19 Insights From Tokyo’s Founders: Out to Build the Next Sony
Japan’s startups are on the brink of spurring an innovative resurgence
Within the world’s third largest yet most
discrete economy there is a next wave of tech revolution.
Shaking off the doldrums of more than 20 years of sluggish
economy and the customs of a traditionally risk-averse culture, what startups
mean and how the behave are more often than not, different than in Silicon
Valley.
In The Quiet Comeback,
Casey Wahl sat down for in-depth interviews with the diverse cast of visionary
entrepreneurs leading Japan’s next tech boom.
Here are highlights and insights from what it’s like on the inside on the other side.
1. Kiyo Kobayashi Founder, Nobot and Chanoma
Kiyo attributes the demise of his early enterprise, an ecommerce
coffee importer called In the Cup, entirely to his own shortcomings; an
immaturity in management style and flaws in the business model.
For his next venture, a mobile advertising platform he
launched with no advertising experience, he canvassed every advertising
executive he could meet for ideas and insights. The company sold to a Japanese
telecommunications giant for $19m just over a year after its launch.
The difference? Constant revision of his own mistakes.
“I have a habit of writing down all my experiences: the
details of my failures and advice from other people. I started this habit
during my internship. I’ve written about 3000 entries, and I still go through
them every day.”
2.
Shinji Kimura
Founder, AtLantis, Angel Investor and co-CEO, Gunosy
Shinji sold his ad network for $26 million before investing
in the news aggregate startup Gunosy, bringing it to IPO in April 2015. A
former strategic consultant, his entrepreneurial impulse was ignited by the
people involved. “Seeing people deeply enjoying the life—living their
passions—inspired me to become an entrepreneur.”
He defines the word very carefully, he believing that only
first core team, more specifically, the first five founding members are the
only ones deserving of the moniker.
“Those first five are the ones who get things off the
ground, taking the risks and sourcing the money and the team. Those people are
entrepreneurs.”
His take on entrepreneurial values is also quite particular.
“More than anything Silicon Valley says, the most important
thing is making people happy. Another important thing is fairness—if you have
to employ someone at low salaries, it means that the CEO is not very capable.”
3. Soichiro “Swimmy” Minami Founder and CEO, BizReach
Soichiro, who founded the executive recruitment site
BizReach at age 32, thinks of himself as a business producer.
After an initial career in finance, “Swimmy” sharpened his
business acumen at Rakuten Eagles (under the mentorship of CEO Mikitani), but
he did not possess a technical background of his departure.
What he had seen what
was tantamount to a “systemic failure” of the recruiting industry while also
recognizing the Information Revolution as his generation’s Industrial
Revolution.
“I felt a key component of being a producer is to
understand, and have the flexibility, to take in the new dynamics of the world.
“So if all this is the case, why don’t I go into this space
where there is a lot of frustration and use this magical Internet thing to
create a service that strives to be a solution to the problem?”
4. Mari Murata Founder and CEO, iemo
Mari consistently defies the expectations of the Japanese
business world. She pivoted her already
profitable outsource development company to social gaming, refusing investors
and hitting the timing just right, finally taking an offer on the company while
clearly pregnant.
Her second enterprise, iemo, was inspired by her time as a
housewife, finding that the Japanese real estate industry just wasn’t up to
speed with mobile technology. “I couldn’t easily use a PC to find new
properties while carrying a baby in one arm.”
With iemo, Mari achieved one of the quickest exits ever in
the Japanese Internet space, selling within seven months of its 2013 founding.
“A violent eruption of energy is the necessary first step
for creating a business. There aren’t that many people who have this in them.
This energy is very important.”
5. Yusuke Mitsumoto Founder and CEO, Bracket
Yusuke worked for Ogilvy& Mather, following advice he
had been given to “join a big company to see how things are done” by a CEO of a
startup he gained experience at as a university student.
