[dv_dt]

It's really odd to me that having an advanced ceramics division at Toto is considered such and odd diversified activity, and on top of that making money from the expertise of that division. Deep knowledge of ceramics would seem to me, to be a fundamental advantage if your main line of business is making ceramic toilets.

Companies like this with deep interlocking expertise used to be common in the US too when the US actually made things. GE was a conglomerate of "diversified" expertise - at least until a grandfather of financialization laid the seed to take apart the company.

AT&T and Xerox used to maintain all sorts of deep expertise in all sorts of science and technical activities - though maybe it could be noted that they were famously bad at spinning out other diversified product lines. But the expertise was a need in their core activities. Maybe the most interesting thing about Japanese businesses is that they have shown how to successfully start and maintain diversified product lines.

The main reason we are surprised by these "diversified" products, I suspect is that the typical American (and HN reader), is just not very familiar with the wide range of expertise needed to actually run manufacturing businesses.

[greatgib]

What is odd is that a very small side business somehow unrelated to the main activity that is manufacturing toilets, suddenly become the activity providing the main income of the company.

[dv_dt]

That's a good question, but to me it is not not odd at all to see continuity of growth in that all hugely profitable lines start smaller and grow. The proposition of the VC startup industry is the same at the core of it. Do many small things that can become big, only this is a more organic expertise driven decision basis for building the expertise instead of hype cycles and FOMO

Look at it this way, you need to maintain the expertise anyway, originally for the Toilets, but you only need that expertise sometimes, and to be experts worth anything at all, they need to do things outside of what the company is already doing to deepen and maintain that expertise. If you have a set of highly technical experts operating like mini startups - is it a surprise that one might become a unicorn in the balance sheets from time to time?