Reflect on yourself before restart.
You need a reflection before restarting your journey. Episode #13
It’s been two months since I published my last newsletter. I wanted to post something before my subscribers and the Substack community forget me.
Since the Internet bubble in the late 1990s, the startup ecosystem in Japan has kept growing with some ups and downs. Still, it’s tiny compared to Silicon Valley, but the money invested in startups in Japan in 2022 has almost reached 1 trillion JPY, about US$7 billion, based on the current exchange rate.
I don’t have any precise statistics, but when I started my tech startup in 2000, the money invested in the startups in Japan, I guess, was about US$1 billion or something.
Recently, I saw lots of news introducing new VC funds established by conventional companies, but not so exciting news of the new startups being launched.
We are in a considerable transitional period to transform many industries and society through “Generative AI. Therefore, Internet-related startups, especially “smartphone apps” and “SaaS” startups, are no longer attracting investors.
Investors need to find attractive startups to invest in.
Today, I would like to write about a failure I experienced. I was inspired by Charles Hudson's latest post.
After I made two decent exits, one IPO at the emerging sector in the Tokyo Stock Exchange Market in 2004 and one M&A exit to Yahoo! Japan in 2007, I started a new startup called DreamVision in 2006 to launch an EdTech business. But, I didn’t launch it because I thought it was not possible based on the feasibility study I conducted.
Technically, I started before my previous startup (Interscope, an Online Research startup) was acquired by Yahoo! Japan. It means I was considering an idea for my new startup while running Interscope.
The M&A exit of Interscope was not excellent, but it was a decent exit. We could give our investors a return, and founders, including me, got good capital gain. I purchased a BMW Z4 3.0i with cash and an expensive condominium in central Tokyo.
However, due to my own inexperience, I could not bring about a satisfactory result for myself.
I started my first company back in 1991. It was not a startup; and it was just another small business. I was struggling even to get appointments. If I were working for Sony or Toyota, everyone would meet me at least once.
So, I wanted to look back at those who looked down on me.
That was my “motivation” to catch the last train of the Internet bubble, and I was lucky enough to get on the train and raise money from the prominent VCs in Japan.
When I co-founded Interscope and raised money from prominent VCs, all of a sudden, the situation changed. Lots of people who looked down on me came to meet me.
A few years later, WebCrew, which I co-founded, went public, and Yahoo! Japan acquired Interscope.
Then, as I explained, I purchased a BMW and a fancy condominium. No one looks down on me anymore.
My motivation, the purpose of my challenge, was achieved.
After screwing up DreamVision, I read books every single day for about a year or a little more.
In those days, when I met my friends, I was asked two questions.
The first one was, “What are you doing recently?” That was OK for me since I did not hide my failure.
When I said I screwed up, the 2nd question was, “Understood. I’m sorry to hear. So what’s your next challenge?”
That was a “Hard question” because I had nothing I wanted to do…
I had some reserve from the two capital gains, and I could make a living on it for several years, but it was not enough for the rest of the lives of my family.
However, I didn’t have anything I was interested in for my next challenge.
I read many “thick and difficult books,” such as Peter F. Drucker, Henry Mintzberg, Clayton M. Christensen, etc.
In the book of Drucker, “Innovation and Entrepreneurship”, he explained.
“Every organization, no matter what kind, needs a purpose or mission. When your purpose or mission is achieved, it is not the time to celebrate. It’s time to redesign the purpose. Otherwise, your organization loses its centripetal force and sense of direction.”
When I read his words, I thought it is not only for organizations but also applies to individual lives.
I realized the reason why I screwed up. My motivation and purpose, which is to look back on those who looked down on me, was achieved.
However, I tried to chase more fame and stick with my already-achieved motivation. So, I guess God gave me a test.
Also, a Mintzberg book gave me a hint. He said in his book the most valuable and meaningful thing is to reflect on yourself. What are the reasons for your success? What are the reasons for your failures?
That was precisely the same thing I was doing. And that gave me the confidence to stick with “reflection” even though I couldn’t find a new direction. I had believed that my new direction and challenge would be found.
In the following article, I’d like to write about my current motivation and purpose for the rest of my professional life.
PS: Coincidentally, Nikkei published the article about Hamish McKenzie, co-founder at SubStack! Although the article is in Japanese, just in case.