OREANDA-NEWS. Singapore entrepreneur Henn Tan calls himself a Johnny-come-lately.

The Chief Executive Officer of technology solutions provider Trek 2000 International has come a long way from the long-haired hippie who skipped school and hung out with his buddies to smoke.

Tan was the third son in a family of six brothers and the first among his siblings to enter a local secondary school. “My parents rested their hopes on me. But at that time, I was fixated with keeping my hair long and being trendy.”

Tan, who dropped out of school at 16 after his O-level examinations, only grasped the importance of education after he became a military police instructor in the army.

“In the army, I changed. I was surrounded by peers who were taking night classes to improve themselves. I felt so out of place, and I was worried that if all my peers pursued a higher education, they would end up better than me.”

Growing up in a kampung in Geylang, eastern Singapore, Tan was no stranger to poverty. His pest-control operator father and housewife mother struggled to provide for the family after they moved into a two-room public housing flat.

“I know what it means to be poor. I used to walk to school every day, which was a 30-minute journey, just to save on bus fare. I would also save all my pocket money so that I could buy better food to eat,” the 59-year-old recalled.

After his stint in the army, Tan joined NEC Semiconductors as a marketing executive in 1980, before rising through the ranks to become the director of operations for Southeast Asia at Sanyo four years later.

In 1985, he obtained his diploma in marketing from the Institute of Marketing Singapore, and in 1994, a Bachelor of Science degree from the University of Ireland.

Pushing the Envelope

“My time in the Japanese companies made me realise there were many things I did not know. I was able to travel and read extensively, and that pushed me to upgrade myself,” he said.

But his world suddenly collapsed when his daughter was diagnosed with leukemia at the age of two-and-a-half.

“She was hospitalised for six months. All my savings were depleted. Every cent went into medical treatment, every spare moment was spent in hospital. That was the lowest point in my life,” Tan said.

Now 23, she works as an auditor in KPMG.

But that incident struck fear into Tan’s heart. “I had a phobia about what would happen after I retired. All the more now, I could not retire at 55, and that really pushed me on in terms of what to do next.”

His yearning to create something of his own was fulfilled in 1995 when he bought a small family-owned electronics parts trading business with a credit line of S$1 million. Four years later, the restructured company – Trek 2000 International – was successfully listed on the Singapore Exchange.

“Typical tech companies like contract manufacturers and electronics distributors were not going anywhere. We needed a differentiator, and research and development is the key. R&D brings value and allows you to talk to MNCs on an eye-to-eye level,” he added.

“For Trek to be relevant, we needed patents. We could not fight on pricing alone.”

Triumph and Grief

Tan’s invention of the ThumbDrive™ in 1999 – a USB flash drive that eventually replaced the floppy disk and is now a ubiquitous data storage device – was both a triumph and a source of grief.

He received generous offers from bigger players keen to capitalise on Trek’s intellectual property, including the thumb-drive technology.

But Tan refused to sell the company. “Money does not buy me – remember my background. I am a proud man. This is my baby, and I do not sell my children.”

His subsequent missteps – going it alone with the device instead of partnering with an established player, and sharing the new technology while the patent for it was still pending – allowed clones to flood the market and eroded Trek’s position.

“The methods of doing business globally are not what you think they are. The big fish will hijack your invention if they can. They will eat you, and those who cannot eat you, will kill you,” he recalled, with a tinge of bitterness.

The lessons learnt from this episode were indelible. “I am not so bold now; I don’t behave as if the world owes me a living,” he added.

Trek has since progressed on several fronts – it has been granted more than 400 patents around the world and now holds the global trademark for the ThumbDrive™ brand. The company has offices in 11 countries and averaged annual revenues of nearly US$90 million over the last four years.

It was named “Global World’s 200 Best Small Companies” by Forbes in 2000 and 2002.

