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Big Money

Whether you want to spend the money, improve the world with it or just roll around in it, it's time you learn to build your billion-dollar business.
May 1, 2001
URL: http://www.entrepreneur.com/article/39794

When you write that first memo on letterhead featuring the name of the brainchild you've created to change commerce as we know it, you're ecstatic. Still, you cross your fingers and hope you can pay rent as you make Year Two sales projections of $4.5 million. Ever-hungry for inspiration and guidance, you spend your downtime in the business section of the local bookstore but notice that the books about making your first million have been replaced by tales of the latest crop of billion-dollar ventures. Deep contemplation begins: "Do companies even make their first million anymore, or do they just start at five?" You start thinking about $1 billion. Lining up the 10 digits in your head, you can't help wondering whether you'll ever get there and how famous companies like Ernst & Young, Intel and Levi Strauss & Co. managed to do it and stay there.

Don't be too painfully jealous about the success of megabrands like Levi's, a company that's been around since 1853 and didn't hit its first billion until 1975. But do ooh and aah over much younger companies, like Walnut, California's ViewSonic Corp., founded as Keypoint Technology Corp. by James Chu in 1987. At that time, the company was a computer peripherals distributor specializing in keyboards and monitors and was enjoying first-year sales of $4 million. That's enough to put a grin on your face, but nothing like watching that number soar to about $1.4 billion in 2000. Evolving into a visual technology company in 1990, ViewSonic is now poised for another upswing in sales, despite the fact that the computer industry as a whole has seen better days.

With years of sales experience in his native Taiwan and a post as president of a Taiwanese keyboard manufacturer under his belt (all before founding ViewSonic), Chu, 44, knows it's not just a remarkable product that makes a billion dollars. It's also not the wizardry of one individual; nor is it millions in advertising dollars. It's certain tried-and-true survival tactics Chu has employed that have not only kept ViewSonic afloat and thriving, but kept his team smiling as well. The rules can be applied to virtually any company, so if you're aiming to someday appear on a list that starts with "Hot," "Fastest-Growing" or "Best," we suggest you pay attention.

Play the Role of Coach

Chu carries the titles of chair and CEO, but that doesn't mean he's constantly out of the office wining and dining big clients and on the road hitting up VCs. In fact, Chu's public relations principal made it a point to mention how ever-present Chu is around the building. But even if you do walk the halls regularly, when you employ more than 700 people, as ViewSonic does, you're probably kidding yourself if you think you'll know the entire crew.

In the company's early days, Chu wanted ViewSonic to retain the feeling of a close-knit family; he wanted to be able to rattle off the names of anyone who passed him in the halls. But he admits the era of seeing everyone face-to-face and personally interacting with each employee has passed. "When a company has hundreds of people, it becomes difficult. So the way I do things has dramatically changed," says Chu. "Where two years ago I was working on every detail, today I make sure we're setting good goals for the company and that I set a very clear definition of that for every executive. The key is to delegate, so the management does a better job than me, and hope that my spirit--to be a success--is communicated through [the entire] management level."

After years of having to wear every hat in his business, from product manager to purchasing manager, Chu is now content playing the role of coach and empowering his employees to do things themselves. "When I create something and its directions are clear, I have no problem giving routine jobs to someone else," he says. "I'd rather position myself to create and discover new things."

Apart from implementing his technological vision, Chu also wants the folks in the higher ranks of ViewSonic to maintain the comfortable environment he's created. "The company we want is down-to-earth," he explains. "We don't want a fancy way of doing things. When things get complicated, the company tends to do more internal work and listens to the customer less."

Manage Your Employees Well

Unless your employees are happy, good luck. Especially if you're a technology company or your staff is on the small side, your employees likely spend a huge chunk of their lives working for the good of your brand. If they don't feel they're being well-compensated or that they're making a difference, expect a high turnover rate.

Maintaining a spirited team is something Chu feels is imperative to not only getting a business to Point B(illion), but taking it further. To remind his employees of their importance, he calls them employee-partners. That doesn't just insinuate they enjoy generous employee benefits and services, including profit-sharing and a broad-based stock option plan (which they do). According to Chu, "They feel like [ViewSonic] is their own company, and that's the reason they put their hearts into it. If you only have a 'job' and you're not that happy, you can't contribute more [than is required]."

