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Second Life parody in Japanese March 26, 2007

Posted by fukumimi in Internet, Japan.
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via Darren Barefoot

The English version is funnier, but in any case, a Japanese version of Get a First Life is here. I thought the English version was genuinely funny when it came out.

The Japanese version of FL is of course already available, contrary to what the site says, for starters.

I guess it is timely given that the Japanese media coverage of Second Life has become somewhat more restrained and measured of late. On a related note, it is being reported that the Japanese client for Second Life is going to be released next month….

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Thank you to everyone who came to the PCC meetup March 16, 2007

Posted by fukumimi in Economy & Business, entrepreneurship, Japan, VC.
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A big thank you to everyone who attended the PCC event on Wednesday.

The speaker was my colleague Rei Uno, who gave a talk about the Japanese VC scene and how to engage with Japanese VCs, including tips for writing a business plan which will be well received by Japanese VCs.

Another colleague and I who are regular punters at the Pink Cow decided to go along to see how he would fare, and we were pleasantly surprised at the turnout.

It is great that so many people are giving thought to doing their own thing, and I hope that the talk (and the mixer afterwards) was of some value to the attendees.

I ended up making an unscheduled appearance when Rei somehow got me involved in answering the questions from the floor in the Q&A session. I hope people weren’t too disappointed that they got my opinions on the questions posed rather than those of my colleague….

There were some pretty interesting questions being asked at the Q&A:

What is the difference between the Japanese and US VC models?

[Ans: If you look at the history of the Japanese VC model and the background of the major VC players, you soon realise that the traditional Japanese VC is something quite different from the US (SV) VC model. But things are changing as business practices and competition become more global. Japanese VC is changing, or at least diversifying, in the business models it employs.]

There seems to be a lack of Japanese VCs who really understand technology?

[Ans: Again, traditionally, that was indeed the case, with most of the major VC firms being affiliates (to one degree or another) of stock brokerages, commercial banks and goverment agencies, and the human resources at their disposal were limited, given the traditional lack of liquidity in the human resources market. But again this is changing, with VCs recruiting from industry (people like me), and with boutique VCs also springing up. Most of the top Japanese VC firms are large organisations, and as with any organisation, there are many different types of professionals within the organisation. The key is to find the right person to take your idea to. Stop thinking about the VC firm, and think about the individual VC.] [I thought about this question a bit more afterwards, and I think that the questioner may have some misconceptions about how we evaluate businesses. I wouldn’t say technology is not important, but I think many entrepreneurs overestimate the importance and superiority of their technology or technological skills, and the correlation between focus on technology and business success. I know that some entrepreneurs complain about the fact that VCs focus on issues which they feel to be peripheral, but we do that with justification. Our experience tells us, especially in Japan, that many businesses fail due to issues other than technology. Lack of financial planning, lack of sales/marketing ability, lack of corporate discipline in other areas, etc. It is our duty to point those out and inject some reality into many a technological daydream. The aim of a VC is to invest in a COMPANY, and help make that company successful so we can cash out and return money to our investors. I certainly only invest in businesses where their goals are aligned with ours.]

Don’t VCs stack the odds in their favour with preferred stock structures?

[Ans: That is indeed the US VC model, and although it does happen in Japan too, the reality of the Japanese VC model is that currently the vast majority are common stock investments. (certain investment heavy sectors are more likely to feature preferred structures) There are signs that preferred structures are on the increase, but it is still a small minority of deals which see such structures in place. I personally think that barring a severe downturn, there will be VCs willing to continue using an ordinary stock model, and it is up to the entrepreneur to decide which set of terms and which VCs they want to work with. After all, no one is forcing them to take our money. But this ordinary vs preferred issue has to be understood in context, such as the fact that historically structuring preferred stock was subject to various limitations which made it difficult in practice to use the structure effectively. The small average size of investments is also probably a factor which has prevented VCs pushing for preferred stock and the associated liquidation preference, as is the lack of much M&A activity.]

It was nice to meet several readers of my blog too. The entire Tokyo based readership of my blog was probably there, lol.

Anyway it was nice to see so many enthusiastic people, and it prompted me to think seriously about various initiatives I have been thinking about. Creating a venue for entrepreneurs to meet with each other and with investment professionals in a casual environment is something I’ve wondered out loud before, and the event just reinforced my feeling that Tokyo is ready for such an initiative.

