a couple of years ago I was in a taxi
early in the morning in Shanghai on the
way to the airport
I was really hungover and I wasn’t alone
I was sharing the taxi with a professor
who was the head of the entrepreneurial
program at my MBA school so being
hungover and having a captive audience I
decided I would ask what I thought was a
challenging question so I asked him
every day you’re teaching people
entrepreneurship can you really make
someone into an entrepreneur and his
reply was no and most people shouldn’t
become entrepreneurs you can take people
right up to the edge of the pool but you
can’t make them jump in but what you can
do is you can DEET them to be
comfortable with ambiguity and if
somebody’s comfortable with ambiguity
they can take this back to their
companies and if it’s a big company
especially in a big company they can
create intrapreneurial ISM which is a
benefit for everybody involved so at the
time I was pretty happy with the answer
but now I’m not so sure
three years ago when I started my
Executive MBA again a school known for
its entrepreneurial program there were
47 people in my class and only 2% of
them were entrepreneurs so just one
person was an entrepreneur and that
person was me now 18 months after
graduating and it was tough 17 percent
of the class are entrepreneurs so it’s
an 8x increase so it would seem that
there’s a connection between studying or
being exposed to entrepreneurship and
becoming an entrepreneur but is there
really a connection so I’ve been able to
get a little bit more data so earlier
and this year I published a book it was
about Japanese entrepreneurs and their
startup stories there wasn’t a book
light to get so I wanted to get it out
there and to create the book
what I did was I interviewed 20 pretty
famous tech entrepreneurs who were in
Japan actually Yusuke who spoke a couple
hours ago was one of those and if we
look at their profiles that I was able
to gather 20% of the entrepreneurs
either studied or lived abroad when they
were younger 30% of them grew up in
entrepreneurial families 40% of them
either interns when they were in high
school or in college at a startup so a
full 90 percent 18 of the entrepreneurs
that I interviewed were either
exposed to entrepreneurship at an early
age or chose to break free and do
something different so between these two
data sets the 47 people in my Executive
MBA class the 20 Japanese entrepreneurs
that I interviewed to create the book it
would seem that exposure to
entrepreneurialism will create a higher
chance that you’ll become an
entrepreneur later in life a causal
relationship exists exposure creates
entrepreneurs but taking a step back
what is an entrepreneur the definition
I’ll use is somebody who creates their
own business somebody who takes on risks
and somebody who follows a different
path so from these previous examples it
would seem that if you follow a
different path when you’re younger if
you study abroad or do something
different it will increase the
likelihood that you’ll take a different
path as an adult similarly being exposed
to entrepreneurship either through your
family or as an intern will increase the
likelihood that should become an
entrepreneur as an adult exposure
creates entrepreneurship so let’s see
how does this play out in Japan now in
Japan the working age population is 77
million people and 3.8 4% of the working
age population is involved in
entrepreneurship so that’s nearly 3
million people which
seems like a lot but many of them are
working for small independent businesses
probably many enjoying a much better
lifestyle than I do trying to run a
high-growth startup but there are very
few startups in Japan I think what I see
with my offices in Harajuku daily is
there’s a never-ending wave in supply of
people ready to start the next hip
retail shop cool cafe or trendy boutique
only to be replaced six months later or
a year later by the next eager
entrepreneur but again there are very
few startups and by startup I mean a
company with fast exponential growth and
the major reason for this is few people
are exposed to startups there are a few
examples so few people take this risky
path beyond that the legal and financial
risks of entrepreneurship in Japan are
very high there’s little separation
between a company and the entrepreneur
so if you’re an owner of a business and
it goes bankrupt your assets can be
taken so the creditors could take your
house they could take your car they
could take your savings so the risks are
very high in Japan in bankruptcy
creditors on average recover 93% of the
assets that they’ve loaned out this is
the highest in the world which is a
great stat if you’re a creditor and you
want to lower your risk but if you’re an
entrepreneur especially an entrepreneur
of a high risk startup it sucks
then of course in Japan the social risk
is significant the fear of failure is
pervasive if you’re running a venture
and it fails it can make a real deep
impact on your social relationships it
can strain your family relationships
you could lose friends certainly former
colleagues or business associates may no
longer return your phone calls it can be
devastating and very hard to come back
for this you’re constricted social
circle
the amount of opportunities that you