Chu admits that when a company hits the billion-dollar mark, the overall tone of the workplace changes. It not only becomes more frenzied and exhilarating, but it also requires more manpower to keep up with the numbers. When new management is added, the "treat employees like family members" culture can be jeopardized if you let it. "It's a whole different environment. Everybody's thinking [that much harder], and everybody approaches things a little differently," he says, "but employee partnership is the spirit we want to continue pushing. If we want to become a $10 billion company in the future, the goal won't happen for the long term without good employee partnership."

"To err is human." Get used to it

Chu feels that if his employee-partners aren't making mistakes, then, frankly, they're probably either not working hard enough or not taking creative risks. He and his management team encourage outside-the-box thinking and don't reprimand employees for the odd, unintentional mistake, because a lesson of how to do things better is always born of it. "You must be doing and trying, but make sure your mistakes are affordable mistakes--more like tuition," says Chu.

While learning from your own trial and error can be beneficial, also look to your industry peers as possible "what not to do" examples. "Learn from how competitors make mistakes," says Chu. "It's like making a mistake but not spending money [on it]."

Trust Your Instincts and Imagination

Chu knows his customers. He knows ViewSonic devotees like to talk about the brand. He knows it firsthand because he's made a habit of going into tech-talk chat rooms to find out. Reading international reviews of ViewSonic products and going through all the e-mail from customers also helps him figure out what the future will demand. It's not a game of create, get feedback and revise. It's about knowing what consumers want before they can possibly imagine it and making the highest-quality version of it.

By staying abreast of technology innovations in general, Chu has managed to find a place for ViewSonic and identify each opportunity the company could use to solidify its reputation and extend its reach. ViewSonic's edge lies in its focus: visual technology.

"We're focused on what we do best," says Chu. "Everything we do is for the display, [as opposed to several of] our competitors, many of whom are much larger companies selling everything from microwaves and computer devices to satellites." The problem with such broad product offerings, he says, is that they result in a more bureaucratic way of doing business and, in the end, slow down the company's response time in meeting the needs of the market.

Not the case at ViewSonic. "From when they wake up until they fall asleep, all 700 employees are thinking about what our customer wants, and they know very well what product to offer," says Chu. "That's a big advantage."

Nothing could be more advantageous, however, than being a visual technology company as we enter into a time when "one chip" computers will be the norm (you'll watch the size of your standard CPU shrink, but you're still going to need something to view the data on) and digital TV will be a must. At press time, ViewSonic was developing its version of the universal monitor, which, with a resolution three to four times higher than that of current TVs, makes Internet surfing in the living room more tolerable. It's also perfect for high-definition TV content, which Chu acknowledges might not be in great demand this year, but will be in full swing as we approach 2005--the FCC deadline for everyone to switch from analog to digital. "Our dream for the future," says Chu, "is to offer from 1-inch to 300-inch visual technology products."

Reach for the Stars

Between enjoying a boost in sales of its bestselling LCD monitor as market prices drop, reaping profits from its projectors and plasma displays, introducing ViewPad (a 10.4-inch wireless device featuring high bandwidth and a touch panel) and entering the digital TV market, Chu doesn't see any signs of his company slowing down.

Perhaps it's because he had to adapt from doing business in Taiwan to a completely foreign culture and mindset, but Chu doesn't mind allowing himself and his employee-partners room to learn. And he doesn't fear leading ViewSonic into uncharted territories. Whether it's that or pure ambition--or a little bit of both--Chu knows exactly what he wants: "To become the best company to work for and the best company to do business with." He knows if he can keep his team concentrated on being the absolute best, View-Sonic will keep its present customers for life.

We asked Chu whether any one blunder in ViewSonic's history was substantial enough to change the way he does business. He laughed. "There have been too many," he says. "In the IT industry, it's an open door. Almost every day you have new surprises and new issues. The basic principle [we promote] is for every-body to move on."


Additional reporting by Megan Reilly