How I Built This with Guy Raz - Vizio: William Wang

Episode Date: April 14, 2025

When Wiliam Wang started selling flat-screen TV’s, he used a winning playbook: partner with an efficient manufacturer, cut out the middlemen, and price your product as low as you can. William used a similar strategy at his first company–making computer monitors–and he built it into a multimillion dollar business. But he wound up mismanaging it into the ground, and spent years working to pay off millions of dollars in debt. After surviving a catastrophic plane crash, William embarked on a new venture, Vizio, and returned to his “cut-out-the-middlemen” playbook to sell one of the world’s first internet-connected televisions. Today, Vizio is one of the top-selling TV’s in the US, and in 2024, sold to Walmart for $2.3 billion.This episode was produced by J.C. Howard, with music by Ramtin Arablouei.Edited by Neva Grant, with research help from Alex Cheng.You can follow HIBT on Twitter & Instagram, and email us at [e-mail]. Sign up for Guy’s free newsletter at guyraz.com See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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Airbnb.ca.ca. slash host. So he started taxing on the runway pretty rapidly because I think he wanted to beat the typhoon. So I was on a plane. I was sitting on a number, I think, 22. I request a seat. There was nobody was next to me. So I was watching People magazine. And we hit the lifto speed 165 mile per hour and my portion of the plane was up in the air and then I hear this

noise like somebody knocking on the door I'd say what the heck is that obviously something really bad happened welcome to how I built this a show about innovators

entrepreneurs, idealists and the stories behind the movements they built. I'm Guy Raz, and on the show today, how William Wong lost his first business, almost lost his life, and then built one of the best-selling television brands in the country, Vizio. There are a number of ways to break into a crowded market. One of them is through branding. You differentiate by creating a culture around the product, kind of like how liquid death managed to break into the $300 billion bottled water category. Another way, is to just price your product so comparatively low that consumers notice.

So, for example, Harry's Razors, which were designed to compete against more expensive brands like Gillette. And this is the playbook that William Wong used, not once but twice. The first time was in the 1990s when he built a company that made cheap, high-quality computer monitors. Even though big players like IBM dominated the category, William managed to undercut their price and build a pretty significant business. That is, until the bottom fell out and the company went broke. But that didn't stop him from trying again. The next time was with flat screen TVs. In the early 2000s, a flat screen TV would set you back $13,000 to $15,000. But William believed that with the right efficiencies, he could build a flat screen TV and sell it for under $3,000.

dollars. His brand was called Vizio, and within just a few years, he built it into a massive business that now sells smart TVs, sound bars, and targeted ads on its own platform. In 2024, Vizio was acquired by Walmart for $2.3 billion. And if all of that weren't enough of a story, as you will hear, when William was already reeling from debt incurred when his first business failed, he experienced something even more more catastrophic, a plane crash. In the year 2000, he survived a horrific accident during a typhoon, which killed scores of his fellow passengers. He flew safely home a few days later and then started the company that would become Vizio. William Wong was born in the early 1960s in Taiwan. When he

was 14, his family settled in Southern California, where adjusting to American life was hard. For starters, William barely spoke any English. It's hard. I'm no friend. I don't know anybody's tough as a kid. You know, I want to try out sports. I had no idea how to do it. And, of course, I failed. You know, just difficult. Were there a lot of Chinese kids around when you were growing up? No. No, I have 78. We came to Huntingdon Beach and a little upscale neighborhood. Now very upscale, but back in 78 was, I think, middle class.

But you grow up, you know, complete outsider. But I imagine that your parents had high expectations for you because they made a big sacrifice to come to the United States and to start over. Is that fair to say that they expected a lot out of you? Well, having good, you know, Chinese parents, of course, they want me to get a PhD or something. Yeah. It was always the expectation. So in high school, because of disconnect, you know, for a couple years, my GPA was, it's okay. You know, my math is pretty good.

Of course, my English was poor. And I think my GPA in high school was like 3.3. But back then. Respectable. Respectable. Yeah. So my GPA wasn't good enough for UCLA, wasn't good enough for Stanford, Berkeley. But somehow I did I got into USC

And my mom She highly recommended to become an engineer Because you know The high pay jobs are all engineers And like $30,000 a year So I got into electrical engineer At USC Which is kind of

Not my personal favor I want to be I like art I want to be a architect But it's all right. I think I don't know any better too and just follow my mom's guidance. Advice. Yeah. Yes. So, and by the way, I mean, today, a 3.3, you would not get into USC, right? Much harder to get into it. I know. I don't even think you can't get a U.S.C. at 4.3 now. No, it's very hard. It's a completely change. But a wise decision you made because you've got a USC degree, which is a very prestigious degree. And from what I understand, out of college, you get a job working for a company that made computer monitors, I guess.

You were, it was like a sales job. Is that right? Yeah, no, technical support. Answering your phone calls. Technical support, okay. It's a Taiwanese company. It's called DaTong. It's the biggest consumer electronic company in Taiwan.

