Co-Founder, President & CEO, Kingston Technology Company, Inc.
CES 2011 : John Tu, CEO of Kingston, chats to HEXUS
Ever wondered how one of the world's largest memory companies got started? John Tu tells us how he started his...
About John Tu
In a June 2024 interview, John Tu, co-founder and CEO of Kingston Technology, discussed the company's 36-year history and his approach to financial management. Tu stated that he believes 90% of company failures occur because they run out of money, and he advised having a realistic financial plan rather than borrowing large sums from banks. He described Kingston's strategy of not borrowing from banks, saying the company has always tried to buy everything with cash and has rarely taken credit offers, even when banks offered up to $1.2 billion in credit. Tu also recounted the early days of Kingston, recalling a time when the company lost everything and had no money for food or rent. He said that during that period, he told himself "tomorrow is another day" and emphasized the importance of consistency. Reflecting on SoftBank's 1996 purchase of an 80% stake in Kingston, Tu noted that the company gave $100 million in bonuses to employees, stating that "people are most important value the assets without them is nothing."
Transcript (17 segments)
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Interviewer0:09
We're here at CES 2011 with me is John Tu, who's the president of Kingston Technologies. Welcome to Hexus TV, John.
J
John Tu0:15
Thank you very much. Thank you for coming.
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Interviewer0:17
John, can you give me a bit of background about Kingston? Everyone's heard of you in the market. How did the company start?
J
John Tu0:26
We actually, it's very ironic because the company actually started on October 17th, 1987. If you're old enough, then you remember that was the day the American stock market crashed, totally crashed. It is called, still, I think it's Black Monday. And we lost that day. David, my partner, and I, we lost all our savings, all what we owned, to the market crash. And that actually is how we decided to start Kingston Technology. So you woke up that Monday, yes, you had your money in the stock market and it all went wrong, yes, and you thought, 'I know, let's get into the memory market.' It's kind of... it's not that quick. First we lost everything, then we were just totally broke, and then the next few months we decided that we had to do something quickly. And so eventually then we found a way to find out what really the market right now probably is the thing we should be doing, so just memory upgrade for the PCs. 1987, and I guess a lot of luck that we were at the right time, the right place, and sort of like that.
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Interviewer1:59
What were you doing before you did Kingston?
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John Tu2:03
We actually had, David and I, we had another startup company in 1985 or '84, and that was a very short life of that company. But we started and then we sold the company after two years, then we thought life was perfect and happy, you know. But then the tragic happened in '87.
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Interviewer2:33
So over the years, obviously you started off with yourself and your business partner working together. How quickly did Kingston ramp? How quickly did you get the staff on board, and what were the milestones?
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John Tu2:45
It was really a big surprise for both of us that we were struggling just trying to make some money so we could get by. And the idea was that maybe there was a market for memory upgrade for the PCs. PC those days was just at the dawning of the PC era. I think Miniage 2 was considered at that time just like a toy, and the IBM PC was just introduced, and people still didn't take it too seriously. But we said, 'Well, that's a new market. What do they need?' And since we know a little bit about memory technology, and David designs the memory, so he said, 'Okay, maybe we can do that.' And that's how we decided, 'Let's try that.'
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Interviewer3:45
Typically in interviews, people say, 'What's your biggest success been? What's the biggest mistake? What's the main thing you've learned over the years that's actually made you better as a business?'
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John Tu3:56
Well, there are many lessons, this is a long story. But if I have to say what I have learned, it is that to start a business is not that difficult. To have a long-lasting business, it's more difficult to have a long-lasting but successful business. It's very, very difficult. And I attribute our longevity, still here up to 25 years, to the people who work as a team, who day in and day out are thinking about what they should and should not be doing, what is best for the company. So to have that kind of culture of people, you need to recognize how you respect what is the core value that you give to the people so they feel that they are part of this, they feel respected, they feel they come to work every day and feel happy just to come and work there. So I attribute to the people, and that's definitely the success for any organization.
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Interviewer5:34
Excellent. With Kingston, you've got the upgrade market, which you've done tremendously well in, with people being able to upgrade their OEM systems, especially in the corporates. What's Kingston's plans going forward over the next, let's say, five years? Where do you see the company going? The market's changing all the time, so how are you guys going to refocus yourself? Where's the target now?
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John Tu6:01
I don't think we need to refocus ourselves. For 25 years, we have been in the same arena. What we do, our core competence, we are in the technology business, but really what we provide the best is the service, to provide what the customers really need. You asked earlier what is the secret of the success. One of them is definitely just always listen to your customer, what is really that they need, find that niche. And we found out that the market really needs someone who is flexible, someone who can work easily with them. So that's where I think our customers, at early time, they were surprised that some company can be so flexible and easy to work with. And I think that is the secret.
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Interviewer7:36
With the market moving a lot more towards tablet PCs and people buying notebooks as opposed to buying desktops, how do you think that affects Kingston's plans? You talked about being flexible, but surely you're in a market where you've got market trends which are going to dictate as well as customer needs.
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John Tu8:00
Well, it is very true. The trend is as you said, tablet PCs and smartphones and all that. But the core components of all that is still storage. It's still storage. So for us, we started 20 years ago producing the DIMM memory cards, and that is memory, but that is also storage basically. So then flash, then SD, and all that, but all that is still storage. So no matter how the PC format changes, storage will always be needed, and more storage always will be needed. So we believe that we will continue just focus what we do the best, which is storage.
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Interviewer9:05
Okay, I've got one last question for you. Since you guys aren't based in Kingston, Jamaica, why are you called Kingston?
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John Tu9:16
Okay, remember I mentioned that how Kingston got started was through the tragic event. We lost, we basically went broke in one day, and then we had to very quickly get something started. So we actually started doing business, trying to get into this memory upgrade business, without a formal name. So after a couple of months, we realized that we needed a name. People, customers calling and they said, 'What is the name of your company?' And we said, 'Okay.' So then I asked my partner David, 'What do you want to call what we're doing?' And he said, 'I don't care, I'm busy doing this. Why don't you just find a name, pick a name for the company.' I happen to be, I'm very old, in the 1960s there was a group of three young men from USA, and the group was called Kingston Trio. It was kind of a university college group singing. I really liked their style and music. So I had to pick up something quickly, so I said, 'Okay, Kingston.'
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Interviewer10:40
So just to summarize: on the Monday you lost all your money, on the Tuesday you decided to go into memory, the following week you're probably in a bar listening to them playing some music, and you thought, 'You know what, this is all coming together.' So there you have it: the success is lose all your money, have a great idea. So John, thank you for joining us on Hexus TV. They have some insight into Kingston Technologies, and from John, the founder of the company. You've been watching Hexus TV. Check back soon for more from CES 2011.