Janie Tsao

Cofounder of Linksys

• Born: 1953
• Place of Birth: Taiwan

Primary Company/Organization: Linksys

Introduction

Janie Tsao, a Taiwanese immigrant to the United States, cofounded Linksys, which became a leading manufacturer of home networking products with a line of wired and wireless products for consumers and small office or home office users. Tsao and her husband founded Linksys in April 1988 and over the next fifteen years worked to make the company a market leader. Linksys was acquired by Cisco Systems in 2003 for $500 million. Tsao, who had served as vice president of worldwide sales, marketing, and business development for the company, continued in this role for the Linksys division of Cisco until 2007. She was named Entrepreneur of the Year by, Inc.magazine in 2004.

Early Life

Janie Tsao was born in Taiwan in 1953. As a child she was singularly without ambition, dreaming only of becoming a perfect housewife and mother. She attended Tamkang University, where she majored in literature. While she was at Tamkang, she met Victor Tsao, also a student there. The two were a team from their first meeting. Shortly after Tsao graduated in with a BA degree in 1976, she and Victor left for the United States. In 1977, they moved to Chicago, where Victor attended graduate school at the Illinois Institute of Technology. Tsao took a data-processing job at Sears, the beginning of her career in the field of technology. She credits her work experience in the management information system department at Sears, where she remained for eight years, with giving her a solid foundation in business.

Tsao next worked as a systems analyst for TRW Inc.'s Business Credit Department and then as a systems manager at the retailer Carter Hawley Hale Inc., where she was responsible for the programming computer systems at seven retail outlet divisions as well as mainframe systems. She and her husband often talked about their plans for a business of their own. They were particularly interested in ideas that would allow them to use their cultural background as an advantage. In 1988, they decided they were ready. Since her husband was the higher wage earner at the time, the plan was for him to continue with his job, contributing what he could to the family business after hours. Janie resigned from her job and launched DEW International, a company that paired American technology vendors with manufacturers in Taiwan who could make parts that American businesses needed inexpensively.

Life's Work

The Tsaos were working long hours and carefully watching costs at DEW, creating what Victor once described as a high-tech version of a mom-and-pop Chinese restaurant, when one of their Taiwanese manufacturers had an idea for which they needed a US marketer. The manufacturer had invented a means of using telephone wire to extend cables used to connect printers and personal computers (PCs) from the usual 15 feet to 100 feet. The manufacturer offered products that had the capacity to connect multiple PCs to multiple printers. The products sold well, and the Tsaos renamed their company Linksys. By 1991, both Tsao and her husband were working full time at Linksys, and the company moved out of the family garage, eventually settling into a 2,000-square-foot office.

Linksys expanded slowly, moving from selling printer-to-PC connectors to PC-to-PC Ethernet hubs, cards, and cords. Small businesses and households in increasing numbers were eager to connect computers so that they could share data. By 1994, Linksys revenue had reached $6.5 million. The company was still small, but it was healthy. The frugality of the Tsaos was legendary. They often worked 100-hour weeks, negotiating with US vendors by day and Taiwanese manufacturers by night. For the first years the family survived on the $2,000 per month that Tsao drew as vice president of business development and sales, with Victor taking no salary.

The company's sales volume steadily increased. Tsao successfully negotiated with large retailers CompUSA and Computer City to carry Linksys products, and she soon added another thirteen retailers. By 1992, Linksys had acquired a reputation for reliability that made it one of the top-selling brands. The company's biggest break came in 1995, when Microsoft released its Windows 95 operating system with built-in networking functions. Operating networks became simpler for small offices and homes, and the potential market for Linksys increased substantially. Still, growth remained relatively slow until 2000, when Linksys targeted the homes and small businesses that wanted to take advantage of cable and digital subscriber line (DSL) broadband connections by networking computers. Tsao traveled constantly, looking for new customers. She found a lucrative market in Canada, where no one else was supplying routers. In 2001, Linksys launched a system of wireless routers and computer cards. Although it was not first on the market with the wireless transmission that later came to be called Wi-Fi, Linksys had the advantage of name recognition. In 2001, the company's revenue and market share jumped to $346.7 million and 34.2 percent, respectively.

