WEBVTT - TechStuff Classic: The Samsung Story Part 1 0:00:04.440 --> 0:00:12.320 Welcome to Tech Stuff, a production from iHeartRadio. Hey thereon 0:00:12.440 --> 0:00:13.600 Welcome to Tech Stuff. 0:00:13.720 --> 0:00:15.560 I'm your host, Jonathan Strickland. 0:00:15.600 --> 0:00:18.479 I'm an executive producer with iHeart Podcasts and how the 0:00:18.600 --> 0:00:21.319 Tech are you? It is a Friday, it is time 0:00:21.440 --> 0:00:25.079 for a classic episode. We're actually going to have a 0:00:25.160 --> 0:00:29.240 two parter, so part one will publish today and part 0:00:29.240 --> 0:00:34.160 two will publish next Friday. But this originally published back 0:00:34.200 --> 0:00:38.440 on May twenty fourth, twenty seventeen, and I gave it 0:00:38.479 --> 0:00:45.000 the imaginative title The Samsung Story Part one. Enjoy Now. 0:00:45.040 --> 0:00:48.400 Samsung's a Korean company. That means there's going to be 0:00:48.440 --> 0:00:51.120 a lot of Korean names that I am going to 0:00:51.280 --> 0:00:56.880 slaughter in this episode, and I sincerely apologize from the 0:00:56.920 --> 0:01:00.840 beginning at how I am going to butcher the pronunciation 0:01:01.160 --> 0:01:04.000 of these names. I'm going to do my best, but 0:01:04.840 --> 0:01:08.400 chalk it up to cultural ignorance, folks. I just don't 0:01:08.440 --> 0:01:12.880 have the experience with the Korean language to say all 0:01:12.959 --> 0:01:16.640 the names properly. Will I will try my hardest to 0:01:16.680 --> 0:01:18.680 do it, but I just want to make that clear 0:01:19.000 --> 0:01:22.160 because I know it's important, and I apologize for not 0:01:22.319 --> 0:01:25.560 being able to nail it. But it's largely just due 0:01:25.560 --> 0:01:29.360 to my lack of exposure to the Korean language. Now, 0:01:30.200 --> 0:01:33.880 Samsung was founded in nineteen thirty eight by Li Byong Chol, 0:01:34.640 --> 0:01:38.520 and originally it was a very modest company when it 0:01:38.560 --> 0:01:41.080 first started, but today it's a giant with more than 0:01:41.120 --> 0:01:46.640 one hundred and seventy billion dollars in revenue. So let's 0:01:46.680 --> 0:01:50.160 talk about its humble beginnings and how it first got started, 0:01:50.200 --> 0:01:55.840 because it was entirely different when it first when it 0:01:55.880 --> 0:02:01.800 was first founded. So here's another tricky thing about this company. 0:02:02.760 --> 0:02:07.240 To understand its rise, you also need to understand a 0:02:07.240 --> 0:02:10.040 little bit about the history of Korea, and this is 0:02:10.080 --> 0:02:12.520 an area of the world that I had not really 0:02:12.560 --> 0:02:15.840 studied that much. East Asia has not been one of 0:02:15.840 --> 0:02:19.440 the focuses of my studies, and so for a lot 0:02:19.480 --> 0:02:22.440 of this it was all new information to me, and 0:02:22.600 --> 0:02:26.720 it really displayed to me my depth of ignorance of 0:02:26.800 --> 0:02:30.000 East Asian history. But it is fascinating and it does, 0:02:30.040 --> 0:02:35.000 in fact tie into Samsung. It has a profound effect 0:02:35.160 --> 0:02:37.840 on the history of the company and even a motivation 0:02:38.040 --> 0:02:40.600 for the existence of the company in the first place. 0:02:40.960 --> 0:02:42.760 So we're going to look a little bit at world 0:02:42.919 --> 0:02:46.440 history before we get into the history of the company itself. 0:02:46.760 --> 0:02:50.040 Bear with me, because, like I said, it's fascinating and 0:02:50.080 --> 0:02:53.080 it's important so that you understand why the company is 0:02:53.120 --> 0:02:57.560 the way it is now. One thing that we have 0:02:57.720 --> 0:03:01.040 to keep in mind at the beginning is that when 0:03:01.120 --> 0:03:04.840 the company was founded. When Samsung was first founded, the 0:03:04.960 --> 0:03:11.040 Korean people were an occupied people. For centuries, Korea had 0:03:11.080 --> 0:03:15.079 been the center of power struggles between other nations. The 0:03:15.160 --> 0:03:18.920 Korean Peninsula is incredibly valuable for multiple reasons, and so 0:03:19.000 --> 0:03:21.760 a lot of different countries had interest in trying to 0:03:21.760 --> 0:03:24.960 control it, putting the Korean people in the middle as 