Japan Poised for Entrepreneurial Ventures to Break Out

The latest edition of the Japan Entrepreneur report asserts that the time is ripe for Japan's entrepreneurial ventures to break out, due to conditions similar to post-World War II era in Japan, and the early 1980's in the United States:

"Social reform, technological innovation and strong needs for entrepreneurship converged, sparking an unprecedented venture boom.

These same three factors converged in the United States in the early 1980s. The U.S. had suffered from inflation for ten years, unemployment had topped ten percent and the nation needed new industries. Improved semiconductor technologies, the first personal computers and President Reagan's broad deregulation measures combined to create a powerful wave of innovation. That wave launched a host of world-leading IT players: Microsoft, Apple Computer and Cisco Systems, to name just a few.

Today's Japan resembles the U.S. of the early 1980s. The nation needs entrepreneurship as IT players like Sony and Fujitsu fail to generate earnings, creating pressure to restructure. Problems erupt from industry giants like Seibu Railways and Daiei. Add in Commercial Code revisions and deregulation and you have a potent mix transforming the economy.

From a technology standpoint, too, Japan is witnessing a dramatic transformation. The IT industry's center of gravity is shifting from general-purpose computers to a new breed of digital consumer devices: computers that don't look like computers.

Ten years ago big players dominated Japan's promising new technologies, but today these giants are hard-pressed to survive. Ventures enjoy unprecedented opportunity as these entrenched interests lose their grip. Once again, three crucial factors--social reform, technological innovation and the need for entrepreneurship--are aligned."

A Dangerous Trend

Editor's note: It's time again for another article by expert guest blogger, John Wyckoff. This month he looks at the trend of people trying dangerous stunts, fueled by reality TV.

By John Wyckoff

Reality shows are anything but. However, they are responsible for creating a new and dangerous trend.

There are more "reality" shows on network TV than just about any other form of entertainment. Why? They cost considerably less to produce than other shows. Reality shows have no high-paid actors and plenty of people willing to make fools of themselves in front of a camera.

One of the worst, in my opinion is "Fear Factor" in which otherwise ordinary people do disgusting and/or very dangerous things. Of course, they have safety harnesses and other inhibitors to prevent themselves from becoming gory spectacles that will be picked up by the six-o'clock news.

So, why do I say it's creating a dangerous new trend? Ordinary people often believe they too can do similar stupid or dangerous things and get away with them. The difference is the lack of any form of safety equipment along with a lack of any training or understanding of what can go wrong.

As an example of this trend in the powersports industry, I've watched an "Extreme" TV show where very well trained professional motorcycle stunt riders not only ran up a steep bank but also did a complete double summersault while still astride the motorcycle. I've also seen motocross events where riders seemed to defy gravity and their bikes appeared to be unbreakable. How do they that do it? Training, practice, special equipment. Add to that these riders are very unusual people with very unusual talents.

We've all seen ads for automobiles that depict a car sliding sideways or careening around curves at rocket-like speeds. Usually there is a banner at the bottom of the screen admonishing the viewer not to attempt such feats and stating the ad was done on a closed course with a professional driver.

Unfortunately, most men in their "macho" phase of life think they have the following talents: 1. They are great lovers. 2. They are great drivers. 3. They are fearless. 4. They are immune from physical damage.

In fact they are wrong on all four counts. Let's not go into the first three. I'll leave that up to you, the reader. As for the fourth, they have the highest rates of physical damage of any age group except for the very elderly.

Here's where many go wrong. They see these feats of daring and believe they can do that, too. After all, the guy on TV is no better, stronger or smarter than themselves. It seems many high profile, professional athletes have a tendency to believe their own PR. Since they are in great physical shape, have the flexibility, stamina and agility then it's only reasonable they too can do these stunts and more. When they fail it becomes the fodder of the sports channels as well as the late night TV shows.

What about those who don't get the press exposure? They just get the hospital bills. Sometimes their families get to pay the post-mortem expenses along with the hospital bills. I know of no insurance policies that cover acts of wanton stupidity.

It's true that young men (and sometimes young women) are often more willing to take risks than those more mature. I was when I was younger and I'll bet you were, too. The difference between now and then was the degree of risk and the amount of knowledge needed to evaluate the possibility of failure.

