 30; daughter Pia, 22, recently graduated from uni$88,000 and $220,000 per planted hectare depending on loca- versity with a science degree.
tion, according to Tim Gifford at Colliers International. Land
Kim says the traditional taste of the Marlborough sauin smaller and cooler Awatere Valley is cheaper.
vignon blanc is different when it has an organics platform.
Converting the hillside property into vineyard land hasn’t
“The way I explain it is that we’ve developed from our teenbeen easy. The rocky soil and the bronze beetle pest made the
age years and we’re now middle-aged, so we’re so much
Crawfords pull back from their plan of completely organic
more. We’re not throwing our hormones and testosterone
management at the property. Instead they adopted a “low inter- out there anymore. We’re quite restrained but hopefully a bit
vention” chemical approach affecting two thirds of their plantmore complex.” F
22 | FORBES ASIA OCTOBER 2017
FORBES ASIA
FAUX MEAT
Heme on Rye?
A veggie burger could be the solution to Asia’s food-security dilemma.
BY PAMELA AMBLER
REUTERS/BECK DIEFENBACH
S
eventy-five million dollars for
mouths to feed but only 7% of the world’s
veggie burgers? That’s what Sinarable land. President Xi Jinping has said
gaporean sovereign wealth fund
that food security is an eternal challenge
Temasek invested in Impossible
for the country. Adding to the pressure is
Foods, a virtually unknown Calithe growing demand for a “rich-country
fornia company that is trying to change the
diet,” which means more animal protein
paradigm of the global food system.
and dairy. Rabobank estimates China’s imEven though its burger product is plantports of beef, pork and poultry will increase
based, it smells, cooks, tastes and even bleeds
steadily in the coming years.
like the real deal. On social media the hashtag
China spent $43 billion earlier this year
#impossibleburger has been trending. Last
to purchase Swiss seed company Syngenta.
year celebrity chef David Chang was the first
The acquisition by state-owned ChemChina
to introduce the product to his Momofumarks the largest acquisition ever of a forku Nishi menu. Today the faux ground beef
eign business. The deal will ensure the na(made from something called “heme”) can
tion doesn’t run out of rice and noodles to
be found in 44 restaurants across the U.S.
feed its people, but more importantly it enand is expected to be in hundreds in a few
sures there’s plenty of grain to raise the animonths. “We believe we created a consumer
mals needed to meet the demand.
movement that we need to fulfill,” said David
Impossible Foods offers Singapore,
Lee, COO and CFO of Impossible Foods.
China—and the world at large—a green
(See p. 34 for a taste of real beef.)
way to feed people. Cattle farming puts treTemasek is not the first Asian compamendous strain on the environment. In
ny to express interest in the meat substicontrast, production of Impossible burger
tute. Li Ka-shing was also an early investor
patties requires 95% less land and a quarter
in Impossible Foods. Series D funding came of the water, while yielding only an eighth of
from UBS Wealth Management in Asia as
the greenhouse gases compared with those
well. So why are such savvy investors betcreated by beef patties, according to the
ting on a product not even available in the
company. “They’re strategically seeing the
region? “We look for opportunities to supopportunity that serving sustainable food
port growth across our portfolio,”
says Paul Ewing-Chow, associate director of public affairs at Temasek.
“This includes technology pioneers
and disruptors, and in the case of
Impossible Foods—food security.”
Singapore has limited arable
land. Less than 1% of the island nation’s GDP comes from domestic
food production. It devotes its resources to growing produce, with
little livestock farming. Consequently, the population’s diet is almost entirely dependent on imports.
Neighboring China faces a simAsian dishes, such as dumplings, are next on the menu.
ilar dilemma. It has 1.3 billion
creates,” said Lee about Temasek’s investment. The former Del Monte Foods executive adds: “The market we’re addressing is
very relevant for the emerging middle class
and growing economies of Asia.”
What is Impossible Foods’ secret? The
company uses heme, a biochemical compound that is abundant in meat but is also
present in greens, seeds and grains. A component in hemoglobin, it’s a flavor catalyst and the ingredient that gives meat its
red color. Deodorized coconut oil is used
to mimic the natural fats so that the patties
sizzle and caramelize to form a crust when
cooked. “We chose to be radically transparent [with our ingredients] because that’s just
the way we roll,” Lee said.
Impossible Foods does have a timeline
for Asia, but it hasn’t been disclosed. Right
now its operation out of Rutgers Food Innovation Center in New Jersey produces 8,000
pounds of plant-based “meat” each month,
not nearly enough to meet domestic demand in the U.S. The company has been
working to launch a facility in Oakland,
California, set to open in the fall, which will
increase supply by 250 times.
Just like the real stuff, the ground beef
substitute can be used in a variety of ways:
for Bolognese sauce, meat loaf, tacos
and even raw tartare. New interpretations have already made it into Asian
dishes such as spicy mapo tofu, crispy
lettuce cups and Moroccan “cigars”
(similar to Chinese spring rolls).
While still in the works, Lee points
out that Impossible Foods also has the
platform to create pork, chicken, fish
and dairy alternatives. They’re just simply not available to consumers yet. His
latest taste test? “I tried our product as
ground pork in dumplings.” The idea is
to suit local tastes. “For Asian consumers, we’ll serve it the way they want it,”
Lee says. F
OCTOBER 2017 FORBES ASIA | 23
FORBES ASIA
SUSTAINABLE STYLE
Bricks and Clicks
Model turned entrepreneur Yael Aflalo is betting physical “tech stores” and data
can turn her eco-friendly It-girl brand Reformation into a fast-fashion empire.
BY KATHLEEN CHAYKOWSKI
O
n an early-September morning, Yael Aflalo, 40,
glides through the tech-heavy West Hollywood store
of Reformation, her eco-friendly fashion brand.
Wearing frayed cigarette jeans, a dark Reformation
tee reading, “I went to Mars and all I got was this
stupid T-shirt” and Chanel flats, the founder and CEO mimics the
path of a shopper. She holds up a Reformation bestseller, a flowing
flowered dress, then walks over to one of a handful of touchscreens
along the wall to browse everything from blazers to crop tops.
With a few taps, Aflalo can choose what she wants to try on,
then go grab a coffee or flip through the racks, while behind the
scenes store employees assemble her selections, deliver them to a
dressing room and, when all is ready, notify her by text. In the dressing room, she can charge her phone, play her favorite music and
choose from a set of mood-lighting options like “sexy time” and
“golden,” which are perhaps more pleasing for trying on a swimsuit
or an evening dress. From the dressing-room screen, she can ping
“wizards” in the back to call in new items. “This is how people shop
now, standing next to each other at a screen in a store,” Aflalo says.
Flattering silhouettes, quality and that trendy trait—sustainability—have made Reformation wildly popular among Millennial women of certain means, who are willing to drop anywhere from
$60 to $250 per item. It doesn’t hurt that the label is regularly seen
on celebrities like Taylor Swift, Rihanna and model Karlie Kloss.
With a growing number of “tech stores” like the one in West
Hollywood, Aflalo is building on that success and putting Reformation on a path to $140 million in sales next year, up from just $25
million in 2015. The hustle and bustle at the company’s four tech-infused stores suggests Aflalo has cracked the code on a “bricks and
clicks” strategy, a seamless meshing of offline tangibility and online
convenience that seems essential to success in the age of Amazon.
While e-commerce makes up 80% of Reformation’s revenue,
the stores help attract customers and boost sales. Reformation’s
stores are doing so well—customers are twice as valuable to the label
when they discover it through brick and mortar—that the company, which also has a handful of more traditional outlets, plans to
add between five and eight tech stores next year in the U.S. at a time
when many retailers are retrenching. Paris, London and Scandinavia are in Aflalo’s sights for the following year. “Although retail ecommerce is growing by leaps and bounds, the store experience is
becoming more important,” says Ananda Chakravarty, an analyst at
the research firm Forrester. “Companies that capture the customer’s
heart and mind are going to win.”
Reformation’s stores don’t just remove pain points for shop-
24 | FORBES ASIA OCTOBER 2017
pers—they also collect data that traditional retailers lack, everything from how long customers spend trying on particular items
to which pieces convert best from dressing rooms to cash registers
and which pieces shoppers browsed. Reformation merges customers’ online and in-store activity to improve recommendations. Most
retailers know how many people walked in and how many bought
something, but not much else. “We created a store where all the interactions are tracked,” says Aflalo, who is also Reformation’s product mastermind. (Her husband, Ludvig Frössén, is creative director.)
Aflalo started Reformation in 2009 as a side gig and took no outside funding. By 2013, she turned her attention to it full-time. The
company has since become profitable and grown to nearly 550 employees. In 2015, it raised $12 million from venture investors led by
Stripes Group and 14W, at an estimated valuation of $87 million.
Aflalo says surveys show product design is the main driver of
Reformation’s sales, with the promise of sustainability a close second. Like the fast-fashion giants H&M and Forever 21, Reformation operates on a rapid design-to-rack cycle of 42 days. But unlike
cheaper fast fashion, Reformation spares its customers the notorious lines, piles of sizes and uncomfortable dressing rooms. The
turnaround time limits the number of units of each style and color
and creates a sense of exclusivity without designer prices.
While Aflalo started with Millennial women, her vision is to
bring her collections to the masses, adding product lines that span
gender and age brackets. She is betting that a focus on quality and
rising environmental awareness will help Reformation take on not
only standard fast fashion but also higher-end Goliaths like Urban
Outfitter’s Anthropologie and Free People brands.
“Yael has created that opportunity to be a next-generation Zara,”
says Ken Fox, the founder of Stripes Group and a Reformation
board member. “She merges a merchant’s view with state-of-theart data technology to serve the customer.” For all its early success
and potential, Reformation has a long way to go before it can stake
a claim as a real competitor among the fast-fashion giants: Zara had
revenue of $18.3 billion last year, and H&M Group, the parent company of H&M, had $27.7 billion. Meanwhile, fashion consumers
are notoriously fickle. What’s hot today may not be around tomorrow. Witness Nasty Gal, a once-trendy online fashion brand that
did nearly $100 million in revenue in 2014 only to file for bankruptcy two years later, or Gilt Groupe, an early e-commerce unicorn that
sold last year for a quarter of its peak valuation.
To move fast and ensure it can live up to its green promises, Reformation manufactures 60% of its clothing in its Los Angeles factory, where employees cut, sew and press dresses and attach zippers.
ETHAN PINES FOR FORBES
CEO Yael Aflalo, at her Los Angeles factory, discovered the wastefulness and pollution caused by fashion manufacturing after a trip to China in 2010.
There’s an on-site masseuse, and employees have health benefits and
access to classes in career counseling, English and citizenship, which
are popular with the company’s heavily Latino workforce. The factory is also the hub for photo shoots, fittings, shipments and returns,
and engineering. Most remaining items are made in other local factories, with a few imports rounding out the collections.
To back up the sustainability claims, Reformation says it compensates for 100% of its waste, carbon dioxide emissions and water
use by purchasing “offsets” that help pay for clean water, planting forests, capturing landfill gas emissions and wind power. It uses
eco-friendly and recycled fabrics, and it screens suppliers to protect against unsafe or unfair labor practices. Its labels include a “RefScale,” which shows customers the environmental benefit of each
piece through a breakdown of how much CO2, waste and water they
helped to save. Small changes add up: The making of a pair of Reformation “seamed” jeans, for example, consumes 196 gallons of water,
compared with an industry average of 1,656 gallons, and emits 5
pounds of CO2, far less than the average of 36 pounds.
While Aflalo drives a Tesla and geeks out over sustainability, ecofriendliness wasn’t always part of her mission. The Beverly Hills native started her first fashion company, Ya-Ya, as a 21-year-old model
turned entrepreneur, after growing up watching her parents run a
clothing shop. She briefly enrolled at the University of California,
Berkeley, and then at the Fashion Institute of Design & Merchandising in Los Angeles, sold her first designs to Fred Segal and dropped
out. “Every time I took the clothes I had designed to a store, they
bought it,” Aflalo says. “I was like, ‘This feels right.’ ”
She spent the next decade working on Ya-Ya but didn’t get serious until her late 20s. “I was just partying, being 27,” Aflalo says. In
2005, revenue peaked at $20 million. When the Great Recession hit,
excess inventory bankrupted the company, leaving Aflalo with millions in debt. She took a year off, then made clothes for Urban Outfitters to pay the bills. On the side she bought and freshened vintage
dresses, selling them in a Los Angeles storefront in 2009 called Reformation. The dresses made money, so she opened a second store in
New York. It sold out on its first day.
A 2010 business trip to China changed her trajectory. Aflalo witnessed firsthand the wastefulness and pollution caused by manufacturing and learned that fashion is among the world’s most polluting
industries. She was appalled that it took 200 to 500 gallons of water
to make one basic cotton T-shirt and hundreds of years for synthetic fabrics such as polyester to biodegrade. She left China with a mission: to create sustainable clothing at an attainable price without sacrificing style.
She paid off her debts and began to focus solely on Reformation.
Eco-fashion was still seen as shapeless and “granola,” but watching industries like automotive go green without sacrificing product
quality convinced Aflalo that fashion was primed to change. She was
right. “Yael challenged the misconception in the fashion industry
that anything tied to being sustainable means that it can’t be cool,”
says Miroslava Duma, a Russian fashion entrepreneur who has invested in Reformation. “It’s the perfect example of where the industry should be moving. Reformation is for a new generation of customers who want to consume with purpose.” F
OCTOBER 2017 FORBES ASIA | 25
PROMOTION
CHINA CONSTRUCTION BANK:
STAYING THE COURSE
The development and transformation of China Construction Bank is rooted in
the real economy and managed by rigorous risk control.
Head office in Beijing
China Construction Bank (CCB) continues to
evolve its business and deliver a solid financial performance. Its recent results demonstrate the bank’s commitment to serve its
customers, work for China’s real economy,
adapt to technological changes, strengthen
compliance operations, reduce risk and
accelerate its transformation both domestically and overseas.
As of the end of June, CCB’s total assets
amounted to RMB21.69 trillion (US$3.31 trillion), an increase of 3.5% since the end of
1
2016, and its net profit for the first six months
of the year was RMB139 billion (US$21.2 billion), up 3.8% year-on-year. Annualized
return on average assets was 1.3% and
annualized return on average equity stood
at 17%; the bank’s total capital ratio and
common equity tier-1 ratio were 15% and
13%, respectively.
CCB responded to the liberalization of
domestic interest rates by expanding its
customer base and strengthening product
innovation, thereby increasing its net fee
and commission income by nearly RMB900
million (US$137.3 million) year-on-year.
Meanwhile, gross loans and advances to
customers increased by 6.4% and deposits
rose by 5.7% since the end of 2016. Improvements to cost management and its expense
structure meant that the bank maintained a
stable cost-to-income ratio of 22%.
The bank continued to turn information
technology and product innovation into
drivers of development. In the first half of
2017, it set up the Inclusive Finance Division
PROMOTION
Going forward, CCB will continue its commitment to serve the real economy.
to enhance the application of big data and
internet technologies in targeted customer
service areas and to reinforce risk control. It
promoted its “Long Card” cross-border payment system, improved its mobile finance
products and accelerated its channel transformation. About 99% of all its outlets are
now integrated, and the number of online,
mobile and WeChat banking users topped
250 million, 240 million and 62 million,
respectively.
CCB also maintained its core competitiveness in housing finance with a 9.5% increase
in its residential mortgage book in the first
half of the year. It also grew its consumerfinance business, with 102 million credit
cards issued by the end of June.
The bank introduced several measures to
better identify, assess and mitigate risks. The
initiatives have already born fruit; the bank’s
nonperforming loan ratio stood at 1.5% at
the end of June and provision coverage ratio
at 160%.
In addition, CCB remains committed to
serving the real economy and has given
its full support to national strategies such
as the “Belt and Road Initiative” as well as
to the coordinated development of the
Beijing-Tianjin-Hebei region, the Yangtze
River Economic Belt and the construction of
the Xiong’an New Area. The bank leveraged
its strengths in infrastructure construction,
its engineering cost advisory service and
its comprehensive licenses. Moreover, it
continued to optimize its credit structure by
strictly implementing “name list management” to control loans across the five industries with heavy overcapacity.
At the same time, CCB has steadily
extended its overseas footprint, inaugurating CCB Indonesia and CCB Malaysia and
opening branches in Warsaw, Poland, and
Perth, Australia, to bring the total number
of overseas branches to 251 in 29 countries
and regions.
In the second half of the year, CCB will
remain focused on strengthening its value
as one of the largest state-owned commercial banks, encouraging economic growth
and fostering the healthy development of
the financial markets.
The bank announced a 3.8% increase in net profit in the first half of the year.
2
FORBES ASIA
SALVAGE MAN
28 | FORBES ASIA OCTOBER 2017
DAVID YELLEN FOR FORBES
Optoro CEO
Tobin Moore reroutes
unwanted merchandise.
The Point of
All Returns
How Optoro is building a billion-dollar business helping companies
cope with America’s mountain of rejected merchandise.
BY SUSAN ADAMS
I
n Optoro’s 300,000-square-foot warehouse outside Nashville on a stiflingly hot afternoon in late August, Susan
Cohan scans the bar code on a cardboard box holding
97 pink crocheted bikinis. The tops were priced at $27.99
and the bottoms at $19.99 at one of America’s bestknown big-box retailers. But the suits had failed to sell. Optoro’s software tells Cohan to route the box to Bulq.com, a website run by Optoro that sells in bulk to mom-and-pop dollar
outlets and online discount stores. The bikinis will fetch 20% of
retail, says Tobin Moore, Optoro’s 35-year-old cofounder and
CEO. “People aren’t going to be buying bikinis in September,”
he notes.
Those bathing suits and the 50,000 other boxes of returned
and rejected stuff sitting in Optoro’s warehouse represent a
pounding headache for retailers and manufacturers. Of the
$3.3 trillion Americans spent on merchandise in 2015, they returned 8%, or $260 billion worth, according to the National Retail Federation’s most recent figures. That doesn’t count
items, like the pink bikinis, that never leave store shelves.
As e-commerce sites like Amazon and Zappos force competitors to match their free returns and full refunds even for
damaged goods, retailers are desperate to find a way to salvage
value from the stock that comes flooding back. Estimates of
e-commerce returns vary from 25% of all goods bought online
to upwards of 50% for apparel.
According to Moore, Optoro offers the best solution. The
algorithms powering its cloud-based software suck up data
about prices set by other online vendors selling the same or
similar returned or overstocked items, and its scanners instruct
warehouse workers to route each item or group of items to the
channel that will recover the most cash.
The preferred option is sending returns back to store
shelves, but that’s only possible for less than 10% of the merchandise Optoro processes. Retailers have already sifted out
most of the 20% of returns that they can restock (including unopened goods in pristine condition that are still part of the season’s offerings). The next best choice: either return items to
manufacturers or sell them directly to consumers on Optoro’s
discount-goods site, Blinq.com, or through online stores Optoro runs on Amazon and eBay, which Moore says can bring
in 70 cents on the retail dollar. One example in the Tennessee
warehouse: a wireless, rechargeable Solar Stone garden audio
speaker in the shape of a big gray rock that retailed for $129.99.