Yeah, dot-tong, right? I remember. Yeah, they're famous for rice cookers. Didn't they have a commercial? Da-da-da-Tong? Didn't they have that commercial? on TV? Yeah.

Very good. Amazing. Yeah. We grew up with that commercial. And so I was hired as the first technical support slash custom service because it's first of all, I was born in Taiwan so I know their culture. I speak the language. So they hired me pretty cheap.

I mean, it wasn't $30,000 year. It was my salary was $1,750 a month. And my boss said, hey, you're pretty good at telling the story of why the computer monitors should be better or why the software monitor better. Why did you try sales? So I say, okay, I'll give a shot. So you're really focused on now in sales, selling Gauteng computer monitors. But I guess around four years into it, you're 25, 26, maybe 27, I don't know, you get frustrated there. you decide to leave and start your own monitor company. Tell me the story about that. What was going on?

Yeah, there were multiple reasons. I was 26 years old. And I was so jealous. Every Saturday, when they had this management class, only the senior manager can attend. I say, how come I was invited? I want to know more. So I went to my boss, say, can I go, can I do that? He said, no, no, you're too young. I already got promoted from like nobody to direct sales marketing at that time. I say, okay, but you guys know nothing about this business. So I know better than all of you. I should be the next in line to be a VP.

And then my boss's boss said, no, you need more time. And when my previous VP left, and I saw definitely on the next in line, And he went to do something else on his own. All of a sudden, he dropped somebody else to replace him who know nothing about computer monitor. And I think, I just think he's, it was a wimp. A wimp. And I say, I can't work with this guy.

At the same time, I really fell in love for the computer monitor industry. And I know this industry very well. I know the problem was the industry. At that time, the computer monitor, the spec on the monitor was fully controlled by IBM. Right, based on their specs, because IBM dominated the PC market. Yeah, exactly. Or IBM clones, yeah. Yeah, everything is called IBM compatible.

Compatible, yes. They use the TV interlacing technology to do a computer monitor. I look at it and say, this is not good for a consumer. The resolution is too low. You're going to kill people's eyes. And I look at it as it's flickering, right? It's refreshing at 30 hertz, meaning 30 times a second. And just for simplicity reasons here, this is the frequency, right, that powers the cycles right here.

Yeah. And so 60 hertz would mean a better quality monitor essentially in short. Yeah, 60 hertz meaning just for every second, each screen refresh 60 times. Right, there's less lag. There's no lag. Yeah, exactly. So I just, I couldn't take it. I say, there's a golden opportunity to build something a little better.

You can easily turn into 60 hertz. It's not hard. You just spend a little bit more money. So I went all the way out to the chairman of the company, Daton. He told me, who's your customer? I say, we'll build it. The customer will come. Say, no, we're IBM.

Everybody else is not our customer. We don't want to build it. So he shot me down. Yep. So that's one of the main reason. Again, I left. I say, I'm going to build myself. If I ever be I want to build this, my company would build that.

This is a classic story. You know, the young upstart has an idea. They bring it to the boss. The boss says no. And the upstart gets frustrated. And they leave. And that's basically what happened, right? And you said, all right, I'm going to try to figure this out myself.

This is 1990. What did that, I mean, first of all, how did you even get the money to start a computer monitoring? I guess you had experience now. You knew where the factories were in Taiwan. You knew kind of had an understanding of how they are manufactured, but you still needed money. And in 1990, you know, to raise the money wasn't easy. Who did you go to? At a time, Daton was also buying from other suppliers.

Yep. So I got pretty lucky because I know. the factories. And one of the suppliers would build for Daton, which I know very well, they're hungry like me. And they're pretty much a similar age. And he raised a lot of money to do their own computer monitor manufacturing. So wait, so this person you're talking about, this person you pitched your idea to, he was like a supplier or a factory owner in China? Yeah. So the opportunity. I presented.

They say, God, we want to do that. Right? So they're very entrepreneurial in spirit. And they say, oh, yeah,

if you, if you do this, I gave you $150,000. Right. So you gave me $150,000. So I went to my dad

and I put together $50,000. Like, some of them from my dad, some of them from my own saving after four years are working.

Then after, so I told my boss and my bosses, I'm leaving. The funny part was my boss is the boss, the chairman of the company of Datong, US. He said, oh, we really like you. I think you definitely worth while to investing.

