It was back in the year 1990 when I read this book for the first time, at a poolside in Rio de Janeiro (Brazil), with a spectacular view from Joatinga hill down to the then still almost empty Barra da Tijuca beach front.
As of the time I am reading that book again now, which is May 2022, the book and I have really aged a lot. Yet, reading Akio Morita’s story after having spent 30 years in the area of patents and innovation, I still enjoyed it enormously. And that for a very good reason. In hindsight, one can say that Akio Morita is not only a great pioneer of consumer electronics’. Akio Morita created the most successful consumer electronics product ever: the Walkman sold 250 million units – the most successful electronics product in history.
The book “Made in Japan: Akio Morita and Sony” is like a memoir as he not only told the story of the career he had in Sony but also his earlier memory in Japan post WWII, This is fascinating to read as it unveiled a truly different world to the one we are living in today. If there is any text that pairs well with that aspect of Akio Morita’s book then it is Chapter 10 (“Three Wise Men from the West Go to Japan”) of the book “Puritan Gift, the Reclaiming the American Dream Amidst Global Financial Chaos” by Kenneth and William Hopper (from 2007).
Akio Morita’s Life In A Nutshell
But I am deviating. Akio Morita reviews his life from a privileged boyhood through an extraordinarily successful career as a globe-trotting executive. Along the way, he served in Japan’s WW II Navy, he helped Sony achieve a leadership position in consumer electronics, and he played a key role in changing the West’s perception of Japan’s industrial and commercial competence.
If you are not aware that Japan was and still is one of the world’s economic superpowers then let the following numbers sink in. Japan’s economic power was not worth mentioning right after WWII, in 1950. But in 1970, the three world’s largest economies were the USA, the USSR, and Germany, and Japan had rank #4. And Japan was just about to overtake Germany at that time. 15 years later, in 1985, Japan was the second-largest economy in the world, behind the USA. Germany was still on rank #3, followed by France on rank #4. (In a sideline only, the USSR had fallen apart in 1991 and she went into bankruptcy, thereby vanishing from the big picture.)
Akio Morita was part of and embodied that amazing increase of Japan’s economical power after WWII. I have taken the following paragraphs about Morita’s life from a biography that I found on the Internet:
Akio Morita (born 1921), along with a few other entrepreneurs, embodied the postwar recovery and growth of Japanese industry. Morita and Sony Corporation, which he cofounded with Masaru Ibuka, challenge conventional notions about Japan’s “economic miracle.” The energy and inventiveness of small, independent companies like Sony, not keiretsu (industrial conglomerate arrangements) or the Ministry of International Trade and Industry (MITI), were the impetus for Japan’s postwar economic development; their dependable high technology products changed the image of Japanese exports abroad.
I personally believe that this is the only way back to the greatness of the last century: to leverage “the energy and inventiveness of of small, independent companies”. And this is how that worked out for Morita:
Akio Morita was born January 26, 1921, the first son and fifteenth-generation heir to a sake-brewing family in Kosugaya village near Nagoya. Influenced as a boy by his mother’s love of classical music (his family was one of the first to own an RCA Victrola in Japan), Morita developed a keen interest in electronics and sound reproduction. He became so engrossed in his electronic experiments, even building his own ham radio, that he almost flunked out of school; but after concentrating on his studies for a year, he entered the prestigious Eighth Higher School as a physics major. At Osaka Imperial University he assisted his professor in research for the Imperial Japanese Navy. Rather than be drafted, he signed up with the navy to continue his studies. After his graduation in 1944, Lieutenant Morita supervised a special project group of the Aviation Technology Center on thermal guidance weapons and night-vision gunsights. There he met Masaru Ibuka, an electronics engineer 13 years his senior. The two became close friends and eventually cofounded Sony Corporation. After World War II, Morita became a physics professor while working part time in Ibuka’s new telecommunications lab.
In March 1946 Morita and Ibuka established Tokyo Tsushin Kogyo, or Totsuko, with only $500 capital and roughly 20 employees, in a rented office in a burned-out department store in Tokyo.
