Joi's Diary

Back to Contents of Issue: March 2000

The VCs commit, the board sings

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.

By the time you read this, the news will be on the street that US VC J.H. Whitney (an investor in J@pan Inc.'s parent company, LINC Media) and PSINet have invested $20 million in Neoteny, my incubator. The transaction was led by Tokyo's J.H. Whitney duo and was the most professional and honest deal of this size that I have seen here; we closed in one month. Makes me think twice about telling VC jokes now.

The news will include details on who's joining the Neoteny board, including Bill Schrader, the CEO and founder of PSINet, and Whitney's Paul Slawson. We've also brought together what we think is quite an interesting advisory board, selecting people who are clearly visionaries. The advisors will also be available to the companies in incubation, and consist of Jun Murai (Wide), Jiro Kokuryo (KBS), Mitsuru Iwamura (formerly Bank of Japan, currently at Waseda University), Pierre Omidyar (chairman and founder of eBay), Mitsuhiro Takemura (Tokyo University), Michael Backes (Timeline Computer Entertainment), John Vasconcellos (California State senator), Derrick DeKerkhove (McLuhan program director), Ryuichi Sakamoto (musician), Kotaro Yamamoto (Hakuo University ecologist), John Perry Barlow (lyricist for the Grateful Dead), John Patrick (VP of Internet technology at IBM), Jane Metcalf (co-founder of Wired), John Gage (Sun Microsystems), John Brockman (Brockman Inc. and the Edge Foundation), and Ryu Murakami (author).

I have been griping about not having a good location or good office space. We have decided to move to the Plaza Mikado Building in Akasaka (red hill), where PSINet used to be. Neoteny and some of the Neoteny network of companies will be joining us. I wonder what the press will say now. "Neoteny moves from Bit Valley to Red Hill" perhaps? I wonder if Red Hill will become the Sand Hill of Bit Valley?

We're kicking off several new companies that have been simmering in Neoteny's incubator: Car Generation, a driving school site; Waag Techno-logies, a mobile product selection and community site; and, a Linux testing and information site. We have a bunch of other deals in the pipeline. I met Yasuyuki Kido of Neonagy for the first time. Neonagy is a solutions company focusing on Linux - a very cool company that I hope will work closely with us, despite the possible confusion in our names.

I attended one of the regular meetings at Koso Nippon, for the first time as a speaker. Koso Nippon is an NPO run by Hideki Kato, formerly of the Ministry of Finance. The organization researches and distributes information aimed at building a better Japan. This month's meeting was organized by Seigo Matsuoka's Editorial Engineering Laborato-ries team, which just finished their new online community project, ISIS. A pretty illustrious list of speakers attended, each of whom spoke for a few minutes. I got sandwiched between Hiroshi Suzuki, who recently moved from MITI to Keio University, and Eisuke Sakakibara (dubbed Mr. Yen in the press). We talked, as usual, about Internet communities, trust, value, and the economy. I never thought I'd be on stage chatting with Sakakibara about the economy.

At the beginning of the year, I was on a show with my favorite announcer, Yuji Kuroiwa, and Kenichi Takemura, Kiichi Miyazawa (Japan's minister of finance and ex-prime minister), Jiro Koku-ryo (KBS), Yotaro Kobayashi (chairman of Fuji Xerox), and Rakutan Ichiba's Hiroshi Mikitani. The show ended up being kind of short and shallow, but we had a very interesting discussion in the waiting room afterwards. I was really impressed by Yotaro Kobayashi, who has read Francis Fuku-yama's book on trust, Kevin Kelly's book, New Rules for the New Economy, and Toshio Yamagishi's work - also on trust - all material which I think is highly relevant to a wired economy. The talk ended up, as usual, in a discussion about trust, communities, and the definition of "value." Later, Jiro and I decided that we really needed to work on the definition of value in this new economy - a rather mighty undertaking, since I think everyone has been avoiding going there for too long and the definition is getting rather old.

It was a bit disappointing, though, to hear that Finance Minister Miyazawa doesn't use the Internet yet.

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