Kingston's salespeople also keep their ears to the marketplace. When enough chatter surrounds a product Kingston has yet to build, that's the trigger. It can take as little as one week before a new product is ready to ship.
"That's why I tell you all the PC companies get in trouble at one time or another," says Tu. "They don't have anything to offer. All their products work the same. So I say, service, service, service."
Kingston immediately replaces defective orders, no questions asked, drop-shipped directly to the user. The distributor who originally sold the product need not get involved. Those same distributors receive small shipments every day from Kingston, saving them from having to take on a load of product at once. If the market for a particular product falls apart, the distributor is not in the position of having to accept a huge backorder.
John Tu stands up and draws four concentric circles on the board. The innermost circle represents the end-user--everyday folks who buy computers. Surrounding the users are the sellers--stores, mail-order houses. Surrounding them are what Tu calls the service companies--IBM, Compaq, Kingston--who bundle and market products they buy from the fourth circle--manufacturers like Samsung, Seagate and Intel.
"A company like Compaq thinks it is a technology company," says Tu. "I say they have no technology. Open your boxes and tell me what you have. All the computers are the same.
"We are not a technology company, we are a service company. I just package these things and sell them. What I add to the package is service."
Tu's day starts at 6 a.m. He's on the phone to Europe, talking to customers, distributors, small dealers--the street-wise people whose proximity to the market make them invaluable for monitoring trends.
"I cannot imagine a CEO sitting there and having people advise him all day," says Tu. "I must keep in touch with these people every day because they are close to the market, close to the customers. And regarding the big distributors, you need to be available to solve their problems really fast."
Fast is what Kingston is famous for. Kingston fills all orders the day it receives them. The company keeps four days' worth of inventory stocked at all times while other PC companies let the orders pile up, shop around for the cheapest inventory, then ship every four to six weeks.
Kingston's main competitors are the PC companies themselves. "We ship to their customers," says Tu. "Kingston used to be a third party, but now we're just like everybody else."
Well, not exactly like everybody else. A plaque in the lobby of Kingston's main building underscores the tone of the company's success--"Courtesy... Compassion... Modesty... Honesty." Those words may sound like corporate PR but personal relationships made Kingston the standard by which other companies are compared. Mike Burns at Motorola takes Kingston's word to the bank. Al Soni at Samsung swears he's seen David Sun sweeping the floor. Tu used to spend late afternoons helping out in the the shipping department until they broke it to him--he was messing things up more than helping. Since Kingston formed, only 2% of its workers have ever left.
[CONTINUED BELOW]
Perhaps the reason they stay is they have dreams of carrying the Kingston Legend--the famous black Jag. Marketing manager Janet Ruprecht currently keeps the torch lit. Sun sold her the Jag for a cool $1.
Tu's family introduced him to a woman named Mary 13 years ago. After three years, three wedding postponements and plenty of family prodding, the two became man and wife. Presumptive heir to the Tu throne is eight-year-old Jonathan, followed by his four-year-old sister, Selena. But being a billionaire doesn't mean plenty of time for family.
"They don't see me enough," Tu admits. "For that, I feel guilty. I try to keep a balance and my family is very understanding."
Tu usually spends his Saturdays with his own family. On Sundays his filial piety is very much evident as he takes his elderly parents shopping. After that he spends the evening shooting hoops with friends in his Palos Verdes neighborhood.
Retirement isn't looming on the horizon. "Right now I have so much fun," says Tu. "It's because of the relationship with my people. We're just like friends.
"I come in and someone says, 'John, this is the best thing that ever happened in my life and I want to thank you on behalf of my family.' And then I talk to a customer, 'John, I've never done any business with any company like yours. Don't ever change, you guys are just incredible.' And then I talk to a supplier, 'John, you guys have incredible integrity and honesty. We've never seen anyone treat a supplier like you do.'
"I absolutely want to stay involved."
Turned out, Tu was true to his word. After he and Sun sold a
controlling interest to Son in late 1996, Tu stayed on as Kingston's
president and CEO and continued to earn praise from the business
press for keeping his employees the happiest in the
corporate world.
