Mitsuaki Makino is an honest, humble guy. Too humble, perhaps. Even though his Akihabara price-comparison site kakaku.com is now an established brand in Japan -- with 8 million to 9 million monthly page views from shoppers hungry for the latest prices in the tech bargain nirvana -- he doesn't seem the least bit boastful about it. In fact, he humbly confesses that his site makes just ¥10 million (about $95,000) a year, and he admits that banner ads are the only source of revenue and that he has no sales staff. He does, however, seem confident. If he really puts his mind to making money, he says, he could pull in at least ¥20 million a year. And he's putting his mind to it starting now, having just received ¥100 million in funding from Japanese VC firm ICP. Kyoko Fujimoto visited Makino in his office in Asakusa-bashi, one stop away from Akihabara.
What were you doing before you established kakaku.com?
I graduated from Tokai University in 1996 and joined Melco, a manufacturer of computers and accessories. I was doing sales in the Akihabara area. It was right after Windows 95 was released, and there was a great demand for computer memory -- the standard PC had only 8 megs or 16 megs installed at that time, but you usually need more to run [Japanese] Windows. So there was strong competition among makers. Also, it was right at the time when memory prices started to fall, so the shop owners kept asking me for better prices, and the salespeople always had to check the competitors' prices as well. And of course consumers always walk around town seeking better prices. During the bonus season, when people have lots of money, we had to go around shops several times a day to check the competitors' prices. Then it hit me -- everyone wants this information, and even though the answer is the same, everyone spends time trying to find it. I thought that if I could offer the information to all the people out there, it would be great. I was still 23 at the time, and I thought that even if I failed after three years, I would still be 26. So I quit Melco in 1997 and decided to run a business of my own.
Were you all alone when you started?
I established Core Price (the original company name) in the spring of '97, and was alone for almost two years. At first I went around the electric shops with a little Excel sheet with all the store names and computer model names in hand. I made an A4-sized table, went to a convenience store to make a tiny little photocopy of it, and went to stores with a palmtop-sized piece of paper. One time I was surrounded by store clerks at Bic Camera -- of course, I wouldn't have appreciated a guy like me if I were them either. I had to run away. Now I'm able to say, "I'm from kakaku.com, so what?" but at that time nobody knew the site. Then I realized it was too tough to go around to the stores all by myself, so I decided to get the information through store sites [when possible].
kakaku.com mainly offers price-comparisons for PCs and accessories, right?
Yes. PCs have big price fluctuations -- the price drops heavily in just a few months, so many people want information. We update the site every Tuesday and Friday, and I've been doing this from the beginning without a break. We also started comparing prices for other electric goods from last year, and we plan to deal with many others in the future. We started comparing prices for popular brand products, such as Hermes bags, Prada purses, et cetera.
Now you're making profits only from banner ads. Do you have other plans for revenue?
Yes. We recently started a B2B reverse-auction service. It's targeted at corporate users who want to buy huge amounts of PCs at a time. These buyers can post a message, and then the sellers can bid to offer the best prices. We aren't charging anything now, but we have about 30 to 40 bids per day and plan to eventually charge a small amount of money per bid. We want to get the largest market share first, so this service will be free until then.
Another service is Oshirase Mail ("Notice Mail"). Here, we send out a notice to whoever wants updated information about the lowest price of a particular product. For example, if you want to buy a digital camera from manufacturer X, you can register to have the notice delivered to you when the lowest price changes. And we publicize the number of people registered, so you can see which products are popular. What we are planning to do, then, is place an ad from the competitor on the notice mail. This is going to be the ultimate opt-in mail service. We just applied for a business model patent.
There will be price comparison sites and services from overseas trying to get into the Japanese market. Do you think you can survive?
Oh, God, that's a problem ... But I think it would take time for any of them to establish a good relationship with the shops. We already have the brand name, and many shops like us a lot -- 250 of them provide us with the price information because they know people who visit our site are definitely willing to purchase something, and they've been hearing our name from customers for a long time. That's why the shops treat us like a good old fellow. That's our strength. I don't think competitors from other countries can beat our partnerships.