Joi's Diary

Back to Contents of Issue: April 2000


Politicians: Their Ignorance Is Our Bliss

by Joichi Ito

Joichi Ito is the founder and CEO of Neoteny (www.neoteny.com), an IT investment and operating company. He has created numerous Internet companies, including PSINet Japan, Digital Garage, and Infoseek Japan. In 2000, he was ranked among the "50 Stars of Asia" by Business Week and commemorated by the MPT for supporting the advancement of IT.

Had another double breakfast at the Hotel Okura the second week in January. The first was with a possible incubatee and the second was with the president of a Japanese branch of a US investment bank. The hotel's Orchid Room is starting to buzz like it did back in the bubble days; lots of money people with big smiles shaking hands vigorously. Generally a bad sign. ;-)

January 14
Had lunch with Yasuhide Uno of Osaka Yusen. His father wired up much of Japan with a cable music service, without MPT approval. The network is now a huge asset and Osaka Yusen is fighting with the MPT to get the bureaucracy's approval, which would legitimize the network and allow Osaka Yusen to really move into the digital age. Meanwhile, his son has launched a bunch of Internet ventures and has become quite a successful entrepreneur. Uno-san is a soft-spoken and very intellectual guy and I think that with the power of the Osaka Yusen sales force and network infrastructure -- combined with Uno-san's venture spirit -- they will be quite a force.

Had dinner with Ryu Murakami, the Akutagawa Award-winning writer of Coin Locker Babies fame who is now writing an email magazine on finance. Professor Iwamura from Waseda, whom I met when he was still head of research for the Bank of Japan, and several other friends of Murakami-san joined us as well. We spent the evening discussing the future of the economy, the definition of "value" in the context of culture, and free software.

Professor Iwamura is one of the smartest people I know; he studies extensively on his own and has become one of Japan's leading experts in a myriad of fields, including macroeconomics, cryptography, risk, venture business, and policy. He always manages to poke holes in many of my theories and I feel like I'm sparring with an academic Kung Fu master.

Also, several Japanese government agencies had their websites whacked -- which doesn't surprise me a bit. I've already told various ministries that security was very bad on some of these sites, but there is nothing like a real slap in the face to wake people up. Now everyone in the government is scrambling to tighten up security and catch the hackers. What they don't realize is that the real threat comes from the very serious professional criminals who don't hack Web pages -- they work with organized crime to use computers for fraud and extortion.

In the early 90s, the US also went chasing after the digital graffiti kids who kept slapping them in the face, but all they ended up doing was creating a rift between the hacker community and law enforcement. I hope this time the Japanese government won't make the same mistake.

January 28
I was on a panel at a Solomon Smith Barney conference on Internet valuations for fund managers. Nobuo Matsuki of Schroder Ventures, an analyst from Solomon Smith Barney, and Taizo Son from Indigo were on the panel. I expressed my concern that revenue from group companies and synergies should not be discounted in valuing companies since they should be looked at as independent companies by investors if they are being judged on their true value. Afterwards, Son-san told me that one of his primary concerns right now was to try to build relationships with non-Softbank companies in order to build independence (he's the younger brother of Softbank's Masayoshi Son). I thought that this was quite a good attitude.

February 8
Ex-chairman Takeo Shiina of IBM Japan has set up a project to educate politicians and bureaucrats on the new economy. I somehow ended up getting enlisted to make a presentation and do several demonstrations. Some of the politicians showed a bit of interest, but I was -- once again -- stunned by the lack of experience Japanese politicians have in using the Internet or computers. Also, it added a bit of support to my recent theory that maybe we shouldn't try to educate the politicians -- who might get involved without having adequate knowledge and screw things up instead of helping. Maybe it is better to keep quiet and move forward without them and let them catch up later -- if at all.

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