The Rise of Sony

Cameron: [00:00:00] Welcome to Lost Threads, episode two. A podcast about forgotten stories from history. My name is Cameron Ezell.

Cory: And my name is Cory Munson. Cameron, I got some good news for you.

Cameron: What's up?

Cory: We're not looking at a dirt bag this week.

Cameron: Oh, nice. So you've got someone good for us.

Cory: I do. We're gonna be talking about the Japanese company, Sony.

Have you ever heard of Masaru Ibuka before?

Cameron: Not before this. No, I had not.

Cory: Can you name a couple of famous CEOs? Industrialists in American Society,

Cameron: Steve Jobs is a big one. You've got Andrew Carnegie.

Cory: These are individuals on the cutting edge of a new natural resource or a new technology, knowing exactly how to most take advantage of whatever that concept was, whether it was Henry Ford with the assembly line.

Cameron: Right. And I think what you're getting at is that we get a lot of this [00:01:00] influence from these Western figures, but these big companies like Sony, which obviously have a huge hold on American consumerism, we don't know much about the start of that company.

Cory: I think some of the biggest companies that exist, especially in the electronics and and technology parts of the economy are Asian companies.

Sony, Toshiba, Honda, Mitsubishi. They're huge, but we don't really talk about where these companies come from. Some of these companies are very, very, very old. But Sony's story is really kind of interesting because this is your story about a guy who starts out, has no money, just has ambition and some good ideas, and he was able to build an electronics empire that is one of the largest companies today.

So today we're going to be talking about Masaru Ibuka and his founding of the company Sony. So let's go ahead and start this story right after [00:02:00] World War II in 1945.

Cameron: Yeah. Japan is not in a good place right now, is it?

Cory: Japan's economy is in absolute shambles now. World War II was the end of the war for the United States, between United States and Japan. But World War II is also the end of Japan's conquest. Its wars in Southeast Asia and in China. If you look at a map of Japan during World War ii, they have land all over Southeast Asia. They have Manchuria, they have Indonesia, Papua New Guinea, the Philippines. They were going after everything in that area because the thing about Japan is that it does not have a lot of natural resources.

They don't produce gas and oil, they don't have access to rubber. Pretty limited in terms of minerals. So to get all of those things to be able to compete with the other great nations of the world at the time, they had to get those resources somewhere else. So even before World War II starts, Japan [00:03:00] is going all over Asia, trying to acquire resources, basically setting up colonies.

So when World War II ends, its society has been predicated on pouring all of its resources, all of its productivity, into a war effort, into its empire. And once that was all destroyed, once all their colonies were taken from them, the bulk of their natural resources were absolutely gone. Their cities were in ruins during the bombing campaigns that the United States had in Japan, 67 cities were on their target list. The city of Tokyo, the Capitol, the largest city in Japan, 12 square miles of it were just absolutely wiped out. In the, uh, the fire bombing campaign of Tokyo. 150,000 civilians died in the Tokyo Fire bombing campaigns.

Cameron: Jesus.

Cory: Can you imagine if like our capital city, Washington DC right? Was just bombed for days and days straight by hundreds of B 52 bombers?

Cameron: [00:04:00] God. So they lose their colonies, they lose tons of people. They don't have any natural resources. They're just basically starting from fresh at this point.

Cory: Yeah.

Cameron: And just trying to rebuild

Cory: Absolutely. And, and worse than fresh 'cause it's not like they just get a clean slate. They are now between Communist China and the USSR and the United States. They are seen as an unstable, unpredictable, and economically unviable region, and no one knows what the heck is going to go on in Japan. Um, the United States is occupying Japan right after World War ii.

It's an occupying government. There's American soldiers in the streets, and they genuinely thought that Japan might go communist because you have a lot of people looking at this destroyed country of theirs. You have these American imperialists, right? The western democracies moving in, and they can look across the sea of China and see that, yeah, even though things aren't going great in China, at least they're independent.

So maybe there might be something to this communism. So Japan's future at this point is completely [00:05:00] uncertain. So let's start this story here at the end of World War II, in the ruins of Tokyo, with an engineer by the name of Masaru Ibuka. A little bit about Ibuka. He worked as a researcher in the Japanese Navy during World War ii.

Before the war, he worked in a company that processed film in motion pictures. When the war ended in 1945, he kind of had to decide what he was going to do with his life. The only thing that he knew for certain is that he wanted to make his own business. So he decides to move to Tokyo to seek out his fortune.

Now he knows he wants to make something, but he doesn't have anything, right? It's just he's just one guy with a good brain and a toolbox and some connections from the Naval Research Institute. Some engineers that he's friends with, so some of them tag along with him. But one thing that he can do is he can repair radios.

So they rent out this, they don't even have a name yet. They just rent out this third story office in a bombed out department store building, and there's not [00:06:00] even any windows in it. And they just get to work doing calls to repair radios around Tokyo. So why radios? The Japanese military, first of all had been disassembling people's radios, but also that was kind of the only form of entertainment that people had at the time.

So they had a lot of orders to do house calls to repair radio, so great. That's, that's kind of their business at the start.

Cameron: But it's really not any, it, it's just kind of doing service. It doesn't sound like that was what Ibuka was going after.

Cory: No, not at all.

And he couldn't even really make a lot of money off of this because as we were just talking about, there's no money in Japan.

His workers are actually being paid in rice, I read, but they didn't really complain about that too much because there's not even a lot of food. So it's just crazy to think about this very white collar country in a lot of ways that engineers are gladly working just to eat. You know, you would hear that in like an agrarian society.

People are like, oh, I, you know, I worked the fields just to get some bread. But these are engineers, these are people that were making bombs a couple of years earlier.

Cameron: It's like back to feudalism.

Cory: It is. And you know, the [00:07:00] interesting thing about Japan is that if you were to go back to the 1850s, less than a hundred years earlier, that's what Japan was like.

