#386 Akio Morita: Founder of Sony

**David Senra** (0:00)
Akio is a great example of this maxim that all of History's Greatest Founders studied History's Greatest Founders. Phil Knight, the founder of Nike, studied Akio, as did James Dyson, as did Steve Jobs and Jeff Bezos. And a few months ago, I was spending time with John Mackey, who was the founder of Whole Foods. John also relentlessly studies the great founders that came before him. And it was during one of our conversations that John told me one of the craziest things that anyone has ever said about the podcast. He had listened to over 100 episodes before we met, and he told me that if founders existed when he was young, that Whole Foods would still be an independent company. That since the podcast and all of History's Greatest Founders constantly emphasize the importance of controlling expenses, that he would have actually put more of a priority on it, especially during good times, during boom times. I think it's very natural for a company and for human nature to just not watch your costs as closely because everything is going so well. This is actually something that Andrew Carnegie noticed over 130 years ago. Carnegie would repeat this mantra over and over again. He said, Profits and prices are cyclical subject to any number of transient forces of the marketplace. Costs however, could be strictly controlled and any savings achieved in costs were permanent. This is something that I was talking about with my friend Eric, who's the co-founder and CEO of RAMP. RAMP is the presenting sponsor of this podcast. I've gotten to know all the co-founders of RAMP and I spent a ton of time with them. They all listen to the podcast and they've picked up on the fact that the main theme from the podcast is on the importance of watching your costs and controlling your spend and how doing so can give you a massive competitive advantage. Akio said that this is something he did naturally, that he was taught that wasting resources was a sin. He starts Sony in a burned out department store in war-torn Tokyo. They actually have to buy the materials they need to make their first products on the black market. They had very little funding and so they were forced to watch every single penny. That is a main theme for Ramp. The reason that Ramp exists is to give you everything you need to control your spend. Ramp gives you everything you need to control your cost. Ramp gives you easy to use corporate cards for your entire team, automated expense reporting and cost control. There is a line in Andrew Carnegie's biography that says cost control became nearly an obsession. Sam Walton believed that this was fundamental to his success in building Walmart. In fact, in his autobiography, Sam wrote, Our money was made by controlling expenses. You can make a lot of different mistakes and still recover if you run an efficient operation, or you can be brilliant and still go out of business if you're too inefficient. Ramp helps you run an efficient organization. Make history's greatest founders proud by going to ramp.com. Go to ramp.com to learn how they can help your business today. That is ramp.com.
Forty years ago, a small group gathered in a burned out department store building in war devastated Tokyo.
Their purpose was to found a new company. Their optimistic goal was to develop the technologies that would help rebuild Japan's economy. In this gathering was a young engineer, Akio Morita, then just 25 years old. Today, that company is one of the most powerful and respected multinational corporations in the world, Sony. And Akio Morita is its outspoken founder. That is an understatement. The Sony story is one of consistently high-quality merchandise and phenomenally successful marketing strategies masterminded by Morita, who realized he would have to create the markets for Sony's unprecedented products. Morita's striking departure from the traditional Japanese business practice of making decisions by committee led to the spectacular success of Sony. So that is an excerpt from the inside cover of the book I want to talk to you about today, which is Made In Japan, Akio Morita, and Sony. This book was published all the way back in 1986
And I did it, I first read it, I don't know, probably five, six years ago, and made a podcast about it. I think it's episode 102 But I recently went to Japan for the first time. And before the trip, during the trip, and then on the way home, I was reading this book about the Japanese, about a bunch of founders, the Japanese electric, electronic industry founders from the 60s and 70s. The book is called We Were Burning. And what is so fascinating is how many founders in that book talked about studying Akio and Sony, and how that influenced them and gave them the confidence to start their own company 20 to 30 years later. And that's actually how I first discovered Akio, because I was reading about Jeff Bezos and Steve Jobs, and they would mention the influence that Akio and Sony had. And you really use them as a model for their own company. So I just want to go through, it's absolutely amazing how influential and how many other founders that have then in turn, you know, influenced millions of other founders. And you can actually track a lot of their ideas back to Akio. So this is something that Jeff Bezos said many, many years ago on what he learned from Akio and how it influenced the building of Amazon. Bezos says, right after World War II, Akio Morita, the guy who founded Sony, made the mission for Sony that they were going to make Japan known for quality. And you have to remember, this was a time when Japan was known for cheap copycat products. And Morita didn't say, we're going to make Sony known for quality. He said, we're going to make Japan known for quality. He chose a mission for Sony that was bigger than Sony. And so when we at Amazon talk about being Earth's most customer-centric company, we have a similar idea in mind. We want other companies to look at Amazon and see us as a standard bearer for obsessive focus on the customer as opposed to obsessive focus on the competitor. Here's what James Dyson, James Dyson wrote as his second autobiography when he was in his seventies. And listen to what he said and what he learned from studying Akio Morita. Think of the Walkman. So the Walkman is one of Sony's most successful products. We'll talk a lot about that. That came from Akio. His own company tried to fight Akio and tell him, no, this is never going to work. It winds up selling like 400 million units. One of the most successful consumer products of all time. And so this is what James Dyson, when he was studying Akio and Sony, what he realized. He goes, think of the Walkman. His company didn't want to do the Walkman because it wouldn't record audio. Akio Morita brought out a tape recorder that didn't record. It played music only. His own company thought it was completely mad. But that is brilliance. That takes balls to say, I'm going to bring out a product that doesn't do what people think it's going to do, but it's going to enlighten their lives. And then Phil Knight, founder of Nike, that's what he said. Like most companies, we at Nike had role models. Sony was one of them. Sony was the apple of its day, profitable, innovative, efficient, and it treated its workers well. And so Steve Jobs was actually the first person I learned about Akio Morita from because he talked about admiring the fact that they didn't make Me Too products, that they charge high prices, but they were the best products in the world. He loved their marketing. He, in fact, the same person, you know how Steve would wear that black turtleneck? He visited Sony and met Akio when he was, when Steve was early on and he loved the uniforms that all the Sony employees wore. And so he asked Akio, like who designed these? I think the guy's name is Izzy Miyake or something like that. And so Izzy's the one that designed Steve's black turtleneck that, you know, he made famous, he had like 100 in his closet, he'd wear it every day. But there is one funny story I read in a Steve Jobs story. And then I'm going to jump into Akio's story, because it's unbelievable how Sony starts, you know, after the devastation, literally the lowest point in probably Japanese history, right after the atomic bomb is dropped and the war ends. But Steve Jobs, when he was building the iMac, he was coming up with a name, he didn't have a name. And so he was walking around, he's like, you know what, we're going to call it Mac Man, because he was so inspired by Akio's product, Walkman. And so everybody around Steve was like, this is a terrible idea, please don't do this. And so eventually, you know, he corrected course on that and picked iMac, which again is a much more elegant and better name, but I just thought it was really fascinating. So I want to start, it's very fascinating where the book is published in 1986, 40 years after World War II. And yet, where does Akio choose to start his life story, to tell his autobiography at this time? I think he's in his late 60s when he writes this book. And he decides to start it with his response to hearing about the atomic bomb dropped in Hiroshima. And at the time, he's in the Navy. He had already graduated with a physics degree. And we're gonna see a couple of things here that's gonna jump out that's really important that are tied directly to the success of Sony, in my opinion, is the fact that Akio had immense, from a young age, immense self-confidence. So he says, I was having lunch with my Navy colleagues when the incredible news of the atomic bombing of Hiroshima arrived. As a technical officer, just at a college with a degree in physics, I understood what the bomb was and what it meant to Japan and to me. The future had never been more uncertain. Okay, so imagine if you were in issues in your early 20s, you have an understanding because you have a physics degree. What just happened? The fact that Japan has never up until this point lost a war. Most people would be terrified. Listen to his response. And only a young man could be optimistic, yet I had confidence in myself and in my future even then. If you have not listened to the Michael Dell episode I did last week, please listen to it. It might be one of the best episodes that I've ever made. I think it's going to be the most popular episode I've ever made. There's something in Michael Dell's story. Everybody knows the brand name, but they didn't understand the story. It's really resonating with people. And one of my favorite things that Michael Dell said at 19 years old, Akio is not much older here, right? Saying, I don't know why, I was optimistic at the time when complete devastation is around me. We'll get into the details of just the environment that he's building, Sony, it's unbelievable. And yet I had confidence in myself and in my future even then. And so what did Michael Dell say? You know, when he had this argument with his dad, like, what do you want to do with your life? He's like, I want to compete with IBM for my dorm room with a thousand dollars. And Michael Dell said, was I little full of myself at 19? Sure I was. I think you have to be to do anything important. Let's go back to Akio. When I first heard of the atomic attack on Hiroshima, it struck me that American industrial might was even greater than we realized. It was simply overwhelming. I should have been prepared for it. I had seen a film on the construction of the Ford Motor Company, River Rouge Complex in Dearborn, Michigan. Now it's going to sound crazy to Americans today, but at the time Ford actually built, it was the world's largest integrated factory at the time. It spread across 2,000 acres and the facility was able to produce firstly every component for a car, from raw materials to final assembly. And so when he's, I think it was in high school when he was watching videos on what they were able to create in the industrial might that America had back then. And this is the realization that Akio had that kind of terrified him. Japan had no integrated manufacturing like that at the time. I had seen the terrible results of conventional firebombing even before the atomic bomb. I was in Tokyo when the incendiary bombs whipped up a firestorm that killed 100,000 people in a few hours. All of Japan's major industrial cities had been charred wastelands. This is where, again, this is the year after this is when he's going to start Sony. In 1945, you would see depressing heaps of blackened remains. The blackened remains were the homes of literally millions of Japanese.