You’ll hear a radio interview between a journalist and the CEO of a motor compan

PART THREE
Q: Considering all the odds against startups in Japan, why did you decide to take the chance?
A: I came from a poor family, but one of my schoolmates was wealthy. He owned a Swiss watch and wore socks to school while the rest went in bare feet and wooden clogs. I once visited him at his home and was surprised to see that he had his own room and a German-made train set. At 3 : 00 p. m. , a maid brought a snack, though just for him. I had one bite of what turned out to be cheesecake, and I’ll never forget the taste. When I asked my friend what his father did, he told me that he was a company president. So I decided I would become one too, though I had no idea what it meant, (laughs) And I never wavered. When I graduated from university (as an engineer), I decided to work hard, aiming to save 20 million yen ($ 170,000 at current rates) by the age of 35. I saved all of my basic salary and my bonuses, living off my overtime pay. Fortunately, I bought the stock of Teac Corp, where I first worked, when I joined the firm. By the time I turned 27, the value of the stock had gone up by 10 times to 20 million yen, my target. At the time, I was working at Ya-mashina Seiki (a Kyoto precision machinery maker), where I had risen to the post of company director. But I decided to quit when they decided to cancel my development project because of financial problems. It was time, I thought, to make my own company.
Q: How did you go about doing that?
A: It just so happened that the period coincided with the first oil shock in 1973. My mother, who was nearly 70, and my wife both begged me not to risk everything we had. But I thought that Sony and other startups that had succeeded did so in difficult times. So I took all my savings and launched my company. I had developed very good technology, the smallest and most efficient motor to be used in a tape recorder. I started up with three employees, who had followed me from my previous firm, in what was literally a shack in my yard. And we never stopped growing.
Q: Where did you find the capital to run your company?
A: There was no venture capital in those days and the banks wouldn’t lend money without land as collateral. So I bought land with my profits and then borrowed against it. For the first 15 years, that’s what I had to do to build up my business.
Q: How did you survive against your competitors, the big electronic companies, that often swallow up small, successful firms?
A: Our enemies are huge companies like Philips, Hitachi, Toshiba, and others. So we fought very hard and beat them all with better-quality products and rapid product development cycles. Speed is the most important factor, so we’re as fast as the semiconductor industry in developing new products.
Q: What factos are hindering entrepreneurs in Japan?
A: Unlike in the U. S., there’s little venture capital in Japan. Also, the talented engineers prefer stable jobs in the large companies. Another problem is that the big companies swoop in and grab market share, regardless of whether it’s a side business or not. Often, Japanese companies with $ 2 billion to $ 3 billion in sales are swallowed up by the big ones and become part of a keiretsu .
Q: Was your company ever in danger and, if so, what did you do about it?
A: I’ve been approached many times, but I’ve managed to stay independent. I know that if I ever become part of a keiretsu, I’ll lose my edge. So my policy is never to become a subcontractor and never to rely on one company, or more than 10% of my business. That’s why I prefer to go overseas, where 75% to 80% of my business is based.
Q: How did you build up international sales?
A: First of all, I did try to make it in Japan. But everyone I approached was only interested in how old I was, and how many staff I employed. Nobody cared about my product or my ability.
So in October, 1973, I invested in a trip to America, which was very expensive considering the high cost of air travel in those days. I traveled around for three months, with heavy bags full of my special motors. I would call potential clients after looking them up in the Yellow Pages and try to make appointments. That’s how I found 3M in Minnesota. I contacted the head of the tape recorder division. Lee Pastor, just by telling him (over the phone) that I had a great motor for their copier machines. He agreed to meet me, so I called on him soon afterward. He listened, took a look at my samples, and gave me my first order worth $2,000 at the time. It wasn’t much considering I had spent $ 8,000 on my airfare to the U. S., but I’ll always be grateful to 3M for that start. The next year, IBM commissioned me to design a floppy-disk-drive motor for a $ 1 million order, followed by others.
Q: How is your business doing today?
A: It’s well dispersed between the U. S. , Europe, Asia, and Japan, and we’re constantly designing new motors for all the new electronic products coming out. In total, we make 38 million motors each year, including most of the world’s spindle motors that go into computer disk drives. I want to dominate the market for all types of motor movements. That’s why two years ago I purchased an auto motor subsidiary of Nissan Motor and why last year I bought a Toshiba spin-off. In the past 10 years, I’ve bought 17 companies in all, including two U. S. firms. All are movement-related, because I intend to become the Intel of motors.
Q: What are the advantages of being in Kyoto?
A: Kyoto supports venture businesses. Kyoto people are not interested in building huge companies. Their traditional business, like pickle making and silk weaving, have been around for 200 or 300 years as small or medium-sized enterprises. Kyoto people take great pride in being number one. It was the first Japanese city to build an electric power generating plant, and an electric tram system. For the entrepreneur, there are many investors here with funds to invest. There are a lot of banks despite the small population, so that means more capital for venture businesses. Also, it’s easier to attract good staff because everyone wants to live in Kyoto. It’s the reason I decided to start up in my hometown.
Q: What obstacles do startups face in Japan?
A: Japan doesn’t have many venture businesses. The main reason is that banks require small businesses to come up with three to five guarantors for any loan they extend. What that means is, if your business goes under, and there is a high likelihood of that happening during the first 10 years, your guarantors are held financially responsible. They stand to lose everything they own if your business goes under. Once you do go bankrupt in Japan, it’s very .difficult to start up again. That’s why many promising firms end up joining the networks of the large companies.
Q: Do you have any advice for those planning to launch their own businesses?
A: You have to be the best in your field, whatever you do. Never number two. I hate being number two. I always sit in the seat marked with A whenever I take a plane or a train. That’s the kind of mind-set you need.