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February 01, 2011

Company Focus

Wisdom Leads Syntec Nutraceuticals to Success

by Katherine Ponder

Researchers are known for their methodical approach to problem-solving. Direct selling is known for enthusiastic persistence. Combine the two, and you get a company that successfully provides dream fulfillment and outstanding health supplements, with a level-headed approach to product development and expansion. You get Syntec Nutraceuticals.

Inspiration Strikes

Joseph Wang
Joe Wang
Edward Yeh
Edward Yeh

Joe Wang and Ed Yeh were working in a lab as a chemist and microbiologist, respectively. Both were diligently laboring to bring beneficial medicines and products to the public. When pharmaceutical giant Bayer Company bought the smaller lab company that Joe and Ed worked for, things began to change. Ed was a 40-something senior executive and was leading Joe’s team. Early retirements were coming into vogue, along with much reorganization.

Ed says he saw the writing on the wall and realized that his future should be outside of his employers’ dominion. He felt the entrepreneurial call, wanting to find more in life and to be his own boss. Joe felt the same way, trusted Ed, and knew he wanted to come along. They packed up their possessions and families, and left the cold Indiana winters behind for the climatic bliss of California. It also was important that they were on the West Coast, with better access to Asia.

Ed and Joe are Chinese-Americans. Their first foray into running their own business was consulting in the United States and in China. Then they started a business that served water and water treatment / desalination plants by creating a special membrane for water purification. That company was—and still is—thriving.

During this time Joe and Ed were also both beginning to feel their ages. “We looked at each other and thought, ‘Well, we’re getting there,’ ” Ed says. With that realization, the two started to explore the world of nutritional supplements. After sampling and trying dozens of different pills, capsules and bulk powders, they discovered a gaping hole in the product segment. Ninety-four percent of all supplements come only in capsule or tablet form, which can be a problem. “My father will be 101 next year,” Ed says. “He has problems swallowing pills, like a lot of older people.”

“Also, you only have so long to digest a pill or capsule before it moves through your digestive system,” Joe explains. “Once it moves out of the stomach into the intestines, you will not absorb the nutrients.” Furthermore, most of the supplements that the two men evaluated did not have diverse antioxidants and nutrients to counter the effects of poor nutrition and lifestyle, or the constant production of free radicals. All of these factors lead to aging. The two lab specialists found an answer to the challenges.

Capsule packing machine at Syntec’s in-house factory.
Capsule packing machine at Syntec’s in-house factory.

The Synthesis Begins

New information and inspiration in hand, the avid entrepreneurs explored ways to make nutritional supplements effective and easy to take and digest. Their scientific backgrounds quickly yielded an answer—strong, granulated formulations. They created porous, easily absorbed, portable, stable, powerful supplements that are perfect for virtually anyone at any age. The benefits are summed up by one of the company’s guarding mantras: potency, variety and bioavailability. It seemed like a simple solution to make small, one-dose packages of supplements that wouldn’t clump up, could be easily transported, and fit the modern world’s need for convenience.

The two men moved on to creating their new brand. Their first entrepreneurial company had the word “syn” in it, and they wanted to continue this part of the company name in their nascent endeavor. Both knew that technology would be an important part of their business, and that the technology behind creating powder supplements would be a key point of difference. They put the two words together and came up with the name Syntec Nutraceuticals.

Marketing the product was another focus. Through their foray into trying nutritional supplements at pharmacies, nutrition stores and health food shops, Ed and Joe knew that the shelves were very crowded, and it would take strong consumer education to convey their products’ unique advantages. “Most people need to be educated on health supplements,” Joe says. “They don’t know how to eat and live healthfully. Just taking the right supplements can help that.”

Neither founder really knew very much about direct selling, but they knew that personal presentations and interactive conversations would support their need to explain the Syntec difference. “Ed and I were scientists,” Joe says. “We know science, but didn’t know marketing. We know how to research, so that is what we did, and we found direct selling. It is a powerful way to educate people on the value and difference of our products.”

An accomplished field leader from another direct selling company joined the team. Through her leadership, she helped Joe and Ed begin to build their sales force. She supplied the company with experienced field perspectives. The company founders delivered a powerful tool for their future sales representatives—a phrase that succinctly describes their product’s advantage: You are what you absorb.

