Sanpo-yoshi Communication

President's Column] Painful Failure (1)

This year I have received many requests to give lectures at universities and at management associations. Although I often decline these requests, there are many times when I have to accept them due to various reasons. At the end of the lecture, I take questions from the audience, and many of them ask me to tell them about "case studies of failure. I often get questions at the end of my presentations, and many people ask me to tell them about my failures. As the saying goes, there is no such thing as "defeat without a mystery," and it may be that failure cases with high reproducibility are more helpful than success cases with different conditions and initial setups.

I have made many mistakes in my career, but I don't think many of my clients remember my first foray into the free newspaper business 20 years ago.
At that time, Company R's coupon-centered free paper "H Magazine," which later took the world by storm, had not yet been born. Taking a hint from a story in the U.S. that the circulation of newspapers increased on Wednesdays because coupon-centered free newspapers were inserted into newspapers on Wednesdays, we took up the challenge of distributing a free newspaper containing a collection of discount coupons once a month to every household in Kurume City. We started with the idea that we could do the printing in-house and that it would be useful to our customers, but when we started, it turned out to be a huge struggle. We had to approach a different segment of our customers, such as restaurants and beauty stores, and we had a very difficult time in terms of sales. (I have never forgotten how grateful I was to the customers who cooperated with us at that time.) Once we decided on the publication date, we had to print and insert the ads even if the ad space was not filled, and the high fixed cost was very heavy.
We went to talk to the owners of successful free newspapers around the country and kept pushing our sales team to believe that one day things would turn around, but we finally ran out of steam and had to stop publishing.

Considering the printing, insertion, and production costs, plus the fact that we wasted a large sales resource, the loss was probably around 20 to 30 million yen. There were two popular free newspapers in Kurume at the time, and we were undeniably overconfident that we could do better if we did it ourselves. We were not sure if we were right or wrong.
With innovation on the rise, paper free newspapers were an outdated and difficult business. Moreover, we were overconfident in our own abilities.

However, this failure allowed us to truly understand the thankfulness and certainty of our core business. Although it is considered black history and taboo within the company, it is no small thing that I learned from this failure. I am sure that I will continue to challenge and fail, but I hope to learn a lot from my failures and grow both myself and the company.

Yoji Hiraki