ECN331-1_F

Jasmine Gatten
Entrepreneurship
09/02/2015
Takahiko Naraki, The Three Million Yen Entrepreneur
If you were Takahiko Naraki, would you have done the same thing or
differently? How?
Vocabulary:
- Yuugen-gaisha = a Japanese limited liability company (LLC)
- Juku = preparatory school for exams and advanced learning, also
known as a cram school
- Jin-myaku = human network or personal connections
- Shushoku-katsudou = Japanese custom of having all new employees
apply and later enter as a group at the same time every year to
increase cohesiveness and provide an environment for company
training
- Karoshi = death by overwork
Takahiko Naraki
- Owner of B.I.P. Limited (BIP)
- June 2003, hospitalized due to collapsing from stress-related seizure
- July 1997, formed BIP as a yuugen-gaisha by raising the legallyrequired 3 million of startup capital from friends and family, (2).
- BIP timeline:
o International Trade
o Juku = cram school
o 2001, Internet-delivered marketing concept
Extensive jin-myaku; attended many business mixers
Its not what you know, its who you know
o Next Generation X (NGX) Browser SP
Browser SP was formed through a verbal agreement
between Mr. Takayanagi of Affiliate Company, Mr. Ishikawa
of E.X. NetCom (KK) Inc., and Takahiko; the software would
be marketed to customers of Affiliate
Tool for shushoku-kasudou; connecting job-seeking
students to student-seeking companies
Large corporations were paying to use, such as NTT, Mitsui
& Co., Tokyo Marine; generated revenues for Affiliate of
480,000 to 880,00 per year per customer depending on
features purchased; BIP only received 25% of share
revenues
o Early 2003, SuperX

Worked directly with E.X. NetCom to develop next

generation of NGX
Included Macromedia Flash Web publishing technologies in
an application service provider (ASP) format; now available
on mobile format? now use video and other multimedia
features and included an administrative interface for
customers to better manage their SuperX applications
Interest in high-tech venture; focus on new technology-based business
model; emergence of Internet in Japan around 1997; NTT DoCoMo
o Naraki believed that with the popularity of DoCoMo and
increased usage of dial-up and broadband Internet services, he
could leverage his experience in sales and advertising to create a
product that would deliver personalized content over the Internet
to mobile phones in a new way, (2).
Sufficiently skilled at Web site development; built prototype ver. Next
Generation X (NGX); delivered over Internet by Web browsing
software, not mobile phones
o Push marketing; different from toolbar addons since it was a
desktop application; Dentsu, worlds largest advertising
company, expressed interestdid pilot project involving World
Cup soccer
o Different from U.S. marketing concepts since there was a mutual
agreement between the company and Japanese consumers
regarding the use of personal information; customer relationship
management (CRM)
No real revenue until around September 2003 when BIP received about
7.8 million from Affiliate for NGX; Takahiko worked a part-time job,
with full-time responsibilities, at a catalogue sales companypaid
300,000 yen per month
No employees at BIP; worked with staff from Affiliate or E.X. NetCom
o Acted more in the role of intermediary, bringing together
companies and relationships from Narakis personal network
o For financial management, Naraki outsourced his bookkeeping
to a Nagoya-based accountant because he was too busy. He had
few regular costs and, because of the nature of his business, he
used no promotional advertising beyond business cards, (6).
o No formal business planprepared proposals on a project-byproject basis; neglected day-to-day management of company
Company bankruptcy to be avoided at all costs
o Not looked upon favorably in Japan
Money is generally borrowed from friends and family
guarantors?
o 71% by men in 2001 committed suicide
Double that of U.S.

N. American entrepreneurs often failed at least once

in their business careers, accepting it as a learning or
growth opportunity
Optionswho to choose?
o Affiliate: stronger alliance promised revenue growth
o E.X. NetCom: bigger partnership continued technical
development
o BIP: become self-sufficient marketing expertise and SuperX
project
o Didnt want additional shareholders in the business b/c he didnt
want to shoulder even more responsibility for other peoples
money (friends and family)
o Didnt want outside investors who might try to manage him or
change his vision; didnt want his business judgment to be
compromised by outside investors, (7)
o Bank financing perennially low interest rates in Japan,
hovering around 0% for many years, meant that business loans
could be extended at rates as low as 2% as long as there was a
personal guarantor other than Naraki, (8).
Japans regulated business environment, including rules against
preferred shares and employee stock options before 1998, made
venture capital or angel investors a rare commodity in the country,
(7).
Shinkansen: Nagoya <-> Tokyo (appox. 90 minutes)

Should he continue to run BIP when it clearly was having a

negative effect on his health? And if he did continue, how should he
expand and finance his vision for the company? (8).