▲ 307 points
back
110 comments
I read the whole letter and loved the tone of it! It jumps at you right away that: (1) Here's a guy who really cares about his business, its future, his employees. (2) He talks candidly about the reasons for closing up: his declining health, sales volumes, even including awkward sentences like "So chalk is more environmentally friendly, I think." I am now a fan of Hagoromo.
It was rather refreshing at a time when I can't stand reading more than a paragraph of a typical press release of a BigCo written by lawyers or PR specialists. Unlike this essay, those are intended to obfuscate, not to inform.
Yes. There's none of this maximize-shareholder-value, church-of-the-mba religion that pervades Western business culture right now.
He wanted to serve people sustainably. He did it for decades, and when that became untenable, he responsibly searched for a way to minimize the waste and harm caused by him exiting the business.
I especially love that he treats his machines almost as people, people intrinsically valuable to him. Whereas here, we often treat our people as machines, machines that are eternally disposable.
Not awkward, the sentence you call out. Beautiful, rather, and whether it is an artifact of translation or not, no matter. You didn't mean awkward in a pejorative sense; this is just an affirmation.
Of course! What makes this letter effective and relatable are all those little things that wouldn't have passed the ordinary editorial, legal, or PR filters, if it were written by a typical corporate CEO. If I was teaching at business school, I'd have my students read this as a model of effective stakeholder communications. I think Mr. Watanabe is a shokunin (you know, in the Jiro Ono sense) of the chalk business.
This whole saga pretty much has to inspire someone to build and reverse engineer the machine/recipe. The overlap of people who like to tinker with this stuff and people who love the chalk seems big enough.
It's also interesting that they seem to be somewhat oblivious of the US demand. At least it seemed like that. My guess is that they could have sold one of the machines to a US based entrepreneur. I can pretty much envision somone making that chalk in a garage and selling it to universities/individuals.
I also think that it's somewhat short sighted to assume procurement by the employer is needed. Especially in "brainy" jobs it's pretty common for people to be willing to spend their own money for tools they use on the job. If my school only provides chalk X I'm pretty much willing to spend some of my own money for the better chalk if I can't change their mind.
Maybe they were just "too big" and targeting a commodity market instead of going for the smaller premium market.
> It's also interesting that they seem to be somewhat oblivious of the US demand.
I have no idea why, but with Japanese companies it's a common theme. Most don't even care about overseas expansion, and if they do, it's poorly executed (say, Daihatsu, who dicked around on the European market for decades without ever listening to even trivial customer wishes, and then wrote the whole business off because it "obviously can't work" – well, duh).
There is a cultural element -- the Japanese perceive the cultural contrast between their world and "ours" more acutely than we do, in both directions (i.e. their positions go from "the West is much better than us" to "the West is so much worse than us" very quickly, it's hard to find level-headed assessments of both positions). Most of the "obviously it can't work" sentiment actually comes from there, in many cases.
And then there is an economic issue: their currency has been so strong for so long, it simply wasn't worth for most medium-to-small companies to invest in tricky oversea expansion for a very long time. Things have changed a bit there, but the cultural perception has not shifted much.
There is also the obvious difficulty of limited chances for local expansion: the country closest to them in cultural terms are Korea, which they historically see as inferior and poorer, and China, which they know they simply cannot match on equal terms.
And then, of course, there is the recent history of train-crash expansion in the '80s. That didn't end well, and some of the lessons they learnt was not to try too hard to expand abroad.
It's common amoung US companies as well. How many tech companies aren't available in !USA? How much "streaming TV shows" aren't available in !USA?
> I have no idea why, but with Japanese companies it's a common theme. Most don't even care about overseas expansion, and if they do, it's poorly executed (say, Daihatsu, who dicked around on the European market for decades without ever listening to even trivial customer wishes, and then wrote the whole business off because it "obviously can't work" – well, duh).
The Japanese domestic consumer market is so enormous that many Japanese companies are simply not interested in selling their goods internationally, because they don't need to. They can make plenty of money without dealing with the complications of selling their products in other countries. Many are small businesses and are content with making enough money to cover payroll.
That's very true. Fuji is notorious for this - they build fantastic cameras/lenses but until recently there was little advertising and they were difficult to source outside Japan. They're also very bad at keeping US customers in the loop about their supply issues.
Japan has a huge economy and market, much like the US, which also exhibits similar insularity.
