"Beteran" Assistance

Back to Contents of Issue: August 2001

A group of business veterans from Japan's corporate giants is doing what it can to help the nation's young entrepreneurs.

by Kyoko Fujimoto

JAPANESE BUSINESS TITANS, it seems, won't give the time of day to ventures. As we note elsewhere in this issue, that attitude puts a real damper on technology innovation in this country: If ventures can't get support and funding from the big boys, they don't stand much of a chance, especially in today's cold VC climate.

But hey, don't blame the business veterans -- instead, blame the less open-minded young salarymen. They're the ones whom the ventures have to initially approach with proposals -- and the ones who often turn down bright ideas for fear of having a failure blamed on them. As a result, a lot of startups never even reach the ears of top execs.

Such is the reason behind the Veterans Society, a group of senior executives from Japan's business community that invites ventures to give presentations directly to them. The group started in April and meets once a month. A few members do the filtering and decide which ventures can present.

Organizer Ikuo Nishioka thinks the Veterans Society, by giving ventures direct access to the decision makers, plays a needed role in nurturing startups in Japan. "We're different in that we can actually take actions," says Nishioka. And through participating in the Society, he notes, "people who have a huge influence on Japan are speaking out."

And speaking out they are. J@pan Inc was invited to one of the meetings -- we were the only media present -- and it was obvious that most of the members share Nishioka's determination to help startups. In a presentation by Kouji Ishikawa from White & Case LLP and Hiroshi Menjo from The McKenna Group about the problems venture companies face in Japan, the veterans were extremely active, casting questions, putting forth opinions, and in some cases agreeing to set up groups for further study of a particular issue. The big-company veterans, far from seeing startups as potential failures or competitors, were actively trying to figure out what was wrong with the venture scene in this country.

Of course, there is an ulterior motive involved. "Venture companies usually create new markets that big companies can't make," Nishioka explains. "The market grows from there, and when it becomes mature among ventures, the big players start to come in."

The dot-com boom-and-bust in the US was notable not only for the vast amounts of money it won and lost for the various ventures, VCs, and other risk-takers, but also for the huge new markets it created out of nothing for the big, established players. Creating new markets is a function Japanese startups can also serve, so the bigger players who will eventually benefit from the new markets ought to support them, the argument goes.

"Big Japanese corporations should see ventures as partners, not competitors," Nishioka says. "We all want our partners to be strong, and we, the veterans, should be the ones to help them."

("The veterans" may sound a bit off-key to Western ears, but in Japanese, beteran implies an experienced, seasoned business executive.)

So far, the Veteran's Society appears to be blossoming nicely. The group has attracted an impressive roster of senior executive talent, and at least one startup, eBook Initiative Japan (www.ebookjapan.co.jp), has benefited from it. At around the time they made their presentation to the group, eBook representatives were also trying to get large manufacturers to cooperate on the hardware side of their e-books strategy. As it happened, a Veteran Society member in attendance belonged to a large manufacturer and liked the company's ideas. The result? A significant tie-up between the member's company and the startup. All the middle-men were skipped in an instant, and now the manufacturer is putting an e-reading terminal based on eBook's ideas onto the market.

Yuusuke Suzuki, president of eBook Initiative Japan, says, "Even if venture companies have good ideas or technology, we usually don't get attention from the public. And even if we want to contact big corporations, there are too many departments and we don't know which one we should speak to. But the veterans help us go straight to the right spot. This system could break down the old bureaucratic Japanese company system."

Of course, groups like the Veteran's Society have come and gone before, so no one would be surprised if this one disbanded after the novelty wears off. But, at least while it lasts, it's great to see what are supposedly stodgy old Japanese businessmen getting excited about helping and partnering with young startups. It's definitely a sign of the times.

Members of the Veterans Society
• Head: Shirou Fujita (ex-chair of NTT Data, now counselor for the company)
• Sub-Heads: Masaru Murai (ex-chair of Compaq Computer KK, now special advisor to General Atlantic Partners), Hitoshi Hisata (chair of Uchida Yoko)
• Organizer: Ikuo Nishioka (ex-chair, Intel Japan, now president of Mobile Internet Capital)
Some members from IT industry
• Mikio Otsuki (ex-vice president of Fujitsu, now advisor to Fujitsu Business Systems)
• Haruo Kawahara (ex-senior executive director, now advisor, at Toshiba; also senior advisor to Ripplewood Japan)
• Koji Oboshi (chairman of NTT DoCoMo)
• Seishiro Tsuruho (president of NTT Software)
Some members from non-IT industry
• Tasuku Chino (ex-president of Skylark, now senior advisor to the company)
• Yukio Iura (was at Bank for International Settlements, now leads Nippon Angels Investment)
• Keiichiro Takahara (president of Uni Charm)
• Kichiro Takao (ex-president of Nikko Securities, now counselor to the company)
• Seiro Takehara (president of IMCA)

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