It’s destined for sale on Blinq.com for $88.49. Optoro’s software
also routes goods to other channels, including recyclers and
charities.
Before he launched Optoro seven years ago, Moore says,
most big retailers relied on a hodgepodge of inefficient channels that funneled goods to a series of middlemen who in turn
sent them to discounters like Big Lots or Ollie’s Bargain Outlet as well as to flea markets and pawn shops. Through the old
system, retailers sometimes recouped as little as 5 cents on the
dollar of retail sales. Often, they simply chucked returns in
dumpsters and paid to have them carted away.
Moore, tall and lanky in a white oxford-cloth shirt, navydyed jeans and brown lace-up dress shoes, started Optoro’s precursor out of his Brown University dorm room in early 2004.
Ebay wasn’t yet a decade old, and he saw opportunity in helping sellers list used goods on the site. For a 30% cut of the sale
price, he’d stand in as the vendor, taking care of everything
from product photos and descriptions to pricing and shipping.
He roped in Justin Lesher, a friend from his days at the Washington, D.C., all-boys prep school St. Albans, who operated out
of his dorm room at Penn.
After graduating that spring, the two moved in with their
parents in D.C. and went without paychecks for two years.
They ran the business out of an attic above the garage at
Moore’s house before opening a 1,200-square-foot storefront in
OCTOBER 2017 FORBES ASIA | 29
FORBES ASIA
SALVAGE MAN
Georgetown. The following summer Moore persuaded another
St. Albans friend who had just graduated from Brown, Adam
Vitarello, to back out of the job he’d accepted at AIG and help
run the business, which they’d named eSpot. (Vitarello is now
Optoro’s president; Lesher left the company in 2011.)
For funding, they borrowed $350,000 on 37 zero-interest
credit cards. They got lucky with local press coverage and scored
some big sales, including a 1965 Mustang and a $100,000 Rolex.
Neighborhood retailers started using eSpot to sell returns and
excess inventory. That led to a lightbulb moment. “We realized
big-box retailers had the same problem those small retailers
had,” Moore says. “We saw a massive problem that had no one
focusing on it and no good solutions.”
But Moore’s timing was terrible. In 2008, the financial crisis had hit and banks had hiked the rates on eSpot’s zero-interest cards to 30%. Facing bankruptcy, Moore worked up an elevator pitch and started trying to raise money. He struck out
at more than 100 investor meetings in the D.C. area before he
landed his first angel, Nigel Morris, the cofounder of Capital
One Financial Services, who pledged $1 million through his
investment firm, QED, in Alexandria, Virginia. “Nigel liked
houses in the eastern U.S. The BJ’s contract helped Moore’s second push to raise money. In late 2012, he persuaded Grotech, a
D.C. venture firm, to lead a $7.5 million investment, and seven
months later, Revolution Growth, the VC firm headed by billionaire AOL cofounder Steve Case, led a $23.5 million round.
“This market is so big and will continue to grow,” says Revolution partner and Optoro board member Ted Leonsis. “It won’t
be a zero-sum game.”
A total of $129 million in investment capital has poured into
Optoro, including participation by Generation Investment Management, the London-based venture group cofounded by Al
Gore, whose managers liked Optoro’s pledge to keep merchandise out of landfills, and a $46.5 million round in December
2016 that included UPS, which plans to pitch Optoro’s business,
where appropriate, to its thousands of retail customers, says Ken
Rankin, the company’s director of corporate strategy.
Moore concedes that some companies, in particular Amazon and its subsidiary Zappos, have effective internal systems
for processing returns. Amazon, however, has used Genco
(now called FedEx Supply Chain). Amazon also uses liquidators to clear bulk merchandise from its warehouses. And
Amazon offers used and so-called open-box
goods directly on its site.
There is plenty of other reverse-logistics business to be had, though retailers and manufacturers don’t want to talk about it. They’d rather consumers focus on acquiring new things and don’t
want to draw investors’ attention to the money pit
dug by returns and overstock in search of buyers.
Of Optoro’s 30 clients, only a handful, including
Home Depot, Best Buy, Target and Jet.com, permit Optoro to make their relationship public, and
none would agree to an on-the-record interview
for this story.
Like his clients, Moore won’t share Optoro’s numbers, except to say that he expects next year’s revenue to double this
year’s, which is on track to double last year’s, and that Optoro
will process goods with a total retail value of $1 billion in the
coming year. Optoro collects revenue several ways. Most customers who use the software pay monthly licensing fees. When
it sells goods on Blinq and Bulq, Optoro takes between 15%
and 50% of the amount it recovers for its clients, which ranges
from 20 cents to 70 cents on the retail dollar. Forbes estimates
Optoro’s 2017 revenue at more than $50 million. With a growing staff of 220 in its headquarters in central Washington, D.C.,
and its contract deal with the 100-plus workers in its rented
Tennessee warehouse, overhead is substantial, and Optoro is
spending its investment capital on growth. “We’re not in profitoptimization mode,” he says.
Moore is aiming high. Off the record, he ticks off the names
of major retailers whose business he believes he can capture
and existing clients he thinks he can persuade to use more of
Optoro’s services. “Our technology is highly valuable to people
who work on a massive scale,” he says. “If they put us in place,
overnight we can provide a ton of value.” F
“OUR TECHNOLOGY IS HIGHLY
VALUABLE TO PEOPLE WHO WORK
ON A MASSIVE SCALE. IF THEY PUT
US IN PLACE, OVERNIGHT WE CAN
PROVIDE A TON OF VALUE.”
that we were leveraging data and analytics to make changes in an old industry,” Moore says. They hired three developers, who spent nearly two years coming up with a scanner and
software system, and in 2010 they launched the new business
as Optoro.
Moore likes to talk about Optoro as if it’s the only company to have mastered what’s known in business lingo as reverse
logistics (“There’s no technology platform that does what we
do”), but the Reverse Logistics Association, a trade group with
more than 100 members, has been around since 2002. According to RLA executive director Tony Sciarrotta, retailers and
manufacturers spread their business among numerous players,
many with niche specialties. Like Texas-based HYLA Mobile,
which takes returned mobile phones from manufacturers like
Samsung and retailers like Best Buy and sells them for big discounts on the international market. In 2015, FedEx acquired a
large Optoro competitor, Genco, for $1.4 billion.
Confident to a fault, Moore regularly pitches Optoro at
RLA’s annual conference in Las Vegas. In 2012, he signed his
first big retail client, BJ’s Wholesale Club, a Costco rival that
sells discount goods to members through its network of ware-
30 | FORBES ASIA OCTOBER 2017
FORBES ASIA
Combat Consultant
Ex-U.S. general Stanley McChrystal on the importance of flexible
teams, disagreement and eating just one meal a day.
a beautifully crafted bullet
that would fly straight and
true, and be lethal if aimed
correctly and fired at the
right time. But we weren’t
responsible for those two
parts of things—which is
fine, as long as you’re going
up against a somewhat
predictable enemy. But in
Iraq we got into a constantly
changing environment,
against a different kind of
enemy, and, suddenly, we
had to operate much faster
and couldn’t take our time
painting the Sistine Chapel.
We had to paint faster and
get the job done quickly. We
stopped being able to be the
bullet; we had to become the
gun. The bullet still needed to
be good, but elegance was less
important than effectiveness.
And we couldn’t do it just
once; we had to literally
change the organization on a
daily basis.
What kind of companies seek out your
consulting firm, the McChrystal Group?
DAVID YELLEN FOR FORBES
It’s not a failing company, but they’ll say,
“We are too slow making decisions. We are
ineffective at implementing decisions.”
organization that it’s in their interest. You
incentivize them to be connected to the
larger goals.
How do you create what you call a sharedconsciousness culture?
Tell people how to think about things and
the broader mission. There’s a great line we
used to use in Afghanistan: “If, when you get
on the ground, the order that we gave you is
wrong, execute the order that we should have
given you.” Think about the responsibility
you’re giving your subordinates when you
issue that instruction.
Can you create a flexible group without lots of
debate and argument?
No. In all healthy organizations, argument
happens face-to-face. You debate, argue
and move on. By the way, there’s a pile
of argument in the military. It just takes
different forms. But when the landing-craft
ramp drops and hits the beach, that’s not a
time to argue the plan.
Do you seek diversity or uniformity in teams?
Diversity is better. The challenge is creating
diversity that communicates well. If you
take a SEAL or a Ranger organization, they
Did you have to upend the classic look homogenous. But they have a range
military hierarchy?
of thinking styles. Good commanders
Not formally. But it changed
encourage diverse thinking and use that to
who got what information,
test their thinking in various directions.
how it was controlled, where
decisions were made. That was Switching subjects, how do you keep so fit?
against al Qaeda in Iraq. If
I get up and run for at least an hour and then
you think about ISIS now, ISIS is Uber.
stretch. On alternate days, I will get up and
I don’t think Uber would like the comparison.
But like Uber, ISIS has little capital
investment in what they’re doing. They’re
creating franchises, and those franchises
Your epiphany about speed and flexibility came are very well suited to the conditions on the
ground because they formed themselves,
during your career in the military, fighting al
Qaeda in Iraq and as well as groups such as ISIS. and they constantly adapt. The upside for
ISIS is that these groups are willing to call
We had purposely built a counterterrorist
themselves ISIS. If they succeed, that’s good,
force, JSOC, and over 22 years we had
but if they fail, ISIS has no investment.
tweaked it until it was unparalleled in
the world, in terms of competence and
professionalism, as well as in its use of
How do you encourage people to share power in
existing technologies. We could do things
an organization? It can seem like no one wants to.
that were literally elegant: precision raids,
It’s just not our nature. The trick is to
hostage rescues and whatnot. We were
convince people at different parts in the
do about an hour of abs and core workouts in
the house, and then I’ll go to the gym.
Then you go to the gym?
For another hour or 40 minutes of weights
and pull-ups. I almost never take a day off.
And somehow you eat just one meal a day.
I’ve been doing it for about 40 years,
just because I thought I was getting fat.
Everybody told me how stupid I was, how
it’s bad for my body. Now they’re starting
to say it’s okay, even good. In a few years,
they’ll say it’s bad again. I’m 63. If I change
suddenly now, it might kill me. F
GENERAL STANLEY MCCHRYSTAL SPOKE WITH RICH KARLGAARD, OUR EDITOR-AT-LARGE AND GLOBAL FUTURIST. THIS INTERVIEW HAS
BEEN EDITED AND CONDENSED. FOR THE EXTENDED CONVERSATION, VISIT FORBES.COM/SITES/RICHKARLGAARD.
OCTOBER 2017 FORBES ASIA | 31
FORBES ASIA
FORBES@100
During our centennial year, we’re unearthing our favorite covers.
The Postwar Dream:
Nov. 15, 1947
AS AMERICANS RETURNED home from
war, the suburbs were born.
Published the same year the first 350 homes
were sold in Levittown, New York, Forbes’
30th anniversary issue spotlighted Lancaster,
Ohio, a “progressive American” city of 24,000
people 30 miles southeast of the state capital. It
had “all the advantages of a rural as well as an
urban life.” Small-town commerce thrived at
the intersection of Main and Broad Streets. ExG.I.’s such as the “conscientious, unassuming”
Jack Fisher filled jobs at local manufacturers.
Fisher, a brawny six-foot-three, had once excelled on the local high-school basketball team;
now he tended machinery at Anchor Hocking,
a glassware maker that was the biggest business
in town, with annual sales of $64 million
(some $700 million today).
Just as the Lancaster of 1947 offered a snapshot of postwar success, the Lancaster of 2017
is a picture of the drastic change of fortune
suffered by parts of industrial America ever
since. More than 20% of Lancaster sits below
the poverty line today, compared with 14% in
Ohio overall. Anchor Hocking has recently
been through bankruptcy and traded hands
from one private-equity owner to another. And
earlier this year, Lancaster’s local newspaper,
the Lancaster Eagle-Gazette, published an
investigation titled “Seven Days of Heroin: This
Is What an Epidemic Looks Like.” It featured
two numbers uglier than any from even the
most indebted balance sheet: In just one week,
in greater Cincinnati, 180 overdoses and 18
deaths.
FAST-FORWARD
Kings of Capitalism
1947: A package of stories on America’s “50 Foremost” business leaders listed
such luminaries as Henry Ford II, David Sarnoff, Samuel Goldwyn, Thomas J.
Watson and Nelson Rockefeller.
2017: Our recently published centennial issue featured a similar concept—essays
from the “100 Greatest Living Business Minds”—but centered on a much different
group of people: almost no heirs and very few hired hands, mostly investors and
entrepreneurs like Warren Buffett, Bill Gates, Oprah Winfrey and Elon Musk.
32 | FORBES ASIA OCTOBER 2017
AMAZING ADS
For the Long Haul
By encouraging truck driving as a
profession—you too could become
a “Gentleman of the Highway”—
International Harvester, a maker of
truck parts, primed the pump for
future generations of customers.
CRYSTAL-BALL CALLS
Forecast: Cloudy
Some of Forbes’ predictions for
the 30 years following 1947 were a
little wide of the mark. Among our
botched prophecies: widespread
helicopter use, outright bans on
monopolies and the ability to
regulate the weather.
LEFT TO RIGHT: AP; AFP/GETTY IMAGES; TODD WILLIAMSON/GETTY IMAGES; PLANET NEWS ARCHIVE/GETTY IMAGES
BY ABRAM BROWN
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Asia Business Report
brings you the latest
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and analysis at the
start of your day.
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0630, 0730, 0830 and 0930 hrs (HKT)
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34 | FORBES ASIA OCTOBER 2017
A Cut
Henry Davis made
a billion-dollar fortune
by carefully growing
his family’s smallscale slaughterhouse
into one of the U.S.’
top suppliers of highquality beef. It’s always
been quality over
quantity, and Greater
Omaha’s customers like
it that way—even when
they can’t get all the
meat they want.
Above
JAMEL TOPPIN FOR FORBES
BY CHLOE SORVINO
OCTOBER 2017 FORBES ASIA | 35
FORBES ASIA
GREATER OMAHA
H
enry Davis glides his knife through a 40-ounce
tomahawk ribeye, its bone running from his fingertip down to his elbow. He cuts into the meat
to check how the chef at Spencer’s steak house in
downtown Omaha has cooked it. It’s a touch more
than rare, and the cool, marbled center is exactly to his liking.
Davis is more than a Spencer’s regular. He is the owner of Greater
Omaha Packing, one of the top slaughterhouses in the country.
The 3-inch-thick steaks he and his three guests are eating were
hand-delivered to the kitchen, fresh off the line of his Greater
Omaha plant a few miles south.
On this hot summer night in June, Davis, a 66-year-old who
wears thin-rimmed silver glasses, is in a celebratory mood. Just
the day before, his 97-year-old company shipped its first box of
beef to China since 2003, mere hours after the U.S. Department
of Agriculture finalized a new trade deal that reopened the $2.5
billion market to American butchers. His plant was one of two
slaughterhouses in the U.S. initially approved to ship to China,
and his beef arrived first. He celebrated by taking 30 Chinese trade
representatives to Spencer’s. (Donald Trump eventually took credit
for this coup in July, claiming in a speech that Davis hugged him
a lot of people, and Greater Omaha has been able to respond to
the needs of the people. They want good steak,” says Bob Oros, an
independent beef analyst.
Greater Omaha is intentionally lean. The nation’s top four
suppliers, JBS USA Holdings, Tyson, Cargill and National Beef
Packing, account for about 75% of the U.S. market in terms of
revenue; Greater Omaha, the next biggest, has 2%. It sells 700
million pounds of beef a year, a tiny slice of the 25 billion pounds
processed in the U.S. annually.
Despite being one of the oldest beef packers in the country,
Greater Omaha has opted not to grow too big. It operates just
one plant and chooses not to sell to big chains like Costco, WalMart and McDonald’s (JBS and Cargill are the fast food giant’s
hamburger-meat suppliers). It also keeps daily production to 2,400
cattle. “We don’t want gigantic customers. The big chain stores?
We don’t have enough beef. If they run a sale, it would be too large
of a percentage of our product. I don’t want that,” Davis says.
This approach allows Davis’ cattle buyers to be extremely
choosy. Its buyers select each steer—either Angus or Hereford
breeds—individually from independent ranches that feed cattle by
hand. “The truth is we buy the fact that hand-fed cattle are better
than machine-fed cattle,” says Angelo Fili, Greater
Omaha’s 61-year-old, tobacco-chewing executive
vice president. “A company that does 30,000 cattle a
day, they’re already going to get some cattle that are
prime, and they’re gonna get some animals that are
raw. We’re after the higher-end stuff.” To that point,
nearly all its cattle come from Nebraska and Iowa.
Nebraska, in particular, has become a preferred spot
for cattle raising, thanks to its climate and excellent
grassland, which sits atop the largest aquifer in the
country. Greater Omaha claims that helps ranchers
raise cattle superior to those from drought-prone
states like Texas and California.
Greater Omaha also tailors cuts to a customer’s specifications, sending them pounds of just one cut, such
as Porterhouse, or having an imam bless steer to meet halal
standards. Its steaks are served at some of the U.S.’s top eateries,
including Peter Luger, Minetta Tavern and Marea in New York
City, French Laundry in Napa Valley, Ruth’s Chris Steak Houses
and Wolfgang Puck restaurants. These prime cuts help fatten the
company’s bottom line, giving it an operating margin estimated
to be 6% (Davis won’t comment). That’s much higher than the
industry average of 3% and better than that of JBS, Tyson and
National Beef ’s meat businesses (privately held Cargill also won’t
confirm). “The big packers have to compete with us. We are
agile,” Davis says.
DAVIS’ PLANT WAS ONE OF TWO
SLAUGHTERHOUSES IN THE U.S.
INITIALLY APPROVED TO SHIP TO
CHINA, AND HIS BEEF ARRIVED
FIRST. CHINA IS THE LATEST
FRONTIER FOR GREATER OMAHA.
for getting China approved. Davis, whose immigrant grandfather
started Greater Omaha, says he did thank the president and shook
his hand, though there was no embrace.)
China is the latest frontier for Greater Omaha, which was the
first to sell U.S. beef in Japan (2008) and Saudi Arabia (May 2017).
Also the biggest American seller in the European Union, it now
exports to 69 countries. Despite the huge potential of these markets, Davis sets limits and is wary of selling too much to any one
customer—be it a local restaurant distributor, a small supermarket
chain, a hotel group or even a country. Last year, exports accounted for just 16% of its $1.4 billion in sales. “I’m very careful how I
do that,” Davis says. “We don’t get overdependent on any market
or any raw material or any customer.”
His thoughtful approach and decision to carefully carve out a
high-end, more profitable niche has helped him grow the business
tenfold since he took over in 1987. It’s been enough to turn Davis,
who owns 100% of the company, into one of the country’s richest
butchers, worth an estimated $1 billion. He has big plans ahead,
but nothing that will compromise his high-quality beef.
“We are a country of meat eaters. It’s a spiritual experience for
36 | FORBES ASIA OCTOBER 2017
GREATER OMAHA’S STORY starts with an immigrant in
search of a better life. Davis’ grandfather, Herman Cohen, fled
the Russian empire to America in 1905 at age 11 to escape discrimination and pogroms. Cohen served in the U.S. infantry in
World War I and reentered civilian life with $100 in his pocket.