0:03:24.960 --> 0:03:29.520 a result. In the nineteenth century, so the eighteen hundreds, 0:03:30.400 --> 0:03:33.840 the two main powers that were struggling over Korea were 0:03:33.960 --> 0:03:39.440 Japan and China. There was actually a war fought largely 0:03:39.600 --> 0:03:43.760 on the Korean Peninsula between Japan and China in eighteen 0:03:43.880 --> 0:03:48.760 ninety five, and the Japanese won the conflict and essentially 0:03:48.800 --> 0:03:55.240 eliminated China's interests in Korea. But Korea's queen formally well 0:03:55.280 --> 0:03:58.760 not formally casually really known as Queen Men and later 0:03:58.960 --> 0:04:04.200 known as Empress Myeong Seong, was hopeful that she would 0:04:04.200 --> 0:04:08.760 be able to entice Russia to support Korea against Japan, 0:04:09.360 --> 0:04:13.720 so there grew a new rivalry. You know, China was 0:04:13.760 --> 0:04:17.560 now fading away after losing to Japan in this conflict. 0:04:18.080 --> 0:04:21.880 There was a new rivalry between Japan and Russia, and 0:04:23.240 --> 0:04:26.760 Queen Men was hopeful that Russia would end up helping 0:04:26.800 --> 0:04:33.480 out Korea because she really didn't want Japanese influence infiltrating 0:04:33.839 --> 0:04:37.520 the country. She was technically the wife of the king, 0:04:38.320 --> 0:04:41.599 the last of a dynasty of kings in Korea, but 0:04:41.800 --> 0:04:47.200 had considerable influence. She was effectively a ruler in Korea 0:04:47.400 --> 0:04:51.760 and had put several of her most trusted advisors and 0:04:51.839 --> 0:04:57.320 relatives into high positions of power. She was also pretty 0:04:57.320 --> 0:05:01.080 well liked by a lot of the Korean populace, more 0:05:01.160 --> 0:05:05.280 so after the events I'm about to describe happened. So 0:05:05.520 --> 0:05:10.120 the government of Japan viewed Queen Men as an impediment 0:05:10.160 --> 0:05:13.600 to their plans, and they tried numerous times to instill 0:05:13.640 --> 0:05:17.919 a rebellion against her, to try and encourage aspects of 0:05:17.920 --> 0:05:20.960 the Korean government to oppose Queen Men and overthrow her, 0:05:22.200 --> 0:05:25.640 but they didn't really work. So the Japanese government worked 0:05:25.839 --> 0:05:28.600 with these various political rivals but didn't make a whole 0:05:28.640 --> 0:05:32.240 lot of progress, and they decided to take more drastic measures. 0:05:32.560 --> 0:05:38.200 So on October eighth, eighteen ninety five, Japanese ronan in 0:05:38.240 --> 0:05:42.640 other words, warriors for hire, working with some of Queen 0:05:42.720 --> 0:05:47.480 Men's rivals, were able to infiltrate her palace. The Ronan 0:05:47.680 --> 0:05:51.240 killed Queen Men. They assassinated her along with two other 0:05:51.320 --> 0:05:55.000 ladies in waiting, and they positively identified Queen Men as 0:05:55.040 --> 0:05:59.120 one of the three women. The fallout from this act 0:05:59.240 --> 0:06:03.480 was considerable. There were international pressures that forced the Japanese 0:06:03.520 --> 0:06:06.640 government to put the people who were involved in the 0:06:06.680 --> 0:06:10.520 assassination on trial. So the Japanese government did. They brought 0:06:10.560 --> 0:06:13.800 the people in, they gave them trials. However, all of 0:06:13.839 --> 0:06:18.400 the people were eventually acquitted due to lack of evidence 0:06:18.440 --> 0:06:21.520 according to the Japanese government, which did not go over 0:06:21.520 --> 0:06:26.400 well in the international community either. Within Korea itself, there 0:06:26.560 --> 0:06:30.440 was a growing sentiment that was anti Japanese. It had 0:06:30.440 --> 0:06:33.800 already been present, but now it was really flaring up 0:06:33.839 --> 0:06:38.320 in the wake of Queen Men's assassination. Things got really 0:06:38.360 --> 0:06:41.599 complicated from there, so complicated that it's really not my 0:06:41.720 --> 0:06:45.159 place to dive that deeply into the history, but it 0:06:45.240 --> 0:06:48.240 is important to know the basics so that you understand 0:06:48.400 --> 0:06:53.160 the rise of Samsung, and it also gives you insight 0:06:53.320 --> 0:06:58.080 into the Korean mindset and philosophy of the time. In 0:06:58.120 --> 0:07:02.520 eighteen ninety seven, King Gojong, who was husband to Queen Men, 0:07:03.600 --> 0:07:07.200 founded the Empire of Korea. So this was a new 0:07:07.400 --> 0:07:12.400 imperial line that he was attempting to establish in Korea. Now, 0:07:12.400 --> 0:07:16.720 he had sought refuge in Russia after his wife had 0:07:16.720 --> 0:07:21.360 been assassinated, but he had been pressured to return to Korea. 