But Kingtel would never have climbed to such heights without the in valuable financial boost and technical coaching it received from the ROC government through the China Youth Career Development Association (under the auspices of the Youth Business Start-Up Assistance and Guidance Program, National Youth Commission).
Wu expresses unbounded gratitude for the governments help, but is quick to point out that the assistance was no handout. Wu considers himself a man of strong principles, and he did not approach the Association expecting something for nothing.
"I am not like a small boy who tries unsuccessfully to fish at the local pond day after day, then decides to beg for part of another fisherman s catch, n he says. Someday, that friendly fisherman might disappear, and the boy will face starvation and humiliation. I'd rather learn how to fish properly myself than depend on charity for the rest of my life."
Today, Wu proudly points out the ways in which his company has paid back its debt to society, and his success story eloquently testifies to the positive role government business assistance programs can play in bringing about national prosperity.
The crowning achievement of Kingtel Telecommunications Corporation thus far has been its production and marketing of advanced push-button telephones. The locally-famous Kingtel phones are found throughout Taiwan and now enjoy sales worldwide. Richard Wu recalls that he first encountered the push-button telephone before he entered business in early 1977, while paging through a catalogue of Japanese electronic products. The new devices looked promising. On Taiwan, only government-leased dial phones were used at the time, so he wondered how best to arouse local interest in the new product.
"I was at a loss to figure out how I would market the phones," Wu says. "They were time-saving devices, and stylish. But I had no idea on how to target such a product. Then, one day I noticed a secretary in an office using a pen to dial the telephone instead of her finger. I asked her why she did it, and she answered that she was trying to avoid breaking her fingernails. That was my first clue! Push-button phones offered a special appeal to young, fashionable women."
But Wu began building a foundation for success long before he drew inspiration from the fingernail-conscious secretary. Born in 1954 to a poor family of eight, he studied with fanatical energy in order to pass the qualifying examinations for college. He eventually entered the National Taipei Institute of Technology as an electronics engineering major. During those years he matched his intellectual drive with an intense national pride that was to motivate him later in helping his country to prosper as well as himself.
In 1977, after graduation and military service, Wu became a shareholder in a small business specializing in telecommunications. He already had ideas about the push-button phone market, and put his notions into action. The product took off from the outset, but Wu had to deal with ten other partners, and they all had ideas on management radically different from his own. Because financial limitations had forced him into the situation in the first place, Wu could do little but watch as the other shareholders made what he viewed as major business mistakes. He became increasingly frustrated as he saw them appoint less-than qualified family members or friends to company posts, and witnessed innumerable cases of conflict of interest. Within three years, the company was in serious trouble.
Even though the telephone market was wide-open and expanding, the young firm was floundering as too many people tried to be key decision-makers and operated according to their own immediate self-interests. Even though the company had not yet plunged into bankruptcy, Wu decided to sell out his shares in 1980. It was a depressing but necessary decision, but at least he had learned a valuable lesson: never again would he involve himself in a business over which he had no personal control.
One other fact sweetened the situation. Wu still had personal connections with the buyers of push-button telephones. The demand was there; it just needed a supplier. Wu gathered together all his resources to establish another firm as quickly as possible, borrowing from family and friends to obtain start-up capital. But he was still short of adequate financing.
"It was then that I discovered what the government could do for me," Wu says. "One day, as I glanced through the newspaper, I came across an article that described the Youth Business Start-Up Assistance and Guidance Program. It was a government-sponsored program that supplied start-up capital for new entrepreneurs. I had never heard of this possibility before, and it looked like exactly what I needed."
Wu submitted his business plans along with a loan request to the Youth Career Guidance Association (an organizational arm of the program), using the names of his wife and sister as guarantors. In early 1981, even before the money was in hand, he established Kingtel. Orders were already flowing in rapidly when Wu received his low-interest loan of NT$2.1 million (US$52,500). "Without that initial financial boost, Kingtel wouldn't have survived," he says.
Although the influence of the Association cannot be easily measured, Wu claims that a close examination of its benefits, such as the generation of new jobs and expanded wealth, more than justifies its existence. "Of course business endeavors sometimes fail even after receiving help from the Association," Wu adds. "But the purpose of the program is not to guarantee you will achieve your goal, it simply gives you a chance to succeed. The Association is something like a free medical clinic that you never notice until you need it."