It was like going back to the Middle Ages. People had pikes and muskets and rode horses and had castles. How Japan got from that to one of the most industrialized societies on earth. I mean, it's just their, their society changed so quickly. So Ibuka's little radio company gets a little bit of a blurb in the newspaper.

And an old associate of Ibuka from the Japanese Naval Research Institute sees that Ibuka is in Tokyo, and he is working on radios. He always liked Ibuka. So Morita goes and visits him and he sees the Ibuka has some good ideas, he has a good staff. You know, they, they don't have any resources, but he can tell that he has a lot of heart.

So Morita's contribution to this story is that he is the money. He is the bankroller. He gets his dad to to offer a loan. Morita is kind of signed on as a co-founder, and in 1946 they start the Tokyo [00:08:00] Telecommunications Research Institute or Totsuko. When they started Totsuko, they had to have some sort of a founding prospectus or a, a declaration of the start of their business, and it kind of just holds kind of what their philosophy is. And I just wanted to read a little bit of it because it's written by Ibuka and it talks about why he's starting this company and, and what his vision for it is in the future.

So Ibuka writes in the, uh, in the Totsuko prospectus. During the war, though we were subjected to some of the poorest conditions, we tried hard to fulfill our mission. I experienced how passion together with capabilities can be driven by a profound and fascinating mission. I also realized what could weaken these intense motivations.

Thus, I began to conceive of ways for these motivated individuals to be united on a personal level and unleash their technological capacities without any reserve. If this could be accomplished, the organization would bring untold pleasure and tremendous results regardless of the meagerness of its [00:09:00] facilities or the limited number of employees.

So in essence. He wanted to set up a situation where his engineers could enjoy designing whatever they wanted, using cutting edge technology, and he wanted to make products that the general public would buy.

Cameron: It's amazing they, he wrote it all in English.

Cory: (laughs) They have funding, they have a staff, I think it's like a dozen people.

They have a founder with some sort of a vision.

Cameron: Is this like a huge bank roll that they have now?

Cory: No.

Cameron: Or is this still pretty meager?

Cory: No, no. I mean, it says like 112,000 yen. I have no idea what that is, but this is, this is very meager. They don't,

Cameron: okay.

Cory: They, I mean, they don't have tools like they, they don't have equipment. To get their tools they had to go through the black market of American soldiers who had stolen tools and parts off of their bases. So there was this secondary market where Americans were just pilfering things off of bases, and that's how Ibuka and, uh, and Totsuko, the, the new company that he started, got their, you know, their [00:10:00] screwdrivers and their saws and whatnot.

So they have to find a product to make that's not radio, something that they can sell, something that people will buy. Something that will give as engineers something to do. Now, like I said, they don't have a lot of supplies. They had to scrap together whatever equipment that they could find and decide what can we do with this.

Like, did you ever watch Junkyard Wars?

Cameron: Uh, yeah. I was just thinking about that the other day actually, because didn't they have a whole thing where I, I thought it was an ongoing thing, but maybe it was just an episode where they needed to make a vehicle that could run off of like a cup of gasoline the longest and there was one that ran forever anyway.

Yeah. Yes. I remember.

Cory: Well, well, it's, it's also like, uh, chopped too, you know, on food network.

Cameron: Mm-hmm.

Cory: Like, they open the basket and they don't really know what they're going to make until they see all the supplies in there. So it'll be like, okay, I got carrots, I got ketchup, I got, I got uh,

Cameron: shrimp chips

Cory: and I got pretzels.

What do I do with this? So that's kind of how these were like, they would go like, look at whatever was on sale at the junkyard. They would [00:11:00] buy it all up like, oh, we have a bunch of bamboo and screws. What can we make with this? So that's kind of where they're at right now. So the very, very first product that Totsuko makes is a rice cooker, but it's basically like.

A wooden barrel. Can you see the picture of it that I'm showing you?

Cameron: Yeah. You showed me this picture it, it reminds me of a manual ice cream maker. 'cause it's like that barrel design, but it's got a cord running off of it that looks like it would kill you.

Cory: Mm-hmm.

Yeah. And there's, I mean, it's, it's a wooden barrel,

Cameron: but tiny.

Cory: And there's a heating element on the bottom. And that's it. That was their first product and it, it didn't work, I guess at all. I mean, it would either undercook or Overcook the rice and

Cameron: great product.

Cory: Yeah, and actually like, I couldn't tell, 'cause some sources were kind of conflicting about this, but I don't think they actually sold any, I don't think they got it out of the prototype stage.

Or maybe if they did, just nobody wanted to buy it. So their first product was a little bit of a bust. Their second product that they came out with. And, and keep in mind we're talking about like within [00:12:00] a year span. This is, this is 1946. Right after, um, they formed the company Totsuko. So the second one they make is their heating cushion.

And one of the sources, they just just said simply it was dangerous to sit on.

Cameron: I mean, if I had used their rice cooker, I don't know if I would be comfortable sitting on their heating cushion.

Cory: Yeah. I was reading reports of how people's pants got burnt. Like I don't know if it started any fires, but it was definitely hot enough to discolor your pants.

Cameron: Geez.

Cory: Maybe. Maybe some like mild first or second degree burns on your skin.

Cameron: Well, they should have sold some asbestos pants with it.

Cory: (laughs) No kidding. But apparently these sold. Because what they were saying was that people in Japan wanted to buy products, right? They're, they're just like us. They, they want to go to the department store and just buy something and there's not a lot of products in Japan at this time.

So people bought these, they were able to make a little bit of money off of them. I'm sure they felt pretty good that, you know, that a dozen highly trained engineers were able to come up with some kind of a [00:13:00] product to, to sell to the Japanese market.

Cameron: Yeah, I, I mean, we didn't touch on it, but I'm assuming after the war they were, they had to have created their own products within Japan because I don't think they're able to get a lot of imports from other countries.