0:07:22.240 --> 0:07:24.560 The various governments around the world were saying that he 0:07:24.640 --> 0:07:28.320 needed to be there to establish this government or else 0:07:28.400 --> 0:07:32.040 Korea would be plunged into chaos. So he did return 0:07:32.080 --> 0:07:36.960 to Korea and ended up giving Queen Men her title 0:07:37.000 --> 0:07:42.920 of Impress posthumously. Japan continued its efforts to expand into 0:07:42.960 --> 0:07:46.680 East Asia, and then there was the Russo Japanese War, 0:07:47.120 --> 0:07:51.680 the war between Russia and Japan, which waged from nineteen 0:07:51.720 --> 0:07:55.520 oh five or nineteen oh four to nineteen oh five. Sorry, now, 0:07:55.520 --> 0:07:59.520 the Japanese military won some key victories there and then 0:07:59.600 --> 0:08:02.480 really started to put pressure on Korea. As a result, 0:08:02.720 --> 0:08:06.200 they compelled the emperor to sign the Protectorate Treaty of 0:08:06.280 --> 0:08:09.440 nineteen oh five, which made Korea a protectorate of Japan. 0:08:11.200 --> 0:08:14.680 Now that largely stripped Korea of its nation status. It 0:08:14.760 --> 0:08:18.560 was technically a nation, but really only in Nane. It 0:08:18.640 --> 0:08:22.760 was more of an extended property of Japan at this point, 0:08:22.760 --> 0:08:26.920 and in nineteen ten, Japan went ahead and formally annexed 0:08:27.240 --> 0:08:31.240 the Empire of Korea. So over the next decade, from 0:08:31.280 --> 0:08:35.360 about nineteen ten to about nineteen nineteen, Japan forces subjugated 0:08:35.440 --> 0:08:40.359 Korea using force and severely restricting the rights of Koreans 0:08:40.600 --> 0:08:45.160 as a result. That particular era ended in nineteen twenty 0:08:45.280 --> 0:08:50.800 because the Japanese emperor was shocked when Koreans were able 0:08:50.800 --> 0:08:56.040 to organize mass, coordinated protests across the entirety of Korea, 0:08:57.120 --> 0:09:00.640 and the emperor realized if things didn't change, so he 0:09:00.720 --> 0:09:03.760 was going to have a full scale rebellion in Korea 0:09:03.920 --> 0:09:06.960 and did not want that to happen. So at that 0:09:07.080 --> 0:09:09.959 point Japan started to ease back on some of these 0:09:10.000 --> 0:09:17.280 restrictions and things got a little less tense in Korea. 0:09:17.720 --> 0:09:20.040 The reason why I tell you all this about this 0:09:20.120 --> 0:09:23.160 era between nineteen ten and nineteen twenty is that on 0:09:23.200 --> 0:09:27.240 February twelfth, nineteen ten, leb yung chull, the founder of 0:09:27.280 --> 0:09:31.440 Samsung was born. So he was born shortly well, right 0:09:31.480 --> 0:09:36.920 around the time that Japan was formally occupying Korea, so 0:09:36.960 --> 0:09:40.679 this is a very tumultuous time in Korea's history. Now, 0:09:40.720 --> 0:09:44.520 his family were well off and so he was in 0:09:44.559 --> 0:09:47.119 a better position than a lot of his fellow Koreans. 0:09:47.160 --> 0:09:50.520 He was from a wealthy family. They were landowners and 0:09:50.559 --> 0:09:53.240 they made their money through being landlords. They would rent 0:09:53.280 --> 0:09:57.080 out their property to other people. Now, Leb yung choll 0:09:57.160 --> 0:10:00.680 would study in local Korean schools before or he would 0:10:00.880 --> 0:10:05.800 go off to Tokyo to attend Waseda University. But his 0:10:06.000 --> 0:10:09.120 father passed away while he was in school, and so 0:10:09.160 --> 0:10:11.600 he ended up dropping out of college to return home 0:10:11.640 --> 0:10:15.480 to Korea and take over the family business, so he 0:10:15.520 --> 0:10:18.560 never earned his degree. That family business at the time 0:10:18.679 --> 0:10:21.040 was running a rice mill as well as being the 0:10:21.080 --> 0:10:24.960 overseer of these landlord properties, and the rice mill saw 0:10:25.040 --> 0:10:28.200 a lot of success. But at that time, Leeb young 0:10:28.280 --> 0:10:33.439 chol began to feel a greater ambition something more important 0:10:33.480 --> 0:10:36.360 than running a successful business. He wanted to do more 0:10:36.640 --> 0:10:37.040 than that. 0:10:38.080 --> 0:10:40.640 We'll be back with more of the Samsung story after 0:10:40.760 --> 0:10:42.240 this quick break. 