Just two years after receiving his loan, Wu won an award from the Association for his accomplishments, a rare accomplishment for a businessman only 29 years old. Ironically, it was announced at about the same time his former company went bankrupt.
When advising young entrepreneurs in the contemporary marketplace, Wu emphasizes the lesson he learned about obtaining sufficient capital from trust-worthy sources, and avoiding too many shareholders. "You shouldn't have to bargain away your principles to satisfy the personal interests of your partners," he says. "One way to find out ahead of time whether or not you'll have trouble is to determine if your potential partners share your management concepts. You need to be on guard against conflicts within your enterprise. My personal belief is that it's best to keep the number of shareholders as small as possible. Over half of the bankruptcies on Taiwan result from conflicts between partners."
Because start-up capital is often the biggest hurdle for young businessmen, Wu tells ambitious entrepreneurs to find out about the many channels of financial assistance open to them, so they can avoid his own initial mistake. His advice always includes references to the National Youth Commission and the Association.
The ROC's Youth Career Development Association has few parallels in the world, a fact Wu discovered for himself during one of the many trips abroad the Association sponsors for members to acquaint them with the international market. "Some young business representatives from various countries approached me while I was overseas to ask how I started my telephone business," Wu recounts. "When I told them about my loan from the Association, they stared back at me open-mouthed. Not one of them had ever heard of such an organization before. I was shocked to learn later that my comments became big news in their home country newspapers."
Wu believes all societies can benefit from a similar governmental organization, and because Taiwan can serve as a model, it should strive to implement even better programs. Some change is probably necessary. During its early years, the Youth Start-up Program focused on encouraging youths to establish their own businesses, but recently the trend has been to boost and streamline enterprises that are already operating.
"It's far more difficult to start a company today than it was a few years back," Wu points out. "Small and medium-sized firms are slowly being taken over by larger enterprises and corporations." Still, he says the picture remains encouraging for the small entrepreneur because fields such as service industries and those utilizing specialized technology continue to offer plenty of opportunities.
Wu's dedication to helping beginners in business has earned him a recent honor that carries considerable responsibility—he has just been elected chairman of the Youth Career Development Association. He and his staff face a host of new challenges in Taiwan's rapidly changing society, including the appreciation of the NT dollar, public demands for better labor laws, and an increasingly fluid private sector. Of more immediate urgency, Wu must reflect on the Executive Yuan's recent decision to dissolve the National Youth Commission and incorporate it into the Ministry of Education. His face darkens at the prospect, since over the years he has seen for him self how effectively the Association has operated as an independent unit.
Despite the decision, Wu is still working on plans to expand the Association, and proudly points to construction under way on a new exhibition center in central Taiwan, and another in the south. He also calls attention to the recent establishment of a new research center that will provide businessmen with up-to-date market information.
The unique strength of the Association thus far has come from its concentration on the welfare of young business people. Should the organization be incorporated into other government bodies, Wu and many others are concerned that the same quality of services be maintained. As Wu says, "It's better to learn how to fish than to beg for a fish."
Businessmen Helping Each Other
The China Youth Career Development Association was founded in 1972 as part of the National Youth Commission (NYC). Its birth was prompted by a group of young people who earlier that year had approached the NYC for loans. They were idealistic, and felt they could go a step beyond personal profit by contributing to the economic growth of the nation. Rather than regard one another with hostility, as potential business competitors, they wanted to unite and assist each other in the climb to success by exchanging knowledge and experience. They hoped their own experience would serve as a model for future entrepreneurs.
The NYC responded by setting up the Association along the lines of a mutual-assistance club. Membership since then has climbed to more than 4,000. The businesses represented include a range of fields encompassing everything from chemical industries to handicrafts.
Although most youths approach the Association for low-interest loans, they soon discover it has other things to offer as well, such as lectures on career opportunities and seminars on modern management techniques and international trade. The Association, which emphasizes continuing education as a means of improving the quality of Taiwan's companies, provides an extensive range of books and periodicals to keep members up-to-date on latest business developments. One special program currently underway provides counseling on modern management techniques, and especially how to deal with personnel problems. Like other programs sponsored by the Association, its goal is to upgrade business operations.
Continuing success in trade depends increasingly on the ability to guarantee high-quality merchandise. The Association has played no small role in helping maintain high standards among the nation's private businesses, and it continues to emphasize the importance of this orientation to Taiwan's business community.