The Practical Genius of Honda

I wanted to read a biography of Soichiro I wanted to read a biography of Soichiro Honda after James Dyson wrote about the Honda after James Dyson wrote about the Honda after James Dyson wrote about the impact that Honda had on his career. The impact that Honda had on his career. The impact that Honda had on his career. The key lesson that James Dyson took from key lesson that James Dyson took from key lesson that James Dyson took from studying Honda was this framework that studying Honda was this framework that studying Honda was this framework that Dyson actually used throughout his Dyson actually used throughout his Dyson actually used throughout his career, and it was pretty career, and it was pretty career, and it was pretty straightforward. It was take an existing straightforward. It was take an existing straightforward. It was take an existing product, notice what's bad, clumsy, product, notice what's bad, clumsy, product, notice what's bad, clumsy, overcomplicated, or even ignored about overcomplicated, or even ignored about overcomplicated, or even ignored about that existing product, improve it that existing product, improve it that existing product, improve it obsessively and continuously, and you do obsessively and continuously, and you do obsessively and continuously, and you do this by making the product simpler and this by making the product simpler and this by making the product simpler and more pleasurable to use. Then you retain more pleasurable to use. Then you retain more pleasurable to use. Then you retain enough control of your company to keep enough control of your company to keep enough control of your company to keep improving the existing product, improving the existing product, improving the existing product, and then you repeat this loop and never and then you repeat this loop and never and then you repeat this loop and never stop. And so, the book that I want to stop. And so, the book that I want to stop. And so, the book that I want to talk to you about today was written in talk to you about today was written in talk to you about today was written in 1975, 1975, 1975, and it was called Honda: The Man and His and it was called Honda: The Man and His and it was called Honda: The Man and His Machines, and it was written by Sol Machines, and it was written by Sol Machines, and it was written by Sol Sanders. And I think the dedication to Sanders. And I think the dedication to Sanders. And I think the dedication to this book actually describes the kind of this book actually describes the kind of this book actually describes the kind of entrepreneur that Honda was. It says, entrepreneur that Honda was. It says, entrepreneur that Honda was. It says, "To the free spirits in all cultures "To the free spirits in all cultures "To the free spirits in all cultures that Soichiro Honda typifies." And I'm that Soichiro Honda typifies." And I'm that Soichiro Honda typifies." And I'm going to jump into the introduction, and going to jump into the introduction, and going to jump into the introduction, and I'm going to pull out a few key ideas. I I'm going to pull out a few key ideas. I I'm going to pull out a few key ideas. I think it's a gives a wonderful overview think it's a gives a wonderful overview think it's a gives a wonderful overview of who Honda was, and the kind of just of who Honda was, and the kind of just of who Honda was, and the kind of just Really, this is a story of a Japanese Really, this is a story of a Japanese Really, this is a story of a Japanese maverick. And one of the most remarkable maverick. And one of the most remarkable maverick. And one of the most remarkable things about his life story, and then things about his life story, and then things about his life story, and then the work that came out of his life the work that came out of his life the work that came out of his life story, is what he had to endure, the story, is what he had to endure, the story, is what he had to endure, the changes that were happening at the changes that were happening at the changes that were happening at the country level. So, it says, "Across his country level. So, it says, "Across his country level. So, it says, "Across his 60-year career, Japan has come a long 60-year career, Japan has come a long 60-year career, Japan has come a long way. It has been a torturous trail that way. It has been a torturous trail that way. It has been a torturous trail that led through enormous and seemingly led through enormous and seemingly led through enormous and seemingly unlimited expansion. The Great unlimited expansion. The Great unlimited expansion. The Great Depression, military coups d'état, the Depression, military coups d'état, the Depression, military coups d'état, the China War of the 1930s, World War II and China War of the 1930s, World War II and China War of the 1930s, World War II and the nuclear bombing that destroyed two the nuclear bombing that destroyed two the nuclear bombing that destroyed two cities, foreign occupation, and the cities, foreign occupation, and the cities, foreign occupation, and the remarkable economic miracle and post-war remarkable economic miracle and post-war remarkable economic miracle and post-war prosperity. Honda has lived and worked prosperity. Honda has lived and worked prosperity. Honda has lived and worked through this all." And this next part through this all." And this next part through this all." And this next part goes into his personality and his goes into his personality and his goes into his personality and his obsession. There's a man named Honda who obsession. There's a man named Honda who obsession. There's a man named Honda who very much dominates the history of the very much dominates the history of the very much dominates the history of the company and its products. He has almost company and its products. He has almost company and its products. He has almost constant nervous activity. It takes a constant nervous activity. It takes a constant nervous activity. It takes a while for a stranger to get him into while for a stranger to get him into while for a stranger to get him into conversation that will reveal the fire conversation that will reveal the fire conversation that will reveal the fire in his belly. in his belly. in his belly. What can draw that out is talk of What can draw that out is talk of What can draw that out is talk of machines. He has a passion for motors. machines. He has a passion for motors. machines. He has a passion for motors. Motors and machines grabbed hold of him Motors and machines grabbed hold of him Motors and machines grabbed hold of him from a very young age and they never let from a very young age and they never let from a very young age and they never let him go. In fact, he's He repeats this him go. In fact, he's He repeats this him go. In fact, he's He repeats this phrase over and over again that fumbling phrase over and over again that fumbling phrase over and over again that fumbling with machines is what he loves to do with machines is what he loves to do with machines is what he loves to do and it's what he would do for free. He and it's what he would do for free. He and it's what he would do for free. He would fumble with machines before he got would fumble with machines before he got would fumble with machines before he got paid to do it. He built his career paid to do it. He built his career paid to do it. He built his career fumbling with machines and in fumbling with machines and in fumbling with machines and in retirement, what he does is fumble with retirement, what he does is fumble with retirement, what he does is fumble with machines. And one of the things that machines. And one of the things that machines. And one of the things that made this book so much fun to read and made this book so much fun to read and made this book so much fun to read and Honda as a person so fun to study is Honda as a person so fun to study is Honda as a person so fun to study is that he's just a maverick and a rebel that he's just a maverick and a rebel that he's just a maverick and a rebel and he's a wild boy. And his personality and he's a wild boy. And his personality and he's a wild boy. And his personality goes against the grain of the society goes against the grain of the society goes against the grain of the society that he was born and raised in. Honda's that he was born and raised in. Honda's that he was born and raised in. Honda's thoughts are often controversial in thoughts are often controversial in thoughts are often controversial in terms of Japanese attitudes, which terms of Japanese attitudes, which terms of Japanese attitudes, which requires so much conformity from members requires so much conformity from members requires so much conformity from members of society. His straightforwardness of society. His straightforwardness of society. His straightforwardness sometimes embarrasses the Japanese. sometimes embarrasses the Japanese. sometimes embarrasses the Japanese. Honda was a blunt and direct Honda was a blunt and direct Honda was a blunt and direct communicator. His simple and direct communicator. His simple and direct communicator. His simple and direct approach to many problems is refreshing. approach to many problems is refreshing. approach to many problems is refreshing. It is very appropriate that Honda's It is very appropriate that Honda's It is very appropriate that Honda's efforts have gone to motorcycles for efforts have gone to motorcycles for efforts have gone to motorcycles for there is something to the motorcycle there is something to the motorcycle there is something to the motorcycle rider's feeling of freedom and special rider's feeling of freedom and special rider's feeling of freedom and special sort of being fully charged with one's sort of being fully charged with one's sort of being fully charged with one's destiny when you're on a bike. Honda is destiny when you're on a bike. Honda is destiny when you're on a bike. Honda is very much that rare thing in the very much that rare thing in the very much that rare thing in the Japanese environment. He is a free Japanese environment. He is a free Japanese environment. He is a free spirit. One of the most remarkable spirit. One of the most remarkable spirit. One of the most remarkable things, in addition to being an things, in addition to being an things, in addition to being an engineering genius, is he manufactured engineering genius, is he manufactured engineering genius, is he manufactured the best-selling motor vehicle of all the best-selling motor vehicle of all the best-selling motor vehicle of all time. The Honda Super Cub has been in time. The Honda Super Cub has been in time. The Honda Super Cub has been in constant and uninterrupted production constant and uninterrupted production constant and uninterrupted production for over 60 years. They have sold over for over 60 years. They have sold over for over 60 years. They have sold over 100 million Super Cubs. And once he 100 million Super Cubs. And once he 100 million Super Cubs. And once he designed, engineered, and manufactured designed, engineered, and manufactured designed, engineered, and manufactured the Super Cub, he never stopped the Super Cub, he never stopped the Super Cub, he never stopped improving it. One of his main ideas on improving it. One of his main ideas on improving it. One of his main ideas on how to improve your product is to make how to improve your product is to make how to improve your product is to make sure that your company stays youthful. sure that your company stays youthful. sure that your company stays youthful. He repeats this throughout the entire He repeats this throughout the entire He repeats this throughout the entire book. He is obsessed with his company book. He is obsessed with his company book. He is obsessed with his company maintaining youthfulness. And by that, maintaining youthfulness. And by that, maintaining youthfulness. And by that, he means hiring young people and giving he means hiring young people and giving he means hiring young people and giving them a chance. So much so that we again, them a chance. So much so that we again, them a chance. So much so that we again, we're still in the introduction. This is we're still in the introduction. This is we're still in the introduction. This is among the factors which dictated his among the factors which dictated his among the factors which dictated his decision to retire from direct decision to retire from direct decision to retire from direct leadership of the company was his belief leadership of the company was his belief leadership of the company was his belief that the technological demands of the that the technological demands of the that the technological demands of the new products were beyond him. While he new products were beyond him. While he new products were beyond him. While he was running the company, he considered was running the company, he considered was running the company, he considered himself just an employee of his own himself just an employee of his own himself just an employee of his own company. He would work elbow to elbow company. He would work elbow to elbow company. He would work elbow to elbow with the young engineers. This is one with the young engineers. This is one with the young engineers. This is one way they described This is a young way they described This is a young way they described This is a young engineer at Honda describing what it was engineer at Honda describing what it was engineer at Honda describing what it was like working with Honda. He is a company like working with Honda. He is a company like working with Honda. He is a company president who is not like a company president who is not like a company president who is not like a company president at all. president at all. president at all. When we say that he works with his When we say that he works with his When we say that he works with his employees as one of them, we don't just employees as one of them, we don't just employees as one of them, we don't just mean he wears the same uniform as mean he wears the same uniform as mean he wears the same uniform as others. We are referring to superficial others. We are referring to superficial others. We are referring to superficial matters. Instead, what we mean is that matters. Instead, what we mean is that matters. Instead, what we mean is that we find in Honda the same kind of person we find in Honda the same kind of person we find in Honda the same kind of person with whom we can have an on the same with whom we can have an on the same with whom we can have an on the same level dialogue. And for me, one of the level dialogue. And for me, one of the level dialogue. And for me, one of the most interesting parts of the story is most interesting parts of the story is most interesting parts of the story is how much it mirrors James Dyson's own how much it mirrors James Dyson's own how much it mirrors James Dyson's own story. This description of what Honda story. This description of what Honda story. This description of what Honda did to the motorcycle market is exactly did to the motorcycle market is exactly did to the motorcycle market is exactly the same as what Dyson did to the vacuum the same as what Dyson did to the vacuum the same as what Dyson did to the vacuum cleaner market when he started. They cleaner market when he started. They cleaner market when he started. They took hold of an old and narrow market, took hold of an old and narrow market, took hold of an old and narrow market, made it respectable, and expanded it to made it respectable, and expanded it to made it respectable, and expanded it to a size that no one ever thought a size that no one ever thought a size that no one ever thought possible. Another thing that Honda had possible. Another thing that Honda had possible. Another thing that Honda had in common with Dyson is that he believed in common with Dyson is that he believed in common with Dyson is that he believed in the Edison in principle design. So, in the Edison in principle design. So, in the Edison in principle design. So, Honda wanted to learn by doing. He Honda wanted to learn by doing. He Honda wanted to learn by doing. He believed that success first comes with believed that success first comes with believed that success first comes with fail, fail, fail, fail, then succeed. fail, fail, fail, fail, then succeed. fail, fail, fail, fail, then succeed. And he's got a lot of great quotes in And he's got a lot of great quotes in And he's got a lot of great quotes in the book on the difference between the book on the difference between the book on the difference between failure and success, and how most of it failure and success, and how most of it failure and success, and how most of it is just persevering through failure. In is just persevering through failure. In is just persevering through failure. In fact, this is what he says, "Success can fact, this is what he says, "Success can fact, this is what he says, "Success can only be achieved through repeated only be achieved through repeated only be achieved through repeated failure. In fact, success represents 1% failure. In fact, success represents 1% failure. In fact, success represents 1% of your work, which results only from of your work, which results only from of your work, which results only from the 99% that is called failure. I the 99% that is called failure. I the 99% that is called failure. I believe your final success can only be believe your final success can only be believe your final success can only be achieved if you face challenges with achieved if you face challenges with achieved if you face challenges with this kind of pioneer spirit." And this kind of pioneer spirit." And this kind of pioneer spirit." And another idea that Honda repeats is that another idea that Honda repeats is that another idea that Honda repeats is that technology should only be invented to technology should only be invented to technology should only be invented to serve mankind, that humanity should not serve mankind, that humanity should not serve mankind, that humanity should not be slaves to technology. And so, this is be slaves to technology. And so, this is be slaves to technology. And so, this is one way he describes it. Technology is a one way he describes it. Technology is a one way