Leaving the company at 27 to become a founder, his initial
social car-sharing enterprise was perhaps ahead of the “social” curve in Japan
and it was only Yusuke’s agility of mindset that saved him from the brink of
bankruptcy. He seized the opportunity to license Australia’s Shoes of Prey in
Japan almost immediately after learning of its existence. Their made-to-order model
did not require inventory and would bring in cash from the start.
At the time of the sale of his next venture (within a year
of its launch in 2013), the online store platform stores.jp had more than 45000
registered stores, nearly as many as Rakuten.
“Personally, I hate having ‘if-I-had-only-done-that’
regrets, so the moment I think of something, I do my best to take action
immediately.”
6. Yo Shibata Founder, Spotlight
Yo joined McKinsey after running a successful startup as
university student, but began to realize that the nature of the exactly
analytical nature made it tough for consultants to create interesting
businesses.
“However, when you became an entrepreneur, you’re thrust
into a chaotic situation and have to creatively come up with fresh ideas—a kind
of quantum leap is necessary… it isn’t something that can be developed in the
general world of consulting firms.”
Leaving McKinsey to launch and successfully exit two popular
apps, he says the future holds future entrepreneurship for him, with
successfully larger enterprises.
“There is a very strong cultural current here in Japan that
view executive founders as inextricably linked to their companies. That’s why
people almost never consider leaving the companies they created. However, for
serial entrepreneurship to flourish, separation is needed... For me, it’s about
pursuing my interests and developing the skill to be a serial entrepreneur.”
7. Rob Laing & Matt Romaine Co-founders, Gengo
Matt, a half Japanese designer who had previously worked at
Sony, and Rob, a graphic designer, started Gengo, a crowd-sourced language
translation tool, to resolve issues each had experienced on opposite sides of
the language barrier. Translations were either tedious favors asked of friends
or expensive time consuming services ordered out.
With no experience in the translation industry, their
naivety allowed them to build a simple product that is appealing from the
consumer perspective.
The naivety has transitioned into authority over time, and
their peers look up to their ability to secure funding both in Japan and the
US.
Rob says, “People have these perceptions about fundraising,
and I’ve just found that it’s really a lot of hard work. It’s a numbers game.
You’ve got to meet a lot of people, you’ve got to get out there, you’ve got to
know how to sell your business. We’ve become good at it.”
And just where does this translation company founded in
Japan by both foreign and Japanese nationals consider their base?
“I usually say our headquarters is on the Internet,” quips
Matt.
8. Taro Fukuyama Founder and CEO, AnyPerk
Taro knew he “wanted to do something great, and do it
globally.” After working at a social gaming company in Singapore he met Sunny,
the man who would be his eventual partner. They started with a dating site, came
to San Francisco with it in 2011, and struggled, living in and starting the
company in a car in a Taco Bell parking lot, as the car was the only place they
could afford to stay.
Just before retreating to Tokyo unfunded, they showed up
uninvited to TechCrunch Disrupt. Faced with a $2000 entrance fee, Taro
convinced the registration staff to let them work as interpreters for people
coming from Tokyo who don’t speak English and “aren’t going to have any fun and
won’t come back.”
Once inside, he made a bold challenge of Paul Graham got
into Y Combinator, though their original idea wasn’t strong enough to face Demo
Day, “the most leveraged day of your life as an entrepreneur.” The advice they received was to think about
something that Japan has that the US doesn’t have, and one month after joining
Y Combinator, they decided to work on AnyPerk, which provides employee perks to
companies.
Though he admits that getting visas is tough and the
competition is fierce in the US, he thinks that there are a lot of great
Japanese startups with the potential to succeed there. “They just don’t make it
happen because they are afraid to be here.
“If you have a great service and you have great passion,
then just do whatever you want to do.”
9. Takahito Iguchi Founder, Tonchidot, Telepathy and DokiDoki
A philosopher/coder, Taka’s
long history of groundbreaking entrepreneurship started when he left
JustSystems and created the first B2B blogging platform in Japan.
Now revered both at home and in Silicon Valley, he remembers
the moment he was challenged to take it up a notch.
