Milton Chang: Been There, Done That—Showing Others the Way

Since 1970, when he left NorthropCorporate Research Laboratories tojoin Newport Corp. as the seventh

employee, Milton Chang has participatedin technology incu-bation and “hightech” start-ups. Mil-ton became presidentand CEO of Newportand took the com-pany public. Duringhis career, he has par-ticipated in creatingmore than a dozencompanies without asingle failure, and hehas been promotingentrepreneurshipand sharing his ap-proach and ideas on technology incuba-tion and entrepreneurship with the opticscommunity. Presently, Milton ischairman of Arcturus Engineers andOEpic. And his most recent business ven-ture is Incubic, which is an early-stageventure investment firm with the motto“We Help Entrepreneurs Build GreatCompanies.” He is presently working on abook titled Towards Business.

Milton was born in Shanghai, China,and grew up in Hong Kong. He earned aB.S. with Highest Honors from the Uni-versity of Illinois and M.S. and Ph.D. de-grees in electrical engineering from theCalifornia Institute of Technology. Afterleaving Newport, Milton founded New Fo-cus in 1990. Many of us got our firstglimpse of Milton and his New Focus team

in the pages of their color catalog, circa1990s. Aside from the lasers and elec-tro-optics instrumentation of New Focusand Newport, Milton has incubated a sur-

prisingly wide arrayof technologies .These includediffractive MEMS andMEMS opticalswitches for highspeed optical net-works, WDM trans-mission systems,digital audio produc-tion systems, storagearea networking, in-strumentation forophthalmic anddermatological appli-

cations, and genomic research methodol-ogy. His list of notable public companiesinclude Newport, Uniphase, Gadzoox Net-works, IRIDEX, and New Focus.Well-known private companies includeAgility Communications, Arcturus Engi-neering, and OMM. He has given many tu-torials on being a successful entrepreneurand is presently a distinguished lecturerfor LEOS. He has written a series of busi-ness articles for Laser Focus World (LFW)and currently writes monthly columns forLFW and Photonics Sprectra. He is andhas been highly active in the lasers/op-tics/photonics community and has re-ceived a number of prestigious awardsfrom professional societies. He is a Fellowof OSA and LIA and the current presidentof IEEE LEOS.

I recently had the opportunity to workwith Milton, very briefly, during a LEOSChapters retreat that he designed to im-prove communication between chapterpresidents and LEOS executive staff. Inoted Milton’s method for motivating: helistens and enables people around him.Knowing his very successful track recordin business, I look forward to watchingand learning from Milton during his termas LEOS president.

Diana Huffaker: What are your goalsfor LEOS during your term as president?

Milton Chang: Since one year is not alot of time, my goal is to put in place a pro-cess for the LEOS Executive Office to pro-vide more support to local chapters. I alsowant to rally retired or inactive membersto participate in our activities, possibly tobegin at the local level to make the twogoals synergistic. Members are the energybehind Society activities. Chapters pro-vide a vehicle to reach our members and tobring LEOS benefits to them at a local per-sonal level, to in turn draw them into par-ticipating in our overall activities. So thepurpose of these goals is to, over time, de-rive more energy from members to en-hance LEOS activities—a positivefeedback loop for LEOS to provide moreand/or better services to our members.

You have given a lot of energy to the op-tics community. What have you received?Why do you participate in IEEE/LEOS?

I joined IEEE as a student member in1963, and it has been a wonderfully benefi-

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INSIGHTSInnovator

by Diana Huffaker

cial experience. Not only did Ilearn from reading journals andattending conferences, I alsolearned from fellow members.And in my volunteering activities,I developed friendships and estab-lished an extensive network thathas proven to be an invaluable re-source. These are broadening ex-periences that exposed me tovisions far beyond what I thoughtpossible.

How did you transition from an engi-neer to an executive to an entrepreneur?

Getting a higher education in order tobecome a famous engineer was my earliercareer goal. The turning point came when Ifound I did not like my first job working as aresearch engineer. So, I joined a start-upcompany called Newport as the seventhemployee. So I’ve gone from a technical ca-reer to a career of technical businesses.

How did you learn the ropes?I took on marketing and learned on the

job. Learning is easy when you are inter-ested and motivated. I was with Newportfor 17 years. I worked incredibly longhours, and I had many mentors along theway, mostly outside directors. It was anever ending learning experience; I madesales calls, designed advertisements, anddid everything that needed to be done. Iran the company for about a dozen yearsand left about five years after taking itpublic. Honestly, business is not as hardas engineering.

What are some of the memorable eventsof your career?

Leaving Newport was a tough decision. Ilearned there is “no change, no growth.” Awhole new vista opened up for me withthat big change.

You have been called the “Pied Piper oftechnical talent.” How do you attractgood people to work with you?

No Pied Piper here. The opposite is true; Igo where talents are. I appreciate excellence.Participating in LEOS and OSA exposed meto the best technical talents. I think I added anew degree of freedom to a purely technicalcareer. Almost everyone who joined me

drifted toward the business side and loves it.Frankly, my dream goal is for Incubic to be-come an incubator of technical entrepre-neurs. This is a win-win concept.

Judging from your successful history,you have worked with many good people.What characteristics do you seek-out inyour colleagues?

Natural curiosity and hunger for learn-ing, and knowing what one doesn’t know. Ithink wanting to be a purely technical per-son is wanting to let other people tell youwhat to do. Being broadly knowledgeableis very important in this day and age.

Can you describe your managementstyle? How do you motivate people?