So he gave me $150,000. Wow. So, you know, I've, you know, 20-some years old, I found $350,000. And I just started the business. Don't understand balance sheet. Don't understand income statement. Never run a company in my life. Wow. All right. So you start, so you start your business to make competing monitors, better monitors. It's called, you call it Mag Inovision, I think. Yes. And this is, I mean, it's kind of a fortuitous time because 1990, I mean, this is, people think of the 80s as a time when the PC boom really happened. But it was really the 90s when so many more people brought personal computers into their homes.

in part because the internet was coming. And Windows made it easier to use PCs. Before in the 80s, it was DOS, you know. And so now in the 90s, ordinary people without a lot of skills could figure out how to use a Windows PC, meaning lots of people needed monitors. So if, you know, there was one standard, which was the IBM specs, and you could improve on it, you could stand out, I guess, right? Yes, absolutely. There was the crazy time in this industry. I mean, back then, if you can build can't build can't monitor, you would sell them out.

And if you can't build. Oh, gosh, the PC personal computer was in great demand. Yeah. And they're getting cheaper and, you know, so, right? I mean, all the things were happening. Cheaper and cheaper. You can't get enough monitor. You can't get enough memory chips.

And the technology was growing that at such a rapid speed. the hard drive went from 10-Make to 20-make to 50 to you know just non-star innovation from in the 90s for a personal computer and this whole industry was was on fire in your case where were you selling the monitors were you selling them through retail stores or were you were you selling them to PC makers as a bundle like where they would just they would sell it with their computers I found a really key customer called Gateway. Gateway, yeah, sure. Yeah, Game 2,000 back then, Scott, because we're the same age. And I used to go visit them a lot. And we think alike.

We say better technology, lower price. Better technology, lower price. And they were able to make PC cheaper by Sony Direct because they were male order. They were on e-commerce. There was no e-commerce back then, but they were male-older. Yeah. So they bypass everybody by making the computer so much cheaper. So they became one of my biggest customer.

And whatever I made, they soak. So, all right. So Gateway is your biggest customer, like 80% of your sales? Yeah, I would say 70, 80%. Wow. Okay. This is key because I think within six years, you guys are doing $600 million. in revenue. So you really caught a wave here. I mean, this was massively growing massively fast.

You had 400 employees for MAG IneVision. Just very briefly, William, how were you able to make a cheaper product that was better quality? Was it, I mean, A, I'm assuming you were making these in China, so that lowered costs. But how else were you able to really compete against these much bigger companies like Tatung? Yeah. In the very big. beginning, we're just making it better. My customer made it cheaper, like Away. And I just, I keep on, again, in the early 90s, the technology shift so fast. Yeah, we have 14 inch computer screen, 15 inch computer screen, 17 inch computer screen. This is all happening in three or four years. We have 60 hertz. We have 70 hertz. So my engineer background, I keep on pushing the technology envelope. So in the first four years, when it grew so far fast, I just focused on technology advancement.

And I found a factory to do it. That was a key. I mean, we're building everything offshore. So, so Taiwan was pretty efficient back then. I mean, to go from zero to 600 million within six years is mind-blowing. I mean, the pace of growth was probably so fast that you had no, I mean, I don't don't even know how you you were able to handle that because and by the way not always a good thing right because it can lead to huge challenges fat very fast explosive growth like this must have been quite overwhelming yeah it was way too overwhelming all right it was a disaster later on yeah i mean let's so let's talk about this because we obviously there's a wave gateway 80% 70 80% your business is coming from Gateway, which on the one hand is amazing. On the other hand,

is a little scary because you're dependent on Gateway, right? By 1998, your revenue drops to 470 million, and then it really stops, starts to drop further and further from there. Tell me what happens. Is it just competition enters the space of many more companies? Or like, wait a minute, we can compute against these guys. Exactly. It's a combination of problems, right? The market got so much bigger, so efficiency became a key ingredient for success. And the competitor are coming in like crazy. We're still focused too much on technology. And there was a focus on efficiency. So their cost is more competitive. So I was the only supplier for them. And they want to diversify also. So, you know, gateway start to buy from other people. And because, because, you know, we started to buy from other people. And, uh, because, because we grew so fast, we couldn't control our quality. But most importantly, I literally all grew myself in management capability. I'm still a kid who think technology would dominate everything.

Yeah. So I wasn't a great manager. I don't have enough. My management team is not strong enough because I didn't hire good enough. Also, I was into too many, too many sector. the business. I was in the service business, service computer monitor. I had an engineer lab designing smart TV in 98. Already an idea. Way before it's time. Way before it's time when internet was still going through modem. And I sunk a lot of money in there. So I wasn't good

enough to make it to the next level. The management team was still challenged by me. by the dumbness of an entrepreneur like me. You were a micromanager. That was a macro manager. Oh, yeah. Yeah. But I mean, but you couldn't see it at that time because you were young and learning. But obviously on reflection, you realize that because you were involved in every, I mean, look, there's different arguments that people make about this.

Some people say you have to be involved in every detail of the business. Some people say, no, you really have to delegate and trust your people. sounds like that's where you landed eventually. Yeah, yeah, well, I learned the hard way because it's, I mean, I was 30 years old. I don't know what management means. And I don't know how to manage my finance, right, because I was, I thought money would come easily, but money didn't come. And I learned the hard way, pay my tuition. It was tough.