“I grabbed a coffee with friend. He asked me, ‘Are you
changing the world or not?’ I thought, ‘Oh, my god. I’m not changing the
world.’ So I changed my course.”
Together with said friend in the aughts, they brainstormed
ideas as magical as robots to take care of plants, a new type of money akin to
Bitcoin and a universal language, founding Tonchidot and prototyping the
game-changing Sekai Cameria at lightening speed.
Shocked by the initial close mindedness of Japanese VCs, he
aimed for the Grand Prix from TechCrunch, where the company garnered interest
on both sides of the Pacific, only to be hampered by Lehman shock and a
dilution of vision when it came to monetization.
Suffering a loss of pride after being asked to step down as
CEO, Taka came back with Telepathy, a virtual reality headset, and after
initial successes, he was asked to step down from it as well.
“With both Tonchidot and Telepathy, to different degrees, we
had Tokyo operations and Silicon Valley operations. That was a huge problem. You have to do very
big things to effectively develop a company culture across that divide. And
it’s very important. I didn’t take the
time to mold the company culture. Maybe that was my mistake.
“Sometimes, I feel this is part of my mission—to make
connections between Silicon Valley and Tokyo.”
10. Takehiro Kakiyama Founder and CEO, MONOCO
Tak established his first startup, Flutterscape, a
smartphone-based C2C social buying service with his Indonesian co-founder before
graduating university in 2010.
Initially well-received and attracting a large user base,
they struggled to find a sustainable revenue stream and instead developed
MONOCO as an online B2C selling curated, imported designer goods to Japanese
domestic buyers. Rapid growth was followed by a major meltdown.
At a certain point, MONOCO achieved 100% growth, momentum
enough for 12x growth in a year. But importing products necessitates making
payments first. The more they sold, the more strapped they became. Things became critical in 2014 and Tak set
about getting Series B funding.
“It didn’t come in time. Each time I looked, our cash flow
was worse. Potential investors were afraid that their investments would
evaporate, so we didn't get investment. In any case, Japanese investors don’t
really give their honest feedback, so I don’t really know what they were
thinking.”
Demoralized by the grueling task of eliminating his
employees, his girlfriend shocked him back into action with the question,
“Where is your resolve?”
Once emboldened, he set about the task of repackaging his
remaining stock into value sets, he thought, alone. “When I showed up there
were 13 employees from my shareholders waiting for me. They were there to cheer
me on and to help me. We worked from dawn to late and night, packing and
selling 500 of these boxes and turning 60% of our inventory into cash.”
MONOCO is now ready to go forward with a revamped version of
the original idea--highly curated ecommerce platform focusing on one important,
fundamental principle: to convey meaning.
“If customers understand the product they buy—the real, deep
story behind it—then that item becomes something sentimental, something they
will treasure.”
11. Miku Hirano Founder, Naked Technology and Cinnamon
Miku was the only woman on her master’s course in computer
science at Tokyo University, during which time she and three of her friends
founded Naked Technology, a firm that created an innovative user-generated data
utilizing software for feature phones. Once smartphones took hold, Naked
Technology pivoted to creating a platform for the development of apps for
Android and iPhone at the same time.
After some stumbles, they completed an exit, with Miku diving
again into entrepreneurship after the lock-up period, this time a photo-sharing
service and more global in scale. Building the tech development center in
Hanoi, Cinnamon ran into difficulties immediately.
“We found it very difficult to comprehend what the
Vietnamese were thinking. People in Japan tend to choose their jobs depending
on its meaning and how well it suits them. However, in Vietnam, money is the
bottom line. Things got backlogged, so we made the tough decision to cut the
whole team. We’ve come to understand how things work, so now I’m confident that
we can hire and manage properly when we enter a new market.”
12. Yuya Kuratomi Founder and CEO, Panda Graphics
Yuya got a head start with internships at several Tokyo
startups while still in high school. Looking up to the CEOs he saw on TV or
interacted with in person, he strove to be both an entrepreneur and a business
executive. Deciding that acquiring global experience was the next step, he
moved to Shanghai and opened his first enterprise, a bagel shop, in Shanghai
just after his 19th birthday.
