Speaker 1: Welcome to text Tuff, a production from my Heart Radio.
Speaker 1: Hey there, and welcome to Tech Stuff. I'm your host,
Speaker 1: Jonathan Strickland. I'm an executive producer with I Heart Radio
Speaker 1: and I love all things tech. And you know, guys,
Speaker 1: it has been a while since I have done a
Speaker 1: deep dive on the history of a tech company. And
Speaker 1: that's partly because I've covered, you know, a lot of
Speaker 1: tech companies on this show. And when I think I
Speaker 1: should do a series about such and such a company,
Speaker 1: I'll then go and do a quick search and discover that,
Speaker 1: you know, I already did that. And that's the challenge
Speaker 1: of having a tech podcast that has more than twelve
Speaker 1: hundred episodes in the archives is that often I have
Speaker 1: already covered things that I thought I should cover. But
Speaker 1: one company I have never done a full rundown on
Speaker 1: is Panasonic. Now I've talked about Panasonic and other shows,
Speaker 1: particularly ones about stuff like televisions, but I've never really
Speaker 1: sat down to research the company's history. So we're fixing
Speaker 1: that today now. For me, when I think Pana Sonic,
Speaker 1: I often think about c e S, you know, the
Speaker 1: Consumer Electronics Showcase. And that's because whenever I attended C. E. S.
Speaker 1: Panasonic was one of the companies that always had a
Speaker 1: very large, impressive presence there. Panasonic traditionally has a long
Speaker 1: and comparatively narrow space in the central Hall at C. E. S.
Speaker 1: That would be the central Hall of the Las Vegas
Speaker 1: Convention Center, which has three massive exhibition halls North, Central,
Speaker 1: and South. Now when I say it had a narrow space,
Speaker 1: I just mean that really the space was longer than
Speaker 1: it was wide right. It wasn't a square, It was
Speaker 1: more of a rectangle. Now, the central Hall typically has
Speaker 1: a few other heavy hitters in that space as well.
Speaker 1: In that general exhibition space, Sony has a booth in
Speaker 1: the central hall, Samsung and l G among others. Panasonic
Speaker 1: often has a spectacular stage area. It's just it's one
Speaker 1: of those booths that really grabs your attention as soon
Speaker 1: as it comes into your view. But I had no
Speaker 1: idea how old the company was or what sort of
Speaker 1: things led to it becoming a major player in the
Speaker 1: electronics space. The company's story actually stretches back more than
Speaker 1: a century, though the company has only officially gone by
Speaker 1: the name Pana Sonic since two thousand eight. Before that,
Speaker 1: it was known as the Matsushita Electric Industrial Company. And
Speaker 1: it all begins with a guy named Kotosuke Matsushita and
Speaker 1: his business of producing attachment blugs. You know, we all
Speaker 1: have humble beginnings, I suppose, or most of us. Kanasuke
Speaker 1: was born in eight in Japan, back when Japan was
Speaker 1: still an empire, and his family was fairly well off,
Speaker 1: at least initially it was. Konosuke was the youngest of
Speaker 1: eight siblings. His father was a landowner and one of
Speaker 1: the more influential members of the small community where the
Speaker 1: family lived. But his father invested poorly and he lost
Speaker 1: much of the family's wealth due to speculation gone wrong,
Speaker 1: a theme we find quite often in the world of technology,
Speaker 1: but that's another story. The family moved into a nearby
Speaker 1: city in a small house, and when Konosuke was about
Speaker 1: to graduate elementary school or or the equivalent to elementary school,
Speaker 1: his family apprenticed him to a habachi store in Osaka,
Speaker 1: which required him to leave his family behind. He actually
Speaker 1: had to get on a train and traveled to Osaka
Speaker 1: to work there. He cleaned the shop and he would
Speaker 1: clean the habachi and he was also in charge of
Speaker 1: looking after the shop owners children. But the Habachi shop
Speaker 1: wasn't long for this world and it went out of business.
Speaker 1: Konosuke was able to find new apprenticeships with a store
Speaker 1: that sold an exotic new import from the UK bicycles. Now.
Speaker 1: It was during this apprenticeship that Kinda Suke learned how
Speaker 1: to use metalworking tools and stuff like lathes Kinasuke became
Speaker 1: interested in using tools to craft things, and he spent
Speaker 1: five years in his apprenticeship. He considered actually leaving the
Speaker 1: apprenticeship in order to further his education, but he actually
Speaker 1: got some advice from his father. His father said, Hey,
Speaker 1: you know what, don't worry about education so much. Stick
Speaker 1: to this. You're learning a lot. You're learning about how
Speaker 1: to use these tools, you're learning the craft, you're learning
Speaker 1: about business. Skip the education. You're getting the education you
Speaker 1: need where you are. What you should do is just
Speaker 1: study this until you can have your own business. Then
Speaker 1: you can hire people who have an education. And I
Speaker 1: kind of dig that story. It has a charm to it,
Speaker 1: and it also kind of falls in line with so
Speaker 1: many other entrepreneurs who either didn't finish or never even
Speaker 1: started further education and instead focused on their businesses. It's
Speaker 1: another one of those themes we see in tech now.
Speaker 1: That being said, dropping out of school is not exactly
Speaker 1: a shure fire way to go into, you know, a
Speaker 1: successful business. A lot of other factors have to come
Speaker 1: into play as well, but it is something that we've
Speaker 1: seen a lot of in the tech sphere. In nineteen ten,
Speaker 1: Konosuke joined the Osaka Electric Light Company. He was fifteen
Speaker 1: years old and electricity was just coming to Japan and
Speaker 1: Konosuke was fascinated by it. He was kind of thrown
Speaker 1: into the deep end pretty early on. His first really
Speaker 1: big job was to work on wiring up a theater
Speaker 1: in Osaka, and this was an enormous undertaking. I mean
Speaker 1: you're installing wires in a very large building that has
Speaker 1: never had electricity. The whole project ended up taking half
Speaker 1: a year. Konosuke became a bit of a taskmaster. According
Speaker 1: to the official Pana Sonic History, he led his team
Speaker 1: at age fifteen no less, to work very long hours
Speaker 1: in order to get this job done, and that effort
Speaker 1: took its toll on him. Konosuke's immune system was weakened,
Speaker 1: probably from all the exhaustion, and he actually contracted pneumonia,
Speaker 1: but fortunately he did recover by the time he was
Speaker 1: twenty two, Konosuke was married and had risen to the
Speaker 1: highest level he could at Osaka Light Company in his
Speaker 1: in his division, that was a rank of inspector. That
Speaker 1: was the name of the job title. In his spare time,
Speaker 1: he developed an improved electrical socket, and he attempted to
Speaker 1: convince his boss that this would be a really great investment.
