Fribble Monday, January 24, 2000

A Real-Life MBA

By Joseph Mailander (laopera)

I've known him almost the whole time he's been in this country. He escaped Cambodia with his then-pregnant wife in 1979. They were running from the Khmer Rouge. The wife went into labor on the plane, and was rushed to Stanford Medical Center from the San Francisco Airport runway. It wasn't the closest hospital, but it was the nearest one that would take them. These two Cambodians, soon to become immigrants, he age 22 and she age 16, had no money for which to pay for services, and they spoke no English. After the delivery, they made an agreement with the hospital for $35/month until the bill was paid. They also paid a translator $75 to handle the transaction.

He got a job in a donut shop. They needed special training -- they had no idea what the bathroom fixtures were for. Not only did they start off in America saddled with a debt that amounted to more money than they had ever seen in their lives, but they had no idea how to use an apartment.

In three years, he saved enough to buy the donut shop -- Daily Donuts, corner of Franklin and Hillhurst. That's when I first met him -- I went in for coffee and all of a sudden the donut shop was sparkling clean. There was a cheery face behind the counter, who didn't know much English but knew how to greet people in Spanish, Korean, French, English, Vietnamese, Farsi, and Tagali. He was taking no chances. Soon his Spanish help was speaking Vietnamese on the telephone, getting special take-out orders right.

The donut shop did over $1500 a day for five years, coming up to around $3,000 a day --staggering for a donut shop -- by the end of this time. In between, he used the business to take out a loan for the house. Well, not just a house -- he bought the four-unit apartment building he was living in for $200,000 in 1989. When the property came available, he asked a bank how much a day he would have to take in for how long in order to get a $200,000 loan. They said $2,000/day for six months. He persuaded the owner of the property to hold the property off the market until he could buy it. He had the loan in three months.

The building (he still lives in it) started turning a profit against the payments in two years. As soon as it did, he bought another building, this one a little bigger: 21 units. Their son was now entering high school. He was also working at the donut shop, as the mother had been since the son was ten. I once ran into them at a local library. It was three o'clock in the afternoon. The father was helping the son with his homework.

Today, when I passed by Daily Donut, I saw it was closed. I drove up the street to Cafe Los Feliz, and spotted Lennie there (Lennie is a notorious Daily Donut client).

"Hey Lennie! Where's Luk?"

"He's on vacation. His first in 19 years! They closed the shop for two weeks. By the way, he just bought that shopping center at Wilshire and Olympic. $1.9 million! He says he'll be able to retire in two years!"

I thought of one thing immediately: If Luk, who hasn't taken a vacation in his 19 years in America (to be fair, he has sent his wife to visit her family about a dozen times) and is now 41, thinks that he's going to be able to retire in two years, he probably is right on track to do so.

And now I am also thinking something else -- our company tries to recruit what it thinks of as the best and brightest from business schools each year. Why do we think these people -- MBAs -- are our best and brightest business minds? How many Harvard MBAs after 20 years can secure $1.9 million for their own shopping center? How many people on salary can? I know two Stanford MBAs and one Harvard MBA, and Luk -- Luk, who began nineteen years ago with a newborn kid and incredible debt and no English -- is worth more than all three, though you'd never know it to talk to him.