Forbes - Asia (April 2019)

18.
Yusaku Maezawa (middle) poses MASAHIRO NODA
with his employees wearing outfits $2.35 BILLION S
measured by the Zozosuits. OBIC
AGE: 80


19.
KATSUMI TADA
$2.2 BILLION S
DAISHO GROUP
AGE: 73


20.
KINOSHITA FAMILY
$2.05 BILLION T
ACOM


21.
KAZUO OKADA
$2.04 BILLION T
UNIVERSAL ENTERTAINMENT
AGE:76


22.
YUSAKU MAEZAWA
$2 BILLION T
ZOZO
AGE:43


23.
MASATERU UNO
$1.9 BILLION T
COSMOS PHARMACEUTICAL
AGE:72
EIICHI KURIWADA: DELIVERING THE GOODS

This could be the year that SG Holdings and Hitachi Transport 24.
System finally come together. When SG and Hitachi announced CHIZUKO & MICHIO
a tieup in 2016, the companies said that a full merger might MATSUI
occur in three years if there were enough synergies between $1.8 BILLION S
them. SG owns a 29% stake in Hitachi, while Hitachi owns 20% MATSUI SECURITIES
of SG’s door-to-door package delivery unit Sagawa Express.
The combined entity by revenue would overtake Yamato 25.
Holdings, Japan’s largest delivery company, and close the gap EIICHI KURIWADA
with the nation’s biggest corporate logistics company Nippon $1.75 BILLION S
Express. Such a move would also help SG further improve its SG HOLDINGS
margins by focusing on B2B services. AGE: 72
The chairman of SG, Eiichi Kuriwada, joined the 2018 Japan
rich list after an IPO of his firm on the Tokyo exchange in
December 2017. Its shares have climbed more than 40% since 26.
that debut, boosting Kuriwada’s ranking to No. 25 this year from YOSHIKO MORI
No. 40 last year. $1.73 BILLION T
Sagawa Express, known for the blue-striped shirts of its hustling delivery drivers, competes MORI BUILDING
KIYOSHI OTA/BLOOMBERG $9.5 billion in the fiscal year through March 2018 is two-thirds of Yamato’s nearly $14 billion in sales ÌNEW TO LIST 3RETURNEE
AGE: 78
with rival Yamato, which pioneered Japan’s consumer-focused delivery services. SG’s revenue of
and half of Nippon Express’ over $18 billion revenue, putting SG at a distant third.
The son of the Sagawa Express founder Kiyoshi Sagawa, Kuriwada joined his father’s firm in
1977. (He took his mother’s maiden name after his parents split.) In 1993, Kuriwada took the helm of
SUP TDOWN WXFLAT
Tokyo Sagawa Kyubin, which later became a key subsidiary for SG. —James Simms




APRIL 2019 FORBES ASIA | 47

Japan’s 50 Richest






THE LIST WEALTH CREATION



27. Abe’s Aim is True
SATOSHI SUZUKI
$1.72 BILLION T Japan is doing better than what’s portrayed in conventional analyses.
POLA ORBIS HOLDINGS
AGE: 65
BY YUWA HEDRICK-WONG

28.
HIROKO TAKEI
$1.7 BILLION T
TAKEFUJI
AGE: 65


29.
TADA BROTHERS
$1.65 BILLION T
SUNDRUG


30.
KENTARO OGAWA
$1.5 BILLION S
ZENSHO HOLDINGS
AGE: 70


31.
KAZUMI IIDA
$1.4 BILLION S NEARLY THREE DECADES after its own asset women’s participation in the labor force and
IIDA GROUP HOLDINGS bubble burst in 1991, Japan is still character- encouraging more domestic investment by
AGE: 79
ized as economically stagnant, weighed down business—all to revive the domestic engine
by mounting debts and increasingly long-lived of economic growth.
32. retirees. The latest data have deepened the The structural reforms targeted in this
YASUHIRO
FUKUSHIMA gloom, with the IMF estimating that Japan’s third arrow are a vital ingredient for success.
$1.35 BILLION T GDP growth slowed to 0.9% last year from Stronger private domestic consumption is
SQUARE ENIX 1.9% in 2017. The benchmark Topix stock needed to tilt Japan away from its dependency
AGE: 71 index slid almost 8% last year. It is easy—natu- on external demand. In the decade since the
ral in fact—to be pessimistic about Japan. global financial crisis, Japan’s gross national

33. The reality is more nuanced. The Japanese product (which includes Japanese output
SHINTARO YAMADA economy today is arguably healthier than it from both inside and outside the country) is
$1.3 BILLION Ì has been in over a decade, with annual GDP about 3% bigger than its GDP (which counts
MERCARI growth averaging 1.3% since 2012, again only output produced domestically) year after
AGE: 41
according to the IMF, double the 0.63% year, according to the Federal Reserve Bank
average in the previous decade. Prime Min- of St. Louis. This trend is because Japanese
34. ister Shinzo Abe’s efforts to rejuvenate the businesses have been expanding production
YOICHI & KEIKO Japanese economy, dubbed Abenomics, are overseas to take advantage of cheaper labor
ERIKAWA
$1.25 BILLION S beginning to bear fruit even if progress has and to get closer to their foreign customers,
KOEI TECMO HOLDINGS been hesitant and uneven. especially those in China and Southeast Asia.
AGES: 68,70 Abenomics consists of three “arrows:” Simply put, Japanese businesses are investing
monetary policy, fiscal policy and structural where the opportunities are—and those op-
35. reform. Of the three, it is the third arrow that portunities are outside Japan.
KAGEMASA KOZUKI is arguably the most important, especially for Japan’s population is both aging and
$1.21 BILLION T Japan’s long-term growth trajectory. It aims shrinking, which means the domestic
KONAMI HOLDINGS to bring about stronger wage growth to boost consumer market will become even smaller. GETTY IMAGES
AGE: 78
household consumption, while increasing Compounding the situation is that wages




48 | FORBES ASIA APRIL 2019

have not been growing in recent years despite need to pay more to attract contract work- 36.
record-low unemployment. Abe has pushed ers. When the new legislation is implemented TOSHIO MOTOYA
hard to get Japanese companies to raise wages, comprehensively, wages will be higher even $1.2 BILLION Ì
with some success. Yet the real problem lies in when adjusted for the ups and downs of the APA GROUP
the growing trend of companies hiring more business cycle. Given Japan’s gender wage gap AGE: 75
contract workers and paying them almost less of about 25% (much higher than the OECD
than half what they pay full-time workers. average of 15%), and as higher wages apply to 37.
According to government data, the number of both men and women, more women will be MUNEAKI MASUDA
$1.17 BILLION 3
contract workers nearly doubled to 20 million attracted to enter the workforce, further boost- TSUTAYA
in 2017 from 11 million in 1999. ing household incomes and spending power. AGE: 68
There are, however, signs that Abenomics’ The ingredients for success of the third
third arrow is beginning to work. Women’s arrow of Abenomics are slowly coming togeth- 38.
labor-force participation has been steadily er. As the size of the workforce becomes more KANAZAWA
rising—the World Bank estimates the women’s stable through rising women’s participation BROTHERS
labor-force participation increased to 51% in rate; and as households, supported by stronger $1.11 BILLION T
2017 from 48% in 2012. More impressive is wage earnings, spend more, the domestic con- SANYO BUSSAN
the rise of the prime age labor force participa- sumer market will become more attractive to
tion rate, which focuses on those aged 24 to Japanese companies. This could trigger Japan’s 39.
54. In 2000, Japan’s prime age women’s labor transition from export dependence to becom- SOICHIRO
FUKUTAKE
force participation was estimated at 67%, far ing more domestic demand driven. $1.1 BILLION T
below the 77% in the U.S. By 2016, however, it Prime Minister Abe was reelected in Sep- BENESSE HOLDINGS
had risen to 76%, overtaking the U.S. (which tember 2018 and is expected to serve until AGE: 73
slipped to 74%), according to the Brookings 2021. This will ensure the continuity of Abe-
Institution. This recent trend of rising women’s nomics for at least a few more years. Should 40.
the current embryonic structural reforms SHOJI UEHARA
take root, a more balanced Japanese economy $1.08 BILLION T
THE DECLINE OF JAPAN’S TRADI- could emerge, which would in turn trans- TAISHO PHARMACEUTICAL
TIONAL, LIFETIME EMPLOYMENT form businesses’ operating environment. HOLDINGS
SHOULD ENCOURAGE MORE ENTRE- AGE: 91
PRENEURIAL BUSINESS STARTUPS. The decline of Japan’s traditional, life-
time employment should encourage more
entrepreneurial business startups. Simply put, 41.
YASUAKI
labor force participation is fueling household lifetime employment reduces risk-taking and YAMANISHI
income and economic growth while offsetting saps entrepreneurial energy because it lures $1.07 BILLION T
the declining male labor force. young talents into becoming salarymen with IZUMI
There has also been progress in raising security and stability. As the option of lifetime AGE: 72
wages. In 2018, Japan’s parliament passed employment is rapidly fading, more young
new legislation capping overtime work and Japanese will be motivated to strike out on 42.
to ensure that contract workers are paid the their own as entrepreneurs, including young SUSUMU FUJITA
same as full-time employees for similar work. Japanese women. $1.05 BILLION T
The new legislation allows companies the As a rising share of Japan’s consumers will CYBERAGENT
flexibility to hire and fire contract workers be the elderly, new business opportunities are AGE: 45
while enabling contract workers to earn the opening up for goods and services custom-
same wage as regular workers for the same ized to their needs. E-commerce is particu- 43.
work. Should the legislation be implemented larly promising as a channel for serving these MASAYUKI
ISHIHARA
effectively, it would simultaneously improve elderly consumers. Japan has high IT literacy $1.03 BILLION WX
labor market flexibility and raise wages. rates, fast and extensive internet connectivity, HEIWA
There are signs it is working. One of Japan’s and high mobile penetration. These condi- AGE: 70
largest employers, the logistics group Nippon tions, coupled with superb logistics and
Express, recently announced that it would distribution networks, and underpinned by
raise pay for tens of thousands of contract a high trust culture (for safety of delivery),
workers to match that of its regular staff. mean Japan’s e-commerce sector will become
Japan’s tight labor market is clearly helping. even larger, opening up a new horizon for SUP TDOWN WXFLAT
With record low unemployment, companies entrepreneurial investment. ÌNEW TO LIST 3RETURNEE




