CEO of Technodom, Eduard Kim

There is an entrepreneur who became CEO four years after entering a company, and after leaving the company, he became the best inside of the electronic industry of Kazakhstan within seven years. He is Eduard Kim. His success story is not constructed from mere fortune or miracles. It is a story that comes from the sweat and tears of a leader who refused to rest and felt overwhelming joy on moving minds to find contemporary solutions.

Eduard Kim established “Technodom” in 2001 and helped in establishing it as the best electronics distributor company in Kazakhstan. He was also named one of the “50 Most Influential Businessmen in Kazakhstan” by Forbes magazine.
Eduard Kim established “Technodom” in 2001 and helped in establishing it as the best electronics distributor company in Kazakhstan. He was also named one of the “50 Most Influential Businessmen in Kazakhstan” by Forbes magazine.

 

The number is the easiest and most objective measure of a company’s value. In numbers, Technodom is one of the most promising company in Kazakhstan. Technodom currently holds 37 percent of shares in the electronic distribution market in Kazakhstan and has unyieldingly maintained the top position for several years. There are 64 stores with over 6,000 employees in both neighboring countries, Kirghizstan and Kazakhstan.
Eduard Kim, the founder and CEO of Technodom, was ranked 17th among the “Most Influential Businessmen in Kazakhstan” and 28th among the “50 Richest Persons of Kazakhstan,” by the world-renowned magazine Forbes. Although the global financial debacle swept the world in 2008, Technodom overcame the crisis and continued to grow. By this point, I am curious about his leadership and secret of success.

Q. I am wondering why you started your business.
A. I graduated university in 1987 and got a job as an engineer at the National Institute of Geology. It was a nice job that everyone admired, and at first I worked with pride. I could be promoted to a low-level officer from engineer and from the low-level officer, I could be promoted to a researcher and senior employee after that. There were four desks in our office, and after 15 years of hard working, I was able to get a good seat next to a window. I was very sad to think that 15 years of hard work would only change my seat position.
By the end of the 1980s, Gorbachev, the former leader of the Soviet Union, was pushing ahead the Restructuring and Openness Policy. The introduction of the capitalism economic system by the Soviet Union and communist countries in Eastern Europe and Central Asia has brought enormous changes in Kazakhstan. The economic conditions and orders have been completely reversed. As a result, I had quit the national institute and started my own business.

Q. After that, did you enter to the electronic distribution business right away?
A. No. I sold my house at $20,000 and with that money started importing and selling Turkish chocolates. I thought it could be a successful item on my own, but the prices increased so much.
I made a loss only and I got away my hand from this business. Then I worked in Sulpak which was the biggest home appliances store in Kazakhstan as a manager since 1995.

 

Eduard Kim, who was recognized for his integrity and ability while working at Sulpak, became the best CEO in a short four years. He was not managing but was also a respectable owner who owned 51% of the shares. Sulpak continued to grow over the years, but Sulpak owned only two stores. He wanted to expand, but he faced fierce opposition from other shareholders. Eventually, he decided to become independent, left the company and established Technodom in Septemper of 2002.

Q. It would be never easy to get out from the stable job and start new.
A. I invested $30,000 which includes my money and bank loan and opened the first store in Almaty downtown. It was all lacking at first. There was lack of money, lack of experiences, and lack of good managers and staffs. I wanted to borrow more money from the bank but I did not have any collateral and the bank was also skeptical of my business.
I assured myself of my business’ success in some extent. About that time, there were no electronic stores like us in Kazakhstan. I didn’t just go into business, I was also benchmarking famous electronics distributors in Russia. While I was undergoing trial and error, I realized one rule for running electronic stores. The rule was “The store will fail the moment the display stand is empty.” There are many reasons why the display stand is empty. Whether we could not secure stock of the products customer wanted, or we could not get the payment after selling product, or the cost was higher than the profit . . . . So we focused on the Korean companies who could supply products reliably. For now we carry products from not only Korean companies but also from companies in the U.S, Japan, and Europe.

Q. There was a huge change in the electronic industry since the advent of smartphones and the global financial debacle broke out in 2008. It is amazing that Technodom continued to rise even after the changes and crisis.
A. There are many difficulties coming when we run business whether we want it or not. But I’m not afraid of that because I think the company can develop further through these difficulties. If the company doesn’t work because it is difficult, the probability of company failing will increase. Technodom has more chance to survive because it sells products made of the latest technology.
During the 2008 global financial debacle, customers did not buy our products because their financial conditions were bad, and sales dropped sharply. But we had to pay a lot of rent and pay for our employees’ salaries monthly. So we executed restructuring the stores that could not make profits and closed them immediately. And I had to show the banks and the investors that I had no intention of taking out my company’s funds or escaping without paying back my loan. So I had to put all my private house and company assets in the bank as collateral. I was afraid that my children would ask me, “Dad, what if our home is turned over to the creditor?”

Q. How did you overcome that crisis?
A. There are 6,000 employees in Technodom. As I have my family, even the 6,000 employees have their own families whom they should take care of, I couldn’t abandon them. Usually, most entrepreneurs want to do something big in order to make their company bigger, but I instead focused on “the future of my employees and their families that depend on me” rather than doing something big. It was very painful to overcome the crisis but I had to fight it out, and so we were able to profit during the crisis.

