McNealy with members of the Whill team.
Last week, at a closed meeting in Tokyo, Sun Microsystems co-founder and Silicon Valley billionaire Scott McNealy offered advice to a group of Itochu Technology Ventures’ portfolio startups. The CEOs from Whill, Crowdworks, Raksul, Tokyo Otaku Mode, Uzabase, and Fringe81 were all in attendance. Tech in Asia was invited to listen in on the discussion and engage McNealy regarding his impressions of entrepreneurship in both Tokyo and Asia as a whole.
Entrepreneurial encouragement
The first part of McNealy’s talk centered around general advice for entrepreneurs.
“If your idea isn’t controversial, you have no chance,” he said. “If everyone thinks it’s right, then everyone’s gonna want to do it. If there’s consensus, there’s no differentiation. If there’s no differentiation, there’s no pricing power. There’s no profit without pricing power, and no one will invest in a company without profit potential.”
McNealy also stressed the importance of moving fast:
There used to be a whole bunch of search engines, and all the sudden Google figured out how to make money on it – auction off every word in every language to the highest bidder everyday. Everyone was rummaging around trying to find a business model, and Google did it by going hard and fast. The better the idea, the harder and faster you have to go.
Addressing the CEOs in the room, McNealy said that decision making should take an all-or-nothing approach.
“Either make all the decisions yourself or figure out how to delegate them,” he said. “All organizations need a decision-making model that can be understood by everyone.
Some other assorted bits of advice:
“The right answer is the best, the wrong answer is second best, and no answer is a disaster.”
“Pick an enemy – that will coalesce your team, it will bring them together more than any rah-rah you can do. They are trying to take your company away, your jobs away, your wife’s vacation away, your kid’s new toy away.”
“You don’t have enough money for advertising, so use the media. Invite bloggers to everything.”
“The secret is the secret and the master of the secret was Steve Jobs. You’ve got to guard things ferociously, fire people who leak, and create an enormous amount of press frenzy around a secret.”
“[Jobs] was the greatest fashion queen in computing, he turned computers into a runway show.”
Japan
When asked about Japanese startups, specifically, McNealy said that they are often too insular.
“[Japanese startups] need to go global – the island is not big enough,” he said. “You have to build and internationalize, localize your business in all shapes and forms. Don’t assume that because it works here that it will work elsewhere. There’s a long tradition of island mentality here, views towards privacy and sharing will be different, but less so because the internet is breaking those differences down.”
“In terms of developed countries, [Japan is] as different as any of them,” he added.
Asked about his impression of Japanese entrepreneurs, McNealy said the following:
[Akio] Morita was an entrepreneur, but how long ago did he start Sony? [Masayoshi] Son is an entrepreneur, but he started [Softbank] more than 30 years ago. There’s Line, of course. It’s hard to generalize about the state of Japanese entrepreneurship because there aren’t enough to make a generalization from.
Silicon Valley and China
There seems to be an obsession with creating a “Silicon Valley of [insert city/country here]” outside of California, and McNealy explained that it’s an unnecessary notion.
“Tencent, Alibaba, Renren are doing just fine without Silicon Valley,” he said. “[Sun Microsystems] started in Colorado and we were just fine. The valley offers opportunities for access to the big players, but over time there will be a greater percentage of successful startups outside it. It will remain fertile ground for a long time.”
He continued: “China has the best chance of replicating something like Silicon Valley because of the big Chinese-speaking market. But it can’t be China only – there becomes a problem with protectionism.”
As for Japan’s chance at doing the same:
To create another valley with billions of dollars coming in, that’s going to be hard to do. If [Hiroshi] Mikitani and [Masayoshi] Son decide they want to make Tokyo the next big thing, they could put the money in it and get it going. Both are more interested in Rakuten and Softbank than creating a valley, though, and I can’t blame them.”
Whill
Tech in Asia asked McNealy why he chose to back e-wheelchair maker Whill, his first investment in a Japanese startup. He explained that he was introduced to Whill via Itochu, and that he simply liked the product and the CEO.
“I woke up the next day and said ‘that’s so cool,’” Mcnealy said. “I have no idea if it will be successful, but it felt in my gut that it was a reasonable thing to invest in. As far as my criteria for investment, it’s simple – liking the product, the person, the team. I’m not trying to be the world’s next Warren Buffett.”
See: After helping Skype and Box, Itochu Technology Ventures wants your startup to win in Japan
This post Scott McNealy gives billion-dollar advice to Japanese startups appeared first on Tech in Asia.
Scott McNealy gives billion-dollar advice to Japanese startups
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