0:10:51.240 --> 0:10:53.680 We're going to skip ahead now to nineteen thirty eight. 0:10:53.800 --> 0:10:58.199 So in this time he's running the business everything successful. 0:10:59.200 --> 0:11:03.760 He feels like Korea really needs something to help inspire 0:11:03.840 --> 0:11:07.760 the people and to jumpstart the economy of Korea itself 0:11:08.320 --> 0:11:12.200 because it was so dependent upon Japan, and that was 0:11:12.559 --> 0:11:18.720 something that was of great concern to Koreans. So the 0:11:18.760 --> 0:11:23.400 country had been under Japanese occupation for nearly three decades 0:11:23.480 --> 0:11:26.520 at this point in nineteen thirty eight, and since nineteen 0:11:26.559 --> 0:11:30.480 thirty one the Japanese rule had become more restrictive. So 0:11:30.640 --> 0:11:33.760 nineteen twenty nineteen thirty one things had eased up a bit, 0:11:34.480 --> 0:11:37.080 but from nineteen thirty one up to nineteen thirty eight 0:11:37.160 --> 0:11:41.959 they had gotten worse again. This was called the Assimilation period, 0:11:42.200 --> 0:11:46.400 in which Japan was effectively trying to wipe out Korean 0:11:46.480 --> 0:11:50.960 culture and make Korea essentially just part of Japan, officially 0:11:51.000 --> 0:11:55.920 part of Japan, and really exploiting Korea's resources as well. Now, 0:11:56.000 --> 0:11:58.440 Li Byong Chol wanted to make a difference. He wanted 0:11:58.480 --> 0:12:01.880 to create a successful business that Korea could call its 0:12:01.960 --> 0:12:06.040 own and create an industry where one had not existed before. 0:12:06.840 --> 0:12:10.600 The Japanese occupation had brought a couple of positive things 0:12:10.679 --> 0:12:15.400 to Korea, including industrialization and modernization, two things the country 0:12:15.520 --> 0:12:18.760 was far behind in compared to the rest of the 0:12:18.800 --> 0:12:24.240 world in general, in East Asia in particular. But as 0:12:24.240 --> 0:12:27.520 a Resultan Koreans were paying an incredibly high price. They 0:12:27.520 --> 0:12:33.120 were under restrictive rule, and the Japanese government and Japanese 0:12:33.640 --> 0:12:40.440 occupying forces were taking great liberties and exploiting people in 0:12:40.480 --> 0:12:42.679 horrible ways that I'm not going to go into here, 0:12:42.720 --> 0:12:47.440 but it was not great. Lee Byung chull was hoping 0:12:47.480 --> 0:12:50.240 that he could leverage the advances that the Japanese had 0:12:50.280 --> 0:12:53.679 brought with them and turn them to Korea's advantage and 0:12:53.720 --> 0:12:58.720 to truly have Korea emerge into the twentieth century as 0:12:58.760 --> 0:13:02.120 a power player. There was a long long way to go, 0:13:03.280 --> 0:13:08.040 so to pursue this, he decided to sell off the 0:13:08.120 --> 0:13:11.720 rice mill and to invest in a new company, and 0:13:11.800 --> 0:13:16.080 on March first, nineteen thirty eight, he founded the Samsung 0:13:16.280 --> 0:13:21.640 Trading Company. The initial investment, according to multiple sources, was 0:13:21.720 --> 0:13:26.560 about twenty seven dollars at the time. That's how much 0:13:27.360 --> 0:13:32.400 the founding Samsung Trading Company costs twenty seven bucks. That 0:13:32.559 --> 0:13:36.880 was thirty thousand and one, which is the Korean currency 0:13:37.360 --> 0:13:42.120 WN the one. If we throw twenty seven dollars into 0:13:42.160 --> 0:13:45.840 an inflation calculator and adjust for inflation from nineteen thirty 0:13:45.880 --> 0:13:48.080 eight to modern day, you would get somewhere in the 0:13:48.080 --> 0:13:51.800 neighborhood of four hundred and sixty dollars. But we have 0:13:51.880 --> 0:13:54.400 to keep in mind that this is not a apples 0:13:54.440 --> 0:13:58.880 to apples thing. Whenever we're doing currency conversions and inflation comparisons, 0:13:59.240 --> 0:14:02.040 we have to make a lot of assumptions. So let's 0:14:02.040 --> 0:14:05.079 just say founded Samsung with an initial investment that was 0:14:05.120 --> 0:14:08.079 somewhere in the neighborhood of five hundred bucks. So imagine 0:14:08.120 --> 0:14:10.760 saving up five hundred dollars and then founding a company. 