I really enjoyed the bit in the crash bandicoot blog that was posted recently where the author mentioned how the Japenese execs from Sony were completely against bringing crash to Japan. They tweaked the looks of the character slightly and the execs bought in right away.
US demand and overseas markets can't cancel out Supply and Demand and market forces.
- Chalk is on it's way out. It's a rapidly shrinking market. Each year there will be less customers and less profit world wide.
- He could have sold the machine to another entreprenuer? Their company makes 45 MILLION sticks of chalk. They're getting their materials at a high bulk discount. Another company can never match the price point. They'll end up selling the same chalk at double the price.
- And expansion into the USA is laughable. Try expanding into an existing market with well established players (crayola) that is shrinking and on its way out.
- And this is the USA we're talking about, we prefer cheap products to quality ones. The only time it seems we invest in premium products is when they are an American brand, made in America.
> Chalk is on it's way out. It's a rapidly shrinking market.
I am a math professor. Most of us prefer chalk, and have no desire to go to whiteboards, smart boards, Powerpoints, what have you. I think that there is a fairly durable market for chalk.
Moreover, over the last five years I think that awareness of Hagoromo (and more generally, of high-end chalk) has been growing. You see it for the first time when visiting some other university and think "Wow, what is this? I must have some!" This led me to buy several boxes of it at $35 a pop. My out-of-town guests, who give lectures in the research seminar I help to run, get treated to the good stuff.
You're treating it like a commodity product focused on economies of scale (comparison to Crayola). As an outsider reading about it the last couple of weeks they did have good quantities but it feels like a repositioning as a quality leader makes sense.
So switch the focus from cost leadership to differentiation (quality) in Porter terms.
I'm pretty sure the customers mentioned qualify as typical customers that are willing to pay a hefty premium for a product they love. tl;dr: scale down, focus on quality, charge more > shutdown
Oh yeah? try drawing 3D painting on the street with marker.
pretty much has to inspire someone to build and reverse engineer the machine/recipe.
A recent example: Nitram fine art charcoal.
Grandson of founder sells business, gear, and secret recipe to enthusiastic customer, who relaunches a beloved product line.
http://www.nitramcharcoal.com/blog/the-history-of-nitram-cha...
Obsolete technologies become forms of art. Vinyl records, polaroid pictures, book making, knitting, etc.
Film, also.
The Impossible Project is truly impressive. Polaroid film is a mindblowingly complex product to develop, since it's basically a photo lab sandwiched into a thin sheet. Even if their results aren't perfect, it's amazing they're making it work at all.
There's also a small group of people who are rebooting the Ferriana film line.
It seems the preference is shifting towards dry-erase boards.
It depends on who you talk to, I've seen renovated university study spaces with fresh chalkboards. When I asked the staff why they chose chalkboards instead of whiteboards, they said that it's cheaper in the long run because cleaning and replacing whiteboards is awful and expensive. Chalkboards are significantly more durable.
Which themselves are being, albeit slowly, replaced by mobile technology, surface-type screens, computers attached to projectors, etc. I imagine the market for chalk are all die-hards, like say, vinyl record enthusiasts today. If you were to use internet outrage as your own metric you'd think it was a huge market. Its not.
Chalk is two generations behind at this point. Its probably not too great to be breathing in all day either, at least for some of the population:
The study, published in the journal Indoor and Built Environment, ruefully concludes: "Though real-time airborne chalk dust generation was found to be low in this study … and did not contain toxic materials, chalk dust could be harmful to allergic persons and may cause lacrimation and breathing troubles in the long run and certainly is a constant nuisance in classrooms as it may soil clothes, body parts, audiovisual aids and study materials."
http://www.theguardian.com/education/2011/nov/28/chalk-dust-...
> they could have sold one of the machines to a 'XXXX' based entrepreneur.
I hope this entrepreneur have a handy geiger counter next him/her when buying those machines. Just in case... better safe than sorry
The main reason, apparently: "These days, local governments focus on bid prices rather than quality."
High quality commodities are considered nowadays luxury and not bare minimum. Quite sad, really.
I think the statement following this is much more important and interesting to HN:
> The tendency has become more and more prevalent under electronic auction systems.
While incidents like this are often used as examples of the failures of technocracy, I think the problem is elsewhere. A decision process has been out-sourced to a machine that is not smart enough yet to make a good decision. The decision might be good in a very localized and easy to measure sense (cheap), but lacks an understanding of other economical signals.
It's more than that. Right above the line you quote
Earlier, companies based in a city, ward or town were given a priority at auctions held by their governments.
