On August 15th, 1945, the Japanese Emperor announced that Japan was surrendering. In the week prior, the US had dropped two atomic bombs on Hiroshima and Nagasaki—one of the darkest events in human history.
Japan was largely destroyed by indiscriminate bombing. Tokyo and all other major cities had been repeatedly firebombed. Half of Tokyo's residents were homeless. In 1946, a year after the war, the per-capita income in the country was $17. An occupation force was running the government. Japan was banned from having a military ever again.
During the war, Masaru Ibuka and Akio Morita worked as engineers in the military. When the war ended, Morita went back home to Nagoya, and Ibuka to Tokyo. This was a dark time. Despair was pervasive. Hope was absent. Trauma was everywhere. People were merely trying to survive.
In Tokyo, Ibuka came to see that all the technologies developed for military and industrial purposes during the war had no use since Japan no longer had a military. He saw an opportunity in this apparently bleak situation to use the technology to serve the consumer market.
The problem: this was not really an opportunity because the consumer market was beyond dismal. Most people neither had money nor the mood.
You had to be truly an irrational optimist to start something in a country that was completely battered by a World War. The national mood couldn't be darker. You had a market where people didn’t have any disposable income. As we noted earlier, maybe half of them didn't even have homes.
But Ibuka was a true irrational optimist. He decided to start a company in this completely war-torn, bombed-out world of Tokyo. He named the company Tokyo Telecommunications Research Institute, and created a founding prospectus for the company, which said the purpose of the company was to "establish a stable workplace where engineers could work to their heart's content in full consciousness of their joy in technology and their social obligation." He assembled a small team of engineers and got to work.
The first thing they made was an electric rice cooker, which failed. Next, they made an electric heating blanket. That also failed. Finally, they came up with a services business idea: the company became a radio repair shop within the Shirokiya department store, focusing on fixing damaged radios.
The service business quickly found a ready market. This was a beyond harsh time for people in Japan. People wanted to listen to news and entertainment. People wanted something to remind them of a better time and a better future. The company would eventually launch a product in the segment, something like an antenna.
Finally, things were slowly looking up for the company and they got featured in a national newspaper. Akio Morita, who was back home in Nagoya, read the article. He wrote to Ibuka and said that he would like to come to Tokyo and work with him. He eventually joined the company in May 1946. Afterward, they went to Nagoya to meet Morita’s family. They asked Morita’s father's permission for Morita to become a partner with Ibuka in the new venture. Morita’s father agreed and invested ¥190,000 in the new company. Still, it would take a few more years for Sony to reach a certain stability.
The first breakthrough came when the company developed the transistor radio. In 1955, Sony launched the TR-55, Japan’s first commercially successful transistor radio. It was an important technological innovation that allowed for portable music consumption. It helped Sony to build a strong foundation in the market.
Around this time, the company rebranded itself to Sony to improve its marketability. The rest is history. In the following years, Sony would become one of the most important technology companies in the world.
The story of Sony from a small workshop in war-torn Tokyo to a global conglomerate is a story of extraordinary resilience and optimism against incredible adversity. It shows the power of human optimism and our incredible capacity to overcome overwhelming odds.
However, Sony is not unique in its story of building something incredible amid ruins. Human civilization is a story of bouncing back from the ruins time and again. The most difficult of the time produce the best progress and stories. I truly believe the most difficult times bring out the best in us.
In early 2023, I wrote in “This is as good a time as any to start a company”:
“Some of the most successful startups of today, such as Airbnb, Uber, and Stripe, were founded between 2008 and 2010 at the height of the financial crisis.
The same is true for many past giants.
General Motors was launched in 1908 at a time when the US economy was in turmoil after the panic of the 1907 financial crisis. Burger King was founded in 1953 when the US was again in recession. CNN started its news broadcasts in 1980 when US inflation hit almost 15%.
