Cross-Cultural Incubator

Back to Contents of Issue: October 2000

by Craig Stephens

eCrossing is betting that world-class management, an innovative incubating model, and plenty of Japan experience will help make it the idealab of Japan.

Taking a cue from idealab in the US, incubator eCrossing aims to internally develop Net companies in underserved sectors. With offices in Tokyo and San Francisco, eCrossing is headed by CEO David Liebreich, former manager at Booz Allen & Hamilton. He's flanked by Oliver Chubb, who handled new business development at Booz Allen & Hamilton, and the board includes Jonathan Epstein of Softbank; Zara Haimo, a founder of Infoseek and executive at WebTV; and Roger Marshall, head of Ray & Berndtson.

Since starting operations in Tokyo, eCrossing has created two companies: iMobile, in the mobile Internet space; and Clickcare, specializing in online healthcare services. "We are currently working on a third company and are studying our fourth," Liebreich says. "We have a long hit list of companies and business models we would like to build." Liebreich says that while there are a number of companies "incubating" startups, eCrossing presents some critical differences. Instead of seeking out entrepreneurs, for example, eCrossing performs the entrepreneur role itself and covers its own startup costs. "Unlike incubating activities such as providing space, advice, et cetera, our focus is on developing the business model and starting and operating the new company," Liebreich says.

The model sounds similar to that of Japan Internet Ventures, which recently started; a readily apparent difference is tGiftken.comhat JIV relies on partnerships between its startups and larger US counterparts.

Softbank's Epstein says eCrossing's approach to market identification and to establishing a series of businesses clustered around Net technologies is innovative. "Clickcare is a prime example -- they recognize that although PC penetration is low among the elderly in Japan, medical care service providers are far more likely to be connected. They take advantage of this fact to build a network of care providers."

But the firm's hike through Silicon Valley hasn't been entirely smooth, and since June a number of defections from both tech and admin staff have occured, described by sources familiar with the situation as resulting from disaffection with senior management. "I don't think either [Liebreich or Chubb] know particularly much about ebusiness," says one source requesting anonymity, adding: "A deep knowledge of ebusiness is vital for what they're trying to do. Neither comes from a tech background."

But Epstein says eCrossing's blend of Japanese and foreigners -- all with extensive experience in Japan -- gives the company a unique perspective on the opportunities available. "I don't really see a comparable in the Japanese market space," he says, "though if I could think of the company with the closest model it would be idealab: apply world class management and marketing principles to long underserved markets."

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