By Tim Sweeney
In a recent article in INC. Magazine, John Westenburg gives five good reasons why starting a small business may be more likely to succeed and be more satisfying than attempting to do a “from scratch” start-up in pursuit of the thrill and prestige of being able to call one’s self a “founder.” Warren Lederer wrote a short critique of that article in which he points out the potential glut of people who are drawn into the tech sector in hopes of finding the next unicorn or disruptive technological platform. He implies that such attempts are more likely to result in frustration and failure. In reading those articles I realized that their authors were describing a path to success that has oft been repeated throughout history. One of the most remarkable parallels may be the almost miraculous transformation of feudal Japan into an industrial colossus and a center of technological advancement in the short span of only a few decades.
During the late Tokugawa Shogunate, the last feudal Japanese military government that existed between 1603 and 1867, Japan had a distinctive, insular and backward culture. Tokugawa Shogunate eventually gave way to the Meiji Restoration, which marked Japan’s opening to the outside world. The Emperor Meiji, recognizing that there was much that Japan could learn from more technically and industrially advanced nations, sought interaction and trade with these more modern nation states and cultures, with an eye to bringing Japan rapidly into the modern world. That advance depended on the mantra, “imitate, improve and innovate.” Meiji was wise enough to realize that Japan would need to learn from the ground up how to conduct its own industrial and technological revolution. The Japanese soon gained world renown as copiers of Western manufactured goods. In short order, copying or imitation gave way to a period of improving on designs and prototypes developed in other places. Finally, after mastering the techniques of copying and improving manufactured goods, true innovation began to flourish.
There are many examples of companies or groups following the “three step plan” of imitation, improvement and innovation, but none is more illustrative than the maturation of the Sony Corporation. In early post-war Japan, new technologies were beginning to find their way into the world of Japanese industry. One of the most remarkable consumer products to come out of World War II was the reel-to-reel tape recorder. These were large, cumbersome and expensive devices with poor sound quality. A group of Japanese engineers undertook to build a device similar to ones being produced by the Germans. In their efforts to copy the existing designs, they ran into a supply problem for magnetic tape. They were forced to develop a substitute material based on their readily-available supplies of paper, which they modified to take the place of magnetic tape. This same group of engineers, manufacturers and marketers built a series of these machines, continually improving the design to make the product smaller, lighter, cheaper and with better sound quality.
At that time, household radio sets were large, heavy pieces of furniture. There was an effort to make the devices portable, but the early designs were still relatively large and heavy and depended on vacuum tubes and dry-cell batteries. The Japanese group that had had modest success with copying and then improving the tape recorder sensed an opportunity in the movement to make radio receivers portable. They were aware of the emerging transistor technology that was replacing the need for bulky, fragile and temperamental vacuum tubes. The lead engineer of the group traveled to the U.S. and studied transistor manufacturing and use. Upon his return, he and his colleagues made further improvements to the design of their transistors with the intent of using them in a portable radio small enough to carry in one’s pocket. The resulting Sony Pocket Radio took the world by storm and was one of the first great successes in the emerging consumer electronics industry.
The Sony story can easily be compared to the approach presented by Westenberg and Lederer. When one starts a small business based on existing models, one does not need at the outset to be particularly innovative. The five steps outlined by Westenberg can help a new small business position itself to make ongoing incremental improvements. Once those business practices and product designs have been well established it could then be the ideal time to seek true innovation based on the platforms already in place.