Report No.25
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Japan Entrepreneur Report No. 25 November 2004
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- Asia's entrepreneurs in Silicon Valley
- Network helps Japanese entrepreneurs thrive
- Sakamoto Akio locks down intellectual property
- Bits and bytes
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Asia's entrepreneurs in Silicon Valley
They run companies with names like NuCORE Technology, Improvista, Fujin
Entertainment, Nozomi Photonics, Muse Associates, KeyEye Communications,
Pixela and BaySpo.
Many are Ph.D. engineers and alumni of Japanese behemoths such as NEC,
Nippon Steel and NTT.
All found a new home in Silicon Valley, where balmy weather, casual dress,
laid-back socializing and top-notch technical universities breed a
culture of meritocracy, respect for diversity, fair opportunity, and
above all--dazzling technology.
These are Silicon Valley's Japanese entrepreneurs; a new breed of
freethinking, world-leading technologists toiling on the frontiers of
electronics, information technology, telecommunications and medicine.
Only world-class performers make the grade here.
Yet Japan's entrepreneurs are latecomers to Silicon Valley's melting pot.
While the resident Indian and Chinese entrepreneur associations boast
more than 20,000 and 5,000 members, respectively, the Valley's single
Japanese entrepreneur association has only 2,200 registered members. Why
the gap?
One view holds that the current wave of Silicon Valley's Asian
entrepreneurs began with an influx of Indian and Chinese engineering
students in the 1980s. At the time, Japan's strong economy exerted a
powerful pull on talented young engineers, who, like their Chinese and
Indian counterparts, might otherwise have been attracted to work in the
U.S. The result is playing out now, a generation later.
To learn more, I talked with Soga Hiromu, founder of the Silicon Valley
Japanese Entrepreneur Network (www.svjen.org).
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Network helps Japanese entrepreneurs thrive
"Most of today's Indian entrepreneurs came to Silicon Valley in the 1980s
as students attending Stanford or Berkeley," said Soga Hiromu, SVJEN
founder and CEO of ringtone startup Improvista. "They landed in the
United States with a grand total of eight dollars in their pockets--the
official Indian government allowance. Their only option was to study hard
and do anything they could to survive."
Five or six years later that allowance was raised to only $24, so the
Indian students remained hungry--in every way. Once they graduated and
found jobs, they were inclined to stay in the U.S.
In contrast, says Soga, nearly every Japanese student who studied at
Berkeley or Stanford was employer-sponsored. They represented their
companies while studying and were obligated to return to Japan after
graduating.
"Even though they learned about interesting technologies and
entrepreneurial ways in Silicon Valley, they had to return to Japan,"
said Soga. "And after going back, their companies 'killed' them by
insisting they re-socialize within the company as ordinary workers."
Meanwhile, most non-student Japanese--like Soga himself--first traveled
from Japan to Silicon Valley to set up local subsidiaries or research
organizations. Soga tried repeatedly to create new, entrepreneurial
spinoff divisions on behalf of his employer, but was repeatedly rebuffed.
Fed up, he became a serial entrepreneur and launched a string of
successful companies, the most recent of which was bought by Apple
Computer.
Driven by a desire to serve younger entrepreneurs as a mentor, two years
ago Soga founded the Silicon Valley Japanese Entrepreneur Network,
patterning it after TiE (www.tie.org), now the Bay Area's largest
entrepreneur organization. TiE stands for "The Indus Entrepreneurs,"
reflecting the South Asian background of the individuals who chartered
the organization in 1992.
Just last week SVJEN held its second organizational meeting with TiE
executives. The two groups plan to forge a pan-Asian entrepreneur
network and hold their first joint event in fall 2005. Ethnic roots are
maturing into a global tree that includes a growing number of
entrepreneurs from Japan.
"The number of Japanese entrepreneurs in Silicon Valley is definitely
increasing," Soga said. "A big culture gap remains, but the Japanese
mindset is becoming more sensitive to startups."
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Sakamoto Akio locks down intellectual property
Sakamoto Akio is a database security specialist and Silicon Valley
entrepreneur taking advantage of skyrocketing demand for leading edge
security and anti-intrusion technology. IPLocks is his second venture-
backed startup. We enjoyed an e-mail "chat" over several days as he flew
back and forth between the Valley and Japan.
