Sony's first consumer product cost ¥160,000, more than 80% of the company's ¥190,000 capital

The record keeps two things: an ideal workplace, and a machine priced close to the company’s capital.

In 1946, Masaru Ibuka wrote a founding prospectus for his company.

The first purpose it set out was neither what to make nor how much to earn.

It was to build a free, open and enjoyable ideal factory where earnest engineers could use their skills to the fullest.

The company was called Tokyo Tsushin Kogyo. In May 1946 it began with capital of ¥190,000 and just over 20 employees, renting the third floor of a department store in Nihonbashi, Tokyo.

Four years later, in 1950, the company released Japan’s first tape recorder.

It was its first consumer product, priced at ¥160,000.

That’s more than 80% of the company’s ¥190,000 capital.

This column sets the words “ideal factory,” the ¥190,000 and the ¥160,000 side by side. Listed companies fall outside the criteria for cases, so only the period from founding to the first consumer product is covered here, as a column.

From the 1945 research institute to ¥160,000 in 1950

What survives as written by the founder at the time is the wording of the founding prospectus.

The numbers come from compilations based on company histories and press reports, and from an article reporting a visit to Sony’s history archive.

The prospectus wrote about the workplace before the product

What a founding document puts first reveals a company’s thinking.

The first thing Tokyo Tsushin Kogyo’s prospectus set down was building a place where engineers could bring out their skills as fully as they liked.

No product names or sales targets appear.

This order isn’t something the founder said after success. It survives as a document written at the moment the company was formed.

Among legendary founding stories, few have the founder’s struggles or ideals recorded in a document of the time.

Another example where a founder’s contemporaneous text survives is Microsoft’s first contract and open letter.

We read this prospectus as a design for hiring, not a statement of spirit.

For a company with ¥190,000 of capital, what could it offer to attract and keep engineers? Before the size of any salary came the promise of a place to work.

Capital per person didn’t reach ¥10,000

Divide the founding figures and another picture appears.

Against capital of ¥190,000 there were just over 20 employees. Per person, capital didn’t reach ¥10,000.

The company had no building of its own. It rented the third floor of a department store in Nihonbashi.

From starting as a research institute in October 1945 to becoming a company in May 1946, it stayed in the same corner of that store.

Compared with the number of people, money and space were extremely scarce.

The ¥160,000 price of the first consumer product, which comes next, has to be read with this small starting point alongside.

A company that began with under ¥10,000 of capital per person put a ¥160,000 machine on sale four years later.

A company with ¥190,000 of capital made a ¥160,000 product

The 1950 G-type was Japan’s first tape recorder. For Tokyo Tsushin Kogyo, it was the first consumer product.

It cost ¥160,000.

Capital at founding had been ¥190,000. The price of a single unit of the first consumer product exceeded 80% of the capital the company started with.

Even so, the arrangement of the numbers shows how expensive a purchase the first thing this company tried to sell to households was.

They made the tape themselves too

To sell a tape recorder, you need tape to record on.

According to the article from the history archive, Tokyo Tsushin Kogyo developed magnetic tape by trial and error and sold it itself as “Sony Tape.”

Without making the consumable it ran on as well as the machine, the product couldn’t work.

The founders sold it on foot, too. The article says Ibuka and Akio Morita travelled the country on sales calls.

For Japan’s first product of its kind, there weren’t yet stores to sell it or customers who knew how to use it.

1. Build a machine with no precedent

   Japan's first tape recorder, the G-type, at ¥160,000.

2. Make the tape it runs on

   Magnetic tape, made by trial and error and sold in-house as "Sony Tape."

3. Find the stores and customers yourself

   Ibuka and Morita travel the country on sales calls.

A company releasing a product without precedent has to prepare not only the making but also the use and the place of sale itself.

All of that sat on the price of its first product.

Makers write down the price of a first product in small businesses too

Records in which makers themselves wrote what they charged for a first product, and how it sold, exist at much smaller scales.

One is a visual novel made over about three years and released on Steam for ¥500. Its maker published everything down to 32 copies in the first month and the promotion spend.

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

What could be confirmed

It first wrote about a workplace, and first sold a machine priced near its capital

Follow Tokyo Tsushin Kogyo’s founding years through the record and two things remain.

One is a founding prospectus that wrote about the ideal workplace before any product.

The other is Japan’s first tape recorder, put out at a price above 80% of the company’s capital.

The legend tends to tell the founding backwards from later successes like the transistor radio.

But the words written at the founding, and the price of the first product sold to households, convey circumstances closer to the start.

A promise to gather people, and the weight of selling something without precedent.

That’s what the record keeps.