APRIL 2019 FORBES ASIA | 49

Japan’s 50 Richest





THE LIST




44.
HIROSHI
ISHIBASHI
$1.02 BILLION T
BRIDGESTONE
AGE: 72


45.
HIROSHI OKURA
$1 BILLION T
NOEVIR HOLDINGS
AGE: 82


46.
KENJI KASAHARA
$990 MILLION T
MIXI
AGE: 43

KENJI KASAHARA
47. overtake Facebook, Mixi doubled its IPO
NOBUTOSHI Mixi’s Mixed price on its first day of trading, leaving it with
SHIMAMURA a $1.9 billion market capitalization.
$985 MILLION T Record Mixi, however, gradually lost market share
SHIMAMURA to rivals Facebook, Twitter and Line, prompt-
AGE: 93
FALLING SALES of his company Mixi’s ing the company to shift into new businesses,
game Monster Strike combined with ticket including online dating, photo-sharing and
48. and trademark scandals cost Kenji Kasahara apartment listings. It struck gold when it
YOSHIKAZU entered gaming in 2013 and released Monster
TANAKA $510 million of his fortune in the past year,
$980 MILLION T dropping him to a net worth of $990 million. Strike. It still ranks as one of the most profit-
GREE The problem started in 2017 when allega- able mobile games in history, with 49 million
AGE: 42 tions emerged that independent sellers on downloads and more than $7.2 billion in
Mixi subsidiary Ticket Camp had illegally re- worldwide revenue, according to mobile app
49. sold concert tickets on its site. The site, which researcher Sensor Tower.
MASAAKI ARAI was said to have also violated trademarks, Yet Mixi could not keep up in the fast-
$930 MILLION Ì was shut down in May 2018; its president paced online gaming industry, and Monster
OPEN HOUSE resigned the following month, and was re- Strike has ebbed in popularity. Mixi’s sales
AGE:54
placed. Kasahara hasn’t been implicated and declined 22% to 106 billion yen ($960 mil-
remains Mixi’s chairman. lion) in the nine months ended December
50. The company said in an emailed state- 31, 2018, compared with the same period
HAJIME SATOMI
$900 MILLION T ment written in Japanese that Forbes Asia the year before; profits over the same period
SEGA SAMMY HOLDINGS translated: “Our company is not aware of dropped 32% to 17 billion yen.
AGE:77 any illegality in the Ticket Camp business. While Mixi’s stock languishes, the com-
However, we set up a third-party committee pany has plans to turn Monster Strike into an
which indicated that there might be reputa- eSports game to tap the growing popularity of
tional risk [in such ventures].” sports-based games. “As the company contin-
Kasahara founded Mixi in 2004 as a social ues to expand its touch points with Monster
SUP TDOWN WXFLAT networking site and it went public in Tokyo Strike fans as well as broadening its user
ÌNEW TO LIST 3RETURNEE
two years later, turning then 30-year-old base, it could get better at managing revenue
Kasahara into a billionaire overnight and one declines over the medium term, while poten-
of the youngest people on the 2007 Japan tially producing a sales recovery in the long YURIKO NAKAO/REUTERS
FOR MORE INFO, GO TO rich list. With its unique privacy and sharing term,” noted a report by equity research firm
FORBES.COM/JAPAN features convincing many investors it could Pelham Smithers Associates. —Grace Chung




50 | FORBES ASIA APRIL 2019

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C H E M I C A L S P O L Y M E R S F I B E R S

STRATEGIES







Robots, Robots prostate cancer screening (and the result-



Everywhere ing surgeries) did more harm than good;
still, prostatectomies are common, and In-
tuitive’s machine is used in at least 80% of
them. Last year the company increased its
For 20 years Intuitive Surgical owned its market. revenue 19% to $3.7 billion, on which it

Now the operating room is getting crowded. netted $1.1 billion. Guthart is moving into
new territory with a machine to help doc-
BY MICHELA TINDERA tors inspect lungs for cancer. He is expand-
ing abroad. He is pushing the da Vinci into
stomach shrinking surgery.
t was the femoral artery of a rat that piqued the curios- Guthart, the son of a defense engineer and a science teach-
ity of Gary Guthart. Then a new hire at a research insti- er, grew up in Sunnyvale, California, just a few miles from
tute spun off from Stanford University, he was assigned where Intuitive’s headquarters now lie. His high school math
Ito a surgical robotics lab. He was asked to sew a severed teacher snagged him an internship writing code at a NASA
artery back together by hand, and then to try it again with a research operation, where he was the youngest person in the
prototype robot. lab. He got engineering degrees at University of California,
“That’s what people have to do in surgery?” Guthart recalls Berkeley and California Institute of Technology, with dreams
thinking. “That looks like both a really interesting, important of becoming an academic. But a professor turned him down
problem and a really hard problem, and that got me really ex- for a postdoctoral fellowship. “I think you’re a bright enough
cited.” In 1996, Guthart was working at a startup called Intui- person,” Guthart remembers him saying. “But I don’t think
tive Surgical, which had licensed technology from the institute, you would make a good professor. You don’t like to write, and
SRI International. Two years later, Intuitive launched a robotic you spend a lot of time chatting with people.”
surgical helper, branded da Vinci, that’s changed surgery in the Two months later Guthart found a job at SRI, where he
same way the iPhone has transformed cellphone use. was drafted by a robotics startup founded by surgeon Freder-
Today, nearly 5,000 da Vincis are in operating rooms, used ic Moll, engineer Robert Younge and venture capitalist John
in one million surgeries per year. Intuitive went public just Freund. They licensed technology from the research institute,
after the tech bubble peaked in 2000, and still the stock ended which had received funding from the Defense Department to
the decade 17 times higher than at its IPO. Why? Because, build a system that would enable a surgeon to operate a bat-
until now, Intuitive has had the business to itself. The price tlefield robot remotely. That idea never panned out, but the
tag on a da Vinci is about $1.5 million. Plus, it sells about startup, Intuitive Surgical, had plans to improve minimally
$1,900 in replacement parts per operation. The company’s invasive surgery, a new technique at the time.
30% net profit margin eclipses Microsoft’s. In 1998 surgeons used the da Vinci to perform what the
Guthart, 53, has been chief executive since 2010 and is sit- company reported to be the world’s first computer enhanced
ting on $315 million worth of Intuitive stock and options. But closed chest heart surgeries, like mitral valve repair. But ro-
now he’s going to have to work a little harder. Medtronic, a botic cardiac procedures didn’t get a big uptake in a market
medical-device maker with sales eight times Intuitive’s, and where doctors were focused on a different medical innova-
Verb Surgical, a partnership between Johnson & Johnson and tion: heart stents.
Alphabet, are expected to enter the surgery robot market in the In 2001 the da Vinci got a big break when the Food &
next year. They’re likely to compete on price. And these heavy- Drug Administration cleared it for prostate surgery. Dr. Ben
weights are also making inroads into Intuitive’s future markets: Davies, a professor of urology at the University of Pittsburgh
J&J announced in February that it would pay $3.4 billion in School of Medicine, has been using it for the six to seven
cash for Auris Health, a rival robotics startup with a device that prostatectomies he’s been doing every week for the past de-
can perform lung biopsies. cade. Before the robot came along, he says, this very invasive
There’s another problem, much like the one that caused open procedure would be a challenge because the prostate
Apple to recently warn on sales: After a period of explosive gland is surrounded by sensitive parts of the body that need
growth, a pioneer confronts saturation in its original markets. to be delicately dissected. The result could be lots of blood
A plateauing of sales is inevitable. Morningstar analyst Alex loss. With robotics, the doctor operates the precise controls
Morozov expects Intuitive’s rich multiple (41 times expected while watching a feed from a camera set inside the patient. TIMOTHY ARCHIBALD FOR FORBES
2019 net profit) to come down. He rates the stock a sell. Blood loss is miniscule, Davies says.
And yet Guthart and Intuitive have somehow defied gravi- Sales dipped in 2014, after the bad review of prostate
ty so far. In 2012, a national advisory panel declared that some screening and a warning about robotic hysterectomies from




52 | FORBES ASIA APRIL 2019

CEO Gary Guthart next to
Intuitive Surgical’s fourth-
generation da Vinci Xi robot
at company headquarters in
Sunnyvale, California.