When we come back in just a moment, William faces something even scarier than mass. of debt, a catastrophic plane crash. Stay with us. I'm Guy Raz, and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1998, and William's first company, Mag Inovision, has gone from $600 million in revenue to being buried in debt. And William, looking for a way out, decides to sell the business. I want to pay on my debt. Yeah. I couldn't. And, uh, I sold companies to the factory under the rest. How much debt did you have at the time?

I think we had $25, $30 million dollars of debts. And obviously you had some investors, so you wanted to pay back, I guess. Yeah. Well, the investor lost some money. They lost, yeah. They lost, yeah, including myself, putting in another more money. So the shareholder values all disappeared. And it was tough.

So under the rest, we had to settle with a supplier. I tried to, you know, from 98, 99 until 2001. I did nothing but sultan in deaths. So I tried to make money. Pay them. Make money. So three years, I didn't do anything but paying in suppliers. Just to understand.

So you sell it underdress. It's amazing because a lot of people from the outside would think, wait, you were doing $600 million in sales just two years earlier. this is an incredible success story. And yet it just shows you how tough that business was that the bottom fell out and you had to sell it and you were left with nothing. Like you were broke. Yeah. Nothing.

And you had to pay back the people you owed money to. I mean, here's just a weird question. Couldn't you declare bankruptcy and have those debts forgiven, I guess? I could, but I don't, I mean, that's not my motivation. I believe I want to do better for them. You know, we looked at bankruptcy, but I just don't want to do it. So what was your plan to pay back the debtors, the people that had, you know, that you had money to? How were you going to pay them back?

I was making, I became like, for example, I know what's a new product. So instead of going through me, I say, you pay me two-person commission. I used that two-person commission to pay you. So you were doing consulting work for some of the, the people you owed money to, basically for free? Yeah, for free to pay them off because I want to pay that off. And again, I know a lot of suppliers. They know I didn't do anything wrong.

I didn't take the money or anything. And they still trust me. They just know that during that time, there was a major transition. And it's just poor management on my behalf. So they allow me to give me some time to use my talent to make some money for them to pay on my debts. Wow. Okay. So I think this is like a period of four, at least four years of trying to, you know, doing consulting work in part to try and pay back debts. And I think one of the things you got involved with was helping one of these companies try and figure out like a smart TV and also plasma screen televisions, right? Yeah. Back then, the plasma TV started to emerge. very expensive.

They were like $20,000, I think. And, I mean, today they cost, you know, like nothing. But back then, I mean, they were super expensive. Meanwhile, I want to talk about smart TVs for a moment because, I mean, this is the late 90s. And, I mean, no one was really interested in them yet, right? But I guess you were, right? You wanted to sort of make them or something that would resemble them, right? Well, yeah, I just built it.

I say, hey, TV should be connected to the internet. I actually had a whole design lab. We laid out a board. We found a software company in Boston to do Linux-based software for us. I found the chip supplier. Put a CPU in the TV and connected to the internet. And when you turn on that TV, first page was apps. Back then, we didn't call the apps.

Back then, we called widgets. This was way before iPhone. The TV worked great. But the problem was the internet connectivity was rather slow. So it takes five minutes to warm out of TV because it's a motor need to connect. And again, that was 98 and lost all my money. Wow. That's part of the...

Part of why your first business went under. Yeah. So, all right, let me kind of set the context here because you are financially in crisis at this time. trying to figure out how to pay back debt and also trying to figure how to make money, I guess both of them are connected. And you are going back and forth between Asia and Southern California to do consulting work and to try and figure out different ideas that you could generate income from and innovation, but none of them really work. And you get on a flight October 31st, Halloween, 2000. You're about to fly back, Singapore Airlines flight.

You're in Taiwan. And you're going to fly back to Los Angeles. Tell me what happens. Yeah. So the reason I want to get back that evening was because it was my daughter's first trigger tree. Halloween. You were going to get back, even though you were leaving on the 31st,

by the time you get back to L.A. It was still the 31st. trust in the international. If I leave like 11.30, I'll get back here like 6.30. I barely make it. I can still see my daughter in her costume. In customs. Yeah.

So I realized. She's like four years old, three years old. So I say, okay, and I still do that. And by the time I finished my meeting at 5 o'clock, I came out of the office, started to rain. I don't know what's going on in Taipei, the weather. I didn't pay attention. But a typhoon hit.

It was very stormy that night. It was very stormy that night. So by the time I got to the airport, Singapore Airlines is terminal. This is kind of creepy. There's nobody around. Most people are not in airport because I think most people in Taipei don't want to take the flight because it was typhoon. They don't even think, they don't even know that the plane's going to take off or not. But I asked Singapore if you're taking off, I'm going to be on a plane.

