"I know how to make money," he says, chuckling, "but so far I don't know how to spend money. I don't really need it. This money [would be] another big headache for me. How do you spend it? So profit is not an incentive to sell."
Chu's lifestyle is modest and disciplined. The music on his clock radio goes off at 7:00, allowing him to get out of bed at 7:15. A few minutes before 8 he leaves his Diamond Bar home to drop off his two children, aged 5 and 8, at a public school a short distance from ViewSonic's offices. He reaches the office about 8:30 and begins the day by reading. On top of the usual paperwork awaiting any CEO, Chu gets a lot of e-mail from all over the world. What is unusual for a successful CEO is the sheer volume of trade journals he reads every day, within 24 hours of the time they reach his desk. In an industry in which product lines become walking dead in a matter of weeks, Chu's market vigil is key to ViewSonic's health.
"I read magazines from Japan, from Taiwan, from the market research company. They send me a lot of stuff. I read all the magazines, the computer magazines. So I know the information better than even my marketing department. I know when Apple Computer releases a new product, I know everything. I read all the information." Whatever he can't finish at the office goes home with him.
By mid-morning the reading is replaced by meetings, most often with employees, usually in the conference room adjoining his office. Among them is a big weekly meeting with his vice presidents and a stream of meetings with the product development group. He regularly hashes out any quality problems with his quality analysts. There are sales forecast meetings, a joint sales and marketing meeting to review market share and new developments, and a meeting to discuss suppliers. Finally, once every week or two is a meeting to update the business plan.
Recently Chu has begun spending less time on finance though he still goes over numbers and supporting records once a week. "I need only 30 seconds, and I know what's going on," he says. "So that's a very light job." On the 15th of each month Chu reviews an ending statement for the prior month and the finance management reports required by the banks that issue credit lines. Arthur Anderson audits ViewSonic's financial statements despite the fact that as a privately held company it isn't legally required to be audited.
"The auditors coming in is insurance for me," he says. "At the end of the year, I know I'm doing right. A lot of people think business is so complicated, so difficult, and you need a lot of knowledge. I think the easiest way is if you can find an industry that's fast growing, if you watch that business, it's common sense. Continue to deal with the customer, continue [to stay] close to the market. It's not that difficult."
Chu stopped making sales calls in 1988, a year after opening Keypoint. He doesn't miss it.
"Sales for me is a lot of courage," he says, recalling his early struggles. "I could put on my mask again but now I like marketing more. Right now sales is quite difficult because business is so channeled--distributor to re-seller, to end user. So if you only talk to the distributor, they can give you only limited support. They're not promoting the product, not selling the product.
"My focus is more on how to treat our end-user. Our end-user is our customer. A distibutor is a customer, too, more like a special end-user. But our main focus is on the end-user. I cannot meet many users, except at trade shows. I'm the salesperson at the trade shows to explain to customers, including end-users. That's a very good place, face to face to understand what our customer wants. They give me a lot of pressure."
ViewSonic's current Walnut building houses 180 employees. Another 120 in Taiwan are engaged in Asian Pacific sales, marketing and manufacturing. The fast-growing French, German and British sales offices employ another 30 or so, bringing the total number of ViewSonic employees worldwide to about 330. That's small for a company that will likely enjoy $400 million or more in revenues this year.
Chu recently finished leasing a new 300,000 square-foot building for about $.33 a square foot. "You get good rates when you take a big space," he says, smiling. The big move is set for April.
Despite having raced from startup to quality leader in only 7 years, ViewSonic enjoys impressive gross profit margins of around 20%. Thanks to its downright austere operating structure, fully half of that ends up on the net-profit line. That's about $31 million for 1995. Half of that, Chu says matter of factly, goes to corporate and personal income taxes. That still leaves Chu, as 100% owner, a hefty net income. Given ViewSonic's fast growth, Chu likely keeps much of that in the company.
Chu's good fortune is shared with employees. ViewSonic's 401K plan matches every employee dollar invested. Under a profit-sharing plan, bonuses are paid all employees based on quaterly profits.
"Everybody sounds pretty happy," Chu says. "We have disability insurance, we have vision insurance, dental and health insurance. The company's pretty competitive."
A look around ViewSonic's offices shows about half its workforce is of Asian descent. Chu attributes this to the fact that in its early stages the company's hiring was done mainly through Chu's personal contacts.
"Another reason is the computer industry has a lot of Asians," Chu says, "And the company's growing very fast. Asian salespeople [can] communicate better."
Today Chu'spersonnel decisions are limited to hiring purchasing agents and filling top management positions. A high degree of independence is sought in management candidates. Chu has no time for centralized control.
"If you give more freedom you can more easily adapt to the market."
His employees' perception of him, Chu suspects, is inaccurate.
"Somebody commented that I'm a very serious person. If you're close to me, you know I'm not. But some employees feel I'm poker faced, so in that I need to improve."
[CONTINUED BELOW]
In late 1994 when Chu was interviewed for the Transpacific 100 Great Entrepreneurs feature [Dec/Jan 1994-5, p. 49, Chu was ranked 7th], he didn't have the free time to cultivate a hobby. Since then his progress in establishing a management structure has begun showing up in his personal life.
"Life has started to change," he says happily. "Office hours are shorter, so at least at night I'm with my family, you know, to watch TV. And weekends we maybe go shopping or to some kids' activity [which is a] very big part [of our weekends]. I'm very happy because I took my first vacation since I started in the computer industry." The Chus spent the week between Christmas and New Years'. Reading magazines is one of the activities Chu now names as a hobby, but it sounds suspiciously like work. In hopeful anticipation of more leisurely days to come, he has begun accompanying friends to golf courses so he can practice hitting golf balls.
"Right now I'm in the middle of the transition," he says. "There's a lot of activity going on in the company. Hopefully, starting in the second quarter, I'll have more free time. If I can have one or two hours for golf, maybe the company is much better off because maybe by then the VP's won't want me to stay in office.
"These are professionals," Chu continues. "They should do a better job than me in their areas. If they can do better than me, why should I stay in the office to interrupt them? It's better for my health. Also [it's] good for thinking. I can meet with more people, my vision can be more long term. Also other industries may have opportunities [for us to explore] to see what the future is."
In the early days Lilly Chu worked full time at ViewSonic. In 1994
she began phasing out to one day a week, then recently, to one day a
month. She still visits a few days a month and joins her husband for lunch.
Among the hundred or so cubicles outside Chu's office is one for Lily
"because she was important when we started," Chu explains with a touching
mix of loyalty and fond remembrance of his very first employee. "She'll
always have a cubicle here."
