When Raymond Hung came to America from Hong Kong in 1968 to enter the University of Illinois, students here were rebelling against capitalism and dreaming of socialist utopias abroad. Hung had fled the Communist takeover of China with his parents at age 3. His dream was to start his own company. So he worked his way through school.
With his MBA in hand, Hung returned to Hong Kong and founded Applied Electronics Ltd., which became a multimillion-dollar original equipment manufacturer for most of the major electronics firms.
But Hung wanted to make his company a household name, so in 1991 he hitched it to the most formidable incentive system known to capitalism, net marketing. Hung's Quorum International Inc. now sells retail electronic products through a network of independent distributors who recruit additional distributors and collect commissions on their sales - and also on sales by distributors those people recruit and so on. Quorum's annual sales are already $250 million.
When did you decide to start a business?
My family left China after the revolution in 1949. Growing up poor in Hong Kong, my ambition was always to own a company.
How did America Prepare you for entrepreneurship?
For one thing, I worked 25 hours a week as an electronics salesman to pay for my education. I started Applied Electronics back in Hong Kong in 1976 with $50,000. We made hardware for Texas Instruments, Fisher-Price, Coleco, Mattel, Phillips, Commodore. We became a very successful company.
Why wasn't that good enough for you?
I always wanted to have our own brand name. About three years ago, we met some network marketing people in the U.K. who wanted electronic products to sell. They made a big order; after three months, they couldn't pay us. We had to write off $1.5 million; but we continued to look for partners in network marketing and started Quorum in 1991 to sell security products like car alarms and personal attack alarms. We're projecting $250 million in sales for 1993 and adding 1,000 distributors every day. They tell us we're number one in sales and distributor growth in network marketing history.
Have you used electronics...