the head of the major U.S. professional group of obstetrics vances aimed at keeping Intuitive’s technology in the lead.
and gynecology doctors. Intuitive got back on track by ex- Still, Guthart aims to take the company beyond the da
panding into hernia repairs, which accounted for 12% of da Vinci. The Ion is a robotic-assisted bronchoscope, which re-
Vinci procedures in 2017, according to one analyst’s estimate. ceived FDA clearance in February. Guthart says the de-
But then there was yet another complication. The New Eng- vice could have helped his mother when she was successful-
land Journal of Medicine published two studies showing that ly treated for lung cancer seven years ago. Someday, the tool
women who had a minimally invasive hysterectomy—wheth- might become a way to destroy cancer cells inside the lung,
er robotic or not—to treat early-stage cervical cancer were much as gastroenterologists can both detect and remove pre-
more likely to die later of the disease than they were with cancerous polyps during a colonoscopy.
open surgery. While radical hysterectomy to treat cervical But this time Intuitive won’t be the first to market. In 2003,
cancer is not a huge portion of Intuitive’s business, Guthart Moll left the company he had cofounded and later started a
told investors in January he expects some impact. rival medical robotics company called Auris Health, attract-
What’s Guthart going to do about the new competitors, ing more than $700 million in venture capital. Auris received
which could attack all of Intuitive’s markets? Its first-mover ad- FDA clearance in March 2018 for a device to perform lung
vantage should help for a while. Hospitals invest in training biopsies. Intuitive has sued, alleging patent infringement, and
and equipment for the da Vinci, which could make it harder for Guthart says he’s not in regular contact with his former boss,
them to switch. Intuitive is adding features to the da Vinci that whose company denies the charges. The case is pending. All
seem plucked from a medical bag of healthcare buzzwords: aug- things considered, it’s fair to expect Guthart’s next nine years
mented reality, big data analytics and artificial intelligence, ad- to be more of a battle than his last nine. F




APRIL 2019 FORBES ASIA | 53

TECHNOLOGY BEN SIN // GADGETMAN









Unfolding the Future







here’s a new phone released, or an-
Huawei Mate X
nounced, just about every week
these days—a sign that the mo-
Tbile industry is nearing a satura-
tion point—but this month we will see the re-
lease of something truly innovative. At least
for gadget geeks like me, this is genuinely ex-
citing: the foldable phone. This product isn’t
a rehash of the clamshell cellular phones of
the early 2000s, which had a screen on one
side and a dial pad on the other. Instead these
phones have a single screen that can fold and unfold like a book.
The appeal of a device that can
be both a tablet and a smartphone,
depending on how the user folds it,
is obvious. The idea has been a gad-
get fantasy for many years, but it
wasn’t attainable until the develop-
ment of organic light emitting diode
(OLED) displays, which are flexible
unlike LCD screens. Samsung Elec-
tronics, a leader in OLED, is nat-
urally the first out the gate, with Fold, so it was impossi-
the Galaxy Fold hitting stores this ble for the media to get
month. But China’s Huawei isn’t far a hands-on review.
behind: it too will release the fold- The company says it
able Mate X in June, using Chinese will host a press event
display maker BOE’s OLED panels. ahead of the phone’s
A bending screen generates a April 26 release date,
number of questions: Will the dis- where the media will
play show signs of creasing or color finally get to test the
distortion at the folding point? Does Samsung Galaxy Fold unit. The foldable de-
such a radical design make the de- vices, given their cut-
vice more prone to malfunction? ting-edge features, are
Will the device’s software be able to keep up with the con- pricey. Galaxy Fold will
stantly shifting screen size and orientation? retail at $2,000, while
Huawei quelled those concerns to some extent at the Mobile World Mate X is priced at $2,600. These two foldable
Congress in February when it allowed a small group of journalists (in- phones are obviously targeted at early adopters
cluding myself) to briefly try out the Mate X. After three minutes of and hardcore tech enthusiasts.
testing the device, I thought that the Mate X fared better than expecta- The good news is other Chinese brands
tions. The eight-inch display was vibrant, without noticeable creasing such as Xiaomi and Oppo already have work-
or color imbalance at the screen’s folding point. Overall thickness when ing foldable prototypes and both brands are
folded is still manageable, at 11mm. The software provided an almost known to sell their products at lower prices.
instantaneous change of display with apps jumping between a small Consumers may be better off waiting until
mobile screen to a larger tablet view within a split-second. At the same 2020, when more affordable foldable devices
event, only Samsung officials were allowed to handle the new Galaxy become available. F


Ben Sin is a Hong Kong-based contributor for Forbes Asia who writes about consumer tech.




54 | FORBES ASIA APRIL 2019

TECHNOLOGY






































































Since the launch of Uber Eats, hen early investors were pitched on Uber’s
its leader, Jason Droege, has had
18% of all of his meals from Eats, original plan for a car-service app in 2008,
including this bowl of noodles. it wasn’t until the second-to-last slide that
Wthey heard delivery could be another mon-
eymaker for the business. Ten years later, delivery is no lon-
ger an afterthought. According to projections from its CEO,
Uber’s Secret Dara Khosrowshahi, Uber Eats is on track to deliver some

$10 billion worth of food worldwide this year, up from an

Gold Mine estimated $6 billion-plus last year. Uber takes a 30% cut and
a delivery fee, then pays drivers, suggesting that Uber Eats
could generate at least $1 billion in revenue this year, or an
estimated 7% to 10% of the total. That means Uber Eats is
already among the planet’s largest food-delivery services
Uber Eats could make up a tenth and ranks second in the U.S. behind rival Grubhub ($1 bil-
of the ride-hailing giant’s revenue lion in 2018 revenue) and ahead of competition like Caviar,

this year, but rivals are already Postmates and DoorDash.
TIM PANNEL FOR FORBES BY BIZ CARSON losing San Francisco-based company was valued at some $76
trying to tap the same vein.
Uber could certainly use the extra calories. The money-

billion when it last raised money, in August 2018, and bank-
ers hope its IPO, expected as early as this quarter, could boost
that to $120 billion. The problem is, there is no way Uber’s




APRIL 2019 FORBES ASIA | 55

TECHNOLOGY




Eats was this interesting part-time en-
Dara Khosrowshahi, Uber’s CEO,
has left much of Eats to Droege: deavor,” says Khosrowshahi, who took
“Honestly, I’m there to do the over as CEO in August 2017. “It has
corporate grunt work,” he says. since exploded, in a good way, into a
truly significant business.”
But despite the growth, Uber Eats is
losing lots of money, and even Khos-
rowshahi doesn’t know when it will be
profitable. Potential Uber investors will
have to decide: Is food delivery a smart
bet on future growth or a fool’s errand
in a crowded market?
It’s a question familiar to Jason
Droege, the 40-year-old protégé of for-
mer CEO Travis Kalanick. Droege has
run Uber Eats since its 2014 inception,
and some of the most critical voices he
had to overcome were from Uber’s pre-
IPO investors, who thought the compa-
ny was on a path to recreate the terrible
economics of Web 1.0 failures—Web-
van, which blew through over $700 mil-
lion trying to reengineer grocery deliv-
ery in the late 1990s, and Kozmo.com,
which spent nearly $300 million trying
to deliver videogames and convenience-
store fare. Droege shrugs off the com-
parisons—and the competition. “The
world was telling us this was a crowded
space. But our hypothesis was it wasn’t,”
he says.
Making money on delivery isn’t easy.
Sure, Uber Eats gets a hefty chunk of
a restaurant’s bill and charges a deliv-
ery fee, generally between $2 to $8. But
Uber has to pay the driver to pick up
and drop off the food, plus market the
service. Uber’s share of the bill is lower,
on average, than in the ride-hailing
business. Restaurants are, at best, semi-
core ride-hailing business is worth that much. LAST YEAR, FOUR willing partners that can ill afford a 30%
Its explosive growth is showing signs of slow- OF EVERY TEN blow to their bottom lines. And since
ing, and internationally the taxi service has PEOPLE WHO USED Uber isn’t (yet) willing to have your
struggled, selling its China operations to local EATS WERE NEW meal share a ride with a paying custom-
rival Didi Chuxing in August 2016, as well as its TO UBER, GIVING er, there are fewer network efficiencies
stakes in Southeast Asia. Uber’s self-driving-car THE COMPANY to capitalize on.
business, once considered the answer to rising ACCESS TO FRESH Its largest competitor, publicly trad-
driver costs, suspended testing and fired work- CUSTOMERS WHO ed Grubhub, has proved you can make
ers after an autonomous Uber killed a pedestri- a profit in this business. That success
an in March 2018. Now, as Uber prepares to tell MIGHT LATER BE has made it a formidable rival, and it’s
investors why they should buy its stock instead CONVINCED TO not the only one: Just in the U.S., Uber
of rival Lyft’s now publicly traded shares, Uber GIVE THE CAR competes against Square subsidiary
Eats looks like a distinguishing factor. SERVICE A TRY. Caviar, well-capitalized startups Door- WINNI WINTERMEYER
“When I first joined Uber, I think Uber was Dash and Postmates, and the potential
much more associated with ride-hailing and giant in the wings, Amazon.




