Start-ups gain in appeal as some Japan Inc names fade

Written by Associated Press | Tokyo | Updated: Aug 28 2013, 10:23am hrs
In a shabby back-alley office in Shibuya, a Tokyo district known for youth culture and tech ventures, defectors from corporate Japan are hard at work for a little-known company they fervently believe will be the countrys next big manufacturing success.

Like a start-up anywhere in the world, its bare-bones set-up crackles with an optimistic energy and urgent sense of purpose. Whats different, for Japan, is that this start-ups talent is drawn from the ranks of famous companies such as Mitsubishi, Michelin and Nissan.

Kohshi Kuwahara, 26, worked for more than two years at electronics giant Panasonic before hopping to Terra Motors, a little-known venture that pays far less but is out to conquer the world with its stylish electric scooters. As with his colleagues at Terra, he resiled from the hidebound culture of big Japanese companies and felt a deep sense of frustration at their eclipse by rivals such as South Koreas Samsung and Americas Apple.

If youre stuck in a system that promotes just by seniority, its living a slow death like animals on a farm, said Kuwahara. I wanted to be in a tough competitive place.

Ventures are sprouting again after a decade marred by some high-profile failures and a striking aspect is their focus on manufacturing. Facebook and Google they are not. They are Sony and Toyota, all over again but with young fresh faces.

Terra Motors founder and president Toru Tokushige, 43, said one sign of progress for start-ups is that these days they have no problems recruiting quality people.

A few years ago, all he could hire were what Japan categorised as the losers, those who had no hopes of getting hired at an established company. As Sony and other mainstream brands lose their lustre, Terra is gaining a chance to shine.

Tokushiges 15 employees now hail from top-name companies, and the interns are enrolled in Hitotsubashi, one of Japans top universities.

He acknowledges that plans for his tiny company to break into global markets still sound a little crazy by mainstream Japanese standards. But he believes his way of doing business is superior to bigger companies, where decision-making tends to be bureaucratic, slow and oriented toward avoiding risks. Mainstream companies started out as ventures. That means old-time Japanese did it, he said of the humble beginnings of Honda, Sony, Panasonic and All Nippon Airways. We can do it, too.