Silkspan is Thailand’s first online financial-services superstore, so it’s perhaps appropriate that its founder, Butrrat Charoonsmith, uses computer terminology when he says he has spent the past nine years developing an “operating system” (OS) for his company that will last.
It has been a task that has delighted as well as tired him.
“There has never been a single day when I have woken up feeling like I don’t want to go to work,” he said. It wasn’t like that before Silkspan. Butrrat did not really enjoy working as an investment banker, a career he pursued for four years with Phatra Securities and Merrill Lynch in Hong Kong, before shifting to the entrepreneurial path in 2000.
The OS that Butrrat is determined to create for Silkspan is not a computer operating system, but a unique business-operating system that drives a cutting-edge company, and gives it all of its capabilities. He cited 7-Eleven convenience stores as a case in point. Although many competitors around the world have tried hard to replicate 7-Eleven’s success, none has ever achieved it. This is because 7-Eleven’s success does not come from its beautiful logo or its shining lights, but rather from the ‘software’ behind its operations, he said.
Butrrat told The Nation that Silkspan had continually developed its back-office software and systems, tailoring them to meet business requirements that might not be visible to the eyes, but which offered operational efficiency, ease of use and convenience for its customers, among other things. For example, Silkspan has become the first company in Thailand to provide online, real-time motor-insurance quotations, online credit applications within five minutes, and call-back 24 hours a day, seven days a week.
Butrrat, 40, said he had not yet recouped investments in Silkspan made over the past nine years because he had kept pouring additional money into the company to enhance its OS, because he was totally confident of its long-term success.
“If I had not invested that much, [I] would have recouped the investments [by now],” he said.
The growth of online businesses in Thailand over the past decade has also been much slower than expected, restraining Silkspan’s performance. Nevertheless, Butrrat has no doubt that online businesses will “take off” in Thailand sooner or later, due to lower costs of broadband Internet access, cheaper computers, the expected arrival of 3G mobile networks, and other factors.
Importantly, the fact that Silkspan has encountered no lasting competitors has proved that the business is not an easy one to replicate.
“From another point of view, it has proved that what I have been doing is difficult, because after nine years, the company has no [lasting] competitor,” he said.
Butrrat said he also had a monthly meeting with “the banks”. “Banks simply can’t do that for everybody,” he pointed out.
Although he admitted he was tired, Butrrat said he had maintained a sole focus on Silkspan and had no plans for any other business or to enter politics. He had a strong belief in the future of his business and thought it was yielding social benefits to the community.
Earlier this year, Butrrat married former Chat Thai MP Janista Lewchalermwong in a “wedding of the year” that attracted a crowd of well-known guests and politicians.
Butrrat said his online financial superstore offered an efficient distribution channel and represented a “win-win” solution for everyone. The financial institutions involved saved on their advertising and sales budgets while consumers were able to compare products from various sources. The Silkspan website now offers credit and debit cards, personal loans, motor insurance, mortgages and other financial products from more than 20 finance and insurance companies.
Silkspan’s revenue from insurance premiums has grown sixfold over the past four years, from Bt25 million in 2005 to Bt150 million at present. There are a few insurance brokerage firms with premium incomes in the billions of baht, but second-tier brokerage insurers – including Silkspan – all have premium incomes of between Bt100 million and Bt200 million. Silkspan is the only online broker, he said.
About 15,000 people apply for motor insurance through Silkspan every year, and the firm has nearly 200,000 customers for credit products. One-third of these are credit-card clients.
Overall, Silkspan has grown by more than 30 per cent annually over the past few years. Its staff has tripled from 50 about four years ago to 150 at present.
Butrrat said he looked forward to the day when Silkspan was well known as a traditional financial institution.