“David just landed and will be here in about 15 minutes,” the Kingston event planner shouted. “He is coming in from China, which is about a 13-hour flight, so he might be tired.”

We had just spent the last 2 days in Huntington Beach with 30 or so folks from around the country. We all flew into California for Kingston’s annual Enterprise Partner Event. Our first 2 days were spent learning about Kingston’s new products and road map with lots of food and drink consumed along the way. This day, we had just finished our tour of Kingston’s Fountain View headquarters. Having just seen a machine shooting memory chips on PCBs like a Gatling gun I already felt sufficiently impressed. The next hour proved that I had not seen anything yet.

“This guy cannot be the main guy. Kingston did $7 billion in revenue last year. This guy is wearing blue jeans with a little stain on them. Where is the sick watch? And what are those Reeboks?” I say to myself.

“Good afternoon everyone, I am David Sun the founder of Kingston, and I am so happy to be meeting all of you,” he says. “I know you are all headed to happy hour and I don’t want to keep you from that but if you have any questions I am happy to answer them. Just keep in mind the more questions you ask, the longer you have to wait for cocktails.” Unassuming, funny, and he keeps buying us drinks… the crowd is instantly enamored with Mr. Sun.

David Sun, Founder of Kingston, telling us how it all happened

Only one question was asked and I will be forever grateful that my new friend Bob, who I shared an airport limo and many drinks with over the previous 48 hours, asks, “So how did you start Kingston? We heard you lost everything once.”

Mr. Sun, proceeds to captivate the 30 of us over the next hour telling us how Kingston came to be by sheer “luck”. Here is my best recollection of the the story he told… (all quotes are paraphrased).

Sometime in the early 80s, David was an engineer in Southern California making $60k a year. The PC market was at its infancy and Huey Lewis was all the rage. David had a couple of good friends fall on hard times having lost their jobs. Wanting to help his buddies, he decided he would make some memory expansion modules in his garage for his friends to sell. So like any layperson, David went to work in his garage with a soldering gun to make some modules. After a few days, David emerged from his garage with 10 expansion modules. Feeling proud, David delivered those 10 modules to his friends figuring they were each worth about $300. If they were able to sell all 10, he would let his friends keep all the money and he would make another batch worth another $3,000. What do you know, a few weeks later and his friends were sold out. Just as he said, David went back to work in his garage and came out with another $3,000 in product. This pattern continues week after week, and after a year or so, David and his friends have managed to do $500,000 in revenue.

Then one day, there is a knock at the door;

Man at door- “I want to buy your company."
David- “You mean the operation I run out of my garage with my wife & 2 buddies?"
Man at door-   “Yes, that is the one."
David- “The company is not for sale."
Man at door- “1 million dollars.” (if only Dr. Evil were around in 1986)
David- “No”
Man at door- “$2 million dollars.”
David- “No”
Man at door- “$6 million dollars.”
David- “Yeah baby." (I don't care, use Austin Powers voice please.")

So David and his friends sell their company for $6 million and each walk away with $1.2 million. Life is good!

The day is October 19th, 1987 otherwise known as Black Monday. The stock market loses 22.6% of its overall value. David’s phone rings.

Man on phone- “Your $1.2 million is now worth $200,000."
David- “But I only invested $30,000, how could I lose $1 million."
Man on phone- “Future Options."
David- “Your fired."

Life is not good. David spends the next week sulking on his couch wondering how this could have happened. The phone rings and it is the call that will forever change David’s life. As it turns out, one of David’s friends just purchased a new PC and wanted to know why the memory on this computer cost twice as much as the memory on his old computer. David having literally nothing else to do, heads over to his friends house to check it out. He looks and looks and can’t even find the memory. Up to that point, memory was mounted flat and directly on the motherboard.

 David- “I don't see any memory. Wait, what are these stick things?" 

David gets the part number off of one of these stick things…TI45789-5. He picks up the phone and calls Texas Instruments… yep, the calculator guys, hoping they can tell him what this part is. No one from Texas Instruments is able to find the part number and David is convinced this must be some new custom technology. David makes one last attempt and calls a friend in Japan with the part number. A few days later, David gets a fax from Japan with TI45789-5 schematics.

David- “Soooo, it's the same old tech, they just put it on a stick".

White Board in Engineering Room at Kingston HQ

A week later David once again emerges from his garage with 10 pieces of memory… but this time on a stick! David sells his first stick of memory for $300. He sells the second stick for $325. The next 2 he asks $350. He asks $400 on the next one. Sold, sold, sold. David sells his 10th stick of memory for $500 and sprints back into his garage. “Solder, solder, solder”, as David nonchalantly puts it to his audience, “and I come out with 10 more sticks of memory.” And that is how it went for a few months. Then one day the phone rings again.

David- “Kingston Technology...how can I help you?”
Best Call Ever Guy- “Hi, this is Apple. Will you be our memory supplier?”
David- “Yes please."

Their first year, Kingston does about $15M in revenue. Their second year about $35M. Third year close to $80M. Today they do roughly $7 BILLION in annual revenue. We are proud to have contributed a few hundred thousand dollars to that figure with purchases of dedicated server memory.

“No engineers were stupid enough to copy what we were doing because we were using old technology. Same technology, just now on a stick… stupid. It was supposed to be temporary technology. Thing is, it’s been temporary for the last 30 years! By the time everyone else figured that out, we had captured the market,” David says with a smile.

Life is fantastic!!!!

Kingston's Headquarters- Fountain View, CA- Mark Samaniego and Steve Eschweiler


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