Speaker 1: It would be a great product, people would want it.
Speaker 1: He'd they'd be able to make a bunch and sell
Speaker 1: a bunch, But his boss wasn't convinced, and so on
Speaker 1: June fifteenth, nineteen seventeen, he left to secure job at
Speaker 1: the Osaka Light Company to start his own manufacturing company,
Speaker 1: and he did this despite having next to nothing in savings.
Speaker 1: His workshop, which is being generous, was out of his
Speaker 1: own small home that he was renting now. And a
Speaker 1: lot of stories about startups I talked about how founders
Speaker 1: got started out of a garage. That's another kind of
Speaker 1: common thread, but this is even more humble than that.
Speaker 1: Konosuke's home had dirt floors, and he had convinced two
Speaker 1: other Osaka Electric Light Company co workers to join him
Speaker 1: in his business, and then his wife's brother also signed
Speaker 1: on but the odds were stacked against Konosuke, and by
Speaker 1: the end of nineteen seventeen, poor sales convinced his two
Speaker 1: former co workers from Osaka Electric Light Company to just
Speaker 1: jump ship. That left the business to Konosuke, his wife,
Speaker 1: and his brother in law, and things were pretty grim.
Speaker 1: But then the company received a giant order one thousand
Speaker 1: insulator plates for electric fans, and they were kept afloat.
Speaker 1: Konosuke took that money and immediately put it to work.
Speaker 1: He decided to rent out a two story home and
Speaker 1: move everything in there with the workshop downstairs. He was
Speaker 1: quite the upgrade from the small place he had rented
Speaker 1: with his wife, and he also created a new company
Speaker 1: called Mattsushida Electric Devices Manufacturing Works. This was in nineteen eighteen,
Speaker 1: and it was this company that would eventually, over the
Speaker 1: course of a hundred years, essentially evolve into Panasonic, and
Speaker 1: so the company traces its history officially to nineteen eighteen.
Speaker 1: Nineteen eighteen is also the year that the First World
Speaker 1: War would come to an end. Japan had played an
Speaker 1: important part in World War One. The Empire of Japan
Speaker 1: supported the Allied forces, and the young Japanese manufact tring
Speaker 1: industry had found an eager customer in European countries, which
Speaker 1: had a need for more material to support war efforts.
Speaker 1: Japan was undergoing a bit of an economic boom as
Speaker 1: a result, though this would have other consequences, but all
Speaker 1: that is outside the realm of this episode. My point
Speaker 1: here is that Japan's economic, social, and entrepreneurial situations we're
Speaker 1: all evolving quickly. The rapid expansion created a challenge for Konsuke.
Speaker 1: Entrepreneurs were establishing new factories every single day, and those
Speaker 1: factories needed employees. And so while he was trying to
Speaker 1: grow his business and higher on new workers to fulfill
Speaker 1: bigger and bigger orders, it was also becoming difficult to
Speaker 1: hold onto those employees. Because new businesses would open up,
Speaker 1: they would offer more competitive wages to fill out their
Speaker 1: own workforces, and so employees would often shift from one
Speaker 1: job to the next. It reminds me a lot of
Speaker 1: the early days of the dot com boom, where people
Speaker 1: were jumping ship left and right from one company to
Speaker 1: the next, getting more stock options and all that kind
Speaker 1: of mess. Konosuke took some unusual steps to build employee
Speaker 1: loyalty and trust. He including forming an internal work organization
Speaker 1: called hoichi Kai, which means one step society. He and
Speaker 1: his twenty seven employees were all members of this society,
Speaker 1: and they would engage in different recreational activities such as sports.
Speaker 1: He would also teach anyone in his company who was
Speaker 1: interested that the trade secrets of how they made stuff
Speaker 1: like insulating material that was a trade secret of his company,
Speaker 1: and typically companies at the time would keep that secret
Speaker 1: to maybe one or two special employees, but Konosuke wanted
Speaker 1: to build trust, so he shared it with anyone who
Speaker 1: was willing to learn. Kona Suke also designed a two
Speaker 1: way socket as well as an attachment plug and began
Speaker 1: to manufact acture and sell them out of his shop.
Speaker 1: Electricity was becoming a more common utility in Japan, and
Speaker 1: Kona Sukes products were in great demand. He had a
Speaker 1: reputation for selling reliable components at a reasonable price. By
Speaker 1: nineteen twenty two, business had grown enough for Konosuke to
Speaker 1: commission a new factory and office, and he moved operations
Speaker 1: out of his own home for the first time, so
Speaker 1: now he was in an actual space. He was running
Speaker 1: specifically for it to be a manufacturing center, and he
Speaker 1: kept on hiring people. This whole time too, and he
Speaker 1: also expanded operations. He established a sales team in Tokyo
Speaker 1: so that he could get his products into more wholesalers. Unfortunately,
Speaker 1: in September nineteen three, Tokyo and the surrounding area, including
Speaker 1: the port of Yokohama, were devastated by a massive earthquake,
Speaker 1: and there's the destruction was almost total in certain parts
Speaker 1: of Tokyo. It was unprecedented. Kona Suke's two sales representatives
Speaker 1: were are unharmed, but they had nowhere to work anymore,
Speaker 1: so they returned to Osaka. It would take another year
Speaker 1: for the company to re establish its sales presence in Tokyo. Meanwhile,
Speaker 1: back in Osaka, Konasuke designed a new product that took
Speaker 1: some effort to sell. Like many in Japan, Konasuke used
Speaker 1: a bicycle to get around, and he also worked really
Speaker 1: long hours. But he had a heck of a time
Speaker 1: riding his bicycle at night. The bike lamps at the
Speaker 1: time were mostly either oil lamps or they were candle lamps.
