Konosuke Matsushita's first product sold under ¥10 in ten days. What kept the business alive was ¥80 of profit on 1,000 parts ordered by another firm

The starting money Konosuke Matsushita had when he went independent is known down to its parts. A severance payment of ¥33.20, ¥42 from savings held by his employer, and about ¥20 of his own savings. Together it came to less than ¥100.

With that money, four people began making an improved socket: Konosuke, his brother-in-law Toshio Iue, and two former colleagues. The finished sockets sold under ¥10 in ten days. The two colleagues drifted away, leaving Konosuke and Iue.

This column follows Panasonic’s first year through numbers, drawing on a compilation based on company histories and the founder’s own memoir. The company’s official history page could not be retrieved, so the column relies on a third-party compilation that names its sources. Listed companies fall outside this site’s criteria for cases, so only the first year is covered here, as a column.

From the socket in spring 1917 to the founding in March 1918

The figures rest on the 60-year history of Matsushita Electric Works, an encyclopedia of corporate histories since the Meiji era, and Konosuke’s own memoir. Figures for hard moments, such as how the socket sold, include his recollections.

The starting money included savings held by his employer

Look inside the under-¥100 starting money and nearly half was savings held by his employer. Severance and those savings together came to ¥75.20, while his own savings were only about ¥20. Most of the money for going independent was money received from the company he left.

Starting money is often told as money taken from one’s own wallet. Konosuke’s was made of time spent employed, converted into cash. For people starting small, that breakdown is close to reality: what you receive on leaving becomes your first stock.

His own product made under ¥10 in ten days

The improved socket the four made barely sold. Under ¥10 in ten days. With revenue not even a tenth of the starting money, two of the four left.

What the desk wants to state plainly is that the first in-house product failed. The first product of a company that would later become a giant electronics maker failed to sell and cost it people. That this failure is on record is partly because the founder wrote about it later and the company history quoted him.

What kept the business going was parts ordered by another company

What carried the business through was not its own product. An order came from Kawakita Electric to make 1,000 insulator plates for electric fans. The two delivered within the year and made a profit of ¥80.

¥80 is close to the starting money of nearly ¥100. It is more than eight times what the unsold socket brought in over ten days. At this point, making parts for another company’s product exactly as ordered was a far surer income than a product of their own design.

What follows is inference: this sequence looks close to a path people starting businesses often follow. Go to market with your own product, fail to sell, lend the skills on hand to someone else’s work to keep money flowing, then return to your own product. The company was formally founded in March 1918, after the plates were delivered.

The trade came before the company

Line up the dates and another sequence appears. Konosuke left Osaka Electric Light in June 1917 and founded Matsushita Electric Appliance Factory on March 7, 1918. In the roughly nine months between, he made and sold sockets, lost two people when they did not sell, and took and delivered the insulator plate order.

Before the company existed as a form, the trade had already been through a full round of ups and downs. The founding date is less the day the business began than the day a business that had survived was given a name and form. As with Nike’s three birthdays, which took three years from handshake to incorporation, the date on paper catches up after the trade here too.

Getting by on contract work before moving to one’s own product happens in small businesses too

Records of building one’s own product on profits from work taken for others exist at much smaller scales. The case that built $15,000 in MRR from client work and used it to build a SaaS lays out a 50-year-old, effectively one-person business moving from services to a product.

The list setting Panasonic beside other legendary companies is in the column tracing 22 founding legends to their sources.

The founding date and the founding anniversary differ

One more point stands out on the record. The company was founded on March 7, 1918, but the founding anniversary it set is May 5. It set that anniversary in 1932, fourteen years after the founding.

When the company began exists as two dates, the date on paper and the date the company chose for itself. Neither is the right one. It shows, though, that a founding date too was a number the company could choose again later.

What could be confirmed

The limits need stating. Every figure here comes from a third-party compilation citing company histories, an encyclopedia of corporate histories and the founder’s memoir. The company’s official history page could not be retrieved and was not checked directly. Figures such as how the socket sold may derive from the founder’s recollection and are not the books of the time. The exact months of the insulator plate order and delivery are not known.

The failure of its own product, and ¥80 from another firm’s parts

Lay out Panasonic’s first year in numbers and a shape slightly different from the story’s order appears. The starting money centred on money received from his employer, and the first in-house product made under ¥10 in ten days. What kept the business going was ¥80 of profit on parts another company ordered.

The legend is usually told from the invention of the improved socket. In numbers, though, what kept the business alive was not the invention but the contract work. Go out with your own product, get by on someone else’s work, then make your own company. The founding date sits at the end of that order.