he describes it. Technology is a tool to serve mankind. Technology is tool to serve mankind. Technology is tool to serve mankind. Technology is nothing more than the means for nothing more than the means for nothing more than the means for achieving a better life for men. Some achieving a better life for men. Some achieving a better life for men. Some people mistake the means for the end and people mistake the means for the end and people mistake the means for the end and have the wrong idea that scientific have the wrong idea that scientific have the wrong idea that scientific technology itself is their goal. In technology itself is their goal. In technology itself is their goal. In today's modern civilization Now, keep in today's modern civilization Now, keep in today's modern civilization Now, keep in mind, he's saying these words over a mind, he's saying these words over a mind, he's saying these words over a half a century ago. In today's modern half a century ago. In today's modern half a century ago. In today's modern civilization, where science and civilization, where science and civilization, where science and technology are making rapid progress in technology are making rapid progress in technology are making rapid progress in every field, we often observe a tendency every field, we often observe a tendency every field, we often observe a tendency to think that the machine has priority to think that the machine has priority to think that the machine has priority over humanity. I think that such over humanity. I think that such over humanity. I think that such thinking is not only very dangerous, but thinking is not only very dangerous, but thinking is not only very dangerous, but fundamentally wrong. Don't be used by fundamentally wrong. Don't be used by fundamentally wrong. Don't be used by the machine, use the machine. And then the machine, use the machine. And then the machine, use the machine. And then he would repeat this over and over he would repeat this over and over he would repeat this over and over again. I wish to emphasize that the again. I wish to emphasize that the again. I wish to emphasize that the solution to any problem should be sought solution to any problem should be sought solution to any problem should be sought at its very root. Okay, so that's an at its very root. Okay, so that's an at its very root. Okay, so that's an overview of some of the things that he's overview of some of the things that he's overview of some of the things that he's going to repeat throughout his career. I going to repeat throughout his career. I going to repeat throughout his career. I want to get into his early life, his want to get into his early life, his want to get into his early life, his early career. So, he was born in a early career. So, he was born in a early career. So, he was born in a remote village. His dad is a blacksmith, remote village. His dad is a blacksmith, remote village. His dad is a blacksmith, and one of his earliest memories is and one of his earliest memories is and one of his earliest memories is other people making people's lives other people making people's lives other people making people's lives better through engineering and better through engineering and better through engineering and technology. And so, what he's describing technology. And so, what he's describing technology. And so, what he's describing is when lighting was first installed in is when lighting was first installed in is when lighting was first installed in his very poor and remote village. He his very poor and remote village. He his very poor and remote village. He says, "I was terribly impressed by the says, "I was terribly impressed by the says, "I was terribly impressed by the sight of electricians swaggering with sight of electricians swaggering with sight of electricians swaggering with their cutting pliers and screwdrivers their cutting pliers and screwdrivers their cutting pliers and screwdrivers around their hips, hanging onto electric around their hips, hanging onto electric around their hips, hanging onto electric to work on wires. They cut a dashing to work on wires. They cut a dashing to work on wires. They cut a dashing figure of heroes in my eyes. I was so figure of heroes in my eyes. I was so figure of heroes in my eyes. I was so fascinated that I could never forget fascinated that I could never forget fascinated that I could never forget them." them." them." Before we get back into this, I want to Before we get back into this, I want to Before we get back into this, I want to tell you about the presenting sponsor of tell you about the presenting sponsor of tell you about the presenting sponsor of this podcast, Ramp. I have been reading this podcast, Ramp. I have been reading this podcast, Ramp. I have been reading a lot about SpaceX lately. SpaceX is one a lot about SpaceX lately. SpaceX is one a lot about SpaceX lately. 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He says, "Of the nine Honda children, only four reached Honda children, only four reached Honda children, only four reached maturity. The others died of various maturity. The others died of various maturity. The others died of various childhood diseases." This next part childhood diseases." This next part childhood diseases." This next part describes how poor his family was. Honda describes how poor his family was. Honda describes how poor his family was. Honda wore shoes made with soles of rice wore shoes made with soles of rice wore shoes made with soles of rice straw. His mother had to mend his shoes straw. His mother had to mend his shoes straw. His mother had to mend his shoes every night so they could be worn in the every night so they could be worn in the every night so they could be worn in the morning. Honda describes his childhood morning. Honda describes his childhood morning. Honda describes his childhood very simply by saying, "We were very very simply by saying, "We were very very simply by saying, "We were very poor." poor." poor." And so, even though his father was a And so, even though his father was a And so, even though his father was a poor man, he His father was a craftsman. poor man, he His father was a craftsman. poor man, he His father was a craftsman. His father cared about doing great work His father cared about doing great work His father cared about doing great work and doing work the right way. Many of and doing work the right way. Many of and doing work the right way. Many of Honda's ideas that he repeat throughout Honda's ideas that he repeat throughout Honda's ideas that he repeat throughout his life, solve the problem at the root, his life, solve the problem at the root, his life, solve the problem at the root, make things straight, do things your make things straight, do things your make things straight, do things your way, he actually learned from his way, he actually learned from his way, he actually learned from his father. His father was a man who always father. His father was a man who always father. His father was a man who always wanted things straight and attempted to wanted things straight and attempted to wanted things straight and attempted to establish logic in the smallest things. establish logic in the smallest things. establish logic in the smallest things. Honda inherited his stubborn resolve to Honda inherited his stubborn resolve to Honda inherited his stubborn resolve to get logically at the root of things and get logically at the root of things and get logically at the root of things and to do it his way from his father. And to do it his way from his father. And to do it his way from his father. And Honda is another great example of this Honda is another great example of this Honda is another great example of this maxim that true interest is revealed maxim that true interest is revealed maxim that true interest is revealed early. "Even before I started school, I early. "Even before I started school, I early. "Even before I started school, I was fond of fumbling with machinery and was fond of fumbling with machinery and was fond of fumbling with machinery and was interested in engines. There was a was interested in engines. There was a was interested in engines. There was a mill around 4 km from my house and at mill around 4 km from my house and at mill around 4 km from my house and at that mill was a motor, which was a rare that mill was a motor, which was a rare that mill was a motor, which was a rare object in those days. I was often taken object in those days. I was often taken object in those days. I was often taken to the mill on my grandfather's back. I to the mill on my grandfather's back. I to the mill on my grandfather's back. I found the sounds of the motor and the found the sounds of the motor and the found the sounds of the motor and the blue smoke with its peculiar smell of blue smoke with its peculiar smell of blue smoke with its peculiar smell of oil fascinating. From those days, I have oil fascinating. From those days, I have oil fascinating. From those days, I have always had a sense of exhilaration just always had a sense of exhilaration just always had a sense of exhilaration just to look at and listen to motors and to look at and listen to motors and to look at and listen to motors and engines." He is not even 10 years old engines." He is not even 10 years old engines." He is not even 10 years old yet. yet. yet. He still has that obsession when he's in He still has that obsession when he's in He still has that obsession when he's in his 70s. And listen to how he describes his 70s. And listen to how he describes his 70s. And listen to how he describes the very first time he ever saw an the very first time he ever saw an the very first time he ever saw an automobile. I went running after the automobile. I went running after the automobile. I went running after the car. car. car. I caught up with it and hung on to its I caught up with it and hung on to its I caught up with it and hung on to its rear. I was deeply stirred. That was my rear. I was deeply stirred. That was my rear. I was deeply stirred. That was my first encounter with any kind of motor first encounter with any kind of motor first encounter with any kind of motor vehicle. Remember, he's going to vehicle. Remember, he's going to vehicle. Remember, he's going to manufacture the most successful selling manufacture the most successful selling manufacture the most successful selling motor vehicle of all time. That was my motor vehicle of all time. That was my motor vehicle of all time. That was my first encounter with any kind of motor first encounter with any kind of motor first encounter with any kind of motor vehicle. When the car stopped, oil vehicle. When the car stopped, oil vehicle. When the car stopped, oil dripped down to the ground under it. I dripped down to the ground under it. I dripped down to the ground under it. I was literally intoxicated by the smell was literally intoxicated by the smell was literally intoxicated by the smell of that oil. I put my nose down to the of that oil. I put my nose down to the of that oil. I put my nose down to the ground and took deep breaths of the ground and took deep breaths of the ground and took deep breaths of the smell. Then I rubbed the oil over my smell. Then I rubbed the oil over my smell. Then I rubbed the oil over my hands and arms. hands and arms. hands and arms. It was from that moment that the idea It was from that moment that the idea It was from that moment that the idea originated that I would one day build a originated that I would one day build a originated that I would one day build a car myself. Every time I heard that car myself. Every time I heard that car myself. Every time I heard that there was an automobile on the street, I there was an automobile on the street, I there was an automobile on the street, I would run down to see it with the same would run down to see it with the same would run down to see it with the same exhilaration. exhilaration. exhilaration. He is obsessed from the very first He is obsessed from the very first He is obsessed from the very first moment. And one of the most important moment. And one of the most important moment. And one of the most important elements that would guide his later elements that would guide his later elements that would guide his later career is when his father's blacksmith career is when his father's blacksmith career is when his father's blacksmith shop had been transformed into a bicycle shop had been transformed into a bicycle shop had been transformed into a bicycle repair shop. And so Honda would help in repair shop. And so Honda would help in repair shop. And so Honda would help in the repair shop. And when he wasn't the repair shop. And when he wasn't the repair shop. And when he wasn't helping, he'd be reading the trade helping, he'd be reading the trade helping, he'd be reading the trade magazine, this magazine called The World magazine, this magazine called The World magazine, this magazine called The World of Wheels. And in that magazine, he of Wheels. And in that magazine, he of Wheels. And in that magazine, he comes across an ad for help wanted by a comes across an ad for help wanted by a comes across an ad for help wanted by a Tokyo repair shop. He's in a little Tokyo repair shop. He's in a little Tokyo repair shop. He's in a little village. He wants to get to the big city village. He wants to get to the big city village. He wants to get to the big city where he thinks the opportunity is. He where he thinks the opportunity is. He where he thinks the opportunity is. He says, "My dream for months had been to says, "My dream for months had been to says, "My dream for months had been to work for an automobile repair shop. My work for an automobile repair shop. My work for an automobile repair shop. My father was not very keen on letting me, father was not very keen on letting me, father was not very keen on letting me, the eldest son and a notorious truant, the eldest son and a notorious truant, the eldest son and a notorious truant, go away to Tokyo at such a young age. go away to Tokyo at such a young age. go away to Tokyo at such a young age. But I finally managed to convince him." But I finally managed to convince him." But I finally managed to convince him." So he never finished school. He's 16, So he never finished school. He's 16, So he never finished school. He's 16, moves to Tokyo so he can work in a moves to Tokyo so he can work in a moves to Tokyo so he can work in a repair shop. And he says, "When I left repair shop. And he says, "When I left repair shop. And he says, "When I left my home village, I was full of burning my home village, I was full of burning my home village, I was full of burning ambition to become an expert car ambition to become an expert car ambition to become an expert car mechanic." mechanic." mechanic." So he gets to the repair shop and he has So he gets to the repair shop and he has So he gets to the repair shop and he has to endure the traditional Japanese to endure the traditional Japanese to endure the traditional Japanese apprenticeship, which essentially makes apprenticeship, which essentially makes apprenticeship, which essentially makes him wait over a year to do any of the him wait over a year to do any of the him wait over a year to do any of the work that he actually wants to do. work that he actually wants to do. work that he actually wants to do. That's very difficult for an impatient That's very difficult for an impatient That's very difficult for an impatient person like Honda. And it was so person like Honda. And it was so person like Honda. And it was so torturous, this is how he describes his torturous, this is how he describes his torturous, this is how he describes his time in his life. Through all the trials time in his life. Through all the trials time in his life. Through all the trials and tribulations of a long life, Honda and tribulations of a long life, Honda and tribulations of a long life, Honda feels that this experience as an feels that this experience as an feels that this experience as an apprentice an apprentice who had to wait apprentice an apprentice who had to wait apprentice an apprentice who had to wait endlessly to get at his work was the endlessly to get at his work was the endlessly to get at his work was the most trying. And then when he's around most trying. And then when he's around most trying. And then when he's around 17 years old, one of the biggest 17 years old, one of the biggest 17 years old, one of the biggest earthquakes in Japanese history strikes. earthquakes in Japanese history strikes. earthquakes in Japanese history strikes. And the book says, "This turned out to And the book says, "This turned out to And the book says, "This turned out to be good luck for Honda. Before the be good luck for Honda. Before the be good luck for Honda. Before the earthquake and the fire the subsequent earthquake and the fire the subsequent earthquake and the fire the subsequent fires that come after the earthquake fires that come after the earthquake fires that come after the earthquake that is, the shop employed 16 repairmen. that is, the shop employed 16 repairmen. that is, the shop employed 16 repairmen. After only two were left. Honda was one After only two were left. Honda was one After only two were left. Honda was one of the two." of the two." of the two." "When business resumed a large number of "When business resumed a large number of "When business resumed a large number of vehicles had to be repaired by hand. The vehicles had to be repaired by hand. The vehicles had to be repaired by hand. The earthquake was far from being a earthquake was far from being a earthquake was far from being a disaster. I could drive cars, ride disaster. I could drive cars, ride disaster. I could drive cars, ride motorcycles, and learn how to repair motorcycles, and learn how to repair motorcycles, and learn how to repair automobiles." Honda said. automobiles." Honda said. automobiles." Honda said. And just like Joseph Pulitzer last week, And just like Joseph Pulitzer last week, And just like Joseph Pulitzer last week, Honda's harder working and more talented Honda's harder working and more talented Honda's harder working and more talented than his peers. And as a result it says than his peers. And as a result it says than his peers. And as a result it