Speaker 1: These were not always reliable they could snuff out in
Speaker 1: mid ride. There were a few battery operated lamps at
Speaker 1: the time, but they were generally thought of as being
Speaker 1: of poor quality, like not as good as oil or candles,
Speaker 1: and most of those battery operated lamps could only light
Speaker 1: an electric lamp for three hours before you would have
Speaker 1: to replace the batteries, so they were seen as wasteful
Speaker 1: and impractical. Konasuke wanted to create an improved battery powered
Speaker 1: bicycle lamp, so he got to work on it. Ultimately,
Speaker 1: he designed a lamp shaped kind of like a bullet,
Speaker 1: and it would hold three batteries and it lit an
Speaker 1: electric bulb for up to forty hours between thirty and
Speaker 1: forty He took his invention to wholesalers to try and
Speaker 1: convince them to order the lamp, but the reputation of
Speaker 1: battery powered lamps in general was so poor that no
Speaker 1: one really gave him the time of day. They said,
Speaker 1: we can't sell these things anyway, no way he wants them,
Speaker 1: So he decided to take a different approach. He went
Speaker 1: to bicycle shops and he provided lamps to the owners
Speaker 1: to for free for them to to try out, to test,
Speaker 1: and then to to talk him up if they liked them,
Speaker 1: and they started to place orders directly with him through
Speaker 1: his company, so if they liked the lamps. They would
Speaker 1: just order more from him, and then before long the
Speaker 1: wholesaler said, oh wait a minute, maybe we're a little
Speaker 1: too hasty. So they came back around and started signing deals.
Speaker 1: So how does a battery operated lamp work? I mean,
Speaker 1: this is tech stuff, after all, so I have to
Speaker 1: explain how a couple of pieces of tech work in
Speaker 1: the context of history. Right, And this is a really
Speaker 1: simple thing. This is one of the easiest circuits to understand.
Speaker 1: So you've got your source of electricity. In this case,
Speaker 1: it's three batteries that are providing the electricity. And that
Speaker 1: also means that the current we're going to talk about
Speaker 1: is direct current, meaning the current is always flowing in
Speaker 1: the same direction. The circuit is essentially a one way street,
Speaker 1: and as opposed to something like alternating current. Batteries have
Speaker 1: a negative terminal and a positive terminal, and that means
Speaker 1: that between the negative and the positive not physically between
Speaker 1: in the battery itself, but rather the difference in that
Speaker 1: negative and positive means there's an electric potential between the two,
Speaker 1: or voltage. So if you were to attach a conductive
Speaker 1: path to those two terminals that would allow current to low,
Speaker 1: then current will flow, and we describe current as moving
Speaker 1: from positive to negative. Though you could talk about electricity
Speaker 1: as electrons flowing through a circuit, and in that case
Speaker 1: you're talking about negative to positive. So the flow of
Speaker 1: current is opposite the flow of electrons. Thanks Benjamin Franklin. Now,
Speaker 1: if there's nothing more than a connective path, you know,
Speaker 1: just like copper wire, from one end of the battery
Speaker 1: to the other, the battery is gonna heat up, current's
Speaker 1: gonna flow, and then it'll just keep doing that until
Speaker 1: the battery goes dead, when all the electrochemical processes inside
Speaker 1: the battery slow down because the active elements have all
Speaker 1: been used up. But that would make no sense, there'd
Speaker 1: be no point in doing that. You're just using up
Speaker 1: a battery. So we use batteries to do work. So
Speaker 1: we connect them to circuits, and those circuits have a
Speaker 1: load on them. A load in a circuit is a
Speaker 1: component that consumes electric power, typically so that it'll do
Speaker 1: something right. It's it's a load that typically corresponds with
Speaker 1: some sort of action. Not necessarily, there are components and
Speaker 1: circuits that don't, you know, actively do anything. But it's
Speaker 1: a good rule of thumb. So a lightbulb is an
Speaker 1: electric load. Lightbulbs use electricity to flow through a filament
Speaker 1: that has a fairly high electrical resistance. That means a
Speaker 1: resistance to electricity flowing through that substance. And the electricity
Speaker 1: wants to flow through the filament, it has to go
Speaker 1: through the filament if it wants to get to the
Speaker 1: other end of the circuit, and it really badly wants
Speaker 1: to do that because of that electric potential that voltage.
Speaker 1: So the electricity, assuming that the voltage is high enough
Speaker 1: and the electrical resistance isn't too high, we'll just hike
Speaker 1: up its metaphorical breeches and push through that filament despite
Speaker 1: the electrical resistance. But some of the electricity converts over
Speaker 1: into another form of energy, that of heat, and the
Speaker 1: filament heats up to the point that it incandesses or
Speaker 1: glows with a bright light. And I've talked a lot
Speaker 1: about incandessing in fairly recent episodes, so I won't do
Speaker 1: that again here. Now. One thing I did not see
Speaker 1: while I was researching these bicycle lamps was whether Kona
Speaker 1: Suke had the batteries mounted in series or in parallel. Now,
Speaker 1: if I had to guess, I would say parallel, because
Speaker 1: the two arrangements have different effects. There are different reasons
Speaker 1: why you would do this. Each battery has a particular
Speaker 1: voltage or electric potential between the two terminals. If you
Speaker 1: link batteries in series so that you have one right
Speaker 1: after the other, the the positive terminal on battery A
Speaker 1: is against the negative terminal of battery B, and the
Speaker 1: positive terminal battery B is against the negative terminal battery C.
Speaker 1: Then what you have managed to do is increase the
Speaker 1: overall voltage by using these three batteries in series. So
Speaker 1: and that means you could do a job that requires
Speaker 1: more voltage, a harder job with three batteries and series
Speaker 1: then you would be able to do with a single battery. Now,
Speaker 1: if you mountain batteries in parallel so that the terminals
Speaker 1: of the batteries are all connected to a common conductor,
Speaker 1: so all three positive ends are connected to the same conductor,
Speaker 1: all three negative ends are connected to the same conductor,
Speaker 1: you increase the capacity of the batteries how long they
Speaker 1: can work before you need to replace them. You know,
Speaker 1: you can't do a harder job than one battery can,
Speaker 1: but you can do the same job a single battery can,
Speaker 1: but for longer. Kona Suke had begun to create full
Speaker 1: electronic products, branching out from the components he had been producing,
Speaker 1: and soon it would be off to the races. But
Speaker 1: before I get into that, let's take a quick break.