Cory: I mean, I would guess just the United States at this point, and I can't imagine the United States was giving a lot of stuff. A lot of cool stuff to their mortal enemy at the time. I mean, have you seen some of the propaganda that the United States had about Japan?

Cameron: Oh yeah. God, it's awful.

Cory: And at this point they have to move out of their, their department store.

Office building. I'm not sure if it's because it was being converted into something for American troops. I read that in one thing, but I, I, I do know that they just wanted to get out because I think they were starting to get a couple of more employees. They couldn't stay there. I mean, like I said, they didn't even have windows.

I thought this story was kind of fun. They wanna move. And the way they do that, they decide to just walk around the city on foot until by chance at the [00:14:00] end of the day, they find an old warehouse that they can rent. And that old ruined warehouse is still today, Sony's headquarters.

Cameron: Wow. That is insane.

Cory: Yeah. I think that that's a lot of pride in, in their origin and you know, in their roots. It's like if Apple had turned their headquarters into Steve Wozniak's, you know where his garage used to be?

Cameron: Yeah, his garage. They just built around the whole neighborhood

Cory: because I can't imagine that that area was very nice at the time if this company with no money was able to get a warehouse,

Cameron: I'm guessing they've at least expanded, maybe like built off of that since then.

Cory: I would have to think so. Probably did a little bit of a paint job on it.

Cameron: Yeah, a few touchups here and there.

Cory: So at this point they do radio repairs. They had a crappy ice rice cooker and they had a bad heating pad.

Um, but they actually did,

Cameron: and they're feeling pretty good about themselves too.

Cory: They're selling something right. They're not bankrupt. And actually, they probably felt good about themselves because they got some [00:15:00] contracts with the Japanese government. Now, Ibuka, the hero of our story, he did not want to just be a government contractor.

He did not want to just sell parts to the Japanese government like vacuum tubes. But if that's what brought in the money at the time, that's what um, he was going to do. So they did a little bit of government contracting. Let's fast forward four years now to 1950, and we are going to talk about their big break that they got, and that is the tape recorder.

I read a quote where Ibuka said the Americans had brought their music with them and the people were hungry for it. He was really into the idea of doing something with sound, right? He liked radios. He started with radios. So he thought that he should make some sort of an affordable product for the general public that would produce sound.

So it was kind of interesting. One day he was dropping off some equipment for an order at a military base. When he saw that they had these voice recorders and it just kind of instantly clicked with him that that is what the company should make. [00:16:00] They get their hands on two of these wire recorders. And they take them apart.

They have no idea how they work. They study the innards and they try and figure out how to replicate them. And again, I just wanna remind you that these folks are working out of an old warehouse with stolen tools basically. They don't have plastic, right? They don't have the ability to make plastic or buy plastic, so they make the shell of their prototype voice recorders out of paper.

Cameron: Wow.

Cory: They don't have the ability to coat the tape because they, you need to take, it's a magnetic tape recorder, so you need to coat it in something to protect it. So they just trial and error their way to solve that problem. They don't know how the Americans do it, um, like they literally had a frying pan on an oven, and they would use that to make their own ferric oxide.

And then they had to figure out how to apply this ferric oxide to the tape. And like, one way that they did that, and this is kind of a, an infamous or a famous story in Sony history, is that they used, uh, rice, like [00:17:00] they cooked it down and made it into a paste and then used that to apply this. You know this metallic powder to their tape, and

Cameron: they were just trying anything.

Cory: It didn't work. So after a week of working on this prototype a week, right, Ibuka sees it at the military base. He gets his hands on the voice recorder, he takes it back to his guys. They take it apart. Within a week, they have a prototype.

Cameron: That is a crazy turnaround time.

Cory: I know.

Cameron: I don't think I could do that within a year.

Cory: Their voice recorder weighed a hundred pounds, but

Cameron: Jesus,

Cory: they had a product, they could sell something. I have a picture here that you can see of them. The, the big green boxes. They are pretty gigantic.

Cameron: Oh yeah. It's like a, it's got a handle on top when it's closed. It's like a thick uh briefcase.

Cory: Okay, so Ibuka had an idea.

He has these voice recorders, but who is he going to sell them to? Well, he could sell them to the government, but his idea was that he was going to sell his voice recorders [00:18:00] to schools. So why schools? Well, do you remember how uh, school is treated in the Simpsons? Cameron?

Cameron: Oh, with, uh, Troy McClure here?

Cory: Yeah.

With the film reel. Teach the kids.

Cameron: Yeah.

Cory: So before World War ii, before the Americans show up, Japanese education was pretty rote. It was basically direct instruction. Copy this down from the whiteboard. Well, the blackboard. Once the Americans arrive, they have changed the Japanese education system to being basically a series of propaganda films.

Japanese kids sit in the room, we throw the reel on. They watch these videos of, I don't know how to be polite or do good at your job. Right? Like whatever, whatever film.

Cameron: How to love capitalism.

Cory: How to love capitalism. But they play these videos in English to a Japanese school children audience. So Ibuka's idea was that he was going to sell these voice recorders to schools.

They were going to dub over whatever the, the film [00:19:00] was playing, and so the students would be able to hear the Japanese dub while the video projector was going.

Cameron: I guess that helps. I, I don't think I would've learned anything if all the millions of videos we watched back in school were all in German or French.

Cory: Well, let's talk about that for a second, because you and I went to the same high school, and I certainly remember watching a lot of videos during my tenure at that school.

Cameron: Yeah, just tons of lazy teachers.

Cory: Do you remember some of the ones? I watched October Sky so many times. Like every time we had a sub, we would watch October Sky.

Do you remember that?

Cameron: Yeah. Because there was a science fair in it. And so it's a perfect, uh, video for a science class. (laughs)

Cory: Then how do you justify Rudy in science class?

