Sun Shines in a Tough World : Hard-Driving Founder Makes Sure Computer Chain Thrives on Its Own Amid a Shakeout

David Sun was 5 years old when his mother decided to move her two sons and two daughters to Sichuan province in China from Shanghai while they waited for government approval to join their father in Hong Kong.

David had to help farm the family’s small plot of land eight miles away from their home. “I had a little plow and walked with my uncles and mother. It took a long time,” he recalled. He was also in charge of the family’s ducks. “I took the ducks out in a basket to the pond. I had to learn to get them back in the basket. I threw rocks to scare them, except one time I hit one. He sort of limped for a while.

“It was a tough life. We didn’t have enough to eat every day.” When David was 6, the family moved to Hong Kong.

Today, the 32-year-old Sun owns a Jaguar, a Mercedes, a hilltop home in Palos Verdes--fruits of his labor as the founder, president and chief executive of Sun Computers. He is one of the longest-term Apple computer dealers, having built a 13-store regional chain that has prospered despite an industry shakeout.

He has turned down buyout and franchise offers, doggedly determined to stay independent and private. The boyish-looking Sun is taking Sun Computers (unrelated to Sun Microsystems) overseas into Hong Kong and plans a major West Coast expansion of stores beyond Southern California and Seattle. He hopes to have sales in the $100-million range in two to three years, more than double the expected $40 million in fiscal 1989. Sun’s sales totaled $29 million the previous year.

Sun and his wife of 12 years, Betty, face formidable challenges in managing the growth. “We either go real big or real small,” he explained. Sun is going big.

“We see the evolution (in the industry) from the hobby type of store to a something that’s a wholly different ball game,” observed Joan Stael, president of StoreBoard Inc., a Dallas market research company. “It is not normal retailing by any stretch of the imagination. Those who don’t get into trouble are creative merchants who are one step ahead of the competition.”

The personal attention that the Suns offered when they were a mom-and-pop operation has been a critical element in their success. “The dilemma is that we have to change. We’re growing so fast, but will we lose the personal touch that made us? David and I believe we can continue to be involved,” Betty said.

So far, her husband’s entrepreneurial instincts have earned the company local and national kudos, including the Commerce Department National Minority Firm of the Year, Los Angeles Minority Business Enterprise Retail Firm of the Year and Venture Magazine/Arthur Young Entrepreneur of the Year.

A key to his success has been the discipline and drive that he developed early during those 16-mile round-trip walks in Sichuan. He left Hong Kong at 15 to nurture that discipline at Shattuck Academy in Farbough, Minn., then a military school.

When Sun moved to Westwood to attend UCLA, he showed unusual discipline as a new driver. He practiced driving to and from Los Angeles International Airport at 2 a.m. so he could drive his brother there.

David’s rise, however, is not near as dramatic as his father’s. While David toiled at the farm, his father eked out a living as a camera repairman in Hong Kong where he earned as little as 50 cents a day and ate only bread. After he opened his own camera business, he was asked to become the distributor for Fuji film in Hong Kong. He eventually added mainland China.

During the past 20 years, his father has built a multimillion-dollar business that employs 300. “The Sun family is very prominent (in Hong Kong); we don’t have to do this,” explained Betty, who is executive vice president.

“We do it for our own interest, a hobby,” said Betty, a graduate of UC Berkeley and holder of masters degrees in psychology and education. Like her husband, she moved to Hong Kong from China when she was 6 and went to high school in the United States in Idaho Falls, Ida.

Liked Computers

After Sun graduated from UCLA with a degree in economics (he switched from pre-dental), he earned an MBA from Cal State University at Long Beach. For a graduate project, he bought an Apple computer to develop a statistical program that was not available.

“David liked computers and Apple so much, he just wanted to have all the toys he wanted,” said Betty, 33, who met her husband in a French class at UCLA.

Sun’s father offered David an opportunity to join the family business (his older brother, Dennis, a U.S.-trained pharmacist, did) or to start his own a business.