Speaker 1: Kona Sukes Company signed an agreement with Yamamoto Trade Company
Speaker 1: to sell these bullet shaped lamps under a brand name
Speaker 1: called Excel, very much like the Spreadsheet program. Konosuke found
Speaker 1: the arrangement somewhat vexing, as he had ideas on how
Speaker 1: they should market the lamp, but Yamamoto's president, taken Nobu Yamamoto,
Speaker 1: felt that the lamps were no more than a passing fad,
Speaker 1: and so he shut down those ideas. In when Konosuke
Speaker 1: was thirty two, he introduced a new type of bike lamp.
Speaker 1: This one was square in shape, and he called it
Speaker 1: the National Lamp, and National would become an important brand
Speaker 1: name within the company, not just for lamps, but for
Speaker 1: other products as well. Now, Yamamoto claimed that the marketing
Speaker 1: agreement they had put in place for the Excel lamp
Speaker 1: also applied to the National lamp, and he said, if
Speaker 1: you want to market this, that's fine, but you gotta
Speaker 1: pay me ten thousand yen to get the marketing rights,
Speaker 1: because right now I hold those marketing rights. So Kona
Speaker 1: Suke paid it off and the National brand would be
Speaker 1: under his control and he could market it the way
Speaker 1: he wanted to. The same year, he created a new
Speaker 1: division within his company to produce thermal products, that is,
Speaker 1: electronics that produce a lot of heat, like electric irons
Speaker 1: for ironing clothes. Konosuke saw an opportunity in Japan's The
Speaker 1: electric appliances at that time in Japan were really a luxury,
Speaker 1: and therefore they were also a very small market. Only
Speaker 1: a tiny slice of the overall population of Japan could
Speaker 1: even afford to buy them. Konosuke wanted to take aim
Speaker 1: at a larger market. He wanted to produce lower cost
Speaker 1: appliances for people who weren't ludicrously wealthy, and the first
Speaker 1: product his company made with this goal in mind was
Speaker 1: the National Super Iron. Remember when I said the filaments
Speaker 1: in a lightbulb generate heat due to electrical resistance, and
Speaker 1: then they luminess or in candath, I should say, well,
Speaker 1: an electric iron does a similar thing with heating coils.
Speaker 1: The coils have a high electrical resistance and they heat
Speaker 1: up as current passes through them, and the same thing
Speaker 1: is true for stuff like toasters and electric stovetops, or
Speaker 1: at least the type of electric stove types that have
Speaker 1: the electric coils on them. With irons, the heat from
Speaker 1: the coil typically transfers to something like a base plate,
Speaker 1: and that's the actual surface you use to iron your
Speaker 1: wrinkled clothing. You wouldn't want to use the heating coils themselves,
Speaker 1: you'd probably end up scorching your clothes. Kona Suke put
Speaker 1: a man named Tetsugio Nacao in charge of the new
Speaker 1: electrothermal division, and the goal was to set up a
Speaker 1: mass manufacturing process in order to bring the cost of
Speaker 1: production down on a per unit basis, which means they
Speaker 1: could market the super iron for less money than competing
Speaker 1: irons on the market. The danger was that the company
Speaker 1: could end up producing way more irons then the market
Speaker 1: would support. But Konosuke felt that if price low enough,
Speaker 1: a lot of people in Japan would buy these. They
Speaker 1: just couldn't afford them as they currently stood. But this
Speaker 1: was a big risk. I mean, setting up a mass
Speaker 1: manufacturing facility is complicated and it is expensive. If it
Speaker 1: didn't pay off, his company would have been in a
Speaker 1: really tough position financially. The goal was to sell the
Speaker 1: irons for three point to yen. Now that's a tiny amount, right,
Speaker 1: except that at the time, the average starting salary for
Speaker 1: a teacher in Japan was fifty yen a year, so
Speaker 1: three point two was a significant amount. However, it was
Speaker 1: still lower than the competing products on the market. To
Speaker 1: be able to reach that price, his company was going
Speaker 1: to need to produce ten thousand irons per month, and
Speaker 1: at the time, Kona Suke's company had kind of estimated
Speaker 1: that demand for electric irons was capping out somewhere around
Speaker 1: one hundred thousand units in a year, so that would
Speaker 1: mean Konosuke's company would be producing more supply than the
Speaker 1: demand called for a hundred twenty thousand a year versus
Speaker 1: one hundred thousand, So this was risky, but the gamble
Speaker 1: paid off. The product was a market success, easily justifying
Speaker 1: the investment in the mass manufacturing process and serving as
Speaker 1: a model in Japanese business and manufacturing. By the end
Speaker 1: of nineteen seven, the company was selling an electric foot warmer,
Speaker 1: which used some of the same technology as the company
Speaker 1: had in their irons, and Also, Nico became the head
Speaker 1: of a research and development division, a new R and
Speaker 1: D division within the company, with the goal of working
Speaker 1: on new emerging technologies that could find their way into
Speaker 1: future products. In the early nineteen thirties, radio was coming
Speaker 1: to Japan, but like other electronics, radio sets were really
Speaker 1: expensed of and this wasn't just in Japan. Radios were
Speaker 1: expensive everywhere and often they were enormous pieces of furniture
Speaker 1: because this was before the invention of the transistor, so
Speaker 1: they were using vacuum tubes as amplifiers. Kona Suitcase Company
Speaker 1: developed a three tube radio and he entered the radio
Speaker 1: into a competition that was being held by the Tokyo
Speaker 1: Public Broadcasting System, and the radio set he entered took
Speaker 1: home first prize. Kona Suke also did something fairly remarkable.
Speaker 1: He purchased the rights to two radio patents. Now that's
Speaker 1: not unusual. Companies do this all the time. So sometimes
Speaker 1: companies will, you know, file a patent and get awarded
Speaker 1: a patent. Sometimes companies will license patents. Sometimes companies will
Speaker 1: sell patents, and the patent can act just like any
Speaker 1: other piece of property. It will pass from one person
Speaker 1: to the next, so even though Kona suit Case Company
Speaker 1: didn't come up with the patents themselves. By purchasing them,
Speaker 1: it was as if they were the ones who had
Speaker 1: written those patents in the first place. But here's the
Speaker 1: remarkable part of it. He then released those two patents
Speaker 1: to the public domain. Now that is unusual, and he
Speaker 1: said that his goal was to encourage growth in the
Speaker 1: radio industry in Japan. And in many ways, this kind
Speaker 1: of hearkens back to the days when Konasuke would supply
Speaker 1: bicycle shops with free lamps to help test and promote
Speaker 1: the technology. In nineteen thirty two, Konosuke established the company's
Speaker 1: guiding principle, the one that would hold sway during his leadership.