In 1920, he moved to Omaha, keen on investing in beef. At the
stockyards, Cohen would pick a single steer every day, butcher
JAMEL TOPPIN FOR FORBES
A U.S. Department of Agriculture grader examines Greater Omaha’s meat for color, marbling and texture.
it himself and then sell the beef, while a partner sold the hides.
The small operation grew slowly to a few animals a day. Cohen’s
youngest daughter, Florence, married Davis’ father, Pennie, who
joined his father-in-law’s business in 1945 and soon became
president. They kept it simple, butchering the meat into hindquarters and forequarters sections only, which would be sold to a
butcher who would cut the meat into ready-to-cook sizes. It was
a good time to be in the business, as America doubled its beef
consumption in the prosperous years following World War II.
Families spent nearly one fourth of their food budget on meat in
1950, according to the American Meat Institute.
Davis was born in 1951 and witnessed the glory years of
Omaha’s beef industry. He grew up walking through the livestock auctions on the exchange floor and attending meetings
with his father and other Omaha slaughterhouse managers.
When he was 4 years old, Omaha beat out Chicago to become
the nation’s top spot for beef processing. He later spent summers
at the plant doing everything from buying cattle to butchering
meat on the assembly line.
By the 1970s, Omaha had lost its edge. Slaughterhouses hightailed it out of the city to be closer to rural feedlots. Davis joined
the business full-time in 1973 after graduating from the University
of Denver with a degree in business and a minor in computer science. At the time, Greater Omaha had 40 employees and pro-
cessed 232 steer a day. “We were too small to have roles. Everybody did everything,” Davis recalls.
As a young exec, Davis had big ideas. He purchased the company’s first computer, a Polymorphic System 8813, for $5,870 in
1980. There was no software available to help the slaughterhouse
track receivables and project future sales, so he wrote it himself.
“We had a good business model back then, and I wasn’t going to
change my business to fit the software,” Davis says.
As he started to write the code in a Unix shell script, which the
company still uses today, Davis built software that would analyze
data such as how many pounds of meat were shipped and what
percentage of fat each animal had. For the first time, the company
could predict the number of cattle needed for the next week, how
much each truckload cost the company to process and how much
it would make from a sale to a meat purveyor.
Davis took over as president in 1987, when Greater Omaha
was bringing in $130 million in sales a year from about 650 cattle
a day. He soon revolutionized the company by jumping on a
trend Iowa Beef Packers had started. IBP (acquired by Tyson for
$3.2 billion in 2001) had invented boxed beef, in which one cut
of beef, like loin or rib, was packed in vacuum-sealed packages
and shipped in boxes that were more manageable for a grocer
or a restaurant distributor. Previously, packers sold only larger
hindquarters and forequarter cuts. More butchering meant higher
OCTOBER 2017 FORBES ASIA | 37
FORBES ASIA
GREATER OMAHA
prices, and Davis launched a production line for boxed beef in
1992. “Most of the industry followed along. Those that didn’t are
no longer in business,” Davis says.
DEMONSTRATING HIS OWN agility, the lean, 5-foot-8 Davis
whips his Mercedes Benz S550 Coupe onto L Street, just a few
blocks from Omaha’s historic ten-story Livestock Exchange Building. Davis drives this car to work most days but also owns a 1965
Lotus and a 1966 Alfa Romeo. His most prized automobile is a
1966 Ford GT40, the first American race car to win at Le Mans,
which is estimated to be worth millions. He raced the car the next
year at Pebble Beach and won in his class. He says he’s stopped
racing old cars after seeing too many crashes and now races a
modern Porsche.
Davis is taking me for a drive through Omaha’s beef history,
pointing out streets that used to be filled with blocks of stockyards and thousands of cattle. He slows the Merc as he nears
the former Livestock Exchange Building, now a brown-brick
landmark sometimes used for weddings and events. “There used
to be 36 packers here,” he says with a nod before turning into his
own headquarters. Pointing to a redbrick building on his right,
he adds, “That was one right over there.” Just four packers are left
and slaughtered here. Then their carcasses are rigged to a machine that strips off hide in one fast pull. From there the meat is
chilled for two days while a USDA official inspects the marbling
and marks each with a grade—select, choice or prime. The meat
then winds its way through conveyor belts and machines spread
across several rooms, as the beef is separated into sections. At
the very end of the line, butchers cut to order. In a new $12 million addition, the beef trimmings are ground into fresh (never
frozen) hamburger meat. (The trimmings are also sold to distributors who resell to smaller chains like Five Napkin Burger
and Five Guys.) Contrary to expectations, the plant is pristine,
and there is no odor. The vast stainless-steel rooms have a lablike quality to them.
Davis designed the huge space to be flexible, and he’s investing $40 million to erect a 65,000-square-foot eight-story coldstorage warehouse. Using artificial intelligence, robots will pull
the boxed beef off shelves and fulfill orders. The new warehouse
will open up space in the existing plant to allow Davis to come
up with additional high-margin items. He’s already planning
on doubling his ground-beef production to an estimated 70
million pounds annually by next year. Greater Omaha has also
started selling to meal-delivery outfits like AmazonFresh and
Hello Fresh as well as offering direct-to-consumer
steaks, called TenderAge. (It couldn’t use the
name Omaha Steaks, as it’s already taken by a
rival.) The steaks it sells online are some of its
most expensive and premium cuts: $320 for eight
14-ounce ribeyes or $180 for eight 6-ounce filets.
Davis says he will never abandon his restaurant customers, a business that is still quite lucrative. Pat LaFrieda Meat Purveyors, for instance,
which sells to thousands of restaurants around the
U.S., has been ordering from Davis for decades.
“Greater Omaha actually selects product specifically for us, and that means the world to us,” LaFrieda says.
Lawry’s, which operates ten restaurants and buys more than
750,000 pounds of meat a year, concurs. Executive chef Ryan
Wilson says he’s been transitioning all his locations to exclusively use Greater Omaha beef, despite the fact that the prices are a
bit higher and that he can’t always get as much as he wants. “You
oftentimes have to pay more of a premium up front,” Wilson
says. “But I think it’s worth it,”
Despite the demand, Davis says, he has no plans to open
another plant. He’s toured two that were modeled after his but
wasn’t interested. He also turned down buyout offers, including two since the trade deal with China. “I don’t open that door
because the plant’s not for sale,” he says.
Davis has no heir apparent and no succession plan. Divorced
in 2006, he has two children in Chicago: a 26-year-old daughter
who is a psychotherapist and a 23-year-old son who just started
law school. Davis says neither has any interest in coming back
to Omaha like he did. He’ll figure out what that means for the
business when the time comes but doesn’t think that will be
anytime soon: “I’ve never enjoyed this more in my life. I’m not
giving this up. You’re not getting me out of here.” F
DAVIS HAS NO HEIR APPARENT AND
NO SUCCESSION PLAN. “I’VE NEVER
ENJOYED THIS MORE IN MY LIFE. I’M
NOT GIVING THIS UP. YOU’RE NOT
GETTING ME OUT OF HERE.”
in Omaha, and Davis’ plant, still in view of the exchange building, is the city’s largest.
Davis’ office is 200 yards from the main packing floor, just
past the sales department. Inside, his desk is crowded with three
computer monitors. One shows the movements in the beef futures market, another is open to his email, and the third is used
to access the internet and work on spreadsheets. There’s also a
tablet and a smartphone for when Davis needs more bandwidth.
“Every morning I get up, I can’t wait to go to work,” he says with
a grin from behind his desk.
Most days he dons his white smock and hairnet and steps
into the freezing-cold 400,000-square-foot stainless-steel plant,
which is open to visitors ranging from curious chefs to family
ranchers. He and his executive team designed it themselves in
the late 1990s. He didn’t hire an engineer because they “knew
this better than anybody else.” The renovation was necessary
in part because of the growing size of the steers. The average
weight of cattle has nearly doubled in three decades as more are
being fed corn rather than grass. “When cattle got bigger, all of
a sudden they didn’t fit through the line,” Davis says.
Each day 2,400 cattle are brought in from the outside pens
38 | FORBES ASIA OCTOBER 2017
At $20 billion, WeWork is the most valuable startup in America outside of Uber and
Airbnb. The bet: Rather than just building co-working spaces, it’s going to change
everyone’s office experience. BY STEVEN BERTONI
40 | FORBES ASIA OCTOBER 2017
JAMEL TOPPIN FOR FORBES
The Way We Work
FORBES ASIA
FUTURE OF CITIES
A
Cubicle killers: WeWork cofounders
Adam Neumann (left) and Miguel
McKelvey have built an office-space
powerhouse by combining communal
vibes with capitalist drive.
dam Neumann, the
frenetic cofounder and CEO of WeWork, was pacing
back and forth in his
office in New York City’s Chelsea
neighborhood, ignoring the heavy
bag, the Peloton spin bike and the
generously stocked bar in favor of
something more urgent: the clock.
Softbank boss Masayoshi Son, Japan’s wealthiest man and one of the
world’s great investors, had promised the 38-year-old former Israeli naval officer two hours of his
time for a full-blown tour of the coworking innovator’s headquarters.
And he was an hour and a half late.
“Masa arrives, looks at his watch
and tells me, ‘I’m so sorry, but I
only have 12 minutes,’ ” Neumann
says in a raspy voice. And after precisely 12 minutes of walk-around,
Son said he had to go.
But he offered Neumann a
chance to join him in his car. Neumann grabbed his pitch deck and
climbed into what would become a
$20 billion ride.
Son told Neumann to put away
his presentation, pulled out his
iPad and started sketching the outlines of an investment. “I thought
the valuation had been too high for
a company its size and that someone could easily copy it,” Son tells
Forbes. “But no one could. The idea
was easy to talk about but hard to
execute—Adam proved he can do
what he says.”
As the ride ended, Son signed
his name on the iPad sketch, drew
a line beside it and handed Neumann the pen. “Even today, I still
get goose bumps thinking about
it,” Neumann says, holding up his
lanky forearm to show that the hairs are
standing straight up. “Half an hour later,
he emails me this.” Neumann retrieves on
his iPhone a photo of the digital cocktailnapkin contract—a tangle of lines laying
out a global partnership, with Neumann’s
scrawled signature in blue ink beside Masa’s in red uppercase.
The backseat term sheet emerged from
the lawyers as a two-part deal: Softbank
would invest $3 billion directly into WeWork ($1.3 billion via a tender offer of existing employee stock and $1.7 billion in
new equity). A separate $1.4 billion was to
be spread across three new entities to expand WeWork across Asia: WeWork Japan,
WeWork Pacific, WeWork China. Neumann’s team would build and manage the
offices, and Softbank would handle the
local relationships. Valuation: $20 billion.
WeWork, which straddles real estate, hospitality and technology, was now worth
about the same as hotel operator Hilton
Worldwide and more than commercial real
estate giant Boston Properties and social
media sensation Snap.
At the deal closing in Tokyo in March
2017, Neumann was joined by his cofounder and fellow billionaire, Miguel
McKelvey, a sinewy 43-year-old former
University of Oregon basketball player. “Masa turns to me and asks, ‘In a fight,
who wins—the smart guy or the crazy
guy?’ ” Neumann says. “I say, ‘Crazy guy,’
and he looks at me and says, ‘You are correct, but you and Miguel are not crazy
enough.’ ”
“I told Adam not to be proud that WeWork was growing organically without a
large sales force or spending big marketing
dollars,” Son says. “Make it ten times bigger than your original plan. If you think in
that manner, the valuation is cheap.” How
cheap? “It can be worth a few hundred billion dollars.”
THE CRAZIEST ONE OF all would
seem to be Son, once you try to figure out
exactly what he’s valuing at $20 billion—
a figure exceeded only by Uber and Airbnb among U.S. startups (digital intelligence
outfit Palantir has a valuation similar to
that of WeWork). It’s an office company . . .
that doesn’t own any offices. Like Uber and
Airbnb, WeWork is essentially a middleman, renting space from others at wholesale and then upcharging for cool design,
flexible leases and built-in services like internet, reception, mailroom and cleaning. (Free coffee and beer, too.) WeWork’s
value-added is office culture—at massive
scale. Starting with one New York City
space in 2010, the company now has 163
locations—a figure that has tripled since
OCTOBER 2017 FORBES ASIA | 41
FORBES ASIA
FUTURE OF CITIES
La Fayette, Paris
the end of 2015—spread across 52 cities worldwide. Its 2,900-plus
employees manage 10 million square feet for 150,000 members
who pay anywhere from $220 a month for the use of a common
area to $22,000 for a 50-person office.
“No one is investing in a co-working company worth $20 billion. That doesn’t exist,” Neumann says. “Our valuation and size
today are much more based on our energy and spirituality than it
is on a multiple of revenue.”
That’s most certainly true—the company is on track to do an
estimated $1.3 billion in revenue in 2017 (with operating margins around 30%), giving it a price-to-sales ratio higher than what
a more conventional growth company might garner as a multiple of cash flow. But this “energy and spirituality” premium seems
high no matter how you measure it. Son’s $20 billion valuation
translates to $133,333 per member (even though the ability to
walk away at any time is part of the model), each of whom generates $8,000 a year on average. It values each foot of space it rents
at $2,000, compared with, say, $325 to buy Class A real estate in a
tech hub like Austin.
Even before Son came along, the likes of Benchmark, Fidelity,
Goldman Sachs and JPMorgan had put $1.55 billion into WeWork
42 | FORBES ASIA OCTOBER 2017
Weihai Lu, Shanghai
Fulton Center, New York
based on the idea that traditional metrics don’t reflect its disruptive model. “They create a vibrant and fun environment and fill it
with excited people to energize the work experience,” says Benchmark’s Bruce Dunlevie. Jamie Dimon, JPMorgan’s CEO, calls WeWork a way of life: “They’ve built a hybrid hospitality-and-tech
company that’s entirely different from anything in real estate.”
But servicing startups will get you only so far. Their bet—and
especially Son’s—is that WeWork can change how pretty much everyone experiences an office. Over the past couple years, WeWork
has signed up companies like GM, GE, Samsung, Salesforce, Bank
of America and Bacardi. Earlier this year, WeWork allotted an entire building in Greenwich Village to IBM, and now big companies
generate 30% of monthly sales.
“It’s now a core real estate solution for our people,” says Matt
Donovan, who runs marketing for Microsoft’s Office 365 brand
and has put more than 300 employees into WeWork locales. “They
get access to different locations, plus insight and feedback from
other WeWork members who use our products.”
For growing companies WeWork offers a way to enter new cities without the hassle of scouting locations, negotiating contracts,
designing the space and hiring vendors. “There is no reason to
WEWORK PHOTOS CLOCKWISE FROM BOTTOM LEFT: BENOIT FLORENCON; MECHI FAHS; SETH POWERS.
Torre Bellini, Buenos Aires
rent office space,” says Josh Kushner, the founder of the VC firm
Thrive Capital and cofounder of Oscar Health, which launched
its Los Angeles market from a WeWork site. “It’s a one-stop shop.
Business is hard enough, and these guys take out all the friction.”
KIYOSHI OTA/BLOOMBERG
WITH ITS SPRAWLING MANSION, ancient stone walls, fish
ponds and acres of tightly mowed fields, Eridge Estate, a one-hour
train ride south of London, is straight out of Downton Abbey. But
in mid-August, the tidy, aristocratic park—where Henry VIII led
royal deer hunts—looks as if the freewheeling Burning Man tribe
has invaded from across the Atlantic.
More than 1,200 tents, trailers and tepees have sprouted in the
meadow. There are food trucks and beer trucks and dozens of
bars. On one edge of the field (near the roller disco, rock-climbing wall and a building façade that reads “Mac ’n’ Cheese”) amateur acrobats dangle from a full-size trapeze. On the other side is a
strobing Coachella-worthy stage, where indie band Florence and
the Machine will later play to a crowd of 5,000-plus.
Packs of twentysomethings tour the scene in jeans, galoshes
and tight T-shirts printed in half a dozen languages: English block
letters, Japanese characters, Hebrew script.
Branded on the back of each shirt is the word
“We” enclosed in a white circle. Welcome to
“WeWork Summer Camp.”
Summer Camp started in 2012 as a gathering of 300 customers and employees in upstate New York. For this year’s gathering,
WeWork flew in 2,000 employees from 15
countries to the English countryside for three
days of dancing, crafts, company presentations and plenty of booze (some 3,000 WeWork members will join the party halfway
through).
Neumann, who has never met a microphone he doesn’t like, takes the stage a halfdozen times. Channeling Tony Robbins, he
talks about finding your superpower, explains that if you have a higher purpose the
money will follow and encourages everyone
to carry the love and vibrations of camp back
to the WeWork offices.
For a cynic, it’s easy to dismiss Summer
Masayoshi Son
Camp as the cash-burning boondoggle of
an overheated startup. To Neumann it’s a
distillation of what WeWork does. “Culture
is our intellectual property,” he says. “Summer Camp is a way of telling our employees
they are extremely important, even though
sometimes it doesn’t feel that way. And
there’s a team around you here that believes
in the mission.”
Mixed in with executive presentations
and workshops are paddleboarding and
poetry, basketball and basket weaving, a
class on wild foraging and another on how
to infuse vodka with almost anything. There is finance team flip
cup, real estate versus legal department kickball, an international soccer tournament (which the U.K. squad wins), a talent show,
and a music set by TenaciousWe, an employee band.
“Both Adam and Miguel come from community upbringings and understand the power of it,” says Michael Gross, the former Morgan’s Hotel CEO and current WeWork vice chairman. “It
helped them survive.”
NEUMANN AND MCKELVEY grew up on opposite ends of the
world, but their childhoods, critically, were transient and communal. Neumann was born in Israel to a pair of doctors who divorced
when he was young. He lived in 13 places during his first 22 years,
including two years in Indianapolis and a stint on a kibbutz where
his mother was the doctor. Severely dyslexic, Neumann couldn’t
read or write until third grade but still won entrance into the Israeli Navy’s elite officer program. After serving, he moved to New
York to live with his sister Adi, then a professional model and a
former Miss Teen Israel.
McKelvey, meanwhile, was raised in Eugene, Oregon, in a col-
“MASA TURNS TO ME AND ASKS, ‘IN A
FIGHT, WHO WINS—THE SMART GUY OR
THE CRAZY GUY?’” NEUMANN SAYS. “I
SAY, ‘CRAZY GUY,’ AND HE LOOKS AT ME
AND SAYS, ‘YOU ARE CORRECT, BUT YOU
AND MIGUEL ARE NOT CRAZY ENOUGH.’”
OCTOBER 2017 FORBES ASIA | 43
FORBES ASIA
FUTURE OF CITIES
lective of activist single mothers who valued causes over cash. It
was a childhood in which homes changed often and boxes of federally funded food arrived at the front door. In the family Volvo,
McKelvey would drop rubber balls through the rusted-out holes
in the floor so he could watch them bounce behind the car. He
loved the annual trip to the King’s Table buffet. “It was a privilege
to eat as much as you wanted rather than scrap for what you could
get,” McKelvey says, surveying a headquarters overflowing with
free coffee, beer and snacks. “I’d eat bowls of soft-serve ice cream
until I felt sick.” A gifted student, the 6-foot-8 McKelvey played
basketball at Colorado College before transferring to the University of Oregon, where he juggled big-time college sports and demanding architecture studies.