Despite pushing himself to the limits doing everything from
promotion to retail to advertisement design to the website, his initial outing
failed, but he impetus for Panda Graphics, a globally crowd sourced graphic
design company had been born: Yuya had noticed while assembling drawings for
shop “that there was a strong demand for outsourcing 3D drawings for
construction.”
Yuya tackled the risk-averse venture capital practice are
par for the course in Japan with a similar joie de vivre.
“The second month after starting up, some VC people were
saying the company was worth only $300,000, but I insisted that I wouldn’t
accept investment unless the company was valued above $3 million. In the end, we were valued at $3 million.”
Today, Yuya is headed toward becoming the youngest tech
entrepreneur ever to take a company public in Japan.
13. Yosuke Ariyoshi Founder and CEO, Lancers
Yosuke began dabbling in the still-nascent field of
freelance web developing while a university student in the 1990s. By the time
he graduated, he had garnered such a reputation as a hired gun as to bring in
$200,000 in yearly revenue.
Putting his high-flying freelance career aside, he became a salaryman upon graduation, at Nifty as a
web director. Three years in, he had noticed enough corporate contracting inefficiencies
to coalesce his resolve and solidify his dream. “ I wanted the world to be able
to feel the excitement that I felt when I was 22, starting to work as a
freelancer on the web. This was my deepest desire. I simply became an
entrepreneur to chase it.”
Initially expanding through word of mouth, and utilizing the
plan-do-check-act cycle, improvements were made incrementally. In the next phase, however, “Being able to
expand explosively was like an aerial battle. We had to use marketing, public
relations, advertising, etc. Just like
war, things don’t just end because you bomb someone else. The ground troops
then need to go forward and occupy the place.”
Lancers was Japan’s first major crowdsourcing platform and
has grown to become one of the most dominant.
14. Toshiyuki Yamamoto Founder and CEO, ChatWork
A jock turned onto the Internet by his “otaku” little
brother, Toshiyuki founded one of the first web design and internet marketing
firms in Japan while doing a junior year abroad in Los Angeles. Though founded by a student, the company was
subsequently named the best company to work for in Japan two years running. The
secret to such management prowess? The discipline
of an athlete.
He had been told to consider himself rather than his
employees as the source of the company’s problems. With admirable Japanese
humility, and dedication, this son of a CEO took it upon himself to meet 1000
CEOs as a method of improving his management skills.
“It wasn’t just about exchanging business cards with 1000
business leaders. I wanted to talk to
each of them for at least a half an hour. Thankfully, they shared their advice
and experiences with me, and from 2006 to 2008, I worked hard to develop my
management style based on all the advice I received.”
15. Shokei Suda
Founder and CEO, Enigmo
Shokei saw his first job, at advertising giant, Hakuhodo as
a stepping stone to fulfilling a deeper life goal—that of becoming a successful
entrepreneur.
His venture, Buyma, is an Internet social buying site. Originally
dealing in a broad range of goods, the business model has been tweaked several
times, and is now focused on high-end women’s fashion.
“You really only need to add new features once your current
features reach their limit, then you can add the needed functions. Your values
will be communicated to the user in the way you operate your site… so just
fiddle around and make improvements.”
With his sights now on Asia on the way to the global stage, Shokei
posits that what differentiates buyma from his international counterparts is a
particularity of Japanese management.
“I think that meticulous operating philosophy is a uniquely
Japanese characteristic. We’re lining our catalogue and doing customer support
as if we were a B2C company… If you don’t treat your customers like your lover
or your family, they’ll quickly go somewhere else.”
16. Hikari Sakai
Founder and CEO, Interest Marketing
Hikari overcame what, in Japan, was an unimaginably
unconventional youth to become one of Japan’s few serial entrepreneurs.
After dropping out of high school, he managed to not only save
$200,000 through 40 or so odd jobs and part time work to start his first
enterprise, Brand Databank, at age 30, he also managed to save himself from a
path into “the dregs of society.”