Speaker 1: And it's kind of astonishing, particularly if we view it
Speaker 1: through the lens of a post Jack Welch world of business.
Speaker 1: And of course, we should retain our ability to think
Speaker 1: critically and consider that this guiding principle might not always
Speaker 1: be applied, or it might only be applied at a
Speaker 1: surface or superficial level. But hey, I hear you saying,
Speaker 1: what the heck was this guiding principle? Well, I'm gonna
Speaker 1: quote Konosuke. According to Panasonic's own history, and this is
Speaker 1: what he said. Quote. The mission of a manufacturer is
Speaker 1: to overcome poverty by producing an abundant supply of goods.
Speaker 1: Even though water can be considered a product, no one
Speaker 1: objects if a passer by drinks from a roadside tap.
Speaker 1: That is because the supply of water is plentiful and
Speaker 1: the price is low. Our mission as a manufacturer is
Speaker 1: to create material abundance by providing goods as plentifully and
Speaker 1: inexpensively as tap water. This is how we can banish poverty,
Speaker 1: bring happiness to people's lives, and make this world a
Speaker 1: better place. End quote. Now, I don't know about you,
Speaker 1: but to me, there's a pretty big gap in his
Speaker 1: philosophy and what we would see in business in general
Speaker 1: around the nineteen eighties, the nineteen nineties and later, with
Speaker 1: companies turning towards focusing on shareholder value you above everything else.
Speaker 1: And again, I don't want to go so far as
Speaker 1: to claim that Panasonic has kept this idea as the
Speaker 1: central core component of its business practices, but I think
Speaker 1: you know that would be disingenuous. I just I dig
Speaker 1: the idea of using success in order to help others,
Speaker 1: with the ultimate goal of banishing poverty. That's a great goal.
Speaker 1: And that might be because I just watched so much Mr.
Speaker 1: Rogers when I was a kid. So whether or not
Speaker 1: the company succeeded in this or was sincere in this,
Speaker 1: I can't really speak to, but man, I do love
Speaker 1: that philosophy. Anyway, Let's get back to the history. The
Speaker 1: company was growing more complex, and so in nineteen thirty three,
Speaker 1: Konosuke formally organized his company into three branches, each capable
Speaker 1: of doing business as if it were a separate entity.
Speaker 1: One division oversaw batteries, one oversaw radios, and the third
Speaker 1: oversaw electro thermal products. And to those divisions had other
Speaker 1: stuff that they handled as well, But the goal was
Speaker 1: to make the head of each division have the authority
Speaker 1: and investment to make the right decisions for their particular branch.
Speaker 1: Kanasuke recognized that his company as a whole had really
Speaker 1: grown quite large and too complex to handle as if
Speaker 1: it were a single, unified entity, because a decision that
Speaker 1: might be great for one part of the company might
Speaker 1: be a setback for another. So this gave more flexibility
Speaker 1: to things now. That July, the company expanded into a
Speaker 1: new factory northeast of Osaka. UH had a lot more
Speaker 1: employees at this point, and it was producing more than
Speaker 1: two hundred different products and growing in importance in the
Speaker 1: Japanese economy. In ninety four, Konosuke oversaw the opening of
Speaker 1: an employee training institute. Japanese students could go there and
Speaker 1: attend a three year course where they would learn and
Speaker 1: practice skills in business and engineering. The company also obviously
Speaker 1: would benefit it from this relationship as well. UH In fact,
Speaker 1: it could be a very effective recruiting program for promising
Speaker 1: students to be brought into the workforce full time. Now,
Speaker 1: what came as a surprise to me was to learn
Speaker 1: that it wasn't until nineteen thirty five, which was seventeen
Speaker 1: years after Konosuke founded his company, that he actually incorporated it.
Speaker 1: It became Mattsushida Electric Industrial Company Limited. He also began
Speaker 1: to develop overseas markets, which was a bit of a
Speaker 1: novelty in Japan, particularly in the electronics manufacturing sector. Konosuke
Speaker 1: hoped to expand sales to countries around the world. But
Speaker 1: if you're keeping track of the years, you realize we're
Speaker 1: getting up to some years where there was some major
Speaker 1: conflicts that would really throw a whole monkey wrench into
Speaker 1: that plan, so Japan and China went to war in
Speaker 1: July ninety seven. That whole story is incredibly complex, aided
Speaker 1: and is outside the scope of tech stuff. But the
Speaker 1: following year, met Sushida's R and D division produced the
Speaker 1: company's first television set prototype with a twelve inch screen.
Speaker 1: In ninety nine, the set was able to display broadcasts
Speaker 1: that were originating from the Tokyo Broadcast Center, and the
Speaker 1: company also showed off this set to the general public
Speaker 1: at a special innovation exhibition. There were high hopes that
Speaker 1: television would play a huge part in the following years,
Speaker 1: but that also got sidelined because in nineteen forty, Japan
Speaker 1: entered the larger conflict of World War two, and the
Speaker 1: United States would impose sanctions on Japan as a result
Speaker 1: of that, severely restricting Japan's access to steal kana Suke
Speaker 1: was concerned that this restricted access to raw materials would
Speaker 1: have a negative impact on the products that his company
Speaker 1: was manufacturing, and he actually spoke quite passionately to his
Speaker 1: employees that they make you or that they don't compromise
Speaker 1: on quality. By ninety one, Kanasuke was obligated to turn
Speaker 1: his company's capabilities towards fulfilling military contracts. I don't know
Speaker 1: what Kanasuke's opinion was of Japan's stance in World War Two.