The two met in New York through a mutual friend and bonded quickly over their backgrounds and competitive streaks. Neumann had started a baby-clothes company, Egg Baby (a big seller: pants with built-in kneepads called Krawlers), subletting part
of his space to make rent. McKelvey was an architect (grinding out
store designs for clients like American Apparel), and Neumann
talked up a plan to rent cheap space that they could divide and upsell as offices.
Neumann persuaded his landlord, Joshua Guttman, to rent
him a floor in Brooklyn, and they launched Green Desk—an
earth-friendly co-working space. It was a hit. Neumann and
McKelvey looked to expand to Manhattan. Guttman instead want-
viding enough amenities and perks so that no one hates flying
coach. A single extra desk, over the span of a decade, can translate
into about $80,000 in sales. But unlike, say, a Boeing 777, with its
standardized space, each project has unique dimensions and demons. WeWork has opened in former customs houses, breweries,
warehouses and, in Shanghai, an old opium factory.
To make the most of every millimeter, WeWork uses 3-D scanners to measure space and builds virtual-reality models to help design each floor before turning a single screw. Heat-mapping technology tracks traffic and usage to find the right balance of shared
space, desks and conference rooms. “Landlords just sell aluminum. We make iPhones,” says Dave Fano, the growth officer and
resident mad scientist.
Scale has created price advantages and provided WeWork with
unique expertise. Since 2010, Neumann’s team has installed 9.6
million pounds of aluminum framing, hung 12 million square feet
of glass walls, laid 8.8 million square feet of oak flooring and built
12,000 phone booths. WeWork does everything itself: location
scouting, contracting, interior design. It even makes the thousands
of braces that secure the miles of glass walls that WeWork installs.
This year, increased tech efficiency and massive buying power
have pushed the cost of adding a new desk down 45%, to $8,550.
Solving the construction side looks easy compared with the
human problems that arise when a company grows from 2 people to more than 2,000 in seven years. Neumann has recruited
seasoned executives from real estate, hospitality,
media and tech to manage the once scrappy startup, including CFO Artie Minson (Time Warner),
president Rich Gomel (Starwood), COO Jennifer Berrent (WilmerHale), vice chairman Michael
Gross (Morgan Hotels) and chief product officer
Shiva Rajaraman (Spotify, YouTube).
There have been growing pains: a public scuffle with a cleaners union in 2015; leaked documents showing lowered forecasts
in 2016; layoffs that hit 7% of the staff that same year. Former
employees have sued the company, claiming they were overworked and underpaid. Partly in response to these problems,
McKelvey has recently taken the role of “culture officer”—a softsounding, ironic title at a company that claims culture as its core
product. He oversees HR, training, compensation and benefits
for thousands of employees deployed across countries, languages
and customs.
Neumann, for his part, has swapped a macho, military style
for a more professional stance. “He’s realized that motivating with
fear is not effective. He used to think fear was a positive thing,”
McKelvey says. “Adam now understands that treating people with
dignity and respect, and fueling them with positive energy, is a
much better way, and he has an incredible ability to do it.”
Asked about this shift, Neumann spends a moment contemplating the surface of his desk. “How many organizations are going
to be comfortable with a cofounder saying that to a reporter? I’m
good with it—it’s kind of the culture we talk about.”
Neumann says he owes the change to his wife, Rebekah, who
served as WeWork’s first brand officer and pointed out the flaw
after a month watching her husband in the office. Neumann took
“LANDLORDS JUST SELL ALUMINUM.
WE MAKE IPHONES.”
ed to fill vacant space in his Brooklyn buildings. They sold him
their stake for $3 million and bet their winnings on a Manhattan
co-working play based on the lessons learned from the kibbutz
and the collective. Real estate meets culture. That was 2010; seven
years later, their combined stake in WeWork is worth $4.3 billion.
IN THE HEART OF WEWORK headquarters sits a 60-inch
touchscreen monitor with the company’s 163 locations pinned
on a Google Map. WeWork’s proprietary software turns the hippie-sounding special sauce into data. Finger taps reveal updates
on construction, deliveries and maintenance. A swipe gives you
data on potential new neighborhoods, listing public transportation, coffee shops, gyms and nearby retail brands that signal a ripe
location (Equinox and Urban Outfitters are strong indicators).
“They have to buy aluminum and glass, build desks and make sure
the plumbing and the air-conditioning and the Wi-Fi all work,”
Benchmark’s Dunlevie says. “It’s a grubby, execution-sensitive
business.”
WeWork has built a complex technology and logistics system
to handle all that grubbiness, and in September, it opened ten new
locations, more than it launched in a typical year until 2014. In
some ways WeWork looks less like a property manager than like
an airline—squeeze in the maximum number of seats while pro-
44 | FORBES ASIA OCTOBER 2017
the criticism to heart. “I met with my spiritual teacher and went
to a therapist. I realized that if I came from a positive place, not
only will everyone feel better and I will feel happier, but the company will work better.”
DURING THE 12-MINUTE tour that confirmed enough for
Son to eventually write a $4 billion check, Neumann had time
to show off just one space: WeWork’s R&D center, which is
part Apple Store, part Home Depot. Laptops, touchscreens and
iPhones are wired to doors, lamps, fixtures and deadbolts. There’s
a test desk that, like a driver’s seat, adjusts to saved height settings with the swipe of an ID. Next to it, a prototype phone booth
matches lighting and temperature to the user’s preference. A keyless entry system, which costs about $3,000 off the rack, has been
replaced by a $400 WeWork version powered by a cheap Raspberry Pi computer.
WeWork plans to turn each office into one giant connected
device that adapts to each user and sends constant feedback to
WeWork’s mission control. For Softbank vice chairman Ron Fisher, who sits on WeWork’s board, this tech leap drove the investment, since it will allow WeWork to efficiently scale to hundreds
of spaces and serve millions of members. “We did an enormous
amount of financial modeling—how they can grow, the margins
they can generate, the cash flows they can create,” he says.
To Neumann this technology-driven efficiency will become
a product all its own, something like a WeOS, which will make
WeWork indispensable even to companies that don’t have an
interest in co-working. Instead, WeWork will be able to design,
build out and run their offices. Additional revenue can come
via renting WeWork’s tech stack and staffing WeWork managers to foster community and keep the space running smoothly. For companies, it’s a way to inject the WeWork vibe into staid
offices. For WeWork, the program takes the asset-light model a
step further by deemphasizing its biggest cost and risk—longterm office leases.
To pull off both WeOS and its continued global expansion,
WeWork must solve what Neumann calls “the trillion-dollar
question”—how to keep each WeWork feeling authentic and artisanal as it reaches McDonald’s-size scale. “We need to pay attention to the whole space—every room, chair and table—so it feels
uplifting and inspiring,” McKelvey says. “We have to train our
team members to run the space and promote community. If we
do all that, we create this positive energy that inspires people.”
For Neumann it all goes back to the kibbutz of his youth.
He remembers that it was hard to make friends at first. However, his family had the only VCR, and Neumann finally got
some kids to come to the house to watch movies. But the VCR
was gone. His mom had taken it to the hospital for a 24-yearold cancer patient with little time left. “The other kids were
extremely understanding, and we still ended up hanging out
together,” Neumann says, tugging at his T-shirt, his face reddening and his eyes tearing up. “The funny thing is that everyone soon completely forgot about the VCR. And then one day,
two months later, we came into my house and the VCR had
returned. Nobody had to ask why.” F
WEWORK AND NAKED HUB
BATTLE IT OUT IN ASIA
South African Grant Horsfield, founder and chairman
of Naked Hub, China’s largest co-working operator, reenacts an exchange he had
with Christian Lee, managing
director of WeWork Asia, in
which Horsfield did his best
Winston Churchill impression: “Shanghai is our turf.
We’ll fight on the water, we’ll
fight to the sky, we’ll fight on
the land, we will not give up
Shanghai!” As he utters each
word, he pounds his fists on
the coffee table. “We will
take Hong Kong as well.”
A Naked Hub work area on Hong
Naked Hub, part of the
Kong’s Bonham Strand.
Naked hospitality group,
started out offering luxury retreats in the mountains of Moganshan, a place long known as an escape for the Shanghai elite. It
ventured into hip co-working environments in 2015, commands
14 locations in Shanghai (WeWork has 4 there) and is the market leader in Asia. In July, Naked Hub merged with Southeast
Asia’s largest co-working operator, JustCo. Together the pair
boasts 41 co-working offices in nine cities. With new locations
being built in Jakarta, Bangkok and Kuala Lumpur, their Asian
empire is growing. Not to be outdone, WeWork recently acquired Singapore’s co-working provider Spacemob in an effort
to target Southeast Asia and Korea.
Jonathan Wright, associate director of flexible work space
services at Colliers, on the flurry of activity: “WeWork and Naked
are actively negotiating a number of deals in the market right
now to expand their footprint in tier-one cities,” he says. The demand has far exceeded his own research estimates. “Corporate
occupiers are taking the sector more seriously in these centers.”
In Hong Kong, a Naked Hub site opened last month in the
trendy neighborhood of Sheung Wan while parts of the building are still under construction. Nonetheless, three floors of the
building are already fully occupied. Neighboring Sai Ying Pun
will be unveiled next month. Across Victoria Harbor, another
site in Kowloon East is being developed.
There are others competing for dominance in the region.
Chinese co-working unicorn URWork is flexing its muscles with
88 centers across 22 cities in mainland China, Hong Kong and
Singapore. The two-year-old operator is backed by heavyweight investors including Sequoia Capital, Alibaba’s Ant Financial and Zhen Fund. Beyond Asia, URWork has lofty ambitions to open more locations in the U.S., and to challenge
WeWork by looking at cities like London, Paris and Berlin.
—Pamela Ambler
OCTOBER 2017 FORBES ASIA | 45
FORBES ASIA
STRATEGIES
The Right
Chemistry
Incyte has one cancer blockbuster, and it’s got Wall Street
banking on another. Its secret: embracing an older age of pharma.
BY MATTHEW HERPER
S
usan Waite, 48, still remembers hearing her disease’s
name, myelofibrosis, for the first time five years ago.
“You Google,” she says. “I know you’re not supposed
to, but everybody does. And at the time the average
life expectancy was two and a half years.”
This rare cancer was turning her bone marrow, which produces blood cells, into scar tissue, leaving her anemic. She had
one child in high school and two more in college, and was so
tired she’d gone from being a social butterfly to a person who
goes to bed right after dinner. Her spleen was so enlarged with
blood cells that it hurt and prevented her from eating. Then her
doctor offered her a pill called Jakafi, manufactured by a Wilmington, Delaware, company called Incyte. She felt better in days.
After dinner at a restaurant, she insisted her husband stay out
with her to hear a band play. Her spleen shrank. “I was able to
eat full meals again,” she says. “It was very exciting.” Now? She’s
still a bit anemic, but she’s doing well. “I feel almost normal,”
she says.
Jakafi has transformed Incyte into one of Wall Street’s favorite stocks and a perennial subject of takeover speculation—
in part because of Jakafi’s efficacy and in part because of its list
price ($11,587 a month, indefinitely, usually covered by insurance). Last year Incyte had a net income of $104 million on
sales of $1.1 billion, up 1,496% and 47% from the prior year.
Its shares have sextupled over the past five years, and it has a
$25 billion market capitalization.
Incyte’s secret has been to stick to the traditional work
of large pharmaceutical companies even as other firms have
chased bright, shiny new technologies. Incyte’s 1,000 employees still work mostly in Delaware, a stick-in-the mud
stance at a time when companies from drug giant Merck
to biotech firm Alexion are setting up shop in Boston to be
closer to the hot zones of biology research. But more than
that, Incyte is focused on the basic chemistry of making drug
molecules, a part of the drug-discovery process that many
46 | FORBES ASIA OCTOBER 2017
larger companies increasingly outsource.
Incyte already has two follow-ups: an arthritis medicine
being developed with Eli Lilly that is approved in Europe
and will be filed by early 2018 with the U.S. Food & Drug
Administration, and a second cancer drug, for which investor excitement is reaching a fever pitch. Hervé Hoppenot, the
57-year-old Big Pharma veteran who took over as Incyte’s chief
executive in 2014, says he sees the company playing a role in a
transformation of the way the health care system treats cancer.
“If we are successful, the entire cost of treating cancer
should be drugs,” Hoppenot says. “That is my hope, not from a
business standpoint but from a medical standpoint. What you
would like is being able to replace palliative treatment and hospital treatment for patients who are a few months from dying
with medicines that are very effective against cancer.”
Incyte was born out of one of the great names of American
business: DuPont. In June 2001, the chemicals giant decided to
sell its pharma division to Bristol-Myers Squibb for $7.8 billion.
During the four months it took to close the deal, the division’s
chief executive, Paul Friedman, started looking for another job.
Friedman connected with Julian Baker, a well-known biotech hedge-fund investor. Baker had a stake in a company
called Incyte, which sold genetic information to drug companies. At the turn of the century, there was a tulip bubble around
gene data, allowing companies like Incyte, Celera Genomics
and Millennium Pharmaceuticals to raise huge amounts of
money. At the end of 2001, Incyte had $508 million in cash. The
deal Baker and Friedman struck was this: Friedman would take
over as Incyte’s CEO but would build his research lab not near
Incyte’s Palo Alto, California, headquarters but in Wilmington,
where DuPont was based.
Friedman immediately began poaching DuPont’s best scientists. “People didn’t want to go to work at Bristol-Myers
Squibb,” says Friedman, who is now chief executive of Madrigal Pharmaceuticals in West Conshohocken, Pennsylvania,
JAMEL TOPPIN FOR FORBES
Incyte CEO Hervé Hoppenot counts on bleeding-edge
tech like this NMR spectrometer, used to see individual
molecules, to help his company invent new medicines.
OCTOBER 2017 FORBES ASIA | 47
FORBES ASIA
STRATEGIES
but still serves on Incyte’s board. “They wanted to find a new
venue to work.” Swamy Yeleswaram, one of Incyte’s researchers, remembers getting the call. Friedman opened with: “So,
Swamy, are you coming to Incyte?” Yeleswaram recalls that
Friedman was annoyed that he didn’t immediately say yes.
Much of Incyte’s core team, including current chief scientist
Reid Huber and key inventors of all of Incyte’s drugs, were recruited from DuPont.
Incyte’s gene database was supposed to help this team invent new drugs. It didn’t work out that way. But one gene patent (which later turned out to be invalid) did point them in
the right direction, toward a protein involved in the immune
system called Janus kinase 2 (JAK2). Initially they hoped a
drug targeting it would be effective against the blood cancer
multiple myeloma.
In 2005, as Incyte was preparing the drug for clinical trials, three papers were published, in Nature, Blood and the
New England Journal of Medicine, showing that mutations in
the gene for JAK2 were a central cause in both myelofibrosis and a related disorder, polycythemia vera, which causes a
thickening of the blood. Within a day, the team had changed
The Two-Drug Club
IN THE 41-YEAR HISTORY OF THE BIOTECH INDUSTRY,
41 COMPANIES HAVE GOTTEN MORE THAN ONE DRUG
APPROVED. HERE ARE SOME SUCCESS STORIES.
COMPANY
NUMBER
OF DRUGS
APPROVED
2016
SALES
($BIL)
MARKET
CAP
($BIL)
Celgene
5
$10.9
$111.1
Regeneron
3
4.9
45.6
Vertex
3
1.7
38.7
Alexion
3
3.0
32.7
BioMarin
5
1.1
16.1
Tesaro
2
0.04
6.3
United Therapeutics
2
1.6
5.2
SOURCES: INNOTHINK CENTER FOR RESEARCH IN BIOMEDICAL INNOVATION; FACTSET SYSTEMS.
their plans, deciding to explore the efficacy of their new drug
on these diseases.
Then came another speed bump. There were issues with
both the side-effect profile and the intellectual property surrounding Incyte’s original JAK2 inhibitor. Friedman gave his
team a week to come up with an alternative, and they used
another JAK2 drug they’d originally planned to develop as a
topical cream. By 2007, the drug was in clinical trials. In 2010,
results published in NEJM showed half the patients who took
the drug saw their spleen volume reduced by 50%. The FDA
demanded more data that proved patients felt better, too. The
drug, now named Jakafi, was approved in November 2011. In
its first full year it generated $136 million in sales.
Friedman decided to step down when the drug hit the mar-
48 | FORBES ASIA OCTOBER 2017
ket. (Incyte’s main building in Delaware is now named after
him.) Hoppenot, who grew up in Champagne, France, and rose
through the ranks at French pharma Rhône-Poulenc Rorer, was
selected to replace him. At the time, he was the head of oncology
at the Swiss drug giant Novartis, which had snapped up the right
to sell Jakafi outside the U.S. Hoppenot says he couldn’t resist the
opportunity to build a company around this cancer drug.
In 2016, Hoppenot purchased the European division of
Ariad Pharmaceuticals of Cambridge, Massachusetts, including
the rights to another blood cancer drug, to build out a European
sales operation for Incyte’s future drugs. This past April, a rheumatoid arthritis drug Incyte had licensed to Eli Lilly was rejected by the FDA; in a surprise to investors, Lilly said in August it
would be able to resubmit the drug by January 2018.
Many of investors’ hopes for Incyte are riding on a new
medicine, epacadostat, invented by Incyte’s in-house team. The
medicine is the brainchild of biologist Peggy Scherle, another recruit from DuPont. She became fascinated by a chemical
pathway used by the developing fetus to protect itself from its
mother’s immune system. Tumors apparently hijack the pathway to protect themselves. Incyte’s chemists tested 10,000 potential drugs to find one that could hit Scherle’s
proposed target. Even then, it didn’t shrink tumor
cells in the lab; it merely kept them from growing.
But epacadostat seems to amplify the potency
of two drugs made by Bristol-Myers Squibb and
Merck: Opdivo (2016 sales: $3.8 billion) and Keytruda (2016 sales: $1.4 billion), both of which reTOTAL
lease the immune system to attack tumors. In
RETURN
(%, 5-YEAR)
clinical studies of the advanced form of the dead273%
ly skin cancer melanoma, patients seem to be
more likely to see their tumors disappear with
190
a combination of epacadostat and one of these
165
drugs. A big Merck trial comparing the combina33
tion of Keytruda and epacadostat for melanoma
141
will be completed in the first half of 2018. Even
Roger Perlmutter, Merck’s head of R&D, is a lit765
tle nervous. He thinks the trial will be successful
111
but notes that no study has compared the combination of Keytruda and epacadostat with Keytruda and a placebo. “All the arguments now are
from single-arm data with historical reference,” he warns. “That
could turn out to be very wrong.”