Cameron: (laughs) I don't know why we watched Rudy so many times, either.

Cory: We watched, okay, these tape recorders sell extremely well. Schools are buying them up.

This is a, I mean, he, he had a great idea. He saw a need in the society. He made a product [00:20:00] that didn't exist. And he was able to sell that product and make a lot of money off of it, um, which was kind of what Sony would continue to do throughout its career. Okay, so two years later, after the success of their first big product, the voice recorder, the magnetic tape, voice Recorder, in 1952, Ibuka decides that he's going to travel to America.

Um, he wants to go on a tour of factories of the United States. As I read in one article. It said that Ibuka knew, the Japanese knew where their bread was buttered, that really any kind of consumer good that anyone would want to purchase in the 1950s came from the United States. So he wanted to travel to the United States to see how they did what they did, and to try and maybe not copy it, but emulate it or improve upon it, or see if there was some kind of a niche.

While he's on tour, he gets a suggestion from a friend he has in the United States to go by and and visit a little company called Western Electric. Now, Western Electric had recently secured the lease on [00:21:00] this brand new technology: the transistor. Western Electric didn't develop the transistor; that was developed by Bell Labs back in 1947.

While he's touring Western Electric, he gets to talking about the transistor. Um, he agrees that he wants to lease Western Electric's technology. He can't buy transistors, so he's going to have to make the transistors home in Japan, which is gonna make things a little bit difficult because Totsuko is only six years old and and suddenly they're signing on for a big project like this. Nonetheless, they build their own factory and they start to get to work making their own transistors. So, Cameron, I asked you to look into transistors a little bit because it's a big part of Sony's success, but I did not want to learn anything about them because you're much more of a tech guy than me.

So what do you got?

Cameron: It's funny, like I've been a tech guy for a long time, but I've never really read into any kind of detail about vacuum tubes or transistors or how they work. Just 'cause I'm working [00:22:00] in software and the transistors are in a case and they just do everything. So I didn't really bother to learn anything about them.

But what's interesting, obviously the, one of the huge innovations with transistors over vacuum tubes is, uh, not just the size, obviously, 'cause vacuum tubes are like the size of a light bulb,

Cory: huge,

Cameron: maybe a little bit smaller, and they end up being pretty heavy once you need to start, including a bunch of them.

Um, but transistors are also much faster. So essentially just like a vacuum tube, they either amplify the current or they switch the current. And one of the early inventors, uh, of transistors, his name was William Shockley. Just to kind of give you an idea,

Cory: oh, that's cute

Cameron: about amplification. His quote was, if you take a bale of hay and tie it to the tail of a mule and then strike a match and set the bale of hay on fire, and if you then compare the energy expanded shortly thereafter by the mule, with the energy expanded [00:23:00] by yourself in the striking of the match, you will understand the concept of amplification.

Um, the other use is a switch, which means it can hold a state of on or off, or in other words, a one or a zero, which we know is the basis of computing. Obviously, you know, over time there's, have you heard of Moore's Law?

Cory: I've seen it in a book.

Cameron: So Moore's Law essentially just states that over time you're going to be able to double the number of components per circuit and things are going to get cheaper, so smaller and cheaper over time.

And if you compare a transistor back then to a transistor today. It's just crazy the scale. So back then a transistor was something you could like hold in your hand. Today you can fit somewhere between half a billion transistors in an area the size of a fingernail.

Cory: But would you say, 'cause the, the technology that existed before [00:24:00] transistor was the vacuum tube.

Um, and obviously there's a big size difference there. Is there a, there's also a big processing difference as well, right?

Cameron: So that comes from, uh, what we call semiconductors. I've heard, uh, you know, semiconductors all the time. I didn't really think about it, that they call it that because it can't really conduct electricity.

And it's not really good at, in insulating. So it's a semiconductor, um, and they're made from silicon, which itself can't conduct electricity. So what they do is they treat it with impurities, they give it free electrons that make it very good at conducting electricity. Um, as they did a little more developing with transistors, what they ended up, uh, coming up with was this metal oxide semiconductor field effect.

Transistor, or what they shortened that to is MOSFET that was developed in 1959, and that's the method we still use to this day for making transistors. [00:25:00] I feel like it would be a no-brainer during that time to compare the two between, you know, using vacuum tubes versus transistors. Especially when you're making things like radios or voice recorders.

Cory: I'm, I, you know, that is such a good point, and I personally don't understand why the implications of it weren't just immediately understood. And maybe it was because they were really expensive or they required really specialized equipment to make. Or maybe it was, why would I miniaturize the electronics that already exist?

There's really no need to do that. Like when Ibuka went to go visit Texas Instruments, the people at TI were like, yeah, you could. I mean, an application could be putting these into hearing aids 'cause that is an example of an electronic product that needs to be small. But at this time in the 1950s, there were not a lot of products that needed to be small.

Cameron: And that's, uh, hearing aids are a perfect example of amplification, which is what transistors [00:26:00] do.

Cory: But Ibuka was not interested in making hearing aids. 'cause he's like, okay, who am I gonna sell that to? Like. Some rich, old Japanese people, like, I'm not, it's not a market that's not like a, a thing I can really capitalize on.

So he's like, no, I don't wanna, I don't wanna lease your transistor technology and make hearing aids. I wanna do something a little bit different. So his idea, I mean, this is where we're getting into the, the Henry Ford, Steve Jobs territory where he's like, he sees this new technology and he's like, I know what we need to do with that.

We're gonna put that in radios, because radios could absolutely be smaller. I don't know if you've ever seen like a 1940s radio, but it's a piece of furniture, basically.

Cameron: Yeah. They're enormous.

Cory: So he is like, okay, I'm gonna put them in radios and I'm gonna make radios really small. Now, I will say that he was not the first person to pick up on the idea of putting a transistor in a radio.

