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You know Apple's origin story but do you know Samsung's? It's almost too bonkers to believe
Samsung's official history begins in 1969, just two years before Steve Jobs and Steve Wozniak first met, and seven years before the pair went on to start Apple Computer Company in Jobs' parents' home on Crist Drive in Los Altos, California.
But Samsung's official history isn't Samsung's actual history. Samsung began as a business a full three decades before the giant multinational manufacturing conglomerate admits in its official history.
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Today, Samsung is best known to most people as a maker of smartphones and digital electronics, but the company has huge businesses in shipbuilding, construction, and insurance -- it even owns a theme park.
Lee Byung-chul
But back in 1938, Samsung was a shop in Daegu, a small city in South Korea.
In 1938, Lee Byung-chul (better known at Samsung as B.C. Lee) was 28 years old and had three kids. He was relatively well educated, having studied economics for a few years in Tokyo at Waseda University. Back then, Japan essentially occupied Korea.
According to Samsung Rising, an exceptionally researched book on the company by Geoffrey Cain, Koreans like Lee were forced to worship at Japanese shrines and speak Japanese.
Before I continue with our story, I want to stop for a minute to discuss Geoffrey Cain's book. Most of the more visceral details of Samsung's original founding described in this article are sourced from this book.
Cain interviewed more than 400 people, including employees, executives, politicians, business people, board members, journalists, activists, and analysts, as well as a member of Samsung's founding Lee family. He traveled to Korea and conducted interviews in English, Japanese, and Korean. Any fact I cite here that is not explicitly sourced came from this book.
And with that, let's start our story with vegetables and dried fish.
Samsung in the 1930s
After leaving university due to illness, Lee returned to Korea. He tried trading rice, but that failed. Despite having a family, Lee spent two years traveling in China and Korea. Somewhere along the way, he noticed that fresh produce wasn't making its way to consumers.
That's when he decided to start Samsung. To sell vegetables. The company was originally named Samsung Sanghoe, which means "three stars shop." Samsung means three stars, so there you go.
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In Samsung's original little shop of hobak, the seed was planted for B.C. Lee's entrepreneurial drive to take Samsung from supplying a key ingredient in hobakjuk (a very nice Korean pumpkin porridge) all the way to supplying smartphones and key ingredients in many of the consumer electronic devices produced by its competitors.
Oddly enough, the Wikipedia entry for Lee Byung-chul says he started a trucking company in 1938. That assertion incorrectly cites a 2011 article in the Wall Street Journal, which was written about a hologram display honoring the founding of the CJ Group. Before it was known as CJ Group, that company was known as Cheil Sugar, a sugar refining company also started by B.C. Lee.
We'll get to that in a bit. First, we need to talk about beer, World War II, and the end of the Japanese occupation.
It's not clear exactly when it happened, but both Cain's book and an article in Korea JoongAng Daily say that Lee either started or acquired Chosun, an alcoholic beverage producer, shortly after opening the Samsung veggie shop.
So now Samsung's roots include actual roots (sold in Samsung Sanghoe), dried fish, and beer.
Samsung in the 1940s
And with that, we leave the 1930s and transition into the tumultuous 1940s. After the bombing of Hiroshima and Nagasaki, Japan surrendered. This not only marked the end of Japan's involvement in World War II but also the end of its occupation of Korea. Plus, it inspired the blockbuster movie Oppenheimer and helped introduce us to the meme known as Barbenheimer.
And if you don't think I can source a connection between Barbenheimer and Samsung, you'd be mistaken. Samsung and Warner Bros. (producers of the Barbie movie) announced a deal in July where the two companies would collaborate to promote a pop-culture mashup to be known as BARBIE SmartThings DreamHouse.
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So now we have vegetables, dried fish, beer, and in 2023, Barbie. But we're getting ahead of ourselves. Let's go back to Samsung's roots (see what I did there?) in the 1940s. Early on, B.C. Lee moved his company to Seoul.
From Korea JoongAng Daily's reporting, it appears that B.C. Lee came from a wealthy family. The newspaper describes Lee's grandfather as "very financially savvy and able to profit off his business endeavors." The newspaper also states that B.C. Lee's father "Lee Chan-woo, would eventually finance the independence movement during the Japanese colonial period, and during his teenage years, he also became friends with Korea's first president, Syngman Rhee."
Cain says that, shortly after American occupation troops arrived in Korea in 1945, Lee used his "father's inheritance" and the money he was making from the store and the brewery to buy a local newspaper and university.
So, now Samsung includes a veggie/fish shop, a brewery, a university, and a newspaper.
And then, it all came crashing down.
Samsung in the 1950s
Cain writes a visceral story about the North Korean communist invasion of the South. The North Koreans invaded Seoul and started to gather up wealthy southerners. As Cain tells it, capitalists like Lee were considered American/Japanese collaborators and many were executed in public squares. Soldiers looted Samsung of all its inventory.
After UN forces recaptured Seoul in September 1950, Lee sold off whatever Samsung assets remained and bought five trucks. Cain reports that Lee filled the trucks with company employees and their families, and drove them to Daegu.
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Three years later, once the war was over, it was time to rebuild. South Korea's new president was an old family friend, which made it easier for Lee to get some critical government licenses to trade internationally.
The postwar era was a boom time for those in South Korea able to negotiate all the relationships and complexities of the new order. This was where Lee excelled, and he profited mightily.
In 1953, he opened a sugar refinery in Su-dong. This would become the Cheil Sugar Manufacturing Company. Next was a wool-spinning plant in 1954. Profits from those endeavors funded the acquisition of a bank in 1957, an insurance company, a department store, and a university.
With the high demand for construction services in the aftermath of the Korean War, he also started a heavy construction business.
Samsung in the 1960s
Samsung in the 1960s was part soap opera, part political thriller. In 1961, a political coup put General Park Chung Hee in power as president of South Korea. Unlike the previous regime, which had family connections to B.C. Lee's family, the new President Park was not a fan of Samsung and all the wheeling and dealing the company practiced.
As Cain tells it, B.C. Lee was responsible for more than $4 million (as calculated in US dollars) in unpaid taxes. In a bid to keep out of jail, B.C. Lee transferred majority ownership of three banks to the state. By this time, B.C. Lee was hugely influential and wealthy, and Park demanded that most of that wealth and power be put to use in service of growing South Korea's economy.
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One such area of service (plot device for the ongoing soap opera) was the giant urea fertilizer plant Park wanted Samsung to build in Ulsan. And yes, urea is the primary nitrogen-containing substance in the urine of mammals. Urea is produced in the liver and is a metabolic byproduct of protein breakdown. The liver breaks down amino acids and ammonia, converting the excess nitrogen into urea. The kidneys then filter the urea from the blood and excrete it in urine. Urea is also an excellent source of nitrogen for plants, which explains its role in fertilizer.
But wait. There's more. In 1966, Lee Chang-hee -- B.C. Lee's second son and a manager at Samsung -- diverted chemicals purchased for the fertilizer plant to a saccharin processing plant, tucking away $40,000 as a result of his dealings. He was caught. As part of a bid for leniency for Chang-hee, B.C. Lee turned over majority ownership of the fertilizer plant to the government.
When Chang-hee got out of jail, he expected to take over Samsung. B.C. Lee wasn't having any of it and refused to give up the company's reins. So Chang-hee reached out to President Park with additional details of his father's holdings, including real estate and other assets. As Cain tells it, the relationship between Chang-hee and his father never recovered, and the incident caused B.C. Lee to become even more determined to hang onto the reins of the company.
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Remember Korea JoongAng Daily, the newspaper I quoted earlier in this article? That's the English-language edition of JoongAng Ilbo, a newspaper described by Cain as "Samsung's newspaper." It became one of South Korea's three major news organizations.
By 1968, Samsung had counted among its businesses newspapers, fertilizer, textiles, heavy construction, dried fish and vegetable trading, banking, sugar manufacturing, insurance, and more.
With the loss of its fertilizer holdings, Samsung decided to branch out in a new direction: electronics.
The rest of the story
This is where the modern Samsung story begins. You can get a view of it on Samsung's heritage page. The company started with black and white TVs and then moved on to other consumer electronics and appliances.
According to Statista, Samsung now has over a quarter of a million employees in 74 countries, and last year generated $234 billion in sales. The company describes itself as being in all of the following businesses: electronics, glass, heavy industries, engineering and construction, life insurance, securities, fire and marine insurance, asset management, hotels and resorts, advertising, security, hospitals, biopharmaceuticals, food service, and fashion.
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B.C. Lee died on November 19, 1987. He survived military coups, threats of jail, and exile. He reinvented and grew Samsung into an economic powerhouse not once, not twice, but three times.
Here in the US, we know the original stories of Apple and Microsoft, and have gotten to know all the legends about Steve Jobs and Bill Gates. But 35 years before those two tech giants were started, Lee Byung-chul was opening his vegetable market in Daegu, which started the ball rolling on the enterprise we'd come to know as the Samsung of today.
Lee Byung-chul was a badass. His story is incredible. When I set out to write the pre-history of Samsung, I had no idea I'd get to meet a guy as unsinkable as this.
Do you use Samsung products? Let us know your favorites in the comments below.
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