How Now, Ed Zschau?
As Originally Published in Inc. Magazine
How Now, Ed Zschau?
One CEO’s desire to build a company and then run for Senate.
From: Inc., Dec 1988 | By: Hal Plotkin
The last time we saw Ed Zschau, he was riding off into the political sunset, having narrowly lost his bid to unseat Alan Cranston as U.S. Senator from California. Well, no surprise, he’s back. In July, he took over as chairman and CEO of Censtor Corp., a San Jose computer-components manufacturer. His goal: to build Censtor into a major player in the industry in three years, and then run for the Senate again.
Zschau can do it if anybody can. After all, he’s already built one successful company, System Industries Inc., which he founded in 1968 and grew to $60 million. Along the way, he emerged as a star of the American Electronics Association, leading the fight to reduce the capital-gains tax in 1978. That role helped propel him to a congressional seat in 1982. Four years later, he won the Republican nomination for the Senate in a tough primary and came within 104,000 votes of defeating Cranston.
It was, Zschau admits, a nastier campaign than he’d expected. Perhaps the unkindest cut came when public-relations guru Regis McKenna, a Cranston supporter, blasted Zschau’s business credentials at a well-attended press conference. McKenna, who had taken a seat on System Industries’ board after Zschau’s departure, charged that he had left the company in a shambles. Although disputed by his former management team and board, the accusation hurt. “I wasn’t ready for the blocking and tackling,” Zschau says.
Neither was he ready to pack it in. Following the campaign, he became a general partner at Brentwood Associates, a prominent Los Angeles-based venture capital firm. Now, Brentwood and other investors have anted up $31 million to finance development of Censtor’s new perpendicular data-recording technology. That technology, says Zschau, could revolutionize the mass-storage industry by enabling computers to record at higher densities and by vastly increasing the speed at which data can be accessed. “We can change the way computers are designed,” he says. “That’s a race worth running.”
But for Zschau at least, it will only be a warm-up — for the rematch he wants in 1992.