Incyte’s executives note that the epacadostat results have been
consistent across studies in melanoma and lung cancer. If it does
work, it will make Incyte one of the lucky few companies selling
multiple blockbuster cancer drugs (see table), which fetch a high
price on the U.S. market. Hoppenot says that the U.S. system can
be “illogical and cruel,” forcing huge co-payments on patients for
the drugs most likely to save lives, but insists that his drugs will
be good for the health care system. He compares the revolution
in cancer to the one that happened with HIV two decades ago,
saying that drugs like the ones he has worked on at Incyte and
Novartis will cost a lot but will justify themselves by emptying
hospital wards. That would be a wonderful thing. F
Credit Suisse.
Helping
entrepreneurs
and businesses
succeed in
$VLD3DFLƟF
India’s 100 Richest
BY NAAZNEEN KARMALI
A Different Reality
Fortunes soar despite economic hiccups.
I
Veteran investor Radhakishan Dandia’s turbocharged economy
mani returned with a bang, boosted
sputtered in the quarter ended in
by the March listing of his supermarJune, growing at a three-year low
ket chain D-Mart.
of 5.7%, due to the aftershocks of
The Indian billionaire factory
last November’s demonetization
churned out several new faces (see
and uncertainties over the rollout of a
p. 62), but only half a dozen of them
nationwide goods and services tax. But
appear in the top 100 as the minimum
in a disconnect from current reality,
net worth to make the cut rose to
the stock market scaled new heights,
$1.46 billion from $1.25 billion last
boosting the fortunes of the nation’s
year. The richest newcomer is cookies100 richest. Their combined wealth rose
and-airline tycoon Nusli Wadia.
more than a fourth to $479 billion.
Other new entrants are Rana Kapoor,
None gained more than oil and gas
cofounder of Yes Bank, Dinesh Nandtycoon Mukesh Ambani, who cementwana of e-governance services firm
ed his decade-long hold on the No. 1
Vakrangee, and digital India’s poster
spot by adding a staggering $15.3 bilMukesh Ambani added a staggering $15.3 billion.
boy, Vijay Shekhar Sharma, founder
lion to his net worth. He’s now among
of mobile wallet Paytm.
Asia’s top 5 richest. Shares of Ambani’s Reliance Industries
A dozen members are poorer than a year ago, half of them
(owner of Forbes India’s publisher) were boosted by improved
from the pharma sector, which is plagued by challenges (see
refining margins and the “Jio effect”: his telecom unit Reliance
box, p. 53). Pharma magnate Dilip Shanghvi took the biggest
Jio’s thundering success in notching up 130 million subscribhit, with his net worth falling by $4.8 billion. Shares of generics
ers since its 2016 launch, though it remains a cash guzzler. By
maker Lupin, whose patriarch, Desh Bandhu Gupta, died in
offering free domestic voice calls, dirt-cheap data services and
June, also declined, shrinking the fortune of his heirs. Brothers
virtually free smartphones, Jio sparked a wave of consolidation
Shashi & Ravi Ruia suffered a drop as their Essar Steel faced
in the market. Witness the recent merger between Vodafone
bankruptcy proceedings under India’s stricter new law (see box,
India and Idea Cellular, the latter owned by Kumar Birla (No.
p. 65).
8), another big gainer this year.
These rankings are based on stock prices and exchange rates
More than four-fifths of those who kept their spot on the list
as of September 15. Private companies were valued by using
from last year saw their wealth rise, with 27 adding $1 billion
comparisons with similar publicly traded companies.
or more. Among them, acquisitive auto parts tycoon Vivek
Additional reporting by Debojyoti Ghosh, Sean Kilachand and
Chaand Sehgal, whose Motherson Sumi snatched Finnish
Anuradha Raghunathan.
truck-parts maker PKC Group for $620 million in March.
THE LIST
1
MUKESH AMBANI
$38 BILLION S
RELIANCE INDUSTRIES AGE: 60
2
AZIM PREMJI
$19 BILLION S
WIPRO AGE: 72
3
HINDUJA BROTHERS
$18.4 BILLION S
ASHOK LEYLAND AGES: 81, 76, 71, 66
4
LAKSHMI MITTAL
$16.5 BILLION S
ARCELORMITTAL AGE: 67
5
PALLONJI MISTRY
$16 BILLION S
SHAPOORJI PALLONJI GROUP
AGE: 88
6
GODREJ FAMILY
$14.2 BILLION S
GODREJ GROUP
7
SHIV NADAR
$13.6 BILLION S
HCL TECHNOLOGIES AGE: 72
8
KUMAR BIRLA
$12.6 BILLION S
ADITYA BIRLA GROUP AGE: 50
9
DILIP SHANGHVI
$12.1 BILLION T
SUN PHARMACEUTICAL INDUSTRIES
AGE: 61
10
GAUTAM ADANI
$11 BILLION S
ADANI PORTS & SEZ AGE: 55
11
UDAY KOTAK
$10.5 BILLION S
KOTAK MAHINDRA BANK
AGE: 58
ANURANG JAIN: TWIN SUCCESS
ATUL LOKE FOR FORBES
Motorcycle tycoon Rahul Bajaj’s nephew makes his debut
after the October 2016 listing of his auto-parts maker,
Endurance Technologies, which has seen its shares more
than double since the IPO. Jain founded the company
in Aurangabad in Maharashtra state in 1985 to supply
aluminum castings to his uncle’s Bajaj Auto, but it now
12
gets two-thirds of its $867 million annual revenue from
other customers. Endurance has made inroads into
Europe, with 8 factories in Italy and Germany. Jain’s twin,
Tarang, also a billionaire, runs his separate auto-parts firm,
privately held Varroc Group, also out of Aurangabad. Their
father, Naresh Jain, is chairman at both companies.
RADHAKISHAN DAMANI
$9.3 BILLION 3
AVENUE SUPERMARTS
AGE: 62
SUP MORE THAN 10% TDOWN MORE THAN 10%
ÌNEW TO LIST 3RETURNEE
AZIM PREMJI: GIVING EDGE
Despite giving away 39% of his shares in outsourcer Wipro in recent
years, the tech mogul’s fortune continues to climb. This year he
jumps 2 places to No. 2 after adding $4 billion to his wealth. The gain
is partly due to increased revenue and profit at Wipro Enterprises,
Premji’s privately held consumer-goods business, which makes
everything from soaps to lightbulbs. His personal investment arm,
PremjiInvest, with an estimated $3 billion portfolio, backs startups
and firms owned by other billionaires. Recent deals: minority stakes
in Kumar Birla’s Aditya Birla Capital and in retailer Kishore Biyani’s
Future Lifestyle Fashion.
MANJUNATH KIRAN/AFP/GETTY IMAGES
India’s 100 Richest
THE LIST
13
CYRUS POONAWALLA
$8.9 BILLION
SERUM INSTITUTE OF INDIA AGE: 76
14
SUNIL MITTAL
$8.3 BILLION S
BHARTI AIRTEL AGE: 60
15
BAJAJ FAMILY
$8 BILLION S
BAJAJ AUTO
16
SAVITRI JINDAL
$7.5 BILLION S
O.P. JINDAL GROUP AGE: 67
17
VIKRAM LAL
$7.2 BILLION S
EICHER MOTORS AGE: 75
DILIP SHANGHVI
Bitter Medicine
I
KUNI TAKAHASHI/BLOOMBERG
n 2014 Dilip Shanghvi, founder of Sun Pharmaceutical Industries, India’s most valuable drug company, became the country’s
second-richest person, dislodging steel tycoon
Lakshmi Mittal. After his $4 billion acquisition
of scandal-tainted rival Ranbaxy Laboratories
from Japan’s Daiichi Sankyo, Shanghvi was on
a roll. So was India’s pharma sector, which was
minting billionaires at a record pace.
Today both are facing headwinds. The
pharma magnate is the biggest dollar loser this
year, poorer by $4.8 billion. Ending his threeyear run as India’s second-richest, he slipped to
No. 9. In the quarter ended in June, Sun’s sales
declined 23% from a year earlier, partly because
of a generics pricing squeeze in the U.S., the
company’s biggest market. It reported a loss for
the quarter of $66 million, its first in four years,
due largely to one-off legal costs.
Sun’s woes are mirrored across the Indian
generics sector, which has been struggling lately
with quality issues and increased competition in
export markets. In contrast to the broader stock
market rally, the pharma index has fallen 17%
since our previous list, knocking three pharma
18
tycoons from the ranks and denting the net
worths of several of those who remain.
Notable among the latter are the Reddy
family (No. 97) of Dr. Reddy’s Laboratories and
Murali Divi (No. 77) of Divi’s Laboratories.
Shares in Dr. Reddy’s fell 6% on a single day in
September on news that an audit of one of its
factories by German regulators had uncovered
manufacturing lapses. An import alert issued
by the U.S. Food & Drug Administration for
one of Divi’s Laboratories’ factories caused sales
and net profits to plummet in the quarter ended
June. “From being a defensive play, the pharma
sector has turned into a wealth destroyer,” says
Arun Kejriwal, founder of Kris, a Mumbai
investment advisory firm.
One privately held fortune that bucked the
trend was that of Hasmukh Chudgar (No. 50),
founder of Intas Pharmaceuticals, who ran up
a 70% gain following a private equity deal that
valued his company at $3.5 billion.
Says Ranjit Shahani, vice chairman and
managing director of Novartis India: “Given the
huge health care needs of this country, India
remains a sweet spot.” —N.K.
BENU GOPAL BANGUR
$6.6 BILLION S
SHREE CEMENT AGE: 86
19
ACHARYA BALKRISHNA
$6.55 BILLION S
PATANJALI AYURVED AGE: 45
20
BURMAN FAMILY
$6.5 BILLION S
DABUR
21
SUBHASH CHANDRA
$6 BILLION
ESSEL GROUP AGE: 66
22
PANKAJ PATEL
$5.9 BILLION S
CADILA HEALTHCARE AGE: 64
23
VIVEK CHAAND SEHGAL
$5.85 BILLION S
MOTHERSON SUMI SYSTEMS AGE: 60
24
KUSHAL PAL SINGH
$5.7 BILLION S
DLF AGE: 86
25
NUSLI WADIA
$5.6 BILLION Ì
BRITANNIA INDUSTRIES AGE: 73
SUP MORE THAN 10% TDOWN MORE THAN 10%
ÌNEW TO LIST 3RETURNEE
India’s 100 Richest
PARTH JINDAL, 27
MANAGING DIRECTOR, JSW CEMENT
M.B.A., HARVARD BUSINESS SCHOOL
Stepping Up
Youngest of 3 siblings and the only son of steel and power tycoon
Sajjan Jindal runs the family’s privately held cement maker. Parth
wants to double cement capacity to more than 20 million tons a
year and list the firm. A football fanatic, he also oversees the group’s
football club, Bengaluru FC, which plays in the Indian Super League.
S
uccession lines are being drawn in several business groups with
the next-gen, sporting foreign degrees, stepping up and assuming key positions in their families’ empires. Their dads, however,
continue to play strategic roles. –A.R.
SHASHWAT GOENKA, 27
Son of Sanjiv Goenka (No. 73), was given charge of
loss-making hypermarket chain Spencer’s in 2013
at age 23. The scion has improved margins and
revenues, though Spencer’s has yet to turn profitable.
He’s also helping his father with their newly launched
packaged-snacks business, Too Yumm.
SHARVIL PATEL, 38
NISABA GODREJ, 39
EXECUTIVE CHAIRMAN, GODREJ CONSUMER PRODUCTS
M.B.A., HARVARD BUSINESS SCHOOL
Adi Godrej’s youngest daughter succeeded him at the family’s consumer goods
flagship in May. Nisa has played a key role in expansion across Asia, Africa and
Latin America. Younger brother Pirojsha, 36, took charge this year as executive
chairman of real estate unit Godrej Properties. Older sister Tanya, 49, is the
group’s chief brand officer and has board seats at group companies.
MANAGING DIRECTOR, CADILA HEALTHCARE
PH.D., UNIVERSITY OF SUNDERLAND
Third-generation scion of pharma clan was named
managing director of the $1.5 billion (revenue) generic
drugs maker Cadila Healthcare in July. Appointment
capped a 2-decade stint under dad Pankaj Patel’s
(No. 22) tutelage. Sharvil plans to sharpen Cadila’s
focus on India and emerging markets.
GOENKA: SAIKAT PAUL/PACIFIC PRESS/LIGHTROCKET VIA GETTY IMAGES
HEAD, SPENCER’S RETAIL
B.A., WHARTON SCHOOL, UNIVERSITY
OF PENNSYLVANIA
THE LIST
Stepping Out
These 5 heiresses have minds of their own and are charting
a different course from their families:
SIMRAN LAL, 46
CEO, GOOD EARTH, AND COFOUNDER, NICOBAR
Two-wheeler tycoon Vikram Lal’s (No. 17) daughter runs
the $23 million (revenues) Good Earth, a chain of luxury
home and apparel stores founded by her mother, Anita,
in 1996. A graduate of New York’s Fashion Institute of
Technology, last year Simran cofounded Nicobar, a clothing
and accessories label, and it already has 6 stores.
VASUDHA MUNJAL, 36
FOUNDER, CHOKO LA
The eldest daughter of motorcycle magnate Pawan Munjal
(No. 30) makes and sells premium chocolates under the
brand name Choko La. It’s a Mayan term meaning “to
drink chocolate together.” She started it in 2005 and sells
through 8 boutiques in Delhi as well as duty-free stores at
Indian airports
ANANYA BIRLA, 23
FOUNDER, SVATANTRA MICROFINANCE
AND CUROCARTE
ANAND PIRAMAL, 32
Kumar Birla’s (No. 8) daughter started microfinance firm
Svatantra (“freedom” in Sanskrit), which focuses on rural
women entrepreneurs, when she was just 17. It has backed
300,000 women so far. Her latest venture is CuroCarte, an
online retailer of handmade luxury products. An undergrad
from Oxford University, Birla released her first song, “Livin’
the Life,” in November.
27
M.A. YUSUFF ALI
$5 BILLION S
LULU GROUP AGE: 61
28
MADHUKAR PAREKH
$4.75 BILLION S
PIDILITE INDUSTRIES
AGE: 71
29
KALANITHI MARAN
$4.55 BILLION S
SUN TV NETWORK AGE: 52
30
PAWAN MUNJAL
$4.5 BILLION S
HERO MOTOCORP AGE: 63
31
KAPIL & RAHUL BHATIA
$4.4 BILLION S
INTERGLOBE AVIATION
AGES: 85, 57
32
MICKY JAGTIANI
$4.3 BILLION
LANDMARK GROUP AGE: 66
33
HARSH MARIWALA
$4.2 BILLION S
MARICO AGE: 66
34
B.R. SHETTY
$3.9 BILLION S
NMC HEALTH AGE: 75
FOUNDER, PIRAMAL REALTY
M.B.A., HARVARD BUSINESS
SCHOOL
Secured a board seat at dad Ajay
Piramal’s health care and financial
services flagship, Piramal Enterprises,
in May, joining his sister Nandini.
He founded
Piramal Realty
in 2012 and
raised $434
million in
private equity
investments
in 2015 from
Goldman
Sachs and
Warburg
Pincus for his
property arm.
26
AJAY PIRAMAL
$5.2 BILLION S
PIRAMAL ENTERPRISES AGE: 62
35
SHAFEENA & SHIFA YUSUFF ALI, 32, 29
FOUNDER AND CEO, TABLEZ FOOD CO.;
FOUNDER, ORANGE WHEELS
Daughters of Middle East retailer M.A. Yusuff Ali (No. 27)
set up and run their own separate businesses. Shafeena
has a food empire across the Middle East and India with
franchises for Famous Dave’s, Peppermill, Sugar Factory,
Coldstone Creamery and Galito’s. The London-educated
finance major plans to invest $50 million over the next 5
years in India. Shifa, the younger sister, runs a children’s
entertainment center, complete with climbing walls, an
arts-and-crafts section, a hair salon and a cafe, at Abu
Dhabi’s Al Wahda Mall. She has earmarked $18 million to
open 6 more children’s centers across the UAE.
—A.R.
RAVI PILLAI
$3.8 BILLION S
RP GROUP AGE: 64
36
MANGAL PRABHAT LODHA
$3.75 BILLION S
LODHA GROUP AGE: 61
37
KULDEEP & GURBACHAN SINGH
DHINGRA
$3.7 BILLION
BERGER PAINTS INDIA
AGES: 70, 67
SUP MORE THAN 10% TDOWN MORE THAN 10%
ÌNEW TO LIST 3RETURNEE
VIJAY SHEKHAR SHARMA: MOBILE MONEY MAN
Newcomer Sharma, the son of a schoolteacher from a small city in
north India, is the youngest member of the top 100 at age 39. He
founded fast-rising, Alibaba-backed mobile wallet Paytm, an acronym
for “Pay Through Mobile,” in 2011. One of the biggest beneficiaries of
the government’s decision to demonetize India’s rupees and move to a
cashless economy, Paytm has notched up 250 million registered users
and more than 7 million transactions daily. A recent sale of Paytm’s
shares to Japan’s SoftBank values the company, in which Sharma owns
18%, at $7 billion. Sharma has also created Paytm Mall, an e-commerce
business and the Paytm Payments Bank.
ANINDITO MUKHERJEE/BLOOMBERG
India’s 100 Richest
THE LIST
38
KARSANBHAI PATEL
$3.6 BILLION S
NIRMA AGE: 73
39
ASHWIN DANI
$3.5 BILLION
ASIAN PAINTS AGE: 74
40
GUPTA FAMILY
$3.45 BILLION T
LUPIN
41
SHASHI & RAVI RUIA
$3.4 BILLION T
ESSAR GROUP AGES: 73, 68
ACHARYA BALKRISHNA: HERBAL ICON
Surging sales of herbal-consumer-goods maker Patanjali Ayurved more than doubled Balkrishna’s wealth. He owns 98.6%
of the privately held company, which he cofounded in 2006 with politically well-connected yoga guru Baba Ramdev (above,
right, with Balkrishna). With annual revenue of $1.65 billion in the fiscal year to March 2017, up 115% from the previous year,
Patanjali sells everything from herbal toothpastes and shampoos to noodles and jams. It is now preparing to launch a line of
garments, including jeans. The pair are looking to buy assets of ailing infrastructure companies.
42
SUDHIR & SAMIR MEHTA
$3.35 BILLION T
TORRENT GROUP AGES: 63, 54.
43
SAMPRADA SINGH
$3.3 BILLION S
ALKEM LABORATORIES AGE: 91
44
ANIL AGARWAL
$3.2 BILLION S
VEDANTA RESOURCES AGE: 64
45
ANIL AMBANI
$3.15 BILLION
RELIANCE COMMUNICATIONS AGE: 58
KISHORE BIYANI:
BAZAAR BOSS
VIPIN KUMAR/HINDUSTAN TIMES/NEWSCOM (TOP)
India’s retail king returns to the top
100 after a 6-year gap, fueled by a
fourfold jump in shares of his Future
Retail since its relisting in August 2016
as an asset-light, pure-play retailer. It’s
known for its Big Bazaar hypermarket
chain. Biyani, who started in 1987 with
a trouser brand called Pantaloons,
got into trouble after an expansion
binge saddled him with debt. After
shutting down stores, laying off 3,000
and selling Pantaloons to Kumar Birla
(No. 8), the feisty retailer rebuilt his
empire, focusing on food and fashion.
