Joi's Diary

Back to Contents of Issue: January 2001

Met Gnutella founder Gene Kan.
I remember when I was always the youngest and most radical. Not anymore, I guess.

by Joichi Ito

Joichi Ito is the founder and CEO of Neoteny (, 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.

WAS INVITED BY GENERAL ELECTRIC to a round table lunch with Jack Welch. Kenichi Omae, Masayoshi Son, Jun Murai, Oki Matsumoto of Monex, Takeshi Natsuno of NTT DoCoMo, Hiroshi Mikitani of Rakuten, and others. Jack was as impressive as I had imagined he would be. He went around the room and hit people with hard questions and sparked some very interesting discussions about Japan, the nature of the Net, and the future of B2B markets. One obvious thing, which I hadn't thought about until Jack raised it, was that the Internet was causing more electricity to be consumed. GE has an obvious interest in how much electricity is consumed in the world. I often use electricity as an example of how basic and invisible the Internet will someday become, but I had forgotten how basic and invisible electricity is. Anyway, Jack was very concerned as to whether new technologies would cause more electricity to be consumed.

• Went to Kyoto to be on a panel organized by Mitsuhiro Takemura for Kyoto City. Present was Gene Kan, one of the founders of Gnutella, the open source peer-to-peer software that lets you make your hard disk available for download to anyone else in the network. As has been covered ad naseum, it really throws a wrench in the ongoing debate about copyright because Gnutella, being open source, allows anyone to create software that makes it possible for people to "share" their music collections. Because the software is free and open, it's very difficult now to stop it from spreading. Gene is very outspoken about the notion that even if we want to save copyright, it is already dead. Gene and I realized that I was 10 years older than him. I remember when I was always the youngest and the most radical. Not anymore, I guess.

• Took a day trip to Toyota-shi to visit Toyota. Being my first time in Toyota, it was obvious, but still a surprise to notice, that every car in sight after leaving the train station was a Toyota. I only saw Toyota dealerships and everywhere everything was about Toyota. The Toyota team that we met were pleasant, smart, and appeared to be very happy. As we waited in the lobby, people came back from jogging; others arrived in test-purpose electric vehicles that employees could use. The team told me that Toyota still rarely hires people from other companies and that very few people leave. I guess if you live in Toyota City, drive a Toyota, and go to parties where everyone works for Toyota, you have very little incentive to leave. Riding the shinkansen back, it struck me that Toyota City seemed to be on an entirely different planet from my venture world. In any event, I decided that there was always a great deal of value in bridging such vastly different cultures, as long as it was done properly.

• Oki Matsumoto, the former Goldman Sachs partner who quit just before their IPO to start Monex (which, it turns out, has been a great success), came to our offices to give a talk to our partner companies (ones that Neoteny has invested in). It was a great eye opener for many, including myself. Oki has really led the way for many significant changes in Japanese policy regarding the structure and process of building and taking companies public.

In particular, he devised a sneaky way to get around the ´yen;50,000 per share split limit and the inability to go to non-par-value stock in the middle of a company's development. Ask Oki for the details, but when he went public, he had ´yen;1 par value stock, which allowed him to get a great deal of liquidity by making his stock reasonably priced. Many Internet companies have stock prices in the $100,000 and $1 million range because of the inability to split stocks, severely limiting their liquidity. Since Oki went ahead and did it, many companies now want to follow his example, and Monex is providing support for such companies. Many traditional Japanese securities companies are still against this method, even though government officials and the stock markets have agreed that it's acceptable.

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