Speaker 1: It's kind of irrelevant because whether he chose eagerly to
Speaker 1: fulfill military contracts or he was actually compelled to by
Speaker 1: the government, the outcome is the same. The company, Matt Sushieda,
Speaker 1: began to build stuff for the Japanese military. In fact,
Speaker 1: they founded two new companies to do this, the Matt
Speaker 1: Sushida Shipbuilding Company and the Matt Sushida Airplane Company, and
Speaker 1: they built wooden ships and wooden planes, like three planes
Speaker 1: and a couple of dozen ships. Now, to say that
Speaker 1: the war was disruptive would be an understatement. It was
Speaker 1: certainly disruptive for Matt Sushida. The company had never were
Speaker 1: made this kind of stuff before. They were not familiar
Speaker 1: with it. They had to create all new processes and
Speaker 1: facilities to do it, They had to train in new
Speaker 1: skills to do it, and it took a lot of
Speaker 1: their focus off of the things that the company had
Speaker 1: been doing as their prime business. By the end of
Speaker 1: World War Two, upon Japan's surrender, the company had lost
Speaker 1: thirty two factories and offices, mostly in Osaka and Tokyo.
Speaker 1: Their home office was unscathed. The prime office in Osaka
Speaker 1: was still untouched. The company's employees, at a peak during
Speaker 1: World War two, reached twenty six thousand, but then thousands
Speaker 1: of those employees left after Japan surrendered. Most of them
Speaker 1: had who had left were drafted into working for the
Speaker 1: company um as part of the war effort, and then
Speaker 1: some actual matt Sushida employees also resigned, making matters worse
Speaker 1: at Sushida, like a lot of Japanese companies, was deeply
Speaker 1: in debt after the war. The company, again, you know,
Speaker 1: they had been forced to really produce military vehicles. If
Speaker 1: they had been able to choose, I'm sure they wouldn't
Speaker 1: have gone that route. They had never done it before.
Speaker 1: It was a very expensive thing for them to have
Speaker 1: to try and switch over to and they were counting
Speaker 1: on the government to you know, compensate them for it.
Speaker 1: But then they were on the losing side and the
Speaker 1: government didn't exist anymore. So now with the Japanese government defunct,
Speaker 1: there was no one to pay those expenses. The company
Speaker 1: had to shoulder it itself, and Mattsushida had been forced
Speaker 1: to expand and then shoulder all that debt, and the
Speaker 1: company tried to pivot a little bit. They began to
Speaker 1: manufacture stuff like prefabricated wooden houses and even wooden wagon
Speaker 1: wheels because they had all this infrastructure to produce wooden stuff,
Speaker 1: but there was no need to produce military vehicles. In fact,
Speaker 1: they wouldn't be allowed to the day after Japan's surrender,
Speaker 1: Konosuke held a meeting and said that the company was
Speaker 1: going to get back into producing consumer products, but there
Speaker 1: was a little thing standing in the way, and that
Speaker 1: would be the United States military. See, many of the
Speaker 1: businesses in Japan were ones that were under scrutiny from
Speaker 1: the US government. A lot of them had been controlled
Speaker 1: by a single family for multiple generations, and those families
Speaker 1: were holding onto these companies in a way as kind
Speaker 1: of establishing and holding onto power. The US forces directed
Speaker 1: those companies to kind of abandon that approach, to either
Speaker 1: break apart or to change leadership, and they identified Matt
Speaker 1: Sushida as one of those companies, and this really offended
Speaker 1: Konosuke because he had founded the company himself. This was
Speaker 1: not a generational thing. He actually was the founder and
Speaker 1: The company wasn't even thirty years old yet at this point,
Speaker 1: but Matt Sushida had built vehicles for the Japanese military
Speaker 1: during wartime, and so the company had a really big
Speaker 1: target painted on it. As a result, the US forces
Speaker 1: were demanding that Konosuke stepped down and for someone else
Speaker 1: to take control. Konosuke, however, had won his employees loyalty.
Speaker 1: He had demonstrated his own commitment to them. He had
Speaker 1: helped them unionize, which is something that you don't typically
Speaker 1: see a business owner doing, and so the employees protested
Speaker 1: the directive even as Konosuke prepared to step down so
Speaker 1: his company could survive. UH. Several retail stores also joined
Speaker 1: in the protests, because these stores were stores that carried
Speaker 1: the products the company made. Some of his other companies
Speaker 1: or companies that had worked with Matt Sushida, also ended
Speaker 1: joining this protest, and so, faced with resistance and demand
Speaker 1: that Konosuke was the driving force behind Matt Sushida, the
Speaker 1: US government reverse their course. They decided that he did
Speaker 1: not need to step down. And it sounds like I'm
Speaker 1: talking about something that was a fairly fast process, but
Speaker 1: it wasn't the demand he stepped down was issued in
Speaker 1: nineteen forty six. The reversal did not happen until the
Speaker 1: middle of nineteen seven, and the push to designate the
Speaker 1: company as a family controlled entity wouldn't be reversed until
Speaker 1: nineteen fifty. One. Person who left the company around this
Speaker 1: time was Konosuke's brother in law. He had been with
Speaker 1: the company since its founding, but he stepped down. Some
Speaker 1: people say he stepped down as an effort to kind
Speaker 1: of take the pressure off of Konosuke if he left,
Speaker 1: this brother in law, if he left, then everything maybe
Speaker 1: would be okay. But he went on to found a
Speaker 1: different manufacturing company called Sanio. In the meantime, Mattsushida saw
Speaker 1: several divisions and acquisitions removed from their company, and as
Speaker 1: we all know, this would not be the into Panasonic.
Speaker 1: And when we come back, I'll talk about how the
Speaker 1: company went through the recovery process post World War Two.
Speaker 1: But first let's take another quick break the restrictions Matsushida
Speaker 1: was under post World War Two. We're pretty tough. The
Speaker 1: company was not allowed to borrow money. This was actually
Speaker 1: done kind of on a national level in Japan. It
Speaker 1: wasn't just singling out the company. It was all in
Speaker 1: an effort to kind of stave off inflation, but Matsushida
Speaker 1: also had to pay employees wages and installments. They couldn't
Speaker 1: just pay everybody in full every payday. There wasn't enough
Speaker 1: cash on hand to do that. On top of that,
Speaker 1: despite streamlining workflow and really just saving wherever they could save,
Speaker 1: the company was forced to operate factories for half days.