Biyani has splurged on technology,
with digital screens on the shelves at
Big Bazaar that explain each product
and its origin. His Future Group has
latched onto e-commerce with 3
portals, selling fashion, home decor
and electronic items.
46
P.V. RAMPRASAD REDDY
$3.14 BILLION
AUROBINDO PHARMA AGE: 59
47
BABA KALYANI
$3.13 BILLION S
BHARAT FORGE AGE: 68
48
VINOD & ANIL RAI GUPTA
$3.11 BILLION S
HAVELLS INDIA AGES: 72, 48
49
SAMEER GEHLAUT
$3.1 BILLION S
INDIABULLS GROUP AGE: 43
50
HASMUKH CHUDGAR
$3.05 BILLION S
INTAS PHARMACEUTICALS AGE: 84
SUP MORE THAN 10% TDOWN MORE THAN 10%
ÌNEW TO LIST 3RETURNEE
India’s 100 Richest
N.R. NARAYANA MURTHY: WAR OF WORDS
The retired chairman and cofounder of software bellwether Infosys
was in the eye of a storm after the sudden resignation in August of
the company’s CEO, Vishal Sikka, a former SAP executive Murthy
appointed in 2014. In a startling turn, the Infosys board blamed Murthy
for the CEO’s premature departure. Murthy said he was anguished by
the allegations and would reply to them at an appropriate time. In
recent months, Murthy’s concerns over alleged corporate-governance
lapses at Infosys, which the company has denied, escalated into a
war of words. This resulted in a board shakeup, which saw the return
of retired cofounder Nandan Nilekani (No. 89) as the company’s
nonexecutive chairman. Murthy recently said that one of his biggest
regrets was stepping down from Infosys.
RANA KAPOOR: POSITIVE BANKER
The former Bank of America executive is now India’s second-richest
self-made banker after Uday Kotak (No. 11) by virtue of his 11% stake
in Yes Bank. Kapoor cofounded finance firm Rabo India Finance in
a joint venture with the Netherland’s Rabobank in 1998 but sold his
stake 5 years later. Along with 2 partners he snatched what was a rare
banking license to set up Yes Bank in 2004. Today it is India’s fifthlargest bank in the private sector with assets of $34 billion. The bank
and its board have been embroiled in a legal battle with the family of
Kapoor’s late partner, Ashok Kapur, who died in the terror attacks in
Mumbai in 2008.
THE LIST
51
JAIN FAMILY
$3 BILLION
BENNETT COLEMAN & CO.
52
ASHWIN CHOKSI
$2.95 BILLION S
ASIAN PAINTS AGE: 74
53
RAJAN RAHEJA
$2.9 BILLION S
EXIDE INDUSTRIES AGE: 63
54
RAKESH JHUNJHUNWALA
$2.8 BILLION S
RARE ENTERPRISES AGE: 57
55
KISHORE BIYANI
$2.75 BILLION 3
FUTURE GROUP AGE: 56
56
ABHAY VAKIL
$2.71 BILLION S
ASIAN PAINTS AGE: 66
57
CHANDRU RAHEJA
$2.7 BILLION S
K. RAHEJA CORP. AGE: 77
58
M.G. GEORGE MUTHOOT
$2.67 BILLION S
MUTHOOT FINANCE AGE: 67
59
ABHAY FIRODIA
$2.65 BILLION S
FORCE MOTORS AGE: 72
60
YUSUF HAMIED
$2.62 BILLION
CIPLA AGE: 81
61
RAJESH MEHTA
$2.6 BILLION S
RAJESH EXPORTS AGE: 53
62
VIJAY CHAUHAN
$2.5 BILLION T
PARLE PRODUCTS AGE: 81
SAJJAN JINDAL: FAMILY JEWELS
The biggest assets of matriarch Savitri Jindal’s (No. 16) O.P.
Jindal Group are overseen by her Mumbai-based son, Sajjan
Jindal. Shares of his JSW Steel were up 46% in the past
year thanks to a recovery in steel prices. After losing out in
June to fellow billionaire Lakshmi Mittal’s ArcelorMittal to
63
acquire struggling Italian steelmaker Ilva, Sajjan announced
plans to invest in a venture to make electric cars. Another
new business is to make paints. Younger sibling Naveen’s
Jindal Power & Steel, once a highflier, is weighed down by
$7.1 billion in debt.
AMALGAMATIONS GROUP FAMILY
$2.48 BILLION S
TRACTORS & FARM EQUIPMENT
SUP MORE THAN 10% TDOWN MORE THAN 10%
ÌNEW TO LIST 3RETURNEE
SIDDHARTHA LAL: REVVING UP
Son of motorcycle magnate Vikram Lal and CEO of Eicher Motors,
known for its retro Royal Enfield motorbikes, is on a tear, with his
company notching up 42% compound annual sales growth in the past
3 years. The $1.2 billion (revenue) company sold 666,493 bikes in the
fiscal year ended March 2017 and is revving up to sell more; it opened
its third factory in South India in August. Lal, who lives in London, is
said to be readying to launch a higher-range twin-cylinder bike. He’s
also closing in on superbike maker Ducati with a $1.8 billion bid.
SANJEEV VERMA/HINDUSTAN TIMES VIA GETTY IMAGES
India’s 100 Richest
THE LIST
64
JAI HARI & YADU HARI DALMIA
$2.45 BILLION S
DALMIA BHARAT AGES: 73, 70
65
SUNNY VARKEY
$2.4 BILLION S
GEMS EDUCATION AGE: 60
66
MURUGAPPA FAMILY
$2.38 BILLION S
MURUGAPPA GROUP
67
RAJENDRA AGARWAL
$2.3 BILLION S
MACLEODS PHARMACEUTICALS
AGE: 58
68
HARSH GOENKA
$2.28 BILLION S
RPG GROUP AGE: 59
69
SUNIL VASWANI
$2.25 BILLION S
STALLION GROUP AGE: 54
CYRUS MISTRY: EXIT PANGS
70
The shocking ouster of construction billionaire Pallonji Mistry’s younger son as chairman of the Tata conglomerate and from
the boards of various Tata companies in 2016, over differences with retired patriarch Ratan Tata, made headlines and sparked
a legal feud. The Tata Group went on to order that all business ties with Mistry’s 152-year-old Shapoorji Pallonji Group be
terminated. The Mistry family, whose biggest asset is an 18.4% stake in holding outfit Tata Sons, also opposed the move
by Tata Sons to convert itself into a private company after being public, arguing that it would be detrimental to minority
shareholders. Cyrus meanwhile has returned to the family group, where his older sibling Shapoor runs the show.
JITENDRA VIRWANI
$2.2 BILLION S
EMBASSY PROPERTY DEVELOPMENT
AGE: 51
71
LEENA TEWARI
$2.19 BILLION S
USV INDIA AGE: 60
72
KIRAN MAZUMDAR-SHAW
$2.16 BILLION S
BIOCON AGE: 64
73
SANJIV GOENKA
$2 BILLION S
RP-SANJIV GOENKA GROUP AGE: 56
PRADEEP GAUR/MINT VIA GETTY IMAGES (TOP)
ANIL AGARWAL:
MINING MAVERICK
Metals and mining tycoon, who controls
London-listed Vedanta Resources, saw his
wealth rise on a metal revival that sent the
company’s shares surging in the past year. In
March, he bought a 12% stake in London-listed
miner Anglo-American for $2.4 billion through
his family trust. Recently he announced plans
to buy more shares worth $2 billion to increase
his stake to 20% but said he had no intention of
making a takeover offer for the company.
74
LACHHMAN DAS MITTAL
$1.98 BILLION S
SONALIKA GROUP AGE: 86
75
MURLI DHAR &
BIMAL GYANCHANDANI
$1.96 BILLION 3
RSPL
SUP MORE THAN 10% TDOWN MORE THAN 10%
ÌNEW TO LIST 3RETURNEE
India’s 100 Richest
Waiting
In the Wings
W
ith the stock market scaling new peaks, the pace at which India is churning out
billion-dollar fortunes has picked up. As a result the price of entry into the top 100
keeps rising. This year, 40 fortunes worth $1 billion or more did not make it to the
list. Here are ten of the newest and most interesting faces among them.
W SRIDHAR VEMBU, 49
$1.45 Billion
ZOHO
Princeton engineer cofounded Zoho in 1996 with
his 2 brothers and friends to provide cloud-based
business software. The privately held company,
of which Vembu, with family, owns close to 90%,
competes with industry giant Salesforce.
BAJRANG LAL TAPARIA, 83
$1.38 Billion
SUPREME INDUSTRIES
Taparia and family have close to a 50% stake in
listed Supreme Industries, one of India’s biggest
makers of plastic products, from molded furniture to
packaging. Shares have risen in line with rising sales,
which are now close to $700 million a year.
PADAM CHAND GUPTA
$1.3 Billion
PC JEWELLER
Starting with one jewelry shop in Delhi in 2005,
Gupta and his brother Balram Garg built their firm
into an 80-store nationwide chain with annual
revenue of $1.3 billion. They own 60% of the firm,
which listed in 2012.
MADHU KAPUR
YES BANK
Kapur inherited shares in Yes Bank after her
husband, Ashok Kapur, the bank’s cofounder, died
in the terror attacks in Mumbai in 2008. In order
to protect her interests, she took the bank, run by
her billionaire brother-in-law Rana Kapoor (No.
100), and its board to court to secure her right to
nominate board directors.
BIJOY GHOSH/THE HINDU IMAGES
$1.2 Billion
THE LIST
76
K.M. MAMMEN, 67
MOFATRAJ MUNOT
$1.95 BILLION
KALPATARU AGE: 72.
$1.16 Billion
MRF
Head of sprawling clan chairs $2.3 billion
(revenue) MRF, one of India’s leading tire
makers. The company was started by his
father in 1946 as a manufacturer of toy
balloons. Mammen’s son Rahul became
managing director in May.
77
MURALI DIVI
$1.94 BILLION T
DIVI’S LABORATORIES
AGE: 66
78
RAMESH JUNEJA
$1.92 BILLION S
MANKIND PHARMA
AGE: 64
R.G. CHANDRAMOGAN, 68
$1.13 Billion
HATSUN AGRO PRODUCT
Chandramogan, who never went to college,
started a tiny venture in 1970 to make ice
cream, which initially was sold on pushcarts.
Today his listed Hatsun Agro Product is
India’s largest private dairy, procuring milk
directly from 300,000 farmers daily.
SANJAY LALBHAI, 63
$1.1 Billion
ARVIND
India’s denim king and the fourth generation of a
storied textile clan in the city of Ahmedabad. His
Arvind has launched several international brands in
India, such as Arrow, Tommy Hilfiger and Gap.
ANIL KUMAR MITTAL, 65
$1.05 Billion
KRBL
With roots in cotton spinning and commodity trading,
Mittal’s KRBL is the country’s largest rice miller and
exporter of basmati rice, which it sells under the
popular India Gate brand.
TARANG JAIN, 55
$1 Billion
VARROC ENGINEERING
Nephew of 2-wheeler tycoon Rahul Bajaj (No. 15)
started his auto parts business in 1990. His twin
brother, Anurang (No. 79), runs his own listed outfit.
Privately held Varroc was coined from the names of
their wives.
79
ANURANG JAIN
$1.91 BILLION Ì
ENDURANCE TECHNOLOGIES
AGE: 55
80
RANJAN PAI
$1.9 BILLION S
MANIPAL GROUP AGE: 44
81
VIKAS OBEROI
$1.87 BILLION S
OBEROI REALTY AGE: 47
82
RAVI JAIPURIA
$1.84 BILLION S
RJ CORP AGE: 62
83
SALIL SINGHAL
$1.83 BILLION S
PI INDUSTRIES AGE: 70
84
N.R. NARAYANA MURTHY
$1.82 BILLION
INFOSYS AGE: 71
85
NIRAV MODI
$1.8 BILLION
FIRESTAR DIAMOND AGE: 46
86
RAJJU SHROFF
$1.77 BILLION S
UPL AGE: 83
KOCHOUSEPH CHITTILAPPILLY, 66
$1.11 Billion
V-GUARD INDUSTRIES, WONDERLA HOLIDAYS
In 1977, Chittilappilly borrowed $1,500 from his father to set up a
small unit to make voltage stabilizers in Kochi in South India. He built
it over 4 decades into $335 million (revenue) V-Guard Industries. He
expanded into amusement parks in 2000 with Wonderla Holidays.
87
SUNDER GENOMAL
$1.75 BILLION S
PAGE INDUSTRIES AGE: 63
SUP MORE THAN 10% TDOWN MORE THAN 10%
ÌNEW TO LIST 3RETURNEE
India’s 100 Richest
KARAN ADANI: SAFE HARBOR
The biggest asset of Gautam Adani’s conglomerate is Adani Ports & SEZ,
run day-to-day by his 30-year-old son Karan (above). It is the country’s
largest and fastest-growing private port developer and operator, with
10 ports along the Indian coastline. But shares of Adani’s companies
rose on other news: Work on his long-delayed, $16 billion Australian coal
mining project would commence in October, boosting his fortune by 75%
from a year ago. No stranger to controversy, Adani the elder recently
faced an allegation that he profited from the government tweaking rules
on special economic zones mainly to benefit his group, which is also in
energy. Adani, who denied the allegation, sent a defamation notice to
the journal that reported the allegation. The journal pulled down the
online version of the article, and its editor resigned.
THE LIST
SHASHI & RAVI RUIA
Fallen Stars
I
MIKHAIL VOSKRESENSKIY/HOST PHOTO AGENCY/RIA NOVOSTI VIA GETTY IMAGES (TOP); SEBASTIAN D’SOUZA/BLOOMBERG NEWS
wealth erode to $3.4 billion.
n June, India’s central bank
Several high-flying billionreleased a list of 12 compaaires, undone by their appetites
nies that account for a fourth
for debt, have disappeared from
of all bad loans at Indian banks
the ranks altogether. One notable
and face being liquidated under
figure is liquor and airline baron
the new Insolvency & BankVijay Mallya, who fled the counruptcy Code. Prominent among
try in 2016 after his Kingfisher
them is Essar Steel, controlled
Airlines reneged on loans of more
by the Ruia brothers, with a
than $1 billion.
debt pile of nearly $7 billion,
Another big defaulter in the
more than $5 billion of which is
central bank’s list is Bhushan
labeled nonperforming.
Steel, which produces steel sheets
Essar Steel, a unit of the
for the auto industry and owes
brothers’ Essar Group, took the
banks $6.9 billion. The company’s
Reserve Bank of India to court,
chairman, Brij Bhushan Singal,
calling its move to refer it for
dropped off in 2014. Singal’s esbankruptcy proceedings as “distranged older son, Sanjay Singal,
criminatory and arbitrary.” Essar
who runs his own steel business
argued that the Reserve Bank
and is weighed down by debt of
had given 488 other companies
The Ruias are ruing new rules.
$5.7 billion, lost his spot in 2015.
an additional six months to
Other highly leveraged
arrive at a resolution with
drop-offs are hydropower pioneer Jaiprakash Gaur,
their bankers. It had also overlooked the company’s
founder of the Jaypee Group, and L. Madhusudhan
improved financial position as of March 2017, Essar
Rao of Lanco Infratech, who last featured among
said. But the court dismissed the plea.
the richest in 2011 and 2012. “Many companies
The case is now before the National Company
overinvested in the exuberant period preceding the
Law Tribunal. A court-appointed executive has
global financial crisis,” says Rakesh Arora, managing
assumed oversight, and Essar Steel’s board has been
partner of Go India Advisors, a Mumbai strategic
suspended. A newly formed creditors committee
advisory firm. “Banks were guilty of giving them
has nine months to devise a plan to pay off lenders,
loans even when their equity base was too low.”
failing which Essar Steel will be liquidated.
The court’s tough stance in the Essar case should
In August, the Ruia brothers concluded a longdelayed $12.9 billion deal to sell the group’s oil assets curb both borrowers and lenders from going overto Russia’s Rosneft. The bulk of the proceeds will pay board. Education firm Educomp, founded by former lister Shantanu Prakash, who was worth $920
down part of Essar Group debt. The siblings (No.
million in 2009, voluntarily applied to restructure its
41), who at their peak in 2010 were among the top
$320 million debt under the new law. —A.R.
five, with a net worth of $15 billion, have seen their
FOR METHODOLOGY AND ALL BIOS, GO TO FORBES.COM/INDIA.
88
DINESH NANDWANA
$1.72 BILLION Ì
VAKRANGEE AGE: 54
89
NANDAN NILEKANI
$1.71 BILLION
INFOSYS AGE: 62
90
RADHE SHYAM AGARWAL
$1.64 BILLION
EMAMI AGE: 72
90
RADHE SHYAM GOENKA
$1.64 BILLION
EMAMI AGE: 71
92
SENAPATHY GOPALAKRISHNAN
$1.61 BILLION
INFOSYS AGE: 62
93
SATISH MEHTA
$1.6 BILLION
EMCURE PHARMACEUTICALS AGE: 66
94
SHAMSHEER VAYALIL
$1.57 BILLION S
VPS HEALTHCARE AGE: 40
95
SHYAM & HARI BHARTIA
$1.56 BILLION S
JUBILANT GROUP AGES: 64, 60
96
ANAND MAHINDRA
$1.54 BILLION
MAHINDRA & MAHINDRA AGE: 62
97
REDDY FAMILY
$1.53 BILLION T
DR. REDDY’S LABORATORIES
98
ARVIND PODDAR
$1.48 BILLION Ì
BALKRISHNA INDUSTRIES AGE: 59
99
VIJAY SHEKHAR SHARMA
$1.47 BILLION Ì
PAYTM AGE: 39
100
RANA KAPOOR
$1.46 BILLION Ì
YES BANK AGE: 60
SUP MORE THAN 10% TDOWN MORE THAN 10%
ÌNEW TO LIST 3RETURNEE
160 years
of entrepreneurial drive.
48 years
of experience in the region.
20 locations
DFURVV$VLD3DFLƟF
1 integrated bank
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FORBES ASIA
LICENSEE COVERS
Around Asia
In Forbes:
FORBES JAPAN NOVEMBER
Takahisa Takahara fronts the magazine’s collection of top
100 Japanese CEOs. His Unicharm, the maker of diapers and
personal-hygiene products—also a past selection for Forbes
Asia’s Fab 50 companies list—boasts that it covers Japan’s
youngest to oldest and “offers value to all our stakeholders.”
(forbesjapan.com)
FORBES CHINA SEPTEMBER–OCTOBER
Film and TV star Yang Mi is No. 3 on the China Celebrity 100 list, which ranks
entertainers—and swimmer Sun Yang, No. 69—based on popularity and earnings.
(Another actress, Fan Bingbing, repeats as No. 1.) Yang runs her own production
company and has 76 million followers on Weibo. (forbeschina.com)
FORBES KOREA SEPTEMBER
Billionaire CEO of CJ Group Lee JayHyun, out of prison for white-collar
crimes, vows to triple the foodand-entertainment conglomerate’s
revenues by 2020 and make it the
world’s best company by 2030.
(forbeskorea.com)
FORBES INDIA
SEPTEMBER 29
Rocketing startup Byju has
metamorphosed from math
tutoring into a leader of the
new wave of Indian education
corporates, attaining a near
billion-dollar funding valuation.
