Lessons Learned from Visionary Tom Yuen

Successful visionary Tom Yuen gives sage advice to Mike Kai on entrepreneurism.

Philo T. Farnsworth, the inventor of television, spent many years of his life in battles to protect his rights to his discovery. In my research for this article, I had the opportunity to talk with my friend and mentor Tom Yuen, co-founder of AST Research and Chairman and CEO of SRS Labs. Tom provided his sage advice for future entrepreneurs. Originally written for Yale Entrepreneur Magazine, I'd like to share this with AsianConnections readers. - Mike Kai

At the age of fourteen, Philo T. Farnsworth invented the television while plowing his familys potato field in Idaho. In a spark of genius he envisioned the parallel crop lines in front of him as electrons sent horizontally through a vacuum, producing a picture at one end.

During the 1930s and 40s Farnsworth fought an epic intellectual property battle as lone inventor versus big corporation as he tried to protect the rights to his discovery and bring it to market. It was an emotional roller coaster for Farnsworth, which in the end left him an alcoholic in mental turmoil.

As a visionary of the twentieth century, Farnsworth took what others saw, and created something extraordinary. But in entrepreneurial terms, Farnsworth was unsuccessful.

While he eventually won his battle with RCA when the U.S. Patent Office awarded him the priority of the invention, he eventually lost the war to RCA, which reaped the benefits of being able to bring the television to market.

The success of RCA to put televisions into peoples homes often overshadowed the accomplishments of Farnsworth, since it was difficult for TV viewers to believe that such a complex technology could have been developed by just one individual.

The story of television, Farnsworth, and RCA provides insight into what it means to be an entrepreneur today. Like the great entrepreneurs of our time - Bill Gates, Sam Walton (Walmart), and Steve Jobs - Farnsworth had an undeniable passion and commitment to his venture.

But unlike his optimistic and resilient contemporaries who have experienced their own share of failures but still managed success, Farnsworth was the opposite, his protracted battle took most of his adult life and left him physically and mentally broken.

He was an entrepreneur in the sense that he conceived and produced the technology behind one of the greatest contributions of the twentieth century, but in the end, he lacked the whole package to fully execute his dreams.

Over spring break I had the opportunity to talk with my family friend and mentor, Tom Yuen, a visionary and successful entrepreneur many times over, a founder of the computer company, AST Research, and the current CEO of SRS Labs (Nasdaq: SRSL). I asked him for his thoughts on what it takes to turn an innovation into a successful business.

It is extremely difficult to create a profitable and sustainable business from new technology in the US without the backing and strategic alliances of major players today."

"When I started AST in 1980, we had a strong technological and market advantage, we had an edge in part because computers had just begun to be embraced as a necessary technology by the public. We had an advantage of timing, and American technology was ahead of most global competition. Today that is different.

Now the lone inventor, without strong financial backing, marketing and distribution with strategic players not only has to protect and maintain the rights to his product, but also faces competition in the global market. If his product is successful, competitors everywhere will quickly jump in with similar products.

Yuen says, Electronics companies overseas are especially hungry now that they are bigger and have capital to spend. They are looking for the next best thing, and wont hesitate to copy your technology and sell it for much less than you can - unless youre able to successfully defend your patents, or counter with products of lower profit margin.

With those sobering words, Yuen is still an optimist and a true believer of innovation and new technology.

But he says, often, it is not just the latest research, technology and patents alone that are the keys to entrepreneurial success, but the whole package - the players behind the product, the distribution, the marketing, the strategic alliances, that can make the difference between success and, yet another Philo T. Farnsworth story.

Michael Kai is the founder of AsianConnections.com, and a columnist for Yale Entrepreneur Magazine.