Trek also received the INVENT Singapore Award in 2008, the ASEAN Business Award for Innovation in 2011, the Spirit of Innovation Award conferred by the Asia-Pacific Enterprise Leadership Awards in 2013, and the SD Association Leadership Award in 2014.

Next Hit Product

Tan is eager to prove he is no one-hit wonder. His latest creation is the Flucard® – a postage stamp-sized Secure Digital (SD) memory card that allows videos and photos to be transmitted wirelessly between devices, including mobile phones, computers and cameras.

The idea behind the device came about during a family holiday, when losing a camera spurred Tan to search for a better way to save precious vacation memories.

In February last year, the Flucard® – which Tan calls “the world’s smallest server for the Internet of Things” – was granted patent protection for 20 years across major jurisdictions worldwide.

The product has secured the backing of the global SD Card Association, founded by Toshiba, Panasonic and Sandisk.  Trek is also the original equipment manufacturer for Toshiba, supplying a customised Flucard® under the brand FlashAir in June 2012.

Tan hopes the Flucard® will eventually replace the “dumb” SDcard. “If we can bring the cost of the chip down to the level of the SDCard, it will fly.”

Driving Force

A self-confessed workaholic, Tan has only one other passion in life – jogging three to five kilometres every other day.

“My wife complains I am married to my work, but she knew that from day one. Jogging is my only indulgence now – running allows me to think.”

At home, Tan – who also has three sons aged 17, 27 and 28 – is a strict disciplinarian.

He remembers using plaster and iodine in his younger days to cover cane marks on his limbs. “My mum was not afraid to discipline me and my brothers.”

“I also believe in corporal punishment – it’s important to discipline my children and teach them what is morally right, so they do not run loose and bring disgrace to the family,” he added.

“And my kids are generally very well-behaved.”

But this parenting approach comes at a cost. “My kids don’t really share their personal problems with me. I hear about them second-hand from my wife,” he admitted.

Nonetheless, providing for his family remains a clear driving force in Tan’s life. “I always tell my kids: ‘You are what you are today because I work very hard’,” he said.

Blazing a Trail

Looking ahead, Trek plans to ride on rising demand for cloud, medical and consumer wearable technologies for its next wave of growth. It has begun talks with potential partners to collaborate on those technologies and their commercialisation.

“Medical technology is the way to go, apart from the Internet of Things,” Tan said, pointing to a world where patient information is monitored by Flucard®-enabled devices, and uploaded seamlessly to the Cloud for doctors to access for diagnosis and treatment.

“I don’t think I would ever retire,” he added. “If our medical business takes off, it will mean another 10 years of hard work.”

And the biggest challenge for Trek is staying relevant. “We will continue to invest in R&D, and innovate relentlessly,” Tan said.

“In technology, product lifespans are very short. We have to constantly evolve, be aware of what’s next on the horizon, or be left behind.”

Financial results

FY ended 31 Dec (US$ mln) FY 2014 FY 2013 FY 2012 FY 2011
Revenue 112,949 73,923 80,391 86,149
Gross profit 12,683 9,764 9,244 11,205
Profit before tax 3,048 1,303 -5,369 2,019
Net profit 3,074 1,292 -5,084 1,976
Quarter ended 30 Jun (US$mln) 2Q 2015 2Q 2014 % change
Revenue 41.8 26.5 57.8
Gross profit 3.9 3.7 6.8
Gross profit margin (%) 9.3 13.8 -4.5
Net profit 1.1 0.2 425
Net profit margin (%) 2.6 0.8 1.8

Trek 2000 International Ltd

Trek 2000 International Ltd is a company that engages in the research, design, and development of external storage and security solutions, as well as other related technology products. The company has operations in markets including Singapore, China, the United States, Malaysia, India, Japan, Germany, the United Kingdom, and Thailand. Trek 2000 was founded in 1999 and is headquartered in Singapore.

For the quarter ended 30 June 2015 financial results please click here.

The company website is: http://trek2000.com.sg