22 February 1999

Hosts: Cheeptham Kumvisate, Supaluk Wantanakin

Guest: Pitinon (Ron) Poonsaengsathit

Ron: Yes.

Cheeptham: Before we start, it is our custom…

Supaluk: That’s correct. It’s our custom to let our guest introduce himself.

Cheeptham: K. Pitinon, where did you study?

Ron: I would like to first excuse myself if I speak a little slow or if my Thai is not so clear. I was born and raised in California but have been in Thailand now for 7 years. I graduated with a bachelors degree in Information and Computer Science from the University of California in Irvine. I came to Thailand 7 years ago to help my grandfather in the family business. I saw it was a good chance to get to know more about Thailand and the Thai culture. During the time that I worked in the family business, I still kept up to date in the information technology field and knew that one day I would start my own company doing what I do best.

Cheeptham: So how did you start Cyberimage? Tell us about what type of business Cyberimage is involved in.

Ron: Cyberimage is a digital media design firm. Digital media includes Internet websites, CD-ROMs, multimedia presentations, sales kits and touch-screen kiosks.

Cheeptham: OK listeners, listen carefully. K. Pitinon has the ability to develop Internet websitess for international clients, some of which has reach US$10 million in yearly revenues. In a moment, he’ll tell us how he did it. But now, tell us who are your clients in Thailand?

Ron: Our clients in Thailand include the Siam Cement Group, Thaioil, Tai Ping Carpets, UFC (United Foods), Hitachi and Sansiri. The list goes on but these are the ones that everyone should recognize by name.

Supaluk: People know that Cyberimage develops websites that are effective and attractive. What type of advertising or promotions have you done?

Ron: Actually this is our 4th year in business but only the 1st year that we have a team handling marketing and sales. I believe that good work sells itself. Good websites can be used as references and examples for other clients. At the beginning, we just let our portfolio sell itself.

Cheeptham: Now lets discuss about the market outside Thailand. K. Pitinon, you said that the method of calculating the price of a website project in the U.S. is different than the fixed price per page method used in the industry in Thailand. Is that correct? How do website design companies in the U.S. calculate the price of a project?

Ron: website design companies in the U.S. as well as other industries in Thailand such as advertising, printing and video production do not calculate a project based on a fixed quantity. Actually if you think about it, it wouldn’t be fair for both the design company and the client. Let me give an example outside website design so listeners can get a better idea what I’m talking about. Suppose a person would like to have their house decorated by an interior designer. The designer can’t quote a fixed price for the project before discussing with the client what their preferences are. Would carpet or hardwood be used to cover the floor? What grade of material would be used for the curtains? The designer would have to look into the details of the project before a price can be quoted. website projects are similar to interior design. Every website requirement is different. A website designer would have to look at the scope of work for the entire project before he or she can quote a price. What is the purpose of the website project? Public relations? Customer support? Product catalog? Electronic commerce? What is the target group for the website? What type of information will be on the website? All these questions and more have to be answered before a price can be quoted.

Cheeptham: This concept is indeed very different than the method of quoting a fixed price of 1,000 to 2,000 Baht per page that Thai website designers are using. K. Supaluk, is that how it is done in Thailand?

Supaluk: Yes, Thai website designers usually quote a fix price and fix what is to be included on a page. For example: 2 pictures , 500 words of text, etc.

Ron: We don’t agree that this method is fair for the client. I’ll give you another example. A person would like to have a suit tailored. If a tailor advertises a fixed price of, lets say, 2,000 Baht, in front of his store, he has already decided what type of material and style he will offer his customers for that price. The material would usually be of inferior quality and the style would be one that is simple to cut. This is usually the same with website design work of a fixed price. We don’t believe that this is right. We choose to design a project based on a client’s needs.

Cheeptham: But everyone in Thailand is doing business this way, even the ISPs.

Ron: I’ll give you my opinion on why this is the case here in Thailand. Since Thai ISPs opened the Internet to the public in 1995, companies seem to sprout out from nowhere offering website design services. Computer people with HTML programming backgrounds started most of these companies. In the computer industry, everything is measured in fixed quantities – a fixed price for 64 megabytes and 233 megahertz and so on. These people probably don’t have any experience in the advertising field, developing creative projects like print advertisements or TV commercials. They don’t understand that quality creative work cannot be packaged. How does an advertising agency quote a price for a 1 page print ad or 30 second TV commercial? They have to come up with a concept first and then see what the scope of the production requires.

Cheeptham: Now tell us how companies in the U.S. approach a website project. What is your sales process like in the U.S.?

Ron: First, they would present themselves to the client. They would describe the details of the services they provide and show samples of their past work. The next step involves listening to the client. They usually would have some idea of the type of website they are looking for. They might give examples of sites that they like and dislike.

Cheeptham: So they don’t have to explain the benefits of the Internet to them.

Ron: The Internet is so integrated into everyone’s life in the U.S. Everyone already knows the benefits of the Internet in general and what it can do for their companies.

Cheeptham: How does Cyberimage do it? How do you discuss details with the client?