In the meantime, I’m working on what I think will be another very interesting meetup (meetups?) in May. Stay tuned.

Horie gets two and a half years March 16, 2007

Posted by fukumimi in crime, Economy & Business, Internet, IT, Japan.
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So, the Tokyo District court has handed down a sentence of two and a half years to Takafumi Horie, the disgraced ex-CEO of Livedoor.

Horie had been charged with being actively involved in Livedoor’s false accounting and market abuse (manipulation of its share price by disseminating false or misleading information). The court ruled that Horie was guilty on both counts.

Horie is appealing his sentence.

More thoughts to follow…

Mobile game and SNS site tops 4 million users March 13, 2007

Posted by fukumimi in games, Internet, Japan, Mobile, Shopping.
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mbga.jp, the mobile phone portal offering games, avatars and social networking, has announced that has exceeded 4 million users on March 10th. mbga.jp is run by DeNA,  a rival for Rakuten in the retail e-commerce sector with its virtual shopping mall and on-line auction services, and run by ex-McKinsey consultant (Ms.) Tomoko Nanba.

The portal opened its doors last February, and mbga.jp seems to be the front runner in the games and SNS sector, as far as dedicated services for mobile phones are concerned.
This is reflected in the age of its users, more than half (56%) are aged 19 or below, with another 32% of users in their twenties.  Mobile phones are becoming the major device from which younger users are accessing the internet, according to a Netratings report published last November. Over the last 6 years, the percentage of people in their twenties who access the internet from a home PC has plummeted from 23.6% to 11.9%, which is barely above the percentage of people in their fifties. Interestingly, the percentage of people in their thirties who access the internet from a home PC has also declined (from 27% to 24%), whereas the 40+ age groups all saw an increase. The ~19 age group has increased from 17.3% to 20.9%, but even this growth is lower than that seen by the 40~49 age group, who went from 19.5% to 24%, tying with the 30~39 age group as the most active users of the internet via their home PC. Facta has an interesting article which details the statistics quoted above in graphical form (in Japanese only unfortunately), which notes that younger people, especially once they start working, are less and less exposed to a PC, a trend which may result in another digital divide between users who can use a PC and those who rely more heavily on their mobile phones. But the numbers do bode well for services which target the mobile phone, especially with regards to a younger user group. The current teenagers and twenty-somethings are likely to take their behaviour with them even as they grow older.

The success of mbga.jp and the fact that it has survived competition against players like Rakuten and Yahoo! Japan in the PC web based businesses it runs is reflected in the share price for DeNA, which has steadily risen since the IPO in early 2005, in contrast to many of the hyped internet IPOs. The company is current valued at JPY181B, or a little over $1.5B, which must make Nanba-san the most successful female Japanese internet entrepreneur.

And in contrast to many of the internet entrepreneurs who have hit the jackpot bringing overseas business models and simply localising them for the Japanese market, mbga.jp has the potential to be a model which can be successfully exported elsewhere. Nanba-san is better qualified than most to make DeNA a global leader in mobile content, with her McKinsey and Harvard MBA background.

VC related event tomorrow March 14th March 13, 2007

Posted by fukumimi in Japan, VC.
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Sorry for the short notice, but a colleague is giving an english language presentation on the Japanese VC scene tomorrow, if anyone is interested.

I’ll probably be sitting at the back with my beers smokes heckling the speaker and asking awkward questions at the Q&A. (if I don’t get dragged into helping my esteemed colleague out, that is)

It’s at the Pink Cow in Shibuya (on the Omotesando side), and admission is free, save for the drinks you should buy at the bar to keep the Pink Cow’s lovely owner happy.

Details below: (courtesy of CVP’s events calendar)

When Wednesday, March 14, 2007, 7 – 10pm
Where The Pink Cow, 1-3-18 Shibuya (www.thepinkcow.com)
Notes

A Getting Started Guide to Venture Capital (Pink Cow Conspiracy)
Rei Uno, Mitsubishi-UFJ Capital Co., LTD

The economy is booming. Is the entrepreneur in you pushing you to get up and run with your latest idea? Need some money to get started? Then it may be useful to have an insider’s guide to venture capital. The presentation will cover:

– What’s venture capital (VC)?
– VC equity finance versus Bank’s debt finance
– VC funding in Japan
– Major VC players in Japan
– How much is your company worth?
– How do you contact VCs
– How to get money from VCs
– Some checkpoints on your business plan

