How did your childhood affect your perception of risk?
Growing up, danger was everywhere. And after I came to the United States, with most of the things I did, I still felt that way. So I think I'm not much of a risk taker. I am more of a risk mitigator. It's not like the strongest survive in a bad situation. It's the best prepared.
In the book you describe keeping a journal, which you wrote on the backs of flyers inscribed with Communist teachings. If the Red Guard had found it then that could have been the end for you. That strikes me as pretty risky.
Well my diary was my friend. It was my confidante. The page was like another person that I could talk to in this insane environment. You don't just get rid of a friend. That overcame my sense of risk. And also I was very young. I understood the danger but maybe I didn't fully understand it. And when I was young, death didn't scare me because life was so horrific. From time to time I would want to die. But I knew I couldn't because I had my little sister and I was responsible for her. But I wasn't fearful of death.
Your first book, published in China in 1994, was a rant against money-grubbing entrepreneurship. At that point you'd been living in this country for 10 years. Why did you still feel that way?
For the first 10 years here I was just like any poor immigrant. I was trying to learn about life in the United States, but it was life in the gutter. I'm scrubbing toilets, working in restaurants, trying to put myself and my sister through school. I am living and working with poor immigrants in Chinatown and from Mexico and African-Americans, all of whom have a very tough life. I had no idea about money: it was just what I needed to survive from day to day. And even though I was living in the United States, I was still under the brainwashing I experienced in China. Of course I eventually ended up at Bell Labs. But when I wrote that book I hadn't been living the middle-class life, American Dream very long.
I want to ask about a couple of sayings cited in your new book and how you've applied them in business. The first is "Who can say what is good or bad?"
"Who can say what is good or bad" is very much of a Buddhist concept. It's about accepting instead of judging. Long-term thinking instead of short-term thinking. A lot of times when you encounter something and only look at it from the perspective of the present, it is bad. But seen over the long-term it turns out to be good. So, for example, at one point in 2001 I signed a contract with a customer, Align Technologies, that if you just looked at it on its face you would say was a bad contract for us. But if I hadn't accepted those terms, Geomagic would have died. So it was a good decision to take a bad contract. I had to step back and look at the totality of the situation. And, of course, big success and big failure go hand in hand. It's usual that a big failure generates an idea for a big success.
The other saying I found interesting is "The number-one strategy is retreat."
I originally thought this was from the "Art of War," but I did some research and found it comes from the "Thirty-Six Stratagems," which is a collection of military and political strategies from ancient China. It is a very famous statement that everybody in China knows. It means the first strategy should not be confrontation. The goal is not to win but to get where you want to go. Another meaning is: when you are stuck, back off. I like William Ury's books about negotiation, and the way he puts it is "Go to the balcony." Because if you take one step back, then the sky is bigger and the ocean is wider.
"The goal is not to win but to get where you want to go."
Geomagic got sued by two big international companies that claimed we had violated non-disclosure agreements while in discussions with them. Everybody said fight it. My corporate attorney said fight. My board said fight. But we didn't have money for a lawsuit, and if we lost then the company would die. So I had to put my ego aside even though I knew we didn't do anything wrong, really. If winning is losing then it's not about winning. I needed to retreat and get to where I wanted to be. That meant I had to get rid of this lawsuit. So at a meeting with these companies I asked them not to bring a lawyer into the room. And I started out by apologizing. I told them that if they continued with the lawsuit they would kill my company, and I was sure that was not their intention. So could we settle this? Ury says you have to understand the needs of the people you are negotiating with, and as we talked I realized they wanted some of our patents. Generally people would say, why did you hand them your patent just because they wanted it? That doesn't mean they deserve it. But the patents were not in my main market. And it's not about fairness. It's about achieving the desired result.
Thanks to advances in 3D printing and the maker movement custom manufacturing is no longer just a technology--it's a business model. How is Geomagic making the most of this new world?
I'm struggling with that. On the one hand, I am so thrilled and excited that people are catching up to something I have been talking about for the last 15 years. On the other hand, we were pioneers, so we had to work out all the kinks and difficulties ourselves and that was very hard and expensive. It's a very different business model now that things are becoming democratized, when many more people are doing it. So we have to figure out how to transform our business model for this new world without destroying our existing revenue stream. We don't have the luxury of a big company that can just set aside a team to work on that.
Specifically, what has to change?
We need to change from building software to building platforms. We need to change from serving very high-end companies to serving professionals--by which I mean craftsmen--and consumers. It's the same market. It just gets pushed down. We recently acquired a company called SensAble Technologies that allows us to move toward design software. So, for example, if a toy maker wanted to modify a Hot Wheels car from the past we can both create the digital image and also do the design on it. It provides a much broader product portfolio.
After all your success, you say you still feel like an outsider in the gonzo world of tech entrepreneurship. Have there been moments in which you feel truly at home?
There are many times I feel truly at home. When I was named Inc. Entrepreneur of the Year and spoke at your conference was one of them. To stand on a stage with Bill Clinton and Thomas Friedman…I flashed back to the last time I stood on a stage in front of a large group of strangers. I was a child in China. They forced us to publicly denounce ourselves and our families and hit us if we were not convincing. I had to say that I was nobody, that I did not deserve to live. The people watching me jeered and denounced me.
At the Inc. conference they gave me a standing ovation. That was a feeling of being home, that I had arrived.