Local companies were given priority not because they were providing higher quality product but simply because they were from the area.
that didn't appear to be the main reason, his volume dropped in half since its peak because technology is moving beyond chalk and blackboards.
besides, it is common for many businesses to fall back on the excuse that their quality justifies their price without proving that their competitors are not delivering what is requested.
if you are over delivering and doing well that is fine, but if you are over delivering and losing money your not doing it right and the market will correct you one way or another
just the milkman the chalkboard has been obsoleted.
I think it's neither sad nor happy, it just is. People make the tradeoff between quality and cost, and it's simply down to their tastes. There's no metric to use to say what the right tradeoff is.
About 20 years ago they should have created a grading standard for chalk so they could have avoided their commoditization, or at least only compete with others at similar quality (and presumably margins). Similar to organic standards.
Yes, this is what I wanted to say. Quantify what makes them great. After reading the article and the comments, I still have no understanding of why or what makes them so great.
OPEN SOURCE THE MAGIC CHALK RECIPE AND MACHINE PLANS
I don't think there is any concise secret formula that one could just copy to paper and readapt.
The article gives the impression there was a specific highly custom production system where the materials were selected for the machines and the machines were fit for the materials. And the machines were apparently jury rigged adaptations which probably lack detailed blueprints. Sounds a bit hard to formalize, after the fact, without quite a laborious effort.
But the Hagoromo brand's followers / value / awareness can't be open sourced it got to be earned.
Two passages stood out.
At first, we considered selling the whole company, enabling the Hagoromo brand to survive and helping overall chalk sales. But we could not find the right deal for the company.
I'm sad that I have been forced to close down my company. But I am pleased I have been able to contribute to education by providing high-quality chalk over the last 50 years.
Commendable passion to a bigger cause, but sometimes that isn't enough. Very touching note.
> Commendable passion to a bigger cause, but sometimes that isn't enough.
How is it "not enough"? He ran a successful business that brought joy and utility to millions for 50 years. Sure, it ends on a sad note - but such is life. That is success if I ever saw it.
Chalk makes me feel weird when I use it. Tactically it just rubs me the wrong way and gives me the same chills I get from fingernails on a chalkboard. Just thinking about it bothers me :\
However, it is nice to read about people who have a passion for what they do, and this man seems to have passion in spades.
This chalk actually has a special coating that prevents that from happening.
This post from a while ago explains why "Mathematicians Are Hoarding a Type of Japanese Chalk"
This man expresses such a passion for chalk...chalk of all things, and it's inspiring. I could see someone reading this and becoming an artisan chalk maker as a result(I kid, but its probably true). Even I kind of want to run a chalk business after reading it.
From the article it looks like the buyer in South Korea will learn how to continue on with the chalk. I suspect we will see it on the market again.
It's amazing that they had just one set of machines to make all their chalk. I hope the South Korean version would be successful.
reading that made me think of the Byrd's song
To every thing there is a season, and a time to every purpose under the heaven
Ecclesiastes 3 King James Version (KJV)
3 To every thing there is a season, and a time to every purpose under the heaven:
2 A time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted;
3 A time to kill, and a time to heal; a time to break down, and a time to build up;
4 A time to weep, and a time to laugh; a time to mourn, and a time to dance;
5 A time to cast away stones, and a time to gather stones together; a time to embrace, and a time to refrain from embracing;
6 A time to get, and a time to lose; a time to keep, and a time to cast away;
7 A time to rend, and a time to sew; a time to keep silence, and a time to speak;
8 A time to love, and a time to hate; a time of war, and a time of peace.
Love the quotation, and also didn't realize it came from a Bible verse originally.
That's not the original source though, FYI.
I'm sorry for this man having so many health problems. But I can understand otherwise how to make chalk in the pacific japanese coast burning tons and tons of japanese oyster shells could be less profitable and much more dangerous since 2011. I wish him well.
I hope he shares his recipe.
When he said that people sent a flood of faxes, it made me totally cool with no more chalk.
When your customers are still sending faxes, that pretty much sums up your dire situation.
It's Japan though. Faxes in Japan aren't antiquated like in the USA.
And some people just don't have appreciation for business which value quality, culture, ethics and respect for employees. They are busy with their own arrogance.
You should perhaps learn something about cultures other than your own...
https://www.google.com/search?q=japanese+fax+machine+culture
tl;dr: Fax machines are still fundamental to Japanese business communications.