Ron: Just like I mentioned. We would introduce our company and show our portfolio. The client would then tell us what they need and ask us if we can do it and if so, how we would achieve it. They would tell us the image they want to portray on-line and we would comment on how we would help them do that. Usually we do not discuss our fees until later. Clients in the U.S. would choose a design company based on their capabilities first and then talk about the price. It would be a waste of time to discuss the fees first if the client does not like our concept or our work.

Cheeptham: For the listeners that just joined us, we are talking to Khun Pitinon of Cyberimage who has had great success designing and developing websites for Thai companies as well as international companies. Khun Pitinon, you told us before the show that Cyberimage developed a website for a company in the U.S. that is now making $10 million per year in sales from the Internet. Can you tell us more about this? What is the company?

Ron: The company is Components Direct.

Cheeptham: What is their URL?

Ron: Their URL is www.componentsdiect.com.

Cheeptham: OK listeners, go and take a look. This is the work of Khun Pitinon and Cyberimage.

Ron: Components Direct started with 3 people. They wanted to sell computer peripherals such as hard disk drives and RAM through the Internet. We sat and discussed how this was going to be done. At that time, which was 3 years ago, there were already a lot of computer vendors. How were we going to promote the website? How were we going to attract people to buy products from Components Direct? We decided that the 2 things we were going to concentrate on was price and service. Components Direct wanted to be a price leader. They made it a point to beat any price a caller has seen advertised. They also handled every call with a lot of attention. They would help suggest products with the right specifications for the caller.

Cheeptham: Can visitors purchase products through the Internet or do they have to call in?

Ron: According to the plan, the first phase would allow for telephone orders only. We had planned to later upgrade the system to handle on-line credit card processing. However, at this time Components Direct is still taking orders only by telephone. There are several reasons for this. First, since sales are doing so well, upgrading the ordering system isn’t that high on the priority list. Second, no matter how good an electronic ordering system is, it cannot beat the service that a real person can offer. The staff are very good at assisting telephone customers with product selection, setup, and after sales support. And the last thing, the telephone calls are toll free so it is already convenient for customers.

Cheeptham: When you develop a website for a client, can you guarantee that would be successful?

Ron: I don’t think anyone can guarantee success. Our service is divided into 2 parts. The first part involves the design and development of the website. The next part involves promoting and servicing the website. There are many steps to a good promotion and publicity campaign. For Components Direct, we advertise the products on the American On-Line (AOL) service and on websites that offer information on PC hardware. These sites are actually virtual communities of people sharing their ideas and knowledge about computer products. Products or vendors receiving favorable reviews will definitely benefit from the increased sales from the followers of the websites. Components Direct bartered hard disk drives and RAM for banners on these website. Within no time, sales went through the roof!

Cheeptham: Where did you get the figure of US$10 million in sales per year that you quoted? Did the client tell you so? How can you prove this?

Ron: I can’t prove this. The truth is with the client. You will have to look at their financial statements for proof, which probably isn’t possible. However, I don’t see any reason for our client to lie to us. If sales weren’t so good, why are they still with us for 3 years? They would gain more bargaining power with us if they gave us lower revenue figures, so why would they lie? Also the US$ 10 million in sales is for the third year in business. They sold US$3.6 million in the first year and US$6 million in the second year. They didn’t just reach this figure right away.

Cheeptham: You are listening to IT 100.5. Today we are talking with Pitinon Poonsaengsathit, Managing Director of Cyberimage, a website design and development company with clients in Thailand as well as the U.S. Please tell us about the Cyberimage branch in the U.S. Where is it located?

Ron: Cyberimage International is located in California.

Cheeptham: How was Cyberimage International started? How does it operate? In the same way as Cyberimage in Thailand?

Ron: I return to the U.S. twice a year to visit my family. I usually bring my notebook computer with me to work while on vacation. I had the opportunity to show a few people the work we do at Cyberimage in Thailand. They were impressed and a lot said that they would like to hire us. Because our philosophy requires us to work very closely with our clients, we felt that the only way to serve U.S. clients was to open a branch of Cyberimage there. Today, Cyberimage International is responsible for marketing, sales, and client service in the U.S. All the design and development work, however, takes place in Thailand.

Cheeptham: What type of clients does Cyberimage International look for?

Ron: We target small to medium size companies, also known as SMEs. With SMEs, we are usually able to talk directly with the owners or decision makers of the companies. Large companies are too difficult and time consuming to penetrate.

Cheeptham: How do you charge for your service in the U.S.? What are your fees like?

Ron: Like I mentioned earlier, we charge according to the scope of work for the project. Once we have an idea of the scope of work, we would then assign the resources and the man power for the project.

Cheeptham: Can you give us a figure?

Ron: Our service fee in the U.S. right now ranges from US$20,000 to US$80,000.

Cheeptham: Now what about here in Thailand? Lets say you were contracted to develop an on-line book store. How much would you charge?

Ron: Roughly 200,000 to 400,000 Baht.

Cheeptham: How many years would it take to return on the investment?

Ron: I can’t answer that because I don’t know. The success of an on-line store depends on many factors. The products themselves, the presentation of the products, the services offered by the vendor, the methods of the promotion, all these things have an effect on how the store will do. Not all if is under the control of the designer.