Um, there was actually a company called Regency in 1954 that like they originally, they just built [00:27:00] home antennas, but the CEO of Regency Ed Tudor, he had the same idea too. He's like, what if we put a transistor inside of a radio and then sold them? Commercially to the public, right? So he was the first person to think that, and this is only about a year before Ibuka has the same idea.

So he makes, uh, Regency uh, Tudor at Regency. They do make this first transistor radio. Um, it sold okay, but in order to make it cheaper, because there's a huge cost in using a ba, like a brand new technology, they had to cut the quality of basically everything else in the radio in order to make it smaller.

So it was already selling for $400 in today's money, but it sounded like crap. It was a lot worse than a vacuum tube radio. So that might be another reason why people weren't too much about abandoning the vacuum tube because the products needed a natural evolution to be comparable in their quality. I imagine something like [00:28:00] vinyl versus tape, or do you think that'd be a fair comparison?

Was like CD and tape instantly better than vinyl.

Cameron: I mean, CD was a huge jump in quality over tape.

Cory: So I guess like vinyl to tape, even though like so like tape was a lot easier and cheaper to produce, but it wasn't quite as good as vinyl. I think that people saw the same thing with like transistor radios and vacuum tube radios.

Okay, so Regency makes the first transistor radio. And by the way, if you can find these things on eBay, they sell for a lot of money. Um, like thousands of dollars. If you can get your hands on some of the first transistor radios ever made, you know, made out of Bakelite, the Regency Transistor radio, they're very rare because not a lot were sold.

But I wanted to talk a little bit about Ed Tudor, who was in charge of Regency at the time. Remember, he's the guy that had the idea to put transistors in radios, and he made a relationship with Texas Instruments and leased their [00:29:00] product. But this is what he says about the transistor radio at Texas Instrument.

This is Ed Tudor at an award ceremony in 1980. He says, TI caught the industry napping is and was the only one that could mass produce when the technology took off. He takes time to talk about, to thank all of the component manufacturers. At this time in the 1950s, he says you couldn't just go out and buy every part of a radio.

People had to manufacture, design, and invent new components for our radios to work. So for his transistor radio to work, he couldn't just go down to Radio Shack and get, you know, a couple of parts, like if they needed a special part, there had to be another factory. Or another group of scientists and engineers that made that part for their transistor radio.

Cameron: Mm-hmm.

Cory: Then in this award ceremony, someone from Texas Instrument comes up and he gives remark about, gives remarks about, you know, this moment in history when transistors were first put into radios. Not only radios, but the first commercially viable product [00:30:00] for the public to consume. And he talks about how hard this was to get done and how much innovation it required within the industry to develop the transistor technology for the general population.

Okay. So it's just a bunch of like, you know, older guys in the 1980s talking about how tough this was in the 1950s for them to do. It's brand new technology. Before I bring up why I'm talking about this, let me just add one more part, and this is why I love this story about Ibuka and the beginning of Sony.

In the 1950s, the United States is in its prime. Not only is it the hegemonic power of the world, but it represents 27% of the global GDP in 1950.

Cameron: Wow.

Cory: Quarter of all the money in the world is in the United States at this time. Japan has 3% of the 21 million cars manufactured globally in 1950. Half of those are made in the United States.

Japan makes a 10th of 1% of all the cars made in the world.

Cameron: [00:31:00] That's a big difference.

Cory: So all that I was thinking when I was watching this award ceremony with Ed Tudor, you know, Texas Instruments and Regency Radio; while the United States was investing its titanic focus on developing this brand new World War II era technology for the consumer market, this tiny company in broke Japan was doing the same exact thing, you know, 5,000 miles away. Just a dozen or so really smart engineers who kind of had the same thought at at the same time. Now, remember, Japan does not have factories making any part of the transistor. All that they have is a piece of paper that says that they can license, they can use the technology that was developed in the United States.

They have to make every single part of the transistor and put it in radio and make it work and make it economically viable. Make it something that the public wants to purchase.

Cameron: Man, that is [00:32:00] a lot. Um, at this, at this point, are they called Sony yet or are they still under the name of the research institute?

Cory: They will be called Sony as soon as they want to sell these radios internationally. I already talked about how innovative they were with making the tape recorder. I'm not gonna go into all of the things that they did again to develop their first transistors and then put them inside of radios. But by 1955, they had developed their first transistor radio.

It didn't work super well. It like it came unglued in the front and it just kind of fell apart in your hands. So they had to redesign it a little bit. It was modeled after the UN building in New York. Like it looked kind of like it, so it was nicknamed the UN. But anyway, in August of 1955, Ibuka and his engineers developed the TR 55.

It's the first transistor radio sold in Japan. I think one of the, like the second or third sold globally. [00:33:00] And it's here at this point, Cameron, that they decide that they are going to change the name of their company so they, they can put it on their product. Nice big letter so people know that who is selling it.

Um, and they spent a little bit of time trying to come up with a name. They had, like, they had a couple parameters, right? They wanted it to be a short international sound. So they looked at Latin and they saw the word sonus, which comes from the Latin word for sound. But they also wanted to incorporate a term that they had heard American soldiers call Japanese men, and they would call them sonny boys or sonny.

So they kind of combine those two concepts and they used, they made the word Sony. Nice short, simple rolls right off the tongue. Um, and then the fact that they didn't market this product in, you know, their traditional Japanese characters, they did it in the Roman alphabet shows that their eyes were outside of Japan.

They wanted to sell internationally. Um, and actually they also to go with that sonny boy thing, their very first mascot, and we'll put this picture up, is a, and you can see that picture there. It's a little, a little Caucasian boy with [00:34:00] brown hair, and his name is Sonny Boy, and he has the word Sony printed on his shirt.

The other brains of this operation, Morita, he arranged for these radios to be sold in the United States through a company that made watches. And the name of that company is Bulova. Have you ever heard of this company? Bulova?

