Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
'Want to succeed in business? Stake your life on it'
Balmuda founder and CEO Gen Terao / Courtesy of Balmuda Korea
By Baek Byung-yeul
Balmuda CEO shares success story and advice on future entrepreneurs
By Baek Byung-yeul
Gen Terao, a high school dropout-turned-businessman who established Balmuda in 2003 and turned it into a global home appliance maker, is considered a role model for many seeking to start a business.
The Japanese entrepreneur once dreamed of becoming a rock musician, but changed his career path to produce appliances that can enhance consumers' daily lives after experiencing failure in pursuing a music career.
Balmuda also has high brand awareness with Korean consumers for its striking product design and distinguished features as seen in its steam oven toaster. Giving advice on how to build own business from the ground up, Terao offered cliche-but-true opinions calling future startup founders to stake their lives on their business items and not fear failure.
“You need to carve your own path in life. Everyone has their possibilities and it is wrong to think that I cannot change anything because my ability is not up to par,” Terao said in a written interview with The Korea Times.
His success story could be regarded as just another example of a typical rags-to-riches story, but Terao said he could accomplish all these things because he literally bet his life on it.
“I believe there is always a chance to turn the game late on even though you are under great disadvantages. For me, I could turn the game after spending my whole life on it,” he said.
Terao dropped out of high school at 17 and travelled around Mediterranean countries such as Spain, Italy and Morocco for a year. Upon returning home, he pursued a career as a rock musician for the next decade but things didn't go well. After his band was disbanded in 2001, he abruptly changed his career path to home appliance manufacturing and established Balmuda in 2003 after studying on his own to prepare for the business.
“Even I am wondering why I started this business but I think I am greatly influenced by a magazine my wife had. I turned over the page of the magazine and got fascinated with appliances that are beautifully harmonized with the interior design. I could feel sort of energy from the appliances and decided to challenge it,” he explained how he started his business.
Though what he has done before was in no way related to the home appliance business, Terao said he could learn a lot from those experiences as people can learn anything from anyone. He also emphasized the importance of experiencing failure in life because failure helps us grow.
“While I was pursuing my music career, I could learn the pleasure of giving my best effort. I also humbly accepted that dreams don't always come true. However, it is true that both success and failure help us grow and especially failure makes people live stronger,” he said.
Balmuda's headquarter office in Tokyo / Courtesy of Balmuda Korea
The CEO shared how he escaped bankruptcy though Balmuda faced the threat of going bust during the 2008 financial crisis.
“When the world's economy was in crisis, Balmuda also suffered hardships. Our products were shunned by consumers who want to buy products with more affordable prices. My firm also went almost bankrupt. When the firm was also on the verge of bankruptcy, I could see crowds packed a restaurant while I was walking down the street. It was a big wake-up call for me because I could learn people don't stop consuming something to manage their living even though they are in bad economic times,” he said.
“I realized the reason why we were neglected by consumers was because they didn't need our products. To make a breakthrough, I decided to produce something that can really benefit people and could come up with a fan called GreenFan. With its feature that provides natural breeze-like airflow, the GreenFan hit the jackpot.”
After turning the crisis into an opportunity to grow the business, Terao was able to lead the business to a point where it is sustainable and Balmuda logged 10 billion yen ($90 million) in revenue in 2018. Now the company has about 100 employees in product planning and designing and management in its headquarters in Tokyo. It has been outsourcing manufacturing to China.
Providing more advice on people who are preparing for their own business, Terao recommended them to work at an organization in the same line of business during their pre-entrepreneur days.
“Since I didn't know anything about manufacturing something, I started to contact workshops to learn skills. I was rejected from several factories because they thought I am an undisciplined man with yellow dyed hair. But finally I was allowed to work at a workshop and could learn skills needed for manufacturing,” he said.
Balmuda began selling its products here starting in 2012. In the early stage of doing business here, the firm had struggled but the Korean market has grown to one of the company's most important markets, accounting for some 30 percent of the firm's entire revenue.
Terao's company started to gain consumer attention here with its signature toaster oven, which won the 2015 Good Design Gold Award given by the Japan Institute of Design Promotion. The toasters that generate steam to achieve better flavor and texture went viral and helped spark Korean consumers' interest in Balmuda's air purifiers as well.
Balmuda especially has seen the explosive popularity of its air purifiers here. Even though they are costly compared to competitors' products, Terao said Korea has a 10 times bigger air purifier market than Japan.
He said the firm's creative design capability and distinguished technology can be largely attributed to the success of its air purifiers.
Even though its Chinese competitors have launched their air purifiers that look quite like that of Balmuda, Terao confidently said he feels no threat from the Chinese products as they don't have their own
“I am not considering any type of lawsuits against them. People didn't wear garments at first. But after watching someone wearing animal skins to protect themselves from cold winds and others started to imitate them. I guess this is how the history of garments has evolved over time. Considering this, I believe imitation is an essential process to get evolved.
However, those products don't pose a threat to us. They have been just trying to imitate our products because they don't have innovative technology,” Terao said.