(forbesindia.com)
OCTOBER 2017 FORBES ASIA | 67
FORBES ASIA
ASIAN INVASION
Big
Hitter
Si Woo Kim and his Korean colleagues
lead the way as Asia’s presence in pro golf
flourishes like never before.
BY MONTE BURKE
Driven: Kim joins Tiger Woods, Sergio Garcia and Jordan Spieth as the
only modern-era PGA Tour players to win two tourneys before age 22.
OCTOBER 2017 FORBES ASIA | 69
C. COX/GETTY IMAGES; INSET: STUART FRANKLIN/GETTY IMAGES
S
i Woo Kim sits in the players’ lounge at the TPC Boston
golf course after finishing a practice round for the Dell
Technologies Championship in early September, the
second leg of the PGA Tour’s season-ending FedEx Cup
playoffs. His sturdy 5-foot-11, 180-pound frame is in a
slouch, making him appear a bit sleepy. The 22-year-old South
Korean answers a few questions through Rambert Sim, his agent
and—today, anyway—his translator. And then Kim, who is the
39th-ranked golfer in the world, is asked about the signature win
of his young career, which came at the 2017 Players Championship, the PGA Tour’s hallmark event. But before Sim
can even begin translating,
Patton Kizzire, a fun-loving
journeyman Tour player
from Alabama, walks by and
butts in. “I’ll tell you what it
means,” he drawls. “It means
I need to borrow some
money from him.”
Kim breaks into a huge
smile that lights up his cherubic face. He didn’t need a
Hideki Matsuyama: No. 3 in the
translation for that.
world and the golfer to beat in Asia.
Three and a half months
earlier, in May, at the beginning of the final round of the Players
Championship, the leaderboard was stocked with familiar names.
The long-hitting American, J.B. Holmes, was tied for the top spot.
The South African winner of the 2010 Open, Louis Oosthuizen,
was one stroke behind. Australia’s Adam Scott, the 2013 Masters
winner, and Spain’s Sergio Garcia, fresh off his 2017 Masters victory, lurked within striking distance. No one paid much attention
FORBES ASIA
ASIAN INVASION
to Kim, the little-known, then-21-year-old who was in fourth place,
two strokes off the lead. That would change.
During the windy and difficult final round, Kim remained
unflustered. He carded the only bogey-free round of the day
and ran away from the big names in the field. With his threestroke victory he became the youngest player ever—by two
years—to win the Players and earned a check for $1.89 million.
He also became only the fourth PGA Tour player in the modern era to claim two tournaments before the age of 22 (Kim
won the Wyndham Championship in 2016), joining Tiger
Woods, Jordan Spieth and Garcia. More important, though,
was what Kim’s landmark win signified: that the long-anticipated Asian invasion of the PGA Tour may have finally begun in
earnest.
To be sure, there have been important wins for Asian men
on American soil before. “I remember watching the 2009 PGA
Championship when [Korean] Y.E. Yang beat Tiger,” says Kim.
Another Korean, K.J. Choi—who happens to be Kim’s idol—won
the Players, too, back in 2011. But those wins seemed more like
outliers than trends.
Growing middle classes—Japan and Korea have had large, stable
ones for decades, while those of smaller nations, like Thailand and
Vietnam, are burgeoning—set the stage for golf’s growth in the
region. And in the world’s two most populous countries—China
and India—the middle classes have grown by 330% and 150%,
respectively, since 2000. “The industry of golf has always followed
the growth of the middle class and middle-class consumerism,” says
Giles Morgan, the global head of sponsorships and events for HSBC.
“In the 19th century, it was Great Britain. In the 20th century, it was
the U.S. This century will be about China and India and other parts
of Asia.”
The consumerism has already begun in earnest: According to the Brookings Institution, the Asia-Pacific middle class in
2015 spent double that of the North American middle class and is
expected to spend nearly three times as much by 2020. The major
professional golf tours, which are, in essence, vehicles for corporate
spending, have simply followed the money.
The European Tour was the first to seize opportunities in Asia,
most notably with its creation of the Dubai Desert Classic in 1989.
That was folllowed up three years later with the sanctioning of the
Johnnie Walker Classic in Bangkok, the
first significant international professional
golf tournament in East Asia. In 2005, the
European Tour made its biggest mark in
the region with the launch of the HSBC
Champions, which has been played all but
one year in Shanghai. The inaugural event
attracted Tiger Woods, then the No. 1 player
in the world (he finished second).
Big tournaments, though, are only part
of the developmental story. In 2007, to complement its tournament sponsorship, HSBC
created a junior golf program in conjunction with the China Golf Association, which
catered to both experienced and beginning players. Thus far, 80,000
kids have participated.
The PGA Tour, which has had corporate sponsors from Japan
for some time now (Sony since 1999 and Bridgestone since 2006),
soon followed the European Tour, spurred on by what might turn
out to be the single biggest catalyst for the game of golf in Asia: The
2009 announcement that the sport would return to the Olympics in
the 2016 Summer Games (after a 112-year absence). It was the PGA
Tour, along with the Royal & Ancient (which oversees golf’s rules
outside of the U.S. and Mexico) and other groups, that successfully
lobbied for golf’s reentry into the Games.
The Tour’s point man was Votaw. “When a sport becomes an
official Olympic event, countries like China begin to invest in it,
a model, whether the money comes from the government or the
country’s Olympic committee, that’s very common throughout the
rest of the world,” he says. “So we knew that if we got golf into the
Games, those revenue sources would be increased and, in some
cases, created, in many countries.”
Votaw recalls traveling to China shortly after the October 9, 2009
announcement by the International Olympic Committee. He and a
group of golf executives toured the Chinese training facilities. “We
HE IS EMINENTLY LIKEABLE. AFTER HIS
PLAYERS WIN, A PHOTO OF A SMILING
KIM FLYING TO ATLANTA IN THE MIDDLE
SEAT OF THE COACH CABIN WENT VIRAL.
HE HAD PURCHASED THE TICKET BEFORE
HE BANKED THE WINNER’S CHECK.
There were 3 full-time Asian players on the PGA Tour
when Choi joined in 2000. In 2010, there were 8. In the
upcoming PGA Tour season, which begins later this month,
there will be 13 full-time players from Asia. (The total
number of players on the Tour has remained the same for
decades.) South Korea is expected to field more players on the
Tour than Australia, which has long been a golfing powerhouse. This season will see the debut of the first two golfers
from China to ever qualify as members of the Tour. And lurking near the very top is Japan’s Hideki Matsuyama, No. 3 in
the world (the highest ranking ever for an Asian male). The
25-year-old won three tournaments in the season just ended,
including two World Golf Championships, and has amassed
$20 million in career earnings to go along with his annual
$8 million in endorsements.
The recent infusion of Asian talent is no accident. In recent
years, the PGA Tour has been especially aggressive in Asia,
creating a new professional circuit in China, opening offices in
Beijing and Tokyo and launching a new tournament in Korea.
“It’s not a surprise to us,” says Ty Votaw, the PGA Tour’s executive vice president of global business affairs.
70 | FORBES ASIA OCTOBER 2017
MATTHEW MAHON FOR FORBES
Says famed coach David
Leadbetter of Kim: “He’s
athletic, he works hard, and
he’s very even-keeled.”
OCTOBER 2017 FORBES ASIA | 71
FORBES ASIA
ASIAN INVASION
stopped at this state-of-the-art exercise area and the head of the
CGA [China Golf Association] told us that on October 8, no Chinese golfer could work out in that room, but that after October 9,
they could,” says Votaw. While no golf-specific figures are available,
it is estimated that the Chinese government spent more than $1
billion on Olympic training infrastructure in 2013 alone. (The next
Summer Games will take place in Japan in 2020.)
Looking east makes good business sense for both the PGA and
European tours. Growth in the game is stagnant in Europe, and the
European Tour annually loses money, save for years in which the
Ryder Cup is played (and TV ratings spike). Golf in the U.S. has
been plagued by bad headlines: Nike recently shut down its golf
division, Adidas is in the process of shedding its golf unit (TaylorMade) and retailer Golfsmith went bankrupt. Golf rounds in the
U.S. are down 11% since 2000. According to research company Pellucid, 22 new courses in the U.S. opened in 2016 but 176 closed, the
eleventh straight year that more courses closed than opened.
And though the PGA Tour’s revenues continue to climb at a
steady, if not spectacular rate (in the most recent available reports,
the nonprofit Tour’s numbers are up from $1.1 billion in 2014 to
dominant country in women’s golf (see box, opposite).
The biggest lesson Votaw learned from his tenure at the LPGA?
“The development of heroes from a particular country,” he says. “We
saw how women’s golf grew in Korea. That’s instructive for us on the
PGA Tour side. I don’t necessarily think we’ll have 50 players from
Asia on our tour anytime soon, but I do think we are developing
heroes from that part of the world.”
That hero creation started in earnest in 2013, when the HSBC
Champions tournament in Shanghai became, all at once, a World
Golf Championship event and the first significant PGA Tour tournament in Asia. (Matsuyama won it last season.) “When we started
the HSBC tournament and junior program, I said that it would be
our wish in 20 years’ time to present the HSBC WGC trophy to a
Chinese golfer,” says HSBC’s Morgan. “At the time, it sounded like
sponsor p.r. But I don’t think anyone would bet against it now.”
The next year, the PGA Tour, in conjunction with the CGA and
the China Olympic Sports Industry, created the PGA Tour China
Series, designed to be a pipeline to the American Tour. Xinjun
Zhang and Zecheng Dou, the first Chinese players to ever earn PGA
Tour playing cards, are graduates of that system.
It hasn’t all been smooth sailing, though,
at least from a public relations standpoint.
In 2004, when China had a reported 200
courses, the Chinese government banned
the building of new courses for what it
claimed to be environmental reasons. And
then in 2015, President Xi Jinping issued a
ban on the game—which is viewed as capitalist and elite—this time to combat graft.
But the crackdowns haven’t had much of
an effect in China. Construction continued
despite the ban, with the number of new
courses reportedly tripling since 2004. And
through broadcast partnerships with the
PGA Tour, all tournaments are shown live
on TV (as they are in South Korea, Japan,
Malaysia, Indonesia, India, Thailand, Taiwan, Vietnam and a handful of other Asian countries). The PGA
Tour opened an office in Beijing in 2013 and recently signed a deal
with the Chinese digital giant iQIYI to live-stream all of its tournaments. “The crackdown is more of a media-driven negative than a
negative in reality,” says Votaw, who notes that the Chinese national
team practiced at the PGA Tour headquarters this past spring.
Not all is well with the PGA Tour China Series, however, which
has suspended operations for a year because of a dispute with its
promotional partner. “We’re continuing conversations and hope to
announce something about 2018 soon,” says Votaw.
The Tour has placed an emphasis on South Korea, too. In 2015,
the Presidents Cup, an event created by the PGA Tour that pits the
best male players in the U.S. against the best international players outside of Europe, was held in Incheon. (Earlier this month in Jersey City,
New Jersey, the U.S. team won the Cup, trouncing the International
team, although Kim held his own.) “We wouldn’t have staged the
event in Korea if the game hadn’t become a cultural imperative there,”
says Votaw. (Korean Sangmoon Bae was one of the stars for the in-
“THE INDUSTRY OF GOLF HAS ALWAYS
FOLLOWED THE GROWTH OF THE
MIDDLE CLASS AND MIDDLE-CLASS
CONSUMERISM. IN THE 19TH CENTURY,
IT WAS GREAT BRITAIN. IN THE 20TH
CENTURY, IT WAS THE U.S. THIS CENTURY
WILL BE ABOUT CHINA AND INDIA AND
OTHER PARTS OF ASIA.”
$1.2 billion in 2015), and its stars, like Spieth, Matsuyama, Dustin
Johnson and Justin Thomas, are good and very young, its TV ratings have continued to slide since a high in 2008 (not coincidentally
during the era of Tiger Woods’ dominance).
Asia, on the other hand, is experiencing a growth spurt. Japan
and South Korea are Nos. 2 and 3 in top world golf retail markets,
according to research group Golf Datatech (the U.S. remains No. 1).
South Korea is No. 1 in per capita spending in the $12.6 billion golf
equipment and apparel market. And Asia has 109 planned courses
and 67 under construction. By comparison, North America has 99
courses planned and 57 under construction.
When it comes to capitalizing on Asia, Votaw may be the PGA
Tour’s biggest asset. From 1999 until 2005 he was the head of the
LPGA. Those happen to be the years when that tour experienced
an explosion of Asian talent, which started in earnest with Korean
Se-Ri Pak winning the U.S. Women’s Open and the Women’s PGA
Championship in 1998. That year, Pak was one of three Koreans on
the LPGA Tour. A decade later, there were 45, and they are now the
72 | FORBES ASIA OCTOBER 2017
PAK’S PACK
Se-Ri Pak, winner of
five LPGA majors and
an inspiration to a
generation of golfers.
In 1998, a 20-year-old South Korean woman named Se-Ri Pak
joined the LPGA Tour and effectively kicked off a revolution in international golf. That year, Pak won the U.S. Women’s Open and the
LPGA Championship (now known as the Women’s PGA Championship). Pak was one of only three Koreans when she joined the LPGA.
Ten years later, thanks mainly to her, there were 45. Now, five of
the top ten women in the world are Korean, including Nos. 1 and 2
(So Yeon Ryu and Sung Hyun Park, respectively), and Koreans won
three of the five women’s major tournaments in 2017.
South Korean men—and Asian men, in general—are years behind their female counterparts. There are many theories for why
this is. The first, pertaining to Ty Votaw’s “hero creation” theory, is
that Asian women had a hero in Pak. Inbee Park, the tenth-ranked woman in the world, is one of many Asian LPGA players who point to
Pak’s 1998 year as an inspiration. Another possible reason: Though women golfers are extremely talented, there are fewer of them. As
an example, 1,700 women attempted to qualify for this year’s U.S. Women’s Open. By contrast, nearly 10,000 men tried to qualify for the
men’s event. Yet another reason: Korea’s mandatory 21-month military service for men between the ages of 18 and 35, which is smack
dab in the middle of a golfer’s prime years.
But less often cited as a catalyst for the success of Korean women on the LPGA is the robustness of the women’s professional game
in their home country. Korea has its own tour—the LPGA of Korea—that offers a reported $19 million in total prize money, less than the
LPGA but more than the men’s Korean Tour (a reported $12 million). The LPGA of Korea also has three different tiers, creating an important pipeline for players.
And yet despite the success of Korean women in American professional golf, they lag dramatically in prize money when compared to
the men. Pak had an incredible run on the LPGA Tour, winning 25 times (including 5 majors), but earned only $12.5 million in her career.
By contrast, K.J. Choi won 8 career PGA Tour events (and no majors) and amassed earnings of $32 million.
The disparity can most easily be explained in terms of eyeballs: The men have millions more than the women. The PGA Tour has
broadcast deals with NBC and CBS—and more than a dozen international broadcasters—which pump an annual $400 million into its
coffers, while the LPGA is primarily broadcast by the Golf Channel and makes somewhere under $20 million in TV money. Total prize
money for the PGA Tour next season is more than $363 million. For the LPGA: $66 million.
However, there are two tournaments where the money could be more equalized. The men’s and women’s U.S. Opens are run by the
United States Golf Association, while the men’s and women’s PGA Championships are run by the PGA of America. Surely those organizations, flush with money, could make the purses a bit more even, as the tennis major championships have done. After all, as David
Leadbetter points out, Se-Ri Pak certainly had something to do with the rise of Asian men on the PGA Tour as well. —M.B.
MIGUEL TOVAR/LATINCONTENT/GETTY IMAGES
ternational side that year.) And just this month, the Tour will hold its
first sanctioned tournament in South Korea, the CJ Cup, the newest
addition to its tournament schedule, which will be played on Jeju Island. The tournament’s $9.25 million purse is bettered only by the four
majors, the Players and the four World Golf Championship events.
At the front of the line of Asian “heroes,” Matsuyama is an international star, the first from Japan. (Japanese men were long notorious for not traveling; Masashi “Jumbo” Ozaki won 114 tournaments
in his career, but all but 2 of them were in Japan.)
And then there’s Kim, who is off to a fast start in his PGA Tour
career with his two wins, $6 million in career earnings and $1 million in endorsement fees, a figure that is likely to rise in 2018 (his
sponsors: CJ, TravisMathew and TaylorMade). Kim qualified for the
PGA Tour at the age of 17, but he couldn’t play for a year because of
the Tour’s age restriction. He says he had “no fear” during the final
round of the Players “because I knew I was playing well.”
He helps his own cause by being eminently likeable: After his
Players win, a photo of a smiling Kim flying to Atlanta in the middle
seat of the coach cabin went viral. He had purchased the ticket before he banked the winner’s check, of course.
There is one hazard that Kim might not be able to avoid: South
Korea’s mandatory 21-month military service stint for males between
the ages of 18 and 35 (Kim shrugs it off: “I am young and not worried about it now.”) Only an Olympic medal can get a golfer out of it,
which makes qualifying for the 2020 Games an imperative for Kim.
David Leadbetter, the famed golf coach who has three golf academies in China and one each in India, Bangladesh, Indonesia and
Thailand, says Kim has the traits he sees in many young Asian players. “He’s athletic, he works hard, and he’s very even-keeled.” Leadbetter contends that an even bigger Asian wave of players is on the
horizon. One of his Thai students, a 9-year-old, just won the World
Junior Golf Tournament. He also points to the dozens of golf schools
that line the practice facility at the Korean golf resort, Sky 72 Club, all
instructing young kids. “And I have 8- and 9-year-olds in China who
have great technique already and are purely focused on golf,” he says.
“I don’t think we’ve even scratched the surface in Asia yet.” F
OCTOBER 2017 FORBES ASIA | 73
Forbes Life
ZANG TOI
A Flair for Fashion
Zang Toi came to New York from Malaysia and soon launched his own label. Today he
often wears a kilt, dresses a lineup of famous women and supports Donald Trump.
BY CHEN MAY YEE
I
n the midtown Manhattan studio of Malaysian designer Zang Toi, a room with a crystal chandelier, white orchids and evening gowns that start at
$13,000, is a small black-and-white photograph in a
silver frame.
It is of a young Toi and his brother leaning out an upstairs window, wooden shutters flung open, holding strings
of firecrackers above a grocery store. Toi’s parents owned
the store in the village of Kuala Kerai, in the interior of
peninsular Malaysia. Toi, the youngest of seven, grew up
stocking shelves, ringing up the register, anything to help
out. “That’s the reason I’ve always had the spirit of entrepreneurship,” he says. “I love to sell.”
Selling brooms, onions and soy sauce may seem a far cry
from selling high fashion, but Toi wears his contradictions
well. After all, he is a 56-year-old Asian man whose signature outfit is a mini-kilt. He works in a famously liberal industry but counts himself as a supporter of Donald Trump.
Toi burst on the scene back in 1990, when his orange,
hot pink and purple jackets and skirts—inspired by the colors of Malay flowers and cakes—landed him in a Vogue article on the new faces of the decade. Since then, his roster
of clients has included Sharon Stone, Elizabeth Taylor, Melinda Gates, Kirstie Alley, Patti LaBelle and Ivana Trump,
as well as members of the Saudi royal family and a Hearst
or two.