“If I had worked for my father, I would always be in the shadow that someone else did it,” said David, who figured that the worst that could happen on his own was that he might fail. “My father was against my starting my own company. He said I should work for a company to learn structure. I agreed. But if I had done that, I would have missed the opportunity. There are certain windows in time for people. I believed that was the time; I grabbed it quickly.”

In 1980, at age 23, David opened his first store in Huntington Beach with $10,000 from his father. He was the only full-time employee and worked seven days a week, commuting from Torrance. He had an inventory of seven Apple computers. In this first year of business, sales hit nearly $1 million.

Today, he goes through 1,000 computers a month. About 60% of all Sun’s sales are Apple products. It also sells equipment produced by AST, Hewlett-Packard and Toshiba. The chain serves both consumers and business customers, providing the expertise and personal service demanded by today’s more sophisticated and demanding computer users.

Sun’s growth has paralleled that of Apple. But when the Apple executive who approved plans for the first Sun store later left Apple, he told David that he had had early doubts that Sun would actually make it. “I outlasted him at Apple,” Sun quips proudly.

A Turning Point

“What motivates David is he wants to realize his potential--what he can do,” said his wife. “David is fearless. He often says, ‘I lived my hardships in my early childhood.’ ”

A big turning point for the Suns came at the second store in Lomita when a customer wandered into the store with an NEC printer that other dealers said they could not repair.

Sun examined the machine, noted that the switches were not set correctly and made the necessary adjustments. The printer worked. Sun provided the service at no charge.

The grateful customer, who turned out to be an aerospace employee, sent Sun’s name to TRW’s purchasing department, and within weeks Sun was invited to bid on his first corporate contract, which he won. That opened an entirely new customer base, which Betty built.

“In the early days with TRW, I talked with the customers, took the orders, packed the orders and delivered them myself,” Betty said. “If an item was defective, I would deliver the replacement myself. I liked to do it, it was the personal touch.”

Today, corporate and business clients include TRW, Hughes Aircraft, Rockwell International, McDonnell Douglas, UCLA, UC Irvine, Los Angeles Unified School District, Arco Transportation, Mars Co. and Southern California Edison. Betty still takes calls and orders from clients.

“The basic philosophy of Sun Computers is: Honesty is our No. 1 priority. We want our customers to feel yes, we made a profit, but it is fair and we’ve earned it. We feel honesty has gotten us where we are,” said Betty. “Some of our corporate customers even know our costs, they know our profit, especially the large corporate customer.”

Many competitors also know Sun’s costs. “Sun is clearly in business to be in business,” said William E. Thomas, district manager of Businessland’s 10 stores in Southern California who competes with Sun for corporate accounts.

Lean Operation

“We pretty much all know one another’s costs for the products,” Thomas said. “Some competitors sell items at or below cost just to sustain revenue flow, whereas it appears that Sun considers profitability of the business. They are very aggressive. They are as aggressive on pricing as anyone else.”

Sun Computers is as lean as it is aggressive. David does not like to lay off people, so he keeps his staff to a minimum. Often some of his 130 employees sound harried as they answer phones. “Someone said we are the best firefighters. We have had to take care of a lot of fires. It’s not a good thing to be, but at least we can do it,” David said.

When Sun bumped into his Lomita store manager at the Carson corporate headquarters a week after Christmas, Mike Hamilton was nursing a cold. “The reason Mike is sick is he worked so hard during Christmas.” He said: “It’s not easy to work for me. I’m not easy to please. My best trait as a manager is I drive more out of people than others.”

David, who always wears white shirts with his suits, believes that people are the most important asset of a business, and he sets high expectations for himself and his employees. He may be satisfied with their performance, “but I never tell them.” As Betty said: “David always compares people with himself. He always says, ‘How come people don’t work as hard as me?’ ”

“My vision is that they target higher than what they can do,” explained David. “I always believe in pushing. Once they achieve a certain level, I don’t expect them to go below that. That becomes the new minimum. Life is not easy. When people say America is the land of opportunity, I believe that. What they don’t say is that you have to work very hard to get it.”

