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TOKYO -- Masayoshi Son, whose personal net worth of more than US$60
billion on paper is more than that of the Union of Myanmar (formerly
Burma), looked like the proverbial cat who swallowed the canary.
He was sitting on the podium one day last week along with financial
executives who are leading Nasdaq Japan's thrust into Japan's money world,
aiming to give it an additional stock market that will
cater to growth companies.
Japan's "old economy" bankers are not amused.
Never mind that the old guard has made a mess of Japan's financial
system with endemic corruption and massive non-performing loans.
The "new economy" whiz kids are seen by the oldsters as intruders whose
main shortcoming is impetuosity and a reluctance to standing in line at
the loan window for 5, 10 or 15 years in order to acquire development
funds.
Let's just say that Japan has not been a hot bed of venture capitalists.
Along came Son.
He wants to change all that.
Naturally traditional Japanese bankers in dark suits cringe when Son
says "I intend to remake Japan."
Japan has had wealthy scions before as well as young men with plenty of
brainpower. But the
missing ingredient has been the deal-maker's instinct and a certain
something that goes beyond what they teach at Wharton or the Stanford
Business School.
Son's Softbank Corp., which already owns a stake in Yahoo Japan and
is full owner of the former mainline U.S. publishing house Ziff-Davis, has
been tipped to buy Nippon Credit Bank from the Japanese government, which
took over the failed institution in 1998.
The Softbank-led group is spending $10 million to $100 million for NCB,
then will inject a cool $1 billion in new capital.
"Japanese entrepreneurs have had almost no access to capital," Son told
the roomful of would-be
millionaires last Wednesday at the Tokyo Kaikan hall opposite the
Imperial Palace. "Now, not only will companies have access through banks,
but also through the capital markets."
Softbank is leading Nasdaq into Japan and hopes to help new venture
capitalists--a line of 1,500 already is forming--to get rolling in Japan's
internet and online future.
Some say Son, 42, is peddling pipe dreams that prompt enrpreneurs to
float issues in search of too few funds, thus promoting a lack of
liquidity.
One of Son's ideas is to lend funds based on business plans instead of
collateral. The usual pattern in Japan is to put up the family farm or
house as collateral for a loan. Now a thoughtful business plan on the
Harvard Business School model may be preferable.
Son's success seems to have been forged in the crucible of
disappointment. He has endured the kind of prejudice that only a Japanese
of Korean descent can cope.
Son left Japan after pressures of schoolyard bullying and completed high
school in the United States. He attended the University of California at
Berkeley and then started Softbank which he turned into a global player
within five years.
With the Nasdaq Japan joint venture which will open its new market under
the banner of the Osaka Stock Exchange in June, Son has raised hopes of
thousands of young Japanese entrepreneurs.
At last count there were over 4,000 members in the Bit Valley
Association, a play on "Shibuya" literally meaning Bitter Valley, which
is becoming a mecca for new internet adventurers in Tokyo.
Japan has been lagging behind the United States in everything from PC
hookups to the information technology venture business. But with a push
from Son, this could be the year Japan accelerates in the cyber world.
Edward Neilan (eneilan@crisscross.com) is a veteran journalist, based in Tokyo, who covers East Asia and writes weekly for World Tribune.com.