says Honda became more and more important to Honda became more and more important to Honda became more and more important to the repair shop. And again, like Joseph the repair shop. And again, like Joseph the repair shop. And again, like Joseph Pulitzer, the best employee gets set up Pulitzer, the best employee gets set up Pulitzer, the best employee gets set up with his own business. And that's with his own business. And that's with his own business. And that's exactly what happened to Honda. Honda exactly what happened to Honda. Honda exactly what happened to Honda. Honda looks back on those six years when he looks back on those six years when he looks back on those six years when he was working for his boss before he was working for his boss before he was working for his boss before he starts his own company with great starts his own company with great starts his own company with great satisfaction. He says, "I acquired satisfaction. He says, "I acquired satisfaction. He says, "I acquired skills as a repairman and mastered a skills as a repairman and mastered a skills as a repairman and mastered a knowledge of the automobile. My master knowledge of the automobile. My master knowledge of the automobile. My master had enough confidence in me to help me had enough confidence in me to help me had enough confidence in me to help me set up up my business on my own. A son set up up my business on my own. A son set up up my business on my own. A son of a blacksmith turned bicycle shop of a blacksmith turned bicycle shop of a blacksmith turned bicycle shop owner. And because I was by nature fond owner. And because I was by nature fond owner. And because I was by nature fond of fumbling with machinery." There is of fumbling with machinery." There is of fumbling with machinery." There is had phrase again. "And because I was by had phrase again. "And because I was by had phrase again. "And because I was by nature fond of fumbling with machinery, nature fond of fumbling with machinery, nature fond of fumbling with machinery, I was quick in acquiring skills. I was quick in acquiring skills. I was quick in acquiring skills. Whatever I did in those years, no matter Whatever I did in those years, no matter Whatever I did in those years, no matter how trivial, profited me. For in the how trivial, profited me. For in the how trivial, profited me. For in the long run, there is no waste in life." long run, there is no waste in life." long run, there is no waste in life." And so that is another thing that he And so that is another thing that he And so that is another thing that he repeats. "In the long run, there is no repeats. "In the long run, there is no repeats. "In the long run, there is no waste in life." waste in life." waste in life." The stuff you're learning today, the The stuff you're learning today, the The stuff you're learning today, the skills you're acquiring, you might not skills you're acquiring, you might not skills you're acquiring, you might not use today, but you'll use them 5, 10, use today, but you'll use them 5, 10, use today, but you'll use them 5, 10, 15, 20 years from now. And so this is 15, 20 years from now. And so this is 15, 20 years from now. And so this is the start of his own business. Things the start of his own business. Things the start of his own business. Things were very humble at the start. were very humble at the start. were very humble at the start. It was just Honda and one apprentice. He It was just Honda and one apprentice. He It was just Honda and one apprentice. He was considered too young by potential was considered too young by potential was considered too young by potential customers to do any repairs. Two other customers to do any repairs. Two other customers to do any repairs. Two other shops in the city were run by older men shops in the city were run by older men shops in the city were run by older men and gave stiff competition. And so Honda and gave stiff competition. And so Honda and gave stiff competition. And so Honda made himself a reputation built on made himself a reputation built on made himself a reputation built on making repairs which other shops said making repairs which other shops said making repairs which other shops said were hopeless or which they had failed were hopeless or which they had failed were hopeless or which they had failed at doing. This is actually really at doing. This is actually really at doing. This is actually really important because later on, about important because later on, about important because later on, about probably two decades from where we are probably two decades from where we are probably two decades from where we are in the story, maybe a little longer, in the story, maybe a little longer, in the story, maybe a little longer, when he founds Honda, one of the when he founds Honda, one of the when he founds Honda, one of the principles in the founding of Honda was principles in the founding of Honda was principles in the founding of Honda was always start with the hardest problem always start with the hardest problem always start with the hardest problem first. It's exactly what he has forced first. It's exactly what he has forced first. It's exactly what he has forced to do because in Japanese society, older to do because in Japanese society, older to do because in Japanese society, older people were favored way more and so people were favored way more and so people were favored way more and so therefore they're not even going to give therefore they're not even going to give therefore they're not even going to give the young kid a shot to do repairs. He the young kid a shot to do repairs. He the young kid a shot to do repairs. He had to start with the hardest repairs. had to start with the hardest repairs. had to start with the hardest repairs. And he doesn't stay a repairman for And he doesn't stay a repairman for And he doesn't stay a repairman for long. Soon he began tinkering with new long. Soon he began tinkering with new long. Soon he began tinkering with new ideas was to make the name Honda known ideas was to make the name Honda known ideas was to make the name Honda known throughout the world for technical throughout the world for technical throughout the world for technical innovation. innovation. innovation. He succeeded in making his first product He succeeded in making his first product He succeeded in making his first product which was cast metal spokes. So, the which was cast metal spokes. So, the which was cast metal spokes. So, the metal spokes, he made metal spokes on metal spokes, he made metal spokes on metal spokes, he made metal spokes on wheels for cars and for bikes and he did wheels for cars and for bikes and he did wheels for cars and for bikes and he did that because in that big earthquake we that because in that big earthquake we that because in that big earthquake we just talked about, most spokes at that just talked about, most spokes at that just talked about, most spokes at that time were made of wood and they burned time were made of wood and they burned time were made of wood and they burned in the fires from that great earthquake. in the fires from that great earthquake. in the fires from that great earthquake. So, that's an example of him not wasting So, that's an example of him not wasting So, that's an example of him not wasting anything that happens to him. He's like, anything that happens to him. He's like, anything that happens to him. He's like, "Why don't I just try to make some that "Why don't I just try to make some that "Why don't I just try to make some that are not made out of wood? Therefore, are not made out of wood? Therefore, are not made out of wood? Therefore, they won't burn." And this invention was they won't burn." And this invention was they won't burn." And this invention was so successful he patented it. It was to so successful he patented it. It was to so successful he patented it. It was to be the first of over 100 patents he be the first of over 100 patents he be the first of over 100 patents he would hold personally. Japanese trading would hold personally. Japanese trading would hold personally. Japanese trading companies were soon exporting them to companies were soon exporting them to companies were soon exporting them to markets as far away as India. By the markets as far away as India. By the markets as far away as India. By the time Honda was 25, the repair shop was time Honda was 25, the repair shop was time Honda was 25, the repair shop was earning a profit of 1,000 yen a month earning a profit of 1,000 yen a month earning a profit of 1,000 yen a month and he was employing 50 people. And so and he was employing 50 people. And so and he was employing 50 people. And so he's making a ton of money and when he he's making a ton of money and when he he's making a ton of money and when he makes money he likes to spend it. By makes money he likes to spend it. By makes money he likes to spend it. By nature, it is not in me to spend money nature, it is not in me to spend money nature, it is not in me to spend money sparingly when I'm having a good time. I sparingly when I'm having a good time. I sparingly when I'm having a good time. I believe in spending my own money as I believe in spending my own money as I believe in spending my own money as I like and spending it to have a good time like and spending it to have a good time like and spending it to have a good time in a grand way. Honda became a playboy. in a grand way. Honda became a playboy. in a grand way. Honda became a playboy. It was a common sight to see him going It was a common sight to see him going It was a common sight to see him going from geisha house to geisha house and from geisha house to geisha house and from geisha house to geisha house and piling few geisha into the car. One piling few geisha into the car. One piling few geisha into the car. One time, he was so drunk he drove his car time, he was so drunk he drove his car time, he was so drunk he drove his car off the bridge. I told you he was a wild off the bridge. I told you he was a wild off the bridge. I told you he was a wild boy. Luckily, the bridge wasn't high and boy. Luckily, the bridge wasn't high and boy. Luckily, the bridge wasn't high and the car landed in mud and no one was the car landed in mud and no one was the car landed in mud and no one was hurt. So, here's a very interesting hurt. So, here's a very interesting hurt. So, here's a very interesting dichotomy to him. Because he's this dichotomy to him. Because he's this dichotomy to him. Because he's this genius engineer, he's this workaholic, genius engineer, he's this workaholic, genius engineer, he's this workaholic, but when he's not working, he has to but when he's not working, he has to but when he's not working, he has to blow off steam. So, genius engineer, blow off steam. So, genius engineer, blow off steam. So, genius engineer, workaholic, but he likes to smoke, he workaholic, but he likes to smoke, he workaholic, but he likes to smoke, he likes to drink, he likes to curse, he likes to drink, he likes to curse, he likes to drink, he likes to curse, he likes to drive fast, he likes to party likes to drive fast, he likes to party likes to drive fast, he likes to party and chase women. And that's not the only and chase women. And that's not the only and chase women. And that's not the only way he's a wild boy. He also has this way he's a wild boy. He also has this way he's a wild boy. He also has this really hot temper. Listen to this. Honda really hot temper. Listen to this. Honda really hot temper. Listen to this. Honda made local headlines when he got into an made local headlines when he got into an made local headlines when he got into an argument with the tax office. Honda argument with the tax office. Honda argument with the tax office. Honda decided to have it out with tax decided to have it out with tax decided to have it out with tax officials by getting a fire engine hose officials by getting a fire engine hose officials by getting a fire engine hose and dousing officials as they came out and dousing officials as they came out and dousing officials as they came out of their building. of their building. of their building. He is constantly getting into all kinds He is constantly getting into all kinds He is constantly getting into all kinds of trouble, but he also believes the of trouble, but he also believes the of trouble, but he also believes the fact that he would carouse late at fact that he would carouse late at fact that he would carouse late at night, he'd drink with normal people, he night, he'd drink with normal people, he night, he'd drink with normal people, he thought it was beneficial to building thought it was beneficial to building thought it was beneficial to building products later in his life. Honda says products later in his life. Honda says products later in his life. Honda says his theory that no experience is ever his theory that no experience is ever his theory that no experience is ever waste applies even to his hell-raising waste applies even to his hell-raising waste applies even to his hell-raising days. That's what he called them, days. That's what he called them, days. That's what he called them, hell-raising days. And that they too hell-raising days. And that they too hell-raising days. And that they too were profitable for him. I learned about were profitable for him. I learned about were profitable for him. I learned about the feelings of people who travel the the feelings of people who travel the the feelings of people who travel the backways of life. I was able to acquire backways of life. I was able to acquire backways of life. I was able to acquire a knowledge of human nature through a knowledge of human nature through a knowledge of human nature through exposure to life in the raw. exposure to life in the raw. exposure to life in the raw. If, as some people say, I am not exactly If, as some people say, I am not exactly If, as some people say, I am not exactly a man with characteristics usually a man with characteristics usually a man with characteristics usually associated with successful big associated with successful big associated with successful big businesses, perhaps it's because of this businesses, perhaps it's because of this businesses, perhaps it's because of this wide experience. wide experience. wide experience. And so he parties hard, but he also And so he parties hard, but he also And so he parties hard, but he also works very hard, too. He says, "Chasing works very hard, too. He says, "Chasing works very hard, too. He says, "Chasing after geisha was only part of Honda's after geisha was only part of Honda's after geisha was only part of Honda's extracurricular activities. He was still extracurricular activities. He was still extracurricular activities. He was still intent on finding out all he could about intent on finding out all he could about intent on finding out all he could about motors and engines. He developed a great motors and engines. He developed a great motors and engines. He developed a great interest in racing cars, their design, interest in racing cars, their design, interest in racing cars, their design, how to build them, and how to race them, how to build them, and how to race them, how to build them, and how to race them, which was to become basic to the success which was to become basic to the success which was to become basic to the success of the Honda organization later on." So, of the Honda organization later on." So, of the Honda organization later on." So, he considered racing just R&D. he considered racing just R&D. he considered racing just R&D. Racing as R&D will be a reoccurring Racing as R&D will be a reoccurring Racing as R&D will be a reoccurring theme throughout Honda's career. Honda theme throughout Honda's career. Honda theme throughout Honda's career. Honda did most things in an unorthodox did most things in an unorthodox did most things in an unorthodox fashion. Honda is called Mr. Thunder fashion. Honda is called Mr. Thunder fashion. Honda is called Mr. Thunder because of his instantaneous temper and because of his instantaneous temper and because of his instantaneous temper and sometimes erratic behavior. sometimes erratic behavior. sometimes erratic behavior. His temper is like a summer storm. It His temper is like a summer storm. It His temper is like a summer storm. It suddenly blows up and then as quickly suddenly blows up and then as quickly suddenly blows up and then as quickly the sun comes out and there are no the sun comes out and there are no the sun comes out and there are no grudges held. You must be prepared for grudges held. You must be prepared for grudges held. You must be prepared for his impatience and his directness. his impatience and his directness. his impatience and his directness. He's also extremely ambitious and wants He's also extremely ambitious and wants He's also extremely ambitious and wants to control his own destiny and so to control his own destiny and so to control his own destiny and so eventually he's like, "Hey, I don't want eventually he's like, "Hey, I don't want eventually he's like, "Hey, I don't want to repair other people's machines. I to repair other people's machines. I to repair other people's machines. I actually want to manufacture my own." actually want to manufacture my own." actually want to manufacture my own." And he has a wild strategy that he uses And he has a wild strategy that he uses And he has a wild strategy that he uses to get his own way. So it says, "Honda to get his own way. So it says, "Honda to get his own way. So it says, "Honda decided that although the repair decided that although the repair decided that although the repair business was thriving, he wanted to business was thriving, he wanted to business was thriving, he wanted to venture into new fields." This is what venture into new fields." This is what venture into new fields." This is what he said, "A garage was a garage after he said, "A garage was a garage after he said, "A garage was a garage after all. No matter how good a repair job is all. No matter how good a repair job is all. No matter how good a repair job is done by a garage, requests for repair done by a garage, requests for repair done by a garage, requests for repair work wouldn't come in from Tokyo or work wouldn't come in from Tokyo