To find a niche in a market that would be highly competitive when large prewar electronics manufacturers returned, Ibuka decided to produce completely new consumer products. Sony’s most significant development was a high frequency transistor radio that not only established the company’s reputation but also revolutionized the consumer electronics industry. The project, however, was launched following a drawn-out approval by the Ministry of International Trade and Industry (MITI). After Morita reached agreement with Western Electric on the transistor technology in 1953, MITI officials dallied six months before finally remitting the foreign exchange for the licensing fee. Although the relationship between government and industry is one of trust, Morita observed, government often impedes innovative change and developments by excessive intervention and obsolete regulations. By investing six to ten percent of its annual sales in research and development, Sony took the lead in developing new consumer products independently of government help or keiretsu support. A pioneer of products ranging from transistorized radios to solid-state television sets to the Walkman and Discman to VCRs, by 1990 Sony employed more than 100,000 workers and was the world’s leading maker of consumer, non-consumer, industrial, and professional electronics and entertainment software.
That sounds like successful cooperation between an Entrepreneur mind (Akio Morita) and a Technician mind (Masaru Ibuka). You find examples of such work partnerships in all my writings, and how they should be present in all start-ups in order to prevent them from failure
The following aspect is what makes Morita being an Entrepreneur, in the sense of my ongoing preaching:
Morita was a pioneer in marketing as well. His initial failure to sell tape recorders developed in 1950 convinced him that market creation must accompany product development. On his first trip to Europe in 1953, he was deeply impressed and encouraged by the success of N.V. Philips, which had grown from a small light bulb maker in a rural Dutch town into the world’s leading electronics maker. Morita then decided to target the world market, particularly the affluent U.S. market, rather than the poor and congested Japanese domestic market. Recognizing the importance of establishing company identity in the world market, Morita adopted “Sony” (finding a Western root from the Latin sonus, meaning “sound,” and combining it with the English nickname “Sonny”), a name that foreign customers could easily remember, as his company’s trademark in 1955. Totsuko became Sony Corporation in 1958.
We will look further into Morita’s innovation strategy when we are going to analyze his most successful product, the Walkman.
Akio Morita – A Textbook Entrepreneur Mind
But Morita also recognized that a Technician and an Entrepreneur need a Manager in order to be successful.
Morita was often a spokesman for Japanese management. In articulating his own ideas, he emphasized the importance of teamwork and of motivating people by providing challenging work in a family-like environment; engineers in industrial companies particularly need targets for their creativity. Above all, management must treat workers not as tools but as fellow human beings. Morita argued that manufacturing determines the strength of the economy and blamed excessive financial dealings to create paper profits for undermining this base. Morita praised familialism and loyalty to the company as facilitating long-range planning and investment. He often criticized American management’s preoccupation with quarterly profits and dividends and its tendency to postpone investment in equipment.
This is a nice way to describe how Entrepreneurs should treat Technicians: “not as tools but as fellow human beings”. The problem with that, from the perspective of an Entrepreneur is that the engineer’s task in life is to produce a product with no flaws. That is engrained into a Technician mindset. Contrary to the Technician mindset, the Entrepreneur’s task in life is to make a sale. His slogan is this: “Nothing good happens until there is a sale.” That is engrained into an Entrepreneur’s mindset.
Here comes the Manager’s task: is to keep these two people from ripping each other’s eyes out. That must eventually happen because the Technician’s task in life is contrary to the Entrepreneur’s task in life. Please read Michael Gerber’s book “The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It” if you do not believe me or if you want to find out more.
In very short words, one of the most important chapters in Morita’s book for me is when he describes how he developed the Walkman product and morphed it into a successful product.
Here is what I learned from that great Japanese entrepreneur. He adopted the corporate policy of introducing new products that were basically unrated products. Then he let consumers tell the company what improvements they wanted, what features they did not like, and so forth. Then he told his engineers to implement the recommended alterations made by consumers.
This book is a keeper and that is why I bought it as a hardcover version.