have even smaller now I’d argue a lot of
this comes in early education in Japan
when Japanese children are being exposed
to socialization and they’re being
taught to be part of the group before
anything else and not to break a rule
so for child wants to get out of the
boundaries a little bit then if their
actions aren’t okay by the group that
can be deeply frowned upon if they go
out too far and really break a
significant rule then they could become
ostracized now to give a very personal
example this is my son earlier this year
I was taking him to a soccer game so he
played for his elementary schools bukata
soccer team he goes to he went to a
Japanese elementary school so to paint
the scenario for yourself it’s raining
I’m taking him by car and world very
late so we’re trying to get there as
fast as possible and I told him okay
I’ll Drive you right up to the gate of
the ground you just hop out run in we’ll
make it on time it’ll be perfectly fine
but he wouldn’t so we’re starting to go
at it a little bit and I’m saying just
hop out just hop out but he wouldn’t he
finally told me dad there’s a rule that
students have to go through the gates of
the ground with their parents so I can
understand the rule makes sense it’s
probably there for safety reasons right
so that’s a genesis of the rule but here
given the circumstances it’s raining
we’re late we’re getting angry just hop
out wouldn’t listen he was starting to
get upset I was starting to get upset so
we went in part it was a place that
we’ve never been to before so we had to
park far away at this point were late so
we’re walking to the ground both of us
are getting quite angry were soaked and
I told him why don’t you just run ahead
just go forward tell him your dad’s on
the phone tell him he’s tying his shoe
it doesn’t matter I’m right behind you
you’ll just get right there and he got
no not doing it so we finally got there
late soaked bad moods and he got benched
for pretty much the whole game and of
course we got lots of
nasty stares from everybody else like
what is this crazy guy Jen doing here
now that’s not where the story ends so
later in the day we had to move location
for an award ceremony now the whole
scene repeats itself we’re driving there
we’re late it’s in the rain so we missed
the award ceremony and just as we’re
getting up parents and students are
leaving they’re giving us crazy faces
like who the hell are we and I got
really upset at my son so all the kind
of anger and frustration and fury ASSA
tea they’d been building up throughout
the day came out I got mad at him and he
broke down in tears so here we are in
the middle of the street not he hadn’t
played we missed the awards ceremony
he’s crying I’m angry it really was in
my finest moment as a father but what it
did was it really brought home the
dynamics that we’re dealing with is
here’s me as an entrepreneur as a
foreigner willing to bend the rule to do
something different if it’s practical
and the circumstances would require it
and here’s my son taught by Japanese
school never to break a rule always to
be part of the group now it’s these
dynamics that really put a damper on
entrepreneurialism later in life and
that keep people from becoming
entrepreneurs later but even with this
backdrop it’s not all bad news for
Japan’s entrepreneurial ecosystem there
are a lot of positive things happening
right now so right now the appeal of
startups is growing there’s a lot more
early stage support for people to start
startups so there’s more incubators
there’s more capital there’s more
mentoring now putting these things
together means there’s more events with
more events you get more exposure now
with more exposure you get more people
entering a startup as an employee with
more people entering startups as an
employee some of these are going to
break away and start their own companies
now once you have more startups you get
more examples of success when you have
more examples of success you’re gonna
get more startups so you have a virtuous
cycle going now with more startups and
this is where
interesting you get more serial
entrepreneurs and serial entrepreneurs
bring with them more capital follow them
and more investment follow them and the
size of the opportunity that they start
to challenge grows so in the next couple
of years the dynamics have been created
that the next Google or Facebook could
be created in Japan the Japanese
entrepreneurial ecosystem is becoming
much more dynamic startups are being
grown entrepreneurs risk tolerance is
being stretched so from everything that
I’ve seen and experienced
entrepreneurialism is learn about maybe
risk tolerance is innate but it can grow
from the data that I personally
experienced it would seem that there’s a
systematic conversion between being
exposed to entrepreneurialism when
you’re young and later on you becoming
an entrepreneur and this is what’s
happening in Japan today more and more
people are being exposed to
entrepreneurialism more people are being
exposed to startups so what we are
seeing is more entrepreneurs and more
startups more people are now getting
closer to the edge of the pool more
people are becoming comfortable with
ambiguity and more Japanese are diving
into startups thank you
