Mon, Feb 06, 2012 - Page 9 News List

Japanese entrepreneurs aim to make it big in Silicon Valley

One young Japanese entrepreneur said there are now mentors encouraging them to strike out on their own

By Tomoko Hosaka  /  AP, TOKYO

Illustration: Yusha

For an emerging generation of Japanese innovators, the dream is not a job for life at a big company. They have new ambitions, and are determined to go places. Especially Silicon Valley.

Small, but growing numbers of Japanese entrepreneurs are jumping into the startup scene in northern California, particularly since the earthquake and tsunami last March. They include Naoki Shibata, who took the plunge by giving up the sort of life many Japanese in past decades spent their lives trying to attain.

Only 30, Shibata had an executive-level position at online retailing giant Rakuten and an assistant professorship at the prestigious University of Tokyo, where he earned a doctorate. In June last year he launched AppGrooves, an iPhone application discovery tool.

“I wanted a global company from the first moment,” he said. “If you want to reach a global market, then you have to start from Silicon Valley.”

Shibata and others say they are seeing a major uptick in Japanese entrepreneurs migrating to Silicon Valley or seriously contemplating a move, as their country struggles with two decades of economic stagnation, and a rapidly shrinking and aging population.

Some venture capitalists believe the earthquake, tsunami and the nuclear disaster that followed compelled many Japanese to take an increasingly uncertain future into their own hands.

“Whenever there is a natural disaster, people are pushed and pressed against the wall,” said Annis Uzzaman, one of the founders of California-based Fenox Venture Capital. “And they want to come out as No. 1.”

Attorney Yoichiro Taku, a partner at Silicon Valley firm Wilson Sonsini Goodrich & Rosati, has taken on AppGrooves as a client, as well as Japanese-founded social network startups Wondershake and Mieple. Taku, who has among the most active startup practices in the US, said it is the most Japanese startup traffic he has ever seen in his Silicon Valley career.

More than the earthquake, Taku believes the trend has more to do with the sprouting seeds of entrepreneurship in Japan, cultivated by the emergence of Tokyo-based incubators like Open Network Lab and Samurai Incubate. Some will naturally want to aim bigger.

“It is like Ichiro Suzuki wanting to play in Major League Baseball,” Taku said.

Shibata also suggested that it is just easier to be offbeat in the US.

“The biggest difference between Silicon Valley and Japan is when I hack something in Japan, I’ll be punished first,” Shibata said of making unscripted modifications. “But in Silicon Valley, when I hack something, I will be encouraged to do more.”

Technology and innovation have long been sources of pride in Japan. The country’s phenomenal economic development in the 20th century was fueled by visionary entrepreneurs and industrialists whose ventures are now some of the country’s most well-known brands like Sony Corp and Panasonic Corp.

However, as Japan grew into one of the world’s biggest economies, it seemed to lose its pioneering spirit. Business leaders, officials and academics in recent years have blamed the country’s dearth of entrepreneurship on a mix of social and structural factors that constrict new innovators.

The Japanese, they say, have become risk-averse, opting to stick to the safety of lifetime employment at established companies. Venture capital is scare. Exits in the form of mergers and acquisitions or initial public offerings are too difficult.

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