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Mr Eugene Chang Director Of Pacific Fusion International Pte Ltd

Interviewer
Name: Ms Ng Chee Shen (Huang Zixuan)
Interviewee
Name: Mr Eugene Chang
Company Address 34 Jalan Naga Sari, S(288864)
Email eugene@pacific-fusion.com
Date of Interview 7 Jan2003, 8.00pm - 9.30pm

Speaking like a savvy businessman, it is hard to imagine that Mr Eugene Chang only began to learn the ropes 3 years ago.

After graduating from the esteemed Boston University and clinching a job with Hewlett Packard, he could have basked in his safe haven but he chose to take the road less travelled.

When he was working on an overseas assignment, a colleague in HP San Jose introduced him to a Smoothie bar. It was love at first "slurp" and all he could think of was to bring this healthy and delicious beverage back to Singapore.

He found himself very good partners in Linda Painan and Robin Koh. After extensive online research, first-hand experimentation, trips to the US and much serious consideration, the trio decided to pull the plug on the corporate world and was all set to purchase the US franchise from an Arizona-based company.

Just when they were about to count their blessings for the smooth progress, they received news that the other party could not honour their agreement to sell their franchise as it was going to be taken over by its competitor.

Eugene thought all their efforts had gone down the drain but he was determined to not let this happen. The trio turned the set back into a business opportunity and negotiated a deal to purchase the rights to the proven operations systems, transferring the technology to Singapore. Within just 9 months of incubation, they launched their own smoothie franchise in Singapore, and ambitions to introduce this trendy new healthy gastronomical experience to Asia coming to reality with their first international Fuzion Smoothie Café due to open in Beijing this March and outlets in the Gulf Cooperative Council of Arabic States (GCC) scheduled for Q2. PFI also has 10 Fuzion Smoothie Xpress cabinets in petrol marts, 2 kiosks in convenience stores and 2 co-branded Fuzion NuSmoothie bars in nutrition stores locally to date.

After overcoming their first hurdle, Eugene devoted himself wholeheartedly to his pet project. His commitment to his business was so great that there was once he got into a car accident because he fell asleep on the wheel out of sheer exhaustion. Now, he proudly declares that he and his partners are the pioneers and their company is at the leading edge of the industry. Smiling customers always make his day.

Eugene's courage for starting his business in a poor economic climate in recent years, is remarkable. His ability to push his company to scale greater heights is a laudable achievement. The company is largely recognized as a leader in the industry with strategic partnerships with ExxonMobil, Cheers (NTUC group) and OSIM International believing in the young F&B upstart stand as a strong testimony. Their company also enjoys the support of IE Singapore (formally TDB) and Spring Singapore (formally PSB).

Over these three years, Eugene had so many people to prove his worth to, including his family and most importantly of all, himself. Eugene's father paid for his overseas education and was very upset when his son first proposed the idea of setting up his own business. His father's initial disapproval gave way to ultimate support and now, his dad is his "biggest fan".

Dynamic, amicable, eloquent and inspiring, it is no wonder that Eugene is the soul of the company.

He gave entrepreneurship a shot, and it is a beautiful one.

Interview With Mr Eugene Chang

For starters, can you tell us more about yourself? For eg. your family and educational background.
My name is Eugene. I'll be 30 this May. I started off life pretty small, as a premature baby, born to a family of 4, including an older sister I love to irritate. I spent most of my time, education wise, in several different schools - St. Andrew Primary up to P4, Anglo Chinese School P5 to Sec 3, and from then Year 11 and 12 at Scarsdale High, New York. After that, I went to Boston University for my tertiary education, a four year course in Bachelor of Arts (Computer Science). I then returned to fulfill my National Service commitments. I was posted back to the School of Artillery as an Instructor after graduation from OCS. More schools!

