Situation and recent trends of web startups in Japan @ Asiajin Shanghai meetup
1. Situation and recent trends of
web startups in Japan.
Shunichi Arai
CTO, Mogura Inc.
2. Shunichi Arai
• Entrepreneur
– Developing a business-card
management software as a
service.
• Blogger
–Asiajin.com (亜州人) –
the best English blog on
Japanese IT
10. Today’s agenda
• Brief Summary of Japanese IT industry
– Internet
– Mobile web
• Most powerful websites in Japan
• Startups in Japan
– Summary
– Regulations, rules and norms
– Examples of Japanese startups
12. Facts of Japanese IT Industry
• No globally successful • Total market size:
software company. 205 billion USD.
– Same as most countries. • 857,877 people in IT
• 95% of Japanese companies workforce.
software companies are • 186 public companies.
in consultation business.
– Consultation and
development services.
14. Japan Internet history
• 1984: JUNET
– Japan University Network
– UUCP connection (Mail / Netnews)
• 1988: WIDE project
– TCP/IP network
• 1992: IIJ
– Japan’s first Internet Connection Provider
• 1996: Yahoo! Japan
– Still, Japan’s number one website
15. Mobile Web
• 92% of cell phones are 3G in Japan.
– 3G was started in 2001.
• Now, Japanese mobile web are split into
iPhone and Japanese phones.
• Japanese phones have:
– HTML-based Web browsers (limited capability)
– Huge incompatibility between 3 carriers
• Completely incompatible with rest of world
– Lots of useful / useless features
16. Features of Japanese phone
• Payment • Internet email (push)
– Credit card • Java application
– Public Transportation • Mobile Web browsing
– Prepaid card – Web payment
– Discount Coupons
• Video phone
• Television
• Infrared communication
• Lots of emoticons – For exchange numbers.
• Decorated email • Of course, music player,
(kind of greeting card) camera, calculator, etc…
18. Most Powerful Web companies
• Companies over $10bn. valuation
– Yahoo! Japan (Portal and many)
– Rakuten (B2C marketplace and many)
– DeNA (Mobage town, mobile social game)
– Gree (mobile social game)
– Kakaku.com (price comparison)
– Matsui Securities(online stock broker)
– Monex (online stock broker)
• Other important companies
– Mixi (SNS)
– Dwango (Mobile games and NicoNico Douga)
19.
20. • Number one web site.
• 48 billion page views / month
– 7.8 billion from mobile
• Auction
– 22 million items (avg.)
• Revenue: 279 billion yen
• Net Income: 83 billion yen
21. Softbank
• Valuation: 26 billion USD
• 3rd largest mobile phone operator.
• Yahoo! Japan’s major shareholder.
• Alibaba’s shareholder.
• And many other businesses.
22. Softbank
• Founded by 孫正義 (Masayoshi Song)
• Richest person in Japan
• 1981: Founded
• 1996: Yahoo! Japan founded
• 2001: Yahoo! BB (ISP)
• 2005: Baseball team buyout
• 2006: Vodafone buyout Softbank mobile
• Very aggressive sales & buyout
23.
24. Rakuten Ichiba
• Japan’s biggest B2C market place.
– 106,448 shops.
– 61 million items.
• Revenue: 298 bn. yen
• Net Income: 52 bn. yen
• Many other powerful businesses
– Rakuten Travel (No.1 hotel reservation site)
– Rakuten Securities
– Linkshare
25.
26. • Biggest SNS site in Japan
– 19 million users
– 33 bn. monthly page views
• 5x mobile accesses
• Founded in 2004
– Mini blog feature is a hit factor.
• Revenue: 13 bn. yen
• Net Income: 1.3 bn. yen
• Started “mixi app” in 2009
27. Mobage / Gree
• Mobile social game platform
• Mobage started in 2006.
– The company ‘DeNA’ started as an online auction
site, but that business was not successful.
• Gree had started as a SNS for PC in 2004.
– But as SNS, Gree was not successful.
– So, they changed their course to clone Mobage.
28. Successful Global Websites in Japan
• Google
• Amazon
• Wikipedia – 6th biggest Wikipedia in the world
• Twitter – estimated 5~10 million users
• Youtube
• Han game
30. Entrepreneurship in Japan
• Brief summary and numbers
• Regulations, rules, and norms
• Latest trends
• Examples of latest startups
31. Facts of Japanese startups
• IPO market is in a serious downhill.
• Buyout market is very small.
• Therefore, VCs are almost dead.
– Literally, now in danger of bankruptcy.
• Still, many startups are emerging.
– With their own money, family’s money, or
government backed banks, small community
banks.
– And organic growth.
32. Venture Investment
• US
– $17.7 billion with 2795 deals in 2009
• Japan
– $0.2 billion in 2009
– Much smaller number than $0.8 billion in 2006
33. Regulations, rules, and norms
• Equity finance
– Very few people have a knowledge and experience
in startup financing.
– Much smaller number and size of VCs and angels.
• Debt finance
– 99% of loans for startups require personal
guarantee of CEO.
if fails, CEO owes personal debt.
35. History of Japanese IPO market
• Japan has many stock markets.
– Tokyo Stock Exchange has 1st and 2nd section for
bigger companies.
• TSE ‘Mothers’ market for emerging companies
was opened in Jan 1999.
• ‘NASDAQ Japan’ started in May 2000.
• NASDAQ Japan is not successful, and changed
its name to ‘Hercules’ market, because
NASDAQ withdrew from the market.
36. Livedoor scandal
• 2006 Jan 16: Livedoor (high-growth IT
company) was searched for fraudulent
accounting.
• 2006 Jan 17-18: TOPIX (stock index) fell 5%.
– Jan 18: TSE halted all trades.
• 2006 Jan 23: Executives of Livedoor were
arrested.
38. Livedoor is much better than
• FOI
– Nov 2009: listed on Mothers market.
– May 2010: searched for fraudulent accounting.
– May 2010: bankruptcy
• Liquid Audio Japan
– Dec 1999: listed on Mothers market as one of the first
company on the market.
– Oct 2000: CEO was arrested for violent crime
– Feb 2009: finally delisted from the market
• Internet Research Institute
– Dec 1999: listed on Mothers market as the first .
– Jun 2007: delisted from the market for fraudulent activity.
40. Groupon race
• Many Groupon clones • Piku
appeared in 2010. • Pomparade
– Around 20 or more. • Kaupon
• Most sites are having • Qpon
difficulties to provide
• Q:Pod
attractive coupon deals.
• Minawari
• First Groupon clone
‘Piku’ has launched on • Nikopon
Apr 20, 2010. • Goti
41. Rise of social games
• Mixi started “mixi app” based on OpenSocial
API.
– “Sunshine farm” by Rekoo.
• Gree and Mobage are social gaming
companies.
– And they opened their platform to third parties.
• Han game (Korea) is the first social game
provider in Japan which started on 2000.
42. iPhone and Android
• iPhone is the best selling
phone in Japan.
– However, still small
percentage of the market.
• Revolutionary, because
iPhone brought globally
compatible mobile web
to Japan.
45. Ciftr – work shift management tool
• Easily create work shift based on employee’s
preferences.
• Employee uses their own cell phone to send
preferences.
• Employer uses PC to adjust and fix work shift,
and pushes it to employee’s cell phone.