Summer, 2005 |
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Market Snapshot - Japan
Baseball and the Japanese Internet Industry
In the United States, it is not
uncommon to have a baseball stadium named after a company- think SBC
park, Coors Field, Bank One Ballpark. The stadium name has always
been for sale to advertisers. But the team’s name on the other hand,
has always been reserved for the City the team calls home. In Japan
however, the tradition has always been the reverse: teams are named
after the company that represents the team’s owner, usually a major
Japanese corporation. For example, Yomiuri Giants (newspaper),
Hanshin Tigers (railway), or Orix Blue Wave (lease financier). The
importance of this tradition is that the corporate name, rather than
the team's home location, becomes the nickname for the team. During
baseball season, the company names get repeated constantly during
the nightly sportscasts, and printed abundantly in the daily and
weekly sports pages. Team ownership is, in a sense, a ticket to
household acceptance. So it was with great fanfare that two, and
almost three, key players in the Japanese Internet entered the
baseball arena last year.
The first company to be successful in
its bid to enter Japanese baseball was Rakuten, the Amazon of Japan.
Rakuten, the largest ecommerce portal in Japan, generated extensive
publicity when it applied to enter Japanese professional baseball
after the merger in 2004 of two teams led to a reduction in the
number of teams in the Pacific League from six to five. Rakuten took
the sixth spot on the strength of its application, which emphasized
its ability to breathe new life into Japanese baseball which had
been suffering from lagging popularity in recent years. Rakuten
hired an American, Marty Kuehnert (the first foreigner) as General
Manager and named itself the Tohoku Rakuten Golden Eagles based in
Sendai, Japan.
The other successful entrant was
software and telecommunications powerhouse Softbank which bought the
Hawks from failing retailer Daiei. Softbank is an IT-media
conglomerate, renowned for its low-priced ADSL access service, which
revolutionized Japan's broadband market by capturing more than a
third of Japan's 12 million ADSL subscribers. Now known as the
Fukuoka Softbank Hawks (notice that both Rakuten and Softbank have
started adding place names to their teams in the American fashion),
the team plays at the Fukuoka Dome and is also part of the Pacific
League.
Yet perhaps the most interesting
story of Internet companies in baseball in Japan is the unsuccessful
bid to enter baseball from Livedoor who competed against Rakuten to
start a team after the merger of Orix Bluewave and Kintetsu Buffalos
in the Pacific League last year. Livedoor started life in Japan as
an advertising sponsored ISP but gradually moved into multiple other
businesses fueled by investments from the venture capital community.
The company today offers online securities trading, DVD rentals, Web
hosting, an Internet auction site and owns a venture-capital
investment arm, an IT consulting business, and a
mobile-phone-software developer. Takafumi Horie, the 32-year-old
chief executive of Livedoor, shocked Japan's sports world when he
announced his intent to form a baseball team. The elders who control
Japanese baseball were disgusted, with one commenting that it would
be impossible "to let some unknown person in."- needless to day,
Livedoor didn't get the franchise.
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 Archive
View content
from past editions of our monthly Japanalyzer newsletter!
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This
Month's Bridge Builder
Featuring
the real voice of IT across the Pacific
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July, 2005
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 On
Startup Business Models and Methods
Mr. Yuji
Ide, President and CEO, Pixera Corporation
It’s the ultimate career for a talented
Japanese engineer: graduate from University, work hard at
various divisions within a major Japanese electronics
company, get promoted, get sent to Silicon Valley, and start
one’s own company based on the technology you’ve been
researching all along. For most, this scenario is impossible
because of all the barriers in the way such as visa
requirements, language issues, not to mention the challenges
and risks associated with becoming an entrepreneur. But for
Mr. Yuji Ide, this appears to have been his destiny. Mr. Ide
founded Pixera in 1995 after many years and many departments
at Toshiba, working on the development of color video
cameras and multimedia technologies. Mr. Ide is considered
to be a leading innovator in visual communications
technology, holding numerous patents in the areas of
electronic still cameras, HDTV cameras, large screen liquid
crystal TVs, human interfaces and virtual reality systems.
His current focus at Pixera is to move forward the market
for personal visual communication by combining digital image
technology and integrated software technology. As one of
Silicon Valley’s first Japanese entrepreneurs, Mr. Ide has
been an important source of inspiration for others and he
has shared the knowledge gained since starting Pixera by
presenting various models and methods for running a startup
company. At the most recent Keizai Society meeting, Mr. Ide
discussed a few of his ideas in a presentation entitled “A
new startup business model for the 21est Century”- the event
was sponsored by JETRO. This month’s Bridge Builder,
features some of the key learnings from Mr. Ide’s
presentation.
Mr. Ide began his presentation with a
brief historical review of the some of the key innovations
of the last few centuries. Focusing on the steam engine, Mr.
Ide recounted the story of James Watt, who although known as
the father of the steam engine, did not actually invent the
steam engine (Newcomen did). Rather, Watt earned the title
of “father” because he dramatically improved efficiency and
started a company based on the improved technology. Mr. Ide
thinks of Watt as the first modern entrepreneur because he
innovated with existing technology by making it more
efficient (3x, which according to Mr. Ide is the minimum
requirement) rather than starting something completely new.
Watt then identified key individuals who could then fund his
venture and eventually become pilot customers. Watt captured
the three key elements needed for startup success, according
to Mr. Ide, efficiency-led innovation, experienced partners,
and a promise from initial customers.
Mr. Ide then took a look at the business
plans of the dotcom era which were simply put, unrealistic.
Business plans in the 90’s focused on fast growth fueled not
by sales but by venture capital. This resulted in a massive
time drain on the CEO who had to spend all of his energy
fund raising instead of making a profit. The goal of the
corporation, according to Mr. Ide, should be to make
economic profit and a contribution to society. These goals
can be achieved by efficiency in business on both a micro (ROI)
and macro level (the creation of new industries, etc.) Mr.
Ide recommends that startups in the 21st century should have
profit right from the start and should think carefully
through the marketing and business development process at
each stage of the company.
Mr. Ide used the latter portion of his
presentation to introduce several unique methodologies to
enable the startup entrepreneur to quickly get a handle on
his business. For example, his “One Day Marketing Method”
advises that in some cases, a marketing plan can be
developed in as little as 24 hours (presuming the
competitors and their products are known). Mr. Ide also has
a method for “predicting technological trends in the future”
based on his experience that core technologies (CPU clock
speed for example) often follow predictable patterns of
growth based on historic trends. Finally, his “30-second
financial data analysis” is everything a non-CFO needs to
know to quickly understand the financial position of the
company and take action if necessary.
Mr. Ide’s company Pixera (www.pixera.com)
develops, builds and markets digital cameras for the
Professional users of, Biomedical/Scientific Imaging,
Industrial Imaging, Security/ Surveillance/CCTV and Video
Conferencing. Pixera’s products, available for Windows and
Macintosh computers, feature unique technologies for
analog/digital video cameras, high-resolution,
multi-function digital cameras, and software-based image
processing. For more information on the Keizai Society,
please visit them on the web at
www.keizai.org .
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AutoID Expo
September 14-16, 2005,
Tokyo Big Sight (Tokyo International Exhibition Center)
The only exhibition in Japan devoted exclusively to
automatic identification technology and equipment.
Security Solution 2005
October 26-28, 2005, Tokyo
Big Sight (Tokyo International Exhibition Center)
Concurrent with WPC 2005 (a PC focused event),
Nikkei Business Publications, Inc. is going to hold the “Security
Solution 2005”, an exhibition for security business in the network
society. The exhibition will have the latest technologies, including
network security technologies and corporate security management systems.
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