Meet Startup @TW

Acer founder's Maverick son takes aim at changing an old, traditional PC firm

Maverick Shih joined Acer during a tumultuous 2011 as cloud computing general manager.

The world's second largest computer manufacturer had reported a loss for the first time in a decade. His father and company founder Stan Shih, had come out of retirement to help revitalize the company and said it needed a radical change.

That year, Acer also bought American cloud service provider iGware for about US$300 million and launched its cloud computing service a year later.

His son became Acer's Build Your Own Cloud (BYOC) president in 2014, an ascent reflecting the prominence of cloud services in Acer's overall development. His father stepped down as chairman the same year.

The son's new position was widely reported as a "princeling inherits family fortune." His penchant for fast cars and tightly tailored suits fanned that perception.

But Maverick Shih was never destined from the start to become a leader at Acer.

He was born in Taipei in 1973, three years before his father founded the company that would make a world name for selling affordable PCs. He grew up playing basketball in Acer’s back yard but didn’t give a thought then to working there. In an interview with the German newspaper Die Zeit, Maverick recalled that his father told all his children, "Don't even think about working at Acer when you’re older."

Yet in the eighties, he learned to code as quickly as others learn to write. At age 9, when instructed to learn the multiplication table by heart, he wrote a computer program to do it instead. "Who is the computer here, and who is the human?" he asked himself.

Though Acer was one of Taiwan's most profitable companies, Maverick recalls no privileged access in childhood to family money. "I remember nagging my mother to buy me a Transformers toy for months. In vain," he once said. His father, who was often away at the office, would slip Maverick and his siblings pocket money behind their mother's back.

After high school, Maverick studied mathematics at Fu Jen Catholic University in surburban Taipei. He went on to get a master's degree in software engineering at the University of Southern California.

To mark his first foray abroad, the man who had gone previously by his Chinese name Hsuan-hui, chose an English name that no one would forget. In pursuit of his doctoral degree, he conducted some of the earliest scientific research into digital music and invented a technology that enabled listeners to find songs simply by humming their melody.

While a PhD candidate, Maverick built contacts in the Silicon Valley and was offered a job at Microsoft, which he declined in order to start something on his own.

FAILED STARTUP

His own company MAVs Lab was born in 2004. The company funded by his parents researched and developed IP authorization for multimedia content analysis. It folded after two years. “I was too early,” reflected Maverick, pointing to a lack of market demand and inexperience in finding funds.

His second company, Egis Technology Inc., launched in 2007. It benefited from the experience of co-founder Steven Ro, who had also set up the software publisher InterVideo in the United States. Egis specializes in fingerprint identification technology.

Maverick would often approach Hewlett-Packard, Lenovo, Siemens, and Fujitsu to make sales. He even pitched Egis' products to Asus, Acer's traditional Taiwanese competitor. "They had no idea who I was," he told BusinessNext.

The young Shih also dug deep on the technical side of things. When there was a problem with silicon wafers, he would liaise with United Microelectrics or visit Lenovo's factory in China.

"In a startup, even the boss has to do a bit of everything," he said. "Not everything goes smoothly when you're building a company. You can spot a trend or an opportunity, but the time may not be ripe. You have to have patience and build up potential."

That patience eventually paid off. For years consumers were uncomfortable with fingerprint technology. "If you don't meet consumer expectations, the market will freeze up," he has been quoted saying. "It takes three years of gestation before things get moving again."

But when the iPhone adopted fingerprint identification in 2013, other companies soon followed and Egis took off. It listed on Taiwan’s OTC market in December 2015. In the first half of 2016, the company's revenues topped US$11 million.

Maverick was already talking to his father, who he had humorously come to refer to as "big brother Stan," about Acer's future. Maverick’s experience in software was suddenly uniquely relevant as Acer sought to change after 2011.

Father and son also share a down-to-earth understanding of business. "Acer’s recipe for success is no longer valid," the son said. "If we can’t continue to create value, we'll be eradicated."

He told Business Next that "profit is not the priority" but that value is instead. "But if there's no money rolling in, that means that we're not creating value.”

Maverick is reading Howard Schultz's book Onward: How Starbucks Fought for its Life Without Losing its Soul. The worldwide cafe chain had been expanding rapidly, lowering costs to open more stores. As CEO, Schultz realized that it was a mistake to prioritize scale over people and experience.

Parallels may be drawn with Acer. For decades, the company relied 100 percent on growth in hardware. Now it is trying to build a new business around people's use of cloud services.

Maverick's vision is to integrate hardware, software and online services to create "a comparatively niche, but sizable industry."

Acer's commitment to grandPad, a tablet for the elderly, is one example. Acer will focus on its software applications, such as insurance services, and domain know-how. "The senior citizens market is substantial and it will continue to grow," the younger Shih said. "But it's not quite big enough for huge companies like Google and Baidu to put at the top of their to do list."

Talking to Buisness Next, Maverick also touched on schisms that develop when a large conservative company pursues more innovative lines of business. In established businesses, people tend to focus on earnings whereas a startup prizes market value. Acer's recent restructuring is aimed at resolving this contradiction.

The company has been split into two groups: a core one covering PCs and a new one for smartphones, wearables and cloud services.

Each is supposed to act independenly, a spur for innovation. "But giving birth takes a long time," Maverick Shih said. "We haven’t demonstrated our value yet...Within three years, we hope to have a stable market value."