What dreams/ambitions/aspirations did you have when you were young?
When I was younger, actually I didn't know what I wanted to do. I led a pretty carefree existence. When I started my studies in Scarsdale High, I found that I had inclinations towards subjects in the science field. My uncle, who was my guardian while I was in High School, is actually a researcher at Rockefeller and somehow subliminally I started to do better in Chemistry. I went to college and I actually applied to be Chemistry major. However, after my first year, I found out that I was not Chem major material. The advanced course I took was very rigorous, just copying answers to problem sets took me 4 hours, and this is excluding lecture times and laboratory work! I was devastated and remember calling my mom long-distance to tell her I couldn't do it. It was a very sad day for me to disappoint my parents 9200 miles away. I never really had much experience with computers but made the leap to a degree in computer science instead. I think it is strange, it seemed like God closed all the other doors and this was the only option available to me at that time. And I loved it. So you could say I was guided into IT quite by accident rather than by design.

Actually this parallels your switch from IT to doing your own business…
The IT switch was different. Going from IT to business was a choice I had made because I felt that it was something I needed to do. It was like something off the beaten path had caught my eye and I just had to wander off to investigate.

vAfter my graduation, my dream job was to get into an MNC, so I applied to Hewlett Packard. I got in and I stayed with them for the first few years of my working career, it was fun doing the corporate thing.

Did you actually imagine yourself setting up your own business?
No way.

So your dream all the while was to actually…
To be a geek.

I wanted to be a technical consultant or Solutions architect, to work with a firm like Andersen Consulting with a broad portfolio of clients across sectors. I mean I loved doing technical work, but also craved to have more interaction with people at the process or business level. So I didn't want a job that stayed purely programming.

So actually what made you decide to make the switch? Like from being an employee to an employer? Like to become a boss of your own.
In general, it wasn't planned. I started to do what I could where I was. When I made team lead, I was presented with a lot of opportunities to travel and during that time I was very happy really doing what I feel is my first love. And what basically happened was that I was working very hard and seeing no returns. At that time the economy was starting to slow nearing the end of my stint there and starting to see corporate cutbacks. I was working to like till 2 a.m. everyday to get my projects going and I would come back in to work at about 10 plus in the morning, including Saturdays.

Once on an overseas stint in San Jose, a colleague brought me to a smoothie shop. I fell in love with it. I said to myself that this was something that I wanted to bring back to Singapore. It'd be perfect in our weather! The idea got stuck in my mind. I couldn't get it out of my head. I thought about it and made my plans out on paper napkins whenever I had a spare moment. This was only the beginning. Great ideas, if ever, only come once in a lifetime, and I had to do something about mine. I never aspired to be my own boss but I did want to see this idea to completion.

Can you give me a brief description of your business and how you and your co-founders started it from scratch?
In general what I did was to do research on the net to find out the potential of this business. I also went to visit some of the major players there. I came together with some friends and talked about whether we could start something like that. I bought as many books as I could on smoothies to read up and off and on, in my spare time, I would just blend some smoothies at home to test out the different techniques the different authors presented. You can imagine my parent's reaction, wondering what their son was up to in the kitchen, forcing them to down my mad scientist experiments. I even worked part time at a coffee chain to find out what life would be like as a retailer, without letting my parents know. My partners and I eventually returned to the US to shop for a franchise but ended up acquiring the technology.

What is your schedule like in a typical day?
My day starts at 10 am. I go through my emails and have a quick coord. meeting with my guys if possible. My day is interspersed with meetings, working out design and marketing issues and a good deal of project management. Occasionally there is the networking or business dinner commitment so the day can stretch quite long. In business, networking is very important; you will always need people's help, it is impossible to do it alone.

How was the local market response, take up rate? Were you encouraged/discouraged by it?
We emphasize health and convenience, which are two major global consumer trends. The take up rate has been good but the going has been all up hill. Part of the reason is that we have to spend a lot of resource to educate the local customers on the product category and not just differentiating ourselves from the competitors in the industry. In the US, people already know what a smoothie is as it had been around since 1960s. So as pioneers and leaders in this market, we participate heavily in road shows like the Singapore Food Festival and conduct smoothie workshops to get the product into the hands of the people. We put in a lot of marketing effort and a lot of R&D for long-term growth spreading our base. Needing to build a market encouraged us to find multiple ways to expand our business; if you just rely on one way, you will not succeed.