0:14:10.760 --> 0:14:13.440 That's essentially what he managed to do back in nineteen 0:14:13.520 --> 0:14:17.280 thirty eight. As the company started to form, he hired 0:14:17.320 --> 0:14:20.920 on people, and initially the company had about forty employees. 0:14:21.720 --> 0:14:27.720 Now the company's name Samsung means literally in Korean three stars. 0:14:28.960 --> 0:14:33.080 The number three has significance in Korean culture. It often 0:14:33.160 --> 0:14:36.400 is associated with something that is really momentous or really 0:14:36.440 --> 0:14:41.240 strong and powerful, and the motto of the company is 0:14:41.720 --> 0:14:46.520 be great, strong, and everlasting, which seems like a pretty 0:14:47.240 --> 0:14:50.000 tall order, but the company's done pretty well since then. 0:14:51.400 --> 0:14:55.360 Its initial business was selling common goods and transporting products 0:14:55.400 --> 0:15:00.240 across Korea and into China, so it was essentially a 0:15:00.240 --> 0:15:04.240 grocery store and a trucking company when it first started. 0:15:04.760 --> 0:15:11.200 That's what Samsung's business was was groceries and transportation. A 0:15:11.240 --> 0:15:14.760 lot of company origin stories when they talk about Samsung 0:15:15.080 --> 0:15:17.960 say that it was essentially dealing in dried fish, which 0:15:18.000 --> 0:15:22.320 in fact was one of the main products that they 0:15:22.400 --> 0:15:27.640 carried was dried fish Korea. That was a major product there. 0:15:29.120 --> 0:15:34.560 But I think it oversimplifies the position that Samsung was in. 0:15:34.640 --> 0:15:37.360 I think a lot of people like to use that 0:15:37.480 --> 0:15:41.680 as a descriptor because they juxtapose that humble origin of 0:15:41.720 --> 0:15:45.239 Samsung being a company that sold dried fish and transported 0:15:45.280 --> 0:15:51.960 it into China to Samsung the multinational global electronics company, 0:15:52.200 --> 0:15:54.640 the giant that it is today, and I think that 0:15:54.840 --> 0:15:58.800 under sells what actually was happening. If I'm being honest, 0:15:59.200 --> 0:16:02.840 it's more of a store. Worry about a businessman who 0:16:02.920 --> 0:16:07.560 was trying to push against opposition in order to establish 0:16:07.600 --> 0:16:12.320 a new sense of identity within Korea. This was a 0:16:12.360 --> 0:16:15.160 country that had been the subject of interference from multiple 0:16:15.360 --> 0:16:18.600 countries for much of its history, and in fact, for 0:16:18.680 --> 0:16:22.360 the next several decades would still be the subject of 0:16:22.400 --> 0:16:25.440 a lot of foreign meddling. And so here was an 0:16:25.520 --> 0:16:30.000 attempt by a Korean citizen to say, let's make our 0:16:30.080 --> 0:16:36.120 own name and not have Korea be this extension of 0:16:36.160 --> 0:16:39.560 some other countries identity. And this is a big deal. 0:16:40.560 --> 0:16:44.680 But it is true that Samsung's early history had little 0:16:44.720 --> 0:16:49.359 to do with technology, apart from leveraging modern transportation conveniences 0:16:49.440 --> 0:16:52.800 like motorized trucks, which were pretty new to Korea at 0:16:52.800 --> 0:16:56.600 that time. The company saw success in its early years, 0:16:57.040 --> 0:17:01.320 so they did pretty well. The Japanese occupation of Korea 0:17:01.520 --> 0:17:04.760 ended in nineteen forty five when Japan surrendered at the 0:17:04.840 --> 0:17:08.280 end of World War Two, and at this point Korea 0:17:08.400 --> 0:17:12.000 was again in a time of turmoil. Japan's withdrawal from 0:17:12.119 --> 0:17:16.160 Korea didn't mean everything was hunky dory. In fact, things 0:17:16.200 --> 0:17:23.360 got really complicated. In theory, Korea was a single independent country, 0:17:23.680 --> 0:17:26.639 but in practice that really wasn't the case. The United 0:17:26.680 --> 0:17:30.280 States and Russia, both or the Soviet Union, both had 0:17:30.359 --> 0:17:37.320 interests in Korea and decided to essentially divide up the country. 