The Evolution of an Executive who has Successfully Weathered the IT Storm
If you met Rob Cheng, Founder and CEO of PC Pitstop on the street one afternoon, you would probably expect him to say that he has every kind of the latest techno gadget in his home, car, and while he’s on the move. However, Cheng, who divides his time between his homes in Myrtle Beach, S.C., and Rio de Janeiro, Brazil, usually doesn’t even carry a cell phone with him when leaving the house, and when he does, it’s usually one of those “flip” style phones. Totally unassuming that he is, you’d never guess that Cheng founded PC Pitstop more than 10 years ago, with the basis of diagnosing common computer problems.
If you regularly tune into 24-hour news stations such as Fox News, CNN and CNBC, then you have probably seen the commercials for Cheng’s company’s signature product, PC Matic. In fact, the company announced in 2009 that the PC Matic product would also include the collection of all of PC Pitstop’s technologies under one hood and one integrated architecture. Traditionally labeled as strictly a consumer product, Cheng and his company are poised to enter into the B2B (SMB) world with its PC Matic product, which will be unveiled at the SMB Nation Spring Conference in May in Redmond, WA.
Since launching PC Pitstop in 1999, and creating the company’s Web site in 2000, Cheng now has more than 17 virtual employees located throughout the world. What is unique about PC Pitstop he says, is not only the fact that the company is 100% virtual, this business model has served them well since opening their doors as many virtual-based offices, according to Cheng, often don’t last too long. While PC Pitstop has enjoyed its share of success in the last 14 years, it didn’t come from Cheng being able to just sit back and enjoy the fruits of his labor. It took hard work, dedication, tough decisions, and major life changes to get to his current status.
IT Roots Planted
In speaking with Cheng, I wasn’t surprised to hear that technology and engineering are in his blood; he’s always been interested in computers and technology from a young age, and growing up with a father who was a statistician and a mother employed as a systems analyst, these topics were likely daily evening dinner table discussions. That’s why it was undoubtedly no surprise to Cheng’s family, when after graduating from high school outside of Baltimore, MD, that he left home to attend Cornell University to pursue a degree in engineering. Following his graduation from Cornell, Cheng took a job at Texas Instruments, which at the time had a line of mini computers. It was 1983, and the company had just come out with its first personal computer; Cheng was tasked with international requirements planning, which meant he was charged with forecasting everything his department needed to purchase for eventual consumer sale.
During his stay at Texas Instruments, Cheng made his mark by not only enrolling at the University of Texas to obtain his MBA, but also eventually rising to the task of running all of the company’s Latin America division, which he says gave him the opportunity of traveling the world. Even though Cheng, armed with his MBA, a fluent command of Spanish, and a host of locations added to his bucket list of countries visited, was at a high point at Texas Instruments, he was able to capture the ability to go even higher, by moving over to Gateway Computers, which dominated the PC market for much of the 1990s.
The Gateway Game-Changer
Cheng remembers how he first got hooked up with Gateway through a man by the name of Ted Waitt, who at the time, was selling peripherals for Texas Instruments from his farm outside of Sioux City, Iowa. Cheng says he got to know Waitt, and the two spoke often, sharing IT stories and chatting about the industry. Realizing their common bond and shared love of technology, the two clicked, and a couple of years after co-founding Gateway, Waitt asked Cheng to joinhis new company in 1991 (now based in South Dakota), as the director of marketing.
Cheng says that many people thought he was plain “nuts” to leave a high-profile job that he was good at, and allowed him to travel the world, for a “no-name company in the middle-of-nowhere South Dakota.” However, he paid no mind to the nay-sayers, and he took a chance on both Waitt and Gateway “Ted and I became great friends,” Cheng said. “He hired me in January 1991, and I remember I was ‘Badge # 535’ at Gateway. The company was growing extremely fast, and I knew Ted was on to something. At the end, it was just us (Gateway) and Dell, and hundreds of competitors.”
By the time Cheng left Gateway in 1999, he was responsible for consumer sales, support, and marketing worldwide, as well as the company’s profits and losses, which represented 80% of Gateway’s business. At the height of his tenure, he had 10,000 people reporting to him worldwide.During the eight years that he was employed with Gateway, Cheng experienced his share of highs, and it was a fantastic time, he says, to be involved with a company that was growing by the day, on both its products and its stock price. In fact, Cheng’s boss for most of his tenure at Gateway was co-founder Rick Snyder, the now-Governor of Michigan, whom Cheng credits as a mentor during his time at Gateway.
It’s true that all good things must come to an end, and unfortunately for Cheng, things started to change at Gateway, both from a cultural and financial perspective, after Snyder left in 1997. Cheng mentioned part of the reason for his departure was due to the company’s CEO, Jeff Weitzen, who took over after Snyder departed. In a blog post on the PC Pitstop Web site, Cheng is open and to the point regarding Weitzen: “Straight up, he is the reason that I no longer work at Gateway. In some ways, I should thank him because he got rid of me before he destroyed the company and its stock price,” the blog says. “Ted Waitt said shortly after we went public in 1993, ‘Take care of our customers, employees, and suppliers, and the stock price will take care of itself.’ Weitzen in the short period of time managed to turn this simple philosophy on its ear.”
While Cheng wouldn’t elaborate more on Weitzen’s activities during his CEO tenure at Gateway, he did say, that he felt, after eight years, it was the right time for him to move on. So at 38 years old, Cheng packed up his Gateway office, and with $10 million in assets from stock options, he took off to just see the world, without a plan or an itinerary. “After leaving Gateway, I traveled everywhere…Japan, Ireland, Hawaii, and various spots throughout the mainland U.S., to name a few,” he said. “I wanted to spend my time reconnecting with people from various points in my life, and I’m happy to say that I’m still in contact with all of these friends and colleagues today.”
A Mid-Air Revelation
Cheng actually came up with the idea for PC Pitstop when he was in Ann Arbor, Mich., visiting Snyder. After leaving Gateway, (and before assuming his current position as Governor of Michigan) Snyder had opened up a series of VC funds, and Cheng was helping him out. It was during that visit with Snyder that Cheng says he came up with the idea for PC Pitstop. IT was a time, Cheng recalls, when the technical support cost was growing faster than revenue, and there had to be a way to automate the process of diagnosing and repairing a computer.
“I was on the airplane flying back from Michigan, just thinking about things, and this was 1999, so it was the height of the dot.com boom,” he remembers. “I came up with the idea of developing a platform that would change how everything worked…a simple Web site that consumers could log on to where you could get a quick report on things that could quickly and easily diagnose what was wrong with your PC…anything from why it was running slow, to a possible virus.”
Shortly after PC Pitstop’s inception, of which Cheng notes he founded by using his own personal capital, the Web site became very popular with consumers worldwide. Furthermore, according to Cheng, unlike most technology start-ups, there was no need for him to hire a public relations and marketing firm to tout his business. “Right away, PC Pitstop became one of the top 1,000 Web sites in the world at that time,” Cheng says. “Everyone was talking about us in both the technology and mainstream publications. We got tons of traffic from all these mentions in publications…we were everywhere, and we didn’t even have to hire a PR agency to help with this…it was all self-generated.”
Due to his unbridled success on the consumer side with the PC Matic product, Cheng is set to bring his product to market for SMBs this spring for both VARs and MSPs. “If you analyze any SMB that’s out there, the place where there is most value is all in their PCs,” Cheng said. “The place where the MSP really wants to excel is helping these businesses with their PCs, and then they become the person the SMB will trust…the key word here is ‘Trust’.”
Catch this story and more in the 7-3 Issue of the SMB Nation Magazine