In 1990 the couple saw the handwriting on the wall and used their remaining savings to stock half the video store with personal computers. The decision to go into this new field was Phan's. They named the business Alpha Systems Lab.
"I was cautious," Hwang admits, "but a wife is supposed to support her husband." Before long Phan left his job to concentrate on developing Transformer, an add-on board that enhanced processing power of existing computers at a fraction of the cost of buying new ones. A year later ASL had sold $1.2 million worth of products.
"We didn't expect to grow as quickly as we did," Hwang marvels, "but somehow it worked."
Hwang took on the sales and administrative duties to free Phan to concentrate on creating new products. The couple worked tirelessly to cold-call major distributors. The first year was difficult.
"We kept thinking that someone out there would recognize the value of our product," Hwang says. "And that's how it happened."
ASL's first big break came in the form of a subcontract from Electronic Data Systems (EDS), a multibillion-dollar computer services firm founded by Ross Perot. EDS had won a $700 million federal government contract and passed down a small part of it to ASL. EDS may have suspected ASL was small, but had no idea just how very tiny it was. ASL was little more than Phan developing new products and Hwang doing just about everything else.
"I had my ear to the phone," she recalls, "one hand feeding the baby, and the other hand scribbling notes."
"In the beginning, we didn't even have the resources to hire an attorney to go over the contracts," recalls Mitchell Phan, ASL's chief engineer and vice president. "My wife had to do it. Their first impression was, 'Who's this little girl?' But when they opened dialogue, that attitude quickly went away. She went through each contract line-by-line, word-by-word. She has good business and marketing sense. I think it's a gift."
For ASL the EDS contract was huge, a bit too huge. Hwang couldn't convince banks to give them production financing. Desperate, she somehow persuaded EDS to forego the usual net 30 terms and pay C.O.D.
"I had nothing to hide from these big guys," Hwang says. "I said, 'I'm small, you see that I'm small. But I have a good product. If you help me, I'll help you.' I wasn't going to be phony and say 'I can do anything.' We were a small company but we had something valuable that could help their business.
"I've had many instances where I felt these big tall American men were looking at me as this little woman," Hwang continues, "but I had nothing to fear because I'm an honest person, trying to do an honest business. And I'm confident that good people will see good.
"When we got the government contract, we had to decide whether to focus on doing our best on that one contract or not do our best on a lot of contracts," says Hwang. "We focused on that one contract because we had faith in our product."
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ASL's sales mushroomed in 1993 to $38 million, most of it from the EDS subcontract. That gave ASL the much-needed capital for growth. ASL's reliance on one big customer also led to a crisis in 1994 when the government contract dropped to a fraction of its 1993 size. Fortunately, that's when Phan completed work on the MegaMotion circuitboard. That ensured a firmer foundation for ASL's continued growth.
Growth forced Hwang to learn skills for which she had little need a scant year earlier.
"At first, I couldn't delegate," she recalls, "because I was used to doing everything myself. But I learned quickly to let go, because I had to let go. I'm good at that. Once I've convinced myself it's the right thing to do, I do it."
Practically overnight the company grew to 60 employees. That growth presented Hwang with a whole new set of challenges.
"It's hard trying to manage a large company," she says. Where once she could concentrate on figuring out how to accomplish the many tasks that fell entirely on her shoulders, she was now faced with trying to optimize the varied human resources ASL's growth made available.
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