A leader’s role is to provide the banner toalign what everyone in the company does.Finding good people and letting them ownwhat they do is key. Then you don’t need tomicro-manage. If you do not do that, peo-ple around you won’t grow to take on re-sponsibilities to make their own decisions.Then you get bogged down. When you callNew Focus, everyone will tell you that tak-ing care of customers is the first priority.So when a new situation arises, they knowwhat to do on their own to take care of thecustomer. I suppose you can call that en-abling self-actualization.

What do you like about your entrepre-neurial roles?

Since I worked as a researcher for lessthan two years, my professional career isreally building companies. Looking back,what excites me is teaching people and be-ing in a position to enable people to per-form to their maximum capability.Everyone is different, so I am careful notto put an absolute value on what we areable to accomplish.

Since you know the opto-elec-tronics industry very well, I aminterested in your opinion on in-teractions of government withresearch and high-technologybusiness. What is the best role ofthe government in stimulatingtechnology and markets fortechnology?

Only one word, “enabling.”Uniphase, for example, was

started as an R&D partnership with pretaxdollars—you can deduct your investmentin high-tech businesses against your in-come. Now, that’s an efficient use of taxdollars. Had it not been for that littleadded incentive, the company would nothave gotten funded.

How do you believe our nation shouldconduct basic research? Who should payfor it?

Big projects require big sponsors whocan afford to take risks. So, it has to be thegovernment. Even Bell Labs was indi-rectly supported by the governmentthrough allowable profits in a regulatedbusiness. Nothing’s new there. It is up tous to make the public aware that if we arenot ahead in technology, we will wind upcompeting on labor costs with the rest ofthe world—not a very attractive scenario!

In the present research climate, newtechnology is often funneled into thestealth environment of small companiesrather than published. What are futureimplications for university research?

Companies are under pressure to per-form financially. So out of necessity mostcompanies are focusing their research ef-fort more and more on product imple-mentation and process development.Fundamental research and anything of along-term nature are going to be abdi-cated to universities. Opportunitiesabound. Further, a counterbalance to IPsecrecy is more collaboration encouragedby government-funded research. I actu-ally think companies are more secretiveabout things university professors don’tcare much about, like process control andmanufacturing methodology. By the way,statistics point to the opposite. For exam-ple, OFC has something like 25% more

� 50 IEEE CIRCUITS & DEVICES MAGAZINE � MARCH 2002

“A leader’s role is to provide thebanner to align what everyone inthe company does. Finding good

people and letting them own whatthey do is key.”

papers submitted this year overlast year [that’s hardly a negativetrend of being secretive and un-willing to publish].

What is the best way to com-mercialize technology, i.e., incu-bate and bring to market? Whatare the key ingredients?

Technology is very far fromcommercialization as you call it.We’ve been incubating laser-related tech-nology for more than 40 years since its in-vention! Not only do you have to developthe technology, you also have to find ap-plications, develop products, refine theprocess, promote applications, and de-velop the market. Think about all thethings you can do to shorten this naturalcycle as you are developing the technol-ogy. It is a very expensive proposition toshorten the cycle using brute force likethe VCs tried to do in the last few years.The key ingredient is for the technolo-gists to take an interest in business sothey can be smart in shortening the cycle.After all, the inventor of the technology,more than anyone else in the world, iscommitted to the success of the idea.How would it help if a scientist would say,“I think my technology can be used for allof these applications but I have no ideaabout the rest of the steps to successfulcommercialization.”

In general, what is the outlook for theNorth American and worldwide opto-elec-tronics industry in the next five years?

The long-term outlook is great. We are

only at the beginning of a golden era withan incredible opportunity for innovation.And we technical people are supposed tobe the innovator. The current downturn isa correction for excess, not in any way anindication of the long-term outlook.Based on that view, Incubic is bullish andis still investing.

What are the essential components of asuccessful high tech start-up now?

It has always been a function of how en-lightened and motivated are the founders.Everyone can succeed, and people succeedfor different reasons. Knowing one’s ownstrengths and weaknesses and being willingto get help are absolute musts. Too often weare our own worst enemy, right? I also thinkgetting advice from an experienced busi-nessperson is absolutely essential.

What are common mistakes made byengineers trying to start a business?

I can list just a few that are on the topof my list. Most engineers take little in-terest in business and wouldn’t knowwhat to do and have no one to turn towhen they want to start companies.

Then they take the easy way outby teaming up with people likethemselves, or someone whothey think is business geniuswho isn’t. Then they take on in-vestors who gave them thehighest valuation but aren’t ex-perts of the industry they wantto build a business in. A lot ofthe groups that came to us forfunding are so messed up by

their initial actions that it is impossibleto make right.

I suspect that your daily life has beenfull of tedious work and very long hours.What inspires you on a daily basis?

Waking up to a beautiful morning. I likegrowing things. I enjoy gardening, andmaking bonsai when I can find time. Thereis so much beauty in nature.

I believe that ECE Alumni News quotedyou as saying, “Our time on earth is veryshort. We must make the most of it, whichis to leave something meaningful be-hind.” What will be your legacy?

The truth is sooner or later no one willever remember me. Being productive isimportant for me to feel good about my-self. I hope the book I am writing will liveon for scholars to debate and tear apartbecause it is intuitive but not rigorous.People don’t have to remember me, but Ihope they can benefit from their own un-derstanding and interpretation of thebook’s derivatives. CD�

IEEE CIRCUITS & DEVICES MAGAZINE � MARCH 2002 51 �

“Everyone can succeed, and peoplesucceed for different reasons.

Knowing one’s own strengths andweaknesses and being willing to get

help are absolute musts.”