What You See Is What You Get: My Autobiography (29 page)

And then came a glimmer of light, a clue as to what rang this guy's bells. As all manufacturers will understand, he liked continuity of supply. The comfort of having orders not just for one month, but for
six
was manna from heaven for him.

I explained that the current product was selling well and had found its niche in the market. I told him I'd be prepared to place an order for 10,000 units at the rate of 2,000 pieces per month. He raised his eyebrows and I could see his interest had been sparked.

He said, 'What price you need now because of Japanese yen crisis?'

Yonezawa handed me his calculator. I made some quick calculations and gave my reply.

Otake exclaimed, 'Impossible! Not possible. Stupid request.'

I shrugged my shoulders and told him, 'I may not know a lot about business, but one thing I
have
learned is there's no point buying stuff just for the sake of turnover. If you cannot meet my price, then regretfully it will mean that I have to give up buying this model.' Otake was not going to be seen to compromise in front of a member of his staff. He ended the meeting abruptly, with a quick goodbye, and I left him thinking we were not going to buy any more of his product.

Two days later, I received a telex from Ronnie Colson saying he'd heard I was ready to order 10,000 units. He gave me some bullshit that the component supply chain was tight and if I wanted 10,000, I'd need to book them now. When he phoned me to discuss things further, I took the same position I'd taken with Otake, that I was losing too much margin at the current price to continue with the product.

'What price do you want then, Alan?' he asked.

I told him that I wasn't going to place an order for 10,000 unless he met a certain price, but that I might increase the order to 15,000 and take them at the rate of 3,000 a month.

After a bit of argy-bargy over the next day or so, he accepted my price. The quantity and comfort of five months' worth of orders had rung Otake's bells. I would use this technique for many years to come.

Very often people would promise the same thing to me in order to get lower prices, then come up with some rubbish about why they couldn't take the second or third month's orders. Retailers, for example - I soon learned that their forecasts were not worth the paper they were printed on. I found that the way to impress my suppliers was to lay down long orders and, more importantly,
take the stuff.
This built a bond of trust between us.

I also learned from this episode that Otake was one big bluff. As the
Japanese say, he didn't want to lose face, he didn't want to be seen to capitulate. What's more, he didn't want to let on that he wasn't acquainted with the details of the costing.

To finesse this bluff, a day later, Ronnie called me again. He said Otake would prefer me to take the new model instead of the old one. This came as a surprise to me, as I'd seen the new model as some dream that might take shape in the future, with maybe the two models running side by side, the Dolby version being at a price premium.

I told him this was out of the question, expecting to hear that he only wanted me to buy the higher-priced item. For some mad reason, I tried it on and told him I wasn't going to pay one yen more and that in the long term, the addition of Dolby was a
must.
Ronnie argued his corner for about twenty minutes, but I rejected his bullshit.

I had them on the hook and, remarkably, I ended up with the
new
model at
my
price! And at that price there was no point running the two models. This turned out to be a good lesson for me. I would discover that in the ever-advancing electronics industry, the newer models might have more bells and whistles, but they are cheaper to produce. Orion had engineered the cassette deck down to cost less, yet at the same time had made it look great. We helped Orion get a Dolby licence and the machine was a great success when it hit the market.

That wasn't my only encounter with the Emperor. The second time I met him - in Japan - was even more painful. By now, I had taken on a designer by the name of John LeCount - his name alone will give you an idea of this artistic genius. Smartly dressed, long hair, posh accent, you get the drift. He redesigned the 8000 amplifier while Bob Watkins and Mike Forsey engineered it into production. I called it the 8000 mark 3 and it really looked great. From a design point of view, it was in keeping with the new Orion cassette deck.

I commissioned Bob Watkins to draw up a big brother to this model and together we designed the IC2000 mark 3, based on LeCount's first drawings. It was quite simple to follow the design once LeCount had put a stake in the ground.

