Taking risks ‘will make Japan great again,’ says Uber investor

Launch Partnerships founder Jason Calacanis / Photo credit: Tech in Asia / Michael Holmes

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Last week, a conference room in downtown Tokyo was buzzing with excitement. The audience was waiting for Jason Calacanis, an American entrepreneur, author, and angel investor who’s best known for being one of Uber’s earliest backers.

Among those in attendance were Japanese entrepreneurs and investors as well as employees from big corporates and government officials. For many of them, their lives – both personal and professional – are anchored in a risk-averse culture.

But it seemed like Calacanis wasted no time in challenging that norm.

“Fear of failure is honorable here, but the culture of failure must come to Japan if it wants to make the society great again,” he said, mincing no words as he spoke onstage at Tech in Asia Tokyo 2018.

nTo corporates: Go globaln

Calacanis believes that compared to several decades ago, Japan’s corporate giants are taking fewer risks and international forays today.

“We don’t see too many Japanese companies coming to America – at least not like we used to,” the investor observed.

He continued, “There was a period of time when Americans were a little bit scared of how quickly Japanese products were coming to America: Sony, Nintendo, Honda, et cetera. And we’ve been so inspired by the Japanese people, culture, products, and the Japanese way of doing business, like kanban.” The term refers to a scheduling system for lean manufacturing and “just-in-time” production.

n[T]he culture of failure must come to Japan if it wants to make the society great again.n

By staying put, Japanese firms are letting opportunities slip away, according to Calacanis. While the US loves to export its culture like music and films, the Japanese don’t, even if Americans are in fact “obsessed with Japanese culture.”

“Whether it’s anime, video games, cars, or food… and fashion for sure. I think they are playing too conservative.”

Companies have more compelling reasons to go abroad today, he added, as building a global business “is now very easy because of the internet.” With a few clicks, one can advertise their products through global services like Facebook and Google, for example.

nTo the rich: Back startupsnn

Reed Stevenson, editor, Bloomberg (L); Jason Calacanis, founder, Launch Partnerships / Photo credit: Tech in Asia / Michael Holmes

Japan’s affluent class is also playing it safe, Calacanis argued.

“You have many rich people here in Japan who look at their phones and see some very large bank balances. Those are just some numbers on the servers. They don’t actually exist in reality,” he observed, his voice rising.

“If they were to put that money into startups,” Calacanis pointed out, instead of buying cars, clothes, trips, or houses, “Japan’s economy would be growing much faster.”

In his view, startups are generally good for society as they tend to create jobs and solve real-world problems more efficiently than religious organizations, governments, and non-profits.

nBy staying put, Japanese firms are letting opportunities slip away.n

There’re also financial reasons for why deep-pocketed individuals should consider venture investing: They could get a greater return out of their “dead money,” which would otherwise “sit there and do nothing,” suggested Calacanis, who saw Uber’s valuation surge 18,000 times since he first bet on the ride-hailing startup.

“If [the investment] doesn’t work out, who cares? A rich person losing US$10,000 is like a typical person losing US$100,” he said.

nTo founders: Think biggern

Calacanis’s last target was Japanese founders.

He assured the audience that building a technology startup has never been so easy. Toady, information and knowledge flow freely on the internet and people are creating products using open-source software.

“Anybody can do it. It’s not like the US has a lock on any one technology, or Japan, or China. Now it’s a race of entrepreneurs and how bold they are,” said Calacanis.

The deep-rooted reason for Japan’s risk aversion, he argued, is the country’s “very functioning ecosystem.” Founders have been comfortable with the pattern: Raise a couple million dollars, go public, and cash in.

See: Peter Thiel’s Asia fund to Japanese startups: Stop thinking local

“But there’s another level of startups, which is what Sony, Nintendo, Uber, Facebook, and Google did – take over the planet,” Calacanis said.

He went on to use a “fiery” metaphor to describe Japan’s startup scene. “When you build a fire, sometimes you get really hot coal, and you think the fire is dead because it just looks like a bunch of coal. But when you put a log on it, it goes right up.”

When asked what verticals in Japan had potential, Calacanis picked augmented reality and robotics. The booming gaming and mobile markets also hold promise.

“People here are addicted to Twitter just like Americans are,” he observed. “Social networks are still growing. The smartphone revolution [makes you] feel like everything that can be done, has been done. It’s not even close to true. We are maybe half way done with the smartphone revolution.”

This is part of the coverage of Tech in Asia Tokyo 2018, our conference which took place on September 20 and 21.