or work wouldn't come in from Tokyo or America." America." America." Honda decided it was time for him to Honda decided it was time for him to Honda decided it was time for him to think of something more ambitious. To think of something more ambitious. To think of something more ambitious. To think of manufacturing rather than think of manufacturing rather than think of manufacturing rather than repairing other men's machines. He repairing other men's machines. He repairing other men's machines. He decided to go into manufacturing of decided to go into manufacturing of decided to go into manufacturing of piston rings, but there was difficulty piston rings, but there was difficulty piston rings, but there was difficulty persuading his board of directors. His persuading his board of directors. His persuading his board of directors. His board of directors should be set in board of directors should be set in board of directors should be set in quotes by the way. It's like his father quotes by the way. It's like his father quotes by the way. It's like his father and some old friends that helped him set and some old friends that helped him set and some old friends that helped him set up the company, but they're trying to up the company, but they're trying to up the company, but they're trying to dissuade him from the path that he wants dissuade him from the path that he wants dissuade him from the path that he wants to take. So this is his very unusual to take. So this is his very unusual to take. So this is his very unusual strategy. At the same time, he came down strategy. At the same time, he came down strategy. At the same time, he came down with severe facial neuralgia so painful with severe facial neuralgia so painful with severe facial neuralgia so painful that he had to stay away from work for 2 that he had to stay away from work for 2 that he had to stay away from work for 2 months. Miraculously, when an months. Miraculously, when an months. Miraculously, when an intermediary working as a go-between intermediary working as a go-between intermediary working as a go-between helped persuade the rest of the company helped persuade the rest of the company helped persuade the rest of the company to permit the change in its activities, to permit the change in its activities, to permit the change in its activities, Honda's neuralgia was cured overnight. Honda's neuralgia was cured overnight. Honda's neuralgia was cured overnight. Honda was ready to begin his career as a Honda was ready to begin his career as a Honda was ready to begin his career as a manufacturer and again, he doesn't know manufacturer and again, he doesn't know manufacturer and again, he doesn't know anything about manufacturing so this is anything about manufacturing so this is anything about manufacturing so this is how he learns. Honda began to live and how he learns. Honda began to live and how he learns. Honda began to live and work in the factory literally all day work in the factory literally all day work in the factory literally all day and night. Honda turned into a hermit and night. Honda turned into a hermit and night. Honda turned into a hermit complete with long hair. When he complete with long hair. When he complete with long hair. When he couldn't stay awake any longer, he would couldn't stay awake any longer, he would couldn't stay awake any longer, he would lie down on a straw mat on the factory lie down on a straw mat on the factory lie down on a straw mat on the factory floor and doze off. When I got to the floor and doze off. When I got to the floor and doze off. When I got to the section, I thought of this quote from section, I thought of this quote from section, I thought of this quote from James Dyson's first autobiography where James Dyson's first autobiography where James Dyson's first autobiography where James Dyson writes, "Anyone can become James Dyson writes, "Anyone can become James Dyson writes, "Anyone can become an expert in anything in 6 months. After an expert in anything in 6 months. After an expert in anything in 6 months. After the idea, there's plenty of time to the idea, there's plenty of time to the idea, there's plenty of time to learn the technology. My first cyclonic learn the technology. My first cyclonic learn the technology. My first cyclonic vacuum cleaner was built out of cereal vacuum cleaner was built out of cereal vacuum cleaner was built out of cereal packets and masking tape long before I packets and masking tape long before I packets and masking tape long before I understood how it worked. understood how it worked. understood how it worked. And so a large part of Honda's initial And so a large part of Honda's initial And so a large part of Honda's initial manufacturing efforts were done by hand. manufacturing efforts were done by hand. manufacturing efforts were done by hand. The problem with that is you can never The problem with that is you can never The problem with that is you can never maintain quality. So he winds up selling maintain quality. So he winds up selling maintain quality. So he winds up selling like 50 piston rings to Toyota and they like 50 piston rings to Toyota and they like 50 piston rings to Toyota and they send 47 of them back to him. This causes send 47 of them back to him. This causes send 47 of them back to him. This causes Honda to become a disciple of Honda to become a disciple of Honda to become a disciple of interchangeability and automation. He interchangeability and automation. He interchangeability and automation. He did not like the lack of precision of did not like the lack of precision of did not like the lack of precision of making things by hand which was making things by hand which was making things by hand which was excessively common at the time. And so excessively common at the time. And so excessively common at the time. And so he points his engineering genius towards he points his engineering genius towards he points his engineering genius towards automation. It says Honda's mechanical automation. It says Honda's mechanical automation. It says Honda's mechanical originality came into play when he originality came into play when he originality came into play when he developed automatic equipment for developed automatic equipment for developed automatic equipment for producing piston rings that permitted producing piston rings that permitted producing piston rings that permitted the machines to be run by relatively the machines to be run by relatively the machines to be run by relatively uninitiated women workers as the wartime uninitiated women workers as the wartime uninitiated women workers as the wartime male manpower pool dried up. This is in male manpower pool dried up. This is in male manpower pool dried up. This is in the 1930s. Much of this experience he the 1930s. Much of this experience he the 1930s. Much of this experience he translated after World War II into the translated after World War II into the translated after World War II into the production of Honda's motorcycles. production of Honda's motorcycles. production of Honda's motorcycles. And this guy can't catch a break. But And this guy can't catch a break. But And this guy can't catch a break. But what I love about all the bad things what I love about all the bad things what I love about all the bad things that happened to him that are outside of that happened to him that are outside of that happened to him that are outside of his control, what else is he going to his control, what else is he going to his control, what else is he going to do? He can't help himself. He has to do? He can't help himself. He has to do? He can't help himself. He has to fumble with machines and make motors. fumble with machines and make motors. fumble with machines and make motors. And so if you were Honda and you believe And so if you were Honda and you believe And so if you were Honda and you believe that your life's work, whether it's an that your life's work, whether it's an that your life's work, whether it's an earthquake, a fire, a war, losing all earthquake, a fire, a war, losing all earthquake, a fire, a war, losing all your manufacturing plants, the only your manufacturing plants, the only your manufacturing plants, the only choice he has is to wake up the next day choice he has is to wake up the next day choice he has is to wake up the next day and just go at it again. And what I love and just go at it again. And what I love and just go at it again. And what I love about him is this, he's got this about him is this, he's got this about him is this, he's got this unshakeable optimism. So he says he lost unshakeable optimism. So he says he lost unshakeable optimism. So he says he lost two factories in the firebombings by the two factories in the firebombings by the two factories in the firebombings by the Americans. Yet with the fantastic way Americans. Yet with the fantastic way Americans. Yet with the fantastic way Honda always seems to have for pulling Honda always seems to have for pulling Honda always seems to have for pulling luck out of any inferno, even then he luck out of any inferno, even then he luck out of any inferno, even then he profited. The extra gasoline tanks from profited. The extra gasoline tanks from profited. The extra gasoline tanks from the US fighter planes dropped on these the US fighter planes dropped on these the US fighter planes dropped on these attacks supplied him with needed attacks supplied him with needed attacks supplied him with needed precious and scarce metals. Honda called precious and scarce metals. Honda called precious and scarce metals. Honda called this dividend from the bombings Truman's this dividend from the bombings Truman's this dividend from the bombings Truman's gift in 1945. So that's after he's gift in 1945. So that's after he's gift in 1945. So that's after he's getting firebombed, right? In 1945 an getting firebombed, right? In 1945 an getting firebombed, right? In 1945 an earthquake hit the area destroying earthquake hit the area destroying earthquake hit the area destroying Honda's plant and the machines inside. Honda's plant and the machines inside. Honda's plant and the machines inside. And so eventually he winds up selling And so eventually he winds up selling And so eventually he winds up selling his company. I'm pretty sure he sells his company. I'm pretty sure he sells his company. I'm pretty sure he sells his company to Toyota. From the sale of his company to Toyota. From the sale of his company to Toyota. From the sale of this piston ring company, he nets about this piston ring company, he nets about this piston ring company, he nets about $125,000 $125,000 $125,000 and that gives him time to figure out and that gives him time to figure out and that gives him time to figure out what to do next. And it is in this what to do next. And it is in this what to do next. And it is in this constant tinkering and fumbling with constant tinkering and fumbling with constant tinkering and fumbling with machines that he stumbles on the machines that he stumbles on the machines that he stumbles on the greatest opportunity of his life, which greatest opportunity of his life, which greatest opportunity of his life, which is to start trying to make motorbikes. is to start trying to make motorbikes. is to start trying to make motorbikes. And he was inventing out of necessity. And he was inventing out of necessity. And he was inventing out of necessity. Honda's first motorbike was a result of Honda's first motorbike was a result of Honda's first motorbike was a result of the post-war chaos and oil shortages. the post-war chaos and oil shortages. the post-war chaos and oil shortages. There was no gasoline. So, he says, There was no gasoline. So, he says, There was no gasoline. So, he says, "Honda's solution to the problem was "Honda's solution to the problem was "Honda's solution to the problem was simply, almost matter-of-factly, I simply, almost matter-of-factly, I simply, almost matter-of-factly, I happened on the idea of fitting an happened on the idea of fitting an happened on the idea of fitting an engine to a bicycle simply because I did engine to a bicycle simply because I did engine to a bicycle simply because I did not want to ride the incredibly crowded not want to ride the incredibly crowded not want to ride the incredibly crowded trains and buses myself. And it became trains and buses myself. And it became trains and buses myself. And it became impossible for me to drive my car impossible for me to drive my car impossible for me to drive my car because of the gasoline shortage." because of the gasoline shortage." because of the gasoline shortage." Honda, with his great ability to Honda, with his great ability to Honda, with his great ability to improvise, started to use a improvise, started to use a improvise, started to use a gasoline-powered motor that had been gasoline-powered motor that had been gasoline-powered motor that had been utilized by the military to operate utilized by the military to operate utilized by the military to operate generators for radios. He fit that radio generators for radios. He fit that radio generators for radios. He fit that radio onto a bicycle. onto a bicycle. onto a bicycle. Transportation of any kind was Transportation of any kind was Transportation of any kind was desperately needed. desperately needed. desperately needed. Remember, this is after World War II. Remember, this is after World War II. Remember, this is after World War II. So, Honda's makeshift motorbike was an So, Honda's makeshift motorbike was an So, Honda's makeshift motorbike was an instant success. Soon, the surplus instant success. Soon, the surplus instant success. Soon, the surplus military motors were exhausted and Honda military motors were exhausted and Honda military motors were exhausted and Honda decided to design and build a motor for decided to design and build a motor for decided to design and build a motor for the bicycle. the bicycle. the bicycle. And one of the most important parts of And one of the most important parts of And one of the most important parts of the story is, again, in in his society, the story is, again, in in his society, the story is, again, in in his society, he's expected to conform, to just stay he's expected to conform, to just stay he's expected to conform, to just stay in his place. in his place. in his place. He has this relentless trust in his own He has this relentless trust in his own He has this relentless trust in his own judgment. Focuses on what he wants to do judgment. Focuses on what he wants to do judgment. Focuses on what he wants to do regardless of all the critics and all regardless of all the critics and all regardless of all the critics and all the people and people trying to dissuade the people and people trying to dissuade the people and people trying to dissuade him, the people around him trying to him, the people around him trying to him, the people around him trying to dissuade him from what he wants to do. dissuade him from what he wants to do. dissuade him from what he wants to do. Just like in when he wanted his I don't Just like in when he wanted his I don't Just like in when he wanted his I don't want to do repair repair shop anymore. I want to do repair repair shop anymore. I want to do repair repair shop anymore. I want to be a manufacturer. People tried want to be a manufacturer. People tried want to be a manufacturer. People tried to not get him to do that. And in this to not get him to do that. And in this to not get him to do that. And in this case, they're like, "Why are you trying case, they're like, "Why are you trying case, they're like, "Why are you trying to make, you know, these bikes with to make, you know, these bikes with to make, you know, these bikes with engines?" So, he says, "Some of my engines?" So, he says, "Some of my engines?" So, he says, "Some of my relatives and friends had opinions and relatives and friends had opinions and relatives and friends had opinions and criticism about my going into the criticism about my going into the criticism about my going into the motorbike business. Some said I should motorbike business. Some said I should motorbike business. Some said I should open a garage since the number of open a garage since the number of open a garage since the number of automobiles was bound to increase automobiles was bound to increase automobiles was bound to increase rapidly in Japan. Some of my critics rapidly in Japan. Some of my critics rapidly in Japan. Some of my critics suggested that a motorbike is only a suggested that a motorbike is only a suggested that a motorbike is only a thing to be used by a black marketer. In thing to be used by a black marketer. In thing to be used by a black marketer. In fact, that was the principal use of the fact, that was the principal use of the fact, that was the principal use of the motorbike. Even my wife was using one to motorbike. Even my wife was using one to motorbike. Even my wife was using one to travel the countryside to gather food travel the countryside to gather food travel the countryside to gather food for our family. for our family. for our family. Honda suggested his product was Honda suggested his product was Honda suggested his product was necessary and important for just that necessary and important for just that necessary and important for just that reason. It economized the use of reason. It economized the use of reason. It economized the use of gasoline, which was in short supply. gasoline, which was in short supply. gasoline, which was in short supply. And so this is in 1949. Honda is 43 And so this is in 1949. Honda is 43 And so this is in 1949. Honda is 43 years old, and this is the beginning of years old, and this is the beginning of years old, and this is the beginning of a company that is still thriving 80 a company that is still thriving 80 a company that is still thriving 80 years later. years later. years later. And before we get back into this, I want And before we get back into this, I want And before we get back into this, I want to tell you about AppLovin. One of my to tell you about AppLovin. One of my to tell you about AppLovin. One of my all-time favorite quotes is from the all-time favorite quotes is from the all-time favorite quotes is from the book Zero to One. In that book, Peter book Zero to One. In that book, Peter book Zero to One. 