Richard Lin exports products to China. And not just that. His made-in-America product is pain-relieving Chinese herbs, adding an ironic twist to his remarkable story. "I want a commendation from the president," Lin jokes, "for improving the trade deficit."
Lin was a 20-year-old student at the University of Washington, working part-time at his dad's auto-repair shop in Seattle, when he met Leuk Fu Chan, 40 years his senior. The entrepreneurial bug bit when Chan, who is trained in Western and Chinese medicine, laid out the concept of analgesic pads containing traditional Asian medications. "To have a product that could help so many people and make me a viable living at the same time was beyond my dreams," recalls Lin.
Joining forces, Lin and Chan started Nu-West Natural Products and dubbed the pads Riaxin (www.riaxin.com). Starting with little capital, no experience in pharmaceuticals, and no brand, the pair took three years to develop the business and get everything about the product—herbs, glue, pad sizes—to work. A passion for pick-up basketball at the University of Washington helped Lin meet and get help from local entrepreneurs. He even persuaded the designer of the Starbucks logo to design his packaging. And when overly energetic basketball caused him to tear a rotator cuff, Lin became his own product tester.
The company's first marketing strategy was simple and savvy: instead of trying to nurture a larger, English-speaking market, it targeted Chinese speakers in the United States and Canada—customers conveniently clustered in eight major cities and easily reached through Chinese-newspaper ads.
Three years after launching Riaxin in 1998, the company broke even with $1 million in revenues. They expanded to Hong Kong in 1999, and sales skyrocketed to $7 million. Today, Nu-West is an outstanding success: profitable, debt-free, and with revenues exceeding $10 million.
Then came Tuck. "I wanted to grow," he says, "so that I could help the company grow. I needed be able to attract capital, to develop strategies, and to understand organizations." With his father managing corporate operations, Lin found that he could apply classroom learning directly to his business. He learned that cutthroat competition was inevitable, and he gained the analytical tools to repackage, bundle, and integrate direct marketing for Riaxin.
Even more important, Lin met Alice Ying Chun Tsui T'05, whom he married this year. A consultant at McKinsey & Company, she is also an unofficial Nu-West adviser. "She always asks the right questions," he says.
With a lean workforce of 30 employees in the U.S. and Asia, Nu-West now sells Riaxin at 900 retail outlets in North America and Asia. But the shelves are crowded with competition, often with substantially similar claims and packaging. In response, Lin is improving product and pricing as well as expanding to mainstream channels in North America and China. To better understand the Asian market, he is collaborating with the University of Hong Kong on market research projects.
Lin forecasts significant growth in the next 5 to 10 years, which may warrant a public offering to get equity financing. Or he may consider a trade sale. For now, the husband-and-wife team is planning a new venture in China to provide advanced educational opportunities for the next generation. What he'll be counseling students: "If you believe in your idea, jump into it with a passion. Own it!"
