Joi's Diary

Back to Contents of Issue: July 2000

US Net Ventures Lack Globalization Skills

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.

  • Did an interview for Hotwired Japan with Taiga Matsuyama, one of the founders of the Bit Valley Association. We talked about NPOs and my theory of NPOs and online communities forming into powerful enough organizations to buy out companies and infrastructure. I always enjoy our discussions because Taiga is very quick to catch on to new ideas and has the kind of young energy that I think everyone associates with Net pioneers. I think he is grappling with the task of trying to guide the whole Bit Valley phenomenon in the direction that he originally had hoped it would take since it is becoming rather frothy these days.

  • Gave a talk at the Financial Supervisory Agency about my thoughts on the future of financial services on the Net. I think they wanted me to talk about my favorite financial sites, but I ended up talking about data havens, financial cryptography, online casinos, the end of the nation-state, and other rather non-social ideas (from their point of view), but it did spark some interesting discussion. Also bashed them for letting financial institutions get away with extremely irresponsible things such as the current debit cards. The debits cards that are being touted as a sort of cash card/credit card are in fact very easy to forge and are not insured. If someone has their card copied or stolen, the thief can steal all of the cash out of an account at the risk of the account owner. There was approximately $90 million in reported fraud losses in ordinary credit cards last year. These debit cards represent a huge risk to society.

  • A group from the Kellog School of Business visited our offices and we had a chat about venture businesses in Japan. I told them that business school is not the place to be if one spoke Japanese and was motivated to become an MBA. The opportunity in Japan now is a once-in-a-lifetime one not worth wasting several years to "get ready" for.

  • Attended a meeting of "Mumei No Kai" or "the gathering of the unknown people." The regular members of this meeting include Makoto Naruke (former president of Microsoft); Muneaki Masuda, CEO of CCC/Tsutaya; Hideo Sawada, president of HIS; Kotaro Higuchi, former chairman of Asahi Beer; Takeo Hori of Hori Productions; Seiji Tsutumi of Season; and others. It's kind of a combination of the "young business leaders" and the "old business leaders" and it provides an opportunity for many of us to share thoughts and ideas very candidly. Mr. Higuchi talked about his thoughts on the future of Japan. It was a very enlightening discussion. Mr. Higuchi gave everyone Issei Miyake neckties, of which he always has a huge number in his car. He's a good friend of Mr. Miyake and always gives them to his guests.

  • Met Michael Dell of Dell Computer. I felt like I knew him since I see his face all the time. Dell, like everyone else, is looking at the private equity opportunities in Japan, and Dell appears to be very aggressive and fast. I think that Dell's focus on creating an efficient organization without any waste may allow it to give advice to startups on supply chain management and cost performance.

  • Did a discussion-style interview with Jiro Kokuryo from the Keio Business School and Mr. Shoichiro Iwata, the president of Askul, for the Economic Planning Agency's magazine. We talked about the same future-of-Japan stuff, but Jiro gave me new things to think about, including the notion of the IT revolution being to communication what mass production was to physical production. It is the scalability of communication. Having just read the Cluetrain Manifesto, the notion of the scaling of communication causing a power shift as significant as the shift from land to capital when we went from an agricultural to an industrial society was interesting. We are probably moving from a capital-centric society to a trust or non-capitalizable asset-centric society (think Linux). Anyway, my business guys hate it when I talk about things money can't buy, but I think that's the ball we all need to keep our eye on.

  • Several gentlemen from the French Embassy visited to talk about collaborating with French entrepreneurs. We happen to have several French speakers on our team and told them we were excited by the idea. I think one thing that many Net ventures in the US are not good at its globalization. I think a federation of companies helping to globalize companies is necessary. Now more than half of the Internet is outside of the US and it is growing more quickly outside of the US. I don't think Americans understand this, but I guess we don't have to tell them.

  • Went to the birthday party of Reiko Okutani, president of The R. She had just turned 50. There was quite an impressive turnout of industrial leaders. Makoto Naruke was the only one there who wasn't wearing a suit. I thought that was some sort of symbolic thing since he left Microsoft, but he told me he'd just returned from Tibet and had forgotten about the party until it was too late.

  • Flew to Linz, Austria, via Frankfurt, Germany, to participate in the jury for the .Net category of Prix Ars Electronica. This is my sixth year on the jury, which I have been on since the category started. This year we had over 200 entries to look through in two days. Ars Electronica is over 20 years old and grants awards to artists in areas that involve new technologies. There is a festival in the fall where all the artists and many other people get together to discuss the future of technology, society, and art. Other than the Net, awards are given to Computer Animation, Computer Music, Under 19 Years Old, and Interactive Art. Last year, our jury caused quite a stir in both the art community and the free software community when we gave the award to Linus Torvalds for causing the Linux community to happen. We held that it was his aesthetics and imagination that created the community and that the community was a work of art that embodied many of the criteria that we associate with the category: distributed, self-organizing, can only be done on the Net, community building.

  • Was on the Japan receiving committee for the Dalai Lama's visit to Japan and got to sit at the head table in front of his holiness. He was looking into everyone's eyes and smiling a great smile. He gave a great speech, starting off by talking about the graying hairs in his nose. ;-)

  • Received a brand-new Latitude laptop from Michael Dell and an IBM Workpad from Takuma Otoshi, the president of IBM Japan. Thanks!

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