For many companies, having a flagship consumer product that caught fire and a vice-chairman in jail would sound a rather loud death knell.
Not so Samsung. The Korean electronics group topped its annus horribilis by overtaking Apple as the biggest profit generator in the second quarter of 2017. It was, as Geoffrey Cain writes in Samsung Rising, “part of the genius of Samsung’s business model”.
Over the decades, that genius has included cronyism, bribery, political favour and — in a subsequently pulled slideshow designed to head off activist investor Elliott Management — a dollop of anti-Semitism. Questionable as all that may be as a business model, it makes for a gripping read.
The story of Samsung, as befits a $275bn giant with sales approaching $200bn last year and 180,000 employees, is the story of South Korea. Like Sony, its Japanese rival, which came to symbolise that nation’s rise from the ashes of the war, Samsung grew from humble beginnings to become the blue-blooded employer of choice for graduates from the country’s elite universities. It extended its tentacles into a plethora of industries — from shops to cars — and gained global renown for its innovative gadgets.
Then came hubris, and scandal: exploding phones, bribes of millions of dollars and a racehorse gifted to the equestrian-minded daughter of South Korea’s very own Rasputin, the “mad monk” who inveigled his way into Russia’s imperial household.
Korea has a strong seam of anarchy running through it, and so it is with Samsung: here are tycoon felons, wiped hard drives, wiretapping and an errant son sequestered in a fishing village without so much as a bus fare in his pocket.
Geoffrey Cain, a journalist who has reported for The Economist and the Wall Street Journal, does his material proud. Unlike their Silicon Valley counterparts, Asia’s tech champions lack the type of leaders that are sufficiently well known to carry a business biography: no mercurial Steve Jobs or Elon Musk and certainly no college dropouts such as Mark Zuckerberg or Elizabeth Holmes of scandal-ridden Theranos to act as storytelling device.
Instead, Cain marshals his material around episodes and milestones. This allows for a few cliffhanger chapter endings, while also enabling the characters’ foibles to shine through. The dynastic Lees, at various times, display all the idiosyncratic behaviour of Musk and Jobs: from the philosopher-king founder Lee Byung-chul, who tore his napkins in half to save money, through to his aesthete semi-hermit grandson Lee Jae-yong.
The format also throws into relief what is perhaps Samsung’s fatal flaw: an inability to learn from its mistakes, which it is thus condemned to repeat. Various Lees are in and out of the courts, condemned and pardoned, with all the regularity of Musk tweets. Products are still rushed to market before they are ready — witness the breaking foldable phones first launched early last year.
It also highlights the sheer breadth of “the Republic of Samsung” — an omnipresence that stretches beyond South Korea. Samsung overtook then best-in-class Sony in the mid 2000s; it took on Apple — in terms of products and via a protracted and costly patent war — as well as Google. One of the many gems in Samsung Rising is the story of how the company was behind the Oscars selfie posted by Ellen DeGeneres that was retweeted so much it crashed Twitter.
More recently, breakout Oscar-winner Parasite was backed by Lee Mie-kyung, granddaughter of the founder, and more than a bit player in the book. She led Samsung’s efforts to buy into DreamWorks (mirroring Sony’s 1989 Columbia Pictures acquisition); failing, she took a smaller slice for her own part of the empire, CJ Group. There is sweet irony in a movie whose gory finale stems from South Korea’s gaping wealth gap being bankrolled by a part of the country’s biggest chaebol (literally, wealth clan or clique).
Cain knows his material well. A pity, then, that after showcasing his credentials — interviews with 400 people, recipient of certain leaked documents — the book almost immediately plunges into liberal quotes from broadcasters and print media. The opening lines, from a flight passenger whose Samsung Galaxy phone began spewing smoke during the safety demonstration, was from TV; his tale segues into takes from The Verge, Gizmodo and CNN Money.
There are plenty of times when this works; Samsung has after all attracted widespread interest. At other times it is simply puzzling. It does not take an opinion writer from Bloomberg to explain that the merger ratio for a linchpin deal was an utter horror.
There are also a few too many clumsy efforts at inserting himself into the story — a de rigueur requirement for business books these days. “I befriended locals in an effort to understand the Korean people better” is cringe-making and patronising; the constant detailing of meetings “over coffee” or “dim sum in a five-star hotel” starts to become a little formulaic. One feels for the woman who directs him towards a street “with her droopy eyes”.
Still, these are small quibbles. Like all good business books, Samsung Rising ends with many loose ends. The company is again facing harsh times, with production and supply chains snagged by coronavirus — now claiming ever more cases in Samsung’s birthplace, Daegu in south-eastern Korea.
Users have yet to judge on the latest launch of the foldable phones, and Lee Jae-yong is awaiting the results of a retrial that could send him back to prison. Whether or not it can once again shake off its adversities and keep rising remains to be seen.
Louise Lucas is a Lex writer
Samsung Rising: Inside the Secretive Company Conquering Tech, by Geoffrey Cain, Ebury, RRP £14.99, 416 pages
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