Ping Fu's American Dream emerged from nightmare.

Raised in Shanghai by a loving aunt and uncle she believed to be her natural parents, Fu was 8 years old when the Cultural Revolution raged through China, decimating affluent, educated families like her own. Forcibly relocated to a dormitory in Nanjing, Fu survived for years in a single, squalid room, struggling to protect her younger sister and preserve some semblance of personal identity. Her stories are excruciating: beatings, gang rape, humiliation, starvation, incarceration, and endless self-denunciations meant to break her will and make her believe "I am nothing."

Expelled from China at 25 because of her research into forced abortions, Fu fetched up in Albuquerque with no money and no English. The next phase of her life is an immigrant epic that took her from menial labor to Bell Labs to the National Center for Superconducting Applications, where she supervised Marc Andreessen during development of the Mosaic browser. In 1997, Fu co-founded Geomagic, a company based in North Carolina's Research Triangle that makes software that captures "point cloud" images of 3D objects that allows them to be physically reproduced. (Most famously, the company scanned the Statue of Liberty in 2002.)

On the strength of her personal struggle and technological achievement, Inc. named Fu Entrepreneur of the Year in 2005. Fu's new memoir, "Bend, Not Break," (Portfolio/Penguin, January) is a full recounting of her harrowing, inspirational tale. Fu spoke recently with Inc. editor-at-large Leigh Buchanan.

Early experiences influence who you become in later life. Are you successful because of those horrific years in China, or in spite of them?

I hope that is not a reason behind my success, because nobody should live that kind of life. Nietzsche has a saying: "What doesn't break you makes you stronger." I think there's truth to that. But let me define "stronger" with a little more granularity. I would say my background has made me more tolerant with difficult situations. I don't give an extreme response when bad things happen. And in some ways it made me more optimistic.

Optimistic in what way?

Not in the sense that everything is good, but in the sense that I know things will work out, one way or the other. They always have in my life. For example, every successful company has had a near-death experience. In 2000 everybody told me that Geomagic was going to die. I remember being in line at an airport and I met someone from the area and he said, "Oh, Geomagic still exists?" But I never thought it would die. Maybe because I never died. I should have died many times, but I didn't. I always thought that somewhere around the corner was another road, and I would find it. It's just that right now there's a big mountain in front of me and I can't see it.

When you were hungry and hopeless in Nanjing, everything you loved stripped from you, how did you gird yourself psychologically to survive?

Partly, I think it's genetic. When I did Myers-Briggs I happen to be more a thinker than a feeler, which helped. Having a very loving family when I was young also gave me a good base. And I had my little sister. I had to survive to take care of her. She was my responsibility.

The other part I think is my uncle--my Shanghai papa--instilled in me some of his strength and values before things fell on my head. My Shanghai parents taught me to look at the lights in darkness, to look at beauty when there are things around you that are ugly, to show kindness when others are cruel to you. So I applied some of those principles when I had to be on my own in that horrible place.

Where did you find beauty in that situation?

After I was removed from my Shanghai parents and sent to Nanjing, the Red Guards brought me to a dormitory for people who had been relocated. They took me to Room 202, a filthy place with not even a bed in it. The second floor of the dormitory was dark, but at the end of the hallway there was one light. It still worked but the fixture was broken so it was hanging on the side, like a person tilting his head. And I remember staring at that light and thinking it was beautiful and making paintings with it in my imagination, while everything around me was so scary and chaotic and dark and bloody.

In China, you grew up believing lies force-fed you by the government and society. Even members of your family voiced the party line out of fear. Has that made you more distrustful or cynical?

Growing up in the Communist system I was very young, and of course I was brainwashed. To this day I can't get rid of it entirely. Some of the Communist concepts that I have held onto aren't bad--like you always do things for others. That's why I'm attracted to servant leadership. But I struggle with things, like the message that money is bad and things should be equal. I still feel uncomfortable if I think I have it better than others. Not necessarily money. If other people are working and I am on vacation, I feel uncomfortable even though I take very little vacation. 

Growing up in this country you choose what to believe. You believe what makes sense to you. So that becomes your anchor. Over there things did not make sense. Communist propaganda was trying to fill our heads and because there was not much schooling and no parents there was no one else to fill them. So my thoughts were just running around as though on vacant land. When I was old enough to reject the propaganda and do my own free thinking I became much more independent. Still, there are times when I talk to myself in my head and I don't know which voice is the right one. Because I grew up without that belief system to anchor me.

For years you were told that you were nobody, and you believed it. How did you grapple with that inculcated sense of inferiority as you became a leader? 

"When I started the company I didn't think of myself as a leader. I thought of myself more as a mother."

I have always been a leader, although I did not always recognize it. Because I led myself and my sister through a very hard time. I led my mother when she returned and lived with us in Room 202. She couldn't manage money, and so from a very young age I had to make all the decisions. I ensured that there would be tranquility and harmony among us, otherwise there would have been a lot of conflict. So maybe there is a bit of natural-born leader in me. But I have also had a lot of practice most children don't have.

When I started the company I didn't think of myself as a leader. I thought of myself more as a mother. The maternal instinct is strong in me.

How did growing up in Mao's China influence the way you think about power?

I certainly have an allergy to power. I think and behave more like an anarchist than like someone who can follow rules. I have to watch that a little bit. My natural tendency is to break everything and to question authority. At the same time I believe my leadership at first--it wasn't quite developed--had a little bit of dictatorship to it. Because that's all I knew. I made all the decisions, I gave all the directions. In the start-up phase it worked. Now I need to loosen that. I need to trust people, let other people do things, even if they do it different from me. I have to unlearn the psychological habits I grew up with.

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.