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Saturday, Dec. 29, 2012
Silicon startup success wants to return favor
By AYAKO MIE
Seventeen years ago, Anis Uzzaman won an education ministry scholarship and left New York to study at Tokyo Institute of Technology. The American was excited by the chance to learn top-notch technology in Japan, where electronics giants Sony and Panasonic were leading the world.
Years later, those firms are faltering and their credit ratings are in junk-bond territory. Uzzaman, now general partner at a Silicon Valley capital venture firm, laments the decline. But rather than sit around and do nothing, he decided to help by advising Japanese startups aspiring to become the next Facebook or Google.
"Without the education I received in Japan, I would not be where I am today," said Uzzaman. "I would like to give back to Japan."
Uzzaman is one of the few Silicon Valley venture capitalists offering to mentor Japanese startups, which often lack the connections or savvy to be a global player. While an increasing number are eager to tap into Silicon Valley, few have established a reputation there or become attractive enough to be bought out. So Uzzaman decided to act as a bridge between Silicon Valley and Japan.
Uzzaman, who founded Fenox Venture Capital, said Japanese products are competitive but the makers need to globalize their marketing and sales strategies.
"I think Japanese companies should realize that 'Made in Japan' is an asset in the global market," Uzzaman said. "While many try to market their product in a Japanese way, it doesn't work in Silicon Valley."
Well-versed in both the Silicon Valley and Japan business cultures, Uzzaman began offering free consultations to three companies a week and visited Japan once a month to meet potential startups worthy of mentoring.
About a year ago, he realized that many startups don't even comprehend the basics of Silicon Valley startup culture. So he wrote the "Startup Bible," a how-to book that spells out the basics of launching a startup in Japanese. The book is due to be published in January and the profits will be donated to disaster-stricken residents in Tohoku.
One reason why Uzzaman thinks few startups here can get funding from American venture capitalists is that U.S.-based financiers don't know much about them. This he attributes to the language barrier.
While the trade ministry and the U.S. Department of State have formed the U.S.-Japan Dialogue to Promote Innovation, Entrepreneurship and Job Creation, Uzzaman also argues that Japan lacks what is known in corporate financing as an "ecosystem" to attract investors.
Ecosystems allow investors and startups to benefit and "grow" each other. Countries like Singapore offer matching fund systems to attract investors or invite Silicon Valley-based financiers to check out their best prospects. Singapore is ranked the 17th most influential startup ecosystem because of its well-established funding environment.
To help Japan close the gap, Uzzaman aims to pair up with prominent Japanese companies that are globally competitive so he can introduce Japanese products to the American market.
One example is Dream Link Entertainment, the largest flash animation company in Japan.
DLE Inc. has a prominent standing in Asia and its animations have won the Best Animation and Best Director awards at the New York International Independent Film and Video Festival. But DLE has yet to hit the big time in the United States, where a mature and sophisticated animation market already exists.
"Working with the right global partner is one of the most important decisions as we begin to expand our business into the North American market," said Ryuta Shiiki, CEO of DLE. "Anis and his team have an innate understanding of Japanese culture and an unparalleled network in the U.S. and Europe."
Uzzaman said that establishing a sustainable startup industry in Japan will not only help burgeoning startups flourish, but also help Japan's lackluster tech industry survive through mergers and acquisitions.
If big companies can buy out prominent and innovative startups, it will save them expensive research and development expenses. Startups, on the other hand, stand to exit unless they make initial public offerings, which are extremely difficult. According to auditor KPMG AZSA LLC, only 11 new startups were listed on the Tokyo bourse's Mothers market for startups in 2011.