Cover Story: An unconventional outlook

This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on March 12, 2018 - March 18, 2018.
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When Ng Sang Beng was 26, he quit his full-time job at Altera Corp — the Silicon Valley-based pioneer of programmable logic solutions — to venture out on his own. He was fed up because his new manager discouraged creativity and only wanted him to follow procedures.

Ng, founder and CEO of ACE Market-listed Aemulus Holdings Bhd, was a bit of a wild child growing up. He did not do things for the sake of doing them. He hated useless bureaucracy and procedures if he saw no point to them.

When he started at Altera, he and a colleague were given the mind-numbing task of comparing two graphs visually. Despite being at a technology company, they couldn’t use software to compare the graphs because they had different bases.

After a week of comparing 250 graphs a day, Ng decided that enough was enough. He did some research and found that he could use something known as the LaGrange Polynomial algorithm to make the bases of the graphs comparable.

So, long story short, while his colleague continued to strain his eyes, Ng sat with his feet up on his desk, reading a newspaper. His American manager was delighted. “Wow, this is perfect,” he said, and promptly implemented Ng’s programme throughout the company.

But when the manager — who had been stationed in Penang for 2½ years — left, he was replaced by a Malaysian who was chary of any deviations from the norm. His philosophy was, “No funny business. Just do what you are supposed to do, the way you are supposed to do it.”

The free-and-easy atmosphere that encouraged creativity gave way to something so stifling that it was not long before Ng clashed with his new manager and walked out of his secure job. He would leave to start his own company.

After pounding the pavement for six months, turning up exactly nothing, he received a call from his brother. “He asked how business was and I said, ‘Not good. I am still alone. There are no customers, no products, nothing,’” says Ng.

His brother reacted predictably. “He said, ‘You know your wife is pregnant, right? When she gives birth, you are going to need money.’”

Ng was incensed. But he thought about it and asked his brother: “Let me ask you, at which point will my commitment be less? When my wife delivers? When the baby goes to kindergarten? When it goes to school? To university? When will my burden be the least if not now? So, I will just continue and be persistent about it.”

Ng finally received his first order to produce something he knew nothing about — a semi­conductor tester. So, he pulled a few friends into the project, read a few engineering textbooks and designed one from scratch. Not only did they design a tester from scratch, they designed the fastest one in the world at the lowest price. The company he had set up with his friends — Aemulus — would go from strength to strength.

But Ng would soon find out that when it comes to building wealth, being a whiz kid and a top-notch engineer was only a small part of the equation. He had to learn a totally different set of skills to build the company.

“Wealth is not the money itself. It is the knowledge you get. I know that sounds very general,” he pauses, trying to think of how to phrase it better.

“When I talk about knowledge, I am talking about knowing how to build a company, how to handle difficult people, how to face critical pressure and stay calm in the eye of a storm. So, it is really about the knowledge you pick up over time. And as you get better, it translates into money. This is just my way of looking at it.”

Ng realised pretty early on that he would not excel at the financial game, that is, making money from money. “When I started Aemulus, I thought of myself as being very technically competent because I was an engineer and a very good one. But that was only 20% of the game. There was still 80% I needed to learn. For instance, I did not know anything about sales and marketing or production or human resources or finance.”

So, Ng put his nose to the grindstone and started to learn about all these areas that were outside his comfort zone. “I started to learn about finance; how to actually look at cash-flow projections. Using Excel, I even created a claims submission form,” he says.

“When I set up the company, there was only one employee — me — and it was very easy. But you know what? We used the same form for almost 17 years until it was converted to a web-based system.”

Ng says the main quality one needs to build a company is resilience. “We have been through crises. We have run out of cash and needed to raise funds. There were times when we did not have enough cash to meet payroll and stuff like that.”

In these moments of truth, either you get through it or you don’t. “The only way to solve these problems is to have enough knowledge and learn how to manage them. If you do, the business survives and grows. And your wealth, in terms of money, grows in tandem,” says Ng.

Challenges are the only constant in the development of any company, he adds. The trick is not to lose your head and throw the baby out with the bathwater.

“I try not to be short term. Over the past 15 years, things have gone both up and down. But if you look at it, over time, there is still an upward progression. And that is what I want everyone to understand,” says Ng.

He says most people put the cart before the horse. They focus on the money without looking at what is needed to create it. “The money is a side-effect of knowledge. I call it a sub-product of a well-managed business.

“If you look at successful companies, both overseas and in Malaysia, every one of them has faced several crises. But they got through them and continued to grow.”

Ng does not consider actual money that big a deal. It may have something to do with his upbringing. His father was a teacher, but he was not tight-fisted.

“We were definitely not rich. Yet, he would still give his friends a treat even if he only had RM50 or RM100 in his pocket. Naturally, this created conflicts with my mum,” Ng laughs.

But what this taught him was not to hoard money, but to spend freely. “When I started working, I always had the feeling that money comes and goes. No matter how much you have, you can lose it and you can earn it back,” he says.

“So to me, it is not about the money. But over time, I came to see the value of it. And I learnt a secret, which may not be a secret to others, but it was new to me.

“It is that it would be difficult for me to go out and earn RM1 million on my own. But it would be easier if I had the right vehicle or platform. And that platform is my own company.”