At the time, Goodmans, a Southampton-based company, were having great success with their tuner-amplifier. We produced the Amstrad 5050, a brilliant competitor to it which cost about half the price and became a very big hit.

These products all looked great, but the market was moving on again. Companies such as Pioneer, Trio and JVC were gaining momentum with a new style of equipment. Their amplifiers, tuners and cassette decks had shiny,
brushed-aluminium fronts and recessed black metal cases. They were wonderful pieces of engineering with smooth-action knobs, coloured flashing lights and front panel meters. The products looked like they were straight out of a laboratory rack and commanded high prices. Alarm bells were ringing for me and I knew we needed to get into this business. It would take us into a whole different world of engineering.

I decided it was time for a second trip to Japan to research the latest trends. Once again, I met Harry, who was still supplying us with lots of stuff. He'd heard we were buying cassette decks through Waco Trading and asked why I wasn't putting the business his way. He suggested he could find me other manufacturers.

The fact of the matter was that I had a better payment arrangement with Waco. It's important to understand the concept of a letter of credit (LC), effectively a bond issued by a bank that guarantees payment to a supplier. In banking terms, it's treated as part of your banking facilities. As far as the bank is concerned, the minute you open an LC, for whatever value, they consider that they've lent you the money, even though the goods haven't been shipped. The last thing the bank wants is to be lumbered with a load of electrical goods or components, so it puts a limit on the LC facility they will give at any one time.

While my business was doing well, the bank was relatively supportive, but my LC facility was always peaking out and holding me back from doing bigger business. Waco knew this and agreed to ship me goods on 'open account', which means you sign a draft, effectively a post-dated cheque without any obligation on the part of the bank. Waco was extending me credit, but Harry was a small-time operator and could not finance a large volume of business.

Due to this open account financing, I needed to deal through Waco to buy goods from Orion. Ronnie Colson advised me that once again it was time to pay the Emperor his dues. He and I would have to get a train to Fukuoka, out in the Japanese countryside, to meet Mr Otake. I asked why, but on reflection it was a stupid question - I should have known the Emperor would never come to see me.

We were to meet at a spa resort where the speciality was the hot springs bath. My Western clothes were whisked away by the staff and I was issued with a kimono. Meanwhile, Otake waddled around, dishing out instructions on the day's agenda. At one point, we had to strip off and jump into a giant, boiling spa.

This crazy culture was getting on my nerves. I would have been quite
happy sitting in the coffee shop at the Okura Hotel discussing business over a hamburger. Instead, here I was in a hot tub with this little chubby chap and Ronnie. We weren't allowed to discuss business in the hot tub - Otake's rule.

I now know what a lobster must feel like - the water was red-hot. The next torture was to go into a freezing-cold shower, then a couple of sumo-type wrestlers started whacking me with a loofah-type implement. I looked at Ronnie who was trying to get into the spirit of things, but clearly didn't want to be doing this either. He was under Otake's spell - he knew that to do business with this nutter, you had to go along with his mad ways.

Finally, we ended up in a dining room. The table was laid out with all this Japanese tutt. Otake looked at me. 'What is wrong? Food no good? This is best Japanese food.' I told him that I was allergic to shellfish.

He rattled away in Japanese. Ronnie turned to me. 'Would you like a sandwich or something like that?'

'Absolutely,' I replied. And then, speaking very quickly so Otake couldn't understand what I was saying, added, As long as this nutcase here doesn't get the hump.'

After dinner, Otake showed me a range of car radio-cassettes, an area I wasn't active in but which was an up-and-coming market. Cars in those days were not fitted with radios as standard and certainly not with radio-cassettes. Otake told me he'd opened a factory in Korea and it was possible for car radio-cassettes to be imported into Europe duty-free because of some special arrangement between European governments and Korea, which was considered to be a developing nation. That's a joke in itself - little did we all know back then that they would become giants in all industries.

Normally we paid 14 per cent duty on imports, but there was a window of opportunity in the early part of the year, during which this duty-free quota was taken up quickly. The art was to import the products to arrive in January, within the quota period.