56 | FORBES ASIA APRIL 2019

Kalanick recruited Droege, with whom he had cofound- team of nearly 2,000 remained mostly unscathed. He admits
ed a file-sharing startup as undergraduates at UCLA, in it was a “tough year,” but he told his team to keep their heads
March 2014 to head what was loosely called Uber Every- down and execute.
thing. His mandate: Find a service that could become as big What’s most exciting to Uber executives is that many Eats
as ride-hailing. Droege tried delivering everything from di- customers don’t even use the ride-hailing service: Last year,
apers and deodorant to daisies and dry cleaning. Nothing four of every ten people who used Eats were new to Uber,
worked—except food. giving the company access to fresh customers who might
After a few stunts like delivering ice cream and BBQ on later be convinced to give the car service a try.
the Fourth of July, Uber made its first serious attempt with “Of all the side bets that Uber has made over the years,
Uber Fresh. Fresh had drivers circling city blocks with cool- whether it’s autonomous or delivering other things or dif-
ers full of soups and sandwiches ready for delivery with- ferent modalities of transportation, this has come out as the
in minutes. On launch day in Los Angeles in August 2014, clear number one in scale and executive attention,” says Mike
the Uber team sold hundreds of meals in an hour and a half, Ghaffary, the former CEO of delivery rival Eat24.
a giant leap from the eight orders a day for deodorant. “The Eats is closing in on Grubhub, still the U.S. market leader.
signal spike was big,” Droege says. In 2016, Grubhub controlled over half the market, says Wed-
It was the right market but the wrong product. Magical as bush analyst Ygal Arounian. Its market share dropped to 34%
it was to have a driver show up with a burrito in 5 minutes at in 2018, while Eats’ grew from 3% to 24%. “The pace of their
the tap of an app, Droege realized customers would wait 30 expansion has caught everyone off guard,” Arounian says.
minutes if they could order any meal they wanted. Internal- But the tailwinds helping Eats, such as a generation turn-
ly the team quietly started work on Project Agora (Greek for ing to their phones first when hungry, also propelled its oppo-
marketplace) to launch Uber Eats. They started in Toronto in nents. In 2018, DoorDash raised about $1 billion in venture
2015, chosen because competition was lighter than in a city funding and nearly tripled its valuation to $4 billion. Post-
like New York, and then expanded to Miami, Houston and mates also raised $400 million in the last six months of 2018
secondary cities like Tacoma, Washington. A couple of mar- and now has a valuation of $1.9 billion. Both competitors also
kets (Miami and Atlanta) became profitable in 2017, proving benefit from their single-minded focus on food delivery.
that the business was possible, at least in certain places. To trim costs, Uber Eats batches orders so a driver can
But just as Uber Eats was getting traction, Uber’s executive pick up multiple meals at once. It’s also enticing customers
team fell apart in the wake of reports of sexual harassment, with free delivery from restaurants that already have a courier
gender discrimination and questionable business ethics. Ul- en route. But Khosrowshahi draws the line when it comes to
timately, Kalanick was ousted, and other groups, like self- pairing passengers with pad thai: “We don’t want your experi-
driving cars, lost their department heads. But Droege and his ence to suffer because it may be good for our business.”
To grow further, Uber Eats needs to
win over more customers and restaurants.
Droege is betting partnerships with Mc-
Gobbling Market Share Donald’s and Starbucks will entice custom-

SINCE 2016, UBER EATS HAS GROWN FROM LESS THAN 5% OF THE U.S. ers to open the Uber Eats app instead of a
FOOD DELIVERY MARKET TO NEARLY 25%—AND IT’S EXPECTED TO JUST competitor’s. Uber is also copying Grub-
KEEP GETTING FATTER. hub’s core business model and letting some
restaurants do their own deliveries in ex-
100%
20% 21% 22% 20% 18% change for a bigger take of the bill.
90% 26% 25% Success depends on convincing res-
2% 2% 2% 2%
80% 2% taurant owners like Simon Mikhail, of Si-
2% 2%
70% 12% 13% 13% 14% 15% Other Pie Pizzeria in Chicago, that Eats trumps
10% 12% its rivals. Mikhail works with more than a
60% 7% 9% 8% 8% 8% 9% 9% Caviar dozen delivery services, but only Uber Eats
3% DoorDash
50% approached him with an idea for a virtual
13% 24%
40% 27% 27% 27% 27% Postmates restaurant, after it noticed how many folks
Uber Eats in the neighborhood were searching for
30%
52% fried chicken. Now he sells 160 pounds of
20% 40% Grubhub chicken a week, exclusively through Uber
34%
30% 28% 28% 29%
10% Eats app. “They do cut into profit a little
bit, but it’s worth it,” he says.
0%
Will investors decide that Uber Eats is
2016 2017 2018 2019 1 2020 1 2021 1 2022 1
also worth it? That’s now up to Droege to
1 ESTIMATE. SOURCE: WEDBUSH SECURITIES ESTIMATES. deliver. F




APRIL 2019 FORBES ASIA | 57

TECHNOLOGY


















































































In the early days, Enigma’s Marc DaCosta
and Hicham Oudghiri funded their startup
by hawking goods on eBay and building
websites for companies like Siggi’s yogurt.



Data’s Cartographers






JAMEL TOPPIN FOR FORBES
Two philosophers are using machine learning and artificial intelligence to create a real-time
map of the global economy, and the world’s largest financial firms are lining up at its door.


BY ANTOINE GARA






58 | FORBES ASIA APRIL 2019

In order to do so, Enigma searched the Office of Man-
agement & Budget’s contingency plans for 109 federal de-
partments. It also tapped FederalPay.org for average salaries
and worker counts for 46 agencies. In all, it combed through
2,000 pages and 2 million spreadsheet rows of federal data to
create the tracker. From idea to launch, the effort took three
Enigma number crunchers a total of 36 hours.
The shutdown data is available free, but Enigma’s ability
to rapidly make sense of multiple disconnected data sources,
public and private, and create a customizable view of the glob-
al economy has attracted some of the world’s leading com-
panies, from BlackRock to PayPal, with many clients paying
more than $1 million a year for fingertip access to its insights.
Enigma is the brainchild of Hicham Oudghiri and Marc
DaCosta, best friends since they met 16 years ago as under-
graduates at Columbia University, where they studied philos-
ophy. Their startup organizes information from thousands of
sources around the world into a single, fully linked interface.
“People know how the internet works and how to log users
and serve them cookies to suggest products on Amazon. That
problem is solved. What we’re doing is building a model of
the real world,” says Oudghiri, 34. His cofounder, DaCosta,
34, adds, “This isn’t just about a faster microprocessor or bet-
ter statistics. Enigma is a knowledge graph of what’s going on
in the economy.”
Oudghiri and DaCosta’s journey into data mining began
after the financial crisis of 2008. DaCosta was doing graduate
work in the cultural anthropology of data at the University of
California, Irvine, while Oudghiri was managing renewable-
energy projects for BCME Bank in Morocco. Both were curi-
ous about explaining the world in light of the global disrup-
tions going on. So they reunited and began to organize sets of
publicly available data, starting with Federal Aviation Admin-
istration flight logs. They soon discovered a trove of valuable
information hiding in plain sight—buried in government
logs, university research publications and arcane business fil-
ings. If they could collect, scrub, organize and analyze it, they
thought, it might produce a near real-time rendering of the
macroeconomy.
In 2011, Oudghiri and DaCosta formed Enigma and
ow much did the federal government shutdown went to work amalgamating public data, mostly from gov-
cost? After 35 days of deadlock, $6,354,845,148 in ernment sources such as the Census Bureau, the Feder-
wages had gone unpaid to 747,573 federal employ- al Communications Commission, and the Internal Revenue
Hees. Every second that ticked by added $2,118 to Service, as well as records from the Customs & Border Pro-
the figure. Some staffers were furloughed; many more worked tection agency (CBP) and building permits, and putting it
without pay. At the Department of Homeland Security, for ex- together as a single source. They also became experts in un-
ample, some 245,405 employees were unpaid and 32,706 fur- covering complex, hard-to-find information. For instance,
loughed. At the U.S. Treasury, 36,309 workers were furloughed using Freedom of Information Act (FOIA) requests, Enigma
and 82,336 worked unpaid. At the Environmental Protection taps the CBP’s Automated Manifest System to track every
Agency, 52% of its staffers worked without compensation. container ship that arrives in the U.S., including the im-
Getting a handle on the magnitude of this disruption—as porter and port of call. From the National Fire Incident Re-
well as its granular details—was no small feat. A little-known porting System, Enigma retrieves the cause and location of
New York City fintech company named Enigma tabulated the every fire in the U.S. To cover energy, Enigma leans on oil-
rising costs in real time on a website it threw up called Gov- well data from the Railroad Commission of Texas, founded
ernment Shutdown 2018–2019. in 1891 to establish tariffs.