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Honda decided that he had to switch to a Honda decided that he had to switch to a Honda decided that he had to switch to a motorcycle rather than a motorbike motorcycle rather than a motorbike motorcycle rather than a motorbike because something more sturdy and with a because something more sturdy and with a because something more sturdy and with a longer range was needed. longer range was needed. longer range was needed. Honda christened his new machine the Honda christened his new machine the Honda christened his new machine the Dream because, as he says, "I was Dream because, as he says, "I was Dream because, as he says, "I was trusting my aspirations and my dreams to trusting my aspirations and my dreams to trusting my aspirations and my dreams to speed." This was the machine that began speed." This was the machine that began speed." This was the machine that began the fabulous parade of models and the the fabulous parade of models and the the fabulous parade of models and the vast production that has spread around vast production that has spread around vast production that has spread around the world. Now, this is very, very the world. Now, this is very, very the world. Now, this is very, very fascinating. Honda would have never fascinating. Honda would have never fascinating. Honda would have never succeeded if he didn't have the right succeeded if he didn't have the right succeeded if he didn't have the right partner that the right co-founder. The partner that the right co-founder. The partner that the right co-founder. The way I think about Honda when I got to way I think about Honda when I got to way I think about Honda when I got to this section is like, if you study Walt this section is like, if you study Walt this section is like, if you study Walt Disney, Walt Disney wanted to spend all Disney, Walt Disney wanted to spend all Disney, Walt Disney wanted to spend all his money building the best products his money building the best products his money building the best products possible. That's what he wanted to spend possible. That's what he wanted to spend possible. That's what he wanted to spend all his money on. What he wanted to all his money on. What he wanted to all his money on. What he wanted to spend all his time on. I remember there spend all his time on. I remember there spend all his time on. I remember there was an argument between him and his was an argument between him and his was an argument between him and his brother who who handled like the brother who who handled like the brother who who handled like the business side of things. It's like, "How business side of things. It's like, "How business side of things. It's like, "How much is this going to cost?" And Walt much is this going to cost?" And Walt much is this going to cost?" And Walt Disney yelled at him. He goes, "We're Disney yelled at him. He goes, "We're Disney yelled at him. He goes, "We're innovating. I'll let you know what it innovating. I'll let you know what it innovating. I'll let you know what it costs when we're done." Honda's got a costs when we're done." Honda's got a costs when we're done." Honda's got a little bit of that in him. And so, Honda little bit of that in him. And so, Honda little bit of that in him. And so, Honda needs somebody who will run the business needs somebody who will run the business needs somebody who will run the business and make sure they don't run out of and make sure they don't run out of and make sure they don't run out of money. So, at this point, he's building money. So, at this point, he's building money. So, at this point, he's building motorcycles motorcycles motorcycles and he's just happy because a few people and he's just happy because a few people and he's just happy because a few people are buying them, but he never thinks to are buying them, but he never thinks to are buying them, but he never thinks to collect money for them. He'd give them collect money for them. He'd give them collect money for them. He'd give them on credit, and then when he go try to on credit, and then when he go try to on credit, and then when he go try to collect the money months later, the collect the money months later, the collect the money months later, the person would disappear or the shop would person would disappear or the shop would person would disappear or the shop would be out of business. He almost goes be out of business. He almost goes be out of business. He almost goes bankrupt. He says, "Since I found bankrupt. He says, "Since I found bankrupt. He says, "Since I found pleasure in the fact that a thing of my pleasure in the fact that a thing of my pleasure in the fact that a thing of my own invention was proving useful and was own invention was proving useful and was own invention was proving useful and was appreciated by people, I was not paying appreciated by people, I was not paying appreciated by people, I was not paying much attention to profits." Honda was much attention to profits." Honda was much attention to profits." Honda was facing bankruptcy since many of the facing bankruptcy since many of the facing bankruptcy since many of the products it sold were just not being products it sold were just not being products it sold were just not being paid for. The shops he sold to on credit paid for. The shops he sold to on credit paid for. The shops he sold to on credit would never pay or they'd go out of would never pay or they'd go out of would never pay or they'd go out of business. This is when Honda's alter ego business. This is when Honda's alter ego business. This is when Honda's alter ego appeared on the scene. His partner is appeared on the scene. His partner is appeared on the scene. His partner is Takeo Fujisawa. Takeo Fujisawa. Takeo Fujisawa. There is no Honda without Fujisawa. There is no Honda without Fujisawa. There is no Honda without Fujisawa. Fujisawa recalls that when he was first Fujisawa recalls that when he was first Fujisawa recalls that when he was first approached with the possibility of approached with the possibility of approached with the possibility of joining Honda's small manufacturing joining Honda's small manufacturing joining Honda's small manufacturing operation, his wife warned him that two operation, his wife warned him that two operation, his wife warned him that two unconventional Japanese characters would unconventional Japanese characters would unconventional Japanese characters would never be able to hit it off. It was hard never be able to hit it off. It was hard never be able to hit it off. It was hard to imagine two men more different. And to imagine two men more different. And to imagine two men more different. And so this partnership is going to last the so this partnership is going to last the so this partnership is going to last the rest of their career. Honda wanted rest of their career. Honda wanted rest of their career. Honda wanted Fujisawa to join him. He had always Fujisawa to join him. He had always Fujisawa to join him. He had always realized his deficiencies in finance and realized his deficiencies in finance and realized his deficiencies in finance and marketing. Honda works as a member of a marketing. Honda works as a member of a marketing. Honda works as a member of a team and recognizes that some of the team and recognizes that some of the team and recognizes that some of the most important members of any such most important members of any such most important members of any such cooperative group must have quite cooperative group must have quite cooperative group must have quite different talents and personalities than different talents and personalities than different talents and personalities than he. This is what he says, "I have always he. This is what he says, "I have always he. This is what he says, "I have always felt a person who cannot mix with people felt a person who cannot mix with people felt a person who cannot mix with people of different temperaments is rather a of different temperaments is rather a of different temperaments is rather a useless person. Talent should be sought useless person. Talent should be sought useless person. Talent should be sought far and wide." far and wide." far and wide." And he also needs a steady hand in the And he also needs a steady hand in the And he also needs a steady hand in the company. He has this erratic genius. In company. He has this erratic genius. In company. He has this erratic genius. In fact, this hilarious story is like this fact, this hilarious story is like this fact, this hilarious story is like this this one sentence about him being a wild this one sentence about him being a wild this one sentence about him being a wild boy. Honda often thundered home on his boy. Honda often thundered home on his boy. Honda often thundered home on his motorcycle at 2:00 or 3:00 in the motorcycle at 2:00 or 3:00 in the motorcycle at 2:00 or 3:00 in the morning full of sake. morning full of sake. morning full of sake. And so you have this product and And so you have this product and And so you have this product and engineering genius. And now you match engineering genius. And now you match engineering genius. And now you match him with somebody that's great at him with somebody that's great at him with somebody that's great at finance and developing distribution finance and developing distribution finance and developing distribution channels. And this is really really channels. And this is really really channels. And this is really really smart idea. So Fujisawa is going to be smart idea. So Fujisawa is going to be smart idea. So Fujisawa is going to be able to build a distribution network able to build a distribution network able to build a distribution network from scratch for Honda's products. He from scratch for Honda's products. He from scratch for Honda's products. He also helps solve their cash flow problem also helps solve their cash flow problem also helps solve their cash flow problem by making the shops that they sell by making the shops that they sell by making the shops that they sell wholesale to pay up front for the wholesale to pay up front for the wholesale to pay up front for the product. But the way he built this product. But the way he built this product. But the way he built this distribution system is very fascinating. distribution system is very fascinating. distribution system is very fascinating. Says Fujisawa looked into Honda's Says Fujisawa looked into Honda's Says Fujisawa looked into Honda's distribution system and was shocked to distribution system and was shocked to distribution system and was shocked to learn that there were less than 200 learn that there were less than 200 learn that there were less than 200 bicycle shops and other distributors of bicycle shops and other distributors of bicycle shops and other distributors of Honda's product. He sat down and wrote a Honda's product. He sat down and wrote a Honda's product. He sat down and wrote a letter to a list of 18,000 bicycle shop letter to a list of 18,000 bicycle shop letter to a list of 18,000 bicycle shop owners in the whole of Japan. This is owners in the whole of Japan. This is owners in the whole of Japan. This is what he wrote. This is great marketing. what he wrote. This is great marketing. what he wrote. This is great marketing. Less than 100 years ago, your father saw Less than 100 years ago, your father saw Less than 100 years ago, your father saw the first bicycle brought in from the first bicycle brought in from the first bicycle brought in from western countries. He knew little about western countries. He knew little about western countries. He knew little about it nor how to ride it, how to make it, it nor how to ride it, how to make it, it nor how to ride it, how to make it, how to deal with the simplest problem. how to deal with the simplest problem. how to deal with the simplest problem. But he learned to do all those things, But he learned to do all those things, But he learned to do all those things, and he learned to do them well because and he learned to do them well because and he learned to do them well because of that spirit of Japanese of that spirit of Japanese of that spirit of Japanese resourcefulness, he was able to make a resourcefulness, he was able to make a resourcefulness, he was able to make a comfortable living and left you with a comfortable living and left you with a comfortable living and left you with a bicycle shop and a way to earn your bicycle shop and a way to earn your bicycle shop and a way to earn your living. Now, we are launching a new living. Now, we are launching a new living. Now, we are launching a new product. It will be a motor-driven product. It will be a motor-driven product. It will be a motor-driven bicycle. You have hardly seen one, and bicycle. You have hardly seen one, and bicycle. You have hardly seen one, and you do not know how to sell it or how to you do not know how to sell it or how to you do not know how to sell it or how to repair it, but we intend to help you do repair it, but we intend to help you do repair it, but we intend to help you do both. This letter worked almost both. This letter worked almost both. This letter worked almost overnight. This set up a distribution overnight. This set up a distribution overnight. This set up a distribution network of 5,000 dealers on the basis of network of 5,000 dealers on the basis of network of 5,000 dealers on the basis of the replies that Fujisawa received from the replies that Fujisawa received from the replies that Fujisawa received from this letter. So, this is when Honda this letter. So, this is when Honda this letter. So, this is when Honda decides, "Hey, I went too narrow with decides, "Hey, I went too narrow with decides, "Hey, I went too narrow with the Dream." the Dream." the Dream." At the time, motorcyclists were thought At the time, motorcyclists were thought At the time, motorcyclists were thought of like this crazy cult. I should build of like this crazy cult. I should build of like this crazy cult. I should build something simpler that anybody could something simpler that anybody could something simpler that anybody could use, that people that are afraid of use, that people that are afraid of use, that people that are afraid of motorcycles would buy from me. motorcycles would buy from me. motorcycles would buy from me. And so, it says, "The demand for the And so, it says, "The demand for the And so, it says, "The demand for the Dream was moderate. The machine was Dream was moderate. The machine was Dream was moderate. The machine was heavy and it was expensive. Even more heavy and it was expensive. Even more heavy and it was expensive. Even more important, the motorcycle was a product important, the motorcycle was a product important, the motorcycle was a product designed for a relatively small group of designed for a relatively small group of designed for a relatively small group of enthusiasts, people who belong to the enthusiasts, people who belong to the enthusiasts, people who belong to the very exclusive cult of motorcyclists. I very exclusive cult of motorcyclists. I very exclusive cult of motorcyclists. I racked my brain to come up with a design racked my brain to come up with a design racked my brain to come up with a design that would be in great demand. The that would be in great demand. The that would be in great demand. The conclusion I reached was that I must conclusion I reached was that I must conclusion I reached was that I must make a motorcycle which would be able to make a motorcycle which would be able to make a motorcycle which would be able to substitute for the bicycle, which was substitute for the bicycle, which was substitute for the bicycle, which was enjoying overwhelming popularity in enjoying overwhelming popularity in enjoying overwhelming popularity in Japan in those post-war days." Honda set Japan in those post-war days." Honda set Japan in those post-war days." Honda set out to design a smaller engine of his out to design a smaller engine of his out to design a smaller engine of his own. The model he came up with was own. The model he came up with was own. The model he came up with was called the Cub. Again, the Cub is going called the Cub. Again, the Cub is going called the Cub. Again, the Cub is going to be one of the most successful to be one of the most successful to be one of the most successful products of all time. It is the products of all time. It is the products of all time. It is the best-selling motor vehicle of all time. best-selling motor vehicle of all time. best-selling motor vehicle of all time. This is why he believed he could make This is why he believed he could make This is why he believed he could make something as great and as widely something as great and as widely something as great and as widely appealing as the Cub. He says, "I was appealing as the Cub. He says, "I was appealing as the Cub. He says, "I was conceited enough to think that I conceited enough to think that I conceited enough to think that I understood the minds of people better understood the minds of people better understood the minds of people better than others, thanks to my wide-ranging than others, thanks to my wide-ranging than others, thanks to my wide-ranging pleasure-seeking activities such as pleasure-seeking activities such as pleasure-seeking activities such as drinking with all kinds of people." And drinking with all kinds of people." And drinking with all kinds of people." And so, night and day he's working on his so, night and day he's working on his so, night and day he's working on his product, and he is asked, like, "It must product, and he is asked, like, "It must product, and he is asked, like, "It must be extremely taxing to invent be extremely taxing to invent be extremely taxing to invent something." And I think Honda's reply to something." And I think Honda's reply to something." And I think Honda's reply to that question reveals a lot about that question reveals a lot about that question reveals a lot about himself. He says, "I don't really find himself. He says, "I don't really find himself. He says, "I don't really find it very taxing because I'm doing what I it very taxing because I'm doing what I it very taxing because I'm doing what I like to do. As the proverb goes, love like