Report No.26
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Japan Entrepreneur Report No. 26 December 2004
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- Uniqlo CEO favors trial and error
- Innovator of the Year: Rakuten boss takes the cake
- Woman of the Year's watchword: Integrity
- Japan's Entrepreneur of the Year: Empowerment drives success
- Bits and bytes
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Uniqlo CEO favors trial and error
What a difference a single letter can make.
While experimenting with abbreviations of a new brand concept dubbed
"Unique Clothing Warehouse," a graphic designer at apparel seller Fast
Retailing accidentally concocted one of Japan's most potent domestic
brands.
Her English rusty, she misspelled "clothing" with a "q" and truncated the
phrase as "UniQlo" instead of "UniClo." Marketing staff instantly
recognized the coined word's power, and the "Uniqlo" brand
(www.uniqlo.com) was born.
Happy mistakes like this are vital to Fast Retailing CEO Yanai Tadashi,
who today presides over a chain of more than 600 Uniqlo stores in Japan,
plus half a dozen each in the U.K. and China. Yanai believes management
is a series of trial and error experiments, and that failures carry the
seeds of success. He explains his theory in a book whose title in English
might be rendered as Nine Defeats, One Success: The Uniqlo Management
Philosophy.
What inspired the CEO to grow Fast Retailing from a small regional chain
into a nationwide behemoth now expanding into China? Yanai says it was a
successful case study that validated his initial idea--and that
entrepreneurs can find one in every field.
"In business, there's almost nothing new under the sun. You find
predecessors in every area," Yanai writes. "I loved American culture when
I was youngcin the 1980s U.S. retailers like the Gap and Limited Brands
were growing quickly...I believed a [retail apparel] business like the
Gap was possible in Japan as well."
Yanai went on to become a retailing pioneer, earning a permanent place
within Japan's tradition of great entrepreneurs. Today he devotes more
time to helping up-and-coming businesspeople, and this year he served on
a panel of judges charged with selecting the nation's top innovator.
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Innovator of the Year: Rakuten boss takes the cake
Sometimes the guy you think is a spammer is really a superstar.
In 1995, I started a Web site designed to help Japanese consumers with
international mail order and direct import transactions. The service
attracted some media attention and a modest but loyal consumer following.
A few months after the launch, I started getting e-mail solicitations
from a guy named Mikitani who said he was assembling an online "mall of
malls" in Japan, and wanted us to join.
Mikitani's entreaties were enthusiastic, but we were focused on building
a different kind of site, and we soon got in the habit of scuttling his
surprisingly persistent messages without reading them.
Now, nine years later, Mikitani runs Rakuten Ichiba (www.rakuten.co.jp),
Japan's most successful online shopping site, boasting name recognition
second only to Yahoo Japan. Mikitani himself is worth hundreds of
millions of dollars, and his online empire extends to travel, finance and
a host of other sectors.
Rakuten is pursuing off-line ventures as well; last month Japan
Professional Baseball officials approved Mikitani's proposal to create
the nation's first new professional baseball team in 50 years. Earlier
this year Rakuten invested in a leading Chinese online lodging
reservation service and Mikitani says he has plans for other forays
overseas.
Small wonder Nikkei BP's panel of judges--including Uniqlo creator
Yanai--awarded Mikitani its 2004 Japan Innovator Grand Prize last month.
This month, a different Nikkei publication celebrated yet another
entrepreneur.
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Woman of the Year's watchword: Integrity
Despairing over lack of income from her two-year-old business, Akiyama
One drew new faith from an unexpected source one day: her elementary
school-aged daughter.
"You're doing something good, so you can't quit your company," the girl
said.
Galvanized by the youngster's words, Akiyama pressed ahead with IntegreX
(www.integrex.jp), an investment advisory and research firm that
specializes in identifying socially responsible companies. Years later,
she found herself rewarded--with a thriving business and the Woman of the
Year 2005 prize from Nikkei Woman magazine.
Weary of the dog-eat-dog world of financial capitalism, Akiyama left a
successful 18-year career as a bond trader in 2001 when she discovered
the concept of socially responsible investment (SRI), which seeks to help
society prosper over the long term by investing in companies with high
integrity.
SRI was something new to Japan, and Akiyama found it personally
compelling. She also saw that it offered consumers a positive, easily
understandable criterion for selecting companies in which to invest. At
the same time, there was solid capitalistic logic behind investing in the
companies IntegreX deems socially responsible: their share prices are
less likely to crash due to scandal or lawsuits.
There's more upside for IntegreX ahead. Japan is ripe for consulting
services to help companies achieve corporate social responsibility (CSR)
accreditation, something closely related to SRI. Some industry insiders
say CSR accreditation may eventually acquire the punch of ISO
certification. Analysts estimate that mutual fund managers worldwide
allocate between one-tenth and one-eighth of all their money--trillions
of dollars--to CSR-accredited firms. IntegreX is ideally positioned to
offer such services in Japan.
That will give Akiyama the opportunity to do even better by doing
something good.
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Japan's Entrepreneur of the Year: Empowerment drives success
Sakamoto Takashi opened his first used bookstore at age 50, thinking that
with luck, he might eventually expand his chain to 30 stores. Fourteen
years later, the 64-year old Sakamoto has 791 Book Off! stores in Japan
and nearly every consumer of reading age recognizes the franchise's bold
blue and yellow marquee (www.bookoff.co.jp).
Last month the local chapter of Ernst & Young's global Entrepreneur of
the Year (EOY) organization named Sakamoto Japan's 2004 Entrepreneur of
the Year. The EOY annual award program has been running for almost two
decades.
"What I'm happiest about is that the New York store, which we launched
five years ago, continues to be profitable today," Sakamoto said in an
interview with the EOY Japan association. "Every employee can become a
'manager' by having the authority to determine procurement and selling
prices and by actually buying and processing books themselves. Even the
profitability of the overseas stores is due, I believe, to the Book Off!
system whereby every employee becomes a manager."
Since I last wrote about Sakamoto, Book Off! has added more than 160 new
stores (some of Sakamoto's success secrets appear halfway through the
article starting at <www.japanentrepreneur.com/200302.html#1>). What's
more, he's launched an additional 100 "recycle" stores under separate
franchises selling everything from sporting goods to kimono to personal
computers and home electronics.
Congratulations to Sakamoto, his proteges and his colleagues--we'll look
forward to more innovation in 2005.
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Bits and bytes
Favorite entrepreneurial T-shirt slogan spotted this holiday season: If
you're not dreaming, you must be asleep!
Why would a foundering candy maker hire European soccer star Nakata
Hidetoshi as Chief Branding Officer, yet not feature him in television
commercials? The Entrepreneur Association of Tokyo has the answers at
<www.ea-tokyo.com/resources/seminarsummaries/2004/december.html>.
Have a serious student of Japanese in the family? Check out must-have
dictionaries, top-notch study guides and the coolest Japanese language
learning aids at Rolomail. They make great stocking stuffers--well,
better make that New Year's gifts...See <www.rolomail.com>.
Happy Holidays!
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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