APRIL 2019 FORBES ASIA | 59

TECHNOLOGY




The firm’s breakthrough year was 2014, when Enigma find ways through machine learning of connecting the data,”
raised $4.5 million from Comcast, American Express and the Baxter says. “When you combine that external data with our
New York Times Co. and entered the Fintech Innovation Lab, internal domain data, then you start to get phenomenally
created by Accenture and the Partnership Fund for New York predictive and insightful trends.”
City. There, embedded with banks and Wall Street giants, Investor John Fogelsong of Glynn Capital thinks the start-
Oudghiri and DaCosta discovered that their data was useful up could present a threat to legacy closed-system “big box”
to financial services. Its information could be connected with technology vendors like Oracle, IBM, SAS and SAP: “Each
data in the banks’ systems, helping them more quickly recog- new data set Enigma ingests compounds the company’s abili-
nize fraud or businesses to underwrite. “We walked out with ty to improve a customer’s business processes.”
a battle plan,” DaCosta says of the accelerator. They quickly BlackRock’s recent experience is illustrative. When Frank
built a software package, and put specialized tools into a com- Cooper, its newly minted chief marketing officer, was asked
pliance interface they called Dossier. to shake up how the $6-trillion-in-assets firm prospects for
To date, Enigma has synthesized 100,000 data sets in more clients, Enigma made a surprising discovery: Contrary to the
than 100 countries, organized intelligence on 30 million small traditional approach based on regional and demographic tar-
businesses and accumulated 140 billion points of data on the geting, there was little correlation between a client’s location
U.S. population. Braininess permeates Enigma’s headquarters and his or her preparedness for retirement, but political en-
in New York’s Flatiron District: Conference rooms are named gagement ranked high. “If someone is politically active and
after philosophers like Michel de Montaigne and Augustine. even if they are a renter, they’re much more likely to plan for
But Enigma’s nerdy culture hasn’t stopped it from attract- retirement,” Cooper says. “It was shocking for us.”
ing corporate clients and funding from Silicon Valley and Not all of Enigma’s machine-learning algorithms are for
Wall Street. BlackRock, PayPal, American Express, MetLife, making profits. The firm has volunteered its data efforts to-
BB&T, Celgene, Merck and EMD Mil- ward studying the gender gap across
lipore have signed up. The firm has ENIGMA HAS SYNTHESIZED 558 occupations and has already iden-
raised some $130 million in the past 100,000 DATA SETS IN MORE tified that some of the most egregious
seven years from venture investors like THAN 100 COUNTRIES, disparities occur in accounting, retail
New Enterprise Associates, Crosslink ORGANIZED INTELLIGENCE and sales. After a November 2014 fire
Capital and Glynn Capital, and hedge ON 30 MILLION SMALL killed five people in a smoke-detec-
funds like Two Sigma Ventures and BUSINESSES AND tor-less home in New Orleans, Enigma
Third Point Ventures. Forbes estimates ACCUMULATED 140 BILLION worked with the city’s fire department
Enigma’s valuation is $750 million, POINTS OF DATA ON THE and Office of Performance & Account-
with revenues pushing $30 million an- U.S. POPULATION. ability to identify areas where fire safe-
nually, the company having doubled ty is weakest.
its customer base in 2018. On Enigma’s public website, it of-
If a hedge fund wants to know fers national fire-incident data free
which restaurant chains are growing the fastest, Enigma can for city planners to use, and 50 years of weather anomalies in
check FCC logs for radio licenses, which are required to open the U.S., plus nationwide data sets on everything from cancer
drive-through windows. Insurers use Enigma for risk assess- statistics to so-called adverse events, as defined by the Food
ment, and pharma companies query its data-crunching ma- and Drug Administration. In New York City, for example, an
chines to improve drug safety. Enigma FOIA allowed it to synthesize years of rail incident
Want to quickly and precisely identify the best candidates and injury data reported to the Metropolitan Transportation
for small business loans? Instead of cold-calling storefronts Authority. The firm is also working with a nonprofit called
or schmoozing local Chamber of Commerce officials, Enig- Polaris to combat and prevent slavery and human trafficking.
ma will synthesize property-tax filing information with state The idea is that data can not only lead to better underwriting
business filings and Uniform Commercial Code liens to come but also improve government. Oudghiri and DaCosta call it
up with automated credit identities. Need to avoid under- “data for social good.”
writing in risky fire zones? Why not sew together data sets on Is Enigma vulnerable to the kind of data-usage scandals
emergency-call logs and building permits? that have plagued Facebook? “I think the behavior from the in-
At MetLife, chief digital officer Greg Baxter is starting to ternet companies has been suspicious if not malicious, creat-
use Enigma data pulled from public health systems and uni- ing a picture of your behavior that is probably above and be-
versities by connecting it to its own systems to detect pockets yond what you would consent to,” Oudghiri says, arguing that
of illness or risk and to improve underwriting. In MetLife’s Enigma’s work with financial services firms strikes a more mu-
$588 billion investment management arm, Baxter is using tually beneficial covenant. “Your data is a means to understand
Enigma data to quantify how the quality of restaurants, parks if you are a legitimate person,” he says. “From a privacy stand-
and community event spaces affects real estate prices. “They point, you enter those relationships knowingly and explicitly.
discover data sources, they organize the data and then they The need for sharing data arises from a pretty good place.” F




60 | FORBES ASIA APRIL 2019



FORBES LIFE





Burch





Branches Out






With Nihi resorts, Chris Burch hopes to
build a world-class luxury hotel brand.

BY CHRISTIAN BARKER



merican entrepreneur Chris Burch, 66, says his
original motivation for entering the high-end re-
sort business was more personal than monetary—
Ahe fell in love with Nihiwatu, a remote luxury re-
sort on the island of Sumba in Indonesia, where he went to
spend quality time with his three sons. After his visit there,
he decided to buy the place in 2012 from the original found-
ers Claude and Petra Graves. Now christened Nihi Sumba, he
is turning the property into the flagship of what he hopes will
become a global luxury hospitality brand, Nihi Resorts.
“It started as a small project, really for my children—that’s
100% why I bought it, to spend quality time with my sons,”
says Burch. He also has three daughters with his first wife,
Susan Cole, but Burch says they’re “not really beach people”

Outdoor lounge area James McBride (left) and Chris Burch




and prefer to holiday with their dad at his property outside
Nihiwatu Beach is popular Paris. His boys are from his marriage to fashion designer and
among surfers drawn by ex-wife Tory Burch. “My boys love Nihi, though. We try to
the perfect wave breaking go together twice a year, for two weeks each time.” Buying the
just offshore.
property, Burch says, “came about just as a way to do some-
thing nice for my kids, and it turned into something that’s a
special place for a lot of people.”
Indeed, the deepest satisfaction Burch gets today, he says,
is not only from creating great memories at Nihi with his own
children, but in seeing other families do the same. “As any
parent knows, time goes by very fast. It gives me such plea-
sure to see families have a fantastic time at Nihi. It’s a luxury
vacation, but it’s not just all about hanging out at the pool—
there’s horse riding on the beach and hiking, a whole variety
of cultural activities,” says Burch. “It’s really impactful.”
Burch’s foray into resorts is a far cry from his original ca-
reer in retailing. Burch made his first fortune about two de-
cades ago, selling the preppy clothing brand he and his broth-
er Robert started, Eagle’s Eye, in a 1998 deal that valued the
company at $60 million. During the years that followed,
Burch’s wealth grew through canny investments in telecom,
real estate, retail and technology. His debut on the Billion-
COURTESY OF NIHI SUMBA aires list came in 2013, after Burch reaped $650 million sell-

ing most of the 28% stake he’d held in the Tory Burch fashion
business that he and his ex-wife had built over the previous
decade. He fell off the billionaires list in 2015, but remains
very wealthy.




APRIL 2019 FORBES ASIA | 63

FORBES LIFE


























Nihi boathouse








Treehouse villas














Treehouse villas
interior




It was in search of an off-the-grid getaway destination
that Burch stumbled onto Nihiwatu. While more than 5 mil-
lion tourists visit Bali every year, official figures show only
about 15,000 visit Sumba. Many are heading to the Nihi
Sumba resort that Burch and South African hotelier James
McBride have been building on the foundations of the Nihi-
watu property.
Nihiwatu, the name of the beach in front of the resort, is
popular among surfers drawn by the perfect wave breaking Only few surfers are allowed to go at one time
just off its shore. When Burch first arrived in 2012, the re-
sort had six bungalows and two villas
Burch considers Nihi to be probably
overlooking a 2.5km stretch of beach,
on the edge of a property compris- the most irrational, emotionally-driven
ing nearly 500 acres of unspoilt wilder-
ness. The original founders also started investment he’s ever made.
the Sumba Foundation to provide edu-
cation, medicine, clean water and other vital services to the Burch invested a total of $35 million into Nihi Sumba.
local communities, a work that Burch has continued. To transform the original, rustic resort into a truly world-
“When we first came to this resort in 2012, it was a very class destination, Burch partnered with McBride. Burch got
small place, but it had such a spirit to it,” Burch says. “Claude to know McBride when McBride was the general manag-
and Petra Graves had done such an amazing job of build- er of New York’s Carlyle Hotel, where Burch lived for a spell.
ing this ‘lost world’ at the ends of the earth.” When Burch “James was a friend to me, he was so kind to me while I lived
learnt that the couple were open to an offer that would allow at the Carlyle,” Burch explains. “And I came to realize, this
the resort to improve and grow, he acquired a majority stake guy is a true genius. So when I was considering buying Nihi,
in 2012. With that transaction, plus the purchase of approx- I convinced James to come have a look—and we agreed that COURTESY OF NIHI SUMBA
imately 100 acres of additional land, and the rebuilding and together, we’d build it as we envisioned it, together. It was a
expansion of the resort to its current footprint of 33 villas, real collaboration.”