to do. As the proverb goes, love like to do. As the proverb goes, love shortens distances. A person who's shortens distances. A person who's shortens distances. A person who's trying to invent something new is trying to invent something new is trying to invent something new is enjoying himself, although he may appear enjoying himself, although he may appear enjoying himself, although he may appear to others to be having a hard time. to others to be having a hard time. to others to be having a hard time. And so he'll continue in this theme that And so he'll continue in this theme that And so he'll continue in this theme that you should be working on things that you you should be working on things that you you should be working on things that you love to do. He did it himself and he love to do. He did it himself and he love to do. He did it himself and he encouraged his employees to do the exact encouraged his employees to do the exact encouraged his employees to do the exact same thing. Honda tells the young men same thing. Honda tells the young men same thing. Honda tells the young men joining the company that they should joining the company that they should joining the company that they should understand that they are working first understand that they are working first understand that they are working first for themselves and second for the for themselves and second for the for themselves and second for the company and that they must do something company and that they must do something company and that they must do something that pleases them. To say this in Japan that pleases them. To say this in Japan that pleases them. To say this in Japan is revolutionary. is revolutionary. is revolutionary. And one of the things I love about Honda And one of the things I love about Honda And one of the things I love about Honda is that he wants to win by building the is that he wants to win by building the is that he wants to win by building the best product in the world. At this time best product in the world. At this time best product in the world. At this time there's a lot of other people in Japan there's a lot of other people in Japan there's a lot of other people in Japan trying to petition the government to trying to petition the government to trying to petition the government to essentially stop importing foreign goods essentially stop importing foreign goods essentially stop importing foreign goods and essentially protect their goods. And and essentially protect their goods. And and essentially protect their goods. And Honda is the only one of these Honda is the only one of these Honda is the only one of these manufacturers that doesn't vote for this manufacturers that doesn't vote for this manufacturers that doesn't vote for this and in fact he explicitly says he and in fact he explicitly says he and in fact he explicitly says he doesn't want any government help. This doesn't want any government help. This doesn't want any government help. This is what he says, this is fascinating. A is what he says, this is fascinating. A is what he says, this is fascinating. A group of private businesses held a group of private businesses held a group of private businesses held a meeting and decided to ask the meeting and decided to ask the meeting and decided to ask the government to adopt measures to promote government to adopt measures to promote government to adopt measures to promote exports and discourage imports to Japan. exports and discourage imports to Japan. exports and discourage imports to Japan. I did not participate because I felt I did not participate because I felt I did not participate because I felt strongly that we should not choose the strongly that we should not choose the strongly that we should not choose the easy path of asking for the government's easy path of asking for the government's easy path of asking for the government's help. In my opinion, the problem had to help. In my opinion, the problem had to help. In my opinion, the problem had to be solved by our own achievements in the be solved by our own achievements in the be solved by our own achievements in the technical field. If Japanese technology technical field. If Japanese technology technical field. If Japanese technology were good and Japanese products were were good and Japanese products were were good and Japanese products were high quality, then the Japanese would high quality, then the Japanese would high quality, then the Japanese would not have to import foreign-made not have to import foreign-made not have to import foreign-made products. I resolved to prove that high products. I resolved to prove that high products. I resolved to prove that high quality goods know no national quality goods know no national quality goods know no national boundaries. I resolved to discourage boundaries. I resolved to discourage boundaries. I resolved to discourage imports and promote exports by enhancing imports and promote exports by enhancing imports and promote exports by enhancing technology and developing engines that technology and developing engines that technology and developing engines that were the highest performing in the were the highest performing in the were the highest performing in the world. And he puts his money where his world. And he puts his money where his world. And he puts his money where his mouth is and even risks bankruptcy to do mouth is and even risks bankruptcy to do mouth is and even risks bankruptcy to do so. So he spends more on high quality so. So he spends more on high quality so. So he spends more on high quality tools that needed to make these high tools that needed to make these high tools that needed to make these high quality products that he wants to make quality products that he wants to make quality products that he wants to make than the company had in assets in the than the company had in assets in the than the company had in assets in the time. He spent something like 10x on time. He spent something like 10x on time. He spent something like 10x on tools than the entire assets of the tools than the entire assets of the tools than the entire assets of the company. And his thinking here is very company. And his thinking here is very company. And his thinking here is very fascinating, but Honda found that high fascinating, but Honda found that high fascinating, but Honda found that high quality products cannot be produced quality products cannot be produced quality products cannot be produced without high-quality tools. My feeling without high-quality tools. My feeling without high-quality tools. My feeling was that even if our company went was that even if our company went was that even if our company went bankrupt after importing production bankrupt after importing production bankrupt after importing production machine tools, this did not mean I was machine tools, this did not mean I was machine tools, this did not mean I was squandering resources because the squandering resources because the squandering resources because the machines would remain and be working for machines would remain and be working for machines would remain and be working for the people no matter what happened to the people no matter what happened to the people no matter what happened to me. I thought that Japan would be me. I thought that Japan would be me. I thought that Japan would be swallowed up by the worldwide tide of swallowed up by the worldwide tide of swallowed up by the worldwide tide of economic liberalization and competition economic liberalization and competition economic liberalization and competition if it remained behind without doing if it remained behind without doing if it remained behind without doing anything to maintain its competitive anything to maintain its competitive anything to maintain its competitive position. I believe that there was only position. I believe that there was only position. I believe that there was only one decision for Japan to make, either one decision for Japan to make, either one decision for Japan to make, either to bring about its own destruction by to bring about its own destruction by to bring about its own destruction by turning its back on the progress of the turning its back on the progress of the turning its back on the progress of the world or to dare to chance survival by world or to dare to chance survival by world or to dare to chance survival by importing up-to-date machinery. And I importing up-to-date machinery. And I importing up-to-date machinery. And I chose the latter. Now, the crazy thing chose the latter. Now, the crazy thing chose the latter. Now, the crazy thing is right after he leverages the company is right after he leverages the company is right after he leverages the company and buys all the all these machines, and buys all the all these machines, and buys all the all these machines, Japan goes into a deep recession and as Japan goes into a deep recession and as Japan goes into a deep recession and as a result Honda cannot pay for his a result Honda cannot pay for his a result Honda cannot pay for his machines. And what I love about what machines. And what I love about what machines. And what I love about what happens next is this example that happens next is this example that happens next is this example that relationships run the world. So, Honda relationships run the world. So, Honda relationships run the world. So, Honda has a supporter inside of his main has a supporter inside of his main has a supporter inside of his main creditor, inside the bank. And this creditor, inside the bank. And this creditor, inside the bank. And this supporter convinced the rest of the bank supporter convinced the rest of the bank supporter convinced the rest of the bank not to foreclose on Honda. The reason not to foreclose on Honda. The reason not to foreclose on Honda. The reason this is so fascinating to me is he's this is so fascinating to me is he's this is so fascinating to me is he's just trying to help Honda buy time. He just trying to help Honda buy time. He just trying to help Honda buy time. He understands the assets are still good. understands the assets are still good. understands the assets are still good. And Honda in turn repays many decades And Honda in turn repays many decades And Honda in turn repays many decades later when Honda is a giant giant later when Honda is a giant giant later when Honda is a giant giant company. When they're much more company. When they're much more company. When they're much more successful than they are now, they're successful than they are now, they're successful than they are now, they're still doing business with this small still doing business with this small still doing business with this small bank even though they had better options bank even though they had better options bank even though they had better options available to them at that time. So, it available to them at that time. So, it available to them at that time. So, it says this guy Kawaraha supported Honda says this guy Kawaraha supported Honda says this guy Kawaraha supported Honda against those in the bank who wanted to against those in the bank who wanted to against those in the bank who wanted to foreclose on their loans. He reasoned foreclose on their loans. He reasoned foreclose on their loans. He reasoned that the machine tool purchases that that the machine tool purchases that that the machine tool purchases that Honda had made were of excellent Honda had made were of excellent Honda had made were of excellent equipment and could be sold if worse equipment and could be sold if worse equipment and could be sold if worse came to worst. It took 6 months, but came to worst. It took 6 months, but came to worst. It took 6 months, but Honda squeaked through. And once they Honda squeaked through. And once they Honda squeaked through. And once they come out of recession, Honda has a come out of recession, Honda has a come out of recession, Honda has a fantastic product in the Super Cub. Now, fantastic product in the Super Cub. Now, fantastic product in the Super Cub. Now, this is very interesting. They this is very interesting. They this is very interesting. They intentionally targeted non-motorcycle intentionally targeted non-motorcycle intentionally targeted non-motorcycle users in the way that Steve Jobs users in the way that Steve Jobs users in the way that Steve Jobs intentionally targeted non-technical intentionally targeted non-technical intentionally targeted non-technical users with the Apple II. So, this is the users with the Apple II. So, this is the users with the Apple II. So, this is the Super Cub was not designed for the Super Cub was not designed for the Super Cub was not designed for the young, daring speed demon in the young, daring speed demon in the young, daring speed demon in the motorcycle field. It was meant for the motorcycle field. It was meant for the motorcycle field. It was meant for the man in the street, his wife, and his man in the street, his wife, and his man in the street, his wife, and his kids. It opened up the possibility of kids. It opened up the possibility of kids. It opened up the possibility of low-priced, easy-to-ride, cheap low-priced, easy-to-ride, cheap low-priced, easy-to-ride, cheap transportation. It was a machine almost transportation. It was a machine almost transportation. It was a machine almost anyone could ride. The machine touched anyone could ride. The machine touched anyone could ride. The machine touched off an explosive demand for motorcycle off an explosive demand for motorcycle off an explosive demand for motorcycle transportation. I'm going to read you transportation. I'm going to read you transportation. I'm going to read you read you this from Steve Jobs' read you this from Steve Jobs' read you this from Steve Jobs' biography. Steve Jobs, again, had this biography. Steve Jobs, again, had this biography. Steve Jobs, again, had this very similar idea with the Apple II that very similar idea with the Apple II that very similar idea with the Apple II that we see that Honda had with the Super we see that Honda had with the Super we see that Honda had with the Super Cub, and this is what Steve Jobs said Cub, and this is what Steve Jobs said Cub, and this is what Steve Jobs said about the Apple II. "My vision was to about the Apple II. "My vision was to about the Apple II. "My vision was to create the first fully packaged create the first fully packaged create the first fully packaged computer. We were no longer aiming for computer. We were no longer aiming for computer. We were no longer aiming for the handful of hobbyists who like to the handful of hobbyists who like to the handful of hobbyists who like to assemble their own computers and who assemble their own computers and who assemble their own computers and who knew how to buy transformers and knew how to buy transformers and knew how to buy transformers and keyboards. For every one of them, there keyboards. For every one of them, there keyboards. For every one of them, there were a thousand people who would want were a thousand people who would want were a thousand people who would want the machine to be ready to run." the machine to be ready to run." the machine to be ready to run." And then now we get to what I think And then now we get to what I think And then now we get to what I think might be the most interesting part of might be the most interesting part of might be the most interesting part of this entire story. So, Honda had to this entire story. So, Honda had to this entire story. So, Honda had to change the perception of the entire change the perception of the entire change the perception of the entire product category before he could enjoy product category before he could enjoy product category before he could enjoy any success. any success. any success. And so how they thought about this and And so how they thought about this and And so how they thought about this and how they did this, there's a huge how they did this, there's a huge how they did this, there's a huge there's huge chunks of the book that I there's huge chunks of the book that I there's huge chunks of the book that I want to read to you cuz I found this want to read to you cuz I found this want to read to you cuz I found this part especially fascinating. The company part especially fascinating. The company part especially fascinating. The company laid down a saturated advertising laid down a saturated advertising laid down a saturated advertising campaign. The problem they found was the campaign. The problem they found was the campaign. The problem they found was the very low reputation of motorcycles in very low reputation of motorcycles in very low reputation of motorcycles in the public at large. So, the initial the public at large. So, the initial the public at large. So, the initial thing we had to do was to change the thing we had to do was to change the thing we had to do was to change the image of the motorbike. What we did was image of the motorbike. What we did was image of the motorbike. What we did was to advertise our motorbike through such to advertise our motorbike through such to advertise our motorbike through such popular and prestigious magazines as popular and prestigious magazines as popular and prestigious magazines as Time and Life. We wanted to develop Time and Life. We wanted to develop Time and Life. We wanted to develop products that would be purchased by the products that would be purchased by the products that would be purchased by the nicest people. So, that became our nicest people. So, that became our nicest people. So, that became our slogan, "You meet the nicest people on a slogan, "You meet the nicest people on a slogan, "You meet the nicest people on a Honda." Motorcycles at the time carried Honda." Motorcycles at the time carried Honda." Motorcycles at the time carried bad connotations. It was the idea that bad connotations. It was the idea that bad connotations. It was the idea that you were rough, dangerous, and perhaps you were rough, dangerous, and perhaps you were rough, dangerous, and perhaps even a criminal if you rode a even a criminal if you rode a even a criminal if you rode a motorcycle. motorcycle. motorcycle. The company fought a continuing battle The company fought a continuing battle The company fought a continuing battle against the image of the motorcycle as a