DATE: Wednesday 14th March
TIME: Open 7.00, Presentation 7.30-8.30, Networking 8.30 ’til late
COST: FREE entry, but please by a drink to support the venue. Delicious a la carte menu also available at reasonable prices/
VENUE: The Pink Cow, 1-3-18 Shibuya (www.thepinkcow.com)

More www.thepinkcow.com

Being a boozer (of sorts), I like evening events where I can drink something stronger than coffee, but I’ve been watching Saul Klein’s Open Coffee Club events picking up momentum and spreading globally, and have been wondering what kind of interest there might be for an informal meeting place for people related to the venture scene in Tokyo. I look forward to attending the London event on my next trip to the UK to pick up tips and to retain the flavour of the original efforts.

There are a whole bunch of business networking events and the like in Tokyo, but many which appear to be of rather dubious provenance, and I believe that getting attached to the wrong sort of people can kill an young company’s chances of success. I am also well aware of the Japanese VC industry’s weaknesses, and feel that sharing information is the best way to improve the situation for both venture businesses and investors alike, so a Tokyo version of the Open Coffee Club is something I’m going to look at doing with other people who share the same vision.

(I can vouch for the PCC/CVP events being legit, having attended in the past and knowing the people behind them)

Sony does Second Life for PS3 March 9, 2007

Posted by fukumimi in Economy & Business, electronics, Internet, IT, Japan, technology.
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A welcome bit of positive publicity for Sony, with their announcement of Playstation Home, the 3D virtual world for the PS3 platform having received a warm response in much of the reporting around this new service.

I’m not the best person to ask about this kind of stuff as I much prefer interacting with other people in a real physical environment (preferably with alcoholic drinks in hand), but I think this idea may have legs.

Second Life has been receiving plenty of media coverage here in Japan over the last few months, but the media response is shifting. To begin with it was all about how amazing and revolutionary the concept was (which is pretty amusing for anyone who has been around for a while in the space), but now we are seeing some articles (like this one in Japanese) beginning to question the concept and its viability especially in Japan. (from pretty much the same people who were cheerleading before, lol)

A big problem the media has apparently just noticed is the language issue, and the miniscule number of Japanese language users populating the site. Now there’s a surprise.

More fundamentally, Second Life pretty much requires a decent desktop PC with decent graphics card. The reality of PC sales in Japan is that laptops are much more popular even with regular users, what with us Japanese all living in rabbit hutches and paper houses. Further, the gaming market has been dominated by games consoles, and PC gaming is a much smaller niche market than in the US, which means that high spec desktop machines are just not as popular. The net result is that many users are unable to access Second Life, and such people aren’t going to buy a high spec machine just to get onto Second Life.

The Playstation Home on PS3 eliminates the hardware barrier to entry (ok, you need to buy a PS3….). Consumers (especially the non technical ones who would run away screaming at the prospect of having to know what CPU/GPU/RAM specs are for their PC to ensure Second Life compatibility) are guaranteed that any PS3 (with a decent broadband connection, something which is pretty much ubiquitous here in Japan) will be able to run Playstation Home. PS3 owners have a minimal barrier to entry to Playstation Home, and this is something which cannot be underestimated. The fact that the Home environment will apparently be localised for local tastes (the Japanese version was created by Bandai Networks and is more touchy-feely/”cute” than Second Life, but the graphics will likely be changed for other locales (and perhaps even demographics?))

The games within Playstation Home apparently include things like bowling and billiards. I know that the Wii would have difficulty rendering a 3D landscape at anywhere near the PS3 level, but Wii Sports in a networked Wii virtual world with on-line buddies would be pretty damn cool, I think.

Lenovo battery recall…. March 2, 2007

Posted by fukumimi in Economy & Business, electronics, IT.
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205,000 batteries this time, manufactured by Sanyo’s Li-ion battery subsidiary. (Yomiuri)

Sanyo claims the batteries were custom manufactured items for Lenovo and does not expect other customers to be affected.

Couldn’t have come at a worse time for Sanyo, who are currently busy working to rework financial figures for upto the last 4 years having been accused of false accounting amounting to hundreds of millions of dollars….

Kick them when they’re down…. (Asahi article)

Another news item about Sanyo batteries in mobile phones from Sanyo and Kyocera apparently expand alarmingly due to a power management software problem. Said software was developed by Sanyo and Kyocera.

When it rains, it pours, I guess….