64 | FORBES ASIA APRIL 2019

Beach polo



















































Burch considers Nihi to be probably This goes some way to explaining why Burch and McBride
the most irrational, emotionally-driv- are scouring the world for locations to create new Nihi out-
en investment he’s ever made. Similarly, posts. Doubtless with an eye on recent deals like the January
his partner McBride says, “There were sale of Bangkok-based Six Senses to the InterContinental Ho-
many times in the dark days of building tels Group for $300 million, they’re on a mission to expand
Nihi where my peer group thought I’d the Nihi brand.
gone completely nuts or descended into But they’re committed to doing it authentically. “It would
midlife crisis.” The pair’s work has paid be easy for me to set up a licensing company, just let anyone
off, with Nihi Sumba winning numer- build Nihis anywhere in the world, and make a lot of money.
ous accolades, including Travel + Lei- That’s not what we want to do,” Burch says. Instead, he and
sure magazine’s prestigious World’s Best McBride consider it essential that each new Nihi replicate
Hotel award in 2016 and 2017. “I was Sumba’s recipe of sustainable luxury, responsibility, philan-
blown away, shocked,” says Burch of the awards. “It just made thropy and community engagement, in a wild seaside setting.
us work harder. It’s really helped the hotel. Guest expecta- They’ve secured three suitable locations thus far: one in
tions, obviously, have gone up, but we rarely have a guest Guanacaste, Costa Rica; another in East Cape Baja, Mexico;
who’s not happy.” and a third on the northeast coast of Iceland. With total pro-
Nihi Sumba has, to the surprise of the pair, performed jected budgets of between $50 to $75 million for the Mex-
well as an investment. “Neither Chris nor I initially thought ico and Costa Rica properties, and $30 million for Iceland,
that Nihi would make a nickel,” says McBride. “However, it’s each will feature between 30 to 45 rooms, on a similar scale
turned out to be very successful.” According to McBride, av- to Sumba. Distinct from the brand’s Indonesian wellspring,
erage occupancy at the resort—where a one-bedroom villa however, the new Nihis will also boast a residential element,
starts at $1,545 per night during high season, while night- allowing individuals to purchase their own slice of paradise.
ly tariff on a five-bedroom estate is $16,595—is over 70%. As Nihi embarks on its ambitious campaign of global ex-
In terms of RevPAR (revenue per available room, a standard pansion, there’s also potential for more significant, large-scale
hotel metric), he asserts, “Nihi is the number one performing investment from interested outside parties. “We are raising
hotel out of the whole competitive set in the greater Bali area. money at the moment and we do have joint venture partners,”
We outperform everybody. Bulgari, Ritz-Carlton Reserve, the McBride says. “Unlike Sumba, this is not simply a case of
Amans—we outperform them all.” Chris Burch writing a check. It’s a very different situation.” F




APRIL 2019 FORBES ASIA | 65

THE SUPER








MODELS








Want a vintage Bugatti, a classic Ferrari

or a modern McLaren supercar at

a fraction of the cost? Amalgam Collection

will build one—at a fraction of the size.



BY CHUCK TANNERT
















































andy Copeman and his team of master craftsmen in it’s often hard to tell Amalgam’s miniature masterpieces from
Bristol, England, build cars that enthusiasts covet: the the real thing. “That’s the goal,” says the 65-year-old found-
1938 Alfa Romeo 8C 2900 Mille Miglia, 1938 Bugat- er. “If you can take a high-resolution photograph and put it
Sti Type 57SC Atlantic, 1962 Ferrari 250 GTO 3589GT, in front of somebody, and they have no idea whether they’re
1961 Jaguar E-Type Series 1-3.8 Coupé and 1957 Porsche looking at a model or the real car, then we’ve done our job.”
356A Speedster, to name a few. Each car is an impeccably de- Some of Amalgam’s models even perform like their full-size
tailed, beautifully painted handmade masterpiece—and costs cousins. For example, the new 1:8 scale McLaren Senna, which
a fraction of what these vintage vehicles and contemporary costs a little more than $13,000, features headlights, taillights
exotics would sell for at auction or through a dealer. and hazards that light up via remote control. The doors are mo-
Then again, they’re also one eighth the size. That’s because torized and can move up and down on command.
Copeman’s company, Amalgam Collection, specializes in Copeman’s interest in tinkering developed when he was
building meticulous scale models of vintage and modern auto- a teenager. He built a reflecting telescope when he was 14, as
mobiles. In fact, without a visual clue to reveal the relative size, well as a couple of electric guitars. One of his greatest pas-




66 | FORBES ASIA APRIL 2019

Amalgam’s 1:8 model
of the McLaren Senna
comes with a remote
control, which operates
the supercar’s lights and
opens its electric doors.









































































sions was modifying and racing mopeds. “I used to strip all He moved to Bristol in the late 1970s, and within a decade
the steelwork off them and turn them into lean, mean ma- he and three of his colleagues had formed Amalgam Model-
chines and then race them in my parents’ garden in London,” makers. “After six years [working for a small model-making
he recalls with a chuckle. company], our skills and confidence had grown to the point
After dropping out of school at 17, Copeman became where we decided to start our own partnership making ar-
something of a nomad: “I was a young hippie and traveling chitectural models for the likes of Norman Foster and other
throughout Europe and North Africa. That’s what anyone with rising starchitects, as well as industrial designers like James
a sense of adventure would look to do at the time.” He even- Dyson,” Copeman says.
tually settled in an artists’ colony in Somerset, England, called Amalgam began designing model cars for Formula 1 racing
Nettlecombe Studios, which was established by British paint- teams in 1995 after approaching Jordan Grand Prix, a nascent
er and printmaker John Wolseley. At Nettlecombe, Copeman F1 constructor. “It was the crystallization of a passion for mo-
found his vocation as a model maker after being asked to cre- torsport that I and several members of our team had, especial-
ate scaled buildings and villages for an architecture firm. ly for Formula 1,” Copeman says. As a kid he was a fan of Jim




APRIL 2019 FORBES ASIA | 67

FORBES LIFE


Clark, one of the greatest Formula 1 drivers of all time, and was Once the design is set, it is meticulously scaled down to
an enthusiastic slot-car racer at age 15. “My passion for 1960s bring the details to life in miniature. Molds are created for the
Formula 1—and car design in general—was just waiting to individual parts, and metal, carbon fiber or rubber is used to
find an outlet,” he says. “We got the opportunity to make a first create each piece of the puzzle, while some are produced by
model under license [the Jordan 196], then got a deal with Wil- 3-D printers.
liams Formula 1 in 1996 and finally with Ferrari in 1998.” After the parts are cast, they are washed, cleaned and
In 2004, Amalgam split into two entities: Amalgam Mod- sanded. Then each set of parts goes through a fettling and fit-
elmakers and Amalgam Fine Model Cars; one team made ting process to ensure they go together perfectly. Afterward,
one-off architectural models and the other produced scores the models are primed, spray-painted and polished. Decals
of miniature cars. “I had ambitions to build a brand making and printed finishes are applied, then subassemblies such as
the best model cars in the world,” Copeman says. “That in- engines, wheel hubs and suspensions are built, followed by
volved a degree of risk taking and a mission not shared with final assembly. “About 90% of the skills we use are very tradi-
my partners.” The two companies remain deeply connect- tional,” Copeman says of the process, most of which is done
ed, though. “We operated out of the same building for sever- by hand and which he likens to fine watchmaking. “Ten per-
al years and are still good friends today,” he insists. But Cope- cent are modern.”
man has no financial interest in the original company. “We do Producing the design molds takes between 2,500 hours
share ownership of our original workshop,” he adds. (for, say, open-wheel racers) to 4,500 hours for complex
From 2006 to 2007, Ferra- classics, and it takes another
ri’s then-president, Luca Corde- 250 to 450 hours to make each
ro di Montezemolo, commissioned model. “For example,” Copeman
Amalgam to make miniatures of says, “The Ferrari LaFerrari takes
current and classic road-going Fer- about 3,500 hours to develop and
raris. “We started with the 250TR, another 350 to build.”
as opposed to the GTO,” says Cope- Amalgam’s elite clientele still
man. “A Scaglietti car.” It took some consists of Formula 1 teams, driv-
time, but Lamborghini, McLar- ers and managers, but it also in-
en and other automakers eventual- cludes famous collectors. Sylvester
ly wanted models of their vehicles Stallone bought a limited edition
as well. That’s when business real- 1:8-scale Ferrari F1 car from the
ly took off. early-2000s Michael Schumacher
Today the company, which era. Ralph Lauren commissioned
Copeman renamed Amalgam 17 models of cars from his collec-
Collection in 2016, has revenues tion while they were on display
around $10 million a year, build- at the Musée des Arts Décora-
ing more than 500 models a month tifs in Paris, including a Jaguar D-
that range in price from $685 to Type, like the model whose shark
upwards of $150,000, depending fin blazed a triumphant trail at
on size and the amount of detail. Le Mans in 1955, 1956 and 1957.
It employs more than 200 people Swiss watchmaker Richard Mille
Sandy Copeman in his Bristol, England, factory with 1:8
and has two manufacturing facili- models of a Porsche 917k, F1 race cars and other sports cars. commissioned several 1:5-scale
ties outside of Bristol, in Chang An, away from the office, he’s a motorcycle buff. models of cars from his collec-
China, and Pécs, Hungary. tion, which contains some of the
“We manage the design and tooling of the models in Bris- rarest and most significant vintage race cars, including Bruce
tol,” Copeman says, “but most of the models are fabricated in McLaren’s first Formula 1 car (the M2B from 1966) and the
China and Hungary. We are also increasingly making one- Ferrari 312B, which won the 1970 Italian Grand Prix and was
offs and doing special projects out of Bristol.” driven by Mario Andretti.
So how does a model go from concept to finished form? In Surprisingly, Copeman does not collect cars himself. For
the case of newer cars, the Amalgam team works from origi- him it’s all about the personal experience of riding or driv-
nal CAD drawings, obtained from the manufacturers, to pro- ing. “I have owned some lesser but interesting vehicles along
duce minutely accurate drawings of each car part. “[By using the way, such as a 1950s-era MG Magnette, and I’ve had some
the CAD data], all the parts fit together and connect together memorable drives, like the 160 mph race up the M1 motor-
in a good, solid, well-engineered fashion,” Copeman says. way in a Sunbeam Tiger against a Jaguar E-Type,” he says.
Designs for models of classic cars are formulated from “But I’ve owned many more motorcycles than cars.” His ev-
digital scans of the car and hand measurements. “We also eryday ride is a Mercedes CLS Shooting Brake: “It’s a fun LEVON BISS FOR FORBES
work from 600 to 800 photographs,” Copeman says. “We use drive if you want to push it a bit.” Besides, he can build any
them to make sure everything is dimensionally correct.” car he wants—just by dreaming small. F




