How To Build A Business That Lasts 80 Years
What makes a company last seemingly forever? When does a company become unsinkable? How does it become the household name?
From startups to corporate behemoths, these have been the same questions perpetually plaguing the tech industry for decades. While some ambitions for many entrepreneurs never leave the drawing board, previously unconquerable companies have succumbed to economy downturns, faulty investments, stiff competition, or loss of interest from consumers.
According to a 2012 study, the average lifespan of a company occupying a spot on the S&P 500 index over the past 92 years has decreased from 67 years to just 15 years. Specifically, in the consumer electronic industry, only nine companies currently populate the list of 500, many with distinct profiles outside of a dedicated line of consumer tech.
Now more than ever, adaptation and patience play pivotal roles in the success of the business but how it is maintained makes the fundamental difference in longevity.
Forever Is a Very Long Time
Almost as uncommon as lasting nearly 80 years, Pioneer credits its success to its most important intangible - the employee.
"The key to our success has always been our people," said Ted Cardenas, Vice President of Marketing, Car Electronics Division at Pioneer Electronics. "Even though Pioneer is a 79-year-old company, our customers, vendors, and retailer community think we are a much bigger company than we are. In the grand scheme of things, compared to other companies, we are quite small."
Focusing on quality over quantity makes the biggest difference for Pioneer as they begin to structure a system of passion above all else. Intentional or not, Pioneer's enthusiasm promotes employees to extend beyond their normal duties because of their dedication to a company.
"From the factory worker to the warehouse person to the administration staff, engineers, sales people - we all work here because we love the products that we build," Cardenas said. "We're music enthusiasts; we're consumer technology enthusiasts. Work becomes less of a menial task and more of an adventure of 'Wow, I get to work on something I'm genuinely interested in.'"
Finding Passion in Unfamiliar Territory
The biggest question many small companies face is when do they sacrifice passion for profit and when to stop building an empire and begin testing the waters to sell the entire ship.
With a touch of economic foresight, a lot of respect for their product, and coordination in their decision building, Pioneer was never forced to make those hard choices. They effectively turned "jobs into careers and careers into hobbies."
"It gives us the opportunity always to look for that next big thing," Cardenas said. "Pandora is a recent example where we had a staff of product planning that were very into streaming music at the time, so they brought the idea of integrating their favorite service."
Finding the best product for the consumer came internally because Pioneer intentionally creates products that appeal to them. Cardenas describes the everyday work culture as one that has the same human nature for the bigger, faster, and louder product.
This method of reasoning was pivotal in creating their newest line of goods for bicycle enthusiasts.
"I would never have thought that Pioneer would have bike products, but we do," Cardenas said. "It came as a direct result from cycling enthusiasts in the company. They have developed a product that fills a real need and people, like themselves, are willing to buy. That culture tends to steer a lot of our product and business decisions. By and large, for 79 years, this has been profitable for us and let us move into all the different areas we cover today."
While Pioneer sets their sights on the future and subscribing to the idea that they will be around indefinitely, they also have a clear vision of how they got to this point. By accepting responsibility for their mistakes and keeping a culture of motivated workers, Pioneer's future lies in a lot of various technologies but have core values in the automotive entertainment industry, and will move with the industry every step of the way.
"It's a pretty delicate balance of jumping on the latest thing and at the same time being so conservative that you miss the boat on things," Cardenas said. "By all means, we have jumped the gun on technology that didn't work, but we have grown and evolved. What we learn is that just because it didn't work five, ten or even 20 years ago, it might work today. From marketing to sales, to research, we try not to stay in the state of mind that it couldn't work today."
Pioneer was founded in 1938 in Tokyo, Japan by Nozomu Matsumoto - a man with a passion for music that he hoped to share with the world through high quality audio speakers. That passion began with a small operation to repair and manufacture speakers in Matsumoto's garage. It has since grown to international stature as a manufacturer of audio and video products for use at home, in the car and in business environments.
The element that has not changed in nearly 70 years is the passion for audio and video products that we hope to share with the world. From the employees at our research labs looking for the "next big thing" to the engineers at our factories focused on quality assurance to our product trainers explaining the new technology to our customers - we remain passionate about creating an unbeatable entertainment experience.