Binge drinking is not something mature people do, it's something those who are barely old enough (sometimes not old enough) to drink alcohol, do. The TV news seems to revel when they can find high school or college kids out of control while drinking to excess and then driving off.

While talking to a law enforcement officer about the problem, he commented that these thrill seekers and dare devils don't seem to have any common sense. My comment to him was that I don't know why they call it common sense when it's so uncommon.

Will this new trend continue and grow? I believe it will. It gives validity to the extreme. It offers excitement, danger and admiration of peers. These reality shows make it look easy. We don't think it could really cause harm because if it did -- "Wouldn't they be forced to take it off the air?" Heh.

OK, now for a reality check. Anything that requires exceptional skill is often made to look exceptionally easy. A tightrope walker makes what he does look easy. The same holds true the trapeze artist. Ice skaters make what they do look almost natural. None of these are things the "average" person can accomplish with any degree of proficiency. All have steep learning curves. All require the training and guidance of experts.

In the powersports industry, ordinary people trying extraordinary and dangerous stunts can lead to lawsuits, serious injuries and death. Along with these extreme trends, dealers and manufacturers are taking more precautions than ever to warn individuals against their own lack of common sense. Much of the OEM's precautions are in the form of elaborate warning labels in very conspicuous places. For dealers, we will soon reach a time when emphasizing safe riding will become as important as explaining product features and benefits.

Like this article? Read more by John Wyckoff:

Harley, Short Sellers and Franchisees

BMW's Ad: No Respect

And be sure to check out John's website, MYOB-2 for special reports and other resources.

Microbusinesses -- Smashing Stereotypes

When it comes to microbusinesses -- those very small businesses with no more than five employees -- size isn't what counts the most. These tiny enterprises can land business that seems to dwarf their size. Commitment and a clear plan are key determining factors that give these businesses leverage beyond their size.

A recent story in The Microenterprise Journal illustrates this very point. Since the Journal requires a paid subscription to access it, here is an extended excerpt of the article (quoted with permission of the publisher):

"One of my favorite hobbies is smashing stereotypes. And one of the most egregious sets of stereotypes around, from my perspective, are the stereotypes about microbusinesses -- specifically, the stereotypes that arise because people make assumptions about what microbusinesses can and cannot do, based on their size.

For example, while it is true that most microbusinesses make relatively little in annual average revenues, it is not true that all microbusinesses make relatively little nor is it true that those that do make relatively little do so because they are microbusinesses.

That's why it makes me particularly happy when I come across a company like the Valorem Corporation.

The Valorem Corporation is a veteran-owned, Laurel, MD (USA)-based firm, and is young enough that owner Kyle Haycock couldn't even make a guess at its average annual revenues. It was just incorporated this past March, and Haycock has just hired three new full-time employees.

He needed to do that because he has just landed a six-month contract with the Department of Defense, worth half a million dollars.

So much for what microbusinesses can't do.

Valorem is in the business of supplying linguists and intelligence analysts to the federal government. It is a line of work that Haycock is very familiar with because he has been doing it for the past decade. In fact, that is pretty much what gave him the idea to start this business. According to Haycock, Valorem was formed specifically to be a government contractor.

That means that his business is not likely to stay micro. But it also does not mean that he has to wait until his business "grows up" before he sets out to do what he set out to do.

* * *

Even with all the advantages of being well-versed in the needs of his prospective customer, having all kinds of contacts among the procurement officers he needed to deal with, and a very respectable record of past performance working under other circumstances but performing the same services, he still had three-fourths of a year of administrative tap-dancing to deal with.

Valorem, unlike most microbusinesses, was formed and designed strictly to serve the federal government. For a microbusiness owner who may want to sell to the government but who may also want to do something else, the kind of single-minded tenacity displayed by Haycock can only come at the expense of other business. And, for most microbusinesses, losing current customers because of that single-minded pursuit when you don't even know that you'll win the contract is a seemingly insurmountable obstacle to federal contracting."

Box.net -- An Entrepreneur's Tale

Perhaps you've noticed the orange ad for Box.net, our newest advertiser, at the top of the site.

