LEADERSHIP CORNER
Island Princess CEO saw success after 10 years of trying

Interviewed by Debbie Sokei
Advertiser Staff Writer

Personal profile

• High School: Valsetz High School, Valsetz, Oregon

• College: Oregon State University

• Little-known fact: "I have never missed a day of work since 1980 when I started my dental practice on Maui. I work seven days a week and when I do go out of town, it's for business."

• Breakthrough job: "I wouldn't say I had a breakthrough job since I've always worked for myself. But a breakthrough opportunity was when we received our first order from a Japanese customer. In the early years, I tried to get many customers in Japan to notice us. For five years I went to Japan and was unsuccessful in getting anyone interested in doing business with us. Then out of the blue I got a faxed message ordering 1,000 cases of chocolate-covered macadamia nuts. I couldn't believe it. During that time it was a big sale for us because we could barely keep our doors open. When I asked the president of the company why it took him five years to place an order he told me they wanted to see if I would still be in business. So, they were testing us. Today, that candy company is still doing business with us."

Q. What made you decided to give up dentistry for a full-time career in the candy-making business?

A. That is the No.1 question I get asked all the time. I got to a point in my profession where I felt there wasn't room for me to grow anymore in my practice. I figured out business was something I liked a lot because there's no end or ceiling to it. The candy business started when customers shopping at my wife's shop on Maui asked for chocolate-covered macadamia nuts and coffee. At the time, no one on Maui made those products. I thought it couldn't be that hard to make and we decided to make them ourselves. So, we started doing it at the store. We had a few people dipping nuts in chocolate in the store. It was a lot harder than I thought.

Q. Why was it difficult?

A. I had to do a lot of studying, reading and I had to learn as quickly as possible how to do a lot of these things. We contacted companies and consultants and asked a lot of questions. The first 10 years we didn't make a profit. We were having problems meeting our financial obligations. The main reason was because I was trying to do too many things. My wife was taking care of the store and I was practicing dentistry at the time. I made the candies at night and on the weekends. I really couldn't dedicate myself to sales and growing the business. I came home one night and told my wife I was going to sell my practice. She almost had a heart attack because we weren't making money.

Q. Ten years is a long time to continue and not make a profit. What made you decide to continue instead of give up?

A. At first it was the challenge. I knew I could do it. We just needed the right thing to happen. We needed to find the right ingredient. We kept trying and trying until it became a fear of failure. For me that was very difficult to deal with because I thought I could do anything. But, somehow through perseverance we began to start pulling it out.

Q. Besides selling the candies in your wife's store, Liberty House picked up your products. Was it difficult to get into Liberty House?

A. No. After about a year of selling chocolate candies at my wife's store at the Kaahumanu Shopping Center, the manager of Liberty House came in our store and said she liked the packaging of our products and asked if we would consider selling our products at her store. Selling our candy in Liberty House was kind of fortunate and also a curse. At that time, I didn't know the business end of it. I thought because the manager came to us, it would be very easy for me to go out and sell to other retailers. It wasn't easy. It was extremely difficult. I had to create products, meet price points and the desires of the consumers. It's the same old story you've heard, driving around in your car selling goods. That is basically what I did.

Q. Where did you get the money to start the business?

A. From the sale of my dental business.

Q. How much did you have to start the business?

A. $350,000.

Q. Was your business affected by Sept. 11?

A. Prior to Sept. 11 we weren't concerned about branding. We were very strong in Asia where we sold to companies which had their own label. When Sept. 11 hit, all of that business died. We had to come up with a new strategy and decided to go after the Hawai'i market. That's when we came up with the idea of getting Island Princess' products in the local markets as much as possible. Prior to 9/11, we were making $10 million in sales and our business was 75 percent in exporting. After 9/11, sales plummeted. Now, we are about 50 percent export and 50 percent local. I also had to reduce employee work hours. Fortunately, we had a $500,000 rainy day fund. We made that cash stretch while we tried to reorganize. We barely made it. Any company that doesn't have a rainy day fund is foolish.

Q. How is the company doing today?

A. This year we expect to be where we were in 2001. I think Island Princess is going to grow about 5 percent to 10 percent per year over the next five years.