0:17:37.400 --> 0:17:41.719 So everything above the thirty eighth parallel that's what Russia 0:17:41.800 --> 0:17:43.800 was looking at, and everything below that, that's what the 0:17:43.840 --> 0:17:47.320 United States was looking at. And a new leader named 0:17:47.520 --> 0:17:51.000 Lee Sung Man rose to take control of what would 0:17:51.080 --> 0:17:55.840 eventually become South Korea. And he wasn't the leader that 0:17:55.920 --> 0:17:59.520 all Koreans or even most Koreans necessarily preferred, but he 0:17:59.600 --> 0:18:02.879 had the support of the United States, largely because he 0:18:02.960 --> 0:18:07.720 was a staunch anti communist. So it wasn't a true republic. 0:18:08.440 --> 0:18:11.600 The people of Korea didn't get to vote on Li 0:18:11.840 --> 0:18:18.120 Sungman establishing control. He was essentially instilled as leader by 0:18:18.160 --> 0:18:25.080 the United States. Now, meanwhile, again the Soviet Union was 0:18:25.160 --> 0:18:28.760 looking at the northern part of Korea, and the Soviet 0:18:28.840 --> 0:18:36.159 Union established its own leadership that was totally separate from 0:18:36.280 --> 0:18:39.760 this leadership in South Korea, which, as you would imagine, 0:18:40.080 --> 0:18:43.679 caused a little bit of friction. Both governments, both the 0:18:43.680 --> 0:18:45.879 one in the northern section of the country and the 0:18:45.920 --> 0:18:49.320 one in the southern section of the country, claimed leadership 0:18:49.640 --> 0:18:54.639 across the entire nation. So you have two different governments 0:18:54.760 --> 0:19:01.280 both claiming to be the leader of Korea overall. Now, 0:19:01.320 --> 0:19:05.200 technically the United States and the Soviet Union had joint 0:19:05.240 --> 0:19:10.000 trusteeship overall of Korea. And technically they were supposed to 0:19:10.119 --> 0:19:13.000 come to an agreement as to what the government of 0:19:13.080 --> 0:19:19.439 Korea would be following its release from Japan, and then 0:19:19.480 --> 0:19:23.440 from that point forward, theoretically the people of Korea would 0:19:23.480 --> 0:19:26.679 have a say in how their government was formed. But 0:19:26.760 --> 0:19:29.879 that never happened because the Soviet Union in the United 0:19:29.880 --> 0:19:35.520 States didn't see eye to eye. They completely disagreed with 0:19:35.720 --> 0:19:43.040 each other's choices, and so this leadership question became a stalemate. Now, 0:19:43.200 --> 0:19:45.960 at the same time, Lee Byung chung wanted his company 0:19:46.000 --> 0:19:51.040 to reinvest in Korea and that was continuing to struggle 0:19:51.240 --> 0:19:53.800 in the wake of World War Two and the interests 0:19:53.840 --> 0:19:56.440 of the United States and the Soviet Union. So in 0:19:56.520 --> 0:19:59.680 nineteen forty eight, he founded the Samsung Construction and Trading 0:19:59.720 --> 0:20:03.679 Corporate or Samsung C and T. Now, this would eventually 0:20:03.720 --> 0:20:07.400 become the parent company of all the other Samsung companies, 0:20:07.440 --> 0:20:11.800 at least for a while, and so Samsung C and 0:20:11.840 --> 0:20:14.960 T became kind of like the top notch company under 0:20:14.960 --> 0:20:19.240 which all the others would fall. And often you'll see 0:20:19.240 --> 0:20:21.440 that the founding date for Samsung C and T is 0:20:21.520 --> 0:20:25.680 nineteen thirty eight, although really that was the Samsung Trading Company, 0:20:26.200 --> 0:20:28.680 the Samsung C and T was sort of the transformation 0:20:28.920 --> 0:20:33.080 of that company. So I guess it really just depends 0:20:33.080 --> 0:20:34.960 on your perspective as to whether or not you would 0:20:35.000 --> 0:20:37.800 call the founding of it being nineteen thirty eight when 0:20:37.800 --> 0:20:41.120 the initial company started, or nineteen forty eight when they 0:20:41.320 --> 0:20:46.120 formally created the organization known as Samsung C and T. 0:20:47.400 --> 0:20:50.280 This gets way more complicated the longer I go, So 0:20:50.320 --> 0:20:53.600 if you think that part is a little confusing, I apologize. 