Cameron: Yeah. Yeah.

Cory: They're still around today. Apparently. I'd never heard of them before.

Cameron: Oh yeah, they're a big watchmaker.

Cory: Bulova.

Cameron: I think they make One second actually. Gimme one second. I have a Bulova clock in my office actually.

Cory: Do you?

Cameron: Yeah. A company I worked for gave it to me on my fifth anniversary.

Cory: That makes this story pretty cool. 'cause I have a little fun fact to share about Bulova.

Bulova wants to sell the radios in the United States, however, they don't want the word Sony on it. They want the word Bulova on these transistor radios. You know, they're just gonna buy them from Sony and then they're going to market them as their own product.

Cameron: Greedy

Cory: Wisely, Morita's like, no, [00:35:00] we worked our asses off to build these radios and to, you know, license the technology.

No, we're, we're gonna put our name on it. So he turns down Bulova and in 1956, they found a new US dealer that would let them keep the word Sony and the radios could be sold in the United States. Um, but just a quick thing about, uh, Bulova, I was just reading around about the company. Like I said, they, they've, so they were making, making watches and timekeepers since the 19th century.

And then I saw that during the Apollo missions, companies were competing to have their timekeeping devices onboard the Apollo missions and to like go to the moon. 'cause like how cool is that for a watchmaker to say that our timekeeper was in the Apollo missions. On the Apollo 15 moon mission, the Mission commanders government issued expensive timekeeper, the official mission timekeeper, failed when they were on the surface of the moon.

Cameron: Oh man. [00:36:00]

Cory: But he still had his personal Bulova watch on which he'd brought to the surface, and I believe it's the only privately held watch to ever be on the moon. And because it was like kind of the semi-official timekeeper during a part of that mission, that watch in 2015 sold for $1.5 million.

Cameron: Wow.

Cory: Which is just crazy and it's one of the most expensive watches ever sold.

Cameron: I, I don't think they're that like, highly renowned these days for their clocks and watches. I think they're kind of a, a subpar brand at this point.

Cory: It sounds like your company really appreciated your time with that Bulova watch that they gave you.

Um, I went down the rabbit hole a little bit more on, 'cause I was like, okay, if 1.5 million a Bulova watch that was on the moon, it's one of the most expensive, what's the most expensive? You wanna gimme a guess What you think the most expensive watch ever sold is at auction?

Cameron: I'm guessing, I think it was the Steve McQueen Rolex, right?

Cory: Nope. Not the Steve McQueen Rolex. [00:37:00]

Ah, this watch was. Patek Philippe, one of a kind reference 6300 A010 Grand Master chime. And in 2018 it sold for $31.2 million. The, this watch alone had six patents on it. Um, it took seven years and more than a hundred thousand hours to create the watch. It had like a bell strike on it.

This is like a wristwatch. It had like a bell that strikes on it, like it was just an it's a crazy watch. 31.2 million. Anyway, that doesn't have anything to do with our story.

Cameron: Rappers love talking about having the Patek on their wrist.

Cory: The TR-55 and then the more compact form, the TR-63 were absolute hits.

They were global hits. There's a story that I read that one of the first big breaks that they had was that there were a bunch of transistor radios being stored in a warehouse somewhere on the East coast in the United States, and some thieves broke into the warehouse. Inside, there's a bunch of different radios from a bunch of different companies, Regency, Sony, but [00:38:00] the thieves only stole Sony radios, and that's what made the headlines.

Sony Radios stolen from, uh, warehouse. Well, who's Sony? This is a brand new company from Japan. Why did they steal their radios? Oh, well because they're better. Why would the thieves steal those ones and not the other ones? Because they wanted Sony radios 'cause they knew that they were high quality.

Cameron: That, that's some of the best press you can get.

Cory: Absolutely. The last little story I wanna tell about the radios is that the space race for these transistor radios. 'cause now there are multiple companies making these, but the space race was to make these radios as small as possible so that they could fit inside of your shirt pocket. Um, they weren't quite at that point in the early stages, especially with the TR 55 model, which was their kind of their second model.

So what they did is, uh, they had salesmen put them into their shirt pockets, however the shirt pockets had been expanded artificially to be a little bit larger than your, your average, uh, American shirt pocket. But that's what you gotta get.

Cameron: That's pretty good. Just this huge, like just [00:39:00] eight inch, uh, little pocket on your shirt.

Cory: From here, Sony just takes off and, and we're just gonna turn this into a little bit of a timeline. Um, they have built up so much momentum. They're starting to build international recognition. I just wanna run through some of the milestones that Sony hit on their way to being just a household name in the United States today.

So. 1955, they sell the transistor radio. 1960, they introduced the world's first transistor television and 1961, they become the first Japanese company to ever be listed on the New York Stock exchange.

Cameron: I looked into the first transistor TV that Sony made and. I thought that they had made the first transistor tv, but not quite.

So the one that I found, that was the very first, actually, let me send you a picture of Sony's first. So this was like maybe the second one ever made.

Cory: Oh wow.

Cameron: See? Not bad [00:40:00] looking, right? Like that's something that you could put on your kitchen counter.

Cory: Yeah.

Cameron: Let me show you the first one. This is from Philco. It was called the Philco Safari.

Cory: It looks like a waste bin.

Cameron: It looks like a periscope almost like what they did is Philco put the cathode ray mounted vertically and then used mirrors to reflect it out. So you're looking through this tiny little viewfinder, whereas Sony. Put the cathode ray horizontally

Cory: And it looks like pretty cool actually.

Like not only did they make a better product, but they made a product that looks pretty sweet. Like this Philco Safari looks like a, it just looks like crap. A radio with mirrors on it basically.

Cameron: Whereas, like I feel like the Sony one kind of stands the test of time in terms of design. Obviously we've got flat screens now and we wouldn't use anything like this, but I think it's still pretty cool looking.