After almost 30 years in the business, he’s not done. Last
month, during New York Fashion Week, he opened the first
stand-alone Zang Toi boutique, an 800-square-foot storefront on Lexington Avenue near 75th Street.
Previously, Toi relied on high-end department stores to
sell his creations. But department stores are struggling, and
while his trunk shows for Saks Fifth Avenue remain a major
income generator, he no longer sells at Neiman Marcus or
Nordstrom. He also has side businesses: There’s a Zang Toi
cafe in Kuala Lumpur, and he now designs Zang Toi-branded greeting cards for Papyrus, the North American statio-
74 | FORBES ASIA OCTOBER 2017
nery chain. He says his business is “small but very profitable,” with revenue of between $5 million and $7 million
a year.
Toi’s career in fashion was shaped by the women in his
family. His mother was of a generation that wore the Chinese cheongsam every day. “Mom was not a shopper,”
he says. She shopped once a year, before the Lunar New
Year, and bought enough fabric each time to have 20 to 25
cheongsams tailored. Toi, whose full name is Toi See Zang,
used to tag along and help her pick out the fabrics.
The family saved enough to send two of Toi’s brothers
to university in the U.K. But when his turn came, his father
said he could afford to send him only to Canada. Toi flew
to Toronto to complete the equivalent of high school, and
mulled studying interior design. His sister, reminding him
that he had a flair for clothes, suggested fashion school
instead.
Toi remembers buying his first copy of Vogue magazine and dutifully completing an entrance-application assignment to create a collage of tear-outs. He was accepted
at both Parsons and the Fashion Institute of Technology in
New York. His father said he had enough money to cover
tuition but little else. Toi arrived at Parsons with $300 and
soon began working part-time as an assistant for a knitwear
designer in SoHo to pay for rent, food and art supplies.
After he graduated in 1984, he continued to work for the
designer, Mary Jane Marcasiano, for several years before
starting his own label. He had been in business all of two
months when he was spotted by an editor at Vogue. “I was,”
he says, “at the right place at the right time.”
One of Toi’s brothers, See Luon, who runs the Toibranded cafe and a Malaysian offshoot of the brand, Toi the
Dressmaker, says their parents encouraged them to follow
their dreams. Today, the family includes a chemist, an accountant, a tennis coach and an actuary.
Toi’s mother, elegant at 89, still wears cheongsams, only
now they’re all by Zang Toi. He recently made her a navy
MATTHEW FURMAN FOR FORBES
On the rack: “He is the most lovely, most unpretentious, easiest person to get along with. That’s why women keep coming back,” says model and actress Carol Alt.
OCTOBER 2017 FORBES ASIA | 75
Forbes Life
silk shantung cheongsam for a grandson’s wedding in
Malaysia.
Toi’s clients tend to be effusive about him as a designer
as well as a friend. Singer Patti LaBelle, who’s been wearing
Zang Toi for more than 15 years, says she met Toi at a party
thrown by a New York socialite friend. Her first Zang Toi
outfit was a short purple dress, with flowers embroidered
on the skirt, and a purple mink shawl, which she wore to a
Foundation for AIDS Research event. Three years ago, performing at the White House’s “Women of Soul” show before
President Barack Obama and First Lady Michelle Obama,
she wore a dramatic green, hand-beaded Zang Toi cape
over black silk pants and a blouse. She recalls the president complimenting her on the outfit. Toi sends her flowers
every year on her birthday, says LaBelle, adding: “He’s like
my brother. He’s precious.”
Carol Alt, the model and actress, met Toi at a party
last year and has since been dressed by Zang Toi for red
carpet events and bought eight or nine pieces—a dress,
jacket, pants, a gray suit, a coat—for herself. “I’ve worn
everybody,” she says, reeling off names—Versace, Armani,
Ferragamo, Valentino, Zac Posen, Nicole Miller, Vivienne Tam, Marc Jacobs, Ralph Lauren. Of Zang she says:
“The way he cuts things, it’s just so perfect for my body.
He just has a way of making things that show off your best
attributes.”
What’s more, “he is the most lovely, most sweet, most
unpretentious, easiest person to get along with,” she says.
“That’s why women keep coming back.”
Ivana Trump, The Donald’s first wife, says, “I am a regular client and keep coming back because Zang Toi takes
great pride in making sure that his clients look and feel
great in his many designs, including bustier dresses, suits,
pantsuits, cashmere sweaters.”
If his mother’s uniform is the cheongsam, Toi’s is a mini-
version of the Scottish kilt. His first
kilt was made by Kinloch Anderson, kilt maker to Britain’s Prince
Charles. Toi flew to Edinburgh to be
measured and told them to make the
length just 13 inches, because “I am
short.”
He liked wearing it so much he
soon started making his own and
began wearing them everywhere, including to the Council of Fashion
Designers of America Awards, where
he was photographed by the legendary New York Times street photographer Bill Cunningham. “Everywhere
you go,” he says, “you mark your
arrival.”
On a summer afternoon at his
studio, he wore a short black kilt
with a discreet “T” embroidered in
black sequins across the crotch, the
logo for House of Toi. Above was a
white shirt and fitted black jacket.
Below, tanned legs ending in black
ankle socks and alligator-skin wingtip shoes. A bobby pin decorated
with a single crystal kept his black
hair out of his eyes.
He showed a visitor his latest
collection, which has a royal blue
theme. There were fitted daytime
jackets, lined in silk, for $10,000, to
go with $3,000 pants. A thin cashmere-and-silk V-neck sweater with a
built-in shirt collar was $3,800. Eve-
LADIES’ MAN
ZANG TOI’S CLIENTS HAVE INCLUDED ELIZABETH TAYLOR, PATTI LABELLE AND IVANA TRUMP, AS WELL AS THE STARS BELOW.
MICHAEL TRAN/FILMMAGIC; JEFFREY MAYER/WIREIMAGE; ROBERT MARQUARDT/WIREIMAGE;
MIKE COPPOLA/GETTY IMAGES FOR MERCEDES-BENZ FASHION WEEK; J.SCIULLI/WIREIMAGE
FOR AUDI OF AMERICA, INC.
Devon Aoki
Eva Longoria
76 | FORBES ASIA OCTOBER 2017
Heather Graham
Kirstie Alley
Sharon Stone
ZANG TOI
MATTHEW FURMAN FOR FORBES
Zang Toi at his recently opened boutique in Manhattan: “I’ve always had the spirit of entrepreneurship. I love to sell.”
ning gowns started at $13,000, and the priciest item was a
$38,000 silk-lined coat hand-embroidered with Swarovski crystals.
He says his new Lexington Avenue boutique offers both
special-order and ready-to-wear pieces, including some
in the $1,800 to $2,300 range, “so more people can afford
Zang Toi.”
His operation is lean—his entire team consists of 17 people, including tailors, seamstresses, cutters, two assistants and
an office manager—and is spread across 3,000 square feet on
the 20th floor of a Manhattan high-rise. It’s a point of pride
for him that he’s always handled his own publicity.
These days, he considers himself an “elder statesman”
in the industry. He’s pleased to see the emergence of
prominent young Asian designers in America, from the
Thai-born Thakoon Panichgul to Taiwan-born Jason Wu,
who has dressed Michelle Obama.
While he—and those who came after him—crossed
oceans to make it in New York, he thinks the power centers
of fashion are shifting and spreading across the globe. For
example, he sees China, once regarded as only a low-cost
manufacturing base, riding on its long history, rich culture
and new wealth to become a fashion capital. It may take 10,
15 or 20 years, he says, but it will happen.
Toi, who holds a U.S. green card, isn’t a citizen and can’t
vote, but says he wrote a check to Trump’s campaign. “I’m a
supporter. I think he’s good for business. I travel all around
the country. I’m friends with the working class. I hear their
worry. A lot of them just want a full-time job, education
for their kids. I wasn’t surprised when Donald won.” Toi
says his business has picked up since Trump was elected:
“Women are shopping again.” F
OCTOBER 2017 FORBES ASIA | 77
Forbes Life
LUXURY LINEAGE
The Cartier Tank at 100
BY MICHAEL SOLOMON
LIKE ITS NAMESAKE, the Cartier Tank is unstoppable. The elegant unisex watch, which celebrates
its centennial this fall, has been a favorite of movie stars (Clark Gable, Fred Astaire), First Ladies (Jackie
Kennedy, Michelle Obama), even royalty (Princess Diana). Andy Warhol proudly owned one but not for its
intended purpose. “I don’t wear a Tank to tell the time,” said the man who invented the concept of 15 minutes
of fame. “In fact, I never wind it. I wear a Tank because it’s the watch to wear.”
1926
The watch made its movie debut when
Rudolph Valentino insisted on wearing
his Tank during his final film, The Son
of the Sheik. Call it an anachronism—or
proof of the Tank’s timelessness.
1919
The watch, with its Roman numerals,
railroad-track minute markers and
signature sapphire cabochon crown,
was offered for sale in Paris. Six
were sold in 1920, and it was given a
name—the Tank Normale.
1976
More than a decade after the Cartier family sold the business, the
new owners created a lower-priced line, Les Must de Cartier. In
1976, the Cartier Must de Tank, with colorful lacquered dials and no
numbers, debuted. The gold-plated quartz watch, which retailed
for about $150, tarnished the prestige of the brand, but sales were
extraordinary, and they remain collectible, often selling for more
than $1,000.
1963
First Lady Jackie Kennedy was
given a 1962 Tank Ordinaire by her
brother-in-law Prince Stanislaw
“Stas” Radziwill. In June 2017, the
watch broke the record for the
most expensive Cartier Tank ever
auctioned, selling for $379,500—
to Kim Kardashian.
1996
Having released the Tank
Américaine in 1989, a curved
cousin of the Cintrée, Cartier
introduced the sportier Tank
Française, which had a chainlink bracelet. A postdivorce
Princess Diana was often
photographed with a gold
version, and Michelle Obama
wore a stainless-steel Tank
Française in her official
portrait as First Lady in
2009.
2012
Cartier put another country on the
Tank map with the Tank Anglaise.
A variation on the Française, the
Anglaise came in three types of gold
and housed the crown in the watch’s
brancard, a reminder that a Tank
should always protect.
78 | FORBES ASIA OCTOBER 2017
2017
For the watch’s centennial, Cartier has
introduced a battalion of Tanks in some of
its most iconic models, including a Tank
Américaine that’s finally available in stainless
steel (beginning at $5,750); a tribute to the
man who got it all ticking, a Tank Louis Cartier
(beginning at $9,750); and skeletonized
versions of the Tank Cintrée, limited to editions
of—what else?—100.
THREE LIONS/GETTY IMAGES; THE ANDY WARHOL FOUNDATION FOR THE VISUAL
ARTS, INC.; WORLD HISTORY ARCHIVE/ALAMY; TIM GRAHAM/GETTY IMAGES;
JOYCE N. BOGHOSIAN/GETTY IMAGES; DAVID CAIRNS/EXPRESS/GETTY IMAGES
1917
According to company lore,
the Tank was designed by
Louis Cartier, the founder’s
grandson, after being
inspired by the tread of a
Renault FT-17 light tank,
a mechanical hero of the
Great War. More likely, the
design was an elegant
update of the square Cartier
Santos watch. But the
military connection made
for good marketing—the
first Cartier Tank was
presented as a victory watch
to American general John
Pershing in 1918.
1921
Cartier threw the Tank a curve when it introduced the first
variation on the Normale—the Tank Cintrée, an elongated
watch with a curved case that hugged the wrist. Because
each new Cintrée has been produced in limited editions,
it has remained one of the most collectible 20th-century
watches, routinely selling for between $25,000 and $50,000,
and as much as $250,000 for exceptional platinum versions.
TECHNOLOGY
BEN SIN // GADGETMAN
THOMAS KUHLENBECK FOR FORBES (TOP)
ANCHEER’S TINY BIKE
TWO MONTHS AGO, during one of
my biweekly visits to Shenzhen to check
out the hardware scene’s latest developments, I met some people from a company called Ancheer who told me they were
in the process of finalizing production
of an “ultralight electric bicycle.” Having written about the growth of China’s
smartbike scene—as well as being a longtime cycling enthusiast—I was eager to
put the bike to a test.
So imagine my disappointment when
the company informed me that the product was ready for me to try in
Shenzhen . . . days before I was set to fly to Los Angeles for a friend’s wedding. I told them my visit would have to wait. “It’s okay,” they said, “we
have units in the U.S. you can test for a couple of days.”
It turns out Ancheer has long been a manufacturer of small electronic
vehicles like scooters, and it’s been selling on Amazon to the West for
years. Ancheer’s rep told me that because of Hong Kong’s import restrictions, it’s easier to ship the bike to L.A. Which is how I found myself riding
a tiny e-bike to my friend’s wedding. (Fortunately, the venue was nearby—
this thing isn’t meant to go long distances.)
I’ll get the slightly bad news out of the way first: Ancheer’s foldable ebike is so petite, so toylike, that a grown man riding it in the U.S. is destined
to get teased, and that’s exactly what happened when my friends saw me
rolling into the parking lot like Harry and Lloyd from Dumb and Dumber.
But the good news is great: The product is exactly as advertised! The
bike weighs only 23 pounds, which means it can easily be carried with
one hand by most adults. The handlebars can be folded down, shrinking
the bike’s height to just 2 feet. Such portability doesn’t bring much benefit
in L.A., land of vast spaces and giant houses. In New York, Tokyo or Paris
though? Being able to lug this up the stairs to an apartment without breaking a sweat is going to be a godsend.
This e-bike requires no pedaling—you simply rest your foot on a peg;
the 350w motor that powers its 12-inch rear wheel is enough to push the
thing to just over 10 mph for me. Ancheer claims the bike can reach 15
mph for most people, and I’m inclined to believe it, because at 190 pounds,
I am considered heavy. If the rider weighs, say, 120 pounds, I can see the
speed jumping 50%.
The e-bike can go 12 miles on a single charge (the lithium-ion battery
is made by LG). Again, L.A. isn’t the ideal place for this bike because the
city is so spread out and everyone drives. But for cities in China, Japan or
Europe, 12 miles is great for neighborhood commutes.
During my testing, the bike performed perfectly well on the road. On
sidewalks and unpaved dirt roads, the wheels struggled a bit with bumps
and rocks, but there was nothing that would derail the commute—it just becomes a bumpy ride.
The bike could take me up slight inclines, but
steep ones might be a struggle. The left handlebar houses the bike’s on/off switch along with a
brake lever (it uses a rear disc-brake, like a standard bicycle); the right side has a battery meter
and the throttle. Simply pull back on the lever to
accelerate (there’s a cruise-control button if you
don’t want to be continually pulling back).
Being a smartbike from China, it of course
comes with a companion app, which works
quite well. Connecting via Bluetooth is easy, and
once synched, the app shows riding stats and a
map with your location. The app can also lock
the bike (you unlock it with a PIN or password),
but all the lock does is disable the bike’s throttle.
A thief can still pick the bike up and walk off
with it, so it would probably be a good idea to
use a standard bicycle chain lock.
The Ancheer e-bike is selling on Amazon
right now for $400. If you live in a cyclingfriendly city and have a walk-up apartment, this
ultraportable e-bike is for you. F
The perfect bike for short distances and walk-ups.
BEN SIN IS A HONG KONG-BASED CONTRIBUTOR TO FORBES.COM WHO WRITES ABOUT CONSUMER TECH.
OCTOBER 2017 FORBES ASIA | 79
THOUGHTS ON
Work
“ALL LABOR
HAS DIGNITY.”
—MARTIN LUTHER KING JR.
“Anyone can do
any amount of
work, provided
it isn’t the work
he is supposed
to be doing at
the moment.”
—ALAIN DE BOTTON
“People don’t
choose their
careers—they are
engulfed by them.”
—JOHN DOS PASSOS
“Every man’s work, whether
it be literature or music or
pictures or architecture or
anything else, is always a
portrait of himself.”
—SAMUEL BUTLER
“One never notices
what has been done;
one can only see what
remains to be done.”
—FRANK MOORE COLBY
“THE THREE MOST
HARMFUL ADDICTIONS
ARE HEROIN,
CARBOHYDRATES AND
A MONTHLY SALARY.”
“The price
one pays for
pursuing any
profession
or calling is
an intimate
knowledge of
its ugly side.”
—NASSIM NICHOLAS TALEB
—JAMES BALDWIN
—MIGUEL DE CERVANTES
—BETTE DAVIS
“I HAVE FOUND
SOME OF THE
BEST REASONS
I EVER HAD FOR
REMAINING AT
THE BOTTOM
SIMPLY BY
LOOKING AT THE
MEN AT THE TOP.”
—MARIE CURIE
“DILIGENCE IS THE MOTHER OF GOOD
FORTUNE, AND THE GOAL OF A GOOD
INTENTION WAS NEVER REACHED THROUGH
ITS OPPOSITE, LAZINESS.”
“THIS BECAME A CREDO
OF MINE: ATTEMPT THE
IMPOSSIBLE IN ORDER TO
IMPROVE YOUR WORK.”
—ROBERT BENCHLEY
“HOW CAN I TAKE
AN INTEREST IN
MY WORK WHEN
I DON’T LIKE IT?”
—FRANCIS BACON
FINAL
THOUGHT
“A SLUGGARD’S APPETITE IS NEVER FILLED, BUT THE
DESIRES OF THE DILIGENT ARE FULLY SATISFIED.”
“Fill today with
work; fill tomorrow
with hope.”
—PROVERBS 13:4
—B.C. FORBES
SOURCES: NOBODY KNOWS MY NAME, BY JAMES BALDWIN; THE ALGONQUIN WITS, BY ROBERT E. DRENNAN;
THE TIMES BOOK OF QUOTATIONS; THE WAY OF ALL FLESH, BY SAMUEL BUTLER; DON QUIXOTE, BY MIGUEL DE
CERVANTES; THE PLEASURES AND SORROWS OF WORK, BY ALAIN DE BOTTON; ESSAYS, BY FRANK MOORE COLBY;
THE AUTOBIOGRAPHY OF MARTIN LUTHER KING JR.
80 | FORBES ASIA OCTOBER 2017
CLOCKWISE FROM TOP LEFT: MONDADORI PORTFOLIO/GETTY IMAGES; ULF ANDERSEN/GETTY IMAGES; CULTURE CLUB/GETTY IMAGES; HOWARD SOCHUREK/THE LIFE
PICTURE COLLECTION/GETTY IMAGES; JOHN SPRINGER COLLECTION/CORBIS/CORBIS/GETTY IMAGES; DAVE PICKOFF/AP; ANN RONAN PICTURES/PRINT COLLECTOR/GETTY
IMAGES; MOVIESTORE COLLECTION/ALAMY; PRISMA/UIG/GETTY IMAGES;WOLVERHAMPTON CITY COUNCIL/ARTS AND HERITAGE/ALAMY
“Office life typically
proceeds behind
a mask of shallow
cheerfulness, leaving
workers grievously
unprepared to
handle the fury and
sadness continually
aroused by their
colleagues.”
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