- You had a long and distinguished career in Japan's information
technology sector. Why did you decide to stay in Silicon Valley and
follow the entrepreneurial path?
Every Silicon Valley company, including startups, targets the worldwide
market to sell its products and tries to establish itself as the defacto
world standard. That's the reason Silicon Valley leads the world. I
wanted to join the game. It's like all the people in Silicon Valley are
working hard to win an Olympic event rather than just a company contest,
city tournament or national championship.
- In words a 12-year-old non-techie can understand, what does IPLocks do?
Why is the product important and who will buy it?
A bank has a vault and a vault room. The vault is protected by a key to
the vault room and a key to the vault itself. However, they are not
enough to protect against criminal acts by insiders who can use the keys
or a professional burglar. The bank keeps a guard inside the vault room
and video cameras to watch people who enter the vault.
A database is like a vault; it keeps the most important information.
IPLocks has developed a product similar to a guard and video camera for
the database to secure the information businesses rely on.
The average cost of an external break-in is approximately $60,000, while
the average cost of an internal breach or theft is $2.7 million,
according to an FBI Survey. And more than three-quarters of perpetrators
are authorized users such as employees or vendors, according to Secret
Service and Computer Emergency Readiness Team (CERT) reports. IPLocks
offers a sound solution for dealing with internal threats that
traditional database and network tools don't address.
IPLocks safeguards information assets. Unlike database access security
and data auditing solutions, IPLocks monitors and protects hundreds of
cross-platform databases with a single implementation.
For techies, the IPLocks platform is "an agent-less, transparent, and
non-invasive approach to end-to-end database security, automating
business and security processes while capitalizing on inherent Database
Management System capabilities. It ensures customer, financial,
regulatory and employee data integrity and security by proactively
detecting, alerting, tracing and responding to inappropriate behavior."
- That's a mouthful. What relative weights do Japan and the U. S. occupy
in your marketing plans?
Currently, IPLocks puts 80% of its resources into the U.S. market and 20%
into Japan. Eventually, we'll migrate to 50% for the U.S., 25% for Europe
and 25% for Asia.
- India and Chinese entrepreneurs vastly outnumber Japanese entrepreneurs
in Silicon Valley. Why?
The U.S. struggled for ten years between 1982 and 1992 to transition from
the industrial era to the information era. Japan has had 12 years of
recession from 1992 to 2004. I believe Japan's recession results from its
own transition to the information age.
- Why are there still relatively few Japanese entrepreneurs in Silicon
Valley?
I believe most Japanese are more comfortable living and working in Japan
because the U.S. standard of living is not attractive enough. And I think
this will be true for the future as well because Japan has quite enough
products and technologies to lead worldwide markets. However, small and
mid-sized companies in Japan should shift their targets away from giant
domestic companies and toward worldwide markets.
- Where do you see IP Locks going over the next five years?
IPLocks' goal is to continuously pursue "Data Protection" technologies to
provide information integrity, security and compliance solutions to
customers worldwide. IPLocks exit strategy is not M&A. IPLocks will
become a global company with hundreds of million dollars of revenue.
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Bits and bytes
Looking for the entrepreneurs of the future? Most members of the Japanese
Technology Professionals Association are salaried employees, but many are
no doubt SVJEN candidates. You can check out their Web site at
<www.jtpa.org>.
Here are some related Silicon Valley resources: Japanese American Chamber
of Commerce of Silicon Valley (www.jaccsv.org), the Keizai Society
(www.keizai.org), Japanese Chamber of Commerce of Northern California
(www.jccnc.org) and the Japan Society of Northern California
(www.usajapan.org).
Back in Tokyo, Tohato President Joe Hemmi will describe his work
revitalizing the Japanese confectioner. It's all happening at the
Entrepreneur Association of Tokyo meeting Monday December 6. See
<www.ea-tokyo.com> for location and details.
After enduring two hours of haranguing by male managers about why her new
business idea wouldn't work, Sasaki Kaori knew she had a winner.
Jonathon Walsh explains why at the EAT Web site. See
<www.ea-tokyo.com/resources/seminarsummaries/2004/november.html>.
Tim Clark
Senior Fellow (non-resident)
SunBridge Corp.
Voice (U.S.) 503.235.4419
Fax (U.S.) 503.235.4429
clark@sunbridge.com
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