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So you still think starting a business requires a great idea ?

Then maybe it's worth going back to the history of a few great companies.

That's one of the things that Jim Collins and Jerry Porras did for the millions of readers of "Built to last". The first myth they shattered in their book was the "great idea" myth, meaning : "it takes a great idea to start a great company". You need evidence ?

Sony is a perfect example. How did Sony start ? The company started in the devastated Japan of 1945, when Masaru Ibuka rented an abandoned operator room, in the remnants of an old department store. Sony at that time was $1600 of Ibuka's personal savings, and seven employees who didn't know what they were going to work on. So Ibuka and his employees had a brainstorming session after starting the company, to figure out what kind of business the company should enter ! The first Sony products were not terribly successful ; there was a deficient rice cooker, then a dangerous heating pad. Although Sony didn't know which products it should sell, Ibuka and his employees knew why and how they wanted to work. So Ibuka wrote the following for the May 7th 1946 opening ceremony of the company (which was called at the time Tokyo Tsushin Kogyo, short version Totsuko) :

Purpose of Incorporation :

  • To establish of an ideal factory that stresses a spirit of freedom and open-mindedness, and where engineers with sincere motivation can exercise their technological skills to the highest level,
  • To reconstruct Japan and to elevate the nation's culture through dynamic technological and manufacturing activities,
  • To promptly apply highly advanced technologies which were developed in various sectors during the war to common households,
  • To rapidly commercialize superior technological findings in universities and research institutions that are worthy of application in common households,
  • To bring radio communications and similar devices into common households and to promote the use of home electric appliances,
  • To actively participate in the reconstruction of war-damaged communications network by providing needed technology,
  • To produce high-quality radios and to provide radio services that are appropriate for the coming new era,
  • To promote the education of science among the general public.

(if you want to know more, Sony's website http://www.sony.net/Fun/SH/index.html, already mentionned by Philippe last December, is extremely well-documented)

You need another example of the great idea pointlessness ?

Everybody knows Bill Hewlett and Dave Packard started Hewlett-Packard in a now famous Palo Alto garage. What is less known is that neither men had no very fixed ideas about what they were going to produce. As Bill Hewlett explained to Collins and Porras : "When I talk to business schools occasionnally, the professor of management is devastated when I say we didn't have any plans when we started - we were just opportunistic. We did anything that would bring a nickel. We had a bowling foul-line indicator, a clock drive for telescope, a thing to make a urinal flush automatically, and a shock machine to make people lose weight. Here we were, with about $500 in capital, trying whatever someone thought we might be able to do".

What was at the beginning of groups like Sony, Hewlett-Packard, or even Wal-Mart, was not a "great idea", but more simply men with a corporate vision which went beyond products. But that is another story, and we will expand in another post on the concept of corporate vision as defined by Collins and Porras.

Posted by Bernard Buisson on January 25, 2005 at 08:30 AM in Book reviews | Permalink


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