68 | FORBES ASIA APRIL 2019

When BIG names talk,




they talk to the BBC








Big Interviews on BBC World News






























Tony Fernandes













Priyanka Chopra

















Carrie Lam

















Tom Hanks

FORBES LIFE






Hold-’em as to the resilience of American innovation over the last half


century. “I wanted to be able to have free time,” Wertheim
says. “To me, having time is the most precious thing.”
Born in Philadelphia at the end of the Great Depression,
Herbie Wertheim is the son of Jewish immigrants who fled Nazi

Germany. In 1945 his parents moved to Hollywood, Florida,
and lived in an apartment above the family’s bakery. A dys-
lexic, Wertheim struggled in school and soon found him-
Amid stock market booms and busts, self skipping class. “In those days, they just called you dumb,”
and game-changing innovations from he remembers. “I would sit in the corner sometimes with a
ETFs to algorithmic trading, a Florida dunce cap on.”
During his teens, in the 1950s, an abusive father prompt-
optometrist has beaten the odds to ed Wertheim to run away periodically. He spent much of his
become a buy-and-hold billionaire. time hanging around, hunting and fishing in the Everglades
and selling game, like frog legs, to locals. He also hitchhiked
BY MADELINE BERG around Florida picking oranges and grapefruits. Eventually,
his parents had enough. At age 16 he stood in front of a judge
t’s 9 p.m. on the last Saturday night of the 2018 Art Basel facing truancy charges. Lucky for Wertheim, the judge took
in Miami Beach. On the first floor of the palatial Versace pity on him, offering him a choice between the U.S. Navy and
mansion, the well-dressed and well-botoxed are dancing state reformatory. Wertheim enlisted the following year and
Ito remixes of Michael Jackson’s “Beat It” and posing for was stationed in San Diego.
Instagram by the mosaic tiled emerald pool. “That’s where my life changed,” he says. “They give you
Upstairs, in a VIP room decorated in a mélange of styles tests all the time to see how smart you are, and out of 135 in
that marry classical Greek and Roman touches, a well-dressed our class, I think I was in the top.” With a newfound confi-
septuagenarian named Herbert Wertheim is sitting in front dence, Wertheim studied physics and chemistry in the Navy
of a plate of smoked salmon toast topped with gold leaf and before working in naval aviation. This is about the time Wert-
shaved truffles, and scrolling through photos on his iPhone— heim began investing in stocks. Wertheim made his first in-
scenes from what could only be described as a wonderful life. vestment at 18, using his Navy stipend to buy stock in Lear
There are fan photos of him cooking with Martha Stewart, on Jet. Wertheim met its founder, Bill Lear, during a visit to a
the slopes with Buzz Aldrin and fishing in Antarctica. There Sikorsky Aircraft factory in Connecticut, where the Navy’s
are many with his wife of 49 years, Nicole, on the luxurious S58 helicopters were manufactured. Wertheim was attracted
World Yacht, where the Wertheims now live part of each year. to Lear’s inventions, like the first autopilot systems. (Later, the
He calls these extracurricular activities “Herbie time.” company would invent the eight track tape and pioneer the
What the photos don’t reveal is that Dr. Herbie, as he is business jet market.)
known to friends, is a self-made billionaire worth $2.3 billion “You take what you earn with the sweat of your brow,
by Forbes’ reckoning—not including the $100 million he has then you take a percentage of that and you invest it in other
donated to Florida’s public universities. His fortune comes people’s labor,” Wertheim says. Once out of the Navy, Wert-
not from some flash of entrepreneurial brilliance or dogged heim sold encyclopedias door-to-door before attending Bre-
devotion to career, but from a lifetime of prudent do-it-your- vard Community College and then the University of Florida,
self buy-and-hold investing. where he studied engineering but never graduated. In addi-
Herb Wertheim, 79, may be the greatest individual inves- tion to taking classes, he worked for NASA—then in its first
tor the world has never heard of, and he has the Fidelity state- few years—in a division that improved instrumentation for
ments to prove it. Leafing through printouts he has brought to manned flights. This fueled an interest in the eye and instru-
a meeting, you can see hundreds of millions of dollars in stocks ments optimized for vision.
like Apple and Microsoft, purchased decades ago during their In 1963 he received a scholarship to attend the South-
IPOs. An $800 million-plus position in Heico, a $1.8 billion ern College of Optometry in Memphis and after graduation
(revenue) airplane parts manufacturer, dates to 1992. opened up a practice in South Florida. For 12 years he toiled
There are dozens of other holdings, ranging from GE and away, seeing patients who were mostly working class and who
Google to BP and Bank of America. If there’s a common sometimes paid their bills with bushels of mangoes and avo-
theme to Wertheim’s investing, it’s a preference for industry cados. Wertheim spent his evenings tinkering on inventions, JAMEL TOPPIN FOR FORBES
and technology companies and dividend payers. His financial and in 1969, he invented an eyeglass tint for plastic lenses
success—and the fantastic life his portfolio has afforded his that would filter out and absorb dangerous UV rays, helping
family—is a testament to the power of compounding as well to prevent cataracts.




70 | FORBES ASIA APRIL 2019

Herbert Wertheim

















































































































APRIL 2019 FORBES ASIA | 71

FORBES LIFE




1950s, for example, Wertheim
was practicing “invest in what
you know,” the strategy popu-
larized by the famous Fideli-
ty Magellan fund manager Peter
Lynch in his 1989 book One Up
on Wall Street. Instead of con-
centrating on the metrics in fi-
nancial statements, Wertheim
is devoted to reading patents.
Thanks to his engineering back-
ground, the technical nature of
optometry and his experience
as an inventor, the patent library
is Wertheim’s comfort zone.
Stocks he invested in based on
their impressive patent portfoli-
os include IBM, 3M and Intel.
Like Warren Buffett, Wert-
heim believes firmly in dou-
bling down when his high con-
Dr. Herbie occasionally lectures
on engineering at Florida viction picks go against him. He
International University. says that if you put your faith in
a company’s intellectual prop-
erty, it doesn’t matter too much
The Vietnam War was under way, and plastics had be- if the market goes south for a bit. “If a stock continues to go
come the material of choice for eyeglasses and sunglasses. down, and you believe in it and did your research, then you
Demand for Wertheim’s tint grew, and he sold it in a royal- buy more,” says Wertheim. Dividends help cushion the pain
ty deal for $22,000. But because of contractual breaches, the of stocks that drift down or go sideways, he adds.
royalties never materialized. So in 1970 Wertheim decided to “My goal is to buy and almost never sell,” he says, parrot-
get more serious about his inventions and set up a new com- ing a Buffettism. “I let it appreciate as much as it can and use
pany, Brain Power Inc. He founded it as a technology con- the dividends to move forward.” In this way Wertheim seldom
sulting firm, but Wertheim soon returned to his habit of re- reinvests dividends but instead uses the cash flow from his
searching and tinkering, developing tints, dyes and other portfolio to either fund his lifestyle or make new investments.
technologies for eyewear. Wertheim points to Microsoft, a stock he has held since its
The numerous products Wertheim invented for lenses— IPO in 1986. “I knew a lot about computers and had been in-
some tints for aesthetics, others to help ease the symptoms volved in building them,” he says. BPI had been using Apple
of neurological disorders like epilepsy and still others to im- IIe’s, but after Microsoft released its Windows operating sys-
prove UV protection—BPI became one of the world’s larg- tem in 1985, Wertheim became convinced it would be a win-
est manufacturers of optical tints, selling to companies like ner. “Only Microsoft had an operating system that could
Bausch & Lomb, Zeiss and Polaroid. The company also began compete with Apple,” he recalls. The Microsoft shares he
making lab equipment, cleaners and accessories for opticians, bought during the IPO, which have been paying dividends
optometrists and ophthalmologists. since 2003, are now worth more than $160 million. His 1.25
Today BPI has more than 100 patents and copyrights in million shares of Apple, some purchased during its 1980 IPO
the area of optics, 49 employees and annual revenues of about and some when the stock was languishing at $10 in the 1990s,
$25 million. BPI never achieved hypergrowth, but it provid- are worth $195 million.
ed a steady net income amounting to some $10 million a year, Not all of the hundreds of stocks he has owned have fared
according to Wertheim, more than enough to feed his passion so well. He invested big in Blackberry. “I believed in the new
for investing and the good life. With BPI cash flowing into management and the recovery story,” says Wertheim, who
Wertheim’s brokerage account, he went to work buying stocks will generally sell if a position reverses on him by 25%.
and honing a strategy that can best be described as a mix of As with Buffett, Wertheim says finding companies with
Warren Buffett and Peter Lynch, with a touch of Jack Bogle, strong management has been key to his success. A great JAMEL TOPPIN FOR FORBES
given that he dislikes fees and primarily uses two discounters, example is Heico, a family-run aerospace and electron-
Fidelity and Schwab, to manage his massive portfolio. ics company based in Florida. Wertheim became friends
With Lear Jet (later known as Lear Siegler) in the late with Laurans “Larry” Mendelson during the 1970s. A CPA




