Back to Contents of Issue: November 2000

by Kyoko Fujimoto

LutherSay hello to Luther. In Japan's online trading scene, he's big. His title is ... vague. His meishi reads Corporate Strategy, Japan Online Securities. He's cofounder of, the online trading site run by Japan Online Securities, a venture backed by the monolithic Itochu. Before we go too far, though, let's travel back five years, when Luther -- real name Takumi Usuda -- was doing sales for a home-town securities company. The firm dismissed his idea of creating a Web site for traders, and, frustrated, he started one on his own. It was a great idea.

AT THE TOP OF THE OPENING PAGE OF -- the site that Luther started -- is the following: "This committee aims to get stock investment into a better position, and to get better results of stock investment. Let's work together to have a better investment environment." It says "committee" because kabuko is an abbreviation of "committee of stock investment improvement." Luther -- or, to be accurate, Luther! -- had long felt that improvements were needed in the way Japanese people trade stocks, and the 33-year-old Osakan hoped that his site would help change things. started as a personal Web site, and that's still what it is. Mostly it's just Luther and volunteers writing articles and columns relevant to individual investors. But it's a hugely popular personal Web site, getting about 15,000 accesses per day. "It probably has about as many accesses as the Bloomberg Japan site does," claims Luther. "Right now, Itochu kindly lets me use their servers, but when I was using the server of an ISP," he adds, "they begged me to leave. They had about 200 to 300 personal sites on one server, and accesses to occupied about 90 percent of it."

It's not an exaggeration to say that Japan Online Securities, now one of the top online brokers in the nation, was born out of Luther met Masakatsu Saito, the other cofounder, through this site. Saito was then a systems engineer in a securities company that he strongly felt should go online. In the mid-'90s, though, few in the industry (in Japan, anyway) really cared about the Net or believed what Saito was pitching. He kept making presentations to his boss, however, and eventually eked out approval to establish an online trading system. The company wouldn't do anything to help market the new system, and that's why Saito first contacted Luther -- to ask for help in promoting his site.

They soon realized that they shared all kinds of opinions about Japan's securities industry. Both longed for a better investing environment and wanted badly to do something about it. They decided to join forces in order to establish an online securities company.

Neither of them, however, knew how to start a business, and they both drastically underestimated how expensive the endeavor would be. The one thing they had going for them, however, was deep industry knowledge. What they needed, then, was a big, rich partner that wanted to get into online trading but didn't have their deep industry knowledge. Itochu, a 51-year-old general trading company with a market cap of nearly ¥700 billion, fit the bill. An alliance followed.

Luther decided that they should establish an entirely new venture rather than partner with a traditional -- and inflexible -- Japanese securities firm. While many such firms do now offer online trading, their services, he notes, are based mainly on the same systems they were using for traditional trading, which is why most of them accept orders during only certain hours. What Luther aims to do with is "true" online trading -- 24/7/365, whatever type of orders customers care to make. has created a system called "kabu.navi" that lets customers make not only limit and market orders, but open-price and stop-price orders as well. They're trying to patent the system.

But it's not patents and profits that drive Luther -- it's his need to forever shake up the still-stodgy Japanese securities industry. "Before, securities companies needed authorization from the government, and they were protected by the government," he says. "There was no competition, so there was no need for improvement. Once securities companies start competing, which is slowly happening now, this industry will start growing drastically."

Luther also sees problems with the investors, though, and thinks that many people in Japan have wrong-headed ideas about investing. "Japanese people think that stock investing is like gambling. And many of those who do trade stocks do it in a gambling sort of way," he says. On the other hand, he says, many Japanese haven't gotten the full benefit of post-war economic growth because they've kept their money in banks. "Banks just give consumers a small amount of interest and then lend money with high interest, or invest in stocks to get high returns. That's how banks keep making money. Many stocks in Japan are kept by companies, not by individuals. If individuals had those stocks, many people would have more assets. And the companies owning stocks don't really think about selling them. They don't have 'stockholder awareness.' If everybody, including individuals, owned stocks, people would speak their minds about companies, which would then have to listen to their stockholders. It's like politics: if everybody expresses their opinions through elections, the government has to change."

Speaking of opinions, Luther is an industry pundit. He contributes to the magazines Cyzo, Net Runners, Zai (finance), and Weekly Chart Book. He also serves as an emcee of a radio program called "Luther's Café in Radio Tampa," where he and guests gab about business, stocks, and other topics. And, of course, he writes content for

So, is Luther mega-rich from online trading? "I don't do stocks," he says. "I don't have the money to begin with, and if I was to do it, I would want to have more time to do the research before investing. I would rather do something else if I had the time."

Still, he believes strongly in what he's doing with What makes the site different -- in Japan, anyway -- is that it doesn't just give advice on where to invest; instead, it creates a forum where people can discuss stocks. Without the spam. "Yahoo's BBS has the most accesses and ours probably the second, but Yahoo doesn't manage the BBS and all the messages are posted, including junk ones. In order to form a proper community, good management is necessary. I want to continue providing that, and let everybody know that stock investing is a good thing for growing industries and the economy."

Luther doesn't consider himself an entrepreneur, but rather a philosopher and salaryman. "I'm just doing what I want to do," he says. "Unlike entrepreneurs, I don't stay at the office too late, and I don't care too much about making money."

Sounds philosophical, all right. But when someone leaves a company to create a hugely popular Web site and what becomes one of the top online brokers in the world's second-largest economy, salaryman isn't the word that pops to mind.

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