Speaker 1: They just couldn't afford to run them full time. By
Speaker 1: nineteen fifty, the company was employing four thousand, four hundred
Speaker 1: thirty eight people, but in March of that year, five
Speaker 1: hundred sixty seven of those people would get laid off. However,
Speaker 1: something else happened that brought about a new period of
Speaker 1: productivity and prosperity in Japan. And I wish I could
Speaker 1: say that it was something to celebrate, but no, it's not.
Speaker 1: It's war again, but this time it's the Korean War.
Speaker 1: The Korean War started on June twenty five, nineteen fifty,
Speaker 1: when North Korean forces backed by the Soviet Union invaded
Speaker 1: South Korea. China would also side with North Korea and
Speaker 1: the United Nations and the United States would side with
Speaker 1: South Korea, and the Japanese economy rebounded demand in the
Speaker 1: region was calling for Japanese companies to ramp up production.
Speaker 1: In nineteen fifty one, Konosuke decided to do a grand
Speaker 1: tour of the United States and also of Europe to
Speaker 1: learn how companies operated in other countries, to learn more
Speaker 1: about the electronics industry as a whole. All he saw
Speaker 1: a need to become a global citizen and to expand
Speaker 1: his company's operations on a more grand scale. And after
Speaker 1: the first of two US tours in nineteen fifty one,
Speaker 1: Kana Suke came back to his company and told his
Speaker 1: engineers about this cool thing he wanted them to make.
Speaker 1: He wanted them to build a washing machine. He had
Speaker 1: seen washing machines in the United States and he felt
Speaker 1: that there'd be a good market for them in Japan.
Speaker 1: This turned out to actually be a pretty big request.
Speaker 1: It was something that the engineers had never really seen before,
Speaker 1: and they were depending upon materials that had been produced
Speaker 1: in other countries, so there was a language barrier when
Speaker 1: they were looking at the various manuals and descriptions of
Speaker 1: these things, and they sort of had to suss out
Speaker 1: how to build a washing machine, and not just the machine,
Speaker 1: but the components that would make up that machine, stuff
Speaker 1: like various seals and switches and motors. However, eventually they
Speaker 1: did succeed. The company created an agitator washing machine called
Speaker 1: the m W one oh one, which could hold up
Speaker 1: to two kims of clothing or about four and half
Speaker 1: pounds or so. And my favorite bit about the washing
Speaker 1: machine story is that the quality assurance team was perplexed
Speaker 1: as to how to test these devices once they were finished.
Speaker 1: I mean, you know, you would throw a sullied cloth
Speaker 1: into them to see that it would actually come out clean.
Speaker 1: But the testers were upset because there was no standard
Speaker 1: dirty cloth they could rely upon. They didn't have a
Speaker 1: set dirty cloth that would be a reliable test and
Speaker 1: a completely consistent and repeatable test. So you just had
Speaker 1: to get a cloth and get it dirty. But you
Speaker 1: know what, if one one on one cloth is too
Speaker 1: dirty or one wasn't dirty enough, and you don't know
Speaker 1: if it really worked, it drove them nuts. The company
Speaker 1: also began to re establish its sales network, which had
Speaker 1: been essentially wiped out after World War Two, and initially
Speaker 1: they focused on building out the state network in Japan itself,
Speaker 1: but the company would also play a big part in
Speaker 1: establishing a new effort to get an autonomous economy in
Speaker 1: Japan and then expand beyond it. Kanasuke had another ambition
Speaker 1: upon his return from his tour, which was to find
Speaker 1: another company, an electronics company that he could partner with
Speaker 1: to gain some technical guidance. So find someone who has
Speaker 1: already experienced in the sector and then partner with them
Speaker 1: to learn from them. Ultimately, after a lot of negotiations
Speaker 1: and back and forth, he chose the Dutch company Phillips,
Speaker 1: which had started off selling lightbulbs and at this point
Speaker 1: was already a large electronics company. Together, they formed a
Speaker 1: new subsidiary called Matsushida Electronics Corporation or m e C
Speaker 1: in nineteen fifty two. Around that same time, Matsushida Engineers
Speaker 1: also built a new black and white television set, the
Speaker 1: seventeen K five thirty one, under the National brand. This
Speaker 1: had a rectangular screen, which kind of set it apart
Speaker 1: from other early television sets in Japan. Most of them
Speaker 1: had circular screens, which was you know, weird to us
Speaker 1: now through rectangle being the more common appearance, and it
Speaker 1: was technically a new product, but it was also extremely expensive,
Speaker 1: so it wasn't like they were selling a ton of these,
Speaker 1: not a lot of people could afford it. In nineteen
Speaker 1: fifty three, Matt Sushida established the Central Research Laboratories. This
Speaker 1: was a dedicated R and D facility that took what
Speaker 1: engineers were learning through their partnership with Phillips and then
Speaker 1: putting it to practical use. And the group developed new
Speaker 1: products as well as worked on ways to automate production
Speaker 1: to make the manufacturing process more safe and efficient and cheap.
Speaker 1: And this wasn't just for the sake of innovation. Towards
Speaker 1: the end of nineteen fifty three, the Japanese economy was
Speaker 1: showing signs of slowing down a lot, and kind of
Speaker 1: Suke saw a need to create more efficient production systems
Speaker 1: in order to stay a viable business US without massive cutbacks.
Speaker 1: The company also began to develop dry cell batteries. Starting
Speaker 1: in nineteen fifty four, they introduced the hyper brand. But
Speaker 1: that kind of begs the question what the heck is
Speaker 1: a dry cell battery? And yes, I know I technically
Speaker 1: used begs the question wrong. Well, remember that a battery
Speaker 1: is a way to store energy, and the way it
Speaker 1: releases energy is to have chemical reactions that go on
Speaker 1: inside the battery, and part of that chemical reaction means
Speaker 1: that it converts some of that stored chemical energy into
Speaker 1: electrical energy. And in the early days of batteries, batteries
Speaker 1: were wet cells, and that means the batteries themselves had
Speaker 1: liquid components inside them, and sometimes they could slash out
Speaker 1: if you weren't careful. And sometimes those components are toxic
Speaker 1: or corrosive, like sulfuric acid type stuff. You don't want
Speaker 1: that to get on you. That's a bad thing. But
Speaker 1: a German chemist named Dr Carl Gastner created the first
Speaker 1: dry cell battery, which uses dry components rather than liquid ones,
Speaker 1: and this was all the way back in six However,
Speaker 1: producing them in large quantities wasn't easy at first. Originally,
Speaker 1: Konosuke was looking to partner with an American company to
Speaker 1: develop dry cell batteries from Matsushida, but ultimately he decided
Speaker 1: against that and the company's own engineers developed their version
Speaker 1: of the dry cell battery. And in general these are
Speaker 1: safer and more convenient than wet cell style batteries. Like
Speaker 1: with a wet cell battery, you can't just mount the
Speaker 1: battery any which way, right because if you turn it
Speaker 1: upside down, the liquid can come out, whereas the dry
Speaker 1: cell battery, it doesn't matter the orientation of the battery.
