| BUSINESSWEEK ONLINE : MAY 31, 1999 ISSUE | ||||||||
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| INTERNATIONAL -- ASIAN COVER STORY
End Run Around Japan Inc. (int'l edition) Shigenobu Nagamori has never settled for second best. In school, he always stood first in line and insisted on playing the hero in samurai games. Today, the 54-year-old founder of Nidec Corp., one of Kyoto's leading high-tech ventures, still likes to be first. Whether he's riding the bullet train to Tokyo or soaring over the Pacific, he insists on sitting in the seat marked ''1A.'' And the company he created is No. 1 in tiny motors for consumer electronics gear. ''I hate being No. 2,'' says the tenacious Kyoto native. Nagamori, like other Kyoto entrepreneurs, delights in challenging Japan's conventional industrial model. For decades, government regulators have coddled a handful of huge electronics companies with easy credit and cushy contracts. In this system, even the most innovative startups were relegated to subcontracting roles. But from Nidec's inception in 1973, Nagamori wanted no part of that. He cast his lot mostly with foreign companies. Today, exports make up three-quarters of Nidec's $1.1 billion in annual sales. The company controls two-thirds of the world's market for spindle motors. Its stock is worth $3.8 billion. And Nidec has something that's rare in Tokyo's high-tech corridors--healthy operating profits of $133 million. Nidec may not shine next to America's high-tech supernovas. But no Silicon Valley company ever faced the obstacles Nagamori did. For starters, it was tough to attract first-rate engineers in Japan, with Hitachi Ltd., Toshiba Corp., and others all dangling promises of jobs for life. And forget about venture capital. Even today, such funding is barely a trickle by U.S. standards. YELLOW PAGES. So Nagamori quickly learned to convert setbacks into opportunities. At age 27, he quit his job at Yamashina Seiki, a precision machinery maker, when his bosses canceled a project he had spearheaded to develop the world's smallest motor. Nagamori took along three of his top engineers and launched Nidec from his Kyoto home. Ignoring the pleas of his wife and mother, Nagamori plowed his life's savings, equivalent to $170,000 today, into his startup. He shopped his motor around domestically, but nobody bit. All that Japan's industrial heavy hitters wanted to know, he says, ''was how old I was and how many staff I employed.'' Nagamori spent three months in 1973 crisscrossing the U.S. with a suitcase full of tiny motors for tape recorders and computer disk drives. He spent his days looking up potential customers in the Yellow Pages and cold-calling them in English that was barely intelligible. One such visit to 3M's headquarters in St. Paul, Minn., was set up from an airport pay phone. It landed Nagamori a face-to-face meeting--and his first order, worth $2,000. A year later, IBM ordered $1 million worth of disk-drive motors, which Nagamori designed himself. Soon he was doing business with some of America's top electronics brands. At a time when Japanese corporate giants wouldn't open their door to a tiny parts manufacturer with no connections to an industrial group, or keiretsu, ''my American clients welcomed my ability to rapidly develop new products,'' Nagamori recalls. ''No one cared about my age.'' Nagamori smartly funneled his first profits into real estate, then used his holdings as collateral to get bank loans. Meanwhile, he picked up some handy American concepts, such as attracting enterprising staff with stock options--a practice that even today is unheard of at most big companies in Japan. Today, Nidec's motors are found in everything from palmtop computers to hot-selling DVD players. And Nagamori's labs are developing even smaller micromachines. Most important, while Japanese giants lumber along with dozens of different business divisions, Nidec stays tightly focused. ''I intend to become the Intel of motors,'' says Nagamori. Boastful, but he and his Kyoto peers have earned bragging rights. By Irene M. Kunii in Kyoto _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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 Japan's High-Tech Hope (int'l edition) ASIAN COVER IMAGE: Japan's High-Tech Hope MAP: Kyoto TABLE: A City Rich in History and Legend (int'l edition) End Run Around Japan Inc. (int'l edition) ONLINE ORIGINAL: ``I Intend to Become the Intel of Motors'' ONLINE ORIGINAL: ``We Have the Intelligence to Succeed'' INTERACT E-Mail to Business Week Online | |||