The Sony Walkman
Most of my readers will not know what changes the Sony walkman brought into our lives. This is what Wikipeadia writes:
The first Walkman prototype was built from a modified Sony Pressman, a compact cassette recorder designed for journalists and released in 1977.
The metal-cased blue-and-silver Walkman TPS-L2, the world’s first low-cost personal stereo, went on sale in Japan on July 1, 1979, and was sold for around ¥33,000 (or $150.00). Though Sony predicted it would sell about 5,000 units a month, it sold more than 30,000 in the first two months.
The Walkman was followed by a series of international releases; as overseas sales companies objected to the wasei-eigo name, it was sold under several names, including Soundabout in the United States, Freestyle in Australia and Sweden, and Stowaway in the UK. Eventually, in the early 1980’s, Walkman caught on globally and Sony used the name worldwide. The TPS-L2 was introduced in the US in June 1980.
Three Walkman players, variously dating between 1984 and 1991
The 1980’s was the decade of the intensive development of the Walkman lineup. In 1981 Sony released the second Walkman model, the WM-2, which was significantly smaller compared to the TPS-L2 thanks to “inverse” mounting of the power-operated magnetic head and soft-touch buttons. The first model with Dolby noise-reduction system appeared in 1982. The first ultra-compact “cassette-size” Walkman was introduced in 1983, model WM-20, with a telescopic case. This allowed even easier carrying of a Walkman in bags or pockets. The first model with autoreverse was released in 1984.
In October 1985, the WM-101 model was the first in its class with a “gum stick” rechargeable battery. In 1986 Sony presented the first model outfitted with remote control, as well as one with a solar battery (WM-F107).
Within a decade of launch, Sony held a 50% market share in the United States and 46% in Japan.
I had a walkman for some years because I could listen to music when I was riding a motorbike. I perceived that as a luxury. But I never really became a vivid music listener in my life. So I had only two Walkmans, while I know of people who always bought the latest models.
Nevertheless, the Sony Walkman is a marvelous product, and a masterpiece of successful innovation. Morita knew that it wasn’t really ready for prime time when he released it. He didn’t care. He knew that it would be a popular product, and he knew that if the company listened to consumers, they could make it a classic product.
Actually, the key to sales were the small headphones. Morita did not think that large, heavy headphones would be accepted by young users. Another branch of the company had invented small headphones three years earlier. Only that made the Walkman usable.
Testing The Market Today Is Better Than Testing It Tomorrow
This is the teaching that I took away from Morita’s book at a very early time in my life: the right way to study the market is with a specific product that can be very simple. In today’s language, one would call it “minimum viable product” (MVP).
There is an old saying: “Don’t let the goal of perfection keep you from achieving the good.” I agree with it.
When testing the market, Japanese companies want information that is context-specific rather than context-free – that is, data directly relevant to consumer attitudes about the product, or to the way buyers have used or will use specific products, rather than research results that are too remote from actual consumer behavior to be useful.
Harvard Business Review summarizes the Japanese strategy of innovation as follows: when Japanese companies do conduct surveys, they interview consumers who have actually bought or used a product. They do not scrutinize an undifferentiated mass public to learn about general attitudes and values. It is better to launch early than to get things perfect.
Morita describes that principle in-depth in his book. That is why I am recommending it.
I recommend that you adopt the following procedure: it is better to have your project 80% correct and on the market in a year than it is to have the product 90% correct, according to your standards, two years from now.
This is what my 4×4 Innovation is all about: get your first product out within the first priority year after filing your first patent application. And be sure to file your first patent application before you go public, testing the market with a sell-sheet or a simulation video. I have even published an entire course about that patent strategy (click here: https://ip-lawyer-tools.com/course/patent-strategy-basics/).
The rationale for this strategy is that your standards may not be relevant to what consumers want. Let the consumers tell you how to improve the product. Listen to the consumer, not your fears. Don’t pursue perfection when you can start making money with a product that is 80% ready for prime time. Take the money, and listen to the complaints. Only then improve the product.
Martin “Today” Schweiger