Can Japan Find The Startup “Vibe.”

This interesting article showed up in the WSJ.

Some startups have reached prominence in recent years. Euglena Co. 2931 1.57 % , a producer of microalgae with food and environmental applications that launched in 2005 and went public in 2012, has a market capitalization of more than $1 billion. Mercari Inc., operator of a peer-to-peer shopping app launched in 2013, raised around $75 million last month, valuing it at over $1 billion.

But venture-capital investments in Japan last year totaled just $629 million, according to AVCJ Research, compared with $59.1 billion in the U.S., according to the National Venture Capital Association.

There are still relatively few people willing to risk choosing entrepreneurship over a job at a big company. Even as the travails of giants like Toshiba Corp. and Sharp Corp. show there is no security in size, there remains a deeply ingrained reverence toward large corporations.

Take Yoshiyuki Taguchi, a 22-year-old intern at Slush Asia, an offshoot of a popular Finnish event that brings together entrepreneurs, tech talent and investors. While he wanted to continue with Slush after graduation, his family insisted he join a “listed, famous” company. After arguing for a month, he took a job with a major human resources firm.

Antti Sonninen, chief executive of Slush Asia, said Japan needs more entrepreneurs-turned-investors to serve as role models.

“Those guys can give the best advice on how to build the next-generation, world-changing companies,” he said.

That is what Mr. Son is attempting to do through Mistletoe, which supports startup-education programs and pitch events—where entrepreneurs try to sell their ideas to investors—while working with ventures to find solutions to problems in areas from transportation to Japan’s aging population.

Mr. Son calls himself part of the first generation of Japanese entrepreneurs that launched startups during the dot-com boom of the late 1990s. Fundraising then was a nightmare, he says, with significantly less money available for entrepreneurs and banks reluctant to lend to unknown businesses.

A lot has changed since then. Today’s entrepreneurs can point to the success of some of those unknown businesses—the likes of e-commerce company Rakuten Inc. 4755 1.13 % and mobile Internet operation DeNA Corp. have become household names in Japan, if not world-wide.

The number of companies going public reached an eight-year high last year at 98, around two-thirds of which listed on the Tokyo Stock Exchange’s Mothers market for high-growth startups, according to the Japan Exchange Group.

Mr. Son’s startup successes include Yahoo Japan, 4689 -1.43 % which he helped launch in 1996 while still a student at the University of Tokyo, and which now runs Japan’s largest portal site, and Gungho Online Entertainment Inc., which produces top-grossing videogames like Puzzle & Dragons.

His mission now is to relay his decades of experience to a new generation of entrepreneurs. While his older brother has led telecommunications and Internet giant SoftBank in big, bold overseas bets—including the acquisition of U.S. mobile carrier Sprint S -2.00 % Corp. in 2013 and a recent string of tech investments in India and other parts of Asia—the younger Mr. Son appears dedicated to energizing his local startup scene from the ground up.

Mistletoe’s 1,300-square-meter “startup studio,” as he calls it, offers participants workspace and the assistance of a staff that includes experts in fields ranging from artificial intelligence to industrial design.

“It can be hard to attract the necessary talent to launch a startup, so we work with them and provide advice,” he said.

Do I think that Japan can create a “fertile ground?”  Actually it should be pretty easy.  Especially if you look beyond Japan’s traditional industrial culture and look at some of the stuff on the fringes and what’s happening there.  I think that Japan has great potential for such restart if you look in the right places.

Consider the entertainment industry. While Japanese film has had a decline on the world market, the animated films and TV shows have enjoyed a growing market, as has the manga industry for some time now. Much of that success has been the result of reacting to new technologies and the internet by finding innovative ways to distribute and market product.

For instance, selling dolls, to guys.

Which is part of the growing market of people selling anime related figures and model kits worldwide.

Some of the old crafts are trying to use smart marketing to make a comeback.

One thing that Japan has is a well established culture of hacking things together and having the places that sell the parts that can enable you to get a project up very quickly.  for instance the electronics markets in the warrens of Akihabara.

There’s also the advantage that Japan has a large job shop industry in the larger cities to make it easy to get your parts made.

this makes it easy to create products like small robots or toys. Or the new gadget or tech for the future.

There’s a revolution going on that’s going to change how much of what we considering manufacturing is done and Japan is well placed to be in the middle of it.

All you have to do is look in the right places.

Looking at the massive companies of Japanese industry today, it’s hard to remember that many of them were just little shops a very short time ago. consider Honda, Sony or Canon, all of which had their start or growth after WW2. I don’t know the things that the country of Japan did that provide such fertile ground for companies like that back in the 1950’s, but it’s obvious that it worked.  I think that if your looking for startups you need to look where there are places just starting up.

Don’t look for the software people of Silicon Valley, look at what’s happening in Akihabara. That’s where the action is going to be, just like it was back in the 1950’s making those transistor radios and little TVs.  Now it’s going to be replicators and robots.


  1. masgramondou · April 13, 2016

    Japan is still a regulation pain in many ways although things are getting better.

    For example until fairly recently it was a complete pig to set up a company in Japan. Your choices were full blown incorporation (aka KK) or one that was almost totally useless and still tough to apply for. That’s changed with the creation of a type of company called a Godo Kaishai or GK which is pretty simple to create and well explained here –

    Also one area where Japanese people are making things is craft beer (and other craft booze too for that matter). There used to be a large annual minimum amount of booze that you had to produce which has now been either eliminated or drastically reduced so that it is no longer an issue.

    Japan has the infrastructure for new business and is (gradually) reducing idiot regulations but it takes time for people to figure out that this is a better choice


  2. Pingback: They Have No Joy In Their Lives, Only Self Justification And A Compulsion To Inflict Themselves On Others | The Arts Mechanical

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