According to serial entrepreneur and investor Taizo Son.
Son has been at the forefront of the internet industry in Japan for years. He previously founded GungHo Online Entertainment, a publicly traded Japanese game company. His latest project is Mistletoe, a company he started in 2013 with his own funds. Mistletoe is a combination of a venture capital firm, but is also partly an accelerator and an incubator. Recently, Son moved to Singapore and plans to invest in startups in Southeast Asia.
His older brother, Masayoshi, founded what is arguably one of the hottest tech names in Japan today – SoftBank.
Taizo Son, CEO of Gui
Akio Kon | Bloomberg | Getty Images
Speaking to CNBC on the sidelines of the Innovfest Unbound conference in Singapore, the youngest son said: “Today, the mindset of people – especially parents, mothers – they expect their children work for large, established companies. ”
He added that while some were inclined to take risks and start a business on their own or work for existing startups, their parents often urged them to try their hand at a large company first.
“Their parents, especially conventional mothers, (would say) no, you should learn how to start a business by working in a big company,” he said. “And then if you like (working in a startup), then you go for it.”
This is where Japan tends to lose the potential of entrepreneurs to spur the country’s innovation and generate new avenues of economic growth. According to Son, many are becoming too comfortable with the stability of life in Japanese companies.
“They are starting to be afraid of leaving the company and are standing at the border.”
Local media pointed to a recent report by Japan Venture Research, where Japanese venture capitalists raised 276 billion yen ($ 2.49 billion) in 2016. startups were losing value relative to others markets.
But in recent years, Japanese companies have stumbled: First, Sharp, a legendary electronics maker with declining fortunes, was taken over by Foxconn of Taiwan. Meanwhile, Toshiba is struggling to turn the tide and will likely have to sell off its precious memory business. Can this change the mindset in Japan and attract more talented individuals to the entrepreneurship and innovation sector? Not until the country’s social configuration changes, according to Son.
“In my gut feeling, in my opinion, we need a safety net to leave,” he said. “The Japanese company is designed for people to feel comfortable working for a big company.”
He explained that essential services such as insurance, medical systems or home loans are designed for workers in large companies. When employees quit their corporate jobs and become self-employed, he said, they could see their standard of living drop.
“So we need all kinds of safety nets, so that even if they go out to start a business on their own, the quality of life or the safety of life is the same as before.”
He has previously criticized the Japanese government and its efforts to foster the culture of startups in the country. Son told CNBC that his decision to set up Mistletoe’s second headquarters in Singapore was driven by the local government’s stance on innovation and entrepreneurship.
“The Singapore government is one of the most advanced and forward-thinking governments,” he said, adding that Japan’s size limited the government’s ability to quickly introduce more pro-innovator policies. “They have to think of every stakeholder in the country, so the speed is relatively slower than in small countries.”
The investment arm of the Singapore government, Temasek, for example, has supported some of the region’s most successful startups, including Grab and Lazada. To encourage risk taking in controlled environments, Singapore has implemented regulatory sandboxes in areas such as fintech and data analytics.
Son also said he felt the symptoms of change – in people’s state of mind – were on the horizon in Japan. To propel it forward, he believed in offering people new options, models and technologies to choose from. This is where it was essential to nurture young entrepreneurs and innovators, hence its interest in fostering an ecosystem conducive to start-ups.
“That’s why I started, not for economic reasons, not to be a celebrity. It’s our family’s work in the lifespan,” Son said.