“Everything has a measureable unit, even if it is intangible,” he said. “Even our receptionist--the number of complaints; the number of rings before a phone is answered. We’re all here to grow and progress, if you don’t measure things, how do we know if we grow and progress?”

Touch of Humor

Betty lives with a triple whammy. “I live with high expectations not only as his wife, but as a good businesswoman and mother. Boy, what a job. He always says, ‘Betty you’re paid to work.’ When I asked about a three-month maternity leave (they have a daughter, 7, and son, 6), he said, ‘You’re my wife. It’s your own business.’ ”

But he humors his staff, too. Sun once threatened to give his sales staff blank business cards so they could fill in their names in pencil in case they did not make their sales quotas. “I joke a lot. If you work hard without humor, it is twice as much hardship. You have to be able to laugh it off. The key is to try to create an atmosphere of having a good time even if we have to work hard.”

Betty softens the edge to her husband’s demands. Having worked as a counselor for the Los Angeles Unified School District before joining the company, she takes a counseling approach to her corporate clients, learning about their needs and requirements before recommending a product.

“David looks at the bottom line, the dollars and cents,” explains Betty. “I look at the business as something that we nurtured, that we developed. You have to be a businessman to succeed, but if you’re just a strategic businessman you lose personal relationships with vendors and customers. I come in as that link. I develop those relationships.”

Sun Computers, like other dealers, has faced tough times. “1984-1985 really was the only time in the history of Sun when we had to wonder about Sun,” David said. “No phone calls were coming in. We were lean. . . . I don’t think we ever lost hope. . . . We treated it like a learning phase.”

“It was the only point that he once thought for a split second to dissolve the company,” recalled Betty. “But David said, ‘We’ve come this far, we’ll go through it.’ He looks at Sun Computers as his baby. He’ll never give it up.”

Didn’t Fit Talents

David, who worries about losing hair--”I think a lot, that’s why I’m losing hair. I’m losing hair like crazy”--wondered briefly if he was burnt out three years ago. “Too many things were not going right. We were trying to put in a new structure, cut operations costs, yet we were not realizing it.”

Then in 1987, Sun Computers hired a president. “I was trying to establish a presence in Hong Kong. I knew I’d be tied up in the Orient. I wanted someone to manage. The president (who he would not identify) was and is a good friend. He had good talents. This environment didn’t fit his talents as I expected. To fit, he would have had to change. He was from banking, which was a lot slower pace.”

Did he offer his wife the job? “I don’t think Betty’s best ability is to be the next president. I don’t think she has the understanding for the next level. Why take away what she does best: dealing with customers? I’m not sure she wants to be president. The big challenge is to find someone like me.”

The other goals for Sun Computers is “to stay ahead of the industry and achieve economies of scale.” A major decision that the company is wrestling with is whether to launch its expansion in Southern California, where it operates 11 stores, or to move into Northern California where there are no Sun stores. The chain has two stores in Seattle. The goal is to have 30 stores along the West Coast in three years.

In addition, Sun is looking to other computer affiliated businesses. “We want to diversify a little.”

Nevertheless, the Suns believe that fierce competition and downward pressure on prices in the United States will slow profit and sales industrywide. So they are moving aggressively into Hong Kong. “If overseas is growing, the West Coast will benefit the most. In Hong Kong, we have an advantage there. We have contacts.”

Sun has a staff of 36 in Hong Kong where it has opened two outlets, one known as the Apple Centre, a retail concept which has only been used in Europe and caters to the business user.

Howard E. Hamann, Sun’s attorney at the law firm of Mendes & Mount, sums up his former classmate at Shattuck:

“He knows what he wants and where he is going. I don’t think he sees obstacles or barriers. He see things as challenges.”