Swimming with Asian Sharks - Business Secrets from the Pacific Rim

The Donald Trump of Asia

First, a little bit of background. Essentially, Mr. Princeton is a very unique entrepreneur who started entrepreneurship when he was a first-year college student, selling plastic gloves.  Even from the start, he had charity in mind. For every shipping container he would sell, he would donate a container to Africa.  Mr. Princeton’s philanthropy didn’t stop there, he takes time out of his busy schedule to attend or host charity-related events.  He was the one who introduced to me Hope International, and the GoodLab.

He was born in Hong Kong where, though he was exceptional at sports, he didn’t like the academic side of school. As luck would have it, his whole family decided to move to Canada.  He attended a little high school in Niagara Falls. He will often use this fact to connect with fellow Canadians. He lived in Canada for five years and told me that he would go to the Eaton Centre, a famous mall in Toronto, to watch movies, because there were no movie theatres in Niagara. While attending university as a Christian college, he was at one point a manager for an entire shopping mall.

Mr. Princeton’s father had made his fortune in the electronics manufacturing business. Mr. Princeton would come back and help once in awhile. Things were going well for a while, until in 1995 there was a crisis in the company. A major customer decided it no longer wanted to buy from Mr. Princeton’s father's company.  This customer represented a significant portion of the business, and by leaving would leave the factory in financial ruins.  Mr. Princeton demonstrated his business skill by personally meeting with this company, tried every tactic he knew, even begged and pleaded with the customer.  He was ultimately able to convince them to stay on.  With this major success under his belt, Mr. Princeton managed to wrest executive control of the company out of the grasp of relatives and took complete control over this 400-person factory.

Following the methodologies from the book Maverick, he completely changed the structure of the company.  This included firing many family members, allowing staff to set their own wages, measuring all metrics, and adding technology.  These changes and his ability to hustle helped him grow the company from 400 people to over 4,000.

Mr. Princeton would go on to sell the company at its peak and then started a small venture fund.  Mr. Princeton would create partnerships with people he felt were capable.  He provides all the funding and all the necessary connections to move the company forward, but in return he would have 70% of the new company formed by the partnership.  The person with the 30% would be responsible for taking care of the day-to-day operations of the business and would manage or drive it in Mr. Princeton’s absence.

At the peak of the venture fund, Mr. Princeton had up to 21 partnerships going, each with its own managers, in various fields from small electronics to clothing to cosmetics to 3D printing and so on.  In 2000, with the dotcom bubble, Mr. Princeton had managed to survive, but if he had sold some of the technology ventures earlier he would have made many fortunes.  The remaining companies continued to go forward until 2008.  Due to the structure of his partnerships, Mr. Princeton told me that the other partners became unmotivated, and started to let things slip.  At the peak of the financial crisis many major slips happened at the same time.  The partners in various divisions had let quality slide and Mr. Princeton was left on the hook for several millions of dollars.  One thing lead to another and Mr. Princeton had to declare bankruptcy.

Mr. Princeton had decided to declare bankruptcy, instead of coughing up the funds. This was extremely dangerous, because in Hong Kong the banks and moneylenders hire the Triads to come collect.  You and your family stand a good chance of getting seriously injured or even killed when you decide not to pay. Mr. Princeton’s mentor, Mr. RealEstate ended up calling off the Triads that were after Mr. Princeton and his family, and even gave Mr. Princeton a job.

For the next two years he would work for Mr. RealEstate, managing his company. Mr. RealEstate was also extremely wealthy. Mr. RealEstate had almost 56 properties in Hong Kong and China, but also due to the financial crisis and being overleveraged, he also lost most of his wealth.

In Hong Kong if you declare bankruptcy there is only a three-year grace period during which you are unable to open a bank account or apply for any credit cards.  This is much shorter than in many countries, such as Canada where the time period is seven years.  Not having a bank account or a credit card in is a real pain.

Mr. Princeton told me he was humbled by this experience, but it made him stronger and much wiser.  Mr. Princeton, like my other mentor Mr. PrintMan, both survived bankruptcy.  Both of them showed me that if you are down, it doesn’t mean you are finished.  Your mental attitude can get you back on your feet in no time.