[Applause]
early in the morning in Shanghai on the
way to the airport
I was really hungover and I wasn’t alone
I was sharing the taxi with a professor
who was the head of the entrepreneurial
program at my MBA school so being
hungover and having a captive audience I
decided I would ask what I thought was a
challenging question so I asked him
every day you’re teaching people
entrepreneurship can you really make
someone into an entrepreneur and his
reply was no and most people shouldn’t
become entrepreneurs you can take people
right up to the edge of the pool but you
can’t make them jump in but what you can
do is you can DEET them to be
comfortable with ambiguity and if
somebody’s comfortable with ambiguity
they can take this back to their
companies and if it’s a big company
especially in a big company they can
create intrapreneurial ISM which is a
benefit for everybody involved so at the
time I was pretty happy with the answer
but now I’m not so sure
three years ago when I started my
Executive MBA again a school known for
its entrepreneurial program there were
47 people in my class and only 2% of
them were entrepreneurs so just one
person was an entrepreneur and that
person was me now 18 months after
graduating and it was tough 17 percent
of the class are entrepreneurs so it’s
an 8x increase so it would seem that
there’s a connection between studying or
being exposed to entrepreneurship and
becoming an entrepreneur but is there
really a connection so I’ve been able to
get a little bit more data so earlier
and this year I published a book it was
about Japanese entrepreneurs and their
startup stories there wasn’t a book
light to get so I wanted to get it out
there and to create the book
what I did was I interviewed 20 pretty
famous tech entrepreneurs who were in
Japan actually Yusuke who spoke a couple
hours ago was one of those and if we
look at their profiles that I was able
to gather 20% of the entrepreneurs
either studied or lived abroad when they
were younger 30% of them grew up in
entrepreneurial families 40% of them
either interns when they were in high
school or in college at a startup so a
full 90 percent 18 of the entrepreneurs
that I interviewed were either
exposed to entrepreneurship at an early
age or chose to break free and do
something different so between these two
data sets the 47 people in my Executive
MBA class the 20 Japanese entrepreneurs
that I interviewed to create the book it
would seem that exposure to
entrepreneurialism will create a higher
chance that you’ll become an
entrepreneur later in life a causal
relationship exists exposure creates
entrepreneurs but taking a step back
what is an entrepreneur the definition
I’ll use is somebody who creates their
own business somebody who takes on risks
and somebody who follows a different
path so from these previous examples it
would seem that if you follow a
different path when you’re younger if
you study abroad or do something
different it will increase the
likelihood that you’ll take a different
path as an adult similarly being exposed
to entrepreneurship either through your
family or as an intern will increase the
likelihood that should become an
entrepreneur as an adult exposure
creates entrepreneurship so let’s see
how does this play out in Japan now in
Japan the working age population is 77
million people and 3.8 4% of the working
age population is involved in
entrepreneurship so that’s nearly 3
million people which
seems like a lot but many of them are
working for small independent businesses
probably many enjoying a much better
lifestyle than I do trying to run a
high-growth startup but there are very
few startups in Japan I think what I see
with my offices in Harajuku daily is
there’s a never-ending wave in supply of
people ready to start the next hip
retail shop cool cafe or trendy boutique
only to be replaced six months later or
a year later by the next eager
entrepreneur but again there are very
few startups and by startup I mean a
company with fast exponential growth and
the major reason for this is few people
are exposed to startups there are a few
examples so few people take this risky
path beyond that the legal and financial
risks of entrepreneurship in Japan are
very high there’s little separation
between a company and the entrepreneur
so if you’re an owner of a business and
it goes bankrupt your assets can be
taken so the creditors could take your
house they could take your car they
could take your savings so the risks are
very high in Japan in bankruptcy
creditors on average recover 93% of the
assets that they’ve loaned out this is
the highest in the world which is a
great stat if you’re a creditor and you
want to lower your risk but if you’re an
entrepreneur especially an entrepreneur
of a high risk startup it sucks
then of course in Japan the social risk
is significant the fear of failure is
pervasive if you’re running a venture
and it fails it can make a real deep
impact on your social relationships it
can strain your family relationships
you could lose friends certainly former
colleagues or business associates may no
longer return your phone calls it can be
devastating and very hard to come back
for this you’re constricted social
circle
the amount of opportunities that you
