|Volume 2: No. 05|
I just read about Masayoshi Son, founder and CEO of SOFTBANK in Japan. He grew up in a poor Korean family in Japan. After coming to the U.S, he quizzed out of three years of high school, finished college in two years, and then made $4M while he was at Berkeley. His first $1M was from inventing the Wizard hand-held "organizer" and selling it to Sharp. (He lacked engineering skills, but talked EE professors into doing the work on credit.) Another $1M came from importing and operating Japanese video-game machines, and $2M came from selling another product and company. After returning to Japan, he spent 18 months studying 40 entrepreneurial careers (and no doubt driving his wife crazy) before devoting his life to packaged PC software sales.
He gambled his career and his money on an industry that was almost nonexistent -- just a few games, at the time. He bought a large pavilion at a trade show and gave the space away to software distributors. After making contacts, he convinced Japan's 3rd-largest consumer electronics company, Joshin Denki, to turn over its software contracts and deal exclusively with him -- even though he had no experience and no suppliers of his own, and they knew it. (He said Joshin Denki knew the business better than he, but they were involved in many activities. Within months he would know more than they.) With $10K/year income from that deal, he convinced a banker to loan him $750K -- based on growth potential and force of personality. (About the same time, his only two employees quit after deciding he was crazy. He later hired ex-truck drivers and such, and they gave him incredible loyalty and effort.)
Masayoshi soon became exclusive software supplier to a great many companies, doubling or tripling their business. He also started publishing PC magazines, although they bled him badly in the early months. He now has 570 employees, 15,000 dealer outlets, 40,000 different software items (accounting for 50% of Japan's software sales), 11 PC magazines (reaching 50% of PC owners), six divisions, 5 subsidiaries, and 5 joint ventures -- including networking (with Novell), systems integration, and CAD-CAM design. He thinks big, and has the incredible chutzpah to pull it off.
Masayoshi's company makes $350M per year, after just 10 years in business. He still keeps notes on inventions he'd like to exploit. Here's an example of how he thinks. Japan's NTT lost its monopoly, and several other long-distance carriers began offering cheaper service to certain phone exchanges -- if you dialed the right access code first. It was all too complicated for business users, so they just kept using NTT. Masayoshi obtained 11 patents on a small device that plugs into your phone line and routes each call to the cheapest service. It even downloads new rates without troubling the user. The boxes save companies about 25% on their phone bills, but he doesn't charge them for it! Instead, he gets a kickback from the long-distance companies! They pass along the cost, handle all the billing, and give him lump-sum checks.
Masayoshi Son is now a Japanese citizen, which is an interesting story in its own right. The government wouldn't grant him citizenship under a Korean name, so he got his wife to change her name legally to Son. (No Japanese had ever adopted a Korean name before, but it seemed a reasonable request.) Then he showed that the name Son was listed as a Japanese citizen's name, so the naturalization service permitted him to keep it. [Alan M. Webber, Harvard Business Review, 1/92.]
Much of Son's fortune began with task-specific digital hardware having substantial knowledge bases. Another company in this arena is Franklin Electronic Publishers, which went through bankruptcy but is starting to show a profit. Their electronic dictionaries can handle inflected forms, making it possible (sometimes) to translate short documents in languages you don't speak. One product planned for this summer will incorporate 12Mb of storage. [Richard A. Shaffer, Forbes, 1/20.]
Apple Computer has also announced its entry into this arena. John Sculley has mentioned Personal Digital Assistants: digital handheld devices to look up information, download messages, and communicate with others. [Robert H. Blissmer, EE Times, 1/13.]