Black Monday

Co-Founder And CEO

Kingston Technology

How could anything positive come out of the October 19, 1987, stock market crash? Well, if you’re John Tu along with partner David Sun, it is certainly possible to turn a terrible negative circumstance into a very positive one. Their 500-plus employees of computer memory leader Kingston Technology are certainly grateful they did.

“I sometimes think back to my childhood and it was real tough,” recalls John about his early years. “I always felt that I was different, but I could not tell what was the difference. Don’t worry that you have to be like someone else. You must be different. You must have your own identity.”

Tu was born in Chungking, China, while the family later moved to Taiwan. In the 1950’s, John started rebelling with rock-and-roll. He really liked Elvis. He felt Elvis was so different from everyone else. His mother encouraged him to play the guitar if that was what he really wanted to do and for the first time he felt that it was OK to be different.

John remembers early on, “I was not very successful in school. That’s why I had to leave the country. I just didn’t fit into the system. That’s why I had to leave home and go far away and never know if I was going to come back.”

Tu moved to Germany and worked in his uncle’s Chinese restaurant. Immediately, he found that was not what he wanted to do. John didn’t want to be a Chinese cook all his life. He became an apprentice welder and endured many years as a servant to his blue-collar superiors. As a foreigner, he was at their disposal. They would kid him, and say, “Hey Tu, you came here because you didn’t have anything to eat in your country, is that right? Hey Tu, go get us a six pack of beer.”

“I tried very softly to cope with all that. Was it bad? Yes, it was very bad. Was it good? I think what I learned was how to cope with the tough times. That gave me a lot of mental strength for the future to go forward. I had to look at the big picture and look forward,” reflects Tu.

“I later came to America, to New York. It was such a good feeling. I never felt at any moment that I was an outsider. This is what makes me feel so great,” radiates John. “I am accepted. I’m one of here and that’s the greatest feeling. This is the country for me. Absolutely.”

In 1972, John moved to Arizona and stayed with his sister. He opened a small gift shop and imported gift items from Taiwan. He recalls, “At the end of the year I had sold everything but had very little profit. I found that my biggest expense was the rent, so I decided I wanted to be a landlord. Being a landlord is a good business. To my amazement I learned that you only had to put down 10 - 15% and that the rest, someone will finance it. So I bought two lots and the timing was very good. That became my starting point in business.”

Soon something was missing, and that was the culture, so he moved to Southern California. It was there that he met his business partner, David Sun, who was working for a computer company during the time the personal computer was just coming out. “We were very simple minded,” laughs Tu. “We decided to start our own business. I set up a single phone line in my garage and I put a little advertising in a trade magazine advertising the first product David had designed.”

John recalls, “Then one day we received an inquiry from Digital Equipment Corporation. They wanted to meet us. We rushed to rent out a tiny office we could invite them to. We had all of our relatives come over and say they were sales, marketing, production, and so on. We had only four chairs and they brought eight or nine people. I had to go next door to borrow some chairs. For the next two or three days they checked us out very thoroughly. Eventually, they made us an offer for $250,000 for a product design for a much higher density memory.”

“At that time, that was an astronomical number. This deal gave us credibility. We later built the business up over the years and then AST made us an offer for $5 million, or something like that to buy us out. We took it.” Tu recalls from the early years.

“David and I were now very comfortable and after taxes were millionaires as a result of the sale. We had a friend of ours invest some of our money in the stock market and from the beginning did well from our investments. Then on October 19, 1987, the big crash, Black Monday, we found out that we had lost everything in the stock market,” Tu recalls.

“The day the market crashed was the beginning of our American Dream. Think about it. Had we not lost everything I guarantee you that there may not be a Kingston Technology,” stresses John. “The wisdom here is, when you have gain, you will always have loss. The Chinese, the Orientals, believe in the so-called yin and the yang. Yin is dark, yang is bright, meaning there is always another side of things.”

So, how did Kingston Technology grow into a company approaching two billion dollars in sales with over 500 employees in less than ten years? Tu tells us, “It was gradual, little by little. We cultivated our culture. We are all family here. The reason that we are so successful is that we have the right people that make it happen. As long as you have harmony, everybody wins.”

Tu walks his talk, along with partner David Sun. At their December Christmas party in 1996, the two partners stunned their employees with a $100 million token of appreciation to be split between their over 500 employees. After the sale of 80% of Kingston Technology to a Japanese company, Softbank for $1.5 billion, the partners decided it was the loyal employees who helped build the company and they should certainly share in the rewards of their dedicated work.

“There is no other country in the world like America. I can guarantee that. I’ve lived in Europe, Asia and the United States. Our free enterprise system is the best in the world,” believes Tu. So what does success mean to John Tu, a caring, generous man who Forbes Magazine listed as one of America’s richest citizens with a net worth of $600 million? “I often tell people, you know, I think in one’s lifetime if you have just touched someone, one person, and made a difference, then I think you are already very, very, successful.”

Resource Information:
Kingston Technology