In fall 2002, Cisco Systems, a global leader in networking technology, contacted the Tsaos about acquiring Linksys. Cisco had a large share of big-business networking, but it lacked the small-business and home-office products that Linksys could supply. The Tsaos were not eager to sell, but they were realists. Most of the company's revenue came from the United States and Canada, and the company lacked the capital to expand into other markets. Competitors such as Dell, Hewlett-Packard, and Microsoft were all aiming for the same markets. In March 2003, the deal was announced. Cisco would pay $500 million in stock for the company, which, except for a small employee stock option plan, was owned by the Tsaos and their two sons. The deal included a provision for Linksys to be a separately operating unit and for the Tsaos to remain with the company in executive management roles for two years.

In her role as vice president of worldwide sales, marketing, and business development for the Linksys division of Cisco, Tsao continued to develop business partnerships and sales channels. She directed the adaptation of Linksys for new markets and oversaw the development of the Linksys distribution, e-commerce, and international channel market strategies and programs. She also developed a broadband strategy that included partnerships with AT&T Broadband, Verizon, Charter, AOL, Time Warner, Sprint, Telus, and British Telecom to provide high-speed internet-sharing access via wired or wireless solutions to PC users. In May 2006, after doubling the company's revenue at the time of acquisition, the Tsaos left their executive positions with the Linksys division of Cisco to serve as consultants to Cisco in identifying investment opportunities in its Chinese markets. By then, they had founded Miven Venture Partners, a company providing capital for consumer-related technology start-ups in the areas of information technology, telecommunications, converged media, entertainment, and wireless. They began shifting their attention to Miven in 2007. The company, which is blend of the names of sons Michael and Kevin, invests in private equity, venture capital, hedge funds, real estate, and public securities.

Tsao received numerous awards and recognition throughout her career. She was named Entrepreneur of the Year by the Orange County Business Association in 2000 and was the recipient of a BridgeGate 20 Award in 2002, which recognized leaders who make a measurable difference in the Southern California's information technology and new media communities. In 2004 she was named Entrepreneur of the Year by Inc. magazine. All these awards she shared with her husband. In 2005, however, the Anita Borg Institute for Women and Technology named Janie alone as the recipient of its Women of Vision Award for Leadership, honoring her for her accomplishments as a business owner, innovator, colleague, and mentor. In her acceptance speech, Tsao attributed her success to persistence and passion for her work.

Personal Life

After the Tsaos married they settled in California. The couple's oldest son, Michael, was born in 1984, with Tsao returning to work five weeks after the birth. A second son, Steven, was born two years later.

Tsao noted that she spent so much time working that she had difficulty remembering what she did in her rare free time. She acknowledged a fondness for bookstores and quiet places, particularly those that come with the sound of waves. She also headed the Tsao Family Foundation for philanthropic efforts. Among other projects, she worked with the nonprofit Center for Asian American Media to produce a series of documentaries promoting understanding and communication.

Bibliography

Allen, Kathleen R. "Linksys: The Essence of Opportunity Recognition." Launching New Ventures: An Entrepreneurial Approach. 5th ed. Cincinnati: South-Western, 2008. 477–80. Print.

Boudreau, John. "Technology's Women of Vision." San Jose Mercury News 19 Oct. 2005: n. pag. Print.

Chuang, Tamara. "Taiwan Woman Founded Top Maker of Home-Networking Devices." Orange County Register 27 Nov. 2000: n. pag. Print.

Mount, Ian. "The Entrepreneurs of the Year: Be Fast, Be Frugal, Be Right." Inc. Magazine. Jan. 2004: 64–70. Print.

"Ocean County's Wealthiest 2023: Victor and Janie Tsao." Orange County Business Journal, 25 July 2023, www.ocbj.com/special-report/2023-oc-wealthiest/victor-janie-tsao/. Accessed 6 Mar. 2024.

Sidhu, Inder. Doing Both: How Cisco Captures Today's Profit and Drives Tomorrow's Growth. Upper Saddle River: FT Press, 2010. Print.

"Tsao Family Foundation Blazes Trail for School-Based Mental Health Services." CHOC Foundation, 15 Feb. 2023, foundation.choc.org/healthcare/tsao-family-foundation/. Accessed 6 Mar. 2024.