I need to go back. So I was the last person on a plane. This was a Boeing 747, obviously, because it's a transatlantic flight, so a big plane. Yeah. So he started taxiing on the runway pretty rapidly because I think he wanted to beat the wind. Because what were the winds at, like 30, 40 miles an hour? Yeah, I think it's going over. So it's a little bit over 50.

Over 50, yeah. I think the 747400 can still take out on a headwind like 60 miles per hour. Right. Obviously, he just wanted to beat Typhoon. And he want to get out there quick. So we took the out rather quickly, but I was on the plane. I was sitting number, I think 22. I requested a season.

Nobody was next to me, so I was watching People Magazine. And we hit what? The liftoff speed, 165 mile per hour. And my portion of the plane was up in the air. And then I heard this noise like somebody knocking on the door. I'd say, what the heck is that? Then immediately I still leaned to the left. Obviously, something really bad happened.

The last tires of the plane hit the construction equipment and the concrete barrier key where they were doing construction works. They clips the concrete barrier as it's taking off. As it's taken off. And, you know, the... Now you hear everybody scream. and, you know, the plane obviously came down. And I was in the front of the plane came down.

And so I lift my feet out, my hand up. That was my crash position. And the moment, right after I looked on my feet, my hand, the fire came on and east me. Bright, orange fire came on and east me. Apparently, the somehow 60,000 gallon of jet fuel exploded, and the plane was towing to two pieces right where the fuselage was. And the fire came underneath me. And once it hit the wall, I thought, okay, this is it.

I'm going to get burned. But the fire disappeared right away. Because I think the fire burned up all the oxygen in the pseudo explosion. It sucked all the oxygen away from the plane. I mean, the images of the aftermath are shocking. I mean, it was ripped in half, and you were in the front half of the plane. 96 people survived, 83 people were killed in that flight. And you, I mean, you, I can't even imagine what that was like,

but you, when it stopped, when you could leave your seat and get out. out. What do you remember? Well, the fire came underneath me and the fire disappeared. Immediately, I couldn't breathe. No oxygen, yeah. No, no oxygen. The first thing was, my mind was, I'm dead. And immediately, you know, within half a second, I thought, oh, wow, you know, I miss all my family. My mom, my dad, my wife, my daughter, my sister. my brother, everybody. Then

next thing flashed to my mind was oh, okay, I had no more headache and no more stress. I'm kind of relieved because at a time my blood pressure was 160 over 130 constantly because I was under a lot of stress

obviously because I was in debt. So that was, well, it went through my mind in like two seconds. Because you were going to die. Yeah. And that was it. Yeah. So I embark on my C-bail, the plane was still moving. I embark on my C-bill, I say, I'm going to get out of here.

I need to breathe. So I went to the first door on the right. I tried to open that door where the plane was still moving. I couldn't open it. Obviously, because of pressure, pressure of the plane still fully engaged. and now I went to the door on the left when I went from the door on the right to the door on the left the plane stopped

but the last few seconds I had no memory I don't know what happened and the next thing I knew was the door popped open and the ring hit my face the rain the ring hit my face and the door just exploded open

And along with the escape shoot and the fire and the smoke rushing all the plane, it pushed me. I got ejective on the plane. It's unimaginable. And I mean, it's almost a, you know, a cliche, I guess, which is when somebody has a near-death experience, it does often change their life because it's, changes their perspective. And from what I gather, that happened to you. I mean, here you were focused on these stressful things about debt and, and then you go through this experience. And I have to imagine that this was going to fundamentally change the way you saw your life.

Yeah. This is really hard of this crap because I'm, um, I'm super optimistic, always. I didn't really look back that much, honestly. It's kind of unfortunate. It is unfortunate, but I didn't want to think too much on that. I never really digging to my own mind. What really happened? What did it really change me?

How did it really change me? Because I don't think it's going to help me anyway. So I say, just keep on looking forward. What else can you do? what a problem can you solve? So I really focus on that instead. So yeah, did it really change me? I don't know.

I'm still the same person. I guess my question is, did it change what matters to you? I know. I know I really want to come back home. Yeah. That's one thing I really want to do during the fire. I mean, after the plane.

That's something I really, really want to do at that time. I really want to be close to my family. And that matter to me the most versus, you know, anything else. Yeah, you have money, success, a lot of problems to solve, technology. But does it really matter? Yeah. I think the most important thing is love. I kind of differentiate love and passion, I guess.

I went to Singapore Island next day. I said, get me out of here. I want to go back. It was scary for me I mean I can't imagine like getting on a flight after going through that because Yeah it's tough

I mean I don't have a sweaty palm But I had a pretty sweaty palm That flight Yeah The whole flight and uh But that's all right I know I just want to get back

I don't care So you get back Um And eventually you continue with With your work but I guess one of the things that you'd been doing, one of the consulting jobs you'd been doing was with your former customer gateway. I guess they had retail stores in the U.S. at that time, and they wanted to sell other things besides computers because the market was getting competitive and presumably they wanted to build out their inventory, their product offering.