Selling Brand Databank for $1.5 million and gaining
executive experience as a result of the exit, he launched a series of companies
that merged to become his current venture, Interest Marketing.
Despite his unusual experience and multiple business
outings, Hikari eschews the conventional romanticism of the ‘idea’, instead
placing emphasis squarely on execution.
“I regularly research tech companies abroad and most of our
clients are tech companies, so I constantly check to see who has investor
relations problems. I always ask myself if they could solve their problems with
a new idea. The answer is usually no. I think of ideas all the time; very
bluntly, the process of building a strong team, starting a solid project, doing
sales and then meticulously checking customer and user responses and then, on
top of all that, improving—this is all much more important. It’s not the idea
but the execution that matters. A successful tech startup is 95% execution.”
17. Shinichiro Kawabata Founder and CEO, Interspace
Captivated by the burgeoning Internet economy, Shinichiro
founded Interspace in 1999 without having decided what the business would
actually do. Experimentation led to a paid-for-performance advertising model. Initially
somewhat hampered by a lack of Internet advertising knowledge, the firm was
successful, and went public as a part of a personal mission rather than a cash
grab.
“One our personal missions was to rejuvenate the Japanese
market. The only way we could achieve this was by making a company of sizeable
scale. This is why we chose to go public.”
I feel the need to raise Japan’s position in the world, given
that it doesn't occupy a high position now. Unless we have successful Japanese
companies, Japanese people won’t feel confident in themselves.”
18. Yukiko Muto Co-founder, Pro Trade
Yukiko left Andersen Consulting with three of her colleagues
to start the on-line business matching platform ProTrade in 2000 and were able
to successfully exit within nine months with a sale to Rakuten.
Acquiring customers readily and quickly through a
combination of the then un-named “spamming’ (to which they received replies of
gratitude for introducing “such a wonderful service”) and highly active PR
efforts (there were “… no limits to the number of catch phrases we could come
up with),
the team was always confident of the success of the service
itself. However, the bursting of the Internet bubble impeded key infusions of
venture capital leaving a service with over 6000 customers severely strapped
for cash. With options limited to
quitting or selling, Yukiko found herself in the CEO responsibility conundrum that
is perhaps uniquely Japanese.
“When we sold the company, I paid close attention to whether
the company buying us would properly employ all of our staff and ensured that
their salaries would not be cut.”
Rakuten made good on those promises, and Yukiko worked
continued to work within the organization, ensuring the initial ProTrade
business was successful and assuming handful of top end roles before embarking
on her second entrepreneurial foray, TravelZoo Asia.
19. Kaoru Hayashi & Joi Ito Co-founders, Digital Garage
Joi, a college drop out many times over, ingrained himself
in the emerging culture of the internet early, launching the first personal
website and becoming the first blogger in Japan. Kaoru, meanwhile graduated from an esteemed
Japanese university and dutifully commanded a job offer from a domestic
advertising giant. Their chance meeting
in San Francisco in the early nineties has had a profound impact on the shape
of startup culture both in Japan and abroad.
Merging their two companies to form Digital Garage as a
“context company” in 1995 placed their venture in the center of the Internet
phenomenon, starting with mostly contractual assignments, eventually investing
in and growing other successful Internet services such as the most widely used
restaurant ratings tool, to incubating Twitter’s entry into Japan (and narrowly
losing the contract to establish Yahoo!Japan to Softbank CEO Masayoshi Son
along the way).
Being ahead of the wave was both a blessing and a curse,
something Kaoru refers to as the “first penguin” thing.
“We needed to be the first one out to sea, because in Japan,
there just aren’t many people who jump in early.”
Although the pair believes lack of capital due to the
cautious nature of Japanese investors occasionally cost them the advantage,
Kaoru notes, “Entrepreneurs are natural optimists. We just forget our regrets.”
He remains CEO of Digital Garage and is widely regarded as
one of Japan’s most influential businessmen. Joi heads the MIT Media Lab.
