Phillips’s business, which also sends blueprints of parts to Chinese factories, runs without an information technology (IT) department. Phillips relies entirely on the sophisticated capabilities of NetSuite, an ASP for CRM and enterprise resource planning (ERP). That leaves him free to work on building the business, to work with customers, to develop services with competitive prices, and to manage independent sales reps. The mechanics of the business are already taken care of. Phillips estimates that without NetSuite or a similar ASP, his company would need an IT staff of 5 to 10 people just to handle its current workload. He credits the use of NetSuite with keeping his company at the cutting edge of capabilities—the ASP is constantly upgrading the quality of its offerings.

Before forming China Manufacturing with a partner, Phillips, age 44, had had a lengthy career in the United States and Europe with Seiko Instruments. While there, he held several positions, including general manager for advanced manufacturing technology. Why did such an experienced corporate executive choose to start a go-it-alone venture? “We originally had a plan for a larger, more all-encompassing business, but when we saw how much we would need to give away in raising venture funding, it became less interesting,” he says. So the two partners took the piece of the business that they could build on their own and used their own funds for start-up. In essence they followed the 80/20 rule: They focused on the high-leverage piece of their business idea, which could generate the most value with the least investment. This allowed them to get the business off

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