And you suggested that they look into televisions, into plasma televisions, which were, again, in two, 2001, really expensive. I mean, they were like $15,000, $20,000. But I guess your idea was, hey, maybe you guys should get into the plasma TV business, but make them really cheap. Tell me, tell me about your proposal to them. Yeah. So I know high definition TV is going to be a hot item because U.S. government was really pushing for HD TV. But high definition TV wasn't affordable back then. It was, $15,000. Yeah. So there's a problem. The problem is government want to push digital and digital TV are not affordable. And I guess I should point out that the government had required this digital makeover at the time. They wanted televisions to move away from analog to digital video signals, high-deaf.

Yeah. And high-deaf was part of that. And so it required all manufacturers to move from analog televisions with an antenna. essentially to a new type of digital, well, there's digital antennas, but a digital, receiving digital video signals. Yeah. Government want to do that desperately. Their mandate was like 1998, 1999, 2000, 2001, 2000.

They keep on pushing back. Right. Because TV, the Sony and Panasonic of the world and the retailer of the world, don't care. They're making so much money on analog TV. Why should they give away the digital TV, right? They look at digital TV, something belongs to. to rich people.

So knowing the cost of the components, I think I can build this TV and solar for like $3,000. So I was running around asking for money to fund my new project. And I went to a consumer electronic show to talk to my friends at Gateway. And I say, how about investing me?

I want to do TV. At that time, Gateway had like 500 country stores, retail stores. All across the U.S. All across the U.S. And 500 U.S. retail store. The person computers' price point went from like $2,500 average to like $1,000. Right.

So, I mean, at that time, PCs were getting cheaper for consumers, but not, I mean, not much cheaper to make, I guess. So I imagine Gateway was just cutting their profit margin in half. Yeah. So they were suffering because they loved. last 50% of margin to support the stores. So they went to the consumer electronics store. They want to know what else to put in the store.

And so I went to them and say, I want to give you investing me. And so later on and say, how about this? Why don't you help us get into this place under the gateway brand so we can sell at the gateway country stores. So later on, they say, okay, in that case, we'll pay you two people. percent of all the revenue you help out January on TV. And on top of that, we'll pay you $20,000 months. So here I say, okay, I started Visio as a consultant.

And my own money, I started from my second mortgage, my house, $400,000 to fund my business. I hire a few people who's been with me for a long time. And we started the business. So just to just to clarify, you, you, you, you, you, went to Gateway to pitch them an idea on cheaper plasma TVs, but then you started a business called Vizio? I started a business as a V-Inc. V-Inck, okay.

And the brand was called V. The brand in the initial was called V at a time. So actually, my first TV was V. Right. And the business was to make plasma televisions for Gateway under their brand? My original business was selling V TVs. But I had no funding. And Gateway said, help us get into the Gateway brand.

I say, okay, we do Gateway brand instead. So I changed my business plan. I say, I'll do it because you're paying me. So from 2002, 2003, and 2004, the very beginning of the VEE later became VE. We were making money from Gateway. So I went to Asia, set out a factory for them. I went to Korea to get the component for them. I went to the chip manufacturer to procure for them.

Computer chips, yeah. They had everything for them. And they just market the product, which we help them build. You were trying to get the cost of a plasma TV down to under $3,000, which would have been, which you did. And that was kind of crazy. How did you do that? How were you able to get them so much, you know, if they were selling for 15 grand,

how are you able to get the retail price down to $3,000? Yeah, the same thing I have been doing all my life, right? Simplify the supply chain and control costs. The supply chain at a time for Sony or Panasonic is Sony will build a TV in Japan, which is very expensive. They will build everything, right? They build even their own plasma screen. They were vertically integrated, totally vertically integrated.

Completely vertically integrated. So they build it. It's already a little bit more expensive than you should. And they sell it to Sony US and another layer of margin, right? So Sony US has big organization and they do Sony marketing and which is adding additional overhead. And Sony will probably sell it to a distributor. Distributor will add more margin. A distributor will sell to Circuit City at a time.

The Circuit City will market plasma screen is their ultra high end for ultra rich Uber wealthy people. billionaire in Beverly Hill, and they were, it's like white glove service, and they will mark out like 40 points. So what did you do to beat that? Like, what was your strategy? I found the right factory in Taiwan that built a lot cheaper than at a time the labor cost in Japan. And the components are all the same.

At the same time, we're vertically deintegrated, and used that efficiency, and we passed the saving to the consumer. So I want the gateway say, let's do the same thing we done before. You have your own retail store. You don't need a lot of margin. You go direct. When we come back in just a moment, how William's gateway strategy to go direct gets derailed, leading him to start a new business and revive an old idea.

Stay with us. I'm Guy Raz, and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2004, and William is team. teamed up with his old partners at Gateway to sell affordable flat screen TVs. And they're selling well at first, but then. By 2004, Gaby was under a lot of pressure because their PC price went down even further.