Speaker 1: It's gonna you know, all the components are just gonna
Speaker 1: stay where they're at, So it's better in that regard.
Speaker 1: The company also produced its first electric refrigerator, the n
Speaker 1: R S Threete. So let's remind our cells have electric
Speaker 1: fridges work. It's tech stuff after all, and we're about
Speaker 1: to wrap up, don't worry. So in the very old days,
Speaker 1: you had an ice box, and that was literal. You
Speaker 1: had a box and it had a compartment where you
Speaker 1: would put a big old block of ice and that
Speaker 1: would keep the neighboring compartment cool. But it wasn't exactly
Speaker 1: convenient and you had to replace the ice regularly. So
Speaker 1: how does something running on electricity keep things cool has
Speaker 1: to do with physics, and those physics rely on a
Speaker 1: compressor and a valve and some heat exchange coils. But
Speaker 1: that doesn't really explain things, doesn't, all right, So let's
Speaker 1: imagine this. You've got a continuous path, You've got a
Speaker 1: compressor on one end of that path, and you have
Speaker 1: an expansion valve on the opposite end of the path
Speaker 1: and on either side. So think of those the top
Speaker 1: and bottom. Let's say that the compressors at the top,
Speaker 1: the expansion valves at the bottom, And then you've got
Speaker 1: a coil on your left and a coil on your right.
Speaker 1: And we'll say the coil on your left is the
Speaker 1: one that represents the coil that inside a refrigerator, and
Speaker 1: the coil on the right is one that represents the
Speaker 1: coil that's outside the refrigerator. Both of these are called
Speaker 1: heat exchange coils. The one that's on the outside is
Speaker 1: also known as the condenser. So ultimately the whole idea
Speaker 1: is to transfer heat from the inside of the fridge
Speaker 1: and dump it on the outside of the fridge. The
Speaker 1: compressor's job is to circulate the refrigerant through the system
Speaker 1: and to compress it. The refrigerant is made of something
Speaker 1: that has a really low boiling point, like below the
Speaker 1: freezing point for water, So this is something that we
Speaker 1: would typically encounter as a gas, but uh, you want
Speaker 1: to get it low enough so that you can actually
Speaker 1: turn it into a liquid. The compressor pumps gas from
Speaker 1: the fridge side, the cold side, and it compresses that
Speaker 1: gas right and and pressurizes it, and this also causes
Speaker 1: the gas to heat up. As you pressurize a gas,
Speaker 1: it's temperature increases, and this hot refrigerant gas then moves
Speaker 1: into the heat exchange coil on the outside of the fridge,
Speaker 1: and that's where the heat will dissipate. Typically it transmits
Speaker 1: the heat to a series of thin fins and then
Speaker 1: the heat just uh dissipates into the environment. The gas
Speaker 1: inside the coil starts to condense, and it condenses into
Speaker 1: a liquid that's still held under high pressure. The pressure
Speaker 1: allows the refrigerant to stay a liquid even though it
Speaker 1: would normally boil off into a gas, because it was
Speaker 1: still warmer than what it's typical boiling point would be.
Speaker 1: The refrigerant then will flow through the expansion valve, and
Speaker 1: that maintains the difference in pressure between the condenser side,
Speaker 1: which is again high pressure that's where the compressor is
Speaker 1: pumping refrigerant into, and then low pressure on the fridge side.
Speaker 1: So on the other side, the expansion valve is that
Speaker 1: low pressure coil, and when the high pressure liquid passes
Speaker 1: through the expansion valve, it immediately boils off, and as
Speaker 1: it boils off, the temperature drops drastically. Uh, it drops
Speaker 1: down to whatever the boiling temperature is for that refrigerants.
Speaker 1: So since the boiling temperature is below zero, that means
Speaker 1: the coils go to below zero, and then that cold
Speaker 1: refrigerant can start to absorb the heat from inside the fridge, again,
Speaker 1: carrying the heat from the food that's in the fridge away,
Speaker 1: and the whole process starts up again. Mattsoshida's fridge was
Speaker 1: part of the National line of products, and it was
Speaker 1: an expensive appliance. In fact, the company itself described it
Speaker 1: as quote highly acclaimed by people in high income households.
Speaker 1: In the quote by Mattsushido was starting to market radios
Speaker 1: to the United States, which was a big step for
Speaker 1: the Japanese company. The radio market in the US was
Speaker 1: already a mature one. On top of that, American consumers
Speaker 1: weren't really familiar with Japanese brands that much. Japan had
Speaker 1: not gained a reputation for electronics in the unit US
Speaker 1: in the nineteen fifties. It was going to be a
Speaker 1: really tough battle. And you know, we haven't even reached
Speaker 1: the point where Matt Sushida introduced Panasonic as a brand name.
Speaker 1: But we've got to save some stuff for the next episode, right,
Speaker 1: and so in our next episode, we will continue the
Speaker 1: story of Panasonic, including the introduction of the Panasonic brand
Speaker 1: and leading up to what the company has done in
Speaker 1: more recent decades. But in the meantime, if you have
Speaker 1: suggestions for future topics of tech Stuff, whether it's a company,
Speaker 1: a technology, a person in tech, a trend in tech,
Speaker 1: anything like that, let me know. Reach out to me
Speaker 1: on Twitter. The handle is tech stuff hs W and
Speaker 1: I'll talk to you again really soon. Text Stuff is
Speaker 1: an I Heart Radio production. For more podcasts from I
Speaker 1: Heart Radio, visit the i Heart Radio app, Apple Podcasts,
Speaker 1: or wherever you listen to your favorite shows. H