against the image of the motorcycle as a against the image of the motorcycle as a plaything for juvenile delinquents. The plaything for juvenile delinquents. The plaything for juvenile delinquents. The advertising program was based on the advertising program was based on the advertising program was based on the belief that the primary resistance of belief that the primary resistance of belief that the primary resistance of motorcycle sales was not based on the motorcycle sales was not based on the motorcycle sales was not based on the public's lack of familiarity with the public's lack of familiarity with the public's lack of familiarity with the vehicle. The problem was the the vehicle. The problem was the the vehicle. The problem was the the acceptance of motorcycles as serious acceptance of motorcycles as serious acceptance of motorcycles as serious transportation. transportation. transportation. Their largest market is going to be Their largest market is going to be Their largest market is going to be America, and so this is where they're America, and so this is where they're America, and so this is where they're waging the war first. There was a waging the war first. There was a waging the war first. There was a general concept that anyone riding a general concept that anyone riding a general concept that anyone riding a motorcycle was a member of a black motorcycle was a member of a black motorcycle was a member of a black leather gang. leather gang. leather gang. Honda's ads didn't set out to sell their Honda's ads didn't set out to sell their Honda's ads didn't set out to sell their own products. This part is so important. own products. This part is so important. own products. This part is so important. Honda's ads didn't set out to sell their Honda's ads didn't set out to sell their Honda's ads didn't set out to sell their own products. They sold motorcycling. own products. They sold motorcycling. own products. They sold motorcycling. Their ads featured illustrations of Their ads featured illustrations of Their ads featured illustrations of people in various respectable walks of people in various respectable walks of people in various respectable walks of life, students, housewives, businessmen, life, students, housewives, businessmen, life, students, housewives, businessmen, etc. with motorcycles. They became the etc. with motorcycles. They became the etc. with motorcycles. They became the largest advertiser of motorcycles on US largest advertiser of motorcycles on US largest advertiser of motorcycles on US network TV. They spread their slogan, network TV. They spread their slogan, network TV. They spread their slogan, "You meet the nicest people on a Honda" "You meet the nicest people on a Honda" "You meet the nicest people on a Honda" far and wide. Their ads showed ordinary far and wide. Their ads showed ordinary far and wide. Their ads showed ordinary presentable people in all walks of life presentable people in all walks of life presentable people in all walks of life on a Honda. This is also very smart. on a Honda. This is also very smart. on a Honda. This is also very smart. They were targeting not just a potential They were targeting not just a potential They were targeting not just a potential owner driver, but his family, seeking owner driver, but his family, seeking owner driver, but his family, seeking parental and family acceptance of the parental and family acceptance of the parental and family acceptance of the Honda as an acceptable means of Honda as an acceptable means of Honda as an acceptable means of transportation for a loved one. And one transportation for a loved one. And one transportation for a loved one. And one story, and one anecdote illustrates how story, and one anecdote illustrates how story, and one anecdote illustrates how successful Honda was at this exact successful Honda was at this exact successful Honda was at this exact point. So, a mom goes in to one of the point. So, a mom goes in to one of the point. So, a mom goes in to one of the Honda dealers. A parent with her son Honda dealers. A parent with her son Honda dealers. A parent with her son went to a Honda dealer and said, "My son went to a Honda dealer and said, "My son went to a Honda dealer and said, "My son was insisting on buying a motorcycle. I was insisting on buying a motorcycle. I was insisting on buying a motorcycle. I told him I wouldn't have him riding one told him I wouldn't have him riding one told him I wouldn't have him riding one of them, but I would buy him a Honda." of them, but I would buy him a Honda." of them, but I would buy him a Honda." That is really clever. Okay, so then I That is really clever. Okay, so then I That is really clever. Okay, so then I need to get to the fact that the need to get to the fact that the need to get to the fact that the Really, I would think of Honda like Really, I would think of Honda like Really, I would think of Honda like basically like a giant research and basically like a giant research and basically like a giant research and development organization. They development organization. They development organization. They prioritize research and development over prioritize research and development over prioritize research and development over everything else, and they knew if they everything else, and they knew if they everything else, and they knew if they do so, then inevitably they will invent do so, then inevitably they will invent do so, then inevitably they will invent new products that come out of that. And new products that come out of that. And new products that come out of that. And so, one thing that he uses for his R&D, so, one thing that he uses for his R&D, so, one thing that he uses for his R&D, and we'll get to the fact that he and we'll get to the fact that he and we'll get to the fact that he actually spun his R&D department out and actually spun his R&D department out and actually spun his R&D department out and put it into a separate company. I don't put it into a separate company. I don't put it into a separate company. I don't This is a very fascinating idea. So, This is a very fascinating idea. So, This is a very fascinating idea. So, Honda is intent on using racing as R&D, Honda is intent on using racing as R&D, Honda is intent on using racing as R&D, and he has this experience by going to and he has this experience by going to and he has this experience by going to the greatest motorcycle race in the the greatest motorcycle race in the the greatest motorcycle race in the world at time, which takes place at the world at time, which takes place at the world at time, which takes place at the Isle of Man. And this experience he has Isle of Man. And this experience he has Isle of Man. And this experience he has is going to cause him to fundamentally is going to cause him to fundamentally is going to cause him to fundamentally reorganize how his company operates. So, reorganize how his company operates. So, reorganize how his company operates. So, he says, "Top motorcycle men from he says, "Top motorcycle men from he says, "Top motorcycle men from various countries are invited to match various countries are invited to match various countries are invited to match the technical standards of their the technical standards of their the technical standards of their machines." He saw German and Italian machines." He saw German and Italian machines." He saw German and Italian motorcycles competing and said, "I felt motorcycles competing and said, "I felt motorcycles competing and said, "I felt discouraged and flabbergasted in discouraged and flabbergasted in discouraged and flabbergasted in thinking that it would be a long time thinking that it would be a long time thinking that it would be a long time before my dream of winning this race before my dream of winning this race before my dream of winning this race would be realized. But, it did not take would be realized. But, it did not take would be realized. But, it did not take me too much time for my inborn me too much time for my inborn me too much time for my inborn unyielding spirit to reassert itself. unyielding spirit to reassert itself. unyielding spirit to reassert itself. There is no reason why something which There is no reason why something which There is no reason why something which could be done by foreigners could not be could be done by foreigners could not be could be done by foreigners could not be done by the Japanese. And what I had to done by the Japanese. And what I had to done by the Japanese. And what I had to do was to concentrate on research to do was to concentrate on research to do was to concentrate on research to find out why it was that the motorcycles find out why it was that the motorcycles find out why it was that the motorcycles I had seen had the same number of I had seen had the same number of I had seen had the same number of cylinders as our motorcycles, but had cylinders as our motorcycles, but had cylinders as our motorcycles, but had three times the horsepower." So, then he three times the horsepower." So, then he three times the horsepower." So, then he goes back, and this is when he sets up goes back, and this is when he sets up goes back, and this is when he sets up R&D as a separate company in Y. This is R&D as a separate company in Y. This is R&D as a separate company in Y. This is fascinating. Honda reorganized the fascinating. Honda reorganized the fascinating. Honda reorganized the company. He set up a special resource company. He set up a special resource company. He set up a special resource organization. They were given organization. They were given organization. They were given independent status and made a separate independent status and made a separate independent status and made a separate company. Honda explains why he did this. company. Honda explains why he did this. company. Honda explains why he did this. "One thing that must not be forgotten is "One thing that must not be forgotten is "One thing that must not be forgotten is that research means a succession of that research means a succession of that research means a succession of failures. That more than 99% of our failures. That more than 99% of our failures. That more than 99% of our research is total failure. Had we left research is total failure. Had we left research is total failure. Had we left research in the parent company, it would research in the parent company, it would research in the parent company, it would have been treated like a stepchild. For have been treated like a stepchild. For have been treated like a stepchild. For that company's purpose is the pursuit of that company's purpose is the pursuit of that company's purpose is the pursuit of profits. Since good research cannot be profits. Since good research cannot be profits. Since good research cannot be treated as simply as an appendage on treated as simply as an appendage on treated as simply as an appendage on manufacturing, I decided that it would manufacturing, I decided that it would manufacturing, I decided that it would have to be a separate distinct have to be a separate distinct have to be a separate distinct operation. The organizational structure operation. The organizational structure operation. The organizational structure of a research institute is different of a research institute is different of a research institute is different from that of a manufacturing company. A from that of a manufacturing company. A from that of a manufacturing company. A research organization should be research organization should be research organization should be structured to enable individuals to make structured to enable individuals to make structured to enable individuals to make the best of their ability. Whereas a the best of their ability. Whereas a the best of their ability. Whereas a manufacturing company should be manufacturing company should be manufacturing company should be organized to yield maximum efficiency. organized to yield maximum efficiency. organized to yield maximum efficiency. We decided that Honda research should We decided that Honda research should We decided that Honda research should get a specific portion of the sales of get a specific portion of the sales of get a specific portion of the sales of Honda overall, and in return it hands Honda overall, and in return it hands Honda overall, and in return it hands over any developments it makes to Honda over any developments it makes to Honda over any developments it makes to Honda manufacturing." manufacturing." manufacturing." And in research is where he wants to And in research is where he wants to And in research is where he wants to spend most of his time. He likes to do spend most of his time. He likes to do spend most of his time. He likes to do the actual work and views himself mainly the actual work and views himself mainly the actual work and views himself mainly just as an employee of his own company. just as an employee of his own company. just as an employee of his own company. Honda's commitment to the research Honda's commitment to the research Honda's commitment to the research activities of the company was a very activities of the company was a very activities of the company was a very personal one. He spent almost all of his personal one. He spent almost all of his personal one. He spent almost all of his time at the research and engineering time at the research and engineering time at the research and engineering laboratories where he was not bored with laboratories where he was not bored with laboratories where he was not bored with the problems of marketing and finance. the problems of marketing and finance. the problems of marketing and finance. He would be smeared with grease as he He would be smeared with grease as he He would be smeared with grease as he worked side by side with the development worked side by side with the development worked side by side with the development engineers. I am president of the company engineers. I am president of the company engineers. I am president of the company only when I'm considering its future, only when I'm considering its future, only when I'm considering its future, but most of the time I'm just one of the but most of the time I'm just one of the but most of the time I'm just one of the employees. Now, one of the most employees. Now, one of the most employees. Now, one of the most fascinating parts of the book is the fascinating parts of the book is the fascinating parts of the book is the fact that there's another legendary fact that there's another legendary fact that there's another legendary company that you and I have both talked company that you and I have both talked company that you and I have both talked about and studied in the past that was about and studied in the past that was about and studied in the past that was started the exact same time in Japan as started the exact same time in Japan as started the exact same time in Japan as Honda and that is Sony. And so, the Honda and that is Sony. And so, the Honda and that is Sony. And so, the founder, the founding engineer and the founder, the founding engineer and the founder, the founding engineer and the technical brilliance behind Sony, Masaru technical brilliance behind Sony, Masaru technical brilliance behind Sony, Masaru Ibuka, appears in this book and for like Ibuka, appears in this book and for like Ibuka, appears in this book and for like two pages. He kind of breaks down why two pages. He kind of breaks down why two pages. He kind of breaks down why Honda, what makes Honda such a special Honda, what makes Honda such a special Honda, what makes Honda such a special founder. It's one of my favorite parts founder. It's one of my favorite parts founder. It's one of my favorite parts of the book. Says, "The unique feature of the book. Says, "The unique feature of the book. Says, "The unique feature of Mr. Honda's personality has been that of Mr. Honda's personality has been that of Mr. Honda's personality has been that once he gets an idea, he pursues it once he gets an idea, he pursues it once he gets an idea, he pursues it regardless of what's in the way. I think regardless of what's in the way. I think regardless of what's in the way. I think the best comparison is with Edwin Land the best comparison is with Edwin Land the best comparison is with Edwin Land of Polaroid who seems to be a similar of Polaroid who seems to be a similar of Polaroid who seems to be a similar type of individual. I think the thing type of individual. I think the thing type of individual. I think the thing that made Honda outstanding is that he that made Honda outstanding is that he that made Honda outstanding is that he concentrated on engines as an engineer. concentrated on engines as an engineer. concentrated on engines as an engineer. This was the one thing on which he This was the one thing on which he This was the one thing on which he focused all of his attention. Honda focused all of his attention. Honda focused all of his attention. Honda concentrated on engines. He left the concentrated on engines. He left the concentrated on engines. He left the rest of the business to Fujisawa. When rest of the business to Fujisawa. When rest of the business to Fujisawa. When Honda would concentrate on a goal, he Honda would concentrate on a goal, he Honda would concentrate on a goal, he would pay so much attention to it and would pay so much attention to it and would pay so much attention to it and the company would concentrate on on it the company would concentrate on on it the company would concentrate on on it so much that sales would fall off. so much that sales would fall off. so much that sales would fall off. Observers on the outside world would say Observers on the outside world would say Observers on the outside world would say that Honda was on the road to that Honda was on the road to that Honda was on the road to bankruptcy. When Honda then succeeded in bankruptcy. When Honda then succeeded in bankruptcy. When Honda then succeeded in a technical breakthrough that started a technical breakthrough that started a technical breakthrough that started yielding products, then its sales would yielding products, then its sales would yielding products, then its sales would go skyrocketing and business would boom. go skyrocketing and business would boom. go skyrocketing and business would boom. As