Cory: Um, well, it's like the, the first [00:41:00] flat screens, like the ones that came out, you know, in the eighties and nineties. They didn't, they didn't have, you know, digital screens that big, like pixelated screens. Instead, they did kinda, what the Philco is doing here is they just used a Fresnel lens to blow up a, a tiny image that came out of a projector and the Fresnel lens, which is just a gigantic plastic panel with all these concentric rings in it. It's the same technology that was first invented for lighthouses. Those were in the first projector tv, so it's kind of like a little trick of the eye, right?

Cameron: The actual first, um, flat screens, flat displays that were CRT or cathode ray tube TVs were actually made by Sony.

Cory: Eight years later, 1968, Sony introduces the revolutionary Sony Trinitron Color Television, um, and they also start to enter the record business through a joint venture with CBS.

Cameron: Now Trinitron is something I actually remember seeing growing up [00:42:00] on TVs. So it was kind of incredible, like just researching this, finding out what the technology was and that was so early on in color television,

Cory: like, so do you know how it works? Is it like three colors? And they just like put different lenses down?

Cameron: Kind of, so there's the RGB, but let me go back a little bit. So there's, at the time there were color televisions using this technology called shadow masking, which is basically just a sheet of metal with a bunch of holes and it that allows the electrons from the tube to be focused and displayed more directly.

And they've got the red, green, blue triads for the screen. The problem with that is that the picture is very dim because you've got this big sheet of metal

Cory: Sure.

Cameron: And these little holes. So Sony was entering the market and they didn't want to use the shadow masking method. Because [00:43:00] they saw the problems with it.

They wanted to produce their own technology, which kind of goes back to their roots. They are always kind of trying to innovate and come up with something themselves. So they discovered this new system developed by Paramount called Chroma Tron, and it worked by having very thin RGB wires. That could focus the beams resulting in a much brighter picture and they just ran vertically down the screen, like on an aperture grill.

So there's still like some of the screen being covered, a little bit dimmer than a black and white, but less was being covered.

Cory: Um, so this is like the, the child of, when I was a kid and I wanted to put my VCR on, I had to do the three cables in the back. Right. In the correct color order. Yeah.

Cameron: Yeah.

Each one corresponds to, you know, the, the RGB gun essentially.

Cory: Now, Sony didn't develop this technology,

Cameron: not for Chroma tron. No. So Sony licensed that. Um, but the problem was [00:44:00] that they ran into a bunch of production issues and Chromatron actually nearly ruined Sony and almost shut them down because they were selling the TVs for half as much as it took them to produce them, and they were just hoping that they could get their production system down.

Cory: Doing the old Amazon method where you're just hoping you build the infrastructure and, and yeah, for prices to catch up,

Cameron: but they couldn't hold out like it was just draining their resources. So they began the search for a new technology and Sony in-house developed a similar system to Chromatron, um, 'cause it had the screen illuminated by these thin wires.

But what they did is instead of having three guns in the back, they built a single gun with three cathodes and this method ended up being 25% brighter than sets that used shadow masks. And their patent for this ran out in 1996. [00:45:00] That's how long they were able to use that and when their patent ran out, that's when they developed Trinitron FD, which is the flat display, and it just was the first CRT TV with a flat, uh, display rather than curve.

Cory: So seven years later, after Sony makes the Trinitron color television, it launches a little something called the Betamax VCR.

Huge commercial success, right Cameron?

Cameron: I'm frustrated because I have a Betamax tape in my room and I can't digitize it.

Cory: Why?

Cameron: I don't have, I don't have a Betamax player. Where am I supposed to get a Beta Max player

Cory: on eBay?

Let's see how much they are.

Cameron: Yeah, those cost. Those cost so much. Why was Betamax like such a commercial flop? I mean, the story I always heard was because porn companies started using, uh, VHS.

Cory: That's gotta be an old wive's tale. I mean, is that true?

Cameron: I mean, I don't know. I would assume that that had to play,

Cory: sorry, an old, an old MILFs tale.[00:46:00]

Cameron: I would assume that there's some truth in it, because at the time, what were your options? You could go to a theater watch porn,

Cory: you could go to a Nickelodeon.

Cameron: Yeah, but like sitting in a theater with a bunch of dudes, like, nobody wants to do that. You'd rather just be at home. So if you can get it on a tape and you're like, huh, how much is a uh, cassette player going to cost me?

Well. If you are deciding between Beta Max and VCR and all the porn is being produced on one, maybe you just go with that one. Um, and technically Beta Max was slightly better quality than, uh, VCR.

Cory: Are they bigger than,

Cameron: or VHS

Cory: is it, is it a larger size?

Cameron: No, it's smaller.

Cory: Really?

Cameron: Yeah. It's more compact. Slightly better picture. It should have won.

Cory: I gotta say gun to my head. I don't know what a Betamax looks like. I don't think I've ever seen one.

Cameron: It looks like a VHS tape, but, uh, not as wide. And [00:47:00] you don't have like the two plastic, uh, views of the, the reel

Cory: Oh, just solid.

Cameron: No, no, no. You've just got one on the left side.

Cory: Okay.

Okay, so continuing down this timeline, we see Sony just steamrolling. 1979, their biggest product I think that anyone could name. If I say Sony, you say

Cameron: PlayStation.

Cory: No, Cameron. 1979.

Cameron: Oh.

Cory: If I say Sony, you say. Walkman. That's right. The Sony Walkman comes out in 1979.

Cameron: (laughs) You mean Discman? That's what I had.

Cory: I had a Discman too.

I had a skip man. That's what I called it.

Cameron: God, yeah.

Cory: Um, speaking of which, in 1982, Sony introduces the first CD player. 1985, they introduced the first eight millimeter video camera. 1987, they acquire Columbia records. Two years later in 1989, they acquire Columbia pictures. Uh, [00:48:00] 1994. If I say Sony, you say

Cameron: PlayStation.