In Bangladesh, many of the most successful conglomerates of today were founded in the 60s, 70s, and 80s when the economy was mostly in terrible shape. PRAN was founded in 1981. ACI was founded in 1973. Renata was rebuilt in the 90s. Of course, there was probably no apparent economic downturn during these years, but these were certainly economically difficult years for Bangladesh.
I understand that this data is not conclusive. You can find a far more convincing argument against what I just said. For instance, a study by Touchdown Ventures in 2020 found that only 24% of companies in the 2019 Fortune 500 list were founded at a time when the US economy contracted. The report indicates that companies launched in an economic downturn don't necessarily have a better chance of becoming a huge success.
But the examples we cited above also show that it is possible to build long-lasting companies during difficult economic and political times.”
We live in a constant dance of good and bad. History is cyclical. Peace and war have always been intertwined. Stability and instability don’t live far from each other. It is naive to expect uninterrupted good or bad times. It contradicts how the real world functions. That is why optimism is such a precious resource. Optimism allows us to act amid difficulties.
But optimism doesn’t happen in a vacuum. We have to seek optimism. We have to work to be optimistic. This is also why it makes sense to build because when we start something, it changes our perception of the world and ourselves. When we take action, it fundamentally changes the world, no matter how small that is. Again from This is as good a time as any to start a company:
“The biggest challenge of any crisis is managing our internal balance. The crisis results in despair. We resign. Give up. We deem everything will be impossible. Nothing will work. This sense of doom and gloom often exacerbates the situation.
One upside of starting something during a downturn is that it can help you get out of your despair mood. Action is often the answer to our despair. Action not only causes progress, but it also affects our mental state. We feel better when we act. It takes away our time for despair.
The second aspect is that most people would not start during a crisis. For instance, the common outlook now is that this is not the time to start a business. This can be an opportunity for the few brave ones who start regardless. As we have seen in the case of Zerodha in India, it means you will have uninterrupted time to build your business deliberately. You will have less competition.
The third aspect is that constraint works as an excellent forcing function for concentration and discipline. When times are tough, there are fewer distractions. For instance, there is not going to be much funding and glamorous events at least for a while. It means you will have to be frugal, and inventive, and build something that can sustain itself. It also means you will get uninterrupted time to do your work. Constraints often come with many upsides. So if you are considering starting something, this is an equally good time to do it.
Of course, there are risks. Given the economic realities of rising inflation and declining consumer spending, there probably are more uncertainties now than at a normal time. But the risk is a common factor whenever you start. The thing is that successful companies have been founded and can be founded during an economic downturn.
Once a mentor of mine told me statisticians rarely make entrepreneurs because they are always calculating what’s going up and what’s going down. Building things don’t happen following the math. Instead, it is always useful to listen to your heart and gut.”
Bangladesh is going through a major political change. There is a growing call for rebuilding and reform. Many people who have played a role in the recent student-people-led revolution are saying this is the time to build. There is a certain sense of optimism in the country. A large segment of society is more hopeful about a positive future today than at any time in our recent past.
My position has always been the same: it is always a time to build. This time around I can’t emphasize it more.
However, some people want to call our attention to caution. We are certainly not out of the prevailing economic challenges. We have just emerged from tyrannical rule, and we have no idea what will happen tomorrow, let alone six months from now. We face tremendous uncertainty. Nothing works. Police are not doing their job. Dysfunctions are everywhere. Consumer spending has not returned to normalcy. Questions about the stability and viability of reform efforts are growing louder. And you think this is the best time to build?
I argue it is. History tells us that this is indeed the best time to build. Many great organizations throughout history are products of extraordinary times.
As a country, Bangladesh is going through a crucial period. We have been afforded a second chance in many ways to set things right. We all need to participate in this journey. We should all come forward, regardless of our social and political leanings, and find ways to help build.
Don't give in to ideas of despair. Of course, things don't work as we expect them to. Of course, political leadership fails. Of course, there are setbacks and challenges. Despite these challenges, we must take our chances to build. We must start wherever we are because the alternative is much worse.
