Managing Growth in Turbulent Times
HONG KONG, May 11, 2010 - Vietnamese entrepreneur Ly Qui Trung was flying on a plane to New Zealand in 2003 when a chance remark by the Australian in the next seat inspired him to start Pho24, a chain of Vietnamese noodle shops which now has 70 outlets spread all over Asia.
In a panel discussion here as part of the Asia Society Hong Kong Center's Entrepreneurs Series, Trung recounted that conversation, and described how it gave him the push he needed to go into business for himself. "I said I was from Vietnam. He said he loved pho. It was a very short conversation but it stayed with me. When I got back I said to my family, Let's do pho. We all thought initially of doing fine dining, but this street food is very popular. It all came together seven years ago."
Sinking all his savings into his first shop, Trung needed just three months to recoup his investment, and within two years he had 15 shops open for business. After admittedly expanding too quickly, he brought in a venture capitalist. Still, Trung maintains proprietorship of the business, either as solely-owned or franchised outlets. The pioneer of franchising in his country, Trung has an ambitious expansion target—200 restaurants by 2013.
Elaine Young, the co-founder and CEO of Shama, has similarly grand plans. Started in 1996, Shama offered the first boutique-serviced apartments in Hong Kong, and now operates 14 properties in the city and on mainland China. With 1.7 billion Hong Kong dollars in assets under management, Young announced that the corporate objective was at least 40 properties across the region by 2013.
Despite Shama's success, however, Young has weathered her share of highs and lows. "We had a 600 million loan due at very beginning of 2009," she said. "Trying to get any bank to refinance us at the end of 2008—no one wanted to know. The difference for us (interest repayment) was 23 million dollars a year. That was straight off our bottom line. Everything does seem rosy in property but you really have to have holding power."
The difficulties were very different for an introspective artist-turned-businessman like Dickson Yewn, founder of Yewn and Life of Circle jewelry collections. "It has been tough. I have a fine art background. It is very tough for a guy like me because I don't have strong ideas on business and I learned along the way."
Yewn added, "Jewelry is not something you need. It's very competitive, especially for a local brand that needs to stand alongside the international brands."
Mass expansion is not on the cards for Yewn, however. "I'm keeping it small because contemporary Chinese luxury design is not yet mature enough for the world stage to accept."
So is entrepreneurship nurture or nature? According to Young—who displayed an entrepreneurial flair from an early age, running a tuck shop from her school desk at the age of seven and tripling her pocket money—it's the latter, cautioning that running a business wouldn't be a good idea "If you don't have the passion and naturally think about it all the time .... I love what I do."
Trung took a slightly different view, telling the audience, "I don't think you are born an entrepreneur. It depends on the environment. Once you become an entrepreneur, you become addicted. It's like having a foot massage—too much and you get addicted."
Yewn, who previously worked in film, advertising, and design, drew a laugh from the audience when he chimed in, "Being an entrepreneur was my only choice. All the other companies I worked for went bankrupt or closed down."
Reported by Penny Tang, Asia Society Hong Kong Center