72 | FORBES ASIA APRIL 2019

by training, Mendelson was a successful real estate investor ences, the Herbert & Nicole Wertheim Performing Arts Cen-
who had studied at Columbia Business School under David ter and the Wertheim Conservatory. He has given $50 million
Dodd, coauthor with Benjamin Graham of the seminal book to FIU and committed another $50 million to the Universi-
on value investing, Security Analysis. Inspired by the wave of ty of Florida. Last year he pledged $25 million to the Univer-
dealmakers getting rich from LBOs in the 1980s, the Mendel- sity of California, San Diego, to help create a school of pub-
sons were looking to find an undervalued, underperforming lic health. Beyond education, Wertheim says he’s given to
industrial company to take over. hundreds of domestic and foreign nonprofits, including the
After they settled on Heico, at the time a small airline Miami Zoo and the Vail, Colorado, public radio station.
parts maker, Wertheim used his aeronautical knowledge to At the FIU performing arts center bearing his name, he sug-
informally help the family analyze its business and went on to gests adding an outdoor amphitheatre. “He’s very inspirational
purchase shares of the company—a penny stock priced as low in the way he challenges people to think big and imagine what’s
as 33 cents. “At that time Heico was a disaster, but he came up possible,” says Cammy Abernathy, dean of the Herbert Wert-
and understood what we would do to make it a non-disaster,” heim College of Engineering at the University of Florida. Still,
says Mendelson, Chairman and CEO of Heico. one gets the sense that devoting time to his stock portfolio pro-
Heico was making narrow body jet engine combustors, vides as much joy for Wertheim as his philanthropies.
which the FAA mandated be replaced on a regular basis after He recently doubled down on British energy giant BP and
a plane caught fire on a runway in 1985. Under the Mendel- now owns over one million shares. But rather than dwell on
sons, Heico expanded its line of replacement parts, which its sagging, crude-dependent stock chart, he’s betting on its
undercut established manufacturers like United Technolo- hydrogen fuel cells and enjoying its 6% dividend yield while
gies’ Pratt & Whitney and GE. After Germany’s Lufthansa ac- he waits for the company to recover. “We’re going to move to
quired a minority stake in the company in 1997, airline man- a hydrogen economy,” he says.
ufacturers and Wall Street took notice, and its share price Contrarian Wertheim also likes the troubled stock of Gen-
rose sixfold to more than $2. eral Electric; he owns over 15 million shares and has been
As one of only a few FAA-approved airplane replacement picking up more. He says he is making a long term bet on
parts manufacturers, Heico’s orders steadily rose as demand GE’s intellectual property; the 126-year-old company has
for air travel increased. For the last 28 years, Heico’s sales more than 179,000 patents and growing. Wertheim is espe-
have compounded at a rate of 16% per year and its net profits cially jazzed about some patents that involve the 3-D printing
at 19%. Today, Heico trades around $90, and buy-and-hold of metal engine parts.
Herbie is its largest individual shareholder. “You can’t look at what their sales are. You can’t look at
As Wertheim enters his 80th year, Herbie time has become anything. What is the future?” he says emphatically, adding,
his chief preoccupation. Besides his $16 million oceanfront “They hit an all-time low yesterday, and I’m getting hurt. But
home in Coral Gables near Miami, Wertheim has a 36-hectare I feel very, very comfortable with GE because of their tech-
ranch near Vail, Colorado, a spectacular four-story home over- nology.” And Wertheim isn’t in any rush. Playing the long
looking the Thames in London and two game is what he does best. F
sprawling estates in southern California.
He spends many winters with his wife COMPOUNDING: THE MOST POWERFUL FORCE
and family vacationing aboard World
Wertheim’s returns are miraculous. But merely adding $200 per month to an initial $10,000
Yacht, the planet’s largest luxurious resi-
in the stock market over the past 61 years would have produced an $11 million portfolio.
dential ship.
A signee of Bill Gates and Warren $12 MIL
Buffett’s Giving Pledge, Wertheim has $11 MIL
committed to giving away at least half
$10 MIL
his wealth, and he intends the bulk of
$9 MIL
the donations to go to public educa-
$8 MIL
tion. “I would not have achieved the
$7 MIL
education and opportunities that I have
$6 MIL
had without the help of our public uni-
versity education system,” he wrote $5 MIL
when he signed the pledge. $4 MIL
Stroll around Florida International $3 MIL
University’s main campus, and you can’t $2 MIL
help but notice buildings emblazoned $1 MIL
with his name: the Herbert Wertheim $10,000
College of Medicine, the Nicole Wert- 0 10 20 30 40 50 60
heim College of Nursing & Health Sci- SOURCE: INVESTOR.GOV YEARS




APRIL 2019 FORBES ASIA | 73

THOUGHTS ON

Cashing In







“BEING GOOD
IN BUSINESS
IS THE MOST
“Got me a $300 FASCINATING
pair of socks. Got a
fur sink. An electric KIND OF ART.”
dog polisher. A —ANDY WARHOL
gasoline-powered “I don’t know
turtleneck sweater. what it is, but
I’ve got a kind
And of course of feel for the “There are few
I bought some big money.” things in this world
dumb stuff, too.” —JOHN more reassuring

—STEVE MARTIN DOS PASSOS
than an unhappy
“There is nothing man will not “The man who does lottery winner.”
attempt when great enterprises hold more than he is paid —TONY PARSONS
out the promise of great rewards.” for will soon be paid for
—TITUS LIVIUS more than he does.”

—NAPOLEON HILL
“MONEY, IT TURNED
OUT, WAS EXACTLY LIKE “Yeah, I smell like
SEX—YOU THOUGHT OF the vault, I used to
NOTHING ELSE IF YOU sell dope. I did play
DIDN’T HAVE IT, AND the block, now I play
THOUGHT OF OTHER on boats.”
THINGS IF YOU DID.”
—50 CENT
—JAMES BALDWIN


“HARD WORK SHOULD BE “IT IS THE JOB OF THE
REWARDED BY GOOD FOOD.” MARKET TO TURN THE

BASE MATERIAL OF OUR
—KEN FOLLETT
EMOTIONS INTO GOLD.”
—ANDREI CODRESCU
“Professionalism
is important.

Professionalism
means that you
get paid.” FINAL

THOUGHT NBCU/GETTY IMAGES; BETTMANN/GETTY IMAGES; LIFE PICTURE COLLECTION/GETTY IMAGES; WALTER DARAN/GETTY IMAGES; ARCHIVE PL/ALAMY; STEVE PARSONS/PA IMAGES/GETTY IMAGES; WIREIMAGE-GETTY IMAGES; TOM STODDART/GETTY IMAGES; AF ARCHIVE/ALAMY; EDWARD KOLLER
—ERICA JONG
“If you want to
“THERE ARE FEW enjoy the second

WAYS IN WHICH half of your life,
A MAN CAN BE “HE WILL MAKE YOUR keep your nose
MORE INNOCENTLY RIGHTEOUS REWARD to the grindstone
EMPLOYED THAN IN SHINE LIKE THE DAWN, in the first half

YOUR VINDICATION LIKE
GETTING MONEY.” THE NOONDAY SUN.” of your life.”

“IT’S ALL ABOUT BUCKS, KID. —SAMUEL JOHNSON —PSALM 37:6 —B.C. FORBES
THE REST IS CONVERSATION.” SOURCES: NOBODY KNOWS MY NAME, BY JAMES BALDWIN; THE PILLARS OF THE EARTH,
BY KEN FOLLETT; THE LIFE OF SAMUEL JOHNSON, BY JAMES BOSWELL; THE BIG MONEY,
—GORDON GEKKO, WALL STREET BY JOHN DOS PASSOS; THE HISTORY OF ROME, BOOK IV, BY TITUS LIVIUS;
ZOMBIFICATION: STORIES FROM NATIONAL PUBLIC RADIO, BY ANDREI CODRESCU.



74 | FORBES ASIA APRIL 2019

FORBES GLOBAL CEO CONFERENCE


TRANSCENDING THE TURBULENCE






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