0:20:53.760 --> 0:20:56.680 It's not going to get any easier to understand. In fact, 0:20:56.680 --> 0:20:59.679 it gets really messy when we get up into the eighties, 0:20:59.760 --> 0:21:04.080 nineth these and the two thousands for Samsung's history. Now, 0:21:04.440 --> 0:21:07.399 another big thing happened in nineteen forty eight. That's the 0:21:07.440 --> 0:21:11.200 same year that Korea officially split into two nations. Remember 0:21:11.280 --> 0:21:14.760 I mentioned you had these two different governments that were 0:21:14.760 --> 0:21:17.840 in opposition to each other, both laying claim to the 0:21:18.000 --> 0:21:23.679 entire Korean country, and that could not sustain itself. In 0:21:23.760 --> 0:21:28.320 the South, Singhman Ri established the Republic of Korea, and 0:21:28.359 --> 0:21:31.280 in the North Kim Il sung became the leader of 0:21:31.320 --> 0:21:36.879 the Democratic People's Republic of Korea. The United Nations only 0:21:36.920 --> 0:21:41.320 recognized the Republic of Korea. The South Korean government as 0:21:41.359 --> 0:21:45.960 being legitimate. Meanwhile, the Northern Korean government began seizing companies 0:21:46.000 --> 0:21:49.280 and properties that were originally owned by Japanese or pro 0:21:49.400 --> 0:21:54.639 Japanese interests, and then claiming those companies for the state, 0:21:55.160 --> 0:21:57.520 so they were state owned and operated. At that point 0:21:57.520 --> 0:22:02.760 they had been seized by four Tensions between North and 0:22:02.800 --> 0:22:06.800 South Korea increased, with each planning to use military force 0:22:06.960 --> 0:22:10.040 against the other in order to reunite the country under 0:22:10.119 --> 0:22:14.520 one government. Now, at this time, Samsung had established a 0:22:14.560 --> 0:22:19.120 new headquarters building in Seoul, but in nineteen fifty, North 0:22:19.200 --> 0:22:23.120 Korean forces invaded South Korea and the two nations officially 0:22:23.240 --> 0:22:27.679 entered the Korean War. At that point, Samsung relocated its 0:22:27.800 --> 0:22:31.919 base of operations to Busan. Seoul eventually would fall to 0:22:32.080 --> 0:22:36.560 North Korea, but it would eventually also be returned back 0:22:36.600 --> 0:22:40.159 to South Korea once the two countries negotiated peace, and 0:22:40.200 --> 0:22:42.879 at the conclusion of the war, Samsung would return to 0:22:42.920 --> 0:22:46.560 Seoul as its base of operations. Now, I've got a 0:22:46.560 --> 0:22:48.399 lot more to talk about once we've gotten to this 0:22:48.480 --> 0:22:53.080 point where things are a little more steady for Samsung. 0:22:53.359 --> 0:22:56.040 But before I do that, let's take a quick break 0:22:56.280 --> 0:23:08.960 to thank our sponsor by nineteen fifty one, Korean War 0:23:09.040 --> 0:23:14.720 is now technically over. Things would continue to fall out 0:23:15.040 --> 0:23:18.119 until nineteen fifty three. But nineteen fifty one, Samsung was 0:23:18.119 --> 0:23:23.040 pulling in revenues of two billion one By today's exchange rate, 0:23:23.400 --> 0:23:27.480 that's about one point seventy five million dollars. But keep 0:23:27.480 --> 0:23:30.640 in mind that, you know, like I said earlier, when 0:23:30.680 --> 0:23:34.679 you talk about currency conversions and adjusting for inflation and 0:23:34.720 --> 0:23:36.879 that sort of thing, there are a lot of factors 0:23:36.920 --> 0:23:41.320 that are present that you can't necessarily account for easily. 0:23:41.840 --> 0:23:43.919 So just think of that as like a round number 0:23:43.960 --> 0:23:46.399 somewhere around two million dollars in revenue, which was a 0:23:46.440 --> 0:23:51.080 significant amount for a brand new company. I mean brand 0:23:51.080 --> 0:23:54.560 new in the sense of this. Korea had no real 0:23:54.640 --> 0:24:00.480 corporations that were of any real significance around the time. 0:24:01.160 --> 0:24:03.399 It had some industries, it had some companies, don't get 0:24:03.440 --> 0:24:07.080 me wrong, but Samsung was trying to establish a brand 0:24:07.160 --> 0:24:12.919 new era in the post industrial world of Korea, which 0:24:13.280 --> 0:24:19.439 underwent industrialization very rapidly and under Japanese occupation. It's just 0:24:19.520 --> 0:24:23.359 important to know that the company had been successful even 0:24:23.400 --> 0:24:25.760 in the wake of the Korean War. Now, during this time, 0:24:25.800 --> 0:24:29.800 the company expanded its operations by purchasing other businesses and 0:24:29.840 --> 0:24:33.119 getting into new industries. In other words, they were diversifying. 