I ordered 10,000 of these car radio-cassettes. I don't know what possessed me - it was just a gut feeling. I also placed another 15,000 order for cassette decks. Otake was quite intimidating and in a way I was trying to impress him with these large orders.

To round the whole episode off, my bedroom had no bed and I had to sleep on a bloody mat on the floor. If anything, I needed another hot tub experience the next day, as it was the worst night's sleep you could possibly imagine. I was full of aches and pains.

Back in Tokyo, I asked Harry to host me around Akihabara. We spent the
whole day there and I examined every single product on display, taking as many brochures as I could, as well as photographs. The shopkeepers must have thought I was nuts, taking close-ups of knobs and switches.

I was due to fly home on the Saturday. The British Airways 747 flight to London always left at ten o'clock at night, to arrive at a sensible hour. Before that, Ronnie Colson invited me for lunch to tidy up some of the business we'd done that week. I knew Ronnie felt I was a business commitment he was obliged to see - he was always saying he had better places to be and more interesting things to do. Throughout lunch, he was name-dropping. 'Then so and so said this and that to me when I was in blah, blah, blah . . .' It was really getting on my wick. He'd done this to me before, boasting, for instance, that at the opening ceremony of the Tokyo Olympics, he had the honour of riding with the Emperor's son, with whom he was educated. On that occasion, it got to the stage where I was starting to take the piss out of him, asking him whether he'd met the Queen of England and things like that.

After lunch, we met a friend of his at the Hilton Hotel, an American fellow who was trying to sell a new type of Instamatic camera. Kodak had just brought out their rather novel Flip Flash camera, where you popped a small film cartridge into the back. The guy told me that Kodak was selling millions of them in America and that he had tooled up a replica. He asked if I wanted to sell them in Britain and gave me a sample to keep.

There are times in life when you should keep your nose out of things you don't understand, and this was one of them. I wasn't interested. This was not my business - I had no contacts in the photographic industry and it was a low-priced item which meant low margins. Why would anyone buy an Amstrad replica when you could buy the Kodak for a couple of quid more? The Kodak business model was based upon selling a low-priced camera with a view to making the
real
money on the film and processing - it was the classic Gillette blade syndrome.

After the meeting, Ronnie couldn't get rid of me quick enough. He obviously had better places to be, probably meeting up with his beautiful Argentinian girlfriend. He got me a taxi to take me to the hotel - that was it, goodbye.

I had a few hours to kill and sat in the lobby of the hotel, worrying that perhaps I'd bitten off more than I could chew with the big order I'd placed. I did some long-hand calculations on cash flow and realised I'd created a bit of a problem for myself. I wondered how I was going to finance this stuff, in particular the car radio-cassettes.

Then I went to the hotel's shopping arcade and bought Ann a row of
pearls. The Japanese are known for the best pearls in the world. I also popped into the photographic shop to see if I could buy a film for the little camera I'd received as a gift. Outside the shop was a big, black minder-type guy, quite a strange sight in Japan, and three Japanese security men. I couldn't understand why until I went inside and there, standing at the counter talking to the salesman, was Sammy Davis Junior. I couldn't believe my eyes. He looked at me and said, 'Hello.' I froze, and then returned his hello.

He was discussing a high-tech Nikon camera with the shop staff and very politely told me, 'You go ahead. I'm going to be a while here, so just ask the man for what you want.' Then he noticed my little camera. 'What have you got there?' he asked.

I said this was a newfangled gadget which took a special film, and we engaged in conversation. He was very interested in the camera. The photographic shop sold me one of the cartridges and I popped it in. I couldn't resist asking Sammy if he'd mind having a picture taken with me. Otherwise, who'd have believed that I'd bumped into Sammy Davis Junior? He was really polite. He stuck his arm round my shoulder and the guy behind the counter took the picture. As I always kept my passport with me (after the last experience), I whipped it out and asked Sammy to sign his name in it.