Cory: There we go. 1994, the Sony PlayStation debuts. I wanna just present the thought that there are two main characters to this story. There's of course, Sony and Ibuka, but there the other character here is Japan itself. Now, when we started this story, we saw Japan in 1945, right after the devastation of World War ii.

But by 1980, Japan has become one of the richest countries on earth and one of the most industrialized countries on earth.

Cameron: It's such a short amount of time. It's just incredible. Like they were starting to become a just a force in terms of the automotive industry as well. Like it's just crazy in that short amount of time that they could do so much.

Cory: It's called the Japanese economic miracle.

This short span of time, one of the reasons that they were so successful is that the United States had their back. The United States was the one that was funding Japan, funding infrastructure, funding education, channeling money into manufacturing. And the big reason [00:49:00] for that is that they wanted to show the rest of the world and Asia that going on the United States team was a good idea. You stay an ally of the United States and you're gonna get the Japanese treatment. So it, it didn't hurt Japan at all to have this, this gigantic global entity kind of putting its thumb on the scale for it. But you are correct. It was a little bit stunning and it actually led to some sour relations between Japan and the United States.

Take TVs, for example. How many TV companies can you think of that are American made?

Cameron: Um, oh God. There's this, I've been watching old episodes of the Price is Right and they keep mentioning this TV brand. I wish I could remember it now, but that's the only one that comes to mind and it doesn't exist anymore.

So anyway,

Cory: so you don't see a lot of manufacturers of televisions in the United States because of some of the things that, that the Japanese were doing. What they would do is all these Japanese companies that were making fantastic televisions would sell them in the United States at a loss. They would sell them so cheap [00:50:00] that no one in the United States could keep up with these Japanese imports.

These companies would go under, and then once the Japanese companies were kind of the only players in the field, they would raise their prices again to the point where they could start making a profit on it.

Cameron: Hey, don't, don't hate the player. Hate the game.

Cory: Another thing that made Japan so successful and led to this economic miracle was their workforce was educated already.

It wasn't like World War II ended and then suddenly they started building universities and teaching people how to work in a factory. That was already the case. Japan was already industrialized before World War II, so there were generations of people already used to this way of life. On top of that, corporations in Japan were pretty damn cool in terms of their relationship with their workers.

There was a lot of corporate loyalty that workers had. They had fantastic benefits. The pay was really good. People tended to stay with the same company for a long time. Corporations were very interested in what their workers thought about the product that they made, and were very, very receptive to, you know, their recommendations.

Also [00:51:00] the difference between what the CEO made and the person at the bottom made was much, much smaller than than it is here in the United States. In Japan at this time, it was something like 15 to one, where the richest person in the company, the highest salary, was only about 15 times higher than the lowest paid person.

Cameron: That is insane compared to what we've got going on here in the us.

Cory: Yeah. Do you wanna take a hazard at what it is roughly in the United States right now?

Cameron: Like, 500 to one? Like that wouldn't surprise me.

Cory: Number I have in front of me is 350 to one. Uh, other reasons?

The Japanese focused on high tech industries with an emphasis on quality.

Right? They weren't making cheap knickknacks and, and plastic toys and, you know, shipping them out in bulk and paying their workers nothing. Right? Like the things that they made were things that cost a lot of money to, to buy.

Cameron: Yeah.

Where do you think all the best waifu pillows come from?

Cory: (laughs) Here's another reason. At the start of this, you talked about the fact that Japan had a little, had a clean slate after World [00:52:00] War II, and you are not wrong about that. You know, let's take, uh, trains in the United States, for example. Have you ever ridden on an Amtrak?

Cameron: Mm, I don't think I have.

Cory: Well, don't do it because they, they're horrible.

It took me 24 hours to get from Reno to Portland.

Cameron: Uh, yeah, I've seen the timetables. I've looked like this romanticized vision in my head of taking a train to a place and it's like, oh my God, 47 hours and like all these stops and it's more expensive than a plane

Cory: and I don't want to hear all this like, oh, well the United States has the best freight rail network in the world.

Like, I'm sure it does, but it, it's just baloney that the major cities aren't linked up with a high speed rail. So let's take that as an example. Let's say you have a brand new country and the country has no rail network that exists. Now, if they're going to start building rail and they have a good influx of capital, they're going to build the most up-to-date, most technologically advanced bullet trains that exist. Take China, for example.

So [00:53:00] that's kind of Japan after World War II, Japan can just start at the most advanced level. And the final thing that I want to talk about is Masaru Ibuka: the brains, the visionary, the person that brought Sony from that third story department store radio repair business to the global conglomerate that it is today.

At the start of this episode, we talked about how in the United States we celebrate CEOs and corporate visionaries. We have them in our history classes in high school. We talk about them. Going through the research here, I just could not help, but just loving this guy. He was such a hard worker and he really believed in his company and he had a vision for where he wanted it to go.

Ibuka would go on to be the president of Sony between 1950 and 1971, and then he served as a chairman of Sony Corporation between 1971 until his retirement in 1976. Later in his life, he served [00:54:00] as the Chairman of the Boy Scouts of Japan and he would go on to write a book called Kindergarten is Too Late, where he talks about how important it is that children develop the reading skills as early as possible in order for them to have the most success in school.

He would die in Tokyo on December 19th, 1997 at the age of 89.

Cameron: So before you started researching this, I had never heard of Ibuka. I, it's a fascinating story. I just love hearing about the rise of Japan. I think it's pretty incredible and a lot of the stuff you talked about we're gonna have, uh, some photos, we'll have a little bit more information on our website lostthreads.org. Uh, is there anything else you wanna say, Cory?

Cory: Thank you all so much for listening. We'll catch you on the next one.

Cameron: See ya.