Box.net provides online file storage. A couple of weeks ago, before going out of town on a trip I loaded a number of files on to Box.net. Then, on the road, I simply logged on to Box.net when I needed the files. The process was much easier and faster than trying to transfer files by CD from my desktop computer to the laptop that I use when travelling. (Gear Live has a review of Box.net and gives it the thumbs up, too.)

I was curious about Box.net, and I ended up doing an interview of Aaron Levie, the President of Box.net.

It turns out the company is run by two entrepreneurs who have bootstrapped their business -- and faced the same kind of challenges as countless other entrepreneurs, including almost running out of cash. And like many startups today they exemplify the "virtual business" structure where people work in more than one location.

Here is that interview:

SBTrends: Aaron, where are you located?

Levie: Seattle, and we also have a few people working for us in Los Angeles.

SBTrends: Who are the principals of the company?

Levie: I am the CEO. My partner, Dylan Smith, is the CFO, and we work with various developers, server administrators, technicians, etc....

SBTrends: How are you financing your business?

Levie: So far we have been self-financed, but we are gradually looking around for funding -- though there hasn't been a real need except for expanded marketing.

SBTrends: How did you come up with the idea for the company and get started, Aaron?

Levie: We wanted to make online storage and file sharing much easier than it appeared to be on the Internet. There are other companies that are providing similar services as Box.net, but we set out to make this business simpler and friendlier than the rest.

SBTrends: What's unique about your service?

Levie: Besides (hopefully) being easier to use and more straight-forward than the competition, we have made extensive improvements on typical online file-sharing. Since a large market for us is small businesses and professionals, sharing files with multiple parties, or sharing multiple files that are large becomes burdensome with other services as well as email, etc...

Our format gets any number of files shared instantly, without the hassle of advertisements on the shared page, or other things which may bother the receiving end.

SBTrends: What else can you share about your company or your business?

Levie: We ran out of money after we initially had the system fully developed. That left us with a great website but no way to market it (literally). We were stuck for a while, but came up with a few strategic promotions and soon the user base grew and provided us with revenue to work off of.

SBTrends: Who is the typical customer for your service?

Levie: The typical customer is an individual who would like to backup a large number of documents or photos... which are then shared safely across the Internet with family members or friends -- as well as accessed from the user's home computer/work computer. A secondary use, and one which we are trying to make more prominent, is our work group collaboration feature which allows multiple users to log in to one account with various restriction settings -- as in some users can upload, some cannot, etc...

SBTrends: What do you think people need to know about your company's service?

Levie: I think that your readers, especially, need to know that online storage (whether or not it's Box.net) can be very useful to daily operations and organization of a small business. The benefits are endless, and just as a way to give multiple computers access to the same set of files is a great tool.

Thanks for taking the time to learn about Box.net, and good luck to everyone on their business endeavors.

Economic Conditions Good in the U.S.

In case you were wondering, things in the United States are not that bad off, despite what you read in the media.

In fact, economic conditions have improved for Americans, with virtually every disadvantaged group making positive gains in the last decade, according to BusinessWeek:

"Over the past decade, virtually every traditionally disadvantaged group made gains in absolute terms. Take, for example, families headed by immigrants who entered the country in the 1980s. The poverty rate for such families dropped sharply, from 26.6% in 1995 to 16.4% in 2003, the latest numbers available. Similarly, a combination of welfare reform and tight labor markets helped drive down the poverty rate for female-headed households with children from 46.1% in 1993 to 35.5% in 2003. That may not seem like much, but it beats the total lack of progress in the previous decade. And a new book, Moving Up or Moving On: Who Advances in the Low-Wage Labor Market?, uses a new set of data to look at the wage history of a group of low-earning workers from 1993 to 2001. Adjusted for inflation, those people saw their average earnings more than double over those nine years."

One interesting nugget that is touched on only briefly in this article is globalization.

The old method of evaluating how well off Americans by comparing our situation with others in the U.S. makes little sense in this era of globalization. Perhaps if nothing else, globalization will shake us Americans from the bad habit of looking only at our country and ignoring the rest of the world.