Cheeptham: We have all heard so much about Internet commerce – how you can reach customers worldwide, how it is changing the way people shop, and so on. Until now, I still haven’t seen a website in Thailand that has done well in electronic commerce.

Ron: Like I mentioned, there are many factors that come into play that makes an e-commerce website successful. Just being able to conduct credit card transactions on-line doesn’t cut it. You have to select the right products to sell on the Internet. I believe that the products have to be something that people already know, something that they can assure the quality of. Some examples are books, music CDs and name brand computer equipment. You have to also make the entire shopping experience attractive – the way the store is organized, the functions and services available, the promotions. You have to create a virtual community within the store. Two stores selling the same exact products don’t necessary fair the same on-line or off-line. Just because Amazon.com can sell books doesn’t mean that anyone selling books on the Internet will be successful. Amazon.com is not just a store but a community for book lovers. You can check out the list of best-selling books, read reviews of books, etc.

Cheeptham: Yes, but even Amazon.com is not making a profit. Isn’t that right? Amazon.com, the most well known Internet store, cannot even make a profit. Does that mean all this talk about e-commerce is just hype?

Ron: I don’t think so. Amazon.com is a special case. They are looking at the big picture down the line. Right now they are not concentrating on immediate returns. They are trying to capture market share. This is sort of like Microsoft and Netscape giving their browsers away for free. They are fighting for market share. Amazon.com wants to be the largest Internet store. This doesn’t come easily or cheaply. Before the name Amazon.com became a household word, before everyone, including you and I, came to know that they sell books, they had to invest a lot in advertising and promotions.

Cheeptham: OK we are now going to open up the phone lines for those of you listeners that have questions or comments for Khun Pitinon. Khun Supaluk is now ready to receive your phone calls. Call 245-7086, 245-7087 and 245-9789. Lets continue to talk about companies in the U.S. Is there any company in this industry that stands out that you like or look up to?

Ron: I like companies that come up with fresh new ideas. There are many ways to make money on the Internet and people don’t cease to amaze me with yet more ways everyday. In the beginning there were Internet directories and search engines like Yahoo. They offered a free service that everyone can use and made their money by selling advertising banners. Then others thought up new services to attract Internet users to their website so they too can sell advertising banners. Hotmail offers free email. Ebay offers on-line auctioning. The more popular the site becomes, the more they can charge for advertising on it.

Cheeptham: Do you ever think of doing this type of business yourself?

Ron: Like I said, there are so many ways to do business on the Internet. We can’t do everything. Cyberimage chooses to concentrate on what we do best, which is designing and developing websites for clients.

Cheeptham: OK. Let’s now go to our first caller – Hello.

Caller 1: Hello. There are a lot of commercial software for developing websites such as Microsoft FrontPage. How does one make the right choice? Can you tell us some of your experience with website editors? Can you suggest one?

Ron: At Cyberimage, we reply very little on HTML editors. We use editors to assist in certain tasks sometimes but our programmers still have to have a solid background in pure HTML coding. The different editors available on the market all have strong and weak points. We feel that there isn’t any one software solution at this time that can take the place of real HTML programming experience. Relying solely on HTML editors would only hinder our design process.

Cheeptham: OK. Lets go to the next caller.

Caller 2: Hello. I would like to know how back office of e-commerce companies work. Once an order is made who gets what information?

Ron: In an efficient e-commerce system, once an order is made, the various information goes to many places. The credit card information goes to a payment processor and then to the bank. The payment processor then notifies the vendor whether the order is approved or not. Once the order is approved, sales information goes into the accounting system and order details goes to shipping. The point of electronic commerce is to let the system do most of the work.

Caller 2: How can I contact you if I have any other questions?

Ron: You can visit our website at http://www.cyber-image.com, email me at ron@cyber-image.com, or call us at 714-3000.

Caller 2: Thank you.

Cheeptham: Let’s go to the next line – Hello.

Caller 3: Hello. I would like to know what system you use for developing dynamic websites?

Ron: At Cyberimage, we use the Microsoft NT platform as a base for our dynamic websites. We use ASP, or active server pages, to access an ODBC database such as MS SQL or Access.

Caller 3: If you use active server pages, and the client wants to change to an Informix or Oracle database, can it be done?

Ron: No problem. Since active server pages works with ODBC, any ODBC compliant database such as Informix or Oracle would be compatible.

Caller 3: Another question. There are a lot of website designers in Thailand. Who do you feel are your competitors?

Ron: I don’t see other website designers in Thailand as competitors. I see them more as business partners. The more quality designers we have in our industry, the better the market becomes. The public would be more aware of the Internet and its benefits. I feel that the market is large enough that all companies that produce quality work can co-exist.

Cheeptham: OK. We are running out of time. Khun Pitinon, do you have anything to recommend to companies that would like to make the step on-line?

Ron: First, get a general idea what you want to achieve from your website. Next, set aside a budget for the project and invite several design companies to come in. Brief everyone on your needs and budget and let them submit their proposal. You can then select the company that can give you the most for your set budget.

Cheeptham: Thank you for joining us tonight.

Ron: Thank you.