a result of this, Honda has As a result of this, Honda has As a result of this, Honda has accumulated a tremendous amount of accumulated a tremendous amount of accumulated a tremendous amount of unique engine technology which it alone unique engine technology which it alone unique engine technology which it alone has. Honda resisted suggestions that the has. Honda resisted suggestions that the has. Honda resisted suggestions that the company move into other fields. The company move into other fields. The company move into other fields. The company's products, he said, must have company's products, he said, must have company's products, he said, must have an engine. Reminds me of what Henry Ford an engine. Reminds me of what Henry Ford an engine. Reminds me of what Henry Ford wrote in one of his books. This is Henry wrote in one of his books. This is Henry wrote in one of his books. This is Henry Ford. This this sounds exactly like Ford. This this sounds exactly like Ford. This this sounds exactly like Honda. We are in the motor business and Honda. We are in the motor business and Honda. We are in the motor business and in no other businesses. Everything that in no other businesses. Everything that in no other businesses. Everything that we do gets back to the motor. If you we do gets back to the motor. If you we do gets back to the motor. If you study the career of Henry Ford, you just study the career of Henry Ford, you just study the career of Henry Ford, you just realize, "Oh, he basically saw car a car realize, "Oh, he basically saw car a car realize, "Oh, he basically saw car a car as wheels for a motor. The car was just as wheels for a motor. The car was just as wheels for a motor. The car was just the delivery mechanism for the motor. the delivery mechanism for the motor. the delivery mechanism for the motor. The motor was the center of gravity for The motor was the center of gravity for The motor was the center of gravity for his entire enterprise, just like it is his entire enterprise, just like it is his entire enterprise, just like it is for Honda. And so then Honda goes back for Honda. And so then Honda goes back for Honda. And so then Honda goes back to talking about the importance of to talking about the importance of to talking about the importance of racing as R&D. He actually calls racing as R&D. He actually calls racing as R&D. He actually calls entering a race floating research. This entering a race floating research. This entering a race floating research. This is fascinating. "We are not just out to is fascinating. "We are not just out to is fascinating. "We are not just out to win a race," Honda said. "We want to win a race," Honda said. "We want to win a race," Honda said. "We want to apply the knowledge we gain in the race apply the knowledge we gain in the race apply the knowledge we gain in the race to production. By improving the to production. By improving the to production. By improving the technical qualities of our engines for technical qualities of our engines for technical qualities of our engines for racing, we are able to improve our racing, we are able to improve our racing, we are able to improve our standard cars." standard cars." standard cars." Honda also feels his company is unique Honda also feels his company is unique Honda also feels his company is unique and should go it alone. So, as most of and should go it alone. So, as most of and should go it alone. So, as most of his competitors at the time are merging his competitors at the time are merging his competitors at the time are merging or doing joint ventures with larger or doing joint ventures with larger or doing joint ventures with larger American car manufacturers. So, like American car manufacturers. So, like American car manufacturers. So, like Mitsubishi goes and partners with Mitsubishi goes and partners with Mitsubishi goes and partners with Chrysler, Isuzu partners with General Chrysler, Isuzu partners with General Chrysler, Isuzu partners with General Motors, and Honda did not, and this is Motors, and Honda did not, and this is Motors, and Honda did not, and this is why. Honda thought that he should go it why. Honda thought that he should go it why. Honda thought that he should go it alone, that there was a special genius alone, that there was a special genius alone, that there was a special genius in the company that must be preserved. in the company that must be preserved. in the company that must be preserved. And he thinks the center of that genius And he thinks the center of that genius And he thinks the center of that genius is their research. And so, he talks more is their research. And so, he talks more is their research. And so, he talks more about this peculiar approach to research about this peculiar approach to research about this peculiar approach to research that they had when he was running the that they had when he was running the that they had when he was running the company. "The basic principle of our R&D company. "The basic principle of our R&D company. "The basic principle of our R&D program is that our R&D work is respect program is that our R&D work is respect program is that our R&D work is respect for humanity. Men desire something, for humanity. Men desire something, for humanity. Men desire something, technology is something to achieve that technology is something to achieve that technology is something to achieve that goal. It's not that technology is there, goal. It's not that technology is there, goal. It's not that technology is there, and that's why we make this. It's the and that's why we make this. It's the and that's why we make this. It's the other way around. There is a need, hence other way around. There is a need, hence other way around. There is a need, hence the technology. The technology is simply the technology. The technology is simply the technology. The technology is simply a means. This is our fundamental a means. This is our fundamental a means. This is our fundamental philosophy. The quality of our philosophy. The quality of our philosophy. The quality of our development is not solely dependent on development is not solely dependent on development is not solely dependent on the amount of money that we devote to the amount of money that we devote to the amount of money that we devote to R&D and the number of people we have. R&D and the number of people we have. R&D and the number of people we have. In R&D, we believe that what is In R&D, we believe that what is In R&D, we believe that what is important is what is in our people's important is what is in our people's important is what is in our people's brains. We manage R&D in such a way that brains. We manage R&D in such a way that brains. We manage R&D in such a way that everybody in there enjoys working and everybody in there enjoys working and everybody in there enjoys working and that they're enthusiastic. If their that they're enthusiastic. If their that they're enthusiastic. If their brains are on strike, then nothing is brains are on strike, then nothing is brains are on strike, then nothing is going to work no matter how much money going to work no matter how much money going to work no matter how much money you put into it. With our technology, we you put into it. With our technology, we you put into it. With our technology, we can create the demand. We can create the can create the demand. We can create the can create the demand. We can create the market. And I love that he stayed market. And I love that he stayed market. And I love that he stayed focused that excellence in our product focused that excellence in our product focused that excellence in our product is our North Star. Go back to what he is our North Star. Go back to what he is our North Star. Go back to what he said. He's like, "I don't want this said. He's like, "I don't want this said. He's like, "I don't want this protectionism this government protectionism this government protectionism this government protectionism. protectionism. protectionism. If I build the best product, the best If I build the best product, the best If I build the best product, the best product knows no national boundaries." product knows no national boundaries." product knows no national boundaries." And so, he says, "We sometimes say that And so, he says, "We sometimes say that And so, he says, "We sometimes say that it's nice that there are companies which it's nice that there are companies which it's nice that there are companies which are interested only in seeking profits are interested only in seeking profits are interested only in seeking profits because thanks to such companies, a because thanks to such companies, a because thanks to such companies, a small company like Honda will have a small company like Honda will have a small company like Honda will have a chance to do great work." And so, in chance to do great work." And so, in chance to do great work." And so, in that pursuit of excellence in achieving that pursuit of excellence in achieving that pursuit of excellence in achieving a great product, he is also very a great product, he is also very a great product, he is also very extreme. And so, he says, "Do not accept extreme. And so, he says, "Do not accept extreme. And so, he says, "Do not accept any easygoing technological compromise. any easygoing technological compromise. any easygoing technological compromise. If there is a possibility, then we If there is a possibility, then we If there is a possibility, then we should pursue it to the extreme. That is should pursue it to the extreme. That is should pursue it to the extreme. That is the essence of our research staff." the essence of our research staff." the essence of our research staff." And then the book ends describing what And then the book ends describing what And then the book ends describing what makes Honda special, why there is genius makes Honda special, why there is genius makes Honda special, why there is genius in the company needs to be preserved, in the company needs to be preserved, in the company needs to be preserved, and why he had to retire. It says, and why he had to retire. It says, and why he had to retire. It says, "Honda is different. It is a company "Honda is different. It is a company "Honda is different. It is a company founded by a man who is fond of the founded by a man who is fond of the founded by a man who is fond of the smell of gasoline. Founded by a man who smell of gasoline. Founded by a man who smell of gasoline. Founded by a man who is a transportation maniac. Honda is an is a transportation maniac. Honda is an is a transportation maniac. Honda is an engineer. He is a man who only knows how engineer. He is a man who only knows how engineer. He is a man who only knows how to make things. He is talented at to make things. He is talented at to make things. He is talented at cutting through technological jungles. cutting through technological jungles. cutting through technological jungles. What is important to remember is that What is important to remember is that What is important to remember is that Honda was not the only company founded Honda was not the only company founded Honda was not the only company founded in those days, so post-World War II in those days, so post-World War II in those days, so post-World War II destruction. There were many many other destruction. There were many many other destruction. There were many many other companies seeking to make their way. companies seeking to make their way. companies seeking to make their way. Of all these companies, only a handful Of all these companies, only a handful Of all these companies, only a handful have survived. The others were blown have survived. The others were blown have survived. The others were blown away by storms like pebbles on a roof. away by storms like pebbles on a roof. away by storms like pebbles on a roof. And there are some traits common to And there are some traits common to And there are some traits common to those companies which survived. The men those companies which survived. The men those companies which survived. The men who founded them were all innovators. who founded them were all innovators. who founded them were all innovators. And one way that Honda ensured that his And one way that Honda ensured that his And one way that Honda ensured that his company continued to innovate was by He company continued to innovate was by He company continued to innovate was by He was obsessed with staffing his company was obsessed with staffing his company was obsessed with staffing his company with young people and then giving them with young people and then giving them with young people and then giving them the ability to change the company, which the ability to change the company, which the ability to change the company, which goes against human nature. Youthfulness goes against human nature. Youthfulness goes against human nature. Youthfulness is mentioned in the company management is mentioned in the company management is mentioned in the company management policy. Youngsters will think that policy. Youngsters will think that policy. Youngsters will think that things must be changed. This is a quote things must be changed. This is a quote things must be changed. This is a quote from Honda. And the older generation from Honda. And the older generation from Honda. And the older generation will be critical of the young. It is will be critical of the young. It is will be critical of the young. It is natural that there exist insurmountable natural that there exist insurmountable natural that there exist insurmountable differences between these two. Honda differences between these two. Honda differences between these two. Honda accepts this as not only an inevitable accepts this as not only an inevitable accepts this as not only an inevitable conflict, but one which he approves of conflict, but one which he approves of conflict, but one which he approves of and feels is essential to progress. and feels is essential to progress. and feels is essential to progress. Honda has put the emphasis on the Honda has put the emphasis on the Honda has put the emphasis on the recruitment of young people. Our R&D recruitment of young people. Our R&D recruitment of young people. Our R&D system is such that each individual is system is such that each individual is system is such that each individual is given an opportunity to do whatever he given an opportunity to do whatever he given an opportunity to do whatever he would like to do. would like to do. would like to do. He is free to make any proposal and take He is free to make any proposal and take He is free to make any proposal and take responsibility for any research he wants responsibility for any research he wants responsibility for any research he wants to do. If you only have older to do. If you only have older to do. If you only have older experienced engineers, you're not going experienced engineers, you're not going experienced engineers, you're not going to get anywhere. Young engineers must be to get anywhere. Young engineers must be to get anywhere. Young engineers must be given more opportunity. Honda added in given more opportunity. Honda added in given more opportunity. Honda added in his usual mixture of bravado and his usual mixture of bravado and his usual mixture of bravado and frankness. Keep in mind he's in his 60s frankness. Keep in mind he's in his 60s frankness. Keep in mind he's in his 60s when he says this. I regard myself as when he says this. I regard myself as when he says this. I regard myself as still being young mentally and still being young mentally and still being young mentally and physically, and I don't think you can physically, and I don't think you can physically, and I don't think you can beat me. Realistically, however, I must beat me. Realistically, however, I must beat me. Realistically, however, I must admit that nowadays I often envy young admit that nowadays I often envy young admit that nowadays I often envy young people and feel I can no longer keep up people and feel I can no longer keep up people and feel I can no longer keep up with them. with them. with them. I now feel more keenly than ever how I now feel more keenly than ever how I now feel more keenly than ever how wonderful it is to be young. wonderful it is to be young. wonderful it is to be young. Nobody in the world is perfect. An Nobody in the world is perfect. An Nobody in the world is perfect. An important thing in any organization is important thing in any organization is important thing in any organization is for the individual to seek assistance for the individual to seek assistance for the individual to seek assistance from others for what is missing in him from others for what is missing in him from others for what is missing in him and what he cannot do. and what he cannot do. and what he cannot do. And at the same time spare no effort for And at the same time spare no effort for And at the same time spare no effort for maximum utilization of what he has. And maximum utilization of what he has. And maximum utilization of what he has. And this is what Honda said when he retired. this is what Honda said when he retired. this is what Honda said when he retired. Looking back in my work, I feel that I Looking back in my work, I feel that I Looking back in my work, I feel that I have made nothing but mistakes, a series have made nothing but mistakes, a series have made nothing but mistakes, a series of failures, a series of regrets. of failures, a series of regrets. of failures, a series of regrets. Although I made one mistake after Although I made one mistake after Although I made one mistake after another, my mistakes of failures were another, my mistakes of failures were another, my mistakes of failures were never due to the same reason. I never never due to the same reason. I never never due to the same reason. I never made the same mistake and I always I made the same mistake and I always I made the same mistake and I always I hardest and succeeded in improving my hardest and succeeded in improving my hardest and succeeded in improving my efforts. efforts. efforts. When he was asked what is he doing in When he was asked what is he doing in When he was asked what is he doing in retirement, he answered, retirement, he answered, retirement, he answered, "Fumbling with machines."