Adding the next generation to the team also brought in strength and a new dimension. Ed’s son, Billy, had recently graduated from the University of California at Berkeley with a degree in economics. His newly trained abilities to see cause and effect in business, as well as a natural acumen for marketing, complemented existing Syntec capabilities. And Billy understands the power of network marketing: “We are truly delivering a message of hope and opportunity for people, especially in these most dire times.”

Billy became the company’s marketing director, Ed was officially the CEO, and Joe held the title of president. With the team fully assembled, Syntec was launched in 2005. The next hurdle was actually making the product so that customers could absorb the benefits.

In Production

The simple idea of making small, portable packages turned into quite a challenge. There were no manufacturing plants that could accommodate Joe and Ed’s needs. But they were determined. They looked for a way to build their own manufacturing plant, which was possible because the two founders were well-capitalized with their own funding.

A granulator transforms powder into more dissolvable granules.
A granulator transforms powder into more dissolvable granules.

“I read a Wall Street Journal article about small dairy farmers in Wisconsin and Indiana that had been forced to close because of competition from larger farms on the East Coast,” Ed recalls. He saw an opportunity to purchase manufacturing facilities, and wrote to the two states’ governors. The Wisconsin governor’s office responded within less than 24 hours. Ed and a sales manager were soon touring closed factories to select their best option.

The tiny town of Hillsboro, Wisconsin, was chosen as manufacturing headquarters for Syntec Nutraceuticals. It was a bit of a culture shock to the townspeople. “They had never seen an Asian in person before,” Ed says, with amusement. “The plant had been closed for two years, leaving people unemployed. We hired locally, and everyone in the town was so happy.”

Traveling around the world and selecting, crafting and assembling equipment to make the packets was next. The entire process took 18 months. All the while, the core team was creating computer systems, a compensation plan, branding tools and more. Then came education from the school of hard knocks.

“When we first started, the computers crashed in two seconds,” Joe recalls. “We ended up hiring a very good IT director, but it was a big financial hit to take in the early days.” The compensation, literally the financial driver for the company, also had to be revisited.

“We relaunched the compensation system in 2008,” Billy says. “Now we have the right incentives in place and are giving people a platform to succeed. We experienced a 400 percent growth in sales between October of 2009 and October 2010.”

 The Formula Is Complete

Syntec is now a continually growing, flourishing company. The product line has 14 nutritional supplements, almost all granular. They are made of 70 ingredients that bring a wide variety of health benefits to consumers. Brand-new offices in California reinforce the corporate success, and the corporate executives are slowly expanding operations internationally.

Their first step outside of the United States was to go to Taiwan. It was appealing for several reasons: First, it is similar and within reach of the vastly promising market of China. Second, Joe and Ed have family roots on the island nation. Third, the Taiwanese market was receptive to their products. “Our message is the same everywhere,” Ed says. “ ‘Would you rather swallow or drink a supplement?’ The answer is the same across cultures and borders.”

The two founders also looked at South Korea. For its size and population, direct selling is amazingly strong there. Joe and Ed knew that the market would support their products, and they provided the means for sales distributors to pursue leads in the country. The Syntec business in South Korea is prospering.

China also looms large in Syntec’s future. Joe and Ed are planning to establish a foothold in the country by setting up retail stores where people can get product information, education and training. They expect to grow slowly and to gradually build their brand while applying for a direct selling license—which could take several years to earn. Ed and Joe’s background and ability to speak and navigate the Chinese culture certainly are assets. But Ed is quick to point out that the Chinese people are enthusiastic about products from Europe and the United States, and they are more receptive to these products if they are presented by “traditional U.S. spokespeople.” Having a Chinese-American unveil the products may not be as successful as having a traditional American doing it. It’s just one of the tricks of the trade that the founders have mastered.

These founders have mastered a lot more along their journey. They’ve learned to combine their natural scientific expertise with the power of direct marketing for amazing strength. With the company’s growing success and international expansion, Syntec’s future is bright. And that is not a bitter pill to swallow.