0:24:33.480 --> 0:24:37.600 It wasn't just groceries and transportation. So was it consumer electronics. 0:24:38.480 --> 0:24:41.080 Not yet. It'd be a long time before they would 0:24:41.080 --> 0:24:44.520 actually get into consumer electronics. But this was in part 0:24:44.560 --> 0:24:48.240 an effort to get Korea independent of imports. Korea was 0:24:48.280 --> 0:24:54.040 importing tons of stuff, and Samsung leadership said, what if 0:24:54.040 --> 0:24:57.080 we were able to produce these things within Korea so 0:24:57.119 --> 0:25:01.040 that we removed that dependence upon other countries and grew 0:25:01.160 --> 0:25:05.159 the economy of Korea as a result. It was a 0:25:05.160 --> 0:25:07.800 way of trying to stand on their own. So the 0:25:07.880 --> 0:25:11.840 new industries included a sugar refinery and a woolen mill. 0:25:12.800 --> 0:25:14.880 And since it's going to be a while before consumer 0:25:14.920 --> 0:25:18.640 electronics enters the picture, we're going to talk about how 0:25:18.680 --> 0:25:22.280 those work because they involve technology. So we're going to 0:25:22.320 --> 0:25:26.200 talk about sugar refineries and woolen mills now, because I thought, 0:25:26.359 --> 0:25:31.400 why not, it's the perfect opportunity. We'll start with sugar refineries. Now, 0:25:31.440 --> 0:25:36.760 the purpose of these buildings, these manufacturing plants, these factories 0:25:36.880 --> 0:25:40.200 is to purify or refine sugar. So, in other words, 0:25:40.200 --> 0:25:43.040 this is all about getting rid of impurities to create 0:25:43.080 --> 0:25:47.479 a pure and consistent product that table sugar type stuff 0:25:47.840 --> 0:25:52.040 granulated sugar. Now, there are actually two types of facilities 0:25:52.080 --> 0:25:55.600 you would use with your typical sugar refinery if you're 0:25:55.720 --> 0:26:00.760 using cane sugar. The first is a raw sugar mill, 0:26:01.600 --> 0:26:04.959 which turns plant sugars into a raw form of sugar 0:26:05.040 --> 0:26:07.200 that you can find in many stores or if you've 0:26:07.200 --> 0:26:10.600 ever seen that golden sugar that you can use in 0:26:10.600 --> 0:26:13.080 different places. A lot of trendy coffee shops use this 0:26:13.520 --> 0:26:18.440 raw sugar. That's what comes from sugar mills. But you 0:26:18.440 --> 0:26:21.240 would also take this raw sugar and you could give 0:26:21.240 --> 0:26:25.359 it to a sugar refinery which will further refine the product. 0:26:25.440 --> 0:26:29.040 And that's where you get the white sugar that is 0:26:29.119 --> 0:26:33.359 free of various impurities. So sugar starts off as sucrose. 0:26:34.119 --> 0:26:37.439 It's a carbohydrate that you would find in plants, and 0:26:37.480 --> 0:26:42.200 it's a byproduct or actually a product of photosynthesis. That's 0:26:42.240 --> 0:26:44.960 the process by which plants take energy from the sun 0:26:45.040 --> 0:26:47.040 and they produce food that they can use for their 0:26:47.080 --> 0:26:49.639 own energy later on. Now, I'm not going to go 0:26:49.640 --> 0:26:52.159 into the whole plant cycle here, because I assume you've 0:26:52.200 --> 0:26:59.200 been through elementary biology. But just understand that plants take water, minerals, 0:26:59.440 --> 0:27:06.399 carbon ditide, and sunlight and end up producing, among other things, sucrose, 0:27:06.680 --> 0:27:10.000 which eventually will undergo further transformations to become stuff like 0:27:10.320 --> 0:27:15.360 plant matter, fibers, complex starches, that kind of thing. Now, 0:27:15.440 --> 0:27:19.240 all green plants produce sugars, but some do it in 0:27:19.359 --> 0:27:23.160 higher concentrations than others and thus make a better product. 0:27:23.240 --> 0:27:26.200 Our better crop for you to grow if you want 0:27:26.200 --> 0:27:29.879 to harvest sugar, and sugar cane is about twelve to 0:27:29.920 --> 0:27:33.800 fourteen percent sucrosse, which is why we grew so much 0:27:33.840 --> 0:27:37.040