Right. And they had pressure to shut down the country stores. Because I think each store at a time is costing like one million dollar a year to run. So for a final store, that's $500 million. So they had to shut down the store. But when you shut down the store, nobody, when people buy TV, they want to see it. Right. So they end up shutting down the store.

Once they shut down the store, they say, we're going to get out of TV. Which meant that you were going to focus on your, on building at your brand, essentially. Yeah, so I try to license the brand from them. They don't want to license to me. And I say, okay, what I do, right? So I came out with our own brand called Vizio, and I wouldn't do the supplier, tried to get them to build TV for me. But just to be clear, Gateway would not, even though they decide to get out of the business entirely, Plasma, they would not license the brand name to you.

Yeah. So you decided, well, I'm just going to come up with a new brand name. Yeah. It's also an interesting time because most televisions in 2002, when you really, really when you launched Vizio, were still big rear projection, right, TVs. They were like huge, heavy things. If you had a flat screen plasma TV, you were a very wealthy person. Yeah. So you start to produce these televisions, but I think you also did something, which proved to be very oppression, which is you kind of deal with Costco, right, that they would sell your televisions.

And did that happen almost immediately that you made that deal with them? Yeah. So, I think 2004, 2005, I used to see. sell computer monitor at Costco. So I know the people a little bit. You had a connection there. You had a connection there. So at a time, Costco had no market share for TVs.

Yeah, people didn't buy that at Costco at the time. They still mainly bought, you know, food. Yeah, because people like Sony and Panasonic, and they don't want to deal with Costco. Right. They give Costco the leftovers because they want to protect their existing dealer with Circuit City and Best Buy. So I want to call and say, you know, you guys are so aggressive in costs

and your biggest frustrations that you cannot get a good brand product for you. What does it carry us? Let me prove to you that we can work together and disrupt the whole TV market. And they're very efficient because at a time, their break-even is around 9.5%. And they don't want to make money on merchandising anyway. They just want to make money on membership fee. Right? The membership fee, yeah.

And merchandising for them is a service for members. And it was the same mentality. I say, I don't need to make a lot of money. I'm pretty small. But I can put together a great screen for you at $2,500. So we did the deal. $2,500 that they would buy the televisions from you. They would buy like $2,400, $0,500 for $2,500.

Wow. So their margins were, wow. And so all of a sudden, people go to Costco and see these flat screen TVs for $2,400. for 2,500 bucks. Yeah, yeah, it was sold like a hot cake. And the government was happy because more people are buying digital TV. And Koso was really happy because all of a sudden there's somebody in the consumer electronics space, I started to grow my business. What's remarkable is that there are parallels between the Vizio story and your previous company, the MAG, you know, the monitor company that really had this rapid rise and then a fall.

But here, I mean, within a few years, you hit 700 million revenue, right? Vizio, I think, by 2007, so just a few years after you launch it, it was the number one HDTV brand in the U.S. It surpassed Samsung at a market share of like 14, you know, and a half percent. And from what I understand, that year, you did about $2 billion in sales. which is remarkable. What I'm wondering is, why didn't the big players see this coming, Samsung, Sony, Panasonic? I mean, why didn't they compete when they saw you selling these TVs at Costco and just selling these TVs like hotcakes? Yeah, a legacy.

I think their legacy relationship, their legacy business model, right? I mean, I pick a partner like Costco. I mean, all they need 9% to break even, you got Silicon City, require, what? 25% to break even. They had to make 25% margins to break even. To break even. And so Costco Clear was a winner. And also, right, we look at inventory control like a hawk versus big company like Sony and Panasonic.

And for them to make a decision, the salesperson got to talk to their U.S. corporate. The U.S. corporate got to talk to their Japanese counterpart and Japanese counterpart got to go up. It was at 25. I don't know how many tiers are reporting. We had one tier. So we believe it's the right thing to do. We'll do it right away. So what about efficiency?

And we have, you know, a few people and they have a lot of people. I read a stat that you claimed it in 2007 that your overhead was 0.7% of sales. That was your overhead cost. And that your competitors, their overhead cost, was 10% of sales or more. Yeah. So your cost were a fraction. Yeah. Now, here's my question, though.

I mean, you saw this happen in a different business before where you catch a wave. There's all its excitement, but then the other competitors come in. So I know you had this strategy of like, let's make cheap TVs. Let's sell them through Costco and then eventually Walmart and Kmart and others. But you must have known in the back of your mind that history could repeat itself that very soon the big players were going to figure out how to make cheap TVs and go out to your customers. Yes, that was a tuition I paid dearly for. When did that start happening? I mean, when did you start seeing some of these competing brands start to come in?

Right around the same time, a lot of people tried to compete in space. A lot of new brand came in. It was a brand called Olivia. Some of my supplier even had their own brand. So I say, okay, well, we better be really efficient, be really smart, we better have better product or better have a better management team. So that means I can't manage everything by myself, by technology anymore. I want a great team of people.