Q. Your first were love and responsibility toward your employees rather than seeking wealth.
A. The future of employees and their families depends on whether the company is doing well. So I thought one week or one month ahead and from there I began thinking one year or even years into the future. I learned a lot while working with big companies like Samsung. Those companies are innovative and they always make bigger plans based on their superior technology. As partners, if they were making bigger plans, we also need to be bigger. I finally realized that our employees, partners and the company are connected to each other.

 

The beginning screen of the Technodom's homepage. The population of Kazakhstan is so sensitive to the latest trends in electronic devices such as smartphones. Technodom is the leading company among other electronic distributors in Kazakhstan, and has the potential for future growth. Eduard Kim made a strategy to make Technodom the leader in online electronic shopping malls. He said, “For now, the share of online sales of Technodom is about 3 percent, but it will double every year.”
The beginning screen of the Technodom's homepage. The population of Kazakhstan is so sensitive to the latest trends in electronic devices such as smartphones. Technodom is the leading company among other electronic distributors in Kazakhstan, and has the potential for future growth. Eduard Kim made a strategy to make Technodom the leader in online electronic shopping malls. He said, “For now, the share of online sales of Technodom is about 3 percent, but it will double every year.”

The productivity of Technodom is abreast enough even if it’s compared with any other electronic distributors from Europe or the U.S. The monthly sales of Russian company M.Video per square meter are $558 and the U.S. company Best Buy’s monthly sales are $640. On the other hand, Technodom’s monthly sales per square meter are $885. Nevertheless, Eduard Kim is not contented and is always thinking on how he can develop his company further. “What could happen in the market?” “Is there anything our company should upgrade?” “What should I do to help my employees work more efficiently?” His pet theory is that if he continuously worries then innovation will naturally take place.

Q. Many young people in your country envy your success.
A. I rather envy their youthfulness. Being young means there are more chances to experience new and achieve dreams. When I hire people, I prefer younger people over older people, even if the older people has more experience than the younger. It is because people can be tied too excessively on reality when they believe in their experiences. I keep talking and communicating with young people at work. The average age of employees at Technodom is 23.
There are big changes happening in many enterprises today. People who are talented and have ingenious ideas are treated better in the company than people who worked for 20-30 years. Now, the world’s most famous companies have been founded by young people and have become larger than existing financial companies and big oil companies. Among those young people, some of them have not graduated from college. I envy the young people who were born in an era where they can achieve their any dreams.

Q. An era where the dreams can be true, I can’t agree it readily.
A. My generation grew up in a closed society. Books were the most useful way to get the information that I needed, but I had to go to library to read them. However now, the communication and information channels are opened at any time. As the internet brings the world together, young people can read and learn all the information they want, and are able to receive specialized information from the experts.
In the past, studying hard and getting a good job after graduation, making money, and creating a happy family were the biggest goals of life. However, it’s different now. People don’t think of saving money to buy homes. Instead, they want to experience something new. The greatest value of young people is freedom. You can freely use your creativity to realize your dreams and goals.

Q. Then how do you want your children to grow up?
A. I have a daughter and three sons. My daughter is 31 years old, and she got married and has a son. My sons born after my daughter are 23, 21, 18 years old. I hope they are going to discover their favorite goals and work on that for their life time. Of course studying is necessary, but I think it’s better to find what you exactly want first and study that.
I didn’t force them to go to a good University. If the children study a subject unwillingly for four to five years because of what parents said, they may be able get a job on their area for three to four years, and while they are working, they may realize “I think this is not my way,” and they may find a new way to achieve their dreams. This would waste their time for 10 years. I think it’s a faster way to experience a variety of things and failures for one or two years to find a field that they really enjoy.

Q. What are your three sons currently doing?
A. My first son graduated with a music degree from a university in Los Angeles in the U.S. and he is now a composer. My second son was studying at a university in Boston, but now he is working at Technodom with a goal of studying and finding what kind of business he wants to do. He will go back to Boston in the fall, I hope he will realizes what he wants to do and goes on his way.
The youngest is attending university in California. He said “Father, I don’t know what I should do, but I’ll look for the answer while I am learning the basics at university.” I don’t think of handing the company over to my sons although they don’t want it.

 

Eduard Kim works twice as hard as others with his motto “Business is 30 percent talent and 70 percent effort.” He is enthusiastic to return the profit to society by charity. He also participated in a campaign called “Love Nature, Love Country” to collect batteries, light bulbs and household appliances that were used, spending around $750,000.

Q. I heard that you are paying particular attention to helping single mother?
A. Yes, I take care of mothers who have children at an early age who have given up raising their child. By raising a child, they learn the affection of a mother, families also forgive the mother, and sometimes, the man who left the single mother comes back and forms a family. In addition, I am helping build youth playgrounds in Almaty and remodeling zoos.

Q. What kind of company do you want Technodom to be? Do you have any plans?
A. To make a profit for any companies, there should be clear, understandable goals and long-term strategies. We have master plans of how to run the company over the next 120 years. Most of all, I want to lead a stable company via transparent management practices.

Q. In closing please advice our young Tomorrow magazine readers.
A. First, I hope they remain healthy by exercising steadily. Health is the foundation of future success. When you are doing exercise, It calms you and allows you to overcome difficult work. It would be good to do difficult work as much as possible. Second, I hope they have their own dream. It is fine to have dreams that others may not understand or seem impossible to achieve.

 

Eduard Kim enjoys exercises such as playing tennis, skiing, and cycling. However he always says, “My favorite hobby is business and my favorite playground is my company.” Although there were many times that he faced unpredictable problems, or carried out burdensome projects while he was working, Eduard Kim encourages himself by imagining the thrilling accomplishments that are on their way.

 

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