And can you give me in detail what are some of the (major) sacrifices you have made due to this decision?
Time with your family and loved ones, time with yourself (your personal time) are eaten up. Financial consideration, losing the security you have as a professional. For my partners and I, we are very much on the ground, we love and believe in the concept so much so we don't take a big salary. We just take what we think it is enough and plough the rest back to our company and to our people. That is the commitment you must have if you are in it for the long haul. There are no sleeping partners here, everyone puts in 110%.

How did your family and friends react to your decision?
Well the fact is that I am now a drink stall seller! My dad was not very happy initially, particularly since he had sent me for an overseas education to earn my professional certification. I asked him for financial support to invest in this company because I could not possibly do it on my own. I can tell he struggled with the idea of me going into business.

My father was very anxious for me. My mum was, on the other hand, surprisingly supportive. She told my dad that if this was something that I wanted to do, to just let me go ahead and live my dreams. The good thing is that, after getting over the initial shock, my dad is now my biggest fan. He would regularly bring his friends down for lunch at the cafe. He would also come down on his own to try everything on the menu including giving his feedback on new items. If I have new store openings, he would travel halfway round the island to be there. I never expected him to do that but that was he has been doing for me. Amazing.

Tell me some stories that give me an idea of the hardships involved when you started a business from scratch. What are the problems that you encounter?
We had problems with staffing initially. I worked through my first Christmas when we started this business, personally manning one of our three shops because we were down on staff. We HAD manpower problems. Our team was very small and everyone was stretched. Working in the office during the day, then rushing to take over the 2nd shift from late afternoon to about 10pm. By the time we closed the store, cleaned up and went for dinner, it was about midnight. I'd hit the sack at 2am. The whole cycle would start all over the next morning. Hands raw from washing, body tired from standing behind the counter or running deliveries, the mind exhausted from tackling operational and concept problems. All this while trying concurrently to conduct interviews. Tensions rose, relationships at work and at home were tried. It was pretty tough. A real low point.

What are some of the things you had to overcome to succeed?
Its too broad a question to answer directly, but there were times that things were so tough that I did think about turning back, fearing for my future. But it is passion that drives you on, of achieving your vision. Also, watching the commitment of your staff under you; you don't want to let them down.

When did you actually feel like quitting?
When I was working to the point where I got a car accident because I fell asleep at the wheel from exhaustion. Working all day and all night. In the day, you are in the office clearing paperwork, in the afternoon you go to the store to do shift work because you don't have enough managers. Times like that are really tough, and adding to that an economic crisis working against you. Everything seemed to be falling apart. When you are trying your very best, but seem to be powerless at effecting any change, it can be overwhelming.

Can you describe your best day/encounter in business?
Closing a business deal is a very satisfying feeling. As is seeing your shop open in another country. As is having people excited about your product. The first day we opened, the queue was right to the middle of the square. We used to sit in a corner and observe whether customers finished their drink to see if the acceptance and satisfaction level was good. When we see little kids drinking our smoothies, we are always very happy because they are brutally honest about what they do or do not like. Those are the best days.

What about your worst day?
Working with difficult people. Relational issues can be very frustrating.

How do you and your company cope with the recession?
We communicate what we plan to do to our staff. We have to pull the team together, give them a vision and then lead them by sharing our plans to grow the business and to weather the storm.

Don't put all your eggs in one basket. We are working on multiple projects, although some can say that we are not very focused, these projects are all centered on the same core technology, the same system, just creative variations.

What we do is we look for multiple channels, multiple revenue streams to stay ahead. You have to look for different business opportunities and go for it. Get your team behind you. Make sacrifices together. The management cut their own pay first before the staff's pay. When we reinstated pay, we reinstated theirs first. When times are good, reward them, remember their commitment. We've given out bonuses in 2002 and even expanded our team, surviving and coming out stronger and a little more confident.

Who are your competitors in this market and what strategies do you adopt to make sure that you guys stand out?
Direct ones will include anyone in the lifestyle café business like Coffee Bean and Starbucks, not just smoothie or juice bars.

To strategize against them, we need to differentiate ourselves well in the minds of the consumer. We do a lot of R&D as well to stay on the cutting edge and to raise benchmarks in our industry. We find our own niche and we market ourselves as best we can. Our next step is to secure good, highly visible locations to make our products more accessible and to create more awareness. Also, we find that localization is very important. It allows you to give the customer exactly what they want, making you culturally relevant to the country you are operating in.

What qualities do you think it takes to succeed? What personal qualities you possess for you to succeed?
Tricky question. The topic of success is much debated upon. Success is a multi faceted definition for me. One definition is seeing the goals you set for yourself achieved. The second way I look at success is how far you have come, the obstacles that had to be overcome to get to where you are, even if one's goals were not fully achieved. The last way I define success is in what people think of you (or your creation). Recognition from other people is important because it tells you how good you are in other people's definition of success. And this is how you benchmark yourself.

In this context, I believe that you must have vision, so you can set goals for yourself and your company. Then, to overcome the obstacles in your way, you'll need passion to see you through the highs and lows of the business world. It helps also if you are stubborn and a jack of all trades because there are no defined job scopes when you run your own company.

Who is your role model? Who do you admire in business?
Never really thought of that. I am always amazed at people like Bill Gates and Michael Dell who achieved much at a very young age.

Is there anyone in particular that you would like to thank? Someone who kept you going in difficult times
My parents and my fiancée. I must also give thanks to God too, who does not give me more than I can bear.

What would you advise enterprising youngsters to do today in starting a business?
Passion and vision is something you must have. You should start young since you don't have many commitments and you should find very good partners to help you achieve more.

Other than official titles like "director", what roles do you play amongst the three co-founders?
I think I play different roles at different times. For the staff you try to play a leadership role or be an inspirer. Among us partners, there are times that each of us may feel low, so we try and push each other. We used to joke that Linda, the MD is the brain of our organization because she is very forward thinking; Robin is more the heart of our organization, he does the HR and accounting core functions. Sandra, as Operations Director is of course the brawn of our organization. I would like to think of myself as the soul of the company, working on being the internal 'glue' bridging management and staff, setting the editorial voice for all our external communications (Press Releases, Website, marketing and training materials) and filling in the gaps in any of the other aspects of the business from operations to R&D to IT to business development, if any.

As we try and pick the final 38 entrepreneurs from all the people we interview what qualities would you think a person should have to inspire others?
The person should have come a long way from where he first started. And he should be happy at doing what he is doing.

If part of the Spirit of Enterprise is a scholarship given in your name directed to any school you would like to give it to: any idea now where that would be? You don't have to decide now, but if some day you are asked - any ideas? Primary school, secondary, college, technical or university?
Not necessarily my alma mater. I would like to review the schools, which are eligible for this, and if I could, I would also like to select the student. I think it is more meaningful if it goes to a specific person whom I feel has a big potential and has a very good vision. I think we should let that person have the chance to work that dream.

Before we end, any other story you would like to tell me?
Quite an interesting one to do with our beginnings. Few know that we almost lost our deal to acquire the company in 1999. After all the research and a mission trip to the US, we eventually found a suitable franchise, and after we signed our part of the agreement, we received a phone call from the CEO saying that they could not sign the other half of the agreement because they were being acquired by a bigger smoothie company. I was shocked beyond words, as I had just tendered my resignation to embark on this project.

From my experimentation in the kitchen, I knew that commercializing home recipes and equipment for commercial use was extremely difficult and time consuming. We needed a franchise system to kick-start the company in Singapore. Linda saw an opportunity out of this set back. We decided that if we could just acquire the technology without the trademarks associated with the full franchise, we could still make it work… though not without increasing the complexity and risk of the project. So we went back and negotiated with them to buy the operation system, minus licensing and branding rights. And we won! Transferring the proven system back to Singapore, we spent the next 9 months fine tuning and customizing it in a way no master franchisor would have allowed. We had effectively changed our position from a licensed Master Franchisee to that of a Franchisor! The set back was an incredible experience. I thought it was the end, but it was really just the beginning. It taught me the invaluable lesson that opportunities can be found in every set back. And that was how we started Pacific Fusion International Pte Ltd in Jan 2000.

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