That is why the partners felt that it was their priority to grow the company. “For many years, we struggled. When we made any money, it was reinvested in the company. We did not pay ourselves all that much. So, in terms of personal wealth, we could forget it,” says Ng.

But he also realised that if he were to amass a fortune, it would be through his business and not any other means. “It actually made me focus on the business and not on other things.”

There seemed to be many distractions around him. Ng saw his friends who were good at trading shares in the stock market make what he describes as “tons of money”. “And it looked so easy for them to make it happen,” he recalls.

Meanwhile, there were other friends who made their money buying and selling properties as their values appreciated. And even those who went into direct sales seemed to be making a killing while working maybe half as hard as he was.

“You know, people can make money so easily. At the beginning, we were constantly asking ourselves if we had made a mistake. After all, this was a technology company and we were suffering. We went through so much and we were still not doing as well as those who had made their money so easily. And you start to think: Am I doing the right thing or should I just go and do something else?” says Ng.

Fortunately, he had the ability to be brutally honest with himself. “I realised that those things were just not my cup of tea. I would not be good at them and I did not have the knowledge. So, if I wanted to grow my personal wealth, I would have to do so through my business. I would have to grow my knowledge at least and use it to manage the business.”

This realisation kept him steady when the winds of turmoil were rocking his company. “To be honest, there were many times, especially when the company went into a temporary downturn, that major shareholders came to me and asked me to sell it off,” says Ng.

During such times, it was easy to believe the prognosticators of doom when they said the company was going nowhere. The results seemed to bear them out.

“I can share with you that we actually had discussions about selling the company — many times. And all those times, the value of the company during negotiations was definitely much lower than what we are today,” says Ng.

When he really thought about it, he knew that selling the company was a bad idea. “If I sold it off for a certain sum of money, that would be it. I would have lost this platform and it would not be so easy to start a new one,” he says.

“And if I were going to start a new platform, why not stick to the one I already had? I only have to focus on one thing, which is increasing sales, rather than start another company and do everything from scratch.”

Ng decided that he would cut to the chase and do what he did before — analyse the situation (like he did with the graphs when he was with his previous company) and figure out a solution. “I knew if I could get through it, everything would be okay.”

He has no quarrel with those who go the financial route to make money off the markets or those who speculate on real estate. “That is probably the fastest way. Nothing wrong with that and many are already successful looking at nothing but the money. But that is not for me,” he says.

If gaining knowledge and wisdom is slower, at least it is surer. Even the thought of losing all his money tomorrow does not faze him. The knowledge will still be there and he is confident of rebuilding his fortune.

When it comes to building wealth, Ng’s philosophy is pretty straightforward. “There are three steps when it comes to growing your wealth. The first is, when you don’t have money, save money. Of course, there are people who say, ‘Oh, saving only gives you 3%.’ I am not interested in having a debate with them. Don’t think about how to invest. Just save,” he says.

The second step is what to do with your money after you have saved enough. “How to grow that money is a skill in itself,” says Ng.

In his case, he put his money into his own company. But others may decide to invest in property or play the stock market.

And the third step is, if after you have grown the company, you lose everything. “It is okay. Just go back and do step one,” says Ng.

If he sounds casual about this, he hastens to add that he is anything but. “Look, when you lose everything and you have cried enough and crumbled enough and been sad enough, you just have to go back to step one, right? Because that is the only way to start again.”

Having had an unconventional outlook on nearly everything, it is perhaps only natural that Ng would be unconventional in terms of what he believes about passing on wealth to future generations. “I tell my son that he has to specialise in two things — another language and programming,” he says.

Ng does not mean English. “Everyone speaks English. But there are some countries coming up in the next 10 to 20 years — China, India and even Vietnam, with its population of 90 million — and it would help if you spoke their languages. These countries are growing very quickly, so you need to grow your knowledge of them. And part of this knowledge is language.”

As for programming, Ng says you don’t have to be good at it, but you do need to know how it works. “Millennials have smartphones, computers and tablets — all the things we didn’t have growing up. And they start learning programming at the age of nine. Now, everyone knows how to do some app development or online gaming. They know how to market their products online. They know how Google works, how online advertising works. They do all this and everyone becomes very good. So, if you don’t have this knowledge, it will be very difficult to compete.”

He adds that in the future, people will be judged not just by how well they manage other people but also how well they manage machines. “So, you cannot run away from programming.”

Unlike most parents, Ng does not think that playing video or computer games teaches children about programming. “If you think that, you are wrong. It is very misleading. Being able to play Dota 2 or 3 (Defence of the Ancients, a free-to-play multi-player online battle arena video game) does not teach you anything about programming,” he says.

“Of course, there are exceptional cases where the guys who can write code are able to change the behaviour of the games or the display. But that is exceptional and we cannot assume that playing games has anything to do with programming.”

Ng is worried about future generations because many have been brought up to think that their paths have been made smooth because they will inherit their wealth from their parents. “I don’t have any such intentions. My wife and I have told our children that if we are able to maintain our wealth, it belongs to us, not them. Of course, we will do our duty and educate them as well as possible. But after that, they are on their own,” he says.

This brings us back to his original premise. “So in terms of wealth building, if you take away the parent or inheritance factor, it all comes back to knowledge, doesn’t it? So, you have to learn to pick up the right knowledge and translate that into wealth. You could become a really good programmer, for instance, and that would give you more wealth in terms of money. That is really what I think,” says Ng.