So I start to hire who understand finance better than me. So I started to spend a lot of time putting together a great team. Yeah. I mean, it's interesting because Vizio's sort of, you know, your sales would go up and down and up and down. Like 2007, I mentioned, $2 billion in sales. But then there were some years where the sales were, you know, three billion, but then they would, then some years they went down to one and a half billion. And I know that this is a tough business, right? And so was the outside pressure on your sales really just simply a matter of more competitors?

A lot of competition, right? But we invest heavily, we into the company. I think that kind of set us apart, right? I say this time around, I'm not going to be, money is not the only thing, right? I want to make a business enterprise. So we invest in the brand, we invest in the people. And around 2008, 2009, I think, God, my competitor on Harvard, getting stronger and stronger. Soon later, I got to add more value.

Right. And I guess to add more value, you revived this earlier idea you had about making smart TVs. Because right back in the late 90s, when you try. tried doing that. It didn't work. But now you're talking about 10 years later, the technology is better. So I guess you went forward again, right? Yeah. I went back to my roots. I say, we've got to have a recurrent revenue. I say, how do we do that? We've got to get TV connected to the internet again. I think instead of making money once on TV sales, the same customer probably come back seven years later to replace their TV. I say, oh,

Why don't we just make money every time people turn on the TV? How do we do that? And I started investing to Internet TV in 2009. We started shipping the first Internet TV on the digital TV in 2009. And did that really turn things around? Yeah, actually. And we got Hulu, YouTube, and Netflix. Although it's not 100% of a volume.

People respect that, right? So if you say, well, what is the streaming? Right. We had the first Wi-Fi TV, and we had the first TV was a little keyboard, so you can browse the web. And back then, with Tina, was Yahoo. And they built the first operating system for TV for us. Eventually, I mean, now we're going into 2024. I mean, you guys did eventually go public, but in 2024, you were outright acquired by Walmart.

They bought Vizio for $2.3 billion. And Walmart, it's amazing, I read that according to Walmart, 90% of Americans shop at Walmart every year. Tell me about the decision to go with Walmart because, I mean, you guys had gone public at one time you were valued at $3.5 billion and then the revenue, you know, the value had gone up and down. But, you know, pretty good outcome, $2.3 billion to acquire the business in 2020. It was it kind of a relief for you when that happened when that offer came through? Well, it's bitter and sweet, right? As an entrepreneur, I don't think it's my intention to ever stop solving a world problem for this industry.

I love attacking, making TV better. So when they came to us and they want us to consider this deal, it was a top decision for me. But if I look at what's best for the company, potentially this is big, right? Yeah. This is a lot bigger. What we, I built from,

this is way beyond my entrepreneurship now. We built a platform like, you know, last year we did over $700 million in media. Yeah. This is not something, it's all of my garage anymore. This is an enterprise. Right.

I think one of the happiest moment in my life, I told that to a lot of people. It's like 10 years ago when I walked into Vizio, failed visage was bigger than me. Right. Which is what I want. It's like, I describe that to a lot of people. It's like having a daughter.

I have a daughter, right? It's like someday you're going to walk down the aisle for her, with her, and marry her to somebody else. I mean, it's sad. It's not your girl anymore, right? But it's actually great because that's the outcome you want. You want, you want her to continue her own legacy. You want her to sell her home family.

You want her to create her own chasing after her dream. So I couldn't find a better partner at Walmart to do that because they reached 90% of America. When you think about, you know, what you built and what you achieved and everything that happened. I mean, how much of your success do you attribute to the work you put in? And how much do you think has to do with just getting lucky? You know, okay, you need to define being lucky Because I was real unlucky on the plane Yeah

I was really unlucky when I lost my first millions of dollars on my first business I was very unlucky when I had a great idea On connected TV, smart TV, but I was way ahead of time So I think my definition is lucky Always worry more about other people Surrounded you than yourself I think the locks doesn't drop out of sky.

You can't stay at home and be lucky. But locks is given to you by people around you. And sometimes you never know who's going to help you. I wasn't lucky enough because I didn't hire good enough back 20, 30 years ago. But now I surround myself. It's very, very critical, very smart business people, a lot smarter than me. I'm lucky. Yeah.

Because I have done. That's William Wong, founder and CEO of Visio. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And please sign up for my newsletter at gairoz.com or on Substack. This episode was produced by J.C. Howard with music composed by Routteen Arablewe. It was edited by Neva Grant with research help from Alex Chung.

Our audio engineers were Robert Rodriguez and Maggie Luthor. Our production staff also includes Catherine Seifer, Iman Mani, Casey Herman, Sam Paulson, Chris Messini, Carrie Thompson, John Isabella, and Elaine Coates. I'm Guy Raz, and you've been listening to How I Built This.