have even smaller now I’d argue a lot of
this comes in early education in Japan
when Japanese children are being exposed
to socialization and they’re being
taught to be part of the group before
anything else and not to break a rule
so for child wants to get out of the
boundaries a little bit then if their
actions aren’t okay by the group that
can be deeply frowned upon if they go
out too far and really break a
significant rule then they could become
ostracized now to give a very personal
example this is my son earlier this year
I was taking him to a soccer game so he
played for his elementary schools bukata
soccer team he goes to he went to a
Japanese elementary school so to paint
the scenario for yourself it’s raining
I’m taking him by car and world very
late so we’re trying to get there as
fast as possible and I told him okay
I’ll Drive you right up to the gate of
the ground you just hop out run in we’ll
make it on time it’ll be perfectly fine
but he wouldn’t so we’re starting to go
at it a little bit and I’m saying just
hop out just hop out but he wouldn’t he
finally told me dad there’s a rule that
students have to go through the gates of
the ground with their parents so I can
understand the rule makes sense it’s
probably there for safety reasons right
so that’s a genesis of the rule but here
given the circumstances it’s raining
we’re late we’re getting angry just hop
out wouldn’t listen he was starting to
get upset I was starting to get upset so
we went in part it was a place that
we’ve never been to before so we had to
park far away at this point were late so
we’re walking to the ground both of us
are getting quite angry were soaked and
I told him why don’t you just run ahead
just go forward tell him your dad’s on
the phone tell him he’s tying his shoe
it doesn’t matter I’m right behind you
you’ll just get right there and he got
no not doing it so we finally got there
late soaked bad moods and he got benched
for pretty much the whole game and of
course we got lots of
nasty stares from everybody else like
what is this crazy guy Jen doing here
now that’s not where the story ends so
later in the day we had to move location
for an award ceremony now the whole
scene repeats itself we’re driving there
we’re late it’s in the rain so we missed
the award ceremony and just as we’re
getting up parents and students are
leaving they’re giving us crazy faces
like who the hell are we and I got
really upset at my son so all the kind
of anger and frustration and fury ASSA
tea they’d been building up throughout
the day came out I got mad at him and he
broke down in tears so here we are in
the middle of the street not he hadn’t
played we missed the awards ceremony
he’s crying I’m angry it really was in
my finest moment as a father but what it
did was it really brought home the
dynamics that we’re dealing with is
here’s me as an entrepreneur as a
foreigner willing to bend the rule to do
something different if it’s practical
and the circumstances would require it
and here’s my son taught by Japanese
school never to break a rule always to
be part of the group now it’s these
dynamics that really put a damper on
entrepreneurialism later in life and
that keep people from becoming
entrepreneurs later but even with this
backdrop it’s not all bad news for
Japan’s entrepreneurial ecosystem there
are a lot of positive things happening
right now so right now the appeal of
startups is growing there’s a lot more
early stage support for people to start
startups so there’s more incubators
there’s more capital there’s more
mentoring now putting these things
together means there’s more events with
more events you get more exposure now
with more exposure you get more people
entering a startup as an employee with
more people entering startups as an
employee some of these are going to
break away and start their own companies
now once you have more startups you get
more examples of success when you have
more examples of success you’re gonna
get more startups so you have a virtuous
cycle going now with more startups and
this is where
interesting you get more serial
entrepreneurs and serial entrepreneurs
bring with them more capital follow them
and more investment follow them and the
size of the opportunity that they start
to challenge grows so in the next couple
of years the dynamics have been created
that the next Google or Facebook could
be created in Japan the Japanese
entrepreneurial ecosystem is becoming
much more dynamic startups are being
grown entrepreneurs risk tolerance is
being stretched so from everything that
I’ve seen and experienced
entrepreneurialism is learn about maybe
risk tolerance is innate but it can grow
from the data that I personally
experienced it would seem that there’s a
systematic conversion between being
exposed to entrepreneurialism when
you’re young and later on you becoming
an entrepreneur and this is what’s
happening in Japan today more and more
people are being exposed to
entrepreneurialism more people are being
exposed to startups so what we are
seeing is more entrepreneurs and more
startups more people are now getting
closer to the edge of the pool more
people are becoming comfortable with
ambiguity and more Japanese are diving
into startups thank you
[Applause]
Please follow and like us: