Samsung Rising’s Geoffrey Cain: Samsung has a militaristic culture [Part 2]

The book is a penetrating look behind the scenes for one of the largest companies nobody knows

You can read the Part 1 of the interview here

We don’t know the story behind the name for “Galaxy” for Samsung smartphones. In the book you are writing the story of how Samsung chose the name “Galaxy” for their smartphones. Can you explain the specifics of  the story?

The story was told to me by a dozen former Samsung vice presidents who witnessed it or are familiar with it. A group of Samsung executives enjoyed a $100 California red wine bottle called the Galaxy red blend, by a family called Terlato. They admired the name. Galaxy mixes well with Samsung which means three stars. And so they chose Galaxy.

In 2016 , Samsung Galaxy Note 7 exploded due to a battery failure. In your words, “…It was a problem that began with the corporate culture, which the company had long been trying to reform.” Can you elaborate?

Samsung blamed the battery explosions on the batteries. The company argued that the positive and negative cathodes and caused the battery to ignite. They were correct about the engineering problem. But the deeper problem was with the corporate culture. Samsung recalled the first set of phones with one company’s battery, then issued a new set of phones with another company’s battery, and then recalled the second set of phones with those batteries too. Samsung executives told me the problem was that they were under unusually intense pressure to put out the latest product. And then the phones ignited. No one could question or point out the problems with the batteries.

Ted Shin, a former designer at Samsung, had an interesting story, focusing on futuristic products. In the late 1990s, he realized mobile phones would be a hub of everything. What happened to him and what did he forecast?

He predicted that mobile phones would become little computers. Many talented designers, including Apple’s Jony Ive, foresaw this in the 1990s because of the rising importance of software and bigger displays. Ted Shin designed a prototype for the I-Phone, or Information Phone, and it was rejected by his Samsung bosses. He left the company and teaches design in Denver.

What is the importance of Todd Pendleton, Samsung Telecommunication’s CMO for 4 years, Samsung vs Apple wars?

Todd Pendleton was the seminal marketer who showed that Samsung could compete head to head with Apple. He thought of Samsung as Pepsi and Apple as Coke. He could attack Apple head on and turn Samsung into the challenger brand. He succeeded with a campaign called the Next Big Thing Is Here, in which Samsung phone users made fun of Apple users waiting in line for nine hours. The internal data showed that the campaign transformed Samsung into the only serious brand in competition with Apple.

In the book you are also telling the background of the famous selfie shot at the Oscars 2014 by Ellen DeGeneres. How did things go for this guerilla marketing event?

Things went incredible. The ellen degeneres selfie was the result of years of planning and hard work to make sure she had a Samsung phone in her hand the night of the Oscars. Ellen was an iPhone user. Samsung wanted to be sure she would use a Samsung because they sponsored the Oscars. Samsung sent a group of marketers to show her how to use a Galaxy. But they weren’t sure whether she would actually take the selfie with a Galaxy. But she did. So it was a mixture of luck and hard work.

Are you planning books also for other Korean companies, such as LG or Hyundai? 

I am not. I speak Chinese and my next book will be about Chinese technology, which is a major topic now, with the trade wars between the US and China.

What do you think about Huawei? The Q2 financial results show that Huawei surpassed Samsung in terms of smartphone sales. Do you think Samsung will be back or Huawei will keep the pace?

Huawei will keep the pace in smart phone because it competes on price around the world. Samsung is hit by the US-China trade sanctions and has to pick a side. They have calculated China is not the right side, for so many reasons I can get into, namely the theft of intellectual property and the threat of US sanctions if they supply chipsets to Huawei. Samsung is positioning itself as the major supplier of 5G and AI semiconductor technology to Western firms. That will be their savior and will keep them an industry leader, because they are so talented at chipsets and data networks.

After the finishing book, what did you think about Samsung?

I am in awe of Samsung because of how much it accomplished in such a short time. Two generations ago, Korea was poorer than Turkey, Sudan, Myanmar and the Philippines. Korea’s success truly is incredible. But I also see the dark side of what it takes to be successful in Korea — corruption, bribery, government collusion. Koreans are well informed of all this and have been fighting in the streets, in protests, to make sure it ends. I am faithful they will succeed.

Samsung Rising / The Inside Story of the South Korean Giant That Set Out to Beat Apple and Conquer Tech / Written by Geoffrey Cain. Published by: Penguin Random House

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